transportation asset management guidedot.alaska.gov/stwddes/asset_mgmt/assets/tam_guide_2002.pdf ·...

Transportation AssetTransportation AssetManagement Guide

November 2002

prepared for

National Cooperative Highway Research Program(NCHRP) Project 20-24(11)

American Association of State Highway and Transportation Officials444 North Capitol Street, NWSuite 249Washington, DC 20001 Pub Code: RP-TAMG-1

Transportation Asset Management Guide

November 2002

prepared for National Cooperative Highway Research Program (NCHRP) Program 20-24(11) prepared by Cambridge Systems, Inc. with Parsons Brinckerhoff Quade & Douglas, Inc. Ray Jorgenson Associates, Inc. Paul D. Thompson, Consultant Acknowledgement of Sponsorship This work was sponsored by the American Association of State Highway and Transportation Officials, in cooperation with the Federal Highway Administration, and was conducted in the National Cooperative Highway Research Program, which is administered by the Transportation Research Board of the National Academies. Disclaimer The opinions and conclusions expressed or implied are not necessarily those of the Transportation Research Board, the National Academies, the Federal Highway Administration, the American Association of State Highway and Transportation Officials, or the individual states participating in the National Cooperative Highway Research Program.

American Association of State Highway and Transportation Officials 444 North Capitol Street, NW, Suite 249 Washington, DC 20001 Pub Code: RP-TAMG-1

American Association of State Highway and Transportation Officials

Executive Committee

2003-2004

President: John Njord, Utah Vice President: J. Bryan Nicol, Indiana Secretary/Treasurer: Larry King, Pennsylvania Regional Representatives: Region I James Byrnes, Connecticut Allen Biehler, Pennsylvania Region II Whittington Clement, Virginia Fernando Fagundo, Puerto Rico Region III Mark Wandro, Iowa Gloria Jeff, Michigan Region IV Mike Behrens, Texas Tom Norton, Colorado Immediate Past President: Dan Flowers, Arkansas Executive Director: John C. Horsley, Washington, DC


Task Force on Transportation Asset Management

Officers: Chairman: John Craig, Nebraska Vice Chairman: Greg Rosine, Michigan Liaison: Dave Ekern, AASHTO State Member Arizona (AZ) Frank McCullagh Phone Number (602) 712-3132 Research Engineer Fax Number (602) 712-3400 Arizona Department of Transportation 206 S. 17th Ave, MD 075R Phoenix, AZ 85007 Email Address [email protected] California (CA) Steve Takigawa Phone Number (916) 323-7806 California Department of Transportation Fax Number P.O. Box 942874, 1120 N Street Sacramento, CA 94274-0001 Email Address [email protected] Georgia (GA) Frank L. Danchetz P.E. Phone Number (404) 656-5277 Chief Engineer Fax Number (404) 463-7991 Georgia Department of Transportation Room 122 #2 Capitol Square, S.W. Atlanta, GA 30334-1002 Email Address [email protected] Idaho (ID) David S. Ekern P.E. Phone Number (208) 334-8807 Director Fax Number (208) 334-8195 Idaho Transportation Department P.O. Box 7129 Boise, ID 83707-1129 Email Address [email protected] Maryland (MD) Peter Stephanos Phone Number (410) 321-3100 Deputy Chief Engineer, Office of Materials and Technology Fax Number (410) 321-3099 Maryland Department of Transportation State Highway Administration 2323 West Joppa Road Brooklandville, MD 21022 Email Address [email protected]

Montana (MT) Sandra S. Straehl Phone Number (406) 444-7692 Program and Policy Analysis Fax Number (406) 444-7671 Montana Department of Transportation P.O. Box 201001 Helena, MT 59620-1001 Email Address [email protected] Nebraska (NE) John L. Craig Phone Number (402) 479-4615 Director Fax Number (402) 479-3758 Nebraska Department of Roads P.O. Box 94759 Lincoln, NE 68509-4759 Email Address [email protected] New York (NY) Thomas Clash Phone Number (518) 457-1716 Director, Statewide Planning Section Fax Number (518) 485-8276 New York Department of Transportation Statewide Planning Building 5, State Office Campus 1220 Washington Avenue Albany, NY 12232 Email Address [email protected] Timothy J. Gilchrist Phone Number (518) 457-6700 Director, Planning and Strategy Fax Number (518) 485-8276 New York Department of Transportation Building 5, State Office Campus 1220 Washington Avenue Albany, NY 12231-0414 Email Address [email protected] Pennsylvania (PA) Gary L. Hoffman Phone Number (717) 787-6875 Deputy Secretary for Highway Administration Fax Number (717) 787-5491 Pennsylvania Department of Transportation Keystone Building, 8th Floor 400 North Street Harrisburg, PA 17120-0095 Email Address [email protected] South Carolina (SC) Carl Chase Phone Number (803) 737-1960 Assets Manager Fax Number (803) 737-2038 South Carolina Department of Transportation P.O. Box 191 Columbia, SC 29202-0191 Email Address [email protected] Tennessee (TN) Michael R. Shinn Phone Number (615) 741-5374 Chief of Administration Fax Number (615) 741-0865 Tennessee Department of Transportation James K. Polk Building, Suite 700 505 Deaderick Street Nashville, TN 37243-0339 Email Address [email protected] Virginia (VA) Mary Lynn Tischer Ph.D. Phone Number (804) 225-2813 Advisor to the Governor on Transportation Reauthorization Fax Number (804) 786-2940 Virginia Department of Transportation 1401 East Broad Street Richmond, VA 23219 Email Address [email protected]

Washington (WA) John F. Conrad Phone Number (360) 705-7032 Assistant Secretary Fax Number (360) 705-6823 Washington State Department of Transportation Engineering and Regional Operations P.O. Box 47316 Olympia, WA 98504 Email Address [email protected] Wisconsin (WI) Mark J. Wolfgram Phone Number (608) 266-5791 Administrator Fax Number (608) 267-1856 Wisconsin Department of Transportation Transportation Investment Management P.O. Box 7913 Madison, WI 53707-7913 Email Address [email protected] U.S. DOT Member District of Columbia (DC) Frank Botello Phone Number (202) 366-1336 Leader, System Mngt and Monitoring Team Fax Number (202) 366-9981 Federal Highway Administration System Mngt and Monitoring Team 400 7th Street, S.W., Room 3211 Washington, DC 20590 Email Address [email protected] Regina McElroy Phone Number (202) 366-9216 Leader, Evaluation and Economic Investment Team Fax Number (202) 366-9981 Federal Highway Administration Office of Asset Management HIAM-33, Room 3211 400 7th Street, S.W. Washington, DC 20590 Email Address [email protected] David Winter Phone Number (202) 366-4631 Evaluation and Economic Investment Team Fax Number (202) 366-9981 Federal Highway Administration Room 3211 400 7th Street, S.W. Washington, DC 20590 Email Address [email protected] Florida (FL) James E. St. John Phone Number (850) 942-9650 Division Administrator, Florida Fax Number (850) 942-9691 Federal Highway Administration 227 N. Bronough Street, Suite 2015 Tallahassee, FL 32301-1330 Email Address [email protected]

AASHTO District of Columbia (DC) Jim McDonnell P.E. Phone Number (202) 624-5448 Associate Program Director for Engineering Fax Number (202) 624-5469


444 North Capitol Street, N.W., Suite 249 Washington, DC 20001 Email Address [email protected] Affiliate Member Nova Scotia (NS) Kenton Speiran Phone Number (902) 424-3510 Manager, Asset Systems Fax Number (902) 424-0571

Nova Scotia Department of Transportation and Public Works

P.O. Box 186 Halifax, NS B3J 2N2 Email Address [email protected]

FOREWORD

Transportation Asset Management Guide i

State transportation officials at all levels face the taskof managing a wide range of assets to meet public,agency, and legislative expectations. These assetsinclude the physical transportation infrastructure(e.g., guideways, structures, and associated featuresand appurtenances) as well as other types of assets:e.g., an agency’s human resources, financial capacity,equipment and vehicle fleets, materials stocks, realestate, and corporate data and information.

Recognizing its growing importance to transportationagencies worldwide, the American Association ofState Highway and Transportation Officials(AASHTO) in 1998 adopted transportation asset man-agement as a priority initiative. AASHTO created aTask Force, reporting to the Board of Directors, toguide this national initiative and to develop andimplement a Transportation Asset ManagementStrategic Plan. To respond to several tasks in thisStrategic Plan, the National Cooperative HighwayResearch Program (NCHRP) awardedProject 20-24(11) to a study team headed byCambridge Systematics, Inc. The goal of this NCHRPproject is to develop information on transportationasset management and to apply these findings in pro-ducing a Transportation Asset Management Guide foruse by AASHTO members and other transportationagencies. The Guide is designed to help agenciesdevelop and apply the principles, techniques, andtools that can advance the management of their trans-portation assets.

The overall management framework that has beendeveloped in this study is flexible enough to beadapted and refined for use with, respectively, eachtype of transportation agency asset listed above. Todevelop the depth as well as breadth of materialneeded to build a meaningful first-editionTransportation Asset Management Guide, however,the scope of this study has focused on the particularset of assets that constitutes an agency’s transporta-tion infrastructure. This concentration enables assetmanagement principles, methods, examples, andresearch recommendations to be developed in a con-crete, practical, and understandable way. It facilitatescomparisons with corresponding work by transporta-tion agencies overseas and by the private sector,which have for the most part adopted a similar scopein their studies. It provides a specific frame of refer-ence within which differences among state depart-ments of transportation (DOT) can be addressed byparticular business management models, approaches,and procedures.

This study therefore interprets transportation assetmanagement as a strategic approach to managingphysical transportation infrastructure. Transporta-tion asset management in this context promotes moreeffective resource allocation and utilization basedupon quality information. This concept covers abroad array of DOT functions, activities, and deci-sions: e.g., transportation investment policies; insti-tutional relationships between DOTs and other publicand private groups; multimodal transportation plan-ning; program development for capital projects andfor maintenance and operations; delivery of agencyprograms and services; and real-time and periodicsystem monitoring. All of these management proc-esses have important implications for an agency’sattainment of its goals in public policy, financialresource availability, engineering standards and crite-ria, maintenance and operations levels of service, andoverall system performance.

A number of support activities are involved as well.Information technology can inform many of thesemanagement processes, and agencies have alreadyexpended considerable sums to develop asset man-agement systems, databases, and other analytic tools.These systems must, however, complement thedecision-making processes and organizational struc-tures of individual agencies if they are to operateeffectively and support good asset management at allorganizational levels. Effective communication ofinformation on asset management between an agencyand its governing bodies, stakeholders, and customersis likewise critical to success.

The objectives of this study have been to gatherinformation on asset management practices in theUnited States and overseas, develop a framework fortransportation asset management, and apply thisframework to produce a Transportation AssetManagement Guide. The study has been organized intwo phases:

� Phase I encompassed information gathering,framework development, and recommendationof a research program; and

� Phase II has produced this Guide.

Foreword

ii Transportation Asset Management Guide

The work in Phase I has been documented in threereports:

1. A comprehensive framework for transportationasset management that established the basis fordeveloping this Guide;

2. A synthesis of current information and practices inasset management; and

3. A prioritized program of research in assetmanagement.

This Guide builds on this earlier work to provide stateDOTs and other transportation agencies guidance onimplementing asset management concepts and prin-ciples within their business processes. At its core,asset management deals with an agency’s decisions inresource allocation and utilization in managing itssystem of transportation infrastructure. Asset man-agement is a way of looking at an agency’s “way ofdoing business” to see if there are better ways to reachdecisions in infrastructure management – e.g., bybasing decision methods and criteria on current policyguidance, considering a range of alternatives, focusingon outcomes of decisions, and applying more objec-tive information to decisions.

Asset management therefore relates to existing agencyfunctions – e.g., participating in and informing thedevelopment of transportation policies, long-rangeplanning, priority programming and development ofthe statewide transportation improvement program(STIP), delivering programs and services, and moni-toring system condition. It is not a separate functionon its own, nor is it a complete departure from currentpractice. In fact, while all agencies reflect good assetmanagement to some degree in their daily operations,all have room for improvement: “Everyone is doingsomething, but no one is doing everything.” Theintent of this Guide is to provide individual agencieswith the flexibility to tailor and customize their assetmanagement efforts to their particular needs andsituations, with an effort as broad or as narrow as theychoose to undertake. The Guide provides a self-assessment exercise to assist agencies in identifyingwhere they may wish to focus their asset managementefforts.

This edition is the initial version of the TransportationAsset Management Guide. It will assist transportationagencies in becoming familiar with the ideas andtechniques by which asset management can influence

their resource allocation and utilization processes anddecisions. Since transportation asset management is acontinually and rapidly evolving field, the AASHTOStrategic Plan envisions periodic updates of thisGuide to reflect changes in transportation policy andto be able to report current DOT experiences andpractices. The Strategic Plan also recommends anumber of tasks and research efforts, results of whichwill likewise be useful additions to future versions ofthis Guide.

TABLE OF CONTENTS

Transportation Asset Management Guide iii

FORWARD............................................................................................................................................................ i

SUMMARY ............................................................................................................................................................... S-1

S.1 Strategic Infrastructure Management .................................................................................................... S-1S.2 Goals and Benefits of Asset Management ............................................................................................. S-1S.3 Principles of Asset Management ............................................................................................................ S-2S.4 Management Framework and Self-Assessment ................................................................................... S-2S.5 Organization of the Guide....................................................................................................................... S-3

1.0 INTRODUCTION ...................................................................................................................................... 1-1

1.1 Transportation Asset Management........................................................................................................ 1-11.2 Benefits and Outcomes ............................................................................................................................ 1-31.3 Building on Previous Work..................................................................................................................... 1-41.4 Getting Started .......................................................................................................................................... 1-7

2.0 FRAMEWORK AND PRINCIPLES .................................................................................................... 2-1

2.1 Developing the Concept .......................................................................................................................... 2-12.2 Principles of Good Practice ..................................................................................................................... 2-42.3 Management Framework ........................................................................................................................ 2-82.4 Customizing and Asset Management Approach ................................................................................. 2-13

3.0 SELF-ASSESSMENT................................................................................................................................ 3-1

3.1 Introduction to Self-Assessment............................................................................................................. 3-13.2 Self-Assessment Exercise......................................................................................................................... 3-33.3 Where Next?.............................................................................................................................................. 3-8

4.0 DEVELOPING A STRATEGY .............................................................................................................. 4-1

4.1 Setting the Stage........................................................................................................................................ 4-14.2 Define the Scope of Asset Management ................................................................................................ 4-64.3 Establish Roles and Responsibilities ...................................................................................................... 4-84.4 Build an Action Plan ................................................................................................................................ 4-8

5.0 POLICY GOALS AND OBJECTIVES ............................................................................................... 5-1

5.1 Introduction............................................................................................................................................... 5-15.2 Role of Policy Guidance........................................................................................................................... 5-15.3 Improved Policy-Making......................................................................................................................... 5-25.4 Relating Policy to Performance............................................................................................................... 5-45.5 Playing a Proactive Role in Policy Formulation ................................................................................... 5-6

TABLE OF CONTENTS (CONTINUED)

iv Transportation Asset Management Guide

6.0 PLANNING AND PROGRAMMING ............................................................................................... 6-1

6.1 Introduction............................................................................................................................................... 6-16.2 Long-Range Planning............................................................................................................................... 6-16.3 Capital Programming Process ................................................................................................................ 6-66.4 Program Structure and Definition.......................................................................................................... 6-126.5 Maintenance and Operations Programming ........................................................................................ 6-15

7.0 PROGRAM DELIVERY .......................................................................................................................... 7-1

7.1 Overview ................................................................................................................................................... 7-17.2 Alternative Delivery Methods ................................................................................................................ 7-17.3 Program Management ............................................................................................................................. 7-97.4 Cost Tracking ............................................................................................................................................ 7-13

8.0 INFORMATION AND ANALYSIS .................................................................................................... 8-1

8.1 Overview ................................................................................................................................................... 8-18.2 Information Needs and Data Quality .................................................................................................... 8-18.3 Data Integration and Accessibility ......................................................................................................... 8-78.4 Decision Support ...................................................................................................................................... 8-108.5 Systems Monitoring and Feedback ........................................................................................................ 8-178.6 Reporting and Documentation ............................................................................................................... 8-20

9.0 IMPLEMENTATION................................................................................................................................. 9-1

9.1 Introduction............................................................................................................................................... 9-1

9.2 Example First Steps .................................................................................................................................. 9-1

9.3 Looking to the Long Term....................................................................................................................... 9-3

9.4 Final Thoughts .......................................................................................................................................... 9-8

GLOSSARY............................................................................................................................................................... G-1

LIST OF TABLES

Transportation Asset Management Guide v

2.1 Examples of How Asset Management May Influence Current Business Practices ..................................... 2-6

2.2 Policy Goals and Objectives................................................................................................................................. 2-9

2.3 Planning and Programming ................................................................................................................................ 2-10

2.4 Program Delivery.................................................................................................................................................. 2-11

2.5 Information and Analysis .................................................................................................................................... 2-11

3.1 Policy Guidance Diagnostic................................................................................................................................. 3-10

3.2 Planning and Programming ................................................................................................................................ 3-11

3.3 Program Delivery Diagnostic .............................................................................................................................. 3-12

3.4 Information and Analysis Diagnostic................................................................................................................. 3-13

4.1 Sample Implementation Plan Format................................................................................................................. 4-12

6.1 Examples of Potential Tradeoffs Between Types of Program Investments .................................................. 6-10

6.2 Illustration of a Tradeoff Analysis ...................................................................................................................... 6-11

7.1 Delivery Method Summary ................................................................................................................................. 7-10

7.2 Examples of Program Delivery Performance Measures .................................................................................. 7-12

7.3 Cost Data Types and Uses ................................................................................................................................... 7-13

7.4 FMS versus MMS Cost Tracking Comparisons ................................................................................................ 7-14

LIST OF FIGURES

Transportation Asset Management Guide vii

1.1 FHWA’s Overview of Transportation Asset Management ........................................................................... 1-5

2.1 Example Resource Allocation and Utilization Process in Asset Management ........................................... 2-2

2.2 Managed Business Process................................................................................................................................. 2-4

4.1 Policies Support Preservation............................................................................................................................ 4-2

4.2 Life-Cycle-Cost Approach Used for Asset Preservation................................................................................ 4-2

4.3 Policies Support Life-Cycle Approach ............................................................................................................. 4-3

4.4 Policy Guidance Supports Performance-Based Approach ............................................................................ 4-3

4.5 Agency Proactively Works with Policy-Makers ............................................................................................. 4-3

4.6 Long-Range Plans Provide Programming Guidance ..................................................................................... 4-4

4.7 Evaluation Criteria Are Consistent with Policies............................................................................................ 4-4

4.8 Alternative Delivery Options Evaluated.......................................................................................................... 4-5

4.9 Process for Program Adjustments..................................................................................................................... 4-5

4.10 Sufficient Condition Information Collected .................................................................................................... 4-5

4.11 System Models Reflect Actual Asset Deterioration Rates.............................................................................. 4-6

5.1 Policy Goals and Objectives within Resource Allocation and Utilization................................................... 5-1

6.1 Planning and Programming within Resource Allocation and Utilization .................................................. 6-1

6.2 Example of Information for Use in a Planning Tradeoff Analysis ............................................................... 6-5

6.3 Original Program Structure ............................................................................................................................... 6-13

6.4 New, More Streamlined Program Structure.................................................................................................... 6-13

6.5 Maintenance Quality Assurance Framework.................................................................................................. 6-17

7.1 Program Delivery within Resource Allocation and Utilization.................................................................... 7-1

7.2 Virginia DOT Maintenance Outsourcing Map................................................................................................ 7-8

8.1 Information and Analysis within Resource Allocation and Utilization ...................................................... 8-1

8.2 Data Improvement Model.................................................................................................................................. 8-2

8.3 Typical Infrastructure Management Systems.................................................................................................. 8-11

8.4 Typical Management Systems in Transportation Operations, Safety, and Customer Service ................. 8-12

8.5 Typical Systems to Manage Agency Resources .............................................................................................. 8-13

8.6 Typical Systems to Manage Programs and Projects ....................................................................................... 8-14

8.7 Example of Budget Scenarios and Effects on Infrastructure Condition ...................................................... 8-16

8.8 Resulting Relationship Between Infrastructure Condition and Needed Expenditure .............................. 8-16

8.9 Feedback Loops within Resource Allocation and Utilization ....................................................................... 8-17

List of Figures (continued)

viii Transportation Asset Management Guide (Panel Review)

SUMMARY

Transportation Asset Management Guide S-1

S.1 STRATEGIC INFRASTRUCTUREMANAGEMENT

Transportation asset management represents a strategicapproach to managing transportation infrastructureassets. It focuses on a department of transportation’s(DOT) business processes for resource allocation andutilization with the objective of better decision-makingbased upon quality information and well-definedobjectives. Recognizing its growing importance totransportation agencies worldwide, the AmericanAssociation of State Highway and TransportationOfficials (AASHTO) in 1998 adopted asset managementas a strategic initiative, and formed a Task Force todevelop and implement a Strategic Plan forTransportation Asset Management.1 This NCHRPProject 20-24(11) has completed several tasks in theAASHTO Strategic Plan:

� Task 2-1-1 – Identify and document the state-of-the-art in asset management, specifically applica-ble to the state departments of transportation.

� Task 2-2-1 – Identify and document the state-of-the-practice in asset management among theAASHTO member states.

� Task 2-3-1 – Identify knowledge and technologygaps and define future research projects.

� Task 2-4-1 – Propose a generic framework fortransportation asset management that can beadopted by member states to meet their indi-vidual needs.

� Task 5-1-1 – Develop an AASHTO Guide forTransportation Asset Management.

S.2 GOALS AND BENEFITS OFASSET MANAGEMENT

The value of asset management will be reflected in itsoutcomes and benefits to transportation agencies andtheir customers. The key principles of asset manage-ment represent a way of doing business – a perspec-tive that a department can adopt in looking at itscurrent procedures and seeing how better decisions on

1 This Strategic Plan was adopted by the AASHTOBoard of Directors in December 2000.

infrastructure management can be made with betterinformation. The goals of asset management are to:

� Build, preserve, and operate facilities more cost-effectively with improved asset performance;

� Deliver to an agency’s customers the best valuefor the public tax dollar spent; and

� Enhance the credibility and accountability ofthe transportation agency to its governingexecutive and legislative bodies.

Asset management can touch nearly every aspect of atransportation agency’s business, including planning,engineering, finance, programming, construction,maintenance, and information systems. Asset man-agement should not be viewed, however, as yetanother new program, requiring another newbureaucracy. Rather, asset management is a “way ofdoing business.” It brings a particular perspective tohow an agency conducts its existing procedures,reaches decisions, and applies its IT capabilities. Itsuggests principles and techniques to apply in policy-making, planning, project selection, program trade-offs, program delivery, data gathering, andmanagement system application. This Guide isdesigned to help you identify where improvements inthese processes can be made, and to suggest ideas andmethods to do so. It will enable you to answer thefollowing questions:

� How can your agency improve the way it cur-rently is managing its assets?

� Are current and planned initiatives sufficient, ordo they require modification, addition, orredirection?

� What approaches may work well in your agencyor have worked well in other agencies similar toyours?

The benefits of asset management may be seen inmany different ways, depending upon an agency’stransportation system, management philosophy, andcurrent resources and priorities. Following are somepossible outcomes when an agency takes action toimprove its asset management practices:

� Lower long-term costs for infrastructurepreservation;

� Improved performance and service tocustomers;

Summary

S-2 Transportation Asset Management Guide

� Improved cost-effectiveness and use of availableresources;

� A focus on performance and outcomes; and

� Improved credibility and accountability fordecisions and expenditures.

S.3 PRINCIPLES OF ASSETMANAGEMENT

� Asset Management Is a Strategic Approach. Astrategic perspective takes a long view of infra-structure performance and cost, and consideringoptions in a comprehensive, proactive, andinformed way. It is driven by policy goals andobjectives and relies on systematic assessmentsof asset performance and cost in making deci-sions on future actions.

� Asset Management Encompasses MultipleBusiness Processes. Asset managementencompasses a number of business processesrelated to infrastructure management in DOTs,including those related to planning, programdevelopment and recommendation, engineeringof projects and services, and program delivery.Decisions on allocating resources are policy-driven and performance-based, consider a rangeof alternatives, have clear criteria for decision-making, and investigate the most cost-effectivesolutions through analyses of tradeoffs. Thebusiness processes are managed to elicit effec-tive contributions from all levels of the organi-zation, and to foster communications on assetmanagement needs and accomplishments bothwithin and outside the agency.

� Asset Management Relies on GoodInformation and Analytic Capabilities. Qualityinformation – accurate, complete, timely – isimportant at all stages of asset management.Information technology is a practical necessityin supporting asset management, although thereare many ways in which automated techniquescan be beneficially applied.

S.4 MANAGEMENT FRAMEWORKAND SELF-ASSESSMENT

This Guide formalizes the principles above within amanagement framework that agencies can apply to

guide improvement in their asset management prac-tice. This framework is organized within a set ofevaluation matrices that structure the concepts, prin-ciples, and “ideal” practices of asset management infour major areas:

� Policy goals and objectives, including the roleof policy formulation in asset management andways in which policy guidance can benefit fromimproved asset management;

� Planning and programming, focusing on bestpractices in reaching decisions on resource allo-cation for investments in transportationinfrastructure;

� Program delivery, looking at options in resourceutilization and management methods to deliverprograms and services; and

� Information and analysis, including use ofinformation technology (IT) at each stage ofasset management; monitoring of assetperformance and feedback of this information toimprove decision processes in the future; andreporting and communication of key informa-tion and results.

In each of these areas the matrices build the manage-ment framework through descriptions of thefollowing information:

� Basic characteristics of good asset managementpractice applicable to transportation agencies;

� Specific evaluation criteria for each characteris-tic; and

� The current state-of-the-art practice for eachcriterion.

While the specific entries in these matrices reflect theorganizational, institutional, and financial setting ofstate DOTs in the United States, the underlying prin-ciples of asset management are applicable more gen-erally to other transportation agencies.

These matrices are the foundation of the approach totransportation asset management presented in thisGuide. Subsequent chapters in the Guide developmore specific information in each of the major areasabove, illustrating how the concepts, principles, andtechniques of asset management can apply to a par-ticular agency.

In addition to this management framework, the Guidealso provides a method for agencies to assess current

Summary

Transportation Asset Management Guide S-3

asset management practices within their own organi-zations and to determine what areas of asset man-agement may need improvement or be given priority.While the evaluation matrices describe state-of-the-art, or “benchmark,” practices as guidelines, DOTsmay elect to focus on specific areas for improvement,to work toward benchmark practices in stages, or toadopt practices that differ from the benchmarks toaccommodate particular agency needs, priorities, orconstraints. This method consists of a self-assessmentthat can be conducted with the agency’s executivesand senior managers in functional areas that will becritical to asset management implementation. Theself-assessment can be used to identify existingagency functions that conform well to asset manage-ment best-practice; to identify other areas whereimprovement may be beneficial; to build agreementon priorities in asset management improvement; andto reach a consensus among organizational units onan agenda for asset management implementation.

The self-assessment is structured in very simple state-ments that managers can respond to, and does not takelong to complete. The self-assessment exercise can thensuggest other portions of the Guide that agency man-agers can consult for additional information.

S.5 ORGANIZATION OF THEGUIDE

The Guide is structured in the following parts:

� Chapters 1 and 2 define transportation assetmanagement, provide background informationon past work in the field, and develop a frame-work for asset management of transportationinfrastructure that is appropriate to U.S. DOTs.

� Chapter 3 contains the self-assessment exercisethat agencies can apply to identifying areaswhere asset management improvement may behelpful.

� Chapter 4 describes how to develop an assetmanagement implementation strategy and plan,based on the results of the self-assessment above.It stresses that the role of the Guide is to help anagency shape its own asset management imple-mentation plan, tailoring and customizing theprinciples and techniques in the Guide to its par-ticular situation, capabilities, and expectations.

� Chapters 5 through 8 describe asset manage-ment concepts, principles, and techniques thatapply to several agency functions in managingtransportation infrastructure and decisions inresource allocation and utilization:

- Policy formulation;

- Planning and priority programming;

- Program delivery; and

- Information and analytic support, includingthe role of information technology, transpor-tation system performance monitoring andfeedback, and communication and reporting.

� Chapter 9 concludes the Guide with a discussionof implementation issues.

1. INTRODUCTION

Transporation Asset Management Guide 1-1

1.1 TRANSPORTATION ASSETMANAGEMENT

1.1.1 BACKGROUND

WELCOME!

This Transportation Asset Management Guide hasbeen developed for you – a transportation agencyexecutive or manager. This Guide helps you toexamine, strategically and systematically, howinvestment decisions affecting your transportationinfrastructure are made. It helps you to identify areasand priorities for possible improvement through ini-tial and periodic self-assessment and benchmarking.It provides ideas, methods, and examples to accom-plish more effective resource allocation and utiliza-tion. It does all of this by developing and applyingthe principles and practices of what is referred to as“transportation asset management.”

This Guide has been structured to help you addressyour asset management needs in several ways. Somepointers on different ways to use this Guide are pro-vided in Section 1.4. First, though, some basics on theformat of the Guide and its features:

� Discussions and explanations of asset manage-ment are normally in the double-column formatillustrated on this page. Tables and figures areinterspersed as needed.

� Points of special attention or importance areemphasized by calling them out in text boxes.

� Examples or case studies that illustrate usefullessons in asset management are described in atext box (see below).

Case Study ExampleExamples of agency practice that illustrate useful lessons inasset management will be described in a format like this.

� Annotations and citations of sources are listed infootnotes.

� Chapters covering technical material mayinclude a section at the end labeled “FurtherInformation.” These sections include additionalbibliographic and web site references where you

can obtain additional information on relatedtopics or examples of agency practice.

MANAGING MANY “ASSETS”

Transportation officials manage a wide range of“assets” to meet public, agency, and legislativeexpectations. These assets include the physicalinfrastructure of the transportation system (e.g.,guideways, structures, and associated features, utili-ties, and appurtenances) as well as other types ofassets: e.g., an agency’s human resources, financialcapacity, equipment and vehicle fleets, materialsstocks, real estate, and corporate data and informa-tion. The overall management framework that isdeveloped in this Guide is flexible enough to beadapted and refined for use with each type of trans-portation agency asset listed above.

To provide the depth needed for meaningful explana-tions and examples, however, the scope of this Guidefocuses on the particular set of assets that constitutes anagency’s transportation infrastructure. This concen-tration enables asset management principles, methods,and examples to be developed in a concrete, practical,and understandable way. It facilitates comparisonswith corresponding work by transportation agenciesoverseas and by the private sector, which have for themost part adopted a similar scope in their studies. Itprovides a specific frame of reference within which dif-ferences among state departments of transportation(DOT) can be addressed by particular business man-agement models, approaches, and procedures.

Transportation infrastructure provides critical nationallifelines for commerce, commuting and pleasure travel,support of national defense, and disaster response.Transportation facilities account for a major share ofpublic-sector investment, and are among the mosthighly valued financial assets of state and local gov-ernments. Among transportation modes, the U.S.highway infrastructure itself represents an estimated$1 trillion in replacement value.1 Expenditures tobuild, operate, preserve, and improve transportationinfrastructure are critical to meeting national goals ofeconomic progress, social welfare, national defense,domestic security, environmental protection, andemergency preparedness. Transportation officials at alllevels are faced with the responsibility of making the

1 Anthony R. Kane, “Why Asset Management is MoreCritically Important Than Ever Before,” PublicRoads, March-April 2000.

1. Introduction

1-2 Transporation Asset Management Guide

best possible use of limited resources to manage a widerange of transportation assets in a way that responds tothese important objectives and satisfies the needs oftransportation users – their customers.

As Used in this Guide…Asset Management is a strategic approach to managingtransportation infrastructure.

1.1.2 A STRATEGIC APPROACH

This Guide therefore defines and treats transportationasset management as a set of concepts, principles, andtechniques leading to a strategic approach to manag-ing transportation infrastructure. Transportationasset management enables more effective resourceallocation and utilization, based upon quality infor-mation and analyses, to address facility preservation,operation, and improvement. This concept covers abroad array of DOT functions, activities, and deci-sions: e.g., transportation investment policies andpriorities; relationships and partnerships betweenDOTs and other public and private groups; long-range, multimodal transportation planning; programdevelopment for capital projects and for maintenanceand operations; delivery of agency programs andservices; and real-time and periodic system monitoringand data processing. All of these actions areaccomplished within the limits of available funding.

A number of support activities are involved as well.Information technology (IT) can inform many of thesemanagement processes, and agencies have alreadyexpended considerable sums to develop asset man-agement systems, databases, and other analytic tools.These systems must, however, complement decision-making processes and organizational roles andresponsibilities if they are to operate effectively andsupport good asset management at all organizationallevels. Effective communication of information onasset management between an agency and its gov-erning bodies, stakeholders, and customers is likewisecritical to success.

The definition of asset management above is intention-ally broad. It recognizes that there are differences inneeds and priorities across agencies in how they man-age their infrastructure. For example, those agencieswith mature transportation systems may concentrateasset management on strategies to facilitate preserva-

tion (e.g., through preventive maintenance, or newmaterials and technology) and to gain greater opera-tions efficiencies (e.g., by deploying intelligent trans-portation systems (ITS) devices and building urbanoperations centers). Those agencies facing strongpopulation and economic growth may need to includesystem capacity improvement (including constructionof new facilities), together with preservation andoperations, in their implementation of asset manage-ment. Regardless of the scope and areas of prioritywith which transportation agencies view asset man-agement, all agencies will benefit from having a strong,performance-based approach backed by credibleinformation. A basic premise of this Guide is that“good asset management” involves applying generalprinciples smartly, effectively, and tactically to resourceallocation and utilization – the heart of asset manage-ment. Actions can be tailored to particular situations,but generally will include core elements such as thefollowing:

� Well-defined policies that can be related to clearobjectives and measures of performance;

� Organizational roles and responsibilities andbusiness processes that reflect these policy andperformance objectives;

� A reliance on good information at all stages ofinfrastructure management, and the capabilityto develop and continually update this informa-tion base;

� Examination of a range of options for solvinginfrastructure problems;

� A comprehensive decision-making approach totransportation investment, viewing the trans-portation system as an integrated whole, andconsidering tradeoffs among modes and catego-ries of investment;

� An ability to deliver capital, maintenance, andoperations programs in terms of time, cost,engineering quality, and effective use ofdepartmental and outside resources; and

� Management emphasis on customer service andaccountability for system performance and cost-effectiveness.

In summary, the notion of asset management as a“strategic approach to managing transportation infra-structure” can be understood as “getting the best resultsor performance for the preservation, improvement, andoperation of infrastructure assets given the resources

1. Introduction


available.” The specific concepts, principles, and prac-tices that characterize the asset management approachto achieve these ends are developed in Chapter 2.

1.2 BENEFITS AND OUTCOMES

The goals of asset management are to:

� Build, preserve, and operate facilities more cost-effectively with improved performance;

� Deliver to an agency’s customers the best valuefor the public tax dollar spent; and

� Enhance the credibility and accountability ofthe transportation agency.

Asset management can touch nearly every aspect of atransportation agency’s business, including planning,engineering, finance, programming, construction,maintenance, and information systems. Asset man-agement should not be viewed, however, as yetanother new program, requiring another newbureaucracy. Rather, asset management is a “way ofdoing business.” It brings a particular perspective tohow an agency conducts its existing procedures,reaches decisions, and applies its IT capabilities. Itsuggests principles and techniques to make betterdecisions based on better information in policy andplanning, capital programming and project selection,maintenance budgeting, program delivery and man-agement, data gathering, and management systemapplication. This Guide is designed to help you iden-tify where improvements in your existing processes canbe made, and to suggest ideas and methods to do so. Itwill enable you to answer the following questions:

� How can your agency improve asset performance?

� Are current and planned agency initiatives ininfrastructure management sufficient, or do theyrequire modification, addition, or redirection?

� What infrastructure management approachesand techniques have worked well in other agen-cies similar to yours?

The benefits of asset management may be seen inmany different ways, depending upon an agency’stransportation system, management philosophy, andcurrent resources and priorities. Following are somepossible outcomes when an agency takes action toimprove its asset management practices:

� Lower long-term costs for infrastructurepreservation;

� Improved performance and service tocustomers;

� Improved cost-effectiveness and use of availableresources;

� A focus on performance and outcomes; and

� Improved credibility and accountability fordecisions.

What “Quick Gains” Can AssetManagement Provide?

� A snapshot of current infrastructure condition and per-formance – its status, what has been accomplished,areas of need.

� A framework for understanding investment needs –whether for structural repair, congestion mitigation,preservation of asset value, safety, operational improve-ments, environmental protection (e.g., at what locationsand relative values?)

� A direct way to tie public perceptions of agency perform-ance to your agency’s methods of identifying andselecting projects and prioritizing services.

� Something better than anecdotal stories – facts, figures,and systematic methods by which to justify neededinvestments or additional resources.

� A “key to competition” – helping your agency to competefor scarce program funding, helping your staff to competewith other potential service providers in the quality andcost-effectiveness of their actions, and helping yourorganizational units to “sharpen their thinking” in lookingfor new ways to solve problems and delivering qualityservices cost-effectively.

Achieving these benefits requires a willingness toevaluate current business practices and to take stepsto improve where needed. Successful business proc-ess improvement will require:

� Strong executive leadership;

� Buy-in by managers and staff at all organiza-tional levels;

� A multi-disciplinary perspective within theagency; and

� A sustained and consistent commitmentthrough implementation.

1. Introduction


1.3 BUILDING ON PREVIOUSWORK

This Guide is an outgrowth of earlier work by theAmerican Association of State Highway andTransportation Officials (AASHTO) and the FederalHighway Administration (FHWA) to promote theunderstanding and application of asset managementin the U.S. transportation industry. It also comple-ments work by transportation and public works agen-cies abroad and by private-sector firms to develop andapply concepts and techniques of asset managementfor their respective inventories of infrastructure.

Other Useful ResourcesAsset Management Primer. Published by FHWA Office ofAsset Management. Explains how early asset managementconcepts relate to U.S. transportation organizations.AASHTO’s Strategic Plan for Transportation AssetManagement. Establishes AASHTO’s agenda foradvancing asset management practice over the next 10years.Asset Management for the Roads Sector. Published byOrganization for Economic Cooperation and Development(OECD). Documents asset management efforts by 13 mem-ber countries.NCHRP Transportation Asset Management GuidancePhase I Study Reports, NCHRP Project 20-24(11):www4.nas.edu/trb/onlinepubs.nsf/web/nchrp_web_documents“Transportation Asset Management Today” – aCommunity of Practice web site:http://assetmanagement.transportation.orgFHWA Office of Asset Management web site:http://www.fhwa.dot.gov/infrastructure/asstmgmt/TRB Research & Technology Forum web site:www4.nas.edu/trb/homepage.nsf/web/r&t_forum

1.3.1 AASHTO

In 1998 AASHTO formed a Task Force to develop andimplement a 10-year Strategic Plan on TransportationAsset Management.2 This Strategic Plan has five goals:

2 AASHTO Task Force on Transportation AssetManagement, Strategic Plan 2000-2010, adoptedDecember 2000.

1. To establish partnerships with other agencies andstakeholders in pursuing asset management;

2. To promote a better understanding of asset man-agement and how it can be used by member states;

3. To foster the development of better asset manage-ment techniques, tools, and associated research;

4. To communicate with and inform the leadership ofmember states on how they can use asset man-agement; and

5. To assist member states as they evaluate and useasset management.

AASHTO’s Board of Directors approved this StrategicPlan in December 2000. The AASHTO Task Forcenow continues its active involvement in promoting awider understanding and use of transportation assetmanagement among its member agencies:

� It meets several times each year to review prog-ress on its Strategic Plan and to identify nextsteps.

� It reviews research priorities annually and rec-ommends specific topics supporting asset man-agement to AASHTO’s Standing Committee onResearch (SCOR).

� Its members have participated in the Pilotoffering of a National Highway Institute (NHI)training course on this Guide, and provided keyinput to the final versions of both the NHIcourse and the first edition of this document.

1.3.2 FHWA

The FHWA has established its Office of AssetManagement to provide leadership, technical assis-tance, and advocacy for more systematic managementof highway infrastructure as a public investment. Itplays a strong role in promoting several concepts andmethods useful to asset management:

� System preservation;

� Management systems for pavements, bridges,tunnels, and road hardware;

� Economic analysis of system investments;

� New technology;

1. Introduction


� Training and research; and

� Outreach and partnering activities.

It works with the public and private sector and academiato conduct nationwide programs in asset management.

An Asset Management Primer developed by theFHWA in 1999 describes transportation asset man-agement as a systematic, fact-based, and reproducibledecision-making approach to analyzing the tradeoffsbetween investments and improvement decisions atthe system and project levels. (See Figure 1.1.)

Figure 1.1 FHWA’s Overview of TransportationAsset Management

Goals and Policies

Asset Inventory

Performance Monitoring

Condition Assessmentand Performance Modeling

Alternatives Evaluationand Program Optimization

Short- and Long-Range Plans(project selection)

Program Implementation

Budget/Allocations

The Primer’s definition of assets includes physicalinfrastructure, operational hardware, equipment,vehicles, real estate, materials, human resources, anddata. The FHWA has produced several other docu-ments on matters useful to transportation asset man-agement, including primers on data integration andon the financial reporting standards of theGovernmental Accounting Standards Board’sStatement 34 (GASB 34).3

3 The documents produced by FHWA’s Office of AssetManagement include: Asset Management Primer(December 1999), Primer: GASB 34 (November2000), and Data Integration Primer (August 2001).

1.3.3 ASSET MANAGEMENT WORKSHOPS

In 1996 AASHTO and the FHWA began co-sponsoringa series of workshops on asset management practicethat have become major forums for exchanges of ideasand updates of progress in the field.4

� The September 1996 workshop in Washington,D.C., helped crystallize asset management as aconcept in the United States. It defined assetmanagement as “a systematic process of main-taining, upgrading, and operating physicalassets cost-effectively.” It recognized thatprinciples, practices, and tools of good assetmanagement practice exist. It noted that assetmanagement can apply to public as well as pri-vate organizations.

� A second workshop was held in October 1997 atthe Center for Infrastructure and TransportationStudies at Rensselaer Polytechnic Institute. Thissession built upon the findings of the earlierseminar to explore in greater depth the prac-tices, processes, and tools of asset managementas they apply to state DOTs. Presentations weregiven in several relevant areas to describe cur-rent practice and identify areas of potentialimprovement: e.g., the need for higher-levelsystems and integration of single-focus systems,for stronger forecasting and analytic tools toevaluate scenarios and tradeoffs, for new metricsto support strategic, performance-based decision-making, and for more effective application oftechnology and information systems.

