Large ROI from subsurface utility engineering (SUE) for highway construction projects

Return on investment (ROI) studies of subsurface engineering utility engineering (SUE) surveys applied to highway construction projects conducted since the late 1990s have consistently revealed a large return-on-investment from conducting SUE surveys as part of highway construction projects.

One of the first in 1999 by Purdue University and sponsored by the US DOT Federal Highway Administration (FHWA) identified 21 categories of cost savings that could result from including a subsurface utility engineering (SUE) survey in construction projects. Only some of these could be quantified and it was estimated that the qualitative benefits exceeded those that could be quantified. It was estimated that SUE surveys resulted in a construction savings of at least 1.9 percent over the traditional approach of relying on as-builts and (above-ground) site surveys for identifying underground utilities.  Using the national expenditure in 1998 of $51 billion for highway construction (FHWA), it was calculated that requiring SUE on road construction projects could result in a national savings of at least $1 billion per year.

A subsequent reanalysis of the same Purdue data estimated that the ROI was $12.23 for every $1 spent on SUE. Furthermore the cost of conducting a SUE survey was estimated at 1.39% of total project costs. In 2007 a study for PennDOT and USDOT found an ROI of 22.21 : 1. 

The most recent ROI analysis sponsored by PennDOT differed from previous analyses by including both SUE and non-SUE projects. It calculated an ROI of 11.39 : 1. The largest contributor to the cost savings attributed to SUE was a 40.33% reduction in utility relocation costs. Utility relocations were avoided or reduced by providing engineers/designers with accurate underground information in the early stages of design. The second largest savings was 29.46% in reduced construction and design costs. SUE enables designers to design efficiently and accurately with reliable information, so that design time can be saved and unnecessary construction work can be avoided or reduced. The cost of conducting a SUE survey was estimated to be 1.65% of project cost.  

These ROI studies show that SUE can provide accurate utility information with important project benefits at reasonable cost.

Year	ROI	Cost of SUE (% of project cost)	Description	Sponsoring agency	Source
2012	11.39:1	1.65%	Study of 22 SUE and 8 non-SUE projects	PennDOT	Yeun J. Jung, Evaluation of subsurface utility engineering for highway projects: Benefit–cost analysis, pages 111-122 in Tunnelling and Underground Space Technology Volume 27, Issue 1 Pages 1-168 (January 2012)
2012	16:1		Study of one SUE project	Region of Lombardy
2007	22.21:1	0.6 %	Study of 10 SUE projects	PennDOT/USDOT	SUBSURFACE UTILITY ENGINEERING MANUAL PennDOT/MAUTC Partnership, Work Order No. 8 Research Agreement No. 510401 FINAL REPORT August 20, 2007 By S. K. Sinha, H. R. Thomas, M. C. Wang and Y. J. Jung
2004	3.41:1		Study of nine SUE projects	Ontario Sewer and Watermain Contractors Association	Osman, Hesham, El-Diraby, Tamer E., 2005. Subsurface Utility Engineering in Ontario: Challenges & Opportunities. A Report to the Ontario Sewer & Water main Contractors Association, October 2005.
2004	12.23:1	1.39%	Reanalysis of 71 SUE projects	ASCE based on USDOT data	Jeong, H.S., Abraham, D.M., Lew, J.J., 2004. Evaluation of an emerging market in subsurface utility engineering. ASCE, Journal of Construction Engineering and Management 130 (2).
1999	4.62:1	0.5 %	Study of 71 SUE projects	USDOT	Lew, J.J., 2000. Cost Savings on Highway Projects utilizing Subsurface Utility Engineering. Federal Highway Administration, Washington, DC.

Pennsylvania Department of Transportation 2012

A definitive study of twenty-two projects utilizing subsurface utility engineering (SUE) and eight non-SUE projects from Pennsylvania Department of Transportation (PennDOT) districts has revealed that $11.39 can be saved for every $1 spent on SUE. The cost of conducting a SUE survey was estimated at 1.65% of total project cost. Eleven direct and indirect costs where SUE would lead to savings were considered in the analysis; utility relocation cost, utility damage cost, emergency restoration cost, traffic delay cost , business impact cost, user service cost, environmental impact cost, information gathering and verification cost, legal and litigation cost, efficient utility design and construction, and other utility related costs and benefits.

