APEX BUSINESS AND MANAGEMENT CONSULTANTS LTD

Architects, Whole Life Costing

And Client advice
Hector C Sikazwe
2016

AArchitects, Whole life Costing and Client advice

Keywords
Whole Life Costing, Client advice, Costing Methods, Architects, Project Management,
RIBA, ISO15686 Part V, Standards, BIM, Materials, NBS

1
Introduction
Architects are not only smart designers, or ambitious interior decorators, or innovative landscapers
but are also the Clients best advisor and mentor in building investment projects. Clients who have
understood the role of the Architect in building design projects will always demand the optimum
input from the project. Architect.
Increasingly, Clients are getting enlightened in understanding that investment in any building project
is best achieved if the Architect is able to provide the concept of whole life Costing of the project.
Whole Life Costing is defined in the draft International Standard, ISO15686 Part V - as: economic
assessment considering all agreed projected significant and relevant cost flows over a period of
analysis expressed in monetary value. The projected costs are those needed to achieve defined
levels of performance, including reliability, safety and availability.
Purpose of whole life costing and Architects role
Clients have wizened to the fact that not only can Architects produce aesthetically pleasing
drawings, but can also produce and adhere to building information modelling (BIM) documentation
that can help in reducing costs, investment risk, design proficiency and investment viability. Clients
now know that they are supposed to be provided with alternative options when it comes to final
solutions in design, contract administration and monetary disbursements.
Architects are expected to provide the Client with appropriate, sufficient and alternative solutions
when deciding on which option to select for meeting a need or providing a required service. The
Architect must adequately advise the client on how essential it is to consider all the costs involved
in each alternative option available.
The Full Cost of Using an Item
The cost of using an item can be broadly divided into three categories: acquisition, running and
disposal costs. Acquisition costs are incurred before the solution is ready for implementation.
Running costs are incurred as a result of actually using it or keeping it available.

Disposal costs are incurred on disposal or when dealing with site contamination or other harmful
effects. There may also be some income that will be realized on disposal if there are assets with a
resale or residual value. This and any rental income when assets are not in use can be offset
against the costs in determining the whole life cost.
It is important to understand that the policy of achieving value for money applies particularly to the
award stage of the procurement process. It is for the client to decide what to buy and to set the
specification, in the context of their overall operational and policy objectives. It is at this early
specification stage that there is most scope to consider environmental issues. There is a clear
distinction, which is often not understood, between what can legitimately be done at the
specification stage and what can legitimately be done at the award stage.
Whole life costing (WLC) is a powerful tool for calculating the lowest cost options for the entire
commercial life of a building. It encourages the use of best value building designs and reduces the
costs and disruption of unplanned repairs and maintenance
Architects and whole life costing
It is incumbent on the Architect to provide sufficient information to the Client that helps in decision
making for projects that are meant to have long term benefits to the client. The Architect should be
adequately trained to be able to provide professional advice on the costs and material choice for
any project so that the client benefits from the services.
Architects understand costing as being part of intelligent design solutions for projects that can live
up to viable and economically well-thought-of solutions for Clients.
Whole-life Costing addresses costing as a major indicator of good sustainable design solution for
the built environment. The Architect uses cost as part of the matrix of good service that the client
deserves. The Architect is expected to demonstrate that:
(a)

Some of these costs will be incurred at the outset, when equipment is bought or initial
payments are made for service contracts. However, many of the costs will only arise over
the life of the option, for example, as a result of running costs, including energy costs,
equipment maintenance costs, staff training and disposal costs of both the old equipment
and the new equipment at the end of its working life.

(b)

It is important to think in terms of meeting identified needs rather than in terms of

acquiring particular assets (eg lease versus buy). When deciding how to meet a need,
the options considered should include all the practicable ways of meeting that need. An
item which has ordinarily been used to achieve this may not actually be essential for
meeting the objective.

(c)

Cost is not usually the only criterion on which the different options should be evaluated.
There will also be considerations of the quality of the product or the service provided.
Sometimes there will be minimum quality standards to be met. In other cases, different
solutions will offer different advantages. Some of these advantages will relate to quality
and others will relate to cost.

(d)

Costs arising from impacts on the environment, such as clean-up costs, may form part
of the cost in the initial business case. This will then be reflected in the specification.

(e)

Environmental issues must be taken into consideration in the business case and
specification, independently of costs, for example to meet the Executives policy and
objectives on environmental issues, particularly where there is clear government policy,
such as on paper or timber purchases or a clear Executive policy.

Benefits of Whole life costing

Architects will normally ensure that the total costing of a project is taken into consideration when
advising the Client. It is technically challenging for Architects when faced with the task of determining
the total cost of a project from the onset. In order for Architects to determine the total costs and
returns expected from a project, a development budget study is undertaken. Preparation of a cost
plan to include all construction costs, all items of the project costs like professional fees and
contingency are meticulously done.
In addition to the Clients returns, project insurance and specialist advisers fees, are all included
into the development budget. Incidentally, the cost plan allocates the budget to the main elements
of the project in order to provide grounds for cost control. Although the term budget is the limit of
expenditure defined for the project and the Cost plan is the definition of what and when the money
will be spent on, they are often treated as synonymous.

The best possible estimate of the project cash flow and setting targets for future expenditure will be
set out in a cost plan and will cover all stages of the project.

