Capitol Visitor Center: Update on Status of Project's Schedule
and Costs (14-JUL-05, GAO-05-910T).
This testimony discusses the Architect of the Capitol's (AOC)
progress in achieving selected project milestones and in managing
the Capitol Visitor Center (CVC) project's schedule since
Congress's June 14 hearing on the project. We will also discuss
the project's costs and funding, including the potential cost
impact of schedule-related issues. Our observations today are
based on our review of schedules and financial reports for the
CVC project and related records maintained by AOC and its
construction management contractor, Gilbane Building Company; our
observations on the progress of work at the CVC construction
site; and our discussions with AOC's Chief Fire Marshal and CVC
project staff, including AOC, its major CVC contractors, and
representatives of an AOC schedule consultant, McDonough Bolyard
Peck (MBP). We did not perform an audit; rather, we performed our
work to assist Congress in conducting its oversight activities.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-05-910T
ACCNO: A29998
TITLE: Capitol Visitor Center: Update on Status of Project's
Schedule and Costs
DATE: 07/14/2005
SUBJECT: Construction contracts
Contract administration
Facility construction
Contract oversight
Contract performance
Contractors
Cost analysis
Federal facilities
Federal funds
Future budget projections
Schedule slippages
Public visitor-centers
Capitol Visitor Center Project
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GAO-05-910T
United States Government Accountability Office
GAO Testimony
Before the Subcommittee on the Legislative Branch, Committee on
Appropriations, U.S. Senate
For Release on Delivery Expected at 10:30 a.m. EDT Thursday, July 14, 2005
CAPITOL VISITOR CENTER
Update on Status of Project's Schedule and Costs
Statement of Bernard L. Ungar, Director Terrell Dorn, Assistant Director
Physical Infrastructure Issues
GAO-05-910T
Mr. Chairman and Members of the Subcommittee:
We are pleased to be here today to assist the Subcommittee in monitoring
progress on the Capitol Visitor Center (CVC) project. As requested, we
will focus our remarks today on the Architect of the Capitol's (AOC)
progress in achieving selected project milestones and in managing the
project's schedule since the Subcommittee's June 14 hearing on the
project.1 We will also discuss the project's costs and funding, including
the potential cost impact of schedule-related issues. Our observations
today are based on our review of schedules and financial reports for the
CVC project and related records maintained by AOC and its construction
management contractor, Gilbane Building Company; our observations on the
progress of work at the CVC construction site; and our discussions with
AOC's Chief Fire Marshal and CVC project staff, including AOC, its major
CVC contractors, and representatives of an AOC schedule consultant,
McDonough Bolyard Peck (MBP). We did not perform an audit; rather, we
performed our work to assist Congress in conducting its oversight
activities.
In summary, AOC and its major construction contractors have made progress
on the project since the Subcommittee's June 14 hearing, but work on some
of the selected milestones scheduled for completion by today's hearing is
incomplete; some work has been postponed; and some new issues have arisen
that could affect the project's progress. Specifically, as of July 12,
AOC's sequence 2 contractor, Manhattan Construction Company, had completed
work on 11 of the 17 selected milestones scheduled for completion before
today's hearing; however, it completed only 3 of the 17 milestones on
time. The sequence 2 contractor missed the 14 remaining milestones for
such reasons as unforeseen site conditions, design problems, and more time
being taken to complete some other work than expected. In addition, the
date scheduled for the initial operation of the utility tunnel is now
about 5 months later than AOC had anticipated, and unforeseen conditions
could delay the installation of stone in the East Front. Although the June
project schedule shows that the delay on the East Front stonework would
move the scheduled opening date for the CVC project to October 19, 2006,
AOC does not expect the delays in completing the remaining milestones,
including the utility tunnel
1GAO, Capitol Visitor Center: Effective Schedule Management and Updated
Cost Information Are Needed, GAO-05-811T (Washington, D.C.: June 14,
2005). See also GAO, Capitol Visitor Center: Priority Attention Needed to
Manage Schedules and Contracts,
GAO-05-714T (Washington, D.C.: May 17, 2005).
