The National Academies

NCHRP 13-07 [RFP]

Guide to Calculating Ownership and Operating Costs of Department of Transportation Vehicle and Equipment Fleet

Posted Date: 11/1/2017

  Project Data
Funds: $300,000
Contract Time: 17 months
(includes time for NCHRP review and approval of interim products and 3 months for NCHRP review and for contractor revision of the final documents)
Authorization to Begin Work: 3/30/2018 -- estimated
Staff Responsibility: Andrew C. Lemer
   Phone: 202/334-3972
   Email: alemer@nas.edu
RFP Close Date: 12/14/2017
Fiscal Year: 2018


State departments of transportation (DOTs) utilize a variety of vehicles and equipment to ensure the safe, reliable, and efficient operation of the roads and other facilities for which the agency is responsible. From plowing snow to mowing right-of-way to clearing debris to dealing with the storm damage to patching pavement cracks and potholes, a DOT’s fleet and equipment comprise an important public asset. While the precise composition of a DOT’s fleet and equipment inventory depends on the state’s geography and characteristics of the transportation system, taken together the expenditures for purchasing, customizing, operating, maintaining, repairing, and replacing vehicles and equipment are substantial, essential, and complex for any agency.

A DOT makes these expenditures to acquire vehicles and other equipment and fuel, modify equipment to meet the agency’s specific requirements, administer the use of equipment in operations, perform routine and preventive maintenance tasks, replace worn or broken parts, repair damage, and to provide such services as procurement and cost accounting. In addition, the wear and tear of usage and aging and the unavoidable obsolescence caused by advancing technology and rising public expectations may warrant spending to replace vehicles or other equipment even if they still seem functional. However, the equipment purchased may be in service for many years, used by more than one operating unit, and employed in support of multiple functions such as pothole repair and snow removal. There are more ownership and operation costs than those related to purchases and other capital expenditures.

Cost in this context is a potentially complex accounting concept that is not easily measured or calculated. Calculating the cost of having a snowplow ready and using it to clear a highway, for example, requires consideration of not only the initial vehicle purchase price, but also subsequent expenses (for example, customization or “upfitting” by addition of agency decals or a GPS device, replacement of worn parts, insurance or other risk-management spending, provision of storage and shop facilities, and depreciation charges to account for loss of value to wear and obsolescence). In addition, expenses an agency pays for maintaining and administering a spare parts inventory, processing and storage of data on equipment usage and service delivery, and compensating personnel responsible for preparing reports required by other state or federal agencies contribute to the total cost of owning and operating fleet and equipment.

Effective management of a DOT depends on having a good understanding of these various costs, how they are affected by equipment use and aging, when in the future they are likely to be incurred, and how they may be affected by deferral of spending and technology change. Knowledge of these costs allows DOTs to understand and communicate how spending can influence system and agency performance.

Calculating costs requires adaptation of fundamental principles and conventions of management accounting to address the specific conditions of a particular enterprise, product, or service. Successful freight transporters, vehicle leasing companies, and other private-sector owners and users of fleets and equipment have found ways to calculate their costs and manage their businesses to ensure that they can remain profitable.

DOTs also have a need to calculate costs, but they lack such seemingly straightforward measures as profitability to gauge their performance and must rely on public-sector funding and budgeting mechanisms that may not be linked to costs incurred. There is no widely accepted methodology and little guidance for adapting and applying such sound management principles to the specific characteristics of DOTs’ fleet and equipment activities. In addition, variations among states’ budgeting and fiscal management practices require adjustment of generally accepted cost estimating and accounting practices to the specific situation of a particular DOT. Research is needed to (a) identify primary components of DOT fleet and equipment costs and how costs may be appropriately allocated among the DOT’s various services and operating units; (b) develop effective methods for collecting and using data for calculating these costs for the specific services fleet and equipment provide; and (c) present and use cost information in management, budgeting, and communication with a range of stakeholders.


The objective of this research is to develop a guide for DOT fleet managers to calculate the fleet and equipment ownership and operations costs to support decision making. The guide shall include at least the following components:

  • Identification and definition of the full range of direct and indirect costs appropriately associated with DOT vehicles and equipment;
  • Guidance for how best to allocate and aggregate vehicle and equipment costs appropriately among the DOT’s services and operating units to support cost calculations for various functional and management units in the DOT (for example agency, district, or activity) to answer frequently asked questions;
  • Identification of fleet and equipment performance measures that may be used in the context of cost calculation;
  • Methodology for calculating fleet and equipment total and unit costs at various management levels within the agency (for example by vehicle type, activity, district, or agency as a whole);
  • Guidance for data collection and use to support fleet and equipment cost calculation and performance management;
  • Guidance on presentation and use of calculated costs to support management and budgeting decision making and communication with stakeholders.

