Employing the Life-Cycle Costing Tool in Public Procurement

This presentation discusses the life-cycle costing tool in public procurement, as introduced by Directive 2014/24/EU. It explains the origins of the tool, different types of costs and calculation methods and compares the tool to the “MEAT” criterion.

Michael Jürgen Werner

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Question 1 of 3

Question 1: In the context of life-cycle costing and its origins, externalities are:

Costs which are not immediately connected to the purchase of a service or a product and affect a party who did not choose to incur them.

External experts who help ascertain the best bid in a procurement process.

Lawyers who advice contractors on how to procure their products best.

Question 2 of 3

Question 2: Is there one life-cycle costing tool which fits all different procurement areas?

No, the life-cycle costing tool is still a hypothesis and has no practical relevance at the moment.

Yes, a tool has been proposed that is conceived to suit all different types of procurement.

No, at the moment there are different tools proposed by different sources which can be suitable for different areas of public procurement.

Question 3 of 3

Question 3: According to Articles 67/68 of Directive 2014/24/EU, life-cycle costing:

can only be used in the quality-only award option.

include an exhaustive list of costs which can be taken into account for the calculation of life-cycle costing.

is mentioned as an example of cost-effectiveness approach to the identification of the most economically advantageous tender.