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The National Academies

NCHRP 10-101 [Anticipated]

Examining State DOT and USDOT Construction Cost Inflation Indices and Methods

  Project Data
Source: South Dakota
Funds: $250,000
Staff Responsibility: Ann M. Hartell
Fiscal Year: 2018

This project has been tentatively selected and a project statement (request for proposals) is expected in November 2017. The project statement will be available on this world wide web site. The problem statement below will be the starting point for a panel of experts to develop the project statement.

State DOTs and the USDOT use different approaches to estimate construction cost inflation. There may be very good reasons to have different approaches:
  • Construction materials and service costs vary by state and so do the items tracked and used in cost inflation calculations.
  • The National Highway Construction Cost Index (NHCCI) depicts construction cost inflation to be relatively flat, but many states have a different experience.
  • Some agencies calculate inflation rates for specific materials, geographic regions, or project types.
  • Appropriate short-term and long-term inflation rates generally differ.
To expand the knowledge that state DOTs possess and to improve state practices in estimating construction cost inflation, it would be valuable to survey the states and try to understand the different, innovative, and effective approaches and their outputs. Findings would aid states in improving construction cost inflation and cost estimation practices.

Many research studies have mentioned construction cost inflation but few have addressed it as a key issue affecting construction cost prediction and construction cost estimation for purposes of bid-letting, fiscal constraint, developing Statewide Transportation Improvement Plans and Transportation Improvement Plans, and long-range planning.

The primary objective of this research is to analyze if particular state construction cost inflation practices are more successful than others along with the National Highway Construction Cost Index and determine if some of the approaches may be transferrable to other states.

Potential tasks may include (1) surveying states to determine the various approaches used to estimate construction cost inflation; (2) describing various state construction inflation estimation practices and the NHCCI; (3) determining if some of the approaches are more successful than others in estimating future construction cost inflation, and analyzing and describing why that is the case; (4) describing effective practices for estimating construction cost inflation; and (5) comparing the construction cost inflation rates estimated by states and the NHCCI to actual cost outcomes.

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