Facility Design and Capital Projects

• Download – Discovery Information Checklist
• Download – Project Initiation Form
• Download – Facility Design Capital Projects_Policies and Procedures

Procedures for Initiating a Capital Project

Centerplate Properties

Capital construction projects, including equipment procurement and smallwares purchases made from previously approved capital project budgets, are the responsibility of the Hospitality Solutions Group. Using a collaborative process, the Regional Vice President, facility General Manager, and the Hospitality Solutions Group will involve the appropriate culinary, sales, marketing and finance personnel to ensure that the project will meet the strategic goals of the company and the unit.
All Capital Project Requests for graphics enhancements, full construction or renovation projects, or equipment and smallwares purchases must be sent by the Regional Vice President (RVP) and/or General Manager (GM) to the Sr. Vice President of Hospitality Solutions for approval. The RVP/GM should fill out the attached Capital Project Initiation Form (see Exhibit A) and submit the form to the SVP of Hospitality Solutions for approval, with a copy sent to the Administrative Assistant of the Hospitality Solutions Group and the respective Senior VP of Operations. In addition, all information listed on the attached Discovery Information Request checklist (see Exhibit B) should be provided, along with digital photos of the facility.
Once the Capital Project Initiation Form and corresponding Discovery Information (see sample Discovery Information packets on Centerplate Spark) is received, the SVP of Hospitality Solutions and the assigned Centerplate Project Manager shall discuss each project with the RVP/GM and develop a preliminary conceptual project plan and budget (see sample plans and budgets on Centerplate Spark).
The request, along with the preliminary conceptual plan and budget, will then be submitted to the Finance Department (Vice President Area Controller) for approval. Once the project has been approved by the Finance Department and a Project Appropriation Request (”PAR”) is issued and approved (see Project Appropriation Request Procedure), then the project may commence. Once the PAR is approved, the appropriate accounting personnel will be notified by the Hospitality Solutions Group.

New Business Development

The Hospitality Solutions Group can assist with developing conceptual plans and preliminary budgets for New Business Proposals. For all new business opportunities, the originator of these projects will be the Sales and Marketing department.  The sales and marketing department should contact the SVP of Hospitality Solutions to initiate the project. No PAR approval is necessary.

Project Appropriation Request (PAR) Procedure

The PAR needs to be issued and approved for all capital expenditures for projects such as renovations or build-outs, foodservice equipment and/or smallwares. Please note that submitted a PAR is just the first step in the process, not final approval for the capital expenditure(s).
Capital expenditures are defined as any single item or group of items purchased together that exceed $1,000 of total costs and have a life of greater than twelve months.

Types of PARs

Contractual Commitment – Includes: Contractual capex, Rollover capex (contractual capital not fully expended in one fiscal year, creating the need to roll the remaining balance over to the next fiscal year) and Growth (capex to secure new business). The amount of capital and typically the timing of the expenditures are committed to in the agreement with the client.  The Return on Investment (ROI) Analysis has already been done as part of the contracting process; however, for future commitments additional ROI analysis may be required.
Maintenance / Discretionary Capital – Includes capital expenditures for which there is no contractual capital commitment.    ROI Analysis is necessary to cost justify the investment.  In lieu of a ROI analysis (if the capital expenditure cannot be cost justified), a short narrative should be prepared as to the business reason for the investment.  Examples of Maintenance/Discretionary Capital are:

• Replacement Computer/Credit Card Terminals – This category allows for replacement computers or credit card terminals to be procured through the Corporate Support Center.
• Maintenance Capital – This category would include items such as a stove that can no longer be repaired.
• Emergency Capital – Includes capital that is needed for immediate operational health or safety issues (i.e. health inspector wants a change to our existing facilities in order to continue operations or a walk-in refrigerator compressor cannot be repaired and needs to be replaced immediately for ongoing operations).

Process for Submitting a PAR

The following steps outline the submittal process for each type of PAR request.
Contractual Commitment
First and foremost, a signed agreement is necessary in order to proceed with a Contractual Commitment PAR.

