CDOT s Life Cycle Cost Analysis
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1 CDOT s Life Cycle Cost Analysis 40 th Annual Rocky Mountain Asphalt Conference and Equipment Show February 28 th, 2013 Jay Goldbaum CDOT Pavement Design Program Manager Sunday, March 17, 13
2 CDOT s Life Cycle Cost Analysis 40 th Annual Rocky Mountain Asphalt Conference and Equipment Show February 28 th, 2013 Jay Goldbaum CDOT Pavement Design Program Manager Sunday, March 17, 13
3 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 Sunday, March 17, 13
4 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 Sunday, March 17, 13
5 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. Sunday, March 17, 13
6 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. Sunday, March 17, 13
7 LCCA Process YES 1. Develop preliminary design for typical section. 2. Perform life cycle cost analysis of typical sections. Is one type clearly superior? Greater than 10% NO 3. Evaluate secondary factors by Pavement Type Selection Committee (PTSC). 4. Select preliminary pavement type. NO 7. Select final pavement type and applicable thickness. YES 6. Is detailed design reasonably close to typical section design used in the analysis? 5. Perform detailed pavement design. Sunday, March 17, 13
8 LCCA Process YES 1. Develop preliminary design for typical section. 2. Perform life cycle cost analysis of typical sections. Is one type clearly superior? Greater than 10% NO 3. Evaluate secondary factors by Pavement Type Selection Committee (PTSC). 4. Select preliminary pavement type. NO 7. Select final pavement type and applicable thickness. YES 6. Is detailed design reasonably close to typical section design used in the analysis? 5. Perform detailed pavement design. Sunday, March 17, 13
9 LCCA Factors Used By CDOT Initial Construction Costs Annual Maintenance Cost Design Costs Pavement Construction Engineering Costs Traffic Control Cost Periodic Rehabilitation Costs User Costs Sunday, March 17, 13
10 LCCA Factors Used By CDOT Initial Construction Costs Annual Maintenance Cost Design Costs Pavement Construction Engineering Costs Traffic Control Cost Periodic Rehabilitation Costs User Costs Sunday, March 17, 13
11 Types of Distributions Used by CDOT Triangular Normal Most Likely Average Standard Deviation Minimum Maximum The data should be as accurate as possible Sunday, March 17, 13
12 Types of Distributions Used by CDOT Triangular Normal Most Likely Average Standard Deviation Minimum Maximum The data should be as accurate as possible Sunday, March 17, 13
13 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 Sunday, March 17, 13
14 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 Sunday, March 17, 13
15 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 $1,000,000 $750,000 $500,000 $250,000 $ Years Using a 5.0 percent rate, we would need about $481,000 Sunday, March 17, 13
16 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 $1,000,000 $750,000 $500,000 $250,000 $ Years Using a 5.0 percent rate, we would need about $481,000 Sunday, March 17, 13
17 Statewide Cost Data
18 Statewide Cost Data
19 Statewide Cost Data
20 Statewide Cost Data
21 Annual Maintenance Cost
22 Annual Maintenance Cost
23 Project Cost Preliminary engineering is about 8 to 20 percent with an average of around 18 percent Construction engineering is currently percent Traffic control is about 10 to 18 percent with an average of around 15 percent Sunday, March 17, 13
24 Project Cost Preliminary engineering is about 8 to 20 percent with an average of around 18 percent Construction engineering is currently percent Traffic control is about 10 to 18 percent with an average of around 15 percent Sunday, March 17, 13
25 Performance Life
26 Performance Life
27 User Cost
28 User Cost
29 User Cost Output
30 User Cost Output
31 User Cost Distribution
32 User Cost Distribution
33 CDOT Spreadsheet
34 CDOT Spreadsheet
35 CDOT Spreadsheet
36 CDOT Spreadsheet
37 FHWA RealCost Program
38 FHWA RealCost Program
39
40
41
42
43 RealCost Charts
44 RealCost Charts
45 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 Sunday, March 17, 13
46 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 Sunday, March 17, 13
47 Pavement Type Selection Committee Sunday, March 17, 13 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
48 Pavement Type Selection Committee Sunday, March 17, 13 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
49 Alternate Bid Sunday, March 17, 13 Two sets of plans are developed with HMA and PCCP bid by the square yard Initial construction costs are removed from the LCCA Both industries review the input data Industry comments supported by data would be considered to adjust the future work in the LCCA The net present value of user cost, maintenance, and rehabilitation work are added to the bid price
50 Alternate Bid Sunday, March 17, 13 Two sets of plans are developed with HMA and PCCP bid by the square yard Initial construction costs are removed from the LCCA Both industries review the input data Industry comments supported by data would be considered to adjust the future work in the LCCA The net present value of user cost, maintenance, and rehabilitation work are added to the bid price
51 Any Questions???
52 Any Questions???
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