Natural disasters like floods and hurricanes can severely damage homes, businesses and infrastructure. Those who suffer damages in natural disasters can apply to FEMA for financial assistance. When this happens, a cost estimate is needed to determine how much money it would take to either repair or replace the structure in question.
There is a process to arriving at a suitable cost estimate. When applicants come to FEMA they may draw up an estimate of how much they think it would cost to repair or replace their building. FEMA inspectors will also visit the site to look around and draw up estimates.
However, if an estimate for repairing a structure is over $5 million, or if FEMA and the applicant cannot come to an agreement and request an independent review, they turn to the cost engineers at the Walla Walla District Corps of Engineers.
The Walla Walla District Corps of Engineers Cost Engineering Office is a Cost Center of Expertise, or a Mandatory Center of Expertise (MCX). This means that they work on projects from all over the nation and provide cost analysis and recommendations for various federal agencies. When it comes to working with FEMA, the Corps performs verification of cost estimates for buildings under the Public Assistance program.
When FEMA gives the Walla Walla District claims to review, cost engineers evaluate the different costs and factors that would go into repairing or replacing the structure in question. For instance, if a building needs completely rebuilt, it is required to meet new building codes, including those that hadn’t existed when it was first constructed. This could affect the cost of construction. The cost of building materials is also an important thing that must be included in the estimate.
“We’re checking to make sure that what is estimated or claimed is fair and reasonable,” Alexzander Newcomb, cost engineer for the Walla Walla District, said.
One of the rules in reviewing cost estimates is known as the 50 percent rule. This is the rule that determines whether it is more realistic to repair a building or to replace it entirely. If the estimated total cost for repairing the building is greater than 50 percent of the estimated total cost for replacing the building, then the Corps can make the recommendation to FEMA to fund the replacement of the building. The final decision, of course, comes from FEMA. The Corps compiles a comprehensive report for each claim and sends it to FEMA, who then uses the report to reach an agreement with the applicant on how to move forward.
The Walla Walla District was not just given the distinction of being an MCX. Before developing a close working relationship with FEMA, the district was performing reviews for the Department of Energy and the Bureau of Reclamation. Over the years, the district developed a reputation for having a great cost engineering team and maintaining a high working standard.
Now, the district applies that high standard to work sent from FEMA, working on creating comprehensive cost estimates for construction projects all over the nation, including continued projects to rebuild infrastructure in Puerto Rico after Hurricane Maria in 2017. Recently this included one review for a construction project totaling $13 billion.
“You don’t get bored, because you’re always doing something different,” Ricardo Guzman, cost engineer for the Walla Walla District, said.
Another notable achievement of the Walla Walla District Cost Engineering Office is the development of a national equipment cost pamphlet. This pamphlet contains a large table of pre-calculated rates for over 1,500 machines from Caterpillar, Komatsu, John Deere and other companies. These rates are used when calculating cost estimates, either for Corps of Engineers contracts or for other government agencies, including FEMA. This information has saved the government substantial amounts of money by limiting equipment pricing to pre-determined fair and reasonable levels. The pamphlet is published biennially and has been used by the USACE since at least 1955.
The latest National Equipment Pamphlet can be found here.