Capitol Visitor Center: Update on Status of Projects's Schedule  
and Cost As of May 24, 2006 (24-MAY-06, GAO-06-803T).		 
                                                                 
This testimony focuses on the Architect of the Capitol's progress
in achieving selected project milestones and in managing the	 
Capitol Visit Center project's schedule since Congress's April	 
27, 2006, hearing on the project. As part of this discussion, we 
will address a number of key challenges and risks that continue  
to face the project, as well as actions AOC has taken or plans to
take to address these risks. In addition, we will discuss the	 
status of the project's costs and funding.			 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-803T					        
    ACCNO:   A54699						        
  TITLE:     Capitol Visitor Center: Update on Status of Projects's   
Schedule and Cost As of May 24, 2006				 
     DATE:   05/24/2006 
  SUBJECT:   Construction contracts				 
	     Contract administration				 
	     Contract oversight 				 
	     Contract performance				 
	     Contractors					 
	     Cost analysis					 
	     Cost overruns					 
	     Facility construction				 
	     Federal facilities 				 
	     Federal funds					 
	     Future budget projections				 
	     Public visitor-centers				 
	     Schedule slippages 				 
	     Cost estimates					 
	     Capitol Visitor Center Project			 

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GAO-06-803T

                 United States Government Accountability Office

                                   Testimony

GAO

Before the Subcommittee on the Legislative Branch, Committee on Appropriations,
                                  U.S. Senate

For Release on Delivery Expected at 10:00 a.m. EDT Wednesday, May 24, 2006

CAPITOL VISITOR CENTER

      Update on Status of Projects's Schedule and Cost As of May 24, 2006

Statement of Terrell Dorn, Director Bernard L. Ungar, Director Physical
Infrastructure Issues

  GAO-06-803T

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. Our remarks will
focus 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 April 27, 2006, hearing on the project.1 As part of
this discussion, we will address a number of key challenges and risks that
continue to face the project, as well as actions AOC has taken or plans to
take to address these risks. In addition, we will discuss the status of
the project's costs and funding.

Our remarks 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 the CVC team (AOC and its major CVC contractors), AOC's
Chief Fire Marshal, and representatives from the U.S. Capitol Police. We
also reviewed AOC's construction management contractor's periodic schedule
assessments and daily reports on the progress of interior wall and floor
stonework.

In summary:

Since the Subcommittee's April 27 CVC hearing, the CVC team has continued
to move the project's construction forward, and AOC is still proposing the
same opening dates-April 2007 for the base CVC project and May 2007 for
the House and Senate expansion spaces-but we continue to believe, as we
said at the March and April hearings, that the proposed opening dates do
not allow enough time to complete several critical activities and to
address problems, challenges, risks, and uncertainties. Since the April 27
hearing, the installation of critical interior wall and floor stone has
continued, together with other interior and exterior construction work,
and the sequence 2 contractor has further developed plans to prevent trade
stacking2 during finish work. Although

1

GAO, Capitol Visitor Center: Update on Status of Project's Schedule and
Cost as of April 27, 2006, GA0-06-665T (Washington, D.C.: Apr. 27, 2006).

2

Trade stacking can occur when workers from different trades, such as stone
masons, electricians, plumbers, or plasterers, have to work in the same
area at the same time to meet a schedule, sometimes making it difficult to
ensure sufficient space and resources for concurrent work.

    Page 1 GAO-06-803T

the sequence 2 contractor exceeded its installation target for interior
wall stone during the last 4 weeks, the pace of floor stone installation
remained far below the targeted pace; the dates for completing the
construction of the overall base project and expansion spaces were
extended; and several activities fell behind schedule-not enough to affect
the overall completion dates based on the project schedule, but increasing
the potential for future delays. In addition, the sequence 2 contractor
met only one of the nine milestones being tracked for this hearing, and
this contractor's monthly billings continue to indicate that construction
work is not likely to be completed on schedule as AOC anticipated. The
CVC's fire protection system has not yet been approved; critical building
systems still have to be commissioned and tested; and although the
project's overall design is essentially complete, certain design or work
scope elements are still incomplete or are being clarified or refined. If
the CVC team is successful in addressing these issues, we believe that the
base CVC project can still possibly be opened to the public with a
temporary cap on visitor occupancy in May 2007 and that the expansion
spaces can likely be opened for occupancy beginning in mid-August to early
September 2007. AOC may be able to reduce some of the time scheduled for
the expansion spaces if it implements a phased opening plan and is able to
perform acceptance testing of the CVC and the expansion spaces
concurrently rather than sequentially-possibilities AOC is continuing to
explore. However, the delays that have occurred since the Subcommittee's
last CVC hearing compound the concern we previously expressed that AOC
will be challenged to meet even the later dates we are projecting because
of the problems, challenges, risks, and uncertainties facing the project.
Accordingly, as we indicated during the Subcommittee's April 27 CVC
hearing, we plan to reassess the project's schedule again this summer.

