U.S. flag

An official website of the United States government

Dot gov

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you’re on a federal government site.

Https

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Legal Responsibility

Appeal Brief Appeal Letter Appeal Analysis

Appeal Brief

DisasterFEMA-4145
ApplicantWeld County
Appeal TypeSecond
PA ID#123-99123-00
PW ID#1005
Date Signed2016-12-22T00:00:00

Conclusion: FEMA finds that at the time of the disaster the claimed work, except repairs to an adjacent slough, was the responsibility of a contractor, not the Applicant and therefore is not eligible for reimbursement.  Repairs to the adjacent slough are ineligible because it is not an eligible facility.

Summary Paragraph:

From September 11-30, 2013 severe storms caused flooding, landslides and mudslides in Weld County, CO (Applicant).  The flooding damaged the Applicant’s Hokestra Gravel Pit (Facility), which was under construction at the time of the disaster, being converted by a contractor from an abandoned rock quarry into a water storage facility.  The Applicant approved a change order on December 16, 2013 for the existing contractor to repair the flood damage.  The Applicant requested $135,426.43 in Public Assistance (PA) funding to reimburse a portion of the work documented in the change order.  FEMA issued a PA determination memorandum on May 2, 2014 denying the request because the Facility was under construction at the time of the disaster and therefore was not the legal responsibility of the Applicant.  Specifically, FEMA found that section 107.17 of the construction contract obligated the contractor to restore work damaged by “acts of God,” including floods, at no cost to the Applicant.  On first appeal, the Applicant acknowledged that much of the work required for repair was the responsibility of the contractor per the provisions in the contract.  However, the Applicant argued that a portion of the costs were eligible for reimbursement because they represent a change in site conditions.  The Regional Administrator (RA) found section 107.17 of the construction contract to be controlling and therefore damage caused by the flooding was the responsibility of the contractor.  The RA determined that section 104.02, pertaining to differing site conditions, and section 104.03, pertaining to extra work, were not applicable because flooding is not a physical condition that is hidden or concealed and the resulting damage was not unforeseen work.  On second appeal, the Applicant reiterates its first appeal arguments but also asserts that it was obligated to pump the water back into the hydrological system to avoid interfering with users’ downstream rights. 

Authorities and Second Appeals

  • Stafford Act §§ 312, 403, 406(e).

  • 44 C.F.R. §§ 206.201(c), 206.223(a)(3).

  • PA Guide, at 22, 28.

  • City of Chi. v. FEMA, 660 F.3d 980 (7th Cir. 2013).

Headnotes

  • According to Stafford Act § 406(e)(2), If a facility is under construction at the time of the disaster, only costs that are the applicant’s responsibility, as specified in the contract, are eligible for reimbursement.

    • FEMA finds that the claimed work, except repairs to an adjacent slough, was under the contractor’s responsibility at the time of the disaster and as such is not eligible for reimbursement as it was not the legal responsibility of the Applicant.

  • Eligible natural features must be improved and maintained.44 C.F.R. § 206.201(c).

    • The adjacent slough is an unimproved natural wetland.

       

Appeal Letter

Marilyn Gally, Director
Colorado Division of Homeland Security and Emergency Management
9195 E. Mineral Avenue, Suite 200
Centennial, CO 80112

Re: Second Appeal – Weld County, PA ID 123-99123-00, FEMA-4145-DR-CO, Project Worksheet 1005 – Legal Responsibility

Dear Mr. Klein:

This is in response to a letter from your office dated December 4, 2015, which transmitted the referenced second appeal on behalf of Weld County (Applicant).  The Applicant is appealing the Department of Homeland Security’s Federal Emergency Management Agency’s (FEMA) determination that work done to repair damage to the Hokestra Gravel Pit in the amount of $135,426.43 is ineligible for Public Assistance funding.

As explained in the enclosed analysis, I have determined that at the time of the disaster the claimed work, except repairs to an adjacent slough, was the responsibility of the contractor, not the Applicant, and therefore is not eligible for reimbursement.  Repairs to the adjacent slough are also not eligible because it is not an eligible facility.  Accordingly, the appeal is denied. 

Please inform the Applicant of my decision.  This determination is the final decision on this matter pursuant to 44 C.F.R. § 206.206, Appeals.
 

Sincerely,

/s/

Christopher Logan
Director
Public Assistance Division                                                                       

Enclosure

cc: Nancy Dragani
     Acting Regional Administrator
     FEMA Region VIII

Appeal Analysis

Background

From September 11-30, 2013 severe storms caused flooding, landslides and mudslides in Weld County, Colorado.  The flooding damaged several of Weld County’s (Applicant) drainage facilities, including the ongoing construction site at the Hokestra Gravel Pit (Facility), which was inundated with floodwaters.  The Facility was under construction at the time of the disaster, being converted by a contractor from an abandoned rock quarry into a water storage facility.  The Applicant approved a change order on December 16, 2013 for the existing contractor to repair the flood damage.

