The Growing Significance of Life Cycle Costing – BREEAM

Adrian Wilkins
Life cycle costing (LCC) is not new, it has been around for a while but why is it now starting to gain more traction?

In my experience clients, especially those managing large, £multi-million projects are a lot more comfortable with the term LCC and want and need to know the whole life cost of their project, not just the initial upfront construction cost. This follows various updates and publications regarding LCC with the most significant likely being the Government’s Construction Strategy.

According to a recent poll conducted by UK Construction and published in FM World (28th September 2016), "More than 90 per cent of facilities management professionals believe more needs to be done to take whole lifecycle cost into account during the construction process, according to a new survey."

The Government updated its Construction Strategy in March of this year of which one of its targets is to reduce whole life costs by 33%. This follows the announcement and subsequent implementation by the Building Research Establishment (BRE) to add additional LCC credits to its BREEAM (Building Research Establishment’s Environmental Assessment Method) sustainability rating scheme.

BREEAM Credits

BREEAM is an international sustainability rating scheme for the built environment. Through its application and use BREEAM helps clients measure and reduce the environmental impacts of their buildings and in doing so create higher value, lower risk assets.

LCC has always been part of the BREEAM assessment. The additional credits have been added under the Management section Man02 for LCC and service life planning. The aim of these credits is to deliver whole life value by recognising and encouraging the use and sharing of LCC and service life planning to improve design, specification and through-life maintenance and operation.

Achieving the credits

The four new credits within the BREEAM Assessment are achieved at different stages. Three credits are available at RIBA stage 2 (Concept Design) and the forth is available at RIBA stage 4 (Technical Design).

During RIBA stage 2, two credits are available for the preparation of an 'Elemental Life Cycle Cost Plan' and a third for simply reporting the 'Capital costs' on a project.

The elemental LCC plan provides an estimate of the construction, renewal, operation, maintenance and end of life costs over a given period of analysis for the building or constructed assets. The costs are presented in elemental format both in real and NPV terms so that the costs can be benchmarked against other projects and the team knows what costs need to be set aside for the long-term running costs.

The elemental LCC plan identifies the life cycle significant costs over the period which enables the design team to further develop and influence buildings and systems designs / specifications as the design develops.

During RIBA stage 4 one would need to undertake component level LCC option appraisals. These are LCC comparisons of relevant different components from the following:

  • Envelope, e.g. cladding, windows, and/or roofing
  • Services, e.g. heat source cooling source, and/or controls
  • Finishes, e.g. walls, floors and/or ceilings 
  • External spaces, e.g. alternative hard landscaping, boundary protection.

These component level LCC cycle appraisals can be used to influence building and systems designs / to minimise future life cycle costs and maximise critical value.

Initially following introduction of the 2014 BREEAM standards there was some confusion as to the terminology and life cycle requirements to meet the Man02 credits. Faithful+Gould as one of the lead technical authors of the BSI ISO 15686-5 Standardised Method of Life Cycle in Construction (SMLCC) standard were part of a working group that produced a technical note that helped clarify the requirements.

Making cost reductions

The introduction of the additional BREEAM credits and update to whole life cost targets within the Government Construction Strategy is to encourage designers, owners and occupiers of buildings to consider the impact of their design decisions on a whole life cost basis, rather than just an upfront build cost. The application of BREEAM Man02 LCC will help minimise LCC and maximise critical values on a project.

By making these early adjustments to the design, the cost saved is proportionally far higher than bringing in minor amendments through the construction phases. The impact of timing on LCC analysis, illustrated in potential cost reduction terms, is highest at the outset when there is greater scope to maximise the value improvement and reduce life LCC.

The Future?

LCC continues to be a significant factor in the design and development of buildings however with these changes to BREEAM Man02 and the Government's Construction Strategy it becomes ever more important. This will become ever more applicable with 6D Building Information Modelling (BIM) and Asset Information Modelling (AIM).

If you require any advice on LCC of your project please get in contact – you might save more than you think!

Written by