and East Front stonework, to postpone the project's scheduled September
2006 completion date. In AOC's view, the contractor can recover the time
lost in completing these milestones, as well as make up for delays in
completing interior stonework, by such means as using temporary equipment,
adding workers, or resequencing work, although using temporary equipment
or adding workers will also increase the project's costs. Largely because
of past problems, remaining risks and uncertainties, and the number of
activities that are not being completed on time, we continue to believe
that the project is more likely to be completed in the December 2006 to
March 2007 time frame than in September 2006. AOC and its construction
management contractor have continued their efforts to respond to two
recommendations we made to improve the project's management-having a
realistic, acceptable schedule and aggressively monitoring and managing
adherence to that schedule. However, we still have some concerns about the
amount of time scheduled for some activities, the extent to which
resources can be applied to meet dates in the schedule, the linkage of
related activities in the schedule, and the integration of planning for
completing construction and starting operations. Since the Subcommittee's
last CVC hearing, AOC has engaged contractors to help it respond to two
other recommendations we made- developing risk mitigation plans and
preparing a master schedule that integrates the major steps needed to
complete construction with the steps needed to prepare for operations. AOC
has also been taking a number of actions to improve coordination between
the CVC project team and AOC's Fire Marshal Division. Insufficient
coordination in this area has already affected the project's schedule and
cost, and could do so again if further improvements are not made.
We continue to believe that the project's estimated cost at completion
will be between $522 million and $559 million, and that, as we have
previously indicated, AOC will likely need as much as $37 million more
than it has requested to cover risks and uncertainties to complete the
project. At this time, we believe that roughly $5 million to $15 million
of this $37 million is likely to be needed in fiscal year 2006, and the
remainder in fiscal year 2007. In the next 2 to 3 months, AOC plans to
update its estimate of the project's remaining costs. We will review this
estimate and provide Congress with our estimate together with information
on when any additional funding is likely to be needed. During the next
several months, AOC is likely to face competing demands for funds that can
be used for either CVC construction or operations, and it will be
important for AOC to ensure that the available funds are optimally used.
Finally, we are concerned that AOC may incur costs to open the facility to
the public in September 2006 that it would not incur if it postponed the
opening until
Schedule Milestones and Management
after the remaining construction work is more or fully complete-that is,
in March 2007, according to AOC's estimates.
We are recommending that AOC designate who will be responsible for
integrating the planning and budgeting for CVC construction and operations
and notify Congress in advance of any estimated costs it believes it will
incur to open CVC to the public in September 2006 rather than when the
facility is more complete. AOC agreed with these recommendations.
AOC and its major construction contractors have moved the CVC project
forward since the Subcommittee's June 14 hearing, although the majority of
the selected milestones scheduled for completion by today's hearing have
not been completed on time. According to the construction management
contractor, the base project's construction was about 70 percent complete
as of June 30, compared with about 65 percent as of May
31. The sequence 1 contractor, Centex Construction Company, which was
responsible for the project's excavation and structural work, has
continued to address punch-list items, such as stopping water leaks.
Although AOC had expected the sequence 1 contractor to complete the
punch-list work and be off-site by June 30, some of this work remains to
be done. The sequence 1 contractor has closed its on-site project office
and plans to send workers back to the site to complete the remaining work.
AOC has retained funds from the sequence 1 contractor that it believes
will be sufficient to cover the cost of the remaining work. Furthermore,
the sequence 2 contractor, which is responsible for the mechanical,
electrical, plumbing, and finishing work, has continued to make progress
in these areas, including erecting masonry block, placing concrete, and
installing finish stone, drywall framing, plaster, and granite pavers.
Many of the granite pavers that were installed on the plaza deck for the
inauguration have to be replaced because of problems with quality or
damage after installation. The sequence 2 contractor plans to replace
these pavers when the plaza deck will no longer be needed for deliveries
of construction materials. The sequence 2 contractor has also continued
work on the utility tunnel, and in June, AOC executed a sequence 2
contract modification to construct the House connector tunnel. AOC expects
this work to begin soon.
As the Subcommittee requested, we worked with AOC to select sequence 2
milestones that the Subcommittee can use to help track the project's
progress from the Subcommittee's May 17 hearing to July 31. We and AOC
selected 22 milestones, of which 11 were scheduled for completion before
June 14, 6 others before July 14, and 5 others before July 31. These
milestones are shown in appendix 1 and include activities on the project's
critical path, as well as other activities that we and AOC believe are
important for the project's timely completion.2 As we reported during the
Subcommittee's June 14 hearing, AOC's sequence 2 contractor completed 6 of
the 11 selected activities scheduled for completion before that date-3
were completed on time and 3 were late. The remaining 5 activities had not
been completed as of June 14. Of these 5, 4 have now been completed and as
of July 12, 1 remained incomplete. In addition, as of July 12, the
contractor was late in completing 1 of the 6 selected activities scheduled
for completion between June 14 and July 14 and had not yet completed the
remaining 5. AOC does not expect these delays to extend the project's
scheduled September 2006 completion date because it believes that the
sequence 2 contractor can recover the lost time.
