Strategies to Renew Federal Facilities (2023) / Chapter Skim
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Appendix F: Facility Asset Management Principles
Appendix F: Facility Asset Management Principles
Pages 180-212
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From page 180... ...
DATA INTEGRITY PRINCIPLE Data used must be held to integrity standards determined by the facility asset management system's decision-making needs. Having accurate, relevant, and actionable data is a universal requirement to implementing federal facility renewal strategies.
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From page 181... ...
OMB guidance directs the use of GAO's cost-estimating guidance, updated in 2020, in GAO-20-195G, Cost Estimating and Assessment Guide, which, although framed in terms of program management activities, provides excellent guidance suitable for facility asset management. To complement these activities, the development of federal facility renewal strategies must consider an integrated investment perspective that includes the entire life-cycle cost of facility assets to address renewal of the agency's facility portfolio.
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From page 182... ...
SOURCE: © ISO. This material is reproduced from ISO 15686-5:2017 with permission of the American National Standards Institute (ANSI)
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From page 183... ...
The committee applauds the work presented in ISO 15686, Part 5, and sees it as a foundational source defining whole life cost analyses supporting the development of federal facility renewal strategies. In practice, this means cost analysis supporting federal facility renewal strategies must go beyond guidance outlined in OMB Circular A-11 -- Preparation, Submission and Execution of the Budget; OMB Circular A-94 -- Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs; and GAO-20-195G, Cost Estimating and Assessment Guide.
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From page 184... ...
Steps to address this could make use of ISO 15686 -- Buildings and Constructed Assets -- Service Life Planning standards. PORTFOLIO MANAGEMENT PRINCIPLE Federal facility renewal strategies must support the agency's whole facility portfolio, covering whole life cycle and stakeholder requirements across whole mission sets.
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From page 185... ...
. The Agency Capital Plan can support an agency's related salaries and expenses associated with the staffing, operation, and maintenance of its capital asset portfolio (p.
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From page 186... ...
This observation supplements the review of OMB policy contained in Appendix E and findings contained in Chapter 2. It is the committee's opinion that defining a portfolio this way makes it difficult to implement facility asset management systems detailed in Chapter 3, which are needed for generating federal facility renewal strategies.
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From page 187... ...
The following OMB circulars confer related requirements: • Circular A-11 -- Preparation, Submission and Execution of the Budget • Circular A-94 -- Guidelines and Discount Rates for Benefit-Cost Analysis of Federal Programs • Circular A-123 -- Management's Responsibility for Enterprise Risk Man agement and Internal Control • Circular A-131 -- Value Engineering • Circular A-134 -- Financial Accounting Principles and Standards • Circular A-136 -- Financial Reporting Requirements In terms of federal facility asset management, these requirements manifest in two general forms: inventory accounting and financial accounting. Executive Order 13327 -- Federal Real Property Asset Management introduced centralized federal real property inventory reporting (White House, 2004)
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From page 188... ...
Furthermore, this foundation will promote communications helping executive decision makers understand the interrelationship between budgetary decisions and facility performance, all advancing the value and impact of federal facility renewal strategies. MISSION ALIGNMENT PRINCIPLE Mission alignment of resource prioritization requires the use of validated and verifiable metrics to link the relative importance of individual facility assets to agency missions and stakeholder performance expectations.
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From page 189... ...
. The committee considers it the most capable because it applies a simple operational readiness risk matrix based on probability and severity, supported by a set of data quality rules for reporting the relative importance of each facility asset.
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From page 190... ...
. FACILITY PERFORMANCE PRINCIPLE Knowledge of each facility asset's condition, functionality, availability, and utilization compared with agency-established standards is required to under stand the capabilities and performance of facility assets and portfolios.
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From page 191... ...
Development of this principle focuses on reporting facility performance expanding on OMB's use of utilization and condition performance metrics. In the committee's judgment, the following four perspectives constitute an exhaustive basis for determining and reporting the performance of a facility asset and facility portfolio: • Condition -- the physical performance of facility components and systems.
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From page 192... ...
The ISO 55001 -- Asset Management System -- Requirements standard is designed to serve this purpose. The figure below presents a generic facility asset management system framework based on requirements contained in this standard configured to implement federal facility renewal strategies put in the context of federal policy.
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From page 193... ...
