When a Private Nonprofit cannot accept the terms of a Small Business Administration (SBA) loan, resulting in loan denial, PA funding for permanent work is limited to the costs that the loan would not have otherwise covered. The work at issue in GMP 180211 is emergency work. Therefore, the limitation to available PA funding due to the Applicant’s SBA loan denial does not apply. For emergency protective measures to be eligible, the applicant is responsible for showing the work is required due to an immediate threat resulting from the declared incident. The insurance adjuster’s assessment of the Facility substantiates the disaster as the cause of the damages and is further corroborated by numerous post-disaster photographs. FEMA provides PA funding for contract costs based on the terms of the contract if an applicant meets federal procurement and contracting requirements. The Applicant has not provided information documenting the procurement history for the contracted work, and both pre- and post-disaster contracts contain prohibited cost-plus-percentage-of-cost provisions. FEMA has discretionary authority that it exercises on a case-by-case basis to resolve issues of noncompliance, including procurement noncompliance. At times, FEMA may exercise its discretion and award reasonable costs or disallow funding. Given the circumstances on appeal, FEMA determines that funding totaling $262,929.59 represents reasonable costs a prudent person would incur for the work at issue.

Because GMP 180211 documents emergency work, limitations to available PA funding due to the denial of the Applicant’s SBA loan do not apply. The emergency protective measures the Applicant completed were necessary as a result of the disaster. However, neither the predisaster contract nor the post-disaster contract with Belfor were procured in accordance with federal regulations. Subject to insurance adjustments, FEMA awards reasonable costs of $262,929.59 for the work at issue. Therefore, this appeal is partially granted.

Stafford Act §§ 403, 406(a)(3)(A)(ii). 2 C.F.R. §§ 200.318(a), (i), 200.319, 200.320, 200.323, 200.338, 200.404. 13 C.F.R. § 123.202(a). 44 C.F.R. §§ 206.223(a)(1), 206.225(a), 206.226(c)(2). PAPPG, at 51, 57-58, 66, 76-78, 80, 83, 98. Midwest Energy, Inc., FEMA-4063-DR-KS, at 5, City of Atlanta, FEMA-1858-DR-GA, at 14.