Accession Number:

ADA199968

Title:

Appraisal of the Army's Facilities: Managerial Implications, Value Measures, and Computational Methods

Descriptive Note:

Final rept.

Corporate Author:

CONSTRUCTION ENGINEERING RESEARCH LAB (ARMY) CHAMPAIGN IL

Personal Author(s):

Report Date:

1988-09-01

Pagination or Media Count:

32.0

Abstract:

Concern has developed that the current way of determining the replacement value of Army facilities leads to an underestimation of their value. This study examines the managerial implications of valuation and evaluates some appraisal techniques in light of the Armys evaluation needs. Recommendations are made regarding the development of a valuation tool to meet facility managers needs. An apparent consensus among professional appraisers is that there is neither a single correct value measure nor a universally applicable method of facility valuation. Both the measure and the computation method must be consistent with the logic behind the purpose for which they will be used. Four value measures with potential application in the Army were identified and assessed 1 replacement cost RC, 2 duplication reproduction cost DC, 3 optimal facility cost OFC, and 4 value in use VU. Five methods can be used to compute these value measures indexation, unit costing, regression, proportionment, and expert assessment. The specific alternatives recommended in this study, in order of priority, are 1 compute DC using a formula given in Chapter 4 Eq 5 2 develop an expert system to estimate OFC 3 compute RC using OFC as the base. A comprehensive effort by the Army to develop these methods would be beneficial in explaining the evolution of facilities cost over time, improving life cycle cost analyses, and providing effective management for the Armys huge inventory of facilities.

Subject Categories:

  • Administration and Management

Distribution Statement:

APPROVED FOR PUBLIC RELEASE