Recommended practice for measuring life-cycle costs of buildings and building systems

Abstract

Life-cycle cost (LCC) analysis, when applied to building decisions, provides an economic evaluation of the net dollar effect, over time, of purchasing, constructing/installing maintaining, operating, repairing, and replacing buildings or building systems.Rising prices of labor, material, and particularly energy have forced builders, architects, engineers, building owners and operators, and code writers to turn to LCC analysis to identify building designs and building systems that will be cost effective in the long run.A practical, standardized approach for evaluating the LCC of building decisions is needed for widespread acceptance, understandability , and comparability of the results of LCC analysis.Reflecting this need in the public sector, the National Energy Conservation Policy Act of 1978 and an earlier Executive Order by President Carter mandated that a practical and uniform set of LCC methods and procedures be established and used by all Federal agencies in making decisions about energy projects in Federal buildings.A comparable set of guidelines which includes the treatment of taxes and other effects influencing building decisions in the private sector would further promote sound investment decisions as well as aid in the transfer of information among the many parties that together comprise the building community.This National Bureau of Standards report has been prepared in response to an ongoing stan- dards development activity in the American Society of Testing and Materials (ASTM E-6 -Performance of Building Constructions) and in response to requests from the building community for assistance in applying life-cycle cost analysis in a uniform and practicable manner.This document has been submitted to ASTM E-6.81, the Building Economics Subcommittee, for its consideration in the development of a "recommended practice for measuring the total life-cycle costs of buildings and building systems."The technical material is presented in such a manner that the Subcommittee can use it to develop either a single or several recommended practices or standards.This report describes how to measure the total life-cycle costs of an investment.Its preparation is one of a series of steps towards developing a comprehensive set of standard recommended economic practices that will meet the diverse needs of the building community for measures of economic performance.Specifically, this report provides the technical base for the development of a standard method or recommended practice for measuring total life-cycle costs of investments in buildings and building systems.Applying standardized LCC methods to building investment decisions will help to assure that the cost effectiveness of alternative building projects can be compared in a consistent and technically correct manner.This will assist the building community in making cost-effective building inves tments iii The members of ASTM who attended the Building Economics Subcommittee meeting in October 1979 in Champsign-Urbana agreed upon the basic elements that should be included in an initial life-cycle cost recommended practice.That meeting helped determine the framework of this paper, and therefore special thanks are due those ASTM attendees, including

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