Life Cycle Costing
It has long been recognised that it is unsatisfactory to evaluate the costs of a project on the basis of its initial cost alone. What appears to be a cheaper constructed facility may in the long term be far more expensive than one with much higher initial costs.
Life cycle costing is an evaluation technique that enables comparative assessment of the performance of a project or a constructed facility over its operating life. The life cycle costing assessment process takes into account not only the characteristics of the constructed facility, reusability, sustainability, maintainability and obsolescence, but also the initial capital cost, operational cost, maintenance cost, residual and disposal costs. In this way, both the economic and non-economic performances of the constructed facility can be assessed.
The quantity surveyors are well qualified to carry out the life cycle costing analysis. The objectives of life cycle costing are to consider the impact of all costs rather than only the initial capital costs, to enable alternative constructed facilities to be more effectively evaluated, and to assist the effective management of a completed facility. The building clients can thus obtain the best value for their money.