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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Suggested Citation:"3 Business Case Methodologies." National Academies of Sciences, Engineering, and Medicine. 2020. Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations. Washington, DC: The National Academies Press. doi: 10.17226/25946.
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Below is the uncorrected machine-read text of this chapter, intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text of each book. Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.

32 3 BUSINESS CASE METHODOLOGIES 3.1 INTRODUCTION A business case is an evidence-based justification for a proposed project or policy investment. It is presented in a structured manner that enables decision-makers to quickly assess the expected benefits from the investment against the organization’s objectives and make informed investment decisions. Business cases are “living documents” that are updated throughout the investment’s life cycle, including during the planning, design, delivery and operation stages. This guidance emphasizes the business cases developed during the planning stage. It focuses on the creation of sufficient evidence to select a CV investment option for further consideration. For this document, the options analysis is limited to comparing the CV infrastructure option and the status quo option. The remainder of this chapter presents step-by-step guidance for agencies on how to construct a business case for an identified CV investment (referred to as an option). The guidance presented is a modified version of the Five Case Model developed by HM Treasury, the Welsh Government, and the UK Office of Government Commerce. It is also heavily influenced by the practical implementation of the Five Case Model adopted by Metrolinx in Ontario, Canada (Metrolinx, 2018). 3.2 CREATING AN EFFECTIVE BUSINESS CASE FOR CV TECHNOLOGY INVESTMENTS Figure 3-1 presents an overview of the steps involved in constructing a business case. The business case rests on the arguments advanced around four sub-cases: the Strategic Case, the Economic Case, the Financial Case, and the Implementation Case. The Strategic and Economic Cases advance arguments pertaining to the rationale of the investment, while the Financial and Implementation Cases examine the ability of an organization to implement the investment. The remainder of this section describes each of the process steps involved in developing the business case. The business case guidance provided in this document is illustrated using a hypothetical example of a V2I deployment scenario involving preparing ITS and signal infrastructure within the priority corridors of a DOT. The illustration is progressively built to cover the details articulated in the various sections of the guidance. 3.2.1 Framing the Problem Statement The problem statement provides a concise statement that highlights the case for change. Table 3-1 illustrates the considerations for framing the problem statement. An important aspect of this initial step for CV investments is to compare and contrast the expected outcomes with the status quo option. Note EXAMPLES OF CANDIDATE CV V2I PROJECTS FOR WHICH BUSINESS CASE ANALYSIS MAY NEED TO BE COMPLETED – Prepare ITS and Signal Infrastructure in Corridor A for CVs. – Upgrade Network Connectivity from all Field Locations to Traffic Management Centers (TMCs) in District X. – Roll out Smart Work Zone CV application for all projects in Region 1.

33 that the status quo option may include consideration of other non-CV related strategies (e.g., TSMO strategies) over the planning period that are also expected to address the problems being articulated. Figure 3-1. The Business Case Structure (Metrolinx 2018) Problem Statement Defines the problem and the corresponding goals and objectives to addressed. Investment Option(s) Articulates the investment option(s) to be tested against the goals and objectives. Strategic Case How does the investment achieve the strategic goals and objectives? Financial Case What are the financial implications for the agency? Economic Case What is the investment’s overall value to society? Implementation Case What risks and requirements must be met for delivering and operating the investment? Business Case Summary Present core findings from each section along with recommendations for future development.

34 Table 3-1. Steps for Defining the Problem Statement Step Description of Activity Define Case for Change Identify key external and internal drivers that support the case for change. Compare and contrast with the status quo scenario over the investment analysis period. Articulate Strategic Value Construct a value proposition statement identifying the DOT customer, service provided, the specific outcomes targeted by the investment, and the problem or opportunity it addresses. Describe how addressing the problem or opportunity aligns with DOT strategic planning goals and objectives; making this connection ensures maximum “buy in” for the proposed CV investments. For example, for CV investment options targeting improved safety, the DOT’s the Long Range Visioning Document (e.g., Vision Zero), the Long Range Transportation Plan (LRTP) or Regional Transportation Plan (RTP), Transportation Improvement Program (TIP), the State Highway Safety Plan (SHSP), the Highway Safety Improvement Program (HSIP), or those of federal funding program like the National Highway Performance Program can be referenced. For CV investments targeting mobility, connections can be made to the LRTP, the TIP, Congestion Management Plan, ITS and Operations Plan, or TSMO Plan (if it exists). Identify Relevant Experience Articulate experience of the DOT in addressing the problem or opportunity. Experience gathered through smaller scale pilot projects or CV test beds operated by the DOT or other entities or simulated exercises can be used to provide evidence of experience. Illustrative Problem Statement for SPaT Implementation on Priority Corridors of DOT ABC An analysis of on-time performance along heavy bus routes identified six priority arterial corridors in Region X as good candidates for deploying the TSP V2I application. These corridors are currently experiencing significant schedule delays within their bus transit fleet—schedule reliability is eight to ten percentage points below target. The socio- demographic growth patterns on these corridors suggest travel demand (both passenger and freight) will continue to outstrip capacity and lead to growing congestion and safety issues over the next 10 years. Because of these issues, winter maintenance services offered by the DOT ABC’s fleets are also expected to be affected along these corridors, further exacerbating the safety problems on the corridors. The DOT proposes to restore the schedule reliability of the bus transit service along these corridors using the proposed CV investments to enable (1) the TSP and Snowplow priority applications immediately and (2) enhance motorist and road user safety in the out years as market penetration of suitably equipped vehicles increases. The commuters who live along these corridors rely on this service to access jobs, education, and health services.

