Attachment 06 -- Real Property Inventory Requirements (RPIR) (January 2005).pdf

REAL PROPERTY INVENTORY

REQUIREMENTS

Installations & Environment Business Transformation Directorate

January 2005

THIS PAGE INTENTIONALLY LEFT BLANK

Real Property Inventory Requirements January 2005

Executive Summary

"The war on terrorism does not supplant the need to transform DoD; instead, we must accelerate our organizational, operational, business, and process reforms."

Donald Rumsfeld, Secretary of Defense

As one element of a larger Department-wide initiative to improve the integration of financial management and business operations, the Department of Defense is working to advance the reliability, accuracy, and timeliness of its real property information environment and inventory reporting systems. Through standardized data elements and processes, this initiative is expected to reduce redundancy and other inefficiencies, address material weaknesses, and enhance asset accountability.

The Department’s real property inventory systems today are much better than they were five years ago. However, a review of the current environment (Section 2) reveals that more can be done. The “As-Is” environment still includes some incompatible, inaccessible, inaccurate, and incomplete data, which can produce wasted resources, inconsistent analysis, and flawed decisions. In short, the existing environment does not meet the Department’s current and forecasted requirements.

To better define a “To-Be” information environment, the Department conducted a business process reengineering of the real property inventory process. This effort concentrated on the information needed to describe the physical, legal, and financial characteristics of property. It produced a common business process model for the real property inventory, standard data elements and data definitions, data business rules, and recommendations for policy changes.

Results are described in Section 3 of this report and detailed in Attachments A and B, with core data elements and their characteristics defined in Attachment D.

To guide the way forward, three strategic goals are identified:

• Improve awareness: Inform real property professionals of the importance of accurate inventories to support planning and programming for future requirements.

• Enhance access: Provide all potential Defense users real-time access to standardized real property information.

• Optimize resources: Ensure that resources currently used to transfer and transform data are enhanced or reduced and redirected to improve maintenance and accessibility of data.

Although estimates of cost, staffing, timing, or phasing are outside the scope of this report, specific follow-on, near term tasks are identified. The tasks involve new and updated directives, a cost analysis of alternatives, transition planning, and testing.

The initiative directly supports the President’s Management Agenda and the government-wide requirements currently emerging from the Federal Real Property Council. This initiative is also a key objective in the Defense Installations Strategic Plan, and supports several other objectives.

i ii

Table of Contents

Executive Summary......................................................................................................................................................................... i

1. Introduction

1.1. Purpose

1.2. Scope

1.3. Goals

2. The Current Environment

2.1. Regulatory Requirements

2.1.1 Real Property Accountability

2.1.2 Financial Reporting and Statement Requirements

2.2. Requirements Determination for Programming and Budgeting

2.2.1 Functional Requirements Using Real Property Inventory Data

3. Future Environment

3.1. Background

3.2. Proposed RPI Recommendations

3.3. Core Data Elements

3.4. New Concepts and Terms

3.4.1 Installation and Site

3.4.2 Parcel

3.4.3 Real Property Unique Identifier

3.4.4 Inventory of Non-Owned Assets

3.4.5 Linear Structure Concept

3.4.6 Accounting Issues

3.4.7 Federal Real Property Council

3.5. RPI Process

3.5.1 Create Initial Asset Record

3.5.2 Perform Real Property Purchase

3.5.3 Perform Construction/Restoration/Modernization (CRM)

3.5.4 Perform Real Property Lease/Ingrants (Operating)

3.5.5 Perform Real Property Lease/Ingrants (Capital)

3.5.6 Perform Real Property Outgrants

3.5.7 Conduct Real Property Physical Inventory

3.5.8 Update Asset Record (I&E)

3.5.9 Perform Real Property Disposal

3.5.10 Archive Asset Record (I&E)

3.5.11 Other Process I&E and Non I&E Definitions

3.6. Strategic Alignment with Mission and Goals

Attachment A. Real Property Legal and Physical Recommendations

A.1 Introduction A.2 Attributes of Land for Real Property Inventory

A.2.1 Background iii

A.2.2 Land Characteristics A.2.3 Policy Changes

A.3 Installation and Site Definitions A.3.1 Background A.3.2 Installation and Site Characteristics A.3.3 Policy Changes

A.4 Concept for Uniquely Identifying Real Property A.4.1 Background and Research Findings A.4.2 RPUID Business Characteristics A.4.3 Procedures for Assigning and Maintaining an RPUID A.4.4 RPUID Data Characteristics A.4.5 Application of the RPUID A.4.6 Proposed Policy Changes

A.5 Network Facilities A.5.1 Background A.5.2 Network Facilities Characteristics A.5.3 Segmentation A.5.4 Procedure Changes

A.6 Non-Owned Real Property A.6.1 Background A.6.2 Grant Data Characteristics for the RPI A.6.3 Granting DoD Assets A.6.4 Policy Changes

