UNCLASSIFIED (U)

15 FAM 620

definitions And FuNDING GUIDANCE

(CT:OBO-47;   12-24-2014)
(Office of Origin:  OBO)

15 FAM 621  ROUTINE MAINTENANCE AND REPAIR (M&R)

15 FAM 621.1  Definition

(CT:OBO-37;   12-05-2013)

a. Routine maintenance and repair (M&R) provides for the preservation of real property in such condition that it can be effectively used for its intended purposes:

(1)  Maintenance is defined as the work required to preserve and to maintain residential and nonresidential real property in such condition that it may be effectively used for its designated purpose.  Maintenance includes cyclic work done to prevent damage that would be more costly to restore than to prevent, as well as work to sustain components.  Examples include painting, caulking, refastening loose siding, sealing bituminous pavements, and the preventive maintenance of building systems.  Painting done in connection with repair work (i.e., as a result of the repairs) is properly classified as repair.  This maintenance excludes building operating expenses (BOE) as defined in 15 FAM 120.  BOE is funded by the post’s Diplomatic and Consular Programs (D&CP), the occupant agency, or ICASS.  See 15 FAM 120 and 15 FAM 730;

(2)  Repair is defined as the restoration of a real property facility to such condition that it may effectively be used for its designated purpose.  Repair may be an overhaul, reprocessing, or replacement of deteriorated component parts or materials.  Repair includes services and/or materials used for items of a minor nature such as repairs of broken water pipes; replacement of broken/inoperable bathroom/kitchen fixtures; repairs to windows, doors, wooden shelving; repairs to a building system such as heating, central air-conditioning, and mechanical systems; repairs to electrical systems (excluding any repair that would result in a change in the amount of electrical service to a building); and repairs to floors (excluding carpeting repair).  These projects require no review by the Office of Design and Engineering, in the Directorate for Program Development, Coordination and Support, in the Bureau of Overseas Operations (OBO/PDCS/DE) and are exempt from permit requirements; however, technical assistance is available upon request.  Post should be able to execute these maintenance activities without impairing regular routine and preventive maintenance programs; and

(3)  Maintenance and repair also consists of bulk M&R supplies, such as paint, lumber, nails, plumbing supplies, and electrical wire (excluding the purchase or repair of tools and test equipment).

b. There is no dollar limit for any individual maintenance or repair project or restriction to a certain percentage of the annual routine M&R budget.  However, posts must manage routine maintenance requirements within the annual routine M&R budget provided by OBO.  If there is a large, routine maintenance activity (examples: painting the chancery, repaving multiple parking lots) that will deplete the annual budget, post should identify the requirement as a one-time increase to the annual budget request as a separate item.  Funds will be provided based on their availability.

c.  Routine M&R funds may not be used to fund security escorts, salaries, overtime, or other building operating expenses (BOE).

d. Routine maintenance excludes projects that alter the structure of the space, increase the net square footage of the space, change the intent or use of the space, or require an increase in the amount of electrical service to a building.  To ensure the safety of post employees and provide a proper technical review, OBO must approve designs for these types of projects.  Posts should continue to submit these types of projects for repair and improvement funding.

e. Routine maintenance also excludes maintenance service and preventive maintenance contracts.  These are considered building maintenance expenses (BME) for nonresidential properties.  Maintenance service and preventive maintenance contracts for residential properties are considered as BOE and are not funded by OBO.

f.  Because of their historic nature, OBO's review and approval must be obtained before these funds can be used on the properties identified on the Secretary of State's Register of Culturally Significant Properties.  This restriction also applies to the representational spaces in the chief-of-mission and deputy-chief-of-mission residences.

15 FAM 621.2  Funding

(CT:OBO-46;   12-15-2014)

a. Unless there are specific interagency agreements to the contrary, OBO funds routine M&R under function code 7901 for U.S. Government-owned/capital lease (GO/CL) property.  The Office of Facility Management, in the Directorate for Construction, Facility and Security Management, in the Bureau of Overseas Buildings Operations (OBO/CFSM/FAC) will provide post with 7901 funding according to annual target calculations.  Funds allotted under function code 7901 may not be obligated to fund M&R for operating lease (OL) properties, R&I projects, or items that are chargeable to the Diplomatic and Consular Program (D&CP) or ICASS allotments.  D&CP and ICASS funds may not be used to augment the OBO allotment.

