NB_300_21_57 - NB 300-21-57 LTP – Guidance on Handling Fiscal Year (FY) 2012 through 2014 Contracts Impacted by Price Spikes
NB 300-21-57 LTP – Guidance on Handling Fiscal Year (FY) 2012 through 2014 Contracts Impacted by Price Spikes
National Bulletin: 300-21-57 Date: September 24, 2021
Subject: LTP – Guidance on Handling Fiscal Year (FY) 2012 through 2014 Contracts Impacted by Price Spikes


Action Required By:  October 22, 2021

 

Purpose.  To provide guidance for administering Coronavirus Agricultural Relief Payments (CARPs) for FY 2012, FY 2013, and FY 2014 Environmental Quality Incentives Program (EQIP) contracts affected by higher material costs.   

 

Expiration Date.  September 30, 2022

 

Background.  The 2019 Coronavirus Disease 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 material 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 FYs 2015 through 2021.

 

Explanation.  NRCS will make additional financial assistance (FA) available to participants with FY 2012, FY 2013, and FY 2014 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.

Note: For information on CARPs for traditional EQIP contracts from FY 2015 through FY 2021, please consult NB 300-21-54 LTP – Guidance on Handling Contracts Impacted by Price Spikes. For information on CARPs for Great Lakes Restoration Initiative (GLRI) EQIP contracts from FY 2015 through FY 2021, please consult NB 300-21-55 LTP – Guidance on Handling GLRI Contracts Impacted by Price Spikes. CARPs are not available for GLRI contracts prior to FY 2015.

CARP Assistance.  This assistance will be provided via two discrete processes:

1.  Required process: NRCS has identified 7 conservation practices (see attachment A, Table A) whose scenarios have increased in price the most (10 percent or more). Each of these scenarios has a new, National Headquarters (NHQ)-determined “CARP rate,” which represents the percentage change in the costs of materials related to each unique scenario.

States need to apply these payments automatically to all eligible contracts, and NHQ will provide the additional funds to States for this adjustment.

i. Estimated funds needed will be provided to States. States may only use these funds to pay for CARPs associated with the seven practices that will be completed in CY 2021.
ii. If additional funds are needed, States will need to submit a request  through the “Cost Overrun Request” portal on the FAPD SharePoint.

2.  Optional process: In addition to the seven practices identified in attachment A, Table A, NRCS has identified 18 practices (see attachment A, Table B) 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 percent (traditional) and 90 percent (historically underserved) as the basis for the State-established CARP.

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. The CARP will only be authorized for practices completed in CY 2021.

c. Funds will come from States’ existing FY 2021 or FY 2022 allocations.

d. Using the template provided (see attachment B), each State’s request must include the following:

Contract year, list of practices, proposed percentage rates by scenario including both HU and standard rates, and basis to support specific practices being increased.

e. Requests must be submitted through the “Policy Waiver” option available on the FAPD SharePoint Site for national review no later than October 22, 2021. Include the completed template as an attachment to the request.

Note: For both processes, States must subtract any Index Payment Rate (IPR) adjustments provided to FY 2013 contract participants from the applicable CARP.

CARP Assistance for the Regional Conservation Partnership Program (RCPP)-EQIP.  States may also provide CARP assistance to participants with RCPP-EQIP contracts based on the guidance in this section, provided the following criteria can be met:

1. The RCPP project has sufficient remaining (unobligated) FA funds available to support the provision of CARP assistance to all eligible participants. States should not expect an additional allocation from NHQ for either the 7 “required” practices or the 18 “optional” practices for RCPP contracts.

2. The STC confirms with the project sponsor that the additional payment is needed/desired to help meet the project’s objectives.

3. The STC confirms that the original RCPP project deliverables will not be compromised by repurposing of unobligated FA (e.g. if RCPP-EQIP deliverables are acre specific, acres enrolled would not be reduced by use of some FA funds for CARP).

States that can meet these criteria will need to issue a State bulletin that clearly identifies which RCPP-EQIP project contracts are eligible to receive a CARP.

Processing CARPs and Contract Actions.  The opportunity to provide a 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 already been issued.  State Offices must follow the steps below to ensure all eligible participants receive a CARP:

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

2. States must utilize the database referenced 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.

c. For participants with FY 2013 contracts who received an IPR adjustment, States must subtract the amount of the IPR adjustment from the CARP to calculate the allowable payment.

3. For FY 2012 contracts affected by price spikes, please contact NHQ on a contract- specific basis.

4. For participants with FY 2013 and FY 2014 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. (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. 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. Once obligated, the CARP should be issued as soon as possible.

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

5. 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.

6. 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 already been issued.

1. States must utilize the database referenced 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.

c. For participants with FY 2013 contracts who received an IPR adjustment, States must subtract the amount of the IPR adjustment from the CARP to calculate the allowable payment.

2. For FY 2012 contracts affected by price spikes, please contact NHQ on a contract- specific basis.

3. For participants with FY 2013 and FY 2014 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. (States should use the “add, edit, or delete” or “other” modification types in ProTracts.)

4. 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.

5. 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 automatically to all affected contracts, participant signatures are not required.”

Required Actions.

1. Determine whether to take advantage of the optional opportunity to adjust payment rates for the 18 eligible practices. If pursuing this option, submit all requests through the “Policy Waiver” option available on the FAPD SharePoint Site for national review no later than October 22, 2021.

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

3. Process CARPs as appropriate.

 

Contact.  Direct questions to the FAPD SharePoint Site.

 
 

 /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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