A few months ago, AOC expected the utility tunnel to be operational in
October 2005, but it extended that date to March 20, 2006, before the June
hearing. The June schedule shows the tunnel being operational on March
7. The sequence 2 contractor has indicated that the impact of the
Octoberto-March delay on CVC construction could be mitigated by using
temporary dehumidification equipment, adding more workers to certain
utility tunnel activities, or both. However, this mitigation approach
would increase the government's costs. We previously identified the
utility tunnel as a project schedule and cost risk because of possible
unforeseen conditions associated with underground work, and AOC and the
sequence 2 contractor believe that such risk still exists with respect to
the remaining tunnel work. Given this risk and the importance to the rest
of the project of having the utility tunnel operational as soon as
possible, AOC has asked the project team to explore options for
accelerating the completion of the work necessary to begin the tunnel's
operations. We agree with AOC that delays in making this tunnel
operational could have significant adverse effects on other project
elements and that priority attention should be given to this area.
Accelerating work may be cost-beneficial in this case.
2A critical path is a sequence of activities in a schedule that has the
longest duration. There is no scheduling flexibility or slack time
associated with the activities. This means that a delay in a critical path
activity will delay the entire project unless a way is found to reduce the
time required for other activities along the critical path. A schedule may
have multiple critical paths simultaneously, and the critical path through
a project can change as the project is updated and as the time estimated
to complete the tasks changes. Currently, AOC's schedule shows CVC's
critical path running through some interior wall stone and East Front
stonework. The schedule also shows other work elements, such as the
utility tunnel and millwork, as near critical (i.e., having little slack
time).
Since the June 14 hearing, the sequence 2 contractor has also encountered
unforeseen conditions that, according to AOC's construction management
contractor, could delay the installation of stone on the Capitol's East
Front. Unless mitigated, this delay, in turn, could delay AOC's estimated
September 15, 2006, opening date. In fact, the June schedule shows a 24day
delay for this work, which is on the project's critical path, and
therefore pushes AOC's scheduled date for opening CVC to the public to
October 19, 2006. AOC and its construction management contractor are
assessing the situation and expect to have more information on this
problem within the next month. However, they believe that they will be
able to recover the lost time by resequencing work, although they
acknowledge that their mitigation approach would require sufficient stone
to be available. The project has not been receiving stone in the
quantities set forth in the delivery schedule-a risk that we previously
identified- and AOC and its contractors have been taking action to address
this problem, but have not yet resolved it. Mitigating this potential
delay in East Front stone installation could increase the government's
costs if the mitigation involves, among other actions, expediting the
installation to recover lost time.
Our May 17 and June 14 statements contained several observations on AOC's
management of the project's schedules, including our view that problems in
this area contributed to slippage in the project's scheduled completion
date and additional project costs associated with delays. The statements
also discussed recommendations we had already made to AOC to enhance its
schedule management. AOC had agreed with these recommendations and had
generally begun to implement them, but we believed that it still needed to
give priority attention to them to keep the project on track and as close
to budget as possible. An updated discussion follows of the issues that
need AOC's priority attention, along with current information on the
status of AOC's actions to address these issues.
o Having realistic time frames for completing work and obtaining fully
acceptable schedules from contractors. Over the course of the project,
AOC's schedules have shown dates for completing tasks that project
personnel themselves considered optimistic or unlikely to be met. In
addition, the master project schedule (prepared by AOC's construction
management contractor) that AOC was using in May 2005 (the April schedule
that AOC said it would use as a baseline for measuring progress on the
project) did not tie all interrelated activities together and did not
identify the resources to be applied for all the activities, as AOC's
contract requires. During the Subcommittee's June 14 hearing, AOC said
that it would reassess the time scheduled for tasks by today's hearing.
Since the
Subcommittee's June 14 hearing, AOC's construction management and sequence
2 contractors reviewed the reasonableness of the time scheduled for 14
critical or near-critical activities and determined that, in general, the
time shown in the May 2005 schedule reasonably reflected the time required
to perform 11 of these activities. In addition, the sequence 2 contractor
agreed to provide more detail about the 3 remaining activities so that the
reasonableness of the time scheduled for them could be reviewed later.
