22 CAR § 111-802 – Life cycle cost analysis

(a) In accordance with the Arkansas Energy Office of the Division of Environmental Quality rule for Energy Efficiency and Natural Resource Conservation in Public Buildings, 22 CAR pt. 10, departments and the project designer are required to evaluate all material and equipment selections on the basis of life cycle cost as opposed to a first cost only for:
1. (1) New construction projects exceeding twenty thousand square feet (20,000 ft²); and
2. (2) Renovations of buildings exceeding twenty thousand square feet (20,000 ft²) wherein the renovation cost exceeds fifty percent (50%) of the insured value of the building.
(b) During a competitive bid process for construction, often the product having the better life cycle cost can be incorporated into the project for little or no incremental cost over the lesser quality product.
(c) Departments should evaluate the proposed products at a thirty-year life cycle.
(d) Careful consideration should also be given to the utility escalation rates, the maintenance rate, and the discount rates for the cost of money.
(e) These factors can vary significantly from those applied to private sector cost (shorter life cycle) and if improperly applied can invalidate the analysis.
(f) Departments are encouraged to use life cycle costing on all other projects to the extent that it is economically feasible.