Below are the first 10 and last 10 pages of uncorrected machine-read text (when available) of this chapter, followed by the top 30 algorithmically extracted key phrases from the chapter as a whole.
Intended to provide our own search engines and external engines with highly rich, chapter-representative searchable text on the opening pages of each chapter.
Because it is UNCORRECTED material, please consider the following text as a useful but insufficient proxy for the authoritative book pages.
Do not use for reproduction, copying, pasting, or reading; exclusively for search engines.
OCR for page 9
1
Introduction
The U.S. federal government has a substantial and ongoing investment in its
facilities, which include some 429,000 buildings and an additional 482,000 struc-
tures and infrastructure (GSA, 2010). The purpose of these facilities is to enable
the achievement of federal agencies’ missions, which include national defense;
homeland security; international diplomacy; protecting the public’s health, safety,
and welfare; space exploration; fostering commerce; recreation; collecting and
preserving historical and cultural artifacts and the arts; and scientific research.
The facilities that enable those missions include military installations; embassy
compounds; office and administrative space; satellite, communication, and data
centers; hospitals; museums; laboratories; roads and bridges; dams and levees;
inland waterways; power plants; and many other types of buildings, structures,
and infrastructure.
The estimated replacement value of all federal government facilities (build-
ings, structures, and infrastructure) ranges from $1.26 trillion (GSA, 2006) to
$1.7 trillion (GAO, 2008). Every year, the federal government spends as much
as $47 billion to operate and maintain its facilities (GAO, 2008). Operating costs
include energy costs, which fluctuate with the market but are always substantial.
In fiscal year (FY) 2007, the latest year on which data are available, federal build-
ings used 392 trillion British thermal units (Btu) of energy at a cost of $6.5 billion
(FEMP, 2010).
Despite the magnitude of the investment, many federal facilities are deterio-
rating because of decades of inadequate funding for their maintenance and repair,
their age, and other factors. Deteriorating facilities, in turn, pose an array of risks
to the achievement of federal agencies’ missions, the achievement of public policy
goals, and the federal government’s fiscal soundness.
9
OCR for page 10
10 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
All indications are that funding for many federal agencies’ programs will de-
crease in the near term because of current fiscal conditions and the rising national
debt. This operating environment provides an impetus to reexamine the practices
that have resulted in deteriorating, excess, and underutilized federal facilities and
an opportunity to go forward in a more sustainable direction.
Because this report is intended for multiple audiences that have different
backgrounds and interests, several key terms used in the report are explained
here. If the committee has used a definition from another source, the source is
cited (Box 1.1).
BOX 1.1
Terms Used in This Report
Customers as defined in this report are the users of federal facilities,
including tenants and visitors.
Excess facilities are those which are no longer needed to support a
federal agency’s current or future missions.
Facilities refers to buildings (such as hospitals, barracks, embassies,
and offices), other types of structures (such as parking, storage, and
industrial), and infrastructure (such as power plants, water and sewer
systems, railroads, roads, and bridges).
Federal facilities program managers are federal employees who are
directly responsible for federal facilities programs; their responsibilities
may include oversight of activities related to facilities design, construc-
tion, programming, budgeting, operations, maintenance, and evaluation.
Knowledge-based condition assessments use knowledge (quantifi-
able information) about a facility’s systems and components to select
the appropriate inspection type and schedule throughout its life cycle.
Inspections are planned and executed on the basis of knowledge, not
merely the calendar (Uzarski et al., 2007).
An outcome is something that follows as a result or consequence
(Webster’s New Collegiate Dictionary, 1976).
OCR for page 11
INTRODUCTION 11
CHARACTERISTICS OF THE PORTFOLIO OF FEDERAL FACILITIES
The federal government owns about 429,000 buildings of many types
(Figure 1.1) which have a total square footage (footprint) of 3.3 billion square
feet (Table 1.1).
About 83 percent of the total square footage of federal buildings in the
50 states is owned space, 13 percent is leased, and 4 percent is managed otherwise
(GSA, 2010).
In addition to buildings, the government owns 482,000 structures including
utility systems, roads and bridges, parking, recreational and storage structures,
and miscellaneous military facilities (Figure 1.2 and Table 1.2).
Portfolio-based facilities asset management is a systematic process
of maintaining, upgrading, and operating physical assets cost effectively.
It combines engineering principles with sound business practices and
economic theory, and provides tools to facilitate a more organized,
logical approach to decision-making. A facilities asset management
approach allows for both program or network-level management and
project-level management, and thereby supports both executive-level
and field-level decision-making (NRC, 2004a, p. 32).
