Smithsonian Institution: Facilities Management Reorganization Is 
Progressing, but Funding Remains a Challenge (25-APR-05,	 
GAO-05-369).							 
                                                                 
The Smithsonian is the world's largest museum complex and	 
research organization, with 18 museums and galleries, 10 science 
centers, and a zoological park. The age of the structures, past  
inattention to maintenance needs, and high visitation have left  
its facilities in need of revitalization and repair. Currently,  
the Smithsonian estimates $2.3 billion in costs for		 
revitalization, construction, and maintenance projects between	 
2005 and 2013. This report addresses (1) how the current	 
condition of the Smithsonian's facilities has affected access to 
the collections, and the collections themselves; (2) what changes
the Smithsonian has made to its organization, practices, and	 
prioritization processes to improve its facilities management;	 
and (3) the estimated costs and status of the Smithsonian's	 
facilities projects and their funding sources.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-05-369 					        
    ACCNO:   A22559						        
  TITLE:     Smithsonian Institution: Facilities Management	      
Reorganization Is Progressing, but Funding Remains a Challenge	 
     DATE:   04/25/2005 
  SUBJECT:   Appropriated funds 				 
	     Cost analysis					 
	     Facility construction				 
	     Facility maintenance				 
	     Facility management				 
	     Facility repairs					 
	     Federal facilities 				 
	     Internal controls					 
	     Maintenance costs					 
	     Museums						 
	     National parks					 
	     Strategic planning 				 
	     Cost estimates					 
	     Maintenance operations				 

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GAO-05-369

                 United States Government Accountability Office

                     GAO Report to Congressional Requesters

April 2005

SMITHSONIAN INSTITUTION

Facilities Management Reorganization Is Progressing, but Funding Remains a
                                   Challenge

                                       a

GAO-05-369

[IMG]

April 2005

SMITHSONIAN INSTITUTION

Facilities Management Reorganization Is Progressing, but Funding Remains a
Challenge

  What GAO Found

To date, facilities-related problems at the Smithsonian have resulted in a
few building closures and access restrictions and some cases of damage to
the collections. For example, structural deterioration has caused closure
of the 1881 Arts and Industries Building on the National Mall pending
major repair and revitalization, as well as some facilities at the
National Zoo. Concern over asbestos in a number of storage buildings has
led to restricted access to the items within them. Some artifacts, such as
two historic aircraft, have been damaged by water leaks from deteriorated
pipes and roofing elements. Stopgap measures, such as draping plastic
sheeting over artifacts in areas experiencing leaks, have prevented or
minimized damage in other cases. Maintaining desired humidity and
temperature levels for conserving the collections is a pervasive problem
in some older Smithsonian facilities. These problems are indicative of a
broad decline in the Smithsonian's aging facilities and systems that pose
a serious long-term threat to the collections.

The Smithsonian recently centralized its facilities organization, adopted
industry best practices to maximize the effectiveness of its resources,
reviewed its operating procedures, standardized its cost-estimating
practices, and established processes for prioritizing work and allocating
funds. These changes resulted from an internal review and a 2001 report by
the National Academy of Public Administration, which recommended that the
Smithsonian centralize its then highly decentralized approach to
facilities management and budgeting in order to promote uniform policies
and procedures, improve accountability, and avoid duplication. The
Smithsonian created the Office of Facilities Engineering and Operations
(OFEO) in 2003 to assume responsibility for all facilities-related
programs and budgets-formerly divided among four administrative offices
and the individual museums and centers. Most of the museum and center
directors were either positive or neutral about the effectiveness of the
reorganization so far. Overall, the reorganization appears to be moving in
the right direction, though it has been hindered by reductions in OFEO's
staffing and budget.

The Smithsonian currently estimates that its planned capital and
maintenance projects for 2005 through 2013 will cost about $2.3 billion,
though this could grow because it is largely based on preliminary
assessments. Of 13 revitalization and construction projects active during
our review, most were on time and within budget. The Smithsonian's annual
operating and capital program revenues come from its own trust fund assets
and its federal appropriation (totaling $904.0 million in fiscal year
2004, with $184.4 million for facilities). Funding at this level would not
be sufficient to cover the facilities projects planned for the next 9
years. Ensuring credible, long-term budget planning for sustaining and
modernizing facilities involves the Smithsonian, the Office of Management
and Budget, and the Congress in examining viable funding options. While
Smithsonian officials have discussed funding options internally and with
various stakeholders, no consensus has emerged on how to deal with this
funding challenge.

United States Government Accountability Office

Contents

  Letter

Results in Brief
Background
Facility Conditions Have Generally Had Limited Effects on Access

and Collections, but Some Chronic Problems Present Ongoing Risks

Smithsonian Has Centralized Its Facilities Management Organization and
Budget to Improve the Efficiency and Effectiveness of Its Operations

Estimated Costs of Facilities Projects Have Grown, Posing Serious

Funding Challenge Conclusion Recommendation for Executive Action Agency
Comments

1 4 7

12

22

30 51 52 53

Appendixes

Appendix I:

Appendix II:

Appendix III:

Appendix IV:

Appendix V:

Appendix VI:

                                    Appendix VII: Appendix VIII: Appendix IX:

Funding Sources and Statutes Related to the Smithsonian's
Revitalization, Construction, and Minor Repair and
Maintenance Programs 54

Smithsonian Institution's Status on the Implementation of
the National Academy of Public Administration's
Recommendations 66

Organization and Responsibilities of the Smithsonian's
Office of Facilities Engineering and Operations 71

Smithsonian's Efforts to Implement Leading Practices in
Capital Decision-Making 73

Facility Revitalization and Construction Project Code
Assignment Matrix 76

Flow Chart of the Prioritization Decision-Making Process for
Minor Repair and Maintenance 77

Scope and Methodology 78

Comments from the Smithsonian Institution 80

GAO Contacts and Staff Acknowledgments 82
GAO Contacts 82
Staff Acknowledgments 82

                                    Contents

Tables Table 1: Appropriated and Estimated Costs of Smithsonian Capital 
                          and Maintenance Programs, Fiscal Years 2005-2013 31 
           Table 2: Estimated Costs for Major Revitalization Projects as   
                   Reported by NAPA in 2001 and Identified by the          
                                Smithsonian in 2005                        39 
             Table 3: Status of Fiscal Year 2004 Funded or Completed Major 
                             Projects as of April 2005                     46 

Figures	Figure 1: Figure 2:

Figure 3:

Figure 4: Figure 5:

Figure 6:

Figure 7:

Figure 8: Figure 9:

Location of Smithsonian Institution Facilities
Growth in Major Facilities Owned by the Smithsonian, in
Square Feet
Arts and Industries Building, 1977 (left) and February
2005 (right)
Sloth Bear Facility, National Zoo
Measures to Shield Collections from Asbestos, Garber
Facility, Suitland, MD
Water Stain on Wing of Lilienthal Hang Glider, National
Air and Space Museum
Rust on Fuselage of Douglas Skyrocket, D558, Caused by
Water Leak, National Air and Space Museum
Flooded Mechanical Room at the National Zoo
Alcohol-Preserved Specimens Stored on Open Shelves at
the National Museum of Natural History

Figure 10: Nonexplosion Proof Lighting Fixtures and Switches in Alcohol
Storage Rooms at the National Museum of Natural History

Figure 11: Organization of Smithsonian's New Office of Facilities
Engineering and Operations

Figure 12: Failing Heating, Ventilation and Air Conditioning System at
National Air and Space Museum

Figure 13: Antiquated Fire Suppression System, National Air and Space
Museum

Figure 14: Flooding in High-Voltage Room, National Museum of American
History

Figure 15: Leak in the Room 4303 (History Storage Room) at the National
Museum of American History

Figure 16: Site Footprint of Planned Alcohol Storage Unit (Pod 5) to be
Added to the Museum Support Center, Suitland, MD

Figure 17: Estimated Maintenance Project Costs, by Type (dollars in
millions)

                                       8

                                       10

                                     13 14

                                       15

                                       17

                                     18 19

21

21 24 34 35 36 37

38 43

Contents

Abbreviations

CII Construction Industry Institute
COTS Commercial Off the Shelf
CPPB Capital Program Planning Board
ERP Enterprise Resource Planning
FONZ Friends of the National Zoo
FY Fiscal year
HVAC Heating, ventilation and air conditioning
Maintenance Minor repair and maintenance
Mall National Mall
NAPA National Academy of Public Administration
National Zoo National Zoological Park
NHPA National Historic Preservation Act
NMAH National Museum of American History
NMNH National Museum of Natural History
NRC National Research Council
OFEO Office of Facilities Engineering and Operations
OMB Office of Management and Budget
OPP Office of Physical Plant
PC Priority Code
PFITS Capital program cuff system
PT&I Predictive testing and inspection
RCM Reliability Centered Maintenance
RR&A Renovation, repair and alteration
S&E Salary and expenses
SAO Smithsonian Astrophysical Observatory
SFS Smithsonian Financial System
Smithsonian Smithsonian Institution
VERITAS Very Energetic Radiation Imaging Telescope Array System

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separately.

A

United States Government Accountability Office Washington, D.C. 20548

April 25, 2005

The Honorable Bill Shuster

Chairman, Subcommittee on Economic Development, Public Buildings, and
Emergency Management Committee on Transportation and Infrastructure House
of Representatives

                      The Honorable Eleanor Holmes Norton

Ranking Democratic Member, Subcommittee on Economic Development, Public
Buildings, and Emergency Management Committee on Transportation and
Infrastructure House of Representatives

In January 2004, the Smithsonian Institution (the Smithsonian) closed its
1881 Arts and Industries Building to the public over concern about its
deteriorating roof structure. During 2003, the roofs of two historic
buildings of similar age and design had partially collapsed under heavy
snowfall.1 Arts and Industries-used most recently for special exhibits and
administrative offices-will need major renovation and revitalization work,
including the replacement of its aging electrical, plumbing, and heating
and cooling systems, before it can be returned to service. The failing
condition of this National Mall (the Mall) landmark is the most extreme
example of what a Smithsonian official has characterized as a "broad
decline" in its extensive physical plant.

This decline can, paradoxically, be linked to the Smithsonian's remarkable
success in carrying out its mission: "the increase and diffusion of
knowledge among men." In the years since its founding in 1846, the
Smithsonian Institution has preserved-and shared-our nation's most
precious objects and become an international leader in scholarship and
scientific discovery. From its original building on the Mall (commonly
known as "the Castle"), the Smithsonian has evolved into the world's
largest museum complex and research organization, with 18 museums and
galleries, 10 science centers, a zoological park, and various other
facilities-in total, more than 660 owned and leased buildings and other
structures, with an estimated replacement value of about $4.7 billion for
owned space as of June 2004. About 143.7 million objects and specimens

1The roofs of the B&O Railroad Museum in Baltimore, Maryland, and the O
Street Market in Washington, D.C., collapsed under the weight of a heavy
snowfall in February 2003.

are safeguarded, studied, and displayed within its facilities, including
research collections in natural history and biology, as well as icons of
our national history such as the Fort McHenry "Star Spangled Banner" and
the Apollo 11 command module.2 Two of the Smithsonian's museums on the
Mall are the most visited in the world, with a third rivaling visitation
at the British Museum and the Louvre.

With this tremendous physical expansion and popularity, however, have come
related facilities problems that include the structural deterioration of
aging buildings; heating, cooling and electrical systems that are well
past their normal life expectancy; leaks from roofs and pipes that
jeopardize the collections; inadequate exhibition and storage space; and
maintenance levels that have not kept pace with the wear and tear from
millions of visitors each year. A 2001 report by the National Academy of
Public Administration (NAPA)-based on a review requested by the Congress-
highlighted the need for major changes in the Smithsonian's facilities
management practices to help address these problems. In response to NAPA's
recommendations, as well as its own internal review, the Smithsonian has
been transforming its approach to facilities management. The NAPA report
also found that, prior to 2000, the Smithsonian underestimated its
revitalization needs, which were significantly larger than were identified
in its budget requests. The Smithsonian has updated its funding
requirements and has a 9-year estimate for the revitalization of its older
buildings, new construction, and minor repair and maintenance
(maintenance)3 work that now stands at about $2.3 billion.4

In light of ongoing concerns over the state of its facilities, you asked
us to review the Smithsonian's facilities management. Accordingly, we
addressed the following questions:

2In addition, the Smithsonian has approximately 166.3 million archival
items, such as 50,000 cubic feet of paper documents and 7 million
photographs, as of 2003.

3Minor repair and maintenance includes the upkeep of property and
equipment necessary to realize the originally anticipated useful life of a
fixed asset. It does not materially prolong the design life of property or
equipment, or add to the asset's value.

4This number includes estimates for projects that have not been through a
design phase. According to the Construction Industry Institute, these
types of estimates can vary by plus or minus 30 to 50 percent. Therefore,
the Smithsonian's overall $2.3 billion estimate should be viewed only as
an approximation based on the best current information.

o 	How does the current condition of the Smithsonian's facilities affect
public and scientific access to the collections, and the collections
themselves?

o 	What changes to its organizational structures and practices has the
Smithsonian put in place to manage its facilities, and how does the
Smithsonian now prioritize its revitalization, construction, and
maintenance projects?

o 	What are the estimated costs and status of the Smithsonian's major
revitalization, construction, and maintenance projects, including those
that have been deferred, and what are the funding sources for these
projects?

In addition, you asked us to provide information on how the Smithsonian
uses its trust fund resources and federal appropriations to fund its
operations, as well as information on the basic legal authorities under
which the Smithsonian runs its revitalization, construction, and
maintenance programs. This information is included as appendix I of this
report.

To address these issues, we visited 11 Smithsonian facilities to view and
discuss problem areas with staff from the Smithsonian's Office of
Facilities Engineering and Operations (OFEO) and the directors of the
individual facilities. The Smithsonian identified these facilities as
having significant facilities-related problems. Several facilities that we
visited consisted of multiple buildings, such as the National Zoological
Park (the National Zoo), which has more than 40 buildings. We interviewed
the OFEO director and other appropriate OFEO staff, project executives,
and project managers, as well as the Smithsonian's chief financial
officer, associate general counsel, and 16 directors of museums,
galleries, the National Zoo, a program and a research center (all internal
customers of OFEO). We reviewed a variety of Smithsonian handbooks and
guidance related to facilities project management, prioritization
criteria, decision-making processes, and best practices. We also reviewed
the NAPA report, the Smithsonian inspector general's reports, and other
appropriate reports. We researched the Smithsonian's enabling legislation,
the statutes under which it currently operates, including appropriations
acts and numerous statutes authorizing Smithsonian Institution facilities
from the 1950s. We also reviewed the Smithsonian's congressional budget
requests and audited financial statements for fiscal years 2002, 2003, and
2004. The information we gathered was sufficiently reliable for the
purposes of our review. We

conducted our work between April 2004 and April 2005 in accordance with
generally accepted government auditing standards. See appendix VII for a
more detailed explanation of our scope and methodology.

Results in Brief	Facilities-related problems at the Smithsonian have
resulted in a few building closures and access restrictions, and some
cases of harm to the collections. The problems range from major structural
deterioration to chronic leaks that have damaged a few collections and
threatened others. While the impact of these problems thus far has been
limited, ongoing deterioration continues to present serious long-term
risks to the collections' accessibility and safety. A few facilities have
deteriorated to the point where access must be denied or limited. The 1881
Arts and Industries Building on the Mall was closed to the public in 2004
for an indefinite period, pending repair of its weakened roof panels,
renovation of its interior (which has been damaged by water intrusion),
and replacement of aging systems such as heating and cooling. Another
example is the National Zoo, where deterioration has led to closures, such
as the sloth bear facility and the flight cage for birds of prey, and
problems with major systems could jeopardize the operation of other zoo
facilities. In addition, concern over asbestos in some Smithsonian storage
buildings has led to restrictions on access to the collections kept inside
them. Water leaks caused by deteriorated piping and roofing elements,
along with humidity and temperature problems in buildings with aging
systems, pose perhaps the most pervasive threats to artifacts in the
museums and storage facilities. For example, leaks have damaged two
historic aircraft at the National Air and Space Museum. Quick action by
staff and stopgap measures, such as draping plastic sheets over materials
exposed to leaks, has helped to prevent or minimize damage in other cases.
For example, Smithsonian Institution Archives staff told us that they have
had to deal with 19 "water emergencies" since June 2002; some of their
materials have been damaged by mold.

The Smithsonian has taken steps to improve its facilities management in
response to recommendations by NAPA in 2001 and its own internal review.
At that time, the Smithsonian's facilities management was highly
decentralized, with a complex, multilayered management structure and
multiple budgets. Noting that this decentralization had a direct and
sometimes adverse impact on effective management, NAPA recommended that
the Smithsonian centralize its facilities-related functions, including the
budgets for capital (revitalization and new construction) and maintenance
programs in order to promote uniform policies and procedures, improve

accountability, and avoid duplication. In 2001, the Smithsonian began
developing OFEO, which assumed responsibility for all facilities-related
programs and budgets previously divided among four administrative offices,
individual museums and science centers and the National Zoo. This office
is also adopting a variety of recognized industry best practices for
managing facilities projects, such as the use of benchmarking and metrics
recommended by the Construction Industry Institute and leading capital
decision-making practices.5 In addition, the office has assigned
responsibility for prioritizing projects to two offices under its
direction- one for capital projects and the other for maintenance
projects. Each of these offices follows a defined, consistent
priority-setting process for projects under its jurisdiction at all
Smithsonian facilities. Because the newly centralized facilities
management organization has been in place with its own budget for only
about a year, it is too early to assess its full impact. However, the
process appears to be moving in the right direction. Of the 16 directors
of museums, galleries, research centers, the National Zoo, and a program
office that we contacted (all internal customers of OFEO), 5 said that
facilities services had substantially improved, and 9 others were
generally positive or neutral about the reorganization. Two directors said
that services had deteriorated since the reorganization. Various
directors, including the 2 who expressed negative views noted that OFEO's
funding and staffing have been reduced due to budget constraints and a
Smithsonian-wide staff "buy out," thereby hindering full implementation of
the reorganization. Also, several directors, including some with positive
reactions to the reorganization, noted that communications from OFEO to
its internal customers could be improved.

