Delivery Management Guidelines Delivery Process 3 - Operations &...

Delivery Management Guidelines

Delivery Process 3 - Operations & Maintenance

Version control Version

9-1

Date 2010-10-18

Status Approved

Operations & Maintenance

Delivery Management Guidelines: Delivery Guide 3 - Operations & Maintenance 2

The IDMS

Prov Infr Strat

G1(a) G2G1(b)U-AMP C-AMP

PC1

PF1.4PF1.3 PF2.1 PF2.2 PF2.3 PF3 PF4PF5

PF1.1 PF1.2

DP1: Portfolio Management

DP1-2 Programme ManagementDP1-1 Infrastructure Planning

Develop/review U-AMP (including prioritised MTEF works list)

Develop/review C-AMP (incl portfolio level Work Plans)

Develop /review Constr

Proc Strat

Develop /review

IPMPManage Implementation

Authorise Implementation

Monitor & Control

Close Out

G3 G4 G5 G6(a) G6(b) G7 G8PC2

PC3

PC4a

PC5

PC4b


T1 T2

PEP2PEP1 IPIP PEP3

DP2: Project Management

DP2-1 Implementation Planning

Prepare Packages

Define Packages

Develop/Review IPIPs (Prgr & Proj level)

DP2-2 Design

Design devlpmt

Detailed design

Compile MFC Info

DP2-3 Works

Construct / Deliver works

Handover works

DP2-4 Close Out

Contracts Close Out

Adminstv Close Out

PEP4 PEP5 PEP6 PEP7


G8

DP3: Operations & Maintenance

DP3-1 Recognise & accept assets

DP3-2 Mobilisation for Facilities Mgt

DP3-3 Operations DP3-4 MaintenanceDP3-5 Demobilisation

of Facilities Mgt



AStructure of the Infrastructure Delivery Management Toolkit (IDMT)

Delivery Management Guidelines

Management Companion

Infrastructure Delivery Management System(IDMS)

Practice guides

PG1: Prov InfrStrategy

PG2: ConstrProc Strat

PG3: Perform

Mgt



Table of Contents 1. Purpose of this module ..................................................................................................................................7

2. Where am I within the Delivery Management Guidelines ..............................................................................7

3. Introduction.....................................................................................................................................................7

3.1 Preface ...................................................................................................................................................7

3.2 Process Map ..........................................................................................................................................8

4. Asset Operations and Maintenance Processes ...........................................................................................11

4.1 Recognise Asset and accept from Project ...........................................................................................11

4.1.1 Sub-process 1.1: Accept the physical asset at handover ................................................................12

4.1.2 Sub-process 1.2: Ensure that relevant information is captured into the asset register ...................12

4.1.3 Sub-process 1.3: Recognise the asset into the accounting system ................................................12

4.2 Mobilisation for Facilities Management ................................................................................................13

4.2.1 Sub-process 2.1: Mobilise user and custodian staff to manage assets ..........................................13

4.2.2 Sub-process 2.2: Ensure that Facilities Management services are in place and operational .........14

4.3 Operations of assets ............................................................................................................................14

4.3.1 Sub-process 3.1: Conduct Facilities Management ..........................................................................15

4.3.2 Sub-process 3.2: Conduct Engineering Infrastructure Management ..............................................16

4.3.3 Sub-process 3.3: Conduct Property Management...........................................................................17

4.3.4 Sub-process 3.4: Conduct Condition Assessment Surveys ............................................................17

4.3.5 Sub-process 3.5: Conduct Remaining Life-Cycle Costing ...............................................................18

4.4 Maintenance of Assets .........................................................................................................................18

4.4.1 Sub-process 4.1: Conduct Preventative (Servicing) Maintenance ..................................................19

4.4.2 Sub-process 4.2: Conduct Breakdown Repairs ...............................................................................19

4.5 Demobilisation of Facilities Management ............................................................................................20

4.5.1 Sub-process 5.1: Demobilise Facilities Management ......................................................................20

5. Asset management team general activities .................................................................................................21

5.1 Planning of tasks/activities ...................................................................................................................21

5.2 Execution of tasks/activities .................................................................................................................21

5.3 Logging of performance and task results.............................................................................................22

5.4 Analysis of data ....................................................................................................................................22

5.5 Corrective action/improvement ............................................................................................................22

5.6 Feedback ..............................................................................................................................................22

6. Acquisition of assets ....................................................................................................................................23

6.1 Acquisition of land ................................................................................................................................23

6.2 Acquisition of immovable assets other than land ................................................................................23

7. Disposal of assets ........................................................................................................................................23

8. Asset Hierarchy ............................................................................................................................................24

9. Technical Condition Assessment Surveys...................................................................................................24

10. Asset management elements of Operations & Maintenance ..................................................................25

10.1 Facilities Management .........................................................................................................................25



10.1.1 Introduction ...................................................................................................................................25

10.1.2 Facilities Management: Soft services ...........................................................................................25

10.1.3 Facilities Management: Hard Services .........................................................................................27

10.1.4 Building repairs and preventative maintenance ...........................................................................27

10.1.5 O&M Planning ..............................................................................................................................27

10.1.6 Procurement .................................................................................................................................28

10.2 Infrastructure (Engineering) Management ...........................................................................................28

10.2.1 Introduction ...................................................................................................................................28

10.2.2 Engineering infrastructure ............................................................................................................28

10.2.3 Infrastructure repairs and preventative maintenance ..................................................................28

10.2.4 O&M Planning ..............................................................................................................................29

10.2.5 Procurement .................................................................................................................................29

10.3 Property Management .........................................................................................................................29

10.3.1 Introduction ...................................................................................................................................29

10.3.2 Acquisition of property ..................................................................................................................29

10.3.3 Managing rates and municipal services payments ......................................................................30

10.3.4 Lease management ......................................................................................................................30

10.3.5 General advice on property management ....................................................................................30

10.3.6 State Land Management ..............................................................................................................31

10.3.7 Maintenance Management ...........................................................................................................31

10.4 Asset Register ......................................................................................................................................31

10.4.1 Introduction ...................................................................................................................................31

10.4.2 Ownership of Asset Register ........................................................................................................32

10.4.3 Purpose of Asset Register ............................................................................................................32

10.4.4 Typical Information captured in an Asset Register ......................................................................32

10.4.5 Users of Asset Register ................................................................................................................32

11. Maintenance.............................................................................................................................................32

11.1 Introduction...........................................................................................................................................32

11.2 Maintenance process ...........................................................................................................................33

11.3 Definition of Maintenance ....................................................................................................................33

11.4 Maintenance activities ..........................................................................................................................33

11.5 Types of maintenance ..........................................................................................................................33

11.5.1 Preventative maintenance ............................................................................................................34

11.5.2 Essential maintenance .................................................................................................................34

11.5.3 Condition-based works .................................................................................................................34

12. Remaining life-cycle costing ....................................................................................................................34

12.1 Introduction...........................................................................................................................................34

12.2 Remaining life-cycle costing elements .................................................................................................34

12.3 Time-value of money............................................................................................................................34

12.4 Costing of Asset Management: Operations .........................................................................................35

12.4.1 Utility costs, rates and taxes .........................................................................................................35



12.4.2 Facilities Management: Soft Services ..........................................................................................35

12.4.3 Hard services and maintenance ...................................................................................................35

12.4.4 Major upgrades, refurbishments and renovations........................................................................36

12.4.5 Disposal ........................................................................................................................................36

13. Risks ........................................................................................................................................................36

14. O&M Performance Management .............................................................................................................36

14.1 Typical O&M Input, Activity and Output Indicators ..............................................................................37

14.1.1 Input indicators .............................................................................................................................37

14.1.2 Activity indicators ..........................................................................................................................37

14.1.3 Output indicators ..........................................................................................................................37

14.2 Performance of the individual ..............................................................................................................38

Table of Figures Figure 1: Portfolio Management in relation to other delivery processes ..............................................................7 Figure 2: Asset Operations and Maintenance Process Map ..............................................................................10 Figure 3: Sub-process: Asset Recognition ..........................................................................................................11 Figure 4: Sub-process: Mobilisation ....................................................................................................................13 Figure 5: Sub-process: Operations of Assets .....................................................................................................15 Figure 6: Sub-process: Maintenance of Assets ..................................................................................................19 Figure 7: Sub-process: Demobilisation ...............................................................................................................20



