As noted by Buxbaum and Ortiz (2007), future expansion and/or extensions, or other major capital improvements throughout the lease period, must be identified and the responsibilities for such investments should be defined in the concession agreement and included in the valuation process. The use of life-cycle cost analysis that includes the costs of initial construction, operations, maintenance, and other costs anticipated during the life of a project has been encouraged by organizations such as the ASCE. The use of life-cycle cost analysis may lead to higher project costs in the short term, but may lead to long-term savings in O&M (Lehman 2007). In addition, for PPP projects that either include transfer O&M over a period of time or have warranty requirements, the private sector is provided incentives to provide a higher quality of design and construction (Grout 2005) to minimize O&M costs.