Change in Scope of Work, EHP and Other Compliance

Appeal Brief

Summary Paragraph

Severe winter weather resulted in a major disaster declaration with an incident period of February 8-9, 2013. The Applicant requested Public Assistance (PA) funding to repair the Facility to its predisaster design. Between October 2015 and May 2017, the PW’s draft SOW evolved from 11 identified damage sites to three improved areas incorporating some of the identified damage sites. Later, the Applicant submitted an improved project request to the Massachusetts Emergency Management Agency (Recipient) which it conditionally approved upon FEMA’s review and concurrence. Prior to FEMA completing review of the submitted request, the Applicant completed the project and FEMA received closeout documentation claiming $9,882,258.01 in eligible costs. FEMA issued two requests for information relaying several concerns with the project. Upon review of the responses, FEMA issued a Determination Memorandum denying the claimed work. FEMA found the Applicant, among other things, began its improved project work without FEMA’s approval and before FEMA completed its National Environmental Policy Act (NEPA) review. The Applicant submitted a first appeal asserting FEMA’s May 2017 update of the SOW implied approval of the work and that FEMA had time to perform an Environmental Historic Preservation (EHP) review. The FEMA Region 1 Regional Administrator denied the appeal finding the Applicant proceeded with an improved project without FEMA’s approval and substantially completed the work that was subject to NEPA review before submitting the improved project request. The Applicant submitted a second appeal reiterating its first appeal arguments.

Authorities

• Stafford Act §§ 406(a)(1)(A), (e)(1).
• 40 C.F.R. § 1508.25(a)(1).
• 44 C.F.R. § 10.8, 206.201(l), 206.226.
• PA Guide, at 79, 94-95, 107-108, 110-111, 117, 127, 128, 139-140, B-7.
• City of Ardmore, FEMA-DR-4222-OK, at 3; Town of Fairfield, FEMA-DR-4087-CT, at 4.

Headnotes

• An applicant must obtain approval for an improved project from the recipient prior to the start of construction. If an improved project results in a significant change from the predisaster configuration, it must also be approved by FEMA prior to construction. 
  • The Applicant started construction of the improved project work without prior FEMA approval.
• NEPA requires federal agencies to consider the environmental impact of a proposed action, as well as whether any alternatives exist, prior to obligating funds and beginning work.
  • The Applicant did not afford FEMA the opportunity to complete the required EHP review before work commenced in violation of FEMA policy.

Conclusion

The Applicant started construction of the improved project without prior FEMA approval, and thus, FEMA was unable to complete the required EHP review before work commenced, in violation of FEMA policy. Therefore, the appeal is denied.

Appeal Letter

Appeal Analysis

Background

Severe winter weather, extreme winds, and flooding resulted in a major disaster declaration with an incident period of February 8 to 9, 2013. The Town of Scituate (Applicant) requested Public Assistance (PA) funding to repair and restore an engineered seawall and stone revetment (Facility) to its predisaster condition. FEMA created Project Worksheet (PW) 825 to capture the claimed disaster damages and proposed scope of work (SOW). By October 2015, based on ongoing discussions with the Applicant, FEMA itemized the PW’s draft SOW to include 11 damage sites along the Facility with associated work to restore the sites to predisaster condition. FEMA noted total estimated construction costs of $1,033,827.50.

Thereafter, the Applicant expressed an intent to improve the Facility with work that went beyond restoring it to its predisaster condition. In May 2017, FEMA documented the Applicant’s proposal by revising the PW’s draft SOW. FEMA noted that the Applicant requested improvements, including hazard mitigation, to some of the 11 identified damage sites, which the Applicant grouped into three areas to be improved.[1] 

On June 7, 2017, the Applicant submitted an improved project request (Improved Project Request) to the Massachusetts Emergency Management Agency (Recipient). The Recipient’s June 23, 2017, approval letter conditionally approved the request, stating among other things, FEMA must review and concur with its approval to ensure completion of the appropriate environmental and historic preservation (EHP) requirements. 

