Executive Summary

Most nations of the world have made significant investments in transportation infrastructure. In the United States alone, such investment is estimated at more than $1.75 trillion. However, as this infrastructure is used and exposed to natural forces, its condition will deteriorate. In the United States, in particular, a significant challenge facing national, State, and local officials is how to preserve the functionality of the existing transportation asset base while at the same time funding expansions of the transportation network to handle increasing demands. Although transportation officials often spend considerable time and energy on new roads, transit facilities, airports, and pedestrian/bicycle facilities, by some accounts, the Nation will spend more money over the next several decades preserving and maintaining the existing transportation base than it will building new facilities.[1]

The purpose of this scan was to investigate asset management experience, techniques, and processes in the world. Lessons from this experience could help the United States better understand how asset management applications can be used to enhance the effectiveness of decisionmaking and infrastructure management in Federal, State, and local transportation agencies. The United States faces a significant infrastructure preservation and capital replacement challenge. The lessons learned from this scan could provide important indications of how those who have been practicing effective asset management for some time have approached the challenge from both an institutional and technical point of view.

Scan Team

The Federal Highway Administration (FHWA), American Association of State Highway and Transportation Officials (AASHTO), and National Cooperative Highway Research Program (NCHRP) jointly sponsored this scan. In addition to FHWA officials (at the headquarters and field levels), the panel included representatives from the departments of transportation (DOT) for the States of Michigan, New Mexico, New York, and North Carolina; an official from the Portland, OR, Office of Transportation representing the American Public Works Association (APWA); a university professor representing the Transportation Research Board (TRB) Committee on Transportation Asset Management; and a university professor who acted as the report facilitator. These panel members represented a diverse set of interests and expertise in the areas of asset management, bridge and pavement management systems, transportation policy and planning, and transportation system operations.

The scan team sent each host of a site visit a set of amplifying questions that outlined the specific information the team desired. These questions provided a framework for the scan team's investigations of asset management practice, and gave the host government an opportunity to organize its information dissemination in response to these questions. In many cases, the team received written responses to the questions. In others, audiovisual presentations were coded so that the scan team knew exactly which questions were being discussed at that moment. In addition, the host agencies provided many documents and Web references relating to their asset management practice.

General Observations

The concluding section of this report presents a complete set of observations and lessons learned from this scan. The following list focuses on the observations that are most critical to understand the results of this scan.

Leadership and Organization
Any sustained organizational effort requires the involvement of organizational leaders and champions. In all of the sites visited, asset management practice has been occurring over at least 10 years and is continuing to evolve. Continuity in agency leadership and long-term organizational commitment to asset management as a business process were apparent in each case. Specific observations from the scan include the following:

• Top-level agency commitment (at the very highest levels) in support of asset management was apparent in every case.
• Asset management officials identified changing the culture of the organization to think of asset management as a key business area as a key challenge.
• Each agency had a management position or office responsible for asset management.

Asset Management's Role in Decisionmaking
Aligning asset management with an agency's decisionmaking process is one of the most important factors in developing an effective and credible asset management program. Specific observations from the scan include the following:

• In some cases, transportation agencies were competing for resources across all government programs, and officials pointed to an effective asset management program as one reason they were successful in competing for additional funding in such an institutional environment.
• Asset management programs are based on defined levels of service for different types of assets. When funding levels change (e.g., go down), the desired service levels are reexamined to see if they are still reasonable given fewer resources.
• National or state legislation, in some cases, has been an important catalyst for viewing asset management as an important component in an agency's decisionmaking structure.
• A good asset management program conveyed to elected officials a sense of strong stewardship of transportation assets, and has been an important consideration in increasing funding for transportation.
• Asset management has been integrated into many agency planning and policy documents.

