Condition Assessment: The Advantage of Decision Support

Real property professionals are often faced with a quandary when it comes to budgeting for operations and maintenance of the real property portfolio under their care. Fiscal responsibility and sound budgeting require broad portfolio condition assessments. On the other hand, the cost of conducting such assessments is seen as a huge hit against an agency's increasingly limited operating budget.

Is there any way to reconcile the need for comprehensive real property portfolio condition assessment and the need to control operating expenses? This article provides an overview of generally accepted approaches for condition assessment, and considers the advantages of a systematic decision support procedure to reduce the cost of this important aspect of real property asset management.

Assessment methodologies - an overview

There are four general methods of conducting condition assessments as a means of determining the budgets required for maintenance operations and capital improvements for a real property portfolio. Listed in order of decreasing cost, these include:

• Capital Project Assessment, in which teams of engineers and technicians inspect a facility from top to bottom, including all critical systems;
• Criteria-Based Assessment, in which engineering consultants interview on-site facility managers based upon a standard and templated set of criteria, standards or metrics;
• Statistical Modeling, in which condition assessments for a sample of the real property portfolio are then applied across the entire aggregated portfolio as an average (usually by facility type or class); and
• Occupant-Based Guided Self-Assessment, in which the occupants of the constructed assets are trained to self-assess buildings using templates tied to criteria and metrics.

Large portfolio managers more readily embrace statistical modeling and occupant-based guided self-assessments because they generate consistent quality information for budget formulation at a reasonable year-over-year cost. An additional benefit of these assessments is that they can be conducted in a controlled manner under short time frames. Because of the inherent abstraction in these approaches, however, they do not eliminate the need for more detailed engineering-based reviews of specific buildings being considered on a line item basis for major capital improvement projects.

Obviously, there are advantages and disadvantages for each process. The best management strategies are those in which more than one model is used to address specific needs. Based upon the characteristics of the portfolio, low cost-per-touch solutions repeated frequently provide good measures and forecasts for budgeting and performance. By comparison, in-depth detailed assessments of individual buildings or small groups of buildings is important prior to undertaking renovation design or upgrades of major systems, but those costs do not need to be applied unilaterally across the portfolio at large.

A lesson from the military

While it is true that better spending and management decisions are based on broad portfolio condition assessments, how can agencies control the high costs normally associated with the collection of data for such assessments? In this case, it's valuable to take a lesson learned first from the military.

The military services conduct condition assessments on a regular recurring basis. Even the Army, which maintains the largest real property portfolio in the world, is able to conduct annual assessments reasonably easily, with effective quality results and within controllable costs.

They are able to do so because the military - and the Army in particular - has for several years looked at portfolio-wide condition data as a significant contributing element in decision support systems used to manage and plan for facility planning, use and sustainment. The Army considers its capability and related systems to be business-critical tools, helping to improve management and decision-making while managing costs within appropriation levels.

This portfolio management decision support capability succeeds in part because it is refreshed with condition assessment data provided on a regular basis for all buildings and structures. Data included for analysis involves a validated inventory, condition assessments, facility requirements based on mission, workforce stationing, a series of criteria and cost factors and construction programs.

Reliable decision support requires a balanced view and analysis of all of the above data simultaneously through a system (IT solutions tool) that provides both consistency and reliability. Because the data will be aggregated with other sources, having reliable validated condition assessment information is critical.

Condition assessments do not necessarily require a huge recurring investment. When viewed as a component of a broader decision support solution that integrates other critical information, the data compiled in condition assessments - regardless of which of the four approaches described above is used - can be invested in and managed within predictable cost thresholds while maintaining high value and utility.