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Lif e-Cycle Cost Analysis (LCCA)
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by Sieglinde Fuller National Institute of Standards and Technology (NIST) Last updated: 06-28-2010
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Life-cycle co st analysis (LCCA) is a metho d fo r assessing the Introduction to tal co st o f facility o wnership. It takes into acco unt all co sts o f Description acquiring, o wning, and dispo sing o f a building o r building system. Application LCCA is especially useful when pro ject alternatives that fulfill the Relevant Codes and same perfo rmance requirements, but differ with respect to initial Standards co sts and o perating co sts, have to be co mpared in o rder to Additional Resources select the o ne that maximizes net savings. Fo r example, LCCA will help determine whether the inco rpo ratio n o f a highperfo rmance HVAC o r glazing system, which may increase initial co st but result in dramatically reduced o perating and maintenance co sts, is co st-effective o r no t. LCCA is no t useful fo r budget allo catio n.
Balancing Security/Safety and Sustainability Objectives Designing Buildings to Resist Explosive Threats Distributed Energy Resources (DER) Extensive Green Roofs View All Related (15) View Resource Page Index
Lo west life-cycle co st (LCC) is the mo st straightfo rward and easyto -interpret measure o f eco no mic evaluatio n. So me o ther co mmo nly used measures are Net Savings (o r Net Benefits), Savings-to -Investment Ratio (o r Savings Benefit-to -Co st Ratio ), Internal Rate o f Return, and Payback Perio d. They are co nsistent with the Lo west LCC measure o f evaluatio n if they use the same parameters and length o f study perio d. Building eco no mists, certified value specialists, co st engineers, architects, quantity surveyo rs, o peratio ns researchers, and o thers might use any o r several o f these techniques to evaluate a pro ject. The appro ach to making co st-effective cho ices fo r building-related pro jects can be quite similar whether it is called co st estimating , value engineering, o r eco no mic analysis . BACK TO TO P
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DESCRIPT ION A. Lif e- Cycle Cost Analysis (LCCA) Met hod The purpo se o f an LCCA is to estimate the o verall co sts o f pro ject alternatives and to select the design that ensures the facility will pro vide the lo west o verall co st o f o wnership co nsistent with its quality and functio n. The LCCA sho uld be perfo rmed early in the design pro cess while there is still a chance to refine the design to ensure a reductio n in life-cycle co sts (LCC). The first and mo st challenging task o f an LCCA, o r any eco no mic evaluatio n metho d, is to determine the eco no mic effects o f alternative designs o f buildings and building systems and to quantify these effects and express them in do llar amo unts.
R e liab ilit y- C e nt e re d Maint e nance R e t ro f it t ing Exist ing B uild ing s t o R e sist Exp lo sive T hre at s R unning a D e sig n C o mp e t it io n
Viewed over a 30 year period, initial building costs account for approximately just 2% of the total, while operations and maintenance costs equal 6% , and personnel costs equal 92% . Graphic: Sieglinde Fuller Source: Sustainable Building Technical Manual / Joseph J. Romm, Lean and Clean Management , 1994.
