Life cycle costing (LCC) as a contribution to sustainable construction ...

Towards a common European methodology for Life Cycle Costing (LCC) – Guidance Document
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13 Integration of LCC into tenders for infrastructure projects – e.g.
A4 Burgerveen - Leiden for Dutch Ministry of Transport, Public
Works & Water Management
Project description
Project title – Integration of LCC into tenders for
infrastructure projects e.g. A4 Burgerveen – Leiden in
Netherlands
Category – Infrastructure projects for Ministry of
Transport, Public Works & Water Management in
Netherlands
General project information – The Dutch Ministry of
Transport, Public Works and Water Management
(Rijkswaterstaat) has awarded the widening of the A4
motorway between Burgerveen and Leiden to BAM Civil.
Van Oord Nederland realises the design and execution of
some 1,600,000 m3 of ground works in a subcontract. To
accelerate the consolidation process, 1.5 million m of
vertical drainage will be installed. The total value of the
contract is around EUR 300 million. Van Oord Nederland
is responsible for a share of approx. EUR 22 million. The
contract is a design & construct contract regarding the
northern and southern part of the widening of the A4. The
award was for two parts, which include the widening of
about 14 kilometres and the adjustment and construction
of several structural works (15 new bridges, 1 new
aqueduct and 12 new sound barriers).
At Rijkswaterstaat a new approach for tendering contracts
has been developed - the “LCC tender” and has been
used on this project. Instead of the lowest capital cost bid,
the lowest lifecycle cost was used (as one of the criteria)
to determine the economical most advantageous
proposal. Different “fit for purpose” approaches were
submitted for LCC tenders.
Year of construction – 2007 to 2012
Gross internal floor area (GIFA) – N/A
Aims and objectives of LCC analysis
The role played by civil service has evolved from a
‘builder’ to that of a ‘director’ as not only building
work is being tendered but design and maintenance
work as well. The interaction between contract
parties is changing and LCC information needs to be
included.
Lack of transparency, an undesirable bargaining
position and a tender process with increasingly stiff
competition between contractors led to a requirement
for a more detailed specification of the desired
structure and an exact description of the desired
result.
Under the previous approach, contractors were not
enticed to be inventive or innovative in realising cheaper
or less time consuming solutions. Furthermore, any
mistakes or diversion from the contract or building
process were leading to expensive contract changes.
Changing policy with regards to the role of the civil
service is another reason for development of alternative
ways of specifying and tendering contracts and
including LCC. The political trends to decrease civil
service and transfer of responsibility to the private sector
have been important stimuli. All of this has had a major
influence on the development and application of new
forms of contracts, contract specifications, tender
process and inclusion of LCC.
Davis Langdon Management Consulting May 2007