ASTM C1131-95(2000)
(Practice)Standard Practice for Least Cost (Life Cycle) Analysis of Concrete Culvert, Storm Sewer, and Sanitary Sewer Systems
Standard Practice for Least Cost (Life Cycle) Analysis of Concrete Culvert, Storm Sewer, and Sanitary Sewer Systems
SCOPE
1.1 This practice covers procedures for least cost (life cycle) analysis (LCA) of materials, systems, or structures proposed for use in the construction of concrete culvert, storm sewer, and sanitary sewer systems.
Note 1--As intended in this practice, examples of analyses include, but are not limited to the following: (1) materials-pipe linings and coatings, concrete wall thicknesses, cements, additives, etc.; (2) systems-circular pipe, box sections, multiple lines, force mains, etc.; and (3) structures-wet and dry wells, pump and lift stations, etc.
1.2 The LCA method includes costs associated with planning, engineering, construction (bid price), maintenance, rehabilitation and replacement, and cost deductions for any residual value at the end of the proposed project design life.
1.3 For each material, system, or structure, the LCA method determines in present value constant dollars, the total of all initial and future costs over the project design life, and deducts any residual value.
1.4 Major factors in the LCA method include project design life, service life, and relevant interest and inflation rates.
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Standards Content (Sample)
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Designation: C 1131 – 95 (Reapproved 2000)
Standard Practice for
Least Cost (Life Cycle) Analysis of Concrete Culvert, Storm
Sewer, and Sanitary Sewer Systems
This standard is issued under the fixed designation C 1131; 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 3.1.2.1 Discussion—Current dollars are costs stated at price
levels in effect whenever the costs are incurred. In the absence
1.1 Thispracticecoversproceduresforleastcost(lifecycle)
of inflation or deflation, current dollars are equal to constant
analysis (LCA) of materials, systems, or structures proposed
dollars.
foruseintheconstructionofconcreteculvert,stormsewer,and
3.1.3 direct costs—the direct costs of excavation, removal,
sanitary sewer systems.
and disposal of existing materials, systems, or structures;
NOTE 1—Asintendedinthispractice,examplesofanalysesinclude,but
installation and testing of replacements materials, systems or
are not limited to the following: (1) materials-pipe linings and coatings,
structures; backfill; and surface restoration.
concrete wall thicknesses, cements, additives, etc.; (2) systems-circular
3.1.4 discount rate—accounts for the time value of money
pipe, box sections, multiple lines, force mains, etc.; and (3) structures-wet
andreflectstheimpartialityofpayingorreceivingadollarnow
and dry wells, pump and lift stations, etc.
or at a future time.
1.2 The LCA method includes costs associated with plan-
3.1.4.1 Discussion—The discount rate is used to convert
ning, engineering, construction (bid price), maintenance, reha-
costs occurring at different times to equivalent costs at a
bilitationandreplacement,andcostdeductionsforanyresidual
common time. Discount rates may be expressed in nominal or
value at the end of the proposed project design life.
real terms.
1.3 For each material, system, or structure, the LCAmethod
3.1.5 future costs—costs incurred after a project has been
determines in present value constant dollars, the total of all
constructed and operating, such as maintenance, rehabilitation,
initial and future costs over the project design life, and deducts
and replacement costs.
any residual value.
3.1.6 indirect costs—the costs of traffic rerouting, safety,
1.4 Major factors in the LCAmethod include project design
utility relocations, etc., and additional future costs required by
life, service life, and relevant interest and inflation rates.
new land uses, population growth, etc.
3.1.7 inflation rate—an increase in the volume of money
2. Referenced Documents
and credit relative to available goods and services resulting in
2.1 ASTM Standards:
a continuing rise in the general price level.
E 833 Terminology of Building Economics
3.1.7.1 Discussion—In this practice, inflation refers to
yearly change in the Producer Price Index (1).
3. Terminology
3.1.8 interest rate—the cost of borrowed money.
3.1 Definitions:
3.1.9 maintenance costs—the annual or periodic direct and
3.1.1 constant dollars—dollars of uniform purchasing
indirect costs of keeping a material, system, or structure
power exclusive of inflation or deflation.
functioning for the project design life; such maintenance does
3.1.1.1 Discussion—Constant dollars are costs stated at
not extend the service life of the material, system, or structure.
price levels for a specific reference year, usually the particular
3.1.10 nominal discount rate—a discount rate that takes
time that the LCA is being conducted.
into account both the effects of inflation and the real earning
3.1.2 current dollars—dollarsofpurchasingpowerinwhich
potential of money invested over time.
actual prices are stated, including inflation or deflation.