As we reported at the Subcommittee's March 15 and April 27 CVC hearings,
we estimate that the total cost to complete the entire CVC project is
about $556 million without an allowance for risks and uncertainties and
$584 million with such an allowance. To date, about $530 million has been
provided for CVC construction. We continue to estimate that AOC will need
about $25.6 million more in CVC construction funds to complete the entire
CVC project. This estimate does not allow for risks and uncertainties and
takes into account funding that AOC plans to use from existing
appropriations. In addition, as we indicated during the March 15 hearing,
AOC preliminarily expects to need about $950,000 in fiscal year 2007 AOC
general administration appropriations that Congress has not yet provided.
These funds are needed to pay for contractual support necessary to
complete acceptance testing of the facility's fire protection system in
time to meet the project's schedule. AOC plans to

Page 2 GAO-06-803T

AOC Has Moved Construction Forward, but Delays Continue and Risks and
Uncertainties Remain

determine if it can reduce the amount needed for this contractual support;
we will keep the Subcommittee apprised of this situation. Furthermore, the
CVC is likely to incur additional costs because of recent scope and design
changes related to its security and fire protection systems and problems
associated with the utility tunnel; however, our $556 million
cost-to-complete estimate may include sufficient contingency funds to
cover these costs. We plan to reassess our cost-to-complete estimate this
summer and will keep the Subcommittee apprised of our results.

AOC and it contractors have continued to make progress in a number of
areas since the Subcommittee's last CVC hearing, particularly in
installing wall stone in the auditorium, the orientation and security
lobby, and the south atrium. However, some milestones were pushed back in
April. For example, according to AOC's April 2006 schedule, the base CVC
project will have a temporary certificate of occupancy on February 23,
2007, 2 workdays later than indicated in the March 2006 schedule, and the
House and Senate expansion spaces will be substantially complete on
January 10, 2007, 15 workdays later than indicated in the March 2006
schedule. In addition, since the Subcommittee's last CVC hearing, AOC
revised the schedule logic to remove a link between penthouse mechanical
work and work associated with pretesting the East Front's fire alarm
system. AOC removed this link-pending approval by AOC's Chief Fire
Marshal- because the penthouse mechanical work is being done as an
improvement to the Capitol Building and is not within the scope of the CVC
project, although the work does affect the CVC. According to AOC's
construction management contractor, if AOC had not removed this link, it
would have had to extend the CVC's substantial completion date by 5
workdays because the penthouse mechanical work was delayed during April.3
AOC is still proposing an April 2007 opening date for the base project and
a May 2007 occupancy date for the expansion spaces-dates that it believes
will accommodate possible delays and allow start-up time for operations.
AOC expects all construction work in the CVC, East Front, and expansion
spaces to be completed by the April opening date for the base project, but

3

Although the penthouse mechanical work, which includes the replacement of
air handling units on the Capitol roof and related work, has been a
separate project, it is related to the CVC because it will serve the East
Front space that visitors will travel through to get from the CVC to the
Capitol Building. AOC's removal of the linkage will require the Chief Fire
Marshal's approval because certain elements of the East Front's fire
protection system are not expected to be ready for testing until after the
testing of the CVC's fire protection system begins.

Page 3 GAO-06-803T

Our Analysis Indicates Later Opening Dates Than AOC Is Proposing

the CVC's occupancy at any one time will be temporarily limited to 3,500,
compared with about 4,200, the normal anticipated occupancy level.4 The
delays that have occurred since the Subcommittee's March 15 CVC hearing,
coupled with the challenges, risks, and uncertainties that continue to
face the project, have heightened our concerns about AOC's ability to open
the CVC to the public in April 2007. Consequently, as we indicated during
our April 27 testimony, we plan to reassess the project's schedule again
this summer.

We continue to believe, as we testified in April, that the CVC is not
likely to be ready for opening with a temporary certificate of occupancy
before May 2007, about a month later than AOC is proposing. Our projected
opening date is somewhat later than AOC's because (1) delays in completing
interior stonework have delayed follow-on work for the base project and
East Front, (2) delays have been continuing in other critical work, such
as the utility tunnel, the fire protection system, and certain work in the
expansion spaces; and (3) CVC team managers and members and AOC's Chief
Fire Marshal believe that certain other work, such as finish work and
acceptance testing of the CVC's fire protection system, will take more
time than is scheduled to complete. Our projection also assumes that AOC
will be able to address the challenges it faces and takes into account the
time AOC believes is necessary to prepare for operations after
construction work is completed. However, the delays in March and April
raise concerns about AOC's ability to fully overcome these challenges.
Similarly, we continue to believe that the House and Senate expansion
spaces are more likely to be ready in mid-August or early September 2007
than in April or May 2007, as AOC is proposing. We consider the later time
frames for the expansion spaces more likely for three reasons. First, AOC
has scheduled the acceptance testing of the expansion spaces after the
acceptance testing of the base project and, according to our analysis, the
base project's testing will take longer than scheduled. Second, AOC's
Chief Fire Marshal believes the acceptance testing of the expansion spaces
will take longer than scheduled. Third,

4

This temporary limit will be necessary because the "horizontal exits," or
passages, through the expansion spaces, which the life safety code
requires for exiting the base CVC project, will not be available until
later. These horizontal exits cannot be used until the fire alarm system
in the expansion spaces has been fully tested and accepted-work that is
not slated to be completed until after the base CVC is scheduled to open.
Some additional work will likely be required to provide temporary
emergency exit routes from the CVC, but the CVC team does not believe that
this work or its costs should be substantial.

