Capitol Visitor Center: Update on Status of Project's Schedule
and Cost As of August 2, 2006 (02-AUG-06, GAO-06-828T).
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 Congress's June 28, 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 Capitol Visitor Center
(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, the General Services
Administration, and the Office of Compliance. 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-06-828T
ACCNO: A57941
TITLE: Capitol Visitor Center: Update on Status of Project's
Schedule and Cost As of August 2, 2006
DATE: 08/02/2006
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
Risk management
Schedule slippages
Cost estimates
Capitol Visitor Center Project
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GAO-06-828T
* Proposed Completion and Opening Dates Have Held Steady and C
* AOC's Proposed Completion and Opening Dates Have Remained ab
* Construction Work Is Progressing
* Risks Associated with the Fire Protection System Pose the Gr
* Other Risks Have Materialized, Delaying Activities Important
* Indicators of Construction Progress Show Mixed Results
* Project's Schedule Remains Vulnerable to Challenges, Risks,
* Estimated Project Cost and Funding
* Contacts and Acknowledgments
* Appendix I: Capitol Visitor Center Critical Construction Mil
* 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, August 2, 2006
CAPITOL VISITOR CENTER
Update on Status of Project's Schedule and Cost As of August 2, 2006
Statement of Terrell Dorn, Director Bernard L. Ungar, Director
Physical Infrastructure Issues
GAO-06-828T
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 June 28, 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, the
General Services Administration, and the Office of Compliance. 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 June 28 CVC hearing, the CVC team has continued
to move the project's construction forward, and the project's overall
targeted completion dates have remained about the same as we reported at
that hearing. However, risks have materialized, especially in connection
with the CVC's fire protection system, and a number of important
activities have been delayed, lessening our confidence in the likelihood
of the CVC' team's meeting the targeted completion dates. We will reassess
the project's schedule and monitor the team's progress in achieving
effective management control over the CVC's fire protection system work
during the next several weeks and report our results to the Subcommittee
in September.
1GAO, Capitol Visitor Center: Update on Status of Project's Schedule and
Cost as of June 28, 2006, GA0-06-827T (Washington, D.C.: June 28, 2006).
o During the past month, work on the project has progressed in a
number of areas. For example, chilled water began flowing from the
Capitol Power Plant to the CVC this week, and the sequence 2
contractor expects to have dehumidified air in the exhibit gallery
by around mid-August. In addition, critical interior wall and
floor stone installation has continued, together with other
interior and exterior construction work. Almost all of the
interior wall stone for the CVC itself (excluding the atrium
areas, the East Front, and the tunnels) is now installed.
o A number of problems have developed in connection with the
CVC's fire protection system, which we now consider to be the
single greatest source of risk to meeting the project's scheduled
completion dates. Although the overall schedule for completing
this system has not slipped since the Subcommittee's last CVC
hearing, some activities have been delayed, and the team continues
to encounter new issues or "surprises" with the fire protection
system. The CVC's fire protection system has not yet been fully
approved, and a significant problem with the installation of one
of the system's components was recently identified. Although this
problem has been resolved, communication and management issues
surfaced that could further affect work on the system if they are
not effectively resolved quickly. In addition, 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.
o Several activities important to the CVC's completion, such as
East Front work, have been delayed since the Subcommittee's last
CVC hearing. During the last 5 weeks, the sequence 2 contractor
exceeded its target for interior floor stone installation but
again fell short of its target for interior wall stone
installation. In addition, the sequence 2 contractor met only 2 of
the 8 milestones we have been tracking for this hearing. Although
this contractor's monthly billings were higher in June than in
May, the trend in billings continues to indicate that construction
work is more likely to be completed closer to AOC's new target
dates than its previous ones.
o AOC's schedule provides additional time to complete work after
construction work is scheduled to be done. This additional time
will give AOC some leeway, if necessary, to address risks and
uncertainties such as those associated with complex building
systems and trade stacking, should it occur. The CVC's complex
heating, air conditioning, and ventilation (HVAC); fire
protection; and security systems have to work together as well as
separately, and uncertainties associated with each could affect
the schedules for all. During the past month, the sequence 2
contractor has continued work on its area-by-area plans to prevent
trade stacking2 during finish work. In our reassessment of the
project's schedule, we will determine whether the additional time
AOC has scheduled is likely to be sufficient to address these and
other risks and uncertainties. AOC's construction management
contractor has not yet completed its reassessment of the schedule
but expects to have it done shortly.
