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Second Appeal Brief
PA ID# 000-UXV8S-00; Port Authority of Guam
PW ID# 4, 5 & 119; Net Small Project Overrun
Citation: FEMA-1533-DR-GU, Port Authority of Guam, Net Small Project Overrun (NSPO), Project Worksheets (PW) 4, 5, and 119
Reference: Net Small Project Overrun, Reasonable Cost
Summary: The Port Authority of Guam (Applicant) submitted a first appeal for $106,744 for a NSPO. The overrun was associated with PWs 4 and 5, obligated for $30,158 and $31,953, respectively, for the repair and replacement of damaged fenders at three docks (F-3, F-4, and F-6). The scope of work of PW 4 included replacing three fenders and the scope of work of PW 5 included replacing two fenders. The Applicant hired a contractor to perform the repairs addressed in both PWs under one contract. 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, 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 a second appeal requesting funding for the remaining NSPO balance of $57,233. The Applicant states that the contract for $125,498 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 installed the remaining four fenders 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.
Issues: 1. Does the Applicant provide justification for a payment to the contractor of $42,909 above the contract price?
2. Did FEMA deduct the contractor credit of $14,324 twice in approving funding for the NSPO?
Findings: 1. No.
Rationale: Office of Management and Budget Circular A-87