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Ministry of Advanced Education

Version 1.2March 31, 2014

CONCEPT PLAN REPORT

CAPITAL ASSET REFERENCE GUIDE: TEMPLATE 4

TABLE OF CONTENTS

EXECUTIVE SUMMARY............................................................................................................. iii1.0 PROJECT DESCRIPTION..................................................................................................42.0 BACKGROUND INFORMATION........................................................................................53.0 STRATEGIC ALIGNMENT................................................................................................64.0 ENVIRONMENT ANALYSIS..............................................................................................75.0 PROGRAM DELIVERY OPTIONS ANALYSIS......................................................................86.0 CONCLUSIONS & RECOMMENDATIONS.......................................................................197.0 IMPLEMENTATION STRATEGY......................................................................................20

OTHER RESOURCES FOR THE CONCEPT PLAN REPORT.........................................................24APPENDICES FOR THE CONCEPT PLAN REPORT.....................................................................25

EXECUTIVE SUMMARY Provide a summary for each section of the Concept Plan Report

PROJECT DESCRIPTION

BACKGROUND INFORMATION

STRATEGIC ALIGNMENT

ENVIRONMENT ANALYSIS

PROGRAM DELIVERY OPTIONS ANALYSIS

CONCLUSIONS & RECOMMENDATIONS

IMPLEMENTATION STRATEGY

Concept Plan Report | iii

1.0 PROJECT DESCRIPTION1.1 Project Objectives

Update the project description from the Opportunity Assessment Report, including the opportunity in the context of strategic and business drivers, project objectives

1.2 Project Scope Update project scope from the Opportunity Assessment Report, including

user needs, and space requirements, as follows:- Category 1: New Priority Projects, driven by growth accommodation

and labour market demand-driven capacity, resulting in new system capacity, IM/IT, skills training, etc.

Indicate the number of new FTEs the project will accommodate- Category 2: Whole Asset Replacement & Renewal Projects which

improve the physical asset condition and reduce deferred maintenance backlog. 50% or more of the asset is replaced1, resulting in increased system capacity from improved functional efficiency

Indicate the number of additional FTEs the project can accommodate due to functional improvements, if applicable

1.3 Project Outcomes Update the project outcomes from the Opportunity Assessment Report,

including the concrete results necessary to meet the project objectives

Note: Projects greater than $50M must be evaluated by Partnerships BC for public private partnership (P3) viability during the Concept Plan Report activity. Institutions are instructed to coordinate with the Ministry for any services provided by Partnerships BC. While it is not mandatory to use PBC’s services to plan, deliver and oversee project delivery, they do offer those services. Please refer to Section 13.0 Governance in the CARG and http://www.partnershipsbc.ca.

RESOURCES Approved Opportunity Assessment Report Institutional Accountability Plan & Report 5 Year Capital Plan FTE and space utilization rates Ministry’s Space Standards Ministry’s Budget Model

1 This threshold is provided as a guideline, not as a rule. In some instances, the Ministry may determine that it is prudent to undertake projects that do not meet the threshold.

Concept Plan Report | of 24

2.0 BACKGROUND INFORMATION2.1 Current Situation

Update the current situation from the Opportunity Assessment Report, including the circumstances and events leading up to the opportunity, as well as the risks of status quo

2.2 Demand Update the forecast demand from the Opportunity Assessment Report Analyze relevant reports, data, or trends using tables/figures relating to the

opportunity, including those identified in the following:- BCStats Population Projections (P.E.O.P.L.E.) - Provincial data on labour trends


RESOURCES Approved Opportunity Assessment Report BCStats Population Projections (P.E.O.P.L.E.) Provincial data on labour trends

http://www.bcstats.gov.bc.ca/data/pop/popstart.asp

3.0 STRATEGIC ALIGNMENT3.1 Stakeholder Identification

Update the internal and external stakeholders identified in the Opportunity Assessment Report

Table 3-1. Stakeholder Identification

StakeholderInternal/External(I or E)

Role

The MinistryStakeholder #2Stakeholder #3Stakeholder #4Stakeholder #5Stakeholder #6

3.2 Stakeholder Alignment Evaluate each stakeholder (e.g., business plan, etc.) to determine how the

opportunity supports their goals Table 3-2. Stakeholder Alignment

The Ministry

Goal How the Institution’s Opportunity Supports the Stakeholder’s Goals

Impact(High, Medium, Low)

1.2.3.

