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ASTM E917-02

(Practice)

Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems

Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems

SCOPE
1.1 This practice establishes a procedure for evaluating the life-cycle cost (LCC) of a building or building system and comparing the LCCs of alternative building designs or systems that satisfy the same functional requirements.
1.2 The LCC method measures, in present-value or annual-value terms, the sum of all relevant costs associated with owning and operating a building or building system over a specified time period.
1.3 The basic premise of the LCC method is that to an investor or decision maker all costs arising from an investment decision are potentially important to that decision, including future as well as present costs. Applied to buildings or building systems, the LCC encompasses all relevant costs over a designated study period, including the costs of designing, purchasing/leasing, constructing/installing, operating, maintaining, repairing, replacing, and disposing of a particular building design or system.

General Information

Status
Historical
Publication Date
09-Oct-2002
ICS
91.010.20 - Contractual aspects
Technical Committee
E06 - Performance of Buildings
Drafting Committee
E06.81 - Building Economics
Current Stage
Ref Project

Relations

Replaces
ASTM E917-99 - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
Effective Date
10-Oct-2002
Replaced By
ASTM E917-05 - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
Effective Date
01-Oct-2005
Referred By
ASTM E2506-15(2020)e1 - Standard Guide for Developing a Cost-Effective Risk Mitigation Plan for New and Existing Constructed Facilities
Effective Date
10-Oct-2002
Referred By
ASTM E2252-22 - Standard Practice for Selection of Lead Hazard Reduction Methods for Identified Risks in Residential Housing or Child Occupied Facilities
Effective Date
10-Oct-2002
Referred By
ASTM E2150-17 - Standard Classification for Life-Cycle Environmental Work Elements—Environmental Cost Element Structure
Effective Date
10-Oct-2002
Referred By
ASTM E1185-15(2020)e1 - Standard Guide for Selecting Economic Methods for Evaluating Investments in Buildings and Building Systems
Effective Date
10-Oct-2002
Referred By
ASTM E2103/E2103M-19 - Standard Classification for Bridge Elements—UNIFORMAT II
Effective Date
10-Oct-2002
Referred By
ASTM E2637-17 - Standard Guide for Utilizing the Environmental Cost Element Structure Presented by Classification <astmref design="E2150"/>
Effective Date
10-Oct-2002
Referred By
ASTM E2166-16(2023) - Standard Practice for Organizing and Managing Building Data
Effective Date
10-Oct-2002
Referred By
ASTM E1699-14(2020) - Standard Practice for Performing Value Engineering (VE)/Value Analysis (VA) of Projects, Products and Processes
Effective Date
10-Oct-2002
Referred By
ASTM E2432-23 - Standard Guide for General Principles of Sustainability Relative to the Built Environment
Effective Date
10-Oct-2002
Referred By
ASTM E1121-15(2020)e1 - Standard Practice for Measuring Payback for Investments in Buildings and Building Systems
Effective Date
10-Oct-2002
Referred By
ASTM E2204-15(2020)e1 - Standard Guide for Summarizing the Economic Impacts of Building-Related Projects
Effective Date
10-Oct-2002
Referred By
ASTM E1557-09(2020)e1 - Standard Classification for Building Elements and Related Sitework&#x2014;UNIFORMAT II
Effective Date
10-Oct-2002
Referred By
ASTM E3008/E3008M-16(2023) - Standard Classification for Transportation Surface Elements—UNIFORMAT II
Effective Date
10-Oct-2002