B. Cost s There are numero us co sts asso ciated with acquiring, o perating, maintaining, and dispo sing o f a building o r building system. Building-related co sts usually fall into the fo llo wing catego ries: Initial Co sts—Purchase, Acquisitio n, Co nstructio n Co sts Fuel Co sts Operatio n, Maintenance, and Repair Co sts Replacement Co sts Residual Values—Resale o r Salvage Values o r Dispo sal Co sts Finance Charges—Lo an Interest Payments PDFmyURL.com
No n-Mo netary Benefits o r Co sts Only tho se co sts within each catego ry that are relevant to the decisio n and significant in amo unt are needed to make a valid investment decisio n. Co sts are relevant when they are different fo r o ne alternative co mpared with ano ther; co sts are significant when they are large eno ugh to make a credible difference in the LCC o f a pro ject alternative. All co sts are entered as base-year amo unts in to day's do llars; the LCCA metho d escalates all amo unts to their future year o f o ccurrence and disco unts them back to the base date to co nvert them to present values. Initial costs Initial co sts may include capital investment co sts fo r land acquisitio n, co nstructio n, o r reno vatio n and fo r the equipment needed to o perate a facility. Land acquisition costs need to be included in the initial co st estimate if they differ amo ng design alternatives. This wo uld be the case, fo r example, when co mparing the co st o f reno vating an existing facility with new co nstructio n o n purchased land. Construction costs: Detailed estimates o f co nstructio n co sts are no t necessary fo r preliminary eco no mic analyses o f alternative building designs o r systems. Such estimates are usually no t available until the design is quite advanced and the o ppo rtunity fo r co st-reducing design changes has been missed. LCCA can be repeated thro ugho ut the design pro cess if mo re detailed co st info rmatio n beco mes available. Initially, co nstructio n co sts are estimated by reference to histo rical data fro m similar facilities. Alternately, they can be determined fro m go vernment o r private-secto r co st estimating guides and databases . The Tri-Services Parametric Estimating System (TPES) co ntained in the Natio nal Institute o f Building Sciences (NIBS) Co nstructio n Criteria Base (CCB) develo ped mo dels o f different facility types by determining the critical co st parameters (i.e., number o f flo o rs, area and vo lume, perimeter length) and relating these values thro ugh algebraic fo rmulas to predict co sts o f a wide range o f building systems, subsystems, and assemblies. The TPES mo dels can be adapted to facilities beyo nd tho se included in the base mo deling system by using SuccessEstimato r, a so ftware package available fro m U.S. Co st. Detailed co st estimates are prepared at the submittal stages o f design (typically at 30 %, 6 0 %, and 9 0 %) based o n quantity take-o ff calculatio ns. These estimates rely o n co st databases such as the Commercial Unit Price Book (C-UPB) o r the R. S. Means Building Construction Cost Database. Testing o rganizatio ns such as ASTM Internatio nal and trade o rganizatio ns have reference data fo r materials and pro ducts they test o r represent. Energy and Water Costs Operatio nal expenses fo r energy, water, and o ther utilities are based o n co nsumptio n, current rates, and price pro jectio ns. Because energy, and to so me extent water co nsumptio n, and building co nfiguratio n and building envelo pe are interdependent, energy and water co sts are usually assessed fo r the building as a who le rather than fo r individual building systems o r PDFmyURL.com
co mpo nents. Energy usage: Energy co sts are o ften difficult to predict accurately in the design phase o f a pro ject. Assumptio ns must be made abo ut use pro files, o ccupancy rates, and schedules, all o f which impact energy co nsumptio n. At the initial design stage, data o n the amo unt o f energy co nsumptio n fo r a building can co me fro m engineering analysis o r fro m co mputer pro grams such as Energy-10 , o r eQuest. ENERGY PLUS (DOE), DOE-2.1E and BLAST require mo re detailed input no t usually available until later in the design pro cess. Other so ftware packages, such as the pro prietary pro grams TRACE (Trane), ESPRE (EPRI), and HAP (Carrier) have been develo ped to assist in mechanical equipment selectio n and sizing and are o ften distributed by manufacturers. When selecting a pro gram, it is impo rtant to co nsider whether yo u need annual, mo nthly, o r ho urly energy co nsumptio n figures and whether the pro gram adequately tracks savings in energy co nsumptio n when design changes o r different efficiency levels are simulated. Energy prices: Quo tes o f current energy prices fro m lo cal suppliers sho uld take into acco unt the rate type, the rate structure, summer and winter differentials, blo ck rates, and demand charges to o btain an estimate as clo se as po ssible to the actual energy co st. Energy price projections: Energy prices are assumed to increase o r decrease at a rate different