BS ISO 15686-5:2008"Life cycle costing"

The first international standard for property life cycle costing, BS ISO 15686-5, 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 and Private Finance Initiative (PFI) and Public-Private partnership (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.

Life cycle costing is a valuable technique which is used for predicting and assessing the cost performance of constructed assets. Life cycle costing is one form of analysis for determining whether a project meets the clients’ performance requirements.

Who will use this standard on life cycle costing?
The provisions of this Part of ISO 15686 are intended primarily for:

• Procurers of constructed assets, with an interest in long term ownership – these may be public or private, or lessees with a reasonably long period of interest in the property and/or responsibility for maintenance and /or operational costs
• Designers
• Constructors and their specialist suppliers of materials and components
• Facility operators (to help them input more effectively into the design process)
• Cost consultants and other specialists

The provisions in this document are particularly relevant to public clients, where the lack of any projected income from some constructed assets may make traditional investment appraisals more challenging. They are also relevant to the work of specialists providing information on service life and on environmental performance.

Life cycle costing is relevant at portfolio/estate management, constructed asset and facility management levels, primarily to inform decision making and for comparing alternatives. Life cycle costing allows consistent comparisons to be performed between alternatives with different cash flows and different time frames. The analysis takes into account relevant factors from throughout the service life, with regard to the client’s specified brief and the project-specific service life performance requirements.