Life-Cycle Cost Analysis: The Pennsylvania Experience

Executive Summary

Life-cycle cost analysis (LCCA) is an engineering economic analysis tool useful in comparing the relative merit of competing pavement design alternatives. This analytical approach uses a structured methodology to account for the costs of agency activities and the effects of those activities on transportation users. By considering all of the relevant costs incurred during the service life of an asset, the LCCA process helps transportation officials to select the lowest total cost option and provides a means to balance user impacts with the construction, rehabilitation, and preservation requirements of the pavement itself.

The Pennsylvania Department of Transportation (PennDOT) has a long and successful history of using LCCA in its pavement selection decision process. Since the mid 1980s, PennDOT has conducted an LCCA for all interstate pavement projects with an estimated initial cost of more than $1 million and for all other pavement projects with an estimated cost of more than $10 million. PennDOT has 15 to 20 projects each year that are of sufficient scale to warrant an LCCA. For these projects, PennDOT bases its design selections primarily upon life-cycle costs and includes the effects of user delay and increased vehicle operating costs due to the presence of a work zone. Because of its LCCA policy, PennDOT has achieved significant improvements in its pavement program including.

• Improved overall performance of pavements in the State
• Lower costs for new pavements and rehabilitation work
• Improved credibility of pavement-type selection decisions with the public and industry groups