UVA panel learns how planning and budgeting works for capital projects

Shortly after approving the University of Virginia’s major capital plan for the next five years on June 7, the Buildings and Grounds Committee of the Board of Visitors turned their attention to getting a briefing on how the spending document is put together. 

Anything that gets built at UVA is a joint collaboration of the Office of the Architect and Facilities Management department. 

“They’re the ones who develop capital projects at the University from the very first concept all the way to the ribbon-cutting like we did yesterday,” said Colette Sheehy, the Senior Vice President for Operations and State Government Relations at UVA. 

Many projects begin with a feasibility study to determine whether something is needed such as whether there is a need for a new engineering building. At any given point, there are many previous studies to implement, such as the 2019 Parking and Transportation Study. That document has informed the placement of the various parking garages that have taken planned and constructed over the past few years. 

Ideas themselves come from school deans, top officials, public safety, or other aspects of UVA.

“The concepts are outlined and brought forward to the executive vice presidents, they will do an evaluation saying ‘should we do this, should we do it now, should we defer it,’” Sheehy said. “All of that keeps bumping up to when the executive vice presidents and the president meet to determine what the program that you saw today should look like.” 

J.J. Wagner, the executive vice president and chief operating officer at UVA, said items can be added to or subtracted from the list as new conditions are known, including proposals that come from major donations. 

“It’s very fluid,” Wagner said. “There’s a year-long process and every year it can adjust which is why we come back each year.”

Budgets adjust each year as prices for the various components continue to fluctuate. 

Pre-design work and other conceptual work can take place in house to shape the idea.

“Then we will go into selecting an architect or an engineer depending on the project and in the course of developing the design, we’ll figure out what construction method we want to use,” Sheehy said.

This refers to procurement. In one option, UVA and its hired architect could design the building and put out the drawings to bid with the lowest bidder winning. In another, UVA partners with a contractor at the outset to design and build something.

“We’ve used that for instance on parking garages, we’ve used it in student housing,” Sheehy said. 

In the third method, the contractor hired assumes some of the risk of the project and is responsible for setting the budget for subcontractors. This requires the project to be submitted to the engineering division of the Virginia Department of General Services. 

“Up until July 1 of this year, like, in three weeks, that opinion was advisory and we could choose to not follow it if we felt strongly that the CM at risk was the way for us to manage the project but the General Assembly in 2024 session passed a new law,” Sheehy said. 

That new law requires any project over $65 million go before the division for approval. The Board of Visitors would still have the ability to overrule the General Services department. 

Donald Sundgren, Associate Vice President and Chief Facilities Officer at UVA, said the new Center for the Arts is already approved to go through this process if the Board decides the project will move forward. 

“One thing that the state doesn’t recognize is schedule,” Sundgren said. “We’ve taken a lot of advantage of improving our schedule by doing CM at risk.”

For example, the new football operations center and the Olympic sports complex were done using this method though the state did not approve. 

“And we gained nine to 12 months on the schedule on those projects by getting early packages and getting into the field sooner,” Sundgren said. 

There were several questions about budgeting and who comes up with the numbers. That depends on the project, though Sheehy said that by this point, UVA understands the local environment for construction.

“What’s interesting about Charlottesville is that we are relatively small market for construction,” Sheehy said. “We have limited numbers of subcontractors. We can attract the big national firms in to be construction managers but they all have to use the subcontractors that are locally in the market.”

Sundgren added that the market extends from Harrisonburg to Richmond. Either way, Sheehy said this means that sometimes UVA is competing with itself for builders and so can’t put too much out for bid at once. 

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