The Penn Factor
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Mark Wilson, AIA, is managing director of design and construction management for facilities and real estate services at the University of Pennsylvania. His department is responsible for the schedule adherence and budget – basically seeing projects through from beginning to end. His group handles the capital plan and works very closely with the O&M (operations and maintenance) side. Founded by Benjamin Franklin in the 1740s, in 1779 University of Pennnsylvania became the first institution in America to be designated as a university. Penn is unique amongst its Ivy League peers in having all of its schools located on its 262-acre West Philadelphia campus. |
Hava Leisner: Is the university in downtown Philadelphia?
Mark Wilson: West Philadelphia, right to the west of downtown. It is a very urban setting, a very urban setting. It is very city grid; there is nowhere to go. We are building underneath ourselves. It is a constant battle to carve out enough space to put construction trailers. All of the material is brought in on an as-needed basis. I don’t have a lot of lay down space. It’s not like my friends to the north at Princeton, who have all this green space. That’s wonderful, I wish I had that. I don’t.
It’s part of what we refer to as the Penn Factor. It is just the cost of doing business in town.
HL: Tell me about what you are going to present [at the 2004 Higher Education Facilities Summit?
MW: I will speak on our construction methodology. What type of vehicles we use to produce the renovation and new construction projects on campus. We typically use three forms of agreement: a traditional general construction, GC contract; a CM contract; as well as what we call a CM on-call contract, which basically means we have pre-negotiated with a handful of CM contractors, their fee and their rates for the various trades.
So we have a zero-dollar contract in place right now, which will allow us to buy time in the beginning of a project, so we don’t have to go through the contracting process. We can issue them a letter, and in essence, an amendment to the contract that says, ‘please provide this with an upstart, not to exceed limit,’ and then they can get started right away as opposed to taking time.
We use that when we need something done really fast. Something has happened on campus where there is a researcher who needs something done quickly.
We have other funds, in other vehicles, for if something is an emergency. If some pipe bursts or something falls, there are other funds available for that. Universities are always constantly vying against each other for their faculty. So if somebody gets upset one day and calls up their friend or somebody we’ve been trying to woo and he says ‘I am coming, how fast can I get there?’ We have to set up his lab or whatever modifications are necessary for the space. So that’s what those are for. Otherwise it is pretty traditional.
HL: Do you favor a particular delivery system for renovations versus new construction?
MW: Yes. It depends upon the scope of work. For the more complex, larger-scale projects, my initial reaction would be to go CM. It allows me to buy a lot of time. I can get somebody on board earlier, I can have them partner with the bigger projects, I can control costs. I can send out earlier packages. Like anything else, time is money. And when I can issue a contract and get the project started sooner, I can finish it sooner, thereby reducing the overall length of time, and even though the university has internal mechanisms for borrowing money, per se, I can reduce those.
But on small projects, my preference is to go GC and that is because I can then fix my scope early, put it out, and get competitors bidding. The trustees’ preferred method is GC. They feel they are getting the biggest bang for the buck.
HL: With CM, are you referring to CM at-risk, where they give you the GMP?
MW: Absolutely. That is exactly what I am referring to. We’ll work with CMs to develop that GMP and we’ll come to a number, which we both agree on. Typically what we do with CMs is we’ll bid out general conditions and fees, collect somebody based upon qualifications and those numbers. At that point, we’ll work with somebody as early as possible on the project. Typically it’s been working somewhere around DDs, end of DD level. Then we’ll bring them on board, we’ll go through whatever value engineering or cost containment issues are necessary to get to our budgetary number. And then put it in stone, in GMP, and go from there.
HL: What are some of the biggest challenges that you encounter?
MW: It would have to be cost containment. We seem to be very skilled at hitting our budgets on projects that are under $2 million. Above that I can have the architect, independent cost estimator, I can have pre-construction services from the CM, and then I can put it out to bid to a general contractor, and I can still be under budget. We seem to have a very hard time controlling the last 10 percent of the design documents; we get a lot of scope creep there. We’re constantly wrestling with the desires of the university infrastructure and the desires of the 12 schools and centers.
So there is a constant battle between first costs and life costs. The better quality should produce a longer standing, better value product. But sometimes the first cost prohibits using that, so you have to dance on this line, it is a fine balance, and sometimes it is easier said than done. But in the end we always come to budget.
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High-Rise Dormitory Costs at the University of Pennsylvania in West Philadelphia.