1. Purpose of this module The purpose of this module is to assist users in the operations and maintenance of infrastructure. It will provide users in fulfilling their obligations by following the following processes:

1) Recognise and accept assets 2) Mobilisation for Facilities Management 3) Operations 4) Maintenance 5) Demobilise Facilities Management

2. Where am I within the Delivery Management Guidelines

Figure 1: Portfolio Management in relation to other delivery processes

3. Introduction

3.1 Preface Asset Management: Operations and Maintenance (O&M) consists of all operational work from the moment assets have been recognised into the asset register and handed over to Operations from Projects until the disposal of an asset. It takes into account the strategic and decision-making work that takes place during the

Practice guides

PG1: Strategy

PG2: Constr

Proc Strat

PG3: Perf Mgt



asset strategy determination, asset portfolio planning and physical project implementation processes. The O&M process is linked to the overall service delivery plan of any department. Figure 1 above shows the relationship to other modules in the Delivery Management Guideline. This Module addresses the following major topics related to Asset O&M, namely:

Asset operations processes o Asset recognition o Mobilisation for Facilities Management o Asset operations, which include

Facilities management Engineering infrastructure management Property management Condition assessment surveys Remaining life-cycle costing.

o Maintain assets o The demobilisation of Facilities Management.

Specific explanations on the following topics related to O&M: o Acquisition and disposal of assets including land o Condition surveys o The asset register o Asset operations management o Maintenance o Remaining life-cycle costing.

The Reader is advised to consult the following guidelines on immovable asset management when studying this Module, namely:

User Asset Management Plans, Guideline for Users, National Department of Public Works, Version 1, Dated 20 October 2008

Custodian Asset Management Plans, Guideline for Users, National Department of Public Works, Version 1, Dated 20 October 2008.

Note on the use of the term Asset versus Infrastructure: While the Delivery Management guideline generally uses the term Infrastructure to encompass assets, in tis module the majority of the body of knowledge stems from the “Asset Management” industry. Consequently, in order to maintain continuity with the body of knowledge relating to the operations and maintenance, the term “Asset” is generally used in this module as opposed to infrastructure.

3.2 Process Map Figure 2 below depicts the Level 2 processes for the Asset O&M and indicates the most important inputs and outputs from and to other asset management processes.



Recognise

asset and

accept from

Projects

Mobilisation for

Facilities Mgmt

Operations

of assets

Demobilisation of

Facilities Mgmt

Maintenance

(including

costing)

1

2

3

5

Capital Asset including a facility

Facility ready

for operations

Demobilisation Plan

Asset ready to be disposed of and

feedback to U Amp and C Amp

process namely Strategic Planning,

Portfolio Planning and Project

Implementation

Facilities Management

(soft & hard services)

Infrastructure Mgmt

(Custodian)

Property Mgt

(Custodian)

Condition Assessment

Surveys

Remaining Life Cycle

Costing

Trigger: Actual Handover from

Project Implementation and & U-

Amp (Acquisition Plan) from

Portfolio Planning

CIDB Toolkit Level 2 O&M Process

Engineering

Infrastructure Asset

U Amp (Operations Plan)

from Strategic Planning and

C Amp (Approved

maintenance activities and

cost) from Portfolio Planning

Implementation

Maintenance Plan

U Amp (Immovable Asset Surrender Plan) from

Strategic Planning) and C Amp Disposal Strategy

from Portfolio Planning

4

Feedback to Project

Implementation processes that

assets are ready for Major

Upgrades and Refurbishments

Feedback to Portfolio Planning

on the status of assets and cost

of maintenance

Feedback to Portfolio Planning

on condition of assets and

budget requirements for O&M

Approved

Infrastructure

Programme

Management Plan

(IPMP)



Figure 2: Asset Operations and Maintenance Process Map



4. Asset Operations and Maintenance Processes O&M is the process of receiving assets into the portfolio of assets, managing and maintaining it over the life cycle and eventually demobilising the asset when required to be terminated. Excluded from Asset O&M are the strategy determination, portfolio planning, acquisition planning and acquisition implementation processes. Acquisition planning and implementation not only look at new assets but also assets that need to be upgraded, refurbished or renovated or assets to be disposed of. By definition, Asset O&M includes the day to day management of assets such as Facilities Management, Property Management and Engineering Infrastructure Management, all of which will require maintenance, costing and budgeting, and maintaining an asset register. Although Asset Disposal is seen as one of the life-cycle phases of an asset it does not form part of O&M. The physical disposal of an asset will be planned and executed by Projects whereas the demobilisation of facilities will be planned and managed by O&M. Demobilisation of facilities that are earmarked for upgrades, renovation or refurbishment will also be planned and managed by O&M and then handed over to Projects for the physical execution. The generic process of Asset O&M is covered by the following sub-processes:

Asset recognition

Mobilisation for Facilities Management

Operations of assets

Maintenance

Demobilisation of Facilities Management

4.1 Recognise Asset and accept from Project The purpose of this process is to recognise the asset into the asset register and accounting system. Figure 3 below shows the breakdown of the sub-process “Asset Recognition”.

Figure 3: Sub-process: Asset Recognition

Sub-process: Asset Recognition

Handover acceptance and documentation

Trigger: Asset ready for handover

Notification to Project

Implementation and

Mobilisation team if Facility

Updated asset register and

ready to be accessed and

notification to O&M team

1.1

Conduct physical

handover review

Enter asset

information into

asset register

1.2

Recognise

asset into

accounting

system

Feedback to asset register and

Portfolio Planning

1.3



4.1.1 Sub-process 1.1: Accept the physical asset at handover The purpose of this sub-process is to ensure acceptance of the asset by O&M prior to the handover of the asset by the Contractor to Projects. This sub-process is subsequent to the Gate Approval (refer to the IDMS Gate 8) to handover the project from the Contractor to Projects, which also requires the input and acceptance by O&M staff and includes the following steps:

Get prior warning of handover date from the contractor to projects

Walk through and assessment of asset deliverables including serviceable systems

Identify non-performance against asset operational requirements

Establish snagging lists/defects

Verify all required spares according to specifications

Verify all requirement documentation such as O&M manuals and as-built drawings

Verify vendor items and vendor information

Give Projects the go-ahead to continue with the handover from the contractor.

It is important that O&M takes part in the asset handover process and to ensure that all elements of the asset are exactly as what was specified and in a serviceable condition and that the complete set of documents is handed over.

Although O&M will be aware of what assets are to be handed over (as indicated in the input document, namely the Acquisition Plan from the U-AMP (GIAMA 8.2)), they should also receive an early warning notice when the actual handover event will take place.

Prior to the final and official handover of the asset at practical completion, the team consisting of Projects, O&M and the Contractor should have visited the site and agreed on completed elements as well as the non-completed elements including the snag list. This sub-process ends with the issuance of a “go-ahead” notice to Projects to complete the handover process from the Contractor.

4.1.2 Sub-process 1.2: Ensure that relevant information is captured into the asset register

The purpose of this sub-process is to ensure that the required initial information on the new asset is captured into the asset register. (Please see Asset Register Guideline in the IDMS for the Asset O&M Delivery Process 3).

The basic steps for this sub-process are:

Obtain the required information for the asset register

Validate information

Enter the information into the asset register.

It is important to capture the required and validated information in the Asset Register at the stage of handover and to ensure the physical or electronic storage of all documentation.

The sub-process starts when Projects have submitted the final asset information to O&M and ends when the information is captured in the asset register. Important validated information that needs to be captured for accounting purposes is the final acquisition cost of the asset and the date of practical completion.

The basic requirements for maintaining an asset register are also further explained in this module.

4.1.3 Sub-process 1.3: Recognise the asset into the accounting system



This sub-process starts when the general asset information is captured in the asset register and that Finances is notified as such. The basic steps are:

Obtain asset value

Obtain Asset identification info

Verify and validate info

Enter information into the accounting system.

The sub-process ends when a confirmation notification is sent out from Finances that the asset is entered into the accounting system.

