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- Herausgeber: John Wiley & Sons
- Kategorie: Geisteswissenschaft
- Sprache: Englisch
From the moment it was first published, Facility Management became the ultimate reference for facility and design professionals who want to create a productive workplace that corresponds to the short- and long-term goals of their corporation. This Second Edition provides complete, fully up-to-date information and guidance on the evolving facility management profession that will help facility professionals and their service providers meet and exceed these goals.
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Veröffentlichungsjahr: 2017
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Table of Contents
Cover
Title
Copyright
Dedication
Foreword
Preface
Acknowledgments
About the Authors
Chapter One: An Overview of Facility Management
DEFINITIONS
ORGANIZATIONAL AND HUMAN RESOURCES ISSUES
ETHICS
THE FACILITY MANAGEMENT MISSION
YOU AND YOUR CUSTOMER
NEGOTIATION STRATEGIES
TOTAL QUALITY MANAGEMENT
4
AMERICANS WITH DISABILITIES ACT
CONCLUSION
Chapter Two: Long-range and Annual Facility Planning
LONG-RANGE FACILITY PLANNING PROCESS
STRATEGIC FACILITY MANAGEMENT FUNCTIONS
SYNCHRONIZING CORPORATE PLANNING AND CORPORATE FACILITY MANAGEMENT
STRATEGIC PLANNING
ANNUAL OPERATING PLAN
THE LONG-RANGE PLAN
SAMPLE: Corporate Facilities Procedures
STRATEGIC REAL ESTATE AND FACILITY PLANNING
SAMPLE—STRATEGIC REAL ESTATE/FACILITY AND MARKET POLICY
STRATEGIC CORPORATE FACILITY MANAGEMENT INFORMATION
DISPOSITION OF ASSETS
CONCLUSION
Chapter Three: Facility Financial Forecasting and Management
ANNUAL OPERATING PLAN
LONG-RANGE PLAN
APPROPRIATION REQUEST
TREND AND RATIO ANALYSES
CAPITAL BUDGETING EVALUATION
PRESENT-VALUE MODEL
RISK ANALYSIS MODELS
INVESTMENT VALUE APPROACH
FINANCIAL AND FACILITY ALTERNATIVES
CAPITAL PROJECT TRACKING
2
CAPITAL PROJECT TRACKING SYSTEM PROCESS AND SEQUENCE
DISPOSING OF ASSETS
OUTSOURCING
CONCLUSION
Chapter Four: Real Estate Considerations, Analysis, and Planning
RESPONSIBILITIES AND OBJECTIVES OF THE REAL ESTATE FUNCTION
BEST PRACTICES IN CORPORATE REAL ESTATE MANAGEMENT
STRATEGIC PLANNING
ISSUES FOR REVIEW AND ANALYSIS
REAL ESTATE AND FACILITY INVENTORY
DETERMINING YOUR CUSTOMER’S REQUIREMENTS
LEASE PROPERTY NEGOTIATING CHECKLIST
PURCHASE PROPERTY NEGOTIATING CHECKLIST
SAMPLE LEASE: PROPOSAL LETTER
SAMPLE PURCHASE: LETTER OF INTENT
SITE CRITERIA CONSIDERATIONS
SELECTING A REAL ESTATE BROKER
SAMPLE SALES AGENCY AGREEMENT
PRINCIPAL ANALYTICAL AND TRANSACTIONAL ACTIVITIES
THE PROCESS OF ACQUISITION
YOUR SITE EVALUATION CRITERIA
YOUR CUSTOMER’S SITE EVALUATION CRITERIA
ENVIRONMENTAL AND DUE DILIGENCE ISSUES
SAMPLE PROPERTY ENVIRONMENTAL EXECUTIVE SUMMARY
LEGAL DOCUMENT REVIEW PROCESS
LEASE AGREEMENT SAMPLE FOR ABC COMPANY
CONCLUSION
Chapter Five: Architectural and Engineering Planning and Design
DESIGN REQUIREMENTS AND LAYOUT
DESIGN FIRM SELECTION PROCESS
SUGGESTIONS FOR SELECTING A DESIGN FIRM
SAMPLE: REQUEST FOR PROPOSAL FOR ARCHITECTURAL CONSULTING SERVICES
PROGRAMMING AND DESIGN
BUDGETING
CONTRACT DOCUMENTS
BIDDING
CLOSING AND COSTS
BUILDING PROGRAMMING AND DESIGN ILLUSTRATED
CAMPUS AND HIGH-RISE OFFICE CONCEPTS
CONCLUSION
Chapter Six: Interior Programming and Space Planning
SPACE AND FURNISHING STANDARDS
SAMPLE: ABC COMPANY FURNISHING STANDARDS
NATIONAL PURCHASING CONTRACTS
ALTERNATIVE PROJECT DELIVERY SYSTEMS
ERGONOMIC AND LIFE SAFETY ISSUES
ADDITIONAL PLANNING AND DESIGN REQUIREMENTS—CURRENT TRENDS
FACILITY MANAGEMENT INFORMATION SYSTEM
WORK ENVIRONMENT TRENDS
CONCLUSION
Chapter Seven: Construction and Renovation Work
CAPITAL AND CHURN PROJECTS
PERMITS
REVIEWING AND AWARDING THE CONSTRUCTION CONTRACT
SAMPLE: BID ANNOUNCEMENT
SAMPLE PROPOSAL FORM
SAMPLE: CONTRACT AGREEMENT FOR CONSTRUCTION
PRECONSTRUCTION MEETING
CONSTRUCTION
PROJECT COSTS
CERTIFICATE OF OCCUPANCY AND PUNCHLIST
OWNER-FURNISHED ITEMS
RELOCATION
SAMPLE: RELOCATION AND MOVING PROPOSAL
SAMPLE: RELOCATION INSTRUCTIONS MEMORANDUM
BUILD-TO-SUIT CONCERNS (TURNKEY ACQUISITION)
SAMPLE: REQUEST FOR PROPOSAL FOR A BUILD-TO-SUIT
NEW PARADIGMS
1
CONCLUSION
Chapter Eight: Maintenance and Operations
THE IMPORTANCE OF MAINTENANCE AND OPERATIONS
PREDICTIVE MAINTENANCE
GOALS OF MAINTENANCE OPERATIONS
MAINTENANCE AND OPERATIONS ALTERNATIVES
THE FACILITY MAINTENANCE MANAGEMENT FUNCTION
MANAGEMENT PLANNING PROCESS
SAMPLE: OUTSOURCING MAINTENANCE SERVICES REQUEST FOR PROPOSAL GUIDELINES AND STATEMENT OF WORK
MANAGING THE PHYSICAL ASSET
INTRACOMPANY AND CUSTOMER RELATIONS
FINANCIAL REPORTING AND CONTROLS
ADMINISTRATIVE RESPONSIBILITIES
MARKETING AND LEASING
CONCLUSION
Chapter Nine: General Administrative Services and Technology
GENERAL ADMINISTRATIVE SERVICES
DISASTER AVOIDANCE AND RECOVERY
RECORDS MANAGEMENT
FURNISHINGS AND EQUIPMENT INVENTORY
MAIL AND COPY CENTER SERVICES
AUDIOVISUAL EQUIPMENT SERVICES
CONFERENCE ROOM SCHEDULING
FOOD AND BEVERAGE SERVICE
RECYCLING AND CONFIDENTIAL DESTRUCTION SERVICES
TECHNOLOGY
TELECOMMUNICATIONS AND COMPUTER INTEGRATION
CONCLUSION
Chapter Ten: Successful Facility Management
HANDS-ON EXPERIENCE
EDUCATION
INTEGRATED ASSET MANAGEMENT
COMMUNICATIONS AND LEADERSHIP
MOVING TOWARD THE FUTURE
TRADITIONS
FROM NOW TOWARD THE FUTURE
THE FUTURE OF FACILITY MANAGEMENT
CONCLUSION
Glossary of Facility Management Definitions and Buzzwords
Index
End User Licence Agreement
List of Illustrations
Chapter Ten: Successful Facility Management
Figure 10.1 Integrated Asset Strategies
