LCC analysis for the replacement of the dutch F-16

In the presentation we will first describe the way LCC-analysis are performed in the Netherlands in a general way. In the Netherlands LCC-studies are mainly used in the acquisition process of new military equipment. Inside the armed forces a project team is responsible for the acquisition process and thus also for the execution of an LCC study. TNO is also regularly involved for a number of reasons. The most important reason is that TNO is independent. Besides that TNO-FEL has developed a step by step approach for performing LCC-analyses inside the Defence Organisation, called FELSALDO. The FELSALDO method consists of five steps: planning, definition, development, analysis and report. We will show a common cost tree for the acquisition costs, the exploitation costs and the disposal costs. When the elements of the cost tree have been determined, these cost elements are estimated. There are different ways of estimating a cost element. After estimating the cost elements the total LCC can be calculated. After this introduction we will focus on the project: Replacement F-16. We will show how the FELSALDO method was applied during the LCC-analysis in this project. First we will give a little background of the F-16 replacement project. We will indicate that LCC is only one of seven main decision criteria. After that we will give a detailed description of the LCC process, from planning to report using the five steps of the FELSALDO methodology. The LCC analysis in this project was done thoroughly and extensively. A lot of effort was put into gathering the right data from the vendors and a lot of interaction with the vendors was necessary in order to make sure that the data used was the right one and that the vendors data was used in an appropriate manner. Finally we will give the current status of the project, describe what the next LCC related problems will be and share the lessons learned of the F-16 replacement project.