Fragile Foundations

The last article introduced the Foundational Thinking miniseries.?It explained how ISO 55000 standards represent a major milestone in asset management foundational thinking.?This next installment begins a chronology of how facility asset management evolved in the US Government sector.?This evolution goes from what National Academies of Science, Engineering, and Medicine’s (NASEM) most recent report, Strategies to Renew Federal Facilities, called “classical facility management thinking” to a new frontier in “asset management system thinking”. ?

This chronology begins with a National Council on Public Works Improvement report published in 1988 titled: Fragile Foundations – A Report on America’s Public Works.?By many measures this report was a starting point for modern facility asset management practiced in the US Federal Government today.?The report was a catalyst that got NASEM’s series of facility asset management reports rolling, the first of which, Committing to the Cost of Ownership, that will be covered next week.?Fragile Foundations was also an impetus for the US Government Accountability Office (GAO) placement of federal real property on its high-risk list in 1997 and it provided a template used later by American Society of Civil Engineer’s famous Infrastructure Report Card that was first published in 1998. ?

Fragile Foundations gained significant attention because it established a direct relationship between investments in public works and public benefits.?It framed that public infrastructure was an “inheritance from the generations of Americans who built before us” and that if not maintained America’s prosperity was at risk.?It recognized benefits from post-World War II investments made in the 1950’s and 1960’s were aging out and that this “cushion of excess capacity” was drawing down.?If this slow, but substantial degradation of physical assets was not addressed, the report warned of negative systematic impacts to the US economy and quality of life.

A synopsis of the strategy Fragile Foundations presented to improve America’s public works was as follows:

• A national commitment, shared by all levels of government and the private sector to increase capital spending,
• Clarification of the respective roles of the federal, state, and local governments in infrastructure construction and management to focus responsibility and increase accountability,
• More flexible administration of federal and state mandates to allow cost-effective methods of compliance,
• Accelerated spending of the federal highway, transit, aviation, and waterways trust funds,
• Financing of a larger share of the cost of public works by those who benefit from services,
• Removal of unwarranted limits on the ability of state and local governments to help themselves through tax-exempt financing,
• Strong incentives for maintenance of capital assets and the use of low-capital techniques such as demand management, coordinated land-use planning, and waste reduction and recycling,
• Additional support for research and development to accelerate technology innovation and for training of public works professionals, and
• A rational capital budgeting process at all levels of government.

As readers will see in upcoming articles, themes in these recommendations will be repeated in over the next three decades to include NASEM’s Strategies to Renew Federal Facilities released this year.?Common themes include need for:

• Clarity and alignment of roles, responsibilities, and commitment,
• Agile decision making to achieve cost-effective outcomes,
• Market forces to reconcile and balance risk, cost and benefits,
• Life cycle and total cost of ownership analysis in investment decision making, and
• The recognition that time is money and value can be generated by making things simpler.

The rationale for Fragile Foundations was after twenty years of lower investments in the 1970's and 1980's compared to post-World War II build-outs during the 1950’s and 1960’s the bill for capital renewal had arrived.? Fragile Foundations was a clarion call for increased capital inflows to maintain public works and continue the economic benefits and quality of life Americans had become accustomed to.

From Fragile Foundations, a new horizon for facility asset management emerged.?The foundational thinking contributions Fragile Foundations made was the level of sustaining investments in public works infrastructure is directly related to benefits or consequences in terms of the US economy and quality of life. It also made clear that the consequences of underinvestment would be direct, obvious, unavoidable, and potentially massive on a national scale.?

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Written by: James J. Dempsey | April 18, 2023

Helpful Links:

NASEM – Strategies to Renew Federal Facilities

https://nap.nationalacademies.org/catalog/26806/strategies-to-renew-federal-facilities

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