Cost Overrun Approval

Cost Overrun Approval. Changes in capital expenditure not associated with substantive construction or service changes require application for cost overrun approval. When actual or projected capital expenditures exceed the amount authorized by the Certificate of Need, the holder shall submit a request for cost overrun approval in accordance with this Rule and include: A. For construction projects: a revised estimate signed by an architect licensed to practice in Mississippi or a contractor authorized by law to do business in Mississippi; a description of the method used to determine the revised cost Page 48 — Mississippi State Department of Health estimate; justification for each line item for which a cost overrun is requested; a revised capital expenditure budget outlining all associated costs; and copies of any bid quotations. Any cost overrun on a construction or renovation project locating cost in or above the upper one-fourth range for U.S. construction or renovation cost shall require additional documentation to explain the reasons. B. For equipment purchases: an official price quotation from the vendor or manufacturer. C. For cost overruns resulting in part or in whole from requirements of the licensure and certification authority: appropriate documentation from the licensing or certification authority. Construction cost overrun requests may be compared with nationally recognized construction cost data, including RS Means or comparable industry references, or other bona fide reference. The fee for cost overrun approval shall be calculated as: 0.50 of 1% of the revised capital expenditure, less the original fee, not to exceed Twenty-Five Thousand Dollars ($25,000.00) and not less than Five Thousand Dollars ($5,000.00). For any proposal in which the estimated or actual cost exceeds the amount originally approved, a review by the State Health Officer shall be required.