1. Life-Cycle Cost Analysis

2. Life-Cycle Cost Analysis
Required by National Highway System (NHS) Designation Act of 1995
Removed by Transportation Equity Act of the 21st Century (TEA-21) of 1998
FHWA still encourages LCCA
National Highway System Designation Act of 1995
The legislation designates the National Highway System (NHS), developed by the Department of Transportation (DOT) in cooperation with the states, local officials, and metropolitan planning organizations (MPOs). DOT proposed the system to Congress on Dec. 9, 1993, as required by the Intermodal Surface Transportation Efficiency Act of 1991 (ISTEA). The system approved by Congress reflects modifications agreed upon by DOT and Congress as of Nov. 13, The total mileage is about 260,000 kilometers (160,955 miles) and includes the Interstate Highway System, as well as other roads important to the nation's economy, defense, and mobility. ISTEA set a deadline of Sept. 30, 1995, for Congress to establish the system. Until the system was designated, the law prevented future NHS and Interstate Maintenance (IM) funds from being released to the states. With the enactment of the NHS legislation, the $5.4 billion of fiscal year (FY) 1996 funds were distributed to the states. (From Public Roads, Spring 1996, v.49, No. 4).

3. Life-Cycle Cost Analysis
Purpose
Determine total cost or value of an item over its entire life-cycle
Decision support tool
Legislatively defined:
“. . . a process for evaluating the total economic worth of a usable project segment by analyzing initial costs and discounted future cost, such as maintenance, user, reconstruction, rehabilitation, restoring, and resurfacing costs, over the life of the project segment.” A usable project segment is defined as a portion of a highway that, when completed, could be opened to traffic independent of some larger overall project.

4. General Procedure Initial strategy & analysis decisions
Analysis period (at least 35 years)
Alternative pavement design strategies
Pavement performance over time
Maintenance/rehabilitation timing

5. General Procedure Agency costs Preliminary engineering
Contract administration
Initial construction
Construction supervision
Maintenance
Rehabilitation
Administrative
Salvage value

6. General Procedure User costs Normal operation Work zone
Types of user costs
Vehicle operating
User delay
crash

7. VOC: The Cost or Roughness
Papagiannakis and Delwar (2001)
 1 m/km =  $200/yr for maint. & repair =  1.7 cents/mile
Barnes and Langworthy (2003)
IRI (inches/mile)
% VOC Increase
170 +
25%
140
15%
105 5% 80 0%
Barnes, G. and Langworthy, P. (2003). The Per-Mile Costs of Operating Automobiles and Trucks. Report No. Mn/DOT
Papagiannakis, T. and Delwar, M. (2001). Computer model for life-cycle cost analysis of roadway pavements. Journal of computing in civil engineering, Vol. 15, No. 2, pp

8. VOC Assuming IRI = 80 inches/mile
56.1 cents/mile
25.2 cents/mile
18.3 cents/mile
Data from Barnes and Langworthy (2003)

9. VOC Assuming IRI = 140 inches/mile
64.5 cents/mile
31.3 cents/mile
24.0 cents/mile
Data from Barnes and Langworthy (2003)

10. VOC Assuming IRI = 170 inches/mile
70.1 cents/mile
34.0 cents/mile
26.1 cents/mile
Data from Barnes and Langworthy (2003)

11. VOC vs. Roughness

12. General Procedure Alternative comparison Net present value (NPV)
Equivalent uniform annual costs (EUAC) i =
discount rate n
year of expenditure
Present value (PV) factor i =
discount rate n
Analysis period (the number of years into the future over which you wish to compare projects)

13. General Procedure Analyze results Sensitivity analysis
Probability (or “risk”) analysis

14. What is NOT Considered Environmental impacts Equity impacts Energy use
Emissions
Waste
Equity impacts
Connectivity
Congestion
Community
LCA of the CEE 404 Final Project Options (from Weiland 2008)
30-40% waste is typical – most is from manufacturing and end-of-life disposal (assumptions can be debatable)

15. What is NOT Considered Environmental impacts Equity impacts Energy use
Emissions
Waste
Equity impacts
Connectivity
Congestion
Community
LCA of the CEE 404 Final Project Options (from Weiland, 2008)
30-40% waste is typical – most is from manufacturing and end-of-life disposal (assumptions can be debatable)

16. General Assumptions Both pavements built at same time
Same traffic on each pavement
Same user costs between construction activities
VOC is the same
Implies road roughness is the same
Maintenance/rehabilitation activities are scheduled such that user costs are the same
Implies some unlikely activities must be scheduled
Differences will be in…
Construction costs
User delay costs during construction
Salvage value

17. Be Careful of Assumptions
SR 704, Cross-Base Highway Project
Estimated Cost
$318 million
Current Funding
$43 million

19. Be Careful of Assumptions
SR 704: HMA Alternative

20. Be Careful of Assumptions
SR 704: PCC Alternative

21. Other Life-Cycle Cost Study Pitfalls
Not accounting for user costs
Traffic delay during construction
VOC due to differing roughness
Differences in salvage value
Maintenance/rehabilitation timing
See APA synthesis by Villacres (February 2005): Pavement Life-Cycle Cost Studies Using Actual Cost Data
These items are often not appropriately accounted for because studies tend to look at actual historical costs. These costs usually don’t involve user costs and almost certainly do not account for maintenance and rehabilitation practices that would result in users incurring comparable VOC between pavement sections .

22. I-71 in Ohio: Present Worth in 1960 of Total Contract Costs (using a 5% discount rate)
Commissioned by Flexible Pavements of Ohio
Did not account for user costs
From Gibboney. (1995). Flexible and Rigid Pavement Costs on the Ohio Interstate Highway System

23. I-70 in Kansas: Total Costs per 4-Lane Mile in 2001 Dollars
Did not account for user costs
Did not account for KDOT maintenance work (negligible)
From Cross and Parsons. (2002). Evaluation of Expenditures on Rural Interstate Pavements in Kansas

24. I-80, Iowa County, Iowa: Total Cumulative (Life-Cycle) Costs
Did not account for user costs
Did not account for routine maintenance costs
Did not account for salvage values
From Asphalt Paving Association of Iowa. (1998). Iowa Interstates: A Look at Performance and Costs

25. 40-Year Life-Cycle Cost Analysis
Commissioned by the Portland Cement Association
Did not account for user costs ?
From Waalks. (n.d.). Life Cycle Cost Analysis: A Guide for Comparing Alternative Pavement Designs

26. Michigan: Average Overall Cost per Lane-km per Year
From Waalks. (n.d.). Life Cycle Cost Analysis: A Guide for Comparing Alternative Pavement Designs

27. WSDOT Interstate Pavements time to first rehabilitation

28. ODOT Interstate Pavements time to first rehabilitation

29. WSDOT Interstate Pavements
2004 roughness (IRI)

30. ODOT Interstate Pavements
2004 roughness (IRI)

31. WSDOT Pavement Type Selection

32. Issues to Address Pavement design Life cycle Engineering
Will foundation support PCC?
Life cycle
Is LCCA difference less than 15%?
Engineering
Is there a preferred alternative?

33. WSDOT LCCA Sets standard procedure and assumptions
Only consider differential factors
Uses NPV
Gives values for user cost
Sets analysis periods
50 years for Interstate or Principal Arterial
20 years for Minor Arterial or Major Collector
Formal process for determining pavement type

34. Primary References
Walls, J. and Smith, M.R. (1998). Life-Cycle Cost Analysis in Pavement Design. Report No. FHWA-SA FHWA, Washington, D.C. team/DP115TechBulletin.pdf
WSDOT. (2005). Pavement Type Selection Protocol.