Public-private partnerships are contractual agreements between
public and private-sector organizations in which the private sector, in
exchange for compensation, agrees to deliver services, or even facilities,
that could be provided by the public sector (Keston Institute, 2011).
Risk is a measure of the probability and severity of adverse events
(Lowrance, 1976, p. 1).
Stakeholders in maintenance and repair of federal facilities include
federal departments and agencies; facilities program managers; cus-
tomers; oversight organizations such as the Office of Management and
Budget; Congress; the administration; and the general public.
Total cost of ownership is the total of all expenditures an owner orga-
nization will make over the life cycle of a facility, that is, all expenditures
related to planning, design, construction, operations and maintenance,
renewal, revitalization, and disposal (NRC, 2008).
OCR for page 12
12 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
FIGURE 1.1 Federal buildings by predominant use in square feet as reported for FY 2009.
NOTE: All remaining uses include prisons and detention centers, hospitals, laboratories,
industrial, communication systems, museums, and post offices. SOURCE: GSA, 2010.
TABLE 1.1 Federal Buildings by Predominant Use and Square Footage as
Reported for FY 2009
Predominant Use Square Feet in Millions
Office 740.8
Warehouses 460.4
Services 416.2
Family housing 364.9
Barracks 271.2
Schools 251.7
Other institutional uses 221.4
All remaining uses 612.8
Total square feet 3,339.4
SOURCE: GSA, 2010.
Federal facilities (buildings and structures combined) are owned and man-
aged by more than 30 departments and agencies. The Army, Navy, Air Force,
Department of Veterans Affairs (VA), and the General Services Administration
(GSA) manage the greatest numbers of buildings and structures and the greatest
amounts of building space as measured by square footage (Table 1.3).
Much of the current federal facilities portfolio “reflects an infrastructure based
on the business model and technological environment of the 1950s” and “many of
OCR for page 13
INTRODUCTION 13
FIGURE 1.2 Predominant use of structures by number of assets as reported for FY 2008.
SOURCE: GSA, 2009.
TABLE 1.2 Predominant Use by Number of Structures as Reported in FY 2008
Predominant Use Number of Structures
Utility systems 91,000
Roads and bridges 58,000
Recreational (other than buildings) 49,000
Parking structures 39,000
Miscellaneous military facilities 35,000
Storage (other than buildings) 30,000
Navigation and traffic aids (other than buildings) 26,000
Reclamation and irrigation 16,000
Communication systems 14,000
All othera 79,000
All remaining usesb 45,000
Total number of structures 482,000
aAll other uses include those that are not captured in the predominant use categories.
bAll remaining uses include airfield pavements, flood control and navigation, harbors and ports,
industrial (other than buildings), monuments and memorials, museums, power development and dis-
tribution, railroads, research and development (other than laboratories), service (other than buildings),
space exploration structures, and weapons ranges.
SOURCE: GSA, 2009.
OCR for page 14
14 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
TABLE 1.3 The Seven Agencies Managing the Greatest Amounts of Total
Building Square Footage
Total Number of Total Building
Agency Buildings and Structures Square Footage
U.S. Army 251,676 932,367,000
U.S. Air Force 134,788 606,191,000
U.S. Navy 150,576 578,305,000
GSA 9,213 407,941,000
VA 9,220 156,344,000
Department of Energy 18,354 129,239,000
Department of State 15,743 72,668,000
Total 589,570 2,883,055,000
SOURCE: GSA, 2010.
the assets are no longer effectively aligned with, or responsive to, agencies’ chang-
ing missions. . . .” (GAO, 2003, p. 1). In FY 2008, federal agencies disposed 1 of
about 25,000 facilities that were identified as excess with regard to current missions
or as underutilized; they had annual operating costs of $119 million. In FY 2009,
an additional 19,500 facilities with operating costs of $149 million were disposed
of (GSA, 2010). Nonetheless, as of FY 2009, federal agencies reported that they
still managed more than 45,000 facilities that are excess to their current missions
or underutilized, and that they were spending more than $1.66 billion to operate
them (GAO, 2011b).
The accumulation of excess and underutilized properties is a result of 200
years of acquiring facilities to support changing missions and new federal pro-
grams, and of the difficulty of disposing of facilities once they are acquired.
O
bstacles hindering sale, transfer of title, demolition or other methods of dis-
position include myriad regulations for transferring title to nonfederal entities,
disincentives created by the federal budget structure, security issues related to
the location of some excess facilities, and the condition of some facilities (NRC,
1998). Additional issues include the “numerous stakeholders that have an interest
in how the federal government carries out its real property acquisition, manage-
ment, and disposal practices” and a “complex legal environment that has a signifi-
cant impact on real property decision making and may not lead to economically
rational outcomes” (GAO, 2011b, p. 5).
