Building Acquisition and Ownership Costs

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Building Acquisition and Ownership Costs

• Bob Smoot
• 202-565-6400
• bob.smoot_at_hq.med.va.gov

2
Building Acquisition and Ownership Costs

• Planning Issues
• Data Sources
• Identifying All Costs Elements
• Documentation and Backup
• Industry Standards and Guidelines
• VISN vs. HQ Estimates
• Assistance Available

3
Planning Issues

• Office of Facilities Management
• Method of Accomplishment of Acquisition
• Appropriate Life Span of Asset
• Provide Planning - Conceptual Architectural and
  Engineering Services - and Estimating
  
• IDQ A/Es

4
Method of Accomplishment of Acquisition

• Buy, Leasing and Enhanced Use Leasing
• New VA Construction
• Renovate Existing VAMC Building or Portion
• State Home Grant - Long Term Care Solution - VA
  Pays 65 of Costs
  
• Homeless Grant - VA Pays 65 of Costs

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Appropriate Life Span of Asset

• Partnering with VAMC and VISN, FM Assists in
  Determining Expected Need Requirement -
  Increasing Customer Base or Is It Declining and
  At What Rate
• This Drives Whether to Lease, Renovate, Build New
  or ???
  
• If New, Determine if Standard VA Quality is
  Required or if Going Lite Makes Sense, etc.

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Provide Planning and Estimating

• Consulting Support Service
• Facility Assessment
• Conceptual Architectural and Engineering
  Assistance
  
• Asset Enterprise Development Service
• Innovative Financing and Develop Alternatives
• Facilities Quality Service
• Estimating and Analysis of Alternatives

7
Data Sources

• Office of Facilities Management
• 10N
• GSA
• BOMA
• R.S. Means, Marshall and Swift, Dodge, and et al

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Office of Facilities Management

• VA/PACES
• New, Renovation, and Sitework Costs
• User Definable Program Areas - by Department
  H-18-08 or Building Type, i.e. NHCU or OPC
  
• FY 2002 VISN Strategic Costing Guide
• 13 Building Types - New and renovation
• State Home Cost Guide
• New and Renovations
• IDQ A/E

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10N

• Energy Costs
• Janitorial Costs
• Historical Costs - Minor and NRM

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GSA

• Local Rental Rates
• Maintenance Costs
• Janitorial Costs
• Energy Costs

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BOMA

• Janitorial
• Repair and Maintenance (Minor RA)
• Utilities
• Roads, Grounds, and Security
• Administrative
• Fixed Expenses - Insurance, Real Estate and
  Personal Property Taxes

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R.S, Means, Marshall and Swift, Dodge, et al

• Building Unit Costs Are Suspect
• Small and Unknown Sampling
• Building Cost Does Not Reflect Regulatory, Policy
  and Mandated Considerations
  
• Excellent CSI Unit Costs - i.e. Concrete Cost in
  Place for columns, 24 RCP CL3 Cost in Place,
  etc.
  
• R.S. Means is VA/PACES Database

13
Acquisition Costs

• Design Procurement and Costs
• Total Base Construction Costs - CIB Construction
  Contract Cost
  
• Equipment Costs

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Design Procurement

• FM Lead Selection
• CBD Ad
• Selection Board Composed of Technical and Program
  Experts
  
• Evaluation of Qualification
• Short-listing Process
• Interview, Rank, Final Selection, and Negotiation
  of Fee
  

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Design Costs

• Application Engineering and Estimating
• Design Programs and Special Studies
• Schematic and Design Development
• Up to 1-1/2 of Construction Costs
• Construction Documents
• Up to 6 of Construction Costs
• Pre/Construction Management
• Up to 3 for Pre-Construction Services

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Total Base Construction Cost - New or Renovation

• Bricks and Mortar
• Sitework Components
• Specialized Equipment
• Cabling
• Significant Construction Components
• Hazardous Material Abatement

