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Facility Life Cycles and the Acquisition Process To provide context for the task group's framework, it is important to understand the concept of facility life cycles and the acquisition process as it is generally practiced by federal agencies. FACILITY LIFE CYCLES Facilities pass through a number of stages during their lifetimes: planning, design, construction, start-up, operation and use, renewal or revitalization, and disposal (see Figure 2. 1~. Most facilities are designed to provide a minimum acceptable level of service of 30 years. With proper maintenance and management, facilities may perform adequately for 100 years or longer and may serve several different functions over that time. The actual service life is dependent upon such factors as quality of design; quality of construction; durability of construction materials and component systems; incorporated technology; location and local climate; use and intensity of use; type of operation and maintenance methods used; and damage caused by natural disasters and human error (NRC, 1998~. \/ 5~°°-~P/4 \ \ 8b0-up ~ Figure 2-1 Facility life-cycle. 1 7
18 Sustainable Federal Facilities The total cost of facility ownership is the "total of all expenditures an owner wit! make over the course of the building's service lifetime" (NRC, 1990). These costs will include conceptual planning; design; construction; maintenance; repairs; replacements; alterations; and normal operations, such as heating, cooling, lighting, and disposal. Of the total ownership costs, design and construction expenditures, the so-called "first costs" of a facility, will account for 5-10 percent of the total life-cycle costs. In contrast, operation and maintenance costs will account for 60-85 percent of the total life-cycle costs, with land acquisition, conceptual planning, renewal or revitalization, and disposal accounting for the remaining 5-35 percent (NRC, 19981. ~ FACILITY ACQUISITION Executive Order 13123 defines acquisition as . . acquiring by contract supplies or services (including construction) by and for the use of the Federal Government through purchase or lease, whether the supplies or services are already in existence or must be created, developed, demonstrated, and evaluated. Acquisition begins at the point when agency needs are established and includes the description of requirements to satisfy agency needs, solicitation and selection of sources, award of contracts, contract financing, contract performance, contract administration, and those technical and management functions directly related to the process of fulfilling agency needs by contract. The federal government has not established a government-wide process for acquiring facilities, although it has established broad guidance through legislation and regulations. Using this guidance federal agencies have tailored their processes to reflect mission, culture, and resources. Thus, although agencies follow similar procedures to acquire facilities, the steps in the procedure may not occur in exactly the same sequence in all agencies nor will the steps necessarily be called by the same names. With these caveats in mind, a general process for federal facilities acquisition is shown in Figure 2.2 and described below. ' The investment in facilities supports an even larger investment in human resources. Industry and government studies have shown that the salaries paid to the occupants of a commercial or institutional building annually are of the same order of magnitude as the total costs of designing and constructing the building (NRC, 1998).
Facility Life Cycles and the Acquisition Process Requirements assessment ~ ~ ~ , ~ Conceptual Programming/ _ planning budgeting Lit Programming/ budgeting FIGURE 2-2 General facility acquisition process. ~ - - 19 Design . . I Construction Start-up | Note: The contracting method determines whether the design, equipment procurement, and construction phases occur in sequence or concurrently. The contracting method can also affect who is involved at each phase (architect, engineer, construction contractor, etc.~. For example, if the design-bid-build contact method is used, the phases generally occur in sequence, with an architect-engineer entity involved in the design phase and a construction entity involved in the construction phase. If a design-build contract method is used, the same contractor is responsible for the design and construction phases; thus, some phases or activities occur concurrently. Requirements Assessment The federal budgeting process requires agencies to conform to a procedure of requirements setting and prioritization review (known variously as requirements assessment, project requirements, project assessment, and needs assessment) before agency budget requests are submitted to Congress. This phase begins when someone (e.g., facilities program manager, senior executive, elected official) identifies the need for a program or facility. The agency initiates a process to gather information and validate the need for the facility relative to a program and to the agency's mission. The requirements phase generally determines the scope of the project required to accomplish the agency's mission. The requirements may be a function of the number of personnel and their grade and function. The Office of Management and Budget's Capital Programming Guide directs agency management at this point to answer the "three pesky questions" applicable to all major capital investments (OMB, 1997~: Does the investment in a major capital asset support core/priority mission functions that need to be performed by the Federal Government? Does the investment need to be undertaken by the requesting agency because no alternative private sector or governmental source can better support the function? Does the investment support work processes that have been simplified or otherwise redesigned to reduce costs, improve effectiveness, and make maximum use of commercial, off-the-shelf technology? The answer to any one of these questions can lead management to determine that the requirement can be met through management strategies and that a facility is not needed. For example, if the requirement is for additional power, it might be procured from a power provider and may preclude the need to build a new power plant. By applying the pollution prevention principles of"reduce, reuse, recycle" in this phase and
