Second Edition
Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
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Library of Congress Cataloging-in-Publication Data:
Rondeau, Edmond P.
Facility management / Edmond P. Rondeau, Robert Kevin Brown, Paul D. Lapides. 2nd ed.
p. cm.
Includes bibliographical references and index.
ISBN-13 978-0471-70059-3 (cloth)
ISBN-10 0-471-21061-7 (cloth)
1. Real estate management. 2. Facility management. I. Brown, Robert Kevin.
II. Lapides, Paul D. III. Title.
HD1394.R66 2006
658.2—dc22
2005010713
DEDICATED TO:
The hardworking, knowledgeable, and skilled facility professionals who acquire, plan, design, construct, support, maintain, and manage corporate facilities to help their customers and organizations succeed and excel.
The in-house customers who require and accept professional assistance and entrust their facility service providers with corporate resources and timely confidential information to meet their strategic business requirements.
The suppliers, vendors, contractors, and consultants who provide high-quality, timely, creative, and cost-effective services to help their facility professional clients succeed and excel.
The bosses and corporate officers who support and provide their facility professional staff with the responsibility, authority, and resources to execute their duties.
The students, teachers, and educational organizations who sustain a growing knowledge and research base of facility management information and are the future of the profession.
Keep up the good work!
Not until the 1980s did facilities management (FM) come into its own. Even though FM had always been around in one form or another, it lacked a focus, even a name. It did not command a presence either within the organization or without. In fact, practitioners didn’t know that “someone else does what I do,” as the FM vice president of a Midwest bank told me in 1980.
Indeed, the 1980s can be considered the decade of facilities management. Associations of professional FM practitioners were formed, colleges and universities developed FM degree programs, publications exclusively for FMs appeared for the first time, and manufacturers and consultants hopped on the FM bandwagon with marketing plans to serve this newly identified buyer with clout.
In short, the sleeping discipline emerged from its cocoon and matured to benefit the corporation and its employees. Facilities managers turned their attention to critical issues, from human factors to new technologies, energy conservation to indoor air quality, and the means to integrate them all in the total workspace.
But by the end of the decade, the flourishing economy took a nosedive with a recession unlike those of the past. The recession of the 1990s was deeper and steeper, and business is seemingly unable to make a fast rebound to anything we might consider normal. Reflecting business in transition, the early 1990s saw new words enter corporate America’s lexicon: reengineering, restructuring, reinventing, and downsizing, rightsizing, smartsizing. No matter what the euphemism, employees were pink-slipped by the tens of thousands.
Nor were facilities managers immune to wholesale layoffs. In some cases, the entire FM department was disbanded, giving meteoric rise to outsourcing as a word and a business concept. American business was indeed in the throes of transition, and FMs struggling for survival diligently searched for new means to meet belt-tightening mandates with bottom-line measures. In response came such concepts as hoteling, telecommuting, virtual offices.
The first five years of the twenty-first century have seen economic recession after 9/11 and the growth of business mergers have continued to force reconsideration of many long-accepted practices. As economists forecasted a slow recovery after 9/11 American business continue to pull out of this long slump.
In the 2000s, facilities management executives are facing even greater pressures to sharpen their strategic skills to match those of every other top executive in the corporate structure. As a result, educational tools will be in demand by those eager to move ahead. This book by three highly regarded professionals serves as a solid foundation for the principles and practice of facilities management. The challenges ahead may be great, yet meeting those challenges can be professionally and personally rewarding.
IFMA Fellow Editor Emerita and Founding Editor, FACILITIES DESIGN & MANAGEMENT
The facility management profession has been and continues to evolve as an in-house service to corporate employers. Many experienced corporate facility management professionals and product and service providers have been working to improve the profession, information, products, and services they provide their in-house customers and clients. A 1991 market study by a national real estate services group stated, “More than seven billion square feet of building space and four quadrillion square feet of land are owned by corporate America. It is often the most valuable asset on U.S. company balance sheets. As the nation’s businesses continue to undergo a fundamental restructuring—through mergers and acquisitions, decentralization, new technologies, changing markets and tightening profits—the pressure is on to better manage corporate facilities and make those assets work harder.”1
As local, national, and global economies and services change, providing information and services that lead to informed and financially sound decisions about these assets becomes even more important in protecting them and improving the value of your corporation. Ideally, this book will help you and your company protect and more effectively and efficiently use its assets to improve shareholder value.
