ASTM F1675-96
(Practice)Standard Practice for Life-Cycle Cost Analysis of Plastic Pipe Used for Culverts, Storm Sewers, and Other Buried Conduits
Standard Practice for Life-Cycle Cost Analysis of Plastic Pipe Used for Culverts, Storm Sewers, and Other Buried Conduits
SCOPE
1.1 This practice establishes a procedure for using life cycle cost (LCC) analysis techniques to evaluate alternative drainage system designs, using plastic pipe that satisfy the same functional requirements.
1.2 The LCC technique measures the present value of all relevant costs to install, operate, and maintain alternative drainage systems such as engineering, construction, maintenance, rehabilitation, or replacement over a specified period of time. The practice also accommodates any remaining residual or salvage value.
1.3 The decision maker, using the results of the LCC analysis, can then identify the alternative(s) with the lowest estimated total cost based on the present value of all costs.
1.4 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 and health practices and determine the applicability of regulatory limitations prior to use.
General Information
Relations
Standards Content (Sample)
NOTICE: This standard has either been superceded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
Designation: F 1675 – 96
Standard Practice for
Life-Cycle Cost Analysis of Plastic Pipe Used for Culverts,
Storm Sewers, and Other Buried Conduits
This standard is issued under the fixed designation F 1675; 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.
1. Scope 3.1.4 future costs, n—costs required to keep the system
operating that are incurred after the project is placed in service,
1.1 This practice establishes a procedure for using life cycle
such as operation, maintenance, rehabilitation, or replacement
cost (LCC) analysis techniques to evaluate alternative drainage
costs.
system designs, using plastic pipe that satisfy the same
3.1.5 inflation, n—the general trend or rising prices that,
functional requirements.
over time, result in the reduction of the purchasing power of
1.2 The LCC technique measures the present value of all
the dollar from year to year.
relevant costs to install, operate, and maintain alternative
3.1.6 initial cost, n—the total of all costs such as design
drainage systems such as engineering, construction, mainte-
costs, material purchase costs, and construction/installation
nance, rehabilitation, or replacement over a specified period of
costs, that are specific to each alternative and are incurred to
time. The practice also accommodates any remaining residual
bring each alternative to a point of functional readiness.
or salvage value.
3.1.7 maintenance cost, n—the annual or periodic costs,
1.3 The decision maker, using the results of the LCC
such as inspection and cleaning to keep a drainage structure
analysis, can then identify the alternative(s) with the lowest
functioning for the project design life, but do not extend the
estimated total cost based on the present value of all costs.
material service life.
1.4 This standard does not purport to address all of the
3.1.8 material service life, n—the number of years of
safety concerns, if any, associated with its use. It is the
service a particular material, system, or structure will provide
responsibility of the user of this standard to establish appro-
before rehabilitation or replacement is necessary.
priate safety and health practices and determine the applica-
3.1.9 project design life, n—the planning horizon for the
bility of regulatory limitations prior to use.
project, expressed as the number of years of useful life required
2. Referenced Documents of the drainage structure.
3.1.10 rehabilitation cost, n—the total of all costs incurred
2.1 ASTM Standards:
to extend the material service life of a specific alternative.
E 917 Practice for Measuring Life Cycle Costs of Building
3.1.11 replacement cost, n—the total of all costs incurred to
and Building Systems
replace a material before the end of the project design life.
ASTM Adjuncts:
3.1.12 terminal value, n—the remaining value of the drain-
E 917 Discount Factor Tables
age structure in place at the end of the project design life.
3. Terminology
4. Summary of Practice
3.1 Definitions:
4.1 This practice outlines a procedure for conducting an
3.1.1 common costs, n—costs that are common to all
LCC analysis of two or more drainage pipe alternatives using
alternatives in nature and amount, such as initial planning fees
plastic pipe over a specified project design life. This practice
or future annual inspection costs.
identifies the project data and general assumptions needed for
3.1.2 discount rate, n—the investor’s time value of money,
the analysis and the method of computation.
expressed as a percent, used to convert costs occurring at
different times, to equivalent costs at a common point in time.