The Applicant requested $135,426.43 in Public Assistance (PA) funding to reimburse a portion of the work documented in the change order.[1]  FEMA issued a PA determination memorandum on May 2, 2014 denying the request because the Facility was under construction at the time of the disaster and therefore was not the legal responsibility of the Applicant.[2]  The contract contains three provisions that are relevant to the appeal:

104.02 ….….

(a)  Differing Site Conditions.  During the progress of work, if subsurface or latent physical conditions are encountered at the site differing materially from those indicated in the Contract or if unknown physical conditions of an unusual nature, differing materially from those ordinarily encountered and generally recognized as inherent in the work provided for in the Contract, are encountered at the site, the party discovering such conditions shall promptly notify the other party in writing of the specific differing conditions before the site is disturbed and before the affected work is performed

…..

104.03  Extra Work.  The Contractor shall perform unforeseen work, for which there is no price included in the Contract, whenever the extra work is necessary or desirable for contract completion

….….

107.17  Contractor’s Responsibility for Work. 

….

Loss, injury or damage to the contract work due to unforeseeable causes beyond the control of and without fault or negligence of the Contractor or acts of God, such as flood, earthquake, tornado, or other cataclysmic phenomenon of nature, shall be restored by the Contractor at no cost to the County.[3]

FEMA found that section 107.17 of the construction contract obligated the contractor to restore work damaged by “acts of God,” including floods, at no cost to the Applicant.[4]  FEMA prepared Project Worksheet (PW) 1005, Category D, on May 12, 2014 to document the repair work and ineligibility determination.

First Appeal

The Applicant appealed FEMA’s determination by letter dated July 25, 2014.[5]  While the Applicant acknowledged that much of the repair work was the responsibility of the contractor per the contract, it argued a portion of the work was eligible due to the “change in site conditions from what [the contractor] originally started with.”[6]  The changes in site conditions and related work were: (1) pumping of cells that filled with floodwaters; (2) replacement of a concrete ditch embankment that washed away; and (3) construction of an access road to repair a breach in the clay liner.  The Applicant asserted that FEMA had not considered these site condition changes, which were not the responsibility of the contractor under the terms of the contract.[7]  

The FEMA Region VIII Regional Administrator (RA) denied the first appeal in a letter dated September 25, 2015.  The RA found section 107.17 of the construction contract to be controlling and concluded damage caused by the flooding was the responsibility of the contractor.  The RA determined that section 104.02 and section 104.03 were not applicable because flooding is not a physical condition that is hidden or concealed and the resulting damage was not unforeseen work.[8]

Second Appeal

Through its November 18, 2015 second appeal, the Applicant argues that the work is eligible because the damaged water delivery system is beyond the construction project and the emergency protective measures and debris removal returned the area to its prior condition.[9]  The Applicant asserts that the work did not result from an act of God and therefore did not trigger section 107.17 of the construction contract.  Rather, it argues the work addressed a change in site condition as described in sections 104.02 and therefore was extra work according to section 104.03.  The Applicant also indicates it was obligated to pump the water back into the hydrological system to avoid interfering with users’ downstream rights.[10]

Discussion

Legal Responsibility

The Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act), authorizes FEMA to reimburse emergency[11] and permanent work resulting from a declared disaster.[12]  Such work must “be the legal responsibility of an eligible applicant.”[13]  If a facility is under construction at the time of the disaster, only costs that are the applicant’s responsibility, as specified in the contract, are eligible for reimbursement.[14]  Contractors are not eligible applicants, therefore “the portion of the facility under the contractor’s responsibility is not eligible for [PA funding].”[15]

The site map, bid documentation, contract and change order submitted by the Applicant document that all of the contractor’s work, except repair of the existing slough (discussed in the following subsection), occurred within portions of the Facility that were the contractor’s responsibility.[16]  Section 107.17 of the construction contract applies to this work because the damage to the concrete ditch embankment, flooding of cells, debris, and breach in the clay liner was all caused by flooding, which was unforeseeable and beyond the control of the contractor.[17]  In light of the contract’s inclusion of a provision explicitly assigning responsibility for “acts of God” to the contractor, it is illogical to conclude that clauses focused on the discovery and subsequent repair of latent or unknown conditions would apply in this instance.[18]  As such, FEMA finds that section 107.17, which is specific to the circumstances faced by the Applicant, a flood, is controlling and requires the contractor to restore the Facility “at no cost” to the Applicant.[19]  

The Applicant also claims it was legally obligated and responsible to pump the trapped floodwaters back into the hydrological system to avoid interfering with downstream users’ rights.[20]  The Applicant, however, has failed to provide documentation supporting its claim.  Furthermore, even if the Applicant was required to pump the water back into the hydrological system, it does not automatically make this work eligible for PA.  Floodwaters were pumped from portions of the Facility covered by the contract and the Applicant was not legally responsible for this work at the time of the disaster.

