FTA Oversight Procedures - Federal Transit Administration - U.S. ...

This sample of 118 cost items was selected randomly from each of the corresponding cost item strata
defined above. Lump sum, unit cost and cost estimating relationship cost items were segmented by
amount into the larger and smaller values. Sampling rates selected for each cost item segment were based
on a higher sample rate for the higher cost items and a lower rate for the lower cost items. The overall
sampling rate objective was established at 15%. The specific sampling rates for each cost item category
were selected to fulfill the overall objective and emphasize the higher cost items with the higher sampling
rates. Random selection was completed through assignment of unique cost item numbers and a random
number generator selection from each of these strata. The combined sample size of 17% exceeds the cost
item objective of 15%. The specific cost items selected were provided to the cost evaluation team for the
detailed analysis.
The PMOC team reviewed the various cost documents provided by the sponsor. The following outline
describes the steps applied to review the Project Cost Estimate:
1) Characterization or Stratification of Cost Items
a) Characterize estimate data into one of three cost item categories or classifications -- Lump
Sum, Unit Cost or Cost Estimate Relationship.
b) Select sample totals based on individual sampling rates for each category.
c) Identify cost items for detailed review based on random selection of individual cost items.
2) Mechanical Check of Estimate
a) Mathematically sum all lump-sum prices, unit price and quantity calculations, and cost
estimating relationships to confirm the sponsor’s total cost estimate.
b) Perform a mathematical check of all sampled unit price or quantity calculations.
c) Mathematically check the cross-walk and cost sums from the contract packages to the FTA
Standard Cost Categories.
3) Comparison to Industry Standards
a) Review sampled unit prices and quantities for conformance to industry standards, regional
variations or other unique characteristics.
b) Check sampled unit costs of similar items used in differing conditions to ensure local
conditions and difficulty factors were considered in the individual estimated units.
c) Check sampled quantities to confirm basis of calculations from design documents.
4) Correspondence with Scope Review
a) Cross check sampled quantity estimates with the project scope contained in the design
documents to determine degree of correlation between the design deliverables and the project
cost estimate down to the 2nd level WBS.
b) Perform general “Overview” of total estimate to give it a “sanity check” and ensure that all
major components appear.
c) Review sample quantities for reasonableness and to be representative of industry standards and
the design scope of work with respect to major components.
5) Evaluate Contract Package Elements
a) Assess certain contract package elements as to requirements and associated reviewer
payments, characterizing elements as:
i) Contract requirements for specific services such as QA/QC and scheduling that would be
material elements in the development of bids;
ii) Elements of contract language that would reasonably serve as a basis for additional
compensation not part of a scheduled payment item;
iii) Restrictive schedule or mobilization requirements that would be material pricing elements
in developing a bid;
iv) Geotechnical data and pricing approach to changed conditions;
OP 33 Capital Cost Estimate Review
Revision 0, June 2008
Page D-2