Environmental Life Cycle methods in acquisition of defence materiel

FOI-R--1384--SE
November 2004
ISSN 1650-1942
User report
Elisabeth Hochschorner, Göran Finnveden
Environmental Life Cycle methods in acquisition of
defence materiel
Defence Analysis
SE-172 90 Stockholm

SWEDISH DEFENCE RESEARCH AGENCY
Defence Analysis
SE-172 90 Stockholm
FOI-R--1384--SE
November 2004
ISSN 1650-1942
User report
Elisabeth Hochschorner, Göran Finnveden
Environmental Life Cycle methods in acquisition of
defence materiel

Issuing organization Report number, ISRN Report type
FOI – Swedish Defence Research Agency FOI-R--1384--SE User report
Defence Analysis
Research area code
SE-172 90 Stockholm
3. NBC Defence and other hazardous substances
Month year
Project no.
September 2004
Sub area code
E1420
35 Environmental Studies
Sub area code 2
Author/s (editor/s)
Elisabeth Hochschormer
Göran Finnveden
Project manager
Göran Finnveden
Approved by
Sponsoring agency
Swedish Armed Forces
Scientifically and technically responsible
Report title
Environmental Life Cycle methods in acquisition of defence materiel
Abstract (not more than 200 words)
The Swedish Armed Forces (SAF) and the Defence Materiel Administration (FMV) shall take environmental
consideration in all phases of the acquisition process, according to a decision made by the Swedish government in
1998. Environmental consideration in public procurement (such as defence acquisition) is somewhat different from
non-public organisations, depending on differences in regulating laws and regulations.
This report includes a description of the actors, the regulating documents and the Swedish acquisition of defence
materiel. The process is today under development and is therefore briefly described. The importance to take
environmental consideration in a life cycle perspective has been stressed by both SAF and FMV. This report has
the aim to describe how this can be done. Our major suggestion is that the defence sector should work
systematically through different product groups. For each product group, traditional LCAs combined with simplified
LCAs (in this case MECOs) or stand-alone simplified LCAs should be performed for reference products, within each
product group. The results should be an identification of critical aspects in the life cycles of the products. This
knowledge should then be used when writing TTEMs (Tactical Technical Economic Goals) and setting criteria for
procurement.
Keywords
Environmental aspects, Life Cycle Assessment, Life Cycle Costing, defence acquisition, public procurement
Further bibliographic information
Language English
ISSN 1650-1942 Pages 51 p.
Price acc. to pricelist

Utgivare Rapportnummer, ISRN Klassificering
Totalförsvarets Forskningsinstitut - FOI FOI-R--1384--SE Användarrapport
Miljöstrategiska studier
Forskningsområde
Försvarsanalys
3. Skydd mot NBC och andra farliga ämnen
172 90 Stockholm
Månad, år
Projektnummer
September 2004 E1420
Delområde
35. Miljöfrågor
Delområde 2
Författare/redaktör
Elisabeth Hochschorner
Göran Finnveden
Projektledare
Göran Finnveden
Godkänd av
Rapportens titel (i översättning)
Uppdragsgivare/kundbeteckning
Försvarsmakten
Tekniskt och/eller vetenskapligt ansvarig
Livscykelanalysmetoder för miljöhänsyn i anskaffningsprocessen av försvarsmateriel
Sammanfattning (högst 200 ord)
Enligt försvarsbeslut 1998 ska Försvarsmakten och Försvarets materielverk (FMV) ska ta miljöhänsyn under hela
anskaffningsprocessen. Miljöhänsyn i offentliga organisationer (exempelvis Försvaret) skiljer sig något från andra
organisationer beroende på den gällande lagstiftningen.
Den här rapporten innehåller en beskrivning av anskaffningsprocessen av försvarsmateriel, dess aktörer och
reglerande dokument. Eftersom upphandlingsprocessen idag är under utveckling är den inte beskriven I detalj.
Betydelsen av att ta miljöhänsyn i ett livscykelperspektiv har framhävts av både Försvarsmakten och FMV. Målet
med den här rapporten är att förklara hur det kan göras. Vårt huvudsakliga förslag är att försvarssektorn
systematiskt går igenom olika produktgrupper. För varje produktgrupp ska traditionella kvantitativa livscykelanalyser
(LCAer) kombinerat med förenklade LCAer (i detta fall MECO analyser) eller enbart förenklade LCAer utföras på
referensprodukter inom samma produktgrupp. Studierna ska identifiera de kritiska aspekter produkterna har i ett
livscykelperspektiv. Denna information bör sedan användas för att skriva TTEM (Taktisk Teknisk Ekonomisk
Målsättning) och för att ställa krav vid upphandling.
FOI1004 Utgåva 11 2002.02 www.signon.se Sign On AB
Nyckelord
Miljöaspekter, livscykelanalyser, livscykelkostnad, anskaffning av försvarsmateriel, offentlig upphandling
Övriga bibliografiska uppgifter Språk Engelska
ISSN 1650-1942 Antal sidor: 51 s.
Distribution enligt missiv
Pris: Enligt prislista
1

Abstract
The Swedish Armed Forces (SAF) and the Defence Materiel Administration (FMV) are
required to take environmental consideration in all phases of the acquisition process,
according to a decision made by the Swedish government in 1998. Acquisition of defence
materiel is an example of public procurement. Environmental consideration in public
procurement is somewhat different from non-public organisations, depending on differences
in the relevant laws and regulations.
This report includes a description of the actors, the regulatory documents and the Swedish
acquisition of defence materiel. The process is today under development and is therefore
briefly described. Environmental requirements that should today be considered in the
acquisition process (according to the Swedish Armed Forces and the Defence Materiel
Administration) are included in the report.
The importance of taking environmental consideration in a life cycle perspective has been
stressed by both SAF and FMV. This report aims to describe how this can be achieved.
The report presents suggestions on how to integrate life cycle assessments or life cycle
thinking into acquisition of defence materiel. Our major suggestion is that the defence sector
should work systematically through different product groups. For each product group,
traditional LCAs combined with simplified LCAs (in this case MECOs) or stand-alone
simplified LCAs should be performed for reference products within each product group. The
results should be an identification of critical aspects in the life cycles of the products. This
knowledge should then be used when writing TTEMs (Tactical Technical Economic Goals)
and setting criteria for procurement. The reports of LCA studies should be publicly available
to allow reviews and discussions of results. To make the work cost-effective, international cooperation
should be sought. It should be the responsibility of either SAF or FMV to ensure
that such LCAs are performed. SAF should ensure that environmental requirements, based on
a life cycle perspective, are included in the TTEM. However, this may require organisational
changes within SAF or explicit requirements from the Ministry of Defence. In addition, LCAs
can be performed as an integrated part of the acquisition process in specific cases. Strategic
Environmentally Assessments (SEAs) can be used to assess environmental impacts of plans,
including the Perspective plan and the Plan for supply of materiel. SEA can include LCAs and
when SEAs are implemented in the defence sector, the work on each should be coordinated.
2

Preface
This report was prepared as part of a two-year project financed by the Swedish Armed Forces.
The project also includes a case study on ammunition, where an LCA was carried out on a
grenade used by the Swedish defence forces, for more information see Hägvall et al. (2004).
An additional part of the project was to make suggestions regarding how LCAs can be used in
the tool Life Cycle Costing (LCC). The project is a cooperation between FOI and the Centre
for Environmental Strategies Research – fms at KTH where Elisabeth Hochshorner is
working.
The project was part of a Swedish-American cooperation (SAF and US Dept of Defence,
2002) on environmental considerations in acquisition of defence materiel, hence the report is
written in English. There are several target groups for this report; actors in the acquisition
process of defence materiel and other individuals/groups interested in environmental aspects
in public procurement, life cycle assessment, and use of life cycle assessment in procurement
(for both public and private organisations). By actors we mean environmental and
procurement units at the Swedish Armed Forces, the Swedish Defence Materiel
Administration and the Swedish Ministry of Defence, industries producing defence materiel
and also international organs and forms of co-operation.
The report is a revision of the first report ‘Use of Life Cycle Assessment Methodology in the
Acquisition Process of Defence Materiel’ (Hochschorner and Finnveden, 2003b). A draft
version was discussed at a seminar in mars 2004. We are grateful to the external reviewer Dr.
Henrikke Baumann from Chalmers University of Technology for her valuable comments.
Thanks also to Jessica Johansson from FOI for contributions on SEA, Joakim Thorneus from
FMV for giving us information on FMV’s environmental work and to all interviewees for
their contributions and interest in our project!
3

Table of contents
Abstract ...................................................................................................................................... 2
Preface ....................................................................................................................................... 3
Introduction............................................................................................................................... 6
Part 1: Methodology.................................................................................................................. 7
1.1 Research methodology................................................................................................................. 7
1.2 Methods ........................................................................................................................................ 7
1.2.1 Life cycle assessment............................................................................................................................. 7
1.2.2 Simplified life cycle assessment............................................................................................................. 9
1.2.2.1 The MECO principle....................................................................................................................... 9
1.2.3 Life Cycle Costing ............................................................................................................................... 11
Part 2: Public procurement..................................................................................................... 14
2.1 Procurement in public organisations ....................................................................................... 14
2.2 Environmental consideration in public procurement ............................................................ 14
2.2.1 Regulations for environmentally preferable public procurement........................................................ 15
2.3. Acquisition in Swedish Defence............................................................................................... 17
2.3.1 Actors in the Swedish acquisition of defence materiel......................................................................... 18
2.3.2 Regulatory documents in the Swedish acquisition of defence materiel ............................................... 20
2.3.3 Environmental requirements in the documents regulating the acquisition of defence materiel ........... 24
2.3.4 The acquisition process ........................................................................................................................ 27
Part 3: Life cycle methodology in the acquisition process..................................................... 30
3.1 Life Cycle Costing in the acquisition process.......................................................................... 31
3.2 Life Cycle Assessment in the acquisition process.................................................................... 31
3.2.1 Our suggestion ..................................................................................................................................... 31
3.2.2.1 Life Cycle Assessments of reference products............................................................................... 32
3.2.1.2 Life Cycle Assessment integrated in the acquisition process ........................................................ 32
3.2.2 The actors’ point of view ..................................................................................................................... 34
3.2.2.1 Organisational aspects................................................................................................................... 36
3.3 Strategic Environmental Assessment in the acquisition process........................................... 36
3.4 Methodology recommendations................................................................................................ 37
3.4.1 Methodology recommendations when performing LCC...................................................................... 37
3.4.2 Methodology recommendations when performing MECO .................................................................. 37
3.4.3 Methodology recommendations when performing LCA...................................................................... 40
Recommendations and conclusions........................................................................................ 41
Appendix .................................................................................................................................. 42
A. Examples of Swedish environmental legislation ...................................................................... 42
B. Abbreviations .............................................................................................................................. 43
C. Interview questions ..................................................................................................................... 44
References................................................................................................................................ 46
FMV (2003c): Miljöstöd i livscykeln, working document............................................................................ 47
Figures
Figure 1. The framework for life cycle assessment, based on ISO (1997). ............................................................. 8
Figure 2. MECO chart (Pommer et al., 2001)............................................................................................................ 10
Figure 3. Cost elements in LCC (FMV, 2002 a). .................................................................................................. 13
Figure 4. Actors in the acquisition process. Based on SOU (2002). . 18
4

Figure 5. Phases in the acquisition of defence materiel. ...................................................................................... 28
Figure 6. Life cycles in LCA, LCC and materiel systems. The steps are examples and simplifications of what can
be included (based on discussions with M. Overcash).......................................................................................... 31
Figure 7. Life cycle methodology in the acquisition process. ............................................................................... 33
Tables
Table 1. Cost types (Norris, 2001) ........................................................................................................................ 12
5

Introduction
In 1998, the Swedish Government decided that the Swedish Armed Forces (SAF) and the
Defence Materiel Administration (FMV) should apply ‘Guidelines for environmental supply
of defence materiel’, thereby taking environmental consideration in all phases of the
acquisition process. The importance of taking environmental consideration in a life cycle
perspective has been stressed by both FMV and SAF, see for example FMV’s environmental
report (FMV, 2002a). There are a large number of tools that can be used for assessing the
environmental impacts of different systems (e.g. Ahlroth et al., 2003). This report presents
suggestions on how to integrate Life Cycle Assessments (LCAs) and life cycle thinking into
the acquisition process, in order to take such consideration. Life Cycle Assessment is
interesting to use in an acquisition process, since it focuses on products in a life cycle
perspective. By life cycle thinking we mean consideration of the whole life cycle without
using a specific method. As a background to the suggestion, the report briefly describes
acquisition of defence materiel, the actors and regulatory documents for environmentally
preferable acquisition of defence materiel. Life Cycle Costing is also an interesting tool since
it involves studying costs in a life cycle perspective. However, environmental aspects are
normally not included in current practice. The LCC methodology used today in defence
acquisition is described in this report.
The aim of the report was to make suggestions on how environmental consideration in a life
cycle perspective can be taken in the acquisition process. Environmental aspects are to some
extent considered today in the acquisition process. Our suggestions imply further
consideration of environmental aspects.
Guidance for the reader
The present report consists of three parts, which are of varying significance for the different
target groups. The first and the second parts can be considered as background to the final part.
The first part is a description of the methodology used in the project, including a description
of LCA, a simplified LCA method called the MECO (Material, Energy, Chemicals, Others)
method and LCC. This part is intended for readers unfamiliar with the methods. The second
part gives a brief background on public procurement and includes a description of the
acquisition process in Swedish Defence, including a brief description of actors and documents
in the process. It also includes a section on environmental requirements in public procurement
in general and in Swedish Defence in particular. The second part is intended for readers
unfamiliar with public procurement and procurement in the Swedish defence. The description
of the acquisition process is intended for all readers, since this process is used in our
suggestion on how to integrate environmental life cycle assessments. In the third part,
suggestions are made regarding how life cycle assessments can be used in the acquisition
process of defence materiel and methodology of LCA, MECO and LCC are recommended.
The results from the interviews are also presented in this final part.
6

Part 1: Methodology
This part of the report describes the research methodology for the present study and the
methods LCA, MECO and LCC.
1.1 Research methodology
This study was carried out using literature studies and interviews with different actors in the
acquisition process. The literature studies included review of literature on Life Cycle
Assessment, Life Cycle Costing, public procurement, acquisition in the Swedish Defence and
strategies for taking environmental consideration in procurement. The interviews were
performed to gain a better understanding of the actors’ roles in the process and to evaluate the
preliminary suggestions made in Hochschorner and Finnveden (2003b). The questions are
included in the Appendix.
Terminology
In the literature used in this study, the terms acquisition, purchasing and procurement are
employed. In order to distinguish between the different terms, we decided not to use the term
purchasing and to use the terms procurement and acquisition with the following definitions:
Procurement is used to describe the phase in the acquisition process where the materiel is
bought. The term acquisition process is used to describe the process of acquiring defence
materiel. This process includes a phase called procurement. For further explanation, see
section 2.3.4 ‘The acquisition process’. We also use the term procurement process to describe
the process of public procurement, where products are not specifically defence materiel.
1.2 Methods
1.2.1 Life cycle assessment
Life cycle assessment (LCA) is the compilation and evaluation of the inputs, outputs and
potential environmental impacts of a product system throughout the life cycle. Life cycle
includes mining of raw material, production, use and disposal of a product (ISO, 1997). The
term ‘product’ includes physical products as well as services. LCAs are often used as
comparative studies. However, it is not the products that are compared, rather the function of
the products.
The assessment is standardised in the ISO 14040- series (ISO, 1997; ISO, 1998; ISO, 2000a;
ISO, 2000b). A guide to the standards has been made by Guinée et al. (2002).
The analysis is performed in four phases, as described (according to Guinée et al., 2002) and
illustrated below. During the process it can be necessary to go back to earlier phases to
improve these.
• Definition of goal and scope: The goal of the study should be explained, the intended use
of the results, the initiator of the study, the practitioner, stakeholders and intended users of
the results should be specified. A scope definition establishes the main characteristics of
an intended LCA study, for example a technical or a geographical study. The function,
functional unit alternatives and reference flows should be defined in this phase.
• Inventory analysis: The product system is defined in the inventory analysis. The
definition includes setting the system boundaries, designing the flow diagrams with unit
7

processes, collecting data for each of these processes, performing allocation phases for
multifunctional processes and completing the final calculations. The main result is an
inventory table listing the quantified inputs and outputs to the environment associated
with the functional unit, for example x kg carbon dioxide per studied unit.
• Impact assessment: The results from the inventory analysis are further processed and
interpreted in the Life Cycle Impact Assessment (LCIA). This phase includes
classification, characterisation and the optional phases normalisation, grouping and
weighting. A list of impact categories is defined that is used to classify the results from the
inventory analysis, on a purely qualitative basis. The actual modelling results are
calculated in the characterisation phase. The optional normalisation serves to indicate the
share of modelled results to a reference, e.g. a worldwide or regional total. The results can
be grouped and weighted to include societal preferences of the various impact categories.
• Interpretation: The results from the analysis, all choices and assumptions made in the
analysis are evaluated, in the interpretation, in terms of soundness and robustness.
Conclusions are drawn and recommendations are made.
Figure 1. The framework for life cycle assessment, based on ISO (1997).
Since LCAs focus on products, they are useful for product development and improvement.
The tool is also feasible for procurement, since it focuses on a product.
It is not possible to quantify everything, so qualitative data and estimations are therefore
necessary to create a comprehensive picture even in a quantitative LCA. It is also possible to
consider quantitative information in a qualitative LCA, when such is easily accessible
(Johansson et al., 2001).
A methodology recommendation on LCA is made in section 3.4.3.
8

1.2.2 Simplified life cycle assessment
A complete, quantitative LCA has never been accomplished, nor is it likely to be (Graedel,
1998). It could therefore be practical to start with less detailed studies and work towards more
detailed (Lindfors et al., 1995).
A simplified LCA is a simplified variety of detailed LCA conducted according to guidelines
not in full compliance with the ISO 1404X standards and representative of studies typically
requiring from 1 to 20 person-days of work (Guinée et al., 2002). (The terms ‘simplified’ and
‘streamlined’ are here used as synonyms, in line with earlier publications, e.g. Christiansen
(1997). An LCA can be qualitative, quantitative or semi-quantitative. A large number of
simplified LCA methods has been developed, see for example reviews in Christiansen (1997),
Graedel (1998), Todd and Curran (1999) and Johansson et al. (2001).
Many of these methods have been developed for a specific group of products and are not well
documented. Two simplified LCAs, Environmentally Responsible Product Assessment matrix
(Graedel and Allenby, 1995) and MECO (Wenzel et al., 1997; Pommer et al., 2001) were
evaluated in an earlier project (Hochschorner et al., 2002; Hochschorner and Finnveden,
2003a). These two methods were chosen since they are well documented and fundamentally
different. The evaluation resulted in a recommendation to use the MECO principle as a
parallel complement, and/or as a pre-study to a traditional LCA. The MECO method
generates more information on, for example, toxic substances than the quantitative LCA. The
assessment can identify critical aspects of the product, which is useful when deciding on
environmental requirements for procurement. Another advantage with the MECO method is
that the data needed to perform the analysis are not production-specific.
1.2.2.1 The MECO principle
The Danish Institute for Product Development and dk-TEKNIK have developed the MECO
principle in co-operation with a larger Danish project. The use of the principle is described in
the ‘Handbook for Environmental Assessment of Products’ (Pommer et al., 2001), which is
intended for small and medium-sized companies. The principle divides the assessment into
four areas in accordance with the underlying causes of the product’s environmental impacts.
These areas, which have given the principle its name, are Materials, Energy, Chemicals and
Others (Wenzel et al., 1997).
The information on the studied product or system is first structured in the MECO chart, see
Figure 2. The analysis with the chart can be followed by a more detailed LCA, making a
gradual evaluation of the product.
9

Material Manufacture Use Disposal Transport
1.Materials
a) quantity
b) resource
2. Energy
a) primary
b) resource
3. Chemicals
4. Others
Figure 2. MECO chart (Pommer et al., 2001).
The category ‘Material’ includes all the materials needed to produce, use and maintain the
product. Materials that are reused in the disposal phase are entered in the Disposal box,
marked with a minus sign. The use of materials is partly presented as quantity (1a) and partly
as resources (1b).
The category ‘Energy’ includes all energy used during the product’s life cycle, including the
use of energy during the supply of materials. The use of energy should be indicated as
primary energy (2a) and as use of oil resources (2b).
To be able to compare products, the use of material and energy should be calculated as
consumption of resources, in millipersonreserve (mPR). One personreserve is resource
consumption in proportion to the global reserves of a resource, available for one person and
all future posterity. The use of energy is calculated as use of oil resources.
The category ‘Chemicals’ includes all chemicals in the product’s life cycle. The chemicals are
classified as type 1, 2, or 3 according to their environmental hazard level. Type 1 refers to
very problematic substances, type 2 problematic and type 3 less problematic substances. The
classification was made with help from EU directives on marking of chemicals, so-called
Risk-phrases (EU directive 67/548/EEG, (European Commission, 1967) and Danish lists
(Listen over farlige stoffer, Effekliste, Listen over uønskede stoffer, Miljøstyrelsen, 2000b;
Miljøstyrelsen, 2000a; Miljøstyrelsen, 2000c). A chemical is classified as type 1, 2 or 3
depending on whether it is within both, either, or neither of these lists.
Environmental impacts that do not fit into the categories described above should be included
in the category ‘Other’.
For a detailed description of how to use the method, see Pommer et al., (2001) or
(Hochschorner et al., 2002). Beginning with the original Danish methodology, we adjusted
the approach to Swedish conditions, and also made some further suggestions as described in
part 3, section 3.4.2.
10

1.2.3 Life Cycle Costing
Life Cycle Costing (LCC) is a method for quantifying the costs related to a production system
or a product during its life cycle (Dahlén and Bolmsjö, 1996).
The results from the study can be used as a support for economic decision-making, e.g. for
production or procurement. The method was originally used by the American defence
organisation for procurement (in the 1950-60s) (Huppes, 2003) since it allowed costs other
than the actual price of the product to be taken into consideration. The finding that operation
and support costs for typical weapon systems accounted for as much as 75% of the total cost
stimulated the adoption of the method (Aseidu and Gu, 1998).
There are no standardised guidelines on how to perform a LCC or which costs to include. The
costs included in LCC are somewhat different depending on the description of the method.
The analysed life cycle is the economic lifetime for the system. This can be the time from
development to procurement, use and disposal (Woodward, 1997). It can also be the
economic lifetime during only the use phase, for example three years for a computer (Norris,
2001). Activities included are those causing direct costs or benefits to the decision maker,
during the economic life of the investment, as a result of the investment (Norris, 2001). Data
needed are the costs during the defined life cycle, for an example see below. When the
analysis is extended to include environmental costs, costs like environmental taxes and costs
for disposal are needed (Senthil et al., 2003).
Table 1 shows five different costs types (Norris, 2001). Costs included in a traditional LCC
are internal costs, both direct (type 1) and indirect (type 2) (Norris, 2001). In an extended
LCC, contingent (type 3) and intangible (type 4) costs can also be included. These costs are
borne by the company. External costs (type 5) are not included in this description of LCC.
Such costs are, however, included in an extended LCC methodology called Total Cost
Assessment (TCAce) (CWRT, 2000; Norris, 2001).
11

Table 1. Cost types (Norris, 2001)
Cost Type
Description
Type 1: Direct Direct costs of capital investment, labour, raw material and waste disposal. May include
both recurring and non-recurring costs. Includes costs for capital, operation and
maintenance.
Type 2: Indirect
Type 3: Contingent
Type 4: Intangible
Type 5: External
Indirect costs not allocated to the product or process. These costs may include both
recurring and non-recurring costs. Includes costs for capital, operation and maintenance.
Contingent costs such as fines and penalties, costs of forced clean-up, personal injury
liabilities, and property damage liabilities.
Costs that are difficult to measure, including consumer acceptance, customer loyalty,
worker morale, union relations, worker wellness and community relations.
Costs that are borne by parties other than the company (e.g. society)
By including external costs, the LCC will have similarities to Cost-Benefit Analysis (CBA)
(e.g. Ahlroth et al., 2003).
LCC in combination with other tools
Different attempts to include environmental aspects in LCC exist, for example Senthil et al.
(2002; 2003) and Aseidu and Gu (1998). In the methodology called Life Cycle Environmental
Cost Analysis (LCECA) by Senthil et al. (2002), the costs of the following parameters are
included:
• Waste control
• Waste treatment
• Waste disposal
• Environmental management systems
• Eco-taxes
• Rehabilitation
• Energy
• Savings from recycling and reuse strategies
Another example is Total Cost Assessment, see above.
There are some attempts to combine LCC with LCA, see for example Norris (2001), Schmidt
(2003) and Rebitzer and Hunkeler (2003).
LCC in Swedish Defence
LCC is performed and used today by FMV in the acquisition process for studies, development
and procurement (FMV, 2002b). It is not a requirement from the customer to perform a LCC,
but it is often used when procuring materiel of high monetary value and principal equipment
(OE-materiel, organisations och effektbestämmande materiel) (K-G Lewenhaupt, pers.
comm.). FMV uses LCC as a basis for decisions when separating alternative solutions of
materiel systems and maintenance.
Other fields of application in the acquisition process are (FMV, 2002b):
12

• As a basis for TTEM (Tactical Technical Economic Goal, see section 2.3.2 Regulatory
documents in the Swedish acquisition of defence materiel) in the study-phase.
• As a basis for decisions on modifications or reconstruction to improve already existing
systems or to make them more cost-effective.
• Analyses of the reliability-requirements cost-consequences can be used as a basis for
choosing a system.
• As a basis for choosing supplier: LCC can be used both for choosing supplier when
procuring standard materiel and for evaluation of tenders.
• As a basis for budget forecasts.
FMV defines LCC as a measure of the total economic consequence of a materiel system over
the system’s life length, i.e. costs incurred during development, procurement, use, support and
disposal. A materiel system is one or many materiel objects with complementary operation
and maintenance. The life length refers to the number of years the system is to be used (FMV,
2002b). LCC in FMV does not necessarily include the total actual cost for the material
system. For example fixed costs and absorbed costs (costs that will not affect future decisions)
are often excluded from the analysis (FMV 2002 b).
In FMV’s model of LCC, the different parameters are built up hierarchically in a number of
levels, where the highest level is the life length cost of the studied system (LCC in Fig. 3).
Each level consists of one or more cost elements, each consisting of other levels until the last
level. Figure 3 illustrates the first and second levels in FMV’s LCC methodology.
LCC
LCCA
LSC
LOC
LTC
Figure 3. Cost elements in LCC (FMV, 2002 a).
Where:
LCCA= Life Cycle Cost Acquisition; cost for development and acquisition of the materiel
system.
LSC= Life Support Cost; costs for operation and maintenance of the system, including costs
for development and procurement of resources and also future practice.
LOC= Life Operation Cost, cost for operation of the system, such as energy and maintenance
costs.
LTC= Life Termination Cost, cost for phasing out and destruction of the system. LTC can
also be revenue.
13

Part 2: Public procurement
Part 2 of the report includes a brief description of public procurement, regulations for
environmentally preferable procurement, the acquisition process and regulatory documents in
Swedish Defence.
2.1 Procurement in public organisations
Acquisition of defence materiel is one example of public procurement. Procurement in public
organisations is different from non-public organisations, depending on regulations. Other
differences apart from regulations are for example (OECD, 2000):
• Public procurement involves many participants in the decision.
• Considerable quantities or values may be involved in public procurement.
• Public procurement is a highly structured and formalised process to determine the
characteristics of the products and services to be tendered.
The Organisation for Economic Co-operation and Development (OECD) has defined the
following public procurement process (OECD, 2000);
1. Specification: Definition of demand, market research, choice of product and volume
analysis.
2. Selection: Setting of criteria and publication, invitation and supplier selection,
proposal or tender application and evaluation.
3. Contracting: Negotiation and definition of agreement.
4. Ordering.
5. Monitoring of contract, individual orders and invoice verification.
6. After-care: Claims, complaints, contract evaluation and new contract preparation.
Procurement by an authority in the European Union over a certain threshold is controlled by
regulations (certain EU directives). Contracting should be a result of a competitive tendering
procedure that starts with a ‘call for tender’. The call for tender includes specifications on
bidders and products and can be open or restricted. The search for a contractor has to be
announced in the Official Journal of the European Union. Requirements on the products or
services are entered in the ‘tendering specifications’, which should also include criteria for
selection and awarding of the contract. Selection criteria must be based on economic
capability of the bidders and/ or technical specifications. These are used to screen bids in a
first review process. Environmental requirements can be formulated as part of the technical
requirements in the call for tenders (The European Green Purchasing Network, 2003).
2.2 Environmental consideration in public procurement
Different organisations have their own meaning of environmental consideration. Depending
on the chosen perspective, different strategies and means are usable. The focus can be on one
or several aspects, for example chemicals, waste, energy or legal requirements. Other
important aspects to consider when procuring material in addition to the environment, are for
example costs, legal requirements, policy and social aspects. Hence, the choice of supplier or
product and the decision on requirements on these imply trade-off situations. The possible
help from tools in trade-offs is discussed in Byggeth and Hochschorner (2004). Tools can be
used in two different ways for procurement purposes, so-called supplier selection or product
selection (Baumann and Tillman, 2004). In supplier selection, suppliers are compared. In
product selection, tools can be used to analyse and compare products and thereby choose
supplier. In this work a product selection approach was assumed. If the former approach had
been assumed, our suggestions would have been different.
14

In this report the focus is on tools with a life cycle perspective (Life Cycle Assessments and
Life Cycle Costing). A lot of other tools for taking environmental consideration have been
developed; for example guidelines with prescription on important aspects to consider (see for
example Luttropp and Karlsson (2001) or checklists of materials or chemicals that should not
be used (see for example FMV (2003a) and Nordkil (1998). There are also tools including
criteria or general requirements on products to procure; a Swedish tool for environmentally
preferable procurement called the EKU-tool (EKU-delegationen, 2004) and FMV’s
prescriptions for procurement. The EKU-tool is a database available on the Internet that
mainly consists of criteria documents for commonly procured products and services. The
criteria are principally ready to use as part of the inquiry in the public procurement process
(EKU-delegationen, 2004). FMV’s prescriptions are further described below in section 2.3.3.
Other approaches for environmental consideration in procurement are to choose products with
eco-labels, or to require that the suppliers have Environmental Management Systems (EMS).
Three different types of eco-labels exist according to ISO 14020 series. Type 1 is voluntary
multiple criteria-based eco-labels that are awarded to a product claming overall environmental
preferability within a particular product category based on a life cycle perspective (ISO
14024, ISO 1999b). Examples of type 1 labels are the European Eco-label and the Nordic
Swan. Type 2 labels are environmental claims without a third party certification (ISO 14021,
ISO 1999a). Environmental Product Declaration (EPD) is the third type of eco-label. EPD is a
declaration of quantified environmental data for a product with pre-set categories of
parameters based on life cycle assessments (according to ISO 14040-series) without
valuations or requirements to fulfil. The information in an EPD must be based on a life cycle
inventory analysis (according to ISO 14041), an inventory analysis with complementary
methods or a full LCA including an impact assessment (according to ISO 14042). The LCA
information can be complemented with other relevant information (ISO TR 14025, ISO
2000c). (Piper et al., 2001).
Environmental management systems (EMS) are a system for the company’s environmental
work, not for a specific product. EMS is standardised in ISO 14001. Since EMS are not
focused on products, these are not further discussed in this report.
As already mentioned, this report focuses on the use of life cycle tools. Since acquisition of
defence materiel can include the actual production of the materiel to be bought (the process is
described below in section 2.3.4), it is important to use a tool that can give guidance for
environmentally preferable production and that considers the whole life cycle of the product.
LCAs have been used for procurement purposes previously. The use of LCA for building
materials is described in Baldo et al. (2002) and Lippiat and Boyles (2001). Baldo et al.
(2002) use LCA to find criteria for eco-labels. In Lippiatt and Boyles (2001), a tool
combining LCA and LCC for measuring environmental performance of building products is
described.
2.2.1 Regulations for environmentally preferable public procurement
Laws and regulations control environmental consideration in public procurement, for example
The Act on Public Procurement (Lag (1992:1528) om offentlig upphandling, Svensk
författningssamling, 1992a) in Sweden.
15

The Swedish Act on Public Procurement is based on EU-directives and GPA (Agreement on
Public Procurement within WTO, to which Sweden is affiliated) and controls procurement in
Swedish public organisations. The Commission of the European Communities has made an
interpretative communication on the possibilities for integrating environmental considerations
into public procurement. (COM, 2001). The following description of environmental
consideration in public procurement is mainly based on COM (2001).
The main possibilities for performing environmentally preferable public procurement are
when deciding on the subject matter of a contract. These decisions are not covered by the
rules of the public procurement directives, but are covered by Treaty rules and principles on
the freedom of goods and services, notably the principles of non-discrimination and
proportionality. How far this is effectively done depends on the awareness and knowledge of
the procurement entity, and also environmental or other legislation (COM, 2001).
The public procurement directives do not cover public procurement below certain economic
threshold values (1.4 MSEK for authorities) or secrecy materiel (R Falkendal, pers. comm.).
Contracts that are not covered by public procurement directives have a considerable larger
freedom to impose desirable requirements. In such cases, the procurement authorities are free
to impose requirements and define conditions that go beyond what is possible under the
public procurement directives.
For contracts that are covered by the directives, there are two options for awarding the
contract: the lowest price and the ‘most economically advantageous tender’. As a general rule,
the public procurement directives impose two conditions with regard to the criteria applied for
determining the most economically advantageous tender. First, the principle of nondiscrimination
has to be observed and second, the criteria applied must generate an economic
advantage for the contracting authority. Awarding the contract is, of-course, also regulated by
environmental or other legislation, either community legislation or national legislation
compatible with European Community law (COM, 2001).
Contracts that are covered by the directives also have to consider the following regulations
when taking environmental consideration for procurement (COM, 2001):
• The technical specification of the article to be purchased must according to Directives be
included in the general or contractual documents relating to each contract. Technical
specifications include all characteristics required by the contracting authority in order to
ensure that the product or service fulfils the use for which it is intended. It is possible to
include prescriptions of primary materials, production processes, ECO-labels and use of
variants in the technical specification, in cases where the subject matter of the contract
may not be sufficiently precise and clear to all parties concerned. Such indications must be
non-discriminatory and must always be accompanied by the term ‘or equivalent’. There
are also some other restrictions, for example regarding production processes, see COM
(2001).
• The most economically advantageous tender must be evaluated in terms of criteria that the
contracting authority has indicated beforehand, either in the contract notice or in the
contract documents. It is possible to use criteria other than the examples given in the
directives, but they must not be discriminatory and they must be economically
advantageous for the procurement authority. Economic considerations can include aspects
of environmental protection, such as the energy consumption of a product. The evaluation
of the most economically advantageous offer implies complex trade-offs, even without
16

consideration to environmental characteristics (COM, 2001). Factors that can give rise to
trade-off situations are for example: competition, functionality and social aspects (OECD,
2000).
• Environmental considerations are not explicitly mentioned in the current public
procurement legislation. However, it is possible to consider for example the consumption
of natural resources, by ‘translating’ this environmental objective into specific, productrelated
and economically measurable criteria by requiring a rate of energy consumption.
• Costs incurred during the life cycle of a product, which will be borne by the contracting
authority, may be taken into account for the assessment of the most economically
advantageous tender. When evaluating tenders, a procurement organisation can also take
account of costs for treatment of waste or recycling.
• As a general rule, externalities are not borne by the purchaser of a product or service, but
by the society as a whole and therefore do not qualify as award criteria as defined above.
The Commission notes in this respect that contracting authorities retain the possibility to
define the subject matter of a contract or impose conditions relating to the execution of the
contract and to integrate their environmental preferences linked to the eventual occurrence
of external costs.
In addition to the interpretative communication, the Commission intends to produce a
handbook on green public procurement with examples on how to draw up green calls for
tender in conformity with Community law (COM, 2001).
The Committee for Ecologically Sustainable Procurement in Sweden has developed
guidelines to help public sector organisations integrate environmental concerns into their
procurement of goods, services and contracts. This has been done in co-operation with
representatives from government agencies, local authorities and county councils. The
guidelines are Internet-based and include proposals for environmental requirements that can
be applied to about 70 different product groups such as batteries, food, furniture and cleaning
services. The guidelines will be changed due to the interpretative document on environmental
concerns in public procurement described above (EKU-delegationen, 2002)
The Commission has also made an interpretative communication on integrated product policy
(COM and Commission of the European Communities, 2003). According to this, it is
essential to have a life cycle perspective for products. COM (2003) also states that life cycle
assessments are the best available methodology to assess the environmental impact of
products. A web page containing relevant rules and laws, a product database (with product
criteria) and guidance for public procurement will be available at the end of 2004. More
information on IPP can be found in COM (2003) and at the website
www.europa.eu.int/comm/environment/ipp
2.3. Acquisition in Swedish Defence
Since the end of the Cold War, Swedish Defence has been undergoing changes, as has the
acquisition process. Processes described below may therefore change during coming years.
Materiel acquired is used in the Swedish Armed Forces for education, practice and
maintenance or stored for use in an emergency situation. It can also be used in international
co-operation and for peacekeeping operations. Products include ammunition, aeroplanes,
clothes, tools and cutlery. FMV’s financial turnover was 23 billion Swedish crowns in 2002
(FMV, 2002a).
17

2.3.1 Actors in the Swedish acquisition of defence materiel
The Swedish acquisition process for defence materiel engages actors from both the public and
non-public sectors (SOU, 2000), namely:
• The Swedish Parliament
• The Swedish Government
• Swedish Armed Forces (SAF)
• Swedish Defence Materiel Administration (FMV)
• Swedish Defence Research Agency (FOI)
• Industry
• International organs and forms of co-operation
There are a number of documents regulating the process. The connection between actors and
these documents is illustrated in Figure 4 below. A brief description of each actor and the
documents is presented after the figure. The roles of SAF, FMV and the industries are also
briefly described in section 2.3.4 ‘The acquisition process'.
The Swedish Parliament
Establishes laws, e.g.: Act on Public Procurement, Environmental Code
The Government
Ministry of Defence Ministry of Finance Ministry of Foreign Affairs
Controls the direction of the acquisition in Appropriation directions
Order
TOEM
TTEM
Swedish Armed Forces
Assigns FMV to acquire
materiel. Requirements
are set in MFP, MAL,
perspective plans
Swedish
Defence
Research
Agency
Research and
technology
assignment
Swedish Defence
Materiel
Administration (FMV)
Acquires, maintains and
phases out the materiel
Industry
Develops and produces
materiel
Figure 4. Actors in the acquisition process. Based on SOU (2002).
The arrows indicate decisions; information for the decisions often goes in the opposite direction.
The Swedish Parliament’s (‘Riksdagen’) responsibility concerning materiel acquisition is to
establish laws. Laws in force regarding materiel acquisition are e.g. The Law on War
Equipment (Lag (1992: 1300) om krigsmateriel, Svensk författningssamling, 1992c) and The
18

Act on Public Procurement (Lag (1992: 1528) om offentlig upphandling, Svensk
författningssamling, 1992a) (SOU, 2001).
The Government informs and makes suggestions for the decisions of the Parliament. It
controls the acquisition process by instructions, rules, general conditions, and formulation of
assignments to the authorities. The Government strongly emphasises the need for
international co-operation, especially when planning for new military systems.
The orientation of the acquisition-process is controlled in The Appropriation Directions to the
Armed Forces (‘regleringsbrevet till försvarsmakten’), where requirements on aims and
results are stated. A long-term control of the acquisition process is also made by indication of
the acquisitions alignment. The Act on Public Procurement controls the commercial activities
(SOU, 2002).
Acquisition for the Armed Forces is made on the basis of The Plan for Supply of Materiel
(‘MFP, materielförsörjningsplanen’). In the Appropriation Directions, the Government gives
directions regarding which systems in the MFP the Armed Forces should introduce to the
Ministry of Defence before ordering. This occurs, for example, when the total acquisition
value for an individual system amounts to 50 million SEK or more.
The preparation of acquisition matters is a joint effort between the Ministry of Defence, the
Ministry of Finance and the Ministry of Foreign Affairs. The preparation includes contacts
with industry concerning, for example, the strategic conditions for production of military
systems in the country and different aspects of the internationalisation of the industry.
The Ministry of Defence (Fö) has regular dialogue with the Armed Forces and the Defence
Materiel Administration concerning acquisition and planning of support of materiel. The
Ministry of Defence also contributes to a large extent to the international co-operation of
security and defence policy.
The Ministry of Foreign Affairs co-ordinates the Government Offices’ security policy aspects
within the international co-operation. The Ministry also co-ordinates matters of promotion
and control of defence materiel export.
The Ministry of Finance co-ordinates aspects of economic policy of importance for the
acquisition process. (SOU, 2001)
The Swedish Armed Forces (SAF)
The Armed Forces place an order for the requirements of a research, development, or
acquisition assignment with attendant funding to the Defence Materiel Administration (SOU,
2002).
Acquisition in the Armed Forces is made on the basis of the established terms of reference in
The Plan for Supply of Materiel (MFP) and The Plan for Supply of Land, Installations and
Premises (‘MAL (mark, anläggning och lokaler)- försörjningsplanen’). Acquisition can be
made as step-by-step procurement or direct procurement (SOU, 2001).
The fundamental analysis and planning activity is carried out within the Perspective Plans.
The work with the plan is reported annually to the Ministry of Defence and is a basis for the
Government’s long-term decisions.
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The Swedish Defence Materiel Administration (FMV)
From a systems perspective, the Swedish Defence Materiel Administration (FMV) is
responsible for cost-effectively providing the Armed Forces with military materiel. FMV
acquires, maintains and phases out materiel and supplies on assignment from principally the
Armed Forces.
The National Fortification Administrations (Fortv)
The National Fortification Administration administers and rents out defence properties, and is
responsible for management of these properties. It is a government agency under the Ministry
of Finance. This report does not focus on the work done by the National Fortification
Administration.
The Swedish Defence Research Agency (FOI)
The Armed Forces and the Defence Materiel Administration can get support for studies of the
operational capabilities and structure of the materiel from FOI. The research carried out by
FOI can, for example, help FMV and SAF to specify performance of the materiel, which is
important in order to reduce risks and environmental impacts.
Industry
Swedish-based contractors supplying systems to the Swedish Defence include: Alvis
Hägglunds AB, Bofors Defence AB, Saab AB, Ericsson Microwave Systems AB and
VOLVO Aero Corporation. A number of large contractors are also found in the European
Union, in the US and elsewhere in the world.
International organs and forms of co-operation
Swedish Defence co-operates with many organisations within the area of defence materiel, for
example the Western European Armaments Group (WEAG). The actor in charge of the cooperation
is the Swedish Government, represented by the Swedish Defence Materiel
Administration (SOU, 2000).
2.3.2 Regulatory documents in the Swedish acquisition of defence materiel
The acquisition process is regulated by a number of documents, some of which are:
• Appropriation Directions (‘Regleringsbrev’)
• The Plan for Supply of Materiel (‘MFP, materielförsörjningsplanen’)
• The Plan for Supply of Land, Installations and Premises (‘MAL-försörjningsplanen’)
• The Perspective Plan (‘perspektivplanen’)
• The Objectives Handbook (‘Handbok MÅL’)
• Tactical Organisational Economic Goal (TOEM)
• Tactical Technical Economic Goal (TTEM)
• Agreement on Co-ordination (‘Samordningsavtal’) between the Swedish Armed Forces
and the Defence Materiel Administration
• Environmental regulatory documents (listed separately below).
Appropriation Directions:
The Government controls the direction and funding of the acquisition process through the
Appropriation Directions. Long-term control of the acquisition process is also achieved by
indication of the acquisitions alignment (SOU, 2002). The Ministry of Defence prepares the
Appropriation Directions.
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The Plan for Supply of Materiel and the Plan for Supply of Land, Installations and
Premises:
Acquisition for the Armed Forces is made on the basis of the Plan for Supply of Materiel
(MFP). In the Appropriation Directions, the Government gives directions regarding which
orders in the MFP the Armed Forces should introduce to the Ministry of Defence before
ordering. The Swedish Armed Forces establishes terms of reference for procurement in MFP
and the Plan for Supply of Land, Installations and Premises (MAL). (SOU, 2001)
The Perspective Plan:
The Perspective Plan is drawn up by the Swedish Armed Forces. Perspective studies cover a
period of 15-20 years into the future and result in Perspective Plans with proposals for the
future goals of the military defence and war organisation. The development of the Armed
Forces over a maximum of 5+5 years is directed by Programme Plans. These are discussed
annually and are elaborated on the basis of the existing war organisation and with a direction
towards the long-term aim indicated.
The Objectives Handbook:
This handbook gives directions for the development of the military organization, on the basis
of conditions and demands from the Armed Forces’ operative planning and production in
peace. It describes, among other things, goals for units, supplies and constructions, the
process and co-ordination of the acquisition process and the work with TOEM and TTEM.
Tactical Organizational Economic Goal:
Type units should have a unit goal called the Tactical Organizational Economic Goal
(TOEM). With TOEMs for units as a basis, the necessary Tactical Technical Economic Goals
(TTEM) for supplies are prepared. TOEMs are written by the Swedish Armed Forces.
The process step-by-step is normally:
1. Draft goals (UTOEM)
2. Preliminary goals (PTOEM)
3. Final goals (TOEM)
Tactical Technical Economic Goal:
Tactical Technical Economic Goal (TTEM) is based on TOEM and a description of the
aggressor, standardised for the object or system with tactical, technical, economic, combat
and environment studies and investigations. The goal expresses the relationship between
effect and costs of procurement, support and disposal respectively. It also serves as a basis for
specification of performance characteristics; quality and capability to meet the units’ needs
and serves as a basis for contracts with suppliers (through FMV).
According to the Objectives Handbook (SAF, 1997) TTEM is used as a basis for:
• Specification of performance, quality and capacity to provide the needs of the units,
• Submitting a tender and ordering (from FMV, Fortv and others),
• Contract with suppliers (made by FMV, Fortv and others),
• Studies, investigations, projecting, development and production, and also liquidation of
materiel and constructions.
TTEM is written by the Swedish Armed Forces in co-operation with FMV and should be
available when a decision for investment is made and before the procurement is initiated
(SAF, 1997).
21

TTEM should be prepared and decided by a central production leader.
If necessary, co-operation is initiated with the authorities concerned outside the Armed
Forces.
TTEM exists in three versions:
1. UTTEM (draft) indicates the direction for industrial studies and system plans.
2. PTTEM (preliminary) serves as a basis for investigation and development activities
and long-term planning. PTTEM should be to hand when a decision for development
is taken.
3. STTEM (approved) serves as the operational and tactical requirements in the
assignment to FMV.
Agreement on co-ordination
This is an agreement to co-ordinate relations and routines between the Swedish Armed Forces
and the Defence Materiel Administration, regarding research and technology development,
acquisition of materiel and constructions, technical services, land and constructions.
According to this agreement FMV should apply ‘Guidelines for Environmental Supply of
Defence Materiel’ (for a description of the Guidelines, see below). Chemical substances must
also be approved by the Swedish Armed Forces’s chemical group.
Environmental documents to be considered during the acquisition process of defence materiel
are:
• The Environmental Code (Miljöbalk 1998:808) (Svensk författningssamling, 1998)
• The Defence Sector’s Environmental Goal (’Miljömål för försvarssektorn och
arbetet för ekologisk hållbarhet’, SAF, 1999a)
• Nordic Agenda 21 for the Defence Sector (Swedish Ministry of Defence, 2002)
• Guidelines for Environmental Acquisition of Defence Materiel: (Swedish Ministry
of Defence, 1998)
• Guidelines on the Acquisition of Environmentally Sound Defence Procurement
(NATO/PFP, 2001) should be considered in international co-operation-projects.
• Environmental Policy of the Armed Forces, (SAF) the policy is available at:
http://www.mil.se/)
• Environmental Policy of the Defence Materiel Administration, (FMV) the policy is
available at: http://www.fmv.se/environ/index.asp?K=001&L=UK)
• System Safety Handbook by the Swedish Armed Forces (’Försvarsmaktens
handbok för Systemsäkerhet, H SystSäk’, SAF, 1996)
• Environmental Handbook by the Swedish Armed Forces (’Handbok miljö för
Försvarsmakten, H Miljö’, SAF, 2003).
• FMV’s Criteria for Chemical Substances, (FMV, 2003a)
The Environmental Code (Miljöbalk 1998:808)
The Swedish Environmental Code was adopted in 1998 and entered into force on 1 January
1999, bringing together 15 existing central environmental laws. The aim of the Environmental
Code is to promote sustainable development based on the understanding that nature is worthy
of protection in its own right, and that man's right to exploit nature carries with it a
responsibility. The Environmental Code is further elaborated on and specified in the form of
ordinances, regulations issued by public authorities and decisions taken in individual cases.
(Svensk författningssamling, 1998)
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The code is available in English at: http://miljo.regeringen.se/pressinfo/pdf/ds2000_61.pdf
Other environmental legislation is presented in Appendix A.
The Defence Sector’s Environmental Goal
Based on the national environmental objectives, the Swedish Armed Forces has been assigned
by the government to develop environmental objectives for the defence sector. According to
this assignment, the economic consequences for society concerning benefits and costs caused
by the measures must also be presented in relation to the measures and possible effects and
scope of the objectives. (SAF, 1999a)
Nordic Agenda 21 for the Defence Sector
The defence ministers in Denmark, Finland, Norway and Sweden have formulated an
environmental policy with 21 superior objectives for authorities in the defence sector in
Nordic countries. The objectives have been made with the intention of fulfilling Agenda 21,
adopted at United Nations conference on environment and development in Rio de Janeiro
1992. One of the 21 objectives is to set up and implement environmental requirements in
acquisition of materiel and buildings. The objectives can be found in full in Swedish Ministry
of Defence (2002).
Guidelines for Environmental Acquisition of Defence Materiel
The Swedish Government decided in 1998 that FMV and SAF should apply guidelines for
environmentally sound procurement. The guidelines state, among other things, that FMV and
SAF should stimulate the defence industry to develop environmentally preferable products
and processes and that chemical products should be decreased and environmentally hazardous
substances replaced with less hazardous substances (Swedish Ministry of Defence, 1998). The
guidelines are further discussed in section 2.3.4 and are available in Swedish at:
http://www.fmv.se/environ/index.asp?K=003001&L=SE
Guidelines on the Acquisition of Environmentally Sound Defence Procurement
Guidelines developed for the armed forces of the North Atlantic Treaty Organization (NATO)
and the Partnership for Peace (PfP) countries should be considered in international cooperation
projects. The aim of the guidelines is to ensure that defence materiel complies with
obligations in the field of environmental protection and has minimal environmental impacts
throughout its entire life cycle (NATO/PFP, 2001).
Environmental Policy of the Armed Forces
The overarching objective for the armed forces is to prevent war and thereby avoid the
catastrophic environmental destruction a war causes. In peacetime the objective should be
fulfilled within the environmental regulations and with the lowest possible environmental
impact by taking environmental consideration during all planning and operation, minimising
use and spread of substances that are unfamiliar for nature, minimising use of energy and nonrenewable
resources, using resources sparingly and minimising waste, striving for continual
improvements in the environmental field, limiting the spread of noise, promoting biological
variety, involving all personnel in the environmental work and assisting society in the event of
an environmental catastrophe (SAF). The policy is available at: http://www.mil.se/
Environmental Policy of the Defence Materiel Administration
FMV´s environmental policy states that FMV should continuously achieve improved
environmental performance and prevent pollution by: being the most knowledgeable on
environmental defence materiel issues, considering environmental issues during the whole
23

materiel supply process, demanding that suppliers and those submitting tenders have their
own active environmental work and that they develop environmentally sound products and
processes, making sure that environmental legislation is observed and contributing towards
other legislation being favourably developed from an environmental point of view, improving
internal activities and developing the defence sector’s environmental activities in co-operation
with the Armed Forces (FMV). The policy is available at:
http://www.fmv.se/environ/index.asp?K=001&L=UK)
System Safety Handbook by the Swedish Armed Forces (’Försvarsmaktens handbok för
Systemsäkerhet, H SystSäk’)
The System Safety Handbook contains SAF´s internal regulations and guidelines for safe
operation of the defence system (SAF, 1996).
Environmental Handbook by the Swedish Armed Forces
The Environmental Handbook (SAF, 2003) is intended as a guideline for directors and
environmental administrators within the Swedish Armed Forces. One section of this
handbook is about environmentally preferable acquisition and environmental requirements.
The handbook points out the importance of considering the whole life cycle of the materiel
and of having relevant environmental requirements. Criteria should be established to evaluate
the requirements. If a specific criterion is to be fulfilled, it has to be stated in the inquiry.
Tools that can be used to set relevant environmental requirements are, according to the
handbook: Environmental Product Declarations (EPD), Life Cycle Assessments, a tool made
by the Committee for Ecologically Sustainable Procurement in Sweden (see section 2.2
‘Environmentally preferable public procurement’) and eco-labels (SAF, 2003). All these tools
except for EPD are discussed in this report.
FMV’s Criteria for Chemical Substances (FMV, 2003a) are discussed in section 3.4.2.
2.3.3 Environmental requirements in the documents regulating the acquisition of
defence materiel
The Swedish Government decided in 1998 that the Armed Forces and the Defence Materiel
Administration should apply ‘Guidelines for Environmental Supply of Defence Materiel’.
Thereby environmental consideration is to be taken in all phases of the acquisition process
(The phases concerned are studying, development, further development, procurement,
maintenance and phasing out) (SAF 2001). These guidelines, together with FMV’s
environmental policy, must be attached to all acquisitions over 75 000 SEK (FMV, 2003c).
A working-group with participants from SAF and FMV has given the following suggestions
to improve the work on environmental acquisition (SAF, 2001):
• Environmental requirements should be included in the TTEM,
• Relevant environmental requirements for operation of the materiel should be used for
procurement.
• Requirements should be placed on the industry to give instructions for environmentally
preferable dismantling of defence materiel.
A second working group, with participants from SAF, FMV, FOI, the Swedish Environmental
Protection Agency and industry, has further specified these suggestions. This working group
made a suggestion on environmental requirements to be incorporated in The Objectives
Handbook (HMÅL), and thereby included in the TTEM. They suggest that the work in the
24

study phase should be completed and adjusted so that a future objective for the outer
environment is integrated in the work with the threatening picture and that it should be
analysed if the requirements are to be incorporated in the agreement on co-ordination between
SAF and FMV (SAF, 2001)
The work resulted in the following suggestions for environmental requirements. Requirements
shall be formulated so that the materiel systems:
• Have low resource consumption, through low energy consumption, use of renewable
sources of energy and effective material consumption during the whole life cycle of the
system.
• Become recyclable by construction for future phase out, use of as few types of materials
as possible, marking for facilitating separation of materials and also establishment of
material specifications.
• Contain a minimum of hazardous substances by reducing the quantity of chemical
products, by minimizing the use of environmentally hazardous chemicals, by minimizing
the use of solvents and products with solvents, by eliminating the use of CFC, HCFC and
Halon. New chemical products shall be reported to the Defence Chemical Group before
introduction into service. All chemical products used shall be registered in the Defence
Index of Hazardous Substances.
• Contain a minimum of radioactive substances by minimising or avoiding these forms of
substances.
• Have low levels of emissions during operation, by reducing emissions of:
• nitric oxides, hydrocarbons, sulphur oxides, carbon dioxide and particles to
air.
• hydrocarbons, nitrogen, phosphorous compounds and discharge to water
from ships and boats, nitrogen and phosphorous compounds and also
petroleum spill to ground.
• Have low noise levels while running ships, vehicles and aeroplanes and also while firing
guns.
• Minimise other environmental impacts e.g. minimisation of damage to land, seashore
and sea bed.
The requirements are intended to be discussed and balanced during the acquisition process,
like the other requirements such as tactical, technical, and economic requirements. FMV are
suggested to elucidate and develop the environmental requirements for each materiel system,
where appropriate (SAF, 2001). The second working group also suggested that life cycle
assessments (LCA) can be performed for some reference products in different materiel
systems in order to identify considerable environmental aspects and facilitate the work with
environmental requirements for specific materiel systems. The use of LCA in the acquisition
process is further discussed in the next paragraph.
The manuals for use, maintenance and storage of a material system shall, according to the
working group, include environmental information. The manual for maintenance should
include environmental risks that can arise in a possible crash, for example dangerous gases in
the event of fire. A risk assessment on the environmental impacts can be needed to complete
the manual (SAF, 2001).
Environmental impacts in the disposal phase should, according to the working group, be
observed when developing and designing the materiel system. If environmentally hazardous
substances can not be avoided in some components, such components shall be marked and it
25

should be possible to dismantle and take care of them separately. Specifications for the
materiel systems should include materials and hazardous substances that are used in the
materiel (SAF, 2001)
FMV has developed the following requirements on the supplier’s environmental work and on
products to be purchased. The requirements on the supplier’s environmental work are within
these areas (FMV, 2003b):
• Substances that are dangerous to environment and health; the supplier shall
account for the amounts and placing of environmentally hazardous substances within
the product. Attention shall be paid to FMV’s criteria for chemical substances (see
section 2.3.4.). The supplier is responsible for replacing substances that are not
allowed with substances allowed according to law and approved for the materiel
system. The supplier shall draw up a plan on how to replace unwanted substances.
When delivering chemical products, the supplier shall provide a safety data sheet that
fulfils requirements by the Swedish Chemicals Inspectorate. When phasing out the
materiel system, environmentally hazardous substances shall be dismantled and taken
care of separately.
• Batteries; The supplier shall account for all batteries (even in-built) within the
materiel system. This shall include information on the type of battery and placement in
the system. The supplier is required to work actively with choice of batteries. This
work shall be included with the tender. If the supplier is Swedish and imports
batteries, the supplier is required to account for battery fees paid. Rejected batteries
(separate or built-in) must not be stored in or together with other disposals. The
handling of batteries shall be accounted for.
• Electronics; The supplier shall account for electronics within the materiel system and
their choice of electronics. When phasing out the system, a deeper analysis of
electronic products should be made to distinguish environmental and hazardous
substances in order to suggest measures to reuse or recycle substances with profitable
economic values.
• Producer responsibility; The suppliers, producers or importers shall take care of
finished products. Today in Sweden, producer responsibility exists for packaging,
waste paper, tyres, cars and electric and electronic products (only for offices and
households). When procuring from a Swedish supplier, the supplier is required to
account for the producer responsibility. When phasing out the system, requirements
shall be set on materiel that is covered by producer responsibility to be sorted out and
delivered to the producer’s collecting system.
• Protection against radiation; When ionising radiation is included in the system
permission according to the Radiation Protection Act (1988:220) (Svensk
författningssamling, 1998 b) shall be presented. The supplier shall account for all
sources of radiation and their placement in the system. Sources of radioactive radiation
shall be handled as radioactive disposal, and shall be taken care of by a company
approved by the National Institute for Radiation Protection. The requirements shall
state that radiation sources be dismantled and taken care of by an approved company.
• Energy consumption; The supplier shall account for the system’s energy
consumption. They shall also show their systematic work to reduce the system’s
energy consumption.
• Emissions and noise; The supplier shall account for emissions (to air, ground, water
and noise) that the system causes. They shall also show their systematic work to
reduce emissions.
26

• Education for users; The supplier shall provide information on how to reduce the
system’s environmental impact.
In the technical specification of the product, the requirements shall guarantee that Swedish
environmental and working environment laws are followed, that use of the products follows
the permission for the place of use, that the goals for the sector can be achieved and that
international agreements of co-operation can be followed (FMV, 2003c). The technical
specification shall include requirements on FMV (2003c):
• Substances that are dangerous to environment and health; Products shall not
contain substances that are forbidden according to Swedish law or FMV’s criteria for
chemical substances. The requirements shall also state which substances should be
avoided as far as possible according to FMV’s criteria. A safety data sheet shall be
included in the tender. This shall be made according to Chemicals Inspectorate
Directions KIFS 1998:8. In international co-operations, the most restrictive laws
shall be followed according to NATO/PFP and the Nordic Agenda 21.
• Batteries; Batteries containing mercury are not allowed, and batteries that contain
cadmium and lead should be avoided.
• Electronics; The requirements shall state that electrical components follow FMV’s
criteria for chemical substances.
• Choice of construction material; When choosing a material, it shall use few
resources, be recyclable/ reusable and not contain substances that are dangerous to
the environment or health.
• Energy consumption; Components and systems that in general use little resources
and energy in the phases from idea to phasing out shall be prioritised.
• Emissions and noise; Emissions and noise from the product shall be lower than the
Swedish Defence current permission for environmentally hazardous activities. When
replacing an old system with a new one, emissions from the new system shall be
lower than those from the old.
• Protection against radiation; Ionising radiation shall be avoided as far as possible.
If radiation sources consist within the system, is the aim that they should have as low
activity as possible.
• Requirements for future phasing out; Systems, parts of systems and components
shall be easy to identify and dismantle. It should be possible to reuse or recycle the
materials to a high degree. To make recycling easier, the materiel should consist of
few materials that are easy to separate from each other.
It can be noted that environmental requirements are not formulated on all products purchased
by FMV. Currently approximately 50 % of the economic value of purchases includes some
sort of environmental requirement (FMV, 2002c).
2.3.4 The acquisition process
The acquisition process is under development and will be changed during the coming years. A
new strategy for the acquisition process will be available by the end of 2004 (Ohlin, 2003).
The process described below are thereby a reconstruction, made by the authors, of the main
phases in the acquisition process. The process is devised with help from a general acquisition
process for public procurement in OECD countries (OECD, 2000), the main phases in
American defence acquisition (Defense Acquisition University, 2001), the ISO standard
15288 (ISO/IEC et al., 2002), and also information from interviews with personnel from the
concerned actors in the acquisition process (for further information see below). There are a
27

number of documents regulating the acquisition process of defence materiel in Sweden; these
are described in sections 2.3.2 and 2.3.3 and in the Appendix.
When procuring materiel that has not been developed especially for the customer, the
development and production phases are not included in the process, and this is called direct
procurement (SAF, 1997).
We have made a simplified description of the acquisition process in seven phases. The phases
are described below and illustrated in Figure 5. The descriptions have been discussed with
personnel working at SAF, FMV, Fö and in three defence industries. The process is used in
Part 3 to describe how life cycle methodologies can be used in the acquisition process.
1. Studies
2. Development
3. Procurement
4. Production
5. Operation
6. Phasing out
7. Disposal
Figure 5. Phases in the acquisition of defence materiel.
1. Studies
The first phase is called studies. This term is used in Swedish Defence to describe a process to
form the basis for a decision in present time considering consequences in a long-term
perspective (SAF, 1999b). In this phase SAF orders the materiel systems or constructions that
should be purchased by FMV. Procurement requirements (environmental requirements
included) are set in the TTEM and these should, when needed, be further developed by FMV
(SAF, 2001). The requirements on the product are developed in co-operation between FMV
and SAF during the process, until procurement of the product (M Wendel, pers. comm.).
Materiel can already exist on the market or be developed especially for the customer.
FMV generates, describes, analyses and recommends the technical solutions with abilities that
SAF desires. The system is defined with respect to system architecture (modified from
Strömstedt, 2002).
2. Development
This step includes design, development, tests, trials and further development of the materiel.
Requirements on the product are further developed in this step. FMV defines a more detailed
system architecture and specification of the technical solutions. When the product already
exists on the market, this step is not included in the acquisition process. Development and
28

tests are made by the industry, partly on behalf of FMV, partly as improvement strategies for
the industry (L Kinell, pers. comm.).
3. Procurements
Selection: Setting of criteria, invitation and supplier selection, proposal or tender application,
and evaluation.
Contracting: The supplier(s) are chosen and a definition of agreement(s) made.
Ordering: FMV orders the materiel from the supplier and supplies the customer (usually
SAF) at an agreed point in time with the correct number of technical systems possessing the
agreed quality.
4. Production: The supplier produces the materiel systems. FMV ensures that the materiel is
delivered to the customer, SAF.
5. Operation: Operation, maintenance and support of the materiel. The Armed Forces has the
main responsibility for supporting and maintenance.
6. Phasing out: FMV has the main responsibility for guaranteeing that the system is phased
out of the customer’s operations.
7. Disposal: FMV has the main responsibility in the disposal phase.
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Part 3: Life cycle methodology in the acquisition process
One of the major difficulties when performing environmentally preferable purchasing is the
lack of reliable information about the environmental characteristics of the product or service
(OECD, 2000). Different tools developed for environmental consideration in product
development can contribute some knowledge and help to set up feasible requirements on a
product. Examples of such tools are Life Cycle Assessment (LCA), guidelines and checklists.
Another way is to choose eco-labelled products, for example products labelled with the
Nordic Swan label (OECD, 2000) or to demand that the supplier has environmental
management systems. This section discusses useful tools in the acquisition process,
considering a product’s life cycle. The methods are LCA, a simplified LCA method called the
MECO method and Life Cycle Costing (LCC). Support from different tools and trade-off
situations in the procurement process are discussed in a separate paper (Byggeth and
Hochschorner, 2004).
In this part of the report we discuss the possibilities of using life cycle methodology in the
acquisition process.
The term ‘life cycle’ is used with different meanings in LCA, LCC and when describing the
life of a product in the acquisition process. In order to avoid misunderstandings, these
differences are illustrated in Figure 6.
In LCA the term life cycle includes mining of raw material, production, use and disposal of a
product (ISO 1997), see the dashed line in Figure 6.
The terms life cycle and life cycle perspective are used by FMV to describe the life length of
a materiel system. The term ‘life cycle perspective’ is used to describe development of
products from idea to phasing out (FMV, 2002c). According to FMV’s description of LCC,
the life length is the number of years the system is to be used (FMV, 2002b), from
procurement to disposal (see the dotted line in Figure 6).
In Woodward (1997), the following explanation of LCC is given: “LCC of a physical asset
begins when its acquisition is first considered, and ends when it is finally taken out of service
for disposal or redeployment (where a new LCC begins.” For defence materiel in particular,
research and development costs are often also included. This is illustrated with the unbroken
line in Figure 6.
30

Life length
LCA
Research
LCC
Development
Raw materials
Production
Procurement
Use
Disposal
Figure 6. Life cycles in LCA, LCC and materiel systems. The steps are examples and simplifications of what
can be included (based on discussions with M. Overcash).
The acquisition process described in section 2.3.4 is used in the sections below to illustrate the
phases in which LCC is used today and where LCA can be used.
3.1 Life Cycle Costing in the acquisition process
LCC is used today in FMV, as described in section 1.2.3. The method is used in the study step
as a basis for TTEM (described in section 2.3.2), in the development step as a basis for
decisions of modifications or reconstructions and in the procurement step as a basis for
choosing supplier and for evaluation of offers. The method could also be useful in later steps
of the acquisition process, e.g. to facilitate a choice between different disposal strategies.
However, this is not further analysed in this report. A methodology recommendation is made
in section 3.4.1.
3.2 Life Cycle Assessment in the acquisition process
3.2.1 Our suggestion
LCAs on products identify the most environmentally harmful aspects during the life cycle.
The method can be used in different ways in the acquisition process. A first distinction can be
made between performing an LCA and using the results from one. A preliminary suggestion
for use of LCA in the acquisition process was made in Hochschorner and Finnveden (2003b).
The suggestions have been evaluated and further developed. Below is a short summary
followed by a more detailed description of our suggestions.
The study can be ordered, made and used by different actors in the acquisition process.
Reasons to make an LCA can be to learn about environmental aspects of the product
31

(interesting for Fö, FMV, SAF and the industry), to fulfil requirements from customers
(interesting for FMV and the industry), to set environmental requirements (interesting for FM,
FMV and the industry) and to choose between alternatives (interesting for Fö, SAF, FMV and
the industry). The studies can be made by FMV, the industry, FOI or other research institutes
The choice of method depends on economics, time, type of product and need of information.
A major difference between traditional LCAs and simplified LCAs such as MECO is that the
former is more suitable when choosing between alternatives. Simplified LCAs can primarily
be used for identifying critical aspects (Hochschorner and Finnveden, 2003a). This latter
function is of relevance in the acquisition process, and it is therefore suggested that MECO
can be useful for identifying critical aspects and setting requirements. When procuring
material that will be developed especially for the customer, we recommend making a
quantitative LCA to require knowledge of the product’s total environmental impact. If the
product resembles a product for which an LCA has been performed, the existing LCA can be
adjusted for the new product or the LCA data can be used in an MECO analysis. For example,
when the product already exists on the market it can be sufficient to perform an MECO
analysis, preferably using data from an existing quantitative LCA or MECO. When the
MECO method is used mainly as a complement to a quantitative LCA, as described in section
3.4.2, the analysis should be made in the same steps as the quantitative LCA. Below, our
suggestions on how to use LCAs in Swedish Defence are presented.
3.2.2.1 Life Cycle Assessments of reference products
A concrete proposal is to perform LCAs of reference products. These should be, in some
sense, typical examples of products in different product groups, for example vehicles,
ammunition and clothes. Definitions of product groups should be made in co-operation
between FMV and SAF.
The results from LCAs on reference products will form a database that can be used when
making new analyses. The analyses should preferably be made with quantitative LCAs, in
order to get an extensive database. The analysis can also be complemented with an MECO
assessment, as described in section 3.4.2. In Sweden it should be the responsibility of either
SAF or FMV that such LCAs are made. It is an advantage if the two organisations can cooperate
in this matter. The data can then be used when performing a new LCA or an MECO
assessment, or when setting up environmental requirements. Analyses that are made with the
help of LCAs on reference products can be made as quantitative or as MECO assessments.
Using data from existing LCAs would shorten the time needed to perform the analysis.
3.2.1.2 Life Cycle Assessment integrated in the acquisition process
The information generated from the analyses can be used when setting up environmental
requirements and to facilitate choices between alternatives. The use of LCAs is somewhat
different for the purchaser and the producer. This description focuses on the use for FMV.
In the acquisition process of defence materiel, the environmental requirements should be a
further development of the general requirements stated in the operational handbook (SAF,
2001), see section 2.3.4. They must include noise, emissions to air, water and ground and also
requirements on land use (SAF, 2001). Except for noise and land use, these environmental
impacts are normally included in a traditional LCA. All of the impacts can in principle be
included in MECO. This is one of the reasons why MECO is recommended as a complement
to a traditional LCA in Hochschorner and Finnveden (2003a).
32

A quantitative LCA and an MECO method can also be helpful to further develop some of the
environmental requirements stated by FMV (FMV, 2003b; FMV, 2003c) and presented in
section 2.3.3. Information from a quantitative LCA and an MECO method can help to develop
requirements on substances that are dangerous to the environment and health, energy
consumption, emissions and noise.
The suggested use of a quantitative LCA and MECO in the acquisition process is illustrated in
the following figure:
1. Studies
Perform
2. Development
Use
Quantitative
LCA
3. Procurement
4. Production
MECO
5. Operation
6. Phasing out
7. Disposal
Figure 7. Life cycle methodology in the acquisition process.
The performance and use of a quantitative LCA or MECO is discussed under each step below:
In the study step:
When performing a quantitative LCA or an MECO assessment in the acquisition process, this
should preferably be done in the study phase. However, often the product will not be specified
in enough detail to allow a detailed LCA early in the process. It may therefore be necessary to
complete or perform the study later in the process, e.g. in the procurement step.
In the development step:
If lack of data precludes an LCA in the study step, it can be completed in the development
step. Data from quantitative LCAs can be used to facilitate a choice between different
alternatives, for example materials and processes. The MECO assessment will identify
environmental critical aspects in the product’s life; this information is useful when developing
products in an environmentally preferable way.
In the procurement step:
An LCA can also be complemented or performed in the procurement step, if relevant data is
missing in the earlier steps. When using LCAs in the procurement step, a distinction can be
made between two phases:
a) Setting up requirements
b) Choosing between suppliers
33

LCAs can be used for setting up requirements. However, it is unlikely that LCAs can be used
today for choosing between different suppliers. This is because it is unlikely that the suppliers
can provide the relevant information.
In the production step:
To have an environmentally preferable production, results from an MECO or a quantitative
LCA can be used, for example to facilitate a choice between materials, chemicals and
processes.
In the operation step:
The results from a quantitative LCA or an MECO can also be used in the operation and
maintenance step, to make it more environmentally friendly.
In the disposal step:
A quantitative LCA or an MECO can also be performed in the disposal phase, in order to
gather information on the environmental impact the materiel system has had until this step.
This knowledge is useful, for example when developing new products. It can, however, be
difficult to gather data in this step, since it can be approximately 30 years since production
(Hull, 2003). Data from LCAs can be used to facilitate a choice between different alternatives,
for example materials and processes.
Our major suggestion is that the defence sector should work systematically through different
product groups. For each product group quantitative, traditional LCAs (as described in section
1.2.1 and 3.4.3) or simplified LCAs (in this case MECOs, as described in section 3.4.2)
should be performed for reference products within each product group. The results should be
an identification of critical aspects in the life cycles of the products. This knowledge should
then be used when writing TTEMs and setting criteria for procurement. The reports should be
publicly available to allow reviews and discussions of results. To make the work costeffective,
international co-operation should be sought. It should be the responsibility of either
SAF or FMV that such LCAs are performed. SAF should make sure that environmental
requirements, based on an environmental life cycle perspective, are included in the TTEM. In
addition LCAs can also be performed as an integrated part of the acquisition process in
specific cases.
Another part of this project was to perform an LCA of a military product. This was done for a
pre-fragmented high explosives shell grenade, called 40/48 KULSGR 90 (the international
name is 40 mm L/70 PFHE Mark two). The results are presented in Hägvall et al. (2004). The
LCA of the grenade can serve as a demonstration case for future LCAs on defence materiel.
3.2.2 The actors’ point of view
Interviews were carried out with personnel from the Ministry of Defence, SAF, FMV, Alvis
Hägglunds AB, Bofors Defense AB and SAAB, in order to better understand their roles in the
acquisition process and to evaluate our preliminary suggestion, described in Hochschorner
and Finnveden (2003b). The interview questions are included in the Appendix. The general
reaction to LCA as a tool in the acquisition process was positive. In brief, it can be mentioned
that use and experience of LCAs is currently limited within both defence industries and
authorities. However, the industry has positive attitude to performing LCAs or to contributing
to LCA studies, if required by FMV. FMV is also positive, but indicates that SAF has to
require the study. SAF is positive if there is a need for an LCA study. If the Ministry of
Defence were to require that SAF should require LCA information, then SAF would demand
34

this from FMV. All interviewees think that environmental aspects should be included early in
the acquisition process. Below, the actors’ opinions are described in more detail.
The industry
Personnel from the industries Alvis Hägglunds AB (E Ericson and T Svedlund), Bofors
Defence AB (L Kinell) and Saab AB (K Algotsson) were interviewed. These industries take
some environmental consideration when developing new products today, mostly by following
legal requirements. If their customers require more environmental consideration, this has to be
indicated in the specification of requirements. The industry has some knowledge of LCA, but
had not heard about the MECO method before. The industries interviewed were interested in
knowing more about the method, and all of them stressed the need for a simplified method. K
Algotsson (pers. comm.) believes that a comprehensive LCA is too complex and timedemanding
to perform in current industry. E Ericson and T Svedlund (pers. comm.) suggest
that it would be advantageous if all industries could use the same method. No LCA methods
are used regularly within the three industries today, but Saab AB has used simplified LCAs in
special projects to compare present solutions with alternatives (K Algotsson, pers. comm.). At
Bofors Defence AB, a Master’s thesis has been made on a product (Edesgård and Eriksson,
1999). Bofors Defence AB has bought the EPS system (an LCA method, for more
information see Steen (1999) and taken courses in LCA in order to be prepared for
requirements on LCA from their customers (L Kinell, pers. comm.). All three industries are
positive to co-operating with FMV and SAF if LCAs have to be made on reference products,
with the restriction that some data may not be accessible. They are all positive to performing
LCAs, if these are requested and paid for by the customer (E Ericson and T Svedlund; L
Kinell; K Algotsson, pers. comm.).
FMV
M Wendel (pers. comm.) is positive to our suggestion that LCAs be performed on reference
products. He believes that the responsibility for such analysis belongs partly to FMV and
partly to SAF. It would be FMV’s responsibility if so stated by legislation, which it is not
today. If it is a requirement from SAF, they have to be prepared to meet the costs for the
analysis. If LCAs are performed during the acquisition process, Wendel thinks that this should
preferably be done during the study or development step, possibly in working groups with
members from FMV, SAF and FOI.
SAF
O Hull (pers. comm.), working at the order unit (KRI) at SAF, thinks that it is possible to
perform LCAs on reference products with some delimitation, since some data are more
difficult to trace. Products developed a long time ago are controlled by different legislation.
Hull believes that it can be difficult to perform LCAs in the disposal step, since it can be
approximately 30 years since production of the materiel system. However, he believes that it
is up to FMV to decide what methods they want to use. Hull also suggests that it can be in the
interests of FMV to use LCAs to verify the environmental consideration in the acquisition
process. If the Ministry of Defence were to require that SAF should require LCA information,
then SAF would demand this from FMV. If LCAs are to be made on few products, Hull
thinks that SAF should be in some controlling group. If LCAs should be made on almost all
purchased products, the responsibility should probably be FMV’s.
The Ministry of Defence
H Ohlin (pers. comm.) indicates that his answers represent his point of view, not the
Ministry’s, since the Ministry is political. He is positive to the suggestion to perform LCAs on
35

eference products, with the restriction that it may be expensive. He thinks that the
responsibility of such LCAs should be shared between SAF and FMV, but he does not know
what will be required from SAF and FMV and if they think that it is practicable. If LCAs are
to be made during the acquisition process, is it easiest if they are made early in the process.
The difficulty is the costs of such studies and Ohlin does not know whose responsibility this
should be.
Institutional aspects
The Swedish Armed Forces places orders at the Swedish Defence Material Administration
and thus has a key role in formulating requirements on the defence materials. However, the
order unit and the environmental unit at the Headquarters of the SAF are situated in different
parts of the organisation and they do not really work together at all in the acquisition process.
Furthermore, at the Ministry of Defence there are no or limited connections between
environmental issues and acquisition issues.
3.2.2.1 Organisational aspects
From the interviews it became clear that the industry was willing to perform LCAs if FMV
asked them to do so. FMV was interested if SAF required it. SAF thought it was up to FMV
to choose methods but would respond if the Ministry of Defence required LCA information.
There is thus a need for an initiative from one or several actors to get the ball rolling.
It is also interesting to note that both at the SAF and the Ministry of Defence, acquisition
issues are dealt with, with very little interactions from groups working with environmental
issues. In order to integrate environmental aspects in general, and life cycle thinking in
particular, an integration of environmental and acquisition parts of the organisations would
probably be instrumental.
3.3 Strategic Environmental Assessment in the acquisition process
Strategic Environmental Assessment (SEA) is a procedural tool for assessing the
environmental impacts of policies, plans and programmes. An SEA is carried out in order to
facilitate early and systematic consideration of environmental impacts in strategic decisionmaking
(Thérivel and Partidário, 1996; Partidário, 1999). According to Therivel et al. (1992)
SEA can be defined as:
‘…the formalised, systematic and comprehensive process of evaluating environmental
impacts of a policy, plan or programme and its alternatives, including the preparation of a
written report on the findings of that evaluation, and using the findings in publicly
accountable decision making’
The use of SEA in the defence sector has been studied in another project (Johansson et al.,
2003). As regards the defence acquisition process, there are a number of plans that could be
the subject of an SEA, notably the Perspective Plan and the Plan for Supply of Materiel.
Within the SEA process, different types of analytical tool, such as LCA, can be used. When
SEAs are implemented in defence acquisition, the work with SEAs and LCAs should be coordinated.
36

3.4 Methodology recommendations
3.4.1 Methodology recommendations when performing LCC
Within this report we have not yet gone into detail concerning LCC methodology and how to
include environmental aspects into LCC. As noted in section 1.2.3, different types of
environmental costs can be included in an LCC. For one group of costs, the external costs,
there are a large number of different methods available for estimating them (e.g Turner et al.,
1994; Bocksael et al., 2000). These methods also correspond to different types of external
costs. A discussion is therefore necessary concerning which types of LCC are of interest and,
if external costs are of interest, what type of external values are of interest and how these
should be measured. In a follow-up project, these issues will be investigated further.
3.4.2 Methodology recommendations when performing MECO
Below is a suggestion on how to modify the MECO for acquisition in the Swedish defence.
The original methodology is described in section 1.2.2.1.
The category ‘Material’ includes all the materials needed to produce, use and maintain the
product. The use of materials is partly presented as quantity (1a) and partly as a characterised
result (1b).
Materials that are being reused in the phase of disposal are entered in the Disposal box,
marked with a minus sign. We suggest that a different allocation method be used, the socalled
50/50 method (Lindfors et al., 1995), in which the environmental impacts caused by
recycling are allocated according to:
50% of the environmental impacts caused by primary material production and waste
management are allocated in proportion to the amount of primary material in the product. The
remaining 50% are allocated in proportion to the amount of material lost from the
technosphere to the environment.
In the case of environmental impacts caused by recycling processes, 50% are allocated in
proportion to the amount of material delivered to the recycling processes. The remaining 50%
are allocated in proportion to the amount of the recycled material in the product.
The category ‘Energy’ includes all energy used during the product’s life cycle, including the
use of energy during the supply of materials. The use of energy should be indicated as
primary energy and as a characterised result. In Pommer et al. (2001) there is a
recommendation to calculate all energy resources as oil consumption. Instead of that, we
recommend presenting renewable energy as renewable, when such is used.
The characterisation in the MECO method implies a calculation of use of resources, in
millipersonreserve (mPR), where use of energy is calculated as use of oil resources. One
personreserve is resource consumption in proportion to the global reserves of a resource,
available for one person and all future posterity. We suggest that the Thermodynamic
Approach (Finnveden and Östlund, 1997) be used as a characterisation method instead of
mPR.
Instead of looking at the global reserves, the Thermodynamic Approach describes use of
energy and material resources as either consumption of exergy or production of entropy
37

(Finnveden and Östlund, 1997). Exergy can be described as a measure of available energy.
The inputs should be natural resources as found in nature. We recommend that different
exergy values should be used for non-renewable and renewable energy, instead of calculating
all energy as use of oil resources.
There are currently a number of methods available for characterization of abiotic resources
(Lindeijer et al., 2002) However, there is no consensus concerning the best available practice
regarding this category (ibid). A choice has thus to be made. There are three lines of argument
that can be used in favour of the Thermodynamic Approach:
The first starts by asking what is consumed or depleted when discussing resource
consumption or depletion. It cannot be energy, since energy can neither be produced nor
consumed according to the First Law of Thermodynamics. It cannot be matter, since matter
cannot be consumed or produced if we exclude nuclear reactions. A possible answer can be
that it is useable energy and matter that is consumed and depleted. Exergy is a measure of
available energy (e.g. Szargut et al., 1988) and exergy is consumed in all real world processes
as entropy is produced according to the Second Law of Thermodynamics. For a material to be
usable it must normally be concentrated, structured and ordered, compared to the
surroundings. A well-known scientific quantity that is often interpreted as a measure of the
disorder of a system is entropy. The entropy production may therefore be a useful indicator of
resource consumption. Exergy and entropy are related, so instead of entropy production,
exergy consumption may be used.
According to the second line of argument, energy is the ultimate limiting resource. It can be
claimed that each material resource has an associated energy cost, so that every potentially
limited resource is limited in part because its energy costs are too high. Given sufficient
amounts, a society can divert exergy to the acquisition of whatever material is in short supply.
A third argument can be based on the reasoning that resources should be given the value of
the costs associated to bring the resource back to its original state. The exergy loss is the
minimum amount of energy required to bring a material back to the starting state. Exergy can
thus be an indicator of the environmental costs of bringing the resource back to its original
state.
Data for the Thermodynamic Approach are available in Finnveden and Östlund (1997) and
also in Guinée et al., (2002). If it is not possible to use the Thermodynamic Approach, we
recommend a Dutch method by Guinée and Heijungs (1995) that focuses on ultimate reserves
and extraction rates. This approach is used in the Dutch handbook for LCA (Guinée et al.,
2002).
The category ‘Chemicals’ includes all chemicals in the product’s life cycle. The chemicals are
classified as type 1, 2, or 3 according to their environmental hazard level. The original
classification in the MECO method is described in section 1.2.2.1. We suggest other lists and
a somewhat different classification. To find Risk-phrases we recommend using the Swedish
Klassificeringslistan (Kemikalieinspektionen, 2003) or the N-Class Database (Nordic Council
of Ministers).
The Swedish Defence Materiel Administration (FMV) has drawn up a list for chemicals,
called ‘Restriktionslistan’. The purpose of the list is to have environmental requirements for
procurement. Materiel delivered to FMV must as far as possible be free from substances that
38

