Guest Column - November 2009
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Design Corner

Budget Reality: The True Bottom Line

By Janet L. Jordan, CPRP


The Budget Breakdown

FF&E is a separate line item within the total project budget and is considered an additional service for design specifications. Perhaps the simplest explanation of FF&E is to visualize taking your facility, turning it upside down, shaking it, and whatever is loose and falls out is considered FF&E. In recreation facilities the determination and procurement of appropriate fitness equipment is a capital investment that can range from hundreds of thousands of dollars to nearly a million dollars, and on average, the FF&E budget allocation is 3 percent to 7 percent of the hard cost budget.

Other elements considered part of FF&E may include information and telecommunication technology equipment, wayfinding graphics and art. Room identification signage in text and Braille is a building code requirement, thus included in the hard cost of construction, but wayfinding graphics and signage are an additional service and frequently included with the FF&E budget. Whether the FF&E design, specifications and procurement are listed under the hard cost budget or the soft cost budget is not as important as remembering to include those costs within the total project budget.

A reasonable rule-of-thumb to project the soft costs for a capital project, including the FF&E, would be 25 percent to 30 percent of the hard cost budget.

The legal cost to finance the project is the owner's responsibility and may or may not be included in the soft cost budget depending on whether or not the bond counsel is on retainer to the institution or organization. Many owners charge back to their own organization the administrative fees to cover an in-house owner's representative or construction manager.

Finally, inflation must be factored into the cost of any project, whether the planning and design begins within a few months or is the result of a feasibility study done last year. The design phase for many contemporary recreation facilities may take up to one full year. Therefore, current construction costs need to be adjusted for inflation or deflation, considering the state of the economy.

The true bottom line of a capital construction project—small, medium or large—is far more than the construction cost of the "sticks & bricks." Whether you are working backwards from a given dollar amount for the capital project or first conducting a feasibility study to determine project scope based on need, don't forget to consider all aspects of the total project costs when preparing the CIP request.



ABOUT THE AUTHOR

Janet Jordan is a recreation planner at Moody-Nolan Inc., an architecture, interior design and civil engineering firm specializing in healthcare, higher education, sports/recreation and public service facilities. Headquartered in Columbus, Ohio, Moody-Nolan is the largest African-American-owned and -operated architecture and engineering firm in the nation. For more information, visit www.moodynolan.com.