A Facility Condition Index (FCI) is a numerical value assigned to reflect the overall condition of a building. The FCI is typically based on data gathered during a Facility Condition Assessment. It is used to provide a standard benchmark to compare the conditions of similar facilities and as a quick indicator of a facility’s overall condition.
History of the FCI
Facility Condition Assessments (FCA)
An FCI cannot be calculated without a Facility Condition Assessment (FCA), which is a data-driven evaluation of a facility or asset’s physical condition. An FCA helps investigate and determine what preventive maintenance, repairs, and upgrades are needed to bring the facility or asset up to optimal condition, as well as the cost of performing them.
By estimating the cost of the PMs, repairs, and upgrades required to get the facility in its best condition and comparing that to the replacement asset of the asset, you can find your Facility Condition Index. FCAs can help organizations:
- Prepare to sell property
- Prioritize maintenance work orders and repairs
- Minimize repair and maintenance costs
- Ensure safety and compliance
FCAs are either performed internally by the facility manager or outsourced to an independent assessor for an objective evaluation. If you are doing your own FCA, it is helpful to establish a facility condition assessment checklist ahead of time to ensure they are conducted consistently every time.
Why calculate an FCI?
While it may seem like a big task, a facility condition assessment and facility condition index are useful snapshots of your facility condition, and they are also useful measurements to track over time. Monitoring the condition of your assets in terms of their repair versus replacement value helps organizations and their facility managers make informed decisions regarding maintenance, capital planning, and upgrades.
Trends in your FCI score may also indicate other outcomes on the horizon. For instance, as an asset or facility’s FCI increases, the organization may experience:
- Increased risk of asset failure
- Increased facility maintenance and operating costs
- More negative impacts on staff and occupants
- Greater safety risks
An FCI can also be particularly helpful for organizations that may have experienced backlogs in upkeep. An FCI helps quantify the value of a facility or asset while taking into consideration any deferred maintenance that may still be waiting to be addressed.
Finally, FCIs are relatively simple to calculate and offer an objective, industry-standard rating of current conditions that can be applied across various facilities.
How to calculate an FCI
An FCI is calculated by comparing the estimated cost of outstanding repairs and maintenance to the estimated replacement value of the facility. In the end, you will have a percentage that indicates the value of continuing to repair and maintain your facility.
The data needed to calculate an FCI
In order to determine an FCI, some key data points related to maintenance and repair needs, as well as a replacement value, must be collected. A detailed Facility Condition Assessment should be conducted to get a true picture of the facility’s condition. An FCA will get at this information through many sources, including:
- Maintenance team or occupant interviews
- Review of past reports and maintenance logs
- Asset audits
- Review of building building plans
- Review of past expenditures and upgrades
- Analysis of maintenance data
- Permitting/zoning information
These are all useful sources of important maintenance information. However, the key pieces needed for the calculation of an FCI must be summarized into the following two data points:
- Total estimated cost of outstanding repairs, maintenance, and upgrades (renewal cost)
- Total estimated replacement value, not including land value (replacement cost)
The math needed to calculate an FCI
Believe it or not, this is the easy part. Once you have quantified the cost of needed maintenance as well as the estimated value, FCI becomes a simple division problem.
Dividing the renewal cost by the replacement cost (and multiplying by 100) provides the score:
FCI = ( Renewal Cost / Replacement Cost ) x 100
For instance, if we have a facility valued at $2,000,000, but it currently needs approximately $150,000 worth of maintenance and repairs, it has an FCI of 8%.
How to interpret and use an FCI
Once an FCI has been calculated, interpretation is the next step in using it to your advantage. Of course, the lower the facility condition index, the better. A low facility condition index means that the facility or asset is in good working order and any repairs or upkeep needed are far from reaching the point where a cost/benefit of replacement decision is part of the discussion.
But how low of an FCI score is considered “low?” And what do you do if your FCI score is too high?
Understanding and interpreting the FCI
Generally, any FCI lower than 10% is considered either good or fair. In this range, there may be some visible signs of wear and deterioration beginning to appear, but systems and facilities remain functional, and your maintenance team is primarily focused on scheduled routine maintenance.
When building condition reaches an FCI of 25% or more, components break down more regularly, wear becomes visible, and maintenance staff are more frequently shifting to reactive maintenance mode. By 60%, facility conditions are critical, and safety risks are becoming a significant concern.
Turning the FCI into action
Using your FCI to guide your facility operations and maintenance practices is a great way to drive improvements. In addition, because it is a widely recognized and professional method of measurement, using it as a key metric to inform facility management strategies helps minimize risk.
If you are calculating your FCI for the first time, this will become your baseline. Then, continue updating and recalculating your FCI at regular intervals over time, as your resources allow. Eventually, multiple scores can begin to reveal trends that decision-makers in your organization can use to identify solutions, initiate repairs and renovations, and invest in other initiatives if an FCI is too low.
Improve your FCI with the right tools
Businesses across a variety of industries have adopted the facility condition index as a useful tool. Estimating the true condition of the facilities and assets within your organization can be a powerful step toward making more informed and sustainable facility management decisions.
