Why do construction projects fail? Ineffective communication and collaboration, and poor pre-planning processes are among the reasons given by building owners in a recent survey. To avoid those pitfalls, colleges and universities need to take a multidisciplinary, collaborative approach to preplanning, financing and carrying out their master plans for capital projects.
Laying the foundation
At many education institutions, master planning largely is a “top-down” process in which capital building projects are identified by the president or the board of trustees and handed down to a planning committee. The school or university hires master-planning consultants, who meet with departmental representatives to identify program needs before developing a facilities master plan. The planning committee reviews the draft master plan, revisions are made, and a final proposal is presented to the president or board for approval. Unfortunately, this approach largely excludes end-users from the process that is the foundation of a successful master plan.
A better alternative is a multidisciplinary, collaborative process. It begins by having every department identify its specific goals. These goals are rolled up into a comprehensive strategic plan as they move through the various levels of the organization, from department to institution to campus. Finally, the president's cabinet or board of trustees identifies specific activities to support the strategic plan.
The strategic plan becomes the foundation for facilities master planning every five to 10 years. It begins by assembling a broad-based multidisciplinary planning team made up of representatives from all quarters of the university, including the chancellor of each campus, business officers, facilities planners, physical-plant personnel, information-technology specialists, athletic directors and student representatives.
This team should meet with the master-planning consultant for a planning charrette of one or two days. The team should review the strategic plan, discuss program issues, sketch out a facilities master plan, negotiate priorities and incorporate revisions. The planners then will execute the proposed master plan.
After the plan has been reviewed, the president or board of trustees approves it. Administrators then are tasked with sequencing the list of projects identified in the master plan to the available stream of cash or debt.
This approach generates support from every area of the institution because everyone “owns” it. Moreover, it enables the business office, and facilities planning and construction department to hit the ground running.
Financing the plan
The prospect of paying for a master plan can be daunting, yet it begins with a relatively modest annual investment. Traditionally, a calculation of asset depreciation has not been part of most universities' accounting practices. However, it enables a university to benchmark a minimum level of investment in facilities upgrades, renovations and new construction — and, even more important, put it in the base budget each year.
This may be a challenge for institutions that have never done this, yet by encouraging annual increases in investment, the funds accumulate and the university will be prepared when the time comes to finance a construction project. Moreover, to the extent that the institution's physical plant supports the assets on the balance sheet, this helps to cover debt ratios.
This annual investment is particularly important for colleges and universities that do not have a large endowment and cannot rely on gift income to finance a steady stream of capital projects. It provides every institution with a solid foundation to seek loans, grants or gifts.
Delivering the plan
A serial building program can be associated with significant cost efficiencies. First, define in detail the program requirements of every project before hiring an architect. Involve the potential users of the facility, as well as representatives from the information technology and physical plant departments, in defining the requirements of each space in detail. This will reduce design fees by eliminating architect-led programming meetings. Contractors say a detailed program also can trim 5 to 7 percent off the construction cost.
Choose partners through a pre-qualification process. Every few years, issue a request for qualifications (RFQ) for designers and contractors. When planning a new project, send the request for proposal (RFP) to those pre-qualified firms.
Aim to form long-term partnerships with design and construction firms. The learning curve associated with hiring a new firm can add time and expense to a project. Moreover, the institution will receive competitive design and construction bids because these firms understand the school's expectations.
Whenever possible, bundle projects and award them to the same general contractor to reduce the cost of general conditions. This also results in more competitive bids from subcontractors on multiple projects, particularly when they are sequenced.
Require the architect to design to a construction budget based on a specified dollar amount per square foot (excluding survey, design fees, etc.). Also build a stipulated sum fee into the contract, which requires the firm to redesign, if necessary, with no fee increase.
Determine what will be the best delivery method for the project. The traditional design-bid-build approach can work, but construction-management-at-risk offers a major advantage: the contract requires the construction manager to deliver the project at or below a specific price — in some cases, a guaranteed maximum price.
Also, require key members of the design and construction team to attend regular meetings with the university's project team.
Jost is vice president and chief business officer of Embry-Riddle Aeronautical University in Daytona Beach, Fla., and Prescott, Ariz. Peatross is director of university construction and planning for Embry-Riddle University. Bullock is vice president and principal of Woolpert., Inc., an architectural firm in Charlotte, N.C.
Embry-Riddle Aeronautical University, specializing in aviation and aerospace, has campuses in Daytona Beach, Fla., and Prescott, Ariz., and offers programs at more than 130 extended campus learning centers throughout the United States and Europe.
In 1992, Embry-Riddle initiated a multidisciplinary collaborative planning approach to grow the university.
Each year, Embry-Riddle undergoes a collaborative strategic planning effort that involves every department on each campus. The strategic plan is the foundation for a master-planning exercise that it conducts every five to 10 years. The process includes representatives from every area of the university. As a result, the master plan has wide support.
Since 1998, the university has included in its annual budget an amount equal to or greater than the value of its asset depreciation expense, averaging $10 million to $12 million a year. Along with loans and grants, this input of cash has enabled the university to finance construction initiatives.
From 1993 through 2006, the university completed more than $130 million in major construction projects on its two main campuses, and it has more than $66 million in projects underway. Projects include major new aviation, academic, residential and athletic facilities.