The Smithsonian currently estimates that it will need about $2.3 billion
through fiscal year 2013 for its currently identified revitalization,
construction, and maintenance programs. This estimate exceeds NAPA's 2001
estimate of $1.2 billion because it reflects more recent and comprehensive
assessments of the Smithsonian's revitalization needs, covers new
construction (including about $103 million to address security
requirements),6 and incorporates more complete information about the
maintenance projects. The Smithsonian is also standardizing its cost
estimation process. Estimated costs could increase, since they are largely

5GAO, Executive Guide: Leading Practices in Capital Decision-Making,
GAO/AIMD-99-32 (Washington, D.C.: December 1998.)

6NAPA's estimate did not cover new construction because the Congress did
not ask NAPA to review the Smithsonian's construction program.

based on preliminary needs assessments and early design documents. A big
"unknown" is the timing and cost of the recently authorized National
Museum of African American History and Culture, which is likely to cost
hundreds of millions of dollars.7 Recent additions to the Smithsonian's
building inventory-the National Museum of the American Indian and the
Steven F. Udvar-Hazy Center-and the planned 2006 reopening of the
revitalized Patent Office Building will add to the Smithsonian's annual
maintenance costs. Of 13 major revitalization and construction projects
(those in excess of $5 million) being funded at the time of our review,
most were on time and within budget. Finding the funding needed for the
full range of planned capital and maintenance projects is an imposing
challenge for the Smithsonian. The institution's annual operating and
capital programs revenue, which comes from a percentage of its trust
assets and its federal appropriation, amounted to $904 million in fiscal
year 2004,8 with about $184.4 million of this total for facilities.
Revenues at this level would not be sufficient to cover the $2.3 billion
in estimated costs for the institution's planned facilities projects and
maintenance needs over the next 9 years. Officials told us that various
funding approaches and options have been discussed by the staff, the Board
of Regents, and with congressional leaders, but that no consensus for
dealing with this issue has emerged. It remains unclear at this time the
extent to which the Smithsonian will secure the funding to carry out all
of its planned facilities projects.

We are recommending that the Secretary of the Smithsonian establish a
process for exploring options for funding its facilities needs and
engaging the key stakeholders-the Smithsonian Board of Regents, the
Administration, and the Congress-in the development and implementation of
a strategic funding plan to address the revitalization, construction, and
maintenance projects identified by the Smithsonian. We provided a draft of
this report to the Smithsonian for comment. The Smithsonian concurred with
our findings and recommendation and offered some technical comments and
updates that were incorporated where appropriate.

7The founding Council of the Smithsonian's National Museum of African
American History and Culture held its first meeting on February 8, 2005,
and adopted bylaws and discussed possible collections for the Museum.
Building costs will be equally divided between congressional
appropriations and privately raised funds.

8The $904 million is based on the Smithsonian's audited financial
statements for fiscal year 2004.

Background	The Congress established the Smithsonian Institution in 1846 to
administer a large bequest left to the United States by James Smithson, an
English scientist, for the purpose of establishing in Washington, D.C., an
institution "for the increase and diffusion of knowledge among men." In
accepting Smithson's bequest on behalf of the nation, the Congress pledged
the "faith of the United States" to carry out the purpose of the trust.9
To that end, the act establishing the Smithsonian provided for the
administration of the trust, independent of the government itself, by a
Board of Regents and a Secretary, who were given broad discretion in the
use of the trust funds. The board was composed of both private citizens
and members of all three branches of the federal government, in order to
ensure "the wise and faithful use" of the Institution's funds.10 The trust
funds were permanently loaned to the Treasury to be maintained in a
separate account; and the principal was to be maintained and the interest
from that money used for the operation of the Institution. Although the
Smithsonian has grown greatly since its founding nearly 160 years ago, it
retains its essential character as a trust establishment of the United
States.

Over the last 150 years, the Smithsonian's facilities inventory has
expanded to include 18 museums and galleries, 10 science centers, a zoo,
and other facilities-most located in or near Washington, D.C., with others
in Massachusetts, New York, Florida, Arizona, Hawaii, and the Republic of
Panama. (See fig. 1.) These facilities include about 660 buildings and
structures, owned and leased, ranging from major museum buildings to
storage buildings and storage sheds. There are about 8.6 million square
feet of owned space and 1 million square feet of leased space. The
Smithsonian has estimated the replacement value for owned space at about
$4.7 billion as of June 2004. In 2003, an estimated 25 million people
visited Smithsonian museums, and researchers made 39,000 visits to use its
facilities.

9A trust is a fiduciary relationship involving a right of property held by
the trustee for the benefit of another.

10The specific composition of the board has changed somewhat since 1846 by
law, but it is still a mixture of government and private individuals. At
present, the board is composed of the Chief Justice of the United States,
the Vice President, three senators appointed by the President of the
Senate, three representatives appointed by the Speaker of the House, and
nine citizens appointed by Joint Resolution of Congress-two from the
District of Columbia and seven from the states.

Figure 1: Location of Smithsonian Institution Facilities

Source: Smithsonian Institution.

The major buildings owned by the Smithsonian range in age from about 160
years old to less than a year old, with most of the facilities growth
occurring since the 1960s. (See fig. 2.) More than half of these buildings
are more than 25 years old, 6 are designated as National Historic
Landmarks,

and about 40 are listed on the National Register of Historic Places or
otherwise eligible for special consideration under federal guidelines for
historic buildings.11 Not all of these buildings involved new
construction. For example, the Patent Office Building, Renwick Gallery,
and Cooper-Hewitt Museum were transferred to the Smithsonian after they
were built, and the Victor Building was purchased for use as
administrative offices. The two latest additions to the Smithsonian are
the Steven F. Udvar-Hazy Center (phase I), which is part of the National
Air and Space Museum and opened in December 2003, and the National Museum
of the American Indian, which opened in September 2004. The Smithsonian's
growth will continue with the construction of an aircraft restoration area
at the Udvar-Hazy Center (phase II), which the Smithsonian plans to
complete in 2008,12 and the design and construction of a National Museum
of African American History and Culture, authorized by the Congress in
2003. Beyond this, some members in both houses of Congress have expressed
interest in developing a National Museum of the American Latino
Community.13

11According to Smithsonian officials, these classifications increase the
difficulty of maintaining buildings because they involve federal
requirements for revitalization and maintenance. The National Historic
Preservation Act (NHPA) of 1966 outlines specific actions required of
federal agencies (of which the Smithsonian is considered to be for the
purposes of NHPA) to protect cultural resources listed, or eligible for
listing, in the National Register of Historic Places. The standards
require owners to maintain the original structure, fabric, and character
of the site (both interior and exterior) when making additions or
upgrades.

12The construction of the Steven F. Udvar-Hazy Center was divided into two
phases to allow for the Smithsonian to raise the private funding needed
for the project.

13Several bills were introduced in the 108th Congress to study the
creation of a National Museum of the American Latino Community. These
bills were not enacted.

Figure 2: Growth in Major Facilities Owned by the Smithsonian, in Square
Feet

Square feet in millions National Museum of the American Indian 10

9

8

7

6

5

4

3

2

1

0 1850 1860

     1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000

Year

Source: Smithsonian Institution.

Note: This figure tracks the square footage for all owned buildings as
they were added to the inventory over time. Only the major facilities are
named in the figure, although the square footage of smaller buildings is
included.

In 1995, a commission established by the Smithsonian's Board of Regents
reported that the Institution's facilities were deteriorating at an
accelerated rate because of their age, the large number of visitors, and
the Smithsonian's failure to invest sufficient resources to repair,
revitalize, and maintain them. The commission concluded that over the next
decade, a total of $50 million a year would be needed to restore the
Institution's facilities (excluding the National Zoo) to the point of
being safe for people

and appropriate for collections.14 This estimated annual need was more
than double the fiscal year 1995 appropriation for these purposes.

Generally, the Congress provided increased funding in the late 1990s, but
in 2000 the newly appointed Secretary of the Smithsonian testified that he
believed the Smithsonian's buildings were in poor condition and that the
cost to restore them would be substantially more than previously
identified.15 The Secretary stated that the Smithsonian "has hesitated to
represent to Congress the full scale of the need. Instead, we've tried to
make do." In response, the Congress directed the Smithsonian to contract
with NAPA for a review to obtain a better understanding of the use of
funds that had been provided to date. Specifically, NAPA was to determine
(1) how the Smithsonian had expended federal funds for repair and
restoration of its facilities, (2) what progress had been made in
restoring the facilities, and (3) what tasks lay ahead.16

NAPA reported in July 2001 that the federal funds appropriated for the
Smithsonian's facilities had been used properly; the Smithsonian's
facility requirements exceeded the amounts provided in the institution's
annual budgets; and the Smithsonian's 2000 estimates were based on a
reasonable, building-by-building approach and were more realistic than
previous estimates.17 NAPA found that the Smithsonian had used the funds
for highpriority repair and restoration projects but that its needs were
far greater than those identified in its budget requests. While validating
the Smithsonian's 10-year estimate of about $1.2 billion in repair and
revitalization projects, NAPA noted that this estimate could increase to
at least $1.5 billion because it was not adjusted for the effects of
inflation and reflected only rough "orders of magnitude" estimates for
later-year

14Report of the Commission on the Future of the Smithsonian Institution,
1995.

15The Secretary testified before the U.S. Senate Committee on Rules and
Administration on June 27, 2000.

16H.R. Rep. No. 106-914, at 183-184 (2000).

17National Academy of Public Administration, A Study of the Smithsonian
Institution's Repair, Restoration and Alteration of Facilities Program,
(Washington, D.C.: July 2001). This report examined repair, renovation,
and alteration but did not examine new construction.

requirements.18 The report also recommended management improvements,
including centralizing the Smithsonian's decentralized facilities
management under a single organization and implementing a more structured
maintenance program. At the beginning of our review, the Smithsonian had
implemented 25 of the 30 recommendations, including a fundamental
reorganization of its facilities management organization, funding, and
staffing and the other 5 recommendations were in the process of being
implemented. (See app. II for a listing of NAPA's recommendations and the
status of the Smithsonian's implementation of them.) In addition to the
need for management improvements, NAPA highlighted the importance of a
"continuing and substantial infusion of funds" to address facilities
needs.

We alluded to the Smithsonian's facilities problems in our High Risk
Series report on federal real property. The Smithsonian is one example of
the problem facing agencies across the federal government, which have
accumulated significant backlogs of maintenance and renovation needs and
face serious deterioration problems. Overall, we found that the condition
of federal facilities is one of alarming and accelerating deterioration.19

Facility Conditions Have Generally Had Limited Effects on Access and
Collections, but Some Chronic Problems Present Ongoing Risks

Facilities-related problems at the Smithsonian have resulted in a few
building closures and access restrictions and, in some cases, harm to the
collections. The problems range from major structural deterioration to
chronic leaks that have damaged a few collections and threatened others.
While the impact of these problems thus far has been limited, ongoing
deterioration continues to present serious long-term risks to collections'
accessibility and safety.

18Such estimates are based on feasibility studies. Order-of-magnitude
estimates can vary by plus or minus 30 to 50 percent.

19GAO, High-Risk Series: Federal Real Property, GAO-03-122 (Washington,
D.C.: January 2003), pp. 2, 15, 25.

Restrictions on Access	Serious structural problems have led to the closure
of the third-oldest building in the Smithsonian's inventory, the Arts and
Industries Building, as well as several buildings at the National Zoo. The
roof panels of the Arts and Industries Building, which opened in 1881,
have deteriorated to the point where they are considered unsound. The
building was closed to the public in 2004 and will be closed to staff in
2005. Prior to its public closure, the Arts and Industries Building housed
collections and received more than 900,000 visitors annually. The building
also provided the Smithsonian with a venue for functions related to
fund-raising. No date has been set for reopening this museum. Figure 3
shows a comparison of the North Hall of the Arts and Industries building
in 1977 and February 2005.

Figure 3: Arts and Industries Building, 1977 (left) and February 2005
(right)

Source: Smithsonian Institution.

At the National Zoo, facilities such as the sloth bear enclosure and the
flight cage for birds of prey have been rendered unusable because of
deterioration. In 2002, the National Zoological Park Director testified to
the Congress that over half of the National Zoo's buildings have seriously
compromised structural, mechanical, electrical, and fire and life-safety
systems. The National Zoo has begun a revitalization program that

currently is being funded. Figure 4 shows the deterioration at the zoo's
sloth bear facility.

Figure 4: Sloth Bear Facility, National Zoo

Source: GAO.

In addition to structural deterioration, problems with asbestos have
restricted researchers' access to certain collections. At the Garber
Facility, a complex used for storage and other support purposes,
researchers' access to 5 of the complex's 40 buildings has been restricted
because of asbestos. In these 5 buildings, the stored items must be
covered with plastic, and access is limited to a few staff. Figure 5 shows
the interior of building 16 at the Garber Facility, which provides storage
for artifacts for the National Museum of American History.

Figure 5: Measures to Shield Collections from Asbestos, Garber Facility,
Suitland, MD

                        Source: Smithsonian Institution.

Both public and researchers' access to facilities and collections also can
be temporarily restricted by revitalization projects. For example, the
Patent Office Building, the second oldest building in the Smithsonian's
inventory, has been closed to the public since 2000 for revitalization.20
This building is the home of the National Portrait Gallery and Smithsonian
American Art Museum. The Smithsonian has tried to limit the impact of the
closure for revitalization by loaning art work from these collections to
other museums or having traveling exhibits. Parts of the National Museum
of American History, the National Museum of Natural History, and the
National Zoo also have been closed to the public during revitalization
projects. At the

20The Patent Office Building was acquired by the Smithsonian in 1958 after
escaping proposed demolition. This historic "Greek Revival" building was
constructed in several stages and completed in 1867.

    National Museum of Natural History, the mammal collection was closed to
 researchers for 2 years while the exhibit hall was undergoing revitalization.

Damage and Threats to Collections

Besides affecting access to the collections, the condition of Smithsonian
buildings can also affect the collections themselves. The greatest dangers
to the collections to date have been posed by water. For example, at the
National Air and Space Museum, Smithsonian officials showed us that leaks
have damaged both the Lilienthal Hang Glider, which helped pioneer early
flight design by influencing the Wright Brothers, and the Douglas
Skyrocket, D558, the first airplane to break Mach 2. (See figs. 6 and 7.)
Water also damaged 200 books at the Smithsonian Institution Archives due
to a drain back-up.

Figure 6: Water Stain on Wing of Lilienthal Hang Glider, National Air and
Space Museum

Source: Smithsonian Institution.

Figure 7: Rust on Fuselage of Douglas Skyrocket, D558, Caused by Water
Leak, National Air and Space Museum

Source: Smithsonian Institution.

Smithsonian officials identified several incidents and vulnerabilities
related to water, including:

o 	In February 2005, a broken pipe at the National Zoo's mechanical room
that supports the pools for the seals and sea lions flooded the room with
8 feet of water and damaged controls, pumps, and motors. The pipes were
scheduled for replacement this spring. See figure 8.

Figure 8: Flooded Mechanical Room at the National Zoo

Source: Smithsonian Institution.

o 	At the Smithsonian Institution Archives, 19 water emergencies have
occurred since June 2002, and the facility has formed an emergency
response team to deal with them. "We are excellent drapers of plastic,"
according to an Archives official. Some of the leaks were directly above
collections, but quick action by the staff averted damage to the
collections.

o 	At the National Museum of African Art, breaches in the roof membrane,
malfunctioning valves, and clogged pipes often leak over galleries,
collection storage areas, and offices. Replacing the roof and the water
condensate system could address these problems, but other, higher
priorities have received funding instead.

o 	At the Renwick Gallery, gutters have leaked into the Grand Salon and
adjacent gallery, but damage to artwork has been avoided. Repairs are
scheduled for fiscal year 2005.

o 	At the Freer and Sackler Galleries, water has leaked many times in
storage areas and the library, and condensation poses a serious problem in
the Freer Gallery's exhibition areas. To date, no major damage to the
collections has occurred.

Another area of concern is related to fluctuating temperature and
humidity, particularly in a museum setting where collections must be
stored and displayed in precise ways. While we toured various facilities,
operations and maintenance managers showed us aging heating, ventilation,
and airconditioning systems that, the managers said, were no longer
consistently maintaining the temperature and humidity needed to protect
collections from deterioration. At the Renwick Gallery, for example,
fluctuations in temperature and humidity produced by steam outages have
caused weeping of the plaster on the gallery walls and could potentially
damage art work. Poor ventilation at the Smithsonian Institution Archives
caused high humidity, resulting in mold damage that made some records
unreadable.

Lastly, safety concerns and hazardous materials also threaten some
collections. For example, at both the National Museum of Natural History
and the Smithsonian Environmental Research Center, biological specimen
collections are preserved in an alcohol solution that poses a safety risk
from fire or explosive vapor that has to be controlled. Additionally, at
the Smithsonian Environmental Research Center, collections are stored in
deteriorating surplus trailers, many of them over 20 years old. Figures 9
and 10 depict problems with the storage of specimens stored in
alcohol-filled containers of various sizes at the National Museum of
Natural History. Several large rooms of about 10,000 square feet are used
to store these containers, though current code limits such rooms to 500
square feet for safety purposes. Figure 9 shows that the storage
containers are not enclosed, and figure 10 shows alcohol storage rooms
that do not have current code-required explosion proof electrical
equipment and fixtures.

Figure 9: Alcohol-Preserved Specimens Stored on Open Shelves at the
National Museum of Natural History

Source: Smithsonian Institution.

