Two years ago, we walked through the basics of Public Assistance (PA) arbitration before the Civilian Board of Contract Appeals (CBCA) in FEMA Public Assistance Arbitrations at the CBCA. Since then, FEMA has been operating under real strain: a large backlog of pending disaster declarations, an Office of the Secretary of Homeland Security review requirement that held up billions in already-approved grants for most of the past year, and workforce reductions that have thinned the staff processing both first appeals and arbitration requests. Cameron Hamilton’s August confirmation as permanent FEMA administrator and Kristi Noem’s departure have brought some stability, but applicants are still waiting longer than usual for first appeal decisions and are increasingly turning to arbitration rather than a second appeal to get a final answer.

Against that backdrop, the CBCA has kept deciding cases, and several 2026 decisions are worth flagging for anyone with a PA dispute in the pipeline, whether you’re weighing arbitration for the first time or you have one pending now.

The Framework

As a refresher: An applicant denied PA funding gets one mandatory first-level appeal to FEMA. If that appeal is denied — or FEMA sits on it for more than 180 days — the applicant can choose either a second-level appeal within FEMA or arbitration before the CBCA, but not both. Arbitration is available only if (1) the dispute arises from a disaster declared after January 1, 2016; (2) the amount in dispute exceeds $500,000 (or $100,000 for rural applicants); and (3) the applicant timely filed its first appeal. A request for arbitration (RFA) must be filed within 60 days of the first appeal decision, or within 30 days of withdrawing a first appeal that FEMA failed to decide within 180 days. The full mechanics are detailed in our 2024 post.

Timeliness Is Not Negotiable

City of Independence, Missouri, CBCA 8833-FEMA (Apr. 24, 2026), is a reminder that the 60-day arbitration deadline is jurisdictional, not just a guideline. Independence filed its RFA 65 days after receiving FEMA’s first appeal decision, five days late, after the city said confusing communications with its state grantee muddied the deadline. The panel dismissed the case outright. Once the 60-day window closes, the first appeal decision becomes FEMA’s “final agency determination,” and the board has no authority to extend that deadline for good-faith confusion, minimal prejudice to FEMA, or the Stafford Act’s remedial purpose. The lesson: Calendar the deadline the moment the first appeal decision arrives, and don’t assume equitable arguments will save a late filing.

COVID-19-Era Labor Costs Are Still Being Litigated

Four years after the pandemic, COVID-related force account labor claims remain a major source of PA disputes. In Aultman Health Foundation, CBCA 8702-FEMA (July 6, 2026), a $27.7 million dispute over premium and incentive pay for permanent hospital staff, the panel split the difference: Premium pay tied to a pre-disaster, non-discretionary staffing policy was eligible, but incentive pay tied to vaguer, undated, CNO-approved criteria was not. FEMA’s test, pulled directly from the PAPPG, asks whether the applicant’s pre-disaster written labor policy has set, non-discretionary criteria for activating the pay type, it applies uniformly regardless of a disaster declaration, and payment is conditional on federal funding. Notably, one judge dissented even on the premium pay finding, arguing that language making employees merely “eligible” for premium pay isn’t the same as mandating it. Applicants relying on discretionary-sounding labor policies for large COVID-19 cost claims should expect continued scrutiny.

Watch for “Other Federal Agency” Defenses

Gasparilla Island Bridge Authority, CBCA 8767-FEMA (July 21, 2026), illustrates a defense that comes up often in infrastructure claims: FEMA won’t fund permanent work that falls under another federal agency’s more specific authority, even if that applicant hasn’t actually received funding from that other agency. GIBA’s toll bridge was damaged by Hurricane Milton, but the board found the Federal Highway Administration’s (FHWA) Emergency Relief Program had specific authority over the federal-aid roadway, and that GIBA couldn’t manufacture PA eligibility by simply declining to enter into the cooperative agreement that would have made it eligible under FHWA’s program instead. If your facility could plausibly fall under another agency’s program (FHWA roads and bridges, Army Corps flood control, HUD housing, etc.), expect FEMA to raise this, and be ready to show either that the other program doesn’t apply or that you’ve genuinely pursued it.

Insurance Offsets Extend to Litigation Costs with Limits

Municipality of Canóvanas, Puerto Rico, CBCA 8474-FEMA (Apr. 27, 2026), addresses a recurring post-Maria issue: When FEMA offsets PA funding by insurance recoveries, applicants can recover their reasonable costs of pursuing that insurance claim, including attorneys’ fees. Here, the dispute was over $584,000 in expert witness fees the municipality’s contingency-fee law firm had passed through. The board found the contract, as amended, didn’t actually obligate the municipality to pay those fees, since the municipality had visibly waited to pay the experts until it knew whether FEMA would reimburse the cost. This is the kind of extrinsic evidence that dooms a claim under 2 CFR 200.459(a), which makes professional service costs contingent on federal reimbursement unallowable. Any applicant recovering litigation costs through PA should make sure fee arrangements create a real, non-contingent payment obligation, and should be able to show that in writing before a dispute arises, not after.

Practical Takeaways

Four takeaways from this year’s decisions: Deadlines are enforced literally, with no equitable exceptions; discretionary-sounding labor and reimbursement policies get read narrowly against the applicant; overlapping federal authority is a live defense worth investigating early, especially for roads, bridges, and other infrastructure; and contract and fee arrangements need to be airtight and contemporaneous, not reverse-engineered once FEMA starts asking questions. With FEMA’s own processing timelines still running long, more disputes are likely to reach the 180-day mark and become arbitration-eligible even before a first appeal decision issues, so it’s worth tracking that clock as closely as the 60-day deadline after a decision.