Before You Hire an Architect: Reduce Costs and Risks, Produce Better Results

Before You Hire an Architect:
Reduce Costs and Risks, Produce Better Results

Sam Frank
April 4, 2012

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INTEGRATED PLANNING

Advising nonproﬁts in:

www.synthesispartnership.com

•  Strategy

•  Planning

(617) 969-1881

•  Organizational Development

info@synthesispartnership.com

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Today’s Speaker & Host

Sam Frank
Principal
Synthesis Partnership
Assisting with chat questions:
April Hunt, Nonprofit Webinars

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Before You Hire an Architect
Facility Planning for Nonprofits:
Reduce Costs & Risks, Improve Quality
Sam Frank
Synthesis Partnership

Reduce Cost & Risk: Facility Planning for Nonproﬁts

Wednesday Webinar: August 25, 2010

SYNTHESIS
© 2010 Synthesis Partnership. All rights reserved PA R T N E R S H I P

Take-aways

Before You Hire an Architect—Reduce Cost, Risk Stress while improving Quality

Wednesday Webinar: April 4, 2012

SYNTHESIS

Take-aways

•  Where the money is
•  A sequence of steps that will minimize surprises
•  What an architectural program and budget are,
and why you need them before hiring an architect
•  How to hire an architect
•  Additional resources



SYNTHESIS

Questions for you
Project status:

•  Is your organization considering a facility project?
•  Are you in the planning or design process?
•  Are you in construction or have you recently completed a project?
•  Have you done a construction project before?



SYNTHESIS

Questions for you
Preparation:

•  Do you have a current strategic plan
…or are you developing one?
•  Do you have a current program plan?
•  Do you have a current business plan?
•  Do you know who on your staff will manage the project?



SYNTHESIS

Questions for you
If you are close to hiring an architecture ﬁrm,
what information are you providing them?

•  an architectural program
•  (I don't know what an architectural program is)
•  a construction budget
•  a project budget
•  We are asking the architect to suggest a program and budget.



SYNTHESIS

Questions for you

What is your biggest concern about moving forward?
or
What is the biggest problem you encountered?

(Please use the question box to answer.)



SYNTHESIS

Facility Planning Fundamentals
Control over costs

Reduce Cost Risk: Facility Planning for Nonproﬁts

Wednesday Webinar: August 25, 2010

SYNTHESIS

Integrated Planning



SYNTHESIS

Preparation
Integrated Planning



SYNTHESIS

Preparation
Integrated Planning Financial Model

Fundraising
Budget(s)

Architectural Program / Exhibit Brief
RFQ/P

Feasibility Study

Business Data

•  Capital

•  Operating

Case Statement

Operations

Requirements

Visitor
Mission

Identity

Experience



© 2012 Synthesis Partnership. All rights reserved
Design

S Y N T H E S I S
PA R T N E R S H I P

Project Mobilization



SYNTHESIS

Facility Planning Fundamentals



SYNTHESIS

Programming and Budgeting
Architectural Program



SYNTHESIS

Architectural Program

Specifies intentions
•  Quantitative definition
•  Qualitative definition
•  Foundation for budget

Why develop before hiring the architect?
Incorporate into RFP and contract



SYNTHESIS

Project Budget



SYNTHESIS

Budgets, Estimates Costs

Budgets Hard costs
Not just construction Acquisition
Projects affect operating budgets Construction
A budget is what you can spend Soft costs
•  Should change only if you decide to Fees
Furnishings and Equipment
Estimates
What someone else says a project will cost Other costs
•  Conceptual ($/s.f.) Contingency
Inflation
•  Design-based (unit cost takeoffs)
Borrowing
Bids Ongoing costs
An actual commitment to deliver Plant reinvestment
•  Firm or variable Operating expenses



SYNTHESIS

Design and Construction
Phases of the Design Process

Pre-Design Services
Conceptual Design
Schematic Design
Design Development
Contract Documents (drawing specifications)
Bidding or Negotiation
Construction Administration



SYNTHESIS

Selecting Architect/Construction Co.
Project Delivery Methods

Conventional
Architect + General Contractor
Finished drawings
“Hard” bid or negotiated price

Design-Build
One source of responsibility/fewer change orders
One-stop shopping
“Fast-tracking”
Fewer disputes
Better for simpler projects

Construction Management
Agent
At Risk



SYNTHESIS

Selecting Architect/Construction Co.
Selection Process for Architects
Assemble a list of architects that can deliver the product you need
Develop and issue a Request for Interest Qualifications
Develop a client-friendly contract
Develop a Request for Proposal (RFP)
Select three to six architects designers to (visit ) interview
Select 1 to 3 to receive RFP (includes program, budget contract)
Negotiate contract with selected firm



SYNTHESIS

Contracts
Client-friendly contract

Standard contracts
•  Created to protect provider
•  Many pitfalls: some obvious, some subtle

Client-friendly contract
•  Responsibility for program budget
•  Services
•  Standards expectations
•  Work product



SYNTHESIS

Financial Modeling
Purposes
View the big picture
Test options strategies
Evaluate the impact of decisions
Reduce uncertainty risk
Maintain control over operating capital budgets

Areas of Interest
Operating budget
Capital budgets or new programs
Debt capacity and financing
Cash flow
Relationships among the above



SYNTHESIS

Financial Modeling Components
Typical Model Variables
Capital Costs
Acquisition costs Furnishing, Fixtures Equipment
Legal costs
Design costs Construction costs
Contingency
Borrowing Inflation

Endowment Needs
General endowment Program-specific fund
Maintenance fund

Campaign Costs and Revenues
Administrative costs of campaign
Projected campaign revenues

Operating Costs and Revenues
Before You Hire an Architect—Reduce Cost,
Existing operating budget inflation Risk Stress while improving Quality


SYNTHESIS
© 2012 Synthesis Partnership. All rights reserved Program cost increases PA R T N E R S H I P

Financial Modeling
Dynamic Financial Modeling
Simple financial models have limited power to explore the seemingly endless
variety of what ifs that arise when a board begins to strategize about the future.
A dynamic model can open up many possibilities:
•  Explore complex financial systems, build and test scenarios in real time
•  Consider more options more thoroughly
•  See the consequences of ideas as they are raised
•  Integrate diverse planning efforts
•  Reduce risk
•  Make better decisions
•  Clarify financial issues for non-financial people
(board members, major donors, parents, alumni, faculty)
•  Make more compelling solicitations for major gifts



SYNTHESIS

Additional Resources
Critical Issues quarterly letter
# 6: Financial Modeling

http://bit.ly/SyPci06
#13: Facility Planning

http://bit.ly/SyPci06

Articles on facility issues:

Selecting an Architect

http://bit.ly/SyPselect
Client-Favorable Contracts

http://bit.ly/SyPcontracts
To Build or Not to Build”

Blog (entries on facilities)

http://bit.ly/SyPblog

Complimentary consultation

sbf@synthesispartnership.com
(by e-mail or telephone appointment) Sam Frank

Principal, Synthesis Partnership

617 969 1881

Strategy, planning, and

organizational development for nonproﬁts.



SYNTHESIS

Find listings for our current season

of webinars and register at:

NonproﬁtWebinars.com

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