3.1 The significance of the LCA method is that it is a comprehensive technique for taking into account all relevant monetary values over the project design life and provides a measure of the total cost of the material, system, or structure.3.2 The LCA method can be effectively applied in both the preconstruction and bid stages of projects. After bids are taken, real costs can be used instead of estimates.1.1 This practice covers procedures for least cost (life cycle) analysis (LCA) of materials, systems, or structures proposed for use in the construction of concrete culvert, storm sewer, and sanitary sewer systems.NOTE 1: As intended in this practice, examples of analyses include, but are not limited to the following: (1) materials-pipe linings and coatings, concrete wall thicknesses, cements, additives, etc.; (2) systems-circular pipe, box sections, multiple lines, force mains, etc.; and (3) structures-wet and dry wells, pump and lift stations, etc.1.2 The LCA method includes costs associated with planning, engineering, construction (bid price), maintenance, rehabilitation, replacement, and cost deductions for any residual value at the end of the proposed project design life.1.3 For each material, system, or structure, the LCA method determines in present value constant dollars, the total of all initial and future costs over the project design life, and deducts any residual value.1.4 Major factors in the LCA method include project design life, service life, and relevant interest and inflation rates.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 LCC analysis is an economic method to evaluate alternatives that are characterized by differing cash flows over the designated project design life. The method entails calculating the LCC of each alternative capable of satisfying the functional requirements of the project and comparing them to determine which have the lowest estimated LCC over the project design life.5.2 The LCC method is particularly suitable for determining whether the higher initial cost of an alternative is economically justified by reductions in future costs (for example, operating maintenance, rehabilitation, or replacement) when compared to an alternative with lower initial costs but higher future costs. If a design alternative has both a lower initial cost and lower future costs than other alternatives, an LCC analysis is not necessary to show the former is the economically preferable choice.1.1 This practice establishes a procedure for using life cycle cost (LCC) analysis techniques to evaluate alternative drainage system designs, using plastic pipe that satisfy the same functional requirements.1.2 The LCC technique measures the present value of all relevant costs to install, operate, and maintain alternative drainage systems such as engineering, construction, maintenance, rehabilitation, or replacement over a specified period of time. The practice also accommodates any remaining residual or salvage value.1.3 The decision maker, using the results of the LCC analysis, can then identify the alternative(s) with the lowest estimated total cost based on the present value of all costs.1.4 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 Investments in projects supporting community resilience are characterized by uncertainties regarding the frequency and magnitude of natural, technological, and human-caused disruptions. Accounting for these low-probability, high-consequence events challenge traditional economic evaluation methods.5.2 The traditional approach to evaluating the benefit-cost of investment decisions routinely focus on measures directly tied to loss avoidance.5.3 Following this guide when performing an economic evaluation assures the user that relevant economic information, including information regarding uncertainties and indirect inputs, is considered for capital project facing possible disruptions from natural, technological, and human-caused hazards.5.4 Use this guide in the planning phases of community resilience plan development process. Consideration of risk mitigation choices early in the planning process allows both greater flexibility in addressing specific hazards and lower costs associated with their implementation.5.5 Use this guide to integrate community resilience plans with economic development, zoning, hazard mitigation, and other community planning activities that affect buildings, public works, and infrastructure systems.5.6 Use this guide to identify all relevant inputs—that is, costs and benefits (savings)—associated with construction, implementation, and use of the capital asset, over the lifetime of the asset. Relevant inputs include direct, indirect and externalities, and non-market values.5.7 Use this guide for economic evaluations based on Practices E917 (life-cycle costs), E964 (benefit-to-cost and savings-to-investment ratios), E1057 (internal rate of return and adjusted internal rate of return), E1074 (net benefits and net savings), E1121 (payback), E1699 (value engineering), and E1765 (analytical hierarchy process for multi-attribute decision analysis), and Guide E1369 (treatment of uncertainty).5.8 Use this guide in conjunction with Guide E2204 to summarize the results of economic evaluations involving natural, technological, and human-caused hazards.5.9 This guide generalizes Guide E2506 (cost-effective risk mitigation plan for new and existing constructed facilities) by evaluating investments into capital assets