Life-cycle costing (LCC) as a contribution to sustainable construction: towards a common methodology
Life-cycle Costing (LCC) is a technique used to estimate the total cost of ownership. It allows comparative cost assessments to be made over a specific period of time, taking into account relevant economic factors both in terms of initial capital costs and future operational and asset replacement cost.
There is no specific legislation in Europe requiring LCC to be taken into account in procurement procedures, but the Economically Most Advantageous Tender (EMAT) mechanism introduces it as an option in public procurement directives. A number of different guidance papers have been produced in the Member States for use by government departments procuring construction works and services. In the private sector, few investors have commissioned construction works on a LCC basis so far.
Davis Langdon carried out during 2006-2007 an analysis and evaluation of the different national approaches to LCC and developed an EU-wide methodological framework for the estimation of life cycle costs for buildings and constructed assets. As part of their work, they elaborated guidance on how to make cost estimates at each stage of a construction project, from the initial appraisal to the completion and post-occupation phases, including the disposal of the asset. A number of concrete case studies were undertaken to illustrate the practical implementation of this EU-wide approach.
The results of this work are intended to support contracting authorities, private investors and practitioners in the procurement of large-scale sustainable construction projects. It should be considered as complementary guidance to ISO 15686.
This work was finalised in May 2007.
As a follow up, Davis Langdon defined a concept for a promotional campaign including a training framework.