                        Source: Smithsonian Institution.

The Smithsonian is working to address these situations. Containment for
these collections that is up to code is costly and will require new
construction, which is currently under way.

Smithsonian Has Centralized Its Facilities Management Organization and
Budget to Improve the Efficiency and Effectiveness of Its Operations

The Smithsonian has recently reorganized its facilities management
function to improve its operational effectiveness and make more efficient
use of limited staffing and funding resources. In July 2001, NAPA reported
that the Smithsonian's decentralized organizational structure and
management practices, in some cases, had a direct and adverse effect on
the planning, design, and construction activities that were integral to
the institution's revitalization, construction, and maintenance programs.
In response to NAPA's recommendations for improvement and its own internal
review, the Smithsonian began in fiscal year 2001 to centralize its
facilities management, adopted a variety of industry best practices for
managing facilities projects, and established a priority process for
facilities management. Because of the relative newness of the
reorganization, it is too early to assess its effectiveness, though it
appears to be moving in the right direction. Smithsonian museum, program,
and center directors (the internal customers directly affected by the
reorganization) had generally positive or neutral reactions to the
reorganization, although several directors believed that OFEO needed to
improve communications with them. Many of the directors, as well as OFEO
officials, noted that reductions in OFEO's staffing and budget have
hindered fully implementing the reorganization.

Smithsonian Has Centralized the Responsibility for Facilities Management

At the time of NAPA's 2001 report, the Smithsonian's facilities operations
were decentralized. Three distinct organizations-the offices of Physical
Plant, Environmental Management and Safety, and Protection Services- were
loosely integrated under the central Office of Facilities Services, but
each organization had its own director and budget. The Office of Physical
Plant was further divided into 14 different divisions and offices. These
organizations were responsible for facility planning, design,
construction, and maintenance activities for the museums and research
facilities. However, the National Zoo had its own budget and on-site staff
to perform these functions for itself and for its Conservation and
Research Center at Front Royal, Virginia. In addition, each museum or
other major facility had its own separate funding and organization for
providing custodial services, loading dock management, trash collection,
and minor maintenance.

In its 2001 report, NAPA found that the sheer size of the Office of
Physical Plant (with a span of control encompassing 14 different units)
and the wide diversity of its functions (operations, repair, restoration,
planning, design, and maintenance) led to a hybrid organization that was
awkward to manage, diffused responsibility and accountability, and did not
facilitate a focus on the office's three primary responsibilities: (1)
operation and maintenance of the physical plant; (2) repair and
restoration of facilities; and (3) new construction. NAPA also noted that
the functions and tasks associated with operating and maintaining
facilities were common to all of the Smithsonian buildings and that
overlap and duplication were likely when more than one organization was
responsible for carrying out the same functions. NAPA concluded that
centralizing facilities management should enable the Smithsonian to
provide more efficient and effective services by putting a single
organization in charge. According to NAPA, this centralization would
promote uniform policies and procedures, improve accountability, and avoid
overlap and duplication.

In March 2001, before NAPA issued its report, the Smithsonian hired the
former director of Facilities Engineering at the National Aeronautics and
Space Administration to lead the reorganization of the facilities program
and to head the new organization. The Director met with the NAPA team and
studied its findings and recommendations. He also met with the
Smithsonian's senior leadership and, with the help of a small internal
team, listened to priorities and suggestions from various customers,
stakeholders, and other Smithsonian staff in developing a plan for the
reorganization.21

The result of this effort was the creation, in fiscal year 2004, of the
Office of Facilities Engineering and Operations (OFEO), a new, flatter
facilities management organization. OFEO assumed responsibility for all
facilityrelated programs and budgets that had been divided among four
offices the National Zoo, and each museum or other major facility. OFEO
consists of eight offices-Project Management; Facilities Planning and
Resources; Engineering, Design, and Construction; Facilities Reliability;
Facilities Management; Protection Services; Safety and Environmental
Management; and the Smithsonian Tropical Research Institute Facilities
Operations-all reporting directly to the OFEO director and funded through
one budget (see fig. 11). OFEO received its first budget in fiscal year
2004.

21Museums and Facilities: Critical Assessment and Improvement Objectives,
September 2001.

Management Source: Smithsonian Institution.

Appendix III provides a detailed description of the responsibilities of
each OFEO office. While all eight OFEO offices play a role in the
facilities program, the Office of Project Management oversees all
revitalization and construction projects, and two offices-Facilities
Management and

Facilities Reliability-manage maintenance projects. The Office of Project
Management develops preliminary project scopes, schedules, and budgets;
monitors, directs, and reports on updated scopes, schedules and budgets
for projects; and coordinates the efforts of stakeholders, designers, and
construction execution.22 Major projects (in excess of $5 million) are
overseen by project executives, small projects ($5 million and less.) by
project managers. For major projects, such as the construction of the
National Museum of the American Indian and the revitalization of the
Patent Office Building, monthly reports indicate the status of each
project's cost and schedule. The OFEO director attends a monthly
operational review of major revitalization and construction projects with
museum directors, and the Smithsonian's deputy secretary/chief operating
officer, general counsel, and chief financial officer are briefed
approximately quarterly on the major projects. The Office of Project
Management is also responsible for the initial prioritization of
revitalization and construction projects.

The Office of Facilities Management provides day-to-day facilities
maintenance services, including preventive maintenance, janitorial and
grounds maintenance, transportation and mail delivery, building management
for leased facilities, landscaping, and system start-ups for newly
completed facilities. The responsibility for maintenance is divided among
eight zones. A zone may consist of one or more buildings. Each zone has a
manager who is responsible for maintenance in that zone. If Facilities
Management staff cannot perform the work, then the work is sent to the
Office of Facilities Reliability.

22A revitalization or construction project consists of three main steps:
(1) project planning and development, which covers the initial project
identification, scope and cost development, prioritization, and any
project steps up to design; (2) design, which includes developing the
design criteria package, obtaining architectural and engineering services,
and preparing, reviewing and approving the final design; and (3)
construction, which includes bid packages, a request for technical
proposals, procurement of a construction contract, and contract
administration and management procedures.

The Office of Facilities Reliability provides strategic planning and
oversight for maintenance, manages the Reliability-Centered Maintenance
program,23 develops tasks and processes and then monitors work efforts,
collects and analyzes data and metrics on the maintenance program,
purchases utilities, manages agencywide service contracts, operates
building automation services, and repairs large equipment in central
shops. The office uses both in-house and contractor personnel to
accomplish its objectives. When a minor repair is too large for Facilities
Management, Facilities Reliability uses its staff or contracts out the
work. About 15 percent of minor repairs are performed in-house, and about
85 percent are contracted out. Working with Facilities Management and
others, Facilities Reliability is responsible for prioritizing minor
repair projects. When we concluded our review in April 2005, the offices
of Facilities Management and Facilities Reliability were being
consolidated into one office that will be responsible for all maintenance
projects.24

Smithsonian Has Adopted Industry Best Practices to Improve Its Management
of Facilities Projects

In reorganizing its facilities management, the Smithsonian is
incorporating recognized industry best practices so that its resources
would go as far as possible toward addressing its rapidly growing
revitalization, new construction, and maintenance workload.

For example, OFEO's framework for project management is considered a best
practice, according to an independent review of an OFEO project by a
contactor working for the Smithsonian Inspector General. OFEO also has
been developing several handbooks to establish procedures and provide
guidance on various aspects of facilities management. Its Facilities
Project Management Handbook specifically addresses the Construction
Industry Institute's (CII) practices of benchmarking and metrics,
partnering, and

23Reliability-centered maintenance is a maintenance strategy that
logically incorporates the optimum mix of reactive, preventive, predictive
testing and inspection, and proactive maintenance practices.

24The merger is taking place now but will not be reflected in the budget
until fiscal year 2006.

preproject planning.25 OFEO has begun to implement these practices by, for
example, establishing and tracking metrics, such as holding contract
schedule growth to 10 percent or less and contract cost growth to 2
percent or less. Both Facilities Management and Facilities Reliability
periodically survey their internal customers to determine their level of
satisfaction with the services provided to them. Furthermore, OFEO has
adopted CII's Pre-Project Planning Handbook and uses CII's Project
Definition Rating Index26 to evaluate the progress of projects at various
stages-both tools recommended by CII to support the best practice of
preproject planning. OFEO has also just begun to use CII's Estimate Score
Program,27 a tool designed to enhance the accuracy of early estimates.
CII's best practices form the core of the practices taught to OFEO staff,
and according to OFEO officials, these practices are routinely used in
various phases of projects. In addition, staff participate in CII
committees and teams, including those that develop best practices and
participate in Federal Facilities Council committees.28

The Smithsonian has also adopted leading practices in capital decision
making, such as identifying its inventory of assets, determining their
condition and the gap between current and needed capabilities, and ranking
and selecting projects according to their priority, type of work, and

25The Construction Industry Institute is a research organization composed
of construction contractors and owners seeking to improve the construction
and capital investment process. The institute has identified 14 best
practices, 8 of which-alignment, benchmarking and metrics, change
management, disputes prevention and resolution, implementation of
products, partnering, preproject planning, and team building-are aimed at
owners such as the Smithsonian and 6 of which are aimed principally at
contractors and manufacturers.

26This is a checklist of 64 scope definition elements in a 1,000-point
scoring system; each element is weighted on the basis of its relative
importance to other elements. The overall rating determines whether the
project should proceed through the budget cycle, allowing the Smithsonian
to make better investment decisions.

27This is a tool for measuring how well an estimate has been prepared for
a particular project. It gives a score based on rating each of 45 elements
that can have a significant impact on an estimate. It provides a reality
check on the estimate for better decision making.

28The Federal Facilities Council's purpose is to promote continuing
cooperation among sponsoring federal agencies, and among the agencies and
other elements of the building community in order to advance building
science and technology-particularly with regard to the design,
construction, acquisition, evaluation, and operation of federal
facilities. The Smithsonian Institution is a sponsoring entity of the
Federal Facilities Council.

fiscal year.29 (See app. IV for more detail on how the Smithsonian is
implementing these practices.) Other industry practices that OFEO has
adopted include reliability-centered maintenance, which covers predictive
testing and inspection, and preventive maintenance.

Smithsonian Has Established a Prioritization Process for Allocating
Limited Funds to Revitalization, Construction, and Maintenance Projects

OFEO's Offices of Project Management and Facilities Reliability share
responsibility for prioritizing projects-Project Management for
revitalization and construction projects and Facilities Reliability for
maintenance projects. Other organizations throughout the Smithsonian have
input into these decisions. The Smithsonian's Capital Planning Board,30
Secretary, and Board of Regents approve prioritizations of revitalization
and construction projects in the institution's 5-year capital program, and
the OFEO director approves prioritizations of maintenance projects.

The Office of Project Management, working with the museums and other
facility groups, develops an annual list of new and previously submitted
projects to be prioritized for inclusion in the annual 5-year capital
plan. Using OFEO's priority code assignment matrix, the office assigns
each project one of four condition levels (catastrophic, critical,
routine, and can defer) and one of five project types (shell/system
failure, code compliance/security, nonroutine capital repairs,
energy/operational efficiency, and alterations and modifications). This
assignment determines the project's priority code, which may be from one
to five. For example, a shell/system failure project assigned a
catastrophic condition level would receive a top priority code of "one"
for the budget year in which funding is sought. (See app. V for the
priority code assignment matrix and definitions of its elements.). After
Project Management completes the prioritized list, it sends the list to
the Smithsonian under secretaries and directors for review and approval.
Project Management then uses the approved list to update the 5-year
capital plan and sends the updated plan to the Smithsonian's Capital
Planning Board for review. The Capital Planning Board reviews the plan in
the context of the Smithsonian's guidelines and needs. Only projects
supported by this review and then by the Smithsonian Secretary's review

29GAO/AIMD-99-32 (Washington, D.C.: December 1998.)

30The Smithsonian's Capital Planning Board is made up of the chief
financial officer (chairperson); deputy secretary and chief operating
officer; under secretaries for Science, and Art; chief executive officer
of Business Ventures; general counsel; director of Policy and Analysis;
chief information officer; and OFEO director.

are included in the updated 5-year capital plan, which accompanies the
annual budget submission to the Office of Management and Budget. The Board
of Regents approves the Smithsonian's annual budget submission, including
the 5-year capital plan. According to Smithsonian officials, this process
ensures that the institution's limited capital funding is allocated to the
highest priority needs.

The Office of Facilities Reliability, in conjunction with the museums and
other facility groups, identifies maintenance projects, taking into
account customer input; annual safety, health and environmental
inspections; code and regulatory requirements; and facility assessments.
Facilities Reliability then ranks these projects on a scale from 1 to 10.
For example, a project to address an imminent facility failure that poses
a potential safety, health, or environmental issue is ranked as a 1, the
highest priority; a project to address a moderate disruption to a
facility's functions is ranked as a 6, and a project that involves no
expectation of failure or effect on safety or health is ranked as a 10,
the lowest priority. Facilities Reliability then uses a funding matrix to
determine which projects will be funded. Any projects that cannot be
funded go into the office's inventory of projects. (See app. VI for the
priority decision-making flowchart and maintenance ranking scale.)
According to Facilities Reliability officials, if facilities-related
emergencies occur during a year, funds obligated for other projects may
have to be deobligated.

Directors Generally Expressed Positive or Neutral Reactions to OFEO but
Noted That Restructuring Has Been Hindered by Staffing and Budget
Reductions

The 16 Smithsonian directors of museums, galleries, research centers, the
National Zoo, and a program office that we interviewed expressed a range
of opinions about the reorganization's impact on facilities services. Five
directors said that services had improved substantially and 9 others were
generally positive or neutral about the reorganization. Two directors said
that services had deteriorated since the reorganization. Various
directors, including the 2 that had expressed negative views, pointed out
that after OFEO was reorganized, the Smithsonian had a staff buyout31 that
led to staffing and funding reductions in OFEO. In total, OFEO lost 109 of
about 1,750 staff and the funding for their positions-59 in maintenance,
39 in security, and 11 in other OFEO offices, according to a Smithsonian
official. These reductions, together with the recent opening of the
National

31The buyout was available to all Smithsonian employees but was mostly
taken by individuals already eligible for retirement or early retirement,
according to a Smithsonian official.

Museum of the American Indian, have negatively affected both maintenance
and security services, according to various directors. Also, several
directors, including some with positive reactions to OFEO, noted that
communications from OFEO to its internal customers could be improved.

Although implementation of the centralization effort is still a work in
progress, senior OFEO officials believe the reorganization is progressing
well. While full implementation has been hindered by both staffing
shortages and budget constraints, OFEO has obtained permission to fill 19
of these positions in crucial areas.32

Estimated Costs of Facilities Projects Have Grown, Posing Serious Funding
Challenge

The Smithsonian currently estimates that it will need about $2.3 billion
for fiscal years 2005 through 2013 for its planned revitalization,
construction, and maintenance projects, but this estimate could change as
information is updated and new facilities are opened or authorized. As of
April 2005, of the 13 funded major revitalization and construction
projects that are active or were completed in fiscal year 2004, most were
on time and within budget. Given its level of annual operating and capital
program revenues (about $904 million in fiscal year 2004, including about
$184.4 million for the facilities) for all of its activities, it is
unclear how the Smithsonian's planned facilities needs will be funded over
the next 9 years.

Current $2.3 Billion Estimate Reflects Updates but Could Change

The Smithsonian's $2.3 billion estimate for the next 9 years includes
about $1.43 billion for revitalization projects (including facilities
planning and design), about $136.2 million for construction projects, and
about $713.9 million for its maintenance program. Table 1 breaks down
these estimates by project and year. Like all estimates, these are based
on the information that is available at the time they are made, and they
are subject to change as new information becomes available. Additionally,
the estimates for revitalization and construction, which total almost
$1.57 billion, are largely based on preliminary planning documents, such
as master plans and facility assessments, (some still in progress), and on
preliminary designs. According to Smithsonian documents, about 86 percent
of the estimates for revitalization and construction projects, which
account for about $1.27

32The 19 positions include 1 doctor for the employee health clinic, 1 real
estate specialist, and 17 operation and maintenance positions.

billion-or nearly 81 percent-of the $1.57 billion total, are
"order-ofmagnitude" estimates. Such estimates have a range of accuracy of
plus or minus 30 to 50 percent. Thus, the $1.57 billion estimate for
revitalization and construction projects could fall as low as about $875
million or rise as high as about $2.3 billion.33 The cost estimates for
maintenance projects are based on facility assessments, guidance issued by
the National Research Council and the Federal Facilities Council, and a
formula Facility Reliability has developed for estimating maintenance
costs.

Table 1: Appropriated and Estimated Costs of Smithsonian Capital and Maintenance
                        Programs, Fiscal Years 2005-2013

                              Dollars in millions

Appropriated funds Estimated costs for fiscal year(s)a Total

Prior fundingb 2005 2006 2007 2008 2009 2010 2011 - 2013 2005 -2013

                                CAPITAL PROJECTS

                              Major revitalization

Arts and Industries                                                 
         Building       $13.2 $23.4 $5.8 $11.3 $57.0 $61.0 $64.0       $222.5 
      Freer Gallery                                         1.0  $10.0 
     Hirshhorn Museum                                 2.0        20.0  
      Museum Support                       1.0       10.0        24.0  
          Center                                                       
     National Air and                                                  
          Space                                                        
          Museum                                                 59.0  
    National Museum of                                                 
     American History     4.8 10.0  18.4 13.1                    50.0  
    National Museum of                                                 
     Natural History    101.4 10.0  15.8 33.2  34.0  32.0  33.0  125.5  283.5 
National Zoological  43.9  21.4  14.0 28.9  23.5  24.1  25.6  107.6  245.1 
           Park                                                        
      Patent Office     121.0 44.4                                     
         Building                                                      
        Quadrangle                                               60.0  
     Renwick Gallery                                        4.0  25.0    29.0 
       Smithsonian                                                     
       Institution                                                     
      Building (the       1.0                                    87.0    87.0 
        "Castle")                                                      

Silver Hill/Suitland
Facility 23.0 23.0

33This range is calculated on a weighted average based on the four types
of estimates (1) order of magnitude, (2) factored, (3) control and (4)
detailed/definitive. See the paragraph following table 2 for a discussion
of this estimating process.

