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5 with maintenance activities. Promising cost determina- Providing an ability to compare maintenance costs between tion practices were identified for further investigation, and different geographic areas and/or highway functional classes, an initial full cost framework was developed. which may in turn provide insight into the influences of 4. Preparation of a detailed work plan for developing the other, external effects on costs (e.g., road characteristics, traf- full cost determination process leveraging the initial full fic volume and composition, terrain altitude, and weather). cost framework developed in Task 3 and an enhanced Performing the calculation annually may help agencies understanding of the data and practices at the state DOTs improve level of service (LOS) based budgeting models contacted. and reduce reliance on prior-year expenditures during 5. Execution of the work plan and development of the full budget development cycles. cost determination process. This task focused on working Help agencies to identify training needs for maintenance with a number of state DOTs to obtain the necessary data field personnel and supervisors in the area of recording man and perform the full cost calculation for all maintenance hours, equipment usage, and material consumption. activities at the agencies. This task resulted in the refine- ment of the full cost determination process, the identifica- 1.4 Introduction to Tenets tion of options and exceptions for each step of the process, of Full Cost Determination and the development of a prototype spreadsheet tool used to support the full cost calculations performed in this task. Several tenets form the foundation of the results of this 6. Documentation of the full cost calculations performed project. These tenets are listed below; explanations of each in Task 5. The full cost calculations were documented in tenet and implications for the study's findings and recom- mendations are provided in Chapter 2. a way that will help agency personnel to use the full cost determination process at their agency and understand 1. The recommended full cost determination process should the process, level of effort, who should be involved, poten- build on the existing management practices, procedures, tial sources of information, and the options and deci- data, and systems typically found within state DOTs. sions that must be considered at each step. 2. The focus of this study is state DOTs; however, its findings 7. Submittal of a final report that documented the entire may be useful to other transportation agencies with a research effort and included a stand-alone document maintenance program. describing the process developed (provided as the 3. The focus of this study is highway maintenance programs; attachment). however, the basic principles of full cost determination may be applied to other agencies' line programs. 1.3 Applications of the Full Cost 4. The recommended full cost determination process should Determination Process encompass all activities performed by an agency's main- tenance organization and program. The benefits of performing the full cost calculation go 5. Maintenance activity full cost results should be ex- beyond providing a critical input into agency decisions regard- pressed as either total or unit cost rather than overhead ing in-house versus contractor performance of any particular percentages. maintenance activity. Gathering the necessary data and per- 6. The results of the full cost determination process apply forming the calculation requires a thoughtful review of the to each agency individually; comparisons of full costs maintenance program structure and activities, as well as the between agencies are not meaningful for several reasons distribution of expenditures between activities and between and should be avoided. the different elements of cost. Additional applications and 7. The recommended full cost determination process should benefits of performing the full cost calculation may include: ensure complete coverage of an agency's expenditures, with no overlaps, duplicates, or gaps. The identification of potential improvements to the main- 8. A practical and consistent full cost determination process tenance program structure and activities, as well as the is more useful than one that is complex and variable, processes and management systems used for recording even if the latter delivers greater accuracy in some cases. accomplishments and expenditures associated with each 9. Agency application of the full cost determination process activity (e.g., the identification of opportunities to estab- will benefit significantly from the collaboration of main- lish separate in-house versus contractor activities in order tenance with other units within the DOT. to improve the allocation of contract support and admin- 10. Utilization of year-end reports and data simplifies the full istration expenditures, recording of accomplishment data, cost determination process and reduces the chances of and full unit-cost calculations). errors and inconsistencies.