Obviously, the best time to assure the best value for a new construction project is well before shovels hit the ground. But where are those opportunities for achieving that value? We recently prepared a presentation based on our Maryland experience to demonstrate the various ways projects are tested, adjusted, and scrutinized to make sure they're both effective and efficient. I apologize in advance for the numerous Maryland acronyms. Here's a synopsis:
TYPICAL PROJECT TRACK: OVERVIEW
Most projects ultimately seen by the Board as part of the USM Capital Program follow a similar track to their inclusion in the CIP. While this diagram is highly simplified as a linear process from left to right, the reality is that it can be extremely organic and involve multiple inputs, iterations, participation exercises, and opportunities for feedback.
There are several steps taken, including a variety of inputs and checks along the way from a general need expressed by a campus department to a funded project in design. Inputs and checks are both based in policies and best practices (top) as well as quantitative checks against financial and other data (bottom).
We’ll discuss this diagram in more detail below, but you’ll note that some of these steps occur at the campus level. Others occur at the Board level, and then the State level; and, ultimately, the members of the project team (USM project managers and architects/engineers working with campus representatives) become heavily involved.
In every case, the project concept is evaluated and revised to achieve the best value—maximizing the effectiveness of the solution while minimizing the impact of cost.
REVIEW OF CAMPUS-LEVEL ACTIVITIES
Needs expressed by a college or department rise through the campus process first as intended solutions or ideas for addressing that need. What follows is very generalized, but the first major check is against the campus Strategic Plan, a document intended to:
- Detail the mission and goals of the institution
- Form the basis for the role of the institution moving forward
- Act as a guide for other planning activities, like (in this case) Facilities Master Plan
For example, an idea or proposal for new research space for a particular department on campus would be weighed against statements in the Strategic Plan about building research capacity.
Once a potential solution is deemed to be consistent with the Strategic Plan, the input of potential users of the proposed new (or renovated) facility is sought to help develop the concept further for consideration by the campus in general. The project concept is evaluated in the context of
- Benchmarks or similar projects
- Commonly used technique for assessing validity of proposals
- DBM considers comparisons when approving facility programs (types of space, sizes, cost, etc.)
- The Facilities Master Plan
- Existing space already available
- General space guidelines for the type of facility being considered
- Financial resources available to the campus and/or the possibility of State funding
This process can take several years and iterations to
fully develop and, following input from campus facilities planners and (per our
USM Capital Budget Instructions) a check of the proposed cost from the Service
Center, the “concept” becomes a formal capital request that is
considered by the institution’s president to be included as part of the
prioritized list of project requests submitted annually for consideration by
the Chancellor and Board of Regents for funding (and or submission to the State
CIP).
REVIEW OF BOARD, STATE, AND PROJECT TEAM ACTIVITIES
Requests submitted to the USM Office come as priority lists of projects. There are two separate lists, one for State funding consideration (in the Governor’s CIP) and one for consideration in the System-Funded Construction Program (SFCP). For simplicity, we’ll discuss primarily the process for State requests, but I’ll make note of any specific steps related primarily to the SFCP.
The first test of the project requests is one the State requires: weighing the proposal against available resources. On the State side, this means paring down many priority requests that come from the institutions to a small number that are either already in the Governor’s CIP or would be considered the logical “next” priority needs for State funding consideration. (On the System-funded side, this is where the affordability of a particular request—given an institution’s resources and the fiscal health of its auxiliary operations—is used to reduce a larger list of proposals down to a smaller list of projects that will move forward in the process.
At this point, the project Facility Program becomes critical to the process. If it hasn’t been prepared and submitted already, a formal Facility Program is required (by law) for the project to continue in the State funding process. (Formal programs are not required for SFCP or auxiliary-funded projects, but a similar document can be extremely informative and is strongly recommended.) The process of developing a Facility Program follows a prescribed process with several required topics and sections.
Program writers (typically a campus Facilities Officer and/or an outside architectural firm), working with extensive groups of campus representatives to flesh out the details of a project and weigh a large amount of data. These data are presented in the program document to:
- Provide a description for designers (broad space relationships and detailed space requirements)
- Help justify the project proposal for funding to decision-makers
- Identifying facilities problem to be resolved
- Highlight the consequences of not correcting problem (impacts on operation or service delivery)
- Provide strong quantitative data support of the proposal (e.g., performance measures, guidelines, standards, revenue), both historical and projected
- Review alternative scenarios and comparative data with other projects
- Demonstrate validity and justification for recommended proposal
The development of a project program and its subsequent review process by the USM and the State (Department of Budget & Management) can take as long as one to two years or more. The State, in fact, has strict deadlines for submission of a program that occur well ahead of any funding consideration in the State CIP. It is during this process that the project concept undergoes the most intense scrutiny toward the development of a final project scope that is fully justified and provides the best value.
Key data points used in developing a project program and reviewing it for approval include:
- Enrollment and Strategic Plan data
- Approved State Space Guidelines for various space categories
- Metrics of space availability, utilization, and occupancy, including space surplus and deficiency reports (based on the State space guidelines, see note below)
- Estimated replacement and renovation costs for campus space, and estimated deferred maintenance backlog
Note about Space Guidelines. In planning buildings, institutions evaluate their space needs in certain categories (e.g., classroom and teaching labs for a new science building) and propose a new facility that accommodates their projected needs in those areas, as well as providing other desired amenities for students and faculty. The limiting factor in terms of overall size is often what is deemed "affordable" to the State, but DBM also compares space guidelines data to be sure any new space is justified. So what are these guidelines? And how are they used?
