STATUS: Research is complete.
The guidebook, research report, forecasting toolkit in spreadsheet format, and presentation slides and videos summarizing the project are available at: https://www.trb.org/main/blurbs/181093.aspx.
BACKGROUND & OBJECTIVE
The ability to create accurate forecasts of project costs is a core competency for state departments of transportation (DOTs). Cost forecasting is used by state DOTs to develop and update transportation plans; program projects; manage transportation improvement programs; administer the bid-letting process; and oversee contracts. Forecasts are used to demonstrate fiscal constraint and to track performance measures of on-time, within budget delivery. Reliable and accurate cost estimates help agencies improve decision making and transparency, and build trust by supporting reliable program delivery.
Forecasts have a range of time horizons, from short-term construction project estimates (1 to 2 years), mid-term State Transportation Improvement Programs (STIPs; 3 to 5 years), intermediate-range plans (up to 10 years), to Long-Range Transportation Plans (LRTPs; 20 years). However, forecasting costs over long time horizons poses serious challenges: the longer the time horizon, the greater the risk and uncertainty.
The objective of this research was to provide guidance for state DOTs to improve forecasting for mid-term, intermediate, and long-range time horizons to better account for cost variability, economic volatility, and risk. The project built upon existing research and current practices in cost forecasting, and serves as a resource for state DOTs to augment their forecasting approaches.