LIFE CYCLE COSTING - ITS ROLE IN SCHOOL DESIGN DECISION MAKING
Life Cycle Costing (LCC) for Economic Sustainability
Today school administrators and school boards desire sustainable solutions that not only protect the environment, save water, and energy, but also save economic resources. The focus for Life Cycle Cost (LCC) analysis can be "green within the green" by seeking environmentally sustainable solutions that are cost effective over the long term. In this sense the school gains a green solution that is life cycle cost effective. To assist in this new focus, all those involved in the school design decision-making process need to become familiar with the technique of Life Cycle Costing to identify ideas for long term best value. In some cases this may mean spending a bit more today to save big time in the future.
For example using automatic lighting controls that turn off lights when the sun is bright enough or if no one is in the space will add to the construction cost but will help the school save energy every day. LCC helps the decision makers decide if it is "worth" the extra construction cost to save the energy cost every year. Who gets to keep the savings is a matter for each school to decide, but the technique itself is useful in determining which alternative represents the lowest life cycle cost.
The Federal Facilities Council (FFC) is advocating that "to support sustainable development, value engineering and life cycle cost analyses, to evaluate a range of sustainable development options, are used in the conceptual planning, design and construction phases of acquisition." The FFC further advocates that owners "focus attention at the front end during the conceptual planning and design phases where the ability to influence the ultimate cost of the project is the greatest." This translates to the application of life cycle costing methods earlier in the planning and design process.
In addition, many school facility planners insist that all "viable" alternatives be considered by the design team and that the preferred alternative has been selected. Performing this activity in "real time" allows school participation as well as proper analysis for rapid feedback of decisions reached. Combining sustainability and LCC is the right thing to do to achieve "Green Value."
What is LCC?
Life Cycle Costing (LCC) measures the economic value of decisions of a school design project. Life cycle costing can be defined as "an economic assessment of competing design alternatives, considering all significant costs over the economic life of each alternative, expressed in equivalent dollars." P. A. Stone, a British economist, has coined the terminology "cost-in-use" and suggested that the technique is concerned with "the choice of means to a given end and with the problem of obtaining the best value for money for the resources spent."' The U.S. Department of Education has defined life cycle cost analysis as the systematic consideration of cost, time, and quality.
Both government and private-sector clients have established LCC guidelines for the design and maintenance of facilities. The General Services Administration has developed elaborate procedures for predicting a facility's total cost. Large corporations such as General Motors, United Technologies and AT&T routinely require designers to prepare LCC studies as part of the design process.
Life Cycle Costs
The school design team needs to consider various costs and cost relationships, the proper understanding of which is essential to the completion of an effective LCC analysis.
All costs attributable to an alternative are considered in any LCC analysis. These include initial procurement costs at the beginning of the analysis period; disposal, demolition, and other salvage costs at the end; and costs incurred between those times. Whether any particular type of cost should be included depends primarily on two factors: (1) whether that type of cost is relevant for the particular item under study; and (2) whether the projected magnitude of that type of cost is significant in comparison to other relevant costs for the LCC analysis. For convenience, these costs have been divided into the following categories:
- Initial investment costs
- Replacement and major repair costs
- Salvage (terminal) costs
- Maintenance, repair, and custodial costs
- Energy costs
- Other types of costs, such as staffing, insurance, tax elements, and so forth
Monetary benefits, which are normally considered as negative costs in the life cycle cost analysis, include all benefits that can be readily quantified in terms of dollars, such as salvage values and other forms of income, cost reduction, and marketable by-products. The decision as to whether any particular monetary benefit should be included in an analysis is usually based on relevance and significance. Following is a pie breakdown of the significant costs for a high school.
Source: Skanska
LCC School Applications
LCC studies are best applied in the early stages of planning and design. This usually occurs at normal owner review points such as the end of schematic design and design development. LCC studies may be performed on new construction as well renovation school projects. LCC studies to determine the best alternative for schools can include an examination of:
- Site selection
- Building massing & configuration
- Exterior walls
- Window systems
- Roofing systems
- Interior partition types
- Finishes
- Plumbing systems
- Mechanical systems
- Lighting systems
- Daylighting approaches
- Casework
- Parking pavement types
- Site lighting systems
- Utility systems
An example of an LCC study regarding an HVAC unit appears in Chapter 6 as Case Study after "Long-Term Operating Costs".
Support Tools
To assist the school design team in performing LCC studies, two support tools are available. First is the LCC worksheet (figure 1). The second support tool is the life cycle cost database of information found in Dell'Isola and Kirk's book, Life Cycle Costing for Facilities.
Opportunities & Challenges
Green building practices can substantially improve the environment. In addition, green measures reduce operating costs, enhance building marketability, increase worker productivity, and improve indoor air quality. The biggest challenges include knowledge of sustainable practices, the use of life cycle costing methods, and sources of reliable life cycle cost data.
REFERENCES
Life Cycle Costing for Facilities, Alphonse J. Dell'Isola and Stephen J. Kirk, RS Means, Reed Construction Data, 2003.
Enhancing Value In Design Decisions, Stephen J. Kirk and Kent Spreckelmeyer, 1994. (Korean Edition 1997).
Leadership in Design Team Innovation Using Value-Based Decision-Making Techniques, Dr. Stephen Kirk, Harvard University, Harvard Design School, Executive Education Seminars, Cambridge, MA, January 24-25, 2002.
- Stephen Kirk
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