Level 2 - Elsley House LCC

Question 1

What the difference between Whole Life Costing and LCC?

Answer 1

LCC costs are construction, O&M and End of life costs

WLC include non-construction costs like land acquisition and income from the building and also encompass LCCs

Question 2

What is the purpose of LCC?

Answer 2

So the client understands future operational and maintenance costs (as well as construction)

Also to achieve BREEAM credits and consider sustainable methodologies at design stages

Question 3

How did you assess and report life cycle costs for Elsley house?

Answer 3

I used a combination of BCIS and manufacturer guidance on life expectancies to calculate lifespans of the components and materials

Information on typical operation costs were from a JLL publication on average building management and operational costs

Costs where then calculated using a net present value formula to calculate the present day cost to the client

Question 4

You prepared a LCC report for drury lane over a 60 year period, if you priced at present day costs how did you deal with the changes in values over that period?

Answer 4

You need to calculate Net present value.

Net present value works out a compounding rate that the £ loses value (ie houses 20 years ago were much less than they are today)

Question 5

What is NPV?

Answer 5

Net Present Value are future costs that have been discounted to bring them to a present day value – Gov green book
Is a compounding rate in which the £ loses value
It factors in things like general inflation in the market but also that the cost of things go down

Question 6

What is the purpose of NPV?

Answer 6

Shows the clients the funds they will need at the present date rather than inflated costs

Question 7

How did you calculate the NPV?

Answer 7

Using calculations / guidance in BS/ISO Standard for LCC
Present day costs were inflated and then a discount factor of 3.5% was applied as recommended in ‘the green book: appraisal and evaluation in central government

Question 8

How did you calculate the LCC’s you prepared?

Answer 8

Manufacturers guidance on maintenance and life expectancy

• Information from BCIS and BRE
• Construction cost plan
• Facilities requirements
• JLL published OSCARS – Office Service Charge Analysis Reports

Question 9

What were some of the elements you advised on in preparing LCC?

Answer 9

Split into:

1. Major repairs and replacement
2. Refurbishment & Redecoartions
3. Maintenance
4. Operation (JLL OSCARS)
5. Cleaning
6. Utilities

Question 10

What guidance is available when when preparing the LCC?

Answer 10

• ISO – Standardised method of life cycle costing for construction procurement
• RICS – Life Cycle Costing
• NRM 3
• ICMS

Question 11

What were some of the assumptions made in your LCC?

Answer 11

• Internal decorations every 10 years
• Cleaners employers throughout the year
• Windows cleaned every 3 months
• External wall major repairs every 30 years
• Major repairs to services every 15 years

Question 12

What are the benefits of LCC to the client?

Answer 12

Can assess initial capital costs and future running costs
Assess performance of materials and when they will need to be repairs or replaced
Encourages discussions about durability / sustainability of materials
Ensure best value for money throughout the life cycle of the project rather than just construction costs