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ASTM E917-02 - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building SystemsASTM E917-02 - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
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ASTM E917-02 - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
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NOTICE: This standard has either been superseded and replaced by a new version or withdrawn.
Contact ASTM International (www.astm.org) for the latest information
An American National Standard
Designation:E917–02
Standard Practice for
Measuring Life-Cycle Costs of Buildings and Building
1
Systems
This standard is issued under the fixed designation E 917; the number immediately following the designation indicates the year of
original adoption or, in the case of revision, the year of last revision. A number in parentheses indicates the year of last reapproval. A
superscript epsilon (e) indicates an editorial change since the last revision or reapproval.
INTRODUCTION
Several methods of economic evaluation are available to measure the economic performance of a
building or building system over a specified time period. These methods include, but are not limited
to, life-cycle cost (LCC) analysis, the benefit-to-cost ratio, internal rate of return, net benefits,
payback, multiattribute decision analysis, risk analysis, and related measures (see Practices E 964,
E 1057, E 1074, E 1121, E 1765, and E 1946). These methods differ in their measure and, to some
extent, in their applicability to particular types of problems. Guide E 1185 directs you to the
appropriate method for a particular economic problem. One of these methods, life-cycle cost (LCC)
analysis, is the subject of this practice.The LCC method sums, in either present-value or annual-value
terms, all relevant costs associated with a building or building system over a specified time period.
Alternative (mutually exclusive) designs or systems for a given functional requirement can be
compared on the basis of their LCCs to determine which is the least-cost means of satisfying that
requirement over a specified study period.
1. Scope 2. Referenced Documents
1.1 This practice establishes a procedure for evaluating the 2.1 ASTM Standards:
2
life-cycle cost (LCC) of a building or building system and E 833 Terminology of Building Economics
comparing the LCCs of alternative building designs or systems E 964 Practice for Measuring Benefit-to-Cost and Savings-
2
that satisfy the same functional requirements. to-Investment Ratios for Buildings and Building Systems
1.2 The LCC method measures, in present-value or annual- E 1057 Practice for Measuring Internal Rate of Return and
value terms, the sum of all relevant costs associated with Adjusted Internal Rate of Return for Investments in Build-
2
owning and operating a building or building system over a ings and Building Systems
specified time period. E 1074 Practice for Measuring Net Benefits for Investments
2
1.3 The basic premise of the LCC method is that to an in Buildings and Building Systems
investor or decision maker all costs arising from an investment E 1121 Practice for Measuring Payback for Investments in
2
decision are potentially important to that decision, including Buildings and Building Systems
future as well as present costs.Applied to buildings or building E 1185 Guide for Selecting Economic Methods for Evalu-
2
systems, the LCC encompasses all relevant costs over a ating Investments in Buildings and Building Systems
designated study period, including the costs of designing, E 1765 Practice forApplying theAnalytical Hierarchy Pro-
purchasing/leasing, constructing/installing, operating, main- cess (AHP) to Multiattribute Decision Analysis of Invest-
3
taining, repairing, replacing, and disposing of a particular ments Related to Buildings and Building Systems
building design or system. E 1946 Practice for Measuring Cost Risk of Building and
3
Building Systems
2.2 ASTM Adjuncts:
1
This practice is under the jurisdiction of ASTM Committee E06 on Perfor-
mance of Buildings and is the direct responsibility of Subcommittee E06.81 on
Building Economics.
2
Current edition approved Oct. 10, 2002. Published November 2002. Originally Annual Book of ASTM Standards, Vol 04.11.
3
published as E 917 – 83. Last previous edition E 917 – 99. Annual Book of ASTM Standards, Vol 04.12.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
1

---------------------- Page: 1 ----------------------
E917–02
4
Discount Factor Tables 6.1.3 Compile cost data (see 8.2).
6.1.4 Compute the LCC for each alternative (see Section 9).
3. Terminology
6.1.5 Compare LCCs of each alternative to determine the
3.1 Definitions—For definitions of terms used in the prac- one with the minimum LCC (see 10.1).
tice, refer to Terminology E 833.
6.1.6 Make final decision, based on LCC results as well as
consideration of risk and uncertainty, unquantifiable effects,
4. Summary of Practice
andfundingconstraints(ifany)(see10.2,10.3,10.4,and10.5).
4.1 This practice outlines the recommended procedures for
computing the LCCs associated with a building or building
7. Objectives, Alternatives, and Constraints
system over a specified time period. It identifies and gives
7.1 Specify the design or system objective
...