35 When compared to other commercially available TSP solutions, the CV infrastructure- based TSP solutions offer greater reliability due to direct peer-to-peer communications, superior first cost benefits and approximately 50 percent improvement in travel time reliability. The DOT also proposes to use the CV infrastructure investments made to grant priority to snowplows during adverse winter weather events to clear the roads quicker and reduce adverse winter weather crashes by 10 percent. These crashes are a significant source of non-recurring congestion for users of the roadway and freight services operated along the corridor. Taken together, the improved schedule reliability of the buses and reduced number of crashes are considered superior to the status quo option. In addition, the CV infrastructure is planned to be leveraged for safety-critical applications in the future. Therefore, the TSP and Snowplow Priority V2I applications, as envisioned for these corridors, require installation of DSRC-based RSUs and OBUs along the roadside and in vehicles, respectively. Approximately 200 RSUs are planned to be installed and 30 buses and snowplows were planned to be retrofitted. The DOT has experience deploying these applications and the necessary CV environment to support them based on its previous smaller scale pilot studies. In addition, the DOT is also a part of the national Cooperative Automated Transportation Coalition—a focal point for federal, state, and local government officials; academia; industry; and their related associations to address critical program and technical issues associated with these and other V2I deployments. Experiences shared through the coalition indicate that the proposed solutions will be able to deliver the desired objectives of the agency. 3.2.2 Investment Options In this section, the options for evaluation in the strategic, economic, financial, and implementation cases are developed. Table 3-2 illustrates the key steps and activities for developing investment options for further analysis. Table 3-2. Steps for Defining the Problem Statement Step Description of Activity Identify Strategic Mechanisms Set out the key changes in the transportation network that could address the given problem. Changes should be mapped to the following categories: • Rules, regulations, and policies. • Travel behavior. • Transportation services. • Transportation infrastructure/technology. Changes to transportation infrastructure (e.g., signal controllers) and technology (telecommunications) are common to several CV infrastructure investments to enable V2I applications. Some changes to rules, regulations, and policies are also warranted. Option Development Identify options that can address the problem. For the purposes of this guidance, investment options must include the proposed CV investment option and the status quo option. The status quo option defines the highway improvements planned in the absence of the V2I application

36 solution to address the identified problem or opportunity over the planning period. Explain the origins of the option and how the option addresses the problem and which strategic mechanisms it will use. Illustrative Investment Options for SPaT Implementation on Priority Corridors of DOT ABC Option 1: Adaptive Signal Priority Systems based on conventional state-of-the-art TSP and emergency vehicle preemption (EVP) technology (for snow plow priority). Option 2: Adaptive and Signal Control using the TSP and Snowplow PriorityV2I applications and DSRC technology and Snowplow Priority based on DSRC implementation. 3.2.3 The Strategic Case The strategic case establishes why an investment should be pursued from a strategic standpoint. It determines the value of addressing a problem or an opportunity based on the goals, plans, and policies of the agency for a given region. It also evaluates the options against specific objectives to be achieved for each goal area to formulate a clear narrative on how the CV investment can address the problem or opportunity. The strategic case also articulates the risk to the performance of the investment option. Table 3-3 illustrates the key considerations involved in making the strategic case for a given investment. Table 3-3. Key Considerations for Developing the Strategic Case Step Description of Activity Strategic Evaluation by Goal/Objective Assuming the typical structure of a planning product (e.g., LRTP/RTP, Congestion Management Plan, SHSP) that articulates a vision, goals/outcomes, and objectives for each goal area, assess how the CV investment option and status quo performs against the objectives established in the plan. Articulate how each option achieves the strategic value proposition based on performance against each goal/outcome. Strategic Evaluation by Progress toward Value Proposition • Compare the CV investment option and status quo option and identify factors that lead to different performance between options. • Identify key risks and uncertainties that may limit the CV investment option from delivering the value. • Identify key recommendations for the CV investment option. Strategic Evaluation Summary of Options • Identify key factors that lead to different performance between the CV investment option and the status quo option. • Identify key risks and uncertainties that may limit the CV investment option from achieving the performance noted in the evaluation. • Identify key recommendations for the CV investment option.

37 Table 3-4 presents the sample goals and specific objectives for CV signal control applications (RLVW or TSP) and how they can be connected to the safety and mobility goals established in a DOT’s existing strategic plans. Table 3-4. Example Goals, Objectives, and Performance Measures from Long range Transportation Plans that are Relevant for CV Investment Analysis Typical LRTP Goal Area Goals and Connections to a DOT’s Strategic Planning Products Specific Objectives from the CV Investment Option (Signal Control Applications) Safety Vision Zero: Fatality-free multimodal transportation system • Implementing a RLVW V2I application will reduce fatalities due to red light violations by 25 percent along identified corridors. Mobility LRTP and TSMO: Congestion- free transportation system • Implementing the TSP application will reduce travel time along identified corridors by 40 percent. The sample narrative structure for each option under consideration should include the following: • A statement of the outcome under consideration and how it contributes to the goal articulated in the relevant strategic planning products (LRTP/RTP, State Highway Safety Plan, Congestion Management Plan, Corridor Plan, TSMO Plan). • A statement of each objective. • A summary of the strategic mechanisms used by the CV investment option and what key actions are included. • A summary of the performance of the CV investment option against each performance measure. • The extent to which the CV investment option supports the realization of the goal. • A statement based on synthesizing all outcomes/goal performance (one per set of objectives under each goal). Illustrative Strategic Evaluation by Objective for SPaT Implementation using DSRC Option (Option 2) for Priority Corridors of DOT ABC Based on preliminary engineering analysis, the proposed CV investments directly address two stated agency goal areas. The V2I TSP solution is expected to improve the travel time reliability of the bus fleet by 6 percent—three times more than the conventional technology solution. This will help the DOT accomplish its regional multimodal mobility and accessibility objectives along these arterial corridors. Further, the Snowplow Priority V2I application is expected to reduce crashes on this corridor by 10 percent, also furthering the DOT’s safety goals.