4.2 Mobilisation for Facilities Management The purpose of the process is to prepare a new facility for occupation and to ensure that all internal and Facilities Management (FM) service providers are ready and trained to manage the facility (asset). Figure 4 below shows the breakdown of sub-process Mobilisation.

Figure 4: Sub-process: Mobilisation

4.2.1 Sub-process 2.1: Mobilise user and custodian staff to manage assets This sub-process starts well in advance to ensure that the facility is ready at least one week before occupation to allow for unforeseen systems failures as well as to ensure that all FM staff are acquainted with what they should do. It includes the following steps:

Identify user and custodian staff well ahead of the start-up of operations

Place and train staff, ready to mobilise facilities management contracts and services.

The sub-process is triggered by the following documents:

Acquisition plan from U-AMP (GIAMA 8.2). Take note of the projected project completion (handover) dates and start planning accordingly

Final notification when handover of facility will be completed and when access will be given to O&M

Sub-process: Mobilisation

Facility/infrastructure staff ready to operate

facility

Trigger: Notification of successful

handover

Early notification /confirmation

to User and Custodian of date

when facility can be occupied

Feedback to asset register and

Portfolio Planning

Asset ready for occupation -

FM services ready ,

Notification to User

Mobilise user and

custodian staff to

manage asset

Ensure that Facility

Management Services

are in place

2.1

2.2

Approved

Infrastructure

Programme

Management Plan

(IPMP)



The final approved Infrastructure Programme Management Programme (IPMP).

It is imperative that O&M continuously follow up with Projects on the expected date for practical completion and handover so that the planning and implementation of the mobilisation process can be completed in time for occupation. The sub-process ends with the notification of readiness of user and custodian staff to continue with mobilisation process.

4.2.2 Sub-process 2.2: Ensure that Facilities Management services are in place and operational

The purpose of this sub-process is that the trained user and custodian staff now ensure that all FM contracts are in place and that the FM service providers have mobilised to conduct facilities management tasks and also to ensure that they have the skills and know-how how to manage and operate the building and other engineering systems and structures. Basic activities in this sub-process are:

Obtain the projected practical handover and user occupation dates of facilities well in advance

Conduct a facilities management services requirement

Establish a Statement of Work and prepare tender documentation for facilities management services

Follow the procurement process (See Practice Guide 2 of the Toolkit) to appoint facilities management service providers

Appoint service providers after the tenders have been adjudicated and contracts have been awarded

Conclude contracts (including signing thereof)

Provide access to the facilities to the facilities management service providers

Ensure via the contract the readiness of all soft and hard services at least 1 week prior to occupation by the user

Notify user of readiness of facilities management services.

Input to the sub-process is the Acquisition Plan from U-AMP (GIAMA 8.2), notification that the handover process is completed, the availability of all operating and maintenance manuals and that access to the facilities is given to O&M. The sub-process ends with all FM contracts in place, FM services providers are ready to manage FM and a notification is sent to the user that the facility is ready for occupation and use. Some of the areas that need to be ready prior to accepting tenants/clients in a facility are:

Buildings are clean

Furniture and equipment (e.g. movable fire fighting equipment) are placed

Building systems are serviceable

Building monitoring systems are working

Building moving plant (e.g. lifts, escalators) are safe and serviceable

Fires systems are working

Signage is complete

Facility Management support is available e.g. call desk

Security is in place.

The above is only a short list of systems that need to be put in place prior to full operations of an asset. Asset, Facility and Engineering Infrastructure Managers should acquaint themselves with all systems, subsystems, assemblies and components in order to be able to handle any emergency situation with regards to breakdowns or mal-functioning of systems.

4.3 Operations of assets



This phase entails the operational management of all assets and includes facilities management, engineering infrastructure management, property management, technical condition assessment surveys, maintenance of assets and remaining life cycle costing. Figure 5 below shows the breakdown of sub-process Operations of Assets.

Figure 5: Sub-process: Operations of Assets

(Please see U-AMP and C-AMP guidelines in the Roadmap for the DP 3 - Operations and Maintenance).

4.3.1 Sub-process 3.1: Conduct Facilities Management The purpose of this step is to carry out the management of the facilities including planning and budgeting and includes the following activities:

Ensure that the day to day soft services are done properly and that staff and their performance is measured and reported against the contract performance specifications

Ensure that the hard services MEP (Mechanical, Electrical and Plumbing services) are being checked and kept serviceable at all times including HSE systems

Identify and establish inspection plans as per the operating and maintenance manuals and check, test or replace asset systems, subsystems, assemblies or components

Ensure that preventative (scheduled, routine) maintenance plans are drafted. (This could be service provider's task)

Ensure that all breakdowns are being addressed immediately and repairs planned (depending on urgent or non-urgent requirements)

Ensure that facility Condition Assessment Surveys (CAS) are being planned and conducted as per requirements. This CAS refers to the technical condition of the asset

Ensure that soft and hard services including upgrades and refurbishments are being costed for the remaining life cycle of the asset

Ensure that the required funds are allocated and that facilities management contracts are being placed to ensure continuation of services.

Sub-process: Operations of Assets

Trigger: Handover of assets and

completed mobilisation including

Provide remaining life

cycle costing input to

Portfolio Planning

Conduct facilities

management

3.1

Conduct engineering

infrastructure

management

3.2

Conduct Property

Management

3.3

Conduct Condition

Assessment

Surveys

3.4

Conduct remaining

life-cycle costing

analyses

3.5Provide condition assessment

results to Portfolio Planning

O&M Asset Management

U Amp (Operations Plan)

from Strategic Planning and

C Amp (Approved

maintenance activities and

cost) from Portfolio Planning

U Amp (Immovable Asset

Surrender Plan) from

Strategic Planning) and C

Amp Disposal Strategy

from Portfolio Planning

Maintenance Plans

Maintenance Plans

Demobilisation Plans

Approved

Infrastructure

Programme

Management Plan

(IPMP)



Inputs to this sub-process are:

Notification of readiness for user to occupy facilities and that access will be given at a certain date

Operations Plan from U-AMP (GIAMA 8.(3))

Maintenance activities required and approved budget from C-AMP (GIAMA 7.(5))

Immovable Asset Surrender Plan from U-AMP (GIAMA 8.(4))

Disposal Strategy from U-AMP (GIAMA 7.(6))

Final approved Infrastructure Programme Management Plan (IPMP).

Outputs from this process are:

Implementation of preventative maintenance and breakdown repair plan

Facilities demobilisation plans

Checking and inspection plans of all facilities assets

Facilities management operations plans

Facilities management budget requirements.

Please refer to the Facilities Management (FM) Chapter in this Module for further information on the general aspects of FM.

4.3.2 Sub-process 3.2: Conduct Engineering Infrastructure Management The purpose of this step is to ensure the management of engineering infrastructure such as engineering networks and plant, not included under facilities and property management and that it includes the following activities:

Establish plans when Condition Assessment Surveys (CAS) need to be conducted on engineering assets

Conduct CAS’s

Establish a maintenance and repair plan for engineering assets

Establish budget requirements

Ensure funds get allocated to maintenance and repairs

Ensure contracting (follow the procurement process as described in Practice Guide 2 of the Toolkit) with contractors to do the maintenance and repair

Ensure maintenance and repair by contractors, check quality and measure contractor performance as per contract

Establish a remaining life-cycle plan and compare and report against the original plan

Cost the remaining life cycle and compare and report against original life cycle costing

Provide feedback and reports on completed and outstanding work.

Engineering infrastructure includes all engineering networks and plant within the boundaries of the property from the connection points on the property perimeter up to where utilities are taken into a building, which then becomes the responsibility of Facilities Management. The sub-process starts upon receipt of the following inputs:





Disposal Strategy from U-AMP (GIAMA 7.(6)).

The sub-process ends with the following outputs:

Implementation of preventative maintenance and breakdown repair plan

Checking and inspection plans of all engineering assets



Engineering asset management budget requirements. Please refer to the Engineering Infrastructure Chapter in this Module for further information on the general aspects of engineering infrastructure management.

