Predicting Outcomes of Investments in Maintenance and Repair of Federal Facilities (2012) / Chapter Skim
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4 Effective Practices for Investment in Maintenance and Repair
4 Effective Practices for Investment in Maintenance and Repair
Pages 55-71
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From page 55... ...
As part of this task, the committee was asked to review and appraise current practices used to support facilities decision-making in both the private and public sectors and identify objectives, practices, and performance measures to help determine appropriate levels of investment. The resulting report, Investments in Federal Facilities: Asset Management Strategies for the 21st Century, identified 10 principles/policies used by bestpractice organizations in matters of facilities investment and management (NRC, 2004a)
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From page 56... ...
• The work undertaken results in efficient operations, which result in lower operating costs that can be documented. The private-sector representatives identified a number of practices that are used by their organizations to ensure that maintenance and repair investments result in outcomes that are beneficial to the entire organization: • Dispose of excess and underutilized facilities (buildings, structures, and infrastructure)
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From page 57... ...
Nonetheless, it believes that if such practices were implemented in federal agencies, they could result in more cost-effective practices that would yield improved long-term results, as described below. DISPOSE OF EXCESS AND UNDERUTILIZED FACILITIES Effective portfolio-based facilities management looks holistically at the entire inventory of buildings and structures and aligns them with the organization's overall mission and operating objectives.
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From page 58... ...
; increasing occupancy rates in current facilities through innovative approaches to space management and alternative workplace arrangements, such as telework; and identifying offsetting reductions in inventory when new space is acquired. Federal agencies are also directed to take immediate steps to make better use of remaining real property assets as measured by utilization and occupancy rates, annual operating cost, energy efficiency, and sustainability.
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From page 59... ...
If the disposal of excess and underutilized properties by civilian agencies can be successfully implemented, the federal government would reduce its risk of fiscal exposure related to the ownership of buildings, reduce its total operating costs, and reduce its long-term maintenance and repair requirements and costs. Disposal of excess and underutilized facilities would also help to meet other public policy objectives related to reductions in the use of energy and water and in greenhouse gas emissions.
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From page 60... ...
SOURCE: NRC, 2004b. fig 4-4 Landscape view PURSUE A PROACTIVE STRATEGY TO MINIMIZE THE TOTAL FACILITIES "FOOTPRINT" In addition to disposing of excess and underutilized facilities, private-sector and other high-performance organizations proactively initiate strategies to minimize their total facilities footprint and the associated costs (such as those for equipment, furniture, and landscaping)
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From page 61... ...
. Other agencies, such as the General Services Administration, are implementing alternative work arrangements to reduce their demand for office space and to reduce operating, energy, water, maintenance, and repair costs.
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From page 62... ...
Because the products and programs of federal agencies are typically related to protecting the public's health, safety, and welfare, not to making a profit, the links between the failure of a system or component, maintenance and repair investments, and organizational missions are more difficult to convey to decision-makers and others. Nonetheless, several agencies have developed or are developing approaches for doing so.
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From page 63... ...
Navy, the U.S. Coast Guard, and NASA as a process for incorporating operational risk management into facilities asset management (Antelman et al., 2008)
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From page 64... ...
The goal of the inland navigation program is to provide safe, reliable, effi cient, effective, and environmentally sustainable waterborne transportation systems for commerce, national security needs, and recreation. The infrastructure and components required to achieve those objectives include locks, dams, channels, and canals, gates, valves, operating mechanisms, controls, and machinery.
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From page 65... ...
Percentage of navigation asset inventory with Improve the reliability of water resources recent structural or operational risk assessments, infrastructure by using a risk-informed asset including SPRA assessments management strategy Percentage of navigation asset inventory risk assessments that reveal a significant level of risk Number of funded actions under way that address assets regarding which there is a significant level of risk Operate and manage the navigation Risk and reliability: facility condition assessment infrastructure to maintain justified levels of and efforts service in terms of the availability of high-use navigation infrastructure (waterways, harbors, and channels) to commercial traffic SOURCE: USACE, 2010.
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From page 66... ...
for national public use with higher-cost alternative modes of transportation 3 Moderate risk to mission No life-safety effect Moderate economic loss: 1 billion to 2.5 billion ton-miles 4 Low risk to mission No life-safety effect Low economic loss: 500 million to 1 billion ton-miles 5 Negligible risk to mission No life-safety effect Least economic loss: less than 500 million ton-miles SOURCE: USACE, 2010. TABLE 4.4 Categories of Facilities Components Used by General Motors CORPORATE PROGRAMS GENERAL FUNDS Roofing General lighting Paving Parking lot lighting HVAC Sewers Fire protection Water supply Fork truck batteries Piping distribution Electrical substations Floors Wastewater treatment plants Sash and glass Truck docks and doors Elevators Powerhouse, including compressed air, chillers, Café and cooling Computer rooms Restrooms Scrap conveyors and cranes Plant administration buildings Railroad tracks Underground and aboveground storage tanks Externally driven environmental and regulations Signs Decommissioning or legacy costs Landscaping SOURCE: McNabb, 2010.
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From page 67... ...
When presenting the results of such an analysis to senior decision-makers, facilities program managers also identify other outcomes from the proposed investment, such as employee comfort or improved safety. REMOVE MUST-FUND PROJECTS AND THOSE SUPPORTED BY ACCEPTABLE FINANCIAL PAYBACK FROM THE MAINTENANCE AND REPAIR ACCOUNT Each of the private-sector organizations interviewed for this study identified projects that must be funded to manage risk to the organization and funded them through sources other than the maintenance and repair account.
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From page 68... ...
The ESPC projects contain guarantees that will result in $6 billion in avoided energy 3See Federal Energy Management Program Web site http://www1.eere.energy.gov/femp/financing/ espcs.html. 4Additional information on this approach is available at http://www.usgbc.org/DisplayPage.aspx?
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From page 69... ...
For example, in a designbuild-finance-operate contract the private-sector partner finances, designs, constructs, and operates a facility under a long-term lease and the public organization takes ownership of the property at the end of the lease. The private-sector partner assumes the financial risks related to project delivery, maintenance, and revenue; and the public-sector partner assumes all the risks related to facilities ownership, once it takes over the facility.
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From page 70... ...
In a presentation to the Federal Facilities Council, it was reported that the program has resulted in improved condition of the NNSA's roofing portfolio; in increased average remaining service life; in the replacement of 3 million square feet of roofs with more energy-efficient, sustainable roofs, including 2 million square feet of cool roofs; in $17 million of savings in overhead costs; and in other benefits (Moran, 2010)
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From page 71... ...
GM facilities managers found that this type of analysis improved their future budget submissions and increased their credibility with other decision-makers including those who approved the budget.
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