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Budgeting for Facilities Maintenance and Repair Activities Appendix B Responses to the Committee's Questionnaire on Budgeting for the Maintenance and Repair of Federal Facilities In 1990 the Building Research Board (BRB) published a report entitled Committing to the Cost of Ownership—Maintenance and Repair of Public Buildings. The report has been widely distributed, and one finding and recommendation in particular has been quoted often: “An appropriate budget allocation for routine M&R [maintenance and repair] for a substantial inventory of facilities will typically be in the range of two to four percent of the aggregate current 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.” Because maintenance and repair budgets typically include numerous small projects for which it is uneconomical to develop detailed justification, federal agencies—like most facility owners—often are in the situation mentioned earlier by the committee of lacking “specific information upon which to base an M&R budget.” And since most federal agencies have experienced difficulties from time to time in obtaining funds to do needed work, the budget guideline proposed in the BRB report of 2 to 4
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Budgeting for Facilities Maintenance and Repair Activities percent of the aggregate current replacement value (CRV) of the facilities in an agency's inventory was endorsed by many managers of federal facilities. Indeed, at the time the report was published, it was believed that the guideline would be widely adopted and that its use would usher in a new era of stable, adequate funding for federal facilities. However, indications are that the hoped-for benefits have not been fully realized. A survey was conducted by the FFC's Standing Committee on Operations and Maintenance to try to determine the views of federal agencies on and their experiences with the recommended guideline. To conduct the survey, the committee developed a questionnaire that was distributed to the agencies represented on the committee. Responses, which are summarized below, were received from 12 agencies: Air Force Army Center for Public Works Department of Veterans Affairs Food and Drug Administration General Services Administration Indian Health Service International Broadcasting Bureau National Aeronautics and Space Administration Naval Facilities Engineering Command National Institutes of Health Smithsonian Institution State Department The questionnaire included 11 questions, the first two of which were answered by all respondents. Questions 3 through 8 were answered by respondents from agencies that have used the BRB guideline. Questions 9 through 11 were answered by respondents from agencies that have not used the BRB guideline.
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Budgeting for Facilities Maintenance and Repair Activities QUESTION 1: Briefly explain what budget categories are used in developing budgets for facilities in your agency, the definitions of those categories, and how the budgets are structured or organized. AIR FORCE (AF) The AF budget structure for upkeep and operation of infrastructure/facilities is called Real Property Maintenance Activities (RPMA). RPMA provides funding for the majority of utilities and facilities on an installation but excludes Military Family Housing, Military Construction (MILCON), and environmental types of projects. RPMA is divided into two general categories: Real Property Services (RPS) and Real Property Maintenance (RPM). RPS includes the production or purchase of utilities and engineering services such as fire protection, aircraft crash/rescue, snow removal, refuse collection, rents, and leases. RPM includes two categories: minor construction (additions, expansions, or major alterations to facilities and infrastructure of less than $300,000 in cost) and maintenance and repair (M&R) activities performed by in-house or contract work forces. The AF constructs facilities projects greater than $300,000 through the P-341 Unspecified Minor Construction and Military Construction programs, which must be authorized and funded by Congress. Air Force as a part of RPM is budgeted and tracked separately. Subcategories for various commodities, such as supplies, construction materials, civilian pay, and contract costs, are also budgeted and tracked. The Department of Defense (DoD) uses a model to predict the Backlog of Maintenance and Repair (BMAR) in dollars as a result of the level of funding. The Air Force also calculates funding as a percentage of Plant Replacement Value (PRV) to evaluate the effects of funding levels.
