An Application of Logistic Support Cost Estimation in a Contracting Environment

Abstract

One of the more interesting applications of estimation methodology in the life cycle cost (LCC) arena is found in the context of a contracting procedure used by the U.S. Air Force during the 1970’s. This procedure, known as the Logistic Support Cost Commitment (LSCC) employs a logistic support cost model framework as a basis for a cost target and subsequently, an estimate. This paper describes the cost model framework and the class of estimators typically found in the LSCC. It shows how an approximate model developed by the author can be used to determine buyer and seller risks associated with using this class of estimators. An example is presented and conclusions regarding the strengths and limitations of this contracting approach as a life cycle cost control device are drawn.