Construction Work Is Progressing

Indicators Raise Questions about Proposed Opening Dates

several activities important to the on-time completion of expansion space
work slipped in March and April; and at this time, the sequence 2
subcontractor responsible for this work believes that additional slippages
in some of these activities are likely or possible. However, AOC has begun
to address the problems affecting the progress of the expansion spaces and
plans to reassess this situation as the construction work proceeds. The
expansion spaces could be ready sooner than late summer 2007 if AOC
succeeds in addressing the problems and starts acceptance testing sooner
or opens the expansion spaces in phases-possibilities that AOC is
continuing to explore.

According to AOC's construction management contractor, work on the project
has advanced, in terms of both the dollar value of the work in place and
individual project elements. In dollar terms, the overall CVC project was
about 81 percent complete and the sequence 2 work was about 70 percent
complete as of April 30-up from about 79 percent and 67 percent,
respectively, as of March 31. Additionally, wall stone installation
progressed substantially in the orientation and security lobby and in the
south atrium and auditorium and continued in other areas, such as the
great hall and the East Front's basement level. AOC's construction
management contractor reported additional progress in the CVC's interior,
including drywall installation in the great hall, the utility and House
connector tunnels, and the House and Senate expansion spaces. AOC's
construction management contractor also reported progress in the
installation of stone pavers on the plaza over the auditorium. Finally,
according to the construction management contractor, the CVC's electrical
work continues to be ahead of schedule.

Despite the progress in these areas, problems and delays occurred in other
areas, and several indicators of construction progress that we have been
tracking for the Subcommittee continue to indicate that construction work
is likely to be completed later than AOC currently anticipates. An update
on these indicators follows.

Sequence 2 contractor continues to miss milestones, and completion dates
are extended. Starting with the Subcommittee's June 2005 CVC hearing, at
the Subcommittee's request, we and AOC have been selecting and tracking
sequence 2 milestones to help the Subcommittee monitor construction
progress. These milestones include activities that are either on the
project's critical path or that we and AOC believe are critical to the
project's timely completion. As figure 1 shows, the sequence 2 contractor
has generally missed these milestones. For today's hearing, nine of these
milestones were due to be completed, according to the project's January

Page 5 GAO-06-803T

2006 schedule. One was completed ahead of schedule; one was late; and none
of the remaining seven had been completed as of May 22. (See app. I.)
AOC's construction management contractor said that the sequence 2
contractor missed the milestones for reasons such as a need to do remedial
or preparatory work in the East Front and the upper orientation and
security lobby before installing wall stone, utility tunnel delays, and a
lack of wall stone due to a change in the type of stone to be used.

                                      2006

2005

                                      2006

                                      2005

                                      2005

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                                      2006

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                                   FebruarMa

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Number of milestones completed on time

Number of milestones completed late

Number of milestones not completed Source: Sequence 2 contractor, AOC and
its construction management contractor, and GAO.

According to AOC's construction management contractor, the base project's
overall completion date fell another 2 workdays behind in April, from
February 21 to February 23, 2007. February 13, 2007, was the completion
date set in the project's January 2006 schedule, and that completion date
was changed to February 21, 2007, in March. The 2-workday delay in April
is the net result of delays in activities on multiple activity paths. In
addition, delays occurred on 16 of 21 critical and nearcritical paths that
AOC's construction management contractor identified as important to
meeting the base project's overall completion date.5 These delays occurred
in, but were not limited to, work on the utility tunnel, the fire
protection system, the East Front, the upper level of the orientation and
security lobby, the auditorium, the assembly room, and the orientation
theaters, and AOC's construction management contractor reported that they
ranged from 1 to 33 workdays. According to the CVC team, these project
delays occurred for a variety of reasons, such as design changes,
problematic sequence 1 work, late submissions of shop drawings, changes in
the sequence of work activities by the sequence 2 contractor, and
inaccessible work areas. Even more important than the individual delays
themselves, however, is their likely impact on the CVC team's ability to
complete construction work on schedule. So many activities have now fallen
behind schedule that even relatively short additional delays could push
back the CVC's overall completion date. According to the construction
management contractor, there are eight critical and nearcritical activity
paths in the project's April schedule that have so little slack time that
an additional delay of 1 to 30 workdays could delay the base project's
overall completion date. There were nine such paths in the project's March
schedule, according to AOC's construction management contractor.