Although the contractors' review did not involve a detailed, data-based
analysis of the time scheduled for activities using such information as
crew size and worker productivity, AOC's construction management
contractor said that it would do such analyses in the future, as
appropriate. The construction management contractor said it has not yet
done such an analysis for stonework because, to date, less stone has been
delivered to the site than was expected and more stone workers have been
available than could be used, given the shortage of stone. In AOC's view,
this stone shortage has begun to delay important activities, and as we
previously indicated, AOC is working with its contractors to resolve the
problem.
According to AOC's construction management contractor, both the project's
May and June 2005 master schedules (1) reflect significant improvement in
the linkage of interrelated tasks, although the contractor recognizes that
more work needs to be done in this area and (2) generally provide
sufficient information to manage the project's resources. However, the
contractor also recognizes the need for the sequence 2 and other
contractors to continue adding more detail to the activities scheduled for
some project elements, such as the exhibit and expansion spaces, so that
more of the interrelated activities will be linked in the schedule. The
contractor also said that it will be continuously reassessing the extent
to which construction contractors identify the resources they plan to
apply to meet scheduled completion dates, as contractually required. Both
adding detail to activities and identifying the resources to be applied
are helpful in assessing the reasonableness of the time scheduled and in
managing contractors' performance. The sequence 2 contractor has provided
a separate schedule showing its target dates for adding more detail to 30
project tasks. On July 8, AOC's construction management contractor
accepted the April project schedule, subject to several conditions.
Because the May 2005 master schedule for the CVC project contains
additional detail on activities and information on resources to be
applied,
we agree with AOC's construction management contractor that this schedule
represents an improvement over earlier schedules. However, we still have
concerns about the extent to which the schedule links related activities,
which the construction management contractor has agreed to address, and
about whether AOC's September 15, 2006, target date for opening the
facility to the public is realistic. For the following reasons, we
continue to believe that the project is more likely to be substantially
completed in the December 2006 to March 2007 time frame than by September
2006:
o Because of unforeseen site conditions and other problems, AOC's
construction contractors have had difficulty meeting a number of
milestones. The project still faces risks and uncertainties that could
adversely affect its schedule. As we noted in our June 14 testimony, the
number of critical and near-critical paths the construction management
contractor has identified complicates schedule management and increases
the risk of problems that could lead AOC to miss the scheduled completion
date. Like the project's May 2005 schedule, the June schedule shows seven
paths that are critical or near critical. Among the critical paths are
East Front stonework and some interior stonework, which slipped by 24 days
and 3 days in June, respectively. In addition, some other interior
stonework that is not generally on a critical path, such as the
installation of wall stone in the Great Hall, has slipped by about 4
months since April because of stone shortages according to AOC. Continued
slippages in interior stonework could make it difficult for the sequence 2
contractor to meet the September 15, 2006, completion date. Although the
CVC project team believes that it can recover this time, its ability to do
so is not yet clear, given the stone supply problem facing the project.
Furthermore, although work on the utility tunnel progressed during June,
the tunnel work continues to face risks and uncertainties that could delay
the project, and the May and June schedules show that the start and finish
dates for a number of activities have continued to slip. Although it is
possible for AOC to recover this time, continued slippage could push so
many activities to later dates that the contractors may not be able to
complete all the work in the remaining available time.
o In our opinion, AOC lacks reasonable assurance that its contractors
have accurately estimated the time necessary to complete work for a number
of activities in the schedule. Although the construction management
contractor's recent review of how much time is needed to complete schedule
activities was helpful, we are still concerned about the reasonableness of
the time allowed for a number of the activities. For example, one of the
activities reviewed in June whose scheduled duration was found to be
generally reasonable was final occupancy inspections.
