Professional Engineers Of North Carolina

SPR 2014

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10 the Professional Engineer Spring 2014 Plotting the relative cost of a complete building over its entire life cycle creates a frame of reference for the cost of operations, maintenance and R&R. A simplifed cost analysis shows the cumulative cost of owning and operating a building can easily be 5 to 10 times the initial cost. Tis curve shows a steady rise over time because of varying system life cycles, with a signifcant R&R expenditure required in the 20- to 25-year range. For a building that costs $5 million to construct initially, the total cost of ownership could exceed $50 million. Initially, this seems an extraordinary amount of money. But it emphasizes the importance of life-cycle analysis during design and construction. Policymakers and legislators rarely make decisions based on life-cycle data. Budget and funding pressures narrow the typical decision-making horizon to only a few years, masking the true impact of today's decisions regarding maintenance and R&R on tomorrow's fnancial responsibilities. Design decisions made in the initial delivery phase can have signifcant impacts on the total cost of a building. Some research suggests a 1:10:100 life cycle cost ratio, where the construction cost is 10 times the design cost, and life-cycle operations, maintenance and repair is a staggering 100 times the design cost. When choosing an engineer and allocating design fees, this ratio confrms the importance of quality engineering decisions over fee-based decisions. Maintenance vs. time What happens to system-service life when maintenance is not performed? Existing studies confrm that service life can be reduced by 20% to 50%, creating several observable efects. First, the cost of maintenance for a given system increases, with dramatic increases in both maintenance and replacement costs, once the design service life is exceeded. Second, an entire life cycle replacement can be added to the life cycle delivery curve. Te above chart shows an overlay of projected life-cycle maintenance and replacement costs with the service life curve previously described. A basic tenet of building design and engineering is to select equipment for design service life. Tis time is less than the full service life, and is defned as the point where system performance reaches a minimum acceptable level. Any time beyond this point, defned as the optimal time for replacement, both the maintenance and replacement costs increase dramatically for a given system. One study concluded that the total cost of "emergency replacement" of a failed system is equal to the square of the cost of the failed part alone, if replaced on schedule. For a $100 bearing in a fan that fails, for example, the emergency replacement cost can be reliably estimated at $10,000. Tis diference arises from the idea that a failed part could result in catastrophic damage to the entire system, requiring complete replacement. Tis replacement cost must at least include increased collateral costs such as overtime labor, damaged fnishes and lost productiv- ity for occupants. Another negative cost result of reduced, delayed or deferred maintenance is an energy cost premium. Maintenance factors such as dirty flters, poorly adjusted equipment, faulty controls and many others, create system inefciencies. Te authors of a separate study demonstrated that lack of maintenance for large HVAC systems can increase energy costs by more than 30%. Tese system losses increase operational costs through energy bills, the size of which will equal and possibly exceed the original savings from reduced maintenance. Replacement vs. time For many years, proponents of deferred mainte- nance have argued that the total maintenance costs for a given system will be less because of shortened service life. Initially, this seems logical and may hold true for some systems and equipment. However, if we return to the relative life cycle cost plot presented earlier, and adjust for more replacements because of shorter life cycles, the total cost of ownership increases dramatically. By adding an entire replacement period F E AT U R E S T O R Y Maintenance cost Minimum performance Design performance Replacement cost C O N D I T I O N T I M E Design service life Optimal time for replacement End of performance life (failure) CostNothing_Spring14.indd 10 3/27/14 11:32 AM

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