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Second Appeal Brief
PA ID# 000-U7S4M-00; Florida Inland Navigation District
PW ID# 851; Legal Responsibility
Citation: FEMA-1785-DR-FL, Florida Inland Navigation District, Ineligible Work - Legal Responsibility, Project Worksheet (PW) 851
Reference: Legal Responsibility
Summary: On August 19, 2008, heavy rain and flooding caused by Tropical Storm Fay caused damage to the BV-NASA Dredged Material Management Area (DMMA) construction project which was approximately 90% complete. FEMA prepared PW 851 in the amount of $168,358 to document the scope of work to repair the facility; however, upon review of the construction contract, FEMA determined that the repairs were the responsibility of the contractor. This resulted in the obligation of PW 851 for zero dollars.
In its first appeal dated October 15, 2009, the Applicant requested that FEMA reinstate funds for PW 851 because the contract under which the work is being performed places the responsibility for any damage to the facility during the construction period on the Applicant. The Regional Administrator denied the first appeal because the eligible costs of repairing the facility only include those costs that are the Applicant's responsibility and not the contractor's responsibility. The Regional Administrator did not find language in the contract to support the Applicant's assertion that C&D Construction, Inc. (Contractor) was not responsible for damage to the facility that was under construction at the time of the event. The contractual requirement to purchase “all risk” insurance coverage placed responsibility on the contractor for the facility during construction and not the Applicant.
FDEM submitted a second appeal on behalf of the Applicant on December 30, 2011. FDEM reiterated the first appeal arguments that the repairs are eligible if “the contract under which the work is being performed places responsibility for damage on the applicant during the construction period.” FDEM submitted a firmette showing where the project was located with respect to the flood zones excluded by the Contractor’s insurance policy.
Issue: Did the Applicant have legal responsibility for the construction project at the time of the disaster?
Rationale: Stafford Act Section 406(e)(4) Repair, Restoration, and Replacement of Damaged Facilities, Eligible Costs, Special rule; FEMA Public Assistance Guide (FEMA 322 June 2007).