The Value Proposition of IWMS - AssetWorks

(leased/owned) real estate budget of $93.7 million or a 15% reduction.
When evaluating a client for potential real estate savings I will use a
conservative estimate of 3% to 7% of the combined real estate spend.
Expense
Real Estate (program space)
Energy (consumption)
Investment
Maintenance (operations)
Capital (construction)
Energy: Through the continuous retro-commissioning of HVAC systems,
the state was able to realize energy consumption (Kwh/mmbtu) savings
of 16%-28% per site. The dollars associated with energy savings were
$3.0 million, 16% of the $18.75 million energy spend. When evaluating
the potential energy cost reduction for a client, I utilize 15% of the past
12 month’s energy expenditures as an estimate.
Maintenance: The state budgeted $1.68 per square foot for
maintenance. This included all labor and fringe benefits, supplies,
service contracts and small construction projects under $25,000. The
maintenance budget for the 16.3 million square foot of facilities was
$27.4 million. Savings from utilizing a Computerized Maintenance
Management System (CMMS) was $1.6 million per year in reduced
inventory (supply chain management), telecommunications
expenditures (utilizing web based communication vs. DLS lines) and
traditional maintenance labor that was reallocated to the newly created
energy management office (7 FTE). All these savings were reinvested in
the maintenance program. When evaluating the savings potential for a
client I estimate a 5% savings that will be reinvested in the maintenance
program when deploying a CMMS.
Capital: The 10-year statewide capital plan I established was to reduce
the Facility Condition Index (FCI) from 15.5% to 5%. (FCI is the deferred
maintenance backlog divided by the replacement value of the portfolio.)
By combining a reduction in the deferred maintenance backlog with an
increase the replacement value of the FCI will be reduced. Reducing the
deferred maintenance backlog is a direct result of maintaining a
disciplined spending plan. However, an indirect way of improving the
FCI is to extend the lifecycle of building systems. One can estimate the
value associated with extending the life cycle (continuous retro
commissioning, keeping the existing HVAC systems at or near design
intent) of the HAVC systems (20% of the replace value) times one tenth
of the annual reduction of FCI (.001). For the state, the increase in CRV
associated with the ESM was $440,000 per year. When estimating this
value for a client utilize the replacement value if known, or estimate it
at a conservative $135 per square foot times 5% (HVAC system value)
times a planned FCI reduction of 1%. These figures can be adjusted
based on the client input and facility type.
WHITE PAPER: THE VALUE PROPOSITION OF IWMS 6