421.1 Facility Plans and Investments
06/24/04
Office of Primary Responsibility: Office of Management Services
Instruction: New chapter.
1. Purpose. This Chapter establishes policy governing facility
plans and investments at the
U.S. Geological Survey (USGS), including one-time transactions such as those
for the construction of a new or replacement facility and recurring transactions
such as rental payments and the expenses of facility operations and maintenance.
This directive outlines the approach for completing facility plans and reviewing
facility investments; establishes business case analysis as the bureau’s
primary review mechanism; explains the USGS Investment Review Board’s
(IRB’s) role in this regard; assigns responsibilities to designated officials
to ensure effective accountability; and defines other measures requisite to
responsible facility oversight, including the treatment of large research vessels
as facilities, the assessment of deferred maintenance investments, and facility
investments under long-term interagency agreements.
2. Scope. Through the preparation of facility plans and investment proposals, all space transactions are subject to the provisions of this chapter and virtually all will be subject to some level of review and approval. In addition to facility plans, the IRB will review construction projects with a life cycle cost of $2 million or more; General Services Administration (GSA) occupancy agreements, cooperative agreements (that provide space to the USGS), interagency agreements, and commercial leases with a life cycle cost of $5 million or more; and special-interest investments such as those involving large research vessels, large deferred maintenance backlogs at single buildings or installations (those considered in “poor” or “replace” condition based on the Facilities Condition Index), and the long-term occupancy of space owned by the U.S. Fish and Wildlife Service.
3. Background. The USGS relies on various space sources to house its science and support activities. The GSA provides about 67 percent of the space, or nearly 4.6 million square feet. Buildings and other structures at USGS-owned and -leased installations typically provide about 20 percent and 3 percent of the space, respectively. Cooperative agreements provide about 5 percent, and space obtained through purchase orders, interagency agreements, and similar arrangements is the remaining 5 percent. With recurring facility costs consuming a significant and increasing share of the total USGS budget, space inventories and recurring expenses such as rent, operations, maintenance, and deferred maintenance for existing facilities (including large research vessels) must be examined for confirmation of need and savings potential. Likewise, facility transactions (stemming, for example, from science initiatives, program expansions, renovation needs, new GSA occupancy agreements, and lease renewals) affect costs and warrant review.
4. Authorities. The chief authorities governing space and real property management and capital planning and investment are the GSA Federal Management Regulations and Office of Management and Budget (OMB) Circular No. A-11. The Department of the Interior Capital Planning and Investment Control Guide (Version 1.0 dated December 2002) provides detailed guidance governing information-technology and construction investments.
5. Policy. It is USGS policy to exercise responsible oversight of the facilities that it occupies and of associated facility investments. Responsible oversight ensures that all occupied facilities effectively meet mission needs and are cost-effective to construct, otherwise acquire, operate, and maintain. It also ensures that bureau facility decisions are consistent with statutory and departmental requirements such as those governing location. For long-term and other planning purposes, the USGS will prepare comprehensive plans that establish integrated science/facility program directions consistent with the bureau strategic plan and mission objectives. For specific facility projects, the USGS will apply business case analysis as the mechanism for proposing, reviewing, and approving facility investments, and will ensure that the investments are consistent with long-term and other plans.
6. USGS Investment Review Board. Survey Manual chapter 308.62
documents the establishment of the IRB, whose charter the Director approved
on March 11, 2003, and revised on December 29, 2003. Briefly, the IRB is responsible
for reviewing information technology and construction projects and submitting
major projects to the Department for approval and submission to OMB in the Exhibit
300 format. Major construction projects include rehabilitation, remodeling,
expansion, or new construction with a cost of $10 million or more for any building
or other constructed asset. The Department’s Capital Planning and
Investment Control Guide also tasks bureau IRBs to review, select, and
manage the business cases for construction projects costing between $2 million
and $10 million. The USGS will use the procedures in the Guide for
these major projects.
In addition to construction projects, the IRB will review other major facility
investments. There are two forms that such proposed investments typically take:
as elements of a Regional or Headquarters Facility Plan and thereby perhaps
still in a formative mode or generally involving action over a longer term;
and as specific projects or proposed transactions that require approval because
a funding or other commitment is imminent in the current budget cycle. This
would include projects requiring expedited reviews. Examples are projects generated
as the result of Congressional budget add-ons, emergency repairs, and urgent
security upgrades.
The review of facility plans provides the IRB an annual opportunity to receive a focused overview of the status of current space and facility holdings and costs, a broader perspective on science directions affecting facilities, and a priority list of proposed facility projects. The IRB review of plans serves an informational purpose, but may prompt questions on cost or inventory trends and recommendations on priorities, for example.
For specific projects and proposed transactions, a Cost Center will have the opportunity to present the business case and request IRB approval. Examples of projects and transactions are: proposed space expansions, construction (including rehabilitation, remodeling, and expansion of existing buildings), new leases, lease renewals, cooperative agreements providing space to the bureau, and new and replacement GSA occupancy agreements. The threshold for review by the IRB is construction projects with a life cycle cost of $2 million or more, or GSA occupancy agreements, cooperative agreements (that provide space to the USGS), interagency agreements, and commercial leases with a life cycle cost of $5 million or more. The Chief, Office of Management Services (OMS), will issue instructions for review of these projects.
7. Business Case Analysis. This is the capital investment
review process endorsed by OMB and embodied in the Department’s Capital
Planning and Investment Control Guide. For USGS the business case analysis must
include: a brief project description; statement relating the project to mission
needs; life-cycle cost analysis; discussion of consolidation opportunities including
a benefit/cost comparison; discussion of alternatives and a comparison of their
costs (construction vs. lease, GSA vs. commercial lease, etc.); identification
of the funding source; and project plan. The Chief, OMS, will issue instructions
on the preparation of business case analyses and collaborate with the regional
facilities staffs to establish standardized methodologies and formats.
