Draper & Associates (Draper) and the Adams Consulting Group conducted a comprehensive operations analysis of the Physical Plant Department in 2000 as part of a review of the constituent administration and staff support departments within the University. What emerged from that analysis was a list of findings, recommendations and conclusions reflected in a report, dated November 15, 2000 .
After the study was completed, the Draper/Adams Team worked with Physical Plant executives to develop the necessary documentation to support implementing the 43 recommendations contained in the Review. As part of the analysis of the budget implications of project administration, Draper examined alternatives for funding the services provided by the Design Services staff for campus projects.
Beginning late in fiscal year 2002, a surcharge factor was incorporated into the budget for all new capital construction projects being planned for education and general facilities on the Campus that were to be accomplished using external contractors. The purpose of this surcharge was to cover the cost of the support services provided for such projects by the personnel and other resources employed within the Contracted Services Unit of the Facilities Management Department. The support services included:
- Capital Program Planning Coordination
- Project Planning and Budgeting
- Design and Construction Contracting
- Project Coordination and Management Oversight
- Contract Administration
- Issue Identification and Resolution
- Project Closeout
- Project Documents Management and Retention
The surcharge factor was calculated based on the budgeted cost (i.e. salaries, benefits, supplies, materials, equipment, software, etc) of the personnel and other resources involved directly in the delivery of these services, as well as the Contracted Services Unit's pro-rata share of the actual indirect or overhead expenses involved in the operations and management of the Facilities Management Department as a whole. The surcharge factor was reflected in each of the project budgets to which it had been applied as a percentage (1.25%) of total project cost, inclusive of both design and construction. This percentage was based on the ratio of the Contracted Services Unit's budgeted direct and indirect expenses to the estimated annual dollar volume of total design and construction expenditures that would be incurred and paid out across all capital construction projects.
The surcharge would be applied to all capital accounts for the projects for which it had been budgeted. These charges would be applied as a percentage (1.25%) of any design and/or construction services invoices approved and paid within a given month. By the end of January 2003, surcharges were entered to all such accounts retroactively for any design and/or construction services invoices that have been approved and paid since the beginning of fiscal year 2003. From that point forward, these surcharges were applied on a monthly basis.
" Draper & Associates has been of great assistance in helping us to determine the level of service and the corresponding mix of resources and level of expenditure that is appropriate in managing and maintaining the University's facilities. Their analytical work is allowing us to more clearly define and quantify our facility requirements as we pursue an accelerated growth strategy for the campus. Their integrated approach to organizational and program planning is positioning us to gain synergies across projects ranging from routine maintenance to renovation and new construction. As a result, we have a clearer indication of what we are getting when we make capital expenditure decisions and a higher confidence in our ability to generate a bigger bang for the buck."
Dr. Donald O. Pederson
Vice Chancellor for Finance and Administration
The University of Arkansas