<P>66The Military Engineer l May-June l 2010 in the SROI analysis. FROI accounts for internal cash costs and bene?ts only, while SROI accounts for all internal and external costs and bene?ts. SROI supplements traditional performance measures in order to help agencies in- tegrate sustainability into their current decision-making processes. At the intersection between eco- nomics and sustainability lies the SROI process. By combining cost-bene?t analysis with probability analysis and stakeholder elicitation, it is possible to capture all of the costs and bene?ts as- sociated with a green building project while accurately demonstrating the likelihood of achieving the bene?ts re- lated to a given alternative or group of alternatives. Another critical element of the SROI framework is to keep stakeholders en- gaged throughout the process, to vali- date the planned structure and logic of the analysis as well as the variable inputs with the goal of building consen- sus that will strengthen the credibility of the projected outcomes. Calculating SROI requires examina- tion of a broad range of project attri- butes—including reducing vehicle miles travelled and greenhouse gas emissions, increasing worker productivity and im- proving community health—and their potential costs and bene?ts as sus- tainability measures. Simultaneously, a risk/probability analysis component must be incorporated over the proj- ects lifecycle. Examples of traditional inputs include savings on utility bills or reduced operations and maintenance costs. Examples of sustainable inputs include quantifying the environmental savings from reduced carbon emissions or fewer sick days taken by employees working in green buildings. Case Study: Fort Belvoir Community Hospital In 2008, HDR|Decision Economics was engaged by the HDR|Dewberry Joint Venture design team and the Nor- folk District of the U.S. Army Corps of Engineers to provide both an LCCA and a SROI analysis of energy and water conservation measures for the new Fort Belvoir Community Hospital at Fort Belvoir, Va. The Department of Energy Federal Energy Management Program requires an LCCA analysis to evaluate the cost effectiveness of potential en- ergy or water conservation projects and renewable energy projects in federally- owned and -leased buildings. The $747 million, state-of-the-art hospital, slated to open in spring 2011, will be the worlds ?rst hospital to suc- cessfully marry todays mainstream evidence-based design principles with Leadership in Energy and Environmen- tal Design (LEED) green building re- quirements. The 1.27-million-ft2 hospi- tal is targeting LEED Silver certi?cation, providing a healthy, sustainable build- ing ?lled with healing, nurturing spaces for generations to come. A comprehensive energy effort for the project included an assessment of all building systems and con?gurations that impact energy ef?ciency. Based on a whole building energy model, the de- sign of the hospital will consume 27.6 percent less energy (based on regulated energy savings), which equates to a sav- ings of $449,299 per year. Much of the energy savings will be achieved through these energy ef?ciency strategies: • Lighting Design. Ef?cient ?xtures, oc- cupancy sensors and photocells help ensure lights are off during the day to harvest natural light most effectively. • Automatic Control System. Public spaces are designed on a low-voltage control system to sweep off lighting automatically during non-business hours. • Rainscreen System. The system in- creases insulation effectiveness in the exterior walls and reduces thermal bridging, thus improving the walls R- value. • High-Ef?ciency VSD Chillers • Multistack Heat Recovery Chiller System Energy modeling is an important method to address potential environ- mental impacts and maximize energy- ef?ciency opportunities. But SROI modeling breaks new barriers, using economic best practices and measur- ing progress toward federal mandate compliance. In addition, the SROI pro- cess creates a decision-making tool that allows two sets of data to be compared side-by-side: FROI, or traditional life- cycle costing, and SROI, which repre- sents monetized non-cash costs and bene?ts. The results of the analysis conducted at Fort Belvoir highlighted the impor- tance of accounting for external costs resulting from actions that affect the well-being of others. In a given year, the monetized value of greenhouse gases and pollutants account for half of ben- e?ts coming from conservation mea- sures considered in the analysis. Conclusion While the SROI process is more de- tailed and involved than LCCA and FROI analyses, the cost of application is not signi?cantly higher than the more traditional techniques. SROI can be used to craft green business cases for individual projects, capital programs and a broad range of initiatives with the cost of analysis beginning for as little as $30,000. The cost increases depending on the complexity of the undertaking, number of alternatives examined and availability of data. Because the concept of sustainability still lacks general consensus, it has been dif?cult to incorporate into project valu- ations. The missing piece has been an objective, transparent process that can demonstrate how sustainable projects will generate economic growth while conserving limited resources. SROI has been proven in a range of settings and project scales. It combines best practices in cost-bene?t analysis, risk analysis and collaborative consultation. E.O. 13514 states that, agencies shall prioritize actions based on a full accounting of both economic and so- cial bene?ts and costs and shall drive continuous improvement by annually evaluating performance, extending or expanding projects that have net ben- e?ts, and reassessing or discontinuing under-performing projects. The SROI framework helps public of- ?cials to do just that. Stephane Larocque is Principal Economist and Lidia Berger, LEED AP, is Vice President and Eastern Director, Sustainable Design Solutions, HDR Inc. They can be reached at 613-234-8764 or stephane.larocque@hdrinc.com, and 703- 518-8653 or lidia.berger@hdrinc.com, respec- tively.</p> <UL><LI><a href="http://www.stallionpublishers.com/publication/541/uchvgbhoy/1/1/">Front-Cover</a></LI> <LI><a href="http://www.stallionpublishers.com/publication/541/uchvgbhoy/2/2/">Inside-Front-Cover</a></LI> <LI><a href="http://www.stallionpublishers.com/publication/541/uchvgbhoy/3/3/">Page-1</a></LI> <LI><a href="http://www.stallionpublishers.com/publication/541/uchvgbhoy/4/4/">Page-2</a></LI> <LI><a href="http://www.stallionpublishers.com/publication/541/uchvgbhoy/5/5/">Page-3</a></LI> <LI><a href="http://www.stallionpublishers.com/publication/541/uchvgbhoy/6/6/">Page-4</a></LI> <LI><a href="http://www.stallionpublishers.com/publication/541/uchvgbhoy/7/7/">Page-5</a></LI> <LI><a href="http://www.stallionpublishers.com/publication/541/uchvgbhoy/8/8/">Page-6</a></LI> <LI><a 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