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Second Appeal Letter
PA ID# 000-UXV8S-00; Port Authority of Guam
PW ID# 4, 5 & 119; Net Small Project Overrun
February 3, 2010
Raymond F. Y. Blas
Governor’s Authorized Representative
Recovery Coordination Office
542-A North Marine Drive, DPW Compound
Upper Tumon, GU 96913
Re: Second Appeal-Port Authority of Guam, PA ID 000-UXV8S-00,
Net Small Project Overrun, FEMA-1533-DR-GU, Project Worksheets (PW) 4, 5, and 119
Dear Mr. Blas:
This is in response to your letter dated May 1, 2009, which transmitted the referenced second appeal on behalf of the Port Authority of Guam (Applicant). The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA’s) partial denial of its request for $57,233 in additional funding for a Net Small Project Overrun (NSPO).
On June 26 through June 29, 2004, tropical storm winds, rain and surf caused damages to the Applicant’s dock facility. FEMA prepared PW 4 to repair and replace three fenders and prepared PW 5 to repair and replace two fenders at three docks (F-3, F-4, and F-6). FEMA obligated PW 4 for $30,158 and PW 5 for $31,953. The Applicant hired a contractor to perform the repairs addressed in both PWs under one contract.
Upon completion of its small projects, the Applicant submitted its first appeal in a letter transmitted through your office dated May 21, 2008, for $106,744 for the NSPO. In support of its request for funding for the NSPO, the Applicant submitted Purchase Order 6968-OS and proof of payment for $125,498 for the supply and installation of the fenders at docks F-3, F-4, and F-6. The Applicant also submitted Purchase Order 6069-000 and proof of payment for $42,909 for four additional fenders. The Acting Regional Administrator partially granted the first appeal in a letter dated February 25, 2009, limiting the approved funding to the contracted amount for the supply and installation of the fenders at docks F-3, F-4, and F-6, $125,498, less a credit of $14,324 provided by the contractor to the Applicant. FEMA obligated PW 119 for $49,064 for the approved NSPO.
The Applicant submitted its second appeal to your office in a letter dated April 15, 2009, requesting funding for the remaining NSPO balance of $57,233. The Applicant states that the contract for $125,498, Purchase Order 6968-OS, was for the installation of the five new fenders, the repair of two loose fenders, and the purchase of one new fender. While the contract for the work says “supply and install” seven fenders, the schedule of values, provided in support of the second appeal, shows that the Applicant only purchased one fender under Purchase Order 6968-OS. The Applicant purchased the remaining four fenders that the contractor installed under Purchase Order 6069-000 for $42,909. Further, the Applicant’s contractor applied the $14,324 credit to Purchase Order 6069-000, and because FEMA disallowed the costs associated with Purchase Order 6069-000, FEMA duplicated the deduction by reducing the final approved funding amount for the NSPO.
While the Applicant states in its second appeal that the contract for $125,498, Purchase Order 6968-OS, was for the installation of the five new fenders, the repair of two loose fenders, and the purchase of one new fender, the Applicant has not provided any documentation in support of that statement. Purchase Order 6968-OS states that it is for the “supply and installation” of the fenders. The description of supplies or services on the Abstract of Bids for the contract also states “supply and installation.” The Applicant selected the low bid of $125,498 for the work. It is unclear why the Applicant paid the contractor an additional $42,909 for four of the five new fenders. The total cost of $168,407 is not reasonable for this work when the contractor provided a bid of $125,498 for the supply and installation of the fenders and a second contractor submitted a bid of $127,908 for the same work. Accordingly, only the contract cost for the work, $125,498, is eligible.
I have reviewed the information submitted with the appeal and have determined that the Applicant’s appeal should be partially granted. While the costs beyond the contract price for the work is ineligible, the Acting Regional Administrator inadvertently deducted the contractor’s credit of $14,324 twice when determining the eligible funding for the NSPO. The total eligible funding for the NSPO is $63,388. By this letter, I am requesting the Regional Administrator to take appropriate action to implement my decision.
Please inform the Applicant of my determination. This determination is the final decision on this matter pursuant to 44 CFR §206.206, Appeals.
Elizabeth A. Zimmerman
Disaster Assistance Directorate
cc: Nancy Ward
FEMA Region IX