for a community.1.1 This guide describes a generic economic methodology for evaluating investment decisions aimed to improve the ability of communities to adapt to, withstand, and quickly recover from, disruptive events. The methodology describes a framework for developing cost-effective community resilience strategies for new and existing constructed facilities—buildings, industrial facilities, and other critical infrastructure. This guide provides owners and managers of constructed facilities, architects, engineers, constructors, other providers of professional services for constructed facilities, and researchers and analysts with an approach for planning and comparing resilience strategies.1.2 This guide frames the economic decision process by identifying and comparing the relevant present and future streams of costs and benefits to a community—the latter realized through cost savings and damage loss avoidance—associated with new capital investment into resilience to those generated by the status-quo.1.3 This guide provides a means to increase the capacity of communities to objectively and effectively compare and contrast capital investment projects through consideration of benefits and costs while maintaining an awareness of system resilience. Topics related to non-market values and uncertainty are also explored.1.4 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 LCC analysis is an economic method for evaluating alternatives that are characterized by differing cash flows over the designated project design life. The method entails calculating the LCC of each alternate capable of satisfying the functional requirement of the project and comparing them to determine which has (have) the lowest estimated LCC over the project design life.5.2 The LCC method is particularly suitable for determining whether the higher initial cost of an alternative is economically justified by reductions in future costs (for example, operating maintenance, rehabilitation, or replacement) when compared to an alternative with lower initial costs but higher future costs. If a design alternative has both a lower initial cost and lower future costs than other alternatives, an LCC analysis is not necessary to show that the former is the economically preferable choice.1.1 This practice covers a procedure for using life-cycle cost (LCC) analysis techniques to evaluate alternative drainage system designs using corrugated metal pipe that satisfies the same functional requirements.1.2 The LCC technique measures the present value of all relevant costs of installing, operating, and maintaining alternative drainage systems, such as engineering, construction, maintenance, rehabilitation, or replacement, over a specified period of time. The practice also accommodates any remaining residual or salvage value.1.3 Using the results of the LCC analysis, the decision maker can then identify the alternative(s) with the lowest estimated total cost based on the present value of all costs.1.4 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 In addition to its cost management and project management functions, the ECES can also be used to support a number of other program and project functions. These functions include:5.1.1 Bid solicitation, collection, and evaluation;5.1.2 Communicating project data between installations, complexes, agencies, and industry;5.1.3 Providing a project checklist;5.1.4 Cost and schedule estimating;5.1.5 Historical cost/schedule data collection;5.1.6 Historical project data collection (for example, technology deployments, project conditions);5.1.7 Validating and calibrating cost estimates and software tools; and5.1.8 Establishing and disseminating best practices and lessons learned.5.2 Several government agencies are already incorporating this structure into existing and future cost estimating models, databases, and other similar software tools and systems.1.1 The Environmental Cost Element Structure (ECES) covered by Classification E2150 (and Adjunct E2150) provides a consistent and comprehensive structure across all phases of environmental remediation projects and is a tool to improve the cost management of those projects. This guide is intended to facilitate the application of the ECES to any environmental remediation project, without regard to project size.1.2 Classification E2150 establishes the broad, top-level framework for environmental remediation projects by providing a hierarchical list of project elements to two levels of detail. Its associated Adjunct E2150 supports the top-level structure by providing more detailed elements and definitions of the ECES to three additional levels of detail. Although it is assumed that the user is familiar with Classification E2150, much of the content of the classification is repeated in this guide to relieve the user of the burden of back-and-forth referencing during use. It is assumed, however, that all users of this guide will have at hand both Classification E2150 and the Adjunct E2150 during project planning.1.3 The values stated in SI units are to be regarded as standard. No other units of measurement are included in this standard.1.4 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety and health practices and determine the applicability of regulatory limitations prior to use.