38 Illustrative Strategic Case Evaluation Summary for SPaT Implementation for Priority Corridors of DOT ABC The TSP and Snowplow priority implementation within the CV environment using DSRC, RSUs, and OBUs offers superior benefits over the closest, state-of-the-art non-CV-based technology in the following ways: (1) lower first cost and life cycle maintenance costs; (2) better technology solution in terms of features , offering both adaptive signal control and signal coordination in real-time; and (3) ability to take advantage of the upgraded signal controllers capable of delivering the SPaT message for TSP and Snowplow priority to enable future V2I safety applications (e.g., RLVW). DOT ABC has the necessary IPv6-ready optical fiber, backhaul communication network to support a hub architecture—a strategic component of the CV environment—which can be leveraged. A key risk related to the investment option is the choice of the DSRC technology. C-V2X could emerge as a leading wireless standard in the future and may be ubiquitous within CVs, making the proposed DSRC investment obsolete. However, considerable weight must be given to the available standard of the day—DSRC—which has been tested successfully within the DOT’s pilot programs. This technology can deliver immediate benefits in terms of the bus fleet’s travel time reliability and the safety of roadway users—significant factors that tip the scales in favor of adopting this technology to realize the Day 1 benefits afforded by the proposed V2I applications in terms of lives and time saved. Moreover, working with this technology within the controlled setting of DOT fleets offers a significant learning experience to DOT staff and enhances the DOT’s reputation as a leader in the field. Nevertheless, the economic and financial case analysis must document the impacts of this technology choice on the agency’s capital outlays and the benefit/cost ratio as part of the business case presentation within an “end of life term” of 10 years. 3.2.4 The Economic Case The economic case establishes “the societal benefits” of the investment using a standard economic analysis approach. It assesses the costs and benefits of the proposed options to individuals and society at large. The economic appraisal spans the entire investment lifecycle—to include initial capital investments, operating and maintenance costs, and replacement costs. This appraisal can also include the economic consequences of risks and uncertainties using scenario analyses. Table 3-5 illustrates the considerations involved in making the economic case for a given investment. Table 3-5. Key Considerations for Developing the Economic Case Step Description of Activity Additional Considerations 1. Define the Scope of Economic Analysis Select the recommended list of V2I applications for the economic case analyses. The option may include a single application, a bundle of applications, or basic infrastructure upgrades to support applications. When two or more applications are selected, the bundle should be considered as a single option to account for

39 Step Description of Activity Additional Considerations opportunities in cost and benefit efficiencies. 2. Establish the Economic Analysis Framework Type of Analysis: Benefit-cost analysis (BCA). A BCA tool has been developed as part of this research to perform deterministic analysis for five popular V2I applications. It is described in Appendix B. Analysis Period: Select an analysis period associated with the life cycle of the hardware infrastructure. The typical TSMO planning period of 15 years may be used. Discount Rate: Use a real discount rate as mandated by the DOT. The Office of Management and Budget (OMB) Circular A-94 Appendix C publishes real and nominal discount rates for different analysis periods. The BCA tool developed as part of this research can be extended to any V2I application by adjusting the established cost and benefit categories. Although this tool is deterministic in nature and is meant to be used for a single V2I application at a time, it can be used to understand impacts of the staged or sequenced applications. It can also be used to perform sensitivity analyses to understand the economic consequences of uncertainties associated with the timing of deployment of staged V2I applications, capital and operating costs, CV market penetration rates, expected benefits, benefits accrual year, and discount rates. More information is provided in sections B.2.5 and B.2.6 of Appendix B. 3. Capital Costs Estimate initial and renewal spending costs by year for all cost items, including RSUs, OBUs, backhaul network, back office infrastructure, CV application development and deployment, other hardware, and miscellaneous costs. Account for any cost efficiencies associated with bundling applications. Select the years of capital expenditure. Unlike in chapter 2 where ROM costs were used to determine if a business case analysis is needed, rigorous estimation of costs by CV component to be deployed to enable the V2I applications should be undertaken during this step to account for project- specific factors. 4. Operating and Maintenance (O&M) Costs Estimate recurring costs for system operating and maintenance costs. Typical annual O&M costs reported in the literature are in the range of 10 to 15 percent of the initial capital costs for the application under consideration. 5. CV Market Penetration Rate Estimate the time frame for advancing to different levels of market penetration for equipped public fleet and private CVs. 6. Benefits Appraisal Estimate and monetize the potential benefits offered by the option. Major categories include mobility (operational), safety, and environmental benefits. For application bundles, the

40 Step Description of Activity Additional Considerations total benefits can be greater than the sum of their parts. Select the years of benefits accrual calibrated to CV market penetration rates. 7. Summary Report benefit-cost ratio, annualized costs and net benefits, return on investment, and breakeven period. The sample narrative structure for each option under consideration should include the following: • A statement about the objective of the economic case. • A statement that defines the option with the recommended list of V2I investment opportunities selected for the economic analysis. • A statement regarding the parameters and assumptions used in the economic analysis, including the analysis period, discount rate, and CV market penetration rate. • A summary of the total and present value of costs, including the capital, operating, and maintenance costs, with an illustration indicating the anticipated timing of expenditures over the analysis period. • A summary of the anticipated quantitative impacts of benefit types, their monetized total and present value, and an illustration indicating the time of realization over the analysis period. • A summary of the findings of all scenario analyses conducted to evaluate risks and uncertainties. • A statement with all summary indicators, including net present value, benefit-cost ratio, return on investment, and breakeven period. • A statement with recommendations on the economic case of the selected option based on findings from the economic analysis.

