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                                                DOE G 430.1-1
                           CHAPTER 8
                                
                         STARTUP COSTS
                                


1. INTRODUCTION

   Many projects will have startup costs associated with the project.  Startup is usually a gray
   area between the time project construction ends and a facility is commissioned and begins its
   operation.  This chapter discusses startup costs for construction and environmental projects,
   and estimating guidance for startup costs.

2. DEFINITION OF STARTUP

   Obviously, different projects will have unique startup costs.  This section defines startup
   costs for conventional and environmental projects.

   A.  Conventional Projects

       Construction projects are usually considered conventional projects.  During startup, a
       facility is tested to ensure that it meets the project's technical performance
       specifications; however, actual operations at the facility may not have commenced.  In
       fact, construction activities, such as punch lists and corrections, may still be occurring
       during startup, so it is difficult to separate construction modifications from initial
       facility operations.  A distinction is made between startup and operations because
       startup costs are usually considered capital costs, while operating costs are charged to
       the facility's operating budget.   

   B.  Environmental Projects

       Startup activities at environmental restoration facilities may commence prior to the
       completion of the construction phase of the environmental project.  For example,
       contaminated soil may be excavated and stockpiled while startup of an on-site
       incinerator is occurring.  Startup costs will be a function of the types of activities at the
       site and the remediation/restoration technology used at the site.
3. STARTUP COMPONENTS

   Startup activities may include the activities discussed in the following sections.

   A.  Startup Transition Plan

       The development of a startup transition plan for the conventional facility may be
       essential for smooth startup implementation.  Typically, these plans will include test
       plan procedures, scheduling, security planning, and the associated documentation.  A
       plan provides an excellent opportunity to think ahead to situations that may be
       encountered at the facility during startup.
 
   B.  Startup Organization

       Development of a startup organization, including management, administrative,
       operations, maintenance, and technical support personnel, will be required prior to the
       actual startup.  Employees may have to be relocated to staff the facility while it is being
       tested, so employee moving costs or employee living costs may also be included in the
       cost estimate for facility startup.

   C.  Operating and Maintenance Procedures

       Site-specific operating and maintenance procedures will have to be developed for a new
       facility with special attention paid to equipment startup or initiation procedures.  In
       some cases, as with a nuclear facility, startup operations and their sequence will be
       strictly regulated.

   D.  Spare Parts Inventory and Training

       The startup cost estimate must include provisions for materials to be used during
       startup and spare parts for any maintenance that occurs during startup.  Training for
       operations and maintenance personnel will also be required.

   E.  Testing

       Some facilities will require a safety/readiness review before they can be declared
       operational.  Some scheduling may also be involved.  For example, a facility may have
       to demonstrate successful operation at a certain capacity for a specified period of time
       before it is commissioned.  The startup cost estimate must account for the testing
       schedule.
4. ESTIMATING GUIDANCE FOR STARTUP COSTS

   Although startup activities in the field may not begin until construction is almost complete,
   the planning for startup should occur early in the project.  Planning for startup should be an
   integrated effort with construction personnel and operators to avoid holes or duplication of
   effort in the startup process.  The input from the construction personnel and plant operators
   should be used when developing the startup cost estimate.  

   Construction startup costs can range from 0.5 to 10 percent of the installed cost for the
   conventional construction facility.

   The startup cost estimate should be prepared under the guidance of the Program Manager
   and not an architect/engineer.  The work breakdown structure and schedule for startup
   activities should be developed early.  The startup costs are considered other total project
   cost.

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