28 TRNews, January–February 1986

RESEARCH PAYS OFF

Another Day—Another $20,000 of Savings RealizedFrom Kansas DOT Research and Development Studies

CARL F. CRUMPTON

Documented 1-year research savingsby the Kansas Department of Trans-portation exceed 1-year research costsby some $7.5 million, representing asavings of more than $20,500 dollarsper day and more than $1,025 dollarsper day for each person currently in thedepartment's Research Unit—and thesavings are expected to continue torecur year after year.

In the stream of human activity, it is wiseto pause now and then for reflection and

Carl F. Crumpton is Engineer of Research,Kansas Department of Transportation.

evaluation. Where have we been? Whathas been accomplished? Was it worth-while? Has it paid off and, if so, howwell?

While completing studies and writingreports, researchers begin to contem-plate new or different areas for study.Frequently, neither time nor effort isexpended to document how the earlierstudies have been used and whether thework has paid off. In addition, it iscommon for the everyday users ofproducts or processes to question thevalue of ongoing research, not recog-nizing that essentially all present prac-tices are the results of earlier research.

Bituminous recycling saves millions forKansas DOT. Recycle mix picked upwith a windrow elevator and relaid witha bituminous paver.

TRNews, January–February 1986 29

Research Evaluation

In late spring 1984, the Kansas De-partment of Transportation's Office ofthe Inspector General began an evalua-tion of the department's Research Unit(1). [The report of the evaluator, R.Jordan Seitz, was included in NCHRPSynthesis of Highway Practice 113 asAppendix B (2).] Seitz contacted manyprofessionals from Kansas DOT, thesurrounding states, the Federal High-way Administration, the TransportationResearch Board, and other organiza-tions. He interviewed Kansas DOT re-searchers, studied their reports andpublications, visited field-study sites,and reviewed letters of commendationand letters or records of telephone callsrequesting copies of reports or addi-tional information.

Four Successes

It has been estimated that only about 13percent of industrial research projectsever produce profits (3). And it shouldbe noted that these projects must besufficiently profitable to carry all theother research studies that do not com-pletely pay off, even though the com-mercial failures usually were technicalsuccesses.

Seitz made financial calculations forfour studies, finding that in only 1 yearthe studies had produced a savings of

more than $8.3 million. The four stud-ies (technically, these were develop-ment studies) chosen by Seitz forevaluation involved snowplow blades,pavement marking, rebar insertion, andasphalt recycling.

In 1966—1967, Kansas conducted acost-effectiveness study of standardsteel snowplow blades then being usedand other, more expensive blades. Car-bide insert blades were the most expen-sive but were shown by the study to bethe most cost-effective of those tested.The study results were implementedimmediately, and since that time car-bide insert blades have been used. Itwas found that in fiscal year 1983 thepurchase of carbide-tipped blades ef-fected a savings of $146,400 for that 1year alone. The cost of the originalstudy had been less than $5,000 in stateresearch funds.

In 1967 the Kansas DOT initiated astudy on pavement marking (paint stripesand glass beads), which eventually

cost almost $20,000 in Federal High-way Administration HPR funds. Theresults of that study were fully imple-mented by 1970. Savings during fiscalyear 1982 alone were calculated to be$750,000.

A concrete girder, rebar insertionstudy was initiated in 1976, at a totalcost of nearly $100,000 in HPR fundsfor research, development, and imple-mentation. Seitz calculated the savingsthrough 1984 to be $8,910,504. Inas-much as savings through 1983 had beenshown to be $4,500,000 (4), the 1-year(1984) savings for this study was$4,410,504.

Seitz also cited $3 million in savingsfor bituminous recycling work beingdone in 1984. This savings was realizedby utilizing the results of findingsthrough the Federal Highway Admini-stration HPR technology-sharing proc-ess. Savings from hot recycling are es-timated to average $8 million for 1985and future years.

30 TRNews, January–February 1986

Cooperation From Many

The pavement marking study and thesnowplow blade study were conductedin conjunction with maintenance, mate-rials, and district forces responsible forthose operations. The rebar insertionstudy was conducted with close coop-eration among design, maintenance,materials, industry, district, and, attimes, contractor personnel. The recy-cling work was completed with materi-als, construction, district, and contractorpersonnel involvement. Obviously,management and fiscal support wasnecessary for all of the projects. Threeof the studies involved federal fundsunder the HPR Program.

Benefits Versus Costs

The calculated savings for 1 year(albeit a different base year in somecases) was $8,306,904. Kansas DOT

research costs for fiscal year 1984were $818,511; therefore the benefit-cost ratio is 10:1, based on the 1-yearsavings resulting from only four stud-ies. Kansas HPR research expendituresfor fiscal year 1984 were $262,676; 1-year savings from the three HPR stud-ies were $8,160,504. Hence, the bene-fit-cost ratio is 31:1 for HPR-fundedresearch activities during 1 year.

