Rafale selection in MMRCA was itself done on basis of LCC , indeed the entire MMRCA criteria included LCC
I know that, and I had also mentioned earlier that MOST if not ALL western development or procurement projects of late have utilized the LCC (Life Cycle Cost) model of cost-analysis because such a model looks at all costs like development (if required), procurement, Operations and sustainment and some even the disposal cost after retirement. HOWEVER, one does not pay the LCC to any one single entity. For example things that make up the O&S portion of the LCC are spares, product support, follow on development/ugrades, fuel, system-related manpower costs and system specific infrastructure costs over its life-time. None of these are paid to the OEM. The cost of fuel, manpower etc are internal to the operator and not sources from a Lockheed, Boeing, SAAB or Dassault. Similarly, not all FOD, or upgrades would be performed by one vendor etc.
Therefore a logistical contract, like a PBL or something similar covers a portion of the O&S cost which makes up a portion of the product Life Cycle Cost. The reason all these things are taken a part of the cost-analysis is because system characteristics impact these metrics. A smaller fighter will consume less fuel, usually consume less manpower etc and therefore would have a lower Life Cycle Cost. Similarly, a more technologically advanced aircraft may have more expensive systems, but those systems may be more reliable, have less obsolesce issues down the road and therefore there may be O&S savings associated where you pay higher procurement cost for these systems, but end up paying lower LCC on account of the things mentioned above. This is why the concept of Life-Cycle-Cost is important and why it has formed the backbone of military cost analysis over the last 10-15 years and why operators and acquisition folks continue to rely on it for requirements and for selecting one vendor. the MMRCA (from what i gather) did employ the LCC model but did not fully absorb it into its analytical process as it still remained a federated system where there were technical parameters that had to be met before the lowest LCC product was selected.
So, life cycle cost calculations are an analytical way of reaching to a full cost of acquiring, and operating a system. It is not something that you would ever see in a bill, or in a contract that you sign with an OEM. The NDTV article by Vishnu is quite clear that the IAF is demanding a spare and support guarantee for a period of 5 or 10 years with a capability rate of 90%. That by itself demonstrates that they are signing a PBL like deal for 5 or 10 years and not paying life cycle cost of anything since that cost is a 'future years' cost and depends upon assumptions that may or may not hold true (what wold be the cost of fuel in 2030?).
It's a clever ploy not to say no directly and delay giving any meaningful technology until when India itself is on the verge of equivalent indigenous realization. If ToT is timed right by them, they aim to halt India's own mature efforts in that area with restrictive clauses once "given" in the guise of "strategic friendship" and of course lots of cash.
