SEASONS OF THE ASSET: FIMS AND THE LIFECYCLE Ivan Graff, P. E. Office of Asset Management May 7, 2015

AGENDA  Establishing Sites and Areas  Planning to acquire an asset  Establishing an Asset Record  Maintenance costs  Operations costs  Additions, renovations, and alterations  Status, usage, and utilization assessments MAY 7, 2015FIMS / REAL ESTATE TRAINING 2 Planning Sustainment Assessments

MAY 7, 2015FIMS / REAL ESTATE TRAINING 3 NOT ON THE AGENDA Construction, Excess Screening, Clean up, and Disposition

ESTABLISHING A SITE SOURCE: FIMS USER’S GUIDE SEC. III(D)  Adjacent or co-located assets comprise a site  Separate sites: Intervening privately owned or controlled property  Roles:  Site: Makes a request  FIMS System Administrator: Creates the site  Field Office: Keep apprised  Might a site –  Have no land?  Have only structures?  Have no DOE owned or leased assets? MAY 7, 2015FIMS / REAL ESTATE TRAINING 4 one site two sites

ESTABLISHING AN AREA SOURCE: FIMS USER’S GUIDE SEC. III(D)  Groups multiple related assets of any property type  Established at the convenience of a site or field office  Assets may reside in disparate locations  Roles:  Site: Makes a request  FIMS System Administrator: Creates the area(s)  Field Office: Keep apprised  Might an area –  Have no land?  Have only structures?  Have no DOE owned or leased assets? MAY 7, 2015FIMS / REAL ESTATE TRAINING 5 Example Relationships: Geography Organizational Mission Function Age Example Relationships: Geography Organizational Mission Function Age

MAY 7, 2015FIMS / REAL ESTATE TRAINING 6 Anticipated Acquisition Information Module (AAIM) Required for offices and warehouses with an anticipated beneficial occupancy in CY  CY + 3

MEANS FOR ACQUIRING REAL PROPERTY DOE “Owns”DOE “Leases” 1. Line Item Construction 2. General Plant Projects (GPP) 3. Institutional General Plant Projects (IGPP) 4. Purchase of Existing Property 5. Transfer from Another Agency or GSA 6. Gift or donation 7. Exchange of Existing Property 8. Exchange for Services 1. Operating Lease (C,E, D) 2. Permit (P) 3. Occupancy Agreements (G, L) 4. Third-Party Financing (C,E, D) 5. Energy Savings Performance Contracts (ESPC) * 6. Capital Lease (C,E, D) 7. Grants ** MAY 7, 2015FIMS / REAL ESTATE TRAINING 7 For B, T, and S: C = Contractor Lease E = Contractor License D = DOE Lease G = GSA Owns L = GSA Leases P = Permit * = Rent to Own? ** = Contractor Owned? Grant Recipient Owned?

INITIAL ACQUISITION COST OF OWNED BUILDINGS AND TRAILERS MAY 7, 2015FIMS / REAL ESTATE TRAINING 8

BUILDING AREA OF OWNED BUILDINGS AND TRAILERS, BY ACQUISITION YEAR MAY 7, 2015FIMS / REAL ESTATE TRAINING 9

COUNT OF OWNED BUILDINGS & TRAILERS BY ACQUISITION YEAR AND LEVEL MAY 7, 2015FIMS / REAL ESTATE TRAINING 10

HOW MANY OWNED BUILDINGS DID DOE ACQUIRE IN FY 2010? MAY 7, 2015FIMS / REAL ESTATE TRAINING

HOW MANY OWNED BUILDINGS DID DOE ACQUIRE IN FY 2010? MAY 7, 2015FIMS / REAL ESTATE TRAINING FIMS Snapshot  Color bands correspond to different DOE programs

