State of New York. One of a cost planner's responsibilities is to prevent scope creep that can eat into a budget and cause cost overruns. Between June 25, 2013 and December 8, 2015, FEMA obligated several Project Worksheets (PWs) to document emergency protective measures and disaster-related repairs. The Applicant appealed FEMAs LPFA determinations, arguing that the Expense Allocation Methodology was permissible under its interpretation of applicable regulations and FEMA policy, and that the travel costs so allocated were eligible for reimbursement as either DAC or contract costs. This can include software, equipment, and raw materials, but it also can include manpower, assuming that this manpower is specific to the product, department, or project. Please inform the Applicant of my decision. [24] By contrast, costs a grantee or subgrantee incurs for a common or joint purpose benefitting more than one cost objective that are not readily assignable to the cost objectives specifically benefitted[25] are indirect costs. 20, 2018) (tables showing indirect travel costs as ineligible for reimbursement as either contract costs or as DAC for PW 1853 and PW 4113, respectively) (collectively, LPFA Determinations). Bd., at 1 (Nov. 7, 2017) (citing Title 44 Code of Federal Regulations (44 C.F.R.) See also DAP 9525.11, Payment of Contractors for Grant Management Tasks, at 1 (Apr. These are the costs that a project incurs in its core day-to-day management. (Sept. 8, 2009) (concerning Disaster Assistance Policy (DAP) 9525.9, Section 324 Management Costs and Direct Administrative Costs (Nov. 13, 2007) [hereinafter DAP 9525.9] and FEMA Recovery Policy 9525.14, Grantee Administrative Costs (Nov. 6, 2007)) [Memorandum hereinafter referred to as DAC Guidance]. Costs of Subgrantees, at 3. [4] During the period in which FEMA initially obligated these PWs, the Applicant, the New York State Division of Homeland Security and . In an attached memorandum, the Grantee requested that FEMA provide additional rationale for its denial to allow the Applicant to provide responsive supplemental documentation. 3. From October 27, 2012, to November 9, 2012, Hurricane Sandy caused damage throughout the. The Applicant hired project management contractors, including Camp Dresser McKee & Smith (CDM Smith), to assist with the administration of multiple Public Assistance (PA) grants. On November 7, 2017, FEMA issued a Request for Information (RFI), seeking information that satisfied regulatory appeal requirements. Of Mgmt. Level of precision: the degree to which activity cost estimates will be rounded up or down (e.g., US$100.49 to US$100, or US$995.59 to US $1,000) Level of accuracy: the acceptable range (e.g., 10%) Organizational . 44 C.F.R. Indirect Cost is nothing to do with the Project Construction and these are Project Management Team, Temporary works (Labor materials, equipment and subcontractors) works that are not related to the Project Constructions, Adminstration Team, Utilities, Misc. By letters dated between January 18, 2018 and April 5, 2018, the Applicant transmitted its first appeals to the Grantee (Applicants First Appeals). Coord. However, [n]o field employee can commit the [A]gency to pay more than the statute and regulations require[11] and FEMA must approve a scope of eligible work and costs before funding an project. FEMA concluded the work performed by Hoffpauir to support the eligibility of the changes to the approved scopes of work was eligible for reimbursement as DAC/COI, not PM. Reg. The Applicant stated the costs were PM rather than DAC because they were related to the review and documentation of change orders for PWs 533 and 2397. Eligible PM activities include oversight of an eligible project from the design phase to the completion of work. As such, they are a part of individual project costs. OMB (July 9, 2018), enclosing the First Appeal Determinations. They also kept records of time spent working on each project task by assigning different codes to different projects, tasks, and categories of tasks. 206.201(i)(1), (j); 206.206(a). Further, cost control can be done in the area of overhead costs and general and administrative expenses. The Grantee found that certain task descriptions of work performed after March 2011, all of which the Applicant had previously categorized as direct management tasks, should be considered for a move to the PM PW. Costs of Subgrantees, at 2 (Apr. [24] Indirect costs are not reimbursable as DAC. Share sensitive information only on official, secure websites.. PMI, PMP, CAPM, PMI-ACP and PMBOK Guide are trademarks of Project Management Institute Inc. [31] See 2 C.F.R. On first appeal, FEMAs Regional Administrator (RA) upheld the denial of indirect costs as either DAC or contract costs. In addition to the underlying projects, FEMA funded the Applicants project management (PM) and direct administrative costs (DAC)/close-out incentive (COI) costs for all disaster projects in two separate PWs. [10] DAC Memo at Attachment; RRP 9525.6, Project Supervision and Mgmt. 