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Tony Gale
Construction & Asset Management Programme
SW RIEP
WHOLE LIFE COSTING & WHOLE LIFE VALUE
for PROPERTY CONSTRUCTION
What’s the big deal?
• 1 : 5 : 200
• Sustainability
• Outcomes focus
• CPA / CAA new emphasis
DEFINITIONS
Whole Life Cost – “the capital cost of a project and all relevant future costs”
Whole Life Value – extends the definition to include reference to the value / quality aspects specific to the project
Whole Life Cost – “the capital cost of a project and all relevant future costs”
• “Capital Cost” – OK, but notoriously fluid
• “All relevant future costs”
– ALL– RELEVANT– FUTURE
“all”
• 1 = Construction cost
• 5 = Lifetime operational costs
• 200 = Cost of the service operating from the property
1 : 5 : 200
“all relevant lifetime operating costs”
• FM - maintenance, repairs, utilities, cleaning, insurance, caretaking and security
• but what about catering, laundry, IT provision, photocopying, mail handling and other office services?
“future”
• For how long?
• 25 years?
• 60 years? (BREEAM)• 10 years? (“realistic horizon”
for calculating discount rates?)
…and your evidence for that is?
• How to get sound data for running costs
• How to model it to different options
• How to demonstrate “whatactually happened”
All Pull Together
• Standard Model
• Benchmarking
• Networking
• SCQS
• coordinated by SW RIEP
• ditto
All Pull Together
• CAPEX and OPEX captured for each project (including rejected options)
• Comparison available at key stages (Commit to Invest, Commit to Construct, Available for Use) – and “in use”
• Prediction vs. reality
Whole Life
VALUE
VALUE =FUNCTION_____________________
COST
Whole Life Value
VALUE =FUNCTION_____________________
COST
WHOLE LIFE
WHOLE LIFE
WHOLE LIFE
But what about
this bit?
We know about this
bit….
VALUE =FUNCTION_____________________
COST
WHOLE LIFE
WHOLE LIFE
WHOLE LIFE
To maximise value…
bigger
smaller
Whole Life
VALUEWill I recognise it when I see
it?
It’s all about OUTCOMES
– how do we demonstrate the contribution made by property to service / corporate goals?
– how can we determine how different development options stack up?
Values and Outcomes
• Value Trees
– Dorset CC work with CYPS
• “Every Child Matters” themes
• weighted by client
• mapped against design elements
DCSF “Every Child Matters”– Be Healthy
– Enjoy & Achieve
– Stay Safe
– Achieve Economic Wellbeing
– Make a Positive Contribution
Not “Lost in Translation”
• Translate “Every Child Matters” objectives into an outcome specification
• e.g. “Be Healthy” relates to Space requirements, Comfort
• Comfort requirements break down into Light, Heat, Ventilation, Cleanliness,Colour
Iterative Process!
Use it:-
• to clarify thinking within the project team
• to inform feasibilities
• to compare options
• to guide design development
• To generate a score for FUNCTION
…back to the formula
VALUE =FUNCTION_____________________
COST
WHOLE LIFE
WHOLE LIFE
WHOLE LIFE
But what about
this bit?
We know about this
bit….
And this bit
• Work in Progress!
• To be developed with pilot projects
• Potential partner organisations include SCQS, IPF, COPROP
Contact details
• Tony GaleTony Gale
• Construction & Asset Management Construction & Asset Management Programme (SW RIEP)Programme (SW RIEP)
• 01363-77610801363-776108
