In a constrained budget environment, gross inefficiencies occur when the wrong facility project is funded: When, for instance, a functional office space is renovated while a mission-critical pier rots in the water; when a cutter exterior is painted a gleaming extra coat of white instead of repairing the main diesel engine that continuously fails due to unserviceable parts; or when functioning non-skid is renewed yet again while the cooling supply to critical electronics is no longer supportable.
U.S. Coast Guard personnel rely on uninterrupted use of facility systems to meet operational objectives. Yet the maintenance of reliable shore facility systems remains discretionary. The inconsistent framework in which scarce facility sustainment resources are prioritized and allocated results in a somewhat indefensible array of facility investments when viewed nationally over time. Even worse, there is no systematic measure of the risks to mission performance by not accomplishing all of the needed sustainment, restoration or modernization requirements. Coast Guard leadership recognized these vulnerabilities and charged the Coast Guard’s Facilities and Maintenance (FAM) program with prioritizing facility investments based on mission effectiveness at the lowest possible cost.
One solution is to collaborate with and learn from local groups. Long-term international partnerships help alleviate the sustainability challenges facing entities engaged in short-term, project-based missions. This article addresses the lessons learned by local groups that work in a permanent, program-based environment, while pinpointing key principles that the uniformed services can apply to improve project sustainability.
The Shore Facilities Project Prioritization Process
The Shore Facilities Project Prioritization (SFPP) process was developed to facilitate a mission risk-oriented shore infrastructure investment philosophy. With its transparent, auditable, risk-based decision framework, the SFPP process supports risk-based FAM decision making at an enterprise level.
The SFPP process is designed to direct limited FAM resources to the most important investment opportunities using risk-to-mission concepts; encourage sound engineering practices; and capture and communicate the impacts of funding decisions to leadership in understandable terms. Benefits of the SFPP process include:
- repeatable and auditable prioritization of candidate FAM investments across the enterprise;
- improved mission focus;
- the ability to allocate funds based on risk-reduction instead of fair share;
- comprehensive evaluation of the FAM program in a way that supports requirements of the Chief Financial Officers Act and Executive Order 13327;
- data-supported methodology to justify additional shore infrastructure funding; and
- significant manpower savings in POP preparation time through the use of readily available risk-based metrics and proxies.
Leveraging Existing Metrics
The SFPP process builds on industry best practices and the Coast Guard’s operational risk management program to create a simple approach for prioritizing competing investments based on a concept of relative mission risk. It leverages existing data and metrics to the greatest extent possible while intentionally minimizing the collection of new data specific to the process itself. The process is flexible and allows straightforward substitution of new metrics as they become available.
Simply put, effective management of mission risks related to shore infrastructure comes about by doing everything possible to ensure disruptive system failures never occur—particularly in the most mission-sensitive assets. In order to accomplish this objective, the SFPP process:
- identifies in relative terms the most important mission capabilities and enabling assets by defining a Mission Alignment Index (MAI);
- assesses the likelihood and severity of a given facility system failure using a Severity Rating;
- combines the concepts of MAI and Severity Rating to evaluate the relative degree of mission risk—the Mission Severity Rating—associated with shore infrastructure investment decisions; and
- provides a methodology for measuring return on investment as the relative amount of risk mitigated per dollar invested
Mission Alignment Index
The MAI indicates how well-aligned a particular shore asset is with one or more essential mission capabilities while also accounting for differences in the relative importance of the various mission capabilities. The key to improved mission-oriented FAM decisions is the methodology used to link shore assets with mission requirements. The Coast Guard’s ongoing work with the Mission Dependency Index (MDI) and Mission Essentiality Index (MEI) was leveraged for this purpose.
In brief, the MDI is a tactical-level perspective that measures the relative importance of one facility to another. It does this through a structured survey process that associates standardized “functional elements” with every real property facility and evaluates each element’s relationship to the unit’s mission readiness. A functional element is defined as a dedicated physical space at a shore facility that has a definable, mission-related function.
The MEI complements the MDI concept with a strategic-level perspective. Like MDI, MEI uses a structured survey process—in this case to measure the relative importance of investing limited dollars in alternative Mission-Essential Capabilities and supporting facility infrastructure, or so-called Mission-Essential Facilities. The higher a facility’s MDI and MEI ratings, the more closely aligned it is with important Coast Guard missions.
Severity Rating quantifies the relative amount of building system risk associated with a given investment opportunity such that the decision maker can consider the implications of the cumulative system risk associated with the entire maintenance backlog.
Risk is defined by the combination of the likelihood and severity of a specific event being realized. The SFPP process relies on a combination of subjective and objective methods to estimate the likelihood and severity of disruptive building system failures to determine a Severity Rating. It does this in a straightforward manner by selecting simple proxy indicators of likelihood and severity from readily-available FAM data. As better proxies are developed, they can be substituted into the SFPP process.
To manage system risks effectively across the enterprise, the SFPP process had to consider the differences among investment types while maintaining consistency in its approach to identifying and analyzing risks. Sustainment, restoration and modernization investments have very different drivers and are therefore deserving of different likelihood and severity indicators when identifying the risks associated with each. Despite these differences, the SFPP’s analytical approach allows measurement of total mission risk and direct comparison of the risk consequences of alternative enterprise-level investment strategies.
Mission Severity Rating
Insomuch as the MAI provides an indication of the degree of alignment between shore facility assets and important Coast Guard missions, and the Severity Rating measures the relative severity of a negative event associated with a building system or functional failure, the SFPP process still required a methodology to more directly relate potential operational mission impacts to building system or functional failures.
The MAI and Severity Rating were combined in the SFPP to provide an indication of the relative impact of a FAM decision on operational mission performance: the Mission Severity Rating. Simply put, the more closely aligned an asset is with a mission requirement, and the more severe the potential system failure is perceived to be, the greater the potential impact on operational performance.
Return on Investment
The final component of the SFPP process involves a cost-benefit analysis of competing investment opportunities, where benefit is defined by the relative amount of risk mitigated by each competing investment. The SFPP defines a successful shore facility investment strategy as one that minimizes overall risks to mission success over time stemming from shore facilities. Accordingly, the SFPP process preferentially seeks out investment opportunities that mitigate the greatest amount of relative risk per dollar invested.
In that the SFPP outcome is just a recommended list of projects, human judgment still occurs in project review boards, and during the evaluation of mission alignment. This allows leadership to articulate other non-operational mission priorities, if desired, such that the entire shore plant can be managed from a holistic risk perspective.
The SFPP mission-risk concepts and analytical approaches make best use of existing Coast Guard data and ongoing FAM initiatives. As better FAM data and metrics are developed, they can be applied in the SFPP as-is rather than throwing the entire process out and starting over.
The SFPP process recognizes that different FAM investment types have different drivers and are therefore deserving of different likelihood and severity indicators. It is able to address these differences while maintaining consistency in its analysis of mission risks. This analytical consistency allows measurement of total relative mission risk and direct comparison of alternative enterprise-level investment strategies on a product line, geographic, or other basis.
The SFPP process output is a straw man list of prioritized in vestments that can be used as a starting point for consideration by decision makers. Application of the SFPP process to test cases has revealed the possibility of using the shore facility inventory and valid maintenance backlog as tools themselves to advocate for additional resources.