Although AOC's Fire Marshal Division is to do critical work associated
with this activity, the duration review that took place since the June 14
hearing occurred without any input from that division, which is to conduct
fire safety and occupancy inspections for the project and approve its
opening to the public. The Chief Fire Marshal told us that although
coordination has improved between his office and the CVC project team, he
has not always had an opportunity to review project documentation early in
the process and has not yet received the project schedule. As a result, he
was uncertain whether the schedule provided enough time for his office to
do its work. For example, as of July 8, he had not yet received
documentation for the fire protection systems, which his office needs to
examine before it can observe tests of these systems as the CVC team has
already requested. The Fire Marshal Division will also be involved in fire
alarm testing; the construction management contractor plans to assess the
duration of this activity later after more detail is added to the
schedule. In addition, at the time the construction management contractor
performed its duration reassessment of East Front stonework, the project
was experiencing difficulty getting stone deliveries on time. It is
unclear to us how the duration of the stonework could have been determined
to be reasonable given this problem and the lack of a clear resolution at
the time.
o The May 2005 schedule includes a number of base project activities
that could be completed after September 15, 2006, even though their
completion would seem to be important for CVC to be open to the public.
Such activities include installing security systems, kitchen equipment,
and theater seating. According to the schedule, the late finish dates for
these activities are after September 15. The late finish date is the
latest date that an activity can be completed without delaying the
scheduled completion date for the entire project. According to the
construction management contractor, a number of activities in the schedule
that are important to CVC's opening were not linked to the September 15
opening date in the schedule. The contractor agreed to address this issue.
o Last week, we began to update our risk assessment of the project's
schedule and plan to have this update completed in September. AOC has also
engaged a consultant to perform a risk assessment of the project's
schedule and expects the assessment to be done by mid-September. We
believe that better information on the likelihood of AOC's meeting its
September 15, 2006, opening date will be available after our update and
AOC's schedule risk assessment are done.
o Aggressively monitoring and managing contractors' adherence to the
schedule, including documenting and addressing the causes of
delays, and reporting accurately to Congress on the status of the
project's schedule. We noted in our May 17 testimony that neither AOC nor
its construction management contractor had previously (1) adhered to
contract provisions calling for monthly progress review meetings and
schedule updates and revisions, (2) systematically tracked and documented
delays and their causes as they occurred or apportioned their time and
costs to the appropriate parties on an ongoing basis, and (3) always
accurately reported on the status of the project's schedule. On June 7 and
July 8, AOC, its construction management contractor, the sequence 2
contractor, and AOC's schedule consultant conducted the first and second
monthly reviews of the schedule's status using a newly developed approach
that we discussed during the Subcommittee's June 14 hearing. Additionally,
on June 28, we met with AOC and its construction management contractor to
discuss how delays are to be analyzed and documented in conjunction with
the new approach to schedule management. During that meeting, AOC's
construction management contractor agreed to have its field supervisors
document delays and their causes on an ongoing basis and its project
control engineer summarize this information for discussion at the monthly
schedule reviews. After assessing the new approach and observing the first
two review sessions, we believe that, if effectively implemented and
sustained, this approach should generally resolve the schedule management
concerns we previously raised, including how delays will regularly be
handled and how better information on the status of the project will be
provided to Congress. As we indicated on June 14, we are encouraged by the
construction management contractor's addition of a full-time project
control engineer to the project and have seen noteworthy improvements in
schedule management since his arrival. Nevertheless, we plan to closely
monitor the implementation of this new approach, including the resources
devoted to it, the handling of delays, and the accuracy of the information
provided to Congress.
o Developing and implementing risk mitigation plans. While monitoring
the CVC project, we have identified a number of risks and uncertainties
that could have significant adverse effects on the project's schedule and
costs. Some of these risks, such as underground obstructions and
unforeseen conditions, have already materialized and have had the
anticipated adverse effects. We believe the project continues to face
risks and uncertainties, such as unforeseen conditions associated with the
project's remaining tunnels, the East Front, and other work; scope gaps or
other problems associated with the segmentation of the project between two
major contractors; and shortages in the supply of stone and skilled stone
workers. As discussed during the Subcommittee's June 14 hearing, AOC has
not yet implemented our recommendations that
it develop risk mitigation plans for these types of risks and
uncertainties, but it has agreed to do so by mid-September. On July 1, AOC
added assistance in risk mitigation to the scope of its contract with its
schedule consultant.
o Preparing a master schedule that integrates the major steps needed to
complete CVC construction and the steps necessary to prepare for
operations. A number of activities, such as obtaining operators' input
into the final layouts of retail and food service areas, hiring and
training staff, procuring supplies and services, and developing policies
and procedures, need to be planned and carried out on time for CVC to open
to the public when construction is complete. Although AOC has started to
plan and prepare for CVC operations, as we indicated in our May 17 and
June 14 testimonies, it has not yet developed a schedule that integrates
the construction activities with the activities that are necessary to
prepare for operations. The Subcommittee requested such a schedule during
its April 13, 2005, hearing on AOC's fiscal year 2006 budget request.
