ASTM E2204-15(2020)e1
(Guide)Standard Guide for Summarizing the Economic Impacts of Building-Related Projects
Standard Guide for Summarizing the Economic Impacts of Building-Related Projects
SIGNIFICANCE AND USE
5.1 This guide reduces the time and effort to communicate the findings of project impact studies and improves the quality of communication between those who measure economic impacts and those who evaluate and interpret them.
5.2 Following the guide assures the user that relevant economic information on the project is included in a summary format that is understandable to both the preparer and user.
5.3 Since the standard guide provides a consistent approach to reporting the economic impacts of projects, it facilitates the comparison of economic studies across projects and over time.
5.4 The guide focuses on projects in construction and building-related research. It applies to government as well as private projects. And while the examples treat building-related projects, the guide is applicable to non-building-related projects as well.
5.5 Building-sector users of this guide include building owners and managers, private-sector construction companies, research groups in building and construction industry trade associations, parties to public-sector construction projects, and government laboratories conducting building-related research.
5.6 Use the guide to summarize the results of economic impact studies that use Practices E917 (Life-Cycle Costs), E964 (Benefit-to-Cost and Savings-to-Investment Ratios), E1057 (Internal Rate of Return and Adjusted Internal Rate of Return), E1074 (Net Benefits and Net Savings), E1121 (Payback), E1699 (Value Engineering/Value Analysis), and E1765 (Analytical Hierarchy Process for Multiattribute Decision Analysis).
5.7 Use this guide in conjunction with Guide E1369 to summarize the results of economic impact studies involving natural or man-made hazards, or both, that occur infrequently but have significant consequences.
5.8 Use the guide to summarize the impacts of projects that affect exclusively initial costs, benefits, or savings, as well as projects that affect life-cycle costs, benefits, or savings.
Note 1: Ex...
SCOPE
1.1 This guide covers a generic format for summarizing the economic impacts of building-related projects.
1.2 The guide provides technical persons, analysts, and researchers a tool for communicating project impacts in a condensed format to management and non-technical persons.
1.3 The generic format described in this guide calls for a description of the significance of the project, the analysis strategy, a listing of data and assumptions, and a presentation of the key economic measures of project impact.
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, health, and environmental practices and determine the applicability of regulatory limitations prior to use.
1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
General Information
Relations
Standards Content (Sample)
This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the
Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.
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Designation: E2204 − 15 (Reapproved 2020)
Standard Guide for
Summarizing the Economic Impacts of Building-Related
Projects
This standard is issued under the fixed designation E2204; 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 (´) indicates an editorial change since the last revision or reapproval.
ε NOTE—Adjunct title and stock number in 2.2 were updated editorially in April 2020.
INTRODUCTION
Quantitative descriptions of economic impacts are a basic requirement in many organizations for
evaluating budget requests and the value of a project to the organization. Several measures of
economic performance are available for evaluating building-related investments. These measures
include, but are not limited to, life-cycle cost, the benefit-to-cost ratio, adjusted internal rate of return,
and net benefits. This guide provides a generic format for presenting these economic measures of
building-related investments.
1. Scope 2. Referenced Documents
1.1 This guide covers a generic format for summarizing the 2.1 ASTM Standards:
economic impacts of building-related projects. E631 Terminology of Building Constructions
E833 Terminology of Building Economics
1.2 The guide provides technical persons, analysts, and
E917 Practice for Measuring Life-Cycle Costs of Buildings
researchers a tool for communicating project impacts in a
and Building Systems
condensed format to management and non-technical persons.
E964 Practice for Measuring Benefit-to-Cost and Savings-
1.3 The generic format described in this guide calls for a
to-Investment Ratios for Buildings and Building Systems
description of the significance of the project, the analysis
E1057 Practice for Measuring Internal Rate of Return and
strategy, a listing of data and assumptions, and a presentation
Adjusted Internal Rate of Return for Investments in
of the key economic measures of project impact.
Buildings and Building Systems
1.4 This standard does not purport to address all of the
E1074 Practice for Measuring Net Benefits and Net Savings
safety concerns, if any, associated with its use. It is the for Investments in Buildings and Building Systems
responsibility of the user of this standard to establish appro-
E1121 Practice for Measuring Payback for Investments in
priate safety, health, and environmental practices and deter- Buildings and Building Systems
mine the applicability of regulatory limitations prior to use.
