CDOT’s Life Cycle Cost AnalysisA Life Cycle Cost Analysis (LCCA) is used to support the pavement type selection Compares pavement types and rehabilitation work over a 40 period Basics

40th AnnualRocky Mountain Asphalt Conference and

Equipment ShowFebruary 28th, 2013

CDOT’s Life Cycle Cost Analysis

Jay GoldbaumCDOT Pavement Design Program Manager

Sunday, March 17, 13

40th AnnualRocky Mountain Asphalt Conference and

Equipment ShowFebruary 28th, 2013

CDOT’s Life Cycle Cost Analysis

Jay GoldbaumCDOT Pavement Design Program Manager


A Life Cycle Cost Analysis (LCCA) is used to support the pavement type selection

Compares pavement types and rehabilitation work over a 40 period

Basics of a CDOT Life Cycle Cost Analysis


A Life Cycle Cost Analysis (LCCA) is used to support the pavement type selection

Compares pavement types and rehabilitation work over a 40 period

Basics of a CDOT Life Cycle Cost Analysis


Prepared for all new, reconstruction, or surface treatment projects with at least $2,000,000 in material costs for the roadway features i.e. hot mix asphalt, aggregate base course, subgrade soils, shoulder work, etc.

When does CDOT run a LCCA


Prepared for all new, reconstruction, or surface treatment projects with at least $2,000,000 in material costs for the roadway features i.e. hot mix asphalt, aggregate base course, subgrade soils, shoulder work, etc.

When does CDOT run a LCCA


YES

NO

YES

NO

1. Develop preliminary design for typical section.

2. Perform life cycle cost analysis of typical sections. Is one type clearly superior? Greater than 10%

3. Evaluate secondary factors by Pavement Type Selection Committee (PTSC).

4. Select preliminary pavement type.

7. Select final pavement type and applicable thickness.

6. Is detailed design reasonably close to typical section design used in the analysis?

5. Perform detailed pavement design.

LCCA Process


YES

NO

YES

NO

1. Develop preliminary design for typical section.

2. Perform life cycle cost analysis of typical sections. Is one type clearly superior? Greater than 10%

3. Evaluate secondary factors by Pavement Type Selection Committee (PTSC).

4. Select preliminary pavement type.

7. Select final pavement type and applicable thickness.

6. Is detailed design reasonably close to typical section design used in the analysis?

5. Perform detailed pavement design.

LCCA Process


LCCA Factors Used By CDOT

• Initial Construction Costs• Annual Maintenance Cost

• Design Costs

• Pavement Construction Engineering Costs• Traffic Control Cost

• User Costs

• Periodic Rehabilitation Costs


LCCA Factors Used By CDOT

• Initial Construction Costs• Annual Maintenance Cost

• Design Costs

• Pavement Construction Engineering Costs• Traffic Control Cost

• User Costs

• Periodic Rehabilitation Costs


Types of Distributions Used by CDOT

Most Likely

Minimum Maximum

Triangular NormalAverage

Standard Deviation

The data should be as accurate as possible


Types of Distributions Used by CDOT

Most Likely

Minimum Maximum

Triangular NormalAverage

Standard Deviation

The data should be as accurate as possible


Discount Rate

The discount rate reflects the time value of money

CDOT’s current rate is 2.8 percent Standard Deviation of 0.18 percent


Discount Rate

The discount rate reflects the time value of money

CDOT’s current rate is 2.8 percent Standard Deviation of 0.18 percent


Impact of the Discount Rate

For example, if we need $1,000,000 in 15 years we would need almost $661,000 in today’s dollars using the 2.8 percent rate

Using a 5.0 percent rate, we would need about $481,000

$0

$250,000

$500,000

$750,000

$1,000,000

0 2 4 6 8 10 12 14 16 18 20

Years


Impact of the Discount Rate

For example, if we need $1,000,000 in 15 years we would need almost $661,000 in today’s dollars using the 2.8 percent rate

Using a 5.0 percent rate, we would need about $481,000

$0

$250,000

$500,000

$750,000

$1,000,000

0 2 4 6 8 10 12 14 16 18 20

Years


Statewide Cost Data


Statewide Cost Data


Statewide Cost Data


Statewide Cost Data


Annual Maintenance Cost


Annual Maintenance Cost


Project Cost

Preliminary engineering is about 8 to 20 percent with an average of around 18 percent

Construction engineering is currently 20.02 percent

Traffic control is about 10 to 18 percent with an average of around 15 percent


Project Cost

Preliminary engineering is about 8 to 20 percent with an average of around 18 percent

Construction engineering is currently 20.02 percent

Traffic control is about 10 to 18 percent with an average of around 15 percent


Performance Life


Performance Life


User Cost


User Cost


User Cost Output


User Cost Output


User Cost Distribution


User Cost Distribution


CDOT Spreadsheet


CDOT Spreadsheet


CDOT Spreadsheet


CDOT Spreadsheet


FHWA RealCost Programwww.fhwa.dot.gov/infrastructure/asstmgmt/lcca


FHWA RealCost Programwww.fhwa.dot.gov/infrastructure/asstmgmt/lcca






RealCost Charts


RealCost Charts


Next Step

When the alternatives are within 10 percent at the 75 percent probability level, they are deemed to be equal

The Project Engineer can chose to have the project evaluated by the Pavement Type Selection Committee

or use alternate bidding


Next Step

When the alternatives are within 10 percent at the 75 percent probability level, they are deemed to be equal

The Project Engineer can chose to have the project evaluated by the Pavement Type Selection Committee

or use alternate bidding


Pavement Type Selection Committee

• Both industries review the input data• Industry comments supported by data would be

considered by the PTSC to adjust the LCCA• If the LCCA is still within 10 percent,

secondary factors such as project extensions, future maintenance and rehabilitation work, that are in alignment with the project’s or Regional goals will be used to decide the type of pavement

• The PTSC makes a recommendation to the Chief Engineer


Pavement Type Selection Committee

• Both industries review the input data• Industry comments supported by data would be

considered by the PTSC to adjust the LCCA• If the LCCA is still within 10 percent,

secondary factors such as project extensions, future maintenance and rehabilitation work, that are in alignment with the project’s or Regional goals will be used to decide the type of pavement

• The PTSC makes a recommendation to the Chief Engineer


Alternate Bid

• Initial construction costs are removed from the LCCA

• Industry comments supported by data would be considered to adjust the future work in the LCCA

• Both industries review the input data

• The net present value of user cost, maintenance, and rehabilitation work are added to the bid price

• Two sets of plans are developed with HMA and PCCP bid by the square yard


Alternate Bid

• Initial construction costs are removed from the LCCA

• Industry comments supported by data would be considered to adjust the future work in the LCCA

• Both industries review the input data

• The net present value of user cost, maintenance, and rehabilitation work are added to the bid price

• Two sets of plans are developed with HMA and PCCP bid by the square yard


Any Questions ???


Any Questions ???


CDOT’s Life Cycle Cost AnalysisA Life Cycle Cost Analysis (LCCA) is used to support the pavement type selection Compares pavement types and rehabilitation work over a 40 period Basics

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