2.10 Figure 8 sets out the components of costs for a typical change. Under the PFI, the cost is not confined to parts, labour, overheads and profit ("base cost") but is likely to include the ongoing cost of maintaining an item ("annual maintenance") and the cost of replacing it ("lifecycle") over the lifetime of the contract.
2.11 An element to cover overheads and profit ("mark-ups") for the FM service provider is included in the base cost and the size of mark-ups is often specified at the outset in the project agreement. A typical fee is 12.5 per cent of the cost of the change, although this can vary between projects, with a range from five per cent to 28.8 per cent.7 Mark-ups charged by FM contractors for PFI projects are in line with rates of between 10 per cent and 20 per cent recommended by the Royal Institute of Chartered Surveyors.8 An SPV is responsible for overall management of the project on the private sector side and often levies an additional management charge or fee as a percentage of base costs.