ASTM E917-99

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-1999
• ICS: 91.010.20 - Contractual aspects
• Technical Committee: E06 - Performance of Buildings
• Drafting Committee: E06.81 - Building Economics

Relations

• Replaced By: ASTM E917-02 - Standard Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
• Effective Date: 10-Oct-2002
• Referred By: ASTM E2166-16(2023) - Standard Practice for Organizing and Managing Building Data
• Effective Date: 10-Oct-1999
• Referred By: ASTM E3008/E3008M-16(2023) - Standard Classification for Transportation Surface Elements—UNIFORMAT II
• Effective Date: 10-Oct-1999
• Referred By: ASTM E2103/E2103M-19 - Standard Classification for Bridge Elements—UNIFORMAT II
• Effective Date: 10-Oct-1999
• Referred By: ASTM E2637-17 - Standard Guide for Utilizing the Environmental Cost Element Structure Presented by Classification <astmref design="E2150"/>
• Effective Date: 10-Oct-1999
• Referred By: ASTM E1057-15(2020)e1 - Standard Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and Building Systems
• Effective Date: 10-Oct-1999
• Referred By: ASTM E2150-17 - Standard Classification for Life-Cycle Environmental Work Elements&#x2014;Environmental Cost Element Structure
• Effective Date: 10-Oct-1999
• Referred By: ASTM E1765-16(2023) - Standard Practice for Applying Analytical Hierarchy Process (AHP) to Multiattribute Decision Analysis of Investments Related to Projects, Products, and Processes
• Effective Date: 10-Oct-1999
• Referred By: ASTM E1557-09(2020)e1 - Standard Classification for Building Elements and Related Sitework&#x2014;UNIFORMAT II
• Effective Date: 10-Oct-1999
• Referred By: ASTM E3130-21 - Standard Guide for Developing Cost-Effective Community Resilience Strategies
• Effective Date: 10-Oct-1999
• Referred By: ASTM E2204-15(2020)e1 - Standard Guide for Summarizing the Economic Impacts of Building-Related Projects
• Effective Date: 10-Oct-1999
• 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-1999
• 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-1999
• 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-1999
• Referred By: ASTM E3035-15(2020) - Standard Classification for Facility Asset Component Tracking System (FACTS)
• Effective Date: 10-Oct-1999

Standards Content (Sample)

