Rushing to secure contracts in the aftermath of a hurricane might seem like a win-win for contractors and owners, but jumping into private contracts being funded by FEMA grants could be a costly mistake if you don’t consult a Greensboro contractor attorney first. FEMA grants are intended to make homes and businesses safe and sanitary, not to provide funding for a complete restoration.
In part one of this two-part series, we discussed the role of FEMA in disaster relief and introduced FEMA grants. In part two, we will explore the types of repairs typically covered by FEMA grants and explicate the importance of contractual transparency after a hurricane.
Breaking Down FEMA Grant Coverage
FEMA grants are meant to be utilized in a limited scope. For example, a FEMA grant might cover the purchase and installation of basic flooring (e.g., laminate or vinyl tile), but it will not cover the cost of repairing a homeowner’s damaged hardwood flooring. As a contractor, it’s imperative that you are familiar with these vital distinctions.
Before you start repairing a home or business, you need to be certain that your operations are covered by the restrictions of your client’s FEMA grant and adjust your contract accordingly. The rules governing private residential and commercial property differs slightly, but neither case will ever result in a direct contract with FEMA. Although FEMA grants only cover certain repairs, the grants are secured by the federal government and will always be paid as long as you work within the scope of the work outlined in the grant.
Transparency Helps You Secure Payments
Contractors are required to work under the rules and regulations established in the Truth In Negotiations Act when receiving compensation funded by a federal grant. You may be unfamiliar with the requirements and extra administrative expenses associated with these types of contracts, but a Greensboro construction litigation attorney can help catch you up to speed.
On the other hand, if you have pursued federal projects in the past, you likely find these rules and regulations familiar. Discussing the scope of FEMA coverage with a Greensboro construction litigation lawyer before you start working on disaster relief projects can help you avoid working on projects that aren’t approved by FEMA.
Hurricanes present contractors with a unique opportunity to take advantage of a large influx of projects funded in part by the federal government, but if you aren’t aware of the scope of FEMA’s grant and loan contributions, you could end up paying out of pocket for repairs.
Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.