Figure 10.2 Integrated Site/Asset Cycle
Figure 10.3 Functional Service Silos and Vertical Processes
Figure 10.4 Integrated Corporate Services
Guide
Cover
Table of Contents
Begin Reading
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e1
Facility Management
Second Edition
Edmond P. Rondeau, AIA, CFM, IFMA Fellow
Robert Kevin Brown, PhD, GRE, AICP
Paul D. Lapides, CPA, MBA
Copyright © 2006 by John Wiley & Sons, Inc. All rights reserved
Published by John Wiley & Sons, Inc., Hoboken, New Jersey
Published simultaneously in Canada
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008.
Limit of Liability/Disclaimer of Warranty: While the publisher and the author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor the author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
For general information about our other products and services, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002.
Wiley also publishes its books in a variety of electronic formats. Some content that appears in print may not be available in electronic books. For more information about Wiley products, visit our web site at www.wiley.com.
Library of Congress Cataloging-in-Publication Data:
Rondeau, Edmond P.
Facility management / Edmond P. Rondeau, Robert Kevin Brown, Paul D. Lapides. 2nd ed.
p. cm.
Includes bibliographical references and index.
ISBN-13 978-0471-70059-3 (cloth)
ISBN-10 0-471-21061-7 (cloth)
1. Real estate management. 2. Facility management. I. Brown, Robert Kevin.
II. Lapides, Paul D. III. Title.
HD1394.R66 2006
658.2—dc22
2005010713
DEDICATED TO:
The hardworking, knowledgeable, and skilled facility professionals who acquire, plan, design, construct, support, maintain, and manage corporate facilities to help their customers and organizations succeed and excel.
The in-house customers who require and accept professional assistance and entrust their facility service providers with corporate resources and timely confidential information to meet their strategic business requirements.
The suppliers, vendors, contractors, and consultants who provide high-quality, timely, creative, and cost-effective services to help their facility professional clients succeed and excel.
The bosses and corporate officers who support and provide their facility professional staff with the responsibility, authority, and resources to execute their duties.
The students, teachers, and educational organizations who sustain a growing knowledge and research base of facility management information and are the future of the profession.
Keep up the good work!
And Sarah D. Rondeau, wife of Ed Rondeau.
Foreword
Not until the 1980s did facilities management (FM) come into its own. Even though FM had always been around in one form or another, it lacked a focus, even a name. It did not command a presence either within the organization or without. In fact, practitioners didn’t know that “someone else does what I do,” as the FM vice president of a Midwest bank told me in 1980.
Indeed, the 1980s can be considered the decade of facilities management. Associations of professional FM practitioners were formed, colleges and universities developed FM degree programs, publications exclusively for FMs appeared for the first time, and manufacturers and consultants hopped on the FM bandwagon with marketing plans to serve this newly identified buyer with clout.
In short, the sleeping discipline emerged from its cocoon and matured to benefit the corporation and its employees. Facilities managers turned their attention to critical issues, from human factors to new technologies, energy conservation to indoor air quality, and the means to integrate them all in the total workspace.
But by the end of the decade, the flourishing economy took a nosedive with a recession unlike those of the past. The recession of the 1990s was deeper and steeper, and business is seemingly unable to make a fast rebound to anything we might consider normal. Reflecting business in transition, the early 1990s saw new words enter corporate America’s lexicon: reengineering, restructuring, reinventing, and downsizing, rightsizing, smartsizing. No matter what the euphemism, employees were pink-slipped by the tens of thousands.
Nor were facilities managers immune to wholesale layoffs. In some cases, the entire FM department was disbanded, giving meteoric rise to outsourcing as a word and a business concept. American business was indeed in the throes of transition, and FMs struggling for survival diligently searched for new means to meet belt-tightening mandates with bottom-line measures. In response came such concepts as hoteling, telecommuting, virtual offices.
The first five years of the twenty-first century have seen economic recession after 9/11 and the growth of business mergers have continued to force reconsideration of many long-accepted practices. As economists forecasted a slow recovery after 9/11 American business continue to pull out of this long slump.
In the 2000s, facilities management executives are facing even greater pressures to sharpen their strategic skills to match those of every other top executive in the corporate structure. As a result, educational tools will be in demand by those eager to move ahead. This book by three highly regarded professionals serves as a solid foundation for the principles and practice of facilities management. The challenges ahead may be great, yet meeting those challenges can be professionally and personally rewarding.
