Chapter 3. Real Property Planning - Owned

Topics on this page: 3.1 Master Planning | 3.2 Real Property Capital Planning | 3.3 Funding Sources | 3.4 Daily Decision Making

Table of Contents

The purpose of this chapter is to provide policy for the Department of Health and Human Services (HHS) owned property master planning, real property capital planning, using funds appropriately for owned facilities projects, preparing facility project budgets for inclusion in annual budget preparations, and daily decision making.

This policy applies to all Departmental facilities activities for owned facilities only. These policies apply unless inconsistent with a Division's appropriations act or other applicable law. SRPO clarification may be sought where required.

For policy applicable to direct leased real property or property occupied under Occupancy Agreement with GSA see 4 Leasing – Direct Leases.

3.1 Master Planning

3.1.1 Policy

HHS and its Divisions use long-range strategic master planning to support optimal development and use of HHS real property assets. Master planning helps HHS define the buildings, facilities, and other resources needed to maintain or advance Divisions' missions, to support execution of the HHS Strategic Plan.

Master planning assists Divisions in identifying and coordinating site development and improvements to achieve a functional, attractive, and comprehensive design for HHS sites and facilities. Master planning aids Divisions in making strategic and often day-to-day facility decisions, and in accommodating new or emerging requirements.

Master plans are generally long-range plans (i.e., effective for twenty (20) plus (+) years) and per HHS policy each master plan must be updated or amended when programmatic changes increase or decrease the need for real property assets previously identified by a Division's approved or current master plan.

Master plans are required for sites, installations and/or campuses owned and occupied by HHS employees that contain multiple buildings, functions, or activities.

In cases where a Division is the primary or a major customer of a GSA campus, the Division should provide input to GSA and fully participate in their master planning process, to ensure it aligns with the Division's mission and the future needs.

In the case of IHS where Regional Area Plans are developed, qualifying sites within these Regional Areas must be identified and Master Plans developed accordingly.

3.1.2 Administrative Requirements

Divisions are responsible for developing master plans. Master plans must provide comprehensive, well-coordinated site development and utilization strategies to support meeting HHS and Division strategic plans and mandates issued by the Executive Branch or Congress.

The key elements of the Division's master plans include but are not limited to; use of HHS and Division strategic plans to guide development and verification of mission and history of the site; programmatic premises; environmental reviews; existing conditions; opportunities and constraints; energy conservation; and specific local or regional constraints unique to HHS sites.

If there are additional questions and guidance assistance needed on Facility Master Planning, Divisions should reach out to the PSC mailbox.

3.1.3 Guidance and Information

Laws and Regulations

Some of the laws and regulations applicable to the master planning process as it applies to the HHS Facilities Program are listed below. Note: The Clean Air Act and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), commonly known as Superfund, impose additional facilities-specific requirements.
1. National Environmental Policy Act of 1969 (42 USC 4321 et seq) - This law prescribes the consideration OPDIVs must give to the impact of the Master Plan on the human environment.
  1. Council on Environmental Quality Regulations for Implementing the Procedural Provisions of the National Environmental Policy Act (40 CFR parts 1500-1508) - The CEQ regulations outline certain practices and procedures Federal agencies must follow when implementing NEPA during master planning processes.
2. National Historic Preservation Act (NHPA) of 1966 (16 USC 470 et. seq.) and Implementation Procedures Contained in Federal Register Vo. 35, No. 23, February 3, 1970, Department of the Interior, National Park Service "National Register of Historic Places" - This document requires evaluation of the effect the Master Plan may have on historic properties listed or eligible for listing in the National Register of Historic Places, and requires that the Advisory Council on Historic Preservation be notified and given reasonable opportunity to comment with regard to the undertaking.
3. Executive Order 12372, "Intergovernmental Review of Federal Programs," Amended April 8, 1983 - This Executive Order requires Federal agencies to undertake coordinated planning on an intergovernmental basis with local, regional, and State agencies for Federal actions involving construction and acquisition use and disposal of Federal real property.
4. Uniform Relocation Assistance and Land Acquisition Policies Act of 1970 (42 USC 4601 et seq.)- This law sets forth the policy for fair and equitable treatment of persons displaced because of Federal and Federally assisted programs.
5. National Capital Planning Commission (NCPC) - "Master Plan Submission Requirements" - All HHS sites in the National Capital Region (which includes the District of Columbia; Montgomery and Prince George's Counties in Maryland; Arlington, Fairfax, Loudoun, and Prince William Counties in Virginia; and all cities now or hereafter existing in Maryland or Virginia within the geographic area bounded by the outer boundaries of the National Capital Region) are subject to the NCPC Master Plan Submission Requirements.
Organizational Responsibilities
1. Division
  1. Responsible for developing and updating Master Plans.
  2. Designates Division representatives as members of the Master Plan review and evaluation team.
  3. Develops long-range goals, objectives, and program plans used as a Master Plan guide.
  4. Integrates environmental considerations in the responsible Operating Division official's decision-making process, including environmental documents as part of the Master Plan document.
2. HHS Capital Investment Review Board Note: Master Plan oversight, release, and approval by HHS cannot be required for GSA-owned or managed properties as HHS does not have the authority to do so.
  1. Provides policy oversight to the Divisions in the preparation of facility Master Plans.
  2. Authorizes the release of Draft Master Plans for review and comment.
  3. Approves Final Master Plans.
Contents

