Capitol Visitor Center: Current Status of Schedule and Estimated
Cost (15-JUL-03, GAO-03-1014T).
GAO has been providing ongoing assistance to the Capitol
Preservation Commission and the Senate and House Appropriations
Committees in their monitoring and oversight of the Capitol
Visitor Center construction project. Given the current decisions
facing the Congress, this testimony covers (1) management of the
project, (2) the estimated cost for the project, (3) the status
of the project's schedule, and (4) actions that Congress and the
AOC should consider taking to address funding gaps and other
current project issues and risks.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-03-1014T
ACCNO: A07557
TITLE: Capitol Visitor Center: Current Status of Schedule and
Estimated Cost
DATE: 07/15/2003
SUBJECT: Construction (process)
Construction contracts
Construction costs
Cost analysis
Facility management
Financial management
Government facility construction
Schedule slippages
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GAO-03-1014T
CAPITOL VISITOR CENTER
Current Status of Schedule and Estimated Cost
Statement of David M. Walker, Comptroller General of the United States
United States General Accounting Office
GAO Testimony Before the Subcommittee on Legislative,
Committee on Appropriations, House of Representatives
For Release on Delivery Expected at 1: 30 p. m. EDT Tuesday, July 15, 2003
GAO- 03- 1014T
This is a work of the U. S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
Recognizing the need for a new facility to provide greater security for
all persons working in or visiting the United States Capitol and to
enhance the educational experience of visitors who have come to learn
about Congress and the Capitol building, Congress authorized the Architect
of the Capitol (AOC) to build a new Capitol Visitor Center. The three-
story, underground facility, located on the East side of the Capitol, is
designed to be a seamless addition to the Capitol complex when completed
without detracting from
the appearance of the Capitol or its historic landscaping. Earlier this
spring, GAO and the AOC determined that the estimated budget amount of
$303.5 million for the Capitol Visitor Center (CVC) *base project* was no
longer current. Based on GAO*s recommendation, the AOC hired a contractor
to help analyze and update the cost estimate for completion of the base
project. GAO*s review of the contractor*s *base cost* estimate analysis
identified $7 million in adjustments, therefore increasing the
contractor*s $344.3 million estimate to $351.3 million. GAO also conducted
a supplemental analysis to identify potential future costs due to
additional risks and uncertainties not included in the updated estimates.
The result of this supplemental analysis disclosed that these risks and
uncertainties could raise the estimated cost to between $380 million and
$395 million. These potential additional costs do not need to be added to
the base project budget
now; however, a number of actions need to be taken to mitigate known
risks.
The AOC*s May 2003 status report indicates the project is on schedule for
substantial completion of the plaza deck in January 2005, substantial
completion of the CVC in September 2005, and final completion and opening
to the public in December 2005. However, the project is currently
experiencing delays and until the AOC compiles a fully integrated
schedule, there will not be adequate information to determine whether the
estimated completion dates are likely to be met. GAO has been providing
ongoing assistance to the Capitol Preservation Commission and the Senate
and House Appropriations Committees in their monitoring and
oversight of the Capitol Visitor Center construction project. Given the
current decisions facing the Congress, this testimony covers
(1) management of the project, (2) the estimated cost for the project, (3)
the status of the project*s schedule, and (4) actions that Congress and
the AOC should
consider taking to address funding gaps and other current project issues
and risks.
We propose that the Architect of the Capitol and Congress consider taking
actions to address the gap between the
$303.5 million current funding for the *base project* and the updated
estimates; consider how best to address
costs associated with risks and uncertainties not included in updated
*base cost* estimates; continue to resolve scope, requirements,
estimated costs, and funding sources for unresolved items; implement
controls for the
approval of changes and use of contingency funds; continue to resolve
contingency tracking and reporting issues; and expeditiously develop a
comprehensive, integrated master project schedule.
www. gao. gov/ cgi- bin/ getrpt? GAO- 03- 1014T. To view the full product,
including the scope and methodology, click on the link above. For more
information, contact Jeanette Franzel (202) 512- 9471 or franzelj@ gao.
gov or Bernard L. Ungar at (202) 512- 4232. Highlights of GAO- 03- 1014T,
a testimony
before the Subcommittee on Legislative, Committee on Appropriations, House
of Representatives. July 15, 2003
CAPITOL VISITOR CENTER
Current Status of Schedule and Estimated Cost
GAO- 03- 1014T 1 Mr. Chairman and Members of the Subcommittee:
Recognizing the need for a new facility to provide greater security for
all persons working in or visiting the United States Capitol and to
enhance the educational experience of visitors who have come to learn
about Congress and the Capitol building, Congress authorized the Architect
of the Capitol (AOC) to build a new visitor center for the Capitol. The
three- story, underground facility, located on the East side of the
Capitol, is designed to be a seamless addition to the Capitol complex when
completed without detracting from the appearance of the Capitol or its
historic landscaping. It is the largest project on the Capitol grounds in
over 140 years. According to current plans, when complete it will include
theaters, an auditorium, exhibit space, a service tunnel for truck loading
and deliveries, storage, and space for use by the House and Senate.