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 This practice increases the level of communication, provides an organized approach to cost control during the design of a project, and also provides a means of identifying extraordinary cost items and changes in assumptions between estimates.5.2 The users of this practice include owners, developers, contractors, cost professionals, estimators, architects, engineers, specification writers, quantity surveyors, and anyone charged with the responsibility of successfully managing the design of a building and its related site work within a specified project budget.5.3 Use this reporting format during the following:5.3.1 Contracting for design cost analysis services,5.3.2 Comparing the current design costs to a previous estimate, and5.3.3 Responding to each design phase.5.4 This practice provides a tool for analyzing design options and examining strategies to maintain the project budget.1.1 This practice covers an arranged method for providing cost analysis during the design phase of a building project.1.2 The use of this practice increases the level of communication between the design professional, owner, and the cost professional providing the cost consulting services.1.3 The practice establishes a structured method to support design decisions.1.4 The practice provides design and cost professionals with a framework for historically tabulating information to be used on relevant future projects.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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This guide will evaluate sample data that contain a high level of uncertainty for decision-making purposes and, where it is feasible, design a statistical study to estimate and reduce the sources of uncertainty. Oftentimes, historical data may be available and adequate for this purpose and no new study is needed.3.1.1 This approach will help the stakeholders better understand where the greatest sources of uncertainty are in the sampling and analysis process. Resources can be directed to where they can most reduce the overall uncertainty.3.1.2 Sampling and analysis design under this approach can often be cost-efficient because (a) the reduction in uncertainty can be done by statistical means alone and (b) the reduction can be translated into a lower number of analyses.This guide is limited to the situation where a decision is based on the mean of a population. It will only include discussions of a balanced design for the collection and analysis of sample data in order to estimate the sources of uncertainty. References to unbalanced designs are provided where appropriate.1.1 Waste management decisions generally involve uncertainty because of the fact that decisions are based on the use of sample data. When uncertainty can be reduced or controlled, a better decision can be achieved. One way to reduce or control uncertainty is through the estimation and control of the components contributing to the overall uncertainty (or variance). Control of the sizes of these variance components is an optimization process. The optimizations results can be used to either improve an existing sampling and analysis plan (if it should be found to be inadequate for decision-making purposes) or to optimize a new plan by directing resources to where the overall variance can be reduced the most.1.2 Estimation of the variance components from the total variance starts with the sampling and measurement process. The process involves two different kinds of uncertainties: random and systematic. The former is associated with imprecision of the data, while the latter is associated with bias of the data. This guide will discuss only sources of uncertainty of a random nature.1.3 There may be many sources of uncertainty in waste management decisions. However, this guide does not intend to address the issue of how these sources are identified. It is the responsibility of the stakeholders and their technical staff to analyze the sampling and measurement processes in order to identify the potentially significant sources of uncertainty. After identifying these sources, this guide will provide guidance on how to collect and analyze data to obtain an estimate of the total uncertainty and its components.

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5.1 LCC analysis is an economic method for evaluating alternatives that are characterized by differing cash flows over the designated project design life. The method entails calculating the LCC of each alternate capable of satisfying the functional requirement of the project and comparing them to determine which has (have) the lowest estimated LCC over the project design life.5.2 The LCC method is particularly suitable for determining whether the higher initial cost of an alternative is economically justified by reductions in future costs (for example, rehabilitation, or replacement) when compared to an alternative with lower initial costs but higher future costs. If a design alternative has both a lower initial cost and lower future costs than other alternatives, an LCC analysis is not necessary to show that the former is the economically preferable choice.1.1 This practice covers a procedure for using life-cycle cost (LCC) analysis techniques to evaluate alternative corrosion protection system designs that satisfy the same functional requirements.1.2 The LCC technique measures the present value of all relevant costs of producing and rehabilitating alternative corrosion protection systems, such as surface preparation, application, construction, rehabilitation, or replacement, over