Do We Need A FCA Standard?
FCA, facility condition assessment services, have been around in various forms for decades, in the architecture and engineering world, under the term “programing.” However, the current discipline of Facility Condition Assessment has taken unique shape over the last 30 years, starting in the early 1990s with the advent of computerized data management. Architects historically referred to this service as “Programing” which was traditionally a phrase used to connote a summary? review of existing conditions that are intended to inform design studies, based on the assessment of existing conditions. To start any schematic design process, it is important to take stock of the existing infrastructure. If the infrastructure is a vacant lot, it is important to survey it and visit it to determine the overall condition. If the infrastructure includes a building, a walkthrough of the building is necessary to ascertain and document the overall condition of the many systems that make up the building’s infrastructure and operating systems.
The AIA defines programming as:
Architectural programming involves research and decision making that helps the architect and owner establish performance requirements and design criteria for the project. Programming can range broadly from identifying the project’s goals and objectives to particular elements, such as the precise characteristics of a space. It is an essential first step before the design phase and a critical communication tool throughout the project. A program guides participants from concept to construction documentation. The architect typically starts with a general draft at the beginning of the project, then expands and edits it into a final document.
There is currently no agreed upon definition of a “Facility Condition Assessment” because there is no standard guide. In the early 1990’s after the 1988 Savings and Loan Crisis, a new standard of care for “programing” was created to satisfy the risk management needs of the lending industry.? This standard of care was called “Property Condition Assessment” and an ASTM committee created a guideline called “Baseline Guide for Property Condition Assessment” E2018.? This PCA guide was specifically written for the lending industry to guide due-diligence for the purpose of financial risk management.? This guide was not intended for architects or engineers in pre-design, although it has been helpful as a general guide. Also, this guide was not intended for facility managers for building maintenance and capital investment, although, once again, it was helpful.
Here is a quick synopsis of the purposes for PCA and FCA services:
1.???? PCA Purpose – Financial Risk Management for Lenders and investors. PCAs are primarily used to describe just one building, not a portfolio of facilties.
2.???? FCA Purpose – Budget and Capital Planning as well as Maintenance Management through Asset Inventory. FCAs are primarily used for portfolio management, to tell the story of a large grouping of buildings and their systems.
Because there is a well defined guide provided by ASTM for PCA services, the scope of services requested for a PCA is pretty well defined and agreed upon. Clients know exactly what they are getting and why due to the accepted use of the ASTM PCA Guide.
On the other hand, FCA services are not well defined and therefore clients are often confused by how to write a proposal and how to judge the deliverables that they receive. In a recent FCA proposal for assessing a portfolio of municipal facilities, bids from contractors varied from $36,000 to $390,000 (explanation and discussion included at the end of this article.) For FCAs, there are many assessment options available for a client to choose from. Consultants, coming from the PCA (non-professional services approach) to A&E (architectural and engineering approach) have a much different concept of the end result. Here are some of the options available to clients who are seeking FCA services:
1.???? Method of Report Delivery (Varies based on ability to invest in software contracts)
2.???? Report Methodology (Varies based on speed and cost constraints)
3.???? Systems to be Assessed (Varies based upon client priorities)
4.???? Definitions of Condition and triggers for Further Study (varies based on risk tolerance of client)
5.???? Requirements for Specialty Assessments (varies based on depth of study of client)
6.???? Categories of Recommendations (Varies based on maintenance or budget focus of client)
7.???? Spatial assessment verification (varies based on quality of existing building data and organizational goals and priorities)
Different Uses of PCA and FCA Reports
PCA: PCAs are a risk management tool used by lenders and investors to accomplish 3 purposes:
For a Lender, the purposes can be summed up in the concept: Avoid default and maintain value. For an investor, the purpose also includes negotiation.? An investor is particularly interested in both immediate and short-term repair costs that can be negotiated as part of the purchase. PCAs can be divided into two categories, Refinance and Equity - Prepurchase.
FCA: A FCA is primarily used for institutional budget and maintenance priorities for an individual complex building or a portfolio of facilities. A FCA typically falls into two categories of purpose:
Presentation Differences:
PCA: PCAs are presented in a static format, with a report that is intended to be static and written to represent only one moment in time. The narrative format report is not intended to by modified or changed.? This report is typically put onto a shelf and referred to only as a point of reference when large capital projects are scheduled. A reserve table projects capital costs over a 10 to 20 year period. This reserve table is also not intended to be modified or changed during the loan term. This is also a reference document that sits on a shelf or in a computer folder.
