Application Server performance  issues

I am a DBA consultant at a county government site that recently went live on FSCM 9.1 using Tools 8.53.04 Running Windows Server with MS-SQL Server 2012
A problem has started with our two Prod App Servers. There are a few hundred Accounting users on the system and they have been reporting extreme slowness going page to page, and many times getting kicked out of the system. I have launched Process Explorer, Resource Monitor, Task Manager on both App Serves and found individual PSAPPSRV processes peaking as high as 39% CPU and then bouncing down to 2%, back up to 17%, and all over the map
In PSADMIN I ran TMAdmin and shut down and then rebooted the individual processes that had the high cpu usage, but they spiked back up.
So we sent out a message for users to log off and bounced both app servers and cleared app server cache, however that didn't fix it either. This is the first time this has happened, so we ar soliciting feedback from other PS/MS-SQL DBA's to see if they have experienced this and how they handled it.
We looked at resources and each App Server (they are virtual) have only 16 GB of ram and each has two Opteron 2.79 Ghz processors. So we are thinking it is a resource problem, however this situation has not happened before
Thanks in advance
2944096

The problem is there is no service timeout for the PSAPPSRV process:
[PSAPPSRV]
;=========================================================================
; Settings for PSAPPSRV
;=========================================================================
; UBBGEN settings
Min Instances=5
Max Instances=5
Service Timeout=0
Please review the following Km Doc E-AS: PSAPPSRV process Service Timeout=0 Causing Severe Slow Down of Application (Doc ID 1992038.1)
This can happen if the psdbgsrv process gets started:  E-AS: Service Timeout for PSAPPSRV reverts to = 0 after Domain Configuration (Doc ID 664081.1)
Please set the psappsrv process back to the servicetimeout of =300 after reviewing the above km docs and this should fix the issue.

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