Press release - 8 July 2008
The first international standard for property life cycle costing has been adopted in the UK. Developed by industry and in consultation with 17 countries, it is expected to have a major impact on all future construction procurement - particularly major investment, PFI and PPP projects. It is anticipated that the standard will have an impact upon the design of new buildings through clients’ desire to set the right budgets and optimize their life cycle costs, from a whole life value and sustainable development perspective.
The international standard is accompanied by the publication of UK guidance on its practical application, published by BSI British Standards. The twin challenges of a financial slow down and increasing environmental considerations mean that calculating the true cost of a building and its all round sustainability are essential for industry. BS ISO 15686-5 Buildings and constructed assets – service life planning, Part 5: life cycle costing will be of invaluable assistance.
Published by the International Organization for Standardization and adopted in the UK by BSI British Standards, BS ISO15686-5 covers the basic principles and processes of life cycle costing, as well as defining terms and indicating how costing should be used in planning the long term performance and sustainability of buildings and other constructed assets. The new standard means that the life cycle costs of projects can be directly compared. As a result, more consideration will have to be given by industry to the life cycle costs associated with a new building or constructed asset rather than initial capital cost.
The accompanying UK publication from BSI British Standards and RICS’ Building Cost Information Service (BCIS), Standardized Method of Life Cycle Costing, provides a standard cost data structure for life cycle costing, aligned to the BCIS standard form of cost analysis. It also contains worked examples for how to undertake various forms of life cycle costing applicable to key stages of the UK construction industry procurement process.
An international committee convened by Kathryn Bourke of Faithful+Gould, produced BS ISO 15686-5 on life cycle costing and a BSI British Standards industry working group, convened by Andy Green, Director of Faithful+Gould and Joe Martin Executive Director of BCIS, produced the UK supplement to the ISO standard, Standardized Method of Life Cycle Costing.
Mike Low, Director BSI British Standards, says: “The publication of BS ISO 15686-5 is another clear indication of how standards can provide valuable tools to address key business issues. By developing a better understanding of life cycle costing through this standard, suppliers and clients will be able to understand far more about the total cost of ownership of buildings and other constructed assets.”
Joe Martin, BCIS Executive Director, says: “This new data structure for life cycle costs will facilitate the assessment of investments in sustainability and provide a significant improvement in the service available to clients. The need to deliver sustainable buildings means that we need to consider the future ramifications of current decisions. To ensure that these decisions are made in a rational way we need to calculate the life cycle cost. The information contained within the UK Standardized Method of Life Cycle Costing complements the BCIS Standard Form of Cost Analysis to provide a common basis for developing and reporting Life Cycle Cost plans alongside capital cost plans.”
Andy Green, director at Faithful+Gould and chair of the technical working group, says: “Having a standard for life cycle costing will help the QS profession shape future construction procurement. Maintaining the status quo is not an option. Therefore the standards should provide the catalyst for all construction cost consultants to make a radical difference and practically do more accurate, consistent and robust life cycle costing estimation and option appraisals. It will not be easy and we should not under estimate the cultural challenges involved. However, if the Government embraces the ISO standard and clients demand it, then it will raise the standard of life cycle costing and enable it to become widely used in practice’’.
About BSI Group
BSI British Standards is part of BSI Group, a global independent business services organization that inspires confidence and delivers assurance to customers with standards-based solutions. Originating as the world’s first national standards body, the Group has over 2,250 staff operating in over 100 countries through more than 50 global offices. The Group’s key offerings are:
• The development and sale of private, national and international standards and supporting information
• Second and third-party management systems assessment and certification
• Product testing and certification of services and products
• Performance management software solutions
• Training services in support of standards implementation and business best practice.
For further information please visit www.bsigroup.com
RICS (Royal Institution of Chartered Surveyors) is the mark of property professionalism worldwide. It covers all aspects of property, construction and associated environmental issues. RICS has 86,000 chartered members (FRICS and MRICS) and 55,000 members in other categories of membership (TechRICS, trainees and students) globally. It represents, regulates and promotes the work of these property professionals throughout 146 countries. RICS is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury). Visit www.rics.org/press
BCIS (Building Cost Information Service) publishes information on the capital cost of new and refurbished work collected from Chartered Quantity Surveyors and others working in the building industry. BCIS is a trading name of RICS and was established in 1962 to exchange detailed building price information.
Faithful+Gould is a member of the Atkins Group of companies. It is one of the world's largest project and cost management consultancies. Faithful+Gould employs over 2,000 staff with a turnover in excess of £160 million and has an expanding office base worldwide.