Military Infrastructure: Real Property Management Needs Improvement
(Letter Report, 09/07/1999, GAO/NSIAD-99-100).
Pursuant to a congressional request, GAO reviewed the Department of
Defense's (DOD) management of the maintenance of its real properties,
focusing on: (1) how the services determine and prioritize maintenance
and repair requirements and how they allocate resources to meet their
needs; (2) promising practices in facility management that the services
could consider; and (3) barriers to implementing promising practices and
ways to address them.
GAO noted that: (1) DOD does not have a comprehensive strategy for
maintaining the services' infrastructure; (2) rather, each service sets
its own standards for maintaining infrastructure; (3) as a result, the
services differ in the way they rate property conditions, prioritize
repairs, and allocate resources; (4) the service headquarters cannot be
certain that the most critical properties in need of maintenance and
repair are targeted; (5) given incomplete and inconsistent data, and
different real property maintenance (RPM) rating systems among the
services, Congress cannot be assured that it is funding maintenance and
repairs that will provide the best return on its investment; (6) there
is little relationship between identified RPM needs and the funds the
services allocate for RPM; (7) none of the services' RPM spending plans
provide sufficient funding to keep their total backlog of repairs at
current levels; (8) although DOD instructed the services in July 1997 to
fund RPM to enable them to meet 75 percent of their RPM requirements by
2003, DOD removed that goal from an update guidance in April 1999; (9)
because the services' headquarters consistently underfund requirements,
base and command officials request funding to cover only a portion of
RPM needs; (10) for fiscal year 1997, major commands GAO surveyed
reported they requested funding to cover an average of about one-fifth
of the RPM needs of their bases and bases reported receiving funding
equal to only about one-sixth of their needs; (11) many promising
practices exist in the RPM area, including: (a) establishing a single
system for counting and categorizing inventory; (b) having a single,
valid engineering-based system for assessing facility conditions, with
adequately trained personnel and multiple levels of review; (c)
prioritizing budget allocations based on physical condition, relevance
of facilities to the mission, and life-cycle costing and budgeting; (d)
setting up a single property maintenance budget that is controlled by a
central office with the power to shift resources to facilities in the
greatest need; (e) creating incentives to demolish or vacate excess
space; (f) restricting the use of RPM funds for other maintenance
purposes; and (g) charging an annual maintenance fee, based on square
feet used, to ensure adequate funding for facilities and to create an
incentive for space conservation; and (12) none of the military services
has implemented all the promising practices for RPM, and their adoption
of these practices is hampered by several barriers.
--------------------------- Indexing Terms -----------------------------
REPORTNUM: NSIAD-99-100
TITLE: Military Infrastructure: Real Property Management Needs
Improvement
DATE: 09/07/1999
SUBJECT: Military facilities
Facility maintenance
Maintenance costs
Military budgets
Facility repairs
Private sector practices
Funds management
Federal property management
IDENTIFIER: DOD Quadrennial Defense Review
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United States General Accounting Office GAO Report
to the Chairman and Ranking Minority Member, Subcommittee on
Readiness and Management Support, Committee on Armed Services,
U.S. Senate September 1999 MILITARY INFRASTRUCTURE Real
Property Management Needs Improvement GAO/NSIAD-99-100 United
States General Accounting Office
National Security and Washington, D.C. 20548
International Affairs Division B-280230
Letter September 7, 1999 The Honorable James M. Inhofe Chairman
The Honorable Charles S. Robb Ranking Minority Member Subcommittee
on Readiness and Management Support Committee on Armed Services
United States Senate The Department of Defense's (DOD) management
of the maintenance of its properties has concerned the Congress
because of the long-standing absence of accurate data for making
funding decisions and increasing backlogs in infrastructure
repairs. As requested, our review of real property maintenance
(RPM) management focused on the properties that the services
maintain and repair using RPM funds from DOD's operation and
maintenance (O&M) account.1 Specifically, we (1) analyzed how the
services determine and prioritize maintenance and repair
requirements and how they allocate resources to meet their needs,
(2) identified promising practices2 in facility management that
the services could consider, and (3) identified barriers to
implementing promising practices and ways to address them. To
address our objectives, we sent questionnaires to 571 military
bases and major commands3 worldwide; interviewed RPM personnel at
35 bases and commands nationwide;4 reviewed literature of RPM
experts; and 1These funds cover expenses for a wide variety of
property controlled by the military services, for example,
barracks, administrative and training facilities, utility systems,
runways, schools, and grounds maintenance. O&M RPM funds are not
to be used for significant portions of property, such as family
housing and medical facilities, which are paid for separately.
RPM for many industrial-related activities is covered separately
in contracts. O&M also covers civilian pay, fuel, supplies,
repair parts, and military operations. 2Promising practices are
not necessarily fully proven, but rather are those that appear to
be designed logically to work well and that seem worthy of wider
trial involving sound evaluation. 3We received responses from 529,
or 93 percent. Major commands are the administrative entities for
bases with similar missions, such as the fighter bases that are
part of the Air Force's Air Combat Command. 4A complete list of
sites visited may be found in app. IX, Objectives, Scope, and
Methodology. Letter Page 1
GAO/NSIAD-99-100 Real Property Management B-280230 interviewed
more than two dozen RPM experts and officials at U.S. corporate,
university, religious and governmental entities. Appendix IX
further describes our scope and methodology. Results in Brief
DOD does not have a comprehensive strategy for maintaining the
services' infrastructure. Rather, each service sets its own
standards for maintaining infrastructure. As a result, the
services differ in the way they rate property conditions,
prioritize repairs, and allocate resources. For example, a
barracks rated "satisfactory" by one service may be rated as
"unsatisfactory" by another. Also, within each service, answers
to our survey indicated that bases and major commands apply
condition and/or criteria for rating repairs differently. As a
result, the service headquarters cannot be certain that the most
critical properties in need of maintenance and repair are
targeted. Given incomplete and inconsistent data, and different
RPM rating systems among the services, the Congress cannot be
assured that it is funding maintenance and repairs that will
provide the best return on its investment. There is little
relationship between identified RPM needs and the funds the
services allocate for RPM. None of the services' RPM spending
plans provide sufficient funding to keep their total backlog of
repairs at current levels; under new Navy plans, the total
critical-rated backlog will crest in fiscal year 2003, and very
slowly diminish thereafter.5 Although DOD instructed the services
in July 1997 to fund RPM to enable them to meet 75 percent of
their RPM requirements by 2003, DOD removed that goal from an
updated guidance in April 1999.6 Because the services'
headquarters consistently underfund requirements, base and command
officials request funding to cover only a portion of RPM needs.
For fiscal year 1997, major commands we surveyed reported they
requested funding to cover an average of about one-fifth of the
RPM needs of their bases and bases reported receiving funding
equal to only about one-sixth of their needs. (In response to
the draft version of this report, the Navy staff at its
headquarters Facilities and Engineering Division stated that a
message had been sent to major claimants and bases that all
critical RPM needs should 5The Navy divides its backlog into
"critical" and "deferrable"; only the critical backlog is
officially reported to the Congress, although both types are
tracked by the Navy. 6DOD, Defense Planning Guidances for Fiscal
Years 19992003 and 20012005. Letter Page 2
GAO/NSIAD-99-100 Real Property Management B-280230 be reported.
However, this did not apply to non-critical RPM. Non-critical
repairs can deteriorate into critical over time.) Many promising
practices exist in the RPM area, including * establishing a single
system for counting and categorizing inventory; * having a single,
valid engineering-based system for assessing facility conditions,
with adequately trained personnel and multiple levels of review; *
prioritizing budget allocations based on physical condition,
relevance of facilities to the mission, and life-cycle costing and
budgeting; * setting up a single property maintenance budget that
is controlled by a central office with the power to shift
resources to facilities in the greatest need; * creating
incentives to demolish or vacate excess space; * restricting the
use of RPM funds for other maintenance purposes; and * charging an
annual maintenance fee, based on square feet used, to ensure
adequate funding for facilities and to create an incentive for
space conservation. Two nonmilitary organizations-the Capital
Needs Analysis Center of the Church of Latter-day Saints at
Brigham Young University and Lawrence Livermore National
Laboratory7-have facility management systems that collectively use
all of these practices. Both report these practices enable them
to maintain needed facilities at common levels, stabilize repair
backlogs, accurately predict future RPM needs, satisfy customers
that RPM funds are allocated fairly and based on actual need, and
prepare credible budget requests. Similarly, a military
organization-the U.S. Army Health Facility Planning Agency-is
implementing a life-cycle investment strategy that it expects to
reduce major repair costs by 50 percent and cut programming time
from years to months. None of the military services has
implemented all the promising practices for RPM, and their
adoption of these practices is hampered by several barriers,
including 7The Laboratory, part of the University of California,
is a management and operating contractor for the U.S. Department
of Energy. It derives most of its budget from the Department and
has a 5-year contract. Page 3
GAO/NSIAD-99-100 Real Property Management B-280230 * the use of
RPM funds for other operations and maintenance purposes,
complicating budget and contract stability; * the lack of common
standards for allotting space to certain types of facilities; *
the use of multiple budget accounts to pay for RPM, making it
difficult to determine the cost of maintaining facilities; *
incomplete and noncomparable RPM data; * legal and administrative
restrictions that, while having distinct purposes, may hamper the
services' ability to cost-effectively address RPM issues; and *
insufficient training of personnel involved in assessing facility
conditions. DOD and the services have multiple options for
addressing these barriers, including changing their facility
rating and cost accounting systems. We are making recommendations
to DOD to improve its management of infrastructure. Background
According to the Office of the Secretary of Defense (OSD), the
military services are collectively responsible for maintaining
more real property than any other entity in the world-more than
320,000 buildings (with about 2.1 billion square feet), tens of
thousands of miles of roads, and 1.1 million square yards of
pavement (like runways). DOD estimates the plant replacement
value8 (PRV) of this property at more than $500 billion. RPM-which
includes daily maintenance, small repairs, and minor construction
(projects under $500,000 or environmental and health projects
under $1 million)-is funded through the O&M account. Facilities
maintained by the O&M RPM funds include the services' barracks,
administrative space, classrooms, ports, hangars and runways,
roads and railroads, day care centers, schools and churches, and
utility structures and systems (but not the cost of utilities'
consumption). RPM for family housing, many industrial-related and
military medical facilities is funded by separate accounts. 8No
standard definition of PRV could be identified; however, the
Federal Facilities Council cites two methods used by federal
agencies in report no. 131, Budgeting for Facilities Maintenance
and Repair Activities (Washington, D.C., 1996), pp. 10-11. In
1997, we defined PRV as "the cost to replace current facilities
using today's construction costs and standards." See Defense
Infrastructure: Demolition of Unneeded Buildings Can Help Avoid
Operating Costs (GAO/NSIAD-97-125, May 1997), p. 7. See app. VIII
for a discussion of PRV-related issues. Page 4
GAO/NSIAD-99-100 Real Property Management B-280230 Each service
headquarters sets the annual budget for maintenance and repairs
based on funding constraints and other priorities. The budget is
discussed among the headquarters, central facilities management
offices, and bases and commands. Adjustments may be made if a
base or command can prove that the funds to be allocated are
insufficient to meet RPM needs. Congressional concerns have been
repeatedly expressed about DOD's management of RPM. Despite net
congressional increases of about $817 million for RPM over fiscal
years 1992-98, the services' reported repair backlog increased 164
percent during the same period in nominal terms.9 Covering more
than 20 years, reviews by DOD, GAO,10 the Congressional Budget
Office, and outside consulting organizations have found numerous
problems with DOD's management of its properties. (A list of
related reports is at the end of this report.) These problems
include the lack of an overall strategy for managing RPM;
unreliable and inadequate data on facilities' condition and
inventory; lack of centralized data management and lack of access
to basic data; insufficient funding to maintain facilities, in
part resulting from moving RPM funds to other O&M accounts;11 and
problematic service criteria for rating the condition of
facilities or to allocate resources to facilities. As a result of
a 1989 review of its RPM activities, DOD stated that it would (1)
collect RPM costs by facility investment category, (2)
standardize reports on the backlog of maintenance and repairs, (3)
institute 5-year maintenance planning, (4) standardize PRV
computations, and (5) establish a meaningful goal for RPM
investments.12 However, most of these actions 9Data provided by
OSD. We did not validate service backlog estimates. Total
reported backlog increased from $8.9 to $14.6 billion for fiscal
years 1992-98. RPM increases by the Congress above requested
amounts totaled $1.615 billion during this period, but decreases
totaled $798 million, for a net plus up total of $817 million.
For fiscal year 1999, according to OSD, the Congress provided a
net increase of $455 million above the request for RPM, an amount
equal to almost 57 percent of the total net increases of the
previous 7 years. However, since these funds are only now being
spent, the effect on backlog has not yet been determined. 10See
High-Risk Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997),
p. 10; Defense Infrastructure: Demolition of Unneeded Buildings
Can Help Avoid Operating Costs (GAO/NSIAD-97-125, May 1997), pp. 3
and 21; and Deferred Maintenance Reporting: Challenges to
Implementation (GAO/AIMD-98-42, Jan. 1998), pp. 32-34. Numerous
other GAO reports on RPM problems date back to 1976. 11To prevent
this practice, the Congress had included a statutory floor in each
military service's O&M section of DOD's appropriation acts until
the late 1980s (e.g. stating that "not less than" a certain amount
"shall be available only for the maintenance of real property
facilities"). 12DOD, Renewing the Built Environment, March 1989,
Executive Summary. Page 5
GAO/NSIAD-99-100 Real Property Management B-280230 were not
implemented at the time because DOD was concentrating on reducing
its overall infrastructure through base realignments and closures.
As noted in the Senate Appropriations Committee report on DOD's
fiscalyear 1992 appropriations,13 most of the management problems
remained. To address the issues comprehensively, the Congress
appropriated $50 million in fiscal year 1992 for an extensive
pilot test of a system to evaluate the condition of all service
facilities and to prioritize spending using a single set of
criteria. Outside contractors developed an exhaustive condition
assessment system with detailed standards and instructions that
was tested at 10 military installations between July 1994 and
April 1995. The services rejected the system (adoption was not
mandatory), citing the estimated cost. However, no analysis was
done to compare this cost to costs the services incurred for
individual annual assessments. Without an Overall
In the absence of an overall, comprehensive management strategy
for Management Strategy, maintaining the services'
infrastructure,14 each service has established its own criteria
for assessing the condition of its properties and the urgency of
the Services' RPM Is in repairs, prioritizing RPM needs, and
deciding how much to allocate for Disarray
RPM. As a result of the differences among the services' systems,
however, a facility's condition may be rated as "satisfactory" by
one service and "unsatisfactory" by another or might not be rated
at all if the service rates a repair project's urgency rather than
a facility's deficiencies. Furthermore, respondents to our survey
reported weaknesses in their services' assessment systems and a
lack of trained inspectors and RPM personnel overall. Even though
service bases do annually assess facility conditions and estimate
the costs of required maintenance, service headquarters fund
maintenance and repairs at far less than the bases' estimates of
what is needed. Moreover, the major commands do not request the
amount actually needed to accomplish required maintenance and
repairs because 13S. Rept 102-154, pp. 79-80 (1991). 14DOD was to
issue a strategic plan for infrastructure in early 1999; however,
the plan has been delayed indefinitely, as funding intended for it
was used for other purposes. We previously cited the absence of,
but need for such a plan as well as measurable goals, milestones,
and actions to specific DOD infrastructure problems in High-Risk
Series (GAO/HR-97-7, Feb. 1997), p. 10, and in Defense
Infrastructure (GAO/NSIAD-97-125, May 1997), pp. 3 and 21. Page 6
GAO/NSIAD-99-100 Real Property Management B-280230 they believe
that their headquarters will not fund RPM at that level.15 This
situation may lead to a bow wave of backlogged repairs, as
facilities continue to deteriorate when they are not maintained
properly. Consistently funding maintenance at levels below what is
needed to maintain infrastructure vitiates the intent if not the
letter of OSD guidance, which is meant to prevent further
deterioration of infrastructure. In technical comments on the
draft of this report, DOD stated that the April 1999 update of the
Defense Planning Guidance for fiscal years 2001-2005 requires the
services to fund RPM "to at least match" each year's planned RPM
spending that had been set forth in the fiscal year 2000
President's budget Future Years Defense Program. However, since
none of the services' RPM funding plans for fiscal year 2000 will
measurably reduce existing total backlog, the spending levels do
not appear sufficient to keep the overall backlog steady. Without
data on the consistency of ratings of facilities across the
services and a common standard by which to compare the services'
RPM facilities' conditions, OSD and the Congress cannot reliably
compare or prioritize the services' budget requests for RPM. And
if the services continue to delay maintenance on their facilities,
costs for future repairs will increase. Services' Rating Criteria
Are The services' rating systems differ in how they assess
facility condition, Different rate the
urgency of repairs, prioritize RPM needs, and allocate
resources.16 * The Army rates facilities at three levels, from
worst (red), to fair (amber), to best (green), using worksheets
with both written criteria and illustrations. The Army's
Installation Status Report (ISR) provides color-coded summaries of
conditions at bases and commands and for the Army as a whole, and
its software generates the estimated costs of improving
facilities. ISR summary data for every command and its component
bases are maintained in an automated database and are accessible
to facility management personnel at headquarters and to other
authorized users. 15Although perhaps obvious, we mean the level of
funding required to fully meet repair needs, rather than to
partially address needs. In technical comments, the Navy had
stated that its major claimants had based funding requests on the
amounts needed to bring facilities to levels ranging from C1
(best) to C3. A C3 condition is not one in which all needed
repairs have been made, since it is not C1. 16The service's
systems are discussed in detail in apps. I, II, III, and IV. Page
7 GAO/NSIAD-99-100
Real Property Management B-280230 * The Air Force rates
facilities' deficiencies with regard to their estimated impact on
four mission areas, at three levels (critical, degraded, and
minimal) in its Facility Investment Metric (FIM) system. * The
Navy uses an engineering-based assessment to determine facilities'
deficiencies, which it reports in the Annual Inspection Summary
(AIS). Data from the summary is then used to rate the
deficiencies' impact on 28 mission areas at four levels, from has
fully met demands (C1) to has not met vital demands (C4). These
ratings are shown in the Navy's Shore Base Readiness Report. * The
Marine Corps, a part of the Navy, uses its Commanding Officer's
Readiness Reporting System and, in addition, a version of the AIS.
The system is modeled on the Navy's Shore Base Readiness Report,
rating readiness in 26 mission areas at four levels, from fully
mission capable to not mission capable. According to our survey,
bases within the same service and between the services showed
varying degrees of consensus with regard to how they ranked the
reasons that facilities and/or mission areas received a "worst"
rating. We grouped the responses from bases for eight criteria
used to assign a "worst" rating into three categories-most
important, moderately important, or least important reason for a
"worst" rating for a facility or mission area. (Results for the
Marines are not included because of the very few number of Marine
bases that ranked these factors.) Figure 1 shows how the
responding bases ranked eight criteria or factors in this regard.
Page 8 GAO/NSIAD-99-100 Real
Property Management B-280230 Figure 1: Bases' Ratings of
Importance of Criteria in Worst-Level Ratings Air Force
Army Navy Age exceeded guidelines 10 20
70 30 38 32 6 41 53 Severe physical
deficiency 34 58 8 59 35 6 54
46 0 Significant safety/health 68 29 3
41 49 10 38 0 /environmental defects
62 Configuration did not meet a goal 6 78 16
19 68 13 5 90 5 (e.g., restroom vs.
latrines) Configuration did not meet purpose of structure
14 82 4 12 82 6 10 67 24
Appearance 39 48
33 severely deficient 2 59 8
44 5 62 Inadequate space per guidelines
13 85 2 26 60 14 5 81 14
Conditions severely impede mission 73 27 0
29 62 10 72 28 0 Percent of respondents
rating factor as most important Percent of respondents rating
factor as moderately important Percent of respondents rating
factor as least important Source: Responses to question 6, GAO
survey. Totals may not add exactly to 100 percent due to
rounding. As shown in figure 1, in terms of cross-service
diversity, three times as many Army bases as Air Force bases (30
percent vs. 10 percent) rated "age exceeded guidelines" as a most
important factor in assigning a "worst" rating. On the other
hand, more than twice as many Air Force and Navy bases as Army
bases (73 and 72 percent vs. 29 percent) cited mission impact as a
most important factor in assigning a "worst" rating. Also, within
the Army and the Air Force, bases lacked consistency on the Page 9
GAO/NSIAD-99-100 Real Property Management B-280230 importance of
several factors leading to ratings of "worst." For example, 29
percent of the Army bases reported "conditions severely impede
mission" as a most important reason for a "worst" rating, while
62 percent ranked it as of moderate importance. Similarly, 39
percent of Air Force bases rated "severe physical deficiency" as a
most important factor, while 59 percent rated it as of "moderate
importance." Bases within each service also showed mixed
consistency about the importance of nine criteria for allocating
funds for repair projects for facilities rated "worst" at their
base. (See app.VI, table VI.1.) For example, 35 percent of Army
bases cited physical condition as the most important criterion for
determining RPM allocations, but 59 percent rated it as moderately
important. Similarly, almost twice as many Air Force bases rated
physical condition as moderately important as those citing it as
the most important factor (63 percent vs. 36 percent). In the
Navy, 19 percent of bases ranked a commander's priority as a most
important criterion, while more than two-thirds rated it as
moderately important. In the Air Force, almost twice as many
bases rated commander's priority as moderately important as those
that rated it most important (63 percent vs. 34 percent). RPM
Assessment System Has In our
questionnaire, we asked bases to indicate which weaknesses, if
any, Several Weaknesses they
associated with their facility condition assessment systems.
Table 1 shows the percent of bases in each service that chose a
given weakness. Table 1: Weaknesses in Services' Condition
Assessment Systems Percent of responding bases that checked
weakness as relevant to RPM process Type of weakness
Army Air Force Navy Marines Little or no
linkage between condition assessments/ determination of
requirements and RPM budget estimation
46 29 30 50 Little or no
linkage between assessments/requirements and RPM allocation
61 39 41 56 Cost estimates
generally not accurate
36 25 34 37 Ratings too
subjective
30 34 40 56 Using one
rating for multiple facilities oversimplifies conditions
51 37 38 37 Ratings not
informative
53 32 27 25 Ratings too
broad
32 30 28 44 Ratings not
timely
15 14 22 44 (continued)
Page 10 GAO/NSIAD-99-100 Real
Property Management B-280230 Percent of responding bases that
checked weakness as relevant to RPM process Type of weakness
Army Air Force Navy Marines
Assessments lack robust engineering base
40 25 18 19
Overemphasis on appearance
38 9 7 12 Others
21 25 18 25
Source: Responses to question 12, GAO survey. Vertical totals
exceed 100 percent because more than one choice was possible.
Bases identified several weaknesses in their assessment systems.
First, in all the services, respondents reported budget-related
problems-that there is little or no linkage between condition
assessments and/or the determination of RPM requirements with
either RPM budget estimates or the final allocation of resources.
Base officials told us that they were concerned that their major
commands and headquarters do not adequately consider the bases'
identified needs in preparing RPM budgets or allocating resources.
Also, 25-37 percent of respondents reported that cost estimates
generated by condition assessments/requirements determination are
generally not accurate. Second, as also shown in table 1, many of
the services' bases identified four problems with their assessment
systems. First, the criteria for condition assessment are too
subjective, involving individual judgment. Second, the process of
summing up ratings for a broad category (such as all community
support buildings) with multiple facilities oversimplifies
conditions. Third, the ratings (e.g., critical or degraded) do
not make clear what is wrong with a specific facility (making it
necessary to go back to the original paperwork). Finally, overall
condition ratings are too broad (e.g., red, amber, and green).
Substantial percentages among Army respondents also felt that the
assessments lacked a robust engineering basis and overemphasized
facility appearance. In addition, when asked in a different
question about ways to improve the RPM process, in each service
except the Navy, nearly two-thirds of the respondents endorsed the
idea of a system that places more emphasis on long-term, strategic
maintenance planning and de-emphasizes annual assessments of
facilities. Fifty percent of the Navy respondents endorsed this
idea. Similarly, there was substantial agreement among bases that
RPM funding should be based on facilities' physical deficiencies
(Air Force, 56 percent; Army, 53 percent; Navy, 48 percent; and
Marines, 50 percent). There was even greater consensus that RPM
funding should not be based Page 11
GAO/NSIAD-99-100 Real Property Management B-280230 on a fixed
increase above or below the previous year's level (Air Force, 51
percent; Army, 59 percent; Navy, 61 percent; and Marines, 87
percent). Survey responses from bases also indicated that bases
lack procedures to ensure that assessments of facility conditions
are valid and reliable, that is, that they actually reflect the
facilities' physical conditions. The responses are summarized in
table 2. Table 2: Percent of Bases Using Listed Methods to Ensure
Condition Assessments Are Consistent Service-wide Type of
validation procedure
Army Air Force Navy Marines
average No formal procedure used to ensure consistency of
assessments, other than expertise/training of assessor
56 51 60 38
55 Some number of facilities are reinspected by different
assessors to determine consistency with initial review
4 3 4 6
4 Random sample of facilities are reinspected by different
assessors 23 7 7
19 12 Outside contractors used to validate initial
ratings 2 1
6 13 3 Source: Responses to
question 10, GAO survey. As table 2 shows, 55 percent of all
survey respondents indicated that they had no formal standardized
procedures to determine the reliability of inspectors' ratings.
Four percent reported that they used different inspectors for
follow-up visits to verify reported problems. Lack of Trained
Inspectors According to our survey and
discussions during visits to 35 bases and Affects the Quality of
RPM commands, training and resource
shortages are an unresolved RPM Assessments
problem for large majorities of service installations, and these
problems constrain the quality of the assessment process. About
25 percent of survey respondents in the Army and the Air Force, 31
percent in the Marines, and about 51 percent in the Navy, reported
that they do not provide or require some form of standardized
training for personnel that assess the condition of facilities.
Bases reported that 83 percent of the facility inspectors are
building users who are not trained professionals such as engineers
or craftsmen.17 Given this situation, we question how 17The Air
Force bases reported that 86 percent of inspectors were building
users; the Army, 82 percent; the Navy, 71 percent; and the
Marines, 64 percent. Bases were asked to identify the
qualifications of "persons who determine requirements or conduct
assessments/inspections of facility conditions." Page 12
GAO/NSIAD-99-100 Real Property Management B-280230 these
inspectors can be expected to produce reasonably accurate and
consistent ratings of facilities. In our survey, many bases also
reported shortages of personnel in the RPM area, sufficiently
trained personnel, and personnel to carry out RPM administrative
work. The responses are summarized in table 3. Table 3: Percent
of Bases Identifying Training and Resource Constraints Service-
wide Type of constraint
Army Air Force Navy Marines average
Shortage of personnel for RPM
61 45 35 44 47
Shortage of trained personnel (i.e., with skilled craft or
engineering expertise)
48 42 28 63 41
Shortage of resources-time, budget-to carry out assessments
72 61 71 75 67
Source: Responses to question 11, GAO survey. Insufficient RPM
Funding The services' plans for funding
RPM could result in the further deterioration of infrastructure
and an increase in backlogs of repairs. The Defense Planning
Guidances since 1997 were intended, in part, to get the services
to increase spending in areas considered as underfunded. The
April 1999 guidance update for fiscal years 20012005 requires that
RPM funding at least match the annual levels in the fiscal year
2000 President's budget Future Years Defense Program while
eliminating a previously established goal to meet 75 percent of
RPM requirements. However, even if the service headquarters
comply with the update, they do not plan to fund RPM at levels
that will meet identified RPM requirements (both critical and
noncritical). Furthermore, many bases and commands do not request
funding to meet all their RPM needs and some receive uneven
allocations of funds for RPM, relative to their identified needs.
Services' Plans May Lead to None of the
services' plans provide sufficient RPM funds to keep the
Deterioration of Facilities and backlog of
repairs at current levels, as measured by their own rating
Increases in Backlogged Repairs systems. As a result, overall
service infrastructure conditions may deteriorate over the next 4
to 5 years, although improvements in some specific type of
facilities, such as barracks, may result from targeted spending.
