Reduction in Project Management Fees (PDAD&C #21)

Recently, we have been evaluating Project Management fees charged to capital projects. Over the past several years, the number of projects has been increasing. Correspondingly, the dollar value of projects has also been rising with volume and inflation. While the cost of providing services has also increased, the Capital Projects department has been effecting process and staff changes to be more operationally efficient. The professional and proactive approach to managing projects has directly enhanced production via staff taking on more projects on a per person basis.

Our improved efficiencies and increased project volume indicates that a re-balance of project management (PM) fees is warranted; PM fees are generally assessed against the hard-costs of the project.

Accordingly, for all capital projects approved after July 1, 2015, PM fees will be reduced to 3.25% from 3.5%.

An additional reduction will be applied to all large projects with a total project cost (TPC) greater than $75M which were approved and in progress as of July 1, 2015; the PM fee for these projects will be reduced to 2.5% from 3.5%.

Over the next several months we will continue to evaluate fees against the cost of providing services to determine whether further adjustments are merited. In the meantime these noted changes will take effect immediately.

Your project manager will be able to tell you which of your projects is affected. If you have any questions however, please feel free to contact:
Adrienne De Francesco
Executive Director, Capital Projects Group
a.defrancesco@utoronto.ca