whole life performance lecture south bank university
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Whole Life Performance, Theory, Practice and Latest Developments
Kim Newman – Managing Director
PML (Programme Management) Ltd
BSc MCIPS MBIFM MCMI
Introduction Why consider the long term, what
are the benefits? Who should own the life cycle fund? Theory into practice Latest developments
Whole Life Performance
Roles and ownership
Who Designs Buildings? Who controls the briefing process? What is the Project? (D? B? F? O?) Who should ‘own’ the PM role?
Design / Construct Team?FM team?Financial team?
ClientDesign professionalsQuantity SurveyorFacilities ManagerProject ManagerMain ContractorFundersSPV
Who should manage the Whole Life Performance process?
Who gets involved and when?
Inception/ Feasibilty
ISOP/ ITN ITN/ BAFO Contractual/
Financial Close
Concession
Client
Project Manager
Designers
QS
Facilities Manager
Funders
SPV
Why consider the long term?80% of the cost of running,
maintaining and repairing a building is fixed in the first 20% of the design process (source: Ministry of Defense)
Over a 40 year life, maintenance and repair costs will far exceed the initial capital cost of a building
Ratio of Capital cost to maintenance and operating costs can be 1:5:200
Savings through Whole Life Costing
Who has a long term interest?
Consortium ShareholdersFunders
Construction Management
Facilities Management
Specialist Advisors
Estates Management
Subcontracts Subcontracts
Long term Interests
Design in Tension Competitive tension within the consortia comes from
the SPV's requirements to submit an affordable bid.
If they are smart they will have worked backwards from the affordability figure given by the client and allocated a potential cost to the various elements of the consortium.
How do you define ‘affordable’? Against the Capex criteria? Over the Life Cycle?
• Which one has most sway at the ‘crunch’?
Design in Tension So what should the Client be providing?
A comprehensive Output Specification where they will have listed their requirements for the running of the building, not how to do it, just what they want and occasionally, when they want it.
A comprehensive list of their functional requirements for the core business, again, not how, just what. A guide to the durability standards of building
components and general quality standards which will inform the Life Cycle replacement and maintenance programmes.
Design development should then proceed on the basis of meeting the long term Client requirements.
The ‘Whole Life’ approach...
Predictive approach to asset ownership Considers the future life of components in the
context of their use Uses this information to influence design
specification solutions Based on certain assumptions
That components are well defined in terms of durability.
Design and construction meet good practice. That components are maintained in accordance
with good practice. Assumes data matches installed elements
What was specified may not be what was installed
Design for tomorrow.. Think long term from inception. Quality of ‘the product’ dictates ongoing costs.
80% of the cost of running, maintaining and repairing a building is fixed in the first 20% of the design process (source: Ministry of Defence)
Over a 40 year life, maintenance and repair costs will far exceed the initial capital cost of a building
Ratio of Capital cost to maintenance and operating costs can be 1:5:200 (Source: BAA).
Learn from industry experience. Typically 40% of building defects are caused by errors
or omissions in design/ detailing/specification 40% defects due to errors in construction and poor
workmanship
Think ‘user’….think ‘life’ Advise - Bid / Tender Stage
Design / Spec development - optimisation (Design intent v Operational usage)
Use prediction of life cycle as a design tool (‘Soft and Hard FM issues)
Control - Production Information / Site Works Technical review of design / detailing, optimise life profile Site audits to verify design intent
Insure / Risk Manage - Throughout Lifecycle Latent defects and premature failure / Performance penalties
Monitor - Into the Lifecycle Cyclical inspection and reporting to verify plan profile Procurement of remedial work to meet plan
Feedback - For Future Works
What are the risks? Key Design Stage Risks / LCC Consequence
Overestimate of component life Inadequate specification based on Capex
only. Final design deviates from generic asset
specifications Design fails to recognise FM and
Construction output specifications Contractor deviates from agreed
specifications Building fails to meet post-concession
residual life criteria Acceptance of incorrectly commissioned
facilities
Inadequate whole life cost plan Excessive whole life cost plan
If bid too low - reduced margin. If bid too high - uncompetitive tender
Inadequate whole life cost plan and performance deductions
Potential inability to meet service requirement specifications and increased likelihood of performance and availability deductions
Whole Life Costs and performance flow from design decisions - not just cost analysis
Interfaces/impacts on whole life costs
Whole Life Cycle Design and Management
WHOLELIFE
PERFORMANCE
Detailing(how incorporated in
building)
Deteriorationagents
Maintenance(type, frequency)
Environment(macro/micro, climate)
Quality of component(spec & detailing)
Storage(on site prior to
installation)
Workmanship(how well installed in
building)
Interfaces(between components)
Whole Life Cycle Design and Management Constituent Parts
What is and isn’t part of the life cycle cost?
Who defines it?How is integrity ensured?
What are Whole Life Costs?
Total cost of ownership?