Delaying repairs is not cost-effective, as noted at a March 1999
congressional hearing, where an OSD official remarked that the
lack of Page 13
GAO/NSIAD-99-100 Real Property Management B-280230 timely
maintenance leads to expensive repairs in the future.18 Despite
this situation, the services plan to fund RPM at varying levels as
follows: * The Air Force plans no funding for repair projects
until fiscal year 2003; preventive maintenance is funded at 1
percent of PRV. The Air Force estimates that through fiscal year
2005, it will provide funding for only 40 percent of the repairs
identified as critical or degraded. * The Navy plans to fund RPM
at 1.84 percent of PRV in fiscal year 2001, increasing that
gradually to 2.59 percent by fiscal year 2005; under this plan,
critical backlog will increase about 10 percent, from about $2.5
billion to about $2.75 billion in fiscal year 2003, and then begin
to decline. While critical backlog in barracks will be virtually
eliminated, according to the Navy, other facilities will continue
to be at C2 and C3 levels,19 and noncritical backlog is not
addressed. * The Marine Corps estimates that by fiscal year 2005,
backlogged repairs will increase 60 percent in dollar value. * The
Army plans to increase RPM spending from 64 percent of its
requirements to about 84 percent over fiscal years 20002005, but
because of the RPM requirements baseline the Army uses, it is
unclear that this increase will stabilize backlog.20 Further
backlog increases may produce a bow wave of more costly repairs in
the future. It was estimated that the services' reported backlog
would increase by $2 billion (13.6 percent) in 1 year, to more
than $16.6 billion in 18Prepared statement of Randall A. Yim,
Acting Deputy Under Secretary of Defense (Installations), to
Senate Armed Services Subcommittee on Readiness, March 10, 1999,
p. 6. 19The Navy defines the C3 level as the one at which the
condition of facilities permits meeting the demands of assigned
mission "only marginally," "but with major difficulty." According
to the Navy, the RPM funding levels for fiscal year 2001 are
intended to bring aviation, waterfront operations, training
facilities, and utilities to the C2 level ("has substantially met
all demands"), "with all other facility categories at the C3
level." 20The Army defines its RPM requirement as the "estimated
cost for the minimum annual sustainment of facilities . . . at
existing levels plus the cost of renovations that are not new
construction." The Army plans to fund this requirement on an
upward slope; it estimates it will reach 84 percent of this
requirement by 2005. According to the Army, however, it would
today take about $14.8 billion to bring O&M RPM-funded facilities
up to the highest level of its condition assessment system, the
ISR. The Army requested extra annual funding of $1.4 billion to
address these deficiencies, but it is slated to receive only $178
million annually, if it becomes available, or about 1.3 percent of
total ISR-estimated needs. Therefore, it is unclear how backlog
will be constrained. See app. I. Page 14
GAO/NSIAD-99-100 Real Property Management B-280230 fiscal year
1999.21 A contributing cause may be, as we reported in 1997, that
total RPM spending decreased 38 percent during fiscal years 1987-
96, while the services reduced the square footage they maintained
only about 10 percent during the same period.22 RPM Budgets Not
Consistent The services' future plans are a reflection of the
services' long-standing With Requirements practice of
failing to fund RPM at levels sufficient to meet identified total
requirements. Responses to our survey showed little relationship
between the known, identified RPM needs and the funds requested to
address those needs. For example, major commands' overall
requested an average of 20.4 percent of their bases' total
identified needs in fiscal year 1997.23 Similarly, bases reported
receiving 16.2 percent of known RPM needs from their commands in
fiscal year 1997. Of their needs, Army bases reported that they
received funding equal to 15.4 percent; Air Force bases received
18.3 percent; Navy bases, 14.2 percent; and Marine Corps, 28
percent. According to headquarters facility management officials
of each service, funding RPM is not their service's first
priority. An Army official described it as the last of four
priorities. The major commands and bases understand that this is
the culture for RPM and have acted accordingly-as reflected in the
data reported to us by the commands and the bases. For example,
base officials said that in their view service headquarters do not
adequately consider RPM needs identified during the assessment
process in making decisions about budget and allocation of
resources. In light of the lack of apparent connection between
the assessments, requests, and actual subsequent RPM funding
allocations, some base officials questioned the wisdom of
expending resources on annual assessments. 21House Report 105-591,
p. 48 (1998). We did not validate service backlog estimates. The
calculation of changes in reported backlogs has become
increasingly problematic since the Army's method is different from
that of the other services. The Army estimates backlog as the
amount required to bring designated facilities to a higher level
of condition according to its condition assessment system. The
Army previously defined backlog as the unfunded cost of all
identified repairs, regardless of their criticality or relevance
to mission. The Navy reports only critical-rated project costs as
backlog; it excludes noncritical "deferrable" repairs. The Air
Force categorizes backlogs at three levels and reports only the
most urgent top two as its backlog. 22Defense Infrastructure:
Demolition of Unneeded Buildings Can Help Avoid Operating Costs
(GAO/NSIAD-97-125, May 1997), p. 4. 23Request by Army, 9.3
percent; Air Force, 31 percent; Navy, 28 percent; and Marines, 30
percent. The overall average percentage was reduced because the
Army's identified needs were more than double the next highest of
any service, and Army commands requested 9.3 percent of this
total. Page 15
GAO/NSIAD-99-100 Real Property Management B-280230 In addition to
the disconnect among RPM needs, requests, and allocations,
responses to our survey suggest that the division of RPM funds
among bases has been inequitable. Some bases reported allocations
as much as 27 times the amount that other bases received relative
to their needs. For example, for fiscal year 1997, bases in one
Air Force command reported receipt of 7 percent to 191 percent of
their needs; bases in one Army command reported receipt of 9
percent to 118 percent of their needs; and bases in a Navy command
reported receipt of 3.5 percent to 39 percent of their needs. The
scope of these differences suggests that funding is based on
criteria other than need. Promising Practices On the basis of
experts' recommendations and other criteria, we had Could Help DOD
discussions with almost 2 dozen nonmilitary entities about their
facility assessment, planning, and budgeting systems.24 The other
criteria included Improve RPM citations in the expert
literature of entities with good reputations for RPM Management
practices, size of the organization, and comparability of entities
to the military services in terms of goals of maintaining
infrastructure for long periods. Of these, we found two that have
a set of particularly promising practices that bear consideration
by the military services. These are (1) Brigham Young
University's Capital Needs Analysis (CNA) Center, Provo, Utah, and
(2) the University of California's Lawrence Livermore National
Laboratory (LLNL), Livermore, California.25 Two Organizations'
The practices used by CNA and LLNL are designed to ensure reliable
and Promising Practices valid property assessments, rational
prioritization of needs, equitable allocation of resources, and
cost-effectiveness in terms of making repairs at the appropriate
time to avoid the deterioration of facilities and thus more
expensive repairs. CNA and LLNL have incorporated the following
six practices into facilities management, which they say have made
maintenance management more efficient and cost-effective: *
established a single system for counting and categorizing
inventory; 24App. IX contains a complete list of these experts and
the organizations we queried. 25The CNA Center manages the
worldwide facilities of the Church of Latter-day Saints at more
than 7,000 locations, including 4 universities. The LLNL system
encompasses 600 diverse buildings (6.2 million square feet) with a
PRV of almost $3 billion. Page 16
GAO/NSIAD-99-100 Real Property Management B-280230 * have a
single, valid engineering-based system for assessing facility
conditions, using adequately trained personnel at multiple levels
of review; * prioritized budget allocations based on physical
condition, relevance of facilities to the mission, and life-cycle
costing and budgeting; * set up a single property maintenance
budget that is controlled by a central office with the power to
shift resources to facilities in the greatest need; * created
incentives to demolish or vacate excess space; and * restricted
the use of RPM funds for other maintenance purposes. As discussed
below, one of these practices-life-cycle planning-requires further
explanation; and LLNL uses a seventh practice-an annual
maintenance charge. Life-Cycle Planning a Key Life-cycle
planning is a core element of LLNL's and CNA's management of
Element to Managing Facility facility maintenance. Under the
life-cycle concept, a building's useful life is Maintenance
limited by the durability of facility components such as
electrical systems.26 The two organizations have created databases
on facilities and their components (such as heating, ventilation,
and air conditioning units) based on their inspections. With this
data, the two organizations can estimate facility components'
remaining life cycles (taking into account previous results as
well) and replace components only when necessary. For example, a
component such as an air-conditioning system would be replaced
only when its repair cost exceeded a given percentage of its
replacement cost or it broke down so often that it was ineffective
to repair it both in terms of cost and maintenance time. With
life-cycle data, both organizations can project peaks and valleys
of future maintenance spending and estimate the RPM funding level
required to sustain facilities through their life cycles. CNA
budgets RPM based on a 40-year life cycle27 and a 4-year budget
that it adjusts annually based on condition assessments and the
resulting estimated future costs. The center states that the
transparency of the life-cycle system and its objectivity in
26Sean C. Rush, Managing the Facilities Portfolio: A Practical
Approach to Institutional Facility Renewal and Deferred
Maintenance (Washington, D.C.: National Association of College and
University Business Officers, 1991), p. 48. 27For more details,
see app. VIII and Robert E. Hutson and Frederick M. Biedenweg,
"Before the Roof Caves In: A Predictive Model for Physical Plant
Renewal," in APPA, Capital Renewal and Deferred Maintenance in
Critical Issues in Facilities Management, vol. 4 (1989), pp. 12-
29, and Managing the Facilities Portfolio, pp. 52-62. Page 17
GAO/NSIAD-99-100 Real Property Management B-280230 assessing RPM
needs have helped reshape the culture of its component
institutions; the change has permitted the center to base
maintenance on real needs rather than on the internal influence of
different entities within CNA. With this process, CNA as ensured
overall systemwide minimum adequate conditions for all facilities;
entities that choose higher standards must use external funding.
Further, according to CNA, the use of life-cycle analysis has made
its budget requests more credible, helping it to obtain adequate
funding for true RPM needs. Even though LLNL operates on a 1-year
budget, as do most federal agencies and the military, it uses
life-cycle data to prioritize RPM spending: that is, the
components most likely to fail receive funding first. LLNL
management has used the life-cycle process to demonstrate the need
to adequately fund preventive maintenance and thus preclude costly
component failures. Both LLNL and CNA also require departments and
programs to use their own funds to pay for improvements that do
not address a repair or maintenance need, such as replacing
carpeting that is not worn out. One government entity, the Army's
Health Facility Planning Agency (HFPA),28 uses life-cycle
principles for facility management. HFPA has developed a costing
and budgeting process based on life cycles that it is extending
across 1,600 hospitals, clinics, and other health-related
facilities worldwide. The agency prioritizes RPM spending based
on a combined assessment of predicted needs over a life cycle,
known physical deficiencies, and mission impact, and it targets
funds for those facilities that serve the largest number of
people. It assumes a 50-year facility replacement cycle and uses
life-cycle estimates to optimize investments in operations,
maintenance, repairs, and minor construction.29 HFPA reports that
in the 5 years it has used life-cycle costing and budgeting, it
has reduced its anticipated major repair costs by 50 percent.30
28HFPA is in charge of RPM for Army hospitals and clinics
worldwide; its funding comes from the Defense Health Program, not
from the Army's O&M RPM account. HFPA also develops long-term
strategic RPM plans and the methods used to assess the condition
of facilities and allocation priorities. 29Army HFPA mission
booklet, p. 4. 30Army HFPA mission booklet, second to last page.
We did not validate the claimed savings but find that RPM experts
emphasize that adequate preventive maintenance can reduce overall
RPM costs by avoiding costly, catastrophic repairs resulting from
neglect. Timely and adequate preventive maintenance is widely
regarded as essential to making RPM cost-effective. Page 18
GAO/NSIAD-99-100 Real Property Management B-280230 Lawrence
Livermore's LLNL has another practice that stands
out as potentially promising and Annual Maintenance Charge cost-
effective in managing facilities. It charges an annual fee of $6
per square foot for maintenance and repair, cleaning, grounds
care, and waste disposal costs. According to Laboratory
officials, the charge compares favorably to those incurred by
other organizations for the same range of services. Also,
external reviewers have twice examined the LLNL charge and found
it to have been based on incurred costs. According to Laboratory
officials, the charge has focused facility users' attention on
their maintenance costs and has, as intended, led to reductions in
the amount of space claimed to be necessary. Through the fee, the
Laboratory has generated sufficient revenue to pay for repairs,
thereby preventing increases in its maintenance backlog. It has
not reduced the existing backlog (at current rates) but does not
consider this significant because the backlog includes
deficiencies in buildings that are excess to its needs and that
are being maintained at a minimum level. Charging for maintenance
by the square foot makes clear how much space costs, and such a
charge could be a required component of any military base's budget
to create a minimum annual funding level to ensure adequate
maintenance. Military entities that use working capital funds
have a similar system in that RPM and other overhead costs are
included in the rates that are charged to military customers for
services rendered. Barriers Hinder the None of the
services use all of the promising maintenance practices we
Services' Use of found at CNA and LLNL, and they
would have to overcome several barriers to successfully adopt
these practices. These barriers include the services' Promising
Practices differing cultures related to RPM
standards for maintaining facilities, budget limitations and the
low priority given to fund RPM, the lack of comparable and
adequate data, the lack of common space allocation standards, and
legal and administrative rules. These barriers would be a
significant challenge to overcome; however, other organizations
have faced similar challenges and met them. Services' Cultural
Barriers DOD's 1999 Annual Defense Report recognizes that
base facility conditions affect quality of life and retention.31
At the same time, each service has different standards to which
facilities are maintained. As a result, the 31DOD, 1999 Annual
Defense Report, ch. 9, p. 10. Page 19
GAO/NSIAD-99-100 Real Property Management B-280230 services have
created widely varying living and working conditions. For
example, the Air Force emphasizes high-quality conditions in part
because Air Force bases are collocated with their platforms (their
aircraft). However, Air Force RPM spending plans, as well as those
of the other services, permit increases in backlog, including
critical-rated repairs, over the next several years. RPM Budgeting
Barriers Migration of O&M RPM Funds The services have long used
RPM funds for other O&M purposes (such as unfunded emergency
military operations), moving funds from the RPM account for other
purposes considered more pressing. Although the RPM funds are
generally returned toward the end of the fiscal year, urgent
repairs may be delayed if contracts are canceled. Thus, the
flexibility afforded by fungibility makes cost-effective planning
and management of RPM problematic. Migration or even the outright
reduction of planned funding also greatly hinders the use of life-
cycle costing and budgeting. Although the Army's HFPA uses life-
cycle principles to assess its facilities and to plan its RPM
budgets, its ability to implement its plans was compromised in
fiscal year 1999 by the arbitrary movement of its RPM funds to
other accounts. As noted, both LLNL and CNA prohibit RPM fund
migration because it creates budgeting and contracting
instability. Budget Process There is little, if
any, clear connection between the detailed assessments of actual
repair needs made at the base level and subsequent RPM budget
requests or allocations. While RPM needs are reported by bases
and major commands to headquarters, the service headquarters have
funded only about one-sixth of the total known RPM needs,
according to the budget data reported on the surveys. Moreover,
we were told that commanders do not request the full amounts
needed, knowing that funding will never be provided at those
levels. Federal Budget Cycle The single-year O&M budget
constrains each service; all are barred from accumulating reserves
to address future, predictable surges in repair needs. However,
some organizations that are similarly constrained, such as LLNL
and the Army's HFPA, use life-cycle analyses for planning purposes
to set RPM budgets at levels sufficient to address predicted RPM
needs. Multiple Accounts Military RPM is paid for from
multiple accounts, some of which are quite large in dollar terms
(e.g., military family housing, industrial activities Page 20
GAO/NSIAD-99-100 Real Property Management B-280230 under working
capital funds, hospitals and health clinics) and not included in
O&M. For example, the Army pays for RPM from 27 different
accounts; O&M RPM accounted for just 55 percent of the Army's
expenses related to real property maintenance in fiscal year 1997.
In addition, the Center for Naval Analyses found that the Navy had
110 different accounts for RPM use in 1995. Navy O&M RPM applied
to just 45 percent of the estimated total of Navy plant value in
1995.32 As a result of these multiple accounts, funding for RPM
is fragmented, creating problems in tracking how much is actually
being spent. Barriers Created by The services have
different coding schemes to record their inventory of
Incomparable, Inaccessible, facilities; as a result, this
information across the services is not and/or Incomplete Data
comparable. In addition, inventory data are often inaccessible
and/or incomplete. Only the Army published an annual report-
called the Annual Summary of Operations (now discontinued)-that
specified spending per square foot at every base worldwide, by
type of facility and by different type of maintenance.33 The
Army's database contained separate costs in standard metrics
(e.g., per square foot, per railroad mile, per square yard of
pavement) for 113 different facility types and RPM-related
activities. The Air Force and the Navy (and, the Marines, whose
inventory is recorded in the Navy's database) already have large
property inventory databases, but they are neither on-line nor
nearly as detailed as the Army's in terms of RPM-related spending
categories.34 In addition, OSD has not required the Navy to fully
fill out budget exhibit data sheets, making it impossible to
compare Navy RPM spending to the other services' spending on a per
square foot basis. 32Ackerman, Glenn, et.al., The Backlog of
Maintenance and Repair: Preventing Its Growth and Measuring Its
Impact, Center for Naval Analyses (Alexandria, Va.: Apr. 1995), p.
7. 33Department of the Army, Directorates of Public Works, Annual
Summary of Operations, for any fiscal year through 1997. We found
no comparable report by other services. The Army's Installation
Support Center reports that the requirement for publishing the
annual summary has been withdrawn, as of fiscal year 1998, and
that no comparable report will be forthcoming. The report was
also available on-line. 34Although the Army's database is more
comprehensive, it requires greater clarity regarding who is paying
for what, and over what time period, since RPM expenditures by DOD
entities for which the Army has technical responsibility are
listed as Army spending, when in fact the spending is by non-Army
entities and is actually reimbursed. For example, at one base, we
found that an intelligence entity made extensive renovations
through RPM at an annual cost of $8 per square foot (four times
more than the Army average for comparable space), and the cost was
recorded as Army RPM spending. Although reimbursed, the spending
was averaged into Army accounts, and the $8 cost noticeably
increased the average cost per square foot for both that base and
for the command in which its spending was averaged. Page 21
GAO/NSIAD-99-100 Real Property Management B-280230 Without valid,
reliable data, OSD and the services cannot adequately evaluate the
cost-effectiveness of real property management or even know how
much is being spent on RPM. A March 1998 Logistics Management
Institute analysis found that during the Quadrennial Defense
Review (QDR), DOD analysts and managers often worked with
databases 20 years behind modern systems and practices used in
private industry. The Institute noted that the databases "lacked
the capability, flexibility, and responsiveness to meet analysts'
needs."35 In April 1999, OSD issued a cost factors handbook for
facilities that reduced about 3,000 service facility category
codes to about 400 and that reports average RPM costs per square
foot for each of these codes, as well as new construction costs
per square foot. These were based on commercial cost-estimating
guidelines compiled by multiple expert sources, including the
Building Owners Management Association, the International
Facilities Management Association, R.S. Means, Whitestone, and the
Army Cost and Economic Analysis Center.36 OSD intends to use
these cost factors, once validated, to show the services the level
of spending required to sustain facilities. However, the services
have not yet decided whether to accept the revised facility
category codes. Barrier Due to Lack of Common The services set
their own space standards for facilities and workers (e.g., Space
Allocation Standards the Army allocates 162 square feet
per administrative worker; the Navy and the Marines allocate 110
to150 square feet). Without common standards, it is difficult to
constrain the use of space, including identifying "excessive" use.
(The Army uses space standards to determine RPM funding and
penalizes bases that have excess space.) Although some facilities
will always be service-unique (e.g., nuclear submarine repair
facilities; intercontinental ballistic missile silos), many (such
as barracks, standard classrooms, administrative space, and family
housing) are common across the services. Legal and Administrative
Certain laws and administrative restrictions can hamper the
services' Barriers ability to cost-
effectively address RPM issues, even though they have other
35Gerald W. Westerbeck and Jordan W. Cassell, Infrastructure
Planning and Real Property Management: New Facility Category
Coding (Logistics Management Institute, McLean, Va.: Mar. 1998).
36DOD Facilities Cost Factors Handbook, DOD (Apr. 1999), p. 2.
Page 22 GAO/NSIAD-99-100
Real Property Management B-280230 important purposes. For
example, the National Historic Preservation Act37 places
restrictions on the demolition of some buildings and imposes
potentially costly standards of repair on some historic
structures. At one base, for example, decorative fireplace tiles
in officers' homes were deemed historic, and replacements had to
be ordered from England because no source for them could be found
in the United States. At another base, windowsills for "historic"
buildings required repair by craftsmen with special certification.
However, the base could not afford the specialist craftsmens'
rates and chose to let the sills continue to fall apart. Under
the McKinney Act,38 the services must rate properties slated for
demolition in the contiguous 48 states, Alaska, and Hawaii, to
determine their potential utility to house the homeless; in fiscal
year 1998, the Army rated nearly 9,900 buildings for this purpose,
including facilities at remote locations. Conclusions and In
the absence of a sound DOD strategy for managing the upkeep of its
Recommendations infrastructure, the services use different
methods and criteria for assessing the condition of properties,
prioritizing maintenance and repair needs, and allocating
resources. Without standard assessment criteria, DOD cannot
compare maintenance costs or facility conditions across the
services. This hampers the development of a sound strategy for
managing the upkeep of the military's infrastructure. Moreover,
the services cannot ensure that their ratings of facilities'
conditions or urgent repairs are valid or reliable either at
individual bases or within each of the services because facility
assessors do not apply their service's criteria consistently. As
a result, DOD does not have accurate and comparable databases on
facility conditions, mission impact, and repair costs, and the
Congress cannot be assured that it is funding maintenance and
repairs that will provide the best return on its investment. Bases
report little connection between their efforts and actual budget
allocations from their headquarters. Furthermore, RPM funds are
reallocated for non-RPM purposes. Given the uncertainty and
instability in RPM funding, contracting and rational planning for
maintenance are made 37The National Historic Preservation Act (16
U.S.C. 470h-2) governs the preservation of historic buildings and
can prevent the services from demolishing a historic building.
38The McKinney Act (16 U.S.C. 11411) requires DOD to work with the
Department of Housing and Urban Development to determine whether
unused or underused facilities scheduled to be demolished are
suitable for use by the homeless. Page 23
GAO/NSIAD-99-100 Real Property Management B-280230 more
difficult. When maintenance is deferred, facilities further
deteriorate and become more expensive to repair. DOD has the
opportunity to improve its infrastructure management through the
adoption of promising practices already in place in the private
sector. We recognize that barriers to implementing these
practices exist and that DOD will face challenges in overcoming
some of these barriers. However, in the long term, the adoption of
sound standards, measures, and processes will help DOD maximize
its RPM investment and ensure that needed facilities are
adequately maintained, and those that are unneeded are removed
from inventory. Development and issuance of a meaningful,
comprehensive cross-service strategic plan is essential to
eliminating the disarray in the management of the services'
infrastructure. Such a strategic plan should provide for
effective and equitable methods to connect actual repair needs to
budget allocations to repair and maintain those facilities that
are essential to the multiple missions of most bases, from
operations to community welfare. To improve DOD's RPM management
and address barriers to change, we recommend that the Secretary of
Defense 1. fund the development of DOD's strategic facilities
plan and 2. develop a cross-service integrated strategy, in close
coordination and consultation with the heads of facilities
infrastructure of each service, to comprehensively address RPM
issues; the strategy should provide, at a minimum, for * uniform
standards that set the minimum condition in which military
facilities are to be maintained and standardized condition
assessment criteria; * standard criteria by which the services are
to allocate space for different types of facilities (e.g.,
barracks, classrooms, administrative buildings) and against which
RPM funding allocations will be measured; * standard criteria for
inventorying DOD and service property (except for relatively few
service-unique facilities); * computerized, on-line inventory and
cost databases that permit meaningful comparisons, across and
within the services, of RPM spending by type, size, and location
of facility and RPM activity, including direct data access by OSD;
* standard cost accounting methods by which the services will
record and track their RPM expenditures so that they and DOD know
how much is Page 24 GAO/NSIAD-99-100
Real Property Management B-280230 being spent, where it is being
spent, and on what type of facility or RPM-activity it is being
spent, by common metric, using the Army's Directorate of Public
Works' Annual Summary of Operations report (published through
1997) as a potential model; * the identification of priorities for
the services to use to explicitly link needs assessments with
resource allocations and tracking systems that show whether or not
identified high priority needs are allocated the funds intended
for them by the Congress; * mandated training standards
(curriculum and hours) for all those involved in condition
assessment and ratings of repair urgency; and * the services'
adoption of a comprehensive, valid, engineering-based assessment
system that incorporates life-cycle planning into facilities
maintenance based on the well-developed methods already used by
nonmilitary entities. In addition, the Department's RPM strategy
needs to deal with the issue of funding instability, particularly
the migration of RPM funds to non-RPM uses and the lack of RPM
reserve funds. In this regard, the Department should consider the
feasibility of adopting the promising practices identified in this
report. To the extent that adoption of any of these practices
would require changes to existing law, we recommend that the
Department develop a legislative proposal for submission to the
Congress. Agency Comments and DOD stated that, overall, our
report provides a good review of the Our Evaluation
Department's real property maintenance program. In addition, it
stated that our survey results provided the Department feedback on
efforts to improve existing policy and methodologies. DOD
concurred or partially concurred with 9 of 12 components of two
overall recommendations, nonconcurred with 3 of the 12, and
provided a number of comments that it characterized as technical.
Where appropriate, we made minor changes and clarifications in
responses to these technical comments. However, we believe that
some of the agency's comments warrant further discussion. DOD
believes that our report does not give credit to the services for
their accomplishments in better defining their RPM requirements
and determining RPM funding allocation. DOD also stated that it
has previously examined some of our recommendations but did not
implement them because-in the case of condition assessment
surveys-of their high cost or because of "policy decisions
regarding devolution of DOD-wide Page 25
GAO/NSIAD-99-100 Real Property Management B-280230 standards or
establishment of working capital funding." DOD also expressed the
view that "anomalies of the survey results may be attributable to
misunderstandings of the survey instrument by installation level
personnel rather than an indicator of a lack of clear policy for
field activity personnel." With regard to crediting the services'
efforts to better define RPM requirements, we recognized the
services' efforts in our report. We analyze the systems used by
each service in detail, with a separate appendix on each system,
citing the strengths we found, such as the Army's annually
published RPM inventory database. We also noted advanced
techniques for RPM used by the Army's Health Facility Planning
Agency, which could be used as a model by other service branches
and other Army components. With regard to the cost of implementing
a DOD-wide standardized Condition Assessment Survey (CAS), we
found that no cost comparison had been made by DOD of a CAS to the
systems used by the services when a CAS was field tested in the
early 1990s. Moreover, we note that without a standard CAS,
conditions, mission impact, and inventory data cannot be compared
from one service to another and, therefore, DOD cannot prioritize
the RPM needs of the services. We do not agree that answers to our
questionnaire were due to "misunderstandings of the survey
instrument." DOD does not cite any particular issue on which they
believe personnel were confused by the survey. In order to
eliminate potential misunderstanding in the survey instrument, we
pretested it at 15 Army, Navy, and Air Force bases and commands,
and provided for its review by each services' headquarters
facility management staffs. Revisions were made based on feedback
from the field pretests and from the headquarters' RPM experts.
Moreover, at some bases, facility management personnel told us
orally that they found the regulations and policies confusing and
contradictory. DOD nonconcurred with our recommendations that 1.
DOD's strategy for RPM should, at a minimum, provide for standard
cost accounting methods by which the services will record and
track their RPM expenditures, stating that "the level of
recommended detail is too great to provide a meaningful
evaluation;" Page 26 GAO/NSIAD-99-
100 Real Property Management B-280230 2. DOD should consult with
the Congress on the most feasible method by which to restrict the
use of RPM funds for non-RPM purposes, stating that commanders
need the maximum flexibility possible; and 3. DOD should mandate
training standards (curriculum and hours) for all those involved
in RPM assessments, stating that it is not certain such training
is needed and is unwilling, without further study, to commit
resources to it. We continue to believe that requiring standard
cost accounting methods to track how much each service is spending
on RPM and by what type of facility will help DOD provide
oversight responsibility. Also, we believe that meaningful
evaluation of the comparative costs of maintaining the same types
of facilities across services (e.g., barracks, classrooms, and
administrative space) requires the kind of detail provided in the
Army's Directorate of Public Works annual reports. The same data
are required for major commands to be able to compare expenditures
of their bases. With current databases and budget data, it is not
possible to readily compare RPM spending per square foot for like
facilities across the services. OSD's new facility category code
system, which includes industry cost standards, will have no clear
purpose unless these costs-which are per square foot- can be
compared to what military installations spend. The Army's
databases permit such comparisons and are on-line; these should be
used as the model for the other services. We note that many
officials told us migration of funds out of RPM for other purposes
routinely disrupts rational planning and contracting. Therefore,
while we appreciate the need for flexibility, we continue to
believe that fund migration is an issue for DOD to address. As
the National Research Council notes, "Spending below targets set
for normal maintenance . . . may substantially increase costs of
repair, replacement, and loss of use, costs that might have been
avoided."39 It would appear, therefore, that better management of
fund migration could prove cost-effective in both the short and
long term. We have modified our recommendation to suggest that
DOD consider the feasibility of adopting the promising practices
identified in this report and seek legislative changes, if needed.
