Life cycle cost models

Quantity and cost

Both installation and subsequent replacement quantities and costs are required. It should be borne in mind that replacement costs are more expensive than installation costs as one must take into account dismantling and removal. The most accurate costs are always going to be those based on a specific project. Other cost sources include in-house historic cost data, price books, suppliers and installers.

Service life

The service life of a component is a key requirement for life cycle costing. From this data it’s possible to calculate a time table for maintenance and refurbishments. Service life data may be derived from publications, manufacturers, BCIS Building Running Costs Online and from professional experience.

The key factors that influence service life are listed below. State assumptions about these factors in the life cycle cost report.

Guidance on the anticipated service life of mechanical and electrical components is published in CIBSE Guide M.

Material and component quality

These are key to determining the physical durability and maintenance requirements of building components in a given environment for defined performance requirements.

Design and site work

Service lives are based on the assumption that design and site work is carried out to comply with building regulations and good practice, such as British, European and International Standards, authoritative guidance and manufacturers’ recommendations.

Service life may be enhanced by design, for instance, setting window frames behind wall reveals or including deep overhangs to protect external components from solar radiation and precipitation.

Internal and external environments

Variations in environment can have a significant effect on the life expectancy of external and internal components.

Life cycle cost models should consider the performance of external components in the context of expected climatic and atmospheric variables in the UK. Typical issues which affect the performance of timber are exposure to solar radiation, moisture, and risk of insect and fungal attack. Moisture levels are likely to be the most important environmental factor.

The assumption is that components and associated design are selected to provide acceptable performance for the expected environment.

Maintenance

Maintaining a component is key to achieving expected service lives. Life cycle cost models are based on the assumption that maintenance is carried out to good practice standards and manufacturers’ recommendations.

Maintenance activities, frequency and resultant cost should be included in the life cycle cost model. Cyclical planned maintenance is readily modelled. More realistic life cycle cost models may take a probabilistic approach and model cost data for alternative maintenance strategies, such as condition based maintenance.

Guidance on the maintenance tasks required on mechanical and electrical components is published by the Building and Engineering Services Association.

Use intensity

Usage has a significant influence on the expected life and maintenance requirements of many components such as flooring, doors and low wall claddings. The use assumptions need to be stated, such as expected pedestrian traffic over a floor or through a door.

Vandalism and component abuse are typically excluded from life cycle cost analysis.

Obsolescence

The decision to replace components may not relate to durability, for example a retail outlet may replace a tiled floor with wood strip flooring to promote a particular image. Where obsolescence drives component replacement this needs to be made clear in the model assumptions. The 3 main types of obsolescence are as follows:

• functional obsolescence: occurs when a property loses value due to its architectural design, building style, size, outdated amenities, local economic conditions and changing technology;
• economic obsolescence: occurs when a property loses value because of external factors; and
• physical obsolescence: occurs due to gross mismanagement or physical neglect, leading to deferred maintenance that becomes too costly to repair.

Data sources

Building Cost Information Service (BCIS) has been collecting maintenance and operation costs for several decades and has incorporated the results of its studies into BCIS Building Running Costs Online, with running costs being defined as the total of maintenance and operation costs. This is a subscription service which allows the user to select a building type and size and, through the use of BCIS data, to prepare estimates of capital, maintenance and operation costs. These calculations can be made over a range of timescales, and can be on a current, discounted or present value basis.