Investments in Federal Facilities Asset Management Strategies for the 21st Century (2004) / Chapter Skim
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6 Adapting Principles and Policies from Best-Practice Organizations to the Federal Operating Environment
6 Adapting Principles and Policies from Best-Practice Organizations to the Federal Operating Environment
Pages 89-117
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From page 89... ...
In this chapter, the committee addresses how the identified principles and policies from best-practice organizations could be tailored to the structure of the federal government and to the goals, resources, and cultures of its individual departments and agencies. The chapter first reviews special aspects of the federal operating environment that must be considered in any adaptation of the identified principles and policies.
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From page 90... ...
In the federal government, the accepted overall goal is to promote the general welfare of the public; federal departments, independent agencies, corporations, and commissions each have multiple missions and programs intended to help achieve the overall goal. However, the electoral process ensures change in executive and legislative leadership on a regular, relatively short-term basis.
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From page 91... ...
The Nature of Federal Facilities Investments Another distinction between private-sector organizations and the federal government relates to who pays for and who benefits from the facilities and infrastructure in which they invest. Federal facilities investments are funded by the American public and therefore incur costs and confer benefits on a wide spectrum of people and organizations.
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From page 92... ...
Decision makers in Congress and federal departments and agencies are asked to balance the competing demands of very different programs: Funding for facilities investments must be weighed against funding for medical research, weapons systems, homeland security, education, and numerous other public programs. The knowledge that resources are limited and trade-offs will be made contributes to a competitive rather than a collaborative environment for facilities investment decision making at all steps in the process.
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From page 93... ...
12893, "Principles for Federal Infrastructure Investments"; OMB Circular A11: Part 3: "Planning, Budgeting, and Acquisition of Capital Assets"; OMB's Capital Programming Guide, a Supplement to Part 3; and Executive Order No. 13327, "Federal Real Property Asset Management," signed February 4, 2004.
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From page 94... ...
In the federal government, decisions about federal facilities investments involve multiple stakeholders: Congress and its various committees, the administration, federal departments and agencies that own facilities, operating groups that manage facilities portfolios, the OMB, agencies that use facilities provided by others, special interest constituencies, the GAO, and others. These stakeholder groups have differing terminologies, responsibilities, objectives, and values.
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From page 95... ...
For these reasons and others, the environment for decision making about federal facilities investments can presently be characterized as one of adversarial relationships, gamesmanship, miscommunication, and mistrust. The committee believes that a framework of procedures, required information, and valuation criteria based on the principles and policies used by bestpractice organizations for facilities investment and management should be adopted.
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From page 96... ...
In recent years, federal departments and agencies, including but not limited to the Department of Transportation, the Coast Guard, and the GSA, have begun to implement facilities asset management programs that consider both the portfolio and individual investments. Portfolio-based approaches should be implemented in every department and agency with responsibility for facilities management.
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From page 97... ...
. Each federal department and agency should ensure it has the requisite technical and business skills to imple ment a facilities asset management approach by providing specialized training for its incumbent facilities asset management staff and by re cruiting individuals with these skills.
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From page 98... ...
. Some federal departments and agencies are incurring significant costs for operating and maintaining facilities that they no longer need to support today's missions.
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From page 99... ...
. The lack of alignment between a department's or agency's missions and its facilities portfolio, coupled with the cost of operating and maintaining excess facilities, can require extraordinary measures to effect some improvement, particularly when the goals, objectives, and values of the President, Congress, departments, and agencies may be so different that a compromise cannot be reached in the traditional operating environment.
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From page 100... ...
In regard to facilities investments, most federal departments and agencies have not yet linked their strategic planners and finance directors with their facilities management operating groups, nor have they demonstrably integrated facilities investment decision making into their organizational strategic planning processes. Instead, decision making for facilities investments is typically a reactive planning process that has been described as follows: It begins with the lowest or low-level units of an organization identifying the deficiencies and threats they face.
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From page 101... ...
The CIB is responsible for evaluating, prioritizing, and measuring proposals against the VA's strategic plan and OMB's requirements. The committee believes that all federal departments and agencies should integrate facilities investment decisions into their organizational strategic planning processes.
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From page 102... ...