In response to requests from members of the Capitol Preservation
Commission (CPC) and the conference report to the Omnibus Consolidated and
Emergency Appropriations Act, 1999 (House Conference Report 105- 825), GAO
has been providing ongoing assistance to the CPC and the Senate and House
appropriations committees in their monitoring and oversight of the Capitol
Visitor Center (CVC) project. While we have provided a wide range of
assistance as the project has evolved, today, given the current decisions
facing the Congress, I will focus on (1) management of the project, (2)
the estimated cost for the project, (3) the status of the project*s
schedule, and (4) actions that Congress and the AOC should consider taking
to address funding gaps and other current project issues and risks.
Management of the Project Shortly after we began to monitor progress on
the CVC project, we made a number of suggestions to the AOC aimed at
ensuring effective management of the project based on our previous work
reviewing construction projects in all three branches of government. AOC
generally agreed with our suggestions and took the following actions.
The AOC hired a construction management firm, Gilbane, for day- to- day
detailed management of the project. Gilbane has provided project
management, including supervision of contractors* work, schedule and cost
monitoring, procurement of general conditions construction work, and
monitoring and protection of the Capitol building from potential impact of
construction. Recently, Gilbane has been working to implement a cost
tracking system that conforms to the AOC*s approved budget line items for
the
CVC. Recognizing the impact that construction of the CVC would have on
day- to- day congressional operations, AOC established a communication/
outreach effort specifically dedicated to meeting the ongoing need of
providing Congress with information regarding the project*s impact on
congressional operations, as well as progress toward completion of the
CVC. To supplement its in- house capability, AOC also entered into an
agreement with the
General Services Administration (GSA) to provide services related to
management of the
GAO- 03- 1014T 2 Sequence 1 and 2 procurements. Under the agreement, GSA
managed the procurement
process, while the AOC (the source selection authority) awarded and now
administers the contracts.
While these positive steps have been taken, there are a number of other
actions needed to strengthen project management that are outlined in the
following sections, including developing risk mitigation strategies and
improving tracking and reporting.
Estimated Cost for the Project Earlier this spring, we and the AOC
determined that the estimated budget amount of $303.5 million for the CVC
*base project* 1 was no longer current. The estimate was limited due to
uncertainties related to the preliminary nature of the design work,
unknown scope of pre- construction requirements, and security adjustments
to the design after the events of September 11, 2001. In addition, it was
already evident that the expected cost of a number of line items in the
estimate, such as utility relocation, tree preservation, temporary visitor
screening facilities, and historic preservation, would be exceeded.
Based on GAO*s recommendation, the AOC and Gilbane updated the project
cost estimates as of March 20, 2003. The AOC then contracted with Tishman
Construction Corporation (Tishman) to review the March 20, 2003 estimate
and perform a cost analysis based on information currently available. We
reviewed the methodology, assumptions, and support for the analysis, dated
May 16, 2003, including contingencies, scope items not included in the
estimates, and risks and uncertainties. 2 We also conducted a supplemental
analysis to identify potential future costs due to additional
risks and uncertainties not included in the updated estimates. While we
identified limitations to Tishman*s analysis, our review found that
Tishman*s analysis was generally reasonable given the scope and
assumptions provided by the AOC to Tishman. However, based on information
available to us as of June 16, 2003, we identified cost adjustments to
Tishman*s analysis of the base project, totaling $7 million, that we
believe need to be made. These adjustments would increase Tishman*s
estimated cost at completion for the base project from $344.3 million to
$351.3 million.
Due to the nature of the uncertainties still surrounding the project*s
estimated cost to complete and the limitations of information available at
this time, there will likely be events occurring in the future that could
further materially affect the project*s cost at completion. For example,
additional risks and uncertainties, which cannot be predicted with
certainty at this time, were not priced as part of Tishman*s analysis or
as part of our
1 The base project includes a finished visitor center shell and core, an
extended loading dock service tunnel, exterior finishes, improvements to
the East Plaza, construction of unfinished House and Senate expansion
space, exhibits, technical security systems, and a connecting tunnel to
the Library of Congress. The base project does not include other items
funded by other sources, such as finishing the House and Senate expansion
space and certain security- related enhancements. 2 Although we performed
procedures to review the methodology, assumptions, and support behind the
latest cost analysis for the CVC project, we did not conduct an audit.
GAO- 03- 1014T 3 adjusted figure. The result of this supplemental analysis
disclosed that these additional
risks and uncertainties could potentially raise the estimated cost at
completion of the base project to between $380 million and $395 million.
