Life Cycle Cost Analysis for Bridges

In Search of Better Investment and

Engineering Decisions
Presented by: Hank Bonstedt
Executive Director
Prestressed Concrete Association of Pennsylvania
What is Life Cycle Cost?
An economic analysis procedure that uses engineering
inputs

Compares competing alternatives considering all
significant costs

Expresses results in equivalent dollars (present worth)
Cost Considerations





Maintenance and
Inspection
Cost
Initial Cost
C
o
s
t
s

Present Worth
Years
Rehabilitation Cost
Salvage
Value
Salvage
Costs
Present Worth Analysis
Discounts all future costs and benefits to the
present:
t=n
PW = FC + pwf [MC+IC+FRC+UC] + pwf [S]
t=0
FC = First (Initial) Cost
t = Time Period of Analysis
MC = Maintenance Costs
IC = Inspection Costs
FRC = Future Rehabilitation Costs
UC = Users Costs
S = Salvage Values or Costs
pwf = Present Worth Factor
First (Initial) Cost
Initial cost of structure

Incentive/disincentive payments should not be included
since they would reflect user benefits or costs prior to
structure going into service
Time Period of Analysis
Normally equal for all alternatives

Should include at least one major rehabilitation
Needed to capture the true economic benefit of each alternative

Bridge design today is based on a probabilistic model of
100 years
Maintenance Costs
Annual cost associated with the upkeep of the structure
Information is difficult to obtain for a given project
Cost varies on the basis of size of the structure (sqft)
Best Guess Values
Frequency - Annual
Concrete 0.05 % of Initial Cost
Structural Steel 0.05 % of Initial Cost
Inspection Costs
Requirements set forth in the National Bridge
Inspection Standards (23 CFR 650.3)
Occurs for all alternatives every two years
Cost varies on the basis of size of the structure (sqft)
and by construction material
Best Guess Values
Frequency - Biannual
Concrete 0.15 % of Initial Cost
Structural Steel 0.20 % of Initial Cost
Future Painting Costs
Only applies to structural steel structures but excludes
weathering steel
Should occur every 20 years
Cost varies on the basis of size of the structure (sqft)
Best Guess Values
Frequency every 20 years
Concrete 0.0 % of Initial Cost
Structural Steel 7.0 % of Initial Cost
Future Rehabilitation Costs
The frequency is not only a function of time but also the
growing traffic volume and the structural beam system
Cost varies on the basis of size of the structure (sqft) and
structural beam system
Best Guess Values
Frequency
First occurrence Concrete 40 years
First occurrence Structural Steel 35 years
Annual traffic growth rate .75 % (shortens rehab cycles)
Concrete 20.0 % of Initial Cost
Structural Steel 22.0 % of Initial Cost
Salvage Value/Costs
Occurs once at end of life of structure

Difference between
Removal cost
Salvage value

Best Guess Values
Removal cost 10 % of Initial Cost
Salvage Value Concrete - 0 % of Initial Cost
Salvage Value Structural Steel - 2 % of Initial Cost
Users Costs
For early construction completion, maintenance and
rehabilitations only

Delay-of-use
Time delay
Fuel consumption
Driver discomfort

Vehicle operating costs

Accidents
Users Costs
Pros
Users pay for transportation system
Drives the results
Cons
Owner can not recoup costs
Not in my budget
Drives the results
Users Costs
Driver Delay Costs:

DDC = (L/S
a
-L/S
n
) x ADT x N x w

L = Length of affected road way
S
a
= Traffic speed during maintenance activity
S
n
= Normal traffic speed
ADT = Average daily traffic (vehicles per day)
N = number of days of maintenance activity
w = Hourly time value of drivers
Users Costs
Vehicle Operating Costs:

VOC = (L/S
a
-L/S
n
) x ADT x N x r

L = Length of affected road way
S
a
= Traffic speed during maintenance activity
S
n
= Normal traffic speed
ADT = Average daily traffic (vehicles per day)
N = number of days of maintenance activity
r = weighted-average vehicle cost
Users Costs
Accident Costs:

AC = L x ADT x N x (A
a
-A
n
) x c
a


L = Length of affected road way
ADT = Average daily traffic (vehicles per day)
N = number of days of maintenance activity
A
a
= Accident rate during maintenance activity
A
n
= Normal accident rate
c
a
= Cost per accident
Present Worth Factor
1
pwf =
(1 + i)
n

pwf = Present Worth Factor for discount rate i
and year n
i = Discount rate
n = Number of years when cost (benefit) will
occur
Discount Rate
Interest - Inflation
i =
1 + Inflation
Interest The return of an investment that raises the
future value of an invested dollar

