Life Cycle Cost Analysis (LCCA) estimates the true cost of a building, or its components over its anticipated lifetime. LCCA includes not only the initial capital cost, but also reflects any available (utility) rebates and operation and maintenance (O&M) costs calculated in present value. MGL Ch. 149 Section 44m and MGL Ch. 164 Section 331 require the Division of Capital Asset Management (DCAM) to consider the life-cycle cost of implementing energy efficient and water conserving technologies, including the use of renewable fuels, in new construction or major renovation projects. This LCCA will evaluate building components that have a bearing on energy use and resource efficiency, including, but not limited to: building envelope, HVAC systems, heat recovery systems, motors and drives, variable air volume systems, cooling towers, lighting, controls, and some sustainable building materials.

DCAM expects design teams to be familiar with the basic economic analysis required to perform LCCA. DCAM's Energy Team is available to guide and facilitate this process with the design team principals. Energy and maintenance costs are to be estimated on an annual basis and should be subject to an annual escalation rate to account for market uncertainties. Both estimated construction costs, and a net present value (NPV) of capital plus energy and O&M costs will be calculated for the expected life of the equipment/system. The LCCA findings will be used by the project team to justify design decisions and to determine the final design.


This information provided by the Division of Capital Asset Management.