a specified period of time.1.3 Using the results of the LCC analysis, the decision maker can then identify the alternative(s) with the lowest estimated total cost based on the present value of all costs.1.4 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 The results of the analysis may be used to compare to similar pieces of commercial food service equipment to determine the unit that has the lowest life cycle cost, or the highest net present value.1.1 This practice for life cycle cost analysis of commercial food service equipment is designed for producers and end-users to utilize when forecasting and (or) evaluating the life cycle costs of equipment by accounting for tangible differences in operating and maintenance costs of commercial food service equipment. Results of the analysis detailed in this standard practice are intended for budgetary purposes.1.1.1 The results may also be used to compare projected life cycle cost of different models from a single manufacturer, or models manufactured by multiple suppliers, or to establish when it is cost effective to replace a specific equipment versus incurring continued maintenance expenses.1.2 Major categories included in this analysis include total purchase price, service and repair costs, preventative maintenance costs, utility operating costs and disposal costs. The results may be quantified as a yearly running total and a net present value.1.3 Inputs for this life-cycle analysis will need to come from a variety of sources, including manufacturers, service agents, utility companies, and end users. Not all input variables need be considered for effective analysis. To avoid skewing the results, sections where reliable estimates are not available should be left out of the analysis.1.4 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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4.1 This classification identifies and hierarchically arranges the work elements, activities, and tasks required for environmental projects. This classification increases the level of communication and allows for more effective exchange of cost and performance data between environmental projects.4.2 This classification defines environmental work elements as major components of environmental projects. It is the common thread linking activities and participants in an environmental project from initial planning through operations and maintenance, D&D, and SLTM.4.3 The users of ECES include program and project managers, cost estimators, and cost analysts in both the public and private sector.4.4 This classification uses an increased level of standardization, uniformity, and consistency that provides a common basis for comparing, analyzing, and calibrating cost data. This classification can also be used as a checklist of project activities to be completed.4.5 Use this classification when:4.5.1 Developing a company-specific Code of Accounts (COAs) for capturing and reporting cost early in the project development for more effective project controls and management. COA is a logical breakdown of a project into controllable elements for the purpose of cost collection, control, and reporting. COA is organized at lower detailed levels that summarize to higher levels and is company or site, or both, and project-specific.4.5.2 Developing a work breakdown structure (WBS) early in the project development for proper management of the project. The WBS provides a framework for managing the cost, schedule, and performance objectives of a project. This framework allows the project to be separated into logical components and makes the relationship of the components clear. The WBS defines the project in terms of hierarchically related action and product-oriented elements. Each element provides logical summary points for assessing technical accomplishments and for measuring cost and schedule performance.4.5.3 Supporting programs and project functions. Use ECES for bid solicitation, collection, and evaluation; communicating project data between installations or agencies and industry; cost and schedule estimating; historical cost and schedule data collection; historical project data collection for technology deployments and project conditions; validating and calibrating cost estimates and software tools; and establishing and disseminating best practices and lessons learned.4.6 The hierarchical nature of the classification allows for collecting data using more detailed lower level elements or for summarizing data at higher levels.4.7 ECES, as described in this classification, is being included in the Remedial Action Cost Estimating Requirement (RACER)6 system and the Environmental Cost Analysis System (ECAS).7 RACER is used for estimating cost and ECAS is used to collect, maintain, and analyze the cost of completed projects. Federal agencies performing environmental work intend to incorporate the ECES.1.1 This standard establishes a classification of the comprehensive hierarchical list of elements for life-cycle environmental work. The classification is based on the Interagency Environmental Cost Element Structure (ECES).2 Elements, as defined here, are major components common to environmental projects.3 The elements represent the life-cycle activities for environmental projects regardless of the project design specification, construction method, technology type, or materials used. The classification serves as a consistent reference for cost estimating, analysis, and