Local Road Management Manual 133 2. Project Development Cost as Percentage of Programmed Cost Prior to determining the over-all construction cost, there are necessary costs for project development resulting to a fully packaged road project. These project development costs should not be excessive but rather commensurate to the total expected cost of the road project. If these project development activities will be outsourced to qualiifed experts, then the appropriate rules and regulations on the procurement of consulting services for government projects (such as local road projects) shall govern, the total amount of services shall not exceed the allowable percentage which was issued by NEDA in 1998. The percentage fee for outsourced project development activities shall consider the type, complexity, location, and magnitude of construction cost of the project and shall not exceed the following percentages of estimated construction cost: a. This method may be used to determine the compensation of Consultant for services where the principal responsibility is the detailed design or construction supervision of facilities to be constructed; b. “Construction Cost” is deifned as the estimated total cost of constructing the facility to be covered by the proposed detailed design or construction supervision services, excluding the fees and other costs of such services, the cost of land and right-of- way, and legal and administrative expenses of the agency. The estimated construction cost must be approved by the Head of department/oiffce/agency/corporation/local government unit. c. Over the years, engineering experience has established some appropriate correlations between engineering costs and construction costs for certain types of engineering design, where design procedures and materials of construction are more or less standardized. These correlations have resulted in various curves and schedules which have been widely used;