A cost is reasonable if, in its nature and amount, it does not exceed that which would be incurred by a prudent person under the circumstances prevailing at the time the Applicant makes the decision to incur the cost.

FEMA determines reasonableness by evaluating:

• The cost is of a type generally recognized as ordinary and necessary for the type of facility or work
• The cost is comparable to the current market price for similar goods or services based on:
• Historical documentation
• Average costs in the area
• Published unit costs from national cost estimating databases