POLICY DEVELOPMENT UPDATE
Major Capital Projects Policy
Selection and Appointment of Prime Consultants policy
Proposed new title: Capital Projects Policy
October 19, 2015
Background – Research and Drafting
The Policy Sponsor role was delegated to Anne Browne and a drafting group was formed on
June 23, 2015, comprising:
Donna Ball, Policy Office
Jason Daniels, Facilities Management
Keith Hiscock, Facilities Management
The group met 6 times between June and September. The group reviewed and discussed:
- appropriate provincial government documents,
- similar policies at other Canadian universities,
- the original Board of Regents submission from 1999 to understand how the policies came into
being,
- Terms of Reference of the Board of Regent’s Campus Planning and Development Committee,
- Relevant sections of the Memorial University Act and the Pippy Park Commission Act.
From these discussions, the group restructured and refined the language of the policy and procedures,
making them more rigorous.
The group met with Anne Browne on August 20, 2015 to provide an update and seek agreement on the
direction being considered. As well, the Policy Office consulted with the Office of the General Counsel
on interpreting the Act, specifically sections 33, 34. (1) (c), (d), and (e), and 37.
In early October it was discovered that a policy for Selection and Appointment of Consultants for less
than $500,000 had been approved by the Board of Regents in 2003 but had not become part of the
official University Policy Collection. This discovery and the new direction for the policy and procedures
were discussed with the Vice-President (Administration and Finance) on October 19, 2015. It was
agreed that had it been it would have been considered for updating to the threshold level approved by
the Board of Regents in March 2010 (that increase was from $500,000 to $1,000,000).
Highlights of the proposed revised policy
-
-
The focus of the policy has been broadened to address all capital projects, with appropriate
delineation of major and minor capital projects. A new policy title has been proposed.
The Selection and Appointment of Prime Consultants policy has been consolidated into the
Capital Projects policy, as a related procedure.
The newly found Policy for Selection and Appointment of Consultants for less than $500,000 has
been consolidated into the Capital Projects policy, as a related procedure, and to apply to minor
capital projects.
Definitions were added for terms such as Minor Capital Project, Project Sponsor, and Steering
Committee;
The definition of “Major Capital project” was amended to remove “purchase of land” as one of
the types of projects (as a standalone purchase)
1
-
The roles and responsibilities of the Project Management Team, Stakeholder Team, Selection
Advisory Committee, senior administrators and VPC were clarified.
The authority of the Associate VP (Facilities) was incorporated, as well as changes in the
structure within Facilities Management;
Increased the threshold level of a Major Capital Project from $1M to $5M; see rationale below
Incorporated recommendations from the General Counsel with respect to references to the Act
and the authority of the Lieutenant Governor in Council;
Resurrected the various forms that had fallen out of use and made terminology consistent
across each form with the policy and procedures language;
Rationale for proposing the threshold increase:
Two closely related factors have combined, in recent years, which rationalize the requested increase in
the threshold for approval of Major Capital Projects; market cost increases for construction and scope of
work. A review of the original 1999 Major Capital Project Policy, which remains largely unchanged today,
defines a major capital project as one which establishes new space, significant redevelopment of
existing space or functional alteration of grounds. The policy would appear to define major capital
projects as those which significantly change the appearance, look or landscape of the campus. This is
consistent with the authority of the Campus Planning and Development Committee in the policy and
references to the master plans.
Over the past 15 years construction at the University has changed significantly with new building and
major renovation work being planning at greater frequency. Additionally, the University is undertaking
long overdue renewal work. This work, which was traditionally undertaken as discrete projects over
time, must now be completed at the entire system level once initiated. The St. John’s College renewal
(approx. $4.6M) for example, concentrated on envelop, heat/cooling and plumbing renewal. Another
recent project at Education to replace 1 of 2 existing air handling unit closed with a budget requirement
of approximately $2M. Despite the overall value of these projects¸ the function, use or general
appearance of the buildings did not change, which was the original spirit of what is a major capital
project. This situation will continue to occur as older building systems age and deteriorate while
deferred maintenance continues to increase.
In addition to the above noted factors, consideration must also be given to the efficiency of the process
and cost incurred by both Memorial and the responding consultants. Recent changes to the Request for
Proposals process have made the selection more transparent and auditable however this more rigorous
process also requires larger selection advisory groups and formal presentations by shortlisted
consultants. The former aspect increases both the time it takes Memorial to process an RFP as well as its
soft costs (estimated at between $10k and $15k per RFP). The latter can cost a consultant between $20k
and $50k depending upon the extent of the team assembled. These costs would be reflected in the fees.
Finally, there is the issue of cost escalation. Market conditions in Newfoundland continue to challenge
available budgets and the ability of experts to predict those markets. The additional premiums that
contractors and consultants now place on work which relates to redevelopment or renewal have driven
budgets to unprecedented levels.
2