Research, Development, and Technology

Turner-Fairbank Highway Research Center

6300 Georgetown Pike

McLean, VA 22101-2296

PUBLICATION NO. FHWA-HRT-23-021 MARCH 2023 

Lifecycle Cost Analysis RealCost 

User Manual
FOREWORD

This user manual presents guidance and recommendations for using RealCost version 3.0 to 

conduct lifecycle cost analysis (LCCA) (Federal Highway Administration (FHWA) 2021). 

FHWA’s RealCost 3.0 is a Microsoft® Excel®-based LCCA tool. This user manual reflects 

RealCost 3.0’s updated and enhanced input data requirements, functions, analysis features, and 

user interface.

The RealCost 3.0 tool has been updated to work on both Excel 32- and 64-bit systems. This 

update avoids the need for installation or availability of any third-party or other commercial 

components other than Excel 2010 or newer on end users’ computers.

The user manual contains a brief introduction to LCCA methodology, explained in detail within 

FHWA’s Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin (Walls and 

Smith 1998). The user manual explains the steps to install and operate RealCost 3.0. Appendix A 

details the procedure to compute LCCA using examples of three pavement and one bridge 

project. Appendix B helps users understand the customization of RealCost 3.0 for their specific

needs. Specifically, the manual provides customization recommendations for linking RealCost 

3.0 with an example agency cost Excel spreadsheet, simplifying the interpretation by developing 

output distributions based on the difference in the lifecycle cost alternatives.

State highway agency personnel and consultants responsible for conducting and reviewing 

LCCA will find the user manual of interest. The user manual adheres to the technical knowledge 

provided in the Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin that 

FHWA published in 1998 (Walls and Smith 1998). 

Mark Swanlund 

Acting Director, Office of Infrastructure

Research and Development

Notice

This document is disseminated under the sponsorship of the U.S. Department of Transportation 

in the interest of information exchange. The U.S. Government assumes no liability for the use 

of the information contained in this document. This report does not constitute a standard, 

specification, or regulation. 

The U.S. Government does not endorse products or manufacturers. Trademarks or 

manufacturers’ names appear in this report only because they are considered essential to the 

objective of the document. 

Quality Assurance Statement

The Federal Highway Administration (FHWA) provides high-quality information to serve 

Government, industry, and the public in a manner that promotes public understanding. Standards 

and policies are used to ensure and maximize the quality, objectivity, utility, and integrity of its 

information. FHWA periodically reviews quality issues and adjusts its programs and processes to 

ensure continuous quality improvement. 
TECHNICAL REPORT DOCUMENTATION PAGE

1. Report No.

FHWA-HRT-23-021

2. Government Accession No. 3. Recipient’s Catalog No.

4. Title and Subtitle

Lifecycle Cost Analysis RealCost User Manual

5. Report Date

March 2023

6. Performing Organization Code:

7. Author(s)

Kelly L. Smith (ORCID: 0000-0003-0460-0460), Linda M. 

Pierce (ORCID: 0000-0003-4874-6293), George K. Chang

(ORCID: 0000-0002-4945-8827), and Atish A. Nadkarni 

(ORCID: 0000-0002-7931-1965) 

8. Performing Organization Report No.

9. Performing Organization Name and Address

Engineering & Software Consultants, Inc.

14123 Robert Paris Court, Chantilly, VA 20151

The Transtec Group

6111 Balcones Drive, Austin, TX 78731

SAIC

1710 SAIC Drive, McLean, VA 22102

Applied Pavement Technology, Inc.

115 W. Main Street, Suite 400, Urbana, IL 61801

10. Work Unit No.

11. Contract or Grant No.

DTFH61-07-D-00028-T-09004 and 

DTFH6117D00005L/693JJ318F000355

12. Sponsoring Agency Name and Address

Office of Infrastructure Research and Development

Federal Highway Administration

6300 Georgetown Pike

McLean, VA 22101-2296

13. Type of Report and Period Covered

Software user manual; October 2009–August

2010 and September 2018–June 2020

14. Sponsoring Agency Code

HRDI-20

15. Supplementary Notes

The Contracting Officer’s Representative was Nadarajah Sivaneswaran (HRDI-20; ORCID: 0000-0003-0287-

664X).

16. Abstract

Lifecycle cost analysis (LCCA) is an engineering economic analysis tool that compares the relative merit of 

competing project implementation alternatives. LCCA considers both the agency and user costs incurred during 

the service life of an asset and helps transportation officials select the most preferred alternative. Additionally, 

LCCA introduces a structured methodology that accounts for the effects of agency activities on transportation 

users and provides a means to balance those effects with the system’s construction, rehabilitation, and 

preservation needs. This manual aims to help users of the Federal Highway Administration’s (FHWA’s) 

RealCost 3.0, a Microsoft® Excel®-based LCCA tool to conduct LCCA. This user manual reflects the updated 

and enhanced RealCost 3.0’s input data requirements, functions, analysis features, and user interface. The

RealCost 3.0 tool has been updated to work on both Excel 32- and 64-bit versions and avoids the need for 

installation or availability of any third-party or other commercial components other than Excel 2010 or newer on 

end users’ computers. The user manual contains a brief introduction to LCCA and adheres to the LCCA 

methodology explained in detail within FHWA’s Life-Cycle Cost Analysis in Pavement Design Interim Technical 

Bulletin (Walls and Smith 1998). It also explains the steps to install and operate RealCost 3.0. Appendix A 

details the procedure to compute LCCA using examples of three pavement and one bridge projects. Appendix B 

helps users understand the customization of RealCost 3.0 for their specific needs. The user manual will interest 

State highway agency personnel and consultants responsible for conducting and reviewing LCCA.

17. Key Words

RealCost, lifecycle cost analysis, LCCA

18. Distribution Statement

No restrictions. This document is available to the public 

through the National Technical Information Service, 

Springfield, VA 22161.

https://www.ntis.gov

19. Security Classif. (of this report)

Unclassified

20. Security Classif. (of this page)

Unclassified

21. No. of Pages

146 

22. Price

N/A

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized
ii

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
iii

TABLE OF CONTENTS

CHAPTER 1. INTRODUCTION ................................................................................................ 1

LCCA and RealCost ............................................................................................................... 2

Purpose of the User Manual................................................................................................... 8

Organization of the User Manual .......................................................................................... 8

Suggested Reading .................................................................................................................. 9

CHAPTER 2. THE BASICS ...................................................................................................... 11

Setup ....................................................................................................................................... 11

System Requirements........................................................................................................ 11

Download RealCost .......................................................................................................... 11

Starting, Navigating, and Exiting ........................................................................................ 11

Working Folder Setup ....................................................................................................... 11

Starting RealCost .............................................................................................................. 16

Moving Between the Switchboard and Worksheets ......................................................... 16

CHAPTER 3. USING REALCOST IN LCCA......................................................................... 23

Entering, Saving, and Loading Data ................................................................................... 23

Project-Level Versus Alternative-Level Data ................................................................... 23

Project-Level Data Inputs ................................................................................................. 25

Saving and Loading Project-Level Data ........................................................................... 33

Alternative-Level Data Inputs ........................................................................................... 34

Saving and Loading Alternative-Level Data .................................................................... 38

Probabilistic Input ............................................................................................................. 39

Simulation and Outputs ....................................................................................................... 44

Deterministic Results ........................................................................................................ 44

Probabilistic Analysis ....................................................................................................... 45

Traffic Calculator ................................................................................................................. 55

APPENDIX A. REALCOST EXAMPLE EXERCISES ......................................................... 57

Pavement LCCA Example 1—Rural New Construction .................................................. 58

LCCA Inputs ..................................................................................................................... 58

Lifecycle Cost Computation ............................................................................................. 62

Preferred Alternative ......................................................................................................... 70

Pavement LCCA Example 2—Urban Reconstruction ...................................................... 70

LCCA Inputs ..................................................................................................................... 70

Lifecycle Cost Computation ............................................................................................. 75

Preferred Alternative ......................................................................................................... 85

Pavement LCCA Example 3—Rural Reconstruction and Widening .............................. 85

LCCA Inputs ..................................................................................................................... 85

Lifecycle Cost Computation ............................................................................................. 89

Preferred Alternative ......................................................................................................... 96

Example 4: Bridge LCCA Example—Replacement of Rural Bridges ............................ 99

LCCA Inputs ................................................................................................................... 100

Lifecycle Cost Computation ........................................................................................... 107

Preferred Alternative ....................................................................................................... 112
iv

APPENDIX B. CUSTOMIZATION OF REALCOST .......................................................... 113

Linking a Cost Estimation Template ................................................................................ 113

Unit Bid Prices ................................................................................................................ 114

HMA (Alternative 1)....................................................................................................... 116

PCC Pavement (Alternative 2) ........................................................................................ 117

Changes in the Inputs worksheet of RealCost.xlsm........................................................ 118

Customized input and output ............................................................................................ 122

Simplified Analysis Results ................................................................................................ 125

APPENDIX C. REAL-WORLD APPLICATIONS OF REALCOST ................................. 127

California Department of Transportation ........................................................................ 127

Colorado Department of Transportation ......................................................................... 128

Florida Department of Transportation ............................................................................. 128

Maryland State Highway Administration ........................................................................ 129

Washington State Department of Transportation ........................................................... 129

GLOSSARY............................................................................................................................... 131

REFERENCES .......................................................................................................................... 135
v

LIST OF FIGURES

Figure 1. Illustration. Probabilistic LCCA process......................................................................... 3

Figure 2. Graph. Probability density and cumulative distribution curves. ..................................... 4

Figure 3. Chart. Correlation sensitivity plot for a given alternative (Walls and Smith 1998). ....... 4

Figure 4. Screenshot. An example input screen for data entry, Value of User Time. .................... 7

Figure 5. Screenshot. RealCost working folder setup—Excel/Options/Trust Center/Trust 

Center Settings. ................................................................................................................... 13

Figure 6. Screenshot. RealCost working folder setup—Excel/Options/Trust Center/Trust 

Center Settings/Trusted Locations. ..................................................................................... 14

Figure 7. Screenshot. RealCost working folder setup—Excel/Options/Trust Center/Trust 

Center Settings/Trusted Locations/Add New Location. ..................................................... 15

Figure 8. Screenshot. The opening screen of RealCost. ............................................................... 16

Figure 9. Screenshot. The RealCost Switchboard overlaid on the worksheets. ........................... 17

Figure 10. Screenshot. Opening the Switchboard from the RealCost menu. ............................... 18

Figure 11. Screenshot. The five operational categories of the RealCost Switchboard. ................ 19

Figure 12. Illustration. The hierarchy of project-level and alternative-level data. ....................... 24

Figure 13. Screenshot. Project Details input screen. .................................................................... 25

Figure 14. Screenshot. Analysis Options input screen. ................................................................ 26

Figure 15. Screenshot. Traffic Data input screen. ........................................................................ 28

Figure 16. Screenshot. Value of User Time input screen. ............................................................ 30

Figure 17. Screenshot. Traffic Hourly Distribution input screen.Table 6. Traffic Hourly 

Distribution inputs. .............................................................................................................. 31

Figure 18. Screenshot. Added Time and Vehicle Stopping Costs input screen. .......................... 33

Figure 19. Screenshot. Switchboard buttons to save and open project-level inputs. .................... 34

Figure 20. Screenshot. Alternative input screen. .......................................................................... 35

Figure 21. Screenshot. Probabilistic Input Add-in menu on the input worksheet. ....................... 40

Figure 22. Screenshot. Probabilistic distribution selection........................................................... 41

Figure 23. Screenshot. Input parameters for a probabilistic function. .......................................... 41

Figure 24. Screenshot. The ellipsis button accesses probabilistic inputs for the specific data 

element. ............................................................................................................................... 42

Figure 25. Screenshot. Creating a probabilistic input—default is deterministic. ......................... 43

Figure 26. Screenshot. Creating a probabilistic input—assign a probabilistic function. .............. 43

Figure 27. Screenshot. Creating a probabilistic input—enter the parameters for a 

probabilistic function........................................................................................................... 44

Figure 28. Screenshot. Deterministic Results output screen......................................................... 45

Figure 29. Screenshot. Simulation input screen. ........................................................................... 45

Figure 30. Screenshot. Simulation input screen at the conclusion of a simulation run. ............... 46

Figure 31. Screenshot. Probabilistic Results output screen. ......................................................... 47

Figure 32. Screenshot. Statistical results of a probabilistic simulation. ....................................... 47

Figure 33. Graph. Probability density function. ........................................................................... 48

Figure 34. Graph. Cumulative distribution function..................................................................... 49

Figure 35. Graph. Cumulative distribution curves for two design strategy alternatives. ............. 49

Figure 36. Screenshot. Worksheet for calculating difference distribution. .................................. 50

Figure 37. Screenshot. Establishing a cell as a RealCost Output—Step 1. .................................. 51

Figure 38. Screenshot. Establishing a cell as a RealCost Output—Step 2. .................................. 51
vi

Figure 39. Graph. Difference distribution curve for two design strategy alternatives. ................ 52

Figure 40. Chart. Correlation sensitivity plot (“tornado graph”). ................................................. 53

Figure 41. Screenshot. The Traffic Calculator worksheet. ........................................................... 55

Figure 42. Graph. Present value agency costs—new construction example. ............................... 65

Figure 43. Graph. Present value user costs—new construction example. .................................... 65

Figure 44. Graph. Probability distribution of agency costs—rural new construction. ................. 68

Figure 45. Graph. Cumulative probability distribution of agency costs—rural new 

construction. ........................................................................................................................ 68

Figure 46. Graph. Probability distribution of user costs—rural new construction. ...................... 69

Figure 47. Graph. Cumulative probability distribution of user costs—rural new 

construction. ........................................................................................................................ 69

Figure 48. Graph. Present value agency costs—urban reconstruction. ........................................ 77

Figure 49. Graph. Present value of user costs—urban reconstruction.......................................... 77

Figure 50. Graph. Probability distribution of agency costs—urban reconstruction. .................... 80

Figure 51. Graph. Cumulative probability distribution of agency costs—urban 

reconstruction. ..................................................................................................................... 81

Figure 52. Graph. Probability distribution of user costs—urban reconstruction. ......................... 81

Figure 53. Graph. Cumulative probability distribution of user costs—urban reconstruction. ..... 82

Figure 54. Screenshot. Tornado graphs—urban reconstruction. .................................................. 83

Figure 55. Graph. Present value agency costs—rural reconstruction/widening. .......................... 89

Figure 56. Graph. Present value of user costs—rural reconstruction/widening. .......................... 90

Figure 57. Graph. Probability distribution of agency costs—rural reconstruction/widening. ...... 91

Figure 58. Graph. Cumulative probability distribution of agency costs—rural 

reconstruction/widening. ..................................................................................................... 92

Figure 59. Graph. Probability distribution of user costs—rural reconstruction/widening. .......... 92

Figure 60. Graph. Cumulative probability distribution of user costs—rural 

reconstruction/widening. ..................................................................................................... 93

Figure 61. Screenshot. Tornado graphs—rural reconstruction/widening. .................................... 94

Figure 62. Graph. Cumulative probability distribution difference—total costs. .......................... 95

Figure 63. Graph. Cumulative probability distribution difference—agency costs. ...................... 95

Figure 64. Graph. Cumulative probability distribution difference—user costs. ........................... 96

Figure 65. Screenshot. Example worksheet containing bid item cost data. .................................. 97

Figure 66. Screenshot. Example worksheet for calculating activity cost from bid item costs. .... 98

Figure 67. Chart. Example tornado chart including bid items. ..................................................... 99

Figure 68. Graph. Present value agency costs—rural bridge replacement. ................................ 108

Figure 69. Graph. Present value user costs—rural bridge replacement...................................... 108

Figure 70. Graph. Probability distribution of agency costs—rural bridge replacement. ............ 109

Figure 71. Graph. Cumulative probability distribution of agency costs—rural bridge 

replacement. ...................................................................................................................... 110

Figure 72. Graph. Probability distribution of user costs—rural bridge replacement.................. 110

Figure 73. Graph. Cumulative probability distribution of user costs—rural bridge 

replacement. ...................................................................................................................... 111

Figure 74. Screenshot. Tornado graphs—rural bridge replacement. .......................................... 112

Figure 75. Screenshot. Move the Agency Cost Computation Worksheet to the RealCost 

Program. ............................................................................................................................ 114

Figure 76. Screenshot. Unit Bid Price Worksheet. ..................................................................... 115
vii

Figure 77. Screenshot. Definition of the probabilistic distribution for the Bid Item “Asphalt 

for Fog Seal.” .................................................................................................................... 116

Figure 78. Screenshot. Agency Cost Computation with Simulated Variable. ............................ 117

Figure 79. Screenshot. Summary of the Agency Cost for different activities of 

Alternative 1. ..................................................................................................................... 117

Figure 80. Screenshot. Input Worksheet. .................................................................................... 118

Figure 81. Screenshot. Designation of a User-Defined RealCost Output Variable. ................... 119

Figure 82. Screenshot. Sample customized report (1). ............................................................... 120

Figure 83. Screenshot. Sample customized report (2). ............................................................... 121

Figure 84. Screenshot. Sample customized report (3). ............................................................... 121

Figure 85. Screenshot. Worksheet for calculating difference distribution. ................................ 122

Figure 86. Screenshot. Establishing a cell as a RealCost Output—Add-in menu. ..................... 123

Figure 87. Screenshot. Establishing a cell as a RealCost Output—dialog. ................................ 124

Figure 88. Graph. Difference distribution curve for two design strategy alternatives. .............. 125
viii

LIST OF TABLES

Table 1. An example worksheet extract, Value of User Time. ....................................................... 8

Table 2. RealCost Switchboard command buttons and their functions. ....................................... 20

Table 3. LCCA steps and corresponding RealCost forms. ........................................................... 23

Table 4. Analysis Options inputs. ................................................................................................. 27

Table 5. Traffic Data inputs. ......................................................................................................... 29

Table 6. Traffic Hourly Distribution inputs. ................................................................................. 32

Table 7. Alternative inputs. ........................................................................................................... 37

Table 8. Examples of input probability distributions typically used in RealCost. ....................... 39

Table 9. Example of RealCost Extreme Tail Analysis Results—Alternative 1 Agency Cost...... 54

Table 10. Summary of activities and service life—rural new construction (HMA pavement 

(day work and night work)). ................................................................................................ 59

Table 11. Summary of activities and service life—rural new construction (PCC pavement 

(day work and night work)). ................................................................................................ 59

Table 12. Agency cost input values—rural new construction with HMA Pavement 

(day work). .......................................................................................................................... 60

Table 13. Agency cost input values—rural new construction with HMA pavement 

(night work). ........................................................................................................................ 60

Table 14. Agency cost input values—rural new construction with PCC pavement 

(day work). .......................................................................................................................... 61

Table 15. Agency cost input values—rural new construction with PCC pavement 

(night work). ........................................................................................................................ 61

Table 16. Work zone details—the rural new construction. .......................................................... 62

Table 17. Deterministic LCCA results—rural new construction example (1/2). ......................... 64

Table 18. Deterministic LCCA results—rural new construction example (2/2). ......................... 64

Table 19. Probabilistic LCCA results—rural new construction example. .................................... 67

Table 20. Summary of construction and future rehabilitation treatments—urban 

reconstruction with HMA pavement (day work and night work). ...................................... 71

Table 21. Summary of construction and future rehabilitation treatments—urban 

reconstruction with PCC pavement (day work and night work). ........................................ 72

Table 22. Agency cost input values—urban reconstruction with HMA pavement 

(day work). .......................................................................................................................... 72

Table 23. Agency cost input values—urban reconstruction with HMA pavement 

(night work). ........................................................................................................................ 73

Table 24. Agency cost input values—urban reconstruction with PCC pavement (day work). .... 73

Table 25. Agency cost input values—urban reconstruction with PCC Pavement 

(night work). ........................................................................................................................ 73

Table 26. Work zone details—urban reconstruction. ................................................................... 74

Table 27. Deterministic results—urban reconstruction (1/2). ...................................................... 76

Table 28. Deterministic results—urban reconstruction (2/2). ...................................................... 76

Table 29. Probabilistic results—urban reconstruction. ................................................................. 79

Table 30. Example of the extreme tail analysis—urban reconstruction (Alternative 1). ............. 84

Table 31. Summary of construction and future rehabilitation treatments—rural 

reconstruction/widening with HMA pavement. .................................................................. 86
ix

Table 32. Summary of construction and future rehabilitation treatments—rural 

reconstruction/widening with PCC pavement. .................................................................... 86

Table 33. Agency cost input values—rural reconstruction/widening with HMA pavement. ....... 87

Table 34. Agency cost input values—rural reconstruction/widening with PCC pavement. ........ 87

Table 35. Work zone details—rural reconstruction/widening. ..................................................... 88

Table 36. Deterministic results—rural reconstruction/widening (1/2). ........................................ 89

Table 37. Deterministic results—rural reconstruction/widening (2/2). ........................................ 89

Table 38. Probabilistic results—rural reconstruction/widening. .................................................. 90

Table 39. Summary of activities and service life—rural bridge replacement—Alternative 1: 

Conventional Steel Structure Bridge Design. ................................................................... 101

Table 40. Summary of activities and service life—rural bridge replacement—Alternative 2: 

Prestressed Concrete Structure Bridge Design.................................................................. 102

Table 41. Summary of maintenance costs—rural bridge replacement—Alternative 1: 

Conventional Steel Structure Bridge Design. ................................................................... 103

Table 42. Summary of maintenance costs—rural bridge replacement—Alternative 2: 

Prestressed Concrete Structure Bridge Design.................................................................. 103

Table 43. Agency unit cost input values—bridge LCCA example—Alternative 1: 

Conventional Steel Structure Bridge Design. ................................................................... 104

Table 44. Agency unit cost input values—bridge LCCA example—Alternative 2: 

Prestressed Concrete Structure Bridge Design.................................................................. 104

Table 45. Work zone details—rural bridge replacement. ........................................................... 106

Table 46. Deterministic LCCA results—rural bridge replacement (1/2). .................................. 107

Table 47. Deterministic LCCA results—rural bridge replacement (2/2). .................................. 107

Table 48. Probabilistic LCCA results—rural bridge replacement. ............................................. 109
x

LIST OF ABBREVIATIONS

AADT annual average daily traffic

CAB crushed aggregate base

Caltrans California Department of Transportation

CDOT Colorado Department of Transportation 

CPI Consumer Price Index

CPR concrete pavement restoration

DLL dynamic-link library

DP demonstration project

EUAC equivalent uniform annual cost

FDOT Florida Department of Transportation

FHWA Federal Highway Administration

GUI graphical user interface

HMA hot-mix asphalt

LCCA lifecycle cost analysis

M&R maintenance and rehabilitation

NCHRP National Cooperative Highway Research Program 

NPV net present value 

PCC portland cement concrete

SHA State highway agencies

TRB Transportation Research Board

VPD vehicles per day

VPHPL vehicles per hour per lane

VBA Visual Basic for Applications 

WSDOT Washington State Department of Transportation
1

CHAPTER 1. INTRODUCTION

Lifecycle cost analysis (LCCA) is an engineering economic analysis method for assessing the 

total cost of constructing, maintaining, and operating an asset or facility—or a system of assets

or facilities—over an extended period (typically, 30 yr or more). LCCA is a valuable investment 

analysis method for assisting transportation managers in evaluating various design strategy 

alternatives based on the costs incurred by both the agency and users of the facility (i.e., direct 

and indirect costs, respectively). 