Likewise, as depicted in the figure above, the real property capital plan translates organizational objectives into asset management objectives guided by the agency's facility renewal strategy. Asset management objectives defined and further developed in subordinate asset management plans establish SMART (specific, measurable, actionable, relevant, and time-bound)
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From page 194... ...
OPERATIONAL READINESS PRINCIPLE The relationship between agency operational readiness and the levels of facility operational readiness delivered by federal facility renewal strategies must be balanced across a range of relevant investment horizons and resourcing strategies. Integrating and reconciling objectives, resources, and performance establish the need to focus decision making, which leads to the operational readiness principle.
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From page 195... ...
The committee supports ISO 55002 and OMB's guidance but urges agencies to employ a range of facility asset management decision-making objectives, and recommends evolving federal policy to make use of an Operational Readiness Index (ORI) as part of a method of communications supporting federal facility renewal strategy implementation.
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From page 196... ...
This ORI calculation is often used to develop strategies and prioritize actions related to environmental issues, energy goals, and regulatory requirements. These use cases highlight ORI's versatility addressing a wide range of resource decision making objectives supporting federal facility renewal strategy development.
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From page 197... ...
197 FIGURE F-10 Multicriteria decision making analysis.
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From page 198... ...
It evaluated the Army National Guard's mission dependency based on each Readiness Center and not on each facility asset. The National Guard then joined the resulting stewardship and mission dependency to identified target ORI ranges that optimally balanced costs and risks to achieve their mission objectives as shown in Figure F-12.
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From page 199... ...
The committee recognizes the RCTMP as a leading example of a detailed, defensible agency facility renewal strategy. Making use of the Army National Guard RCTMP example, the Air Force developed an investment analysis model called the Installation Health Assessment, introduced in 2017.
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From page 200... ...
Like the Army National Guard RCTMP, this provided a simple way to demonstrate the cause and effects of different investment strategies on the Air Force's installation operational readiness, as shown in Figure F-15. Scenario 1: Current Funding > ORI = 60 Scenario 2: Base Funding > ORI = 66 FIGURE F-13 Operational Readiness Index (ORI)
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From page 201... ...
Using the ORI to communicate the simple cause and effect between the Air Force's facility renewal strategy and the operational readiness of Air Force's mission capabilities drove an increase in facilities funding to
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From page 202... ...
SOURCE: U.S. Army National Guard, 2014, Transformation Master Plan, Final Report to Congress.
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From page 203... ...
. The Air Force Installation Health Assessment analysis in support of the I2S, like the ORI analysis in support of the Army National Guard's RCTMP, is a leading example of beginner federal facility renewal strategies.
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From page 204... ...
• The real property capital plan integrates performance objectives admin istered through many facility asset management plans to inform agency PPBE decision making. This links agency facility renewal management to budget development activities in accordance with guidance in the OMB Capital Programming Guide.
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From page 205... ...
FIGURE F-15 Example representation of the Air Force Infrastructure Health Assessment Dashboard. SOURCE: Courtesy of Air Force Installation and Mission Support Center Analytics.
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From page 206... ...
206 FIGURE F-16 Performance–budget integration framework.
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From page 207... ...
A best practice is to start with measurement areas detailed in the facility performance principle. Agencies must then configure their facility asset management systems to determine optimal performance standard targets.
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From page 208... ...
As detailed in Chapter 3, these are essential capabilities of facility asset management systems supportive of OMB policy and ISO 55000 standards. BALANCE SHEET ANALYSIS PRINCIPLE Federal facility renewal strategies gain credibility based on their ability to reconcile a comprehensive and exhaustive set of facility requirements and capabilities against resources using a balance sheet analysis.
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From page 209... ...
Agencies that can demonstrate a fully functional facility asset management system are much more likely than those who cannot to generate effective federal facility renewal strategies. Doing so may be the fastest and most effective way to graduate federal real property management from the GAO High-Risk list.
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From page 210... ...
In Figure F-19, the asset management maturity level is 2.20 for the organization being assessed. This is computed on a scale ranging from 0 to 4, with higher numbers indicating higher levels of asset management system maturity.
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From page 211... ...
The committee views this type of assessment as critical to agencies seeking to improve their facility asset management system capabilities, which is a means to improve their facility renewal strategies. FIGURE F-19 ISO 55001 asset management system assessment report analysis, linked to ISO 55001 clause requirements.
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From page 212... ...
212 STRATEGIES TO RENEW FEDERAL FACILITIES FIGURE F-20 Asset management maturity progression.
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