4.3.3 Sub-process 3.3: Conduct Property Management The purpose of this step is to conduct property management. This includes all other property aspects excluding that of Facilities Management and Engineering Infrastructure Management. The basic activities in this sub-process are:

Ensure that property (including land) is acquired according to government requirements in a timely and cost effective manner

Ensure that municipal rates and taxes, and utility bills are being checked for quantities and certified for payment

Manage lease agreements in a cost effective manner (Lessor and Lessee)

Ensure that the asset register is being maintained.

This sub-process starts with the following inputs:

Notification of readiness for the user to occupy the facility and that access will be given at a certain date





This sub-process ends with the following outputs:

Updated land acquisition plan

Analysis report on all utilities bills and consumption trends

Updated leasing records and reports

Updated asset register and reports of any non-compliance items and information in the register.

4.3.4 Sub-process 3.4: Conduct Condition Assessment Surveys The purpose of this sub-process is to ensure that CAS’s are scheduled to take place at regular intervals as per GIAMA and that below standard assets are immediately addressed to improve the asset functionality and to bring it back to the original asset value if required. Although Condition Assessment Surveys (CAS’s) refer to both functional and technical conditions surveys, this conditions assessment survey relates to the technical condition assessment survey only. This process includes the following activities:

Ensure that the user conducts a perception technical condition assessment of all immovable assets occupied and that results are being reported in the U-AMP

Establish a technical condition assessment plan with the aim to conduct the surveys on all assets staggered but within a period of 5 years

Determine manpower requirements (professional, trained, skilled) to conduct the technical condition surveys as per the plan

Budget and get funds approval to implement the technical condition assessment plan

If required, establish a Statement of Work and tender documentation for the procurement process (follow procurement process as per Practice Guide 2 of this Toolkit) to appoint service providers to conduct assessment surveys



Conduct assessment surveys according to the plan and according to the specifications in the contracts and submit Condition Assessment Survey reports.

The sub-process starts with the following inputs:






The sub-process ends with the issuance of Condition Assessment Reports on all assets. Please refer to the Technical Condition Assessment Survey Chapter in this Module for further information on the general aspects of conditions assessment surveys.

4.3.5 Sub-process 3.5: Conduct Remaining Life-Cycle Costing The purpose of this step is to, during the Planning and Budgeting process (in the Portfolio Planning Module), conduct a complete life-cycle costing (LCC) from project initiation until the asset disposal stage including upgrades, refurbishment or renovations. This sub-process only addresses the costing of the remaining life of the asset and includes the following activities:

Determine the cost elements of the remaining asset life

Split cost elements into recurring and non-recurring capital investment costs and into operating sustaining costs

Decide on the operating method and technology required to run technical systems for the remaining life.

Determine cash flows for each costing element per annum and for the decided operating method. Cash flows should be presented in a specific time-value, namely either constant (real) money terms or current (nominal) money terms

Conduct an optimisation analysis (best operating approach and technology for the least cost) and select the best remaining life solution per cost element

For the remaining life selected operating solution and corresponding cash flows, determine the total annual cumulated cash flows

Compare with original life cycle estimates and submit reports.







The sub-process ends with the issuance of the remaining life-cycle costing reports on all assets. Please refer to the Remaining Life-Cycle Costing Chapter in this Module for further information on the general aspects of life-cycle costing.

4.4 Maintenance of Assets The purpose of this sub-process is to attend to the execution of maintenance plans, primarily preventive maintenance, and also the repair of breakdowns.



Please refer to the Maintenance Chapter in this Module for further information on the general aspects of maintenance. Figure 6 below shows the breakdown of sub-process Maintenance of Assets.

Figure 6: Sub-process: Maintenance of Assets

4.4.1 Sub-process 4.1: Conduct Preventative (Servicing) Maintenance The purpose of this step is to attend to the implementation of the preventative maintenance plans.

Instruct the maintenance service provider to implement the preventative maintenance plan

Ensure records and warranty documentation for all maintenance completed

Monitor performance of the service provider as per contract

Consolidate monthly maintenance activities, analyse and submit a monthly preventative maintenance report.







The sub-process ends with the issuance of preventative maintenance reports.

4.4.2 Sub-process 4.2: Conduct Breakdown Repairs The purpose of this sub-process is to attend to the work to be undertaken when a sudden breakdown of a system or damage to an asset has been reported. It includes the following activities:

Accumulate reports on breakdowns and establish a monthly prioritised repair schedule

Instruct the repair service provider to repair breakdowns as per the schedule

Ensure records and warranty documentation of all repairs completed

Monitor performance of the service provider as per contract

Sub-process: Maintain Assets

Trigger: Maintenance Plan

Feedback to Operations

(Facilities Management,

(Engineering Infrastructure

Management) and Portfolio

Planning. Update d log

Conduct Preventative

(Servicing) Maintenance

Conduct Breakdown Repairs

4.1

4.2

Trigger: Unforeseen breakdown Feedback to Operations

(Facilities Management,

(Engineering Infrastructure

Management) and Portfolio

Planning. Updated log



Consolidate monthly repair activities, analyse and submit a monthly breakdown repair report.

This process starts with the following inputs:






Critical breakdown should be addressed and repaired as soon as possible (depending on the impact on the functionality of the asset and should not be added to the list of repairs that will be included in the maintenance plan to be repaired at a later stage i.e. to become a planned activity). This sub-process ends with breakdown repair reports.

4.5 Demobilisation of Facilities Management Demobilisation of Facilities Management is required for assets that will be disposed of as well as assets earmarked for upgrades, refurbishments or renovations. This process refers to the demobilisation of facilities/engineering plants. Figure 7 below shows the breakdown of sub-process Demobilisation.

Figure 7: Sub-process: Demobilisation

4.5.1 Sub-process 5.1: Demobilise Facilities Management The purpose of this step is to ensure the removal of staff and shut down of selected systems prior to the start of the disposal process or upgrades or refurbishments of an asset and includes the following activities:

Establish a demobilisation plan after receipt of notification of an asset to be disposed of or to be upgraded/refurbished

Implement demobilisation plan and if required removal and storage of re-usable items and systems

Notification of readiness to hand over asset to Projects

Handover of asset to Projects with a stock/inventory/equipment list and condition thereof

Acceptance by Projects of asset from handover by O&M.


Sub-process: De-mobilisation

Trigger: De-mobilisation plan

Notification to Operations

Asset Management team ,

users and custodians that

facility/asset has been de-

mobilised and ready for •Disposal

•Upgrade

•Refurbishment

•Renovation

De-mobilise user

and custodian staff

as well as asset

5.1




Disposal Strategy from U-AMP (GIAMA 7.(6))

Demobilisation plan.

This process ends with the notification that a facility (or engineering plant) is demobilised and that it is ready to be handed over to Projects from Operations.

5. Asset management team general activities The asset management team consists of, for example, the asset manager, facilities manager, engineering infrastructure manager and a property manager. Below are typical activities the asset management team needs to execute.

5.1 Planning of tasks/activities It is important that facility and engineering infrastructure managers plan the day-to-day as well as longer frequency activities such as inspections, services and replacement of critical spares/components as per operating and maintenance manuals. Some of the planning tasks are:

The tender process to contract service providers

Preventative maintenance and timely replacement of critical spares

Procurement of critical spares, storage and inventory control thereof

Monitoring and controlling performance of service providers

The handling of complaints

Prioritising repairs

Meeting with HSE and users in order to continually monitor health, safety and environmental aspects

Building condition assessment.

The above are some of the planning issues that the asset management team needs to consider on a daily/weekly basis in order to act proactively and to ensure proper functioning of all building and infrastructure assets.

5.2 Execution of tasks/activities From a management point of view, it is important that minutes and other records (except asset information - to be discussed in the following paragraph) are being kept, especially on meetings and discussions between the asset management team, service providers and users/customers/tenants. As far as possible there should be feedback to the stakeholders on:

Work/tasks carried out on a weekly/monthly basis

Contractor/service provider performance

Customer/client/tenant satisfaction

Functioning of all key systems

Managing of all staff related to asset management including the staff of service providers

Monitoring of work.

Mangers should be able to schedule all work distinguishing between daily, weekly, monthly and other required actions.



5.3 Logging of performance and task results It is important to keep record of all repairs and breakdowns of system, subsystems, assemblies or components, of which at least the following information should be captured:

Asset number

Subsystem

System

Assembly

Component

Date

What was done/replaced?

