This guidance note summarises what is meant by a lifecycle costing and whole life costing service for both new construction works and for the refurbishment of existing assets. Lead author kathryn bourke mrics, whole life ltd working group chair. Life cycle costing as an important contribution to. Utilising life cycle costing and life cycle assessment. There are a number of factors and complications while designing excel templates. Costs of ownership through construction, purchase or renting of alternative options are evaluated over their whole life. Wholelife cost is the total expense of owning an asset over its entire life, from purchase to disposal, as determined by financial analysis. This item is available under a creative commons license for noncommercial use only.
Whole life life cycle costing wlc ltds competitive advantage is provided through our iso 15686 compliant software wlc evaluator which facilitates the calculation and application of whole life costs for any built asset. Proceedings of the rics construction and building research conference cobra. This guidance note summarises what is meant by a lifecycle costing and whole life costing service for new construction and for the. Product life cycle costing traces costs and revenues of each product over several calendar periods throughout their entire life cycle. Read our guide on life cycle costing in construction and learn how to achieve building. Surveyors rics research paper which also considers lcc. Life cycle costing is a data intensive procedure by reason of the complexity of the building projects and the many components of a building. In the absence of actual data, estimates can be based on past experiences. The wlc manual for projects provides the following. The fundamental basics of whole life costing wlc are introduced. The final result of life cycle costing is, therefore, determined by the availability and reliability of the input data 12. It covers some of the more advanced techniques used in life cycle costing such as modelling complex life cycles and sensitivity analysis, and some of the more. An asset can be any item that has a value to an organisation over time, such as buildings, physical plant and equipment and even computer software. Many innovative products carry a cost premium early in their life cycle, however they can offer long term cost savings especially in areas such as energy efficiency user experience.
Building information modelling bim, estimating software, life cycle costs lcc, whole. This 12 month online subscription tool helps to compare costs and activities of components to support the ongoing management of your property portfolio. While information on the exact time, on the origin of lcc and the time it was first applied to the construction projects is not available, but it can be safely concluded that it preceded the vm techniques. Its growing recognition is multifaceted but implications from the government strategy construction report, client requirements for total cost throughout a buildings life and the ever increasing influence of bim are significant factors. Phases in life cycle of a construction project planning. The guidance follows the guiding principles outlined in the bcisbsi publication pd156865 standardized method of life cycle costing for construction. A methodology for the systematic consideration of all wholelife costs and benefits over a period of analysis, as defined in the agreed scope another definition of older provenance but arguably less obtuse terminology comes from rics guidance note on lifecycle costing, which notes that the lifecycle cost. Document downloads whole life and life cycle costing isurv. Life cycle costing is nothing new, and its certainly not rocket science. Life cycle costing is intensifying within the construction industry. Life cycle costing, or wholelife costing, is the process of estimating how much money you will spend on an asset over the course of its useful life. It encourages the use of best value building designs and reduces the costs and disruption of unplanned repairs and maintenance. Wholelife costs consider all costs associated with the life of a building, from inception to construction, occupation and operation and disposal. Boussabaine liverpool school of architecture and building engineering the university of liverpool and richard j.
Home continuing education wbdg courses the principles and process for conducting a lifecycle cost analysis. This research will evolve a methodology for a judgement to be made on the basis of the full knowledge of the characteristics of the system proposed and its associated whole life costs. Whole life costing and performance wlc whole life costing wlc is a powerful tool for calculating the lowest cost options for the entire commercial life of a building. Whole life cycle costing in construction is the process of evaluating and estimating the total costs involved for building a project from the design stage to disposable stage. Wholelife costs for buildings wlc designing buildings wiki share your construction industry knowledge. Despite the significant amount of research in lcc in the last fifteen to twenty years, it has not been extensively implemented into qs practice. The whole life cost wlc of an asset is defined as the present value of the total cost of that asset over its operating life including initial capital cost, maintenance and replacement cost, energy cost and the cost or benefit of the eventual disposal of the asset at the end of its life.
Recently, vinci has developed a software tool for our fm clients that link their asset inventory directly into the bcis 2014 rates allowing an accurate forecast of life cycle costs over any number of years. An economic appraisal is generally a broader based assessment, considering benefits and indirect or intangible costs as well as direct costs. What is life cycle costing life cycle cost explain with. Whole life costing takes into account the total cost of a product or service over its lifetime, from concept through to disposal including purchase, hire or lease, maintenance, operation, utilities, training and disposal. This guidance note summarises what is meant by a life cycle costing and whole life costing service for both new construction works and for the refurbishment of existing assets. Life cycle costing is also being referred to as whole life cost or costinuse. Kirkham school of industrial and manufacturing science cranfield university. Life cycle costing is the process of compiling all costs that the owner or producer of an asset will incur over its lifespan. It used to be the case that once a project was built that was all that mattered. Wholelife costing is a key component in the economic appraisal associated with evaluating asset acquisition proposals. This seminar examines the benefits of whole life approaches to cost and practical advice on delivering accurate cost assessments. Embedding life cycle costing in 5d bim university of salford. A selection of the most common wage agreements and dayworks rates will be regularly. Assessing costs arising from an asset over its projected life cycle.
