Office of Management, Budget and Evaluation

Office of Management, Budget and EvaluationOffice of Engineering and Construction Management

Real Property Asset Management

Eduard A. Dailide, P.E.Deputy Director, Facilities and Infrastructure

Office of Engineering and Construction Management

February 19, 2004


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DOE Real Property Portfolio

•Land 2.6 Million Acres (Yucca may add 0.75-0.5M)•Buildings

– Owned 127.0 million Gross Sq Feet

– Leased 24.0 million Gross Sq Feet

– Laboratories 30.5 million Gross Sq Feet

– Production 44.6 million Gross Sq Feet

– Office 17.47million Gross Sq Feet

•Total Replacement Value of Improvements $73.1 Billion(Not including land)

•Annual Facilities and Infrastructure budget over $3 billion


3

Perspectives

• Weakness in the acquisition and management of the Department’s real property assets have been highlighted by:

– Congress

– General Accounting Office

– National Academies of Sciences and Engineering

– DOE Inspector General


4

GAO Reports

• GAO-03-122, Jan 2003, places Federal Real Property as a High Risk Area due to:– Deteriorated and outdated property portfolio– Excess and underutilized inventory– Lack of quality facility data– No comprehensive and integrated planning

• GAO-03-100, January 2003, Major Management Challenges and Program Risks, Department of Energy– DOE faces major challenge in revitalizing

infrastructure


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Facility Data

Deferred Maintenance

$0

$1,000

$2,000

$3,000

$4,000

1998 1999 2000 2001 2002 2003

$M Total Area

0

20

40

60

80

100

120

140

1986 1987 1988 1991 1993 2001 2002 2003Year

M GSF

Actual Maintenance

$0

$200

$400

$600

$800

$1,000

1999 2000 2001 2002 2003

$ M

FY 2003 was funded at 1.2% of RPV


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Departmental Responses

Issued:• DOE Order 413.3, Program and Project Management for the

Acquisition of Capital Assets, October 13, 2000• DOE Manual 413.3-1, Project Management for the

Acquisition of Capital Assets, March 28, 2003• DOE Order 430.1B, Real Property Asset Management

(RPAM), September 24, 2003

Combined they:• Put the Department on the path to improve the acquisition

and management of its real property assets over the life-cycle.


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Real Property Asset Management

Integrated plan within a geographic area that supports Departmental and Program guidance


8

DOE Project Management Process

Range of

Alternative

s Cost Range

CD-0Approve Mission Need

CD-1Approve Alternative Selection and Cost Range

CD-2Approve Performance Baseline

CD-3Approve Start of Construction

CD-4ApproveStart of Operations or Project Closeout

CriticalDecisions

Operating funds/Program funds

PED funds PED funds Project fundsOperating funds/Program funds

Initiation Phase Definition Phase

Transition/Closeout Phase

Execution Phase

Performance MeasurementEarned Value (for projects over $20M)


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Ten Year Site Plans

• Ten Year Site Plan Features:– Integrates functional components of land use, facilities and

infrastructure acquisition, maintenance, recapitalization, safety & security, and disposal plans into comprehensive site-wide management plan.

– Links Facilities and Infrastructure resource requirements to Ten Year Site Plans to Mission.

– Requires assessment of past performance and projected future outcomes.

– Strengthens communication and accountability between programs / sites / and tenants.

– Requirements Driven.


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Communication of Requirements

DOE Strategic Plan&

Planning Guidance

Program Guidance

Site Office

Tenant Requirements

TYSPTYSP


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Integrated Facilities & Infrastructure Cross-cut

FY- 04 Ten Year Site Plan (May ’03 submission)

Direct and Indirect Maintenance

General Plant Projects

Excess Elimination

General Plant Equipment

F&I (replacement, re-cap, major renovationand major repair) Line Item Projects

New Mission Line Item Capital Projects [as governed by DOE 413.3]

Operational / Expense Projects

PY CY BY

PY = Prior YearCY = Current YearBY = Budget Year

The IFI Cross-cut budget reflects the resources associated with the items identified

Disposition Baseline

03 04 05 06 07 08 09 10 11 12 13

Resource Requirements


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Performance Measurement

• RPAM establishes three corporate outcome measures for real property asset management:– Asset Condition Index (ACI)– Asset Utilization Index (AUI)– Quarterly Maintenance Budget Execution versus Plan

• Norm for annual maintenance is 2-4% of Replacement Plant Value per the National Academies of Sciences and Engineering and industry standards.