206.201(j) defines project approval as when the Regional Director or a designee reviews and signs an approval of work and costs on a PW. Pub. Accordingly, I am denying the appeal. Under FEMA Disaster Assistance Policy (DAP) 9525.9. these expenses are therefore indirect costs and are not eligible for reimbursement as Direct Administrative Costs (DAC). The Applicant submitted its second appeals via letters dated September 10, 2018 and reiterated its prior arguments from its first appeals. The Applicant claimed that Section 207.6 (c) of Title 44 of the Code of Federal Regulations (44 C.F.R. Indirect Costs: The costs that are indirectly related to the project. OMB, at 2 (Jan. 6, 2017) (FEMA will not amend the PWs to include apportioned travel expenses spread across multiple PWs as DAC.). Examples of indirect costs include the costs of: Lets take a specific case of an IT services company operating out of a rental facility and handling multiple projects of varying sizes and durations from the facility. The Applicant stated it believed that, since project coordination and project management were both contract costs, travel expenses assigned to these categories should also be eligible for PA funding as contract costs. The overhead costs for this project are the office setup and shared services. Direct costs are expenses tied directly to the product or the project. In 2015, the Applicant, the New York State Division of Homeland Security & Emergency Services (Grantee), and FEMA agreed to a process that would allow for further review of certain contractor expenses without delaying reimbursement for other work done on the various PWs. Indirect costs are costs that cannot be directly attributed to a specific project, e.g. [14] Applicants First Appeals, Nassau County Position Paper Consultant Expenses as Direct Administrative Costs, [hereinafter Applicant Position Paper] at 1 2 (noting ongoing contention and disagreement, and referring to FEMAs current statement that a consultants [sic] expenses would only be eligible as DAC if that consultant worked on a single project all day as being void of logic.). Copyright 2022 All rights are reserved. 200.405(d)) (emphasis from original omitted). OMB (Mar. A .gov website belongs to an official government organization in the United States. [14] The Applicant claimed that FEMA and the Applicant had agreed that the Applicant would record the expenses associated with Project Management and Project Coordination tasks as contract costs, rather than DAC. Major classification of construction projects costs are: Project direct costs Project Indirect Costs Total Project Cost = Project Direct Costs + Project Indirect Costs Direct Costs of Construction Project The costs and expenses that are accountable directly on a facility, function or product are called as direct costs. 405(d) in support of its appeal; however, this regulation does not apply to disasters declared before December 26, 2014. Accordingly, I am denying the appeal. The Applicant stated that it believed that, since project coordination and project management were both contract costs, travel expenses assigned to these categories should also be eligible for PA funding as contract costs. ), read in conjunction with DAP 9525.9, allows applicants to claim, as DAC, those costs which can be identified separately and assigned to a specific project if such costs can be and are attributed to individual projects.[9] The Applicant supported this argument by pointing to a pair of U.S. Office of Management and Budget (OMB) regulations, which encourage applicants to allocate reasonable costs[10] among multiple projects, if said costs benefit two or more projects in proportions that can be determined without undue effort or cost.[11] The Applicant also provided meeting notes, email correspondence, and various memoranda, and in a supplemental narrative, stated that the Project Coordination category of work was the creation of FEMA, in order to capture certain expenses from CDM Smiths employees as contract costs, rather than DAC. Officers, and Disaster Assistance Div. Commr, New York State Division of Homeland Security and Emergency Services (NYSHSES) and Dep. [1] Email from N.Y. St. DR-4085 PA Operations Lead, to N.Y. Sandy Branch Chief, FEMA Region II, (Oct. 4, 2016); CDM Smith Memorandum, Determination and Allocation of Expense Portion of Project Costs. They also kept records of time spent working on each project task by assigning different codes to different projects, tasks, and categories of tasks. New York State Division of Homeland Security and Emergency Services. CDM Smiths employees often traveled to the Applicants jurisdiction and worked on multiple projects during each trip or billing period. In a November 6, 2015 letter, the Applicant formally requested FEMA move $672,287.00 in costs incurred by its contractor Hoffpauir Architects, LLC (Hoffpauir) for PWs 533 and 2397 from the DAC/COI PW to the PM PW. 207.2, 207.6(c)). [22] DAP 9525.9, at 2 (citing 44 C.F.R. Prior to these submissions, however, FEMA