monitoring during the various phases of the project life cycle. Using ECES ensures consistency, over time and from project to project, in the cost management and performance measurement of environmental projects. It also enhances reporting at all phases of a project, from assessment and studies through design, construction, operations and maintenance (O&M), and surveillance and long-term monitoring (SLTM).1.2 This classification applies to all environmental work, including environmental restoration, waste management, decontamination and decommissioning (D&D), surveillance and long-term monitoring, and technology development.1.3 The use of this classification increases the level of standardization, uniformity, and consistency of collected environmental project costs. Such uniformity and standardization allows for ease of understanding project costs, provides a common “cost language” for sharing and comparing cost information, and allows for easier analysis and calibration of cost data. This standard classification can be used as a checklist of activities to be completed in environmental projects.1.4 Guide E2637 is intended to facilitate the application of the ECES to any environmental remediation project, without regard to project size.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 For agencies and institutions, measuring and managing the LCC of ownership of property may directly result in improved accountability, in the form of cost savings, increased asset utilization, extended asset life, and increased mission effectiveness.5.2 For companies, measuring and managing the LCC of ownership of property may directly result in cost savings, increased asset utilization, and, therefore, improved profit margins.5.3 Including LCC in the three stages is consistent with Practice E2279 under the reporting principle.1.1 This practice covers the establishment of a process consensus model for determining the life-cycle cost (LCC) of property assets owned or used by an entity.1.1.1 For businesses, these property assets are required to seek to achieve financial returns from producing and selling goods or services, or both.1.1.2 For institutions and agencies, these property assets are required to accomplish their primary mission.1.2 Real and personal property assets may include capital (fixed) assets and movable assets including customer-supplied assets, rental/leased assets, contract/project direct-purchased assets, or expense items.1.3 Asset service lives can be divided into three distinct stages, each with several separate yet interrelated substages: acquisition, utilization, and disposition. These primary stages are not intended to be all-encompassing but are offered as the basis for establishing LCC.1.4 This practice is expected to be primarily used for considering the life-cycle cost of personal property, however, the concept can and should be used for various types of assets including personal, real, tangible, and intangible.1.5 This practice does not supersede applicable generally accepted accounting principles but is intended to be consistent with the accounting principles particularly in the area of internal controls (see the GAO Green Book) and processes and requirements for estimating. Some life-cycle cost estimating may be required for accounting purposes. (See AS 2501.)1.6 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and to determine the applicability of regulatory limitations prior to use.1.7 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 The BCR and SIR provide measures of economic performance in a single number that indicates whether a proposed building or building system is preferred over a mutually exclusive alternative that serves as the base for computing the ratio. It may be contrasted with the life-cycle cost (LCC) method that requires two LCC measures to evaluate the economic performance of a building or building system—one for each alternative.5.2 The ratio indicates discounted dollar benefits (or savings) per dollar of discounted costs.5.3 The BCR or SIR can be used to determine if a given building or building system is economic relative to the alternative of not having it.5.4 The BCR or SIR computed on increments of benefits (or savings) and costs can be used to determine if one design or size of a building or system is more economic than another.5.5 The BCR or SIR can be used as an aid to select the economically efficient set of projects among many competing for limited funding. The efficient set of projects will maximize aggregate net benefits or net savings obtainable for the budget.1.1 This practice covers a procedure for calculating and interpreting benefit-to-cost ratios (BCR) and savings-to-investment ratios (SIR) as an aid for making building-related decisions.1.2 A basic premise of the BCR and SIR methods is that future as well as present benefits and costs arising from a decision are important to that decision, and, if measurable in dollars, should be included in calculating the BCR and SIR.1.3 Dollar amounts used to calculate BCR and SIR are all discounted, that is, expressed in time-equivalent dollars, either in present value or uniform annual value terms.1.4 The values stated in inch-pound units are to be regarded as standard. The values given in parentheses are mathematical conversions to SI units that are provided for information only and are not considered standard.1.5 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.1.6 