(See the list of additional risks and uncertainties below.) These
potential additional costs of between $30 million and $45 million do not
need to be added to the base project budget at this time; however, a
number of actions need to be taken to mitigate known risks.
In order to arrive at the potential estimated cost of $380 million to $395
million, which includes the additional risks and uncertainties, we used
the CVC project team*s lowest, most likely, and highest cost estimates for
37 project elements (e. g., structure/ site, East Front structure, Library
of Congress tunnel) and a simulation analysis to calculate different
combinations of the project team*s estimates that factored in risks and
uncertainties. Some of the larger risks and uncertainties include
unforeseen conditions (including potential underground obstructions);
building settlement; contractor coordination issues, especially as they
relate to any delays experienced; and the lack of
an approved design program in some areas. While it is not possible to
eliminate all risks and uncertainties, certain steps can and should be
taken to lessen their potential impact on the final cost of the project.
Research by the Construction Industry Institute (CII) shows project scope
is the major
Additional Risks and Uncertainties That Could Affect Project Cost or
Utilization Unforeseen conditions, including potential underground
complications
Potential for scope creep due to lack of a finalized and approved design
program in some areas
Cost overruns on *design- to- budget* scope, e. g., exhibitions and
technical security
Cost and schedule impacts due to contractor coordination issues
Project delays and subsequent contractor claims
Delays due to unique situations* e. g., government functions, terrorist
alerts, state funerals
Unanticipated client requests
Inaugural support
Unknown operator requirements (gift shop, kitchen, theater, exhibitions)
Capitol Building settlement or other damage
Impact of cost allocations to the House and Senate expansion space on the
CVC base budget
GAO- 03- 1014T 4 determinant of the cost of a project. 3 Tishman noted
that the reasonableness of AOC*s
and Gilbane*s March 20, 2003, estimate could not be determined for several
items because detailed requirements for those items have not been fully
determined or approved by the CPC. CII research also shows that the lack
of scope definition is the root cause of cost overruns, late completion
dates, excessive rework, unnecessary disputes among project participants,
and other problems associated with construction projects. 4 While we did
not identify any scope or quality changes to date that have not been
brought to the CPC*s attention, we are concerned that allowances for the
*design to budget* items (for example, the exhibition space and technical
security) may not be
sufficient to cover the expected scope and quality. We believe there is a
continual need for the AOC to align customer expectations with the
project*s scope, quality, and cost considerations. The Tishman analysis
noted that the percentage of pending changes to date compared to the
Sequence 1 contract cost is already above industry norms and that there is
the potential for scope creep. As a result, it will be important for the
AOC to implement controls for the advance and formal approval of any scope
changes.
It is general practice when performing budget estimates for construction
projects to carry a contingency allowance to cover such issues as
unforeseen field conditions and design and price changes. The Tishman
analysis evaluated the adequacy of the estimated contingency amounts and
increased the amounts in several areas. Based on the information we
gathered, we also increased the estimates for contingencies in certain
areas. As the project moves forward, it is important that the AOC
implement controls for using these contingency funds. Furthermore, we
understand that the method to be used for tracking and reporting on
contingency balances remains unresolved.
There are also items not in the base project that need to be resolved. For
example, the requirements, estimated costs, and funding sources for
wayfinding signage, 5 additional furniture, fixtures, and equipment, and
artwork have not been fully determined. In addition, the method for
operating and maintaining the CVC has not yet been determined.
Consequently, neither the updated estimates nor our supplemental analysis
include provisions for these items.
Although not considered part of the base project, the $70 million already
appropriated for the House and Senate expansion space may not be
sufficient to make the space fully functional. Our review noted that
substantial funds have already been allocated from the House and Senate
expansion space budgets. Also, substantial risk exists because the design
for the House and Senate expansion space is not complete, and it is
assumed that the expansion space will be *designed to budget.* However, to
the extent that the future design and requirements exceed the remaining
budget amounts, additional funds may be needed.
3 Construction Industry Institute, Project Change Management, Special
Publication 43- 1 (Austin, Tex.: November 1994). 4 Construction Industry
Institute, Improving Early Estimates, Implementation Resource 131- 2
(Austin,
Tex.: September 1998). 5 Code- required signage is included in the
estimated cost of the base project.
GAO- 03- 1014T 5 Status of the Project*s Schedule To expedite the project
schedule and maintain the option for use of some portion of the
CVC for the inaugural events of January 20, 2005, the AOC divided the
project into the following stages, rather than bid the total project after
completion of all design work: Pre- construction (largely complete)
Pre- construction work includes utility relocations, historic preservation
efforts, tree care, and temporary visitor facilities. These efforts were
conducted in advance of building construction to expedite the start of the
construction contractor work. The work is basically completed, with the
exception of ongoing tree preservation.