Concerning the need for DOD to mandate standard training for
personnel conducting RPM assessments, we note that common training
will help 39Quoted in DOD Facilities Cost Factors Handbook,
Version 1.0, April 1999, p. 3. Page 27
GAO/NSIAD-99-100 Real Property Management B-280230 ensure
consistency in the assessment of facility conditions and RPM
needs. The Navy noted in its technical comments that its guidance
on RPM inspector qualifications "addresses such things as
technical trade background, formal education in theory, experience
in maintenance and repair operations, and skills in inspection
techniques, planning and estimating, maintenance standards, and
building codes." This guidance could well serve as the model for
a DOD-wide standard for all facility inspectors. DOD's comments
and our evaluation can be found in appendix XI. We conducted our
review from May 1997 to March 1999 in accordance with generally
accepted government auditing standards. We are sending copies of
this report to the Honorable William S. Cohen, Secretary of
Defense; the Honorable William J. Lynn III, Under Secretary of
Defense (Comptroller); the Honorable F. Whitten Peters, Secretary
of the Air Force; the Honorable Louis Caldera, Secretary of the
Army; the Honorable Richard Danzig, Secretary of the Navy; General
James L. Jones, Commandant of the Marine Corps; the Honorable
Jacob J. Lew, Director, Office of Management and Budget; and
interested congressional committees and members. We will also
make copies available to others upon request. Please contact me at
(202) 512-3092 if you or your staff have any questions concerning
this report. GAO contacts and staff acknowledgments are listed in
appendix XII. Kwai-Cheung Chan Director, Special Studies and
Evaluations Page 28 GAO/NSIAD-99-100
Real Property Management Page 29 GAO/NSIAD-99-100 Real
Property Management Contents Letter
1 Appendix I
36 Army Strategy, Background 36 Methods, and Criteria
Army RPM Funding Strategy
37 Army Systems to Determine RPM Needs
38 for Determining Real ISR System
39 Property Maintenance Facility Inspections
42 Requirements ISR Ratings
42 Review and Validation Process
46 Resource Allocation
51 Bases Visited
54 Appendix II
56 Air Force Strategy, Background 56 Methods and Criteria
Air Force RPM Funding Strategy
58 FIM Assessment System
59 for Determining Real Allocation of RPM Resources
70 Property Maintenance Bases Visited
72 Requirements Appendix III
74 Navy Strategy, Background 74 Methods, and Criteria
Navy RPM Funding Strategy
75 Methods and Criteria to Determine Maintenance Needs
76 for Determining Real Validation of Inspection Results
81 Property Maintenance Allocation of RPM Resources
83 Requirements Bases Visited
86 Page 30 GAO/NSIAD-99-100 Real
Property Management Contents Appendix IV
88 Marine Corps' Strategy, Background 88 Methods, and Criteria
RPM Funding Strategy
88 RPM Assessment System
89 for Determining Real CORRS: A New System
89 Property Maintenance Survey 93 Requirements
RPM Needs Exceed Requests Fivefold
93 Bases Visited
93 Appendix V
95 Summary Comparison of Service Methods and Criteria Appendix VI
96 Criteria for Allocation of Funds Appendix VII
99 Percent of Value Measures for Estimating RPM Requirements
Appendix VIII
106 Promising Practices in Sources of Expertise on Promising
Practices 106 Facilities
Management Criteria Used to Select Entities for Interviews
107 Experts and Expert Organizations Consulted
107 Entities Contacted for Information on Management Practices 108
Fragmented Knowledge Base of Promising Practices
109 Federal Facilities Council's Promising Practices
110 Life-Cycle Principles of Facility Management
111 Preventive Maintenance and Life-Cycle Management 113 Summary:
Identified Promising Practices
118 Page 31 GAO/NSIAD-99-100 Real
Property Management Contents Appendix IX
119 Objectives, Scope, and Scope of the Study
119 Methodology Methodology 119 Appendix X
127 Our Survey on Real Property Maintenance for Installations
Appendix XI
136 Comments From the Department of Defense Appendix XII
149 GAO Contacts and Staff Acknowledgments Bibliography
150 Related GAO Products
160 Tables Table 1: Weaknesses in Services'
Condition Assessment Systems 10 Table 2: Percent of
Bases Using Listed Methods to Ensure Condition Assessments Are
Consistent 12 Table
3: Percent of Bases Identifying Training and Resource Constraints
13 Table I.1: Steps to Ensure Assessments Are Valid
47 Table I.2: Steps to Ensure Assessments Are Consistent
47 Table I.3: Army Installation Views on Constraints
49 Table I.4: How Army Bases Would Change Methods
50 Table I.5: Fiscal Year 1997 Requirements Versus Funding
Requested 52 Table I.6: Army Bases' Views on ISR
Weaknesses 53 Page 32
GAO/NSIAD-99-100 Real Property Management Contents Table I.7:
How Army Bases Would Change the Funding Allocation Process 54
Table II.1: Air Force FIM Spending Plans Versus Needs Fiscal
Years 1998-2005 58 Table II.2: Fiscal Year 1998 Air Force FIM
Project Ratings and Cost 60 Table II.3: Steps to Ensure
FIM Project Ratings Are Valid 66 Table II.4:
Steps to Ensure Consistency 67
Table II.5: Factors That Constrain Assessment Quality
67 Table II.6: How Bases Would Change Determining RPM
Requirements 68 Table II.7: Additional Assessment Tools That
Supplement FIM 68 Table II.8: Top Five Frequently
Cited Weaknesses 71 Table II.9: How
Bases Would Change Funding Allocations 72
Table III.1: Type and Frequency of Inspection 80 Table III.2:
Steps to Ensure Inspections Are Valid 82
Table III.3: Steps to Ensure Consistency
82 Table III.4: Factors That Constrain the Quality of Assessments
83 Table III.5: Top Weaknesses in RPM System
85 Table III.6: Bases' Choices to Proposed Changes in Allocation
Process 86 Table IV.1: Dimensions and Ratings in CORRS
91 Table IV.2: How Installations Would Change Methods to
Determine Requirements 93 Table V.1: Basic Characteristics of
Services' Condition Assessment Systems 95 Table VI.1: Ranking of
Factors Affecting Allocation of Funds, by Service
96 Table IX.1: Responses to GAO Questionnaires 121 Figures
Figure 1: Bases' Ratings of Importance of Criteria in Worst-Level
Ratings 9 Figure VIII.1: Life-Cycle Model for a Single Building
112 Figure VIII.2: Effect of Adequate and Timely Maintenance and
Repairs on the Service Life of a Building
114 Page 33 GAO/NSIAD-99-100 Real
Property Management Contents Abbreviations AIS Annual
Inspection Summary ANG Air National Guard ASIP Army
Stationing and Installation Plan BASEREP Shore Base Readiness
Report BCE base civil engineer CAS Condition
Assessment Survey CEAC Cost and Economic Analysis Center
CFA Commander's Facility Assessment CNA Capital
Needs Assessment CNET Chief, Naval Education and Training
CPV current plan value DOD Department of Defense
FCG facility category group FDM facilities
degradation module FII facility investment index FIM
facility investment metric FOMA facility operation and
maintenance activities HFPA Health Facility Planning Agency
ISR Installation Status Report LLNL Lawrence
Livermore National Labortory LMI Logistics Management
Institute MARM Mission Area Rating Matrix NASA
National Aeronautics and Space Administration NAVFAC Naval
Facilities Engineering Command NRC National Research
Council O&M operation and maintenance OSD Office
of the Secretary of Defense PCMS Projects by Contract
Management System PM preventive maintenance PML
preventive maintenance level PRV plant replacement value
PWC Public Works Center QDR Quadrennial Defense
Review RDT&E research, development, test, and evaluation
RPLANS Real Property Planning and Analysis System RPM real
property maintenance USAF U.S. Air Force USMC U.S.
Marine Corps Page 34 GAO/NSIAD-
99-100 Real Property Management Page 35 GAO/NSIAD-99-100 Real
Property Management Appendix I Army Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
Appendix I In this appendix we discuss the Army's strategy,
methods and criteria for determining its real property maintenance
(RPM) requirements and for allocating resources to those needs.
We also include the responses to our questionnaire on RPM-related
issues that we sent to Army bases.1 In particular, we examine a
key part of the Army's system for evaluating infrastructure
conditions and estimating costs for facility sustainment and
improvement, the Installation Status Report (ISR), Part I--
Infrastructure. (A Part II--Environment--addresses compliance with
environmental rules and regulations and was outside the scope of
this report. Part III, under development, addresses performance
standards.) For brevity, we refer henceforth to part I as the
"ISR." Background The Army owns and manages a very large
amount of real property at about 1,900 installations and sites
worldwide (including active, Reserve, and National Guard-related
sites), on 14.1 million acres of land. This property is managed
by over 200 parent installations in 15 major commands.2 As of
September 30, 1997, the real property at these locations consisted
of 178,256 buildings (including 53,999 family housing buildings),
with 1.039 billion square feet and an average age of 40 years.
The Army's infrastructure also includes 3,016 miles of railroads,
965 vehicular bridges, 623 central heating plants, and 77,114
miles of surfaced areas (such as roads). The Army estimates its
plant replacement value (PRV) at about $212 billion.3 (We did not
verify the accuracy of the Army's inventory report, or its PRV
estimate. However, in 1998, we reported that, with regard to all
of DOD's property, plant and equipment, DOD's Inspector General
stated that control procedures over assets were inadequate and
cause inaccurate reporting of real property, capital leases,
construction in progress, inventory, and preparation of
footnotes.)4 Army RPM is funded by several sources. The Army's
operation and maintenance (O&M) account is the largest funding
source, representing about 55 percent of the total real property
maintenance activity costs in 1The survey, which asked about
bases' facility inventory, RPM processes and funding, was sent to
180 Army bases; 149 returned the questionnaires, or 83 percent.
See app. X for a copy of the survey. 2Parent installations have
responsibility for managing and supporting several
subinstallations. 3Army Directorate of Public Works, Annual
Summary of Operations, Fiscal Year 1997, vol. I, p. 2-13. The
Army defines PRV as the cost of replacing current facilities with
state-of-the-art facilities. Ibid., p. 1-3. 4See Deferred
Maintenance Reporting: Challenges to Implementation (GAO/AIMD-98-
42, Jan. 30, 1998, p. 32). Page 36
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements fiscal year 1997. The remainder is funded
through other sources, such as the Army's Defense Health Program,
Military Family Housing, and Army Working Capital Fund. The
Army's fiscal year 1999 O&M RPM appropriation was $1.446 billion
(active, Reserves and National Guard). Currently, the Army
estimates that it would cost $14.8 billion to improve all O&M RPM-
funded facilities from their current levels to the "C-1" (i.e.,
best level) in the Army's condition assessment report, the ISR.5
Army RPM Funding The Army defines its RPM requirement as the
amount needed "for the Strategy minimum annual
sustainment of facilities" to maintain them "at existing levels
plus the cost of renovations that are not new construction."
Estimates are adjusted annually for inflation. For fiscal year
1999, the Army's RPM appropriation was $1.446 billion, or 64
percent of the $2.26 billion estimated as its requirement to
sustain facilities, according to the Office of the Assistant Chief
of Staff for Installations Management (ACSIM), the office
responsible for the Army's infrastructure.6 However, the Army
currently plans to increase O&M RPM funding over the next 6 years
to about 84 percent of its RPM sustainment requirement, which is
expected to increase to about $2.7 billion. As a result, annual
O&M RPM funding would increase 53 percent (in nominal terms) from
$1.446 billion in fiscal year 1999 to $2.21 billion in fiscal year
2005, if the Department of the Army provides the funds. However,
these plans appear uncertain, as the Army reduced the goal from 91
percent in March 1999 to 84 percent in August 1999. The Army's RPM
sustainment requirement is only a fraction of the amount required
to fix all identified repair needs, as of fiscal year 1997, that
Army bases reported in responses to our survey. Army bases
reported to us that they had $12.4 billion in outstanding repair
needs, compared with the estimated Army-wide sustainment
requirement of about $2.26 billion, or less than one-fifth that
amount.7 The responses were from 83 percent of 5This amount is
different than backlog of maintenance and repair, which is the
estimated cost to fix all identified repairs, regardless of
urgency or mission relevance. The Army no longer reports this as
backlog, rather, it cites the ISR-generated estimate. 6Figures
cited are for all Army components-active, Reserve, and National
Guard. 7The $2.26 billion was calculated by taking the Army's
statement that $1.446 billion in fiscal year 1999 RPM funding
represented meeting 64 percent of its RPM requirement. One
hundred percent would be $2.26 billion. Page 37
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements the Army bases to which we sent
questionnaires, suggesting that additional needs were not
reported, given 17 percent nonrespondents. Therefore, while the
Army plans to significantly increase its RPM funding, the 53-
percent increase by 2005 does not appear to come near to fully
funding currently identified repair needs. The Army states that
because it has other priorities, it chooses to accept a risk of
deterioration in some facilities in order to fund these other
priorities. In addition, the Army's ACSIM stated that it would
cost $14.8 billion to bring all O&M RPM-funded facilities from the
current ISR levels, ranging from C-4 to C-2, up to the highest (C-
1). (The ISR software estimates costs for going from one C-level
to a higher C-level.) The ISR estimate is not the same as
backlog; these are different ways to estimate RPM needs. The Army
used the $14.8 billion as the basis for competing for "unfinanced
requirements" in fiscal year 1999, requesting one-tenth that
amount ($1.48 billion) from the Office of the Secretary of
Defense, if extra monies became available. However, the Army
stated that OSD reduced the requested amount by first cutting it
to the estimated cost of bringing facilities up to the C-2 level
(versus C-1), which was $7.12 billion, and spreading that over 40
years. As a result, the Army's "request" for unfunded
requirements was reduced from $1.48 billion to $178 million. Army
Systems to The Army uses a number of computerized
databases to determine its RPM Determine RPM Needs needs and
allocate resources to them. These have been referred to as the
Infrastructure Decision Architecture (IDA). This architecture
assists "in management and funding decisions and enables
leadership to implement non-incremental, comprehensive decisions
on Army infrastructure management issues."8 The IDA databases and
related decision support systems include: * An on-line
computerized database of the total inventory of real property,
called the Integrated Facilities System. * The Real Property
Planning and Analysis System (RPLANS), a decision support system
that provides a 7-year estimate of needed space at installations,
based on predetermined space allowances for each type of Army
facility. RPLANs calculate how much excess (or deficit) space an
8Army contractor paper for FDM, p. 1. According to the Army, the
term IDA is not currently widely used, but that no other term has
replaced it to describe the "broad conceptual framework" of
databases and decision support systems that make up the IDA. Page
38 GAO/NSIAD-99-100
Real Property Management Appendix I Army Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
installation has or will have by comparing existing and projected
space to the permitted amount. * The Army Stationing and
Installation Plan (ASIP), which defines and projects installation
population, also over a 7-year period, based upon Army force
structure databases. * The facilities degradation module (FDM), a
computerized database that predicts the life-cycle condition of
facilities over specified time periods, given different funding
levels for maintenance, based in part on data from 80,000 Army
facilities. * The ISR, a facilities rating database that includes
software that generates condition ratings and estimated cost of
repairs of facility categories. * The Headquarters Executive
Information System (HQEIS), an on-line decision support tool that
allows users to access a variety of institutional data sources and
to view it at multiple levels (Army headquarters, major commands,
bases, etc.). Data that are on-line include the Headquarters ISR
(summary data), Integrated Facilities System, and the Army
Stationing and Installation Plan.9 The Army emphasizes that it
manages property, including maintenance and repair, by using all
of these systems. The ISR was the central focus of our analysis
because the Army uses it to assess the condition of its facilities
and its data can be used to predict the consequences of funding at
levels below (or above) those required to maintain facilities in
their current state. ISR System Implementation of part I of
the ISR began in 1995. It assesses the physical condition of
certain facilities or facility category groups (FCG) using the
same standards. The objectives of the ISR are to: 1. assess and
report the current condition of Army facilities and nonbuilding
infrastructure (such as roads), measured in terms of quality and
quantity; 2. provide Army-wide indicators on such things as
conditions, trends, facility shortfalls, and deviations from
standards; 9We did not verify the reliability of the data in the
various Army databases. Access to the HQEIS data requires a
password. Page 39
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements 3. assist in allocating resources and
prioritizing infrastructure programs; 4. provide information for
determining changes in Army policy or needs for new policies; and
5. provide information for use in stationing and force structure
decisions. The majority of Army installations are required to
complete the ISR. (In general, only installations scheduled for
closure under the Base Realignment and Closure program or coded as
"Lay Away" are exempt.) However, government-owned, contractor-
operated installations have not conducted ISR assessments,
contrary to ISR instructions. Management of ISR System The
ACSIM is responsible for overall ISR policies, standards, and
procedures. Army headquarters develops facility standards and
issues guidance to meet Army-wide infrastructure goals and
objectives. Army major commands are responsible for program
management and administration. Each command is to ensure that the
ISR is implemented at the installations it controls and that the
bases comply with ISR requirements. Each installation commander
is responsible for completing the ISR as required, certifying the
results, and forwarding it to the major commands. Parent
installations are responsible for ISR assessments at their
subinstallations. ISR Structure To achieve the
objectives of the ISR, Army installations annually evaluate the
quality (physical condition) and quantity of real property and
enter the results into a database. These data, along with data
from the other Army databases, are used to generate overall
ratings for each base, including the extent to which facilities
meet unit needs, Army standards, and mission requirements. The
ISR system includes software that estimates the costs to improve
facilities from the level they are rated at in the ISR up to any
higher level-such as from C-4 to C-3, or C-4 to C-1. ISR results
are generated for four infrastructure levels: * 5 broad top-level
areas (mission, mobility, housing, community, and installation
support); * 28 categories; * 60 subcategories; and * 219 facility
category groups. Page 40
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements In some categories, there is no FCG lower
than the subcategory; this is the case for unaccompanied personnel
housing (i.e., barracks.) The installations evaluate facilities
by FCG and these ratings form the basis for all
ratings/calculations rolled-up in the ISR software to subcategory,
category, and area levels. ISR Assessment Criteria The ISR
established common Army-wide standards for assessing facility
quality. Criteria for quality evaluations are contained in
separate standards booklets for most of the 60 ISR subcategories
(e.g. operations buildings, small arms ranges, maintenance
facilities, and barracks). Facility groups are rated in terms of
green, amber, or red: * red indicates dysfunctional or
substandard, "overall poor condition"; * amber indicates that the
facility "does not fully meet standards," but is in "overall fair
condition"; and * green indicates that it "complies with
standards" and is in "overall good condition." These color levels
are further defined in considerable detail in ISR standards
booklets with narrative statements that characterize the area
being assessed and, in most cases, pictures that illustrate the
general condition for each rating level. For example, four
criteria are spelled out for each of the 3 color levels for the
lobby of an administrative facility; there are eight criteria for
a green rating for building exteriors. Criteria are written in
layman's terms, such as "building walls, windows and doors in
sound condition"; "entry in good repair"; "inadequate exterior
signage." According to the Army, the ISR "articulates facility
conditions and RPM requirements through an affordable and
understandable process." "It provides data showing possible
problem areas and trends, which at HQDA [Headquarters, Department
of the Army] level, influence development of facility investment
programs."10 Only permanent and semi-permanent assets identified
in the ISR database are to be assessed. Temporary structures are
generally not rated because they are not considered long-term
solutions to facility requirements. Certain other facilities at
installations using he ISR also are not required to be rated. For
example, World War II wooden structures, even if in use, do 10Army
technical comments on the draft of this report. Letter Page
41 GAO/NSIAD-99-100 Real
Property Management Appendix I Army Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
not have to be rated under ISR because they are expected to be
demolished. Facility Inspections Under the ISR system,
inspections can be done by anyone designated to do the ratings,
including engineers, contractors, and building users (occupants).
The installation's ISR coordinator identifies which offices are
responsible for base facilities within the ISR categories and each
unit designates who will inspect what facilities. According to
ISR instructions, the inspectors should be the primary users of
the facility and knowledgeable of the facilities' condition and
uses. For example, the base facilities maintenance staff
(engineers or other skilled craftsmen from public works or the
engineering offices) should rate all base utilities and other
facilities managed by this office. Having building users do the
inspections is intentional, according to headquarters staff, as
this is more likely in the Army's view to ensure that those most
familiar with a facility's condition over time are doing the
rating. Among the 149 Army installations that responded to our
questionnaire, 82 percent of inspectors were described as building
users. Inspector Training Each inspector should receive a
short training session on the facility inspection process.
Headquarters level training is provided for the installation ISR
team/coordinator. These staff can then train unit inspectors at
the base. This training generally includes a briefing (about 2
hours), a video, and a self-teaching computer-based training
package. According to some facilities management personnel, it is
challenging to get all inspectors to attend training and the
preponderance of building-user inspectors change annually. ISR
Ratings The ISR requires inspectors to rate the
physical condition of facilities against Army-wide
standards/criteria for that type facility. For example, the ISR
Standards Booklet 5 contains rating criteria for maintenance
facilities that apply to 14 FCGs, including aircraft maintenance
facilities, vehicle maintenance shops, and depot ammunition
maintenance shops. Inspectors are to use the appropriate standards
booklet to evaluate facilities and record the results on an
inspection worksheet. In some instances, if a required "critical"
component, such as a restroom, is not in the facility, the item is
rated red automatically. Similarly, a barracks cannot Page 42
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements be rated above red if it has a common
latrine. The overall facility rating cannot exceed that of the
worst critical component. A separate inspection and rating is to
be prepared for each purpose/FCG in the same building; these are
not averaged to produce one rating for the facility. Therefore,
if a building/facility were multipurpose, there would not be a
building-specific rating. Separate color ratings for each FCG are
to be entered into the ISR database. However, at one of the Army
sites we visited, one unit did not complete separate ratings for
each FCG within a building. The unit inspector said that if the
building housed more than one FCG, the user who occupied the
largest part of the facility also included the other area in his
rating (in other words, there was a "building" inspection). When
there are a number of similar facilities for the same FCG, a
representative sample may be taken if the number is large enough
and the facilities are of the same design. The color ratings of
the sample are to be proportionately entered into the ISR database
to generate an overall C-rating for the FCG. For example, in
fiscal year 1996, one base we visited inspected about 5 percent of
family housing units (139 out of 2,924) because these were all
from the same FCG. As we observed during our site visits, most
base ISR files contained the Summary Mission facilities
worksheets, and, in some cases, supporting documentation (the
pertinent standards booklets with checkmarks of each related
element indicating the reason(s) for the inspection rating
results). At one base, many files also contained a copy of the
engineering report on the building's structural condition (e.g.,
walls, window, mechanical, electrical, and fire alarm). Once the
inspection worksheets are completed, they are returned to the
installation ISR coordinator. Based on discussions during our
site visits, the ISR coordinating office generally reviews
selected worksheets to ensure they accurately reflect the
conditions of the facilities. The reviewers focus on any
significant changes or apply their expertise or personal knowledge
of the facilities. Some subsequent checks are made. However,
because of limited resources, facilities' staff told us that it is
not possible to check them all. The ISR coordinating office and
the public works directorate then check if there are any
disconnects with the inspection results and work orders. Page 43
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Software Generated Quality The ISR
software calculates separate quality and quantity ratings (C-1,
the and Quantity Ratings highest, to C-4, the
lowest), and then an overall C-rating (the lower of the two
ratings) using installation ratings and information from existing
Army databases. A C-1 rating indicates that an infrastructure
group requires little immediate attention; a C-4 rating highlights
a significant problem area for the installation. C-ratings are
calculated for all four infrastructure levels, beginning with the
FCG. The C-ratings for the three higher levels are an aggregation
of all the lower level ratings. For example, the "area" C-ratings
result from the aggregation of FCG, subcategory, and category
ratings that comprise the area. However, the base commander can
adjust the overall area C-ratings (raise or lower) with a written
justification. No C-rating overwrites are allowed below the area
level. The method of calculating quality C-ratings and area and
category level C-ratings changed for the 1998 ISR cycle. Rather
than using the percentage of inventory rated green, amber, or red,
it is now based on a numerical (weighted) value assigned to each
color rating. Area and category level C-ratings are now a
weighted average of the lower level ratings rather than a
nonweighted average. This change is intended to correct having a
small, less important FCG counting the same as a large important
group. The C-ratings from previous years will be normalized to
reflect the changes. The quality C-ratings are generated by
comparing the facility condition ratings for each FCG to space
allowances specified in the Headquarters Real Property Planning
and Analysis System. The color ratings are first linked to system
data on the number of facilities in a given FCG and the ISR
software calculates the amount that is green, amber, and red.
Next, quality points are awarded based on the amount of inventory
rated green, amber, and red. For example, facilities rated green
are given three quality points; amber and red get two and one
quality point(s), respectively. The total points are summed and
the C-rating is awarded. The cut-off values for ratings are * C-1
equals 90 percent or greater, * C-2 equals 75 percent or greater,
* C-3 equals 60 percent or greater, and * C-4 less than 60
percent. The quantity C-ratings are calculated by the ISR
software, which compares reported space to installation mission
requirements. The inventory data Page 44
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements are obtained from the Integrated
Facilities System.11 The quantity C-ratings-based on a percentage
requirement satisfied by either permanent or semi-permanent-are
defined as follows: * C-1-95 percent or more of required
facilities are available and meet the unit's needs and Army
standards. There are very minor, if any, functional deficiencies.
Infrastructure fully supports mission performance. * C-2-80
percent or more of required facilities are available and meet the
unit's needs and Army standards, but there are some minor
functional deficiencies. Infrastructure supports the majority of
assigned missions. * C-3-60 percent or more of required facilities
are available and meet the majority of the unit's needs and Army
standards. However, there are some functional deficiencies and
mission performance is impaired. * C-4-less than 60 percent of
required facilities on hand do not meet needs or Army standards
and significantly impair mission performance. * C-5-an
installation is undergoing major reorganization, inactivated, or
closure. Software-Generated Cost The C-ratings are then linked
to ISR cost factors to calculate the cost of Estimates
new construction requirements, renovation, and annual sustainment
(maintaining permanent/semi-permanent facilities as well as
temporary facilities at current condition). All cost factors are
at the FCG level of detail. Cost factors for new construction are
expressed as dollars per unit of measure for each FCG (e.g., for
FCG F7218P-enlisted barracks, trainee, there is a designated
dollar cost per sleeping space). Local cost factors are built
into the software to reflect geographic differences. The Army
Cost and Economic Analysis Center (CEAC) develops the cost factors
to estimate the costs for installation infrastructure sustainment
and improvement. ISR Reporting The ISR is a
computerized system. Its rating results and inventory are
transferred by disk from individual bases to their major commands
and then to a central computer maintained by the Department of the
Army and available to ACSIM staff and other authorized users.
11The ISR does not include the condition rating for each Army
building/facility listed in the Integrated Facilities System
database. The system uses a five-level rating scale (A=
serviceable/excellent, B=serviceable/fair, C=serviceable/poor,
I=functionally inadequate, and N= physically not serviceable) for
each item. Page 45
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements The installation commander submits the
ISR report to the major command with a cover memorandum containing
the commander's narrative statement prioritizing five broad
infrastructure areas (1) mission facilities, (2) mobility
facilities, (3) housing, (4) community facilities, and (5)
installation support-and highlighting mission impacts due to
infrastructure deficiencies. Each major command aggregates data
from its installations, prepares a written assessment of the
status of its installations, and submits the reports to Army
headquarters. Other reports include the category/subcategory
report, the assets/requirement report, the renovation/new
construction cost report, and the sustainment cost report. The
facility quality condition report, used at the installation level,
lists the ratings from inspection worksheets for each
permanent/semi-permanent asset at the installation. It includes
the facility number, FCG, size of asset, color rating, and unit
identification code. Other reports can be generated from the ISR
software such as appropriations reports. Once the ratings have
been reviewed and approved at the headquarters level, the results
for every rated installation are available on-line to authorized
users.12 This makes it possible to compare installations
worldwide across various outcome and cost measures, both by
command and by base, and by type of mission. ISR data can be
viewed in many ways. For example, it can provide information on
how many sleeping spaces in barracks are rated at what level,
either at an individual installation, across all bases within a
command, or across the entire Army. Review and Validation At the
installations we visited, we were told that the ISR coordinating
office Process generally reviews
selected worksheets to ensure they accurately reflect the
conditions of the facilities, based on their personal knowledge of
the facilities, including work that may have been done during the
year. Some subsequent checks are made. However, facilities staff
at bases we visited stated that because of limited resources, it
is not possible for them to check all the facilities. Responses
from Army installations to our survey reflected what we were told
in field visits, with most bases stating that the primary
validation 12According to the Army Installation Support Center,
any Army employee in facilities management is assigned a password
for access to the ISR results that are kept on-line upon request.
Page 46 GAO/NSIAD-99-100
Real Property Management Appendix I Army Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
method was review of selected worksheets by facility management
staff, based on the staff knowledge of facilities. Table I.1
summarizes the bases' responses. Table I.1: Steps to Ensure
Assessments Are Valid Step taken to ensure validity
Percent citing step Selected worksheets are reviewed by facility
management 65 office staff Rely
on expertise of assessor; no formal procedures used
24 Facility staff makes follow-up visits to verify reported
problems 20 on a sample of selected rating
worksheets Other validation methods.
18 Outside contractors are used to validate facility ratings.
5 Source: Responses to question 9, GAO survey. Ensuring
Consistency of We also asked installations how they ensured
that the consistency of Assessments facility
condition assessments given by one rater would be, on average, the
same reported by other raters. Most respondents said they had no
formal procedures or mechanisms other than the expertise and/or
training of their staff who do the ratings. Table I.2 shows the
responses. Table I.2: Steps to Ensure Assessments Are Consistent
Steps taken to ensure consistency
Percent citing step No formal procedures other than expertise
and/or training of 56 the assessors
Other method to ensure consistency
26 A random sample of facilities is reinspected by different
23 assessors from our base to determine whether the second set of
ratings is similar to the first A set number of percentage of
facilities are reinspected by 4
different assessors from our base to determine if second set of
ratings were similar to the first Outside contractors are used to
validate facility ratings 2
Source: Responses to question 10, GAO survey. Page 47
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements As the table shows, the Army respondents
rely primarily on the expertise/training of its raters to ensure
assessments are consistent. Outside contractors are used
relatively infrequently. However, despite the detailed
instructions and worksheets, during our site visits we found a
lack of consistency in assessments. Some inspectors were very
conscientious about using the standards booklets whereas others
did not use them at all. Consistency and accuracy in ratings were
a prominently cited concern in an Army analysis of the 1994 field
testing of the ISR, as was a related concern about adequate
personnel understanding of ISR "standards and processes" in a
September 1998 After Action Report.13 At the installations we
visited, the inspectors used several different approaches to
complete their ISR ratings. Based on a comparison of several
ratings to the appropriate standards booklets and our observations
of actual facility conditions, we found there were some cases
where individual building areas could have been rated differently
or worksheets were incorrectly summarized and the overall quality
rating should have been different (in some cases higher, in some,
lower). We also found that some Army units believe that they do
not have the resources to adhere to all ISR instructions (such as
having enough facility inspectors). In one case, according to
base officials, staff from the base assigned amber ratings to all
the facilities at various subinstallations. They said that this
was done without inspecting the buildings and with no input from
building users, because there were not enough resources (staff,
time, or money) to comply with ISR instructions. Based on our
inspection of building conditions at one of these sub-
installations, the amber ratings did not reflect the actual, more
deteriorated condition of some buildings. At another installation,
we were told that some ratings were questioned because the
facility was rated green; yet, there were several high-cost repair
projects scheduled for the building. Based on our observations,
the exterior of this facility was in extreme disrepair, having
crumbling concrete walls, cracks, and leaking windows. 13Army,
"ISR Test After Action Review," June 8, 1994, pp. 5 and 7, and
September 2, 1998, p. 1. Page 48
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Army Installations We asked
installations to cite any or all of four factors that might
constrain Comments on the ISR the quality of facility
condition assessments at their bases. Regarding the overall
quality of the ISR process, 72 percent of the Army respondents
reported the primary factor affecting overall quality was the
shortage of resources-insufficient time and/or budget to carry out
assessments. (See table I.3.) Table I.3: Army Installation Views
on Constraints Percent that checked Constraining factor
factor as a constraint Shortage of personnel
61 Shortage of trained personnel with engineering or craft
48 backgrounds Shortage of resources (i.e., insufficient time
and/or budget to 72 carry out
assessments) Other
11 Does not apply-no factors create a significant constraint on
13 the quality of reviews of facility conditions Source: Responses
to question 11, GAO survey. It is readily apparent that a large
majority of Army installations reported a shortage of resources
and personnel as a constraining factor on the quality of condition
assessments. How to Improve We also asked facilities
management personnel at bases to choose what Assessment Methods
and they would change about the methods or criteria used to
determine real Criteria property maintenance
requirements. Page 49
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Table I.4: How Army Bases Would Change
Methods Percent choosing Change in method
proposed change Rate building/facilities primarily according to
engineering, 64 life-safety, and
health criteria, while decreasing the role of aesthetics Place
much more emphasis on long-range maintenance,
64 while de-emphasizing annual assessments of facilities Other
20 Source: Responses to question 13, GAO survey. These responses
show that 64 percent of Army respondents agree that the role of
appearance should be reduced in facility assessments and the same
percentage agree that "much more emphasis" should be placed on
long-range maintenance. At one base we visited, the facilities
staff said that because the deficiencies causing poor ratings are
not identified, the urgency of the repair work cannot be assessed.
