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Life Cycle Cost Considerations for Sewer Pipe

Philip R. Snyder with the technical assistance of Richard D. Turkopp, P.E.
Source: CE News
August, 2001

Two forces are shifting the way we must view our water and sewer lines. The first is increased regulation over the quality of our water and effluent. The second is the growing trend toward outsourcing not only the construction, but the operation of utilities. While this outsourcing trend is growing slowly in the public sector, it has been the standard in private industry for years.

Agencies that plan to operate their own facilities must adopt a new mindset, which gives equal consideration to the operation, maintenance, repair, and replacement expenses (O, M, R, and R) along with the installed cost. Long-term planning is the order of the day, and life cycle cost analysis is being adopted across the nation. Taxing authorities must emulate the approach a private sector operator would take and be much more aware of the long-term costs to promote the best interests of their taxpayers by stretching their precious and often scarce dollars.

Let's look at these factors and determine how they must affect your design decisions and why installed cost alone is losing favor as a determinant while life cycle cost is emerging as the primary criterion in bid selection.

To put this in context, here's a scenario: Your engineering assignment is to construct two, virtually identical, major sewer line extensions for a medium-sized city. One will be structured as a design-bid-build (DBB) project and the other as a design-build-operate-and-maintain (DBOM). Will your specifications and evaluations be the same?

A dilemma that municipalities and their consultants face regularly is whether to take a long-term or a short-term view. The traditional way of handling water and sewer installations or repairs has been using DBB. In such cases, the contractor determines the least expensive way to meet the specifications to win the bid. After construction, the city or county takes over. Generally, the system functions well until 10, 20, or more years later when the taxpayers face the consequences of the short-term thinking that is encouraged by the DBB process. At this time, practically no one associated with the original project is still around.

The future of water or sewer systems
While DBOM represents only a small percentage of total projects, evidence of a gradual change from DBB to DBOM was presented in a paper from the Reason Public Policy Institute of Los Angeles (www.rppi.org/index.html). Policy study No. 272, issued in September 2000, pointed out the fact that many cities own and operate their water and wastewater facilities. While most outsource only design, engineering, and construction of new installations, there is a marked increase in the number of municipalities that also contract for operation and maintenance.

The policy study also cited a survey in which public officials indicated that the important drivers of water and sewer improvements are growth in demand, the age of existing installations, and environmental regulations.

The policy study points out that over the last two decades, through the Clean Water Act and the Safe Drinking Water Act, standards governing the quality of drinking water and cleanliness of effluent discharged into waterways have become ever more stringent. To meet these increasing standards, many local water and wastewater systems require improved technologies and upgraded infrastructure. Estimates of the capital investments needed to bring all U.S. water and sewer systems into compliance is as high as $1 trillion, most of it coming from local taxpayers or private investors.

The factors of change
Rapid population growth, urban sprawl, increased concern for the environment, and government regulations all affect the way we must manage our sewer and water systems. These influences, in turn, make economic factors more important than ever before. Installation, maintenance, rehabilitation, and long-term integrity are becoming more important as standards are raised. The old decision-making processes are being forced aside by life cycle cost evaluation.

But is making this switch simple? Is the math straightforward? Are the records of previous performance available to facilitate historical comparisons? You know the answer is no or, in the best case, only to a limited extent.

EPA funds a study of life cycle costs
It should not come as a surprise that the U.S. Environmental Protection Agency (EPA) Office of Wastewater has given a $100,000 grant to study life cycle costs of sewer mains. The research will be conducted at the University of Houston with oversight by a steering committee appointed by the Fiberglass Tank & Pipe Institute, based in Houston. The research projects will study infiltration leak-rates for large-diameter sewer main pipe and manhole joints, and resulting life cycle costs.

Estimating sewer pipe life cycle cost
The most frequently used method to compare product alternatives for new sewers and rehabilitation is an installed cost comparison. Results based on such a restricted focus may be misleading since the installed cost evaluation ignores many other costs that may occur during the lifetime of the sewer. A true cost comparison must also consider the costs incurred (or avoided) throughout the design life of the sewer. When evaluated by a life cycle cost comparison, which assesses the sum of all costs, pipes with the longest projected service life are generally the winner.

During the study period, the life cycle cost of any item includes all of the costs required to do the following: purchase the item, install it, operate it, maintain and repair it, and replace it (if necessary). Proper life cycle costs analyses should be made by discounting future costs to present value using the time value of money concepts. The following example provides a clear description of how to calculate life cycle cost comparisons.

Example calculation of life cycle cost comparison
Consider a 100-year evaluation for construction of a new, open cut, 48-inch sewer that will be 5,000 feet long. Product A is specified; it has a 50-year life, a 100-inch-gallon leakage rate (meaning one gallon of infiltration/exfiltration per inch diameter of pipe per mile length per day), and a Manning's "n" of 0.013. Product B is an alternative; it has a 100-year life, is leak-free, and has a Manning¹s "n" of 0.009. Inflation is assumed at 3 percent, and the cost of money is taken at 8 percent.

