Life cycle costing

Comparison method promotes concretes long-term benefits

By Rosalie Johnston

As a concrete pro d u c e r,
having planners and commis- Table 1. Total cost comparison
sioners familiar with life cycle
cost analysis will benefit your of concrete and asphalt pavements
business. Although many plan-
ners know about concre t e s Concrete Asphalt
s t rengths, they often fail to
look at the long-term cost and Initial cost $195,000 $180,000
maintenance savings that re- Joint repairresealing and replacement 21,500
sult when concrete is selected.
By promoting this re a l i s t i c , Grinding at 25 years 29,000
thorough method of life cycle 1st resurfacing at 15 years
cost analysis to those with the (mill and recycle 4 inches) 96,000
power to specify pavement
2nd resurfacing at 25 years
material, you both educate (mill and recycle 6 inches) 143,000
and convince these specifiers
of concretes value. Cracksealing (4 times) 12,000

How it works Total cost35 years $245,000 $431,000

Life cycle cost analysis com-
p a res asphalt and concre t e
considering not only the initial
cost, but also the length of ser-
vice life and maintenance costs.
Even when the principle of dis-
counting future maintenance
costs through present worth is
used, concrete still is shown to
be the more efficient choice.
When comparing two prod-
ucts by cost, the assumption
exists that the two pro d u c t s
a re equal. In the case of as-
phalt and concrete this is not
t rue. Because the two pave-
ments do not offer the same
benefits, to compare them as
equals is misleading. While as-
phalt offers a lower initial
price, concrete offers valuable
qualities such as better riding
surface, skid resistance, night-
time visibility, and durability.
F u rt h e rm o re, the practice
of specifying on the basis of
initial cost alone is flawed, be-
cause it does not take into ac-
count future costs that will oc-
cur during the life of the
pavement. Pavement serv i c e
life, maintenance costs, and
initial cost are equally impor-
tant factors to be considered
in total surface cost. S e rv i c e
life is described as the age at
which ridability is poor and
resurfacing is needed. For con-
crete this can often be as long
as 35 years, or one to two
times longer than the service
life of asphalt.
Maintenance costs include
routine work necessary for the
p a v e m e n t s upkeep. Mainte-
Table 2. Comparison of actual
and discounted maintenance costs
Age of Actual DOT maintenance
pavement expenditure
10 years $100,000
20 years 100,000
30 years 100,000
nance costs for asphalt are
much greater than those for
concrete, which consist only of
joint sealing and re p a i r. As-
phalts maintenance involves at
least two resurfacings, pothole
repair, and crackfilling. After re-
viewing the amount of future
costs involved in pavement, it
becomes evident that cost com-
parison that relies solely on ini-
tial cost is far from accurate.
Table 1 depicts a 35-year
life for asphalt and concrete.
Present worth discounted
value for project estimate
(4.5 % real int.)
$64,000
41,000
27,000
Present worth
considerations
The case of life cycle cost
analysis is weakened slightly
when present wor th is in-
volved. The present worth the-
o ry is not valid for selecting
pavements. Present worth in-
volves discounting future costs
by the estimated real interest
rate that an investment would
make until the money is need-
ed. State departments of trans-
portation do not handle their
finances the way investors or
corporations do. When a DOT
p re p a res a budget it does not
have the luxury to invest spe-
cific funds that will accrue in-
terest until required for future
maintenance. Instead, the spe-
cific amount listed in the bud-
get is the amount that can be
guaranteed for future repairs.
Table 2 demonstrates how the
p resent worth theory, in re-
g a rds to pavement budgets,
leads to an understatement of
necessary funds.
How to change
standards
Despite that some state
DOTs use life cycle cost analy-
sis, the civil engineering pro-
fession has a long way to go
b e f o re design standards and
construction specifications re-
flect this more cost-eff e c t i v e
a p p roach. The power to
change pro c e d u res of state
DOTs and municipal transit de-
p a rtments usually is held by
AASHTO (American Associa-
tion of Stat e Highwa y and
Transportation Officials) and
U S D O T. These org a n i z a t i o n s
often do not have the support
of government to pro m o t e
measures that in the short run
would require more money for
both research and higher ini-
tial costs of projects. Elected
o fficials often prefer these
agencies to operate in the
same short term that they do.
As a result, voters may be tem-
porarily pleased with the low-
er annual budgets, but the
c o u n t ry suffers in the future
when early structure replace-
ment is needed.
Brochure explains
benefits
A four-page brochure, coor-
dinated by the Portland Ce-
ment Association, the Ameri-
can Concret e Pavement
Association, and the National
Ready Mixed Concrete Associ-
ation (NRMCA), contrasts the
quality and costs of asphalt
and concrete by cleverly de-
picting the taxpayers interests
as piggy banks traveling down
two very different roads. This
b ro c h u re promotes the con-
cept of life-cycle costing to city
and county officials, and other
planning commissioners. A
convincing marketing tool, this
pamphlet points to the long-
term benefits achieved when a
planner uses life-cycle costing
and selects concrete. Copies of
this brochure are available for
$1.50 each and can be ordered
by writing or calling Lorn a
Burns, NRMCA, 900 Spring St.,
Silver Spring, MD 20910, (301-
587-1400; fax: 301.585.4219).
References
1. David Novick, The Impor -
tance of Life Cycle Design for
New and Rehabilitated Infra -
structure, Concrete Pipe News,
February 1992, pp. 8-12.
2. E. Goeb, Pavement cost
comparisons, Aberdeens Con-
crete Construction, May 1986,
pp. 463-468.
3. Kimberly L. Ahern, Concrete
Vs. Asph alt Life- Cy cl e C ost
Analysis Of A Parking Lot, Na-
tional Ready Mixed Concrete As-
sociations Promotion Pointers,
October 1992.
PUBLICATION #J930714
Copyright 1993
The Aberdeen Group
All rights reserved