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Service Cost Recovery Initiative FY 2012-2013

In response to economic challenges facing the university, Project Management & Construction Services (PMCS) has been developing strategies to continue to provide excellent service to our clients while containing costs. PMCS is now implementing additional measures to align the university's service needs and costs with the department’s budgetary requirements.

The department has established a Major Renovation Project Service Center that will use a cost recovery model to fund the operational and maintenance expenses for management of projects between $4 million and $10 million and for interior design services (excluding flooring-only projects) provided in projects under $4 million.

Projects At or Above $4 Million

Historically, PMCS has managed projects under $4 million; providing programming, construction and renovation at that level is the department’s core service. However, in recent years, PMCS has been asked to manage an increasing number of projects in the $4 million to $10 million range. Since current staffing is inadequate to provide this service, additional staff and funding resources are needed to support the non-core projects effectively. For that reason, PMCS is applying a charge rate of 4.5 percent of the total project cost (TPC) to any project expected to be above $4 million, beginning September 1, 2012.┬áThese charges will help PMCS obtain the resources necessary to ensure quality and ensure that university standards are met.

In-House Interior Design Services

PMCS will begin charging an hourly rate of $51 for in-house interior design services (excluding flooring-only projects) related to projects under $4 million, effective September 1, 2012. This rate will not apply to projects $4 million to $10 million, as the project management percentage rate described above applies to those projects.

New Rates

The table below summarizes the new rates:

Rate Name Current Rate New Rate Distribution Base (Unit)
PMCS Project Management ($4M - $10M) $0.00 4.5% of TPC Applied to TPC
PMCS In-House Interior Design Services $0.00 $51.00 Hourly

Looking Forward

The intent of the Major Renovation Project Service Center is to cover real operating costs. The program will be reviewed on an annual basis. Any excess balances beyond reserves mandated by governance bodies will be returned to the university as mandated by the Service Center agreement.

While PMCS recognizes that these services could be obtained through outside sources, it would be at a much higher cost to the university. Implementing these changes to services will allow us to continue providing a high level of expertise and support to our clients and the university.