They suggested that each red rating be accompanied by a work order
to fix the condition. They also suggested including a
standardized deficiency database as part of the ISR process to
better manage problems identified. In their view, such a system
would allow sorting by type of deficiency and priority, provide
trend data, and post correction of deficiencies. Other Systems
Used to In addition to the ISR, the Army National Guard
maintains a Project Determine Repair and Inventory Evaluation
Report for all guard units for use in preparing budget Maintenance
Needs submissions. Each state prepares a comprehensive
list of repair projects that includes data such as individual
project description, costs, installation name and location, and
status. The report is updated periodically and sent to the
National Guard Bureau annually. Yet another system is used to fund
RPM for Army government-owned, contractor-operated installations,
such as industrial plants that produce ammunition. In general,
these sites have contracts that govern what the contractor is
required to do, with maintenance included as part of the
operator's responsibility. Some survey government-owned,
contractor-operated respondents stated that they use some type of
assessment/inspection of facility conditions. Page 50
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Resource Allocation According to
ACSIM personnel, there is no direct link between the ISR
assessments and the allocation of resources. The emphasis of the
ISR, they said, is to take a "snapshot" of the condition of the
inventory; its software then estimates what it would cost to
improve facilities to C-1 or to intermediate levels, from the
rated level. In budget terms, the installations do not actually
request RPM funds. Instead, Army officials told us, the
Department of the Army decides how much "risk" to infrastructure
they are willing to tolerate, given other competing funding needs,
and this leads to an overall Army RPM spending total. This total
is then divided downwards, with each major command receiving a
"target" figure; in turn, each major command informs its component
bases how much each will receive in RPM funding. How Bases
Prioritize Certain bases we visited had formal systems to
review projects and Spending priorities or make
funding decisions. At one base, resources are allocated after
projects are prioritized by a project priority list determined by
their installation planning board. The panel includes members
from the major staff directorates and tenants (such as the school
house dean) and is chaired by the base commander. There are about
20 voting members and 20 nonvoting members. The board is
supported by working panels. Customer work requests are evaluated
using a local "project priority matrix." Projects are categorized
(medical, operations/training, housing, utilities, maintenance,
administrative, supply, and community support) and classified by
type of work--health/safety, force protection, mission/readiness,
infrastructure). The matrix "points" are then weighted according
to the seriousness of the problem to be corrected (complete
failure, component failure, failure is imminent, system
functional, or little deterioration). Work orders for repairs are
not linked to the ISR and can be prepared at any time. However, a
customer can reference the ISR results as a basis for the work
(which could help when prioritizing all base projects). Other
bases implied that there simply is too little money to focus on
prioritizing spending. Substantial funds are used to pay for
"must pay" items such as utilities. Finally, the major command
and base level commanders have the authority and can use RPM funds
for other needs. Page 51
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Maintenance Needs Versus We asked
installations to report the funding they requested for RPM and
Requested Funding the amount they would need to meet
all identified repairs. This unconstrained RPM requirement is how
much it would cost to fix all deficiencies previously identified
but not funded and is commonly referred to as backlog. These data
are no longer officially collected or reported by the Army to OSD
or to the Congress. Instead, the ISR software generates the
estimated cost to bring ISR-rated facilities to the C-1 condition
level (or any lower level above the rated one). At the Army bases
we visited, we found a general sense among facilities staff that
although they made a significant effort to identify deficiencies,
the subsequent funding was so low that it appeared their efforts
were meaningless. The large difference between total backlog
requirements and the funding actually requested by bases for RPM,
as reported on the surveys, is shown in table I.5. Table I.5:
Fiscal Year 1997 Requirements Versus Funding Requested Army bases'
unconstrained RPM requirements (total cost of fixing all
$12.4 billion identified deficiencies) RPM funding requested by
bases from major commands, fiscal year 1997 $1.96
billion Funding requested as a percent of unconstrained
requirement 15.8% Source: Responses to
question 15, GAO survey. As the table shows, Army bases reported
that they requested funding equal to only about one-sixth (15.8
percent) of their identified RPM needs. We were told by
facilities staff that these differences were due to the fact that
everyone knows the funding environment is low and that total needs
are not expected to be funded given the gap between available
funding and identified requirements. It is also the case,
however, that total repair and maintenance needs are not a
statement of priority, but rather what it would cost to fix all
known things that need fixing, regardless of importance to mission
or severity of defect. We asked installations to indicate which of
several factors they saw as weaknesses in their facility condition
assessment system. The results with regard to the top rated
items, in descending order of percent, are shown in table I.6.
Page 52 GAO/NSIAD-99-100
Real Property Management Appendix I Army Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
Table I.6: Army Bases' Views on ISR Weaknesses Percent that
checked Weakness
option Little or no linkage between condition assessment and
61 allocation of resources Ratings do not tell what is wrong
within facility or mission 53 category;
reasons not readily available Rollup oversimplifies conditions
51 Little or no linkage between condition assessment and budget
46 estimation Assessment process lacks robust engineering base
40 Focuses too much on facility appearance
38 Cost estimates are generally not accurate
36 Overall condition ratings are too broad
32 Source: Responses to question 12, GAO survey. The major ISR
weakness, according to Army base respondents, is that there is
little or no linkage between condition ratings and subsequent
resource allocations. A majority of respondents also reported
that the system does not reflect the reason(s) for the ratings and
that "rollup" ratings for a category with multiple facilities
oversimplify conditions. Installation Views on We also asked
installations about their views with regard to how they Proposed
Changes to would change the RPM funding allocation process.
Table I.7 shows the Allocation Processes percentage of
installations that cited any of four alternatives. Page 53
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Table I.7: How Army Bases Would Change
the Funding Allocation Process Suggested change
Percent checking option Funding should not be based on a fixed
increase above or 59 below the
previous year's level Funding should be based primarily on the
physical 53
deficiencies, with "needier" bases receiving more funds than those
in better condition Funding should be based on average age, total
square 45 footage and
number of facilities RPM funding/allocation should not be
centrally managed by 39 major
command. Source: Responses to question 22, GAO survey. Total
exceeds 100 percent because more than one choice could be made.
The top choice among Army respondents was that RPM funding should
not be based on a fixed increase above or below the previous
year's level. A majority of respondents also favored basing
funding on physical deficiencies, with more for "needier" bases.
Consequences at Base Level Personnel responsible for real property
maintenance at bases we visited were virtually unanimous in
pointing out that they could not adequately maintain their
facilities at the funding levels allocated to them in recent
years. For example, at one base, we were told that there is
simply not enough money to maintain all the required facilities.
The major command allocates a recurring base amount by activity;
officials said that resources were not adequate to provide the
amount needed to take care of requirements. At another base, the
real property maintenance budget level is "incremental"; i.e., it
receives a fixed increase above or below the previous year's
allocation. Bases Visited The following sites
were visited to ask facilities management officials at each about
how RPM requirements are determined, how funds are allocated, and
their views on the RPM process in their service. The
questionnaire was pretested at some, and subsequently validated at
others, as indicated. In addition, we visited Fort Bragg (Forces
Command), Fayetteville, North Carolina, and Fort Belvoir (Military
District of Washington), Alexandria, Virginia, to gain a better
understanding of the ISR and the Army's RPM processes from
personnel involved in RPM, as well as to see a diverse selection
of Army property and facilities. Page 54
GAO/NSIAD-99-100 Real Property Management Appendix I Army
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Sites visited to pretest questionnaires
Fort McPherson, (Forces Command), Atlanta, Georgia; Fort Hood,
(Forces Command), Killeen, Texas; Fort Sam Houston, (Medical
Command), San Antonio, Texas; U.S. Army Forces Command, Atlanta,
Georgia; and U.S. Army Medical Command, San Antonio, Texas. Sites
visited to validate survey responses Fort Sill (Training and
Doctrine Command), Lawton, Oklahoma; Texas Army National Guard,
Austin, Texas; and Rock Island Arsenal (Army Materiel Command),
Rock Island, Illinois. Page 55
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements
Appendix I I In this appendix, we discuss the Air Force's
strategy, methods and criteria for real property maintenance
(RPM), including the responses to the questionnaire on RPM-related
issues that we sent to Air Force bases and major commands.1 In
particular, we focus on the Air Force's Facility Investment Metric
(FIM) system that is used to rate the urgency of repair projects
funded from the operation and maintenance (O&M) RPM account.
Background As of fiscal year 1998, worldwide Air Force
installations had over 105,000 buildings totaling just over 650
million square feet. Approximately 51,500 of the buildings were
family housing units and were paid for from the military family
housing account, meaning O&M RPM funds paid for the repair and
maintenance of the other 54,000 buildings with 480 million square
feet.2 The O&M RPM-funded facilities had an estimated plant
replacement value (PRV)3 of $146.4 billion. The Air Force's Real
Property Maintenance Account Program/Programs and Analysis Branch
administers O&M RPM-funded facilities and serves as the advocate
for RPM funding within the Air Force. According to the Air Force,
RPM appropriations for fiscal year 1999 were $1.52 billion. Of
this total, $1.359 billion was for the active Air Force, $66
million for the Air Force Reserve and $95 million for the Air
National Guard. In the Air Force, O&M RPM funding consists of
spending for (1) preventive maintenance level repairs (PML) and
(2) repair and minor construction projects.4 To better determine
repair and minor construction needs, the service implemented the
Commander's Facility Assessment (CFA) in fiscal 1The survey, which
asked about base facility inventory, RPM processes and funding,
was sent to 202 Air Force bases (including Air Force reserve and
Air National Guard); 200 returned the questionnaires, or 99
percent. See app. X for a copy of the survey. 2Air Force data
provided to GAO. 3PRV is defined by the Office of the Secretary of
Defense (OSD) as "the cost to replace the current physical plant
(facilities and supporting infrastructures) using today's
construction cost (labor and materials) and standards
(methodologies and codes)." 4Preventive maintenance is defined as
the planned, periodic inspection, adjustment, and minor repair of
equipment and systems. It is "the minimum level of maintenance
required to sustain the day-to-day operation of the Air Force
facilities and infrastructure between periodic repairs and
replacement." (Air Force: FIM Executive Overview, p. 5.) Air
staff said that repair and minor construction projects are those
that the Air Force bases contract out for a number of reasons,
such as the size or dollar amount of the project. The service
also allocates funds to support the civil engineering workforce at
each base. This amount is based on historical amounts allocated
for this purpose and base size factors, such as square feet and
average age of the facility. Page 56
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements year 1993, which was then replaced in
1998 with FIM, which the Air Force views as a more objective
method to assess and present its RPM needs. CFA, used from fiscal
year 1993 to 1997, required bases to gather condition assessment
data on buildings and rank the impact of building conditions on
their missions. However, CFA had two major limitations, according
to the Air Force. The rating criteria were considered too
subjective and the method used to summarize data was problematic.
The Air Force felt that CFA criteria allowed commanders overly
wide interpretation of CFA ratings. CFA also grouped multiple
requirements into one level, which placed lower-impact
requirements in the same category as more critical requirements.
Air Force RPM officials stated that these limitations reduced the
credibility of the system with the Air Force senior leadership.
According to the Air Force, the FIM's purpose is "to put a mission
face on existing facility and infrastructure requirements in order
to advocate for funds at the Air Force Corporate Structure."5 The
FIM is used to rate only RPM O&M funded repair projects that are
not PML work. In contrast to the CFA, the Air Force states that
the FIM measures specific requirements (rather than rating an
entire facility or infrastructure system); has more objective
ratings; and provides feedback to leaders.6 According to the FIM
operational guide, it is intended to link RPM spending to the Air
Force's "investment philosophy: to address the most urgent
facility needs of the Air Force." The FIM guide appears to endorse
the need for a comprehensive strategy, stating that the Air Force
will use the data gathered under FIM "to develop a corporate
investment strategy, measure adherence to this strategy, and
ascertain the adequacy of long-term levels of investment to meet
facility requirements."7 Given that FIM had only been used for 1
year at the time of our review, it was not possible to determine
the extent to which it had met these goals. 5"Air Force Facility
Investment Metric: Implementation and Operations Guide," August
1997, p. 1. In this regard, it is very similar to the Army's
Installation Status Report, which was also implemented as part of
a strategy to advocate for RPM funding. The Air Force corporate
structure is, according to the Air Force, "the Secretariat and HQ
USAF leadership structure, to include the Air Force council,
Board, Panels, and integrated product teams." 6Air Force: FIM
Executive Overview, August 1997, p. 4. 7Air Force: FIM Executive
Overview, August 1997, p. 1. Page 57
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements Air Force RPM
Using the FIM infrastructure rating system, Air Force bases
identified Funding Strategy $355 million
in critical-rated projects for fiscal year 1998. However, the Air
Force funding plan provides no funding for FIM-rated repair
projects from fiscal year 1998 to fiscal year 2003, while funding
the PML portion of RPM at 1 percent of the PRV of each
installation. According to the Air Force Installations and
Logistics office, repair projects are zeroed out until fiscal year
2003 because "we must look at overall needs, and the need is
[weapons] modernization." The Air Force's December 1997 Annual
Planning and Programming Guidance states that bases should use the
FIM "to identify and accommodate RPM projects that satisfy the
most urgent needs of the Air Force." The Air Force estimates
that the planned FIM-based spending of $1.694 billion for fiscal
years 2003-2005 is 40 percent of the $4.22 billion total of FIM-
estimated needs for projects rated "critical" or "degraded." Table
II.1 shows the Air Force spending plan through fiscal year 2005
versus the estimated cost of projects rated critical or degraded
using FIM criteria. Table II.1: Air Force FIM Spending Plans
Versus Needs Fiscal Years 1998-2005 Dollars in millions Fiscal
year 1998 1999 2000
2001 2002 2003 2004 2005
Total FIM funding planned by Air Force 0 0
0 0 0 246 666 782
1,694 Need above funding level (for aa 1,700
800 800 800 120 0
4,220 critical/degraded projects) aNo estimate provided for these
2 years. However, critical and degraded FIM projects for fiscal
year 1998 alone totaled just over $4 billion (see table II.2).
Source: Air Force. Table II.1 shows that the estimated cost of FIM
critical and degraded level projects will increase until fiscal
year 2004, when resumed funding for FIM begins to reduce the
total. However, due to the zeroing-out until fiscal year 2003,
the total of backlogged repairs will be about $4.22 billion by
fiscal year 2005. Moreover, this funding is only for FIM projects
rated critical or degraded-excluding those rated "minimal," which
were estimated to cost $3.4 billion in fiscal year 1998 (see table
II.2). Using this funding strategy, therefore, the amount of
critical and "degraded' repairs increases, while "minimal" ones
remain unfunded. Page 58
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements An OSD official expressed skepticism
about the wisdom and realism of the Air Force RPM funding
strategy, noting that since the Air Force had only funded PML
repairs, emergency repairs remain unfunded. Therefore, in the
view of the OSD official, when emergencies occur, PML funds would
be used for them-providing even less for PML. This, in turn,
could increase the cost of repairs due to insufficient funds for
PML. FIM Assessment The Air Force's FIM requires active and
reserve bases to identify and System prioritize repair
and minor construction projects based on the impact that
deficiencies are having on the capability of units to carry out
missions of different types, in four broad categories. Under FIM,
repair projects (rather than individual buildings or facilities)
are rated as "critical," "degraded," or "minimal," referring to
the existing impact of conditions on mission, defined as follows:
* A critical rating indicates a significant loss of installation
mission capability and frequent mission interruptions; continuous
work-arounds are needed. * A degraded rating indicates a limited
loss of installation mission capability; work-arounds to prevent
mission disruption and degradation are often required. * A minimal
rating indicates marginal or no adverse impact to installation
mission capability; work-arounds are seldom needed. Impact ratings
are not further quantified, and, to some degree, reflect the
judgment of those doing the ratings. In contrast, the Marines use
similar categories for impact on mission, but define most with
specific quantified measures (e.g., critical impact is interfering
with a mission specified percent of the time, in a year). (See
app. IV.) FIM projects are funded from O&M and are for repair and
minor construction. They do not include military construction,
PML (day-to-day repair and maintenance), or funds from other
accounts, such as family housing. To determine FIM impact ratings,
engineers may consult with the facility users and/or other
engineering staff to determine how the project impacts the
installation's mission. For example, at Scott Air Force Base,
several civil engineering staff met and collectively determined
the ratings. The base civil engineer then approved them and
forwarded them to the base's major command. Page 59
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements Mission Categories The impact ratings
are used to rate the condition of four major mission categories-
primary mission, mission support, base support, and community
support-as follows: * Primary mission-facilities and
infrastructure that directly accomplish or indirectly support the
installation's primary mission. Examples include airfield
pavements, navigational aids, and missile alert facilities. *
Mission support-facilities that support the installation's primary
mission, some infrastructure, and primary emergency response
facilities that provide immediate life support and rescue service.
Examples include aircraft maintenance facilities, fire stations,
and the base communication center. * Base support-facilities and
some infrastructure that are not directly tied to the primary
mission, but are necessary to keep the installation functioning
properly (e.g., administrative facilities and chapels). *
Community support-facilities that support the installation, such
as lodging facilities and theaters. As noted, the FIM ranks
projects in terms of the impact that the deficiencies they are
intended to address are having on current mission readiness, as
well as their estimated cost. This is then rolled up into a
"Mission Area Rating Matrix" (MARM), which also includes the PRV
of RPM-funded facilities, and a facility investment index (FII)
for each mission area, critical projects, and critical and
degraded projects. (The FII is the estimated cost of FIM projects
divided by the PRV of the facilities in which they will be done.)
The FIM data for the estimated cost of projects from the MARM for
the entire Air Force for fiscal year 1998 is shown in table II.2.
Table II.2: Fiscal Year 1998 Air Force FIM Project Ratings and
Cost Dollars in millions FIM Rating Mission category
Critical Degraded Minimal Estimated total cost
Primary mission $178 $1,025
$544 $1,747 Mission support
134 1,459 1,120 2,713 Base
support 33 1,102
1,444 2,580 Community support
10 94 290 394 Total
$355 $3,681 $3,398 $7,434
Source: Headquarters, Air Staff, Office of the Civil Engineer.
Page 60 GAO/NSIAD-99-
100 Real Property Management Appendix II Air Force Strategy,
Methods and Criteria for Determining Real Property Maintenance
Requirements According to the FIM operational guide, "the Air
Staff must use the MARM to develop" its facility investment
strategy-that is, to prioritize repair projects based on the
criticality of the impact on mission.8 FIM Data On-line
The data from FIM are available on-line in summary form to the Air
Force Office of the Civil Engineer, Programs Divisions, permitting
rapid comparisons of the needs of different installations rated
under FIM. Unlike the Army's ISR (see app. I), the FIM on-line
data do not provide an overall condition rating for the base.
Instead, the FIM on-line data show the ratings for individual
repair projects (i.e., critical, degraded, or minimal) and the
estimated cost of these repairs. The system also shows the cost
of all FIM projects in a given mission area at an installation.
Moreover, the data can be easily "sliced and diced," permitting
comparison and analysis of the repair projects at any number of
chosen installations or major commands. This makes it comparable
to the way ISR data can be analyzed. Further, the data gathered by
FIM show a 7-year estimate of all the projects at an installation
identified with regard to their level of urgency, their estimated
cost, and the year in which the money will be spent on them. Since
the year assigned for doing a repair project is based in large
part on the base's estimate of its urgency-including when a
component or facility may fail-these timeline projections are a
form of life-cycle analysis. Repair urgency is also based on what
mission it affects and how important that mission is relative to
other missions. After a FIM rating of a given installation is
reviewed and approved by the Facility Board or equivalent, the
data that go into the FIM are inputted from the installation to
the FIM computerized system. The data are administered by Gunter
Air Station, Alabama, which maintains both the FIM and the Air
Force's RPM inventory data. The data are also simultaneously
"released" to the installation"s major command for review.
However, the data are not funneled through the major command.
Once sent to the on-line system, the data are also available to
the Programs and Analysis Branch. Major commands review the
ratings and can change them. Air Staff use the data to create an
Air Force-wide MARM that they present to Air Force leaders to
advocate for FIM funds. For fiscal year 1998, the FIM raters 8FIM
guide, August 1997, p. 5. Letter Page 61
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements estimated that FIM projects would cost
$7.4 billion, of which only 540 (2 percent of 27,000) were rated
as critical, estimated to cost $355 million, or about 5 percent of
total FIM-estimated repairs. Forty percent of the projects were
rated as "degraded," and 58 percent as minimal. According to
headquarters staff, the MARM can and should be used to prioritize
RPM spending, so that funds are expended on critical and degraded
categories. This, the staff told us, would also help reduce future
repair costs for catastrophic failure. Criterion to Determine
In addition to the rating and prioritizing of repair projects, the
Air Force Preventive Maintenance allocates funding for PML-a
component of RPM-at 1 percent of the Needs
estimated PRV of infrastructure at a base. According to Air Force
Civil Engineering staff, this level is adequate to satisfy PML
requirements, given the recommendation of the 1989 DOD
infrastructure study that recommended that the services annually
budget a minimum of 1.75 percent of PRV for maintenance and
repair, excluding any additional funds required to reduce existing
backlog.9 While this 1-percent method for allocation provides a
guaranteed minimum, it is based on a set percent of PRV rather
than on a determination of physical deficiencies. It is a
shorthand way of assuring a given funding minimum, which may
equal, exceed or fall below actual needs. (See app. VII for more
discussion.) Preventive Maintenance Although the Air staff
uses the same 1 percent of PRV to allocate to its May Not be Fully
Funded major commands, according to the Air Staff, the Air
Force does not require major commands or bases to spend that
allocated 1 percent of PRV for PML; commanders can use the funds
in other areas. An Air Mobility Command official told us that
they try to allocate one percent of PRV to PML, but that other
needs may have a higher priority. At Scott Air Force Base, a civil
engineer estimated they actually receive only about a half percent
of PRV for PML. Further, of the PML money, most is not used for
this purpose, but rather to replace and repair items that are
broken due to prior insufficient PML. For example, a 10-inch
water main, now a $1-million critical FIM project, is being
replaced because of inadequate PML. 9DOD, Renewing the Built
Environment, March 1989, p. 28. Page 62
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements A base civil engineer from the Alabama
National Guard said that they had replaced overhead doors that
would not have been needed if adequate PML had been done to
preserve the existing doors. When PML is not done, the work will
(eventually) show up as a FIM project and typically cost more than
the amount of PML needed, according to the Alabama official.
Another factor in Air Force RPM decision-making is the criterion
for repair versus replacement. The Air Force has a guideline that
requires reconsideration of a project when the estimated cost of
the project exceeds 70 percent of the PRV of a building.10 As in
the other services, this is a guideline. Installation Views on FIM
Some facilities management engineers at bases we visited expressed
the view that the FIM ratings may be too restrictive, citing the
fact that only 2 percent of the 27,000 Air Force-wide FIM projects
were rated critical for fiscal year 1998; these represented about
5 percent of the total estimated cost of repairs ($355 million of
$7.4 billion). However, headquarters Air Staff told us that the
Air Force intentionally made the ratings more restrictive than
under CFA and that FIM was to intended to reflect only the Air
Force's most urgent needs. In their view, CFA ratings were too
subjective, resulting in many facilities rated as critical. Some
base engineers told us that because FIM ratings were too
restrictive, few projects would get a critical rating and a chance
of being funded. For example, at one base that we visited, of the
total 103 projects, none were rated critical as of November 1997.
Civil engineering staff at another Air Force Base said that they
were concerned that few critical ratings might appear to make the
Air Force look in better shape than it was. At yet another base
we visited, 6 of 88 projects were rated critical and engineering
officials expressed concern that FIM would make their base look in
better shape that it was. They said that the FIM did not show
that 132 roofs were leaking and were concerned that the system
would not convey an accurate overall picture of conditions at the
base. Using the FIM rating system, although total estimated Air
Force repair backlog increased about 278 percent from fiscal year
1997 to fiscal 10Air Force Instruction 32-1032, 11 May 1994,
"Planning and Programming Real Property Maintenance Using
Appropriated Funds," p. 6. Page 63
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements year 1998 ($2.667 billion to $7.434
billion), only 5 percent in dollar value ($355 million) under FIM
was rated critical. Engineering officials at three bases we
visited said they were concerned the Air Force would only fund
those projects with critical ratings in the primary mission
category. They expressed concern that other mission areas,
especially community support, would not receive funds. (As noted,
for fiscal years 1998-2002, the Air Force has "zeroed out" all
funding for repair projects.) An official at headquarters stated
that bases can spend more on repair projects if they choose,
noting that the amount of funding received by bases through their
major commands is not the maximum spending allowed. He added that
bases can move funds from other O&M accounts, if available. At one
of the bases we visited, facilities officials said that in their
view, many base support and community support projects could not
get a critical rating because funding was being reserved only for
critical projects, and base commanders wanted to reserve it for
facilities connected to operations. Further, because ratings were
too restrictive, in their opinion, funding all critical projects
in all mission areas still would not provide them with sufficient
funds for repairs that they felt needed to be made. Air National
Guard Bureau Facilities held by the Air National Guard (ANG)
represents about 5 percent Uses Additional Criteria of the
Air Force's total PRV. However, the ANG accounts for about half
of Air Forces bases (103 of 202 identified to us for the purpose
of our questionnaire). In the ANG, FIM projects and large PML
projects are normally contracted out and are 100 percent federally
funded. Other activities, such as smaller PML-changing filters,
adjusting equipment, etc.-are covered by the state/federal
agreement for Facility Operation and Maintenance Activities
(FOMA). Under this agreement, the state and federal government
share costs for a variety of items such as utilities, rental of
equipment, state employees' salaries, and supplies and materials.