41 3.2.4.1 Benefit-Cost Analysis Tool A benefit-cost analysis spreadsheet tool (BCA tool) has been developed to provide inputs to a DOT’s economic case. The tool helps document the following: • Target planning horizon and cost phasing options. • Inputs to quantify costs for the various cost categories for select applications, which are useful for extrapolating to the full set of applications presented in chapter 2. • Inputs to quantify benefits for each application. Outputs from the BCA tool include: • Annualized costs and net benefits. • Return on investment (ROI). • Year the investment breaks even (breakeven year). • Net present value of assessed benefits. The BCA tool examines each V2I application individually. Aggregated benefits of an application bundle would have to be estimated separately. Each V2I application has a distinct set of: • Benefits (external only), quantifiable and monetizable to the extent possible. • Benefits realization stream over the analysis time frame. • Costs incurred by year over the analysis time frame. The key inputs of the BCA tool are derived from this information. V2I Applications in the BCA Tool The BCA tool features five of the 23 V2I applications that state DOTs have deployed, are actively deploying, or are seriously contemplating for implementation in the near term using their existing or planned CV infrastructure investments. Figure 2-2 previously arrayed these applications derived from the pilots and test bed activities summarized in Table 2-3. The five applications are: • Curve Speed Warning (CSW), equivalent to Roadway Departure Warning (RDW) in the literature on benefits. • Incident Scene Work Zone Alerts for Drivers and Workers (INC-ZONE). • Intelligent Traffic Signal System (I-SIG). • Queue Warning (Q-WARN). • Speed Harmonization (SPD-HARM). Appendix B provides further definition of these applications. BCA TOOL The BCA tool developed as part of this project is a framework to organize costs and benefits over a planning horizon. Although developed for only 5 V2I applications for which a reasonable amount of data is available from literature, this MS Excel based tool is extensible to other applications for which data might emerge in the future. In this sense it can be considered more of a BCA framework. The tool can be used to consider simple, high-level economic analysis including scenario analysis for various CV investment options.

42 While selection of these applications was driven to an extent by the availability of benefit data from existing studies and pilot programs, the BCA tool’s five applications provide a reasonable cross-section of the types of V2I applications that agencies are interested in, and by extension, applications for which agencies may need to make an economic case. To help illustrate this, Table 3-6 summarizes the alignment of the five applications with the external benefits and roadway types of interest, indicating representation across all characteristics. Three applications are part of the USDOT ITS JPO Dynamic Mobility Applications Program (Q-WARN and SPD-HARM in the INFLO bundle, and I-SIG as the overarching application in the MMITSS bundle). Three applications are warning-based and provide location-specific benefits (CSW, INC-ZONE, and Q-WARN), while the other two applications (I-SIG and SPD-HARM) depend on higher levels of CV market penetration to achieve their network-wide benefits. The five applications can also be located along a sequencing strategy of CV infrastructure investment as an agency ramps up its commitment to CVs and the market penetration rate increases. For example, initial investment may be made to implement spot-location curve speed warnings and fleet-oriented elements of the MMITSS bundle such as TSP. Later in a 10-year investment timeline, further investment can begin to implement SPD-HARM and I-SIG in regions with sufficient roadside coverage and CV market penetration. Table 3-6. V2I Applications Analyzed in the BCA Tool CSW/ RDW INC-ZONE I-SIG Q-WARN SPD-HARM External Benefits Safety X X X X Mobility X X X X Environment X X User Cost Avoidance Roadway Type Urban Freeway X X X X Rural Freeway X X X Arterial X X X Roadway (Any Location) X X The BCA tool’s cost components will apply to additional applications not currently included. The methodology for computing benefits can also be applied to other applications. Therefore, the tool serves as a model template for further development as data for additional applications become available. Further information on how to use the BCA tool (e.g., organization and structure, benefit inputs, cost inputs, and the BCA calculation) is presented in Appendix B. A series of excerpts and illustrations (BCA tool screenshots) accompany the explanatory text.

43 BCA Model Confidence Because the CV infrastructure environment is nascent and rapidly evolving, the key inputs of the BCA tool will, at best be, estimates and forecasts. Consequently, these estimates and forecasts are reflected in the outputs of the BCA tool. Key inputs, such as market penetration rates, benefit realization rates and time frame, cost inflation, and traffic volumes, are expected to vary over a plausible range of values and over time, and the analyses should capture these variabilities. Rather than relying on single-point estimates; therefore, the interpretation of BCA outputs should be contingent on these variabilities and the underlying causes contributing to these risks and uncertainties. Some risks, particularly those pertaining to model parameters and variables, can be evaluated using scenario analysis. The most commonly used approach is what-if or a sensitivity analysis of the parameters and variables. Each variable is changed by a prespecified quantity, and the resulting change in benefits and costs is captured as a single-point estimate. If a probabilistic distribution can be assigned to the variable(s), techniques like Monte Carlo simulation can be used to develop resulting probabilities for benefit-cost outcomes, such as benefit-cost ratio or breakeven year. The sensitivity analysis, which evaluates how much change a model variable is estimated to cause on the benefit-cost outcomes, would inform decision-makers on whether to undertake a project, delay, or discontinue. Other risks, particularly those that cannot be codified as model variables and parameters directly (e.g., lack of competition or cyber hacking) can be incorporated using a “risk premium.” The risk premium, estimated based on the likelihood of occurrence and severity of the impact, is added to the total cost of the investment (alternatively, benefits or time frame) to obtain a full expected value. Illustrative Economic Case Summary for SPaT Implementation for Priority Corridors of DOT ABC A 10-year BCA was performed by DOT ABC for the proposed CV investments to enable TSP and Snowplow priority. The costs of the various components of the CV environment were assessed on a lifecycle basis. It included costs for the RSUs, retrofitting the fleet vehicles with OBUs to generate the Basic Safety and Signal Request Message, modifying the signal controllers to generate the required SPaT, MAP and Signal Status Messages, hardware costs, software costs, system integration costs, maintenance cost, and other costs such as project evaluation. DOT ABC leveraged its pre-existing backhaul communications infrastructure to implement a hub architectural design to control and coordinate the signals through a regional Traffic Operations Center. The total lifecycle costs for the CV investments were approximately $5.5M. The benefits from the TSP deployment were tied directly to the indirect economic benefits resulting from travel time savings. The travel time savings were monetized using average regional income ($/hour), an assumed average bus occupancy based on data obtained from DOT ABC’s transit partner, and average time savings (hrs) resulting from microsimulation of the corridor. No other vehicles in the traffic stream were assumed to be connected vehicles or AVs with connectivity to the infrastructure over the 10-year time period used for the analysis. The simulation exercise resulted in a net benefit of $2.5M over the 10-year period for the 30 bus fleet.

