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Facility Life Cycle Costs with RSMeans Part 1

Adrian Charest, PE, LEED AP BD+C, senior engineer at RSMeans, is the senior editor of the RSMeans Green Building Cost Data book.  He has managed and completed consulting projects for RSMeans in a range of topics valued from $10K–$20M.  He has instructed Mechanical and Electrical as well as Facility Maintenance and Repair estimating seminars for RSMeans throughout the United States in both public and private settings. His experience includes engineering, hands-on construction, professional estimating, and project management on small to large projects in a variety of trades. In addition, Mr. Charest has owned and operated a general contracting company where he managed, subcontracted, and performed trade work and brought challenging projects to completion. Mr. Charest holds Bachelor and Master of Science degrees from the University of New Hampshire and the University of Massachusetts, respectively. He is a licensed professional engineer and construction supervisor, as well as a LEED accredited professional.

Life cycle cost analysis is the act of considering the initial, sustainment, and the cost of replacement or disposal over the lifespan of the facility. It is the full measure of a facility’s cost and is instrumental in the comparison of multiple facilities. So how can you estimate, plan, and prepare for a facility’s life cycle costs?  How can you easily compare multiple facility’s life cycle costs against each other? What does the geolocation of facility life cycle costs look like and what are the advantages? This article attempts to answer these questions and more using cost data by RSMeans and external resources.

Square Foot Models
RSMeans has over one hundred cost models that have been developed for the commercial, industrial, and institutional sectors.  Each model has been developed using assemblies that are comprised of unit costs lines for each of the aspects of work, addressing materials as well as installation costs that include labor as well as equipment.  ‘Out of the box’, the models are generic and target common construction types.  However, broad customization as well as fine adjustments are possible enabling development of a cost model that represents a specific facility.

To illustrate this point, using publicly available information, a basic cost model was developed that represented a 150,000 square foot, 8-story office building in North Reading, Massachusetts.  Utilizing RSMeans 2015 cost data, the model estimated the new construction costs at $18,493,800, which is displayed in Figure 1 with a  breakdown of the facility’s system costs.

Maintenance and Repair
In addition to new construction costs for facilities, RSMeans has developed maintenance and repair costs for the various facility systems.  These include the maintenance, repair, and replacement costs that occur in order to keep the facility operating as intended and can be estimated over time.   Aside from energy, these costs represent the running costs in operating a facility and are critical in understanding future expenditures.

Life Cycle Cost Analysis
RSMeans combines the square foot models with the maintenance and repair to provide a full analysis in it’s Life Cycle Cost product.  As the generic cost model is customized to the specifications and characteristics of the facility at hand, the maintenance and repair costs are dynamic and also reflect those changes.  This is accomplished through the mapping of maintenance and repair costs to their respective systems.  Thus, the analysis is specific to the facility in all aspects.

In addition, adjustments to the life cycle cost analysis can be made as well, both including and beyond the design of the facility.  Facility adjustments, such as the year of construction, the starting year of the analysis, and the duration of the analysis period can be performed.  Economic adjustments, such as labor and replacement inflation rates, as well as the preventative, maintenance and repair, and replacement sustainment factors are possible.  And maintenance adjustments, such as the frequency of maintenance or repair tasks and the previous year a task was performed can be altered too.

Figure 2 displays the life cycle analysis graphic of the 150,000 square foot, 8-story office building in North Reading, Massachusetts previously introduced.  The analysis clearly shows the sustainment costs, which include the preventative, maintenance and repair, as well as the replacement costs over a 30-year period of time.  Using this figure, one can see the small and large spikes in maintenance/repair and replacement costs that accompany aging facilities.

How is this useful?  Using this tool, an understanding of the impact that design changes have on a facility’s upfront costs as well as future costs can be developed.  For instance, a type of heating system may have a higher up front cost, but have a lower maintenance cost which would be reflected in these changes.  In addition, the incorporation of economic factors shows the impact of breaking ground in a particular year and what that means for future material and labor costs as it relates to inflation.

Read Part 2 of this blog post