The cost-share ratio depends on the mission of the unit, but
according to the ANG Bureau (i.e., headquarters), the typical
share is 75 percent federal and 25 percent state.11 11The federal
share of FOMA is based on manpower standards, actual salary rates
for the state, and historical/predicted costs for utilities,
services, supplies, and materials. Page 64
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements For maintenance and repair that is 100-
percent federally funded, such as FIM projects, the ANG Bureau
uses a mix of factors as criteria to determine the annual amount
each base receives-square footage and condition, pavement area and
condition, area cost factors, and overall real property funds
availability. Daily Repair and In the Air Force, base civil
engineers (BCE) and building users identify Maintenance
repair and minor construction projects. Building users report
problems to civil engineering, and civil engineering staff,
through their day-to-day work, report problems. Among the 200 Air
Force installations that responded to our survey, approximately
12.4 percent of inspectors were reported to be engineers or
skilled craftsmen, with the remainder being building users, and
about a half percent being contractors. Typically, work orders for
repairs are entered daily into a base's work order system, upon
receipt of a request for repair. When building users identify
repairs, civil engineering staff determine whether the requested
repair or minor construction is valid through personal knowledge
of the facility or inspection. For example, at a small base, the
civil engineer would have personal knowledge of the age of
systems, such as an air conditioning system in the command
building. If the system historically had not cooled the building
adequately, the base engineer would know that a work order to
repair the system to properly cool the building is a valid
request. At larger bases, civil engineers may have to visit the
site to validate the request. Through a work order board that
meets as needed, BCEs prioritize projects according to whether in-
house engineering can handle or whether the projects need to be
contracted out. BCEs enter the estimated cost of the contract
projects into the Air Force's Projects by Contract Management
System (PCMS).12 (These data are also centralized at a Gunter Air
Station facility that maintains the FIM database.) Civil engineers
use PCMS and real property records to create the FIM database.13
BCEs update PCMS projects to reflect FIM mission impact ratings,
and real property records provide the specific mission category
12PCMS was implemented around 1989 and is the Air Force civil
engineering system that tracks contract work from design to
completion. All FIM projects are in PCMS. 13One FIM objective was
to use existing databases and reduce the workload of gathering the
information. We did not verify data in PCMS or in real property
records. Page 65
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements codes for each base. In fiscal year
1998, base engineers assigned initial FIM mission impact ratings
to all projects in PCMS. Methods to Ensure Rating FIM ratings
are validated through a review and approval process. After
Validity base engineers assign an initial
rating to all PCMS projects, the base commander reviews/approves
the ratings. Typically, each base in the Air Force has a facility
board that consists of all the base's unit commanders. This board
assists the base commander in making facility infrastructure
decisions, including approval of FIM project ratings. BCEs
present the FIM ratings at a board meeting and resolve any
differences in opinions. The base engineer also obtains the
commander's priorities for the projects and includes this ranking
in the FIM database. Our survey results reflected the use of a FIM
review and approval process. Installations reported a number of
ways in which initial ratings are reviewed, with use of outside
contractors ranking the lowest, at about 3 percent. Table II.3
summarizes base responses. Table II.3: Steps to Ensure FIM
Project Ratings Are Valid Percent of respondents Step to ensure
validity
citing method Rely on expertise of assessor; no formal procedures
used 21 Selected worksheets are
reviewed by facility management
46 office staff Facility staff makes follow-up visits to verify
reported problems 25 on a sample of
selected rating worksheets Outside contractors used
3 Other validation methods
34 Source: Responses to question 9, GAO survey. Methods to Ensure
When asked about the steps taken to ensure ratings given by one
rater Consistency in Ratings would be, on average, the same
reported by another rater, 51 percent of respondents said they had
no formal procedures or mechanisms other than the expertise and/or
training of their staff who do the ratings. Forty-eight percent
wrote in about other methods used to ensure consistency. Table
II.4 shows the responses. Page 66
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements Table II.4: Steps to Ensure Consistency
Percent of respondents Step to ensure consistency
citing step No formal procedures used other than expertise of the
raters 51 Set number or percent of
facilities are reinspected by different 3
assessors Random sample of facilities are reinspected by different
7 assessors Outside contractors used
1 Other method to ensure consistency
48 Source: Responses to question 10, GAO survey. Installation
Views on Regarding the overall quality of the FIM process, 61
percent reported the Constraints primary factor
affecting overall quality was the shortage of resources-
insufficient time and/or budget to carry out assessments. Table
II.5 shows the responses. Table II.5: Factors That Constrain
Assessment Quality Percent that checked Constraining factor
factor Shortage of personnel
45 Shortage of trained personnel, that is, engineering or skilled
42 craft background Shortage of resources (that is, insufficient
time and/or budget 61 to carry out
assessments) Other
9 Does not apply--no factors create a significant constraint on
22 the quality of reviews of facility conditions Source: Responses
to question 11, GAO survey. When asked how methods could be
changed, 64 percent of the responding bases reported that the Air
Force should place much more emphasis on long-range planning,
while de-emphasizing annual assessments of facilities. Thirty-nine
percent responded that buildings and facilities should be rated
primarily according to engineering, life-safety and other factors,
as shown in table II.6. Page 67
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements Table II.6: How Bases Would Change
Determining RPM Requirements Proposed change
Percent agreeing Rate building/facilities primarily according to
engineering and 39 life-safety
criteria, while decreasing the role of aesthetics Place much more
emphasis on long-range maintenance
64 planning while de-emphasizing annual assessments Other
28 Source: Responses to question 13, GAO survey. Some Major
Commands We found the Air Force allows
major commands to use assessment tools in Supplement FIM With
Other addition to FIM to rate the condition of their facilities
and prioritize RPM Assessment Tools
spending. Three major commands-the Air Force Materiel Command,
the Air Combat Command, and the Air Force Academy-use non-FIM
assessments. Command officials told us these systems provide more
detailed information about projects than FIM does and helps them
make more informed decisions regarding project funding. The Air
Force Academy uses a system that includes life-cycle principles of
property management. The systems used by Air Force Materiel
Command and the Academy are based on engineering assessments as to
whether facilities are working adequately. In contrast, FIM
prioritizes projects based on how deficiencies are impacting
missions. Air Staff stated that commands are allowed to use other
tools if it helps them to better manage their facilities. Table
II.7 outlines the three systems' major features. Table II.7:
Additional Assessment Tools That Supplement FIM Major command
Name of system Principle
characteristic Air Force Materiel Command Infrastructure
Condition System (ICS) Provides engineering
assessment/ratings on the physical condition of the system on a
scale of 0 to 10. Air Combat Command Civil
Engineering Risk Matrix (CERM) Rates projects impact
on mission more extensively than FIM and provides a measure
indicating probability of funding from low to high. Air Force
Academy Facility Investment Strategy
Rates buildings not projects, updated each year by a contractor;
buildings managed to extend maximum life of facility. Source: Air
Force civil engineering officials at each of the cited commands.
Page 68 GAO/NSIAD-99-
100 Real Property Management Appendix II Air Force Strategy,
Methods and Criteria for Determining Real Property Maintenance
Requirements Inspection Condition System The Air Force
Materiel Command Inspection Condition System is a series of
checklists that establish detailed rating criteria for evaluating
the physical condition of the components and subcomponents of five
designated infrastructure systems-building systems, utility
systems, pavement and grounds, airfield systems, and water and
wastewater system. Inspectors read physical condition descriptions
and assign a rating scaled from 0 to 10 (0 is complete failure; 10
is new condition) that best describes the subcomponents physical
condition. Each subcomponent is then assigned a weighting factor
that best represents the importance of the subcomponent to the
overall component system. Component ratings are then used to
determine project ratings. The Air Force Materiel Command will
continue to use its system along with FIM because, officials told
us, it gives the command an engineering-based technical assessment
of projects. An Air Force Materiel Command official said that FIM
provides the impact on the mission and Inspection Condition System
tells them technically how well the system, such as a heating and
air conditioning system, is performing. Civil Engineering Risk
Matrix The Air Combat Command planned to require its bases to
use its Civil System Engineering Risk
Matrix System in addition to the FIM through fiscal year 1998,
after which it would transition to FIM only. The matrix system
was similar to FIM in that it rates projects according to mission
impact. It has five mission areas and impact ratings, each with a
numerical value. When combined, the values produce a funding
probability from low to maximum. The five impact ratings are
catastrophic, critical, essential, required, and desired.
Catastrophic is valued at seven, whereas desired is valued at one.
The Air Combat Command developed the matrix to provide it with a
risk-based methodology to advocate for project funding. Facility
Investment Strategy In 1995, the Air Force Academy developed
a Facility Investment Strategy that gave it an engineering
analysis of facility and infrastructure conditions and that
utilizes some elements of life-cycle planning. In this system,
buildings have an estimated lifespan, and maintenance is geared to
maximizing the lifespan. The system determines all work that
needs to be done for buildings, regardless of the urgency. In
contrast, FIM determines projects that need to be done and
prioritizes them by mission impact. With the information the
system provides, the academy developed condition indices that
monitor the effects of various levels of investment. The indices
are also used to predict the anticipated condition of the asset
Page 69 GAO/NSIAD-99-100
Real Property Management Appendix II Air Force Strategy, Methods
and Criteria for Determining Real Property Maintenance
Requirements based on the amount of investment made to renew the
asset.14 According to the academy, they plan to continue to use
their system along with FIM. They told us that their system gives
them more detailed building information than does FIM and that
they continue to add to the detail each year as they do annual
updates. Each year the academy pays a contractor about $25,000 to
$30,000 to update and analyze the program data. Allocation of RPM
The Air Force plans to allocate RPM resources based on two
factors-the Resources 1 percent of estimated
installation PRV and the prioritization scheme created under FIM.
However, through fiscal year 2002, no funding will be provided to
FIM-rated repair projects; the only RPM funding will be for
preventive maintenance level repairs. According to FIM guidance,
the Air Force will use the FIM Mission Area Matrix to establish
investment targets for each mission area tied to an Air Force
investment strategy. Headquarters will then allocate funding to
the major commands based on their share of the targeted
requirement. According to headquarters, targets have not yet been
established since FIM is still new. Almost Half of Air Force
Since the Air Force allocates a very substantial portion of total
RPM PRV Estimate Needs spending on the basis of PRV (100
percent through fiscal year 2002), it is "Correction"
critical that installations calculate accurately. However, this
may not be the case, as noted in a contractor analysis of the Air
Force's PRV model, which found that only 55 percent of the Air
Force's estimated $204 billion (fiscal year 1996) PRV "has been
determined . . . to be acceptable"; "the Air Staff has determined
that the remaining 45 percent of the PRV data is in need of review
and validation."15 "The most recent calculation of PRV . . .
contains anomalies that required validation or correction."16 The
Air force indicated that it is addressing this issue. In addition,
the contractor's report notes that some PRV estimates are
unreliable because the real property records "do not contain the
level of 14This system and the use of condition indices influenced
the development of FIM. After being briefed on the academy's
system, the Air Force Vice Chief of Staff directed the Air Force
Office of the Civil Engineer to develop an index, similar to the
one developed by the academy, for use by commanders to analyze
future facility construction and repair requirements. 15USAF:
"Short Term Analysis Report: Air Force PRV Model," October 1997,
p. 2. 16Delta Research Division of BTG, Inc.: "Short Term Analysis
Report: Air Force PRV Model," October 1997, p. 1. Page 70
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements detail required to accurately match an
appropriate unit cost to the real property record quantity."17 As
an example, the report cites the fact that water lines are only
identified as a "generic type," but not the size or type of water
line, which it notes can range in cost from $7 per linear foot to
about $60 per linear foot for 24-inch cast iron pipe. The report
provides no estimate of the potential range of inaccuracy in the
PRV estimates for Air Force facilities. In sum, the PRV measure's
estimate appears open to misinterpretation and, hence,
miscalculation. RPM Needs Exceed Air Force bases' responses to
our survey reported that in fiscal year 1997, Requests
they had $5.9 billion in repair needs, and had received 18.3
percent of that total ($1.08 billion) in RPM funding. In
responses to the survey, as shown in table II.8, the lack of
linkage between requirements and allocation of resources was one
of the top five most frequently cited weaknesses in the Air
Force's RPM management. Table II.8: Top Five Frequently Cited
Weaknesses Weakness
Percent citing weakness Little or unclear linkage between RPM
needs assessment and 39 resource
allocation Rollup oversimplifies conditions
37 Condition assessments/requirements determination are too
34 subjective Ratings do not tell what is wrong within facility or
mission 32 category Little/unclear
linkage between condition determination and
29 budget estimation Source: Response to question 12, GAO survey.
Total exceeds 100 percent because more than one choice was
possible. Air Staff uses FIM to advocate for resources. When we
asked bases what they would change about the method used to
allocate RPM resources, about 50 percent wrote that they would not
change the system. Of the other 50 percent, about half (48
percent) recommended a variety of changes ranging from the receipt
of a lump-sum amount at the beginning of the year to simply
increasing the dollar amount they received. 17Delta Research
Division of BTG, Inc., op. cit., p. 4. Page 71
GAO/NSIAD-99-100 Real Property Management Appendix II Air Force
Strategy, Methods and Criteria for Determining Real Property
Maintenance Requirements When asked to suggest methods on how
funding is allocated by their major commands, there appeared to be
no clear consensus with regard to four proposed alternatives,
other than a 60- to 40-percent opposition to decentralizing
control of RPM funds downwards from the major commands. Table
II.9 shows the percent of bases' that agreed with four specified
alternatives. Table II.9: How Bases Would Change Funding
Allocations Percent of respondents Suggested change
citing change Funding for RPM should be based primarily on the
physical 56 deficiencies present in
facilities Funding should not be based on a fixed increase above
or 51 below the previous year's
level Funding be based on average age, total square footage and
45 number of facilities RPM funding/allocation should not be
centrally managed by 40 major
command Source: Responses to question 22, GAO survey. Bases
Visited We visited Eglin Air Force Base, Fort Walton Beach,
Florida; Pope Air Force Base, Fayetteville, North Carolina; and
Air Combat Command, Langley Air Force Base, Langley, Virginia, to
ask facilities management officials how RPM requirements are
determined, how funds are allocated, and their views on the RPM
process. We asked similar questions at the following sites, where
we also pretested our survey at some, and subsequently validated
it at others, as indicated. Sites visited to pre-test the
questionnaire Maxwell Air Force Base (Air Education and Training
Command), Montgomery, Alabama; Seymour-Johnson Air Force Base (Air
Combat Command), Goldsboro, North Carolina; Wright-Patterson Air
Force Base (Air Materiel Command), Dayton, Ohio; and Air Force
Materiel Command, Wright-Patterson Air Force Base, Dayton, Ohio.
Page 72 GAO/NSIAD-99-100
Real Property Management Appendix II Air Force Strategy, Methods
and Criteria for Determining Real Property Maintenance
Requirements Sites visited to validate questionnaire Alabama Air
National Guard, Birmingham, Alabama; Scott Air Force Base (Air
Mobility Command), Belleville, Illinois; Tinker Air Force Base
(Air Force Materiel Command), Oklahoma City, Oklahoma; and Air
Mobility Command, Scott Air Force Base, Belleville, Illinois. Page
73 GAO/NSIAD-99-100 Real
Property Management Appendix III Navy Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
Appendix II I In this appendix we discuss the Navy's strategy,
methods and criteria for determining RPM requirements and
allocating resources, including the responses to a questionnaire
on RPM-related issues that we sent to Navy installations and major
claimants.1 In particular, we examine the key components of the
Navy's system for evaluating base infrastructure conditions and
estimating RPM costs, its Annual Inspection Summary (AIS) and
Shore Base Readiness Report (BASEREP). Background At the end
of fiscal year 1998, the Navy managed 31,040 buildings totaling
almost 343 million square feet. According to the Navy Budget
Office, the Navy's operations and maintenance (O&M) fiscal year
1999 appropriation for Navy and Navy Reserve RPM is $973.3
million. The Navy estimates that its backlog of critical-rated
repairs will be just over $2.5 billion at the end of fiscal year
1999.2 The Deputy Chief of Naval Operations (Logistics)
Facilities and Engineering Division has oversight responsibility
for RPM. According to the Navy, the plant replacement value (PRV)3
of Navy facilities, as of fiscal year 1998, was estimated at about
$103 billion.4 Navy RPM needs can be funded through six
appropriations: O&M, Navy; O&M, Naval Reserve; Research,
Development, Test and Evaluation, Navy; the Navy Working Capital
Fund; Military Construction, Navy; and Naval Reserve. Not all
installations receive funds from all six appropriations. The
working capital fund and Navy O&M also fund property inspections
to identify and report backlogs. While military construction
funds are not intended for RPM, they may reduce RPM needs when
used to replace or extensively renovate an existing facility. 1We
sent the survey, which asked about installation facility
inventory, RPM processes, and funding, to 132 Navy installations;
126, or 95 percent, returned the questionnaires. See app. X for a
copy of the survey. Major claimant is the Navy's equivalent term
for major command in the Air Force and Army. These are the
headquarters for a larger number of installations with similar
functions. 2The Navy rates backlog as either critical or
deferrable; only the critical backlog is officially reported to
the Congress. 3PRV is defined by OSD as "the cost to replace the
current physical plant (facilities and supporting infrastructures)
using today's construction cost (labor and materials) and
standards (methodologies and codes)." 4This includes family
housing ($10 billion in PRV), but excludes facilities funded by
working capital funds, which have an estimated PRV of $35 billion.
Page 74 GAO/NSIAD-99-
100 Real Property Management Appendix III Navy Strategy, Methods,
and Criteria for Determining Real Property Maintenance
Requirements Navy RPM Funding The Navy estimates that it would
take annual funding equivalent to about Strategy 2.1
percent of PRV to keep the conditions of its facilities stable,
but was funding RPM at about 1.5 percent of PRV in 1998 for O&M-
funded properties. However, according to the Navy, it will
increase RPM spending to 1.84 percent of PRV in fiscal year 2001,
with the total gradually rising to 2.59 percent of PRV by fiscal
year 2005. The Navy estimates that this will result in holding
increases in critical-rated backlog to no more than about 10
percent over end of fiscal year 1998 levels by fiscal year 2005.5
The spending planned for fiscal years 2001-2005 would cap the
growth in critical backlog at about $2.75 billion. The Navy has
targeted some of the planned RPM spending to barracks, with the
goal that critical-rated repairs for barracks will be "virtually
eliminated" by fiscal year 2004, if the funding is provided as
planned. While the Navy RPM funding strategy appears to be
reasonably consistent with a stated Navy goal to prevent an
increase in repairs rated "critical," it is not clear that
noncritical rated backlog growth will be adequately addressed.
The Navy stated that even with the increased funding for critical-
rated repairs, most facilities' RPM would be funded at a level
resulting in either a C2 or C3 readiness level. C3 means that the
facilities in the category (e.g., aviation, waterfront operations,
training) have only marginally met the demands of the mission, but
with major difficulty. For fiscal year 2001, RPM funding will keep
4 of 11 facility categories at the C2 level, with the remainder at
C3.6 The Navy told us that eventually some noncritical repair
needs could become critical, as conditions worsen. The Navy
funding strategy for RPM is the result of balancing RPM needs
against the other competing priorities of the Navy. 5Estimate is
from a Navy November 1998 briefing and technical comments on draft
of this report. A June 1999 Navy graph shows total critical
backlog increasing from just under $2.5 billion at the start of
fiscal year 1999 to about $2.75 billion for fiscal years 2002-2003
and declining slightly thereafter. 6According to the Navy, for the
purpose of calculating these ratings, it reduced its facilities
from 28 to 11 mission categories. These include barracks, aviation
(runways and associated facilities) training, and utilities. Page
75 GAO/NSIAD-99-100
Real Property Management Appendix III Navy Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
Methods and Criteria to Determine Maintenance Needs Overview of
Navy RPM The Naval Facilities Engineering Command (NAVFAC) is
responsible for the technical direction of the Navy's real
property inventory. The Command maintains a database of all Navy
real property, including property of the Marine Corps. The
database contains various data elements, including the unit
identification code of the plant property accounting unit, date
acquired, government cost, current plant value (CPV), investment
category, use, and size (square feet, statute miles). NAVFAC's
objective is to make optimum use of available resources for RPM.
Its goals include ensuring the most efficient use of resources,
performing scheduled maintenance to avoid breakdowns, and
performing routine maintenance to avoid having to perform major
repairs. These tasks involve inspecting facilities, setting work
priorities, planning and estimating work, and reporting facility
condition. The Navy has maintained two facility condition
reporting systems since 1982: the Annual Inspection Summary (AIS)
and the Shore Base Readiness Report (BASEREP). These systems
serve different purposes, but overlap in that they both involve
installations' reports on aspects of facilities' condition. Both
are based on engineering inspections of facilities. AIS, the Navy
told us, is based on a fence-to-fence inspection of facilities to
rate deficiencies, rather than individual buildings. Deficiencies
are rated as either critical or deferrable; critical are those
that must be funded within 12 months. The purpose of the AIS is
to develop realistic, long-term maintenance plans that will reduce
the Navy's RPM backlog. AIS is the summary of work and costs to
correct deficiencies for each facility. The BASEREP's purpose is
to link installation resources with readiness and workload.
BASEREP reports on facility quantity and condition, major
equipment quantity and condition, and personnel. BASEREP is the
installation commander's assessment of the installation's ability
to execute assigned missions; it includes explanations of remedial
actions needed to Page 76
GAO/NSIAD-99-100 Real Property Management Appendix III Navy
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements correct deficiencies. Ratings are by
mission areas and include the status of all the facilities
supporting the assigned missions.7 The Navy's AIS does not include
Marine Corps activities, industrial and research plants owned and
operated by private contractors, military assistance advisory
groups and defense attache offices, petroleum reserves, Reserve
Officer Training Corps units, family housing, fleet moorings, and
property funded through the Naval Telecommunications Command and
Naval Security Group Command activities. NAVFAC publishes guidance
and handbooks on managing real property, including procedures and
guidance for conducting and documenting facilities inspections.
Navy instructions require installation commanding officers to
accomplish missions assigned by their major claimant, including
the management of related budgeting and obligation of funds. They
are responsible for efficiently and effectively managing
installation facilities to ensure they are adequate to accomplish
the missions. Navy RPM Definitions The Navy has defined
maintenance, repair, and construction as follows: * Maintenance:
the recurring, day-to-day, periodic, or scheduled work required to
preserve or return a real property facility to such a condition
that it may be used for its designated purpose. * Repair: the
return of a real property facility to such condition that it may
be effectively utilized for its designated purpose, by overhaul,
reconstruction, or replacement of constituent parts or materials
that are damaged or deteriorated to the point where they cannot be
economically maintained. * Construction: the erection,
installation, or assembly of a new real property facility; or the
addition, expansion, extension, alteration, conversion, or
replacement of an existing real property facility; or the
relocation of a real property facility. The Navy has established
criteria, including funding limits, for facilities projects to
comply with laws and regulations. Major claimants set the limits
of funds obligation for each base. A deficiency under the limits
and within the Navy definitions for maintenance and repair may be
funded by 7Navy briefing, June 1998 and Navy email communication
to GAO, September 1997. Page 77
GAO/NSIAD-99-100 Real Property Management Appendix III Navy
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements the installation. Projects over the
limits must be approved and funded by the major claimant as a
special project. BASEREP The BASEREP is an annual report of
each installation's ability to perform its missions and shows the
level of mission readiness, listed by three categories, including
the quantity and condition of facilities, personnel, and quantity
and the condition of major equipment. Its purpose is to link
financial and personnel resources with readiness and workload.
BASEREP criteria define 28 mission areas and major claimants
assign mission areas to their installations. Installation
commanding officers rate their installations' abilities to perform
the assigned missions according to C-ratings. The four C-ratings
are * C1-has fully met all demands throughout the reporting
period. * C2-has substantially met all demands, with only minor
difficulty. * C3-has only marginally met the demands, but with
major difficulty. * C4-has not met vital demands. The C-ratings
apply to the installation's asset categories-(1) personnel, both
military and civilian; (2) facilities' quantity and condition; and
(3) major equipment quantity and condition. In applying the
ratings to facilities, quantity addresses the number and size
regarding mission and condition addresses deficiencies that should
be corrected to achieve mission requirements. The commanding
officers provide additional narrative assessments describing the
problems and the proposed solutions for all missions rated C3 or
C4. Because these ratings are not quantified and involve
individual judgments by commanders, a Navy RPM official at one
installation described the BASEREP as "a very subjective
assessment." Three Navy sites we visited had some C4 mission
ratings. The Norfolk Naval Shipyard reported C4 in its port
operations mission area; NAS Oceana reported C4 in its bachelor
housing mission area; and Public Works Center San Diego reported
C4 in its research, development, test, and evaluation (RDT&E) and
administrative services missions. According to BASEREP criteria,
AIS data should not drive the BASEREP assessment, but BASEREP
deficiencies should be addressed in the AIS. Major claimants
provide supplemental guidance to their installations on reporting
criteria. According to base officials, the Chief, Naval Education
Page 78 GAO/NSIAD-99-100
Real Property Management Appendix III Navy Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
and Training (CNET) directed that only facilities' condition and
quantity ratings be provided on its installations' September 30,
1997, BASEREPs; the major claimant did not want the personnel or
equipment ratings. AIS AIS is the Navy's
means of identifying and reporting its cumulative backlog of real
property maintenance and repair. It is also the tool through
which installation commanders identify and report RPM deficiencies
and plan, budget, and fund their RPM. AIS contains the critical
and the total maintenance and repair backlog as of the fiscal
year's end. AIS also includes the names of the organizations that
performed facility inspections, the percentage of inspections
completed, and explanations of large increases in the backlog. The
AIS divides all deficiencies into two types: critical and
deferrable. A deficiency is rated critical if it "must be
corrected within 12 months" and "will impact mission, affects
quality of life or has safety or environmental hazard potential"
according to the Naval Facilities Engineering Command's Inspection
of Shore Facilities manual.8 The estimated cost of fixing the
deficiencies that qualify as critical is reported to OSD as the
backlog of maintenance and repair. If a critical deficiency has
not been addressed for 4 years, it is to be classified as
deferrable. Inspections to Identify The three volumes of the
Inspection of Shore Facilities manual describe the Deficiencies
criteria and procedures for performing the three types of
facilities inspections-operator, preventive maintenance, and
control. The latter is the primary source for AIS and budget
data. Navy inspection criteria require a thorough examination of
each facility, evaluation of the operator, and preventive
maintenance inspections, and identify related resource
requirements as a basis for funding requirements. Inspections are
expected to be planned, scheduled, and performed by qualified
inspectors and are required for structural, mechanical,
electrical, and roof repairs. According to Navy criteria,
inspectors should (1) have a technical trade background; (2) be
experienced in maintenance and repair operations, including
maintenance standards, safety, health, and building codes; and
8NAVFAC M0-322, vol. I, March 1993, p. 3-5. Letter Page 79
GAO/NSIAD-99-100 Real Property Management Appendix III Navy
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements (3) have the ability to write clear
reports of facility conditions. The criteria include requirements
for a facility condition report and describe its three components:
a facility condition detailed deficiency list, facility inspection
checklists, and facility condition summary sheet. These documents
are to be used to identify packages of work for planning,
estimating, and programming maintenance and repairs into the
installation's work control system as well as identifying budget-
oriented resource requirements. They form the basis for AIS and
BASEREP. Navy inspection criteria also cover the requirements for
compliance with regulatory standards and safety codes; that is,
national building codes for corrosion, electrical elevator,
plumbing, track safety standards, Occupational Safety and Health
Administration requirements, and environmental regulations.
NAVFAC publishes other manuals containing inspection and
maintenance guides for many facilities, including maintenance of
railroads, building maintenance, structures, paints and protective
coatings. The criteria for frequency of facility inspections are
shown in table III.1. These are suggested frequencies and
installations may deviate when resources are not available. Table
III.1: Type and Frequency of Inspection Type and frequency of
inspection (in years) Facility's mission relationship
Structural Electrical Mechanical Roof Direct mission support
2 2 2 1 Indirect mission support
3 3 3 1 Nonmission support
4 4 4 2 Inactive or excess
5 5 5 3 Source: Navy. Navy criteria
call for inspectors to prepare for inspections by reviewing
facility records, including floor plans, the status of major
alterations and maintenance projects, lists of related contracts
and warranties, and lists of tenants and maintenance persons. The
six installations and the Public Works Center we visited used in-
house staff or contractors to conduct their control inspections.
Our review indicated that in-house inspectors scheduled their
inspections, reviewed property records, and other files they
maintained for each facility. After conducting the inspections,
they Page 80 GAO/NSIAD-99-
100 Real Property Management Appendix III Navy Strategy, Methods,
and Criteria for Determining Real Property Maintenance
Requirements typically prepared the worksheets, preliminary cost
estimates of the work they identified, and entered the data into
the installation's work order system. The Public Works Center
submitted its inspection reports and prepared work orders for the
deficiencies. Estimating Costs to Correct Navy criteria call for
inspectors to prepare preliminary cost estimates of Deficiencies
the work identified and suggest four sources for estimating labor
and material costs, including NAVFAC P-716, Unit Price Standards,
R.S. Means Company, Inc., or Richardson Dodge (the latter two are
private companies that research and publish cost estimates).
Officials told us their inspector/estimators use the manuals to
estimate costs of needed work. They determine the scope of the
maintenance and repair work they identified and use the manuals to
price the costs of the various types of crafts and materials.
Projects that cost more than the installation commanding officer's
approval limits are special projects and generally must be
approved and funded by the installation's major claimant.
Installation commanders submit their lists of needed special
projects to their major claimant for review and funding. Major
claimants review the special projects, assign priorities, and fund
those to the extent they have remaining funds. Review boards
evaluate the projects and recommend priorities. Relationship
Between Officials at one of the installations we
visited said that BASEREP BASEREP and AIS
objectives should support and be consistent with the AIS
submission. However, because there are 28 mission areas in BASEREP
but only 18 in AIS, with the latter encompassing the BASEREP's
areas, it is clear the 2 do not match exactly. AIS and BASEREP
use the same data from inspections but rate different RPM-related
elements. According to the Navy, both AIS and BASEREP ratings are
used "at all levels of the chain of command to allocate resources
among competing projects."9 Validation of
Navy criteria call for inspectors to have training and experience
in the craft Inspection Results trades. The
staff inspectors at the locations we visited were engineering
technicians who were experienced in the trades and in facilities
inspection, 9Navy email communication to GAO, September 1997. Page
81 GAO/NSIAD-99-100 Real
Property Management Appendix III Navy Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
according to Navy officials. At one installation that contracted
for its inspections, officials told us the inspectors had
equivalent experience. Responses to our questionnaire showed that
the installations used different control inspection review and
approval procedures. About 53 percent reported that facility
management staff reviewed selected worksheets and judged ratings
based on personal knowledge. About 20 percent said they used
other methods such as facility boards and higher commands to
validate inspection results. Eleven percent said they used
outside contractors. Table III.2 shows the responses. Table
III.2: Steps to Ensure Inspections Are Valid Step to ensure
validity Percent
citing step Rely on the expertise of assessor; no formal
procedures used 23 Facility management
staff review selected worksheets
53 Facility staff make follow-up visits to verify reported
problems 19 on a sample of selected rating
worksheets Outside contractors are used
11 Other validation methods. Specify.
20 Source: Responses to question 9, GAO survey. When asked about
the steps taken to ensure ratings given by one staff would be, on
average, the same reported by another staff, 60 percent said they
had no formal procedures or mechanisms other than the expertise
and/or training of the staff who did the ratings. About 38
percent wrote about other methods used to ensure consistency.
Most described an inspection review process in which ratings are
reviewed up the chain of command. Table III.3 summarizes these
answers. Table III.3: Steps to Ensure Consistency Step to ensure
consistency Percent
citing step No formal procedures used other than expertise of the
assessor 60 Different assessors reinspect
facilities 4
Different assessors reinspect a random sample of facilities
7 Outside contractors are used
6 Other method used to ensure consistency
38 Source: Responses to question 10, GAO survey. Page 82
GAO/NSIAD-99-100 Real Property Management Appendix III Navy
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Regarding the overall quality of the
control inspection process, 71 percent of the respondents reported
the primary factor affecting overall quality was the shortage of
resources. Table III.4 illustrates these responses. Table III.4:
Factors That Constrain the Quality of Assessments Percent that
checked Constraining factor
factor as a constraint Shortage of personnel
35 Shortage of trained personnel, that is, those with engineering
28 or skilled craft backgrounds Shortage of resources (i.e.,
insufficient time and/or budget to 71
carry out assessments) Other
7 Does not apply. No factors creating a significant constraint on
21 the quality of reviews of facility conditions Source: Responses
to question 11, GAO survey. When asked how methods could be
improved, 76 percent of the respondents reported that they agreed
with combining AIS and BASEREP, while 50 percent said long-range
planning should get more emphasis.10 Allocation of RPM The
Navy Comptroller allocates obligation authority to various major
Resources claimants, which in turn allocate it to
their installation commanders. The Navy Facilities and
Engineering Division told us that most commands withhold 4 to 4.5
percent of total annual RPM spending for mid-year release. After
mid-year review of competing needs, they release the reserve
funds; these may be used for either general RPM, or for special
projects, or emergency repairs. Special projects are
construction, repair, maintenance, or equipment installation
projects that exceed the funding authority of the installation
commander but fall below the threshold for military construction.