It is intended to provide guidance for a disciplined capital programming process to ensure that capital assets contribute to the achievement of agency strategic goals and objectives (OMB, 1997) .5 Federal departments and agencies have also issued internal guidance for developing their own business case analyses for facilities investments.
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From page 103... ...
If additional study is justified, it is undertaken in an iterative manner such that significant resources are only expended once a proposal becomes a project. In contrast, federal departments and agencies may invest significant resources in conducting an alternatives analysis and conceptual planning, in some cases taking a project to a 35 per cent design phase before a proposal is presented to OMB or Congress.
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From page 104... ...
Common terminology promotes improved communications among stakeholders with widely differing educational and technical backgrounds, values, and objectives. For effective communication to occur, facilities asset management staff should have the capacity and skills to understand the relationship of facilities to the big picture -- that is, the organizational mission -- and to communicate that understanding.
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From page 105... ...
. The focus on the first costs of facilities investments is reinforced by the budget scorekeeping rules mandated as part of the Budget Enforce
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From page 106... ...
. Congress and the administration should jointly lead an effort to revise the budget scorekeeping rules to support facilities investments that are cost-effective in the long term and recog nize a full range of costs and benefits, both quantitative and qualitative.
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From page 107... ...
As do private-sector organizations, federal departments and agencies acquire the use of space and equipment through ownership and through operating and capital leases. Based on the committee's interviews and research activities, the criteria departments and agencies use to determine if it is more cost-effective to own or lease facilities to support a given function are not clear or uniform.
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From page 108... ...
However, because the results of many federal programs or services are qualitative in nature and occur over long periods of time -- for example, the regulation of air quality-measuring them can be challenging. Federal organizations are faced with several issues when they develop performance measures to capture the outcomes of facilities investments and management as they apply to portfolios of facilities.
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From page 109... ...
To the committee's knowledge, no federal department or agency gathers consistent, organized, long-term feedback to determine if facilities investments met organizational objectives, solved operational problems, or reduced long-term operating costs. This type of feedback is essential if the outcomes of facilities investments and management processes are to be measured and improved.
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From page 110... ...
Instead, decision-making authority and decision-making responsibility are spread throughout the executive and legislative branches, leading to a lack of clear-cut accountability for facilities investment outcomes. In the instance of facilities management and maintenance, the linkages between responsibility, authority, and accountability are lacking at several levels.
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From page 111... ...
Several elements of the framework of principles and policies recommended in this report will enhance accountability for the outcomes of federal facilities investments. Implementation of facilities asset management approaches, coupled with adequate resources and authority for allocating those resources, will enhance accountability for outcomes within facilities management organizations.
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From page 112... ...
Imple mentation of facilities asset management approaches and consistent use of business case analyses will further enhance organizational account ability.
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From page 113... ...
AN OVERALL STRATEGY FOR IMPLEMENTATION Transforming decision-making processes, outcomes, and the decision-making environment for federal facilities investments will require sponsorship, leadership, and a commitment of time and resources from many people at all levels of government and from some people outside the government. Implementation of some of the committee's recommendations can begin immediately within federal departments and agencies that invest in and manage significant portfolios of fa
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From page 114... ...
. If the committee's recommendations for improved decision making for federal facilities investments are to be implemented successfully, these interactions must be understood and enabled by all the participants in federal facilities investments and management.
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From page 115... ...
agency management, program and financial staff, and OMB occur just once a year as part of the budget cycle. Building a case for proactive facility investments requires that dialogue be initiated and sustained between and among the various stakeholders using terms of reference that all can relate to and act upon.
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From page 116... ...
Establish an executive-level commission with representatives from the private sector, academia, and the ranks of the federal government to determine how the identified principles and policies can be applied in the federal government to improve the outcomes of decision-making and management processes for federal facilities investments within a time certain. The executive-level commission should include representatives from nonfederal organizations acknowledged as leaders in managing large organizations, finance, engineering, facilities asset management, and other appropriate areas.
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From page 117... ...
ADAPTING PRINCIPLES AND POLICIES FROM BEST-PRACTICE ORGANIZATIONS 117 · Improved alignment between federal facilities portfolios and missions to better support our nation's goals, · Responsible stewardship of federal facilities and federal funds, · Substantial savings in facilities investments and life-cycle costs, · Better use of available resources -- people, facilities, and funding, · Creation of a collaborative environment for federal facilities investment decision making.
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