Economic Support for BFRL

Objective:

To develop standard economic methods, guides, classifications, metrics, and software tools that help the building community evaluate new technologies, choose economic material/design combinations, and choose cost-effective, life-cycle management practices, while constructing affordable buildings that optimize building life-cycle performance. These objectives support the CBS Program’s specific objectives of improved productivity, life-cycle cost savings, energy conservation, and market leadership. The primary delivery mechanism for the work being performed by the Office of Applied Economics (OAE) is the ASTM Building Economics Subcommittee, E06.81.

Problem:

Improved methods, metrics, and tools for measuring economic performance are essential (1) for BFRL/NIST to help select the “best” among competing research programs, (2) for industry to choose the most cost-effective building technologies, designs, and practices, and (3) for the energy, fire, and homeland security agencies to choose the most cost-effective technologies, policies, and equipment for energy conservation and for protecting first responders and potential victims from injury and death. The problem facing each of these three groups is that the decision makers who make these critical choices have no standard, consensus metrics and tools for selecting the most cost-effective alternatives. And even where standard methods exist, knowledge of how to apply them and software tools for enhancing implementation are not available. It is difficult to find any one or group of organizations that has the will to tackle these problems and can muster the technical capability, industry respect, and financing to provide these metrics and tools. Today government agencies and building industry decision makers typically make research and building choices on the basis of the best available information and historical practice for any given agency or company. The resulting ad hoc decision making contributes, for any given budget, to a lower level of building performance and safety than might be obtained with standardized, technically correct measurement tools, as supported by this project.

The significant idea behind this research is the provision of a suite of services and products, administrative and technical, that together achieve greatly improved and widespread benefit-cost measurements of new building technologies. The approach combines identification of the needed project measure of merit (collaborations with industry); developing a technically-correct, user-friendly way of implementing the measure (technical research and development to produce draft standards and software tools); shepherding the product through a consensus process to assure acceptance and use (ASTM leadership), and teaching practitioners how to use the resulting tools (ASTM workshop teaching). OAE is uniquely positioned to play this role in the development of economic methods, metrics, and tools.

Approach:

To achieve market acceptability of a system that senses and measures the level of threats (manmade or natural) in a timely manner, and that can respond to those threats effectively to mitigate damages, the system must be demonstrated to be economically cost effective. OAE is the best place to do this work because of our unique expertise and experience. OAE is developing methods, metrics, and tools that enable government and industry to choose the most cost-effective building technologies, designs, equipment, and practices for protecting first responders and potential occupant victims from injury and death. These methods, metrics, and tools are developed in OAE for promulgation through ASTM. EPA, DOE, GSA, and DHS, as well as the private sector, have adopted our standard economic methods and software products, as promulgated through ASTM, to make better economic choices. Furthermore, OAE should do this work, because it supports the NIST mission and particularly BFRL's responsibilities under the American Competitiveness Initiative. In FY2008, Chapman will continue the administrative and technical leadership within the ASTM E06.81 Subcommittee on Building Economics as permanent secretary to the subcommittee and as permanent chair of the Techniques Task Group responsible for standard economic methods. With continuing collaborative OA funding from DHS and DOE, Chapman will revise and shepherd through balloting a new suite of standards associated with natural and man-made hazards as well as standard methods applicable to energy conservation. OAE will continue to provide consulting in economics, statistics, and operations research in support of the BFRL staff, and Thomas will update the macroeconomic data on building and construction for use by BFRL Headquarters and staff in making program presentations and measuring BFRL impacts.

The technical challenge in this project is to develop practical, standard methods and tools that will enable decision makers to compute acceptably accurate measurements of benefits and costs of alternative technological choices, within a reasonable time period, and at reasonable expense and effort. The administrative/leadership challenge is to achieve through the ASTM structure a body of consensus standards that industry and government will promulgate and use. Progress will be measured by the number of standards that pass the ASTM consensus process, the number of standards sold by ASTM, and the number of students who take the ASTM “Economic Tools for Developing a Cost-Effective Risk Mitigation Plan” course.

During FY 2009 and 2010, OAE will continue its administrative and technical leadership within the ASTM E06.81 Subcommittee on Building Economics, its production of construction industry statistics for BFRL senior management, and its consulting in economics, statistics, and operations research in support of the BFRL staff. In FY 2009, Chapman and Thomas will produce an article describing the construction industry macroeconomic data methodology, submit it to WERB, and upon approval submit it to a suitable archival journal for publication. In FY 2010, Chapman will produce an article describing the benefits of using ASTM building economics standards on a large construction project, submit it to WERB, and upon approval submit it to a suitable archival journal for publication.

Impact: This research enables OAE economists to take ASTM economic standards beyond the traditional applications, as in choosing the least-cost component for providing a building function, to the development of standards and adjunct tools that specifically address NIST’s target research areas funded by the American Competitiveness Initiative, namely WUI fires, storm surge, high winds, floods, and earthquakes. Benefits from this research would accrue to individuals, businesses, and governments in the form of reduced investments in protection, combined with reduced property damages, deaths, and injuries. The ultimate savings to society would greatly exceed the costs of research given the enormous number of high-valued building decisions made daily.