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T R A N S P O R T A T I O N R E S E A R C H B O A R D WASHINGTON, D.C. 2006 www.TRB.org NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM NCHRP REPORT 551 Research Sponsored by the American Association of State Highway and Transportation Officials in Cooperation with the Federal Highway Administration SUBJECT AREAS Planning and Administration • Pavement Design, Management, and Performance • Maintenance Performance Measures and Targets for Transportation Asset Management CAMBRIDGE SYSTEMATICS, INC. Chevy Chase, MD WITH PB CONSULT, INC. New York, NY TEXAS TRANSPORTATION INSTITUTE College Station, TX

NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed research provides the most effective approach to the solution of many problems facing highway administrators and engineers. Often, highway problems are of local interest and can best be studied by highway departments individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation develops increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of cooperative research. In recognition of these needs, the highway administrators of the American Association of State Highway and Transportation Officials initiated in 1962 an objective national highway research program employing modern scientific techniques. This program is supported on a continuing basis by funds from participating member states of the Association and it receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board of the National Academies was requested by the Association to administer the research program because of the Board’s recognized objectivity and understanding of modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; it possesses avenues of communications and cooperation with federal, state and local governmental agencies, universities, and industry; its relationship to the National Research Council is an insurance of objectivity; it maintains a full-time research correlation staff of specialists in highway transportation matters to bring the findings of research directly to those who are in a position to use them. The program is developed on the basis of research needs identified by chief administrators of the highway and transportation departments and by committees of AASHTO. Each year, specific areas of research needs to be included in the program are proposed to the National Research Council and the Board by the American Association of State Highway and Transportation Officials. Research projects to fulfill these needs are defined by the Board, and qualified research agencies are selected from those that have submitted proposals. Administration and surveillance of research contracts are the responsibilities of the National Research Council and the Transportation Research Board. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement rather than to substitute for or duplicate other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at: http://www.national-academies.org/trb/bookstore Printed in the United States of America NCHRP REPORT 551 Price $42.00 Project 20-60 ISSN 0077-5614 ISBN 0-309-09847-5 Library of Congress Control Number 2006922152 © 2006 Transportation Research Board COPYRIGHT PERMISSION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The project that is the subject of this report was a part of the National Cooperative Highway Research Program conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. Such approval reflects the Governing Board’s judgment that the program concerned is of national importance and appropriate with respect to both the purposes and resources of the National Research Council. The members of the technical committee selected to monitor this project and to review this report were chosen for recognized scholarly competence and with due consideration for the balance of disciplines appropriate to the project. The opinions and conclusions expressed or implied are those of the research agency that performed the research, and, while they have been accepted as appropriate by the technical committee, they are not necessarily those of the Transportation Research Board, the National Research Council, the American Association of State Highway and Transportation Officials, or the Federal Highway Administration, U.S. Department of Transportation. Each report is reviewed and accepted for publication by the technical committee according to procedures established and monitored by the Transportation Research Board Executive Committee and the Governing Board of the National Research Council. NOTE: The Transportation Research Board of the National Academies, the National Research Council, the Federal Highway Administration, the American Association of State Highway and Transportation Officials, and the individual states participating in the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of this report.

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished schol- ars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and techni- cal matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Acad- emy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achieve- ments of engineers. Dr. William A. Wulf is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Acad- emy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both the Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. William A. Wulf are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is a division of the National Research Council, which serves the National Academy of Sciences and the National Academy of Engineering. The Board’s mission is to promote innovation and progress in transportation through research. In an objective and interdisciplinary setting, the Board facilitates the sharing of information on transportation practice and policy by researchers and practitioners; stimulates research and offers research management services that promote technical excellence; provides expert advice on transportation policy and programs; and disseminates research results broadly and encourages their implementation. The Board’s varied activities annually engage more than 5,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. www.TRB.org www.national-academies.org

