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9.3.2.5 Currency. Prepare cost estimates using the local country currency (i.e., yen, Y).
Convert the "bottom line" project cost (direct project cost Plus contractor overhead & profit) to
dollars by using the yen/dollar exchange rate specified in the "Scope of Work" or as revised by
the latest OICC FE Instruction. Refer to Appendix Q.
9.3.3. Project Cost Limitations. As indicated in the "Scope" and Section 2.1.1 of this Guide,
the A-E shall provide a project design that is within the available funding. When it is
anticipated that the ECC will exceed the available funding, the A-E shall notify the PDE and
identify project alternatives that will reduce project cost. The PDE will inform the A-E
regarding the project items which will be deleted or the project items for which bid items are
to be prepared.
9.3.3.1 Bid Items. The A-E shall design the project so that the ECC is approximately 10% less
than the available funding. If this is not possible, the A-E will be requested to prepare bid items
such that Bid Item 1 (the base bid) is approximately 10% less than the available funding. The
A-E shall not use more than three (3) bid items (base bid plus 2 additives) without approval from
the PDE. Each additive bid item shall be greater than two (2) but less than eight (8) per cent
of the base bid; and the combined total cost of all additive bid items shall not exceed twenty-five
per cent of the base bid.
9.3.4  Pricing. The A-E shall use basic labor and material costs identified in local Japanese
cost estimating guides. As a check, the A-E shall also verify the handbook material costs by
contacting local suppliers. For U.S. materials, the A-E shall secure price quotes from Japanese
trading companies.
All unit material prices shall include all applicable taxes and shall include a provision for
inflation during the specified construction period.
For all major material and equipment items, the A-E shall use contractors* costs for the proposed
construction area. Use of say, Honolulu or San Francisco, prices multiplied by a Japan area
factor will not be accepted.
The A-E shall include, with the Cost Estimate, all supporting information (e.g., manufacturer
or supplier price quotes). As a minimum, price quotes shall contain the company name, the
person contacted, the date of the quote, the length of period for which the quote is effective and
the description of the material/equipment for which the quote was made. Updates and revisions
to the supporting information shall be provided, as needed, to keep the project ECC current.
9.3.4.1 Escalation relates to the cost increases which result from material price and wage
increases as time progresses (i.e., cost increases resulting from inflation). For the Final
Submittal, the A-E shall provide a cost estimate that estimates the project cost at the time of bid
opening. The A-E shall use escalation rates which reflect the local inflation rates.
9-3








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