The OMB module is designated to perform life-cycle cost analyses subject to OMB Circular A-94, when the purpose of the evaluation is not primarily to assess energy-related savings. OMB Circular A-94 also excludes water resource projects (guidance for which is in Economic and Environmental Principles and Guidelines for Water and Related Land Resources Implementation Studies). The evaluation criteria for non-energy-related projects are defined by either of the following two analysis types:
Analysis Purpose
The program requires the user to choose one of the two analysis types specified in OMB Circular A-94
("cost-effectiveness" and related analyses or "public investment
or regulatory"), depending on the purpose of the study. BLCC5
will select the appropriate discount rate for the analysis purpose chosen.
Discount Rates
OMB discount rates for cost-effectiveness and related analyses are based on Treasury notes and bonds
of varying maturities and hence differ depending on the length of the study
period (see Help topic "2019 OMB Discount Rates"). For public
investment and regulatory analyses the discount rate is fixed at a real rate of
7% (3% real for sensitivity analyses recommended in OMB Circular A-4, January
2004).
Maximum Study Period
In FEMP analyses the service period, i.e., the period over which cash flows are evaluated, is limited to a
maximum of 40 years. There is no limit to the length of the study period in OMB
analyses.