How to Price Construction Life Cycle Assessment Services

With the general interest in LCA growing rapidly and ramp-up in LCA credits within Breeam NC 2018 imminent, many of our users are asking us how much work is involved in completing an LCA, how long it takes and what they should be charging their clients for undertaking the work. eTool has always maintained a very transparent approach towards our own pricing structure and we thought it might be useful to share our thoughts on pricing LCA consultancy services.  We have highlighted 3 different approaches for costing an LCA described in detail below.

  • Value to the Developer –  This is the approach eTool take for costing an LCA.  We charge a fee that attempts to reflect the value that the LCA provides to the design team, developer and the planet.  In some circumstances, the consulting work to deliver an LCA of a large apartment block may actually be similar to that of a single house. However, the LCA will provide learning outcomes that can have a much higher impact in terms of environmental benefits or life cycle cost reductions.  Let us take the example of two projects in the UK, a large apartment building with 120 dwellings and a construction budget of £30,000,000 and a small single dwelling development with a budget of £150,000.   An attractive strategy identified in the single dwelling may reduce greenhouse gasses by a total of 100tCO2e and also save the occupants £5,000 in life-cycle costs.  In the apartment building, however, a similar strategy may save 10,000tCO2e and over £1,000,000 in life-cycle costs.  Similarly, if a developer has a specific environmental target, the stakes are much higher in the apartment project.  The cost of abatement is quite critical and can severely increase capital costs if not well understood.  For example, if a 50% reduction of life-cycle greenhouse gas emissions is sought, employing the best strategies on the cost abatement curve may cost the developer £500,000 by targeting the lowest cost of abatement, but employing strategies without this consideration may cost them £1,500,000 to achieve the same environmental outcome.   So regardless of the level of effort in the two projects, there’s a much higher potential value that the apartment stakeholders get from a quality LCA and LCC study.  We like this approach as it aligns the consultant’s motives with both the planet and our customer.  The consultant’s role is to deliver value, so a higher fee should yield more value.  This may be realised by greater effort in identifying low impact strategies and optioneering to ensure meaningful reductions in environmental and cost impacts.
  • Bottom Up – Determining the billable hours to complete the work and charging the consultants the hourly rate plus a profit margin.  The total hours spent on an LCA can vary dramatically depending on the following:
    1. Design stage.  The more detailed the information the more complex the modelling becomes.  A “Target setting” LCA will have no more than a design brief as input information and a basic model may take an hour to complete with another few hours of optimising strategies, a stage 2 LCA may have more detailed information available and take half a day to a day and a detailed stage 4 LCA may take a further day to 2 days to complete.
    2. Quality of information available.  Often the most onerous part of any modelling process is gathering the information required.  If this is orderly and well organised then completing the LCA should be very simple. Cost plans and BIM models can contain good levels of information but are these freely available or will it take months to track them down? Are they complete or missing crucial bits of information? Sometimes it can be quicker and easier to measure up drawings manually rather than spending days chasing down an elusive bill of quantities which may not actually exist!
    3. Design Team Engagement. How involved are the design team in the LCA process?  Will they require optioneering for many small details in the design or are they only interested in some basic high-level results?  More engagement is great and very rewarding for the LCA practitioner but can take time.  If the client is only looking for the bare minimum required to award credits under BREEAM then the LCA may be completed very quickly using the eTool automated reports.
    4. Project Management and Margins.  You want to leave room in the scope for unexpected design changes, complex design elements and of course margin. Don’t forget that for LCA to become mainstream we all want this to be a profitable exercise as well!
    5. The LCA software that you use! Choosing the tool most appropriate for your task is of course very important.  For simple embodied carbon calculations on a single material then a simple spreadsheet (or open use eTool) would suffice. For a full whole-of-building-whole-of-life LCA with multiple environmental indicators then dedicated tools will be far more cost and time effective.  Our door is always open to help you understand the full functionality of eToolLCD. Our unique template system, strategy and option recording and automated reporting are just a few features that enable not only the quick building of an LCA model but detailed and in-depth design analysis for effective feedback to the project team. Why not come along to our next eTooLLCD training event and become a registered eTool LCA practitioner. Join our newsletter to stay informed about eToolLCD webinars, updates and training.
  • Top down: What is the market rate for delivering the LCA?  Often it is a case of testing the waters to understand how much the market is willing to pay for the service and matching the price and level of work accordingly. We have seen practitioner LCA quotes ranging from £3k to over £30k!!  If the user is really enjoying the LCA work they may match the price to be competitive with whatever alternative BREEAM strategy is being considered. Considering BREEAM for example, any design effort that equates to over £2,ooo per credit is often considered a costly strategy (project dependent).  Can your competitors deliver the LCA for this fee if so what added value could you bring beyond their offering?  Alternatively, consider how can you streamline your service to get your client excited about engaging the power of LCA no matter the design stage.  For example, we targeted early stage design with a “Target Setting” LCA service which costs under £2000 and is aimed at very early stage design feedback.  Developers are happy with that service but would be very reluctant to engage in a full LCA study that early in the project.  We can deliver this service to an acceptable accuracy by employing whole building templates and high-level strategy optioneering.  The design team gets quality, quantified feedback on possible low impact strategies and can embed these in the early geometry.

Determining the fee is of course only half of the story.  Making sure the client understands the value that the LCA is bringing to the design service is equally important.  A client who understands the true benefits of LCA; a performance-based design which is driving innovation to deliver quantified savings against science-based targets, is the client you really want to work with! For more on adding value through LCA take a look at my blog post and Henriques webinar.

Why not come along to our next webinar or training events and develop a deep understanding of whats involved in LCA modelling from scratch over 1 day.

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