Because it lacked funds, AOC had not been able to extend the work of a
contractor that had been helping it plan and prepare for operations.
During the week of June 6, AOC received authority to spend the funds
needed to re-engage this contractor, and on June 30, AOC awarded a
contract for the continued planning and preparation for CVC operations.
Now that AOC has re-engaged its operations planning contractor, we believe
that close coordination between AOC staff working with this contractor and
the CVC project's construction team will be especially important for at
least two reasons. First, the operations planning contractor's scope of
work includes both the design of certain space within the CVC project and
the wayfinding signs that are to be used within the project, and the
timing and content of this work needs to be coordinated with CVC
construction work. Second, about $7.8 million3 is available for either CVC
construction or operations, and it will be important for AOC to balance
the need for both types of funding to ensure optimal use of the funds.
Moreover, it is not clear to us who in AOC will be specifically
responsible for integrating the construction and operations schedules and
for overseeing the use of the funds that are available for either
construction or operations.
3See footnote 6.
Project Costs and Funding
As we said during the Subcommittee's May 17 and June 14 hearings, we
estimate that the cost to complete the construction of the CVC project,
including proposed revisions to its scope, will range from about $522
million without provision for risks and uncertainties to about $559
million with provision for risks and uncertainties. As of July 11, 2005,
about $483.7 million had been provided for CVC construction.4 In its
fiscal year 2006 budget request, AOC asked Congress for an additional
$36.9 million for CVC construction. AOC believes this amount will be
sufficient to complete construction and, if approved, will bring the total
funding provided for the project's construction to $520.6 million. Adding
$1.7 million to this amount for additional work related to the air
filtration system that we believe will likely be necessary brings the
total funding needed to slightly more than the previously cited $522
million. AOC believes that it could obtain this $1.7 million, if needed,
from the Department of Defense, which provided the other funding for the
air filtration system. AOC's $36.9 million budget request includes $4.2
million for potential additions to the project's scope (e.g.,
congressional seals, an orientation film, and storage space for backpacks)
that Congress will have to consider when deciding on AOC's fiscal year
2006 CVC budget request.
AOC has not asked Congress for an additional $37 million (the difference
between $559 million and $522 million) that we believe will likely be
needed to address the risks and uncertainties that continue to face the
project. These include, but are not limited to, shortages in the supply of
stone, unforeseen conditions, scope gaps, further delays, possible
additional requirements or time needed because of life safety or security
changes or commissioning, unknown operator requirements, and contractor
coordination issues. These types of problems have been occurring, and as
of June 30, 2005, AOC had received proposed sequence 2 change orders whose
costs AOC now estimates exceed the funding available in fiscal year 2005
for sequence 2 changes by about $1.3 million. AOC's estimate of these
change order costs has grown by about $900,000
4This amount does not include $700,000 made available by the Capitol
Preservation Commission from the Capitol Preservation Fund for the design
of the Library of Congress tunnel.
during the past 4 weeks.5 AOC plans to cover part of this potential
shortfall by requesting approval from the House and Senate Committees on
Appropriations to reprogram funds that AOC does not believe will be needed
for other project elements. At this time, AOC does not believe that it
will need additional funds in fiscal year 2005, assuming it receives
reprogramming authority for sequence 2 changes, unless it reaches
agreement with the sequence 2 contractor on the costs associated with 10
months' worth of delays that have already occurred. If AOC needs funds for
this purpose or for other reasons, it can request approval from the
Appropriations Committees to use part of the $10.6 million that Congress
approved for transfer to the CVC project from funds appropriated for
Capitol Buildings operations and maintenance.6
For several reasons, we believe that AOC may need additional funds for CVC
construction in the next several months. These reasons include the pace at
which AOC is receiving change order proposals for sequence 2 work, the
problems AOC has encountered and is likely to encounter in finishing the
project, the uncertainties associated with how much AOC may have to pay
for sequence 2 delays, and uncertainty as to when AOC will have fiscal
year 2006 funds available to it. For example, AOC is likely to incur
additional costs for dehumidification or for additional workers to
mitigate the expected delay in the utility tunnel. AOC may also incur more
costs than it expects for certain activities, such as those necessary to
support security during the remainder of the project's construction. AOC
may be able to meet these needs as well as the other already identified
needs by obtaining approval to use some of the previously discussed $10.6
5In our May 17 testimony, we reported that AOC had about $700,000
remaining in its fiscal year 2005 funding for sequence 2 changes after
deducting the estimated costs for proposed changes it had received. As of
June 1, the estimated costs for sequence 2 changes exceeded the amount
available for such changes by about $400,000. Since then, another $900,000
in estimated costs for potential change orders has been identified. About
two-thirds of the $900,000 increase in estimated costs for sequence 2
changes during June was for additional fire safety work.