Work on the House and Senate expansion spaces fell 15 workdays behind
schedule in March, AOC's construction management contractor reported.6
Additionally, and of even greater concern to us, are delays in a number of

5

Construction projects typically have one critical path, which is the
sequence of activities having the longest duration through the schedule.
There is no slack time associated with these activities, meaning 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. Some projects have multiple critical paths simultaneously;
in March, the CVC essentially had two concurrent critical paths-(1) East
Front mechanical and (2) East Front fire acceptance testing. According to
AOC's construction management contractor, after AOC removed the link with
the penthouse mechanical path, as discussed, the base project had one
critical path for April-the utility tunnel and air handling units being
mechanically ready -and 20 near-critical activity paths, which have little
slack time. Generally, the more critical and near-critical activities a
project has, the greater is the risk of late completion because there are
more opportunities for slight delays that can adversely affect the
project's completion.

6

According to the project's March and April schedules, the date for
completing the House and Senate expansion spaces was extended from May 2,
2007, in March to May 25, 2007, in April. The contract completion date for
this work is March 12, 2007.

Page 7 GAO-06-803T

near-critical paths, particularly those paths that will affect the CVC's
opening date. Some of the near-critical paths slipped as much as 23
workdays in April, according to the construction management contractor.
Among the activities that were delayed in April were the installation of
ceiling tile and the commissioning of certain air-handling units needed
for the CVC's opening; electrical and audio-visual related work in the
Senate lower level; plumbing work in space intended for use by the U.S.
Capitol Police; and drywall installation in the House lower and service
levels. According to the CVC team, these activities fell behind schedule
because of delays in getting design decisions (which were provided at the
end of April), problems with site conditions due to sequence 1 or 2 work,
and the need to shift crews to do other work.

In early April 2006, we told AOC we were concerned about the increasing
number of delays in expansion space activities and the potential impact of
these delays on the completion of the expansion space work. As further
cause for concern, we noted that the sequence 2 subcontractor doing the
expansion space work was expecting additional delays in some of these
activities and that, in our view, additional design or scope changes were
possible. Although AOC is not planning to open the expansion spaces until
May 2007, timely completion of the expansion space work is important
because certain expansion space work must be completed before the CVC can
be opened to the public. AOC agreed that continued delays in the expansion
space work are of concern and recognized that risks and uncertainties
associated with the work could cause the work to fall farther behind. AOC
has begun to work with the rest of the CVC team to identify and address
problems that have arisen and risks that threaten the work's on-time
completion.

Value of completed work indicates completion later than scheduled. Another
indicator of construction progress that we and AOC's construction
management contractor have been tracking is the value of the completed
construction work billed to the government each month. Both we and the
construction management contractor believe that the sequence 2
contractor's monthly billings, including the bills for March and April
2006, indicate that AOC is not likely to meet its currently scheduled
completion date. While this indicator has some limitations (for example,
billings lag behind construction and the contract's total value does not
include the value of modifications that are beyond modification number
85), it is generally regarded in the construction industry as a useful
measure of how likely a project is to be completed on time. Figure 2
compares the sequence 2 contractor's billings since May 2003 with the
project's scheduled completion date and indicates that the sequence 2

Page 8 GAO-06-803T

contractor is not likely to finish construction work by December 2006, as
AOC expects, unless the value of completed work increases significantly.
We believe that a significant increase will be difficult, given the
limited number of areas that will be ready for finish work at any given
time.

                              JulyMaune 2003y 2003

                    AuSeptember 2003October 2003vember 2003

Januar

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Although bills are typically submitted for paymentafter work is completed,
it is often likely that construction work will be completed on schedule
when theactualbilling line fallsbetween the early and late lines in the
figure. With respect to the CVC, the actualbilling line hasbeen
trendingbelow, and in March 2006 went below, the late finish line, where
it remained in April 2006. Even with the lag inbillings, this trend
indicates that the amount of workbeing completed each month is not
sufficient to finish the project on schedule.

Interior stone installation is progressing, but taking longer than
expected. Overall, about 72 percent of the CVC's interior wall stone has
been installed, according to AOC's construction management contractor, and
the sequence 2 contractor installed 4,082 pieces of interior wall stone
during the last 4 weeks, exceeding its 3,817-piece production target. In
contrast, during the same period, the sequence 2 contractor installed
about 1,885 square feet of floor stone, or about 24 percent of the 7,870
square feet specified in a preliminary floor stone installation plan that
the contractor provided to AOC shortly after the February 15 CVC hearing.
In addition, 5 of the 9 schedule milestones that AOC and we have been
tracking for the Subcommittee for today's hearing are related to interior
wall stone installation, and the sequence 2 contractor did not meet any of
these 5 milestones. According to the CVC team, the sequence 2 contractor
has missed its stone installation targets for a variety of reasons,
including the need to correct problematic sequence 1 work or properly
prepare certain spaces for the installation of wall or floor stone, a
change in wall stone design, late delivery of floor stone for the exhibit
gallery, or delays in some spaces in finishing certain work, such as
ceiling work, that usually precedes floor stone installation. As we have
discussed in the Subcommittee's previous CVC hearings, delays in wall
stone installation can lead to additional delays in completing follow-on
work, such as floor stone installation and finish work. Although the CVC
team has identified unforeseen conditions and problematic sequence 1 work
as risks that could affect the pace of wall stone installation, the team's
efforts to address the risks have not fully prevented these types of
problems from recurring or adversely affecting the project's schedule.
Figures 3 and 4 show the sequence 2 contractor's progress in installing
interior wall and floor stone since January 23 and February 13, 2006,
respectively. Although the sequence 2 contractor has exceeded its
aggregate numerical target for wall stone installation since the last CVC
hearing, it did not meet the milestones for wall stone installation that
we are tracking for the Subcommittee because it had its masons doing
noncritical wall stone installation in other areas. The masons were doing
this noncritical work while remedial or preparatory work was being
performed in the East Front and atrium areas so that wall stone
installation could start or continue in those areas, according to AOC's
construction management contractor. In addition, wall stone for the
remaining work in the upper level orientation