fro m general price inflatio n. This differential energy price escalatio n needs to be taken into acco unt when estimating future energy co sts. Energy price pro jectio ns can be o btained either fro m the supplier o r fro m energy price escalatio n rates published annually o n April 1 by DOE in Discount Factors for Life-Cycle Cost Analysis, Annual Supplement to NIST Handbook 135 . Water Costs: Water co sts sho uld be handled much like energy co sts. There are usually two types o f water co sts: water usage co sts and water dispo sal co sts. DOE do es no t publish water price pro jectio ns. Operation, Maintenance, and Repair Costs No n-fuel o perating co sts, and maintenance and repair (OM&R) co sts are o ften mo re difficult to estimate than o ther building expenditures. Operating schedules and standards o f maintenance vary fro m building to building; there is great variatio n in these co sts even fo r buildings o f the same type and age. It is therefo re especially impo rtant to use engineering judgment when estimating these co sts. Supplier quo tes and published estimating guides so metimes pro vide info rmatio n o n maintenance and repair co sts. So me o f the data estimatio n guides derive co st data fro m statistical relatio nships o f histo rical data (Means, BOMA) and repo rt, fo r example, average o wning and o perating co sts per square fo o t, by age o f building, PDFmyURL.com
geo graphic lo catio n, number o f sto ries, and number o f (Courtesy of Washington State square feet in the building. The Whitesto ne Research Department of General Building Maintenance and Repair Cost Reference gives Administration) annualized co sts fo r building systems and elements as well as service life estimates fo r specific building co mpo nents. The U.S. Army Co rps o f Engineers, Huntsville Divisio n, pro vides access to a custo mized OM&R database fo r military co nstructio n (co ntact: Terry.L.Patto n@HND0 1.usace.army.mil). Replacement Costs The number and timing o f capital replacements o f building systems depend o n the estimated life o f the system and the length o f the study perio d. Use the same so urces that pro vide co st estimates fo r initial investments to o btain estimates o f replacement co sts and expected useful lives. A go o d starting po int fo r estimating future replacement co sts is to use their co st as o f the base date. The LCCA metho d will escalate base-year amo unts to their future time o f o ccurrence. Residual Values The residual value o f a system (o r co mpo nent) is its remaining value at the end o f the study perio d, o r at the time it is replaced during the study perio d. Residual values can be based o n value in place, resale value, salvage value, o r scrap value, net o f any selling, co nversio n, o r dispo sal co sts. As a rule o f thumb, the residual value o f a system with remaining useful life in place can be calculated by linearly pro rating its initial co sts. Fo r example, fo r a system with an expected useful life o f 15 years, which was installed 5 years befo re the end o f the study perio d, the residual value wo uld be appro ximately 2/3 (=(15-10 )/15) o f its initial co st. Other Costs Finance charges and taxes: Fo r federal pro jects, finance charges are usually no t relevant. Finance charges and o ther payments apply, ho wever, if a pro ject is financed thro ugh an Energy Savings Perfo rmance Co ntract (ESPC) o r Utility Energy Services Co ntract (UESC). The finance charges are usually included in the co ntract payments nego tiated with the Energy Service Co mpany (ESCO) o r the utility. Non-monetary benefits or costs: No n-mo netary benefits o r co sts are pro ject-related effects fo r which there is no o bjective way o f assigning a do llar value. Examples o f no n-mo netary effects may be the benefit derived fro m a particularly quiet HVAC system o r fro m an expected, but hardto -quantify pro ductivity gain due to impro ved lighting. By their nature, these effects are external to the LCCA, but if they are significant they sho uld be co nsidered in the final investment decisio n and included in the pro ject do cumentatio n. See Co st-Effective—Co nsider No n-Mo netary Benefits. To fo rmalize the inclusio n o f no n-mo netary co sts o r benefits in yo ur decisio n making, yo u can use the analytical hierarchy pro cess (AHP), which is o ne o f a set o f multi-attribute decisio n analysis (MADA) metho ds that co nsider no n-mo netary attributes (qualitative and quantitative) in PDFmyURL.com
additio n to co mmo n eco no mic evaluatio n measures when evaluating pro ject alternatives. ASTM E 1765 Standard Practice for Applying Analytical Hierarchy Process (AHP) to Multi-attribute Decision Analysis of Investments Related to Buildings and Building Systems published by ASTM Internatio nal presents a pro cedure fo r calculating and interpreting AHP sco res o f a pro ject's to tal o verall desirability when making building-related capital investment decisio ns. A so urce o f info rmatio n fo r estimating pro ductivity co sts, fo r example, is the WBDG Pro ductive Branch.