ANNE FALLUCCHI
IFMA Fellow Editor Emerita and Founding Editor, FACILITIES DESIGN & MANAGEMENT
Preface
The facility management profession has been and continues to evolve as an in-house service to corporate employers. Many experienced corporate facility management professionals and product and service providers have been working to improve the profession, information, products, and services they provide their in-house customers and clients. A 1991 market study by a national real estate services group stated, “More than seven billion square feet of building space and four quadrillion square feet of land are owned by corporate America. It is often the most valuable asset on U.S. company balance sheets. As the nation’s businesses continue to undergo a fundamental restructuring—through mergers and acquisitions, decentralization, new technologies, changing markets and tightening profits—the pressure is on to better manage corporate facilities and make those assets work harder.”1
As local, national, and global economies and services change, providing information and services that lead to informed and financially sound decisions about these assets becomes even more important in protecting them and improving the value of your corporation. Ideally, this book will help you and your company protect and more effectively and efficiently use its assets to improve shareholder value.
This book contains up-to-date information about the evolving facility management profession that will help facility professionals and their service providers meet the current and long-range challenges and opportunities they face.
Among the book’s outstanding features are its hands-on approach and many relevant exhibits, including samples, policies, procedures, forms, and examples. This book takes a practical approach to the activities facility and outsource professionals must address to successfully manage their responsibilities and career.
This book provides the facility professional with a detailed review of facility management issues. It does not provide a detailed review of or instructions regarding legal details, issues, or requirements; the facility management professional should review and address these topics with corporate or outside legal counsel.
The book is divided into ten chapters designed to help you look at the services and issues facility professionals and consultants face in the ongoing cycle of successfully meeting their customers’ requirements and completing facility management assignments.
Chapter 1 provides an overview to facility management, including a brief discussion of the evolution of the profession, definitions, organizational and personnel issues, ethics, the facility management mission, you and your customer, negotiation strategies, service level agreement (SLA), total quality management (TQM), balanced scorecard, the Sarbanes-Oxley Act of 2002, LEED, and the Americans with Disabilities Act (ADA).
Chapter 2 presents information on long-range and annual facility planning with reference to complementing the business plan and synchronizing corporate planning. It also looks at corporate facility planning, strategic planning, the annual operating plan, the long-range plan, strategic real estate and facility planning, strategic corporate facility management information, and the disposition of assets.
Chapter 3 reviews facility financial forecasting and management. Areas covered include the annual operating plan, the long-range plan, appropriations request, trend and ratio approach, capital budgeting evaluation, financial and facility alternatives, the development and use of capital project tracking, disposing of assets, and outsourcing.
Chapter 4 examines real estate considerations, analysis, and planning. With the vast amount of corporate resources and funds invested in corporate real estate and their associated legal commitments, it is important that facility professionals understand the responsibilities and objectives of the real estate function, best practices in corporate real estate management, issues to review and analyze, real estate and facility inventory, site criteria considerations, determination of customers’ requirements, selection of a real estate broker, principal analytical and transactional activities, acquisition, site evaluation criteria, customers’ site evaluation criteria, environmental and due diligence issues, and the legal document review process.
Chapter 5 reviews architectural and engineering planning and design: development of design requirements and layout, design firm selection process, programming and design, LEED (Leadership in Energy and Environmental Design), budgeting, contract document review, bidding the project, closing and costs, building programming and design illustrated, and campus and high-rise office concepts.
Chapter 6 provides interior programming and space-planning information. It considers space and furnishing standards, national purchasing contracts, space programming, alternate project delivery systems, ergonomic and life safety issues, additional planning and design requirements, the need and requirements for a facility management system (FMIS), and work environment trends that influence space and how people work.
Chapter 7 discusses construction and renovation work such as capital and churn projects; permitting, reviewing, and awarding the construction contract; the preconstruction meeting; construction and renovation; project costs; the certification of occupancy and the punchlist; owner-furnished items; relocation; build-to-suit concerns; new paradigms; and private funding initiatives the FM must face and manage.
Chapter 8 considers the many details of facility maintenance and operations requirements. It reviews the importance of maintenance and operations, its goals and alternatives, time facility maintenance management function, management planning process, managing the physical asset, intracompany and customer relations, financial reporting and controls, administrative responsibilities, and marketing and leasing owned and leased facilities.
Chapter 9 provides an overview of general administrative and technology services: telecommunications and computer integration, security and safety in light of 9/11, disaster avoidance and recovery, records management, furnishings and equipment inventory, mail and copy center services, audiovisual equipment services, conference room scheduling, food and beverage service, and recycling and confidential destruction services.
Chapter 10 examines integrated asset management, technological changes, communication and leadership, successful facility management, and the anticipated evolution of the FM profession. Topics reviewed include hands-on experience, education, and traditions.
We hope that after you read this book you will share with us your thoughts and comments about additional material and exhibits that should be included in the next edition. Also, we are interested in learning about your facility management experiences, trends, rules of thumb, and other relevant information. To communicate errors, suggestions, and experiences to us, please contact our publisher: John Wiley & Sons, Inc., Professional & Trade Division, 111 River Street, Hoboken, NJ 07030.
Thank you for your support; we look forward to hearing from you.
EDMOND P. RONDEAUROBERT KEVIN BROWNPAUL D. LAPIDES
Atlanta, Georgia
1
Arthur Andersen & Co., Real Estate Services Group, Marketing Publication, 1991, p. 2.
Acknowledgments
The authors acknowledge and thank the following professionals, in-house customers, and corporate clients whose experience, writing, speaking, and sharing contributed to many of the concepts, ideas, and experiences utilized in the development, realization, and evolution of the facility management profession and practice.
