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CHAPTER 1 Introduction 1.1. Purpose of This Report This Final Report presents the research, data sources, and analysis underlying Estimating Soft Costs for Major Public Transportation Fixed Guideway Projects, Part 1: Guidebook, which came out of TCRP Project G-10. The purpose of TCRP Project G-10 was to research soft costs in major public transportation capital infrastructure projects, with the goal of producing a guide for proj- ect sponsors to learn more about these costs and better estimate them in the future. This Final Report is one of two final products from the project and is intended to support the information summarized in the Guidebook in Part 1. Please refer to the Guidebook for a summary of how the results of the research presented here can be applied to practice, including an introduc- tion to soft costs and a new methodology to estimate these soft costs based on historical projects. 1.2. Background When a new rail transit project is proposed in the United States, its capital cost is one of the most visible and important characteristics in the public deliberation over whether to build the project. The capital cost of a rail project factors prominently when deciding alignment and mode during the alternatives analysis and preliminary engineering phases. It is reported in the press, debated by stakeholders, influences the public's perception of a sponsoring transit agency, and ultimately helps determine whether the project is ever constructed. The capital cost is also a cru- cial input to the cost-effectiveness indicator that helps determine the project's eligibility for fed- eral funds. In addition, the transit industry has recently come under scrutiny for perceived per- sistent underestimating of capital costs and its ability to contain such costs. While research on the transit industry has focused primarily on hard construction costs and estimation techniques, rel- atively little literature exists on the composition and estimation of soft costs for transit projects. Historically, soft costs have accounted for a significant portion of a capital project's total expenditures, yet many agencies know little about soft costs. As this report discusses, most rail transit projects' soft costs have ranged from as low as 11% to as high as 54% of hard construc- tion costs. Given the importance and public scrutiny of transit capital costs and the relative inattention to a cost category that makes up a significant portion of expenditures, the transit industry may benefit from improved information on soft costs. Therefore, the research team for TCRP Project G-10 hopes to help the transit industry better understand: · The definition, importance, composition, and timing of soft costs; · How the industry currently estimates soft costs, depending on project phase; 10