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CHAPTER 5 Conclusion 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. This Final Report is intended to support the information summa- rized in the Guidebook in Part 1. Please refer to the Guidebook in Part 1 for a summary of how the results of the research presented here can be applied to practice, including an introduction to soft costs and a new methodology to estimate these soft costs based on historical projects. This conclusion section summarizes the key points from previous sections, and presents objectives for future research. 5.1. Literature Review While the term "soft costs" is often similar to "indirect costs" or other terminology, the FTA's definition of Standard Cost Category 80, Professional Services, is an operational definition con- sidered equivalent to soft costs for this report and consistent with the financial, construction, and related literature. 5.2. Soft Cost Estimation: State of the Practice Cost estimators for transit construction projects follow different approaches to estimating soft costs depending on the phase of the project. During alternative analysis through preliminary engineering, soft costs are estimated for each cost component as a percentage of hard construction costs. Estimators begin with a range of per- centages for each soft cost component and apply a value within that range to a specific project based on knowledge about the project and its sponsor. Figure 34 shows the percentages used for each cost component by each cost estimator questioned for this research. For each cost component, estimators choose one percentage from within that range based on historical experience and their knowledge of the specific project characteristics. During the final design and construction phases, estimates of soft costs based on a percentage of construction cost are replaced with more closely tailored, bottom-up estimates relying heav- ily on past experience with similar projects, as indicated earlier. Estimators usually perform a resource-driven analysis for each cost element. For instance, administration costs may be esti- mated based on headcount and construction schedules. 53