A.7 Real Property Inventory Attributes to Enable Space Management A.7.1 Background A.7.2 Data Characteristics for RPI Space Management A.7.3 Policy Changes

A.8 Conclusion Appendix A-1 Land Area Scenarios and Business Rules Defining Sites Attachment B. Real Property Financial Management Recommendations

B.1 Introduction B.1.1 Scope B.1.2 Assumptions

B.2 Key Concepts and Recommendations B.2.1 Alignment of Real Property Acquisition Dates B.2.2 Alignment of Real Property Disposal Dates B.2.3 Capital Improvements B.2.4 Capitalization Threshold B.2.5 Estimated Useful Life B.2.6 Construction-in-Progress (CIP) B.2.7 Preponderance of Use B.2.8 Government Owned Contractor Operated (GOCO) B.2.9 Audit Trail B.2.10 Leases and Other Non-Ownership Data Elements and Business characteristics

Appendix B-1 Capital Improvement Depreciation iv v

Appendix B-2 Real Property Estimated Useful Lives by FAC Code Appendix B-3 Preponderance of Use Policy Attachment C. Data Management

C.1 Background C.2 The Need for a Data Management Strategy C.3 Unique identifier C.4 Core Data Elements

C.4.1 RPI Common Data Model Structure Attachment D. Core Data Elements Attachment E. Logical Data Model Attachment F. Common Data Model Attachment G. Process Model Attachment H. References vi

1. Introduction

Donald Rumsfeld, Secretary of Defense

"The war on terrorism does not supplant the need to transform DoD; instead, we must accelerate our organizational, operational, business, and process reforms."

As an element of his plan to transform the Department of Defense and reform Defense business processes, the Secretary of Defense established the Business Management Modernization Program (BMMP). The BMMP provides policy direction and oversight for five business domains:

• Acquisition

• Financial Management

• Human Resource Management

• Installations and Environment

• Logistics

For the Installations and Environment Domain (I&E Domain), the Deputy Undersecretary of Defense (Installations and Environment) – DUSD(I&E) – is the domain owner, with responsibility for all business areas associated with the Defense Installations and Environment Community (I&E Community).

One such business area concerns real property assets. The Department holds legal interests in approximately 30 million acres of land and 600,000 facilities (buildings and structures) worldwide, the scope and variety of which are unmatched by any other government or private enterprise entity. The plant replacement value of this inventory is about $650 billion. The funds needed to operate, sustain, and recapitalize these assets exceed $25 billion each year.

Real property assets are essential to the preparation for and successful accomplishment of most Defense missions. Hence, accurate and timely real property asset data is fundamental to effective management of the assets, and ultimately to military success. Real property asset data links accountability, regulatory compliance, resource requirements, and decision support.

Access to the data is essential across the Defense enterprise, at all levels.

1.1. Purpose

The primary purpose of this report is to describe a real property inventory that will meet the Department’s future requirements. The real property accountability function for Defense should meet the following requirements:

• Achieve total asset accountability

• Provide useful data for local real property management

• Provide reliable and timely data and information to higher headquarters for reporting and decision making

• Ensure accessibility to current data to all relevant users

• Eliminate duplication

• Establish and enforce real property data standards department-wide to facilitate data integration and analyses

An earlier study, Assessment of DoD Real Property Information Systems1 summarized the current state of real property inventory information systems this way:

“DoD’s real property information systems, including planned improvements, do not meet DoD’s current and projected analytic and reporting requirements. Defense real property inventory data is:

• Incompatible across the Defense components

• Inaccessible to key users

• Inaccurate and incomplete, necessitating application of complex and inefficient business rules to use the data.

These shortcomings result in:

• Wasted money as analysts expend excessive resources to produce and obtain usable information

• Inconsistent analyses that undermine credibility inside and outside the Department

• Flawed decisions, based on poor information, producing unintended consequences.”

With a clearly articulated need to improve the Department’s real property inventory, the DUSD(I&E), in conjunction with the BMMP, initiated the Real Property Inventory (RPI) initiative. This initiative, which addresses the foundation for installations and environment business management activities and decision making, is aligned with and supports the Defense Installations Strategic Plan, the BMMP mission, emerging Federal Real Property Council requirements, and the President’s Management Agenda.

1.2. Scope

Because the focus is on real property asset accountability, this reengineering report concentrated on the information needed to describe the physical, legal, and financial characteristics of real property. Functional areas such as leasing, network facilities (e.g., utilities), and attributes needed to enable space management were also addressed to improve the overall real property accountability of the Department A robust analysis of financial management was conducted to address accountability and financial material weaknesses. This report also recommends several policy changes that will help enable realization of the “To-Be” environment.

