Project Outlays.

EP 1165-2-1

30 Jul 99

economic cost, NED cost, alternative cost, opportunity cost, resource

cost and exchange value. Real costs are values of resources.

Resources are valued at their opportunity costs, that is their value

in the best alternative use. Opportunity cost is the conceptual basis

for cost in economic analysis. Real costs are used exclusively in all

aspects of benefit-cost analysis, including benefit-cost ratios. Mon-

etary cost and accounting cost mean the same as financial cost.

Financial costs are any money outlays or accounting transactions or

entries whether or not they are payments for resources. Therefore, it

follows that the presence of financial payments do not necessarily

imply the presence of real costs.

(2) Project Outlays. The real costs of project outlays include

the costs incurred by the responsible Federal entity and, where

appropriate, contributed by other Federal and non-Federal entities to

construct, operate, maintain, repair, replace, and rehabilitate a

project in accordance with sound engineering and environmental

principles. These costs include:

(a) Postauthorization Investigation, Survey, Planning and

Design Costs. These costs are estimated based on actual current costs

incurred for carrying out these activities for similar projects and

measures.

(b) Construction Costs. These costs include the direct cost of

project measure installation goods and services. They are estimated

based on current contract bid items in the project area or on the

current market value of purchased materials and services, etc.

(c) Construction Contingency Costs. These are costs added to

estimates to reflect the effects of unforeseen conditions on estimates

of construction costs. They are computed as a percentage of the

estimated construction cost depending on the intensity of the

investigations performed, the variability of site conditions, and the

type of measure being installed.

(d) Administrative Services Costs. These are costs associated

with the installation of project measures, including the cost of

contract administration, permits, inspection, etc. Estimates of these

costs are based on current costs of carrying out these activities on

similar projects or as a percentage of the construction cost when such

a rate is documented.

(e) Fish and Wildlife Habitat Mitigation Costs. These are the

costs involved in implementing measures recommended to mitigate losses

of fish and wildlife habitat caused by project construction,

operation, maintenance, and replacement. The cost of implementation

of these measures is assumed to be expended concurrently and

proportionately with their related project measures.

(f) Relocation Costs. These are project costs associated with

the requirements of the Uniform Relocation Assistance and Real

Property Acquisition Policies Act of 1970 (P.L. 91-646); and the

relocation of highways, railroads, utilities, and other existing

facilities. Real property acquisition relocation payments are

applicable to a displaced person, business or farm operation. The NED

cost of replacement housing is based on replacement in kind. Costs

over and above replacement in kind are not considered economic costs

for purposes of project evaluation. The relocation costs of railroads

and utilities shall be based on the costs of replacement in kind. In

the case of highways, the relocation cost shall be based on

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