Technical Approaches and Data Use in Asset Management
Asset management is a data-driven process that provides transportation officials with a very important analysis capability. Specific observations from the scan include the following:

• Life cycle costing (also known as whole-of-life costing) had been adopted in each site as the basic approach to program and project costing.
• Although the scan team looked for examples where tradeoff analysis occurred among different asset categories or among different program areas (such as maintenance, capital expansion, and capital renewal), in only a few cases did agencies make any effort to conduct such technical tradeoff assessments, and these were heavily based on engineering judgment.
• All of the agencies studied used risk assessment in developing their asset management programs. Agency officials also viewed risk assessment as a way to educate and obtain asset management buy-in from elected officials.
• Government accounting procedures were viewed in several cases as inappropriate for assigning value to assets and as a driver for asset management decisions. In these cases, asset management approaches were used to assign a value to assets.
• Instead of creating one comprehensive database for asset management, agencies rely on locational referencing systems to link existing asset databases.
• The experience with deterioration modeling is not uniform across the agencies visited, and in many cases, was quite limited. In some instances, however, the approach to deterioration modeling and scenario analysis was quite sophisticated.

Program Delivery
Asset management practice leads to the development of a program of investment and capital renewal. Specific observations from the scan include the following:

• Several of the visited sites have many years' experience with incorporating strong asset management principles in public-private partnership (PPP) agreements. The lessons learned in this experience are important for the United States.
• Private contracts for delivering maintenance and minor capital construction programs were used at varying levels of application. Although asset management practice does not require or depend on such outsourcing, the opposite was found to be true. If an agency is going to outsource program and service delivery, an effective asset management program needs to be in place.
• Efforts were made in each case to reach out to public officials and, in some cases, the general public, to convey the importance of an asset management policy.
• In some cases (e.g., New Zealand and England), very active asset management professional associations and user groups, spearheaded by local officials, have developed asset management materials and training programs aimed at both public officials and practicing transportation professionals.

Human Resources
An effective asset management program has a strong human resource element. Every agency the team visited noted that a good asset management program requires knowledgeable staff capable of understanding the data-collection process and what the data mean. Observations from the scan include the following:

• Several agency personnel systems have created positions with asset management as a job responsibility.
• Asset management training has been an important aspect of asset management strategy in many of the agencies visited, not only for their own staffs, but also for other jurisdictions using asset management approaches.

Lessons for the United States

A number of lessons for the United States resulted from this scan (see Chapter 7 for a more extensive list). The most important lessons include the following:

• As this scan found, asset management practices and processes have been used successfully to obtain funding for transportation infrastructure, when competing for funds with other government programs, and even during budget declines.
• It is clear that asset management as an organizational culture, business decisionmaking process, and policy direction is a critical foundation for transportation programs facing significant capital renewal and preservation needs. The United States clearly faces such a challenge.
• Adopting an asset management approach in an organization does not mean that dramatic change has to occur. In the cases examined, agencies had clearly adapted their asset management efforts to the organizational context, and in many cases these efforts have evolved over many years.
• Where outsourcing of service or program delivery is used, a strong asset management program needs to be in place to provide overall direction and strategic guidance on service delivery. Agency officials described this as being a “knowledgeable owner.”
• Creating asset manager positions or at least assigning responsibilities for the asset management function is an important foundation for an effective management program.
• All of the asset management programs the team studied used the concept of risk for establishing investment priorities. Most U.S. asset management experience does not have the same level of application. Risk concepts need to be incorporated more systematically into U.S. asset management efforts.
• Asset management systems are much more appropriate for determining asset valuation than are straight-line depreciation accounting rules.
• Asset management efforts are best achieved when they are linked to strategic goals and desired outcomes.
• The most common asset management performance measures relate to condition, function, and capacity of the assets. In some cases, these categories of performance characteristics could provide the basis for cross-asset evaluation and investment prioritization.
• Asset management should be strongly linked to planning and system operations.
• Perhaps one of the most important lessons for the United States is in integrating asset management concepts into public-private partnership agreements. A comprehensive asset management effort needs to be part of any agreement to ensure the asset is returned to the owner in good condition, but also to deliver good service to users during the life of the contract.
• Developing an asset management culture in an organization does not have to wait the many years it would take to develop database information systems. Agencies can start with modest efforts and evolve over time into a more comprehensive approach.
• Data collected should have a clear purpose and be directly related to asset management decisionmaking. Data-collection costs should be tracked and data itself treated as an asset, with the same design, build, operate, maintain, and life cycle cost analysis used for other assets.
• The concept of a gap analysis was used to identify asset management needs. Condition and performance criteria are used to measure current asset status, desired operational outcomes are linked to strategic agency goals, and the most cost-effective improvement strategies are then identified.
• Cross-functional teams, consisting of engineers, planners, finance analysts, operations staff, and communications experts, can serve as the best means of understanding the many aspects of asset management, such as data collection, strategy development, and quality assurance.
• The use of focus groups to establish and/or validate resource apportionments for different asset categories is a useful tool in asset management programs.
• Asset management training for all levels of transportation officials is an important initiative for changing the culture of an organization and establishing asset management expectations among key stakeholders.