Navy guidelines restrict special project funding to no more than
10 percent of total RPM annual spending. Six of the installations
we visited received Navy O&M obligation authority from their major
claimants. They also received funds from tenants that paid for
some services on a reimbursable basis. RPM funds were managed
10Responses to question 13, GAO survey. Page 83
GAO/NSIAD-99-100 Real Property Management Appendix III Navy
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements by the installation's engineering officer
(public works officer), base civil engineer, or staff civil
engineer, who directed the application of resources. Officials at
all the installations we visited told us their RPM funding has
been insufficient to keep the RPM backlog from increasing over the
last few years. For example, officials at the Norfolk Naval
Shipyard told us they implemented an aggressive demolition program
to reduce future RPM needs, but even with that they could not keep
up with RPM needs. Three of the seven sites we visited were funded
through Navy Working Capital Fund (1) Norfolk Naval Shipyard, (2)
Public Works Center San Diego, and (3) Naval Air Station Patuxent
River. These three were funded through revenue they generated by
providing services to customers. The Public Works Center prepared
annual budgets based on rates and quantities of products and
services they expected to sell to their customers, including
facility control inspections. The Center funding for its RPM was
included in its utilities and overhead rates. The Norfolk Naval
shipyard, like the Public Works Centers, funds most of its RPM
through its overhead rates. The shipyard also received some O&M
funding for RPM on some other facilities, including bachelor
housing (barracks). It expected to receive military construction
funding for some other maintenance projects. Naval Air Station
Patuxent River was funded by four sources: Navy Working Capital
Fund; Research, Development, Test and Evaluation, Navy; O&M; and
Military Construction, Navy. The capital fund was the largest
source of RPM funds, collected through its overhead rates,
according to public works personnel. Research, Development, Test
and Evaluation was provided to fund all the related base
operations support functions, including RPM. Its O&M funded RPM
for other base operations support, including aviation operations,
bachelor housing, training, administration, and community
services. The other four bases performed the largest portion of
their RPM with O&M funds. At two, Dam Neck and Northwest,
officials told us their funding allocations were stable, that is,
they almost always got the funding they expected to receive before
the fiscal year began, and they were able to execute RPM
efficiently and economically. Officials at those installations
also said that their RPM backlog was increasing but they believed
they were better off than fleet-funded installations because their
funding was more stable. Operational commitments at fleet-funded
bases, they said, compete for the same O&M funds as RPM. Page 84
GAO/NSIAD-99-100 Real Property Management Appendix III Navy
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements We asked bases to choose from a list of
weaknesses that characterize their RPM system (or to write in
their views). The responses are shown in table III.5. Table
III.5: Top Weaknesses in RPM System Percent that checked
Weakness
weakness Little or unclear linkage between RPM needs assessment
and 41 allocation of resources Rollup
oversimplifies conditions
38 Condition assessments/requirements determination are too
25 subjective Ratings do not tell what is wrong within facility or
mission 27 category Little or unclear
linkage between condition assessment and
30 budget estimation Source: Responses to question 12, GAO survey.
Needs Exceed Allocations With regard to the allocation of RPM
funds, Navy installations reported receiving RPM funding equal to
14.2 percent of their identified RPM needs in fiscal year 1997.11
The Navy Facilities and Engineering Division emphasized that "the
amount requested and received by the base commander is only a part
of the total equation," noting that "the major claimants hold a
portion of the RPM budget for special" projects.12 Similarly,
major claimants have a portion of their RPM budgets withheld by
higher levels for the centralized demolition program. We asked
Navy installations to indicate whether or not they agreed with
four potential alternative changes to their RPM funding system.
The responses are shown in table III.6. 11Responses to question
15, GAO survey. 12Navy email communication to GAO, September 1997.
Page 85 GAO/NSIAD-99-100
Real Property Management Appendix III Navy Strategy, Methods, and
Criteria for Determining Real Property Maintenance Requirements
Table III.6: Bases' Choices to Proposed Changes in Allocation
Process Suggested change
Percent citing change RPM funding should be based on physical
deficiencies, with 48 "needier"
bases receiving more funds Funding should not be based on a fixed
increase above or 61 below the
previous year's level Funding should be based on the average age,
total square 32 footage, and
number of facilities RPM funding/allocation should not be
centrally managed by 30 major
command Source: Responses to question 22, GAO survey. Responses
exceed 100 percent because more than option could be chosen. Bases
Visited We pretested and post-tested the survey at selected
locations as part of our work to ensure the reliability of the
survey. We pretested the survey at six Navy sites: U. S. Atlantic
Fleet, Norfolk, Virginia; Naval Air Station Pensacola (Chief,
Naval Education and Training), Pensacola, Florida; Naval Air
Station Oceana (U.S. Atlantic Fleet), Virginia Beach, Virginia;
Naval Air Station North Island (U.S. Pacific Fleet), San Diego,
California; Public Works Center San Diego (Naval Facilities and
Engineering Command), San Diego, California; and Norfolk Naval
Shipyard (Naval Sea Systems Command), Portsmouth, Virginia. We
performed survey post-tests to validate survey responses at four
locations: Naval Air Systems Command, Naval Air Station Patuxent
River, Lexington Park, Maryland; Fleet Combat Training Center,
Atlantic, Dam Neck, Virginia Beach Virginia; Naval Security Group
Activity Northwest (Naval Security Group Command), Chesapeake,
Virginia; and Naval Air Station Patuxent River (Naval Air Systems
Command), Lexington Park, Maryland. During our pre- and post-
tests, we visited facilities causing, or contributing to, a C3 or
C4 mission area in the BASEREP, at seven sites: Page 86
GAO/NSIAD-99-100 Real Property Management Appendix III Navy
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements Naval Air Station Oceana, Virginia Beach,
Virginia; Naval Air Station North Island, San Diego, California;
Public Works Center San Diego, San Diego, California; Norfolk
Naval Shipyard, Portsmouth, Virginia; Fleet Combat Training
Center, Atlantic, Dam Neck, Virginia Beach, Virginia; Naval
Security Group Activity Northwest, Chesapeake, Virginia; and Naval
Air Station Patuxent River, Patuxent River, Maryland. During these
visits we also reviewed related property records, documented
backlog information and the recorded deficiencies, and visited the
facilities to observe the condition and deficiencies. We
interviewed installation engineering staff as they showed us the
deficiencies and documented additional information when necessary.
We observed and confirmed the deficiencies recorded at 17 of the
18 facilities we visited through direct observation. We also
visited three other sites where we interviewed relevant officials,
observed facility conditions, and were briefed on RPM processes
and issues. The three were Naval Station Norfolk, Norfolk,
Virginia; Naval Amphibious Base Little Creek, Norfolk, Virginia;
and Public Works Center Norfolk, Norfolk, Virginia. Page 87
GAO/NSIAD-99-100 Real Property Management Appendix IV Marine
Corps' Strategy, Methods, and Criteria for Determining Real
Property Maintenance Requirements
Appendix IV In this appendix, we discuss the Marine Corps'
strategy, methods, and criteria for determining RPM requirements
and allocating resources to those needs. We examine the Marine
Commanding Officer's Readiness Reporting System (CORRS), a key
component of the Marines' system for evaluating base
infrastructure conditions, including the responses to our
questionnaire on RPM-related issues that we sent to Marine Corps
bases and the Corps' single major claimant.1 Background
As of 1998, Marine Corps installations worldwide managed about
11,000 buildings totaling about 104 million square feet, with an
estimated plant replacement value (PRV)2 of $28 billion (or about
5.6 percent of the services' total PRV). Although the Corps has
its own bases and (one) major claimant, it is a part of the Navy
and is therefore closely linked to the Navy in almost every
regard, including the fact that the Naval Facilities Engineering
Command (NAVFAC) maintains the real property inventory for the
Corps. The Corps headquarters Facilities Branch has overall
responsibility for Marine Corps RPM programs. According to the
Navy Budget Office (which maintains the Marines' fiscal data), the
Marine Corps fiscal year 1999 RPM appropriation was $351.2
million, of which $6.9 million was for the Marine Reserve and
$344.3 million was for its active forces. RPM Funding Strategy The
Marine Corps' funding strategy through fiscal year 2005 is to
underfund RPM compared to what it estimates is required to keep
the amount of backlog repairs at current levels. According to the
Corps, estimated unfunded repair backlogs rise 60 percent during
1998-2005, from $711 million to $1.1 billion. According to the
Corps headquarters Facilities Branch, about 80 percent of this
amount is critical-rated repair; the remainder is deferrable
repair. 1We sent the survey, which asked about base facility's
inventory, RPM processes, and funding, to 16 Marine Corps bases;
all returned the questionnaire. See appendix X for a copy of the
survey. A claimant is the equivalent to a major command in the
Army or Air Force. 2PRV is defined by the Office of the Secretary
of Defense (OSD) as "the cost to replace the current physical
plant (facilities and supporting infrastructures) using today's
construction cost (labor and materials) and standards
(methodologies and codes)." Page 88
GAO/NSIAD-99-100 Real Property Management Appendix IV Marine
Corps' Strategy, Methods, and Criteria for Determining Real
Property Maintenance Requirements The Marine Corps compares its
RPM spending level to the private sector to demonstrate that it
requires more funds for RPM.3 The Corps noted that in fiscal year
1998, it planned to spend the equivalent of 1.2 percent of PRV on
RPM, comparing it to the 1.75 percent level recommended in a 1989
DOD report,4 and a private industry level of 3.5 percent cited in
the same report.5 It subsequently allocated about 1.4 percent of
PRV to RPM, and plans to gradually increase this to about 1.8
percent by fiscal year 2005. However, this is not a sufficient
funding level to constrain the growth of backlog. The Corps
states that "all bases are underfunded" with regard to RPM and
that with "insufficient funds, backlog grows." RPM Assessment
The Marine Corps uses two systems to assess its RPM needs-a
version of System the Navy's Annual
Inspection Summary (AIS) (see app. III), and CORRS. CORRS is
modeled on the Navy's Shore Base Readiness Report (BASEREP). It
rates the ability of an installation, on a scale of one to four,
to carry out its mission. According to the Corps headquarters
Facilities Branch staff, the Marine version of AIS is less
detailed than the Navy's but is otherwise similar. It uses
inspections to generate an estimate cost for repairs. Critical-
rated repairs that are not funded become the reported backlog.
Unlike AIS, the data are not inserted into a servicewide database.
Rather, each base reports its estimated backlog to Corps
headquarters at a given point during the year. CORRS: A New System
The Marine Corps' CORRS facilities assessment system was tested at
various installations in 1996, and bases initially submitted data
to the system in April 1997. According to the Corps, CORRS was
created to * link facility conditions directly to mission
requirements; * rate Corps facilities at all installations against
a uniform set of requirements; * make Marine Corps-wide investment
decisions factoring in facilities' effect on readiness; and 3June
1997 briefing to GAO. 4DOD, Renewing the Built Environment, 1989,
p. 31 5DOD, Renewing the Built Environment, 1989, p. 16. Page 89
GAO/NSIAD-99-100 Real Property Management Appendix IV Marine
Corps' Strategy, Methods, and Criteria for Determining Real
Property Maintenance Requirements * enable the Marines to compete
with the Navy, the Army, and the Air Force for very limited
resources.6 According to a memorandum issued by the Commandant of
the Marine Corps, the advantages of CORRS are that it provides (1)
comparability of requirements with other services and a detailed
defense for budget submissions and (2) helps base commanders
"identify problem areas and facility deficiencies that impact
mission areas." The memorandum also states that CORRS will
provide headquarters facilities planning staff with the data
needed to provide "an opportunity to make informed resource
allocation decisions and identify deficiencies to higher
headquarters." Further, it states that "the Planning, Programming,
and Budget System (PPBS) fails if the consequences of inadequate
funding cannot be clearly, logically and uniformly presented by an
installation. With the implementation of CORRS, all Marine Corps
installations will have identical classification formats." In
CORRS, facilities are rated on their condition and quantity, and
commanders assess the ability of their plant facilities to achieve
mission requirements. According to CORRS instructions, quantity
ratings use a scale of one (best) to four (worst), and "should
reflect the size and number of facilities required by the mission
. . . compared to what actually exists." CORRS has a four-point
scale to rate the impact of facility condition on readiness, with
results placed in a mission area assessment matrix, which appears
similar to the matrix used by the Air Force for its deficiency
rating system, the facility investment metric (FIM). The four
levels are defined as follows: * Level 1: Full mission capability;
no major facility deficiencies. * Level 2: Full mission
capability; any existing facility deficiencies are minor and
within the activities' capability to correct with available
resources. * Level 3: Reduced mission capability with major
facility deficiencies; the activity does not possess the resources
to correct those failures. * Level 4: Not mission capable; there
are major facility deficiencies that require external resource
support to eliminate. 6The purpose of CORRS was virtually
identical to the Army's rationale for its Installation Status
Report, and the Air Force's rationale for its facility investment
metric system, both implemented recently (1995 and 1998,
respectively). Page 90
GAO/NSIAD-99-100 Real Property Management Appendix IV Marine
Corps' Strategy, Methods, and Criteria for Determining Real
Property Maintenance Requirements CORRS rating worksheets show
ratings on a 1 to 4 scale for individual facilities within a 24
mission areas (versus 28 in the Navy's BASEREP). Individual
facility ratings are then combined, following a formula, to
produce an overall condition rating of 1 to 4 for mission areas at
installations, and quantity ratings. Although the mission-capable
levels are stated in broad terms, the facility condition
worksheets for each of the 26 mission areas quantify with
considerable precision how the rater is to decide which of the
four levels is correct in many cases and with somewhat less
precision in those that involve a less readily quantifiable
situation. For example, for aircraft operations, CORRS shows how
to calculate the rating level for each of seven specific
operational dimensions. The instructions for the first and
seventh dimensions are shown in table IV.I. Table IV.1:
Dimensions and Ratings in CORRS Indicator (measure)
Rating CORRS level Percentage of days when required
air operations Less than 5% 1 are
restricted or curtailed due to condition of runways, taxiways,
arresting gear, or aprons 510% 2 10-20%
3 Greater than 20% 4 Risk that mission will be
curtailed over next year due Almost none 1 to
document structural, safety, or environmental hazards Some risk
2 Serious risk 3 Almost certain
4 Source: CORRS Facility Condition Readiness Worksheet. According
to the CORRS instructions, the overall rating for the mission is
calculated as "enter worst rating [of the seven dimensions in the
mission] if that rating occurs more than once." "Otherwise, enter
worst rating minus one." Similar methods of calculation apply to
the other mission areas. As shown, written rather than percentage
estimates are used for some dimensions of mission areas; in some
cases, the entire mission area uses written rather than percentage
definitions. For example, ratings of the three indicators for
morale, welfare, and recreation are all written definitions:
seldom; occasional; frequent; and continuous problem. It is
evident, therefore, that some rating levels can be calculated with
greater Page 91 GAO/NSIAD-
99-100 Real Property Management Appendix IV Marine Corps'
Strategy, Methods, and Criteria for Determining Real Property
Maintenance Requirements accuracy-assuming the operational records
are available-than others, which require a judgment about the
dividing lines for the levels among the definitions of risk or
unacceptability of conditions. In addition, some of the
indicators themselves require interpretation, such as "morale and
welfare levels unacceptably low due to BOQ/BEQ [bachelor
officers' quarters/ bachelor enlisted quarters] conditions." In
this latter case, the term unacceptably is open to subjective
judgment. Base Views on CORRS On the surveys returned to us,
officials at one Marine installation commented that, CORRS "is not
flexible enough to reflect base-specific requirements." Further,
the "drop- down menu restricts detailed reporting." Another base
made these comments with regard to both detail and current
utility: to date [early 1998] CORRS has not been used in the
process of determining our maintenance real property requirements
due to the general nature of the information was inputted.
Currently, CORRS does not identify specific deficiencies and
necessary repairs. CORRS has been a useful tool for validating
planned repair and construction projects. At a Marine base we
visited, the facilities staff expressed some reservations about
the vagueness of the CORRS worksheets, noting that they were not
rating physical condition but the impact of conditions on mission
readiness. They noted that under this rating system, a building
could actually be in fine physical condition but rated as low or
unacceptable under CORRS because it was housing an activity for
which it was not well designed. For example, a warehouse would be
inappropriate as a library or as a day care center but could be
fine as a warehouse. They said that CORRS did not make clear
whether they were to rate the facility in terms of the facility's
original mission-for which it was designed-or in terms of the
mission of the people now in it. Facilities officials further
stated that they found CORRS ambiguous in some regards. If they
had 100 administrative buildings at the installation, they had the
time to interview only a sample of the occupants to determine how
well the buildings were meeting their needs. They said that they
had to figure out who the "top" administrative people were and
that it was unclear how to rate an entire mission area if only 2
of 77 buildings did not meet the mission. They said it was hard
to justify a rating of 3 or 4 (indicating poor conditions) when 75
of 77 buildings were acceptable. (Because CORRS is a new system,
the headquarters Facilities Branch stated that changes are being
made to it as they get feedback from the field on what works and
what does not.) Page 92
GAO/NSIAD-99-100 Real Property Management Appendix IV Marine
Corps' Strategy, Methods, and Criteria for Determining Real
Property Maintenance Requirements Another installation expressed
concern about whether base commanders would report accurately on
the impact of facilities on readiness, stating that "No CO
[commanding officer] will confess to being `not mission capable'."
Survey A total of 16 Marine installations
received questionnaires and all returned them. Despite the high
response rate, the relatively small total number of respondents
introduces a cautionary note about generalizing from the results.
When asked how methods could be improved, there appeared to be no
strong consensus among Marine respondents. Eight of the 16
favored rating facilities primarily according to engineering-based
criteria, but the other 8 did not. Ten Marine installations
favored more emphasis on long-term planning, but 6 did not. Table
IV.2 shows the Marine responses. Table IV.2: How Installations
Would Change Methods to Determine Requirements Percent approving
Proposed change in method
proposed change Rate building/facilities primarily according to
engineering, life-safety, 50 and health
criteria, while decreasing the role of aesthetics Place much more
emphasis on long-range maintenance planning,
63 while deemphasizing annual assessments of facilities Other
13 Source: Responses to question 13, GAO survey. RPM Needs Exceed
Marine bases reported a large gap between the RPM dollars they
asked for Requests Fivefold from their major claimant and
their unconstrained requirements. The respondents reported that
in fiscal year 1997, they received $174 million for RPM from
headquarters (the sole major claimant), but that their
unconstrained RPM requirement was $622 million. Thus, they
received about 28 percent of their identified needs; this was
about double the ratios received by Army bases or Navy
installations, and about 1.5 times more than was received, as a
ratio, by Air Force bases. Bases Visited We reviewed
relevant policies and other service guidance and records, and
interviewed responsible RPM-related staff at the Marine Corps
Letter Page 93
GAO/NSIAD-99-100 Real Property Management Appendix IV Marine
Corps' Strategy, Methods, and Criteria for Determining Real
Property Maintenance Requirements headquarters, and the Marine
Corps base Quantico, Virginia, where we also compared the data
reported to us in the questionnaire with base records. Page 94
GAO/NSIAD-99-100 Real Property Management Appendix V Summary
Comparison of Service Methods and Criteria
Appendi x V Each service uses different methods and criteria by
which to rate the condition of its facilities, prioritize repairs,
and allocate funds to those repairs. The core systems for
assessing and rating the condition of facilities and/or the
urgency of repairs are: the Army's Installation Status Report
(ISR), the Air Force's Facility Investment Metric (FIM), the
Navy's Annual Inspection Summary (AIS) and Shore Base Readiness
Report (BASEREP), and the Marine Corps' Commanding Officer's
Readiness Reporting System (CORRS). These generally combine
assessments of the physical condition of facilities and those
conditions' impact on mission. However, the Air Force's system
rates repair deficiencies only in terms of estimated impact on
mission rather than rating the condition of each facility. Table
V.1 compares some of these systems' basic characteristics. Table
V.1: Basic Characteristics of Services' Condition Assessment
Systems Service Characteristic of rating system
Army Air Force
Navy Marines Name(s) & date
ISR, 1995 FIM, 1998
AIS; BASEREP, CORRS, 1997 implemented
1982 What is rated by the Facilities and mission
Deficiency impact in four Repair projects and
Facilities, equipment, and assessment system areas
mission areas mission areas
personnel in terms of (based in part on work (based on
facility capability to meet orders generated by
inspections) designated mission facility users)
Who inspects Building users and
Users and Users and Users
and facilities engineers/skilled
engineers/skilled engineers/skilled
engineers/skilled craftsmen craftsmen
craftsmen craftsmen Number of levels in rating
Three-point scale for Three-point scale for
Four-point scale for Four-point scale for each system
facility condition; four urgency of repairs/ impact
mission areas; Two-point rated category points for mission areas
on mission scale for repair backlog urgency
Source: Service reports, manuals, and briefings. As table V.1
shows, with the exception of the Navy, assessment systems
currently used by the services have been recently implemented. In
general, these rating scales rank the severity of the condition of
a facility or the urgency of a repair project. However, because
they use different criteria to arrive at the ratings, and because
the scaling systems vary, the ratings they generate are not
comparable from service to service. Page 95
GAO/NSIAD-99-100 Real Property Management Appendix VI Criteria
for Allocation of Funds
Appendix VI In response to our survey on real property maintenance
(RPM) issues that we sent to 530 service bases worldwide, bases
ranked nine criteria to determine how RPM funds were allocated.
(The text of the survey can be found in app. X.) The rankings of
one through nine were collapsed into three broad levels
representing the respondents' assessment of the importance of each
factor in allocating RPM funds-most important, moderately
important, and least important. Table VI.1 shows the percent of
respondents, by service, that assigned these three levels to each
of nine criteria. Table VI.1: Ranking of Factors Affecting
Allocation of Funds, by Service Percent of bases ranking factors'
importance in allocation of funds Percent ranking factor
Percent ranking factor as Percent ranking factor Factor
Service as most important moderately
important as least important Mission priority and/or
Air Force 86
14 0 readiness Army
59 40 1
Navy 89
11 0 Marines
93 7 0
Facility appearance Air Force
4 62 34 Army
4 60 36 Navy
2 53 45
Marines 0
87 13 Low repair cost
Air Force 1
48 50 Army
5 63 32 Navy
4 61 35
Marines 0
64 36 Physical condition of facility
Air Force 36
63 2 Army
35 59 6
Navy 36
63 1 Marines
40 60 0
Type of facility Air Force
9 84 7 Army
10 82 8
Navy 12
81 7 Marines
7 87 7
(continued) Page 96 GAO/NSIAD-
99-100 Real Property Management Appendix VI Criteria for
Allocation of Funds Percent of bases ranking factors' importance
in allocation of funds Percent ranking factor Percent
ranking factor as Percent ranking factor Factor
Service as most important moderately
important as least important Type of deficiency
Air Force 22
75 3 Army
31 65
4 Navy 29
70 1 Marines
20 73
7 Base commander's priorities Air Force
34 63
3 Army 35
60 5 Navy
19 74
6 Marines 40
53 7 Service guidance
Air Force 4
61 35 Army
10 44
45 Navy 6
47 47 Marines
0 46 54
DOD guidance Air Force
7 38 55
Army 11
34 55 Navy
7 46 47
Marines 0
31 69 Source: Responses to question
19, GAO survey. Totals may not add exactly to 100 due to
rounding. These data suggest that importance of mission was the
most important factor in allocating RPM funds for the Air Force,
Marine Corps, and Navy respondents, with 86 to 93 percent ranking
this as "most important." No other factor came close to receiving
this high a percentage of ranking as the most important in
affecting funding allocation. However, only 59 percent of Army
bases, or about one-third less than the other services, assigned a
comparably high ranking to mission impact. Compared to the 59 to
93 percent assigned to mission impact across the services as a
most important factor, there was a narrower spread for the
importance assigned to the Department of Defense (DOD) guidance,
with 31 to 46 percent of bases ranking this factor as one of
moderate-level importance and 0 to 11 percent ranking it as the
most important. There was slightly more variation in the
importance of service guidance, with 44 to 61 percent of bases
ranking it as of moderate importance, and 0 to 10 percent ranking
it as most important. There was considerable similarity across
the services in terms of the ranking assigned to physical
condition as an allocation factor, with 35 to 40 percent of the
bases rating it as the most important, and 59 to 63 percent in
each ranking it as moderate. There Page 97
GAO/NSIAD-99-100 Real Property Management Appendix VI Criteria
for Allocation of Funds was less consensus on the importance of a
commander's priorities, with twice as many Marine bases citing it
as of highest impact compared to Navy bases (40 vs. 19 percent),
and 34 to 35 percent of Army and Air Force bases ranking it as
most important. Within each service, consistency on the rankings
of these criteria varied by the bases. For example, 35 percent of
Army bases cited physical conditions as most important, but 59
percent rated these as moderately important. Similarly, almost
twice as many Air Force bases assigned physical condition as a
moderate rank as those citing it as the most important (63 vs. 36
percent). In the Navy, 19 percent of the bases ranked a
commander's priority as the most important allocation criteria,
while 74 percent said it was moderate. In the Air Force, almost
twice as many bases ranked commander priority as moderately
important as those that assigned it the highest level rating (63
percent vs. 34 percent). On DOD guidance as a criterion, 11
percent of Army bases rated it as most important while 55 percent
rated it as least important. Similarly, among Air Force bases,
there was little agreement-7 percent ranked it as most important,
38 percent as moderately important, and 55 percent at least
important in allocating funds. In the Navy, 46 percent ranked it
as of moderate importance, and 7 percent ranked it as most
important. Differences in the Marine Corps were somewhat less
obvious on the rankings of almost every criterion. Page 98
GAO/NSIAD-99-100 Real Property Management Appendix VII Percent of
Value Measures for Estimating RPM Requirements
Appendi x VII The percent of plant replacement value (PRV) or
similar measures of facility value spent on real property
maintenance (RPM) are commonly cited by the Department of Defense
(DOD) and the services with regard to the adequacy of RPM funding
levels in the services. There is no fixed standard for defining
PRV, although most definitions are similar. The Office of the
Secretary of Defense (OSD) defines PRV as "the cost to replace the
current physical plant (facilities and supporting infrastructure)
using today's construction cost (labor and materials) and
standards (methodologies and codes)," and developed a standard
formula to calculate it.1 Perhaps the most widely cited percentage
spending guideline for RPM2 was recommended by the Building
Research Board of the National Research Council in its 1990
report, Committing to the Cost of Ownership- Maintenance and
Repair of Public Buildings. An appropriate budget allocation for
routine 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). . . . 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.3 1The OSD formula is: Scope (size of
a facility) x Unit cost factor (cost per unit to construct) x
Area cost factor (locality adjustment) x Inflation factor
(adjustment to the year in question) x 1.2 (overhead factor)
(standard inspection and overhead, design, contingency, supporting
facilities) = plant replacement value. Source: OSD (Installations)
Directorate of Analysis and Investment: "Plant Replacement Value,"
July, 1997. 2Harvey H. Kaiser A Foundation to Uphold (Alexandria,
Va.: APPA,) 1996, p. 46. See also, Level of Investment Study
Facilities and Infrastructure Maintenance and Repair, Civil
Engineering Research Foundation, August 1996, pp. 6, 3-7, which
notes that the Board's guideline of 2 to 4 percent of current
plant replacement value is "a widely-used benchmark . . . often
cited in the literature pertaining to building maintenance for
public agencies, colleges, and universities." (pp. 3-6).
