Abstract: Based on the study of state-of-art and detailed analysis of complex technical product, a life-cycle cost information model is established and a Computer Aided Cost Engineering System(CACES) for evaluating the cost elements of a product during its design phase is under development. The relations among its subsystems, namely the cost modeling, cost optimization and cost analyzing are explored and the key techniques of CACES, such as expert system and knowledge engineering are discussed. Case study of hydraulic excavator shows that the CACES approach is feasible and effective.