It is expected to have a major impact on all future construction procurement, particularly major investment, PFI and PPP projects. The international standard is accompanied by the publication of UK guidance on its practical application, published by BSI British Standards.
The twin challenges of a financial slow down and increasing environmental considerations mean that calculating the true cost of a building and its all round sustainability are essential for industry. BS ISO 15686-5 Buildings and constructed assets – service life planning, Part 5: life cycle costing will be of invaluable assistance.
BS ISO 15686-5, published by the International Organization for Standardization and adopted in the UK by BSI British Standards, covers the basic principles and processes of life cycle costing, as well as defining terms and indicating how costing should be used in planning the long term performance and sustainability of buildings and other constructed assets.
The new standard means that the life cycle costs of projects can be directly compared. As a result, more consideration will have to be given by industry to the life cycle costs associated with a new building or constructed asset rather than initial capital cost. It is expected that the standard will directly impact the design of new buildings as clients become keener to set the right budgets and optimise their life cycle costs, from a whole life value and sustainable development perspective.
The accompanying UK publication, Standardized Method of Life Cycle Costing, provides a standard cost data structure for life cycle costing, which aligns to the BCIS standard form of cost analysis. It also contains worked examples for how to undertake various forms of life cycle costing applicable to key stages of the UK construction industry procurement process.
An international committee convened by Kathryn Bourke of Faithful+Gould produced ISO 15686-5 on life cycle costing and a BSI British Standards industry working group, convened by Andy Green, Director at Faithful+Gould and Joe Martin Executive Director of BCIS, produced the UK supplement to the ISO standard, Standardized Method of Life Cycle Costing.
Mike Low, Director BSI British Standards, says: "The publication of BS ISO 15686-5 is another clear indication of how standards can provide valuable tools to address key business issues. By developing a better understanding of life cycle costing through this standard, suppliers and clients will be able to understand far more about the total cost of ownership of buildings and other constructed assets."
Joe Martin, BCIS Executive Director, says: "This new data structure for Life Cycle Costs will make the process of Life Cycle Cost planning easier, facilitate the assessment of investments in sustainability and provide a significant improvement in the service available to clients. The need to deliver sustainable buildings means that we need to consider the future ramifications of current decisions about buildings and to ensure these decisions are made in a rational way we need to calculate the life cycle cost. The information contained within the UK Standardized Method of Life Cycle Costing complements the BCIS Standard Form of Cost Analysis to provide a common basis for developing and reporting Life Cycle Cost plans alongside capital cost plans."
Andy Green, director at Faithful+Gould and chair of the technical working group, says: "Having a standard for life cycle costing will help the QS profession shape the future construction procurement. Maintaining the status quo is not an option. Therefore the standards should provide the catalyst for all construction cost consultants to make a radical difference and practically do more accurate, consistent and robust life cycle costing estimation and option appraisals. It will not be easy and we should not under estimate the cultural challenges involved. However, if the Government embraces the ISO standard and the clients demand it, then it will raise the standard of life cycle costing and enable it to become widely used in practice."