Time Extension

Appeal Brief

Summary Paragraph

From April 25 to May 16, 2009, severe storms flooded portions of the Neosho River located in Labette County, Kansas (Applicant).  Floodwaters overtopped part of Xavier Road (Facility), washing away surface gravel and eroding the riverside embankment.  On November 23, 2009, FEMA prepared Project Worksheet (PW) 883, documenting permanent repairs to the Facility at an estimated cost of $50,370.16.  The PW’s approved SOW allowed for resurfacing 300 feet of the road and installing 110 linear feet (LF) of sheet piling.  Through a March 16, 2011 letter, the Applicant made a SOW change request, seeking approval to use 1,320 LF of riprap in place of sheet piling at a cost of $488,889.00.  On June 15, 2011, FEMA denied the request, citing cost ineffectiveness.  Two years later, the Applicant requested a time extension.  FEMA denied the request, attributing delays in project completion to the Applicant’s consultations with its engineering firm and its pursuit of the changed SOW.  FEMA deobligated all funding because the Applicant had not completed the project in the allowed timeframe.  In a January 20, 2014 letter, the Applicant appealed the time extension denial.  After filing the appeal, the Applicant submitted a second SOW change request, seeking to use $48,000.00 worth of riprap, and requesting $50,662.16 in funding.  In a response to a Final Request for Information, the Applicant asserted it had completed the project using $48,000.00 of riprap.  The Regional Administrator denied the Applicant’s first appeal in an October 18, 2014 letter, finding the Applicant failed to document extenuating circumstance warranting a time extension, exceeded the approved SOW without FEMA approval, and failed to document compliance with the Clean Water Act and the Endangered Species Act.  The Applicant filed a second appeal through a December 8, 2014 letter, asserting that extenuating circumstances justified the extension.

Authorities and Second Appeals

• Stafford Act § 423. 
• 44 C.F.R. §§ 13.30(d)(1), 13.43(a)(2), 206.201(l), 206.204(c)(2)(ii), (d)(2), 206.206 (a), (c)(1), (c)(2).
• Essex County, FEMA-4020-DR-NY, at 6.
• Los Angeles County, FEMA-1884-DR-CA, at 3.
• Public Assistance Program Appeal. Procedures, at 14.
• PA Guide, at 98, 139-40.

Headnotes

• Pursuant to 44 C.F.R. § 206.204(c)(2)(ii) and (d)(2), an applicant seeking a time extension from a regional administrator must document an extenuating circumstance or unusual project requirements beyond its control.

• The Applicant has not established it timely appealed FEMA’s denial of a SOW change request.  A failure to appeal is not an extenuating circumstance justifying delay.
• The Applicant has not demonstrated that high water levels or flooding prohibited timely completion of the project.

• Pursuant to 44 C.F.R. § 206.204(d)(2), a regional administrator can award funding for work completed up to the last approved time extension, only if the project is completed.
  • The Applicant did not complete the project within the approved scope of work. As such, the project is incomplete and any work completed during the approved period is not eligible.

Appeal Letter

Appeal Analysis

Background

From April 25 to May 16, 2009, severe storms flooded portions of the Neosho River located in Labette County, Kansas (Applicant).  Floodwaters overtopped portions of Xavier Road (Facility), washing away surface gravel and eroding the riverside embankment. 

FEMA prepared Project Worksheet (PW) 883 to document an estimated $50,370.16 in repairs.[1]  The PW’s approved scope of work (SOW) allowed for resurfacing 300 feet of the Facility ($9,704.21) and installing 110 linear feet (LF) of sheet piling ($40,381.95) to support the Facility’s embankment and stabilize the shoulder.  The initial project completion deadline was December 24, 2010.[2]  The Applicant subsequently requested and the Kansas Division of Emergency Management (Grantee) approved a request to extend the deadline to June 29, 2011.[3]

Through a March 16, 2011 letter from its engineering firm, the Applicant requested a SOW change to use riprap in place of sheet piling.[4]  The Applicant noted that using 110 LF of sheet piling would lead to further erosion, and that it would take at least 1,000 LF of sheet piling, at a cost of $2,150,000.00, to prevent it.[5]  As a more affordable alternative to sheet piling, the Applicant instead proposed a SOW to install 1,320 LF of riprap at a cost of $488,889.00.  The firm asserted riprap would eliminate erosion by reducing the steepness of the bank and providing slope protection.  