6Public Law 108-447, enacted in December 2004, provided that up to $10.6
million could be so transferred upon the approval of the House and Senate
Committees on Appropriations for the use of the CVC project. In March
2005, AOC requested that about $4 million of these funds be transferred to
CVC, including some funds for such work as the design of the gift shop
space and consultant services to transition the project from construction
to operations. As of June 10, AOC had received approval to use about $2.8
million of this $10.6 million, leaving a balance of about $7.8 million
that can be used in the future. None of the $10.6 million is included in
the previously cited $483.7 million.
million and by additional reprogramming of funds.7 However, these funds
may not be sufficient to address the risks and uncertainties that may
materialize from later this fiscal year through fiscal year 2007. Thus,
while AOC may not need all of the $37 million we have suggested be allowed
for risks and uncertainties, we believe that, to complete the construction
of CVC's currently approved scope, AOC is likely to need more funds in
fiscal years 2006 and 2007 than it has already received and has requested.
Although the exact amount and timing of AOC's needs are not clear, we
believe that between $5 million and $15 million of this $37 million may be
required in fiscal year 2006. Effective implementation of our
recommendations, including risk mitigation, could reduce AOC's funding
needs.
Since the Subcommittee's June 14 hearing, three issues related to the
project's costs have emerged that we believe should be brought to your
attention. Discussion of these issues follows.
o First, coordination within the CVC project team and between the team
and AOC's Fire Marshal Division has been an issue, especially with respect
to the project's fire protection systems. Although the CVC project team
established biweekly meetings with Fire Marshal Division staff in March
2005 to enhance coordination, gaps in coordination have, as discussed,
already led to uncertainty about whether enough time has been scheduled
for fire alarm testing and for building occupancy inspections. Such gaps
have also increased the costs associated with the fire protection system.
For example, AOC recently took contractual action costing over $90,000 to
redesign the mechanical system for the Jefferson Building connection to
the Library of Congress tunnel to meet the Fire Marshal Division's fire
safety requirements. According to the Chief Fire Marshal, he was not given
the opportunity to participate in the planning process before the design
of the Jefferson Building connection was substantially completed. In
addition, several fire-safety-related contract modifications and proposed
change orders for additional work now total over $3.5 million. With better
coordination between the CVC project team and the Fire Marshal Division,
the need for some of this work might have been avoided or identified
sooner, and had this work been identified during the original competition,
the price would have been subject to competitive pressures that might
7AOC has requested approval to reprogram about $1.6 million from sequence
1 construction and the East Front Interface to fund anticipated additional
costs for the House connector tunnel, the Jefferson Building connection to
the Library of Congress tunnel, and certain security-related work.
have resulted in lower costs. Because of the fire protection system's
increasing costs, disagreements within the CVC team and between the team
and the Fire Marshal Division over fire safety requirements, problems in
scheduling fire safety activities, and other related issues, we suggested
that AOC take appropriate steps to address the coordination of fire
protection activities related to the CVC project. AOC agreed and has taken
action. For example, starting this week, AOC's Fire Marshal Division
agreed to have a staff member work at the CVC site 2 days a week, and AOC
CVC staff recently agreed to provide the necessary documentation to the
Fire Marshal Division before its inspections or observations were needed.
o Second, as we indicated earlier in our testimony, we are concerned
about the integration of planning, scheduling, and budgeting for CVC
construction and operations. While the CVC project team has been
overseeing CVC construction, other AOC staff have been assisting the
operations planning contractor in planning and budgeting for CVC
operations. Close coordination between the two groups will be especially
important in the next few months, when decisions will likely have to be
made on how to use the $7.8 million remaining from the $10.6 million that
Congress made available to the CVC project for either operations or
construction. The Architect of the Capitol agreed to give this issue
priority attention.
o Finally, we are concerned that AOC may incur additional costs for
interim measures, such as temporary walls that it may have to construct to
open CVC to the public in September 2006. Such interim measures may be
needed to make the project safe for visitors if some other construction
work has not been completed. For example, AOC may have to do additional
work to ensure adequate fire protection for CVC, since the House and
Senate expansion spaces are not scheduled to be done until March 2007. In
addition, AOC may have to accelerate some work to have it completed by
September 15, 2006. While it is not necessarily unusual to use a facility
for its intended purpose before all construction work is complete, we
believe that it will be important for Congress to know what additional
costs AOC expects to incur to open CVC by September 15, 2006, so that
Congress can weigh the costs and benefits of opening the facility then
rather than at a later date, such as March 2007, when AOC plans to
complete the House and Senate expansion spaces.
