ASTM E2506-11
(Guide)Standard Guide for Developing a Cost-Effective Risk Mitigation Plan for New and Existing Constructed Facilities
Standard Guide for Developing a Cost-Effective Risk Mitigation Plan for New and Existing Constructed Facilities
SIGNIFICANCE AND USE
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. The computer program is described in Appendix X3. Discount Factor Tables has been published by ASTM to facilitate computing measures of economic performance for most of the practices.
Investments in long-lived projects, such as the erection of new constructed facilities or additions and alterations to existing constructed facilities, are characterized by uncertainties regarding project life, operation and maintenance costs, revenues, and other factors that affect project economics. Since future values of these variable factors are generally unknown, it is difficult to make reliable economic evaluations.
The traditional approach to uncertainty in project investment analysis is to apply economic methods of project evaluation to best-guess estimates of project input variables, as if they were certain estimates, and then to present results in a single-value, deterministic fashion. When projects are evaluated without regard to uncertainty of inputs to the analysis, decision makers may have insufficient information to measure and evaluate the financial risk of investing in a project having a different outcome from what is expected.
To make reliable economic evaluations, treatment of uncertainty and risk is particularly important for projects affected by natural and man-made hazards that occur infrequently, but have significant consequences.
Following this guide when performing an economic evaluation assures the user that relevant economic information, including information regarding uncertain input variables, is considered for projects affected by natural and man-made hazards.
Use this guide in the project initiation and planning phases of the project delivery process. Consideration of alternative combinations of risk mitigation stra...
SCOPE
1.1 This guide describes a generic framework for developing a cost-effective risk mitigation plan for new and existing constructed facilitiesbuildings, industrial facilities, and other critical infrastructure. This guide provides owners and managers of constructed facilities, architects, engineers, constructors, other providers of professional services for constructed facilities, and researchers an approach for formulating and evaluating combinations of risk mitigation strategies.
1.2 This guide insures that the combinations of mitigation strategies are formulated so that they can be rigorously analyzed with economic tools. Economic tools include evaluation methods, standards that support and guide the application of those methods, and software for implementing the evaluation methods.
1.3 The generic framework described in this guide helps decision makers assess the likelihood that their facility and its contents will be damaged from natural and man-made hazards; identify engineering, management, and financial strategies for abating the risk of damages; and use standardized economic evaluation methods to select the most cost-effective combination of risk mitigation strategies to protect their facility.
1.4 The purpose of the risk mitigation plan is to provide the most cost-effective reduction in personal injuries, financial losses, and damages to new and existing constructed facilities. Thus, the risk mitigation plan incorporates perspectives from multiple stakeholdersowners and managers, occupants and users, and other affected partiesin addressing natural and man-made hazards.
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 and health practices and determine the applicability of regulatory limitations prior to use.
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Designation: E2506 − 11
StandardGuide for
Developing a Cost-Effective Risk Mitigation Plan for New
1
and Existing Constructed Facilities
This standard is issued under the fixed designation E2506; 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.
INTRODUCTION
Protecting constructed facilities from damages from natural and man-made hazards in a cost-
effective manner is a challenging task. Several measures of economic performance are available for
evaluatingbuilding-relatedinvestments.Thesemeasuresinclude,butarenotlimitedto,life-cyclecost,
present value net savings, savings-to-investment ratio, and adjusted internal rate of return. This guide
provides a generic framework for assessing the risks associated with natural and man-made hazards,
formulating combinations of risk mitigation strategies for constructed facilities exposed to those
hazards, and using measures of economic performance to identify the most cost-effective combination
of strategies.
1. Scope losses, and damages to new and existing constructed facilities.
Thus, the risk mitigation plan incorporates perspectives from
1.1 This guide describes a generic framework for develop-
multiple stakeholders—owners and managers, occupants and
ing a cost-effective risk mitigation plan for new and existing
users, and other affected parties—in addressing natural and
constructed facilities—buildings, industrial facilities, and other
man-made hazards.
critical infrastructure. This guide provides owners and manag-
ers of constructed facilities, architects, engineers, constructors, 1.5 This standard does not purport to address all of the
other providers of professional services for constructed safety concerns, if any, associated with its use. It is the
facilities, and researchers an approach for formulating and responsibility of the user of this standard to establish appro-
evaluating combinations of risk mitigation strategies. priate safety and health practices and determine the applicabil-
ity of regulatory limitations prior to use.
1.2 This guide insures that the combinations of mitigation
strategies are formulated so that they can be rigorously
2. Referenced Documents
analyzed with economic tools. Economic tools include evalu-
2
2.1 ASTM Standards:
ation methods, standards that support and guide the application
E631 Terminology of Building Constructions
of those methods, and software for implementing the evalua-
E833 Terminology of Building Economics
tion methods.
E917 Practice for Measuring Life-Cycle Costs of Buildings
1.3 The generic framework described in this guide helps
and Building Systems
decision makers assess the likelihood that their facility and its
E964 Practice for Measuring Benefit-to-Cost and Savings-
contents will be damaged from natural and man-made hazards;
to-Investment Ratios for Buildings and Building Systems
identify engineering, management, and financial strategies for
E1057 Practice for Measuring Internal Rate of Return and
abating the risk of damages; and use standardized economic
Adjusted Internal Rate of Return for Investments in
evaluation methods to select the most cost-effective combina-
Buildings and Building Systems
tion of risk mitigation strategies to protect their facility.
