Technical Assessment of the Capital Facility Needs of the National Institute of Standards and Technology (2023) / Chapter Skim
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6 Sustainable Ownership Strategies for NIST's Facility Portfolio
6 Sustainable Ownership Strategies for NIST's Facility Portfolio
Pages 95-116
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From page 95... ...
A proactive facility asset management program has the following elements, which are discussed in detail in this chapter: • Program Requirements: Identify new facility and infrastructure total cost of ownership needs for all funding categories concurrent with new research objectives. • Total Cost of Ownership: Fund the existing portfolio at levels that allow the facilities and infrastructure to provide the desired level of service and performance to each research program.
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From page 96... ...
. Executive Order 13327 -- Federal Real Property Asset Management, formalized these requirements in 2004.
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From page 97... ...
through the DOC Real Property Manual. The manual appears to focus primarily on facility planning and recapitalization with only a limited discussion of the total cost of ownership, providing the OUs with only limited guidance on best practices in facility asset management.
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From page 98... ...
Those same documents do not appear to provide any insight on how proposed capital investments will increase or decrease total cost of ownership for the agency and leave the investment strategy with limited insight into the potential impacts to non-capital budget needs. Finding 6-1: NIST does not appear to maintain a policy or standards document that forecasts portfolio owner ship requirements by real property category.
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From page 99... ...
A TCO for an entire real property asset, as defined by American National Standards Institute standards, represents the sum of all resource requirements over the life of the real property asset. Total cost of ownership by facility type also allows NIST to understand which facilities generally fall well beyond the 2 to 4 percent of CRV referenced in previous NRC publications (NRC 1990, 1998, 2004)
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From page 100... ...
for Total Cost of Ownership (TCO) : APPA 1000-1 -- Total Cost of Ownership for Facilities Asset Management (TCO)
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From page 101... ...
NIST's current funding strategy appears to prioritize new capital investments over the development of a sustainable fiscal model capable of delivering 21st century research campuses within available funding levels. Unless existing annual funding is reprioritized to meet the full funding needs of new and existing facilities, reductions in deferred maintenance and facility performance are likely to be short-lived gains for the first 5 to 8 years of facility life, followed by increased risk to the portfolio as warranties and similar new construction benefits run their course.
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From page 102... ...
The process allows the Civil Works Program to identify required annual funding by levels of service and then adjusts actual implementation when annual funding requests differ from actual funding provided. Maintaining a clear understanding of what Civil Works needs to operate and maintain their $274 billion portfolio and then tracking actual funding against that need gives them an integrated ownership strategy and the ability to prioritize less than full funding to those real property assets with the greatest need.
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From page 103... ...
Appendix E) In summary, the Maintenance Management Core Team recommends that all critical components be uniquely identified and proactively managed within the USACE maintenance management program.
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From page 104... ...
to form a clear expectation of federal agencies, their senior real property officers, and their real property facility asset management programs. Identifying a source of funds for all required annual operation and maintenance needs or identifying the gap between annual funding requirements and actual funding levels, provides NIST with a critical capability as the steward of a $2.85 billion investment that is projected to increase substantially in value to $5.125 billion as part of the organization's capital strategy.
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From page 105... ...
Finding 6-2: NIST's current real property planning process and associated master plans appear to address the need for renovation and new construction but do not display an ability to address shortfalls in annual funding need or a focus on reducing total cost of ownership. The committee's analysis of NIST's current facility condition and significant deferred maintenance backlog, discussed in depth in Chapters 3 and 4, suggests that NIST's facility problems stem from chronic critical underfunding the existing portfolio's annual operations and maintenance needs and a poor alignment between research program needs and the facilities that are needed to support those programs, with the result that many existing facilities that no longer meet research requirements or have exceeded their useful life.
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From page 106... ...
1) Within the federal government, GAO identified six primary characteristics required to achieve effective facility asset management and a corresponding ownership strategy capable of delivering life-cycle value from real property investments.
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From page 107... ...
Each of the six federal agencies we reviewed had a real property asset management framework that included some of these key characteristics. However, agencies varied in how they performed activities in these areas.
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From page 108... ...
Recommendation 6-2: NIST should expand its current real property asset management system and strategy beyond condition assessment and deferred maintenance reporting and provide a proactive, life-cycle approach to real property ownership for the NIST real property portfolio that aligns with the Federal Real Property Reform Act of 2016 and the associated framework by GAO and the 2023 National Academies' report Strategies to Renew Federal Facilities. GAO's report on federal real property facilities, as well as publications from the National Academies and international standards bodies, offer robust frameworks for the implementation of a proactive real property asset
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From page 109... ...
Summarizing the guidance from the public law, OMB, and other industry standards, a proactive real property asset management strategy would: • Accurately represent the entire real property portfolio (facilities, infrastructure, and information technology [if not removed from OFPM's responsibility]
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From page 110... ...
. Similarly, NIST has an opportunity to enhance their current condition assessment, deferred maintenance, and capital needs forecasting program.
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From page 111... ...
It outlines how a facility asset management system is used to fulfill Recommendation 6-2, in summary, that NIST should expand its current real property asset management system and strategy beyond condition assessment and deferred maintenance reporting and provide a proactive, life-cycle approach to real property ownership for the NIST real property portfolio. Specifically, NIST needs to evolve its facility asset management system to not only focus on expert management of limited funding to respond to facility asset lifecycle requirements, but to evolve its facility asset management capabilities to be more attentive to how these assets support today's and tomorrow's mission in consideration of the total cost of ownership to do so (NASEM 2023)
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From page 112... ...
This anatomy details specific logic that aligns with OMB Circulars A-11 and A-123 to achieve executive, DOC, and NIST policies governing real property asset management. FIGURE 6-8 Facility Asset Management System Anatomy.
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From page 113... ...
Facility asset management objectives translate aspirational and mission-oriented objectives into concrete facility asset and facility management performance objectives that are supported through IS, SCMMR, and CMR program execution. The purpose is to use facility asset management objectives to frame levels of service and performance metrics for the facilities needed to support NIST mission achievement, such as is shown in Figure 6-3 Project Maintenance Management Funding discussed earlier.
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From page 114... ...
2018. "Federal Real Property Asset Management: Agencies Could Benefit from Additional Information on Leading Practices." GAO 19-57.
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From page 115... ...
2011. "Asset Management Strategic Investment Framework." Washington, DC.
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