5. Significance and Use
3.1.3 drainage project, n—a project having a definable,
5.1 LCC analysis is an economic method to evaluate alter-
functional drainage requirement that can be satisfied by two or
natives that are characterized by differing cash flows over the
more design or construction alternatives, or both.
designated project design life. The method entails calculating
the LCC of each alternative capable of satisfying the functional
This practice is under the jurisdiction of ASTM Committee F-17 on Plastic
requirements of the project and comparing them to determine
Piping Systems and is the direct responsibility of Subcommittee F17.62 on Sewer.
which have the lowest estimated LCC over the project design
Current edition approved Jan. 10, 1996. Published March 1996.
Annual Book of ASTM Standards, Vol 04.07.
life.
Available from ASTM Headquarters. Order PCN 12-509179-10.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
NOTICE: This standard has either been superceded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
F 1675
5.2 The LCC method is particularly suitable for determining above general price inflation, referred to as the “real” discount
whether the higher initial cost of an alternative is economically rate.
justified by reductions in future costs (for example, operating 6.3.2.3 A nominal discount rate (d ) and the corresponding
n
maintenance, rehabilitation, or replacement) when compared to real discount rate ( d ) are related as follows:
r
an alternative with lower initial costs but higher future costs. If
1 1 d
n
d 5 2 1or d 5 1 1 d ! 1 1 I! 2 1 (1)
~ ~
a design alternative has both a lower initial cost and lower r n r
1 1 I
future costs than other alternatives, an LCC analysis is not
where:
necessary to show the former is the economically preferable
I = the rate of general price inflation.
choice.
6.3.2.4 The same discount rate should be used in evaluating
each design alternative. Annex A1 contains a procedure to
6. Procedure
follow in developing the discount rate. This procedure may be
6.1 The procedure for performing an LCC analysis for
applied by those who wish to select their own values as well as
drainage pipe applications is as follows:
those who are required to follow mandated or legislated
6.1.1 Identify project objectives, alternatives, and con-
requirements.
straints (6.2).
6.3.3 Inflation—This practice is designed only to accommo-
6.1.2 Establish basic assumptions (6.3).
date a uniform rate of general inflation. Calculate the LCC in
6.1.3 Compile data (6.4).
constant dollar terms (not including general inflation) or in
6.1.4 Compute life cycle cost for each alternative (7.1).
current dollar terms (including general inflation). If the latter is
6.1.5 Evaluate results (7.2).
used, a consistent projection of general price inflation shall be
6.2 Project Objectives, Alternatives, and Constraints:
used throughout the LCC analysis, including adjustment of the
6.2.1 Specify the design objective that is to be accom-
discount rate to incorporate general inflation (6.3.2.2). The
plished, identify alternative systems or designs that accomplish
percentage change in GNP deflator and the Producers Price
that objective, and identify any constraints that may limit the
Index are two broad indicators of general inflation.
options to be considered.
6.3.3.1 If the user desires or is required to treat inflation on
6.2.2 An example is the design of a storm water drainage
an incremental (differential) basis, or uniquely to each indi-
system for a residential development project. The system must
vidual cost component (for example, energy costs), consult
satisfy mandated drainage system objectives, such as specified
either TM-5-802-1 or Practice E 917, respectively.
rainfall intensities and storm water runoff limits. Available
6.3.4 Project Design Life—Establish the project design life
alternatives, such as different pipe materials and varying
(3.1.9) from mandated public policy, legislated requirements,
configurations of catch basins, ponds, or underground deten-
or selection by the owner based on situation requirements. Use
tion chambers may have different initial costs as well as
the same design life for each alternative under comparison and
expected future costs. The system design may be constrained
for all categories of cost under consideration. The potential for
by structural and hydraulic limits such as minimum and
future obsolescence, that is, the potential that future changes
maximum slopes and depth of burial, limits on surface flows on
may modify drainage system requirements, should be consid-
streets, etc.
ered in selecting project design life.
6.3 Basic Assumptions:
6.3.5 Comprehensiveness—The appropriate degree of pre-
6.3.1 Establish the uniform assumptions to be made in the
cision and detail to use in an LCC analysis is dependent upon
LCC analysis of all alternatives. These assumptions include the
the intended use of the analysis. A less comprehensive or
selection of the discount rate, the treatment of inflation, general
detailed analysis may be sufficient to roughly rank many
inflation rate, the project design life, and the desired compre-
alternatives, whereas a more comprehensive analysis may be
hensiveness of the analysis.
necessary to select from among a few close alternatives. In any
6.3.2 Discount Rate—The discount rate selected should
case, omitting significant factors from an LCC analysis dimin-
reflect the owner’s time value of money. That is, the discount
ishes the usefulness of the results.
