FM Providers Have Changed, It’s Time for RFPs to Change As Well

This week's article comes to us courtesy of Ron Segura, President of Segura Associates.  Ron's expertise in helping clients evaluate and improve their FM services is well known in the industry.  As you read his article think about your own RFP process and the expectations you have of your service providers.  Are the two in alignment?

Ron Segura

Once upon a time a janitorial company was a janitorial company. Firms in those days didn’t think to venture into integrated pest management or landscaping services. But today it’s a different story, and comprehensive facility management (FM) is the name of today’s game.

Clients now expect FM contractors to bundle services such as landscaping, integrated pest management, sustainability, HVAC services, general repair work, and more.

A cleaning company that does not want to grow continues offering a narrow scope of services. But FM service providers with an eye toward the future uncover ways to provide multiple services either in-house or through strategic alliances with other service providers.  By partnering with a pest management company or an HVAC firm, FM contractors can offer multiple services and pass on cost savings and efficiencies to their customers.

While FM contractors are providing more services than ever before, RFPs from clients have yet to catch up. Often RFPs include specs cut and pasted from RFPs the client found on the Internet. Sometimes these specifications include outdated information or processes that are cost prohibitive to provide. These poorly thought out RFPs box the contractor in, making it difficult or even impossible to provide the services the customer really wants.

"Too many well-intended managers are pressed for time and put together RFP's based on what they believe to be a ‘universal’ standard -- the cut and paste approach,” says Richard M. Fineo, MCR, director of development at DTZ-a UGL Company.

He continues, “Often times an old bid, or even a neighbor/colleagues bid, will appear to save the responsible party time in the preparation of the RFP and seem sufficient. The problem with this is that the specifications, which should drive the costing become an ‘approximation’ of what is called for -- a sort of ‘wink and nod’ at what is really needed.”

There’s little continuity when RFPs are put together this way. There may even be contradictions within the specifications themselves. For instance, the RFP might specify monthly stripping and waxing, but the industry doesn’t strip and wax anymore, it strips and finishes (or coats) the floors. This is also no longer done on a monthly basis because it’s not cost effective and there’s no need to with today’s more effective products. Those issuing the RFP falsely believe that in order for floors to look good, they need to be stripped and refinished each month, but what they really require is a solid floor maintenance program.

If FM contractors try to adhere to these RFPs, their cost estimates may be higher than the client wants. Or they may cut corners to come in at a lower price, and then the client isn’t getting the services they really need.

“If there was EVER a good time to bring in a consultant, it is during the critical RFP preparation stage,” Fineo adds. “Adherence to the RFP will become the strongest evaluation tool, and if it does not truly reflect the needs, wants and expectations of the person issuing the RFP, and ultimately the award of service, then the entire process is flawed.”

There clearly is a need to change the entire RFP process and to reduce the window of time needed to move through to the end where a bid is awarded.

A few years ago Stanford University revamped its RFP process with extremely positive results.

The first step of their process was to pre-qualify service providers to narrow the field of qualified bidders to a list of ten. This list should include companies with solid reputations and weed out those with less than stellar ones. Once these companies have been identified, the bidding agency should send out correspondence stating their intent to go out to bid for these services and request FM contractors to supply company information or marketing materials that demonstrate their interest in the work and their capability of carrying it out.

Those FM providers that respond are then afforded an opportunity to give a half-hour presentation on predetermined topics. Stanford allowed potential bidders to talk on four things: sustainability and their company involvement in this initiative; communication processes in place; technologies and products used in the performance of duties; and the transition process used to set up new accounts.

These presentations are evaluated by an RFP team, which might include a representative from the facility management department, the site manager who directly receives complaints or concerns from occupants, a quality control person, an outside service provider, and possibly a contract administrator or financial representative.

After the presentations, the RFP team scores the results and narrows the field of potential bidders to three, with the incumbent as a fourth. Many times the scoring methods used in this process utilize complex matrixes that dilute the evaluation until it becomes labor intensive and mechanical and decisions are based solely on price. Stanford kept the process simple and scored presenters from one to five on their green program, transition plan, training program and communications process.

It is then and only then that these firms would have an opportunity to bid on the RFP. The advantage is that instead of having 10 companies submitting bids, there are only three and these companies are prequalified to do the work.

Before providing the narrowed field of FM providers with an RFP, the RFP team will have reviewed its specifications and adjusted them as needed. The specifications will provide adequate information on building statistics and cleaning frequencies and reflect whether or not there will be a need for green or sustainable services. Stanford’s team combed through its existing specifications and found their current provider was not addressing some areas. These areas had been an issue on an ongoing basis and a cause for complaints. They adjusted their RFP to address these issues to better reflect the services Stanford required.