FCA: FCAs are presented primarily in a uniformat-based data and cost-based, software format that is intended to allow manipulation and updating over time. The FCA is presented as a cost, condition report for a moment in time – like a PCA. However, the FCA is intended primarily for capital planning and budgeting. Unlike PCAs, the FCA provides reference data for quantity for each element. The FCA is intended to be more reliable than a PCA because it is presented with cost estimating, CSI format. This allows more transparency for the client to be able to defend and to understand.
Data Differences:
PCA: PCAs rely primarily on narrative reporting that sum up information into large bucket categories. For instance, systems that require capital investment by repair or reserves are included in the cost analysis. If a system will not require replacement during the loan term, no cost data or quantity take-off is required. The system can be summarily dismissed with minimal comment or discussion.
FCA: FCAs, on the other hand, are expected to quantify and cost nearly every system, whether or not it will require replacement during the reserve term. The reason for this is that the yearly cost of capital investment is intended to be annually compared to the full replacement cost of the building. Every system is included - so that, like a construction project, the full value of the building is documented. A factor called the FCI Index is the foundation of FCA reporting. The FCI, Facility Condition Index is intended to quantify risk from a capital investment perspective. The FCA is generally based upon CSI (Construction Specifications Institute) that is the basis for cost estimating.
Problems/Confusion between PCA and FCA:
Scoping the Assessment:
PCA - Data: The PCA is presented by assigning a description and condition to each system. Costs for a system is only pertinent if it will require replacement during a set term. If not, the system is generally described and dismissed. The information provided is only appropriate for a written report and is not intended to be loaded into a tabular software system.
FCA - Data: The FCA is presented as a cost estimating exercise that pulls together data on all building systems. Almost all of the data is intended to end up in a tabular format that can be loaded into software.
PCA – Condition: PCAs are primarily a risk management tool and only focuses on immediate and short-term costs as well as looking for cashflow bottlenecks that may occur if reserve funding is not properly managed.
FCA – Condition: FCAs are primarily focused on the condition of each and every system. FCAs are also focused on
Quantity of Data:
FCAs tend to have 10 to 100 times as much data than a PCA. Both provide schematic level costing but, as previously noted, a PCAs dismiss data that is not pertinent to immediate or cash flow risk management.
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Cost of Work:
Both PCAs and FCAs are commodity-based services. PCAs are priced by general features of a property including the overall size, location, and age. An equity (pre-purchase) report cost typically 2x the cost of a refinance report. An equity report is expected to be completed with industry replacement costs and with a keen eye for detail. On the other hand, debt (refinancing) PCAs are completed with best-case, acceptable costing that can often be 70% less than the industry costs. Less scrutiny and expertise is generally accepted by clients for refinancing reports since they are primarily an update of information on an existing client’s property.
The average cost of a refinance PCA may be $2,000. The cost for a pre-purchase PCA may be closer to $4,000 for the same report, using more industry knowledge for condition and costing.
An FCA report can also vary between various purposes chosen by the institution. Categories include:
1.???? Capital Planning – systems can be grouped and costed based on similarity of elements. The information is maintained in a software data base but may not be used for preventative maintenance and work-order tracking. This is less expensive and is primarily used for budget priorities.
2.???? Asset Inventory – systems are identified individually and bar codes can be applied to track the system in a dynamic fashion using a centralized software and hand-held devices. This is associated with a CMMS system that tends to be focused on preventative and work order maintenance.
FCAs are typically priced by SF. Some consultants will change fore for historic or older properties as they may take longer to access.
A FCA study done as an asset inventory may take twice as long and therefore the cost is twice as much than a capital planning report. This level of service may appropriate for a portfolio of buildings or for a complex building such as a hospital.
Buildings such as modular classroom building may be priced and assessed as a one-system element. The Cost of a complex but small single asset can help to reduce the overall project cost.
Problems with Data Delivery Expectations
1.???? Inconsistent system identification
2.???? Unregulated EUL definitions
3. Disparities in quantity take offs
4.???? Unregulated Cost models
5.???? How is difficulty assigned?
6.???? How is additional study assigned?
7.???? How are repairs based on system further study quantified?
8.???? What are condition definitions?
9.???? What is the definition of short term and near term?
10.? How is de-minimis costs defined?
11. ? How and why can a system be deferred?
12.? What financial metrics and organization of data is required?
13.? Can a client create summary reports of metrics and recommendations easily using the software provided?
?