• Engage the Hospitality Solutions Group for all contractual commitment purchases.
• The  operation prepares the PAR and attaches:

o   Capital approval / narrative (i.e. conceptual plan or design brief that details the specifics of the project)
o   Excerpt from contract detailing the capital commitment
o   Quote/preliminary budget from the Hospitality Solutions Group

• The GM/RVP signs and submits to SVP for approval.
• Upon SVP approval, the complete package with all attachments listed above is sent to the Area Controller for review and approval.
• Upon Area Controller approval, the package is submitted to the CFO for final approval.
• Once the PAR has all the required approvals and a PAR number is issued, the Hospitality Solutions Group will issue the PO to the vendor(s)–the ordering process does not get initiated by the operation.
• All invoices go directly to the Greenville Support Center and will be handled accordingly.

Existing Contractual Commitment PAR’s with any remaining balance at the end of a fiscal year will be “closed” (with exceptions on a case by case basis). Contractual Rollover PARs can be initiated for the next fiscal year.
Maintenance / Discretionary Capital
Note that before submitting a discretionary capital PAR, please access any contractual reserve funds first as reserve funds are put into many of our contracts to specifically address equipment replacement and repair costs.  In the event a contractual reserve fund can be used, a PAR is not necessary but the purchase request still should go through the Hospitality Solutions Group to ensure the best pricing is received.
Also, keep in mind that budget approval does not equal PAR approval; the operation still needs to go through this process for final approval to proceed with the expenditure/project.

• Engage the Hospitality Solutions Group for all facilities design, equipment and smallwares needs.
• The operation prepares the PAR and attaches the following:

o   Capital approval / narrative (i.e. conceptual plan or design brief that details the specifics of the project)
o   ROI analysis – this should be a reasonable representation of the financial impact of the purchase (for cost justification)
o   Quote/preliminary budget from the Hospitality Solutions Group
o   Client Buy-back coverage Approval – detail the terms of the buyback coverage (length of amortization/depreciation and when it starts) and attach written approval from client for the buy-back coverage (such as an email).  If buyback coverage will not be provided, detail why the client will not provide buy-back coverage.

• GM/RVP signs and submits to SVP for approval.
• Once SVP approval is received, the complete PAR package is sent to the Area Controller for review and approval.
• Upon Area Controller approval, PAR is submitted to the CFO for final approval.
• Once the PAR is approved and a PAR number issued, the Hospitality Solutions Group will issue the PO to the vendor (the ordering process does not get initiated at the operation).
• All invoices go directly to the Greenville Support Center and will be handled accordingly.

Existing discretionary PAR’s with any remaining balance at the end of a fiscal year or after three months from the last activity, whichever is first, will be “closed.”
Computers/Credit Card Terminals
Computers and new credit card terminals (Exidigm machines) are procured through the Greenville Support Center.

• Obtain a quote for the needed equipment from the Greenville Support Center IT Department.
• The  operation prepares the PAR and attaches:

o   Quote from the IT Department
o   Short Narrative detailing who the computers are for or what the operational need is for the credit card terminals.
o   If the computers or credit card terminals are part of a contractual commitment, attach the page from the client agreement detailing the commitment.

• For PAR’s up to $2,500:

o   The GM signs and submits to Area Controller for approval.
o   Upon Area Controller approval, the approved PAR will be forwarded to the IT Department.

• For PAR’s over $2,500:

o   The GM signs and submits the PAR package to the SVP for approval.
o   Once SVP approval is received, the complete PAR package is sent to the Area Controller for review and approval.
o   Upon Area Controller approval, the package is submitted to the CFO for final approval.

• Once the PAR has all the required approvals and a PAR number is issued, the IT Department will issue the PO to the vendor(s)–the ordering process does not get initiated by the operation.
• All invoices go directly to the Greenville Support Center and will be handled accordingly.

Emergency Capital
Before submitting an emergency capital PAR, please access any contractual reserve funds first as reserve funds are put into many of our contracts to specifically address equipment replacement and repair costs.