Whole life cycle costing application barriers construction. Life cycle costing lcc is a technique to estimate the total cost of ownership. Building and constructed assets service life planning, lifecycle costing ns 3454. Whole lifecycle costing risk and risk responses halim a. Construction project life cycle phases in life cycle of a construction project every individual involved in the process of planning, designing, financing, constructing and operating physical facilities related to the project under consideration, gain different viewpoints on project management for construction. Andrew smith, frics laing orourke stuart earl, frics gleeds cost management roland finch, frics nbs christopher green, frics capita property and infrastructure. The costs are included in different stages of the product life cycle. Life cycle costing lcc is an area in quantity surveying qs practice that is concerned with the calculation of both construction capital expenditure capex and operational expenditure opex. The aim of the research is to investigate how bim estimating software can be. This will have massive implications on the uk construction industry and will. With more and more emphasis on sustainability and cost reduction, whole life costing is critical at every stage of a construction project. Facilities managers are often under pressure to reduce costs or prove value for money. The first international standard for property life cycle costing has been adopted in the uk.
As part of an option appraisal exercise to decide on the most economically advantageous solution over the life of a building. It is also known as a lifecycle cost, which includes. Focus is on life of building life cycle costing accounting in cost life cycle analysis accounting in carbon. In the modern world clients need to understand how sustainable their investment is likely to be from a cost, as well as from an environmental, perspective. Lifecycle costs is vital to the financial management of construction. In fact, operational and maintenance costs can be as much as 80% of the total life costs of a typical assets service life. Life cycle cost for building and civil engineering work principles and classification task group 4. In this article we will look at some of the cost elements needed for a whole life cost analysis.
Bsibcis 2008 and nrm 3 rics, 2014 appear to support their assertion. Whole life costing techniques look at the big picture of expenditure and longevity of the building. The principles and process for conducting a lifecycle. Whole life costing techniques can be used to evaluate options at the elemental, component and total building levels. They can be used to evaluate options at all stages. The rates are also used to benchmark our supply chain costs and assist in driving and then providing best value. Dermot kehily, technological university dublin follow. Industry agrees international standard for property life. Life cycle cost analysis template microsoft excel templates. Rics would like to thank the following for their contributions to this guidance note. Purpose life cycle costing lcc is an important economic analysis used in the selection of alternatives that impact both pending and future costs. Whole life costing operational and running costs over the life of an asset of course far outweigh those produced from the initial construction phase.
Life cycle costs wlcc, whole life cycle cost analysis wlcca. Life cycle costing is a technique that when used correctly can help do both and the bcis life cycle evaluator makes this easier than ever. Lifecycle cost analysis lcca is a method for assessing the total cost of facility ownership. Life cycle costing for design professionals kirk, stephen j. Part i deals with the fundamentals, providing the general background to appreciate wlcc concepts and whole life risk management techniques at the key decisionmaking milestones through a projects life. This guidance note summarises what is meant by a life cycle costing lcc and whole life costing wlc service for both new construction works and for the refurbishment of existing assets. Utilising life cycle costing and life cycle assessment designing buildings wiki share your construction industry knowledge. Whole lifecycle costing is a relatively new concept to the construction industry. New advanced life cycle costing course launching on the 2nd july follows on from the introduction to economic and environmental appraisal course, but only in respect of life cycle costing economic appraisal. Whole life costs are substantially greater than capital. Life cycle costs in construction procurement guide 07.
Whole life and life cycle costing with more and more emphasis on sustainability and cost reduction, whole life costing is critical at every stage of a construction project. The goal of whole building design is to create a successful highperformance building by applying an integrated design and team. Whole life costing is an investment appraisal and management tool which assesses the total cost of an asset over its whole life. Lifecycle costing sometimes known as whole life costing is a tool by which quantity surveyors assess the cost performance of construction work beyond completion of the construction phase. A critical view of value management and whole life costing. The concept of life cycle costing part one of three fmlink. Whole lifelife cycle costing wlc ltds competitive advantage is provided through our iso 15686 compliant software wlc evaluator which facilitates the calculation and application of whole life costs for any built asset.
The terms whole life costing and whole lifecycle costing are interchangeable boussabaine and kirkham, 2004, p. Lifecycle costs are all the costs associated with the product for its entire life cycle. Whole life costs should be integrated at each stage in cost plan development. It is essence an evolution of lifecycle costing techniques that are commonly used in many areas of procurement boussabaine and kirkham, 2004, p. It compares initial investment options and identifies the least cost alternatives for a twenty year period. To deliver whole life value by encouraging the use of life cycle costing to improve design, specification. Wholelife costing covers an assets costs from the time you purchase it to the time you get rid of it. Wholelife costs for buildings wlc designing buildings wiki.
Based on the purpose of utility, you have explored and understand different excel functions and their implementation in your working. An essential input to wlca is the definition of the life, in years, of the equipment or construction elements to be used. The appropriate use of whole life costing can therefore be a key enabler to the adoption of innovation in sustainable construction. In capital budgeting, the total cost of ownership is compiled and then reduced to its present value in order to determi. This unique product allows us to offer the following services worldwide.