This book contains up-to-date information about the evolving facility management profession that will help facility professionals and their service providers meet the current and long-range challenges and opportunities they face.
Among the book’s outstanding features are its hands-on approach and many relevant exhibits, including samples, policies, procedures, forms, and examples. This book takes a practical approach to the activities facility and outsource professionals must address to successfully manage their responsibilities and career.
This book provides the facility professional with a detailed review of facility management issues. It does not provide a detailed review of or instructions regarding legal details, issues, or requirements; the facility management professional should review and address these topics with corporate or outside legal counsel.
The book is divided into ten chapters designed to help you look at the services and issues facility professionals and consultants face in the ongoing cycle of successfully meeting their customers’ requirements and completing facility management assignments.
Chapter 1 provides an overview to facility management, including a brief discussion of the evolution of the profession, definitions, organizational and personnel issues, ethics, the facility management mission, you and your customer, negotiation strategies, service level agreement (SLA), total quality management (TQM), balanced scorecard, the Sarbanes-Oxley Act of 2002, LEED, and the Americans with Disabilities Act (ADA).
Chapter 2 presents information on long-range and annual facility planning with reference to complementing the business plan and synchronizing corporate planning. It also looks at corporate facility planning, strategic planning, the annual operating plan, the long-range plan, strategic real estate and facility planning, strategic corporate facility management information, and the disposition of assets.
Chapter 3 reviews facility financial forecasting and management. Areas covered include the annual operating plan, the long-range plan, appropriations request, trend and ratio approach, capital budgeting evaluation, financial and facility alternatives, the development and use of capital project tracking, disposing of assets, and outsourcing.
Chapter 4 examines real estate considerations, analysis, and planning. With the vast amount of corporate resources and funds invested in corporate real estate and their associated legal commitments, it is important that facility professionals understand the responsibilities and objectives of the real estate function, best practices in corporate real estate management, issues to review and analyze, real estate and facility inventory, site criteria considerations, determination of customers’ requirements, selection of a real estate broker, principal analytical and transactional activities, acquisition, site evaluation criteria, customers’ site evaluation criteria, environmental and due diligence issues, and the legal document review process.
Chapter 5 reviews architectural and engineering planning and design: development of design requirements and layout, design firm selection process, programming and design, LEED (Leadership in Energy and Environmental Design), budgeting, contract document review, bidding the project, closing and costs, building programming and design illustrated, and campus and high-rise office concepts.
Chapter 6 provides interior programming and space-planning information. It considers space and furnishing standards, national purchasing contracts, space programming, alternate project delivery systems, ergonomic and life safety issues, additional planning and design requirements, the need and requirements for a facility management system (FMIS), and work environment trends that influence space and how people work.
Chapter 7 discusses construction and renovation work such as capital and churn projects; permitting, reviewing, and awarding the construction contract; the preconstruction meeting; construction and renovation; project costs; the certification of occupancy and the punchlist; owner-furnished items; relocation; build-to-suit concerns; new paradigms; and private funding initiatives the FM must face and manage.
Chapter 8 considers the many details of facility maintenance and operations requirements. It reviews the importance of maintenance and operations, its goals and alternatives, time facility maintenance management function, management planning process, managing the physical asset, intracompany and customer relations, financial reporting and controls, administrative responsibilities, and marketing and leasing owned and leased facilities.
Chapter 9 provides an overview of general administrative and technology services: telecommunications and computer integration, security and safety in light of 9/11, disaster avoidance and recovery, records management, furnishings and equipment inventory, mail and copy center services, audiovisual equipment services, conference room scheduling, food and beverage service, and recycling and confidential destruction services.
Chapter 10 examines integrated asset management, technological changes, communication and leadership, successful facility management, and the anticipated evolution of the FM profession. Topics reviewed include hands-on experience, education, and traditions.
