Failing to account for whole life costing can result in clients incurring additional expenditure on their projects, both at build, installation and on an ongoing basis. However, by taking additional costs including running and life cycle costs into account early on, savvy specifiers can help clients to avoid spiralling building and maintenance costs and to achieve greater efficiencies.
Since the tragic case of Grenfell Tower, whole life costing has become an important topic. Using systems like BIM, designers and developers are now able to outline the long-term benefits of selecting better suited, quality products that take into account the whole life cycle and running costs of the product from the outset, reducing the need for upgrades later in the build or operation phase.
Even those without access to this software are now starting to take a more holistic view on the building, including looking at elements such as energy efficiency, maintenance costs and warranties.
For many years developers have attempted to get round rising costs on their projects by specifying products which are cheaper to acquire. However, without looking at the longer running and maintenance costs this can cause problems for the building’s operator or occupants further down the line.
Historically, rising and over budget building projects have been offset by clawing costs savings back elsewhere. A 1998 government study showed that 75 per cent of building projects in the UK were over budget by up to 50 per cent and, while the financial climate has changed considerably since then, there are still numerous examples of projects which have struggled to meet initial cost estimates.
Specifiers are under increasing pressure to demonstrate the efficiency of their selections – to clients and investors – especially when justifying a higher cost purchase choice. However there can sometimes be rationalisations for investment beyond initial purchase outlay. A cheaper outlay may, for instance, increase the cost burden on a building’s management team after the workmen have left; or have shorter (or no) warrantees or a shorter life cycle requiring replacement earlier. Equally, should a cheaper, less environmentally friendly product be specified there may be greater disposal costs.
There is a school of thought, as argued at the BESA forum that suggests building services engineers are brought into the equation way too late. Over 20 per cent of construction costs are down to M&E services, according to consultancy firm Davis Langdon, yet specialist contractors are often not brought into the process until the later stages. This cannot be conducive to creating a building that will operate efficiently and effectively once the last of the builders have left the site.
When it comes to whole-life costing, the price of an item can be divided into three categories: acquisition, running and disposal costs. By obtaining a full understanding of each of these before committing to a purchase, architects and specifiers can guard against spiralling fees for their clients as a product ages. A fuller understanding can also help to build a business case/justify initial investment in better products over time.
Take for example, running costs. Significant savings can be realised in ongoing maintenance and early replacements as well as efficiencies in running costs by spending a little more at the outset. For example, Low-H20 content radiators such as those used in Jaga’s ranges can see a reduction on heating costs of between 5-16%.
And there is more to factor in than just the costs of heating a building. At Jaga we consider the cradle to cradle cost of the product – looking at the cost of the parts on the environment, the sustainability of its production, recycling and reusing parts.
While the initial investment in one of these products may be slightly higher compared to traditional steel panel radiators, a substantial long-term saving should be visible due to the energy efficient nature of this product. This teamed with a 30-year warranty on the heat exchanger and the associated sustainability benefits provides peace of mind and a sound financial investment.
Meanwhile, by considering the safety and reliability aspects of purchasing a slightly more expensive, yet more efficient, product at the outset the integrity of the building and safety of its occupants can be protected.
Technologies such as BIM can be used to provide details on the financial ramifications of purchasing a specific product. This allows more detail than ever before when it comes to whole life costing, and offers an analysis of the funds it will take to run each item within a building. It can also demonstrate how every component will affect a building’s operation, highlighting the environmental credentials of each individual product.
Many projects are already being completed using Level 2 BIM and this is only set to increase over the coming months and years as the technology becomes more widespread.
Continuing use of these technologies and a holistic view of the project lifecycle will help to ensure that the industry is best placed to analyse the full costs of specifying a product, and that architects, specifiers and building managers are able to assess how requirements for budget and quality are met beyond traditional one off purchase decisions.
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