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Budgeting for Facilities Maintenance and Repair Activities ARMY CENTER FOR PUBLIC WORKS (Army-CPW) The Army is currently using Annual Recurring Requirements and Backlog of Maintenance to adjust annual budgets for maintenance and repair. DEPARTMENT OF VETERANS AFFAIRS (DVA) Budget categories are used in developing budgets for facilities. The DVA has a fund designated for Non-Recurring Maintenance (NRM) that is distributed by four regional offices for maintenance projects beyond the budget capability of the recurring maintenance budget. Recurring maintenance is done each year on a routine basis usually by hospital engineering service staff supplemented by small contracts. NRM projects are usually designed by contract with architect/engineer firms and bid or negotiated with small and/or minority business firms. The NRM funding varies each year; it is generally between $200M and $300M. Recurring budgets are determined locally from Medical Center Operating funds. No nationwide total is kept for maintenance funds as a category. FOOD AND DRUG ADMINISTRATION (FDA) Buildings and Facilities Budget. Budget categories used in developing budgets for facilities include Utility Budget, Contract Budget, Administration Budget, and Salaries and Expense Budget. GENERAL SERVICES ADMINISTRATION (GSA) GSA uses two categories: Operations and Maintenance (O&M) and Repairs and Alterations (R&A). O&M includes operation, maintenance, and minor repairs (up to $10,000); R&Aincludes all repairs, replacements, improvements, and alterations in excess of $10,000, with no upper limit.
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Budgeting for Facilities Maintenance and Repair Activities INDIAN HEALTH SERVICE (IHS) The IHS uses the following two categories to formulate its budget for facilities: (1) Maintenance and Improvement Budget Activity and (2) Facility Support Budget Activity. (See Attachment 1 for detailed breakdown of the two categories.) INTERNATIONAL BROADCASTING BUREAU (IBB) M&R is not budgeted by category at the IBB. It is instead budgeted on an individual project basis with funding provided at approximately 30 percent of the backlog. NATIONAL AERONAUTICS AND SPACE ADMINISTRATION (NASA) None—NASA is funded for (1) human space flight, (2) science and technology, and (3) mission support. The major programs in the agency fund field installation activities, which includes M&R. NATIONAL INSTITUTES OF HEALTH (NIH) Maintenance funds are provided by an assessment of the various institutes that make up the National Institutes of Health. This assessment covers the cost of the work done by government personnel and minor repairs made by contractors. A second source of funds is a direct appropriation from Congress as part of the Building and Facilities Budget. This money covers major repairs and improvements that are accomplished by contract. NAVAL FACILITIES ENGINEERING COMMAND (NAV) M&R funds are a portion of the Base Support Budget. The Base Support Budget is broken into special-interest (SI) items. This SI for is preventive maintenance. Activities submit budgets to their major claimants. Major claimants then submit to NAVCOMPT. For Base Support, a BS-1 Budget exhibit is submitted for every activity.
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Budgeting for Facilities Maintenance and Repair Activities SMITHSONIAN (SI) The Smithsonian Institution has three categories of budgets. The major projects are funded by Congress, usually require architect-engineer design effort, and are usually accomplished by a construction contractor. Routine maintenance and repair is funded via the salary and expense budget of the Office of Plant Services. Minor maintenance and repair is funded by the individual buildings' salary and expense budget for individual Building Maintenance Departments (BMDs). The last two budgets can contain funds for work and for other services as well. STATE DEPARTMENT (SD) 7901—Routine maintenance 7902—Special maintenance and repair—projects 7903—Improvement—nonmaintenance 7904—Major rehabilitation and system requirements; projects plus salaries and expenses QUESTION 2: Has your agency adopted—or does it use—the 2 to 4 percent of CRV budgeting guideline recommended by the BRB? Respondents from five agencies answered yes: GSA, IHS, NASA (qualified), NAVFAC (qualified), and NIH (however, NIH has not been funded at this level). These respondents answered Questions 3 through 8. Respondents from seven agencies answered no: AF (the AF uses DoD guidance in Renewing the Built Environment); A-CPW, DVA, FDA, IBB, SI, and SD. These respondents answered Questions 9 through 11. QUESTION 3: How does your agency use the guideline? GSA: Two percent is used to establish the repair and alteration (R&A) base budget for repairs/replacements/improvements/alterations less
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Budgeting for Facilities Maintenance and Repair Activities than the congressional authorization (prospectus) limitation of $1.65 million, which is increased annually for inflation. IHS IHS utilizes the guideline as a reference in justifying to the Congress the need to increase the current funding of the maintenance and improvement budget activity in the agency. NASA As a guideline, a metric, and a budgeting tool. NAV In the past, NAVFAC has expended approximately 1.85 percent CPV (current plant value) on maintenance and repair. This allows us to keep our head above water while getting BMAR (critical deficiencies needing correction within one year). We calculate that 2.3 percent CPV will hold BMAR steady and 2.5 percent CPV will allow us to reduce BMAR. NIH As our initial request in the budget process. QUESTION 4: Why does your agency use the guideline? GSA To ensure a base funding level to keep buildings operational and safe and to meet tenants' changing needs. IHS To justify to the Congress a methodology that will hopefully increase our current maintenance funding. NASA Because of a present lack of a “ground-up” budget based on discrete requirements. NAV (1) Determining requirements, (2) comparing claimant exemptions, and (3) defending budget requirements. NIH This appears to be the only guidance developed on a national basis.