In the roadway/transportation sector, LCCA can be used to quantify the differential costs of 

investment strategy alternatives for new construction, reconstruction, rehabilitation, and even 

preservation projects. LCCA assists in selecting the alternative with the lowest total cost, not just 

the lowest initial cost. In general, the LCCA process includes the following steps:

1. Establish design strategy alternatives. 

2. Determine the timing of activities for each alternative (e.g., year of application for 

rehabilitation and preservation treatments). 

3. Estimate agency and user costs for each alternative. 

4. Compute lifecycle costs for each alternative. 

5. Analyze the results to assess the sensitivity of each alternative to different input 

uncertainties.

However, an LCCA should only be used to compare project alternatives that provide equal 

benefits for the highway user (e.g., it cannot be used to compare a roadway widening project to 

an overlay project for the same roadway section). In addition, LCCA is not intended to be the 

only process used for deciding which design strategy alternative is the most applicable; several

other factors, such as risk, budget, and political and environmental issues, must also be 

considered. 

Most State highway agencies (SHAs) have developed and implemented LCCA techniques for 

use in selecting design strategy alternatives for new pavement construction or reconstruction 

projects, and several agencies use LCCA for rehabilitation projects. A survey conducted in 2009 

indicates that approximately 80 percent of the responding States (27 of 33 total responses) 

reported using LCCA for new construction projects, and 33 percent (11 of 33 total responses) 

reported using LCCA for rehabilitation projects (National Cooperative Highway Research 

Program (NCHRP) 2009). A similar survey conducted in 1984 indicated that about 45 percent of 

States (22 of 49 total responses) use lifecycle costing for pavements (Peterson 1984). Significant 

progress in the implementation of LCCA has been made in the nearly 3 decades that separate 

these two surveys, thus indicating the significant benefits SHAs are finding in the LCCA 

process.
2

LCCA AND REALCOST

In 1996, the Federal Highway Administration (FHWA) initiated a technology transfer effort 

under Demonstration Project (DP) 115, “Life-Cycle Cost Analysis in Pavement Design.” This 

project resulted in the development of FHWA’s Life-Cycle Cost Analysis in Pavement Design

Interim Technical Bulletin (Walls and Smith 1998). This document serves as the primary 

reference manual for an LCCA instructional workshop. Since March 1997, the publication has 

been delivered to more than 40 State transportation agencies, along with a proof-of-concept 

LCCA software tool used for demonstration in the LCCA workshops. 

The Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin presents the broad 

fundamental principles involved in LCCA and provides guidance and the recommended process

for conducting LCCA of pavements at the project level. A brief overview of the LCCA process 

described in the publication is provided in the following paragraphs. 

The project-level LCCA process begins with the development of pavement design alternatives to 

accomplish the structural and performance objectives of a project. The analyst then defines the 

schedule of initial and future activities involved in implementing each of the alternatives. Next, 

the costs of these activities are estimated. Best practice LCCA calls for including direct agency 

costs (e.g., expenditures due to construction or maintenance activities) and costs to the facility’s 

users that result from agency work zone operations. 

The predicted schedule of activities and 

associated agency and user costs form each 

pavement design alternative’s projected lifecycle 

cost stream. These costs are converted into 

present-year dollars and then summed for each 

alternative using an economic technique known 

as discounting. The analyst can then determine 

which alternative is the most cost effective.

LCCA can use two different computational approaches—deterministic and probabilistic. The 

methods differ in the way they address the variability associated with the LCCA input values. In 

the deterministic approach, each LCCA input variable is assigned a fixed, discrete value. The 

analyst then determines the most likely value to occur for each parameter, usually based on 

historical evidence or professional judgment. Collectively, the input values are used to compute a 

single lifecycle cost estimate for the alternatives under consideration. 

Traditionally, LCCA applications have been deterministic. A deterministic lifecycle cost 

computation is straightforward and can be conducted manually with a calculator or automatically 

with a spreadsheet. Additional sensitivity analysis may then be conducted to test the variation in 

the outputs due to the change in an input value. In a sensitivity analysis, all the other inputs are 

held constant while assessing the sensitivity of an input parameter. However, a sensitivity 

analysis in the deterministic approach fails to capture the variation in outputs due to 

simultaneous variation in multiple inputs. Hence, it fails to fully capture the degree of 

uncertainty associated with the lifecycle cost estimates.

LCCA Steps

1. Establish design strategy alternatives.

2. Determine activity timing.

3. Estimate costs (agency and user).

4. Compute lifecycle costs.

5. Analyze the results.
3

Probabilistic LCCA utilizes the processing capabilities of computers to simulate and 

subsequently account for the simultaneous variations in multiple input parameters. The 

probabilistic approach entails defining individual input parameters by a frequency/probability 

distribution (that may take many forms) rather than by discrete values. The probabilistic LCCA 

approach represents the risk analysis of the lifecycle costs for a particular design alternative.

In figure 1, for a given strategy alternative, sample input values are randomly drawn from the 

defined frequency distributions (in this case, all normal distributions), and the selected values are 

used to compute one forecasted lifecycle cost value. The sampling process is repeated hundreds 

or even thousands of times, thereby generating many forecasted lifecycle cost values for the 

strategy alternative. The resulting forecasted costs can then be analyzed and compared with the 

forecasted results of competing alternatives to identify which one is most economical. 

Source: FHWA. 

M&R = maintenance and rehabilitation. 

Figure 1. Illustration. Probabilistic LCCA process.

Although more time-consuming than obtaining single lifecycle cost values from deterministic 

LCCA, a probabilistic analysis provides a much greater understanding of the variability 

associated with inputs. In addition to determining the effects of variation in inputs on the

projected lifecycle costs, a probabilistic LCCA provides ways to increase the reliability of results 

and enhance user confidence in identifying the most economical alternative. Analyzing

probabilistic lifecycle costs of competing alternatives requires a comparison of the probability 

distribution curves, such as those shown in figure 2, and the associated statistics (e.g., mean, 
4

standard deviation, and specified percentile lifecycle costs). Additional analyses, such as 

sensitivity analysis and extreme tail analysis, can help identify key input variables and determine 

the need for refinements to the input distributions. For example, the RealCost graph shown in 

figure 3 indicates that the initial agency cost plays a major role in the lifecycle cost output for the 

subject alternative. If a better sampling of cost data were available for this input parameter, the 

effects on projected lifecycle cost could be significant and possibly impact the selection of an 

alternative.

Source: FHWA. 

Figure 2. Graph. Probability density and cumulative distribution curves.

Source: FHWA. 

Rehabs = rehabilitations.

Figure 3. Chart. Correlation sensitivity plot for a given alternative (Walls and Smith 1998). 
5

A Microsoft® Excel®-based tool that utilized @RISK risk analysis software as a probabilistic 

add-in function was developed as a proof of concept for LCCA methodology under FHWA 

DP 115 (Palisade n.d.). This tool illustrated the usefulness of the LCCA methodology during

three case study workshops involving the participation of stakeholders from 10 different States 

and both the asphalt and concrete pavement industries. 

The positive feedback from the LCCA and case study workshops motivated FHWA to advance 

the initial version of the original DP 115 LCCA by initiating a contract in 2001. This advanced 

program retained the original Excel platform but replaced the @RISK add-in software with 

built-in probabilistic functions. Designated as “RealCost,” the program was released in 2002 as 

version 2.0. The primary features of the program included: 

• Deterministic and probabilistic computational approaches. 

• Optional user cost-analysis capability. 

• Graphical user interface (GUI) tools. 

• Customized input screens and graphical display charts. 

• Risk-analysis functionality for examining the effects of input variables on resulting 

lifecycle costs.

RealCost was created with two distinct purposes. The first was to provide an instructional tool 

for design decisionmakers who want to learn about LCCA (i.e., the software allows the users to 

investigate the effects of cost, service life, and economic inputs on the overall lifecycle cost). For 

this purpose, the GUI was designed to make the software easier to use and clearly convey the 

steps needed to carry out an LCCA. The second purpose was to provide a computational tool for 

designers to incorporate lifecycle costs into their roadway infrastructure investment decisions. 

The software was designed so that a basic understanding of the LCCA process is sufficient to 

operate the software.

The contribution of RealCost is the automation of the LCCA methodology presented in the 

Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin (Walls and Smith 

1998). As described in the preceding paragraph, the software calculates both the agency and user 

lifecycle costs associated with a new construction/reconstruction and a rehabilitation activity in 

the given alternative strategy. RealCost can generate both deterministic and probabilistic 

computations of lifecycle costs expressed in tabular and graphical formats. 

In addition, RealCost also automates FHWA’s work zone user cost calculation method discussed

in the Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin (Walls and Smith 

1998). The method compares traffic demand to roadway capacity on an hourly basis, thereby 

defining the traffic flow conditions from which user costs are determined. The method is 

computation intensive and ideally suited to a spreadsheet application. 

The software does not calculate agency costs or service lives for individual construction or 

rehabilitation activities. These values that reflect a highway agency’s construction and 

rehabilitation practices need to be calculated separately by an analyst and can then be entered 

into the RealCost program. Alternatively, a user can create a worksheet(s) within the program to 

make such calculations, which can then be linked to the appropriate input fields. (Note: While

customizations such as this are encouraged for effective use of the program, users are advised not 
6

to substantially alter any of the program’s basic functionality or standard features and 

worksheets, as that complicates FHWA’s free support efforts. Users should communicate 

additional needs of the application to FHWA so that the desired features can be incorporated and 

made available in future upgrades to the software.) 

While RealCost computes and compares the lifecycle costs of competing strategy alternatives, its 

analysis outputs alone do not identify the best choice for implementing a project. The lowest 

lifecycle cost option may not always be implemented when other factors are considered. As with 

any economic tool, LCCA provides critical information to the overall decisionmaking process, 

but not the answer itself.

Several updated versions of RealCost have been released since the original version. Among some 

of the changes made to the program were added checks for the probabilistic functions (v 2.0.2 

and v 2.1.3) in 2003, the establishment of equal bin sizes/ranges for lifecycle cost probability 

distributions of competing alternatives (v 2.1.1) in 2003, and the addition of a dual unit’s option 

(i.e., English or metric) (v 2.2.0) in 2004. The next significant changes to the program were 

instituted in 2009 (v 2.5.0). Key changes included: 

• Number of alternatives simultaneously analyzed increased from two to six. 

• Number of possible activities for each alternative increased from 7 (including the initial 

event) to 24.

• User cost-related data items are no longer required when the user cost calculation is 

turned off or if external user cost calculations are performed.

• Modifications to remaining life-value calculations were made to consider both structural 

and service life remaining at the end of the analysis period. For each activity, service life 

and optionally structural life can be specified.

• Ability to define up to four different traffic distributions (e.g., weekday, weekend) as

selected at the activity was added. Different distributions can be selected for various 

activities within the same alternative.

• Program optimized to reduce file size and improve execution time.

• Usability and user-friendliness improved. 

The latest changes to the program were instituted in 2020 as part of v 3.0.NN, which is available 

for download on the FHWA web page for LCCA software (FHWA 2020). Key changes 

included: 

• Making the RealCost application compatible with Excel 32-bit and 64-bit versions. 

• Ensuring the RealCost application is 508 compliant. 

• Adding a new traffic calculator in the RealCost application. 
7

• Updating the RealCost user manual to reflect the changes in v 3.0 and ensuring 508 

compliance (this document). 

The RealCost software program consists of an Excel workbook with additional Visual Basic for 

Applications (VBA) programming code. The workbook consists of a collection of worksheets 

designed to perform different functions. The VBA code can perform Monte Carlo simulation in 

the analysis, and is also used to construct the GUI. 

RealCost has two mechanisms for entering and working with data: the GUI (Switchboard) and 

worksheets. The Switchboard is the primary interface mechanism. Each input button on the 

Switchboard provides access to an input screen consisting of multiple components, as described 

in the following and illustrated in figure 4: 

• Input screen name—the name used in RealCost to refer to the input screen.

• Data entry field—the area on the input screen for data input. 

• Data field description—the phrase used to identify the data entry field.

• Command button—the GUI device that triggers a command or series of commands to the 

software.

• Probability button—a specific type of command button that opens an additional input 

screen where probabilistic inputs can be assigned.

Source: FHWA.

Figure 4. Screenshot. An example input screen for data entry, Value of User Time.

The Worksheets interface is available when the Switchboard interface is closed. Users may enter 

data in the appropriate worksheet cells, which carry the same labels as the corresponding fields 

on the Switchboard interface. While the Switchboard is the primary means of interacting with the 

software, all the entered data are stored in Excel worksheet cells. Data entered into an input 

screen’s data entry field are automatically transferred to corresponding cells in the appropriate 

underlying worksheet. For example, the worksheet extract in table 1 contains the data entered in 
8

the Value of User Time input screen shown in figure 4. Data can be entered directly in the 

worksheets, but the Switchboard interface is required for some functions, as discussed in the 

section Moving Between the Switchboard and Worksheets.

Table 1. An example worksheet extract, Value of User Time.

Description

Value

($/h)

Value of Time for Passenger Cars 17.00 

Value of Time for Single Unit Trucks 35.00 

Value of Time for Combination Trucks 36.50 

RealCost also stores all outputs (e.g., calculation results, analysis results) in the worksheets. 

Users can access these outputs similarly to data inputs.

PURPOSE OF THE USER MANUAL

This user manual provides basic instructions for using RealCost, a software program that FHWA 

originally developed to support the application of LCCA in the pavement project-level 

decisionmaking process. The manual provides directions for entering the data required to

perform an LCCA and incorporating the software’s outputs into project-level decisionmaking. 

The manual is primarily targeted at pavement designers and design decisionmakers who use 

LCCA and RealCost to compare the cost-effectiveness of design strategy alternatives for a given 

project.

While RealCost was developed with pavement LCCA applications in mind, it has the potential to 

be used for other roadway infrastructure assets, such as bridges, tunnels, drainage systems, and 

safety features (other applications, such as equipment fleet and snow/ice removal processes, are 

also possible). Such applications require competing strategies with different initial or future cost 

streams that are determined by the costs of individual construction and rehabilitation activities 

and the expected timings of those activities. As part of appendix A illustrating pavement LCCA 

using RealCost, an example exercise demonstrates how RealCost can be applied to bridges.

ORGANIZATION OF THE USER MANUAL

This user manual is organized into three chapters and three appendixes. Following this 

introductory chapter, the manual provides instructions on installing RealCost, starting the 

program and navigating through its various input screens and worksheets, saving and retrieving 

input files, and saving and exiting the workbook (chapter 2). The third and final chapter contains 

detailed directions on using RealCost to perform decision-support analyses regarding design 

strategy alternatives. It describes and illustrates entering data into input screens and worksheets 

and provides guidance and recommendations for the inputs, where appropriate. It also describes 

and illustrates the simulation process and the lifecycle cost outputs. Correspondingly, it gives 

guidance in evaluating and interpreting the results of the LCCA. 

Appendix A contains a glossary of terms and definitions associated with the RealCost program. 

Appendix B presents four example applications of RealCost using data and information from 

actual highway projects. Three of the examples are for pavement projects, while the fourth 
9

represents a bridge project. Appendix C provides a short discussion of the current use of 

RealCost among highway agencies. It describes how it can be integrated into an agency’s project 

development process and presents summaries of how some agencies have customized it to fit 

their unique pavement design alternative selection procedures. 

SUGGESTED READING

RealCost follows FHWA’s best practice LCCA methodology, which is fully documented in the 

1998 Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin (Walls and 

Smith). The interim technical bulletin presents a formal treatment of LCCA methodology, the 

economic basis of discounting future expenditures, and probability; it also recommends input 

values. The interim technical bulletin is also the source of RealCost’s default values. LCCA best 

practices are outlined in FHWA’s Life-Cycle Cost Analysis Primer (2002), and FHWA’s 

Economic Analysis Primer (2003). 

Although this user manual provides a working knowledge of RealCost, the related documents 

described in the preceding paragraph—notably the Life-Cycle Cost Analysis in Pavement Design

Interim Technical Bulletin—provide a more indepth understanding of the process, which is 

helpful for including LCCA in the pavement decisionmaking process. Both the Life-Cycle Cost 

Analysis Primer (2002) and the interim technical bulletin are available in electronic format on 

the FHWA web page for LCCA (FHWA 2020).

11

CHAPTER 2. THE BASICS

SETUP

System Requirements

RealCost is designed to run in 32-bit or 64-bit Excel 2010 and newer versions and is not 

supported by versions earlier than Excel 2010. In addition, Microsoft WindowsTM 7 Service Pack 

1 (or newer) and Excel 2010 (or newer) are essential to run the software. However, the preferred 

Excel version is either an OfficeTM 365 subscription, Excel 2019, or newer. 

Following are the minimum recommended system requirements for using RealCost: 

• Excel 2010 or newer, with current service pack loaded. 

• Windows 7 or newer, with current service pack loaded. 

• Printer (RealCost requires a printer driver to use the Report function in the software). 

• 2 GHz processor. 

• 2 GB RAM. 

• 1 GB hard drive space. 

Download RealCost

As mentioned in chapter 1, RealCost is available for download on FHWA’s web page for LCCA. 

The download file is a zip file that needs to be saved to a folder on the hard drive. Once 

downloaded, users should unzip the files to a folder where they would like to have RealCost 

available, keeping the same subfolder structure as in the zip file. 

There is no installation needed to run RealCost. Therefore, users do not need administrative 

rights to upgrade RealCost versions. However, users will need to follow the setup instructions in 

the following section before running RealCost. 

STARTING, NAVIGATING, AND EXITING

Working Folder Setup

Because Excel treats the VBA code in RealCost much like a macro, Excel must be set to allow 

macros to run before RealCost can be used. 

It is recommended that users create a local working folder on their computers, such as the 

following:

C:\RealCost Work 

Place the RealCost workbook file in the main working folder: 

C:\RealCost Work\RealCost-3.N.N.xlsm (where N,N are subversion numbers) 
12

Then, create two specific subfolders within the main working folders: 

• C:\RealCost Work\32-bit

• C:\RealCost Work\64-bit

Place the supporting dynamic-link library (DLL) files in the subfolders as follows:

• C:\RealCost Work\32-bit\libiomp5md.dll 

• C:\RealCost Work\32-bit\LCCADLL32.dll 

• C:\RealCost Work\64-bit\libiomp5md.dll 

• C:\RealCost Work\64-bit\LCCADLL64.dll 

Do not rename, move, or delete the DLL files. Otherwise, the RealCost simulation will not 

function! 

Open Excel, and start a new blank worksheet file. Then, use the following steps and figure 5

through figure 7 to set this working folder as a trusted folder by Excel: 

1. Click File/Options. 

2. Select Trust Center and click the Trust Center Settings. 

3. Select Trusted Locations.
13

Source: FHWA.

Figure 5. Screenshot. RealCost working folder setup—Excel/Options/Trust Center/Trust 

Center Settings. 
14

Source: FHWA.

Figure 6. Screenshot. RealCost working folder setup—Excel/Options/Trust Center/Trust 

Center Settings/Trusted Locations. 
15

Click the Add new location button and navigate to your RealCost working folder (e.g., 

C:\RealCost work).

Check the box next to “Subfolders of this location are also trusted,” and click OK. Then, click 

OK on the subsequent windows to exit.

Source: FHWA.

Figure 7. Screenshot. RealCost working folder setup—Excel/Options/Trust Center/Trust 

Center Settings/Trusted Locations/Add New Location. 
16

Starting RealCost

Once the working folder setup is complete, make a copy of the file to preserve the original copy. 

Then, start Excel and open the copied RealCost file. A dialog box with the FHWA disclaimer 

will pop up (figure 8). Click the I Accept the Disclaimer button. This action needs to be done 

only once for a given version. Save the file.

Source: FHWA.

Figure 8. Screenshot. The opening screen of RealCost. 

Moving Between the Switchboard and Worksheets 

Upon activation, RealCost opens to the Inputs worksheet. Users can work on the worksheets or 

use the Add-ins menu and Switchboard to navigate among worksheets. The Switchboard is a 

menu screen superimposed on an Excel worksheet that serves as a navigational tool (see 

figure 9). The Switchboard buttons provide access to almost all the program’s functionality—

data entry, analysis, reports, and utilities. These capabilities are discussed in more detail in the 

section titled “RealCost Switchboard Functions.” Basic navigation and the Administrative 

Functions are described here.
17

Source: FHWA.

Figure 9. Screenshot. The RealCost Switchboard overlaid on the worksheets. 

The visibility of the Switchboard screen and the underlying Excel sheets is mutually exclusive, 

i.e., when the Switchboard is active, the underlying Excel worksheets that capture the data 

entered through the Switchboard input screens and the Excel menu bar are not accessible. To 

close the RealCost Switchboard, the user must switch to the worksheet mode using one of two 

options: 

• Use the Go to Worksheets button in the Administrative Functions section of the 

Switchboard to display and select from a list of worksheets.

• Use the Switchboard’s X button (located in the upper right-hand corner of the menu 

screen) to close the Switchboard. 

To reopen the Switchboard from a worksheet, use the Add-ins menu from the Excel menu bar 

and the RealCost drop-down menu and select RealCost Switchboard (figure 10) or click the 

Switchboard button on the Inputs sheet. 
18

Source: FHWA.

Figure 10. Screenshot. Opening the Switchboard from the RealCost menu.

Most functions can be performed in either mode, with the following exceptions: 

• Creating a new probabilistic input or an LCCA output requires working in worksheet 

mode and using the respective options on the RealCost drop-down menu. 

• Saving data input files for design strategy alternatives requires using the Switchboard.

Should the Add-ins or RealCost menu disappear from the Excel menu bar (which may occur if 

another application or file is opened while RealCost is running), the user can retrieve the menu 

through the Excel View menu. 
19

On the Excel menu bar: 

View >> Macros >> View Macros >> AddLCCAMenu (i.e., run that specific macro)

RealCost Switchboard Functions 

As shown in figure 11, the RealCost Switchboard has five operational categories. Brief 

descriptions of each category and the 18 Switchboard command buttons arranged under the 

various categories are provided in table 2. Detailed discussions regarding data input and using 

the RealCost features as part of the LCCA process are given in the next chapter. 

Source: FHWA.

Figure 11. Screenshot. The five operational categories of the RealCost Switchboard.
20

Table 2. RealCost Switchboard command buttons and their functions.

Command Buttons Functionality

Project Details Stores descriptive data about the project. LCCA 

assumptions and other information concerning 

the analysis can and should be recorded here.

Analysis Options Project-level data that apply to all alternatives 

being considered (e.g., analysis period, discount 

rate, costing options).

Traffic Data Existing normal operations traffic data, such as 

the amount of traffic, vehicle types, and 

capacity.

Value of User Time Hourly value of user time for three basic 

vehicle types.

Traffic Hourly Distribution Distribution of annual average daily traffic 

(AADT) throughout the day, with separate data 

fields for rural and urban traffic patterns.

Added Vehicle Time and Cost Cost and time to slow or stop, by vehicle type. 

Provides for cost escalation.

Save Project-Level Inputs Saves the project-level data to an *.LCC file.

