Impact of Military Operational Tempo (OPTEMPO)
on Military Equipment Useful Life Studies

Department of Defense (DoD) military equipment continues to experience fluctuations in programmed utilization rates due to combat and contingency operations. Changes in utilization rates and patterns, coupled with fatigue due to in-theater operational conditions, have resulted in changes to the service life expectancies for much of the Department’s military equipment. In recent years, much of this equipment has experienced greater than planned utilization, while other equipment has experienced lower than expected utilization rates, resulting in both increases and decreases to system life expectancies. These scenarios have led to varying requirements for military equipment replacement and recapitalization.

The Department does not have a standardized method or process for evaluating military equipment programs over their life cycles to analyze the resulting impacts to the program resulting from changes in operational tempo (OPTEMPO). This results in the Department continuing to experience problems with budget justification requests (supporting equipment replacement/recapitalization requests based on increased usage/fatigue resulting from changes in OPTEMPO) and with planning for military equipment replacement and recapitalization, as the usage and fatigue information is not adequately captured or used for planning and justification.

To overcome this problem, the Department developed a formula-based methodology that accounts for the impact of OPTEMPO on military equipment useful life estimates and developed a capital planning model that provides the necessary linkages to leverage financial information within the budget process. This effort includes switching fixed asset accounting systems across the Department from a time (straight-line years) to an activity (usage) basis for military equipment depreciation, which serves as the critical linkage for integrating financial information to capital planning and budget processes by factoring OPTEMPO data.

Integrating this type of quantitative OPTEMPO data into capital planning efforts allows for more accurate and consistent assessments of the life expectancy of equipment programs, providing decision-makers with the data they need for planning and budget justification.

The effort consists of three phases.

To realize the full benefits of the integration of OPTEMPO in capital planning and budget justification efforts across the Military Departments, policy changes requiring the Military Departments to collect and report usage and design service life data within their systems have been established.

Continued integration of these policy actions within the capital planning and budgeting processes will promote consistent and complete data reporting requirements across the Department and will facilitate the effective use and application of the OPTEMPO methodology and financial reporting processes for supporting budget requests and requirements for replacement and recapitalization of military equipment.

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