New York State School Boards Association

2009 Annual Convention, NYC

October 15-18, 2009

Life Cycle Costing

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International Masonry Institute 2009

Life Cycle Costing

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

What is Life Cycle Costing?

An economic assessment of a building or
building component that considers all the
significant costs of ownership over its
economic lifeexpressed in terms of
equivalent dollars.
Dr. Stephen Kirk

Life Cycle Costing

Expert life cycle
costing consultants
IMIs third party
expert is Dr. Stephen
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
the energy invested in demolition at the
end of its useful life.

James Marston Fitch

Life Cycle Costing

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

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 own
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 lifecycle costs off a group off wall or ffloor
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.

Life Cycle Costing

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

How did IMI develop an instrument to

determine Life Cycle Costs?

IMI hired a third party expert to

d
develop
l
the
th system
t
using
i
data
d t that
th t is
i
readily available and recognized by
the design and construction industry.

QUIZ #1
Is Life Cycle
costing the
same for
everyone?

Not always Different building

types
Different values

Green:
The Right
Thing to Do

Life Cycle Costing

Green Thinking

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

takes the long-term view and

looks at the larger impacts
on the environment and society.
recognizes that total life cycle
costing
ti iis an essential
ti l partt off
such holistic thinking
realizes that a buildings 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?
Poorly considered

Cost of operation Life Cycle Costing

exceeds building
value

Embodied Energy ($)

Carefully considered
y
Costing
g
Life Cycle

Added value

Resources committed:
Mining, Manufacturing,
Energy, Labor

Demolition

Construction

Lifespan of Building
Recycle components /
Disposal

Factors to consider:
Initial cost
Daily or typical maintenance costs
Energy costs
Regular but periodic maintenance
Major renovation / restorations
Inflation
Building lifespan

Life Cycle Costing

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

What is the lifespan of a building?

Lifespan of Building
100

200

300

Demolition

Construction

DETERIORA
ATION

Intervention
Maintenance

Restoration, Continuing

Point at which initial

rehabilitation or
preservation takes
place

Frequently spaced
interventions for
maintenance
Amount of
deterioration

Rate of
deterioration

TIME

DETERIORA
ATION

Intervention Single Event

Point at which
single rehabilitation
or restoration event
takes place

Continuing
rate of
deterioration

Rate of
deterioration
Amount of
deterioration
TIME

Life Cycle Costing

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009
What is the lifespan of a building?
Lifespan of Building
200

300

Demolition

100

Construction

Bay City Train Depot

QUIZ #2
Name at least
3 key factors to
consider when
preparing a
LCCA?

Initial cost
Daily or typical
maintenance costs
Inflation

Executive Order 13327:

Federal Environmental, Energy, and
Transportation Management
Into effect Jan. 2008
Aimed at
I
Improving
i energy efficiency
ffi i
Reducing greenhouse gasses
Considers sustainable environmental practices
Acquisitions of goods and services

Life Cycle Costing

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

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.

Life Cycle Costing

QUIZ #3
What is the Life
Cycle Costing
Manual for the
Energy Management
Program?

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

NIST Handbook # 135

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

Life Cycle costing studies help

to control costs
Considers long-term material choice implications
Improves ability to make better design choices
EXAMPLE:
Flooring options: carpet vs. terrazzo.
Most cost effective option for a busy high school
public area?
Most cost effective for leased office space?

Life Cycle Costing

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Carpet / Terrazzo

$ / SF
20
10

14

Years

21

35

28

Current Decisions = Long-term

Implications
Only practical opportunity to minimize your
long-term maintenance costs lie in the
choices made during design.
Poor choices impact
Budget
Building performance for the lifespan of the
structure.

QUIZ #4
How does Life
Cycle fit into
sustainable
projects?

Life cycle is becoming

more important to LEED
projects.
Innovation and Design
points
i t awarded
d d for
f
Cradle to Cradle
product certification.
ASTM continuing to
look at life cycle.