NOTICE: This standard has either been superseded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
Designation: E 917 – 99 An American National Standard
Standard Practice for
Measuring Life-Cycle Costs of Buildings and Building
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 to-Investment Ratios for Buildings and Building Systems
E 1057 Practice for Measuring Internal Rate of Return and
1.1 This practice establishes a procedure for evaluating the
Adjusted Internal Rate of Return for Investments in Build-
life-cycle cost (LCC) of a building or building system and
ings and Building Systems
comparing the LCCs of alternative building designs or systems
E 1074 Practice for Measuring Net Benefits for Investments
that satisfy the same functional requirements.
in Buildings and Building Systems
1.2 The LCC method measures, in present-value or annual-
E 1121 Practice for Measuring Payback for Investments in
value terms, the sum of all relevant costs associated with
Buildings and Building Systems
owning and operating a building or building system over a
E 1185 Guide for Selecting Economic Methods for Evalu-
specified time period.
ating Investments in Buildings and Building Systems
1.3 The basic premise of the LCC method is that to an
E 1765 Practice for Applying the Analytical Hierarchy Pro-
investor or decision maker all costs arising from an investment
cess (AHP) to Multiattribute Decision Analysis of Invest-
decision are potentially important to that decision, including
ments Related to Buildings and Building Systems
future as well as present costs. Applied to buildings or building
E 1946 Practice for Measuring Cost Risk of Building and
systems, the LCC encompasses all relevant costs over a
Building Systems
designated study period, including the costs of designing,
2.2 ASTM Adjuncts:
purchasing/leasing, constructing/installing, operating, main-
Discount Factor Tables
taining, repairing, replacing, and disposing of a particular
Computer Program and User’s Guide to Building Mainte-
building design or system.
nance, Repair, and Replacement Database for Life-Cycle
2. Referenced Documents
Cost Analysis, Adjunct to Standard Practices E 917,
E 964, E 1057, E 1074, and E 1121
2.1 ASTM Standards:
E 833 Terminology of Building Economics
3. Terminology
E 964 Practice for Measuring Benefit-to-Cost and Savings-
3.1 Definitions—For definitions of terms used in the prac-
tice, refer to Terminology E 833.
This practice is under the jurisdiction of ASTM Committee E-6 on Performance
of Buildings and is the direct responsibility of Subcommittee E06.81 on Building
Economics.
Current edition approved Oct. 10, 1999. Published March 2000. Originally Available from ASTM Headquarters. Order ADJE091703.
published as E 917 – 83. Last previous edition E 917 – 94. Available from ASTM Headquarters. Order ADJE091701 for the 3.5 in. disk.
Annual Book of ASTM Standards, Vol 04.11. Order ADJE091702 for the 5.25 in. disk.
Copyright © ASTM, 100 Barr Harbor Drive, West Conshohocken, PA 19428-2959, United States.
NOTICE: This standard has either been superseded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
E 917
4. Summary of Practice 7. Objectives, Alternatives, and Constraints
4.1 This practice outlines the recommended procedures for 7.1 Specify the design or system objective that is to be
accomplished, identify alternative designs or systems that
computing the LCCs associated with a building or building
accomplish that objective, and identify any constraints that
system over a specified time period. It identifies and gives
limit the available options to be considered.
examples of objectives, alternatives, and constraints for an
LCC analysis; identifies project data and general assumptions 7.2 An example is the selection of a space heating system
needed for the analysis; and presents alternative approaches for for a new house. The system must satisfy the thermal comfort
computing LCCs. This practice requires that the LCCs of requirements of the occupants throughout the heating season.
alternative building designs or systems be compared over a Available alternatives (for example, various gas furnaces, oil
common time period to determine which design or system has furnaces, heat pumps, and electric baseboard heaters) may have
the lowest LCC. This practice also states that uncertainty, different types of fuel usage with different unit costs, different
unquantifiable effects, and funding constraints shall be consid- fuel conversion efficiencies, different initial costs and expected
ered in the final analysis. It identifies the recommended maintenance and repair costs, and different lives. System
contents of an LCC report, describes proper applications of the selection will be constrained to those fuel types available at the
LCC method, provides examples of its use, and identifies building site.
limitations of the method. A comprehensive example of the
LCC method applied to a building economics problem is 8. Data and Assumptions
provided in Appendix X1.
8.1 Basic Assumptions—Establish the uniform assumptions
to be made in the economic analysis of all alternatives. These
5. Significance and Use
assumptions usually include, but are not limited to, the
consistent use of the present-value or annual-value calculation
5.1 LCC analysis is an economic method for evaluating a
project or project alternatives over a designated study period. method, the base time and study period, the general inflation
rate, the discount rate, the marginal income tax rate (where
The method entails computing the LCC for alternative building
designs or system specifications having the same purpose and relevant), the comprehensiveness of the analysis, and the
operational profile of the building or system to be evaluated.
then comparing them to determine which has the lowest LCC
over the study period. 8.1.1 Present-Value Versus Annual-Value Calculations—
The LCCs of project alternatives must be calculated uniformly
5.2 The LCC method is particularly suitable for determining
in present-value or annual-value terms. In the former, all costs
whether the higher initial cost of a building or building system
are discounted to the base time; in the latter, all costs are
is economically justified by reductions in future costs (for
converted to a uniform annual amount equivalent to the present
example, operating, maintenance, repair, or replacement costs)
value when discounted to the base time.
when compared with an alternative that has a lower initial cost
but higher future costs. If a building design or system specifi- 8.1.2 Study Period—The study period appropriate to the
