Total Cost of Ownership

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Total Cost of Ownership

The all-in cost for purchasing and maintaining an asset. For example, the total cost of ownership of a house is not simply the purchase price, but also includes the cost of taxes, utility bills, perhaps the cost of replacing or repairing parts of the structure, and any other relevant costs incurred during the time one owns the house.
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These decisions, however, face the barrier of Americans' tendency to look at the 99-cent sticker price and concerns that something is "too expensive." But it is clear that sensible investment today can lower tomorrow's O&M costs as well as total ownership cost.
This total systems approach is also dictated in the DoD Directive 5000.01 which states that planning for O&S and the estimation of total ownership costs shall begin as early as possible.
He added: "It would be advantageous for the government and industry to get together early on to decide what specific equipment has the biggest impact to total ownership cost, and make informed decisions about that rather than being forced by budgetary constraints to make poor choices and then pay over the life of a ship--30 years in some cases--over and over again for that bad decision that was made early on."
As the source for all USAF total ownership costs, AFCAA bears the burden and the challenge of pulling information on time and in its entirety and ensuring that the data are credible within the AFCAP tool, Databases are updated regularly (for example, daily, monthly, or quarterly).
Many FCT projects have reduced the total ownership cost of military systems, cutting overall acquisition and support expenditures while enhancing standardization and interoperability, improving allied cross-service support, and promoting international cooperation and interoperability.
A significant allocation of the annual DoD budget is for the operations and support (O&S) costs of weapon systems, accounting for 60 percent to 70 percent of total ownership cost (TOO.
Briefings included NLI Clothing and Textiles (Class II) and Expeditionary Medical Equipment & Consumables (Class VIII) deep dives, total ownership cost reduction, performance measurement planning and pre-deployment training.
Life-cycle systems management requires that we become better attuned to total ownership cost, which is addressed in the JCIDS process as the second key system attribute for the sustainment KPR This provides balance to the sustainment solution by ensuring that the operations and support (O&S) costs, such as maintenance, spares, fuel, and support, that are associated with materiel readiness are considered in making program decisions.
More specifically, this article will address some of the policy initiatives, organizational changes, and implementation challenges of incorporating HSI into the acquisition life cycle to insure better total system performance and lower total ownership cost.
The total ownership cost for a CVN 68-class ship is $32.1 billion in FY04 constant year dollars; the total ownership cost for CVN 78 is expected to be $26.8 billion.
Further, the Coast Guard has not yet begun to measure the system integrator's performance on the three overarching goals of the Deepwater program--operational effectiveness, total ownership cost, and customer satisfaction.
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