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 commissioners familiar with life cycle
cost analysis will benefit your
business. Although many planners know about concre t e s
s t rengths, they often fail to
look at the long-term cost and
maintenance savings that result when concrete is selected.
By promoting this re a l i s t i c ,
thorough method of life cycle
cost analysis to those with the
power to specify pavement
material, you both educate
and convince these specifiers
of concretes value.

How it works
Life cycle cost analysis comp a res asphalt and concre t e
considering not only the initial
cost, but also the length of service life and maintenance costs.
Even when the principle of discounting future maintenance
costs through present worth is
used, concrete still is shown to
be the more efficient choice.
When comparing two products by cost, the assumption
exists that the two pro d u c t s
a re equal. In the case of asphalt and concrete this is not
t rue. Because the two pavements do not offer the same
benefits, to compare them as
equals is misleading. While asphalt offers a lower initial
price, concrete offers valuable
qualities such as better riding
surface, skid resistance, nighttime visibility, and durability.
F u rt h e rm o re, the practice
of specifying on the basis of
initial cost alone is flawed, because it does not take into account future costs that will occur during the life of the
pavement. Pavement serv i c e

Table 1. Total cost comparison

of concrete and asphalt pavements
Initial cost

Concrete

Asphalt

$195,000

$180,000

Joint repairresealing and replacement

21,500

Grinding at 25 years

29,000

1st resurfacing at 15 years

(mill and recycle 4 inches)

96,000

2nd resurfacing at 25 years

(mill and recycle 6 inches)

143,000

Cracksealing (4 times)

12,000

Total cost35 years

$245,000

life, maintenance costs, and

initial cost are equally important 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 concrete 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-

$431,000

nance costs for asphalt are

much greater than those for
concrete, which consist only of
joint sealing and re p a i r. Asphalts maintenance involves at
least two resurfacings, pothole
repair, and crackfilling. After reviewing the amount of future
costs involved in pavement, it
becomes evident that cost comparison that relies solely on initial cost is far from accurate.
Table 1 depicts a 35-year
life for asphalt and concrete.

Table 2. Comparison of actual

and discounted maintenance costs
Age of
pavement

Actual DOT maintenance

expenditure

Present worth discounted

value for project estimate
(4.5 % real int.)

10 years

$100,000

$64,000

20 years

100,000

41,000

30 years

100,000

27,000

Present worth
considerations
The case of life cycle cost
analysis is weakened slightly
when present wor th is involved. The present worth theo ry is not valid for selecting
pavements. Present worth involves discounting future costs
by the estimated real interest
rate that an investment would
make until the money is needed. State departments of transportation 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 specific funds that will accrue interest until required for future
maintenance. Instead, the specific amount listed in the budget is the amount that can be
guaranteed for future repairs.
Table 2 demonstrates how the
p resent worth theory, in reg 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 analysis, the civil engineering profession 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 dep a rtments usually is held by
AASHTO (American Association 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 initial 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 temporarily pleased with the lower annual budgets, but the
c o u n t ry suffers in the future
when early structure replacement is needed.

Brochure explains
benefits
A four-page brochure, coordinated by the Portland Cement Association, the American Concret e Pavement
Association, and the National
Ready Mixed Concrete Association (NRMCA), contrasts the
quality and costs of asphalt
and concrete by cleverly depicting the taxpayers interests
as piggy banks traveling down

two very different roads. This

b ro c h u re promotes the concept of life-cycle costing to city
and county officials, and other
planning commissioners. A
convincing marketing tool, this
pamphlet points to the longterm 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, (301587-1400; 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 Concrete 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, National Ready Mixed Concrete Associations Promotion Pointers,
October 1992.

PUBLICATION #J930714
Copyright 1993
The Aberdeen Group
All rights reserved