Open Project-Level Inputs Retrieves project-level data from an *.LCC file.

Alternative All alternative data, such as alternative-level 

agency activity cost, service life, construction 

duration, and work zone data. Each alternative 

includes commands to save and recall 

individual alternative data sets.

Show Warnings Identifies suspect data values and errors due to 

missing or out-of-bounds data. Warnings are 

displayed on the Simulation Warnings 

worksheet. It should be noted that “warnings” 

call attention to certain inputs that fall out of 

expected ranges and do not necessarily indicate 

input errors, whereas “errors” are fatal inputs 

that will prevent the program from running and 

providing LCCA results.

Deterministic Results Calculates and displays deterministic LCCA 

results based upon input parameters represented 

by a single value (i.e., a mean or most likely 

value).

Simulation Performs simulation with probabilistic inputs.

Probabilistic Results Displays probabilistic results. Allows access to 

probabilistic results worksheets.
21

Command Buttons Functionality

Report Produces a printable report that shows inputs 

and results.

Go to Worksheets Allows direct access to specific worksheets 

within the workbook. To close the Switchboard 

and choose from a list of individual worksheets, 

use the Go to Worksheets button. The user can 

also access the worksheet that is currently 

active by clicking on the X in the upper 

right-hand corner of the Switchboard.

Clear Input Data Deletes all project-level data, alternative-level 

data, and computation outputs. Creates a “clean 

slate.”

Save LCCA Workbook As... Saves the entire Excel workbook, including 

both inputs and results worksheets. Saving a 

workbook is the only way to save analysis 

results. Typically, an analysis file containing 

the simulation results using 2,000 iterations is 

6 MB in size.

Exit LCCA Closes RealCost. The software will ask the user 

whether the file should be saved. The exit 

command on the Excel File menu and the 

RealCost menu present the same save options. 

As noted in the preceding row, to save the 

analysis results, it is necessary to save the entire 

Excel workbook. Because an analysis file is 

usually around 6 MB in size, saving can take 

several seconds. However, data input can be 

saved via *.LCC (project-level inputs) and 

*.LCA (alternative-level inputs) files without 

saving the entire workbook. 
22

Saving and Exiting Via the Switchboard 

RealCost can be closed by using the Exit LCCA 

button in the Administrative Functions section of 

the Switchboard. When exiting, however, it is 

necessary to save the entire workbook to retain 

analysis results. The Exit LCCA button prompts the 

user to save the workbook. The Save RealCost

button can be used to save the workbook at any 

time. Both the Exit and Save buttons prompt for a 

file name and location.

Saving and Exiting Via Worksheets 

To save a workbook and exit while in worksheet mode, it is advisable to use the Save As option 

on the Excel menu before closing. Saving under an appropriate name will preserve the analysis 

results. If the user saves a file in the RealCost workbook, the data will need to be cleared before

analyzing another project. This step can be done with the Clear Input Data option in the 

Administrative Functions part of the RealCost Switchboard.

TIP

Analysis results can only be saved by 

saving the RealCost workbook, either 

through the Switchboard Save LCCA 

Workbook As button or the Excel menu 

bar. This file should be saved with a 

descriptive name.
23

CHAPTER 3. USING REALCOST IN LCCA

This chapter elaborates on the functioning of the RealCost tool by discussing the various sections 

within it and providing examples.

ENTERING, SAVING, AND LOADING DATA

RealCost’s data needs are compliant with the data requirements discussed in FHWA’s best 

practice LCCA process (Walls and Smith 1998). RealCost produces the lifecycle costs by 

performing the necessary functions once the user enters the required input data. Furthermore, the 

software permits the analyst to quickly consider modifications to the data that result from the 

analysis of earlier LCCA iterations. The LCCA steps and their corresponding data input and 

output screens are listed in table 3. 

Table 3. LCCA steps and corresponding RealCost forms.

FHWA LCCA Steps RealCost Data Input

and Output Screens

1. Establish design strategy alternatives Project Details

Analysis Options 

Traffic Data

Value of User Time

Traffic Hourly Distribution

Added Vehicle Time and Cost

2. Determine activity timing Alternative

3. Estimate agency and user costs Alternative

4. Compute lifecycle costs Deterministic Results

Simulation

5. Analyze the results Deterministic Results

Probabilistic Results

Project-Level Versus Alternative-Level Data

The LCCA process requires two levels of input data: data about the proposed project and data 

defining the design strategy alternatives that are being considered for accomplishing the project.

Project-level data apply to all strategic alternatives being considered for the project at hand. 

FHWA’s best practice LCCA methodology requires the analysis period, discount rate, normal 

operations traffic data, and normal operations roadway geometry to be the same for all strategic

alternatives.

Alternative-level data define the differences between strategy alternatives. These differences emerge 

in agency costs, activity types, timings, and work zone traffic flow characteristics. RealCost models 

work zone traffic flow restrictions with the user cost methodology described in FHWA’s Life-Cycle 

Cost Analysis in Pavement Design Interim Technical Bulletin (Walls and Smith 1998).
24

RealCost requires that project-level data be entered separately from alternative-level data to 

emphasize the difference between the two types of inputs. The division between project-level 

and alternative-level data provides a consolidated view of the data needs of RealCost (figure 12). 

Source: FHWA. 

WZ = work zone. 

Figure 12. Illustration. The hierarchy of project-level and alternative-level data.
25

Project-Level Data Inputs 

The options selected and data entered in the project-level data input screens (or worksheets)

apply to all strategic alternatives being considered to fulfill the performance requirements of a 

single project. If the project-level data or options are changed, all alternatives must be 

reconsidered with the new data and options appropriately compared. Alternatives analyzed using 

different project-level options cannot be directly compared in LCCA.

Project Details

The Project Details input screen (figure 13) is used to name and define the project in terms of its 

location (route, region, county) and limits (beginning and ending mileposts) and to identify the 

analyst. Data entered via this screen are not used in the analysis but can be included in the output 

report. The analyst may enter a project’s metadata within the Project Details screen according to 

the field names on the screen. The analyst may use the other fields to include project 

documentation details, such as the type of facility on which the project is located and 

assumptions used in conducting the LCCA. It should be noted that although the beginning and 

ending mileposts are not used in any of the RealCost calculations, this information is often 

helpful to the user in terms of developing pay item quantities and costs associated with 

individual work activities.

Source: FHWA.

Figure 13. Screenshot. Project Details input screen.
26

Analysis Options 

Generally, analysis options are decided by 

agency policy rather than the design 

decisionmaker. Options defined in the Analysis 

Options input screen include the analysis units 

(English or metric), analysis period, discount 

rate, beginning year, the inclusion of agency 

cost and user cost remaining values, the 

treatment of user costs in the LCCA, and the 

number of strategic alternatives being evaluated (see figure 14). A checked box equals “yes,” an 

unchecked box equals “no.” The data inputs and analysis options available on this screen are 

discussed in table 4, with FHWA’s recommendations as reported in Life-Cycle Cost Analysis in 

Pavement Design Interim Technical Bulletin (Walls and Smith 1998). 

Source: FHWA.

Figure 14. Screenshot. Analysis Options input screen.

TIP

LCCA requires that all alternatives in an 

analysis produce the same benefits. If 

project-level data or options are changed, all 

alternatives must be reconsidered using the 

new data and options. 
27

Table 4. Analysis Options inputs.

Option/Input Description FHWA 

Recommendation

Analysis Period The number of years over which the strategy 

alternatives will be compared. 35–40 yra

Discount Rate 

The rate by which future expenditures will be 

discounted to present value. This information is 

entered as a decimal number.

Real discount rate 

of 2–4 percenta

Beginning of 

Analysis Period

Sets the first year of the analysis period. RealCost

expenditure diagrams draw their dates from this field 

and the analysis period field. The beginning year can 

also be referred to as the base year for the analysis.

The year when the 

initial activity will 

be completed and 

open to traffic. 

Include Agency 

Cost Remaining 

Value 

Indicates whether the agency cost calculation 

incorporates a prorated share of agency costs as a 

credit for the remaining life if the structural or service 

life of activity extends beyond the analysis period.

Checked (yes)

Include User Costs 

in Analysis

Indicates whether user costs will be included in the 

analysis and displayed in the results. Checked (yes)

User Cost 

Computation 

Method 

Directs RealCost to either calculate user costs 

(“Calculated”) based upon input data following bestpractice methods or utilize inputted user costs 

(“Specified”) values when calculating user lifecycle 

cost.

Calculated

Traffic Direction

Directs RealCost to calculate user costs for the 

inbound lanes (i.e., lanes leading into a city or 

morning peak hour), the outbound lanes (i.e., lanes 

leading away from a city or evening peak hour), or 

both lanes.

— 

Include User Cost 

Remaining Value

Indicates whether the user cost calculation 

incorporates a prorated share of user costs as a credit 

for the remaining life if the structural or service life 

of activity extends beyond the analysis period. 

Checked (yes)

Number of 

Alternatives

RealCost allows for up to six strategy alternatives for 

comparison. — 

a

Refer to FHWA’s Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin for the latest 

recommendation (Walls and Smith 1998). 

—The cell is intentionally left blank. 
28

Traffic Data

Highway engineers use traffic data to determine their design parameters. In RealCost, traffic data 

(figure 15) are used exclusively to calculate the work zone user costs following the method 

outlined in FHWA’s Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin

(Walls and Smith 1998). The traffic data inputs are described in table 5. If user costs are not 

included in the analysis and the associated option button in the Analysis Options input screen is 

left unchecked, traffic data entry is not required.

Source: FHWA.

Figure 15. Screenshot. Traffic Data input screen.
29

Table 5. Traffic Data inputs.

Input Description

AADT Construction Year This information is the AADT in the construction or base year of 

the analysis. This number is the total AADT for both directions.

Single-Unit Trucks The percentage of the AADT that is single-unit trucks. 

Combination Trucks The percentage of the AADT that is combination trucks.

Annual Growth Rate of 

Traffic

The percentage by which “AADT in both directions” increases 

each year (i.e., compound growth). Advanced users can modify the 

formula in the worksheet to affect a simple traffic growth rate.

Speed Limit Under 

Normal Operating 

Conditions 

The speed limit that is in effect during the facility’s normal 

operating conditions (i.e., the time between work zones). This 

number is considered in the user cost computations. 

Lanes Open Under 

Normal Conditions 

The number of roadway lanes available to traffic (in each direction) 

under normal operating conditions. 

Free-Flow Capacity The capacity of each lane under normal operating conditions. 

Free-Flow Capacity 

Calculator

This button opens a screen that calculates free-flow lane capacities 

based on the Highway Capacity Manual (Transportation Research 

Board (TRB) 1994). 

Queue Dissipation 

Capacity

The capacity of each lane during queue dissipation operating 

conditions. 

Maximum AADT in both 

Directions

The traffic growth is capped at this number to prevent growth 

beyond possible capacity. If traffic grows beyond this value, this 

value is substituted for the computed future AADT value, and 

future user costs are calculated based upon this maximum AADT 

value. As a rule, AADT projections should not exceed the observed 

24-h traffic volumes contained in the Highway Capacity Manual

(TRB 1994). 

Maximum Queue Length

The effects of self-imposed detours are modeled (i.e., traffic exiting 

from the work zone route yet still incurring some user costs). 

Queue-related user costs, which are based upon queue length, are 

calculated with this value instead of the calculated queue length. 

However, all vehicles, even those that detour, are charged queue 

costs. This value is State-specific and is best determined by the 

traffic division. 

Rural or Urban Traffic

The choice between two hourly traffic distributions is allowed. 

Default values (accessible in the software) for these distributions are 

taken from the Texas Transportation Institute’s MicroBENCOST

software program (McFarland et al. 1993).
30

Value of User Time

The Value of User Time input screen (figure 16) allows editing of the values applied to an hour 

of user time. The dollar value of user time differs for each vehicle type and is used to calculate 

user costs associated with a delay during work zone operations. 

Source: FHWA.

Figure 16. Screenshot. Value of User Time input screen.

Traffic Hourly Distribution

To transform annual average daily traffic (AADT) to an hourly traffic distribution, RealCost 

includes default Rural and Urban Traffic hourly distributions from MicroBENCOST. The Traffic 

Hourly Distribution input screen (figure 17, with input descriptions in table 6) allows the user to 

adjust (or restore) these settings, with the requirement being that the inbound and the outbound 

distributions sum to 100 percent. As many as four sets of hourly traffic distributions can be 

established by the user, with each set assigned a distribution name at the top of the screen. 

Although the default names given to the four groups of traffic distributions are Week Day 1, 

Week End 1, Week Day 2, and Week End 2, the names can be changed and saved to reflect any 

4 hourly distributions (for example, by geographical regions or districts). 
31

Source: FHWA.

Figure 17. Screenshot. Traffic Hourly Distribution input screen.
32

Table 6. Traffic Hourly Distribution inputs.

Input Description

Distribution 

Name

RealCost allows for defining up to four different traffic hourly 

distributions—two for weekday representation and two for weekend day 

representation.

AADT Rural 

(%) or AADT 

Urban (%)

The percentage of AADT traveling on the roadway, in both directions, 

during the indicated hour under the specified (rural or urban, weekday or 

weekend day) traffic distribution.

Inbound Rural 

(%) or Inbound 

Urban (%) 

The percentage of that hour’s traffic traveling inbound on the route under the 

specified (rural or urban, weekday or weekend day) traffic distribution. The 

following formula describes the percentage of the AADT traveling in the 

inbound direction for the indicated hour: 

(AADT Rural %) × (Inbound Rural %) or (AADT Urban %) × (Inbound 

Urban %)

Restore Defaults

Returns all values on this screen to their original, as delivered, default 

values. Default values for these distributions are taken from the 

MicroBENCOST software produced by the Texas Transportation Institute. 

MicroBENCOST, which is used to calculate the benefits and costs of 

transportation improvements, includes an hourly traffic distribution that has 

been adopted as a default traffic distribution for RealCost.

Added Time and Vehicle Stopping Costs 

Added Time per 1,000 Stops (Hours) and Added Cost per 1,000 Stops ($) values are used to 

calculate user delay and vehicle operating costs due to speed changes that occur during work 

zone operations. This input screen (figure 18) is used to adjust the default values for added time 

and added cost per 1,000 stops. The Idling Cost per Veh-Hr ($) field is used to calculate the 

additional vehicle operating costs that result from traversing a traffic queue under stop-and-go 

conditions. The costs and times are different for each vehicle type (i.e., passenger cars, singleunit trucks, combination trucks) (Walls and Smith 1998). 
33

Source: FHWA.

CPI = Consumer Price Index; Transp. = transportation; Veh-Hr = vehicle hour.

Figure 18. Screenshot. Added Time and Vehicle Stopping Costs input screen.

The default values for Added Time, Added Cost, and Idling Cost are derived from NCHRP 

Report 133, Procedures for Estimating Highway User Costs, Air Pollution, and Noise Effects

(Curry and Anderson 1972). The Added Cost and Idling Cost default values represent 1996 

values developed using an escalation factor of the transportation component of the Consumer 

Price Index (CPI) (U.S. Bureau of Labor Statistics 2021). A cost escalation function is available 

on the right side of the form to allow the analyst to update those 1996 values to current-year 

values. The user enters the current transportation component of the CPI and the current year and

clicks on the Escalate button. The Restore Defaults button at the bottom of the screen functions 

much like it does on the Traffic Hourly Distribution input screen. 

Saving and Loading Project-Level Data

The last two buttons in the Project-Level Inputs section of the Switchboard are used to save and 

retrieve (load) project-level inputs (figure 19). The project-level inputs are saved in a small, 

comma-delimited file, which allows for quick retrieval of the data for use in future LCCA 

sessions. This file may be named via ordinary Windows conventions and is automatically saved 

with the *.LCC extension. Changing the file extension will prevent RealCost from recognizing 
34

the file. In addition, the user is cautioned that opening a *.LCC file will overwrite data in the 

Project-Level Inputs section.

Source: FHWA.

Figure 19. Screenshot. Switchboard buttons to save and open project-level inputs.

Alternative-Level Data Inputs

Data that define the differences between strategy alternatives (i.e., the agency costs and work 

zone specifics for component activities of each alternative) are alternative-level inputs. Each 

alternative for a project can have up to 24 activities covering the selected analysis period. The 

activities defined by the analyst are performed in sequence (i.e., activity 1 precedes activity 2, 

activity 2 precedes activity 3, and so on). Data describing these activities are entered for each of 

the strategy alternatives (maximum of six) being compared.

The input screen for defining strategy alternatives and their sequence of activities is the 

Alternative screen. The Switchboard button for opening this screen is located under the 

Alternative-Level Inputs section of the Switchboard. At the top of the Alternative input screen 

(figure 20), a scroll bar allows the analyst to navigate between alternatives to define alternativelevel inputs. The number of alternatives available for use is based on the number of alternatives 

specified earlier by the user in the Analysis Options input screen. A field is also provided for 

naming the strategy alternative (e.g., Asphalt Pavement or Steel Bridge).
35

Source: FHWA.

Figure 20. Screenshot. Alternative input screen. 

The number of activities for the alternative at hand is defined using the drop-down list at the top 

right corner of the form. Again, up to 24 activities per alternative can be defined. Once the 

number of activities is selected, a series of Activity tabs appear across the top of the input screen. 

Each tab accesses a different activity. For instance, in figure 20, the Activity 1 tab has been 

accessed and is the currently active tab. The user can provide a short description of the activity in 

the field below the series of Activity tabs. 

The remaining parts of the Alternative input screen allow the user to enter agency and user costs 

(if the specified option was selected in the Analysis Option input screen), service life, and 

maintenance inputs for each activity of a particular strategy alternative, as well as the work zone 

inputs associated with the activity. The data entered in this screen are used to calculate the 

agency and user lifecycle costs that are ultimately used to compare the economics of each 

strategy alternative. The construction cost to be entered is the overall cost for the activity. An 

activity typically consists of two or more individual pay items (e.g., a hot-mix asphalt (HMA) 
36

overlay might consist of a tack coat, an HMA binder course, and an HMA surface course)

covering the chosen analysis length (e.g., entire project length, 1-mi unit length).

The service life of activity represents the expected functional performance of the asset item as a 

result of conducting the activity, where the time-series trends of surface properties define 

functional performance (e.g., smoothness, friction, noise, and aesthetics). Functional activities 

are localized thin repairs/treatments that do not add to the load-carrying capacity of the asset 

item. Pavement examples include preventive maintenance treatments, like crack/joint sealing, 

chip seals, thin HMA overlays, and friction restoration treatments, like diamond grinding and 

microsurfacing. 

The structural life of activity represents the period over which the product of the activity can

satisfy or contribute to the overall structural, load-carrying requirements of the roadway.

Structural activities provide or impart strength-bearing material layers and thicknesses. They 

have both a defined structural life as well as a functional life. Pavement examples include an 

initial asphalt or concrete pavement structure, moderate to thick HMA overlays, portland cement 

concrete (PCC) overlays, and recycled pavements.

RealCost uses activity service life (i.e., functional performance) to define the timings of all future 

activities for a given alternative. The service life defined by the user for the first activity establishes 

when the second activity will occur. Likewise, the service life defined for the second activity 

establishes when the third activity will occur. When summed together, the full sequence of defined 

activity service lives must extend to or beyond the chosen analysis period. For example, for a 40-yr 

analysis period, an alternative might consist of two activities, with the service life of the first 

activity being 25 yr and the service life of the second activity being 15 yr. If the service life for a 

given activity is left undefined, the sequence of the following activities will initiate the same year 

as that activity (i.e., a zero-service life will be assigned to that activity).

RealCost uses structural life to help determine the agency cost and user cost remaining life 

values of each alternative if specified for inclusion by the user in the Analysis Options input 

screen. Previous versions of RealCost computed remaining life values by prorating the cost of 

the last activity (i.e., the activity occurring immediately before the end of the analysis period) by 

its expected unused service life. RealCost v 3.0 uses a structural life depreciation approach to 

compute the remaining life value for each alternative, which, when discounted, gets factored in 

as a negative cost (i.e., a benefit) in the lifecycle cost computation. In the case of pavements, 

newly constructed or reconstructed pavements can be expected to have structural lives between 

20 and 40 yr, whereas pavements undergoing major rehabilitation can be expected to have 

structural lives between 10 and 20 yr. Moreover, for given design traffic, assets with a greater 

structure (i.e., thicker, stronger materials) can be assigned longer structural lives than those with 

less structure. It is important to point out that structural life assignments do not influence activity 

timings. Their influence on lifecycle cost results is only realized when the assigned structural life 

exceeds the chosen analysis period. Hence, if left undefined, only the remaining life component 

of the last activity is computed and factored into the total lifecycle cost. Additional descriptions 

and illustrations of the structural life depreciation approach used in RealCost are available from 

the FHWA Office of Preconstruction, Construction, and Pavements. 
37

Table 7 provides summary descriptions and useful notes for the various data inputs contained in 

the Alternative input screen. It is important to distinguish the work zone length input from 

project length, which is defined by the beginning and ending mileposts in the Project Details 

input screen, and LCCA length, which is used in computing agency costs for the different 

activities (based on quantities estimated for a nominal length of the project (typically 1 mi) or the 

entire project length). Although the value of the work zone length can be the same as the project 

length or the LCCA length, it is usually different. For example, a project may be 10 mi long, and 

the activities costs may be based (LCCA length) on a 1-mi length or project length, whereas the 

work zone length for a particular activity may be 2 mi. The work zone duration should match the 

number of days needed to complete the activity for the LCCA length. 

Table 7. Alternative inputs.

Input Description Notes

Alternative Strategy alternative number. Up to six possible 

Alternative

Description Name of the strategy alternative. — 

Number of 

Activities

The number of activities defining a given 

alternative over the chosen analysis period. Up to 24 possible 

Activity 

Description Name of the activity. — 

Agency 

Construction Cost 

Agency costs that will be included in the LCCA

for a given activity comprising a given alternative. Thousands of dollars 

Service Life

The service life of the activity in terms of 

functional performance. This field defines how 

many years after a certain activity the next activity 

will take place.

Years

Structural Life

Structural life of the activity (if any) in terms of 

load-carrying capacity. This field helps determine 

remaining life values at the end of the chosen 

analysis period. 

Years

User Work Zone 

Costs

This field allows direct entry of user costs. It is 

accessible only when the User Cost Computation 

Method field on the Analysis Options input screen 

is set to Specified. When this field is set to 

Calculated, it will be presented in gray font and 

will not be accessible.

1. Thousands of 

dollars. 

2. Inaccessible if 

User Cost is set to 

Calculated.

Maintenance Cost

Cost of minor, scheduled maintenance performed 

between major activities. These minor activities 

incur no user costs. Their purpose is to allow for 

the inclusion of the agency costs of minor 

activities such as preventive maintenance. To 

remove minor routine maintenance from the 

analysis, set the value of this field to zero (0).

1. Thousands of 

dollars. 

2. Enter zero (0) if 

not being used. 
38

Input Description Notes

Maintenance 

Frequency 

Cyclical frequency of minor maintenance. This 

frequency only applies during the service life of 

the specific major activity that it is described for 

and expires as soon as the next major activity 

begins. 

Enter zero (0) if not 

being used. 

