The Federal Aviation Administration (FAA) issued a Program Guidance Letter (PGL) on June 29th clarifying how the discount rate for cost effectiveness analysis, also known as Life Cycle Cost Analysis (LCCA), should be determined. Cost effective analysis is appropriate to determine which pavement type is the most economical solution to repair or replace existing infrastructure.

According to the PGL, real discount rates from the latest OMB Circular A-94 should be used when performing a cost effectiveness analysis. The PGL also changes the requirement for a 20-year analysis period to allow the design engineer to choose an appropriate time period for the cost effectiveness analysis. A copy of OMB Circular A-94 for 2022 can be downloaded here.