Transportation Asset Management

1. Transportation Asset Management assetmanagement.transportation.org (Transportation Asset Management Guide)

2. Principles of Asset Management • Asset management entails • A strategic view • A set of processes • A set of technical tools

3. Strategic View • Policy based – options and consequences are considered in terms of consistency with adopted goals and objectives • Performance driven – options and consequences are considered in terms of ability to achieve desired outcomes • Comprehensive– looking at all facets of a problem, and considering options and consequences • Long term – over an extended time period (e.g., over the life cycle of an asset)

4. Benefits of Asset Management • Systematic approach to defining needs and options • Improved use of available resources • Improved credibility and accountability for decisions • Improved performance and service to customers • Flexibility to make decisions based on performance • Improved communication and collaboration within agency

5. “From Front Office to the Front Lines” Strategic Information Stakeholders Agency Executives District / Division Managers Section / Group Managers Tactical Information Agency Central Office and Field Staff Coordination Across Agency Units

6. State DOTs are Unique • No single, “correct” approach to asset management • But there are useful perspectives for all agencies • Improvement can begin today with existing staff and resources • Agencies now doing “good asset management”can improve • Organizational and institutional factors pose biggest challenges

7. Asset Management Framework (Resource Allocation and Utilization Process) Policy Goals and Objectives Planning and Programming Quality Information and Analysis Program Delivery Systems Monitoring and Performance Results

8. Asset Management Framework (Resource Allocation and Utilization Process) Policy Goals and Objectives System Performance Economic Social/Environment Integrated Analysis of Options and Tradeoffs Asset Classes Highways Bridge Transit Water … Objectives System Preservation New Capacity Operating Efficiency Safety Types of Investments Capital Operating Maintenance Quality Information Resource Allocation Decisions, Investment Choices Financial Human Information Implementation - Program Delivery Agency, Inter-governmental Public/Private Partnership Outsource - Privatize Systems Monitoring and Performance Results

9. Applying the Framework • Asset management is adaptable to different agency situations • Organizational structure • Management culture • Funding environment • Technological capability • Fundamentals of asset management – generally applicable to all agencies • Implementing asset management – customization and tailoring to be expected

10. Self-Assessment Objectives • Develop consensus among managers on status of asset management • Identify asset management • Strengths • Weaknesses • Constraints • Opportunities for improvement • Develop priorities and identify critical areas • Foundation for asset management improvement strategy

11. Self-Assessment Overview • Quick diagnostic tool • Gain an overall impression, not a precise analytic measure • Results will reflect agency’s environment • Institutional • Organizational • Financial • IT • Not a meaningful basis for state-to-state comparisons

12. Policy Goals and Objectives Policy Goals and Objectives Planning and Programming Quality Information and Analysis Program Delivery System Monitoring and Performance Results

13. Policy Goals and ObjectivesCharacteristics of Good Practice • Goals and objectives reflect a comprehensive, long-term view of asset performance and cost • Call for good stewardship of assets • Policies reflect a performance-driven approach to resource allocation • Agency proactively helps formulate asset management policy

14. Example from “Policy Goals and Objectives” Matrix 1. Goals and objectives reflect a comprehensive, long-term view of asset performance and cost State-of-the-Art Criteria Defined goals and objectives Goals and objectives are comprehensive, integrated with other policies, and supported by performance measures Asset management is catalyst for decision and action Asset management principles are clearly articulated and recognized as driving force for resource allocation Life-cycle perspective Goals and objectives embody life-cycle economic analyses and encourage strategies with long-term benefits

15. Asset Management Improves Policy-Making • Broaden thinking about potential transportation solutions • Relate policy statements to performance objectives • Embody more analytic, objective information in policy-making • Connect “policy” to “process”

16. Example: Pavement Preservation • Policy goal • Preserve pavement condition and performance • One of several policy objectives • Provide users with a smoother ride • Performance measures that align with objective • Measures of pavement ride quality or serviceability • Performance target • Increase percent of pavement in good condition with respect to ride quality from 75% to 85% by the year 2005

17. Proactive Role in Policy Formulation (External) • Agencies should engage Legislature, Commission or Board, Governor’s office, and other stakeholders • Have an impact on external bodies that shape policies • Frame and inform policy options • Focus policy makersand elected officials on key policy choices • Maintain the policy-based context • Reinforce accountability through information dissemination