LONG-STANDING INVESTMENT AND MANAGEMENT ISSUES
Excess and underutilized facilities are only one of several long-standing
i
ssues related to investment in and management of federal facilities. In 1990,
1Disposition methods include demolition, federal transfer, sale, public benefit conveyance, and
others (GSA, 2010).
OCR for page 15
INTRODUCTION 15
the National Research Council Committee on Advanced Maintenance Concepts
for Buildings was asked to undertake a broad review of maintenance and repair
activities of government agencies and to recommend how these activities might
be improved (NRC, 1990). The committee found that, “credible analyses indicate
that we are systematically neglecting the maintenance of public facilities at all
levels of government. We are spending our assets and wasting our inheritance”
(NRC, 1990, p. ix). One of its recommendations, which became a standard for
public facilities management, was the following (NRC, 1990, p. xii):
An appropriate budget allocation for routine M&R [maintenance and repair] for
a substantial inventory of facilities will typically be in the range of 2 to 4 percent
of the aggregate replacement value of those facilities (excluding land and major
associated infrastructure). In the absence of specific information upon which to
base the M&R budget, this funding level should be used as an absolute minimum
value. Where neglect of maintenance has caused a backlog of needed repairs to
accumulate, spending must exceed this minimum level until the backlog has
been eliminated.
Some federal agencies have used, and continue to use, the 2 to 4 percent
guideline for developing and justifying budget requests for maintenance and repair
activities. However, no agency has reported actually investing in maintenance and
repair activities at a level as high as 2 percent of the current replacement value
of its portfolio of facilities and underinvestment remains an issue (FFC, 1996;
committee briefings, 2009 and 2010).
In 2003, the U.S. Government Accountability Office (GAO) designated
federal real property as a “high-risk” 2 topic because of long-standing problems
with excess and underutilized facilities, deteriorating facilities, lack of reliable
governmentwide data for strategic asset management, the high costs of leased
space, and the costs and challenges of securing property against potential threat
of terrorism. In its report GAO stated that “many assets are in an alarming state
of deterioration; agencies have estimated restoration and repair needs to be in
the tens of billions of dollars” (GAO, 2003, p. 1). Furthermore, current trends
“have multibillion dollar cost implications and can seriously jeopardize mission
accomplishment” (GAO, 2003, p. 1). For example, the Department of Defense
(DOD) reported that many of its facilities were not adequate to meet the war-
fighting and operational concepts of the 21st century and that commanders
rated two-thirds of their infrastructure to be in such poor condition as to affect
mission accomplishment and morale substantially (GAO, 2003). In a similar
vein, GSA noted that some of its buildings had electrical systems that were
not capable of handling 21st century technologies, “which is critical to tenant
2The GAO’s high-risk update is provided at the start of each new Congress. The high-risk reports
are intended to help the new Congress “focus its attention on the most important issues and challenges
facing the federal government” (GAO, 2003, p. 1).
OCR for page 16
16 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
agencies’ accomplishing their missions” (GAO, 2003, p. 23). The GAO (2003,
p. 1) concluded that:
Resolving these problems will require high-level attention and effective leader
ship by both Congress and the administration. Also, because of the breadth
and complexity of the issues, the long-standing nature of the problems, and the
intense debate that will likely ensue, current structures and processes may not
be adequate to address the problems. Thus, there is a need for a comprehensive,
integrated transformation strategy for real property.
In 2004, Executive Order 13327, Federal Real Property Asset Management,3
provided direction for meeting some of those issues and established the Federal
Real Property Council (FRPC). The FRPC is an interagency council composed of
representatives of the 24 largest land-holding agencies and chaired by the Office
of Management and Budget (OMB). From 2004 to the end of 2010, the FRPC
i
ssued guidance focused on improving the strategic management of federal build-
ings and structures, improving the management of the condition of facilities, devel
oping asset management plans, implementing controls to improve the reliability
of facilities-related data, and developing a set of government-wide performance
measures related to the management of portfolios of facilities (GAO, 2011a).
Nonetheless, backlogs of deferred maintenance and repair projects continue
to grow. The 2008 GAO report, Federal Real Property: Government’s Fiscal
Exposure from Repair and Maintenance Backlogs is Unclear, found important
differences in how agencies plan, estimate, and fund maintenance and repair
activities. At that time, GAO recommended that OMB, in conjunction with the
FRPC and in consultation with the Federal Accounting Standards Advisory Board
(FASAB)4 explore the potential for developing a uniform reporting requirement
that would capture the government’s fiscal exposure from maintenance and repair
backlogs, because “this exposure may have a significant effect on future budget
resources and our nation’s long-term fiscal sustainability” (GAO, 2008, p. 4). As
of the date of release of the present report, a uniform reporting requirement has
not yet been approved for use by federal agencies.
