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Suggested Citation:"NASA Backlog of Maintenance and Repair 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.
Page 32
Suggested Citation:"NASA Backlog of Maintenance and Repair 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.
Page 33

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DEFINITIONAL ISSUES AND POTENTIAL REVISIONS 32 Budget Categories Ideally, for each cell in the responsibilities matrix there is a budget line item to which the FSM requirement can be compared. The difference between FSM-generated requirements and annual sustainment funding represents deferred sustainment of facilities. There are two limitations to consider: (1) FSM addresses only deferral of work that meets the definition of sustainment and (2) FSM does not assist in calculating a pre-existing “compounded” backlog. FSM can be used to compute the amount of sustainment deferred annually but cannot be used to compute deferral of costs outside the definition of sustainment. DoD has created a second budget category—termed Facilities Restoration and Modernization—which complements Facilities Sustainment by identifying “beyond sustainment” requirements. Typically these are modernization projects, minor construction projects, or large repair projects that restore a facility to acceptable status. FSM provides a method to compute annual deferral but does not attempt to provide a way to compound successive deferrals into a multiyear backlog. Although FSM could be used to compute deferral over a 3-year period, for example, it does not assist in determining how much of what was deferred remains in the backlog at the end of 3 years. When sustainment is not accomplished, sustainment activities do not automatically roll over to become repair backlogs—if this year's oil change is not done, it doesn't need to be done twice next year. The incremental loss of facility life for delaying the sustainment will eventually show up in a restoration requirement, perhaps sooner than expected. But it is not automatic unless the lack of sustainment results in an immediate failure and new restoration requirement. To be comprehensive, two separate accounting entries are required. The first entry would be “deferred sustainment” and would be the annual amount of regular maintenance and repairs (i.e., sustainment) not funded. FSM provides a way to compute this number. The second entry would reflect unfunded restoration requirements, most (but not all) of which result from deferred sustainment. The unfunded restoration requirement is generated separately and is not a direct rollover from deferred sustainment. As an option, unfunded “modernization” projects could be added if desired. To be clear, this entry might be labeled “Backlog of Restoration and Modernization” rather than “Backlog of Repair” since not all projects in this backlog would be repairs. NASA Backlog of Maintenance and Repair Model A potential approach to reporting deferred maintenance is called the National Aeronautics and Space Administration (NASA) Backlog of Maintenance and Repair (BMAR) Model for purposes of this report. It is based on a white paper developed by Mr. Charles B. Pittinger, Jr., P.E., in NASA's headquarters office. The BMAR Model is based on parametric estimates and is intended to produce a macro-level estimate of deferred maintenance. The model is based on the following premises: (1) condition assessment surveys performed for systems (not individual components) and for the entire facility (overall system average); (2) generalized condition levels; (3) limited number of systems to assess; and (4) parametric estimating based on current replacement value (CRV).

DEFINITIONAL ISSUES AND POTENTIAL REVISIONS 33 In this approach, personnel knowledgeable in facility assessment would evaluate a building's condition using an inspection process that entailed, at a minimum, a walk through of a facility. The BMAR Model could be applied over an entire inventory of facilities by sampling of general type of building (i.e., office, warehouse) not on a building-by-building basis. Condition assessment levels and repair costs as a percentage of CRV could be applied as outlined below: Generalized Condition Level 17 Repair Cost 5 New; only normal preventive maintenance required. 1% of CRV 4 Some repairs needed; overall system generally functional. 20% of CRV 3 Many repairs needed; limited functionality or availability. 50% of CRV 2 May be functional but obsolete or does not meet codes. 100% of CRV 1 Not operational or unsafe. 100% of CRV Major Systems Percentage of Facility CRV Architectural 5 Roof 10 Electrical 15 Plumbing 15 HVAC 25 Structural 30 100 Site 100 Utility systems 100 The site and utility systems represent features outside the building line, that is, parking lots, curbs, and utilities, and would therefore be considered as separate systems. To determine a dollar amount for maintenance and repair backlog, the major system percentage CRV is multiplied by the repair cost (as a percentage of CRV) as designated by the generalized condition level. These amounts are then summed, and the total is multiplied by the CRV of the building. Facility management can use this figure and may choose to include costs 17 The condition levels and percentage of repair costs and the percentage of CRV would be determined on an agency-by- agency basis. This example is not intended to represent any system or industry standard now in use and is just an assumption for illustrative purposes. Development of standards around distribution of estimated costs would require further study. The standards would also vary by general class of facility, such as hospitals, office buildings, or warehouses.

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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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