Transportation officials most everywhere are under pressure to demonstrate wise stewardship of taxpayer dollars spent on transportation infrastructure. As a result, many transportation agencies are looking into economic tools that will help them choose the most cost-effective project alternatives and communicate the value of those choices to the public. The Federal Highway Administration (FHWA) believes that a pavement design life-cycle cost analysis (LCCA) tool can help transportation agencies with this process.
FHWA promotes LCCA as an engineering economic analysis tool that allows transportation officials to quantify the differential costs of alternative investment options for a given project. It can be used to study either new construction projects or to examine preservation strategies for existing transportation assets.
LCCA considers all agency expenditures and user costs throughout the life of an alternative, not only initial investments. More than a simple cost comparison, it offers sophisticated methods to determine and demonstrate the economic merits of the selected alternative in an analytical and fact-based manner. LCCA helps transportation agencies answer questions like these:
- Which design alternative results in the lowest total cost to the agency over the life of the project?
- To what level of detail have the alternatives been investigated?
- What are the user-cost impacts of alternative preservation strategies?