MIL-HDBK-259

Abstract

This handbook provides information on the use of life cycle costing in system and equipment acquisitions. It makes no attempt to develop a LCC standard but rather describes the general methodology and procedures which help make life cycle costing a productive in-house tool as well as a means of program or project evaluation. As inroads are made in the usage of LCC analysis, estimating and implementation techniques should improve, particularly in the operating and support (O&S) cost areas. To maximize their usefulness, LCC analyses should be tailored to the particular needs of an acquisition. <br>This handbook was developed by the Naval Material Command (NAVMAT) to meet the requirements of SECNAVINST 4000.31 "Life Cycle Costing", which is a response to higher level instructions, directives, and policy guidance fostered in turn by the Defense Acquisition Regulation (section 1-335) which states: </span><pre> "Since the cost of operating and supporting the system or equipment for its useful life is substantial and, in many cases, greater than the acquisition cost, it is essential that such costs be considered in development and acquisition decisions in order that proper consideration can be given to those systems or equipments that will result in the lowest life cycle cost to the government".</pre> <br> <br>This handbook is not a procurement guide, but it briefly discusses how life cycle costing can be used to advantage in the procurement process. Although this handbook is primarily for use within a program or project office, it may be helpful to other functions whenever considerations of life cycle economics are relevant. Additionally, portions of the methodology are presented to promote traceability and consistency in LCC reporting for system and equipment acquisitions within NAVMAT. <br>This handbook addresses the application of life cycle costing to the acquisition or modification of an alpha-numeric nomenclatured equipment or system (e.g. APX-100, BQQ-6B, A-6E, CVX, and JVX) in terms of management functions and analysis procedures within a program or project office. The methodology can be used on simple non-repairable items (such as aircraft tires) or on complex repairable equipment (such as a ship communications suite requiring specially trained supervisors, operators, and maintenance personnel) or on aggregations of different equipments, i.e. major weapon systems and platforms such as missiles, ships, and aircraft. This handbook is not intended to be applied to the acquisition of buildings and facilities. This subject involves special considerations, peculiar to the architectural disciplines, which are beyond the scope of an introductory document. Reference to the appropriate government and non-government literature should provide a thorough discussion of LCC in this field. <br>