� Subsequent workshops have focused on updatesin latest knowledge and practice in asset man-agement by transportation agencies, researchers,and industry experts. A peer exchange was heldin Scottsdale, Arizona, in December 1999 to shareideas and experiences among DOT managersand to increase understanding of tools and

4 The first three asset management workshops aredocumented in reports produced under thesponsorship of AASHTO and the FHWA: AssetManagement: Advancing the State of the Art Intothe 21st Century Through Public-Private Dialogue(September 1996); 21st Century Asset Management –Executive Summary (October 1997); and AssetManagement Peer Exchange: Using Past Experienceto Shape Future Practice (December 1999). The fourthworkshop is described on the Midwestern RegionalUniversity Transportation Center web site:www.mrutc.org

1. Introduction


processes that can improve their asset manage-ment practice. A national workshop on trans-portation asset management was held at theUniversity of Wisconsin in September 2001,jointly sponsored by AASHTO, the FHWA, theMidwest Regional University TransportationCenter, and the Midwest TransportationConsortium. This workshop brought togetherrepresentatives of public and private sectorgroups interested in transportation asset man-agement at a state and local level for discussionof the latest research and applied techniques.

� Asset management continues to be a subject ofstrong interest at national and regional meetingssponsored, for example, by AASHTO and theTransportation Research Board (TRB).

1.3.4 ASSET MANAGEMENT COMMUNITY OFPRACTICE WEB SITE

AASHTO and FHWA collaborated on an AssetManagement Community of Practice web site,“Transportation Asset Management Today”.5 This website contains links to information on asset management,provides a forum for discussions and collaboration ondocuments-in-progress, and organizes resources inseveral topic areas relevant to asset management andGASB 34. This web site is evolving continually, par-ticularly during this fast-paced period in transportationasset management development and implementationnationwide. Please check it periodically for new andupdated material.

1.3.5 RESEARCH AND TECHNOLOGY FORUM

The Research and Technology (R&T) Forum is a coop-erative effort organized by TRB, AASHTO, and theFHWA to provide “a new framework for coordinatinghighway research and technology activities amongresearch sponsors, practitioners, researchers, andother stakeholders in highway transportation.”6 Theintent is not to duplicate existing mechanisms for con-ducting, managing, and disseminating research, butrather to provide a way to coordinate the investmentsin highway-related research, recognizing the numerous

5http://www4.nas.edu/trb/homepage.nsf/web/r&t_forum.5 http://assetmanagement.transportation.org

6 http://www4.nas.edu/trb/homepage.nsf/web/r&t_forum

and diverse stakeholders in highway transportation.Goals of this effort include more effective and efficientR&T investment, greater awareness of research under-way, fostering of research partnerships, and demon-stration of the needs and opportunities for research andresulting benefits.

Five Working Groups have been organized in the fol-lowing areas: Safety, Infrastructure Renewal,Operations and Mobility, Planning and Environment,and Policy Analysis and System Monitoring. Each ofthese groups is drafting a report outlining researchneeds that advance good asset management practicewithin its respective area.

1.3.6 TRANSPORTATION RESEARCH BOARD

The Transportation Research Board has recently insti-tuted a Task Force to undertake activities in transpor-tation asset management. This group is looking at assetmanagement across all transportation modes, consid-ering its application to agencies and service providersat different levels of government. Its focus includesgathering and disseminating information on assetmanagement practice, developing research recommen-dations, and recommending ways in which the subjectcan best be addressed through TRB.

1.3.7 JOINT TASK FORCERECOMMENDATIONS

The AASHTO and the TRB Task Forces and FHWAheld a joint meeting in Providence, Rhode Island, inJune 2002 to recommend an action plan for the nexttwo years, 2002-2004, on “Asset Management:‘Making It Reality.’”7 A draft of these recommenda-tions is now being reviewed for consideration at theAASHTO Annual Meeting in October 2002. Whilethis action plan has not yet been formally adopted,many of its recommendations represent specific pro-posed implementations of tasks already included inAASHTO’s Strategic Plan for Transportation AssetManagement. The plan recommends that AASHTOassume the leadership of transportation asset man-agement activities by pursuing the following actions:

7 Asset Management: “Making It Reality,” WorkingDraft, 2002-2004 Joint Recommended Action Plan,TRB Asset Management Task Force, AASHTO/TRB/FHWA Joint Meeting, Providence, Rhode Island, July12, 2002.

1. Introduction


� Taking the lead in forming a national partner-ship to support and promote transportationasset management;

� Convening a national summit on assetmanagement;

� Adopting and maintaining this TransportationAsset Management Guide and subsequentproducts being developed through NCHRP;

� Developing an implementation support plan fornear-term actions in the period 2002-2004;

� Developing an outreach and promotion plan;

� Seeking to enlist the support of criticalstakeholder associations;

� Advocating an asset-management emphasis inthe 2003 reauthorization of federal transporta-tion legislation;

� Creating organizational capacity withinAASHTO to foster programs called for in theStrategic Plan through creation of an AssetManagement Institute; and

� Securing commitment of a sustainable level offunding of $30 million over six years throughreauthorization and/ or joint agreement with theU.S. DOT/FHWA and partner associations.

1.2.8 PHASE I STUDY FINDINGS

This Guide builds on the findings of Phase I ofNCHRP Project 20-24(11). These results are docu-mented in three companion volumes8 that provideadditional information on transportation assetmanagement:

1. Transportation Asset Management Frameworkdescribes the concepts and principles of asset man-agement and provides examples of state-of-the-artpractice. The management approach established inthis report provides the basis of the guidance inChapter 2 of this Guide.

2. Synthesis of Asset Management Practice summa-rizes asset management practices and techniquesused by public agencies throughout the UnitedStates and abroad, and by the private sector.

8 The Phase I reports of NCHRP Project 20-24(11) areavailable on NCHRP’s web page: http://www4.trb.org/trb/crp.nsf

Sources of information additional to those citedabove can be found in this report.

3. Recommended Research Program outlines a 10-year, prioritized program of research in thefollowing areas to advance the practice of assetmanagement in U.S. transportation agencies: policyand institutional aspects; information, analytic tools,and technology; planning, program development,and program delivery; training and informationsharing; and academic programs and materials.

1.4 GETTING STARTED

YOUR CURRENT RESOURCES WILL WORK

You can start to implement better asset managementpractices with the resources you already have. Thekey to realizing immediate benefits is to utilize thebest available people and tools to apply theunderlying principles to current practices. Assetmanagement principles will help guide the evolutionof new processes, IT, and institutional relationships inthe future. Work to begin investigating whereimprovements are needed, and with what priority,can begin immediately. Similarly, while upgraded ITcapabilities may be recommended as part of improvedasset management practice, substantial up-front soft-ware investments are not necessary. For example,you do not need a fully integrated “asset managementsystem” to begin taking advantage of the concepts andbest practices outlined in this Guide.

What is needed at all organizational levels is a shareddesire to improve current ways of doing business, awillingness to deal with change where needed, and acontinuing focus on outcomes in terms of improvedtransportation system performance and service to thecustomer. Asset management is not a “silver bullet”that magically overcomes existing problems and con-straints; rather, it is a framework within which youcan look at these existing problems and constraints tosee how to deal with them better. Many constraintsare imposed on transportation agency procedures anddecisions from outside, whether by statute, regulation,or political necessity. Practically and realistically,these constraints often cannot be easily or quicklyremoved. What asset management concepts andprinciples can provide, however, is a focus on thedesired result, emphasis on options to achieve this

1. Introduction


result, and recommended techniques to pursue andmeasure attainment of this result.

HOW THIS GUIDE CAN HELP

Applying the principles presented in this Guide toyour current situation will enable you to get startedquickly. This Guide describes steps that are helpfulfor improving asset management at your agency:

1. Motivation – Review asset management principlesand framework – Chapters 1 and 2.

2. Self-assessment – Identify strengths and weak-nesses and prioritize areas needing improvement –Chapter 3.

3. Approach – Define the scope of asset managementat your agency and establish roles andresponsibilities – Chapter 4.

4. Potential Initiatives – For each of the four topicareas of transportation asset management (policygoals and objectives, planning and programming,program delivery, and information and analysis)review key topics, best practices, and practical imple-mentation steps – Chapters 5-8.

5. Action Plan – Identify areas needing improve-ment, formulate tasks, and set priorities andtimeframes – Chapter 4.

6. Implementation – Perform tasks identified in theasset management action plan, track progress, andupdate the plan as fundamental changes occur –Chapter 9.

WHAT THIS GUIDE ADDRESSES

This Guide covers many aspects of an agency’sresource allocation and utilization functions indescribing how asset management “best practices”may apply to planning, priority programming, pro-gram delivery, infrastructure maintenance manage-ment, system monitoring, and IT applications. Itfocuses explaining and illustrating how asset man-agement principles, techniques, and tools apply toeach of these functions. It is not intended to be aprimer on these individual functional areas, however.A wide variety of literature exists in each area forthose desiring general information on planning, pro-gramming, maintenance management, and so forth.

This Guide’s purpose is only to show how an assetmanagement perspective may influence an agency’smanagement philosophy, methods and techniques,organizational roles, and IT applications as they mayapply to one or more of these functional areas.

2. FRAMEWORK AND PRINCIPLES


2.1 DEVELOPING THE CONCEPT

2.1.1 RESOURCE ALLOCATION ANDUTILIZATION

Asset management is, at its core, a process of resourceallocation and utilization. In this Guide, the term“resource” is used to refer to all of the ingredients atan agency’s disposal that can be applied to managingthe physical transportation infrastructure. Resourcesinclude revenues, human resources, equipment, mate-rials, real estate, and corporate information, to namethe most familiar.

These resources also can be viewed in their own right as“assets” that likewise need to be managed effectively.For clarity and to provide meaningful examples anddetail, this Guide focuses exclusively on physical trans-portation infrastructure as “the asset.” The generalprinciples in this Guide could be applied to managingother types of assets in the appropriate context. Sup-porting explanations and examples of good practicecould be developed in a manner corresponding to thisGuide for managing human, financial, real, information,and other classes of assets listed above.

Figure 2.1 presents a strategic, integrated, systematic,and interdisciplinary approach to asset managementas a resource allocation and utilization process. The“best-practice benchmark” represented by this dia-gram embodies the following elements:

� The approach is policy-driven. Policies includesystem performance goals as well as broaderguidance, such as economic development orsocial or environmental initiatives, that affecttransportation. Ideally, customer perceptions ofthe priority and quality of agency services alsoare factored into policy guidance. Other ele-ments of resource allocation – e.g., planningmethodology, program prioritization factors,and system performance measures – are consis-tent with these policy goals.

� The identification and analysis of options,evaluation of candidate projects, and tradeoffsis strategic, interdisciplinary, and integrated.It potentially encompasses a number of modesand their associated infrastructure, rather thanfocusing solely on individual classes of assets (asin pavement or bridge management, for exam-ple). Policy goals and objectives are explicitly

considered in evaluating investment andfunding alternatives to meet transportationneeds. Tradeoffs among asset classes or modes,program investments, and funding availabilityare conducted to seek the best performance at thelowest life-cycle cost. Resource allocation deci-sions consider a range of agency resources: e.g.,human resources and corporate information, aswell as financial resources. Quality information isapplied throughout these processes.

� Programs, projects, and services are deliveredin the most effective way available. Optionsfor delivery are periodically evaluated in termsof the agency’s own labor, financial, and infor-mation resources, and those of other serviceproviders in the public or private sectors.

� Decisions at each step are based upon qualityinformation. The various steps in Figure 2.1 arebased upon current, complete, and accurateinformation on system condition, performance,and forecasted trends. Management systemsand supplementary analytic tools (e.g., for bene-fit/cost analyses or tradeoff analyses) areapplied to these decisions, not as “black-box”solutions, but rather as aids to managers andexecutives in diagnosing problems and identi-fying the most effective projects and services.Value is placed on the capabilities and resourcesto provide this quality information.

� The information base for asset management iscontinually renewed, with feedback forupdates and improvement. Working upwardfrom the bottom in Figure 2.1 to consider theseveral feedback loops shown:

- Program delivery monitoring documentswhether projects and services have beendelivered on time and budget, and identifiescauses of problems that may require remedy.

- System performance monitoring quantifies theresults of past investment decisions in plan-ning and priority programming, establishesbaselines for future decisions, and identifiesupdates needed in project selection andresource allocation criteria. System and cus-tomer surveys update information on currentasset inventory, condition, and performance,and the cost and effectiveness of projecttreatments and service delivery methods foruse in future analyses.

2. Framework and Principles


- Performance trends and comparisons to targetvalues and customer expectations provideinformation on the status of program accom-plishments, needed adjustments (either in

areas of program emphasis, or in the targetgoals and objectives), providing a basis forfuture policy formulation.

Figure 2.1 Example Resource Allocation and Utilization Process in Asset Management

Program Delivery Examples: Inter-Governmental Agreements,

Outsourcing, Procurement Options

Systems Monitoring and Performance Results

Options, Project Evaluation, and Tradeoff Analyses Across (Examples)

Examples: Transportation System Performance (including CustomerPerceptions), Economic, Social/ Environment

Quality Inform

ation and Analysis

Examples: Inventory, C

ondition, Performance

Planning and Programming

Asset ClassesPavement

BridgeITS Components

TransitRailPort

Investment CategoriesSystem PreservationOperating Efficiency

New CapacitySafety

Funding TypesCapital

OperationsMaintenance

Policy Goals and Objectives, Performance Measures

Decisions on Allocating Agency ResourcesExamples: Financial, Human, Information

The framework presented in Figure 2.1 can be refinedto meet the needs of organizations in different policy,institutional, organizational, technological, and finan-cial settings. Later sections of this Guide will help youcustomize this general framework and apply it to youragency.

2.1.2 WHY SUCH A BROAD VIEW?

Figure 2.1 encompasses several major transportationagency functions in which many departmental unitsparticipate. It is a purposefully broad view. Improvingyour agency’s asset management does not mean, how-

ever, that you must mount a massive effort to addressall of the functions in Figure 2.1. Rather, the broadscope of coverage indicated by Figure 2.1 is to serve theneeds of different agencies better:

� State DOTs differ from one another substantiallyin how they perceive the scope and priority ofneeded improvements in asset management.1

1 These differences were revealed qualitatively ininterviews with several DOTs during Phase I of thisstudy. More quantitative indicators of theconsiderable variation in perception and practiceamong state agencies are presented in Chapter 3.



This Guide covers its subject broadly to meet thediverse needs of its constituency.

� Senior managers may wish to focus on high-pri-ority areas for asset management improvement,but may not be sure which needs are mostimportant. A broad treatment of the subject,including the self-assessment exercise inChapter 3, allows managers to assess informa-tion on different aspects of asset managementand to make more informed judgments onwhere to start.

� Agency needs and priorities in asset manage-ment may change over time. A DOT that per-ceives its top priority today, for example, inanalytic support for its preservation programmay experience future growth that refocuses itsattention on system expansion and operationalimprovements. A broadly based Guide main-tains its usefulness.

� Managers may wish to use the Guide as a sourcebook for ideas on asset management as it appliesto a range of agency functions. The broad viewof resource allocation and utilization in the Guideserves this purpose well.

Agencies may tailor their implementation of assetmanagement to the scope, depth, and timetable that isbest suited to their needs and available staffing andbudget. The breadth of the Guide is intended to giveagencies flexibility in how they approach their indi-vidual exercises, not to direct them to an effort that islarger or more diffuse than they intended. Sugges-tions on ways to tailor and focus transportation assetmanagement are given in Chapters 3 and 4.

2.1.3 HALLMARKS OF THIS APPROACH

The definition of transportation asset management inChapter 1 as “a strategic approach to managing trans-portation infrastructure” can now be elaborated uponthrough descriptions of typical “best practice” char-acteristics and examples. In Sections 2.2 and 2.3 thesecharacteristics will be formalized to build a frame-work for asset management of transportation infra-structure. The characteristics of asset managementinclude the following:

� Transportation asset management is a policy-driven, performance-based approach with afocus on outcomes or results:

- Resource allocation decisions are driven bypolicy goals and objectives and related toperformance;

- Clear measures of performance are defined;

- Both customer service and efficiency/effectiveness are recognized; and

- Progress is tracked and communicated.

� An integrated approach is applied across assetclasses, investment categories, and fundingmechanisms:

- Common analytic approaches are establishedacross asset types: e.g., a life-cycle view ofperformance and cost; benefit/cost analysis;valuation of assets; and consideration of alter-native strategies and investments.

- Resource allocation decisions are based uponexplicit tradeoffs among modes and theirasset classes, types of investments, and avail-able funding sources: e.g., preservations ver-sus expansion alternatives; capital improve-ments versus maintenance activities versusoperations enhancements; rural economicdevelopment versus urban congestion relief;and highway versus non-highway modes.

- Business processes, evaluation proceduresand criteria, and analytic information are con-sistent with, and inform judgments about,policy objectives and values of associated per-formance measures.

- Organizational roles are developed to encour-age integration across departmental units(Figure 2.2).

Transportation Asset Management …� Is policy-driven;

� Is performance-based;

� Considers alternatives or options;

� Evaluates competing projects and services based oncost-effectiveness and anticipated impact on systemperformance;

� Considers tradeoffs among programs;

� Employs systematic, consistent business processes anddecision criteria; and

� Makes good use of information and analytic procedures.



� Good asset management implies that the rightinformation is available to the right levels ofmanagement at the right times:

- Complete, current, and accurate informationon asset condition and performance, and oncustomer perceptions of the quality of infra-structure condition and the provision ofservices;

- An appropriate suite of management systemsand databases that informs the agency of thestatus, trends, and needs regarding its infra-structure assets;

- Tools that predict future system performance,and support what-if analyses to understandthe relationship between investment levelsand resulting performance;

- Information on condition, performance, andinvestment need that is integrated across assettypes; and

- Effective decision support tools for managers atdifferent levels in the organizational structure.

� Principles of good asset management can sug-gest ways in which an agency’s current businessprocesses should be strengthened. It is a “wayof doing business,” not a separate business lineor function:

- Clear linkages exist among goals, policies,plans, investment strategies, operating proce-dures and delivery approaches;

- A proactive rather than reactive approach istaken, seeking constant improvement toensuring the best use of available resourcesfor improved performance;

- Strong top-down and bottom-up communica-tion ensure that strategic decisions are well-informed by tactical information, and thattactical decisions are aligned with strategicdirection (Figure 2.2);

- Interdisciplinary decisions are coordinatedacross different agency divisions; and

- Clearly defined organizational roles andresponsibilities provide accountability fordecisions and resulting system performance.

Figure 2.2 Managed Business Process

StrategicInformation

TacticalInformation

Coordination acrossOrganizational Units

Legislators,Stakeholders

DOT Executives

Division Heads

Section/Modal Heads

Agency Staff

2.1.4 HOW MIGHT YOUR AGENCY IMPROVE?

Several examples of how an agency may improve inmoving from a “conventional” management approachto one based on the best practices inherent in assetmanagement are illustrated in Table 2.1. These exam-ples are not meant to be prescriptive, but only toexpress the typical characteristics of asset manage-ment above in a more tangible way. The principles toguide change of this nature are formalized in the fol-lowing section.

2.2 PRINCIPLES OF GOODPRACTICE

2.2.1 ASSET MANAGEMENT IS A STRATEGICAPPROACH

Asset management represents an approach to man-aging infrastructure that is strategic and proactive,and places a premium on good information in allaspects and in all departmental units.

� Asset management is comprehensive. It entails abroad view across a range of assets. It encouragesconsideration of a full range of options to meetproblems or needs. Tradeoffs are explicitly consid-ered among programs, modes, or strategies.

� Asset management as a philosophy may beapplied broadly to virtually all functional areas



of an organization or targeted to particularareas. Increasingly, asset management is beingseen as a comprehensive approach that may besuccessfully applied at virtually all levels andacross virtually all functions of an infrastructure-based organization. However, in its evolution,asset management also may be focused on par-ticular areas of emphasis, such as system preser-vation or, alternately, system improvement andoperations. This need for adaptability inresponding to the current policy objectives andpriorities of different agencies explains why theterm “transportation asset management” is ofteninterpreted differently. It also explains whyasset management is simultaneously powerful,rigorous, yet flexible.

� Asset management is driven by policy goalsand objectives based upon performance.Strategies are analyzed in terms of objectiveassessments of costs, benefits, and other impactson the transportation system and levels of serv-ice provided to transportation users.

� Asset management takes a long-term view ofinfrastructure performance and cost. The costsand benefits of different actions are assessedthroughout the infrastructure service life,applying economic as well as technical criteria.

� Asset management is proactive. An agency hasthe latitude to make decisions based on merit.Preventive strategies are encouraged where theyare cost-effective.

� Asset management policy is influenced andinformed by good information. This informa-tion includes current and projected system con-dition and performance that would result fromdifferent policies or strategies. It also encom-passes user perceptions of system condition andperformance, as obtained through surveys orfocus groups.

� Asset management is explicit and visible, andserves to clarify and communicate the processand outcomes of resource allocation and pro-gram delivery. Asset management, by virtue ofits rational and objective qualities, demystifiesand fosters confidence in those decision proc-esses that influence the allocation and utilizationof scarce resources. In doing so, asset manage-ment fosters increased stakeholder participation,buy-in, and adherence to adopted strategies anddecisions.

� Viewed as “a way of doing business,” assetmanagement can influence the business prac-tices of virtually every organizational elementinvolved in the functions to which it is applied.

2.2.2 ASSET MANAGEMENT ENCOMPASSESMULTIPLE BUSINESS PROCESSES

The principles of good asset management can suggestways in which an agency’s business processes andorganizational roles and responsibilities can bestrengthened. These process improvements can occurin those activities prior to budget approval (i.e., plan-ning and program development) and in the programdelivery and system performance monitoring phasessubsequent to budget approval. Major principlesgoverning process improvements are listed below.

� Investment choices and decisions on allocatingand applying resources are policy- and per-formance-driven. Procedures to reach thesedecisions are consistent with objective informa-tion and criteria based on merit. Performancemeasures consistent with policy goals andobjectives are established for managementreview of both system performance and pro-gram delivery.



Table 2.1 Examples of How Asset Management May Influence Current Business Practices

Practices That May Exist Now Asset Management Best PracticePOLICY GOALS AND OBJECTIVES

Policy statements “say all the right things” but do not dif-ferentiate what are the true priorities.

Policy goals and objectives are clearly defined and can betranslated into explicit performance measures and targets.

The policy framework expresses a very broad and idealizedvision of the transportation mission. The implications ofthis policy framework are not analyzed directly, but ratherare left to specific planning and programming stages later.

The agency proactively influences policy formulation withrealistic estimates of agency resources that are needed toachieve specific goals. It works with its governing bodies toinstill this realistic vision in resulting policy statements andobjectives, as well as measurable performance targets.

Policies are developed in the context of “guidance” fromgoverning bodies to the transportation agency, and havelittle or no input from outside sources.

Policy formulation seeks input from customers and otherstakeholders, and reflects customer priorities and concernsin resulting policy statements and objectives, and perform-ance targets.

Policies are used essentially in an attempt to“micromanage” outcomes.

The policy framework gives an agency the latitude to framealternative solutions to problems and to decide among thesebased on their merits.

PLANNING AND PROGRAMMING

Transportation options that are considered in the long-range plan reflect primarily the choices included in the cur-rent transportation program.

The long-range plan identifies transportation optionsbroadly in terms of potential modes and intermodal link-ages, types of investments, and program or fundingalternatives.

Methods, formulas, and criteria to prioritize projects reflectan historical evolution of engineering, financial, and politi-cal factors.

Methods, formulas, and criteria to prioritize projects reflectstated policy objectives and performance measures andtargets.

Projects are evaluated largely in terms of initial cost andjudgment as to potential benefit.

Projects are evaluated in terms of realistic estimates of life-cycle costs, benefits, and performance impacts.

Programming is based mainly on intuitive judgment. Programming is based to the degree possible on objectiveinformation, supported by sound analytical procedures.

Management systems and condition surveys are used asengineering or research tools, but are not applied to pro-gram building or budgeting.

Information from condition surveys and management sys-tems directly informs the process that builds the recom-mended program and budget.

Management systems are used only to rank the condition ofassets; needs are programmed based on “worst first.”

Management systems guide the programming of projectsbased on valid engineering and economic criteria.

PROGRAM DELIVERY

Project delivery issues are dealt with only as emergingproblems are brought to management’s attention.

Well-understood project delivery measures and proceduresare used to track adherence to scope, schedule, and budget.

Project changes and resulting program adjustments aredealt with as ad hoc processes that “keep things in balance”as situations arise.

A process exists and is enforced to approve changes in proj-ect scope, schedule, and cost, and make related programadjustments.

Traditional methods of program delivery are used fromyear to year, with no perceived need to consider alterna-tives or compare costs among different methods.

An agency periodically evaluates availability, relative cost,and potential use of different methods of program delivery.



Table 2.1 Examples of How Asset Management May Influence Current Business Practices(continued)

Practices That May Exist Now Asset Management Best Practice

INFORMATION AND ANALYSIS

Collection of data on transportation inventory, condition,and performance is accomplished only occasionally orincompletely. Processing of these data occurs when fundsare available.

Collection of data on transportation inventory, condition,and performance is accomplished by a statistical samplingtechnique of acceptable precision that is designed to beaffordably maintained annually.

Management system reports provide detailed informationon asset engineering and materials characteristics, life-cycleperformance, and life-cycle costs.

Management system reports are designed for a range ofmanagement needs, encompassing items listed to the left,but also including information on trends in performanceversus cost (scenario testing), prioritization of projects,value and timing of preventive and corrective maintenanceneeded, and benefits of proposed investments.

Surveys of customer perceptions are conducted for infor-mation and public relations purposes, but are not applied inprogram decision processes.

Information on customer perceptions of asset condition andperformance is routinely applied to assist in capital andmaintenance program development.

� Investment choices and decisions on allocatingresources are based upon explicit tradeoffsamong modes, programs, or strategies. You canassess the tradeoffs and impacts of more or lessinvestment in a mode, program, or strategy, andhelp to craft final recommendations on howresources will be allocated across competingneeds. Managers also understand the implicittradeoffs in their programs and budgets, and theconsequences thereof.

� Asset management entails the translation ofpolicies and plans into cost-effective investmentstrategies, and the translation of investmentstrategies into cost-effective program delivery.The essence of asset management involves a com-bination of resource allocation decisions and pro-gram delivery strategies that reflect policy-drivencriteria and the resources available.

� Organizational roles and responsibilitiesregarding asset management are developed toencourage more strategic and integratedapproaches. While strong vertical organiza-tional units may exist to maintain core expertise,business processes and decisions involve widerparticipation, as noted below.

� Asset management is interdisciplinary. Deci-sions on investment choices and resource alloca-tion are based upon expertise and judgmentfrom several quarters of an agency.

� The agency strives for more effective programdelivery. The agency explores innovative meth-ods to deliver the range of projects and servicesrequired. All available methods are considered,including use of departmental employees, inter-governmental agreements, outsourcing, man-aged competition, and privatization.

� Asset management requires effective commu-nication within and outside the agency. Withinthe agency, strong communication channels areneeded both vertically and horizontally. Exter-nal communications need to inform policy-mak-ers and other stakeholders of the status oftransportation assets and recommended policiesand their benefits.

2.2.3 ASSET MANAGEMENT RELIES ONGOOD INFORMATION AND ANALYTICCAPABILITIES

Effective management systems and complete, current,and accurate information on transportation infra-structure are practical necessities in meeting the policyand process requirements of asset management. Goodasset management implies a systematic, integratedapproach to project selection, analysis of tradeoffs,and program and budget decisions. It also impliesthat the right information be available to the right levels



of management at the right times. The principlesbelow support the availability and application of bet-ter information to make better decisions in assetmanagement.

� Complete, current, and accurate information ontransportation infrastructure assets, includingdescriptions, location, usage, unique or special-ized characteristics, functional and other classifi-cation, and data needed for managementsystems as discussed below.

� An appropriate suite of management systemsand databases informs the agency of the status,trends, and needs regarding its infrastructureassets. Typical capabilities of these systemsinclude the following:

- Organization of information within data-bases describing infrastructure inventory,condition, performance, and cost;

- Analytic models that predict the rate offuture change in condition or performance,enabling the agency to forecast future infra-structure needs;

- Decision rules or procedures for applyingtreatments or actions to maintain, rehabilitate,replace, or expand transportation infrastruc-ture, with analytic models of resulting costs,benefits, and other impacts; and

- Reports tailored to different organizationallevels of management, including senior andexecutive levels, as well as for publicdistribution.

� Information on system performance in terms ofboth proposed targets and values actuallyachieved in the field. These data may beobtained in a number of ways:

- Periodic surveys and assessments of systemcondition or levels of service;

- Customer surveys of satisfaction with systemcondition and agency performance; and

- Incorporation of performance measures andassociated backup information within man-agement systems.

� Specialized technical applications that supportan agency’s asset management procedures.These will vary by agency, but may include

capabilities such as use of geographic informa-tion systems (GIS) as a system/data integrationplatform, economic analysis applications (e.g.,generalized life-cycle benefit/cost procedure),and other decision-support tools.

� Applications that assist in program and servicedelivery, including financial applications (e.g.,to compute “total” or “true” cost of agency andcontracted services), and management systemsfor construction project pipeline and construc-tion delivery.

2.3 MANAGEMENT FRAMEWORK

Key concepts, principles, and state-of-the-art tech-niques have been organized within a set of fourevaluation matrices in Tables 2.2 through 2.5. Thesematrices lay out a range of options in improved assetmanagement and identify “ideal” practices to whichyour agency can strive.

� Policy Goals and Objectives – How does policyguidance benefit from improved assetmanagement?

� Planning and Programming – Do resource allo-cation decisions reflect good practice in assetmanagement?

� Program Delivery – Are appropriate optionsand management methods used to delivery theprogram?

� Information and Analysis – Do informationresources effectively support asset managementpolicy and decisions?

The information in each matrix is organized into threecolumns:

� The first column identifies the most importantbasic characteristics of good asset managementpractice applicable to transportation agencies.

� The second column lists specific evaluation cri-teria for each characteristic.

� The third column describes the current state-of-the-art for each criterion. These ideal practicesdefine benchmarks that agencies can aim towardin seeking to improve their current approach.



Table 2.2 Policy Goals and ObjectivesHow Does Policy Guidance Benefit from Improved Asset Management Practice?

Characteristics Criteria Benchmark – State-of-the-Art

1. Policy goals and objectives reflect acomprehensive, long-term view ofasset performance and cost.

Defined goals and objectives Goals and objectives are comprehensive, integratedwith other statewide policy objectives, and sup-ported by quantitative and measurable performancemeasures or criteria.

Asset management as acatalyst for decision andaction

Principles of good asset management are articulatedin an agency business plan and clearly recognizedthroughout the agency as the driving force forresource allocation and utilization.

Life-cycle perspective Goals and objectives embody the perspective of life-cycle economic analyses of asset performance andcost, and encourage strategies with long-termbenefits.

2. Goals and objectives embody thepublic interest in good stewardshipof transportation assets.

Recognition of asset condi-tion, performance, and pub-lic acceptance in policyformulation

This recognition entails the following characteristics:

� Policy goals and objectives encourage a busi-ness-model, customer-oriented approach toasset management.

� Reliable information on asset condition andpublic perceptions thereof is accounted for inupdating policy objectives.

Public reporting andaccountability

System performance is measured against policygoals and objectives.

3. Policy formulation allows theagency latitude in arriving at per-formance-driven decisions onresource allocation.

Political process Political decisions on resource allocation amongmodes or programs are strongly influenced byobjective information on expected performance.

Agency decision-making The agency makes resource allocation decisionsamong programs and across geographic regions/districts based on expected performance rather thanby historical splits or formulas that do not correlatewith an objective indication of system condition.

4. The agency proactively helps toformulate effective asset manage-ment policy.

Engagement with policy-makers

The agency actively engages with political leadersand other policy-makers to define expectations ofsystem performance, frame alternative approaches,and outline the consequences of decisions andcourses of action relative to these expectations.

Provision of information The agency’s asset management systems aredesigned and applied to yield meaningful informa-tion on policy choices and consequences.



Table 2.3 Planning and ProgrammingDo Resource Allocation Decisions Reflect Good Practice in Asset Management?


1. Planning and programming proce-dures and criteria are consistentand reinforce policy goals andobjectives.

Fiscally responsibleplanning

Development of statewide and urban-area long-range plans can be demonstrated to be consistentwith policy goals and objectives and with realisticprojections of future revenue.

Program prioritization Funding allocation and project prioritization criteriaare consistent with and support the state’s and theagency’s policy goals and objectives.

Updates and revisions Updates and revisions to the planning and programdevelopment process are performed regularly toreflect changes affecting asset management prioritiesin the areas of:� Policy (e.g., preserving existing investments,

economic development)� Technology (e.g., new design procedures or

materials)� Emerging Issues (e.g., updated environmental

regulations; identification of potentially cata-strophic risks to asset condition or performance).

2. Planning and program develop-ment consider a range of alterna-tives in addressing system needs ordeficiencies.

Planning alternatives Long-range planning identifies and evaluates a rangeof program alternatives and, as appropriate, modalalternatives to meet present and future transporta-tion demand.

Project scope, cost, benefits,impact on performance

Program development, guided by adopted plans,formulates projects of appropriate scope and devel-ops realistic estimates of their costs, benefits, andimpacts on system performance.

3. Performance-based concepts guideplanning and program development.

Performance-basedbudgeting

Recommended programs and budgets relate costs tolevels of service or performance measures.

Benchmark achievement The planning and programming processes identifythe resources required to maintain existing assets attarget performance levels and at least life-cycle cost.

4. Resource allocations and programtradeoffs are based on relative meritand an understanding of comparativecosts and consequences.

Program building Organization of projects within programs (programbuilding) results from statewide competition amongprojects based on objective criteria.

Consistency Projects being designed and built respond to, and areconsistent with, overall policy guidance for systemperformance.

Program tradeoffs Tradeoffs between programs (e.g., Preservation ver-sus Improvement, or System Expansion versusOperations) are based upon analyses of life-cyclebenefits and costs, rather than arbitrary formulas orhistorical splits.

Communication The implications of more or less resources allocatedto each program are clearly communicated in termsof selected performance measures.



Table 2.4 Program DeliveryAre Appropriate Options and Management Methods Used to Deliver the Program?


1. The agency considers all availablemethods of program delivery.

Cost tracking The agency knows its costs for delivering its pro-grams and services (e.g., by activity, bid item, orresource class).

Options for delivery The agency periodically evaluates its options fordelivering programs and services (e.g., agencyemployees, inter-governmental agreements, part-nering, outsourcing, managed competition).

2. The agency tracks program outputsand outcomes.

Feedback mechanism The agency has the ability to easily track actual proj-ect and service delivery against the program plan sothat adjustments can be made.

Change process A formal program change process exists to makeneeded adjustments in cost, schedule, and scope;document causes; and reallocate funds.

3. Reports on program deliveryaccomplishments are communi-cated and applied.

Internal Department executives and program managers areregularly informed of progress; a well-understoodmechanism exists to make needed adjustments.

External Policy-makers and key stakeholders are keptinformed of program status and adjustments.

4. The approved program is deliv-ered efficiently and effectively.

Delivery measures Measures are defined and tracked to gauge success-ful program delivery in terms of schedule, cost, andscope.

Project and programadjustments

The agency has a process to review and approveproject changes and resulting program adjustments.

Table 2.5 Information and AnalysisDo Information Resources Effectively Support Asset Management Policies and Decision?


1. The agency maintains high-qualityinformation needed to supportasset management.

Asset inventory The agency maintains an inventory of assets that is acomplete, accurate, and current description of infra-structure for which the agency is responsible or inwhich it has a statewide transportation interest.

Asset condition Asset condition data (including data that affect con-dition, such as usage, environment, etc.) are updatedon a predetermined schedule sufficient to providetimely and accurate information on status andperformance.

Customer perceptions Information on customer perceptions is updatedregularly through surveys, focus groups, complainttracking, or other means, to gauge public perceptionof asset condition and agency performance, and torespond thereto.



Table 2.5 Information and Analysis (continued)Do Information Resources Effectively Support Asset Management Policies and Decision?


1. The agency maintains high-qualityinformation needed to supportasset management, continued.

Program outputs Information on actual costs and accomplishments byproject, program, network, asset category, work type,and location are maintained in a form that can beused to track program delivery. Cost estimationtechniques are continually improved.

System monitoring Performance measures or levels of service aredefined and regularly applied to quantify theimpacts of program decisions and actions.

Reporting Progress toward stated transportation system per-formance targets is measured and reported regularlyfor each program.

Feedback Performance measures provide feedback for futureplanning and program priorities, or consideration ofadjustments in policy objectives.

2. The agency collects and updatesasset management data in a costeffective manner.

Data collection technology The agency applies the appropriate mix of data col-lection technology (e.g., visual, automated, remotesensing) to ensure high quality data and to providecost-effective coverage needed to maintain the qual-ity information base discussed above.

Sampling methodology The sampling methodology is demonstrated to beappropriate in terms of network coverage, samplesize, and frequency, and in the training and teamassignments needed to ensure objectivity, consis-tency, and repeatability.

3. Information is automated and onplatforms accessible to thoseneeding it – relates to both data-bases and systems.

System technology andintegration

The agency’s single-asset management systems anddatabases have been updated and integrated toenable consistent information on all asset categoriesto be accessible to multiple applications, and to pro-vide managers at various organizational levels theinformation and tools needed for effective assetmanagement.

Data administration Information requirements and/or standards for assetmanagement are in place to ensure that future systemand database development efforts within the agencywill integrate with existing systems and meet assetmanagement information and analysis improvementneeds.

Geo-referencing Systems and information are based upon a commongeographic referencing system and a common map-based interface for analysis, display, and reporting.

4. Effective decision-support tools areavailable for asset management.

Strategy analysis The agency has decision-support tools that facilitateexploration of capital versus maintenance tradeoffsfor different asset classes.

Project analysis The agency has tools that support consistent analysisof project costs and impacts, using a life-cycle costperspective.



Table 2.5 Information and Analysis (continued)Do Information Resources Effectively Support Asset Management Policies and Decision?


4. Effective decision-support tools areavailable for asset management,continued.

Program analysis The agency has tools that provide an understandingof the system performance implications of a pro-posed program of projects.

Program tradeoff analysis The agency has tools to help explore the system per-formance implications of different levels or mixes ofinvestments across program categories orsubcategories.

5. Financial value of assets. Conformity with GASBstatement 34

The agency reports the value and condition of itstransportation capital assets in a manner that con-forms to the modified approach specified in GASBstandards.

Information support forcondition and financialreporting

Information on asset condition and the level ofexpenditure needed to meet target condition is avail-able from the agency’s asset management systems.

2.4 CUSTOMIZING AN ASSETMANAGEMENT APPROACH

The previous section presented a detailed manage-ment framework for asset management, includingexamples of best practices in several key agency func-tions. The question now is: How can your agencyimplement this management framework in a practicalway? Chapters 3 and 4 address this question in termsof a self-evaluation that your agency can conduct, andsteps to developing an implementation plan. Themanagement framework, self-evaluation, and imple-mentation plan are adaptable to many differentagency situations – agencies with various organiza-tional structures, management cultures, business pro-cesses, funding environments, and technologicalcapabilities.

While the asset management framework and princi-ples presented in this chapter are relevant to trans-portation agencies generally, this Guide recognizesthat there is no single asset management approachthat is appropriate for all agencies. Your approach toimplementing these ideas and concepts within youragency will likely differ from the approach of otheragencies. Therefore, Chapters 3 and 4 also willexplain how to customize the principles in Tables 2.2through 2.5 to your particular agency’s situation.

3. SELF-ASSESSMENT

Transportation Asset Management Guide 3-1

3.1 INTRODUCTION TOSELF-ASSESSMENT

3.1.1 OVERVIEW

This chapter will help your agency characterize its assetmanagement practices and identify specific opportuni-ties for improvement. While the self-assessment is anoptional step in asset management planning, it isextremely useful to help organize thinking, develop aconsensus among top-level managers as to where youragency’s strengths and needs for improvement lie, andstructure an agenda for asset management planning.Section 3.1 introduces the asset management self-assessment process; Section 3.2 presents the self-assessment survey; and Section 3.3 provides a series ofquick reference figures that list state-of-the-art bench-marks and possible gaps. These figures provide you apoint of reference from which to evaluate your agencyand to link the results of your agency’s self-assessmentto pertinent sections of the Guide.

3.1.2 OBJECTIVES

The asset management self-assessment exercise pre-sented in this chapter has the following objectives:

� Develop a consensus among managers withinyour agency regarding the status of assetmanagement.

� Assist your agency to identify asset managementstrengths, weaknesses, constraints, and opportu-nities for improvement.

� Develop priorities and recognize critical areasthat need immediate attention.

� Provide a foundation for implementing youragency’s asset management improvement strategy.

Self-assessment is a quick diagnostic tool that yieldsan overall impression, not a precise analytic measure,of where your agency is now regarding asset man-agement practice. The statements in each survey formare designed to probe basic functions and capabilitiesthat contribute to good asset management regardlessof the particular characteristics and situation of youragency. They should prompt you to reflect on currentbusiness practices with a broad view.

“Even if we are constrained to do business or reportinformation in a certain way, is there a betterapproach that satisfies asset management principlesmore closely?”

The self-assessment results will reflect your agency’sindividual institutional, organizational, financial, andIT environments. Involving top managers in thisexercise will provide needed context for interpretationof the results. Because the results are specific to youragency’s management environment and financial,organizational, institutional, and technologicalsituations, they do not provide a meaningful basis forcomparisons with peer agencies. The value of self-assessment is to help you move beyond possible pre-conceptions of where you are in asset management,and to provide a broad perspective from which youcan plan asset management improvements morecomprehensively.

3.1.3 THE EXERCISE

The self-assessment survey presented in Section 3.2lists a series of statements organized around the fourkey areas of asset management:

� Policy Goals and Objectives;

� Planning and Programming;

� Program Delivery; and

� Information and Analysis.

Each statement covers a key aspect of asset manage-ment practice and is stated in a declarative form (e.g.,“Our agency conducts life-cycle cost analyses for proj-ect alternatives.”). Respondents are asked to rate theextent to which they agree with each statement, usinga scale of 1 to 4. A “4” indicates strong agreementwith the statement, whereas a “1” indicates strongdisagreement.

