ABSTRACT
Life cycle costing (LCC) for buildings is an important tool for involving the client in the early stages of design where decisions affecting quality and cost over the long term are determined. Despite its acknowledged importance, life cycle costing has found limited application (Bakis et al., 2003). As an example, an office building will consume about three times its initial capital cost over a 25-year period, but still more attention is paid to the initial or capital cost (Flanagan and Jewell, 2005). As demonstrated by Kotaji et al. (2003), it is particularly important to show the relation between design choices and the resulting lifetime cost (i.e. energy, maintenance and operations). Many clients have given a low priority to LCC because they are unaware or unconvinced of its benefits. From the client’s perspective, there has to be a clear output motive for using LCC techniques (Cole and Sterner, 2000). Initial cost can be determined easily and reliably, but maintenance and operational cost data are not widely available. Where they are available, they can be less predictable since they must extend into the future. The limited availability of these data can prevent aspiring clients from taking a long-term perspective such that initial cost remains the main basis for decision-making. The absence of a framework for collecting and storing data is given as one cause for this lack of data (Bakis et al., 2003). Industrialization of construction is often put forward as a solution to concerns over quality and cost, and a means by which future costs can be better controlled. None of this thinking is new, although interest seems to have grown significantly over the past few years. Multi-dwelling timberframed housing has been identified as one area for further industrialized process development, particularly in Sweden and other countries where there is a tradition of this form of construction. Against this encouraging background, uncertainty has been expressed by clients and building owners over long-term costs, technical performance and the management of prefabricated, timber-framed housing (Höök, 2005). A particular concern is that the industry’s project orientation can mean the lack of a systematic
and strategic approach to change (Saad et al., 2002). Since project orientation and project culture are endemic, a method that incorporates uncertainties caused by, for example, industrialized housing must be able to work on the project level and, at the same time, stimulate long-term interest in the product. A weakness is seen in the reliability and uncertainties in the methodology of whole life costing. This chapter discusses the limited application of LCC in construction from the perspective of clients and building owners and identifies the advantages and disadvantages of the main theoretical economic evaluation methods for LCC calculation as well as the sources of relevant data. The results of an interview study with building owners are presented, where the objectives were to identify uncertainties surrounding the greater adoption of timber-framed housing and to investigate if LCC could be used to address those particular uncertainties. In the context of this chapter, timber-framed housing is the industrialized production of multi-storey, multidwelling houses.