(Continued From Previous Page)

Dollars in millions

Appropriated funds Estimated costs for fiscal year(s)a Total

Prior fundingb 2005 2006 2007 2008 2009 2010 2011 - 2013 2005 -2013

                                CAPITAL PROJECTS

                              Major revitalization

Smithsonian Tropical                                               
    Research Institute                    3.2   6.0  1.2   1.8   1.8  
Other revitalization 63.2  6.0  15.0 37.0  23.5  15.1  16.1  51.7    164.4 
           c,d                                                        
Facilities Planning                                                
           and                                                        
         Designe              3.0   4.0   7.8   6.0  4.6   4.5   8.9  
         Subtotal            118.2 73.0 135.5 150.0 150.0 150.0 653.5         
      revitalization                                                  1,430.2

Construction

      Museum Support Center                                       
              Pod 5                12.3        6.9        9.0        14.5     
       SAO -VERITAS Control                                       
        Building (Arizona)                     1.0                

National Museum of
African American History
and Culture (planning
and design) 2.0

    Antiterrorism             8.9   15.6   14.2  15.3   23.8   25.0     102.8 
     protectiond                                                     
       Subtotal        7.9   17.9   32.1   14.2  15.3   23.8   25.0     136.2 
     construction                                                    
Subtotal capital $126.1  $90.9 $167.6 $164.2 $165.3 $173.8 $678.5 $1,566.4 
      projectsf                                                      
MINOR REPAIR AND                                                  
     MAINTENANCE                                                     
      PROJECTSg       38.2   45.7   90.0   90.0  90.0   90.0  270.0     713.9 
        Total       $164.3 $136.6 $257.6 $254.2 $255.3 $263.8 $948.5 $2,280.3 

Source: Smithsonian Institution.

aThese estimates are in current 2004 dollars.

bThese amounts are in year-appropriated dollars.

cIncludes funding for 95 other revitalization projects. Projects in this
category are smaller in scale than major projects, usually involve systems
or pieces of equipment for a single building, and typically cost between
$100,000 and $5 million.

dThe funding for two categories-other revitalization projects and
antiterrorism protection-is planned for projects at multiple Smithsonian
sites.

eIncludes cost estimates for the design of other revitalization projects
and master planning.

fIncludes funding for major revitalization, other revitalization, facility
planning and design projects, and construction.

gRepresents total funding for maintenance program, including staff costs,
minor repair and maintenance projects, and other contracts, supplies,
materials and equipment. For fiscal year 2005, this is the amount
appropriated for the program, according to the Smithsonian. For fiscal
year 2006, this is the amount in the Smithsonian's fiscal year budget
submitted to Congress, according to the Smithsonian.

The revitalization and new construction costs presented in table 1 are
driven, in part, by the need to modernize or add systems-fire detection
and alarm; security; electrical; heating, ventilation, and
air-conditioning (including environmental ventilation) systems, and
elevators and escalators-and to comply with newer code requirements, such
as those for air pressurization to keep stairwells clear of smoke34 and
handicapped accessibility to buildings and restrooms. Figures 12 through
15 show revitalization projects that are included in the Smithsonian's
estimate of $1.43 billion. Figure 16 illustrates new construction planned
to address the safety problems with alcohol storage depicted in figures 9
and 10 that are included in the Smithsonian's estimate of $136.2.

34The purpose of stair pressurization is to inject fresh air into the
stairwells during a fire scenario and provide a positive pressure
differential in relation to adjoining spaces. In other words, the positive
pressure created will prevent smoke from entering the stairwell as people
enter it.

Source: Smithsonian Institution.

                        Source: Smithsonian Institution.

                        Source: Smithsonian Institution.

Source: Smithsonian Institution.

Smithsonian Has Updated NAPA's Estimate and Implemented Other
Recommendations to Improve Cost Estimation

Source: Smithsonian Institution.

The Smithsonian's current $2.3 billion estimate exceeds NAPA's $1.2
billion estimate because it reflects more recent and comprehensive
assessments of the Smithsonian's revitalization needs, covers new
construction (including about $103 million to address security
requirements),35 and incorporates more complete information about the
maintenance program. After NAPA issued its July 2001 report, the
Smithsonian implemented NAPA's recommendations that it revalidate its
revitalization requirements and separate its maintenance budget from its
revitalization budget. In September 2001, the Smithsonian issued a report
outlining its revitalization objectives,36 and it has since been updating
facility assessments and completing master plans to identify further
revitalization costs. It has also taken other steps to improve its cost
estimation, including establishing a

35NAPA's estimate did not cover new construction because the Congress did
not ask NAPA to review the Smithsonian's construction program.

36Museums and Facilities: Critical Assessment and Improvement Objectives,
September 2001.

cost-engineering unit and attempting to implement a NAPA recommendation
that calls for linking requests for construction funding to progress in
completing design drawings. Table 2 provides the Smithsonian's January
2005 cost estimates for major revitalization projects, NAPA's July 2001
estimates, and summaries of the reasons for differences between the
estimates. Further discussion of the Smithsonian's cost estimation methods
follows the table.

 Table 2: Estimated Costs for Major Revitalization Projects as Reported by NAPA
                  in 2001 and Identified by the Smithsonian in

                              Dollars in millions

2001 2005 Smithsonian NAPA Smithsonian facilities estimate estimate
Difference Reasons for difference

    Arts and  $105.0 $235.7  $130.7 Continuing deterioration, particularly of 
                                             the roof, prompted a decision to 
Industries        ($36.6               close the building and move tenants 
                                           instead of allowing them to occupy 
    Building         funded)        the building during a phased renovation.  
                                    Of the $131 million difference,           
                                    $34 million is for permanently relocating 
                                    the staff and $10 million is for          
                                     replacing the roof-originally a separate 
                                             project, but now included in the 
                                    overall renovation. Design development    
                                    has revealed more substantial             
                                       systems replacement and structural     
                                        reinforcement needs; substantial      
                                       work is also needed to restore the     
                                         building to its original state.      

Freer Gallery $3.5  $11.0  $7.5   Further investigation has revealed needs 
                                               for modifying the courtyard to 
                                   improve accessibility, modifying the fire  
                                           protection systems, adding         
                                    shade structures for the skylights, and   
                                        installing new gallery lighting.      
     Hirshhorn   $11.0 $22.0 $11.0 Further investigation has revealed the     
                                   need for additional work on the            
      Museum                       building envelope to stop water intrusion. 

       Museum     $16.0 $35.0 $19.0 Further investigation has revealed the    
                                    need for additional work on the           
Support Center                      electrical system and one emergency    
                                           generator. The revalidated         
                                     estimate also includes funding for a new 
                                               requirement to renovate Pod 3, 
                                     once alcohol-preserved collections are   
                                             relocated to Pod 5. The          
                                     renovation will include the construction 
                                           of two floors to replace the steel 
                                              system now in place.            

National Air and $45.0 $59.0 $14.0     Design development has revealed the 
                                              need for more extensive systems 
     Space Museum                     replacement. The project has also been  
                                             postponed several years,         
                                      adding a minimum of $5 million in       
                                      escalation cost to the NAPA report's    
                                                     estimate.                

National  $35.0     $96.3     $61.3 Further investigation has revealed the 
                                              need for more extensive systems 
Museum of       ($4.8 funded)        replacement. The fire-detection and   
                                            alarm system, elevators and       
American                             escalators, and security system need  
                                          upgrading. Stair pressurization     
    History                             and restrooms must also comply with   
                                              newer code requirements.        
                                         Extensive renovation of the public   
                                        areas, not included in the original   
                                       project, is also needed to accommodate 
                                               an exhibit replacement program 
                                         funded by the Behring Foundation.    

(Continued From Previous Page)

Dollars in millions

2001 2005 Smithsonian NAPA Smithsonian facilities estimate estimate
Difference Reasons for difference

      National     $200.0 $387.9  $187.9 The NAPA report's estimate was based 
                                             on a 1980's estimate, which      
      Museum of           ($111.4            projected a 10-year construction 
                                         period. Lack of funding has extended 
Natural History        funded)         the project, causing its costs to   
                                         escalate. Furthermore, the project's 
                                           scope has changed. The plans now   
                                            call for a more comprehensive     
                                          renovation of the entire building,  
                                         including modifying the interior to  
                                         provide refurbished space for museum 
                                             activities. New requirements for 
                                         environmental ventilation,           
                                         additional fire protection, and      
                                         lighting have                        
                                             also increased the estimate.     

National $171.0 $289.0

Zoological Park	($65.3 funded)

$118.0	Investigation of building and utility distribution systems was just
beginning in 2001, and little was known about the magnitude of the
deficiencies. A 2003 study by a contractor updated the cost to restore the
National Zoo to at least $250 million over the next 10 years. Also,
systems have continued to deteriorate, and the estimated costs to replace
them have increased. The current estimate will change further as specific
studies of individual buildings progress over the next 5 years. Finally, a
catastrophic fire in the wetlands exhibit that occurred after the
contractor's 2003 study has added about $10 million in estimated
restoration costs.

    Patent Office  $151.0    $166.0     $14.4 A design development and scope  
                                              change to convert about 60,000  
      Building               ($165.7           square feet of administrative  
                                              space to public space required  
                                                 modifications to building    
                             funded)             systems and architectural    
                                                         finishes.            
                                               The original estimate covered  
                   $44.0      $60.0     $16.0     replacement of the roof     
     Quadrangle                                       structure, but          
                                                since the project has been    
                                                delayed, replacement of the   
                                                        mechanical            
                                               systems has been added to the  
                                                         project.             
                                              Costs have escalated with       
                   $23.0      $29.0      $6.0 delays in starting the project  
Renwick Gallery                            due to lack of                  
                                                         funding.             
                                                      The master plan for the 
     Smithsonian   $57.0      $88.0     $31.0      complete renovation of the 
                                                        "Castle" building and 
                                                 systems and finishes has     
     Institution          ($1.0 funded)        progressed to the 65-percent   
                                                       level, giving          
    Building (the                             better cost data than when the  
                                                   NAPA report was done.      
      "Castle")                               
                                                New requirements have been    
       Silver       New       $23.0     $23.0    identified since the NAPA    
                                                          report.             
    Hill/Suitland                             
     Facilities                               

Smithsonian New $14.0 $14.0    New requirements have been identified since 
                                                             the NAPA report. 
    Tropical                   
    Research                   
    Institute                  

Source: Smithsonian Institution.

To estimate the costs of its revitalization projects and construction, the
Office of Project Management may use facility assessments, fire and safety
inspections, customer input, contracted cost estimates of projects,
feasibility studies, design documents at various stages (preliminary, 35
percent, or 100 percent), and the input of the various experts in OFEO,

according to OFEO officials. The developmental phase of a project
determines the types of information that are available for use in
estimating its cost. Depending on the types of information used, Project
Management can assign a range of accuracy to an estimate, applying a
four-class system that the Construction Industry Institute (CII) uses to
categorize cost estimates.37 Estimates in each class-order of magnitude,
factored, control, and detailed/definitive-are based on different,
increasingly reliable documents and have increasingly narrow ranges of
accuracy. Whereas an order-of-magnitude estimate could be based on a
feasibility study alone and would have an range of accuracy of plus or
minus 30 to 50 percent, a detailed/definitive estimate could be based on
detailed drawings and could have a narrower accuracy range of plus or
minus less than 10 percent. As discussed, the majority of the
Smithsonian's estimates for revitalization and construction projects are
order-of-magnitude estimates.

To provide better estimates of its future needs, OFEO has established a
Cost Engineering Division, which recently has been fully staffed. This
division is to provide revitalization and construction cost estimates for
projects at the project development stage.38 The division is also to
revise construction cost estimates for each project throughout its life
cycle to reflect changes and current market conditions. The recently hired
associate division director has developed a draft Cost Management Guide
that is currently being reviewed. According to the associate division
director, the guide is to standardize the estimating process throughout
OFEO, including the process for developing cost estimates for the
Smithsonian's 5-year capital plan, and to provide an audit trail for
estimates. He is also introducing CII's Estimate Score Program to enhance
the accuracy of early estimates. He expects his division to have a major
role in developing all future project estimates.

37The CII defines four classes of cost estimates: (1) "order of
magnitude," which is based on feasibility cost/capacity curves and has an
accuracy range of plus or minus 30 to 50 percent; (2) "factored," which
applies major equipment factors for costs and has an accuracy range of
plus or minus 25 to 30 percent; (3) "control," which is based on
quantities from mechanical, electrical, and civil engineers' drawings and
has an accuracy range of plus or minus 10 to 15 percent; and (4)
"detailed/definitive," which is based on detailed drawings and has an
accuracy range of plus or minus less than 10 percent.

38Planning and project development are the initial stage and covers
initial project identification, scope and cost development, prioritization
and any project steps up to design.

NAPA recommended that, to improve its cost estimates, the Smithsonian not
request construction funding from the Congress until it has completed
partial (35 percent) design drawings for its projects. According to the
OFEO director, OFEO is having difficulty meeting this recommendation
because of chronic underfunding in the design category. OFEO currently can
barely keep up with the requirements for complete (100 percent) design
drawings for the next year's capital program, the director said, and
little funding is available to meet the longer-term requirements for
partial (to 35 percent) designs. Ideally, the 35-percent design drawings
should be complete before OFEO develops the request for construction
funding to the Office of Management and Budget. The director believes that
if OFEO had a larger pool of design funds, he could provide the Congress
with more accurate information for making funding decisions and develop
projects in a timely manner.

Smithsonian Now Tracks As NAPA recommended, the Smithsonian separated
maintenance costs

Maintenance Project Costs from revitalization and construction costs and
now tracks and manages

Separately from Revitalization them through separate offices. Using
facility assessments, the Office of

and Construction Project Costs	Facilities Reliability determined an
inventory of about $329 million in deferred maintenance projects as of
October 2004. Figure 17 shows the breakdown of the inventory by type and
total dollar value.

Figure 17: Estimated Maintenance Project Costs, by Type (dollars in
millions)

$11.6

Electrical/utility systems Electrical distribution ($5.7) Utility systems
($5.9)

$14.9

HAZMAT abatement Asbestos abatement ($14.9)

Life safety Fire electrical ($17.4) Fire mechanical ($7)

Mechanical systems HVAC ($22.8) Plumbing ($14.0)

Site construction repairs Renovation--minor ($25.6) Site repairs ($71.1)

Structural/architectural Architectural ($5.8) Accessibility ($1.9)
Conveyances ($14.9) Exterior facade ($9.3) Interior finishes ($33.6)
Roofing ($20.0) Structural ($59.5) Source: Smithsonian Institution.

According to Facilities Reliability officials, the yearly cost estimates
for maintenance projects in table 1 provide for maintaining facilities at
their current levels in fiscal years 2005 and 2006 as well as reducing the
inventory of deferred maintenance in fiscal years 2007 through 2013 if
funded at these levels. To calculate these estimates, Facilities
Reliability first (1) considers the building's condition, as measured
against a facility condition index that ranges from 1 (the worst
condition) to 5 (the best condition); (2) determines an allowance (between
2 percent and 6 percent, depending on the building's condition) of the
building's current replacement value; and (3) applies a formula that
includes the building's

total square footage.39 Facilities Reliability then adjusts the results of
its calculations according to the type of maintenance work and the input
of staff. Finally, Facilities Reliability combines the estimated
maintenance costs for all the buildings to determine the estimated
maintenance needs for a fiscal year. The deferred maintenance inventory
rises and falls as maintenance projects are completed, new projects are
identified, and the estimated replacement value of the facility inventory
changes. Underfunding maintenance needs in a given year increases the
deferred maintenance inventory.

Cost Estimates Could Change	For a variety of reasons, the Smithsonian's
cost estimates for revitalization, construction, and maintenance could
change. First, as noted, the estimates for about 86 percent of the
revitalization and construction projects are order-of-magnitude estimates
with an accuracy range of plus or minus 30 to 50 percent. An OFEO official
pointed out that the costs are not likely to fall unless the projects are
reduced in scope. Additionally, the estimates could increase further
because assessments for the National Museum of Natural History, the
National Zoo, and the Smithsonian Astrophysical Observatory are still in
progress and could identify new needs. Moreover, as other facilities
continue to deteriorate, additional revitalization needs could arise.

Second, the annual costs for maintenance are expected to increase due to
the addition of the National Museum of the American Indian and the Steven
F. Udvar-Hazy Center to the Smithsonian's building inventory in fiscal
year 2004, and with the planned completion of the Patent Office's
revitalization in 2006. According to the National Research Council's
standards for maintenance, the Smithsonian's maintenance budget should
increase by at

39According to the National Research Council, the appropriate level of
spending for maintenance is 2 to 4 percent of a facility's current
replacement value. This range is most valid for estimates developed for a
large inventory of buildings for periods of several years, such as the
Smithsonian has done. The range covers current requirements only and does
not provide for work that was deferred in the past. The Federal Facilities
Council suggests that one way to estimate the costs of reducing the
inventory of deferred maintenance is to increase the range by some
arbitrary percentage. The Smithsonian has increased its range by 2 percent
to cover the deferred maintenance. As a result, the range now extends to 6
percent. For example, a condition index of "1" equates to 6 percent of a
building's current replacement value, and a condition index of "5" equates
to 2 percent of a building's current replacement value. Also, if the
current replacement value per square foot exceeds $300, in order to be
conservative, Facilities Reliability applies only one-fifth of the
percentage allowance for replacement value of $300 per square foot. For
example, if the percentage allowance is 5 percent, Facilities Reliability
uses only 1 percent of the allowance for amounts over $300 a square foot.

least 2 percent of these buildings' current replacement value to cover
their maintenance. However, a Smithsonian official told us that the
Smithsonian received an increase in maintenance funding for fiscal year
2005 to provide for the National Museum of the American Indian of only
$700,000 of the $2.5 million needed. Unfunded maintenance costs increase
the Smithsonian's deferred maintenance inventory.

