Capital Project guidelines frequently asked questions


Why do we have to follow this process?

New buildings and major renovations to existing buildings incur substantial costs to the University in terms of initial expenditures as well as ongoing operating expenses. A more formal capital projects process will ensure that the University’s long-term investments in capital projects contribute to the academic and research needs of individual units and to the larger University.

Additionally, the Capital Project Guidelines provide a consistent process for submitting, planning, and approving new construction and renovation projects for General fund academic and administrative units, and ensure that all projects are approved based on the same selection criteria.

Is my unit required to follow the process and guidelines?

The Capital Project Guidelines applies to Ann Arbor campus General Fund units only.  They do not apply to the Dearborn or Flint campuses.  They also do not apply to University’s auxiliary units, which are those entities within the University that are self-supporting and do not rely on the State of Michigan for funding. Auxiliary units include the University of Michigan Health System, Athletics, Housing, and the University Unions.

What is required for the September 15th deadline?

All units seeking capital project approval are required to formally submit their capital project Statement of Need to the Provost’s Office by September 15th.  This enables the Provost’s Office, and subsequently, the Capital Projects Committee, to review and compare unit needs against institutional priorities and resources collectively versus on a case-by-case basis.  Once the Statement of Need is formally submitted to the Provost’s Office on September 15th, the Provost’s Office will spend the next few months reviewing, assessing, and comparing all unit needs.  The Provost’s Office will provide the status of the review early the following calendar year in the January or February timeframe.

For more information, refer to the sections “Submission Deadline” and “Expected Timeframes” of the Capital Project Guidelines.

Can my unit complete any project under $2 million at our own discretion?

While most projects under $2 million may be completed at the unit’s discretion, there are a few exceptions:

  • Renovations to space that is available for campus-wide use (e.g., Rackham auditorium)
  • Conversion of space to a new function (e.g., classrooms to office space)
  • Building expansions
  • Changes that affect exterior elements of the building
  • Changes in land use
  • Proposed financing with debt

Board of Regent’s approval of projects over $1 million is required and coordinated by Architecture, Engineering and Construction (AEC).

For more information on project costs and how they affect the approval and review process, refer to the section “When to Follow These Guidelines” of the Capital Project Guidelines.

My unit has the financial capacity to cover the entire cost of the capital project. Do we need to follow the Capital Project Guidelines?

If the estimated cost of the project is less than $2 million, your unit does not have to follow the process outlined in the guidelines.  However, if the estimated cost is greater than $2 million, your unit is first required to discuss the project with the Provost’s Office. All projects over $5 million must follow the Capital Project Guidelines.

For more information on project costs and how they affect the approval and review process, refer to the section “When to Follow These Guidelines” of the Capital Project Guidelines.

While having the appropriate funding in place is vital component of preparing a successful proposal, there are a number of other factors that must be considered when approving new building construction or major renovations. The Provost’s Office and Capital Projects Committee take into consideration a number of guiding institutional principles in determining need and priority of all capital project proposals. 

What if a project already underway has changed in scope and/or cost and is now a project that should technically follow the Capital Project Guidelines?

There are a number of variables that affect the final cost of a project, such as a change in the price of specific construction materials, labor related issues, or a mid-construction change in plans. Regardless of the reason for the change in project cost, it is important that the unit; Architecture, Engineering and Construction (AEC); and the Office of the Provost discuss any matters that may affect the final cost as soon as that matter arises. If the reason for the change cost is related to a change in the scope of the project, these parties would need to discuss the change well before any new plans are made.

For more information on project costs and how they affect the approval and review process, refer to the section “When to Follow These Guidelines” of the Capital Project Guidelines.

In order to fund raise for a project, we need to show schematic designs to donors. When can my unit do this?

A unit may begin showing them to donors only after the designs have been approved by the President and Board of Regents and only with permission from the CFO or Associate Vice President for Facilities and Operations. Designs must not be shared until permission is granted. A project can change drastically from the point of its initial design until it’s approved by the President and Board of Regents, and it is important that we present the most accurate depiction to our donors.

May I turn to external architectural firms for initial estimates or schematic designs?

All initial designs and estimates must be coordinated through Architecture, Engineering and Construction (AEC).

Who pays for the initial estimates by Architecture, Engineering and Construction (AEC)?

The unit is responsible for all costs associated with requesting and executing a capital project, including any fees assessed by AEC for preliminary estimates.

For information on project costs, refer to the section “Preliminary Cost Estimates” of the Capital Project Guidelines.

How do I accurately assess my unit’s needs when proposing a new project?

The “Statement of Need” is the document that units initially submit to the Office of the Provost which describes the current problem and defines future needs. Statement of Need instructions are available to units and explain the format in which units should present this information with specific details regarding the amount of supporting data needed.

For the Statement of Need instructions, refer to Proposal Package Templates and Forms.

My unit does not have the funding to pay for a capital project in its entirety. What options are there for my unit?

Before any discussions of a capital project occur with the Provost’s Office, the unit should ensure that, in general, it has the financial capacity to support a capital project (including operating costs), whether that means paying for a capital project in its entirety or using a combination of funding sources to pay for the project. In most cases, capital projects are funded using the unit’s fund balances that are available for use (i.e., unrestricted funds), gifts, or grants. Additionally, the Office of the Treasurer provides consulting on financing principles and options in constructing a viable funding plan. 

For more information on funding plans and financing, refer to the section “Financing Principles & Options” of the Capital Project Guidelines.

What criteria are used by the Provost’s Office and Capital Projects Committee when selecting and approving projects?

The Provost’s Office and Capital Projects Committee take into consideration a number of guiding institutional principles in determining need and priority of all capital project proposals.  At a minimum, all proposals must:

  • Serve the primary teaching and research missions of the University.
  • Enable the University to achieve a level of excellence that cannot be attained with existing facilities or assets.

Refer to the section “Guiding Principles and Selection Criteria” in the Capital Project Guidelines for a complete overview.

What happens when a proposal is not approved by the Provost or Capital Projects Committee?

A capital project proposal may be rejected because an insufficient needs analysis, lack of available funding, or proposed project that is inconsistent with overall University priorities.  Resubmission is possible in subsequent years.