ANNUAL REPORT 2001

Office of Asset 

Management 
ANNUAL REPORT 2001

Office of 

Asset Management

NOVEMBER 2001

U.S. DEPARTMENT OF TRANSPORTATION

FEDERAL HIGHWAY ADMINISTRATION

OFFICE OF ASSET MANAGEMENT
Annual Report 2001 • 3

Note From the Director 5

Office of Asset Management: Its Mission 7

Principles of Transportation Asset Management 8

What Is Asset Management? 8

Why Asset Management? 8

What Are the Key Elements of Asset Management? 10

Office of Asset Management: Initiatives 2000–2001 11 

System Management and Monitoring 11

Construction and System Preservation 12

Evaluation and Economic Investment 14

Office of Asset Management: Partnership Activities 16

CONTENTS
4 • Office of Asset Management
Annual Report 2001 • 5

Office of Asset Management, Infrastructure Core Business Unit, 

Federal Highway Administration

The Federal Highway Administration’s Office of Asset Management is pleased to

present this 2001 Annual Report.The Office is charged with providing tools, techniques, and information to support the stewards of the Nation’s transportation 

system as they work to ensure that the traveling public—both today and in the future—

will enjoy a transportation system maintained and operated to the highest and most costeffective standards.

The Office of Asset Management looks at the entire highway system from the owners’

and users’ points of view, as well as from engineering and economic perspectives. Highway agencies and users desire a highway system that is reliable and efficient. Users of

today’s system ask whether their tax dollars are being spent wisely on the maintenance and

operation of the highway network.They want less congestion, and they want roads that

are engineered to be safer, to perform better, and to last longer.

Transportation Asset Management is a strategic approach to managing and investing in

transportation infrastructure. It is a business process and a decision-making framework that

covers an extended time horizon and considers a broad range of assets. It enables the ongoing monitoring of system performance.The Asset Management approach incorporates

the engineering and economic assessments of trade-offs between alternative investment

options, both at the project level and at the system level, and presents this information to

management to assist in making investment decisions.

This Report describes what we have accomplished and the many projects and initiatives that are currently underway. For example, we have initiated a major effort to develop

guidelines and a prototype system for highway and transit tunnel management.We have

also organized and conducted several technical conferences, developed software and analytical tools, and produced a variety of informative materials on engineering economic

analysis, highway construction, preservation and quality management, financial reporting,

and data management and integration. Existing efforts will continue in the coming year,

some projects will come to fruition, and new activities will be initiated.We look forward

to pursuing these ongoing activities and to future work with our partners throughout the

country as we apply Asset Management tools and principles to improve the performance

of our Nation’s highways.

Madeleine Bloom

Director, Office of Asset Management

NOTE FROM THE DIRECTOR
6 • Office of Asset Management

The Office of Asset Management serves as an advocate for 

Asset Management; for pavement management and analysis; 

for bridge management and inspection; for construction and

preservation activities; for engineering/economic analysis 

applications; for data integration; and for technology 

development, outreach, and partnering initiatives. 
Annual Report 2001 • 7

The mission of the Office of Asset Management is to provide leadership

and expertise in the systematic application of management and investment strategies for highway infrastructure assets.The Office has the following key responsibilities:

• Provide national guidance on Asset Management principles for highway 

system administration.

• Develop a strategic framework, processes, and methods for managing individual assets such as pavements, bridges, tunnels, and other infrastructure.

• Develop practical and innovative resource allocation tools and techniques.

• Provide technical assistance and training on effective information and data

management strategies to support comprehensive and integrated infrastructure decision-making.

• Partner with governmental groups at the Federal, State, and local levels, as

well as with academia and private industry, to conduct nationwide research,

development, and technology programs.

The Office of Asset Management serves as an advocate for Transportation Asset

Management; for pavement management and analysis; for bridge management

and inspection; for construction and preservation activities; for engineering/ 

economic analysis applications; for data integration; and for technology development, outreach, and partnering initiatives.

OFFICE OF ASSET MANAGEMENT: ITS MISSION
8 • Office of Asset Management

The Office of Asset Management was

established in 1999.The Office develops,

enhances, delivers, and promotes the use

of tools and techniques to support the implementation of Transportation Asset Management

concepts and principles. These tools and techniques are delivered through technical assistance

and training services.