STAKEHOLDER #2



1.2.3.

STAKEHOLDER #3



1.2.3.


RESOURCES Approved Opportunity Assessment Report Ministry Business Plans Cross-ministry initiatives

4.0 ENVIRONMENT ANALYSIS4.1 Environment Scan

Identify similar initiatives to the proposed project and summarize the findings in the table below

Table 4-1. Similar Initiatives in Other Jurisdictions SummaryPost-secondary

Institution/Project Name

Type of Project (New Build, Expansion,

Maintenance, etc.)

Programs

Delivered

Scope Cost Risks Impact on Job Creation

Institution #1Institution #2Institution #3Institution #4Institution #5

4.2 Lessons Learned Summarize the lessons learned from the environment scan exercise

performed in 4.1 Similar Initiatives in Other Jurisdictions Summary

Table 4-2. Lessons Learned SummaryPost-secondary Institution/

Project Name Lessons LearnedInstitution #1Institution #2Institution #3Institution #4Institution #5


RESOURCES Approved Opportunity Assessment Report Post-secondary institutions and similar

clients in BC and other jurisdictions (provinces, states, international)

5.0 PROGRAM DELIVERY OPTIONS ANALYSISThe program delivery options analysis can be summarized in three steps, as follows:

Step 1– Identify All Options: List all options identified in the approved Opportunity Assessment Report including status quo. These are evaluated against mandatory criteria to determine which options are viable and should undergo further analysis

Step 2 – Evaluate Viable Options: Options that meet mandatory criteria undergo rigorous testing:

1. Options are compared using quantitative (cost/benefit) and qualitative (advantages and disadvantages) analysis

2. Identification of financing sources for each viable option3. Preliminary risk assessment for each viable option

Step 3 – Summary of Options: The options analysis will be used to select one option as “preferable”, for which an implementation strategy will be developed


Table 5-3. Options Analysis Methodology

Identify All Options

Quantitative Analysis

(Financial)

Yes

Determine if any mandatory criteria exist. If so, does the option

meet the mandatory criteria?

Option does not move forward for further analysis

Summary of Options

Evaluate Viable Options

Cost/Benefit Analysis

Qualitative Analysis

(Non-Financial)

Preliminary Financing

Preliminary Risk Assessment

NoSTEP

1ST

EP 2

STEP

3


5.1 Step 1: Identify All Options List all options (both capital and non-capital options) as identified in the

approved Opportunity Assessment Report Include “do nothing” as an option to identify the costs and disadvantages of

maintaining status quo

Table 5-4. Summary of Options from the Opportunity Assessment ReportOPTIONS

Option Type of ProjectCapital (include category of

project) or Non-CapitalDescription

Status QuoOption #1Option #2Option #3

Identify mandatory criteria that the options must meet. For example, mandatory criteria may include:

- Infrastructure Improvements: FCI improvement and/or reduction of life safety & occupational health risks

- Cost Effectiveness: Funding partnerships and/or cost benefits throughout lifecycle

- Innovation: Demonstrates sustainable solutions and/or collaboration- Strategic Alignment: Alignment with government priorities (e.g.

Ministry Service Plan) and Institutional priorities (e.g., mission statement, master planning etc.)

- Quality Education: Improves student learning outcomes, and/or improve access to learning and/or student full time equivalents (FTE) and space utilization rates

Options are evaluated against mandatory criteria to determine if any options can be dismissed. For example:

- Strategic – the option does not conform to the Institution’s Campus Master Plan, etc.