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 Measuring cost risk enables owners of buildings and other constructed projects, architects, engineers, and contractors to measure and evaluate the cost risk exposures of their construction projects.3 Specifically, cost risk analysis (CRA) helps answer the following questions:5.1.1 What are the probabilities for the construction contract to be bid above or below the estimated value?5.1.2 How low or high can the total project cost be?5.1.3 What is the appropriate amount of contingency to use?5.1.4 What cost elements have the greatest impact on the project’s cost risk exposure?5.2 CRA can be applied to a project's contract cost, construction cost (contract cost plus construction change orders), and project cost (construction cost plus owner's cost), depending on the users’ perspectives and needs. This practice shall refer to these different terms generally as “project cost.”1.1 This practice covers a procedure for measuring cost risk for buildings and building systems and other constructed projects, using the Monte Carlo simulation technique as described in Guide E1369.1.2 A computer program is required for the Monte Carlo simulation. This can be one of the commercially available software programs for cost risk analysis, or one constructed by the user.1.3 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.1.4 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 Standard practices for measuring the economic performance of investments in buildings and building systems have been published by ASTM. A computer program that produces economic measures consistent with these practices is available.5 The computer program is described in Appendix X3. Discount Factor Tables has been published by ASTM to facilitate computing measures of economic performance for most of the practices.5.2 Investments in long-lived projects, such as the erection of new constructed facilities or additions and alterations to existing constructed facilities, are characterized by uncertainties regarding project life, operation and maintenance costs, revenues, and other factors that affect project economics. Since future values of these variable factors are generally unknown, it is difficult to make reliable economic evaluations.5.3 The traditional approach to uncertainty in project investment analysis is to apply economic methods of project evaluation to best-guess estimates of project input variables, as if they were certain estimates, and then to present results in a single-value, deterministic fashion. When projects are evaluated without regard to uncertainty of inputs to the analysis, decision-makers may have insufficient information to measure and evaluate the financial risk of investing in a project having a different outcome from what is expected.5.4 To make reliable economic evaluations, treatment of uncertainty and risk is particularly important for projects affected by natural and man-made hazards that occur infrequently, but have significant consequences.5.5 Following this guide when performing an economic evaluation assures the user that relevant economic information, including information regarding uncertain input variables, is considered for projects affected by natural and man-made hazards.5.6 Use this guide in the project initiation and planning phases of the project delivery process. Consideration of alternative combinations of risk mitigation strategies early in the project delivery process allows both greater flexibility in addressing specific hazards and lower costs associated with their implementation.5.7 Use this guide for economic evaluations based on Practices E917 (life-cycle costs), E964 (benefit-to-cost and savings-to-investment ratios), E1057 (internal rate of return and adjusted internal rate of return), E1074 (net benefits and net savings), E1121 (payback), E1699 (value engineering), and E1765 (analytical hierarchy process for multi-attribute decision analysis).5.8 Use this guide in conjunction with Guide E2204 to summarize the results of economic evaluations involving natural and man-made hazards.1.1 This guide describes a generic framework for developing a cost-effective risk mitigation plan for new and existing constructed facilities—buildings, industrial facilities, and other critical infrastructure. This guide provides owners and managers of constructed facilities, architects, engineers, constructors, other providers of professional services for constructed facilities, and researchers an approach for formulating and evaluating combinations of risk mitigation strategies.1.2 This guide insures that the combinations of mitigation strategies are formulated so that they can be rigorously analyzed with economic tools. Economic tools include evaluation methods, standards that support and guide the application of those methods, and software for implementing the evaluation methods.1.3 The generic framework described in this guide helps decision-makers assess the likelihood that their facility and its contents will be damaged from natural and man-made hazards; identify engineering, management, and financial strategies for abating the risk of damages; and use standardized economic evaluation methods to select the most cost-effective combination of risk mitigation strategies to protect their facility.1.4 The purpose of the risk mitigation plan is to provide the most cost-effective reduction in personal injuries, financial losses, and