18. Proactive Role in Policy Formulation (Internal) • Include all internal stakeholders in policy development process • Units responsible for achieving performance objectives need to understand and support those objectives • Involvement in policy-making process can encourage broader thinking about range of solutions available

19. Planning and Programming Policy Goals and Objectives Planning and Programming Quality Information and Analysis Program Delivery System Monitoring and Performance Results

20. Planning and ProgrammingCharacteristics of Good Practice 1. Planning and programming procedures are consistent and reinforce goals and objectives 2. Agency considers a range of alternatives for addressing system deficiencies 3. Performance-based concepts guide planning, programming, and monitoring 4. Tradeoffs are based on relative merit and understanding of comparative costs and consequences

21. Example from “Planning and Programming” Matrix 3. Performance-based concepts guide planning, programming, and monitoring Criteria State-of-the-Art Recommended program budgets relate costs to levels of service or performance measures Performance-based budgeting Benchmark achievement Planning and programming processes identify resources required to maintain existing assets at target performance levels and least life-cycle cost System monitoring Reporting System monitoring helps quantify impacts of program decisions and provides feedback for future planning and programming Progress toward performance targets is measured and reported regularly

22. Long-Range Planning and Needs Identification • Various documents produced by Planning • Policy-based or project-based plans • Corridor studies • Major project studies • All can reflect good asset management practice • Incorporate best practices within existing long-range planning procedures

23. Example Technique Used in Planning • Colorado DOT’s Program Investment Category Structure • Relates transportation programs to major policy goals • Includes capital and maintenance and operations programs • Performance measures are defined for each Program Investment Category • Can be used by CDOT and CO Transportation Commission in planning, programming, tradeoff analysis, and resource allocation

24. Example Investment Category Framework INVESTMENT CATEGORIES Strategic Projects System Quality(preservation) Goals, Objectives, and Performance Measures Analysis of Options Within and Between Categories Safety(sign and striping activities ) Mobility(snow removal) Program Delivery Source: Colorado DOT

25. Example Budget-Performance Relationships Infrastructure Condition Annual Preservation Budget Mobility Improvement Annual Mobility Budget

26. Best Practices in Capital Programming • Programming methods and criteria reflect policy objectives • Consideration of full range of alternatives • Consideration of economic principles and other factors (environmental protection, intermodal service, etc.) • Realistic project scope, cost, and schedule • Program tradeoff analyses • Supported by analytical tools and data

27. Projects and Programs • Different levels of analysis and tradeoffs • Project prioritization • Program tradeoffs • Full range of alternatives evaluated based on merit at each level • Project and program-level consideration interact during program building • Incorporate best practices within existing procedures: • State Transportation Improvement Program (STIP) • Program budget recommendation

28. Program Tradeoffs • Before finalizing program funding targets, consider alternatives across programs • Objective – what are performance impacts of shifting funds from one program to another? • Same analysis can be applied for evaluating increases or decreases in total funding levels

29. $A $B Infrastructure Condition 0 1 2 3 4 5 6 7 8 9 10 Time $B $A Mobility Improvement 0 1 2 3 4 5 6 7 8 9 10 Time Tradeoffs in Program Funding Alternatives

30. Example Tradeoff Analysis Proposed Preservation Funding and Resulting Performance Proposed Mobility Funding and Resulting Performance Stages ofTradeoff Analysis Baseline 200 million80% of facilities rated Good $500 million10% reduction in travel time costs First Tradeoff Iteration ($200M less $15M) =$185 million77% of facilities rated Good ($500M plus $15M) =$515 million11% reduction in travel time costs Second Tradeoff Iteration (opposite direction) ($200M plus $15M) =$215 million82% of facilities rated Good ($500M less $15M) =$485 million8% reduction in travel time costs

31. Best Practices in Maintenance Programming • Knowledge of system condition • Alternative strategies • Application of maintenance Levels of Service (LOS) • LOS values reflect policy goals and objectives, customer perspectives, and available resources • Performance-based maintenance programs tied to LOS • Performance outcomes are measured, reported, analyzed as input to future strategies, tradeoffs, and programs

32. Program Delivery Policy Goals and Objectives Planning and Programming Quality Information and Analysis Program Delivery System Monitoring and Performance Results

33. Program DeliveryCharacteristics of Good Practice • Agency considers all available delivery methods • Agency tracks program outputs and outcomes • Agency reports program delivery accomplishments • Approved program is delivered efficiently and effectively

