Capitol Visitor Center: Update on Status of Project's Schedule	 
and Cost As of June 28, 2006 (28-JUN-06, GAO-06-827T).		 
                                                                 
We are pleased to be here today to assist Congressin 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
schedule since Congress's May 24, 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. 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.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-06-827T					        
    ACCNO:   A56066						        
  TITLE:     Capitol Visitor Center: Update on Status of Project's    
Schedule and Cost As of June 28, 2006				 
     DATE:   06/28/2006 
  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-06-827T

     

     * AOC Has Extended the Project's Proposed Completion and Openi
          * AOC Has Postponed the Proposed Completion and Opening Dates
          * Construction Work Is Progressing
          * Further Delays Have Occurred as Risks Have Materialized
          * Indicators of Construction Progress Support Extension of Pro
          * Project Schedule Remains Vulnerable to Challenges, Risks, an
     * Estimated Project Cost and Funding
     * Contacts and Acknowledgments
     * Appendix: Capitol Visitor Center Critical Construction Mile
          * Order by Mail or Phone

Testimony

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

United States Government Accountability Office

GAO

For Release on Delivery Expected at 10:30 a.m. EDT

Wednesday, June 28, 2006

CAPITOL VISITOR CENTER

Update on Status of Project's Schedule and Cost As of June 28, 2006

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

GAO-06-827T

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 schedule since the
Subcommittee's May 24, 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 May 24 CVC hearing, AOC has extended the
project's scheduled completion and opening dates. The CVC team has
continued to move the project's construction forward, but primarily
because of significant problems associated with the CVC's fire protection
system, gift shops, and utility tunnel, AOC has extended the scheduled
completion dates for the base CVC project and the House and Senate
expansion spaces by approximately 2-1/2 months, from February 23, 2007, to
May 7, 2007, for the CVC, and from May 25, 2007, to August 8, 2007, for
the expansion spaces. Furthermore, to allow time for possible additional
delays and preparation for operations, AOC is now proposing to open the
CVC in July 2007 with a temporary certificate of occupancy and the
expansion spaces in August 2007, at which point a final certificate of
occupancy will be issued for the CVC. Previously, AOC was planning to open
the CVC in April 2007 and the expansion spaces in May 2007. We are
reassessing the project schedule, as we stated at the Subcommittee's last
CVC hearing, and expect to finish our reassessment by mid-September.
Pending our reassessment, AOC's new July and August 2007 time frames
appear to be reasonable tentative targets for opening the CVC and House
and Senate expansion spaces. However, we are not as confident as we would
like to be about whether the CVC team will be able to meet the challenges,
risks, and uncertainties that continue to face the project, given the
difficulties the team has historically had in meeting its targets and
milestones. Thus, we expect to have greater confidence in the target
opening dates after we complete our schedule reassessment.

1GAO, Capitol Visitor Center: Update on Status of Project's Schedule and
Cost as of May 24, 2006, GA0-06-803T (Washington, D.C.: May 24, 2006).

