Operations Benefit/Cost Analysis TOPS-BC User's Manual – Providing Guidance to Practitioners in the Analysis of Benefits and Costs of Management and Operations Projects
Chapter 1. Introduction
Due to the competitive fiscal environment, state, regional, and local transportation planning organizations around the country are increasingly being asked to justify their programs and expenditures. Transportation System Management and Operations (TSM&O) programs have not escaped this scrutiny and are routinely asked to rank their projects against traditional expansion projects, as well as conduct other “value”-related exercises.
This requirement can put TSM&O projects at a disadvantage since many specialists in this arena have limited experience in performing benefit/cost (B/C) analysis; and often, many of the established tools and data available for conducting B/C analysis for traditional infrastructure projects are poorly suited to analyzing the specific performance measures, project timelines, benefits, and life-cycle costs associated with operational improvements.
In response to the needs of system operators to conduct these analyses, a number of initiatives have been undertaken in recent years at the national, state, and regional levels to develop enhanced analysis tools, methodologies and information sources to support the conduct of B/C analysis for many specific TSM&O strategies. It often remains difficult, however, for practitioners to sift through the various information and guidance sources in order to understand and apply an appropriate methodology for meeting a specific analysis need.
The FHWA Operations Benefit/Cost Analysis Desk Reference Project
The Federal Highway Administration (FHWA) Office of Operations initiated this project in recognition of practitioners’ need for relevant and practical guidance on how to effectively conduct B/C analysis for a wide spectrum of TSM&O strategies. The Operations Benefit/Cost Analysis Desk Reference is intended to meet the needs of a wide range of practitioners looking to conduct B/C analysis of operations strategies. The guidance provided in the Desk Reference includes fundamental background information on B/C analysis, including basic terminology and concepts, intended to support the needs of practitioners just getting started with B/C analysis, who may be unfamiliar with the general process. Building off this primer base, the Desk Reference also describes some of the more complex analytical concepts and latest research in order to support more advanced analysts in conducting their analyses. Some of the more advanced topics include capturing the impacts of travel time reliability; assessing the synergistic effects of combining different strategies; and capturing the benefits and costs of supporting infrastructure, such as traffic surveillance and communications.
The Tool for Operations Benefit/Cost (TOPS-BC)
The Operations Benefit/Cost Analysis Desk Reference is supported by a decision support tool, called the Tool for Operations Benefit/Cost (TOPS-BC). This spreadsheet-based tool is designed to assist practitioners in conducting B/C analysis by providing four key capabilities, including the following:
In addition to these capabilities, TOPS-BC also is intended to serve as a repository of relevant parameters and values appropriate for use in B/C analyses. Figure 1.1 shows the opening screen of TOPS-BC, which provides navigation to the capabilities within the support tool. This User’s Manual provides specific guidance on the proper use and setup of the TOPS-BC application. It is intended to support the Desk Reference document and contains many references to that publication.
Transportation planning activities and associated Federal planning requirements can be generally categorized into the following four stages:
The sketch planning capabilities (Capability 4 “Estimate Benefits and Conduct B/C Analysis”) within TOPS-BC are generally applicable for analyses in Stage 1 and partly Stage 2 for screening and estimating the order of magnitude of benefits. The more complex and detailed analysis required for program and project development in Stages 3 and 4 may warrant the application of a more robust analysis tool. TOPS-BC has the ability to help you screen and identify appropriate tools and methodologies for conducting a B/C analysis based on your analysis needs (Capability 2 “Research Available Analysis Methods and Tools”) and may recommend you apply more rigorous tools for more complex analyses.
Source: Federal Highway Administration.
Operations Strategies Covered
Together the Desk Reference and the TOPS-BC tool are intended to support the analysis of a wide range of available TSM&O strategies. These “strategies” include the direct application of technologies and infrastructure as physical roadside applications (e.g., deployment of freeway service patrol vehicles), as well as many harder-to-define, nonphysical strategies (e.g., interagency coordination). While it is not possible to comprehensively provide guidance on every type and variation in application of all the many TSM&O strategies (especially in light of the fact that new strategies and technologies are constantly emerging), the TSM&O strategies covered in the TOPS-BC tool and/or the Desk Reference are identified in Table 1-1. Section 3.0 of the Desk Reference document provides expanded discussion of these various strategies, as well as sub-strategies and variations in application within the general categories. Section 3.0 of the Desk Reference also identifies the typical benefits and impact measures associated with the deployment of the strategies.
The TOPS-BC application is designed to be intuitive and easy to use. This User’s Manual is intended to provide clarification on the proper setup and application of the tool. This User’s Manual assumes that you are minimally familiar with B/C analysis and the unique challenges of applying B/C analysis to TSM&O strategies. The Desk Reference may be used by practitioners unfamiliar with fundamental B/C concepts and terminology to learn more about the basics of B/C analysis for TSM&O strategies. This User’s Manual also assumes that you have a basic knowledge of spreadsheet navigation and operation.
The User’s Manual is divided into the following chapters that generally follow the major capabilities of the tool:
United States Department of Transportation - Federal Highway Administration