had informed the Applicant by letter dated January 6, 2017 (DAC Determination Memo) that CDM Smiths travel expenses associated with direct administrative and project coordination tasks were indirect costs, and not eligible for reimbursement as DAC. [31] City of Duluth, FEMA-4069-DR-MN, at 5. Prior to these submissions, however, FEMA had informed the Applicant by letter dated January 6, 2017 (DAC Determination Memo) that CDM Smiths travel expenses associated with direct administrative and project coordination tasks were indirect costs, and not eligible for reimbursement as DAC. Direct costs are easy to identify, trace and quantify. By letter dated January 6, 2017, FEMA informed the Applicant that CDM Smiths travel expenses associated with direct administrative and project coordination tasks were not eligible for reimbursement as Direct Administrative Costs (DAC). While the costs incurred in setting up the office space can be general overhead cost as it is a one-time cost and is borne by all the projects in the organization. Hello Gerald,Thanks for your feedback. It requested the re-classification of those costs because expenses captured in the DAC/COI PW were subject to the 3 percent cap, whereas PM costs were fully reimbursed. As an example, in PW 2608, the Applicant claims a CDM Smith employee spent 234.5 hours performing work on 27 projects which has been individually tracked and documented on CDM Smiths invoice #3.. 200.110 (2014) (specifying the effective date for the Uniform Rules under 2 C.F.R. What Project Managers Must Know About This Hot Methodology, Overcoming the Challenges of Delivering Projects on Time and Without Cost Overruns, The Opportunities and Challenges of Project Management in Virtual Workplaces, Costs in Project Management - Costs associated with the Projects. First, the RA found that because the work involved discussions on the eligibility of the changes to the approved scopes of work and were administrative in nature, the costs associated with that time were correctly classified as DAC/COI rather than PM. A direct cost is a price that can be directly tied to the production of specific goods or services. Finally, in an attachment containing an undated position paper. With the exception of the procedural background of each appeal, the accompanying administrative record indices, and the examples of how the Applicant applied the Expense Allocation Methodology in each PW (found on page 2 of the First Appeal Determinations), the First Appeal Determinations are otherwise identical. This is an addition to my 80+ Commonly Confused Concepts for PMP Certification. pt. [16] The Applicant noted that assignment/allocation of consultant expenses as DAC was a continuing source of contention, and disputed FEMAs consistent interpretation of DAP 9525.9. ProjectManager is a cloud-based project management software with online Gantt charts and resource management features that give you control over your project costs. [6] FEMA published post-disaster guidance for DAC charges that applies retroactively to this disaster in a September 8, 2009 memorandum. [5] Ineligible PM activities include those necessary in requesting and obtaining Federal disaster subgrants, such as attending Grantee and FEMA meetings or completing documents to request assistance. You can use direct costs as production inputs in the next period, which makes them easier to forecast and manage than indirect costs. Specifically, the Applicant seeks pro rata allocations of travel and lodging expenses across multiple PWs, based upon the hours worked on a given PW during the course of a given trip. One such example was the direct management task description activities related to developing the scope of work component for one specific project worksheet.. [24] DAP 9525.9, at 2 (citing 44 C.F.R. Assistance, GOHSEP, at 2 (Dec. 6, 2017) (citing to task code 15 from Hoffpauir PM Task Descriptions). Between June 25, 2013 and December 8, 2015, FEMA obligated several Project Worksheets (PWs) to document emergency protective measures and disaster-related repairs. From October 27, 2012, to November 9, 2012, Hurricane Sandy caused damage in the State of New York. Any variance to the budget must be controlled by the controlling the impact of the cost changes. [13] Since a FEMA designee never signed a PW approving the requested transfer of costs, the Agency does not find merit in the Applicants argument concerning reliance on prior FEMA communication. [13] In each of the Final RFIs, FEMA requested documentation: defining or describing project coordination costs and project coordination travel costs; explaining how project coordination travel costs differ from travel expenses categorized as DAC; and/or supporting the Applicants claims that DAP 9525.9 does not apply to the contractors project coordination travel costs and/or that such costs should qualify as eligible contract costs.