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application of MOSA to replace obsolete hardware and software, generally requires more expensive redesigning and requalification. In many instances, this solution will cost more in the short run but will reduce TOC in the long run. Unfortunately, in the current budget environment, it is difficult for the program manager to justify spending money now to save money later, especially when savings may occur in a different budget category.

Since 1995, the Air Force has kept track of high-TOC avionics components in its AFTOC database (U.S. Air Force, 2000a), and since 1998 a small amount of funding has been made available for the front-end funding of projects designed to reduce TOC. The committee supports these efforts, but additional funding should be made available to support well documented opportunities to reduce avionics TOC. Revolving funds, such as the Working Capital Fund, to which all of the services contribute, may provide a possible mechanism for providing these funds.

Funding for initiatives to solve the issues related to DMS and to reduce TOC will remain a challenge for all of the services. The best solution would be to budget for and fund modernization modifications that incorporate modular open-systems architectures. This would not only solve immediate DMS problems but would also reduce the cost of solving future DMS problems.

The second-best solution would be for each service to create a budget line item that would be funded each year and used to solve DMS problems as they are identified. This line item would also fund other TOC cost-reduction initiatives. A rigorous cost analysis comparing the TOC for continued system operation with and without the change or initiative would have to be done to determine the comparative cost/benefit of competing proposals or initiatives.

The next best way to ensure that funds are available for solving DMS issues would be to use a revolving fund, such as the Working Capital Fund. However, the SPO director, the Air Logistics Command supply-chain manager for the commodity group, and the Major Command would all have to agree on the need for funding and for the surcharge increase the weapon system would incur by using the Working Capital Fund. The Air Force has already established a parts-obsolescence funding line as part of the Working Capital Fund overhead. However, this line item, which was only established in FY00, is relatively small.