Bill Adams, Project Management; Parkash Ahuja; Keith Alexander, IFMA Fellow, Centre for Facilities Management, UK; David Armstrong, IFMA Fellow, Armstrong Associates; Alvin Arnold, BDO Seidman; Bill Back, CFM, IFMA Fellow; David Baer, UPS Supply Chain Solutions; Pat Bailey, GSA Real Estate Sales; Diane Barnes, Wilkhahn, Inc.; Dr. Franklin D. Becker, Cornell University; Katleen Beeckmann, CoreNet Global (Belgium); Charles Bennett, CPA; Susan Biggs; Stephen Binder, Cushman & Wakefield; Michael Bourque, Earl R. Flanshtirgh & Associates; Rebecca Bray, UPS Supply Chain Solutions; Robert Brosseau (Canada); Richard Burroughs, Applied Software; Derek K. Butcher, Centre for Facilities Consultancy (UK); Malcolm Campbell (Australia); Deborah G. Carlston, Synnax Corporation; Alan Clayton, UPS Supply Chain Solutions; Roy Cloudsdale, Johnson Controls World Services; Peter A. Conlin, CFM; McKinley Conway, Conway Data; Dick Cooper, CFM, IFMA Fellow; David Cotts, CFM, IFMA Fellow (retired); Kreon L. Cyros; Marvin Dainoff, M. Dainoff Associates; John Diefenbach, AIA, JIA, PAE International (Japan); Ben DeVries; Jeff Dimond; R. Landon Doggett (retired); John Dues; Dr. Francis Duffy, DEGW Architects (UK); Marty Dugan; Raymond G. DuPont; Lawrence L. Edge, Medallion Group LLP; Behrooz (Ben) Emam, AIA, CFM; Eleanor Estacio, CoreNet Global; Anne Fallucchi, IFMA Fellow (retired); Carol Farren, CFM, IFMA Fellow, Facility Management Worldwide; Rudy Flores; Bruce Kenneth Forbes; John Fox (Australia; retired); Geoff Gidley, Facility Management Solutions Ltd. (UK); George Graves, IFMA Fellow (retired); Robert Gross, IFMA Fellow, Vanguard; Jeffrey Hamer, Asset Direction, Inc.; Philip E. Hammel, Honeywell; Dorothy Harris; Ernesto Hernandez; C. Frederick Hess, CFM, IFMA Fellow; James Hickey, CFM, IFMA Fellow (retired); Gerry E. Higgs, CFM, PE; Melanie Hill, CoreNet Global (UK); Ken Hitchcock, Marcus & Millichap; Gerald Hubbard, CFM, IFMA Fellow; John Igoe; David Jarman, Price Waterhouse; Lois Johnson; Samuel Johnson, CFM, IFMA Fellow; Diana Jones, The Home Depot; William Joseph; Maury Keiser, CFM, IFMA Fellow (retired); Peter S. Kimmel, AIA, IFMA Fellow; Prentice Knight, CoreNet Global; Sigeru Kuwabara, NTT Power and Buildings (Japan); Alex Lam, CoreNet Global (Canada); Earnie C. Leake, CFM, IFMA Fellow; TaeGoo (Ty) Lee, System-O Consultants (Japan); Scott Levitan, Georgia Institute of Technology; Chad Lewis; Dennis Longworth, CFM, ASAE Fellow; Harry Ludwig, King & Spalding; Erik Lund, IFMA Fellow (retired); Jean Lusso, Kerry Lydon (Belgium); Barry Lynch, AIA; Dr. Josef Mack, Facility Management Institute (Germany); Diane MacKnight, CFM, IFMA Fellow; Professor Stephen Margulis, Grand Valley University; Jon Martin, Carter; Mike McGahagin; Mary McGrath, CFM (Canada); Sandra Moss Mallory, Smith, Gambrell & Russell; Jim Moss, Applied Software; Sharon Mount, AIA; Motosugu Nakatsu (Japan); Christine H. Neldon, CFM, IFMA Fellow, St. Paul Travelers; Makato Ogawa, Nomura Research Institute (Japan); Richard Palmer, CFM; Hazel Pankey, Conway Data, Inc.; Jack Parker, Corporate Space Services; Joel Parker, Conway Data, Inc.; Sterling Pettefer; Norman Polsky (retired); Joy Pooler; Helen Rauch, Helen Rauch & Associates; Alex Robertson, Siemens Real Estate, Inc.; J. Peter Ruys, AIA, ASID, Ruys & Company; Mel Schlitt, The Merchandise Mart; Michael Schley, FM Systems; Dr. William R. Sims, CFM, IFMA; Henry Howard Smith, AIA (retired); Stan Stanton, Huntress Executive Real Estate Search; Richard Stonis, Associated Space Design; David Taylor (Australia); Tom Tillman; Dr. Andres F. van Wagenberg, Eindhoven University of Technology (Netherlands); Larry Vanderburgh, BOMI; Duncan Waddell, Corporate Facility Management Resources (Australia); Ken Walker, UPS Supply Chain Solutions; Ray Wallace; Lei Wu (China); Syd Welch; Martha Whitaker; Barry J. Yach; Don Young, IFMA.
The authors further acknowledge and thank the following professional associations and education organizations whose leadership, vision, sharing, research, educational programs, and service to members and students help shape and provide guidance for the evolution of the facility management profession and practice:
American Institute of Architects (AIA)
American Society of Interior Designers (ASID)
American Society of Real Estate Counselors (ASREC)
Association National des Responsables de Services Generaux (France)
British Institute of Facilities Management (BIFM)
Building Owners and Managers Association (BOMA)
Building Owners and Managers Institute (BOMI)
Business and Institutional Furniture Manufacturers Association (BIFMA)
CoreNet Global
Danish Facilities Management Association (DFMA)
EUROFM
Facility Management Association of Australia Limited (FMA)
German Facility Management Association (GFMA)
Industrial Asset Management Council (IAMC)
Institute of Business Designers (IBD)
Institute of Real Estate Management (IREM)
International Facility Management Association (IFMA)
International Society of Facility Executives (ISFE)
Japan Facility Management Association (JFMA)
National Office Products Association (NOPA)
Netherlands Facility Management Association (NEFMA)
Norwegian Network of Facility Management (NNFM)
Urban Land Institute (ULI)
Thanks also to John Czarnecki of John Wiley & Sons, Inc., for his patience and support with this second edition.
Finally, we wish to thank those professionals and organizational leaders who care and who persevere in providing a humane, environmentally friendly, safe, and secure work environment for their colleagues, clients, and employees.
E.P.R.
R.K.B.
P.D.L.
About the Authors
EDMOND P. RONDEAU, AIA, CFM, IFMA Fellow, is the general manager, real estate, in the Real Estate Development Office, where he manages owned and leased property for the Georgia Institute of Technology in Atlanta, Georgia. Previously, Ed was the director of global operations for Conway Data, Inc., an Association Management Company based in the Atlanta, Georgia, area, where he was responsible for association management–related assignments primarily outside of North America. Ed has been responsible for the International Development Research Council’s member and chapter development programs, world congresses, and staff for Asia, Australia, Europe, and Latin America regions. His work experience includes serving as the director of consulting services for the Integrated Facility Management business unit of Johnson Controls, Inc.; as the manager of corporate real estate for Contel Corporation; as the vice president of property management for the National Bank of Georgia; as the vice president of real estate and construction for Arby’s, Inc.; as a construction manager for the Coca-Cola Company; and as a staff architect for Auburn University.
