As state DOTs and local governments plan road maintenance and construction, pending external influences such as federal funds, asphalt and concrete manufacturers wage a heated battle to dominate the paving market.
Until 2008, asphalt captured roughly 94% of all pavements in the U.S. market. During this time, asphalt enjoyed a lower initial bid and a life-cycle paving cost advantage over concrete, according to a Portland Cement Association (PCA) analysis using Wisconsin DOT's paving software. But not anymore, says Ed Sullivan, PCA's chief economist.
Increasing oil prices and changes in the oil-refining process have forced asphalt prices up, says Sullivan, thereby leveling the playing field for cement/concrete contractors.
Since 2003, liquid asphalt prices have increased by more than 200% and concrete only 37% — yet some state DOTs' procurement practices hinder “free market” economics that favor concrete, says Sullivan. He blames outdated policies for slowing concrete's penetration into the paving market and costing taxpayers billions of dollars. These include policies that:
- Don't allow bids with alternative materials
- Include asphalt cost escalator provisions (established during the oil embargo of the 1970s, allowing contractors to adjust their construction price based on fluctuation in liquid asphalt cost after the bid is won)
- Lack equivalent paving design methods that can compare current asphalt and concrete mixtures. (The American Association of State Highway and Transportation Officials responded to the need by adopting a mechanistic empirical pavement design guide in 2004: MEPDG, referred to as DARWin-ME.)
Asphalt industry experts also blame outdated bidding practices for hindering what they consider one the largest growth opportunities in paving: green roads. In his Software Advice blog “Green Roads Construction: Are contractors our road block?” Enterprise Resource Planning Analyst Derek Singleton argues that cost-plus pricing agreements, which pay contractors for the cost of labor plus the cost of asphalt, encourage excess use of asphalt and man-hours.
He says the contracts ultimately cost taxpayers more and discourage environmentally friendly road construction methods such as hot and cold in-place recycling and full-depth reclamation — which reuse existing asphalt for repair rather than replacing it with new material.
Singleton concludes that performance-based bidding increases use of recycling techniques, thus reducing the cost of road construction. He points to North Carolina, where contractors pay for the asphalt, but can use any method to meet engineers' standards. The state has the lowest cost of road construction in North America — and the highest amount of hot in-place recycling.The life-cycle analysis debate
PCA's Sullivan, however, argues that concrete is still the most cost-effective choice. He cites “flawed” life-cycle cost analysis calculations that use the same discount rate for expected concrete and asphalt cost increases — even though concrete costs have risen slower than asphalt — thereby underestimating concrete's long-term cost advantage.
The National Asphalt Pavement Association (NAPA) disagrees, taking issue with supporting research that was funded by PCA and other concrete associations through Massachusetts Institute of Technology's (MIT) Concrete Sustainability Hub.
NAPA has published Special Report 203, Material-Specific Discount Rate: Inappropriate for Life-Cycle Cost Analysis, which supports current DOT and Federal Highway Administration life-cycle cost procedures. The report attempts to discredit MIT's proposed material-specific discount rate that is based on historical price data and varying inflation rates.
NAPA fears the research could influence federal legislation. For instance, in February the House passed the Civilian Property Realignment Act (H.R. 1734), which includes an amendment to require life-cycle cost analysis of at least 50 years on all federal building projects costing more than $1 million. The bill could open the door for mandated life-cycle cost analysis procedures — possibly including a material-specific discount rate — on all publicly funded projects, including roads and bridges.
“[We oppose] asking Congress to mandate a life-cycle cost procedure which is not accepted by economists and which tilts the playing field in favor of one construction material,” says Mike Acott, NAPA president. His association calls the material-specific discount rate a “computational work-around” that skews life-cycle cost analyses for construction materials, including asphalt, concrete, steel, wood, and plastics.
Ultimately, both camps agree that sustainability is an economically responsible choice. Ed Sullivan includes green building in his list of growth areas for the concrete industry. He predicts green building practices such as using recycled materials “will continue to grow not only because it's the right thing to do, but because it makes economic sense.”
Likewise, “cost has been the major driver of adopting green techniques” in the asphalt industry, according to Jon Epps PhD, PE, executive associate director of the Texas Transportation Institute.
Epps encourages looking at the “triple bottom line” of economic, social, and environmental impacts to determine the best paving solutions — a message that could ultimately save our infrastructure, regardless of the paving materials we choose.