Planned Replacement or Major Renovation - Effective Building Maintenance: Protection of Capital Assets - page 59

sions—first to make improvements over the original design (e.g., bet-
ter quality, longer design service life, lower maintenance requirements,
etc.) and, second, to select these replacement or renovation components
on the basis of lowest life cycle cost rather than simply lowest first cost.
The concept of life-cycle costing is not new, and the methods and
applications presented in this text are nothing more than more formal
approaches to a process that is already familiar to most individuals:
comparative shopping. When you go to buy a new car, you look first
at the price. Then, you check the gas mileage rating so that you can
estimate operating cost. Next, you read up on the repair history of this
model so you will have some idea of the maintenance costs. You look
into financing so that the cost of borrowed money is considered. You
check into resale values and, thus, estimate the value of the car in future
years. And, finally, you decide on how many years you plan to keep the
car and thus establish, for you, its economic life. All of this is factored
into your estimate of the total owning and operating cost for your new
car over the period you plan to keep it.
Youhavejustperformedalifecyclecostanalysis! The concept is very
straightforward and is something with which you are already familiar.
To determine the life cycle cost of each alternative approach to re-
placing or renovating a building component, specific data about each po-
tential alternative must be collected:
Capital Cost
A fairly detailed cost estimate must be developed based on vendor
and contractor input. This estimate must include, as applicable, a number
of costs that are often overlooked:
1. Special equipment and/or rigging.
2. Demolition.
3. Additional architectural and/or structural requirements associated
with mechanical alternatives
4. Additional mechanical or electrical requirements associated with
architectural alternatives.
5. Temporary components, means, etc. to allow occupancy or utiliza-
tion during the construction period.
Other costs that are included in the capital requirement are design
fees, which may increase or decrease as a function of the selected alterna-