Improved and Maintained Natural Feature

FEMA regulation defines a facility as “any publicly or privately owned building, works, system or equipment, built or manufactured, or an improved and maintained natural feature.”[21]  For an “improved and maintained natural feature”[22] to be eligible, maintenance “must have been done on a regular schedule and to standards to ensure that the improvement performed as designed.”[23]  The Applicant described a portion of the work in its second appeal as, “[r]epair slough damage near river.”[24]  The site map, bid documentation, pictures, and change order confirm that this work was external to the construction project and therefore not covered by the terms of the construction contract.  However, this documentation also reveals that the existing slough is an unimproved and natural wetland, not an eligible facility, and therefore is not eligible for PA funding.

Conclusion

Pursuant to the construction contract, the contractor was specifically responsible for restoring, at no cost to the Applicant, flood damage sustained by the Facility.  Repair work to an adjacent slough is not governed by the terms of the construction contract, however, the slough is not an eligible facility.  For these reasons, the Applicant’s appeal is denied.

 


[1] Letter from Emergency Manager, Weld County Office of Emergency Mgmt., to FEMA Project Specialist, FEMA Branch I Office (Apr. 14, 2014).

[2] Memorandum from Infrastructure Branch Dir., FEMA, to Weld County, Colo. (May 2, 2014).

[3] Contract between Weld County, Colo., and Hall-Irwin Corp., §§ 104.02(a), 104.03, 107.17 (Oct. 29, 2012) (emphasis in original) [hereinafter Construction Contract].  The Construction Contract is unsigned and undated and therefore does not satisfy applicant documentation requirements.  44 C.F.R. § 13.36(b)(9).  This issue, which was not raised on first appeal and does not affect the outcome of the appeal, is not discussed in detail.

[4] Memorandum from Infrastructure Branch Dir., FEMA, to Weld County, Colo., at 2 (May 2, 2014).

[5] Letter from Dir., Weld County Office of Emergency Mgmt., to Dir., Office of Emergency Mgmt., Colo. Div. of Homeland Sec. & Emergency Mgmt. (July 25, 2014).

[6] Id. at 1.

[7] Id. at 2.

[8] Letter from Acting Reg’l Adm’r, FEMA Region VIII, to Dir. of Emergency Mgmt., Colo. Div. of Homeland Sec. and Emergency Mgmt., at 5 (Sep. 25, 2015).

[9] Letter from Chair, Weld County Bd. of County Comm’rs, to Dir. of Emergency Mgmt., Colo. Div. of Homeland Security and Emergency Mgmt., at 1 (Nov. 18, 2015) [hereinafter Applicant Second Appeal Letter].

[10] Applicant Second Appeal Letter, at 4.

[11] The Applicant also claims that the work performed was emergency work.  Applicant Second Appeal Letter, at 3.  The PW, however, was prepared as a permanent work (Category D) and the scope of work detailed in the PW reflects that the work is permanent.  Project Worksheet 1005, Weld County, Version 0 (May 12, 2014).  The classification of the work has no bearing the second appeal because according to 44 C.F.R. § 206.223(a)(3) (2012), all work must be the legal responsibility of an applicant at the time of the disaster.

[12] The Robert T. Stafford Disaster Relief and Emergency Assistance Act of 1988, Pub. L. No. 93-288, §§ 403, 406, 42 U.S.C. §§ 5172, 5170b (2013);

[13] 44 C.F.R. § 206.223(a)(3).

[14] Stafford Act § 406(e)(2).  Section 312 of the Stafford Act would also preclude FEMA from reimbursing an applicant for emergency or permanent work covered by a contract that shifts legal responsibility to the contractor during the construction period because the contract would duplicate PA funding.  See also City of Chi. v. FEMA, 660 F.3d 980 (7th Cir. 2013) (finding FEMA reasonably construed operating and maintenance fees that airlines were required to pay under private Use Agreements to the City of Chicago to be a duplicate funding source).

[15] Public Assistance Guide, FEMA 322, at 28 (June 2007).

[16] Change Order #1 and Amendments, Hokestra Gravel Pit Clay Liner-Slurry Wall Design-Build Contract (Dec. 10, 2013).

[17] Construction Contract, at § 107.17.

[18] Id. at §§ 104.02(a); 104.03.

[19] Id. at § 107.17.

[20] Applicant Second Appeal Letter, at 4.

[21] 44 C.F.R. § 206.201(c).

[22] Id.

[23] Public Assistance Guide, FEMA 322, at 22 (June 2007).

[24] Applicant Second Appeal Letter, at 2.

Last updated May 28, 2020