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ASC Proceedings of the 41st Annual Conference
University of Cincinnati - Cincinnati, Ohio
April 6 - 9, 2005         
 
LEED-EB in Facilities Management
 
Patrick Okamura CFM, CSS, CIAQM, LEEDTMAP
General Dynamics C4 Systems
Facilities Operations
Scottsdale, AZ
 
Jacob Kovel, Ph.D
Central Connecticut State University
Hartford, CT
 
Kenneth Sullivan, Ph.D and Marie Kashiwagi and Dean Kashiwagi, Ph.D, P.E.
Performance Based Studies Research Group (PBSRG)
Del E Webb School of Construction
Arizona State University
Tempe, AZ
 
An ongoing research effort in a partnership between Arizona State University and General Dynamics (GD) is focusing on the “information worker” Facility Manager (FM) concept.  The requirement of the FM information worker is to identify the value and sustainability of the FM.  The concept involves continuously measuring the value of the FM, increasing efficiency, aggressively using the cost savings to identify and minimize future risks, ensuring that if the facility owner moves their operations that it is not because of facility efficiency and value.  The FM must look ahead to ensure the FM sustainability.  The new frontier of manufacturing facility management has exposed the the concern for the natural environment, health, and working conditions as one of the biggest political threats to manufacturing.  One of the tools that seems to be a requirement of the future FM is the Lead in Environmental and Energy Design for Existing Buildings (LEED-EB) program.  The research hypothesis of this paper is to identify if LEED-EB is congruent with the FM information worker concept, if it can be justified, implemented, and measured.  This paper will use a case study at General Dynamics C-4 Systems to get a preliminary assessment of the hypothesis. 
 
Keywords: LEED, FM efficiency, FM performance, Management, and Political value
 
 
Introduction
 
Facility Management (FM) has changed over the last ten years.  FM responsibilities in the 1990s were to keep the facility running and respond to operational and management needs within a prescribed budget.  It was a traditional management role, to maintain an existing system.  Severe cost cutting resulting form the worldwide competitive marketplace has forced FM to relook at its role.  It is no longer satisfactory to maintain the status quo.  Funding and resources are being cut while requirements are being increased (spending has only increased by 0.5 percent in the past year according to the American School & University's seventh annual College Maintenance and Operations Cost Study.)  Manufacturing owners are continually looking for efficiency and value.  It has resulted in a new breed of FM, the information worker FM of the future.  The characteristics include measurements, value, efficiency, change, and the ability to identify and minimize future risk.
 
The most critical function of the FM is to communicate the value of the facility to the facility owner, in terms of improved efficiency and minimized risk in operational terms of cost, time, and minimized political risk.  To implement the information worker approach, the FM must be very efficient in the amount of information being collected and passed.  In an information environment, the FM must minimize the amount of information passed.  The information passed must be in non-technical terms, be relative, prioritized and related, and be logical and simple.  It should minimize decision making by the facility owners.  All programs used by the FM must be congruent to this philosophy.  For FM function to be sustainable, the FM must be strategic, information based, and concerned more about political risk than performance risk (in a performance based environment the risk is always political (due to a lack of information.) (Kashiwagi, 2004)  FMs must continually redefine their job.  Failure to do so will result in the FM function being perceived as a commodity, and because it is not the core expertise of the facility owner, results in the outsourcing of the of the FM function. (Okamura, 2004)
 
FM performance can be divided into the following categories: the management based who continues to operate under reduced budgets, the information worker who is able to increase efficiency and value within their budget, the high perceived performer who depends on having a relationship with the facility owner, and the low performing or outsourced FM function where the bottom line is cost.  The information worker FM is the most sustainable.  Its characteristics are visionary (looking into the future), proactive, measurement based, and depend on continuingly increased efficiency and value rather than depending on relationships and trust. 
 
The information worker FM is therefore looking at programs which:
 
  1. Measure.
  2. Minimize political risk.
  3. Are proactive and visionary.
  4. Produce simplified non-technical performance information that can be understood by the facility owner.
 
The keys here are continuous measurements and minimizing potential political risk.  The information worker FM provides the best possible FM service.  Also the information worker concept is leadership based, i.e. by definition a manager maintains existing systems while a leader influences change.  Leadership concepts and the information worker concept both measure and influence change, encourage continuous improvement, and identify best value through differential and efficiency.
 
FMs with the information worker approach will also minimize the risk of nonperformance through measurement.  In ten years of research, the Performance Based Studies Research Group (PBSRG) is yet to find an FM who has non-performance issues if they continually measure their performance and identify, prioritize, and minimize risk. 
 
