Cost Estimation for FTA Funded Transit Projects
Establishing a reliable baseline cost estimate is a critical element for successful project delivery. The Federal Transit Administration (FTA) requires that a Project Sponsor’s cost estimate be reasonably firm and reliable before commitment of federal funds for Capital Investment Grant (CIG) projects.
Developing Cost Estimates
When developing cost estimates for the CIG program, project sponsors must use the following material:
- New Starts Standard Cost Categories (SCC) worksheets - issued by FTA for reporting the capital costs and schedules of proposed projects.
FTA’s Oversight Procedures
FTA performs a thorough evaluation to confirm the reliability of a Project Sponsor’s cost estimate by ensuring that estimates follow standard industry practices and the estimation process is sound. In its review process, FTA assesses the consistency of the cost estimating information provided by the Project Sponsor, evaluates the methodologies used, and confirms that the estimate adequately reflects the overall project scope, the estimated quantities shown on the design documents, the anticipated market conditions, the risk elements associated with the project, and the project schedule.
FTA uses the following oversight procedures when reviewing the reasonableness of a project sponsor’s cost estimates:
- Oversight Procedure 33 for Project Cost Review - FTA’s procedure for reviewing cost estimates for major capital projects
- Oversight Procedure 40C For Risk and Contingency Review - FTA’s procedure for performing risk review of major capital projects
Best Practices and Reference Documents
The following are best practices and reference documents for developing cost estimates:
- GAO’s Cost Estimating and Assessment Guide - GAO’s best practices for developing and managing capital program costs
- Capital Cost Database - Historical database of actual costs of building transit projects
- Project and Construction Management Guidelines - Appendix A of this document provides information on cost estimation methodology
- Market Conditions Research - A report with recommendations for improving cost estimation of transit projects
- Managing Capital Costs of Major Federally Funded Public Transportation Projects - TCRP report
- Estimating Soft Costs for Major Public Transportation Fixed Guideway Projects - TCRP report
- Capital Cost Estimating Guidance - Federal Railroad Administration's (FRA) capital cost estimating guidance for project sponsors