Key Approaches of Life-Cycle Cost in Green Government Procurement (Ggp) for Green Projects

Abstract

Sustainability has emerged as a critical concern in any viable physical planning and development. Hence, the Malaysian government has promoted the concept of green procurement also known as Government Green Procurement (GGP) that aims to minimize environmental degradation. In GGP, life cycle perspective thinking is introduced where life-cycle cost (LCC) tools act as decision-making in controlling the initial and future value of building ownership. Despite the increasing importance of green procurement and LCC in the planning phase of green projects, the viability and implementation of LCC is still lacking. Many have stated the benefits of LCC in green procurement for green building projects, however the criteria of LCC are not clearly determined. The study aims to determine the important level of LCC components relating to the green project planning phase. Questionnaire survey was distributed to 50 respondents composed of project team members that were involved in the selected green government projects. 32 respondents returned their responses to the survey. The results revealed that the highest rank of LCC components in green procurement is energy consumption cost, greenhouse gas (GHG) savings cost, acquisition cost, energy simulation cost and utilities cost. These results would elevate the use of LCC in the green procurement adoption and viability of green projects.

Transition of the procurement process to Paris-compatible buildings: consideration of environmental life cycle costing in tendering and awarding

“…However, the literature shows that the mandatory requirements of conventional LCC calculation in the tender as well as the awarding according to the lowest conventional LCC in the award phase are not applied in the current procurement practice. In this context, only a few studies analyze the implementation of conventional LCC in the building procurement process (Khalil et al 2021;Lim et al 2018;Dragos and Neamtu 2013).…”

Indicative Level on The Determinants of Tangible and Intangible Cost Elements in Industrialised Building System (IBS) Projects

“…According to Khalil et al (2021), costs and considerations for systems or products for construction should be looked through overall life cycle and not merely on the initial cost. As IBS is in operation for years, it is important to consider the intangible or non-monetary benefits will be over time.…”

“…Tangible costs are also costs that are relatively easily identified and with a high degree of accuracy and these costs directly attribute and chargeable to a specific project (Walters, 2016). While, intangible costs are those incurred for specific or shared purposes and cannot therefore be directly linked to a particular project, but contribute to the total cost (Khalil et al, 2021). These costs can have a direct impact to the users, developers or manufacturers as they are like the hidden costs in IBS that can either provide benefit to the IBS itself or the other way around.…”

“…These cost elements are listed as initial list of cost elements associated to the IBS projects from the perspective of tangible and intangible. The tangible cost constituted to the IBS adoption are Material Cost, Transportation Cost, Labour Cost, Plant and Machineries Cost, Profit and Overhead cost, Energy and Operational Cost, Verification Cost, Maintenance Cost, Functional and Testing Cost, and Demolition Cost (as compiled from: Saad et al, 2022;Abd Rashid et al, 2019;Walters, 2016;Khalil et al, 2021;Yunus et al, 2021, Sangale, 2015Shamsuddin et al, 2017). All of these costs can be directly seen when implementing IBS construction.…”

“…All of these costs can be directly seen when implementing IBS construction. While for intangible aspects, the cost elements are classified as Time, Quality of Components, Levy Exemptions, Tax Incentives, Wastage, Sustainability, Design, Durability and Efficiency (as compiled from: Abd Rashid et al, 2019;Walters, 2016;Khalil et al, 2021;Yunus et al, 2021, Shamsuddin et al, 2017. As supported by Walters (2016), intangible cost is a cost that cannot be seen directly while carrying out a project but these costs are crucial in order to complete the works.…”