February 2008
  
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Life Cycle Costing (LCC) calculator
The Continental Automated Building Association (CABA) and RSMeans*, a Reed Construction Data company, announce the release of their online, interactive, Life Cycle Costing (LCC) calculator for the commercial industry.

  Thomas (Thom) Keel
Member CABA Intelligent & Integrated Building Council
Chair Life Cycle Costing Task Force
thomas.keel@coa.gatech.edu

Introduction
The Continental Automated Building Association (CABA) and RSMeans*, a Reed Construction Data company, announce the release of their online, interactive, Life Cycle Costing (LCC) calculator for the commercial industry.

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The situation
When speaking with a prospective building owner about the advantages of an intelligent and integrated building (IIB), how often have they told you that while intelligent and integrated buildings make sense, “I am in business to make money, so I have to watch my costs.” “It (IIB) sounds great, but what is it going to cost me?” “Remember, in business, ‘The bottom line is the bottom line!’”

The background
Twenty years ago, studies told that buildings that do not incorporate technology (i.e., building automation) would become almost unmarketable, and a drain on a firm’s bottom line. Some firms did not heed that realistic warning and are now paying for intelligent amenities they must have to remain competitive.      

The solution: Life Cycle Costing (LCC)
It is true that in the early days of building automation, intelligent technology added to the cost of construction, but today, with these systems, the buildings do not cost more to construct. In addition to enhancing the value of the property, when measured by life cycle costs, these intelligent buildings cost less, even for the firm that builds, fills, and sells commercial real estate.

Through the CABA councils and committees, ongoing studies and research demonstrate the cost advantage of an intelligent and integrated building. Now, building owners, developers, architects, engineers, and contractors have this independent, third-party source to prove these claims on their own building projects, with the introduction of  the CABA/RSMeans online, life cycle costing, calculator.

What is LCC?
Life Cycle Costing (LCC) is a science-based measurement of a project’s impact throughout its life. In the macro view, LCC is an amalgamation of first costs, training costs, operation and maintenance (O&M) costs, service agreement costs, upgrade/retrofit costs, and may include disposal/deconstruction costs. For it is a fact that the building owner incurs the cost of ownership throughout the life of owning the asset. Cost does not end at the completion of construction. In fact, normally only 25% of a building’s costs are incurred during its construction, whereas the remaining 75% of the costs are incurred during the use of the building.  LCC is a structured approach that addresses all the elements of cost. LCC analysis is a management decision-making tool to assist when there is a choice of disparate projects.

LCC gives the involved parties a realistic understanding on their true return on their investment (ROI) and return on their equity (ROE). It is significantly useful for evaluating one or several projects, for LCC can level the playing field, allowing those who control projects to evaluate divergent projects, with equality.

What are Life Cycle Costing (LCC) benefits?
LCC brings benefit to the owner, the architect, the engineer, the facility manager, and the building occupants.

Reliable Controls The intelligent building lifecycle calculator is a web-based tool allowing the user to choose, evaluate, view, and save customized reports for return on investment of intelligent buildings.  The tool includes the RSMeans Square Foot Models for initial construction costs, RSMeans Facilities Maintenance & Repair, Preventative Maintenance & Repair, for operational costs, as well as building automation controls in Means Assembly databases.  The Department of Energy (DOE) usage guides are also provided to calculate energy costs in buildings.

The final calculated result provides a report outlining initial assembly costs, and a ten-year cost analysis for ROI applicable to intelligent, fully integrated building automation controls.  The purpose of the online calculator is to provide a comprehensive, user-friendly tool to allow owners, facility managers, architects, engineers, building contractors, and others closely related to construction to evaluate, model, and assess intelligent building automation systems and their impact on life cycle costs of proposed and existing building inventory.

The CABA/RSMeans LCC tool draws from the vast RSMeans database of building square-foot costs. RSMeans collects cradle-to-grave data of all United States building activities.

How do I use this online LCC calculator?

Any user can go to the following web link: www.caba.org/lifecycle.

Check on location of interest: 

1.  Choose a typical RSMeans building model.
2.  For best comparative results, choose varying types of intelligent technologies.
            a. Current standard of intelligent technology practice.
            b. Select various intelligent building component categories
            c. All high profile intelligent building component categories.
3. Select report and print.

LCC Constraints (where you come in)

1.      Data collection.
Even though RSMeans has a vast database of square foot building costs, you are needed to identify projects with substantial integrated technology systems. To participate in the beta test, there was a form provided for organizations that would like to have their buildings included and evaluated by RS means.  The goal of the beta test is to receive feedback from the industry about features, such as ease of use, data requirements, and price value.

      2.      Resources.
Undertaking an LCC analysis takes considerable labor resources. CABA/RSMeans is calling on its industry supporters for their knowledgeable, valuable input as this tool moves from beta to operational. Therefore, we implore that everyone considers trying the life cycle costing calculator and tell us what more is needed to make this online, software tool better meet their building needs.

For questions, contact Tim Duggan and RSMeans, 781.422.5105, or e-mail: tim.duggan@reedbusiness.com.


*RSMeans is North America's leading supplier of construction cost information. A product line of Reed Construction Data, RSMeans provides accurate and up-to-date cost information that helps owners, developers, architects, engineers, contractors, and others to carefully and precisely project and control the cost of both new building construction and renovation projects.

In addition to its collection of annual construction cost data books, RSMeans also offers construction estimating and facilities management seminars, electronic cost databases and software, reference books, and consulting services. RSMeans also has a number of product solutions for construction professionals who focus on construction in Canada, Mexico, and Russia.


About the Author

Thomas (Thom) Keel, faculty of The Georgia Tech, Building Construction Program (http://www.bcprogram.com). Since leaving the  industry and investing his time, talent, and energy in the next generation of building construction professionals, Thom’s mission is to integrate his more than 35 years of industry experience into his teaching, while remaining a life-long learner himself.

Thom is a member of the CABA Intelligent & Integrated Building Council, acting as chair for the Life Cycle Costing task force. Thom may be reached at thomas.keel@coa.gatech.edu

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