We previously estimated 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.
To date, about $530 million3 has been provided for CVC
construction. AOC and its construction management contractor have
completed their reassessments of the cost to complete the project
and believe that sufficient funding will be available except for
potential delay-related costs, assuming that AOC receives about
$26 million in fiscal year 2007 appropriations for CVC
construction. This is the amount our previous cost-to-complete
estimate showed would be necessary without provision for risks and
uncertainties. We have not increased our $556 million estimate
(which includes this $26 million) to reflect recent events. The
results of our reassessment of the cost to complete the project,
which we expect to have by mid-September, will include an
assessment of the impact of these events. Although we anticipate
that our $556 million estimate is likely to increase, we have no
specific indication at this time that the cost to complete the
entire project will exceed our $584 million estimate, which does
include an allowance for risks and uncertainties, such as
potential delay-related costs. 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's 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.
Proposed Completion and Opening Dates Have Held Steady and Construction
Has Progressed, but Risks and Delays Threaten the Project�s Current Schedule
The proposed completion and opening dates in the CVC project's
schedule have remained about the same since the Subcommittee's
last CVC hearing, and work on the project has continued to
progress, but risks have materialized, delaying several important
activities and threatening the project's current schedule. Most
important, a problem with a component of the fire protection
system was identified and has now been resolved. At this time, the
problem seems to have greater implications for the project's cost
than for its schedule, but the underlying management control
issues that it reveals could adversely affect the schedule, even
though AOC has agreed to take actions that we suggested to enhance
its management control over the design and completion of the fire
protection system. In addition, risks have led to problems in a
number of areas, such as the HVAC systems, the gift shops, and the
exhibit gallery, causing delays in these activities and increasing
the risk of delay for the project as a whole. For example, the
proposed opening of the exhibit gallery was deferred about 3
months-to June 29, 2007-after the team learned that it must have a
certificate of occupancy before the artifacts for display can be
delivered and installed. The indicators of progress that we have
been tracking for the Subcommittee showed mixed results during
June, but the improvements in some are not sufficient to offset
our concerns about the risks and uncertainties and delays.
Overall, we have diminished confidence in the likelihood that the
team will be able to meet its currently proposed opening dates. As
noted, we plan to reassess the project's schedule and report our
results to the Subcommittee in September.
AOC�s Proposed Completion and Opening Dates Have Remained about the Same
According to the June 2006 project schedule, the base CVC project
will be completed in May 2007 (except for the exhibit gallery) and
the House and Senate expansion spaces will be completed in August
2007. These dates are about the same as those indicated in the May
2006 schedule. Moreover, according to both schedules, 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 June 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
extends into 2007-as far as April 2007 for the exhibit gallery and
March 2007 for the gift shops, certain East Front mechanical work,
and the installation of wayfinding signage. Certain other
construction work, such as the completion of space for the Capitol
guide service, East Front finish work, and seating installation in
the auditorium, also extends into 2007. 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.
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 June 30,
the overall CVC project was about 84 percent complete and the
sequence 2 work was about 74 percent complete-up from about 82
percent and 71 percent, respectively, as of May 31. Progress on
individual project elements includes the following:
o Interior CVC work has moved forward, according to AOC's
construction management and sequence 2 contractors. For example,
the chilled water systems were flushed, and chilled water began
flowing from the Capitol Power Plant to the CVC this week. The
sequence 2 contractor expects to have dehumidified air in the
exhibit gallery by around mid-August. In addition, the sequence 2
contractor has installed about 95 percent of the floor stone in
the exhibit gallery and has installed about half of the floor
stone in the great hall. Millwork in the south orientation theater
has begun; bulkheads were being hung and finished; and the
installation of kitchen wall and floor tile was substantially
completed on the lower level. On the upper level and in the
auditorium, mechanical, electrical, and plumbing rough-ins were
substantially completed. Furthermore, the CVC team and AOC's Fire
Marshal Division have continued resolving issues associated with
the CVC's fire protection system.
o Surface work continued, including the installation of (1) stone
pavers above the CVC, (2) stone steps on the concrete base slab
between and around the trees planted alongside the auditorium, and
(3) the skylight structure in the north opening above the great
hall. Work on the House connector tunnel has also continued.
o Wall stone installation has now been fully completed in the
food service area; all but four pieces have been installed in the
great hall; and installation has progressed substantially in the
East Front basement and plaza levels, atriums, and auditorium. As
of last week, the sequence 2 contractor had installed 99 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, the center steps have been reinstalled over
new waterproofing material, and air-handling equipment has been
placed on the East Front penthouse area.
o In the House and Senate expansion spaces, progress was made in
installing and priming drywall; installing mechanical, electrical,
and plumbing systems; and inspecting wall and ceiling close-ins.
