Differences in Performance and Condition

The terms ‘performance’ and ‘condition’ are often used interchangeably, although they have different meanings in a performance-based environment. The performance of an asset relates to its ‘ability to provide the required level of service to customers3’ while condition is generally considered to mean the observed physical state of an asset, whether or not it impacts its performance. For example, a bridge with scour may continue to perform adequately in the short-term even though it may receive a low National Bridge Inventory (NBI) rating because of the deterioration.

Inventory Information

An asset inventory provides information other than performance data important for estimating the amount of work needed, identifying the location of work in the field and determining characteristics capable of influencing the type of work to be performed. The RCM approach introduced in Chapter 4 can be used to help an agency determine what information is needed to support the management of each type of asset. The asset inventory requirements for those assets managed based on a specified interval for repair, such as pavement markings, is very different than those required for an asset managed using a condition-based approach, such as pavements or bridges. Regardless of how detailed the asset inventory is, it is important an agency establish processes to ensure data quality and keep the inventory current over time.

There are several basic data attributes essential to effectively managing transportation assets, including asset type, quantity and location. Additional information that is important is to differentiate between the types of work to be performed, which may also be added to the inventory, the type of material used to construct the asset, the last time work was performed and factors influencing the use of the asset (e.g. traffic levels, highway functional classification or climatic conditions).

As discussed in Chapter 7, managing asset inventory information using an integrated approach to data management helps promote consistency in asset data across an agency and provides access to help ensure the data is used by decision makers at all levels of the organization. An out-of-date inventory makes it difficult for an agency to estimate work quantities accurately for budgeting purposes.

Condition Information

Asset condition information is used to determine how assets are performing and how performance changes over time. The lack of condition information may lead to premature or unexpected failures with the potential to be very costly, negatively impacting system performance and increasing agency risks. Methods of collecting asset condition information are discussed further in Chapter 7. To ensure that condition information remains current, it is important that the information is updated on a regular basis.

Asset Condition

There are several approaches for assessing asset conditions, each of which is influenced by the type of asset and the resources available to support the process. Typically, an assessment of asset condition involves a method of evaluating the presence of deficiencies and/or deterioration at the time of inspection. The results are used to assign a rating or LOS used to determine the need for maintenance, rehabilitation or replacement now or in the future. Asset condition ratings may also be used to establish rates of deterioration, allowing an agency to forecast future conditions for planning purposes.

Examples of commonly used types of asset condition ratings are listed below.

• A pavement condition index based on the type, amount and severity of distress present, which could be on a 0 to 100 scale, with 100 representing an excellent pavement.
• The National Bridge Inventory (NBI), which assigns a rating between 1 and 9 based on the deterioration present in each element (deck, superstructure, substructure and culvert).
• A LOS rating of A to F for maintenance assets, such as the percent blockage in a culvert or the percent of guardrail not functioning as intended.

Maintaining asset condition information is important for evaluating performance to determine whether improvements are needed to achieve the agency’s strategic objectives. The lack of current condition information, or a lack of confidence in the condition information, makes it difficult to present investment needs to stakeholders with any degree of confidence.

Asset Performance

The results of condition surveys or inspections are used to evaluate the performance of each asset in terms generally understood by stakeholders, such as Good, Fair or Poor.

It is common for transportation agencies to report the percent of the network in Good or Fair condition or the percent of drivers traveling on roads in Good and Fair condition. Asset performance can also be reported in terms of a health index, such as the Remaining Service Life (RSL) used by some state DOTs to indicate the amount of serviceable life left in the asset. In the maintenance community, some state DOTs have developed a Maintenance Health Index or overall LOS grade to represent the performance of the entire Maintenance Division rather than report the grades of each category of assets separately.

Asset performance also influences overall system performance, as demonstrated by the impact on system reliability associated with unplanned road or bridge closures due to flooding or an on-going lack of maintenance. Performance data related to delay, unplanned closure frequency, GHG emissions, and crash locations may all be impacted by asset conditions and affect an agency’s ability to achieve its broader, strategic performance objectives such as system reliability, congestion reduction, environmental sustainability, and freight and economic vitality. For example, it is important to monitor performance characteristics such as travel time reliability to determine whether capital improvements are needed to add additional lanes or whether ITS assets could improve traffic flow during peak periods.

Maintaining Inventory Information

One of the challenges transportation agencies face is keeping their asset inventory current, because it can require business processes dependent on individuals or agency work areas that differ from the primary asset owners. For example, construction may be responsible for installing new guardrails as part of a pavement-resurfacing project, but the information is not always made available to the maintenance division responsible for budgeting and scheduling guardrail repairs.