RFPs must be specific. If there are sustainability concerns, for example, the specification should list the goals the agency wishes to reach. Do they want to be LEED certified? Do they hope to use greener chemicals and cleaning processes? Is recycling important? How much do they hope to divert from the waste stream? Is saving water or energy a goal?

"Any good RFP also allows for input on the part of the bidder, an opportunity for the responsible bidder to go beyond the RFP and advise as to new methodologies and efficiencies that could potentially save money and improve performance,” adds Fineo. “This is an opportunity for free advice. Why wouldn’t you ask for it? It can be an indicator of whether or not your RFP respondent will become a true 'partner' or just a contracted service provider.”

And herein is another advantage of working with fewer bidders in the RFP process. There is an opportunity to work with them more closely to ask for advice and pick the brains of these experts. A good service provider will seize this opportunity to point out concerns within the specs, such as the need to strip and wax floors monthly.

Ask tough questions of those applying for the job, adds Fineo. "I welcome RFPs that include questions about recent losses. What have YOU (the vendor) lost recently, what was the reason and what did you learn from the experience?” he says. “I've landed more than a few contracts by being able to articulate the lesson, albeit painful, of an account that ended with a cancellation and how our approach in the future would include the lesson learned.”

Price is important but not the only thing, Fineo stresses. "Very often the responses to an RFP will be reduced to a matrix of the financial piece -- and little else,” says Fineo. “If the one and only goal of the company providing the bid is saving money, an unfortunate position to be sure, this should be made clear from the onset. If instead, the bids are honestly going to be evaluated for value that includes experience, innovation, sustainability, and of course financial value, etc., you can see the special importance attached to an RFP that reflects these desires and concerns.”

If companies truly desire FM contractors to bundle services, their RFPs need to reflect that. Developing a bidding process similar to the one used by Stanford can help companies get the services they desire at a price they can afford.

Ron Segura –President of Segura & Associates is a Consultant who assists its client’s in analyzing outsourced and In House cleaning programs, and assisting in the development and leadership of the RFP Process.

Website: rsegura@seguraassociates.com

E-mail: www.seguraassociates.com

Bamboo Architecture

Check out this YouTube video of Columbian Architect Simon Velez.  Amazing work using bamboo as the construction material of choice.

Integrated Project Delivery (IPD): Optimize, Collaborate, and Own the Project

Integrated Project Delivery (IPD) projects offer many advantages over traditional project delivery systems, including Design-Build and other fast track methodologies.  Integrated Project Delivery requires that entities which previously worked together on projects but with different goals and incentives now collaborate.  It also requires new behaviors, new attitudes, new contracts and new transparency.  Successful Integrated Project Delivery (IPD) projects recognize and exercise these IPD truisms.

Optimization Requires Collaboration:  The whole purpose of IPD is to optimize the project delivery process.  While there are many ways to collaborate with technology, the interpersonal aspects of IPD teams is critical.  Sharing documentation is one thing, rapid recognition of project issues and the ability to quickly convene and resolve them is another.  Although not an absolute requirement, many IPD project teams find that co-locating project personnel in one office speeds this process, encourages deeper collaboration, and results in faster decisions with greater cross-functional buy-in.

Collaboration Unlocks Creativity:  A natural outgrowth of good collaboration is increased creativity.  The free form flow of ideas and instant feedback feeds and helps to accelerate the creative cycle.  Design issues, constructability issue resolution, and every other facet of the project delivery process benefits from this outcome.

Joint Control Creates Joint Ownership:  Unlike traditional projects where separate contracts set up individual “fiefdoms” inside the project, each with its own set of priorities, incentives and penalties; IPD contracts create a project governance system that increases transparency and participation.  Shared decision making results in shared ownership of those decisions, thereby increasing buy-in and speeding execution. 

Challenge Stimulates Creativity but Fear Creates Defensiveness:  Every coin has two sides and IPD is no different.  As I mentioned at the beginning of this post, IPD requires new behaviors and attitudes.  When project participants are unable to make those shifts then the requisite trust among team members does not develop and the free exchange of ideas is inhibited, resulting in loss of project momentum and benefit.  Choosing IPD team members is a critical first step. 

