Resource Allocation Logic Framework to Meet Highway Asset Preservation (2012)

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N A T I O N A L C O O P E R A T I V E H I G H W A Y R E S E A R C H P R O G R A M NCHRP REPORT 736 Resource Allocation Logic Framework to Meet Highway Asset Preservation John Wiegmann Balaji Yelchuru Booz Allen HAmilton McLean, VA Subscriber Categories Administration and Management • Highways • Maintenance and Preservation TRANSPORTAT ION RESEARCH BOARD WASHINGTON, D.C. 2012 www.TRB.org Research sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration

NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed research provides the most effective approach to the solution of many problems facing highway administrators and engineers. Often, highway problems are of local interest and can best be studied by highway departments individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation develops increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of cooperative research. In recognition of these needs, the highway administrators of the American Association of State Highway and Transportation Officials initiated in 1962 an objective national highway research program employing modern scientific techniques. This program is supported on a continuing basis by funds from participating member states of the Association and it receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board of the National Academies was requested by the Association to administer the research program because of the Board’s recognized objectivity and understanding of modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; it possesses avenues of communications and cooperation with federal, state and local governmental agencies, universities, and industry; its relationship to the National Research Council is an insurance of objectivity; it maintains a full-time research correlation staff of specialists in highway transportation matters to bring the findings of research directly to those who are in a position to use them. The program is developed on the basis of research needs identified by chief administrators of the highway and transportation departments and by committees of AASHTO. Each year, specific areas of research needs to be included in the program are proposed to the National Research Council and the Board by the American Association of State Highway and Transportation Officials. Research projects to fulfill these needs are defined by the Board, and qualified research agencies are selected from those that have submitted proposals. Administration and surveillance of research contracts are the responsibilities of the National Research Council and the Transportation Research Board. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement rather than to substitute for or duplicate other highway research programs. Published reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from: Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet at: http://www.national-academies.org/trb/bookstore Printed in the United States of America NCHRP REPORT 736 Project 14-21 ISSN 0077-5614 ISBN 978-0-309-25871-5 Library of Congress Control Number 2012952706 © 2012 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FTA, or Transit Development Corporation endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The project that is the subject of this report was a part of the National Cooperative Highway Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. The members of the technical panel selected to monitor this project and to review this report were chosen for their special competencies and with regard for appropriate balance. The report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the Governing Board of the National Research Council. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board, the National Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report.

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished scholars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and technical matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Academy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achievements of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academy’s purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Academy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transporta- tion Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Board’s varied activities annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individu- als interested in the development of transportation. www.TRB.org www.national-academies.org

C O O P E R A T I V E R E S E A R C H P R O G R A M S AUTHOR ACKNOWLEDGMENTS The research team acknowledges the assistance of Zongwei Tao, Weris Inc., who was a subcontractor for this project. The team also recognizes the following people for their assistance with facilitating data acquisition from their respective state DOTs during the course of this project: Anita Bush, Nevada State DOT; Kevin Porter, Nevada State DOT; David Luhr, Washington State DOT; Pat Morin, Washington State DOT. In addition, the research team acknowledges the contributions of the NCHRP Project 14-21 panel and numerous state DOT members, who participated in phone interviews to provide information on the state- of-the-practice of allocating resources for preservation and maintenance activities. CRP STAFF FOR NCHRP REPORT 736 Christopher W. Jenks, Director, Cooperative Research Programs Crawford F. Jencks, Deputy Director, Cooperative Research Programs Andrew C. Lemer, Senior Program Officer Sheila Moore, Program Associate Eileen P. Delaney, Director of Publications Kami Cabral, Editor NCHRP PROJECT 14-21 PANEL Field of Maintenance—Area of Maintenance of Way and Structures Ken McEntire, Asset Management Association, LLC, Apex, NC (Chair) Edgardo D. Block, Connecticut DOT, Newington, CT Anita K. Bush, Nevada DOT, Carson City, NV Syed Waqar Haider, Michigan State University, East Lansing, MI David R. Luhr, Washington State DOT, Olympia, WA Marion G. Waters, III, Gresham Smith & Partners, Alpharetta, GA Jeffrey H. Smith, AASHTO Monitor Deborah Walker, FHWA Liaison Frank N. Lisle, TRB Liaison Invited Workshop Participants Jennifer Brandenburg, North Carolina DOT, Raleigh, NC Tom E. Cole, Idaho Transportation Department, Boise, ID Patrick E. Morin, Washington State DOT, Olympia, WA Jon Wilcoxson, Kentucky Transportation Cabinet Division of Maintenance, Frankfort, KY Russell Yurek, Maryland State Highway Administration, Hanover, MD