44 The safety benefits from deploying the Snowplow priority application were computed by considering the qualifying crashes per year that will be improved with the implementation of DSRC Snowplow priority application, The societal benefits of SPaT implementation for TSP and Snowplow priority were assessed. The DOT ABC identified potential safety benefits from upgrading signal controllers capable of delivering the SPaT message for TSP and Snowplow priority. The DOT installed SPaT technologies in 200 signalized intersections at $5.0 million with an anticipated O&M cost of 15 percent over the 10-year period. The DOT anticipates an immediate installation of hardware and software in snowplows and traffic signal systems. To quantify benefits, the DOT identified qualifying intersection crashes from the crash database that were caused by icy, snowy, or slushy road conditions. Such crashes were determined to be about 100 crashes per year. Rapid deployment of snow plowing is reported to reduce crashes by 10 percent. The DOT ABC estimated the installation of traffic signal and snowplow priority would result in potential savings of $7.1 million in crash costs over a 10-year period. The DOT ABC observed that the investment in SPaT technologies will break even in less than 8 years. 3.2.5 The Financial Case The financial case establishes “how much the investment will cost” a DOT. It focuses on the financial impact to the agency and funding arrangements (primarily the capital, operating, and revenue impacts and risks related to the investment). Table 3-7 illustrates the considerations involved in making the financial case for a given investment. Table 3-7. Key Considerations for Developing the Financial Case Step Key Consideration 1. Cost Structure for CV Investments For each CV investment option, develop cash flow of the required investment by year that includes capital costs, operating costs, replacement costs, and financing costs, if applicable. 2. Cost Avoidance due to CV Investments Identify cost items that could potentially be avoided by the CV investment option. For example, costs of capacity expansion, safety improvement, traffic incident management, law enforcement or other direct costs related to operating the system that are avoided due to the proposed investment. 3. Funding Sources for CV Investments Estimate the level of funding available for V2I investments from traditional revenue sources, including fuel taxes, passenger vehicle and truck registration fees, sales taxes, and permit fees. 4. Revenue Opportunities from CV Investments Identify opportunities that leverage the efficiency gains from V2I investments to raise additional revenues, such as transit ridership, electronic tolls, and road user charges.

45 Step Key Consideration 5. Alternative Funding Sources Identify alternative funding sources, such as grants, federal discretionary funds, or subsidies, if needed. 6. Evaluate Funding Risks Evaluate uncertainties associated with various funding sources. Evaluate the future impact of CV investments on future funding sources, such as a potential decrease in fuel taxes from increased use of alternative fuels or reduction in-vehicle registration and driver license fees due to increased use of AVs. Evaluate other risk factors, such as inflation indexing for revenue sources and legislative restrictions. 7. Financial Case Summary Provide a high-level summary of cost estimates, potential funding sources and shortfalls, uncertainties and risks, and strategies to mitigate them. The sample narrative structure for each option under consideration should include the following: • A statement about the objective of the financial case. • A statement summarizing all capital investment items and annualized operating and maintenance costs with an illustration of timing. • A summary of traditional federal, state, regional, and local funding sources for V2I investments. • A summary of supplementary funding through revenue opportunities from V2I investments and alternative funding sources. • A statement based on the analyses of potential risks due to uncertainties, the impact of V2I investments on traditional funding sources, and other risks. • A statement listing strategies and policy proposals for further consideration to address shortfalls, risks, and raise additional revenues. 3.2.5.1 Funding Strategies for V2I Investments The financial case should include potential funding sources of V2I deployments. Identifying the funding sources will help decision-makers evaluate risks and uncertainties associated with project funding. According to the 2019 survey of the CAT Coalition (NOCoE, 2019), most DOTs have been using existing programs to fund their CV investment initiatives. These existing programs could be adequate for funding small-scale or pilot deployments. However, state DOTs need a funding strategy for future expansion or deployment of both small- and large-scale technologies. State DOTs have relied on highway construction and maintenance programs for funding project-level deployments. These programs are traditionally funded through state, regional, and local revenues as well as matching federal funds for eligible projects. In some instances, if necessary, funding is supplemented with debt financing. Many federal funding sources, including the National Highway Performance Program (NHPP), the Congestion Mitigation and Air Quality Improvement (CMAQ) Program, the Surface Transportation Block (STB) Grant Program, the Highway Safety Improvement

