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M3 Playbook > Phase 1: Readiness > 1.5 Develop Life Cycle Cost in the Business Case

1.5 Develop Life Cycle Cost in the Business Case

Program Management

Task Activities

  1. Customer

    Develop Life Cycle Cost Estimate (LCCE) based on information gained in previous activities (e.g., requirements gathering, acquisition decisions, risk mitigation, scope of services) and reasonableness and affordability

  2. Customer

    Develop LCCE for all future phases

  3. Customer

    Compare actual spending with budget and adjust LCCE as needed

  4. Customer

    Report changes to program costs and actual spending in governance meetings and Status Reports/Dashboards

  5. Customer

    Update the Project Business Case

  6. Customer

    Populate the Investment Readiness Checklist

1.5 Best Practices

  • Plan multi-year budget requests through life cycle cost analyses based on expected scope and operational impacts of releases
  • Provide LCCE at the work breakdown structure (WBS) product or activity level, breakout costs as recurring/non-recurring (e.g., migration and Operations and Maintenance costs), align budget estimates and other required investment documentation (e.g., E300) to the LCCE, and receive final approval from the Executive Sponsor
  • LCCE examples are available on the M3 Example MAX Page

Stakeholders

Customer

  • Executive Sponsor
  • Program Manager
  • PMO Lead
  • PMO Team
  • Budget or Financial Analyst (as needed)
  • Risk Manager

Inputs

  • Project Business Case
  • Scope of Services

Outputs

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