Establishing Processes to Update Inventory Information

Some types of inventory information change regularly while other information changes infrequently. As a result, it is important to classify each type of data and establish procedures in order to ensure the inventory is updated as information changes. An agency should establish business processes to ensure any changes to the inventory are reflected in relevant databases. For example, each time a pavement improvement project is completed, the database should be updated with information about the new surface type, the project completion data and the other assets replaced as part of the project. Establishing these processes and holding individuals responsible for updating this information are important for the ongoing success of a performance-based management approach.

Maintaining Condition Information

Asset condition and performance information must also be updated on a regular cycle. In some cases, data collection cycles are mandated by regulations, such as federal requirements for reporting pavement and bridge condition information on the National Highway System. Where there are no requirements in place for condition reporting, the update frequency should be determined based on the resources available, how the asset is managed and the data analysis cycle. Different update frequencies may be established for different types of assets.

Asset condition information may be collected based on a regular interval schedule or an inspection may be triggered based on the asset’s condition. For example, an asset in poor condition may require inspection more frequently than an asset in good condition. In general, asset information is updated on a 2- to 4-year cycle, but in some cases asset data is collected more frequently. For instance, some agencies collect performance data on maintenance assets several times a year to ensure they are in good working order and performing as expected. The condition of other assets with a slower rate of deterioration may be conducted less frequently.

Funding and Resource Allocation Trends

Historical trends related to the performance and condition of the highway system or the way investments have been made provide useful information for estimating future investment needs. These trends contain important insights into future needs and highlight the consequences associated with different tradeoffs in the various use of funds. This information can be useful in developing the life cycle management and financial planning portions of a TAMP.

The FHWA introduces the importance of historical trends for the following reasons:

• Illustrating whether past expenditures were adequate or whether they need to increase
• Helping an agency shift from a budgeting process based on incremental growth in expenditures to a performance-based approach addressing need
• Building agency confidence in forecasting future investment needs and conditions

Types of funding and resource allocation trends commonly include:

• Revenue trends over time by funding source
• Funding allocations by program category over time
• Expenditures by asset and work category over time
• Expenditures by system (e.g., Interstate, non-Interstate NHS and non-NHS) over time
• Expenditures by district or region over time

Revenue Trends by Funding Source

A summary of revenue trends by funding source provides an agency with a foundation for projecting the amount of revenue available in future years to address asset needs. These trends help an agency understand whether revenues are increasing or decreasing, identify which revenue sources have significant amounts of variability or more consistent growth rates over time, and illustrate whether the agency is relying on unsustainable funding. The information is a vital foundation for forecasting future revenue levels for planning purposes and helping formulate the assumptions upon which future revenue forecasts are based.

An example of a revenue trend table is provided in Table 6.3. The trends illustrate which revenue sources have increased or decreased over time and are thus important for making future revenue projections. The table also highlights how overall funding levels peaked between 2007 and 2009 largely due to state bonds in 2007, federal bonds in 2007 and 2009 and one-time ARRA (American Recovery and Reinvestment Act) funding in 2009. When these three funding sources ended, the available revenue reverted to 2005 levels. If the effects of inflation were taken into consideration, the agency could also show how the purchasing power of available funding has dropped in later years.

Funding Allocations by Program Category

Transportation agencies typically track funding allocations and expenditures by program category, but the number of categories and the category descriptions may vary depending on the agency. In general, funding allocations are tracked separately for the highest-value assets and the performance of these assets are incorporated into the agency’s strategic goals. This may lead agencies to track investments made in pavements, bridges, maintenance, safety and other assets. Within each of these categories, agencies can project the level of funding expected and predict the conditions and performance expected for it. Past trends in funding allocations by category can help indicate whether expected funding will be adequate to achieve the stated objectives.

Expenditures by Asset and Work Category

Information on past expenditures by asset and work type, along with resulting conditions, provides insight into the amount of funds needed for these activities in future years or helps set expectations for conditions achievable in future years. Where there are differences in planned expenditures and needed expenditures, the agency may report the existing financial gap.

Expenditures by System

Expenditures by system also provide valuable information, laying the groundwork for predicting how future funding levels will impact the condition of the Interstate, non-Interstate NHS and non-NHS assets. The information by system also conveys the agency’s past priorities for system investment, with higher levels of investment in high-volume facilities being common.