Risks Associated with the Fire Protection System Pose the Greatest
Challenge to the Project�s Schedule
According to the project's June 2006 schedule, the completion date
for the fire protection system has not changed, but for a variety
of reasons, we are concerned that this system is at significant
risk of delay. Moreover, delays in completing this system could
directly affect the CVC's completion date. Specifically, the
activities associated with the fire protection system now
constitute the single longest path through the project's schedule,
meaning that each day the system's completion is delayed, the
CVC's completion could also be delayed.
Our analysis indicates that progress on the fire protection system
has been affected by communication and management issues, despite
the team's various efforts to coordinate activities and prevent
problems, as well as identify and resolve problems. A number of
issues or "surprises" have occurred, requiring unanticipated
changes to the fire protection system, the interrelated security
system, the schedule, or a combination of these elements. The
changes include adding control panels for the fire alarm system in
the expansion spaces, changing the specifications for the
programming of the fire alarm system, adding activities to the
schedule for the fire alarm system, and changing the sequence of
activities associated with the fire alarm system. AOC and its
construction management contractor have attempted to avoid
problems such as these by such means as holding biweekly or weekly
meetings with the CVC team and AOC's Fire Marshal Division and by
meeting with representatives of the U.S. Capitol Police when
specific security issues arise. In our opinion, these biweekly or
weekly meetings-which started in early 2005 and are chaired by a
senior engineer with AOC's construction management contractor-have
generally helped to identify and resolve the specific issues being
addressed. AOC's weekly risk management meetings have also been
helpful in identifying and addressing specific risks. However, the
U.S. Capitol Police, which is responsible for managing the CVC's
security system, has not always participated in the fire
protection meetings and does not participate in the risk
management meetings. As a result, representatives have not always
been present to identify issues associated with the interface
between the security and the fire protection systems. Furthermore,
some issues have not been addressed because the issues have not
been included in the meeting agendas or specifically raised. As we
reported during the Subcommittee's June 28, 2006, CVC hearing, the
CVC team has not had a comprehensive, prioritized list of system
designs that have to be approved by AOC's Fire Marshal Division.
In addition, although the team does address various parts of the
fire protection system during its progress review, fire protection
system, and risk management meetings the team is just now
developing a comprehensive list of the system elements that can be
used to (1) discuss their status or (2) systematically and
effectively identify potential or actual problems with the design,
installation, or testing of all of the system's components. The
team is working to develop such lists and expects to complete them
shortly. The lists should be particularly useful in identifying
potential issues, including those involving the interface between
the security and the fire protection systems.
Notwithstanding the regular meetings between the CVC team and the
Fire Marshal Division, a problem with a component of the CVC's
fire protection system recently arose. This component is being
installed as an alternative to an approach that was originally
planned to provide a level of protection specified in the life
safety code. Designed to provide an equivalent level of
protection, the alternative approach is necessary because the
original one could not be accommodated within the CVC's design.
However, according to AOC's Fire Marshal Division, the
component-which the sequence 2 contractor has almost completely
installed-would not provide an equivalent level of protection
because it does not meet a survivability standard applicable to
the original system. The CVC team and the Fire Marshal Division
resolved this issue last week, but additional work is required and
additional costs will be incurred. The exact impact of the
additional work on the project's schedule and cost is not yet
clear, and AOC expects to have more information on both shortly.
Moreover, although this issue has been resolved, other issues may
arise and other changes may be required because the design of the
fire protection system has not yet been fully approved; efforts to
resolve open issues for some shop drawings have dragged on for
several months; installation is still in progress; and pretesting
and testing of the fire protection system have not yet begun.
