Summary Paragraph On August 29, 2005, Hurricane Katrina impacted the Applicant and substantially damaged Applicant’s Gainard Woods Pump Station (Facility). FEMA prepared Project Worksheet (PW) 17448, documenting costs to replace the facility. FEMA later reduced the award by $202,500.00 based on a change order taking a liquidated damages offset against the final contract price. The Applicant asserted the reduction was improper and requested that FEMA reinstate it. In a March 9, 2015 letter, FEMA denied the request. On June 29, 2015, the Applicant filed its first appeal arguing FEMA inappropriately reduced the award by the amount of the liquidated damages offset. The Region VI Regional Administrator (RA), denied the appeal, asserting it was untimely and liquidated damages were a credit requiring a reduction of the award. The Applicant filed a second appeal through a May 23, 2016 letter, arguing 1) it filed the first appeal within 60 days of receiving a letter from the Governor’s Office of Homeland Security and Emergency Preparedness, and 2) the liquidated damages offset was not a credit. Authorities and Second Appeals 44 C.F.R. § 206.206(c)(1). OMB Circular A-87 Att. A (C)(4)(a), 2 C.F.R. § 225 App. A (C)(4)(a). FEMA Second Appeal Analysis, Florida Department of Transportation, FEMA-4068-DR-FL, at 3 (Aug. 5, 2016). FEMA Second Appeal Analysis, Florida Department of Transportation, FEMA-1785-DR-FL, at 3 (July 9, 2016). Headnotes Under 44 C.F.R. § 206.206(c)(1), the Applicant has 60 days to file an appeal upon receipt of notice of the decision being appealed. In this instance, the Applicant received notice of FEMA’s decision to reduce funding through a March 9, 2015 letter but filed its appeal on June 29, 2015, 112 days after March 9, 2015. Pursuant to OMB Circular A-87 App. A (C)(4)(a), applicable credits refer to those receipts or reduction for expenditure type transactions that offset or reduce expense items allocable to federal awards as direct or indirect costs. Examples of such transactions are: purchase discounts, rebates or allowances, recoveries or indemnities on losses, insurance refunds or rebates, and adjustments of overpayments or erroneous charges. To the extent that such credits accruing to or received by the governmental unit relate to allowable cost, they shall be credited to the federal award either as a cost reduction or cash refund, as appropriate. The liquidated damages offset is a recovery on a loss; accordingly they should be credited to the federal award.