This report does not include all the information needed for real property management (real property planning, space management, sustainment, etc.)–however, the recommendations

1Assessment of DoD Real Property Information Systems, Office of the Deputy Under Secretary of Defense for Installations and Environment, August 8, 2001, p. 3.

address inventory processes and data that can be directly tied to real property management systems. When operational, this information environment will help improve overall real property management.

This report does not describe cost, staffing, timing, or phasing for implementing the real property inventory requirements. The following steps must be taken to complete the functional analysis:

• Develop a new Draft DoD Instruction (DoDI) for RPI and forecasting,

• Revise the DoD Financial Management Regulation to include recommendations from the

Accounting Work Group,

• Conduct an Analysis of Alternatives to factor in existing capabilities and the cost of modifications,

• Develop a transition plan for real property inventorying across DoD, and

• Create a Real Property Site Unique Identifier registry to conduct a proof-of-concept.

The outcomes identified in this report may change as other I&E Domain competencies pass through the BPR process. Efforts at the enterprise level could also have an impact.

1.3. Goals

To guide the way forward, three strategic goals are identified:

• Improve awareness: Inform real property professionals of the importance of accurate inventories to support planning and programming for future requirements.

• Enhance access: Provide all potential Defense users real-time access to standardized real property information.

• Optimize resources: Ensure that resources currently used to transfer and transform data are enhanced or reduced and redirected to improve maintenance and accessibility of data.

This report stresses the use of business requirements instead of regulatory compliance to drive change and improve real property accountability.

2. The Current Environment

With each passing year, more functional communities and Defense Components find it necessary to access real property data. Until the 1980s, this data primarily supported the base engineering community–charged with property accountability and facilities maintenance–and major commands responsible for stationing units and organizations, and providing adequate facilities.

In the late 1980s, the need to use real property inventory data significantly increased with the emergence of new missions for environmental compliance, clean up, pollution prevention, and conservation and preservation, and with the initiation of a series of four rounds of Base Realignment and Closure (BRAC). The Chief Financial Officers Act of 1990 and the financial accounting requirements established for Defense revolving funds required DoD to formally capitalize and depreciate real property assets. Several years later, Defense leaders began demanding that budget requirements for facilities programs be developed based on a unit cost approach that uses actual inventory. This trend continues, with the current Defense-wide effort to document all training ranges and their uses with geo-spatial data. In addition, Congress has been requesting increasingly detailed information about Defense real property.

It is apparent that the demands placed on real property information will continue to expand.

Federal government and Defense audit activities have increased their scrutiny of real property records. Most audits and reviews find significant shortcomings with the information. The increased attention has coincided with a significant reduction in Defense resources and staffs, especially at the installation level. During the past decade of declining budgets, the Services’ priorities have centered on modernizing weapon systems, leaving real property programs relatively under funded across DoD. Consequently, at the local level, budget cuts have led to a significant reduction in real property management staff with some managers de-emphasizing the maintenance of accurate, up-to-date real property records.

Today, the RPI transactional data for the DoD resides in the inventory systems of the three Military Departments (Army, Navy, and Air Force) and Washington Headquarters Services (WHS). At the end of the fiscal year (September 30th), each Military Department provides a copy of its data to the Office of the Secretary of Defense (OSD) to update the Facilities Assessments Database (FAD). Because a lack of standardized data elements among the Services’ native databases still exists, business rules have been developed to normalize the data before inclusion in the FAD. The data is validated each year and anomalies are reported to the respective service for correction. Data from the FAD is used to populate a variety of real property resourcing predictive models and is used by OSD for real property analysis. The data resides on a server within OSD and is available to installations and facilities analysts through a graphic user interface.

The development process for the current FAD is an example of one of the barriers that must be overcome before data can be consolidated to a single data store. Standardized elements, definitions, business rules, and processes as recommended by this document are necessary. The data emanating from the services and agencies of the DoD must be collected at a consistent point in the business process, mean the same thing to all parties, and be of value to all levels of the organization. Such consistency would make data stores or warehouses such as the FAD more useful.

2.1. Regulatory Requirements

U.S. law and DoD regulations and instructions establish real property accountability and financial reporting requirements.

2.1.1 Real Property Accountability

10 United States Code (USC) 2721 directs OSD to maintain records of fixed property and installations on both a quantitative and a monetary basis. 10 USC 2682 places all real property facilities under the jurisdiction of DoD and used by a DoD activity or agency (other than the Military Departments) under the authority of one of the Military Departments. 10 USC 2674 places the Pentagon Reservation under the control of OSD. WHS operates the Pentagon Reservation and maintains leases in the National Capital Region. Hence, all Defense real property accountability records (excluding civil works) are maintained by the three Military Departments and by WHS.

