Office of Origin: Board of Trustees
Date Adopted: 12-06-16
Date Reviewed: 08-11-17
Last Date Modified & Approved: 08-22-17
Major Capital is broadly defined as a capital asset or capital project (i.e., capitalized costs of construction, acquisition, and/or renovation) that meets Lake Michigan College (the College) capitalization threshold but that is not included in a routine capital budget.
Major Capital projects require substantial College resources, both in terms of financial resources and human resources. To ensure the wise use of scarce resources, adequate planning and ongoing budget monitoring must occur. Towards that end, the following are required for all Major Capital projects:
- Major Capital project activities will comply with the College’s Purchasing Policy as well as the Capital Asset Procedure.
- Project scope will be determined in collaboration with all major stakeholders (e.g., purpose, space required, estimated budget, sources of funding, location) and presented to the College’s Board of Trustees (the Board) for review prior to incurring any significant design costs.
- An independent professional estimator or similar professional may be engaged to provide budget and square footage estimates, along with recommended bid timing.
- Prior to seeking construction bids, project scope and budget will be reviewed with the Board of Trustees. Recommendations of scope changes identified through the design process will be highlighted.
- Bid alternates may be included in the bid specifications to provide flexibility should the College be concerned with the risk of escalating costs or budgetary constraints.
- The Professional Services portion of the Major Capital contract may include a construction administrator who will advocate for the College’s behalf on all construction issues.
- Major Capital projects requiring substantial equipment or systems testing will include commissioning costs in the approved budget.
- A six percent (6%) contingency will be included in all new construction Major Capital project budgets, and an eight percent (8%) contingency will be included in all renovation Major Capital project budgets.
- A summary of the construction bids received will be presented to the Board along with a recommendation for approval (including any bid alternates recommended for inclusion or budget adjustments) as required by the Authority to Bind policy. To take advantage of a favorable bidding climate, a special Board meeting may be needed.
- Regular reporting of the status of Major Capital projects will be provided to the Board of Trustees.
Responsibility: Vice President, Administrative Services; CFO; Executive Director, Facilities
References: Purchasing Policy; State of Michigan Capital Outlay Manual; Capital Asset Procedure; Authority to Bind College to External Agreements Policy