Recognise that there will be occasions when client knowledge or strategic considerations may impact on Life Cycle Cost model information.
The use of Life Cycle Costing models introduces a further discipline into the Project Planning and Management role - that of interpreting the information produced by the model to consider how this might best be used in the particular situation. For example, models often show considerable expenditure required in particular years - this might not suit the organisation of the works involved, which would need to be programmed in a different way.
Examples of how individual housing organisations in the UK have developed their Life Cycle Costing approach
Hanover Housing Association has developed a new strategic alliance with MJ Gleeson, incorporating whole life costing into their mutual Key Performance Indicators and benchmarking. They are also putting into effect an energy efficiency policy focusing on whole life costs.
Raglan HA: " Life Cycle Costing is an art, not a science. Skill is required to model different scenarios"
Optima Community Association, in its Constructing Excellence Demonstration Project, specified PVC-u pivot ribbon windows on the multi-storey blocks of flats. The key specialist supplier was engaged during the pre-construction phase and jointly value-engineered the design and performance specification. The results were as follows:
Hanover HA work closely with a particular kitchen manufacturer - from planning stages and tenant consultation through to their after care service. They are not the cheapest but their quality has been found to be the best and they have built up good relations with one another.
Raglan HA specify doors from a specialist manufacturer on their schemes.They are very high specification steel door sets costing approx. £750 - £900 per door. Cheaper doors have, in the past,been fitted in the same scheme (costing about £400 per door). These failed after 8 years. The new type of doors are expected to last up to 40 years and therefore cost less over the life of the property.
Acis Group Ltd, in its Constructing Excellence Demonstration Project - Void Repair Contract/Mobile working in Lincolnshire - has found that the use of whole life costing has been valuable following the completion of their Stock Condition Survey, focussing on three different specifications: Internal, External and Energy use and covering 3800 properties in one year with a specialist team of in house surveyors.
Using specialist software they gave each element a remaining life and replacement cost. For example, kitchen replacement - whole life 25yrs, cost to replace £4000. From the reports produced, they can model the Planned Maintenance Programme and so smooth out the peaks and troughs in line with budget availability.
"As a newly formed stock transfer our records were poor, but now we can target effectively based on remaining life."