Evaluation of GSA Efforts To Implement Life Cycle Costing for Procurement of Commercial Products

PSAD-81-14: Published: Nov 19, 1980. Publicly Released: Nov 19, 1980.

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Life Cycle Costing (LCC) is a procurement technique for evaluating the total cost of a product over its useful life. LCC provides a means to insure that procurements are most advantageous to the government in regards to price and other factors considered in accordance with Federal Procurement Regulations. The General Services Administration (GSA) has had the responsibility of coordinating and publicizing governmentwide LCC efforts.

Because of the substantial savings attributable to LCC procurements, the accelerated development of LCC techniques for additional items is warranted. GSA could improve its leadership role regarding governmentwide implementation of LCC, and could expand the use of LCC to include the procurement of its own needs. One of the impediments to the expanded use of LCC is the lack of governmentwide guidelines to provide uniform application of data that are used in LCC calculations. LCC requires top-management support because the procurements depart from traditional practices and require more time to prepare and evaluate.

Recommendation for Executive Action

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    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator of GSA should give higher priority to LCC efforts and commit the staff needed to (1) develop LCC policy and procedural guidance for inclusion in applicable procurement regulations; (2) develop a mechanism to coordinate and publicize governmentwide LCC efforts; (3) resume LCC workshops for procurement personnel; and (4) expand the use of LCC for procurements of commercial products by FSS.

    Agency Affected: General Services Administration

 

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