The Master Plan is an integrated series of documents that present in graphic and narrative form the present composition and planned physical development of an HHS site containing more than one building, structure or activity. Master Plans analyze and document the form and function of HHS sites, individual site and building requirements, interrelationships among activities, and impacts to the surrounding communities.
1. General – The Master Plan should
  1. Reflect thorough planning,
  2. Establish a comprehensive and coordinated approach to physical development of the site,
  3. Ensure regulated growth and land use,
  4. Permit flexibility of use, and
  5. Provide for future expansion to meet long-range program goals without disrupting the efficiency of the plan or adversely impacting the environment.
2. Master Plan Requirements - Master Plans should address each of the following areas and provide viable solutions for any deficiencies or conflicts, which may be identified:
  1. Program Requirements - Establish planning premises and the Master Plan goals and objectives. Define the specific concepts and standards for future development.
  2. Region and Location - Describe the regional setting in terms of existing and future land use patterns, transportation systems, utility services, population on and off site, economy, and cultural assets. Also indicate current land use and zoning of adjacent areas.
  3. Boundary and Topographic Data - Include boundaries and acreage for existing and proposed surveys as appropriate.
  4. Site Utilization - Show general land use by type and the areas allocated to each function for both existing and proposed conditions. Address requirements for open space.
  5. Improvements - Show existing to-remain (i.e., not demolished) and proposed buildings, structures, and other improvements such as roads, parking areas, heliports, refuse handling areas, etc.
  6. Circulation - Indicate the internal road network, access points, parking facilities, pedestrian and bicycle movement systems, public transportation, and service access flow. Evaluate traffic impacts of proposed development and propose transportation management strategies to minimize impacts. Material flow should also be delineated (e.g., deliveries and trash disposition), as appropriate.
  7. Landscaping - Indicate general concepts for open space and green areas, and the location and extent of existing and proposed landscaping.
  8. Security, Fire, Life Safety, and Accessibility - Proposed building site location and planning should consider security, safety, and fire protection. Factors to be considered include, but are not limited to, combustibility, occupancy, and attendant hazards, and to and proximity -Firefighting resources, ease of access and egress, climate, and topography. Special consideration should be given to the security criteria, such as explosive standoff distances, channeling and screening of staff and visitors, safeguarding of queuing or gathering areas, vehicle accessibility and parking, loading docks, and protection of utilities. Security requirements should be coordinated with the Divisions' Physical Security organization.
  9. Utilities - Show utilities including solid and hazardous waste handling and disposal plans. Indicate proposed utility upgrades and new utilities necessary to support proposed development. It is preferable that utilities be located underground where practicable. In addition, where possible, utility distribution systems should be located to facilitate ease of access and future land use. A Life Cycle Cost Analysis should be conducted for utility capacities in excess of five years.
  10. Environmental Impacts - Analyze the potential impacts of all the above on the environment per HHS General Administration Manual part 30 Section 30-50 NEPA Review, including natural resources, historic properties, waste management, climate change resilience, etc.
  11. Existing Resources - Determine the major natural and man-made elements that affect potential development, such as the physical features of the site, climate, environmental features, utilities, historic/archaeological features, natural amenities and visual quality, Development Plan - Illustrate the proposed development of the site over the next 20 years, including the disposition of existing buildings, the infrastructure, construction, and other improvements.
  12. Energy Conservation - Establish energy conservation strategies and policies as they relate to siting and design of buildings, transportation practices, and renewable energy resources.
  13. Site Development Standards - Establish campus development guidelines and design standards. Include specific site element recommendations such as building density, setback, and height restrictions or buffer requirements. The plan should address the order of magnitude of building scale and orientation.
  14. Implementation - Illustrate phasing strategies for the implementation of the Master Plan over the next 20 years. Divisions are also encouraged to develop a Capital Improvements Plan (CIP) element for each Master Plan that addresses sequencing and phasing of construction requirements. The CIP should forecast, and schedule future capital facility needs to ensure that capital improvements are available when required based on needs identified in the Master Plan. The six-year CIP should be reassessed on an annual basis.
  15. Interrelationship - Describe the relationship of the Master Plan to applicable local, regional, state, and federal development