Third, the estimated costs for both construction and maintenance do not
include the National Museum of African American History and Culture, which
Congress authorized in 2003. This new museum is in its planning stage, and
the timing and cost of its construction are still unknown, though it is
likely to be several hundreds of millions of dollars. In addition, some
members of Congress have expressed interest in developing a National
Museum of the American Latino Community.

Most Funded Major Revitalization and Construction Projects Are on Time and
Within Budget

The Smithsonian has 13 funded major revitalization and construction
projects that are currently active or were completed in fiscal year 2004.
As table 3 indicates, 8 of the 13 projects were within budget and on time
(or were completed on time) as of April 2005.40 Of the remaining 5
projects, 1 was both over budget and behind schedule (Museum Support
Center, Pod 5); 2 had increases in their budgets, but were on schedule
(Ocean Exhibit and Patent Office Building, Phase II); 2 were behind
schedule, but within their budgets (Patent Office Building Phase I and
Mall-wide Permanent Security Barriers). For each major project, table 3
identifies the budget, current working estimate, schedule, and comments.

40We counted two of the projects, Asia Trail I and Asia Trail II, as being
within budget because their total budget did not change but one budget
increased and one budget decreased because part of the Asia Trail II
project was moved to Asia Trail I.

  Table 3: Status of Fiscal Year 2004 Funded or Completed Major Projects as of
                                   April 2005

Dollars in millions

                                 Current               
                                 working               
                     Project    estimate               
Major project      budget      (CWE)     Schedule      Comments 

                            Revitalization projects

Arts and Industries $44 $34 On time  o  This project covers closure, staff 
                                                 relocation and chilled water 
        Building                             connection to GSA system.        
                                          o  Two leases for space signed.     
                                       o  Relocated Discovery Theater opened  
                                                      on time.                
                                       o  North hall tarp removed, structural 
                                                 investigation and            
                                        implementation of temporary repairs   
                                                     completed.               
                                               o  Relocated Smithsonian Early 
                                                  Enrichment Center opened on 
                                                     schedule.                
                                       o  Federally funded through            
                                       Smithsonian's capital program.         

National Museum of  o  This public space renewal project is being done in
four phases, American History or "packages"; only the first two phases are
supported by (NMAH) federal appropriations.

Package I (supports 4.5 4.47 On time  o  Construction is complete and the
exhibit opened on time. The
Price of Freedom cost indicated reflects only the federal appropriation
Exhibit) component.

Package II (supports 80.0 80.0 65 percent Star Spangled (45.5 capital
(45.37 design Banner Exhibit) funds) capital delivered

funds)3/28/05, three days ahead of schedule.

o  Design development under SD-410 review (Smithsonian internal review).

o  Notice to proceed given to contractor for value engineering on parts of
the project.

o  Scope of work for construction documents (up to 65 percent) under
development.

o  Construction documents (up to 65 percent) to be funded from federal
funds in hand.

o  $45.5 million is to be federally funded through Smithsonian's capital
program. The remainder is to be funded through the Smithsonian trust
funds.

National Museum of Natural History (NMNH)

Ocean Exhibit 34.11 40.47 (16.0 capital (18.27 funds) capital funds)

On time  o  Renovation costs have grown by $2.2 million because HVAC
requirements have increased. The museum is using funds from other projects
to cover the additional costs.

o  Exhibit costs have grown by $4.2 million to include specific projects
of interest to the donor. The donor may cover the additional costs; if
not, the additional exhibits will not be included.

o  $18.27 million is to be federally funded through Smithsonian's capital
program. The remainder is to be funded through the Smithsonian trust
funds.

(Continued From Previous Page)

Dollars in millions

                                 Current               
                                 working               
                     Project    estimate               
Major project      budget      (CWE)     Schedule      Comments 

                            National Zoological Park

                                               o  Asia Trail II otter exhibit 
Asia Trail I  48.44      50.44     On time     scope added to Asia Trail I 
                                                                  project for 
                                                   construction. Asia Trail I 
                (41.59  (43.6 capital           construction budget increased 
                                                                     by otter 
                                                      construction budget ($2 
                capital    funds)              million); total project budget 
                                                                    increased 
                funds)                         from $48.44 million to $50.44  
                                                         million.             
                                              o  $43.6 million is to be       
                                              federally funded through        
                                              Smithsonian's                   
                                              capital program. The remainder  
                                              is to be funded through the     
                                                 Smithsonian trust funds.     

Asia Trail                              o  Otter exhibit moved to Asia     
       II      62.71   60.71  Design is on Trail I project. Asia Trail II     
                                           budget                             
              (37.85  (35.85      time       reduced by otter construction    
                                                budget of $2.0 million.       
                                               o  Friends of the National Zoo 
              capital capital                (FONZ) is evaluating feasibility 
                                                                           of 
              funds)  funds)               raising $30 million matching funds 
                                                 for elephant facility.       
                                           o  Architect/engineer responding   
                                           to 35 percent design review.       
                                                   o  $35.85 million is to be 
                                                     federally funded through 
                                                                Smithsonian's 
                                           capital program. The remainder is  
                                           to be funded through the           
                                                Smithsonian trust funds.      

Kids Farm 5.193 5.193 Opened on  o  $4.989 million federally funded
through Smithsonian's capital time program. $204,000 in trust funds of
which $82,000 was funded by FONZ.

                             Patent Office Building

Phase I 166.0 166.099 days behind schedule due to unexpected construction
problems found during the renovation.

o  CWE within $166 million after executing scope reductions (security,
exterior signage, furniture, elevator maintenance, and lighting) and
transferring approved costs to trust fund budgets (wireless, build-out,
collection move, Lunder Visible Conservation Center equipment).

o  Substantial completion projected to April 2006 (99-day delay) for a
limited number of specific areas. Working to isolate delays and minimize
overall impact to exhibit effort.

o  National Capital Planning Commission Submission anticipated on 4/15/05
for hearing on 5/5/05.

o  Federally funded through Smithsonian's capital program.

Phase II 50.0 51.7 On time  o  Funding is from trust funds.

o  Working on strategy that maintains $44.3 million budget and completion
date 1/31/07. Smithsonian decision pending next contract funding
increment.

o  Increased cost reflects potential desired enhancements.

(Continued From Previous Page)

Dollars in millions

                                 Current               
                                 working               
                     Project    estimate               
Major project      budget      (CWE)     Schedule      Comments 

                                New construction

                 Museum Support     30     42.7       Design is 4 
                 Center, Pod 5                        months      
                                                      behind      
                                                         schedule 

o  The schedule and funding have been adjusted to address this design
delay.

o  The Smithsonian is including an option for a laboratory in the contract
documents for Pod 5 for an estimated $9.8 million. This $9.8 million plus
an increase in design cost of $400,000 accounts for $10.2 million between
the budget and the current working estimate.

o  Review of cost estimates resulted in a $2.5 million increase due to
longer contract period and later separate contract awards.

o  Federally funded through Smithsonian's capital program.

                                                    o  About $119 million was 
National Museum of 219.3 219.3   Opened on        federally funded through 
                                                                Smithsonian's 
      the American                                   capital program. The     
         Indian                   time, on Sept. remainder was funded through 
                                                             the              
                                     22, 2004      Smithsonian trust funds.   
       Steven F.      219.8 218.3                o  Does not include funding  
       Udvar-Hazy                   Opened on    provided by Commonwealth of  
         Center                      time, in         Virginia for site       
                                                        improvements.         
                                                 o  The $210.3 million was    
                                     December    funded through the           
                                                 Smithsonian trust            
                                                 funds. About $8 million in   
                                       2003      design funds was federally   
                                                 funded                       
                                                    through Smithsonian's     
                                                       capital program.       

Mall-wide Permanent Security Barriers

0 33Phase 1 National Air and Space Museum construction contract awarded 2
months behind schedule

o  Smithsonian needs to resolve Mall-wide 35-percent design issues.

o  Funding requested in fiscal year 2006 to design & construct barriers at
NMNH.

o  Funding projected in fiscal year 2007 to complete barriers at NMAH.

o  Federally funded through Smithsonian's capital program.

Smithsonian Institution  o  No major projects are planned until 2011 to
2013.
Building (the "Castle"),
National Air and Space
Museum, Freer Gallery,
Hirshhorn Museum,
Quadrangle, Renwick
Gallery

Source: Smithsonian Institution.

o 	The current working estimate of the National Museum of Natural
History's Ocean exhibit increased from about $34.1 million to $40.5
million. This $6.4 million increase reflects higher costs for renovations
($2.2 million for heating, ventilation, and air-conditioning [HVAC] work
required to support the planned exhibits' advanced technology and

more interactive components) and $4.2 million for specific additional
exhibits that the donor has suggested. The National Museum of Natural
History is reprioritizing its capital projects to cover the higher HVAC
costs. The donor will provide the $4.2 million in additional funds for the
specific exhibits requested, or the additional exhibits will not be
included in the project.

o 	The current working estimate of Phase II of the Patent Office Building
renovation was increased to reflect desired enhancements should additional
trust fund monies become available. The current courtyard enclosure is
within the original target.

o 	The current working estimate of the Museum Support Center Pod 5 project
increased from $30.0 million to $42.7 million. The additional costs
include $9.8 million for a laboratory, $400,000 for further design work,
and $2.5 million41 due to a longer contract period,42 delays in obtaining
program funds,43 and later separate contract awards. The purpose of this
Pod is to store collection specimens preserved in alcohol-filled
containers in a code-compliant building. According to the project manager,
the design costs were higher than expected because it is difficult to
design a storage facility to contain such a large quantity of alcohol.

Delays in the three projects that were behind schedule were due to
unexpected construction problems during renovation (Patent Office
Building, Phase I), a design problem (Museum Support Center, Pod 5), and
the late award of a construction contract (Mall-wide Permanent Security
Barriers). According to a Smithsonian official, they are trying to
minimize the impact of the construction delay on the Patent Office
Building so that the public spaces can be opened on time. The project
manager for the Museum Support Center believes that they can make up the
delay. The project manager for the Mall security barriers is still working
to determine the potential effects of the delay.

41This estimate was prepared by OFEO's cost-estimating section.

42Contract period was extended from a planned period of 9 to 18 months to
24 to 30 months.

43Funding requests were moved from fiscal years 2005 and 2006 to fiscal
years 2005, 2006, and 2007.

In fiscal years 2002 and 2003, the Smithsonian's Office of Inspector
General completed management reviews of three Smithsonian projects-the
construction of National Museum of the American Indian, the Steven F.
Udvar-Hazy Center, and the revitalization of the Patent Office Building.
The reviews of the National Museum of the American Indian and of the
Steven F. Udvar-Hazy Center showed that, overall, project management
practices were effective and financial management controls were adequate
to ensure compliance with contract terms.44 The third review, on the
Patent Office Building, was performed by a contractor for the Office of
Inspector General who found that adequate controls were in place to
oversee the project's management and the existing cost-accounting system
was effective in tracking the project's execution costs, which were
managed by OFEO.45 While all three reports were generally positive, they
included recommendations on how OFEO could improve its operations. OFEO
has taken actions to adopt the recommendations.

Funding Its Planned Revitalization, Construction, and Maintenance Remains
a Key Challenge for the Smithsonian

NAPA's report focused strongly on improvements to the Smithsonian's
facilities management. But the report also drew attention to the need for
a substantial and ongoing infusion of funds to deal with the deterioration
of the physical plant. Funding the $2.3 billion in planned facilities
programs is an imposing challenge for the Smithsonian, the Administration,
the Congress, and private sector supporters of the institution.

Funding for the Smithsonian's annual operations and capital programs comes
from two general sources: its trust funds and federal appropriations.
Trust funds are used to carry out innovative research, expand the national
collections, fund new exhibits, and support outreach activities to
communities. The Smithsonian has been successful in attracting substantial
philanthropic contributions to its trust fund that have been critical to
the development and construction of new facilities. For example, most of
the Udvar-Hazy Center's $218 million construction cost and $100 million of
the $219 million of the National Museum of the American Indian's
construction cost were funded through the trust funds. Smithsonian

44Smithsonian Institution Office of the Inspector General, Report on
Project Management of the National Museum of the American Indian Mall
Museum (Washington, D.C.: Sept. 30, 2002), and Report on Project
Management of the Steven F. Udvar-Hazy Center (Washington, D.C.: July 31,
2003).

45Smithsonian Institution Office of the Inspector General, Project
Management Review: Patent Office Building Renovation Project (Washington,
D.C.; Mar. 31, 2003).

officials noted, however, that it is difficult to attract donor support
for general revitalization and maintenance projects. Therefore, in these
types of efforts, federal appropriations have been important. According to
the Smithsonian, Congress first began to provide the Smithsonian with
annual federal funding in 1858 to cover the cost of caring for objects of
art and natural history belonging to the United States. Today, federal
appropriations are used to operate, maintain, and protect the
Smithsonian's facilities; conserve the national collections; sustain basic
research; educate the public; provide administrative and support services;
and support revitalization and construction. (See app. I for additional
details on the Smithsonian's trust funds and appropriations.)

For fiscal year 2004, about 34 percent of Smithsonian's $904 million in
revenues for operations and capital programs came from its trust fund
assets, with the remainder coming from direct federal appropriations. Of
this total amount, about $184.4 million was designated for facilities
revitalization, construction and maintenance. While recognizing that
future funding decisions could result in different levels of funding,
annual revenues at the 2004 level would fall well short of the $2.3
billion estimate for the revitalization, construction, and maintenance
needs identified for the next 9 years. In our High Risk Series report on
federal real property, we highlighted the importance of ensuring credible,
long-term budget planning for sustaining and modernizing facilities.46
Such planning involves key stakeholders in government-the property-holding
agency, the Office of Management and Budget, and the Congress-in examining
viable funding options. In the case of the Smithsonian, the importance of
this approach is underlined by the trust-trustee relationship that defines
the relationship between the institution and the federal government. We
asked Smithsonian officials if a strategic approach had been developed for
funding the planned facilities work. Officials told us that various
funding approaches and options have been discussed by the staff, the Board
of Regents, and with congressional leaders but said that no consensus for
dealing with this issue has emerged.

Conclusion	As an organization that relies heavily on federal support to
maintain its facilities, the Smithsonian Institution is part of the
general challenge facing the federal government in real property
management. As we noted in our

46High Risk Series: Federal Real Property, p. 46.

2003 High Risk Series report on federal real property, the overall
condition of the federal facilities portfolio is one of alarming
deterioration, with the problem accelerating in recent years due to the
age of the buildings. Greatly improved management processes and tens of
billions of dollars will be needed to restore federal real property assets
and make them fully functional. At stake with the Smithsonian are not just
the buildings themselves, but the irreplaceable scientific and cultural
assets that they contain.

To address its own set of problems, the Smithsonian has taken major steps,
in line with NAPA's 2001 recommendations, to reorganize its facilities
management structure to achieve improved accountability and operational
efficiency. OFEO is incorporating industry best practices for facilities
management and has established processes for prioritizing work with the
aim of leveraging its limited staffing and funding resources to the
institution's best advantage. OFEO has also put processes in place to
develop more accurate estimates of its facilities funding needs. The
reorganization appears to be going in the right direction, though it is
still in an early stage of implementation and its long-term effectiveness
has yet to be determined. Full implementation of the restructuring effort
has been hindered by staffing and funding reductions that have occurred
throughout the Smithsonian due to budget constraints.

Along with recommending management improvements, NAPA pointed to the need
for a continuing and substantial infusion of funds for maintaining and
improving existing and new facilities. The federal government has
responded in recent years with increased levels of appropriations for the
Smithsonian's facilities needs, and the Smithsonian itself has
successfully raised its share of private sector funding for the
construction of its two newest museums. Still, the estimated $2.3 billion
in costs for facilities needs over the next 9 years is beyond the current
level of the Smithsonian's annual operating revenues from its trust funds
and federal appropriations. At present, it is unclear how, when, or to
what extent the planned projects will be funded.

Recommendation for 	Given the critical importance of correcting the
deteriorating condition of the Smithsonian's facilities, we recommend that
the Secretary of the

Executive Action	Smithsonian Institution establish a process for exploring
and analyzing, in a structured and reportable manner, various options for
funding its facilities needs (including options that may require
legislative authorization), together with the advantages and disadvantages
of each.

This process would culminate with a method and time frame for engaging the
key stakeholders-the Smithsonian Board of Regents, the Administration, and
the Congress-in the development and implementation of a strategic funding
plan to address the revitalization, construction, and maintenance projects
identified by the Smithsonian.

Agency Comments	We provided a draft of this report to the Smithsonian for
comment. In response, the Smithsonian provided us with both oral and
written comments, indicating that it concurred with our findings. In oral
comments, the Director of Government Relations stated that the Smithsonian
agreed with our recommendation. The Smithsonian also offered some
technical comments and updates that we incorporated where appropriate. A
letter from the Secretary of the Smithsonian commenting on our report is
included as appendix VIII.

As agreed with your office, unless you publicly announce its contents
earlier, we plan no further distribution of this report until 30 days
after the date of this letter. At that time, we will send copies of this
report to the appropriate congressional committees, the Secretary of the
Smithsonian Institution, and the Director of the Office of Management and
Budget. We will make copies available to others upon request. In addition,
this report will be available at no cost on the GAO Web site at
http://www.gao.gov. If you have any questions about this report, please
contact me at (202) 5122834 or [email protected]. Key contributors to
this report are listed in appendix IX.

