750
Cost and Time Analysis: Life Cost
The theory is this discipline will pay off in the long run. But an attempt
to reliably predict actual cost savings in these areas is not feasible.
There are too many variables involved, and not enough field experience
with the particular kind of solution proposed. Not is there any
reasonable way to estimate what it is currently costing the VA to not
have properly accessible and adaptable spaces in terms of physical
plant utilization.
4. In a project constrained to use currently available non-proprietary
products, but directed to improve performance, some increase in first
cost over present methods is implicit. There are prospects of
compensating for this effect quite directly through significant reductions
in design and construction time made possible by the deliberate
detailing of the system for that purpose. But how much of a savings is
realized depends on how far the VA is willing to go in the way of altering
customary decision-making procedures, how well A/E's and building
contractors understand the scheduling benefits of the system, and on
what theoretical basis time savings is translated into cost savings.
752.2
RELATION OF LIFE COST TO FIRST COST
752.2.1
To be justified solely on the basis of long-term cost, any additional first
cost must be "paid for" by savings in housekeeping, maintenance, and
minor and major alterations. The amount of savings required can be
calculated from the additional first cost by discounting it at, say, 5% over
forty years. The trade-off factor under these conditions is 17:1.
752.2.2
For example, if the marginal cost of a systems hospital over conventional
design and construction in a particular case is 8%, then 1/17th of that
amount, or about 0.5% of the first cost of the building must be saved each
year from operating, maintenance and alteration costs to break even in
forty years.
752.2.3
There are many items of operating cost that will not be materially affected
by the Prototype Design, such as dietetic equipment, engineering
supervision, utility costs and elevator maintenance. The three areas
where savings are anticipated are housekeeping, maintenance (including
minor alternations), and major alterations. In the Phase 1 (feasibility)
study, these costs were reviewed for eleven VA hospitals over a three-
year period.
3 - 202
Previous Page
