ABSTRACT

The Earthquake Hazard Reduction Act of 1977 (as amended) initiated a long-term nationwide earthquake reduction program. As a part of the implementation of this act, the President issued Executive Order (EO) 12941, "Seismic Safety of Existing for Federally Owned or Leased Buildings" The order requires all Federal Agencies to inventory, evaluate, and develop remediation cost estimates for all owned and leased buildings for earthquake safety. The Department of the Interior selected to use the Value Method to analyze the available resources, options, and alternatives for accomplishing this enormous and complex task. Interior executives used the results of the study to set the plans, budget, staff roles, and support needs to enact the Executive Order within Interior.

BACKGROUND

When a moderate or severe earthquake strikes an urban area, a large number of buildings and infrastructures will be damaged. In recognition of the danger to life and safety, Congress passed the 1977 Act and has amended the Act as needed over the years. The act first directed that new buildings be constructed in conformance with appropriate earthquake design standards. Subsequently all principal model building codes and standards have been amended to include seismic design and construction provisions and new buildings should now be relatively safe during earthquake events.

Numerous studies and recent experience have shown that the greatest current threat to life and safety arising from a large earthquake in the United States is posed by existing buildings that are not in conformance with current seismic code provisions. Buildings that are a risk to life and safety during an earthquake must be evaluated to determine the appropriate remedy and cost. Recent earthquakes and an increasing awareness of earthquake/seismic risks, have led to improved seismic standards for new construction, and increased policies addressing seismic safety. In December 1994, President Clinton signed EO 12941 "Seismic Safety of Existing for Federally Owned or Leased Buildings." This EO requires all Federal Agencies to: 1) complete an inventory of all buildings leased or owned, 2) identify all seismically high-risk buildings, and 3) evaluate the structural capacity and prepare mitigation cost estimates for all extremely high-risk buildings.

This seemingly simple task is a very large and costly undertaking for many Federal Agencies that have extensive inventories of buildings. The sheer numbers and scale involved in the task is remarkable. The Department of the Interior presently owns approximately 40,000 buildings and structures. Agencies, such as the branches of the Department of Defense, i. e., Air Force, Army, and Navy; have building inventories many times greater than Interior. The identification and evaluation of building seismic risk is difficult because seismic risk is a complex outcome of seismic hazard (size and frequency of predicted the worse-case earthquake), vulnerability (amount of damage, building construction types, etc.), and occupancy or function of buildings. This complexity is further compounded by the resources and funds that are available to perform this difficult task, and the value and estimated cost of damages for a threatened structure.

INTERIOR SELECTS VALUE METHOD TO GUIDE DECISION

The Department of the Interior recognizes that the Value Method is a powerful decisionmaking and support tool. Accordingly, Interior directed that a Value Method value study be used to provide executive decisionmakers with the appropriate information and proposed compliance recommendations needed to make a quality decision. The Value Method was chosen in order to develop a value-based consensus on program requirements, incorporate strategic planning, provide reliable first cost estimates, and propose program implementation alternatives. Using the Value Method in early stages of program development provides improved participation of all interested parties and agreement on values to be assigned to a range of program parameters.

VALUE STUDY TEAM FORMATION

The value study team was formed to develop alternatives and recommendations for directors to use in determining a course of action and in allocating the funding levels necessary to implement a solution to comply with the requirements of EO 12941. The team consisted of engineers, geologists, facility managers and earthquake specialists. Although the team was weighted toward seismic safety expertise, it was balanced with multi-discipline professionals who had a variety of managerial, organizational, and other expertise in addition to their earthquake specialization. Further, so as to balance the differing organizational concerns involved, only one team member was selected from each Interior bureau and office that has significant numbers of buildings in its inventory.

