In 1990 the Building Research Board's (BRB) Committee on Advanced Maintenance Concepts for Buildings prepared a report entitled Committing to the Cost of Ownership—Maintenance and Repair of Public Buildings. The report was widely distributed, and the following finding and recommendation was 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.”1
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
The complete summary of the committee's findings and recommendations is reproduced in Appendix A.
mentioned by the committee; namely, lacking “specific information upon which to base the M&R budget.” And since most federal agencies have experienced difficulties from time to time getting funds for needed maintenance and repair work, the budget guideline proposed by the committee (i.e., 2 to 4 percent of the aggregate current replacement value of the facilities in an agency's inventory) was endorsed by many managers of federal facilities. Consequently, at the time the report was published it was widely believed that the guideline would be widely adopted and that it would be of great value to federal facilities managers in their budget discussions within their own organizations and with congressional committees. Indeed, some agency officials thought the use of the guideline would usher in a new era of stable, adequate funding for facilities maintenance and repair in the federal government.
To evaluate the impact of the report on federal agencies, the FFC 's Standing Committee on Operations and Maintenance conducted a survey to determine the views of the agencies on the guideline and the extent of their use of it. The results of the survey, which are presented in Appendix B, indicate that although the report has been widely distributed and frequently quoted, the guideline has not been widely adopted by federal agencies and that it has not solved M&R budgeting problems in federal agencies.
The survey revealed several impediments to the use of the guideline:
Lack of understanding of how to implement the guideline and its application across an entire inventory of facilities.
Lack of statistical validation of the guideline in its use of a formula rather than hard numbers.
Lack of agreement across agencies in determining which items should and should not be included in an M&R budget.
Lack of a consistent approach across agencies on a method for determining current replacement value.
The committee determined that it could not solve all of these but that it could provide help in some areas. Specifically, the committee looked more closely at methods for determining current replacement value and at the items that are appropriate to include in M&R budgets and those that are not. The committee worked to develop definitions for those items to establish a common understanding across agencies. The committee also
identified structured management techniques and advanced decision support and diagnostic tools that can be used to help minimize facilities maintenance and repair costs.
The committee hopes that the present report will encourage agencies to standardize their M&R budgets and to develop common definitions for terms used in keeping M&R records, which would permit easier comparison of M&R expenditures.
HOW THE STUDY WAS CONDUCTED
The committee began its study by assembling lists of terms used by various federal agencies in connection with the operation, maintenance, repair, and rehabilitation of their facilities. From those lists the committee identified key terms relating to the Building Research Board's committee guidelines that were common to many agencies. The committee next developed definitions for the common terms with which the majority of agencies could agree. Finally, using the agreed-upon terms, the committee determined how the agencies might prepare budgets for facilities-related activities in accordance with the BRB committee guideline.
ORGANIZATION OF THE REPORT
This report includes four chapters in addition to the introduction. In Chapter 2, methods of determining “current replacement values” are presented and discussed. In Chapter 3, the items that are appropriately included in M&R budgets—and to which the 2 to 4 percent guideline would apply—are identified and defined. In Chapter 4, facilities-related items that are not normally included in the 2 to 4 percent guideline in an M&R budget are identified and defined. Chapter 5 provides suggestions for minimizing facilities M&R costs through structured management techniques and advanced decision support and diagnostic tools. A summary of the committee's view on the application of the BRB-recommended guideline is presented in Chapter 6.
In proceeding through this report, the reader should recognize that the range of 2 to 4 percent of the current replacement value is a large range and that the type of facility and level of maintenance will effect the
maintenance cost. Since federal agencies have a wide range of types of facilities, and a wide range of level of maintenance requirements, the range of 2 to 4 percent of current replacement value is necessary.
The reader should also note that the budget cycle can have many phases, which can be confusing. For purposes of this report, the first phase of the budget cycle is defined as the period when estimates are made for the coming year's requirements. The second phase is when the budget is compiled and sent forward. The third phase is when the current year's budget guidance is issued. The final phase is when the budget is executed. Most facilities managers only participate in the first and final phases.
