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Life-Cycle Cost Analysis for Management of Highway Assets (2016)

Chapter: CHAPTER FIVE Findings, Conclusions, and Future Research Needs

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Suggested Citation:"CHAPTER FIVE Findings, Conclusions, and Future Research Needs." National Academies of Sciences, Engineering, and Medicine. 2016. Life-Cycle Cost Analysis for Management of Highway Assets. Washington, DC: The National Academies Press. doi: 10.17226/23515.
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Page 26
Page 27
Suggested Citation:"CHAPTER FIVE Findings, Conclusions, and Future Research Needs." National Academies of Sciences, Engineering, and Medicine. 2016. Life-Cycle Cost Analysis for Management of Highway Assets. Washington, DC: The National Academies Press. doi: 10.17226/23515.
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Page 27

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24 CHAPTER FIVE FINDINGS, CONCLUSIONS, AND FUTURE RESEARCH NEEDS The objective of this synthesis project was to develop an inventory of quantitative asset-level, project-level, or corri- dor-level processes or models for predicting life-cycle costs associated with the preservation and replacement of high- way assets, through a literature review, nationwide survey of highway agencies, and case examples that documented specific highway agency experiences with life-cycle cost analysis (LCCA). A thorough literature search allowed for the documenta- tion of available LCCA tools by application level (asset, proj- ect, and program or network level) and it was noted that some states have taken steps to customize LCCA tools to better reflect their practices and asset performance over time. An overview of the steps taken by Florida Department of Trans- portation to customize and calibrate tools to its field experi- ences and measurements was documented in a case example. Building on the literature review findings, a national sur- vey of state highway agencies was conducted. The primary purpose of the survey was to identify LCCA applications within state highway agencies and to determine challenges and data needs as provided by the survey respondents. In addition, the survey was viewed as a screening tool to identify those state highway agencies that are applying LCCA and that were interested in participating in the case development stage of the study. The survey was sent to members of the AAS- HTO Standing Committee on Asset Management, and exten- sive efforts were made to increase survey participation. In the end, 41 state highway agencies participated in the survey. The survey revealed that 71% of respondents are applying LCCA to their assets, with 96% of those respondents applying LCCA to pavements and 63% to bridges. Other LCCA applications were noted, including culverts, tunnels, and traffic signs. The most noted challenges with data and models needed for LCCA were estimating user costs, developing or identifying dete- rioration models that reflect asset performance in the field, capturing uncertainty and risk within LCCA, incorporating resilience and safety goals within LCCA, and modeling the remaining service life of assets. Five case examples were developed that document LCCA efforts and methods employed by four state highway agen- cies and a Public–Private Partnerships (P3) concessionaire. Information was documented on the efforts made by Florida DOT to calibrate deterioration curves to better align with field conditions and bridge performance in the state, resulting in the delay of maintenance activities owing to higher-than- anticipated performance ratings. Utah DOT’s pavement man- agement program was also documented, including “A Plan for Every Section of Road” and the efforts made to document the return on investment expected from increased pavement man- agement budgets. Efforts made by Washington State DOT to develop an owner’s manual/maintenance schedule concept to help improve maintenance completion rates and convey maintenance requirements to planning, design, and construc- tion staff. The experience of Minnesota DOT (MnDOT) to develop a robust inventory and condition rating system for culverts was also documented. MnDOT recognizes the need for such a program to support LCCA. Finally, the experience of a P3 concessionaire and LCCA was documented, noting the holistic system view of assets from right-of-way to right- of-way as compared with asset-class LCCA. FINDINGS In general, the benefits of LCCA appear to be recognized by state highway agencies and have been applied extensively to support pavement management and, to a lesser extent, bridge management. When further probed as to the “completeness” of LCCA, many agencies reported struggling with several costs including user and maintenance costs. When review- ing the data requirements affiliated with calculating user costs, it is evident that the 20 pieces of information needed to generate user costs within the most commonly used soft- ware among highway agencies may be a hindrance. Some agencies have begun to realize the importance of good main- tenance records that allow for estimation of costs associated with a range of maintenance approaches and have begun to invest in data collection and tracking systems that will ease the accumulation of such costs in the future. Customizing and calibrating nationally distributed mod- els for LCCA also appears to be an activity that some high- way agencies have initiated. Similar to efforts required to generate costs, agencies have expended resources to calibrate deterioration curves to better align with their field inspection reports, which in the case of Florida DOT resulted in large cost savings resulting from the refinement of recommenda- tions for major rehabilitation or replacement of assets that were not warranted.

25 Although the primary applications of LCCA are reported for pavements and bridges, it is important that efforts be made to work with state highway agencies to improve appli- cations of LCCA to these assets. Survey results and inter- views with highway agency representatives noted the lack of clarity or use of significant costs within LCCA, meaning that more education, data sources, and information may be needed to accurately apply LCCA to pavements and bridges before agencies can expand its application to ancillary assets. FUTURE RESEARCH NEEDS Two primary research needs were identified through this study effort. The first is the need for additional models— potentially simplified models—to model LCCA of assets other than pavements and bridges. In addition, guidance is needed to allow for the full inclusion of all costs—includ- ing user, agency, and maintenance costs in LCCA—as many noted the lack of user and maintenance costs within their LCCA models. Simplified models may also support the idea of a tiered approach to LCCA in that assets that are not expected to have intensive maintenance schedules and will have relatively short life spans may not require the level of detail in models such as RealCost. Second, the need to house the range of information and models within a single guidance document will greatly help to improve LCCA implementation. This document could be similar to TRB’s Highway Capacity Manual, which serves as a resource for transportation profession- als on the topic of highway operations and level of service modeling. Professionals need a similar resource to bring together peer-reviewed research and modeling approaches for LCCA for multiple asset types, systems analysis tech- niques, and default or example data sets to bridge gaps in data that may hinder LCCA application. The additional benefit to a comprehensive guide for LCCA that reflects a holistic systematic view is the potential ease of incorpora- tion by educational professionals into undergraduate cur- riculum to expand the knowledge and use of LCCA by all levels of engineers.

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TRB's National Cooperative Highway Research Program (NCHRP) Synthesis 494: Life-Cycle Cost Analysis for Management of Highway Assets documents the state of the practice of life-cycle cost analysis (LCCA) and risk-based analysis into state highway agencies' asset management plans for pavements and bridges on the National Highway System. The objective of this project was to develop an inventory of quantitative asset-level, project-level, or corridor-level processes and models for predicting life-cycle costs associated with the preservation and replacement of highway assets. The report includes a literature review, a survey of highway agencies, and case studies that document specific highway agency experiences with LCCA.

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