Work Zone Length

Length of the actual work zone, measured from the 

beginning to the end of the reduced-speed area 

(where the work zone speed limit is in effect).

Miles

Work Zone 

Duration

Number of days that the work zone will affect 

traffic flow. For example, if the work zone is in 

effect 5 d a week for 3 w this value would be 15. 

Days

Work Zone 

Capacity

The vehicular capacity of one lane of the work 

zone for 1 h. 

Vehicles per hour per 

lane 

Work Zone Speed 

Limit The posted speed limit within the work zone. Miles per hour 

Lanes Open in Each 

Direction During 

Work Zone 

The number of open lanes in the work zone area, 

when in effect. The number of lanes open applies 

to each direction. 

— 

Work Zone Hours

The period during the day for which a work zone 

is in effect. During these hours, capacity is limited 

to Work Zone Capacity. Work zone timing may be 

modeled separately for inbound and outbound 

traffic. Up to three separate periods of work zone 

can be modeled for each day. For example, a work 

zone in effect from 9 a.m. to 3 p.m. and from 

8 p.m. to 5 a.m., would use the following numbers: 

09 to 15, 20 to 24, and 00 to 05. 

Military time (0-24 h) 

—The cell is intentionally left blank. 

Saving and Loading Alternative-Level Data 

The Open and Save buttons at the bottom of the Alternative input screen are used to open and 

save alternative-level data. These data files may be named via ordinary Windows conventions 

and are automatically saved with the *.LCA extension. Each strategy alternative can be saved 

and opened separately, which allows for quick retrieval of the data for use in future LCCA 

sessions. A name that is descriptive of the strategy alternative at hand should be used. The saved 

*.LCA file includes all data entered for the alternative, including its activities. 

Saving alternatives individually allows different alternatives to be loaded, analyzed, and stored 

for use in future analyses. Users are cautioned that opening an *.LCA file overwrites all existing 

data for the alternative that is in active memory. To avoid losing data, the user should save new 

data to an *.LCA file before loading another alternative.
39

The Copy Activity and Paste Activity buttons allow data to be copied from one activity to 

another within the same alternative. In this case, the user should begin at the activity that has the 

data to be copied, press the Copy button, move to the activity that is to receive the data, and then 

press the Paste button. All existing data in the receiving activity will be overwritten.

Probabilistic Input

RealCost encourages the consideration of variability (i.e., uncertainty) in analysis inputs. 

Therefore, input variability can be addressed by using probabilistically defined inputs. 

Probability Functions

The most commonly used probabilistic distribution functions and how they are defined 

(e.g., mean, standard deviation, minimum, maximum, most likely values) are displayed in 

table 8. More information on the use of probability distributions is provided in FHWA’s 

Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin (Walls and 

Smith 1998). 

Table 8. Examples of input probability distributions typically used in RealCost.

Distribution 

Type Spreadsheet Formula Illustration

Normal lccanormal (mean, std dev) 

Truncated 

Normal 

lccatnormal (mean, std dev, 

lower bound, upper bound) 

Triangular lccatriang (minimum, most 

likely, maximum)

Uniform lccauniform (minimum, 

maximum) 

Source: FHWA.

std dev = standard deviation.
40

Probability Input Methods 

Users can make probabilistic input in two ways: 

• Via the Probabilistic Input Add-in menu on the input worksheet. 

• Via the Switchboard input screens. 

Figure 21 shows an example of defining the discount rate as a probabilistic input on the input 

worksheet. Users can place the cursor on the input cell and select the Probabilistic Input from the

RealCost Add-ins menu. 

Source: FHWA.

Figure 21. Screenshot. Probabilistic Input Add-in menu on the input worksheet. 

Users can select a desired probabilistic function in the Probabilistic Function user form 

(figure 22) then input the required function parameters for the selected function (figure 23).
41

Source: FHWA.

Figure 22. Screenshot. Probabilistic distribution selection. 

Source: FHWA.

Figure 23. Screenshot. Input parameters for a probabilistic function.
42

The example in figure 24 shows the process of changing the value of user time for passenger-car 

vehicles from a deterministic value to a normal distribution, using the Switchboard input screens. 

Most data inputs can be assigned a probabilistic function. 

Source: FHWA.

Figure 24. Screenshot. The ellipsis button accesses probabilistic inputs for the specific data 

element.

Several inputs on the Project-Level and Alternative-Level input screens can be described either 

by deterministic values (single or point values) or by probabilistic values (value ranges and 

likelihoods of occurrence). The default value for all data is deterministic. The probabilistic inputs 

are identified by the small ellipsis button to the right of the data input field. For example, in 

figure 24, the ellipsis button for the value of user time for passenger cars is circled.
43

Clicking an ellipsis button (figure 24) opens a probability function input screen with the 

deterministic input as default (figure 25) and the variable name included from the previous 

screen. Users can change the default deterministic to one of seven probability functions—

normal, truncated normal, triangular, uniform, beta, geometric, and log-normal—to describe the 

input data (figure 26). Then, users can enter the parameters for the assigned function (figure 27).

Source: FHWA.

Figure 25. Screenshot. Creating a probabilistic input—default is deterministic. 

Source: FHWA.

Figure 26. Screenshot. Creating a probabilistic input—assign a probabilistic function. 
44

Source: FHWA.

Figure 27. Screenshot. Creating a probabilistic input—enter the parameters for a 

probabilistic function. 

SIMULATION AND OUTPUTS

The Simulation and Outputs section of the Switchboard is where deterministic lifecycle costs and 

simulations of probabilistic lifecycle costs are performed. The deterministic analysis is 

conducted using the most likely input from a probabilistic list of inputs.

Deterministic Results

The Deterministic Results output screen, shown in figure 28, calculates deterministic presentworth values for both agency and user costs and displays those values. The lowest cost strategy 

alternatives for both agency and user are labeled. The screen also provides a direct link to the 

Deterministic Results Excel worksheet, which contains all the information required to investigate 

deterministic results.
45

Source: FHWA.

Figure 28. Screenshot. Deterministic Results output screen.

Probabilistic Analysis

Running the Simulation 

Running a simulation is a necessary step toward performing a probabilistic analysis. To conduct 

probabilistic analysis, RealCost uses the Monte Carlo simulation technique, which allows 

modeling of the uncertainty or variability associated with a particular probabilistic input. Monte 

Carlo simulation involves random sampling of inputs and calculating the potential range and 

likelihood of output values. The simulation produces the probabilistic outputs; without running a 

simulation, such probabilistic outputs are not available. The Simulation input screen is shown in 

figure 29. 

Source: FHWA.

Figure 29. Screenshot. Simulation input screen.

The Sampling Scheme section of the Simulation input screen determines from where the 

software will draw its simulation numbers. The Random Results option causes the simulation 

seed value (where the simulation starts) to come from the computer’s internal clock. While not 

truly random, this seed value cannot be influenced by the software user, and it produces different 
46

values with each simulation. The Reproducible Results option allows the analyst to specify the 

seed value to be used in all simulations, which causes the same set of random numbers to be 

generated from the pseudo-random number generator. Choosing Reproducible Results allows the 

user to perform separate simulation runs to compare multiple alternatives, knowing that 

variations from run to run will be caused by actual input changes and not variability associated 

with different seed values. 

Tail Analysis Percentiles are used to analyze the lifecycle cost probability distributions generated

by RealCost. Percentile values should be entered in ascending order.

The Iteration section is used to determine the number of iterations to be performed and whether 

the simulation will be monitored for convergence. Output convergence can be used by the 

analyst to determine that a simulation has run enough iterations to properly define its outputs.

Convergence is monitored by checking the change in the cumulative outputs of each of six 

lifecycle cost statistics (mean, standard deviation, 10th, 25th, 75th, and 90th percentile) each 

time a specified number of iterations is completed (specified in the Monitoring Frequency box). 

Once the maximum change falls below the specified Convergence Tolerance, RealCost will end 

the simulation run without completing any remaining iterations—yielding probabilistic results 

while significantly shortening the time it takes to complete the analysis. The number of iterations 

should be 2,000 at a minimum. Fewer iterations (e.g., 250 to 500) are appropriate for preliminary 

runs intended to ensure the proper operation of the program or to check for the reasonableness of 

outputs. Monitoring Frequency is adequate at 100 iterations, and, when used, a Convergence 

Tolerance of 2.5 (percent) should provide appropriate probabilistic outputs. 

Figure 30 shows a simulation that ended due to simulation convergence of less than 2.5 percent.

Note that the convergence error is listed at the bottom of the screen. This convergence error is 

monitored and reported during the simulation. 

Source: FHWA.

Figure 30. Screenshot. Simulation input screen at the conclusion of a simulation run.
47

Analyzing Probabilistic Results

After a simulation is run, probabilistic results are recorded and made available for examination 

and analysis. A simulation must be run before viewing probabilistic results. The simulation 

results for both agency costs and user costs (if included) are kept separate, per the 

recommendation of Life-Cycle Cost Analysis in Pavement Design Interim Technical Bulletin

(Walls and Smith 1998). After the simulation run, the user needs to close the simulation screen 

and return to the Switchboard. After this step, the user needs to click on the Probabilistic Results 

button within the Switchboard, and the following screen shown in figure 31 will appear.

Source: FHWA.

Figure 31. Screenshot. Probabilistic Results output screen.

Figure 32 shows the statistical results of a probabilistic simulation involving four alternatives 

(recall that up to six alternatives can be analyzed simultaneously as part of one simulation). The 

results are presented in tabular form in the Probabilistic Results output screen.

Source: FHWA.

Figure 32. Screenshot. Statistical results of a probabilistic simulation. 

The Analysis Results viewer worksheet provides a selection to view the Output Distribution, 

Tornado Graphs Analysis, and Extreme Tail Analysis. The Output Distributions provide the 

probability density and cumulative distribution functions that directly compare the strategic

alternatives. The Tornado Graphs Analysis and the Extreme Tail Analysis provide additional 

information for assessing the simulation results for each alternative. Discussions of these 

analysis techniques using RealCost are provided in the following paragraphs. 
48

Comparison of Probability Distribution Curves 

The probability density function identifies both the range and likelihood of possible lifecycle 

cost values (figure 33) for a design strategy alternative. The curve itself identifies the probability 

of any cost occurring. The area bounded by the curve and to the left of a specified value (e.g., 

$4.3 million) indicates the probability that the projected lifecycle cost will not exceed that value 

(i.e., 75 percent). Alternatively, the area bounded by the curve and to the right of the specified 

value indicates the probability that the projected lifecycle cost will not be lower than the 

specified value (i.e., 25 percent). The total area under the curve will always sum to 1.0 or 

100 percent. 

Source: FHWA. 

Figure 33. Graph. Probability density function.

The cumulative distribution function is the “area so far” function of the probability density 

function. It is the summation of area (i.e., sum probability) under the probability density curve as 

a function of the projected lifecycle costs. Mathematically, a probabilistic density function is a 

derivative of the cumulative distribution function. The conversion of the probability density 

curve in figure 33 yields the cumulative distribution shown in figure 34. This figure more clearly 

shows a 75 percent probability that the projected lifecycle cost of the strategic alternative will be 

less than or equal to $4.3 million. It also shows the projected lifecycle costs corresponding to the 

10, 25, 50, and 90 percent probability levels. For instance, there is a 25-percent likelihood of the 

cost being less than or equal to $4.2 million. 
49

Source: FHWA. 

Figure 34. Graph. Cumulative distribution function.

Analyzing the lifecycle cost results of two or more alternatives requires more than just 

comparing the mean costs to determine which one is the lowest. It requires an examination of 

both the mean and the variation of the costs. Furthermore, while an overlay of the probability 

density functions of the various alternatives can provide a general understanding of the mean and 

variation, a simpler and better understanding is achieved through an overlay of the cumulative 

distribution curves, as illustrated in figure 35. 

Source: FHWA. 

Figure 35. Graph. Cumulative distribution curves for two design strategy alternatives.

In this figure, Alternative A has a lower mean lifecycle cost than Alternative B, and at the 

10- and 25-percent probability levels, the costs for Alternative A are also considerably lower. 
50

However, at the 75- and 90-percent probability levels, the costs for Alternative B are less than 

those for Alternative A. The lower standard deviation for agency cost of Alternative B makes it 

the more economically attractive option at the higher reliability levels.

Alternatives can also be compared via the difference distribution curve. This type of analysis can 

be used to determine the true assessment of the probabilities associated with the lowest cost 

alternative. Although not a standard feature in RealCost, the difference distribution analysis can 

be conducted by creating a new worksheet within RealCost that includes equations for 

determining the cost difference between competing alternatives. For example, figure 36

illustrates an inserted worksheet for calculating the total, agency, and user cost differences 

between alternatives 1 and 2. The equations used in column B are shown adjacent to the 

corresponding cell. 

Source: FHWA.

Figure 36. Screenshot. Worksheet for calculating difference distribution.

Each cell must also be characterized as a RealCost output to be included in the probabilistic 

analysis process. To complete this step, users select RealCost Output for each cell from the 

RealCost menu command, as shown in figure 37 and figure 38. 
51

Source: FHWA.

Figure 37. Screenshot. Establishing a cell as a RealCost Output—Step 1. 

Source: FHWA.

Figure 38. Screenshot. Establishing a cell as a RealCost Output—Step 2. 

The resulting difference distribution curve simplifies the comparison of cumulative distribution 

curves by associating a level of reliability with the difference between the two alternatives. 

Figure 39 shows the difference distribution curve for the two alternatives compared in Figure 35, 

where approximately two-thirds of the simulation outcomes for Alternative A are less than 

Alternative B. It should be noted that different distribution curves that are symmetric about zero 

have balanced risk between alternatives.
52

Source: FHWA. 

Figure 39. Graph. Difference distribution curve for two design strategy alternatives. 

The Tornado Graphs Analysis worksheet contains correlation sensitivity plots in the form of

tornado graphs that display the significance of model inputs on the lifecycle cost output 

distribution for each alternative. The significance is measured by the correlation coefficient, 

which is indicated by the bar length in a tornado graph (figure 40). The higher the degree of 

correlation between the input and output, the more the input variable is affecting the output. A 

correlation coefficient of 1 indicates a perfect positive correlation between variables, a value of 0 

indicates no correlation, and a value of −1 indicates a complete inverse correlation. In the 

tornado graph, the input variables are plotted top-down in the decreasing order of correlation, 

giving rise to the funnel shape. 

The correlation coefficient implies that if the input variables’ mean is changed by 1 standard 

deviation of the input, the output mean will be changed by X times the standard deviation of the 

output, with X being the correlation coefficient value. Hence, in figure 42, if the mean value of 

the most influential input parameter (Activity 1 Agency Cost) is increased by 1 standard 

deviation, then the mean lifecycle cost will be increased by 0.85 times the standard deviation 

lifecycle cost. And, if the mean value of the second most influential parameter (Activity 1 

Service Life) is increased by 1 standard deviation, then the mean lifecycle cost will be decreased 

by 0.33 times the standard deviation lifecycle cost. 
53

Source: FHWA. 

Figure 40. Chart. Correlation sensitivity plot (“tornado graph”). 

Extreme Tail Analysis

The Extreme Tail Analysis worksheet provides insight into the sensitivity of the lifecycle cost 

outputs to a combination of inputs. Particular emphasis is given to the tails of the distribution, 

which encompass the most extreme outcomes encountered in the analysis. As mentioned in the 

Running Simulation section, the analyst may enter four Tail Analysis Percentiles to define the 

areas of the tails of most interest. RealCost demonstrates how various inputs act together to 

produce these four defined tail areas. 

In the extreme tail analysis, key inputs are identified by evaluating the relationship between 

inputs and simulation results for the area or “tail” of interest in the output distribution. The 

analysis hinges on the computation of an alpha (α) value, which is computed as the difference 

between the median of the input subset (i.e., the area or tail of interest) and all values, divided by 

the standard deviation for all input values. Alpha values greater than 0.5 or less than −0.5 

indicate the input is a significant driver in the output extremes. Conversely, alpha values between 

(and inclusive of) 0.5 and −0.5 indicate the input is not a significant driver in the output 

extremes. 

RealCost computes and displays the alpha values for each input from the four defined tail areas. 

Table 9 illustrates the Extreme Tail Analysis worksheet following the completion of a 

simulation. In this table, only the variable Alternative 1 Activity 1 Agency Cost is shown to be a 

significant driver in the lifecycle cost extremes. The cells shaded in red (α < −0.5) indicate that 

the lower portion of the input distribution curve is significant in forcing the output distribution 

curve outward. The blue-shaded cells (α > 0.5) indicate that the upper portion of the input 

distribution curve is significant in forcing the output distribution curve outward. 
54

Table 9. Example of RealCost Extreme Tail Analysis Results—Alternative 1 Agency Cost. 

Input Variable

5th

Percentile

10th 

Percentile

90th 

Percentile 95th Percentile

Discount Rate 0.07 0.11 −0.10 −0.08

Alternative 1: Activity 1: 

Agency Cost −1.83a −1.61a 1.63b 1.96b

Alternative 2: Activity 1: 

Agency Cost −0.21 −0.18 0.01 0.03 

Alternative 1: Activity 1: 

Service Life 0.40 0.26 −0.31 −0.37 

Alternative 2: Activity 1: 

Service Life −0.08 −0.09 −0.09 −0.09 

Alternative 1: Activity 2: 

Agency Cost −0.13 −0.17 0.23 0.09 

Alternative 2: Activity 2: 

Agency Cost 0.00 0.00 −0.11 −0.06 

Alternative 1: Activity 2: 

Service Life 0.02 0.06 −0.09 −0.07 

Alternative 2: Activity 2: 

Service Life 0.18 0.07 −0.11 −0.12 

Alternative 1: Activity 3: 

Agency Cost −0.27 −0.20 0.16 0.24 

Alternative 2: Activity 3: 

Agency Cost −0.07 −0.05 0.06 −0.02 

Alternative 1: Activity 3: 

Service Life 0.18 0.07 −0.08 −0.12 

Alternative 2: Activity 3: 

Service Life 0.00 0.07 −0.07 −0.03 

Alternative 1: Activity 4: 

Agency Cost −0.21 −0.25 0.11 0.19 

Alternative 1: Activity 4: 

Service Life −0.03 0.06 −0.14 −0.14 

a

Highlights cells that are shaded in red, indicating that the lower portion of the input distribution curve is 

significant in forcing the output distribution curve outward. b

Highlights cells that are shaded in blue, indicating that the upper portion of the input distribution curve is 

significant in forcing the output distribution curve outward.
55

TRAFFIC CALCULATOR

The Traffic Calculator is a utility tool to find the maximum AADT for a given number of hours 

for queues. The tool is located on the Traffic Calculator worksheet (figure 41). 

Source: FHWA.

Cal = calculate.

Figure 41. Screenshot. The Traffic Calculator worksheet. 

The user inputs in the Traffic Calculator include: 

• Alternative Number—input the desired alternative number (e.g., 4). 

• Rehab Number—input the desired rehabilitation number (e.g., 1). 

• Maximum queue (hours)—input the desired maximum queue hours (e.g., 12). 

• Seed AADT value—input the desired starting AADT for the computation (e.g., 100,000). 

• AADT Increment—input the desired AADT increment for the computation (e.g., 1,000). 

After the inputs, users can click the Cal Max AADT button to start the computation. A progress 

bar will be shown until the computation is complete. The tracking and outputs include: 

• Current AADT—tracking current AADT input.

• Current Queue (hours)—tracking current Queue input. 

• Maximum AADT—the computed maximum AADT. 

• Queue at Max AADT (hours)—the queue hours at the maximum AADT.

57

APPENDIX A. REALCOST EXAMPLE EXERCISES

This appendix presents four example exercises to familiarize the reader with the application and 

use of RealCost. Each exercise is derived from actual projects in which a probabilistic LCCA 

was performed to help the owner agency choose the appropriate strategy alternative for 

implementation. The number of strategic alternatives evaluated and compared in each example 

varies.

Three of the four examples are pavement LCCAs that represent a range of conditions (setting, 

traffic, project type) encountered frequently by most highway agencies. The first example 

involved a new construction project located in a rural setting with moderate traffic volume. The 

second example consisted of a reconstruction project located in an urban setting with high traffic 

volume. The third example involved a reconstruction project located in a rural setting with 

moderately low traffic. In each example, both deterministic and probabilistic computations and 

results are provided for illustration. Example 2 also included further discussion on tornado 

graphs and extreme tail analysis, while example 3 included customizations of RealCost using 

difference distribution and bid-item level probabilistic inputs.

The fourth example exercise is for a bridge LCCA project. The example involved the 

replacement of two adjacent bridges located on a rural highway with moderately low traffic. 

Both deterministic and probabilistic computations are included, and work zone user costs are 

considered. 
58

PAVEMENT LCCA EXAMPLE 1—RURAL NEW CONSTRUCTION

The project featured in this example involves the 2020 construction of a new four-lane divided 

highway facility in a largely rural location. The project will create a new 6-mi long, east-west 

connection between an interstate and a key State route. The highway will consist of four 

12-ft-wide lanes, a 46-ft-wide median, 4-ft-wide inside shoulders, and 10-ft-wide outside 

shoulders. The project was designed to provide for future high occupancy vehicle lanes in the 

median. The two-way AADT has been estimated to be 30,866 vehicles per day (vpd). 

Two different pavement designs were developed for the project, one a conventional asphalt 

pavement and the other a PCC pavement. The asphalt pavement consisted of 9.5 inches of HMA 

placed on 8 inches of the crushed aggregate base (CAB). The inside shoulder used the same 

design, while the outside shoulder consisted of 3 inches of HMA placed on a 14.5-inch CAB. 

The PCC pavement consisted of 12 inches of doweled, jointed concrete placed on top of 

3.5 inches of HMA base and 3.5 inches of CAB. Both shoulders were designed to consist of 

4 inches of HMA on 15 inches of CAB. The subgrade for both designs consisted of a well to 

poorly graded gravelly sand. 

The two designs are to be evaluated on a probabilistic lifecycle cost basis using a 50-yr analysis 

period (a deterministic analysis will also be performed with a discount rate of 1.37 percent). A 

triangular distribution is assumed for the discount rate, with the minimum, most likely, and 

maximum values being 0.4, 1.4, and 2.3 percent, respectively. Both daytime and nighttime 

construction scenarios are to be considered in the LCCA, resulting in four unique pavement 

alternatives: HMA (day work), HMA (night work), PCC (day work), and PCC (night work). 

Lifecycle cost computations for each alternative are to be based on a 1-mi long “typical” section 

of roadway. 

LCCA Inputs

The following summarizes the RealCost inputs related to traffic, pavement performance, agency 

costs, and work zone user costs.

Traffic

The following lists the traffic data inputs used in the simulation. They include the base year 

AADT, the traffic growth rate estimate, and the percentage of trucks and automobiles. 

• Initial AADT (both directions)—30,866 vpd. 

• Traffic Growth Rate—1.9 percent (deterministic).

• Percent Automobiles—90 percent. 

• Percent Trucks—10 percent (4 percent single units and 6 percent combination units). 

Pavement Performance and Activity Timing

The historical pavement performance data on similar highways in the vicinity of the proposed 

project provided the estimated values for service life and timing of rehabilitation activities (i.e., 

HMA overlays, PCC diamond grinding). The analysis period for the asphalt design includes two 

thin resurfacings with 12- and 13-yr functional lives and a third rehabilitation. The two 
59

thin-resurfacings after the initial construction account for 40-yr structural life, and the last 

portion of the analysis period is covered by the structural overlay at year 40. 