3.1.4 Reporting

Master Plan Development - Master Plans are developed by Divisions for properties under their control, generally with the assistance of external, specialized, master planning contractors. The plans typically are developed in two phases, as described below.

Draft Master Plan - The Draft Master Plan is a complete planning document containing all the information required of a Master Plan, including draft environmental documentation. The document is reviewed internally by Divisions' staff and the CIRB, as appropriate, prior to its distribution to outside agencies and the public for review.
1. GSA develops master plans in similar phases with input from HHS and/or the Division if the buildings are GSA owned or controlled.
Final Master Plan - A Final Master Plan report shall be prepared upon completion of all internal HHS reviews and public reviews, if required. The Division's environmental determination, consisting of either a determination of categorical exclusion, a Finding of No Significant Impact resulting from an Environmental Assessment, or an Environmental Impact Statement and Record of Decision should accompany the final plan. Master Plans normally require, at a minimum, the preparation of an Environmental Assessment.
Master Plan Approval – Upon acceptance of the Final Master Plan, the Division Director shall approve of Master Plans and notify the CIRB on new Master Plans and updates or amendments to existing Master Plans when future programmatic and/or funding implications warrant said actions.
1. Per HHS policy each master plan must be updated or amended when programmatic changes increase or decrease the need for real property assets previously identified by a Division's approved or current master plan

3.2 Real Property Capital Planning

3.2.1 Policy

In accordance with the Office of Management and Budget (OMB), Management Procedures Memorandum M-20-03, Implementation of Agency-wide Real Property Capital Planning, HHS is required to submit an annual Real Property Capital Plan (RPCP) for OMB review and record.

Divisions are required to prepare annual Division Real Property Capital Plans (formerly known as the Annual Building and Facilities Plan or similar) to inform the HHS RPCP. The Division Real Property Capital Plans must include projected facilities needs for the next five budget years for HHS owned real property.

The Division Real Property Capital Plans will be used as an aid in determining facilities funding needs and in developing HHS-wide budget priorities on an annual basis.

3.2.2 Administrative Requirements

Divisions are responsible for the development of the corresponding Division Real Property Capital Plan, which shall reflect projects that could be executed if funding is made available. Each Division Real Property Capital Plan should be developed jointly by the Division's planning, budget, environmental, and facilities staffs and shall include projected facilities needs for the next five budget years.

Division Real Property Capital Plans must include: Division Five-Year Timeline (5YTL), Division Sustainment Plans, and Division Capital Projects List.

3.2.3 Reporting

Divisions submit their Real Property Capital Plans by June 1.

Map it to OMBJ and HHSJ timelines

The HHS RPCP is delivered to OMB in August for the upcoming budget year (BY) (BY = calendar year (CY)+2 years, e.g., HHS RPCP Fiscal Year (FY)2024 is delivered to OMB in August 2022). The Division Real Property Capital Plans are delivered by the Divisions to HHS on the last day of April for the upcoming budget year.
Submission of the Plan

The Real Property Capital Plan shall be submitted to the PSC mailbox by each Division as part of the initial budget request each year. This plan identifies for the benefit of the ASA, PSC and the Division Head those projects that should be constructed in the proposed budget year in the event funding is available.
Amendments and/or modifications to Division Real Property Capital Plan

Amendments and/or modifications to the Division Real Property Capital Plan shall be submitted to reflect current year lump sum funded improvements, repairs and/or maintenance projects exceeding OPDIV approval authority by October 1st each year. OPDIVs have the flexibility to remove and add projects funded from lump sum amounts as requirements are identified. Facility Project Approval Agreements for new requirements shall be submitted as project need arises.

