An Industry Perspective to Improve the Life Cycle Cost Analysis Procedure Used for Pavement Type Selection a Case Study for Alabama

At the request of the cement and concrete industry, in 2012 the Alabama Department of Transportation (ALDOT) funded Auburn University and the University of Alabama to recommend updates to ALDOT’s Life Cycle Cost Analysis (LCCA) methods for comparing asphalt and concrete paving alternatives. Auburn was asked to address LCCA from the point of view of the asphalt paving industry, and the University of Alabama was asked to address LCCA from the point of view of the concrete paving industry. While the mechanics of performing a life cycle cost analysis are not complicated, there are many aspects dealing with the assumptions used in the LCCA procedures that can have a dramatic impact on the LCCA results. This paper presents the information and the recommendations made by the concrete industry for improving ALDOT’s LCCA procedures, as well as comparisons to the asphalt industry recommendations in the following areas. These areas were considered to have strong effects on the risk, costs, and performance of competing asphalt and concrete pavement alternatives: • Trigger value for doing a LCCA • Analysis periods • Performance periods / Rehabilitation selection timing • Discount rate • Accounting for Price Adjustment Clauses (PACs) for initial construction costs • Accounting for Material Specific Inflation Rates (aka “real price changes”) in future rehabilitation costs • Salvage value