What Is Life Cycle Costing For Construction Project Management?

Attention: open in a new window. PDFPrintE-mail

What is life cycle costing for construction project management? In general, life cycle costing (LCC) is an economic analysis used in the selection of alternatives that impact both present and future costs.

This LCC section of the UNIFORMAT II website applies to the construction industry. It draws on the work of Robert P. Charette, PE and on the Facilities Standards prescribed by the U.S. General Services Administration (GSA).

For more than 20 years, Charette has been a member of the ASTM E06.81 Building Economics Sub-Committee that developed LCC standards. He has also served as co-chairman of the Task Group responsible for the ASTM E1557 Standard -- UNIFORMAT II.

 

Mr. Charette is qualified as a Certified Value Specialist (CVS) by the Society of American Value Engineers (SAVE) and has applied Life Cycle Costing for VE workshops in Canada, the U.S., and Europe.

This LCC section of the site provides a range of useful information for anyone planning to apply the LCC methodology to optimize investments in buildings and building systems.

Life Cycle Cost Analysis

The life cycle cost analysis guideline promulgated by the GSA compares initial investment options and identifies the least-cost alternatives for a 20-year period.

As applied to building design energy conservation measures, the process is mandated by law and is defined in the Code of Federal Regulations (CFR), Title 10, Part 436, Subpart A: Program Rules of the Federal Energy Management Program.

The GSA requires that designers contact local utility companies to determine available demand-side management programs and no-cost assistance provided by these companies to designers and owners.

What Is Life Cycle Costing, Really?

The GSA guidelines address basic LCC applications, which an architect-engineer may further define during the development of design programming scope requirements.

The GSA encourages designers to use LCC in the selection of all building systems that impact energy use: thermal envelope, passive solar features, fenestration, HVAC, domestic hot water, building automation and lighting.

Whether it's for a federal building or any building, especially in the public sector, we can and should also apply LCC to building features with costs related to occupant productivity, system maintenance, environmental impact and any other issue that impacts costs over time.

A true life cycle cost analysis implies an integrated building systems design to achieve overall efficiency of the building operation from top to bottom, inside and out.

Life Cycle Cost Model

There are reliable established guidelines and computer-based tools that effectively support Present Value LCC analyses.

Click here to download NIST Handbook 135 -- Life Cycle Costing Manual for the Federal Energy Management Program (PDF 9.7 MB).For example, the National Institute of Standards and Technology (NIST) offers NIST Handbook 135 -- Life Cycle Costing Manual for the Federal Energy Management Program (PDF 9.7 MB).

NIST annually issues real growth Energy Price Indices and Discount Factors for Life Cycle Cost Analysis as an Annual Supplement to NIST Handbook 135.

As a companion product, NIST also offers life cycle cost software with its Building Life Cycle Cost (BLCC) computer program to perform LCC analyses. The latest version of the BLCC program not only structures the analysis, but also includes current energy price indices and discount factor references.

These no-cost NIST materials define all required LCC methodologies used in GSA design applications. We recommend that the building design team obtain the BLCC software and updates from NIST.

When used in conjunction with the ASTM UNIFORMAT II standard, the NIST materials we recommend will result in best-value decisions throughout the entire design process... the perfect complement and answer to the question "What is life cycle costing for construction management?"