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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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
Types of Distributions Used by CDOT
Most Likely
Minimum Maximum
Triangular NormalAverage
Standard Deviation
The data should be as accurate as possible
Sunday, March 17, 13
Types of Distributions Used by CDOT
Most Likely
Minimum Maximum
Triangular NormalAverage
Standard Deviation
The data should be as accurate as possible
Sunday, March 17, 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
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
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
Sunday, March 17, 13
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
Sunday, March 17, 13
Statewide Cost Data
Sunday, March 17, 13
Statewide Cost Data
Sunday, March 17, 13
Statewide Cost Data
Sunday, March 17, 13
Statewide Cost Data
Sunday, March 17, 13
Annual Maintenance Cost
Sunday, March 17, 13
Annual Maintenance Cost
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
Performance Life
Sunday, March 17, 13
Performance Life
Sunday, March 17, 13
User Cost
Sunday, March 17, 13
User Cost
Sunday, March 17, 13
User Cost Output
Sunday, March 17, 13
User Cost Output
Sunday, March 17, 13
User Cost Distribution
Sunday, March 17, 13
User Cost Distribution
Sunday, March 17, 13
CDOT Spreadsheet
Sunday, March 17, 13
CDOT Spreadsheet
Sunday, March 17, 13
CDOT Spreadsheet
Sunday, March 17, 13
CDOT Spreadsheet
Sunday, March 17, 13
FHWA RealCost Programwww.fhwa.dot.gov/infrastructure/asstmgmt/lcca
Sunday, March 17, 13
FHWA RealCost Programwww.fhwa.dot.gov/infrastructure/asstmgmt/lcca
Sunday, March 17, 13
Sunday, March 17, 13
Sunday, March 17, 13
Sunday, March 17, 13
Sunday, March 17, 13
RealCost Charts
Sunday, March 17, 13
RealCost Charts
Sunday, March 17, 13
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
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
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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
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
Sunday, March 17, 13
Any Questions ???
Sunday, March 17, 13
Any Questions ???
Sunday, March 17, 13
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