The assumed O, M, R, and R differences between products A and B are described as follows:

  • Product A must be rehabilitated after 50 years at a present cost of $200 per foot;
  • 36-inch relief line at a present cost of $180 per foot needed in 40 years for product A and in 60 years for product B;
  • Product A causes street and utility repairs at years 15, 30, and 40 at a present cost of $100,000 each; and
  • Product A requires extra inspection and cleaning at a present cost of $10 per foot in years 10 and 30.
Life cycle cost comparison 
Cost Component
Product A
Product B
Installed cost
$270.00
$300.00
O, M, R, & R items present value:
Rehabilitation
$18.69
0
36-inch relief line $27.03 $10.47
$27.03
$10.47
Street & utility repairs $16.65 0
$16.65
0
Extra inspection & cleaning $8.64 0
$8.64
0
Total life cycle cost (comparative)
$341.01
$310.47  

Based on installed costs only, product A is 10 percent cheaper. However, when the present value of differential, long-term costs is also considered, product B is found to be 10 percent cheaper – without even considering many other potential savings such as lower treatment costs, possible EPA fines, wastewater treatment plant expansions, et cetera.

As this example demonstrates, the product with the lowest installed cost may not have the lowest life cycle cost. A true cost comparison can only be obtained by calculating the present value of differential costs incurred throughout the sewer design life.

Pipe features that affect life cycle cost
As can be seen in the above example, many pipe characteristics impact sewer O, M, R, and R costs such as corrosion resistance to the interior and exterior environment, leak-tightness, and hydraulic characteristics. These features, along with their life expectancy, differ by material type. For example, corrosion resistance, which describes how pipe is affected by ground chemicals or sewer acids, can vary from a few years to thousands of years. As for leak-tightness, many pipe systems have a great deal of trouble meeting initial standards, while others routinely test 100 percent leak-free.

Maintenance is another factor that varies between different materials. Some pipes have a Manning's "n" of 0.009 when they are new, but after several years of sewer service and slime development, the coefficient increases to typically 0.011. Other pipe materials initially may have a Manning's "n" of 0.013 when new and 0.018 or higher after a period of use. Additionally, some systems require extensive and repeated cleaning or other activities to maintain flow capacity at a minimally tolerable level for the short-term.

Superior, long-term pipe performance avoids or delays many future costs. For example, inherent corrosion resistance often provides an extended pipe life resulting in the following benefits:

  • No liners or coatings to inspect, maintain, refurbish, or replace;
  • No rehabilitation costs because of corrosion deterioration;
  • Hydraulic characteristics are substantially unchanged with time, preserving the sewer flow capacity and thereby delaying relief line(s) construction costs; and
  • Costs for premature replacement are avoided completely.

Similarly, leak-free performance reduces infiltration and provides many cost-saving benefits, including the following:

  • Reduced flows to wastewater treatment plants, resulting in lower treatment costs, fewer EPA fines for bypassing treatment in high flows, and delayed expenditures for plant expansions;
  • Elimination of soil migration into the sewer, which causes structural undermining of streets and other utilities as well as blockages that require excessive cleaning;
  • Minimization of wet-weather overflows and associated costs for fines, clean-up, safety and disruption;
  • Maximization of flow capacity, thereby delaying relief line construction costs.

Superior hydraulics result in a higher flow capacity generating additional long-term cost savings. Some of these benefits include delayed relief line construction costs, higher flow velocities resulting in fewer deposits and reduced cleaning needs, and, sometimes, use of a smaller diameter pipe.

There is no single place where you can find all the information you need to compare the life cycle cost of installations with various kinds of pipe. But there are numerous resources for helpful information. Many pipe manufacturers have excellent literature and Web sites that provide information on their performance. Some of these are more concise and to-the-point than the various pipe associations. But beware of comparing performance characteristics, such as those derived by an ASTM method with those posted by a manufacturer, which may rely on best-case results and be colored by marketing hyperbole.

One difficulty in these analyses is that the design engineer may find it impossible to extrapolate laboratory test data into projections under field conditions. Some of the factors that affect the longevity of sewer pipe are the following: temperature, slope, surround, and length of flow (the more time the sewage spends in the pipe, the more septic it becomes), and turbulence. While lab results indicate useful information about different piping products, it is difficult to predict how materials will react to a particular environment. Therefore, experience is highly valuable in forecasting product performance.

Local experience is also a highly reliable indicator of future performance. Even if comprehensive long-term records are not available, first-hand knowledge regarding life expectancy, leakage, flow, maintenance, and other parameters, is immensely valuable.

Conclusion
With so much to learn about life cycle cost considerations for sewer lines, one message is clear – picking the low bidder isn't going to cut it any longer. If you're not thinking in terms of life cycle cost, you're behind the curve.

Once public works engineers and the politicians involved in making decisions about infrastructure realize the significance of the pipe features discussed in this article, maybe more decisions will be made based on life cycle costs. When this happens, public representatives will truly make decisions with the taxpayers' interests in mind.

By Philip R. Snyder with the technical assistance of Richard D. Turkopp, P.E.
Source: CE News, August 2001

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