Facility life cycle cost model (LCCM)
State law requires the Office of Financial Management (OFM) to establish, deploy and maintain the state’s life cycle cost model for evaluating ownership and leasing alternatives for state facilities over 20,000 SF and/or facility leases over 10 years. It also requires OFM to establish policies, standards and procedures related to this model.
Life cycle cost analysis is a projection of initial and ongoing costs of ownership, or leasing, and operations for a facility or site over its useful life. The intent of the life cycle cost model is to provide comparable economic information for decision makers to consider when choosing among facility alternatives. It is usually one of many factors considered when making a decision to proceed. Other factors often include the business need, availability of funding, schedule constraints, and jurisdictional and community interests.
Life cycle cost analysis can be detailed and complex. The Life Cycle Cost Model (LCCM) was created to provide a simplified tool to help choose the most economical option for housing state functions. The model is updated every February with new market rates, tax tables, operating costs, and financial assumptions.