F O R E W O R D This report presents a logic framework for allocating limited highway asset preservation funds among competing demands to achieve high levels of system performance. The report also presents a spreadsheet-based computational tool that implements the framework. The tool uses linear programming optimization to allocate resources across asset classes or geo- graphic regions, subject to constraints that typically must be considered in such decision- making, to achieve target asset performance or condition levels. Prototypical application scenarios and case-study examples illustrate how transportation agency staff may use the framework to assist resource allocation decisionmaking. State departments of transportation (DOTs) and other government agencies have invested significant resources in building our nation’s highway system. The investments are embodied in the pavements, bridges, lighting, signals, signage, intelligent transportation system (ITS) devices, pavement markings, drainage systems, traffic barriers, landscaping, noise walls, rest areas, and other assets that constitute the network. These various assets, distributed geographically through a highway system, are expected to provide many years of service. DOTs undertake asset preservation activities to protect past investments and thereby ensure that the full value of these investments is realized. These activities include both maintenance and rehabilitation. A DOT’s resources for preservation activities are inevitably limited and often inadequate to undertake all of the activities that agency staff believe are needed. How to allocate limited resources among competing needs to achieve the greatest benefit is a complex, continuing problem that all DOTs face. The objectives of NCHRP Project 14-21 were to describe in practical, usable terms an analysis framework that DOT staff may use to allocate resources across principal categories of highway assets to ensure system preservation, and to demonstrate the framework’s appli- cation. An analysis framework of this sort must reflect the fundamental principles under which a DOT operates, for example, how classes of assets are defined and how the agency administers the system for which it is responsible. The framework must also reflect how asset condition and performance are characterized and measured and the condition and performance targets that a DOT seeks to meet. The framework must effectively account for the constraints to be met by the agency, for example ensuring reasonable balance of effort within all parts of the system. For the framework to be useful, it must not impose unrealistic demands on agency staff for extensive data or excessively complex computation. A research team led by Booz Allen Hamilton reviewed available literature and current practices that decisionmakers use to support resource allocation and considered ways that DOTs typically undertake to allocate preservation resources. The team assessed DOT data By Andrew C. Lemer Staff Officer Transportation Research Board

quality and availability; forecasting tools used in management of various categories of assets, risks, and liabilities that agency management must consider; and the changeability of priori- ties that such agencies may experience. Based on this assessment, the team specified a logical framework using linear-programming optimization. The team developed a spreadsheet-based approach to implementing the optimization framework and developed examples of its application using data provided by several DOTs. A workshop was held to engage the NCHRP Project 14-21 panel and other invited DOT practitioners to comment on the optimization approach and help the team to refine specific implementation details to enhance the framework’s utility. This report presents in detail the overall logic framework and the proposed procedures for developing and applying the framework to inform an agency’s resource allocation decisionmaking. A demonstration model (in Excel workbook format) was developed to accompany this report (see text box for details). The files are functional illustrations of the procedure applied under scenarios typical of conditions a DOT may face. DOT staff may adapt the spreadsheet files or develop their own implementation of the logic framework tailored to the specific characteristics of their own agency and system. The following spreadsheet files are available for download from the NCHRP Project 14-21 web page at http://apps.trb.org/cmsfeed/TRBNetProjectDisplay.asp ?ProjectID=2718: NCHRP 14-21_Resource_Allocation_Model_Demo_July2012 - Baseline.xlsm NCHRP 14-21_Resource_Allocation_Model_Demo_July2012 - Scenario 2.xlsm NCHRP 14-21_Resource_Allocation_Model_Demo_July2012 - Scenario 3.xlsm NCHRP 14-21_Resource_Allocation_Model_Demo_July2012 - Scenario 4.xlsm

C O N T E N T S Note: Many of the photographs, figures, and tables in this report have been converted from color to grayscale for printing. The electronic version of the report (posted on the Web at www.trb.org) retains the color versions. 1 Summary 5 Chapter 1 Introduction 5 1.1 Project Background 7 1.2 Organization of the Report 8 Chapter 2 Literature Review 9 2.1 Business Case 15 2.2 Data Collected and Maintained for Resource Allocation 19 2.3 Analytical or Optimization Techniques 22 2.4 Outputs and Reporting 23 2.5 Summary of Findings 25 Chapter 3 Resource Allocation Solution Context and Requirements 25 3.1 Problem Statement 26 3.2 Resource Allocation Solution Requirements 27 3.3 Key Considerations 30 Chapter 4 Resource Allocation Logic Framework Development 30 4.1 Computational Logic 31 4.2 Solution Components 34 4.3 Data Needs 40 4.4 Allocation Logic 41 Chapter 5 Case Studies and Workshop Findings 41 5.1 Case Studies 42 5.2 Workshop Findings 44 Chapter 6 Resource Allocation Logic Framework 44 6.1 Logic Process 44 6.2 Logic Framework and Demonstration Model 57 6.3 Setup of Additional Case Examples 60 6.4 Results from Sample Runs 64 Chapter 7 Conclusion 67 Appendix A Literature Review Summary 71 Appendix B State DOT Interview Guide Book 75 Appendix C References 76 Appendix D Acronyms 77 Appendix E Instructions to Activate Solver in Excel Program