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Suggested Citation:"DoD Facilities Sustainment Model." National Research Council. 2001. Deferred Maintenance Reporting for Federal Facilities: Meeting the Requirements of Federal Accounting Standards Advisory Board Standard Number 6, as Amended. Washington, DC: The National Academies Press. doi: 10.17226/10095.
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Page 30

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DEFINITIONAL ISSUES AND POTENTIAL REVISIONS 30 The true cost of maintaining the physical plant is not only replacing ceiling tile, painting and replacing mechanical systems. Our experience has shown that the renovation of an older facility or the replacement of an HVAC [heating, ventilation, and air conditioning] system in a 40-year-old facility will always lead to costs over and above those originally anticipated. Whether any grandfather clauses are tripped or not, prudent facilities managers will take those opportunities to perform additional upgrades such as the installation of a sprinkler system, smoke alarm system, or telecommunications cabling. Additionally, they will be required to comply with newer code issues such as ADA [Americans with Disabilities Act] or will be required to remove asbestos or lead from their facility. Including these additional items as deficiencies gives a more accurate accounting of the condition of the physical plant than the FCI [Facility Condition Index] by itself (Syme and Oschrin, 1996). In the modified system, deficiencies are separated into maintenance and renewal deficiencies, each with its own index. The FCI (maintenance deficiencies divided by current replacement value) and the Facility Renewal Index (FRI) (renewal deficiencies divided by current replacement value) are added together to produce the Facility Assessment Index (FAI). FCI + FRI = FAI The inspection process has three parts: data collection, data entry, and report generation. Inspections include a review of previous inspection reports, plans, work orders, and warranties; visual inspection of the facility; consultations with building occupants, users, and facilities management personnel. Data are entered into the database. Each record in the database is tagged with a year from 0 to 100 representing the estimated year in which a repair should be made. A tag of 0 means the repair should be done within the year. Tagging the repairs allows for managers to plan for and prioritize maintenance and repairs. The database automatically calculates estimated costs based on user-defined costs and cost factors. Facilities managers can tell whether current funding will satisfy their need to maintain their physical plant in good condition (Syme and Oschrin, 1996). DoD Facilities Sustainment Model The Facilities Sustainment Model (FSM), prepared by DoD's Office of the Deputy Under Secretary (Installations), is designed to forecast the funding requirements for sustainment of an inventory of facilities (Janke, 2000). As a life-cycle cost model, FSM generates an annual funding requirement to sustain an inventory over a normal life cycle. FSM is grounded in standard facility-specific benchmarks, is tied to the inventory that must be sustained, and is applicable throughout DoD. The FSM identifies the cost to “sustain” facilities, the outcome of regular maintenance and repair activities. Facilities sustainment under FSM means “maintenance and repair activities necessary to keep an inventory of facilities in good working order.” The full definition 2 used by 2 Facilities sustainment: maintenance and repair activities necessary to keep an inventory of facilities in good working order. It includes regularly scheduled inspections, preventive maintenance tasks, and service calls and emergency responses. Activities also include major repairs or replacement of facility components (usually accomplished by contract) that are expected to occur periodically throughout the life cycle of facilities. This includes such work as regular roof replacement, refinishing of wall surfaces, ceilings and flooring, and repairing and replacement of heating and cooling systems. It does not include certain restoration, modernization, and environmental compliance costs, which are funded elsewhere. Other tasks associated with facilities operations (such as custodial services, grass cutting, landscaping, waste disposal, and the provision of central utilities) also are not included.

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In 1996 the Federal Accounting Standards Advisory Board (FASAB) 1 enacted Standard Number 6, Accounting for Property, Plant, and Equipment (PP&E), the first government-wide initiative requiring federal agencies to report dollar amounts of deferred maintenance annually. The FASAB has identified four overall objectives in federal financial reporting: budgetary integrity, operating performance, stewardship, and systems and control. FASAB Standard Number 6, as amended, focuses on operating performance and stewardship. The FFC Standing Committee on Operations and Maintenance has prepared this report to identify potential issues that should be considered in any future amendments to the standard and to suggest approaches for resolving them. The committee's intent is to assist the CFO Council, federal agencies, the FASAB, and others as they consider how best to meet the objectives of federal financial reporting for facilities.

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