20 Sustainable Federal Facilities reducing facility requirements, natural resources, energy and water that otherwise would have been used in building and operating a facility can be saved. When a facility requirement is validated, the process to fulfill the requirement begins with the conceptual planning phase. Conceptual Planning In conceptual planning (also called project preplanning, master planning, advance planning, concept development), alternatives are considered in their broadest sense. Decisions are made on how the requirement is to be met through the addition, alteration, or renovation of existing facilities or through new construction. An agency may review its entire facilities inventory and assess whether existing buildings and infrastructure can adequately support the agency's mission and program requirements or whether facilities need to be acquired, upgraded, or replaced. Various feasibility studies are conducted to define the scope or statement of work based on the agency's expectations for facility performance, quality, cost and schedule. Several alternative design solutions may be considered before the preferred approach is chosen. The preferred approach will be used to develop a project scope of work that will be the basis for future project decisions and for developing contract documents to procure design and construction services. Studies by academics, the National Research Council, the Construction Industry Institute, The Business Roundtable, the Project Management Institute, and others point to the importance of the conceptual planning phase to the entire facility acquisition process. This phase of decision-making is critical, because it is at this point that the size, function, general character, location, and budget for a facility are established. Errors made in this phase will usually manifest in the completed facility in such forms as inappropriate space allocations or inadequate equipment capacity (NRC, 1989,1999). Programming and Budgeting During this phase decisions are made on resources and priorities regarding which facilities to acquire and when to do so. Senior agency executives determine which projects are the most critical to agency mission needs and therefore warrant facility acquisition. When a project is included on the agency priority list, the agency then prepares a request for initial congressional approval to acquire the facility and for the appropriation of funds for design and construction. The documentation required for this phase varies but usually consists of materials to justify the facility in relation to mission requirements and the location and physical and functional requirements upon which preliminary cost estimates are based. Design The end of the conceptual planning phase and the beginning of the design phase varies among agencies and their programming and budgeting procedures. Generally, detailed design of a project begins once an agency is confident that fiends will be
Facility Life Cycles and the Acquisition Process 21 appropriated to complete the project. Based on the statement of work and preferred design approach, the design matures into final construction documents comprising the plans and specifications from which equipment procurement and construction bids can be solicited. (Complex facility projects may include an equipment procurement phase in order to expedite the purchase, manufacture, and delivery of long-lead-time equipment, such as unique process machinery, large electrical and mechanical equipment, and sophisticated architectural components. Equipment procurement may proceed in parallel with construction activities.) Unless agencies have in-house design staff available, these activities are typically contracted out to organizations that have the appropriate expertise; either to other federal provider agencies (such as the General Services Administration, Naval Facilities Engineering Command, or Army Corps of Engineers) or private-sector architect-engineer firms. A 1990 NRC report found that the early stages of the design process are most critical for assuring successful design to budget because the design is still flexible and factors that determine cost are not fixed (NRC, 19901. In addition, the cost of operating, maintaining, repairing, and disposing of the facility will be affected by the following decisions during the requirements assessments, conceptual planning, programming, and design phases: Choice of materials and technologies Quality of design · Quality of construction Building layout Types of systems Construction The majority of tasks associated with large-scare federal construction are contracted out to the private sector. Federal agencies typically undertake major construction with federal personnel only when these functions are central to the agency's mission or existence. The military services, for example, may retain control of facility construction that impacts mission readiness. The construction phase is considered complete when the owner agency accepts occupancy of the facility. Start-up The start-up phase begins when the user takes occupancy of the facility. Building components are tested individually and then in systems with other components to measure and compare their performance against the original design criteria. Facility operation and maintenance plans are implemented, tested, and refined as appropriate. Minor repairs and alterations can be made and users have the opportunity to learn about the facility (NRC, 1994). Facility acquisition, a 2-5 year process, is followed by long-tenn management, operation, and maintenance of the facility, which may last for 30 years or longer, and
22 Sustainable Federal Facilities constitutes the majority of the facility life-cycle. Although the focus of this study is on the acquisition process, application of the sustainable development principle for operations and maintenance is discussed in the context of the framework outlined in Chapter 3. REFERENCES NRC (National Research Council). 1 989. Improving the Design Quality of Federal Buildings. Washington, D.C.: National Academy Press. NRC. 1 990. Committing to the Cost of Ownership: Maintenance and Repair of Public Buildings. Washington, D.C.: National Academy Press. NRC. 1994. Responsibilities of Architects and Engineers and their Clients in Federal Facilities Development. Washington, D.C.: National Academy Press. NRC. 1 998. Stewardship of Federal Facilities: A Proactive Strategy for Managing the Nation's Public Assets. Washington, D.C.: National Academy Press. NRC. 1 999. Improving Project Management in the Department of Energy. Washington, D.C.: National Academy Press. OMB (Office of Management and Budget). 1 997. Capital Programming Guide. [Online] Available at: http://~ww.whitehouse.gov/OMB/circulars/al 1/cpgtoc.html