           o  During the past month, work on the project has progressed in a
           number of areas. For example, the CVC team has finished restoring
           and has opened the portion of East Capitol Street that runs above
           the CVC's utility tunnel and has finished installing the veneer
           plaster portion of the ceiling in the great hall and piping for
           the sprinkler system throughout the CVC. In addition, critical
           interior wall and floor stone installation has continued, together
           with other interior and exterior construction work, and the
           sequence 2 contractor has continued work on its area-by-area plans
           to prevent trade stacking2 during finish work. About 96 percent of
           the interior wall stone for the CVC itself (excluding the atrium
           areas, the East Front, and the tunnels) is now installed.
           o  Delays associated with the CVC's fire protection system, gift
           shops, and utility tunnel primarily led the CVC team to add about
           50 workdays to the project schedule. During the last 5 weeks; the
           sequence 2 contractor also fell short of its installation target
           for interior wall stone; the pace of floor stone installation
           remained far below the targeted pace; and several other base
           project and expansion space activities-including East Front
           work-fell further behind schedule. Indicators of construction
           progress that we have been tracking for the Subcommittee also
           support AOC's extensions of the proposed completion and opening
           dates. For example, the sequence 2 contractor met only 2 of the 14
           milestones we have been tracking for this hearing, and this
           contractor's monthly billings indicate that construction work is
           more likely to be completed closer to AOC's new target dates than
           its previous ones.
           o  AOC's new schedule provides additional time to complete work,
           and we believe, on the basis of the information available to us at
           this time, that AOC's July and August 2007 proposed opening dates
           tentatively appear reasonable; however, we have not yet finished
           reassessing AOC's schedule to better determine whether this
           additional time will be sufficient in view of the challenges,
           risks, and uncertainties that the project continues to face. For
           example, the CVC fire protection system has not yet been fully
           approved; critical building systems still have to be commissioned
           and tested; and certain design or work scope elements are still
           incomplete or are being clarified, refined, or changed, even
           though the project's overall design is essentially complete. In
           addition, the delays in completing the utility tunnel have created
           an additional risk: if the sequence 2 contractor has difficulty
           achieving and maintaining required temperature and humidity
           levels, the project's ceiling and finish work could be further
           delayed. More information should be available on this and other
           schedule-related issues by the time we finish reassessing the
           project schedule in mid-September, following the completion of
           AOC's reassessment, which is expected by July 31.

           Before the schedule changed this month, we were estimating that
           the total cost to complete the entire CVC project would be about
           $556 million without an allowance for risks and uncertainties and
           $584 million with such an allowance-an amount that we continue to
           believe should be sufficient. To date, about $530 million has been
           provided for CVC construction. The $26 million in remaining funds
           needed is consistent with our last estimate of the amount of
           additional funds AOC would need to complete the entire CVC
           project. In addition, as we have previously indicated, AOC
           preliminarily expects to need about $950,000 in fiscal year 2007
           AOC general administration appropriations to pay for the
           contractual support needed to complete acceptance testing of the
           facility's fire protection system in time to meet the project
           schedule. AOC plans to determine if it can reduce the amount
           needed for this contractual support; we will keep the Subcommittee
           apprised of this situation. Furthermore, AOC is likely to incur
           additional costs because of the problems associated with the CVC's
           fire protection system, gift shops, utility tunnel, and other
           issues. In light of these problems, we do not know whether the
           $556 million estimate, which does not include an allowance for
           risks and uncertainties, will cover the costs to complete the
           project, but we currently believe that our $584 million estimate,
           which does include such an allowance, should be sufficient. We
           plan to reassess our cost-to-complete estimate this summer and
           provide our results to the Subcommittee by mid-September.

           AOC Has Extended the Projectâs Proposed Completion and Opening Dates
			  
			  AOC has extended the CVC project's proposed completion and opening
           dates because, although the CVC team has continued to make
           progress in a number of areas since the Subcommittee's last CVC
           hearing, significant delays have also occurred, especially in work
           on the CVC's fire protection system, gift shops, and utility
           tunnel. Indicators of progress that we have been monitoring for
           the Subcommittee support AOC's extension of the proposed dates,
           and remaining challenges, risks, and uncertainties could further
           affect the project's progress. AOC's proposed time frames
           tentatively appear reasonable, but further reassessment of the
           project schedule is needed to gain greater confidence in the
           revised dates.

           AOC Has Postponed the Proposed Completion and Opening Dates 
			  about 2-1/2 Months
			  
			  According to the May 2006 project schedule, the base CVC project
           will be completed in May 2007 and the House and Senate expansion
           spaces will be completed in August 2007, about 2-1/2 months later
           than indicated in the April 2006 schedule. Moreover, according to
           the May schedule, the base project will be opened in July 2007 and
           the expansion spaces will be opened in August 2007-time frames
           that AOC believes will accommodate possible additional delays and
           allow start-up time for operations.

