WHAT IS LIFE CYCLE COSTING?

Life cycle costing is defined by ISO 156868 Part 1 (2000) as "a technique that enables comparative cost assessments to be made over a specified period of time, taking into account all relevant economic factors both in terms of initial capital costs and future operational costs". calfordseaden, however, prefer the more practical definition of "the calculation of life cycle build costs discounted to enable uniform comparison with capital costs".

WHY IS THERE A NEED FOR LIFE CYCLE COSTING?

The Housing Corporation has stipulated that the preparation of a life cycle cost model as a condition precedent to grant funding.

Life cycle costs are significantly greater than capital costs. Through the application of the technique from the earliest viability stages of the project, life cycle cost savings can be achieved that are significantly greater than the initial capital cost.

The competitiveness of Private Finance Initiatives are critically dependent upon the accuracy and commercial competitiveness of life cycle costs.

Government agencies, such as the London Development Agency and English Partnerships, require models to be undertaken and monitored on an ongoing basis as part of the bid process for their competitions.

Any client with a long term commitment to property should consider the 'cost in use' of a building as part of the design process and use the 'model' as a tool for budgetary management as on ongoing fiscal control.

In alignment with the ongoing drive towards energy efficiency in both embodied energy and carbon saving/reduction associated with material and total life cost in terms of energy useage.

WHO NEEDS LIFE CYCLE COSTING?

Registered Social Landlords;

Private landlords and developers acting in partnership with Registered Social Landlords;

Commercial and retail establishments;

Local Authorities with existing residential stock and planned developments; and

Health and education authorities commissioning and managing facilities where the life cycle cost can represent a large proportion of total 'life costs'.

OUR APPROACH TO LIFE CYCLE COSTING

calfordseaden seek to be continually progressive and to lead advancements in this field. Our approach to life cycle costing includes:

Utilising tested formats that are tailored to provide a bespoke life cycle cost analysis to reflect the conditions of a particular scheme;

Subscribing to industry leading benchmarking clubs that determine the solutions that test the best market performers against measurable criteria;

Maintaining our own cost database as a resource of competitive market data that tests the benchmarking clubs and alternative data sources; and

Providing specific cost modelling to test the long-term viability of renewable technologies.

To discuss calfordseaden's life cycle cost management service further contact:

Michael Moran BSc MRICS
T: +44 (0)121 454 1688 E: mmoran@calfordseaden.co.uk