Prioritizing Small- to Mid-Sized Capital Projects
There will always be more needs than dollars when it comes to dealing with our lists of critical replacements, upgrades and improvements. There are few universities and colleges that can brag about not having any backlog. Some of those that do are only fooling themselves and/or their senior administrators.
I have a list of projects that could fill several binders if it weren’t for e-files. The estimated backlog of identified projects is looking back at $200 million and is growing steadily. This in spite of the fact that we are lucky: we annually receive from our state legislature an“improvements” budget that is based (by law) on a fixed percentage of Current Replacement Value (CRV) of assets. The challenge is that this allocation represents less than three percent of our backlog. How, then, can we begin to prioritize our needs on a rational basis? We have developed a matrix of criteria, below, that weighs the risk associated with each individual project, if it were to be delayed.
1. Type of facility — Does the project impact research, patient care, administrative/academic offices, physical education, support or other? Clearly, a utility interruption at a research facility is very critical, certainly more so than in Central Stores.
2. Number of buildings — Will the failure impact only one building, five buildings, or 10 or more? As the magnitude of impact increases, the need for pre-emptive measures increases.
3. Type of project — Is the project identified as a replacement or an upgrade of existing stuff, or is this a first-time installation? The looming failure of existing“stuff” frequently deserves a higher ranking than does the desire for something new.
4. Likelihood of failure — Are we 100 percent certain that a failure will occur in the next fiscal cycle, or is there only a 20 percent chance? Is failure even a factor in this project?
5. Duration of event — How long will the downtime be as the result of an event? Is it only a few minutes, several days or more? In tandem with some of the other criteria, this question is extremely important. If an electric motor on a supply fan in an office building fails for a day, occupants will survive. However, if the same type of failure occurs in a research building with fume hoods, the problem is much more serious.
6. Potential for personal injury — Will not completing this project expose the institution to the potential of personal injury? This criterion is critical now that the project and its risk have been identified.
7. Potential for damage to adjoining property and assets — Is there a serious risk that failure may cause secondary damage and risks?
8. Payback — Will completion of the project have an associated payback? This could be realized in terms of reduced energy consumption, operational efficiencies, higher level of productivity, etc.
9. Impact on programmatic use of the space — A project should receive higher consideration if it allows more effective use of the space, such as making the space more conducive to the learning process. For instance, upgrading the lighting in a 40-year-old classroom may be a worthwhile project if it then permits video presentations.
10. Political influences — Are there inescapable pressures from senior administrators or other weighty stakeholders to do a certain project? Is it the right thing to do in consideration of environmental protection, public awareness, etc.?
For two reasons, the criterion that could be labeled as “code compliance” was intentionally not included. First, in most cases, adjusting to the most current building codes is only mandated when a significant remodel is scheduled, the scale of which may drive how much of a building needs to be upgraded. Second, if there is a serious code issue that must be addressed (i.e., ADAG), item 10 will start to overtake everything else.
Each of these criteria has weighted rankings within it and an additional weighted ranking in relation to the other criteria. We are just starting to use this tool, and we hope to gain some useful experience from its application. We anticipate fine tuning it as we use it, but it is proving a great place to start!
Pete van der Have is the assistant vice president for Plant Operations at the University of Utah in Salt Lake City. He can be reached at [email protected].