NB_300_21_55 - NB 300-21-55 LTP – Guidance on Handling GLRI Contracts Impacted by Price Spikes
NB 300-21-55 LTP – Guidance on Handling GLRI Contracts Impacted by Price Spikes
National Bulletin: 300-21-55 Date: September 13, 2021  
Subject: LTP – Guidance on Handling GLRI Contracts Impacted by Price Spikes


Action Required By:   October 8, 2021  
 
Purpose.   To provide guidance for administering Coronavirus Agricultural Relief Payments (CARPs) for Great Lakes Restoration Initiative (GLRI) Environmental Quality Incentives Program (EQIP) contracts affected by higher material costs. 
 
Expiration Date.   September 30, 2022
 
Background.   The 2019 Coronavirus Pandemic has disrupted agricultural output and global supply chains. Over the past year, prices on commodities (e.g., lumber, steel, polyvinyl chloride, and concrete) that are commonly used for NRCS practices and activities have increased dramatically. Recent forecasts show that the prices of commodities are likely to remain higher for months, possibly years. In many cases, these increased prices have increased contract management activities associated with delayed practice implementation and cancelation requests. For participants who continue to implement their practices within their contracts, the increased material prices have generated additional financial costs that neither the participant nor NRCS anticipated at the time of contract obligation. To reduce the impacts to participants and ensure that contracts can be implemented in a timely manner, NRCS conducted an economic analysis on practices to determine which were most likely to be affected by increases in commodity prices for at least five Farm Bill programs spanning fiscal years (FYs) 2015 through 2021.      
 

Explanation.   NRCS has made additional financial assistance (FA) available to participants with Farm Bill-funded EQIP contracts affected by these higher commodity prices for practices completed in calendar year (CY) 2021. This additional assistance is based on the scenarios most affected by higher commodity prices. States will also provide additional FA to GLRI-EQIP participants with qualifying contracts.

   GLRI CARP Assistance 

This assistance will be provided via two discrete processes. In both cases, funds must be paid from each GLRI contract’s original account, which means CARP assistance depends upon whether additional funds are available in those accounts.

 

1.    Required process: NRCS has identified seven conservation practices (see Attachment A, Table 1) whose scenarios have increased in price the most (10% or more). Each of these scenarios has a new, NHQ-determined “CARP rate,” which represents the percentage change in the costs of materials related to each unique scenario. States will apply these new rates to pay for eligible practices that will be completed in CY 2021.

2.    Optional process: In addition to the seven practices identified in Attachment A, Table 1, NRCS has identified 18 practices (see Attachment A, Table 2) that have been affected by the commodity price increase to a lesser extent. Because this impact may vary by State, State Conservationists (STCs) who did not maximize the allowable cost share rates in prior years have an opportunity to establish a CARP rate for one or more of the 18 identified practices that are completed in CY 2021. States may increase payment percentage rates up to 75% (traditional) and 90% (historically underserved) as the basis for the State-established CARP. States may apply these new rates to pay for eligible practices that will be completed in CY 2021.


a.    These payment adjustments are optional, and STCs and directors have a one- time opportunity to decide whether to take advantage of the increased payments for these practices. Policy at 440–530.13E (“Once NRCS finalizes the payment schedules for a fiscal year, the payment schedules will apply to all contracts obligated within that fiscal year”) will be waived accordingly.

b.    States must submit requests to NHQ to provide CARPs (see Attachment B). State requests submitted for EQIP under NB 300-21-54 will also apply to GLRI-EQIP. A separate request for GLRI-EQIP should not be submitted. Each State’s request must include the following:

·       contract year

·       list of practices

·       proposed percentage rates by scenario including both HU and standard rates

·       basis to support specific practices being increased.

c.    Per NB 300-21-54, requests must be submitted through the “Policy Waiver” option available on the FAPD SharePoint Site for national review no later than September 3, 2021. Include the completed template as an attachment to the request.

If adequate funding is not available in the GLRI contract’s original account, the State will contact the GLRI Coordinator as to the possibility of a fund transfer from a State with available funding. If adequate funding cannot be obtained, the payment will not be feasible.

 

Processing GLRI CARPs and Contract Actions

The opportunity to provide a GLRI CARP is only offered for practices installed (and checked out, even if found deficient) in CY 2021. States must implement this opportunity equitably.

 

This payment adjustment cannot exceed contract limits or payment limitations. However, STCs and directors may waive any State payment caps; copies of these waivers should be included in each participant’s contract case file.

 

The National Payment Schedule Core Team built a CARP database to perform the following functions:

1.    Automatically compute the CARP rate for the seven eligible practices for all 50 States and territories.

2.    Identify which States are eligible to adjust the payment percentage rate for the 18 additional conservation practices.

3.    Calculate the adjusted payment percentage rate for scenarios tied to the 18 additional practices to ensure accuracy.