Between October 2014 and February 2018, the Applicant submitted three project time extension (TE) requests. In each TE request, the Applicant explained that the SOW needed to be diligently identified due to the unique nature of the repair work, but weather and repetitive storms prevented adequate assessment of the damaged areas. While FEMA acknowledged receipt of the February 2018 TE request, it neither denied nor approved the request. The Recipient’s cover letters accompanying the March 2017 and February 2018 TE requests noted PW 825 was pending FEMA obligation.

The Applicant completed work on the Facility and in early 2020, FEMA received project closeout documentation claiming $9,882,258.01. FEMA issued two Requests for Information (RFIs). In response to FEMA’s RFI, dated March 23, 2022, the Applicant conceded it performed work at some sites that went beyond the FEMA-identified damages and for which it did not provide FEMA with sufficient information to perform its review and validation of costs. The Applicant clarified that it began work on three improved areas on September 1, 2015, February 27, 2017, and August 4, 2016, respectively. The Applicant asked FEMA to again revise its funding request to only fund work restoring the Facility to its predisaster design, in the amount of $3,576,148.50.[2]

On December 13, 2022, FEMA issued a Determination Memorandum denying the requested $3,576,148.50 for the project. In addition to addressing the cost-related basis for denial, FEMA determined that the Applicant commenced the improved project work without FEMA approval and before FEMA completed its National Environmental Policy Act (NEPA) review, and the project, as completed, was neither statutorily nor categorically excluded from NEPA review. FEMA also found that the Applicant did not demonstrate that the completed work met various applicable EHP requirements such as conditions mandated by the Coastal Zone Management Act and Clean Water Act. Therefore, FEMA found the work completed was not eligible for PA funding.

First Appeal 

On February 13, 2023, the Applicant submitted a first appeal clarifying it was only seeking costs for disaster-related repairs, not the costs associated with improvements to the Facility. The Applicant asserted that FEMA had much of the documentation for its previously requested improved project and took actions consistent with approving it by updating the PW’s draft SOW in May 2017. The Applicant further asserted that FEMA had ample time to perform an EHP review but did not do so.[3] The Applicant stated it was working with state and federal agencies to bring the project into compliance or to confirm it does not violate state or federal EHP requirements. 

In support of the appeal, the Applicant submitted a February 2023 draft report prepared by its consultant, FOTH Infrastructure Environment, LLC (FOTH), related to a post-construction regulatory review of the project (FOTH Report). Among other things, the FOTH Report recounted the work completed by the Applicant and noted that the Applicant was pursuing permits from the U.S. Army Corps of Engineers (USACE). The Recipient submitted the appeal to FEMA on April 12, 2023, expressing its support.

On July 7, 2023, the FEMA Region 1 Regional Administrator denied the Applicant’s appeal. FEMA found the Applicant proceeded with an improved project prior to FEMA approval. In addition, FEMA determined that the Applicant substantially completed the work that was subject to NEPA review before it submitted its improved project request in June 2017. Lastly, the Applicant did not demonstrate that it complied with all EHP requirements, such as obtaining permits related to the Clean Water Act. 

Second Appeal

On September 28, 2023, the Applicant submitted a second appeal. The Applicant asserts FEMA cannot claim it did not approve its requested improved project where it took no action, adverse or otherwise, for nearly three years after learning of the Recipient’s approval and that FEMA should have updated the PW’s draft SOW and costs after the Applicant explained it was only seeking reimbursement for disaster-related repairs and clarified the completed SOW. The Applicant also reiterates that FEMA should have conducted an EHP review of the requested improved project after it was copied on the Recipient’s change in SOW approval in June 2017. The Applicant claims that it has complied with, or is in the process of complying with, state and federal EHP requirements. 