Ed holds a master’s in business administration in real estate from Georgia State University and a bachelor of architecture from Georgia Tech, is a registered architect in Georgia, holds a NCARB certificate, and is a Certified Facility Manager. He was the 1988 president of the International Facility Management Association (IFMA), served as the 1990 chair of the IFMA Foundation, was elected an IFMA Fellow in 1992, and was the 1994/1995 president of the IFMA Real Estate Council. He served on the board of directors for the Board Certified in Corporate Real Estate (BCCR), was a member of the IDRC Financial Review Board, was a trustee of the IFMA Foundation, has served as the chair of the Advisory Committee for the Georgia Tech Integrated Facility and Property Management masters degree program and is a member of the Core Global Finance Committee.
He has worked for spoken on corporate real estate and facility management issues throughout the United States and internationally, including in Argentina, Australia, Austria, Belgium, Brazil, Canada, China, Cuba, Denmark, Japan, Germany, Hong Kong, India, Italy, Mexico, the Netherlands, New Zealand, Philippines, Singapore, South Korea, Spain, Sweden, Trinidad and Tobago, the United Kingdom, and Venezuela. Ed has authored numerous articles and is a coauthor of two books on corporate real estate and three books on facility management. He is the author of numerous facility management and corporate real estate articles, the author of Principles of Corporate Real Estate, a coauthor of Managing Corporate Real Estate and Managing Corporate Real Estate: Forms and Procedures, the coauthor of the real estate management information system LeaseKiT, and the coauthor of the capital project budget tracking system CaProKIT. He is the lead author of the book Facility Management, which received the 1997 IFMA Author of the Year Award; is coauthor, with Dr. Walther Moselener, of Facility Management 2, published in Germany; and is the coauthor of The Facility Manager’s Guide to Finance and Budgeting, for which he received the 2004 IFMA Distinguished Author Award.
ROBERT KEVIN BROWN, PhD, CRE, AICP, is president, Robert K. Brown & Associate. He is the chair emeritus of real estate and the originator and former chairman of the Department of Real Estate, College of Business Administration, Georgia State University. He served previously as corporate director of real estate, Rockwell International Corporation; vice president, Rockwell Graphics Systems Group; and president, Narland Corporation and Standard Property Land Company, wholly owned Rockwell subsidiaries.
Dr. Brown holds a bachelor’s degree from the Johns Hopkins University and master’s and doctoral degrees from the University of Pittsburgh. A nationally known lecturer and consultant on asset management strategies to many Fortune 500 companies, he is the codeveloper of the first commercially available PC-based corporate real estate asset management system. He is the author of numerous articles and 11 books on real estate, including Managing Corporate Real Estate, The Real Estate Primer, Essentials of Real Estate, Real Estate Economics, and Corporate Real Estate: Executive Strategies for Profit Making, and is the coauthor of Managing Corporate Real Estate, Managing Corporate Real Estate: Forms and Procedures, and Real Estate Asset Management: Executive Strategies for Profit Making. Dr. Brown was the contributing editor of the corporate real estate column in National Real Estate Investor Magazine. He also serves as a member of the Asset Management Editorial Board of National Real Estate Investor Magazine and the board of advisors of The Arnold Encyclopedia of Real Estate.
Dr. Brown is a member of the American Society of Real Estate Counselors (GRE) and served as a member of its board of governors. He holds memberships in the American Real Estate Society (ARES); American Institute of Certified Planners (AICP); International Facility Management Association (IFMA); and International Association of Corporate Real Estate Executives (NACORE), where he served on the board of directors. He served as a member of the board of directors of Underground Festival, Inc., the governing board of Underground Atlanta. More recently, Dr. Brown served an appointment as visiting professor in the Graduate School of City Planning, College of Architecture, Georgia Institute of Technology.
PAUL D. LAPIDES, CPA, MBA, is a professor of management and entrepreneurship at the Michael J. Coles College of Business at Kennesaw State University (Georgia), where he founded and serves as director of the nationally recognized Corporate Governance Center.
Mr. Lapides is a member of the board of directors of Sun Communities, Inc. (NYSE: SUIT), and the Board of Directors Network, Inc. (BDN), and serves on the advisory boards of the National Association of Corporate Directors (NACD) and the Newman Real Estate Institute at Baruch College. His business and consulting experience includes advising hundreds of start-up, growth, and midmarket companies, as well as many of America’s Fortune 500 companies.
Mr. Lapides is the author of more than one hundred articles and twelve books, including Managing and Leasing Residential Properties; coauthor of Managing Corporate Real Estate, Managing Corporate Real Estate: Forms and Procedures, Real Estate Investment: Strategy Analysis Decisions; and contributing author of The Public REIT Legal Source, Real Estate Investment Trusts, Problem Real Estate, Real Estate Syndication Manual, Real Estate Transactions, and The Arnold Encyclopedia of Real Estate. A frequent speaker at business, professional, and academic organizations, his opinions have appeared in more than 500 publications and on national and local television and radio.
Mr. Lapides received a bachelor’s degree with honors in economics from the Wharton School of the University of Pennsylvania and a master’s of business administration from New York University. Prior to joining the faculty at Kennesaw State University, he was an adjunct professor of real estate at New York University and Columbia University.
Chapter OneAn Overview of Facility Management
How did facility management evolve into the current profession? In this chapter, we describe facility management of the past and the changes that have brought the profession and practice to its current state. The directions we believe facility management will take in the United States and Canada are discussed in chapter 10.
Only in the past thirty years has facility management become a recognized and required process of organizations throughout the world that expend resources on people, their work environment, and the ways they work. Why has this come about? Is it new? Not really. For many years, universities, colleges, and major corporations, as well as government agencies with numerous large facilities, extensive maintenance and operating budgets, and scarce capital budgets, have been developing and using management practices and procedures that are now widely accepted by professionals.
Such organizations, with minimal financial and human resources, have had to closely manage their day-to-day requirements and the details of their expenditures. They have had to think, plan, and develop their facility programs based on long-term goals, political reality, and economic necessity.
Organizations with less restrictive economic or physical requirements traditionally spent little time on long-range or day-to-day facility issues or details. Such expenditures did not comprise a large percentage of the budget, nor was the planning, implementation, and operation of a small number of facilities complex.
Design a building, build it, put up office partition walls, doors, and so on; hookup the AT&T-provided phone; install a desk, chair, credenza, side chairs—and move in, with few complications.
What changed this process, and what impact have the changes had on the way we develop and manage work environments? Thirty-five years ago, many companies were smaller than they are today; they were often state or regionally focused; had relatively cheap energy, construction, and work space costs; and focused on short-term goals, objectives, and requirements.