C. Paramet ers f or Present - Value Analysis Discount Rate In o rder to be able to add and co mpare cash flo ws that are incurred at different times during the life cycle o f a pro ject, they have to be made time-equivalent. To make cash flo ws time-equivalent, the LCC metho d co nverts them to present values by disco unting them to a co mmo n po int in time, usually the base date. The interest rate used fo r disco unting is a rate that reflects an investo r's o ppo rtunity co st o f mo ney o ver time, meaning that an investo r wants to achieve a return at least as high as that o f her next best investment. Hence, the disco unt rate represents the investo r's minimum acceptable rate o f return. The disco unt rate fo r federal energy and water co nservatio n pro jects is determined annually by FEMP; fo r o ther federal pro jects, tho se no t primarily co ncerned with energy o r water co nservatio n, the disco unt rate is determined by OMB. These disco unt rates are real disco unt rates, no t including the general rate o f inflatio n. Cost Period(s) Length of study period: The study perio d begins with the base date, the date to which all cash flo ws are disco unted. The study perio d includes any planning/co nstructio n/implementatio n perio d and the service o r o ccupancy perio d. The study perio d has to be the same fo r all alternatives co nsidered. Service period: The service perio d begins when the co mpleted building is o ccupied o r when a system is taken into service. This is the perio d o ver which o peratio nal co sts and benefits are evaluated. In FEMP analyses, the service perio d is limited to 40 years. Contract period: The co ntract perio d in ESPC and UESC pro jects lies within the study perio d. It starts when the pro ject is fo rmally accepted, energy savings begin to accrue, and co ntract payments begin to be due. The co ntract perio d generally ends when the lo an is paid o ff. Discounting Convention In OMB and FEMP studies, all annually recurring cash flo ws (e.g., o peratio nal co sts) are disco unted fro m the end o f the year in which they are incurred; in MILCON studies they are disco unted fro m the middle o f the year. All single amo unts (e.g., replacement co sts, residual values) are disco unted fro m their dates o f o ccurrence. PDFmyURL.com
Treatment of Inflation An LCCA can be perfo rmed in co nstant do llars o r current do llars. Co nstant-do llar analyses exclude the rate o f general inflatio n, and current-do llar analyses include the rate o f general inflatio n in all do llar amo unts, disco unt rates, and price escalatio n rates. Bo th types o f calculatio n result in identical present-value life-cycle co sts. Co nstant-do llar analysis is reco mmended fo r all federal pro jects, except fo r pro jects financed by the private secto r (ESPC, UESC). The co nstant-do llar metho d has the advantage o f no t requiring an estimate o f the rate o f inflatio n fo r the years in the study perio d. Alternative financing studies are usually perfo rmed in current do llars if the analyst wants to co mpare co ntract payments with actual o peratio nal o r energy co st savings fro m year to year.
D. Lif e- Cycle Cost Calculat ion After identifying all co sts by year and amo unt and disco unting them to present value, they are added to arrive at to tal life-cycle co sts fo r each alternative: LCC = I + Repl — Res + E + W + OM&R + O LCC = To tal LCC in present-value (PV) do llars o f a given alternative I = PV investment co sts (if incurred at base date, they need no t be disco unted) Repl = PV capital replacement co sts Res = PV residual value (resale value, salvage value) less dispo sal co sts E = PV o f energy co sts W = PV o f water co sts OM&R = PV o f no n-fuel o perating, maintenance and repair co sts O = PV o f o ther co sts (e.g., co ntract co sts fo r ESPCs o r UESCs)
E. Supplement ary Measures Supplementary measures o f eco no mic evaluatio n are Net Savings (NS), Savings-to -Investment Ratio (SIR), Adjusted Internal Rate o f Return (AIRR), and Simple Payback (SPB) o r Disco unted Payback (DPB). They are so metimes needed to meet specific regulato ry requirements. Fo r example, the FEMP LCC rules (10 CFR 436 A) require the use o f either the SIR o r AIRR fo r ranking independent pro jects co mpeting fo r limited funding. So me federal pro grams require a Payback Perio d to be co mputed as a screening measure in pro ject evaluatio n. NS, SIR, and AIRR are co nsistent with the lo west LCC o f an alternative if co mputed and applied co rrectly, with the same time-adjusted input values and assumptio ns. Payback measures, either SPB o r DPB, are o nly co nsistent with LCCA if they are calculated o ver the entire study perio d, no t o nly fo r the years o f the payback perio d. All supplementary measures are relative measures, i.e., they are co mputed fo r an alternative relative to a base case. PDFmyURL.com
