5.3 Examples

5.3 Examples

The following are hypothetical examples illustrating application of the steps described in Section 5.2.

Example 5-1. Identification of Treatments

A highway agency needs to calculate asset value for pavements and bridges to support development of its TAMP. The agency is interested in exploring two different approaches to asset valuation, both of which utilize replacement cost for the calculation of initial value: a simplified approach in which only asset construction/reconstruction is considered in the calculation, and a more comprehensive approach that more accurately reflects the impacts of rehabilitation and preservation treatments on asset value.

The agency starts by reviewing different pavement and bridge treatments performed by the agency. This process is complicated by the fact that different terms are used for describing asset treatments in different systems. The agency reviews existing TAMPs to determine how different treatments have been represented by other agencies. Table 5-2 provides an example of the mapping of different treatments between pavements and bridges based on data presented in the Louisiana Department of Transportation Development (LADOTD) TAMP (34). The table shows, for pavements and bridges, the five work categories described by FHWA in its TAMP requirements, corresponding work types used when reporting data for federally-funded projects in the FHWA Financial Management Information System (FMIS), and the treatments actually considered by the agency’s asset managers. As shown in the table, for any one of the FHWA work categories there may be between zero and four corresponding different work types in FMIS. The work types in FMIS may map to a number of different specific treatments.

Table 5-2. Example Mapping of FHWA Work Categories, FMIS Work Types and Agency Treatments

FHWA Work CategoryFHMIS Work TypesTAM Treatments
Initial Construction01-New Construction RoadwayNew Roadway Construction
MaintenanceN/ASeal Joints and Cracks
Polymer Surface Treatment
Preservation05-4R Maintenance ResurfacingMicrosurfacing
Thin Overlay
Medium Overlay
In Place Stabilization
Rehabilitation06-4R Maintenance Restoration/RehabilitationStructural Overlay
Minor Rehab
Major Rehab
Reconstruction03-4R Reconstruction - Added Capacity
04-4R Reconstruction - No Added Capacity
07-4R Relocation
Unbonded Concrete Overlay
Initial Construction08-Bridge New ConstructionBridge New Construction
Preservation40-Special Bridge
47-Bridge Preventative Maintenance
48-Bridge Protection
59-Bridge Deck Resurfacing
Scour Mitigation
Cleaning, Refurbishing or Replacing Service Elements
Rehabilitation13-Bridge Rehabilitation - Added Capacity
14-Bridge Rehabilitation - No Added Capacity
Paint with Major Structural Steel Repairs
Scour Mitigation with Major Substructure or Other Major Bridge Work
Reconstruction10-Bridge Replacement - Added Capacity
11-Bridge Replacement - No Added Capacity
Remove Existing Structure
Replace Existing Structure

All of the specific agency treatments listed in the table could conceivably be included in the asset valuation calculation. Adding treatments supports a more detailed and potentially more accurate calculation of how asset value varies over time, but entails quantifying more data.

Table 5-3 shows the results of the agency’s assessment, indicating which treatments the agency will include in the asset value calculation using each approach. For the comprehensive approach the agency elects to include a number of additional treatments, given these improve asset condition and result in shortening asset life if needed treatments are not performed.

Table 5-3. Treatments Included Using Simplified and Comprehensive Approaches

TreatmentInclude in Value CalculationNotes
OverlayNoYesIncludes thin and medium overlays
Other Maintenance and PreservationNoNoIncludes crack sealing, surface treatment, and microsurfacing
RehabilitationNoYesIncludes structural overlay, minor rehab and major rehab
Deck RepairNoYes
Other Maintenance and PreservationNoNoIncludes cleaning, element repairs, spot painting, and deck protection
Deck ReplacementNoYes
Superstructure RehabilitationNoYesIncludes paint replacement and major steel repairs
Substructure RehabilitationNoYes

Example 5-2. Treatment Effects

The agency described in Example 5-1 next quantifies the cost and effects of the different treatments. The agency uses treatment costs from its management system, together with a separate assessment of the cost of initial construction of a pavement or bridge performed as described in Chapter 4.

Treatment effects are established based on a combination of expert judgement and parameters from the agency’s management systems. Table 5-4 shows the resulting assumptions concerning treatment effects. For pavement, treatment effects are expressed in terms of a treatment’s impact on Pavement Condition Index (PCI). This is an agency-specific measure of pavement condition expressed on a scale from 0 to 100. Pavement treatments have the effect of resetting pavement age and returning PCI to 100, setting PCI to a specific value, or increasing PCI by a specified amount.