Expenditures by District or Region

Trends showing expenditures by district or region may be used to identify geographical areas requiring more focus on a particular type of work or experiencing an accelerated rate of asset deterioration. Information provided at this level can also be used to identify differences in production rates with the potential to serve as the basis for improving future practices. For example, a district with an unusually high production rate for repairing guardrail end treatments could share its experiences with other districts to improve the overall productivity rate at the statewide level.

Overcoming Challenges Associated With Trend Analysis

It can be difficult to predict future trends based on historical data, especially when there is a significant amount of variability occurring. For example, the FHWA construction inflation trends shown in Figure 6.3 illustrate how variability can have a significant impact on historical trends. In this example, the FHWA National Highway Construction Cost Index has a compound annual growth rate of 1.16 percent between 2003 and 2014. However, between 2005 and 2008, significant inflation occurred. An agency preparing a construction estimate in 2006 would look very different than one developed in 2003 or 2013. To address this type of challenge, the agency can include any assumptions made, when preparing an estimate based on trends with significant variability. It could also conduct a sensitivity analysis to better understand the consequences of the potential variability.

Another challenge in using trends is the fact that past performance does not guarantee future results, especially if there have been changes in the condition impacting performance. For example, a bridge may have performed well for years, but changes in traffic volumes and weights could significantly increase the rate at which the bridge deteriorates. Similarly, the use of new bridge deck materials may last longer than the materials used previously. To address these challenges, an agency may find it beneficial to modify historical models to better reflect current and future conditions. Monitoring performance over time will allow the agency to develop new models specific to changes in traffic or materials.

A third challenge arises in trying to develop trends for expenditures in work activities when there are inconsistencies within the agency as to what treatments are included in each category. This typically occurs with work activities related to maintenance and preservation. For example, the categorization of a treatment may vary depending on whether the work was performed by inhouse forces or a contractor. Another example is when a preservation treatment is used as a stop-gap improvement on a project that needs more substantial repairs. Again, the actual performance of the stop-gap improvement could be much shorter than the application of that same treatment when used as a preservation improvement. The absence of standardized work categories or the use of stop-gap treatments consistently across the agency can make it difficult to show meaningful performance trends for these types of activities. As a result, it can be difficult to show the benefits associated with these treatments. The solution is to define treatments consistently throughout the agency and to ensure that the treatments are being used as expected.

Adjusting a Program Based on Trends

The availability of historical trends is integral for making future projections as part of the planning and programming process. As shown by the examples included in this section, agencies have used trend data creatively to make program adjustments and more effectively align planned investments with strategic objectives.

Why It Is Important to Track Work Activities and Treatment Costs

Asset management systems, such as pavement and bridge management tools, rely on the availability of complete, up-to-date inventory information to serve as the basis for all system recommendations. At a minimum, the most recent work activity and completion date are necessary for establishing an asset’s age or the length of time since work was last performed. These factors are key to setting a maintenance service interval or predicting the need for future work. Treatment cost information is used to estimate the cost of recommended work activities, so realistic numbers are important for planning and budgeting.

Work Activities

The level of detail required to track work histories is largely dependent on the sophistication and maturity of the asset management program. It is important to have access to information indicating when the asset was installed or constructed, or when the most recent major work activities were performed. Additional information about maintenance activities performed to preserve or improve the asset is beneficial if it can be provided efficiently and incorporated into decisions about managing an asset over its life cycle.

An agency should incorporate completed work activities into a management system at least annually, at the end of each construction season. At a minimum, the asset management database should be updated to reflect any changes to the asset properties, such as a change from a concrete to an asphalt pavement, and the date when the change was made.

Treatment Costs

Including the cost of maintenance and rehabilitation activities in a computerized maintenance system provides a historical record of how treatment costs have changed over time. The information from the management system, as well as bid documents, can be used to establish unit costs for each type of work activity possibly recommended by the system. Unit prices for each work activity included in the system are needed.

For many transportation projects, improving the condition of the asset is only one part of the total cost of a project. There are many other costs to incorporate into the unit price when estimating the cost of a treatment recommendation, including the cost of pavement markings, guardrails and signs on a pavement project. If these costs are ignored, the cost of a project will be underestimated, and an agency may program more work than can be constructed over a given timeframe. Some agencies inflate treatment costs by a factor of 30 to 40 percent to ensure the costs associated with project design and the improvement of ancillary assets are considered in the unit cost for a given treatment. Using this approach, $0.30 to $0.40 is added to every dollar associated with the cost of the work itself. The inflated cost (e.g., $1.40) is stored in the management system as the unit cost for estimating treatment costs.