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Bricks Mortar

• New Construction
• Building Shell Foundation, Sub and Super
  Structures, Exterior Closure, and Roof
  
• Back-Bone Systems Conveying, Mechanical, and
  Electrical
  
• Architectural Build-out Interior Construction,
  and Equipment
  
• Renovation of Existing Space or Building
• Demolition
• Replacement of Any Major System
• Architectural Build-out

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Sitework Components

• Utilities
• Storm, Sanitary, Gas, Electric, and Water
• Sitework
• Roads, Walks, Landscaping
• Parking
• Lighting, Stripping, Pavement, Curb and Gutter
• Site Clearance and Demolition

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Specialized Equipment

• An Allowance to Take Into Account Changing Design
  and Installation of Diagnostic, and Surgical VA
  Uses 1/2 of 1 for These Changes From Budget to
  Actual Completion

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Cabling Costs

• Cabling Includes Telephone and LAN - Class 5 or
  Fiber Optic
  
• For Intensive Clinical Space the Cost Can Range
  up to 6.00/GSF Depending on Project Location
  
• VBA Regional Office Building Cabling on Average
  Runs 1.50/GSF

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Significant Construction Components

• Atriums
• Elevated Bridges
• Canopies
• Natural Disaster Structural Strengthening
• Hazardous Material Abatement
• Abatement is Funded Separately

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Equipment Costs

• Examples
• Food Service, Laboratory, Medical, and Pharmacy
• VA National Contracts - 90
• A/Es, Equipment Consultants/Specialists,
• FMs IDQ A/Es
• Manufactures and their Representatives

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Items to Consider for a Construction Project

• Utility Systems - Existing Capacity
• Boilers, Chillers, Feed and Return Piping,
  Utility Tunnels, Emergency Generators, Primary
  Feeders, Transformers, etc..
  
• Site Utilities - Existing Capacity
• Sanitary, Storm,Water, Gas, Phone and Electrical
  Ductbanks
  
• Parking, Historical, and Site Topography

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Activation Costs

• Current Operating Cost
• Future Operating Cost
• Additional FTEE Required
• Service Contract
• Movable Equipment
• Moving Cost
• Initial Furnishings - Office Furniture, IT
  Equipment, and Patient Care Equipment

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Life Cycle Costs Distribution - Typical New Acute
Care Facility
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Actions Effecting Life Cycle Cost Distribution

• Operating Costs Are Not the Same for All
  Buildings on /GSF Basis
  
• Small Initial Increase in MEP Costs During Design
  That Significantly Reduces Energy Consumption
  Usually Pay for Themselves Within 10 years
  
• EO 13123 Mandates Use of Sustainable Design -
  Which Lowers Operating Costs

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Operating Costs

• It Is Imperative That Energy, Supplies and
  Staffing Costs Be Accurately Projected for each
  Alternative
  
• In New Construction and Total Renovation, Energy
  Costs Should Be Significantly Less - Especially
  for VA Construction
  
• New and Renovation Construction, If Ideally
  Located to Adjacent Departments and Services,
  Will Have Lower Staffing Costs - New will Be the
  Lowest

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Maintenance Costs

• Work Items
• Interior
• Exterior
• Grounds
• Need to Determine Frequency of Maintenance -
  /GSF/YR
  
• Need to Determine Frequency of Replacement and
  Include in Economic Analysis
  

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Distribution of Maintenance Costs
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Interior Work Items

• Wall Finishes
• Floor Coverings
• Ceiling Finishes
• Mechanical
• Electrical
• Equipment - Maintenance and Periodical
  Replacement
  
• Medical Gases, Nurse Call, etc.

