Image of a maintenance or facility manager reviewing incoming maintenance tasks on a computer
Image of a maintenance or facility manager reviewing incoming maintenance tasks on a computer

Deferred Maintenance

What is deferred maintenance? What are the pros and cons? How can you reduce your deferred maintenance backlog? In this guide, we’ll be covering everything you need to know about deferred maintenance.

What is deferred maintenance?

Simply put, deferred maintenance is any scheduled maintenance or repair that is delayed due to limited resources.

Formal definition

The Federal Accounting Standards Advisory Board (FASAB) defines deferred maintenance like this:

“Deferred maintenance and repairs (DM&R) are maintenance and repairs † that were not performed when they should have been or were scheduled to be and which are put off or delayed for a future period.”

Maintenance and repairs are activities directed toward keeping fixed assets in an acceptable condition. Activities include preventive maintenance; replacement of parts, systems, or components; and other activities needed to preserve or maintain the asset. Maintenance and repairs, as distinguished from capital improvements, exclude activities directed towards expanding the capacity of an asset or otherwise upgrade.

The deferred maintenance workflow

Anytime a maintenance task is due (routine maintenance, emergency repairs, capital renewal, etc.), the facility leader will need to decide if it will get scheduled right away or placed into a deferred maintenance backlog. A maintenance activity that is delayed to the backlog is what’s known as deferred maintenance.

deferred maintenance workflow flowchart showing preventive maintenance, reactive maintenance, and capital renewals on the left flowing into a box labeled "enough resources and bandwidth" then split into two boxes, "yes, schedule maintenance work" and "no, add task to maintenance backlog"

Deferred maintenance vs. preventive maintenance vs. reactive maintenance

It’s important to distinguish between deferred maintenance and two other commonly used maintenance types, preventive and reactive.

  • Preventive maintenance describes work on an asset before it encounters maintenance issues to maintain functionality.
  • Reactive maintenance describes work on an asset after it encounters maintenance issues to restore functionality.
  • Deferred maintenance can describe either preventive or reactive maintenance that is not completed when necessary.

Preventive maintenance is more commonly deferred, as it doesn’t have any short-term consequences. Still, reactive maintenance can also be deferred if the asset in need of repair is of low importance or the repair hasn’t completely halted functionality.

Why is maintenance often deferred?

While the broad phrase “limited resources” is accurate, it’s helpful to break these limitations into resource types. Maintenance can be deferred due to any combination of the following resources:

Budget

The most common limiting resource is the maintenance budget. If an organization doesn’t have adequate funding to repair or maintain an asset, it can be deferred to save money and allocate funding to a different critical asset or building maintenance project.

A budget limitation is often also the leading cause for shortages in other resources.

Labor

Another common limitation is being understaffed. In organizations with more facilities than the team can manage, decisions must be made and maintenance projects are often delayed.

Skill

Whenever specialized maintenance tasks arise that go beyond the qualifications or experience of the maintenance team, they can be added to the deferred maintenance list until the organization has the means to outsource the resolution.

Material

If a maintenance task requires components, supplies, spare parts, or some other form of inventory to complete and they are not readily available, there’s nothing all the money and talent in the world can do to resolve the task. Until those materials arrive, the maintenance task will end up in the backlog.

Visibility

If no one spots necessary maintenance issues, they won’t get resolved but visibility goes beyond just this obvious example. Limited visibility can also mean poor record-keeping, leading to a lapse in scheduled maintenance or misplaced work orders. It’s not just enough that someone notices the problem; the right person must notice the problem.

Priority

When other resources are limited, leadership has to make difficult decisions regarding which maintenance issues are completed and which tasks end up in the deferred maintenance backlog. However, priority can be hard to gauge for leadership that isn’t involved in the day-to-day operations. This is often the case when making business proposals to financial teams.

To avoid deferring necessary maintenance tasks, they must be presented with clear ROI metrics. This way, leadership can make the most informed decision possible.

What are the risks associated with deferred maintenance?

Deferred maintenance can help relieve resource restrictions in the short term but it’s important to resolve these resource constraints quickly and not let deferred maintenance go unaddressed. That said, there are many potential consequences of ongoing deferred maintenance.

Financial costs

This may seem counter-intuitive because, in the short term, deferred maintenance can free up funding and lower expenses. Still, research has shown that every $1 saved short term due to deferred maintenance costs the organization $4 long term (1).

Graph showing the cost over time of deferred maintenance. There are short term savings at first but 4 times the long term expenses

The reason the overall cost is higher in the long term is 3-fold:

  1. Delayed maintenance projects often create a chain reaction of more issues. In fact, deferred maintenance compounds at 7% every year (2), and the repairs themselves will be more expensive.
  2. An asset or infrastructure that is not maintained properly is less efficient, leading to increased energy costs and lowered output from equipment and people within the organization.
  3. Neglected regular maintenance shortens asset or infrastructure lifespans, causing you to replace or repair it earlier than you would have otherwise.
Sources

1 Pacific Partners Consulting Group

2 Gridium

Liability and safety

Ignoring maintenance work is a liability. Worst case scenario, if someone is injured due to neglected necessary maintenance, it will be a very costly situation for your organization (not to mention the importance of protecting your occupant’s well-being).

Even without having a documented incident, fines or penalties resulting from a failure to meet compliance regulations is incentive enough to keep the deferred maintenance on critical systems to a minimum.

Image and reputation

Occupants in your facility, staff or otherwise, will notice if infrastructure or assets are being neglected. Subconsciously, it portrays your organization on the decline. This problem is even worse if these neglected maintenance tasks are actively causing discomfort or a failure to meet expectations.

How do you stop deferred maintenance?

Due to its compounding effect, getting out from under a large backlog of deferred maintenance projects can be challenging. If you’re looking to reduce deferred maintenance in your maintenance management processes, here are a few tips.

Petition for additional resources

Cutting off deferred maintenance at the source means having the resources on hand (budget, staff, training, materials) to address incoming work right away rather than send it to the backlog. Often, acquiring these resources or adequate funding can be challenging and will likely require some presentation of reporting & analytics from either excel documents or CMMS software to support your request.

Tip for success:

Ultimately what you want to demonstrate is the ROI of upfront investment in either budget, staffing, training, or materials. If you can compare historical costs resulting from these resource deficiencies compared with estimated cost savings, it makes it much more compelling for leadership groups to approve the petition.

Prioritize and reduce your backlog

Breaking the cycle of deferred maintenance is much like getting out of debt. Maintenance tasks in your backlog accumulate long-term costs, similar to compounding interest on a loan. To break the cycle, it takes identifying easy-to-resolve tasks with the largest impacts.

Tip for success:

Create a backlog list that allows you to start organizing tasks by their ROI. List out any associated cost to resolve the task (labor, parts, time, etc.) and compare that with the benefits of having that task resolved (increased efficiency, reduced risk, freed up resources, etc.). Once you have that list, rank the items by ROI to see which items need prioritization over others.

Learn more about preventive maintenance.

Getting out ahead of your deferred maintenance backlog and into effective preventive maintenance gives you control over how you are investing resources, minimizes overall cost and risk, and leads to a more productive organization. Setting a proactive schedule through preventive maintenance software is a reliable way to set a sustainable maintenance routine.

Learn more about how you can become more proactive with our free preventive maintenance course.