COOPERATIVE RESEARCH PROGRAMS STAFF FOR NCHRP REPORT 551 ROBERT J. REILLY, Director, Cooperative Research Programs CRAWFORD F. JENCKS, Manager, NCHRP EILEEN P. DELANEY, Director of Publications BETH HATCH, Assistant Editor NCHRP PROJECT 20-60 Field of Special Projects SANDRA STRAEHL, Montana DOT (Chair) CARL CHASE, JR., South Carolina DOT DAVID S. EKERN, Idaho Transportation Department MICHAEL J. GOODALE, Ontario Ministry of Transportation HAROLD C. ROGERS, JR., Pennsylvania DOT PETER STEPHANOS, Maryland State Highway Administration MARSHALL L. STIVERS, Infrastructure Corporation of America, Tallahassee, FL SCOTT A. YOUNG, Colorado DOT VICKI MILLER, FHWA Liaison JAMES T. MCDONNELL, AASHTO Liaison THOMAS PALMERLEE, TRB Liaison AUTHOR ACKNOWLEDGMENTS The authors wish to thank the following individuals, who pro- vided much valuable information on their current practices in per- formance measurement and their perspectives on asset manage- ment, as part of the agency interviews conducted for this study. • Colorado DOT—Scott Young, Investment Analysis Unit Man- ager; and David Busby, Investment Analysis Unit. • Florida DOT—Bob Romig, Director, Office of Policy Planning; Dave Lee, Office of Policy Planning; and Brian Watts, Office of Policy Planning. • Idaho Transportation Department—Dave Ekern, Director; Jim Ross, Chief Engineer and Administrator, Division of High- ways; Charlie Rountree, Administrator, Division of Transporta- tion Planning; and Julie Pipal, Manager, Office of Budget Policy and Intergovernmental Relations. • Iowa DOT—Stuart Anderson, Systems Planning; Ronald Beane, Office of Maintenance; Jon Ranney, Program Management; and Will Zitterich, Office of Maintenance. • Maryland DOT—Marsha Kaiser, Director of Planning and Capital Programming; and Ed Strocko, Office of Planning and Capital Programming. • Maryland State Highway Agency (SHA)—Neil Pedersen, Administrator; Jock Freedman, Bridge Development; Tom Hicks, Traffic and Safety; Joe Miller, Bridge Development; Doug Rose, Deputy Administrator/Chief Engineer; John Scally, Maintenance; Douglas Simmons, Deputy Administrator/Finance, IT and Administration; Dennis Simpson, Planning and Preliminary Engineering; Peter Stephanos, Materials and Technology; Raja Veeramachaneni, Planning and Preliminary Engineering; Carl Vogel, Operations; Mike Wetzel, Highway Design; and Russell Yurek, Maintenance. • Michigan DOT—Susan Mortel, Deputy Director of Planning; William Tansil; Ron Vibbert; John Friend; Polly Kent; Rick Lilly; Susan Gorski; and Craig Newell. • Minnesota DOT—Randy Halvorson, Division Director, Pro- gram Management; and Mark Larson, Director, Performance Planning and Measurement. • Montana DOT—Sandra Straehl, Administrator, Rail, Transit, and Planning Division; Dick Turner, Chief, Multimodal Planning Bureau; Bill Cloud, Chief, Data and Statistics Bureau; Gary Lar- son, Chief, Project Analysis Bureau; and Mary Gayle Padmos, Civil Engineering Specialist, Project Analysis Bureau. • New York State DOT—Tim Gilchrist, Director, Policy and Strat- egy Group; John Shufon, Director, Data Analysis and Forecasting Bureau; Jerry Cioffi, Director, Corridor Management Bureau; Steve Wilcox, Associate Director, Transportation Maintenance Division; Lou Adams, Technical Manager, Modeling and Fore- casting Section; and Joy Chiu, Management Systems Analyst. • Ohio DOT—Leonard Evans, Administrator of the Office of Sys- tems Analysis Planning; Cash Misel, Chief Engineer; and Matt Selhorst, Deputy Director for Planning. • Ontario Ministry of Transport—Mike Goodale, Director of Program Management; Alison Bradbury, Head of Investment Planning and Programming; Noris Bot, Manager of Investment Planning and Programming; Jamie Carr, Asset Management. • Pennsylvania DOT—Gary Hoffman; Hal Rogers; Scott Christie; Craig Reed; Danny Dahlwood; Mary Gilardi; Steve Grimme; and Dennis Lebo. • South Carolina DOT—Jim Feda, Director of Maintenance; Carl Chase Jr., Transportation Assets Manager; Terecia Wilson, Director, Safety; William Bloom, Data Analyst; Lee Floyd, Bridge Maintenance Engineer; William Beck, Chief Data Ser- vices; and Tom Shea, Pavement Manager. • Tennessee DOT—Neil Ham, Finance Director; and Gerald Gre- gory, Maintenance Director. • Virginia DOT—George Gardner; Charles Miller; Quinton Elliot; Mina Lockwood; Chad Tucker; Larry Caldwell; Steve Carey; and Steve Brich. • Washington State DOT—Enrico Baroga, Maintenance Program Delivery Manager; Daniella Bremmer, Director of Strategic Assessment; Aaron Butters, Systems Analysis and Program Devel- opment Manager; John Conrad, Engineering and Regional Opera- tions; Greg Hilstad; Roger Horton, General Manager, Transporta- tion Data Office; DeWayne Wilson, Bridge Office; Marcy Yates, Accounting Chief.

