LIFE CYCLE COST PLANNING

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LIFE CYCLE COST PLANNING

• Presented by Joe Martin, BCIS Executive Director
• Date 14 October 2008

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Life Cycle Cost Planning

• Standardized Method of Life Cycle Costing fpr
  Construction Procurement
• Data structure
• Ancillary information
• The cost plan and the life cycle cost plan
• Order of cost estimate
• Developing the cost plan
• Factoring, smoothing and sensitivity

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DATA STRUCTURE
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• LIFE CYCLE COSTS
• 1. Construction
• 2. Maintenance
• 3. Operation
• 4. Occupancy
• 5. End of Life

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• 1. Construction
• 1.1 Construction works costs
• In SFCA elements
• 1.2 Other construction related costs
• Design fees, Planning costs, planning gain
  contributions etc
• 1.3 Client definable costs

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• 2. Maintenance costs
• 2.1 Major replacement
• 2.2 Subsequent refurb and adaptation
• 2.3 Redecorations
• 2.4 Minor replacement, repairs and maintenance
• 2.5 Unscheduled replacement, repairs and
  maintenance
• 2.6 Grounds maintenance
• 2.7 Client definable costs

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• 3. Operation
• 3.1 Cleaning
• 3.2 Utilities
• 3.3 Administrative costs
• 3.4 Overheads costs
• 3.5 Taxes
• 3.6 Client definable costs

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• 4. Occupancy costs
• 4.1 Internal moves
• 4.2 Reception and customer hosting
• 4.3 Security
• 4.4 Helpdesk
• 4..
• 4.16 Car parking charges
• 4.17 Client definable costs

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• 5. End of life costs
• 5.1 Disposal inspection
• 5.2 Demolition
• 5.3 Reinstatement to meet contractual
  requirements
• 5.4 Client definable costs

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ANCILLARY INFORMATION
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• Purpose of LCC
• Scope
• Base dates
• Time periods (period of analysis)
• Occupation
• Presentation of costs
• Discount rates
• Source of data

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• Metrics
• Total LCC Net Present Value
• Base date
• Period of analysis
• Discount rate
• Major exclusions or inclusions

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THE COST PLANand theLIFE CYCLE COST PLAN
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• The Capital elemental cost plan plus
• Future expenditure on
• Replacements
• Periodic maintenance
• Periodic redecoration
• Annual whole building expenditure on
• Minor maintenance
• Cleaning
• Utilities
• Admin
• Property insurance
• Rates etc

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• Plus
• Any occupancy costs
• End of life costs as appropriate
• Demolition
• Disposal inspections
• Delapidations or reinstatement

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ORDER OF COST ESTIMATE
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DEVELOPING THE COST PLANS
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FACTORINGSMOOTHINGSENSITIVITY
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FACTORING, SMOOTHING, SENSITIVITY Taking the
wrinkles out of your life cycle cost plan
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• FACTORING
• Reference service life assumptions
• Adjust for project conditions
• Quality
• Design
• Workmanship
• Indoor/outdoor environment
• In-use conditions
• Maintenance levels

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• SMOOTHING
• Where cycles stack up is annual expenditure
  acceptable?
• Adjust design
• Adjust maintenance regime
• Adjust redecorations cycle

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• SENSITIVITY
• Test the impact of LCC assumptions
• Service life expectancy and replacement cycles
• Costing of the replacement cycles
• Discount rate

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LIFE CYCLE COST PLANNING

• Presented by Joe Martin, BCIS Executive Director
• Date 14 October 2008