ABSTRACT
Life-cycle costing is a tool to evaluate the costs of a good or service, taking into account not just price (the upfront cost, usually incorporating production costs) but all costs which will accrue with operation and maintenance and finally disposal. When externalities are included, life-cycle costing becomes "an environmentally relevant methodology." The life-cycle costing as the newly introduced award criterion of the public procurement directives epitomizes discretion as the underlying principle in the application of the directives. The most economically advantageous offer as an award criterion has provided the opportunity to balance the economic considerations of public procurement with policy choices. Currently, the discretion of contracting authorities and their Member States in applying life-cycle costing as an award criterion is absolute. Life-cycle costing could be a facet of the best price-quality ratio as a qualitative award criterion. Acceptance of life-cycle costing as an award criterion for public contracts denotes a departure from the lowest offer.
