National foreword

This British Standard is the UK implementation of ISO 15686‑5:2017. It supersedes BS ISO 15686‑5:2008, which is withdrawn.

The UK participation in its preparation was entrusted to Technical Committee CB/101, Service Life Planning.

A list of organizations represented on this committee can be obtained on request to its secretary.

This publication does not purport to include all the necessary provisions of a contract. Users are responsible for its correct application.

Compliance with a British Standard cannot confer immunity from legal obligations.

This British Standard was published under the authority of the Standards Policy and Strategy Committee on 30 August 2017.

Foreword

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The procedures used to develop this document and those intended for its further maintenance are described in the ISO/IEC Directives, Part 1. In particular the different approval criteria needed for the different types of ISO documents should be noted. This document was drafted in accordance with the editorial rules of the ISO/IEC Directives, Part 2 (see www.iso.org/directives).

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Any trade name used in this document is information given for the convenience of users and does not constitute an endorsement.

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This document was prepared by Technical Committee ISO/TC 59, Buildings and civil engineering works, Subcommittee SC 14, Design life.

This second edition cancels and replaces the first edition (ISO 15686‑5:2008), which has been technically revised.

The main changes compared to the previous edition are as follows:

several clauses have been technically revised to clarify the distinction between normative content and guidance text;
Annexes C and D have been technically revised to make them clearer;
the bibliography has been updated.

A list of all parts in the ISO 15686 series can be found on the ISO website.

Introduction

Objectives

The key objectives of this document are to:

establish clear terminology and a common methodology for life-cycle costing (LCC);
enable the practical use of LCC so that it becomes widely used in the construction industry;
enable the application of LCC techniques and methodology for a wide range of procurement methods;
help to improve decision making and evaluation processes at relevant stages of any project;
address concerns over uncertainties and risks and improve the confidence in LCC forecasting;
make the LCC and the underlying assumptions more transparent and robust;
set out the guiding principles, instructions and definitions for different forms of LCC and reporting;
provide the framework for consistent LCC predictions and performance assessment, which facilitates more robust levels of comparative analysis and cost benchmarking;
provide a common basis for setting LCC targets during design and construction, against which actual cost performance can be tracked and assessed over the asset life span;
provide guidance on when to undertake LCC, to what level and what cost headings are appropriate for consideration;
help unlock the real value of effectively doing LCC in construction by using service life planning;
clarify the differences between life-cycle costing and whole-life costing (WLC);
provide a generic menu of costs for LCC/WLC compatible with and customizable for specific national or international cost codes and data-structure conventions;
provide cross-references to guidance on associated activities within the other parts of ISO 15686.

Life-cycle costing, service life planning and other performance requirements

Life-cycle costing is a valuable technique that 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 client's performance requirements. Analyses can necessitate the use of other parts of ISO 15686 and current economic data from clients and the construction industry (see Figure 1). It is possible to use this document without extensive reference to others, although a number of the terms and techniques described are covered in more detail in the other parts. Where applicable, this is referenced in the text. The other parts of ISO 15686 that are most relevant for life-cycle costing are ISO 15686‑1 and ISO 15686‑3.

The Bibliography includes some informative national standards and guidance that provide more detail on aspects such as levels of cost analysis, examples of analysis and application of the principles for practical projects.

Who can use this document?

The provisions of this document 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 can make traditional investment appraisals more challenging. They are also relevant to the work of specialists providing information on service life and on environmental performance.

The period of interest of the client and the contractual responsibilities/liabilities for meeting costs tend to determine the requirements for life-cycle costing.

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.

1 Scope

This document provides requirements and guidelines for performing life-cycle cost (LCC) analyses of buildings and constructed assets and their parts, whether new or existing.

NOTE 1 Life-cycle costing takes into account cost or cash flows, i.e. relevant costs (and income and externalities if included in the agreed scope) arising from acquisition through operation to disposal.

NOTE 2 Life-cycle costing typically includes a comparison between alternatives or an estimate of future costs at portfolio, project or component level. Life-cycle costing is performed over an agreed period of analysis, clearly identifying whether the analysis is for only part of or for the entire life cycle of the constructed asset.

2 Normative references

3 Terms and definitions

3.1 Costs

3.2 Analysis/measures

3.3 Elements of calculation

3.4 Other terms

4 Principles of life-cycle costing

4.1 Purpose and scope of life-cycle costing

4.2 Costs to include in LCC analysis

4.3 Typical analysis at different stages of the life cycle

4.4 Analysis based on client requirements and the intended use of the results

4.5 Data for analysis at different stages of the project life cycle

4.6 Cost variables

4.7 Calculating cost variables and the form of future costs analysis

4.8 Discounting costs to present values

4.9 Approval and validation

4.10 Reporting LCC analysis

5 Setting the scope for LCC analysis

5.1 Relevance and importance of setting parameters for the use of life-cycle costing

5.2 Service life, life cycle and design life

5.3 Period of analysis

5.4 Cost variables

6 WLC variables used in some investment appraisals

6.1 General

6.2 Externalities

6.3 Costs related to environmental impacts

6.4 Social costs and benefits

6.5 Contribution of the construction works to sustainability and sustainable development

6.6 Intangibles — Impact on business reputation, functional efficiency, etc.

6.7 Future income streams

6.8 Financing costs

7 Decision variables — Basis of calculating costs

7.1 Real costs

7.2 Nominal costs

7.3 Discounted costs

7.4 Present value

8 Uncertainty and risks

8.1 General

8.2 Identification of the causes of uncertainty and risks

8.3 Monte Carlo analysis and confidence modelling

8.4 Sensitivity analysis and modelling the effects of changing key assumptions

9 Reporting

9.1 LCC analysis — Presenting the results and supporting information

9.2 Reporting costs

9.3 Approvals and audit trail

Bibliography

BS ISO 15686-5:2017

Buildings and constructed assets. Service life planning - Life-cycle costing

Current

Published:

31 Aug 2017