• The operation details in a Capital Expenditure Proposal /narrative (include, pending fines, etc) the nature of the emergency need and the proposed cost of the solution to the SVP and Area Controller.
• The SVP or Area Controller has the authority to approve emergency expenditures up to $5,000.  The SVP or Area Controller will provide approval via email.
• Preferably the PO for the emergency purchase is issued from the Greenville Support Center and the invoice will be processed in the Support Center.  If the operation ends up with invoice, forward the original invoice to the operation’s Field Accountant in Greenville.  The Field Accountant will process for payment and charge to the Fixed Asset Clearing Account.
• If the invoice was created by going through the Hospitality Solutions Group, the invoice (upon receipt and matching of the Emergency Purchase approval email from the SVP or Area Controller) will be paid and charged to Asset Clearing. 

Smallwares
All smallwares orders go through the Hospitality Solutions Group so that Centerplate can exercise the greatest buying power.  Please keep in mind that smallwares are handled in one of two ways depending on the following scenarios:

• Replacements – Replacement smallwares orders are for replacing smallwares previously purchased and which are included in the par stock.  For example, based on the anticipated catering levels at the operation, it was determined 2,000 place settings were the proper par stock level.  As part of these place settings, 2,000 dinner plates were originally ordered and capitalized (set up as an asset).   A smallwares inventory was done and there are now only 1,500 dinner plates indicating the 500 plates were either broken or lost.  A smallwares order for 500 dinner plates is necessary to get the dinner plates back up to the 2,000 par stock level.  The order for these plates would be expensed or applied to a Replacement Reserve Fund, if available.
• Increasing Par Stock Levels – If the original par stock level for dinner plates was 2,000 but the business demand for catering has picked up considerably, the new par stock needed to service this new demand is now 3,000 dinner plates.  Assuming the operation already has the 2,000 dinner plates on site, the additional 1,000 dinner plates would be ordered to bring the total dinner plate stock up to 3,000.  This order of plates would be capitalized since we are increasing the par level.  Now the books would have a total of 3,000 dinner plates as assets and this would be the new par stock level.

Exceeding the approved PAR Amount

It is against company policy to exceed an approved PAR’s assignment dollar value.  If the dollar value of the actual purchases will exceed the approved PAR value, these exceptions are handled as follows based on the amount of the overage:

• Minimal Overage – If the PAR overage is up to 5% of the original PAR value up to a maximum of $5,000, the Area Controller can approve the cost overrun to be charged to the original PAR.  For example, if a PAR was originally approved for $10,000 and based on the final invoices including tax and freight, the final total is $10,500; the Area Controller can approve exceeding the original PAR amount.  This is due to the $500 overrun being 5% ($10,000 x 5% = $500) of the original PAR amount.
• Material Overage – For any PAR overage greater than 5% of the original PAR value or greater than $5,000, a Supplemental PAR must be submitted for the value of the overage.  For example, if the original PAR was approved for $200,000 and the final invoices come in at $206,000, a supplemental PAR for the $6,000 overage needs to be submitted.  Note that even though the overage is less than 5% of the original PAR, the amount exceeded the maximum limit of $5,000.
• Either case noted above will require the submission of a Supplemental PAR along with an explanation narrative by the responsible party.

Leases

To clarify the policy on leasing:

• The same procedure as noted in the Discretionary Capital section above would be followed as to sourcing the best pricing for what is needed.
• A cost analysis needs to be done to calculate if a lease is a better way to go versus outright purchase.  Most often the best deal will be to purchase outright, so leases are uncommon.
• If a lease is determined to be most cost effective, it must be signed by the corporate office – it can never be signed by anyone in the field.

The above procedures are mandatory and any deviations from these policies require advance written approval from the CFO.

Hospitality Solutions group Project Management

Once the Capital Project is initiated, a project master plan shall be maintained by the Hospitality Solutions Group and updated on a monthly basis. The project master plan will provide the following:

• Name of the operation, acting General Manager and the responsible Regional Vice President
• Project Timeline
• Project Management Contact
• Discovery Compilation
• Conceptual Plan/Design Brief
• Firm(s) and their scope of services involved with the project (e.g. GC, etc.)
• Approved budget, expenditure to date (open P.O.) and remaining commitment

The Centerplate assigned Project Manager will be responsible for maintaining an active archive of all project related documentation including:

• Schematic design drawings and renderings
• Detailed design drawings
• Equipment schedules and details
• Construction change orders
• A record of payments
• Key client correspondence
• The final Project Management Report (Budget vs. Actual)

The preferred method of retaining these records is digital storage. The Hospitality Solutions Group shall collect, organize and catalog the above within one month after the project PAR is closed out.
A copy of detailed design drawings, shop drawings, and equipment schedule and specifications shall be given to the client or facility owner.