[14]. The cost management plan should include the plan for controlling the costs of the project. By letter dated January 6, 2017 (DAC Determination Memo), however, FEMA informed the Applicant that CDM Smiths indirect travel expenses associated with direct administrative and project coordination tasks were not eligible for reimbursement as DAC. During administration of the projects, CDM Smith utilized a methodology to allocate travel expenses across multiple projects (Expense Allocation Methodology), described in a Memorandum dated January 8, 2013 (, Between June 28, 2017 and February 7, 2018, the Grantee submitted to FEMA the Applicants Large Project Final Accounting (LPFA) for the PWs (. [24] A .gov website belongs to an official government organization in the United States. [1] See Letter from Dir. They also kept records of time spent working on each project task by assigning different codes to different projects, tasks, and categories of tasks. CDM Smiths employees often traveled to the Applicants jurisdiction and worked on multiple projects over the course of a day, billing period, and trip. An official website of the United States government. Accordingly, the Applicants request to re-classify the DAC charges to PM costs is denied. The Applicant also relies on the indirect cost allocation under 2 C.F.R. By December 8, 2015, FEMA had obligated funds under Project Worksheet (PW) 4100 for disaster-related repairs to the Facility totaling $1,037,810.13, including $31,437.50 in direct administrative costs (DAC). [26] See DAC Guidance, at Attachment (emphasis in original). FEMA captured the replacement of the Applicants Administrative Office Building in Project Worksheet (PW) 533 and the replacement of South Cameron High School in PW 2397. In response, FEMA issued a letter dated May 3, 2017 denying the Applicants request. In this post, well compare two formulas for calculating Estimate at Completion (EAC) in Earned Value Management (EVM) as part of project cost estimation. In this post, well learn about the difference between direct costs and indirect costs in project management with detailed examples and explanation. The FEMA Region II Regional Administrator (RA) denied each of the Applicants First Appeals in decisions dated August 20, 2018 (First Appeal Determinations). New York State Division of Homeland Security and Emergency Services, Re: Second Appeal Nassau County, PA ID 059-99059-00, FEMA-4085-DR-NY, Project Worksheets (PWs) 1853, and 4113 Direct Administrative Costs Project Management Costs. FEMA awarded PW 4831 for all DAC/COI costs with a 3 percent funding cap.[1]. Although the Applicant notes that a FEMA representative stated he would consider moving the requested costs to the PM PW, a FEMA designee never signed a PW approving the requested transfer. FEMA issued a Final Request for Information (Final RFI) for each of the PWs via letters dated between June 19, 2018 and June 28, 2018. Between February 29, 2016 and December 11, 2017, the Grantee submitted to FEMA the Applicants Large Project Final Accounting (LPFA) for the PWs (LPFA Requests). and Operation expenses. 16 through June 1, 2018). Dir., Nassau Cty. 405(d) in support of its appeal; however, this regulation does not apply to disasters declared before December 26, 2014.[31]. Labor: The costs of the various categories of labor in the project are estimated as well as the hourly cost. Bd. If it is a project, controlling direct costs is vital to controlling the budget. The re-classification would remove those costs from the 3 percent DAC cap. Direct costs - Direct costs are those directly involved with, and necessary in order to complete said project. In 2015, the Applicant, the, FEMA policy provides that travel expenses related to one specific PW qualify as DAC, while travel expenses related to general support and not directly tied to. Accordingly, under DAP 9525.9, the Applicant cannot allocate or otherwise assign such expenses to individual projects as DAC or contract costs. Off. 405(d) in support of its appeal; however, this regulation does not apply to disasters declared before December 26, 2014.[33]. Accordingly, under DAP 9525.9, the Applicant cannot allocate or otherwise assign such expenses to individual projects as DAC or contract costs. [4] This determination rested on FEMA Disaster Assistance Policy (DAP) 9525.9, Section 324 Management Costs and Direct Administrative Costs (November 13, 2007), and the Memorandum from the Assistant Administrator, Disaster Assistance Directorate, dated September 8, 2009,[5] (DAC Guidance). The use of this material is free for learning and education purpose. It can be measured by using a Cost Performance Index or CPI which measures the ratio of the Earned value with regards to the Actual cost incurred on the project. Applicable FEMA guidance makes clear that activities related to developing the scope of work component for one specific PW and actions carried out to support the request for federal assistance, i.e., FEMAs determination of the work and cost eligibility for one specific project, are DAC, not PM costs. Please inform the Applicant of my decision. On November 7, 2017, FEMA issued a Request for