• Project Management Order and Manual establish the Earned Value Management System as the performance measure for acquisitions.

• Programs and site managers should develop additional metrics to measure attainment of program goals.

• Ten Year Site Plans should establish requirements and expected outcomes for performance measurement.


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Organization

Project Assessment SummaryNumber

of Projects

Past CD-2

Green Yellow Red

% of Projects

with Green Status

% of $$ Value with

Green Status

NNSA 34 30 0 4 88% 98%

EM 35 29 3 3 83% 83%

SC 22 22 0 0 100% 100%

NE 2 2 0 0 100% 100%

EE 1 1 0 0 100% 100%

Total DOE 94 84 3 7 89% 87%

Summary Statistics

The DOE target for FY04 is that 90% of projects have “Green” status both by number and dollar value.


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Asset Utilization

Index

Asset Condition

Index

IFI Crosscut Maintenance Budget Execution

($M)

1st Qtr 2nd QTR 3rd QTR 4th QTR

Plan Act Plan Act Plan Act Plan Act

Program A 0.89 0.92 70.5 71.3

Program B 0.77 0.74 43.5 44.6

Program C 0.90 0.89 16.3 16.3

Program D 0.91 0.92 9.5 9.6

Program E 0.95 0.93 9.2 7.5

Total DOE 149.0 149.3

F&I Summary Statistics

SAMPLESAMPLE


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Facility Information Systems

Facility Information Management System (FIMS)• Department’s official real property asset database.

• Repository for real property inventory / condition assessment / maintenance data / LTS requirements.

• Feeder into Department’s financial reporting systems.

• Data source for TYSPs, management analysis, assessments, and outcome measures.


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Executive Order 13327Federal Real Property Asset Management

• Directs executive branch departments and agencies to:– Recognize importance of real property resources through

increases management attention.

– Establish clear goals and objectives.

– Improve levels of accountability.

• Establishes Federal Real Property Council at OMB.

• Requires agencies to develop and submit asset management plans.

• New Program intiative “ Federal Real Property Asset Management” added to President’s Management Agenda


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Executive Order Policy – to promote the efficient and economic use of America’s real property assets to assure management accountability for implementing Federal real property management reforms.

DOE Order 430.1B Objective – to establish a corporate, holistic and performance-based approach to real property asset management that links real property asset planning, programming, budgeting, and evaluation to program mission projections and performance outcomes. Order identifies requirements and establishes reporting mechanisms and responsibilities for real property asset management


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• Develop & implement agency asset management plan.

• Identify all agency real property

• Prioritize actions to manage real property inventory

• RPAM establishes corporate asset management plan linking assets to mission to outcomes. (1.)

• Facilities Information Management System (FIMS) is the corporate database for real property asset info. (4.b.(8).(a))

• Ten Year Site Plans (TYSP) must address how real property assets support DOE’s strategic plan and missions. (4.a.(3))

Executive Order RPAM


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Executive Order 13327Federal Real Property Asset

Management

• Life-cycle cost estimations

• Identify asset management performance measures

• Manage assets consistent with agency’s strategic and asset management plan

• Provide real property asset inventory

• Managers shall assess application of Value Engineering to achieve essential functions at lowest life-cycle costs. (4.f)

• Asset Utilization Index and Asset Condition Index are the corporate measures for real property asset management. (4.g)

• Ten Year Site Plans (TYSP) must address how real property assets support DOE’s strategic plan and missions. (4.a.(3))

• FIMS is the corporate database for real property asset info. (4.b.(8).(a))

Executive Order RPAM


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Challenges

• Successful implementation dependent upon:– Clear definition and communication of requirements

and expectations.

– Effective communication at all levels.

– Integration of multi-program requirements.

– Valid data.

– Qualified facility management staff. • Federal government employees.

• Contractor facilities managers.


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Backup Slides


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Site Manager• Geographic Area Coordination• Host for tenant Programs / Activities• Infrastructure Support Provider•TYSP Coordinator

LPSO CSO/PSO

Field ProgramOffice

Site

Mission / P

rogram /

Requirem

ents / Resources

TYS

P ( P

rogram / Infrastructure)

Req

uire

men

ts /

Res

ourc

es

TYSP (

Progr

am /

Suppo

rt)

Mis

sion

/ Pro

gram

HQ Coordination

OMBEOECM

Departmental• Policy / Oversight• PPB &E• Metrics

Infrastructure

Roles & Responsibilities

Documents

Office of Management, Budget and Evaluation