           According to the May 2006 schedule, most of the physical
           construction work in the CVC, the East Front, and the expansion
           spaces will be completed by December 31, 2006; however, some work
           in the exhibit gallery, the gift shops, and the East Front extends
           into 2007-as far as March 2007 for the gift shops and certain East
           Front work. Neither the CVC nor the expansion spaces can be opened
           until the Chief Fire Marshal has completed acceptance testing for
           the fire protection and life safety systems, now scheduled for May
           2007 for the CVC and August 2007 for the expansion spaces. The
           Chief Fire Marshal plans to issue a temporary certificate of
           occupancy for the CVC's base building when he completes his
           testing of it and a final certificate after he completes his
           testing of the expansion spaces and limited retesting of the CVC's
           base building. AOC believes that it may be able to shorten some of
           the time scheduled for testing the fire protection system and that
           it may be able to open segments of the expansion spaces earlier
           than August 2007. As we have discussed in previous CVC
           testimonies, AOC is continuing to explore this possibility.

           Although the CVC team has had difficulty meeting milestones and
           continues to face challenges, risks, and uncertainties, the July
           2007 opening time frame for the CVC would give the team 2 to 3
           months (depending on the specific date in July) after the May 7,
           2007, scheduled completion date to address additional delays and
           prepare for operations. Some time could also be available in
           August to address issues associated with the acceptance testing of
           the expansion spaces, which is scheduled to begin on May 8, 2007,
           after the initial acceptance testing of the CVC is completed.
           Thus, AOC's July and August 2007 time frames for opening the CVC
           and expansion spaces tentatively appear reasonable at this time
           pending our reassessment of the project schedule, to be done over
           the next several weeks.

           Construction Work Is Progressing
			  
			  According to information provided by AOC and its construction
           management contractor and our observations, 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, AOC's
           construction management contractor reported that, as of May 31,
           the overall CVC project was about 82 percent complete and the
           sequence 2 work was about 71 percent complete-up from about 81
           percent and 70 percent, respectively, as of April 30. Progress on
           individual project elements includes the following:

           o  Surface work above the CVC utility tunnel was largely
           completed, leading to the opening of East Capitol Street in June,
           and work on the House connector tunnel has continued.
           o  Interior CVC work has made additional progress, according to
           AOC's construction management and sequence 2 contractors. For
           example, the sequence 2 contractor has finished installing veneer
           plaster ceilings in the great hall; structural steel framing for
           the glass floor in the exhibit gallery; piping for the heating,
           air conditioning, and ventilation system throughout the CVC and
           expansion spaces; and piping for the sprinkler system throughout
           the CVC. Furthermore, the CVC team, the U.S. Capitol Police, and
           AOC's Fire Marshal Division have also resolved issues associated
           with the CVC's security and fire protection systems that, if not
           resolved, could have impeded construction progress.
           o  Wall stone installation has progressed substantially in the
           East Front plaza level, atriums, and auditorium and continued in
           other areas, such as the food service area. As of last week, the
           sequence 2 contractor had installed about 96 percent of the
           interior wall stone in the CVC itself, excluding the atrium areas,
           the East Front, and the tunnels.
           o  On the East Front exterior, AOC and its construction management
           contractor reported, new waterproofing was installed under the
           center steps, a skylight structure was erected and glass was
           installed in the openings north and south of the great hall, and
           materials and equipment were delivered for the penthouse
           mechanical work.
           o  In the House and Senate expansion spaces, progress was made in
           installing drywall, roughing in electrical systems, and performing
           work in other trade areas.

           Further Delays Have Occurred as Risks Have Materialized
			  
			  Since the Subcommittee's May 24 hearing, problems have occurred in
           a number of areas that we expressed concerns about during the
           Subcommittee's last three CVC hearings, These include problems
           associated with the base project's fire protection system and the
           House and Senate gift shops, which have had the largest impact on
           the schedule-resulting in AOC's extension of the date for the CVC
           to obtain a temporary certificate of occupancy from February 23,
           2007, as shown in the April schedule, to May 7, 2007, as shown in
           the May schedule. Problems have also delayed work on the CVC
           utility tunnel and the expansion spaces.

