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
Costs
Initial Cost
Rehabilitation Cost
Maintenance and
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
t
MC
IC
FRC
UC
S
pwf
= First (Initial) Cost
= Time Period of Analysis
= Maintenance Costs
= Inspection Costs
= Future Rehabilitation Costs
= Users Costs
= Salvage Values or Costs
= 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
i
n
= Present Worth Factor for discount rate i
and year n
= Discount rate
= 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
Len gth of affected road way *
ADT *
Alt erna t ive 1
Prest ressed
Concret e
Alt erna t ive 2
St ruct ura l St eel
2.00
5,000
2.00 m iles
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
Maintenance
10
10 d ays/occu rren ce
Inspection
5
8 d ays/occu rren ce
Painting
0
90 d ays/occu rren ce
120
120 d ays/occu rren ce
Rehabilitation
0 d ays
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*: Total 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
Discount Rate
Inflation Rate
For All Alternatives
0.00%
2.00%
Structure Costs Input
In itial Cost of Stru ctu re
An alysis Period
7,000,000
100
Alt erna t ive 1 - Prest ressed Concret e
Frequency
( Yea rs)
Main ten an ce Costs
In sp ection Costs
Pain tin g Costs
Cost Per Occurrence
Fa ct or
Cost
1
2
0
0.05%
0.15%
0.00%
3,500
10,500
0
40
0.75%
20.00%
1,400,000
100
100
10.00%
0.00%
700,000
0
700,000
Reh abilitation Costs
• First Rehabilitation
An n u al Traffic Growth Rate *
Salvage Costs/Valu e
• Dem olition Costs
• Salvage V alue
• Net Salvage Costs
Structure Costs Input
In itial Cost of Stru ctu re
An alysis Period
7,000,000
100
Alt erna t ive 2 - St ruct ura l St eel
Frequency
( Yea rs)
Main ten an ce Costs
In sp ection Costs
Pain tin g Costs
Cost Per Occurrence
Fa ct or
Cost
1
2
20
0.05%
0.20%
7.00%
3,500
14,000
490,000
35
0.75%
22.00%
1,540,000
100
100
10.00%
2.00%
700,000
140,000
560,000
Reh abilitation Costs
• First Rehabilitation
An n u al Traffic Growth Rate *
Salvage Costs/Valu e
• Dem olition Costs
• Salvage V alue
• Net Salvage Costs
Life Cycle Costs Results
Alternative 1 - Prestressed Concrete
Cost s User Cost s
Tot a l
Construction
7,000,000
Maintenance
346,500
4,215,750
4,562,250
Inspection
514,500
1,043,292
1,557,792
0
0
0
4,200,000
1,533,000
5,733,000
Painting
Rehabilitation
Salvage
Total Constant Dollars
Present W orth
(383,250)
700,000
12,761,000
30,235,675
6,616,750
700,000
6,408,792
21,746,666
19,169,792
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
Total Constant Dollars
Present W orth
560,000
16,712,500
48,910,066
560,000
9,462,017
31,365,348
26,174,517
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!