We have not fully evaluated all of the circumstances surrounding
the problem with this component of the CVC's fire protection
system. However, according to the information we have gathered,
issues in at least two areas-communication and
management-contributed to the problem.
o Communication broke down because certain requirements were not
stated explicitly in writing, assumptions varied, and information
was conveyed largely through document exchanges rather than
meetings, during which the unwritten requirements and differences
in assumptions could have surfaced, leading to earlier resolution
of the problem. According to both the CVC team and AOC's Chief
Fire Marshal, much of the communication problem stemmed from the
uniqueness of the CVC and the application of the component in
question and the fact that the situation being addressed is not
specifically covered in the life safety code and other
project-related documents.
o Management issues also contributed to the problem with the
component, despite all the efforts of the CVC team' and the Fire
Marshal Division' to coordinate and successfully address the fire
safety issues. The CVC team and the Fire Marshall Division have
not been able to resolve all issues quickly. For example,
resolution of the team's shop drawings and product specifications
for the fire protection system component in question has dragged
on for over 9 months and is still not complete. Resolution of the
Fire Marshal Division's comments on some other fire protection
system components is also taking several months, but a recent
change in AOC's approach to resolving comments seems to have
improved the situation. Notably, the Division's comments on the
team's February 2006 submittal for another fire protection system
component in the exhibit gallery had not yet been resolved as of
last week. At the same time, though, the CVC team has been working
aggressively to resolve the Division's comments on the drawings
for the base project's fire alarm system, and recently, at the
Architect of the Capitol's direction, the team and the Fire
Marshal Division have been meeting (as well as exchanging
documents) to discuss the Division's comments on the team's
submittal for this system. This process appears to be working
well.
During the last 2 weeks, we met with AOC to discuss our concerns
about the fire protection system and suggested that AOC take
immediate steps to enhance management control over the completion
of the fire protection system as well as its interface with the
CVC's security system. In particular, we believe it is important
for AOC to determine immediately and on an ongoing basis whether
other problems with the design, installation, or testing of the
fire protection system and its interface with the security system
could have significant adverse effects on life safety,
functionality, or the project's schedule or cost. To complement
the team's ongoing efforts, which we believe have been quite
helpful, we suggested, and AOC agreed, to have weekly meetings
with key CVC team members and representatives from AOC's Fire
Marshal Division and the U.S. Capitol Police to discuss all
elements of the fire protection system and to identify and resolve
any concerns, problems, or issues associated with all aspects of
the system's design, installation, pretesting, or final testing,
including any quality, scheduling, or coordination matters, and to
focus on expeditiously attaining fully approved designs for all
aspects of the system. In addition, we asked AOC's Chief Fire
Marshal if he could develop his plans for acceptance testing of
the fire protection system in the next few weeks so that the CVC
team could factor these plans into its work, scheduling, and
resource planning. The Chief Fire Marshal agreed and said that he
has proposed that (1) his Division meet with the CVC team and the
U.S. Capitol Police to identify potential submission items; (2)
all submission items be tracked in weekly meetings; and (3) the
submission items be prioritized for review and resolution. In
addition, both AOC and a U.S. Capitol Police representative agreed
that participation by the U.S. Capitol Police in more of the
team's weekly meetings should prove helpful. Although it may be
impossible to prevent all problems or surprises, we believe that
these steps, if effectively implemented by all parties, can reduce
the risks associated with the fire protection system's completion
and the system's interface with the CVC's security system and
identify problems early enough to minimize their consequences.
Other Risks Have Materialized, Delaying Activities Important to
the Project�s Completion
Although the scheduled completion date for the CVC has remained
about the same as we reported at the Subcommittee's June 28
hearing, problems in a number of areas have either delayed or
could delay activities whose late completion could adversely
affect the project's overall completion. For example, according to
the construction management contractor, the date for the
air-handling units to be mechanically ready slipped by 2 weeks
because of further problems in completing tunnel pipe insulation
work, and efforts to close in the ceiling in the upper-level
orientation and security lobby slipped by 3 weeks because of
problematic sequence 1 work that required remediation. According
to the project's June schedule, additional delays in these
activities of 15 and 25 workdays, respectively, could further
delay the project's overall completion. In addition, a delay of as
little as 2 workdays in completing the gift shops-whose design,
AOC says, has now been agreed upon-could affect the project's
overall completion date. As we will discuss later in our
testimony, several other activities that are important to meeting
the CVC's May 2007 scheduled completion date have also been
delayed.