The CARP database is available on the FAPD SharePoint Site.

 

Completed Practices for which Payment has been Issued

State Offices must follow the steps below to determine which participants are eligible to receive a GLRI CARP:

1.    Run reports from ProTracts to identify the eligible practices already completed in CY 2021.

2.    States must utilize the database referenced above to calculate the individual CARPs for each scenario using the formula below:

a.    Final Practice Payment x CARP Rate = CARP.

Note: The CARP will be in addition to the payment already included in the contract.

b.    The CARPs must be a minimum of $300 to be eligible. This can be per contract item number (CIN) or an aggregate of CINs completed in CY 2021.


3.    For participants with FY 2015 and later contracts eligible to receive a CARP, States will follow the instructions below based on the contract status:

a.    For “active” contracts with completed practices, States should modify the contract to add the CARP scenario with the payment amount determined using the calculation provided above. (States should use the “add, edit, or delete” or “other” modification types in ProTracts.) Once obligated, the CARP should be issued as soon as possible.

b.    For “completed” contracts with completed practices, States should reactivate the contract and add the CARP scenario with the payment amount determined using the calculation provided above. Once obligated, the CARP should be issued as soon as possible.

c.    For “expired” contracts with completed practices, States will need to request a special payment for the amount determined using the calculation provided above. Once obligated, the CARP should be issued as soon as possible.

d.    CARPs are not authorized for “canceled” or “terminated” contracts.

Note: Special payments from GLRI contracts obligated under the FY 2015 GLRI Interagency Agreement (15/16 accounts) with EPA will need to be completed prior to the agreement’s expiration date of October 30, 2021.

4.    Participants do not need to sign the AD-1156-Revision of Plan/Schedule of Operations or Modification of a Contract or the NRCS-CPA-1245-Practice Approval and Payment Application. Enter the current date as the “participant signed date” in ProTracts.

5.    Use the streamlined Payment Review Checklist for CARPs (see Attachment C) to ensure all appropriate steps have been completed accurately.

 

Practices Completed in CY 2021 for which Payment has not been Issued

1.    States must utilize the database referenced above to calculate the individual CARPs for each scenario using the formula below:

a.    Final Installed Practice Extent x State Payment Amount per Unit x CARP Rate = CARP.

Note: The CARP will be in addition to the payment already included in the contract.

b.    The CARPs must be a minimum of $300 to be eligible. This can be per CIN or an aggregate of CINs completed in CY 2021.

2.    For participants with FY 2015 and later contracts eligible to receive a CARP, States should modify the contract to add the CARP scenario with the payment amount determined using the calculation provided above. (States should use the “add, edit, or delete” or “other” modification types in ProTracts.)

3.    Participants do not need to sign the AD-1156-Revision of Plan/Schedule of Operations or Modification of a Contract. Enter the current date as the “participant signed date” in ProTracts.

4.    States should process the CARP at the same time the original contract items are paid, if possible. Participants must sign the NRCS-CPA-1245 for the original practice. If the CARP cannot be processed at the same time as the original practice, the participant does not need to sign the NRCS-CPA-1245 for the CARP.

                             

 

For All CARPs
1. There is no deadline by which States must process CARPs, but the expectation is that they be made as soon as possible.
2. States should notify participants that received or will receive the CARP adjustment for practices using the template letter provided in Attachment D. If participants do not wish to keep the additional funds, they should contact their field offices for instructions on returning funds.
3. Participants do not need to sign these modifications. With each modification and payment, States must include a list of the practice scenarios the payment is supporting, along with the following statement as justification for the additional payment:
“This additional payment reflects the 2021 Coronavirus Agricultural Relief Payment NRCS is providing to mitigate the increased cost of contracts affected by commodity price spikes. As this payment is being applied to all affected contracts with available funds, participant signatures are not required.”

 

Required Actions
1. Determine whether to take advantage of the optional opportunity to provide CARPs to eligible participants. If pursuing this opportunity, submit all requests through the “Policy Waiver” option available on the FAPD SharePoint Site for national review no later than October 8, 2021.


As a reminder, State requests submitted for EQIP under NB 300-21-54 should include GLRI-EQIP. A separate request for GLRI-EQIP should not be submitted.

2. Determine which contracts are eligible for the CARPs under both processes and notify participants accordingly.
3. Process CARPs as appropriate.

 
Contact.   Direct general questions to the FAPD SharePoint Site. Questions specific to available funding for GLRI-EQIP CARPs should be directed to Matt Otto, GLRI Coordinator, at matt.otto@usda.gov.     
 
 

 /s/

JIMMY BRAMBLETT   
Deputy Chief for Programs  
 
 

Attachment A: Practices Eligible for CARP Adjustments

Attachment B: Template for Requesting Payment Rate Adjustments

Attachment C: Payment Review Checklist for CARPs

Attachment D: Participant Notification Letter for CARPs

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