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OCR for page 34
34 cost. Additional applications and benefits of performing 4.2 Suggestions for the full cost calculation may include Additional Research Identifying potential improvements to the maintenance Maintenance program structure, activity definitions, and program structure and activities as well as the processes management systems. It is clear from this study that the abil- and management systems used for recording accomplish- ity to determine the full cost of any particular maintenance ac- ments and expenditures associated with each activity tivity is influenced by maintenance program structure, activity (e.g., identification of opportunities to establish separate definitions and units of accomplishment, the quality of prac- in-house versus contractor activities in order to improve tices for recording expenditure elements, and the types and fea- the allocation of contract support and administration ex- tures of agency management systems. There is no doubt that penditures, recording of accomplishment data, and full certain program structures, activity definitions and units of unit-cost calculations). accomplishment, practices, and management systems lend Providing an ability to compare maintenance costs between themselves to more accurate full cost calculations than others. different geographic areas and/or highway functional classes, Research to identify such characteristics might help agencies which may in turn provide insight into the influences of make adjustments to their maintenance programs and man- other, external effects on costs (e.g., road characteristics, agement systems in order to enhance their ability to calculate traffic volume and composition, terrain altitude, and and understand the full costs of maintenance activities. weather). Indirect cost allocation procedures. A comprehensive Performing the calculation annually, which may help agen- review of state DOT indirect cost allocation plans might cies improve LOS-based budgeting models and reduce be a useful supplement to this study. These plans document reliance on prior-year expenditures during budget develop- the approaches used by state DOTs to allocate allowable ment cycles. indirect costs to projects and activities that are eligible for Helping agencies to identify training needs for maintenance federal participation and may include additional approaches field personnel and supervisors in the area of recording man that could be used in the full cost determination process. hours, equipment usage, and material consumption. Maintenance delivery decisions. The process developed during this project provides transportation agencies with a Finally, the purpose of the full cost determination process de- methodology for determining the full cost for performing a veloped in this project is to enable an agency to estimate its full particular maintenance activity. The primary application of cost for performing any particular maintenance activity. This this process is to provide input to agency decisions regarding report includes documented examples of the full cost calcula- in-house versus contractor delivery of maintenance. A logi- tion for six DOTs. However, comparing various elements of cal next step would be to work with one or more agencies these calculations should be avoided. Each agency differs with considering contracting maintenance activities, calculating respect to overall agency structure and scope, organizes its their full cost using the process developed in this project, and maintenance program differently, has different numbers and comparing it to contractor prices, then identifying and describ- definitions of maintenance activities, and differs in its treatment ing the other key considerations when making this decision. and classification of different expenditure types based on these The critical point here is that although the ability to assess and characteristics as well as its information systems environment. compare in-house versus contractor costs is very important, As a result, comparing full costs, full unit costs, program sup- it is not the only issue, and research that explores the complete port multipliers, enterprise support multipliers, and/or over- range of considerations associated with the maintenance head rates of the calculations documented here, or undertaken delivery question would be very useful to the transportation externally, is both meaningless and futile. community.