Mark L. Goldstein Director, Physical Infrastructure Issues

Appendix I

Funding Sources and Statutes Related to the Smithsonian's Revitalization,
Construction, and Minor Repair and Maintenance Programs

The Smithsonian uses funding from a variety of public and private sources
for revitalization, construction, and minor repair and maintenance
(maintenance) of its facilities. Currently, maintenance is funded
primarily through appropriations, according to a Smithsonian official. The
Smithsonian's funding can be classified into two broad categories: trust
funds and congressional appropriations.

Trust Funds 	Unrestricted trust funds-These funds are not subject to any
donorimposed or legal restrictions on the use of the monies. The Board of
Regents may expend these funds in any manner they deem appropriate in
promoting the Smithsonian's mission. The unrestricted trust fund includes
income from investment earnings; income from Smithsonian Business
Ventures, which includes revenue from the Smithsonian's magazines and
other publications, museum stores, mail-order catalogs, concessions, IMAX
theater, and licensing and media enterprises; and income from government
grants and contracts. Unrestricted trust funds are often devoted to
programs, collections, and general administration, but could be used for
revitalization, construction, and minor repair and maintenance. Various
government agencies and departments provide grants and contracts for
projects that only the Smithsonian can conduct because of its expertise in
a particular area of science, history, art, or education and because of
its ability to respond quickly to certain needs. At the end of fiscal year
2004, government grants and contracts accounted for about 12 percent of
the Smithsonian's revenue. At the end of fiscal year 2004, the
Smithsonian's unrestricted operating revenues totaled $399.4 million, of
which $173.1 million was spent to operate the Smithsonian's businesses
that generated $195.0 million in revenues, according to its audited
financial statement.

Temporarily restricted trust funds-These funds include donations, earnings
on endowments, and private grants that are subject to donorimposed
stipulations on how the money is spent. The types of restrictions imposed
by donors include limitations on the use of funds for the construction or
renovation of a specific museum or facility or support for a specific
program or exhibit. For example, the construction of the Steven F.
Udvar-Hazy Center was funded by numerous private contributions that were
classified as temporarily restricted and could only be spent on
construction of the Hazy Center. At the end of fiscal year 2004, the
Smithsonian's temporarily restricted operating revenues totaled $83.9
million, according to its audited financial statement.

                                   Appendix I
                  Funding Sources and Statutes Related to the
                  Smithsonian's Revitalization, Construction,
                   and Minor Repair and Maintenance Programs

Permanently restricted trust funds-These funds include donations, earnings
on endowments, and bequests that are subject to donor-imposed stipulations
that the principal be maintained permanently. Donors of these funds permit
the Smithsonian to use all or part of the income earned from these funds
for either general or donor-specified purposes. James Smithson's original
bequest is included within this category. At the end of fiscal year 2004,
the Smithsonian's permanently restricted operating revenues totaled $0.5
million, according to its audited financial statement.

                         Direct Federal Appropriations

Regular congressional appropriations for the Smithsonian began in 1858,
according to a Smithsonian official. In 1879, the Congress authorized and
appropriated $250,000 for construction of a National Museum (now known as
the Arts and Industries Building). Today, 20 U.S.C. S: 53(a) provides that
appropriations are authorized for repairs and alterations of the
Smithsonian's buildings and grounds. According to a Smithsonian official,
this is the authority the Smithsonian uses to perform revitalizations and
major repairs when there is no specific congressional authorization for a
project. For fiscal year 2004, federal appropriations were $596.3 million,
according to the audited financial statement.

We were told by a Smithsonian official that major Smithsonian facilities
(those that represent national landmarks or are otherwise significant)
have all been legislatively authorized by the Congress. According to a
Smithsonian official, it has built or replaced facilities without
congressional authorization, but those projects did not exceed a $1
million cost ceiling agreed to with congressional staff and primarily have
consisted of administrative, utility, and laboratory facilities. Further,
recent appropriation acts have required the Smithsonian to consult with
the Appropriations Committees before planning or commencing any
construction projects, according to the same official. While the Congress
has authorized major new museums and facilities, the Congress has moved
away from fully funding the construction of these facilities beginning in
1982, when authorizing the construction of a building for the National
Museum of African Art and a Center for Eastern Art. The Congress limited
the federal funding to $36.5 million-just less than half of the estimated
$75 million total cost of the project. The legislation directed that no
appropriated funds be obligated or expended except for planning,
administration, management expenses, and architectural or consulting
services until the Smithsonian had sufficient private funding in hand
which, when combined with federal funding, could complete the project.

                                   Appendix I
                  Funding Sources and Statutes Related to the
                  Smithsonian's Revitalization, Construction,
                   and Minor Repair and Maintenance Programs

More recently, the Congress required that not more than two-thirds of the
total cost of planning, designing, and constructing the National Museum of
the American Indian come from federal appropriations. The Congress
authorized the Udvar-Hazy Center and appropriated money for the design,
but it did not allow any appropriations to be used for construction. The
Smithsonian built the facility with private donations and a $78 million
general obligation bond. In 2003, the Congress authorized the Smithsonian
to plan, design, and construct a building for a National Museum of African
American History and Culture. The authorization provided that half of the
costs are to come from nonfederal sources.

Currently, maintenance projects are funded primarily through
appropriations, although the maintenance staff are funded by both
appropriations and trust monies according to a Smithsonian official. A
Smithsonian official also told us that the institution is moving toward
trying to get private donors to allow part of their donations to be set
aside for repair and maintenance of exhibits. Exhibits such as America on
the Move and The Price of Freedom have planned maintenance budgets of
about $1 million each, some of which has already been raised from the
private sector. For The Star Spangled Banner, the Smithsonian is planning
an endowment fund of $4 million for maintenance. One donor has agreed to
let the Smithsonian use $1 million of his original gift for this exhibit
to help fund the endowment.

Selected Smithsonian Institution Legal Authorities Relating to
Construction and Revitalization of Facilities

Enabling Laws	Act of 18361 - Accepted James Smithson's bequest of his
property to the United States for the purpose of founding in Washington,
D.C., the Smithsonian Institution, an establishment for the increase and
diffusion of knowledge among men. Among other things, the act required the
Treasurer

1An Act to Authorize and Enable the President to Assert and Prosecute with
Effect, the Claim of the United States to the Legacy Bequeathed to Them by
James Smithson, Late of London, Deceased, to Found at Washington, Under
the Name of the Smithsonian Institution, an Establishment for the Increase
and Diffusion of Knowledge Among Men.

                                   Appendix I
                  Funding Sources and Statutes Related to the
                  Smithsonian's Revitalization, Construction,
                   and Minor Repair and Maintenance Programs

of the United States to account separately from all other accounts of his
office all sums received by virtue of Smithson's bequest and for the funds
to be spent in such manner as the Congress later directed.

Act of 18462 - Established the Smithsonian Institution in its present form
and provided for the administration of the Smithsonian Institution trust
by a Board of Regents. The act appropriated from federal funds an amount
from the interest on Smithson's bequest for the erection of suitable
buildings and other expenses of the institution. The act stated that all
appropriations and expenditures that would be made for the purpose of the
institution would be from the interest accrued and not from the principal
of the fund. The act authorized the Board of Regents to select a suitable
site for a building and contract for the construction of a suitable
building necessary for the institution. The act authorized the Secretary
of the Board of Regents to take charge of the building and property of the
institution. The act also reiterated that all money recovered by, or
accruing to the institution, would be paid into the United States Treasury
and separately accounted for as provided by the 1836 act.3

Current Statues	20 U.S.C. S: 41 - Establishes the Smithsonian Institution
for the increase and diffusion of knowledge among men, with the powers,
limitations, and restrictions contained in the act.

20 U.S.C. S: 42 - Establishes the members of the Board of Regents.

20 U.S.C. S: 46 - Provides for the Secretary of the Board of Regents to
take charge of the buildings and property of the Institution.

20 U.S.C. S: 53 -Provides that all laws relating to the protection of
public property in the District of Columbia shall apply to the lands,
buildings, and other property of the Smithsonian Institution. Also
provides that all money recovered by or accruing to the Smithsonian
Institution shall be paid into the Treasury of the United States, to the
credit of the Smithsonian bequest, and separately accounted for.

2An Act to Establish the Smithsonian Institution for the Increase and
Diffusion of Knowledge Among Men.

3The permanent provisions of the Act of 1846 were reenacted in the Revised
Statutes of the United States in Force on the First Day of December, One
Thousand Eight Hundred and Seventy-Three (1875) as S:S: 5579-5594. Current
statutes relating to the Smithsonian Institution are located in 20 U.S.C.
S:S: 41-70.

                                   Appendix I
                  Funding Sources and Statutes Related to the
                  Smithsonian's Revitalization, Construction,
                   and Minor Repair and Maintenance Programs

20 U.S.C. S: 53a - Provides that appropriations are authorized for repairs
and alterations of buildings and grounds occupied by the Smithsonian
Institution in the District of Columbia and elsewhere.

20 U.S.C. S: 54 - Provides that interest is appropriated for perpetual
maintenance and support of the institution. Also provides that all
expenditures and appropriations made from the Smithsonian Institution
treasury account for the purposes of the institution are to be made from
the interest and not the principal in the account.

20 U.S.C. S: 55 - Provides that the Secretary is authorized to receive and
deposit in the Treasury on the same terms as the original bequest of James
Smithson's, such sums that the Regents see fit to deposit. This section
specifically states that this shall not operate as a limitation on the
power of the Smithsonian Institution to receive money or property by gift,
bequest, or devise, and to hold or dispose of the same to promote the
purposes of the institution.

20 U.S.C. S: 56 - Authorizes the Smithsonian Institution Board of Regents
to dispose of any money which has accrued as interest on the Smithsonian
fund, or not appropriated, as they deem best suited for the promotion of
the purpose of James Smithson's bequest.

Annual Appropriations Acts - Appropriates funds for maintenance,
alteration, repair, revitalization, lease, and construction of
facilities.4

Selected Statutes Enacted Since 1955 Authorizing Smithsonian Institution
Facilities

An Act to Authorize the Construction of a Building for the Museum of
History and Technology Including the Plans and Specifications5

o 	Authorized the Board of Regents to prepare drawings and specifications
for, and to construct a suitable building for, a Museum of History and
Technology. Authorized to be appropriated such sums not to exceed
$36,000,000 as may be necessary to carry this out.

4For example, see Consolidated Appropriations Act for Fiscal Year 2005,
P.L. 108-447, 118 Stat. 2809, at 3088 and 3089 (2004); Department of
Interior Appropriations Act for Fiscal Year 2004, P.L.108-108, 117 Stat.
1241, at 1297 and 1298 (2003); and Consolidated Appropriations Act for
Fiscal Year 2003, P.L. 108-7, 117 Stat. 11, at 265 and 266 (2003).

5Act of June 28, 1955, Ch. 201, 69 Stat. 189.

Appendix I
Funding Sources and Statutes Related to the
Smithsonian's Revitalization, Construction,
and Minor Repair and Maintenance Programs

An Act to Authorize the Plans and Specifications for the Construction of a
Building for a National Air Museum6

o 	Authorized the Board of Regents to prepare plans, including drawings
and specifications, for the construction of a suitable building for a
National Air Museum and authorized to be appropriated such sums as may be
necessary to carry this out.

An Act for the Establishment of the Joseph H. Hirshhorn Museum and
Sculpture Gardens7

o 	Authorized the Board of Regents to remove any existing structure,
prepare architectural and engineering designs, plans, and specifications
and to construct a suitable museum and sculpture garden for the use of the
Smithsonian Institution within the area designated within the act for the
establishment of the Joseph H. Hirshhorn Museum and Sculpture Garden.
Pledged the faith of the United States to provide such sums as may be
necessary for the upkeep, operation, and administration of the Joseph H.
Hirshhorn Museum and Sculpture Garden. Authorized to be appropriated not
to exceed $15,000,000 for the planning and construction of the Joseph H.
Hirshhorn Museum and Sculpture Garden and such additional sums as may be
necessary for the maintenance and operation of the museum and sculpture
garden.

An Act to Authorize the Smithsonian Institution to Plan Museum Support
Facilities8

o 	Authorized the Board of Regents to prepare plans for museum support
facilities to be used for (1) the care, curation, conservation, deposit,
preparation, and study of the national collections of scientific,
historic, and artistic objects, specimens, and artifacts; (2) the related
documentation of such collections of the Smithsonian Institution; and (3)
the training of museum conservators. Authorized to be appropriated such
sums as may be necessary to carry this out. Provided that the museum shall
be located on federally owned land within the metropolitan area of
Washington, D.C., and authorized any federal

6P.L. 85-935, 72 Stat. 1794 (1958). 7P.L. 89-788, 80 Stat. 1403 (1966).
8P.L. 94-98, 89 Stat. 480 (1975).

Appendix I
Funding Sources and Statutes Related to the
Smithsonian's Revitalization, Construction,
and Minor Repair and Maintenance Programs

agency to transfer land under its jurisdiction to the Smithsonian
Institution for the site without reimbursement.

An Act to Authorize the Smithsonian Institution to Construct Museum
Support Facilities9

o 	Amended an Act to Authorize the Smithsonian Institution to Plan Museum
Support Facilities, P.L. 94-98, to authorize the Smithsonian Institution
to construct museum support facilities. Authorized to be appropriated
$21,500,000 to carry this out.

An Act to Authorize the Smithsonian Institution to Plan for Development of
the Area South of the Original Smithsonian Institution Building10

o 	Authorized the Board of Regents to plan for the development of the area
south of the original Smithsonian Institution Building adjacent to
Independence Avenue at Tenth Street, Southwest, in Washington, D.C.
Authorized to be appropriated $500,000 to carry this out.

An Act to Authorize the Smithsonian Institution to Construct a Building
for the National Museum of African Art and a Center for Eastern Art11

o 	Authorized the Board of Regents to construct a building for the
National Museum of African Art and a Center for Eastern Art together with
structures for related educational activities and authorized to be
appropriated $36,500,000 to carry this out. Provided that only funds
appropriated pursuant to this act may be obligated or expended for
planning, administration, management expenses, and architectural or other
consulting services, and no other funds appropriated pursuant to this act
shall be obligated or expended until such time as there is available to
the Board of Regents, from private donation or other nonfederal sources, a
sum combined with any appropriated funds in an amount sufficient to carry
this out.

9P.L. 95-569, 92 Stat. 2444 (1978). 10P.L. 96-36, 93 Stat. 94 (1979).
11P.L. 97-203, 96 Stat. 129 (1982).

Appendix I
Funding Sources and Statutes Related to the
Smithsonian's Revitalization, Construction,
and Minor Repair and Maintenance Programs

An Act to Authorize the Smithsonian Institution to Purchase Land in Santa
Cruz County, Arizona12

o 	Authorized the Smithsonian Institution to purchase land in Santa Cruz
County, Arizona, for the permanent headquarters of the Fred Lawrence
Whipple Observatory and authorized to be appropriated $150,000 to carry
this out.

An Act to Authorize the Administrator of General Services to Transfer to
the Smithsonian Institution Without Reimbursement the General Post Office
Building and the Site Located in Washington, D.C.13

o 	Authorized the Administrator of General Services to transfer to the
Smithsonian Institution, without reimbursement, for use for art galleries
and related functions the General Post Office Building with any attached
underground structures and the site of the building located between
Seventh and Eighth Streets Northwest and E and F Streets Northwest, in
Washington, D.C. Authorized to be appropriated to the Board of Regents of
the Smithsonian Institution $40,000,000 for renovation and repair after
the transfer of the building is made to the Smithsonian Institution.

An Act to Authorize the Smithsonian Institution to Plan and Construct
Facilities for Certain Science Activities14

o 	Authorized the Board of Regents to plan and construct facilities for
the Smithsonian Astrophysical Observatory and the Smithsonian Tropical
Research Institute. Authorized to be appropriated $4,500,000 for the
Smithsonian Astrophysical Observatory and $11,100,000 for the Smithsonian
Tropical Research Institute.

An Act to Authorize the Smithsonian Institution to Construct the Charles
McC. Mathias, Jr., Laboratory for Environmental Research15

12P.L. 98-73, 97 Stat. 406 (1983). 13P.L. 98-523, 98 Stat. 2433 (1984).
14P.L. 99-423, 100 Stat. 963 (1986). 15P.L. 99-617, 100 Stat. 3488 (1986).

Appendix I
Funding Sources and Statutes Related to the
Smithsonian's Revitalization, Construction,
and Minor Repair and Maintenance Programs

o 	Authorized the Board of Regents to construct the Charles McC. Mathias,
Jr., Laboratory for Environmental Research in Edgewater, Maryland.
Authorized to be appropriated $1,000,000 to carry this out.

An Act to Establish the National Museum of the American Indian within the
Smithsonian Institution16

o 	Authorized the Board of Regents to plan, design, and construct a
facility to house the portion of the National Museum to be located in
Washington, D.C. at a site specified in the act. Provided that the Board
of Regents shall pay not more than two-thirds of the total cost of
planning, designing, and constructing the facility from funds appropriated
to the board with the remainder of the costs coming from nonfederal
sources.

o 	Authorized the Administrator of General Services to lease to the
Smithsonian Institution, at a nominal charge, space in the Old U. S.
Custom House in New York to house the portion of the National Museum to be
located in New York and designated as the "George Gustav Heye Center of
the National Museum of the American Indian." Authorized the Board of
Regents to plan, design, and construct a facility for the National Museum
in the Old U. S. Custom House in New York and authorized the Administrator
of General Services to plan, design, and construct an auditorium and
loading dock for the shared use of all the occupants of the Old U. S.
Custom House in New York. The act provided that the Board of Regents shall
pay one-third of the costs of planning, designing, and constructing the
National Museum in New York from funds appropriated to the board with the
remainder of the costs coming from nonfederal sources. The act limited the
obligation of federal funds for construction of the National Museum in New
York in any fiscal year, until nonfederal sources have paid to the Board
of Regents the nonfederal share of the costs which the board estimated
will be incurred in any such year. The act noted that New York City and
New York State each agreed to pay $8,000,000 or an amount equal to
one-third of the costs for planning, designing, and constructing the
facility, whichever is less. The act provided that after construction of
the National Museum in New York is completed that repairs and alterations
of the facility shall be the Board of Regents responsibility.