E1369 Guide for Selecting Techniques for Treating Uncer-
1.5 This international standard was developed in accor- tainty and Risk in the Economic Evaluation of Buildings
dance with internationally recognized principles on standard-
and Building Systems
ization established in the Decision on Principles for the
E1699 Practice for Performing Value Engineering (VE)/
Development of International Standards, Guides and Recom- Value Analysis (VA) of Projects, Products and Processes
mendations issued by the World Trade Organization Technical
E1765 Practice for Applying Analytical Hierarchy Process
Barriers to Trade (TBT) Committee. (AHP) to Multiattribute Decision Analysis of Investments
Related to Projects, Products, and Processes
This guide is under the jurisdiction of ASTM Committee E06 on Performance
of Buildings and is the direct responsibility of Subcommittee E06.81 on Building
Economics. For referenced ASTM standards, visit the ASTM website, www.astm.org, or
Current edition approved April 1, 2020. Published May 2020. Originally contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM
approved in 2002. Last previous edition approved in 2015 as E2204-15. DOI: Standards volume information, refer to the standard’s Document Summary page on
10.1520/E2204-15R20E01. the ASTM website.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
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E2204 − 15 (2020)
E2506 Guide for Developing a Cost-Effective Risk Mitiga- E1057 (Internal Rate of Return and Adjusted Internal Rate of
tion Plan for New and Existing Constructed Facilities Return), E1074 (Net Benefits and Net Savings), E1121
(Payback), E1699 (Value Engineering/Value Analysis), and
2.2 ASTM Adjunct:
Discount Factor Tables - Adjunct to E917 Practice for E1765 (Analytical Hierarchy Process for Multiattribute Deci-
sion Analysis).
Measuring Life-Cycle Costs of Buildings and Building
Systems - Includes Excel and PDF Files
5.7 Use this guide in conjunction with Guide E1369 to
2.3 ASTM Software Product:
summarize the results of economic impact studies involving
MNL 29 Software to Support ASTM E1765: Standard Prac-
natural or man-made hazards, or both, that occur infrequently
tice for Applying Analytical Hierarchy Process (AHP) to
but have significant consequences.
Multiattribute Decision Analysis of Investments Related
5.8 Use the guide to summarize the impacts of projects that
to Buildings and Building Systems
affect exclusively initial costs, benefits, or savings, as well as
projects that affect life-cycle costs, benefits, or savings.
3. Terminology
NOTE 1—Examples of projects dealing exclusively with initial costs,
3.1 Definitions—For definitions of general terms related to
benefits, or savings include design modifications or innovative construc-
building construction used in this guide, refer to Terminology tion practices that reduce labor or material costs, reduce construction
duration, or increase construction productivity, but leave future costs,
E631; and for general terms related to building economics,
benefits, or savings unchanged.
refer to Terminology E833.
5.9 Use the guide to summarize the impacts of projects that
4. Summary of Guide
affect parties that are internal to the organization preparing the
summary as well as projects that affect not only the organiza-
4.1 This guide presents a standard format for presenting the
tion preparing the summary but also groups external to the
economic impacts of building-related projects. It includes the
organization.
entire range of private and public construction projects, as well
NOTE 2—Projects whose impacts are internal only correspond to
as research related to those projects.
situations where the organization preparing the summary bears all of the
4.2 The generic format provided in this guide helps
costs and receives all of the benefits or savings, or both, from the project.
Examples include, but are not limited to, the use of innovative construc-
decision-makers and managers understand the background and
tion practices or alternative building materials, components, or systems
objectives of a project, the data from which impacts were
that reduce initial costs or future costs, or both, to the building owner.
calculated, how impact was measured, and the significance of
NOTE 3—Projects with a public-sector component frequently have
the project’s measures of worth.
impacts that reach beyond the organization preparing the summary.
Examples include, but are not limited to, building-related research
5. Significance and Use
conducted by government laboratories, projects aimed at mitigating the
consequences of natural or man-made hazards, or both, that have the
5.1 This guide reduces the time and effort to communicate
potential to cause collateral damage, and highway and bridge construc-
the findings of project impact studies and improves the quality
tions that affect traffic patterns.
of communication between those who measure economic
5.10 There is no limitation to the use of the guide in
impacts and those who evaluate and interpret them.
facilitating communication between project analysts and proj-
5.2 Following the guide assures the user that relevant
ect managers and other decision-makers. Substantial benefits
economic information on the project is included in a summary
from using the guide, however, are likely to come from its
format that is understandable to both the preparer and user.
application in a large institution, such as a federal agency,
where many projects are competing for funding, and a system-
5.3 Since the standard guide provides a consistent approach
atic presentation of results that can be compared across projects
to reporting the economic impacts of projects, it facilitates the
and agencies is needed to allocate efficiently scarce funds.
comparison of economic studies across projects and over time.