3.1.4 THE PROCESS

Clearly, there are several ways by which you canapply the self-assessment process. The following is asuggested approach.

1. Appoint leader. It is recommended that the leader ofthe self-assessment effort have a broad understandingof asset management issues across the entire agency.

3. Self-Assessment

3-2 Transportation Asset Management Guide

2. Establish core group. It is highly recommendedthat the group responsible for completing the self-evaluation comprise the CEO, deputy CEO, and sen-ior executives from different disciplines (e.g., keyasset managers, finance, planning, maintenance,operations, information technology, and so forth).

3. Complete assessment form. Distribute theassessment form in Section 3.2 to each member of thegroup and ask them to complete it individually. Theexercise is designed to take about a half-hour to com-plete. It may be helpful to review the diagnostic fig-ures in Section 3.3 beforehand to understand betterthe intent of each set of questions.

4. Compile the responses. At a minimum, it is rec-ommended that the leader calculate the averageresponse and identifying the high and low responsesfor each statement (e.g., responses to statement A4ranged from 2 to 3 and had an average of 2.75). Theleader also may choose to calculate summary scores.Guidelines for a simple scoring tabulation aredescribed at the end of Section 3.2. This scoringmethod is optional, and is provided for those whomay find it useful to have a “bottom-line” indicator.The scoring also can be useful in framing the discus-sion that should occur as part of defining futurestrategies and directions for asset management. Ofcourse, alternative scoring methods also could beused. For example, the leader may calculate the per-centage of statements in each area receiving a 3 or 4.Again, the purpose is not to try to translate resultsinto a precise measure. Rather, the result is anapproximate indicator of how your managers see youragency’s performance of each function or capabilitydescribed in the statements.

5. Discuss results. It is recommended that the leaderfacilitate a discussion among core group members toreview the results. Two types of results in particularshould be highlighted in the review:

� a. Statements where managers’ assessments ofcurrent agency practice are significantly lowerthan the state-of-the-art benchmark, which isscored as 4 (i.e., areas uniformly receiving a lowscore – say, in the range of 1 to 2).

� b. Statements where managers’ assessments ofan agency’s current practice vary widely fromone another (i.e., some respondents stronglyagree with a statement, while others strongly dis-agree). Where there are significant differences itis recommended that the group discuss their

varying perspectives, focusing on underlyingreasons for differences and strategic options foraddressing them.

In the case labeled a, the group should identifypotential needs for improvement. In the caselabeled b, the group should discuss the variance inresponses and try to reconcile different perspectivesby exploring the institutional, organizational, IT-related, or other factors that may help explain thesedifferences. From this discussion, any potentialimprovements in asset management practice shouldbe identified and added to those identified for a)above.

6. Identify priorities. To conclude the discussion, theleader should work with the group to identify a set ofpriority areas for development of asset managementimprovements. Buy-in at this point by your agency’sexecutives and line managers is essential for the suc-cess of future efforts.

3. Self-Assessment


3.2 SELF-ASSESSMENT EXERCISE

3.2.1 PART A. POLICY GUIDANCE

How Does Policy Guidance Benefit from Improved Asset Management Practice?

StronglyDisagree

StronglyAgree

POLICY GUIDANCE BENEFITING FROM GOOD ASSET MANAGEMENTPRACTICE

A1. Policy guidance supports preservation of existing infrastructureassets.

1 2 3 4

A2. Policy guidance encourages resource allocation and projectselection based on cost-effectiveness or benefit/cost analysis.

1 2 3 4

A3. Policies support a long-term, life-cycle approach to evaluatinginvestment benefits and costs.

1 2 3 4

A4 Policy guidance considers customer perceptions andexpectations.

1 2 3 4

A5 Our customers contribute to the process that formulates policygoals and objectives.

1 2 3 4

STRONG FRAMEWORK FOR PERFORMANCE-BASED RESOURCEALLOCATION

A6. Policy guidance on resource allocation allows our agency suffi-cient flexibility to pursue a performance-based approach.

1 2 3 4

A7. Our agency has a business plan or strategic plan with compre-hensive, well-defined goals and objectives to guide resourceallocation.

1 2 3 4

A8. Our agency’s goals and objectives are linked to specific per-formance measures and evaluation criteria for resourceallocation.

1 2 3 4

PROACTIVE ROLE IN POLICY FORMULATION

A9. Our agency estimates the resources needed to accomplish par-ticular objectives as part of policy development.

1 2 3 4

A10. Our agency regularly communicates to customers and otherstakeholders our accomplishments in meeting policy objectives.

1 2 3 4

A11. Our agency works with political leaders and other stakeholdersto present funding options and consequences as part of ourbudget proposal.

1 2 3 4

3. Self-Assessment


3.2.2 PART B. PLANNING AND PROGRAMMING

Do Resource Allocation Decisions Reflect Good Practice in Asset Management?

StronglyDisagree

StronglyAgree

CONSIDERATION OF ALTERNATIVES IN PLANNING AND PROGRAMMING

B1. Our agency’s long-range plan includes an evaluation of capital,operational, and modal alternatives to meet system deficiencies.

1 2 3 4

B2. Capital versus maintenance expenditure tradeoffs are explicitlyconsidered in the preservation of assets like pavements andbridges.

1 2 3 4

B3. Capital versus operations tradeoffs are explicitly considered inseeking to improve traffic movement.

1 2 3 4

PERFORMANCE-BASED PLANNING AND A CLEAR LINKAGE AMONGPOLICY, PLANNING, AND PROGRAMMING

B4. Our agency’s long-range plan is consistent with currently estab-lished policy goals and objectives.

1 2 3 4

B5. Our agency’s long-range plan includes strategies that are consis-tent with plausible projections of future revenues.

1 2 3 4

B6. Our agency’s long-range plan provides clear and specific guid-ance for the capital program development process.

1 2 3 4

B7. Our agency periodically updates its planning and programmingmethods to keep abreast of current policy guidance, customerexpectations, and critical performance criteria.

1 2 3 4

PERFORMANCE-BASED PROGRAMMING PROCESS

B8. Criteria used to set program priorities, select projects, and allo-cate resources are consistent with stated policy objectives anddefined performance measures.

1 2 3 4

B9. Our agency’s programs are consistent with realistic projections offuture revenues.

1 2 3 4

B10. Our agency’s programs are based on realistic estimates of costs,benefits, and impacts on system performance.

1 2 3 4

B11. Project selection is based primarily on an objective assessment ofrelative merits and the ability to meet performance targets.

1 2 3 4

B12. The preservation program budget is based upon analyses of least-life-cycle cost rather than exclusive reliance on worst-firststrategies.

1 2 3 4

B13. A maintenance quality assurance study has been implemented todefine levels of service for transportation system maintenance.

1 2 3 4

3. Self-Assessment


3.2.3 PART C. PROGRAM DELIVERY

Are Appropriate Program Delivery Processes that Reflect Industry Good Practices Being Implemented?

StronglyDisagree

StronglyAgree

CONSIDERATION OF ALTERNATIVE PROJECT DELIVERY MECHANISMS

C1. Our agency periodically evaluates the use of alternative deliveryoptions such as maintenance outsourcing, intergovernmentalagreements, design-build, design-build-maintain, and similaroptions.

1 2 3 4

C2. Our agency has an incentive program for recognizing orrewarding outstanding performance in improving upon sched-ule, quality, and cost objectives.

1 2 3 4

EFFECTIVE PROGRAM MANAGEMENT

C3. Our agency solicits input from all affected parties to ensure thatproject scope is consistent with objectives of the project.

1 2 3 4

C4. Our agency uses well-defined program delivery measures totrack adherence to project scope, schedule, and budget.

1 2 3 4

C5. Our agency has a well-established and functioning process toapprove project changes and program adjustments.

1 2 3 4

C6. When adding projects or changing project schedules, our agencyconsiders effects on the delivery of other projects in the program.

1 2 3 4

C7. Projects with significant changes to scope, schedule, or cost arereprioritized to ensure that they are still competitive in cost andperformance.

1 2 3 4

C8. Agency executives and program managers are regularly keptinformed of program delivery status.

1 2 3 4

C9. External stakeholders and policy-makers feel that they are suffi-ciently updated on program delivery status.

1 2 3 4

COST TRACKING AND ESTIMATING

C10. Our agency maintains and uses information on the full unit costsof construction activities.

1 2 3 4

C11. Our agency maintains and uses information on the full unit costsof maintenance activities.

1 2 3 4

3. Self-Assessment


3.2.4 PART D. INFORMATION AND ANALYSIS

Do Information Resources Effectively Support Asset Management Policies and Decisions?

StronglyDisagree

StronglyAgree

EFFECTIVE AND EFFICIENT DATA COLLECTION

D1. Our agency has a complete and up-to-date inventory of ourmajor assets.

1 2 3 4

D2. Our agency regularly collects information on the condition of ourassets.

1 2 3 4

D3. Our agency regularly collects information on the performance ofour assets (e.g., serviceability, ride quality, capacity, operations,and safety improvements).

1 2 3 4

D4. Our agency regularly collects customer perceptions of asset con-dition and performance.

1 2 3 4

D5. Our agency continually seeks to improve the efficiency of datacollection (e.g., through sampling techniques, use of automatedequipment, other methods appropriate to our transportationsystem).

1 2 3 4

INFORMATION INTEGRATION AND ACCESS

D6. Agency managers and staff at different levels can quickly andconveniently obtain information they need about asset charac-teristics, location, usage, condition, or performance.

1 2 3 4

D7. Our agency has established standards for geographic referencingthat allow us to bring together information for different assetclasses.

1 2 3 4

D8. Our agency can easily produce map displays showingneeds/deficiencies for different asset classes andplanned/programmed projects.

1 2 3 4

D9. Our agency has established data standards to promote consistenttreatment of existing asset-related data and guide developmentof future applications.

1 2 3 4

USE OF DECISION-SUPPORT TOOLS

D10. Information on actual work accomplishments and costs is used toimprove the cost-projection capabilities of our asset managementsystems.

1 2 3 4

D11. Information on changes in asset condition over time is used toimprove forecasts of asset life and deterioration in our asset man-agement systems.

1 2 3 4

3. Self-Assessment


3.2.4 PART D. INFORMATION AND ANALYSIS (CONTINUED)

Do Information Resources Effectively Support Asset Management Policies and Decisions?

StronglyDisagree

StronglyAgree

USE OF DECISION-SUPPORT TOOLS (CONTINUED)

D12.

D13.

D14.

D15.

D16.

Our agency uses asset management decision-support tools to:Calculate and report actual system performance;

Identify system deficiencies or needs;

Rank candidate projects for the capital program;

Forecast future system performance given a proposed pro-gram of projects; and

Forecast future system performance under different mixes ofinvestment levels by program category.

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SYSTEM MONITORING AND FEEDBACK

D17. Our agency monitors actual system performance and comparesthese values to targets projected for its capital preservationprogram.

1 2 3 4

D18. Our agency monitors actual system performance and comparesthese values to targets projected for its capital improvementprogram.

1 2 3 4

D19. Our agency monitors actual system performance and comparesthese values to targets projected for its maintenance and opera-tions program.

1 2 3 4

D20. We periodically distribute reports of performance measures rele-vant to customer/stakeholder satisfaction with transportationsystem and services.

1 2 3 4

3. Self-Assessment


3.2.5 SCORING GUIDELINES (OPTIONAL)

A. POLICY GOALS AND OBJECTIVES

POLICY GUIDANCE BENEFITING FROM GOODASSET MANAGEMENT

(A1+A2+A3+A4+A5)/5 = _____

STRONG FRAMEWORK FOR PERFORMANCE-BASEDRESOURCE ALLOCATION

(A6+A7+A8)/3 = _____

PROACTIVE ROLE IN POLICY FORMULATION

(A9+A10+A11)/3 = _____

B. PLANNING AND PROGRAMMING

CONSIDERATION OF ALTERNATIVES IN PLANNINGAND PROGRAMMING

(B1+B2+B3)/3 = _____

PERFORMANCE-BASED PLANNING AND CLEARLINKAGE AMONG POLICY, PLANNING, ANDPROGRAMMING

(B4+B5+B6+B7)/4 = _____

PERFORMANCE-BASED PROGRAMMING PROCESS

(B8+B9+B10+B11+B12+B13)/6 = _____

C. PROGRAM DELIVERY

CONSIDERATION OF ALTERNATIVE PROJECTDELIVERY MECHANISMS

(C1 + C2)/2 = _____

EFFECTIVE PROGRAM MANAGEMENT

(C3+C4+C5+C6+C7+C8+C9)/7 = _____

COST TRACKING AND ESTIMATING

(C10+C11)/2 = _____

D. INFORMATION AND ANALYSIS

EFFECTIVE AND EFFICIENT DATA COLLECTION

(D1+D2+D3+D4+D5)/5 = _____

INFORMATION INTEGRATION AND ACCESS

(D6+D7+D8+D9)/4 = _____

USE OF DECISION-SUPPORT TOOLS

(D10+D11+D12+D13+D14+D15+D16)/7 = _____

SYSTEM MONITORING AND FEEDBACK

(D17+D18+D19+D20)/4 = _____

3.3 WHERE NEXT?It is important that the self-assessment address theobjectives described in Section 3.1.2:

� Consensus on current situation. One of thebenefits of discussing the results is to developa shared perspective on your agency’s currentpractices and the degree to which they exhibit“good asset management.” This exercise canprobe existing preconceptions to test whetherthey are legitimate or whether more funda-mental issues exist. It also can help define the“scope” of asset management that your agencyshould deal with.

� Strengths, weaknesses, constraints, andopportunities. An assessment of relativestrengths and weaknesses should be based onan analysis of your core group’s responses tothe statements and a critical assessment ofthese responses, rather than subjective opin-ions or “common departmental wisdom.” Forexample, in discussing statement D14 wheremanagers may have indicated that decision-support tools are used to rank candidate proj-ects in the capital program, it is fair to ask,“Which systems and which programs?” Thisprobing may help to identify not only thoseprograms that are well supported by your ITtools, but other programs that also could besupported but are not now. Constraints ongood practice resulting, for example, fromstatutory or institutional mandates on busi-ness processes should be approached not as

3. Self-Assessment


impediments to further improvement in assetmanagement, but rather as opportunities toapply asset management principles throughcomplementary activities that introduceneeded incentives or checks and balances.

� Priorities and critical areas. Statements withresponses that deviate significantly from thestate-of-the-art (rating 4), or that exhibit a widevariance among core group managers, may becandidates for priority improvements in assetmanagement. These results should bereviewed critically, though, before firming upthese decisions. For example, while there maybe a consensus on the need for better conditiondata, using these data effectively meanshaving suitable business processes in place.Revising data collection procedures may there-fore be a priority item, but revising businessprocesses to apply these data to decisions maybe the critical task. Similarly, self-assessmentresponses may point to a pattern of businessprocess weaknesses in planning, program-ming, and program delivery, but a more fun-damental problem may exist in howorganizational roles and responsibilities areassigned by executive management.

� Foundation for implementation plan. All ofthese discussions and deliberations shouldkeep the larger objective of self-assessment inmind: to forge the basis for improving assetmanagement practice, and in so doing tosecure buy-in by managers across departmen-tal units. A clear vision of selected areaswhere improvements would advance assetmanagement substantially is preferable to along “wish list” in which there is no coherentdirection for proceeding.

Diagnostic Tables 3.1 through 3.4 summarize the keybenchmark characteristics in the same areas of assetmanagement in which you conduct your agency’sself-assessment. They also identify common gapsbetween actual practice and benchmark achievement,and relate benchmarks and gaps to later sections ofthe Guide where further information may be found.

Options for proceeding with the self-assessmentresults include the following:

� “Quick-reference.” Once you have identifiedpriority areas for asset management improve-ment, the diagnostic tables presented on the

following pages (Tables 3.1, 3.2, 3.3, and 3.4)can point you directly to pertinent sections ofthis Guide that can assist you in developingsolutions. (Note that each row in Tables 3.1through 3.4 is integral. Each row contains anumber of benchmarks and common gaps inpractice; the sections that are cited to the rightin each row apply generally to the sets ofbenchmarks and gaps, not to any onespecifically.)

� Asset Management Implementation Plan.Once you have documented the results of theself-assessment, proceed to Chapter 4, whichwill guide you through the development of acomprehensive asset management implemen-tation plan. Chapter 9 discusses additionalissues in implementation, including conceptsof change management and associated com-munications planning that can accompanyasset management implementation.

You also may develop your own approach to actingon the results of the self-assessment. The importantthing is that the exercise helps your agency to iden-tify where to focus, and how to customize and tailorthe aspects of asset management good practice to thepriority areas for improvement within yourorganization.

3. Self-Assessment


Table 3.1 Policy Guidance Diagnostic

Benchmark Common Gaps See these Sections of the GuidePOLICY GUIDANCE BENEFITING FROM GOOD ASSET MANAGEMENT PRACTICE

(A1 – A5)

Polices allow agency latitude in itsresource allocation decisions

Policy guidance supports decisionsbased on cost-effectiveness orcost/benefit

Policy guidance supports a long-term, life-cycle approach to evalu-ating investments

Most policy debate is about specificproject choices and not about broaderoutcomes

Changes in leadership make sus-tained initiatives difficult

No clear relationship between policiesand how resource allocation decisionsare made

Implications of policies are unknown

Section 5.3Improved Policy-Making

Section 5.5Playing a Proactive Role in

Policy Formulation

STRONG FRAMEWORK FOR PERFORMANCE-BASED RESOURCE ALLOCATION(A6 – A8)

Comprehensive policy goals exist,with clear linkages to specificobjectives and performancemeasures

Policy guidance encouragesresource allocation based onperformance

Policy guidance is well understoodand reflected in business processes

Policies not aligned with more spe-cific objectives or performancemeasures

Internal and external policy guidanceare not in alignment

Funding decisions based purely ongeography or history

Section 5.4Relating Policy to Performance

PROACTIVE ROLE IN POLICY FORMULATION(A9 – A11)

Agency clearly communicates cur-rent system performance withrespect to policy goals andobjectives to policy-makers andcustomers

Agency proactively presents policychoices and implications to policy-makers

Agency has latitude to makeinvestment decisions based onperformance

DOT lacks credibility with legislatureor executive branch

External guidance is overly specific,e.g., includes lists of specific projectsor funding allocations

Front-line decisions not consistentlyin line with priorities

Section 5.4Relating Policy to Performance

Section 5.5Playing a Proactive Role in

Policy Formulation

3. Self-Assessment


Table 3.2 Planning and Programming

Benchmark Common Gaps See these Sections of the GuideCONSIDERATION OF ALTERNATIVES IN PLANNING AND PROGRAMMING

(B1 – B3)

Long-range plan evaluates capital,operational, and modal alternatives

Capital-maintenance tradeoffsexplicitly considered

Current financial data used todevelop project cost estimates andmanagement system cost models

Lack of analysis of alternativeapproaches to problems

Requiring long-term solutions

Implications of different investmentlevels and mixes are not analyzed

Lack of understanding of appropriatelevels of maintenance versus capitalinvestment

Section 6.2Planning

Section 6.3Capital Programming

Section 7.4Cost Tracking

PERFORMANCE-BASED PLANNING AND CLEAR LINKAGE AMONG POLICY,PLANNING, AND PROGRAMMING

(B4 – B7)

Long-range plan is consistent withgoals and objectives and realisticrevenue projections

Long-range plan provides clearguidance to programming process

Project selection and resource allo-cation methods reflect current poli-cies and priorities

Inability to translate policies into per-formance criteria

Focusing too early on only one solu-tion at project level

Projects selected with poorly definedscopes, budgets, and schedules

Section 6.2Planning


Section 6.4Program Structure

PERFORMANCE-BASED PROGRAMMING PROCESS(B8 – B13)

Candidate projects evaluated onbenefit, cost, or performanceimpacts

Project selection based on merit andconsiders least-life-cycle costapproaches

Alternative maintenance levels ofservice defined and evaluated

Outcome-based performancemeasures not defined for all programcategories

Equity and political concerns havelimited use of performance-basedapproach

Criteria for project selection notclearly aligned with stated perform-ance measures


Section 6.5MaintenanceProgramming

3. Self-Assessment


Table 3.3 Program Delivery Diagnostic

Benchmark Common Gaps See these Sections of the GuideCONSIDERATION OF ALTERNATIVE PROJECT DELIVERY MECHANISMS

(C1 – C2)

Options for delivering programsand services are periodically con-sidered and evaluated

Standard bid process used for all con-struction projects; options notevaluated

No process in place to exploreresource sharing or outsourcingoptions to improve maintenance cost-effectiveness

Section 7.2Alternative Delivery Methods

EFFECTIVE PROGRAM MANAGEMENT(C3 – C9)

Performance measures used totrack program delivery

Data used to make adjustments toprogram and delivery processes

All stakeholders informed of pro-gram status

Insufficient review process to keepprogram changes in check and man-age their impacts

Program delivery indicators notreported regularly or used as effectivemanagement tool

Section 7.3Program Management

Section 8.5Systems Monitoring and

Feedback

COST TRACKING AND ESTIMATING(C10 – C11)

Total costs of delivering programsand services are known by activity

Current financial data used todevelop project cost estimates andmanagement system cost models

Lack of consistent breakdowns ofactivities and resources used for costtracking

No method in place to determineindirect cost allocations for activities

Cost tracking information not in aform useful for budgeting, investmentanalysis, or asset management systemcost model updates


3. Self-Assessment


Table 3.4 Information and Analysis Diagnostic

Benchmark Common Gaps See these Sections of the GuideEFFECTIVE AND EFFICIENT DATA COLLECTION

(D1 – D5)

Complete and current asset inven-tory and condition data

Efficient data collection and proc-essing methods provide credibledata at acceptable cost

Information on customer percep-tions collected and used

Data do not reflect full range of assetsunder agency responsibility

Existing data lack credibility; datacollection perceived as not worth itscost

Information on customer perceptionof condition/performanceunavailable


Section 8.2Information Needs and Data

Quality

INFORMATION INTEGRATION AND ACCESS(D6 – D9)

Managers at all levels can easilyaccess information they need

Maps of asset condition, need, andprojects are readily available

Geographic referencing and datastandards in place

Lack of data sharing across units;duplication and inconsistency

Staff lack good tools to access data orlack training on their use

Lack of consistent geographicreferencing

Section 8.3Data Integration and

Accessibility

USE OF DECISION SUPPORT TOOLS(D10 – D16)

Tools are available to calculate per-formance measures

Tools are used to systematicallyidentify needs and projects

Tools are used to analyze project orstrategy benefits and costs andcompare alternate solutions

No systematic process for identifyingneeds

Project selection lacks crediblejustification

Lack of ability to relate investmentlevels to resulting performance orbenefit

Section 8.4Decision Support

SYSTEM MONITORING AND FEEDBACK(D17 – D20)

Agency monitors system condi-tion/performance

Actual condition/performancecompared to target values

Information periodically providedto decision-makers and externalstakeholders

No systematic process for monitoringcapital programs

No systematic process for monitoringmaintenance programs

No mechanism for providing moni-toring results to decision-makers andexternal stakeholders

Section 7.3Program Management

Section 8.5Systems Monitoring and

Feedback

Section 8.6Reporting and Documentation

4. DEVELOPING A STRATEGY


4.1 SETTING THE STAGE

4.1.1 OVERVIEW

The first part of this chapter discusses the need foragencies to customize their approach to asset man-agement. The second part will help you develop acomprehensive asset management strategy based onthe results of the self-assessment exercise presented inChapter 3. This process entails three steps:

1. Define the scope of asset management at youragency;

2. Establish roles and responsibilities for imple-mentation; and

3. Develop an asset management implementationstrategy and plan.

4.1.2 TAILORING AND CUSTOMIZING ASSETMANAGEMENT TO YOUR AGENCY

WHY THE NEED FOR TAILORING ANDCUSTOMIZATION?

While state DOTs share a fundamental mission androle in the public sector, they differ from one anotherin several important respects:

� The transportation system that is managed bythe agency – e.g., its size and composition,degree of urbanization, the range of modes andfacilities that are included, and current and pro-jected condition and performance.

� The agency’s institutional and funding envi-ronment – e.g., the policy framework governingits directions and priorities; relationships with theGovernor’s office, Legislature, TransportationCommission or Board, regional and local agen-cies, and other external stakeholders; customerexpectations and perceptions of the transporta-tion system and quality of service provided bythe agency; status of transportation programs andfunding; and projected revenue streams versusanticipated funding needs.

� Organizational structure, capabilities, andmanagement approach – e.g., the effectivenessand efficiency of business processes to performkey asset management functions; management

philosophy and culture; technological sophisti-cation in IT applications, construction andmaintenance practices, materials and testing,and level of training; and success in communi-cating mission, strategic and tactical objectives,accomplishments, and future directions.

These factors influence how each DOT will approachasset management. They affect how an agency per-ceives need for asset management improvement,where it identifies its most important priorities andwhy, what paths to implementation are realistic toconsider, and what steps are feasible in terms ofhuman, financial, information, and other resourcesavailable. While the asset management concepts andprinciples in Chapter 2 apply generally, the bestapproaches to asset management implementation willbe specific to each agency, and implementation plansmay differ considerably from one agency to another.The breadth of coverage of this Guide recognizes thata spectrum of potential situations and implementationstrategies will occur among state DOTs and othertransportation agencies, as noted in Chapter 1.

Modern-day asset management is evolving in the U.S.public-sector transportation industry. Data are sparseas to how the cross-section of state DOT characteris-tics would be expected to affect asset managementimplementation, and what strategies would work bestin agencies having particular characteristics.1 How-ever, preliminary indications of the diversity in cur-rent state-of-practice and their implications forpotential improvements were obtained at a June 2002NHI Pilot Course on Transportation AssetManagement. Approximately 50 professionals fromthe United States and Canada attended this PilotCourse, comprising executives and senior managersfrom state DOTs and the FHWA, together with profes-sionals from the academic and consulting communities.

1 The synthesis of practice completed in Phase 1 of thisstudy provided examples of different assetmanagement practices implemented by state DOTsand other public and private transportationorganizations. The sample included fewer than 10DOTs, however, and no attempt was made to relatecurrent or planned state-of-practice to theirrespective characteristics regarding transportationsystems and programs, and organizational andinstitutional characteristics. Lead-state andlaboratory-state efforts as well as case studiesproposed in AASHTO’s Strategic Plan may begin toprovide this more detailed information.

4. Developing a Strategy


As part of the exercises, attendees completed a versionof the self-assessment described in Chapter 3 for theirrespective state DOTs or based on their knowledge ofsuch agencies. While the attendees did not constitutea scientifically selected sample, they did represent abody of senior managers with a broad perspective onagency practice and a good knowledge of asset man-agement principles, methods, and potential applica-tions and benefits to their organizations. Thefollowing section summarizes the results of this exer-cise. These results should be interpreted as a point ofdeparture for discussion when an agency is inter-preting its own results of the self-assessment, ratherthan definitive conclusions of the state of practice inasset management. Nonetheless, even within thissample, there are indications of the range of currentpractices and perceptions, and the correspondingimplication to tailor and customize asset managementrecommendations to each agency.

COURSE RESPONSES ON STATE-OF-PRACTICE INDOTS TODAY

NHI course attendees were asked to respond to a sub-set of 40 statements from the self-assessment formssimilar to those in Chapter 3, reflecting their percep-tions of their own state DOT or, if they were notemployees of a DOT, their understanding of typicalagency practices with which they were familiar.Rather than presenting all responses, selected but rep-resentative examples are given below that illustratethe diversity in current state-of-practice among agen-cies represented by the course participants. Sinceyour agency may experience similar distributions ofresults in your own self-assessment, based on differ-ent perspectives of managers from different organiza-tional units, you may wish to consider the examplesbelow in analyzing results within your own organiza-tion. Another thought that is prompted by theseresults is that there is always room for improvement –no statement tested by the self-assessment has allresponses at level “4,” indicating strong agreementthat the “best practice” advocated by good asset man-agement is universally followed in all the agenciesrepresented at the Pilot Course.

WHAT IS YOUR APPROACH TO ASSET PRESERVATION?

Two statements deal with an agency’s approach topreservation of its infrastructure assets. Statement 1(S1) below conveys a policy perspective, whileStatement 2 (S2) reflects a business-process view.

� S1 – Policy guidance supports preservation ofexisting infrastructure assets.

� S2 – Asset preservation is based upon least-life-cycle-cost approaches rather than exclusive reli-ance upon worst-first strategies.

Responses to these statements are shown in Figures 4.1and 4.2 respectively.

Figure 4.1 indicates that more than two-thirds of therespondents feel that their transportation policies donot explicitly support asset preservation. This does notmean that preservation is not being carried out by theseagencies. More likely it reflects managers’ judgmentsthat a more explicit communication of the priority andobjectives of preservation would be helpful.

Figure 4.1 Policies Support Preservation

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Figure 4.2 Life-Cycle-Cost Approach Used forAsset Preservation

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Figure 4.2 relates to the method of managing preser-vation. The implication is that only one-third ofrespondents perceive their approach to be based on alife-cycle-cost analysis; others rely more heavily onworst-first criteria. The responses were not analyzedto determine to what degree the results in Figure 4.2are correlated with those in Figure 4.1, but this issuewill not arise in the self-assessment of an individualagency.

HOW DOES YOUR POLICY FRAMEWORK INFLUENCEASSET MANAGEMENT PRACTICE?

Consider the responses to these statements regardingexisting policy and the way in which transportationagencies respond to this guidance:

� S3 – Policies support a long-term, life-cycleapproach to evaluating investment benefits andcosts.

� S4 – Policy guidance on transportation resourceallocation allows our agency sufficient flexibilityto pursue a performance-based approach.

� S5 – Our agency works with political leadersand policy-makers to present policy options andconsequences as part of our budget process.

Responses to these statements are shown in Figures 4.3through 4.5. These graphs collectively indicate consid-erable variation in management responses to the state-ments above.

Figure 4.3 Policies Support Life-CycleApproach

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Taking Statement 4 as an example: Recommendationsfor improving asset management practice might be

quite different in those agencies that responded posi-tively in Figure 4.4 versus those that responded nega-tively. An agency that feels it can pursue performance-based approaches can, if it so chooses, move directly toconsider resource allocation methods that conform tothe principles outlined in Chapter 2, if it is not alreadyusing such approaches. An agency that does not feelthat its policy framework supports performance-basedapproaches, however, may need to adopt differentobjectives and tactics, depending upon the particularsituation at hand. For example, communication withgoverning bodies on the value of performance-basedapproaches and the fact that they are already used incertain programs (presumably pavement and bridgemanagement, for example) may lead to expanded useof these techniques.

Figure 4.4 Policy Guidance SupportsPerformance-Based Approach

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Figure 4.5 Agency Proactively Works withPolicy-Makers

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ARE YOUR BUSINESS PROCESSES CONSISTENT WITHONE ANOTHER?

Consider the following statements that deal with basicwork processes in resource allocation:

� S6 – Our agency’s long-range plan providesclear and specific guidance for the capital pro-gram development process.

� S7 – Criteria that are used for allocatingresources, setting program priorities, andselecting projects are consistent with statedpolicy goals and objectives and defined per-formance measures.

Responses are in Figures 4.6 and 4.7.

Figure 4.6 Long-Range Plans ProvideProgramming Guidance

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Figure 4.7 Evaluation Criteria Are Consistentwith Policies

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Again, it is not clear to what degree the responses inFigures 4.6 and 4.7 are correlated with one another. Ineach case, however, responses are distributed acrossthe spectrum of agreement or disagreement. Onceagain, how and where asset management conceptsand principles apply, and by what techniques theyshould be implemented, will typically vary amongagencies depending upon where their responses tothese and other self-assessment criteria fall.

By now the pattern of responses is becoming clear. Acouple more examples will be provided just to illus-trate the pervasiveness of these types of differencesacross agencies.

DOES YOUR AGENCY’S PROGRAM DELIVERY CONFORMTO GOOD ASSET MANAGEMENT PRACTICE?

Consider two aspects of program delivery that areprobed in the self-assessment:

� S8 – Our agency periodically evaluates the useof alternative delivery options.

� S9 – Our agency has a well-established andsmoothly functioning process to make programadjustments.

Responses to these statements are in Figures 4.8 and4.9, respectively.



Figure 4.8 Alternative Delivery OptionsEvaluated

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Figure 4.9 Process for Program Adjustments

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Reactions to Statement 8 are dispersed fairly uni-formly. Responses to Statement 9 are skewed towardthe negative end of the scale, indicating that a processfor program adjustments could be a candidate busi-ness process improvement for many DOTs. None-theless, Figure 4.9 indicates that this need is, again,not a universal one.

DOES YOUR AGENCY COLLECT AND USE DATA TOIMPROVE ASSET MANAGEMENT?

Two statements on the collection and use of data andinformation for basic functions in asset managementalso illustrate the diversity in current practice:

� S10 – We regularly collect information on thecondition of our assets, sufficient to meet internal

and external reporting requirements and guidemaintenance and improvement planning.

� S11 – Our agency uses information on changesin asset condition over time to develop andimprove forecasts of asset life and deterioration[models] in our asset management systems.

Responses are in Figures 4.10 and 4.11.

Figure 4.10 Sufficient Condition InformationCollected

While Figure 4.10 indicates that about two-thirds ofthe respondents surveyed identify with the collectionof condition data, only about 40 percent of respon-dents said their agency applies these data to developimproved models in management systems. Itappears, based on these data, that some agencies havecondition information and are applying it to improveanalytic models; other agencies have this informationbut are not applying it to analytic updates; and a thirdgroup does not have this information, or at least in theway described in Statement 10. The agendas and pri-orities of asset management implementation willlikely vary among agencies in this aspect as well.

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Figure 4.11 System Models Reflect ActualAsset Deterioration Rates

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OPPORTUNITIES TO TAILOR AND CUSTOMIZE

Key questions in asset management implementation –where to focus, what to do, and how to do it – dependon the characteristics, needs, and priorities of individ-ual agencies such as yours. That is the lesson of theseveral examples above. It is for this reason that thereis no single, “correct” approach to improving assetmanagement. As the examples above show, tasks thatmay be entirely appropriate and important for oneagency may be unnecessary or peripheral to another.The subsequent chapters of this Guide cover a numberof DOT functions and situations broadly because youragency and others should understand the scope andrange of options available. You are then able to makeyour own informed decisions on how to advance assetmanagement practice in the way that best applies toyour organization.

One way of focusing on the elements of asset manage-ment most important to your agency is by tailoringimplementation: i.e., limiting its breadth or scopeinitially. The self-assessment in Chapter 3 is one tool tohelp you do this. Another approach is to select par-ticular assets, programs, functions, or other elements ofyour agency’s infrastructure management, and imple-ment asset management principles and practices inthese areas first. This approach provides a laboratoryin which you can see how implementation proceedsbefore extending it more widely. Subsequent sectionsof this chapter give several examples of tailoring assetmanagement implementation.

Customization refers to specific techniques and tacticsthat you choose to achieve the objectives of assetmanagement given the management characteristics,

constraints, and culture of your particular organiza-tion. The discussion in relation to Figure 4.4, whichsuggests ways to deal with varying degrees of policysupport for performance-based infrastructure man-agement, provides a few examples of how to custom-ize an asset management approach. Additionalexamples related to policy, planning and program-ming, program delivery, and information and analysisare presented in Chapters 5 through 8, respectively.

4.2 DEFINE THE SCOPE OF ASSETMANAGEMENT

Defining the scope of asset management requires anagency to answer the following four fundamentalquestions:

� Which assets will our asset management effortsaddress?

� Which actions will be covered in our asset man-agement implementation plan?

� Which business processes will be included in theeffort?

� Which asset management concepts will beemphasized?

Defining the scope early in the process will provideclear focus for the effort, insure that the initiative isappropriately scaled, and provide basic direction forboth process and information systems initiatives.

4.2.1 WHICH ASSETS?

Transportation agencies can design and implementasset management systems for a wide variety of infra-structure portfolios. Assets can be selected for inclu-sion in the asset management implementation plan bythe following categories:

� Physical Asset Classes – Travel ways, struc-tures, operations equipment, and features asso-ciated with highways, airports, rail, ports,transit, etc.

� Ownership – State-owned assets, and otherassets that are not owned by the DOT but inwhich a state has an interest (e.g., locally ownedbridges that receive state funds).



� Other Asset Classifications – For example,urban versus rural, functional class, traffic vol-ume served, type of usage, or other tiers orclassifications.

4.2.2 WHICH ACTIONS?

Asset management strategies can be designed toenhance various types of investments (e.g., preserva-tion activities, capital improvements, operationalimprovements, etc.). The full benefits of applyingasset management principles are realized when all ofthese investments are considered in unison. Examplesinclude tradeoff analyses between preventive mainte-nance strategies with a deferred maintenance strategythat will lead to major capital improvements, andtradeoff analyses between widening a section of roadand implementing an ITS project to address congestion.

However, benefits also are possible by applying assetmanagement principles to any one of your agency’sinvestment types or programs. For example, a per-formance-based maintenance level-of-service programcan lead to improvements in the cost-effectiveness andcustomer-orientation of maintenance budget decisions.

4.2.3 WHICH BUSINESS PROCESSES?

Asset management principles are relevant to theentire infrastructure management process – policydevelopment, planning, programming, budgeting,project development, program delivery, maintenance,operations, etc. Again, maximum benefits are gainedwhen the concepts and techniques are applied con-sistently throughout the resource allocation and utili-zation processes. However, improvements may befocused on a single process or program, or a subset ofprocesses, particularly if there is a strong priority forimprovement here; if an agency wishes to implementasset management on a trial basis first; or if resourceconstraints preclude addressing all relevant functionsor programs at once.

4.2.4 WHICH ASSET MANAGEMENTCONCEPTS?

Your agency should reach agreement on commonasset management principles and approaches to beapplied consistently throughout its asset managementefforts. Examples include:

� Consideration of user benefits and costs in a life-cycle analysis framework;

� Strategic applications of asset managementsystems;

� Tradeoff analyses across programs;

� Integration of information using existing, single-focus legacy systems;

� Advanced applications in data acquisition;

� Consistent cost, delivery, and accomplishmenttracking; and

� State-of-the-art applications in GIS, data ware-housing, or other IT techniques.

4.2.5 SCOPING ISSUES

The following issues should be considered whenevaluation scoping options within your agency.

� Buy-in and capabilities of responsible parties –As the scope of asset management is expanded,more and more parties will be required toevaluate and potentially revise their businessprocesses. For example, limiting the scope ofasset management to state-owned assets willrequire significantly smaller education effortthan including both state-owned and locallyowned assets.

� Availability of data and analytical tools – Asillustrated in Chapter 2, every step of asset man-agement is supported by accurate and currentdata and decision support tools. Includingassets, actions, or processes for which data arenot complete or for which significant systemwork is necessary may significantly increase theresources required for implementation.

� Appropriate scope size – Developing a detailedimplementation plan for improving asset man-agement for all assets, all actions, and all proc-esses will be more expensive, take longer, andrequire significantly more resources to imple-ment than a more focused effort. Developing anall-encompassing plan may be less manageableand therefore hinder progress in priority areas.

� Legislative or institutional constraints – Barriersoutside of the control of your agency may limitthe scope of its asset management efforts. Forexample, consider a situation in which state leg-islators mandate all available funds to particular



modes. In this case, it is likely that program-leveltradeoffs will be omitted from the scope of assetmanagement. Section 4.3 addresses this situationin the context of developing a plan around a setof constraints.

4.3 ESTABLISH ROLES ANDRESPONSIBILITIES

4.3.1 LEAD ROLE

Each task in the asset management implementationplan is likely to entail a number of detailed issues andinteractions with other tasks that will need to beresolved. To provide continuing guidance in theeffort, establish clear accountability for success of theinitiative, and ensure that activities are complemen-tary to each other and performed in a logicalsequence, it is recommended that lead responsibilityfor asset management be assigned to one individual.Responsibilities of this person may include:

� Chair an executive steering committee;

� Oversee development of a state implementationstrategy and plan;

� Coordinate implementation efforts;

� Track implementation and modifying plan asneeded;

� Communicate with other departments on assetmanagement issues;

� Coordinate departmental units and resolvingorganizational issues; and

� Act as an authoritative point of contact forLegislature, Commission, or key stakeholders.

These responsibilities suggest a profile for the idealasset management “owner.”

� Effective communication and facilitation skills;

� High-level understanding of the several organ-izational units that will be involved in planimplementation; and

� Demonstration of executive leadership andcommitment by example.

4.3.2 SUPPORTING ROLES

To maintain cross-disciplinary support and coordinateasset management activities throughout agency, it isrecommended that support roles be established earlyin the implementation process.

One type of support role that may be considered is anexecutive steering committee to guide developmentof the asset management implementation plan andagree on organizational roles and responsibilities.This committee should include representatives ofinfrastructure managers, planning and programming,maintenance and operations, financial management,information technology, and administration; districtrepresentatives; and potentially external agencies andinterest groups.

Another support role to consider is a technical com-mittee. As one example: depending on the make-upof the steering committee and the extent to whichyour agency’s priorities are IT-related, a technicalcommittee may be needed to guide data and system-application-related initiatives that cross agency sec-tions and divisions. This committee should compriserepresentatives from across the agency with an in-depth understanding of the agency’s IT issues,including technical experts for major asset classes.

A third type of support role may be individual activ-ity or task “owners.” It is recommended that as theasset management implementation plan is developed,the steering committee assign an individual owner toeach of the actions called for. There will likely beinstances when the individual with overall responsi-bility for the asset management implementation willalso be responsible for individual activities or tasks.However, this decision should be made on a case-by-case basis.

4.4 BUILD AN ACTION PLAN

4.4.1 IDENTIFY AREAS NEEDINGIMPROVEMENT

Once the scope has been defined and responsibilitieshave been established, the next step is to define objec-tives and formulate tasks to achieve each one. Thisprocess requires an agency to bring together the assetmanagement principles presented in Chapters 1 and 2,the results of the self-assessment exercise in Chapter 3,



and the implementation guidance provided inChapters 5 through 8. These chapters organize keyconcepts and examples of typical implementationactivities by the four areas of asset management focus:

� Chapter 5 – Policy goals and objectives;

� Chapter 6 – Planning and programming;

� Chapter 7 – Program delivery; and

� Chapter 8 – Information and analysis.

Formulating tasks requires an over-arching look at theself-assessment results to understand the connectionsthat may exist among issues raised in each area. Thisrequirement does not imply that your agency shouldtry to address every item all at once. Rather, a broadperspective will enable your agency to identify prior-ity actions for improving asset management.

