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FEMA Benefit Cost Analysis Toolkit V-5.0

On April 4, 2014, FEMA released the Benefit-Cost Analysis Toolkit Version 5.0 which is now available at http://www.fema.gov/media-library/assets/documents/92923. This toolkit can be used to determine the cost-effectiveness for projects under development for any of FEMA’s Hazard Mitigation Assistance programs. As of April 4, 2014, version 4.8 and version 5.0 are the only allowable versions of the BCA Tool.

Benefit-Cost Analysis is a quantitative procedure that assesses the cost-effectiveness of a hazard mitigation measure by taking a long-term view of avoided future damages as compared to the cost of a project. Applications submitted under FEMA’s Hazard Mitigation Assistance programs must use a FEMA-approved Benefit Cost Analysis methodology to demonstrate cost-effectiveness. Cost-effectiveness is typically demonstrated by the calculation of a Benefit Cost Ratio. Projects for which the discounted value of future benefits exceeds the current costs are generally considered cost-effective. Benefits may include avoided damages, loss of function, and displacement.

This toolkit contains a number of new features including the calculation of environmental, social and non-traditional benefits such as volunteer costs, street maintenance costs and National Flood Insurance Program administration and claim costs. FEMA has also updated the life safety values and the methodology for calculating residential displacement costs.

If you have any questions regarding the usage of the tool, please contact the benefit cost helpline at bchelpline@fema.dhs.gov or 1-855-540-6744.

More information on the Hazard Mitigation Grant Program may be found on FEMA’s website at http://www.fema.gov/hazard-mitigation-grant-program.

Information about the Benefit Cost Analysis can be found at https://www.fema.gov/benefit-cost-analysis