The Partnership in P3
An East Coast university realized the value of senior leadership engagement when a central plant energy P3 project encountered permitting delays early in construction. While procedures for providing schedule relief for specific delay events are typical in P3 agreements, resolving these challenges in the moment is a true test of the partnership.
In this case, the P3 agreement established a governance committee comprising university representatives and representation from senior leadership of the private partner. Members were able to convene quickly to address the problem. The dialogue of group members and subsequent actions focused not on fault, but on how to address the issue as quickly as possible.
One important step was to utilize the university’s standing in the community to engage the leadership of the permitting agency and accelerate processing. As a result, the permitting requirements were addressed as quickly as possible, leading to permit issuance and minimizing the impact of the delay. Subsequent challenges experienced during construction have been similarly addressed. The active engagement of senior university leadership and the private partner create a “solution orientation” that recognizes that true partnerships require attention, effort and collaboration among all parties.
Avoiding the headaches with an owner’s representative
When a West Coast university launched a P3 to deliver student housing, its leadership recognized that managing a P3 contract would be different than managing a traditional construction project. For example, the P3 contract was based on quality and performance standards rather than design specifications, requiring a unique approach to design review and construction.
In addition, the clock was ticking. The P3 was created to deliver an on-campus, 800-bed freshman residence hall first, followed by a nearby 1,500-unit apartment building for upper division students. Given that students typically enroll and reserve housing in the Fall quarter, any hitch in design or construction could delay occupancy an entire academic year. The university needed a governance process to support timely decision-making.
The university enlisted an owner’s representative to augment its team and to ensure that the university’s interests were represented in every project stage. The owner’s representative established a governance process in which the university’s in-house permitting and design review teams would focus on protecting the university’s interests, rather than controlling the design process. In addition, the owner’s representative helped the university deploy a digital review tool to streamline document reviews and approvals.
As the design process began, the owner’s representative - led by an architect by training - scrutinized design documents for contract compliance and resolved issues on the university’s behalf. As construction began, the owner’s representative team continued its oversight, reviewing developer performance, payment submittals and other documents. Finally, as leasing began in the midst of the Covid-19 pandemic, the owner’s representative team - which provided staff continuity from project planning and transaction through construction completion - helped the university assess several alternatives to adapt and position the projects for long-term success.