           To resolve issues associated with the base project's fire alarm
           system and gift shops, the CVC team added a net of 51 workdays to
           the project's May schedule, reflecting (1) additional time for
           resolving issues raised by AOC's Fire Marshal Division about shop
           drawings for the base CVC building's fire alarm system, (2)
           additional time for programming the fire alarm system, and (3) a
           change in the schedule logic involving the time for starting the
           programming. AOC's Fire Marshal Division completed its review on
           June 1 and approved most elements of the base building's fire
           alarm system, but raised a number of problems and concerns. For
           example, it found that the firefighter telephone system and manual
           pull stations proposed by the subcontractor did not meet contract
           specifications. In addition, the CVC team learned that the
           sequence 2 fire alarm system subcontractor did not plan to start
           programming the fire alarm system until all relevant issues,
           including those raised by the Fire Marshal Division about the
           CVC's fire alarm shop drawings and proposed fire alarm system
           equipment, were resolved. Because the programming had previously
           been scheduled concurrently with other activities, the team added
           time to the schedule for the programming. Work on the gift shops
           has been delayed because the estimated costs and bid price for
           their fit-out greatly exceeded the budget for this work. AOC
           planned to request approval from the House and Senate Committees
           on Appropriations to reprogram funds from CVC operations to
           construction to cover the shortfall and plans to move forward with
           the gift shops in segments by executing contract modifications
           based on the available funding until its reprogramming request is
           approved. However, AOC said that this reprogramming request did
           not include any contingency funding for the gift shops and
           therefore it anticipates having to request another reprogramming
           of funds for such contingency funding. The CVC team and the Fire
           Marshal Division established and have implemented an expedited
           process for resolving the identified problems and concerns, and
           according to the team and AOC's Chief Fire Marshal, the issues
           raised by the Fire Marshal Division about the CVC's fire alarm
           shop drawings and proposed fire alarm system equipment are being
           worked through for resolution and resubmission to the Fire Marshal
           Division. However, it is not yet clear how much time will be
           needed to address other fire protection system issues; the Fire
           Marshal Division has not yet completed its reviews of shop
           drawings for other components of the system because the design of
           the CVC's base building fire alarm system had to be approved
           first; and the gift shop design and funding issues have not been
           fully resolved. We plan to include these areas in our reassessment
           this summer.

           Delays associated with the CVC utility tunnel led the CVC team to
           extend the date for it to become operational from June 29, 2006,
           as shown in the April 2006 schedule, to August 4, 2006, as shown
           in the May 2006 schedule. These delays occurred because
           preliminary work on an old tunnel took longer than expected. The
           old tunnel, which contains piping from the Capitol Power Plant
           that is connected to piping in the CVC utility tunnel, was
           inaccessible before temporary shoring work was completed.
           According to AOC, this temporary shoring work was completed on
           June 16, and last week the CVC team began asbestos cleanup in the
           old tunnel, in the area where piping from the new tunnel is
           connected to piping in the old tunnel. After this cleanup is done,
           the CVC team is to continue work in the old tunnel necessary to
           enable steam and chilled water to flow from the Capitol Power
           Plant to the CVC. Given the history of problems associated with
           the utility tunnel, it is not clear at this time whether it will
           be operational on schedule, and additional delays could further
           adversely affect the project, as we will discuss later in our
           testimony. Several other base project activities-which we will
           discuss shortly-have also been delayed, but these delays have had
           a smaller impact.

           Delays in commissioning the air handling units and in installing
           ceiling tile in the expansion spaces during the past month will
           affect the project schedule, and some work has been resequenced,
           but the resequencing will not affect the schedule, according to
           the sequence 2 contractor. The air handling units are necessary
           for testing the fire protection system in both the CVC and the
           expansion spaces, and the ceiling tile must be installed in the
           expansion spaces for that testing. According to the fit-out
           subcontractor, the ceiling tile work was delayed because the
           subcontractor doing the work had to wait for direction on
           audio-visual rough-in work. The sequence 2 contractor resequenced
           the installation of circular staircases in the House and Senate
           atrium areas because extensive concrete chipping in one atrium,
           which was required to correct out-of-tolerance sequence 1 work,
           and scaffolding set up in the atriums to install wall stone
           precluded the sequence 2 fit-out subcontractor from gaining access
           to work areas in both atriums.

