Analysis of Life Cycle Cost Concepts and their Implementation by the Naval Facilities Engineering Command

Abstract

Abstract : The Navy, like many other federal organizations, is being faced with a decreasing budget. One of the Navy's biggest problems is that owning and operating their shore infrastructure is consuming too much of its limited resources. One way to reduce the cost of owning and operating the shore infrastructure is to plan and design facilities with lower life cycle costs i.e., facilities with components that last longer, cost less to operate, and cost less to maintain. Naval Facilities Engineering Command (NAVFAC), as with all federal agencies, has been directed to perform economic analysis based on Life Cycle Cost (LCC) concepts on all Navy facility projects. However, in a recent study, NAVFAC found that a majority of their facility project areas were not using LCC concepts when conducting economic analysis. This paper will: (1) provide a brief introduction to life cycle cost concepts and economic analysis; (2) introduce NAVFAC and its role in the facility planning process; (3) summarize current federal policies regarding facility planning and LCC concepts; (4) summarize NAVFAC's report concerning the status of LCC in the planning process; (5) analyze and make recommendations to two main issues hindering NAVFAC use of LCC.