Operating costs refer to costs incurred in operating and maintaining the asset and performing the services that are included within the project scope. Operations and maintenance costs include the cost of inputs, service provider wages and salaries, and other related expenses that are likely to be incurred7. These costs will vary from project to project.
Different terminology is used to describe operating costs across the B.C. Government ministries. In the education and health care sectors, operating costs are known as facility management costs, and are not directly associated with students or patients. Examples of facility management costs include: housekeeping, food services, security, laundry and linen, waste management, and physical plant utilities, among others.
In the health care sector, a second type of operating cost pertaining to services provided directly to patients is known as clinical services. Examples of clinical services include: laboratory work and diagnostics, allied services, medical affairs, general administration, and planning, among others. Responsibility for these services is not transferred to the private sector, and consequently, the associated costs have typically been excluded from both models as they remain costs incurred by the government regardless of the procurement option selected.
In the transportation sector, operating costs refer to the costs of services required to keep the road, bridge or transit line open and available for use. Examples of these costs include: incident management, debris removal, snow or mud removal and road condition reporting, among others. Depending on whether or not these are part of project scope, these costs may or may not be included in the PSC and Shadow Bid. If they are not in scope, then they are considered equal and not included.
Methods for estimating operating costs also differ slightly from sector to sector. In the case of facility replacement in the accommodations sectors (health care, education, justice), the client estimates operating costs by refining the current operating budget for facilities to be replaced in order to incorporate changes in programming and/or demand levels for services. This may also include expected increases in facilities management costs due to an increased size of facilities and/or any expected efficiencies resulting from design improvements. In the transportation sector, operating cost estimates are generally based on relevant precedent projects, and the costing model is prepared on the basis of public sector (i.e., Ministry of Transportation and Infrastructure) operation.
__________________________________________________________________________________
7. Related costs may include: employee entitlements, insurance, training, development, travel, direct management costs, costs of providing ancillary services such as cleaning and catering, overhead costs, energy, equipment, administrative, electricity, etcetera.