The National Academies

NCHRP 13-07 [Anticipated]

Guidelines to Calculate Total Cost of Ownership for Fleet Operations

  Project Data
Source: AASHTO Highway Subcommittee on Maintenance
Funds: $300,000
Staff Responsibility: Andrew C. Lemer
Fiscal Year: 2018

This project has been tentatively selected and a project statement (request for proposals) is expected in July 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.

The equipment fleet is a major financial investment for a state DOT and is crucial to the agency’s efforts to ensure the mobility and access essential to the state’s economy and quality of life. The effectiveness of the equipment fleet operations affects the DOT’s ability to perform routine activities efficiently and effectively and to respond successfully to emergency events. Equipment acquisition and costs of labor, parts, and fuel for preventive maintenance (PM) and repair now consume up to 30 percent of a DOT’s infrastructure maintenance dollars. Total annual equipment-related expenditures may approach $80M in a typical DOT.

Appropriate fleet asset management will result in substantial savings and make available valuable fiscal resources for other uses. Moreover, the productivity and safety of work crews and personnel depends upon their having the correct equipment available when needed to support and successfully accomplish work activities.

Knowledge and understanding of all fleet cost elements and accurate allocation of costs are critical to at least three important aspects of a DOT’s fiscal management: (1) cost estimating for budgeting, procurement, and asset management; (2) agency performance management and evaluation; and (3) fiscal budgeting, cost control, and financial and other decision making. DOTs need accurate, reliable, and generally acceptable methods for determining and reporting their total costs of ownership for their mobile equipment (including acquisition, depreciation, rental, operation, insurance, fueling, PM and repair, mobile servicing, storage, garaging, and more). Research is needed to identify all cost elements of fleet operations and develop effective methods for collecting and using cost data to support full understanding of all direct and indirect fleet operations costs.

The objective of this research is to develop a methodology and provide guidance for DOTs to use in characterizing and assessing the vehicle fleet total cost of ownership. The research results will inform fleet customers (both internal and external, such as elected officials and road users) as well as fleet-services providers and senior agency decision makers. The research may entail such tasks as developing a synthesis of current literature and practices for calculating fleet costs and expenses, conducting a survey of DOT fleet managers to identify what problems and concerns related to cost-of-ownership analysis in decision making, developing a standardized activity-based costing methodology, and developing a guide for quantifying the total costs of ownership.

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