The two volumes of this report—Volume I, Research Report, and Volume II, Guide for Performance Measure Identification and Target Setting—will help trans- portation agencies apply the concepts of performance management to their asset man- agement efforts. Volume I describes the research effort and provides the current state of practice on the use of performance measures, principally in the context of transporta- tion asset management. Volume II introduces a framework for identifying performance measures and setting target values, and its appendixes contain examples of performance measures and targets. Performance measures and target values are critical to the prin- ciples of asset management to analyze tradeoffs, make investment decisions, and mon- itor intended effects. The report will be of interest throughout transportation agencies as an aid to effective decision making and the optimization of resources. Many transportation agencies have developed system-level performance measures to help track the impacts of program investments, maintenance, and operations improvements. These performance measures are usually technical in nature, capturing an engineering or operational attribute of the transportation system. A review of these measures was needed to assess their usefulness for asset management (e.g., their appli- cation in tradeoff analyses and investment decisions). Development of measures for nontraditional (e.g., security, social, environmental, and economic) issues affecting transportation decisions was also needed. Some DOTs define targets with which current conditions can be objectively com- pared to determine whether the transportation system is performing acceptably. The basis on which these targets are set varies, and there is no generally accepted method- ology for their establishment and use in asset management. Guidance for a methodol- ogy to establish targets for use by transportation agencies was also needed. Therefore, the objectives of this research were to (1) investigate performance mea- sures suitable to asset management and (2) develop a framework for establishing per- formance measures and setting targets for use in asset management. The emphasis was on highway infrastructure assets. This research project specifically complements two other NCHRP projects. NCHRP Project 20-24(11), “Asset Management Guidance for Transportation Agen- cies,” produced a first-generation asset management guide that has been adopted by AASHTO and is available at http://assetmanagement.transportation.org/tam/aashto. nsf/home. NCHRP Project 20-57, “Analytic Tools to Support Transportation Asset Management,” produced two software tools, one for analyzing investments across infrastructure categories and another for demonstrating the impacts of investment choices on short-term programs of projects. Both of these software tools will be further developed and maintained as AASHTOWare products. Results were published as NCHRP Report 545: Analytical Tools for Asset Management, which contains a CD with the software products and user guides. FOREWORD By Crawford F. Jencks Staff Officer Transportation Research Board

Along with the FHWA, the NCHRP (under Project 20-36) sponsored an interna- tional scan on transportation asset management to Australia, Canada, England, and New Zealand. Scan results have been published by the FHWA in report FHWA-PL-05-019. At the time of this publication, plans were being made for a domestic scan of transporta- tion asset management practices in the United States as part of NCHRP Project 20-68. Efforts such as these will continue to support transportation agencies by providing the concepts, methods, and tools to address the changing demands of the public, legis- latures, and government leaders. Because needs are great and resources are limited, the consequences of various scenarios can be determined and compared to optimize invest- ments for the intended outcome.