Time taken to repair

Level of disruption

Contractor providing spares or repairing the system.

The reason for the above is to build a record of asset breakdowns and incidents which can be analysed, and to build trends and other supporting information on which decisions can be made with regards to changing vendors, material, products or systems.

5.4 Analysis of data It is important to analyse all data related to the assets such as:

Service providers, the cost of their services and the level of performance

Mean time between failures of systems

Mean time to repair

Types of failures

Utility bills (cost and quantities).

The aim of the analysis is to identify areas where failures/breakdowns happen too frequently or, for example, where there is a sudden increase in utility usage and then to identify the cause of the problem and to make recommendations on how to improve the situation. The results of the analyses should be communicated to all stakeholders, for example:

Strategic and portfolio management to highlight negative results within a specific range of assets

Asset managers to take cognisance of failed systems/material and to inform engineering/architectural consultants so that the specifications of any new assets could be amended

Staff/tenants notifying them of unnecessary consumption of energy

Vendors to change specifications or designs.

5.5 Corrective action/improvement The Asset Management team should immediately react upon the results of the above analyses with the aim to identify and implement corrective actions that will ensure proper functioning of all building and engineering systems. It is important to action these improvements in a formal way and to close the activity once completed and accepted. In general, feedback from users should be captured in order to establish the level of satisfaction after the improvement has been implemented.

5.6 Feedback



The asset management team should design and implement a proper feedback and communication system with the aim to disseminate information related to Asset O&M to all internal as well as external stakeholders, users and service providers. The aim is to ensure knowledge of the status of the assets is captured and to enhance continuous improvement of performance.

6. Acquisition of assets Acquisition of assets refers to the acquisition of land, facilities/buildings and engineering assets such as engineering networks and plant of which the result means ownership of the asset.

6.1 Acquisition of land Although acquisition is planned and executed by departments other than Asset O&M, the following generic activities are required to ensure readiness of land in order to build/construct/install an asset:

Preparation to expropriate - the property to be expropriated is identified based on the rationale for expropriation, the notice of intention to expropriate is published and served on the owner and known holders of rights; information about the property is gathered; everyone, including the holders of unregistered rights, is afforded the opportunity to comment

Determination of compensation – the expropriation authority should endeavour to reach agreement on compensation with owners and holders of rights, based on an assessment of fair value by registered valuers, endorsed by the Land Affairs Board

Conduct expropriation - the expropriation authority will take the decision to expropriate based on the principles of administrative justice, serve notice of expropriation on the owner and holders of rights (including unregistered rights) and take ownership and possession of the property

Determination of compensation through a court – should the expropriation authority fail to reach an agreement with the owner/holder on compensation, a court may be to determine the amount of compensation

Ensure accurate property information on the asset register.

6.2 Acquisition of immovable assets other than land Acquisition of other immovable assets other than land is the function of other departments and functions but nevertheless requires input from the Asset O&M team. Some of the aspects and information flow needed prior to and during the acquisition process are shown below:

• Lessons learnt and new requirements for typical buildings and infrastructure and associated technologies especially from facility managers and infrastructure managers

• To continuously request information from Projects with regards to changes in designs and progress on the project made. It is important to know when an asset will be handed over from the contractor to the asset manager

• The asset management team should be involved in the hand over process and with finalising the defects list

• The preparation in providing insurance underwriters with the correct and appropriate information if the asset is needed to be insured.

• Ensure the initiation of a mobilisation process even before the handover of the asset so that the asset can be utilised and occupied as planned with all systems and services ready and working.

7. Disposal of assets

The decision to dispose of an asset is taken at strategic and portfolio level but based on input given by the asset management team. The asset management team will be responsible to plan for the demobilisation of services but the Project team will be responsible for the specification and contracting



for the final demolishing of the asset and reinstating the land (if required) to environmental minimum standards. Although a final stage/phase in the product (asset) life cycle, an asset manager needs to take the following into consideration when planning for the disposal of an asset and providing advice to other functions:

Plan to dispose of assets identified for disposal in C-AMP (timing & methodology)

Cause minimum disposal value to be determined and approved in terms of the State Land Disposal Act, 1961 and the Land Affairs Act, 1987 (National) or relevant Provincial Land Administration Act (Provincial).

Develop the disposal brief (all disposals) and the specification for bid process, except in the case of inter-governmental transfer. (Bid process should ideally be performed by SCM Unit with input from Property Management)

Monitor the implementation and adherence of the conditions of contract and raise debtor invoice

Initiate corrective action where required

Ensure accurate update of the asset register.

8. Asset Hierarchy It is important to categorise assets into an asset hierarchy according to which information can be captured in an asset register and also according to which records could be kept on operations and maintenance aspects. Below is an example of how assets could be categorised: At the highest level is the facility/complex, which will include the land, engineering infrastructure as well as all buildings

The total land parcel could be divided into separate land pieces

An engineering asset/system could be divided into the following categories o Engineering asset: pump room

Engineering system: pump system

Engineering subsystem: a pump o Engineering assembly/component: a flange

A building asset could be divided into the following categories: o A building: office block

A building system: The fire system

A building subsystem: fire detection o Assembly/Component: a sensor.

9. Technical Condition Assessment Surveys During the operations period of an asset, continuous condition surveys (ideally every two to three years but within a 5-year period according to GIAMA) need to be conducted and the results logged for further use in preparing the User Asset Management Plan (U-AMP) and Custodian Asset Management Plan (C-AMP). It is important to have updated data on the condition of all assets and to analyse this data with the aim to maintain assets at the required condition levels and functionality and to improve conditions where required. Condition surveys should be planned and scheduled and should form part of the functions of the Asset Management team’s responsibilities.

Condition surveys should cover all assets i.e. buildings/facilities, engineering infrastructure and all systems, subsystems, assemblies and components related to these assets. It is further important that assets are identified and tagged according to an asset hierarchy and that results of these condition surveys are clearly be linked to this asset identification and tagging.



10. Asset management elements of Operations & Maintenance

In general, the operational management of assets is divided into Facilities Management and Engineering Infrastructure Management and should be managed by the asset management team as described in the paragraphs that follow.

10.1 Facilities Management

10.1.1 Introduction Facilities Management (FM) focuses on the day to day management of facilities such as office blocks, clinics, schools and all buildings where there is a building system and a human being interface. Facilities management includes:

Facilities Management Hard Services - such as planned preventative maintenance, servicing and repairs and often referred to as MEP (Mechanical, Electrical and Plumbing) systems within a building or facility. All maintenance work on building systems rests under Hard Services

Facilities Management Soft Services - such as cleaning, catering, security, fire safety, waste management, reception services, etc.

Other important aspects of Facilities Management are:

Technical assurance to ensure achievement of value for money and to comply with relevant regulatory measures and client objectives

FM links to the procurement process (procuring/contracting services - (see Practice Guide 2 of the Toolkit)

FM could, but for Government generally does not, include typing, secretarial services, corridor copying, switchboard, fleet administration, shuttle bus and postal services (post opening, internal distribution and post despatch)

FM services can be supplied by a managing agent or several direct providers. Services can be all inclusive, bundled according to organisational needs or acquired on a single service provision basis

It is the role of the facility management function (whether it is a separate department or small team) to coordinate and oversee the safe, secure, and environmentally sound operations and maintenance of these assets in a cost effective manner aimed at long-term preservation of the asset value

Services such as occupational health, safety and environmental management are usually monitored and inspected by HSE (Health, Safety & Environment) officials but it will be the responsibility of the FM team to ensure that systems are functioning as required and to comply with minimum HSE standards and statutory requirements

The function of business continuity planning is usually given to the risk manager who will then liaise with the FM team on building system continuity aspects. Business continuity with regard to information management will be the responsibility of the IT department and not FM.