3Committing to the Cost of Ownership: Maintenance and Repair of
Public Buildings, Committee on Advanced Maintenance Concepts for
Buildings, Building Research Board, Commission on Engineering and
Technical Systems, National Research Council, (Washington, D.C.:
National Academy Press, 1990) p. xii. Page 99
GAO/NSIAD-99-100 Real Property Management Appendix VII Percent of
Value Measures for Estimating RPM Requirements Current replacement
value is defined by the Building Research Board as "the amount in
current dollars it would cost to duplicate the facilities."4 This
value was described to us by a Federal Facilities Council official
as having the same meaning as PRV.5 The Council reported in 1996
that federal agencies were using two different methods to
calculate current replacement value.6 The Air Force uses a
percentage guideline as a benchmark against which to determine the
adequacy of its preventive maintenance spending, funding it at 1
percent of PRV. This was based on a 1989 DOD infrastructure
report that compared military RPM spending as a percent of PRV to
other governmental entities, major private corporations, and major
universities.7 The Air National Guard budgets RPM with a baseline
of 1 percent of PRV; that is, all installations receive no less
than 1 percent of PRV for annual RPM. The Navy has used a 2-
percent current plant value benchmark8 based in part on an April
1995 Center for Naval Analyses study that concluded that funding
at 2 percent of current plant value was required to arrest the
growth of backlog in Navy facilities, thereby sustaining them at
current conditions.9 The Navy tracks both the current plant value
as well as the plant replacement value of its inventory.10 DOD's
1997 Quadrennial Defense Review explicitly cited the percentage of
PRV spent by the services (1.16 percent) on RPM compared to that
spent by 4Federal Facilities Council, Budgeting for Facilities
Maintenance and Repair Activities (Washington, D.C.: National
Academy Press, 1996), Report Number 131, p. 10. 5Similarly, the
Civil Engineering Research Foundation stated that current
replacement value is "equivalent to the term PRV" and used the
terms interchangeably in its Level of Investment Study: Facilities
and Infrastructure Maintenance and Repair (Washington, D.C.: CERF,
Aug. 1996), pp. 3-6. 6Budgeting for Facilities Maintenance and
Repair Activities (Washington, D.C.: National Academy Press,
1996), Report Number 131, pp. 10-11. 7DOD, Renewing the Built
Environment, March 1989, pp. 11, 15, 31. 8Current plant value is
defined by the Navy as the cost of the facility's "original
acquisition, plus major improvements, inflated to current dollars"
(June 1998 briefing, p. 6). Similarly, current plant value is
defined by the Center for Naval Analyses as "the facility's
original construction cost plus the cost of its capital
improvements (e.g., a roof replacement)." Glenn H. Ackerman, Jino
Choi, and Ty D. Weis, The Backlog of Maintenance and Repair:
Preventing Its Growth and Measuring Its Impact (Alexandria, Va.:
Center for Naval Analyses,) Apr. 1995, p. 9. 9The Backlog of
Maintenance and Repair: Preventing Its Growth and Measuring Its
Impact (Alexandria, Va.: Center for Naval Analyses,) Apr. 1995,
p. 1. 10Base Operating Support Shore Maintenance and Repair
Trends, Navy, fiscal year 1996, p. 16 of 36, Inventory. Page 100
GAO/NSIAD-99-100 Real Property Management Appendix VII Percent of
Value Measures for Estimating RPM Requirements the private sector
as evidence that service RPM spending was inadequate,11 noting
that this level exceeds the nonmilitary sector in just one
category- county jails. Similarly, in a 1989 infrastructure
report, DOD recommended that the services spend 1.75 percent of
their PRV on maintenance and repair; this did not include
additional spending that would have been required to eliminate
repair backlogs.12 RPM experts, the National Aeronautics and Space
Administration (NASA), and OSD have identified multiple problems
with the concept of basing the level of RPM funding on a
percentage of estimated PRV or other comparable percentage
estimates of the value of facilities. (As noted, PRV is also
referred to as current replacement value or current plant value,
both of which calculate the value of a facility differently but
are comparable measures.) Percentage Measures Are The decision
to base RPM funding on a percentage of replacement value Not Based
on Condition (whether PRV or current plant value or an
equivalent) has certain drawbacks. For example, the NASA
facilities maintenance guidebook explicitly cites the Building
Research Board guideline, while cautioning that actual condition
assessments may lead to a different funding level. NASA
headquarters recognizes the annual funding level of 2 to 4 percent
of current replacement value recommended by the Federal Facilities
Council (formerly the Building Research Board), National Research
Council, as a reasonable funding target necessary to maintain
facilities in a steady-state condition at an adequate maintenance
standard until an independent analysis of facilities condition
assessment trends indicates otherwise.13 NASA's caveat is
noteworthy, for it is clearly the case that budgeting for
maintenance on the basis of a percentage of PRV is not based on
the actual condition of the facilities in question; rather, it
assumes that (1) some minimum amount-in this case, 2 to 4 percent
of PRV-is required to maintain a large inventory of facilities
annually and (2) the backlog is already so low that additional
spending is not required to eliminate it (a caution noted by the
Building Research Board in the original formulation). 11DOD,
Quadrennial Defense Review, Infrastructure Panel, "Installation
Support Task Force Final Report," February 24, 1997, Attachment 1,
Issue Paper, p. 1-1. 12DOD, Renewing the Built Environment, March
1989, p. 31. 13NASA: Facilities Maintenance and Energy Management
Handbook, section 1.2.4, issued Oct. 1, 1994. Page 101
GAO/NSIAD-99-100 Real Property Management Appendix VII Percent of
Value Measures for Estimating RPM Requirements A 1996 analysis of
the Board's 2- to 4- percent guideline by the Civil Engineering
Research Foundation noted that the Board's report recognized that
a percentage guideline cannot take into account factors relevant
for determining the RPM funding level for a facility. These were
* size and complexity, * current age, * condition, * use, *
historical or community value, * geographic location, * climate, *
mechanical and electrical technologies needed, *
telecommunications and security systems technologies needed, and *
criticality of building role or function.14 The problematic nature
of using a percentage of PRV (or other similar methods of
estimating facility value) was also noted by Federal Facilities
Council officials in an interview with us. They stated that the
Building Research Board's 1990 recommendation was based on a guess
at best. They said that the Board had decided that 1 percent was
too little and 5 percent was more than any (public) entity would
be allocated, so it set the level at 2 to 4 percent. However, in
the case of facilities with estimated PRV in the hundreds of
millions of dollars, 2 to 4 percent is a large range for annual
maintenance spending. Council officials said that as a result
they were reconsidering the Board's recommendation in an effort to
be more precise. OSD also identified a major drawback to
determining maintenance funding on the basis of a percentage of
PRV in a July 1997 analysis, noting that "as an allocation tool,
PRV has so far demonstrated only marginal utility." "Having an
accurate PRV sheds little light on the question of an appropriate
budget level for facilities, nor does it provide much assurance
about where specifically to spend facility dollars."15 Further,
even if percent of facility value was an accurate measure of RPM
needs-which it inherently is not- there is also the difficulty of
ensuring that the value of like facilities, both within and across
services, is calculated identically. 14Level of Investment Study:
Facilities and Infrastructure Maintenance and Repair (Washington,
D.C: Civil Engineering Research Foundation, Aug. 1996), pp. 3-7.
15"Plant Replacement Value," OSD (Installations) Directorate of
Analysis and Investment, July 18, 1997. Page 102
GAO/NSIAD-99-100 Real Property Management Appendix VII Percent of
Value Measures for Estimating RPM Requirements Although OSD told
us that each service had been told to use the exact same formula
to calculate PRV,16 it is also the case that "in the weeds, they
[the services] don't have standardized facility codes [to identify
similar facilities], and, as a result, they can have different
replacement costs for similar facilities." This means that
uniformity in such estimates is not ensured for similar types or
classes of facilities (e.g., barracks) across the services,
although the scope of variation is not known. OSD officials said
that the PRV estimating process is analogous to creating a recipe
for a cake, in which minor variations could occur from chef to
chef. However, an Army misunderstanding of OSD's PRV formula led
to a 20-percent underestimate of the Army's overall PRV in fiscal
year 1996; this was corrected (upwards) in fiscal year 1997.
Further, although OSD's formula states that the overhead factor
component of PRV should be a multiplier of 1.2, the Air Force
instructions to a contractor on developing PRV calculations,
provided to us in October 1997, state that "overhead markup was
established by the Air Force as 25 percent (1.25 multiplier)."
While the difference may not seem large, it is not consistent with
the OSD policy that the services are to calculate PRV using the
same formula and can result in significant differences in PRV
estimates when PRV totals billions of dollars. We did not attempt
to validate the accuracy of the PRV estimates of the services;
this was beyond the scope of this report. However, the Air
Force's PRV instruction on calculation reported that only 55
percent of the Air Force's estimated $204 billion (fiscal year
1996) PRV was acceptable; and that the Air Staff had determined
that the remaining 45 percent of the PRV data needed to be
reviewed and validated.17 The Air Force is actively addressing
the problem. In addition, the Air Force report notes that some PRV
estimates are unreliable because the real property records "do not
contain the level of detail required to accurately match an
appropriate unit cost to the real property record quantity" (p.
4). As an example, the report cites the fact that water lines are
only identified as a "generic type," but not the size or type of
water line, which it notes can range in cost from $7 per linear
foot to about $60 per linear foot for 24-inch cast iron pipe. The
report provides 16"Plant Replacement Value," OSD (Installations)
Directorate of Analysis and Investment, July 18, 1997. 17"Short
Term Analysis Report: Air Force PRV Model," Air Force, Oct. 1997,
p. 2. Page 103 GAO/NSIAD-
99-100 Real Property Management Appendix VII Percent of Value
Measures for Estimating RPM Requirements no estimate of the
potential range of inaccuracy in the PRV estimates for Air Force
facilities. Similarly, the Navy noted that while estimates for
many of its facilities are reasonable in some areas, such as
utilities and specialized research and development (R&D)
facilities, their accuracy is questionable. In addition, for
overseas installations in countries where the currency has
depreciated, the Navy said that there could be significant
reductions in PRV without any real reduction in facilities or the
cost of maintaining those facilities.18 For example, the PRV of a
Navy base in Japan dropped 25 percent from one year to the next
year because of changes in currency exchange rates. As a result,
allocating RPM funding on the basis of a percentage of PRV could
lead to large and unpredictable swings in allocating RPM at some
locations. Two entities that we identified as having what are
termed promising practices in facilities management (see app.
VIII)-those that appear to offer improvements over current ones-do
not use PRV or similar metrics as an RPM funding guideline. For
example, the Lawrence Livermore National Laboratory does not use
PRV in this way because no one can agree on estimating it, even
with specific guidelines. The Capital Needs Analysis Center does
not use it because it is not a measure of need. Further, basing
RPM needs on PRV can create incentives to overestimate the value,
since the larger the PRV, the greater the potential RPM funding.
Further, as OSD explained regarding PRV, the formula contains many
variables unrelated to size, for example, a shift in standard from
barracks with common latrines to private rooms would increase PRV
because replacement cost is computed at the new standard and
higher unit cost. In this case, facility PRV would increase even
though its size did not change. OSD also found that in some cases
DOD's real property databases are inadequate to precisely filter
the PRV estimates for these kinds of analyses. Similarly, OSD
stated that any DOD PRV is actually a blend of the PRV formula and
the cost of acquisition plus inflation because one-third of DOD's
physical plant is not covered by standard unit costs upon which a
PRV estimate can be made from DOD's PRV cost model.19 18Navy email
communication to GAO, July 10, 1998. 19"Plant Replacement Value,"
OSD, (Installations) Directorate of Analysis and Investment, July
1997, p. 2. The facilities not covered are mainly utilities and
service-unique facilities. Letter Page 104
GAO/NSIAD-99-100 Real Property Management Appendix VII Percent of
Value Measures for Estimating RPM Requirements Because PRV
measures structure value and is therefore not a measure of
condition, using a percentage of PRV or variations of it (e.g.,
current plant value) to estimate RPM spending would not determine
whether the resulting funding level is under, over, or equal to
the spending required to fix actual deficiencies. As a result,
using a percent of PRV or similar measures as a benchmark against
which to evaluate the adequacy of RPM spending is just one tool in
estimating RPM needs. In sum, in addition to the fact that PRV
measures structure value, not condition, there are other grounds
for caution in using a percentage of PRV to estimate RPM needs.
First, there can be problems with the reliability of the data that
go into the PRV estimate. Second, in the military services, the
lack of specificity in the property codes does not permit accurate
estimates of the cost of certain types of infrastructure. Third,
there is no clearly agreed upon standard by which to estimate PRV;
the Federal Facilities Council reported on two methods being used
by federal agencies. Despite OSD's directive specifying a PRV
calculation formula, variations in calculating PRV could occur
among hundreds of bases doing these calculations. Fourth, as the
Building Research Board stated, PRV does not take into account
multiple factors potentially relevant to RPM needs. Fifth, basing
RPM allocations on PRV creates an incentive to overestimate it, as
this would generate a calculated figure showing a need for higher
funding. In sum, PRV percentages should not be the only method
used to determine the funding level required to maintain
facilities. As the Navy noted, PRV and other comparable measures
are tools, each having unique limitations, and as long as this is
understood and are not viewed as a cure-all answer, they can be
useful.20 20Navy email communication to GAO, July 10, 1998. Page
105 GAO/NSIAD-99-100 Real
Property Management Appendix VIII Promising Practices in
Facilities Management Appendix VIII We identified promising
practices in facilities management among nonmilitary entities that
might be appropriate for use by the services. In this appendix,
we define promising practice; identify the sources of expertise
used to find promising practices among nonmilitary organizations
and other criteria used to identify potentially useful examples;
and discuss two entities with practices that appear to be
particularly worthy of consideration by the services for better
facilities management. In a 1991 report, we defined promising
practice as a practice that does not signify proven effectiveness
but rather the appearance of promise. The goal is not to judge
outcomes but to locate and describe specific initiatives that are
designed logically to work well and seem worthy of wider trial
involving sound evaluation.1 In terms of real property maintenance
(RPM), a promising practice would be one that makes it possible to
manage property more cost-effectively. In addressing the issue of
cost-effective RPM, a February 1997 Department of Defense (DOD)
paper on installations noted that ideally, DOD would like to
determine the minimum cost of operating each installation without
putting mission accomplishment at risk or sacrificing quality of
life.2 Sources of Expertise We identified entities
that might be using promising practices from on Promising
Practices * a review of the expert literature on facility
management and condition assessment systems; * interviews of
experts in facility management regarding what they considered
promising practices as well as their knowledge of entities that
have good reputations for such management or that were using or
systems with demonstrated effectiveness; * contacting a variety of
entities recommended by the experts and the literature to
determine how they manage their property and/or what they know
about practices that might be promising; 1Older Americans Act:
Promising Practice in Information and Referral Services (GAO/PEMD-
91-31 Aug. 1991), p. 2. 2DOD, "What Does the Future Hold for
Defense Installations? A White Paper for DOD Commanders," February
1997, p. 3. Page 106
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management * knowledge gained from
symposia sponsored by the National Research Council's Federal
Facilities Council3 -widely regarded as a source of expertise on
facilities management; and * criteria intended to meet the
objective of finding promising practices that might be used by the
military services. Criteria Used to Select The criteria used to
aid in selecting entities for interviews about potential Entities
for Interviews promising practices included the following: *S i z
e . The entities we contacted were generally large, in terms of
the number of buildings, square footage, and/or locations of
buildings that they control. * Consistency. We sought to find
condition assessment systems used across all the facilities and/or
sites of the same entity. * Duration. We looked for systems that
have been in place for 2 or more years so that there was a track
record of performance that could be assessed. * Documentation. We
looked for well-documented systems. * Life/Safety. We did not
seek data from entities that had serious life-safety/environmental
problems, such as structure collapses over 1997-99. Experts and
Expert Among the experts and expert entities we
consulted regarding promising Organizations
practices and entities using such practices were the following:
Consulted * Applied Management
Engineering, Virginia Beach, Virginia; * Association of Higher
Education Facilities Officers,4 Alexandria, Virginia; * Civil
Engineering Research Foundation, Washington, D.C.; * Richard
Coullahan, Senior Vice President, Parsons Brinckerhoff Energy
Services, Herndon, Virginia; * Edward R. Damphousse, Manager,
Consulting Services Group, R.S. Means Company, Inc., Kingston,
Massachusetts; 3The Council's purpose is to promote continuing
cooperation between federal and private entities of the building
community to advance building science and technology. It is a
continuing activity of the Board on Infrastructure and the
Constructed Environment of the National Research Council.
4Formerly named the Association of Physical Plant Administrators
of Universities and Colleges. The Association changed its name
but not its acronym. Page 107
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management * Marc M. Fagan, President, and
Thomas K. Davies, Executive Vice President, Vanderweil Facility
Advisors, Boston, Massachusetts; * Federal Facilities Council of
the National Research Council, Washington, D.C.; * Dr. Harvey H.
Kaiser, HHK, Syracuse, New York; * Logistics Management Institute,
McLean, Virginia; * Peter Lufkin, Principal, Economics, Whitestone
Research, Santa Barbara, California; * Private Sector Council,
Washington, D.C.; * Leif Steinert, Senior Consultant, WorkPlace: A
Bentley Strategic Affiliate, Littleton, Massachusetts; and * Eric
Teicholz, President, Graphic Systems, Inc., Cambridge,
Massachusetts. Entities Contacted for Taking the recommendations
of the experts and expert organizations as Information on
well as the expert literature, we contacted the following entities
to discuss their facility management practices. Management
Practices Universities George Washington University, Washington,
D.C. Harvard University, Cambridge, Massachusetts Massachusetts
Institute of Technology, Cambridge, Massachusetts University of
California, Facilities Management and Construction, Oakland,
California University of California, Berkeley, California
University of California, San Diego, California University of
North Carolina, Chapel Hill, North Carolina Corporations Hughes
Electronics Corporation Lockheed Martin Corporation Mobil Business
Resources Corporation The Boeing Company Trammel Crow Company
(Washington, D.C.) Page 108
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management Governmental Agencies and
Entities Army Health Facility Planning Agency, Falls Church,
Virginia Construction Engineering Research Laboratories,
Champaign, Illinois (Army Corps of Engineers) Department of
Energy, Washington, D.C. Facilities Management, Ronald Reagan
Building and International Trade Center, Washington, D.C. General
Services Administration, Washington, D.C. Lawrence Livermore
National Laboratory (LLNL),5 Livermore, California NASA,
Facilities Engineering Division, Washington, D.C. NASA, Goddard
Space Flight Center, Greenbelt, Maryland National Institutes of
Health, Division of Engineering Sciences, Rockville, Maryland City
of San Jose, California, Department of Public Works Nonprofit
Entities Capital Needs Analysis Center, Brigham Young University,
Provo, Utah6 Of these entities, we visited three-Lawrence
Livermore National Laboratory (LLNL); the Capital Needs Analysis
Center, which manages the property of the Church of Latter-day
Saints; and George Washington University. Fragmented
The knowledge base of facility management practices was
fragmented, Knowledge Base of with each expert or entity most
familiar with the practices of a limited number of institutions.
The entities that experts were most familiar with Promising
Practices were generally their customers for developing
facility management systems or those that had answered
questionnaires in various surveys. There was agreement that the
field of facilities management is exploring a wide variety of ways
in which to manage property. 5LLNL is a part of the University of
California that operates under a 5-year contract to the Department
of Energy. Since it is clearly not a university as generally
understood, we list it here with government entities. 6The Center
manages the property of the Church of Latter-day Saints. It is a
part of Brigham Young University but also supervises the
University's property management. Page 109
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management In our review of the facility
management literature we found no fixed standards for the methods,
criteria or frequency with which condition assessments should be
carried out. Nor, as the Federal Facilities Council noted in an
October 1998 study, is there a "single, agreed upon guideline to
determine how much money, is, in fact necessary to maintain public
buildings."7 (We also found no standard for nonpublic sector
buildings.) Federal Facilities We did find reasonably
widespread agreement in the literature and among Council's
Promising experts regarding the basic types of information
that should be gathered- such as interior square footage of
buildings and cost-to effectively Practices manage
property. In a 1998 study, the Council proposed four
characteristics that are key components for a condition assessment
and capital assets management program. Based on our interviews
with experts and the cited entities, we found that these four
components were a good summary of promising practices for facility
management. They are * a standardized, documented inspection
process that provides accurate, consistent, and repeatable
results; * a detailed, ongoing inspection of real property assets
that is validated at predetermined intervals; * standardized cost
data based on an industry-accepted cost estimating system to
determine repair and replacement costs; and * a user-friendly
information management system or process that prioritizes current
and anticipated maintenance and repair requirements to maximize
the use of resources and minimize the cost of irreversible loss of
service life.8 The Council's list appears promising for the
military because, if fully implemented, such practices would
address facility management deficiencies cited by DOD in 1997.
These deficiencies include * unavailable data, * incomplete data,
7National Research Council, Stewardship of Federal Facilities
(Washington D.C.: National Academy Press, Oct. 1998), p. 2. The
study was supported by a contract between the National Academy of
Sciences and the Department of State on behalf of the Federal
Facilities Council (p. ii). The National Research Council is
shown on the cover as the author, but the Federal Facilities
Council is the distributing agency. 8National Research Council,
Stewardship of Federal Facilities (Washington D.C.: National
Academy Press, Oct. 1998), p. 43. Page 110
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management * nonstandard data, *
inaccessible information, * lack of data integrity, and * lack of
performance measures.9 In addition, the literature and experts
agree that using the same criteria to assess facility conditions
across all the facilities of an entity is required to produce
meaningful comparisons from building to building or site to site.
Life-Cycle Principles of The last element of the Council's list
describes life-cycle facility Facility Management
management, which seeks to minimize the cost of irreversible loss
of service life by estimating the future point in time at which a
building component will likely fail and thereby scheduling
maintenance or replacement in advance of that point. It is a
methodology aimed at maximizing cost-effectiveness: building
"service life can be optimized through adequate and timely
maintenance and repairs."10 DOD's early 1990s Condition Assessment
Survey effort explicitly incorporated life-cycle principles, as
described in an OSD report: The system also automatically
determines whether a deficient assembly should be repaired or
replaced based on return on investment, and when replacement is
recommended, will identify which year the replacement should be
accomplished . . . The system automatically extrapolates the
estimated repair costs for the facilities not inspected to produce
a multi-year maintenance and repair plan, which is an eight-year
plan to schedule repairs and replacements.11 With a life-cycle-
based database, entities are able to project peaks and valleys of
future maintenance spending and to budget at a level that will
provide for facility renewal over a multidecade period. Figure
VIII.1 shows how life-cycle based costing can project a 50-year
budget for a building: 9"What Does the Future Hold for Defense
Installations? A White Paper for DOD Commanders," DOD, February
1997, p. 11. 10National Research Council, Stewardship of Federal
Facilities (Washington D.C.: National Academy Press, Oct. 1998),
p. 12. See also, Building Research Board, Pay Now or Pay Later:
Controlling Cost of Ownership from Design Throughout the Service
Life of Public Buildings (Washington, D.C.: National Academy
Press, 1991). 11OSD (Installations) Directorate of Analysis and
Investment, p. 6, undated but clearly written after April 1995.
Letter Page 111
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management Figure VIII.1: Life-Cycle
Model for a Single Building $18.00 Cost/SF $16.00 $14.00 $12.00
$10.00 $8.00 $6.00 $4.00 $2.00 $0.00 1 3 5 7 9
11 13 15 17 19 21 23 25 27
29 31 33 35 37 39 41 43 45 47 49
Ye ar s Note: Vertical axis shows estimated costs per square foot
in dollars; horizontal axis shows years, 1 to 50. Source: Army
Health Facility Planning Agency. Figure VIII.1 shows estimated
maintenance costs per year per square foot for a 50-year period
for the Army's Health Facility Planning Agency. The costs
portrayed are based on the life cycles of the components of the
facility in question (such as heating-ventilation-air
conditioning, roofing, or window frames). A database is
constructed using the known costs of how long a component lasts
and how much it costs to replace it (both parts and labor). The
Army Health Facility Planning Agency does not yet have a
systemwide condition assessment of all facility components, and it
does not have budget protection for its RPM funding. For example,
its fiscal year 1999 funding for preventive maintenance and
repairs was cut almost two-thirds and shifted to other programs.
Thus, it cannot meet its life-cycle based funding levels; the
forced migration of RPM funds hinders its life-cycle based system.
Page 112
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management With regard to assessing
facilities, the Army Health Facility Planning Agency is now
extending life-cycle component assessments to all locations. It
prioritizes repair spending on the basis of a combination of the
physical deficiencies that need to be fixed and the mission impact
to be addressed. Because its mission is to provide adequate health
care facilities to a specific population, it can make decisions
about repairs that benefit the greatest number of clients, and its
takes into account the health services available in a geographic
area from nonmilitary providers. Preventive
The Capital Needs Analysis Center emphasized the importance of
Maintenance and developing a database of
component life cycles based on actual inspections; it found that
almost all components last significantly longer Life-Cycle
Management than manufacturers' specifications. Through regular
inspection and careful monitoring of buildings and their
components, the Center can reasonably estimate when repairs should
be made or components should be replaced. These life-cycle
estimates can then be used to plan repair and maintenance budgets.
This, in effect, constitutes the essence of life-cycle
maintenance.12 These systems provide "an accurate prediction of
total future M&R [maintenance and repair] needs . . . necessary to
produce meaningful budgets. Condition prediction allows managers
to find out what, where and when facilities, systems and
components will need M&R."13 Regular preventive maintenance is an
essential component of life-cycle management. Figure VIII.2 from
the National Research Council's 1998 study illustrates how
maintenance extends the service life of a building. 12For a more
technical discussion, see Donald G. Iselin and Andrew C. Lemer,
eds., The Fourth Dimension in Building: Strategies for Minimizing
Obsolescence, Committee on Facility Design to Minimize Premature
Obsolescence, National Research Council (Washington, D.C.:
National Academy Press), pp. 14-25, and Eric Teicholz "Facility
Condition Assessment Technology," (http://www.
graphsys.com/articles), February 1999. 13Federal Facilities
Council, Budgeting for Facilities Maintenance and Repair
Activities, Report No. 131 (Washington D.C.: National Academy
Press, 1996), p. 25. Similarly, "The remaining life [of a
component] identifies when the next funding will be needed. The
life cycle suggests how often that item needs to be replaced over
a 40-year life cycle. The costs are set at the current
replacement cost . . . .the replacement cycle file . . . allows
use of a database to evaluate and project replacement needs."
Douglas K. Christensen, "Integrating Capital Studies Within
Physical Plant Operations," Capital Renewal and Deferred
Maintenance, Critical Issues in Facilities Management, No. 4
(Alexandria, Va.: 1989), p. 93. Page 113
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management Figure VIII.2: Effect of
Adequate and Timely Maintenance and Repairs on the Service Life of
a Building Optimum Performance Likely Aging (Without Renewal) With
Normal Maintenance ormanceerf Likely Aging
Minimum P Without
Acceptable Normal Maintenance
Performance Service Life Lost to Poor Maintenance irreversible
Design Service Life Time (not to scale) Source: Stewardship of
Federal Facilities, p. 13. As figure VIII.2 shows, a building that
is not adequately maintained will likely experience what amounts
to premature deterioration, generating costly repairs that could
have been avoided through timely maintenance. Among the entities
that we contacted regarding facility maintenance practices, we
identified elements from several that could be of use to the
military services. Useful Examples Two nonmilitary entities in
particular have facility assessment and budgeting processes
systems that appear to be particularly promising. These are the
Capital Needs Analysis Center, located at Brigham Young
University, Utah, which manages the facilities of the Church of
Latter-day Page 114
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management Saints (LDS) worldwide,14 and
the University of California's Lawrence Livermore National
Laboratory (LLNL), which uses a system based on one developed by
the Department of Energy (DOE). Both had all of the Federal
Facilities Council's listed elements in their systems, and both
used them across many of their facilities and locations. In
addition, as noted, the Army's Health Facility Planning Agency
bases its facility management system on life-cycle principles.
The Center has used life-cycle management since 1981 at its
universities and religious centers, and extended the system to
7,000 LDS chapels about 2 years ago. Online Databases
Both the Center and LLNL have their data online and therefore
accessible to managers. These centrally controlled, online
databases show the inventory of facilities and components,
including physical condition. The data can be "sliced and diced"
using multiple criteria-such as building type, component type and
age, and remaining life-cycle years. This permits almost
instantaneous generation of portraits of facility conditions and
comparative costs of life facilities. Reserve Funds
The Capital Needs Analysis Center is permitted by its management
to allocate projected RPM spending over a 4-year period, based on
its life- cycle cost projections, with any leftover funds from the
current year applicable to the remaining 3 years. This allows for
flexibility and application of life-cycle budgeting, since the
system is built on the concept that expenses will be higher in
some years than in others. Logically, therefore, expenditures can
be anticipated, but since they do not necessarily occur in the
forecast year, RPM monies that have been banked can then be used
when needed. The 4-year period is adjusted annually, based on
condition assessments and revisions of forecast component life
cycles and estimated future costs. Although this feature is not
available to government entities that operate on a single-year
budget, both LLNL and the Army HFPA use life-cycle costing and
budgeting for planning purposes. Common Rating System for
Although the Center and LLNL have separate systems, both apply the
Facilities principle of using engineering-based
facility condition rating systems to their own facilities. This
principle provides for a level playing field for the evaluation of
RPM needs and to allocation of monies among their facilities and
sites. The Center compares facilities of same or similar type and
shifts 14The Center manages approximately $30 billion in property
at more than 7,000 locations of chapels and a half dozen
universities and religious centers, at diverse locations (Provo,
Utah; London, England; Jerusalem, Israel; and Hawaii). Temples
were not included when we interviewed Center officials. Page 115
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management RPM spending to those locations
most in need. Center officials told us that the idea was to
maintain a common minimum standard; to do so, monies must be moved
from relatively physically adequate facilities to those not as
adequate. Center officials said that while there was initial
resistance from some entities, the change in the culture of
allocation had become widely accepted. We observed a number of
facilities at Brigham Young University, including the Missionary
Training Center. These facilities appeared to be in sound
condition and none were notably better than the others. Some,
such as dormitories, were quite spartan in terms of amenities.
Most of the observed facilities appeared to be both modest in
appearance and functional in nature. Repair Force and Validation
Another characteristic that both LLNL and the Center have in
common is Reviews reliance on craft
tradespersons or journeymen to perform daily maintenance and to
report on the conditions of buildings in the role of inspectors.
Both entities emphasized that using the expertise of their
tradespersons had met the goal of getting buy-in for their RPM
assessment systems from those that fix the buildings daily as well
as utilizing their practical expertise in estimating the remaining
life cycle of components. Further, both systems use multiple
layers of review and validation of identified repair needs to
ensure that conditions are rated consistently across multiple
facilities. Nonfungible RPM Monies At both LLNL and the
Center, RPM funds are treated as nonfungible; that is, they may
not be used for non-RPM purposes, and appeared to be fairly
strictly limited to repairs as opposed to renovations or upgrades.
Enhancements could be funded by individual schools at Brigham
Young University, but only from departmental funds; in effect, the
RPM allocation in a given year for special projects is set by the
Center, and any changes must be paid for out of the subentity's
own budget. Both LLNL and the Center have found that they can
reduce subjectivity in maintenance decisions by requiring programs
to pay for aesthetic fixes, while confining RPM spending to
addressing physical deficiencies. Thus, if a program wants new or
higher quality carpeting in its building(s), it must use program,
not maintenance funds, unless the existing carpeting is worn out.