Amendments and/or modifications to the Division Real Property Capital Plan shall be submitted to reflect current year lump sum funded improvements, repairs and/or maintenance projects exceeding OPDIV approval authority by October 1st each year. OPDIVs have the flexibility to remove and add projects funded from lump sum amounts as requirements are identified. Facility Project Approval Agreements for new requirements shall be submitted as project need arises.

3.3 Funding Sources

3.3.1 Policy

The HHS Facilities Program generally includes activities necessary to provide land, structures, and owned buildings required by a Division to carry out its mission. The facilities program includes: Construction, Repair, Improvement, Maintenance, and Temporary Construction.

Congress requires a specific appropriation for purpose of the erection, repair or furnishing of public buildings, 41 United States Code (USC)§ 12. Congress has also authorized appropriations for healthcare facilities for the benefit of American Indian and Alaska Native tribes, 25 USC§ 13. An appropriation act satisfying the requirements of 41 USC§ 12 or that is authorized by 25 USC§ 13 could include funds for several of the major facilities program activities such as "Construction," "Improvement," and "Repair-by-Replacement." 42 USC 3514a established the "Nonrecurring Expenses Fund" (NEF) in the Treasury of the United States. Unobligated balances of expired discretionary funds appropriated in the current or any succeeding fiscal year from the General Fund of the Treasury to HHS by this or any other Act may be transferred (not later than the end of the fifth fiscal year after the last fiscal year for which such funds are available for the purposes for which appropriated. Funds are available until expended in addition to other funds as may be available for such purposes, for capital acquisition necessary for the operation of the Department, including facilities and information technology infrastructures subject to approval by OMB.

There are several key appropriation laws that apply to facilities programs. A primary statutory provision is 31 USC§ 1301, which provides that "appropriations shall be applied only to the objects for which the appropriations were made except as provided by law." Another relevant statutory provision is 41 USC§ 12, which states, "No contract shall be entered into for the erection, repair, or furnishing of any public building or for any public improvement which shall bind the Government to pay a larger sum of money than the amount in the Treasury appropriated for that specific purpose." A third significant statute is 41 USC§ 14, which imposes the following limitation on acquisition of land, "No land shall be purchased on account of the United States, except under a law authorizing such purpose." Additional statutes relevant for the planning, design, construction, and renovation of healthcare facilities for the benefit of Indian tribes are 25 USC§ 13 and 25 USC§ 1631. Additionally, appropriations law provides that federal appropriated funds may not be used to make permanent improvements to non-federal real property in the absence of statutory authority.

3.3.2 Administrative Requirements

Each of the landholding Division receives a Building and Facilities (B&F) appropriation, or Maintenance and Improvement (M&I) appropriation in the case of IHS, or a B&F earmark within a Divisions' appropriation, most often as a lump sum for construction and several associated purposes. Sometimes specific construction projects are identified as earmarks in the appropriation, more often they are included in the legislative history of an appropriations act or a Division's Congressional Justification. Hereafter, the term "B&F appropriations" shall refer to B&F/M&I and include B&F earmarks.

The actual obligation of these funds must be consistent with the appropriation act and any other applicable statutes or regulations. As a matter of policy, obligation of funds must also be consistent with the President's budget, as amended by Congressional appropriation reports or HHS B&F budget process documents. There are circumstances in which the funds must be reprogrammed in accordance with Congressional policy. Divisions should work with their budget office in this regard.

The HHS B&F budget process documents are defined as and produced sequentially starting with a Division's Preliminary Budget Submission to HHS (HHSJ), followed by the OMB Appropriations Committee Justification (OMBJ), and arriving at the Congressional Justification (CJ). Feedback and refinement of the budget is expected at any one of these stages.

3.3.2.1 Approval Thresholds

Effective March 23, 2021 the approval thresholds are revised as follows:

Table 3-1: Approval Thresholds for Project Types
Thresholds	Construction	Repair	Improvement (Renovations and Alterations)
CIRB Approval	> $20M	> $20M	> $20M
SRPO Approval	$5M to $20M	$15M to $20M	$10M to $20M
Division Approval	< $5M	< $15M	< $10M

Projects above the Division approval threshold must be included in the Division Real Property Capital Plans, and projects at owned facilities must be provided with a Facility Project Approval Agreement (FPAA) with all required documentation for review and approval of the SRPO and CIRB as applicable.

