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TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2011 www.TRB.org N A T I O N A L C O O P E R A T I V E H I G H W A Y R E S E A R C H P R O G R A M NCHRP REPORT 706 Subscriber Categories Administration and Management â¢ Data and Information Technology â¢ Highways Uses of Risk Management and Data Management to Support Target- Setting for Performance-Based Resource Allocation by Transportation Agencies CAMBRIDGE SYSTEMATICS, INC. Chicago, IL Research sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration
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 Boardâs 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 706 Project 8-70 ISSN 0077-5614 ISBN 978-0-309-21362-2 Library of Congress Control Number 2011939562 Â© 2011 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION 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. The members of the technical panel selected to monitor this project and to review this report were chosen for their special competencies and with regard for appropriate balance. The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturersâ names appear herein solely because they are considered essential to the object of the report.
The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars 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 technical 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 Academy 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 achievements of engineers. Dr. Charles M. Vest 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 Academyâs purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, 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 Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transporta- tion Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Boardâs varied activities annually engage about 7,000 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 individu- als interested in the development of transportation. www.TRB.org www.national-academies.org
CRP STAFF FOR NCHRP REPORT 706 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs Andrew C. Lemer, Senior Program Officer Sheila A. Moore, Senior Program Assistant Eileen P. Delaney, Director of Publications Hilary Freer, Senior Editor NCHRP PROJECT 8-70 PANEL Field of Transportation PlanningâArea of Forecasting Martin E. Kidner, Wyoming DOT, Cheyenne, WY (Chair) R. Gregg Albright, Parsons Brinckerhoff, Sacramento, CA Rabinder K. Bains, Federal Highway Administration, Washington, DC John W. Fuller, University of Iowa, Iowa City, IA Colleen A. Kissane, Connecticut DOT, Newington, CT Patrick E. Morin, Washington State DOT, Olympia, WA Jack R. Stickel, Alaska DOT and Public Facilities, Juneau, AK Valentin G. Vulov, Georgia Regional Transportation Authority, Atlanta, GA David Kuehn, FHWA Liaison Rolf R. Schmitt, FHWA Liaison Martine A. Micozzi, TRB Liaison Thomas Palmerlee, TRB Liaison AUTHOR ACKNOWLEDGMENTS The research reported herein was performed under NCHRP Project 8-70 by Cambridge Systematics. Randall Halvorson was the Principal Investigator. The other authors of this report are Erik Cempel, Anita Vandervalk, Joseph Guerre, Kelsey Ahern, and Kimberly Hajek. C O O P E R A T I V E R E S E A R C H P R O G R A M S
NCHRP Report 706 describes how risk management and data management may be used by transportation agencies to support management target-setting for performance- based resource allocation. As the final product of a second phase of NCHRP Project 08-70, âTarget-Setting Methods and Data Management to Support Performance-Based Resource Allocation by Transportation Agencies,â this report supplements NCHRP Report 666 published in 2010. Transportation agencies at all levels of government are embracing performance measurement to improve agency efficiency and accountability. Setting per- formance targets generally entails balancing competing objectives and dealing with political implications in a context of uncertainties about economic conditions, fiscal con- straints, climate conditions, customer demands, and more. Good data on the transporta- tion system and its performance provides the information managers need to set targets, but good management depends on clear understanding of the risks that future conditions will differ significantly from what todayâs best information suggests. Performance targets and consequent resource-allocation decisions established with such understanding are more likely to ensure that the agency and the transportation system perform well. This report presents advice and illustrative case studies, in the form of primers, on using risk management and data management practices in support of performance-based resource allocation, and specifically performance-target setting. The information will be useful to senior agency managers seeking to develop and improve their performance-management practices. DOTs and other transportation agencies are increasingly using performance measure- ment to guide their resource allocation decisions for operations, asset management, capital investment, planning, and policy development. Much work has been done on defining and applying performance measures, but relatively little attention has been given to the specific problem of setting performance targets. Setting targets within the context of a DOT gener- ally entails balancing competing objectives and considering the perspectives of multiple stakeholder groups. Unless performance targets are set with sound and defensible bases, and with the concurrence of key decision makers and stakeholders, the effectiveness of performance measurement as a management tool to improve agency efficiency and accountability is almost certain to be compromised. This report is the product of an extension of NCHRP Project 08-70, initially undertaken to develop a more comprehensive set of methods for establishing performance targets to guide resource allocation decisions in all aspects of DOT management, from planning and policy development to project implementation and operations. The research was designed to draw on a range of private- and public-sector examples to extract lessons that would be instructive and adaptable to transportation agencies. Because effective performance F O R E W O R D By Andrew C. Lemer Staff Officer Transportation Research Board