Various terms used in connection with the preparation of M&R budgets will be defined in subsequent chapters as they are introduced. The committee believes that the following general terms need to be defined early in the report.
ADDITION—Addition, expansion, and extension each constitute a physical increase to a real property facility that adds to the overall external dimensions of the facility. As a general rule, if the dimensions used to record the facility in inventory are increased, an addition has occurred.
ADEQUATE [FACILITY]—An adequate facility is fully capable of supporting its current use without modifications or repairs that require approval and funding from a higher authority.
ALTERATION—An alteration is the work required to adjust interior arrangements or other physical characteristics of an existing real property facility so that it may be more effectively adapted to or utilized for its designated purposes. See also REHABILITATION And CONVERSION.
AREA, GROSS FLOOR—The total usable areas of all floors measured between the exterior faces of outside walls. It includes full areas of basements, on-grade and above-grade floors, services and equipment rooms, boiler plant and heater rooms, mezzanines, penthouses, enclosed passages, and raised covered platforms. It also includes half areas of covered open
porches, covered (but not enclosed) passages, and uncovered raised platforms. Excluded is all enclosed space with an average ceiling height of less than seven feet.
AREA, NET FLOOR—Includes the total gross area excluding basements not suited as office space, elevator shafts and machinery space, exterior walls and interior partitions, mechanical equipment and water supply equipment space, permanent corridors and hallways, stairs and stair towers, and toilet and cleaning gear space.
AREA, OCCUPIABLE—Occupiable area means that portion of the gross area that is available for use by an occupant's personnel or furnishings, including space that is available jointly to the various occupants of the building, such as auditoriums, health units, and snack bars. Occupiable area does not include the space in a building that is devoted to its operations and maintenance, including craft shops, gear rooms, and building supply storage and issue rooms. Ceiling-high corridors solely serving a single space assignment are “occupiable.” Occupiable area is computed by measuring from the occupant's side of ceiling-high corridor partitions or partitions enclosing mechanical, toilet, and/or custodial space to the inside finish of permanent exterior building walls or to the face of the convector if the convector occupies at least 50 percent of the length of the exterior wall. When computing occupiable area separated by partitions, measurements are taken from the center line of the partitions.
BUILDING—A roofed structure suitable for housing people, materials, and/or equipment or that provides only partial protection from the weather, such as a shed.
COLLATERAL EQUIPMENT—See EQUIPMENT, INSTALLED.
CONSTRUCTION—Any combination of engineering, procurement, erection, installation, assembly, or fabrication activities involved to create a new facility or to alter, add to, or rehabilitate an existing facility. It also includes the alteration and repair (including dredging, excavating, and painting) of buildings, structures, or other real property. This does not
involve the manufacture, production, finishing, construction, alteration, repair, processing, or assembling of items categorized as personal property.
CONVERSION—A conversion is a revision of a real property facility that changes the functional purpose for which the facility was originally designed or used. A conversion results in a change to the basic real property facilities three-digit category code currently assigned to the facility. [Two elements are necessary for conversion: (a) a major structural revision and (b) a change in functional purpose.]
EQUIPMENT, IN PLACE—Includes all equipment other than installed equipment, when acquired and used in a facility or a test apparatus and can be served and removed after erection or installation without substantial loss of value or damage thereto or to the premises where installed. Non-collateral equipment imparts to the facility or test apparatus its particular character at the time (e.g., furniture in an office building, equipment in a laboratory, equipment in a test stand, machine tools in a shop facility, computers in a computer facility) and is not required to make the facility useful or operable as a structure or building.
EQUIPMENT, INSTALLED—Encompasses building-type equipment, built-in equipment, and large, substantially affixed equipment/property and is normally acquired and installed as part of a facility project necessary to make it a complete and usable facility.
