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PSAD-76-160 1 (1976-07-23)

handle is hein.gao/gaobaaajr0001 and id is 1 raw text is: A UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 2O4W PWOCURVMENT AND, SYSTE161 ACQUISITION VIVIStON B-178214 JUL 1976 The Honorable Tack Eckerd Administrator of General Services, General Services Administration Dear Mr. E:kerd: We have completed a survey to dete:mine how civilian Government agencies are imp'enenting life cycle costing (LCC), a procurement technique for evaluatinq tze total cost of a product over its useful life. This report highlights the General Services Administra- tion's acconplishments and steps GSA should consider to further prorote tne use of this technique. In our report entitled Ways to Make Greater Use of the Life Cycle Costing Acquisition Technique in DOD, dated May 21, 1973, (B-178214), we conclided that civilian agencies could also benefit from LCC. GSA, in itz reply, recognized that the LCC oncept had merit and that a study of its application would be *., tiated. In December 1973, the GSA study team recommended starting an LCC program and beginning a pilot project. Life cycle costing and other innovative techniques could help in saving money on future Guve.rnment procurements. A simplified illustration of LCC for auto tires follows: Product A Product B Ixitial cost $ 30 $ 40 Maintenance and support cost - - Expected mileage 20,000 30,000 Cost per 1,000 miles 1.50 1.33 A wide range of cost elements Tray affect the overall cost of ownership. An: .uation kor determining cost over the useful FH~e~c ~& ~w~~ni~;-z4'i ~4~-.e C1c~.. cd-i~JPSAD-76-160

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