# Presentation: 404127

## Office of Acquisition and Property Management

- Policy for Estimating Current Replacement Value and Deferred Maintenance

## Background

- The facilities condition index (FCI) is used to establish the relative condition of assets
- FCI is a ratio of Deferred maintenance (DM) and Current Replacement Value (CRV)
- FCI = DM/CRV

**Department of the Interior**
- December 2007

## Background

- The original DOI policy for estimating current replacement value (CRV) and deferred maintenance (DM) was issued in June, 2006.
- This policy provided three options for calculating CRV
- It did not require bureaus to use the same methodology to estimate CRV and DM

**Department of the Interior**
- December 2007

## Background

- The lack of consistency created two issues:
- Diminished the value of FCI as a metric and prioritization tool
- 2) Limited usefulness of Department-wide comparisons for FCI, CRV, and DM

**Department of the Interior**
- December 2007

## Emphasis on Standard Methodology

- DOI senior management charged the Asset Management Team (AMT) to revise the policy by the end of Q1 FY 2008
- OMB placed the policy revision on DOI’s real property scorecard as a deliverable for Q1 2008

**Department of the Interior**
- December 2007

## Revision Process

- The AMP and Office of Acquisition and Property Management lead the revision
- Drafts of the new policy were distributed to the Asset Management Partnership (AMP) for review and comment
- The Office of Budget and the Office of Financial Management also reviewed and provided input

**Department of the Interior**
- December 2007

## Objectives of Policy Revision

- Support consistent, accurate, and repeatable estimating methodology for CRV and DM
- Use industry standard data and estimating tools where applicable
- Ensure CRV and DM estimates for specific asset types (buildings, roads, dams, etc.) employ the same methodology Department-wide

**Department of the Interior**
- December 2007

## Objectives of Policy Revision

- Ensure CRV and DM estimates are “compatible”, and contain the same fees and markup factors
- Support consistent CRV and DM estimating methodologies within non-heritage, multi-use, and heritage asset categories
- Level of accuracy for all CRV and DM estimates is a Class C estimate (-15% to +25%)

**Department of the Interior**
- December 2007

## Non-Heritage Assets

- Buildings
- Use RS Means data for labor and materials
- Apply fees and markups specified in policy
- Adjust estimates with RS Means three digit zip code factors and a transportation factor
- Estimates for items not included in RS Means are supplied by vendors and external or internal consultants

**Department of the Interior**
- December 2007

## Non-Heritage Assets

- Structures
- Uses the same methodology as buildings
- Roads, dams, water distribution systems, and power assets will have their own asset specific standard for CRV estimates
- Committees to develop standard methodology will work with Army Corps of Engineers and DOT

**Department of the Interior**
- December 2007

## Heritage and Multi-Use Assets

- The Heritage Asset Partnership (HAP) will develop a CRV methodology by the end of FY 2008
- Contact your bureau’s representative to provide input
- A Multi-Use asset meets the definition of a Heritage Asset but is predominantly used for a function that can be accomplished by a non-heritage asset.

**Department of the Interior**
- December 2007

## Other Important Policy Components

- Inflation Adjustment
- RS Means inflation factors, and the transportation factor, are used to inflate CRV and DM.
- This will be completed by April 1 of each year.
- Training
- Bureaus are charged with ensuring staff have the requisite training and skill level to make CRV and DM estimates

**Department of the Interior**
- December 2007

## Financial Statement

- The DM reporting range is to be -15 to +25 percent of the calculated value

**Department of the Interior**
- December 2007

## Keep in Mind.....

- CRV and DM estimates are made solely for the purpose of calculating FCI
- Do not use these CRV and DM values for program formulation, to support a budget request, or as project estimates
- Only detailed estimates should be used for these activities

**Department of the Interior**
- December 2007