Whole Life Costing

A consideration that is finding increasing support from a lot of clients.

It is particularly important in the public sector WHY?

Think of the fact that they own and operate a lot of buildings, they are not just in
development to make money building and selling on buildings, they need to occupy
buildings for a long time. They want to get the most out of the building, pay the lowest bills,
change use and refurbish for new departments for the lowest cost i.e. buildings with
flexibility etc.

If you were paying for a building what would you want?

Consider PFI and PPP projects long term commitment.

A definition, what is it, what does it mean in construction work?

What does the term mean to building projects?

Considerations need to consider is that the best material / component / system etc to install now so now it
might be cheapest, reasonable quality and easy to install. What about 10 years from now, will it fail, how
will it be maintained, does it need special maintenance, do parts of it need replacing etc.

Think of a roof finish or cladding system. What is it subjected to, the environmental effects, the wear and
tear, how do we know it will last, can we believe the marketing pitch guaranteed for 25 yrs.

A lot more thought needs to go into selection, procuring with an eye on the future, how will the item hold up
in the long term?
You need to consider this for all elements, components and systems not easy, very time consuming, lots
of data sheets etc.

Why the importance now?

Capital costs of the build now is small compared to operational expenditure could be 5 10 times
as much.
Benefits

Needs to be integrated at all stages investment appraisal, feasibility study for alternatives, outline
and detailed design, tender appraisal, assessment of variations, handover, post
occupancy.

Important to recognise the best area to influence Whole life is early in design. 80% of the future
costs of running maintenance repair is fixed in the first 20% of the design process.
Using the FMs expertise is often overlooked.

First introduced in MoD building down barriers projects (prime contracting strategy). Potential
contractors who bid had to forecast WLC along a series of milestones. Part of payment
on 7 yr project was based on performance against milestones.

HOW is it done?

SOME BUTS
How do you predict life of a component
Various factors can impact on durability in practice
Consider several different materials in a component, different rates of wearing, response to its
operation
Replacement might be determined by economic, technical and functional obsolescence. Difficult to
predict when this will occur.
A building might be changing land values, changing IT cabling requirements, changing safety
and compliance regs
Data sources
from Latent defects insurance schemes
Conditions survey and defects investigations
Maintenance records and repairs database
SO how good are you at predicting the future

Very difficult to predict the future

The longer the time you are considering the greater the chance of error. Consider how well the
building is maintained.
What interest rates do you allow for?
Lump sums now vs lump sums in the future vs sums of money at regular intervals during the
period under consideration.
Small fluctuations over long periods have a major effect.

Lack of clarity on how to define WLC,

Lack of historical data on running costs
Making investment decisions need a tool not just cost but consideration of drivers such as time,
sustainability, quality and return on investment calculations done in a vacuum no way of
comparing and evaluating the options
Lack of tangible evidence of the benefits of WLC.
BCIS has developed a standardised approach to WLC in 2007 the BCIS occupancy online, provide
information at building level based on estimate for maintenance and occupancy based on a range of
building types and a profile of expenditure based on the BIM occupancy cost plans. User change
the tie period and the inflation or discount rate and adjust the costs for time and location to provide
cash flow at current or future prices and at NPC.