10.1.2 Facilities Management: Soft services A check list of the most important soft services is given below and the users are advised to use it accordingly to ensure that all aspects of Soft Services are being addressed at all times and as per the requirements by the Asset Management team:

Internal cleaning o Toilets



o Desks and workstations

o Floors

o Fabrics

Gardening and Landscaping o Maintenance

o Grass cutting

o Weeds

o Walkways and people access routes

Waste management o Garbage collection/removal

o Collection/disposal/recycling

Sewage and water tankering and storage

External cleaning o Windows

o Car parks

o Internal roads

o Gutters

o Drains

Cleaning of roads, paved areas etc

Security point duty (guards, access control, ops room) o Operating CCTV, control rooms, other security systems

o Respond to alarms, control people

o Escorting cashiers, car park security, reception, ad-hoc security

Monitoring of building systems

Energy and utilities management

Office, parking allocation and control

Help desk, complaints

Signage

Porterage o Off-loading, handling, relocation within and between sites

Water testing (health e.g. regular tests for Legionella)

Catering facilities (including restaurants, cafes etc) o services such as vending machines

o equipment such as ovens grills, hotplates

Lighting (bulbs i.e. replacement)

Health, safety and environment compliance checks o To be monitored by qualified HSE staff

o Systems to be maintained by FM

Keys and locks

Space Planning, work stations

Customer Service Centre

Office and catering equipment; and furniture Maintenance o Desks

o Chairs

o Fans

o Cabinets



o Clocks

o Testing of portable appliances

Building maintenance o Ceiling, walls, windows, glazing, doors, plaster, paint, dry walls

10.1.3 Facilities Management: Hard Services Facilities Management: Hard Services are related to all building systems referred to as MEP (Mechanical, Electrical and Plumbing) systems, of which the following is an example check list to be used by the Facilities Manager:

MEP (building mechanical, electrical and plumbing) o Mechanical such as lifts, escalators, pumps o Electrical such as alarm systems, PABX, transformer rooms, o Wet services such as plumbing, water retention (storage), distribution, drainage.

Lifts, escalators

Fire detection, alarm, suppression

HVAC (Heating, ventilation, air conditioning)

Telecom systems

Security systems e.g. CCTV, access control

Large water features (lakes, pump rooms, water network, lining etc)

Movable equipment e.g. sliding doors

Structure of building.

10.1.4 Building repairs and preventative maintenance Although Maintenance per se is discussed separately in this document, the following paragraph describes

the basic requirements and functions to be executed under building repairs and preventative maintenance:

Inspect assets to ensure that they meet statutory requirements

Plan activities for all scheduled and statutory preventative maintenance

Acquire contractors (term contracts, standing offers and supplier register)

Receive maintenance requests from call centre and select appropriate contractors

Place orders with selected maintenance contractors

Manage expenditure against budget

Monitor performance of contractors

Inspect ongoing and completed works and authorise expenditure.

The user should take note of the lengthy process and complexity in preparing maintenance tenders and to get a suitable and qualified contractor (service provider) on site to carry out the required inspections and maintenance work and should therefore start with the planning and procurement process well in advance.

10.1.5 O&M Planning The FM should be continuously conducting planning exercises in order to timely get orders/contracts/tasks in place with the objective to maintain a high level of performance of which the following are examples:

Sourcing policy (in-house, in-sourced, outsourced, co-sourced)

Service and level of service planning

Space planning

Performance and service level specifications.



An important aspect of the planning exercise is to establish a strategy for procurement and contracting of facilities management service providers e.g. contracts for single services or contracts addressing multi-services. Contracting of services should be planned in such a way that contracts start and end in different months (staggered) to reduce the risk of all services ending at the same, which will increase the risk of not having new contracts in place for all of them depending on the strategy.

10.1.6 Procurement The FM should take cognisance of the procurement process (See Practice Guide 2 of the Toolkit) and the time it would take to bring a service provider on site and should therefore start well in advance with the preparation of tender documentation and manage the process with the aim to timely contract services providers so that tenants/customers/clients will not suffer due to late performance of services.

10.2 Infrastructure (Engineering) Management

10.2.1 Introduction Infrastructure management, in the context of O&M, deals with the operational management aspects of infrastructure (roads, storm water, etc) including maintenance and other management aspects. Engineering infrastructure refers to all engineering networks and plants within the perimeters of the property but outside any facility or building. People managing infrastructure are preferably engineers experienced in infrastructure specification, design, construction and maintenance. The assumption is made that these types of assets have already been handed over to Asset O&M and therefore need to be maintained.

10.2.2 Engineering infrastructure Below is a list of typical engineering infrastructure to be managed by engineers:

Roads

Parking areas (asphalt, paving)

Water networks and storage

Sewer network, collection

Storm water and main drainage system

Electrical network and distribution

Fire hydrants and back-up system(main network)

Any engineering plant e.g. substation, purification

Irrigation system.

10.2.3 Infrastructure repairs and preventative maintenance Although Maintenance per se is discussed separately in this document, the following paragraph describes

the basic requirements and actions to be executed under infrastructure repairs and preventative

maintenance:

Inspect assets to ensure that they meet statutory requirements

Plan activities for all scheduled and statutory preventative maintenance

Acquire contractors (term contracts, standing offers and supplier register)

Receive maintenance requests from call centre and select appropriate contractors

Place orders with selected maintenance contractors

Manage expenditure against budget

Monitor performance of contractors

Inspect ongoing and completed works and authorise expenditure.



The user should take note of the lengthy process and complexity in preparing maintenance tenders and get a suitable and qualified contractor (service provider) on site to carry out the required inspections and maintenance work.

10.2.4 O&M Planning The Infrastructure Manager should continuously conduct planning exercises in order to timely get orders/contracts/tasks in place with the objective to maintain a high level of performance of which the following are examples:

Sourcing policy (in-house, in-sourced, outsourced, co-sourced)

Service and level of service planning

Scheduling of routine maintenance

Scheduling of condition assessment surveys

Recommendations for upgrades

Contracting.

The primary emphasis of planning is that of maintaining the infrastructure and to ensure maximum performance and life usage. It is imperative for engineering managers (maintenance) to timely plan and award contracts to suitable and qualified contractors to maintain engineering infrastructure.

10.2.5 Procurement The Infrastructure Manager should take cognisance of the procurement process (See Practice Guide 2 of the Toolkit) and the time it would take to bring a contractor on site and should therefore start well in advance with the preparation of tender documentation and the management of the process.

10.3 Property Management

10.3.1 Introduction Property management focuses on the management of contracts relating to a specific facility including lease, letting, building occupation and use. It also deals with the purchasing of land. It does not manage the procurement processes.

10.3.2 Acquisition of property This paragraph refers the to the acquisition of land only or the acquisition of property that consists of land, engineering infrastructure as well as buildings/facilities as a result of a space requirements input. This specific function is managed by other departments than the Asset O&M team but there will be an interaction between the parties through all processes until the property had been acquired and taken up into the asset register.

Some of the aspects and functions of the Asset Management team during this process are:

Providing input insofar as location, space and functional requirements

Input such as when the space will be required, possible phasing of the acquisition and budget limitations

Liaison with Public works and the Supply Chain Management Unit

Continuous participation during the acquisition process and the regular receipt of progress reports

Continuous communication within the department and future users of the property

Readiness of asset recognition.



10.3.3 Managing rates and municipal services payments The Property Manager is the interface between the Asset Owner and the Municipality insofar as rates (and taxes) and municipal services are concerned through establishing an account with the Municipality for the aforesaid. Although bills are sent to the Finance Department for payment, it is the responsibility of the property manager to regularly check that quantities and amounts shown on the bills reflect the actual volumes and quantities. The following are but a few of the responsibilities of a Property Manager:

Receive invoices for property rates and/or municipal service from the municipality and assess the value and quantities against historical trends and consumption norms. Abnormal consumption of utilities should be brought under the attention of both the Facilities Manager and Infrastructure Manager with the aim to identify the cause thereof and to recommend corrective action

Dispute invoice with Municipality if billing is deemed unreasonable or outside historical trends and consumption norms and after no obvious cause could be identified by the team

Regularly verify the ownership and custodianship of the property stipulated on the invoice. The property information should also be reflected in the asset register and be accurate and correct

Certify invoice for payment and submit to Finance payment. Authorisation for payment is done by the person as assigned through the Delegation of Authority

Any additions or changes to the asset portfolio should immediately be amended in the asset register as well as notifications sent to the Finances to update the accounting system and to ensure that the insurance of the assets is amended if applicable. Premiums paid for insurance could change.

