Budgeting for R-TOC

Shortly after the R-TOC program was created, OSD issued funding guidance instructing the Services to set aside $50M per Service per year for R-TOC initiatives. The R-TOC Working Group has monitored Service budgets to ensure that these funding targets are being met.

The effort by R-TOC Pilot programs to document unfunded R-TOC initiatives led to the opportunity in November 1999 to develop a "no offset" FY01 program budget decision (PBD). The Services developed specific budget justifications for a handful of key R-TOC projects. Guidelines for these projects were:

• 3:1 return on investment ratio desired
• Payback within the FYDP desired
• Additional benefits of the projects (warfighting improvements, RM&S, workload reduction, quality of life, etc.) should also be documented.

As a result of this process, PBD 721 provided, $13M in additional R-TOC funds for FY01 were approved ($56.3M over the FYDP). These funds were provided primarily to R-TOC Pilot Programs. Programs receiving funding under the first increment of PBD 721 included:

Army

CH-47, Multi-Platform Common Source Database and Improved Main Rotor Blades
MLRS, Tactical Proficiency Trainer
HEMTT, Interactive Electronic Technical Manuals (IETMs)
Blackhawk, Advanced Helicopter Transmission Lubricant

Navy

Lightning Protection, MHC 51 Class
Hardcoating for Laser Eye Protection
EA-6B J52 Engine Component Improvement Program

Air Force

B-1, Digitized Tech Orders
F-117, Engine Build
KC-135, Turbine Engine Monitoring System

In December 2001, a second increment of funding under PBD 721 was approved, beginning in FY03. This PBD was limited primarily to R-TOC Pilot Programs. This PBD provides an additional $22.5M in FY03 funds (with corresponding totals in the out-years). Like the previous PBD, this was a "no offset" PBD; the Services were not required to make offsetting budget reductions. Moreover, the savings from R-TOC investments will be retained and available for reinvestment. Approved FY03 funding under the second R-TOC PBD included:

Army programs

-$3.7M MLRS position navigation unit
-$2.1M Guardrail/ Common Sensor data link

Navy programs

-$4.9M RFID/MEMS ordnance management
-$0.3M Aviation Support Equipment stencils and marking
-$1.1M Aegis cruisers stern flap
-$1.3M Common Ship magnetic couplings
-$0.2M SH-60 fatigue crack monitors
-$4.5M EA-6B flight control system

Air Force programs

-$3.4M KC-135 radome replacement
-$1.5M Aircraft engine electronic tech manuals

The working Group has also monitored Service budgets to make sure that PBD funds are properly allocated in out-year budgets and that the Services are complying with other defense guidance about budgeting for R-TOC. Funding for R-TOC improvements is provided through a wide variety of Service programs such as the Navy Cost Reduction and Effectiveness Improvement Council (CREIC), Army recapitalization and O&S Cost Reduction (OSCR) investments, Air Force Cost Savings Modernization Initiatives, Small Business Innovative Research (SBIR) and Commercial O&S Savings Initiative (COSSI) investments.