Following are examples of this process organizedaround several types of improvements, listed below,that could result from applying asset management.Other types of improvements are, of course, possible,and you should not be constrained by the examplesbelow. Five areas of improvement are discussed below:

� Desired improvement in technique;

� Consistency among elements of assetmanagement;

� Gaps in good asset management practice;

� Constraints on good asset management practiceover which the agency has little or no control;and

� Desired improvement in the principles under-lying an asset management practice.

These five categories are strictly for convenience inhelping organize the examples. They are not funda-mental to an asset management approach. What isimportant is the fact that the need for improvement isrecognized explicitly, and recommendations for actionare identified for inclusion in your agency’s assetmanagement implementation plan.

IMPROVING SPECIFIC TECHNIQUES OF ASSETMANAGEMENT

This type of improvement entails focusing on thosetechniques most in need of improvement: e.g., life-cycle analyses, strategic applications of asset man-agement systems, tradeoff analyses, ways to integrate

information using existing, single-focus legacy sys-tems, advanced applications in data acquisition, state-of-the-art applications in GIS, etc.

An example objective in this category is the introduc-tion of life-cycle cost considerations of preventivemaintenance throughout an agency. Achieving thisobjective may involve: 1) adjustments to existing assetmanagement systems (PMS, BMS, MMS, other systemsfor hardware, tunnels, etc.), or 2) development of aseparate tool to identify and analyze feasible preven-tive maintenance strategies.

Chapters 5, 6, and 8 provide guidance on developingand evaluating tasks in this area.

ACHIEVING CONSISTENCY AND ALIGNMENTAMONG ASSET MANAGEMENT PRACTICES

An example objective in this area is enhancing currentinformation technology to support an agency’s cur-rent business processes. Achieving this objective mayrequire a preliminary diagnosis of why information isnot now used in the business process, and how toaddress the problem. Examples include:

� Lack of awareness of system capabilities? Planto conduct workshops or training to advertisefull system capability.

� Poor communication between organizationalunits? Plan to institute procedures that promotecommunication between affected business units.

� Political constraints on the business process thatpreclude use of system information? Plan waysto apply system information to inform thepolitical process, or to provide a performancereview of current decisions.

� Lack of system credibility? Plan to identify andachieve needed improvement in system dataquality and analytic capability.

Chapters 5, 6, 7, and 8 provide guidance on formu-lating tasks to support this objective.

Another example in this area is development of plan-ning and programming criteria that are more consistentwith policy objectives. Achieving this objective mayentail a top-to-bottom review of the planning and pro-gramming processes, including planning criteria, proj-ect prioritization and selection procedures and criteria,resource allocation procedures, and performancemeasures, all in comparison with policy objectives.



Chapters 5 and 6 provide guidance on formulatingtasks in this area.

FILLING GAPS IN GOOD ASSET MANAGEMENTPRACTICE

An example objective in this category is developmentof the capability to track and manage program deliverywhere none currently exists. Achieving this objectivemay involve formulating procedures and informationrequirements to track and manage delivery accordingto schedule and cost targets at the project and the pro-gram levels, and identification of correspondingorganizational responsibilities for review and approvalof deviations.

Chapter 7 provides guidance on formulating tasks tosupport this objective.

Another example is providing high-level informationon asset condition, performance, and implications ofdifferent investment options to executive management.Approaches to achieving this objective may involvecreation of either a data warehouse or an executiveinformation system (EIS) to process and organizeinformation from existing asset management systemsand to compose reports suitable for executives.

Chapters 5 and 8 provide guidance on formulatingtasks to support this objective.

OVERCOMING CONSTRAINTS ON GOOD ASSETMANAGEMENT PRACTICE

Example of constraints on good asset managementinclude statutorily defined priorities or designatedfunding of modes/programs. Such mandates limit anagency’s latitude in achieving the state-of-the-artdescribed in the asset management matrices inChapter 2. Therefore, in developing an assetmanagement implementation plan, an agency shouldfocus on the aspects of its business process that areopen to change. It should identify asset managementprinciples that suggest improvements within theseconstraints.

For example, if funding splits across programs arelegislatively mandated, how could an agency improveits asset management practices? It could assume thatrevision of the statute is unlikely, and focus on theaspects of operation that are under its control. Itcould establish procedures to ensure that within thespecified priorities and funding rules, investments go

to the most meritorious projects. It also could trackthe success of the revised allocation process by devel-oping guidelines for monitoring system performancemeasures.

Chapters 5 and 6 provide guidance on formulatingtasks in this area.

IMPROVING THE PRINCIPLE UNDERLYING ASSETMANAGEMENT PRACTICE

An example of an objective in this category is transi-tion to a more performance-based resource allocationprocess. Achieving this objective may require severalbasic changes to the current resource allocation proc-ess to focus on applicable policy objectives and per-formance measures, and to define appropriate criteriafor project ranking and selection. It also may entailaccompanying changes in organizational roles, ana-lytic and information system capabilities, and com-munication with local agencies involved in systemplanning and program development.

Chapters 5, 6, 7, and 8 provide guidance ondeveloping actions to support this objective.

4.4.2 TIMEFRAME

An important aspect of developing an asset manage-ment implementation plan is to define a time framefor each of the improvement activities or tasks. Fac-tors to consider include:

� The overall priority of each task.

� The logical sequence of the tasks required toachieve an objective.

� An agency’s annual cycles for policy and proc-ess updates, data collection and analysis, budgetand program development, or delivery of proj-ects and services. Asset management initiativesshould be scheduled to complement currentbusiness cycles.

� The resources available to implement the plan.A mixture of short-, mid-, and long-term initia-tives will insure that funds and staff availabilityare not barriers to successful implementation.



4.4.3 ASSET MANAGEMENTIMPLEMENTATION PLAN

As the process described above unfolds, it is recom-mended that priority areas be documented in an assetmanagement implementation plan. As an illustration,Table 4.1 organizes recommendations from earlierparts of this chapter into a sample implementationplan. The final format and content of your agency’saction plan should reflect its unique set of needs.However, the table does highlight several types ofinformation to consider.

� The first column identifies each of the agency’sobjectives. In practice, your agency may wantto consider further organizing objectives by cre-ating a table for each of the four key areas ofasset management.

� The second column lists specific activitiesrequired to achieve the objective.

� The third column documents the expected bene-fits of each activity. Defining benefits willensure that all parties understand theimportance of the activities and may help to cre-ate buy-in for individual initiatives and answerthe question, “Why do it?”

� The final column recommends a timeframe foreach activity. In Table 4.1, “near term” and “midterm” are used to establish the relative timing ofeach activity. More specific timing informationsuch as start date and estimated duration alsomay be beneficial.

� Additional information provided in an assetmanagement implementation plan may includeactivity “owner,” cost, priority, linkages amongrecommendations, and agency-specific items(e.g., agency-wide strategic planning areas thatthe activities support).



Table 4.1 Sample Implementation Plan Format

Objective Activity Intended Benefits Timing

1. ESTABLISH ASSETMANAGEMENTOWNERSHIP

1.1 Assign lead for asset managementcoordination

• Clear accountability for assetmanagement

• Ensure that activities that arerelated to each one another areperformed in a logical sequence

Near Term

1.2 Form asset management steeringcommittee with representativesfrom across the agency

• Cross-disciplinary support

• Coordination of asset manage-ment activities throughoutagency

Near Term

2. CLEARLY DEFINESCOPE OF ASSETMANAGEMENT

2.1 Define which assets and activitiesto be included (e.g., all capital andmaintenance activities on state-owned pavements and bridges)

• Clear focus for the effort

• An effort that is appropriatelyscaled

Near Term

2.2 Agree on the types of investments(e.g., preservation, capital, opera-tional, etc.) to be considered in theasset management plan

• Clear focus for the effort Near Term

2.3 Agree on common principles andapproaches to be applied to infra-structure decisions (e.g., life-cycleinvestment strategies, program-level tradeoffs, asset valuationmethods, etc.)

• Basic direction for both processand information systemsinitiatives

Near Term

3. IMPROVE PUBLICAND INTERNALUNDERSTANDINGOF ASSETMANAGEMENT

3.1 Hold periodic departmental work-shops to discuss asset managementand its implications for departmentactivities

• More informed and committedstaff

Near toMid Term

3.2 Develop and distribute publicinformation describing asset man-agement and its importance

• Increased public awareness andsupport

Mid Term

5. POLICY GOALS AND OBJECTIVES


5.1 INTRODUCTION

The resource allocation and utilization frameworkdescribed in Chapter 2 represents a cyclic businessprocess supported by systems monitoring, informa-tion, and feedback mechanisms. Interactions canoccur throughout the process among these functions:e.g., between policy formulation and planning, andbetween planning and programming. Moreover,practices in these functions differ among DOTs. Forclarity and organizational purposes in this Guide,therefore, the stages of this framework are treatedsequentially in individual chapters, recognizing thatthe actual business practices are more complicated.

In focusing on Policy Goals and Objectives, thischapter looks at how asset management can improvepolicy formulation, the role of policy in driving otherfunctions addressed by asset management(Figure 5.1), and the proactive role that your agencycan play in policy formulation to advance asset man-agement further.

Figure 5.1 Policy Goals and Objectives withinResource Allocation and Utilization


Program Delivery


Policy Goals and Objectives Quality Inform

ation and Analysis

� Section 5.2 describes the role of policy guidancein the context of the overall asset managementframework;

� Section 5.3 provides examples of improvedpolicy development that can result from appli-cation of asset management principles;

� Section 5.4 describes specifically how policyformulation is incorporated within a perform-ance-based approach to infrastructure manage-ment; and

� Section 5.5 describes proactive roles that atransportation agency can play with its externaland internal stakeholders.

5.2 ROLE OF POLICY GUIDANCE

In the context of asset management, resource alloca-tion and utilization in Figure 5.1 have a top-to-bottomconsistency in the methods and criteria used formaking decisions. The role of policy guidance in thiscontext is to establish clear direction for theremaining functions. Planning, priority program-ming, program delivery, and system monitoring allneed to be aligned with policy objectives and associ-ated performance measures.

Policy guidance may be expressed in several waysthat collectively define the directions and overall pri-orities for an agency’s infrastructure management:

� State and federal statute or regulation;

� Policy statements and guidelines of the gover-nor, legislature, and transportation commissionor board;

� Directives issued by agency executives; and

� In some cases, agreements with other partiesthat define an agency role, responsibility, or tar-get to be met.

The following items summarize key issues regardingpolicy formulation in an asset management contextthat will be dealt with in the remainder of thischapter:

� The importance of policy formulation, and of anagency’s role in influencing how policies areformulated, can sometimes be overlooked.

� Policy guidance must be meaningful to all func-tions in resource allocation and utilization.

� The implications of policy statements should beexplored by an agency, working with politicalleaders and stakeholders, during policy formu-lation rather than afterward.

� Policies should be related to objectives, per-formance measures, and performance targetsright from the start.

� A customer perspective should be reflected inpolicy.

5. Policy Goals and Objectives


� A well-structured approach to policy formula-tion and adoption can help establish appropriateroles for the transportation agency and its gov-erning bodies in subsequent program develop-ment and management.

5.3 IMPROVED POLICY-MAKING

The concepts and principles of asset management canimprove the ways in which policies affecting trans-portation are conceived and formulated. This sectionwill explore the following opportunities forimprovement:

� Broadening thinking about potential transpor-tation solutions;

� Relating “policy” to “process” more strongly; and

� Employing more analytic information in policy-making.

5.3.1 BROADENED THINKING

Asset management encourages the identification ofoptions or alternatives at each stage of resource allo-cation and utilization. This broadened view of poten-tial solutions to transportation needs can apply topolicy formulation in the following ways:

� It encourages policy statements that focus ongoals in terms of improved performance, ratherthan on the specific types of investments needed.For example, a policy goal may be to “reducecongestion.” This goal can be met through anumber of strategies such as investments in newcapacity, operations projects to improve the effi-ciency of existing capacity, investments in othermodes to divert excess demand, and spotimprovements to relieve bottlenecks. Youragency should try to preserve its latitude toexplore these options in long-range planningrather than at the policy formulation stage.

� If a policy-making body is intent on includingproposed solutions as part of the policy state-ment (e.g., to explain the purpose of additionalfunding), it may be helpful to inform membersof the several options available, and to try toencourage wording sufficiently broad to coverthis range of possible solutions.

� Analyses of scenarios are being done increas-ingly in planning and programming; scenario

testing can apply to policy formulation as well.“Scenario testing” in this context is the system-atic investigation of the long-term costs toachieve different projected outcomes or results.It is a step in policy formulation that is oftenoverlooked, but is critical to establishing realisticobjectives and performance targets – or in set-ting the stage for additional resources.Increasing attention to the GASB 34 standardsfor the modified approach, which require disclo-sure of proposed values for asset condition andexpenditures, also will encourage greater use ofscenario testing.

These suggestions entail a proactive role for youragency in working with the legislature, governor’soffice, and transportation commission or board. Itentails education, communication, and analytic sup-port that leads to a greater shared understanding ofthe implications of particular policies. A by-productof this process is a more coherent set of policies, aswill be discussed further below. Additional examplesof how objective, analytic information can be usefullyapplied in policy formulation also are given below.

5.3.2 RELATING “POLICY” TO “PROCESS”

Policy formulation can sometimes appear detachedfrom other agency functions. This situation is espe-cially true if policy statements “say all the right things,”but otherwise are not in a form that can be usefullyapplied to making judgments and decisions in infra-structure investments. Such policy statements may betoo vague, numerous, or undifferentiated from oneanother to discern what are the tangible goals to beachieved and where are the priorities to be addressed.

Policy formulation in an asset management context“connects” directly to other functions in resource allo-cation and utilization. It leads to clear, specific, andpreferably quantifiable targets for achievement inlater stages of the process illustrated in Figure 5.1. Ifquantitative statements are not possible, qualitativestatements can suffice if they are informative andmeaningful (e.g., giving a sense of relative priority, orsuggesting a measure of success). The mechanisms bywhich policy formulation can accomplish these pur-poses will be covered in Section 5.4, dealing with per-formance-based management. To have policyformulation fulfill this role of clear direction in assetmanagement, however, your agency again must beproactive in working with policy-making bodies to



educate them on how performance-based manage-ment works, and what their roles are in the approachin relation to your agency’s role (see Section 5.5.1).

Florida DOT Work Program InstructionsEach year, the Florida DOT’s Program Development Officeproduces a set of “Work Program Instructions.” The DOT’sobjective is to clearly communicate federal, legislative, guber-natorial, and DOT policies to the parties responsible for devel-oping, adopting, and managing the DOT’s work program. Thedocument covers capital, maintenance, and operational activi-ties. For example, the 2001 instructions include:

� A matrix of legislative requirements that impact programdevelopment;

� The program development schedule and general instruc-tions for developing, adopting, and managing the DOT’sschedule of transportation projects (includes both capitaland maintenance activities);

� Funding guidance, such as permitted use of federal andstate funds, and program targets; and

� A discussion of alternative contracting mechanisms.

This document is an example of the Florida DOT’s efforts totie policy to process. It can be found in its entirety at the fol-lowing web site:

www11.myflorida.com/programdevelopmentoffice/work%20program%20instructions.htm

A benefit of relating policy to process is that the poli-cies themselves become more coherent as a package –i.e., they give clearer direction collectively as well asindividually. The reason for this greater consistencyis that issues of relative priority of policy goals andexpected outcomes are confronted during policy for-mulation rather than later; both your agency and yourpolicy-making bodies can be on the same pageregarding the purpose, importance, and expectationsof your infrastructure investments. Moreover, thisguidance can extend throughout your organization,providing the basis for clearer horizontal and verticalcommunication illustrated in Figure 2.2.

Connecting policy to process also can reduce the vul-nerability created by the leadership turnover experi-enced by most transportation agencies every few years.Policy formulation that embodies the principles oftransportation asset management (e.g., customer focus,performance-based, comprehensive view of assets,input from objective analytic tools, etc.) provides a

framework for institutionalizing a correspondinglyeffective business process. Once ingrained as part ofyour agency’s “way of doing business” and acceptedby political bodies and other stakeholders, this methodof policy formulation and the business processes thatfollow become easier to transmit to a succeedingadministration.

5.3.3 SUPPORTING POLICY-MAKING WITHOBJECTIVE INFORMATION

Objective information can assist policy-making in thefollowing ways. First, current and projected informa-tion on transportation system condition and perform-ance (including environmental, economic, social, andother impacts as available) can help identify trends andemerging situations requiring policy focus. Second,good information should inform policy formulationitself – i.e., policy objectives and targets should be setonly after analyzing the costs to achieve different levelsof condition and performance within a timeframe.Moreover, these scenarios need to be tested across therange of proposed policies, not just a single policy.(Relating policy to performance is discussed in moredetail in Section 5.4.)

Analyzing the costs required to achieve and maintainvarious condition or performance levels would enablean agency to establish realistic targets (i.e., targets thatare achievable given existing funding constraints, traf-fic usage, etc.). Such targets provide meaningfulguidance for subsequent steps in the resource alloca-tion and utilization process, and help to establishcredibility with external stakeholders.

Many agencies now have the capability to conductthese types of scenario analyses at least for preserva-tion, since modern pavement and bridge managementsystems often include a scenario testing capability.Maintenance management systems that are based onlevels of service and performance budgeting also candevelop these estimates for the maintenance program.Corresponding analyses in other areas (e.g., mobility,safety, economic development) may be available fromlong-range planning (Chapter 6). These tools can beemployed in policy formulation as well as in planningand budgeting.



Executive Information Systems

One approach to providing policy-makers access to informa-tion is to create an executive information system (EIS). Forexample, the Washington State Transportation ExecutiveInformation System (TEIS) is a web-based tool designed tosupport legislative planning and oversight of transportationactivities. Washington State Department of Transportation(WSDOT) managers and legislative transportation committeesuse the system to view executive-level information, performqueries, and generate reports. The TEIS consists of fivecomponents:

� Fiscal and Performance Monitoring. This application isused to track all WSDOT expenditures, revenues, per-formance measure activities, and full-time employees

� Capital Projects and Facilities Reporting. This system isused by legislators, legislative committee members, andWSDOT staff to view the status of transportation-relatedcapital projects. Information is available at both an individ-ual project level and an aggregate level.

� Fund Balance and Fee Modeling. This application is usedby legislative committee members to balance transporta-tion fund forecasts and planned expenditures. With thiscomponent of the TEIS, users can view WSDOT’s six-year program and financial plan and estimate income fromproposed revenue sources.

� Transportation Resource Manual. This manual, whichincludes information regarding transportation finance,policy, and governance, is available online through theTEIS.

� Change Management System. This component is used totrack suggestions for enhancements to any part of theTEIS.

Further information is available on the TEIS web site:www.transinfo.state.wa.us/

5.3.4 HOW MAY THESE STEPS HELP?

The steps suggested above can help close gaps andovercome pitfalls in policy formulation in thefollowing ways:

� They can improve the quality of policy guidanceby encouraging consideration of alternatives,building a more coherent policy package, andapplying good information and analytic supportduring policy formulation rather than afterwards.

� They can help overcome organizational impedi-ments to more effective policy development.

Seeing policy formulation as a stronger part ofthe resource allocation process and broadeningthe options and information technology supportfor policies can have several benefits:

- It can encourage exploration of new optionsfor transportation solutions and avoid anattitude of “business as usual.”

- It can combat the effects of turnover in leader-ship, establishing a core policy approachwhile recognizing that transitions betweendifferent policy perspectives are a fact of life.

- It can build consensus among departmentalunits that would otherwise hold different per-spectives on policies and agency priorities. Italso can help to align internal organizationalunits that hold conflicting objectives.

- It can encourage application of better infor-mation for use in current and future policyreviews.

� They can begin to address disconnects betweencurrent policies and existing decision criteriaused in other functions shown in Figure 5.1. Theexercise to define policy objectives and perform-ance measures provides key elements by whichto review procedures and criteria for decisionsin planning, priority programming, and pro-gram delivery.

5.4 RELATING POLICY TOPERFORMANCE

5.4.1 GOOD PRACTICE

Linking policy to performance is the foundation of theprocess in Figure 5.1. Good asset management in thiscontext implies the following:

� Policy goals provide guidance on investmentpriorities and levels of performance.

� Policy goals are related to specific performancemeasures, which are consistent with the measuresused in long-range planning, project evaluation,program tradeoffs, and system monitoring.

� Policies are evaluated with respect to thefunding needed to attain particular levels of per-formance, prior to policy adoption.



� Policy formulation is revisited periodically orafter major events affecting the policy frame-work (e.g., reauthorization of federal transpor-tation legislation).

Preservation Policy and Asset ManagementPreservation of existing assets is important to cost-effectivemanagement of existing infrastructure. It is for this reasonthat the management framework in Chapter 2 speaks tostrategies that preserve existing infrastructure at least-life-cycle cost within available resources. These strategies caninclude both capital projects and maintenance activities. Theframework also cites a benchmark practice to analyzecapital-maintenance tradeoffs to determine the best overallstrategy for preservation.

DOTs may be interested in a “preservation-first” policy,mindful of the value of their assets and the difficulty andexpense of keeping these assets in good condition in theface of declining revenues. While the principles outlined inChapter 2 certainly support cost-effective preservation, a“preservation-first” philosophy is a choice that is up to eachDOT and its policy-making bodies.

Individual agencies and their policy-making bodies mayadopt such a policy if they feel it is warranted. Asset man-agement principles suggest that the merits of this policy bedetermined through a performance-based analysis of preser-vation versus competing needs of other programs, includingscenario analyses of each program at different levels ofinvestment and tradeoff analyses among programs. Theseanalyses can help policy-makers determine whether a pres-ervation-first policy should be adopted.

Policy formulation reflects public priorities regardingthe role of transportation in a state. “Preservation ofthe existing system,” “efficient and safe movement ofpeople and goods,” and “enabling growth and eco-nomic development” are ways of expressing differentpriorities. The asset management framework does notprescribe what priorities should come first – only thatindividual agencies and their policy-making bodiesdiscuss and analyze policy options to adopt the onesthat are felt to be warranted.

5.4.2 ELEMENTS OF THE APPROACH

Policies in a performance-based context can be devel-oped with the following elements:

� Goals are statements that define the basic aim ofa policy. Example policy goals are statements

promoting better pavement performance andsafety, respectively. Objectives are specificaspects of goals to be attained. For example, theobjective for pavement performance may be “toprovide road users with a smoother ride”; andfor safety, “to reduce motor vehicle crashes.”

� Performance measures are observable, quantifi-able measures that align with objectives. Theyprovide the way to track progress towardmeeting the objectives. For example, measuresof pavement ride quality or serviceability couldbe used to gauge smoothness of ride. A meas-ure of crashes per 100 million vehicle-miles (100MVM) could be used as the performance meas-ure for the safety objective.

� Performance targets are specific values of per-formance measures that provide the levelexpected to be attained. This target may be setfor a specific time period and with the under-standing of a particular level of funding. It pro-vides the bar against which actual performancedata will be compared. For example:

- Regarding pavement smoothness, the targetmay be to increase the percent of pavementnetwork in good condition with respect toride quality from 75 percent to 85 percent bythe year 2005.

- Regarding safety, the target may be to reducethe crash rate from 1.38 to 1.35 per 100 MVMby 2005.

This approach implies a “tighter fit” than may haveexisted in the past between policy formulation and theother functions in Figure 5.1. All of these functionsemploy performance measures in an asset manage-ment context. This “tighter fit” also is the reason forthe suggestion that performance measures be definedat the time that policy goals and objectives are devel-oped, as discussed in relation to the managementframework that is illustrated in Figure 2.1. In thisapproach, performance measures provide the mecha-nism both for setting targets and for obtainingfeedback on actual system performance.

In some situations policy-making bodies (particularlytransportation boards or commissions) may participatein setting quantitative policy objectives, particularly ifthese objectives are being tied explicitly to additionalfunding. More typically, the policy statements that areadopted by policy-making bodies are qualitative, com-prising goals and priorities. Transportation agencies



can then translate these statements into quantitativeobjectives, in consultation with their policy-makingbodies.

5.4.3 POLICY GUIDANCE AND FUNDINGTHAT ARE NOT PERFORMANCE-BASED

Policy guidance and associated funding apportion-ments may not always reflect a performance basis.For example, legislative funding decisions on pro-grams for different assets, modes, or types of invest-ments may be based on historical funding baselines,formula-based splits, or deal-making rather than cur-rent performance objectives or targets. (Refer toSection 5.5.1 for elaboration of these examples.)Institutional agreements with local or regional trans-portation organizations may result in agreed-uponfunding splits that likewise may not reflect perform-ance-based needs – or, if they are established withperformance clearly in mind, are not reviewed andupdated over time.

Situations such as these are realistically a fact of life.While they represent a different way of looking attransportation needs and priorities, they can never-theless be made to work with performance-basedmethods. Some ways in which this can occur are asfollows:

� To apply performance-based techniques withinthe existing policy framework or fundingapportionment: i.e., to develop policy objec-tives, performance measures, and performancetargets in the context of the existing political,institutional, and financial arrangements.

� To promote performance-based approaches withlocal and regional agencies that work with yourDOT.

� To discuss transportation needs and prioritieswith other agencies to identify areas where stra-tegic interests overlap, and to develop policyobjectives and performance measures accountingfor these.

� To conduct training, provide data support, andgive other appropriate policy- and performance-related assistance to transportation agencies thatprovide services of state interest.


The steps suggested above can help close gaps andovercome pitfalls in policy formulation in thefollowing ways:

� They provide a management structure andrationale to deal with broad, comprehensive, butvague policies (so-called “motherhood andapple pie” statements) that may enable agenciesto gain widespread agreement, but do not pro-vide concrete guidance for planning, program-ming, or budgeting. These statements need tobe translated into policy objectives, togetherwith definition of a consistent set of perform-ance measures.

� They enable agencies to deal with policy guid-ance that does not reflect performance out-comes: e.g.,

- Legislative or executive funding decisionsthat are not performance-driven;

- Funding splits based purely on geography orhistory; or

- Formula-based apportionments of funds thatdo not account for performance outcomes.

Performance-based methods can be combinedwith the other criteria above to the degree thatthese other criteria cannot be changed directly.

� They provide a concrete basis to deal with inter-nal guidelines or objectives that may not alignwith external policies. Again, policy objectivesand target performance measures provide spe-cific technical guidance that should be used toalign internal guidelines in each affected depart-ment unit.

5.5 PLAYING A PROACTIVE ROLEIN POLICY FORMULATION

Several situations described in previous sections call foractive engagement by a transportation agency withpolicy-makers and other stakeholders. This sectionadds other examples to build a model of a proactiveDOT role in policy formulation. The discussion is intwo parts: one dealing with external policy-makers, thesecond with internal agency managers and staff.



5.5.1 EXTERNAL POLICY-MAKERS

Policy guidance can be issued in several ways. Previ-ous sections discussed statutory and non-statutorypolicy statements at the state level provided by legis-latures, the governor’s office, and the transportationcommission or board. Influences on policy also canoriginate with designated task forces, local andregional planning agencies, other transportation pro-viders, and other bodies having political,administrative, fiscal, or regulatory oversight of astate DOT. A transportation agency needs to commu-nicate with these groups to promote a policy frame-work that guides performance-based management, asdescribed in earlier sections.

Legislative and executive priorities also can beexpressed through funding decisions affecting specificasset classes or modes, program goals, or types ofinvestments (e.g., preservation, system expansion orimprovement, and operations). These decisions maynot always follow the recommended program sub-mitted by the DOT. For example:

� The legislature’s decisions on funding trans-portation modes (e.g., highway, transit, bicycleand pedestrian ways) or assets (e.g., bridgeseismic retrofit and pavement resurfacing) mayresult in amounts or schedules different fromDOT recommendations.

� The governor’s office or transportation commis-sion may advocate funding for particular facili-ties (e.g., to support regional economicdevelopment); the legislature may include dem-onstration projects in the agency’s budget like-wise to achieve particular program goals.

� The legislature may fund particular highwayprograms in amounts or at a pace different fromDOT recommendations, for experimental ordemonstration purposes (e.g., to appropriatecongestion relief funds among system expan-sion, system improvement, and system opera-tions programs in specific ratios).

Texas DOT Briefing to Senate Interim Committee onTransportationA Senate Interim Committee on Transportation was recentlycreated in Texas and charged with, among other matters,reviewing the adequacy of the state’s highway program andthe financial resources supporting that program. The TexasTransportation Commission’s testimony to the committee in1998 is an example of proactively working with external pol-icy-makers. The testimony emphasized long-term trends offactors such as traffic growth and safety, congestion levelsand deteriorating road and bridge conditions. This informa-tion was presented as time-series data in concise graphicswith clear messages. During presentation, this quantitativeapproach was complemented with anecdotes of specificinstances designed to make the abstract data real.

The full testimony can be viewed in its entirety at:www.dot.state.tx.us/tdotnews/testimony/aug0498.htm

While funding decisions of this type are essentiallyexpressions of policy, they also are decisions onresource allocation that are made outside aperformance-based context. While legislative andexecutive authorities have this prerogative, DOTs needto deal with incorporating these decisions within anasset management framework that relies upon per-formance-based decisions. To the degree thatdesignated programs, modes, asset classes, or invest-ment categories are given statutory or funding priority,these areas of policy emphasis become a fixed part of anagency’s asset management approach, and further deci-sions by the DOT must accommodate these policies.

The following sections outline strategies for an agencyto focus policy-makers on policy guidance, and toreserve latitude for resource allocation decisions asmuch as possible to the DOT for deliberation duringplanning and priority programming.

ENGAGE EXTERNAL STAKEHOLDERS

Agencies ideally should engage their governing bod-ies whenever possible in discussions to frame andinform policy options. DOTs should communicate theimplications of current asset conditions and currentpolicies, and the costs and consequences of policyoptions. Regular briefings with policy-makers and dis-semination of information to stakeholders and thepublic reinforce agency accountability for its decisions.



This engagement need not be limited to oral or writ-ten presentations. Agencies also can provide access tomanagement systems for legislative, executive, andcommission use. Executive Information Systems (EIS)that are based on the department’s program man-agement, financial, and technical data are excellenttools that can inform legislative, executive, and com-mission staffs regarding the department’s programsand their status. (EIS are discussed further inChapter 8.) Applications in maintenance qualityassurance, based upon explicit levels of service andperformance-based budgets, also have proven to beexcellent tools for demonstrating the consequences ofdifferent levels of investment.

FOCUS ON KEY POLICY CHOICES

One potential benefit of asset management to DOTexecutives is to help avoid “externalmicromanagement” of programs during policy formu-lation. Asset management can be used to describewhat responsibilities should be assumed by a policy-making body and by the transportation agency to havea policy-driven, performance-based approach work. Itcan be emphasized that policy-makers need to influ-ence resource allocation at a strategic level. Tacticaldecisions on specific allocations will respond to thesestrategic directions (by meeting policy objectives), andthe transportation agency is willing to be held account-able for these decisions (through performance meas-ures). However, the specific decisions need to beexamined in a number of dimensions (the asset man-agement framework can be used to illustrate these),and the transportation agency needs to be staffed andequipped to carry out these analyses.

MAINTAIN A POLICY-BASED CONTEXT

An agency’s engagement in policy development and itslong-term perspective of asset management as a policy-driven process will help to maintain a policy-basedcontext for resource allocation decisions. This continu-ity is needed through changes in political or agencyexecutive leadership and during those periods when, in“the heat of the moment” as critical decisions are beingdeliberated, it is easy to lose sight of long-term objec-tives. An agency should continually reinforce andcommunicate the connection between long-termdesired outcomes (as expressed in policy) and moreimmediate funding decisions (resource allocation) thatis inherent in transportation asset management.

Policy direction may reflect other financial, institu-tional, and political considerations in addition totransportation system performance. This situationwas discussed in Section 5.4.3, with practical sugges-tions on how to maintain a performance-basedapproach as much as possible.

5.5.2 INTERNAL STAKEHOLDERS

Internal stakeholders should be actively involved inthe policy development process. Through their par-ticipation in this process, the units responsible formeeting policy objectives are more likely to under-stand DOT policies and support the subsequentobjectives and targets. The involvement of front lineworkers from the very start of the policy-making pro-cess also may encourage them to begin considering abroader range of solutions to the issues they deal withon a daily basis.



The Benefits of Proactively Working with LegislatorsFollowing is an example of one DOT’s successful efforts to proactively work with policy-makers in two areas – system preservationand winter maintenance.

Preservation First

The DOT’s key interaction with its legislature is through the legislative budget subcommittees that review and recommend approval ofthe agency’s annual budget. Throughout the 1980s, the DOT worked with the subcommittees to establish the principle of “preserva-tion first” – that preserving the existing system should have priority over creating new capacity.

The DOT’s efforts were aided by the legislators’ memories of the previous decade when the state had drifted away from this princi-ple, with serious consequences for the condition of the highway network. However, it also was crucial to apply the principles of assetmanagement (although it wasn’t called that at the time) to present accurate life-cycle cost analysis that clearly demonstrated the eco-nomic benefits of the preservation priority. It also was important to consistently build this case year after year in a strategic context,rather than a one-time tactical approach to a particular budget.

The acid test for the preservation policy occurred in 1991, when a downturn in the economy and resulting curtailment of state reve-nues required the administration to stop advertising new projects at the peak of a major capital program. Many of these projects hadbeen promised to the legislature and the general public as part of a transportation revenue program; deferral of these projects wasthus a particularly sensitive issue. However, the general assembly had become advocates of the preservation-first philosophy, and theFY 1992/1993 budget reflected a 33 percent cut in capital programs and only a five percent reduction in maintenance.

Winter MaintenanceIn the 1990s, the budget subcommittees questioned the DOT on whether contracting out additional winter maintenance serviceswould result in cost savings. In responding to this inquiry, the DOT broadened the question into the larger issue of what was theappropriate level of the maintenance workforce, on the theory that winter maintenance requirements should be the primary basis fordetermining workforce size.

The DOT concluded that at least 50 percent of winter maintenance activity should be conducted by the maintenance workforce indealing with an average peak storm (a snowfall of 6” – 8”), which suggested that a 10 percent cut in the size of the workforce couldbe accommodated. This analysis was based upon a combination of a quantitative review of snow clearance routes, a judgment as towhat degree of presence was necessary to maintain operational control, and anecdotal evidence of the consequences of fallingbehind the curve in snow clearance in a major storm.

The budget subcommittees accepted this determination, and the workforce and winter maintenance policies were adjusted accordingly..

6. PLANNING AND PROGRAMMING


6.1 INTRODUCTION

Long-range transportation planning and priority pro-gramming are central to an agency’s resource alloca-tion decisions. This chapter discusses Planning andProgramming as the second broadly defined stage inthe asset management framework (Figure 6.1). Itfocuses on functions that lead up to programapproval. Subsequent functions involved withprogram delivery are addressed in Chapter 7.

� Section 6.2 discusses long-range planning in thecontext of asset management.

� Section 6.3 is the first of three sections dealingwith program development. It focuses on capitalprogramming processes and tradeoff analyses.

� Section 6.4 looks at the role of program struc-ture and its effect on capital program develop-ment in an asset management framework.

� Section 6.5 considers program development formaintenance and operations.

Figure 6.1 Planning and Programming withinResource Allocation and Utilization


Program Delivery



ation and Analysis

State DOTs perform long-range planning and priorityprogramming in accordance with ISTEA and TEA-211

requirements for the production of Long-RangeTransportation Plans (LRTP) and StatewideTransportation Improvement Programs (STIP). Theintent of this chapter is to illustrate how your agency’sLRTP and STIP procedures can be strengthened from anasset-management perspective. It provides suggestions 1 Intermodal Surface Transportation Efficiency Act,and Transportation Equity Act for the 21st Century.

and examples of how planning and programming relateto the policy guidance described in Chapter 5, and howbusiness processes and the program structure used inplanning and programming are best organized for goodasset management.

Your agency’s existing procedures for developing theLRTP and the STIP are not “replaced by asset man-agement”; the steps recommended in this chapter donot constitute another new or alternate process. Thematerial in this chapter does not attempt to serve as aprimer on planning and programming. The focus ofthis chapter is on how asset management ideas, prin-ciples, and techniques can shape your existing LRTPand STIP procedures, emphasizing capabilities suchas the following:

� Applying procedures and decision criteria thatare consistent with policy objectives and per-formance measures;

� Identifying alternative solutions at the planningand programming stages; and

� Having the information and analytic capabilitiesneeded to evaluate alternatives and makeresource allocation decisions that conform togood asset management practice.

6.2 LONG-RANGE PLANNING

A number of asset-management best practices applyto your long-range-planning process, regardless ofwhether your agency produces a “policy-based plan”or a “project-based plan.” These benchmarks can beorganized in three broad topic areas that are dis-cussed in the sections below:

� Providing long-range guidance to agencyresource allocation that is consistent with policyobjectives;

� Identifying and evaluating strategic investmentchoices and analyzing tradeoffs between them;and

� Having the information and analytic tools avail-able to conduct the analyses implied by a per-formance-based process.

6.2.1 CONSISTENCY WITH POLICY OBJECTIVES

The methods and criteria that are used in long-rangeplanning need to reflect stated policy objectives and

6. Planning and Programming


performance measures. Inability to translate policiesinto performance targets can hinder an agency’s abil-ity to bring planning procedures into line with strate-gic priorities. A failure to achieve consistency withpolicy direction at the planning stage will likely havea ripple effect in subsequent stages of resource alloca-tion. There are both strategic and tactical aspects toproviding a coherent and systematic approach toresource allocation.

STRATEGIC CONSIDERATIONS

Strategic considerations deal with a meaningfultranslation of policy into action. They enable you todefine investment options for consideration at thelong-range planning stage that reflect and respond tostrategic policy guidance.2 In practical terms:

� Policy statements and other broad forms of policyguidance need to be translated into specific policyobjectives, quantitatively to the extent possible. Ifthis step has not been accomplished as part ofyour agency’s review of transportation policy orin its strategic business planning, it needs to becompleted at the start of long-range planning.

� Definitions of performance measures shouldaccompany policy objectives that will guidetransportation investments in each mode, pro-gram, major asset class, or other significantaspect of your transportation program. Theselected measures should be able to reflect cus-tomer perceptions of system performance andquality of service where appropriate. Multiplemeasures may be needed to reflect differentpolicies or to help understand what factors aredriving changes in transportation trends. Forexample, measures reflecting both traveldelay/congestion effects and impacts on eco-nomic development may be needed to assessinvestment options in mobility and accessibility.Performance measures should gauge outcomesin the transportation system rather than types of

investments.3 If performance measures have notalready been defined in your agency’s review ofpolicy guidance or in its strategic business plan-

2 Please review Section 5.3.2 on translating policy intoprocess, and Section 5.4 on relating policy toperformance, if you have not already done so.

3 Refer to discussion of this point in Section 5.3.1.

ning, they should be established at the start oflong-range planning.

� Target values of performance measures shouldbe established to guide the options to be consid-ered in long-range planning. Performance tar-gets should be realistic to avoid falseexpectations among external stakeholders andlack of sound direction to internal stakeholders.Targets should reflect realistic projections ofrevenues; scenario analyses of different revenueforecasts can provide useful guidance on therange of target values that can be attained withconfidence. A continuing inability to meet tar-gets and policy objectives can discredit yourplanning process and reduce the credibility ofthe LRTP itself if the plan cannot achieve theintended goals.

� Policy objectives and performance targets needto be tempered by other guidance that is notderived from performance-based considerations.This additional guidance, which was discussedin Sections 5.4.3 and 5.5.1, needs to be carriedthrough the long-range-planning function aswell (and into capital programming, as dis-cussed in Section 6.3). The effect of this guid-ance can be accounted for in an adjustment inpolicy objectives and targets among programs ordistricts, or it may influence the type andexpense of investments considered in differentparts of a program.

TACTICAL CONSIDERATIONS

Tactical considerations deal with more specific issuesin translating policy into action:

� In setting performance targets for particularassets, modes, corridors, programs, etc., youragency also should account for sources that pro-vide specific guidance (e.g., in the form of rec-ommended standards or levels of development)or explore different strategies for investment.Level-of-development plans, corridor plans, cor-ridor preservation plans, access plans, specialstudies (e.g., of future transportation strategiesor of long-term needs) and similar documentsare examples of sources of guidance that may befocused on particular subsets of the transporta-tion network. It also is important that all levelsof your agency – field planning offices as well ascentral office staff – be aware of these studies



and understand how they are to be used in theplanning process.

Program Investment CategoriesColorado DOT has defined Program Investment Categoriesto facilitate a performance-based environment for its planningand programming activities. Its Program Investment Catego-ries include:

� Strategic Projects;

� Mobility;

� System Quality;

� Safety; and

� Program Delivery.

Important characteristics of these Investment Categories arethe following:

� The Investment Categories overlay the conventional pro-gram structure; they do not replace the programs used forfunding and tracking accomplishment by different organ-izational units.

� The Investment Categories map directly to transportationpolicy goals and performance measures.

� Investment Categories include projected funding fromboth capital construction programs and maintenance andoperations programs.

� Conventional program funds are applied in the InvestmentCategory structure according to primary policy objectiveserved. For example, preservation activities inMaintenance and Operations map to System Quality; signand striping activities in Maintenance and Operations mapto Safety; and snow removal performed by Maintenanceand Operations maps to Mobility.

� Investment Categories help CDOT to see what funding isavailable to meet strategic policy goals and to relateinvestment levels to performance measures, regardless ofprogram funding source. The Investment Category struc-ture also is suitable to be applied in the future to tradeoffanalyses.

� Existing policies may call for environmentalreviews or other long-lead-time assessments ofproject characteristics. Criteria and proceduresshould be established to determine when thesereviews or assessments need to begin in the plan-ning stage.

� The results of the planning stage should informproject identification during priority program-ming. The nature of this guidance should be

agreed to by the planning and the capital pro-gramming units within your agency, so that aconsistent thread is maintained throughout thesestages of resource allocation.

6.2.2 ALTERNATIVES AND TRADEOFFS

Investment alternatives are appropriately defined inlong-range planning as well as in priority program-ming. Options at the planning stage may involve anumber of different choices as illustrated below. Thespecific options that you may need to consider willdepend upon the structure of your agency’s programsand its responsibilities for different modes and infra-structure assets, the characteristics of your transpor-tation system, and the areas of emphasis in currentpolicy objectives. Potential options in planninginclude the following:

� Modal Options. Choices between modes maybe direct and obvious when both modes fallunder the responsibility of your DOT. Definingalternatives becomes more complicated whenthe solution is an indirect one (e.g., highwaycongestion will be relieved by an improvementto a parallel rail line or transit line), where serv-ice providers other than the DOT are involved,and where funding eligibility guidelines maypreclude consideration of this option. Engagingpolicy-makers, service providers, and otherstakeholders can identify options that might beavailable.