Page 10 GAO-06-803T

lobby was not yet on site because of a change in the type of stone to be
used.

The sequence 2 contractor missed its target for floor stone installation
in the exhibit gallery because it ran out of floor stone for that area
from May 9 to May 16, just as it did during the week of April 10.
According to the sequence 2 contractor, the supplier of floor stone for
the exhibit gallery is a small company that has not been able to fabricate
the floor stone as quickly as needed. The sequence 2 contractor received
an additional shipment on May 16 and was expecting another truckload of
exhibit gallery floor stone this week. The final shipment is expected
around June

12. The sequence 2 contractor did not expect this delay to adversely
affect the overall completion of the exhibit gallery.

To finish installing floor stone in other areas of the CVC, the sequence 2
contractor said that it (1) plans to move many of the masons installing
wall stone to floor stone installation soon and (2) is preparing a new set
of targets for floor stone installation. We plan to review the
contractor's revised targets when they are completed and will track the
contractor's performance against its revised targets for the
Subcommittee's subsequent CVC hearings. Finally, AOC's construction
management contractor reports that over 60 percent of the CVC's interior
floor stone has been fabricated, and the sequence 2 contractor does not
anticipate future problems with floor stone supply.

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                                    Actual number of wall stones installed 
                         Source: AOC's construction management contractor. 

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Target for square footage of floor stones installed Actual square footage
of floor stones installed Source: AOC's construction management
contractor.

Project's Schedule Remains Vulnerable to Problems, Challenges, Risks, and
Uncertainties, despite Actions AOC Has Taken and Plans to Take  o

As we have indicated since the Subcommittee's February 15 CVC hearing, we
continue to believe that AOC will be challenged to meet even the later
opening dates we have identified, given the problems, challenges, risks,
and uncertainties facing the project. A brief update on these and AOC's
plans for addressing them follows:

Trade stacking could delay completion. As we discussed during the
Subcommittee's previous CVC hearings, trade stacking could hold up finish
work, such as drywall or ceiling installation, electrical and plumbing
work, plastering, or floor stone installation. This work could be stacked
because of delays in wall stone installation. According to AOC's
construction management contractor, the pace of wall stone installation
has not been sufficient to eliminate the risk of trade stacking and delays
in finish work. Such a situation could also increase the risk of accidents
and injuries. Hence, it remains important, as we said at previous CVC
hearings, for the CVC team to closely monitor construction to identify
potential trade stacking and promptly take steps to address it. The CVC
team has also identified trade stacking as a high risk, and in its April
progress report, AOC's construction management contractor expressed
concern about having enough workers to do ceiling work because much of the
wall stone work is to be finished at the same time, making several areas
available for ceiling work at the same time. The sequence 2 contractor has
developed plans that show when various subcontractors will be working in
each area of the CVC except the East Front, which the sequence 2
contractor does not expect to be ready for finish work for several weeks.
The sequence 2 contractor has also had its drywall and plaster
subcontractor working overtime in the great hall to expedite the work so
the scaffolding can be removed and the floor stone installation can begin.
According to the sequence 2 contractor, it intends to continue meeting
regularly with its subcontractors to review and update the area plans and
to have the area plan for the East Front done before finish work begins
there. The sequence 2 contractor pointed out that these plans add more
detail to the project's schedule and will serve as a tool for addressing
the trade-stacking issue. Although we and AOC agree that these
area-by-area plans are important and should be helpful, we are still
concerned about the potential for trade stacking because of the delays
that have already occurred and future delays that could occur in such work
as testing, balancing, and commissioning the CVC's air handling units or
making changes to the CVC's fire protection system resulting from the
Chief Fire Marshal's review of the shop drawings for the system.

