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There are two common misconceptions about FCI that are tied to current replacement values. The first is that FCI represents the cost of constructing the exact asset with the materials and methods that currently make up the asset. To build actual cost estimates for NPS's 70,000-plus assets with that level of detail would not have been possible or logical. In actuality, current replacement values are meant to provide a consistent process for generating FCIs that are comparable, but they are not values that should be used at the park level to plan new construction activities.
The second misconception is that FCI cannot be greater than 1.0. Individual cost estimates that are based on condition assessments or on other planning activities are significantly affected by working in an existing structure. For NPS, this scenario is common for historic assets. If an asset requires replacement of several of its systems and components, but the work is taking place within the confines of the existing structure and without the efficiencies of new construction, the unit cost for replacement of the system can be increased significantly from the unit cost associated with new construction. And, even if current replacement values were to provide a detailed constructed cost based on the individual asset's materials, components, and methods, it is not that difficult to generate a numerator (accurate repair and replacement costs) that is greater than the denominator (current replacement value). With a current replacement value based on unit costs, an FCI over 1.0 is even more likely to occur for assets that are in poor condition.
Once the condition data for some of the most prominent categories of asset types was developed and FCI calculated for those assets, it became apparent that the industry-standard scale of good, fair, and poor would categorize average NPS assets as being in poor condition. For this reason, FCI and the good-fair-poor scale did not provide enough granularity. NPS realized that additional criteria were required to optimize asset management investment.
Trends for the facility condition index for some of the major asset types in the National Park Service portfolio.
Standardized Current Replacement Value Calculations Make Facility Condition Index More Effective