The Process of Facilities Capital Planning and Management: Step Three

January 19, 2012

By Ameeta Soni, Chief Marketing Officer, VFA, Inc.

One of the benefits of gathering accurate facility condition data is not only that the true condition becomes clear, but also that it results in a benchmark to analyze the effect of investing in facility improvements. Developed by industry associations, this benchmark is known as the Facility Condition Index, or FCI.

The FCI is the ratio of deferred maintenance dollars to replacement dollars and provides a straightforward comparison of an organization’s key estate assets. To calculate the FCI for a building, divide the total estimated cost to complete deferred maintenance projects for the building by its estimated replacement value. The lower the FCI, the lower the need for remedial or renewal funding relative to the facility’s value. For example, an FCI of 0.1 signifies a 10 percent deficiency, which is generally considered low, and an FCI of 0.7means that a building needs extensive repairs or replacement.

Facility teams and management can agree on minimum and target condition standards for various types of buildings; for example, data centers may be crucial to the organizational mission and call for an improved target FCI. FCI analysis provides the true cause and effect of investment decisions.

How are you benchmarking facility condition?

Read more about VFA’s Facilities Benchmarking Services and how comparative metrics such as FCI can help provide companies with an in-depth look at their portfolios and to set long-term strategies.

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