8. Large Research Vessel Investments. Certain large research
vessels qualify for Facility Budget Activity funding of operations, maintenance,
and deferred maintenance because they are treated as facilities. These vessels
are typically older assets that may have a history of inadequate maintenance
and somewhat limited investments in their upkeep. Preliminary results from recent
condition assessments of these vessels indicate that a substantial deferred
maintenance backlog exists. Because safety standards necessarily are higher
for research vessels that may operate far from land, maintenance cannot be as
readily deferred without jeopardizing crews. The IRB will periodically request
business case analyses and examine the maintenance programs and plans for these
high-upkeep assets to ensure that the bureau optimizes utilization and manages
investments properly.
9. Deferred Maintenance Investments. Survey Manual chapter 422.1 establishes bureau policies and procedures for deferred maintenance, which is maintenance that was not performed when it should have been or when it was scheduled and which, therefore, was put off or delayed for a future period. The OMS collects deferred maintenance project proposals annually, and applying the Department’s ranking criteria, establishes the highest priority projects. These priority projects are presented in the USGS budget request as the USGS 5-Year Deferred Maintenance and Capital Improvement Plan. This process works well in ranking individual projects such as the replacement of a building’s critical fire alarm system. However, it does not provide a useful means for assessing the aggregate deferred maintenance investments that a single building or installation may require. As a stand-alone project, for example, the fire alarm system replacement may be extremely important, but if it is only one of dozens of costly deficiencies at an older building, piecemeal investments may not be cost-effective. The Department has established a Facility Condition Index as the metric for assessing an asset’s condition; in this example and others where the asset may be in “poor” or “replace” condition, investment decisions must consider not only the merit of the proposed deferred maintenance project but also overall facility condition. The IRB periodically will request OMS to identify assets fitting this description and request that the responsible Regional Director perform a business case analysis for IRB review and consideration of funding alternatives.
10. Investments in U.S. Fish and Wildlife Service Facilities. With the merger of the Biology discipline into the bureau, the USGS accepted tenancy of relatively large amounts of space under long-term interagency agreements at U.S. Fish and Wildlife Service installations at Patuxent, Maryland, and Cook, Washington. With this tenancy comes the commitment to fund annual operations and maintenance as well as deferred maintenance that totals millions of dollars. In some instances facility conditions are so poor that a building should be gutted and entirely rehabilitated. The IRB will request that the responsible Regional Director perform a business case analysis for IRB review and consideration of alternatives.
11. Responsibilities. The Chief, Office of Administrative Policy and Services exercises executive oversight of the bureau space, facility, and real property management programs, and administers the Facility Budget Activity. For facility planning and investment purposes, the responsibilities of designated officials follow:
A. Chief, OMS, has the following responsibilities:
(1) Collects information and maintains a database on USGS facility assets for tracking and oversight of inventories by source and cost.
(2) Serves as Facilities Program Coordinator for bureau planning purposes and prepares the USGS Strategic Facilities Management Plan and updates.
(3) Issues procedures and instructions on the format, content, and due dates of Regional and Headquarters Facility Plans; oversees preparation of the Headquarters Facility Plan; reviews the plans for consistency with instructions; and assists USGS management in the identification of facility priorities and budget initiatives evident from the plans.
(4) Issues procedures and instructions on the format and content of business case analyses supporting facility proposals that require IRB or regional approval, and works with regional staffs to establish spreadsheet or other templates that facilitate the use of standardized cost and benefit methodologies and formats.
(5) Formulates the Facility Budget Activity budget, which captures expected recurring costs for GSA rent, other rent, operations, maintenance, and deferred maintenance for USGS-occupied facilities and qualifying large research vessels; and prepares the USGS 5-Year Deferred Maintenance and Capital Improvement Plans for submission to the Department, OMB, and the Congress.
B. Regional Directors have the following responsibilities:
(1) Exercise executive oversight of regional space and facility operations to ensure that USGS-occupied space meets mission needs and is cost-effective in acquisition, operation, and maintenance.
(2) Coordinate with Interior bureaus and other local partners to take advantage of economically viable collocation opportunities that further departmental and mission objectives, enhance collaboration, or improve the quality and utilization of space.
(3) Prepare Regional Facility Plans that are in accordance with instructions, reflect regional and program priorities, integrate science/facility needs, and optimize facility assets’ location, distribution, and use to control or reduce costs.
(4) For facility projects and other proposals requiring bureau IRB approval,
provide required justifications and other business case analysis information
in accordance with bureau instructions and the IRB process described in the
Department’s Capital Planning and Investment Control Guide.
(5) For facility projects and other proposals that do not require bureau IRB
approval, establish review boards and appropriate control processes that ensure
the proposals are justified in terms of cost, funding availability for the full
occupancy term, mission, space utilization, and other applicable considerations.
(6) Consult with the Associate Directors regarding: plans, projects, and other proposals involving national capability facilities located in the regions; the future directions of science programs; discipline priorities; and funding considerations.
C. Associate Directors have the following responsibilities:
(1) Advise Regional Directors on national program priorities and related facility needs; support planning, business case analysis, and investment processes for national capability facilities located in the regions; and ensure that facility requirements are integrated into national science program plans and budgets.
(2) Report periodically to the IRB on investments and plans for mission infrastructure systems and components such as hazards monitoring networks, river cableways, and gaging stations that qualify for funding in USGS 5-Year Deferred Maintenance and Capital Improvement Plans.
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