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Conclusion: proposed classification of on-costs

This section presents a proposed classification of on-costs, which broadly consists of the
following:

- Land acquisition ? the cost of land or rights in land and associated costs.
- Client?s organisation costs ? clients overheads allocated to the project.
- Development costs ? costs that relate to the project rather than directly to the
construction.
- Project, design and procurement related costs ? non-construction costs related
to the design, management and delivery of the constructed asset.
- Post-completion costs ? costs related to the commissioning of the project.
- Client?s operation costs ? costs relating to the operation of the asset, e.g. plant,
vehicles and equipment and their commissioning.

Individual ?tasks? have been identified within each section, which may or may not occur on a
project. The full list for classification is given in Table 2.

Additional information and exclusions:

- It should be clearly stated whether, where the client?s staff carry out some or all of a
task, the costs are included or excluded.
- Where required, the phase in which they occur should be identified.
- If the on-costs are being calculated during the development of the project the value
of client?s risks should be allocated to on-costs and stated separately.
- Taxes payable in connection with any of the tasks should be included, while VAT
should be excluded and stated separately.
- Externalities, i.e. costs to other stakeholders, and intangibles, i.e. notional costs,
should be excluded.
- Abortive costs, i.e. costs involved in preparing of previous solutions for the project,
should also be excluded.

isurv Infrastructure ? On-costs

A full list for the proposed classification of on-costs:

Land acquisition

- Land purchase
- Finance costs associated with land purchase
- Costs associated with land purchase ? legal, tax, valuation, etc., advice
- Rights of way, wayleaves and easements
- Costs associated with acquiring rights of way, wayleaves and easements
- Compensation payments to land owners
- Cost associated with compensation payments to land owners.

Client's organisation costs

- Client central overheads and general management

- Client departmental overheads and management
- Client programme management

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- Clients project costs.

Development costs

- Finance costs associated with project delivery

- Financial and tax advice
- Legal costs
- Compensation payments for interruption of use, etc.
- Costs in association with compensation, interruption of use, etc. payments
- Payments to neighbouring land owners to facilitate the project, e.g. access
payments for surveys
- Governance, audits, etc.
- Business case preparation
- Exhibitions, public consultation and surveys, and stakeholder management
- Political advice
- Planning applications/public inquiry
- Community Infrastructure Levy and other planning contributions
- Licences, temporary or permanent traffic regulation orders, publication fees, etc.
- Insurance costs (e.g. business disruption, material damage, etc.)
- Insurance advice
- Decanting cost
- PR/marketing including considerate constructors scheme and the like
- Communications
- Acquisition strategy
- Relationship and stakeholder management
- (Grants).

Project, design and procurement related costs

- Civil/structural engineering design

- Architectural design
- Mechanical/electrical engineering design
- Specialist engineering design
- Standards, specification and requirements
- Contractor?s design fees
- Environmental assessment
- Building Information Model management and implementation
- Physical models
- Sustainability advice
- Capacity modelling
- Asbestos surveys
- Acoustic design
- Fire design
- Landscape design
- Geotechnical design
- Building control
- Transport systems consultants
- Fuel consultant
- Environmental survey and advice, environmental impact assessments and licence
fees
- Social impact assessments
- Archaeology survey and advice
- Research for innovative products and systems
- Dilapidations surveys
- Specialist systems advice
- Other specialist advice ? please specify
- Building regulation approval
- Surveys/investigations
- Approvals, consultation and statutory obligations
- Cost, commercial and risk advice
- Estimating, risk, programme and review assessments

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- Project/programme management
- Project management
- Value management
- Change management
- Procurement and supply change management
- Managed service provider (MSP) costs
- Health and safety advice
- Planning supervisor/CDM advice and management
- Early contractor/supplier construction advice
- Early contractor/supplier cost advice
- Early specialist supplier input
- IT staff costs
- IT systems support
- Commissioning logistics
- Photographer
- Ordnance Surveys
- Maintenance charges in connection with existing highways, bridges, drains,
services, etc.

Post-completion costs

- Transition (operational readiness)

- Commissioning
- Familiarise induction and training
- Communications and staff engagement
- People plan
- Operational strategies
- Transition (start-up and launch)
- Operation and maintenance plans
- Health and safety plans and documentation
- Preparation of asset register for maintenance
- Adoption charges in connection with highways, bridges, drains, services, etc.

Clients operation costs

- 3rd party fit-out

- Client's loose furniture, fixtures and equipment
- Client's operational equipment ? plant, vehicles and equipment and their
commissioning.

Bibliography

Bibliography

ICE?s Civil Engineering Civil Engineering Standard Method of Measurement, (CESMM), 4th
edition, 2012.
International Construction Measurement Standards Coalition?s International Construction
Measurement Standards (ICMS), 1st edition, July 2017. https://icms-coalition.org/the-standard/

Highways England?s Bills of Quantities for Highways Work, Amended 2009.

Network Rail?s Rail Method of Measurement RMM 1 (Cost Planning), 2014.
Network Rail?s Rail Method of Measurement RMM 2 (Detailed Measurement), 2014.
RICS Principles of Measurement (International) for Works of Construction (POMI), 1st edition
1979, reprinted 2004.
RICS New Rules of Measurement NRM1 (Order of cost planning and cost planning for capital
building works), 2nd edition, 2012.
RICS New Rules of Measurement NRM2 (Detailed measurement for buildings works), 1st

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edition, 2012.
New Engineering Contract (NEC), 3rd edition, 2013.
ACE and CECA Infrastructure Conditions of Contract (ICC), 2011.
FIDIC Conditions of Contract for Construction.

Acronyms

ACE ? Association of Consulting Engineers

BCIS ? RICS Building Cost Information Service
CECA ? Civil Engineering Contractors association
FIDIC ? Federation International des Ingeineurs-Conseils (International Federation of
Consulting Engineers)
ICE ? Institution of Civil Engineers
ICMS ? International Construction Measurement Standards
IIS ? RICS Infrastructure Information Service
JCT ? Joint Contracts Tribunal
NEC ? New Engineering Contract
RICS ? Royal Institution of Chartered Surveyors.

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