Embrace Financial Close as a Critical Milestone

If the TR’s are the laws of the P3, the Project Agreement / Financial Close is its binding legal framework — the contract developed and agreed upon by the University and the Developer that marks the close of Procurement, or bidding, finalizes the Technical Requirements (TR’s), and launches the Design and Construction phase. 

Analyze and Document: Be Thorough in Procurement

The Procurement phase ends in a Project Agreement and Financial Close acceptable to all parties. Because the bidding documents directly inform Financial Close, the University should require thoroughly documented, highly robust competition entries with more information than a standard Conceptual Design package. All important aspects of design should be noted and budgeted, with strategies for achieving social, economic, and environmental performance goals and objectives clearly articulated. Likewise, the Financial Close process should be undertaken with care. Revisions to the TR’s during this time should be analyzed in detail by the Technical Advisors and Design Team. Omitting program elements at the last minute to close the deal can result in detrimental cost and schedule consequences.

Change is Unavoidable: Involve Stakeholders, Build in Contingencies

The TR’s are often written two to four years before the building Design phase starts, and during that time there can be University staffing changes, industry and technological changes, program shifts, and other changes that could not be foreseen during the TR Development phase. Change is unavoidable. As such, it is important to build in well-defined contingencies and mechanisms for change in the Project Agreement, to ensure a smooth and expedient process during Design and Construction.

Every proposed change or deviation to the TR’s should be priced and analyzed through various lenses, including life cycle costs and impact on functionality, with participation from the Governance Board and University Stakeholders who helped to shape the project’s intent, goals, and priorities.

Change is unavoidable - bake well-defined contingencies into the Project Agreement, and engage University Stakeholders for buy-in to changes.

Anticipate Reviews

The Project Agreement should clearly identify all potential review impacts — such as authorities having jurisdiction, neighborhood groups, public entities, environmental groups, and University Stakeholders — relative to schedule and budget and identify which party is responsible for stewarding approvals.