16P.L. 101-185, 103 Stat. 1336 (1989).

Appendix I
Funding Sources and Statutes Related to the
Smithsonian's Revitalization, Construction,
and Minor Repair and Maintenance Programs

o 	Authorized the Board of Regents to plan, design, and construct a
facility for the conservation and storage of the collections of the
National Museum at the Museum Support Center of the Smithsonian
Institution with a total aggregate square footage of at least 400,000
square feet.

o 	Authorized to be appropriated to the Administrator of General Services
from the Federal Buildings Fund $25,000,000 to carry out the plan, design,
and construction of the auditorium and loading dock and to make repairs
and alterations to the portion of the Old U. S. Custom House that is not
leased to the Board of Regents.

o 	Authorized to be appropriated to the Board of Regents such additional
sums as may be necessary to carry out the planning, design, and
construction of the National Museum to be located in Washington, D.C., the
National Museum to be located in New York, and the Museum Support Center
for the collections of the National Museum.

An Act to Authorize the Smithsonian Institution to Plan, Design,
Construct, and Equip Space in the East Court of the National Museum of the
Natural History Building17

o 	Authorized the Board of Regents to plan, design, construct, and equip
approximately 80,000 square feet of space in the East Court of the
National Museum of the Natural History Building. Authorized to be
appropriated $30,000,000 to carry this out.

An Act to Provide for Planning and Design of a National Air and Space
Museum Extension18

o 	Authorized the Board of Regents to plan and design an extension of the
National Air and Space Museum at Washington Dulles International Airport
and authorized to be appropriated $8,000,000 to carry this out.

An Act to Authorize the Smithsonian Institution to Plan, Design, and
Construct the West Court of the National Museum of the Natural History
Building19

17P.L. 101-455, 104 Stat. 1067 (1990). 18P.L. 103-57, 107 Stat. 279
(1993). 19P.L. 103-151, 107 Stat. 1515 (1993).

Appendix I
Funding Sources and Statutes Related to the
Smithsonian's Revitalization, Construction,
and Minor Repair and Maintenance Programs

o 	Authorized the Board of Regents to plan, design, and construct the West
Court of the National Museum of the Natural History Building. Provided
that no appropriated funds may be used to pay any expense for the
planning, design, and construction of the West Court.

An Act to Authorize Construction of a National Air and Space Museum Dulles
Center at Washington Dulles International Airport20

o 	Authorized the Board of Regents to construct the Smithsonian
Institution National Air and Space Museum Dulles Center at Washington
Dulles International Airport. Provided that no appropriated funds may be
used to pay for any expenses of construction.

An Act to Authorize the Smithsonian Institution to Plan, Design,
Construct, and Equip Laboratory, Administrative, and Support Space for the
Smithsonian Astrophysical Observatory Submillimeter Array21

o 	Authorized the Board of Regents to plan, design, construct, and equip
laboratory, administrative, and support space to house base operations for
the Smithsonian Astrophysical Observatory Submillimeter Array in Hilo
Hawaii. Authorized to be appropriated specific amounts in various fiscal
years to carry this out.

Smithsonian Facilities Authorization Act22

o 	Authorized the Board of Regents to plan, design, construct, and equip
additional special use storage and laboratory space at the museum's
support facility in Suitland, Maryland. Authorized to be appropriated
specific amounts in various fiscal years and such additional sums as
necessary to carry this out.

o 	Authorized the Board of Regents to plan, design, and construct
improvements to the interior and exterior of the Patent Office Building,
including the construction of a roof covering for the courtyard. Provided
that funds to carry this out will be from nonappropriated sources.

20P.L. 104-222, 110 Stat. 3025 (1996). 21P.L. 106-383, 114 Stat. 1459
(2000). 22P.L. 108-72, 117 Stat. 888 (2003).

Appendix I
Funding Sources and Statutes Related to the
Smithsonian's Revitalization, Construction,
and Minor Repair and Maintenance Programs

National Museum of African American History and Culture Act23

o 	Authorized the Board of Regents, in consultation with the National
Museum of African American History and Culture Council, to plan, design,
and construct a building for the museum. Provided that 50 percent of the
costs to carry this out will be from federal funds and 50 percent of the
costs to be from nonfederal sources. Authorized to be appropriated such
sums as necessary to carry this out.

An Act to Authorize Construction and Related Activities for Support of the
VERITAS on Kitt Peak, Arizona24

o 	To authorize the Board of Regents of the Smithsonian Institution to
carry out construction and related activities in support of the
collaborative Very Energetic Radiation Imaging Telescope Array System
(VERITAS) project on Kitt Peak near Tucson, Arizona. Authorized to be
appropriated $1,000,000 to carry this out.

 23P.L. 108-184, 117 Stat. 2676 (2003). 24P.L. 108-331, 118 Stat. 1281 (2004).

Appendix II

Smithsonian Institution's Status on the Implementation of the National
Academy of Public Administration's Recommendations

Status of

implementation Recommendations by area plans Smithsonian comments

1. Evaluation of the renovation, repair and alteration (RR&A) requirements

1.1. Revalidate the total backlog Implemented.    Completed September 2001 
      of RR&A requirements. This                          with publication of 
      revalidation should include                     Museums and Facilities: 
    completing detailed facilities                        Critical Assessment 
     condition assessments for all                and Improvement Objectives. 
        museums and other major                   
     facilities that have not been                
surveyed for this purpose within               
    the preceding 3 years. In-house               
         capability should be                     
      supplemented with contract                  
     assistance, if necessary, to                 
         expedite completion.                     

1.2. Develop a fully integrated and prioritized 10-year plan for
Implemented. Briefings with OMB and congressional staff held
executing the revalidated backlog of requirements and brief Spring 2002
based on Museums and Facilities:
the Office of Management and Budget (OMB) examiners and Critical
Assessment and Improvement
congressional staffs on the total facilities requirements, even
Objectives; subsequent briefings held annually
though the annual budget constraints may preclude requesting to apprise of
progress.
the full amount of funding actually needed.

1.3. Cost estimates for all the capital improvements projects
Implementation Project Management Handbook includes this that are included
in the Smithsonian's annual budget requests under way. provision.
Discussions have already taken place to OMB and Congress should be based
on the completion of with OMB on this topic. Additional funding in at
least 35 percent of final design, with cost escalation Facilities Planning
and Design will be required included to improve the accuracy and
reliability of the before the Smithsonian can consistently estimates.
complete 35-percent design of future year

projects before requesting construction funding.

1.4. Implement and adhere to strict control      Implemented. Implemented. 
measures over                                                 
project scope and cost increases. For selected                
major capital                                                 
improvement projects, such as the Patent Office               
Building,                                                     
consider establishing a formal review group to                
help control                                                  
increases in project scope and cost.                          

    1.5. The budget format for the   Implemented.   Fiscal Year (FY) 2003 and 
        RR&A program should be                           2004 budgets reflect 
       changed and simplified to                  new format of project       
      succinctly state the actual                 descriptions. New           
    requirements, estimated costs,                structure for entire        
      and construction schedules.                 facilities program budget   
                                                  request implemented with FY 
                                                  2004 request.               

2. Responsiveness to Congress and OMB

2.1. Place significantly increased emphasis on responding to Implemented.
All requests since 2002 have been dealt with
congressional questions and requests in a timely and accurate
expeditiously.
manner.

3. Facilities maintenance

3.1. Develop and implement a well-structured maintenance Implemented. Plan
provided to OMB and Congress January program that includes preventive
maintenance, periodic testing 2002. Funds received in FY 2004 and
requested and inspection, and programmed maintenance. for FY 2006 will
begin to address capability to

focus on planned maintenance activities, as

guided by Reliability Centered Maintenance

(RCM).

Appendix II Smithsonian Institution's Status on the Implementation of the
          National Academy of Public Administration's Recommendations

                         (Continued From Previous Page)

Status of

implementation Recommendations by area plans Smithsonian comments

3.2. Reorder budget priorities to provide for an increase to at
Implementation under Increase of $5.4 million received in FY 2004 least
$10 to $15 million annually in a preventive maintenance way. Salaries and
Expenses (S&E) appropriation as category. an initial increment of
increase. Additional

increase of $4.7 million included in FY 2006 request to Congress. Estimate
of total requirement revised upward to reflect National Research Council
(NRC) guidelines of 2-4 percent of physical plant Current Replacement
Value.

3.3. Consider budgeting all maintenance and minor repair Implemented.
Budget restructured to create Facilities requirements, excluding personnel
costs, in one separate Maintenance line item in the S&E portion of the
account in the RR&A budget to provide improved visibility and
Smithsonian's FY 2004 budget request. funds control. Decision to include
in S&E rather than Capital

portion of the budget discussed with OMB and

congressional staff.

3.4. Consider adopting the RCM approach that many federal agencies use.
RCM is a maintenance philosophy that incorporates an effective mix of
proactive, preventive, predictive testing and inspection, and reactive
maintenance practices that focus on reliability and risk management.

Implemented.	Associate Director for Reliability hired in August 2002.
Implementation plan developed and Office Facilities Engineering and
Operations (OFEO) staff trained. Predictive testing and inspection (PT&I)
equipment purchased for vibration analysis, thermography, and ultrasonic
thickness. Performance metrics identified and key processes are being
revised and validated. PT&I tests were added as part of acceptance testing
to Hazy, National Museum of the American Indian, and Patent Office
Building projects.

4. Smithsonian "backlog"

      4.1. Use commonly accepted    Implemented.        The engineering study 
      definitions for facilities                      Museums and Facilities: 
      maintenance and repair as                    Critical Assessment and    
spelled out in the numerous NRC                       Improvement          
       reports on this subject.                  Objectives contains specific 
                                                         definitions that are 
                                                     in accord with NRC.      

4.2. Properly identify the Smithsonian's very significant Implemented. The
Smithsonian no longer uses the term backlog of specific major repair and
restoration requirements "maintenance backlog," and appropriately and
refrain from attempting to identify all facilities deficiencies defines
major repair and restoration and needs under the misleading term
"maintenance backlog." requirements under "Facilities Capital--

Revitalization Requirements."

5. Facilities management organization

       5.1. Centralize facilities                        Office of Facilities 
    management functions, including   Implemented. Engineering and Operations 
                  the                              
      National Zoo, under a single                        established.        
     facilities organization. This                 
    change would improve operational               
             efficiency and                        
      effectiveness, cost control,                 
          quality control, and                     
            accountability.                        

5.2. Director of OFEO should be designated the principal Implemented.
Director of OFEO has been given these Smithsonian official for managing
the facilities maintenance responsibilities by the Secretary. activities,
the RR&A program, and the construction program.

Appendix II Smithsonian Institution's Status on the Implementation of the
          National Academy of Public Administration's Recommendations

                         (Continued From Previous Page)

Status of

implementation Recommendations by area plans Smithsonian comments

5.3. The Office of Physical Plant (OPP) should be restructured to place a
stronger emphasis and focus on its three primary responsibilities: (1)
operation and maintenance of the Smithsonian's physical plant, (2) repair
and restoration of facilities to reduce the extensive backlog, and (3)
construction of new facilities.

Implemented.	Former Office of Physical Plant has been reorganized into
three separate entities to focus upon specific facilities management
functions.

5.4. If the Smithsonian's RR&A program is substantially Implementation under The
                   Smithsonian received some staff to support

increased, the OFEO staffing should accordingly be increased to
effectively manage the larger program.

                                      way.

the capital program in FY 2003 and FY 2004; construction supervision and
administration staff has been paid with project funding since FY 2003.
Remaining staffing requirements for a larger capital program will be
requested in future budgets as the program increases.

6. Contracting out considerations

6.1. Conduct a comprehensive and detailed analysis to Implementation
determine whether or not the facilities operations and under way.
maintenance functions that are performed by the OFEO inhouse workforce
could be accomplished more efficiently and cost effectively if they were
contracted out.

In FY 2003, the Smithsonian awarded a contract for operations and
maintenance of the Hazy Center in lieu of adding new staff, and contracted
out Heating, Ventilation and Air Conditioning (HVAC) maintenance at
Smithsonian Environmental Research Center. Maintenance resources added in
FY 2004 are being used primarily to augment staff capacity with contracts
for inspection, testing, and preventive maintenance of automatic doors;
electrical panels; fire alarm systems and fire sprinklers; testing and
cleaning of cooling towers; and thermographic and vibration analysis. More
analysis of contracting opportunities will be conducted upon completion of
reorganization and filling of new positions in OFEO.

6.2. Conduct a similar analysis of the facilities operations and
Implementation The Smithsonian contracts for a number of maintenance
functions for the National Zoological Park under way. maintenance
activities at the National Zoo, (National Zoo). including HVAC
maintenance. More analysis of

contracting opportunities will be conducted upon completion of
reorganization and filling of new positions in OFEO.

7. Capital Program Planning Board (CPPB)

7.1. The CPPB membership should be realigned and updated Implemented. A
new charter for the board, now named the

to accommodate the Smithsonian's current organization.	Capital Planning
Board, reflects the current Smithsonian organization.

7.2. The Director of OFEO should be designated the Implemented. The
board's charter assigns overall Smithsonian's principal and lead official
for developing, responsibility for the board to the Chief Financial
presenting, and defending all facilities programs and budgets Officer. The
Director, OFEO, has been directed to the CPPB and to external
organizations, such as OMB and to lead the board's deliberations for
facilities Congressional staffs, where required. capital programs.

Appendix II Smithsonian Institution's Status on the Implementation of the
          National Academy of Public Administration's Recommendations

                         (Continued From Previous Page)

Status of

implementation Recommendations by area plans Smithsonian comments

7.3. The CPPB should meet on a regularly scheduled basis to Implemented.
The board meets on a regular basis.
review and recommend approval of the annual budget request
for the RR&A program, the maintenance program, and the
construction program, as well as the 5-year plans for each of
these facilities programs. Minutes of each meeting should be
recorded and provided to board members.

7.4. Board review results should be provided in the form of Implemented.
Board recommendations are incorporated into formal written recommendations
to the Secretary of the overall budget recommendations made to the
Smithsonian Institution. Secretary.

8. Budgeting and financial management

8.1. Routinely include specific data in annual budget requests
Implemented. The Smithsonian budget requests since FY on how the
Smithsonian applied its RR&A funding from the 2003 include this prior year
information in prior year. summary and by major project.

9. More effective financial system

9.1. The current Smithsonian Financial System (SFS) should Implemented.
Phase I of the Institution's new Enterprise
be replaced with an updated system. The Smithsonian should Resource
Planning (ERP) PeopleSoft
ensure that the updated system is fully compatible with the implemented
October 1, 2002. Capital Program
standards set by the Joint Financial Management managers are participating
in planning for Phase
Improvement Program and reports obligations and outlays at II
implementation, which will include the Asset
the program and project level. The Smithsonian should ensure Management
Module.
that program and major-unit managers, as well as working
level fund-control personnel, are consulted in the process of
defining requirements for the new system.

9.2. In the interim, terminology used in the SFS reports should
Implemented. Terminology clarified as part of ERP
be clarified. If practical, SFS reports should be revised to development.
provide actual obligation data. Key personnel should be
trained to correctly apply the terms used in the federal
appropriation process and those used in internal operations.

9.3. Recognize that managers will continue to rely on separate
Implemented. Capital Program cuff system (PFITS) will be cuff systems
unless and until a new system is in place that retained and has been
updated to match new provides managers with the program and project-level
PeopleSoft coding structure. Commercial Off information they need and in
which the managers have The Shelf (COTS) project management software
confidence. systems are being evaluated for potential use in

the future.

    9.4. The cuff records used by   Implemented. Merger of National Zoo PFITS 
      the National Zoo should be                               with PFITS was 
modified to more readily provide              completed in September 2003. 
         a basis for tracking                    All National                 
        obligations as well as                      Zoological Park PFITS     
             commitments.                                obligations,         
                                                 commitments and expenses are 
                                                 now being                    
                                                           tracked.           

    9.5. Survey managers to determine   Implemented. Information on reporting 
          which SFS reports are                         requirements gathered 
     actually providing useful data,                 as part of new financial 
       which should be changed with                        system (ERP)       
    the current system's capabilities,                     development.       
           and which should be                       
              discontinued.                          

9.6. Modify SFS basic reports to provide separate reporting for
Implemented. Separate codes have been established to

OPP and National Zoo transactions.	distinguish between OFEO and National
Zoo Facilities Capital financial activity.

Appendix II Smithsonian Institution's Status on the Implementation of the
National Academy of Public Administration's Recommendations

                         (Continued From Previous Page)

                                       Status of    
                                     implementation 
        Recommendations by area          plans        Smithsonian comments    
    9.7. Until a unified system is                  Backups have been trained 
available, a sufficient number of  Implemented.        to support the OFEO 
      people should be trained to                   cuff system for the       
operate the various cuff systems                 Capital Program (PFITS).  
the Smithsonian uses so that the                 
          absence of any one                        
      individual does not hamper                    
              operations.                           

                        Source: Smithsonian Institution.

Appendix III

Organization and Responsibilities of the Smithsonian's Office of
Facilities Engineering and Operations

                      Office/Sub-offices Responsibilities

Office of Facilities The office is responsible for facilities planning,
master planning, and resource management including facility Engineering
and project budget advocacy, development, policy and standards, fiduciary
accountability, program oversight and Operations analysis. The office is
also responsible for architectural history and historic preservation and
real estate

 policy utilization, guidance, and reporting, as well as facilities management
                                    systems.

