Reminding Agencies of Discount Rate, a Top ACPA Priority in 2021
ACPA National and our state and regional affiliates have been reaching to our agency partners to make them aware of the new published Office of Management and Budget (OMB) discount rate of minus 0.3 percent.
ACPA contacted both Federal Highway Administration (FHWA) and Federal Aviation Administration (FAA) regarding the change.
ACPA encouraged the agencies to share the updated rate with their field staff and other relevant personnel. ACPA also urged American Association of Highway and Transportation Officials (AASHTO) to share the updated rate with their state department of transportation members and remind them that the current 30-year real interest rate is what should be used as a discount rate in life-cycle cost analyses (as noted in FHWA TA 5040.39 Section 6b).
At the local level, ACPA-affiliated chapters and state associations are also reaching out to their agency partners directly with the update. These efforts are intended to ensure life-cycle cost analysis on projects under current consideration are based on the appropriate rate at this point in time.
Changing the discount rate applied by some agencies has proven challenging for the association despite clear recommendations from the OMB, but we are optimistic that the combined efforts at both the national and local levels will be met with willing support by the FAA and FHWA as well as regional offices and divisions. We are working to ensure owners’ representatives and other consulting engineers are informed of the change, and are hopeful they, too, will use the current discount rate.
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