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

While the concept of an M&R budget being based on a percentage of the current replacement value of an agency's facilities inventory seems straightforward, it is not an easy concept to apply. The problem is that there are overlaps and gray areas between M&R work and operations activities and alteration projects. Equipment operators, for example, often do routine maintenance as they check on the equipment for which they are responsible; similarly, alteration projects frequently include some work that could be considered repairs. Agencies must decide if any portion of the operations or the alterations contract amount will be included in the M&R budget. The questions are not trivial since M&R activities would be underfunded if M&R money were unknowingly used for operations or alterations work; conversely, M&R activities would be overfunded if M&R work were unknowingly performed under operations and alterations budgets.

To help agencies deal with these questions, the committee members compared notes on what they would and would not include in an M& R budget. This chapter presents the committee's view on what items are appropriately included in an M&R budget (and thus are subject to the 2 to 4 percent guideline) versus a total operations and maintenance budget, of which M&R is but a subset of the total. The committee's view on what items are not appropriately included in M&R budgets is presented in the next chapter.

Listed below—with definitions—are items that virtually all committee members would include in an M&R budget for facilities.

Preventive maintenance. Preventive maintenance is the planned, scheduled periodic inspection, adjustment, cleaning, lubrication, parts replacement, and minor repair of equipment and systems for which a specific operator is not assigned. Preventive maintenance consists of many check point activities on items that, if disabled, would interfere with an essential installation operation, endanger life or property, or involve high cost or long lead time for replacement. Preventive maintenance is the cornerstone of any good maintenance program. A weak or nonexistent preventive maintenance program could result in much more emergency work and costly repairs.

Programmed major maintenance. Programmed major maintenance includes those maintenance tasks whose cycle exceeds one year. Examples of programmed major maintenance are painting, roof maintenance (e.g., (floodcoating), road and parking lot maintenance (overlays and seal coating), utility system maintenance (pigging of constricted lines), and similar functions.

Predictive testing and inspection. Predictive testing and inspection refers to testing and inspection activities that involve the use of sophisticated means to identify maintenance requirements. For example, specialized tests are used to locate thinning of pipe walls and fractures (e.g., eddy current testing, radiographic inspections, ultrasonic testing, television cameras, or aural leak detectors); to detect roof weaknesses or wet insulation areas (e.g., infrared thermographic viewers or nuclear density devices); to identify large equipment wear problems (e.g., vibration and balance analyzers, oil analysis for wear metals and lubricant properties); and to locate charge or heat buildup in electric equipment (e.g., staticscopes or infrared thermography).

Routine repairs.⁴ Routine repairs are actions taken to restore a system or piece of equipment to its original capacity, efficiency, or capability. Routine repairs—in contrast to capitalized repairs discussed in the next chapter—are not intended to increase significantly the capacity of the item involved. Thus, for example, the replacement of a failed boiler with a new unit of similar capacity would be a routine repair project. However, if the capacity of the new unit were double the capacity of the original unit, the cost of the extra capacity would have to be capitalized and would not be considered routine repair work and would not be paid for with M&R funds.

Service calls.⁵ Service calls are requests for system or equipment repairs that—unlike preventive maintenance work—are unscheduled and unanticipated. Service calls generally are received when a system or component has failed. If the problem has created a hazard or involves an essential service, an emergency response might be necessary. Conversely, if the problem is not critical, a routine response is adequate.

Replacement of obsolete items. Replacement of obsolete items refers to work undertaken to bring a component or system into compliance with new codes or safety regulations or to replace an item that is unacceptable, inefficient, or for which spare parts can no longer be obtained. Such work is considered M &R work if it is required for the continued operation of the facility.

The committee found an unexpectedly high level of agreement among the agencies represented on what items should be included in an M &R budget. Significant uncertainty was encountered with regard to just two items: how to treat backlogs of M&R work and how to account for M&R work performed by military personnel.

Backlog of M&R work. Because of underfunding of M&R work in the past, many agencies have built up a backlog of work, which cannot be reduced with M&R budgets based on the BRB 2 to 4 percent guideline since that guideline covers only current M&R requirements. Agencies have not reached consensus on how to deal with the problem. One approach is to merely increase the M&R budget based on the BRB guideline by some arbitrary percentage to provide for the extra work needed to reduce the backlog. Another approach is to treat the backlog as a separate issue for which a separate M&R budget is needed.

Accounting for M&R work performed by military personnel. At some military facilities, M&R work is sometimes performed by uniformed personnel whose pay comes from a military personnel budget rather than an M&R budget. Thus, any budget based on the BRB guideline ought to be adjusted to reflect work done by military personnel. However, agencies have not developed methods for calculating the value of the contribution of such personnel or for determining the impact of such contributions on an M&R budget.