Implementation Strategies, Dissemination, and Recommendations

The scan team identified several short- and long-term strategies for disseminating and furthering the results of this scan.

Short-Term Strategies

1. The scan results should be disseminated as widely as possible throughout the transportation community. Presentations will be scheduled for the annual meetings of TRB, AASHTO, and 6th National Asset Management Conference planned for fall 2005. Other opportunities will be identified by scan team members. The Transportation Asset Management community practice Web site will be repackaged to incorporate scan results.
2. The AASHTO Subcommittee on Transportation Asset Management will be encouraged to continue development of the asset management software NT and PT by AASHTOWare. The subcommittee will also prepare a resolution for AASHTO board consideration that reinforces asset management as an important national and State policy.
3. The existing National Highway Institute (NHI) course on asset management should be updated to reflect what has been learned on this scan.
4. A senior executive forum on asset management should be organized to introduce senior leaders at transportation agencies to asset management concepts. This should be similar in format to the performance-based maintenance contracting workshop.
5. A national telecast/Webcast on asset management similar to such telecasts on freight should be organized. A target date for this is summer 2006.

Long-Term Strategies
The following three implementation strategies create a climate of continuous process improvement on transportation asset management in the United States.

Change the national viewpoint of the Interstate System from merely highway expenditures to investments in mobility of people, goods, and services by using an asset management-based methodology that focuses on future conditions while identifying the cost of competitiveness and economic power.

Objectives

1. Advance asset management principles as the strategic tools for assessing the entire Interstate System.
2. Compare and contrast the similarities with other countries' highway networks, England's trunk system in particular, and how asset management can support the new vision for the Interstate System.
3. Develop information on the economic impact of the degradation of the Interstate System.
4. Determine a risk-allocation process for the Interstate System.
5. Identify performance indicators and standards for the Interstate System to ensure its prominence in the delivery of goods and services for the entire Nation (e.g., smoothness, remaining service life) that are common across the system.
6. Assume a national leadership role to protect the highest level of the transportation system, and encourage State and local agencies to work collaboratively on the remaining public assets.

Tasks

1. Initiate a study to determine the benefits of using asset management plans for all segments of the Interstate System. The study should include analysis of the economic, social, and political impacts of requiring such plans and the mechanisms necessary to implement such a requirement.
2. Document asset management practice in England, including national policy, performance indicators, and reporting requirements for national and local agencies. Draft correlating policy indicators and reporting requirements for the United States, which could provide guidance on reporting national, regional, and local transportation network performance.
3. Target a State or region to take a holistic view of the entire public asset inventory that provides increased funding flexibility.
4. Develop linkage between transportation planning and programming and asset management at the metropolitan planning organization (MPO) level.

