Life Cycle Costing in Sustainable Public Procurement: A Question of Value

This report by the International Institute for Sustainable Development (IISD) examines the application of Life Cycle Costing (LCC) in sustainable public procurement, arguing that its non-systematic use leads to suboptimal procurement policies.

• Life-cycle costing (LCC) is a decision-making tool that accounts for all significant cost flows over a product or service's entire life period, including operating costs, end-of-life costs, and longevity and warranty time frames, rather than just the initial purchase price.
• The use of LCC in procurement is not yet systematic, which the report suggests makes procurement policies, including those for sustainable public procurement, suboptimal. The report identifies 24 specific issues related to this.
• Several barriers hinder the adoption of LCC, including a preference for the lowest up-front costs by governments, the insufficient factoring of socioeconomic gains, research gaps, a lack of competence, and a shortage of proper tools and data. Additionally, a lack of motivation occurs because long-term benefits often materialize after the original decision maker has left office.
• To improve LCC adoption, it should be integrated into public expenditure policy, necessitating the development of capacities, tools, platforms, and expertise. The report suggests that allowing organizations to retain savings from sustainable public procurement (SPP) to reinvest in new initiatives could be beneficial.

APA

Perera,, B. M. P. (2009). Life Cycle Costing in Sustainable Public Procurement: A Question of Value. International Institute for Sustainable Development. https://www.iisd.org/publications/report/life-cycle-costing-sustainable-public-procurement-question-value

Chicago

Perera,, Barbara Morton,Tina Perfrement,Oshani. Life Cycle Costing in Sustainable Public Procurement: A Question of Value. International Institute for Sustainable Development, 2009. https://www.iisd.org/publications/report/life-cycle-costing-sustainable-public-procurement-question-value.

Wikipedia

{{cite report |last1=Perera, |first1=Barbara Morton,Tina Perfrement,Oshani |title=Life Cycle Costing in Sustainable Public Procurement: A Question of Value |publisher=International Institute for Sustainable Development |date=19 November 2009 |url=https://www.iisd.org/publications/report/life-cycle-costing-sustainable-public-procurement-question-value |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{perera2009life, author = {Perera,, Barbara Morton,Tina Perfrement,Oshani}, title = {{Life Cycle Costing in Sustainable Public Procurement: A Question of Value}}, institution = {International Institute for Sustainable Development}, year = {2009}, month = nov, url = {https://www.iisd.org/publications/report/life-cycle-costing-sustainable-public-procurement-question-value}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }