Minimising the whole life cost of new equipment involves trading off capital and operating expenses. However, the present structure, with two separate budgets for procurement and support (the EPP and ESP, respectively), each of which is planned to its own control total and different budget holders (FLC vs. DEC / Head of Capability area), means that it is difficult to undertake such trading.
Furthermore, the Department has no mechanism to monitor whole life cost / cost of ownership once a project has been approved at Main Gate. Although estimating total equipment costs over a 25+ year life cycle will inevitably be imprecise, failing to monitor whole life costings during development will potentially lead to poor value for money.
During the development and manufacture phases, significant cost pressures frequently need to be overcome in order to remain within approved project expenditure levels. This can set up pressures for IPTs to trade off project capital costs for higher subsequent support costs to remain within the equipment procurement limits.
The same incentives can also work within industry. Where contractors do not have fixed / firm price CfA arrangements in place during the design phase for equipment the contractor is actually incentivised to produce a less supportable design so as to generate more support work at a later date.
Also, neither IPTs nor industry have any great incentives to "engineer-in" higher cost up front solutions to provide greater reliability or availability later in life (given the relative lack of emphasis on whole life cost compared with initial procurement cost in the approvals and contracting process).