Workflow Description
This workflow helps determine whether a project should be classified as Construction or Maintenance and identifies the appropriate contracting path.
The workflow begins by asking whether the project is Construction or Maintenance. Construction, handled by Design and Construction Services (D&CS), generally involves improving, constructing, repairing, erecting, installing, upgrading, or altering a structure, facility, or system. Maintenance, handled by Facilities Management (FM), generally involves upkeep, preservation, routine or recurring work, and in-kind replacement.
The first major decision asks whether the total value of all project labor, materials, and fixed equipment is greater than $50,000. Projects over $35,000 and less than $1 million must be approved as a Minor Capital Project.
For work that may qualify as maintenance, the workflow considers several questions:
- Is the work valued at less than $50,000 and can all of the work be performed by in-house staff without assistance from outside contractors? Interior or exterior painting and repainting services exceeding $25,000 are identified as construction.
- Is the need required on a routine and recurring basis, such as scheduled maintenance?
- Is the equipment purchase a duplicate or replacement in-kind?
- Is the purpose to ensure that equipment or a building system retains its functionality for its anticipated useful life through preservation or upkeep?
- Is the purpose to bring equipment, property, a facility, or a building system back to a fully functional state?
- If in-kind equipment is obsolete or no longer commercially available, is the replacement reasonably similar or only a minor deviation from the original, without constituting an improvement or upgrade?
- Is the component being purchased less than 50 percent of the cost of replacing the entire system?
- Is the work within the $1 million Minor Capital limit? The workflow notes that Office of the President (OP) approval is required to handle work as maintenance when the amount is greater than $1 million.
The workflow identifies Construction when the work involves activities such as moving, demolishing, altering, upgrading, renovating, installing, or building a structure, facility, or system according to a plan or definite process. Construction can include work involving physical plant facilities such as structures, utilities, excavations, landscaping, site improvements, drainage systems, roads, and additions, deletions, or modifications to these facilities. Interior and exterior painting or repainting of new or existing structures are also classified as construction. Upgrading or replacing a building system after it has exceeded its useful life is generally considered construction.
The workflow separately defines Repair as restoring property, machinery, systems, or facilities to working order when the work cannot reasonably be characterized as maintenance. Repair may require plans, calculations, construction inspections, compliance with the California Building Code, or changes to stamped plans, specifications, reports, or construction documents.
The workflow identifies Maintenance as the upkeep and preservation, rather than improvement, of property, machinery, systems, facilities, buildings, utility infrastructure, roads, and grounds. Maintenance consists of activities necessary to keep facilities and systems operational and in good working order. It may include replacement of components such as roofing, flooring, or HVAC equipment when the purpose is preservation rather than improvement.
A component replacement can qualify as maintenance when it is a duplicate replacement in-kind. If the original component is obsolete or no longer reasonably available, a reasonably similar replacement or minor deviation may still qualify as maintenance, provided it does not constitute an improvement or upgrade.
The workflow then identifies potential contracting methods. Depending on the outcome, the project may require a Construction Contract, a Purchase Order (PO) or Construction Contract, or another construction-related contracting process.
Additional considerations are provided for determining whether a Construction Services Agreement (CSA) or a Purchase Order (PO) is appropriate. A CSA is generally indicated when the work involves greater complexity, such as special licensing, stamped drawings, controls work, significant insurance, indemnity, bonding or warranty/defect protections, a high-risk safety profile, outages, confined spaces, fire/life-safety concerns, system testing, start-up, or commissioning. Permitting, inspections, code requirements, and OSHA considerations may require either a CSA or PO depending on the circumstances.
A PO is generally more appropriate for less complex, plug-and-play installations or component replacements, particularly when there are no piping, venting, electrical, or controls modifications, when installation services are incidental or minimal, and when the as-built condition of the building system remains unchanged.
Overall, the workflow is a decision aid for distinguishing Construction/D&CS work from Maintenance/FM work, based on the nature, purpose, cost, complexity, and extent of the work. It also provides considerations for determining whether the resulting work should proceed through a construction contract, construction services agreement, or purchase order.