Buildings and Equipment: Mastering One of the Most Complex Categories of Work



Funding Considerations During Construction/ Project Implementation

Applicants must obtain approval for an Improved Project from the state prior to construction, and approval for an Alternate Project from FEMA before construction. In the case of a significant change within one year of the kickoff meeting (e.g., new location, footprint, function or size) to an Improved Project facility, the project must also be approved by FEMA prior to construction. In addition, it is important to note that FEMAwill only pay for repairs included in the PW scope of work — and any changes to the scope will require FEMA approval and the preparation of a new PW version to reflect those changes.

These requirements become particularly important during the construction phase of the recovery process. Once all the projects are formulated and the PWs written and documented, it is easy to assume that the grant management portion of the recovery is under control, and thus not revisit these issues until closeout and audit. This is a mistake that too many applicants have made, to their detriment. In fact, it is common for previously undiscovered damages to be revealed during construction and cumulative changes in scope to occur through innocuous-seeming change orders — all common practice during a normal capital project, but having unintended consequences in a FEMA- funded endeavor.

All too often, this results in a “standard” (“as it was” plus “as it has to be”) project — which was originally supposed to be paid based on actual costs — being declared an Improved Project at closeout and thus retroactively capped at the original project estimate, which may not have been as carefully prepared as it would have been were an Improved Project the initial plan. This can be avoided by insisting on a methodical approach to preparing all large project estimates from the outset.

Assigning or hiring a FEMAPAgrant manager to work closely with the construction management team can go a long way toward reducing the occurrence of unintended Improved Projects and other funding-related mistakes that can occur during project implementation.

Management and Administrative Costs

For the fullest reimbursement of staff time and contract labor costs, it is also important to understand the policies related to (1) supervision and management of force account labor, (2) project management, and (3) grant management costs.

“Grant management costs are split into two types of costs: indirect/ management costs and direct costs.”