Projects within the Division approval threshold may be included in the Division Real Property Capital Plans at the Division's discretion.

3.3.2.2 Building and Facilities Appropriations

Each Division, in preparing its preliminary budget submission to HHS for the B&F appropriation, identifies two broad categories: (1) Construction and (2) Repair and Improvement (R&I). For IHS, Health Care Facilities Construction (HCFC) is synonymous with Construction, while Repair and Improvement are incorporated into the IHS category labeled Maintenance and Improvement (M&I).

The exact language of each of the several B&F appropriations determines the flexibility a Division may have to apply specific sources of funds to a project. As a rule, unless there is a limitation in the appropriations act or some other statutory limitation, funds within a lump sum appropriation may be used for any item covered by that lump sum appropriations act.

HHS requires that contracted design, construction inspection, and construction management services for construction projects be funded from the same B&F funding for that project. HHS also requires that contracted design, construction inspection, and construction management services for repair, maintenance and improvement projects use the same type of funding appropriated for those actions.

Division operating funds shall not be used for contracted design, construction inspection or construction management services of any project funded from one of the B&F appropriations, unless specifically authorized by law.

3.3.2.3 Building and Facilities Project Types

All projects are subject to review and approval per the established approval thresholds. Applicable projects must be clearly identified in the Division Real Property Capital Plans. If the project is not earmarked in the Division's appropriation, the Division shall identify the project by name and program amount within the appropriate Division's budget.

