Publisher's Synopsis
The Federal Emergency Management Agency (FEMA) increasingly seeks fixed-price contracts for Public Assistance expenditures to help communities rebuild after disaster. FEMA and those communities have large incentives to estimate costs correctly before contracts are signed. One challenge to providing an accurate estimate of construction costs is that the cost of rebuilding can be affected by the reconstruction effort itself. One way to account for such changes is to use a future price forecast (FPF) factor, which adjusts a project's cost estimate to account for overall price-level increases caused by a disaster. The purpose of this study was to help FEMA identify when to use an FPF. To carry out the study, the authors convened panels of experts to discuss scenarios of hypothetical disasters-in particular, how these disasters could affect local economies. They also tested a variety of community and disaster-related measures that might be p