Page 116 GAO/NSIAD-99-100 Real
Property Management Appendix VIII Promising Practices in
Facilities Management Maintenance Fee at LLNL Beyond the common
elements at LLNL and the Center, one factor at LLNL stood out as a
potentially useful tool in managing facilities-an annual charge
per square foot charge for maintenance, custodial, grounds care,
and garbage disposal costs. This charge was instituted in 1991;
it began at $1 per square foot and has since increased to about $6
per square foot. We were told that, of the total, about $2.10 is
for maintenance alone. The square footage charges are assessed
against program budgets; LLNL officials said that the charged cost
compares favorably to other entities' costs determined through a
1995 benchmarking study that compared 21 private and public
research entities along numerous dimensions of facility management
and cost.15 Similarly, LLNL meters utility use by programs and
charges that to the programs. According to LLNL facilities
management, the charge has had the effect of focusing the
attention of users on the maintenance cost of their facilities and
has, as intended, constrained the use of space. Through the
square foot charge, LLNL can maintain facilities at existing
levels; that is, it can prevent further increases in backlogged
repairs as a result of unfunded maintenance needs. LLNL stated
that while it does not have the money to address all existing
deficiencies, some are of low priority or are in buildings used by
programs that are being terminated. Therefore, it would not be a
good business decision, they said, to fix all the deficiencies in
every facility, given higher priority needs, or in buildings that
will no longer be used in some cases, once current funding ends
for certain programs. The LLNL practice of charging a fixed
maintenance/custodial fee per square foot could be considered by
the services. This fee has several potentially useful effects: *
it makes transparent the true costs of maintaining facilities; *
it can be set high enough to address RPM needs, precluding growth
of backlogged repairs; and * it creates an incentive to save, as
programs are charged for the space used. In contrast, the practice
of allocating on a basis of a percent of PRV or current
replacement value is not based on actual facility conditions and
15"Research Facilities Benchmarking Conference," sponsored by
Eastman Kodak and IBM, October 1995. No place of publication
listed. Provided to GAO by LLNL. We did not validate the data
reported in the study, which provides only a coded system of
identification of participating entities. Page 117
GAO/NSIAD-99-100 Real Property Management Appendix VIII Promising
Practices in Facilities Management rewards entities that claim a
high PRV.16 While some flexibility and ingenuity would be
required to administer a fee per square foot at military
installations, administering a maintenance fee would have the
inherent advantage of assessing costs across the full range of
facilities at a base while creating an incentive to use space
frugally. Assessment of such a charge, which is a form of
overhead, would not be unusual, since the military services'
working capital funds already incorporate such overhead charges as
integral to their billing system. Summary: Identified From our
interviews with the Capital Needs Analysis Center, Lawrence
Promising Practices Livermore National Laboratory, the Army's
Health Facility Planning Agency, the other entities cited above,
the relevant literature, the Federal Facilities Council list, and
our discussions with experts, we synthesized several principles
and processes that appear to constitute promising practices for a
cost-effective program of facility management. These are * a
detailed inventory of facilities and their components; * a
centrally controlled, online computerized inventory and inspection
database; * a common rating system applied to facilities with
standardized, objective, repeatable, engineering-based criteria to
evaluate physical conditions; * life-cycle principles of costing
and budgeting for planning; * trained personnel for inspections,
with multiple layers of review to ensure consistency and
validation; * nonfungibility of RPM funds; * allocation of repair
funds based on an identified need and prioritized according to
severity/impact of deficiency, which can take mission impact into
account; and * an annual space management fee based on square
footage used that covers RPM costs. 16The Army Health Facility
Planning Agency determined its life-cycle requirements prior to
converting them to a percent of PRV over a 50-year facility
replacement life cycle. Page 118
GAO/NSIAD-99-100 Real Property Management Appendix IX Objectives,
Scope, and Methodology
Appendi x I X As requested by the Senate Subcommittee on
Readiness, Committee on Armed Services, we examined (1) the
methodologies and criteria used by the military services to
determine the need for real property maintenance (RPM) of
facilities and to allocate available resources within each service
and (2) the methods and criteria used by other organizations that
are promising practices in facilities management and that
therefore may be appropriate for use by the services. Scope of the
Study We focused on the services' facilities around the world
for which RPM is funded from the operation and maintenance (O&M)
account. These facilities include barracks, administrative
offices, airfields and terminals, classrooms and other training
buildings, libraries, child development centers and dependent
schools. They do not include facilities funded by non-O&M RPM
accounts, such as revolving and management funds, the Defense
Health Program (hospitals and medical clinics), or military family
housing. Methodology To address our first objective, we
conducted analyses of DOD and service data. We also * interviewed
and were briefed by knowledgeable officials involved in real
property management from all the services and * obtained and
reviewed key RPM-related documents and RPM-related manuals for
each service, guidance, and other relevant reports and documents.
We also collected data for this objective through questionnaires
based in part on surveys related to RPM performed by other
professional organizations and information obtained from
independent experts, DOD, and service officials. Two versions
were developed-one for bases (installations) and one for major
commands in the Army and Air Force and the Navy-Marine Corps
equivalent, major claimants. During September-December 1997, we
pretested the installation questionnaire at 11 bases, 3 bases in
the Army and Air Force each, and 5 Navy bases. We also pretested
the command questionnaire at four major commands (2 Army, 1 Air
Force, and 1 Navy) for clarity, length of time of Page 119
GAO/NSIAD-99-100 Real Property Management Appendix IX Objectives,
Scope, and Methodology administration, and acceptability to the
respondents.1 Pretest versions were also submitted for review and
comment to each service point of contact (POC) (including the
Marines), and revisions were made based on the input from the POCs
and from the pretests. We wanted to ensure that the questions
would allow us to address the objectives and would make sense to
those we sent it to. The survey contained three groups of
questions on methods and criteria used to (1) assess facility
conditions, (2) estimate RPM budget and prioritization of needs,
and (3) allocate resources to those needs. The text of the survey
that was sent to installations can be found in appendix X. Two
questionnaires were sent; one to 530 military installations and
one to 41 major commands/major claimants worldwide (Air Force,
Army, Navy, and Marines) that are holders of RPM O&M funded
facilities and that are "parent installations" (subinstallations
are components of parent installations, and their property is
included as part of the parent installations). This was the
universe of bases in the services that hold and evaluate O&M RPM-
funded property, according to the service RPM headquarters
offices. Bases scheduled to be closed by the end of 1998 and
scheduled for realignment or closure under the Base Realignment
and Closure (BRAC) Act were excluded. Although we asked that the
questionnaire be returned within 10 days of receipt, it actually
required more than 6 months to achieve a return rate of over 80
percent from each service. Our service POCs helped by repeatedly
contacting bases and commands. The final tally of returned but
not necessarily completely answered questionnaires is shown in
table IX.1. 1Bases that were visited for pretests are listed at
the end of the appendix on each service. Page 120
GAO/NSIAD-99-100 Real Property Management Appendix IX Objectives,
Scope, and Methodology Table IX.1: Responses to GAO
Questionnaires Total number of Total returned
Returned as percent Service
questionnaires mailed to GAO
of those mailed Army bases
180 149 83 Navy
installations
132 126 95
Marine Corps installations
16 16 100 Air
Force bases
202 200 99 All
services
530 491 93 Major
commands/major claimants of all services
41 38 93 Note:
BRAC bases excluded from both mailed and returns. In addition to
the questionnaire, to determine the methods and criteria of the
services and their allocation of resources for RPM needs, we
visited installations and major commands of all the services (with
the exception of the Marine Corps, where we visited one base),
across the continental United States between July 1997 and August
1998. During those visits we * reviewed related property records,
documented backlog information, and the recorded deficiencies; *
visited facilities to observe their condition and deficiencies to
compare assessments to actual building conditions; * discussed the
evaluation methods/condition assessment process with the
raters/reviewers; and * interviewed installation engineering staff
as they showed us the deficiencies and documented additional
information when necessary. We also pretested and validated our
questionnaires at a number of these installations and major
commands/claimants. We visited the following offices, bases, major
commands, and claimants: Office of the Secretary of
Office of the Deputy Under Secretary of Defense (Installations)
Directorate Defense of
Analysis Investment, Arlington, Virginia Office of the Secretary
of Defense, Readiness Programming and Assessment Division,
Washington, D.C. Department of the Army
Office of the Assistant Chief of Staff for Installation
Management, Washington, D.C. Page 121
GAO/NSIAD-99-100 Real Property Management Appendix IX Objectives,
Scope, and Methodology Department of Public Works, Alexandria,
Virginia Installation Support Center, Alexandria, Virginia Bases
Fort Belvoir, (Military District of Washington), Alexandria,
Virginia Fort Bragg (Forces Command), Fayetteville, North Carolina
Fort Hood (Forces Command), Killeen, Texas Fort McPherson (Forces
Command), Atlanta, Georgia Fort Sam Houston (Medical Command), San
Antonio, Texas Fort Sill (Training and Doctrine Command), Lawton,
Oklahoma Rock Island Arsenal (Army Materiel Command), Rock Island,
Illinois Texas Army National Guard, Austin, Texas Major Commands
U.S. Army Forces Command, Fort McPherson, Atlanta, Georgia U.S.
Army Medical Command, Fort Sam Houston, San Antonio, Texas
Department of the Air Force Air Force Deputy Chief of Staff for
Installations and Logistics, Office of the Civil Engineer,
Programs Division, Crystal City, Virginia Air Force Deputy Chief
of Staff for Installations and Logistics, Office of the Civil
Engineer, Operations Division, Crystal City, Virginia Air Force
Real Estate Agency, Bolling Air Force Base, Washington, D.C. Bases
Alabama Air National Guard, Birmingham, Alabama Eglin Air Force
Base (Air Force Materiel Command), Fort Walton Beach, Florida
Maxwell Air Force Base (Air Education and Training Command),
Montgomery, Alabama Pope Air Force Base (Air Mobility Command),
Fayetteville, North Carolina Scott Air Force Base (Air Mobility
Command), Belleville, Illinois Seymour Johnson Air Force Base (Air
Combat Command), Goldsboro, North Carolina Tinker Air Force Base
(Air Force Materiel Command) Oklahoma City, Oklahoma Wright-
Patterson Air Force Base (Air Force Materiel Command), Dayton,
Ohio Major Commands Air Combat Command,
Langley Air Force Base, Langley, Virginia Air Force Materiel
Command, Wright-Patterson Air Force Base, Dayton, Ohio Air
Mobility Command, Scott Air Force Base, Belleville, Illinois Page
122 GAO/NSIAD-99-100 Real Property
Management Appendix IX Objectives, Scope, and Methodology
Department of the Navy Navy Budget Office,
Washington, D.C. Deputy Chief of Naval Operations (Logistics),
Facilities and Engineering Division, Crystal City, Virginia Bases
Fleet Combat Training Center (Chief, Naval Education and
Training), Atlantic, Dam Neck, Virginia Beach, Virginia California
Naval Air Station North Island (U.S. Pacific Fleet), San Diego,
California Naval Air Station Oceana (U.S. Atlantic Fleet),
Virginia Beach, Virginia Naval Air Station, Patuxent River (Naval
Air Systems Command), Lexington Park, Maryland Naval Air Station
Pensacola (Chief, Naval Education and Training), Pensacola,
Florida Norfolk Naval Shipyard (Naval Sea Systems Command),
Portsmouth, Virginia Naval Security Group Activity Northwest
(Naval Security Group Command), Chesapeake, Virginia Naval Station
Norfolk (U.S. Atlantic Fleet), Norfolk, Virginia Norfolk Naval
Shipyard (Naval Sea Systems Command), Portsmouth, Virginia Major
Claimants U.S. Atlantic Fleet,
Norfolk, Virginia Naval Air Systems Command, Patuxent River,
Lexington Park, Maryland Other Navy2
Public Works Center (Naval Facilities and Engineering Command),
San Diego, California Public Works Center (Naval Facilities and
Engineering Command), Norfolk, Virginia2 Commandant of the Marine
Corps Base Marine Corps
Base, Quantico, Virginia 2Navy Public Works Centers are not
installations; for this reason, they are here listed as "Other
Navy." They perform RPM on a reimbursable basis to Navy and Marine
Corps bases and major claimants. Page 123
GAO/NSIAD-99-100 Real Property Management Appendix IX Objectives,
Scope, and Methodology Nonmilitary Entities and To identify
promising practices in repair and maintenance of facilities that
RPM Experts could be of potential use to the
services, we contacted experts in the field of facilities
management to help identify nonmilitary entities with reputations
for high quality and innovation in facility management. These
experts were identified on the basis of their reputations in the
field and their publications, especially those by facilities
management expert organizations such as the Federal Facilities
Council of the National Research Council, the Logistics Management
Institute, and the Association of Higher Education Facilities
Officers (formerly the Association of Physical Plant
Administrators of Universities and Colleges). We also contacted
facility management experts at universities, private companies,
and government agencies and surveyed relevant literature. We
focused on large entities, as requested, because they are more
directly comparable to the military services, with thousands of
facilities around the world, than are single-location institutions
with just a few dozen buildings. Among the experts or expert
entities with which we spoke to identify promising practices in
facilities management, and/or from which we obtained reports, were
the following: Applied Management Engineering, Virginia Beach,
Virginia Association of Higher Education Facilities Officers,
Alexandria, Virginia Army Health Facility Planning Agency, Falls
Church, Virginia Building Owners and Managers Association
International, Washington, D.C. Capital Needs Analysis Center,
Brigham Young University, Provo, Utah Civil Engineering Research
Foundation, Washington, D.C. Construction Engineering Research
Laboratories, Champaign, Illinois Congressional Budget Office,
Washington, D.C. Richard Coullahan, Senior Vice President, Parsons
Brinckerhoff Energy Services, Inc., Herndon, Virginia Edward R.
Damphousse, Manager, Consulting Services Group, R.S. Means
Company, Inc., Kingston, Massachusetts Department of Energy,
Washington, D.C. Federal Facilities Council, Washington, D.C. Mark
M. Fagan, AIA, President, and Thomas K. Davies, AIA, Executive
Vice President, Vanderweil Facility Advisors, Boston,
Massachusetts General Services Administration, Washington, D.C.
Harvey H. Kaiser, Ph.D., HHK, Syracuse, New York and Reston,
Virginia International Facility Management Association, Houston,
Texas Lawrence Livermore National Laboratory, Livermore,
California Logistics Management Institute, McLean, Virginia Letter
Page 124 GAO/NSIAD-99-100 Real
Property Management Appendix IX Objectives, Scope, and Methodology
Peter Lufkin, Principal, Economics, Whitestone Research, Santa
Barbara, California NASA, Facilities Engineering Division,
Washington, D.C. NASA, Goddard Space Flight Center, Greenbelt,
Maryland National Institutes of Health, Division of Engineering
Sciences, Rockville, Maryland Private Sector Council, Washington,
D.C. Ronald Reagan Building and International Trade Center,
Washington, D.C City of San Jose, California, Department of Public
Works Leif Steinert, Senior Consultant, WorkPlace: A Bentley
Strategic Affiliate, Littleton, Massachusetts Eric Teicholz,
President, Graphic Systems, Inc., Cambridge, Massachusetts We
visited the Capital Needs Analysis Center, Brigham Young
University, Provo, Utah; the Lawrence Livermore National
Laboratory, Livermore, California; and George Washington
University, Washington, D.C. We spoke to facility management
officials from the following universities about their RPM
practices: Harvard University, Cambridge, Massachusetts
Massachusetts Institute of Technology, Cambridge, Massachusetts
University of California, Facilities Management and Construction
(Office of the President), Oakland, California University of
California, Berkeley, California University of California, San
Diego, California University of North Carolina, Chapel Hill, North
Carolina We spoke to officials from the following corporations
about their facilities management: Hughes Electronics Corporation
Lockheed Martin Corporation Mobil Business Resources Corporation
The Boeing Company Trammel Crow Company (Washington, D.C.) Other
Literature and In addition to the methods cited above to
identify promising practices, we Internet Searches attended
relevant conferences sponsored by the Federal Facilities Council,
and conducted an extensive review of the literature on facilities
management, using libraries, database searches, and the Internet.
We also Page 125 GAO/NSIAD-99-100
Real Property Management Appendix IX Objectives, Scope, and
Methodology obtained reports prepared by some private consulting
firms. A bibliography can be found at the end of this report. We
reviewed relevant legislation and legislative history with regard
to RPM issues over the past 45 years. We conducted our work
between May 1997 and March 1999, in accordance with generally
accepted government auditing standards. Page 126
GAO/NSIAD-99-100 Real Property Management Appendix X Our Survey
on Real Property Maintenance for Installations
Appendix X Page 127 GAO/NSIAD-99-100 Real Property Management
Appendix X Our Survey on Real Property Maintenance for
Installations Page 128
GAO/NSIAD-99-100 Real Property Management Appendix X Our Survey
on Real Property Maintenance for Installations Page 129
GAO/NSIAD-99-100 Real Property Management Appendix X Our Survey
on Real Property Maintenance for Installations Page 130
GAO/NSIAD-99-100 Real Property Management Appendix X Our Survey
on Real Property Maintenance for Installations Page 131
GAO/NSIAD-99-100 Real Property Management Appendix X Our Survey
on Real Property Maintenance for Installations Letter Page 132
GAO/NSIAD-99-100 Real Property Management Appendix X Our Survey
on Real Property Maintenance for Installations Page 133
GAO/NSIAD-99-100 Real Property Management Appendix X Our Survey
on Real Property Maintenance for Installations Page 134
GAO/NSIAD-99-100 Real Property Management Appendix X Our Survey
on Real Property Maintenance for Installations Page 135
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense Appendix XI Note: GAO comments
supplementing those in the report text appear at the end of this
appendix. Page 136 GAO/NSIAD-99-100 Real Property Management
Appendix XI Comments From the Department of Defense Page 137
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense See comment 1. Page 138
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense See comment 2. See comment 3. See
comment 4. See comment 5. See comment 6. See comment 7. See
comment 8. Page 139 GAO/NSIAD-
99-100 Real Property Management Appendix XI Comments From the
Department of Defense See comment 9. See comment 10. Page 140
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense See comment 11. See comment 11. See
comment 12. See comment 13. Letter Page 141
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense See comment 14. See comment 15.
Page 142 GAO/NSIAD-99-100 Real
Property Management Appendix XI Comments From the Department of
Defense The following are GAO's responses to the Department of
Defense's (DOD) comments, dated June 18, 1999. GAO Comments 1.
While DOD partially concurs with our recommendation, we note that
it has made no firm commitment to actually provide the funding to
formulate a comprehensive plan. We believe that DOD's original
commitment to an overall plan was sound and that it should be
funded as we recommended. 2. We disagree that uniform standards
are not feasible or desirable. Many types of facilities across
the services are essentially identical in function- barracks and
family housing, administrative offices, runways, classrooms,
commissaries, daycare centers, and so forth. We noted that DOD
has already demonstrated, in its $50 million development and field
testing of a Condition Assessment Survey (CAS) in 1994-95, that it
is feasible to develop a set of uniform standards to assess the
condition of similar types of facilities across the services.
Moreover, the Office of the Secretary of Defense (OSD) has
developed a cost factors handbook that condenses almost all
service facilities down to 400 category codes, making it possible
to compare them across services. If this can be done for cost
factors, we believe it can also be done for assessments of
physical conditions. For example, based on the 1994-95 CAS, and
the best RPM practices we identified, it appears feasible to apply
the condition assessment system used by any one of the military
services to all the other services for like facilities (e.g.,
barracks). Each service's system has strengths and weaknesses,
but none is inherently inapplicable to the common facilities of
the other services. Since each service has diverse facilities-but
many in common with the other services-it would not be difficult
to use just one of the services' systems for all the services. 3.
We note that each military service already defines "minimum
condition" in its rating systems. These definitions may draw upon
safety standards, and they can be quite precisely detailed to
eliminate confusion over the meaning of "minimum." For example,
exposed live wires in a building typically violates minimum safety
standards. The Army's Installation Status Report (ISR) system
uses detailed graphical representations of deficiencies to rate
virtually every type of facility; these are sufficiently specific
to be readily understandable. The Marines quantify condition and
readiness by using percentage cutoffs (if a runway cannot be used
a specified percentage of the time, it fails to meet the minimum
required condition). While we recognize that subjectivity is a
valid concern in administering Page 143
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense rating systems, the definitions can
be set reasonably precisely, as currently demonstrated by each
service's system. 4. While DOD states that defined minimums often
become maximums, this does not appear to be a sound ground on
which to avoid setting minimum standards or goals. If minimums
becoming maximums is indeed a problem, then DOD can exercise the
oversight to correct it. 5. While we recognize DOD's concerns
about "dictating" common standards, we believe that there is a
compelling need to set common standards for assessing facility
conditions, to permit the Congress to be able to evaluate requests
for RPM funding across the services. Since each service annually
rates, in one way or another, the condition of thousands of
facilities around the world, it is not clear why the like
facilities of each service (e.g., barracks) should be rated by
different systems that preclude meaningful comparisons of physical
condition. Specifically, the purpose of like facilities is
essentially the same. While impact on mission may vary in some
regards, depending on location and other factors, this has no
relevance to the actual condition of the buildings. (It can be a
factor in deciding how to prioritize RPM spending.) Personnel
need sound, decent facilities in which to live and work; the
condition of these facilities should be known by DOD based on
common criteria. 6. The configuration of barracks space is more a
quality of life than a repair and maintenance issue. As DOD
notes, changing configuration is part of efforts to improve
retention; a barracks with a central latrine could be in excellent
condition but would still be rated unacceptable given the standard
of 1+1 (two rooms, one bathroom). The services are permitted to
use both RPM and military construction funds to pay for such
changes in barracks space. We note that according to current
service estimates, no service will meet the 1+1 standard before
2013 at the earliest. The Marines will not meet the goal of
providing its lower standard (2+0, or two persons per room, one
bathroom) until the year 2035. In contrast, the other services
will meet the DOD 1+1 standard by 2020 (Army), 2013 (Navy), and
2019 (Air Force). 7. While DOD states that the standardized
condition assessment system it developed was too expensive to
implement, it never compared this system's costs to the costs of
administering the four separate systems in the services. Such a
comparison is necessary to be able to conclude that a single
system would be too costly compared to the four major systems
currently used. In addition, while DOD states that it needs a
"more positive Page 144
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense approach" that "provides sufficient
funding up-front to sustain facilities in good condition," it is
also the case that a single set of standards would permit
determining which facilities are in the worst condition and,
therefore, are in greater need of limited funds than others.
Without such cross-service standards, the Congress is unable to
prioritize among the competing requests. 8. We have noted the
development of the cost factors handbook by the OSD
(Installations) Directorate of Analysis and Investment, and we
regard it as an important step in the standardization of RPM data.
9. We believe that a computerized on-line database accessible to
both OSD and each service is essential to better and more
effective RPM management by DOD. Under current arrangements,
"data calls" or requests are issued by OSD in order to gather
basic inventory and budget data. We found that the data held by
OSD and the services on inventory and RPM spending often did not
match or could not be readily compared. Even the services'
headquarters RPM offices reported problems with obtaining basic
and reliable data from their components. In contrast, at both
Lawrence Livermore and Brigham Young University's Capital Needs
Analysis Center (CNA), all RPM inventory and condition data were
available immediately on-line to central management. Similarly,
the Army's ISR data are computerized and summary data are
available to headquarters and other facility management personnel.
These are management practices that clearly constitute a minimum
requirement for effective RPM management across DOD. A system
with common facility codes-which OSD is attempting to implement-
should be readily and inexpensively amenable to being kept on-
line. Comparisons of data are an essential component of RPM
management. Until such comparisons are made, DOD will not know
where RPM dollars are truly needed, where they are being spent, or
how much property it actually has. OSD has developed a system of
common facility category codes (published in DOD Facilities Cost
Factors Handbook, Version 1.0, Apr. 1999) that the services are
now reviewing, but have not yet agreed to use. The purpose of
this system is to compare service RPM and construction spending on
similar types of facilities (e.g., administrative space, classroom
buildings, and barracks) to, as DOD states, industry standards.
The data required to make these comparisons must be gathered and
inputted into a computer database if the effort is to be
manageable. Further, if "meaningful" comparisons are to be made,
it is essential that these cost and inventory data be computerized
and put on-line. Page 145
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense 10. Tracking how much each service
is spending on RPM by type of facility and by square foot (or
other common metric) will enable DOD to exercise effective
oversight. We note that OSD has published cost factors and is now
using them to assess the adequacy of each service's RPM spending
by facility type. We further note that meaningful evaluation of
the comparative costs of maintaining the same types of facilities
across services requires a high level of detail in order for major
commands to be able to compare expenditures of their bases.
Without consistent, comparable data for like facilities, no
meaningful evaluations are possible. With current databases and
budget data, it is not possible to readily compare RPM spending
per square foot for like facilities across services. OSD's new
facility category code system, including industry cost standards,
will have no clear purpose unless these costs-which are per square
foot-can be compared to what military installations spend. The
Army's Directorate of Public Works' inventory/cost per square foot
databases permitted such comparisons and were on-line; these
databases should be restored and expanded to include the other
services. 11. We appreciate the need for flexibility in funding
decisions, but in some cases this can lead to insufficient repairs
or cancellation of repair contracts. Migration of RPM funds is at
least partly responsible for the accumulation of $16 billion in
repair backlogs. This is an issue that DOD needs to address.
Although restricting the migration of RPM funds may reduce
flexibility, some of the organizations we reviewed found the
practice yielded beneficial results. Accordingly, we continue to
believe that the Department ought to consider the feasibility of
adopting some form of this promising practice. We have modified
our recommendation to that effect. 12. We commend DOD-more
specifically, OSD's (Installations) Directorate of Analysis and
Investment office-for the cost factors handbook they published in
April 1999. They are also investigating methods to put this
handbook on-line, which is essential to its effective use by
military personnel worldwide. However, given the costs per square
foot identified, we believe that many will exceed the level of
actual spending by the military services, rather than validate
current spending levels. For example, the Army spent $1.81 per
square foot for RPM for administrative buildings in the United
States and its territories according to the fiscal year 1997
annual summary issued by the Army's Directorate of Public Works
Page 146 GAO/NSIAD-99-100 Real
Property Management Appendix XI Comments From the Department of
Defense (the last year of publication available).1 In contrast,
OSD's cost factors show RPM spending for such buildings nationwide
at $2.46 per square foot, or 36 percent higher. Even taking into
account the (low) inflation over the past 2 or 3 years, this would
not narrow the difference measurably. Therefore, we question
whether OSD's cost factors will validate the levels of RPM
spending by the services. At the same time, it is exactly these
kinds of comparisons that DOD should be undertaking as part of a
more vigorous RPM oversight management program. 13. DOD states
that it has considered the "taxing" arrangement used by LLNL
(which assesses facility costs to activities based on the square
footage occupied, and total facility maintenance costs) and also
states that working capital funds were deemed unsuitable as a
funding mechanism for base operations. However, the Navy has used
working capital funds for many years at numerous locations and
continues to do so. At a minimum, DOD needs to reinvent the way
in which facilities maintenance is carried out across the
services, to ensure that repair spending is prioritized on the
basis of which facilities are needed, and of those, which need
repair the most. The U.S. Army's Health Facility Planning Agency
has developed metrics to prioritize such spending in line with its
mission. Its work might be taken as a potential model. 14. We
note that consistent training standards are common throughout the
military for virtually every activity it undertakes. Common
training for RPM personnel will help ensure consistency in the
assessment of facility conditions and RPM needs. Responses to our
questionnaire showed variations in training within the services.
Since training is widely understood as essential to competent job
performance and is generally treated as such for other activities
in the military, it is not clear why DOD objects to common
training for RPM. The Navy noted in its technical comments that
its guidance on RPM inspector qualifications "addresses such
things as technical trade background, formal education in theory,
experience in maintenance and repair operations, and skills in
inspection techniques, planning and estimating, maintenance
standards, and building codes." This guidance could well serve as
the model for a DOD-wide standard for all facility inspectors.
1The average for worldwide spending was $1.96 per square foot, or
about 8.2 percent more than for just the United States and
territories. See Department of the Army, Directorates of Public
Works, Fiscal Year 1997 Annual Summary of Operations, vol. II, p.
2 and p. 5. Page 147
GAO/NSIAD-99-100 Real Property Management Appendix XI Comments
From the Department of Defense 15. In examining the documents
associated with DOD's efforts in the mid 1990s to implement a
Condition Assessment Survey (CAS), we found that no cost
comparison had been made between the cost of the CAS and systems
used by the services to evaluate the condition of their
properties. Further, no evaluation was presented in the materials
we were provided by DOD of the costs versus benefits of such a
system. We were told by a number of persons involved in the CAS
effort that the services had no interest in a servicewide RPM
needs assessment system that would require common standards. Page
148 GAO/NSIAD-99-100 Real
Property Management Appendix XII GAO Contacts and Staff
Acknowledgments
Appendix XII GAO Contacts Kwai-Cheung Chan, (202) 512-3092
Dr. Sushil K. Sharma, (202) 512-3460 Dr. Jonathan R. Tumin, (202)
512-3595 Acknowledgments In addition to those named above, Mary
K. Quinlan, Lorelei St. James, Robert C. Mandigo Jr., Venkareddy
Chenareddy, and Raymond J. Wyrsch made key contributions to this
report. Page 149 GAO/NSIAD-99-100
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GAO/NSIAD-99-100 Real Property Management Page 159 GAO/NSIAD-
99-100 Real Property Management Related GAO Products Deferred
Maintenance Reporting: Challenges to Implementation (GAO/AIMD-98-
42, Jan. 1998). Defense Infrastructure: Demolition of Unneeded
Buildings Can Help Avoid Operating Costs (GAO/NSIAD-97-125, May
1997). Financial Audit: 1997 Consolidated Financial Statements of
the U.S. Government (GAO/AIMD-98-127, Mar. 1998). High-Risk
Series: Defense Infrastructure (GAO/HR-97-7, Feb. 1997). Older
Americans Act: Promising Practice in Information and Referral
Services (GAO/PEMD 91-31, Aug. 1991). (713021) Letter Page
160 GAO/NSIAD-99-100 Real Property
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