Notwithstanding its above argument, the Applicant submits a Certificate of the Secretary of Energy and Environmental Affairs (Certificate) regarding its review of the work pursuant to the state’s Environmental Protection Act.[4] The Certificate includes comments from various state regulatory agencies identifying concerns with the expansion of work outside the original footprint and impacts to coastal wetland resource areas without prior review and authorization.[5] The Certificate states the project “as-built” deviates from plans submitted to obtain pre-construction authorizations and permits; as built, it requires a license from the state’s Department of Environmental Protection and additional review and permitting by USACE. The Certificate notes the Applicant should have obtained 401 Water Quality Certification for each of the three improved areas but obtained none, and the Applicant is seeking an after-the-fact federal consistency concurrence from the Massachusetts Office of Coastal Zone Management. The Recipient submitted the second appeal to FEMA on November 2, 2023, expressing its support.

Discussion

FEMA may provide PA funding for the costs to repair, restore, reconstruct, or replace a facility damaged or destroyed by a major disaster to its predisaster design, function, and capacity and in conformity with current codes, specifications, and standards.[6] The process of project formulation requires FEMA to validate a project for facility, work, cost, and contract eligibility, and special considerations (e.g., hazard mitigation and EHP compliance).[7]It is the applicant’s responsibility to identify the existence of special considerations issues for each project.[8] Project approval means the process in which the Regional Administrator reviews and signs an approval of work and costs on a PW; such approval is also an obligation of funds to the recipient.[9]

When performing permanent restoration work on a damaged facility, an applicant may decide to make improvements to the facility while still restoring its predisaster function and at least its predisaster capacity.[10] The applicant must obtain approval for an improved project from the recipient prior to the start of construction.[11] If an improved project results in significant change from the predisaster configuration (that is, different location, footprint, function, or size), it must also be approved by FEMA prior to construction to ensure completion of the appropriate EHP review.[12]

FEMA must consider a range of Federal laws, regulations and executive orders (EOs) related to EHP prior to providing PA funding.[13] These laws, regulations, and EOs generally require the funding agency to ensure compliance prior to funding.[14] Reviews for compliance with these laws must be completed before FEMA approves funding and before work is started since the review may identify steps to be taken or conditions to be met before the project can be implemented.[15] Connected actions are those that are closely related and therefore should be discussed in the same impact statement.[16] Changes in the SOW may result in additional EHP compliance reviews and/or permits.[17] 

Here, the Applicant is requesting $3,576,148.50 in PA funding for disaster-related repairs; however, the record reflects that the work associated with those costs significantly changed the Facility’s predisaster configuration. The Applicant’s breakdown of the work completed to repair disaster-related damages shows that those actions are connected to the completed improvements.[18] As such, FEMA may not simply fund the disaster-related work and disregard the EHP requirements related to the entirety of the completed work.  

The Applicant asserts that FEMA’s knowledge of its June 2017 improved project request and continued collaboration and communication with the Applicant implied approval of its request. However, between October 2014 and February 2018, the Applicant repeatedly advised FEMA in TE requests that weather prevented adequate assessment of the Facility’s damages, thus, the SOW development was ongoing. Additionally, the Recipient reminded the Applicant that the PW was pending FEMA approval in its March 2017 and February 2018 TE request cover letters. Based upon the record, FEMA’s continued communication with the Applicant after June 2017 indicates FEMA’s ongoing efforts to validate the project’s SOW, not approval of the improved project. 

The Applicant further asserts that FEMA should have conducted an EHP review of the requested improved project after it was copied on the Recipient’s change in SOW approval in June 2017. However, construction on the improved project started in September 2015. As such, the Applicant did not afford FEMA the opportunity to complete its EHP review prior to starting work on the requested improved project as required by NEPA.[19] In addition, the noted concerns of various state regulatory agencies and disclosed unresolved permitting issues in the Certificate demonstrate that the work at issue is not compliant with several EHP requirements. Consequently, the work is not eligible for PA funding.

Based upon the administrative record, the Applicant started construction of the improved project without obtaining FEMA’s approval. This prevented FEMA from conducting the necessary EHP reviews and denied FEMA the opportunity to identify required steps or conditions to be met to comply with federal law.[20] Consequently, the work is not eligible for PA funding. 

Conclusion

The Applicant started construction of the improved project without prior FEMA approval, and thus, FEMA was unable to complete the required EHP review before work commenced, in violation of FEMA policy. Therefore, the appeal is denied.