On the expense side two kinds of costs are involved in conducting a SUE survey. One is the use of geophysical techniques such as EMI and GPR to identify the location of underground utilities and other objects. The other is potholing (using safe excavation techniques) to confirm the location of the utilities and objects identified. In this study for the projects utilizing SUE, costs were obtained directly from project accounting. For the projects that did not use SUE, costs are estimated from interviews, historical data, and individual project studies.

For the twenty-two projects where a SUE survey was conducted, all underground utilities and other objects were located to ASCE 38-02 quality level A (potholing) or B (EMI and GPR). For the eight projects utilized traditional methods, the location of underground networks was estimated to ASCE quality levels C (site visit) and D (as-builts).

Previous ROI studies of SUE only used projects where SUE surveys were performed to quantify the cost savings of SUE. In this study, non-SUE projects were used to determine the cost savings of SUE because direct costs incurred by problems that would have been avoided by SUE can be considered as SUE benefits. The results of the study revealed that $11.39 can be saved for every $1 spent on SUE on road projects.

The top cost savings that were found are as follows:

1. 40.33% reduction in project relocation cost by providing accurate underground information in the early stages of design
2. 29.46% reduction in construction and design costs - SUE enables designers to design efficiently and accurately with reliable information, so that design time can be saved and unnecessary construction work can be avoided or reduced.
3. 9.59% reduction in redesign costs
4. 9.08% reduction in delay costs due to relocation
5. 6.81% reduction in delay costs caused by emergencies
6. 1.41% reduction in delay costs caused by unexpected utilities
7. 1.41% reduction in information gathering and verification cost
8. 1.04% reduction in restoration cost

It was concluded that SUE can provide accurate utility information with important project benefits at reasonable cost. A ratio of 1.65% was determined as the ratio of SUE cost to total project cost. The study also showed that the greater the complexity level of buried utilities, the higher the SUE benefits.

Region of Lombardy, Italy 2012

A pilot project was undertaken to map all underground infrastructure on the site of Expo Milano in preparation for the 2015 event in Milan. All underground infrastructure in the project area (230 000 square meters) including electric power, water, sewers, gas, district heating, street lighting, and telecommunication were mapped by combining historical records and IDS GeoRadar ground penetrating radar (GPR) technology. A key objective of the project was an economic analysis of the costs and benefits of applying GPR to detect the location of underground infrastructure. The analysis estimated that the return on investment is about €16 for every euro invested in improving the reliability of information about underground infrastructure. The analysis emphasized that there were other important, but non-quantifiable, benefits including better safety for both workers and the public as well as fewer traffic disruptions.

Pennsylvania Department of Transportation 2007

This study conducted by Penn State and sponsored by the Pennsylvania Department of Transportation PennDOT) and the U.S. DoT, Federal Highway Administration (FHWA) performed a benefit-cost analysis of 10 SUE highway projects from different PennDOT districts. The case studies were investigated by conducting interviews with utility engineers, SUE consultants, and project engineers. Site visits, analyses of project data, and detailed individual studies of the 10 SUE highway projects were also performed for this research. These projects were selected randomly from a list of projects that utilized SUE quality level A and/or B. The projects investigated in this study involved road construction and bridge replacement in urban, suburban, and rural areas. PennDOT project managers and engineers, utility owners, SUE consultants, designers, and contractors were interviewed. A savings of $22.21 for every $1.00 spent on SUE was estimated based on the analysis of the 10 projects. These projects had a total project cost (including both design and construction cost) in excess of $120 million. The costs of conducting SUE (to ASCE QL A or B) on these 10 projects were less than 0.6 percent of the total project costs. The benefit was cost savings of 15% over traditional approach relying on ASCE QL C and D utility data.

Project costs ranged from $2 million to $63 million. The quality of the utility records for these projects was poor or fair. The cost of conducting SUE ranged from $20,000 to $141,000 for these projects. The ratio of SUE cost to the total project cost ranged from 0.22% to 2.8%, with an average of 1.15%. SUE resulted in cost savings ranging from $65,000 to $4.5 million. The benefit-cost ratio ranged from 3.25 to 33.93, with an average of 22.21. In other words $22.21 can be saved for every $1 spent on SUE. The costs of conducting SUE on these 10 projects were less than 0.6 percent of the total project cost. Furthermore the analysis revealed a strong relationship between benefit of SUE and utility complexity. The benefit derived from performing a SUE survey increases as the underground utility complexity increases.