 
Hypothesis
 
The FM at General Dynamics (GD) Scottsdale is transforming the FM function into an information worker approach.  His approach was to use the existing budget to make the FM function more efficient and adding value.  The hypothesis of the FM research was to identify if an FM can implement a strategic plan to continually, over an extended period of time, make the FM function more efficient and add value within the existing FM budget.  The FM’s requirement would require finding methods to become more efficient, measuring the efficiency, explain the efficiency to facility ownership, and then take the savings and further invest in programs that would make the FM function more valuable, and be more efficient.  The objective would be to make the FM into the most efficient manager of facility resources possible.  At any one time, the FM would be more efficient than any other FM alternative.  The success of the implementation will be measured by:
 
  1. The ability of the FM to identify successful concepts to become more efficient.
  2. The ability to implement the concepts and measure the savings.
  3. The ability of the FM to quantify the value of the implementation.
  4. Impact the FM function to continuously improve and to think outside the box.
  5. The acceptance of the identified value by the FM staff and the facility owner.
  6. The ability of the FM to convince the facility owner to continue to take the value added approach by taking another step toward efficiency.
 
 
Identifying the LEED Program as a Method of Increasing FM Efficiency
 
Leadership in Environmental and Energy Design for Existing Buildings (LEED-EB) is a building rating system, which allows an FM to identify their building, equipment and staff’s level of efficiency. The requirements are simple and concise. The LEED rating system allows an FM to identify benefits, value and most of all, an alternative to the standard approach of assessing facilities organization. The five categories include Sustainable Sites, Water Efficiency, Energy & Atmosphere, Materials & Resources and Indoor Environmental Quality.  LEED gives FMs the measurement framework to assess each category, identify cost savings, reduce their impact to the environment, demonstrate corporate responsibility and create value to the client.  Innovative credits in the program force creativity, exercising FM’s to research opportunities beyond those identified in the requirements.  There are four certification levels: Certified, Silver, Gold and Platinum.
 
The LEED program seems to fit the four major requirements of the information environment.  Environmental concerns have gained  interest with facility owners.  A survey of 1,000 CEO’s from 43 countries by PricewaterhouseCoopers indicated that 79 percent of these CEO’s believe that sustainability is vital to the profitability of any company.  Some facts that drew the FM’s interest in energy conservation included:
 
  1. Rise in water and sewer fees during the 1990’s.  Atlanta has seen a series of double-digit increases. In Washington, D.C., rates increased 42 percent in the late 90’s with the prospect of additional increases.  In New York City, rates increased 40 percent over the last four years. And in Boston, water sewer rates have jumped 400 percent because of infrastructure improvement projects.  Steel wire costs have increased nearly 28 percent, while most material costs have raised 4.2 percent overall.
  2. The cost of natural gas has increased 6% in the past three years (2001-2004). In the state of Iowa, natural gas prices are expected to rise 40 percent. For the past three years, facility executives using natural gas to heat buildings have become quite aware of its rising price. Wholesale gas prices have been hovering above $6 per million Btu, roughly double where they were a few years ago. Many economists see this trend continuing for years to come. The Federal Reserve Bank of Dallas recently projected that such high costs are likely to persist through 2010. Green buildings save an average of 30 percent reduction in energy costs. According to statistics from the U.S. Department of Energy’s Energy Information Administration (EIA), use of natural gas for electric power production has been rising at a rate of 7 to 8 percent per year since 2000.
  3. The Indoor Environmental Quality category in LEED identified opportunities to minimize VOC’s, improve ventilation and filtration systems to increase employee comfort and productivity. Jon Ryburg, president of the Facility Performance Group Inc, has tracked productivity traits of more than 50 companies for the past 20 years, isolating characteristics that can have the greatest potential to affect, usually negatively, productivity. On-going studies continue to identify linkages and data to substantiate the effects of poor indoor air quality.
  4. Preliminary productivity gains through the reduction of absenteeism are estimated to be 16 percent. Consider a facility with 3500 employees and a monthly payroll of $26 million. Just minimizing the absenteeism rate by 1% would yield a $3 million dollar benefit annually for only one site. Expanding this opportunity corporate wide (100,000 employees) could achieve savings of over $6 billion annually!  Every year, up to $150 billion is lost to businesses because of absenteeism, sub-par productivity and health insurance claims in the United States (Arny 2003). The U.S. Green Building Council identified that buildings in the United States use 6 billion pounds of cleaning materials (which can affect people’s health) each year.  Combine this with the fact that individuals spend nearly 90% of their time in buildings, you begin to see the correlation between minimizing certain chemicals and reducing absenteeism.
  5. Technology is progressing at tremendous speeds. The Audubon Center in Los Angeles California just became the first 5K sq. ft. facility with total solar power capacity. This building functions entirely off the LA power grid.
 