1. Office of Project The office provides comprehensive management of the
Smithsonian's facilities revitalization and

Management construction. It develops preliminary project scopes,
schedules, and budgets; monitors, directs, and reports on the updated
scope budget and schedule of individual projects and major construction;
and coordinates the efforts of stakeholders, designers and construction
execution on multiple projects.

2. Office of Facilities The office serves as the focal point for
facilities master planning and space-management issues and efforts.
Planning and It advises management on architectural history and historic
preservation, conducts historic preservation Resources reviews,
comprehensive facilities master planning studies, and space utilization
studies, space inventories

and analysis of these issues. It also coordinates with government and
community groups on facilities planning, space management, and
preservation matters and provides financial and administrative services
regarding facilities issues.

3. Office of Engineering, Design and Construction With oversight from the
Office of Project Management, this office is responsible for project
design and construction oversight for all new construction and
revitalization contracts.

    3.1 Engineering and The office administers architectural and engineering
         services for facility construction, revitalization and repair

Design Division that include developing design scopes for projects. It
oversees contracted design efforts, provides limited inhouse architectural
and engineering design services, and is responsible to provide and ensure
thorough project reviews and code compliance.

3.2 Construction The office provides construction administration services
and operates field offices (resident engineer) at

Management Division	large project sites. It directs and oversees contract
services of construction contractors and construction managers and is
responsible for contract change order negotiations.

3.3 Cost Engineering The office provides construction cost estimates for
projects at the project development stage. It provides

Division	revised construction cost estimates throughout the project life
cycle to reflect changes and current market conditions.

3.4 Geo-Spatial The office consolidates and maintains a comprehensive
Geographical Information System database that

Conversions	includes computer-aided drawings for Smithsonian facilities.
It provides a central archive for facility documentation, project files,
drawings, specifications, operations and maintenance, equipment and shop
drawings files, as-built drawings and an improved as-built drawing
capability for facilities management and project development.

4. Office of Facilities The office provides strategic planning and
oversight to facilities operations and maintenance efforts. Its goal

Reliability is to reduce breakdowns and increase planned maintenance. It
runs the Reliability Centered Maintenance program utilizing predictive
testing and inspection tools to manage facility equipment. It develops
tasks and processes then monitors work efforts, collects and analyzes data
and metrics of the maintenance programs, and adjusts the operation and
maintenance process to gain further efficiencies. It also purchases
utilities, manages agency-wide service contracts, operates building
automation services, and repairs large equipment in central shops. It uses
both in-house and contractor personnel to accomplish its objectives. It is
directly involved with new facility design inputs, new system start-ups
and commissioning efforts.

5. Office of Facilities The office performs day-to-day facilities
maintenance services, including preventive maintenance, janitorial

Management and grounds maintenance; transportation and mail delivery
services, building management services for leased facilities; landscape
services and is involved in new facility system start-ups upon completion.
It accomplishes its work through in-house; and contracted services.
Currently comprised of seven zones, due to its visibility it plays a
critical role as ambassadors for OFEO.

Appendix III
Organization and Responsibilities of the
Smithsonian's Office of Facilities
Engineering and Operations

(Continued From Previous Page)

                      Office/Sub-offices Responsibilities

6. Office of Protection The office ensures the safety and security of
staff, visitors, properties, and collections through the use of Services
security forces, technology, and facility design and construction.

7. Office of Safety and The office ensures the Smithsonian provides safe
spaces for employees and visitors, oversees fire prevention Environmental
and protection, industrial hygiene and occupational health, environmental
management, and radiation safety. Management Conducts all safety,
environmental, industrial hygiene, and occupational health compliance
audits for the

Institution.

8. Smithsonian Tropical The office is responsible for both capital
projects and operations, and minor repair and maintenance. Research
Institute

                        Source: Smithsonian Institution.

Appendix IV

Smithsonian's Efforts to Implement Leading Practices in Capital
Decision-Making

                 Principles and practices Smithsonian's efforts

I. Integrate organizational goals into the capital decision-making process

1. Conduct comprehensive Secretary's Strategic Plan provides goals and
specific objectives for all areas of the Institution. assessment of needs
to meet Annually, OFEO aligns its goals with the strategic plan. These
goals include targets for percentage results-oriented goals and completion
on particular projects, overall program performance, and targets for cost
growth. objectives.

2. Identify current capabilities, In September 2001, OFEO did a study
Critical Assessment and Improvement Objectives, which including the use of
an inventory provides an inventory of assets and a comprehensive list of
all the studies, design, and construction of assets and their condition,
and to that date, along with a cost estimate for outstanding work and the
basis for the estimates. Every 2 determine if there is a gap to 3 years
facility assessments-in-depth condition reviews of a facility- are
performed by the Facility between current and needed Assessment Branch.
Zone Managers consolidate and advocate all facility requirements,
including capabilities. noncapital minor repairs and maintenance.

3. Decide how best to meet the OFEO has engaged in several noncapital
approaches designed to maximize the buying power of the gap by identifying
and evaluating funding received. Among these approaches is the use of
continuing contract authority. This permits alternative approaches
(including multiyear funded major revitalization projects, such as the
restoration of the Patent Office Building, to noncapital approaches).
proceed in a measured way in partnership with the contractor, so that
current year funds can be

efficiently used, while not holding up the project until all funding is
received. OFEO employees at all levels are members and active participants
in both the Federal Facilities Council and the Construction Industry
Institute. Both organizations promote best practices such as comprehensive
preproject planning, value engineering and constructability reviews that
ensure the best use of available dollars through project team alignment
and technical innovation and flexibility.

II. Evaluate and select capital assets using an investment approach 4.
Establish review and approval OFEO's Office of Project Management leads
the annual formulation and revision of the Smithsonian's framework
supported by capital design and construction program. The process of
evaluation and selection of projects begins analyses. with consultation
with all Smithsonian Institution units, in conjunction with the Office of
Facilities

Reliability and the Office of Facilities Management. The staff of the
Smithsonian units and the staff of the Offices of the Deputy Secretary,
the Under Secretary for Science and the Under Secretary for Art
participate in this process. Projects are rated and ranked according to
criteria based on health and safety concerns first, code compliance and
security, and the need for repairs and operational efficiency.

5. Rank and select projects based on established criteria.

Once the cross-functional teams working at each facility rate and rank
their projects by priority, type of work and fiscal year, the plan is
presented to the Smithsonian's Capital Planning Board. The board under the
direction of the Chief Financial Officer meets throughout the year to
consider capital requests and balance needs of the design and construction
program against other capital investments.

6. Develop a long-term capital

A 5-year Facilities Capital Program Summary for funding is developed. The
                            combined efforts of OFEO

plan that defines capital asset decisions.

and the Capital Planning Board ensure that the capital program receives
wide-ranging review and approval from all areas of the Smithsonian. The
Audit and Review Committee of the Board of Regents reviews the
institution's finances and the Board of Regents authorizes the submission
of the budget, which includes the 5-year plan to Congress.

  Appendix IV Smithsonian's Efforts to Implement Leading Practices in Capital
                                Decision-Making

                         (Continued From Previous Page)

                 Principles and practices Smithsonian's efforts

III. Balance budgetary control and managerial flexibility when funding
capital projects.

7. Budget for projects in useful As previously mentioned, continuing
contract authority is used for multiyear funded major

segments. revitalization, which allows for phased funding of projects and
allows a project to proceed in a measured way in partnership with the
contractor. This process is also used for new construction such as the
recently completed National Museum of the American Indian on the Mall. The
vast majority of the Smithsonian's Capital projects are under $1 million
in cost, so the need for phased work is only present in the very largest
capital projects. A goal of OFEO, given adequate resources in the
Facilities Planning and Design account, is to have designs funded 2 years
in advance of project execution, and to have at least 35 percent of the
design complete prior to final funding decisions.

8. Consider innovative Within the recent environment of constrained
funding for the capital program, the Smithsonian has approaches to full
up-front engaged in unprecedented fund-raising for design and
construction. Fully one third of the total project funding. costs of the
National Museum of the American Indian on the Mall come from privately
raised funds, as

does the entire construction of the National Air and Space Museum's Steven
F. Udvar-Hazy Center. This kind of partnership with the private sector
will continue to be an important source of support in the completion of
the Patent Office Building revitalization, the overhaul of the major
exhibitions halls at the National Museum of American History, and the
future construction of the National Museum of African American History and
Culture.

IV. Use project management techniques to optimize project success.

9. Monitor project performance Monitoring project performance is the
fundamental responsibility of OFEO's project, design and and establish
incentives for construction managers. The requirements for project
schedules, cost estimates, milestone accountability. submissions and
regular project meetings are outlined fully in the Project Management
Handbook. In

addition, on the largest projects, monthly executive meetings with museum
directors and the OFEO director are held, as well as quarterly oversight
meetings with the deputy secretary/chief operating officer and chief
financial officer. There are two primary incentives for accountability:
project status is reported regularly to individuals outside the project
authority, as noted above; and, project managers' performance evaluations
are based on qualitative and quantitative execution of their individual
capital programs.

10. Use cross-functional teams to OFEO project teams consist of a lead
project manager, design manager, resident engineer, client

plan for and manage projects. representatives, and contracting specialists
and, during design reviews, representatives of the Offices of Safety and
Environmental Management, Protection Services, Facilities Planning and
Resources, Information Technology and others. Also see items II. 4. and
IV. 9. above.

V. Evaluate results and incorporate lessons learned into the
decision-making process 11. Evaluate results to determine Performance
metrics are a monthly feature of project management in OFEO. Measures of
overall if organizationwide goals have capital performance, monthly
contract obligations, time and cost growth on the largest projects and
been met. preproject planning are included within the larger program of
OFEO performance metrics. The

preproject planning reporting is particularly helpful in measuring
customer satisfaction, as it monitors the team's alignment on scope
throughout the life of the project, while there is still time to do
something about it if disagreements occur.

  Appendix IV Smithsonian's Efforts to Implement Leading Practices in Capital
                                Decision-Making

                         (Continued From Previous Page)

                 Principles and practices Smithsonian's efforts

12. Evaluate the decision-making Documents such as the Project Management
Handbook and the SD-410 are only useful if they are process: reappraise
and update up-to-date and used. Currently, both documents are being
revised. Both revised documents are in the to ensure that goals are met.
review process and will be incorporated into OFEO standard practices.
External evaluation of OFEO

projects is a useful tool for the largest and most complex projects.
Within the past 2 years, the Smithsonian's Inspector General's office has
audited three projects and the Smithsonian has adopted the recommendations
made. Also sharing lessons learned outside the organization is a valuable
means of achieving feedback and OFEO staff has participated in events for
numerous professional organizations such as the Federal Facilities Counsel
and the Construction Industry Institute.

                        Source: Smithsonian Institution.

Appendix V

Facility Revitalization and Construction Project Code Assignment Matrix

                                  Project type

Condition Level                   Revitalization and       Construction    
                                           renewal          
                                                        C D 
                          A         B Nonroutine Energy/            E         
                    Shell/System  Code compliance/ Capital     Alterations    
                                  Operational               
                       failure        Security Repairs      and modifications 
                                         efficiency         
I - Catastrophic Priority code    PC -1 PC - 2 PC - 2     Not applicable   
                       (PC) -1                              
    II - Critical      PC - 2        PC -2 PC - 3 PC - 3         PC - 3       
    III - Routine      PC - 3        PC -3 PC - 4 PC - 4         PC - 4       
    IV - Can defer     PC - 5        PC -5 PC - 5 PC - 5         PC - 5       

Source: Smithsonian Institution.

Notes:
Priority codes (PC)
PC-1 equals the budget year.
PC-2 equals the budget year plus 1 year.
PC-3 equals the budget year plus 2 years.
PC-4 equals the budget year plus 3 years.
PC-5 equals the budget year plus 4 years.

Condition level

Catastrophic -Significant projects requiring immediate funding in order to
correct severe safety hazards, active failures, and prevent the loss of
facilities. Asset Impact: Detrimental or irreversible failure, immediate
implementation.

Critical - High priority projects requiring funding in the next fiscal
year to avoid failure or correct serious safety/security deficiencies.
Asset/Program Impact: Imminent failure, program begins in 1 to 3 years.

Routine - Predicted work that needs funding within 4 years. Asset/Program
Impact: Moderate risk, program begins in 4 to 5 years.

Can defer - Work that can be deferred for 5 years. Asset/Program Impact:
Negligible risk, program begins within 5+ years.

Project type examples

Shell/System failure -Roof leaks, building piping leaks, and utility
system and equipment failures.

Code compliance/Security - Replacement/upgrade/modification to fire
detection/suppression systems, life safety/accessibility systems and
security systems, and building modifications.

Nonroutine capital repairs -One-time repair work to correct significant
problem (i.e., all the doors in a building or a single HVAC component).

Energy/Operational efficiency - Projects with a 7-year cost-effective
payback period.

Alterations and modification -Approved master plan projects and work to
sustain existing or changing missions.

Appendix VI

Flow Chart of the Prioritization Decision-Making Process for Minor Repair
and Maintenance

                        Source: Smithsonian Institution.

Appendix VII

Scope and Methodology

To determine how the condition of the Smithsonian's facilities affects
public and scientific access to the collections, and the collections
themselves, we toured 11 facilities-the Arts and Industries Building, the
Smithsonian Administration Building, the Garber Center, the Cultural
Resource Center, the National Air and Space Museum, the National Museums
of American History and Natural History, National Zoological Park, the
Renwick Gallery, the Smithsonian Environmental Research Center, and the
Victor Building. We visited these facilities because the Smithsonian
identified them as having the most serious problems. The Garber Center has
about 40 buildings, the National Zoological Park has in excess of 40
buildings and the Smithsonian Environmental Research Center has in excess
of 30 buildings. We interviewed OFEO zone mangers and building mangers for
the facilities we visited, and contacted directors of other Smithsonian
facilities, both local and nationwide, asking them to identify their
problems.

To determine how the Smithsonian has changed its facilities management and
prioritizes its revitalization, construction, and minor repair and
maintenance programs, we reviewed a variety of documents including the
National Academy of Public Administration's (NAPA) 2001 report on the
Smithsonian, the facility organizational chart, Facilities Project
Management Handbook, drafts of the Operation and Maintenance Handbook,
Construction Procedural Guidelines, and Cost Management Guide (for
estimating costs), Facility Revitalization and Construction Project Code
Assignment Matrix, the Flow Chart of the Prioritization Decision-Making
Process for Minor Repairs and Maintenance, minutes of the Capital Planning
Board meetings and the Smithsonian Regents meetings for 2002 through 2004,
the National Research Council's

Committing to the Cost of Ownership: Maintenance and Repair of Buildings,
Federal Facilities Council's Budgeting for Facilites Maintenance and
Repair Activities and the Construction Industry Institute Best Practices
Guide. We also interviewed the director and chief of staff of the Office
of Facilities Engineering and Operations (OFEO) and the eight heads of the
offices making up OFEO, the staff responsible for prioritizing both
capital projects and minor repair and maintenance, and the head of the
Smithsonian's Capital Planning Board.

To determine the cost and status of the Smithsonian's major (more than $5
million) construction and revitalization projects and minor repair and
maintenance projects, we toured 11 facilities (as previously identified)
to view the Smithsonian's facility problems; we reviewed the NAPA report,
three Smithsonian Inspector General reports on the construction of the

Appendix VII Scope and Methodology

National Museum of the American Indian, the Patent Office Building, and
the Steven F. Udvar-Hazy Center, the 2006 to 2010 Facility Capital Program
Summary, minutes of the Capital Planning Board meetings and the
Smithsonian Board of Regents meetings for 2002 through 2004, individual
project operational reports, monthly executive reports, contractor
progress reports, facility assessments, and other appropriate reports; and
interviewed the OFEO director, the directors of all OFEO offices, and
project executives and project managers responsible for oversight of
projects. OFEO also provided cost estimates for revitalization and
construction projects and the minor repair and maintenance program. We
assessed the reliability of the estimates by reviewing the processes used
to determine both revitalization and construction estimates, and minor
repair and maintenance estimates. As noted in the main body of this
report, most of the revitalization and construction estimates are
"order-of-magnitude" estimates that can vary by plus or minus 30 to 50
percent. Because such variation is typical for these types of cost
estimates and our objective is to use these figures to provide the
estimated costs of the Smithsonian's facilities projects, we believe that
these data are reliable for the purposes of our report.

To determine under what basic authorities the Smithsonian operates its
revitalization, construction, and minor repair and maintenance programs,
and how the Smithsonian uses its federal appropriations and trust monies
to fund these programs, we researched the Smithsonian's enabling
legislation; the statutes under which it currently operates, including
appropriations acts and numerous statutes authorizing Smithsonian
Institution facilities from the 1950s; congressional budget requests;
fiscal year 2002, 2003, and 2004 audited financial statements and
management letters;1 and project operational review reports. We
interviewed the chief financial officer, assistant general counsel, and
other appropriate staff. We conducted our work between April 2004 and
April 2005 in accordance with generally accepted government auditing
standards.

1The auditor expressed unqualified opinions on the fiscal year 2002, 2003,
and 2004 financial statements. They issued management letters with
suggested improvements that the Smithsonian agreed to implement.

                                 Appendix VIII

                   Comments from the Smithsonian Institution

Appendix VIII
Comments from the Smithsonian Institution

Appendix IX

                     GAO Contacts and Staff Acknowledgments

GAO Contacts	John Finedore, (202) 512-6248 Tom Keightley, (202) 512-5225

Staff 	In addition to those named above, Bess Eisenstadt, Susan
Michal-Smith, Faye Morrison, and Lisa Wright-Solomon made key
contributions to this

Acknowledgments report.

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