Cost Effectiveness of Life-Cycle Process in Buying Transit Vehicles Questionable
RCED-83-184
Published: Sep 01, 1983. Publicly Released: Sep 01, 1983.
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Highlights
GAO discussed the Urban Mass Transportation Administration's (UMTA) procedure that requires federally funded transit systems to use life-cycle costs when buying transit vehicles.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of Transportation | The Secretary of Transportation should direct the Administrator, UMTA, to develop research and demonstration projects with selected transit systems to document the costs associated with using the life-cycle cost process to buy transit vehicles. |
In December 1984, the Department of Transportation (DOT) issued a report analyzing the experiences of 25 transit systems that used life-cycle costs when purchasing buses. The report contains conclusions about the purchases and changes that would improve the process.
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| Department of Transportation | The Secretary of Transportation should direct the Administrator, UMTA, to develop research and demonstration projects with selected transit systems to keep operating and maintenance cost records for the vehicles bought to determine the validity of the cost projections used in making the contract award. |
DOT has initiated a project to collect maintenance and operating cost records for 30 articulated buses. The project is expected to be completed in February 1988. The report concluded that the status of development of transit operating databases is inadequate to support widespread use of life-cycle costing.
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| Department of Transportation | The Secretary of Transportation should direct the Administrator, UMTA, to develop research and demonstration projects with selected transit systems to identify ways to overcome the obstacles to using the life-cycle cost procurement process by addressing the problems of the availability of adequate data, selection of verifiable cost factors, failure to consider the present value of the projected costs, development of fair evaluation processes, and expertise needed to adequately evaluate cost projections. |
UMTA was not able to develop projects which would identify ways to overcome the obstacles to using the life-cycle cost procurement process.
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Topics
Cost effectiveness analysisFederal fundsLife cycle costsMass transitMotor vehiclesProcurement policyProjectionsProcurementMaintenance costsRolling stock