A risk assessment measures the risk of failure for a facility and its associated infrastructure by identifying the relative strengths and weaknesses of individual buildings. The process of facility risk assessment can be approached in a number of ways. One basic way is to rank facilities or systems using two criteria: the likelihood (frequency) of failure and the impact (severity) of failure.
Table A – Likelihood/ Frequency of Failure
|Almost Certain||Extremely likely to occur||Daily||5|
|Likely||Likely to occur, has occurred previously and could reasonably occur again||Monthly||4|
|Periodic||Periodically has occurred in the past||1-2 Years||3|
|Unlikely||Has happened in the past||3-5 Years||2|
|Rare||Extremely rare/has not occurred in the past||5-10 Years||1|
Table A shows a way to rank facilities or individual systems by the likelihood they will fail. The likelihood is measured by how often this may happen, and the scores from one to five are applied accordingly, with a score of five for those facilities/systems that are extremely likely to fail.
Table B – Impact/Severity of Failure
|Catastrophic||Imminent/certain life safety risk; entire campus/large area may require shutdown; a critical failure with a long recovery period; legislated/code requirement with major legal/fine/penalty implications||Severe/catastrophic financial consequences (calls into question the viability of the institution)||5|
|Major||Potentially major safety risk; legislated/ code violation; major failure||Major financial consequences||4|
|Moderate||Significant failure requiring actions beyond routine activity; failure requires closing of floor or section of a building||Moderate financial consequences (budget restrictions, reallocations)||3|
|Minor||Failure which can be managed under routine activity; failure requires closing of a small area||Minor financial consequences (handled within existing budgets by reprioritization)||2|
|Insignificant||Failure not requiring shutdown or closure; minor occupant discomfort; poor appearance||Insignificant or no financial consequences||1|
In Table B, facilities and systems can be ranked by the severity of the failure, based on the potential impact, with particular consideration given to the financial consequences. Again, each facility or system can be given a score from one to five, with those whose failure would be catastrophic to the organization given a five.
Table C – Project Ranking
|16 or over||Very High Priority/ Very High Risk|
|11 to 15||High Priority/ High Risk|
|6 to 10||Moderate Priority/ Moderate Risk|
|Less than 6||Low Priority/ Low Risk|
In order to rank projects based on risk exposure, multiply the likelihood score by the impact score (Table C). Projects with the same score can be ranked from the lowest cost to the highest cost (i.e. all else being equal, lower cost projects should have a higher priority than higher cost projects). This can be done manually or by using facility capital planning software.
This type of facility risk measurement provides a basic understanding of risk in facility portfolios and can be used to quickly assess the potential for risk exposure. Next week, we will examine a more sophisticated method to measure the risk of failure that can be used to account for multiple considerations: an asset metric known as a Risk Index (RI), which uses a combination of system criticality and condition.