Life cycle management in procurements and construction
Life cycle assessment is widely used in construction to assess environmental impacts, whereas life cycle costing is carried out to a lesser degree.
The goal of the assessment
The main question of the assessment was whether life cycle costing and alternative calculations have been promoted in City procurement in line with the Procurement Strategy. Life cycle assessment is a method of calculating the environmental and other costs of products over their life cycle. In life cycle costing, this quantitative information is converted into life cycle costs, savings and revenues. The assessment looked at the Urban Environment Division’s development of premises, housing and public areas as a case study.
Conclusions
The assessment did not provide an overall picture of whether life cycle costing has been increased. The contract management system did not provide reliable information on the number and increase in economic value of procurements made using life cycle and impact calculations. The assessment found that it is too late to carry out life cycle assessment and life cycle costing in the procurement phase. In the services examined as a case study, life cycle assessment of the environmental impact of construction was carried out extensively, and life cycle costing was conducted for some projects, but only within their respective area of responsibility. There is no shared understanding between those responsible for planning, construction and operation of a project on the costs and environmental impacts throughout the project’s life cycle.
Recommendations of the Audit Committee
The City Executive Office must
- take into account when updating the City’s procurement-related objectives that lifecycle cost calculations are to take place before the actual procurement phase.
- improve the reliability of the entries made in the agreement management system regarding responsibility and environmental criteria.
The Urban Environment Division must
- ensure a shared understanding of lifecycle assessments and cost calculations across services, so that the environmental impacts and costs of a project throughout its lifecycle can be taken into account.
- increase dialogue between the parties responsible for the planning, construction and use of a building, enabling the project operators to select an alternative that is cost-effective and environmentally friendly throughout the lifecycle of the project.