damages to new and existing constructed facilities. Thus, the risk mitigation plan incorporates perspectives from multiple stakeholders—owners and managers, occupants and users, and other affected parties—in addressing natural and man-made hazards.1.5 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.1.6 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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5.1 Significance: 5.1.1 The application of elements (see 3.1.1 and Terminology E833) to the description and the summary and analysis of building construction cost provides a consistency, commonality, and utility through all stages of design that other forms of estimate presentation do not.5.1.2 This practice describes a simple format for elemental cost analysis presentation that is both valuable and informative when used during the various design stages of construction development.5.2 Use—Users include owners, developers, contractors, cost professionals, estimators, architects, engineers, quantity surveyors, facility managers, and others involved in property development, construction, maintenance, and management.5.2.1 Reporting—Cost reports structured by elements provide estimates, summaries, and analyses by applying “Cost to Function.” This application works whether the approach is “Design to Cost” or “Cost to Design.” Value analysis is greatly assisted through the allocation of estimated cost to elements.5.2.2 Controlling—Comparison of progressively more detailed estimates is simplified where cost is allocated to appropriate elements regardless of design or specification, permitting efficient review and checking of new estimates. Design estimating using elements allows for benchmarking and the setting of cost limits (baseline) for a building design from the outset, and also permits the establishment of an elemental cost plan (see 3.2.1). Baseline records and cost plans are accessed and compared with current reports.5.2.3 Recording—Historic and baseline cost records are easily kept for all forms of building construction, and in a format that can be used for the planning and design of future projects.5.2.4 Other Uses—Elemental summaries and analyses are equally useful in forensic estimating and in quantitative risk analysis.5.2.5 Relationship to “Trade” Estimating—Traditional trade (or construction) estimating summarizes cost to a product, or trade classification. This is valuable when construction work has been fully specified or contracted, but is less so through the planning and design stages. The two systems (trade and elemental) are compatible in that they both relate to the same end product, for example, a building; they differ solely in the way cost is aggregated. Each estimate form can be converted to the other by coding or allocating each construction component to an appropriate trade/product division or element. During design evolution, changes in design and specification can make trade estimates difficult to compare with previous or other, or both, estimates and so can hinder the process of cost control during the design phase.5.2.6 Additional Narrative Information—While costs presented in these formats are descriptive in themselves they do not tell the full story of a project’s design. Narrative description of the construction work should also be an integral part of any complete presentation. Reference and description of this narrative form can be found in Practice E1804, and in Classification E1557 Appendix X3—Preliminary Project Description (PPD).5.3 A detailed description of the presentation formats now follows. These descriptions are provided in eight sections, each intended to aid understanding of a particular facet of the formats:Appearance Section 6Element Inclusions and Exclusions Section 7Basic Rules Section 8Layout Section 9Numeric Precision Section 10Estimate Calculation Section 11Analysis Calculation Section 12Variations and Additions Section 131.1 This practice covers the concurrent use of relevant ASTM standards for the preparation of elemental cost estimates, summaries, and analyses and specifically their presentation in a concise, consistent, and logical manner.1.2 While the style and directions use construction terms applied to buildings, the principles apply equally well to other forms of construction where appropriate elemental classifications exist.1.3 This practice is not an estimating manual, nor is it a guide to the skills and knowledge required of an estimator or other cost professional.NOTE 1: The skills and knowledge acquired by a trained and experienced estimator are essential to the successful application of any elemental presentation format. They are the foundation of any estimate and the underpinning knowledge required when applying the elemental technique.1.4 This standard does not purport to address all of the safety concerns, if any, associated with its use. It is the responsibility of the user of this standard to establish appropriate safety, health, and environmental practices and determine the applicability of regulatory limitations prior to use.1.5 This international standard was developed in accordance with internationally recognized principles on standardization established in the Decision on Principles for the Development of International Standards, Guides and Recommendations issued by the World Trade Organization Technical Barriers to Trade (TBT) Committee.

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