LIFE CYCLE COST ANALYSIS

OF CIVIL INFRASTRUCTURE SYSTEM

SUBMITTED BY : NIRDESH K. SHARMA

ROLL NO : 14102
SUBMITTED TO : DR.
SUMIT ARORA
• OUTLINE
• Stages of a Building Construction
• Life Cycle Cost Analysis
• Life Cycle Cost Analysis Procedure
• Cost components in LCCA
• Concepts in LCCA
STAGES IN LIFE CYCLE
• Materials manufacturing
• Construction
• Use and maintenance
• End of life
Life Cycle Cost Analysis is a process of evaluating the economic performance of a
building over its entire life. It balances initial monetary investment with the long-term
expense of owning and operating the building. LCCA is based upon the assumptions
that multiple building design can achieve acceptable performance, and that these
options have differing initial costs, operating costs, maintenance costs, and possibly
different life cycles.

For a given design, LCCA estimates the total cost of the resulting building, from initial
construction through operation and maintenance, for some portion of the life of the
building. By comparing the life cycle costs of various design configurations, LCCA can
explore trade-offs between low initial costs and long-term cost savings, identify the
most cost-effective system for a given use, and determine how long it will take for a
specific system to “pay back” its incremental cost. Because creating an exhaustive
life cycle cost estimate for every potential design element of a building would not be
practical, the Guidelines for LCCA focus on features and systems most likely to impact
long-term costs
LCCA PROCEDURE

Designing for Minimum Life Cycle Costs

LCCA is a method of evaluating the cost-effectiveness of project design decisions. LCCA is comprehensive because it
properly accounts for many project cost variables. These include a wide variety of project costs (construction,
operations, maintenance, replacements, utilities, etc.). They also encompass the time value of money, including a
project-specific discount rate, inflation, and cost escalations for a variety of goods and services.

Performing an LCCA study involves

(1) establishing objectives for the analysis,
(2) determining the criteria for evaluating alternatives,
(3) identifying and developing design alternatives,
(4) gathering cost information, and
(5) developing a life cycle cost for each alternatives
Establish Clear Objectives

To be successful, an LCCA study must have clear objectives, and they must be objectives that this type of study is well
suited to address. LCCA can capture cost variations between alternatives and show which option will have the lowest
overall cost. It can only address values quantifiable in money. For example, an LCCA study of high-performance glazing can
capture the overall cost-effectiveness of different options as compared to a base case. LCCA is not the right tool to
explicitly evaluate improved comfort or occupant satisfaction with the different glazing products

Determine LCCA Metrics (total cost and payback)

The two primary metrics to be used and calculated in LCCA are the life cycle costs of each alternative and its payback over a
certain study life. That is, consideration should be given to total costs and the time it takes to recover an incremental initial
investment incorporating the time value of money.
When two alternatives have similar O&M costs over the study life, “first” costs (i.e., construction costs) will most likely drive
the decision. This approach is further supported by the consideration of uncertainty.

Identify the Base Case and Develop Alternative Designs

LCCA approach is geared towards evaluating design alternatives. The alternative that captures the “standard” design or
minimum requirements for a project is called the “base case.” The design team must develop alternatives to evaluate
against the base case. These alternatives must be developed in sufficient detail to derive good cost estimates, which are
required to run the life cycle cost calculations and to capture the incremental cost differences of the options. Analysis of
alternatives should consider the effects of diminishing returns. Often, energy efficiency measures look less attractive in
combination than when modeled individually but in totality they give more output.
Gather Cost Information

Cost information can come from a variety of sources, including cost estimating consultants, contractors, vendors, and
designers. For each alternative, gather all of the cost information described below under Cost Components of LCCA (e.
g., construction, utility, maintenance, service, and in some cases remodeling costs). Identify additional soft cost
requirements for the alternatives as well. Project Managers will manage the development of this information
Perform Life Cycle Cost Calculations
For each alternative, calculate the metrics listed above, using the parameters listed under Life Cycle Cost Parameters
below. Test each alternative against the two metrics and make a recommendation on which to incorporate into the
design.

Cost Components of LCCA

An LCCA may include project, utility, maintenance, service, remodeling, and end-of-life costs, as well as benefits to
campus infrastructure.

Project Costs

Project costs, sometimes referred to as initial or first costs, include both “hard” or construction costs (labor, materials,
equipment, furnishings, etc.) and “soft” costs (design fees, permit fees, etc.). Cost estimates and information from
contractors, vendors, and design teams can be used to develop project costs for LCCA alternatives
In LCCA studies, the cost differences between alternatives are usually what is important, not the absolute costs.
Project costs therefore only need to be developed for the components that vary between alternatives. For example, in
comparing two HVAC systems that have the same zonal equipment (e.g., VAV boxes) but varying central equipment
(e.g., air handlers), the zonal equipment costs can be ignored and only the costs of the central equipment developed.
It is important to be as complete and thorough as possible when considering project cost variations between
alternatives; all costs that vary must be captured in order to make a valid comparison. Design and other soft costs
should be identified and built into the LCCA calculations

Utility Costs

Energy Costs
utilities provide the majority of facilities with steam, chilled water, and/or electricity, though Pacific Gas & Electric
Company is the provider in outlying areas. For each type of utility service there is a cost per unit of energy delivered
that will be charged to the building. The rates and units for these utilities are listed below under Life Cycle Cost
Parameters.

Non-Energy Utility Costs

Domestic water and sewer service are two non-energy utility costs that need to be developed when affected by
alternatives being modeled.
Maintenance Costs
Maintenance refers to the costs incurred to keep building systems running properly. The wide array of activities
performed by Stanford’s maintenance staff fall into four cost categories: preventive, reactive, planned, and deferred.
These data should be based on historical data provided by facilities operations.
Preventive maintenance is routine, scheduled activity intended to keep a system running at its best. This
maintenance is performed whether or not there are any problems with a system. It is designed to prevent breakdowns
e.g. Changing filters and lubrication

Reactive

Reactive maintenance is performed in response to problems. If a fan belt breaks, for example, a technician issues a
work order to replace the belt and address any associated damage to get the system running again.
Reactive maintenance is unpredictable. In theory, if systems are running well and all required preventive maintenance
is performed, then reactive maintenance should be minimum.

Planned

Planned maintenance is the replacement of building subsystems at the end of their useful lives. LCCA calculations
expressly include planned maintenance in the form of replacement costs of equipment and systems. For example, if
the time frame of a study is 30 years and a component of a mechanical system (e.g., a heat pump) needs to be
replaced every 10 years, then the life cycle costs need to include the cost of that replacement at year 10, year 20, and
year 30.
Concepts behind calculating LCCA
• Time value of money
• Inflation
• Escalation
• Study life