INFORMATION PHASE AND CREATIVE PHASE ACTIVITIES

The value study occurred at a very early point in the EO activity. Although significant amounts of building inventory data were available from a wide variety of sources, it had not been centrally collected and evaluated. At the inception of the value study, not even the total number of buildings owned or leased by Interior was accurately known. Estimates of the total number of buildings varied by as much as 20-percent. This variation was not due to poor data, but ratherto the differences of databases and their classifications, each separately developed and maintained by the different bureaus within Interior. Each building database had been developed for differing purposes by individual Interior bureaus and therefore were not comparable or interchangeable. In addition to the problems of combining individually unique building databases from different Interior bureaus, the existing databases did not include several data elements that were now required by the EO. Accordingly, the job plan phases were visited twice by the team. First to evaluate the overall capability of Interior to meet the intent and purposes of the EO. The second use of the job plan was for development of specific alternatives within each of the general value proposals developed in the first exercise of the study. The first use of the Value Method job plan utilized function analysis to generate multi-dimensional structure for a complex set of program requirements. It focused the study on three key functions, namely: gather appropriate data, classify risk, and determine options.

During the first information phase a FAST diagram (Figure 1) was generated for the EO activity intent and directives related to it. The FAST diagram connects and illustrates the "How" and "Why" bi-directional interrelationships of the higher order, basic and secondary functions. The study team used the resulting FAST to brainstorm and generate a large number of ideas and techniques that could be used to produce the data needed to allow people charged with implementing the EO requirements. Using the affinity technique, these ideas were collected into like areas. Then they were expanded and improved to generate a focused set of concepts for the value study team and top Interior officials to consider.

Once the potential data sources and concepts' analysis and developments were completed and placed in prominent places on the walls of the room (presented), the value study team revised the information phase to complete understanding of the EO requirements and focus on Value Method analysis of the basic functions. The team determined that the Interior inventory involved was more than 40,000 buildings and structures. A conservative estimate of the number of buildings that would fall into each building definition category was generated. The team then used the previously developed concepts (implementation of previous value study job plan work) in a combination and affinity creativity session to develop alternative methods to perform the actual inventory screening, building evaluations and seismic risk mitigation cost estimation work specified by the EO.

DECISIONMAKER CONCEPTS DEVELOPMENT

The value study determined that EO compliance requirements broke into three major areas or steps:

(1.) inventory and database updating, (2.) screen data and classifying risk, and (3.) evaluate high-risk buildings and estimate cost of mitigation. The first step was inventorying to determine the actual building number involved and probable status of the risk parameters for each building. Once the inventory was generated, resulting data would need to be screened, for probable risk and inclusion of special factors relating to a specific bureau or office that would affect decisions. Finally, the results would be used to perform costly onsite evaluations and other activities to confirm that the seismic hazard risk identified by the screening was real, and if real, the appropriate course of action (refurbish, move and demolish, etcetera) would be determined and a cost estimate developed. Screening of the updated building inventories for exceptionally high-risk buildings is based on criteria customized for each Federal agency. Customizing of the database screen, in order to classify risk, includes designating certain building occupancy types as essential to mission accomplishment or critical for life safety considerations (Tables 1 and 2). Each step, for both decision and performance purposes, was dependent on the previous step.

Table 1. Suggested definition of exceptionally high-risk buildings.

For each EO compliance requirement the team developed various alternative approaches. The added potential worth of performing additional work within a specific step was used to generate at least three possible alternatives within that required step. Within each step each potential alternative was placed in a matrix and ordered according to its estimated cost. The lowest cost option was placed on the bottom and the highest cost item on the top. The matrix was used to evaluate the incremental worth versus incremental cost within each step and the effect on subsequent steps.

The monetary cost of all alternatives for screening was determined to be very small, relative to inventory and evaluation activities. However, depending on which screening alternative is chosen, its effect on the last area, evaluation, was large in both cost and accuracy. Further, screening was highly dependent on the quality of inventory data utilized. Incomplete or inaccurate data input would lead to a poor result regardless of the quality of screening. The summary of basic alternatives matrix is shown in Table 3.

VALUE STUDY TEAM SCENARIO ESTIMATES

The team then used their expertise and knowledge developed during the value study to evaluate the incremental worth and cost matrix in terms of two scenarios: (1.) highest estimated value and (2.) obtaining the best value if funding is limited (necessitating minimal actions involving cost). Using these scenarios, the team generated two combinations of alternatives for top management's consideration. For these two scenario combinations, the team further developed the various activity and funding timing possibilities associated with those selections and the related worth and costs (monetary and non-monetary).

