Asset Management Overview
Why Use Transportation Asset Management?
Historically, the Nation's transportation agencies have been focused on major building and expansion of roads, bridges, and other transportation infrastructure. In recent years, the costs of preserving and operating this $1.75 trillion investment have increased dramatically. At the same time, the public has undergone a change in its view of effective governance, based on the expectation that government should be more accountable and be managed more like a business operation.
If current trends continue into the future, State DOTs and other public-sector owners of highway infrastructure will be facing increased system and budget needs with limited resources. At the same time, these infrastructure owners will be required to deal with increased system complexity, renewed public demands for accountability, and higher user expectations regarding levels of service. The future focus for States and other governmental units will be on justifying their actions and taking responsibility for their results.
In responding to these challenges, many State and local government agencies are partnering with industry to advance the concepts and practices of asset management. Their efforts are making performance and return-on-investment considerations an integral and routine part of program evaluation and project selection. This systematic approach is seen as a way to improve efficiency and productivity and to increase the value of services and products to transportation users.
Construction and expansion of transportation systems in the United States have been a central part of the culture and economy since colonial times. This infrastructure development peaked with the completion of the Interstate Highway System in the 1980s. Along with this milestone came a realization of the need to shift emphasis and resources from new construction to meet the demands of maintenance, preservation, and reconstruction of the existing infrastructure. Today, significant portions of our highway assets are deteriorating because of increasing usage, environmental impacts, and sheer aging. Simply put, the Nation's physical assets will not last forever.
The implications of an aging system are multidimensional. There are increased requirements for maintenance and reconstruction, particularly on older systems. There is a need to maximize the performance of the existing system. At the same time, demands for system expansion from individual and business users of transportation facilities compete for resources. These system users have high expectations regarding safety, comfort, convenience, and security. Commercial users cite system reliability as a critical part of their operations, particularly in the context of just-in-time delivery and other productivity-enhancing patterns of operation.
Transportation needs are not always obvious. More often than not, solutions to transportation problems require long-term planning and commitment of future funds. Agencies can no longer manage transportation assets based solely on historical trends. Transportation is inextricably linked to virtually every aspect of our culture, and the performance of its infrastructure needs to be at the center of our political and economic thinking.
Elements of an Asset Management Program
Asset Management Primer, 1999, p. 7.
Different aspects of the transportation system compete daily for resources and struggle to meet user expectations. Designs are increasingly complex, and facilities often require expensive specialized attention to operate and repair. Even small errors in, for example, planning or constructing a road or neglecting maintenance of a bridge can result in multimillion-dollar costs over the life of the asset. Transportation investments are so large that it is unthinkable to ignore maintenance and preservation needs.
Asset management focuses on the facts about the infrastructure assets, their performance, their preservation, and their anticipated longevity. Most State highway agencies have in place some of the more common elements of the asset management process (see the box "Elements of an Asset Management Program"). These systematic processes typically are used to measure real-life performance, predict future trends, and optimize the use of limited resources.
State DOTs are increasingly measuring and reporting on their performance in terms of outcomes, outputs, and economic value added. Many States have enacted legislation modeled on the Government Performance and Results Act of 1993. Such legislation typically calls for States to report what is bought with public funds, how spending decisions are made, and what is accomplished. The Governmental Accounting Standards Board (GASB) Statement 34 (www.gasb.org)3 furthered this trend. It recommends a more asset-based approach to State financial reporting, an approach that focuses on facility condition and asset valuation over time.
For a long time, private industry has based business plans on the concept of results-oriented management. The more recent adoption of these principles by public agencies has translated into a strong need for cost-effective programs and for full accountability for decisions made at all levels. Transportation managers today have to know the facts and be ready to act upon them. Asset management helps transportation agencies to identify program needs and provides the tools to reach defensible decisions that maximize transportation investments.