Used strategically, public procurement can contribute to the implementation of the 2030 Agenda on Sustainable Development (SDGs) as it can support achieving broader policy objectives in many domains, from innovation to social and economic dimensions. Additionally, public procurement is a powerful tool for fulfilling the objectives of the European Green Deal, which emphasises the need to take climate and environmental criteria into account in all policy areas and calls upon governments to lead by example by investing in environmentally friendly technologies, ensuring the energy efficiency of buildings, and using sustainable and green public procurement.

Several methodologies help contracting authorities promote sustainability in procurement and take into account the environmental impacts of their purchases. One of these tools is life-cycle costing (LCC). The LCC approach moves beyond the initial purchase price and evaluates all other significant cost flows over the entire life period of works, supplies or services, such as installation, operation, maintenance and end-of-life (disposal) costs. A comprehensive LCC analysis also may take into consideration the costs of mitigating external environmental impacts.

This chapter introduces the concept of life-cycle costing (LCC) and its links to the wider sustainable procurement agenda. It looks at the definition of LCC and how it has emerged as a tool for both cost savings and reducing environmental impact. The chapter also establishes the difference between LCC and similar concepts applying the life cycle approach, and discusses how they interact. Finally, it explains how LCC can be used throughout the public procurement cycle.

This chapter discusses the Hungarian policy and strategic framework on public procurement and its adequacy for the strategic use of public procurement and life-cycle costing (LCC). It also looks at the actions and initiatives to promote sustainable public procurement in Hungary and the existing operational support in implementing GPP. This chapter also analyses the uptake of green public procurement and LCC in the practice, building on the results of the survey conducted by the OECD on the use of LCC by contracting authorities in Hungary, identifying the key barriers for a greater uptake of LCC.

This chapter presents a mapping of available life-cycle costing (LCC) tools and methodologies, providing insights into the approaches EU and OECD countries and organisations have taken towards LCC, focusing on LCC calculation methodologies, cost parameters, and features of the tools. It also presents a deep-dive comparative analysis of selected tools and extract essential user-friendly features of common LCC tools to support the development process of LCC tools in Hungary. Finally, this chapter describes the uptake of LCC use based on practical experience from contracting authorities and policymakers, highlights the challenges and draws recommendations for a way forward to improve the uptake of this practice.

This chapter provides evidence-based strategic policy recommendations for the Hungarian Government on how to move towards a more structured and co-ordinated approach in the use of green public procurement criteria and especially the use of life-cycle costing (LCC).