Budgeting for Facilities Maintenance and Repair Activities: Report Number 131 (1996)

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

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.

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.

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.

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.

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?

QUESTION 4: Why does your agency use the guideline?

QUESTION 5: How does your agency calculate CRV?

QUESTION 6: In what ways has use of the guideline benefited your agency?

QUESTION 7: Have any of the benefits your agency expected to receive from use of the guideline not been realized? (Please explain.)

QUESTION 8: What difficulties have you experienced in using the guideline and how could they be eliminated?

QUESTION 9: Why has your agency not used the guideline?

QUESTION 10: What changes would need to be made to permit your agency to use the guideline?

QUESTION 11: Has your agency benefited indirectly from the guideline?

The Indian Health Service (IHS) uses the following two categories to formulate its budget for facilities:

1. 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:

   1. REAL PROPERTY MAINTENANCE—This category encompasses recurring and nonrecurring maintenance as outlined below.

      1. 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.

• Compliance with public laws (handicapped accessibility, energy conservation and environmental compliance)

1. 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:

   1. 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:

      1. Personnel who manage and implement the IHS health care facilities maintenance, repair, and improvement program.

      2. Personnel who manage and implement the facilities planning program.

      3. Personnel who manage and implement new and replacement facilities construction programs.

      4. Personnel who manage and implement the biomedical equipment maintenance and repair program.

      5. Personnel who manage the sanitation facilities construction program in Indian country.

      6. Personnel who manage and implement the environmental health program.

      7. Personnel who manage and implement the real-property program.

   2. LEASES—This encompasses leases for additional space to support the health care program.

   3. UTILITIES—Electricity, natural gas, propane, water, etc.

   4. PERSONAL PROPERTY MAINTENANCE (Non biomedical)—This includes equipment such as dishwashers, mechanical sweepers, lawn mowers, tractors, vacuum cleaners,

prtable air conditioners, spark plugs, air filters, medical air compressor, etc.

1. Recurring bench stock for repairs

2. Service contracts for preventive maintence of personal property (nonbiomedical) equipmemt.

5. PERSONAL PROPERTY MAINTENANCE (Biomedical)

   This includes equipments for direct and indirect patient care such as CAT scanners, X-rays, defibrilators, and centrifuges.

6. OFFICE ADMINISTRATION

   1. Office supplies for engineering office administration (e.g., paper, pencil, forms).

   2. Service contracts for personal property used in engineering administration (e.g., computers, photocopying, CADD equipment).