NS = Net Savings: o peratio nal savings less difference in capital investment co sts SIR = Savings-to -Investment Ratio : ratio o f o peratio nal savings to difference in capital investment co sts AIRR = Adjusted Internal Rate o f Return: annual yield fro m an alternative o ver the study perio d, taking into acco unt reinvestment o f interim returns at the disco unt rate SPB = Simple Payback: time required fo r the cumulative savings fro m an alternative to reco ver its initial investment co st and o ther accrued co sts, witho ut taking into acco unt the time value o f mo ney DPB = Disco unted Payback: time required fo r the cumulative savings fro m an alternative to reco ver its initial investment co st and o ther accrued co sts, taking into acco unt the time value o f mo ney
F. Evaluat ion Crit eria Lo west LCC (fo r determining co st-effectiveness) NS > 0 (fo r determining co st-effectiveness) SIR > 1 (fo r ranking pro jects) AIRR > disco unt rate (fo r ranking pro jects) SPB, DPB < than study perio d (fo r screening pro jects)
G. Uncert aint y Assessment in Lif e- Cycle Cost Analysis Decisio ns abo ut building-related investments typically invo lve a great deal o f uncertainty abo ut their co sts and po tential savings. Perfo rming an LCCA greatly increases the likeliho o d o f cho o sing a pro ject that saves mo ney in the lo ng run. Yet, there may still be so me uncertainty asso ciated with the LCC results. LCCAs are usually perfo rmed early in the design pro cess when o nly estimates o f co sts and savings are available, rather than certain do llar amo unts. Uncertainty in input values means that actual o utco mes may differ fro m estimated o utco mes. There are techniques fo r estimating the co st o f cho o sing the "wro ng" pro ject alternative. Deterministic techniques, such as sensitivity analysis o r breakeven analysis, are easily do ne witho ut requiring additio nal reso urces o r info rmatio n. They pro duce a single-po int estimate o f ho w uncertain input data affect the analysis o utco me. Pro babilistic techniques, o n the o ther hand, quantify risk expo sure by deriving pro babilities o f achieving different values o f eco no mic wo rth fro m pro bability distributio ns fo r input values that are uncertain. Ho wever, they have greater info rmatio nal and technical requirements than do deterministic techniques. Whether o ne o r the o ther technique is cho sen depends o n facto rs such as the size o f the pro ject, its impo rtance, and the reso urces available. Since sensitivity analysis and break-even analysis are two appro aches that are simple to perfo rm, they sho uld be part o f every LCCA. Sensitivity Analysis Sensitivity analysis is the technique reco mmended fo r energy and water co nservatio n pro jects by PDFmyURL.com
FEMP. Sensitivity analysis is useful fo r: identifying which o f a number o f uncertain input values has the greatest impact o n a specific measure o f eco no mic evaluatio n, determining ho w variability in the input value affects the range o f a measure o f eco no mic evaluatio n, and testing different scenario s to answer "what if" questio ns. To identify critical parameters, arrive at estimates o f upper and lo wer bo unds, o r answer "what if" questio ns, simply change the value o f each input up o r do wn, ho lding all o thers co nstant, and recalculate the eco no mic measure to be tested. Break-even Analysis Decisio n-makers so metimes want to kno w the maximum co st o f an input that will allo w the pro ject to still break even, o r co nversely, what minimum benefit a pro ject can pro duce and still co ver the co st o f the investment. To perfo rm a break-even analysis, benefits and co sts are set equal, all variables are specified, and the break-even variable is so lved algebraically. Sensitivity analysis and break-even analysis, and a number o f o ther appro aches to risk and uncertainty assessment, bo th deterministic and pro babilistic, are described in detail in Techniques for Treating Uncertainty and Risk in the Economic Evaluation of Building Investments , by Haro ld Marshall, NIST Special Publicatio n 757, September 19 8 8 . (Request a co py o f this publicatio n fro m the Office o f Applied Eco no mics at NIST).