Much of the benefit derived in successful IPD projects comes from enhanced collaboration.  But “it ain’t always easy,” as a wise man once said.  Participants need to make changes in the way they approach projects.  In traditional delivery systems project team members have individual aspirations.  They know how they define project success in terms of financial and other project outcomes.  But, they are not shared by all and sometimes differ significantly across the team.  Individual contracts do little to help and usually more to hinder.  IPD projects are based more on shared values.  IPD contracts unite all participants under the same set of goals with rewards and risks allocated by consensus.  Behaviors are enforced through rewards and consequences that are jointly agreed upon at the outset.

Characteristics of Successful Integrated Project Delivery (IPD) Projects

The Integrated Project Delivery (IPD) model requires behaviors, collaboration, and alignment of project incentives and risks at a level rarely seen in traditional project delivery systems.  Integrated Project Delivery is a holistic approach to project delivery that seeks to improve project speed, cost and quality.  Successful IPD projects exhibit a common set of characteristics which can be viewed as guidelines to forming your own project environment.

IPD Project Structure Supports Integration:  The project structure is possibly the single most important component in IPD.  Establishing project participants early on and bringing them together with common goals, incentives and risks is critical.  It requires that the Owner decide who all of the team members are long before the project is designed and bid documents are available, and that project control becomes a shared function.  By introducing transparency in control and decision making the group adopts collaboration and consensus as key behaviors, jointly agreeing on incentive/risk sharing and project targets.  This is not to say that the Owner relinquishes all rights.  The Owner establishes primary project outcomes and deliverables, establishes the budget and schedule.  How these targets are reached, however, becomes a much more “engagement centric” exercise than traditional projects experience.

IPD Contracts Serve as an Alignment Tool:  Traditional project structures and contracts create three distinct and often competing agendas.  When an Owner contracts separately with design professionals and Contractors the Owner assumes the responsibility and risk of coordinating project requirements and aligning entities that may be “working toward one common goal.”  At least that’s what we all say.  Reality, however, often suggests a different type of alignment, one in which three separate project teams each have their own set of requirements and definitions of a successful project.  Integrated Project Delivery contracts bring the Owner, Architect and Contractor together in one arrangement with one set of project definitions and goals.  This results in Sub-Consultants and Sub-Contractors also having the same outcomes in mind, as opposed to traditional models where they have more proprietary interests at heart.

Project Participant Mindsets Are Focused on Common Goals:  The transparency required of successful IPD projects engenders increasing trust and collaboration.  It is through these two channels that some of the most rewarding changes come.  Instead of compromising to protect their particular interests in a project all participants must adopt the common (project’s) good as their goal.  While the financial incentive of the shared reward pool is certainly a motivator, the importance and benefits of working together in close collaboration should not be under-valued in this sense.

Synergies Enhance Collaboration and Outcomes:  Technologies such as Building Information Modeling (BIM) and protocols like Lean Design and Construction are perfect bedfellows with IPD.  They accelerate projects while minimizing risk and improving quality.   It is no accident that most IPD projects are fast-tracked.  These tools and strategies are designed to do exactly that.  Greater visibility of design evolution and increased constructability input from the earliest stages contributes to early identification of design conflicts or other issues.  Lean Construction accepts time sensitive inputs and prioritizes design and decision making.

Understanding the Total Cost of Ownership of Your Facilities

Owner’s often make decisions to build or not build new capital projects based primarily on the cost of initial development and depreciation.  However, the first build cost of a project is a small fraction of its lifecycle cost and not understanding the total costs could be catastrophic.  In the past FM’s have used various budget tools such as the APPA model to predict future operating costs.  Today, Building Information Modeling (BIM) not only improves the design and first build cost of a new facility, it also aids in modeling operations and predicting the Total Cost of Ownership.

To help understand the Total Cost of Ownership of a project, break the costs into time sensitive categories as follows.

One Time Development and Decommissioning Costs:  These are non-recurring costs that occur once in a project’s life.  Costs in this category include conceptualizing and designing the project, bidding the project, financing the project and building and commissioning the project.  To these front end costs do not forget to add the cost to decommission, demolish and dispose of the project at the end of its lifecycle. 

Annual Recurring Costs:  Operating budgets should be forecast through the entire lifecycle of the project and should include staffing, planned maintenance, unplanned maintenance necessary to make repairs, and utilities.  These costs may all be forecast by modeling building infrastructure and systems against your use profile, and by applying your historical maintenance experience as a modifier.  The last will help fine tune your projection to account for your individual style of operations and efficiency levels.

Periodic Recapitalization Costs:  This category should include estimated allowances for retrofits and improvements over time, modifications to support changing program requirements, and the replacement or upgrade of systems as they reach the end of their life cycles.  The less certain of these costs, allowances for retrofits, improvements and programmatic changes, can be estimated using past experience as a guide.  The upgrade and replacement of major building systems can be predicted with a high degree of accuracy, especially with the aid of BIM.

