Providing Guidance to Practitioners in the Analysis of 

Benefits and Costs of Management and Operations Projects

Project Purpose

The FHWA Office of Operations developed the Benefit/Cost Analysis for Operations Planning Desk Reference to provide practitioners with practical guidance, tools, and information for conducting benefit/cost analysis for a wide range of Transportation System Management and Operations 

(TSM&O) strategies and projects. 

Project Need

Due to an increasingly competitive fiscal environment, state, regional, and local transportation planning organizations around the country are being 

asked more than ever to justify their programs and expenditures. Transportation System Management and Operations (TSM&O) programs have not 

escaped this scrutiny and are routinely asked to rank their projects against traditional expansion projects, as well as conduct other “value”-related 

exercises.

This requirement can put TSM&O projects at a disadvantage since many specialists in the operations arena have limited experience in performing benefit-cost analysis and many of the established tools available for conducting benefit-cost analysis for more traditional infrastructure projects are poorly 

suited to analyzing the specific performance measures, project timelines, benefits, and life-cycle costs associated with operational improvements.

FHWA Operations Benefit/Cost Analysis Desk Reference

The FHWA Office of Operations initiated this project in recognition that practitioners were in need of relevant and practical guidance in how to effectively conduct benefit/cost analysis of a wide spectrum of transportation system management and operations strategies. The Operations Benefit/Cost 

Analysis Desk Reference project is intended to provide practitioners with relevant guidance on how to effectively and reliably estimate the benefits and 

costs of operations strategies.

Two primary products were developed in the project: the Operations Benefit/Cost Analysis Desk 

Reference document (http://www.ops.fhwa.dot.gov/publications/fhwahop12028/index.htm), and a 

supporting spreadsheet-based decision support tool named the Tool for Operations Benefit/Cost 

(TOPS-BC). The Desk Reference document is intended to provide pragmatic information answering 

the likely questions of a wide range of practitioners, ranging from the simple overview questions, such 

as “What is B/C analysis and what role does it play in the Operations planning process?” To more 

focused questions on the actual conduct of B/C analysis for specific TSM&O strategies, for example:

•	 What are the appropriate performance measures to consider for particular strategies, and how 

can these outputs be quantified and monetized?

•	 Where can performance data be obtained to support the analysis?

•	 How can life-cycle costs for the full-span of the project/strategy be estimated?

To complex questions related to many of the difficult to quantify benefits related to TSM&O, including:

•	 What are the impacts of combining different TSM&O strategies or combining TSM&O with 

other non-TSM&O strategies, or how can the benefits of strategies, such as improved interagency coordination, be assessed?

•	 How can strategies targeted at nonrecurring conditions be analyzed?

The Desk Reference document includes an introduction to B/C analysis, including a primer on the general process and a description of common B/C terminology, for those practitioners just getting started 

with B/C analysis. For planners who may be familiar with B/C analysis, but less familiar with TSM&O 

strategies, the Desk Reference provides an introduction to the strategies and highlights their likely benefits. 

November 2012

Source: Federal Highway Administration.

FHWA Operations Benefit/Cost 

Analysis Desk Reference 
TOPS-BC

This Desk Reference is supported by an Operations B/C decision support tool, called the Tool for Operations Benefit/Cost (TOPS-BC). This 

spreadsheet-based tool is designed to assist practitioners in conducting 

benefit/cost analysis by providing several key capabilities.

The first two primary capabilities of TOPS-BC are centered on providing 

practitioners access to information that may be used to structure their 

analysis approach. The last two capabilities – the capability to estimate 

life-cycle cost estimates and the capability to estimate benefits for various 

strategies – provide the opportunity for the user to enter data regarding 

their projects and traffic conditions in order to conduct a simple sketch 

planning level benefit/cost analysis within the tool. In addition to these 

capabilities, TOPS-BC is also intended to serve as a repository of relevant 

parameters and values appropriate for use in benefit/cost analyses. 

While the sketch planning level analysis provided by TOPS-BC may be 

suitable for many planning studies, TOPS-BC was not intended to serve 

as a single analysis tool to be used for all situations. As discussed in the 

Desk Reference, analyses requiring detailed analysis and high-levels of 

confidence in the accuracy of the results may require more advanced 

analysis capabilities than provided directly within TOPS-BC. Even in 

these situations, however, TOPS-BC may provide value in serving as a 

framework for monetizing benefits and comparing with costs. Outputs 

from more advance simulation or dynamic traffic assignment tools may 

be used as inputs to TOPS-BC, overriding the performance impacts 

normally calculated internal to the tool.

The TOPS-BC tool provides the ability to conduct benefit/cost analysis 

of a wide range of strategies including deployments such as:

•	 Arterial Signal Coordination, Ramp Metering, Incident 

Management, Traveler Information, HOT Lanes, Variable Speed 

Control, and Travel Demand Management.

Source: Federal Highway Administration. 

Additional guidance and research is also provided in the tool and the 

Desk Reference document covering:

•	 Supporting strategies such as Traffic Surveillance, Traffic 

Management Centers, and Communications; and

•	 Nonphysical strategies such as System Integration and 

Interagency Coordination.

TOPS-BC provides the following capabilities:

•	 Provides the ability for users to investigate the expected 

range of impacts associated with previous deployments 

and analyses of many TSM&O strategies.

•	 Provides a screening mechanism to help users identify 

appropriate tools and methodologies for conducting a 

B/C analysis based on their analysis needs.

•	 Provides a framework and default cost data to estimate 

the life-cycle costs of various TSM&O strategies, including 

capital, replacement, and continuing operations and 

maintenance (O&M) costs.

•	 Provides a framework and suggested impact values for 

conduct simple B/C analysis for selected TSM&O strategies.

Federal Highway Administration

Project Contacts

If you have any questions regarding the project, or would like to be considered as a potential workshop delivery location, please contact one of 

the individuals below:

Project Workshops

In order to inform practitioners on the availability of the guidance materials, as well as provide an opportunity for additional testing and vetting of 

the material in a real-world analysis situations, the FHWA, as part of the Planning for Operations initiative, has technical workshop opportunities 

available. These workshops cover both the guidance available in this Desk Reference, as well as an overview of the proper set up and application 

of the TOPS-BC decision-support capabilities.

Jim Hunt

(717) 221-4422

Jim.hunt@dot.gov

Wayne Berman

(202) 366-4069

Wayne.berman@dot.gov

Ralph Volpe

(404) 562-3637

Ralph.volpe@dot.gov

FHWA-HOP-13-004