rate should reflect the rate of interest that makes the owner
6.3.6 Sensitivity Analysis—No analysis is more precise than
indifferent between paying or receiving a dollar now or at some
the accuracy of the data and assumptions used in the calcula-
future point in time. The discount rate is used to convert costs
tion. When there is uncertainty regarding basic assumptions
occurring at different times to equivalent costs at a common
(for example, cost estimates, design life, discount rate, etc.)
point in time.
calculate the LCC for a range of assumptions. The results of
6.3.2.1 There is no single correct discount rate for all these calculations will show the user the extent to which the
owners. Selection of the discount rate should be guided by the
results are sensitive to variations of the key assumptions.
rate of return on alternative investment opportunities of com- 6.4 Compiling Data—Compile the data specific to each
parable risk (that is, the opportunity cost of capital), or, in the alternative under consideration.
case of some public organizations, on mandated or legislated 6.4.1 Initial Costs—The estimated dollar amount of all
requirements (for example, the cost of borrowed money).
6.3.2.2 The discount rate may include general price inflation
over the study period. This discount rate is referred to as the
TM-5-802-1, Economic Studies for Military Construction Design Applications,
“nominal” discount rate in this practice. The discount rate may
December 1986, available from Headquarters, Department of the Army, Washing-
also be expressed as the real earning power of money over and ton, DC.
NOTICE: This standard has either been superceded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
F 1675
costs is required to bring the alternative system to a point of project design life to an appropriately higher value, where the
functional readiness. residual value would not significantly affect the comparison of
the various alternatives.
6.4.2 Material Service Life—Material service life is the
number of years of service expected of the alternative under
7. Calculations
study, which varies depending upon the pipe material, the
7.1 Computing Life Cycle Costs—To compute the LCC for
environment, effluent, and application. Potential changes in
a drainage system, all relevant cost flows over the design life of
environmental conditions which may affect the material service
the project are discounted back to the present and summed.
life should be considered. Use job site tests, published reports,
7.1.1 Find the present value (PV) of each cost category [for
manufacturer product data, and local experience to establish
example, initial cost (IC), operating and maintenance (M),
service life for each material. If material service life is less than
rehabilitation or repair (R) and terminal value ( T)] using the
the project design life (3.1.9), the analysis shall include the
appropriate discount formula in this section. Then sum these
future cost to sufficiently extend the service life through
present values to find PVLCC, for example,
rehabilitation or replacement, in order to at least equal the
PVLCC 5 PVIC 1 PVM 1 PVR 2 PVT (2)
project design life.
6.4.3 Future Costs—Cost estimates should be made for all 7.1.2 Initial costs are assumed to occur in the base year
(year zero). No discounting is required.
significant items that are estimated to be required to allow the
drainage system to satisfy performance requirements over the 7.1.3 Future costs expected to occur at a single point in time
(for example, rehabilitation costs) may be discounted to
project design life. Common costs (1.1) may be excluded
without affecting the relative ranking of the alternatives under present value by multiplying the estimated current cost of the
item by the single present value factor as follows:
study. The cost estimates should be made in constant dollars
(not including inflation) in the same time frame as the estimate
n
PVA 5 A (3)
S D
s s
of initial costs.
1 1 d
r
6.4.3.1 Operating Cost—Operating cost is an estimate of
where:
the annual cost for labor, power, and consumable materials and
A = single amount,
s
supplies required to operate a drainage system. Except for
d = real discount rate (Annex A1), and
r
pumped systems, most drainage systems do not have signifi-
n = number of years from year zero to time of future
cant annual operating costs.
single amount expenditure.
6.4.3.2 Maintenance Cost—Maintenance cost includes cost
NOTE 1—The factor developed in Eq 3 is generally known as the
estimates and the frequency of any inspection, cleaning, and
present value factor and may be found in financial tables of discount rates.
minor repair necessary to keep the system operating at capacity
7.1.4 Future costs expected to occur in about the same
during the project design life.
amount (in constant dollars) from year to year (for example,
6.4.3.3 Rehabilitation Cost—Rehabilitation cost is the cost
operating or maintenance costs) may be discounted to present
of major repairs to extend the material service life to equal or
value as follows:
exceed the project design life. If more than one rehabilitation is
n
a
...
Questions, Comments and Discussion
Ask us and Technical Secretary will try to provide an answer. You can facilitate discussion about the standard in here.