ESTABLISHING AN ASSET RECORD SOURCE: FIMS USER’S GUIDE SEC. III(D)  Buildings and Real Property Trailers  Beneficial occupancy  New lease, license, or permit executed  Land  Paid in full or declaration of taking  New lease or ingrant executed  Structures  Put into service  New lease, license, or permit executed MAY 7, 2015FIMS / REAL ESTATE TRAINING 13 Financial Management Handbook, Chapter 10 “The acquisition cost of construction work in progress should be closed to the completed PP&E categories when the equipment and facilities are placed in service (that is, beneficial occupancy) even if the entire project is not financially completed.” [Plant and Equipment Changes, (1)(h)(1) ] “The cognizant project manager should provide an allocation to the appropriate asset type codes for any project in which the property has been accepted for beneficial occupancy, even though the final cost report is not complete.” [FIMS-STARS Reconciliation, (2)(l)(5)] Financial Management Handbook, Chapter 10 “The acquisition cost of construction work in progress should be closed to the completed PP&E categories when the equipment and facilities are placed in service (that is, beneficial occupancy) even if the entire project is not financially completed.” [Plant and Equipment Changes, (1)(h)(1) ] “The cognizant project manager should provide an allocation to the appropriate asset type codes for any project in which the property has been accepted for beneficial occupancy, even though the final cost report is not complete.” [FIMS-STARS Reconciliation, (2)(l)(5)]

ESTABLISHING STRUCTURE RECORDS MAY 7, 2015FIMS / REAL ESTATE TRAINING 14 Background on Term: DOE O 430.1B – An example of a “Real Property Asset” DOE FMH Chapter 10 – Addresses utilities only, defined by example. FRPP Data Dictionary 2015 – A type of real property defined only by array of use codes What’s the Problem?  How would an auditor know if a structure record comprises one or multiple similar property units? Best Practice: Where units ≠ “each” Where apparent bounds & limits Magnitude of the record = the individual physical asset’s observable size

1,600 Sq. Yards ESTABLISHING STRUCTURE RECORDS MAY 7, 2015FIMS / REAL ESTATE TRAINING 15 1,600 Sq. Yards What My Site Has: 1,600 Sq. Yards FIMS Best Practice: 4,800 Sq. Yards In FIMS Now:

ESTABLISHING LAND RECORDS MAY 7, 2015FIMS / REAL ESTATE TRAINING 16 Each land record should reflect the parcel’s: Ownership and acquisition method Legal description Degree of development Stewardship requirements (e.g., security) Predominant use Level of utilization Each land record should reflect the parcel’s: Ownership and acquisition method Legal description Degree of development Stewardship requirements (e.g., security) Predominant use Level of utilization Land questions: How much of my site do I actively manage? Which parcels seem ready for disposition or reuse? Where is the greatest concentration of offices? Land questions: How much of my site do I actively manage? Which parcels seem ready for disposition or reuse? Where is the greatest concentration of offices?

SUSTAINMENT MAY 7, 2015FIMS / REAL ESTATE TRAINING 17

MAY 7, 2015FIMS / REAL ESTATE TRAINING 18 Expense Type Typical of Activities that...Examples Operations Support the use, but do not affect the function or longevity, of systems or assets Cleaning Grounds care Snow removal Waste disposal Utilities Pest management Safety equipment Security Audio / visual Material handling Fleet management IT / telecom Maintenance Impact systems or assets AND Occur on a schedule OR Address unexpected or impending failures Periodic or occasional testing and inspection Routine repair or replacement of parts including belts and lamps Adjustment; lubrication; painting; or resurfacing Betterments Upgrade, expand capacity, renew, or introduce, in whole or in part, systems or facilities Replacing a sliding door with a roll-up door Increasing electric service to a building Constructing a storage structure for use by occupants in an existing adjacent building Note: Underlined operations example expenses tracked in FIMS

 DOE Order 481.1C  The Economy Act (1932)  Purpose: reduce government spending  Applies –  To all federal agencies and only federal agencies  When an agency has funds in hand  When recipient -  Has needed authority and expertise  Will cost less than a private contract  Must have a written agreement with partnering Federal agencies MAY 7, 2015FIMS / REAL ESTATE TRAINING 19 WORK FOR OTHERS: ORIGINS

MAY 7, 2015FIMS / REAL ESTATE TRAINING 20 ECONOMY ACT QUESTIONS Must the recipient have on hand all needed property? Who keeps the property? Are operations and maintenance allowable expenses? Are such expenses direct or indirect? May the agency in need apply funds in advance? Does that obligate the funds?