Cooperative arrangements with organizations

such as the American Association of State Highway and Transportation Officials (AASHTO),

the Transportation Research Board (TRB), and

industry associations are a top priority of the

Office. “Partnership” is a guiding theme in the

work the Office undertakes, and its services are

available to all State departments of transportation (DOTs) and other agencies.

What Is Asset Management?

Transportation Asset Management has been a

new term to many. The Office recognized this

early on and undertook a major effort to explain

what the term means and what the Office does.

This effort resulted in the development and publication of the Asset Management Primer, a guidebook on the basic concepts and principles of

Asset Management.

As stated in the Primer, Asset

Management is not a specific product or service, but rather a way of

doing business that will apply differently from organization to organization. It is a framework for making

decisions in order to use resources

efficiently. Assets can take various

forms—they can be people, money,

information, and physical resources.

The Federal Highway Administration (FHWA) is currently focusing

on physical assets such as pavements,

PRINCIPLES OF 

TRANSPORTATION ASSET MANAGEMENT

structures, tunnels, and hardware. Over time, this

focus will be expanded to include the full range

of transportation assets.

The Asset Management framework in broad

terms consists of these elements:

• The establishment of performance expectations, consistent with goals, available budgets,

and organizational policies. These expectations guide the analytical and decisionmaking processes.

• The collection of inventory and performance

information to determine future system

requirements.

• The use of analytical tools and reproducible

procedures to provide cost-effective strategies

for allocating budgets to satisfy agency needs

and customer requirements.

• The presentation of alternative investment

options, which are evaluated consistent with

long-range plans, policies, and goals. Projects

are prioritized and selected, and programs are

implemented.

• The periodic reevaluation of the entire process

through performance monitoring.

Why Asset Management? 

State and local transportation agencies entered

this century facing a series of new and different

challenges.The responsibilities of these agencies

have shifted in focus from major highway construction projects, primarily the designing and

building of the Interstate Highway System, to

maintaining and preserving the existing system.

This shift presents a complex range of challenges

as user expectations for the system continue to

increase and demand continues to grow. Highways are more congested than ever in many parts

of the country. Increasing demand and normal
Annual Report 2001 • 9

Asset Management is not a specific product or service, but 

rather a way of doing business . . . . It is a framework for making 

decisions in order to use and invest in resources efficiently. 
10 • Office of Asset Management

wear and tear subject the system to ongoing

deterioration.

Layered on top of these challenges is the

impact of reductions in staff that are occurring at

the Federal and State levels as a result of government downsizing initiatives and the general

aging of our highway workforce.A robust economy during the last decade also made it difficult

for transportation agencies to compete for and

retain capable personnel.As transportation agencies lose experienced staff, they are finding that

it makes sense to use more systematic approaches that capture corporate memory and expertise

and aid in the decision-making process.

Additionally, in States throughout the country, transportation budgets are competing with

other budget demands.And legislative initiatives

are directing transportation funds to activities

outside traditional transportation projects.

Despite these changes, the public still expects

governmental agencies to preserve and protect

the transportation system they rely on. Public

expectations have in fact risen.Today, transportation agencies are expected to communicate and

explain their management approaches and results

to elected officials and the general public. In

addition, they must be fully accountable.

Clearly, a new way of doing business is

required to respond effectively to this mix of

strong, competing demands.The major shift that

is occurring as we start the new century requires

and demands a more systematic and thorough

process. State DOTs and other transportation

agencies are moving from constructing new

assets to using Asset Management principles in

their business practices to better manage the

entire infrastructure.

There Must Be a Decision-Making Framework. Asset

Management establishes a logical decision-making framework that incorporates principles from the disciplines of

engineering, economics, and business. Results reflect a systematic, organized, logical, and reproducible approach.

The Approach Must Be Analytically Based. Engineering, economic, performance, and behavioral models and associated data inputs provide the means to identify optimal

investment strategies.

There Must Be Effective Communication. The organization must have an effective means for transmitting the information required by stakeholders—ranging from legislators to

front-line practitioners. Information must also flow horizontally within the organization, across functions, asset classes, and

modes.

The Work Must Be Goal Driven. Asset Management

focuses on customer expectations along with the organizational structures, practices, policies, and budgets unique to

each agency and legislative environment. Performance goals

provide a way for transportation agencies to respond to the

public’s interest in how well their assets are being managed.

