Lifecycle cost sensitivity

Counting the building in use, construction is 25% of Building A's lifecycle cost over 25 years.

That falls inside the quoted 20% to 30% band, so on this reading the claim holds for this building. Across the three scope boundaries and nothing else, the share on this building runs from 7% to 66.3%, a factor of 9.5.

In the notation the literature argues in, this building is 1 : 0.5 : 12.8. The famous ratio is 1:5:200, which was published without data, could not be replicated, and was described by the people who tried as an urban myth. The paper reproduced here found 1:0.5:12.8, 1:0.4:13 and 1:0.3:9.4 on three real buildings.

Three statements are needed beside any ratio, and this page can only supply two of them honestly. The scope is yours to set and the period is yours to set. Whether the flows are discounted is not offered as a control, because these figures are already discounted to a common base date and the source does not publish the annual profile that would let anybody rediscount them. What it does say is that with finance costs omitted and the money flows left undiscounted, Building A comes out at about 1 : 1 : 30 rather than 1 : 0.5 : 12.8. Quoting that is honest; building a slider on top of it would not be.

There is a fix for this, and it is free. The scope boundary is not unfixable, it is unstated, and ICMS 3 exists to state it: an international standard for classifying and presenting life cycle costs, agreed through the ICMS Coalition by 49 professional bodies, published in full at no cost with its Basis for Conclusions alongside. A ratio whose terms are mapped to a published classification can be compared with another one. A ratio whose terms are not can only be repeated.

What travels with the data. Three buildings is not a sample. UK offices, 1999 prices, 25 years, finance costs included. The authors state their own limits: no regional variation in construction, location or staff costs, and business costs that may omit items such as employer contributions. Their conclusion is that every building has a unique ratio, which is the argument against quoting any single one, this page's included.