Life Cycle Costing

10

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Wall or floor - consideration factors

Initial Cost
Maintenance Costs
Energy Costs
Non-monetary Considerations

Cost Analysis Report

Initial Costs are like construction
estimates.
Cost adjustment factors per CSI division
for each location.
No Present Worth (PW) analysis because
all these costs occur at the beginning.

How its done:

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

Life Cycle Costing

11

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Initial Cost
R.S. Means was used
as the data source.
Break down systems
to 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.

Life Cycle Costing

12

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Energy cost: ASHRAE

Performed by energy analysis consultant.
Uses heating/cooling industry software
Calculations p
performed for specific
p
wall types.
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 Aesthetics
Color Rendition
Environmental Sustainability
Obsolescence Avoidance
Operational Effectiveness
Durability
Future Extendibility

Life Cycle Costing

13

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Understanding Weights
Total of 100 points of combined weights
Higher values lead to lower values on others.
Image and Aesthetics
Color Rendition
Environmental Sustainability
Obsolescence Avoidance
Operational Effectiveness
Durability
Future Extendibility

20
5
25
10
10
30
0
Total 100

Scoring
Establishes systems ability to meet criteria.
Scores are based on a value of 1 through 10
1 is low and 10 is high.

Examine
E
i each
h wallll or flfloor
Determine 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 Choices
Metal stud with gypsum interior and
brick exterior
CMU cavity
it wallll with
ith painted
i t d iinterior
t i
and brick exterior
Integrally colored burnished block
cavity wall with brick exterior

Life Cycle Costing

14

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

School Case Study

Lets also limit ourselves to the three factors
listed below. We will apply the following
weights to these three factors:
Image
g or Appearance:
pp
Environmental Sustainability:
Durability

30
30
40

Appearance
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

Gyp & Stud

Painted Block

Colored Burnished
Block

Environmental Sustainability
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

Gyp & Stud

Painted Block

Colored Burnished
Block

Life Cycle Costing

15

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Durability
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

Gyp & Stud

Painted Block

Colored Burnished
Block

Comparing Wall Systems

Benefit Score
Defines how well each wall meets the
clients desires
Multiply
M
lti l
Weight for a given factor by
Score for that factor and then the
Benefit (total) for the wall.

Weight X Score = Benefit

Appearance

Environment

Durability
W

GYP & 30 X 6 = 180

Stud

30 X 4 = 120 40 X 4 = 160

Paint
CMU

30 X 7 = 210

30 X 7 = 210 40 X 7 = 280

Burn
Blk

30 X10 = 300

30 X10 = 300 40 X10 = 400

Life Cycle Costing

16

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Benefit totals for each wall type

Appearance Environment Durability Benefit
Score

GYP &
Stud

180

120

160

460

Paint
CMU

210

210

280

700

Burn
Blk

300

300

400

1000

Cost Benefit Ratio

Benefit to Cost Ratio =

Benefit Total
Life-Cycle Cost

Benefit to cost ratio compares

Ability 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

Life Cycle Costing

17

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

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
$39.57
Painted CMU
$40.34
Burnish Block
$47.42

Benefit to cost ratio and rank

Benefit

Cost

Benefit /

Rank

Cost

GYP &
Stud

460

$39.57

11.6

Paint
CMU

700

$40.34

17.3

Burn
Blk

1000

$47.42

21.1

QUIZ #5
What are the
key points for
comparing
p
g
systems per
LCCA?

Establish criteria for

comparison
Establish Weights,
Scores and Benefits
Scores,
for criteria
Understand and apply
local costs

Life Cycle Costing

18

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

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 reports
Request 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 IMI

1800
800
IMIIMI-0988

Life Cycle Costing

19

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Life Cycle Costing

20

New York State School Boards Association

2009 Annual Convention, NYC
October 15-18, 2009

Life Cycle Costing

21