Life Cycle Cost Analysis (LCCA)

Abstract

LCCA is intended for compressors and pumps. For Contractor what matters is procurement and installation cost but for Owner, the total cost incurred throughout the life of the equipment. The total cost of the equipment is estimated after considering the cost factors in procurement and installation, energy consumption, operation, maintenance, downtime, decommissioning, and disposal. For implementing equipment selection based on LCCA, it is appropriate to include this concept in the equipment data sheet included in the FEED package and Design Basis, as this approach helps Bidders to take into account the total cost instead of CAPEX. In the Invitation to Bid (ITB) Package released to EPC Bidders, the Owner should ensure that Vendors approved thereof for the equipment is capable of meeting the LCCA requirement, as implementing this concept after award creates schedule and cost impacts. Website reference to an article on this topic is given.

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