As of January 2011, federal real property remained on GAO’s “high-risk” list
because of continuing issues related to leasing practices, excess properties, and
physical security (GAO, 2011b).
Additional long-standing issues that pose obstacles for effective investment in
and management of federal facilities have been identified in two previous National
Research Council studies. Among them are the following:
3The full text of the executive order is available at http://edocket.access.gpo.gov/2004/pdf/04-2773.pdf.
4The mission of the FASAB is to develop accounting standards after considering the financial and
budgetary needs of congressional oversight groups, executive agencies, and the needs of other users
of federal financial information.
OCR for page 17
INTRODUCTION 17
• The focus on the first (design and construction) costs of facilities in the
budget process as opposed to their life-cycle (long-term operations and
maintenance) costs (NRC, 1998).
• Budgeting and accounting processes that create disincentives for cost-
effective investments in maintenance and repair (NRC, 1998).
• The distributed nature of decision making about federal facilities invest-
ments and the short-term outlook of decision-makers, which result in a
lack of accountability for stewardship (NRC, 1998; 2004a).
Two additional long-standing issues affect federal facilities management and
investment. One is the variation in definitions related to maintenance and repair used
by federal government agencies. For example, in briefings to the committee, the
Department of Energy (DOE) and the National Oceanic and Atmos heric Admin
p
istration (NOAA) reported that they define maintenance and repair together as
Day to day work that is required to sustain property in a condition suitable for
it to be used for its designated purposes, including preventive, predictive and
corrective maintenance.
The Bureau of Overseas Buildings Operations of the Department of State
defines maintenance and repair as
Services and/or materials used for items of a recurring nature to prevent damage
which would be more costly to restore than to prevent. Examples include painting,
weather stripping and the preventive maintenance of building systems. A second
category of M&R [maintenance and repair] services includes services and/or
materials used for items of a minor nature such as repairs of broken pipes. A third
category consists of bulk M&R supplies for use in Government-owned and long-
term leased properties such as paint, lumber, plumbing supplies, and electrical wire.
And the U.S. Coast Guard defines maintenance, repair, and in-kind replace-
ments (M), as
Activities needed to keep a building or infrastructure operational, specifically
focusing on physical continuity. These activities are required to achieve the full
economic life of real property assets, components, assemblies, and systems. Also
included are in-kind replacements of components and systems at the end of their
economic life, such as a chiller for a chiller, or a roof for a roof. Energy retrofits
motivated by economic considerations also fall into this category. Additional “M”
work includes survey, inspection, and assessment work used to identify, scope,
and schedule “M” activities.
Those definitions and the definitions used by other agencies are tailored to the
methods of operating and the organizational culture of individual agencies, so, it
is difficult to compare levels of maintenance and repair investment among federal
OCR for page 18
18 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
agencies, to quantify those investments for the federal government as a whole, or
to benchmark investments with non-federal organizations.
A second issue is the variation in budgeting, priority setting, and execution
related to maintenance and repair investments. Agencies prepare their budget
requests for maintenance and repair funding (and all other programs) 2 years in
advance of the fiscal year in which the funding will be appropriated. Typically the
identification of maintenance and repair projects that require funding begins at
the field level. Methods for developing a total funding request vary. Some agencies
take past budgets and increase them by some percentage to cover inflation, new
program requirements, or a backlog of deferred maintenance projects. Others use
a guideline such as the NRC’s 2 to 4 percent of current replacement value, and
still others a facilities sustainment model (FSM) developed for the DOD.
Project priority setting takes place at the organization level typically associ-
ated with approval authority, although ranking may also occur at different points
as the lists of requirements work their way up the chain of command. Priorities
for specific maintenance and repair projects that will cost less than some dollar
amount (by statute or regulation) may be set at the local level, whereas priorities
for more expensive projects may be set at the headquarters level. The process
used to set priorities for projects may range from the discretion of an individual
to a committee discussion and may encompass a subjective ad hoc approach,
stakeholder requests, a very structured objective approach that uses matrices or
algorithms to rank projects, or combinations thereof.
The lack of standardization or comparability in developing funding requests
makes it difficult for individual agencies and the government as a whole to iden-
tify the beneficial outcomes or the adverse consequences of different investment
strategies, to share lessons learned, and to improve the outcomes of maintenance
and repair investments governmentwide.
