A. Purpose and Objective
The Administrative Standards for the Capital Planning, Land, and Facilities Use Policy (Doc. T93-122), as amended on July 19, 2023, includes a capital investment screening process for all new capital projects or major renovations. The objective of the screening process is to determine the potential suitability of alternative delivery and procurement for capital projects being put forth for approval by each Campus.
The University of Massachusetts Office of the President (“UMPO”) has created a screening manual and accompanying checklist that provides a framework for reviewing and scoring a capital project’s technical, financial, and commercial characteristics to identify whether that project should be put forward for detailed analysis under the alternative delivery approval process or proceed under a traditional delivery process. In addition, the Campus narrative (“Campus Narrative”) sections provide the opportunity for a Campus to provide a high-level description of the Project, why it should be considered for approval if not already in the approved capital plan (“Capital Plan”), and why the subject Campus desires to use alternative delivery and procurement, where relevant.
B. Process Overview
The screening checklist should be completed by the proposing Campus and approved by the Vice Chancellor for each capital project that is being proposed for capital project approval, with guidance issued by UMPO. The Campus may work in collaboration with the UMPO in completing the checklist, but in all cases must submit the checklist to the UMPO for review in preparation for the Board of Trustees (“BOT”) Vote 1.
If the checklist scoring outcome and Campus narrative indicates a project may be a good candidate for alternative delivery and procurement, the screening checklist will be presented to the BOT as part of Vote 1. An affirmative Vote 1 would authorize a detailed, independent third-party analysis of the project for alternative delivery feasibility. If the checklist scoring outcome indicates that the project should not be considered for alternative delivery, the project will proceed to a Vote 1 for traditional delivery.
Board approval for an independent, third-party analysis of alternative delivery feasibility does not guarantee that a project will be delivered through alternative delivery. Rather, the checklist provides a framework for assessing preliminary feasibility only and the independent, third-party analysis compares the alternative delivery and traditional delivery approaches through a detailed quantitative and qualitative analysis (e.g., market interest, delivery model, risk transfer, etc.).
If the independent, third-party analysis indicates that alternative delivery is not optimal, the Campus and UMPO would then determine whether to advance the project through the traditional delivery approval process. Where the independent, third-party analysis indicates that alternatively delivery is optimal, the project will proceed to a Vote 2 for BOT approval.
C. Scoring Overview
The screening checklist is comprised of the following sections:
- Section 1: Campus Narrative/Project Need Statement;
- Section 2: five (5) Technical Considerations; and
- Section 3: two (2) Commercial/Financial/Legal considerations.
The Campus is responsible for completing the Campus Narrative section and indicating, by use of an “X,” whether “Low/Medium/High” applies across each of the seven (7) questions in Sections 2 and 3.
D. Scoring Guidance
The following guidance can be referenced when evaluating each of the seven (7) checklist considerations.
| Category | Consideration | Guidance |
|---|---|---|
| Complexity | The expected complexity of the project design and construction. | High complexity could be the development of multiple assets and/or programmatic use types that drive a need for multiple architectural, engineering, and/or construction firms with specialty skills. Standalone scientific or other facilities with intricate designs could also be considered highly complex. Finally, projects with significant construction risk related to the site, schedule or otherwise could also be scored as high. Examples of low complexity could include: (i) a single new asset with limited design complexity that does not require multiple firms with specialty skills to construct, i.e., a single dorm or academic building or (ii) the renovation of an existing asset. |
| Innovation and Flexibility | The University’s desire to leverage private sector innovation and provide flexibility with respect to the program, design, construction sequencing, performance specifications, and operations for the project (rather than preserving the ability to be wholly prescriptive). | Alternative delivery can enable the University to specify facility performance standards, and allow for design creativity and flexibility in the development and operation of the project. An openness to deviations or new design concepts relative to the concept design, and a focus on the outcome of the project rather than the inputs (e.g., materials, design, scheduling, etc.) would score high in this category. Conversely, projects that require the University to be very design prescriptive or projects where the University is confident in its ability to effectively manage costs throughout operations would score low. |