For the PCC design, a 50-yr structural life is anticipated. However, a rehabilitation treatment in 

the form of concrete pavement restoration (CPR) is forecasted at year 30 to address roughness 

and friction issues. The service life of the CPR is estimated to be 20 yr.

For probabilistic simulation, a normal distribution will be applied to the service lives of the 

original structures and the future rehabilitation treatments (and, consequently, the timings of the 

future rehabilitation treatments). A summary of each design’s construction and expected 

rehabilitation treatments are provided in table 10 and table 11. 

Table 10. Summary of activities and service life—rural new construction (HMA pavement 

(day work and night work)). 

Activity Pavement Structure

Service Life, 

Yearsa

—Mean

Service Life, 

Yearsa

—Std 

Dev

New construction

(40-yr structural life)

9.5-inch HMA over 8.0 inches of

CAB (mainline and inside shoulder), 

3.0-inch HMA on 14.5 inches of

CAB (outside shoulder) 

15.0 1.5 

Rehabilitation 1 

(functional) 

1.75-inch HMA overlay (mainline 

and shoulders) 

13.0 1.3 

Rehabilitation 2 

(functional) 

1.75-inch mill and HMA inlay 

(mainline) and chip seal shoulders

12.0 1.2 

Rehabilitation 3 

(15-yr structural life)

3.0-inch HMA overlay (mainline and 

shoulders) 

15.0 1.5 

a

Normal probability distribution assumed.

Table 11. Summary of activities and service life—rural new construction (PCC pavement 

(day work and night work)). 

Activity Pavement Structure

Service Life, 

Yearsa

—Mean

Service Life, 

Yearsa—Std 

Dev

New construction

(50-yr structural life)

12.0-inch PCC over 3.5-inch HMA 

and 3.5-inch CAB and 4.0-inch HMA 

on 15.0-inch CAB (shoulders) 

30.0 3.0 

Rehabilitation 1 

(functional) 

CPR (patching, grinding, and joint 

resealing) (mainline) and chip seal 

shoulders 

20.0 2.0 

a

Normal probability distribution assumed.
60

Agency Costs

The per-mile unit length costs for new construction and future rehabilitation are computed by 

using the estimated quantities and historical unit cost data for these actions and all associated 

traffic control costs, mobilization costs, and engineering costs. These costs, expressed in terms of 

means and standard deviations (normal probability distribution), are listed in table 12 through 

table 15. For both the HMA and PCC alternatives, it was assumed that the cost of 

construction/rehabilitation was 5 percent higher for night work compared to day work. 

Table 12. Agency cost input values—rural new construction with HMA Pavement 

(day work).

Activity Year

Cost ($a) for 

1-mi length

(Mean) 

Cost ($a) for 

1-mi length

(Standard

Deviation) 

New construction 0 1,985,000 198,500 

Rehabilitation 1: HMA overlay 15 327,000 32,700 

Rehabilitation 2: mill and HMA 

overlay 

28 391,000 39,100 

Rehabilitation 3: HMA overlay 40 550,000 55,000 a

Normal probability distribution assumed.

Table 13. Agency cost input values—rural new construction with HMA pavement 

(night work).

Activity Year

Cost ($a) 

for 1-mi length

(Mean) 

Cost ($a) 

for 1-mi length

(Standard

Deviation) 

New construction 0 2,084,000 208,400 

Rehabilitation: HMA overlay 15 343,000 34,300 

Rehabilitation: mill and HMA 

overlay 

28 411,000 41,100 

Rehabilitation: HMA overlay 40 578,000 57,800 a

Normal probability distribution assumed.
61

Table 14. Agency cost input values—rural new construction with PCC pavement 

(day work). 

Activity Year

Cost ($a) 

for 1-mi length 

(Mean) 

Cost ($a) 

for 1-mi length

(Standard

Deviation) 

New construction 0 3,465,000 346,500 

Rehabilitation: CPR 30 600,000 60,000 a

Normal probability distribution assumed.

Table 15. Agency cost input values—rural new construction with PCC pavement 

(night work).

Activity Year

Cost ($a) 

for 1-mi length

(Mean) 

Cost ($a) 

for 1-mi length 

(Standard

Deviation) 

New construction 0 3,638,000 363,800 

Rehabilitation: CPR 30 630,000 63,000 a

Normal probability distribution assumed.

Work Zone User Costs

Since the new construction will not have traffic, no user costs for this event will be assessed. 

However, work zone user costs can and will be calculated for each future rehabilitation treatment 

applied. Each work zone setup will require closing one of two lanes per direction. Expected work 

zone hours of operation are as follows: 

• Daytime construction scenario: 

o HMA Rehabilitations 1, 2, and 3—9 a.m.–5 p.m. (inbound) and 6 a.m.−3 p.m. 

(outbound). 

o PCC Rehabilitation 1—9 a.m.–5 p.m. (inbound) and 6 a.m.–3 p.m. (outbound). 

• Nighttime construction scenario: 

o HMA Rehabilitations 1, 2, and 3—7 p.m.–5 a.m. (inbound and outbound). 

o PCC Rehabilitation 1—7 p.m.–5 a.m. (inbound and outbound). 

Table 16 summarizes key aspects of each work zone and lists the values of time for the three 

vehicle types. 
62

Table 16. Work zone details—the rural new construction.

Detail

HMA Pavement

Rehabilitations 1, 2, 

and 3 

PCC Pavement

Rehabilitation 1—

CPR

Work zone operation (one direction) 1 of 2 lanes open 1 of 2 lanes open

Approach speed (mph) 60 60 

Work zone speed (mph) 40 40 

Work zone hours of operation—Daytime 

Scenario

9 a.m.–5 p.m. (in)

6 a.m.–3 p.m. (out) 

9 a.m.–5 p.m. (in)

6 a.m.–3 p.m. (out) 

Work zone hours of operation—Nighttime 

Scenario

7 p.m.–5 a.m. (in)

7 p.m.–5 a.m. (out) 

7 p.m.–5 a.m. (in)

7 p.m.–5 a.m. (out) 

Construction Duration—Daytime Scenario 

(days) 3 9 

Construction Duration—Nighttime Scenario 

(days) 3 9 

Value of time of passenger vehicles

($/h/vehicle)

13.96 (mean) 

1.40 (std dev) 

13.96 (mean) 

1.40 (std dev) 

Value of time of single-unit trucks 

($/h/vehicle)

22.34 (mean) 

2.23 (std dev) 

22.34 (mean) 

2.23 (std dev) 

Value of time of combination trucks

($/h/vehicle)

26.89 (mean) 

2.69 (std dev) 

26.89 (mean) 

2.69 (std dev) 

Additional inputs established for the computation of work zone user costs are as follows:

• Free-flow capacity—2,137 vehicles per hour per lane (vphpl) (based on the 

Transportation Research Board’s (TRB’s) Highway Capacity Manual (1994)).

• Queue dissipation capacity—1,818 passenger cars per lane per hour (for all rehabilitation 

activities).

• Maximum AADT (two-way)—140,000 vpd (based on selected design hourly volume and 

adjustments for the percentage of trucks and other traffic flow factors).

• Maximum queue length—2.0 mi (based on the distance to upstream detour exit). 

• Work zone capacity—1,340 vphpl. 

• Transportation Component CPI (Base Year 2009)—205. 

Lifecycle Cost Computation

Both deterministic- and probabilistic-based LCCAs were performed, the results of which are 

described in the following sections.
63

Deterministic Results

Table 17 and table 18 present the results of the deterministic analysis. Both the agency costs and 

user costs for each of the four alternatives are listed in terms of net present value (NPV) and 

equivalent uniform annual cost (EUAC). Figure 42 and figure 43 provide graphical displays of 

the NPV results. Based on the input values described previously, the HMA (day work) and HMA 

(night work) alternatives resulted in the lowest agency lifecycle cost, a difference of 29 percent 

lower than the two PCC alternatives.
64

Table 17. Deterministic LCCA results—rural new construction example (1/2). 

Total Cost

Alternative 1: 

HMA 

Pavement 

(Day Work) 

Agency Cost

($1,000)

Alternative 1: 

HMA 

Pavement 

(Day Work) 

User Cost

($1,000)

Alternative 2:

HMA 

Pavement

(Night Work) 

Agency Cost

($1,000)

Alternative 2:

HMA 

Pavement

(Night Work) 

User Cost

($1,000)

Alternative 3:

PCC Pavement

(Day Work) 

Agency Cost

($1,000)

Alternative 3:

PCC Pavement

(Day Work) 

User Cost

($1,000)

Alternative 4:

PCC Pavement

(Night Work) 

Agency Cost

($1,000)

Alternative 4:

PCC Pavement

(Night Work) 

User Cost

($1,000)

NPV 2,745.69 379.06 2,882.95 32.59 3,864.30 551.71 4,057.26 22.87 

EUAC 76.16 10.51 79.96 0.90 107.18 15.30 112.54 0.63 

Table 18. Deterministic LCCA results—rural new construction example (2/2). 

Description Alternatives

Lowest present value agency cost Alternative 1: HMA pavement (day work)

Lowest present value user cost Alternative 4: PCC pavement (night work)
65

Source: FHWA.

Figure 42. Graph. Present value agency costs—new construction example.

Source: FHWA.

Figure 43. Graph. Present value user costs—new construction example.

Concerning user costs, the PCC (night work) alternative resulted in the lowest lifecycle cost, a 

difference of nearly 30 percent lower than the next lowest alternative (HMA (night work)). For 

both pavement types, the use of night work results in significantly reduced user costs. This 

reduced cost is because fewer vehicles are on the roadway during nighttime hours, which results 

in fewer user delays. If the agency and user lifecycle costs are added together, the alternative 

with the lowest total cost is the HMA (night work) alternative ($2,916,000).
66

Probabilistic Results

A probabilistic simulation was performed using 2,500 iterations (computational time = 947 s1

). 

The resulting agency- and user-cost NPV statistics (mean, standard deviation, minimum, 

maximum) are summarized in table 19. The frequency and cumulative distribution curves are 

illustrated in figure 44 through figure 47. As shown, the mean agency costs from the 

probabilistic analysis are very similar to the values from the deterministic analysis (table 19). 

Because the HMA alternatives’ mean costs are substantially lower than the PCC alternatives and 

the cost standard deviations for the three HMA alternatives are considerably lower than the 

corresponding PCC alternatives, the HMA alternatives have the lower lifecycle cost over the 

entire probability range. Similarly, comparing the HMA (day work) and HMA (night work) 

results show that the former alternative has a lower agency lifecycle cost over the entire 

probability range.

In terms of the user lifecycle costs, the two nighttime scenarios provide the lowest costs. There 

are only minor differences between the HMA (night work) alternative and the PCC (night work) 

alternative. Because the PCC alternative has a lower mean cost and a slightly lower standard 

deviation, it maintains lower user lifecycle costs over the entire probability range.

1

The computation time may vary, depending on the computer’s hardware and software.
67

Table 19. Probabilistic LCCA results—rural new construction example.

Total Cost

(Present 

Value)

Alternative 1: 

HMA 

Pavement

(Day Work) 

Agency Cost

($1,000)

Alternative 1: 

HMA 

Pavement

(Day Work) 

User Cost

($1,000)

Alternative 2:

HMA 

Pavement

(Night Work) 

Agency Cost

($1,000)

Alternative 2:

HMA 

Pavement

(Night Work) 

User Cost

($1,000)

Alternative 3:

PCC 

Pavement

(Day Work) 

Agency Cost

($1,000)

Alternative 3:

PCC 

Pavement

(Day Work) 

User Cost

($1,000)

Alternative 4:

PCC 

Pavement

(Night Work) 

Agency Cost

($1,000)

Alternative 4:

PCC 

Pavement

(Night Work) 

User Cost

($1,000)

Mean 2,749.65 374.90 2,883.49 32.76 3,835.99 501.47 4,049.81 22.43 

Standard 

deviation 229.78 53.80 232.78 5.48 349.76 94.87 370.10 2.87 

Minimum 2,027.88 228.90 2,060.93 18.88 2,762.78 200.76 2,868.46 14.56 

Maximum 3,464.84 572.89 3,602.59 51.14 5,029.89 857.29 5,258.89 31.64 
68

Source: FHWA.

Figure 44. Graph. Probability distribution of agency costs—rural new construction. 

Source: FHWA.

Figure 45. Graph. Cumulative probability distribution of agency costs—rural new 

construction.

 

 

 

 
69

Source: FHWA.

Figure 46. Graph. Probability distribution of user costs—rural new construction.

Source: FHWA.

Figure 47. Graph. Cumulative probability distribution of user costs—rural new 

construction.

 

 

 

 
70

Preferred Alternative

The deterministic and probabilistic analyses indicate that the HMA (day work) alternative yields 

the lowest total agency lifecycle cost. A final selection of an alternative would naturally consider 

a variety of other monetary and nonmonetary factors. 

PAVEMENT LCCA EXAMPLE 2—URBAN RECONSTRUCTION 

The project featured in this example involves the 2020 reconstruction and widening of an 

existing four-lane divided highway facility in an urban location. The project will create an 

eight-lane interstate facility that is 7.0-mi long. The highway will consist of eight 12-ft-wide 

lanes, 10-ft-wide inside shoulders, and 12-ft-wide outside shoulders (which may be used in the 

future as an additional general-purpose lane). The two-way AADT has been estimated to be 

72,000 vpd. 

Two pavement designs were developed for the project, asphalt pavement and a PCC pavement. 

The asphalt pavement consists of 10.0 inches of HMA placed on 5.4 inches of CAB. The 

shoulders will be constructed with the same pavement section as specified for the mainline. The 

PCC pavement consists of 12.0 inches of doweled, jointed concrete placed over a 2.4-inch HMA 

base and 3.0 inches of CAB. Shoulders will be constructed with the same section as specified for 

the mainline. The subgrade for both designs consist of a glacial till.

The two designs will be evaluated on both a deterministic and probabilistic lifecycle cost basis 

using a 50-yr analysis period. A triangular distribution is assumed for the discount rate, with the 

minimum, most likely, and maximum values being 0.4, 1.4, and 2.3 percent, respectively. Both 

daytime and nighttime construction scenarios will be considered in the LCCA, resulting in four 

unique pavement alternatives: HMA daytime, PCC daytime, HMA nighttime, and PCC 

nighttime. Lifecycle cost computations for each alternative are to be based on a 1-mi long 

“typical” section of roadway.

LCCA Inputs

The following summarizes the RealCost inputs related to traffic, pavement performance, agency 

costs, and work zone user costs.

Traffic

The following list contains the traffic data inputs to be used in the simulation. They include the 

base year AADT, the traffic growth rate estimate, and the percentage of trucks and automobiles. 

• Initial AADT (both directions)—72,000 vpd. 

• Traffic Growth Rate—2.5 percent most likely (triangular distribution, with

2.0 percent minimum and 3.0 percent maximum). 

• Percent Automobiles—90 percent. 

• Percent Trucks—10 percent (5.2 percent singles and 4.8 percent combinations). 
71

Pavement Performance and Activity Timing

Each proposed initial structure’s service life was estimated using historical pavement 

performance data on similar highways in the vicinity of the proposed project and the life of each 

appropriate form of rehabilitation (i.e., HMA overlays, PCC diamond grinding). For the asphalt 

pavement design, an initial life of 14 yr and an 8-yr rehabilitation cycle is considered to represent 

the best expected performance. For the PCC design, a rehabilitation treatment in the form of 

major CPR is forecasted to occur after 25 yr. For probabilistic simulation, a triangular 

distribution will be applied to the timings of future rehabilitation treatments. A summary of each 

design’s construction and expected rehabilitation treatments are provided in table 20 and 

table 21. 

Table 20. Summary of construction and future rehabilitation treatments—urban 

reconstruction with HMA pavement (day work and night work). 

Activity Pavement Structure

Service Life, 

Yearsa

—Most 

Likely

Service Life, 

Yearsa

Minimum,

Maximum 

Reconstruction 

(50-yr structural 

life)

12.0-inch HMA over 5.4-inch CAB

(mainline and shoulders)

14.0 12.0, 16.0 

Rehabilitation 1 

(functional) 

1.75-inch mill and HMA inlay

(mainline only)

fog seal shoulders

8.0 6.0, 10.0 

Rehabilitation 2 

(functional) 

1.75-inch mill and HMA inlay

(mainline only),

fog seal shoulders

8.0 6.0, 10.0 

Rehabilitation 3 

(functional) 

1.75-inch HMA overlay (mainline 

only) 

8.0 6.0, 10.0 

Rehabilitation 4 

(functional) 

1.75-inch mill and HMA inlay

(mainline only)

fog seal shoulders

8.0 6.0, 10.0 

Rehabilitation 5 

(functional) 

1.75-inch mill and HMA inlay

(mainline only)

fog seal shoulders

8.0 6.0, 10.0 

a

Triangular probability distribution assumed.
72

Table 21. Summary of construction and future rehabilitation treatments—urban 

reconstruction with PCC pavement (day work and night work). 

Activity Pavement Structure

Service Life, 

Yearsa

—Most 

Likely

Service Life, 

Yearsa

Minimum,

Maximum 

Reconstruction 

(50-yr structural 

life)

12.0-inch PCC over 2.4-inch HMA 

and 3.0-inch CAB

(mainline and shoulders)

25.0 20.0, 30.0 

Rehabilitation 1 

(functional) 

CPR (patching, grinding, and joint 

resealing) (mainline)

fog seal shoulders

25.0 20.0, 30.0 

a

Triangular probability distribution assumed.

Agency Costs

Using estimated quantities and historical unit cost data for these actions, as well as all associated 

traffic control costs, mobilization costs, and engineering costs, the 1-mi unit length costs for each 

action were computed for reconstruction and future rehabilitation. These costs, expressed in 

terms of means and standard deviations (normal probability distribution), are listed in table 22

through table 25. For both the HMA and PCC alternatives, it was assumed that the cost of 

construction/rehabilitation was 2.5 percent higher for night work compared to day work. 

Table 22. Agency cost input values—urban reconstruction with HMA pavement 

(day work). 

Activity Year

Cost ($a) 

for 1-mi length 

(Mean) 

Cost ($a) 

for 1-mi length

(Standard

Deviation) 

Reconstruction 0 5,118,491 511,849 

Rehabilitation 1: mill and HMA 

inlay

14 660,776 66,078 

Rehabilitation 2: mill and HMA 

inlay

22 660,776 66,078 

Rehabilitation 3: HMA overlay 30 838,509 83,851 

Rehabilitation 4: mill and HMA 

inlay

38 660,776 66,078 

Rehabilitation 5: mill and HMA 

inlay

46 660,776 66,078 

a

Normal probability distribution assumed.
73

Table 23. Agency cost input values—urban reconstruction with HMA pavement 

(night work). 

Activity Year

Cost ($a) 

for 1-mi length

(Mean)

Cost ($a)

for 1-mi length 

(Standard

Deviation)

Reconstruction 0 5,246,453 524,645

Rehabilitation 1: mill and HMA 

inlay

14 677,295 67,730

Rehabilitation 2: mill and HMA 

inlay

22 677,295 67,730

Rehabilitation 3: HMA overlay 30 859,472 85,947

Rehabilitation 4: mill and HMA 

inlay

38 677,295 67,730

Rehabilitation 5: mill and HMA 

inlay

46 677,295 67,730

a

Normal probability distribution assumed.

Table 24. Agency cost input values—urban reconstruction with PCC pavement (day work). 

Activity Year

Cost ($a) 

for 1-mi length

(Mean)

Cost ($a)

for 1-mi length

(Standard

Deviation)

Reconstruction 0 5,639,715 563,972

Rehabilitation 1: CPR 25 1,294,717 129,472 a

Normal probability distribution assumed.

Table 25. Agency cost input values—urban reconstruction with PCC Pavement 

(night work). 

Activity Year

Cost ($a) 

for 1-mi length

(Mean)

Cost ($a)

for 1-mi length 

(Standard

Deviation)

Reconstruction 0 5,780,708 578,071

Rehabilitation 1: CPR 25 1,327,085 132,709 a

Normal probability distribution assumed.

Work Zone User Costs

As part of this project, several bridges and structures will be reconstructed and that will control 

the reconstruction schedule. It is assumed that the reconstruction of either the HMA or PCC 

pavement option will require the same construction duration. Therefore, no difference in user 

costs is associated with reconstruction between the alternatives. Work zone user costs will be 
74

calculated for each future rehabilitation treatment. Each work zone setup will require closing one 

lane per direction. Expected work zone hours of operation are as follows: 

• Daytime construction scenario:

o HMA rehabilitation—9 a.m.–5 p.m. (inbound) and 6 a.m.–3 p.m. (outbound). 

o PCC rehabilitation—9 a.m.–5 p.m. (inbound) and 6 a.m.–3 p.m. (outbound). 

• Nighttime construction scenario:

o HMA rehabilitation—7 p.m.–6 a.m. (inbound) and 7 p.m.–6 a.m. (outbound). 

o PCC rehabilitation—7 p.m.–6 a.m. (inbound) and 7 p.m.–6 a.m. (outbound). 

Table 26 summarizes key aspects of each work zone and lists the values of time for the three 

vehicle types. 

Table 26. Work zone details—urban reconstruction.

Detail

HMA Pavement

Rehabilitations 1–5 

PCC Pavement

Rehabilitation 1 

Work zone operation (one direction) 3 of 4 lanes open 3 of 4 lanes open 

Approach speed (mph) 65 65 

Work zone speed (mph) 40 40 

Work zone hours of operation—Daytime 

Scenario

9 a.m.–5 p.m. (in)

6 a.m.–3 p.m. (out) 

9 a.m.–5 p.m. (in)

6 a.m.–3 p.m. (out) 

Work zone hours of operation—Nighttime 

Scenario

7 p.m.–6 a.m. (in)

7 p.m.–6 a.m. (out) 

7 p.m.–6 a.m. (in)

7 p.m.–6 a.m. (out) 

Construction Duration—Daytime Scenario 

(days) 8 12 

Construction Duration—Nighttime Scenario 

(days) 8 12 

Value of time of passenger vehicles

($/h/vehicle)

13.96 (most likely)

12.00 (minimum) 

16.00 (maximum) 

13.96 (most likely)

12.00 (minimum) 

16.00 (maximum) 

Value of time of single-unit trucks 

($/h/vehicle)

22.34 (most likely)

20.00 (minimum) 

24.00 (maximum) 

22.34 (most likely)

20.00 (minimum) 

24.00 (maximum) 

Value of time of combination trucks

($/h/vehicle)

26.89 (most likely)

25.00 (minimum) 

29.00 (maximum) 

26.89 (most likely)

25.00 (minimum) 

29.00 (maximum) 
75

Additional inputs established for the computation of work zone user costs are as follows:

• Free-flow capacity—2,158 vphpl (based on the 1994 Highway Capacity Manual

(TRB 1994)).

• Queue dissipation capacity—1,818 passenger cars per lane per hour (for all rehabilitation 

activities).

• Maximum AADT (two way)—140,000 vpd. 

• Maximum queue length—3.5 mi. 

