The National Academies

NCHRP 10-101 [RFP]

Improving Mid-Term, Intermediate, and Long-Range Cost Forecasting: Guidance for State Departments of Transportation

Posted Date: 12/4/2017

  Project Data
Funds: $250,000
Contract Time: 24 months
(includes 1 month for NCHRP review and approval of the interim report and 3 months for NCHRP review and for contractor revision of the final report)
Authorization to Begin Work: 5/1/2018 -- estimated
Staff Responsibility: Ann M. Hartell
   Phone: 202-334-2369
   Email: ahartell@nas.edu
RFP Close Date: 1/23/2018
Fiscal Year: 2018


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 sources of uncertainty include but are not limited to:

  • Cost forecasting approaches:
    • Variation in the quality and quantity of historical data available for forecasting
    • State DOT capacity for forecasting analysis
    • Use of inappropriate cost estimation indices 
  • State DOT program and project delivery:
    • Variation in materials, labor, and other costs 
    • Geographic differences within a state or region
    • Evolution of scope and design during project development
    • Project size and complexity
    • Availability, amount, and timing of federal, state, and local funding
  • Contracting and wider economic forces:
    • Contracting methods and requirements that affect cost and cost development
    • Timing of bid release and lead time to the construction season
    • Market conditions (e.g., “thin” contracting markets with few firms and little competition; year-to-year variability in the size of the program) 
    • Variation in short-term and long-term inflation (or deflation) rates and volatility of economic conditions

A number of recent studies have addressed aspects of uncertainty in cost forecasting.  For example, Wisconsin DOT developed an approach using a chained Fisher index with over 90 cost items to better incorporate historical data into cost estimates (see: https://trid.trb.org/view.aspx?id=1393021 ). The Montana DOT is implementing a cost estimation method that uses a dynamic basket of items in a multidimensional index, to better reflect the granularity of the construction market and differences across project types (see: http://www.mdt.mt.gov/other/webdata/external/research/DOCS/RESEARCH_PROJ/CONSTRUCT_COST_INDEX/Final_Report.pdf ). The Federal Highway Administration recently developed an improved methodology for project cost estimates (draft final report available on request from Richard.Duval@dot.gov). These efforts have focused on project cost estimates for relatively short time horizons. This project will build on this recent work by focusing on potential improvements to cost forecasting for longer time horizons, which are needed for planning, programming, and other purposes.


The objective of this research is 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 will build upon existing research and current practices in cost forecasting, serving as a resource for state DOTs to augment their forecasting approaches.


The NCHRP is seeking the insights of proposers on how best to achieve the research objective. Proposers are expected to describe research plans that can realistically be accomplished within the constraints of available funds and contract time. Proposals must represent the proposer’s current thinking, described in sufficient detail to demonstrate their understanding of the issues and the soundness of their approach in meeting the research objective and for enabling the implementation of the research results. The proposed research plan must be divided into tasks and proposers must describe each task in detail.

The research plan will include two phases.

Phase 1

Phase 1 will, at a minimum, include the following:

  • Summarize current practices used by state DOTs for forecasting costs for mid-term, intermediate, and  long-range time horizons.
  • Assess current approaches, including comparing forecasts with actual cost outcomes, as available. 
  • Identify appropriate approaches for cost forecasting, and for each, describe strengths and weaknesses pertaining to:
    • Expected accuracy for state DOT forecasting time horizons
    • Effectiveness in addressing economic, geographic, contracting, and  project variability
    • Applicability for mid-term, intermediate, or long-range time horizons
    • Applicability for augmenting estimation approaches for state DOT processes, including STIPs, transportation asset management plans (TAMPs), long-range transportation plans (LRTPs), and for other purposes
    • Data requirements, including data collection methods and ongoing data management 
    • Resources and staff capacity required
    • Cost-effectiveness of the approach and the returns to improvements in forecasting
  • Submit Interim Report summarizing the results of Phase 1.

Note: Phase 1 will culminate with an in-person Interim Meeting with the NCHRP project panel. Travel and per diem costs for panel members attending the Interim Meeting will be paid by NCHRP.  Following receipt of the Interim Report, 1 month shall be for NCHRP review and comment. NCHRP approval of the Phase 1 Interim Report is required before proceeding with Phase 2. Proposers may include additional interim deliverables in the proposed research plan.

Phase 2

Phase 2 will, at a minimum, include development of a framework for state DOTs to select improvements to current forecasting approaches to meet a range of purposes. The framework will provide guidance for selecting approaches identified in Phase 1 that are appropriate and effective in improving cost forecasting for state DOT purposes.

Final deliverables will include (1) a report documenting the research results and the framework and (2) a presentation of the research results (e.g., recorded webinar or PowerPoint presentation).

Note: Following receipt of the draft final deliverables, the remaining 3 months shall be for NCHRP review and comment and for research agency preparation of the final deliverables.


A. Proposals should include a task-by-task breakdown of labor hours for each staff member as shown in Figure 4 in the brochure, "Information and Instructions for Preparing Proposals" (http://onlinepubs.trb.org/onlinepubs/crp/docs/ProposalPrep.pdf). Proposals also should include a breakdown of all costs (e.g., wages, indirect costs, travel, materials, and total) for each task using Figures 5 and 6 in the brochure. Please note that TRB Cooperative Research Program subawards (selected proposers are considered subawards to the National Academy of Sciences, the parent organization of TRB) must comply with 2 CFR 200 – Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards. These requirements include a provision that proposers without a "federally" Negotiated Indirect Costs Rate Agreement (NICRA) shall be subject to a maximum allowable indirect rate of 10% of Modified Total Direct Costs. Modified Total Direct Costs include all salaries and wages, applicable fringe benefits, materials and supplies, services, travel, and up to the first $25,000 of each lower-tier subaward and subcontract. Modified Total Direct Costs exclude equipment, capital expenditures, charges for patient care, rental costs, tuition remission, scholarships and fellowships, participant support costs and the portion of each lower-tier subaward and subcontract in excess of $25,000.