- Quality Education – the option does not accommodate the FTE forecast at maximum student full time equivalents (FTE) and space utilization rates

5.2 Step 2: Evaluate Viable Options Options that meet mandatory criteria are evaluated through quantitative

(cost/benefit) analysis, qualitative (advantages/disadvantages) analysis, financing, and preliminary risk assessment


5.2.1 Quantitative (Cost/Benefit) Analysis A quantitative analysis provides a preliminary estimate of annual capital and

operating costs, including program/service delivery and facility lifecycle costs Prepare a net present value cash flow analysis for the shortlisted viable

options. The term of the cash flow analysis should equal to one of the following:

- If asset is financed with debt – use the term for the debt/mortgage.- If no debt financing required – use the expected life of the new asset.

Ensure that assumptions are adequately disclosed for revenue and cost estimates

Include schedules detailing the annual principal and interest payments to accompany the cash flow forecast, as well as for total capital cost estimate

The cash flow analysis should reflect the total ‘incremental’2 costs and revenues associated with each project option being evaluated, not the ‘full cost’ including existing programs and facilities. However, in cases where the new project/program also results in additional costs or cost savings in existing facilities or programs, these amounts are also to be included in the project incremental cash flow

2 Incremental costs refer to the additional costs associated with the new program only. Costs for the existing programs prior to the new development would not be included.


Table 5-5. Summary Table of a Quantitative Cost/Benefit Analysis

CASH FLOW FORECAST – Viable Option 1Inflow/(Outflow)

OPERATING YEAR

Year 1201x

Year 2201x

Year 3201x

Years4….1

9

Year 20

201xOperating Cash Flows

Incremental program revenues, by source $ xxx $ xxx $ xxx …….. $ xxxIncremental program costs, by source $ (xxx) $

(xxx)$

(xxx)…….. $ (xxx)

Incremental facility operating costs, by source $ (xxx) $

(xxx)$

(xxx)…….. $ (xxx)

Interest expense on new debt financings * $ (xxx) $ (xxx)

$ (xxx)

…….. $ (xxx)Total Operating Cash Flows $ xxx $ xxx $ xxx …….. $ xxx

Investing (Capital) Cash FlowsTotal capital cost $

(x,xxx) - - - -

Annual capital renewal, by source $ (xxx) $ (xxx)

$ (xxx)

…….. $ (xxx)

Total Investing Cash Flows $ (xxx) $ (xxx)

$ (xxx)

…….. $ (xxx)

Financing Cash FlowsNew debt financing3 $ x, xxx - - - -Internal financing $ xxx $ xxx $ xxx …….. $ xxxExternal financing $ xxx $ xxx $ xxx …….. $ xxxAnnual debt repayments $ (xxx) $

(xxx)$

(xxx)…….. $ (xxx)

Total Financing Cash Flows $ xxx $ xxx $ xxx …….. $ xxx

Net Cash Inflow/(Outflow) $ xxx $ xxx $ xxx …….. $ xxxNet Present Value – 20 years at x

% $ xxx

3 Although debt financing may not be used for specific projects, there is still an opportunity cost of using available cash flow for project funding.


A supporting schedule detailing the annual principal and interest payments should accompany the cash flow forecast. For example:

LONG TERM DEBT – Continuity Schedule

DEBT TERMYear 1201x

Year 2201x

Year 3201x

Years4 to 19

Year 20201x

Long term debt, opening balance $ xx,xxx $ xx,xxx $ xx,xxx …….. $ x,xxxAnnual debt payment:

Interest expense xxx xxx xxx …….. xxPrincipal repayment (xxx) (xxx) (xxx) …….. (xxx)

Long term debt, closing balance * $ xx,xxx

$ xx,xxx

$ xx,xxx …….. $ -

* Closing balance = Opening balance less Principal Repayment

A supporting schedule detailing the total capital cost estimate should also be included. For example:

CAPITAL COST ESTIMATECONSTRUCTION YEAR

TOTALYear 1201x

Year 2201x

Year 3201x

Land:Acquisition costSite preparationParking and improvements

$ xx,xxxx,xxx

-

$ -x,xxx

xxx

$ --

xx,xxx

xx,xxxx,xxx

xx,xxxTotal Land Costs $ xxx,xxx $ xxx,xxx $ xxx,xxx $ xxx,xxx

Buildings:Hard costs (construction materials and labor)Soft costs (design, engineering, PM/CM etc.)Construction contingency

$ x,xxx,xxxxxx,xxxxx,xxx

$ x,xxx,xxxxx,xxxx,xxx

$ x,xxx,xxxx,xxxx,xxx

x,xxx,xxxxx,xxxxx,xxx

Total Building Costs $ x,xxx,xxx $ x,xxx,xxx $ x,xxx,xxx $ x,xxx,xxxFurniture, Fixtures & EquipmentFurniture and fixturesEquipment

$ x,xxxxx,xxx

--

$ xx,xxxxxx,xxx

xx,xxxxxx,xxx

Total F,F&E $ xxx,xxx $ xxx,xxx $ xxx,xxx $ xxx,xxxSub-totalAdd: Inflation during construction $ xxx $ x,xxx $ xx,xxx $ xx,xxxAdd: Construction financing costs $ xxx $ x,xxx $ xx,xxx $ xx,xxx

Total Capital Cost $ x,xxx,xxx

$ x,xxx,xxx

$ x,xxx,xxx

$ x,xxx,xxx


5.2.2 Qualitative Analysis A qualitative analysis is required to evaluate the non-financial costs

(disadvantages) and benefits (advantages) of each viable option, including physical, social, environmental, and risk considerations

Determine a list of qualitative criteria. Examples include:- Operational – criteria related to expected facility or program

operational improvements, such as: ability to meet student needs and enrollment demand ability to attract new learners (e.g. First Nations, out-of-country) improved staff recruitment and retention integration of new and existing programs ability to implement new technologies and learning

methodologies impact on other areas of the Institution such as parking, food

services, recreation, housing, student, and health services improved operations and maintenance facility costs, e.g.,

energy efficiency, improved FCI

- Physical – criteria related to increased or decreased facility functionality, efficiency etc., such as:

effectiveness of facilities for meeting existing and new program needs

integration with existing facilities improved access and mobility flexibility to adapt to changing demands in the future

- Environmental – criteria related to the impact that the project and subsequent operations is expected to have on the local environment, such as:

increase/decrease in noise levels Increase/decrease in local traffic levels Impact on GHG emissions, waste levels etc.

- Strategic – criteria related to impact that the project and subsequent operations is expected to have on key stakeholders, such as:

government education and training goals response to industry requirements attracting research funding now or in future program or Institution prestige public/student perception of the program(s) and/or the

Institution public and private sector perception of the Province/the Ministry perception of other provincial and national Institutions


For each viable option, compile qualitative analysis findings in a summary table. For example:

Viable Option 1: NAMESummary of Qualitative Analysis

Advantages DisadvantagesOperational Physical Environmental Strategic

Viable Option 2: NAMESummary of Qualitative Analysis

Advantages DisadvantagesOperational Physical Environmental Strategic


5.2.3 Preliminary Financing For each viable option, identify intended sources of capital and operating

funding, including direct capital funding (e.g., provincial grants), federal grants, own resources, debt financing, private financing, disposition of surplus property, etc.