5.4 The guide focuses on projects in construction and
6. How to Use This Guide
building-related research. It applies to government as well as
6.1 The generic format for summarizing project impacts is
private projects. And while the examples treat building-related
outlined in Fig. 1.
projects, the guide is applicable to non-building-related proj-
6.1.1 To promote a better understanding of the information
ects as well.
called for in Fig. 1, the numbered headings in the table are
5.5 Building-sector users of this guide include building
cross-referenced to the subsections of 6.2. Specifically, the
owners and managers, private-sector construction companies,
information called for under Headings 1.a and 1.b is covered in
research groups in building and construction industry trade
6.2.1, the information called for under Heading 2 is covered in
associations, parties to public-sector construction projects, and
6.2.2, and the information called for under Headings 3.a, 3.b,
government laboratories conducting building-related research.
and 3.c is covered in 6.2.3.
5.6 Use the guide to summarize the results of economic
6.2 Presentation and Analysis of the Results of an Economic
impact studies that use Practices E917 (Life-Cycle Costs),
Impact Assessment—The presentation and analysis of the
E964 (Benefit-to-Cost and Savings-to-Investment Ratios),
results of an economic impact assessment are central to
understanding and accepting its findings. If the presentation is
clear and concise, and if the analysis strategy is logical,
Available from ASTM International Headquarters. Order Adjunct No.
ADJE091717-EA. Original adjunct produced in 1984. Adjunct last revised in 2003. complete, and carefully spelled out, then the results will stand
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E2204 − 15 (2020)
FIG. 1 Format for Summarizing the Economic Impacts of Building-Related Projects
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E2204 − 15 (2020)
up under close scrutiny. This section describes a generic format 6.2.1.2 Heading 1.a in Fig. 1 calls for a short but concise
and procedure for summarizing the results of an economic summary of the project. Make the summary sufficiently de-
impact assessment that meets the two previously cited condi-
tailed to enable senior management and non-technical readers
tions. The generic format is built upon the following three
to understand the significance of the project. The goal of the
factors: (1) why the project is important; (2) how the analysis
information presented under Heading 1.a is to clearly describe:
strategy was employed; and (3) how the key measures are
(1) why the project is important and how the organization
calculated, summarized, and traced to relevant standards,
carrying out the project or conducting the research became
codes, and regulations. These factors, taken together, constitute
involved; and (2) why some or all of the changes brought about
a three-step procedure for summarizing the results of an
were due to the organization’s contribution.
economic impact assessment. Six case studies are used to
6.2.1.3 The objective of Heading 1.b is to highlight two or
illustrate what a completed impact assessment using the
three points which convey why this project is important. These
generic format would look like. The six case studies were
points are intended for use as talking points by senior manage-
chosen so that there is at least one case study for each
ment when they make presentations to non-technical audiences
combination of affected parties (see 5.9) and affected costs,
or for use in press releases.
benefits, or savings (see 5.8), and at least one involving natural
6.2.2 How the Analysis Strategy Was Employed:
or man-made hazards, or both. The six case studies are
6.2.2.1 Heading 2 of Fig. 1, analysis strategy, has two
presented in Appendix X1 – Appendix X6. Appendix X1 is
based on a private-sector commercial building application components. The first component focuses on documenting the
steps taken to ensure that the analysis strategy is logical and
where all impacts are internal and only initial costs are
relevant. Appendix X2 is based on a highway project where complete. The second component places particular emphasis
both internal and external impacts are important and only on summarizing the key data elements and associated assump-
initial costs are relevant. Appendix X3 is based on an energy
tions needed to calculate the values reported under Headings
conservation project where all impacts are internal and both 3.a and 3.b of Fig. 1.
initial and future costs and future savings are included.
6.2.2.2 Special emphasis is placed on documenting the
Appendix X4 is based on a public-sector research application
sources and validity of any data used to make estimates or
where both internal and external impacts are important and
projections of key benefit and cost measures. Include any
past, present, and future costs, benefits, and savings are
constraints that limited the scope of the study. The information
included. Appendix X5 is based on a case study on the
called for under Heading 2 of Fig. 1 establishes an audit trail
application of life-cycle cost analysis to homeland security
from the raw data, through data manipulations (for example,
issues in constructed facilities, where both internal and external
represented by equations and formulae), to the results. The
impacts are important and both initial and future costs and
audit trail consists of seven items that describe how to
future savings are included. Appendix X6 is based on a
determine:
case-study example that was designed to illustrate the three-
(1) The present value of total benefits (savings) both
step protocol (Guide E2506), and summarizes a public evalu-
internal and external stemming from all contributors to the
ation of alternative approaches to minimizing the damage from
project under study, any benefits (savings) to users of products
intentionally-set fires in at-risk communities in Michigan,
(materials, equipment, software, or procedures) stemming from
where both internal and external impacts are importa
...
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