           In addition to the construction-related adjustments to the
           schedule for the expansion spaces, the 51-workday delay in the CVC
           schedule produced a corresponding 51-workday delay in the schedule
           for the expansion spaces, extending their opening from May 25,
           2007, as shown in the April schedule, to August 8, 2007, as shown
           in the May schedule. This extension will occur because, as we have
           discussed in our previous CVC testimonies, AOC plans to have most
           of the acceptance testing of the CVC's fire protection system
           completed before the acceptance testing of the expansion spaces
           begins.3 AOC believes that this sequential approach to the
           acceptance testing will allow the CVC to open with a temporary
           certificate of occupancy somewhat earlier than if the acceptance
           testing were performed concurrently. AOC is still considering
           opening the expansion spaces in sections, which means that some
           sections could possibly open earlier than August 8, 2007.

           Indicators of Construction Progress Support Extension of Project 
			  Schedule
			  
			  Besides the delays that have already occurred, several indicators
           of construction progress that we have been tracking for the
           Subcommittee suggest that the revised completion and opening dates
           in AOC's May 2006 schedule are more realistic than the previously
           scheduled dates. An update on these indicators follows:

           Sequence 2 contractor continues to miss milestones. 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 were 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, 14 of these milestones were due to be completed,
           according to the project's January 2006 schedule. One was
           completed ahead of schedule, one was completed on schedule; and
           none of the remaining 12 had been completed as of June 26. (See
           app. I.) AOC's sequence 2 contractor attributed the slippages to a
           number of factors, including the need to do remedial or
           preparatory work in the East Front and auditorium and the need to
           resolve outstanding issues and resequence work for a number of
           reasons, such as to prevent damage or to move materials stored in
           an area that was otherwise ready for the next stage of work.

           Figure 1: Sequence 2 Contractor's Progress in Meeting Selected
           Milestones as of CVC Hearing Dates

           In total, AOC's construction management contractor reported delays
           in 17 of 23 critical and near-critical paths that AOC's
           construction management contractor identified as important to
           meeting the base project's overall completion date.4 According to
           AOC's construction management contractor, delays besides those in
           the fire protection system, gift shops, and utility tunnel have
           occurred in other activity paths since the Subcommittee's last CVC
           hearing. These other delays occurred in, but were not limited to,
           the East Front, the orientation theaters, the exhibit gallery,
           certain elevator installations, the upper level assembly room, and
           the House connector and Library of Congress tunnels. According to
           the CVC team, these other delays were attributable to design
           changes, water leaks, deficient sequence 1 work, 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 fallen behind schedule that relatively short
           additional delays could push the CVC's overall completion date
           further back. The number of critical and near-critical paths
           increased from 21 in the project's April schedule to 23 in the May
           schedule.

           Value of completed work is consistent with revised schedule.
           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, April, and May 2006, indicate that AOC is more
           likely to finish closer to its currently scheduled completion
           dates than its previously scheduled completion dates. While this
           indicator has some limitations (for example, billings lag behind
           construction), 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 billings needed to complete
           construction work on schedule and indicates that the sequence 2
           contractor is unlikely to finish the project until the late spring
           or summer of 2007 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.

2Trade 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.

      AOC Has Extended the Project's Proposed Completion and Opening Dates

AOC Has Postponed the Proposed Completion and Opening Dates about 2-1/2 Months

Construction Work Is Progressing

Further Delays Have Occurred as Risks Have Materialized

Indicators of Construction Progress Support Extension of Project Schedule

3AOC is planning to have the smoke control system in the CVC and expansion
spaces tested at about the same time because certain parts of the smoke
control system in the expansion spaces must operate before the CVC can
open.

4Construction 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 practice, the CVC had what essentially amounted to two concurrent
critical paths in May-(1) acceptance testing of the fire protection system
and (2) fit-out of the gift shops. (AOC's construction management
contractor reported the fit-out of the gift shops as a near-critical
activity because of a change in schedule logic it had made, but because
this delay would otherwise have had the same impact on the project's
completion as the acceptance testing delay, we regard it as a second
critical path.) 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.

Figure 2: Total Billings by the Sequence 2 Contractor for the Entire CVC
Project Compared with the Billings Needed to Finish Construction Work on
Schedule

Notes:

The early and late lines on this figure reflect the cumulative billings
that would be required to complete the project through contract
modification number 102 ($224.8 million total contact value) by the early
and late finish dates shown in the sequence 2 contractor's schedule based
on the September 2006 contractual completion date.