        * Complex building systems remain a significant risk. The CVC will
          house complex building systems, including systems for heating, air
          conditioning, and ventilation; fire protection; and security. These
          systems not only have to perform well individually, but their
          operation also has to be integrated. If the CVC team encounters any
          significant problems with their functioning, either individually or
          together, during commissioning or acceptance testing, the project
          could be seriously delayed. During the Subcommittee's March 15 CVC
          hearing, we noted that the sequence 2 contractor planned to submit
          the shop drawings for the CVC's fire protection system for review
          by March 17. However, the contractor did not submit the drawings
          for the base project until the end of April, in part because more
          time was needed to incorporate changes, AOC's construction
          management contractor said. The drawings were given to AOC's Chief
          Fire Marshal on May 1. Delays could arise if the proposed system
          does not meet the project's design specifications or the fire
        * protection code's requirements.7 AOC's Chief Fire Marshal plans to
          complete his review of the drawings by June 1. In addition, the
          Chief Fire Marshal notes that delays could occur if the CVC team
          does not adequately pretest the system and correct any problems
          found during the pretesting. On March 23, AOC's commissioning
          contractor submitted its plan for testing the performance of the
          CVC's smoke control system, which is a critical component of the
          CVC's fire protection system and must work properly before the CVC
          can be opened to the public. This plan has not yet been approved.
          In addition, as we have previously noted, the Chief Fire Marshal's
          timely completion of the fire protection system's acceptance
          testing depends on his ability to obtain sufficient funding for a
          contractor to help perform the tests. Furthermore, the CVC team
          recently resolved outstanding issues with the U.S. Capitol Police
          on the numbers, types, and locations of security equipment to be
          installed and on the design of the CVC's fire alarm system.
          According to AOC's construction management contractor, certain
          changes to the scope of the security work and to the fire alarm
          system's design resulting from the resolution are likely to set the
          schedule back to some extent.
     o Building design and work scope continue to evolve. The CVC has
       undergone a number of design and work scope changes. Since the
       Subcommittee's April 27 CVC hearing, AOC's architectural contractor
       has issued five design changes or clarifications. As of May 19, 2006,
       this contractor reported, another 11 were in process and requests for
       3 more were awaiting AOC's approval to proceed. In addition, since the
       project began, AOC has executed more than 80 sequence 2 contract
       modifications for work that was not anticipated.8 Some of these
       changes, such as changes in the exhibit gallery and in the East Front,
       have resulted in delays. In addition, shop drawings for a number of
       project elements, such as the facility's fire protection system,
       millwork in the food service area, and certain portions of the exhibit
       gallery, have not yet been fully approved and are subject to change,
       and additional design or scope changes are likely given the project's
       experience to date. Project design

7

According to the sequence 2 subcontractor that is fitting out the House
and Senate expansion spaces, the delays in getting approved shop drawings
for the fire protection system have already postponed ceiling close ins in
the expansion spaces, and AOC believes that such further delays, along
with possible requests for design changes, pose the greatest risks to the
completion schedule for the expansion spaces.

8

These data exclude sequence 2 contract modifications for work that was
planned but not included in the sequence 2 base contract. Examples include
the fit-out of the House and Senate expansion spaces, the construction of
the utility tunnel, and the purchase and installation of food service
equipment.

Page 15 GAO-06-803T

and scope changes are typically reflected in the development of potential
change orders (PCO), many of which result in contract modifications.
Figure 5 shows the PCOs submitted for consideration for sequences 1 and 2
since September 2003. Although PCOs are not always approved, they are
often regarded as a reasonably good indicator of likely future design or
scope changes that can affect a project's cost and schedule. Even more
important, the adverse impact of scope and design changes on a project's
schedule is likely to increase as the project moves toward completion. For
example, certain changes to the fire protection system currently being
discussed are likely, if made, to adversely affect the project's schedule,
according to AOC.

Figure 5: Cumulative Number of Potential Change Orders Submitted for CVC
Sequences 1 and 2 between September 2003 and April 2006

Number 800

                                      700

                                      600

                                      500

                                      400

                                      300

                                      200

                                      100

                                       0

2003

2003

                                      2003

                                   2004 2004

                                      2004

                                      2004

                                      2004

                                      2004

                                   2005 2005

                                      2006

                                      2003

                                      2004

                                      2004

                                      2004

                                   2004 2004

                                      2004

                                   2005 2005

                                      2005

                                   2005 2005

                              vember 30, 20052005

                                      2005

                                      2006

                                   2005 2005

September 30,October 31,

                          December 31,vember 30,y 31,

                                     y 29,

                                 April 30,y 31,

                                     e 30,

                          September 30,October 31,31,

                                      31,

                                    gust 31,

                          December 31,vember 30,y 31,

                                     y 28,

                        September 30,October 31,y 28,31,

                                 April 30,y 31,

                                   e 30, 31,

                                   ugust 31,

                             December 31,y 31, 31,

                                   April 30,

                                   MarchJuly

                                   MarchJuly

                                     March

                                     Januar

                                   FebruarMa

                                     Januar

                                   FebruarMa

                                      Jun

                                      Jun

                                     Januar

                                    Februar

                                       Au

                                       A

No

                                       No

                                       No

  Date

                       Sequence 1 potential change orders

                       Sequence 2 potential change orders

Source: AOC's construction management contractor.

As the figure indicates, new PCOs for sequence 1 were submitted until
shortly before, and even for several months after, November 2004, when AOC
determined that the sequence 1 contract work was substantially complete.
Similarly, PCOs for sequence 2 are still being submitted, and we have seen
no indication that their submission is likely to stop soon. It therefore
appears likely to us that some of the design or scope changes indicated in
PCOs could lead to contract modifications that will affect the project's
schedule. AOC agrees that it is important to minimize the impact of
proposed design and scope changes.