b. Post will receive two separate 7901 allotments from OBO/CFSM/FAC.  Funding received from appropriation 19X0535000C should be used only for nonresidential facilities occupied by multiple agencies.  Funding received from appropriation 19X05350003 should be used for all nonresidential facilities occupied solely by the Department of State as well as any residential facilities, regardless of occupant.

c.  For OL facilities, M&R is primarily the responsibility of the landlord.  It is the Department of State’s policy to include maintenance requirements as the landlord’s responsibility when negotiating lease agreements.  In cases where the landlord cannot perform maintenance, or where local law dictates maintenance to be the tenant’s responsibility, funding requests should be made to the post’s respective OBO/CFSM/FAC facility management desk officer.

d. OBO/CFSM/FAC will fund M&R from appropriation 19X05350003, function code 7907.  These funds are to be only for M&R at State-only or ICASS Operating Lease facilities.

e. Posts are not authorized to utilize OBO M&R funds when the benefit does not accrue to the U.S. Government.  In cases where another agency occupies an OL property, the occupying agency funds maintenance and repairs that are not the responsibility of the occupant or the lessor under the terms of the lease or local law, preferably by direct charge (see 6 FAH-5, ICASS Handbook).

f.  Additional operating guidance on routine M&R funds (function codes 7901 and 7907) is available in the GFS Knowledge Base on the Global Financial Services intranet site.

15 FAM 622  REPAIRS and Improvement (R&I)

15 FAM 622.1  Definition

(CT:OBO-37;   12-05-2013)

a. Most repair and improvement (R&I) projects contribute to restoring a building to a fully functioning condition.  These projects can include repair or replacement of building systems or structures, such as replacement of plumbing and modernization of bathrooms and kitchens as part of a general program to upgrade facilities at U.S. Government-owned or leased properties.  The following noninclusive list gives examples of R&I projects:

(1)  Rewiring a building;

(2)  Replacing a roof (only when the project is large enough to require design reviews and permits;

(3)  Replacing major parts of a building, such as elevators, central heating, air-conditioning plants, or fire protection systems;

(4)  Replacing deteriorated water or sewage systems;

(5)  Repairing or replacing (not painting) a building facade; and

(6)  Post communication center improvements.

b. Additionally, improvements include additions or alterations that increase the value, change the use of a building or property, or significantly improve its utility.  Improvement projects can include improvements to a building, such as installing new building systems (adding or upgrading heating, ventilation, and air-conditioning, for example); adding a new kitchen or bathroom; changing the size, nature, or function of a facility, such as enlarging bathrooms or kitchens; putting extensions of any kind on a building; combining two residential units into one or vice versa; and making offices out of residential space or vice versa.  The following list gives examples of improvement projects:

(1)  Correcting building deficiencies (e.g., creating improved means of egress and/or making other required safety modifications);

(2)  Changing a property’s use (e.g., converting storage space to cafeteria or office space);

(3)  Paving (not repaving) a new driveway, parking lot, patio; and

(4)  Upgrading electrical power systems (i.e., uninterruptible power systems (UPS) or power conditioners), elevators, or water distribution.

15 FAM 622.2  Funding

(CT:OBO-37;   12-05-2013)

a. OBO funds Repair and Improvement (R&I) projects under the following functional programs in appropriation account 19X0535.0002, except for U.S. Agency for International Development (USAID) properties (see 15 FAM 1020).  The ten R&I function codes are:

7344

Fire Systems Program

7662

Facility Project Support

7552

Energy Conservation program

7667

Roof Management Program

7561

Utility Management Program

7671

HAZMAT Containment

7563

Elevator Management Program

7687

Barrier-Free Accessibility

7574

Natural Hazards Program

7902

Special Repair & Improvement

b. These types of projects require a review by OBO/PDCS/DE, which will provide technical assistance upon request and issue a building permit for the approved design.

c.  15 FAM 640 provides guidance on the request and approval of Repair and Improvement funding.

15 FAM 623  bUILDING MAINTENANCE EXPENSES

(CT:OBO-47;   12-24-2014)

a. Building maintenance expenses (BME) is a category of cost within BOE used to capture those operating activities specifically attributable to properly maintaining the physical plant or major building systems within nonresidential U.S. Government-owned or leased facilities or compounds.

b. BME funding provides resources for preventive maintenance service contracts for major building systems such as elevators, water treatment systems, uninterruptible power supplies, generators, building automation systems, automatic voltage regulators/switchgear, HVAC/chiller, and fire protection systems.

c.  BME may only be used for preventive maintenance service contracts and is identified in the Department of State accounting system using sub-object code 2512.