46 Program (HSIP), Interstate Maintenance, and the National Highway Freight Program (NHFP), allow infrastructure-based ITS capital improvements as eligible items. The DOT programs, which are set aside for all statewide construction and maintenance needs, are generally capable of accommodating small-scale deployments. For instance, Georgia DOT has been planning the deployment of 1,700 SPaT-enabled traffic signals in the Atlanta Metro region using the agency's Regional Traffic Signal Optimization Program (RTOP). Georgia DOT has allocated $23.5 million per year for RTOP using STB and NHPP funds. Similarly, UDOT has used federal CMAQ funds for two TSP deployments (Redwood Road and UVX BRT) in addition to existing state funds. However, the capital intensiveness of large-scale V2I deployments can render the sole dependence on these programs impracticable. State DOTs may have to find supplementary and alternative funding sources, which are briefly discussed as follows: • FHWA’s ITS Program is available for funding research, development, and operational testing of ITS strategies. • Subject to funding lapse and time expiration, additional time-bound funding programs, such as the Advanced Transportation and Congestion Management Technologies Deployment program, and ITS integration funds, may also be available as supplementary sources. • Discretionary grant programs, including Every Day Counts, the Accelerated Innovation Deployment (AID) Demonstration Program, Infrastructure for Rebuilding America (INFRA), and Better Utilizing Investments to Leverage Development (BUILD) Transportation Discretionary Grant Program, can also be investigated as supplementary sources. • Repurposing of existing funding sources, such as NHPP, HSIP, CMAQ, and NHFP, that are dedicated for capacity, operational, safety, freight, and air quality improvement purposes may also be possible. As V2I deployments continue to yield performance efficiencies, the need for funds typically allocated for these improvement projects could diminish over time. Because of the uncertain nature of these supplementary funds, state DOTs should explore alternative strategies that could include: • Developing cost sharing agreements with other agencies, such as airports and public transit agencies. • Exploring the possibility of raising additional revenues using road user charging, transit fare box revenues, tolls, and other transactions where customers are willing to pay in exchange for service efficiencies resulting from V2I investments. • Using debt financing to raise additional revenue through general obligation and revenue bonds or availing federally available instruments for credit assistance and debt financing instruments. • Developing Public-Private Partnership (P3) models (e.g., the conventional design-build-finance- operate-maintain arrangement) that provide access to private sector funds and technical expertise in exchange for revenue sharing. As indicated by the state survey conducted by the CAT Coalition (NOCoE, 2019), some P3 models are emerging especially in the areas of fiber optic provision for improving backhaul communication and in data partnerships related to TMC operation.

47 Illustrative Financial Case Summary for SPaT Implementation for Priority Corridors of DOT ABC The DOT ABC estimated a $5 million capital cost for SPaT implementation on 200 signalized intersections. All six arterial corridors are on the National Highway System. Therefore, the V2I deployments projects are eligible for funding under federal-aid programs. The federal-aid share of the project, which includes 80 percent of the capital costs or $4 million, will include $2.55 million from NHPP, $0.35 million from HSIP, $1.1 million from CMAQ, and $1.0 million from STB. The DOT’s share is 20 percent or $1 million of capital costs and 100 percent of O&M costs, which will be funded through the DOT’s Capital Program and Highway System Maintenance budgets, respectively. No alternative funding sources are required. Given the capital outlays involved, no major funding risks are anticipated at this time. 3.2.6 The Deployment Case The deployment case establishes the “what is required to deliver and operate” the investment. It also considers procurement strategies and risks to delivery and risks the investment poses to the organization. Table 3-8 illustrates the considerations involved in making the deployment case for a given investment. Table 3-8. Key Considerations for Developing the Deployment Case Step Description of Activity Establish Project Procurement Plan Establish a high-level plan to deliver the CV investment option. Identify key activities to be accomplished in planning, design, implementation, and the O&M phases of delivery. Conduct an in- house staffing assessment to decide which activities will be done internally and which services will be procured from the private sector. Identify who will undertake systems planning, procurement, requirements and special provisions development, systems integration on both infrastructure and vehicle sides, software development, installation, and O&M. This exercise is necessary for the DOT to understand how procurement of products and services will be packaged and identify the procurement model. For V2I deployments, procurement and testing of RSUs and OBUs equipment and integration with the legacy ITS systems and other roadside hardware require special consideration. Conduct Risk Assessment Conduct a risk management exercise to gain a better understanding of risks, devise mitigation strategies, and allocate them efficiently among stakeholders. Consider various risks that affect the deployment of V2I technologies, including political, legal, contractual, construction, funding and revenue, technological, and O&M risks.

48 Step Description of Activity Communicate the Procurement Model(s) and a Project Management Plan Communicate the procurement strategy to execute the delivery plan. Include major features of work to be procured and identify the feasible procurement model(s). Discuss how the proposed procurement model(s) contrasts with those typically used by the DOT. Propose a conceptual schedule for the delivery of the V2I deployment projects. Identify key milestones and activities that are mandatory, difficult, or time consuming such as FCC approval, procurement of CV equipment, and system and security testing. 3.2.6.1 Delivery and Procurement Planning The deployment case begins by summarizing the key activities that should be undertaken during the planning and design, installation and integration, operationalization, and O&M phases as well as a human resource management plan to deliver the CV investment. Presently, CV programs are embedded within TMSO, Traffic Operations, or Planning Divisions of a DOT and staffed with one to four full-time equivalents. Most DOTs have chronic staffing shortages; in addition, DOT staff may not have the necessary expertise and experience with CV technologies. It is not uncommon for DOTs to procure a significant share of work from the private sector. Most DOTs procure consulting services to perform or assist with CV system planning, preparing procurement specifications, and oversight. Reviewing the availability and skills of in-house staffing will help determine (1) which activities can be performed in-house, and (2) whether staffing can be augmented through internal reallocation of resources or training. This exercise sets the stage for the procurement process because the DOT will be able to determine which services to procure from the private sector and the level of support needed. In addition, the DOT can also avail additional staffing resources or expertise from FHWA ITS JPO, AASHTO, and other partnering agencies. Large CV deployment projects can use a project governance structure to guide the delivery process. The project governance may include the project sponsor, internal partners (e.g., procurement office), external partners (e.g., local agencies), a systems manager to manage the procurement process, and multiple systems integrators to manage installation of V2I systems and ensure compatibility with legacy systems. 3.2.6.2 Risk Assessment The deployment case should articulate the key threats and opportunities that might influence the cost, quality, and schedule outcomes over all phases of CV deployment. The deployment case should also include summary statements addressing the severity of such risks and potential mitigation measures. The risk assessment informs the DOT on the initial risk allocation strategy and determines those that the DOT should retain and those that should be transferred to the private sector. Examples of such risks are listed as follows (Hatcher et al, 2018): • Working with Multiple Vendors: When a DOT works with multiple vendors, there is a possibility for compatibility and interoperability issues among various product types installed along the corridor or network. The DOT can test products offered by potential vendors to ensure

