Equipment Bid Awards: Initial Cost versus Life Cycle Cost

摘要

The cost of operating and maintaining equipment frequently exceeds the purchasecost of the equipment itself and varies widely between functionally equivalent candidates. Yet for most public organizations, policy states that a bid award be made to the company submitting the lowest initial cost bid. This research evaluated the feasibility of awarding equipment bids by life cycle cost rather than by the existing low bid purchases cost within the Alaska Department of Transportation and Facilities (AKDOT&PF). Research results show that the LCC bidding system can be implemented legitimately within AKDOT&PF for equipment procurement. The methdologies and the supporting computer program proposed in this research project can significantly improve the LCC bid process with respect to ease of implementation, efficiency, and user transparency.