The following are the benefits of being conscious of determining and controlling the costs of any
project from the onset.
Best value design and specification
Knowledge of a building's costs over its full life span is important in achieving best value from both
the capital costs of constructing the building, and the related ongoing costs of operating it. WLC
helps you to make well informed design decisions, and to select the most suitable building
materials, components and systems.
Better building performance
Whole life costing will enable the design solution to minimize disruptions from otherwise unforeseen
problems, for example from unexpected failure of building components that must then be replaced
or repaired. A well planned and costed maintenance programmer (as part of WLC) minimizes the
risks of unexpected costs, disturbance and loss of income for the client.
Durability assessment
The durability assessment service defines requirements for the durability of a building, and
assesses the design, specification and construction proposals against the proposals. This will help
the Architect design solutions to cover and reduce repair and disruption costs, minimize waste and
achieve more sustainable construction solutions.
In specific terms, the Architects services are expected to be endowed with extensive knowledge
with vast experience and knowledge of building and component defects, and, where possible
provide data on future performance is unavailable. The Architects ability to gather and assess
anecdotal evidence should be second to none. Architects competency helps them to make
important decisions such as the impacts of positioning and building massing, designing most
appropriate, sustainable and efficient solutions for the business Best life-cycle value of
specifications.

In the UK, the order of cost estimates is put in context with the RIBA Plan of Work and OGC
Gateway Process, which in turn sets out the rules of measurement for the preparation of order of
cost estimates using the following estimating methods.
Below are the most common methods of estimation that is used:
M2 method
This method is most appropriate at the concept and planning stage of the building design. It is
used to prepare preliminary and intermediate budgets based on historical data. Estimates
prepared using this method are fairly accurate if the design is developed enough to allow
measurement and calculation of floor areas and volumes of proposed spaces. Several historical
databases that are adjusted annually are then used to support this method with costs/m2 and
costs/m3. Architects and many large estimating firms will maintain their own databases. More
accuracy is added to the estimates by making adjustments and additions for location cost indices,
local labor market rates, and interpolation between available cost tables. Overall core and shell
costs and tenant improvement build-out costs of different space types can also be developed from
the estimates this method provides in order to help to determine the impact of change to the
program relatively easily. M2 costing estimates can be expected to be between 5% - 15%
accurate.
Floor area Method
This method is usually used to provide a more reliable costing requirement. The total gross internal
floor area (GIFA) of the building is measured and multiplied by an appropriate cost/m of GIFA.
The equation for calculating the total estimated cost of building works is:
Building works estimate = GIFA x cost/m2
Where the external works are to be measured separately, the site area (SA) is measured. The SA
the total area within the site title boundaries defined by the client as the site for the building),
excluding the new building footprint, measured on a horizontal plane.
Functional unit method
Functional units are a unit of measurement used to represent the prime use of the building. Each
functional unit includes all circulation necessary and must be clearly identified when measurements
are taken this way.

A suitable functional unit of use for the building is selected, then;

Building works estimate = Total number of functional units x functional unit cost
Functional unit can be the net internal area NIA or named i.e. retail area .
Typical parameters of estimating of costs
Any costing must be done in accordance with regional or Countrys plan of works or some standard
way of determining costs In order to prepare an order of cost estimate. Standard information
Architects requirements from the client is summarized in the following elements:
(i)

Location of the site and its availability (usually using specific functional building indices)

(ii)

A statement of building use that cannot be changed anyhow afterwards.

(iii)

Schedule of accommodation

(iv)

Requirements for refurbishment (if the project comprises rehabilitation of an existing

building)

(v)

A Presentation of Initial project/design brief, including statement of quality, sustainability

requirements and fit-out requirements

(vi)

Envisaged details of any enabling works, decanting or other specific requirements,

(vii)

Specific programme schedule including key dates (e.g. planning application and
occupation dates).

(viii)

Specific details of any particular restraints imposed by the client, local planners or
statutory undertakers involved in the project,

(ix)

Engineering and survey details of any particular site conditions (e.g. sloping site,
likelihood of contaminated ground etc.).

(x)

Budget/cash flow constraints that are a predominant prerequisite.

(xi)

Initial views on construction procurement options and contract strategies etc

Conclusion
Whole-life Cost thinking is an essential component of sustainable design. In building design, whole
life costing plays a significant role in supporting economic and natural resource sustainability goals,
and provides a useful backbone to explore and assess the whole life sustainability of any
programme and the consequential outputs. The use of Whole life costing for buildings requires a
set of guiding principles, which consider the unique character of each building design, complexity
in defining systems, and related decisions.
Architects must be able to assess whole-life cost value by balancing capital costs against future
benefits. A durable and efficient design often gives better whole-life value than simply lowering
specification alternatives. Investing more doesnt necessarily give good value: hence the need for
a systematic approach to whole-life assessment that Architects need to provide to the client as part
of good professional services.
Whole life Cost is an emerging tool that promises to aid in architectural decision making. The output
of whole life costing can be thought of as a wide-ranging environmental footprint of a building
including aspects such as energy use, global warming potential, habitat destruction, resource
depletion, and toxic emissions.

References and Bibliography

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Research & Information, p. 368-375.
Draft International Standard, ISO15686 Part V Life Costing
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