Construction – Construction projects shall be designed and constructed with funds specifically identified for that purpose in either a Division's B&F appropriation or in an earmark in the Division's appropriation. As a matter of policy, the use of such funds must also be consistent with the HHS B&F budget process documents or a Congressional reprogramming action.
1. Because Construction projects add program space not previously available, they are typically NOT funded from R&I or M&I funds, except for those that have been budgeted for as Repair-by-Replacement projects.
Land Purchases - Undeveloped land acquisitions are generally considered construction projects. All acquisitions of land require specific statutory authority, 41 USC§ 14, and specifically designated funding in an OPDIV's appropriation and/or budget. All land acquisitions must be submitted to and approved by the CIRB.
Equipment. Equipment is defined as machinery, furnishings and/or apparatus, providing a project with performance and infrastructure systems designed, installed, and operated, according to an established standard of care of a facility, required to support a defined mission. Equipment is acquired and installed as part of a project.
1. Standard of care of a facility is defined as the expected or resulting facility environment in compliance with minimum code requirements plus program of requirements specific to the facility.
2. Fixed Equipment. Fixed equipment is defined as equipment providing shared performance and infrastructure systems per the designed and/or installed standard of care of the facility. Fixed equipment is physically and permanently affixed to the facility and may not be detached without negatively impacting the shared performance and infrastructure systems of the facility.
  1. Fixed equipment installed as part of a construction project is funded from the same B&F appropriation as the construction.
3. Movable equipment. Moveable equipment is defined as equipment providing localized performance and infrastructure systems enhancements to the designed and/or installed standard of care of the facility. Moveable equipment may be physically affixed to the facility and may be detached without negatively impacting the shared performance and infrastructure systems of the facility.
  1. Moveable equipment is funded from operating funds; however, it may be funded from the B&F appropriation only when specifically authorized by law.
4. Special-purpose Equipment. Special-purpose equipment is defined as equipment provided for, or supporting, a specific programmatic need outside of the designed and/or installed standard of care of the facility. Special-purpose equipment is dependent on the performance and infrastructure systems provided by fixed equipment, or moveable equipment, or both.
  1. Special-purpose equipment is funded from operating funds; however, it may be funded from the B&F appropriation only when specifically authorized by law.
5. Equipment (IHS only) - IHS is authorized by Congress to provide all equipment types for construction projects under the same appropriation type.
  1. The IHS budget also includes a category of funds for medical equipment replacement in existing facilities, separate from the lump sum M&I funds. Medical equipment for existing facilities shall be funded from this budget category, unless included in a specific improvement or repair project.
Minor-Renovation. Minor-renovation is defined as projects necessary to install movable or special-purpose equipment, inclusive of those physical changes directly incident to and required to accommodate these types of equipment. Minor-renovation projects include related design, inspection services and construction management services. Minor-renovation excludes any and all general improvements, such as alteration of existing laboratories, conversion of existing office space into laboratories, or other structural or physical changes to a facility which are not directly related to the installation of moveable or special-purpose equipment.
1. Minor renovation is funded with operating funds; however, it may be funded from the B&F appropriation only when specifically authorized by law.
Repair and Improvement. Repair includes Repairs and Repair-by-Replacement. Improvement includes Building Improvements, Renovations and Alterations. For additional context to the definitions below, see FPAA Form 300 instructions in 5 Project Planning.
1. Funds identified for R&I in a Division's B&F appropriation or in its budget as lump sum R&I funds may be used for all Repair & Improvement.
2. Repairs are defined as the restoration of a failed or failing primary building system or real property component to a condition that restores its effective use for its designated purpose.
  1. Note that reconstruction or replacement of constituent parts or materials is classified as maintenance, not repairs.
3. Repair-by-Replacement is defined as the correction of deficiencies in an existing building by replacing the building when it is more advantageous than renovating the building.
  1. Buildings replaced under Repair-by-Replacement must be demolished because, by definition, they are not worth renovating.
  2. Repair-by-Replacement buildings are not intended to house more programs or staff than the space they are replacing.
4. Building Improvements are defined as improvements to or upgrading of primary building systems, and site improvements not associated with construction projects.
5. Renovations are defined as any betterment or change to an existing property to allow its continued or more efficient use within its designated purpose.
6. Alterations are defined as any betterment or change to an existing property to allow its continued or more efficient use for a different purpose or function.
Maintenance - Divisions cannot use funds identified for R&I in either a Division's appropriation or in a Division's budget for maintenance purpose or maintenance projects.
1. IHS is excepted from this requirement because IHS' B&F appropriation typically includes maintenance within it.
Maintenance and Improvement (IHS only) – Funds identified for M&I in the IHS budget can be used for all maintenance, repair, and improvement projects.
1. Routine maintenance projects, such as maintenance contracts for paving sealing, roof recoating, or mechanical equipment calibration, are subject to review and approval and must follow the established approval thresholds when the total costs of the project or contracts exceed the Division approval thresholds.
Temporary Construction – Temporary construction is defined as construction of temporary buildings required to support extraordinary, urgent, short-term needs.
1. Needs for temporary construction must be adequately supported with documentation detailing the specific, extraordinary, urgent mission requirements, for which the temporary construction is required, and the project's cradle-to-grave timelines.
2. Temporary building is defined as a building or structure intended for removal or demolition within a prescribed time not exceeding five (maximum ten) years as set out from the start of activation. A temporary building must conform to a planning, design, construction, and activation time not exceeding 18-months as set out from the identification of the short-term needs.
3. Written approval from PSC must be obtained before using operating funds for any temporary construction exceeding 134 square meters.

3.3.2.4 Annual Operating Appropriations

In addition to salaries, supplies, and other repetitive annual operating expenses, annual operating appropriations (a.k.a. operating funds) are used for certain facilities related work, projects or equipment as listed below.

Note that B&F appropriations may not be used for the related work defined below, unless B&F funds have been specifically identified and approved by statute for these purposes in an appropriations act, or in the HHS B&F budget process documents, or in a Congressional reprogramming action.

Projects or contracts funded with operating funds, which total costs exceed the Division approval thresholds, are subject to review and approval by the SRPO and CIRB as required.

Maintenance – Divisions must perform maintenance of owned facilities, including related engineering and inspection services, with operating funds allocated for maintenance of facilities in the HHS operating budget (except IHS).
Minor-Renovation – Operating funds may be used for minor-renovation projects. 16 Comp. Gen 160 and 816 (1936), Comp. Gen. B- 170587-O.M. (October 21, 1970) and Comp. Gen. B-164031(2) (November 24, 1972).
Planning and Programming - Operating funds may be used to develop Program of Requirements, Program Justification Documents, National Environmental Policy Act (NEPA) documentation as required by HHS General Administration Manual Part 30 Section 50, planning and programming documents and/or other studies, concept and schematic drawings necessary to establish complete project scope and funding requirements.
Temporary Construction - Operating funds may be used for temporary construction.
Equipment - Operating funds may be used for the purchase of moveable and special-purpose equipment.
1. For construction projects only, moveable, or special-purpose equipment that can be classified as fixed equipment must be funded from the same B&F appropriation as the construction.
Activation and Relocation Costs – Operating funds may be used for activation and relocation costs such as telecommunications cabling, moving, etc.

