RTOC
Abstract
The Under Secretary of Defense, Acquisition, Technology & Logistics (USD(AT&L), defined the mission for the Reduction in Total Ownership Cost (RTOC) program as the reduction of ownership costs for defense systems. The RTOC program funds activities and initiatives that will: 1. Increase the reliability, maintainability, supportability and thus increase readiness of new or existing defense systems. 2. Reduce logistics footprint. 3. Generate future cost reductions in total ownership cost. These individual initiatives are complete efforts within themselves that yield complete redesigns which the Services are committed to put into production and operation. The initiatives optimize cost avoidance, ultimately reducing the operating and support (O&S) costs for systems. The Department has set an FY 2010 RTOC goal of reducing the total defense systems inflation increase in operations and support cost by 30 percent between FY 2004 (baseline) and FY 2010. This Program Element (PE) provides a major portion of the program funding to achieve this goal. The successful demonstration of the RTOC program initiatives should stimulate additional initiatives by the Services to achieve even greater cost avoidances. Individual RTOC Project Management rests with the Services and their Project Managers. Each Service has an active RTOC Point of Contact (POC) for the initial interface between OSD and the RTOC Project Managers. The average Return on Investment (ROI) for FY 2008 projects (based on discounted cash flow calculations) is approximately 28:1 with $1.176 billion in cost avoidances across the life cycle of the affected systems. These cost avoidances will be lost without the requested funding in FY 2009, which is needed to complete the projects begun with FY 2008 funding. The average Return on Investment (ROI) for these FY 2009 new start projects (based on discounted cash flow calculations) is approximately 72 with $2.006 billion in cost avoidances across the life cycle of the affected systems.
Document Details
- Document Type
- Project
- Publication Date
- Oct 01, 2011
- Source ID
- 017_0605017D8Z_4_0400_PB_2011
Related Documents
- Root: Reduction of Total Ownership Cost (RTOC)
- Child Accomplishment: Reduction of Total Ownership Cost Efforts
- Child Cost Item: a909f57e87d5edf7fa6e178bf2851b97