Capital Project Plan Royal Columbian Hospital Redevelopment Project Phases 2 & 3 May 2, 2017
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1 Capital Project Plan Royal Columbian Hospital Redevelopment Project Phases 2 & 3 May 2, Project Background The planning process for the redevelopment of Royal Columbian Hospital (RCH) has been underway since In 2012, the government announced its support of the Concept Plan and in 2013, provided approval to proceed with planning. In 2014, Fraser Health submitted the Business Plan for Phase One and a Phasing Plan that structured the redevelopment in three phases to allow for continuity of hospital services. On June 1, 2015, government granted approval for the Fraser Health Authority (FHA) to redevelop RCH in three distinct phases, consistent with the RCH Redevelopment Phasing Plan, to proceed with Phase One of the RCH Redevelopment and to return to government with business plans for the remaining phases as they were ready to proceed. Phase One includes the construction of the new Mental Health and Substance Use Building and a new Energy Centre. Phases Two and Three are the subject of this Capital Project Plan. On November 3, 2016, the 2016 RCH Redevelopment Business Plan for Phases Two and Three, that outlines the scope and refines the capital costs and schedule presented in the Phasing Plan, was formally submitted and approved by the RCH Redevelopment Project Board. On April 6, 2017, government granted approval for FHA to proceed with Phases Two and Three of the RCH Redevelopment project. This approval successfully structures the RCH Redevelopment project into three phases (The Project). 2. Project Objectives The RCH Redevelopment Project is aligned with the Ministry of Health s (the Ministry) strategic priorities and is part of FHA s comprehensive strategy to optimize utilization of acute care capacity and achieve efficiencies in service delivery. The Project planning is aligned with Ministry priorities from the policy paper, Setting Priorities for the BC Health System that will be used to guide the Project. An additional priority that focuses on workforce development is included, as listed below: 1. Provide patient-centred care; 2. Increase access to quality diagnostic services; 3. Increase access to specialist services; 4. Review / improve acute care services; and 5. Recruit, develop, and retain engaged, skilled, informed, and well-led workforce. Page 1 of 6
2 The Project is developed as an integration of clinical and facility/space design objectives that support foundational planning principles which have been considered in the RCH Redevelopment. The clinical and facility/space design objectives for the Project are outlined below. Clinical Objectives 1. To improve patient reported outcome measures and patient-centred outcomes. 2. To improve safety in patient care delivery and to contribute to staff well-being while increasing the experience of physical and emotional safety in the work environment. 3. To meet or exceed CIHI Qualities of High Performing Hospitals. 4. To improve access to patient care, including access to: a. Surgical Services in alignment with provincial wait times targets and diagnosis codes; and b. Diagnostic Services, including CT and MRI diagnostic and interventional services. Facility/ Space Design Objectives 1. To increase RCH acute care capacity to meet the population s growing and changing needs; 2. To adopt evidence-based design principles to ensure that design decisions are made based on industry best practice and evidence-based research; 3. To provide a facility with flexible and adaptable space that accommodates changes in health care service delivery; 4. To incorporate Lean or other methodologies for the building, its design and process improvement to improve efficiency and reduce waste; and 5. To enable advanced technology across all mediums including medical equipment (e.g. information technology/systems, and communications systems). 3. Project Status and Scope Phase Two delivers a new 11 Storey Acute Care Tower with an underground parkade and heliport on top of the building. Phase Two will be procured using a Design, Build, Finance and Maintain (DBFM) Public Private Partnership (PPP) method as it best meets the procurement objectives and provides expected value for money for taxpayers dollars. In addition to the new Acute Care Tower, the Project Company s scope of responsibility will also include providing facility maintenance services for Phase One and the existing campus. Phase Two procurement is expected to begin in 2018, with construction start planned for The new Acute Care Tower is expected to open to patients in Phase Three is critical enabling works to support the RCH campus increased capacity and to improve the delivery of patient care. It includes upgrades and expansion of the services located in the Health Care Centre and Columbia Tower. Phase Three renovations are not included in the Phase Two DBFM scope, and will be procured using a Design, Bid, Build (DBB) Capital Project Plan Royal Columbian Hospital Redevelopment Project Page 2 of 6
3 method with the assistance of a construction manager. Phase Three construction is planned to start in 2023 and complete in Upon completion of Phases Two and Three, there will be an increase in RCH campus inpatient capacity to a total of 675 beds with 600 Acute Care beds in Phases Two and Three and 75 MHSU inpatient beds in Phase One. There will be a focus on an increase in single patient rooms throughout the campus. The key elements included in Phases Two and Three of the Project are outlined in the table below: Scope of Phase Two: Acute Care Tower, Emergency Department, and Parkade Construction of a new 11-storey Acute Care Tower (including basement), with an underground parkade and heliport on top of the building. New and expanded Emergency Department, Critical Care capacity and additional Operating Rooms, Interventional and Diagnostic resources, and a unified Maternal, Infant, Child and Youth (MICY) program. Acquisition and installation of Energy Centre equipment to support the new Acute Care Tower. Demolition of the old Power Plant, Main Entrance, and the Laundry/Maintenance Building. Installation of the remaining IM / IT infrastructure. Building services to support Phases Two and Three (e.g. mechanical, electrical, water services, etc.). Scope of Phase Three: Critical Enabling Works Upgrades and expansion of the services located in the Health Care Centre and Columbia Tower to improve the delivery of patient care including: Converting four-bed inpatient rooms to single-bed and two-bed inpatient rooms An expansion of Laboratory, Medical Imaging, Pharmacy, and Food Services to support the increase in acute care capacity of the site. An expansion and renovation of the Neonatal Intensive Care Unit (NICU) and Pediatrics unit. 4. Costs and Benefits Project Costs The total estimated capital costs for Phases Two and Three of the Project are $1,099.8 million, including $881.0 million for Phase Two and $218.8 million for Phase Three. The capital costs include a total of $60.1 million in reserve accounts for both Phases as a contingency for retained capital risks. The total estimated capital costs for the PPP Project Agreement in Phase Two are estimated to be $674.2 million. The capital cost estimate for Phase Two is derived from a Parametric Estimate at a Class C quantity survey level; with an accuracy of +/- 15 percent, 18 times out of 20 which in turn Capital Project Plan Royal Columbian Hospital Redevelopment Project Page 3 of 6
