Whole Life Costing in Practice

Whole Life Costing in Practice – full report

Summary

Whole life costing is changing the approach to design, procurement, construction and facilities management and delivering major benefits.

Many public and private sector clients now procure on cost of ownership, not capital cost. Recent initiatives such as Rethinking Construction, Achieving Excellence and the drive for ‘Egan compliance’ among many housing associations demonstrate this trend. PFI and PPP also demand identification of whole life costs in order to prepare detailed financial and risk management plans for projects.

Establishing the cost of ownership of facilities is rarely straightforward. Performance and durability of components are inadequately considered and maintenance and operating costs rarely forecast. However, for every unit of capital cost, 5 units are spent on maintenance, and 200 on staffing the business activity. Savings in whole life costs can thus be dramatic over the operating life of the asset.

This workshop examined the impact of whole life costing in different areas of the industry with emphasis on its use in practice. Presentations illustrated how it benefits clients and the supply chain and how operational issues associated with completed facilities are used to inform the development of design and construction. Specific examples were presented, drawn from projects from a range of construction industry sectors including social housing, education and health.

Primary author(s): Peter Mayer - BPG, Ed Bartlett - Cyril Sweett, Muthena Alisa - Taylor Woodrow, David MacDonald - HBG Facilities Management Ltd
Source: Construction Productivity Network ( CPN )
In conjunction with KIBT 19 February 2004  

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