Depending on their design, the type of construction, and the materials used, buildings perform differently over time.
There are several alternatives for methods and designs when it comes to construction projects. In most cases, each method provides the same results. However, the total cost of owning a facility or running the construction project may be different for each method and design.
Hence why conducting a life-cycle cost analysis or LCCA is so important. This analysis allows you to evaluate your project’s economic performance throughout its lifetime; therefore, enabling you to make a more informed decision when choosing the right method and design for a construction project.
While starting a construction project, every owner aims to maximize the value of the process. That is why engineers and project managers emphasize the importance of performing LCCA during the value engineering process.
During the value engineering process, project owners sometimes focus more on the short-term reduction of costs instead of long-term costs. It is imperative to understand that even though this approach will make the initial construction process less expensive, it might end up adding more expenses in the shape of repairs during the lifetime of the building.
As a premium commercial construction contractor in Edmonton, we believe it is up to us to clear up some of the concepts related to LCCA to help project owners make better and more informed decisions.
What Is Life-Cycle Cost Analysis?
Before moving on to the importance of life-cycle cost analysis, let’s first take a look at what it is. The LCCA is defined as a method used to assess the total cost of running a project throughout its life cycle. This includes the building, building material, and the equipment that will be needed throughout the useful life of the building.
In addition to taking into account the obvious costs, the LCCA also focuses on operation and maintenance costs. Hence, the LCCA helps in highlighting measures that encourage cost-effectiveness.
For example, the installation of a high-performance HVAC or glazing system seems like an obvious expense as it will, without a doubt, increase the initial cost. However, if you perform LCCA, you will see that this decision can extensively reduce operating and maintenance costs in the future.
Cost And Value Optimization
Life-cycle cost analysis is an integral part of value engineering. As mentioned, it helps in determining the short and long-term value of a project by looking at the bigger picture.
During the value engineering process, the engineers as well as the designers not only work to optimize the cost of the project but also work on increasing the overall value of the project to make the most out of the money being spent.
Whether you are renovating a building or planning on constructing a new commercial space, value engineering is an essential step. In this part of the blog, we have explained how LCCA helps optimize the value of the project during the value engineering process.
The initial cost of the project, including the purchasing costs and installation expenses, is usually considered the most influential and most budget-related decisions are based on it.
However, these initial costs are just the tip of the iceberg. Along with these, it is important to consider the operating costs, maintenance costs, and replacement costs. All of these costs have to be factored into the value engineering process to develop a project that can provide the highest value for its money.
You might be tempted to swap the carpet for a low-quality alternative or use cheap tiles instead of ones that come with a lifetime warranty. LCCA helps you analyze how this approach can cost you more money in the long run.
Thus, life-cycle cost analysis is a major part of the planning phase of any construction project.
BelVan construction is a premium construction company in Alberta, Saskatchewan, & BC. We are qualified commercial general contractors based in Edmonton. We have offered various business experts general contracting, project design-build, pre-construction consulting, and construction management services since 2011.
Right from the start, our primary focus has been on providing our customers with premium yet affordable construction and renovation services in a respectful, responsible, and reliable manner. In each of our retail construction and renovation projects, our goal has been to make the clients’ needs our top priority with a commitment to providing excellent all-around service.
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