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Budgeting for Facilities Maintenance and Repair Activities QUESTION 5: How does your agency calculate CRV? GSA Based on the amounts and types of square footage in a building (office, special storage), a construction cost for office space is established, adjusted for other types of space using rent factors, adjusted for locality by “Means” state factors, and escalated in next operating budget year. IHS An architect-engineer firm conducted a detailed geographic survey for the identification of the replacement cost of all the IHS property owned and operated for direct or indirect health care. The cost estimate is escalated for inflation each year. NASA Original book value and capitalized improvements are individually escalated to present value using the Engineering News Record (ENR) building cost index (BCI) for the 20 cities average and then summed together. NAV Original cost to the government escalated to the current year plus improvement costs escalated to the current year. NIH This is calculated by multiplying the square feet of the specific facility categories by their associated unit costs. The units have been inflated to budget-year dollars. Soft costs (design, inspection, etc.) are not included. QUESTION 6: In what ways has use of the guideline benefited your agency? GSA By identifying to management a base program needed to offset deterioration and obsolescence. It becomes the first priority for funding in each budget year's budget development. IHS The Congress has not been made aware of the overall deficit in funding and while we have not been successful in obtaining sufficient funding from the Congress to reduce our backlog of essential maintenance and repair, Congress has provided about 50
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Budgeting for Facilities Maintenance and Repair Activities percent of the funds necessary to stabilize the growth of the backlog of essential maintenance and repair. NAV The guideline provides a quick determination of requirements and a normalized base of comparison from year to year and claimant to claimant, etc. NIH This has provided an independent basis for our requests. QUESTION 7: Have any of the benefits your agency expected to receive from use of the guideline not been realized? (Please explain.) GSA None to date. IHS The benefits that IHS fully expected to receive from use of the guideline have not been realized. We have been unsuccessful in obtaining the maintenance and repair figure the guideline would establish as the required funding for the agency. However, we have been successful in receiving increases in the annual maintenance and repair budget. Our agency maintains a computerized data bank of the backlog of essential maintenance and repair tasks needed to bring the real property to acceptable industry standards. The data bank is called the Facilities Engineering Deficiency System (FEDS). A detailed survey of each installation is conducted every five years by a team of consultants. In addition, local IHS facilities staff conduct annual inspections that identify other deficiencies that are added to the data bank in between the scheduled Deep Look Surveys. Currently our backlog of essential maintenance and repairs is approximately $287 million. It is necessary that we obtain an budget activity in the amount of $44 million just to maintain zero growth in the backlog. This amounts to approximately 3 percent of the current replacement value. We feel that the data bank is a strong factor in the justification to the Congress that we must have more funding if we are to maintain the facilities in a manner that will allow us to operate them.