TABLE 2. SUGGESTED DEFINITION OF HIGH-RISK BUILDINGS

The team recommended that the highest cost alternatives also had the greatest worth, and the worth versus cost relationship was of sufficient value to recommend that approach to the directors and funding authorities. Staging of the steps with regard to funding would allow decisionmakers to change direction should the estimates change or actual value attained not meet expectations. This recommended scenario would provide an accurate Interior-wide building Inventory and a very comprehensive and complete determination of where all the high-risk buildings are located and also provide detailed cost estimates for repair of building deficiencies.

The second scenario yielded a much lower cost requirement. However, it would not allow higher quality results and the potential risk of increased cost in later years was high. Essentially, this meant obtaining no additional data, minimal screening of inadequate data, conducting no building evaluations, and relying on internal occupant knowledge of the building. Further, if it was later determined that higher quality results were necessary, little of the work performed could be used. It would be necessary to return to the inventory step and expend the funds at that time. This second scenario was provided to the decisionmakers because the lack of funding is always a very real possibility. The resulting determinations would not fully comply with the EO requirements, but Interior could still make a reasonable accounting of their most extremely hazardous buildings.

Table 3. Summary of basic alternatives matrix

DECISIONMAKER PRESENTATION

The individual step alternatives within each of the major steps (inventory, screening, and evaluation), and two combination of alternatives scenarios were presented to the Interior Planning, Design and Construction Council directors.. The Council directors were extremely pleased with the value study team report and findings and instructed the team to present its findings to funding and other Interior management officials in Washington, D.C. Immediately after this presentation, a decision was made to implement the highest value scenario with minor modifications.

The use of Value Method procedures and reporting processes provided decisionmakers with a straightforward set of cost-based alternatives for accomplishing program requirements that initially appeared to be overwhelming. It proved to be a highly successful application for executive use of the Value Method as a management tool. It helped the customers (those in Interior buildings at the time of an earthquake risk event), the organization (those charged with the implementation of the EO), and management (executives needing to balance scarce resources with existing Interior program requirements and the new compliance requirements of EO).

SUMMARY

This case study is just one more example of how application of the Value Method generates high quality results that can be used by decisionmakers to produce supportable decisions that have high potential for benefiting everyone involved: customers, managers, and organizations. All phases of the Value Method job plan were visited twice. The Department of the Interior has found this to be an extremely valuable approach on activities and projects at an initial level of development. The value study results were used by managerial and funding authorities to specify and support the direction selected for implementation. The results and supporting discussions, findings and observations contained in the value study continue to be used to guide and assist the people charged with performing the work.

The success of this study is the clarity, consensus building, and comparative risk assessments that resulted by using the Value Method to analyze the EO requirements. The Value Method confirmed program requirements definitions, established program and operational performance criteria, provided comparative risk assessments of alternatives, developed realistic cost estimates, and recommended the best program value for money proposals. The Value Method brought understanding and improved clarity of the program objectives, options and related consequences, for a better briefing to upper management. The decisionmakers were provided with a study that they could use to: (1.) Guide program and budget development, (2.) Establish project priorities within the program, (3.) Advance cost-effective, quality solutions at known risk, and (4.) Provide value based consensus recommendations.

REFERENCES

Executive Order 12699, January 5, 1990, Federal Register, Vol. 55, No. 6, January 9, 1990.

Executive Order 12941, December 1, 1994, Federal Register, Vol. 59, No. 232, December 5, 1994.

Federal Buildings, Many are Threatened by Earthquakes, but Limited Action Has Been Taken, GAO, Report to Congressional Committees, GAO/GGD-92-62, May 1992.

Seismic Safety Alternatives, Methods to Implement EO 12491 within Interior, Value Study Report, Department of the Interior, November 9, 1995.

Standards of Seismic Safety for Existing Federally Owned or Leased Buildings and Commentary, ICSSC RP 4, NISTIR 5382, Department of Commerce, National Institute of Standards and Technology, Diana Todd, ed., February 1994.

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