Defining and forecasting project development, operating, and retirement costs as outlined above improves the information available to decision makers, informs the design process, and helps facility managers properly organize and staff support functions.  Aside from predicting the overall investment required the analysis also provides a cash flow model and supports investment decisions to replace major systems (or the entire asset when the time comes).

BIM allows us to model operating and recapitalization costs with a much higher degree of certainty.  BIM not only improves the efficiency of the design and construction processes but also the ongoing financial requirements to operate and support the building.  By operating the building virtually we can test operating profiles, develop maintenance routines, model energy performance, inform process re-engineering and predict system replacement timing.  All of these benefits further inform the understanding of the Total Cost of Ownership of the facility.

When considering the Total Cost of Ownership also factor in the effects of sustainability policies and practices.  Sustainability is now a core issue in any new development project.  It is likely that the decision to implement a new project will quickly lead to a discussion of sustainability goals for the project and ongoing operations.  These discussions and resulting decisions may well place additional demands upon the project which have the potential to change programmatic requirements.  For example, a sustainability policy to support the use of mass transit in a new project might lead to a different site selection decision and/or the inclusion of child care facilities.  Every time the program changes the requirements to support the facility changes, as does the Total Cost of Ownership of the facility over its lifecycle.

FM’s have a responsibility to elevate the dialogue on these issues when new developments are planned, and a need to demonstrate leadership and knowledge of current best practices.  Doing so helps the organization make better decisions, improves FM credibility and best positions FM to operate successfully in the new environment.

FM TODAY: A STORY OF REALITIES AND VISION - Pt. 2

Sustainability Is Moving Along the Maturity Curve

Sustainability is maturing beyond the “new build” emphasis that characterized it not so long ago.  Today, the emphasis is on developing corporate sustainability policies and protocols to improve behavior and outcomes while working to strengthen new build rating systems and credentials.

The growing interest and effort behind developing net zero buildings is placing a premium on the integration of design and operation, and recognizes that a building’s affect on the environment continues over its entire life span, the sum of the whole being several factors greater than first environmental cost.  Key strategies in this maturation include green leasing, supply chain accountability, making data transparent and possibly a bit of social engineering.

The Global Reporting Initiative (GRI) continues to evolve but is only one example of maturing sustainability regimens.  In August of this year the UK Green Building Council published the results of its latest review with members as it gears up for a GRI update in 2011.  The Leadership in Energy and Environmental Design (LEED) program continues to refine its credentials and provide market-niche specific certifications.  In whole, these and similar transitions in other protocols indicate a continuing trend toward knowledge specialization with the goal of driving sustainability consciousness deeper into the built environment psyche.

An interesting evolution to watch is the increasing use and effect of visible building performance data.  Important to operators because visibility makes operating efficiency transparent, and therefore important to them personally as well as organizationally, it also has the potential to broaden its reach.  Buildings with good sustainability resumes command higher rents.  As technology makes information more visible, however, it will not only be owners and operators who see it.  Occupants will be able to compare energy performance of other occupants in the building.  This visibility has some peer pressure potential and most certainly will encourage lessees to include occupant energy profiles on their lease shopping list.

Global Population Shifts and Growth

Global population changes over the next fifty years are projected to shift billions of people from the "developing countries" to the "developed countries" category. Think of what that means for the businesses we support, increased homogenization of economies and the demands that will be placed upon FM. Take a look at Hans Rosling's presentation. Known for his use of technology to illustrate statistical data, Hans has outdone himself this time. Informative, illuminating, challenging and dare I say it, entertaining.  Hans Rosling on global population growth | Video on TED.com

Global Reporting Initiative (GRI) Overview

GRI is an organic response to the sustainability dialogue in that it began as an informal network, is allied with other international programs, and is a continually evolving framework. Over time it has matured until it is now the pre-eminent guideline for reporting sustainability performance across a wide array of dimensions. It seeks to standardize reporting to enable accurate assessment of any participating organization. That said, it does not mandate performance, only a standard way of reporting. It recognizes that sustainability leadership must come from the top and that different types of organizations have different needs, interests, priorities and constraints.

This Reporting Guidelines Reference Sheet provides an excellent overview of profile and performance information which organizations submit, and can be used as a support tool to guide engagement discussion. If you do elect to report your sustainability performance using GRI guidelines you have the option to provide a copy of the report to GRI, register the report with GRI thereby allowing data to be included in the global database, and to ask GRI to check the self-rating score you have applied.

