Integrate O&M at Project Launch

During the course of a 30- to 40-year relationship, Operations and Maintenance (O&M) can represent up to 80% of the full term of the project. However, universities typically run capital and operational budgets separately. Under traditional delivery models, contractors provide constructibility reviews and develop operational budgets based on formulas; the University does not get an operational cost review from their O&M group. As a result, renewal budget requirements can be unpredictable, leading to deferred maintenance. The P3 model can help address this problem. Spending considerable time devoted to developing an O&M plan in the earliest stages of a P3 is recommended to avoid a misalignment of expectations and services delivered.

O&M can represent up to 80% of the full term of the project. Spend considerable time developing an O&M plan in the earliest stages of a P3 is avoid a misalignment of expectations and services delivered.

Embed O&M Considerations into the DESIGN AND CONSTRUCTION TR’s

University facilities are actually 100-year buildings that the University is constantly reinventing, and this reality can create cost discrepancies for the Developer and O&M partner. When developing the TR’s, a Total Cost of Ownership (TCO) needs to be considered.

Establish Clear Lines of Responsibility

Partnering with an O&M firm for 30 to 40 years on a campus that is also managed by an existing Facilities Management group can be extremely complicated. Planning for the launch of this partnership should begin during the Procurement phase. Likewise, it can be beneficial for the University to maintain responsibility for certain operational services within a given P3 structure in order to deliver on the University’s value and mission, helping to ensure a seamless student experience. This is especially true with projects that impact student life. Spending time developing the O&M obligations into a Performance and Accountability Chart (PAC) before undertaking the O&M contract negotiations is highly recommended. This approach establishes clear lines of responsibility and communication requirements, and ensure that the O&M model aligns with the academic research paradigm.

Get Prepared Organizationally before Opening Day

Does the University have the staff to operate a specific kind of building and deliver on performance goals? Is there time and are there resources to train staff? These are the questions University leaders should ask while the Project Agreement is being developed and then again during Design and Construction. University leaders need to work with Operations staff to set expectations about performance goals while anticipating and accounting for future unknowns. Complex warranty structures, servicing agreements, and other maintenance realities will present different challenges over the course of the O&M phase, which can be 30 to 40 years.

Typically, the University retains control over select O&M areas. It is important to not only define the specifics of risk transfer relative to O&M, but for the University to fulfill the O&M obligations it has agreed upon in the manner required. Otherwise, it will be difficult to hold the Developer responsible for the turn-back condition.