LCE (latest cost estimate)

LCE stands for latest cost estimate. NATO uses it in the financial reporting for the NATO Security Investment Programme (NSIP). There it means the amount already expended on a project plus the future expenses that the Host Nation forecasts in its quarterly financial report. NATO's official acronym glossary expands LCE the same way, as "latest cost estimate".

In practice, the LCE is the figure that says what an NSIP project is expected to cost in total, from the first dollar spent to completion. NATO states that the LCE is the total estimated cost required to bring an NSIP project to completion. It is a running estimate, not a fixed budget, because it combines money already spent with the Host Nation's current forecast of what remains.

How NATO defines the latest cost estimate in the NSIP

NATO's NSIP financial-activities reports define the LCE as the sum of two parts. The first is the amount already expended. The second is the future expenses forecast by the Host Nation in its quarterly financial report. Adding the two gives a single figure for the full expected cost of the project.

The 2019 NSIP financial-activities report repeats the same definition and places it within the programme's financial-implementation reporting. Because the forecast portion comes from the Host Nation's quarterly reporting, the LCE changes as new reports arrive and as spending is recorded.

LCE remaining to be spent (LCE RTBS)

A closely related measure is the LCE remaining to be spent, abbreviated LCE RTBS. NATO defines it as the unspent portion of the LCE, calculated as the LCE minus expenditure. If the LCE is the full expected cost, the LCE RTBS is how much of that cost has yet to be paid out.

• LCE: expenditure to date plus the Host Nation's forecast future expenses.
• LCE RTBS: the LCE less expenditure to date.
• Host Nation (HN): the source of the forecast through its quarterly financial report.

NATO's 2021 NSIP financial-activities report uses the full label "Latest Cost Estimate Remaining to be Spent (LCE RTBS)".

Where LCE appears in NATO reporting

LCE is a recurring financial measure in NATO's annual NSIP financial-activities reports. The 2018 and 2019 editions carry the definition, the 2021 edition uses the LCE RTBS label, and the 2023 edition continues to report both LCE and LCE RTBS as NSIP financial measures. The term has stayed stable across these reports, so a reader can compare figures from one year to the next on the same basis.

For anyone who needs to confirm how NATO uses a related term, NATO maintains NATOTerm, its terminology database for classified and non-classified military and non-military terminology relevant to NATO.

What LCE means for a supplier bidding on Canadian public contracts

LCE is a NATO financial-reporting term. A supplier is most likely to meet it in NSIP-related material, where it describes the total expected cost of a project and how much of that cost remains to be spent. In that setting, a larger LCE RTBS points to more spending still ahead on the project, and a smaller one points to a project nearer completion.

Canadian federal and provincial tender documents set their own terms for cost estimates and pricing. Where a Canadian solicitation or Department of National Defence document uses the letters LCE, read the definition the document itself supplies and price against the requirements stated in that solicitation. Do not assume it carries the NSIP meaning unless the document ties it to NATO reporting.