The General Dynamics FM approached the LEED-EB concept in incremental steps. First, a LEED category assessment meeting was scheduled. This provided the Facilities organization an opportunity to determine what data was available with minimal research. They discovered current processes, performance measurements and monitoring processes were identified in the LEED rating criteria. The LEED rating system identified the GD plant as having reduced equipment downtime by 99.2% and achieved a 100% improvement in their preventative maintenance program.  The program quickly identified the FM operations and maintenance department as having achieved maintenance excellence and value.  This was communicated to the facility owner.
 
Next, the GD FM determined which LEED program credits were achievable with minimal funding (efficiency is minimal investment, high payoff.)  Those credits and opportunities which were achievable, but required considerable documentation were placed in an “additional” data file.  The remaining credits which required considerable funding to accomplish were placed on a waiting list.  To minimize costs, each credit was assigned to the individual who possessed the core competencies the prerequisite or credit required.
 
Although this 1.5 million-sq. ft. facility has been implementing energy management and other resource conservation initiatives since 1996, they discovered many new opportunities, which were not easily recognized and would have gone unnoticed without the LEED program. One such example was the assessment requirement of CO2 levels in the building. Research discovered opportunities to modify outside air dampers to achieve maximum free cooling, yielding $241K in annual energy savings with initial cost less that $60K.  This was communicated to the facility ownership, justifying the strategic direction of the FM.
 
Figure 1 shows the water consumption before the LEED implementation.  Figure 2 shows the consumption after the LEED implementation (where H1701 and R6203 are central plant cooling towers).  Having saved $45K in potable water costs by altering irrigation  requirements and expanding water conservation efforts in 2004, GD expects to increase water cost savings in 2005 by expanding their cooling tower blow-down water reclamation system. Deciding not to plant winter rye grass saved over 12 million gallons of water and reduced landscape maintenance costs. LEED-EB provided them an incentive to try new ideas and concepts. In addition, they identified their site’s current water use was below the 1992 Energy Policy Act guidelines by 12%.  They also expect to reduce conveyance loads on the sewage infrastructure as well as receive a sewage fee credit on their monthly bill.  The entire facilities team was involved in the LEED certification process.  The energy and resource consumptions were measured and given to the FM workers. 
 
 
Figure 1: Water Consumption by Category Prior To LEED
 
Building retro-commissioning plans and practices were integrated into the organizations engineering design program.  The program goals were to ensure building systems and infrastructure performed at an efficient level while ensuring that designed systems did not impact equipment performance.  One example was the opportunity to allow the maintenance and operations organization to attend and participate in the retro-commissioning process. This process identified restroom fixtures which were not approved as low water saving, low flow units.  Anther example was the design of HVAC systems to insure their component selection and operation were aligned with the energy management systems capacity to monitor and control, maximizing equipment performance and energy savings.
 
Figure 2: Projected Water Cost Savings in 2006 ($72,366)
 
LEED concepts forced the GD FM workforce to look beyond the traditional savings, and into processes for additional savings. As an example, although GD installed a few waterless urinals in site restrooms, the potential exists to achieve an additional 7 million gallons of potable water savings annually ($21K) through further waterless urinal installation.  Further study identifies that the maintenance staff responds to 700 service calls and performs over 1400 plumbing related tasks annually.  Facilities Operations will accumulate 600 labor hours responding to service calls, completing repairs and performing preventative maintenance tasks on urinals in over a 12 months span.  By installing waterless urinals throughout the site GD will eliminate the root cause of these tasks (failed manual/electronic valves, gaskets, and wear and tear), saving over $27K annually.
 
The LEED attitude led to some unusual savings.  Operational personnel noticed a difference in how the custodial contractor cleaned, and the difference in their cleaning equipment. The IEQ category identifies preferred vacuums, which minimize generation of air born particles during the cleaning process, affecting employee comfort and productivity. “I’ve noticed they now use a blue vacuum cleaner instead of the red one. My sinuses aren’t irritated with the new vacuum,” was the comment of one employee. This resulted in the expansion of the custodial equipment maintenance program, including the replacement of certain janitorial cleaning equipment.  This example shows that an information worker is interested in adding to the productivity of the plant or facility.  Any item that minimizes lost productivity becomes a measurable value.  The information worker approach is to always measure and identify the value of a service.
 