On March 29, 2011, the Grantee forwarded the engineering firm’s letter to FEMA but incorrectly asserted the proposed solution had an estimated cost of $2,150,000.00.  On June 15, 2011, FEMA Region VII denied the Applicant’s SOW change request, finding that the proposal was not cost effective, being 5,178 percent more than the original $50,662.16 project, and not eligible as hazard mitigation.[6] 

The Applicant sent a second time extension request on June 28, 2011, which noted that it recently received a letter denying its SOW change request and “will be appealing this decision in the near future and will need additional time to allow for its consideration and construction of the needed repairs.”[7]  The Grantee approved the time extension request and provided a new deadline of June 24, 2012, extending the completion deadline an additional 12 months.[8]

Approximately 14 months after the June 24, 2012 completion deadline, the Applicant requested a third time extension via an August 12, 2013 letter to the Grantee.[9]  The Applicant stated that a number of circumstances created delays and requested an extension to May 21, 2014.[10]  Relevant to this appeal, the Applicant asserted: 1) above normal river water levels limited its ability to perform a damage assessment between the disaster and summer of 2011; 2) FEMA had misinterpreted its SOW change request and improperly denied it; and 3) it had appealed the SOW denial through a June 29, 2011 letter from its engineer.   

As the Grantee could not grant time extensions beyond 30 months from the date of the disaster,[11] it forwarded the request to FEMA Region VII for consideration.[12]  FEMA denied the Applicant’s request on November 26, 2013, finding that the Grantee did not demonstrate extenuating circumstances that prevented completion of the project within regulatory timeframes.[13]  Furthermore, FEMA found that the delays in project completion were attributable to the Applicant’s consultations with its engineering firm and pursuit of a changed SOW.  FEMA subsequently amended PW 883 and deobligated all funding because the Applicant failed to complete the approved scope of work within the approved timeframe.[14]

First Appeal

The Applicant appealed the time extension denial on January 20, 2014, arguing it required additional time to repair the Facility.[15]  Relying on a December 30, 2013 letter from its engineering firm, the Applicant asserted that it could not complete the repairs to the Facility’s embankment as written in the PW because 110 LF of sheet piling was not adequate and would lead to further erosion.  Instead, the firm recommended installation of 1,320 LF of riprap at a cost of $488,889.00.  The proposal would require securing permits from the Department of Water Resources and Army Corps of Engineer and potential relocation due to additional erosion to the Facility’s embankment.  As such, the Applicant requested approval of the time extension to afford its firm more time to secure permits and right-of-ways from adjacent landowners.

After filing its first appeal, but before the Grantee transmitted it to the FEMA Region VII Regional Administrator (RA), the Applicant submitted a second SOW change request for use of only 120 LF of “large” riprap to repair the Facility’s embankment at an estimated cost of $48,888.40.[16]  The Applicant again sought a May 21, 2014 completion date and informed FEMA that repairs to the Facility’s roadbed were complete as of June 2011 at a cost of $8,811.82.

The Grantee forwarded the Applicant’s first appeal to the RA along with the second SOW change request on March 21, 2014.  The Grantee reiterated the Applicant’s arguments, claiming FEMA improperly denied the first SOW change request, which caused a delay.[17] 

On June 17, 2014, the RA sent a Final Request for Information (RFI) to the Applicant and the Grantee.[18]  Relevant to this appeal, the RA sought documentation establishing the Applicant: completed work by May 21, 2014; appealed FEMA’s denial of the first SOW change request; attempted multiple times to receive approval for a SOW change; and satisfied environmental permitting compliance.  The RA also sought an explanation of the Applicant’s river level data.  

