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Life Cycle Cost (LCC)

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If you have ever used the terms Life-Cycle Costs (LCC) and Total Ownership Costs (TOC) interchangeably, or in case you ever wondered exactly what the differences between them actually are, the best and most comprehensive source of information is the Defense Acquisition Guidebook (DAG) Chapter 3.1.

According to DAG Section 3.1.1, “both DoD Directive 5000.01, The Defense Acquisition System, and DoD Instruction 5000.02, Operation of the Defense Acquisition System, make reference to life-cycle cost and total ownership cost. This section of the Guidebook explains the meaning for each of these terms. The terms are similar in concept but somewhat different in scope and intent. For a defense acquisition program, life-cycle cost consists of research and development costs, investment costs, operating and support costs, and disposal costs over the entire life cycle. These costs include not only the direct costs of the acquisition program but also indirect costs that would be logically attributed to the program. In this way, all costs that are logically attributed to the program are included, regardless of funding source or management control. The concept of total ownership cost is related but broader in scope. Total ownership cost includes the elements of life-cycle cost as well as other infrastructure or business process costs not normally attributed to the program. DAG Section 3.1.5 defines and describes this concept in more detail.”

Life-Cycle Cost Tools

Financial Management - Teaching notes, tools and links collected by DAU Center for Business, cost estimates and financial management.
Reducing System Support Costs - Computer models and sample solicitation Language to obtain data to estimate and reduce system support costs. The Logistics Cost Estimating Tool (LCET) can be used with the Computerized Optimization Model for Predicting and Analyzing Support Structures (COMPASS) to estimate logistics support costs and optimize maintenance & supply support concurrently. LCET links to COMPASS and can be downloaded from this site.

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Helpful	Title	Type	Contributor	Date Modified	Popularity
1	OSD Cost Assessment & Performance Evaluation (CAPE) Operating & Support (O&S)...	Processes & Methods	Private	2016-3-10	263
0	USD (A&T) Memo “Definition of Total Ownership Cost (TOC) Life Cycle Cost (LCC) and the...	References	Private	2015-9-30	1529
0	United States Marine Corps Logistics Requirements Funding Summary Cost Estimating Tool (USMC LRFS...	References	Private	2014-10-1	1477
0	DON TOC Guidebook (3rd version)	Learning Materials	Private	2014-7-23	755
0	Key Cost Estimating Terms & Definitions ("Cost 101 for Life Cycle Logisticians")	References	Private	2014-6-13	1487
0	Differences Between Life Cycle Costs (LCC) and Total Ownership Costs (TOC)	References	Private	2014-2-24	809
0	Defense Business Board Reducing Overhead and Improving Business Operations - DTD 22 Jul 10	References	Private	2013-10-2	1418
0	Reducing System Support Costs	Tools & Forms	Private	2012-2-13	613
0	Financial Management	Tools & Forms	Private	2010-11-3	880
0	GAO Letter Report GAO-10-717 DOD Needs Better Information and Guidance to More Effectively Manage...	References	Private	2010-10-6	1409
1	Institutionalizing Affordability in DoD Systems Point Paper (NDIA-DoD Joint Affordability/Life Cycle...	References	Private	2010-10-6	1417
0	GAO Letter Report GAO-10-695 Additional Actions Needed to Improve Financial Management of Military...	References	Private	2010-8-10	1408
1	It's Time to Take the Chill Out of Cost Containment and Re-energize a Key Acquisition Practice	References	Private	2010-6-15	1395
0	Cost Analysis Strategy Assessment (CASA) Model	Tools & Forms	Private	2010-2-19	756
1	GAO-09-3SP Cost Assessment Guide: Best Practices for Estimating and Managing Program Costs, DTD Mar...	References	Private	2009-11-4	955
0	Defense Cost and Resource Center	Processes & Methods	Private	2009-9-14	744
0	Reduction of Total Ownership Costs (R-TOC) Best Practices Guide DTD July 2003	References	Private	2009-1-22	939
0	GAO-07-1134SP Cost Assessment Guide - Best Practices for Estimating and Managing Program...	References	Private	2009-1-22	714
0	GAO-07-1134SP Cost Assessment Guide DTD July 2007	References	Private	2009-1-22	1322
0	OSD Cost Analysis Improvement Group (CAIG) Operating and Support Cost Estimating Guide, DTD Oct 07	References	Private	2009-1-22	704
0	OSD CAIG O&S Cost Estimating Guide Web Site	Related Websites	Private	2008-2-8	703
1	GAO: "Getting Better Acquisition Outcomes"	Presentations	Private	2007-12-18	953
0	USD AT&L Memorandum "Transformation through Reduction of Total Ownership Costs R-TOC"...	References	Private	2007-7-5	938
0	Learning Resources for Determining Life Cycle Costs	Lessons Learned	Private	2007-6-5	929
0	Learning Resources for Determining Life Cycle Costs	Lessons Learned	Private	2007-6-5	1301