� Program Investment Options. With increasingdemands on transportation programs andfunding, alternatives in the types of investmentsmay offer an option to meet transportation needsmore quickly and economically. In the mobilityarea, for example, investments in operationsimprovements may defer the need to undertakenew construction for capacity expansion. In thepreservation area, preventive maintenancestrategies can reduce the long-term cost ofkeeping facilities in good condition as comparedto capital-intensive, worst-first approaches.

� Other Options. Other ways of visualizingoptions include corridor alternatives (alreadyfamiliar to transportation planners), stagedimplementation strategies, technological options(e.g., use of innovative materials and proceduresfor preservation, or ITS technologies for traffic



management), and combinations of all of theabove.

Multimodal Trust FundsThe use of multimodal trust funds can provide agencies theflexibility to meet varying transportation service and infra-structure needs. For example, in the early 1970s one DOTestablished an integrated trust fund to support all of its activi-ties, which include modal agency operations, capital con-struction projects, and debt service expenses for highways,transit, ports, airports, railroads, and motor vehicles.

This fund consists of motor fuel taxes, motor vehicle excise(titling) taxes, motor vehicle fees (registrations, licenses, andother fees), corporate income taxes, operating revenues(e.g., airport fees, transit fares, port fees), federal aid, andbond proceeds. Bonds are issued to support the cash flowrequirements of the planned capital program whilemaintaining coverage requirements.

These revenues are not earmarked for specific programs.The disbursement of funds to projects and programs is madein conjunction with state- and local-elected officials and is notconstrained by the source of revenues. Unexpended funds atthe close of the fiscal year do not revert to the state’sGeneral Fund, but remain in the Trust Fund.

This financing structure encourages optimization of thetransportation system without regard to modal bias. As aresult, the agency has been in a position to analyze and pur-sue modal tradeoffs and intermodal opportunities. Oneillustration is an aggressive program to provide direct-accessconnections from the freeway network to suburban rail sta-tions with large parking lots. A common funding source and astrategic, customer-focused approach to asset managementhas enabled these projects to avoid the institutional rivalriesthat often handicap such intermodal proposals.

Options should be given due consideration appropri-ate to their importance and cost, avoiding too early afocus on a single solution. Failing to consider feasibleoptions across programs, modes, or other dimensionsmay lead to missed opportunities and less than“optimal” LRTPs. Support information that may beneeded to evaluate options effectively (e.g., early“scoping” studies to evaluate technical, economic, andfinancial feasibility, or environmental reviews ofpotentially complex projects) may need to be devel-oped at an early planning stage.

Options can address needs at a project, corridor, or“major project” level (e.g., a project of statewide inter-est that may comprise multiple network segmentsfrom different but related corridors). Evaluations of

these options should be “apples to apples” – that is,project alternatives compared to each other, corridoralternatives compared to each other, and so forth.

Options need to be evaluated against one another in aplanning-level tradeoff analysis. One of the mainconsiderations in planning-level tradeoffs is the avail-ability of analytic tools; this issue will be discussed inthe next section. In the context of this discussion,tradeoffs should identify the comparative costs, bene-fits, and performance impacts of different options in alife-cycle context. The tradeoff results should indicatethe relative strengths and weaknesses of each option,and which option overall presents the best balance ofcharacteristics for your agency. A tradeoff analysisalso may suggest other options for investigation.

6.2.3 INFORMATION AND ANALYTICMETHODS

Good information in long-range planning can assist ina number of ways to support good asset managementpractice:

� Performance targets need to be realistic bothtechnically and financially, based upon realisticforecasts of revenue. Unrealistic performancetargets can call into question the long-range-planning process and its products.

� Estimates of costs, benefits, and performanceused in the analyses of options and tradeoffsshould reflect realistic technical, economic,financial, and environmental characteristics.Lack of good information in these estimates canlimit the effectiveness of planning in evaluatingthe relative merits of different options and in theguidance given to priority programming.Existing applications such as management sys-tems (e.g., PMS, BMS) and other analyticprocedures (e.g., network models, economicimpact models) can assist in these estimates.

� Criteria for early scoping, environmentalreviews, and other pre-engineering studies thatmay need to begin during planning (e.g., formajor, complex, long-lead-time projects) canclarify information needs at various timeframesin the 20-year planning horizon and focus theapplication of different analytic tools properly.

Analytic tools and well-organized data collection andprocessing techniques could assist in providing the



information needed to evaluate performance targets aswell as planning options. While DOT planning organi-zations already apply IT applications to evaluate traveldemand and the network impacts of different proposedinvestments, tools to consider a broader set of options,performance impacts, and tradeoffs – for example, in amultimodal context – are still in a state of development,and data quality remains an issue as well. A number ofcurrent efforts promise improvement in the state-of-practice in the future:

� Development of sketch planning tools thatenable an analysis of options that is relativelyquick, inexpensive, and not too data-intensive.

� Application of FHWA’s HERS/ST system to lookat preservation versus improvement tradeoffs.

� Work in NCHRP Project 8-32A to develop amethodology for structuring and evaluatingmultimodal tradeoffs at the planning stage.

� New analytic procedures and recommendedapproaches may emerge from the ongoingNCHRP Project 20-57 that is looking at analytictools that support asset management.

Figure 6.2 Example of Information for Use in a Planning Tradeoff Analysis

Infrastructure Condition

Annual Preservation Budget0 1 2 3 4 5 6 7 8 9 10

Annual Mobility Budget

Mobility Improvement

0 1 2 3 4 5 6 7 8 9 10

Tradeoff Analysis

Figure 6.2 illustrates information that can be used for a tradeoff analysis in long-range planning. The analysis considers the impactof varying the funding levels in two programs: Preservation and Improvement. The upper graph shows the impact of differentPreservation budget levels on forecast infrastructure condition; the lower graph shows the impact of different Improvement budgetlevels on forecast mobility improvements. These graphs can help an agency understand the implications of different investmentoptions, frame planning-level tradeoffs, and illustrate the consequences of planning-level decisions. While the example isdeveloped for two programs, other programs, as well as more detailed breakdowns of the programs shown, can be considered inthe tradeoff process. Management systems, other analytic tools, and analyses of performance impacts of similar investments canassist in obtaining these estimates.



At a minimum, there is benefit to be gained fromstructuring existing information in a way that informstradeoffs: i.e., by organizing information based upona baseline analysis and scenarios representing differ-ent performance targets or investment options. Sce-nario-testing capabilities, if available in existingsystems, should be used to populate this matrix. Ifsuch capabilities are not available as a feature, it maybe possible to use existing applications to test scenariosindirectly – for example, by exercising these systemsrepetitively while varying boundary conditions (suchas engineering threshold values or financial budgetconstraints) in each run to assess system behavior andperformance impacts under different conditions.


The recommendations in the preceding sections areintended to help your agency instill in its long-rangeplanning a number of asset-management best practices:

� Planning efforts reflect stated policy objectivesand performance expectations.

� A range of investment options (e.g., capital,maintenance, and operations) and modal alter-natives are considered during the planningprocess, with an analysis of tradeoffs amongthese choices.

� The LRTP is based on realistic revenue forecastsand evaluation of new funding options or levelsof funding where appropriate.

� The planning process provides clear guidancefor subsequent program development (e.g.,project identification, ranking, and selection).

� The planning process is supported by manage-ment systems, “sketch planning” tools, and otheranalytic procedures that help analyze optionsand scenarios in terms of cost and performance.

6.3 CAPITAL PROGRAMMINGPROCESS

6.3.1 OVERALL CONTEXT OF PROGRAMDEVELOPMENT

Program development is the stage of resource alloca-tion that recommends specific investment actions,

whether for capital construction projects, preventiveor corrective maintenance activities, or maintenanceand operations services. Asset management speaks toseveral aspects of program development. This is par-ticularly true for capital construction programming4,which typically accounts for a major portion of a stateDOT’s annual budget, and corresponds to the pro-duction of its STIP.

The discussion of this critical function and otheraspects of program development is therefore organ-ized in the Guide as follows:

� Section 6.3 focuses on the capital programmingprocess, and how asset management conceptsand principles apply to identification and selec-tion of projects for infrastructure preservation,expansion, operations, and safety.

� Section 6.4 also focuses on capital programming,but from the perspective of the program struc-ture and how different organizations of pro-grams and categories of work can influence theease and effectiveness with which you can applyasset management techniques.

� Section 6.5 discusses program development formaintenance and operations work, dealing withdelivery of services as opposed to constructionprojects. Current concepts of maintenancequality assurance and performance-based budg-eting are highly relevant to asset management,and are covered in this section.

6.3.2 CAPITAL PROGRAMMING BESTPRACTICES

Best practices in capital programming follow many ofthe themes outlined in policy formulation and long-range planning:

� Policy objectives are explicitly represented inmethods and criteria applied in capitalprogramming:

- Project identification, scoping, prioritization,and selection criteria;

- System performance measures, and predic-tions of the impacts of candidate projectinvestments on these performance measures;

4 Priority programming is also used synonymously inthis Guide.



- Program tradeoff criteria; and

- Periodic updates of programming process toreflect and reinforce changes in policy.

� The programming process considers alternativeproject solutions to transportation needs, prob-lems, and deficiencies, consistent with programobjectives and guidance from the LRTP. Exam-ples include the following:

- Solutions representing different types ofinvestments: e.g., operations versus capacityimprovements to congested segments; repairversus rehabilitation or reconstruction;

- Different project concepts, designs; or tech-nologies; and

- Different strategies for staging work over time.

� Economic principles are applied to the analysisof project worth. At the heart of each analysis isa comparison of benefits and costs on a life-cyclebasis and, where applicable, minimization oflong-term costs. Cost/benefit calculationsincorporate performance measures within a per-formance-based budgeting framework.

� While the economic criterion is important, it is notthe sole basis for selecting projects. Other factorsalso may be considered: e.g., environmental pro-tection, intermodal service, network connectivity,neighborhood cohesion, preservation of corridorstandards, and economic necessity.

� Project selection is based on realistic projectscopes, costs, and schedules. Accurate estimatesensure that project prioritization is based on reli-able gauges of project merit, and reduce the like-lihood of subsequent project changes that mayresult in “non-optimal” adjustments to programs.

� The programming process considers alternativesolutions also at the program level in terms oftradeoffs analyzing potential shifts in fundingamong programs and their implications foroverall transportation system performance.

� Quality information and analytical tools areapplied throughout the programming process.An agency has the capability to project realisticestimates of costs, benefits, and impacts on sys-tem performance using management systems,other analytic tools, activity-based approaches tocost recording, and performance budgeting tools.

Washington State Life-Cycle TechniquesIn 1993, state legislation RCW 47.05 mandated revisions tothe Washington State DOT’s programming process. Thislegislation required the agency to prioritize projects basedupon rational methods, considering factual needs and anevaluation of life-cycle benefits and costs. In response,WSDOT developed a programming process based on projectprioritization using benefit/cost criteria. WSDOT applied itsexisting pavement management system to analyze least-life-cycle-cost strategies for pavement preservation. In other pro-gram areas it formed task forces to develop evaluationprocedures based upon engineering and economic criteriaappropriate to each type of project work considered. Theseanalytic procedures are now used to develop benefit-costestimates for project prioritization.

For further information, RCW 47.05 is available on the fol-lowing web site:

search.leg.wa.gov/pub/textsearch/ViewRoot.asp?Action=Html&Item=7&X=726112422&p=1

The “Washington State DOT Programming and OperationsManual” is available at:

www.wsdot.wa.gov/FASC/EngineeringPublications/Manuals/P_OManual.pdf

6.3.3 EXAMPLE PROCESS INCORPORATINGBEST PRACTICES

The best practices described in the preceding sectioncan be incorporated within your existing capital pro-gramming and STIP development framework. Thefollowing example process comprises a cycle of pro-gram development steps that reflects the best prac-tices above. This process is not meant to beprescriptive or exhaustive, and your existing processmay have a different sequence of steps or reflect a dif-ferent approach.5 This example is included only toshow how program development can be organized inan asset management framework, illustrating bothproject-level and program-level decisions. The stepsare presented in sequential fashion for simplicity;however, iterations of individual steps may occur in 5 For example, certain DOTs allocate funding todistricts for programs based on policy and systemperformance rather than projects, as illustrated in theexample given. Thus, a range of programmingapproaches are possible. The principles of assetmanagement should nevertheless apply across thisrange.



practice. Your agency can adapt this example to yourown capital programming and STIP developmentprocess in considering asset management bestpractices.

1. Issue program guidance and instructions. Pro-gram guidance contains a summary of policy goalsand objectives and their implications for financial andperformance targets. Program instructions containfinancial, accounting, and administrative details thatneed to be adhered to in the current programmingcycle.

2. Nominate and submit candidate projects. Nomi-nations are typically submitted by program managers,district engineers, and other designated managers onbehalf of stakeholders.

� Project submittals are guided by the LRTP andby other relevant studies (e.g., analyses of pres-ervation strategies in pavement or bridge man-agement; corridor studies or special planningstudies).

� Nominations are conducted in a formal processusing forms that provide, at a minimum, thedescription of proposed work and its justifica-tion, proposed funding source, estimated cost,calculated impact on performance, local sup-port, and special considerations.

� The preferred measures of performance impactsare 1) technical performance measure(s) that areassociated with the respective program and areresponsive to policy objectives, and2) translation of technical impacts into an eco-nomic benefit if possible. Advantages of amonetary measure of benefits are that:

- They can be used in benefit/cost calculationsas part of project prioritization;

- Dollar benefits are additive (meaning thatthey can be summed for all projects to obtaina program-level indicator useful in tradeoffanalyses); and

- They are commensurate with dollar benefitscalculated for other programs (even if thetechnical performance measures are differ-ent), facilitating tradeoff analyses further.

3. Candidate projects are reviewed with districtengineers and program managers. These reviews areconducted in meetings held by the management team

responsible for building the capital program. Items tobe reviewed include:

� Realism of estimates of costs, benefits, and otherimpacts;

� Appropriateness of the project for the route’sLevel of Development Plan and consistencywith relevant preservation, corridor, or otherspecial studies;

� Eligibility for indicated program funding;

� Conformity with guidelines and instructions;

� Degree of local support; and

� Suggested revisions.

As part of these discussions, district and programmanagers can be asked what their responses would beto shifts in funding for the program being reviewed:i.e., if some percentage change in funding occurred atthe margin, either positive or negative, what addi-tional work would they recommend, or what pro-posed projects would need to be cut or reduced inscope? These discussions provide background infor-mation for the tradeoff analyses later.

4. Projects are scoped and prioritized. Prioritizationmethods and criteria should reflect a performancebasis, consistent with policy objectives and perform-ance measures as updated in the current LRTP.Prioritization will result in a list of ranked projectsthat are reviewed and may be adjusted as follows:

� A preliminary “cutoff” is set on the ranked list ofprojects based upon preliminary funding targetsfor each program. This constrained list defines apreliminary, baseline, or candidate program.

� Managers may adjust the prioritized list wherejustified to reflect considerations such as net-work continuity, local commitments, or factorsthat are not accounted for in the prioritizationcriteria. Such adjustments and their justificationshould be documented.

� The ranked project list may need to conform togeographic equity criteria, which may requirefurther adjustments in the prioritized list andshould be documented as such. (See Section 6.3.5for a discussion of geographic equity.)

Project priorities should not be taken as literalnumerical values (i.e., in the sense that “project num-ber 17 is better than project number 21”), but rather as



a way of grouping projects into sets: e.g., highlyranked projects that will be performed in any foresee-able scenario, mid-range projects that are worthwhileand have a good chance of funding, and lower-rankedprojects that have merit but for which approval willbe sensitive to the results of a tradeoff analysis.

If, subsequently, there are major changes in projectscope, cost, or schedule, the project should be repri-oritized (discussed below).

5. Conduct tradeoff analyses between programs.The purpose of a tradeoff analysis is to assess whetherpreliminary program funding targets should beadjusted based upon the cost and performanceimpacts indicated in the tradeoff. It is a way toconsider options (in terms of financial targets) at aprogram, rather than a project, level. An example ofthe mechanism of tradeoff analyses will be given inSection 6.3.4. Tradeoffs do not have to be conductedamong all possible combinations of programs, butrather only where it makes sense to consider potentialshifts in funding from one program to another.Tradeoff analyses between programs should be con-ducted only after the projects within those programshave been prioritized and a preliminary financial tar-get (or cutoff) has been established.

While management systems and other analytic toolscan be used to estimate the performance impacts ofdifferent alternatives, ultimately the judgmentregarding program tradeoffs is a managerial one inwhich policy objectives must be weighed as a guide tothe final decision. Where program tradeoffs are indi-cated and a shift in program funding is likely, thequestion of geographic equity may need to be revis-ited, and adjustments in the proposed funding shiftmade accordingly.

6. Finalize program funding targets based upon thetradeoff analyses. The cumulative set of analyses andadjustments in the preceding step result in a revisedfunding distribution that can now be finalized.Results of the tradeoff analyses and judgments basedon these results should be documented for possiblelater use in discussions with the Transportation Boardand Legislature to justify the recommended program.

Unless there are any further adjustments, this finalfunding distribution can be submitted, with theadjusted list of prioritized projects in each subpro-gram, as the recommended capital constructionprogram. If last-minute adjustments do occur:

� Tradeoff analyses would need to be repeatedonly if there are major changes in specific projectsthat are included in the recommended program,or in the information regarding particular proj-ects (e.g., costs, benefits, performance impacts).

� If the situation above occurs, the tradeoff analy-sis should be preceded by a re-estimate of costs,benefits, and performance impacts of affectedprojects and a re-prioritization of projects in theaffected program.

7. Conclude this programming cycle and prepare forthe next cycle. Concluding activities entail submittalof the recommended program, distribution of theprogram to stakeholders as appropriate, and anyassociated updates to program tracking databases.Preparations for the next cycle include updates to theprogram guidance and instructions, based upon expe-rience of the just-completed exercise.

6.3.4 TRADEOFF ANALYSES

Tradeoff analyses are ways to consider alternativeresource allocations at a program level, as comparedto the project-to-project evaluations that result fromproject prioritization. Table 6.1 illustrates the types oftradeoffs that can be considered between differentcombinations of program investments. Results of anexample tradeoff analysis are illustrated in Table 6.2for Preservation and Improvement. The analysisinvolves testing what are the consequences of shiftingfunding from one program to another, and making ajudgment as to which resource allocation option is themost favorable. Consequences are gauged byresulting changes in performance measures. The per-formance measures in Table 6.2 are generalized forpurposes of the example; in an actual analysis, it maybe helpful to compute one or more performancemeasures for each subprogram considered (e.g., inPreservation, to consider separate performance meas-ures for pavement, structures, and other features; andfor Improvement, to consider measures related tomobility, accessibility, safety, and so forth). For theanalysis to work, performance measures must be ableto be expressed at a program as well as a project level:i.e., they must be additive (e.g., measures of user costsor benefits that result from economic analyses of proj-ects) or be able to be rolled up as an average or othercomposite measure (e.g., percentage of facilities thatmeet a threshold value). An agency’s managementsystems (such as PMS and BMS) can contribute to



tradeoff analyses through their scenario-testing capa-bilities. Tools such as the FHWA’s HERS/ST canassist in tradeoff analyses across programs, sinceHERS/ST handles both pavement- and capacity-related investments. Analytic tools for subprogramsnot addressed by existing systems can be developedin simple formats (e.g., as spreadsheet workbooks ordatabase applications) to provide a near-term capa-bility for tradeoff analyses.

Table 6.2 shows two tradeoff cycles for illustration;any number may be conducted as determined bymanagers in light of results already obtained andwhether it is worthwhile to explore additionaloptions. The examples in Table 6.2 show shifts offunds in both directions; other options could investi-gate different magnitudes of a funding shift. Whilethe analysis shown assumes that total fundingremains fixed, this type of analysis also can be used toinvestigate the consequences of changed levels offunding, whether positive or negative.

Preservation versus Improvement TradeoffsThe FHWA’s Highway Economic Requirements System(HERS) is an example of a tool that supports tradeoffsbetween preservation and improvement projects. A state ver-sion, HERS/ST, is now being promoted. The HERSapplication is based on the Highway Performance MonitoringSystem (HPMS) database, and is intended to replace HPMSas the source of biennial federal needs studies submitted toCongress. The HERS algorithms address both highwaycapacity and pavement preservation needs. Thus, HERS/STis uniquely suited to asset management studies that aremore comprehensive than those addressed by individualmanagement systems (e.g., pavement management andcongestion management). For example, HERS/ST could beapplied to explore tradeoffs between system preservationand system improvement or expansion.

Table 6.1 Examples of Potential Tradeoffs between Types of Program Investments

Capital Preservationand Maintenance

System Improvement andExpansion System Operations

Capital Preservationand Maintenance

� Capital-maintenancetradeoffs

� Worst-first verses pre-ventive strategies

– –

System Improvementand Expansion

� Tradeoffs between pres-ervation and capacity

� Major versus minorcapacity and safetyimprovements

–

System Operations � Tradeoffs among meth-ods of incident responseand motorist warnings

� Tradeoffs between road-way and technologyapproaches

� Degree of system coordi-nation in corridors andnetwork

6.3.5 GEOGRAPHIC EQUITY

Geographic-based, or “equity-based,” funding distri-butions exist in many agencies and are a political factof life. The rationale for such distributions may comefrom several sources:

� Agreements on funding splits with regional andlocal agencies;

� “Hold harmless” arrangements with regions ordistricts of a DOT;

� Responses to environmental justice issuesregarding the equitable distribution of trans-portation services to different segments of thepopulation;

� Legislative or transportation board/commissiondesires for equity statewide; and

� Historical, formula-based arrangements.



Capital-Maintenance Tradeoffs for PavementsSpecialized pavement analysis tools can analyze capital-maintenance tradeoffs and preventive, corrective, anddeferred maintenance and rehabilitation strategies as theyapply to pavements. The FHWA’s EAROMAR system is onesuch tool. The system is used by the FHWA to conductpavement life-cycle cost analyses on high-standard roads.EAROMAR has engineering and economic relationships toanalyze different types of pavement maintenance, rehabilita-tion, and reconstruction options and their impacts on bothagency costs and user costs. Because it employs a detailedanalysis of work zones and their effects on traffic flow andcongestion, it also can be used to investigate the staging ofprojects and the effects of construction or maintenance workpackaging, as well as options to limit road occupancy to par-ticular hours of the day or to particular months or seasons ofthe year.

Reference for additional information: Markow, M.J., and B.D.Brademeyer, EAROMAR Version 2, Final TechnicalReport, FHWA/RD-82/086, April 1984.

While geographic distributions and performance-based concepts are different ways of looking atresource allocation, they can be made to worktogether in a manner that is still consistent with a per-formance-based approach in asset management. Therecommended approach is to maintain a performance-based context for resource allocation and utilization asmuch as possible, but to acknowledge and articulate

the geographic distributions explicitly rather than to“bury” or rationalize them.

Examples of ways to accommodate geographic equitywithin a performance-based context are as follows:

� Apply a “dual” or “hybrid” method of resourceallocation by program. For example, a percent-age of funds may be allocated to districts on ageographic basis for district-level prioritization;the remaining program funds may be allocatedbased upon statewide competition among proj-ects. The district percentages may vary byprogram.

� Apply performance-based evaluation methodswithin geographic allocations. While the overallfunding split may be geographically based, theevaluation of projects within programs will beaccording to policy objectives, performancemeasures, and associated criteria.

� Use selected performance indicators as surro-gates for geographic allocation. For example,measures of traffic volume or user benefitscould be used in lieu of geographic percentageallocations. The methodology would need to bedesigned, however, to ensure that rural projectscould compete with urban projects fairly (e.g.,by calculating an incremental benefit/costreturn rather than looking simply at total mag-nitudes of benefits).

Table 6.2 Illustration of a Tradeoff Analysis

Proposed Preservation Funding andResulting Performance

Proposed Improvement Funding andResulting Performance

Baseline $200 million80% of facilities rated Good

$500 million10% reduction in travel time costs

First Tradeoff Analysis ($200M less $15M) =$185 million

77% of facilities rated Good

($500M plus $15M) =$515 million

11% reduction in travel time costs

Second Tradeoff Analysis ($200M plus $15M) =$215 million

82% of facilities rated Good

($500M less $15M) =$485 million

8% reduction in travel time costs



6.4 PROGRAM STRUCTURE ANDDEFINITION

The effectiveness of resource allocation can be influ-enced by the structure of the capital program itself.Typical pitfalls that can arise include the following:

� Programs and subprograms may be too numer-ous and detailed to clearly see the implicationsof choices and decisions.

� Programs and subprograms that represent toofine a breakdown of work, overlapping defini-tions, or outdated transportation needs can dis-tort the resource allocation process, since zero-funding a program is rarely seen as an option,and non-optimal allocations may result.

� Inconsistent methods of defining programs canobscure the linkage between resource allocationdecisions and support of policy objectives.

The first two issues relate to program structure and itsrelative simplicity. The third issue is one of consistentdefinition.

6.4.1 STREAMLINING PROGRAM STRUCTURE

Flexibility and latitude in resource allocation areincreased when the program structure is “stream-lined” to focus on key outcomes, however defined(Section 6.4.2). A “streamlined” program structure inthis context implies a “pyramid” structure in whichhigh-level programs and subprograms are as few innumber and as broad in scope as practicable to man-age the capital program effectively. Identification ofspecific types or categories of work at the lowest levelcan be as detailed as needed for financial managementand accounting; it is the higher-level structure of pro-grams and subprograms that is critical to resourceallocation and tradeoff analyses.

Consider the examples presented in Figures 6.3 and6.4. Assume that Figure 6.3 represents a DOT’s cur-rent program structure. For clarity, a single programwithin a capital program structure is shown; in fact,multiple programs will typically exist (e.g., preserva-tion, improvement, safety). Figure 6.4 recommends anew more streamlined program structure for theDOT. Since both structures encompass the same cate-

gories of work, shown at the bottom in both figures,they are both capable of addressing the same pool ofprojects. However, the new structure in Figure 6.4 hasfewer subprograms than Figure 6.3, creating differentrelationships among programs, subprograms, andcategories of work. To generalize: Figure 6.4 repre-sents more of a pyramid structure with fewer subpro-grams but with each subprogram more broadlydefined, encompassing multiple categories of work.Figure 6.3 shows a flatter structure in which there area greater number of subprograms, each more special-ized in a narrower category of work.

Figure 6.4 represents a more streamlined programstructure that can help in resource allocation. Sincethis structure does not restrict managers to a narrowcategory of work within a subprogram, it facilitatestheir consideration of alternative solutions in eachcase. It also affords managers greater opportunity toconsider resource allocations between multiple cate-gories of work within each subprogram. It enablesmanagers to consider tradeoffs between broadlydefined subprograms, clarifying decisions amongcritical policy choices. While the examples inFigures 6.3 and 6.4 center on subprograms, the sameideas hold for programs within the overall capitalprogram structure.

This comparison should not be misconstrued asarguing against needed distinctions in types of workat the subprogram (or even the program) level. All itimplies is that details regarding the many possibletypes of capital projects should not be pushed up toohigh in the program structure so as to impede defini-tion of alternatives, tradeoff analyses, and relatinginvestment decisions to broad policy objectives. Tocite a couple practical implications of this thought:

� A preservation program could include individ-ual subprograms for pavements and structures,without detracting from resource allocationdecisions and estimates of performance impacts.However, treating distinctions between, say,rigid and flexible pavement projects, orSuperpave versus conventional pavement proj-ects, at too high a level in the program structuredilutes the impact of pavement investments andcomplicates tracking of pavement performanceas a function of resource allocation decisions.



Figure 6.3 Original Program Structure

Example Program

Category of Work D

Subprogram 4Subprogram 1

Category of Work A

Subprogram 2

Category of Work B

Subprogram 3

Category of Work C

Figure 6.4 New, More Streamlined Program Structure

Category of Work A Category of Work B Category of Work C Category of Work D

Example Program

New Subprogram 1 New Subprogram 2

An improvement program could include individualsubprograms for mobility and safety, and even abroad breakdown of mobility-related work at thislevel. However, treating distinctions among varioustypes of capacity and operations improvements (e.g.,turning lanes, climbing lanes, signalization improve-ments, variable message signs, etc.) at too high a levelin the program structure has the same shortcoming asdiscussed above for preservation.

Figures 6.3 and 6.4 are schematic – they should beinterpreted in terms of the different structures theyrepresent, not in the literal number of programs, sub-programs, and categories of work shown. Also, theyneed to be understood in context. If your DOT refersto what are called “programs” in these figures as, say,“capital program categories,” and your “programs”correspond to what are labeled “subprograms” inthese figures, then the nomenclature in this discussionmust be adjusted and interpreted accordingly. While

this example is schematic, it nonetheless illustrates theadvantages of a streamlined program structure:

� Managers can be more flexible in crafting alter-native approaches for solving problems within abroad arena, rather than being unduly con-strained by a large number of narrow, pre-defined subprograms.

� There is less tendency with a streamlinedstructure to dilute available funding across alarge number of subprograms, and there is lessrisk that these many subprograms will result innon-optimal uses of scarce funds.

� A streamlined program structure facilitatescomparison and evaluation of competing solu-tions, program tradeoffs, and reporting of per-formance results, but can still accommodate avariety of types of projects.

� A streamlined program structure helps to visu-alize and communicate the composition and



rationale of the transportation program.Properly structured, it also helps to identify howthe transportation program is meeting statedpolicy objectives by focusing on the outcomes ofbroad program categories, rather than narrowlydefined differences among types of projects.

� Other considerations can be “overlaid” on theprogram structure used for resource allocation ifmore detail is needed for other reasons such asthe following:

- Financial management of different “pots” or“colors” of money and related project eligibil-ity requirements;

- Need for geographic or equity-based distri-butions; and

- Statutory or management reports that requirea different reporting structure.

6.4.2 CONSISTENCY IN PROGRAMDEFINITION

Program structure can be organized in different waysto provide these advantages, so long as the definitionis consistent throughout. Some ways in which a pro-gram can be defined include the following:

� By type of asset: e.g., highway, rail, aviation; orroadway, railway, runway, structures, etc.

� By transportation policy or system objectives:e.g., mobility, preservation, safety, etc.

� By type of improvement or solution: e.g., majorcapacity improvement, minor capacity/systemimprovement, pavement preservation, safety,operations, etc.

Difficulties can arise in a performance-based approachif the definition of the program structure is not con-sistent. Consider a program, for example, that isdefined in several ways: by policy objective (e.g.,roadway preservation, safety), by type of work (e.g.,capacity improvement and operations improvement),by asset class (e.g., bridge program), and fundingsource (e.g., federal congestion mitigation). While itmay be possible to manage a capital program that isdefined in this way, consider the difficulties ofanswering basic questions as to what is being accom-plished with program investments:

� How much is being devoted to preservation? tomobility? to safety?

� What will it take to improve preservation (ormobility or safety) performance by 10 percent?

� What are the key tradeoffs that need to beinvestigated?

� Are policy objectives in preservation, mobility,and safety being met? If not, where areincreases needed, and by how much?

Each of these questions entails looking not only atmultiple components of the program described above,but in some cases portions of programs (e.g., thebridge program includes new construction as well aspreservation). A consistent method of defining a pro-gram structure will not eliminate all the calculationsthat are needed to answer the questions above, but itwill put these calculations on a uniform basis andreduce the possibility of double-counting or inadver-tently omitting a key contribution.

While effective definition clarifies the program struc-ture, to work the definitions must be enforced. If youragency has both a preservation program and a safetyprogram, then projects that have both kinds of workshould be reflected in both programs.6


Taken together, a streamlined program structure andconsistent definition of that structure will yield a pro-gram that:

� Allows greater latitude in identifying options toaddress problems;

� Is consistent with prioritization procedures thatallow candidate projects to compete with theirpeers;

� Provides flexibility in facilitating tradeoffsamong program categories;

6 It is possible to identify incidental or minor spotsafety work that would normally be associated withpavement preservaton projects and to place a limiton the amount of this work that can be fundedthrough preservation. This will avoid unnecessaryadministrative burdens while maintaining theessential ingredients of a performance-basedapproach.



� Is clear and enforceable as to the types of proj-ects in each program and subprogram; and

� Is meaningful and easily communicated.

6.5 MAINTENANCE ANDOPERATIONS PROGRAMMING

The state-of-the-art in program development formaintenance and operations today is an approachreferred to as “maintenance quality assurance,” orMQA or simply QA. This approach is likewise per-formance-based, and is consistent with asset man-agement concepts and principles.

6.5.1 WHAT IS MAINTENANCE QUALITYASSURANCE?

NCHRP Project 14-12 has described a MaintenanceQuality Assurance program as “planned and system-atic actions needed to provide adequate confidencethat highway facilities meet specified requirements.Such requirements are usually defined by the high-way agency but are intended to reflect the needs andexpectations of the user.”7 While the NCHRP projectreport reviews a number of management practicesthat support this objective, the QA approach that ithas developed is fundamentally performance-basedand centers on the concept of maintenance “level ofservice,” or LOS. An MQA approach based on levelsof service can accomplish a number of purposes:

� To determine the LOS expectations the travelingpublic supports and is willing to pay for;

� To communicate to the public how the agency ismeeting these expectations;

� To seek levels of funding needed to achieve thedesired LOS;

� To develop a “priority strategy” to focus on keymaintenance activities when funding is less thanrequested;

� To achieve a more consistent application of LOSthroughout the agency (e.g., for highways of aparticular class and traffic usage) by identifying

7 M.L. Stivers, K.L. Smith, T.E. Hoerner, and A.R.Romine, Maintenance QA Program ImplementationManual, NCHRP Report 422, National AcademyPress, Washington, D.C., 1999, p. 9.

locations of excessively high or low mainte-nance; and

� To identify areas requiring additional employeeskills or equipment to accomplish assignedtasks.

6.5.2 MQA FRAMEWORK FOR MAINTENANCEAND OPERATIONS MANAGEMENT

Maintenance QA introduces a performance-basedframework for maintenance and operations manage-ment as illustrated in Figure 6.5. Several elements ofthis framework are drawn from traditionalapproaches to highway maintenance management:e.g., activity performance standards and cost models.The new elements that are added by a QA approachare those related to performance-based management:

� The explicit determination of condition ofmaintained highway features;

� Levels of maintenance service that are related tohighway condition or to the quality of servicesprovided; and

� Impacts of level of service (and associatedhighway condition) to customers.

Following is a brief discussion of each of the elementsof this framework, which will assist in interpreting thedifferent ways in which several states have imple-mented a QA program for maintenance and operations.

CURRENT CONDITION OF HIGHWAY FEATURES

The current condition of maintained items in thehighway system is tracked through periodic inspec-tion surveys. Since complete surveys encompassingall highway features would be difficult and expensiveto conduct, DOTs often employ statistical sampling.While legacy maintenance management systems typi-cally have an inventory of maintained highway fea-tures, they often have no provision to record featurecondition over time. The addition of data on facilitycondition is one key element of a QA approach, and itis used to establish the current LOS value in eachmaintenance activity group and district.



TRAFFIC AND ENVIRONMENTAL CONDITIONS

Traffic and environmental classifications can berecorded for each highway segment to help group itfor purposes of maintenance management reporting.For example, urban highways may exhibit differentdemands for maintenance and different unit costsfrom those on rural highways. Similar distinctionscan be made for environmental or geographical zonesto reflect the influence of terrain, altitude, localweather conditions, and other factors on maintenancedemand, performance, and cost. The classification ofeach highway segment can be accomplished duringinitial development of the QA approach and recordedin an inventory file.

APPLICABLE MAINTENANCE LEVEL OF SERVICE

The applicable maintenance LOS is specified by man-agers as the desired level to which each highway fea-ture should be maintained. It is referred to as thetarget LOS to distinguish it from the current LOS thatreflects the existing condition observed in the inspec-tion survey. Target LOS values are expressions ofmaintenance management policy and priority, andplay an important role in determining a performance-based budget estimate for the maintenance program,and in influencing the level of maintenance that isperceived by the public. It is for these reasons thatLOS values are key ingredients of a maintenance QAprogram. Individual target LOS values are specifiedfor each maintenance activity (or group of activities)in each district. In setting target LOS values, manag-ers can account for needed adjustments in programpriorities, and should reflect a realistic anticipation ofmaintenance funding. It is important to note, how-ever, that level of service also can be used as animportant argument for increases in maintenancefunding when the projected benefit is compelling.

DEMAND FOR MAINTENANCE WORK

The combination of items above – the current condi-tion (and LOS) of highway features, their characteris-tics and location (in terms of traffic and environment),and the target LOS value to which they will be main-tained – determine the demand for maintenance workto be provided. In maintenance QA programs, thisdemand is estimated as a function of LOS.

This “demand” for maintenance translates into theestimated work to be performed. It is computed foreach activity in each district. The total demand or

level of maintenance is recorded in units of workaccomplishment, typically the same measures as thoseused in an existing maintenance management system.Note that this estimated level of maintenance isdirectly a function of the target LOS specified bymanagers. If the target LOS is revised, in general thedemand for maintenance will likewise adjust.

MAINTENANCE ACTIVITY COSTS

Costs can be estimated for the levels of work com-puted above, using procedures similar to thoseemployed in existing maintenance managementsystems. Separate calculations of labor, equipment,and materials can be made, using performance stan-dards and respective unit costs as shown in Figure 6.5.Alternately, an overall activity cost can be computedfrom the total unit cost per accomplishment unit forlabor, equipment, and material combined. The per-formance standards are referred to as “actual” inFigure 6.5 to denote that it is the actual resource usagerates and crew productivity that should be used inthese calculations, not necessarily the “book values”that are listed in the highway maintenance manual.8

Performance standards (and unit costs) for each activ-ity will in general vary by district, and possibly by thetraffic and environmental classifications discussedabove. Existing maintenance management systemsmay not estimate costs to a level of detail sufficient toaccount for these variations; the QA approach affordsan opportunity to do so if warranted. Costs as afunction of LOS are computed by the QA analyticprocedure.

8 “Book” values may be used if they reflect up-to-dateinformation for the district, region, or area of interest.Statewide average values that have not been updatedrecently tend not to be realistic, and more specific,current information should be sought.



Figure 6.5 Maintenance Quality Assurance Framework

Traffic and EnvironmentalConditions

Applicable MaintenanceLevel of Service (LOS)

Demand forMaintenance Work

MaintenanceActivity Costs

Impacts to Agency Impacts to Customers

Current Conditionof Highway Feature(s)

Updated Conditionof Highway Feature(s)

How is MaintenancePerforming?

UnitCosts

ActualPerformance

Standards

UPDATED HIGHWAY CONDITIONS AND IMPACTS

The QA approach considers the benefits or conse-quences of maintenance as well as its costs. Benefitsare reflected by the predicted change in highway con-ditions that will result from performing maintenanceactivities to the specified levels of service. Theseupdated conditions have implications for both thehighway agency and its customers:

� The agency impacts are in terms of the effect ofmaintenance on the long-term trend in highwayinfrastructure condition. By sustaining LOSvalues at a high level, an agency can avoidbuilding up a “backlog” of maintenance work,and keep maintenance costs at an efficient levelover the long term.

� The customer impacts are in terms of highwayrideability, safety, comfort, and travel time thatare associated with the LOS provided. By sus-taining LOS values at a high level, an agency canprovide road users with high-quality transpor-tation facilities and services over the long term,cost-effectively.

The current state-of-practice in maintenance QA pro-grams is to use the target LOS value as a surrogate, orproxy, for these specific agency and customer impacts.The data needed for more explicit predictions of theimpacts of different maintenance LOS values maybecome available in the future with additionalresearch.

HOW IS MAINTENANCE PERFORMING?

The QA approach provides a feedback loop by whichmanagers can assess how the maintenance programhas performed and adjust the program accordingly.Measures of current performance are the current LOSvalues; adjustments can then be made through thetarget LOS values in the next program budget cycle.Level of service thus provides a measure of manage-ment accountability, and a means of communicatingprogram accomplishments and customer value pro-vided for dollar spent.

6.5.3 IMPLICATIONS OF AN MQA APPROACH

An MQA approach has several implications formaintenance management:



� It is a performance-based approach, in thatmaintenance levels of effort and cost are basedupon current highway condition and proposedLOS targets, and these calculations are imple-mented within a performance budgeting proce-dure. Moreover, the target LOS values providea basis for management accountability formaintenance performance, and the periodic sur-veys of highway condition establish a quantita-tive basis for this accountability.

� MQA also is a policy-driven process, as reflectedin the setting of target LOS values. To be suc-cessful, this process must involve appropriatepolitical decision-makers (e.g., governor’s office,legislative committees, the transportation com-mission or board) as well as DOT executives.

� As a policy-driven, performance-based approachto management, MQA is entirely consistent witha broader set of principles of good practice intransportation asset management.

7. PROGRAM DELIVERY


7.1 OVERVIEW

Resource allocation decisions result in a recom-mended transportation investment program. Pro-gram delivery puts this program “on the ground”through decisions in resource utilization to determinehow program work will be accomplished. Itssequence in the asset management framework isshown in Figure 7.1. Key challenges for programdelivery include maximizing efficiency and effective-ness of agency resources, meeting customerexpectations, minimizing adverse customer impacts,adhering to project scope, schedule and budget, andmanaging needed changes in projects and programs.

Figure 7.1 Program Delivery within ResourceAllocation and Utilization


Program Delivery



ation and Analysis

This chapter illustrates the application of asset man-agement principles to program delivery. It highlightsopportunities to optimize the implementation ofcapital programs, maintenance activities, and opera-tions plans through strategies such as the following:

� Investigating a range of delivery options.Assessment of options with consideration ofrelative costs, benefits and risks, both immediateand long term.

� Program management. Close monitoring andmanagement of project and budget status toensure that desired results are achieved.

� Cost tracking. Tracking of actual delivery coststo improve understanding of the true costs ofdifferent activities so that this information canbe used to enhance future resource allocationdecisions.

7.2 ALTERNATIVE DELIVERYMETHODS

7.2.1 RANGE OF OPTIONS

Transportation agencies have a range of deliveryalternatives available to them. Several non-traditionaldelivery techniques have been developed and appliedby U.S. transportation agencies to reduce time tocompletion, improve cost-effectiveness, address proj-ect complexity, supplement staff skills with special-ized expertise, and use in-house resources moreeffectively. Examples of these techniques include thefollowing:

� Innovative contracting approaches;

� Performance-based bidding;

� Intergovernmental agreements; and

� Outsourcing and managed competition.