Information (RFI), seeking information that satisfied regulatory appeal requirements. The appeal is accordingly denied. Commr, NYSHSES and Dep. [21] First Appeal Determinations, at 5 (citing 2 C.F.R. CDM Smith allocated these expenses on a pro rata basis according to the eligible hours worked by a given employee (Expense Allocation Methodology). These can include the salaries paid to the resources, the billing rate of the resources and costs of the software and hardware that are used for building the website, These costs are spread out against many projects and cannot be linked to one project alone. [13] Letter from Section Chief, Appeals & Audits, Recovery Div., FEMA Region II, to Dep. [7] Letters from Dep. The article is Written By Prachi Juneja and Reviewed By Management Study Guide Content Team. 44 C.F.R. During the period in which FEMA initially obligated these PWs, the Applicant, the New York State Division of Homeland Security and Emergency Services (Grantee), and FEMA met and discussed the division of certain CDM Smith disaster consulting work into the following three categories: (1) Direct Administrative Costs (DAC), (2) project management, and (3) project coordination. Since the travel expenses at issue benefitted more than one PW, they are indirect costs under DAP 9525.9, and the Applicant cannot allocate or otherwise assign such expenses to individual projects as DAC or as contract costs. During the period in which FEMA initially obligated these PWs, the Applicant, the New York State Division of Homeland Security and Emergency Services (Grantee), and FEMA met and discussed the division of certain CDM Smith disaster consulting work into the following three categories: (1) Direct Administrative Costs (DAC), (2) project management, and (3) project coordination. [11] Applicants First Appeals, at 4 (quoting 2 C.F.R. [1] [19] First Appeal Determinations, at 5 (citing 2 C.F.R. The changes orders related to additional work beyond that previously approved, such as the installation of additional electronic and fire safety equipment. [15] In its RFI Responses, the Applicant provided meeting notes, email correspondence, and various memoranda, and stated that the Project Coordination category of work was the creation of FEMA, in order to capture certain expenses from CDM Smiths employees as contract costs, rather than DAC. management, general administration, rental and utility costs. [25] The FEMA Region II Regional Administrator (RA) denied each of the Applicants First Appeals in decisions dated August 20, 2018 (First Appeal Determinations). 207.2, 207.6(c)). CDM Smith allocated these expenses on a pro rata basis according to the eligible hours worked by a given employee (Expense Allocation Methodology). They also kept records of time spent working on each project task by assigning different codes to different projects, tasks, and categories of tasks. The Applicant is appealing the U.S. Department of Homeland Securitys Federal Emergency Management Agencys (FEMA). Specifically, the Applicant seeks pro rata allocations of travel and lodging expenses across multiple PWs, based upon the hours worked on a given PW during the course of a given trip. Accordingly, the Applicants request to re-classify the DAC charges to PM costs is denied. From October 27, 2012, to November 9, 2012, Hurricane Sandy caused damage throughout the. The costs at issue in this appeal relate to work Hoffpauir performed to persuade FEMA that the changes to the approved scopes of work for PWs 533 and 2397 were eligible for funding (e.g., preparing for/attending meetings with the Grantee and FEMA, and providing documentation upon request). Providing lunch every Friday to the project team assigned for full time of the 6-week duration project to keep the team motivated and reward them for their work each week.Here what is about cost of lunch, is it direct or indirect cost? CDM Smiths employees often traveled to the Applicants jurisdiction and worked on multiple projects during each trip or billing period. This has to be constantly monitored and tweaked, depending on changing circumstances. One such example was the direct management task description activities related to developing the scope of work component for one specific project worksheet.[2]. See also DAP 9525.11, Payment of Contractors for Grant Management Tasks, at 1 (Apr. Between March 12, 2018 and March 20, 2018, following its final inspection of the LPFA Requests, FEMA applied the DAC Determination Memo to each PW and denied funding for the types of travel costs that it had previously found to be indirect costs, as those indirect costs were ineligible for reimbursement as DAC or as contract costs. 