Life-Cycle Cost – Establish Value, Not Just Price

In general, life-cycle cost analysis compares the total cost of one financial option with one or more alternatives. Specifically, LCC enables structure owners and specifiers to evaluate the costs of competing coating options on the basis of both price and effectiveness.

The true cost for all candidate coatings, painting, galvanizing, or metalizing should include the direct costs for the initial coating application, subsequent maintenance costs, and the costs to the public for loss of use at the initial coating, and at the time of all future maintenance.

BS 5493 on Life-Cycle Cost

The British Standard addresses the comparative of cost of one coating option versus another in Appendix E.

Choosing the most economical defence against corrosion
The choice of the most economical defence against corrosion cannot be precise, because neither the timing nor the cost of future maintenance can be predicted accurately and rates of taxation change from time to time. Nevertheless, an overall economic appraisal should be made, for it may help to influence a decision when there is uncertainty regarding the choice of protective system or products that require a protective system.
[. . . ]
A quick comparison of systems can be made by comparing present first costs plus maintenance costs at present values in each case. (Access and disruption costs should be taken into account at this stage.)

The FHWA report RD-01-156 referred to earlier points out that disruption costs are to be included in the life-cycle cost analysis and will be significant: Life-cycle [cost] analysis estimates indirect costs to the user due to traffic delays and lost productivity at more than 10 times the direct cost of corrosion maintenance, repair, and rehabilitation.78

The value of these indirect costs, traffic delays, etc. may actually be incalculable but we know it is significant. Including these costs in the comparison of paint versus metalizing favors the coating with the longest possible service life - metalizing. And anyone who has sat in a long line of cars beside miles of a painting contractor’s orange traffic barrels appreciates the importance of using protective coatings with the longest possible maintenance interval.

Life-Cycle Cost Analysis

In the case of painting or metalizing structural steel, the life-cycle cost considers the sum of all costs for each of the coating options distributed over the surface area coated, and then distributes them over time, the service lives of the several coatings; ten years, twenty years, forty years, etc. It may be said that the competing costs are normalized as dollars, per square foot, per year. This is a well reasoned basis for comparing the alternatives and, presumably, the bridge owner will select the coating that will make the best use of taxpayers’ money.

Calculating Life-Cycle Cost

Here are five steps that gather and adjust the cost information for each coating and reduce that information to dollars per square foot per year of protection. This analysis should answer the question which option, painting or metalizing, is the best deal? (There is no news here for departments of transportation – they do this sort of analysis all day long - and we admit this is an over-simplified, unsophisticated LCC model.)

  1. Establish first cost for each coating option - shop or on-site application.
  2. Estimate when and how much future maintenance each coating will require.
  3. Estimate the costs of the future maintenance by adjusting today’s on-site costs to reflect the annual, compounded increase in prices due to inflation.
  4. Adjust, or discount the inflated future maintenance dollars to their present value. (This step may be explained as determining theoretical amount of money that, if invested today, would yield the amount of money needed to pay for the future coating maintenance at the time that work will be performed. That amount of money in today’s dollars is, at least theoretically, part of today’s spending decision. 79 80 )
  5. The total of the initial and future maintenance costs for each coating is divided by the number of square feet of steel coated and divided again by the expected service life for each coating yielding dollars, per square foot, per year of protection, or life-cycle cost.

Whatever coating option is selected, the owner knows that those are the dollars committed today for the initial coating, its maintenance, and associated costs. This is a systematic way of evaluating the options and making a reasoned decision.

LCC and the Bridge Owner’s Dilemma

Cost is the overriding consideration when selecting a protective coating and every bridge engineer knows that life-cycle cost is the correct way of comparing the coating types. Unfortunately, the owner’s budget may get in the way and the budget rather than the engineer may decide between sprayed-metal with its long service life and low life-cycle cost, and paint with its short service life and low first-cost.

This sort of budget control, coating selection by lowest first-cost, neglects cost’s performance component and ultimately will be reflected in more maintenance. The department of transportation officials who have to deal with that future maintenance would instead choose the coating with the longest possible maintenance interval - as would that driver sitting in the long line of cars on a sunny summer day next to the painting contractor’s orange traffic barrels.

Final Comments

Metalizing bridges is an effective and efficient use of construction and maintenance resources and taxpayers’ money.

There was a time not very long ago when paint promoters scoffed at the idea of metalizing structural steel as impractical – as too slow and too expensive. The truth is that this rationalization was in defense of painting and repainting while the scoffers knew all along that metalizing’s effectiveness was paint’s Achilles heel.

Metalizing is an important tool for bridge maintenance not for its price or ease of application; it is valuable for structure owners because of its long service life and potential for long-term savings.

77BS 5493, Appendix E, p. 94.
78 Corrosion Costs and Preventive Strategies in the United States, FHWA Publication No., FHWA-RD-01-156
79LCC analysis uses a theoretical tool called net present value to discount the future dollars – in our case, the future maintenance costs - to reflect today’s value. NPV may be thought of as the reverse of interest accumulating on a bank deposit. It determines a theoretical amount of money that, if invested today at a rate of return, would produce the funds needed to pay for the future maintenance. This whole exercise is strictly theoretical – we know bridge owners don’t have savings accounts that gain interest on invested money to pay for future work. Nevertheless, the future maintenance dollars are committed by today’s decision as surely as for the cost of the initial coating.
80The formula for determining NPV is FVn = P(1+r)n where -
FV = Future value of the maintenance coating, adjusted for inflation
P = Present value of the future cash expense.
r = Rate of return on invested dollars.
n = Number of years until maintenance is required.