Economic Justification: Economic Analysis

The economic justification can only consider costs that are eligible for reimbursement under the ER Program and cannot include costs that are NOT eligible for reimbursement under the ER program. Costs such as on-going maintenance or any other work normally performed by the facility owner to correct preexisting, non-disaster related deficiencies cannot be included (see 23 CFR § 668.105 (b)).

For Betterment funding to be approved, there must be clear justification based on engineering judgment and critical thinking. FHWA will consider historic records and repair costs, likelihood of future events, estimated costs to repair damage from future events, and the expected resilience of both the repair in-kind and betterment alternatives. Primary components of the Economic Analysis are the:

  1. Cost of the Betterment
  2. Likelihood of future ER eligible damage
  3. Cost to repair future damage both with and without the Betterment



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