For bridges treatment effectives are expressed in terms of a treatment’s impact on the deck, superstructure, and/or substructure ratings defined in the NBI. These are expressed on a 0 to 9 scale, with 9 representing the best condition obtained for a new bridge. Bridge treatments have the effect of resetting age and returning all ratings to 9, or setting one or more ratings to a specific value.

Table 5-4. Example Treatment Effects

TreatmentTreatment Effect
ConstructionAge = 0, PCI = 100Age = 0, PCI = 100
OverlayNonePCI increases by 10
RehabilitationNonePCI set to 90
ReconstructionAge = 0, PCI = 100Age = 0, PCI = 100
ConstructionAge = 0,
Deck/Super/Sub Ratings = 9
Age = 0,
Deck/Super/Sub Ratings = 9
Deck RepairNoneDeck Rating = 6
Deck ReplacementNoneDeck Rating = 7
Superstructure RehabilitationNoneSuperstructure Rating = 7
Substructure RehabilitationNoneSubstructure Rating = 7
RehabilitationNoneDeck/Super/Sub Ratings = 7
ReplacementAge = 0,
Deck/Super/Sub Ratings = 9
Age = 0,
Deck/Super/Sub Ratings = 9

Based on the assessment of treatment effects, the agency establishes that with the more comprehensive approach it would be necessary to represent bridges at a component level, modeling the deck, superstructure and substructure of a bridge separately, given that several of the treatments have an impact on only one component.

Example 5-3. Useful Life

The agency described in the previous example seeks to establish useful lives for bridges for the simplified and comprehensive cases outlined in the previous examples. The agency uses NCHRP Report 713 (18) for guidance. Following the approach described in this report, the agency first defines end-of-life criteria for its bridge components. The agency’s bridge managers recommend that when a deck, superstructure or substructure deteriorates to a rating of 5 on the 9-point NBI scale (classified as fair condition) the component has reached the end of its useful life, given the agency typically schedules rehabilitation work at this point to prevent the bridge from deteriorating into poor condition. Note that if the end of life was defined as the point when replacement of the bridge is required, then a lower rating value would be used as the definition for end-of-life. The agency uses the national defaults in Appendix B of Report 713 to estimate the time required for bridge components to deteriorate to a value of 5. These were developed using NBI data and implicitly include effects from routine maintenance. The national estimates in the report are:

  • Deck – 42 years
  • Superstructure – 48 years
  • Substructure – 45 years

These values are used for the comprehensive case described in the above examples, in which bridges are represented at a component level, and rehabilitation treatments are included in the analysis.

For the simplified analysis the agency performs a separate analysis to determine a useful life for bridges assuming that maintenance, repair and rehabilitation work is performed consistent with the agency’s lifecycle policy. The agency reviews data on recent projects to establish a typical life, omitting projects where replacement was triggered by an external factor (e.g., the bridge crossed a roadway that was being widened to increase capacity). The agency compares this to the NCHRP Report 713 values for the time for component ratings to reach a value of 3, a point at which the agency would schedule replacement of a bridge. These are as follows:

  • Deck – 79 years
  • Superstructure – 83 years
  • Substructure – 78 years

Based on review of agency data and other sources the agency establishes a useful life of 75 years for a bridge for the simplified case in which maintenance, repair and rehabilitation treatments are assumed to occur in a timely fashion over a bridge’s life.

Example 5-4. Residual Value

A transit agency seeks to calculate residual value for its vehicles, facilities, track and equipment. Based on the guidance in Section 5-2, the agency calculates residual value for selected assets as shown in Table 5-5.

Table 5-5. Example Approaches for Calculating Residual Value for Transit Assets

Asset ClassSubclassCalculation ApproachNotes
VehiclesBusesResale or auction valueFeasible when vehicles are auctioned or sold at the end of their useful life
Rail VehiclesScrap valueAssumes asset is used until it is scrapped
FacilitiesAdministrative/Maintenance FacilityDifference between construction and rehabilitation costComplex assets that are rarely completely reconstructed
Passenger Facility
Power0Typically obsolete when replaced – minimal resale or scrap value
EquipmentService VehiclesResale or auction valueFeasible when vehicles are auctioned or sold at the end of their useful life
Other EquipmentScrap ValueAssumes asset is used until it is scrapped