INTEGRATING LIFECYCLE COSTING (LCC) INTO SUSTAINABLE DEFENCE PLANNING: LESSONS FROM INTERNATIONAL DEFENCE GOVERNANCE AND IMPLICATIONS FOR INDONESIA’S PERPRES 27/2019, MEF, AND NDIP
Keywords:
Sustainable Cost, Defence Policy, Lifecycle Cost, FrameworkAbstract
The study evaluates Lifecycle Costing (LCC) in defense governance and its potential applicability for Indonesia, focusing on LCC in Presidential Regulation (Perpres No. 27/2019, Minimum Essential Force (MEF) blueprints, and the National Defense Industry Policy (NDIP). With qualitative comparative methodology, six cases were selected: the United Kingdom, United States, Australia, Canada, NATO, and India. The analysis cases were organized into six dimensions: policy mandate, governance, methodology standarization, digital integration, industry engagement, digital integration, industry engagement and capacity development.
The findings reveal that LCC is lawfully instituted within well-developed defence organizations. These systems are complemented by centralized governance structures and cost integration systems, ensuring financial accountability through all phases of the lifecycle. Conversely, Indonesia defends management systems that are acquisition-centric and fragmented, with policy and institutional mechanisms focused on total ownership cost management.
The study recommends establishing a legal and institutional foundation for LCC, supported by digital cost management tools, standardized procedures, and professional training programs. Implementing these measures would enable the transition process toward a lifecycle-based defence governance model that enhances fiscal transparency, supports sustainable modernization, and aligns with global best practices.
Downloads
References
Australian Department of Defence. (2023). Defence capability life cycle manual. Canberra: Commonwealth of Australia.
Department of Defence (DoD). (2022). DoD Instruction 5000.91: Product support management for the adaptive acquisition framework. Washington, DC: Office of the Secretary of Defence.
Duarte, L., & Barbalho, R. (2024). Lifecycle costing as a governance mechanism in defence asset management. Journal of Public Procurement and Defence Studies, 19(2), 134–148.
Giordano, A. (2019). Integrating cost and capability in NATO member states: A review of through-life management. Defence and Peace Economics, 30(7), 813–828.
Harrison, M. (2024). The evolution of lifecycle cost management in modern defence institutions. International Journal of Defence Economics, 45(1), 55–70.
Humaidi, R., & Rahmadanti, D. (2023). Evaluating sustainment budgeting practices in Indonesia’s defence sector. Indonesian Journal of Security Policy, 12(3), 221–236.
Korkmaz, T. (2024). Lifecycle costing in emerging defence economies: Challenges and reforms. Defence Policy Review, 18(4), 402–419.
NATO. (2020). NATO lifecycle cost code of practice (AC/327). Brussels: NATO Support and Procurement Agency.
Setiawan, B. (2025). Integrating lifecycle principles into Indonesia’s defence modernization agenda. Asian Journal of Strategic Studies, 8(1), 44–59.
Siahaan, E., Simanjuntak, T., & Nurhadi, A. (2022). Defence planning and budgeting under the Minimum Essential Force (MEF) framework. Indonesian Defence Policy Review, 5(2), 99–113.
Suherman, H., Riyanto, P., & Kartika, L. (2020). Industrial collaboration and cost control in Indonesia’s defence sector. Journal of Defence Industry and Technology, 7(4), 301–317.
United Kingdom Ministry of Defence (MoD). (2021). Joint Service Publication (JSP) 507: Guidelines for through-life cost management. London: MoD.
Velevski, S. (2025). Cost standardization and interoperability in NATO’s defence acquisition. European Security Studies, 14(2), 88–105.
Download Journal Template 