Several activities important to completing the House and Senate
expansion spaces have also been delayed since the Subcommittee's
last CVC hearing. For example, AOC's construction management
contractor reported design-related delays of about a month each in
activities involving a custom light fixture, a concrete ramp, and
a special fire suppression system. Furthermore, the sequence 2
subcontractor doing the expansion work identified other concerns
that could delay the completion of its work, some of which could
affect the CVC's opening. For example, the subcontractor reported
being instructed to stop certain work in the U.S.Capitol Police's
command center pending the resolution of an issue involving the
facility's fire protection system. The subcontractor also reported
that a lack of humidity controls, caused by the delay in getting
the air-handling units operational, could delay certain casework
and ceiling tile installation.
Finally, although not critical to the CVC's opening, work being
done to connect the Library of Congress's Jefferson building to
the tunnel linking it with the CVC may fall behind by as much as
53 calendar days because of an asbestos problem. However, the
contractor believes that it may be able to recover some of this
time after the asbestos abatement work is completed.
Indicators of Construction Progress Show Mixed Results
The four indicators of construction progress that we have been
tracking for the Subcommittee show mixed results since the
Subcommittee's June 28 CVC hearing. An update on these indicators
follows:
Sequence 2 contractor has continued to miss most 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, the contractor met 2 of the 8
milestones that were due to be completed, according to the
project's June 2006 schedule, and for both, the work was completed
ahead of schedule. However, the contractor was late in meeting 2
other milestones and had not met the remaining 4 milestones as of
July 31. (See app. I.) The sequence 2 contractor attributed the
slippages to a number of factors, including the need to do
remedial or other work first, the work itself or necessary
preceding work taking longer than expected, and a resequencing of
work by the contractor.
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 24 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 occurred in, but
were not limited to, the utility tunnel, East Front, orientation
theaters, exhibit gallery, certain elevator installations, the
upper level assembly room, the atrium, and the Library of Congress
tunnels. According to the CVC team, these other delays were
attributable to such factors as water leaks, deficient sequence 1
work, changes in the sequence of work activities by the sequence 2
contractor, the need to do lead abatement work, 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 23 in the project's May schedule to 24 in the June
schedule, and a number of the activities that slipped in June had
also slipped in the May schedule.
Value of completed work increased in June, but trend continues to
indicate completion in late spring or summer of 2007. 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.
Although the sequence 2 contractor's billings for June were about
$2.2 million higher than for May, both we and the construction
management contractor believe that, overall, the sequence 2
contractor's monthly billings, including the bills for March
through June 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 at least late spring or summer 2007 unless the
value of completed work increases significantly and is sustained
at the increased level. We believe that such 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.
3Since our last CVC testimony, the House and Senate Committees on
Appropriations approved an AOC request to reprogram about $1 million from
CVC operations funding to CVC construction. We have not reflected this
reprogramming in our cost-to-complete estimates or funding figures above,
but will include this change, as well any other changes we believe are
appropriate, in our next CVC testimony.
Proposed Completion and Opening Dates Have Held Steady and Construction Has
Progressed, but Risks and Delays Threaten the Project's Current Schedule
AOC's Proposed Completion and Opening Dates Have Remained about the Same
Construction Work Is Progressing
Risks Associated with the Fire Protection System Pose the Greatest Challenge to
the Project's Schedule
Other Risks Have Materialized, Delaying Activities Important to the Project's
Completion
Indicators of Construction Progress Show Mixed Results
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. In June, there was one critical
path-acceptance testing of the fire protection system. 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:
1. The early and late lines on this figure reflect the cumulative billings
that would be required to complete the project through contract
modification number 110 ($226.8 million total contact value) by the early
and late finish dates shown in the sequence 2 contractor's schedule, which
is based on the September 2006 contractual completion date.
2. The actual line reflects the sequence 2 contractor's actual monthly
billings.
3. 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 through June 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 by the previously scheduled completion
date.
Interior wall stone installation is taking longer than expected, but floor
stone installation exceeded target. Overall, about 84 percent of the CVC's
interior wall stone has been installed (in the CVC, East Front, atrium
areas, and tunnels), according to AOC's construction management
contractor, and the sequence 2 contractor installed 2,890 pieces of
interior wall stone during the last 5 weeks, about 61 percent of its 4,736
piece production target. During the same period, the sequence 2 contractor
installed about 7,130 square feet of floor stone, or about 5 percent more
than the 6,770 square feet specified in the floor stone installation plan
that the contractor recently provided to AOC. In addition, 2 of the 8
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 completed work for one ahead
of schedule, but has not yet completed the other one, according to AOC's
construction management contractor. Although the sequence 2 contractor
made good progress in installing interior wall stone in the base project,
it encountered delays in installing wall stone in the East Front and
atrium areas. According to the construction management contractor, the
East Front delays were attributable to a need for remedial, preparatory,
and lead abatement work, and the atrium delays were attributable to the
need to do remedial work and a decision by the sequence 2 contractor to
resequence work affecting those areas.