10.3.4 Lease management This paragraph describes the leasing of property from a Landlord with the aim to accommodate staff and to deliver a required function. Before concluding a lease agreement with a Landlord, the asset management team needs to address and ensure the following:

Provide the Landlord with the accommodation requirements including alterations if needed

Ensure that the Landlord provides all costs and that the total amount of rent is clearly itemised

Ensure that total cost of lease (monthly, annually) will be within budget

Conclude a lease agreement.

Other aspects to manage after an agreement had been concluded are:

The timely renewal of the lease agreement subject to available budget and value for money

Establishing a lead programme of actions to be undertaken before the lease expires and implement the programme

Follow the right procedure when terminating the lease agreement according to the Agreement or opt for not to renew the lease

Establish a landlord/client (tenant) forum to address and resolve issues on a regular basis taking into account the terms and conditions of the agreement

Amend the agreement when necessary and get the amendment signed by both parties

Establish a complaint register and according to which the landlord will have to respond.

10.3.5 General advice on property management Development consultancy and advice The Asset Management team needs to establish knowledge on the operations and functionality of all buildings/facilities and infrastructure with the aim of advising the procurement and project teams on lessons learnt and new or better technologies or systems to be procured/installed in new acquisitions. It



also means that custodian departments should advise user departments insofar as new technologies or systems are concerned. Consultants are often employed for this advise. Procurement strategy for property related issues It is imperative to establish a procurement strategy with regard to material, spares, and facility management systems as well as facilities management services. The procurement strategy should also be expanded to maintaining property and assets as well as what approach should be adopted for contracting services e.g. to contract individual facility management services provider and manage each contractor or to contract a single service provider that can provide all services as required. Valuations The Asset Management team need to familiarise themselves of the municipal valuation process and build expertise and knowledge around valuations with the aim to lodged complaints should the valuation of the municipality differs too much from estimates. Additional to the above, property (land, buildings and infrastructure) should be valued regularly (proposed every 5 years) for financial purposes when needed e.g. when selling. Rental reviews Prior to starting negotiations on rent payable to the landlord, the Asset Management team needs to analyse the market and establish a market rate for similar accommodation within the same region/area. As per contract the Asset Management team should negotiate the best rent for accommodation as allowed by the lease agreement.

10.3.6 State Land Management Some of the aspects that need to be managed by the Asset Management team with regard to the land management are:

Grant temporary or perpetual rights over state land (e.g. right of way or servitude)

Manage the State’s rights over private property (e.g. servitude or right of way in favour of the State; title conditions in favour of the State governing land-use or the resumption of ownership)

Acquire professional service providers to survey, subdivide, consolidate and register state land

Cause the confirmation of ownership (vesting) of state land

Meet statutory obligations (e.g. Fencing Act, “fire breaks”, removal of alien plants)

Ensure accurate property information on the immovable asset register.

10.3.7 Maintenance Management The maintenance management requirements are the same as for facilities management and infrastructure management except for land specific maintenance e.g. the prevention of erosion of soil due to storm water. This type of maintenance could be incorporated into the landscaping/gardening services under Facilities Management or managed within the property management function depending on the size of the land/property.

10.4 Asset Register

10.4.1 Introduction Although an asset register is required for both immovable and movable assets, this paragraph only has reference to the immovable asset register. (Please see Asset Register Guideline in the Roadmap for the Asset O&M Delivery Process 3).



10.4.2 Ownership of Asset Register The Asset Management team (more specifically the Property Manager) is the owner of the asset register and shall ensure that the asset register is maintained and kept updated with accurate asset information including the registering of new assets and the deregistering of disposed assets.

10.4.3 Purpose of Asset Register The purpose of an asset register is to have validated and updated information about all immovable assets at all times. This will allow users to access relevant and applicable information when analysing the portfolio of assets.

10.4.4 Typical Information captured in an Asset Register The asset register should have as an example, three parts of information, namely

Generic information e.g. asset identification, location

User information e.g. functionality related (entered/controlled by user)

Custodian information e.g. technical condition related (entered/controlled by custodian). Typical information to be captured in an asset register is (but not limited to):

Date of capitalisation and total acquisition cost (at cost price)

Ownership of land, registration, location

Asset identification, tagging number

Asset condition (functional and technical)

Asset value (replacement, economic value, etc)

Insurance if applicable

Dates and costs of upgrades, replacement, disposal etc as well as costs

Leasing information.

10.4.5 Users of Asset Register There are a number of asset register users, namely:

The Financial Officer – for entering the asset into the accounting system e.g. date and acquisition cost

The Asset Management team for planning purposes e.g. the current economic value, condition of the asset

For auditing purposes.

11. Maintenance

11.1 Introduction The management of maintenance is primarily the function of facility and engineering infrastructure managers. Although the two types of managers operate independently, it occasionally occurs that a facility manager consults an engineering manager and vice versa. In some organisations a maintenance division might be established to manage maintenance of all assets although the soft services within the facilities management function will still be managed by facility managers. It should be noted that engineers working in a maintenance environment are in general different than engineers working in the asset acquisition environment although knowledge could be shared among them. A major input to the maintenance process is the results emanating from the condition assessment surveys and analyses.



11.2 Maintenance process A generic process for exercising a maintenance function is:

The establishment of a maintenance policy, standards and strategy

Establish a maintenance plan

Implement the maintenance plan

Conducting a maintenance review.

11.3 Definition of Maintenance Maintenance means all work on existing buildings that is undertaken to:

Prevent deterioration and failure

Restore the building to its specified level of operation

Restore the physical condition to specified standards

Recover the building from structural and service failure

Partial equivalent replacement of components of the building.

These activities include major replacement works such as non-serviceable air-conditioning plant, etc. Work excluded from maintenance includes:

Improvements and upgrading to meet new service capacity or functions

Refurbishment to new condition to extend the capacity or useful life of the building

Replacement of major components to extend the capacity or useful life of the building

Upgrading to meet new statutory requirements

Operational tasks to enable occupancy use (e.g. cleaning, security, waste removal)

Supply of utilities (energy, water and telecommunications)

Construction of new assets

Major restoration as a result of natural and other disasters.

11.4 Maintenance activities GIAMA prescribes the following maintenance activities as essential to minimise the life-cycle cost of an asset:

Condition assessments – all assets must be inspected to determine their condition once every five years

Inspections – regular inspections must be conducted on critical components or elements such as plant and equipment to ensure that it functions as intended in the manufacturer’s product and guarantee specification or where applicable in terms of the Operational Health and Safety Act

Servicing – regular servicing of components as per manufacturer’s product and guarantee specifications or where applicable in terms of the Operational Health and Safety Act. This is normally measured in operating hours

Repair - means actions required to reinstate an immovable asset to its original state when such asset is damaged accidentally or maliciously, or through operational failure.

11.5 Types of maintenance There are three types of maintenance, namely:

Preventative maintenance



Essential maintenance

Condition-based works.

11.5.1 Preventative maintenance Preventative maintenance is undertaken at predetermined intervals for technical, statutory or reliability considerations. The major focus here is plant and equipment, but will also at regular intervals include the electrical and mechanical as well as the civil services. Preventative maintenance is focused at keeping the immovable asset at the current condition level through regular inspection, servicing and repair.

11.5.2 Essential maintenance Essential maintenance is a process whereby only maintenance activities are undertaken to ensure that statutory requirements are met and that breakdowns that renders the facility unusable is repaired. Essential maintenance is appropriate for immovable assets that are to be replaced, refurbished or disposed of.

11.5.3 Condition-based works Condition-based works (Capital Projects) including refurbishments, renovations and major repairs which in essence are condition-based maintenance are driven by a condition assessment process or a regular planned maintenance activity according to the lifecycle of the building. Maintenance actions are undertaken based on the condition of the immovable asset as determined by the condition assessment process or on demand.

12. Remaining life-cycle costing

12.1 Introduction As opposed to the initial life-cycle costing exercise, which is conducted at the early stages of a project to determine the feasibility thereof, the remaining life-cycle costing takes place during the Operations and Maintenance phase of an asset. The Reader is advised to read this chapter in conjunction with the Life-Cycle Costing Chapter in DP1 - Portfolio Management of the Toolkit.