IMPETUS FOR AND FOUNDATION OF
MORE SUSTAINABLE PRACTICES
Historically, obtaining funds to maintain the federal government’s buildings
and infrastructure has been a challenge (DOD, 2001; GAO, 2008). Senior execu-
tives and Congress are inundated with requests to support mandates and discre-
tionary programs, each accompanied with compelling messages and evidence.
In 2011, the challenge to find support for federal facilities investment is prob-
ably greater than any time in the recent past because of the increasing national
debt. The report Choosing the Nation’s Fiscal Future (NAPA and NRC, 2010)
shows that the federal government has been spending much more than it has been
collecting in revenues and will do so for the foreseeable future if current policies
are continued (Figure 1.3).
Because of the projected growth in federal spending for Medicare, Medicaid,
and Social Security, the report concludes that any efforts to rein in future defi-
OCR for page 19
INTRODUCTION 19
Gross Domestic Product 80
60
Percentage of
40
20
0
20 5
30
20 5
20 0
45
20 0
55
20 0
20 5
19 5
80
19 5
90
20 5
00
19 0
19 5
20 0
20 5
20 0
20 5
80
20
20 5
1
1
7
7
7
7
5
2
4
6
6
8
9
3
0
6
20
20
19
19
20
19
20
20
Medicare and Medicaid Social Security Defense and
Interest Revenues Other Domestic
FIGURE 1.3 The long-term budget outlook. SOURCE: NAPA and NRC, 2010.
Fig1-1.eps
cits must entail either large increases in taxes to support these programs, major
restraints on their growth, or some combination of the two (NAPA and NRC,
2010). It states that if the “choice is to keep the federal government’s share of
the economy close to the level of the past several decades, the government would
have to scale back what it does, and extremely difficult choices would have to
be made about what social goals to pursue less vigorously and what programs
to end” (NAPA and NRC, 2010, p. 2). A January 2011 report by GAO reaches
similar conclusions, noting that in the absence of policy changes, “the federal
government faces a rapid and unsustainable growth in debt. . . . Addressing the
long-term fiscal challenge . . . will likely require difficult decisions affecting both
federal spending and revenue” (GAO, 2011c, p. 8).
The current fiscal situation provides the impetus for reexamining practices
for federal facilities management, maintenance, and repair, and an opportunity to
propose practices that will be more sustainable in the long term. The foundation
of more sustainable practices is provided by portfolio-based facilities manage-
ment, information tools and technologies, and recognition of the role of facili-
ties in achieving public policy goals of energy independence and environmental
sustainability.
Portfolio-Based Facilities Management
Recognition of the costs of facilities, of the role of facilities in enabling
organization missions, of facilities’ effects on occupants’ health, safety, and
security, and of facilities’ effects on the environment, has been the impetus for
more strategic management approaches by both private-sector and government
organizations. One important change has been the shift from tactical concerns,
tasks, and practices oriented to the operation of individual buildings and structures
OCR for page 20
20 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
to a focus on the entire portfolio of facilities and integrated resource management
(NRC, 2004a). Portfolio-based facilities management has been defined (NRC,
2004a, p. 32) as a
systematic process of maintaining, upgrading, and operating physical assets cost
effectively. It combines engineering principles with sound business practices
and economic theory, and provides tools to facilitate a more organized, logical
approach to decision making. A facilities asset management approach allows for
both program or network-level management and project-level management and
thereby supports both executive-level and field-level decision making.
A portfolio-based facilities management approach “allows organizations to
integrate facilities considerations into corporate decision-making and strategic
planning processes” (NRC, 2004a, p. 32). Thus, facilities are treated as valuable
assets that contribute to the overall effectiveness of an organization.
Within the last 7 years, federal agencies have developed asset management
plans. These plans are updated annually and are intended to “help agencies take
a more strategic approach to real property [facilities and land] management by
indicating how real property moves the agency’s mission forward, outlining the
agency’s capital management plans, and describing how the agency plans to oper-
ate its facilities and dispose of unneeded real property, including listing current
and future disposal plans” (GAO, 2011b, pp. 6, 7).
Federal agencies have been implementing portfolio-based management pro-
cesses, but the level of sophistication varies. With a few exceptions, agencies have
not yet adopted more strategic, portfolio-based practices for linking maintenance
and repair investments to their organization’s overarching mission.
