Chapter 01: Capital Budget Basics

New or Updated Information for 2027-29 Capital Budget Requests

Look for the New and Updated indicators throughout these instructions for more detailed information on significant new material and changes made for the 2027-29 capital budget instructions. A summary of the most significant changes is listed below:

Required Components of Budget Submittals Updated

The organization of the E-Binders has been revised/streamlined. There are now two sections: an initial “tab” with summary documents such as the ten-year summary, FTE summary, and other documentation and a second “tab” with all requests in priority order, no longer split out by type (preservation/programmatic/grants).

E-binders must be uploaded to a secure managed file transfer (MFT) site, the same process as was adopted for the 2026 supplemental.

Project Description Updated (Chapter 3)

The project description questions have been revised/streamlined. Please copy the questions into CBS and provide your answers.

Predesign Updated (Chapters 3 and 8)

Predesigns are required for all capital projects with costs expected to exceed $15 million (to be adjusted annually for inflation).

Minor Works Updated (Chapters 3 and 5)

• Starting in the 2025-27 budget, minor works projects are generally appropriated as a lump sum without subprojects. Agencies should request minor works funding (programmatic and/or preservation) based on the amount they believe they can spend in the biennium, with supporting documentation on which specific projects they would prioritize. Agencies no longer need to enter details on individual subprojects into the CBS system. Agencies are also not required to submit C-100s for individual minor works subprojects.
• Please also note that the minor works threshold changed to $2 million ($4 million for higher education). This impacts other aspects of the capital budget submittals, for example when a C-100 cost estimate is required (for all projects over the minor works threshold).
• No later than October 1st of each even numbered year (10/1/2026), agencies must submit to the governor, house capital budget committee, and senate ways and means committee a list of minor works projects completed or in progress for the current biennium including: Project status, project cost, amount expended, and amount encumbered for projects not yet complete.
• It is the intent of the legislature that minor works be spent in the biennium for which they are appropriated, without reappropriation. If a reappropriation is requested for a minor works project, it must be justified. Please carefully consider minor works requests for the 2027-2029 fiscal biennium, taking into account minor works amounts to be reappropriated and the amount of minor works projects that can reasonably be completed in the next biennium. If a project under the minor works threshold will take longer than the biennium to complete, consider moving that project to a stand-alone request. (2026 Supplemental Sec. 8005)

The Legislature Intends to Limit Reappropriations Updated (Chapter 3)

The biennial capital budget requires new 2025-27 appropriations for grant programs and community projects to be spent in a timely manner. The Legislature does not intend to reappropriate most 2025-27 bond-funded grant program projects for which a contract has not been executed within four years or for which appropriations have not been spent within six years of appropriation.

Cost Increases Must be Justified in the Project Request Narrative Updated (Chapter 3)

Per the biennial capital budget, if a project’s total cost exceeds the total estimated in prior budget requests by 15 percent, agencies must include a statement detailing the amount and reason for the additional cost. If the increased cost is the result of a change in design, the agency must also submit a construction cost estimate (C-100 form) for the design as originally submitted.

Updates to the Financing Guidelines Provided by the Office of the State Treasurer Updated (Chapter 4)

Clarifications are provided regarding the eligible use of bonds and certificates of participation.

The Higher Education Scoring Process is Paused Updated

The higher education scoring process has been paused for the 2027-29 biennium. The additional higher education forms previously used for scoring are not required for the 2027-29 submission.

Executive Order on Project Labor Agreements New (Chapter 5)

Executive Order 25-07 requires that cabinet agencies use project labor agreements (PLAs) for capital projects with an estimated total cost over $35 million, unless the best interests of Washington State and the state agency would not be furthered by use of a PLA on the project.

These instructions are required by RCW 43.88.030 and are intended to assist agencies through the budget submittal and implementation process. The information submitted by agencies is used by the Governor, the Office of Financial Management (OFM) and the Legislature as a basis for budget decisions.

If you have questions about these instructions or specific capital budget requests, contact your assigned OFM capital budget advisor.

