Guidebook for Considering Life-Cycle Costs in Airport Asset Procurement

Airports usually are required to take the lowest bid when procuring assets. This approach tends not to take into consideration the life-cycle costs, such as the operation and maintenance costs, which can result in higher than anticipated costs from the operations and maintenance (O&M) budget. Since the purchase of assets is allocated from capital funds that are managed by a person typically different than the person responsible for the day-to-day management of O&M funds, there can be a disconnect on what is considered “better” when considering two bids.Taking a life-cycle, also known as total cost of ownership (TCO), approach to the initial procurement can ensure a more fiscally responsible use of all funds. TCO is an alternative method to procuring assets that has been successfully used in other industries. It allows organizations to have a more systematic approach to both capital and operating funds. TCO considers the initial acquisition costs, ongoing O&M costs, depreciation, and disposal of the asset at the end of its useful life. Understanding TCO can also be useful when soliciting and negotiating service agreements so that service-level requirements can be thoughtfully integrated into the terms of the agreement as it may correspond to preventive maintenance, capital investments, and improvements by the vendor. This guidebook is designed to help airport staff learn about other industries’ use of TCO, and how to integrate it into their procurement practices. The TCO Tool that was developed is available on the TRB website (www.trb.org) on the summary page for ACRP Research Report 172. In addition, five instructional videos have been developed on how to use the TCO Tool; they can be found on the Vimeo site for the National Academies of Sciences, Engineering, and Medicine (vimeo.com/academies).

Language

  • English

Media Info

  • Media Type: Digital/other
  • Features: Appendices; Figures; Glossary; References; Tables;
  • Pagination: 250p
  • Serial:
  • Publication flags:

    Open Access (libre)

Subject/Index Terms

Filing Info

  • Accession Number: 01640234
  • Record Type: Publication
  • ISBN: 9780309446280
  • Report/Paper Numbers: Project 09-13
  • Files: TRIS, TRB, ATRI
  • Created Date: Apr 24 2017 8:58AM