Allowing data to be shared via the global database increases the knowledge base of all practitioners and informs the continued development of sustainability.

In addition to overall reporting standards, GRI is on course to develop industry specific supplements. This will allow meaningful analysis and definition of best practices within an industry segment and offer particular value to those participants. Industry segment supplements are currently available for the Electric Utilities, Financial Services, Food Processing, Mining & Metals, and NGO segments. Supplements are currently under development for the Airport Operator, Construction and Real Estate, Event Organizer, Media, and Oil & Gas segments. Other segments are currently in the pilot stage.

In many ways GRI mimics the model used by the Open Standards Consortium for Real Estate (OSCRE), drawing from operators around the globe to share openly. In OSCRE’s case the effort is to standardize information sharing and process flow within the real estate sector. In GRI’s case the goal is to provide a standardized rigor to reporting and ranking sustainability performance, thereby increasing the quality of information available and elevating performance. In both cases the model is voluntary, participatory and beneficial on a wide basis.

What Does Sustainability Really Mean?

Sustainability is moving along the maturity curve, becoming a mainstream and sometimes core issue for FM’s The problem with “sustainability,” however, is understanding what it really means and where it applies. Too many times the definition provided is limited, possibly in unintentional ways. For example, those who think in terms of development understand sustainability as an element of design and construction processes but seldom envision it past initial occupancy when the project team is largely gone. Operators think in terms of maintaining and optimizing the physical attributes and systems of a facility over its entire life cycle. Service providers and vendors consider the quality of products and services and their carbon footprint, as an example.

All these sustainability perspectives can be confusing and one needs to find a unifying element. And there is one, Facility Management.

FM has always been about people, place and process. These are our core concerns, virtually everything FM is about is encompassed in them. One can effectively argue that sustainability also falls neatly into these classic elements of FM.

People: Providing the people of the organization with good Indoor Environmental Quality (IEQ) is just the beginning. Amenities that support staff and the community also fall into this category.

Place: The site and building development process are obvious, as is the outfitting and maintaining of the facility over its life cycle. Workplace strategies, standards and policies can also enhance sustainability by lessening the amount of space needed and therefore minimizing the built environment’s impact.

Process: Every FM process from procurement of property and space, mail and food services, maintenance, work order management, conference support, office supplies, transportation and the host of others that FM’s lead have a direct bearing on not only the organization but also the environment. “Quality service” is no longer just about the business of the business, the business of sustainability is also a part of the quality dimension.

FM is where the intersection of the outside world and the inside world occurs. When we deliver quality processes that support the business of the organization we have an impact. When those same processes are optimized in how they affect the world around us then we have much greater impact.

Requiring Landlords to implement good sustainable practices in property management and renovations, requiring suppliers to be ISO 14001 certified, optimizing building operations to minimize energy consumption, implementing workplace strategies that allow work at a distance and reduce car trips are all sound practices. They support the business and lower the business’ impact on natural resources while enhancing the quality of life of employees and the community.

Sustainability. What does it mean? To a large degree it means “FM.”

Alternative Workplace Success Strategies

FM’s and their cohorts are challenged these days to maximize space utilization and functionality while providing their organizations ways to increase headcount, productivity and revenue without adding real estate. Generational shifts in the workforce also contribute to the need to think about the workspace in new ways. These are just a few of the reasons for the current move to what is loosely termed “alternative workplace” solutions. Exactly what that term means varies widely from company to company. Despite the differences in definition, however, there are similarities in successful programs.

Know the Facts: Any time you start changing people’s environment you will meet doubt or outright resistance. That makes it important that you do not start in “unarmed and dangerous” mode. “Unarmed” in this instance means uninformed. Know your numbers and the facts behind them. Measure space allocation and utilization with fine detail. If your organization has a space entitlement policy then factor it into the process as well. First, make sure your numbers are absolutely correct, then know the numbers, then understand them and their implications. Spend time analyzing them to tease out understanding and insights to opportunity.

Build Executive Support: Before going public take your case to the C-Suite. Don’t expect this to be a quick sell, rather, consider it an exercise in patience and education. But when they say “go” be ready to mobilize and move quickly. Executives will want to review your data at a top level and the analysis that led to your conclusions. Once they trust that you’ve done your due diligence correctly you will have their attention. Now point out to them the value and opportunities underutilized assets represent. Expect a discussion about how the company can best take advantage of the opportunity to align real estate with new or emerging strategies. Your role at this point is to feed them information and help them understand the opportunities available, the risks of not proceeding with a project, and the conceptual costs of implementation. Your goal at this stage is to emerge from the C-Suite engagement with a clear mandate and a strong executive sponsor.

