Investigation Into the Ratio of Operating and Support Costs to Life-Cycle Costs for DoD Weapon Systems

Abstract

Abstract : Recent legislation, such as the Weapon Systems Acquisition Reform Act of 2009, requires a renewed emphasis on understanding operating and support (O&S) costs. Conventional wisdom within the acquisition community suggests a 70:30 cost ratio with respect to O&S and acquisition of an average weapon system. Using 37 Air Force and Navy programs, the authors estimate the mean overall ratio of O&S costs to acquisition costs to be closer to 55:45, although many weapon systems displayed significant deviation from this 55 percent average. Contributing factors such as life expectancy and acquisition strategy (i.e., new system or modification) affect this variance. Their research advises against using a single one-size-fits-all O&S/acquisition cost ratio for all major DoD weapon systems.