In the early 1970s, inflation became a threatening issue. The oil embargo brought fuel shortages that spurred a dramatic increase in the cost of materials and the financing of all endeavors. Capital funds and materials became scarce, and the deregulation of monopolies and previously regulated services (phone, fuel, airline, etc.) required many large companies to compete more effectively and efficiently in the marketplace.
Increased competition from foreign companies filled some of the material and services void, while many U.S. companies that reacted positively with innovation and alternate solutions prospered. Inefficient manufacturing processes, nonproductive work environments, and higher worker expectations required senior management to seek alternatives, to plan for the long term, to “work smarter,” to be more productive and become more competitive.
One result of this business crisis and upheaval in U.S. companies was the evolutionary management of scarce resources—the transition to managing facilities as an asset. Facility management as a practice and profession is continuing to evolve to provide management services that meet strategic long-range and short-term corporate requirements. These business practices combine proven and innovative methods and techniques with the most current technical knowledge to achieve humane, productive, and cost-effective work environments. Strong central threads of quality of life, cost-effectiveness, flexibility, and environmental considerations run through the technical components of the practice. In most cases, facility professionals are corporate generalists or boundary spanners who recruit and manage a variety of specialists such as in-house staff, consultants, or outsourcing firms.
Facility professionals must look ahead with minimal knowledge and be able to both perform and improve routine tasks. The desire and ability to work well with people in a service capacity, to be practical, economical, available, tactful, flexible, persuasive, responsive, and timely, are additional facility management traits and requirements.
Corporate or organizational owners/tenants and their staffs have always had facility management responsibilities, handling them with varying degrees of success depending on the manager’s training, capabilities, and interest. Whether corporations or organizations own or lease their office, factories, retail space, warehouses, or specialty business locations, they have found it necessary to assign one or more employees the tasks of planning, budgeting, securing a location, designing, constructing, furnishing, occupying, managing, maintaining, redesigning, reconstructing, relocating, and disposing of corporate facilities.
Corporations with approximately 100,000 rentable square feet of office space or 100 to 200 employees often find that they need a structured way to deal with project budgets, planning, project delivery and internal coordination, authority, and responsibility for major capital projects, day-to-day customer building change requests, and building/site management issues. Thus, many corporate leaders have created or chosen one internal department, Facility Management (FM), to manage and coordinate these issues.
The facility management profession continues to change and evolve. Corporate mergers and buyouts have required facility professionals to compete for limited career opportunities and to become more proactive within their organizations. The recession of the 1990s and early 2000s taught facility professionals some hard lessons. To remain in business and excel, we must have informed and knowledgeable service partners in the facility management process who are trained, educated, and prepared to address the challenges and opportunities that await them.
The trend of outsourcing facility management and other corporate services continues as organizations seek to focus long-term personnel and resources on core business requirements. Outsourcing has changed the way management and service providers look at the in-house staff because these same support employees—with little advance notice—may become outsourced employees as service providers or contract consultants.
The pressure to reduce staff costs through downsizing, which continued into the early 2000s, has been replaced by programs to actively reduce all real estate and facility management expenses. We find that senior executives in many corporations are requiring reductions in annual operational costs in the range of 10 to 30 percent from the previous year’s operational costs—and all without loss in the quality of real estate and facility services provided. To achieve these savings, many corporate real estate and facility professionals have had to become agents and leaders of change.
Facility professionals have had to look at all service levels, service specifications, and the personnel costs associated with their staffs and service providers. Facility organizations have had to grow and mature toward leading-edge ways of doing business while providing equal or better services to their customers. Some who have not grown or developed new ways of producing more with less have failed and are no longer in corporate real estate or the facility management profession. New ways of doing business include:
Globalization of real estate portfolios and associated facility management strategies
Total energy management—addressing supply, demand, and operational energy management issues as an integrated solution
Performance-based contracts—partnerships designed to create incentive and reward innovation
Focus on workplace management rather than asset management only
Bundling and integration of services that affect the workplace environment—proximity (workplace configuration and move management), connectivity (IT/LAN), and comfort (HVAC)
Service levels rather than performance specifications
Setting up and maintaining a balanced scorecard process to measure performance against goals and regularly reporting this information to customers
Implementing a Six Sigma program as a measure of quality that strives for near perfection
The Sarbanes-Oxley Act of 2002—a federal law that created a new era in financial reporting for public companies. The facility professional must consider practical means of assisting companies to comply with this important federal legislation.
The importance of energy and environmental design and Leadership in Energy and Environmental Design (LEED) as developed by the U.S. Green Building Council (see
chapter 5
)
DEFINITIONS
In the late 1970s, the profession began to receive recognition and to define itself more formally within U.S. and Canadian corporations, becoming known as facility management. During this period, the Facility Management Institute, a nonprofit educational and research organization, described the profession as managing and coordinating interrelated “people, process, and place” issues and functions within the corporation or organization. The U.S. Library of Congress, in 1982, defined facility management as “the practice of coordinating the physical workplace with the people and work of the organization; it integrates the principles of business administration, architecture, and the behavioral and engineering sciences.” [Library of Congress Professional Definitions, Library of Congress News #82–115.]
The International Facility Management Association (IFMA) now defines facility management as “a profession that encompasses multiple disciplines to ensure functionality of the built environment by integrating people, place, process and technology” (see Exhibit 1.1) and has grouped the numerous job responsibilities of facility professionals under nine major functional areas, as shown in Exhibit 1.2.
Other management terms represent related issues. For example, property management is frequently described as the profitable operation and management of owned, leased, or subleased real property including land, buildings, assets, equipment and legal commitments for an owner, developer, or landlord. The facility professional does not usually manage corporate facilities for a profit; the mission of this person and staff is to provide high-quality, cost-effective service to in-house customers in support of the corporate business plan—that is, people and process issues rather than just place issues.
Another example is asset management, which is often described as the administration, operation, and management of a real property portfolio including land, facilities, and legal commitments controlled by an owner, tenant, developer, or landlord. Asset management can be a function within property management or a service outside of property management. It can be included within facility management as a function that usually focuses on the physical land, building, and/or space, and the operation and management of the asset. Asset management usually does not address people issues.
Exhibit 1.1 People, Process, Place, Technology(Developed by the International Facility Management Association in response to the evolution and the importance of Technology in FM and with FM customers)
Exhibit 1.2 Nine Facility Management–Related Job Responsibilities
At the end of the text is a glossary of facility management definitions and buzzwords.