DoD has implemented the regulatory inventory requirements via Department of Defense Instruction (DoDI) 4165.14, Inventory of Military Real Property. This instruction does not contain policy and procedures for real property accountability and for meeting DoD’s immediate financial, programming, and budgeting requirements. A new DoDI that establishes revised policy will be developed, with procedures based on the real property business re-engineering documented in this report.

Volume 4, Chapter 6, DoD 7000.14-R, Financial Management Regulation (FMR), establishes requirements for physical inventories for Property, Plant, and Equipment (PP&E) and requires DoD Components to inventory general real property at least every 5 years. Real property Heritage Assets must be inventoried at least every 3 years. Physical inventories should ensure that real property is:

• At the location identified in the property accountability records or system,

• As described in the property records, and

• In the condition described in the property records.

2.1.2 Financial Reporting and Statement Requirements

In addition to real property accountability, DoD is also required to capitalize and depreciate its real property holdings. 31 USC 3515 requires each executive agency designated by the President to prepare and submit financial statements to the Director of the Office of Management and Budget by 31 March following each fiscal year. 31 USC 3521 further requires the DoD Inspector General to perform an audit of DoD’s financial statement prior to submission to the Comptroller General.

Volume 4, Chapter 6, DoD FMR details DoD accounting standards and policies to meet its financial statement reporting requirements for PP&E. General PP&E consists of tangible assets that have an estimated useful life of 2 years or more; are not intended for sale in the ordinary course of operations; are acquired or constructed with the intention of being used or made available for use by an entity; and have an initial acquisition cost, book value or, when applicable, an estimated fair market value that equals or exceeds the current DoD capitalization threshold of $100,000. General PP&E also includes:

• Assets acquired through capital leases, including leasehold improvements;

• Property owned by the reporting entity even though it may be in the possession of others

(e.g., state and local governments, colleges and universities, or contractors);

• Land, other than Stewardship Land2, with an identifiable cost that was specifically acquired for, or connected with, the construction of General PP&E; and

• Land rights (interests and privileges held by an entity on land owned by others) such as leaseholds, easements, water and power rights, diversion rights, submersion rights, rights-of-way, and similar land interests.

Land rights are designated as financially accountable real property. Current real property databases include, on a consistent basis, only owned real property. Some leased real property is included, but not consistently. The new DoDI will direct the inclusion of all land rights.

Volume 4, Chapter 6, DoD FMR also provides rules for financial accounting responsibility for real property. As noted above, Defense real properties owned by DoD are accounted for by the three Military Departments and WHS; however, ownership alone does not determine financial accountability. For example, the FMR states, “DoD Components shall only report predominately used General PP&E assets owned by other DoD Components when the cost of those assets, taken as a whole, are material to the predominant user Component’s financial statements.” Office of the Undersecretary of Defense, Comptroller plans to rescind the “preponderant use” policy in the next version of the FMR. The following examples illustrate how the current policy is implemented.

• Military Departments – General Fund. If the Air Force is a tenant on an Army installation and the Air Force is the preponderant user of a building on that installation, the Army should report the building on its financial statements–not the Air Force. This policy recognizes that the Military Departments routinely use each other’s facilities in the normal course of their missions and that the net effect of this “cross use” is not material to their financial statements.

• Defense Agencies – General Fund. Defense Agencies that produce financial statements and/or are included in DoD Consolidated Financial Statements generally must recognize and report the facilities used in their operations. Most facilities used by the Defense Agencies are owned by, or titled to, the Military Departments; however, these facilities are material to the performance of the Defense Agencies’ missions. As such, these facilities are also material to the Defense Agencies’ financial statements, shall be reported on these statements, and excluded from the financial statements of the Military Departments.

• Working Capital Funds (WCF). When a WCF activity is the preponderant user of a facility, that activity shall report and depreciate the facility on its annual financial statements. This requirement exists without regard to whether the activity belongs to a

2 Stewardship Land is land and land rights owned by the Federal Government but not acquired for or in connection with items of general PP&E.

Component. When a WCF activity is not the preponderant user but funds capital improvements, the WCF activity shall report and depreciate such improvements on their annual financial statements.

• Medical Facilities and Equipment. The preponderant use policy outlined above does not apply to medical facilities and equipment. These facilities serve the personnel and families working at, or living near, military installations. Therefore, the military installation is the preponderant user of the medical facility. All medical General PP&E equipment and facilities shall be reported on the annual general fund financial statements of the Military Department that owns the nearby installation.

Defense Agencies have always needed to track and account for the facilities they use to monitor their Interservice Support Agreements (ISSAs), manage their space, and track the real property projects they fund. DoD’s financial accounting responsibilities have intensified the need for all Defense Agencies to track and account for their use of facilities to prepare their financial statements. In effect, each Defense Agency now has a vested interest in the accuracy of the Military Department’s real property records and has become a “customer” for real property information. Unfortunately, Defense Agencies do not have direct access to the Military Departments’ real property inventory databases, nor is there a formal reconciliation process that allows a Defense Agency to resolve a discrepancy between the Military Department’s real property inventory data and the Defense Agency’s internal records.