Alternatives Must Be Weighed. Asset Management gives

an agency the ability to perform “What if?” analysis.The ability to weigh and articulate the agency and user impacts of

choosing one alternative over another is vitally important.

Fact-Based Dialogue Is Essential. Asset Management

provides for fact-based dialogue among all interested parties.

Relevant, objective, and credible information is available to

all parties in the decision-making process.

What Are the Key Elements of Asset Management?

For an Asset Management approach to be applied effectively to a transportation system, the following elements are

essential:
Annual Report 2001 • 11

Three teams make up the Office of Asset

Management: (1) System Management

and Monitoring, (2) Construction and

System Preservation,and (3) Evaluation and Economic Investment. During the past year, these

teams took on a variety of research, development,training,technology deployment,technical

support, and outreach initiatives, many of which

were identified in last year’s annual report. Ongoing and new initiatives represent a wide range

of topics that are central to advancing Asset Management. Details of individual projects and initiatives undertaken by each team are given below.

System Management and Monitoring

The System Management and Monitoring

Team continues to develop and promote systematic approaches to management of highway

assets as reflected in the following activities:

• Initiated a contract to develop a first-generation guide and management system for highway and transit tunnels in cooperation with

the Federal Transit Administration and the

FHWA Office of Bridge Technology. The

project is currently underway and involves

two phases. The first phase will establish an

inventory of highway and transit tunnels in

the United States. The second phase will

develop detailed guidance for inspecting and

rating the condition of tunnel components,

establish preservation and rehabilitation strategies, develop a prototype database system, and

establish procedures for integrating tunnel

management systems with bridge management systems and Asset Management.

OFFICE OF ASSET MANAGEMENT:

INITIATIVES 2000–2001

• Initiated a contract that will demonstrate and

document how a State can use its pavement

management system to monitor the real-life

performance of its pavement network. The

project is designed to track the performance

of any critical pavement parameter. In this

project, Superpave is being used as an example. The project is also intended to demonstrate the importance and necessity of electronically linking all pavement databases such

as pavement management, materials, construction history, and quality assurance/quality control. In the future, case studies will be

conducted in States to show how the tracking

information can also be used to evaluate pavement projects that have warranty clauses.

• Participated in the design, development, and

testing of PONTIS 4.0. This new version of

the bridge management software is now available and is being deployed to States and other

agencies. A new National Highway Institute

(NHI) training course has been developed

and is available for this software.
12 • Office of Asset Management

• Developed implementation strategies for the

new AASHTO Provisional Standards for Pavement Data Collection to measure pavement

roughness, rutting, cracking and faulting.

• Completed a study in seven States where

pavement management systems have been

used to track the performance and pavement

life extension resulting from scheduled preventive maintenance activities such as crack

sealing, surface sealing, and similar treatments.

A report is being prepared.

• Completed a survey and report of all States

regarding their pavement management practices and methods for data collection and

analysis. The survey and report formed the

baseline for pavement management activities

for the team, as well as a summary of best

practices.

• Continued to develop the Pavement Management Software and Equipment Catalog. This

Catalog is an updated version of the very

popular Software Catalog that was published

in 1997. The new Catalog is expected to be

complete and ready for distribution in February 2002.

• Continued partnership with AASHTO to

investigate the feasibility of developing a management system for roadway hardware including guardrails, signs, crash cushions, signals,

and similar items on and adjacent to highways.

• Nearly completed the development of a new

NHI training course on “Engineering Applications for Pavement Management Systems.”

This new course is designed to demonstrate

best practices and techniques used by State

practitioners to derive real-life pavement performance information from existing pavement management system databases.

• Developed a Web site called “Communities of

Practice for Asset Management” in partnership with AASHTO.This interactive Web site,

currently running off the FHWA server, consists of eight group areas focused on specific

aspects of Asset Management.The group areas

are managed and supervised by facilitators,

including staff from the Office of Asset Management.

• Initiated a contract to develop a new NHI

course on Transportation Asset Management.

This new course will be a companion to the

new AASHTO Guide to Transportation Asset

Management.

Construction and System Preservation

The Construction and System Preservation

Team has been developing analysis, evaluation,

and monitoring tools as well as providing States

with technical support, guidance, and training to

reduce the deterioration and improve the overall

quality and performance of the highway system.