measurement relies on good data, the research was designed also to describe data manage- ment systems and institutional relationships that can support DOT use of performance- based resource allocation. The specific objectives of the research were to (1) describe a comprehensive framework and set of methods (a) to analyze opportunities to improve the multiple-objective performance of transportation systems within the context of broader societal goals and (b) to set specific performance targets to guide agency policies, plans, and programs; (2) detail the factors that influence target setting and the success of performance-based resource allocation systems and explain how agencies may successfully design, implement, and use such systems; and (3) analyze the data and information needs, data acquisition and management systems, and institutional relationships required to support successful performance-based resource allocation systems. Case studies of organizations that use performance-based resource allocation and other examples illustrate methods for presenting performance information to decision makers and other stakeholders and decision-support systems that can provide this information. A team led by Cambridge Systematics conducted the research. The work started with a review of current private- and public-sector practices in using performance-based resource-allocation to investigate the key elements of the performance-measurement and resource-allocation processes and the tools, data-management systems, and institutional relationships needed to support these elements. The research team next sought to describe factors likely to influence the setting of performance targets in transportation agencies, such as agency scope and organization; agenciesâ use of forecasting; availability, precision, and reliability of data within the agency; agenciesâ experience using benefit-cost analysis and other evaluation methodology; and stakeholdersâ perceptions and expectations. Data man- agement systems and institutional relationships to support performance-based resource allocation were given particular attention in the research. NCHRP Report 666: Target- Setting Methods and Data Management to Support Performance-Based Resource Allocation by Transportation Agencies, published in 2010, presented guidance and case-study reports on how agencies can use performance target setting as a factor affecting resource alloca- tion and on data management practices to support such efforts. A web-only document supplementing NCHRP Report 666 is available at http://126.96.36.199/cmsfeed/TRBNet ProjectDisplay.asp?ProjectID=2147. Recognizing that performance target setting must be done within a context of uncertainties about economic conditions, fiscal constraints, climate conditions, customer demands, and more, the NCHRP project panel asked the research team to undertake further case studies and analysis of the particular ways that agencies can use risk management in performance- based resource allocation and target setting, and supportive data sharing, tools, and integra- tion practices. This report presents primers on using risk management and data management practices supplementing NCHRP Report 666. The first primer describes a process for trans- portation agencies to systematically assess and address risks and provides examples from case studies, organized by the steps of the process, to illustrate how state DOTs are using risk management to support funding decisions. The second primer addresses information technology issues and challenges regarding data sharing, and integration.
C O N T E N T S Note: Many of the photographs, figures, and tables in this report have been converted from color to grayscale for printing. The electronic version of the report (posted on the Web at www.trb.org) retains the color versions. P A R T 1 Applications of Risk Management to Support Performance-Based Resource Allocation 1-1-1 Chapter 1 Introduction 1-1-1 1.1 Introduction to Performance-Based Resource Allocation 1-1-3 1.2 Selected Case Studies 1-2-1 Chapter 2 Risk Management Process 1-2-1 2.1 Establish Risk Tolerances 1-2-2 2.2 Identify Threats/Hazards 1-2-4 2.3 Assess Impacts or Consequences 1-2-7 2.4 Identify Potential Mitigation Strategies/Countermeasures 1-2-8 2.5 Prioritize Strategies and Develop Mitigation/Management Plan 1-2-9 2.6 Measure and Monitor Effectiveness 1-3-1 Chapter 3 Risk Management Implementation 1-3-1 3.1 GDOT Pavement and Bridge Preservation Risk Assessment 1-3-1 3.2 Mn/DOTâs Bridge Programming Risk Assessment 1-3-2 3.3 TxDOTâs Statewide Freight Resiliency Plan 1-3-2 3.4 Washington Stateâs Bridge Retrofit Risk Assessment 1-3-2 3.5 Caltransâ Bridge Seismic Safety Retrofit Program 1-3-2 3.6 Summary of Common Themes P A R T 2 Use of Information Technology Tools and Data Management Practices to Support Data Sharing and Integration in Transportation Agencies 2-1-1 Chapter 1 Introduction 2-2-1 Chapter 2 IT Issues that Impact Data Sharing and Data Integration 2-2-1 2.1 High Impact 2-2-13 2.2 Medium Impact 2-2-20 2.3 Low Impact 2-3-1 Chapter 3 Risk Management 2-3-1 3.1 Washington State Department of Transportation 2-3-2 3.2 Minnesota Department of Transportation 2-A-1 Appendix A Acronyms, Abbreviations, and Initialisms