| Date of Completion | The importance of date-certain, on-time construction completion. | If the opening date of the project is time-bound and inflexible, then there would be a high score in this category. Examples might include student housing, classrooms or research laboratories that need to be open by the fall semester of an academic year. If there is significant flexibility with respect to the opening date of the project, this would score low. |
| Performance Levels | The need for the University to assess its current level-of-service standards with respect to the performance of this type of asset. | If the University believes that there is significant opportunity to improve its operations, either by increasing the quality of service or decreasing the cost of service, this would score high. |
| Long-term asset management | The desire to ensure the asset’s performance meets specified standards over the life of the asset while having budget predictability. | If the University believes there is a significant opportunity to manage long-term capital rehabilitation requirements of the asset and avoid deferred maintenance, this would score high. In the past, this may have manifested as an inability to allocate adequate funding for preventative and capital maintenance, resulting in a spending pattern with large unpredictable spikes that are difficult to manage. |
| Capital Cost | Whether the total project capital cost is expected to be at least $50 million? | Projects generally need to be of a certain size (on a total project cost basis) to attract private sector interest. That said, a project below $50 million may not preclude private sector interest. |
| Funding Diversity | Is there a significant non-governmental funding source for the project, i.e., student fees, rates, and/or charges? | Current statutory interpretation is that alternative procurement can only be considered if 50% or more of the project funds are derived from non-governmental sources. As such, this appears to limit the application to revenue generating assets such as housing, dining, athletic, parking, and/or other auxiliary facilities. Note, however, that where an auxiliary project is bundled with a non-revenue producing project, alternative delivery may be feasible for all bundled projects. |
Alternative Delivery Screening Checklist
Section 1: Project Overview and Campus Narrative
If the project is not approved as part of the Capital Plan, the Campus should explain why it would like the project to be considered in the first instance and for alternative delivery.
| Question | Yes | No |
|---|---|---|
| Is the Project currently envisioned as part of the Campus master plan? | ||
| Is the Project currently approved as part of the five-year capital plan? | ||
| Does the proposed capital investment address capital maintenance requirements specified in the Reserve Policy? | ||
| Does the Campus have sufficient debt capacity to meet the requirements of the Debt Service Ratio specific in the Debt Policy (T09-050)? |
Business Case:
Provide an overview of the business case for the project, including, but not limited to, the following information: project description, summary program, estimated budget, anticipated funding source(s), and anticipated project completion date.
Campus Narrative:
Relationship to Academic Goals:
How does the capital investment assist the Campus with meeting its academic goals and objectives? Will the capital investment impact the Campus annual indicators in the areas of academic quality, access and affordability, student success and satisfaction, service to the Commonwealth, and/or financial health?
Campus Narrative:
Preferred Delivery Approach:
Has the Campus determined a preferred project delivery approach (i.e., traditional or alternative procurement?) Why does the Campus wish to utilize this preferred approach? If no preferred project delivery approach has been determined, please indicate what further analysis will be necessary in collaboration with the Office of the President and UMBA.
Campus Narrative:
Section 2: Technical Score
Insert an “X” in either the “Low/Medium/High” boxes for each statement.
The Score column is to be completed by the President’s Office.
| Question No. | Considerations – Technical | Low | Medium | High | Score |
|---|---|---|---|---|---|
| 1 | The expected complexity of the project design and construction. | [X] | |||
| 2 | The University’s desire to leverage private sector innovation and provide flexibility with respect to the program, design, construction sequencing, performance specifications and operations for the project (rather than preserving the ability to be wholly prescriptive). | [X] | |||
| 3 | The importance of date-certain, on-time construction completion. | [X] | |||
| 4 | The need for the University to assess its current level-of-service standards with respect to the performance of this type of asset. | [X] | |||
| 5 | The desire to ensure the asset’s performance meets specified standards over the life of the asset while having budget predictability. | [X] |
Total Technical Score:
Section 3: Financial
Insert an “X” in either the “Yes” or “No” box for each question.
| Question No. | Considerations – Commercial/Financial/Legal | No | Yes | Score |
|---|---|---|---|---|
| 6 | Is the project capital cost expected to be at least $50 million? | [X] | ||
| 7 | Is there a significant non-governmental funding source for the project, i.e. student fees, rates and charges? | [X] |
Total Commercial/Financial/Legal Score:
Section 4: Recommendation
To be completed by the President’s Office
Recommend for Alternative Delivery Options Analysis? (Yes/No)