Comes at you fast

May 5, 2015

New software puts life-cycle costs in express mode

Life-cycle cost analysis (LCAA) is used in many industries, including the transportation industry, to make rational decisions regarding large investments.

LCCA is designed to factor in the initial and recurring costs throughout the life of the investment to select the most cost-efficient alternative. Since state agencies, counties and municipalities are constantly faced with selecting competing alternatives for roadways, the Federal Highway Administration (FHWA) has published, as a technical bulletin, a set of recommended procedures for LCCA. These well-accepted, unbiased procedures are based on sound economic principles that incorporate direct agency costs and costs paid indirectly by the public through inevitable work-zone delay. 

Even a quick skim of the FHWA’s technical bulletin reveals that predicting the life cycle of a pavement is a matter of great depth and complexity. Unbiased software versions of the bulletin such as the FHWA RealCost spreadsheet-based program or the LCCA program developed for the Asphalt Pavement Alliance (APA) confirm the complexities of conducting life-cycle analyses on pavement structures.

A new program developed for the APA, LCCAExpress, is geared toward less-complex projects and greatly simplifies the analysis. The power of this software lies in the fact that it is simple to use, yet adheres to sound economic principles.

Simplifying your life

The LCCA program was first made available in 2001. Since then, it has been used on numerous projects and is robust enough to handle a wide variety of scenarios. However, much like the RealCost program, the flexibility in handling a wide range of conditions inherently leads to a great deal of complexity. This is especially true with respect to determining work-zone user costs. These computations require the analyst to quantify such parameters as truck equivalency factors, service flow rates, work-zone vehicle flow capacities and work-zone vehicle dissipation capacities, to name just a few. While a traffic engineer may be adept at quantifying these parameters, materials engineers or pavement designers may be left scratching their heads, as they are more accustomed to dealing with project bid items, unit costs and quantities. Both RealCost and LCCA also feature probabilistic analysis techniques where variability of the input parameters can be used in the decision-making process. 

For smaller projects, this level of complexity and detail may not be warranted. Clearly, there was a need for a streamlined program and LCCAExpress was developed.

In developing LCCAExpress, it was decided to greatly limit the data that needs to be input by the user. Parameters such as current traffic volume, lane widths and bid quantities are entered by the user. More cryptic parameters like work-zone dissipation capacities were simply fixed within the software. While this may limit the software’s use for more complex projects, it greatly simplifies analysis for more routine projects. Also, the fixed parameters are applied equally to the competing alternatives, so there is no bias in the analysis.

Another simplification of the program was to allow for comparison of only two alternatives: concrete vs. asphalt. Since many pavement-type selection decisions come down to comparing the best asphalt option against the best concrete option, this simplification was warranted. To maintain the objectivity of the software, it is up to the user to enter the respective quantities, bid prices and so forth for each option. Therefore, any bias in the analysis comes from the data that are input by the user, rather than the software. This should be the case for any program of this nature.

The last major simplification was to limit analysis to fixed values and not consider variability of the inputs. For larger projects this may preclude its use since much more may be at stake and the analyst would want a comprehensive risk analysis. But again, for lower-profile projects, this may not be warranted, and the resources needed for gathering the necessary information on input variability could place unrealistic demands on the analyst.

Window working

Figure 1 shows the main window of LCCAExpress. Each button leads to a single input dialog box where the user enters the relevant information. The basic flow of information begins with entering the general project information. This includes project length, number of lanes, speed limit and so forth. The user also can select whether to include work-zone user costs. The general project information is held fixed between the two alternatives.

After entering general project information, unit prices can be entered. The asphalt option allows for a three-lift asphalt pavement (wearing, binder and base course) over an aggregate base. The concrete option allows for a concrete slab on an aggregate base. Unit prices for these materials, in addition to typical maintenance items such as asphalt milling and patching or concrete grinding and joint sealing, can be entered. The user also can enter unit prices for miscellaneous items. Finally, costs associated with mobilization and traffic control may be entered as percentages of the total construction cost.

The asphalt and concrete construction activity buttons in Figure 1 lead to input windows where each alternative’s life cycle is constructed. Here, layer thicknesses, unit weights of materials, construction duration, expected life and rehabilitation quantities are entered. These input items are primarily used to determine direct agency costs.

As mentioned previously, much of the complexity of life-cycle cost analysis for pavements lies in quantifying the parameters necessary to determine work-zone user costs. Figure 2 shows that the inputs needed for LCCAExpress are relatively straightforward. The user selects the type of terrain and traffic type. The program uses these to determine appropriate traffic-flow rates. Some basic traffic-volume data and work-zone conditions also are needed, but should be relatively easy to obtain for a given project. Finally, either 24-hour closures or night construction can be selected for each option. This decision is alternative-specific due to the different nature of concrete vs. asphalt construction that may warrant different types of closures.

The final input screen allows the user to enter alternative-specific recurring maintenance activities. These may include such things as crack sealing, joint repair and other activities expected to recur in a fixed number of years. An example might be replacing 20% of the joint sealant every 10 years.

After entering all the input data and computing costs, the final window (Figure 3) appears. For the purposes of this article, all the costs were set to zero to only illustrate the format of the output rather than present actual cost comparisons. All costs are presented in dollars per mile as the net present value (NPV). The NPV is a common way to present life-cycle costs in current dollars. NPV takes into account the time value of money by adjusting future costs to present costs with consideration to a discount rate and the year in which the expenditure occurs. This approach was recommended by the FHWA in its technical bulletin and provides a fair and rational comparison of competing alternative costs.

From a decision-making perspective, most analysts are interested in the total cost presented at the bottom of Figure 3. However, it is interesting to compare subcost items on a direct basis between alternatives. For example, which alternative is more expensive to maintain? Which one has greater user delay? Though the final decision may be made on total costs, answering these questions may provide further valuable insight into each alternative.

Rationale with speed

LCCAExpress is a user-friendly program that tackles the complex problem of life-cycle cost analysis. By fixing a number of parameters and streamlining the analysis procedure, users can quickly and efficiently make rational decisions about competing pavement alternatives. Its basis on the FHWA guidelines and fair treatment of competing alternatives make it a viable option when more complex analyses are not needed. It also can be used for a preliminary analysis to evaluate whether a more detailed analysis is warranted. AT

About The Author: Timm is a Gottlieb associate professor of civil engineering at Auburn University.

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