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SIGNIFICANCE AND USE
5.1 LCC analysis is an economic method for evaluating a project or project alternatives over a designated study period. The method entails computing the LCC for alternative building designs or system specifications having the same purpose and then comparing them to determine which has the lowest LCC over the study period.  
5.2 The LCC method is particularly suitable for determining whether the higher initial cost of a building or building system is economically justified by reductions in future costs (for example, operating, maintenance, repair, or replacement costs) when compared with an alternative that has a lower initial cost but higher future costs. If a building design or system specification has both a lower initial cost and lower future costs relative to an alternative, an LCC analysis is not needed to show that the former is the economically preferable choice.  
5.3 If an investment project is not essential to the building operation (for example, replacement of existing single-pane windows with new double-pane windows), the project must be compared against the “do nothing” alternative (that is, keeping the single pane windows) in order to determine if it is cost effective. Typically the “do nothing” alternative entails no initial investment cost but has higher future costs than the proposed project.
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1.1 This practice establishes a procedure for evaluating the life-cycle cost (LCC) of a building or building system and comparing the LCCs of alternative building designs or systems that satisfy the same functional requirements.  
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1.3 The basic premise of the LCC method is that to an investor or decision maker all costs arising from an investment decision are potentially important to that decision, including future as well as present costs. Applied to buildings or building systems, the LCC encompasses all relevant costs over a designated study period, including the costs of designing, purchasing/leasing, constructing/installing, operating, maintaining, repairing, replacing, and disposing of a particular building design or system.  
1.4 The values stated in inch-pound units are to be regarded as standard. The values given in parentheses are mathematical conversions to SI units that are provided for information only and are not considered standard.  
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4.1 When preparing construction, project, and program cost estimates, it is often necessary to make monetary provision for change or risk, or both, or other exigencies where information is incomplete.  
4.2 Such allowance, contingency or reserve sums are employed by many persons engaged in the planning, delivery, and financing of construction work.  
4.3 These users include owners, developers, facilities programmers, cost planners, estimators, schedules, architects and engineers, specification writers, operating and maintenance staff, manufacturers, educators, financial managers, and comptrollers.  
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4.4.1 These sums are especially appropriate when performing the following activities:    
Cost budgeting;  
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4.4.2 In any of these activities a needed requirement, or component, of the planned construction can be known while the defined solution, design or specification, for providing this may not. The usual, and appropriate, response in these situations, is the inclusion of a monetary sum, within an estimate, to provide for this (these) requirement(s).  
4.4.3 Such sums may be general or specific in scope, may be planned to be spent or may only be included as possible mitigation for unplanned events and requirements.  
4.4.4 To distinguish between these sums, and in recognition of their differing purpose, they are described, and classified here, using the terms allowance, contingency, or reserve.
Note 1: Section 5 includes a generic statement of purpose for each of the three terms and provides a sub-classification that distinguishes between sums included for specific purposes and for non-specific, that is, general purposes. In cost budgeting, conceptual and design estimating especially, an estimator may intuitively recognize...
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5.1 Measuring cost risk enables owners of buildings and other constructed projects, architects, engineers, and contractors to measure and evaluate the cost risk exposures of their construction projects.3 Specifically, cost risk analysis (CRA) helps answer the following questions:  
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4.1 Standard practices for measuring the economic performance of investments in buildings and building systems have been published by ASTM. A computer program that produces economic measures consistent with these practices is available.4 Discount Factor Tables has been published by ASTM to facilitate computing measures of performance for most of the practices.  
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5.1 The NB (NS) method provides a measure of the economic performance of an investment, taking into account all relevant monetary values associated with that investment over the investor’s study period. The NB (NS) measure can be expressed in either present value or equivalent annual value terms, taking into account the time value of money.  
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4.1 Program and project estimates are a necessary part of planning and implementing any program of work.  
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Standard Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems

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5.1 The BCR and SIR provide measures of economic performance in a single number that indicates whether a proposed building or building system is preferred over a mutually exclusive alternative that serves as the base for computing the ratio. It may be contrasted with the life-cycle cost (LCC) method that requires two LCC measures to evaluate the economic performance of a building or building system—one for each alternative.  
5.2 The ratio indicates discounted dollar benefits (or savings) per dollar of discounted costs.  
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1.1 This practice covers a procedure for calculating and interpreting benefit-to-cost ratios (BCR) and savings-to-investment ratios (SIR) as an aid for making building-related decisions.  
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1.5 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.  
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5.1 LCC analysis is an economic method for evaluating a project or project alternatives over a designated study period. The method entails computing the LCC for alternative building designs or system specifications having the same purpose and then comparing them to determine which has the lowest LCC over the study period.  
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