There are a variety of formulas established by the State for various segments of higher education to calculate the space an institution "should" have (in a number of categories), based on standard guidelines. There are 30 different categories of space guidelines. The calculations can be somewhat complex, and the standards vary by type and size of institution, but here are some simplified examples:
Teaching Labs 4 to 7 NASF per (Lab) WSCH
Research Labs 650 to 1,000 NASF per Module for PhD and Research Programs
Faculty Offices 1.66 NASF per FTE Faculty or Staff
*NASF=Net Assignable Square Feet; WSCH=Weekly Student Contact Hour
The guidelines are reviewed and revised periodically. The most recent change focused on research space. The State recently announced they’ll soon begin a new review, this time focused on helping prepare institutions for the quick pivot in use of facilities should it be necessary to address a future pandemic-like situation.
Each year institutions prepare comprehensive reports through the Space Guidelines Application Program (SGAP) and submit updated calculations for various space types, as well as an updated inventory of space (by category). These reports are, in turn, provided to MHEC, DBM and DLS. The USM Office also prepares a two-page summary that includes actual inventory and projected inventory in major academic categories, and an estimate of "surplus" or "deficit" (current and projected) based on the accepted guidelines.
Links and examples are provided in the REFERENCES section below. Copies of sample SGAP Reports, SGAP preparation Instructions, and annual Space Inventory Summaries can be obtained from the USM Office of Capital Planning upon request.
Once a facility program is approved, the project can then be considered for the Governor’s CIP. The process of selecting which few projects will be recommended for State funding is the Board-driven “USM Capital Budgeting Process” with which the Board is familiar. The annual process culminates in the approval of a new five-year capital request to the State (CIP) and a five year System-Funded Construction Program (SFCP).
Once funded for design and following the award of a design contract, the project team (including the architect/engineer and the user group) complete a specialized review of the scope of the project called a Program Verification. Typically, the process involves a series of meetings to review room diagrams and project requirements outlined in the program, discussing the function of spaces, and confirming the information contained in the original program. The process can also involve confirming that space allocations contained within the existing program are adequate and seem to meet the needs of each space.
Information regarding the estimated project cost and scope is shared with DBM after the completion of each design phase. This ensures that the intended (and budgeted) scope of the project has not changed since the project was funded.
Once the first estimates are prepared during the design process (and perhaps multiple times during the process), the potential construction cost of the project as it is designed is compared with the available budget. Should there be insufficient funding to do the intended work, the project team (again, with the user group) will undertake a Value Engineering process to adjust the scope/budget of the project by suggesting changes in materials, methods, or project scope to bring the cost within budget.
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Note: Links are immediately available via the websites listed.
Documents are available from the USM Office of Capital Planning.
Link: USM Strategic Plan
https://www.usmd.edu/strategic-plan/USM-Strategic-Plan-Outline.pdf
Document Available: Benchmarking Similar Projects
Example of a comparison chart showing costs for USM projects against similar projects at other institutions
Link: Facilities Master Plan Guide
http://www.usmd.edu/usm/sustainability/docs/MasterPlanGuide.pdf
Link: Example of campus-specific space policies--College Park’s Classroom Master Plan
https://faculty.umd.edu/media/209/download
Link: Available Resources (Reference Governor’s CIP)
https://dbm.maryland.gov/budget/Documents/capbudget/Proposed/FY2023-CapitalBudgetVolume.pdf
Link: Facilities Program Required for State Funding
https://law.justia.com/codes/maryland/2005/gsf/3-602.html
Link: State Facilities Programming Guide (listing detailed requirements)
https://dbm.maryland.gov/budget/Documents/capbudget/Instructions/facilityprogmanual.pdf
Link: Example--Facility Program for Iribe Building (College Park); space data starts page 229
http://www.bidnet.com/bneattachments?/330393641.pdf
Documents Available related to Annual Reporting of Space Data
Annual Space Utilization and Occupancy Report
Annual Space Surplus/Deficit Report
Annual Replacement and Renovation Cost Comparisons
Annual Deferred Maintenance and Backlog Reporting
Link: MHEC Space Guidelines Study and Confirmation
https://mhec.maryland.gov/publications/Documents/Finance/MDCipCapFacRep.pdf
Link: Key space metrics for USM Institutions
https://facilities.umd.edu/sites/default/files/pdf/space1999.pdf
Link: Revised Research Space Guidelines for Maryland Higher Education
http://dlslibrary.state.md.us/publications/JCR/2016/2016_246.pdf
Link: Statewide Study of Higher Education Funding (see pages 37-42 for capital recommendations)
http://www.msa.md.gov/megafile/msa/speccol/sc5300/sc5339/000113/011000/011441/unrestricted/20090330e.pdf
Link: USM Capital Budgeting Process
http://www.usmd.edu/usm/adminfinance/CapPlanMatrix.pdf
Document Available: Program Verification
Example—USMSM Program Verification Report
Document Available: Value Engineering Report
Example from USM Project
Document Available: Bid Report with Alternates
Example from USM Project
