Handbook 135 is a guide to understanding the life-cycle cost (LCC) methodology and criteria established by the Federal Energy Management Program (FEMP) for the economic evaluation of energy and water conservation projects and renewable energy projects in all federal buildings. It expands on the life-cycle cost methods and criteria contained in the FEMP rules published in 10 CFR 436, Subpart A, which applies to all federal agencies. The purpose of this handbook is to facilitate the implementation of the FEMP rules by explaining the LCC method, defining the measures of economic performance used, describing the assumptions and procedures to follow in performing evaluations, giving examples, and noting NIST computer software available for computation and reporting purposes. An annual supplement to Handbook 135, Energy Price Indices and Discount Factors for LCC Analysis, NISTIR 85-3273-X is also published by NIST to provide the current discount rate and discount factors needed for conducting an LCC analysis in accordance with the FEMP rules. This annual supplement is required when using Handbook 135.This new edition of Handbook 135 replaces the 1987 version. The new edition is extensively revised and organized around the key steps in an LCC analysis. There are no longer separate sections for new and existing buildings and for solar programs, as the methodology no longer distinguishes between these projects.

This paper develops and applies decision models for evaluating the economic efficiency of providing fire loss mitigation in houses through the use of a new technology: fast-response sprinkler systems. A model is developed for calculating present value net benefits as they would accrue to an owneroccupant or an owner of a rental house who installs a sprinkler system. Costs and benefits of owning a system are estimated for selected hypothetical cases pertaining to a new, single-family dwelling in the United States. The estimates are then used to illustrate the model. Minimum or maximum values that key decision variables must take in order for sprinkler systems to be cost effective in the selected applications are calculated through break-even analysis. Related models are developed for evaluating the economic merits of sprinkler systems from the standpoint of developers and local governments. Implications for the research and building communities are discussed.

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This report documents a benefit-cost analysis performed to measure the expected present value of net benefits resulting from the installation of a multipurpose network fire sprinkler system in a newly-constructed, single-family house. The benefits and costs associated with the installation and use of a fire sprinkler system are compared across three prototypical single-family housing types: colonial, townhouse, and ranch. The installation costs differ by housing types, with the colonial being the most expensive and the ranch the least.The benefits experienced by residents of single-family dwellings with sprinkler systems, as measured in this report, include reductions in the following: the risk of civilian fatalities and injuries, homeowner insurance premiums, uninsured direct property losses, and uninsured indirect costs. The primary costs examined are for initial purchase and installation of the sprinkler system. Maintenance and repair costs are not examined because they are negligible.Results of the benefit-cost analysis show that multipurpose network sprinkler systems are economical. The expected present value of net benefits (PVNB) in 2005 dollars is estimated as $2919 for the colonial-style house, $3099 for the townhouse, and $4166 for the ranch-style house. A sensitivity analysis is performed to measure the variability of the results to changes in the modeling assumptions. The sensitivity analysis confirms the robustness of the baseline analysis. The PVNB range from $704 to $4801 for the colonial-style house, from $884 to $4981 for the townhouse, and from $1950 to $6048 for the ranch-style house. Multipurpose network systems are the lowest life-cycle cost systems because homeowners can perform their own regular inspections and maintenance, and thereby save on costs they would incur with other systems. Given that they provide a similar level of performance, in terms of fire-risk mitigation, multipurpose network systems then achieve greater cost-effectiveness over alternate systems.