Join with other efforts, agencies, and resources to embed asset management into existing efforts on an ongoing basis. Create a National Asset Management Steering Committee (NAMS) in the United States. Such an effort provides a platform to distribute information, provide training, and document best practices on transportation asset management nationally and abroad. Develop an easy-to-understand toolbox for asset management that can be applied at different levels of government. The tools should look beyond transportation to best practices in other industries. These tools should be available on a Web site for free downloading.

Objectives

1. Develop a resource clearinghouse for asset management in the United States that draws from and is directly tied to equivalent efforts internationally and is available in the public domain.
2. Market this clearinghouse to all levels of U.S. agencies and across all types of infrastructure.
3. Investigate whether U.S. efforts to document best asset management practices and provide resources can be integrated with existing international asset management consortia.
4. Participate annually in a national asset management forum to review progress, document case studies, develop curricula, and coordinate research efforts across infrastructure and Federal agencies.
5. Inform all levels of transportation agencies—State, MPO, and local—of this resource clearinghouse.

Tasks

1. Meet/communicate with FHWA and the Environmental Protection Agency (EPA) to discuss potential alliance of asset management efforts.
2. Develop a white paper discussing the relationships among AASHTO, FHWA, and EPA priorities and opportunities presented in asset management.
3. Contact the international NAMS to identify copyright restrictions and opportunities to add the United States to existing efforts and document U.S. case studies for inclusion in the existing library of best practices. Develop alternatives with recommendations for U.S. clearinghouse implementation.
4. Document the state of practice at the State and local transportation agency level in the United States as part of establishing a national approach to transportation asset management.
5. Communicate with State, MPO, and local transportation agencies to inform them of training, forums, and best practices.
6. Write articles for APWA Reporter, Public Roads, and appropriate State, municipal, and engineering journals.
7. Support benchmarking of the U.S. asset management process (rather than performance) for local, regional, and State agencies. This should include an assessment of the capability and execution of linking decisions to quantified asset-related costs and benefits as well as whether processes have been documented and how often this occurs. Efforts should consider incorporating the AASHTO self-assessment survey. Share results at various State, MPO, and local government conferences and in literature.
8. Create an automated survey tool in the public domain that participating agencies can complete and have results arrayed against comparable levels of governments.
9. Develop a national competition on transportation asset management under FHWA's Transportation Planning Excellence Awards Program.
10. Develop videos and training materials aimed at various levels of government.

Extend U.S. asset management practice through NCHRP and other research opportunities.

The scan team identified several potential research projects:

1. Conduct before-and-after studies on the effectiveness of asset management efforts and the identification of benefits.
2. Establish state-of-the-art practices for data collection and analysis for asset management.
3. Define and quantify risk categories for an asset management program.
4. Synthesize data management principles, collection, sampling, and auditing techniques for asset management.
5. Examine world experience with high-speed deflectograph technology, looking at the Denmark technology identified in the England case study.
6. Examine more closely transportation assets other than bridges and road pavement, such as appurtenances, transit, streetlights, etc.
7. Synthesize practice with how three-dimensional (3-D) or design files are linked to geographic information systems (GIS).

[1] See, for example, Kane, Anthony, R., "Why Asset Management Is More Critically Important Than Ever Before," Public Roads, March/April 2000á Vol. 63á No. 5, http://www.tfhrc.gov/pubrds/marapr00/kane.htm; Government Accounting Office, "HIGHWAY INFRASTRUCTURE: Interstate Physical Conditions Have Improved, but Congestion and Other Pressures Continue," GAO-02-571, May 2002, http://www.gao.gov/new.items/d02571.pdf; American Association of State Highway and Transportation Officials, "Transportation: The Bottom Line," 2002 http://transportation.org/bottomline/bottomline2002.pdf; U.S. Department of Transportation, "2002 Status of the Nation's Highways, Bridges, and Transit: Conditions & Performance," Report to Congress, 2003. https://www.fhwa.dot.gov/policy/2002cpr/.