US Government Efficiency Failure: Built Infrastructure

This Asset Management Partnership (AMP) Newsletter begins a miniseries that covers how the US Government is failing to manage its built infrastructure and how this problem can be solved.

The US Government is failing in its fiduciary responsibility to efficiently manage its built infrastructure portfolio.? The US Government owns and operates one of the largest built infrastructure portfolios in the world.? This portfolio includes buildings, structures, and related site works.? This portfolio includes nearly 3 billion square feet of building space.? It is the place where Federal employees and military service members go to work and the place where people go to get the help and services that are provided by the US Government.? It includes offices, hospitals, research facilities, production facilities, power generating stations, schools, customer service centers, housing, and maintenance and storage buildings.

The US Government’s fiduciary failure is caused by poor laws and policies that have resulted in mismanagement, inadequate management controls, ineffective risk management, and a general lack of accountability.? This failure was recognized in a recent National Academies’ report titled Strategies to Renew Federal Facilities.? This report identified several points of failure.? The report does not blame these failures on the many good working professionals who manage these facilities.? Instead, it squarely identifies the source of the problem is a management system failure caused by ineffective and inefficient laws, regulations, and resulting policies.

The US Government spends about ~$70 billion dollars a year on facilities.? One of the signs of failure is the fact that the actual amount spent on built infrastructure is not known.? This is because the US Government accounting system does not enable asset-based accounting.? Instead, the accounting system, as defined by the Office of Management and Budget (OMB) Circular A-11, Section 83 – Object Classification (Schedule O), focuses on “obligations by the items or services purchased”.? This activity-based accounting structure does not enable asset-based cost consumption analysis.

OMB Circular A-11’s activity-based cost accounting approach supports Congressional oversight that ensures dollars are expended for authorized, appropriated purposes.? The problem that results from this is that it does not support analysis needed to determine if US Government assets are managed well.? The adage is, you cannot manage what you do not measure.? This budget accounting approach issue is only the tip of the iceberg.? There is more that happens within Federal policies that lead to a systematic failure of the US Government’s fiduciary responsibility to efficiently manage its built infrastructure portfolio.

This Asset Management Partnership (AMP) Newsletter begins a miniseries that will highlight the US Government’s inability to effectively and efficiently manage its built infrastructure portfolio.? The first half of the miniseries will plumb the depths on how this failure is a management system problem,? The second half of the miniseries will introduce management system solutions that can arrest and remedy this fiduciary failure.? This analysis will channel the line of thinking used by the authors of Strategies to Renew Federal Facilities that viewed this failure “as an asset management problem in need of an asset management solution”.

Next week this AMP Newsletter miniseries will begin to unpack this systematic failure. Later articles will assemble an answer on how the US Government can dramatically improve management of its ~3 billion square foot building portfolio that consumes ~$70B every year.

For more information and insight on asset management, management systems, and its relationship to facility / built infrastructure portfolio management subscribe to the Asset Management Partnership (AMP) Newsletter.

Written by: Jack Dempsey | November 26, 2024

AMP Newsletter #099

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