Implementing Innovative Ideas in Structural Engineering and Project Management Edited by Saha, S., Zhang, Y., Yazdani, S., and Singh, A. Copyright © 2015 ISEC Press ISBN: 978-0-9960437-1-7 APPLICATION OF COST SIGNIFICANT ITEMS TOWARDS IMPROVING ESTIMATION FOR LIFE CYCLE COSTING OF BUILDING PROJECTS AYEDH ALQAHTANI and ANDREW WHYTE Dept of Civil Engineering, Curtin University, Perth, Australia Construction projects have numerous variable factors affecting the value of life cycle-cost (LCC) and there is interaction between these factors, leading to complicated process. Therefore the current LCC models suffer from the absence of a standardized and a simple methodology of both the collection data and estimation LCC. Identification of the significant cost factors affecting the output of LCC is important step before embarking upon the collection of progress information. Furthermore, components of construction differ in their cost and time -importance, and thus management effort must be equivalently distributed. The concept of cost significant items (CSIs) is the best method to simplify estimation methodology as well as the collection data of construction projects. In general, The CSIs concept aims to determine the small number of items which represent a constant percentage of the LCC of construction projects. Therefore, this paper aims to present the explanation of each stage of LCC, the current classifications of asset components, the CSIs concept and previous practice of the significant cost items on the construction sector. Keywords: Pareto’s principle, Construction costs, Design and construction stage, Operation and maintenance stage, Asset management. 1 INTRODUCTION An increase in the level of goods and services are an indicator of the growth of a country’s development; physical infrastructure, services provision and building projects require being sustainable. For continuous future economic growth, (sustainable) physical infrastructural development is a significant prerequisite (Tabish and Jha 2011). Indeed, Ferran and Zayed (2012) asserts that building and construction projects contribute significantly to the gross domestic product and gross fixed capital formation but that increases in economic growth in the future, require increased construction and building projects in line with socio-economic trends. Governmental agencies, corporations, and the private-sector spend trillions of dollars on construction and infrastructure systems. Organizations must protect their enormous facility investment and assign particular resources among numerous other competing needs to their life-cycle maintenance (Ottoman et al. 1999). In order to preserve public (and private) sector infrastructure’s operational and safety performance, there is a need for a suitable management system (Farran and Zayed 2012). Often costly and disruptive replacements will be required due to the potentially careless mismanagement of refurbishments and retro-fitting. The continuous rehabilitation of both existing and future infrastructure is challenging due often to the restrictions of the (set-aside) financial elements of resources upkeep. Therefore, improving and developing the usage of funds through accurate cost (prediction)