Different unit costs may also be established to reflect different costs in urban and rural areas, or in different geographic regions of a state. These differences improve the accuracy of asset budgeting activities by reflecting the realities agencies face due to work activities in highly congested areas, differences in the availability of contractors and the scarcity of materials in certain areas.

In addition to being used to estimate budget needs, treatment cost information serves many other purposes. For instance, the cost of a proposed project and its expected life can be used to determine a Return on Investment to help ensure that the most cost-effective projects are being selected. The information can also be used to compare the effectiveness of one treatment over another, or one life cycle strategy over another. Cost information has also been used to demonstrate the benefits to using proactive maintenance across a transportation network rather than reactive maintenance.

Assign Responsibility

One of the first steps in establishing business processes to support the maintenance of work history and cost information is assigning responsibility to the appropriate person for managing the information. The individual assigned responsibility for updating work history and cost data in the management system is not always the individual responsible for providing the data. For example, some agencies assign responsibility for updating completed work history and treatment cost information to the maintenance or construction division, since they are typically involved in closing out a project. Regardless of who is assigned responsibility for the task, a clear line of accountability should be established as part of the business process.

Establish Processes to Update Work Activities

As discussed in Chapter 7, technology is improving agencies’ ability to track completed work activities, so the information is available for use in an asset management system. The access to handheld data entry devices with map interfaces linked to a centralized database helps ensure all users of the information have immediate access to current and consistent information. Business processes reliant on field personnel to remember to provide information to another data user are generally not sustainable.

To help establish a reliable approach for keeping asset data current, an agency may consider developing a data and process flow map illustrating the flow and use of data across the agency. This type of document helps an agency better understand where the data comes from, where it is stored, who uses the information and what levels of access various users need. A data and process flow map may become part of an agency’s data governance documentation in order to protect the integrity of asset data.

Build Buy-In To Support the Business Processes

Key to the success of any business process is establishing buy-in among the individuals responsible for each required step. This involves familiarizing the individuals with their responsibilities, providing tools and guidance for completing the activities efficiently and effectively and demonstrating how the information is used to support agency decisions.

Developing and Improving Asset Deterioration Models

An important function of an asset management system is the ability to predict asset deterioration rates so changes in condition over time can be modeled for use in planning and programming activities. In the absence of data, models can be developed based on expert judgment, but as historical performance trends are established based on actual data, the expert models should be replaced by or calibrated against the real data.

The AASHTO Transportation Asset Management Guide: A Focus on Implementation (2011) introduced the following thought process to help an agency evaluate their deterioration models and determine whether improved data is needed to enhance future forecasts:

• If there is disagreement with the timing for recommending a treatment, what is the difference? Does a difference of one to two years make a substantial difference to the program? This type of difference is typically the result of the program optimization models.
• If there is disagreement with the treatment, are the differences substantial, such as deck repairs versus bridge replacement? These differences are often the result of treatment rules but may indicate that deterioration rates are not correct. The deterioration model parameters may need to change (e.g., change traffic considerations or geographic location) or there may have been some work performed that the model is not aware of.
• If the differences are irreconcilable, the agency may decide to investigate the model setup and analysis further or may conduct research to see how other agencies have resolved similar issues.

Determining Treatment Effectiveness

The availability of work history and performance data also makes it possible to determine the effectiveness of different types of treatments over time. By adding cost information to an effectiveness analysis, an agency can determine the long-term cost-effectiveness of different treatment strategies.

Risk Register

A risk register is one of the most common tools for tracking and managing risks within an agency, since it provides a framework for capturing critical information about each risk, its importance to the agency, mitigation plans and tracking and managing responsibilities. A risk register is typically generated as a spreadsheet, though other formats are available. An example of a comprehensive risk register, which includes assignments for risk mitigation strategies, is presented in Figure 6.4. Over time, columns may be added to indicate when the risk information was last updated, what further action is required and whether adequate progress is being made towards the mitigation strategy.

A risk register should be reviewed at least quarterly to evaluate whether the risk register or the risk management plan for any of the performance areas needs to be updated. Periodic changes to the risk profile may be obtained through executive staff meetings meant to evaluate progress regularly, or ongoing reports tracking risk mitigation efforts and results. Annually, the agency may determine whether any strategic-level risks should be adjusted based on evaluation of the agency’s performance and the risk reports provided by the risk owners.

Risk Reports

Risk reports, which reflect excerpts from the risk register, may be developed by risk owners to communicate ongoing activities and manage risks at any level of the organization. The type of risk report shown in Figure 6.5 conveys what steps are being taken to address project delivery risks.