EXIGENT MINOR CONSTRUCTION—Exigent minor construction supports projects costing more than (a specified amount) and no more than (a specified amount) that demand remedy sooner than would be possible if normal construction procedures were followed. It provides the same basic coverage as the former urgent minor construction program.2
EXPANSION AND EXTENSION—See ADDITION.
The minimum and maximum dollar amounts are different for different agencies. Typical minimums are $100,000 and $200,000; typical maximums are $500,000 and $1,000,000.
FACILITY—A separate individual building, structure, utility, or other form of real property, including land.
A term used to encompass land, buildings, other structures, and other real property improvements, including utilities and collateral equipment. The term does not include operating materials, supplies, special tooling, special test equipment, noncapitalized equipment. The term facility is used in connection with land, buildings (facilities having the basic function to enclose usable space), structures (facilities having the basic function to enclose usable space), structures (facilities having the basic function of a research or operational activity), and other real property improvement.
FACILITY DEFICIENCY—The quantitative difference in terms of some unit measure between a stated requirement for a facility and the adequate assets available for the satisfaction of that requirement. A facility deficiency may be satisfied in various ways by lease or purchase, by reassignment of otherwise surplus assets, by adoption of existing assets, by new construction, etc.
INADEQUATE FACILITY—An inadequate facility is one that cannot be made adequate for its present use through “economically justifiable means.” An inadequate facility could, however, be adequate or substandard for a use other than its assigned category code.
INSTALLATION–The aggregate of real property facilities assigned to an activity.
LINE-ITEM PROJECTS—Projects that are specifically reviewed and approved by Congress.
MAJOR PROJECTS—Major projects are projects selected (by upper management) for focused management attention. Criteria utilized are estimated total project cost (over some minimum amount), importance to program objectives, size and complexity, degree of control required (e.g., unusual congressionally mandated requirements), visibility and clarity, and stability of the project. Same as LINE ITEM PROJECTS.
MILITARY CONSTRUCTION PROGRAM (MCP)—One-year plan of family housing, military construction, and design through which military facilities are authorized and appropriated by Congress.
MULTIPLE-USE BUILDING—A building that supports more than one function and is reportable under multiple category codes.
NET SQUARE FEET—See AREA, NET FLOOR.
NONCOLLATERAL EQUIPMENT—See EQUIPMENT, IN PLACE.
REAL PROPERTY—Land and improvements including buildings, structures, and utilities.
REAL-PROPERTY INSTALLED EQUIPMENT—See EQUIPMENT, INSTALLED.
REHABILITATION—The action performed in restoring a facility to normal design standards.
RENOVATION—The action performed in upgrading an existing substandard facility to a functionally adequate, usable facility.
REPAIR—Repair is the restoration of a facility or component thereof to such condition that it may be effectively utilized for its designated purposes by overhaul, reprocessing, or replacement of constituent parts or materials that have deteriorated by action of the elements or usage and have not been corrected through maintenance.
REPLACEMENT—The construction of a facility to replace [an obsolete facility or] one destroyed or damaged [through either a catastrophe or neglect] beyond the point at which it may be economically repaired [or rehabilitated].
STRUCTURE—Any fixed facility that is not a building or a utility constructed on or in the land. Examples of structures include bridges, antenna towers, tanks, fixed cranes, roads, and sidewalks.
The assemblage of structural components within a completed building.
SUBSTANDARD [CONDITION]—Substandard describes a facility with deficiencies that require approval and funding beyond the authority of the local managers or commander for modifications or repairs to make the facility adequate for its function.
Any deficient condition of a facility.
A substandard rating is given spaces that do not provide a suitable environment for the assigned function. These areas should be considered for modification, upgrading, or replacement at some time in the future if the planning and financial atmosphere is conducive. Such space would fail to meet two or more rating factors.
URGENT MINOR REPAIRS—See EXIGENT MINOR CONSTRUCTION.
USER—The entity that operates or otherwise uses a facility.
UTILITY—A system, or any of its components, that generates and/or distributes (via pipelines, wires, buses, or electromagnetic waves) a commodity or service to itself and/or to other facilities.