Financing must include details of conditions, associated with external funding, borrowing assumptions, and planned commercial revenues

For each source of capital financing, include a table showing the required financing draws for each year of the construction, matching the applicable categories in the cash flow forecast, as follows:

Table 5-6. Sources of Funding for Each Viable Option

Project Financing Year1

Year2

Year3 Total

Sources of FinancingDirect capital funding

Source A Source B

$ xxx $ xxx

New debt financing Source A Source B

$ xxx $ xxx

Internal financing Source A Source B

$ xxx$ xxx

$ xxx$ xxx

External financing Source A Source B

$ xxx$ xxx

$ xxx$ xxx

Total Project Financing $ xxx $ xxx


RISK IDENTIFICATION(Inherent)

RISK RESPONSE

Risk Identification

Details

Risk Response Details

Risk Monitor &

Control

Risk Evaluation

(With Response)

Risk

ID

Life

Cycle

Risk Event Trigger / Root Cause

Consequence on Project

Performance

Not

es

Risk

Pro

babi

lity

Risk

Impa

ct

Risk

Ran

king

Stat

us

Risk

Ow

ner

Ow

ner

Org

aniz

atio

n

Risk Response

Expected Results of Risk

ResponseRe

spon

se C

ost

Due

Date

of R

isk

Resp

onse

Res

pons

e Pe

rcen

tage

Co

mpl

ete

Notes on Risk Response (progress,

effectiveness, other notes)

Prob

abili

ty w

ith

Risk

Res

pons

e

Impa

ct w

ith R

isk

Resp

onse

Risk

Ran

king

w

ith R

isk

Resp

onse

Risk Identification Risk Response

Risk Evaluation (Inherent)

5.2.4 Preliminary Risk Assessment For each viable option, update the risks identified in the initial risk register

completed in the approved Opportunity Assessment Report by evaluating the risks in terms of probability, impact, risk owner, and mitigation strategies

Include new risks, if applicable A risk register is in accordance with project management best practices as

described in the Ministry’s Risk Management Guide . Refer to CARG Template 9: Risk Register for further details and examples of risk identification and evaluation

Note that risk response, risk monitoring & control, and risk evaluation (with response) are completed in the Business Case Report and implementation phase of the proposed project

Table 5-7. Risk Register- Risk Identification & Evaluation (Inherent)

At this stage of the planning phase, Institutions should engage the Province to determine the level of oversight and approval required. Complete the Capital Project Risk Screen Tool (CARG Template 8 ).


RESOURCES Ministry’s Risk Management Guide Ministry’s Risk Register Capital Project Risk Screen Tool (CARG

Template 8)

http://www.aved.gov.bc.ca/cppm/related_documents.htm






http://www.aved.gov.bc.ca/cppm/documents/Risk_Management_Guide.pdf

5.3 Step 3: Summary of Options Typically, the preferred option is the lowest net cost option on a net present

value basis. However, other considerations including those identified in the qualitative analysis, financing, and risk assessment may surface another viable option with a higher net cost as the preferred option

Summarize the results from Sections 5.1-5.2, providing advantages, disadvantages, and key findings to select a preferred option

Key Findings Viable Option 1 Viable Option 2

Net Present Value $ $

Qualitative Advantages

Qualitative Disadvantages

Financing

Risk Assessment


6.0 CONCLUSIONS & RECOMMENDATIONS6.1 Conclusions

List major conclusions based on Section 5.0 Identify a preferred option that has been selected

6.2 Recommendations List recommended next steps, including a corresponding budget for a

comprehensive Business Case Report for the following activities:- Initial Functional Program- Indicative Design- Quantity Surveyor Cost Estimate- Geotechnical Report- Environmental Assessment- Engineering Feasibility Studies

An implementation strategy is developed for the preferred option identified in Section 6.0 Conclusions & Recommendations


7.0 IMPLEMENTATION STRATEGY7.1 Project Delivery Models

Provide a preliminary analysis of alternate project delivery models (e.g., design-bid-build, design-build, construction management, P3, etc.)

Summarize findings to arrive at a preferred project delivery model for procurement purposes

Refer to the Project Delivery Option Analysis Tool (CARG Templates 13).