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Budgeting for Facilities Maintenance and Repair Activities NASA No NAV Before FY 1994, percent CPV had been used to determine requirements. NAVFAC went with actual dollars required to hold BMAR steady for FY 94. NIH While we have been able to see our appropriated funds for increase by a factor of 1.7 to 2.0, we have been unable to see the increases sufficient to provide adequate funding. QUESTION 8: What difficulties have you experienced in using the guideline and how could they be eliminated? GSA Internally, there have been no difficulties in the congressional appropriations process. This amount has changed to meet congressionally directed needs for other projects or budget reduction. IHS IHS has not experienced any difficulty with the guideline. NASA There has been much internal discussion of what should be counted in the metric calculation and the CRV calculation method. NAV Some offices like to use level of effort and then “ramp” this up or down rather than a percent of CPV. They feel percent CPV is not an accurate indicator. These issues could be eliminated by doing a study to show that percent CPV is an accurate indicator/predicator. NIH The method for calculating replacement costs could be more specifically defined, as well as what elements are included in the overall definition of M&R.
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Budgeting for Facilities Maintenance and Repair Activities QUESTION 9: Why has your agency not used the guideline? AF We use the DoD “standard” instead. We selected 1 percent of plant replacement value (PRV) (calculated by estimating the budget-year cost to replace the facility with one built to current construction standards) as the basis to sustain status quo conditions at our installations. Each year commanders assess the condition of their facilities with respect to how well they support their mission execution. The basic question is “Do you have to expend extra manpower because of the facility to get your job done?” The cost to raise “degraded” and “unsatisfactory” facilities to satisfactory are added to the basic 1 percent of PRV sustainment level to establish budget goals. ARMY We have been depending on a more costly method of developing our annual budget. It appears that cost constraints will require a change in thinking. FDA Because most properties are leased under GSA's control. IBB (1) work for the IBB is not well defined. Because of rapidly changing broadcast technology and a constantly evolving IBB mission, many of our projects become enhancements. (2) Our work is currently derived from an existing backlog. (3) We are more constrained by our ability to obligate rather than by backlog funds. SI The Smithsonian uses a method focused on actual requirements. This method starts with regular in-house facility inspections and other means of defining the Backlog of Essential Maintenance and Repair (BEMAR). The budget requests are based upon the BEMAR. Often the Office of Management and Budget (OMB) dictates ceilings on our requests. On occasion, Congress has added funds in excess of the OMB ceiling.
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Budgeting for Facilities Maintenance and Repair Activities QUESTION 10: What changes would need to be made to permit your agency to use the guideline? AF We need a better statistical basis for our budgets. Variables such as facility type, location, occupancy, cost history, manpower support requirements, and churn factors are needed in addition to PRV to focus budgets on problems. We are also working to educate our installation commanders on the effect that quality facilities have on work force performance. Most commanders will now support budget requests to sustain and improve facilities because good facilities help make improvements in mission performance. ARMY We are considering developing new budget requirements based on the CRV. This method is currently under development and validation. DVA The manner in which the VA's budget is presented and approved by Congress. FDA FDA would like direct control so as to request funding directly from Congress. IBB A lack of mission stability currently impedes allocation of maintenance resources based on CRV guidelines. We are currently trying to decide the amount of resources to allocate to maintain facilities that may soon be closed down. NIH (1) OMB needs to adopt the guideline. (2) The budget process should automatically adjust operating funds appropriately for all new facility construction. SI We would need to be convinced that requesting funds at an overall average level based upon the value of our facility assets would be more effective in obtaining funds than our current system of basing our requests on actual need.
