RTOC
Abstract
The Under Secretary of Defense, Acquisition, Technology & Logistics (USD(AT&L), defined the mission for the Reduction in Total Ownership Cost (R-TOC) program as the reduction of ownership costs for defense systems. The R-TOC program funded activities and initiatives that: 1. Increased the reliability, maintainability, supportability and thus increased readiness of new or existing defense systems. 2. Reduced logistics footprint. 3. Generated future cost reductions in total ownership cost. These individual initiatives were complete efforts within themselves that yield complete redesigns which the Services were 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 set an FY 2010 R-TOC goal of reducing the total defense systems inflation increase in operations and support cost by 30 percent between FY 2004 (baseline) and FY 2010. In FY11 OSD will transition the program to the Services. OSD will only fund those projects that will be completed during FY11. There will be no R-TOC PE funded carry-over projects into FY12. The Services will assume responsibility for the program in FY12. The average Return on Investment (ROI) for FY 2009 projects (based on discounted cash flow calculations) is approximately 45:1 with $1.174 billion in cost avoidances across the life cycle of the affected systems. The average ROI for the FY 2010 projects (based on discounted cash flow calculations) is approximately 80:1 with $1.333 billion in cost avoidances across the life cycle of the affected systems.
Document Details
- Document Type
- Project
- Publication Date
- Oct 01, 2012
- Source ID
- 017_0605017D8Z_4_0400_PB_2012
Related Documents
- Root: Reduction of Total Ownership Cost (RTOC)
- Child Accomplishment: Reduction of Total Ownership Cost Efforts
- Child Cost Item: 8fd1532e59c7e4621a3d4bb08894de46