B. The NCHRP is a practical, applied research program that produces implementable products addressing problems faced by transportation practitioners and managers. The benefits of NCHRP research are realized only when the results are implemented in state DOTs and other agencies. Implementation of the research product must be considered throughout the process, from problem statement development to research contract and beyond completion of the research. Item 4(c), "Anticipated Research Results," must include the following: (a) the "product" expected from the research, (b) the audience or "market" for this product, (c) a realistic assessment of impediments to successful implementation, and (d) the institutions and individuals who might take leadership in deploying the research product. The project panel will develop and maintain an implementation plan throughout the life of the project. The research team will be expected to provide input to an implementation team consisting of panel members, AASHTO committee members, the NCHRP Implementation Coordinator, and others in order to meet the goals of NCHRP Active Implementation: Moving Research into Practice, available at http://onlinepubs.trb.org/onlinepubs/nchrp/docs/NCHRP_ActiveImplementation.pdf.

C. Item 5 in the proposal, "Qualifications of the Research Team," is limited to two pages for each member of the research team. Additional qualifications or CVs included in an appendix will not be considered.  Item 5 must include a section labeled "Disclosure." Information relevant to the NCHRP's need to ensure objectivity and to be aware of possible sources of significant financial or organizational conflict of interest in conducting the research must be presented in this section of the proposal. For example, under certain conditions, ownership of the proposing agency, other organizational relationships, or proprietary rights and interests could be perceived as jeopardizing an objective approach to the research effort, and proposers are asked to disclose any such circumstances and to explain how they will be accounted for in this study. If there are no issues related to objectivity, this should be stated.

D. Proposals are evaluated by the NCHRP staff and project panels consisting of individuals collectively very knowledgeable in the problem area. Selection of an agency is made by the project panel considering the following factors: (1) the proposer's demonstrated understanding of the problem; (2) the merit of the proposed research approach; (3) the experience, qualifications, and objectivity of the research team in the same or closely related problem area; (4) demonstrated understanding of opportunities and challenges for implementation; (5) the proposer's plan for participation by Disadvantaged Business Enterprises--small firms owned and controlled by minorities or women; and (6) the adequacy of the facilities and resources.

Note: The proposer's plan for participation by Disadvantaged Business Enterprises should be incorporated in Item 12 of the proposal.

E. Copyrights - All data, written materials, computer software, graphic and photographic images, and other information prepared under the contract and the copyrights therein shall be owned by the National Academies of Sciences, Engineering, and Medicine. The contractor and subcontractors will be able to publish this material for non-commercial purposes, for internal use, or to further academic research or studies with permission from TRB Cooperative Research Programs. The contractor and subcontractors will not be allowed to sell the project material without prior approval by the National Academies of Sciences, Engineering, and Medicine. By signing a contract with the National Academy of Sciences, contractors accept legal responsibility for any copyright infringement that may exist in work done for TRB. Contractors are therefore responsible for obtaining all necessary permissions for use of copyrighted material in TRB's Cooperative Research Programs publications. For guidance on TRB's policies on using copyrighted material please consult Section 5.4, "Use of Copyrighted Material," in the Procedural Manual for Contractors.

Proposals (15 single-bound copies) are due not later than 4:30 p.m. on 1/23/2018.

This is a firm deadline, and extensions are not granted. In order to be considered for award, all copies of the agency's proposal accompanied by the executed, unmodified Liability Statement must be in our offices not later than the deadline shown, or the proposal will be rejected. Proposers may choose any carrier or delivery service for their proposals. However, proposers assume the risk of proposal rejection if the carrier or delivery service does not deliver all the required documents by the deadline.

Delivery Address:

ATTN: Christopher J. Hedges
Director, Cooperative Research Programs
Transportation Research Board
500 Fifth Street, NW
Washington, DC 20001

Liability Statement

The signature of an authorized representative of the proposing agency is required on the unaltered liability statement in order for the NCHRP to accept the agency's proposal for consideration. Proposals submitted without this executed and unaltered statement by the proposal deadline will be summarily rejected. An executed, unaltered statement indicates the agency's intent and ability to execute a contract that includes the provisions in the statement.

Here is a printable version of the Liability Statement (pdf). A free copy of the Adobe Acrobat PDF reader is available at http://www.adobe.com.

General Notes

1. According to the provisions of Title 49, Code of Federal Regulations, Part 21, which relates to nondiscrimination in federally assisted programs, all parties are hereby notified that the contract entered into pursuant to this announcement will be awarded without discrimination on the grounds of race, color, religion, sex, national origin, or disability.

2. The essential features required in a proposal for research are detailed in the current brochure entitled "Information and Instructions for Preparing Proposals" (updated August 2016). Proposals must be prepared according to this document, and attention is directed specifically to Section V for mandatory requirements. Proposals that do not conform with these requirements will be rejected. This brochure is available here.

3. The total funds available are made known in the project statement, and line items of the budget are examined to determine the reasonableness of the allocation of funds to the various tasks. If the proposed total cost exceeds the funds available, the proposal is rejected.

4. All proposals become the property of the Transportation Research Board. Final disposition will be made according to the policies thereof, including the right to reject all proposals.


Potential proposers should understand clearly that the research project described herein is tentative. The final content of the program depends on the level of funding made available through States' agreements for financial support of the NCHRP. Nevertheless, to be prepared to execute research contracts as soon as possible after sponsors' approvals, the NCHRP is assuming that the tentative program will become official in its entirety and is proceeding with requests for proposals and selections of research agencies.

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