3.1.10.1 Discussion—When future costs and values are
expressed in current dollars, after having been adjusted for
inflation, a nominal discount rate is used to convert the future
This practice is under the jurisdiction of ASTM Committee C13 on Concrete
costs and values to present value constant dollars. Users of this
Pipe and is the direct responsibility of Subcommittee C13.05 on Least Cost
Analysis.
Current edition approved April 15, 1995. Published June 1995.
2 3
Annual Book of ASTM Standards, Vol 04.07. The boldface numbers refer to the list of references at the end of the standard.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
C 1131
practice should consult with their accountant or client to life; the material, system, or structure service life; direct and
determine the appropriate discount rate for a given project. indirect costs and timing of maintenance, rehabilitation and
3.1.11 original costs—costs incurred in planning, design- replacement; real or nominal discount rate; and the compre-
ing, and constructing a project. hensiveness of the LCA evaluation.
3.1.12 project design life—the number of years of useful
5.4 Compile Data—Compilebasicdatarequiredtocompute
life the material, system, or structure must provide.
the LCA of potential alternatives, including costs of planning,
3.1.13 real discount rate—a discount rate that takes into
design, engineering and construction; maintenance costs; reha-
account only the real earning potential of money over time and
bilitation costs; replacement costs; residual values; and the
is the differential between the interest and inflation rates.
time periods for all future costs.
3.1.13.1 Discussion—When future costs and values are
5.5 Compute LCA—The LCA of a material, system, or
expressed in future constant dollars, a real discount rate is used
structure can be formulated in simple terms with all costs and
to convert constant dollars to present value dollars. Life cycle
values in present value constant dollars:
economic analyses conducted in constant dollars and a real
LCA 5 C 2 S 1 (~M 1 N 1 R! (1)
discount rate are often preferred to similar analyses conducted
in current dollars using nominal discount rates because no
where:
forecast of the inflation rate is required.
C = original cost,
3.1.14 rehabilitation costs—the direct and indirect costs of
S = residual value,
rehabilitating a material, system, or structure to extend the
M = maintenance cost,
service life of the material, system, or structure. N = rehabilitation cost, and
3.1.15 replacement costs—the direct and indirect costs of R = replacement cost.
replacing a material, system, or structure before the end of the
5.5.1 Original Cost—Original cost is defined in Section 3
project design life, so it will again function as originally
and is normally developed from the engineer’s estimate or is
intended.
the actual bid price. A material, system, or structure may have
3.1.16 residual value—the remaining value of the material,
a service life longer than the project design life and, conse-
system, or structure at the end of the project design life.
quently, would have a residual future current dollar value,
3.1.17 service life—the number of years of service a mate-
which must be discounted back to a present constant dollar
rial, system, or structure will provide before rehabilitation or
value, and subtracted from the original cost. Since mainte-
replacement is required.
nance, rehabilitation, and replacement costs may be incurred
3.1.17.1 Discussion—Project design life and service life are
several times during the life of the project, the future current
usually established by the owner or controlling agency.
dollar value of each occurrence must be discounted back to a
present constant dollar value and the values summed.
4. Significance and Use
5.5.2 Future Costs—Future costs are normally estimated in
4.1 The significance of the LCA method is that it is a
constant dollar values, which are then converted to future
comprehensive technique for taking into account all relevant
current dollar values by an inflation factor and then discounted
monetary values over the project design life and provides a
back to present constant dollar values by an interest factor:
measure of the total cost of the material, system, or structure.
n
FV 5 A~1 1 I! (2)
4.2 The LCA method can be effectively applied in both the
preconstruction and bid stages of projects.After bids are taken,
where:
real costs can be used instead of estimates.
FV = future current dollar value,
A = constant dollar value,
5. Procedures
I = inflation rate, and
5.1 The procedures for determining the LCA of a material,
n = number of years in the future at which costs are
system, or structure can be summarized in five basic steps.
incurred.
5.1.1 Identify Objective, Alternatives, and Constraints.
FV
5.1.2 Establish Basic Criteria. PV 5 (3)
n
~1 1 i!
5.1.3 Compile Data.
5.1.4 Compute LCA for Each Material, System, or Struc-
where:
ture.
PV = present constant dollar value, and
5.1.5 Evaluate Results.
i = interest or nominal discount rate.
5.2 Objectives,Alternatives, and Constraints—Establishthe
Combining Eq 2 and Eq 3:
specific objectives of the project and identify alternative ways
n
1 1 I
of accomplishing the objectives. For example, alternatives for
PV 5 A (4)
S D
1 1 i
a sanitary sewer system may include a gravity flow system
versus a gravity flow system with life stations versus a single Eq 4 is usable, but requires assumptions of both interest and
forcemain.Identifyconstraints,suchasmaximumculverthead inflation rates. Although in
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