• Professional and Adviser fees, including internal design development costs and other such costs which would normally be capitalised
• Procurement administration costs
• Training and commissioning costs
• Centrally purchased supplies
• Opportunity costs (see below)
Cost estimates should reflect the full resource costs of the project. In particular, they should include the opportunity cost of any assets already owned by the client and which are to be used in the project. If the asset could be sold or used for another purpose, then the use of that asset in the project has an opportunity cost.
All assumptions and sources of information should be listed, in particular in relation to the costing and timing of expenditure. If there is any doubt regarding the availability of public capital, in addition to considering other public sector sources of capital, sensitivity analysis should be undertaken to quantify the effect of delayed construction work or more likely, a longer construction programme due to lack of capital availability.
Assumptions about the start, completion and if applicable, the phasing of construction works should reflect what could be realistic to expect in the public sector and will not necessarily correspond to the bidders' proposals.
Assumptions around capital cost inflation should be explicitly stated. It is usual that construction costs will fluctuate and, where they are inflationary, they have in the past sometimes risen faster than official government measures such as PRI and CPI. Advice should be sought from technical advisers to ascertain the real rate of growth in these costs. Also assumptions regarding the capital cost base dates should be made clear and the costs involved in the analysis should be adjusted as necessary to ensure they are comparable on a like for like basis.