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Q&A Recap: Life Cycle Costing Webinar with BUILDINGS

Recently, Gordian and BUILDINGS co-hosted a webinar entitled Prioritize Now or Pay Later: Life Cycle Costing for Facilities.

The moderator of the webinar was Tony Dellamaria, President & Group Publisher of BUILDINGS.

The webinar’s presenter was David Lewek, Principal Consulting Engineer RSMeans. In his role he manages the construction and facilities team of engineers and cost experts that provide life cycle construction and facility management solutions to government and private industry clients.

At the close of the webinar, the floor was open for audience members to send in questions for Mr. Lewek. Below is a transcript of that Q&A session.

To view the full webinar on-demand complete the form below.

Question: My buildings are getting older and older and yet I’m held to the same or less facility management budget year after year. What strategy do you recommend for justifying more money for maintenance? 

Answer: I think it relates back to some of the things we talked about. You’re looking at the facility condition index and you compare yourself to others in similar situations. That typically can set the stage for a more robust maintenance plan. It’s not just you that’s asking for the additional funds. But it’s you in relationship to others in similar positions, and again the FCI can be a great tool to help you with senior management.

Question: In the charts it said that data was based on the U.S. Do you have information for Canada?

Answer: Yes, we do. We really deal with all of North America. We have every province. We have, I believe, 32 different major cities in Canada covered, so you can adjust your prices to those 32 cities in Canada.

Question: Does the data include water and wastewater infrastructure?

Answer: Yes it does. We have data for those types of facilities and those types of projects. The caveat there is when you get into very specialized types of equipment. We’ll have some equipment, we may not have all the equipment and maybe we’ll give you a starting point, we may get you the full pricing point that you’re looking for. Sometimes you have to do a little more digging, and we can help with that too. People, they call us and look for our sources and we’re glad to share them with you. The bottom line is we do have data, sometimes you have to go a little bit further for very specialized equipment.

Question: Can you talk a little bit more about the current replacement costs?

Answer: With current replacement costs we’re trying to approximate the replacement of the building, not exactly the way it was built in 1937 or 1974, but with today’s materials and today’s building technologies, the current replacement cost for a similar building in today’s environment is what we’re trying to approximate.

Question: Does the cost data provided require contingency, if so could you recommend a percentage?

Answer: Great question. Especially on the older side, we never want to be, at least I never wanted to be in the position to go back and ask for more money. The best laid projects, the best plans, the best architectural engineering teams, the best builders, the best teams always run into some difficulties, and we usually have to make some adjustments along the way here. So from an owner’s perspective a contingency’s appropriate. If I was a contractor and I start adding a contingency it’s probably going to get me out of the chance to win a bid, so we’re very judicious with applying a contingency. As an owner I like to put a modest contingency. We can always pat ourselves on the back and say we came in under budget if we’re putting a 10% contingency on. But bear in mind, what often happens in an organization, this happens to me, I put a contingency on, my boss doesn’t trust me, he or she puts a contingency on, their boss has seen so many construction or maintenance projects go bust that they put a contingency on. Now they get a huge number, well it’s going to come in under budget. But what I feel that does, now you’re tying up funds that could’ve been used for other projects. So yes, I like a contingency, I like to keep it modest. If you’ve got a good design team, if you’ve talked the project scope through correctly, a more modest 3-5% contingency might be appropriate. If there are many unknowns then you’re creeping up to double digits because the project isn’t extremely well defined yet. 

Question: If I haven’t been keeping up with a good preventative maintenance schedule how do you suggest I prioritize the items needed?

Answer: I think, again, I’ve gone to a lot of organizations where they do a pretty good job, but they don’t have a formal plan. Towards the end of my presentation we looked at a slide on preventative maintenance, I think it was a water heater, and we had 19 different tasks listed there. When users of data realize that there’s something out there like this they can replicate themselves, that only sets them up with a starting point, and they can tweak it to their own world and make it appropriate for their environment, but to get an organized system in place and have something as a starting point, this is the type of thing that I showed is available and it’s not very expensive and you can set yourself up for better success in the future.