Volume I: Research Report

Contents Executive Summary.............................................................................................................................. i 1.0 Introduction .................................................................................................................................. 1 1.1 Study Context ....................................................................................................................... 1 1.2 Study Objectives and Scope................................................................................................ 1 1.3 Contents of Report ............................................................................................................... 3 2.0 Background ................................................................................................................................... 5 2.1 Transportation Asset Management ................................................................................... 5 2.2 Performance Measurement................................................................................................. 10 3.0 Current Practice Review ............................................................................................................. 15 3.1 Objectives of the Current Practice Review ....................................................................... 15 3.2 Summary of Current Practice............................................................................................. 16 3.3 Organizational Contexts ..................................................................................................... 22 3.4 Approaches to Selecting and Organizing Measures....................................................... 25 3.5 Current Performance Measures ......................................................................................... 29 3.6 Approaches to Aligning Measures within the Organization ........................................ 32 3.7 Use of Performance Measures............................................................................................ 35 3.8 Setting Performance Targets............................................................................................... 37 4.0 Performance Measures for Asset Management: Criteria and Guidelines ........................ 41 4.1 How Performance Measures Support Asset Management............................................ 41 4.2 Criteria and Guidelines for Selecting Performance Measures ...................................... 44 5.0 Performance Measures for Asset Management: Design Considerations ......................... 59 5.1 Addressing Federal Transportation Planning Regulations ........................................... 59 5.2 Linking Resource Allocation to Policy Objectives .......................................................... 61 5.3 Aligning Performance Measures Across the Organization (and Beyond) .................. 63 5.4 Tailoring Measures to Decisions—Ensuring Appropriate Sensitivity ......................... 67 5.5 Analytic Constructions of Performance Measures to Understand Overall Health, Critical Deficiencies, and Trends ....................................................................................... 73 5.6 Providing Solid Foundation Data...................................................................................... 80 5.7 Structuring Performance Tradeoffs ................................................................................... 81 5.8 Predicting Performance and Setting Targets Based on Funding .................................. 81 5.9 Setting Long-Term Performance Goals............................................................................. 86 5.10 Obtaining Internal and External Buy-In ........................................................................... 87 Volume I: Research Report

6.0 Recommended Framework for Transportation Agencies.................................................... 91 6.1 Introduction .......................................................................................................................... 91 6.2 Framework Overview ......................................................................................................... 92 6.3 Identify Performance Measures ......................................................................................... 92 6.4 Integrate Performance Measures into the Organization ................................................ 94 6.5 Establish Performance Targets........................................................................................... 95 Sources.................................................................................................................................................... 96 Cited References ................................................................................................................................... 96 Bibliography.......................................................................................................................................... 98 Volume I: Research Report

iVolume I: Research Report Executive Summary ■ Introduction Asset management and performance measurement are topics of strong interest in the transporta- tion community today. NCHRP Project 20-60 looks to the strengths of both of these concepts in con- sidering what performance measures are best to apply within an asset management context. In doing this the study considers implications of several relevant trends now influencing U.S. trans- portation industry practice: • Increased use of performance measurement in transportation policy making, planning, pro- gramming, and system monitoring; • Formal development of asset management principles through a collaborative effort among TRB, AASHTO, and the FHWA, culminating in the production of AASHTO’s Transportation Asset Management Guide through NCHRP Project 20-24(11); • Development and application of maintenance quality assurance programs, which base mainte- nance management on explicit levels of service that, like performance measures, can serve as indicators of both current condition/performance as well as target values for improvement; and • A renewed focus on analytic tools and other information technology resources that are needed for performance-based management and, more generally, good asset management. The objectives of this project were to develop an understanding of what set of performance mea- sures can best serve the principles of good asset management and to recommend procedures that help an agency apply this understanding. This study has developed a practical methodology that enables a transportation agency: • To identify measures of transportation system performance that are best suited to good asset management, covering a range of investments for system preservation, operations, and capac- ity expansion; and • To select specific performance measures and set targets for these measures that are consistent with the needs of the agency and with good asset management practice. This report is Volume I of a two-volume set presenting the results of research conducted for Proj- ect 20-60. It includes: • Results of a literature review and interviews with 15 transportation agencies, describing the range of performance measures now used or proposed for use by domestic and international agencies, the criteria that now govern performance measure selection, and how performance measures are applied in different agencies.

