Guidance Notes and Rules of Measurement

Since the mid-2000s there has been a proliferation of LCC guidelines and standard methodologies outlining LCC deliverables for different industries and different jurisdictions. Notable examples include the Building Services Research and Information Association’s (BSRIA) ‘guide for Whole-Life Costing Analysis’

(Churcher, 2008); ‘Life Cycle Costing for Sustainable Design’ (Kelly & Hunter,

2009); the Norwegian ‘Users Guide to LCC’ (Gundersen, 1998); New South Wales

Treasury’s, ‘LCC Guideline’ (2004) and Sweden’s Environmental Management

Council’s ‘LCC guide’ (SEMC, 2011). Four documents of note are discussed below

due to their relevance and prevalence in UK and Irish construction industries.

BSI/BCIS Supplement to ISO 15686-5 (2008)

In 2008, the BSI and the British Cost Information Service (BCIS) in UK jointly published a document which put forward a standardised method for producing LCC (BSI/BCIS, 2008) applicable to the UK construction industry. The document

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addresses some of the failings discussed previously, where the BS-ISO 15686-5 (2008) does not provide adequate clarity or guidance for QSs producing LCC estimates other than a standard WBS. The BSI/BCIS 15686-5 (2008) provides a cost data structure and a method of measurement for LCC, which aligns with BS-ISO 15686-5 (2008) and the UKs BCIS cost structure conventions. It delivers further detail in LCC calculations; provides templates to carry out LCC estimates; adds additional classifications to the BS-ISO 156868-5 WBS and furnishes clarity on what type of costs are attributed to each ISO category. Particular emphasis is put on practical application, where the document provides worked examples of LCC calculations and standard spreadsheets for the presentation of LCC during preconstruction and construction stages. One thing it does not do (which would be of benefit carrying out the calculations) is provide the formulae in the proposed templates for automating the LCC calculations. For example, the document provides a relevant WBS and examples of LCC estimates, but does not indicate in these examples how formulae could be constructed to automatically populate the LCC estimates. This is a prevalent issue in LCC and will be discussed in Section 2.6.

SCSI: Guidance Notes on Life Cycle Costing (2010)

In 2010, the Society of Chartered Surveyors Ireland (SCSI), the Irish wing of the RICS, recognising the need to educate their members, formed a ‘Working Group on LCC’. The working group published a ‘Guide to LCC’ (Kehily, 2011) which provided practical guidance and assistance for the Society’s members and QSs in Ireland carrying out LCC and producing LCC estimates in line with Ireland’s CWMF (Kehily & Hore, 2012). The document is different from other guidance notes, as it provides detailed worked examples using financial tables to carry out the calculations and also provides guidance on how LCC calculations can be written as formulae into Microsoft (MS) Excel cells. The group supplements the guide with a LCC MS Excel template (including inherent LCC formulae) and a complete worked example of a WLCC estimate (Kehily, 2011). This is the only guidance document discussed in this section that provides a fully worked example of a WLCC estimate and offers functions in MS Excel to carry out automated calculations. However, it was published for SCSI members in Ireland to aid in producing LCC estimates under the CWMF framework - thus it is not applicable to other jurisdictions and methodologies. This work is included in Chapter 3 because it forms the basis of initial work in the development of the 5D LCC BIM solution.

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BS 8544:2013 Supplement to ISO 15686-5 (2013)

BS 8544:2013 is the second supplementary guide to BS-ISO 15686-5. While the first supplement is for LCC analysis during design and construction, this document is a ‘Guide for life cycle costing of maintenance during the in use phases of buildings’ (BSI, 2013a). The guidance document aligns with the RICS’s NRM schema but because its remit is on cost management during the ‘in-use’ phase; its focus is on facilities management and not construction procurement (BSI, 2013a). However, it is an important document from a QS perspective because it provides a framework to collect data during the operation of the building which could then be used for estimating LCC on similar projects in the earlier stages of the procurement process.

New Rules of Measurement 3 (NRM 3) (2014)

In March 2014, the RICS introduced New Rules of Measurement 3 (NRM 3) (RICS, 2014). As discussed previously in Section 2.3, NRM are a suite of documents that has been developed to provide standard measurement rules for all construction projects in UK. While NRM 1 and NRM 2 deal with cost management for CAPex, NRM 3 (RICS, 2014) provides consistent rules and guidelines for the quantification and measurement of building maintenance and renewal works. NRM 3 is more than a guidance document, in that it provides a detailed set of rules and best practice procedures for different stages of the procurement process aligned to both BS-ISO 15686-5 (2008) and BSI/BCIS (2008) ISO supplement. NRM 3 follows the same methodology as NRM 1 and 2, where it constitutes the summary page, content of LCC estimates, and presents tabulated measurement rules to follow for maintenance and renewal works aligned to the RIBA plan of work. There is significantly more detail in NRM 3 than there are in the SCSI and BSI/BCIS documents or any of the standards discussed above. This could be seen as one of its disadvantages, as it has 250 pages and provides lengthy detail on ‘asset specific cost management’ during the occupancy stage, which QSs generally do not provide cost advice on. One of the main differences with the methodologies discussed above is that NRM 3 focuses on maintenance and renewal works, ignoring ISO 15868-5 WLCC categories such as operations and occupancy costs. By focussing on maintenance and renewal works, NRM 3 does not entirely encompass LCC or even WLCC, because it does not cover the entire ISO 15686-5 WBS illustrated in Figure 2.1. Thus, the WBS structure and classifications in NRM 3 for maintenance and renewal works does not fully align

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with the BSI/BCIS ISO 15686-5 supplement, which is also an RICS (BCIS) publication, so there is reason to question the continuity in both documents and ultimately NRM 3’s alignment with the BS-ISO 15686-5.

NRM 3 pays particular attention to post practical completion facilities cost management which aligns to BS8544: 2013 and presents templates that aid in the production of ‘asset specific cost plans’ (i.e. cost management during the use of the building). The RICS envisages that NRM 3 will become a document used throughout RICS affiliated jurisdictions promoting a standard approach worldwide (RICS, 2014). NRM 3 was published in 2014 after a lengthy consultation process; therefore it is yet to be established how successful it will be in promoting standardisation and whether it will be embraced by the QS profession. A telling sign in this regard is that the RICS are planning to publish a new ‘Guidance Note in Life Cycle Costing’

(currently in the consultation process) (RICS, 2015). The new guidance note contains less detail and content than NRM 3. It is unclear what the relationship between these two documents is and whether the new guidance note replaces the NRM 3 - as both are designated as guidance notes by the RICS. This sends a confusing message, as the RICS feels there is a need to simplify and explain the basics of LCC, very soon after publishing complicated lengthy new rules of measurement.

Summary - Guidance Notes and Rules of Measurement

There is little evidence in the review of literature to indicate the extent of use of the standards or guidance documentation on LCC presented in this section. However, a trail of development can be seen through the references from one publication to the next, which suggests these documents have built on the previous ones and provide increasing clarity culminating with NRM 3. These guidance documents are not mandatory regulations or specifications but documents that provide users with recommendations and approaches for accepted good practice (RICS, 2015). However this is likely to change with a number of legislative proposals initiated by the European Union (EU).