CONSTRUCTION AND OTHER REAL PROPERTY IMPROVEMENTS PROJECT PLANNING AND APPROVAL

CONSTRUCTION AND OTHER REAL PROPERTY IMPROVEMENTS PROJECT PLANNING AND APPROVAL 02-06-01

Approval Requirement: Prior approval of the Board of Trustees is required for the planning and implementation of construction of a new building or other real property improvement or maintenance project:

  1. whose estimated cost would exceed $1,000,000;
  2. that would change the height or footprint of an existing building other than a temporary building; or
  3. that would make a material long-term change to the landscape.

Procedures. The administration shall prepare written procedures for obtaining the following required Board of Trustees actions:

  1. Project planning approval, including authorization to obtain design and planning services, such as architecture or engineering, for more detailed planning
  2. Project implementation approval, including approval of a recommended project budget and schematic designs and authorization to submit documentation to the State of Michigan concerning the project and to award contracts (except for design-bid-build contracts) and incur other costs on the project that, in total, do not exceed the approved project budget by more than ten percent; and
  3. For design-bid-build projects, the award of the contract after the bid process.

Project Labor Agreements. A project labor agreement (PLA) is an agreement between a construction manager, design builder, or general contractor on a University construction project and the union(s) representing workers on that project.

  1. The University will not enter into a PLA for its construction projects, but, in certain circumstances, in order to obtain project. Specific benefits in cost savings, efficiency, timeliness, and quality, it may require a construction manager, design builder, or general contractor on a project, with its contractors and subcontractors on that project, to enter into a PLA in connection with that project, and may specify one or more of the terms that the PLA must contain, including the basis, if any, upon which a contractor or subcontractor on the project may be excused from entering into the PLA.
  2. The written procedures prepared by the administration for obtaining Board approval shall include a requirement that the Vice President for Finance and Treasurer (VPFT) report to the Board on the utility of requiring that the successful construction manager, design builder, or general contractor on the project agree to enter into a PLA in connection with the project. lf a construction manager or design builder will be used for the project, the VPFT will make the report when obtaining project planning approval from the Board. lf a general contractor will be used for the project, the VPFT will make the report when obtaining project implementation approval from the Board. ln the event that the VPFT chooses to require that a PLA be used in connection with the project, the VPFT will explain to the Board, by reference to one or more project specific factors like those following, why that requirements advantageous to the University:
    1. Cost savings (e.g., from reduced costs for extra shifts or shifts starting at atypical hours, as on work near classrooms, laboratories, or offices that must be kept open during the day);
    2. Reduced risk of delay in completion of a time-sensitive project (such as work on residence halls that must be finished by the start of school in the Fall or athletic projects that must be completed before a season begins);
    3. Enhanced access to skilled trades whose work is needed to complete a project (taking into consideration other major construction projects in the area); or
    4. Improved efficiency in project management on large, complex, multi-year projects.

Emergency Construction. lf an emergency, such as damage or destruction resulting from fire, flood, or explosion, compels immediate action involving construction, so that waiting to obtain Board of Trustees approval would jeopardize, for example, the safety, security or viability of a building or increase the later cost of restoration or replacement, the administration is authorized to undertake and continue to implement measures to secure the building and to remediate the damage or destruction arising from the emergency, and to approve work necessary in light of the circumstances, even though no Board approvals for that project have been obtained. In such a situation, the VPFT shall follow the notification process described below.

Changes During Approved Construction. lf during the performance of construction approved under this Policy an unforeseen exigent condition or occurrence is identified that requires immediate action, the administration is authorized to undertake and continue to implement measures to resolve or remediate the unforeseen exigent circumstances and to approve work necessary in light of the circumstances, even though such action may result in total construction project expenses exceeding the approved budget by more than ten percent. ln such a situation, the VPFT shall follow the notification process described below.

Notification Process. Upon the occurrence of an emergency requiring immediate construction planning and implementation or upon the discovery of an exigent circumstance that is likely to result in total construction project expenses exceeding the approved budget by more than ten percent, the VPFT will promptly notify the Chair of the Trustee Finance Committee of the situation, provide information about the emergency or the exigent circumstances, identify the project costs (as known at the time), and identify the planned source of funding for the new or additional costs. Unless the Finance Committee Chair requests earlier notification, at its next scheduled meeting the VPFT will give the Finance Committee an update of the information previously provided to the Chair. The VPFT will add to the file a written memorandum that will include his/her approval of expenditures, the information discussed with the Finance Committee Chair and a description of the circumstances precipitating the costs. The Board shall receive a copy of the file memorandum. Once final costs are determined, a project budget, for emergency construction, or an amended project budget, reflecting additional work on an approved project due to exigent circumstances will be presented to the Finance Committee and the Board for approval.

Enacted: 4/13/06

Amended: 2/22/08, 1/25/13

Subsequent to the adoption of Board Policy 02-06-01, Michigan’s Fair and Open Competition in Governmental  Construction Act became law.  The Act prohibits governmental units like the University from requiring or prohibiting project labor agreements on their construction projects.  The United States Court of Appeals upheld the Act in Michigan Building & Construction Trades Council, et al v. Snyder, 729 F.3d 572 (6th Cir. 2013).