Ontario Sewer and Watermain Contractors Association 2004

In 2004 in Canada, the Ontario Sewer and Watermain Contractors Association commissioned the University of Toronto to investigate the practice of using SUE on large infrastructure projects in Ontario. Osman and El-Diraby (2005) analyzed nine SUE projects in Ontario, conducting interviews and project case studies. They identified 11 cost saving items from the 21 cost savings items used by 1999 U.S. DOT Purdue Study. The results of Ontario Study showed that the average return-on-investment (ROI) for SUE Osman and El-Diraby (2005) analyzed nine SUE projects in Ontario, conducting interviews and project case studies. They identified 11 cost saving items from the 21 cost savings items used by Purdue Study. The results of Ontario Study showed that the average return-on-investment (ROI) for SUE ranged from $1.98 to $6.59 with an average of $3.41 for each $1 spent.

U.S. DOT Federal Highway Administration 1999

In a study conducted by Purdue University Department of Building Construction Management for the U.S. DOT Federal Highway Administration, a total of seventy-one projects (71) from Virginia, North Carolina, Texas, and Ohio were studied. The total construction costs of these road projects were in excess of one billion dollars and involved interstate, arterial, and collector Roads in urban, suburban, and rural settings. DOT project managers, utility owners, constructors, and designers were interviewed.

Based on Interviews and surveys of DOTs, utility owners, SUE consultants, and contractors 21 categories of cost savings were defined to quantify the savings in terms of time, cost, and risk management. The 21 categories of cost savings identified in the study were as follows: reduction in unforeseen utility conflicts and relocations; reduction in project delays due to utility relocates; reduction in claims and change orders; reduction in delays due to utility cuts; reduction in project contingency fees; lower project bids; reduction in costs caused by conflict redesign; reduction in the cost of project design; reduction in travel delays during construction to the motoring public; improvement in contractor productivity and quality; reduction in utility companies' cost to repair damaged facilities; minimization of utility customers' loss of service; minimization of damage to existing pavements; minimization of traffic disruption, increasing DOT public credibility; improvement in working relationships between DOT and utilities; increased efficiency of surveying activities by elimination of duplicate surveys; facilitation of electronic mapping accuracy; minimization of the chance of environmental damage; inducement of savings in risk management and insurance; introduction of the concept of a comprehensive SUE process; and reduction in right-of-way acquisition costs.

The reduction in risk for all of these potential benefits by conducting a SUE survey has been difficult to quantify. Benefits have been categorized as exact costs that can be quantified in a precise manner, for example the cost of potholing or the cost to eliminate utility conflicts; estimated costs that are difficult to quantify, but can be calculated by studying projects in detail, interviewing the personnel involved in the project, and applying historical cost data; qualitative costs that cannot be estimated due to a lack of data, for example, for example, avoided impacts on nearby homes and businesses.

The analysis revealed savings ranging from $0.34 to $206.67 for every dollar invested in SUE with an average of $4.62. The cost of conducting SUE surveys on these projects was less than 0.5 percent of the total construction costs. SUE surveys resulted in a construction savings of 1.9 percent over the traditional approach to underground utilities that relied on ASCE QL C and D. Using this ratio and a national expenditure in 1998 of $51 billion for highway construction (FHWA), requiring SUE on road projects could result in a minimum national savings of approximately $1 billion per year.

The qualitative savings were non-measurable, but it is clear that those savings are also significant and may be many times more valuable than the quantifiable savings. The study concluded that SUE is a viable, cost effective practice that reduced the risks associated with existing subsurface utilities resulted in significant quantifiable and qualitative benefits.

2004 American Society of Civil Engineers

A subsequent reanalysis of the data from the 1999 USDOT Purdue Study found that the estimated benefit of conducting a SUE survey was a cost savings of $12.23 for every $1 spent on SUE. The largest contributors to the cost savings derived from SUE were as follows:

1. 37.1% reduced number of utility relocations
2. 19.3% reduced claims and change orders
3. 11.6% reduced accidents and injuries
4. 9.6% reduced project delays
5. 3.5% reduced right-of-way acquisition costs
6. 3.3% savings in risk management and insurance
7. 15.5% other

The analysis concluded that the average ratio of the cost of SUE to total project cost ranged from 0.02% to 10.76% with an average of 1.39%.

Conclusion

These ROI studies show that SUE can provide accurate utility information with important project benefits at a reasonable cost. While SUE surveys have been shown to reduce the risk of budget overruns and project delays for construction projects, by themselves they are not a silver bullet for reducing the number of incidents of underground utility damage. As Heathrow International Airport and Japan have shown a comprehensive program involving policies, regulations, and construction practices is required.