Life cycle costing (LCC) is the process of evaluating the total cost of an asset over its whole life, from design and construction through operation, maintenance and replacement to eventual disposal or demolition.
LCC allows design options to be compared on more than capital cost alone. A cheaper component that needs frequent replacement or uses more energy may cost more over the life of the building than a more expensive, durable alternative. Future costs are usually discounted to a present value so that options with different cost profiles can be compared fairly. In the UK, life cycle costing is commonly carried out in line with ISO 15686-5, and NRM 3 provides a framework for estimating the maintenance costs that feed into it.
- Typical inputs include the study period, service lives, maintenance cycles, energy costs and the discount rate.
- Whole life costing is a wider concept that can also include non-construction costs, income and external costs.
Related terms: Whole Life Costing, NRM 3, Facilities Management, Discounted Cash Flow.