Following are some of the noteworthy accomplishments of this team:

• Coordinated with the National Partnership

for Highway Quality in its efforts to identify

and promote concepts, activities, and technologies that have the potential for improving

the quality of planning, design, construction,

and maintenance of the Nation’s highways.

These include a variety of Continuous Quality Improvement concepts

and techniques.
Annual Report 2001 • 13

• Developed and made available an NHI Training

Course called “Use of Critical Path Methods for

Estimating Scheduling and Timely Completion.”

Unlike its predecessors, this course is geared towards

early project completion and addressing motorists’

concerns about the prolonged existence of work

zones.

• Provided support to AASHTO in the development

and propagation of the SiteManager Construction

Management System. Through its computerized

database format, SiteManager offers State DOTs

many potential benefits in managing construction

projects.

• Provided leadership and technical support to the

Transportation Curriculum Coordination Council

(TCCC), which consists of representatives from various regional technician training and certification

groups, the private sector, FHWA, and NHI.

Through the TCCC the team responds to the training and certification needs of State DOTs and industry in the areas of highway construction, inspection,

and materials testing and certification.

• Continued development and marketing of improved

pavement smoothness measurement and analysis,

working through the Pavement Smoothness Expert

Task Group and in cooperation with the FHWA

Office of Pavement Technology. Initiated development of training materials for project personnel and

for engineers working with profile technology.

• Continued to develop pavement preservation programs through publication and distribution of stateof-the-practice CD-ROMs, videotapes, and other

materials on pavement preservation techniques to all

State DOTs.

• Developed and made available two NHI training

courses on pavement preservation techniques:“Pavement Preservation: The Preventive Maintenance

Concept” and “Pavement Preservation: Selecting

Pavements for Preventive Maintenance.”
14 • Office of Asset Management

sion and Analysis—for State and Local Governments. GASB 34 calls for State, local, and

municipal governments to report the original

cost of infrastructure constructed or improved

since 1980 and, for each reporting year, the

cost of using the assets. GASB 34 will have an

enormous impact on how transportation

investment decisions are determined and

implemented. For this reason, GASB 34 provides great motivation for transportation

agencies to adopt Transportation Asset Management concepts and principles.

• Conducted a peer-exchange workshop in

cooperation with the AASHTO Task Force

on GASB 34.The meeting provided participants with an understanding of the new 

standard and an opportunity to share information and ideas with individuals from other

agencies on how they intend to respond to

the GASB reporting requirements. Speakers

were invited to talk about various perspectives

of GASB 34.

• Continued to develop and refine the LifeCycle Cost Analysis (LCCA) instructional

software designed to support the evaluation of

alternative pavement design decisions on the

basis of agency and user life-cycle costs. The

model will account for uncertainty in costs

and performance, and provide outputs for the

use of risk analysis in decision-making.Teaching materials are also being developed. The

software will be initially distributed to State

DOT officials via courses offered by the

FHWA Resource Centers.

• Developed a prototype version and conducted a pilot evaluation of the Highway Economic Requirements System/State Level

(HERS/ST).HERS/ST evaluates the impacts

of alternative program structures on highway

condition, performance, and user cost levels.

• Developed and completed an agency-wide,

national Customer Satisfaction Survey for

measuring and tracking the public’s perception of and satisfaction with the Nation’s

highway system.

• Participated in pooled-fund studies and provided technical support on the safety and

mobility of the highway system during construction and maintenance, including control

of hazardous wastes and application of innovative technologies for work zone traffic control and safety; accelerated construction; and

use of new materials, practices, and methods.

• Participated in and provided support to various AASHTO Committees/Subcommittees,

including coordinating and conducting technical conferences, committee meetings, and

workshops.

Evaluation and Economic Investment

The Evaluation and Economic Investment

Team develops, recommends, and advances

engineering economic analysis and evaluation

tools, data integration and management

approaches, and other asset management techniques for use by State DOTs.

These tools and techniques,which

can be applied at multiple levels of

the transportation system or to

specific projects, allow objective

and informed decisions to be

made on the transportation assets.

The team has been involved in the

following activities:

• Published the GASB 34 Primer,

which details the Governmental

Accounting Standards Board’s

Statement 34, Basic Financial Statements—and Management’s Discus-
Annual Report 2001 • 15

It uses incremental benefit-cost analysis in simulating investment decisions.