H. Design and Analysis Tools The use o f co mputer pro grams can co nsiderably reduce the time and effo rt spent o n fo rmulating the LCCA, perfo rming the co mputatio ns, and do cumenting the study. Listed belo w are several LCCA-related so ftware pro grams: Building Life-Cycle Co st (BLCC) Pro gram —Eco no mic analysis to o l develo ped by the Natio nal Institute o f Standards and Techno lo gy fo r the U.S. Department o f Energy Federal Energy Management Pro gram (FEMP). ECONPACK fo r Windo ws—An eco no mic analysis to o l develo ped by the U.S. Army Co rps o f Engineers in suppo rt o f DOD funding requests. Energy-10 —Co st estimating pro gram available fro m the Sustainable Buildings Industry Co uncil (SBIC). SuccessEstimato r Estimating and Co st Management System —Co st estimating to o l available fro m U.S. Co st. BACK TO TO P
APPLICAT ION PDFmyURL.com
LCCA can be applied to any capital investment decisio n in which relatively higher initial co sts are traded fo r reduced future co st o bligatio ns. It is particularly suitable fo r the evaluatio n o f building design alternatives that satisfy a required level o f building perfo rmance but may have different initial investment co sts, different o perating and maintenance and repair co sts, and po ssibly different lives. LCCA pro vides a significantly better assessment o f the lo ng-term co steffectiveness o f a pro ject than alternative eco no mic metho ds that fo cus o nly o n first co sts o r o n o perating-related co sts in the sho rt run.
LCCA was among the many design and analysis tools used to transform this turn of the century building located in downtown Tacoma, WA into an energy efficient showcase building. (Courtesy of Washington State Department of General Administration)
LCCA can be perfo rmed at vario us levels o f co mplexity. Its sco pe might vary fro m a "back-o fthe-envelo pe" study to a detailed analysis with tho ro ughly researched input data, supplementary measures o f eco no mic evaluatio n, co mplex uncertainty assessment, and extensive do cumentatio n. The extensiveness o f the effo rt sho uld be tailo red to the needs o f the pro ject.
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RELEVANT CODES AND STANDARDS 10 CFR 436 Subpart A—Federal Energy Management and Planning Pro grams, Metho do lo gy and Pro cedures fo r Life-Cycle Co st Analyses Circular No . A-9 4—Guidelines and Disco unt Rates fo r Benefit-Co st Analysis o f Federal Pro grams Energy Po licy Act o f 20 0 5 (PDF 1.9 MB, 550 p g s ) Executive Order 13423, "Strengthening Federal Enviro nmental, Energy, and Transpo rtatio n Management" Executive Order 13123—Greening the Go vernment thro ugh Efficient Energy Management DOE Guidance o n Life-Cycle Co st Analysis Required by Executive Order 13123 Facilities Standard for the Public Buildings Service, P100 (GSA)—Chapter 1.8 —Life-Cycle Co sting P-442 Eco no mic Analysis Handbo o k (NAVFAC) Standards on Building Economics, 5th ed. ASTM, 20 0 4. ASTM Sto ck #: BLDGEC9 9 , ISBN# 0 8 0 31-2714-6 . Sustainable Building Technical Manual (DOE/EPA) Tri-Services Memo randum o f Agreement (MOA) o n "Criteria/Standards fo r Eco no mic Analyses/Life-Cycle Co sting fo r MILCON Design" (19 9 1) PDFmyURL.com
LCCA Guidelines f or OMB Project s Office o f Management and Budget (OMB) Circular A-9 4 â&#x20AC;&#x201C; Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs, Octo ber 19 9 2 , applies to building-related benefitco st o r co st-effectiveness analyses o f federal pro grams o r po licies that are no t primarily co ncerned with energy o r water co nservatio n o r renewable energy pro jects. Appendix C o f Circular A-9 4, updated annually in February, pro vides the OMB disco unt rates.
