life cycle cost analysis for building construction 1

New York State School Boards Association2009 Annual Convention, NYCOctober 15-18, 2009

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Life Cycle Costing

Life Cycle Costing

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International Masonry Institute 2009


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Life Cycle Costing

“An economic assessment of a building or building component that considers all the significant costs of ownership over its economic life…expressed in terms of

What is Life Cycle Costing?

equivalent dollars.”

Dr. Stephen Kirk

Expert life cycle costing consultants

IMI’s third party expert is Dr. Stephen

Life Cycle Costing

Kirk

Co-author of Life Cycle Costing for Facilities, Published by R.S. Means

Embodied Energy:

The amount of energy invested in a building, from the light over the draftsman's table, through construction including all the energy invested in the materials, all the lighting, heating, cooling, maintenance necessary for building operation, including, ultimately

James Marston Fitch

the energy invested in demolition at the end of its useful life.


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Life Cycle Costing

How does one get access to Life Cycle costing information?

Hire an expert consultant to do a custom study for you,

Try to determine on your ownTry to determine on your own,

Go to the IMI web site (www.imiweb.org) and request to have one run to your specifications.

Life Cycle Costing Instrument

The Life Cycle Cost instrument that IMI uses gives an owner, design professional or CM the opportunity to compare the life-

f f fcycle costs of a group of wall or floor systems while there is still time to make informed decisions as to the best value for their specific application.

What is the advantage of having Life Cycle Costing information?

Making an informed decision is all about having the right information at the right time.


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Life Cycle Costing

How did IMI develop an instrument to determine Life Cycle Costs?

IMI hired a third party expert to d l th t i d t th t idevelop the system using data that is readily available and recognized by the design and construction industry.

Is Life Cycle costing the same for

Not always -Different building types

QUIZ #1

everyone? Different values

Green:The Right

Thing to DoThing to Do


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Life Cycle Costing

takes the long-term view and looks at the larger impacts on the environment and society.

recognizes that total life cycle ti i ti l t f

Green Thinking

costing is an essential part of such holistic thinking

realizes that a building’s initial capital cost amounts to only a fraction of the total cost of running and maintaining it.

How Can Consideration of Life Cycle Cost add value?

Embodied Energy ($)

Poorly consideredLife Cycle Costing

Carefully consideredLife Cycle Costing

Cost of operation exceeds building value

Lifespan of Building

Resources committed: Mining, Manufacturing, Energy, Labor

Recycle components / Disposal

Con

stru

ctio

n

Dem

oliti

on

y gAdded value

Factors to consider:Initial cost

Daily or typical maintenance costs

Energy costs

Regular but periodic maintenance

Major renovation / restorations

Inflation

Building lifespan


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Life Cycle Costing


What is the lifespan of a building?

0 100 200 300

Con

stru

ctio

n

Dem

oliti

on

ATI

ON

Frequently spaced interventions for maintenance

Point at which initial rehabilitation or preservation takes place

Intervention Restoration, Continuing Maintenance

DET

ERIO

RA

TIME

Rate of deterioration

Amount of deterioration

ATI

ON

Point at which single rehabilitation or restoration event takes place

Continuing rate of deterioration

Intervention – Single Event

DET

ERIO

RA

TIME

Rate of deterioration

Amount of deterioration


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Life Cycle Costing


What is the lifespan of a building?

0 100 200 300

Con

stru

ctio

n

Dem

oliti

on

Bay City Train Depot

QUIZ #2

Name at least 3 key factors to consider when

Initial cost

Daily or typical maintenance costs

preparing a LCCA?

maintenance costs

Inflation

Into effect Jan. 2008

Aimed at I i ffi i

Executive Order 13327:Federal Environmental, Energy, and

Transportation Management

Improving energy efficiencyReducing greenhouse gasses

Considers sustainable environmental practices Acquisitions of goods and services


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Life Cycle Costing

Executive Order 13327:

LCCA - recommended method for accomplishing these goals

National Institute of Standards and Technology (NIST)

Handbook 135 “Life Cycle Costing Manual for the Energy Management Program”

Standard life-cycle costing method Developed in 1987 Revised in 1996

NIST Handbook 135

Serves as the definitive guide for developing LCCA studies.

Provides defined discount rates for LCC

NIST annual supplements provide current rates.


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Life Cycle Costing

QUIZ #3

What is the “Life Cycle Costing Manual for the Energy Management

NIST Handbook # 135

Energy Management Program”?

ASTM Standards

Help in the development of LCCA studies. E917 – 05 Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems

E1057 – 05 Practice for Measuring Internal Rate of Return in Buildings & Building Systems

Considers long-term material choice implicationsImproves ability to make better design choices

EXAMPLE:

Life Cycle costing studies help to control costs

EXAMPLE: Flooring options: carpet vs. terrazzo.

Most cost effective option for a busy high school public area?Most cost effective for leased office space?


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Life Cycle Costing

Carpet / Terrazzo

$ / SF

20

7 14 21 28 35Years

10

Only practical opportunity to minimize your long-term maintenance costs lie in the choices made during design.

Current Decisions = Long-term Implications

Poor choices impact Budget Building performance for the lifespan of the structure.

QUIZ #4

How does Life Cycle fit into sustainable

Life cycle is becoming more important to LEED projects.

Innovation and Design i t d d f

projects?points awarded for Cradle to Cradle product certification.

ASTM continuing to look at life cycle.


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Life Cycle Costing

Wall or floor - consideration factors

Initial CostMaintenance CostsEnergy CostsEnergy CostsNon-monetary Considerations

Initial Costs are like construction estimates.