The Applicant responded to FEMA’s Final RFI on July 21, 2014, arguing its time extension was justified and provided documentation establishing it completed the project on May 1, 2014 using riprap, instead of sheet piling, for $48,000.00.[19]  The Applicant asserted that it now was requesting $56,662.16[20] and that it had attempted to obtain SOW changes over the phone, it did not otherwise provide documentation.  The Applicant pointed to its June 28, 2011 second time extension request and a June 29, 2011 letter from its engineer as representing an appeal.  The Applicant also asserted water level documentation was self-explanatory.  Lastly, the Applicant stated its belief that the project had no environmental issues, as stated in the PW’s special considerations section.

The Grantee forwarded the Applicant’s RFI response on July 23, 2014 and asserted the documentation provided sufficiently supported the appeal.[21]  The Grantee contends the Applicant’s June 28, 2011 request for a time extension was an appeal letter although the Grantee acknowledged it originally did not interpret the letter as an appeal and never forwarded it to FEMA.[22] 

The RA denied the Applicant’s first appeal in an October 18, 2014 letter.  The RA found that the Applicant failed to document extenuating circumstances warranting an extension; exceeded the approved SOW without FEMA approval, making the project ineligible for funding; and failed to document compliance with the Clean Water Act (CWA)[23] and the Endangered Species Act (ESA).[24]  

Second Appeal

The Applicant filed a second appeal on December 8, 2014.  The Applicant asserts the third time extension was justified, arguing that no law or policy prohibits FEMA from granting it, and notes it is only seeking the originally obligated amount.[25]  The Applicant cites to a number of issues that caused delays, such as FEMA’s failure to address its objection to the original SOW and improper denial of the first SOW change request, and high water levels and flooding on the Neosho River that precluded the completion of work.[26]  The Applicant also provided documentation to establish compliance with the CWA and ESA.

The Grantee’s February 11, 2015 transmittal of the second appeal asserts that delays were caused by further study requirements and environmental considerations.  Additionally, the Grantee also argues that, according to the Recovery Directorate Manual, Public Assistance Program Appeal Procedures, Version 3,[27] the RA’s adjudication of permit compliance was improper because it constituted a new eligibility issue and FEMA should have informed the Applicant of its determination prior to issuing the first appeal decision to afford the Applicant its full appeal rights.

Discussion

Time Extension

When requesting a time extension, applicants must demonstrate extenuating circumstances or unusual project requirements beyond its control.[28]  In this case, the Applicant asserts two primary justifications: 1) FEMA failed to address the Applicant’s objection to the original SOW and incorrectly denied the first SOW change request; and 2) high water levels and flooding on the Neosho River precluded completion of work.  The following subsections address both contentions.

Denial of SOW Change Request

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act) § 423, as implemented by Title 44 of the Code of Federal Regulations (44 C.F.R.) § 206.206, allows an eligible applicant to appeal any PA eligibility determination within 60 days of receiving notice of the appealable action.[29]  Neither the Stafford Act nor 44 C.F.R. § 206.206 provide FEMA with the authority to grant time extensions for filing appeals.[30]  Appeals must provide documented justification and specify the provisions in federal law, regulation, or policy with which the applicant believes the action was inconsistent.[31]  Grantees must also forward appeals to the regional administrator within 60 days of receipt.[32]

The Applicant received FEMA’s denial of the first SOW change request on June 15, 2011.[33]  To appeal the determination, the Applicant needed to do so within 60 days, by August 14, 2011.  The Applicant submitted its first appeal on January 20, 2014, over two years after receiving notice.  The requirement that the Applicant submit appeals within 60 days of notice was not an unusual project requirement nor was it beyond the Applicant’s control.  The Applicant has also not demonstrated any extenuating circumstances that prevented it from properly seeking resolution of its dispute through the appeals process.  Therefore, FEMA’s denial of the Applicant’s first SOW change request, whether correct or incorrect, does not create a circumstance warranting the granting of a time extension because the Applicant had the ability to resolve the dispute through the appeals process, but chose not to within the allotted amount of time.  Consequently, delays that resulted from the Applicant’s pursuit of a denied SOW, including study requirements and environmental considerations, are irrelevant in evaluating whether a time extension is warranted because the delays were not encountered in furtherance of the approved SOW.  Therefore, the RA appropriately denied the Applicant’s time extension request.