Build Influencer Support: Recruit influencers from across the organization to participate in the project. Meet with them individually to share and sell the project vision and charter, bring them together only when each has bought into the plan face to face with you. Use this group to accomplish the continued fact finding and analysis, and to conceptualize early solutions. As an intended side effect they will also advocate for the program among their peers, helping to speed adoption throughout the organization.

Engage Employees: Employees have a vital stake in the outcome and are vital to its acceptance and your success. Make sure you engage them to solicit information about their needs and desires, and to inform them about the project’s goals. Take advantage of this engagement process to sell the benefits of the project such as enhanced collaboration spaces and tools, technology improvements, environmental benefits, and employee amenities. When you use surveys make sure they are thoughtful and be certain to share the results of the surveys on a wide basis. This will support later concept and development work by allowing employees to connect the dots between what they said and what the project delivers. Take advantage of “town hall” and “brown bag” style meetings to share progress along the way and solicit feedback, and to share design responses to the feedback later on so they can see they are really contributing to the evolution of the project.

Discover, Prototype, Pilot: Conceptualize multiple solution options and analyze each. Do not be afraid to be a little edgy with some of your concepts. They may be largely discarded but some ideas will emerge that will eventually be included in the final plan. Use these concepts to socialize options and elicit further feedback. Create pilot projects that build alternative work areas or collaboration zones and let staff experience them on a day to day basis. This process also gives the implementation team a chance to recognize gaps in planning or resources and take action to solve those issues before the large scale project begins.

Build Your Future: When you have made the final decisions then communicate them well and often. Execute with planned precision and make the process as transparent as possible. Allow those not directly engaged to observe the transition as much as possible along the way. Celebrate gains such as new technology, environmental stewardship, improved amenities and a new and better quality workspace along each step. Make a big deal out of it, because it is!

In the end you likely will have improved space efficiency and utilization, shifted to more team like space for some functions, collaboration will increase across the board, and productivity and financials will improve as a result. You will also have demonstrated leadership and enhanced the credibility of FM throughout your company.

Not a bad thing, eh?

A Green Lease Cautionary Tale

Imagine developing a new LEED certified building only to have the investment and competitive future of the property negated by one clause in a tenant’s lease. Think it can’t happen, or that it didn’t happen? Think again.

The anchor tenant in a new building caused a clause to be inserted in the lease which read:

“Landlord shall not be required to impose on Tenant or any other tenant of the Building, requirements for Tenant or other tenants to comply with any certification requirements under the USGBC’s Green Building Rating System or other green or sustainable design elements.”

Sustainable building, LEED certification and social responsibility all continue to be important elements in the commercial property maket sector. Achieving LEED certification and having a good sustainability program enhances market value and competitive positioning. More and more tenants have sustainability as a requirement because they recognize the long term financial and social benefits of doing so.

However, there is an expectation in the marketplace that buildings will improve their sustainability profile over time as new technologies and competitive requirements dictate. Doing so requires capital investment which must be borne in part by tenants, and there’s the rub. In the case referenced above the anchor tenant forced a clause into their lease prohibiting the building from requiring any tenants in the building from complying with any sustainable project requirements. Presumably this stance was taken to insulate the tenant from lease increases associated with capitalization of these projects. Once the clause is in place the building and its owner are effectively held hostage until the clause is renegotiated or the lease terms out. During the time the clause is in effect the building owner alone is responsible for capitalizing all sustainability improvements. Improvement which will benefit tenants as well.

A more rational approach would be to recognize that sustainability improvements over time will benefit both owner and tenants. Instead of negotiating a hostage clause like the one above the parties could have chosen to agree on a governance mechanism that would allow joint participation in decision making and an equitable cost / benefit sharing formula.

For more on this tale see http://www.galleyecocapital.com/2009/12/the-little-clause-that-killed-a-green-building-sale/

Data Center Energy Efficiency: The Savings Are in the Details

We all know that data center energy usage is growing at a pace that far outstrips demand growth in other areas. Gartner’s 13% Combined Annual Growth Rate metric has been in place for several years now and remains constant, while global non-data center engergy consumption growth averages 2.5% each year. As if that weren’t bad enough the cost of energy is soaring at the same time. Data centers, yours and mine included, are part of the problem. New server technology and increasing densities are part of the equation, but they are only a part. And they are a part that most FM’s do not have control over. When it comes to the data center most of us say we are in reactive mode most of the time, responding to IT initiatives that we may not have known about until the trouble calls started coming in. What then, can FM’s do to be ahead of the curve, increase energy efficiency, decrease energy expense and contribute to good environmental stewardship?

