When we are collaborating with clients to support the development of prioritized, multiyear capital plans, we are looking for the best possible option to get value from limited capital renewal dollars. Even though single element projects (e.g. replacing a roof on a single building) are common, there are two key strategies that are often used to increase the value of renewal funding, building projects, and programs.
I wanted to differentiate between the two, to create greater clarity and understanding. To use an analogy, a project is generally a mile deep and an inch wide, and a program is an inch deep and a mile wide. Let’s get more specific.
By our definition, a project is where you bundle multiple needs within a single building together in a single year (or in some cases over multiple years for larger projects). The focus is on completing as many of the needs in a single instance, even if that means bringing some needs forward, and completing them earlier than they would have otherwise been necessary.
There are many benefits that we have seen clients achieve by building projects including:
- – Economies of scale (often, but not always, depending on the bundle of work) in doing more work within a building at the same time due to shared project management, design, labor etc.
- – Smaller internal Project Management teams can generally manage fewer, larger projects easier than managing many smaller projects, across multiple buildings – it is generally easier to manage a single $1 Million project than ten $100,000 projects.
- – Larger projects may make it cost effective to bring in a General Contractor that can take overall responsibility for the project, as opposed to using limited internal resources.
- – Integrating renewals may create an opportunity to increase efficiency or add redundancy that would not be possible with a single element scenario (e.g., increasing the insulation of an envelope and downsizing of HVAC equipment);
- – Many renovation projects, prioritized for non-renewal reasons (often related to functional or space planning) can be expanded to also address related Deferred Capital Renewal and Maintenance needs without adding a lot to cost (due again to economies of scale).
- – Multiple funding sources can often be integrated into larger projects (alumni donations, government grants, DCRM funding, etc.) when the scope of a project is expanded to address multiple type/kinds of needs; and
- – Limiting the disruption to tenants/users to a shorter period of time, instead of coming back year after year to do smaller projects.
I would love to hear from you in the comments section below if the above advantages make sense to you, and if you have achieved any other benefits in building projects within your capital plan.
Next week, we will turn our attention to Programs, and compare and contrast the approach to Projects.