Information Tools and Technologies
Many factors are driving a more strategic approach to facilities management
and investment, and information tools and technologies are enabling it. Informa-
tion tools and technologies are now available for monitoring facilities’ condition,
energy use, and other performance dimensions; for collecting data in “real time”
to support strategic decision-making; for eliminating human error and bias; and
for increasing operational efficiencies.
Because organizations can operate around the clock by having business units
networked through the Internet and other technologies, the concept of workplace
also is changing. Alternative work arrangements, such as telework enabled by
technology, allow people to conduct work from home, airports, or other locations.
The trend is changing the demand for centralized office space while also making
the uninterrupted supply of power for telecommunications, cooling, and ventila-
tion ever more critical. All those factors both enable and require changes in how
federal facilities are managed, maintained, and repaired.
OCR for page 21
INTRODUCTION 21
The Role of Facilities in Public Policy Issues
While federal agencies have been implementing new management practices,
additional facilities-related goals have been established through legislation, exec
utive orders, and presidential memorandums. The genesis of many of those goals
is the ever-growing knowledge about the relationships between facilities and
the natural environment; between indoor environments and the health, safety,
and productivity of the people who use them; and about the magnitude of the
costs and resources required to operate and maintain facilities. The amount of
resources used by facilities and the costs of facilities have been noted previously.
With respect to the health, safety, and productivity of building occupants, cause-
effect relationships have been scientifically documented between waterborne
pathogens in water systems and Legionnaire’s disease and Pontiac fever; between
microorganisms growing in contaminated ventilation and humidification systems
and hyperensitivity pneumonitis and humidifier fever; between the release of
s
carbon monoxide and carbon monoxide poisoning; between the presence of radon,
second and smoke, and asbestos in buildings and lung cancer; and in connec-
h
tion with nonspecific symptoms—including eye, nose, and throat irritations—
sometimes referred to as “sick-building syndrome” (FFC, 2005).
As the managers of the largest portfolio of facilities in the United States,
federal agencies have been challenged to lead by example in operating their
buildings and structures more sustainably over their life cycles. Laws have been
enacted and other directives have been issued that establish goals of reducing the
use of water, energy, and fossil fuels; improving indoor environmental quality;
and reducing greenhouse gas emissions.
The Energy Independence and Security Act (EISA) of 2007, for example,
defined the attributes of high-performance green buildings and established a set of
goals and baselines for the reduction of energy, water, and fossil fuel use in federal
buildings. The EISA standards address new construction, major renovations of
existing structures, replacement of installed equipment, renovation, rehabilitation,
expansion, and remodeling of existing space. More specifically, the EISA defined
a high-performance green building as one that, during its life-cycle, as compared
with similar buildings (as measured by Commercial Buildings Energy Consump-
tion Survey data from the Energy Information Agency),
(A) Reduces energy, water, and material resource use.
(B) Improves indoor environmental quality, including reducing indoor pollu
tion, improving thermal comfort, and improving lighting and acoustic
environments that affect occupant health and productivity.
(C) Reduces negative impacts on the environment throughout the life-cycle of
the building, including air and water pollution and waste generation.
(D) Increases the use of environmentally preferable products, including bio-based,
recycled content, and nontoxic products with lower life-cycle impacts.
(E) Increases reuse and recycling opportunities.
OCR for page 22
22 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
(F)
Integrates systems in the building.
(G)
Reduces the environmental and energy impacts of transportation through
building location and site design that support a full range of transportation
choices for users of the building.
(H)
Considers indoor and outdoor effects of the building on human health
and the environment, including improvements in worker productivity, the
life-cycle impacts of building materials and operations, and other factors
considered to be appropriate.
Among other provisions, EISA requires that federal agencies reduce their
total energy consumption by 30 percent by 2015, relative to 2003 consumption.
Executive Order 13423, Strengthening Federal Environmental, Energy, and
Transportation Management, also issued in 2007, requires federal agencies to
r
educe their water intensity (gallons per square foot) by 2 percent each year
through FY 2015 for a total of 16 percent relative to water consumption in
FY 2007. It also requires federal agencies to ensure that 15 percent of the existing
federal capital asset building inventory of each agency incorporate the sustain-
able practices outlined in the “Guiding Principles for Federal Leadership in High
Performance and Sustainable Buildings” (hereinafter the Guiding Principles) by
the end of FY 2015.5
The overall goals and objectives of the Guiding Principles are to reduce
the total ownership cost of facilities; to improve energy efficiency and water
conservation; to provide safe, healthy, and productive built environments; and to
promote sustainable environmental stewardship. With respect to indoor environ-
mental quality, the Guiding Principles recommend that agencies meet industry
standards for ventilation, humidity, and temperature, and that they establish and
implement a moisture control strategy to prevent building damage and mold
c
ontamination—actions that are related primarily to the efficient operation and
maintenance of buildings.
