U.S. Military Program Management

CHAPTER20

Total Ownership Cost Considerations in Key Performance Parameters and Beyond

By Michael Boudreau and Brad Naegle

Is DoD headed down the right path to get total ownership cost (TOC) under control? There are, no doubt, weapons systems that DoD procures without regard for the TOC, as the capability needed is so critical that we would pay nearly anything to have it … for a while, at least. For example, the SR-71 Blackbird was an extremely effective reconnaissance aircraft, but the Air Force was happy to retire the last of the fleet due primarily to the cost of operating the system, purported to be as high as $200,000 per hour in TOC terms. Eventually, the excessive TOC burden of even the most capable weapon system becomes unbearable. ...