3.3.2.5 Other Funding Sources

The following is a list of available funding sources that may be used for facility's needs. If there are further questions and additional guidance needed on other funding sources, then reach out to the PSC mailbox:

Nonrecurring Expenses Funds (NEF) - NEF are used for Information Technology Infrastructure and for Facilities Projects. Projects are recommended by the Divisions for receipt of NEF in lieu of, or as a complement to B&F appropriations.
1. The NEF pool is appropriated and can be rescinded in part or in its entirety at the discretion of Congress, and should therefore not be considered as a predictable, nor stable, nor dependable source of funds for project execution.
2. A NEF Coordination Team led by the Assistant Secretary for Financial Resources (ASFR) is responsible for reviewing all projects recommended for NEF appropriations. The team scores and prioritizes the projects based on set criteria, which leads to a selection of projects which will receive a portion of the NEF pools. Not all projects recommended for NEF are funded.
  1. The scoring criteria and prioritization model for facilities projects is updated regularly and is detailed in the HHS RPCP.
3. Divisions may pursue funding projects using NEF appropriations; however, Divisions should not rely on these appropriations to execute projects or plan mission critical projects around the availability of these types of funds.
  1. History demonstrates that high value, high complexity projects are not adequate candidates for NEF appropriations given the reduced NEF pool available to HHS and the competition for the limited sources.
  2. History demonstrates that low value, low complexity project are not adequate candidates for NEF appropriations given the likely low score in the prioritization models, and subsequent lower ranking in the prioritization recommendation.
Royalty Funds are treated the equivalent of appropriated operating funds and cannot be used as Buildings and Facilities (B&F) appropriations. A specific appropriation is needed for the construction, repair, and improvement of public buildings pursuit to 41 U.S.C. 12.
Quarters Rental Return Funds - In accordance with Public Law (PL) 98-473, quarters rental return funds (i.e., funds collected as rent) are to be used for the operation and maintenance of quarters. These funds should be used prior to using appropriated funds.
Medicare/Medicaid Reimbursements - Appropriation language normally permits the Indian Health Service (IHS) to utilize Medicare/Medicaid reimbursements to perform construction, repairs, and improvements to meet accreditation requirements of The Joint Commission, exclusive of planning, design, and construction of new facilities or major renovation projects.
Gift Funds – The acceptance and use of gifts of money received from external sources shall be in accordance with the Section 231 of the Public Health Service Act, as codified in 42 USC§ 238. PSC shall be notified of any project(s) that are being constructed using gift funds or gifts of real property in any form.
IHS Facilities Support Account – Salaries for facilities staff, staff training, utility bills, and medical equipment repairs and tools.
IHS Medical Equipment Funds – Purchase of new and replacement medical equipment and for equipping newly constructed tribally owned healthcare facilities.
Private Insurance Reimbursement for Healthcare (IHS-specific) – Indian Health Service can collect Medical insurance payments and use the funds for facility improvements associated with private insurance collections.
Other – Appropriations language may, from time to time, authorize the use of other sources of funds for facilities construction. In such cases, the OPDIV shall refer to the language of that authorizing legislation in the FPAA documentation to ensure the appropriate use of the funds.

3.3.2.6 Facility Project Budgets

Unless described otherwise in the HHS B&F budget process documents, a facility project budget is assumed to include all component costs necessary to plan, program, design, acquire, construct, inspect, equip, and activate new or improved space, and as detailed in the Facility Project Approval Agreement (FPAA). On all construction, minor-renovation, repair, and improvement projects requiring a FPAA, a breakdown of project costs shall be provided in the FPAA. See 5 Project Planning for detailed instructions on preparing a FPAA and identifying project costs.