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Budgeting for Facilities Maintenance and Repair Activities SD Local currency exchanges, climates (both physical and business) cause fluctuations in costs that cannot be obtained through any formula, except on a case-by-case basis at locations where activities take place. QUESTION 11: Has your agency benefited indirectly from the guideline? AF Any guideline helps call attention to the importance of facilities, and the BRB guideline has helped in that respect. Other results have been minimal. ARMY Yes. We have pointed out that the Army budgets are much lower than the 2 to 4 percent of the CRV. Many of the budget personnel realize that the accounts are underfunded, but cannot find the money to increase the budget. We are having a hard time defining our real requirements in our downsizing Army. DVA Individual medical centers have used the guideline as one of the factors in analyzing their budgets. GSA The concept has been presented at the International Facility Management Association's national conference in Denver (Oct. 93) as an approach for program planning and budgeting. It provided recognition for GSA 's efforts. IBB Yes. We use the guideline (and a CRV estimate) when we ask the United States Information Agency for our funding allocation. Maintenance funding requests to USIA and OMB are based on the CRV guideline. NIH Yes. As noted above, the guideline has served as an independent justification for our elevated budget requests. SI Yes. All efforts that increase the awareness of the need for funds tend to help us obtain more funds.
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Budgeting for Facilities Maintenance and Repair Activities SD Only in that use of the guideline provides a baseline for U.S. costing, not specifically for any post abroad.
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Budgeting for Facilities Maintenance and Repair Activities ATTACHMENT 1 The Indian Health Service (IHS) uses the following two categories to formulate its budget for facilities: MAINTENANCE AND IMPROVEMENT BUDGET ACTIVITY—This budget activity provides resources that the IHS uses to maintain, repair, and improve real property. This activity does not include personnel costs to perform the work. This budget activity encompasses the following categories: REAL PROPERTY MAINTENANCE—This category encompasses recurring and nonrecurring maintenance as outlined below. Recurring Maintenance—Routine requirements to maintain existing federal and tribal-owned health care facilities in good repair and to perform preventive maintenance on facilities and real-property equipment. The following tasks are included: Procurement of recurring bench stock for real-property repairs. Issuance of service contracts for preventive maintenance, testing, and inspection of real-property equipment. Local facility maintenance and improvement projects (|lessthan| $25,000). Nonrecurring Maintenance—Construction projects to accomplish needed maintenance and improvements to existing space so that the facilities will be better suited to deliver health care services. This category includes the following types of projects: Compliance of buildings and grounds with health care accreditation requirements. Improvements to existing facilities. Buildings and grounds code compliance.
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Budgeting for Facilities Maintenance and Repair Activities • Compliance with public laws (handicapped accessibility, energy conservation and environmental compliance) FACILITIES SUPPORT BUDGET ACTIVITY—This activity provides resources that the IHS uses to staff and support its permanent engineering employees as well as certain nonpersonnel-related operating costs. The following categories are included: SALARIES—To staff and support headquarters, regional office, area, district, and installation, engineering activities carried out directly by permanent federal employees or, in certain cases, indirectly by tribal contractors performing the work for the government. The following categories are included: Personnel who manage and implement the IHS health care facilities maintenance, repair, and improvement program. Personnel who manage and implement the facilities planning program. Personnel who manage and implement new and replacement facilities construction programs. Personnel who manage and implement the biomedical equipment maintenance and repair program. Personnel who manage the sanitation facilities construction program in Indian country. Personnel who manage and implement the environmental health program. Personnel who manage and implement the real-property program. LEASES—This encompasses leases for additional space to support the health care program. UTILITIES—Electricity, natural gas, propane, water, etc. PERSONAL PROPERTY MAINTENANCE (Non biomedical)—This includes equipment such as dishwashers, mechanical sweepers, lawn mowers, tractors, vacuum cleaners,
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Budgeting for Facilities Maintenance and Repair Activities prtable air conditioners, spark plugs, air filters, medical air compressor, etc. Recurring bench stock for repairs Service contracts for preventive maintence of personal property (nonbiomedical) equipmemt. PERSONAL PROPERTY MAINTENANCE (Biomedical) This includes equipments for direct and indirect patient care such as CAT scanners, X-rays, defibrilators, and centrifuges. OFFICE ADMINISTRATION Office supplies for engineering office administration (e.g., paper, pencil, forms). Service contracts for personal property used in engineering administration (e.g., computers, photocopying, CADD equipment).
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