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10 Estimating Soft Costs for Major Public Transportation Fixed Guideway Projects 80.04Construction Administration and Management--Quality control, quality assurance, and construction management during the construction phase. 80.05Insurance--Project insurance to cover professionals' liability insurance, owner-provided builder's risk, other agency insurance, etc. This component does not include construction contractors' liability or general insurance. All construction contractors' insurance costs should be reported in a corresponding hard cost category. 80.06Legal; Permits; Review Fees by Other Agencies, Cities, etc.--Costs associated with the local and state project approval process, and any legal costs. 80.07Surveys, Testing, Investigation, Inspection--Costs of alignment and facility surveys, security and safety inspections, material and geological testing, and inspection services. 80.08Start Up--Costs associated with the operational initiation of services and training of operations, maintenance, and supervisory staff. Timing of Soft Costs While some components of soft costs tend to relate to specific phases of project development over time, others tend to reflect costs incurred throughout the life of the project. For instance, most projects will incur all of their Preliminary Engineering expenses (SCC 80.01) early in their lifecycle, and Startup costs (SCC 80.08) will be spent near the end of the project. In contrast, Insurance costs (SCC 80.05) may be incurred over the life of the project. Typical versus Less Typical Soft Costs The types of soft costs encountered in rail transit construction projects in the United States can vary widely depending on project characteristics, local and state regulations, and the project administration practices and experience of the sponsor agency. As shown in Exhibit 4, certain typical soft cost components are normally required for any new rail construction project, while other soft cost components are encountered less frequently and may be unique to the project. As a result, some projects may incur no costs in some components, while other projects may incur costs in many or even all components. For example, most projects will incur significant soft costs for hiring a contractor or assigning employees to prepare preliminary engineering and design plans and help obtain environmental approval for a project. Similarly, nearly all projects require project administration and management. To take a contrasting example, most agencies take on significant soft costs to manage the construction project once the "shovel hits the dirt." However, the exact nature of these costs depends on the agency: these costs could include salaries and wages of employees in the transit TYPICAL SOFT COSTS LESS TYPICAL SOFT COSTS INCURRED IN SOME INCURRED IN MOST PROJECTS PROJECTS, DEPENDING ON CHARACTERISTICS Design and engineering services for Professional services to support acquiring real preliminary engineering and final design estate for right-of-way Transit agency staff managing project, Third-party contractor managing construction development, construction, and customer information Reimbursement to external entities such Design and engineering services to re-design as police, utilities, and other costs of local a project, due to unforseen circumstances and state government Insurance Exhibit 4. Types of soft costs encountered in rail transit construction.