When analyzing these and other delivery options, thefollowing issues should be kept in mind:

� Delivery methods should be evaluated on acase-by-case basis. A thorough analysis of proj-ect, owner, and market characteristics will helpidentify legitimate delivery options.1

� Although external issues may constrain deliveryalternatives (e.g., state or federal procurementlaws may prohibit certain procurementapproaches), motivated agencies can often cus-tomize procurement strategies to meet theirspecific needs and constraints.

� The methods presented in this chapter mayrequire construction documents, proposalevaluation guidelines, and oversight techniquesdifferent from those used in traditional pro-curement strategies. Care should be taken tostructure the procurement to maximize benefitsand mitigate potential risks.

� Since alternative delivery strategies give agen-cies flexibility in terms of project cost, schedule,and the use of in-house resources, these options

1 Christopher Gordon, “Choosing AppropriateConstruction Contracting Method,” ASCE Journal ofConstruction Engineering and Management, Vol.120 No. 1, (Mar 1994).

7. Program Delivery


should be considered early on in the planningand programming processes.2

7.2.2 CONTRACTING APPROACHES

State DOTs have developed and implemented inno-vative contracting approaches in an attempt toimprove the cost and time of program delivery orprovide needed expertise more efficiently. Thesemechanisms include assigning responsibility for bothdesign and construction to a single entity, corridorapproaches to asset management, and internaladjustments in an agency’s pre-construction activities.While such contracting approaches present advan-tages in certain situations, conventional methods ofdelivery (i.e., design-bid-build in construction, andperformance of maintenance by agency employees)will continue to be used for many projects and activi-ties. Selection of the appropriate delivery method isan example of decisions in “resource utilization” in anasset management context.

Federal Funding for DB ProjectsThe Transportation Equity Act of the 21st Century (TEA-21)established federal funding eligibility rules for DB projects:ITS projects over $5 million and other projects over $50 millionqualify for TEA-21 funds. However, in its proposed guidelinesfor DB contracting, the FHWA acknowledges the potentialbenefits of DB contracting for projects of all sizes.3 TheFHWA recommends that agencies opting for DB contracts forprojects under the TEA-21 thresholds pursue federal fundingthrough FHWA Special Project No. 14 (SEP-14), InnovativeContracting.

DESIGN-BUILD

Design-build (DB) contracts are one approach to com-bining design services and construction work into asingle contract. Time savings are possible under thisarrangement because construction can begin beforedesign is complete. Between 1991 and 2001, 24 DOT’sand several local agencies used DB contracts for

2 John B. Miller, Principles of Public and PrivateInfrastructure Delivery, Kluwer AcademicPublishers, 2000.

3 Federal Highway Administration, Design-BuildContracting; Proposed Rule (2001). www.transporta-tion.org/committee/design/doc/Federal_Register_NPRM_Design-Build.pdf

transportation projects as an alternative to the tradi-tional design-bid-build (DBB) process for 140 projectsranging in size from pavement overlays to freewayconstruction and reconstruction.4

A 1992 study5 documented the following impacts ofDB contracts on project schedule and budget:

� DB projects are completed 21 percent faster thantraditional design-bid-build (DBB) projects.

� Initial costs of DB projects are 4.6 percent higherthan DBB costs.

� Cost growth due to claims and change ordersfor DB projects is 4.7 percent less than for DBBprojects.

Design Build ExampleUtah DOT employed DB on its $1.59 billion reconstruction of a16-mile length of Interstate 15 in Salt Lake City. This projectinvolved roadway widening from six to 12 lanes, and recon-struction of 142 bridges and other structures, and 12 inter-changes. It was estimated that the project would haverequired eight to ten years to complete utilizing a traditionalDBB procurement process. However, in January 1996 theGovernor directed the Utah DOT to complete the project infive and one-half years – in time for the 2002 Winter Olympics.The DOT quickly determined that this acceleration would bepossible only with a DB contract, which required authorizingstate legislation. The DOT selected a program managementfirm to assist in guidance of the project along with theDepartment. This firm helped manage the evaluation, selec-tion and award process, leading to a notice to proceed to theselected DB consortium in April 1997.

Early construction starts were accomplished with no designsubmittals to the Utah DOT, which had oversight/ over-the-shoulder review responsibilities only. ISO 9001 registrationrequired the design-build consortium to establish proceduresand standards for quality. Ribbon cutting for the $1.59 billionproject occurred on May 14, 2001, five months ahead of thecontract completion date, and four to six years ahead of theoriginal procurement estimates.6

4 Ibid.5 Ibid.6 Thomas R. Warne and David G. Downs, “All Eyes onI-15”, ASCE Civil Engineering Magazine (Oct 1999).

7. Program Delivery


CORRIDOR APPROACH

A corridor approach to asset management is anotherfast-tracking alternative. In this approach, agenciescombine several capital projects or maintenanceactivities along a section of highway into a singleproject. This approach, which is used to minimize theinconvenience of the traveling public, follows anincreasingly popular philosophy to “get in, get out,and stay out.”

“Get In, Get Out, and Stay Out”One “get in, get out, and stay out” approach is to close alength of highway completely so that maintenance or con-struction crews and utility companies can perform all neces-sary work simultaneously. Current practices range fromclosing a highway section overnight or a weekend to moreextensive closures of several months for reconstruction. Forexample, the California and Michigan DOTs have applied acorridor approach to delivering capital projects.7

CUSTOMIZED APPROACHES

Transportation agencies also have developed cus-tomized contracting and procurement approaches thatfit into their specific funding, institutional, and legis-lative environment, and have adjusted those internalactivities that tend to prolong the delivery process.

While revised contracting approaches and internalprocess adjustments offer significant opportunities todecrease delivery time, they are not always appropri-ate for every project. For example, state legislationmay constrain procurement options and approvalprocesses, or an agency may want design of a projectto be 100 percent complete before contractors bid onit. In addition, a faster delivery time for a projectincreases the share of funding that must be allocatedto the project (e.g., completing a mega project in threeyears instead of five years may require that otherprojects be scaled back or delayed until year four).Understanding the full costs and benefits of innova-tive delivery approaches is essential to a meaningfulevaluation of this alternative.

7 Federal Highway Administration, Work Zone SafetyBest Practices Guide (2000). <www.ops.fhwa.dot.gov/wz/wzguidbk/>

7.2.3 PERFORMANCE-BASED BIDDING

Asset management calls for system performance todrive decisions throughout the project life cycle. StateDOTs have developed several options forincorporating performance-based concepts into pro-gram delivery. Following is a brief description of afew of these techniques.8

8 Federal Highway Administration, Initiatives toEncourage Quality through Innovative ContractingPractice -- Special Experimental Project No. 14 –(SEP 14). <www.fhwa.dot.gov/programadmin/contracts/sep_a.htm>

7. Program Delivery


Customized Approaches to Reducing Delivery TimeConstrained by state legislation that restricted DB contracts,the New Mexico DOT developed a unique delivery approach(design, construction manage, warrant) to reconstruct 120miles of State Route 44 in three years. Under this approach,a project developer was responsible for overall project man-agement, quality control, bid package preparation, and main-tenance during an extended warranty period. The DOTestimated that the project would have taken 27 years with itstraditional procurement process.9

In another example, the Washington State DOT cut the deliv-ery time for the South Dupont Interchange on Interstate 5 fromfour to eight months to 26 through a series of internal processimprovements:10

1. Commencement of the environmental review process ear-lier in the project, and incorporation of environmental consid-erations into the design process.

2. Design process enhancements: selection of a “Top Gun”design team, a streamlined design review process, stagesubmittals in which work proceeded based on engineeringestimates rather than waiting for final information, and com-mencement of bridge design before the interchange plan wasapproved.

3. Reduction of common third-party delays by including utilitywork in the construction contract.

4. Inclusion of design alternatives in the contract documentsrather than requiring contractors to submit shop drawings forapproval.

� Performance specifications are an alternative totraditional prescriptive specifications that enablebidders the flexibility to propose innovativesolutions. Performance specifications requirebidders to meet a defined level of service orquality without stating how to meet thesecriteria.

� Cost plus time bidding (also referred to as A+Bbidding) requires bidders to submit a time bid(e.g., number of calendar days until completion)in addition to a traditional cost bid. When

9 Mesa, PDC, LLC, A Summary of the New Mexico State

Route 44 Project (2000). <www.nm44.com/pdf/NM%2044%20Project%20Summary.pdf>

10 Cambridge Systematics, Inc., Department ofTransportation Highways and Rail ProgramPerformance Audit, prepared for the State ofWashington Joint Legislative Audit and ReviewCommittee (1998).

evaluating the total cost of the proposals, theowner uses the time bids to estimate the usercosts associated with each proposal. Thisarrangement encourages bidders to minimizetime to completion.

� Best-value bidding is used to select contractorsbased on a combination of lowest cost and bid-der qualifications or technical merit of aproposal.

� Lane rental, like cost plus time bidding, encour-ages contractors to minimize constructionimpacts on road users. Contractors are chargeda “rental fee per-lane per time” to occupy theroadway throughout the project.

� Life-cycle cost bidding is an alternative to tra-ditional lowest cost bidding. In this approach,the owner evaluates bids based on the projectedcosts over the entire life of a project.

� Incentive contract clauses provide contractorswith monetary awards for achieving definedperformance and schedule benchmarksthroughout the course of a project.

� Warranty periods enable an owner to guaranteethe performance of a new facility for a giventime. Warranty provisions on NationalHighway System projects are limited to specificfeatures (e.g., pavement, structures, etc.) andmay not include routine maintenance.

7.2.4 INTERGOVERNMENTAL AGREEMENTS

Intergovernmental agreements can create opportuni-ties to improve the efficiency and cost effectiveness ofdelivering projects and services. For instance, a stateDOT may purchase or exchange maintenance serviceswith a municipality, or expand the capabilities of acounty agency through training in exchange for workperformed by the county for the DOT.

Intergovernmental agreements have severaladvantages:11

� Cost savings through the sharing of expensiveequipment and employee expertise betweenagencies.

11 Municipal Research and Services Center of

Washington Report No. 27, Municipal CooperationGuide (1993). <www.mrsc.org/pubs/municoop.pdf>

7. Program Delivery


Utah DOT’s Performance-Based ProcurementForced with a very tight schedule for the reconstruction ofInterstate 15, the Utah DOT used a variety of performance-oriented requirements. The request for proposal (RFP)included a mixture of performance and traditional prescriptivespecifications, best value selection, and stipends (a first for apublicly funded major interstate highway project). Structures,pavements, lighting and several other design elements weregoverned by performance specifications. For example, thespecifications for pavement markings consisted only of a colorand retro-reflectivity requirements. Examples of innovationsfostered by the performance specifications include the use ofpolystyrene instead of traditional borrow material to minimizesoil settlements and an innovative traffic maintenance strategythat exceeded the Utah DOT’s expectations.

Long-term warranty requirements in areas of critical quality(structures, pavements, embankments, drainage) forced life-cycle cost analysis by the DB consortium and up-front qualityin design and construction. To give the warranty added force,the contract included an operations and maintenance optionunder which the consortium would be responsible for theseactivities for up to 10 years at a fixed price. Although the UtahDOT ultimately did not exercise this option, the consortium’sdesign and construction decisions were always influenced bythe knowledge that they might have the maintenance respon-sibility to correct any long-term problems.

An incentive fee in the maximum amount of $50 million wasavailable to the DB consortium for optimum performance inthe areas of schedule, quality, management, and communityrelations/maintenance of traffic. The Utah DOT evaluated theconsortium’s performance in these areas in six-month inter-vals throughout the project, and distributed the award moneyaccordingly.12

� Increased efficiency through the elimination ofduplicate efforts and economies of scale.

� Access by local agencies to services that theywould otherwise be unable to provide.

� Opportunities for state agencies to redirect localresources toward mutually beneficial projects.

12 Thomas R. Warne and David G. Downs, “All Eyes

on I-15,” Civil Engineering (Oct 1999).

Michigan DOT’s Alternate BiddingIn cooperation with representatives of the concrete andasphalt paving industries, the Michigan DOT developed anRFP that enabled bidders to submit bids for one of two“equivalent” pavement designs. The RFP included specifi-cations for both an asphalt and a concrete pavement design.The bids were evaluated based on the lowest life-cycle-cost ofthe proposed pavement design rather than the traditional low-est initial construction cost. In addition, the RFP included ashort-term warranty to cover materials and workmanship, andincentives for extraordinary pavement performance.13

Pennsylvania DOT’s Win-Win AgreementsThrough its Agility Program, the Pennsylvania DOT hasdeveloped working relationships with more than 1,500 of itslocal partners. The program encourages the DOT and localparticipants to identify win-win opportunities for sharingresources across jurisdictional boundaries. For example, inone agreement, the Pennsylvania DOT widened a townshiproad. In exchange, the local partner agreed to sweep variousstate roads within the township. In the first four years of theprogram, the DOT has estimated a total savings for all partici-pants of over $7.7 million.14

7.2.5 OUTSOURCING AND MANAGEDCOMPETITION

Further opportunities for delivery optimization existthough contracting with the private sector to performmaintenance and operation activities. The potentialbenefits of outsourcing include lower overall costs,improved service, and opportunities to leverage theexpertise of private companies and overcoming in-house staffing constraints. Factors to consider whenanalyzing the tradeoffs between in-house and out-sourced work include:

13 Michigan DOT, Alternate Bid Study M-6 South

Beltline (2000). <www.mdot.state.mi.us/projects/retired/m-6/altbids.pdf>

14 Pennsylvania DOT, Status of the Agility Program(2001). <www.dot.state.pa.us/Internet/Agility.nsf>

7. Program Delivery


� Capability of in-house staff capable to improvethe quality or cost-effectiveness of services.

� Methods by which to monitor work activitiesand ensure quality and performance.

� Availability of accurate cost data for comparingin-house versus outsourcing costs (activity-based costs are discussed in later sections).

� Internal costs and experience requited toadminister outsourcing contracts (e.g., devel-oping RFP and selection process, cost oftransition period, etc.).

� Distribution of project risks between owner andcontractor and the impact on costs (e.g., althoughthe private sector may charge a premium toassume all risks during a five-year fixed fee con-tract, the public agency will know the exact costof a set of activities over the life of the project).

� Need for a “safety net” if public employees aredisplaced by a private-sector work force.

In addition to contracting maintenance and operationsto the public sector after a facility has been built,outsourcing is possible through the combination ofthese activities with design and/or constructionduring the original procurement process. Options forapproach include design-build-operate (DBO), design-build-operate-maintain (DBOM), build-operate-trans-fer (BOT), and design-build-operate-transfer (DBOT)procurement strategies.

An alternative to direct outsourcing is managed com-petition. This practice has all of the potential advan-tages of direct outsourcing contracts but also gives thecurrent in-house staff the opportunity and the meansto compete against their private sector counterparts interms of quality and price.

Outsourcing Florida DOT’s Program ManagementFlorida’s Turnpike District is one of the Florida DOT’s eightdistricts. It consists of 440 centerline miles of toll roads,approximately 653 bridges, 215 buildings, numerous tollplazas, and communications facilities, spread out over Southand Central Florida. For over 10 years, the Florida DOT hasmanaged its Turnpike facilities with consulting contracts fordesign, construction and maintenance management services.

Nearly 100 percent of the Turnpike’s maintenance servicesare contracted for by the Florida DOT. Overall maintenanceprogram management is provided by a joint DOT/contractorteam. Contractor services include annual program andbudget planning, road and facilities inspections and needsassessments, emergency operations planning, environmentalservices, oversize-overweight and access permit manage-ment, and procurement and supervision of all routine andspecialized maintenance services. At any given time, thereare over 100 maintenance and service contracts in effect.The contract involves a staff of approximately 75 people andfees of approximately $5 million per year and is renewed atfive-year intervals. The contractor team is composed of high-way, bridge and traffic engineers, environmental scientists,contract administrators, and a variety of skilled maintenancetechnicians and administrative staff members.

The focus of the contract is patron service and safety andprotection of bondholder interests. The project is subject toannual quality assurance reviews by the State MaintenanceOffice.15

15 Wendell C. Lawther, Privatizing Toll Roads - A

Public-Private Partnership, Praeger Publishers(2000).

7. Program Delivery


Outsourcing Maintenance at the Virginia DOTIn 1995, the Virginia General Assembly enacted the Public-Private Transportation Act (PPTA). This legislation permittedprivate companies to submit both solicited and unsolicitedproposals for constructing, maintaining or operating variousfacets of Virginia’s transportation system. The underlyingrationale for the Act was to afford greater opportunity to theprivate sector to develop innovative and cost-effective solu-tions to the many transportation issues confronting theCommonwealth.

In 1996, the Virginia DOT received an unsolicited proposalpursuant to the PPTA. This proposal resulted in a negotiatedagreement for the private contractor to perform maintenanceservices for 25 percent of the Commonwealth’s interstatehighway system. The private contractor was to provide out-come-based routine maintenance services and requiredrestorative work, such as roadway resurfacing and bridgedeck replacement, on 1,250 lane miles of roadway on seg-ments of I-95, I-81, I-77 and I-381. The sections of theVirginia interstate system that were covered in this agreementare highlighted in Figure 7.2 (following page).

The agreement addressed the full range of maintenanceservices, including snow removal and emergency response,required to meet the performance standards established bythe Virginia DOT. In December 1996, the Virginia DOT andthe private contractor entered into a five and one-half year,$131 million fixed price contract. The DOT preliminarily esti-mated that the contract represented a savings of $22 million tothe Commonwealth.

VDOT OutsourcingRecognizing that this was an unproven approach, the VirginiaDOT designated the maintenance contract as a pilot projectintended to address two key questions:

1. Whether privately contracted asset management can pro-vide equivalent or better levels of service in interstate mainte-nance; and

2. Whether privately contracted asset management can pro-vide such services at lower costs.

Over the course of the contract, the Virginia DOT has workedto develop and modify its evaluation structure to present a fairrepresentation of the contractor’s performance. Based uponan evaluation in FY 2000, it appears that the contractor hadmet or exceeded the DOT’s performance targets for90 percent of the items evaluated on I-95, 89 percent on I-77,86 percent on I-81 and 86 percent on I-381. The VirginiaDOT’s evaluations currently are conducted on an annualbasis. A legislative commission has suggested that quarterlyevaluations would identify problem areas sooner and would bea more effective approach.

Regarding cost, the Virginia DOT contracted with the VirginiaPolytechnic Institute and State University (Virginia Tech) toprovide an objective assessment of this controversial aspectof the outsourcing contract. The Virginia Tech study utilized abid item and unit rate comparison of the cost of work per-formed by the private contractor in calendar year 1999 andcorresponding published Virginia DOT bid tabulations. Thestudy concluded that:

1. Work subcontracted by the contractor was four percentmore competitively priced than similar work would have beenif it had been let by the DOT.

2. Work self-performed by the contractor was likely to be 6.1percent cheaper than comparable work if contracted for orself-performed by the DOT.

3. The estimate of total project savings once price escalationwas accounted for was likely to be $18.7 million.16

16 Joint Legislative Audit and ReviewCommission of

the Virginia General Assembly, Review of VDOT’SAdministration of theInterstate ManagementContract, 2001.

7. Program Delivery


Figure 7.2 Virginia DOT Maintenance Outsourcing Map

DOT Responsibility

Contractor

Massachusetts Highway Department’s PhasedApproach to Maintenance Outsourcing

The Massachusetts Highway Department (MHD) began itsoutsourcing effort by contracting out all routine maintenancein a single county. It has been estimated that after one year,the program saved the MHD between $1.7 million and $2.1million. Based on this estimate, the MHD expanded the pro-gram to two districts and let the state work crews to bid on theprojects. (See the discussion on managed competitionbelow.) Further success in this second phase (estimated firstyear savings of $7.5 million and $10 million in additionalmaintenance services) gave the MHD confidence to institutethe program statewide. In the final phase of the program,MHD employees and private firms each won seven of 14maintenance contracts. After the initial contracts had expired,the rebidding process received little attention from themedia – maintenance outsourcing had become an acceptedpractice in Massachusetts. In the first eight years of this pro-gram, the MHD cut its $40 million annual highway mainte-nance budget by an estimated $15 million, whilesignificantly increasing the amount of work performed.17

17 Adrian Moore, “Road Work Ahead: Outsourcing

Highway Maintenance”, Intellectual Ammunition(Nov/Dec 2000).<www.heartland.org/ia/novdec00/privatization.htm>

A key issue with managed competition is to develop aprocurement process in which in-house and publicbids compete fairly. Without such a “level playingfield,” private firms will be unwilling to developquality bids, and the benefits of bringing the publicsector into the process will be greatly diminished.Challenges that must be overcome when developing alevel playing field for a managed competitioninclude:18

� Separation of government as bidder from gov-ernment as owner.

� Ability of in-house staff to compute the actualcost of an activity (including overhead, admini-stration, depreciations, and legal costs). Costtracking techniques are explored further in thelast section of this chapter.

18 Reason Public Policy Institute (RPPI) Privatization

Center, Avoiding Managed Competition Pitfalls.<www.privitization.org/collection/PracticesAndStrategies/Avaoiding_Managed_Competition_Pitfalls.htm>

7. Program Delivery


Outsourcing Operations at the OOCEAThe Orlando Orange County Expressway Authority (OOCEA)is the owner of the toll road system in Orange County, Florida.The system consists of 90 miles of toll roads and 11 plazas.In 1994, the OOCEA awarded a five-year contract to a privateoperator for toll operations services on this system. Previ-ously, the agency had contracted with the Florida DOT to pro-vide these services. Most of the private operator’s tollcollection staff transferred from the DOT, but new manage-ment oriented toward private sector business principles wasinstalled. In 1999, the OOCEA extended the private opera-tor’s contract for an additional five years.

The objectives of this outsourcing effort were to reduce opera-tions costs, increase managerial flexibility, and improve serv-ice quality and responsiveness. In 2000, an independentstudy found that the agency was largely successful inachieving these objectives.19 Increased efficiencies wereestimated to produce savings of over $1 million annually, aone-sixth reduction. Improved managerial flexibility was dem-onstrated by the ease with which the operator was able toquickly adjust the mix of full-time and part-time toll collectorsin response to changing conditions – adjustments that wouldhave been difficult for the state DOT to accomplish. The studycautioned that it was not always possible to distinguishbetween improvements caused by privatization and improve-ments due to other factors.

� Costs by private bidders to meet bonding andinsurance requirements.

� Special privileges and tax exemptions for publicagencies (sales tax, corporate income tax, prop-erty tax, etc.).

� Private sector costs of developing proposals.

� Difficulty in subjecting in-house staff to per-formance or cost guarantees.

7.2.6 SUMMARY

� A summary of delivery mechanisms discussedabove is given in Table 7.1.

19 Wendell C. Lawther, Privatizing Toll Roads – A

Public Private Partnership, Praeger, 2000.

Iowa DOT’s Managed CompetitionIn 1996, the Iowa DOT implemented a pilot managed compe-tition program for two of its activities: paint striping ($2 millionannual budget) and sign shop ($1 million annual budget).Program guidelines included the following:

1. Private sector bids competed against activity-based cost(ABC) proposals developed by existing state work crews.

2. Outside consultants were hired to reengineer DOT opera-tions, develop ABCs, and prepare proposals.

3. In-house bids included all direct and indirect costs.

4. A five percent preference was given to the in-house bid.

5. A safety net was developed for displaced state workers.

Iowa DOT employees were the low bidders for paint stripingand sign manufacturing, and a private firm was the lowestbidder for graphic display sign work. It is estimated that inter-nal improvements in paint striping operations in response tothis program saved the DOT more than $300,000 annually,and the DOT demonstrated that existing sign shop operationswere competitive with private sector alternatives.20

7.3 PROGRAM MANAGEMENTProgram management is necessary for an agency toimplement a capital or maintenance program effec-tively. By applying asset management principles toits program management approach, and agency can:

� Insure that the approved program isimplemented;

� Match available funds and workforce resourcesto delivery needs;

� Identify opportunities for improvement in itsplanning and programming processes; and

� Keep all stakeholders up to date on the status ofprogram implementation.

20 Jim Chrisinger, Managed Competition Pilot

Projects: Iowa Department of Transportation, aNational Academy of Public Administration report(1996). <www.alliance.napawash.org/ALLIANCE/Picases.nsf/e24ffc586e80044a852564ed006eb5be/0091ca9c8412ad788525656a00752035? OpenDocument>

7. Program Delivery


Table 7.1 Delivery Method Summary

Delivery Method Advantages Challenges Implementation Examples

Fast Tracking

Design-build, DBO, DBOM,BOT, DBOT, and other non-traditional procurementstrategies

Shorter delivery period, singlepoint of responsibility for owner tooversee, decrease in cost growthdue to change orders

TEA-21 thresholds, statestatutes, lack of experiencemanaging DB contracts

Utah I-15 DB, New Mexico SR 44design-construction manage-warranty,Massachusetts Route 3, DBOM exam-ples from 24 state DOTs

Corridor approach Shorter delivery time, minimalinconvenience to traveling public

Contractor bonding limits,limitations in the size of thelocal work force

Michigan DOT corridor planning andweekend closures, Caltrans nighttimeclosures

Performance-Based Bidding

Performance specifications Flexibility for contractor to proposeinnovative solutions

Utah I-15 design-build, Florida I-75asset management,

Cost plus time bidding Shorter construction times encour-aged, decreased user costs

South Caroline, Oregon, New York,Michigan, Maryland, and Missouriactively use this technique

Best-value bidding Consideration of both price andquality of proposals

Utah 1-15 design-build, Oregon I-15lift span bridge

Lane rental Shorter construction times encour-aged, decreased user costs

Indiana I-70, Maine I-295, OregonU.S. 26

Life-cycle cost bidding Lowest life-cycle cost of proposalsconsidered instead of lowest con-struction cost

Michigan M-6, Missouri’s seismic iso-lation system

Incentive contract clauses Contractors encouraged to meetperformance and schedulebenchmarks

Michigan M-6 South Beltline

Warranty periods Encourage quality design and con-struction, transfer of financial risksto the public sector

All of the performance-basedbidding techniques requireconstruction documents,proposal evaluation guide-lines, and construction over-sight techniques that varysignificantly from those of atraditional procurementprocess

Michigan I-75 and M-28 concretepavement repairs, examples from 24states DOTs

IntergovernmentalAgreements

Resource sharing among agencies,increased efficiency, alignment oflocal forces with state objectives

Establishing relationshipsacross agencies, identifyingwin-win opportunities

PennDOT Agility Program

Outsourcing Lower operational costs, improvedquality of services, transfer of risksto private sector, supplement in-house work capacity

Difficulty monitoring per-formance, availability ofaccurate data to compare in-house versus outsource costs,labor org. concerns for dis-placed public employees

MassHighway Maintenance, VirginiaDOT Interstate Maintenance, FloridaToll Ways Operations, Florida DOTTurnpike Maintenance EngineeringManagement, South Carolina ProgramManagement Services

Managed Competition Same as outsourcing with addedopportunity for current work forceto improve operations and competewith private sector

Same as outsourcing withadded challenge of main-taining a level playing fieldduring procurement

Iowa DOT paint striping and sign shopactivities, MassHighway maintenance

7. Program Delivery


7.3.1 MANAGING CHANGES IN THEPROGRAM

If an agency is practicing good asset management, itsapproved programs support its policy goals and arerealistic in light of funding projections. Defined pro-cedures to approve changes in projects and to manageresulting adjustments in programs enable an agencyto systematically address unforeseen issues that ariseduring program delivery and make adjustmentsaccordingly. Managing changes in programs entails:

� Clear guidelines and assigned responsibilitiesfor reviewing and approving project and pro-gram-changes.

� Current and accurate project and program datato identify potential problems and anticipateneeded adjustments in areas such as thefollowing:

- Project scope, cost, and schedule;

- Potential impacts on agency staffing;

- Availability and sources of funding to coverneeded adjustments; and

- An expenditure plan to analyze impacts oncash flows and to balance revised expendi-tures to available funds.

� Coordination between project and programmanagers and between their respective man-agement systems.

7.3.2 DELIVERY TRACKING

Asset management calls for system monitoring andperformance results to be applied throughout theresource allocation process. Program delivery per-formance can be tracked in terms of schedule, cost,scope, and quality. Table 7.2 identifies potential proj-ect and program level delivery measures for each ofthese items. Please see Chapter 5 for a more detailedlook at developing performance measures – thoseconcepts also apply to defining and using deliverymeasures.

Washington State DOT’s Management of ProgramChangesThe Washington State DOT has developed a comprehensiveapproach to manage program changes during capital programdelivery. Highlights include:

Clear guidelines and responsibilities: The DOT has docu-mented its protocol and staff responsibilities in a programmanagement manual. The manual defines four projectchange levels (minor, moderate, significant, and major) andapproval requirements for each level. Major changes must beapproved by a project screening board, which consists of theDeputy Secretary of Transportation and several assistant sec-retaries from across the DOT.

Current and accurate data: The Washington State DOTuses a Capital Program Management System (CPMS) to trackthe status of its capital projects (e.g., start date, plannedexpenditures, overruns, etc.). Several offices throughout theDOT provide input for the CPMS. The Program ManagementOffice helps these offices understand the importance of theircontributions to the process and to submit timely, reliabledata.

Coordination: Regional DOT offices enter project-levelchange requests in to the CPMS. Each night, the CPMSautomatically generates a report of these changes. Programmanagers use this report to review changes and evaluate theirsubprogram and program impacts. The results of changerequests are traced by the CPMS and by the WashingtonState DOT’s Transportation Executive Information System(TEIS).21

Problems with program delivery can often be tracedback to one or more of the following shortcomings:

� Poor scoping process (e.g., limited review andscope creep problems).

� Poor costing process (e.g., outdated estimates,oversights).

� Poor scheduling process (e.g., single-projectviewpoint, done in isolation, impacts on otherprojects not considered).

� Poor pre-construction processes (e.g., lengthyenvironmental permitting requirements, delayedright-of-way acquisitions).

21 Washington State DOT, Programming and

Operations Manual (2001). <www.wsdot.wa.gov/FASC/EngineeringPublications/Manuals/P_OManual.pdf>

7. Program Delivery


Measures that are tracked during delivery help agen-cies quantify performance in these areas and identifyopportunities for improvement. For example, finalconstruction costs that consistently surpass initialbudgets may indicate a need for estimation techniquesto be reevaluated or schedule overruns may indicatethe need for improvements in the environmentalpermitting process. In addition to this diagnosticfunction, delivery measures provide a means forcommunicating program delivery status to allstakeholders.

Table 7.2 Examples of Program DeliveryPerformance Measures

Category Example MeasuresSchedule Contract milestones (e.g., completion date)

Project on schedule (yes/no)

Percent schedule overrun

Cost Project within budget (yes/no)

Activity unit cost

Percent cost increase/decrease

Scope Number of change orders

Activities performed versus planned(e.g., lane miles paved)

Value of projects programmed versus delivered

Number of projects programmed versusdelivered

Quality Performance specifications for capitalimprovements

Levels of service (LOS) for maintenance andoperations activities

7.3.3 COMMUNICATING PROGRAM STATUS

The asset management framework presented inChapter 2 identifies the importance of performancemonitoring and constant feedback. The performancemeasures described above are only effective if theyare communicated to decision-makers throughout anagency.

Arizona DOT’s Program Status ReportsEffective and timely program delivery is a major priority for theArizona DOT. Therefore, it establishes 20 milestones for eachof its capital projects at the beginning of the pre-constructiondelivery process. These milestones include anticipated finishdates for various stages of design, completion of technicaltasks (e.g., surveying), and obtaining right-of-way clearances.The Arizona DOT incorporates these milestones into amonthly Active Projects Status Reports. This report is used tomanage project schedules among DOT staff, design consult-ants, and other stakeholders. The report is available on theArizona DOT’s web site. Statistics on the pace of programimplementation also are submitted monthly to the Governor’soffices as one the DOT’s key measures of performance.22

Effective asset management also requires agencies tobe customer-focused. In addition to evaluating theimpacts on system users of various delivery strategies,an agency can maintain a customer-oriented approachto program delivery through external reporting.Structuring public reporting requires an agency toidentify those aspects of program delivery in whichthe traveling public has an interest. In addition,communicating delivery status and achievements tothe public, legislative bodies, and other stakeholdersalso will strengthen an agency’s credibility andaccountability.

Pennsylvania DOT’s Agency Report CardsAn example of an effective external communication tool is theSecretary’s Report Card, which the Pennsylvania DOT usesto report its accomplishments to the public on a regular basis.Each month, the DOT issues a one page report that explainsthe importance of a single performance measure and graphi-cally represents its accomplishments in that area. Pastreports have included information on the InternationalRoughness Index (IRI), tons of pothole patching materialused, and snow removal.23

22 Arizona DOT, ADOT Project Time Management

Guidelines, What’s New – Highlights (2000).<www.dot.state.az.us/about/ppms/guide/GUUIDEREV0.pdf>

23 Cambridge Systematics, Inc., Synthesis ofTransportation Asset Management Practice,NCHRP 20-24(11) Task 1 Report (2001).<gulliver.trb.org/publications/nchrp/nchrp_w41_task1.pdf>

7. Program Delivery


7.4 COST TRACKING

It virtually impossible to overstate the importance ofvalid and reliable costing – both original estimatesand monitoring through the course of a program orproject. It is difficult to conceive of a major agencydecision or initiative that does not include costing aspart of its foundation. If the costing turns out to beunreliable, the decision or initiative is often under-mined, with potentially disastrous results.

This section describes the types of cost data requiredto support asset management, identifies common gapsin cost data, and proposes strategies for bridging thesegaps. It is assumed that an agency has financial man-agement mechanisms in place (e.g., financial man-agement system able to track expenditures byaccounts, manage cash balances and accounts payableand receivable, monitor funds by source and issuerequired reports, etc.). The following sections focuson how these data relate to the program deliverystage of asset management.

7.4.1 CURRENT SOURCES OF COST DATA

An appropriate suite of infrastructure managementsystems, complete with accurate and current costdata, would enable an agency to answer the types ofquestions presented in Table 7.3 with confidence.However, cost data stored in financial managementsystems (FMS), infrastructure management systems,maintenance management systems (MMS), and bidtabulations are not consistent and not easily inte-grated. For example, infrastructure managementsystems track and calculate costs by output (e.g.,square yard of asphalt overlay). In contrast, FMStrack costs are based on input (e.g., number of laborhours, equipment hours, units of material used, etc.).Therefore, using FMS data to populate infrastructuremanagement system databases is not alwaysstraightforward.

Several potential issues arise even when the funda-mental basis of cost tracking is consistent betweensystems. For example, even though FMS’s andMMS’s both track output-based costs, they trackclosely related but different aspects of costs. Table 7.4identifies examples of these differences. The result ofthese inconsistencies is that comparing projectedfuture maintenance costs generated by a MMS toactual maintenance cost records from a FMS is not an“apples to apples” comparison.

Table 7.3 Cost Data Types and Uses

Application ofCost Data Example Questions

Relate cost tooutcome

What is the impact on overall networkperformance if we increase or decreasethe annual pavement budget by 10percent?

Identify cost by assetclass and/or group ofassets (e.g., route,district)

How much do we spend on bridges inGreengrass County? In District 5?

How much do we spend annually tomaintain I-1?

Estimate costs ofproject, maintenanceactivity, or contractalternatives

Is it more cost-effective to relive conges-tion on a state highway by adding a laneor enhancing operations with an ITSproject?

What is the cost of using a DB contractcompared to our traditional procurementmethod?

How much does it cost to us to maintainour signs? How does this compare tooutsourcing alternatives?

Estimate costs ofinvestment strategies)

What is the life-cycle cost of a deferredmaintenance strategy compared to that ofa preventive maintenance strategy?

Estimate program-level costs

How does the final cost of delivery a pro-gram compare to our initial estimates?

Another common gap in cost tracking is the inabilityto calculate full costs that capture both direct andindirect costs.

� Direct Costs – Infrastructure management sys-tem cost totals may not account for the directcosts of additional items included in typicalproject work. For example, pavement projectestimates generated by a PMS may not includeadditional costs for work on ancillary drainageitems, guardrail, roadsides, signs, pavementmarkings, and so forth.

� Indirect Costs – Management system costs maynot account for indirect work. This work wouldinclude, for example, design, construction man-agement and inspection, traffic managementand control, and project administration.

7. Program Delivery


Unknowingly underestimating full costs leads to dis-torted decision-making throughout the entire resourceallocation and utilization process.

Table 7.4 FMS versus MMS Cost TrackingComparisons

FMS MMS

Labor Time sheets Time sheets or mainte-nance cards

Wage rate By employee with alladjustments (e.g., bene-fits, bonuses, etc.)

Estimated wage rate byemployee class or state-wide average rate

Equipment Lump sum at purchase,depreciated over life

As though equipmentwas rented (e.g.,cost/hour)

Materials Detailed calculations ofstockpile costs

Average unit cost

7.4.2 BRIDGING THE GAPS

Improving cost data is often complicated, agency-spe-cific, expensive, and technically challenging. How-ever, the potential benefits of current and accuratecost data far outweigh these impediments. This sec-tion presents three general strategies to bridge thegaps in your agency’s cost data.

� Populating an infrastructure management sys-tem with activity-specific costs based on datafrom a FMS, MMS, and bid tabulation records.

� Applying an adjustment factor to MMS resultsso that they are consistent with FMS reports.

� Developing activity-based costs.

The approach that your agency takes to enhance itscost data should be customized based on its specificdata needs and the status of its current financial rec-ords and systems.

POPULATING MANAGEMENT SYSTEMS

Future cost projections can be improved bypopulating management systems with data from a

FMS, MMS, or bid tabulation records. This approachmay require the following steps:24

� Identify existing sources of cost data and com-pile data.

� Identify activity costs required in your infra-structure management systems.

� Map existing data to these data items. Chal-lenges that may arise during this step include:

- Activities used by your infrastructure man-agement systems may not correlate directly tothe pay item codes used in your othersystems.

- Your FMS and bid tabulation records mayexpress costs in different units of measurethan your infrastructure managementsystems.

- The activity costs in your MMS may notinclude overhead and indirect costs.

- An inflation factor may be required to converthistoric records to present-day costs.

� Perform a statistical analysis to determine thereliability of the data (this step may include ananalysis of cost variation by district).

� Create an expert panel to review the data andmake final adjustments.

� Document this procedure and develop guide-lines for future updates.

ADJUSTING MANAGEMENT SYSTEM OUTPUT

An alternative to calculating individual activity costs(i.e., management system inputs) is to develop anoverall adjustment factor that can be applied to sys-tem outputs. For example, bringing MMS projectionsin line with actual data tracked in a FMS may requirethe following steps:

� Define number of adjustment factors. Forexample, an agency may opt to calculate onestatewide factor, urban and rural factors, or afactor for each district. (The remainder of thissection describes an approach for calculating afactor for each district.)

24 John O. Sobanjo and Paul D. Thompson,

Development of Agency Maintenance, Repair &Rehabilitation (MR&R) Cost Data for Florida’sBridge Management System (2001).

7. Program Delivery


� Calculate total maintenance cost for each districtfor a given time period using the MMS.

� Calculate the same costs using the FMS.

� Develop an adjustment factor for each district bycalculating the percentage of the FMS figureover the MMS figure (it is a general rule ofthumb that FMS costs will exceed MMS costs forhighway maintenance).

� Identify large discrepancies and investigate pos-sible causes in the agency’s business processes.

� Rely on a panel of experts to review factors andmake final adjustments.

� Apply the factors to MMS output during futureanalyses.

� Develop and institutionalize procedures forupdating the adjustment factors regularly.

ACTIVITY-BASED COSTING

Activity-based costing (ABC) is an accountingapproach common in the private sector that signifi-cantly enhances asset management in the publicsector. ABC enables agencies to calculate the full costsof its maintenance and operations activities. Knowingthese costs, an agency can:

� Accurately evaluate capital, maintenance, andoperation alternatives to address a systemdeficiency;

� Practice activity-based management (ABM) byhighlighting activities with specific opportunitiesfor cost savings and operations enhancements;and

� Compare the cost of performing a task in-houseto that available through the private sector.

Following is a summary of the process that the IowaDOT used to develop activity-based costs.25

� Define a set of activities that when taken as awhole, encompass the entire scope of work per-formed by the division.

25 Mark D. Abrahams and Mary Noss Reavely,

“Activity Based Costing: Illustrations from the Stateof Iowa”, Government Finance Review (April1998). <www.state.ia.us/government/ dom/pubs_presentations/abc_article_pdf.PDF>

� Calculate the direct labor costs required for eachactivity. This information may be available fromtimesheets and must be adjusted for time “bor-rowed” by other divisions and time spent onnon-work activities.

� Calculate the material costs for each activity.

� Calculate the facility costs for each activity.First, estimate the facility costs for the entiredivision (e.g., based on the percentage of floorspace of a large DOT facility occupied by thedivision). Secondly, allocate this total amongthe activities. Facility costs should include adepreciation expense.

� Calculate the vehicle and equipment cost foreach activity. These costs include original cost,maintenance, operating costs, depreciation, andsalvage value.

� Calculating the overhead costs of each activity.Overhead costs include operations, finance,administrative, and oversight costs.

� Determine unit cost for each activity by com-bining all of these costs into a full activity costand dividing by the number of output units.

8. INFORMATION AND ANALYSIS


8.1 OVERVIEWA sound asset management approach requiresobjective, high-quality data, presented to decision-makers and other stakeholders as understandable,useful information. It is a systems analysis chal-lenge to catalog the many stakeholders and theirinformation requirements, find the simplestanalytical and presentation methods that meet asmany stakeholder needs as possible, and design datacollection processes that efficiently feed the analyseswith an acceptable level of quality. In this context,information technology (IT) is a tool to support assetmanagement, not an end in itself.

This chapter provides a management-level overviewof the process design issues involved in deliveringsound information to decision-makers. IT support ofasset management in the broadest sense draws uponwide-ranging expertise in planning, finance, varioustechnical disciplines (e.g., pavements, bridges, traffic,safety) and functions (design, construction, mainte-nance, operations), business process and work-flowre-engineering, economics, statistics, systems analy-sis, database management and data integration, soft-ware development, and communications.Transportation agencies may already have thisexpertise in-house or have the ability to procureneeded experts from outside. A large body of litera-ture exists in each subject area, of which selectedsamples are cited in this chapter.

Figure 8.1 Information and Analysis withinResource Allocation and Utilization


Program Delivery


Policy Goals and Objectives

Quality Inform

ation and Analysis

There are no comprehensive asset management sys-tems that can satisfy all stakeholder needs off-the-shelf, though there do exist entire competitiveindustries having effective solutions to parts of the

problem (e.g., data collection equipment, pavementand bridge management systems, geographic infor-mation systems, and asset inventory systems). Eachagency has to decide which commercial systems tobuy, which required capabilities should be developedin-house or by consultants, and which capabilities canbe used as they already exist. Each agency also has todecide which initiatives to undertake right away andwhich to defer or to implement in a stageddevelopment.