Table 7-8. Summary of Procurement Models

Project Delivery Models Advantages Disadvantages

Procurement Model 1

Procurement Model 2

Procurement Model 3

7.2 Preliminary Schedule Create a Gantt chart that identifies the expected duration of each project

phase leading to implementation

Table 7-9. Examples of Schedules Based on Project Delivery Model4

Number of Months 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40Design-Bid-Build

Tender & Award Arch./Eng'r & ConsultantsDesignTendar & Award Gen. Construction Contract 40Construction

Design-BuildTender & Award Owner's ConsultantsPrepare Design-Bid SpecificationDesign-Build Tender & AwardDesignAward Trade Contracts 36Construction

Construction Manager At Risk – GMPTender & Award Arch./Eng'r & ConsultantsDesignTender & Award GMP ContractNegotiate & Award GMP ContractTender & Award Trade Contracts 37Construction

Construction Manager – Fixed Fee (CM as Agent)Tender & Award Arch./Eng'r & ConsultantsDesignTender & Award Construction ManagerTender & Award Trade Contracts 32Construction Consturction (24 months)

T&ADesign ( 12 months)

T&AConsturction (24 months)

Consturction (24 months)


T&AT&A Trade Contracts


T&AN&A

T&A Trade Contracts

Award Trade ContractsConsturction (24 months)

T&ASpec


4 Projects greater than $50 M must be evaluated by Partnerships BC for public private partnership (P3) delivery. Institutions are instructed to coordinate with the Ministry for any services provided by Partnerships BC. While it is not mandatory to use PBC’s services to plan, deliver and oversee project delivery, they do offer those services. Further details about Partnerships BC can be found at http://www.partnershipsbc.ca.



7.3 Project Governance The appropriate project governance structure is based on the complexity and

size of the project. Figures 7-1 and 7-2 provide examples of organization charts for a small and large project

The organization structure identifies relationships and communication lines between project members, and is intended to:

- Encourage appropriate input from a wide range of sources- Facilitate timely decisions- Fulfill all Institutional and government requirements- Ensure good business practice in accordance with government contract

guidelines and financial and signing authority controls- Focus on making design and equipment decisions within the

boundaries of key project parameters such as budget, schedule and project scope

A project board may be required depending on the scope, complexity and risk profile of the project, and may include members from the Institution, the Ministry and/or Ministry of Finance. The requirement of a project board will be identified upon completion of the Capital Project Risk Screen Tool (CARG Template 8), which identifies both organizational and project risks. Whereas the Capital Project Risk Screen Tool determines the level of oversight required by the Ministry, a project risk register is project specific and is updated in each phase of the project lifecycle

Figure 7-1. Example of an Organizational Structure for a Small Project

Institution

Stakeholders

Designers Contractors Supplier

Project Manager




Figure 7-2. Example of an Organizational Structure for a Large Project

Campus Development Committee

Board of Governors

President & Executive Committee

Project Steering Committee

Finance & Audit Committee

President’s Council Capital Projects Academic Schools & Service Units

Construction Manager

Special Consultants

Functional Programmer

Prime Consultant

Program Staff

Sub-trades

Sub-consultants (Structural, Mechanical, Electrical)


OTHER RESOURCES FOR THE CONCEPT PLAN REPORT Approved Opportunity Assessment Report Institutional Accountability Plan & Report 5 Year Capital Plan Campus Master Plan Student full time equivalents (FTE) and space utilization rates Ministry’s Space Standards Ministry’s Budget Model BCStats Population Projections (P.E.O.P.L.E.) Provincial data on labour trends Ministry Business Plans Cross-ministry initiatives Partnerships BC Ministry’s Risk Management Guide


APPENDICES FOR THE CONCEPT PLAN REPORTThe following should be appended to the Concept Plan: Initial Programming Information Concept Options/Drawings Engineering Pre-feasibility Studies BC Budget Model Output Quantity Surveyor Cost Estimate Capital Project Risk Screen Tool (CARG Template 8)



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