FEMA has increased the “small project” threshold for the Public Assistance (PA) program to $1 million. This threshold applies to all projects under disasters declared on or after August 3, 2022, as well as to all unobligated PA projects under disasters declared between March 13, 2020, and August 3, 2022.
For small projects below the Agency’s established threshold, FEMA implements simplified procedures to increase efficiency and expedite receipt of recovery funding. FEMA funds small projects based on estimates and, once obligated, those funds become available for eligible project work. Unlike large projects (over $1 million in value), applicants are not required to submit quarterly reports or reconcile final costs, unless they are requesting additional funding.
While simplified procedures are aimed at alleviating the administrative burden to applicants and expediting receipt of funding after project obligation, there can be disadvantages. For example, small projects are limited to the value of the FEMA estimate, and applicants are not allowed to receive project-by-project overruns. This makes the development of accurate cost estimates and complete scopes of work important to reduce the risk of insufficient funding. With small projects, applicants can only receive additional funding if the aggregated value of all small projects is less than the cost of all repairs. If that occurs, however, applicants may only request this additional funding after the work is completed on all small projects. This process may take several years, potentially resulting in cash flow issues for applicants.
Our team is available to assist applicants to both maximize funding under this new threshold and avoid the potential pitfalls of this simplified procedure. For additional information, please contact your Project Manager or any one of our experts at 1-855-CRISIS-8.