Organisations that oversee a large, geographically dispersed portfolio of facilities face some unique challenges in managing those assets. A few of these challenges include maintaining accurate information about facility requirements across the portfolio, promoting consistent standards for evaluating needs, and aligning local facility investments with central strategic objectives.
While many government organisations and multinational corporations oversee wide-ranging real estate portfolios, few are responsible for such extensive property holdings as the US General Services Administration. In addition to its role as the primary procurement arm of the US federal government, supplying equipment, supplies, telecommunications and information technology to other federal agencies, GSA also serves as “the government’s landlord.” In this capacity, it meets the office and other space requirements of 1.1 million federal government employees in 2,100 American communities.
GSA’s Public Building Service (PBS), the largest US public real estate organisation, oversees an inventory of over 32 million square metres of workspace, comprising more than 1,500 government-owned facilities and 8,000 leased spaces. PBS manages a wide range of property types, including office buildings, courthouses, post offices and border stations.
It maintains more than 400 historic properties, and 100 childcare centres. Among some of the better known facilities managed by GSA are the Ronald Reagan Building and International Trade Center in Washington DC, the largest US federal building after The Pentagon.
Challenge
Given the size and range of its building portfolio, maintaining accurate, up-to-date information about the conditions of all of the facilities and building systems under its management was a significant challenge for GSA. In order to meet the expectations of Congress that it periodically inspect and document needed repairs and alternations to its buildings, GSA previously completed full building engineering reports on its facilities every five years, and maintained a repository of information about planned five-year work in its Inventory Reporting Information System (Iris). However, this evaluation process was time-consuming and costly, and resulted in data that was out-of-date almost as soon as reports were completed.
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The agency’s initial solution to this challenge was implementation of a set of web-based surveys, used to collect a range of information about all of its facilities in a central database. Working with VFA Inc, a provider of facilities capital planning and management solutions, GSA first began deploying the web-based Physical Condition Surveys in 1998. A modified version of the company’s VFA.facility software for facility capital planning, the surveys enabled field staff in all the GSA’s regions to collect consistent information about the condition of the facilities they managed.
Initially used to collect information about property it owned rather than leased, the surveys further stratified the level of data gathered on each facility according to its mission criticality and current condition. At the most basic level, the survey captured information such as location, use, square metres and number of floors. At the next level of detail, information was collected about the condition of a subset of a facility’s major systems, such as HVAC, electric and roofing systems.
During the initial roll-out of the survey tool, GSA field staff captured information about 17 million square metres of facilities, a little over half of the agency’s total portfolio, in two months. The data enabled GSA to calculate an overall Facility Condition Index for each surveyed facility—the ratio of the cost of current facility deficiencies to its replacement value—capturing the total liability for every building, not only the planned five-year work. It also allowed the agency to pinpoint facilities most in need of detailed evaluation, and develop a schedule for professional facility audits.
With a baseline of facility condition information in place, and a mechanism for keeping it up-to-date, GSA realized the value this data could add in the ongoing process of formulating and refining its asset management plans. However, the survey system lacked sophisticated analysis tools to enable this evaluation. Therefore, as detailed facility audits were conducted on identified properties, GSA employed VFA.facility software, which enables the collection of the same data gathered using the web-surveys, as well as scenario planning and projection of the impact of different investment levels on facility condition and long-term funding needs.
Guidelines
This analytic capability, coupled with reliable information about facility conditions, has become increasingly important as federal requirements for real property management have evolved over the past several years. New federal property management guidelines, issued in 2004 under the President’s Executive Order 13327, require that US federal agencies follow specific guidelines to promote the efficient and economical use of federal real property assets and accountability in their management.
The Order requires each federal agency to determine what it owns, what it needs, and what it costs to manage its real properties. Based on its evaluation of this information, each agency must develop and implement an asset management plan consistent with the goals and objectives set forth in its overall strategic plan. This plan prioritises actions to be taken—with associated lifecycle costs—to improve the operational and financial management of an agency’s real property inventory. The Order also requires agencies to measure progress against their asset management goals based on specific performance measures including utilisation, condition index, mission dependency, and annual operating and maintenance cost.
The federal real property management guidelines outlined in Executive Order 13327 are often depicted in a pyramid diagram, with inventory collection and analysis forming the base of the pyramid, and asset disposition at the apex.
Based on a foundation of detailed data about property assets and their conditions and requirements, the federal real property management framework promotes the evaluation of those assets and investments through the lens of an agency’s overall strategic goals and objectives and established performance parameters. The ultimate goal is the optimal alignment of asset investments with current and future needs.
Prominent
GSA has become a recognised leader in implementing the Executive Order 13327 on Real Property Asset Management and has taken a prominent role on the Federal Real Property Council, becoming the first agency recognised by the Administration for achieving and maintaining “Green” status on the President’s Management Agenda scorecard, a mechanism for rating the progress of agencies in implementing government policies promoting greater efficient use of federal resources.
In fiscal year 2006, GSA demonstrated significant results in rightsizing its portfolio. By focusing on facility utilisation, condition, operation and federal agency need, GSA has improved utilisation by increasing occupancy by 3.2 per cent over the past five years. It met or exceeded Federal Real Property Council standards for facility conditions in over 75 per cent of its inventory, while maintaining operating costs at approximately 4.2 per cent below market and reducing energy consumption 4.4 per cent below the 2005 baseline.
Since the end of fiscal year 2006, GSA has also reduced vacant space from 9.2 per cent to 7 per cent, significantly below the 2006 industry average rate of 11.6 per cent. By eliminating underutilised facilities, including the demolition of 52 facilities totaling over 1.4 million square metres, GSA has avoided approximately £290 million in reinvestment liabilities, providing additional reinvestment dollars for core facilities to support its long-term customer requirements.
Ultimately, the principles of facilities management and strategic alignment that the federal sector is embracing are similar to those being promoted in many other industries today. In fact, in its 2007 Facilities Management Forecast, the Ifma cites “linking facilities management to strategy” as a top trend, increasingly critical to organisations across a variety of markets. The web-based surveys GSA developed with VFA have evolved into a suite of surveys that not only federal agencies but all types of corporations use to collect baseline data about their real estate assets.
Today, GSA is a leader among both public and private sector organisations in ensuring real property assets are maintained in the appropriate condition, at the appropriate cost to help its tenant agencies carry out their missions and that unneeded properties are disposed of in an efficient manner. It has the processes and systems in place to advance its long-term goal of achieving a viable, self-sustaining inventory of governmentowned facilities.
Lee Kaufman is senior project director at VFA Inc a provider of facilities capital planning and management solutions