49 interoperability and compliance with current and open standards. In lieu of a traditional “furnish and install” approach, the DOT should require device testing before purchasing and allow for sufficient time in the procurement schedule. • O&M Funding of CV Infrastructure: Most DOTs depend on state, regional, and local revenues to meet the O&M needs of CV infrastructure. Federal funding (e.g., CMAQ) is typically not available for maintenance for non-Interstate infrastructure. As CV deployments grow over time geographically and functionally, the fiscally constrained maintenance programs of many DOTs are less likely to sustain the funding for O&M needs. Therefore, the DOT should strive to secure a dedicated and adequate funding source to meet the O&M needs. To overcome the budgetary shortfalls, DOTs can explore alternative measures, such as warranties and service contracts built in purchasing, and revenue sources. • FCC Approval. All CV equipment must demonstrate compliance with FCC standards prior to operating for public use. Many DOTs have experienced challenges, such as substantial time and effort and lack of understanding, with the licensing process. DOTs may have to hire an expert to assist with FCC approval and allow for adequate time in the delivery schedule (Sando et al, 2019). • Lack of In-house Expertise. Many agencies do not have in-house expertise or experience with writing requirements for “new to market” products or managing contracts with technology companies. DOTS typically rely on hiring a systems manager or consultants to manage or aid with these activities. • Technological Maturity. In a rapidly evolving landscape, selecting a product with the right technological maturity can be a challenge. DOTs often face the possibility of selecting a product that is yet to be ready or becoming obsolete. To mitigate this concern, DOTs can consider conducting market research to acquire information on technological capabilities and industry capacity, such as through vendor engagement, requesting product literature, and issuance of Request for Information (RFI). The DOT may consider allocating the risk of technological obsolescence to the private sector through an extended service agreement or a design-build- operate-transfer procurement model. Because the deployments happen when the technologies continue to evolve, the DOTs are at risk of installing devices with varying levels of capability and maturity. The early stages of ITS field device deployment faced a similar situation during the 1990s and early 2000s, where the traffic management system inherited a collection of several disconnected subsystems and field devices of varying capabilities and maturities. Over time, the ITS environment “started to gel” into a centralized software control system. The CV projects in the near term are likely to face a similar situation with uncertainties around technologies, data management, and evolving relationships among DOTs, technology companies, and vehicle manufacturers. These risks can be somewhat handled by putting an implementation plan in place to track systems that are being deployed or planned over the next 5, 7, or 10 years. 3.2.6.3 Procurement Model The deployment case should communicate the proposed procurement strategy. The selection of a procurement strategy is generally influenced by commonly accepted factors such as the type of services

50 to be procured, project size, statutory limitations, agency experience, staffing capabilities and availability, life cycle considerations (e.g., O&M), financing, cost, and schedule. DOTs have used various models to procure services from the private sectors—design-bid-build, design- build, and public-private partnerships. Some DOTs have used a design-bid-build approach with a standard Request for Proposals (RFP) process. The design-bid-build is generally more suitable for small- scale CV deployment, where the agency staff has both experience and availability to administer projects. For instance, FDOT procured the services to install two SPaT Challenge related CV projects in Osceola and Tallahassee using this traditional approach, while FDOT managed the procurement and system integration using in-house agency staff (Hatcher et al, 2018). As the scope of service needs increased, FDOT opted for a design-build approach. The traditional approach may not always work well for CV deployments where the agency is seeking qualifications-based or value-based selection to collaborate with activities such as writing requirements for “new to market” products and custom software development projects. Other states have adopted a design-build approach with an operate and transfer option, where the contractor provides turnkey services to design, build, install, integrate, test, and train staff before transferring the system back to the agency. For instance, Georgia DOT procured turnkey services from a single contractor for installation of DSRC radios at intersections and freeways with ramp meters and a separate contract to procure application software installation services. The design-build approach is generally more suited for integrated delivery in large-scale CV deployments and where DOTs need to access the technical expertise of the contractor, such as writing specifications, evaluating vendor capabilities, and training. DOTs may opt to allocate O&M responsibilities after system acceptance to the contractor before transferring these responsibilities back to the agency after a fixed or substantially longer period. One example is UDOT’s partnership with Panasonic. Under this $50 million contract, Panasonic will help UDOT install sensors along selected sections of roadway, up to 220 installations and 2,000 vehicles using DSRC, and create a CV data environment to broadcast information between UDOT traffic operation centers and vehicle information systems. Many agencies, such as Alaska, California, Michigan, and Nevada, have adopted similar P3 models for software application development. Many DOTs, such as Maryland, Georgia, and Kentucky, have adopted shared resource agreements, another form of P3, for backhaul communications. Under this approach, the DOT procures with a private partner to install fiber optic infrastructure on the right-of-way to meet future data requirements for transportation and public purposes. In exchange for access to the right-of-way, the private partner bears most of the construction and maintenance costs. These examples illustrate how DOTs have used various tools in their procurement toolbox. The general observation is that traditional procurement tools may not be suitable for CV deployment, where low-bid selection or sequential delivery of phases may not be fit well with technology-intensive projects. There are additional issues, such as data ownership, software licensing, service agreements, intellectual property rights, and operational aspects that need to be worked out in a rapidly changing technological landscape. New contracting tools, such as qualifications-based selection for consultants, project partnering, and alliance contracting for more integrated delivery are also available for DOT consideration to overcome