Two new issues associated with the CVC's new utility tunnel are likely to
result in additional work. First, AOC has requested design work to begin
extending the CVC's sprinkler system into the new utility tunnel to
enhance worker safety. Although the design work for this change has not
yet been completed, AOC does not believe the extension will delay the
project. Second, AOC recently identified a complication that is affecting
work on the new CVC utility tunnel. Specifically, AOC found that potential
asbestos and other safety-related problems in an older tunnel that
intersects the new utility tunnel will have to be addressed before other
work needed for the utility tunnel's operation can proceed in the older
tunnel. This additional safety-related work is contributing to the
slippage in the utility tunnel's completion discussed earlier in our
testimony.

     o Opening the CVC and expansion spaces at different times is likely to
       result in a temporary cap on CVC occupancy and increase costs. As we
       reported during previous Subcommittee CVC hearings, AOC's current plan
       to open the CVC in April 2007 before the expansion spaces are
       scheduled for completion is likely to result in a temporary cap on CVC
       visitor occupancy and a need to construct temporary emergency exits
       for fire and life safety protection.9 AOC is proposing this sequential
       approach because it believes that conducting acceptance testing for
       the fire protection system for the CVC and the expansion spaces
       concurrently would delay opening the CVC to the public. AOC's proposed
       April 2007 opening date for the CVC depends on the timely completion
       of work not only on the base project but also on the expansion spaces,
       since certain expansion space work must be completed before the CVC's
       opening. Inasmuch as work on both the base project and the expansion
       spaces was delayed in March and April, we believe that it will be
       especially important to monitor the progress of construction to
       determine what additional work (and funding) may be needed to meet
       AOC's planned date for opening the CVC, including what temporary work
       may be required in the expansion spaces for the CVC to open before the
       expansion space work is complete. AOC's construction management
       contractor is monitoring this situation and said in its April 2006
       schedule report that concurrent acceptance testing of the CVC's and
       the expansion spaces' fire protection systems may be difficult because
       of the 15-workday delay in the expansion space schedule that occurred
       in April.
     o Risks from insufficient stone deliveries remain, but may be
       diminishing. According to AOC's construction management contractor,

According to AOC, the CVC's occupancy at any one time would be temporarily
limited to 3,500, compared with about 4,200, the normal anticipated
occupancy level, until acceptance testing of the fire protection system
for the expansion spaces has been completed. Although AOC anticipates the
need for some temporary work, it does not believe that the associated
costs will be substantial.

Page 18 GAO-06-803T

the sequence 2 contractor has, since the week of April 24, received 2 of
the 10 truckloads of interior wall stone it was expecting from the wall
stone fabricator. The sequence 2 contractor said that the lack of wall
stone deliveries has not adversely affected wall stone installation
recently. AOC's construction management contractor reported that as of
last week, almost all-over 99 percent-of the wall stone needed for the
core CVC itself was on site (either installed or awaiting installation);
nearly 80 percent of the wall stone needed for the atriums and about 35
percent of the wall stone needed for the East Front were on site; and none
of the wall stone for the House connector, Library of Congress, and Cannon
tunnels had been delivered. The sequence 2 contractor said that truck
scheduling issues, not fabrication delays, had caused the lapse in wall
stone deliveries over the last 4 weeks and that the delays in installing
East Front wall stone have been related more to site conditions than to
stone supply. Furthermore, the sequence 2 contractor said that given the
East Front wall stone supply on site, the shipments expected, and the pace
of installation, it does not foresee any further delays in the CVC work
due to a lack of wall stone. The sequence 2 contractor received two wall
stone truckloads on May 22 and expects to receive all of the remaining
wall stone needed for the base project by June 30, 2006. According to AOC
and its construction management contractor, although the supply of
interior wall stone was insufficient in late 2005 and early 2006, it is
adequate for the CVC at this time, given the amount of space available for
wall stone installation and the quantity of stone on hand-about 4,500
pieces as of May 19-and expected. Also, although none of the wall stone
for the House and Senate expansion spaces was on site yet, the
subcontractor responsible for this work is not anticipating delivery
problems at this time. On the other hand, AOC's construction management
contractor reported that no floor stone was installed in the exhibit
gallery during the week of April 10 or between May 9 and May17 because the
installers ran out of floor stone for that area. As indicated earlier in
our testimony, the sequence 2 contractor received a shipment of floor
stone for the exhibit gallery on May 16 and expects another shipment this
week and the final shipment by mid-June.

Finally, as we have said in previous discussions with AOC, its
construction management contractor, and the Subcommittee, it will be
important for AOC to have adequate analysis and documentation of the
reasons and responsibilities for delays.10 On April 11, 2006, AOC executed
a contract

See for example: GAO, Capitol Visitor Center: Effective Schedule
Management and Updated Cost Information Are Important, GAO-05-811T
(Washington, D.C.: June 14, 2005).

