Posted on 06/29/2015

 Hidden Costs of Deferred Maintenance

Not all facility repairs and capital upgrades can be completed immediately.

Further, you may be forced to put off spending money on a repair – even if you know it should be taken of – because of budget constraints. You hope it can get by for another week, another quarter, another year.

Depending on the system, where it's located, and the use of the building it's in, the strategy may be to run the system to failure – and that may be fine for systems that aren’t mission-critical or where the failure doesn’t impact other parts of the building. But what about deferring maintenance on systems where there could be a broader impact?

This impact is where the value of the deferred maintenance can be much higher than just the identified repair. For example, let's say you’ve identified a roof repair that needs to be made, but decide to wait due to budget pressure. A few months go by, and then the roof starts leaking. The leak is in a place that isn’t readily noticed, and a few more months go by. Then, one of your maintenance team notices that the floor is wet in a part of the building. Further investigation shows that the roof has been leaking for some time, right where the repairs should have been done.

Now, as the team starts to look at fixing the roof, they find all sorts of surprises. First, there's an emergency repair to fix the roof. Then, there's some damage to the sub-roofing and the insulation needs to be replaced. Downstairs, below the leak, the walls are soft and the ceiling is stained, meaning both must be replaced. Opening the wall shows further damage, and even the beginning of mold. By deferring the repair of a section of the roof, the cost has skyrocketed 10 to 20 times (or more) than what the original cost would have been.

Another example comes from a customer situation that could have been a disaster if it hadn’t been caught before any serious consequences occurred. A bank was renovating one of its key buildings and had some fairly old equipment, including long-past useful electrical transformers. But the transformers appeared to be working well, so they were ignored while other repairs were completed, including a bathroom renovation. 

Using the Capital Budget and Ranking Module in VFA.facility®, the building's capital needs were ranked, including the consequence of failure, and further including those completed in the past year. The customer identified that the transformers should have been at the top of the list, rather than being deferred. Replacing the transformers wasn’t cheap – it cost several hundred thousand dollars. But what no one had taken into account when deferring this maintenance was that the building contained the main trading floor for the bank. The failure of one transformer would have shut down the trading floor. If that had happened, the cost wouldn't just be replacing the transformer, but also the millions of dollars for every minute the trading floor was down. 

Using a tool that prioritizes capital repairs and replacements can help you identify the risks associated with deferring maintenance and avoiding significant penalties for not completing maintenance and repair tasks on time.