8.2 INFORMATION NEEDS ANDDATA QUALITY

Figure 8.2 presents a model for improving an agency’sdata resources. As with many of the processes dis-cussed in this Guide, this data improvement approachrepresents a cyclic process enabled by a feedback loop.However, for simplicity, the process is discussed as ifit were a linear process starting at the top-right ofFigure 8.2, performing an Audit of the CurrentSituation. Section 8.2 discusses all of the steps throughEnsure Data Quality. Improvements to data integra-tion and accessibility are addressed in Section 8.3.

8.2.1 DEVELOPING A DATA STRATEGY

Developing a data strategy requires performing aperformance audit of the current IT environmentand practices at an agency and defining data needs.The audit will help identify key IT issues that needto be addressed by the data strategy. Areas to con-sider during this audit include:

� Data that currently is available throughout theagency;

� Data requirements of existing and planned man-agement systems and decision-support tools;

� Data collection and maintenance costs; and

� The value (real and perceived) of data fordecision-making.

The results of the IT audit will feed into the identifi-cation of data required to implement and support anagency’s transportation asset management func-tions. These decisions depend upon the scope ofasset management and the particular businessprocesses conducted by the agency, as discussed inChapter 4. The example requirements below

8. Information and Analysis


provide guidelines for identifying data itemsrequired to support asset management. Individualagencies should tailor these examples to their par-ticular practices and system objectives, and may

choose to develop requirements in more detail torelate to specific business process, system, and datacharacteristics.

Define DataNeeds

Developa Data

Strategy

Figure 8.2 Data Improvement Model

Audit ofCurrent

Situation

ImproveData

Collection

ImproveData

Integration

ImproveAccess to

Data

EnsureData Quality

ASSET INVENTORIES

� Inventories for different asset classes should bebased on a common location-referencingscheme. This standard allows for queries ofwhich assets are present in a given location ornetwork segment, and provides a unified basisfor data input, display, and reporting.

� A common set of geographic descriptors andclassification categories for summarizinginformation should be supported across assettypes – e.g., districts, corridors, functionalclasses, responsible agency for ownership andoperation, climatic or topographic zones, andso forth.

� The coverage and detail of inventory data foreach asset class and type1 should be estab-lished at a level that is appropriate to the scaleof investment required for that class, businessprocess requirements, and data collectioncosts. Choices include, for example, use of asampling approach versus 100 percent cover-age; annual updates versus less frequent sur-veys; and identification of specific items atindividual locations versus aggregate countswithin intervals or segments.

� The inventory should include sufficient infor-mation on asset characteristics and classifica-tions to support the full range of assetmanagement business processes, includingcondition assessment, GASB financial

1 For example, if “pavements” and “hardware” areasset classes; “flexible pavement” and “signs”would be asset types.



reporting of infrastructure assets,2 needsanalysis, and project prioritization. A strategicoverview of transportation assets is needed todefine an inventory of appropriate structureand detail, with standards of precision, accu-racy, and timeliness of data collection thatmeet these varied needs.

� While there may be separate inventories foreach class of asset, commonly used data (suchas functional classification and AADT) shouldnot be collected more than once. If individualsystems require the same kind of information,but in different formats, or at different levels ofdetail, then automated methods should beestablished for deriving the necessary infor-mation from the primary source.

CURRENT ASSET CONDITION AND PERFORMANCE

� For each type of asset, at least one objectivemeasure of condition should be collected andstored.

� Ideally, historical condition data (possibly inaggregated form) should be maintained andmade accessible to support trend reportingand analysis.

� In addition to purely technical condition indi-cators (e.g., pavement roughness, sign visibil-ity or reflectivity, and percent items deficient),other measures that are useful for policy-making and reflect customer perspectivesshould be collected and stored. Examplesinclude composite condition or serviceabilityindexes, customer satisfaction ratings, andmeasures of user cost or benefit are useful forpolicy-making and reflect customer perspective.

COST DATA

� Cost data should account for the full costs ofan activity; accounting for indirect as well asdirect activities. Construction and mainte-nance cost information should be compiled sothat a time-series of costs can be derived: e.g.,

2 GASB refers to the financial accounting andreporting standards issued by the GovernmentalAccounting Standards Board. Many of thereferences to GASB in the system requirementslisted in this section will apply only if the modifiedapproach is used for financial reporting.

by work type, asset type or asset class, locationand network classification.

PROGRAM DELIVERY INFORMATION

� Maintain records of actual costs and time of com-pleted projects, including significant changes

� Program outcomes in terms of established per-formance measures

8.2.2 MAXIMIZING DATA COLLECTION ANDDATA MANAGEMENT EFFICIENCY

EXISTING TECHNICAL CAPABILITIES

A major source of simplification and economy is totake advantage of existing data collection processes,systems, and standards. A transportation agencyhas many opportunities to do this. Here are just afew examples:

� Agencies can take advantage of commercialoff-the-shelf systems for storing and managingasset data (e.g., commercial database applica-tions, querying and reporting applications).Bridge, pavement, and maintenance manage-ment systems are now used by most transpor-tation agencies for this purpose.

� Several firms offer to sell, lease, or operateautomated data collection equipment, includingpavement survey vehicles, truck weight anddimension measuring equipment, and bridgemonitoring devices. Taking advantage of thistechnology is often less expensive than per-forming similar functions manually.

� Often data collection equipment or procedurescan be applied to multiple purposes. Forexample, pavement management survey vehi-cles can inventory and videotape roadsidefeatures, measure obstructions, and recordinformation about capacity and access. Thesedata can be used by other units in a DOT: e.g.,for safety, geometric design, maintenance, etc.Bridge inspection processes can record trafficsafety features and speed restrictions at bridgesites. Crash data can be mined to analyzevehicle occupancy.

.



Virginia Inventory and Condition AssessmentThe Virginia DOT has developed a comprehensive Inventory and Condition Assessment System (ICAS) to facilitate the managementof the extensive assets associated with the Commonwealth’s highway and road networks. The system employs state-of-the-art auto-mated data collection and precise global positioning technologies. The purpose of the system is to provide an accurate inventory oftransportation system assets, determine and record their condition, and locate them geographically using global positioning satellites.This information is loaded into a relational database to provide tools for decision makers to get a near real-time picture of the state oftheir transportation network and assist in effective, responsive planning and the most efficient allocation of scarce resources. ICASprovides the foundation for the statewide asset management system.

When ICAS is fully implemented, VDOT can use this system to immediately access information about any asset, including lighting,signs, guardrails, traffic control devices, and drainage, to determine exact location and condition to ensure effective and efficientmaintenance and safe operation of the roadway network. The capability to access spatial information also allows decision makers tovisualize the situation and take appropriate actions in case of natural disasters or damage by vehicles to the roadway network. Sincethe requirements can be identified quickly, work efforts can be prioritized efficiently to ensure the most critical requirements can besatisfied first, gaining the most effective results from constrained resources and workforce to meet the public’s transportation andsafety needs. This system also provides ready access to vital information for long range planning, budgeting, and resource allocation.In addition, the database provides an efficient storage medium for historical information that might have been lost in the past as expe-rienced personnel relocate or retire, ensuring continuity of operations.

The data collection system employed in the initial three-county pilot effort consists of three key elements: 1) field collection usinginspectors with backpack-mounted computers, voice recognition software, and global positioning equipment; 2) van mounted data anddigital image collection systems; and 3) asset collection from digital and orthographic images. The data collected are then used tobuild an asset inventory and develop roadway centerlines (geometric data).

Field collection using backpacks and a voice recognition system was highly innovative and effective. It allowed inspectors to establishaccurate geo-referenced location, compile a detailed inventory, and assess condition. All of this information was collected and enteredinto the database “hands-free,” allowing effective and safe data input. This method also allowed collection and assessment of high-way assets such as pipes and drainage that are not visible in ground-based imagery or digital orthophotography.

In areas where it was not safe or impractical to accomplish field collection, inspectors used the van collected digital images to obtainand record asset data/information. Lastly, some information, such as ramps and loops, was collected directly from orthophotographicimages. All of this asset information was merged with the field data and entered into the central database.

In conjunction with this effort, VDOT contracted the collection of right-of-way images and development of roadway network centerlines.This was a significant element of the project because it develops roadway centerlines for the entire statewide network, including inter-state, primary, and secondary roads. this information will also be entered into the database.

The central database employed in this project is a relational database that allows VDOT to access needed linear-referenced inventoryand condition assessment information to enhance effective and timely planning, decision-making, and resource allocation by the vari-ous offices and districts in VDOT responsible for the effective, efficient, and safe operation and maintenance of the state’s highwayand road network.

� Global Positioning System (GPS) equipment isbecoming widely used to pinpoint the loca-tions of road segments, structures, and road-side features. A single GPS survey should beable to satisfy the needs of all types of assets,as well as recording speed limits, traffic direc-tion, number of lanes, route connectivity, andother geographic network information aboutthe infrastructure.

� Maintenance crews typically have to fill outtimesheets, and contractors have to reportwork they have accomplished. These activitiescan be augmented to record data necessary for

estimating quantities and costs to improveplanning models. GPS equipment on mainte-nance vehicles can help to ensure the accuracyof this information.

� Data collection processes done by in-housestaff require training and standardization.Agencies can take advantage of industry stan-dards, which help improve the quality andlower the cost of data collection. For example,AASHTO has new standards for pavementmanagement data collection. In addition,pooled efforts can be used to spread the cost of



developing training and quality controlprocedures.

There may be a disadvantage of using existing pro-cedures and equipment for a new data collectionneed, in that the existing method may not be fullyadaptable to the new requirements. For example,when an agency decides to adopt an off-the-shelfpavement management system, it typically has tochoose between living with the existing databasearchitecture even if it is not an exact fit to theagency’s needs, or foregoing compatibility withfuture enhancements that may be provided by thevendor. It may be possible to build a software“shell” or “adapter” around an off-the-shelf systemthat tailors the system more closely to the agency’srequirements.

SAMPLING TECHNIQUES

Another way to economize in data collection is touse sampling. Sampling is a powerful tool for cer-tain applications, but it also has distinct limitations.In an inventory where each individual facility is sig-nificant and failure of any one could be cata-strophic – bridges, for example – sampling may notbe appropriate in certain applications. Even inbridges, however, sampling can play a role: forexample, estimating the severity of chloride con-tamination of bridge decks is done by takingsamples scattered over the deck surface.

Effective Use of Sampling

Sampling is often used when the data are representativeand where the consequences of not observing every facilityare not catastrophic, or where a backup process is in placeto detect serious problems. One common example is themeasurement of sign cleanliness and reflectivity. Manyagencies check a random sample of signs periodically togain a statistical indication of sign condition. The backupprocess is the watchfulness of local maintenance supervi-sors, who are expected to report individual cases of missingor obscured signs.

Sampling also may be used to exploit a cause-and-effect relationship to estimate a difficult-to-measurevariable from sampled data, using one or more vari-ables that are easier to measure and have larger orexhaustive samples. For example, a strategy to pre-dict costs in pavement or bridge management sys-tems might involve three stages:

1. Start with an exhaustive sample of conditiondata from ongoing data collection processes,showing the extent of deterioration on eachfacility.

2. From a relatively large sample of work accom-plishment data, estimate the quantities of vari-ous kinds of work required (e.g., pay items orbid items) as a function of the deteriorationquantities and other relevant variables.

3. From a smaller sample of work records, esti-mate the unit costs of the pay items and biditems.

This three-level approach recognizes the fact that theextent of deterioration is readily available for allfacilities, but quantities of work are less accessible,and accurate costs are less accessible still. Recentwork in developing unit costs for bridge manage-ment systems uses approaches like this.3

8.2.3 ENSURING DATA QUALITY

Quality assurance is an ongoing process, using sys-tem design, statistical methods, training, andauditing to maximize various attributes of data thattogether we know as quality. Quality is not free, butthe expense of quality assurance does tend to payfor itself later.4 For example, increased quality ofbridge inspection saves the expense of sendingcrews to a bridge site for repairs that turn out not tobe needed, or setting up emergency repairs on abridge where an existing problem had not beendetected.

Measurement of quality begins by identifying sev-eral important attributes, and determining theirimportance to the end result.

� Accuracy. Data are accurate when repeatedmeasurements cluster around the “true” valueof what is being measured. Accuracy isdetermined by performing occasional check

3 Sobanjo, John O., and Paul D. Thompson,

Development of Agency Maintenance, Repair, andRehabilitation Cost Data for Florida’s BridgeManagement System, Final Report, FloridaDepartment of Transportation , 2001 (available onwww.pdth.com/images/fdotagcy.pdf).

4 Crosby, Philip B., Quality is Free: The Art of MakingQuality Certain, McGraw-Hill, 1979.



measurements using a more accurate (butprobably more expensive or scarce) tool.

� Precision. Data are precise when repeatedmeasurements are tightly clustered around thesame value, whether or not it is the “true”value. GPS measurements, for example, aremore precise than locating an object on a map.

� Coverage. The extent of coverage of a data setis a key design decision and a key limitationon its usefulness. An inventory of state high-ways, for example, is of no help to project-levelneeds identification for local roads.

� Timeliness. Timeliness refers to the age ofdata at the time they are used. Timelinessmust balance several competing requirements:e.g., the appropriate point or season of the yearin which to conduct inspection surveys; theneed to process data for use in managementsystem(s); and the need for the resultinginformation by one or more organizationalunits in assessing current condition,comparing actual to planned accomplish-ments, identifying work needs, developing aprogram budget, and so forth.

� Detail. Appropriate level of detail is an appli-cation-specific requirement that is often amatter of definition. PMS and BMS need unitcost data at a level of detail that matches thedefinitions of treatments that their models cananalyze.

� Accessibility. This attribute of data qualityrefers to the ease with which the data can beput to use. Weigh-in-motion data, for exam-ple, are an excellent resource for truck weights,but are often useless unless processed to theneeded level of detail.

� Assumptions and Definitions. Data sourcesmay have definitional differences or inherentassumptions that make them more or less use-ful for asset management applications. Forinstance, definition and interpretation ofpavement condition data may differ betweenan agency’s PMS and MMS.

QUALITY STANDARDS

When two or more information systems share thesame data source, it is important to have a formal,documented quality standard, describing minimumand maximum requirements along all the dimensions

noted above, that meet the needs of the stakeholdersusing the systems. This serves as a multi-way agree-ment among the end-users, data collectors, and sys-tem developers, an agreement that should not bemodified without again involving all thesestakeholders. Upper managers do not have to beinvolved in developing these standards, but they doneed to insist that the standards are developed.

Data quality standards are an essential managementtool: they are directly connected to budgetaryrequirements for data collection, and they provide astreamlined way for upper management to ensurethat conflicts regarding data quality are resolved.With this tool, a manager responsible for a data col-lection budget can express the impacts of budgetaryincreases or decreases in terms of changes to thedata quality standard, and their effect on specificend-users.

QUALITY ASSURANCE

Quality assurance (QA) processes require a contextof documented standards, and they are the mecha-nism by which adherence to standards is measured.Senior managers are not typically involved in qual-ity assurance personally, but the existence of QAprocesses, and periodic effectiveness measures, arewhat provide managers the needed control andassurance. The first point of quality assurance is thetraining of data collectors and equipment operators.

Data Collection Training

Bridge inspectors have at least two weeks of formaltraining, often much more, including classroom and fieldwork. They are then tested and certified. To maintain certi-fication, they must take refresher courses and be re-testedperiodically. Although it is possible to create trainingcourses in-house, it is often far more cost-effective to useexternally-developed courses, even though this may meanchanges or limitations on data quality standards. TheNational Highway Institute offers a variety of courses,including bridge inspection, and manufacturers of datacollection equipment often offer training.

Quality assurance with respect to use of fully auto-mated data collection equipment includes definingstandards for measurement, planned equipmenttesting and certification, and applying calibrationprocedures prior to surveys and verification of cali-bration following surveys.



After data are collected, a number of methods areavailable to measure adherence to the quality stan-dards. These include re-inspection strategies, con-sistency checks, stakeholder surveys, and formaldata audits.

RE-INSPECTION

It is a standard procedure in any sizeable data col-lection process to devote a portion of the resource,often five to 20 percent depending on the conse-quences of error, to re-collect a sample of data usingsimilar or better equipment and/or personnel. Forexample, after a section of road is completed with apavement survey vehicle, an agency might use analternative vehicle, a different crew, or even profilemeasurements made by land surveying equipment,to double-check the initial data. Locations for the re-check are typically chosen by random sampling, andstatistical methods are available for deciding howmany locations to check5. The results of these checksare tracked over time as a performance measure.Sometimes crews compete and are rewardedaccording to the results of the process.

CONSISTENCY CHECKS

Often data sets have built-in redundancy. Forexample, a roadway inventory may have the num-ber of lanes, lane and shoulder widths, and traveledway width. An automated process could easilyidentify discrepancies needing evaluation. A well-designed information system should be able to per-form these checks automatically, and flag potentialproblems for later resolution. The ability to resolvesuch problems at a later time is important, since itmay have to wait until the next data collection cycleor until someone can be dispatched to visit the facil-ity. After resolving the issue, it should be possibleto record an explanation and turn off the flag even ifno correction is warranted. The number of sucherrors in newly collected data, and their resolutionstatus, should be tracked as a quality measure.

STAKEHOLDER SURVEYS

For certain attributes of quality, it is efficient to askstakeholders to report the level of quality they per-ceive in the information they receive, including their

5 Cochran, William G., Sampling Techniques, Wiley,

1977.

level of satisfaction. Although stakeholders gener-ally can not easily measure accuracy (except anec-dotally) or precision, they can often uncoverproblems with coverage, timeliness, detail, accessi-bility, and definitions.

DATA AUDITS

Occasionally it is useful to employ an outsideagency or consultant for an independent review ofdata quality, especially if the consequences of incor-rect information are dire. In bridge inspection, forexample, it is common for districts within a state toswap inspectors periodically to give a fresh per-spective. The FHWA, an important user of bridgedata, conducts regular audits of states’ bridgeinspection practices.

It is very important for senior managers to recognizethat data quality for asset management is relativelyeasy to define using the approach described here,and is highly measurable at reasonable cost. Foreach data item (or group of items) in an asset man-agement database, it is reasonable to identify, alongwith the source of the data, the quality control proc-ess that ensures that the data will be sufficientlyaccurate for its intended use, according to allrelevant quality dimensions. Doing this in anorganized way is less expensive and more effectivethan an ad hoc approach, and certainly less expen-sive than the consequences of poor decisions thatcould result from incorrect or insufficient data.

8.3 DATA INTEGRATION ANDACCESSIBILITY

Data integration is a set of processes and systems toshare data from one source among multiple applica-tions, or to merge data from multiple sources for useby a single application.6 As agencies have appliedseveral maturing information systems related toasset management over the past 20 years, they havecome to recognize more widely the importance ofdata integration. However, competing philosophiesand technologies have led to a wide range of alter-native approaches. For those wishing a moredetailed description of data integration approaches,

6 Management System Integration Committee(MSIC), The Integration of Transportation PlanningInformation, Federal Highway Administration, 1998.



the FHWA has published a Data Integration Primer.7In addition, the FHWA is sponsoring an in-depthreview of current data integration practices and theirapplication to transportation asset management.This project is scheduled for completion in 2003.8

8.3.1 BENEFITS OF INTEGRATION

The benefits of integration are clear:9

� Provide more thorough information that yieldsa more accurate picture of what a manager ismanaging. Effective integration matchesavailable data to each user’s responsibilities.

� Help coordinate management functions acrossdepartmental units (e.g., among construction,maintenance, and operations regarding pro-posed road closures).

� Allow existing data collection processes andinformation systems to serve new applicationsthey were not originally intended for. Forexample, the outputs of several asset manage-ment systems can be brought together forintegrated programming and budgetingapplications.

� Make data more understandable by havingstandardized definitions and measurementtechniques and units across the agency.

� Reduce data collection cost by avoiding dupli-cation of effort and making more efficient useof expensive data collection equipment andtechnical personnel. Data collection and asso-ciated database management can have signifi-cant economies of scale.

� Make systems and results consistent by usingthe same data sources.

� Make quality assurance processes as manage-able as possible.

7 FHWA, Data Integration Primer, Office of AssetManagement, August 2001.

8 Contract DTFH61-01-C-00181, managed throughFHWA’s Office of Asset Management.

9 Several of the following benefits and drawbacks ofdata intergration were discussed in NCHRP Report363, Role of Highway Maintenance in IntegratedManagement Systems, Chapter 3, 1994.

� Make multiple data sets accessible for com-parative, analytical, and reporting purposes bylinking the data electronically.

� Enable applications that may be important buthave too narrow an audience to justify theirown data collection processes.

� Improve communications by making datapresentations more intuitive and complete.

8.3.2 APPROACHES TO INTEGRATION

While current infrastructure management systemsprovide many useful capabilities, they are notwidely integrated, and may not meet all of the ana-lytic and reporting needs of an agency’s desiredasset management approach. Areas where betterintegration may be considered are as follows:

� Data collection, processing, and storage –Efficiency can be gained by using data collec-tion techniques that serve multiple businessareas and associated IT applications: e.g.,customer satisfaction surveys that cover awide range of topics, collection and processingof a single set of traffic statistics, and use ofpavement survey vehicles that collect data forpavement, traffic, safety, and maintenancemanagement. Analyzing and storing data inan integrated fashion avoids data duplicationor conflict, provides a consistent basis foranalyzing infrastructure usage, condition, per-formance, and related user benefits, and pro-motes data integrity.

� Queries of asset conditions, needs, andplanned projects – The capability to accessinformation – e.g., on infrastructure character-istics, conditions, deficiencies or needs, andplanned projects – using a flexible, easy-to-usequery feature allows for custom reports andrapid responses to management questions.Combining this feature with a map displayprovides a useful visual tool to identify prob-lem locations and proposed solutions.

� Consistent evaluation framework in analyz-ing projects and programs – Even though dif-ferent types of projects and classes of assetsmay need to be analyzed using specific engi-neering and economic methods, a commonframework provides a basis for evaluation andinvestigation of tradeoffs. This framework



might entail, for example, use of a life-cyclecost approach to project evaluation whereappropriate, and common measures of cost,benefit, and performance that allow for com-parisons across project types and asset classes.The framework also should promote consis-tency in technical assumptions such as dis-count factors, value of time, accident cost, andso forth.

� Improved decision support in the followingareas:

- Executive Information – System capabilitiesand tools that are specifically designed toprovide policy-level information are neededto better support executives and managersneeding a “big picture” view.

- Tradeoff Analysis – Methods are needed toassist with tradeoff analysis across assetclasses, program categories, and types ofinvestment, making use of comparativeanalyses of costs, benefits, and performancemeasures.

- Benefit/Cost Analysis – Benefit/cost analy-sis provides a useful, commensurate basis toevaluate different categories of candidateprojects. When structured in a life-cycle costcontext, it provides an economic frameworkfor analyzing capital-maintenance andcapital-operational tradeoffs.

GIS as a Platform for Integration

New York State DOT now integrates its pavement man-agement and bridge management information on a GISplatform as part of its asset management development. Atypical display shows a map with the highway system, onwhich are superimposed color-coded symbols indicatingpavement or bridge projects, respectively. Double-clickingon a project symbol opens a window displaying detailedinformation on the project. An analogous approach is nowunder development in Michigan DOT and Arizona DOT, andis proposed in CDOT. MDOT has compiled a unified datarepository, ADOT is designing and developing a data ware-house, and an extension of CDOT’s data warehouse toasset management is now proposed. These datawarehouses will consolidate asset inventory informationand potential project information from asset managementsystems, communicate with a GIS to display asset informa-tion spatially, and generate management reports efficiently,including reports designed and formatted for higher-levelmanagement.

The best model to use for improving data integrationcan vary by agency and therefore should be consid-ered on a case-by-case basis. Similarly, the actual costof each strategy will depend upon the specific situa-tion at hand. It is possible to stage the migration ofdata to provide near-term improvement while plan-ning for longer-term redevelopment.

8.3.3 IMPROVING ACCESS TO INFORMATION

Most states employ asset management systems:particularly for pavements and bridges, but also forsafety, public transit, intermodal facilities, othersystem features and appurtenances, constructionprojects, maintenance, and traffic operations. Sur-veys conducted by NCHRP10 and the FHWA11 indi-cate that these systems are widely used for technicaland research purposes, including detailed program

10Lance A. Neumann, Methods for Capital

Programming and Project Selection, NCHRPSynthesis 243 (1997).

11Edgar P. Small, Terry Philbin, Michael Fraher, andGeorge P. Romack, The Current Status of BridgeManagement System Implementation in the UnitedStates, International Bridge ManagementConference, IBMC-043, Transportation ResearchBoard and Federal Highway Administration,Denver CO (April 1999).



development. However, their use by higher-level orexecutive management for decisions such asresource allocation and program tradeoffs is muchless frequent. Initiatives in asset management andcompliance with GASB Statement 34 will likelychange this outlook. Several state DOTs havealready made efforts to provide wider access to theinformation required to support their business proc-esses. For example, WSDOT has for several yearssuccessfully employed an executive informationsystem that provides high-level programmatic andfinancial information to WSDOT managers, legisla-tors, commission members, and staff. WSDOT’smaintenance levels of service are likewise imple-mented in this executive-level system, complete withcolor photographs illustrating each level of servicewithin a maintenance program area. Users canapply the system to explore budget implications ofchanges in level of service within each programarea. Michigan DOT has been contemplating tobuild such a system upon its existing asset manage-ment applications. NYSDOT’s maps of its high-levelprogram performance measures (discussed above)also are an effective illustration of information tai-lored to executives.

8.4 DECISION SUPPORT

8.4.1 OVERVIEW

At any level of maturity, a transportation agencywith a bona fide asset management process uses thedata it collects in some productive way to makebetter-informed decisions. As the process improvesover time, decision-makers and other stakeholdersgain increased trust in data quality, and garner moreusable and capable tools for accessing andpresenting information. At some point, decision-makers reach the limits of utility that presentationtools can offer, and need more sophisticated tools inorder to exploit their valuable data resources tofurther improve decision-making. Decision-supporttools serve several important purposes:

� They digest a large amount of input data into amuch smaller and more focused set of infor-mation needing immediate attention;

� They convert data collected according to thedefinitions and norms of engineers and datacollection staff, into terms and concepts morefamiliar and useful to managers;

� They provide an economic perspective onfacility conditions, and calculate performancemeasures in a form compatible with theagency’s objectives, uniformly across all assettypes;

� They predict the future outcomes of decisionsunder consideration; and

� They express decisions and predicted out-comes at the level of detail and coverageappropriate to each specific decision-maker.

Agencies already have considerable IT capabilitiessupporting transportation asset management. Allstates have, at a minimum, two basic pools of data:one associated with FHWA’s Highway PerformanceMonitoring System (HPMS), which provides infor-mation on geometric, structural, and operationalcondition for a sample of roads; and the secondrequired by FHWA’s National Bridge Inspection(NBI) Program. Most DOTs, however, have moreextensive highway inventories and periodic inspec-tion and condition assessment programs. Inspectionsurvey data for assessing the physical condition ofinfrastructure are obtained through a variety oftechniques, including drive-by visual observation,detailed site inspections, non-destructive testing,automated vehicle measurements, and photo- andvideo-logging. Operational data describing real-time conditions of the transportation system arelikewise obtained through a number of technologies,including cable or loop detectors and cameras formonitoring traffic flow, speed, and vehicle charac-teristics, and sensors for monitoring road surfacetemperature and precipitation. These data are usedin systems to manage infrastructure, as described inFigure 8.3, and traffic operations and safety, as listedin Figure 8.4. Figures 8.5 and 8.6 identify systemsthat, while not addressing infrastructure specifically,play important roles supporting asset management.



Figure 8.3 Typical Infrastructure Management Systems

Infrastructure Management Systems

Pavement Management – Nearly all states have pavement management systems (PMS). Experience withthese systems over several decades has led to a high degree of refinement regarding information organiza-tion and content and decision-support procedures. These systems generally have capabilities formaintaining and reporting the status of the pavement inventory, current and historical condition, forecasts ofperformance for assessing future needs, guidance on project and program development, and actual perform-ance of pavement parameters (e.g., materials, structural design, mix design, etc.) in such applications asSuperpave and the new AASHTO 2002 mechanistic design.

Management of Bridges and Other Structures – Bridge management systems (BMS) have well-developeddata, analytic, and reporting capabilities for bridge structural and operational condition. Some states haveemployed BMS to represent other structures such as high-mast light fixtures, sign bridges, and minor tun-nels. However, this practice is not standardized, and additional systems development may take place toaddress these and additional structures (e.g., retaining walls, ITS installations) more specifically. TheFHWA, in partnership with the Federal Transit Administration (FTA), recently completed the developmentof a Tunnel Management System for highway and transit tunnels.

Maintenance Management – Many states have a maintenance management system (MMS) in place. Theoriginal uses of these systems were to record information on maintainable highway features, plan andschedule maintenance activities, and estimate budgets and resource requirements based upon standardized,statewide work-requirement factors. Recently several DOTs have enhanced their analytic approach tomaintenance management to develop level-of-service or performance-based methods for maintenance budg-eting, bringing MMS closer to the concepts used in PMS and BMS. More integrated MMS are on the horizonthat will link maintenance management with other DOT functions in transportation asset management,financial management, resource management, and construction project management.

Other DOT-Maintained Facilities and Features – While many agencies employ their maintenance manage-ment systems to monitor condition of facilities (e.g., rest areas) and features (e.g., guardrail, signs, and sig-nals), some agencies have developed individual management systems to maintain more detailed informationon these items.

Other Modal Facilities – The application of IT to assets of other modes is more varied among DOTs, due todifferent program responsibilities and levels of budget that DOTs exercise among transit facilities, aviationand maritime facilities, pedestrian ways and bicycle paths, and intermodal facilities such as park-and-ridelots and stations. Transit routes, pedestrian ways, and bikeways that are part of the highway network maybe designated within a highway database or maintained in a separate system or database, while individualmodal and intermodal facilities may be addressed by a separate IT application. A complicating factor is thatmodal responsibilities may be vested in more than one agency, in which case the DOT’s role is associated,for example, more with program funding and monitoring than with line management responsibility. Inmany cases a DOT’s role in these other modes, and consequently its IT applications, may focus more onoperational rather than infrastructure concerns.



Figure 8.4 Typical Management Systems in Transportation Operations, Safety, andCustomer Service

Transportation Usage and Customer Services

Highway Usage, Operations and Safety – All states maintain data on traffic (at a minimum, annual averagedaily traffic or AADT), and accidents by location, though the level of detail and sampling strategy varies.Some states have capabilities in place such as traffic operations centers to track more detailed operationalcharacteristics (e.g., congestion patterns, speeds) for particular facilities.

Congestion, Safety, Public Transit and Intermodal Management Systems – The degrees of implementa-tion and the operating characteristics and scope of these systems vary among agencies. The most sophisti-cated treatments of these topics occurs in traffic operations centers, which monitor traffic speed andcongestion in real time, and with ITS installations, which, among other technologies, employ real-timemonitoring and information feedback to the traffic stream (e.g., through variable message signs).

Transportation Network Planning Models – Most transportation agencies have basic trip generation,modal split, and traffic assignment modeling capabilities in place to forecast future transportation move-ments, with associated data: e.g., trip origin-destination tables and network characteristics (distance, speed,travel time, cost). These models are used primarily at the regional level, though a number of statewidemodels also are in use. DOTs also may track demographic data that influence demand for, and impacts of,transportation: e.g., population, employment, socioeconomic characteristics, and travel patterns. Somestates have freight as well as passenger travel information.

Customer Information – Some states maintain data on customer perceptions of service quality that areobtained via surveys. Event tracking systems also are used by some DOTs to log customer questions andcomments, initiate any needed work orders, and manage the closure of each item.

Real-Time Weather Information – DOTs in winter climates that may lead to freezing temperatures onpavements and snow and ice precipitation may monitor weather conditions in real time. These systemsemploy sensors that report air and pavement temperature and precipitation on the road surface as theyoccur. These monitoring systems may be combined with weather forecasting capabilities that apply data onlocal site conditions within area meteorological models to forecast weather conditions affecting roads.



Figure 8.5 Typical Systems to Manage Agency Resources

Agency Resources

Accounting and Financial Management – DOT systems for comprehensive accounting and financial man-agement are central to tracking and reporting departmental funding and expenditures by program. Theydocument funds expended by program, organizational unit, work task, and type of expenditure, supportingasset management in several ways: e.g.,

� They enable tracking of historical trends in revenues and expenditures, which can be correlated withmajor program changes and influencing factors.

� They enable agencies to identify the full costs of building, operating, maintaining, and rehabilitatingtransportation infrastructure, and to compare the costs of different methods of program delivery.

� They define the “ground truth” for dollars received and spent as a reference for other management sys-tems. Program costs calculated by other systems (e.g., PMS, BMS, MMS, equipment or materials man-agement, construction project management) can be reconciled against financial system data.

� They can identify the costs of responding to extraordinary or non-typical situations (e.g., emergency anddisaster response, major interdistrict transfers of resources, and special applications of program funds).

Human Resource and Payroll Management – Agencies have systems to manage employee information andpayrolls. Human resource data back-up line managers’ assessments of the availability and cost of in-housestaff to deliver products and services, influencing decisions on feasible methods of program delivery. Infor-mation on labor skills and costs by organizational unit can be applied within integrated maintenance man-agement systems to provide more precise tracking of activity accomplishment as well as single-source inputof labor time reporting.

Maintenance Resources – MMS are the primary tool for scheduling and managing maintenance resourcesacross organizational units and for comparing methods of delivery (e.g., in-house labor forces versusoutsourcing). They do not, however, track labor usage and costs to the same precision as that employed inhuman resource systems, payroll systems, and financial management and accounting systems. Moreover,their costing of equipment in terms of simple “rental” rates based on usage (e.g., by hour or mile) and ofmaterials in terms of essentially a unit cost may only approximate the more precise calculations used in othersystems.

Equipment and Materials Data – Agencies may track information on heavy equipment (as for constructionand maintenance) and materials through financial system modules or via specialized equipment and materi-als management systems designed specifically to reflect agency purchasing and accounting conventions.These systems incorporate algorithms that meet an agency’s specific approaches to cost assignment andaccounting: e.g., depreciation or estimation of rental charges for equipment, and stockpile or inventory cal-culations for materials.

Real Estate and Property Data – Agencies may employ specialized systems to manage right-of-way holdingsand acquisitions, as well as buildings and properties ancillary to the transportation network (e.g., mainte-nance yards, garages for DOT equipment).



Figure 8.6 Typical Systems to Manage Programs and Projects

Programs and Projects

Planning and Programming Information – Agencies often support planning and programming proceduresand STIP development with IT applications identifying the status and characteristics of candidate projects.These systems organize project information within a time horizon, typically 10 to 20 years for planning, six to10 years for mid-range investment plans, and three to six years for programming. Data usually include proj-ect identification by program, proposing agency or division, estimated cost (total or by phase: preliminaryengineering, right-of-way acquisition, and construction), planned years of phased implementation, andfunding sources. This information may be printed and incorporated as part of a DOT’s long-range plan, itsstatewide transportation improvement program (STIP), and other agency planning and programmingdocuments.

Project Pipeline and Construction Management – Agencies also may maintain information on constructionprojects in various phases from preliminary engineering to completion. Project pipeline systems addressproject status following approval of the STIP and the annual/biennial construction program, as projectsmove into design, right-of-way acquisition, environmental evaluations, and permitting prior to advertise-ment of bids (“ad date”). Construction management systems address project implementation followingopening of bids and construction contract award, through to project completion and closeout. Project mile-stones, critical events affecting progress, and payments to contractors are tracked. Approved changes in thescope, cost, and schedule of each project also are recorded.

Bid Costs – Many agencies track the cost of construction projects in terms of a standardized list of bid itemsand associated unit costs. Each advertised project that includes a particular bid item contributes a paireddata point in terms of the unit cost submitted by the winning bidder and the specified quantity of the biditem. At the end of the year the weighted-average unit cost of each bid item is computed from these accu-mulated data pairs; the unit costs of all bid items are published or maintained in a database. Data may becomputed statewide or by geographic unit such as district or county. These data provide guidance to engi-neers on current bid prices, reflecting trends in labor, equipment, materials, and subcontractor costs and thelocal bidding climate.



8.4.2 SAMPLE INFORMATION SYSTEMREQUIREMENTS

INFORMATION SYSTEM REQUIREMENTS

This section provides several examples of informa-tion system capabilities that support the resourceallocation and utilization process illustrated inFigure 8.1. The organization of these examples isconsistent with the organization of the data needspresented in Section 8.2. Individual agencies shouldview these examples in the context of theirindividual practices and system objectives, and maychoose to further investigate capabilities that arehighly relevant to their business processes and inlinewith their existing suite of management systems.

CURRENT ASSET CONDITION AND PERFORMANCE

� Systems or analytic tools should be able toderive values of established agencyperformance measures from raw conditiondata in an unambiguous and replicable way(e.g., to compute a cracking index as a functionof type, severity, and extent of cracking). If thecondition measures or indexes are used in thefinancial reports of infrastructure, they shouldconform to GASB 34 standards.

� Systems should support queries of individualasset condition and of aggregate conditionmeasures, composite measures, andcombinations of measures, by location andasset class or type.

PROJECTED ASSET CONDITION ANDPERFORMANCE

� Systems should provide the capability toproject future asset condition: e.g., using assetdeterioration models. Ideally, the system willbe able to apply actual data from conditionmonitoring to automatically update thesedeterioration models.

� Systems should provide the capability toproject future values of established agencygoals, objectives, or target performancemeasures.

� Systems should project condition in relation toa target condition level, also referred to as

scenario testing (refer to the example on thefollowing page).

COST ESTIMATION AND REPORTING

� Systems should utilize models to estimatecosts of key activities in transportation assetmanagement, particularly for projects to build,repair, rehabilitate, and reconstructinfrastructure, and for preventive and routinemaintenance. To the degree possible andappropriate, these models should try toachieve the following criteria: accounting forthe full costs of an activity (refer to Chapter 7for more details on cost tracking);distinguishing between constant- and current-dollar estimates; clarifying the basis of the costestimate (e.g., operating costs of equipment inmaintenance management systems;depreciation of equipment in equipmentmanagement systems); using actual unit costsin lieu of statewide averages; conforming toGASB standards on cost reporting, even if themodified approach is not planned for use; andproviding an option to account for ancillarycosts (e.g., benefits on labor costs; costs ofconstruction inspection and management asadjustments to project costs; replacement ofappurtenances as part of a construction project).

� In addressing critical assets such as bridges,systems should consider a “failure-cost”approach that reflects an effective penaltyborne by the agency and by transportationcustomers due to closure of a severelydeteriorated facility. Such a penalty effectivelyprovides a criterion to undertake needed workbefore the infrastructure reaches a failed state.

� Systems should include budget constraints incost estimates performed at a network, system,or program level. They also should providethe capability to forecast the annual needed tomaintain assets at established condition levels;or, conversely, the condition level that will beattained as a function of constrained budgetlevel.



0

20

40

60

80

100

0 1 2 3 4 5 6 7 8 9 10Time (years)

Percent of Bridges with HI >75 Percent

No Additional Expenditures,Do Nothing Policy

Moderate Expenditures,Maintain Status Quo

High Expenditures, Increaseover Status Quo

Figure 8.7 Example of Budget Scenarios and Effects on Infrastructure Condition

Figure 8.8 Resulting Relationship Between Infrastructure Condition and Needed Expenditure

0

5

10

15

20

25

0 20 40 60 80 100

Percent Bridges with HI >75 percent in 10 years

Relative Budget (dollars in Millions/year)

Scenario Testing Example

Scenario testing can be used to investigate the funds required to achieve a performance target or, conversely, the conditionthat can be achieved with a given budget level. Figure 8.7 illustrates an example comprising a set of three scenarios that havebeen analyzed for an example network of 500 bridges using the Pontis® 4.0 bridge management system. Each scenario testsa particular budget level (high, moderate, and none) to preserve the bridge network through a 10-year analysis period.Figure 8.7 plots the condition of the bridge network versus time in years. The network-average bridge condition is gauged bythe percent of bridges with Health Index (HI), a measure of bridge structural condition, greater than 75 percent. Plotting thecondition level at the end of 10 years versus the corresponding annual budget (the end points in Figure 8.7) results in therelationship between condition and expenditure as shown in Figure 8.8. This graph captures the tradeoff between constantexpenditure level and resulting long-term condition. This relationship can be used directly as a guide identifying theexpenditure level to meet a specified target condition level. Moreover, Figure 8.8 provides a basis for tradeoffs analyses withother programs (as described in Chapter 6).



NEEDS IDENTIFICATION

� Systems should provide the capability to flagthe specific locations of assets or individualfacilities that do not (or will not) meet one ormore minimum standards.

� Systems should provide the capability toidentify multiple types of needs occurring in agiven location (e.g., deficiencies due tocongestion and to pavement condition).

� Systems should provide the capability toestimate the costs of addressing the identifiedneeds using decision rules or automatedevaluation and selection of alternative actions.

� Systems should provide the capability tosummarize these costs across a variety ofdimensions (by type of action, location, type ofasset, etc.).

� Systems should provide the capability to easilylocate and retrieve information on planned,programmed and pipeline projects in selectedlocations.

PROJECT, PROGRAM, AND NETWORK-LEVELEVALUATION OF PROPOSED WORK

� Given a list of candidate projects (which mayinclude a mix of assets and project types),systems should provide the capability toprioritize candidates according to a consistentmethodology: e.g., benefit/cost ratio, cost-effectiveness criterion, or other agency criteria,to assist in planning and programming.

� Agencies should develop project evaluationtools that have a consistent set of outputs andoutcome measures across project types toallow for evaluation of wide range ofalternative approaches.

� Systems should provide the capability toevaluate the life-cycle costs and benefits of agiven type of project. In asset preservation,provide the capability to estimate the life-cyclecosts associated with different capital/maintenance strategies.

� Systems should provide the capability tocalculate performance measures associatedwith a range of investment levels anddistributions (e.g., to support tradeoffanalyses).

PROGRAM DELIVERY

� The systems should summarize information onoverall program delivery in terms of cost andtime parameters, number of proposed projectscompleted, and reasons for significant changes.

� Systems should provide the capability toderive or update unit costs and cost modelsbased on actual project or contract cost data.

