A cost overrun, also known as a cost increase or budget overrun, is an unexpected cost increase needed to complete the project and may occur as the result of unfeasible cost estimates, underestimated complexity, prolonged schedules or other reasons. A cost underrun, also known as a cost decrease or budget underrun, is an unexpected reduction in costs needed to complete the project. A cost overrun or underrun may result from a scope, schedule or budget change.
The recipient must notify FEMA as soon as an underrun or overrun is identified. Before redirecting underrun assistance to overrun requests within the same award, the recipient must request and receive FEMA approval. The recipient may request additional federal assistance for identified overruns, which FEMA may approve if program assistance is available. The subaward must continue to meet cost share and eligibility requirements. For example, cost overruns and underruns may affect the amount of available subrecipient management costs. Refer to Part 13 for more information.
For mitigation activities, a new Benefit-Cost Analysis (BCA) may be required if the recipient requests additional assistance.