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Exterior Work Items

• Roof
• Windows and Doors
• Skin
• Foundation
• Security

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Janitorial Grounds

• Cost to Clean Space
• Contract or In-house Staff in /SF/YR
• Cost to Maintain Grounds Attributable to Space in
  Question - /SF/YR
  
• Maintaining Lawn
• Landscaping
• Snow Removal
• Policing Parking Lots

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Industry Standards and Guidelines

• VA Circular 00-91-2
• AHA - Estimated Useful Lives of Depreciable
  Hospital Assets
  
• IRS Code - Depreciation Tables
• Manufactures - Literature, Test Results, etc.
• NIBS

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VA Predicted Life Spans

• Plumbing Fixtures - 20 Years
• Fire Protection Systems - 25 Years
• HVAC System - 5 to 15 tons - 10 Years
• Radiators - Fin Type - 18 Years
• Electrical Fixtures - 10 Years
• Elevator - Passenger High Speed - 20 Years

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AHAs Estimated Useful Lives and Depreciable
Hospital Assets

• Landscaping - 10 Years
• Floor Finishes - Carpet - 5 Years
• Floor Finishes - Vinyl - 10 Years
• Floor Finishes - Ceramic - 20 Years
• Wall Covering - Paint Wallpaper - 5 Years
• Nurse Call System - 10 Years

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Documentation and Backup

• Space Program
• Source of Unit Cost Used to Generate Facility
  Cost Estimate
  
• Verify All Line Items Priced
• H-18-6227 - Construction Project Cost Estimate
• Available on FMs WebPages

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VISN vs. HQ Estimates

• VISN Estimates Do Not Need to Include All Markups
  Required for Budget Request - HQs Estimates Do
  
• VISN Estimate Should Distribute Dollars Over
  Project Using S Curve
  
• VISN Should Develop All Construction Cost Using
  FMs VA/PACES, Web Base Guidelines, IDQ A/Es, or
  HQ Staff VISN/VAMC A/E Firm - Cost Consultant

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Budget Estimates - New or Renovation Alternatives

• Congressional Budget Funding Request - VAs
  Estimated Total Project Cost (ETPC)
  
• Total Base Construction Costs
• Mark-ups
• Pre-Design Allowance and Escalation
• Contingency Reserves and Technical Services
• Additional Other Costs
• Other Costs, Construction Management, and Market
  Condition Allowance
  

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Total Base Construction Cost

• CIB Submission is Basis
• Review By HQ Estimating Staff
• Scope of Work Envisioned and Reasonableness of
  Costs
  
• Consult VAMC/VISN Explaining Any Observed
  Differences
  
• Reconcile and Come to an Agreement of What Costs
  Will Be Use in The Budget Request
  
• Forward a Copy of 6227 and Project Summary Sheet
  to VAMC/VISN
  

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Markups

• Pre-design Design Allowance
• Takes in to Account Minor Changes in Required
  Programs Over Time
  
• Allows for Variations in Subsoil Conditions -
  Sink Holes, Caissons, Grade Beams, etc.
  
• Escalation - OMB Mandated Rates
• Some VISNs/VAMCs Include this in their CIB
  Construction Costs - Some Do Not
  
• Available on FMs WebPages - Updated
  Periodically
  

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Markups - Continued

• Contingency Reserves - New 5 and Renovation
  7-1/2
  
• This pays for Construction Period Changes
• Technical Services - 10
• Pays for A/E Prepared Construct Documents
• Reproduction of Drawings and Specifications
• Surveys, Subsoil Investigations, Testing,
  Dedications, et al

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Additional Other Costs

• Other Costs
• Site Acquisition
• Utility and Other Agreements
• Impact Costs
• Construction Management - 3
• Pays for On-Site Management and Inspection
• Market Condition Allowance - 5
• This Take Care of Local Market Variations Not
  Covered By OMBs Rates for Escalation

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Assistance Available

• FM Can Provide Up Front Estimating During The
  Preparation of the CIB Application
  
• FM Can Provide Assistance in Developing
  Alternatives
  
• FM Can Provide Guidance in Reducing Operating
  Costs
  
• Contact Bob Smoot [phone]