Benefit Cost Analysis (BCA)

Benefit-cost analysis (BCA) is a standardized, systematic way to measure all of the significant direct benefits of a mitigation project against the costs.

Benefit-cost analysis (BCA) is a standardized, systematic way to measure all of the significant direct benefits of a mitigation project against the costs. A BCA always involves looking at damages and losses twice: before mitigation (the “as-is” situation) and after mitigation. All mitigation grant program applications require a completed Benefit Cost Analysis (BCA) to be submitted with the application for funding.

BCA Overview

FEMA provides BCA software to help sub-applicants determine the cost-effectiveness of their proposed mitigation projects. To be eligible for federal funding assistance through FEMA’s Hazard Mitigation Grants programs, a mitigation project must have a benefit-cost ratio of 1.0 or greater according to FEMA’s BCA software.

BCA Toolkit Version 6.0

On July 29, 2019, FEMA announced the release of the new version of the Benefit-Cost Analysis (BCA) Toolkit, Version 6.0, available to the public, and as of the release date may be used for project applications. Version 6.0 features an improved user experience and 80% reduction in data inputs compared to the previous version (V5.3). To utilize Version 6.0, open the Microsoft Excel file at this link below and install the Microsoft Excel Add-in by following these directions:

1. Go to: https://www.fema.gov/media-library/assets/documents/179903
2. With Microsoft Excel open, go to the Insert tab, in the Add-ins section, click on My Add-ins.
3. Select the Store option and search for FEMA Benefit-Cost Analysis Calculator. Click Add.
4. You should now see the FEMA BCA V6.0 icon in the upper right-hand ribbon bar.
5. To launch the Toolkit, click on the FEMA BCA V6.0 button. A sidebar will open.
6. Click Open Calculator to begin your BCA.
7. The add-in window will open and take you to the Home screen. From here you can start a new project by clicking Add Project.
8. To save your work, click “Finish” on the second screen, close the add-in window, and save the Excel file, renaming it if desired.
9. Please also see the Version 6.0 Release Notes at the above link for important information.

If users need additional assistance with installing the Excel Add-in for the Benefit Cost Analysis Calculator, Microsoft provides detailed step-by-step directions here:

https://support.office.com/en-us/article/get-an-office-add-in-for-excel-d3df5854-0a4e-4169-9cc3-25177a288d3d#ID0EAABAAA=Newer_versions

If a user does not have Microsoft Excel installed, they can use Microsoft Excel online for free and will still be able to install the add-in. 

What’s New in the BCA Toolkit Version 6.0:

1. Excel-based platform
2. Compatible with both Windows and Macintosh operating systems
3. Streamlined user interface and improved user experience
4. Reduction in number of manual-input data fields
5. Improved help content
6. Improved report formatting
7. Google Maps-based address lookup and standardization

Major Differences from Version 5.3:

1. Version 5.3 has the Damage Frequency Assessment (DFA) methodology as a separate module. In Version 6.0, the DFA methodology is built into all the hazard modules.
2. Version 6.0 does not allow the user to attach files within the Toolkit or alert the user that required documentation for FEMA Hazard Mitigation Assistance (HMA) grant applications is missing.
3. Version 5.3 saves all the user’s projects in one location. Version 6.0 saves projects within the .xlsx file, allowing the user to define their own file management protocol.
4. For more information, please see the BCA Toolkit 6.0 User Guide.

Important Notes:

1. Users should continue to use Version 5.3 for seismic building retrofit projects (structural and non-structural). Seismic retrofit projects for non-buildings (i.e. utilities or roads/bridges) or other seismic retrofit projects performed using either the Historical or Professional Expected Damages approach may be analyzed in Version 6.0. An update to Version 6.0 is planned for release later in 2019 that will include an improved methodology for seismic building retrofit BCAs.
2. There is no way to import or export projects between Versions 5.3 and 6.0.
3. For more information, and a list of known issues, please see the BCA Toolkit 6.0 User Guide.

FEMA has developed a BCA Toolkit 6.0 User Guide for this new BCA version release, available for download: FEMA Benefit-Cost Analysis Toolkit Version 6.0 User Guide (May 2019)

Additional Software Documents:

FEMA Benefit-Cost Analysis (BCA) Toolkit 6.0 Release Notes (First Issuance)

FEMA Benefit-Cost Analysis (BCA) Toolkit 6.0 Release Notes (July 31, 2020)

Version 5.3 of the BCA toolkit has been phased out and can no longer be used in application submissions, or in any mitigation project sub-application already been awarded by FEMA that require an updated BCA in support of a scope of work modification or a cost overrun. If there are any questions related to the BCA Version 5.3 Toolkit, please contact MEMA's Mitigation Unit.

Links to Hurricane Hazard and Earthquake Hazard datasets are provided on FEMA’s main BCA page (www.fema.gov/benefit-cost-analysis) and are required when performing analysis for hurricane wind retrofit projects or seismic retrofit projects.

For assistance installing or using the BCA Toolkit, please contact the BCA Helpline at [e-mail] or 1-855-540-6744. For more information about FEMA’s BCA program, see www.fema.gov/benefit-cost-analysis.

BCA Training

Check MEMA’s Training Registration System to find out when BCA classroom training is available. The training courses IS-276.A: Benefit Cost Analysis Fundamentals , the 2019 version of the Introduction to Benefit-Cost Analysis course (E/L 0276), and IS-277.A: Benefit Cost Analysis Entry Level are also available online.

In addition, FIRM and FIS trainings are available online, including: IS-273: How to Read a Flood Insurance Rate Map (FIRM) and IS-274: How to Use a Flood Insurance Study (FIS).

