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Applying
Life Cycle Costing

Applying life cycle costing could be done more effectively in most conventional and sustainable building design projects for the following reasons:

  • Designers are not familiar with LCC calculations and techniques.

  • Design information for most disciplines at the Concept/Schematic phase is inadequate or not well documented, and the reporting formats inconsistent. This creates an inherent communications problem between designers, clients, and end users, adding to the problems of design management.

  • Cost estimates at the Concept/Schematic phase are not as detailed as could be because of a lack of design information, which results in higher contingencies and allowances than necessary; estimate reporting formats are also inconsistent and most do not lend themselves to design cost analysis.

  • Energy analysis at the concept/schematic phase is the exception rather than the rule, because of a lack of input data from most disciplines, particularly for M&E systems Energy data from such analyses is essential for properly evaluating life cycle costs of building concept massing alternatives and major building systems alternatives at the schematic phase of conventional and green building projects.

To overcome these problems, the following steps should be taken in applying life cycle costing:

  • Designers should become familiar with LCC techniques that are based on nationally recognized ASTM Building Economics standards. (see LCC Training)

  • Preliminary Project Descriptions (PPD), in effect descriptions of building systems, assemblies, or elements, should be prepared by each discipline without exception at the concept/schematic phase of a project, thus defining a baseline concept against which alternatives can be compared. This approach is in accordance with CSI Practice FF/180that recommends elemental Preliminary Project Descriptions in lieu of the MasterFormat© Divisions 1-16 product classification. (LINK) The classification of elements for the building and sitework should conform to the ASTM UNIFORMAT II standard.(LINK)Elemental estimates based on design information from the Preliminary Project Description (PPD) should be prepared and structured according to the same UNIFORMAT II classification. Such elemental estimates (LINK) lend themselves to design cost analysis, and allow effective monitoring of costs from phase to phase through to design completion.

  • Energy analysis for the baseline design using DOE-2 or similar software capable of hourly energy simulation should be carried out, based on the descriptions of elements and criteria provided in the Preliminary Project Description (PPD), and the schematic drawings.

Completion of the steps outlined will now make it possible to calculate and analyse life cycle costs of alternative massing configurations and major building systems because baseline design, cost, and energy information is available.

The procedure outlined for applying life cycle costing applies to conventional building design. However, it is particularly applicable to sustainable building design, that can only be successfully implemented if design, cost, and energy data is available earlyduring the Concept/Schematic phase of a Green Building Project.

Furthermore, this approach now makes it possible, because of the comprehensive data assembled for all disciplines, to initiate highly productive Value Engineering workshops at the Concept/Schematic phase, when all options can still be considered. This is in contrast to VE workshops held during the Design Development phase, when many design decisions already taken are considered irreversible, and the resistance to change much greater, as can be expected, thus likely penalizing the life cycle cost of a project.

For additional information on the integrated design management approach outlined, refer to the following articles and publications to help in applying life cycle costing:

  • "UNIFORMAT II Support Document Developed" - The Architectural Engineering Institute (AEI/ASCE) Newsletter Volume 3 Issue 3, Fall 2000. (LINK)
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    This two page article reports on an interview with Robert P. Charette, P.E., CVS, on the application of the UNIFORMAT II classification for integrated design management of specifications and estimates.

  • "UNIFORMAT II for Increased VE Team Performance" - The Society of American Value Engineers (SAVE) Interactions Newsletter June 2001. (LINK)
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    This newsletter explains how the UNIFORMAT II classification, used for function oriented specifications and estimates, facilitates the preparation of function cost models, structures the creativity/brainstorming phase of the VE job plan, and significantly increases the productivity of workshops held early at the Concept/Schematic phase of project in lieu of the Design Development phase.

  • "ASTM UNIFORMAT II Standard E 1557 and CSI Practice FF/180 - New Design Management Tools for Project Managers" - The Project Manager Journal of The Association for Project Managers (APM). (LINK).
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    This article explains how Project Managers can significantly increase their performance and that of their design teams by using the UNIFORMAT II classification as a tool to ensure consistent standardized reporting for design specifications and estimates within a design team, and from project to project, whatever the geographical location. This is a feature, currently lacking in the design process of buildings, that would allow a Project Manager to more rapidly analyse projects to identify and address potential design, cost, and scheduling issues.

  • "Using UNIFORMAT II for Facilities Planning and Design" - Appendix A - R.S. Means "Square Foot and Assemblies Estimating Methods". (LINK)
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    This appendix presents a broad overview on the application of UNIFORMAT II for facilities planning and design. The text is the only one available that explains how UNIFORMAT II estimates are prepared, element by element.

  • "Estimating and Design Cost Analysis" - Section 14, McGraw-Hill Time Saver Standards for Architectural Design Data - Seventh Edition. (LINK)
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    This article explains how the various analytic parameters developed in UNIFORMAT II estimates facilitate design cost analysis: it includes building and sitework elemental estimate summary examples that incorporate these parameters.


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Life Cycle Costing
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