FEMA uses a cost estimating methodology called the Cost Estimating Format (CEF) to better estimate the total cost of projects for which the base cost of labor, materials, and equipment meets or exceeds the large project threshold (see Large Projects). The CEF is a forward-pricing model that allows FEMA to account for all possible costs associated with a large project. FEMA uses experienced program specialists to apply the CEF. The CEF should only be used on large projects for which the permanent restorative work is 90% or less complete.
The CEF relies on the development of a clear definition of the scope of work that is eligible for public assistance. Once this scope of work has been developed, the CEF is applied in eight parts. Part A represents the base cost of completing the project; it includes the labor, materials, and equipment necessary to complete each item of the scope of work. Parts B through H contain job-specific factors that may be added to the base cost determined in Part A. These factors are described below.
Part B includes construction costs not typically itemized in Part A, such as the general contractor’s supervision costs.
Part C reflects construction cost contingencies and addresses budgetary risks associated with project complexity during the design process.
Part D accounts for the contractor’s overhead, insurance, bonds and profit.
Part E accounts for cost escalation over the life of the project.
Part F includes fees for special reviews, plan checks, and permits.
Part G is the applicant’s reserve for change orders, hidden damages, and differing site conditions discovered after construction starts.
Part H accounts for the applicant’s cost to manage the design and construction of the project.
Reference: Public Assistance Guide, FEMA 322, pages 105-106