Overall annual savings through the implementation of LEEDS led to an annual savings of approximately $322K.  Additional savings expected in 2005 are nearly $250K in HVAC system improvements (energy), $15K in peak energy demand reductions, and $21K in water savings. This does not include additional cost savings associated to retro-commissioning, reduced landscape irrigation, indoor environmental quality and recycling. See Figure 3.
 
Figure 3: Annual Savings of LEEDS
 
After documenting the savings, and acquiring LEED certification for the GD Scottsdale facility, the FM then looked to continue to implement other efforts to increase the efficiency of the GD Scottsdale site and other GD sites.  The FM proposed to the GD Scottsdale facility to do the following:
 
  1. Form a partnership with Arizona State University to create a Facility Management Research Institute (FMRI) on the Scottsdale site.
  2. Convince the GD owners to maintain the FMRI facilities ($45K/year for three years.)
  3. Put on a certification for GD personnel from sites around the country to learn the information worker approach to Facility Management.
  4. Convince ASU to implement an information worker FM masters concentration that will train more GD FMs.
  5. Volunteered to be one of the first FM participants in the new masters degree program.
  6. Integrate the best practices of the GD FM into the masters degree including the LEED practices.
 
Conclusion and Recommendation
 
The GD FM has transformed the FM function from a management based to a leadership based “information worker” FM.  Instead of trying to maintain the facility with a constantly diminishing budget by cutting costs, resources, indiscriminate outsourcing, and deferred maintenance, the FM has taken an “information worker” approach to become more efficient and to measure value of the FM function.  The FM achieved the six objectives listed below to:
 
  1. Acquire the ability of the FM to identify successful concepts to become more efficient.
  2. Acquire the ability to implement the concepts and measure the savings.
  3. Quantify the value of the implementation.
  4. Impact the FM function to continuously improve and to think outside the box.
  5. Gain the acceptance of the identified value by the FM staff and the facility owner.
  6. Convince the facility owner to continue to take the value added approach by taking another step toward efficiency.
 
The General Dynamics C4 Systems Facilities Operation’s department in Scottsdale Arizona has reduced their energy costs by 17% from their 1996 baseline, achieving $900K in energy savings. In 2004 the site will save $234K in total energy costs. Significant water savings were achieved, saving $45K in 2004. Researching other opportunities to reduce construction waste has lowered landfill charges.  Reducing construction waste allowed savings of over $15K in tipping fees annually.  Maximizing building designs to minimize construction waste yielded savings of $20K in materials. The General Dynamics facilities organization is committed to extend these savings into 2005, while continuing to measure other cost savings and efficiency improvements in the future.  Implementing LEED concepts supports the FM information worker of the future through analysis and the pursuit of non-traditional FM processes. Implementing LEED across the C4 Systems organization provides the opportunity to achieve over $1 million dollars in savings (see Figure 4).  Orchestrating a consolidated LEED program throughout the entire corporation, GD could achieve over $28 million dollars in cost savings, highlighting perpetual efficiency improvements and increase our exposure to our surrounding communities as a responsible corporate citizen.
 
Figure 4:  Annual General Dynamics C4 Systems Savings Opportunities $1,059,000
 
The next step to institutionalize the advancements of LEED is the development of the Facilities Management Research Institute. With its resources and access to additional technology, the process that was developed at General Dynamics in Scottsdale can be initiated corporate wide – consistently (See Figure 5). The General Dynamics team struggled to acknowledge the correct prerequisite and credit requirements, much left to interpretation, exhausting resources. Identifying documentation and information correctly the first time would streamline the process. This could be accomplished by interviewing the original LEED team and reviewing their documentation and processes, which were beneficial in achieving their site certification. Identifying LEED processes, which required minimal resources, thus achieving the greatest returns would be implemented first. The FMRI can also provide training courses to teach other Facility Managers on proven LEED concepts and successes which can be achieved in their own organizations.
 
 
Figure 5: Annual General Dynamics Corporate Savings Opportunities $28 Mil
 
  
References
 
Agron, Joe (2001) 7TH ANNUAL COLLEGE MAINTENANCE & OPERATIONS COST STUDY: Rising to the Challenge American School and University.
 
Agron, Joe (2003) American School and University 30TH ANNUAL SCHOOL MAINTENANCE &  OPERATIONS COST STUDY: Dwindling Support.
 
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California Energy Commission (2003) Comparative Cost of California Central Station Electricity Generation Technologies. Accessed on Jul 5,2004, at http://www.energy.ca.gov/reports/2003- 06—6 100-03-001F.PDF, esp., Appendix C.
 
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