• Work zone capacity—1,490 vphpl. 

• Transportation component CPI (base year 2009)—205. 

Lifecycle Cost Computation

Both deterministic- and probabilistic-based LCCAs were performed, the results of which are 

further described in the following sections. 

Deterministic Results

The results of the deterministic analysis are summarized in table 27 and table 28. One of the 

primary methods for reporting pavement LCCA results is NPV; the agency and user cost results 

are further illustrated in figure 48 and figure 49, respectively.
76

Table 27. Deterministic results—urban reconstruction (1/2). 

Total Cost 

Alternative 1: 

HMA 

Pavement

(Day Work) 

Agency Cost

($1,000)

Alternative 1: 

HMA 

Pavement

(Day Work) 

User Cost

($1,000)

Alternative 2:

HMA 

Pavement

(Night Work) 

Agency Cost

($1,000)

Alternative 2:

HMA 

Pavement

(Night Work) 

User Cost

($1,000)

Alternative 3:

PCC 

Pavement

(Day Work) 

Agency Cost

($1,000)

Alternative 3:

PCC 

Pavement

(Day Work) 

User Cost

($1,000)

Alternative 4:

PCC 

Pavement

(Night Work) 

Agency Cost

($1,000)

Alternative 4:

PCC 

Pavement

(Night Work) 

User Cost

($1,000)

NPV 7,293.91 523.12 7,400.93 183.94 6,561.85 192.24 6,725.90 68.67 

EUAC 202.31 14.51 205.28 5.10 182.00 5.33 186.55 1.90 

Table 28. Deterministic results—urban reconstruction (2/2). 

Description Alternatives

Lowest NPV agency cost Alternative 3: PCC pavement (day work) 

Lowest NPV user cost Alternative 4: PCC pavement (night work) 
77

Source: FHWA.

Figure 48. Graph. Present value agency costs—urban reconstruction.

Source: FHWA.

Figure 49. Graph. Present value of user costs—urban reconstruction.
78

Based on the deterministic analysis, the PCC (day work) alternative results in the lowest present 

value when only agency costs are considered. As further illustrated in figure 49, the alternatives 

that include nighttime construction have significantly lower present value user costs. These 

lower costs are expected due to the lower number of vehicles on the roadway during nighttime 

hours, resulting in fewer hours of user delay due to construction and lower user costs. When user 

costs are included in the analysis, the lowest resulting present value occurs with the PCC (night 

work) alternative.

Probabilistic Results

A probabilistic simulation was performed using 2,500 iterations. The simulation converges after 

950 iterations, with the final convergence error of 2.49 percent (simulation time is 796 s.2). The 

resulting agency and user costs are summarized in table 29. This table contains the mean, 

standard deviation, minimum and maximum agency, and user costs for each of the four 

alternatives. The agency cost means from the probabilistic analysis are very similar to the 

deterministic analysis’ present value. The probabilistic analysis value is the ability to compare 

the variability about the mean, shown as the standard deviation. For this example, the standard 

deviation for all alternatives’ agency costs is very similar. For comparison purposes, it does not 

provide any significant insight for selecting one alternative over another. However, in comparing 

user costs, the probabilistic analysis shows:

• Less certain (higher variability about the mean) for daytime work than nighttime work. 

• Greater potential for the highest NPV with HMA (daytime) alternative.

• Greater potential for the lowest NPV with the PCC (nighttime) alternative.

• Highest certainty for PCC (nighttime) of all the alternatives.

2

The computation time may vary, depending on users’ computer hardware and software.
79

Table 29. Probabilistic results—urban reconstruction.

Total Cost 

(Present 

Value)

Alternative 1: 

HMA 

Pavement

(Day Work) 

Agency Cost

($1,000)

Alternative 1: 

HMA 

Pavement

(Day Work) 

User Cost

($1,000)

Alternative 2:

HMA 

Pavement

(Night Work) 

Agency Cost

($1,000)

Alternative 2:

HMA 

Pavement

(Night Work) 

User Cost

($1,000)

Alternative 3:

PCC 

Pavement

(Day Work) 

Agency Cost

($1,000)

Alternative 3:

PCC 

Pavement

(Day Work) 

User Cost

($1,000)

Alternative 4:

PCC 

Pavement

(Night Work) 

Agency Cost

($1,000)

Alternative 4:

PCC 

Pavement

(Night Work) 

User Cost

($1,000)

Mean 7,278.44 528.40 7,417.65 184.04 6,508.02 183.35 6,708.84 65.78 

Standard 

deviation 599.21 69.39 574.24 22.82 585.38 30.56 592.40 7.42 

Minimum 5,031.65 366.75 5,592.40 124.30 4,597.69 113.84 4,843.63 47.10 

Maximum 9,111.22 761.58 9,126.74 275.16 8,334.89 279.27 8,536.56 91.82 
80

Frequency and cumulative probability distribution curves are shown in figure 50 through 

figure 53. Figure 50 shows that the mean present value of agency costs for the PCC (day work) 

alternative is slightly less than the next lowest alternative, the PCC (night work) alternative. It 

also shows that there is slightly lower variability in agency cost for this alternative. However, 

figure 51 shows the PCC (day work) alternative maintains the lowest agency lifecycle cost over 

most of the cumulative probability range (roughly 0 to 90 percent). Figure 52 and figure 53

clearly indicate that the PCC (night work) alternative has the lowest lifecycle user cost.

Source: FHWA.

Figure 50. Graph. Probability distribution of agency costs—urban reconstruction.

 

 
81

Source: FHWA.

Figure 51. Graph. Cumulative probability distribution of agency costs—urban 

reconstruction.

Source: FHWA.

Figure 52. Graph. Probability distribution of user costs—urban reconstruction.

 

 

 

 
82

Source: FHWA.

Figure 53. Graph. Cumulative probability distribution of user costs—urban 

reconstruction.

The results of tornado analyses are shown in figure 54. The tornado graph can be used to identify 

the effect of the input value’s uncertainty on the output distribution mean. The higher the 

correlation coefficient, the greater the effect the input variable has on the LCCA results. In this 

manner, the tornado chart can be used by an SHA to identify which inputs have the highest 

impact so that strategies for mitigating the associated risk and reducing input uncertainty can be 

addressed.

As shown in figure 54, the key driver in the agency lifecycle cost for this example is the first 

activity’s cost (i.e., the initial construction) for all but PCC (night work). For each alternative, a 

change of 1 standard deviation in the initial cost causes a change in the lifecycle cost of at least 

0.95 of a standard deviation in the same direction. Although not significant, the discount rate had 

the next most significant influence for all but the PCC (day work) alternative. The discount rate 

is a key driver for the two HMA alternatives and the PCC (night work) alternative for user 

lifecycle costs, while AADT is a key driver for the PCC (day work) alternative.

Extreme tail analysis can be used for analyzing the risks associated with extreme events (i.e., the 

tails of the distribution curve). Results of an extreme tail analysis for this example are shown in 

table 30, with the alpha values at probability levels of 5, 10, 90, and 95 percent listed for 

Alternative 1. On that basis, alpha values less than −0.5 (cells shaded in red) or greater than 0.5 

(cells shaded in blue) are considered significant. It can be seen that there is a strong relationship 

between total agency cost and activity 1 agency costs. Also, for user costs, there is a strong 

relationship with the discount rate. As with the tornado graph, knowing this information, an SHA 

can focus on these input values to determine if input variation can be reduced. 

 
83

Source: FHWA.

Figure 54. Screenshot. Tornado graphs—urban reconstruction.

 
84

Table 30. Example of the extreme tail analysis—urban reconstruction (Alternative 1). 

Input Variable Agency Cost 

5 percent 

Agency 

Cost 10 

percent 

Agency 

Cost 90 

percent 

Agency 

Cost 95 

percent 

User 

Cost 5 

percent 

User Cost 

10

percent 

User Cost 

90

percent 

User Cost 

95 

percent 

Discount Rate 1.03b 0.64b −0.72a −1.17a 1.49b 1.37b −1.57a −1.78a

AADT −0.13 −0.05 0.04 0.15 −0.57a −0.59a 0.55b 0.53b

Alternative 1: Activity 1: 

Agency Cost −1.80a −1.59a 1.47a 1.67a 0.23 0.09 0.08 0.09 

Alternative 2: Activity 1: 

Agency Cost −0.15 −0.09 −0.19 −0.07 0.03 −0.16 −0.13 −0.03 

Alternative 3: Activity 1: 

Agency Cost 0.22 0.32 0.09 0.18 −0.22 −0.11 0.04 0.12 

Alternative 1: Activity 1: 

Service Life 0.24 0.34 −0.23 −0.25 0.29 0.25 −0.33 −0.25 

Alternative 2: Activity 1: 

Service Life −0.12 0.04 −0.10 −0.26 −0.06 −0.07 0.03 0.09 

Alternative 3: Activity 1: 

Service Life −0.15 −0.12 0.04 0.38 0.32 0.10 0.16 0.37 

Alternative 1: Activity 2: 

Agency Cost −0.39 −0.28 0.30 0.42 −0.09 −0.09 0.15 0.17 

aHighlights the cells that are shaded in red, indicating the values that are less than −0.5. 

bHighlights the cells that are shaded in blue, indicating the values that are greater than −0.5. 
85

Preferred Alternative

The deterministic and probabilistic analyses indicate that the PCC (day work) alternative yields 

the lowest agency lifecycle cost. Even when the user lifecycle costs are added directly to the 

agency lifecycle costs, this alternative still has the lowest combined lifecycle cost, but only by 

about 1.23 percent at the 50 percent probability level, as compared to the PCC (night work) 

option. Given the closeness in costs, either alternative could be considered the preferred option, 

with the final selection based on various other factors. 

PAVEMENT LCCA EXAMPLE 3—RURAL RECONSTRUCTION AND WIDENING

The project featured in this example involves the 2020 reconstruction of an existing two-lane 

highway and two additional lanes to make a new four-lane undivided facility. The project is 

4.0 mi long and located in a rural setting. The new highway will consist of four 12-ft-wide lanes 

and 6-ft-wide shoulders. The AADT construction year (total for both directions) has been 

estimated to be 21,500 vpd. 

Two pavement designs were developed for the project, asphalt pavement and a PCC pavement. 

The asphalt pavement consists of 10.0 inches of HMA placed over 4.0 inches of CAB. The 

shoulders will be constructed with 4.0 inches of HMA over 10 inches of CAB. The PCC 

pavement consists of 10.0 inches of doweled, jointed concrete placed over 4.0 inches of CAB. 

Shoulders will be constructed with the 4.0-inch HMA over 10 inches of CAB.

The two designs are to be evaluated using both a deterministic and probabilistic lifecycle cost 

basis using a 40-yr analysis period. A triangular distribution is assumed for the discount rate, 

with the minimum, most likely, and maximum values being 0.4, 1.4, and 2.3 percent, 

respectively. Lifecycle cost computations for each alternative are based on a 1-mi long “typical” 

section of the roadway. 

LCCA Inputs

The following summarizes the RealCost inputs related to traffic, pavement performance, agency 

costs, and work zone user costs.

Traffic

The following list contains the traffic data inputs to be used in the simulation. The inputs include 

the base year AADT, the traffic growth rate estimate, and the percent of trucks and automobiles: 

• Initial AADT (both directions)—21,500 vpd. 

• Traffic Growth Rate—3.5 percent. 

• Percent Automobiles—93.5 percent. 

• Percent Trucks—6.5 percent (3.0 percent single units and 3.5 percent combinations). 

Pavement Performance and Activity Timing

The service life of each proposed initial structure was estimated using historical pavement 

performance data on similar highways in the vicinity of the proposed project and the life of each 
86

appropriate form of rehabilitation (i.e., HMA overlays, PCC diamond grinding). For the asphalt 

pavement design, an initial pavement life of 12 yr is forecasted, followed by a 10-yr 

rehabilitation cycle involving thin HMA overlay and thin mill-and-inlay. For the PCC design, an 

initial life of 22 yr is projected, followed by a CPR and then a thin HMA overlay. For 

probabilistic simulation, a triangular distribution will be applied to the timings of future 

rehabilitation treatments. A summary of the construction and expected rehabilitation treatments 

for each design is provided in table 31. 

Table 31. Summary of construction and future rehabilitation treatments—rural 

reconstruction/widening with HMA pavement. 

Activity Pavement Structure

Service Life, 

Yearsa

—Most 

Likely

Service Life, 

Yearsa

Minimum,

Maximum 

Reconstruction and 

new construction

(40-yr structural 

life)

10.0-inch HMA over 4.0-inch CAB

(mainline)

4.0-inch HMA over 10.0-inch CAB 

(shoulders) 

12.0 9.0, 15.0 

Rehabilitation 1 

(functional) 

1.75-inch HMA overlay (mainline 

and shoulders) 

10.0 7.0, 13.0 

Rehabilitation 2 

(functional) 

1.75-inch mill and HMA inlay

(mainline and shoulders) 

10.0 7.0, 13.0 

Rehabilitation 3 

(functional) 

1.75-inch mill and HMA inlay

(mainline and shoulders) 

10.0 7.0, 13.0 

a

Triangular probability distribution assumed.

Table 32. Summary of construction and future rehabilitation treatments—rural 

reconstruction/widening with PCC pavement. 

Activity Pavement Structure

Service Life, 

Yearsa

—Most 

Likely

Service Life, 

Yearsa

Minimum,

Maximum 

Reconstruction and 

new construction

(40-yr structural 

life)

10.0-inch PCC over 4.0-inch CAB 

(mainline) 

4.0-inch HMA over 10.0-inch CAB 

(shoulders) 

22.0 19.0, 25.0 

Rehabilitation 1 

(functional) 

CPR (patching, grinding, and joint 

resealing) (mainline)

1.75-inch mill and HMA inlay 

(shoulders) 

10.0 9.0, 11.0 

Rehabilitation 2 

(functional) 

1.75-inch HMA overlay (mainline

and shoulders) 

10.0 9.0, 11.0 

a

Triangular probability distribution assumed.
87

Agency Costs

Using estimated quantities and historical unit cost data for these actions and all associated traffic 

control costs, mobilization costs, and engineering costs, the 1-mi unit length costs for each action 

were computed for reconstruction and future rehabilitation. These costs, expressed in terms of 

means and standard deviations (normal probability distribution), are listed in table 33 and 

table 34. Because of the recent instability in asphalt prices, a higher standard deviation has been 

assigned to activities involving HMA compared to those involving PCC. 

Table 33. Agency cost input values—rural reconstruction/widening with HMA pavement. 

Activity Year

Cost ($a) 

for 1-mi length

(Mean) 

Cost ($a) 

for 1-mi length

(Standard

Deviation) 

Reconstruction/new construction 0 877,000 175,000 

Rehabilitation 1: HMA overlay 12 160,000 32,000 

Rehabilitation 2: mill and HMA 

inlay

22 253,000 50,600 

Rehabilitation 3: mill and HMA 

inlay

32 253,000 50,600 

a

Normal probability distribution assumed.

Table 34. Agency cost input values—rural reconstruction/widening with PCC pavement. 

Activity Year

Cost ($a) 

for 1-mi length

(Mean) 

Cost ($a) 

for 1-mi length 

(Standard

Deviation) 

Reconstruction/new construction 0 1,082,000 108,200 

Rehabilitation 1: CPR 22 267,000 26,700 

Rehabilitation 2: HMA overlay 32 160,000 32,000 a

Normal probability distribution assumed.
88

Work Zone User Costs

It is assumed that during reconstruction/new construction, the HMA and PCC pavement options 

will require the same construction duration. Therefore, no difference in user costs is associated 

with reconstruction between the two alternatives. Work zone user costs will be calculated for 

each future rehabilitation treatment. Each work zone setup will require closing one lane in each 

direction. The expected work zone hours of operation are 6 a.m.–6 p.m. (inbound and outbound). 

Table 35 summarizes each work zone’s key aspects and lists the values of time for the three 

vehicle types. 

Table 35. Work zone details—rural reconstruction/widening.

Detail

HMA Pavement

Rehabilitations 1–3, 

PCC Pavement 

Rehabilitation 2

PCC Pavement

Rehabilitation 1 

Work zone operation (one direction) 1 of 2 lanes open 1 of 2 lanes open 

Approach speed (mph) 45 45 

Work zone speed (mph) 30 30 

Work zone hours of operation 6 a.m.–6 p.m. 6 a.m.–6 p.m. 

Construction duration (days) 10 20 

Value of time of passenger vehicles

($/h/vehicle) 13.96 (deterministic) 13.96 (deterministic)

Value of time of single-unit trucks 

($/h/vehicle) 22.34 (deterministic) 22.34 (deterministic) 

Value of time of combination trucks

($/h/vehicle) 26.89 (deterministic) 26.89 (deterministic) 

Additional inputs established for the computation of work zone user costs are as follows:

• Free-flow capacity—1,700 vphpl (based on the 1994 Highway Capacity Manual

(TRB 1994)).

• Queue dissipation capacity—1,500 passenger cars per lane per hour (for all rehabilitation 

activities).

• Maximum AADT (two-way)—45,000 vpd. 

• Maximum queue length—1.5 mi. 

• Work zone capacity—1,340 vphpl. 

• Transportation component CPI (base year 2009)—205. 
89

Lifecycle Cost Computation

Both a deterministic- and probabilistic-based LCCA were performed, the results of which are 

further described in the following sections. 

Deterministic Results

The results of the deterministic analysis are summarized in table 36, table 37, figure 55, and 

figure 56. The HMA alternative gives the lowest total lifecycle cost for both agency and user 

costs based on the deterministic analysis.

Table 36. Deterministic results—rural reconstruction/widening (1/2). 

Total Cost 

Alternative 1: 

HMA Agency

Cost

($1,000) 

Alternative 

1: HMA User 

Cost

($1,000) 

Alternative 2: 

PCC Agency

Cost

($1,000) 

Alternative 1: 

HMA User 

Cost

($1,000) 

NPV 1,335.09 637.23 1,365.10 849.38 

EUAC 43.55 20.79 44.53 27.71 

Table 37. Deterministic results—rural reconstruction/widening (2/2). 

Description Alternatives

Lowest NPV agency cost Alternative 1: HMA

Lowest NPV user cost Alternative 1: HMA

Source: FHWA.

Figure 55. Graph. Present value agency costs—rural reconstruction/widening.
90

Source: FHWA.

Figure 56. Graph. Present value of user costs—rural reconstruction/widening.

Probabilistic Results

Analysis 3A 

A probabilistic simulation was performed using 2,500 iterations. The simulation converged after 

650 iterations with a final convergence error of 2.28 percent (computational time is 367 s3

). The 

resulting agency and user costs are summarized in table 38. This table contains the mean, 

standard deviation, minimum, and maximum agency and user costs for both alternatives. The 

agency cost means from the probabilistic analysis are very similar to the deterministic analysis’

present value.

Table 38. Probabilistic results—rural reconstruction/widening.

Total Cost 

(Present 

Value)

Alternative 

1: HMA 

Pavement 

Cost

($1,000) 

Alternative 

1: HMA 

Pavement

User Cost

($1,000) 

Alternative 

2: PCC

Pavement

Agency Cost

($1,000) 

Alternative 

2: PCC

Pavement

User Cost

($1,000) 

Mean 1,328.74 616.63 1,363.57 841.13 

Standard 

deviation 190.86 70.68 114.42 79.85 

Minimum 484.00 436.38 1,029.30 665.60 

Maximum 1,825.83 847.57 1,700.83 1,061.68 

Frequency and cumulative probability distribution curves are shown in figure 57 through 

figure 60. In these figures, the mean present value of both the agency cost and the user cost is 

lower for the HMA alternative than the PCC alternative. However, because of the higher 

3

The computation time may vary, depending on users’ computer hardware and software.
91

variability of the agency cost of the HMA alternative, the PCC alternative has a lower agency 

cost than the HMA alternative at the 90 to 100 percent probability level (figure 58). Concerning 

lifecycle user costs, those of the HMA alternative are considerably lower than the PCC 

alternative at all probability levels.

Source: FHWA.

Figure 57. Graph. Probability distribution of agency costs—rural reconstruction/widening.

 
92

Source: FHWA.

Figure 58. Graph. Cumulative probability distribution of agency costs—rural 

reconstruction/widening.

Source: FHWA.

Figure 59. Graph. Probability distribution of user costs—rural reconstruction/widening.

 
93

Source: FHWA.

Figure 60. Graph. Cumulative probability distribution of user costs—rural 

reconstruction/widening.

The results of the tornado analyses are summarized in figure 61. As seen in this figure, the most 

dominant input for the present value of agency costs is the initial construction cost, which has a 

correlation of 0.91 and 0.94 for alternatives 1 and 2. Concerning user costs, the main driver is the 

discount rate, which has a correlation of -0.76 and −0.94 for alternatives 1 and 2.

 
94

Source: FHWA.

Figure 61. Screenshot. Tornado graphs—rural reconstruction/widening. 

Analysis 3B 

A new worksheet was inserted into the workbook to demonstrate the user-defined outputs, and 

three outputs were defined for the differences in the total cost, agency cost, and user cost. The 

simulation was formed using 2,500 iterations. The simulation converged after 1,400 iterations 

with the final error of 2.20 percent (computation time is 795 s

4

). Figure 62 through figure 64

show the cumulative probabilistic difference distribution for the total, agency, and user costs, 

respectively. As shown in figure 62, 85 percent of the simulation outcomes for alternative 1 are 

less than Alternative 2. Similarly, comparing agency and user costs, the simulation outcomes for 

4The computation time may vary, depending on users’ computer hardware and software. 
95

Alternative 1 are less than Alternative 2, 55 percent for agency costs and 100 percent for user 

costs.

Source: FHWA.

Figure 62. Graph. Cumulative probability distribution difference—total costs. 

Source: FHWA.

Figure 63. Graph. Cumulative probability distribution difference—agency costs.
96

Source: FHWA.

Figure 64. Graph. Cumulative probability distribution difference—user costs.

Preferred Alternative

Deterministic LCCA results clearly indicate that the HMA alternative is preferred concerning 

agency and user costs. Probabilistic LCCA results also favor the HMA alternative, even though 

for high probability levels for agency costs, the PCC alternative has the edge over the HMA 

alternative. The substantially higher user costs for the PCC alternative over the entire probability 

range greatly diminish this edge. 

For the preceding examples, the total agency cost was inserted into RealCost as a single value 

(mean and standard deviation) for each new construction and future rehabilitation treatment. 

However, RealCost has the flexibility to incorporate bid item tabulations that can be used for a 

more detailed analysis. For example, a relational database or worksheet that includes unit bid 

item costs can be developed and used within RealCost. In this manner, the impact (mean and 

standard deviation) of single-bid items can be analyzed. For example, figure 65 shows an 

example of a bid-item tabulation worksheet that can be used in the calculation of agency costs 

for construction or rehabilitation activities. In this figure, the SHA determines the mean and 

standard deviation of each bid item (which can be based on the bid tabulations from statewide, 

regional, or local projects) and includes the applicable probabilistic equation in the unit price 

column. Each cell shown in the unit price column will need to be established as a RealCost

Output. 
97

Source: FHWA.

CL = class; CY = cubic yard; Est = estimate; FA = force account; LF = linear feet; PG = performance grade; 

SY = square yard. 

Figure 65. Screenshot. Example worksheet containing bid item cost data. 

