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Simon Berry - Letchworth Garden City Heritage Foundation

Robin Kent - Tangram Technology Ltd. 

 The changing landscape - CCT to BV

Local authority purchasing is currently in transition from Compulsory Competitive Tendering (CCT) to Best Value (BV). CCT historically ensured tight control on contract prices but this was often at the expense of quality and there was no account taken of future maintenance costs.

The maintenance cost

The true and total cost of any product must include the 'maintenance cost' over the product life. Once we accept that the total cost of a window is more than the simple first cost, then perhaps we can get a better view of what really is 'Best Value' to the purchaser. Traditional assessment of capital projects does not consider maintenance costs because there are largely 'hidden' in expenditure budgets. For true 'Best Value' assessment all the costs must be considered at the initial stage.

The cost of maintenance also creates a strong argument for consistency of product specification rather than specification of the latest products. New products that are incompatible with the existing housing stock will increase maintenance costs. At the very least upgrading of specifications requires backwards compatibility and some consideration of the existing 'legacy' housing stock as well as that being considered as part of the capital works budget.

The Berry studies

The Berry study (Berry - 2000) examined the maintenance requirements of 5 UK Local Authorities and the strategies they had developed for dealing with the maintenance of PVC-U windows. An initial survey was made (Berry - 1999) for one local authority with a housing stock of approximately 10,500 dwellings. Over a six-month period, there were 1080 individual calls and 1198 repairs were carried out. Of these, 269 repairs were within the manufacturer's guarantee period and were free of charge. The remaining 929 repairs were chargeable to the authority at a cost of 54,291 (or 58 per visit).

The maintenance cost for this single authority is well over 100,000 per year (in the region of 10 per house per year in the housing stock). This Authority's computer database can monitor these costs very accurately but this is often not the case and the cost of maintenance can only be estimated.

The complete breakdown of the logged repairs over the six-month period is given below:

PVC-U Window & Door Repairs (July - December 1998)

Window repairs

 No.

Door repairs 

 No.

Cills 

3

Cills

0

Ease/adjust/lubricate

213

Ease/adjust/lubricate

214

Glazing 

72

Glazing

7

Handles

96

Handles

57

Hinges/friction hinges

29

Hinges/friction hinges

14

Locks

50

Locks 

220

Loose frames

8

Loose Frames 

14

Seals (gasket)

26

Seals (gasket) 

50

Trims (+ silicone)

16 

Trims (+ silicone) 

6

Lost keys 

Door chains (OAPs)

4

Restrictors/child locks

24 

Letterbox/letterplates

29

Trickle vents

7

Sandwich panels

4

 

 

Vandalism/abuse

16

 

 

Weatherboard 

15

Total

548

Total

532

Grand Total (repairs) 

1080

'Ease, adjust and lubricate' represents nearly 40% of the recorded repair concerns and is often due to poor initial fitting or inadequate quality control during the contract. Improved controls in fitting and the use of approved installers could reduce the maintenance costs by up to 40%. Concerns with hardware (handles, hinges, locks, and trickle vents) represents nearly 33% of the recorded repair concerns. Improved specification of hardware could also reduce the maintenance costs by up to 33%.
These concerns will be present irrespective of the frame material because all frame materials use similar installation practices and similar hardware. It is of interest to note that none of the repairs involved failure of the PVC-U system profile. Frame failure, whilst important if it does occur, is the least of the Local Authorities concerns in the long term.

Measuring the hidden cost

A true assessment of the total cost may result in fewer windows being installed initially but the long-term costs will certainly be less. This is where CCT went wrong. The emphasis was on numbers and the initial purchase cost - not on real value in the long term. In many cases, the initial purchase cost is nearly irrelevant in to the long-term cost. The Berry study shows that maintenance of hardware (both adjustment and replacement after failure) is a prime cost element that needs to be included in any model seeking to get reliable Best Value results. In fact, the long-term costs will almost certainly be more than those of the original study, as most of the windows considered in the study were relatively 'young' in terms of a 30-year life cycle.

Specifiers need to start modelling the time/cost behaviour of windows and a first attempt at developing a cost model using these concepts has been made. The model provides guidance on measuring the costs for the future but, as with any model, the output depends on the initial values selected. We can only start to develop the model - what you put into it is your responsibility. The first sample model is available free of charge from Tangram Technology (www.tangram.co.uk) and the output of one set of assumptions is shown below. The model can be developed further and suggestions for improvements are welcome. Collaboration to build a realistic model will help everybody.

We need to change the way we look at the cost of windows and the allocation between capital and expenditure budgets - it is nonsensical to start a capital investment programme based on low initial costs only to find that this causes excessive recurrent expenditure. CCT has already shown the error of this and BV could well go down the same route unless real Best Value is sought and maintenance is included in any cost model.

The high costs found in the initial study (Berry - 1999) were based on well-recorded outsourced reactive maintenance. Some estimates ranged as high as 150 per visit when all costs are taken into account, other participants in the study reported very low costs but these were achieved by carrying out the maintenance internally and ignoring other cost elements such as administration and the cost of parts. Every authority must establish their own costs but these must be real and reflect all the costs instead of only some of them.

The future

One certain outcome is that the concern is going to get worse. Many large-scale Local Authority replacement programmes have not used a Best Value approach and will inevitably have increased future maintenance costs. Failure to plan for these maintenance loads leads to unplanned future expenditure. If the 468 UK Local Authorities have an average housing stock of 10,000 dwellings then this expenditure could easily rise as high as 46 million per annum. This cost will rise as hardware and frames approach the end of their service life and have higher maintenance loads. A new industry in maintaining windows may well be created to service the inevitable demand. As always, today's production is tomorrow's liability.

The cost of maintenance will not go away and the surveys show not only that the costs are surprisingly high but also that they will probably get worse. The introduction of Best Value instead of Compulsory Competitive Tendering may change the landscape but only if the cost of maintenance is included as part of the true cost of the window.

References:

Last edited: 11/03/10

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