d. BME may not be used for any other type or category of expense such as preventive maintenance at residential facilities (GO/CL/OL), building operating force contracts, janitorial contracts, and gardening contracts.

e. BME funding does not cover preventive maintenance activities at OL nonresidential facilities that are the landlord’s responsibility.  In general, preventive maintenance at OL facilities is a landlord responsibility unless other arrangements are specified in the lease.  If post is required to fund necessary preventive maintenance because the landlord fails to perform, the cost incurred by post should be deducted from the rent payment in a manner consistent with the terms of the lease.

f.  Funding responsibility is determined by the scope of the preventive maintenance service contract, the nonresidential facilities included in that scope, and the occupants within those facilities.

g. Funding requests for BME for nonresidential facilities should be sent to OBO/CFSM/FAC/MS.  Funds for BME for applicable facilities will be allotted directly from OBO under function code 7904.  Post will receive 7904 funding from appropriation 19X0535000C for BME contracts at nonresidential facilities shared by multiple agencies.  For nonresidential facilities occupied solely by the Department of State, 7904 funds will be sent to post from appropriation 19X05350003.

h. Preventive maintenance service contracts for a facility that is solely occupied by another agency should be direct-charged to that agency.

i.  Additional operating guidance on BME is available in the GFS Knowledge base on the Global Financial Services intranet site.

15 FAM 624  ENERGY SAVINGS PERFORMANCE CONTRACTs (espc)

15 FAM 624.1  ESPC Definition

(CT:OBO-37;   12-05-2013)

a. Energy Savings Performance Contracts (ESPCs) are partnerships between the U.S. Government and an Energy Services Company (ESCO), which audits, designs, and constructs a project to reduce energy costs and makes all arrangements to fund the project.  The ESCO is reimbursed from the energy cost savings over a payback period of up to 25 years.

b. ESPCs are a funding strategy endorsed by the U.S. Government through legislation in 1992.

c.  There is no mandate to use ESPCs, and the Government Accountability Office (GAO) considers them less cost effective than projects executed with appropriated funds.

d. ESPCs are intended to help agencies achieve the goals of Energy Independence and Security Act of 2007 (Public Law 110-140), and subsequent Executive Orders.

15 FAM 624.2  ESPC Process

(CT:OBO-37;   12-05-2013)

ESPCs are resource intensive and require a clear understanding of the responsibilities of all parties involved.  OBO/PDCS/DE has developed a three-phase execution plan as follows:

(1)  Pre-contract phase (OBO managed and funded with post input):  This is the preliminary data collection and project planning phase, which uses the utility data portal to identify energy usage and cost factors.  High-priority posts receive preliminary audits.  The resulting site data packages are used as attachments to the ESPC request for proposal.  OBO/PDCS/DE/ESD will manage this phase using ESD Division staff and Energy Conservation Program funds;

(2)  Contract phase (post managed and funded with OBO input):  This is the solicitation, award, and construction phase.  It starts with a memorandum of agreement (MOA) among the bureau, post, and ICASS council to commit to the payment plan.  Other significant activities include the following:

(a)  Post works directly with A/LM to advertise and release the ESPC RFP;

(b)  OBO helps post evaluate initial proposals based on established criteria;

(c)  A/LM issues a Letter of Intent to Award to the selected ESCO;

(d)  The ESCO performs an Investment Grade Audit;

(e)  A/LM issues the final ESPC contract in conjunction with the Department of Energy (DOE/FEMP);

(f)   The ESCO proceeds with design and construction activities;

(g)  OBO provides technical support and quality assurance (QA) support as needed (see 15 FAM 640); and

(h)  Post may be required to hire a third-party contractor to manage construction activities; and

(3)  Performance phase (post managed and funded with OBO input):  This is the long-term period of performance when energy conservation measures are put into service.  This phase can last up to 25 years and will require continuous post support as defined in the ESPC.  Key events are:

(a)  Post contracts for the systematic measurement and verification (M&V) of savings by an independent auditor.  This occurs periodically throughout the time of the contract (up to 25 years).  This expense must be paid for through the ESPC;

(b)  The bureau and/or ICASS release funds in accordance with the M&V reports;

(c)  A/LM issues contract modifications if the facility is altered or if there is a change in usage;

(d)  The ESPC can be paid off early if funds become available;

(e)  At the end of the contract term, the ESCO receives final payment and the U.S. Government retains the installed equipment; and

(f)   The U.S. Government continues to receive energy savings free of ESCO payments.

15 fam 625  through 629 unassigned

UNCLASSIFIED (U)