The 1-year savings of $8,306,904 isalmost equal to the total amount($8,373,476) used for the conduct ofresearch by Kansas DOT during the 21fiscal years from 1963 through 1983.Thus, 1 year of savings realized throughresearch and development financednearly 21 years of research. The 1-yearsavings averages out to about $415,000per person currently employed in theResearch Unit. If the total research ex-penditures for fiscal year 1984 are de-ducted from the savings, the result is$7,488,393 savings profit, which resultsin an average of $1,025 saved each day

of the year for each person currently inthe research unit.

Other benefit-cost ratios can be cited.For instance, the $3 million in savingsfrom recycling in Kansas in 1984 wasmade possible by implementing workdone by others through the FHWAtechnology transfer and implementationprogram. The expenditures by Kansasfor technology transfer and implemen-tation projects during fiscal year 1984totaled $164,987. Comparing the sav-ings for 1 year with the expenditures for1 year results in a benefit-cost ratio of18:1. Because less than one-half of theexpense was used for evaluating theearlier recycling projects, the ratio iscloser to 36:1.

The 1-year savings realized from therebar insertion study totaled$4,410,504, providing a benefit-costratio of 44:1 when compared with thestudy's research and development costsof $100,000. If the $100,000 in studycosts are compared with the total cal-culated savings of $8,910,504, thebenefit-cost ratio is 89:1. The savingshave continued to accrue.

The pavement marking study resultedin a 1-year savings of $750,000. Thetotal cost of the study was $20,000;thus, the benefit-cost ratio is 37.5:1.Savings have occurred every year since1969.

The snowplow blade study resultedin a savings of $146,400 in the 1 yearcited by Seitz. Taking into account the$5,000 expended on the study, thebenefit-cost ratio is 29:1.

Hence, no matter what method ofcalculation is used, a minimum of $10is saved for every $1 spent on KansasDOT research each year. [A 71 to 104percent return per year on R&D in-vestment has been called "real goldeneggs" (5). It is suggested that a 1,000percent yearly return represents dia-mond-studded golden eggs.]

TRNews, January–February 1986 31

For fiscal years 1981 and 1982, Kan-sas was reported to be the fourth high-est loser on federal grants (6). For everydollar that comes back to the state,Kansas sends $1.28 to $1.29 in taxes tothe federal government; that is, a 0.78to 1 grant-to-taxes benefit-cost ratio.The state-federal highway researchprogram in Kansas, with a benefit-to-cost ratio of more than 10:1, is propor-tionally much more cost-effective toKansas. Furthermore, similar to taxes,the savings recur year after year.

Acknowledgments

The author wishes to express apprecia-tion to the 20 staff members, profes-sional

and technical, in the Kansas DOT Re-search Unit who participated in thestudies. Many others also took part buthave since left the unit; their efforts arealso appreciated. Gratitude is also ex-pressed to staff members of the FederalHighway Administration; much of thework and savings discussed here wouldnot have been accomplished withouttheir aid. The interactions with re-searchers from other states, the FHWA,the TRB staff, and other organizationshave been most helpful in the conductof the studies. Kansas DOT manage-ment was responsible for making thedecisions to implement the work. Theoperations, design, and planning divi-sions personnel in the districts, the labs,and headquarters

must be credited for seeing that theproper design, materials, and methodswere used correctly to allow the re-search to pay off. Thanks are especiallydue to R. Jordan Seitz for his persis-tence in conducting the evaluation ofthe Research Unit.

This article is dedicated to John E.Bukovatz, Kansas DOT Concrete Re-search Engineer, who died in Septem-ber 1985. For 19 years, his researchefforts contributed to the successes ofthe Research Unit.

References

1. R.J. Seitz, The DOT Research Unit.Report, Office of the Inspector General,Kansas Department of Transportation,Topeka, October 1984, 14 pp.2. J.E. Burke, Administration of Research,Development, and Implementation Activitiesin Highway Agencies. NCHRP Synthesis ofHighway Practice 113, TRB, National Re-search Council, Washington, D.C., Decem-ber 1984, Appendix B, pp. 37-49.3. S. Blake, Managing for ResponsiveResearch and Development. W.H. Freemanand Company, New York, 1978, p. 53.4. Post-Reinforcement. In Research PaysOff—the Return on Investment in Researchand Development, TRB, National ResearchCouncil, Washington, D.C., 1983, p. 2.5. R.R. Jones, Things Getting Tough?Don't Kill the Goose. Industrial Researchand Development, February 1983, p. 11.6. Kansas Is Fourth-Highest Loser on Fed-eral Grants. The Capital-Journal, July 2,1983, p. 2.