Planning Phase – The planning phase includes all costs associated with preparation of planning and programming documents and any special studies, concepts or schematics, necessary to adequately define the scope, budget, and schedule of the project.
Design Phase - The design phase includes the estimated cost of design services plus any necessary site survey, geotechnical surveys, National Environmental Policy Act documentation, historic preservation studies, archeological studies, and other special studies and/or associated costs not included in the planning process.
Construction Phase - The construction phase includes the estimated cost of the construction contract (with appropriate escalation factors applied), fixed equipment, inspection services, and construction management services, and an appropriate construction contingency allowance.
1. HHS policy stipulates that full funding of the entire construction phase component must be requested in the Division's budget. Projects planned, designed, and constructed in discrete complete phases may be funded over multiple years. Partial funding, which could result in an incomplete facility should additional funds not be appropriated, is not permitted unless funds for phased construction are identified and approved in the appropriation act, or in the HHS B&F budget process documents, or in a Congressional reprogramming action.
Equipment - Costs for all fixed equipment installed as part of the construction are included in the construction phase component of the facility project budget and funded from the same B&F appropriation. The FPAA must clearly identify the source of funding for all moveable and/or special-purpose equipment required to make the facility fully operational.
Moratorium in Construction - Upon completion of a construction project no additional construction work can begin in the recently constructed facility until after at least 365 calendar days after beneficial occupancy to avoid the incremental increase of the scope.

3.4 Daily Decision Making

3.4.1 Policy

Consistent with Executive Order (EO) 13327— Federal Real Property Asset Management (4 February 2004) shall establish, in writing, real property management and planning processes specific to the mission and structure of the particular component. The purpose of this documentation is, at a minimum, to define the processes to be used by the organization to manage its portfolio to ensure:

A routine management process (both horizontal and vertical) using inventory data and relevant performance-measure information consistent with the Federal Real Property Council (FRPC) performance measures;
Using performance measure information to identify opportunities that result in short- and long-term decisions to effectively and efficiently manage the portfolio;
The ability to identify the results of decisions made based on data and performance measures.

3.4.2 Guidance and Information

The organizations within HHS with real property management responsibilities perform day-to- day prioritization and execution of their facilities program, including master planning; facilities planning and design, construction, leasing, operations and maintenance, and space utilization; and management programs (environmental management, historic preservation, energy management, and occupational safety and health).

HHS guidance for capturing daily decision making and demonstrating results is focused on right-sizing the portfolio. Five questions should be clearly addressed in developing processes for capturing daily decision making and demonstrating results.

1. What Is the Business Challenges The Department Is Addressing?

The following are examples of business challenges the Department faces to manage the HHS portfolio of real property assets effectively and efficiently:

Address mission requirements, including adapting to changes;
Sustain and improve asset condition;
Address emergent repair requests;
Reduce operating costs;
Prioritize use of available funding resources;
Improve utilization through collocations/consolidations/disposals;
Ensure accreditation;
Retain trained and experienced staff;
Address climate resiliency/sustainability/energy/Americans with Disability Act (ADA) (regulatory requirements);
Consult with Tribes on operations of Federal real property assets under P.L. 93-538 (Indian Self Determination Act);
Address security; and
Address health and life safety;

2. What Data Is Available to Assist In Daily Decision-Making?

Sources of data that could be considered include:

Facility portfolio data;
Federal Real Property Profile (FRPP) / Automated Real Property Inventory System (ARIS);
Facilities Condition Assessment Data;
Master Plans;
Prioritization Tools;
Historical Knowledge;
Statistical data from program using the facility;
Site Analysis; and
Industry Benchmarking.

3. What Types of Analysis Are Used To Make Decisions?

The following are different types of analysis that should be used to guide the daily decision-making process:

Alignment with strategic plan and performance measures;
Evaluation of Tools: Life Cycle Cost Analysis (LCCA);
Project Delivery and Contract Strategy (PDCS);
Project Development Rating Index (PDRI);
Feasibility Studies
Retention/Disposal Studies; and
Program Prioritization

4. What Are The Expected Results Identified Through The Analysis?

The following are common areas in real property management which demonstrate positive results in managing a portfolio of assets:

Increased support of the organization's mission;
Better facilities utilization;
Efficiency of operations performance; and
Sustainment and improvement of asset condition.

5. How Were the Results Replicated Across The Organization?

The following are a few methods that can be utilized after results have been realized to affect positive influences the organization's portfolio management process:

Sharing lessons learned; and
Implementation of new or revised, improved policy, procedures, and standards across the Department's organizations.

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