 Source - The Atomic Energy Act [amended] (1954), Section 33 [42 USC 2053]  Authorizes the Department to perform Research and Development for private entities.  Assumes the Department has sufficient resources to meet the private entities’ needs. MAY 7, 2015FIMS / REAL ESTATE TRAINING 21 WFO: PRIVATE ENTITIES

MAINTENANCE WHO PAYS? WHAT COUNTS?  Strategic Partnership Projects  Full cost recovery  Programmatic vs conventional real property  Exclusion of certain usage codes  Discounting replacement plant value (RPV) with the conventional facilities indicator (CFI)  Fully burdening reported annual costs MAY 7, 2015FIMS / REAL ESTATE TRAINING 22

ALLOCATING FIMS OPERATION COSTS 1. Tally the manually-entered asset-level operation costs. 2. Subtract from this tally the total of all site-level operation costs. 3. FIMS allocates the balance to buildings and trailers without operation cost entries --  For non-utility costs  By Gross Sqft.  For utility costs  By Gross Sqft.  By Hours of Operation MAY 7, 2015FIMS / REAL ESTATE TRAINING 23

INVESTING IN KNOWING ASSET-LEVEL OPERATIONS COSTS  Why? The Federal Real Property Profile  41 CFR § incorporates the most recent FRPP reporting instructions.  The FRPP continues to collect operating costs at the asset level.  Operating costs = operations costs + maintenance costs  DOE has a long-standing requirement to collect asset-level maintenance costs.  DOE still allows allocating operations costs.  Why? Reduce the Footprint  Reporting in FY 2016 will require asset-level operations costs on all assets disposed or part of a consolidation or co-location to allow for a before and after comparison.  Why? It Makes Sense!  Imagining spending $1,200 a year on fueling your three cars.  Which one is the gas hog? MAY 7, 2015FIMS / REAL ESTATE TRAINING 24

RELIANCE ON FIMS FOR ALLOCATING OPERATING COSTS MAY 7, 2015FIMS / REAL ESTATE TRAINING 25 Data Source: FY14 Snapshot Owned Buildings & Trailers Active and inactive Operating cost > $0 Data Source: FY14 Snapshot Owned Buildings & Trailers Active and inactive Operating cost > $0

ALTERATIONS, RENOVATIONS, OR ADDITIONS MAY 7, 2015FIMS / REAL ESTATE TRAINING 26 TypeImprovement USF / GSFMaintenance Adjustments Table Usage Survey Alterations Renovations Additions No No No Yes, not capital Yes Usually yes USF Usually yes Yes Yes Yes Both Sometimes yes Yes Yes

OperationsTransition DeactivationDecommissioningRemediation Surveillance and Maintenance Operating Operational Standby Operating under an Outgrant Shutdown Pending Transfer Shutdown Pending D&D Operating Pending D&D D&D in Progress Deactivation D&D in Progress Shutdown Pending Disposal In Situ Closed In Situ Closed LTM ALIGNING D&D PHASES AND FIMS STATUS MAY 7, 2015FIMS / REAL ESTATE TRAINING 27

ASSESSMENT MAY 7, 2015FIMS / REAL ESTATE TRAINING 28

WHAT’S WRONG WITH OUR STATUS CODE OPTIONS?  GAO Report critiqued DOE’s status codes  Issues included –  Vague definitions  Overlapping definitions  Lifecycle milestones omitted  Inconsistent application among programs and sites MAY 7, 2015FIMS / REAL ESTATE TRAINING 29

ASSESSING STATUS, USAGE, & UTILIZATION  How often do I conduct surveys?  Do the results reflect a point in time or the year on average?  What should I consider when assigning a status?  How does the configuration differ from the usage?  How does occupancy differ from utilization?  How do the “space types” influence my utilization estimate? MAY 7, 2015FIMS / REAL ESTATE TRAINING 30

COMMENTS OR QUESTIONS? Ivan Graff (202) AVIDAC Argonne Version of the Institute's Digital Automatic Computer c. 1953