Federal Electronics Challenge: Total Cost of Ownership Guidance

This document examines Total Cost of Ownership modeling (TCO), a tool that systematically accounts for all costs related to an information technology investment decision. TCO includes acquisition and procurement, operation and maintenance and end-of-life management.

This five-page guide provides assistance on how to utilize TCO to make purchasing decisions for information technology products. It looks at how TCO modeling differs from life cycle cost analysis or full cost accounting; why federal agencies should use TCO; what costs are used in TCO modeling; and limitations to TCO modeling.