The DoD FMR specifies that depreciation expenses shall be calculated and accumulated using the straight-line method based on the recorded cost less the salvage value, and divided equally among accounting periods during the asset’s useful life.

Finally, DoD FMR also requires that deferred maintenance amounts be reported on annual financial statements for General PP&E real property that have a cost that equals or exceeds the DoD $100,000 capitalization threshold. To calculate deferred maintenance, federal-wide accounting standards permit the use of Cost Assessment Surveys or Life Cycle Cost Forecasts.

2.2. Requirements Determination for Programming and Budgeting

Up to this point, the focus has been primarily on legally driven regulatory requirements:

accountability and financial reporting. The emphasis now shifts to uses for real property data that is driven by DoD operational needs. It is evident that analysts across DoD need to be able to turn data into information that provides for informed decision-making. Examples of questions include:

• What facilities are in my congressional district/state and what is their value?

• What is the projected (value of) facility inventory through the Program Objective

Memorandum (POM) years?

• Where are there excess facilities?

• How old is the physical plant (by category, by organization)?

• In what condition is the physical plant (by category, by organization)?

• Who are the owners or users and for what purpose is the plant used?

• What is the percentage of leased properties to the total inventory?

• What is the average age of the current set of facilities?

• How long can the current facilities last?

• Is the remaining useful life of the inventory increasing or decreasing?

• What investment is required to “hold the line” on aging or lower it by a specified percentage?

• What is the age profile of a selected facility type or investment category?

One of the primary functions of the Service headquarters and OSD is to develop and justify Defense programs and budgets to obtain the resources required to equip and sustain the military forces. Adequate facilities are absolutely essential to Defense; however, facility restoration, modernization, and sustainment are often relatively low program and budget priorities compared with modernizing and sustaining weapon systems and training and deploying military forces.

Because of this relatively low priority, real property program and budget analysts must be able to clearly and convincingly convey the impact of policies and resource decisions on the capability of Defense facilities to adequately support Defense requirements. Decision makers should have the information and tools available to make their resource allocation decisions with a firm understanding of both the short and long-term impacts on the whole Defense “system.”

During the first Quadrennial Defense Review (QDR) in 1997, analysts from the Military Services, Agencies, and OSD, created a consolidated real property database to assess the force structure’s relationship to the real property infrastructure and the related costs for future programming and budgeting. This effort highlighted the inadequacy of current information and methodologies to meet DoD’s analytic requirements. Subsequently, OSD has worked with the Service and Defense agency staffs to create a more robust analytic capability. This report is a part of that effort.

Although OSD has not yet established and enforced effective data standards, the Office of the Deputy Under Secretary of Defense (Installations & Environment) (ODUSD(I&E)) has engaged in preliminary work to prepare for data standardization. During the QDR, ODUSD(I&E) noted that the unique facility classification systems used by the services could not support accurate analyses at OSD. In 1998, ODUSD(I&E) worked with the services to create a new classification scheme called Facility Analysis Categories (FACs). The service-unique category codes have been mapped to the FACs. The FACs standardized facility types allowing analysts to:

• Answer questions on how many of a particular facility type exists in DoD;

• Share information and compare;

• Develop and evaluate stationing, sustainment, capacity, and recapitalization requirements; and

• Develop relationship to readiness for each category.

ODUSD(I&E) then published a DoD Facilities Cost Factors Handbook (now the DoD Facilities Pricing Guide). Two cost factors per FAC were identified: one for sustainment and one for construction. Over 90 percent of the cost factors are based on commercial benchmarks with the sources for each identified in the Handbook. The cost factors are intended for use at the programmatic level by any DoD organization.

These two initiatives, standardized facility types and commercially benchmarked cost factors, led to the creation of the DoD Facility Sustainment Model (FSM). FSM projects the costs to sustain all DoD facilities over the Future Years Defense Program. Before the FAD is used as the feeder system for FSM, its data must be normalized using 80 some business rules and additional data obtained from the Services, Defense Logistics Agency, Tricare Management Activity, and the Department of Defense Education Activity.

The Military Services and Defense Agencies prepare POM exhibits every two years. These exhibits help DoD during its annual review (called the Program Review) of DoD spending plans.

DoD is attempting to streamline reporting for the Program Review and would like to reduce the burden it places on the Services/Agencies to prepare the POM exhibits; however, not all real property inventory data required to populate the exhibits are reported in DoD inventory systems.

Examples include lease inventory, barracks space and family housing units, fire and emergency service inventory attributes, and utilities information. Many of these areas require data calls to populate the POM exhibits. The data elements maintained in the Services’ inventory systems and the proposed DoD consolidated inventory must expand for OSD to produce complete exhibits, conduct comprehensive analysis, and make meaningful decisions from inventory data.

