The Evolution of Facility Asset Management

This newsletter will detail the origins and evolution of Facility Asset Management in the US Government. This is an important and emerging discipline because the US Government owns and operates one of the largest and most complex facility portfolios in the world. This portfolio includes more than 3,000,000,000 square feet or approximately 280,000,000 square meters of building space. 

The origins of modern US Government Facility Asset Management policy are found in the Property and Administrative Services Act of 1949. At that point in time America was emerging from World War II. Prior to the war America was an industrialized country working its way out of the Great Depression of the 1930s. After the war, America was a world power, and with that came the responsibility of employing and managing vast, complex capabilities and asset portfolios. The Property and Administrative Services Act established new management authorities and expectations to include the management of real property assets and the built environment, which this newsletter collectively refers to as “facilities”.

Over the next half century, the US Government methodically and incrementally improved its ability to manage facilities. During this time improvements in management practices were made and specialty disciplines emerged, such as environmental management and construction management. Today, a new discipline is emerging, Facility Asset Management. This discipline, like others, is first recognized as an augmenting capability of existing management disciplines, such as part of facility management or program management. Now, given expanding complexity, capabilities, and expectations many organizations have acknowledged the need to leverage and retain dedicated Facility Asset Management expertise.

This is evidence of a well-recognized trend in organizational leadership. In the mid to late 1980’s entities saw the need for new thinking to solve large, systematic problems. The US National Academies of Science, Engineering, and Medicine (NASEM) report titled Strategies to Renew Federal Facilities covers this history in detail as it applied to federal facilities. It spans a 30+ year timeline summarized in Figure 2.1 - Significant Milestones in the Evolution of Facility Asset Management in the US Federal Sector, that summarizes notable events in the evolution of Facility Asset Management in the US Government. [Strategies to Renew Federal Facilities can be downloaded for free at: https://nap.nationalacademies.org/catalog/26806/strategies-to-renew-federal-facilities]

This story begins in 1988 with Fragile Foundations – A Report on America’s Public Works produced by the National Council of Public Works Improvements when it made headlines by calling attention to the risk of systematically underfunding public infrastructure. This report stated: “The quality of a nation’s infrastructure is a critical index of its economic vitality.” The report’s conclusion was: “the quality of America’s infrastructure is barely adequate to fulfill current requirements, and insufficient to meet the demands of future economic growth and development.” 

Two years later NASEM released a follow-up report titled Committing to the Cost of Ownership. This report was quickly followed by another report from the US Government Accountability Office (GAO) that placed Federal Real Property on a “High Risk” list of issues that could negatively impact US Government operations. As understanding of this problem increased, the American Society of Civil Engineers (ASCE) published its first, and now famous, national Infrastructure Scorecard in 1998 to increase awareness of risks caused by underfunding public infrastructure.

Simultaneously, and for related reasons, experts across the globe were gaining understandings on decision making behaviors of complex organizations. One place where these understandings took root was the International Organization for Standards’ (ISO) management system standards. This work gained focus and momentum with the introduction of ISO 9000 – Quality Management System standards in 1987. 

Today, ISO management system standards have matured to define core universal management system logic that has been applied to dozens of management disciplines. The one most relevant to this newsletter is ISO 55000 – Asset Management System standards. As highlighted in the first newsletter, leading applications recognize that asset management is not about “managing assets”, but about "management of value derived from and through assets".

As this understanding took hold, more and more disciplined asset management applications, implementations, and stories emerged all over the globe. Across the decades, the body of Facility Asset Management knowledge has evolved drawing from many, many sources. This newsletter will draw from this body of knowledge and relate it through a perspective that expands asset management beyond the care of assets to alignment with and achievement of organizational objectives. 

In this way, “management of value derived from and through assets” can be distilled down to decision models that frame investment choices in a return on investment analysis. The exciting part of this is investment choices are no longer limited to asset life cycle performance and financial analysis. As detailed in ISO 55010 – Guidance on the Alignment of Financial and Non-Financial Functions in Asset Management, asset management covers much more then just managing money and assets. In fact, asset management is all about outcomes, mission performance, and achievement of the things an organization and its stakeholders care about.

This is where the cutting edge of Facility Asset Management evolution is today, and this will be the focus of subsequent newsletter installments.

If this newsletter is helpful to you, please like and repost it. You can also find more information on the topic of Facility Asset Management by visiting www.assetmanagementpartnership.com. I welcome your feedback and input for future newsletter topics.

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