Building up whole life costs
There is no standard way of building up whole life costs. A balance has to be struck between time and resources to achieve detailed accuracy versus using rule-of-thumb figures.
Two approaches to arriving at whole life costs can be distinguished:
- a 'top down' approach or using historic data; and
- a 'bottom up' approach or using project specific data.
Before considering these approaches in more detail it is useful to review the hierarchy of data associated with buildings and the levels of detail which influence whole life costs and performance.
Hierarchy of whole life cost data
The diagram below gives one way of considering the various levels of detail which may be represented by a whole life cost assessment.
The table gives examples of each level. More or fewer levels may be used for any given organisation. The important issue is that the whole life cost data should be able to be analysed and manipulated to provide the information on which to base decisions.
The core whole life cost data for any building is found at the very bottom of the hierarchy where component durability distinctions are important and maintenance and repair activities are carried out. This data may be accessed from historic records or modelled using whole life cost plans.
| Level of detail | Examples |
|
Whole estate or functional unit |
School, hospital Pupil, patient |
| Building | Classroom, ward |
| Block | Part of a building |
| Room or space | A specific room or space such as a meeting room, corridor, entrance area |
| Element | Walls, roof, air-conditioning system |
| Assembly or component | Window, air-handling plant, boiler |
| Component subtype | Softwood or hardwood or plastic or metal window
Condensing boiler, cast iron, steel, aluminium heat exchanger |
| Component durability | For example, different softwood windows will have differing durability expectations depending on the species of timber used, their preservative treatment, adhesives and means of connections. |
| Maintenance and repair | The maintenance and repair regimes are important contributors to whole life costs. The actual activities and therefore the whole life costs will vary with individual components specified for the building or, in the case of an existing building, the condition of the existing components. |
Historic whole life costs - 'top down' approach
The historic cost approach is based on annualised costs, typically a number of £/m2/year for a building type or an element or a functional unit (such as the cost each year for each pupil).
Data can be obtained from published cost sources. However, if this data has only been accumulated over a few years it would need careful interpretation.
Typically historic data is useful in providing a general broad brush whole life cost figure for a building or estate. It is good for estimates and it may be useful as a general comparison figure.
The data cannot usually be manipulated nor can it be readily be used for value engineering.
Historic data is of limited use as a costing tool unless the exact build-up of the costs are known.
Predictive whole life costs - 'bottom up' approach
A predictive approach offers far more by way of informing management and maintenance decisions.
The final figure is expressed in the same way as for the historic approach, that is, typically a number of £/m2/year for a building type or an element or a functional unit. The fundamental difference is that the whole life costs are based on individual costs, quantities and location. The whole life costs are built up from first principles.
Information on components and quantities may be derived from drawings and specifications or, in the case of an existing building, from a condition survey.
The benefit of the predictive approach is just that - it is predictive. Furthermore, to inform the decision making process, a 'what if' analysis can be carried out to compare alternative design and component specification options.