Development of a Hot Mix Asphalt Location Cost Index for the Alabama Department of Transportation

Abstract

Asphalt is one of the most critical commodities for the U.S. infrastructure. It is used as a paving material on the majority of roadways across the country. In Alabama, this material is used in approximately 98% of all paved roads, consuming about 40% of the Alabama Department of Transportation (ALDOT) annual construction budget. Because of the considerable importance of this material, any improvements in ALDOT’s hot mix asphalt (HMA) cost-estimating procedures are expected to be reflected in better budget control and a more effective use of ALDOT’s limited available resources. This paper presents a HMA Location Cost Index (LCI) intended to contribute to ALDOT’s efforts toward the improvement of its cost-estimating practices. This is an annual LCI aimed to quantify changes in HMA prices among three geographic regions in Alabama: north, central, and south regions. The development of the LCI involved the use of advanced data collection, cleaning, and processing techniques to analyze historical bid data from 3661 projects awarded by ALDOT between 2006 and 2016. The potential contribution of the proposed LCI to improving ALDOT’s current cost-estimating system is demonstrated via statistical significance testing and through the application of an innovative moving-window cross-validation algorithm previously developed by the authors.