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
Present Worth

Salvage
Costs
Initial Cost
Rehabilitation Cost Maintenance and
Costs

Inspection
Cost

Years

Salvage
Value
 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/Sa-L/Sn) x ADT x N x w

L = Length of affected road way
Sa = Traffic speed during maintenance activity
Sn = 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/Sa-L/Sn) x ADT x N x r

L = Length of affected road way
Sa = Traffic speed during maintenance activity
Sn = 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 (Aa-An) x ca
L = Length of affected road way
ADT = Average daily traffic (vehicles per day)
N = number of days of maintenance activity
Aa = Accident rate during maintenance activity
An = Normal accident rate
ca = 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 dollar’s 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 Co sts In p u ts Alt erna t ive 1
Prest ressed Alt erna t ive 2
Concret e St ruct ura l St eel
Len gth of affected road way * 2.00 2.00 m iles
ADT * 5,000 5,000 veh icles p er d ay
Norm al traffic sp eed 45 45 m p h
Con stru ction traffic sp eed 20 20 m p h
Norm al accid en t rate 1.9 1.9 /m illion veh icle m iles
Con stru ction accid en t rate 2.2 2.2 /m illion veh icle m iles
Nu m ber of con stru ction d ays
Early Construction Com pletion 90 0 d ays
Maintenance 10 10 d ays/occu rren ce
Inspection 5 8 d ays/occu rren ce
Painting 0 90 d ays/occu rren ce
Rehabilitation 120 120 d ays/occu rren ce
Hou rly tim e valu e of d rivers 6.25 6.25 $/h ou r
W eigh ted average veh icle cost 8.00 8.00 $/h ou r
Cost p er accid en t 100,000 100,000 $/occu rren ce
No te*: To tal traffic affected by Main ten an ce, In sp ectio n , Pain tin g , an d Reh abilitatio n
activ ity o v er an d u n d er stru ctu re
 Discount Rate Inputs

Present Worth Factors For All Alternatives

Discount Rate 0.00%
Inflation Rate 2.00%
 Structure Costs Input
In itial Cost of Stru ctu re 7,000,000
An alysis Period 100
Alt erna t ive 1 - Prest ressed Concret e
Frequency Cost Per Occurrence
( Yea rs) Fa ct or Cost

Main ten an ce Costs 1 0.05% 3,500

In sp ection Costs 2 0.15% 10,500
Pain tin g Costs 0 0.00% 0
Reh abilitation Costs
• First Rehabilitation 40 20.00% 1,400,000
An n u al Traffic Growth Rate * 0.75%
Salvage Costs/Valu e
• Dem olition Costs 100 10.00% 700,000
• Salvage V alue 100 0.00% 0
• Net Salvage Costs 700,000
 Structure Costs Input
In itial Cost of Stru ctu re 7,000,000
An alysis Period 100
Alt erna t ive 2 - St ruct ura l St eel
Frequency Cost Per Occurrence
( Yea rs) Fa ct or Cost

Main ten an ce Costs 1 0.05% 3,500

In sp ection Costs 2 0.20% 14,000
Pain tin g Costs 20 7.00% 490,000
Reh abilitation Costs
• First Rehabilitation 35 22.00% 1,540,000
An n u al Traffic Growth Rate * 0.75%
Salvage Costs/Valu e
• Dem olition Costs 100 10.00% 700,000
• Salvage V alue 100 2.00% 140,000
• Net Salvage Costs 560,000
 Life Cycle Costs Results
Alternative 1 - Prestressed Concrete
Cost s User Cost s Tot a l
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

 Life Cycle Costs Results
Alternative 2 - Structural Steel
Cost s User Cost s Tot a l
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

Life Cycle Costs Comparisons

Prest ressed Concret e Sa vings

Cost s User Cost s Tot a l

Co n stan t Do llars 31% 48% 37%

Presen t Wo rth 62% 44% 54%

 Questions?

Thank you for your Attention!