Reg. 68 (PCR 2015)

Life-cycle costing

In: Procure > Evaluation stage

Overview

This regulation sets out the type of costs that must be taken into account by a contracting authority where tenders are evaluated on the basis of life-cycle costs.

Where life-cycle costing is used, this must take into account the costs borne by the contracting authority or other users (e.g. costs of use, maintenance costs, end of life costs), and / or environmental costs (i.e. environmental externalities) linked to the product, service or works (e.g. cost of emissions of greenhouse gases).

In assessing environmental costs, contracting authorities must ensure that the method used is based on objectively verifiable and non-discriminatory criteria, accessible to all interested parties and that the data required can be provided with reasonable effort by suppliers.

Contracting authorities must indicate in the procurement documents the data to be provided by tenderers for the purposes of assessing costs using a life-cycle approach, and the method to determine the life-cycle costs on the basis of the data.

Objective at this commercial stage

The evaluation of life-cycle costs must be assessed in accordance with the methods outlined in the procurement documents. To the extent that this involves evaluating environmental costs (i.e. environmental externalities), this must be based on objectively verifiable and non-discriminatory criteria (among other requirements).

Key considerations at this commercial stage

Contracting authorities should:

  • ensure that the evaluation of life-cycle costs is conducted in accordance with the assessment approach set out in the procurement documents
  • ensure that the assessment of environmental costs (i.e. environmental externalities) is objectively verifiable.

See also in the Procurement Act 2023:

  • Section 23: Award criteria

Additional support and guidance

Make sure you:

  • read the regulation
  • seek legal and commercial advice in the context of specific procurements