MW: We just bid one of the oldest dorms – the Quad. It was completely renovated, I believe over a period of three years. We finished that and we immediately went into, the three high-rise structures, built I believe in the ’70s. We would go through over two summer periods and renovate them. Staggering the start, every year we would start another one. So after the first year we would have two high-rises in play, we would be finishing up one and starting another one. We are in the third summer of that now. We are in the second year of the second one. HL: Is that enough time? MW: It is amazing the amount of money and the amount of work that gets done over the course of a summer. And we hit it from the moment they move out to the moment they move back in. It is my biggest fear because the high-rises have 800 kids in them, so if it is not done I have 800 families standing out in front of it going ‘Where is my room?’ It is the biggest project I have. The pressure of getting work done over the summer is extreme pressure. HL: Is a lot of the stuff at the dormitories life safety? MW: Yes. Sprinklers. At the end of the summer we will have all undergraduate dormitories fire-suppression sprinklered. Seton Hall put a scare into a lot of people. [Seton Hall University fire at Boland Hall in South Orange, N.J., on January 19, 2000, left three people dead and 58 injured.] Prior to Seton Hall we had a program to sprinkler all the facilities. After the incident at Seton Hall, we just compressed that schedule to get them completed sooner. |
HL: And when you talk about life costs, those are not operational costs?
MW: They are. Sometimes it is life cycle costs, sometimes it is just the cost of running the equipment; sometimes it is the schools saying ‘we would like to have the state-of-the-art equipment. We feel that we are a top notch-rated institution and we should have the best available.’
We always put the options in front of them. ‘You can have that but you’re going to have to take something off the table.’ Because when we set our budgets at the very beginning, it is a zero-sum game after that. We only have this much pie to go around so if you get a bigger piece, somebody is going get a smaller piece.
HL: What are the conditions of your facilities at this time?
MW: It varies from facilities that could use a lot of attention to brand new state-of-the-art facilities. We are running a $500 million capital program right now. I have 300 projects at any given point. We are making progress everyday on the campus.
The campus suffered from years of deferred maintenance, which there has been a renewed effort, over the last 10 years, to pick up on. I’ve only been at the university for five years so all I’ve seen is a very high pace, attack upon things, but like most things there is only so much money to go around. So we prioritize and you do the best you can with the available resources.
HL: What is your oldest operating building?
MW: I’ve never been asked that question before. I’d probably guess College Hall, which is where the president’s office is. And then we go to one we just opened up – a state-of-the-art $145 million Huntsman Hall facility for Wharton, for the Business School.
HL: What are some of those larger line items under the $500 million plan that are still in design or not even in design yet?
MW: The $500 million is stuff that is currently in play. It is either in design or in construction. In design, right now, we have a new veterinary school, a research and teaching facility that will have state-of-the art wet labs and auditorium spaces as well as library spaces and animal holding spaces.
The other facility – there is a life sciences facility which also has wet labs and greenhouses spaces; it has some animal holding facilities in it too. It has some environmental rooms.
We are also doing another lab building, Skirkanich Hall, which is for the school of engineering and applied sciences. There are numerous feasibility studies out there, which I’d rather not discuss right now because they are in fund raising. But about those three buildings – Skirkanich Hall is just coming out of the ground now; life sciences is in construction now; and the vet school, the site is being created.
As you know, the University of Pennsylvania is in West Philadelphia and sometimes we have to rearrange some road to create a site and that will come out of the ground, starting to come out of the ground this fall.
HL: What is the scope of your responsibility?
MW: I handle the capital plan. I handle construction and design related issues. Usually, we will get involved with a project from its inception. When the school and center says, ‘look we have this need’ we will then get involved. We will hold the contracts for the architect and engineer. We will go through the design process, through the approval process internally. We will work with the various agencies that may or may not be involved.
We will work with the city, with the state if necessary. With the federal government if there is grant funding, and then we will put it out on the street. We will bid it, in one form or the other, whether it is a GC or a CM. We will close the project down upon its completion, both physically and financially. And we will turn it over to our brother-sister organization, who will then be responsible to maintain it, from an engineering standpoint, run it, as well as maintenance and cleaning.
HL: Are you guys doing anything, with the new construction, in terms of LEED certification or energy-efficiency, without trying to use LEED’s point system?
MW: We try to use LEED as much as possible. What happens with LEED is it starts to become a cost factor. Some of the issues just cost more. Some of the energy systems cost more. They are very good ideas but when we are dealing with a budget that says this is all we have, then we need to contain the cost as much as possible. We will do LEED item-by-item, we will have a discussion on it, and we will weigh the pros and cons from a cost-effectiveness and take it from there.
LEED certification on a lab is a little tricky, as you may know. I don’t believe that the LEED standards have been published yet for lab buildings, per se. Though we try to use them as a guideline until they become cost-ineffective.
HL: One of the things I understand about LEED is that upfront costs may be higher, but if you guys are not dealing with the operations and maintenance costs, that savings would be in the other area.
MW: Exactly. There is a complex allocated cost model that the university follows. There is a central plant for steam and chilled water, and you know, everybody is paying into this and getting out of it their need. We can and we have tried to follow the LEED with the life sciences project, in particular, as much as possible. There were some decisions that were made based upon cost. We work closely with the university’s architect office and the school centers themselves and say, ‘we realize that this is important. We realize that this is something that as we go forward in the future it is going to become more and more critical and more and more mandated, so we are trying to get in line with it, but right now we don’t have to follow that, and so for cost-effective reasons we’re choosing to do what we can.’