• Criteria for selecting performance measures that are useful to asset management, based on the requirements for this study set by the panel in the scope of work and the principles articulated in the Transportation Asset Management Guide. • An in-depth treatment of key considerations in defining and using performance measures within an asset management context. • A description of the framework that has been developed for agencies to use in identifying per- formance measures that are most useful to asset management and to select target values for these measures. Volume II of this report is a guide to the framework for performance measure identification and target setting. ■ Transportation Asset Management Asset management provides a strategic framework for infrastructure management that gets the most out of performance measurement. It establishes a set of principles, concepts, and techniques that can be applied to an agency’s procedures for policy formulation and decisions in resource allo- cation and use. The core principles of asset management, from which performance measure criteria are derived, are as follows: • Policy-Driven—Resource allocation decisions are based on a well-defined and explicitly stated set of policy goals and objectives. These objectives reflect desired system condition, level of ser- vice, and safety provided to customers and are typically tied to economic, community, and envi- ronmental goals. • Performance-Based—Policy objectives are translated into system performance measures that are used for both day-to-day and strategic management. • Analysis of Options and Tradeoffs—Decisions on how to allocate resources within and across different assets, programs, and types of investments are based on understanding how different allocations will affect the achievement of policy objectives and what the best options to consider are. The limitations posed by realistic funding constraints also must be reflected in the range of options and tradeoffs considered. • Decisions Based on Quality Information—The merits of different options with respect to an agency’s policy goals are evaluated using credible and current data. Decision support tools are applied to help in accessing, analyzing, and tracking these data. • Monitoring to Provide Clear Accountability and Feedback—Performance results are moni- tored and reported for both impacts and effectiveness. Feedback on actual performance may influence agency goals and objectives, as well as future resource allocation and use decisions. These principles already are widely understood. Many transportation practitioners would agree that investment decisions for transportation systems should be based on weighing costs against likely out- comes, that a variety of options should be considered and evaluated, and that quality information is needed for decision making. Many agencies are now pursuing performance-based approaches to plan- ning and programming, monitoring system performance, and developing more integrated data and analysis tools to evaluate tradeoffs among capital expansion, operations, and preservation activities. ii Volume I: Research Report

Most agencies recognize that application of asset management principles is critical in times of con- strained resources, when all investment and budget decisions are subject to increased public scrutiny. ■ Performance Measurement Performance measurement is a way of monitoring progress toward a result or goal. It is also a process of gathering information to make well-informed decisions. Transportation agencies have used performance measures for many years to help track and forecast the impacts of transportation system investments, monitor the condition of highway features, and gauge the quality of services delivered by an agency. Performance measures are valuable and provide several useful benefits: • Greater accountability to policy-makers, the agency’s customers, and other stakeholders; • Improved communication of information about the transportation system to customers, politi- cal leaders, the public, and other stakeholders; • Increased organizational efficiency in keeping agency staff focused on priorities and enabling managers to make decisions and adjustments in programs with greater confidence that their actions will have the desired effect; • Greater effectiveness in achieving meaningful objectives that have been identified through long- range planning and policy formulation; • A better understanding of the impacts of alternative courses of action that performance mea- sures can provide; and • Ongoing improvement of business processes and associated information through feedback. Performance measures traditionally have been largely technical in nature, capturing an engineering or operational attribute of the transportation system. Today, however, transportation executives and managers must address an increasingly complicated and wide-ranging set of issues regarding the “best” solutions on balance to transportation problems, the cost-effectiveness of proposed projects, and the anticipated impacts of these projects. While measures of technical condition and perfor- mance are still needed, other types of measures are called for as well. The ways in which perfor- mance measures are applied are likewise changing to meet the needs and expectations of stakeholders. ■ Asset Management Implications for Performance Measures Performance measures can best support the principles of asset management described above if they have the following principles: • Policy-driven—Performance measures should capture and respond to policy objectives, pro- viding meaningful information about how changes in the transportation system support these objectives. iii Volume I: Research Report