Inflation The erosion of a dollars value that raises any
future expenses

Use of a discount rate allows for the use of constant
dollars in the analysis
Process And Approach Limits
Government does not invest money to gain cash
benefits (interest)

Government money is generally invested only in
depreciating assets

Anything not bought this year costs more next year
(inflation)
User Costs Input
User Costs Inputs
Alternative 1
Prestressed
Concrete
Len gt h of affect ed roadway * 2.00 2.00 miles
ADT * 5,000 5,000 veh icles per day
Normal t raffic speed 45 45 mph
Con st ruct ion t raffic speed 20 20 mph
Normal acciden t rat e 1.9 1.9 / million veh icle miles
Con st ruct ion acciden t rat e 2.2 2.2 / million veh icle miles
Number of con st ruct ion days
Early Construction Completion 90 0 days
Maintenance 10 10 days/ occurren ce
Inspection 5 8 days/ occurren ce
Painting 0 90 days/ occurren ce
Rehabilitation 120 120 days/ occurren ce
Hourly t ime value of drivers 6.25 6.25 $/ h our
Weigh t ed average veh icle cost 8.00 8.00 $/ h our
Cost per acciden t 100,000 100,000 $/ occurren ce
Note*: Total traffic affected by Maintenance, Inspection, Painting, and Rehabilitation
activity over and under structure
Alternative 2
Structural Steel
Discount Rate Inputs
Present Worth Factors For All Alternatives
Discount Rate 0.00%
Inflation Rate 2.00%
Structure Costs Input
In it ial Cost of St ruct ure
7,000,000
An alysis Period
100
Frequency
(Years)
Cost
Factor
Per Occurrence
Cost
Main t en an ce Cost s 1 0.05% 3,500
In spect ion Cost s 2 0.15% 10,500
Pain t in g Cost s 0 0.00% 0
Reh abilit at ion Cost s
First Rehabilitation 40 20.00% 1,400,000
An n ual Traffic Growt h Rat e * 0.75%
Salvage Cost s/ Value
Demolition Costs 100 10.00% 700,000
Salvage Value 100 0.00% 0
Net Salvage Costs 700,000
Alternative 1 - Prestressed Concrete
Structure Costs Input
In it ial Cost of St ruct ure
7,000,000
An alysis Period
100
Frequency
(Years)
Cost
Factor
Per Occurrence
Cost
Main t en an ce Cost s 1 0.05% 3,500
In spect ion Cost s 2 0.20% 14,000
Pain t in g Cost s 20 7.00% 490,000
Reh abilit at ion Cost s
First Rehabilitation 35 22.00% 1,540,000
An n ual Traffic Growt h Rat e * 0.75%
Salvage Cost s/ Value
Demolition Costs 100 10.00% 700,000
Salvage Value 100 2.00% 140,000
Net Salvage Costs 560,000
Alternative 2 - Structural Steel
Life Cycle Costs Results
Costs User Costs Total
Construction
7,000,000 (383,250) 6,616,750
Maintenance
346,500 4,215,750 4,562,250
Inspection
514,500 1,043,292 1,557,792
Painting
0 0 0
Rehabilitation
4,200,000 1,533,000 5,733,000
Salvage
700,000 700,000
Total Constant Dollars
12,761,000 6,408,792 19,169,792
Present W orth
30,235,675 21,746,666 51,982,341
Alternative 1 - Prestressed Concrete
Life Cycle Costs Results
Costs User Costs Total
Construction
7,000,000 0 7,000,000
Maintenance
346,500 4,215,750 4,562,250
Inspection
686,000 1,669,267 2,355,267
Painting
1,960,000 1,533,000 3,493,000
Rehabilitation
6,160,000 2,044,000 8,204,000
Salvage
560,000 560,000
Total Constant Dollars
16,712,500 9,462,017 26,174,517
Present W orth
48,910,066 31,365,348 80,275,414
Alternative 2 - Structural Steel
Life Cycle Costs Comparisons
Prestressed Concrete Savings
Costs User Costs Total
Constant Dol l ars 31% 48% 37%
Present Worth 62% 44% 54%
Questions?
Thank you for your Attention!