We hope that after you read this book you will share with us your thoughts and comments about additional material and exhibits that should be included in the next edition. Also, we are interested in learning about your facility management experiences, trends, rules of thumb, and other relevant information. To communicate errors, suggestions, and experiences to us, please contact our publisher: John Wiley & Sons, Inc., Professional & Trade Division, 111 River Street, Hoboken, NJ 07030.
Thank you for your support; we look forward to hearing from you.
EDMOND P. RONDEAU
ROBERT KEVIN BROWN
PAUL D. LAPIDES
Atlanta, Georgia
The authors acknowledge and thank the following professionals, in-house customers, and corporate clients whose experience, writing, speaking, and sharing contributed to many of the concepts, ideas, and experiences utilized in the development, realization, and evolution of the facility management profession and practice.
Bill Adams, Project Management; Parkash Ahuja; Keith Alexander, IFMA Fellow, Centre for Facilities Management, UK; David Armstrong, IFMA Fellow, Armstrong Associates; Alvin Arnold, BDO Seidman; Bill Back, CFM, IFMA Fellow; David Baer, UPS Supply Chain Solutions; Pat Bailey, GSA Real Estate Sales; Diane Barnes, Wilkhahn, Inc.; Dr. Franklin D. Becker, Cornell University; Katleen Beeckmann, CoreNet Global (Belgium); Charles Bennett, CPA; Susan Biggs; Stephen Binder, Cushman & Wakefield; Michael Bourque, Earl R. Flanshtirgh & Associates; Rebecca Bray, UPS Supply Chain Solutions; Robert Brosseau (Canada); Richard Burroughs, Applied Software; Derek K. Butcher, Centre for Facilities Consultancy (UK); Malcolm Campbell (Australia); Deborah G. Carlston, Synnax Corporation; Alan Clayton, UPS Supply Chain Solutions; Roy Cloudsdale, Johnson Controls World Services; Peter A. Conlin, CFM; McKinley Conway, Conway Data; Dick Cooper, CFM, IFMA Fellow; David Cotts, CFM, IFMA Fellow (retired); Kreon L. Cyros; Marvin Dainoff, M. Dainoff Associates; John Diefenbach, AIA, JIA, PAE International (Japan); Ben DeVries; Jeff Dimond; R. Landon Doggett (retired); John Dues; Dr. Francis Duffy, DEGW Architects (UK); Marty Dugan; Raymond G. DuPont; Lawrence L. Edge, Medallion Group LLP; Behrooz (Ben) Emam, AIA, CFM; Eleanor Estacio, CoreNet Global; Anne Fallucchi, IFMA Fellow (retired); Carol Farren, CFM, IFMA Fellow, Facility Management Worldwide; Rudy Flores; Bruce Kenneth Forbes; John Fox (Australia; retired); Geoff Gidley, Facility Management Solutions Ltd. (UK); George Graves, IFMA Fellow (retired); Robert Gross, IFMA Fellow, Vanguard; Jeffrey Hamer, Asset Direction, Inc.; Philip E. Hammel, Honeywell; Dorothy Harris; Ernesto Hernandez; C. Frederick Hess, CFM, IFMA Fellow; James Hickey, CFM, IFMA Fellow (retired); Gerry E. Higgs, CFM, PE; Melanie Hill, CoreNet Global (UK); Ken Hitchcock, Marcus & Millichap; Gerald Hubbard, CFM, IFMA Fellow; John Igoe; David Jarman, Price Waterhouse; Lois Johnson; Samuel Johnson, CFM, IFMA Fellow; Diana Jones, The Home Depot; William Joseph; Maury Keiser, CFM, IFMA Fellow (retired); Peter S. Kimmel, AIA, IFMA Fellow; Prentice Knight, CoreNet Global; Sigeru Kuwabara, NTT Power and Buildings (Japan); Alex Lam, CoreNet Global (Canada); Earnie C. Leake, CFM, IFMA Fellow; TaeGoo (Ty) Lee, System-O Consultants (Japan); Scott Levitan, Georgia Institute of Technology; Chad Lewis; Dennis Longworth, CFM, ASAE Fellow; Harry Ludwig, King & Spalding; Erik Lund, IFMA Fellow (retired); Jean Lusso, Kerry Lydon (Belgium); Barry Lynch, AIA; Dr. Josef Mack, Facility Management Institute (Germany); Diane MacKnight, CFM, IFMA Fellow; Professor Stephen Margulis, Grand Valley University; Jon Martin, Carter; Mike McGahagin; Mary McGrath, CFM (Canada); Sandra Moss Mallory, Smith, Gambrell & Russell; Jim Moss, Applied Software; Sharon Mount, AIA; Motosugu Nakatsu (Japan); Christine H. Neldon, CFM, IFMA Fellow, St. Paul Travelers; Makato Ogawa, Nomura Research Institute (Japan); Richard Palmer, CFM; Hazel Pankey, Conway Data, Inc.; Jack Parker, Corporate Space Services; Joel Parker, Conway Data, Inc.; Sterling Pettefer; Norman Polsky (retired); Joy Pooler; Helen Rauch, Helen Rauch & Associates; Alex Robertson, Siemens Real Estate, Inc.; J. Peter Ruys, AIA, ASID, Ruys & Company; Mel Schlitt, The Merchandise Mart; Michael Schley, FM Systems; Dr. William R. Sims, CFM, IFMA; Henry Howard Smith, AIA (retired); Stan Stanton, Huntress Executive Real Estate Search; Richard Stonis, Associated Space Design; David Taylor (Australia); Tom Tillman; Dr. Andres F. van Wagenberg, Eindhoven University of Technology (Netherlands); Larry Vanderburgh, BOMI; Duncan Waddell, Corporate Facility Management Resources (Australia); Ken Walker, UPS Supply Chain Solutions; Ray Wallace; Lei Wu (China); Syd Welch; Martha Whitaker; Barry J. Yach; Don Young, IFMA.
The authors further acknowledge and thank the following professional associations and education organizations whose leadership, vision, sharing, research, educational programs, and service to members and students help shape and provide guidance for the evolution of the facility management profession and practice:
Thanks also to John Czarnecki of John Wiley & Sons, Inc., for his patience and support with this second edition.
Finally, we wish to thank those professionals and organizational leaders who care and who persevere in providing a humane, environmentally friendly, safe, and secure work environment for their colleagues, clients, and employees.
E.P.R.
R.K.B.
P.D.L.
EDMOND P. RONDEAU, AIA, CFM, IFMA Fellow, is the general manager, real estate, in the Real Estate Development Office, where he manages owned and leased property for the Georgia Institute of Technology in Atlanta, Georgia. Previously, Ed was the director of global operations for Conway Data, Inc., an Association Management Company based in the Atlanta, Georgia, area, where he was responsible for association management–related assignments primarily outside of North America. Ed has been responsible for the International Development Research Council’s member and chapter development programs, world congresses, and staff for Asia, Australia, Europe, and Latin America regions. His work experience includes serving as the director of consulting services for the Integrated Facility Management business unit of Johnson Controls, Inc.; as the manager of corporate real estate for Contel Corporation; as the vice president of property management for the National Bank of Georgia; as the vice president of real estate and construction for Arby’s, Inc.; as a construction manager for the Coca-Cola Company; and as a staff architect for Auburn University.
Ed holds a master’s in business administration in real estate from Georgia State University and a bachelor of architecture from Georgia Tech, is a registered architect in Georgia, holds a NCARB certificate, and is a Certified Facility Manager. He was the 1988 president of the International Facility Management Association (IFMA), served as the 1990 chair of the IFMA Foundation, was elected an IFMA Fellow in 1992, and was the 1994/1995 president of the IFMA Real Estate Council. He served on the board of directors for the Board Certified in Corporate Real Estate (BCCR), was a member of the IDRC Financial Review Board, was a trustee of the IFMA Foundation, has served as the chair of the Advisory Committee for the Georgia Tech Integrated Facility and Property Management masters degree program and is a member of the Core Global Finance Committee.