If you went into three car dealerships, asked for the same specifics for the car you are looking for, and came out with offers ranging from $35,875 to $389,000, I expect that you would have a lot of questions and concerns.
This scenario happened last year in the Facility Condition Assessment (FCA) consulting industry.? A state put out an RFP for FCA reporting for X?buildings. The bids came back ranging from $35,000 to $390,000. How does this happen?? I can only imagine how difficult it must have been for the evaluators, likely not expects in the FCA practice, to evaluate such widely different responses.
In a previous newsletter, I asked the question, who is qualified to do a FCA report? My questions this week, is who writes and reviews FCA RFPs and proposals and why are there such a discrepancy in fee responses?? I often responded to multiple FCA RFPs per week. On almost every RFP, I identify significant scope related questions that I will submit to the potential client in hopes of clarifying the scope of work before submitting a fee proposal. Clearly articulating the scope of work is critical to getting appropriate fee proposals that you can trust to be accurate, cost effective, reliable and comparable.?
As I talk to facility professionals at conferences, at pre-bid meetings, and in other professional associations, I find that there is quite a bit of confusion about what information is necessary to piece together a well written RFP for FCA reports.? Beyond that, there is a level of coordination and cooperation that often needs to be created by organizations, institutions, and campuses who are competing for the same pot of money. If the scope of work, application of definitions, organization of priorities, and opinions of probable cost basis are different between competing institutions, it only makes it harder for funding agencies to set priorities and to release funding.
Right now, there is a general reliance on the ASTM E2018-15 Baseline Guide for Property Condition Assessments as the foundational industry guide for FCAs. The problem is that the PCA Guide was created to service the lending industry and the specific risks and requirements therein. There is currently no user guide that is specifically written to address capital planning. I have worked on the ASTM E2018-15 committee to draft changes to the original guide. I have also worked on an ASTM committee to draft guidelines for ADA audits. I wrote the committees “argument” for Why We Need a Standardized Approach to ADA Assessments. For years, the procedures used to do ADA audits varied widely among consultants, as did the end products that were delivered. Over the years, there has been a similar problem with FCA reports.?
Getting back to the wide disparity of fees offered for the state sponsored FCA project, the variation of $360,000 in fees between potential FCA service firm, highlights this issue of why we need a FCA Industry Guide.
If you are interested in participating in this FCA ASTM committee from the perspective of a consultant or a client the topic, please reach out to me. Also, if you have comments or questions about FCA services, send them my way and I will introduce them to the committee.
For more information, please contact me at
KChristiansen@bpl-enclosure
Kyle Christiansen, Director of Facility Consulting
The content in this Newsletter is the product of Kyle Christiansen alone, and not BPL-Enclosure.
Infrastructure Asset Management | Building Surveyor
1 个月Great article Kyle!
President, Building Science Guy
2 个月Kyle Christiansen, RA - as we have discussed, one of the potential added benefits that can be offered with the FCA approach that you are presenting is the ability to bring horizontal infrastructure into the overall package. In previous work on which I have been involved we assessed roads, storm & sewer, and district energy infrastructure do that the portfolio owner had a fully integrated data set and series of options for improvement that reflect comprehensive solutions. I encourage the ASTM committee to consider how to include this approach.
Corporate Asset Management Advisor
1 年I have been involved with FCA work for the better part of 25 years, on both sides of the table as the client requesting services and as the consultant providing them. Definitely we need to standardize how the info going into an FCA is determined. Set standard definitions and methods for establishing the condition of individual asset types based on quantitative criteria. I've seen examples where one person's good is another person's poor. As more and more organizations adopt EAM and CMMS systems the need for consultants to provide data back in a format that is easy to upload to those systems is becoming essential. Standardized data formatting would help. Experience and training or the lack of it is a major concern. I think FCA work is normally a side business for most companies and many don't really understand what is involved. Junior staff without a lot of experience get sent to the field because they're cheaper to bill, the RFP price is lower and so the chances of winning the work are improved. But the negative side is often poor quality or sometimes useless information coming back.?We've received deliverables that were so poor on quality they were never used. For credibility of the FCA industry all of this needs to change.
Insightful read on the evolution of FCA standards—looking forward to seeing how this discussion shapes the future of industry practices.
Construction and Commercial Real Estate Consultant
1 年One thing that has always been a question is why the reports whether they be PCA or FCA are not outlined using CSI or Uniformat organization standards. It seems that as this work is intended to be bid out to the market it only makes sense that it follow overall construction industry standards.