4 was based upon the Program of Accommodation and informed by the indicative design and outline specification that accompany the indicative design. The capital cost estimate for Phase Three is derived from a Class D quantity survey estimate with an accuracy of +/- 20 percent, 18 times out of 20. This capital cost estimate will be further refined before the commencement of Phase Three in Project Benefits The project benefits align with the project objectives previously identified. The expected benefits of the project upon completion of Phases Two and Three include: An increase in RCH's acute care capacity by over 50% to address growing service needs, help ease congestion, introduce advanced medical technologies and enhance the working environment for health professionals; Improvements in patient-centred outcomes & patient reported measures; A shift to community care, reducing the need for acute care resources; Improvements in patient and staff safety; Improved access to: o o Surgical services in alignment with provincial wait time targets; Diagnostic services including CT and MRI; Clinical Indicators of a high performing hospital (CIHI) will be met; The creation of 3,574 direct jobs and more than 2,193 jobs in supplier industries for a total of more than 5,767 jobs during construction of Phases Two and Three; and The new building (Acute Care Tower) will be designed to Leadership in Energy and Environmental Design (LEED) Gold green building standards, and incorporate B.C. wood, as part of FHA's and the Province's commitment to environmental sustainability. 5. Project Risks The major risks associated with the Project generally relate to project scope and functionality, integration, schedule, cost and operations and maintenance risk. The RCH Redevelopment Project Management Office (PMO) will provide guidance, oversight, coordination and transparency in the management of project risks. Scope and Functionality: These risks arise when the building is not sized appropriately, and/or does not have an optimum design which results in lower functionality, less efficient clinical operations, and user dissatisfaction. Measures to mitigate these risks include: Involve key user groups in the development of the specifications and design evaluations to ensure higher user satisfaction, integration, and functionality. Manage user group expectations and input. Capital Project Plan Royal Columbian Hospital Redevelopment Project Page 4 of 6
5 The engagement of an architect and engineering team to act as shadow consultants during the Project to ensure accurate technical specifications are prepared and coordinated across all three Project phases, and ensuring compliance of design and construction. Integration Risk: These risks arise from the possibility that building on an existing brownfield site with an operational hospital could potentially impact ongoing clinical operations. Measures to mitigate these risks include: Extensive user involvement during the functional design phase to ensure integration with ongoing clinical operations. Develop the Project Agreement to include specific provisions to ensure project delivery and performance and quality standards for integration with ongoing clinical operations are met from financial close through design and construction. Schedule Risk: These risks arise from the possibility that the procurement process takes longer than expected or the design/construction process takes longer than expected. Measures to mitigate this risk include: Establish a reasonable procurement schedule that is aligned and coordinated with the Phase One construction schedule. Monitor and integrate with all ongoing construction projects on the campus. Utilization of procurement and legal documentation based on industry-accepted templates. Use of a Request for Qualifications (RFQ) process to short-list the best proponent teams. Preparation of contractual documentation templates ahead of time to be attached to the Request for Proposals (RFP) so that proponents can consider these documents during proposal preparation. Use an interactive and collaborative procurement process providing proponents opportunities for early and ongoing input. Cost Risk: This risk arises from the possibility that overall project cost and construction costs are higher than budget. Measures to mitigate this risk include: The preliminary budget is based on a quantity surveyor s estimate that is reflective of standard rates and market benchmarks, and contains cost contingencies; Inclusion of estimates of construction escalation and inflation in the budget based on current market forecasts. An affordability refresh will be carried out where the QS estimate is compared to the performance specifications, immediately prior to release of the RFP to ensure that project is estimated within budget; Inclusion of a mandatory affordability ceiling which proponents for the project RFP must meet in order to have the rest of their proposal evaluated. This will ensure Capital Project Plan Royal Columbian Hospital Redevelopment Project Page 5 of 6
6 that FHA does not enter into construction contracts without the assurance the project can be completed within budget. Operations and Maintenance Risk: This risk arises if the facility is not well-maintained over time and/or the cost of maintenance is higher than expected. Measures to mitigate this risk include: Detailed performance specifications will be included as part of the RFP to ensure the proper building systems are initially installed and commissioned and will be further incorporated into the Project Agreement to ensure the proper maintenance schedule is provided. The Project Team will include a facility maintenance (FM) provider during the Project Agreement negotiations and the design/construction process that will be able to transition to a Fraser Health FM Management role at the completion of the Project. This will ensure consistency and comprehension of the redevelopment and finalization and monitoring of contractual obligations. Capital Project Plan Royal Columbian Hospital Redevelopment Project Page 6 of 6
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