Recommendations for To ensure that (1) Congress has sufficient
information for deciding when to open CVC to the public and (2) planning
and budgeting for CVC
Executive Action
construction and operations are appropriately integrated, we recommend
that the Architect of the Capitol take the following two actions:
o In consultation with other appropriate congressional organizations,
provide Congress with an estimate of the additional costs that it expects
will be incurred to open CVC to the public by September 15, 2006, rather
than later, such as after the completion of the House and Senate expansion
spaces.
o Promptly designate who is responsible for integrating planning and
budgeting for CVC construction and operations and give this activity
priority attention.
AOC agreed to take the actions we are recommending. According to AOC,
information on the estimated costs of the additional work necessary to
Agency Comments
open CVC to the public in September 2006 may not be available until this
fall. In addition, AOC said that the recent re-engagement of the
contractor assisting AOC in planning for CVC operations and the hiring of
an executive director for CVC, which AOC plans to do in the next few
months, are critical steps for integrating CVC construction and
operations.
Mr. Chairman, this completes our prepared statement. We would be happy to
answer any questions that you or other Subcommittee Members may have.
Contacts and For further information about this testimony, please contact
Bernard Ungar at (202) 512-4232 or Terrell Dorn at (202) 512-6923. Other
key
Acknowledgments contributors to this testimony include Shirley Abel,
Maria Edelstein, Elizabeth Eisenstadt, Brett Fallavollita, Jeanette
Franzel, Jackie Hamilton, Bradley James, Scott Riback, and Kris Trueblood.
Appendix I: Capitol Visitor Center Critical Construction Milestones, May
2005-July 2005
Scheduled Actual Activity Location completion completion
Wall Stone Area 1 Great Halla,b 5/11/05 6/06/05
Scheduled for completion between 5/17/05 and 6/14/05
Wall Stone Area 3 Base Support Great Halla 5/20/05 5/20/05
Wall Stone Layout Area 4 Great Hall 5/20/05 6/06/05
Saw Cut Road at 1st Street Utility Tunnela 5/24/05 6/27/05
Wall Stone Area 4 Base Support Great Halla 5/27/05 6/15/05
Wall Stone Layout Area 5 Great Hall 5/27/05 5/27/05
Masonry Wall Lower Level East Cong. Auditorium 6/03/05 5/25/05
Wall Stone Area 5 Base Support Great Halla 6/06/05 6/09/05
Wall Stone Layout Area 6 Great Hall 6/06/05 6/15/05
Drill/Set Soldier Piles at 1st Utility Tunnela 6/08/05
Street
Wall Stone Area 6 Base Support Great Halla 6/13/05 6/17/05
Scheduled for completion between 6/15/05 and 7/31/05
Wall Stone Layout Area 8 Great Hall 6/20/05
Masonry Wall Orientation 6/24/05 6/28/05
Theater
Wall Stone Layout Area 9 Great Hall 6/24/05
Wall Stone Area 9 Base Support Great Halla 7/05/05
Wall Stone Installation Area 2 Great Hall 7/06/05
Wall Stone Installation Area 3 Great Hall 7/06/05
Wall Stone Installation Area 4 Great Hall 7/15/05
Wall Stone Area 9 Base Great Halla 7/15/05
Excavate/shore Station 0-1 Utility Tunnela 7/21/05
Concrete Working Slab 1st
Street Utility Tunnela 7/26/05
Waterproof Working Slab Station 0-1 Utility Tunnela 7/29/05 Source: AOC's
April 2005 CVC sequence 2 construction schedule for the scheduled
completion dates and AOC and its construction management contractor for
the actual completion dates.
Note: Actual completion information was obtained on July 12.
aThese activities are critical.
bThis activity was scheduled for completion by the Subcommittee's May 17
hearing but was not done as of that date.
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