Predesign Updated

A predesign is a document that explores alternatives, conveys programming information, and provides a cost estimate for a proposed capital project. The predesign should assess which alternative best addresses an identified problem, opportunity, or program requirement and at what cost. Decision makers in the Governor’s Office, OFM and the Legislature use this information to determine whether the project should proceed to design and construction.

For more information, see OFM’s Predesign Manual (Chapter 7). Although predesign is often viewed as the first phase in a major capital construction project, OFM approval of the completed predesign does not guarantee additional appropriations for design or construction.

Predesigns are required for all capital projects with costs expected to exceed $15 million (RCW 43.88.110(5)) and projects with smaller appropriations that are selected by the Legislature or OFM because they are time sensitive, have high risk, or are of interest to decision makers. OFM has authority to make exceptions to predesign requirements but must report any exceptions to the fiscal committees of the Legislature with justification. Contact your capital budget analyst for approval early in the predesign process if your agency believes one or more elements of the predesign will not add value for decision makers or if there are other compelling reasons that may warrant an exception.

Design

Design documents form the basis for taking bids and constructing a facility. In the design phase, the needs, ideas, and proposals of the agency are transformed into plans and specifications. Normally, the design phase consists of three basic parts, each of which includes preparation of both drawings and written specifications: schematic design, design development, and construction documents.

For most construction projects, an architect/engineer (A/E) assumes overall responsibility as the owner’s agent for the design, bid, and construction observation functions. This includes ensuring that the project is completed within the limits of an established budget. An A/E also coordinates the activities of other design professionals working on the project.

Construction

The construction phase transforms the needs, ideas, and proposals of the agency, as defined by the plans and specifications, into a physical structure. The construction phase begins with the bid and continues through final acceptance of the construction project and equipping the building for use. Upon completion and approval of the final construction documents, including the bidding requirements, the project is ready for release to contractors to obtain proposals or bids.

There are other alternative contracting methods such as general contractor/construction manager and design build. The Capital Projects Advisory Review Board must certify a public body to use alternative contracting methods or provide project by project approval (RCW 39.10.270 and RCW 39.10.280).

Grant and Loan Programs

Grant programs and projects provide capital appropriations to state and local governments, community organizations, and tribes for public facilities and land.

Minor Works Updated

Minor works projects appear as a parent project in the budget and include multiple subprojects valued between $25,000 and $2 million each (for higher education institutions, the range is $25,000 and $4 million). Minor works projects should be completed within the biennium.

Studies

Studies funded in the capital budget, particularly with bonds, should have a clear capital budget nexus and often will lead to a capital budget request or inform capital budget decision makers.

Because many capital projects and acquisitions require more than one biennium to be completed, the capital budget includes reappropriations, which are unspent amounts from enacted appropriations made in the previous two-year budget period that are necessary to complete a project.

Agencies must demonstrate funds are needed to complete the previously approved scope of work. Reappropriations are subject to the conditions and limitations applicable to the original appropriation unless context clearly provides otherwise. Reappropriations are limited to the unexpended balances remaining at the end of the fiscal biennium. The sum of requested reappropriation and actual expenditures may not total more than the enacted appropriation for each project.

The Legislature does not intend to reappropriate most 2025-27 bond-funded grant program projects for which a contract has not been executed within four years or for which appropriations have not been spent within six years of appropriation. Reappropriations will be considered on a case-by-case basis.

Capital project administration costs are for activities directly related to the completion of a capital project or implementation of a program funded in the capital budget. See Chapter 3 for more information on agency staffing costs allowed in the capital budget and Chapter 4 for the appropriate use of tax-exempt bond proceeds related to agency administrative and staffing costs.

For the purpose of budgeting for capital projects, the fees for basic A/E services are calculated using the Guidelines for Determining Architect/Engineer Fees for Public Works Building Projects (Chapter 8) and the A/E fee schedule.

The A/E fee guidelines define the basic design services typically needed in every project and provide definitions for reimbursable expenses and extra or other services. The A/E fee schedule is intended as a ceiling for budget purposes, not a target. Agencies must evaluate their specific project requirements when requesting these fees. After projects have been appropriated, agencies are expected to negotiate with A/E consultants to purchase design services based on consultant proposals at a fair and reasonable cost, rather than simply using the budgeted amount to establish the fees.