2.2.1 Functional Requirements Using Real Property Inventory Data

Numerous functional areas and organizations within DoD require real property inventory information from all three Military Departments. In addition to the requirements already described, real property inventory data is required to:

• Facilitate the use, management, and maintenance of real property;

• Enable evaluation of real property assets for planning;

• Identify and justify requirements;

• Develop reimbursement rates and support ISSAs;

• Monitor compliance with laws, rules, and regulations;

• Support information requirements of installation tenants;

• Support capacity analyses;

• Support space management and stationing;

• Conduct “what if” assessments at HQ levels; and

• Support reporting requirements.

Each functional area and organization has a unique set of business requirements for which they develop and use information systems. Real property data is required, for example, to support environmental, medical, educational, military operational, BRAC, and family housing programs.

No single system related to real property currently serves such a diverse set of requirements.

The accuracy problems documented in the audits and the non-standardization of data among the Military Services create a significant challenge to the Warfighter, Defense Agencies, and functional communities when obtaining and using real property data.

Managing DoD Real Property is a significant undertaking with significant impacts. Reliable and on-point information is critical to enable informed decision making by DoD leadership and analysts. Across DoD, dozens of independent real property inventory systems exist. These systems are not structured to readily communicate with each other, resulting in inefficiencies in facility management. Successful real property management depends upon integration at the DoD level and increased collaboration among the various organizations. Accountability at this level starts with a clearly articulated vision, guiding principles, common practices and processes, and ultimately integrated systems.

Future requirements should be developed using a documented vision to identify appropriate actions to achieve the real property accountability mission. Based on the proposed recommendations in this report the following describe the “To-Be” conditions needed to advance the real property accountability environment:

• Data is entered once at the authoritative source; no data calls or data movement is required;

• Data records are complete and current with management controls to periodically monitor completeness and accuracy;

• Analysts have real-time DoD-wide access to required data and definitions;

• Analysts at all levels use data from the same data sources;

• Analysts spend less time searching for data and more time performing analyses;

• Real property accountable officers spend less time responding to data requests and more time tending to data quality;

• Real property accountable officers are motivated to maintain complete and accurate records;

• Adaptable information architecture readily supports expansion to accommodate new requirements such as linking to geo-spatial data; and

• Resources across DoD needed to obtain and maintain real property information are significantly reduced.

The current real property inventory environment requires change. The OSD and Service headquarters analysts and functional users’ communities require access to accurate, up-to-date, standardized real property inventory data as documented in this report.

3. Future Environment

3.1. Background

The Installations & Environment (I&E) Domain partnered with the Military Services, Defense Agencies, and other Business Management Modernization Program (BMMP) Business Domains to transform or reengineer business processes for the inventory of real property. The goal is the availability of reliable, timely, and useful core real property asset information to support functional analysis and decision-making as well as financial reporting.

The intent of this initiative is to yield core standard data elements, standard definitions, and business rules that focus on the physical, legal, and financial characteristics of all real property under the custody and control of DoD, worldwide.

In FY 2003, the DoD began the reengineering of the real property inventory (RPI) business processes. Participants representing the Military Services, Defense Agencies, and other Domains identified many core data elements. Inter-Agency and Cross-Service workgroups were established to continue the analysis and resolution of issues.

In FY 2004, the I&E Domain, working jointly, enhanced this foundation by establishing additional work groups to discuss and resolve issues raised by the Military Services and Defense Agencies. Specialty focus groups were engaged to address the inventory needs of communities of interest. Other groups were formed to address a unique identifier for real property, installation versus site definition, attributes of land for RPI, utilities measurement and tracking, accounting issues, leasing, and facility attributes required to enable space management. Specialty focus groups also identified inventory requirements associated with housing, fire and emergency services, and law enforcement and force protection. The issues and resolutions from all the work groups are included as attachments to this report. Output from these groups was used to develop the Business Process Reference Models and a Logical Data Model at Attachments G and E respectively.

3.2. Proposed RPI Recommendations

The recommendations of this report are designed to refocus and leverage the resources currently expended on real property inventories to create significantly more value for a wider DoD audience. The long-term recommendations cannot be achieved, however, without the cooperation of the Military Services, Defense Agencies, and OSD. The proposed DoD-wide changes to RPI processes and data does not relieve the Military Services and Washington Headquarters Services of their fundamental responsibility to maintain real property inventory records.

3.3. Core Data Elements

A current problem with the systems used by the Military Services and Defense Agencies for the reporting of their respective real property assets is the lack of standardization with respect to the definitions, attributes, business rules, and validation criteria used for real property data.

Therefore, this document recommends the core data elements that are needed in all DoD real property inventory systems (see Attachment D for the complete listing of core data elements), and establishes common definitions for each.

