Due Diligence Process

Business Unit(s): 
Facility Consulting

PHASE I - Validate Business Functionality

In this initial phase, we perform a Due Diligence Study of a selected building based on both the current and long-term functional purposes of the intended business operation. During this stage, the FM Solutions team develops a comprehensive understanding of the general functions that will be going into the building for the proposed business operations. Space utilization options and alternate concepts are considered based on our prior experience with best practices studies and benchmarking data. We also address future flexibility requirements, redundancy issues, occupancy type, target usage patterns, etc.

The major areas that are addressed include:

  1. Pass / Fail issues related to the functions going in the building

  2. Flexibility issues related to functions going in the building

  3. Deficiency report based upon observation and test fit analysis

  4. Non-invasive observations of building and systems

  5. System descriptions and capacity analysis based upon our understanding of probable functions going into the building

  6. Obstacles that may be encountered based upon the proposed functions going into the building

  7. Any potential conflicts and or violations with code/municipal-zoning issues

  8. his phase provides a realistic assessment of whether the facility being

This phase provides a realistic assessment of whether the facility being evaluated will likely accommodate the intended use and if any significant obstacles would restrict or limit the efficient utilization. In addition, a set of operational scenario studies can be developed to identify the maximum flexibility of the existing site in accommodating business plan and requirement revisions.

PHASE II - Evaluate Operational Integrity

In this phase we perform a study to determine if the selected building has structural integrity and adequate mechanical/electrical system capacity to support the intended business operations. During this stage, knowing the functions going into the building is helpful, but not an absolute requirement.

This study can be performed at various levels of detail that can be aligned to fit the specific needs and/or concerns of the potential building owner. It can also be adjusted based on actual findings/opinions that result from the initial observations. This phase can include invasive and non-invasive approaches. Invasive approaches include contractors and associated testing equipment. Noninvasive approaches include observations by Certified Facility Mangers, Architects and/or Engineers. The intent of both approaches is to assure adequate operations within anticipated parameters. Although invasive approaches are more reliable approaches, they are also more expensive. Most owners begin with the non-invasive approach and expand the study, if justified. The potential for flexible expansion may also be explored based on the dynamics of the business.

The major areas that are minimally addressed include:

  1. Examination of existing architectural, structural, mechanical, electrical, plumbing systems through document review, field observation/study and available public and private records.

  2. Operational history and metrics (if available)

  3. Code and Ordinance analysis.

  4. Equipment Warranty status (if available)

  5. Written descriptions of equipment systems and construction reviewed

  6. Pictures of items reviewed to assist in identification and understanding

  7. Identification of issues/deficiencies/problem areas.

  8. Short impact statements of the deficiencies as they relate to future use or renovations.

Optional Items may also be added:

  1. Capacitance and/or infrared testing of roof

  2. Core cut of roof system and patch back

  3. Infrared testing of Electrical equipment

  4. Deficiency Report based upon testing

  5. Vibration analysis

  6. Indoor air testing

The intent of this phase is to provide a meaningful evaluation of the overall condition of the selected facility along with an identification of operational issues that should be corrected prior to acquisition. In addition, an evaluation of the facilities expansion potential can be performed.

PHASE III - Develop Economic Parameters

In this phase, we perform a Due Diligence Study for developing tactical and strategic budget plans. These realistic forecasts are based on our extensive benchmarking database that has been collected and developed over the last 15 years. Specific projections for the selected building are aligned within the observations from the previous phases entitled “Business Functionality” and “Operational Integrity” Studies.

Utilizing the proposed business operations plan for the facility, a target Operations and Maintenance budget is developed along with a forecast of capital renewal requirements. This study phase can also be used to evaluate opportunities to upgrade existing equipment/systems and the cost benefit trade offs.

The major areas that are addressed include:

  1. A budgetary program for the building and associated equipment that includes a capital renewal plan and Operations and Maintenance budget based on 5-10-15-20 year intervals.

  2. A report of current deficiencies based upon the life cycle of various systems consistent with our benchmarking data. This incorporates the previously performed “Functional and Operational” Due Diligence Studies.

  3. A Facility Condition Index (FCI) for communication and measurement purposes.

This phase pulls together all of the prior observations into a useful economic forecast and measurement matrices for use during the future operation of the facility. The information can be provided in a hard copy report, on a web-based product or as self-contained software. In addition, an evaluation of upgrade investments and an analysis of efficiency improvements can be developed to assist with prioritizing future operational decisions.