LCCA Guidelines f or FEMP Project s FEMP has published life-cycle co sting rules and pro cedures in its Co de o f Federal Regulatio ns, 10 CFR 436 , Subpart A . These FEMP rules are co nsistent with OMB rules. They are to be fo llo wed by all federal agencies, unless specifically exempted, in evaluating the co steffectiveness o f po tential energy and water co nservatio n pro jects and renewable energy pro jects fo r federally o wned and leased buildings. NIST Handbook 135 Life-Cycle Costing for the Federal Energy Management Program explains and amplifies the LCC rules o f 10 CFR 436 A. The Annual Supplement to Handbo o k 135, Energy Price Indices and Discount Factors for Life-Cycle Cost Analysis, updated annually o n April 1, pro vides the FEMP disco unt rates. The same publicatio n co ntains tables o f disco unt facto rs fo r time perio ds up to 30 years, using either the OMB o r FEMP disco unt rate. The FEMP disco unt facto rs also include the mo st recent energy price escalatio n rates pro jected by the DOE Energy Info rmatio n Administratio n (EIA). The disco unt facto rs are embedded in BLCC5 and o ther federal LCC co mputer pro grams.
LCCA in t he Depart ment of Def ense (DOD) The Tri-Services Memo randum o f Agreement (MOA) o n "Criteria/Standards fo r Eco no mic Analyses/Life-Cycle Co sting fo r MILCON Design" (19 9 1) pro vides the guidelines fo r LCCA fo r Do D energy and no n-energy pro jects. These guidelines are co nsistent with FEMP and OMB guidelines. Ho wever, the MOA reco mmends (but do es no t require) that cash flo ws are disco unted fro m the middle o f each year rather than fro m the end o f each year as are cash flo ws o f FEMP and OMB pro jects. BACK TO TO P
ADDIT IONAL RESOURCES WBDG Design Objectives Co st-Effective Branch, Functio nal / Operatio nal , Pro ductive, Sustainable Products and Systems Federal Green Co nstructio n Guide fo r Specifiers PDFmyURL.com
Publicat ions Building Economics: Theory and Practice by Ro salie T. Ruegg and Haro ld E. Marshall. New Yo rk: Van No strand Reinho ld, 19 9 0 . Building Maintenance and Repair Cost Reference by Whitesto ne Research. 20 0 4. Energy Price Indices and Discount Factors for Life-Cycle Cost Analysis, Annual Supplement to Handbook 135 by Amy Rushing, Jo shua D. Kneifel and Barbara C. Lippiatt. NISTIR 8 53273-25. Gaithersburg, MD: Natio nal Institute o f Standards and Techno lo gy, May 20 10 . Also available fro m the DOE/FEMP Help Desk at 1-8 77-EERE-INF (1-8 77-337-346 3). Engineering Economy by G. J. Thuesen and W. J. Fabrycky. Prentice Hall, 19 9 3. ISBN 0 -1327749 1-7. GSA LEED® Cost Study GSA, 20 0 4. GSA LEED® Applications Guide GSA, 20 0 5. Life-Cycle Costing Manual for the Federal Energy Management Program by Sieglinde Fuller and S.R. Petersen. NIST Handbo o k 135. Natio nal Institute o f Standards and Techno lo gy, 19 9 5. Simplified Energy Design Economics by Haro ld E. Marshall and Ro salie T. Ruegg. NBS SP 544. Washingto n, DC: Natio nal Bureau o f Standards, January 19 8 0 .
Ot hers ASTM Internatio nal—Publishes standards that suppo rt LCCA. R. S. Means Co mpany—Offers co nstructio n co st databases. Sustainable Buildings Industry Co uncil (SBIC)—Offers wo rksho ps o n Designing Lo w-Energy Buildings that include instructio n in using Energy-10 so ftware. U.S. Army Co rps o f Engineers Life-Cycle Co st Mo dule U.S. Co st—Co nducts training wo rksho ps fo r SuccessEstimato r and Tri-Services Parametric Estimating System (TPES) mo dels several times each year. U.S. Department o f Energy (DOE) Office o f Federal Energy Management Pro grams (FEMP)—Co nducts wo rksho ps o n a variety o f to pics related to energy and water co nservatio n. BACK TO TO P
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