3.4. New Concepts and Terms

3.4.1 Installation and Site

The questions “What is an Installation?” and “What is a Site?” were asked at the I&E Workshop Kick-off Meeting held on 12 October 2003. A standard taxonomy is needed to provide support to federal government (including internal DoD) data requests and Congressional inquiries, as well as to ad hoc efforts such as Base Realignment and Closure. Currently, the responses provided to different information requests (e.g., number of installations, number of sites, whether an installation can support a certain requirement, etc.) is not always consistent.

The starting point for resolution of the Installation and Site questions was deliberation of the basic concept and broad definitions of parcel, site, and installation. The group then worked to standardize these definitions specifically for DoD RPI. The establishment of unique installation, site, and parcel identifiers as well as standard definitions will support the distinct difference between the terms “installation” and “site.” Today, these two terms have differing meanings based on the discussion at hand. United States Code Title 10 is a good example of this.

Definitions of installation and site vary from section to section, with each definition tailored to satisfy the subject addressed in that section.

Standard definitions will allow users DoD-wide to understand installation, site, and parcel when used to identify different elements of the RPI. This will allow guidance, policy, instructions, and regulations to be written without having to list, define, or provide examples of the terms.

To fully develop the concepts, data elements, definitions, business rules, and scenarios involving the relationships among land, facilities, sites, and installations were constructed depicting alternative physical conditions. Business rules and the required data elements (see Attachment D) were defined for each scenario to establish standardized reporting procedures for parcels, facilities, sites, and installations. These scenarios and additional information on installations and sites are presented in Attachment A.

3.4.2 Parcel

Land is a major asset category for the DoD and a basic building block for all DoD sites and installations. The DoD owns or controls nearly 30 million acres of land that must be effectively accounted for and efficiently managed. The types of land assets in the RPI range from unimproved wilderness areas to central urban developments. Likewise, the land portfolio reflects a myriad of land uses representing the different missions and requirements of the DoD, Military Services, and Defense Agencies. As part of the overall Business Transformation effort, specific attention is targeted to identify and define the essential data elements associated with land for inclusion in the RPI. A goal of this effort is to standardize the definitions, business rules, and reporting of land throughout the DoD and to provide requisite data for land management functions.

Two intermediate goals were to eliminate data duplication and to simplify the RPI processes.

Certain issues and corresponding data needs were believed to be asset management related and not within the scope of the core land RPI data attributes.

Parcels are the unit of land in the RPI. Parcels are, therefore, the building blocks of land for a site. The boundaries of the parcels (the metes and bounds or other survey method) will delineate the perimeter of the site. A stand-alone parcel can be a site; however, if a parcel is not a stand-alone site, it must be assigned to a site.

Two policy changes are required to effectively implement the land provisions of this report.

• Because land parcels form the building blocks of sites, either as a single parcel or a contiguous group of parcels, they must be completely identified. Land is often inventoried at the aggregate level for each installation rather than at the parcel level. In the “To-Be” environment, Military Services and Defense Agencies will record land assets by parcel in the inventory.

• Currently the DoD categorizes land through the Facility Analysis Categories (FAC) code and equivalent Service Category Codes (CATCODE). In the “As-Is” environment, land category codes identify the acquisition method of the land. Since the core data includes a data element to track acquisition type, the current category codes represent a redundant capability. The approach for the “To-Be” environment is to align the category codes to document the use of the land. This will create an additional information track not currently available. Data could be used to validate land use studies and master planning documents. To implement this recommendation and adjust the policy, a cross-Service working group should be convened under the auspices of ODUSD (I&E) Installations Requirements and Management Directorate. The outcome of the working group should be the revised scheme for land FACs and the appropriate mapping to the revised Service CATCODEs.

DoD categorizes facilities as a building, structure, or linear structure under the custody or control of a Service or the Washington Headquarters Services. Facilities are not assigned to parcels, but are assigned to sites.

Each parcel of land (the building blocks of land) and each facility (building, structure, and linear structure) will be assigned to a site. One or more parcels or facilities can be assigned to a site;

however, each parcel or facility can only be assigned to a single site. Contiguous parcels must be assigned to a site. One or more sites may be assigned to any one installation but each can only be assigned to a single installation. Figure 1 graphically presents the relationship among installations, sites, parcels, and facilities. For more details on land attributes see Attachment A.

Installation Installations are composed of one or more sites

A Facility or Facilities

Land Parcel(s)

An individual facility or parcel could also be a site; parcels and facilities are the building blocks of sites and installations.