E1074 Practice for Measuring Net Benefits and Net Savings
1.4 The purpose of the risk mitigation plan is to provide the
for Investments in Buildings and Building Systems
most cost-effective reduction in personal injuries, financial
E1121 Practice for Measuring Payback for Investments in
Buildings and Building Systems
1
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
2
Economics. For referenced ASTM standards, visit the ASTM website, www.astm.org, or
Current edition approved March 1, 2011. Published April 2011. Originally contact ASTM Customer Service at service@astm.org. For Annual Book of ASTM
ε1
approved in 2006. Last previous edition approved in 2006 as E2506 – 06 . DOI: Standards volume information, refer to the standard’s Document Summary page on
10.1520/E2506-11. the ASTM website.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959. United States
1
---------------------- Page: 1 ----------------------
E2506 − 11
E1185 Guide for Selecting Economic Methods for Evaluat- been published by ASTM. A computer program that produces
ing Investments in Buildings and Building Systems economic measures consistent with these practices is avail-
5
E1369 Guide for Selecting Techniques for Treating Uncer-
...
This document is not anASTM standard and is intended only to provide the user of anASTM standard an indication of what changes have been made to the previous version. Because
it may not be technically possible to adequately depict all changes accurately, ASTM recommends that users consult prior editions as appropriate. In all cases only the current version
of the standard as published by ASTM is to be considered the official document.
´1
Designation:E2506–06 Designation: E2506 – 11
Standard Guide for
Developing a Cost-Effective Risk Mitigation Plan for New
1
and Existing Constructed Facilities
This standard is issued under the fixed designation E2506; 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.
1
´ NOTE—Section 2.2 was editorially corrected in January 2009.
INTRODUCTION
Protecting constructed facilities from damages from natural and man-made hazards in a cost-
effective manner is a challenging task. Several measures of economic performance are available for
evaluatingbuilding-relatedinvestments.Thesemeasuresinclude,butarenotlimitedto,life-cyclecost,
present value net savings, savings-to-investment ratio, and adjusted internal rate of return. This guide
provides a generic framework for assessing the risks associated with natural and man-made hazards,
formulating combinations of risk mitigation strategies for constructed facilities exposed to those
hazards, and using measures of economic performance to identify the most cost-effective combination
of strategies.
1. Scope
1.1 This guide describes a generic framework for developing a cost-effective risk mitigation plan for new and existing
constructed facilities—buildings, industrial facilities, and other critical infrastructure. This guide provides owners and managers
of constructed facilities, architects, engineers, constructors, other providers of professional services for constructed facilities, and
researchers an approach for formulating and evaluating combinations of risk mitigation strategies.
1.2 This guide insures that the combinations of mitigation strategies are formulated so that they can be rigorously analyzed with
economic tools. Economic tools include evaluation methods, standards that support and guide the application of those methods,
and software for implementing the evaluation methods.
1.3 The generic framework described in this guide helps decision makers assess the likelihood that their facility and its contents
will be damaged from natural and man-made hazards; identify engineering, management, and financial strategies for abating the
riskofdamages;andusestandardizedeconomicevaluationmethodstoselectthemostcost-effectivecombinationofriskmitigation
strategies to protect their facility.
1.4 The purpose of the risk mitigation plan is to provide the most cost-effective reduction in personal injuries, financial losses,
and damages to new and existing constructed facilities. Thus, the risk mitigation plan incorporates perspectives from multiple
stakeholders—owners and managers, occupants and users, and other affected parties—in addressing natural and man-made
hazards.
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 and health practices and determine the applicability of regulatory
limitations prior to use.
2. Referenced Documents
2
2.1 ASTM Standards:
E631 Terminology of Building Constructions
E833 Terminology of Building Economics
E917 Practice for Measuring Life-Cycle Costs of Buildings and Building Systems
1
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.
Current edition approved Sept. 15, 2006. Published September 2006. DOI: 10.1520/E2506-06E01.
´1
Current edition approved March 1, 2011. Published April 2011. Originally approved in 2006. Last previous edition approved in 2006 as E2506 – 06 . DOI:
10.1520/E2506-11.
2
For referencedASTM standards, visit theASTM website, www.astm.org, or contactASTM Customer Service at service@astm.org. For Annual Book of ASTM Standards
volume information, refer to the standard’s Document Summary page on the ASTM website.
Copyright © ASTM International, 100 Barr Harbor Drive, PO Box C700, West Conshohocken, PA 19428-2959, United States.
1
---------------------- Page: 1 ----------------------
E2506 – 11
E964 Practice for Measuring Benefit-to-Cost and Savings-to-Investment Ratios for Buildings and Building Systems
E1057 Practice for Measuring Internal Rate of Return and Adjusted Internal Rate of Return for Investments in Buildings and
Building Systems
E1074 Practice for Measuring Net Benefits and Net Sa
...
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