Total Cost of Ownership for IT Equipment: Federal Electronics Challenge

Total Cost of Ownership, aka Life Cycle Costing, is an accounting method used to evaluate the cost of a product or system measured over its useful life. It considers operating costs, maintenance expenses, disposal costs, and other economic factors in addition to initial purchasing cost. Life Cycle Costing provides a much more accurate reflection of the budgetary demands that accompany specific projects. It recognizes that the up-front costs are only one part of the total amount of money that will need to be spent over the project's life. This approach properly emphasizes future as well as present costs in the decision making process, and the long-term impact of current sustainability investments.

The Total Cost of Ownership (TCO) Calculator compares the costs of different options for information technology (IT) equipment with an emphasis on decisions that may have an environmental impact.  The user can enter up to four different products or life-cycle management scenarios. The Calculator is organized into four sections: general information, purchasing, operations & maintenance, and product disposition. Instructions for data entry, specific to each cost category are provided line-by line.

There are three mandatory data fields: electricity costs, number of units, and equipment purchase price. Users can choose to enter data or omit any other data fields depending on the scope of the analysis and data availability.  The results returned include: total cost per unit over service life, annual cost per unit, total lifetime cost of purchase, and subtotals by lifecycle phase.
                                  
This calculator offers a quick way to evaluate and quantify the cost savings of buying energy efficient and durable IT equipment. It empowers purchasing officers to look beyond low-bid products and to evaluate full costs over the entire life-span of products.
 

This calculator was developed by the Federal Electronics Challenge, a partnership program that encourages federal facilities and agencies to:

  • Purchase greener electronic products
  • Reduce impacts of electronic products during use
  • Manage obsolete electronics in an environmentally safe way
The ability or potential of a physical body to do work. The most common forms of energy are heat, light, mechanical (moving parts), and electrical.

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