Site A Sites are composed of one or more parcels and/or facilities

Site B Site …

A

Facility or

Facilities

Land Parcel(s)

Figure 1: The Relationships Among Installations, Sites, Parcels, and Facilities

3.4.3 Real Property Unique Identifier

For the I&E Community, enterprise-wide, readily accessible real property information that is accurate and timely will form the nucleus for functions such as property asset accountability, regulatory compliance, resource requirements for infrastructure, and decision support. In the future or “To Be” environment, DoD real property asset information can no longer be managed as a local, functional, component, or Service “stovepipe” resource. Tying today’s disparate real property systems and DoD information needs into an enterprise requires a strong linking mechanism. A unique identifier (UID) readily serves this purpose. In this case, the Real Property Unique Identifier (RPUID) becomes the key element in the RPI that distinctively and uniquely identifies a parcel of land, a building, structure, linear structure, or other real property improvements in which DoD has a legal interest. The RPUID will allow related data from across the spectrum of DoD business areas to be linked to specific real property asset records. The RPUID functions for real property similar to the way in which a social security number functions for an individual. It remains with the asset from its acquisition, will never be reused, and will be archived to history only when DoD has relinquished its interest in the asset.

A UID by definition must be “unique.” This is the one and only rule that must be inviolate.

There is no requirement for the UID to be either alphabetic or numeric; it can just as easily be alphanumeric. Similarly, a UID can be derived from existing data, parts of existing data combined with a sequencing scheme, or constructed of new, non-derived sequencing data.

Terminology-wise, an identifier constructed with any existing data in its structure is called an intelligent identifier. This means that the identifier, or some part of it, has meaning outside the context of its unique identification role. While there is nothing wrong with using an identifier constructed in this way, it is unsuitable as a “permanent” UID if the existing data used within the

UID structure can ever change. A non-intelligent identifier is similarly defined as an identifier that has no specific meaning, in total or in part, outside its unique identifier role.

The RPUID Work Team considered the advantages and disadvantages of both the intelligent and non-intelligent identification schemes and concluded that the non-intelligent identification scheme would prove most advantageous. For more details on this discussion see Attachment A.

All real property, both the assets and the sites to which they are linked, will be uniquely identified. For more details on the RPUID see Attachment A.

3.4.4 Inventory of Non-Owned Assets

Acquiring rights to real property not owned by DoD is a standard practice. The principal rights acquired are the occupancy and use of land or a facility. Rights to real property not owned by DoD are acquired through one of a number of conveyance types evidenced by a written legal agreement. A budgetary saving measure within DoD is for each Military Service to reduce excess, non-useable space and to limit the use of leased space. This is difficult to quantify as not all space used is recorded in the current inventory. Space occupied by a DoD organization but under the control of another federal department or leased by the General Services Administration (GSA) is not reported in the inventory. While this is understandable for reporting purposes outside DoD, it hides a percentage of space requirements within DoD. The lack of visibility impedes proper planning and programming of funds and sub-optimizes the facilities analysis at the installation or even regional level.

The DoD requires much of the same initial data to account for and manage non-owned real property as it does for owned property. The RPI will be augmented to include additional data elements that reflect the nature of the non-ownership acquisition plus the associated terms and conditions of the DoD’s interest in the property. The RPI will include the requisite data for managing and administering all non-owned property in which the DoD has an interest as well as performing all accounting functions.

DoDI 4165.14 will be adjusted to include non-owned assets. A policy should be instituted that states that every item of real property acquired by Military Services, Defense Agencies, or WHS must have a written legal instrument to support its acquisition/use. For more details on inventory of non-owned assets see Attachment A.

3.4.5 Linear Structure Concept

Also to be addressed is the definition of utility systems, pavement systems, railroads, fences, etc.

as linear structures (or linear assets) and the segmentation of the linear portion (roads, trackage, and distribution lines [pipe and other] of these linear structures into modules.

In the “As-Is” environment, the Military Services track most utilities distribution systems as a single inventory record for each installation. This meets the requirement at the OSD and Military Service headquarters level; however, organizations below that level require further decomposition to effectively manage the real property asset.

There exists the additional complication of identifying the facility assets associated with the complete system. For example, FAC codes 8111 (Electrical Power Source), 8112 (Stand- By/Emergency Power), 8121 (Electrical Power Distribution Line), and 8131 (Electrical Power Substations and Switching) record the electric utility lines as well as the structures and electrical equipment required to generate, transmit, and distribute electricity. However, FAC code 8910 (Utility Building) should include all the buildings that contain utility equipment and functions.

A heavy user of RPI information may understand how to generate a complete set of building, structure, and utility data, but an intermittent user may find the process complicated.

A Utilities Work Team was formed and assigned the following primary objectives:

• Define unique utility real property assets;

• Standardize measurement and segmentation of utility assets to ensure consistency in the RPI; and

• Determine the specific asset data elements for inclusion in the RPI.

As the Utilities Work Team deliberated, the issues expanded to include other linear structures (roads, railroads, etc.). The linear assets at each installation are tracked to the same level and share many of the same issues and shortfalls. Both utilities and linear assets are covered under the 8XXX series of FAC codes.