5 Hidden costs of postponing maintenance

For every dollar saved by deferring maintenance, there is a four dollar increase in future capital renewal costs.

deferred maintenance

Every year, billions of dollars in necessary maintenance repairs to facility assets are deferred. Insufficient funding is the most frequently cited reason for postponing maintenance, followed closely by understaffing. But there are other factors.

Managers and maintenance personnel may not fully understand all of the tasks required to properly maintain building assets. The assets may have been installed in a way that makes maintenance difficult or impossible. And those who budget may not understand the full cost of postponing maintenance.

Organizational studies show that, on average, for every dollar “saved” by deferring maintenance, there is a four dollar increase in future capital renewal costs. These are the direct costs for that specific asset. There are additional indirect costs that can have an even greater impact. Over the life of this asset, these additional costs can add up to more than 15 times what would have been spent on maintenance had it not been deferred.

If managers are to succeed in changing the culture that drives maintenance deferral, they must present a case that outlines all the costs of deferred maintenance, from emergency repairs to collateral damage.

Emergency repairs

The ideal maintenance program is a proactive one: maintenance personnel perform necessary tasks as needed. And when the asset approaches the end of its useful life, its replacement is scheduled. But deferring maintenance changes the process from proactive to reactive.

With reactive maintenance, the asset chooses when it needs emergency service or a total replacement. This can lead to disruptions during peak occupancy periods or complete closures of parts of the facility. When this happens, the maintenance department is under pressure to resolve the problem, even if it requires the use of overtime for maintenance personnel or contracting with outside services.

If parts need to be ordered or the asset needs to be completely replaced, there will be additional expenses that will need to be added to the cost. Delays due to the availability of replacement parts or assets may necessitate relocating operations to another area of ​​the facility. In the event of failure of an HVAC or similar system, temporary replacement systems may need to be put in place at an additional cost. When the asset controls the timing of its repair or replacement, the costs will always be higher and there will be disruption.

Shorter asset life

All real estate assets have a finite life. While there are many factors that affect the actual life of a particular application, one of the most important is how well it is maintained. Without proper maintenance, the life of virtually all plant assets will be shortened.

For example, chipping woodwork paint on the exterior of a building will allow water to penetrate the wood, which will lead to cracks, cracks and rotting. Not regularly inspecting the trims and extending the paint cycle over several years can save money today, but it will only cause more damage. Eventually, the damage will require the wood to be replaced.

The same thinking applies to mechanical building systems, where a very common practice is reactive or continuous maintenance. Consider building HVAC and domestic water pumping systems. A typical centrifugal pump in these applications requires periodic lubrication, seal inspection, vibration monitoring, alignment checks, and other routine maintenance tasks. A well-maintained centrifugal pump can easily operate for 20-30 years. That same pump in down-grade maintenance practices can fail in as little as five years.

Reduced equipment efficiency

The impact on energy efficiency resulting from the postponement of maintenance is most visible with the mechanical systems of the building. Proper maintenance of these systems is particularly important in order to minimize energy costs.

For example, if boilers are to operate at peak efficiency, a number of maintenance tasks must be performed on a regular basis. The boiler should be adjusted regularly to ensure that the correct amount of air is introduced. Too little air and the fuel is not fully oxidized. Too much air and heat are lost in the chimney.

Boilers also require periodic cleaning to remove soot from the hearth of the boiler tubes or heat exchanger. Likewise, the water side of the boiler should be cleaned to prevent scale build-up. Soot and scale both interfere with heat transfer inside the boiler, reducing its efficiency. Skipping even an annual cleaning can reduce a boiler’s operating efficiency by two to three percent.

Safety and health risks

Deferring the maintenance of a wide range of real estate assets can be detrimental to employees and visitors. Some are obvious, like faulty floor tiles that present a tripping hazard. Others may be less obvious, such as mold buildup behind water damaged walls. Failure or improper cleaning of building HVAC systems can result in the build-up of mold and pathogens in the systems which are then distributed throughout the building. Even simple things, like improperly adjusted door closers, can cause injury if the door slams on a person’s hand.

A poor work environment due to poor air quality or frequent asset failures will adversely affect employee productivity. Visitors will also see and feel these shortcomings, and the reputation of the organization will be tarnished.

Deferred maintenance can also cause compliance issues with local code and regulatory authorities. One-off inspections or complaints from building occupants can lead to failed compliance inspections, fines and a negative public perception. In more serious cases, they can lead to mandatory shutdowns of the installation until the elements have been corrected.

Collateral damage

The impact of deferred maintenance is not limited to this asset. Often it extends far beyond. Consider the situation of a failing roof. The roof has been leaking and has been in need of replacement for some time, but funds are not available. Maintenance personnel therefore perform corrective actions in areas where leaks are reported. But despite their best efforts, more leaks will occur and some may go unreported. Additional repairs are being made, and although the leaks may have been temporarily stopped, they will have caused collateral damage.

Water damage to roof insulation and decking may now require section replacement. Ceiling and walls may now need to be repaired or replaced due to water damage. Structural elements exposed to water may have corrosion or decay damage requiring repair. Water damaged lighting fixtures and wiring will need to be replaced.

Collateral damage can turn a single maintenance problem into a nightmare. Not only will the organization have to pay to fix the original maintenance problem, it will have to pay to repair or replace all other damaged assets, and it will have to do so urgently, which will further increase the costs. If the collateral damage is severe enough or extensive enough, managers can lose use of the affected space for an extended period while materials are ordered and repairs made, further increasing costs.

Avoid the trap of deferred maintenance

For facility managers to succeed in reducing the total cost of deferred maintenance, they must build and present their case to those who control their budget. They should present strong evidence that supports budgeting for maintenance projects today, rather than postponing them to a future date.

How serious is the deferred maintenance problem in your facility? The numbers speak for themselves. Remember that you are competing with other departments for a limited amount of funds. Begin with an assessment of the installation, including the mechanical and electrical systems, the building envelope, the interior building structures and finishes, and the job site. The facility assessment should assess the condition of each asset and identify any deficiencies. Assess the critical nature of the asset and the severity of each impairment. Finally, establish a budget for its repair or replacement, as well as an estimated time frame for the work.

It is not enough to have a list of necessary repairs and expected costs. In most cases, there will be so many items and they will be so expensive that those budgeting may choose to ignore them, thinking the upkeep is just a wolf’s cry. To help present your case, give them examples from the past that show how delaying a particular repair or replacement action resulted in additional repair costs, downtime, or compromised safety. Presenting solid data that shows the extent of the problem and its impact on the organization in the past will strengthen your argument.

James Piper, Ph.D., PE, is a writer and consultant with over 35 years of experience in facilities management. He contributes to the drafting of Building Operating Management.

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