Not all of the answers to these questions are difficult or expensive. Even if you are not undertaking a major project you can work the details inside your data centers and likely improve performance in each of these areas.

Chase the Air: Start by making sure air flow efficiency is maximized in order to minimize cooling energy consumption. Walk the floor with a keen eye and look for leaks or improperly placed air grilles. Pay attention to plenum penetrations for piping and cables and make sure they are tightly sealed. Pull cabinets away from the wall and look for openings that may have been allowing air leakage for years. Check the ceiling and do the same. Look everywhere, find the leaks and seal them. All that wasted air flow means an air conditioning unit is running to produce it, and that means wasted energy consumption, not to mention increased maintenance costs.

Investigate the Air: Investing a few engineering dollars to develop Computational Fluid Dynamic (CFD) models of your data center air flow will likely be an eye opening exercise if you haven’t done it in some time. The CFD analysis will show you where your hot spots and cold spots are and illuminate other air flow issues.

Organize the Air: Use the CFD analysis data to prioritize low cost and self-help projects that will improve operational efficiency, such as creating hot and cold aisles that will cool your equipment in the most efficient manner. If the analysis points to bigger issues then use the data and science of the analysis to justify capital investments required to take on more substantial projects.

Data center operations can be thought of as a three legged stool. Mechanical systems that provide air to cool the center, electrical systems that provide power to both the mechanical and computing systems, and lastly the computers themselves. In order to truly maximize data center operations efficiency you will need to apply the same rigorous discipline to each leg, chasing the details and resolving issues where you find them.

Good luck in your search for the holy grail of data centers – infrastructure efficiency. It may be a long and arduous task but the rewards are well worth the effort. Besides, just think of how green the grass will be then!

Lease Green, But Know What It Means

Green leasing is in vogue these days and I suppose that’s a good thing. As with any initiative, however, it is important that it be done right; and that can vary from tenant to tenant and landlord to landlord. Many companies are taking advantage of current economic conditions to leverage concessions from landlords, renegotiating leases to lower rates in exchange for extended terms. More and more frequently green leasing is included in these discussions. For some it may even be a prime goal.

It is important that landlord and tenant agree on what their particular form of green lease will include. For some it may be as basic as assuring that building service providers use green products or that a good recycling program is in place. Others may set standards for common spaces, ventilation, natural light or other elements. Some property owners are investing in green building projects as a way of differentiating themselves in a tough market.

Aside from requiring consensus on what green means in a particular case, a green lease also brings accountability for measuring and reporting performance against the green lease standards. The parties must agree here also. What will be measured? What is the standard? How will it be reported? How often will it be reported?

The lease should also be specific and fair in how projects will be capitalized and benefits allocated. For example, an owner will have a hard time justifying capital to retrofit building energy systems to increase efficiency if the resulting benefit goes primarily to tenants. In short, the lease should be crystal clear on the questions of who is responsible for paying for projects or initiatives, how benefits are shared, tracking mechanisms and how differences of opinion will be resolved.

Tenants who occupy a majority or very large portion of a building have more leverage with the landlord and can help move the green initiative along. If this is you, don’t forget to network with other tenants in the building. Including them in the process will be beneficial to them and you, demonstrate your recognition of their role in the building and help speed acceptance by other tenants and the landlord.

If You Can’t Follow the Moon Then Live in the Cloud

In the July 26 post to this blog I discussed the “follow the moon” strategy being implemented by some data operators. As beneficial as the moon strategy may be, however, it is only viable for organizations which possess both the need and capacitiy for such a distributed infrastructure. Most companies do not fall into that category. What then is a small to mid-size organization to do by way of providing needed computing capacity and application diversity while still supporting a green data initiative? One answer is cloud computing. Reduced to its basics, cloud computing is an infrastructure in which applications and their attendant servers belong to someone else. This “software as a service” (SaaS) approach allows you to access applications that are held remotely while the resulting files are maintained locally. Your subscription fee for the service then pays for not only the application license but also your proscribed share of development and operating costs.

David Bradshaw, International Data Corporation research manager for European software as a service, says "… it is clear that SaaS has become accepted by the mainstream of user organizations around Europe. This will result in continued strong growth, making SaaS a rising star in a very largely depressed European software market." He goes on to note that that the overall European SaaS market will grow from €237 million in 2004 to a projected €6,005 million in 2013 (as of April 2009).