Construction (in process)
The construction contract for structural/ foundation work, referred to as
Sequence 1, was awarded to Centex Construction in June 2002 and, assuming
no delays, is scheduled to be substantially complete in Spring 2004. As
discussed below, the Sequence 1 contractor has experienced delays and the
AOC is working with the contractor to determine the impact of these delays
to the project.
The construction contract for the project interface with the East Front of
the Capitol, known as Sequence 1C, was awarded on July 11, 2003. Assuming
no delays, this work is scheduled to be complete in Summer 2004.
The construction contract for mechanical, electrical, plumbing and
interior finishes work, referred to as Sequence 2, was awarded on April
18, 2003 to Manhattan Construction. Assuming no delays, completion of the
construction work is scheduled for December 2005. However, as discussed
below, current delays in Sequence 1 could impact the Sequence 2 schedule.
Senate and House Expansion Space (in design phase)
The design of these spaces is scheduled to be completed late in 2003. The
construction of these spaces is scheduled to begin in the summer of 2004,
with completion in 2006.
Exhibits (in design phase)
The final phase of the project will involve the fabrication and
installation of the exhibits. Because installation involves climate
requirements only available in completed space, this contract is scheduled
to be awarded and begin in late 2003, with projected completion in
December 2005.
The AOC*s May 2003 status report indicates the project is on schedule for
substantial completion of the plaza deck in January 2005, substantial
completion of the CVC in September 2005, and final completion and opening
to the public in December 2005. The project, however, is currently
experiencing delays and the AOC is working with Gilbane to develop a fully
integrated schedule. Until the AOC develops a fully integrated schedule,
it will be difficult to determine whether the estimated completion dates
are likely to be met. A fully integrated schedule would combine schedules
for all of the
GAO- 03- 1014T 6 interrelated CVC projects, activities, and long- lead-
time procurements (e. g. Sequence 1,
Sequence 2, East Front interface, west refrigeration plant expansion, 2005
inauguration) into one coordinated schedule. (The Sequence 2 full schedule
is currently not available but is due from Manhattan in August.) According
to Gilbane*s June 5, 2003, report, the Sequence 1 contractor*s May update
shows a 134- workday 6 delay to the completion of Sequence 1. The AOC and
contractor are negotiating the potential impact of any delays on the
project schedule and budget. The AOC has indicated that current Sequence 1
delays have possibly led to a 40 workday overlap between the Sequence 1
and Sequence 2 schedules. Although Gilbane and the AOC are working with
Centex and Manhattan to mitigate the impact of the 40 workday overlap to
the schedule, it is currently unclear what the total effect of the current
Sequence 1 delays will be to the final project completion date or costs.
Because the project is still in the early stages of construction, there is
risk of additional delays. We included an additional $2 million in
contingency in our adjustments to the Tishman estimated cost- to- complete
for possible delay and acceleration costs.
Matters for AOC and Congressional Consideration Although the AOC has
already initiated some actions to address some issues, we identified the
following specific matters for the AOC*s and your consideration:
Expeditiously address the current funding gap between the $303.5 million
provided
for the base project and the updated estimates.
Consider how best to address the potential costs associated with the risks
and uncertainties not specifically included in the updated estimates for
the base project.
Ask the AOC to develop a plan to mitigate risk factors, to the extent
practicable, and implement recommendations made by Tishman in the May 16,
2003, report including, but not limited to:
o revalidate the program of requirements for each cost element,
o identify, contract for, and begin coordination of all operator
requirements with existing design and construction efforts,
o identify and involve the exhibit and audio visual equipment operators as
soon as possible, and
o institute a proactive schedule management and tracking system related to
potential contractor delay claims.
Determine whether to establish and fund a reserve account for any
additional amounts above the current estimates to cover future costs due
to risks and uncertainties that cannot be priced or estimated at the
current time and establish procedures for timely release of the funds to
the CVC project.
6 The current contractor schedule indicates a 5 day workweek. Therefore,
134 workdays is equivalent to 187 calendar days, or approximately 6
months.
GAO- 03- 1014T 7
Continue to resolve the scope, requirements, estimated costs, and funding
sources for unresolved items in the base project, such as fitout of the
CVC administration, guide service, first aid and gift shop spaces.
Continue to resolve the scope, requirements, estimated costs, and funding
sources for the items not in the base project, including the House and
Senate expansion space.
Implement controls for the approval of changes and AOC*s use of
contingency funds.
Continue to resolve contingency tracking and reporting issues to achieve a
single and standardized budget and reporting format.
Expeditiously develop a comprehensive, integrated master project schedule.
We will continue our monitoring efforts throughout construction. I will be
happy to answer any questions at this time.
For further information regarding this testimony, please contact Jeanette
M. Franzel at (202) 512- 9471 or Bernard L. Ungar at (202) 512- 4232.
(194320)
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