Original article published on Linkedin by Dustin Lanier, CPPO, Founder/Principal at Civic Initiatives
As procurement professionals in the Southeast respond to Hurricane Helene and Hurricane Milton, it is a good time to refresh on FEMA and procurement during the initial response and the long recovery ahead.
Eligibility and Key Considerations
In addition to State, Tribal, and Local Governments, some Private Non-Profit (PNP) organizations can receive aid if they provide essential services like education, utilities, emergency response, or healthcare. Ensuring that your organization meets FEMA’s criteria and submitting a Request for Public Assistance (RPA) promptly is a fundamental responsibility, as RPA deadlines are strictly enforced.
Strategies for Timely and Compliant Procurement
Here are some strategies to ensure you meet FEMA’s procurement rules while addressing immediate needs:
- Procurement Under Emergency Conditions: FEMA allows for certain flexibilities during an emergency, but procurement must still adhere to core principles generally found in 2 CFR 200. All contracts must be in writing and include required federal provisions. When designing sourcing events, keep in mind to embed milestones or reasonable timelines - because after the immediate crisis passes, there is a strong emphasis on shifting to competitive procurement to ensure compliance
- Documenting Procurement Actions: Thorough documentation of every procurement decision is critical. Record why particular vendors were chosen, especially when using non-competitive methods, and ensure that costs are justified as "reasonable" under FEMA guidelines. Failure to do so could result in disallowed costs and lost reimbursement. Maintain detailed records of all purchases, contracts, and labor costs associated with the recovery.
- Leveraging a Strong Contract Portfolio: Having pre-negotiated, FEMA-compliant contracts in place before disaster strikes can save critical time. Additionally, federal provisions allow for cooperative contracting if the original contract was also bid to federal standards.
Anticipating Recovery
Looking beyond the immediate response, procurement teams must prepare for the long-term recovery phase. Here’s how:
- Cost Reasonableness: Always seek multiple quotes for significant procurements, even during an emergency. FEMA’s funding is contingent on demonstrating that costs are reasonable, and without multiple quotes or competitive bids, FEMA may reduce reimbursement.
- Managing Costs and Insurance Settlements: FEMA will not reimburse costs that are deemed unreasonable or duplicative of insurance payouts. Ensure that your insurance settlements are well-documented and clearly distinguish between FEMA-eligible and non-eligible expenses, such as business interruption.
- Extending Expertise: Funding received can be used to hire or onboard a recovery manager if the organization does not contain the internal expertise, or administrative consulting is generally allowable up to 10% of funding unless otherwise established in the specific funding agreements.
Avoiding Common Procurement Pitfalls
- Coordination and Continuity: Procurement professionals will often work with multiple FEMA representatives throughout a disaster. Ensure that you maintain consistent records of all communications, approvals, and advice. This will help prevent miscommunication as different FEMA staff rotate in and out of the recovery effort.
- Using incorrect contracting methodologies: Federal provisions don’t allow for cost plus a % of cost or percent of construction cost awards, and don’t allow for time and materials contracts without a clear ceiling price.
- “Affirmative Steps”: Federal guidelines require affirmative steps be taken to demonstrate how small and collectively disadvantaged firms are placed on solicitation lists, solicited when they are potential sources, and considering how your sourcing events can create opportunity. These “affirmative steps” are generally found in 200.321.b, and they are very important because you can’t go back and do it afterward if you didn’t do it at the start.
Fortunately, there is a lot of great information available to procurement professionals should familiarize themselves with FEMA’s guidance documents, such as the Public Assistance Program and Policy Guide (PAPPG), the Procurement Disaster Assistance Team (PDAT) Field Manual, and various fact sheets on the complex rules governing disaster-related procurement, helping to ensure that procurement activities remain compliant while also meeting urgent needs.