MEMA BCA Training Workshop/Webinar information can be found on the MEMA Hazard Mitigation Technical Assistance and Webinars/Briefings page.

Additional Resources

BCA Training Guide

Benefit-Cost Analysis (BCA) Data Documentation Template – Damage-Frequency Assessment

FEMA 2006 Guidelines for Benefit-Cost Analysis (June 2006)

FEMA BCA Reference Guide (June 2009)

FEMA Supplement to the Benefit-Cost Analysis Reference Guide (June 2011)

FEMA Benefit-Cost Analysis Re-engineering (BCAR) Version 4.5 (May 2009)

FEMA Benefit‐Cost Analysis Re-­engineering (BCAR) Version 6.0 (December 2011)

What is a Benefit?

Generator Job Aid

FEMA BCA Project Useful Life Standard Values

Ecosystem Service Benefits

In September 2015, FEMA released three new activities eligible for the Hazard Mitigation Assistance (HMA) programs: Aquifer Storage and Recovery, Floodplain and Stream Restoration, and Flood Diversion and Storage, known as the Climate Resilient Mitigation Activities (CRMA). FEMA has developed BCA tools to calculate benefits for drought mitigation and/or ecosystem services for mitigation projects. In addition, FEMA developed pre-calculated benefits for cost effectiveness evaluation of soil stabilization, flood diversion, and reforestation projects in wildfire impacted areas to support expedient implementation of post-wildfire mitigation actions. BCA tools:

• CRMA BCA Tools Policy Clarification

Additional Resources

Ecosystem Service Value Updates (June 2022)

Ecosystem Service Benefits in Benefit-Cost Analysis for FEMA’s Mitigation Programs Policy Fact Sheet (January 2021)

Ecosystem Service Benefits in Benefit-Cost Analysis for FEMA’s Mitigation Programs Policy (September 2020)

Benefit-Cost Analysis Tools for Drought, Ecosystem Services, and Post-Wildfire Mitigation for Hazard Mitigation Assistance (May 2016)

Supplemental Guidance for Conducting a Benefit-Cost Analysis (BCA) for a Floodplain and Stream Restoration Project (March 2016)

Precipitation Frequency Data

The NOAA’s National Water Center has released updated precipitation frequency estimates for Massachusetts. These estimates (published in Atlas 14, Volume 10) are used in many infrastructure design and planning activities, and are available for download through the Precipitation Frequency Data Server (PFDS).

The Northeast Regional Climate Center (NRCC) and the Natural Resources Conservation Service (NRCS), through a joint collaboration, have developed a web-based platform that allows users access to updated extreme rainfall analyses for New York and New England. The website provides a subset of users access to extreme rainfall statistics through the most recent year (i.e., there will be an automatic update of the rainfall statistics on an annual basis). In future years, these updates will provide the necessary information for considering subsequent updates and provide a readily available source of updated statistics. The website can be found at: http://precip.eas.cornell.edu/ .

Available through the NOAA National Severe Storms Laboratory (NSSL), a federal research laboratory under NOAA's Office of Oceanic and Atmospheric Research, the Multi-Radar/Multi-Sensor (MRMS) system was developed to produce severe weather, transportation, and precipitation products for improved decision-making capability to improve hazardous weather forecasts and warnings, along with hydrology, aviation, and numerical weather prediction. The MRMS project utilizes an automated system that rapidly and intelligently integrates data from multiple radars and radar networks, surface observations, numerical weather prediction (NWP) models, and climatology to generate seamless, high spatio-temporal resolution mosaics. The MRMS Operational Product Viewer displays a rolling archive of real-time operational MRMS products dating back to October 2020.

For help with FEMA’s benefit-cost analysis, call the BCA Helpline at 1-855-540-6744 or email [e-mail].

Additional Resources

USACE Sea-Level Change Curve Calculator (Version 2021.12)

Applied Technology Council (ATC) Wind Speed Website

USGS Surface-Water Data for Massachusetts

USGS Current Water Data for Massachusetts

National Snow and Ice Data Center (NSIDC)

What is a Benefit?

The benefit of a mitigation project is simply the difference in expected damage and loss before and after the project is completed. Benefits of a proposed mitigation project can be sorted into four main categories:

Avoided Physical Damage	Buildings Contents Infrastructure Landscaping Site Contamination Vehicles Equipment
Avoided Loss-of-Function Costs	Displacement costs for temporary quarters Loss of rental income Loss of business income Lost wages Disruption time for residents Loss of public services Economic impact of loss of utility services Economic impact of road/bridge closures
Avoided Casualties	Deaths Injuries Illnesses
Avoided Emergency Management Costs	Emergency operations center costs Evacuation or rescue costs Security costs Temporary protective measure costs Debris removal and cleanup costs Other management costs

 

Additional Resources

(SUPERCEDED) Cost Effectiveness Determinations for Acquisitions and Elevations in Special Flood Hazard Areas Using Pre-calculated Benefits

Update to “Cost-Effectiveness Determinations for Acquisitions and Elevations in Special Flood Hazard Areas Using Pre-Calculated Benefits” Memorandum

Pre-Calculated Benefits for Certain Hospital Generators (September 2021)

MEMA Hospital Generators Summary Flyer

Hospital Generator Pre-Calculated Benefit for HMA Programs FEMA Methodology Report (December 2021)

Using the U.S. Census Bureau’s TIGERweb Application to Determine if Your Hospital is Located in an Urbanized Area

Aquifer Storage and Recovery BCA Tool

Ecosystem Service Benefits Calculator

Pre-calculated benefits for post-wildfire mitigation actions

Analyzing the Dam Failure Hazard in the Hazard Mitigation Assistance (HMA) Program Benefit Cost Analysis (BCA)