• Strategic perspective—It should be possible to produce credible forecasts for performance mea- sures (as is done in many current management systems) and to use these forecasts in engineer- ing and economic analyses, including life-cycle cost calculations. • Consideration of tradeoffs and options—Performance measures should support “what-if” analyses of different scenarios, reflecting a clear relationship between performance and cost. They should also inform decisions about a wide range of investments in preservation, operation, and capacity expansion and in certain cases the results of investments in different modes. Mea- sures need to be sensitive enough to show the “amount the needle moves” as a result of differ- ent investments. • Decisions based on good information—Performance measures should be supported by an agency’s management systems or other analytic tools and be an integral part of its business and decision processes. They should be compatible with analytic procedures that are appropriate to different organizational levels. Data requirements for performance measures should be realistic and feasible. • Feedback—Performance measures should provide managers with sufficient information to understand problems and suggest solutions. This feedback should help an agency understand the impacts of its past and potential future actions, as distinct from exogenous influences on per- formance that are beyond the agency’s control. Since feedback is a continual process, periodic monitoring of performance measures needs to be economical. • Implementation across organizational units and levels—Performance measures collectively should provide useful information to technical, managerial, and executive levels within the organization and apply consistent information and definitions of impacts across organizational units. The way in which measures are defined and calculated is important in achieving consis- tent information horizontally and vertically. While these characteristics are the major ones associated with guidelines for good asset management, there are other characteristics of good performance measures in general that need to be met (e.g., the need for both internal and external buy-in to an agency’s measures and a clear understanding of what they mean). The project panel also has developed a complementary set of requirements on the method- ology to be developed in this study (e.g., that it apply to agencies of different organizational structures and characteristics, that it support the statewide and metropolitan transportation planning provisions of current federal law, and that it accommodate the requirements of Governmental Accounting Stan- dards Board Statement 34 as well as those of the Transportation Asset Management Guide). ■ Current Performance Measures and Practices The research team reviewed a wide body of literature on transportation performance measures, including guidebooks on performance measurement and managerial accountability, studies and compilations of transportation performance measures in the United States and internationally, and specific reports by agencies (such as for long-range transportation planning, capital program devel- opment, strategic business planning, and performance accountability) that apply performance mea- sures. In addition, interviews were conducted with 15 state transportation agencies across the country, distributed by AASHTO region as follows: iv Volume I: Research Report

• Northeast Association of State Transportation Organizations (NASTO): Maryland, New York, and Pennsylvania; • Southeast Association of State Highway and Transportation Organizations (SASHTO): Florida, South Carolina, Tennessee, and Virginia; • Mississippi Valley Conference of State Transportation Organizations: Iowa, Michigan, Min- nesota, and Ohio; and • Western Association of State Highway and Transportation Organizations (WASHTO): Colorado, Idaho, Montana, and Washington. Performance Measures The literature concluded that performance measures are clearly of growing interest: those agen- cies that use them are continually refining them, and those agencies that have not yet applied them to transportation system performance are now exploring their use. Different types of per- formance measures are in use or have been proposed within each category of measurement, as illustrated below. The review organized the large number of identified measures within the fol- lowing categories: • Preservation of assets, • Mobility and accessibility, • Operations and maintenance, and • Safety. Table 1 provides examples of performance measures identified in the current practice review that are suitable for use within an asset management context. This review emphasizes the “resource allocation” aspects of asset management, consistent with the project scope. However, agencies that were interviewed stressed the importance of “program deliv- ery” measures as well in achieving the results intended during resource allocation and in strength- ening the credibility of the agency for communicating both resource allocation recommendations and program delivery accomplishments. While some literature sources emphasize “outcome mea- sures” as the most desirable for communicating accountability for results, the agencies pointed out that “output” measures also need to be considered, and a blend of output and outcome measures may be the most useful. Of course, outputs tend to precede outcomes, so there is a natural relation- ship between the two. Outputs have several advantages: • They may be easier to communicate to nontechnical audiences; • They may be easier and less expensive to measure; • They provide an immediate indication of accomplishment when outcomes of an investment are long term; v Volume I: Research Report

vi Volume I: Research Report Measure Category Example Measures Comments Preservation of Assets Pavement condition index Bridge health index Remaining life Debt index (ratio of deterioration or lost value to replacement value) Condition and remaining life measures can be expressed as averages or distributions (e.g., percent of system length or VMT on roads in good, fair, and poor condition). Mobility and Accessibility Amount of congested travel (person-miles or VMT under congested conditions) Travel time index (ratio of peak travel time to free-flow travel time) Average travel time between major origins and destinations, by mode Average shipment cost between selected origins and destinations Care must be taken to distinguish results of agency actions from changes due to growth patterns, fuel prices and other factors. This can be accomplished through use of modeling tools, supplemental socioeconomic and traffic monitoring data, and well-designed before-after studies. Operations and Maintenance Traffic signal malfunction rate Average incident clearance time Time interval after precipitation stops to restore road conditions to defined standard Sign and pavement marking retroreflectivity Customer satisfaction rating for different maintenance elements Maintenance level of service approaches can be used to relate achievement of dif- ferent service levels to budget levels by category of work. Safety Serious crashes per million VMT Fatalities per 100 million VMT Number of work zone crashes Hazard index (based on crash incidence and severity rates) Backlog ($) of identified cost-effective safety countermeasures to address high- crash locations Use of the fatality rate measure is recom- mended for consistency with the U.S. DOT’s national performance target to reduce fatalities to 1.0 per million VMT. VMT = vehicle-miles traveled Table 1. Example Performance Measures for Asset Management