8.5 SYSTEM MONITORING ANDFEEDBACK

8.5.1 OVERVIEW

A critical aspect of information support for assetmanagement occurs in the scheduled monitoring ofthe transportation system to gather data on how thetransportation network infrastructure is performing,compare performance results to intended targets orpolicy objectives, and provide feedback toindividual stages of resource allocation andutilization to identify needed adjustments in policy,procedures, and criteria for future managementcycles. Monitoring the performance of thetransportation network infrastructure within theasset management framework is illustrated inFigure 8.9.

Figure 8.9 Feedback Loops within ResourceAllocation and Utilization


Program Delivery



ation and Analysis

In the context of asset management, systemmonitoring refers to gathering information on theimpact of preservation, improvement, maintenance,and operations programs on the characteristics andbehavior of the transportation network. Thesynonymous terms “system performance monitoring,”



“program performance monitoring,” and“performance monitoring” all refer to the samemanagement activity: to determine and report theimpacts of transportation programs on thetransportation network and the service it provides toits users. These impacts may be in several areas: e.g.,the physical condition and integrity of the system, thetransportation service provided (which in turn affectsthe level of mobility and support for economicopportunity), and the effects of system usage on otherpublic policy objectives such as environmentalprotection, social cohesion, and energy conservation.

There is a corresponding set of measures that can beapplied at the same stage in Figure 8.9 to monitorthe delivery of the transportation construction,maintenance, and operations programs themselves.These measures, which are discussed in Chapter 7,provide accountability for program accomplishmentand communicate program status and progress.These measures can be referred to as “programdelivery measures” to distinguish them frommeasures of transportation system performance.Both sets of measures are relevant to an assetmanagement perspective.

8.5.2 PERFORMANCE AND DELIVERYMEASURES

Performance measures are measurable or observableindicators used in system monitoring. They help tocommunicate system status, impacts of recentprogram investments, short-term and long-termtrends affecting the transportation system, andemerging needs for new investment or updates inpolicy. They provide a critical linkage betweenpolicy goals and planning and programmingdecisions, and the means to gauge the implicationsof shifting funds among programs in tradeoffs. Thepreferred approach is to have quantifiableperformance measures, although qualitativemeasures can serve in certain situations (e.g., ingauging visual appeal of roadsides or facilities, or incharacterizing network connectivity or degree ofintermodal connections). Delivery measuresprovide accountability for programaccomplishment.

Useful characteristics of performance and deliverymeasures are as follows:

� A set of measures should track systemperformance and program delivery in eachmajor program area, and in certain cases byclass or type of asset.

� Performance measures should be related to:

- Policy objectives;

- Physical condition and system performance;and

- User benefits and perceptions of system andservice quality.

� Performance measures collectively should helpexplain reasons for changes in transportationsystem performance, and whether due toprogram investments and agency services or toother factors (e.g., shifts in transportationdemand).Performance measures should reflecttransportation impacts that are an integral partof a performance-based budgeting framework.

� Performance and delivery measures should betracked regularly through inspections,customer surveys, and program status reports,and should be reported regularly to internaland external stakeholders as accomplishments.

� Monitoring of trends over time should helpidentify needed adjustments in policy and/orplanning and programming.

Performance measures are an important element ofmaking an asset management approach work inpractical terms. They provide important linkagesamong the functions shown in Figure 8.9. NCHRPProject 20-60, due to start in 2003, is intended toidentify more specifically how performancemeasures should be selected and applied to meetasset management benchmarks for improvedpractice.



Performance Measures in a StatewideTransportation Plan

Since 1992, the Oregon DOT’s transportation plan hasused a set of performance measures based on earlier workby a citizen’s group. Examples of these performancemeasures are “percent of pavements in fair or bettercondition” and “percent of mileage that experiences low ormoderate congestion during peak hours.” Each update ofthe plan includes a set of specific benchmarks againstwhich the implementation of the plan is measured.Progress toward the benchmark criteria is tracked eachyear using data from the agency’s management systems.12

8.5.3 FEEDBACK MECHANISMS

Figure 8.9 identifies a number of feedbackmechanisms that need to be served by performanceand delivery measures. These feedback loops arepart of the principle of asset management relating toinformed decisions based on objective information.The nature of the information provided by theseveral feedback loops in Figure 8.9 is as follows:

� Feedback to Policy Goals and Objectives.Comparisons of system performance trends toperformance targets provides information onthe impacts of program investments and thedegree to which program objectives have beenattained. They also may identify emergingtrends that need to be accounted for in futurepolicies and investment priorities. Thisinformation can influence future policyformulation and redirect priorities towardemerging needs.

� Feedback to Planning and Programming.System performance monitoring helps toquantify the outcomes of recent investmentdecisions and establish baseline data onsystem usage and performance for futuredecisions. This information may influenceadjustments or updates to projectprioritization criteria. Monitoring and datacollection by an agency also can updateinformation on current asset inventory,condition, and performance, and the cost and

12 Oregon DOT, Oregon Highway Plan,

http://www.odot.state.or.us/tdb/planning/highway, 2002

effectiveness of project treatments and servicedelivery methods for use in futureprogramming and program delivery decisions.Customer surveys can gauge the publicresponse to construction and maintenancework and the impacts of these investments onsystem performance. Customer perceptions ofthe priority of needed improvements andservices, and the quality and timeliness bywhich the DOT accomplishes these efforts, alsocan be assessed.

� Feedback to Program Delivery. Programdelivery monitoring and feedback documentswhether projects and services have beendelivered on time and budget and to therequisite quality. It also can identify problemsthat require remedy.

8.5.4 ROLE OF INFORMATION TECHNOLOGY

System performance and program deliverymeasures ideally should be able to be predicted byyour agency’s management systems or analytictools, as well as be measurable or observable in thefield. This dual capability provides closure in thefollowing aspects of an asset management approach:

� It enables management systems to be usedduring policy formulation to assess the costs ofachieving different levels or targets inperformance, and to inform decisions onrealistic policy objectives and performancetargets.

� It enables the evaluation of alternatives byapplying the same performance measures asthose that will be used to monitor the impactof the completed project.

� It enables management systems and otheranalytic tools to inform planning and priorityprogramming decisions, since these processesneed to be compatible with policy objectives andassociated performance measures and targets.

� It enables management system and otheranalytic support of program tradeoff analyses.

� It enables IT support of program delivery,including examination of “what if” scenariosregarding project and program adjustments.

� In general, it promotes the integration andfullest use of your agency’s considerable



investment in IT with your day-to-daybusiness processes in all of these areas.

8.6 REPORTING ANDDOCUMENTATION

While reporting and documentation are related toinformation and analytic capabilities and are anelement of system performance monitoring andfeedback, they are important enough to warrantadditional emphasis. The audiences forperformance-based information are both externaland internal. Internal audiences include agencymanagers and staff with responsibilities forfunctions or meeting targets related to assetmanagement. External audiences include publicofficials, customers, other stakeholders, and thepublic at large. The scope and detail of reports willvary with the intended audience, but collectively,these reports are an important part of sustaininggood infrastructure management practice within theagency, informing stakeholders and the public as tothe status and direction of infrastructuremanagement, providing the feedback informationneeded for effective updating of policy, planning,and programming, and establishing the basis foraccountability.

Practices in reporting results and providingaccountability are maturing, particularly amongagencies that have adopted performance-basedconcepts in their management approach. Manystates provide reports externally (e.g., annually orquarterly), and several are developing semi-automated internal reports in the form of monthlysummaries and “dashboards” for executive briefingsand decision-making. Examples of “report cards”and other types of status reports for programdelivery are given in Chapter 7, and many of theelements discussed in Chapters 5 and 6 (e.g., policyobjectives, performance targets, prioritizationprocedures, tradeoff analyses, the LRTP, and theSTIP) are potentially the subjects of reports.

One of the key needs identified in asset managementis the strengthening of information and analyticcapabilities to support decisions by executives andother senior managers. One mechanism thatagencies have undertaken in this regard is the use of“dashboards.” Dashboards provide an overview ofkey indicators and potential problems intransportation system performance. They are built

up from the relationship between the strategicobjectives that focus on core business areas and therespective performance measures and targets andtheir organizational “owners.” The indicators thatare tracked may vary from period to period,reflecting executive priorities, and they are usuallyon an “exception” basis, using dials or colors toindicate a problem. They rely on readily measurabledata (e.g., infrastructure condition).

More generally, asset management encourages moreeffective reporting from bottom-up to inform high-level decisions more completely and effectively (e.g.,using what-if capabilities of management systems),and more effective communication of policyobjectives and associated targets from top-down(Figure 2.2). Documentation of key information(whether electronically or in hard copy) establishesan historical record, maintains the time-series datathat are used to establish trends, and provides thefoundation of objective information that is needed toanalyze the consequences of investments, and toidentify fundamental changes in infrastructurecondition, use, performance, or cost over time.Within this context, asset management encouragesthe following considerations when updatinginformation and analytic capabilities to supportmore effective reporting and documentation:

� To update existing analytic systems and tools,and develop of new capabilities, that:

- Incorporate performance measures andperformance targets in decision-supportprocedures and reports, if they do notalready do so;

- Aggregate or “roll up” network informationin a form that is useful to high-levelmanagement decisions; and

- Design reports that clearly indicate theconsequences as well as the cost ofinvestment, and give a sense of the relativestandings of alternatives that have beenconsidered.

� To incorporate more comprehensive andtimely data in reports:

- Comprehensive data to supportidentification and evaluation of alternativesand analysis of tradeoffs; and



- Timely data to be able to collect, compile,and analyze data on the timetable dictatedby executive decision-making.

� To indicate more clearly the basis ofmanagement accountability for results bydelineating the portion of results for which theagency exercises responsibility versus resultsdue to aspects of performance beyond theagency’s control; and

� To provide reports that foster communicationand coordination with other governmentagencies, and that inform other keystakeholders and the public.

9. IMPLEMENTATION


9.1 INTRODUCTION

Previous chapters have built the foundation forunderstanding how asset management can becomepart of your agency’s “way of doing business”:

� Chapter 3 enabled your agency to complete aself-assessment of its current situation.

� Chapter 4 outlined how to develop an assetmanagement strategy.

� Chapters 5 through 8 provided guidance inseveral areas on how asset management canhelp your agency build a stronger focus onresults in resource allocation and utilization.

This chapter looks at some practical aspects of assetmanagement implementation.

� Section 9.2 presents examples of “entrymechanisms” that DOTs have taken to beginunderstanding and getting involved in assetmanagement.

� Section 9.3 looks longer term to sustaining theasset management implementation througheffective leadership and tracking progress.Principles of change management and com-munication are discussed as they relate to assetmanagement implementation.

� Section 9.4 presents concluding thoughts ontransportation asset management.

9.2 EXAMPLE FIRST STEPSSeveral agencies have already taken a proactivestance in asset management. The diversity amongthese efforts reinforces a point made in Chapter 4:there is no single, “correct” approach to gettingstarted. If your agency has not yet begun to thinkabout asset management, or is looking for a entrymechanism by which it can begin getting managersthinking about potential advantages, examples pro-vided in this section may serve as a point of depar-ture for discussions within your agency.

9.2.1 INTERNAL VISION WORKSHOP

Buy-in from all units of the agency is critical to asuccessful asset management effort. A department-wide vision workshop is a mechanism for achieving

this shared view and an understanding of what assetmanagement implementation will mean to eachunit. A vision workshop can provide an opportu-nity for both knowledge-building and team-building. It can be used to define the vision of assetmanagement within an agency, present initial rec-ommendations to representatives from across anagency, and foster discussions across departmentalunits on priority areas and specific improvementsrequired for successful asset management imple-mentation. A vision workshop also may serve as aplatform for bringing parties together to participate inthe self-assessment process described in Chapter 3.

9.2.2 ASSET MANAGEMENT “MARKETING”PACKAGE

Another mechanism for developing buy-in for anasset management initiative is to create and distrib-ute an asset management “marketing” package. Forexample, the Michigan DOT developed a number of“fact sheets” that summarize key asset managementtopics and activities. Individual sheets cover topicssuch as a primer on asset management, descriptionsof key management systems, an overview of theagency’s asset management process, and otherrelated information. Michigan DOT has printedhard copies of these materials and posted them onits web site. The communication package helps toeducate employees and external stakeholders andcreate buy-in for future efforts. This material isavailable on an MDOT web site.1

9.2.3 SUPPORT LEGISLATIVE PROPOSALS

Another approach to getting started is to supportlegislative proposals that will institutionalize assetmanagement in state transportation. This practicecan help establish legislative policies that providecontinuity in long-term implementation, overcomingproblems introduced by leadership turnover.Michigan DOT, working with local agencies andother stakeholders, recently played a pivotal role indrafting and securing passage of such legislation.This state statute calls for the use of asset manage-ment principles and processes for transportationresource allocation decisions statewide. Highlightsof the bill, passed in the summer of 2002, include: 1 www.michigan.gov/mdot/0,1607,7-151-9621_15757---,00.html

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� Establishment of an Asset ManagementCouncil charged with developing a statewideasset management process;

� Requirement that state and local agencies usethis process in developing multi-year pro-grams based on long-range plans; and

� Requirement that all agencies report annuallytheir roadway and bridge inventory, condi-tion, work activities, expenditures, and activi-ties proposed for the following year.

This legislation is available on a state web site.2

9.2.4 PROJECT-LEVEL ASSET MANAGEMENTAS A PROTOTYPE

Utah DOT has taken an incremental approach toasset management implementation. The agency isdeveloping and implementing an asset managementsystem that focuses initially on assets in the newlyreconstructed I-15 Corridor in Salt Lake City. Afterimplementation of the prototype system is reviewed,the agency intends to extend the program statewide.

9.2.5 COMPREHENSIVE ASSETMANAGEMENT PROJECTS AND PLANS

A comprehensive approach to asset managementreviews an agency’s full range of infrastructure assetsand business processes, and often results in animplementation plan as discussed earlier and inChapter 4. Various catalysts may encourage DOTs toconsider comprehensive asset management reviews:

� In 2001 the Vermont legislature passed a billrequiring the Vermont Agency ofTransportation (VTrans) to develop an assetmanagement implementation plan. The legis-lation defined specific items for inclusion in theplan: e.g., asset inventory, condition, deteriora-tion rates, estimation of the long-term fundingnecessary to maintain target performance levels,and so forth. In response to these requirements,VTrans initiated a project to review its currentpractices, processes, and IT tools in the contextof both legislative compliance and the state-of-the-art in asset management. The project

2 www.michiganlegislature.org/documents/2001-2002/billenrolled/house/pdf/2001-HNB-5396.pdf

resulted in a report documenting recommendedsteps for moving forward with the agency’sasset management efforts.

- This legislation is available on a web site.3

- The resulting report, The VTrans AssetManagement Vision and Work Plan, isavailable on a web site.4

� In another state, the impetus for an asset man-agement project was in part the developmentof a data warehouse designed to compileinformation required by GASB 34. With theunderstanding that its new data warehousecould provide information beyond GASB 34and could support more broadly based activi-ties in asset management, the DOT establisheda project to review the current state-of-practicenationwide, identify the agency’s currentbusiness processes and IT capabilities, andrecommend improvements to enhance its assetmanagement practices.

9.2.6 NHI TRAINING COURSE

An FHWA-sponsored National Highway Institute(NHI) Training Course in Transportation AssetManagement has been developed to complement thisGuide. This course provides an opportunity to bringtogether key managers from one or more agencies,review and discuss with them the material in thisGuide, involve them in hands-on exercises demon-strating asset management principles and techniques,and enable them to begin thinking about how toimplement an asset management improvement proc-ess within their respective agencies. Parties interestedin this course should contact the NHI.5

3 www.leg.state.vt.us/docs/2002/acts/act064.htm4 http://www.aot.state.vt.us/lanning/Documents/VTrans%20Asset%20Mgmnt%20VW.pdf

5 The NHI may be contacted at 1-877-558-6873 orthrough its web site, www.nhi.fhwa.dot.gov

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9.3 LOOKING TO THELONG TERM

9.3.1 MAINTAINING A PROPERCOORDINATION ROLE

Regardless of how comprehensive or how tailoredyour agency chooses to implement asset manage-ment, ultimately implementation represents a num-ber of individual efforts in which agency units arecharged with improving their specific practices, useof information from management systems, and deci-sion criteria. Despite this specialized work ofimplementation, it is important that the agency alsomaintain an overall view of the process. Coordina-tion will continue to be needed to ensure that theindividual efforts support overall objectives, andthat they are aligned with one another and withsupport activities.

During implementation, coordination is the keyresponsibility of the asset management “owner” andsupporting committees described in Chapter 4. Afine line must be maintained, however – asset man-agement concepts, principles and techniques need todrive improvement in existing agency functions, but“asset management” itself should not be misunder-stood at the front lines as a separate, new, or com-peting business process. It is the role of the assetmanagement “owner” and supporting committees to“bring asset management home” to each organiza-tional unit affected.

Some agencies that have already dealt with issueslike this have found that by focusing on specificimprovements or tasks with each group – e.g.,developing a life-cycle-cost capability, researchingmethods to analyze preventive maintenance, identi-fying specific policy objectives, updating planningand priority programming processes, defining per-formance measures, strengthening controls on pro-gram delivery, building new information processingcapabilities, and so forth – the process is betterunderstood by the respective units that are respon-sible for carrying out these improvements thanwould be the case if all of the implementation effortswere dealt with solely by the abstract explanation of“asset management.” At the executive level, how-ever, and in the coordination by the asset manage-ment “owner” and committee, the overarchingprinciples of asset management and how they relate

to each business function and organizational unit doneed to be understood.

Additional responsibilities of your agency’s “owner”and implementation committee include trackingimplementation progress, communicating the statusto key stakeholders, and making adjustments in theimplementation plan (objectives, activities, timinginformation, etc.) as needed to address fundamentalpolitical, institutional, and technological changesover the long term.

9.3.2 TRACKING PROGRESS

There are a number of ways to track progress inasset management implementation. A coupleexamples are described below. However, youragency should feel free to tailor these or to defineothers, depending upon the types of improvementsyou envision and the level of detail of your imple-mentation plan.

TRACKING PROGRESS TOWARDIMPLEMENTATION PLAN COMPLETION

One approach is well suited to situations where adetailed implementation plan has been developed,with specific tasks, schedules, and levels of effort.This monitoring approach tracks the completion andlevel of effort of each task against the estimatesdocumented in the implementation plan. It alsoassesses whether the intended coordination betweentasks has been accomplished, accompanied bycommunication between affected organizationalunits. Adjustments in schedule, sequencing of tasks,and mid-course corrections are reflected in periodicupdates to the implementation plan. These updatesare communicated in periodic status reports tointernal and external stakeholders.

TRACKING PROGRESS TOWARD ATTAINING ACAPABILITY

Another approach is to track progress toward adefined business process improvement. This optionmay be useful, for example, where an agency limitsor tailors its asset management effort to a specificfunction or capability, and where achieving this endmay require proceeding in stages. Earlier sections ofthis Guide can help identify what are some appro-priate development stages to track. An example willhelp illustrate this option.

9. Implementation


Assume that an agency wishes to develop the capa-bility to conduct program tradeoffs. The self-assessment exercise (Chapter 3) indicates that theagency has little capability today to conduct trade-offs in the manner suggested by best practice. Rele-vant sections of the Guide that discuss a tradeoffcapability conforming to good asset managementpractice include the following:

� Management Framework. The planning andprogramming management matrix (Table 2.3)includes tradeoffs as part of Item 4: “Resourceallocations and program tradeoffs are based onrelative merit and an understanding of com-parative costs and consequences.” The bestpractices associated with program tradeoffs inthe matrix include a life-cycle analysis of bene-fits and costs and the application of perform-ance measures. Other principles and practicesin the matrix include consistency with pro-gram objectives and basing of program devel-opment on consideration of alternatives.

� Self-Assessment. The planning and pro-gramming portion of the self-assessment exer-cise (Section 3.2.2) includes several suggestionsof specific capabilities relevant to tradeoffs:e.g., knowledge of program objectives andrealistic estimates of program costs, benefits,and performance impacts.

� Descriptions and Examples. Chapter 6 of thisGuide provides descriptions and examples ofprogram tradeoffs and how they can fit into anagency’s resource allocation process.

From this material the agency identifies key ele-ments that it needs for tradeoffs. These include thefollowing:

� A defined set of performance measures thatrelate to policy objectives;

� Life-cycle estimates of costs, benefits, and per-formance impacts associated with differenttypes of investments; and

� Management systems or other analytic toolsthat can compute realistic estimates of cost,benefit, and performance needed above, andthat have the credibility to provide informa-tion that can be incorporated in programdevelopment and tradeoff analyses.

The agency recognizes that these items will taketime to develop fully. It therefore organizes the

development and application of these elementswithin a series of steps that it will undertake in astaged process to develop the capability to do trade-off analyses:

� First it will review performance measures forall key types of program investments, toensure that they are consistent with policyobjectives for those programs, and arepractical and suitable for use in tradeoffs.Trial use will allow for adjustment or additionof further measures if needed.

� Estimates of life-cycle costs and benefits for arange of investment options will be done ini-tially using either the agency’s existing man-agement systems (if these systems already dealin life-cycle analyses of costs, benefits, and per-formance) or simple analytic tools that aredeveloped specifically for particular types ofinvestments where the agency does not nowhave suitable management systems. Thisapproach will allow refinement of methodsrelatively quickly and inexpensively, and willallow managers and staff to get used to theseestimates and suggest refinements whereneeded. Another option is to use availabletools that are well suited to tradeoff analyses:e.g., HERS/ST. Regardless of the option used,estimates of costs and benefits, combined withestimates of performance measures above,provide the economic and technical basis foran initial set of tradeoff analyses.

� A separate management system or analytictool also will be developed to frame and reportthe tradeoff analysis itself – i.e., to automati-cally test different investment scenarios, obtaininformation on cost, benefit, and performancefrom the tools and systems discussed above,conduct the tradeoff analysis between thespecified programs, and report results andrecommendations.

� The agency’s business processes will be modi-fied to include tradeoff analyses, supported byinformation provided by the managementsystems and tools developed above.

This approach defines four stages by which theagency can undertake development of a tradeoffcapability. As it proceeds, it will keep abreast ofongoing research in methods and performancemeasures, and communicate with peer agencieswhat they are doing in tradeoffs. They can explain:

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� What they did;

� How they did it;

� Why they did it that way; and

� How well it works.

Again, this is an example, and you may find that asomewhat different staged approach better meetsyour agency’s needs and situation. The point is thatyou can work with input from the Guide plusknowledge of your agency to chart a path towardasset management improvement, and then monitorprogress in key milestones.

9.3.3 ASSET MANAGEMENT REPRESENTS“CHANGE”

While all DOTs today follow asset managementprinciples to a degree, implementing furtherimprovement in asset management often representsmore than a change in technical procedures. Itrequires a transformation in agency culture basedupon a change in philosophy about institutionalobjectives, the measurement of success, and howagency units relate to one another. The responsi-bilities and authority of existing organizational unitsmay be subject to a re-examination.

Asset management may be perceived by manyagency managers, staff and external stakeholders asthreatening to their sense of competence, independ-ence, status, and even employment. It is thereforeessential that the case for asset management be pre-sented in a manner that generates acceptance andsupport to the maximum extent possible. Buy-in ofthis type can be best achieved through a comprehen-sive change management strategy and an effectivecommunications plan to address the people-relatedaspects of asset management implementation.

CHANGE MANAGEMENT

OVERVIEW

Change management involves engaging individualsand groups to take responsibility for realizing thenew vision of their organization and to develop theirown potential. It is characterized by continuousassessment, actions and communications. Changemanagement may be arrayed across four dimensions:

� Culture – Belief systems regarding personal,professional and organizational values, rolesand relationships, including key external per-ceptions and accountability.

� Cooperation among and within agency units –Functional relationships, reporting hierarchies,independence/dependence among agency units.

� Competencies – The technical capabilitiesneeded at various unit levels participating inasset management.

� Communications – An increase in horizontalcommunications and shared tactical and stra-tegic vision.

OBJECTIVES

The key objectives of the change management strat-egy are to measure and actively build commitmentto the asset management initiative. This workengages those internal and external stakeholdersinvolved in, or affected by, the implementationduring its life by:

� Ensuring a basis for common understandingand coordination around change activities andevents;

� Anticipating, identifying and planning forbehavioral outcomes that are expected ofstakeholders during significant change;

� Inviting stakeholders to participate in thedesign of the change regarding how they willperform their new responsibilities; and

� Building an atmosphere in which change isviewed in a positive way.

A comprehensive change management programconsists of a wide range of activities, including inputto training and skills assessment activities and, mostvisibly, a Communications Plan.

FRAMEWORK

The change management framework relies on two-way communication and the establishment of feed-back mechanisms to promote and monitor theeffectiveness of change activities. A key initialactivity is an assessment of the agency’s readinessfor change. The objective is to assess, at a high level,the degree to which the organization is ready toadopt changes to its business practices. This pro-vides an appreciation of the issues up-front which

9. Implementation


could potentially thwart the successful implementa-tion of asset management. Typical obstacles tochange include a lack of understanding and aware-ness of the asset management initiative, regionalismand partisanship, and skepticism and lack of com-mitment from all organizational levels.

READINESS ASSESSMENT

A readiness assessment provides an analysis thatcan serve as the basis for the design of all otherchange management activities. The analysis deter-mines which activities are best suited to differentaudiences and which strategies are required to miti-gate the resistance to change and other implementa-tion risks. This analysis is particularly useful in thedesign of the communications strategy for assetmanagement implementation.

The analysis identifies the winning strategies/principles that stakeholders believe must be in placefor a successful project. A typical list would includethe following:

� Brand the implementation project to createclear, consistent project identity and awareness;

� Demonstrate and communicate value andshared vision;

� Communicate key milestones;

� Use a number of methods/formats to repeatand reinforce messages;

� Communicate the impact that the project willhave on the individual and the way they dobusiness;

� Quick wins – Show tangible achievementsalong the way;

� Provide a consistent message to the organization;

� Demonstrate senior executive involvement,support and direction – these are crucial;

� Involve operations level personnel, regions –wide consultation;

� Be clear on roles, time lines and deliverables;

� Conduct effective training;

� Promote change management as an agency-wide initiative with no room for individualtailoring;

� Commit to evaluating progress mid-way andadjusting where necessary; and

� Identify credible champions – Enroll managersin delivering messages.

The findings from this activity will identify wherechange management efforts can best be focused toeffect change acceptance, by resolving or mitigatingthe impacts of the issues identified above, and byunderstanding how best to structure the changestrategy.

TYPES OF CHANGE

It is important to understand the types of change,which will occur as a result of asset managementimplementation. The types of change may be cate-gorized as follows:

� Changes in organizational culture, values,beliefs and attitudes (for example, from anindividual-unit to a shared-effort mind-set,from a technical to a business focus, from aregional to a strategic focus).

� Changes in the policies, practices and guide-lines or criteria that govern the way that assetinvestment decisions are made.

� Changes to finance and business planning, andother decision-making functions.

� Introduction of new methodologies, and inte-grated tools and systems.

� Changes to processes (e.g., changes in thesequence, nature and number of activitiesrequired to provide a service). This couldinclude the elimination of some activities, andthe creation of others.

� Changes in reporting relationships, opening orbroadening horizontal lines of communicationand interaction (refer to Figure 2.2).

� Changes in roles and responsibilities, job pro-files/skills, knowledge gaps, resourcerequirements, and delegated authorities.

� Changes in mechanisms and procedures toinstill and report accountability, and use ofperformance-based contracts as a tool tostrengthen accountability.

� Changes to performance targets and measures,and greater ability to report and market these.

9. Implementation


� Changes to program and project justificationreporting.

� Changes to formal program and projectmonitoring and reporting.

COMMUNICATIONS PLAN

A Communications Plan addresses the communica-tion requirements, objectives and the key messagestailored to different stakeholders for the duration ofthe initiative in asset management implementationand associated change management. The plan pre-pares a framework for instituting effective commu-nications about asset management to those peoplewhose acceptance and commitment is needed for asuccessful effort.

ELEMENTS

The Communications Plan should draw upon anassessment of change readiness and a stakeholderanalysis, including the following elements:

� A matrix of stakeholders, events/activities,communication objectives, key messages,appropriate supporting media, timing ofcommunication and feedback channels;

� Common and repeatable themes to be used tosell the initiative; and

� Communication roles identified and assigned.

OBJECTIVES

The objectives of the communications strategyshould include the following:

� Facilitate the change acceptance process;

� Stimulate staff and upper management partici-pation in asset management implementation;

� Clarify intent – What the implementationeffort is and is not, and what impacts to theagency can be anticipated;

� Educate stakeholders on the approach, plan-ning, and asset management content for theimplementation; and

� Provide background on the implementation,and an understanding of asset managementobjectives, benefits, scope, and customer value.

KEY CHARACTERISTICS

To build credibility and understanding for assetmanagement, communications should exhibit thefollowing characteristics:

� Be regular and consistent throughout assetmanagement implementation;

� Be content rich;

� Be expressed in plain language;

� Adopt common terminology, which is consis-tently understood;

� Have consistently applied messaging andvisuals throughout all materials; and

� Have appropriate agency coverage.

TYPES OF MESSAGES

Some common content and methods will apply to allaudiences and key messages, repeated in severalways. Strategies for specific audiences may differ intiming, positioning and tailoring of information.The depth of content communicated will vary,depending on the given audience’s degree ofinvolvement in asset management implementation.

The following message types provide a frameworkfor developing the content included in the differentcommunication events:

� Asset management project objectives, benefits,scope, asset management definition/driversand background – includes communicationabout the project vision, scope, objectives,timeline, benefits and overall impacts to theagency. This information should not be overlytime-specific so that when new team membersor stakeholder groups require communication,the material will require only minor updates.

� Business and technical content – includescommunication events coordinated with theimplementation plan timelines directedtowards stakeholder groups. Content includesdiscussion and demonstration of deliverables,new tools, systems, case studies, training, andso forth.

� Success stories/quick wins – includes sharingsuccess stories about a new solution in theimplementation effort (quick wins), and otheritems that will generate positive employee

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excitement about enhancements to their jobs.Communicating quick wins will demonstratetangible progress in implementation.

9.4 FINAL THOUGHTS

This Guide presents transportation asset manage-ment as a framework within which you can assessyour agency’s current business practices, identifyopportunities for improvement, and develop a com-prehensive implementation plan to fill these gaps.When considering the applicability of this frame-work to your agency, think about the answers to thefollowing questions:

� Can your agency defend not being strategic –not being comprehensive, long-term, policy-driven, performance-based?

� Can it defend not considering options andtradeoffs?

� Can it defend not setting performance goalsand not measuring results?

� Can it defend not being in the strongest posi-tion to justify its requests for resources?

Applying this framework and coordinating subse-quent improvement efforts requires a broad per-spective of an agency’s organizational, institutional,and technological environments. Implementing theessential individual pieces requires “bringing assetmanagement home” to the front lines by focusing onthe responsibilities of individual units and on thespecific benefits of these activities. Eventually, acomprehensive transportation asset managementprogram can be institutionalized throughout anagency as an improved “way of doing business”.Achieving this environment requires strong execu-tive support and a sustained and consistent com-mitment. This Guide provides guidance on the initialsteps required to tailor a systematic asset manage-ment improvement initiative for your agency. Manyof these activities can be performed with theresources that you currently have, and all of themwill help you build momentum for this support.

GLOSSARY

Transporation Asset Management Guide G-1

This section defines key terms and acronyms as usedin this Guide. The objective is to explain these termsin the context of transportation asset management.Some of these terms also may be used in other con-texts and may therefore be applied and interpreteddifferently among state DOTs and other transporta-tion agencies.

AADT – Annual average daily traffic.

AASHTO – Association of American State Highwayand Transportation Officials.

ABC – Activity-based Costing – Method of trackingcosts that accounts for the full costs (direct plus indi-rect) of performing an activity.

ADT – Average daily traffic.

Allocate – (as in “allocate resources”) – To define adistribution of available resources among programs,geographic districts, or other uses of these resources.

Alternatives – Available choices or courses of actionthat can be considered at each stage of resource allo-cation or utilization: e.g., modal or investmentchoices to advance policy goals as considered in long-range planning; methods or work zone strategies tocomplete projects as considered in project develop-ment and construction design; potential allocations offunds among programs considered during programtradeoff analyses; methods to deliver construction ormaintenance services as considered in program deliv-ery; data collection procedures and data processingmethods available to conduct system monitoring.

Application – Software product that performs a usefulfunction or provides information; can be a manage-ment system, database procedure, spreadsheet work-book, automated computation, web-based procedure,etc.

Asset – As used in this Guide: The physical trans-portation infrastructure (e.g., travel way, structures,other features and appurtenances, operations systems,and major elements thereof); more generally, caninclude the full range of resources capable ofproducing value-added for an agency: e.g., humanresources, financial capacity, real estate, corporateinformation, equipment and materials, etc.

Asset management – A strategic approach tomanaging transportation infrastructure, characterized

by the concepts and principles explained in Chapter 2of this Guide.

Benchmarks – Best practices as related to asset man-agement; see “evaluation matrices.”

Benefit/cost – A comparison of the economic benefitof an investment to its cost. The computation shouldaccount for costs and benefits to both the agency andthe transportation users through an appropriate lifecycle. In asset management, benefit/cost can beapplied to prioritization of projects; sums of benefitsand costs for all projects in a program can be used inprogram tradeoffs.

BMS – Bridge management system.

Capital – Type of investment that generally involvesconstruction or major repair; includes the constructionof new assets, reconstruction or replacement of existingassets, structural and functional improvements toexisting assets, and rehabilitation of existing assets.

Condition – Measure of an asset’s physical state asaffected by deterioration and past maintenance andrepair; can be expressed in terms of damage present(e.g., amount or percentage of cracking), an agency-defined or standard scale (e.g., condition states 1through 5; or good, fair, poor); often used in conjunc-tion with “performance” when described in the con-text of performance-based processes.

Corridor approach – An approach to work packagingthat attempts to perform anticipated constructionprojects, scheduled maintenance, and utility work insegments of a transportation corridor at the same timeor in coordination fashion to minimize road closuresand traffic delays.

Data – Raw or partially processed observations,measurements, facts, figures, statistics, records, etc.collected by an agency.

Data integration – Process of sharing data from onesource among multiple applications, or of mergingdata from multiple sources for use by a singleapplication.

DB – Design-Build – Project approach combiningdesign services and construction in one contract.

DBB – Design-Bid-Build – Project approach entailingseparate design and construction contracts, with con-struction award based on the most favorable (generally

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G-2 Transporation Asset Management Guide

the lowest cost) bid; conventional approach to muchtransportation project construction.

Decision – Determination of a course of action orselection of an option from available choices.

Decision support – The use of information (e.g., frommanagement systems, other analytic tools, or esti-mates and studies by staff) to help understand theconsequences of decisions.

Deficiency – Gap between an asset’s current condi-tion/performance and a defined target or thresholdvalue; implies need for work.

DRIP – “data rich, information poor” – Situation inwhich an agency is unable to translate its large quan-tities of data into meaningful information on currentstatus or for decision support.

EIS – Executive Information System – Informationand decision-support application intended for execu-tives, senior managers, and political leaders.

Evaluation matrices – Formulized managementframework that presents asset management evalua-tion criteria, basic characteristics of asset managementbest practice, and state-of-the-art benchmarks; alsoreferred to as “management matrices.”

FMS – Financial Management System.

GASB – Governmental Accounting Standards Board –Professional, non-governmental organization that setsstandards for financial statements for state and localgovernments.

GASB Statement 34 – A compilation of standards forfinancial reporting by state and local governments;notable for new requirement to report financial statusof transportation infrastructure assets.

Geographic equity – Geographic-based funding dis-tributions (e.g., percentage or formula-based splitsamong districts).

GIS – Geographic Information System – A tool toorganize geographically based data, create maps, andperform spatial analyses.

Goals – Desired outcomes, broadly defined, asexpressed in policy.

Impact – Effect or result, as of a project, program,policy, level of investment, or budget.

Improvement – A project or investment that enhancestransportation system functionality; may includecapacity additions or operations enhancements toexisting facilities, or construction of new facilities.

Indirect cost – Cost that cannot be precisely assignedto a given project or activity: e.g., administrativecosts, cost of overall program management, rent onbuildings, training costs, etc.

Information – Processed or refined data in a form thatcommunicates meaningful indications of currentstatus or calculations and predictions useful for deci-sion support.

Integration – Combining of data or results from mul-tiple systems.

Intergovernmental agreements – Agreementsbetween agencies or levels of government to purchaseor exchange services, often with the aim of greaterefficiency and cost-effectiveness.

Inventory – (as in asset inventory) – A compilation ofthe infrastructure assets of an agency, and their rele-vant characteristics: e.g., count or quantity, location,size, functional classification, traffic usage, districtresponsibility, etc.; may include condition or perform-ance data, depending on agency practice.

ISTEA – Intermodal Surface Transportation EfficiencyAct, Public Law 102-240, signed into law inDecember 1991.

IT – Information Technology – General term for anagency’s systems applications and its capabilities inautomated data processing and reporting.

ITS – Intelligent Transportation System.

Life cycle – A length of time that spans the stages ofasset construction, operation, maintenance, rehabili-tation, and reconstruction or disposal/abandonment;when associated with analyses, refers to a length oftime sufficient to span these several stages and tocapture the costs, benefits, and long-term performanceimpacts of different investment options.

LOS – Levels of Service – Measures related to thepublic’s perception of asset condition or of agencyservices; used to express current and target values formaintenance and operations activities.LRS – LinearReferencing System – Protocol for locating features on ahighway system; enables mapping and location of asset

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Transporation Asset Management Guide G-3

condition and performance measures, trafficcharacteristics, crashes, performance of work activities,etc.

LRTP – Long-Range Transportation Plan – Federallymandated, 20-year statewide transportation plan.

Maintenance – Program of activities to enable atransportation system to continue to perform at itsintended level; comprises a range of services in pres-ervation, cleaning, replacing worn or failed compo-nents, periodic or unscheduled repairs and upkeep,motorist services (incident response, hazardous mate-rials response), snow and ice control, and servicing oftraffic devices and aids; does not add to structural oroperational capacity of an existing facility.

Managed competition – Procurement approach inwhich an agency’s existing work force competes withother public-sector or private-sector organizations toprovide specified services (e.g., in maintenance).

Management system – Software application that sup-ports a particular set of an agency’s business processes,whether in managing assets or resources (e.g., pave-ments, bridges, human resources, equipment fleets,materials stockpiles, lands and buildings), performingprescribed functions (e.g., planning, project develop-ment, construction management, maintenance manage-ment), recording and managing transactions (e.g.,financial management and accounting, payroll), or proc-essing and communicating information (e.g., executiveinformation, customer comments and complaints).

MMS – Maintenance management system.

Monitoring – Collecting and processing conditionand performance data and related data (e.g., trafficusage) to understand the current status of the trans-portation system, identify problem areas, gaugeimprovements resulting from investments, and trackprogress toward performance targets; provides afeedback mechanism for resource allocation and utili-zation decisions.

MPO – Metropolitan Planning Organization.

NBI – National Bridge Inspection – A program man-dated by the Code of Federal Regulations to conductsafety inspections of bridges according to specifiedstandards at least every two years.

NCHRP – National Cooperative Highway ResearchProgram.

Need – Work required to help attain a policy objectiveor performance target, or to address a problem ordeficiency.

Network – System of assets to provide transportationservices to customers.

Objective – Translation of a policy goal into a morespecific measure of attainment: e.g., a policy goal ofimproved pavement performance might be expressedthrough an objective of improved serviceability orride quality, or reduced roughness; a policy goal ofimproved mobility might be expressed through anobjective of reduced travel time or total trip time, per-centage increase in user benefits, or improvement incongestion measures or indexes.

Operations, operational improvements – Investmentsand activities to improve the efficiency and safety oftraffic movement on the existing transportation sys-tem (e.g., through improved signal timing, installationof variable message signs and other ITS devices,improved traffic monitoring and reporting of problemlocations, traffic metering).

Optimal – The preferred or best option based on somecriterion.

Options – See alternatives.

Outcome – Result or consequence (especially in termsof performance), as of an investment decision, a par-ticular allocation of resources, completion of a project,conduct of maintenance at a particular level of service,or selection of a particular alternative.

Performance – Characteristic of an asset that reflectsits functionality or its serviceability as perceived bytransportation users; often related to condition.

Performance measure – An indicator, preferablyquantitative, of service provided by the transportationsystem to users; the service may be gauged in severalways (e.g., quality of ride, efficiency and safety of traf-fic movements, services at rest areas, quality of systemcondition, etc.).

Performance target – Threshold value of a perform-ance measure that an agency will strive to achieve tosatisfy a policy objective.

PMS – Pavement management system.

Preservation – Actions to deter or correct deteriora-tion of an asset to extend its useful life; does not entail

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G-4 Transporation Asset Management Guide

structural or operational improvement of an existingasset beyond its originally designed strength orcapacity.

Preventive maintenance – Proactive maintenanceapproach that is applied while the asset is still in goodcondition; extends asset life by preventing the onset orgrowth (propagation) of distress.

Program – A set of projects of similar type of work(e.g., pavement rehabilitation) or serving a similarobjective (e.g., to improve mobility or safety).

Project – Construction work to address a need or defi-ciency in system preservation, improvement, oroperations.

Project prioritization – Process of comparing costs,benefits, and other performance impacts among peerprojects to rank them by merit.

Rehabilitation – Project to perform comprehensivestructural repair or capacity, operations, or safetyimprovements to an existing asset.

Resource – An input to the construction, operation,maintenance, repair, renewal, or disposal of trans-portation infrastructure assets; provides value-addedto these processes; may include labor knowledge andskills, financial capacity, real estate, corporate infor-mation, equipment and materials.

Scenario analysis – Analytic study of the conse-quences of different actions or assumptions; in assetmanagement, often refers to predictions of asset con-dition and performance for different budget or reve-nue assumptions, levels of investment, or sets ofpolicies (the “scenarios”); a capability of modern PMS,BMS, and MMS.

STIP – Statewide Transportation ImprovementProgram.

Strategic – A view of assets that is policy-based,performance-driven, long-term, and comprehensive.

TEA-21 – Transportation Equity Act for the 21st

Century, Public Law 105-178, signed into law inJune 1998.

Tradeoffs – Comparisons between alternative solu-tions, particularly involving consequences of reallo-cating funds between programs.

TRB – Transportation Research Board.

User benefits – Economic gains to transportationusers resulting from a project or investment strategy;may include monetary value of travel time savings,accident reductions, reduced costs of vehicle opera-tion, and savings or advantages gained from morereliable transportation services (e.g., regarding trans-portation of goods).

Utilization – As in resource utilization: process ofapplying labor, financial, information, and otherresources to implement projects and services for thetransportation system.

“What-if” analysis – See scenario analysis.