34. Example from “Program Delivery” Matrix 4. The approved program is delivered efficiently and effectively State-of-the-Art Criteria Delivery measures Measures are defined and tracked to gauge successful program delivery in scope, cost, and schedule Project and program adjustments The agency has a process to review and approve project changes and resulting program adjustments

35. Program Delivery • Program delivery includes managing implementation of: • Capital programs • Maintenance • Operations • Entails a “resource utilization” aspect of asset management

36. Program Delivery Objectives • Adherence to schedule • Control of scope • Keeping costs within budgets • Improving cost estimation • Achieving desired quality • Optimizing in-house versus outsourcing

37. Program DeliveryAsset Management Approach • Programs and budgets are communicated and followed • Systems are in place for controlling scopes, costs, and schedules • Alternative program and project deliveryoptions are considered and used • “Corridor” approach to preservation projects is considered • Efficiency and effectiveness of delivery systems are measured and reported

38. Intergovernmental Agreements • “Win-win” agreements between state and local agencies • Advantages • Cost savings • Elimination of duplicate efforts • Increased services • Example – Pennsylvania DOT’s Agility Program • 1,500 local partners • Estimated savings of $7.7Min first four years

39. Highway 30 Project in Quebec • Public-Private Partnership (PPP) • Design, realization, maintenance, exploitation and finance of the west part

40. Objectifs of PPP • Accelerate the realization of projects • Minimize the financial contribution of the government • Transfer risks to the private sector • Encourage innovation • Maximize the benefits for the public

41. Options in Outsourcing Preservation / Maintenance Services • Multi-Function vs. Activity-Based • Route Basis vs. Area Basis • Lump-Sum, Performance-Based vs. Traditional Unit Price • Routine Maintenance vs. Total Preservation • Low Bid vs. Best Buy • Winter Weather & Emergency Response – Included vs. NOT Included

42. Managed Competition • In-house staff competes with private sector • Challenge to maintain level playing field • Separating agency as bidder from agency as owner • Computing actual “in-house” cost • Performance or cost guarantees • Example – Iowa DOT paint striping and sign manufacturing • Example – Massachusettsstatewide maintenance

43. Corridor Approaches • Objective – “get in, get out, and stay out” • Maintenance projects • Perform all anticipated near-term repair and utility work to avoid multiple road closures and impacts to users • Capital projects • Package small projects into largercorridor projects (California and Michigan DOTs ) • Important to coordinate with local agencies

44. Information and Analysis Policy Goals and Objectives Planning and Programming Quality Information and Analysis Program Delivery System Monitoring and Performance Results

45. Information and AnalysisCharacteristics of Good Practice • Agency maintenance high-quality information needed to support asset management • Agency collects and updates data cost-effectively • Information is automated and on accessible platforms • Effective decision-support tools are available • Financial value of assets is known

46. Example from “Information and Analysis” Matrix 1. Agency maintains high-quality information needed to support asset management Criteria State-of-the-Art Agency maintains complete, current, and accurate inventory of assets Asset inventory Asset condition Condition data are updated periodically to meet regulatory requirements and provide timely and accurate information to decision-makers Customer perception Data on customer perception of asset condition and agency performance are updated regularly Program outputs Information on actual cost and accomplishment is tracked to be able to improve cost estimation

47. Information Systems Requirements • Current asset condition and performance • Projected asset condition and performance • Cost estimation and reporting • Needs identification • Project, program, and network-level evaluation of proposed work • Program delivery support

48. Percent of Bridges With HI >75 % 100 High Expenditures, Increase Over Status Quo 80 ModerateExpenditures, Maintain Status Quo 60 40 No AdditionalExpenditures,Do Nothing Policy 20 0 0 1 2 3 4 5 6 7 8 9 10 Time (Years) ExampleExisting “Scenario Testing” Capabilities

49. Percent of Bridges With HI > 75 % in 10 Years 100 80 60 40 20 0 0 5 10 15 20 25 Relative Budget, $Millions/Year Derived Relationship Performance Versus Budget

50. Key IT Challenges • Make best use of scarce data and IT resources • Ensure data consistency • Avoid “data rich, information poor”(DRIP) • Ensure credibility of system outputs • Move toward common geo-referencing (GIS) • Integrate data and systems with decisions (DSS) • Ensure resources are used by all decision-makers