Executive Order 13514, Federal Leadership in Environmental, Energy, and
Economic Performance, issued in 2009, challenges federal agencies to lead
by example in creating a clean energy economy and establishes more than 20
facilities-related goals for doing so. For the most part, agencies have not received
additional funding to fulfill these mandates; instead, they must shift funding away
from other programs and activities.
Because most facilities that federal agencies will be using for the next 20 to
30 years exist today, the primary methods for meeting those goals will be through
efficient operations, maintenance, repair and retrofitting of existing facilities, and
5The Guiding Principles are the following: (1) Employ integrated design principles; (2) optimize
energy performance; (3) protect and conserve water; (4) enhance indoor environmental quality; and
(5) reduce environmental impact of materials. Available at http://www.energystar.gov/ia/business/
Guiding_Principles.pdf.
OCR for page 23
INTRODUCTION 23
the consolidation of the overall federal facilities footprint, not new construction
(NRC, 2011).
Transforming the portfolio of federal facilities into one that is more economi-
cally, physically, and environmentally sustainable at the same time as budgets are
being cut is daunting. To help provide direction in doing it, the Federal Facilities
Council (FFC) 6 asked the National Research Council for its advice and assistance.
STATEMENT OF TASK
In October 2009, the National Research Council appointed an ad hoc commit-
tee of experts to develop methods, strategies, and procedures to predict outcomes
anticipated from investments in federal facilities’ maintenance and repair. The
committee was also asked to address the following questions:
• Are there ways to predict or quantify the outcomes that can be expected
from a given level of investment in maintenance and repair of federal
facilities or facilities’ systems?
• What risks do deteriorating facilities, deteriorating building systems (such
as mechanical and electrical), or deteriorating components (such as roofs
and foundations) pose to the achievement of a federal agency’s mission or
to other organizational outcomes (for example, physical security, operating
costs, worker recruitment and retention, and health care costs)?
• Do such risks vary by facility type (such as offices, hospitals, industrial,
and laboratories), by system, or by function (such as research and admin-
istrative)? Can the risks be quantified?
• What strategies, measures, and data should be in place to determine the
outcomes of facilities maintenance and repair investments? How can
those strategies, measures, and data be used to improve the outcomes of
investments?
• Are there effective communication strategies that federal facilities pro-
gram managers can use to inform decision-makers better about the cost-
effectiveness of levels of investment in facilities’ maintenance and repair?
THE COMMITTEE’S APPROACH
The committee members had expertise in facilities management, engineering,
budgeting and finance, information technologies and data collection, the develop-
ment of facilities-related models and performance measures, and risk identifica-
tion, analysis, mitigation, and communication. The members have worked in
6The FFC is a cooperative association of more than 20 federal departments and agencies operating
under the auspices of the National Research Council. The FFC’s mission is to identify and advance
technologies, processes, and management practices that improve the performance of federal facilities
over their entire life cycle, from planning to disposal.
OCR for page 24
24 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
federal agencies, local governments, industry, and academia (see Appendix A for
biosketches of committee members).
The committee began its work in December 2009 with a review of previous
NRC reports on federal facilities management. Those reports included Committing
to the Cost of Ownership: Maintenance and Repair of Public Buildings (NRC,
1990) and Stewardship of Federal Facilities: A Proactive Strategy for Protecting
the Nation’s Public Assets (NRC, 1998), both of which focused on the fiduciary
responsibility of maintaining the nation’s public assets. Investments in Federal
Facilities: Asset Management Strategies for the 21st Century (NRC, 2004a) intro-
duced strategies for investing in federal facilities from planning through disposal
that were based on an analysis of best practices in private-sector and public-sector
organizations. Core Competencies for Federal Facilities Asset Management
Through 2020 (NRC, 2008) projected the skills and knowledge necessary to man-
age federal facilities now and into the future.