The actual line reflects the sequence 2 contractor's actual monthly
billings.

Although bills are typically submitted for payment after work is
completed, it is often likely that construction work will be completed on
schedule when the actual billing line falls between the early and late
lines in the figure. With respect to the CVC, the actual billing line has
been trending below, and in March 2006 went below, the late finish line,
where it remained in April and May 2006. Even with the lag in billings,
this trend indicates that the amount of work being completed each month is
not sufficient to finish the project on the project's previous schedule.

Interior stone installation is taking longer than expected. Overall, about
80 percent of the CVC's interior wall stone has been installed (includes
the CVC, East Front, atrium areas, and tunnels), according to AOC's
construction management contractor, and the sequence 2 contractor
installed 4,795 pieces of interior wall stone during the last 5 weeks,
about 30 percent short of its 6,959-piece production target. During the
same period, the sequence 2 contractor installed about 2,825 square feet
of floor stone, or about 20 percent of the 15,070 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, 4 of the 14
schedule milestones that we and AOC have been tracking for the
Subcommittee for today's hearing are related to interior wall stone
installation, and the sequence 2 contractor met 1 of these 4 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 deliveries of floor stone for the exhibit gallery, and delays in some
spaces in finishing certain work, such as ceiling work, that usually
precedes floor stone installation. The sequence 2 contractor did not meet
the milestones for wall stone installation that we are tracking for the
Subcommittee because certain remedial work was necessary and several of
its masons were 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, AOC's construction
management contractor reported that wall stone for remaining work in the
upper level of the orientation lobby, which had been awaiting delivery
because of a change in the type of stone to be used, has been delivered.

The sequence 2 contractor has not yet finished installing floor stone in
the exhibit gallery, largely because it ran out of floor stone for that
area during certain periods in April and May. According to the sequence 2
contractor, the supplier of floor stone for the exhibit gallery is a small
company that was not able to fabricate the floor stone as quickly as
needed. AOC's construction management contractor said that the sequence 2
contractor has now received all of the exhibit gallery floor stone. The
sequence 2 contractor does not expect previous installation delays 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) has drafted a new set
of targets for floor stone installation, which the CVC team has been
reviewing. We plan to review the contractor's revised targets when they
are provided to us and will track the contractor's performance against its
revised targets for the Subcommittee's subsequent CVC hearings. Finally,
according to AOC's construction management contractor, 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.

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.

Figure 3: Progress of CVC Interior Wall Stone Installation Compared with
Targets Set by the Sequence 2 Contractor

Figure 4: Progress of CVC Interior Floor Stone Installation Compared with
Preliminary Targets Set by the Sequence 2 Contractor

Project Schedule Remains Vulnerable to Challenges, Risks, and Uncertainties

As we have indicated during the Subcommittee's previous CVC hearings, we
believe that the CVC team continues to face challenges, risks, and
uncertainties in completing the project. At this time, the 2 to 3 months
that AOC has added to the proposed opening dates for the CVC and the
expansion spaces seem sufficient to address these challenges, risks, and
uncertainties. Nevertheless, given the project's history of
delays-including those that have occurred since the Subcommittee's last
hearing-together with information previously provided to us by CVC team
managers and members about the lack of sufficient time in the schedule for
certain activities, we are not as confident as we would like to be about
whether the CVC team will be able to address all of the challenges, risks,
and uncertainties and finish all construction activities by the currently
scheduled dates. Accordingly, we plan to reassess the project schedule
this summer and report our results to the Subcommittee by mid-September
2006. A brief update follows on the challenges, risks, and uncertainties
the CVC team continues to face and the team's plans for addressing them:

           o  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. Trade stacking 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 May 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. 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.
           In mid-June, the sequence 2 contractor reported that its
           area-by-area plans had prevented trade stacking to date. Although
           we and AOC agree that these area-by-area plans are important and
           should be helpful in reducing the risk of trade stacking, we are
           still concerned about the potential for future trade stacking
           because of the delays that have already occurred and future delays
           that could occur.
           o  Complex building systems remain a significant risk. The CVC
           will house complex building systems, including systems for
           heating, ventilation, and air conditioning; 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 separately 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 shop drawings for the CVC's base building fire alarm
           system were given to AOC's Chief Fire Marshal on May 1, and he and
           his staff completed their review on June 1. As we previously
           mentioned, AOC's Fire Marshal Division approved most of the system
           and is now resolving the open issues with the CVC team. Some
           additional construction work may be required to address some of
           the Fire Marshal Division's comments, but AOC does not expect this
           work to further delay the project's completion. The Fire Marshal
           Division finished reviewing the shop drawings for the expansion
           space fire alarm system by June 26. The Fire Marshal Division has
           not been able to finish reviewing the shop drawings it has
           received for components of the fire protection system outside the
           base project because the CVC's base building fire alarm system had
           to be reviewed first. In addition, the Division did not yet have
           complete information on when it would receive additional shop
           drawings. Delays could arise if it takes longer than expected for
           the team to get approved shop drawings or if the proposed system
           does not meet the project's design specifications or the fire
           protection code's requirements.5 In addition, the Chief Fire
           Marshal noted 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 had not yet been submitted to or
           approved by the Fire Marshal Division. 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.
           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 May 24 CVC hearing, AOC's architectural contractor
           has issued three design changes or clarifications. As of June 22,
           2006, this contractor reported, another 14 were in process. In
           addition, since the project began, AOC has executed more than 80
           sequence 2 contract modifications for work that was not
           anticipated.6 Some of these changes, such as changes in the
           exhibit gallery and in the East Front, have resulted in delays.
           Furthermore, shop drawings for a number of project elements, such
           as certain components of the facility's fire protection system
           discussed above, and the design for the House and Senate gift
           shops have not yet been fully approved and are subject to change.
           Further design or scope changes in various project elements are
           also likely, given the project's experience to date. Project
           design 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 schedule is likely to increase as the project moves toward
           completion. For example, changes in the design of the gift shops
           are likely to affect the project schedule more adversely now than
           if the changes had been made several months ago.

5According 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 further such delays, along
with possible requests for design changes, pose the greatest risks to the
completion schedule for the expansion spaces.

6These 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.

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

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
schedule. AOC agrees that it is important to minimize the impact of
proposed design and scope changes.

Three additional issues associated with the CVC's new utility tunnel have
resulted, or are likely to result, in additional work or slippages. First,
AOC recently said that it plans to add an exit to the new CVC utility
tunnel to enhance worker safety. However, the construction work to add
this exit may not start until after the CVC is open, according to AOC.
Second, AOC recently identified complications that are 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 new utility tunnel's operation can proceed in the
older tunnel. This additional safety-related work has contributed to the
delay in the utility tunnel's completion discussed earlier in our
testimony; had not been completed as of June 26; and could lead to
additional delays in getting the utility tunnel operational. (AOC expects
this work to be done by July 1, 2006.) Third, the delay in starting up the
utility tunnel's operations has necessitated the use of temporary humidity
control equipment for the orientation theaters to avoid damage to finish
work and ceiling tile. In addition, further utility tunnel delays could
require additional equipment in other areas, subject certain work to risk
of damage, or delay finish or ceiling work in areas not suitable for the
use of temporary humidity and temperature control equipment. For example,
the CVC team installed ceiling tile in portions of the great hall to take
advantage of the scaffolding in place, even though neither the temperature
nor the humidity were controlled in that area. According to the CVC team,
the installed tile could be damaged if the temperature or humidity is not
within the specified levels.

           o  Opening the CVC and expansion spaces at different times is
           likely to result in a temporary cap on CVC occupancy and could
           increase costs. AOC's current plan to open the CVC in July 2007
           before the expansion spaces are scheduled for completion is likely
           to result in a temporary cap on CVC visitor occupancy and may
           necessitate the construction of temporary emergency exits for fire
           and life safety protection.7 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 July 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. Because work on both the base
           project and the expansion spaces has been delayed during the last
           3 months, 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 opening to occur before the expansion
           space work is completed.