LCC analysis may or may not reflect the life of the building or
cation has both a lower initial cost and lower future costs
relative to an alternative, an LCC analysis is not needed to system to be evaluated. The same study period must be used for
each alternative when present-value calculations are used. An
show that the former is the economically preferable choice.
annual-value LCC may, under certain restrictive assumptions,
5.3 If an investment project is not essential to the building
be used to compare alternatives with different study periods
operation (for example, replacement of existing single-pane
(see 9.2.3). The following guidelines may be useful for
windows with new double-pane windows), the project must be
selecting a study period for an LCC analysis:
compared against the “do nothing” alternative (that is, keeping
8.1.2.1 When analyzing a project from an individual inves-
the single pane windows) in order to determine if it is cost
tor’s standpoint, the study period should reflect the investor’s
effective. Typically the “do nothing” alternative entails no
time horizon. For a homeowner, the study period for a
initial investment cost but has higher future costs than the
house-related investment might be based on the length of time
proposed project.
the homeowner expects to reside in the house. For a commer-
cial property owner, the study period might be based on the
6. Procedure
anticipated holding period of the building. For an owner/
6.1 Follow these steps in calculating the LCC for a building
occupant of a commercial building, the study period might
or building system:
correspond to the life of the building or building system being
6.1.1 Identify objectives, alternatives, and constraints (see
evaluated. For a speculative investor, the study period might be
Section 7).
based on a relatively short holding period. For investments by
6.1.2 Establish basic assumptions for the analysis (see 8.1).
government agencies and large institutions, specific internal
6.1.3 Compile cost data (see 8.2).
policies often direct the choice of study period.
6.1.4 Compute the LCC for each alternative (see Section 9).
8.1.2.2 When LCC analyses of alternative building systems
6.1.5 Compare LCCs of each alternative to determine the
or design practices are performed for general information
one with the minimum LCC (see 10.1).
rather than for a specific application (for example, government
6.1.6 Make final decision, based on LCC results as well as or industry research to determine the cost effectiveness of
consideration of risk and uncertainty, unquantifiable effects, thermal insulation or high-efficiency heating and cooling
and funding constraints (if any) (see 10.2, 10.3, 10.4, and 10.5). equipment in typical installations), the study period will often
NOTICE: This standard has either been superseded and replaced by a new version or discontinued.
Contact ASTM International (www.astm.org) for the latest information.
E 917
1 1 i
coincide with the service life of the material or system (but be
r 5 21or i 5 ~1 1 r!~1 1 I! 2 1 (1)
1 1 I
limited to the typical life of the type of building where it is to
be installed). When the service life is very long, a more
where:
conservative choice for the study period might be used if the
I = the rate of general price inflation.
uncertainty associated with the long-term forecasting of costs
8.1.4.4 Use a real discount rate if estimates of future costs
substantially reduces the credibility of the results.
are expressed in constant dollars, that is, if they do not include
8.1.2.3 Regardless of the type of investor or purpose of the
general inflation.
analysis, use the same study period for all categories of costs
8.1.4.5 Use a nominal discount rate if estimates of future
when calculating the present value of any cost associated with
costs are expressed in current dollars, that is, if they include
a project. Furthermore, when comparing alternative designs or
general inflation.
systems on the basis of their present-value LCCs, use the same
8.1.4.6 When alternative building or system designs are
study period for each investment alternative.
compared using the LCC method, use the same discount rate in
8.1.2.4 When the study period selected is significantly
each LCC computation.
shorter than the service life of the building or system evaluated,
8.1.5 Comprehensiveness—Different levels of effort can be
it is important that a realistic assessment of the project’s resale
applied in undertaking an LCC analysis. The appropriate level
(or residual) value at the end of the study period be included in
of comprehensiveness depends upon the degree of complexity
the LCC analysis. Even if the building will not be sold at that
of the problem, the intended purpose of the evaluation, the
time, the resale value will likely have a significant impact on
level of monetary and nonmonetary impacts contingent upon
the LCC.
the investment decision, the cost of the different levels of
comprehensiveness, and the resources available to the investor
8.1.3 Inflation—General price inflation is the reduction in
or decision maker.
the purchasing power of the dollar from year to year, as
measured, for example, by the percent increase in the gross 8.1.5.1 Some anticipated effects are more difficult to quan-
tify in monetary terms than others. Include effects that are
national product (GNP) deflator over a given year. LCC
difficult to quantify through the use of multiattribute decision
analyses can be calculated in constant-dollar terms (net of
analysis (see Practice E 1765). (See 10.4 for more information
general inflation) or in current-dollar terms (including general
on unquantifiable effects.) Overlooking or omitting significant
inflation). If the latter is used, a consistent projection of general
factors from an LCC evaluation diminishes the comprehensive-
price inflation must be used throughout the LCC analysis,
ness and usefulness of the evaluation.
including adjustment of the discount rate to incorporate the
8.1.5.2 Comprehensiveness requires that all suitable alter-
general inflation rate.
natives be considered when selecting among alternative de-
8.1.3.1 When income tax effects are not included in the
signs or systems for a particular purpose.
LCC analysis, as in the case of LCC evaluations of nonprofit
8.1.6 Income Taxes—For building investments that are sub-
buildings and owner-occupied houses (without financing), it is
ject to income tax, include in the analysis adjustments of
usually easier to express all costs in constant dollars. Price
capital costs, expenses, and resale value to reflect income tax
changes for individual cost categories that are high
...