are carcinogenic, allergenic, environmentally hazardous or harmful for reproduction and
substances that influence the gene pool, the climate or the ozone layer. This is part of the
environmental objectives by the Swedish defence sector. The list has been developed in
several steps and this description refers to the version produced in 2003 (FMV, 2003a). The
list consists of two parts, where the first part consists of substances that are forbidden by law
or should be significantly limited for other reasons. These substances must not be included in
products that FMV procures. Part 2 contains substances that according to the law should be
used to a limited extent and substances that because of their properties are unwanted in
products that FMV procures. These substances should be avoided as far as possible. The
OBS-list, by the Swedish Chemicals Inspectorate, should be used as a complement to part 2
(FMV, 2003a). The substances in the list are divided into the groups of products in which they
are found. One example is lead, which is in both part 1 (as lead in electrical components,
finishing, metals and fuels) and part 2 (as lead in batteries and glue) of the list. As criteria for
dividing substances into the two parts, Risk-phrases (EU classification on chemicals,
European Commission, 1967) are used. We used the criteria for the chemicals included in
FMV’s lists to specify types 1-3 in the MECO assessment.
Type 1: Very problematic substances. These substances should, according to FMV (2003a),
not be used in some applications. Further valuation of these substances is needed, to find
possible substitutes. Type 1 substances are substances that fulfil the criteria for part 1 in
FMV’s list.
Type 2: Problematic substances. Use of these substances should be avoided in some
applications, according to FMV (2003a). Further evaluation of these substances is needed, to
find possible substitutes. Type 2 substances are substances included in Part 2 in FMV’s list,
combined with the Swedish OBS-list. Substances that are difficult to assign to an appropriate
type within a reasonable time should be classified as type 2.
Type 3: Less problematic substances. Use of type 3 substances is not regulated in FMV’s lists.
Type 3 substances are substances that do not fulfil the criteria for type 1 or 2.
Information to be included in the category ‘Other’ depends on the use of the method. When
the method is used in the acquisition process of defence materiel, we suggest that the
following aspects be considered:
• Components that are included in the product with unknown content, for example
electronics
• The effect of use of the product in a war situation
• Noise
• A checklist on other environmental effects that cannot be quantified. This checklist
can be based on environmental goals (Sweden’s or the Defence sector’s) and FMV’s
environmental requirements on the supplier.
An MECO assessment can also be used with the purpose of complementing a quantitative
LCA, see Hägvall et al. (2004). When this is the case, we suggest that the analysis focuses on
the categories Chemicals and Others. The chemicals included should be the same entire life
cycle data used in the quantitative LCA. In this case it is not necessary to divide the chemicals
into the life cycle stages in the MECO matrix. The chemicals should be classified according
to the three types described above. The result will be a complement to a quantitative LCA by
giving more information on the substances environmentally hazardous risks (by using the
Risk-phrases) and by the possibility of including more qualitative information.
39

3.4.3 Methodology recommendations when performing LCA
The methodology for LCA should as far as possible follow standard methodology as
described in the ISO standards. However, there are aspects that may need updating and further
specifications. The recent Handbook on LCA (Guinée et al., 2002) is useful and was one basis
for our case study on ammunition (Hägvall et al., 2004). For the characterization step of the
Impact Assessment we recommend the baseline impact categories and characterization
methods suggested by Guinée et al. (2002) with some exceptions. We suggest that the
Thermodynamic Approach be used for characterization of abiotic resources as discussed
above for the MECO method.
Experience has shown that weighting methods are useful for identifying key aspects of the
studied systems. If weighting methods are used, it is recommended that several methods be
used since they tend to identify different aspects. In our case study on ammunition (Hägvall,
et al, 2003) we used Ecotax02, Ecoindicator 99 and EPS 2000. Experience shows that these
three methods identify different aspects as the most important ones, and therefore can be seen
as complementing each other. Weighting methods have recently been reviewed by Finnveden
et al. (2002a).
Life Cycle Impact Assessment is still a developing area. It is therefore important to keep up
with developments.
Experiences from LCAs of defence materials are limited. However, it seems as though
standard LCA methodology is also appropriate for LCAs on defence materials, although
there are some aspects which may include differences between military and non-military
products. One concerns the type of materials and chemicals used. For defence equipment,
specialised materials and chemicals may be used for which it is difficult to find data for either
the inventory analysis or the impact assessment steps. Another difference concerns the
exposure situation, which may be different from that of a normal consumer product. The use
of defence materiel in war situations also presents extraordinary difficulties for an LCA.
Defence materiel can also be stored and used over very long periods compared, for example,
to many normal consumer products.
40

Recommendations and conclusions
The actors in the Swedish acquisition process take some environmental consideration today.
Our suggestions imply that this consideration be taken a step further, by considering
environmental aspects in a life cycle perspective. If the environmental work lacks a life cycle
perspective, there is a risk that the most significant aspects are not being considered. We
recommend that environmental consideration be taken early in the acquisition process and
that environmental questions be integrated in other activities of the organisations. Such work
would be facilitated if the procurement and environmental units of FMV, SAF and Fö could
co-operate more closely. It is important to have a life cycle perspective when writing
regulatory documents in order to include the most significant aspects. In order to consider the
whole life cycle cost, we recommend including environmental costs when making a LCC
analysis. Methods for this will be studied further in the future. Results from such an extended
LCC analysis, LCA and/or MECO analysis should be used when setting environmental
requirements on materiel to procure. Such results should also be used when designing,
developing and deciding on disposal strategies for defence materiel.
Swedish acquisition of defence materiel is becoming more and more internationalised. Since
the process described in this report is rather brief, it is probably comparable to acquisition in
other countries. It is an advantage to use internationally accepted methods, like LCA, in order
to communicate the results with organisations from other countries. We suggest that the
defence sector should work systematically through different product groups. For each product
group quantitative, traditional LCAs or simplified LCAs (in this case MECOs) should be
performed for reference products within each product group.
Future work
We will continue our study on environmentally extended LCC. Our work with case studies on
ammunition will also be continued, with the goal of building a database that can be used when
making new LCAs.
41

Appendix
A. Examples of Swedish environmental legislation
The Act on Public Procurement (Lag (1992:1528) om offentlig upphandling): The act is
based on EG-directives and GPA (Agreement on Public Procurement within WTO, to which
Sweden is affiliated). (Svensk författningssamling, 1992a)
The act is available in Swedish and English at the Internet page:
http://www.nou.se/loueng.html
Commission interpretative communication on the Community law applicable to public
procurement and the possibilities for integrating environmental considerations into
public procurement
Commission of the European Communities (2001). Commission interpretative
communication on the Community law applicable to public procurement and the possibilities
for integrating environmental considerations into public procurement (Brussels).
Available at: http://europa.eu.int/eur-lex/en/com/cnc/2001/com2001_0274en01.pdf
The Swedish Environmental Code (Miljöbalk 1998:808):
The Swedish Environmental Code was adopted in 1998 and entered into force on 1 January
1999, bringing together 15 existing central environmental laws. The aim of the Environmental
Code is to promote sustainable development based on the understanding that nature is worthy
of protection in its own right, and that man's right to exploit nature carries with it a
responsibility. The Environmental Code is further elaborated upon and specified in the form
of ordinances, regulations issued by public authorities and decisions taken in individual cases.
(Swedish Environmental Protection Agency, 2002)
The code is available in English at: http://miljo.regeringen.se/pressinfo/pdf/ds2000_61.pdf
The Act on Product Responsibility (Produktansvarslag (1992:18)):
The Act includes compensation for injuries and damage incurred from lack of safety in an
article, including defects depending on construction, production or unclear directions. (Svensk
författningssamling, 1992b)
This law is available (in Swedish) at: http://www.notisum.se/rnp/SLS/LAG/19920018.HTM
Ordinance on Chemical Products and Biotechnical Organisms (Förordning (1998:941)
om kemiska produkter och biotekniska organismer):
This ordinance is available (in Swedish) at:
http://www.notisum.se/rnp/SLS/LAG/19980941.HTM
42

B. Abbreviations
CFC Chlorofluorocarbons
COM Commission of the European Communities
EPD Environmental Product Declarations
EPS Environmental Priority Strategies
EU European Union
FMV Swedish Defence Materiel Administration
FOI Swedish Defence Research Agency
Fortv National Fortification Administrations
Fö Swedish Ministry of Defence
GATT General Agreement on Tariffs and Trade
GPA Agreement on Public Procurement
GRO Grundorganisationsledningen
HCFC Hydrochlorofluorocarbons
ISO International Organization for Standardisation
KRI Krigsförbandsledningen
KULSGR Kulsprängsgranat
LCA Life Cycle Assessment
LCC Life Cycle Costing
LCCA Life Cycle Cost Acquisition
LCECA Life Cycle Environmental Cost Analysis
LCIA Life Cycle Impact Assessment
LOC Life Operation Cost
LSC Life Support Cost
LTC Life Termination Cost
MAL Plan for supply of land, installations and premises
MECO Material, Energy, Chemicals and Other, the name of a simplified LCA method
MFP Plan for supply of materiel
mPR Millipersonreserve, used as a basis for evaluation in the MECO principle
MSEK Million Swedish Crowns
NATO North Atlantic Treaty Organisation
OECD Organisation for Economic Co-operation and Development
PFHE Pre-fragmented High Explosives
PfP Partnership for Peace
PTTEM Preliminary Tactical Technical Economic Goal
SAF Swedish Armed Forces
SEA Strategic Environmental Assessment
SOU Statens Offentliga Utredningar
STTEM Final Tactical Technical Economic Goal
TCA Total Cost Assessment
TOEM Tactical Organisational Economic Goal
TTEM Tactical Technical Economic Goal
UTTEM Draft Tactical Technical Economic Goal
WEAG Western European Armaments Group
43

C. Interview questions
All interviewees were sent a copy of the first report (Hochschorner and Finnveden, 2003a), a
summary of the report in Swedish, and the questions before the interview. The questions used
were the same for all industries, and almost the same for the authorities. The differences were
in questions regarding the specific workplace. Below the questions are translated into English.
1. In our report (referring to Hochschorner and Finnveden, 2003b) we have described the
acquisition process in eight overarching steps. Is this process in accordance with your image
of the process? (Question to the industries, FMV, SAF and Fö)
2. Where in the acquisition process do you think it is best to include environmental aspects?
(Question to the industries, FMV, SAF and Fö)
3. Do you consider your product’s potential environmental aspects when designing new
products today? (Question to the industries)
4. Is this for all products or only a selection of them (e.g. when requirements from the
customer or products over a certain economic value)? (Question to the industries)
5. Do you use any particular method for this? Which? (Question to the industries)
6. Are you familiar with life cycle assessments (LCAs)? Have you made an LCA-study on
any of your products? (Question to the industries)
7. Are you familiar with the MECO-method? What is your opinion of this method? (Question
to the industries)
8. In our report we have made two suggestions on how LCAs can be used in the acquisition
process. Our first suggestion is that SAF/FMV be responsible for making LCAs on reference
products. Is it possible for you to hand out data for making such analyses? Is secrecy involved
in such data? (Question to the industries)
9. If desired by the customer, could you perform LCAs? (Question to the industries)
10a. Do you think that it is possible to make LCAs on reference products from different
product groups? (Question to FMV, SAF and Fö)
10b. If so, whose (SAF/ FMV) responsibility should it be to make sure that such analyses are
performed? (Question to FMV, SAF and Fö)
10c. Who do you think should perform these analyses? (Question to FMV)
11. Our second suggestion implies that LCAs be performed during the acquisition process.
11a. What is your opinion of this? (Question to the industries)
11b. We suggest that the LCA be made in the study, procurement, or disposal
phase. Can you see any difficulties with this suggestion? (Question to the
industries)
44

11c. Do you think that it is possible to perform LCA/MECO in the suggested phases? If not,
why? (Question to FMV, SAF and Fö)
11d. Whose responsibility should it be to perform LCAs/MECOs in this phases? (Question to
FMV, SAF and Fö)
12. Do you see any potential difficulties with our suggestions? (Question to SAF and Fö)
13. How can possible difficulties be avoided/ prevented? (Question to SAF and Fö)
14. Does your customer have environmental requirements today? Does this influence your
production? (Question to the industries)
15. Do the environmental requirements of your products (from you or your customers) have a
life cycle perspective? (Do they include production of raw materials, production of the
product, use and disposal?) (Question to the industries)
Questions to SAF regarding organisational aspects:
1. What is your field of responsibility at KRI?
2. How do KRI and GRO work together in the acquisition process?
3. How do KRI and FMV work together in the acquisition process?
4.. How do KRI and Fö work together in the acquisition process?
5. What would make KRI require LCAs from FMV?
6. Does Fö play a part in this?
Questions to Fö regarding organisational aspects:
1. What is your field of responsibility at Fö?
2. How do Fö and SAF work together in the acquisition process?
3. How do Fö and FMV work together in the acquisition process?
4. Are materiel and environmental questions connected in the Ministry of Defence today?
5. Do you (from your position at Fö) think that environmental questions in the acquisition
process are handled satisfactory today?
6. Does the Ministry follow up this work?
45

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