The team conducted a HERS/ST

workshop where participants from

State DOTs and other agencies had

the opportunity to learn about the

uses and mechanics of the model, to

assess the appropriateness of the model

in State resource allocation decisionmaking, and to make suggestions for

improvements.

• Initiated development of HERS/ST

Version 1.0. The software, with training,will be distributed to State officials

in FY 2002.The new software is based

on the prototype but will be significantly more user-friendly and will

accept a broader array of Statesupplied data.

• Published the Data Integration Primer

and the Data Integration Glossary for

Asset Management data integration in

State DOTs.These documents contain

information and ideas on the principles and benefits of data integration,

alternative approaches and strategies,

experiences from agencies that have integrated their databases, application of tools and

technologies, and common problems or barriers encountered and ways to overcome

them. The team is also developing more

detailed case studies of data integration experiences in State DOTs.

• Organized jointly with the AASHTO Task

Force on Asset Management a Data Integration Forum and Peer Exchange intended for

information management practitioners in

transportation agencies. The forum,

scheduled for December 2001, will

provide participants an overview of the

state of the practice in data integration,

as well as an opportunity to share their

experiences and concerns in this area.

• Initiated the development of an executive-level Engineering Economic

Analysis course for transportation managers. The course will be offered to

FHWA field executives in FY 2002.

• Participated in various activities of the

AASHTO Task Force on Transportation

Asset Management, TRB Task Force 

on Asset Management, and the National Cooperative Highway Research 

Program (NCHRP) by providing technical inputs and reviews on ongoing

and proposed research projects, developing research topics, reviewing publications, and organizing meetings and

conferences.

The many initiatives described

above underscore the progress

FHWA’s Office of Asset Management made during the past year in

providing products, information,

tools, training, and technical support. These products and programs

are valuable to State DOTs as well

as our other transportation partners.

As emphasized in our 2000 Annual

Report and repeated here, “partnership” is the underlying theme of

our activities and accomplishments.
16 • Office of Asset Management

As indicated in our office’s individual team initiatives, we have established

and continued to strengthen key partnerships with many organizations

including AASHTO, TRB, the National Partnership for Highway

Quality, the Foundation for Pavement Preservation, and other industry associations.

The Office is actively involved with the TRB Task Force on Asset Management, which sponsored four sessions on Asset Management at the January 2001

TRB Annual Meeting and held two meetings to develop a research agenda for

future TRB and Asset Management efforts. The Task Force recommended

establishing a permanent TRB Committee on Transportation Asset Management to take part in activities in the following areas:

1. Defining Asset Management and its benefits,

2.Technical aspects of Asset Management,

3. Sustaining Asset Management and demonstrating effectiveness,

4. Coordination with other organizations.

The Task Force plans to produce a document describing the state of the practice in Asset Management.

The Office continues to work jointly with several AASHTO committees.

With the AASHTO Task Force on Transportation Asset Management we have

been providing technical support in the development of the Asset Management

Guide through an NCHRP project. Other NCHRP research projects related

to Asset Management will be underway soon. The Office also works closely

with the AASHTO Committees/Subcommittees on Highways, Bridges and

Structures, Maintenance, and Transportation Finance.

The Office participates with the Asset Management subgroup of the

National Research and Technology (R&T) Partnership Forum, which was

established by FHWA, AASHTO, and TRB to coordinate research and technology activities. In FY 2001, the Office contributed to the Forum by identifying major research theme areas, reviewing existing R&T programs related to

Transportation Asset Management, comparing current activities to future

requirements to determine gaps and duplications of effort, prioritizing research

gaps and identifying high priority areas, and establishing opportunities for partnering on current and future research.

OFFICE OF ASSET MANAGEMENT:

PARTNERSHIP ACTIVITIES
For further information on FHWA Asset Management

initiatives, contact:

Office of Asset Management

Federal Highway Administration

U.S. Department of Transportation

400 7th Street, S.W., HIAM-1

Washington, DC 20590

Telephone: 202-366-0392

Fax: 202-366-9981
Federal Highway Administration

U.S. Department of Transportation

400 7th Street, S.W., HIAM-1

Washington, DC 20590

Telephone: 202-366-0392

Fax: 202-366-9981

FHWA-IF-02-011