During its first three meetings, the committee focused on gathering additional
information from representatives of federal, private-sector, and professional orga-
nizations. The committee was briefed by the chair of the FFC, which sponsored
this report. The committee also requested presentations from representatives of
IBM, General Motors, General Dynamics, and the Association of Higher Educa-
tion Facilities Officers-APPA and by three major providers of facility assessment
consulting services: Parsons, Whitestone Research, and VFA Inc. (formerly
VanderWeil Facility Advisors). Those organizations were contacted because the
committee members on the basis of their experience with and knowledge of
the facilities management profession believed them to be industry leaders in ef-
fective maintenance and repair-related practices. The committee also gathered
information from the following federal agencies:
• U.S. Army Corps of Engineers
• U.S. Army Engineer and Research Development Center, Construction
Engineering Research Laboratory
• Naval Facilities Engineering Command
• Naval Facilities Engineering Service Center
• NOAA
• DOE, including the Office of Science, the National Nuclear Secu-
rity Administration, and the Office of Engineering and Construction
Management
• U.S. Air Force
• Bureau of Overseas Buildings Operations of the U.S. Department of State
• U.S. Coast Guard
• National Aeronautics and Space Administration
• Smithsonian Institution
• Architect of the Capitol
• OMB
OCR for page 25
INTRODUCTION 25
• GAO
• FASAB
The committee acknowledges that the various organizations that provided
information do not represent a scientific or random sampling of organizations.
Nor were the various organizations asked to comment on each other’s processes
and practices or to be involved in any way in the formulation of the committee’s
findings and recommendations.
In addition to the briefings, individual committee members researched the
literature on international best practices for facilities management and finance, on
risk and probability analysis models, and on tools and technologies for facilities
management-related applications. The committee debated the issues and devel-
oped draft findings, then reviewed and integrated information to arrive at its final
findings and recommendations. The resulting report represents a consensus of
the committee that is based on a synthesis of the committee’s data gathering and
research, and on the individual members’ expertise and experience. Statements
based solely on the committee’s collective opinions are so identified.
ORGANIZATION OF THIS REPORT
This report proposes new approaches to making decisions about allocating
limited resources to achieve multiple benefits from investments in maintenance
and repair of federal facilities and about managing the risks associated with
deteriorating systems and components. It is addressed to several different audi-
ences: federal facilities program managers, operating groups and their contractors;
decision-makers in the administration and Congress; federal departments, agen-
cies, and their advisors; and program and budget analysts throughout the federal
government. Decision-makers, facilities program managers, and program and
budget analysts in state and local governments and in other organizations may also
find value in the report inasmuch as they face many of the same issues as their
federal counterparts. Because this report addresses multiple audiences, different
readers will find different chapters to be of greatest interest.
The Summary describes issues that are driving the need for a new approach
to investments in maintenance and repair of federal facilities, identifies the asis
b
of change, and contains the report’s findings and recommendations. A more
e
xtensive discussion of the findings and recommendations is in Chapter 6.
Chapter 1, “Introduction,” contains statistical information about the portfolio
of federal facilities, long-standing facilities investment and management issues, the
impetus for and foundation of more sustainable maintenance and repair practices,
the committee’s statement of task, and the committee’s approach to fulfilling its task.
Chapter 2, “Outcomes and Risks Associated with Investments in Mainte-
nance and Repair,” briefly describes the processes used by federal agencies for
identifying maintenance and repair requirements and for developing funding
OCR for page 26
26 PREDICTING OUTCOMES OF INVESTMENTS IN FEDERAL FACILITIES
requests, the beneficial outcomes that can be expected from maintenance and
repair investment, and the risks posed by deteriorating buildings, infrastructure,
systems, and components.
Chapter 3, “Data, Tools, and Technologies to Support Investments in Main-
tenance and Repair,” identifies an array of available and emerging technologies
for data acquisition and tracking, indexes and models for measuring outcomes
of investments in maintenance and repair, and predictive models for risk-based
decision support.
Chapter 4, “Effective Practices for Investments in Maintenance and Repair,”
describes strategic practices used by public-sector and private-sector organiza-
tions that would improve the outcomes of investments in maintenance and repair
of federal facilities.
Chapter 5, “Communicating Outcomes and Risk,” focuses on strategies that
federal facilities program managers can use to communicate more effectively with
other decision-makers about the outcomes and risks associated with a given level
of investment in facilities maintenance and repair.
Chapter 6, “Findings and Recommendations,” presents detailed information
about the committee’s findings and restates its recommendations.
Chapter 7, “Implementing a Risk-Based Strategy for Investments in Federal
Facilities’ Maintenance and Repair,” is intended to show how federal facilities
program managers can put some of the report’s recommendations into action. It
suggests ways to quantify the beneficial outcomes, and offers guidelines for devel
oping a longer-range strategic plan, guidelines for developing an annual budget
submission, and methods for identifying risks related to deteriorating facilities’
systems and components.
Appendixes A and B contain background information about the committee
members and a list of committee meetings and briefings, respectively.
Appendix C is more technical than other sections of the report and is intended
primarily for federal facilities managers. It provides some fundamentals of a risk-
based approach, including basic principles of probability analysis, and examples
of quantifying outcomes of maintenance and repair investments.