Hospitality Solutions Group: Facility Design Policies

Equipment

With respect to the direct replacement of equipment or addition of equipment, the Hospitality Solutions Group will ensure that the equipment is budgeted and will assign a purchasing agent and negotiate for the purchase and installation of the equipment. Centerplate will leverage its national purchasing power to create value for its clients and partners.

Smallwares

Requests for smallwares should come directly from the acting General Manager. Local purchases must have prior approval from the Regional Vice President and a purchase order from the Hospitality Solutions Group prior to completing the purchase. Invoices received that do not meet the company policy or do not have a Hospitality Solutions Group purchase order will be processed as local expenses and charged to the unit’s P&L.

Signage/ Trade Dress

The Project Manager will partner with the appropriate personnel (RVP, sales and marketing) to develop the design of all graphics, signage, and trade dress, including menu boards to align with Centerplate brand standards.

Brand Integrity

Maintaining Centerplate brand integrity is critical. The following elements of signage, graphics and design cannot be changed unless it is approved by the Hospitality Solutions Group:

• Sign
• Graphic elements such as logos and menu boards
• Paint and color schemes
• Surface elements such as tile, wall or floor coverings, counter tops or moldings
• Audio / Visual equipment
• Decorative lighting

Construction

The Centerplate assigned Project Manager, under the direction of the Sr. Vice President of Hospitality Solutions, and in collaboration with the RVP and GM will hire designers and architects as needed for construction projects. A project team, lead by the Project Manager, will direct the work of the designer/architect and contractors, with the Project Manager responsible for ensuring that the project is on-time, on budget and completed in accordance with the company’s strategic goals.

Choosing Local Contractors

Centerplate will contract for design, construction, and project management services as needed. This may involve separate elements of these services or combinations thereof. A complete set of services will be regarded as “turn key”. In these instances contractors will be required to provide an itemized estimate supporting their proposed fee. The contractor will act as an agent for Centerplate and be subject to all current Hospitality Solutions Group policies and procedures.
The Sr. Vice President of Hospitality Solutions or the Centerplate Project Manager assigned to the project shall consult with the Regional Vice President and/or local acting General Manager to obtain their advice regarding the use of local contractors. The format of the construction plan will depict key construction phases/tasks with a start date and a planned completion date. As a minimum, these construction phases/tasks shall be shown:

• Construction bid process
• Equipment ordering/delivery
• Utility work (rough), network cabling and point of sale installation
• Structural work
• Furnishings fabrication
• Identification and implementation of sponsorship and subcontracting  partners’ concepts
• Signs and graphics fabrication
• Furnishings installation
• Floor treatment  installation
• Signs and graphics installation
• Utility work (finished)
• Surface coverings/Painting
• Operational tests
• Team training
• Punch list

Project Managers shall report actual construction progress on a weekly basis. All prospects of delay and cost overruns are to be reported to the Sr. Vice President of Hospitality Solutions as soon as practical for approval.
The Sr. Vice President of Hospitality Solutions shall conduct proper due diligence on all contractors based on the following:

• Experience
• Audited financial reports (if available)
• Professional references
• D&B report
• Background check on ownership

Selection process shall entail:

1. Centerplate Hospitality Solutions Group to provide candidate companies with a scope of services, detailed design drawings, specifications, and projected schedule;
2. For projects over $10,000, Centerplate shall obtain two bids; For projects over $100,000, Centerplate shall obtain three bids;
3. Centerplate to review bid price and schedule against industry standards and references;
   1. From time to time the company will have cause to use the contractor favored by the client. In these cases follow the steps above and report unfavorable findings and prices 10% or more above industry standards and references; and

In all cases it is important that “cost plus” agreements be avoided. These types of agreements put the company at risk of excessive and unnecessary cost overruns.
The Sr. Vice President of Hospitality Solutions will make all final decisions related to the selection of local contractors.