As the owner’s representative, the facility professional is an expert in almost all aspects of the corporation’s internal culture and should have unique insight to personnel, personalities, other support departments, and business history and real estate/facility requirements. This position title may be facility manager, director of facilities, vice president of facilities, or even others, depending on the size and history of the organization, related activities, and internal politics. This person, who may or may not be trained in another profession (e.g., architecture, engineering, interior design, business administration, accounting, finance, human resources), uses his or her corporate business experience and people skills to manage some or all of the nine job responsibilities listed in Exhibit 1.2 and at times takes on additional corporate business responsibilities.
Facility professionals are generalists who understand the corporate business philosophy; respect its financial, legal, and quality requirements; know who the company’s decision makers are; and recognize those with the authority to sign legal documents. They facilitate and manage budgeting; interview and hire consultants; set design, construction, furnishings, scheduling, space and office furnishing standards; institute capital purchasing programs; and translate corporate customer facility requirements into a cost-effective, environmentally safe, and aesthetically pleasing workplace. Their role is to ensure that the customer and the corporation have an on-time and on-budget project with the best possible site, space, facilities, furnishings, and support systems to serve their needs today and tomorrow. Further, facility professionals have the responsibility to identify, secure, and work with qualified and high-quality service and product providers (see Exhibit 1.3).
The information in Exhibit 1.2 and Exhibit 1.3 is graphically combined in Exhibit 1.4, which shows the central management role of the facility professional.
Exhibit 1.3 Quality Service and Product Providers
Facility managers must handle increasingly complex processes with an expanding number of team members. For example, consider the differences in designing and building a Model T Ford in the 1920s and today’s complex technological cars. Today’s practice must address diverse technological and economic changes:
Increasing use and reliance on technology, including more and more computers, telecommunications devices, and their support requirements
Continuing significant cost of leased or owned facilities, materials, human resources, benefits, costs of capital, taxes, and fixed operating costs
Evolution of the closed-office concept to the needs, flexibility, and cost-effectiveness of the open-plan/open-office concept
Increasingly complex telecommunications, computer cabling, power, backup power, heating, ventilating, and air conditioning, lighting, life safety, security systems, environmental and ergonomic requirements
Higher worker expectations for pleasant, ergonomic, secure, and cost-effective environments coupled with limited time, space, staff, and funds
Competitive and economic pressures to reduce or hold the line on expenditures; increase profits; reduce staff, and buy out, merge with, or take over competitors
Pressure to mesh personnel and facility requirements with long-range regional, national, and international business issues, as well as to develop an integrated strategic corporate business and facility plan
Exhibit 1.4 Facility Management Process
Requirement to provide high-quality, integrated in-house services in a timely, coordinated, cost-effective manner based on an intimate knowledge of the corporate culture and politics, including customer and senior management service expectations
Facility management is known primarily by its effects, principally acquisition, design, construction, maintenance, and operation and support services for in-house customers and the physical facilities.
ORGANIZATIONAL AND HUMAN RESOURCES ISSUES
Senior corporate management deals with facility management issues and services in one of three ways:
Senior management continues to maintain the status quo, which may appear to meet current requirements and is the politically safe thing to do.
If senior management perceives or believes facility management change is necessary, it may give an available in-house person the responsibility for resolving the problems while delegating little or no authority, regardless of the individual’s training or experience.
Knowledgeable and experienced senior managers provide strong leadership by making substantial commitments to dealing with facility issues and services by identifying and placing a qualified, knowledgeable, and experienced in-house or outside person in the role of facility professional with the responsibility and
authority
to carry out his or her mission.
There is a growing understanding among corporate senior leaders of the need to delegate authority as well as responsibility to facility professionals charged with the strategic planning and management of the corporations’ fixed assets, facilities, and services. Their mission is to enable substantial savings of funds, worker hours, and resources. These achievements reduce overhead, raise productivity, and increase profits, thus improving the bottom line.
Organizational Issues
The facility management department functions within a formal organizational structure. It must, therefore, be responsive to the organization’s internal philosophy as well as to external market influences that affect the organization’s ability to perform. We discuss methods for performance measurement later in this chapter; here we concentrate on organizational issues.
How do formal structures vary? We can perceive variations in terms of:
The number of interdependent units established within the total organization
The levels of formal authority designated in the hierarchy
The size of each formally designated unit within the organization
The kind of authority formally delegated to the various units
The work done by the formally designated units
The location of the work
The degree of autonomy granted to each unit
Throughout this book, we describe the specifics of facility management department organization with these seven points in mind. Exhibit 1.5 is a schematic of a hypothetical corporate office organizational chart. We use a large, multinational service conglomerate as our reference base, for three reasons. First, this type of company is complex operationally, with a full complement of line and staff departments; thus, it provides excellent organizational perspectives. Second, because the facility management department is assumed to be established as an operational entity from day one, it inherits little in the way of nonproductive attitudes or personnel. Third, we assume senior management created the type of facility management atmosphere that will make the facility management program work. Exhibit 1.6 shows a design for organizing our hypothetical facility management department to implement the example corporation’s facility management and services program in a manner that is both cost and operationally effective.
Exhibit 1.5 Corporate Organizational Chart
Designated interface personnel, carried on division and group budgets, assist the facility management department. The liaison group is a key ingredient in the program because it not only provides knowledgeable personnel, maintained at noncorporate expense, but also creates a responsive communications channel between the facility management department and the operating division. A second interface group consists of other corporate departments and corresponding division and staff groups that provide advice, counsel, and expert support in a wide variety of technical areas, without appearing on our example’s departmental budget.
Extending the organization chart upward (see Exhibit 1.5), the vice president, Facility Management Department, reports through the operations side of the corporate staff to the senior vice president, Finance. In some cases, the direct-line reporting relationship is different; the senior vice president, Human Resources; the vice president, Operations; and the general counsel are among other prevalent choices. The corporate facility executive also develops relations with division and group presidents and their respective line and staff personnel. Without these links, the lack of two-way communication would probably signal serious faults in program effectiveness.
Interface Relationships with Other Corporate Staffs
Now, referencing Exhibits 1.5 and 1.6, we examine the functions of each of the other primary corporate staffs to see how the facility management department relates to and complements them.
Exhibit 1.6 portrays the many continuing interface relationships with other corporate office staffs. The level at which these relationships occurs depends a good deal on company size and on the relative position of the staffs on the hierarchical scale. We make two assumptions here: first, that the influence of the facility management department permeates all levels of corporate management; second, that our corporation is large and has numerous divisions, with a full complement of staff departments. Readers can scale their existing or preferred alignment to suit their individual situation.