225 (2012) (codifying OMB CIRCULAR A-87, which sets forth the applicable cost principles for the Applicant in FEMA-4085-DR-NY based on the October 30, 2012 declaration date). Commr, NYSHSES and Dep. [12] In this supplemental narrative, the Applicant also explained that it had allocated all of CDM Smiths travel expenses in accordance with the Expense Allocation Methodology, including DAC travel costs and Project Coordination travel costs. [4] Letter from Superintendent, Cameron Par. the cost units of measure. pt. [26] FEMA Second Appeal Analysis, City of Duluth, Multiple PWs, FEMA-4069-DR-MN, at 5 (June 15, 2015) [hereinafter City of Duluth]. CDM Smith utilized its Expense Allocation Methodology to divide travel expenses incurred by its employees to benefit multiple PWs across said PWs on a prorated basis. This is in response to a letter from your office dated September 11, 2019, which transmitted the referenced second appeal on behalf of the Cameron Parish School Board (Applicant). 200.405(d)) (emphasis from original omitted). Dir., Nassau Cty. Here, the Applicant attempts to claim as DAC and/or contract costs certain travel expenses that its contractors incurred, despite its acknowledgment that CDM Smiths employees worked on several PWs over the course of each trip at issue. 200.405 (d), as cited by the Grantee, state that if a cost benefits two or more projects or activities in proportions that can be determined without undue effort or cost, the cost must be allocated to the projects based on the proportional benefit. 206.206. The Applicant hired project management contractors, including Camp Dresser McKee & Smith (CDM Smith), to assist with the administration of multiple Public Assistance (PA) grants. Budget Dir., Nassau Cty. The Applicant states Hoffpauir relied on an instruction from a Grantee representative to continue the discussions on the changes to the approved scopes of work. Please reference authorship of content used, including link(s) to ManagementStudyGuide.com and the content page url. 200.405, since 2 C.F.R. I missed answering this question earlier. Dir., Nassau Cty. [32], The Applicant also relies on the indirect cost allocation under 2 C.F.R. Direct cost Direct costs are those directly linked to doing the work of the project. Conclusion: Nassau Countys (Applicant) contractors employees did not incur travel expenses for specific projects, and instead such expenses benefitted more than one Project Worksheet (PW). FEMA awarded PW 4831 for all of the Applicants direct administrative costs (DAC)/close-out incentive costs, with funding capped at 3 percent. [30] DAP 9525.9, at 2 4; DAC Guidance, at 3 and Attachment; City of Duluth, FEMA-4069-DR-MN, at 4. This determination is the final decision on this matter pursuant to 44 C.F.R. This CDM Smith employee claimed 1.5 hours of work eligible as DAC during the period covered by invoice #3 and therefore the Applicant seeks reimbursement for $58.19 ($38.79/hour x 1.5 hours) in travel expenses it associates with PW 2608. ), read in conjunction with DAP 9525.9, allows applicants to claim, as DAC, those costs which can be identified separately and, In this supplemental narrative, the Applicant also explained that it had allocated all of CDM Smiths travel expenses in accordance with the Expense Allocation Methodology, including DAC travel costs and Project Coordination travel costs. [4] Letter from N.Y. Sandy Branch Chief, FEMA Region II, to Dep. [4] Letter from N.Y. Sandy Branch Chief, FEMA Region II, to Dep. Cost estimation is the process of predicting the cost of a project based on its scope and complexity. 1 are the types of direct costs Identified in this case. This post is another in the series on PMP Study Notes to help make your concepts crystal clear and give you confidence as you go into the PMP exam. The RA also determined that FEMA had not committed to approving the re-classification request. Between January 25, 2018 and April 13, 2018, the Grantee transmitted the Applicants First Appeals to FEMA Region II. On first appeal, FEMA Region IIs Regional Administrator (RA) upheld the denial of costs either as DAC or as contract costs. at 22 (undated position paper referring to FEMAs current statement that a consultants [sic] expenses would only be eligible as DAC if that consultant worked on a single project all day as void of logic.). In my 12 experienced in Construction Project Managment (EPCM) Direct Cost is something to do with the Project Construction or with the Construction Cost (Labor, Materials, Equipments and Subcontrctors as well). The Applicant also argued that it would have been unreasonable to restrict CDM Smiths employees to a single PW over the course of a given trip. Indirect Costs. Accordingly, this appeal is denied. , expenses allocated to every task for all PWs in proportion to the hours worked on the task are not eligible as DAC. A cost planner, also known as a cost estimator, determines how much a project will cost. Reg. Indirect Costs: These are costs that are incurred by the company/individual and occur at the same time as the project. If you have other examples of direct and indirect costs that are not listed here, please contribute them to this post by using the comments section below. Indirect costs are costs that cannot be directly attributed to a specific project, e.g. The costs at issue in this appeal relate to work Hoffpauir performed to