SCHOOLS - LIFE CYCLE FUND - STANDARD BID
0
2,000
4,000
6,000
8,000
10,000
12,000
1-6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Consideration of the total cost of ownership from inception to decommissioning and disposal of an asset.
What methods have been used?Guess !!Percentage of construction costsCost per square metre (£/m2)Previous projectsGeneric models
Methods of prediction
Difference in projected life• I.e CIBSE
Basis of data• I.e previous projects, £/m2
Impact of factors on whole life cycle plan.
Key requirement – empirical data
Factors affecting data accuracy
Typical Whole Life Cost Plan
Insert detail eg**** ELEMENT AREA DESCRIPTION QUANTITY UNIT RATE 1-6 7 8 9 10
4.2 - FLOOR FINISHES Sta irwell/ Entrance hall
Redecorate Pro prietary paint finish to concrete 70 m2 3.00 - 198 - - -
4.2 - FLOOR FINISHES Entrance Foyer Redecorate timber paviours, varnished 105 m2 3.50 347 - - - -
4.2 - FLOOR FINISHES C ourthall 01 Redecorate varnished 561 m2 3.02 - - - 1,595 - 4.2 - FLOOR FINISHES Store 01 Redecorate, painted 23 m2 3.02 - 66 - - - 4.2 - FLOOR FINISHES Store 02 Redecorate, painted 590 m2 3.50 - - - 1,944 - 4.2 - FLOOR FINISHES Foyer Redecorate, varnished 397 m2 3.02 - 1,129 - - -
4.2 - FLOOR FINISHES Yo uth wing ha ll/Store Redecorate, varnished 214 m2 3.02 - 608 - - -
4.2 - FLOOR FINISHES Office 01 Redecorate, varnished 582 m2 3.02 1,654 - - - -
4.2 - FLOOR FINISHES Entrance hall Regrout - 150 x 150 quarry tiles 5 m2 14.12 - - - - -
4.2 - FLOOR FINISHES Water Feature Regrout - 150 x 150mm ceramic tiles to poo l 351 m2 14.12 - - - - -
4.2 - FLOOR FINISHES WC Regrout - 150 x 150mm quarry tiles 9 m2 14.12 - - - - -
4.2 - FLOOR FINISHES Entrance Lobby Regrout - 150 x 150mm quarry tiles 166 m2 14.12 - - - - -
4.2 - FLOOR FINISHES C lo ak room Regrout - 150 x 150mm quarry tiles 35 m2 14.12 - - - - -
4.2 - FLOOR FINISHES Water feature Regrout - 150 x 150mm textured non- slip quarry tiles 168 m2 14.12 - - - - -
4.2 - FLOOR FINISHES Entrance hall Reg rout - 300 x 300 granite tiles 58 m2 14.12 - - - - -
4.2 - FLOOR FINISHES WC Regrout - granite tiles 305 x 305mm 29 m2 14.12 - - - - -
4.2 - FLOOR FINISHES Cafeteria Regrout- 150 x 150 clay tiles 23 m2 14.12 - - - - -
4.2 - FLOOR FINISHES C orridor Regrout- 150 x 150 clay tiles w ith matt well inco rporated 1 Nr 14.12 - - - - -
Elemental Analysis SheetCourt 01 - Element 4.2 - Floor Finishes
Typical Whole Life Cost Plan
Empirical data
What are the key areas of risks within a PFI/PPP project?
How are these measured and managed throughout the project?
How can the resultant whole life cycle risk be managed?
Risk Management
Risk Modelling
0.00
0.02
0.05
0.07
0.10
0.12
16.14 19.62 23.10 26.59 30.07 33.55 37.03
Distribution for Total/Monte Carlo/G14
PROBABILITY
0.0
0.2
0.4
0.6
0.8
1.0
16.14 19.62 23.10 26.59 30.07 33.55 37.03
Distribution for Total/Monte Carlo/G14
Prob ofValue <=X-axisValue
Asset Life Vs Probability
Asset Life Vs Probability
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Asset Life/Yrs
Lif
e S
pa
n P
rob
ab
ilit
y
Budgeted Life
Manufacturer's Life
Optimum Life
Consolidated modelling approach using empirical data within a risk management environment
Independent fund managementInsurance productsSecondary Market and Fund
acquisition
Latest Developments
Whole Life Cycle Fund Management Model
Budgeted Cost
Optimum Cost Comparator
Existing Life Cycle Fund
Data gathering
Technical Audit/
Commercial Analysis
Statistical modelling
Service Improvements/
Insurance Routes
Contract Management/Performance
Monitoring
Know-HowKnow-How
Scenario testing
RIS
K M
AN
AG
EM
EN
T
INFORMATIONFLOWS
CONTROLMECHANISMS
Systems
People
REALITYREALITYGAPGAP
Summary
Maximising the advantages of FM input Learning from Egan - Act early to design and build out
faults Component based empirical data analysis and
performance forecasting Standardised data / structured information Risk management and modelling tool New developments
Questions ??