1. Senior Vice President, Finance/Chief Financial Officer (CFO)
The voice and influence of the CFO permeates the highest levels of corporate decision making. Financial decisions are interwoven with operating and related decisions into composite decisions that set the tone and determine the posture and character of the corporate business mission.
Every financial officer has five essential management requirements:
a. To make sure corporate goals are financially attainable
b. To contribute financial expertise and viewpoint to management decisions
c. To serve as communicator on financial aspects of the business to investors, employees, and the public
d. To insist on corporate conduct that adheres scrupulously to ethical practices in financial matters
1
e. To ensure compliance with the requirements of the Sarbanes-Oxley (SOX) Act of 2003 in the United States.
Exhibit 1.6 Corporate Facility Management Department Organizational Chart (Copyright 1994 IFMA)
These requirements are achieved by means of a philosophical impact on toplevel strategy and by the establishment and implementation of financial goals and controls.
The facility management department becomes an arm of financial policy through its understanding of corporate financial objectives and its implementation of corporate financial policy. We suggest that top management creates broad policies, that the facility management department is cognizant of those policies, and that the actual implementation and the resultant corporate staff interfacing occur at levels subordinate to the top management level.
In the context of the financial scandals and bankruptcies of a number of major corporations in the late 1990s and early 2000s, the U.S. Congress enacted the Sarbanes-Oxley (SOX) Act of 2002, which amended the U.S. securities and other laws in significant ways. Most compellingly, SOX demands the criminal prosecution of willfully noncompliant officers of publicly held corporations. With this potentiality, SOX has affected every department responsible for financial information that affects the corporate financial statement, including facilities. It is important that the facility professional understand how SOX affects the financial information and reports that he or she is responsible for reviewing and providing to senior management.
2. Treasurer
In a substantial, diversified, and multidivision company, the CFO is the financial policy maker. Subordinate finance functions may be split between the accounting controller function and the finance treasurer function. In this case, the treasurer is entrusted with the following primary functions: The treasurer reports to the vice president, Finance, and directs the conduct of corporate treasury activities, including:
a. A continuing evaluation of the company’s capital structure
b. The development of long-range plans for capital acquisition and utilization
c. The care and custody of funds and other financial assets
d. The supervision of banking, domestic and foreign
e. Corporate-level aspects of credit, insurance, and risk management
In terms of the treasury–facility management relationship, these functions are reflected in the following treasurer planning responsibilities:
a. Preparing long- and short-range plans and strategies for short- and long-term debt
b. Reviewing the foreign and domestic cash positions of the company daily through cash and other financial forecasts
c. Planning for the maintenance of adequate funds to meet outstanding and planned commitments
d. Reviewing the implications of general economic, business, and financial developments and forecasting their impact on the corporation’s treasury operations, policies, and cash requirements.
Thus, the cash or credit conditions of surplus real estate sales and the lease-versus-buy considerations of facility acquisitions fall within the treasurer’s province in exercising custodial responsibilities over cash and debt and their interplay in the corporate capital structure.
3. Controller
If we view the treasurer as the corporate money financier, the other side of the finance function—the budget, accounting, financial controls and systems; financial reporting; and internal auditing—is administered by the corporate controller, who reports to the vice president, Finance. The controller directs the corporation’s accounting, financial reporting, contracts and pricing, financial planning, operations analysis, and government fiscal relations activities on a global basis. The main functions of this position include:
a. Exercising direction over the entire company’s accounting, contracts and pricing, government fiscal relations, and financial planning and procedures
b. Executing arrangements with outside auditors
c. Directing the preparation of the company’s official financial statements
d. Reviewing all major contracts and proposals and amendments and changes thereto, including proposed pricing strategy
e. Establishing corporate financial goals and preparing long-range and annual operating plans, forecasts, and associated operating and capital budgets
f. Analyzing the corporation’s operating results and the operating results of its various elements, identifying and analyzing potential problem areas, and presenting the results and recommended corrective action plans to operations corporate senior management
g. Evaluating major investment opportunities
The facility management department works routinely with the controller’s office when transmitting cash deposits on surplus sales, total remainder cash payments on prior sales upon the closing of the sale, and on final payments for large construction or furnishing projects.
Beyond this obvious relationship, though, the facility management department is (or should be) deeply involved in financial planning and controls activity. This involvement is heightened in companies that have a formal procedure for capital dollar requests (both for acquisitions and dispositions). This procedure, requiring the submission of a formal document commonly known as an appropriation request (AR), is examined in detail in chapter 2. Our major point here is that all such requests require input from each participating corporate staff department as well as the originating division and group documentation.
Because the facility management department is called upon to comment on and analyze the facility management aspects of the AR, the department is part of the corporate financial control mechanism. In the most complex case, the department is intimately involved in the planning behind the proposed acquisition/construction/remodeling/disposition so it can act on the program ensuing from approval smoothly, knowledgeably, and enthusiastically.
4. The Tax Affairs Department
The tax consequences of acquisitions, construction, remodeling, and dispositions permeate every facility management transaction. Accordingly, there should be heavy activity between the tax and facility management departments. Let us illustrate the general responsibilities of the tax affairs department by citing part of a fairly typical job description for a senior corporate tax person: “To handle all tax affairs of the corporation and its related entities with a view to ensuring compliance within the limits of all applicable laws in a multinational environment at the least cost to the overall organization. In addition, to handle all matters relating to the renegotiation of contracts with the U.S. government.”
The principal responsibilities of the tax affairs department are:
a. Negotiating and/or reviewing and approving major transactions in their formative stages and proposing changes to achieve the best tax results
b. Studying existing corporate structures, policies, operations, procedures, and business practices and recommending changes that would reduce tax costs
c. Requesting rulings from and conducting negotiations with taxing authorities
d. Formulating policies for and administering compliance with tax laws. This includes preparing and filing returns, approving and scheduling tax payments, and negotiating with tax examiners.
e. Advising senior management on the impact on its strategic plans of new tax laws, decisions, regulations, rulings, and proposed tax legislation
f. Recommending, authorizing, and conducting or controlling tax litigation
g. Filing corporate renegotiation reports and handling the audits and administrative proceedings relating thereto
The principal contacts between the tax affairs department and the facility management department occur in the following areas:
a. The administration and evaluation of sales and property taxes
