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Thorough planning will drive down costs

September 19, 2010
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Some could compare the total cost of building ownership to the total cost of owning a vehicle, from the cradle to the grave.

Every five to 10 years, most of us are probably faced with the decision to buy a new car. Some purchase cars for looks, others for performance, and some may prefer certain makes and models.

Frustration can set in after the idea of our dream car runs wild, but a reality check can destroy that dream. Considering the long-term ramifications of purchasing a car — or the total cost of ownership — can bring a new perspective into light.

Maintain your assets
The total cost of ownership of a capital item considers the cost of the asset, from the beginning to the end. The total cost of ownership can be applied to almost any scenario: Cars, homes, machinery, and facilities where we work and learn.

We also know that the better we maintain these assets, the longer they will last. The same actions and planning can be applied to the buildings we maintain.

The Council of Educational Facility Planners International (CEFPI) makes a startling statement that “…it will take $332 billion to bring existing schools back into good condition.” That is only a part of the total cost of ownership for school districts alone.

It is safe to say that on-going repairs are an issue and ultimately, building new facilities must be figured into the equation.

Cost assessment
Let’s look at an example of the cost of a building using round figures:

Building a new school would cost approximately $160 per square foot. At 100,000 square feet, the up-front cost of the facility would be $16 million dollars. But once the building is constructed, utilities, services and repairs must be factored into the total costs of building ownership, with the general assumption that quality buildings should last 75 years.

The calculations below are conservative and low, and computed without an inflation factor:

  • General custodial cleaning costs (excluding supplies): Estimated at $1.10 a square foot, cleaning would cost $110,000 per year throughout 75 years, totaling $8,250,000.
  • Solid waste haulage costs: Estimate yearly service at $3,000 and throughout the life of the building, solid waste removal alone will cost $225,000.
  • Cleaning supplies: Estimate .10 cents per square foot, per year, and the cost for supplies would be $10,000 annually and $750,000 within 75 years.
  • Custodial equipment: The startup cost for equipment and basic tools — $10,000. For fair measure, factor in a capital replacement cost for equipment, which could exceed $50,000 during the 75-year period.
  • Carpeting: Assuming that 20,000 square feet of the building has carpet, it will probably be replaced every 10 years, at least six times, at $20 a square foot, costing $400,000 for each installation. With six turnovers, the total carpet cost for the life of the building will be $2.4 million.

Cheap today, costly tomorrow
Buildings are expensive to build, as well as maintain on an on-going basis throughout the life of the building. The actual operating costs will probably far exceed the original construction costs.

The critical issue is that facility planners and cleaning professionals need to step up to the plate even before buildings are built and the cleaning process must be considered during the pre-planning and pre-construction phases of any building project.

The total cost of ownership of any building could be dramatically decreased, or at least controlled if building designers could project the total cost of ownership before the building is built, and then install systems that will maximize the life cycle of replacement components. Remember, cheap components today cost dearly tomorrow.

Sound planning cuts costs
From an entire facilities maintenance perspective, the total cost of ownership of a building is a staggering financial burden for the years ahead. However, sound planning during the initial stage of the process can enable decision makers to make better long-term decisions that will minimize or control the total cost of ownership, from the cradle to the grave.

From a cleaning and maintenance perspective, if we are involved from day one, we can have meaningful input that can have a positive impact upon the total cost of ownership of our buildings, as well as our profession. If involved only after the building is built, we will forever be playing catch up.

Alan S. Bigger, B.S., M.A., R.E.H., is director, Building Services, University of Notre Dame, and Linda B. Bigger, B.A., B.S., is a freelance editor.
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