• They provide a tangible measure of accomplishment for preventive maintenance; and • They provide a basis for relating accomplishment to the agency resources needed. Related Agency Practices Agency interest in performance measures and target setting is strong, as noted earlier. Agencies described in their interviews the types of measures they use, how these measures are applied to dif- ferent functions and types of investments, and what aspects of asset management are supported. These descriptions provided a very useful picture of different levels of attainment in asset manage- ment, as well as of the diversity in performance measurement. While it is common to use measures to track performance over time and set targets for future performance, relating performance to cost is less familiar. Analyzing tradeoffs across programs, types of investments, or modes might now be characterized as the “frontier” of asset management. While the capabilities to relate performance to cost—a prerequisite for tradeoff analyses—are now available in many modern pavement and bridge management systems and certain maintenance management tools, only a few states reported a for- mal, structured consideration of tradeoffs. Practices in applying performance monitoring to feed- back and updating of agency processes also varies, ranging from informal discussions and considerations to more formal comparisons and decisions. Many agencies set performance targets, although the practices differ, ranging from definition of desired thresholds based on engineering considerations to establishment of goals based on long- term projections and scenario analyses. Several factors are accounted for by agencies in setting targets: • Anticipated funding levels; • Policy goals, statewide priorities, or priorities by route classification; • Public input; • Existing condition, historical performance trends, and implications of different proposed con- dition levels; • Internal and external input, and comparison to other states; • Discussions with the construction industry; and • Life-cycle cost analyses, tradeoff analyses, and estimates of the marginal value of additional investment. ■ Overview of Recommended Framework The framework developed for this study was based on the premise that there is no single, best set of performance measures suitable for every transportation agency. Each agency needs to develop vii Volume I: Research Report

or evolve its own set of measures based on its organizational structure, decision processes, and cul- ture and with consideration of the set of measures (and supporting data) already in place. However, there is a set of best practices for implementing performance measures that can help agencies to get the most benefit out of asset management. There is a need for clear yet flexible guidance as to how to go about identifying performance measures and setting performance targets that is compatible with an asset management approach. The recommended framework was developed in the form of procedurally oriented guidance. This procedural (i.e., step-by-step) guidance is supplemented by the in-depth treatment of key consid- erations presented in this report. This volume describes the framework in summary fashion. Vol- ume II is intended for use by agencies pursuing improvements to performance measurement in support of asset management. The guidance is organized into three parts: 1. Identify Performance Measures, 2. Integrate Performance Measures into the Organization, and 3. Establish Performance Targets. Guidance for identifying performance measures involves the following steps: 1. Inventory existing performance measures and identify how they are being used, 2. Identify gaps to be addressed based on coverage of critical outcome areas for agency goals and objectives and support for the asset management best practices, 3. Define criteria for selecting new measures (the guidance suggests a set of criteria but presumes that agencies will tailor criteria based on their needs and priorities), 4. Identify additional candidate measures, and 5. Select a set of measures from the list of candidates for further design and implementation. Guidance for integrating performance measures into an organization involves the following steps: 1. Engage internal and external stakeholders to achieve buy-in; 2. Identify the different decision contexts where performance measures are to be used (project, cor- ridor, and network levels and for short- or long-range decisions) and refine measures so that they are at the appropriate level of sensitivity; 3. Identify opportunities for using measures that are consistent across different organizational units responsible for various asset classes, modes, or work types; 4. Identify needs for additional data collection, data management, and analytic tools to support the selected measures; 5. Design communication devices with formats appropriate to the target audiences; and 6. Document measure definitions and procedures. viii Volume I: Research Report

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TRB's National Cooperative Highway Research Program (NCHRP) Report 551: Performance Measures and Targets for Transportation Asset Management describes the research effort associated with production of the report and provides the current state of practice on the use of performance measures, principally in the context of transportation asset management. In addition, the report introduces a framework for identifying performance measures and setting target values. The report appendixes contain examples of performance measures and targets. The report is designed to help transportation agencies apply the concepts of performance management to their asset management efforts.

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