Found 25 records

Related Items

Automated Cost Estimating Integrated Tools (ACEIT)

Private wrote "Primarily used on the Finance and Budgeting side of a Program Office, the Automated Cost Estimating Integrated Tools (ACEIT) is recommended by the Assistant Secretary of the Army Acquisition, Logistics and Technology (ASAALT) for developing budget estimates for life cycle costs. ACEIT is a family of applications that support program managers and cost/financial analysts during all phases of a program's life-cycle. ACEIT applications provide a useful tool for analyzing, developing, sharing, and reporting cost estimates, providing a framework to automate key analysis tasks and simplify/standardize the estimating process. In many Army program offices both ACEIT and CASA are used: ACEIT to provide reliable and substantiated LCC estimates and CASA to provide robust modeling of logistics support elements and the impact of changes to the support elements on LCC. "
Cost Analysis Strategy Assessment (CASA) Model

Private wrote "Army Logistics Support Activity (LOGSA) Cost Analysis Strategy Assessment (CASA) model, a Life Cycle Cost (LCC)/Total Ownership Cost (TOC) decision support tool. CASA can present the total cost of ownership depending on user selections: including cost of RDT&E, acquisition/production, operating/support, and disposal. CASA covers the entire life of the system, from its initial research costs to those associated with yearly maintenance, as well as spares, training costs, and other expenses. "
Web-Life Cycle Cost Analyzer (Web-LCCA)

Private wrote "Web-Life Cycle Cost Analyzer (Web-LCCA) can facilitate cost comparisons of alternative hardware designs, cost predictions of alternative maintenance concepts for new system designs, cost estimation of Parts Replacement Strategy Options (PRSOs) to solve parts obsolescence problems that may occur in the future, tradeoffs between spares and support cost versus system operational availability, cost risk analysis under multiple parameter uncertainty, and other analyses required under the Acquisition Reform initiatives. Two fundamental elements, which drive system life-cycle costs, are captured by Web-LCCA: System Design - comprised of a self-contained, identifiable collection of hardware items and associated software whose purpose is to perform specified mission functions, and Operations and Logistics Support scenario - comprised of the operations, maintenance and supply network and associated pipeline times required for system life-cycle support. "
Operating and Support Cost Analysis Model (OSCAM)

Private wrote "OSCAM is a Windows-based application designed to aid cost analysts, logisticians, and engineers in estimating weapon system Operating and Support (O&S) Costs. Using Powersim, a System-Dynamics based software engine, OSCAM effectively captures the real-world, inherent interactions and feedback relationships that other models simply cannot address. OSCAM simulates O&S costs by running through a series of time-steps and calculating the value of the cost and non-cost outputs following each step. "
Cost Adjustment Visibility Tracking System (CAVTS)

Private wrote "Cost Adjustment Visibility Tracking System (CAVTS) is a web-tool process used to identify future Flying Hour Program (FHP) cost drivers, track actual execution, and improve the feedback mechanisms in order to better prepare and forecast future Flying Hour Program budgets. "

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