The guide should be useful for fleet and fleet-services management and for informing senior agency decision makers and other internal and external stakeholders such as budget-agency and elected officials, road users, and the general public.


Proposers are asked to describe a detailed research plan to accomplish the project objective. The following scope description is intended to indicate NCHRP’s expectations and provide a framework for that research plan. Proposers are expected to describe research plans that can realistically be accomplished within the constraints of available funds and contract time and will provide opportunities for NCHRP to review and comment on research progress. Proposers must present their current thinking in sufficient detail to demonstrate their understanding of the issues and the soundness of their approach.

The research should include at least the following deliverable products and milestones:

1. A 60- to 90-minute kickoff web conference with the NCHRP project panel, within 2 weeks of the contract’s effective date, to discuss the work plan, important technical issues, and the review procedure for research products.

Note: For budgeting purposes, proposers may assume that NCHRP will make arrangements for all web conferences.

2. Interim Report 1 (IR1), to be delivered within 3 months of contract initiation, presenting a critical review of current and leading practices for vehicle and equipment fleet management cost accounting.

Note: NCHRP anticipates that IR1 will build on previous research by NCHRP and others and will include a review of representative current agency practices. Proposers should give their current thinking on the extent to which literature review, interviews with practitioners, and other methods will be used to gather information for IR1. Proposers should allow no less than 1 month for project panel review of IR1 and should plan to meet via web conference with the panel following review of the product and to document the discussion and decisions made. Unless otherwise specified, NCHRP anticipates that all interim reports will be delivered in electronic form only and that work will proceed on other elements of the research during the review periods for IR1 and other interim products. NCHRP envisions that completion of IR1 should account for no more than 15% of the project budget.

3. Interim Report 2 (IR2), to be delivered within 7 months of contract initiation, presenting (a) identification and definition of the full range of direct and indirect costs appropriately associated with DOT vehicles and equipment; (b) guidance for allocating and aggregating vehicle and equipment costs appropriately among the DOT’s services and operating units to support cost calculations for various functional and management units in the DOT to answer frequently asked questions; and (c) identification of fleet and equipment performance measures that may be used in the context of cost calculation.

Note: Proposers should present their current thinking on sources and examples of cost-of-service or product-cost frameworks that may inform development of information to be presented in IR2. Proposers should allow no less than 1 month for project panel review of IR2 and should plan to meet via web conference with the panel following review of the product and to document discussion and decisions made.

4. Interim Report 3 (IR3), to be delivered within 10 months of contract initiation, presenting (a) methodology calculating fleet and equipment total and unit costs at various management levels within the agency; (b) preliminary guidance for data collection and use to support fleet and equipment cost calculation and performance management; and (c) preliminary guidance on presentation and use of calculated costs to support management and budgeting decision making and communication with stakeholders.

Note: Proposers should present their current thinking on methodology to be presented in IR3. Proposers should allow no less than 1 month for project panel review of IR3 and should plan to meet in person with the panel following review to discuss and refine the methodology and guidance. For budgeting purposes, proposers should assume the meeting will be a 1- to 2-day event held at the Beckman Center in Irvine, CA. NCHRP will pay expenses for panel-member travel. The contractor shall be required to document the discussions and key decisions regarding methodology and cost-calculation and presentation guidance. NCHRP approval to proceed with subsequent work shall be required.

5. Draft Guide, to be delivered within 14 months of contract initiation, presenting guidance for DOTs on implementing and using the cost calculation methodology, and including as appendices, a summary report documenting the research project and an executive briefing document that may be extracted to present to senior DOT officials and other stakeholders key aspects of vehicle and equipment fleet ownership and operating costs and their calculation.

Note: NCHRP intends that the products of this research should be useful to a range of agencies and users and does not wish to constrain unnecessarily the format for presenting the guide. Proposers should present their current thinking on this matter. NCHRP will require one month to review and provide comments on the Draft Guide.

6. Final Guide, including changes made in response to NCHRP comments on the Draft Guide.

Note: NCHRP will require a “response to comments” memorandum documenting NCHRP comments on the Draft Guide and contractor responses as reflected in the Final Guide. Proposers should plan that NCHRP will require 20 printed copies each of the draft and final FD1. Three months total shall be required at conclusion of the project for NCHRP review draft final deliverables and contractor revisions, including the 1 month specified for review of the Draft Guide.


A. The Research Plan, Section 4 of the proposal, must not exceed 12 pages in length; the typeface used must not be smaller than 12 points.

B. The methodology to be developed in this research should be compatible with reporting requirements of the Government Accounting Standards Board and Federal Highway Administration.

C. 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.

D. 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

E. Item 5 in the proposal, "Qualifications of the Research Team," 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.

F. 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 and experiment design; (3) the experience, qualifications, and objectivity of the research team in the same or closely related problem area; (4) the plan for ensuring application of results; (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.

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

G. 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 12/14/2017.

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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