Figure 66 shows an inserted worksheet for calculating agency construction costs using the bid 

item cost data. Since RealCost is an Excel-based tool, an SHA can customize it to include a wide 

array of analyses.

With the added flexibility of including bid items, an SHA can conduct a more critical review of 

the associated material costs. For example, figure 67 illustrates a tornado graph for a PCC initial 

construction alternative, which shows that the PCC pavement and HMA costs have the highest 

effect on the probabilistic output. With this knowledge, an SHA would ensure that the costs for 

these two bid items are as accurate as possible (e.g., using local rather than statewide bid items). 
98

Source: FHWA.

-No data.

PCCP = portland cement concrete pavement. 

Figure 66. Screenshot. Example worksheet for calculating activity cost from bid item costs.
99

Source: FHWA.

Figure 67. Chart. Example tornado chart including bid items.

EXAMPLE 4: BRIDGE LCCA EXAMPLE—REPLACEMENT OF RURAL BRIDGES

This bridge LCCA example demonstrates a case where there is a need to replace two 65-yr-old 

conventional concrete bridges over a stream on a four-lane divided highway in a mostly rural 

location. The existing bridges are 320 ft long (made up of four 80-ft spans) with decks that are 

44 ft wide (two 12-ft-wide lanes with 10-ft-wide inside and outside shoulders). 

For this project, engineers have developed two different 80-yr life bridge designs for the 

replacement bridges. Design Alternative 1 uses a conventional steel bridge superstructure with a 

composite pavement deck of an 8-inch reinforced PCC layer, a waterproof membrane, and a 

2.5-inch dense-graded asphalt wearing surface. Design Alternative 2 consists of a prestressed 

concrete superstructure with a similar 8-inch reinforced PCC layer for the deck without the 

waterproof membrane and asphalt wearing surface. While the engineers have determined that the 

footings for the existing piers and end abutments are adequate to carry the loads associated with 

either of the new bridge designs, deterioration of the concrete in the existing piers and abutments 

requires those substructure components to be reconstructed. However, the replacement piers and 

abutments will be designed and reconstructed to be adequate to carry loads of either chosen 

superstructure design.

The two bridge designs will be evaluated on a probabilistic lifecycle cost basis using an 80-yr 

analysis period (a deterministic analysis will also be performed). Each alternative’s lifecycle cost 
100

computations are based on the estimated agency costs for initial construction, rehabilitation, 

maintenance costs, and user costs computed using actual traffic conditions and an assumed 

1-mi-long work zone during initial construction and rehabilitation activities. A triangular 

distribution is assumed for the discount rate, with the minimum, most likely, and maximum 

values being 0.4, 1.4, and 2.3 percent, respectively. 

LCCA Inputs

The following summarizes the RealCost inputs related to traffic, bridge deck performance, 

agency costs, and work zone user costs.

Traffic

The following list contains the traffic data inputs to be used in the simulation. The inputs include 

the base year AADT, the traffic growth rate estimate, and the percent of automobiles and trucks: 

• Initial AADT (both directions)—20,010 vpd. 

• Traffic growth rate—1.15 percent. 

• Percent automobiles—87 percent.

• Percent trucks—13 percent (9 percent single units and 4 percent combination units). 

Bridge Structure Performance and Activity Timing

The service life of each proposed initial structure and projected rehabilitation was estimated

using historical pavement performance data on similar bridge designs in the vicinity of the 

project. Historical data indicates that the HMA wearing surface on the conventional steel bridge 

will need to be replaced approximately every 13 yr to protect the steel superstructure adequately. 

The historical data indicates that the PCC surface layer on the prestressed concrete option will 

most likely require CPR of about 10 percent of the bridge deck area every 20 yr during its 

lifecycle. For probabilistic simulation, a normal distribution will be applied to the timings of 

these future rehabilitation treatments. A summary of the initial construction details, future 

rehabilitation, and future maintenance activities (and their expected service lives) associated with 

conventional steel structure bridge design and prestressed concrete structure bridge design 

alternatives are provided in table 39 and table 40, respectively. 
101

Table 39. Summary of activities and service life—rural bridge replacement—Alternative 1: 

Conventional Steel Structure Bridge Design. 

Activity Pavement Structure

Service Life 

Yearsa

(Mean) 

Service Life 

Yearsa 

(Standard 

Deviation) 

New

construction 

Superstructure: five conventional 

steel I-beam girders spaced at 9.75 ft 

on center. 

Composite bridge deck: 8.0 in PCC 

deck with a 2.5 dense-graded HMA 

wearing surface and waterproof 

membrane. 

Substructure and foundation: 

Replacement of existing piers and 

abutments.

13.0b 1.2 

Rehabilitations 

1 through 6 

Mill and replace 2.5-inch HMA 

deck-wearing surface. (It is assumed 

that the HMA deck-wearing surface 

will be replaced up to six times 

during the 80-yr design life of the 

bridge.) 

13.0 1.2 

Maintenance 1 Biannual inspection of bridge 

components. 

2.0 n/a 

Maintenance 2 Painting of steel bridge 

superstructure every 15 yr. 

15.0 n/a 

a

Normal probability distribution assumed.

b

The initial construction service life for Alternative 1 is set to 13 yr, the most likely age at which the composite deck 

surface will first need to be removed and replaced.
102

Table 40. Summary of activities and service life—rural bridge replacement—Alternative 2: 

Prestressed Concrete Structure Bridge Design. 

Activity Pavement Structure

Service Life 

Yearsa

(Mean)

Service Life 

Yearsa 

(Standard 

Deviation)

New

construction 

Superstructure: five prestressed 

concrete beam girders spaced at 

9.67 ft on center.

Composite bridge deck: 8.0 in PCC 

deck. 

Substructure and foundation: 

Replacement of existing piers and 

abutments.

20.0b 3.1

Rehabilitations 

1 and 2 

CPR—Patching of 10 percent of the 

PCC deck surface. (It is assumed that 

this PCC CPR will need to be 

completed approximately every 20 yr 

during the first half of the 80-yr 

bridge design life.)

20.0 3.1

Rehabilitations 

3 and 4 

CPR and HMA overlay—Patching of 

10 percent of the PCC deck surface, 

followed by a 2.5-inch thick HMA 

overlay. (It is assumed that this 

CPR/overlay combination will need 

to be completed approximately every 

20 yr during the second half of the 

80-yr bridge design life.)

20.0 3.1

Maintenance 1 Biannual inspection of bridge 

components.

2.0 N/A

a

Normal probability distribution assumed.

b

The initial construction service life for Alternative 2 is set to 20 yr, the most likely age at which the PCC deck 

surface will require CPR.

Agency Costs

The agency costs required for the LCCA of these two different bridge design alternatives include 

the initial construction costs, future rehabilitation needs, and routine scheduled maintenance 

(inspection and painting). Using estimated quantities and historical unit cost data for these 

actions and all associated traffic control costs, mobilization costs, and engineering costs, the 

estimated costs for each action were computed and expressed in terms of means and standard 

deviations (normal probability distribution). 

The time-series maintenance cost stream for both bridge designs include the cost of an inspection 

every 2 yr starting at year 2 (i.e., at years 2, 4, 6, and so on). The estimated cost of this biannual 

inspection of both bridges is $2,000 per inspection. For the conventional steel design, there is an 
103

additional maintenance cost associated with repainting the superstructure every 15 yr starting at 

year 15 (i.e., at years 15, 30, 45, and so on). Each repainting event’s cost is estimated to be 

$134,000 (the cost of repainting both bridges). The details of the maintenance cost computations 

for both design alternatives are summarized in table 41 and table 42. A complete summary of the 

agency costs used for this bridge LCCA example is presented in table 43 and table 44. 

Table 41. Summary of maintenance costs—rural bridge replacement—Alternative 1: 

Conventional Steel Structure Bridge Design. 

Maintenance Activity Cost Description Costs ($a) 

Biannual inspections of bridge components (starting at 

year 2) and superstructure painting every 15 yr 

(starting at year 15). 

40 inspections x $2,000 per inspection = $80,000 

Painting at Year 15 = $134,000 

Painting at Year 30 = $134,000 

Painting at Year 45 = $134,000 

Painting at Year 60 = $134,000 

Painting at Year 75 = $134,000 

Total of estimated timeseries maintenance costs 750,000 

Biannual inspections of bridge components (starting at 

year 2) and superstructure painting every 15 yr 

(starting at year 15). 

40 inspections x $2,000 per inspection = $80,000 

Painting at Year 15 = $134,000 

Painting at Year 30 = $134,000 

Painting at Year 45 = $134,000 

Painting at Year 60 = $134,000 

Painting at Year 75 = $134,000 

Present worth of 

estimated time-series 

maintenance costs

181,918 

a

The present worth costs are computed using a 4 percent interest rate and an 80-yr analysis period.

Table 42. Summary of maintenance costs—rural bridge replacement—Alternative 2: 

Prestressed Concrete Structure Bridge Design. 

Maintenance Activity Cost Description Costs ($a

) 

Biannual inspections of bridge components (starting at 

year 2). 

40 inspections x $2,000 per inspection = $80,000 

Total of estimated timeseries maintenance costs 40,000 

Biannual inspections of bridge components (starting at 

year 2). 

40 inspections x $2,000 per inspection = $80,000 

Present worth of 

estimated time-series 

maintenance costs

23,446 

a

The present worth costs are computed using a 4 percent interest rate and an 80-yr analysis period.
104

Table 43. Agency unit cost input values—bridge LCCA example—Alternative 1: 

Conventional Steel Structure Bridge Design. 

Bridge Structure/Treatment/Maintenance Activity

Activity Unit 

Cost

Distributions 

($a) (Mean)

Activity Unit 

Cost

Distributions

($a

) (Standard

Deviation)

Initial Construction:

Superstructure: five conventional steel I-beam girders 

spaced at 9.75 ft on center. 

Composite bridge deck: 8.0-inch PCC deck with a 2.5 

dense-graded HMA wearing surface. 

Substructure and foundation: Replacement of existing 

piers and abutments.

2,749,000 274,900

Rehabilitations 1–6: mill and replace 2.5-inch HMA 

deck-wearing surface. (It is assumed that the 

deck-wearing surface will be replaced up to six times 

during the 80-yr design life of the bridge.)

29,990 2,999

Biannual inspections of bridge components starting at 

year 2.

2,000 200

Superstructure painting every 15 yr (starting at year 15). 134,000 13,400 a

Note: The cost distributions presented in this table are unit costs of the different activities expressed in today’s 

dollars (2020). Also, note that a normal probability distribution is assumed for each of these cost distributions. 

Table 44. Agency unit cost input values—bridge LCCA example—Alternative 2: 

Prestressed Concrete Structure Bridge Design. 

Bridge Structure/Treatment/Maintenance Activity

Activity Unit 

Cost

Distributions

($a) (Mean)

Activity Unit 

Cost

Distributions

($a) (Standard

Deviation)

Initial Construction:

Superstructure: five prestressed concrete beam girders 

spaced at 9.67 ft on center. 

Composite bridge deck: 8.0-inch PCC deck.

Substructure and foundation: Replacement of existing 

piers, abutments.

3,044,600 304,460

Rehabilitations 1–4: CPR—patching of the PCC deck 

surface.

39,400 3,940

Biannual inspections of bridge components (starting at 

year 2).

2,000 200

a

Note: The cost distributions presented in this table are unit costs of the different activities expressed in today’s 

dollars (2020). Also, note that a normal probability distribution is assumed for each of these cost distributions. 
105

Work Zone User Costs

During the initial construction of a single replacement bridge, traffic is assumed to be 

temporarily rerouted to the adjacent bridge via temporary pavements crossing over the median. 

During this temporary arrangement, traffic will be reduced to one lane in both directions. Work 

zone user costs will also be calculated for each future rehabilitation treatment applied. During 

future rehabilitation activities, each bridge’s traffic will be reduced to one lane while the 

rehabilitation work is performed. Because the painting activities will be completed underneath 

the bridge, these activities will not require a work zone and will not impact traffic.

The total length of the work zone for both the initial construction project and future rehabilitation 

is expected to be 1 mi in length. The estimated work zone duration for both bridges’ initial 

construction is estimated to be 360 d for the conventional steel bridge and 340 d for the 

prestressed concrete bridge. Both initial construction durations are assumed to have a standard 

deviation of 15 d. For the rehabilitation activities, the estimated work zone durations are 

represented by triangular distributions. For the HMA resurfacing, the distribution is defined as 

having a minimum of 4 d, a most-likely duration of 5 d, and a maximum of 6 d. For the CPR 

activities, the distribution is defined as having a minimum of 3 d, a most-likely duration of 4 d, 

and a maximum of 5 d. During these rehabilitation activities, the work zone is expected to be 

active 24 h a day (i.e., one lane of traffic in each direction will be closed during the work activity 

duration). Table 45 summarizes each work zone’s key aspects and lists the values of time for the 

three-vehicle types.
106

Table 45. Work zone details—rural bridge replacement.

Detail

Alternative 1: 

Conventional 

Steel Bridge

Design—Initial 

Construction

Alternative 1: 

Conventional 

Steel Bridge

Design—

Rehab–HMA 

Resurfacing

Alternative 2: 

Prestressed 

Concrete 

Bridge

Design—Initial 

Construction

Alternative 2: 

Prestressed 

Concrete 

Bridge

Design—

Rehab–CPR

Work zone operation

(one direction) 

1 of 2 lanes 

open in both 

directions

1 of 2 lanes open 

in both 

directions

1 of 2 lanes 

open in both 

directions

1 of 2 lanes open 

in both 

directions

Approach speed 

(mph) 

60 60 60 60 

Work zone speed 

(mph) 

40 40 40 40 

Work zone hours

of operation 

24 h per day 24 h per day 24 h per day 24 h per day 

Construction 

duration (d) 

360 5 340 4 

Value of time of 

passenger vehicles 

($/h/vehicle) 

13.96 (most 

likely)

12.00 

(minimum)

16.00 

(maximum)

13.96 (most 

likely)

12.00 

(minimum)

16.00 

(maximum)

13.96 (most 

likely)

12.00 

(minimum)

16.00 

(maximum)

13.96 (most 

likely)

12.00 

(minimum)

16.00 

(maximum)

Value of time of 

single-unit trucks 

($/h/vehicle) 

22.34 (most 

likely)

20.00 

(minimum)

24.00 

(maximum)

22.34 (most 

likely)

20.00 

(minimum)

24.00 

(maximum)

22.34 (most 

likely)

20.00 

(minimum)

24.00 

(maximum)

22.34 (most 

likely)

20.00 

(minimum)

24.00 

(maximum)

Value of time of 

combination trucks 

($/h/vehicle) 

26.89 (most 

likely)

25.00 

(minimum)

29.00 

(maximum)

26.89 (most 

likely)

25.00 

(minimum)

29.00 

(maximum)

26.89 (most 

likely)

25.00 

(minimum)

29.00 

(maximum)

26.89 (most 

likely)

25.00 

(minimum)

29.00 

(maximum)
107

Additional inputs established for the computation of work zone user costs are as follows:

• Free-flow capacity—2,066 vphpl (based on the 1994 Highway Capacity Manual

(TRB 1994)).

• Queue dissipation capacity—1,818 passenger cars per lane per h (for all rehabilitation 

activities).

• Maximum AADT (two-way)—140,000 vpd. 

• Maximum queue length—2.0 mi. 

• Work zone capacity—1,340 vphpl. 

Lifecycle Cost Computation

Both deterministic- and probabilistic-based LCCAs were performed, the results of which are 

described in the following sections.

Deterministic Results

Table 46 presents the results of the deterministic analysis. Both the agency costs and user costs 

for each of the two alternatives are listed in NPV and EUAC. Figure 68 and figure 69 provide 

graphical displays of the NPV results. Based on the input values described previously, the 

prestressed concrete bridge design alternative resulted in the lowest agency lifecycle cost 

(approximately $18,000 (0.6 percent) less than the agency costs for the conventional steel bridge 

design alternative). Although the conventional steel design had lower initial construction costs, it 

had higher maintenance costs and more scheduled rehabilitation events than the prestressed 

concrete design alternative, resulting in a higher agency lifecycle cost. Table 47 provides a 

description for the alternatives considered within the deterministic analysis.

Table 46. Deterministic LCCA results—rural bridge replacement (1/2). 

Total Cost 

Alternative 1: 

Conventional Steel

Bridge Design

Agency Cost

($1,000) 

Alternative 1: 

Conventional Steel

Bridge Design

User Cost

($1,000) 

Alternative 2:

Prestressed 

Concrete

Agency Cost

($1,000) 

Alternative 2:

Prestressed 

Concrete User 

Cost

($1,000) 

NPV 3,182.32 2,229.72 3,164.49 1,884.47 

EUAC 65.66 46.00 65.29 38.88 

Table 47. Deterministic LCCA results—rural bridge replacement (2/2). 

Description Alternatives

Lowest NPV agency cost Alternative 2: prestressed concrete bridge design

Lowest NPV user cost Alternative 2: prestressed concrete bridge design
108

Source: FHWA.

Figure 68. Graph. Present value agency costs—rural bridge replacement.

Source: FHWA.

Figure 69. Graph. Present value user costs—rural bridge replacement.

Concerning user costs, the prestressed concrete design alternative resulted in the lowest total user 

lifecycle cost (approximately $345,000 (15 percent) less than the cost of the conventional steel 

design alternative). This result was not unexpected, as the conventional steel design had a longer 

initial construction duration and more scheduled rehabilitation over the 80-yr design life.

Probabilistic Results

A probabilistic simulation was performed using 2,500 iterations. The simulation converges after 

950 iterations with the final convergence error of 2.42 percent (computation time is 816 s5

). The 

resulting agency- and user-cost NPV statistics (mean, standard deviation, minimum, maximum) 

5

The computation time may vary, depending on users’ computer hardware and software.
109

are summarized in table 48. The frequency and cumulative distribution curves are illustrated in 

figure 70 through figure 73. The mean agency costs from the probabilistic analysis are very 

similar to the deterministic analysis values (table 48). The prestressed concrete design total 

agency cost mean is lower than the respective conventional steel design agency cost values. 

Also, the prestressed concrete design alternative has a similar lifecycle agency cost over the 

entire probability range. 

Table 48. Probabilistic LCCA results—rural bridge replacement.

Total Cost 

(Present 

Value)

Alternative 1

Conventional Steel 

Bridge Design 

Agency Cost

($1,000) 

Alternative 1

Conventional 

Steel Bridge 

Design User Cost

($1,000) 

Alternative 2

Prestressed 

Concrete Bridge 

Design Agency

Cost

($1,000) 

Alternative 2

Prestressed 

Concrete 

Bridge Design

User Cost

($1,000) 

Mean 3,196.38 2,238.63 3,156.19 1,906.77 

Standard 

deviation 281.96 141.21 297.07 103.16 

Minimum 2,159.45 1,887.63 2,156.61 1,649.63 

Maximum 4,013.09 2,668.50 4,121.26 2,301.00 

Source: FHWA.

Figure 70. Graph. Probability distribution of agency costs—rural bridge replacement.
110

Source: FHWA.

Figure 71. Graph. Cumulative probability distribution of agency costs—rural bridge 

replacement.

Source: FHWA.

Figure 72. Graph. Probability distribution of user costs—rural bridge replacement. 

 
111

Source: FHWA.

Figure 73. Graph. Cumulative probability distribution of user costs—rural bridge 

replacement.

Similar to the agency cost results, a review of the user cost data shows that the prestressed 

concrete alternative has a lower user cost mean, while the standard deviation is also lower than 

the conventional steel alternative. The prestressed concrete design alternative has a lower 

lifecycle user cost over the entire probability range.

The results of tornado analyses are summarized in figure 74. As seen in this table, the key driver 

in the agency lifecycle costs is the initial construction activity cost, which has a correlation 

coefficient of 0.82 and 1.00 for Alternative 1 and Alternative 2. For user lifecycle costs, the 

discount rate, the duration of the initial construction activity, and the value of time for passenger 

cars are the key drivers for alternatives 1 and 2. 

 
112

Source: FHWA.

Figure 74. Screenshot. Tornado graphs—rural bridge replacement.

Preferred Alternative

Although the results of both the deterministic and probabilistic analyses show that the lifecycle 

costs associated with the two alternatives are very close, both analyses indicate that the 

prestressed concrete design alternative yields the lowest total lifecycle cost. Thus, it would be 

considered the preferred option for the subject project on the sole basis of lifecycle costs. A final 

selection of an alternative would need to consider a variety of other monetary and nonmonetary 

factors.
113

APPENDIX B. CUSTOMIZATION OF REALCOST

RealCost was developed in Excel to enable the customization of the tool and meet the end users’ 

specific requirements. The following sections showcase several relevant examples of such 

customization.

LINKING A COST ESTIMATION TEMPLATE 

The following is an example of linking RealCost with an Excel-based cost estimation template. 

This example is an extension of the pavement LCCA Example 3—Rural Reconstruction and 

Widening in Appendix A. 

The RealCost program from the FHWA’s LCCA website requires the agency cost as a 

deterministic or probabilistic input parameter (FHWA 2020). The procedure in the following 

paragraphs explains the customization procedure that will enable the user to include the bid price 

variability in the Agency Cost computation within the Probabilistic Analysis of the RealCost 

Program. This procedure uses a separate Excel workbook, Agency Cost.xlsx, consisting of three 

worksheets with the agency costs calculation to illustrate the steps. Users should walk through 

this process to learn the steps before using the cost estimation worksheet.

Except for the agency construction cost in each activity/alternative, all other RealCost software 

inputs can be entered following the earlier guidelines. The following steps will aid in 

incorporating the agency cost with the RealCost tool:

1. Open the RealCost workbook. Close the RealCost Switchboard and keep the workbook 

open. 

2. Open the Agency Cost.xlsx workbook. Group all three agency cost computation 

worksheets by holding the control key and selecting all three worksheets (or rightclicking on the worksheet name tab and Select All Sheets). 

3. Right-click on the worksheet group and select the Move or Copy... option. Move the 

sheets before the Deterministic Results worksheet in the RealCost.xlsm workbook 

(figure 75).
114

Source: FHWA.

Figure 75. Screenshot. Move the Agency Cost Computation Worksheet to the RealCost 

Program. 

The contents of the new worksheets are explained in the following sections. 

Unit Bid Prices 

The Unit Bid Prices screen contains a list of bid items (figure 76) used in the computation of the 

Agency Cost for each activity/alternative. Each bid item is represented by its unit of 

measurement and mean and standard deviation observed in the past. The last column contains a 

formula to simulate the bid item based on the probabilistic distribution considered.
115

Source: FHWA.

Figure 76. Screenshot. Unit Bid Price Worksheet. 

As in other input parameters in the RealCost program, a different probability distribution can be 

used to simulate the bid item. Select the Unit Price Cell of the Bid Item to be considered 

probabilistic. Execute the Probabilistic Input menu item from the Add-ins Excel menu. A 

window, as shown in figure 77, will pop up, and the required probabilistic characteristics can be 

entered. Instead of a probabilistic function, correlation with other bid items can be assigned in 

the Unit Price column. For example, 100 percent of the correlation is considered between bid 

item HMA Class (CL) 1/2” Performance Grade (PG) 64-22 and HMA CL 3/4” PG 64-22 in the 

given worksheet. 
116

Source: FHWA.