persuade FEMA that the changes to the approved scopes of work for PWs 533 and 2397 were eligible for funding (e.g., preparing for/attending meetings with the Grantee and FEMA, and providing documentation upon request). Following its final inspection of each Large Project Final Accounting (LPFA) for the PWs, FEMA adjusted the PWs to include DAC that it found the Applicant had substantiated, but denied funding for indirect travel costs in each PW, in accordance with its January 6, 2017 letter. A lock ( The Applicant also argued that it would have been unreasonable to restrict CDM Smiths employees to a single PW over the course of a given trip. [17] 2 Letters from Regl Admr, FEMA Region II, to Dep. [5] Response and Recovery Policy (RRP) 9525.6, Project Supervision and Mgmt. OMB, to Commr, NYSHSES (Apr. 22, 2001). OMB, to Commr, NYSHSES (Jan. 18, 2018 through Apr. On May 11, 2018, the Grantee transmitted the Applicants First Appeals to FEMA Region II, expressing support for them. Indirect Costs. Indirect cost Budget Dir., Nassau Cty. Following its final inspection of the LPFA Requests, between October 31, 2017 and January 31, 2018, FEMA applied the DAC Determination Memo and denied funding for the types of travel costs that it had previously found to be indirect costs, as those indirect costs were ineligible for reimbursement as DAC or as contract costs. [15] Letters from Section Chief, Appeals & Audits, Recovery Div., FEMA Region II, to Dep. Between April 16, 2018 and June 1, 2018, the Applicant responded to the Final RFIs (RFI Responses). The Applicant reiterated that Hoffpauir spent significant time and effort on discussing the changes to the approved scopes of work with FEMA and the Louisiana Governors Office of Homeland Security and Emergency Preparedness (Grantee) after construction of the above-referenced projects. FEMA awarded PW 4653 for all PM costs with no cap. 22, 2001) (although grantees may receive reimbursement for all eligible contractor costs, including travel and per diem, [t]here is no similar provision for subgrantees because all of their grant management and administrative costs are required by statute to be considered under the Statutory Administrative Costs allowance (also known as the subgrantees Administrative Allowance or sliding scale).). On May 23, 2019, the FEMA Region VI Regional Administrator (RA) issued a first appeal decision denying the appeal. [9] Applicants First Appeals, at 3 (emphasis in original). We are a ISO 2001:2015 Certified Education Provider. Dir., Nassau Cty. 22, 2001) (although grantees may receive reimbursement for all eligible contractor costs, including travel and per diem, [t]here is no similar provision for subgrantees because all of their grant management and administrative costs are required by statute to be considered under the Statutory Administrative Costs allowance (also known as the subgrantees Administrative Allowance or sliding scale).). The following are the costs associated with the projects. Eligible DAC work includes activities related to developing the scope of work (SOW) component for one specific project worksheet. 200.404 (2014). $512,258.75 to project management (PM) costs. As explained in the enclosed analysis, I have determined that since the travel expenses at issue benefitted more than one PW, they are indirect costs under FEMA Disaster Assistance Policy (DAP) 9525.9, Section 324 Management Costs and Direct Administrative Costs (November 13, 2007), and the Applicant cannot allocate or assign such expenses to individual projects as DAC. [11] Columbus Regl. [18], The FEMA Region II Regional Administrator (RA) denied each of the Applicants First Appeals in decisions dated July 9, 2018 (First Appeal Determinations). Share sensitive information only on official, secure websites.. Bidding as an Essential Skill for Project Managers, Time/Material Billing & Fixed Cost Billing, Why Project Managers Should Not Overpromise and Underestimate at the Same Time, The Need for Person Independence in Software Project Management, The Importance of Ethics in Project Management, Why Most Projects Run into Problems and How to Avoid them and What to do about it, Why Project Managers Must Master the Art of Dealing with Disruptions, Why Project Managers Must Focus on Last Mile Connectivity to Ensure Success, How Project Managers Can Benefit from Knowledge Management Systems, Why Project Managers Must be Prepared to Deal with Disruptions of All Kinds, Transitioning to Agile? The Applicant also relies on the indirect cost allocation under 2 C.F.R. 206.206. Environmental & Historic Preservation Guidance, Real Estate, Lending or Insurance Professionals, State, Local, Tribal or Territorial Governments, Preparedness Activities, Research & Webinars, Voluntary & Community-Based Organizations, Environmental Planning & Historic Preservation, National Business Emergency Operations Center, From October 27, 2012, to November 9, 2012, Hurricane Sandy caused damage in the State of New York. 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