He has worked for spoken on corporate real estate and facility management issues throughout the United States and internationally, including in Argentina, Australia, Austria, Belgium, Brazil, Canada, China, Cuba, Denmark, Japan, Germany, Hong Kong, India, Italy, Mexico, the Netherlands, New Zealand, Philippines, Singapore, South Korea, Spain, Sweden, Trinidad and Tobago, the United Kingdom, and Venezuela. Ed has authored numerous articles and is a coauthor of two books on corporate real estate and three books on facility management. He is the author of numerous facility management and corporate real estate articles, the author of Principles of Corporate Real Estate, a coauthor of Managing Corporate Real Estate and Managing Corporate Real Estate: Forms and Procedures, the coauthor of the real estate management information system LeaseKiT, and the coauthor of the capital project budget tracking system CaProKIT. He is the lead author of the book Facility Management, which received the 1997 IFMA Author of the Year Award; is coauthor, with Dr. Walther Moselener, of Facility Management 2, published in Germany; and is the coauthor of The Facility Manager’s Guide to Finance and Budgeting, for which he received the 2004 IFMA Distinguished Author Award.
ROBERT KEVIN BROWN, PhD, CRE, AICP, is president, Robert K. Brown & Associate. He is the chair emeritus of real estate and the originator and former chairman of the Department of Real Estate, College of Business Administration, Georgia State University. He served previously as corporate director of real estate, Rockwell International Corporation; vice president, Rockwell Graphics Systems Group; and president, Narland Corporation and Standard Property Land Company, wholly owned Rockwell subsidiaries.
Dr. Brown holds a bachelor’s degree from the Johns Hopkins University and master’s and doctoral degrees from the University of Pittsburgh. A nationally known lecturer and consultant on asset management strategies to many Fortune 500 companies, he is the codeveloper of the first commercially available PC-based corporate real estate asset management system. He is the author of numerous articles and 11 books on real estate, including Managing Corporate Real Estate, The Real Estate Primer, Essentials of Real Estate, Real Estate Economics, and Corporate Real Estate: Executive Strategies for Profit Making, and is the coauthor of Managing Corporate Real Estate, Managing Corporate Real Estate: Forms and Procedures, and Real Estate Asset Management: Executive Strategies for Profit Making. Dr. Brown was the contributing editor of the corporate real estate column in National Real Estate Investor Magazine. He also serves as a member of the Asset Management Editorial Board of National Real Estate Investor Magazine and the board of advisors of The Arnold Encyclopedia of Real Estate.
Dr. Brown is a member of the American Society of Real Estate Counselors (GRE) and served as a member of its board of governors. He holds memberships in the American Real Estate Society (ARES); American Institute of Certified Planners (AICP); International Facility Management Association (IFMA); and International Association of Corporate Real Estate Executives (NACORE), where he served on the board of directors. He served as a member of the board of directors of Underground Festival, Inc., the governing board of Underground Atlanta. More recently, Dr. Brown served an appointment as visiting professor in the Graduate School of City Planning, College of Architecture, Georgia Institute of Technology.
PAUL D. LAPIDES, CPA, MBA, is a professor of management and entrepreneurship at the Michael J. Coles College of Business at Kennesaw State University (Georgia), where he founded and serves as director of the nationally recognized Corporate Governance Center.
Mr. Lapides is a member of the board of directors of Sun Communities, Inc. (NYSE: SUIT), and the Board of Directors Network, Inc. (BDN), and serves on the advisory boards of the National Association of Corporate Directors (NACD) and the Newman Real Estate Institute at Baruch College. His business and consulting experience includes advising hundreds of start-up, growth, and midmarket companies, as well as many of America’s Fortune 500 companies.
Mr. Lapides is the author of more than one hundred articles and twelve books, including Managing and Leasing Residential Properties; coauthor of Managing Corporate Real Estate, Managing Corporate Real Estate: Forms and Procedures, Real Estate Investment: Strategy Analysis Decisions; and contributing author of The Public REIT Legal Source, Real Estate Investment Trusts, Problem Real Estate, Real Estate Syndication Manual, Real Estate Transactions, and The Arnold Encyclopedia of Real Estate. A frequent speaker at business, professional, and academic organizations, his opinions have appeared in more than 500 publications and on national and local television and radio.
Mr. Lapides received a bachelor’s degree with honors in economics from the Wharton School of the University of Pennsylvania and a master’s of business administration from New York University. Prior to joining the faculty at Kennesaw State University, he was an adjunct professor of real estate at New York University and Columbia University.