Capital Project Pitfalls and Pratfalls – Why You Need an Expert Team!
Due diligence is important in all phases of a capital project, so it’s vital to ensure that you have tip-top support for your project. From feasibility studies through project management, the right support will ensure your project is a success.
But, just for fun…do you want to really derail your capital project?
Try these time-honored, tried-‘n-true techniques! You won’t be dissappointed…trust me!
For the development team:
* Forego the campaign feasibility study – “I’m sure our donors will contribute!”
* Don’t bother with signed pledge forms – “We shook hands, what could go wrong?”
* Donor is paying late? Shhh, don’t tell the finance team! – “Why do they need to know?”
For the finance team:
* Don’t model the operational costs of your proposed building – “We assume op costs will be less than in our current building!”
* Skip that loan, just borrow from the endowment fund – “we’ll pay it back…someday…”
* Loan collateral? The art collection should be plenty! – “is there a problem with that?”
* Forget to budget for extra personnel costs – “I thought she was in your budget!”
* Forget to budget for financing costs – “We have to…..what?…pay back the loan?”
For the project management team:
* Don’t hire an owner’s rep – “we can figure this out ourselves!”
* Forget to budget for testing fees, environmental fees, utility relocations – “Xcel says…what?”
* Hire the architect on an hourly basis – “It’ll be cheaper, right?”
* Let the architect write the program – “Hey, did you ask for that hexagonal boardroom?”
* Skip the preconstruction phase – “That’s just ‘belts and suspenders’, right?”
* Don’t monitor project contingency – “I’m sure there’s enough money left”
* Run out of contingency and have to re-design in the middle of the project – “D’oh!!!!
And For Heaven’s Sake:
* Keep the evil bean-counters away from those saintly fundraisers – “the accountants ruin everything!”
* Keep the trustees in the dark – “let’s not make them nervous”
* Lastly, keep everyone away from the executive director – “she’s way too busy!”