Here in the U.S. we see a similar pattern. One noteable market segment that is shifting to cloud computing is the education sector. In some cases entire college districts or systems are converting to a cloud architecture, allowing the system or students to purchase netbook computers at a typical cost of $200 USD instead of something ten times that amount. This is a good example of a disbursed enterprise with diverse computing needs. The cloud solution allows standardization on an affordable computing platform with access to a wide array of software.

In a small business context the solution may be as simple as Google Apps, Yahoo’s Zimbra or one of the other products of similar ilk. Again, this allows you access to a wide variety of software at a fraction of the cost of owning the software, shifts responsibility for software updates and maintenance to the provider, and allows you the option of downsizing the cost of your computing hardware.

Following the moon isn’t for everybody and neither is cloud computing, but the cloud offers substantial benefit to a much wider set of enterprises. Software diversity, cost avoidance, time saved supporting your software and other advantages are all make the cloud an attractive solution.

Report on IFMA WorldWorkplace 2009

As you no doubt noted from my last post, there was no shortage of fun in Orlando. But, we also networked, sat through numerous educational sessions and walked our way through the exhibition floor learning about new products and technologies. Although the event was smaller this year (no surprise there) the content quality that I experienced seemed to have improved over my last visit to WorldWorkplace. Kudos to the IFMA team, volunteers and especially to those who took the time to prepare and present information that FM practitioners need to improve our own quality and outcomes.

As you might suspect renewable energy, LEED, and all other things green were in prominence. It was appropriate then that Andrew Winston, author of Green to Gold present the opening keynote address to set the tone. In some regard this felt a bit like “preaching to the choir” since FM’s are keenly attuned to the issue of environmental responsibility. Still, there were good reminders and insights that may help you make the green case in your workplace. Here are a few attention getters from Andrew:

75% of MBA students believe that Corporate Social Responsibility is a requirement.

Every year China builds the equivalent of 31 Manhattan’s – not one year, every year.

Being “lean” is no longer just smart, it is becoming a necessity as resources are diverted to developing and emerging economies.

The U.S. automobile industry didn’t collapse so much because of the credit crunch as to market forces. Companies like Honda, Nissan and Subaru all grew year over year because they had the right energy efficient products.

Toyota’s Prius is the most successful green product ever (to date).

In another session Dave Alpert focused on recent and developing environmental legislation in California that will directly affect FM’s operating in the state. Assembly Bill (AB) 32 for example requires renewable energy be a part of every development project. Exactly what that means is yet to be determined, but the message is clear. Renewable energy is a key element of California’s forward strategy. AB113, modeled after European Union regulations will require the monitoring and reporting of energy use by large facilities. And in Dave’s and multiple other presentations it is clear that Cap and Trade legislation is now presumed. Some companies are investing in green technologies to lean new projects underway now in anticipation, spending now to create a new revenue stream when Cap and Trade legislation becomes law.

Those are just a few of the many highlights. To those of you who missed the trip we’re sorry you weren’t there and hope to see you next year in Atlanta.

Green Bites to Start the Week

Energy storage gets its own agency http://www.technologyreview.com/blog/energy/24192/

Helix to power cell phone towers http://www.greendiary.com/entry/helix-to-wind-power-cell-phone-towers-in-us-and-africa/

Who knew California has money? http://www.greenbiz.com/news/2009/09/29/california-fund-largest-energy-efficiency-effort-us

I knew I need to visit Australia! http://www.inhabitat.com/2009/10/05/largest-solar-powered-footbridge-opens-in-brisbane/

Really small things could have big impact http://www.inhabitat.com/2009/09/21/carbon-nanotubes-could-create-better-solar-cells/

If we can’t turn water into fuel then why not water bottles? http://www.inhabitat.com/2009/09/16/new-envion-facility-turns-plastic-waste-into-10barrel-fuel/

Smart grid, smart choice http://www.environmentalleader.com/2009/10/05/smart-grid-projects-get-ready-to-roll-in-the-u-s-uae/

Vermont (among others) does the right thing http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/10/02/state/n143852D23.DTL&type=science

Solar roofs without the ugly http://www.benzinga.com/press-releases/n20500/dow-tm-powerhouse-tm-solar-shingle-unveiled-groundbreaking-new-technology-for-

Soap Box Derby goes green? http://www.aer-online.com/e107_plugins/content/content.php?content.2800

So you wanna race ‘green’ cars huh? http://www.koenigsegg.com/pressreleases.php?view=16