Alternatively, the Applicant contends a June 29, 2011 letter from its engineer served as a first appeal.[34]  This letter, however, is not part of the administrative record, nor was it produced in response to the Final RFI.  As such, the Applicant has not established it filed an appeal within 60 days.

Finally, the Grantee asserts the Applicant’s June 28, 2011 time extension request served as a first appeal.[35]  The Grantee, however, admits it never forwarded the letter to FEMA nor did it interpret the letter as an appeal.[36]  The letter does not specify a monetary amount in dispute nor the provisions in federal law regulation or policy with which the Applicant believed the initial actions were inconsistent.  While the letter acknowledges denial of the SOW change request and states the Applicant will appeal the decision “in the near future,” expression of an intent to appeal does not satisfy the requirements of 44 C.F.R. § 206.206.[37]  As such, the June 28, 2011 letter did not meet the appeal procedural requirements.

The Grantee first gave FEMA notice the Applicant was claiming an improper denial when it forwarded the Applicant’s August 12, 2013 third time extension request to Region VII.  Even if FEMA were to consider this August 12, 2013 letter a first appeal, it was sent 25 months after June 15, 2011, and therefore does not comply with the 60-day submission requirement delineated in 44 C.F.R. § 206.206(c).

High Water Levels and Flooding Conditions

The Applicant provided documentation establishing water levels on the Neosho River between January 2009 and December 2012.  It also provided photographs of the river at the Facility location.  The Applicant, however, does not explain how or when the water levels prevented work from being completed.  Moreover, as discussed previously, delays encountered by the Applicant are irrelevant in evaluating whether a time extension is warranted because they were not encountered in furtherance of the approved SOW.

Performance of the Scope of Work

Applicants must obtain prior approval from FEMA whenever there is a revision of the scope of work or objectives of the project.  This is true regardless of the reason necessitating the change (e.g., hidden damage discovered, improved project, alternate project, or general scope change)[38] because it allows FEMA to carry out related functions including environmental and historic preservation compliance reviews, as well as to ensure the applicant obtains necessary permits.[39]  When an applicant materially fails to comply with any term of an award, FEMA may disallow all or part of the grant award.[40] 

Without FEMA’s prior approval, the Applicant admits it completed work, installing riprap, that exceeded the original SOW, and consequently did not materially comply with the conditions of the grant.[41]  As a result, FEMA was prevented from performing the required compliance reviews.[42]  Accordingly, FEMA appropriately deobligated all funding.

Eligibility of Costs Incurred up to Approved Completion Date

If a RA denies a time extension, reimbursement is limited to eligible project costs incurred up to the latest approved completion date.[43]  An individual project is made up of a logical grouping of work required as a result of the disaster.[44]  If an “applicant does not complete a project, no federal funding will be provided for that project.”[45] 

The last approved project completion deadline was June 24, 2012.  As of that date, the SOW was incomplete.  The repairs of the Facility’s roadbed are not eligible because the Applicant did not complete the project as approved.  FEMA logically grouped repairs to the Facility’s roadbed and embankment as one project because the work was interrelated and for the same facility.  Accordingly, FEMA appropriately deobligated funding for the roadbed because the project was not finished.

Due Process Rights

An RA’s first appeal review is not limited to only previous findings of fact or issues identified within a Determination Memorandum, but rather the RA may address additional eligibility determinations during the disposition of the first appeal.[46] 

The Grantee and Applicant argue that FEMA’s denial of the first appeal relied partly on environmental permitting issues that FEMA identified while reviewing the appeal.  Further, they argue, this reliance violated the Applicant’s due process rights. 

FEMA afforded the Applicant full appeal rights because the Final RFI notified it of the eligibility issue and then provided the Applicant an opportunity to respond to it before closing the Administrative Record and issuing the first appeal decision.[47]  The RFI ensured inclusion of the Applicant’s documents in the Administrative Record, and that the RA considered them before issuing the first appeal determination.  Consequently, FEMA finds that the Applicant was afforded appropriate appeal rights.

Conclusion

The Applicant changed the SOW without receiving prior approval from FEMA, failed to establish extenuating circumstances justifying a time extension, and did not complete the project by the expiration of the approved time extension.  Therefore, this appeal is denied.