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A Tool for Evaluating Public Procurement in the Context of Life Cycle Costs

Author

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  • Daniel Macek

    (Faculty of Civil engineering, CTU in Prague)

Abstract

The paper deals with the issue of selection procedures. The goal is to show how it is possible to incorporate a view of life cycle costs into the tender process, and not only deal with the aspect of investment costs. The paper is proposed by the Life Cycle Cost Inspector (LCCI). LCCI divides investment opportunities into individual components with their own operating characteristics and costs, allowing for a clear comparison of different investment alternatives. The tool considers acquisition costs, operating costs, and disposal costs over a specific period. LCCI also allows for reverse evaluation, where investment costs are modified based on efficiency. The tool's universality enables its use across various sectors, not just the construction industry. The author aims to shift public practice from tendering "on price" to "tendering on quality" by providing a simple methodology for comparing investment options based on the entire life cycle costs. The application is based on the Building Cost Information Service (BCIS) standard issued by the Royal Institution of Chartered Surveyors (RICS).

Suggested Citation

  • Daniel Macek, 2023. "A Tool for Evaluating Public Procurement in the Context of Life Cycle Costs," International Journal of Economic Sciences, European Research Center, vol. 12(1), pages 116-126, May.
    • Handle: RePEc:aop:jijoes:v:12:y:2023:i:1:p:116-126
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    References listed on IDEAS

    as
    1. Emilie Jašová & Božena Kadeřábková & Klára Čermáková, 2017. "Use of the method of the stochastic trend for NAIRU estimation in the Czech Republic and Slovakia at the macro- and meso-levels," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 30(1), pages 256-272, January.
    2. Jeroen van der Meer & Andreas Hartmann & Aad van der Horst & Geert Dewulf, 2022. "Raising risk awareness in multi-criteria design decisions for integrated design and construction tenders," Construction Management and Economics, Taylor & Francis Journals, vol. 40(4), pages 296-312, April.
    3. Eduard Hromada & Klara Cermakova, 2021. "Financial Unavailability Of Housing In The Czech Republic And Recommendations For Its Solution," International Journal of Economic Sciences, European Research Center, vol. 10(2), pages 47-57, December.
    4. Eduard Hromada & Klara Cermakova, 2021. "Financial Unavailability Of Housing In The Czech Republic And Recommendations For Its Solution," International Journal of Economic Sciences, European Research Center, vol. 10(2), pages 47-58, December.
    5. Jan Pojar & Daniel Macek & Renáta Schneiderová Heralová & Stanislav Vitásek, 2022. "Advances in costs optimization methods – key study of maintenance and restoration of cultural heritage," International Journal of Economic Sciences, European Research Center, vol. 11(2), pages 163-178, November.
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    More about this item

    Keywords

    Evaluation Tool; Life Cycle Costs; Tender;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • L74 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Construction

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