Page 19 GAO-06-803T

                       Estimated Project Cost and Funding

modification authorizing its construction management contractor to have
one of its managers who has not been involved in the CVC project assess
the adequacy of this type of information. The manager expects to complete
his work by the end of this week.

As we testified during the Subcommittee's last three CVC hearings, we
estimate that the total cost to complete the entire CVC project will be
about $556 million without an allowance for risks and uncertainties and
could be as much as about $584 million with such an allowance. To date,
about $530 million has been provided for CVC construction. This amount
includes about $3.6 million that was made available for either CVC
construction or operations and has been approved for CVC construction by
the House and Senate Committees on Appropriations.11 To obtain the
additional funding that it expected to need to complete the project's
construction, AOC, in December 2005, requested $20.6 million as part of
its budget request for fiscal year 2007. This request was based, in part,
on discussions with us and took into account our November 16, 2005,
estimate of the cost to complete the project's construction without an
allowance for risks and uncertainties and funding from existing
appropriations. Our subsequent work-completed in preparation for the
Subcommittee's February 15 and March 15 CVC hearings-indicated that AOC
would need about $5 million more, or about $25.6 million in additional CVC
construction funds, to complete construction without an allowance for
risks and uncertainties. AOC plans to request the additional $5 million as
a supplement to its fiscal year 2007 budget for CVC construction. This
would bring its total request for fiscal year 2007 CVC construction funds
to $25.6 million. In addition, AOC has indicated that it plans to use
about $950,000 of the fiscal year 2007 general administration
appropriations it has requested for contractual support for its Fire
Marshal Division.

11

Public Law 108-447, enacted on December 8, 2004, provided that up to $10.6
million could be transferred from AOC's Capitol Building appropriation
account for the use of the CVC project. The use of the amount transferred
is subject to the approval of the House and Senate Committees on
Appropriations. In June 2005, AOC received approval to use about $2.8
million (including about $1.6 million for CVC construction) of this $10.6
million, leaving a balance of about $7.7 million that could be used in the
future after a rescission amounting to $84,800. AOC recently received
approval to use about an additional $2 million of these funds for CVC
construction, including, for example, the fabrication and installation of
wayfinding signage and the fit-out of the gift shops, and about $2.3
million for CVC operations. Thus, about $3.4 million of the $10.6 million
remains available for approval for use for CVC construction or operations.

Page 20 GAO-06-803T

As we stated in our March 15 and April 27 testimonies, AOC believes that
it may be able to reduce the amount of funds it will need in fiscal year
2007 for contractual support in testing the CVC's fire protection system
and plans to explore ways to do so. AOC's Chief Fire Marshal received the
shop drawings for the CVC's fire protection system on May 1 and believes
that his office will complete its review by June 1. His office then plans
to determine how much contractual support it will need to test the system
and to explore cost savings possibilities. We plan to monitor these costs
and report on them to the Subcommittee as soon as AOC has a firmer
estimate. In addition, AOC is likely to incur additional costs from recent
scope and design changes related to the CVC's security and fire protection
systems and from problems associated with the utility tunnel. Sufficient
contingency funding may be available for these items within our $556
million estimate of the cost to complete the project. We plan to reassess
our cost-to-complete estimate this summer and will keep the Subcommittee
apprised of our results.

Mr. Chairman, this completes our prepared statement. We would be pleased
to answer any questions that you or Members of the Subcommittee may have.

Contacts and Acknowledgments

For further information about this testimony, please contact Bernard
Ungar at (202) 512-4232 or Terrell Dorn at (202) 512-6923. Other key
 contributors to this testimony include Shirley Abel, John
Craig, Maria Edelstein, Elizabeth Eisenstadt, Jeanette Franzel, Jackie
Hamilton, Bradley James, Joshua Ormond, and Scott Riback.

Appendix I: Capitol Visitor Center Critical Construction Milestones April 28,
2006-May 24, 2006

                                                         Scheduled Actual
Activity                 Location                    completion completion
Plaster Ceiling          East Front Basement            5/01/06 
Wall Stone Area 3        East Front Ground              5/01/06 
Wall Stone Area 1        Atrium South Lower Level       5/01/06 
Controls Pt. to Pt.      AHU-01                         5/05/06 
Check                                                           
OH Fire Protection Rough Exhibit Gallery                5/09/06   3/21/06a
In and Hydrostatic Test                              
Wall Stone Area 5        Orientation Lobby Upper          5/12/06  5/22/06 
                            Level                                    
Wall Stone Area 2        Atrium South Lower Level         5/15/06 
Plaster Ceiling          West Lobby Assembly              5/22/06 
Wall Stone Area 1        East Front Principal             5/22/06 

Source: AOC's January 2006 CVC sequence 2 construction schedule for the
scheduled completion datesand AOC and its construction management
contractor for the actual completion datesas of May 22, 2006.

a

While noting that the sequence 2 contractor had completed this work ahead
of schedule, AOC'sconstruction management contractor said that the
sequence 2 contractor would have to perform the hydrostatic
testagainbecause of an oversightby the exhibit contractor that resulted in
its design being too tall and interfering with the fire protection system.

  (543170)

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