Figure 77. Screenshot. Definition of the probabilistic distribution for the Bid Item “Asphalt 

for Fog Seal.” 

HMA (Alternative 1)

This worksheet contains the agency cost computation details for each activity of Alternative 1 (in 

this example, considered as HMA pavement). Each bid item (figure 78) in the activity is referred 

back to the corresponding unit price cell in the Unit Bid Prices worksheet. 
117

Source: FHWA.

Figure 78. Screenshot. Agency Cost Computation with Simulated Variable. 

The table at the end of the worksheet (figure 79) summarizes the Agency Cost for each activity. 

At each simulation, the unit price will be simulated based on the given probabilistic 

characteristics, and the table (figure 79) automatically recalculates the corresponding agency cost 

for the given activity.

Source: FHWA.

Figure 79. Screenshot. Summary of the Agency Cost for different activities of Alternative 1. 

PCC Pavement (Alternative 2)

This worksheet contains the agency cost computation details for each activity of Alternative 2 (in 

this example, considered as PCC pavement). Each bid item’s unit price in the activity is referred 

back to the corresponding unit price cell in the Unit Bid Prices worksheet. The table at the end of 

the worksheet summarizes the Agency Cost for each activity.
118

Changes in the Inputs worksheet of RealCost.xlsm. 

The input cell corresponding to Agency Construction Cost in each activity (figure 80) should be 

referred to as the corresponding cost cell in the summary table at the end of the worksheet (HMA 

or PCCP) for Alternative 1 or 2. An illustration is presented in Figure 80. Note that the Agency 

Construction Cost in the Inputs worksheet requires the cost in thousands of dollars. 

Source: FHWA.

Figure 80. Screenshot. Input Worksheet. 
119

An item of interest in LCCA might be to analyze the probabilistic results of the difference in 

agency cost between the two alternatives. By default, the RealCost program generates statistical 

results for agency and user cost values of each alternative. However, the user can customize the 

RealCost program to generate the required statistical results for other user-defined output 

variables. This process is explained in the following steps: 

• Create a new worksheet titled “My Output” in the RealCost program.

• Include the list of user-defined output variables for which the RealCost program 

computes the statistical results. For example, to create a RealCost Output for the Agency 

LCC (NPV) difference, one would use the following formula to reference the respective 

cells in the Deterministic Results sheet: = 'Deterministic Results'!B6-'Deterministic 

Results'!D6. 

• Execute the RealCost Output macro to assign each variable’s value as an LCCA Output 

tag to enable the program to compute the required results. Select each of the user-defined 

output variable values and execute the RealCost Output macro present in the program’s 

Add-ins. The macro requests a name for the user-defined variable. After executing the 

RealCost Output macro, a comment appears in the cell identifying the cell as the LCCA 

Output variable, as shown in figure 81. 

• Implement the Simulation macro in the RealCost program. At each simulation, the LCCA 

Output variable’s value is calculated with a set of simulated inputs, and the results are 

stored for statistical analysis. The RealCost worksheets Output Distributions, Tornado 

Graphs, and Extreme Tail Analysis will contain the simulation results and statistical 

analysis of the new user-defined RealCost Output variables in addition to the default 

agency and user cost values of each alternative.

Source: FHWA.

Figure 81. Screenshot. Designation of a User-Defined RealCost Output Variable. 

Users can customize the report as required by their agency. Create a new worksheet titled “My 

Report.” In the format required, add the details of the project to the RealCost worksheet. The 

user can move any plots from other RealCost worksheets to the new worksheet. Figure 82, 

figure 83, and figure 84 show a sample report regarding the cells in default RealCost worksheets. 
120

In this example, the Project Details, Deterministic Comparison, and Probabilistic Comparison 

sections should use formulas to refer to the respective cells in the Inputs, Deterministic Results, 

and Probabilistic Comparison sheets, respectively. The Probabilistic Charts should refer to the 

statistics in the Output Distributions sheet, and the Tornado Charts should refer to the statistic in 

the Tornado Graphs sheet so that when a new probabilistic analysis is run, the information in the 

My Report sheet is automatically updated.

Source: FHWA.

Figure 82. Screenshot. Sample customized report (1). 
121

Source: FHWA.

Alt = alternative.

Figure 83. Screenshot. Sample customized report (2). 

Source: FHWA.

Figure 84. Screenshot. Sample customized report (3). 
122

CUSTOMIZED INPUT AND OUTPUT

User spreadsheets can be added to the RealCost workbook for input and postprocessing of 

RealCost Output to generate required statistical results for other user-defined output variables. 

Further comparison of alternatives can be accomplished via the difference distribution curve. 

This type of analysis can be used to determine the accurate assessment of the probabilities 

associated with the lowest cost alternative. The difference distribution analysis can be conducted 

by creating a new worksheet within RealCost that includes equations for determining the cost 

difference between competing alternatives. For example, users can insert a new spreadsheet and 

name it “Custom,” adding a formula to cells to calculate user-desired outputs. Figure 85

illustrates an inserted worksheet for calculating the total, agency, and user cost differences 

between alternatives 1 and 2. The equations used in column B are shown adjacent to the 

corresponding cell. 

Source: FHWA.

Figure 85. Screenshot. Worksheet for calculating difference distribution.

Users can define their desired outputs for further RealCost simulation and statistical analysis. 

Each cell of the user-defined output must also be characterized as a RealCost output to be 

included in the probabilistic analysis process. The user selects RealCost Output for each cell 

from the RealCost menu command and clicks OK to confirm adding the specific user-defined 

output, as shown in figure 86 and figure 87. 
123

Source: FHWA.

Figure 86. Screenshot. Establishing a cell as a RealCost Output—Add-in menu.
124

Source: FHWA.

Figure 87. Screenshot. Establishing a cell as a RealCost Output—dialog. 
125

SIMPLIFIED ANALYSIS RESULTS

The development of analysis outputs to simplify the analysis results for interpretation can be 

demonstrated in the following example that uses output distribution. 

Following the previous example, the resulting difference distribution curve simplifies the 

comparison of cumulative distribution curves by associating a level of reliability with the 

difference between the two alternatives. Users can simulate defining RealCost outputs for their 

desired cells and then examine the simulation results’ user-defined output. Figure 88 shows the 

different distribution curves for the two alternatives compared in figure 87. The simulation 

outcomes favor Alternative 2. It should be noted that different distribution curves are skewed 

toward the negative zone of the differences between the alternatives.

Source: FHWA.

Cum. Rel. Freq. = cumulative relative frequency; Rel. Freq. = relative frequency.

Figure 88. Graph. Difference distribution curve for two design strategy alternatives.

 

127

APPENDIX C. REAL-WORLD APPLICATIONS OF REALCOST

LCCA has become an integral component for pavement type selection in several SHAs. Based 

on a 2009 survey conducted under NCHRP Project 10-75 (Guide for Pavement Type Selection), 

29 of 33 responding States reported using an LCCA procedure for new and reconstruction 

projects (Hallin et al. 2011). Of these 29 States, 10 States (Arizona, Colorado, Delaware, Florida, 

Indiana, South Carolina, Tennessee, Utah, Vermont, and Washington) reported using RealCost,

and 3 States (California, Louisiana, and Maryland) reported using a customized version of 

RealCost as the LCCA software of choice. The remaining SHAs reported using State-developed 

software or spreadsheet packages (14 States) or the American Association of State Highway 

Transportation Officials’ DARWin software (2 States) in the LCCA process (Ozbay, 2003). 

As demonstrated by these 13 States, RealCost can be a handy and useful tool for assessing 

pavement design alternatives’ economic benefits. Incorporating the LCCA early in the project 

development phase allows for selecting the most viable and cost-effective pavement alternative 

while minimizing the amount of rework and analysis during the remaining phases of the project. 

Also, conducting the LCCA early in the project development phase allows for sufficient time for 

agency review and paving industry buy-in when warranted.

Since the RealCost software allows for the incorporation of initial construction costs, future 

preservation and rehabilitation costs, remaining life value, and user costs, it can assist an SHA in 

selecting the most cost-effective pavement strategy. In this regard, allowing the highway agency 

to consider impacts to both itself (e.g., construction timing, material selection, treatment 

strategies, or total cost minimization and pavement life maximization) and the users of the 

facility (minimizing user delay, minimizing vehicle operating costs, and maximizing the use of 

dollars), the RealCost program provides for a comprehensive analysis of the economics of 

alternative pavement strategies. Moreover, its probabilistic simulation capability and expanded 

analysis scope (6 strategy alternatives and 24 activities per alternative) allow the user to project 

the future and predict costs accurately. 

This appendix briefly describes how SHAs are using RealCost to conduct project-level pavement 

LCCA. It includes summaries for 5 of the 13 States that reported using RealCost in the 

NCHRP 10-75 survey (Hallin et al. 2011). 

CALIFORNIA DEPARTMENT OF TRANSPORTATION

RealCost is used by the California Department of Transportation (Caltrans) to evaluate 

alternative pavement designs for new construction and reconstruction or the rehabilitation of 

existing roadways. Caltrans requires the use of an LCCA process for all work conducted on the 

State highway system, excluding major maintenance (e.g., slurry seals, chip seals, crack sealing), 

projects less than $750,000, engineering analysis for permit actions, maintenance pullouts, and 

landscape paving. LCCA is conducted twice for all projects, during the project scoping phase 

(project initiation document) and during the environmental approval phase (project approval and 

environmental document).
128

Currently, Caltrans only uses the deterministic approach in RealCost. Caltrans intends to 

implement probabilistic analysis as soon as the probabilistic distribution functions for the 

individual input variables have been established. 

Working with the FHWA, Caltrans initiated many of the features that are currently included in 

RealCost v 2.5. Some of these features include the ability to incorporate weekday and weekend 

hourly traffic distributions and analyze more than two alternatives. Also, the Caltrans version of 

RealCost has incorporated predetermined values for several inputs (e.g., discount rate, the value 

of user time, and default hourly distribution), which are identified in the Caltrans Life-Cycle 

Analysis Procedures Manual (2013). This manual and RealCost 2.5.4CA (California Edition) 

can be downloaded from the Caltrans “Life Cycle Cost Analysis” web page (Caltrans 2021). 

COLORADO DEPARTMENT OF TRANSPORTATION

LCCA is used by the Colorado Department of Transportation (CDOT) primarily in the 

comparison of asphalt and concrete pavement alternatives for projects over $2 million. Projects 

not requiring LCCA include crack sealing and minor rehabilitation work on concrete pavements, 

restoration of frictional properties or pavement ride, minor safety improvements, bridge 

replacement projects, and locations where the use of alternative (i.e., thicker overlay) treatments 

are restricted due to curb and gutter or barrier heights.

As of 2009, CDOT requires that all LCCA be performed using the probabilistic analysis (at 

75 percent confidence level) component of RealCost. CDOT also specifies that the economic 

analysis includes the NPV. For the probabilistic analysis, a triangular distribution is used for the 

initial construction costs, a normal distribution is used for the discount rate, and a lognormal 

distribution is used for service life for both initial construction and rehabilitation strategies. Costs 

for the various design alternatives are to include initial design (i.e., preliminary engineering) and 

construction (including engineering costs and traffic control costs), future maintenance, 

rehabilitation, salvage value, and user (travel time and increased vehicle operating costs). User 

costs are calculated outside of RealCost using the WorkZone software program, which can be 

accessed through the CDOT “User Cost” web page (CDOT 2021). The CDOT Current Procedure 

for Life Cycle Cost Analysis and Discount Rate Calculations (2009) is published in (Harris 

2009). In addition, Chapter 13 of the CDOT M-E Pavement Design Manual (CDOT 2021) 

provides additional RealCost inputs. It can be downloaded from the CDOT website

(https://www.codot.gov/programs/research/pdfs/by-subject/by-subject-l-p/life-cycle-costanalysis). 

FLORIDA DEPARTMENT OF TRANSPORTATION

The Florida Department of Transportation (FDOT) conducts LCCA on all new construction and 

reconstruction projects requiring modification of the base or subbase materials. In addition, 

FDOT requires LCCA on all resurfacing projects with a history of poor performance (i.e., less 

than 10 yr for flexible pavements and less than 15 yr for rigid pavements) and when a two-lane 

roadway is being widened to four lanes. 

FDOT conducts LCCA over an analysis period of 40 yr and includes costs for initial 

construction, rehabilitation, and user (delay and vehicle operating costs due to work zone 
129

activity). FDOT does not require consideration of salvage value, remaining life, or maintenance 

costs. Agency construction cost estimates should include the cost for traffic control, design, and 

construction inspection. The user cost calculation is based on the deterministic method contained 

within RealCost. Pavement performance life is based on the Florida pavement database and 

engineering considerations. 

The FDOT procedures for LCCA are provided in the Pavement Type Selection Manual

(FDOT 2019). 

MARYLAND STATE HIGHWAY ADMINISTRATION 

In Maryland, all projects developed through the SHA’s Planning Division (as well as all projects 

developed outside of the Planning Division but with a construction budget greater than 

$15 million) are required to follow the procedures outlined in the pavement type selection 

process. After a project has been identified as a candidate for the pavement type selection 

process, the Maryland SHA completes an LCCA procedure that includes the use of FHWA’s 

RealCost software to compute probabilistic lifecycle costs for all pavement strategy alternatives.

The typical LCCA in Maryland is a two-step process. In the first step, the user enters inputs 

(required for the two design alternatives being compared) into an Excel workbook tool titled 

LCCA-Details.xls. The types of inputs entered into this Excel workbook tool include general 

inputs (e.g., alternative names, project length, number of lanes, and so on), inputs required to 

compute material quantities (e.g., area of pavement included and thickness information), and 

construction line item information (e.g., unit costs and typical daily production rates). The 

construction line-item unit costs and daily production rates are defined in probabilistic 

distributions rather than single values to make the computation more realistic. After all needed 

inputs are entered, a first RealCost simulation run is used to determine the probabilistic 

distributions associated with the construction activity agency costs and construction work zone 

durations for each included construction event. 

After agency cost and construction, duration distributions are determined from the first 

simulation run. These values are defined as inputs in RealCost, and a second (or final) run of the 

RealCost software is used to produce LCCA results for the two design alternatives that include 

initial agency construction costs, future agency rehabilitation costs, and user delay costs. Finally, 

an objective procedure is used to analyze these results and select the most cost-effective design 

alternative from those analyzed. 

WASHINGTON STATE DEPARTMENT OF TRANSPORTATION

The Washington State Department of Transportation (WSDOT) conducts LCCA for new 

construction and reconstruction of all mainline pavements that are 0.5 mi in length or longer or 

have a total construction cost of more than $0.5 million. Also, the construction or reconstruction 

of all high-volume ramps, collector-distributors, acceleration-deceleration lanes, and 

intersections with chronic rutting problems require review and consideration for LCCA. 

Using RealCost, WSDOT selects the design alternative that results in the lowest NPV or EUAC. 

However, other non-cost-related factors, such as air pollution impacts, impacts on surrounding 

neighborhoods, noise variances, and so on, require consideration in selecting the most viable 
130

alternative. At a minimum, one HMA alternative is compared to one PCC alternative. Although a 

probabilistic analysis is preferred, WSDOT allows for a deterministic analysis but requires that a 

sensitivity analysis of inputs be completed.

The LCCA comparison is based on the project’s total costs and includes initial construction, 

maintenance and rehabilitation, user costs (delay due to work zone activity only), and salvage 

value. For agency construction costs, mobilization (5 percent), engineering contingencies 

(15 percent), and preliminary engineering (10 percent) are included in the cost estimate but can 

be excluded for the initial construction when the costs are similar for each of the design 

alternatives. Washington State sales tax is included in all construction cost estimates.

A 50-yr analysis period is used for all principal arterials, interstates, and highways with more 

than 100,000 equivalent single-axle loads per year, and 20 yr for all other highway types. 

Pavement performance life for all strategies is based on performance data contained within the 

pavement management system.

A complete list of RealCost recommended inputs, including the probability distribution 

recommendations, is provided in the WSDOT Pavement Policy (2018). 
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GLOSSARY

Activity—A specific action performed by the highway agency, such as initial construction or 

major rehabilitation. An activity is defined by its agency costs, its service life, and its 

effects on highway users. An activity is a component of an alternative.

Agency cost—Money spent by a transportation agency for construction or rehabilitation 

activities.

Analysis period—The LCCA analysis period is the time horizon over which the various design 

strategy alternatives are evaluated. It should be sufficient to reflect long-term cost 

differences associated with reasonable design strategies.

Bridge—A structure including supports erected over a depression or an obstruction, such as 

water, highway, or railway, and having a track or passageway for carrying traffic or other 

moving loads, and having an opening measured along the center of the roadway of more 

than 20 ft between undercoating of abutments or spring lines of arches, or extreme ends 

of openings for multiple boxes. It may also include multiple pipes, where the clear 

distance between openings is less than half of the smaller contiguous opening under 

23 CFR, Section 650.305 (U.S. Government Printing Office 2010).

Data input field—An area on an input screen where data may be entered. 

Design strategy alternative—The complete set of activities over a specified analysis period that 

defines a strategy for achieving the performance goals of a project. In LCCA, all design 

strategy alternatives being considered for a project will equally meet the performance 

requirements of the project.

Discount rate—The discount rate represents the real value of money over time and is used in 

LCCA to convert future costs to present-day costs. The discount rate is nominally defined 

as the interest rate minus the inflation rate. Low discount rates favor those alternatives 

that combine large capital investments with low maintenance or user costs, whereas high 

discount rates favor reverse combinations.

Graphical user interface—A set of window graphics that provides an easy-to-use interface to a 

software program.

Inflation rate—The inflation rate is the rate of increase in the prices of goods and services that 

are used for the construction and upkeep of highways. The inflation rate represents past 

changes in the purchasing power of money. The inflation rate is derived from economic 

indicators like the consumer price index. It should only be used in the LCCA to bring 

past monetary values to present values. Forecasting future inflation rates is difficult, if 

not impossible, to predict. The use of nominal discount rates should be resisted without 

reliable forecasting methods for inflation. If an agency decides to include future inflation 

projections in the LCCA, care should be taken to include them in the projections of costs 

as well.
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Input screen—A Switchboard-based pop-up window for entering and working with data in 

RealCost.

Interest rate—The interest rate (often referred to as the market interest rate) is associated with the 

cost of borrowing money. The interest rate represents the earning power of money.

LCCA menu—A special menu item that is created by RealCost and resides in the Add-ins menu 

of the Excel menu bar. The menu allows access to the Switchboard and various input 

screens.

Macro—An Excel macro is a stored set of instructions that can be triggered by a keyboard 

shortcut to perform a specific task or set of tasks. Macros are used to eliminate the need 

to repeat the steps of common tasks, such as performing computational functions or 

adding or removing rows and columns. In Excel, macros are written in Visual Basic for 

Applications. 

Menu—An Excel component that allows software users to interface with the software. The menu 

bar is typically located at the top of the Excel window. 

Pavement preservation—A program employing a network-level, long-term strategy that 

enhances pavement performance by using an integrated, cost-effective set of practices 

that extend pavement life, improve safety, and meet motorist expectations. A pavement 

preservation program consists primarily of three components: preventive maintenance, 

minor rehabilitation (nonstructural), and some routine maintenance activities (Geiger 

2005). 

Pavement preventive maintenance—Preventive maintenance is a planned strategy of costeffective treatments to an existing roadway system that preserves the system, delays 

future deterioration, and maintains or improves the functional condition of the system 

without (significantly) improving the structural capacity (Geiger 2005). Examples of 

preventive maintenance include crack sealing, microsurfacing, chip seals, and thin hotmix asphalt overlays.

Pavement reconstruction—Pavement reconstruction consists of the replacement of the entire 

existing pavement structure with an equivalent or increased pavement structure (Geiger 

2005). Reconstruction usually requires the complete removal and replacement of the 

existing pavement structure and may utilize either new or recycled materials in the 

materials used for the reconstruction (Geiger 2005). 

Pavement rehabilitation—Rehabilitation consists of structural enhancements that extend the 

service life of the existing pavement and/or improve its load-carrying capacity (Geiger 

2005). Rehabilitation techniques include structural overlays, partial-depth recycling, and 

restoration treatments, such as concrete pavement restoration (i.e., patching, diamond 

grinding, and dowel-bar retrofit).

Project—A project involves the construction, reconstruction, rehabilitation, or preservation of an 

asset item, with the provision that a specific level of performance will be provided to the 
133

motoring public. In RealCost LCCA analysis, all design strategy alternatives being 

considered for a project must provide the same level of performance for road users.

Remaining life value—The monetary value (both agency and user costs) of potential service 

remaining at the end of the analysis period. It is computed as a depreciation of the costs 

of structural and functional activities occurring over the analysis period. 

Residual value—The value of recovered or recyclable materials at the end of the analysis period 

(Walls and Smith 1998). 

Roadway asset—For purposes of RealCost, a roadway asset typically includes major roadway 

infrastructure items, such as pavement, bridges, tunnels, drainage systems, and safety 

features.

Roadway—The strip of land or part of a bridge over which a road passes and along which 

various infrastructure-related items (e.g., drainage systems, traffic safety features) exist.

Salvage value—The value of an investment alternative at the end of the analysis period (Walls 

and Smith 1998). The two fundamental components associated with salvage value are the 

remaining life value and the residual value.

Service life—The period during which the product of a construction or rehabilitation activity can 

satisfy the performance requirements or expectations placed on it. The end of the service 

life in RealCost is used as a trigger for the next activity. As an example, for pavements, 

the service life refers to the functional life of the pavement (i.e., surface performance 

issues such as smoothness, friction, noise, and aesthetics). Functional pavement activities 

include, among other things, preventive maintenance treatments and friction restoration 

treatments that do not add to the structural capacity of the pavement.

Structural life—The period of time during which the product of a construction or rehabilitation 

activity is able to satisfy the structural, load-carrying requirements or expectations placed 

on it. For pavements, structural activities have both a defined structural life as well as a 

functional life.

Switchboard—The primary interface mechanism in RealCost. The Switchboard appears 

automatically when the software is started and may also be accessed through the 

RealCost menu.

Tab (worksheet tab)—A selection device at the bottom of a displayed Excel workbook file that 

allows the software user to select and move between different worksheets within the 

workbook. 

User costs—User costs are the time delay, vehicle operating, and crash costs incurred by the 

users of a facility. RealCost is structured to only allow the computation of time delay and 

vehicle operating costs associated with work zones. However, the program’s 

customization features can be used to compute other forms of user costs.
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Visual Basic for Applications—Tool used to automate tasks ranging from adding together two 

inputted numbers to performing multistep, complex operations that use multiple inputs. 

Visual Basic code is also used to create the Switchboard interface for RealCost.

Work zone—An area of reduced roadway capacity due to agency construction or rehabilitation 

activities.

Workbook—An Excel file composed of one or more worksheets and additional Visual Basic for 

Applications code. The RealCost software is a workbook.

Worksheet—A single page of an Excel workbook; a single spreadsheet.
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HRDI-20/03-23(WEB)E Recycled

Recyclable

Recommended citation: Federal Highway Administration,

Lifecycle Cost Analysis RealCost User Manual 

(Washington, DC: 2023) https://doi.org/10.21949/1521964