51 some of the deficiencies associated with traditional procurement; however, it is imperative that the DOT be flexible and creative with the procurement process. For example, as FDOT did, the procuring agency can issue RFIs to understand the market capabilities better. The DOT can also modularize the delivery phases into bid packages and procure each bid package using an appropriate procurement method to achieve the desired outcomes. In other words, no single procurement method suits all the deployment needs. Nevertheless, best practices suggest that the DOT should have a clear and balanced contracting language that is neither too restrictive nor too open-ended. Illustrative Business Case Summary for SPaT Implementation for Priority Corridors of DOT ABC The DOT ABC has evaluated the delivery strategy for SPaT implementation and identified the following challenges: • In-house skills to manage aspects of the procurement including identifying interoperable wireless communications devices (RSUs, OBUs), testing potential offerors equipment with DOT’s signal equipment and other hardware. • The DOT lacks adequate in-house expertise to perform systems integration, inspection, and testing. • As vendors are reported to have capacity issues, the DOT may face potential delays in purchasing all devices required for the project. Considering the above-stated risks, the DOT has identified the following strategies for procurement: • The DOT will provide knowledge acquisition opportunities and funding to in-house staff through education and training. In-house staff will receive access to a wide range of knowledge sharing opportunities, including peer exchanges, technical assistance programs, and technical resources developed by the CAT Coalition to provide guidance on CV applications development and deployment. • In-house staff will perform the functions of a system manager to manage the procurement aspects of the project. • The DOT will procure the services of a consultant to perform the functions of a systems integrator using the ITS on-call support contract. The consultant will be selected based on a combination of qualification and cost factors. • The DOT will obtain the installation services using the job-order contract in place. • The DOT will work with multiple vendors to overcome market supply issues. Working with a single vendor may delay the project. However, working with multiple vendors may cause interoperability issues among their products. To overcome this issue, the DOT will organize a plugfest event with various vendors to demonstrate the interoperability of their products before releasing the RFP to vendors.

52 3.3 BUSINESS CASE SUMMARY This section synthesizes and presents the insights and key lessons identified in the preceding sections of the business case analysis for the decision-maker’s consideration. The summary should: • Provide an overview of the key findings across each of the four cases for each option (including pros, cons, challenges, and risks). • Outline the comparative performance of each option against the “status quo” case. • Describe any emergent differences in the performance of each option. • Detail key performance drivers for each option and their relevance to future work. • Summarize key lessons learned/findings that are relevant to advance work on the problem or opportunity and investment that the business case is focused on. • Identify next steps for the investment’s analysis process. Note that the summary does not need to identify a single preferred option, but it should provide key information that will assist decision-makers and stakeholders to understand the merits and potential drawbacks related to the investment and its options. Illustrative Business Case Summary for SPaT Implementation for Priority Corridors of DOT ABC The DOT ABC will deploy TSP V2I applications on six priority arterial corridors in Region X. The DOT will install approximately 200 DSRC-based RSUs and retrofit 20 buses and snowplows with OBUs. Through SPaT implementation, the DOT will restore the schedule reliability of the bus transit service along the corridors and cut down winter intersection crashes by 10 percent. Strategic Case Economic Case Socio-demographic growth patterns in Region X will exceed capacity over the next 10 years. On-time transit performance is an ongoing issue along the major corridors and will worsen over time. The proposed implementation will improve travel time reliability of transit buses, cut down winter intersection crashes, and save capital costs in comparison with commercially available solutions. Safety benefits will exceed the costs of the SPaT implementation by a ratio of 5:4. The DOT investments will break even by year 8. Financial Case Deployment Case The SPaT implementation is estimated to be delivered at a cost of $5 million in capital expenditures and may cost an additional $750,000 for O&M over a 10-year period. The DOT ABC will use a traditional approach to deliver the project. The DOT will manage the procurement process in- house, while supplementing with on-call consultant services for system

53 Because the project is eligible for funding under the federal-aid program, the share of federal funds will be 80 percent, while the DOT Capital Program will fund the remaining 20 percent of the capital costs. O&M costs will be covered through the DOT Highway System Maintenance funds. integration. Installation will be performed using job-order contracting. Prior to releasing the RFP, the DOT will require interested vendors to demonstrate the interoperability of their products.

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Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations Get This Book
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State Departments of Transportation (DOTs) and other government agencies recognize the value of connected vehicle (CV) technologies in helping achieve the strategic objectives of saving lives and relieving congestion. Several agencies are currently planning and preparing for a future where CV technologies could become a part of their routine business operations. A core consideration in any such planning effort is an assessment of the need for and the nature of public CV infrastructure investments to support applications based on CV technologies.

The TRB National Cooperative Highway Research Program's NCHRP Web-Only Document 289: Business Models to Facilitate Deployment of Connected Vehicle Infrastructure to Support Automated Vehicle Operations presents methods to identify the most plausible CV infrastructure investments, shows how to build effective business case arguments, and details specific business model options during project procurement and delivery.

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