12.2 Remaining life-cycle costing elements Apart from the Asset O&M costing sub-elements, e.g. Facilities Management (Soft Services), utility costs, staffing, rates and taxes, rent, and other day to day maintenance requirements, the asset management team also needs to plan and budget for upgrades, refurbishments, renovations and disposal of assets.

The asset management team will cost for operational expenditure (including mobilisation and demobilisation costs) while the members of the team responsible for capital planning (project planning) will cost for the capital expenditure for disposal, upgrades, refurbishments and renovations.

12.3 Time-value of money Although covered in the Life-Cycle Costing Chapter in DP1 - Portfolio Management, the importance of the time-value of money is again reiterated here. Care should be taken not to mix estimated cash flows for costs with different time-values but rather conduct the costing exercise in constant money terms and then escalate the cash flows with the applicable inflation rates to convert it into current (nominal) money terms, which is comparable with the MTEF annual budgets.



12.4 Costing of Asset Management: Operations There are four major components of costing of assets (excluding personnel costs) during operations, namely:

Utility costs, rates and taxes

Facilities Management: Soft services (assumed to be outsourced)

Facilities Management: Hard Services and engineering infrastructure maintenance costs (assumed to be outsourced)

Major upgrades, refurbishments and renovations.

Disposal cost will only be incorporated into the costing exercise as soon as it becomes apparent that a specific asset will be disposed of.

12.4.1 Utility costs, rates and taxes These costs need to be estimated taking the existing bills, assets, staffing and services into consideration when estimating the cost for future years and annually inflated with a realistic inflation rate.

12.4.2 Facilities Management: Soft Services As most of the facilities management services will be outsourced through contracts with duration of approximately two years, cost estimates should be based on the existing contracts and should reflect values as indicated in the contract.

As contracts do not always start at the beginning of a financial year, estimates for monthly costs should be increased with a realistic inflation rate starting at the next month after the expiry of a current contract. It means that cost estimates for facilities management should be done per month to capture the above impact of staggered contracts and then accumulate the monthly costs to obtain an annual cost of a specific service.

Contracts for soft services should include manpower, equipment/tools and consumables, which means that the Asset Management team should always control the number of people actually performing the services compared to what was stated in the contract.

12.4.3 Hard services and maintenance The costing of maintenance over the remaining life of an asset should take into account the recurrent type of maintenance such as preventative and breakdown repairs but excluding major upgrades, refurbishments and upgrades.

Costs involving contracts to manage all recurrent type of maintenance and repairs usually include:

Manpower

Inspection of systems and infrastructure

Spares and repairs of breakdowns up to a specified value

Preventative maintenance.

The same costing method should be adopted as for facilities management: soft services, i.e. costing in constant terms, then converting constant cash flows into current (nominal) money terms and to take note of the staggering effect of service contracts on the annual cash flow predictions.



12.4.4 Major upgrades, refurbishments and renovations The remaining life-cycle costing should reflect all major upgrades, refurbishments and renovations. This could be based on the original decision and plan prepared during the initial stages of the life cycle or could be based on the latest analyses of monthly and annual data on maintenance expenditure and asset performance.

Costing of these types of projects should include at least the following:

Alternative accommodation e.g. office space (if not infrastructure)

Alternative methods of utilities e.g. water, power, sewage (if infrastructure related)

Project costs

Demobilisation and mobilisation of Facilities Management.

12.4.5 Disposal The primary costs related to the disposal of an asset are:

Demobilisation costs (e.g. movement of staff to new offices)

Asset recovery costs (e.g. pumps, equipment)

Physical demolition of structures

Remedial costs (e.g. environmental aspects such as landscaping)

13. Risks This paragraph identifies the risks associated with Operations and Maintenance for the Reader to assess and to mitigate. The following is a list of major risks (but not limited to) that need to me mitigated:

The proposed O&M processes need to be established and followed within the user and custodian departments in order to prevent unnecessary loss of important information (both input and output) that could lead to unsatisfactory service delivery

The late start and finish of all important activities could lead to the non-readiness of facilities for user occupation or custodian re-occupation in order to proceed with major upgrade/refurbishment projects, e.g. the timely placing of contracts for facilities management and maintenance

The lack of record keeping with regards to facilities or engineering downtime and why so that lesson could be learned when procuring similar systems/facilities in future

The lack of knowing and managing the complete hierarchy of assets insofar as preventative maintenance is concerned

The under-estimating or over-estimating the remaining life-cycle cost that could have a negative impact on the budget

The employment of not suitably qualified people to manage the asset management process

If the asset register is not maintained properly, wrong or outdated information might be used in crucial decision-making exercises.

14. O&M Performance Management Performance management of operations and maintenance differs from that of projects in that it is mostly an ongoing function. Whilst some of the inputs, activities and outputs may differ, the concepts however remain the same. Some of the key differences will be found in the concept of the customer. In a project environment the project often has a single customer represented by the project sponsor, whereas in the maintain asset processes, for example, it is necessary to deal with multiple customers across the



organisation, internally and externally. This will result in performance metrics such as indicators to measure service levels, response times etc per customer, sometimes with indirect indicators. Conversely, performance indicators for the bulk of the work required to plan and manage the O&M function will not differ from the indicators required by managers in programme management functions to manage their functions. Some examples of typical indicators in the Operations & Maintenance domain are presented below.

14.1 Typical O&M Input, Activity and Output Indicators

14.1.1 Input indicators O&M inputs are financial, human and technology resources and the input performance indicators will therefore measure:

% of staff available as a percentage of planned staff (input indicator)

Cost Performance Indicator of PSP appointed to provide support at this level (input indicator)

Cost variance through a form of cost performance index of for example material used in maintenance. Remember that these indicators explore value for money and should be designed as such.

Vacancy and other resource production indicators (actual hours worked versus total hours available) measuring the availability of O&M staff versus planned is required.

14.1.2 Activity indicators

% of issues elevated for Management Action closed (activity indicator)

Budget performance indicator of the Programme unit’s own budget (activity indicator)

Budget variance indicators explore the performance in terms of spending the budget.

Variance from service level requirements, for example time to respond to a call.

Productivity measures – number of calls responded to, especially if these are coupled to a long distance trip.

Quality performance indicators are essential activity indicators and measuring for example the number of inspection failures, or customer come-backs will provide these.

Indicators measuring metadata from the customer call log provides useful early warning of failures.

14.1.3 Output indicators

Outputs need to be measured across the O&M value chain and will include measuring on-time submission of business plans, budgets, periodic reports etc.

Management action is an important output and indicators to track these can be obtained from measuring the number of calls closed after having been elevated to management, for example.

Output indicators at an O&M level could also be measured for example by tracking the trends per facility to determine whether the planned maintenance activities have reduced the number of call-outs. This type of indicator might however best reside at the O&M programme level.

Each roadmap process and sub-process will require indicators designed around the specific process step applicable to this process step. For example Indicators related to sub-process 3.3, Conduct Property Management, would typically address the performance of formulating, updating and submitting documents required by that process, namely:

o Land acquisition plans - % plans updated for example. o Analysis reports on utility bills and consumption trends o Leasing records and reports o Asset registers reports o Asset registers non-compliance reports.



In instances where the outputs are defined in plans, the indicators will naturally be developed as part of the planning process. For example Sub-process 4.1, conduct preventative maintenance is defined in the approved budget from the C-Amp. Performance of these activities can therefore be measured in terms of one or more dimensions of delivery, namely:

o Comprehensiveness of the deliverables o Quality of the deliverables

Timeliness of the deliverables

14.2 Performance of the individual The fourth performance roadmap step, namely “Review & Appraise Performance of Individuals responsible” for the performance of deploying the inputs, performing the activities and measuring the outputs is a vital imperative for the success of the performance management system. The performance processes and indicators discussed above will be meaningless if they are not mapped in a structured organised manner to the specific individuals responsible, AND if instances of poor or under-performance is not regularly followed by appropriate management action to address these. This process cannot only be performed once per annum through the formal appraisal process, but must be performed on a continuous day-to-day basis in interaction up and down the organisational chain of command based on the contents of the performance reports.

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