           o  Risks from insufficient stone deliveries remain, but may be
           diminishing. According to AOC's construction management
           contractor, the sequence 2 contractor has, since the week of May
           22, received four truckloads of interior wall stone from the wall
           stone fabricator. The sequence 2 subcontractor installing the
           interior wall stone recently asked its supplier to hold fabricated
           wall stone at its facility pending a request for delivery because
           of a shortage of storage space on the CVC site. As of June16, the
           supplier had two truckloads on hold, according to AOC's
           construction management contractor. The sequence 2 contractor said
           that it does not foresee any further delays in the CVC work due to
           a lack of wall stone. Moreover, 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. 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.
           According to AOC's construction management contractor, the
           remaining exhibit gallery floor stone has now been delivered, and
           the installation has been continuing. The CVC team does not expect
           delays in floor stone shipments to affect the pace of future floor
           stone installation.

           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.8 On April 11,
           2006, AOC executed a contract 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 submitted his report to AOC
           in early June. He reported generally positive findings but also
           identified desired improvements. He made several recommendations
           to AOC, which AOC has generally agreed with and plans to implement
           consistent with the availability of resources. As we have
           previously stated, we believe it is important for AOC to complete
           its analysis of delays expeditiously given the current September
           15, 2006, sequence 2 contract completion date and the impact this
           analysis is likely to have on delay-related costs.

           Estimated Project Cost and Funding
			  
			  As we testified during the Subcommittee's last three CVC hearings,
           we have estimated that the total cost to complete the entire CVC
           project would 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.9 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 total additional CVC
           construction funds, to complete construction without an allowance
           for risks and uncertainties. This would bring AOC's 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 to provide contractual support for its Fire Marshal
           Division.

           As we stated in our last three CVC testimonies, AOC believes that
           it may be able to reduce the amount of funds it will need in
           fiscal year 2007 to provide contractual support for testing the
           CVC's fire protection system and is exploring ways to do so. We
           plan to monitor this situation and report to the Subcommittee as
           soon as AOC has a firmer estimate. In addition, events occurring
           since the Subcommittee's May 24 CVC hearing have raised questions
           about the sufficiency of the $556 million cost-to-complete
           estimate, given that it does not provide an allowance for risks
           and uncertainties. For example, AOC's extension of the project
           schedule by more than 2 months is likely to result in increased
           costs; AOC recently learned that a redesign of the gift shop
           fit-out did not reduce the cost estimate or bid price to the
           budgeted amount; and the cost estimates for wayfinding signage
           have exceeded the budgeted amount. Nevertheless, at this time, we
           have no specific indication that the total cost to complete the
           project will exceed our $584 million estimate, which does include
           an allowance for risks and uncertainties. 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.

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7According 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.

8See for example: GAO, Capitol Visitor Center: Effective Schedule
Management and Updated Cost Information Are Important, GAO-05-811T
(Washington, D.C.: June 14, 2005).

9Public 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.

Appendix: Capitol Visitor Center Critical Construction Milestones, May 25,
2006-June 28, 2006

                                            Scheduled        Actual           
Activity          Location               completion       completion       
Projection        Orientation Theaters   5/30/06          4/22/06          
Screens                                                   
Floor Stone       East Front Basement    5/30/06          
Ceiling Fabric    Congressional          6/06/06          
                     Auditorium                              
Wall Stone Area 2 East Front Principal   6/06/06          
Wood Doors and    Food Service           6/13/06          
Frames                                                    
Plaster Walls     Orientation Lobby      6/15/06          
Wall Stone Area 6 Congressional          6/15/06          
                     Auditorium                              
Finish Paint      West Lobby Assembly    6/20/06          
Finish Paint      East Front Basement    6/20/06          
Wall Stone Area 2 Atria North Lower      6/20/06          6/20/06          
                     Level                                   
Flooring          East Front Basement    6/23/06          
Stone Stairs      East Front Principal   6/27/06          
Ceiling Stone     East Front Principal   6/27/06          
Wall Stone Area 1 East Front Gallery     6/27/06          

Source: AOC's January 2006 CVC sequence 2 construction schedule
for the scheduled completion dates and AOC and its construction
management contractor for the actual completion dates as of June 26.
(545044)

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