Cost adjustment factors per CSI division

Cost Analysis Report

Cost adjustment factors per CSI division for each location.

No Present Worth (PW) analysis because all these costs occur at the beginning.

How it’s done:

Produce a sketch for each system and indicate what portion of the wall or floor is included.Cost an approximate10’ X 10’ area then divide back to get an average square foot cost.


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Life Cycle Costing

Initial Cost

R.S. Means was used as the data source.

Break down systems to components andto components and price.

Costs include material, labor, equipment, overhead and profit.

Cost Analysis Report

Replacement Cost deals with major maintenance or replacement costs

Present Worth (PW) represents purchasing power

Present Worth addresses:Periodic spending and costs Purchasing power changes in dollar over time

Maintenance Cost

Whitestone - data source.

Data - field gathered.

Costs - by building type.

Long-term & daily cost were considered.


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Life Cycle Costing

Energy cost: ASHRAE

Performed by energy analysis consultant.

Uses heating/cooling industry softwareCalculations performed for specific wall types.p p yp

Energy cost escalators calculated separately from general inflation factors.

Non - Monetary Rating

Fitting the client is not all about money.Different clients have different needs/ priorities.

Example of non - monetary environmental sustainability desire

Client placing high priority on LEED platinum

Weights and Scores

Weights define clients desires and criteria: Image and AestheticsColor RenditionEnvironmental SustainabilityObsolescence AvoidanceOperational EffectivenessDurabilityFuture Extendibility


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Life Cycle Costing

Understanding Weights

Total of 100 points of combined weights Higher values lead to lower values on others.

Image and Aesthetics 20Color Rendition 5Environmental Sustainability 25Obsolescence Avoidance 10Operational Effectiveness 10Durability 30Future Extendibility 0

Total 100

Scoring

Establishes system’s ability to meet criteria. Scores are based on a value of 1 through 10

1 is low and 10 is high.

E i h ll flExamine each wall or floorDetermine how well it meets the same criteria used for weighting.

For example, how durable is the wall or is it aesthetically pleasing?

School Case Study

Exterior Wall ChoicesMetal stud with gypsum interior and brick exterior

CMU it ll ith i t d i t iCMU cavity wall with painted interior and brick exterior

Integrally colored burnished block cavity wall with brick exterior


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Life Cycle Costing

Let’s also limit ourselves to the three factors listed below. We will apply the following weights to these three factors:

Image or Appearance: 30

School Case Study

g ppEnvironmental Sustainability: 30Durability 40

Gyp & Stud 1 2 3 4 5 6 7 8 9 10

Painted Block 1 2 3 4 5 6 7 8 9 10

Burnished Block 1 2 3 4 5 6 7 8 9 10

Appearance

Gyp & Stud Painted Block Colored BurnishedBlock

Gyp & Stud 1 2 3 4 5 6 7 8 9 10

Painted Block 1 2 3 4 5 6 7 8 9 10

Burnished Block 1 2 3 4 5 6 7 8 9 10

Environmental Sustainability



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Life Cycle Costing

Gyp & Stud 1 2 3 4 5 6 7 8 9 10

Painted Block 1 2 3 4 5 6 7 8 9 10

Burnished Block 1 2 3 4 5 6 7 8 9 10

Durability


Comparing Wall Systems

Benefit ScoreDefines how well each wall meets the clients desires

M lti lMultiplyWeight for a given factor by Score for that factor and then theBenefit (total) for the wall.

Appearance Environment DurabilityW S B W S B W S B

GYP &Stud

30 X 6 = 180 40 X 4 = 16030 X 4 = 120

Weight X Score = Benefit

StudPaintCMU

BurnBlk 30 X10 = 300

30 X 7 = 210 40 X 7 = 28030 X 7 = 210

40 X10 = 40030 X10 = 300


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Life Cycle Costing

Benefit totals for each wall type

Appearance Environment Durability Benefit

Score

GYP &Stud

180 160120 460StudPaintCMU

BurnBlk 300

210 280210

400300 1000

700

Cost Benefit Ratio

Benefit to Cost Ratio = Benefit Total Life-Cycle Cost

Benefit to cost ratio comparesAbility of selected systems meet clients desires Cost of selected systems

The higher the value the better the fit.

Cost Benefit Ratio“best bang for the buck” score


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Life Cycle Costing

Adjusted Cost Data by Cities

Cost data for each wall type is adjusted by city.

The following numbers are for Philadelphia.

By looking up some lifecycle costs in our system we can provide the following data:

Gyp & stud $39.57Painted CMU $40.34Burnish Block $47.42

Benefit to cost ratio and rank

Benefit Cost Benefit / Rank

Cost

GYP &Stud

460 11.6$39.57 3StudPaintCMU

BurnBlk 1000

700 17.3$40.34

21.1$47.42 1

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QUIZ #5

What are the key points for comparing

Establish criteria for comparison

Establish Weights, Scores and Benefitsp g

systems per LCCA?

Scores, and Benefits for criteria

Understand and apply local costs


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Life Cycle Costing

Getting the most out of your report:

Choose most realistic wall/ floor systems for your application.

REMEMBER:Exterior wall systems, interior walls & floors are separate reportsRequest more than one report if necessary

Request your report from IMI

WWW.IMIWEB.ORG

OR: Call your local IMI office at 1 - 800 – IMI - 0988

For Answers to Your Masonry Questions

Contact IMIContact IMI

11––800800––IMIIMI--09880988


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Life Cycle Costing


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Life Cycle Costing

life cycle cost analysis for building construction 1

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