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CHAPTER 4 How Does the Federal New Starts Process Relate to Soft Costs? The FTA's New Starts grant program makes available new funding per year to project sponsors The FTA requires (also called grantees) to construct transit infrastructure. The FTA requires candidate projects to adhere to a well-defined development and planning process, meeting multiple requirements and candidate projects following a structured schedule of set milestones that can affect soft costs. Major transit capital to adhere to a project planning in the federal process involves the development of projects from an initial con- well-defined cept through final design, construction, and operation, and continuing through the eventual replacement of the project. development and planning process, Along with estimating hard project costs comes the estimation of soft costs. Over time, as a project becomes better defined, the soft cost estimation process increases in sophistication from the meeting multiple proportionate approximation to the more detailed or "bottom up" estimation for each functional requirements and aspect of soft costs. following a struc- Sponsors seeking federal funds, typically from FTA's New Starts or Small Starts grant program, tured schedule of usually follow a structured process to define, plan for, and build a transit project. Projects join a pipeline of other candidate projects to compete for federal funds, submitting a New Starts set milestones that application every year in which the project and its sponsor are evaluated on a variety of criteria. can affect soft Provided that grantees meet certain requirements, FTA periodically authorizes project sponsors to proceed to the next stage of planning or design, often funded in part by federal funds. costs. Exhibit 5 describes these phases schematically and indicates where in the process the sponsor typically makes an estimate of all project costs, including soft costs, with the FTA Standard Cost Category workbook structure. FTA New Starts, the largest federal program for funding major new capital investments in public transportation, has several decision points for proceeding, also shown here. Each of these decision points requires an estimate of project capital costs, including the estimation of soft costs. Prior to these decision points, stages of technical analysis are required as shown in the devel- opment of each project. Sponsoring agencies are required to submit documentation, including detailed estimates for project capital costs, for evaluation by the FTA under the New Starts criteria process and the Project Management Oversight (PMO) process. Other initiatives, such as the Fixed Guideway Modernization Program, provide funds for rehabilitation or improvement of existing transit systems through similar means. When Does FTA Ask for Soft Cost Estimates? FTA requests cost estimates in the SCC format at each of the stages of project development: Planning, Alternatives Analysis, Preliminary Engineering, Final Design, and Construction. As noted above, grantees report soft cost estimates in SCC 80, Professional Services. Specific federal 13