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's 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. In our view, the remaining work
associated with the fire protection system poses the greatest single risk
to meeting AOC's July and August 2007 proposed opening dates. At this
time, we are uncertain whether the 2 to 3 months that AOC has added to the
schedule for addressing the challenges, risks, and uncertainties that
continue to face the project-including the fire protection system-will be
sufficient, particularly given the project's history of delays, the
difficulties the CVC team has encountered in getting effective control
over the fire protection system, and the large number of near-critical
activities that can affect the project's overall completion if they incur
relatively short additional delays. Accordingly, we plan to monitor the
actions taken by the CVC team to enhance its control over the completion
of the fire protection system, reassess the project's 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 Complex building systems remain a significant risk. The CVC
will house complex building systems, including HVAC, fire
protection, and security systems. 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 them, either separately or together, during the resolution of
design issues, installation, commissioning, or testing, the
project could be seriously delayed. The risks and uncertainties
associated with the fire protection system are apparent: the shop
drawings for some elements of the system have not yet been
approved; installation has begun, and issues other than the
problem we discussed earlier may require resolution. In addition,
the process for testing the system is not yet clear; the time
needed to complete these activities is uncertain, and the fire
protection system must work in tandem with the security system.
The unanticipated problems that emerged in reviewing the design of
the fire alarm system and in programming it illustrate the impact
such problems can have on the project's schedule. Additional
delays could occur if the team takes longer than expected to get
approved shop drawings, if the proposed system does not meet the
project's design specifications or the life safety code, or if the
fire protection system does not work effectively with the security
system.5 Additionally, 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. As of July
27, this plan had not yet been submitted to or approved by the
Fire Marshal Division. Moreover, 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 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. 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. According to the sequence 2
contractor, its area-by-area plans have prevented trade stacking
to date.
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 June 28 CVC hearing, AOC's architectural contractor
has issued nine design changes or clarifications. As of July 27,
2006, this contractor reported, another eight were in process. In
addition, since the project began, AOC has executed about 100
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, although shop drawings have been approved for almost
all project elements except the fire protection system, according
to AOC, further design or scope changes in various project
elements are likely, given the project's experience to date. In
fact, in reporting on the June schedule, AOC's construction
management contractor noted that anticipated changes to the House
expansion space could affect ceiling close-ins. 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's 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's 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 June 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's
schedule. AOC agrees that it is important to minimize the impact of
proposed design and scope changes.
Additional delays associated with the CVC's new utility tunnel have
resulted, or are likely to result, in additional work or slippages. As we
have previously testified, 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. Moreover, 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. The CVC team has completed the preparatory
work necessary to begin running chilled water through the CVC utility
tunnel and expects to have steam running through the tunnel by mid-August.
The team expects to have the first air-handling unit-which serves the
exhibit gallery-providing dehumidified air to the exhibit gallery by
mid-August. To keep the CVC and expansion space finish work on schedule,
the team will have to either get the other air-handling units operational
within the necessary time frames or obtain temporary equipment to provide
conditioned air, where feasible.
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 certain work on both
the base project and the expansion spaces has been delayed during
the last several 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. AOC's Chief Fire
Marshal has not yet worked out the details of how he will conduct
his acceptance testing for the CVC and the expansion spaces; so
the order in which various CVC and expansion space areas will be
available for opening is not yet clear. More information on this
sequencing issue should be available by the Subcommittee's next
CVC hearing because the Chief Fire Marshal expects to have his
testing plan done soon.
o Risks from insufficient stone deliveries appear to be
diminishing. Although wall stone shortages have caused delays in
the past, they have not recently been a problem. All of the wall
stone for the base project and atrium areas has been delivered,
and AOC does not anticipate a problem with the remaining wall
stone deliveries. According to the construction management
contractor, about 3,700 pieces of wall stone for the East Front
and all of the wall stone for the tunnels still have to be
delivered. For a time, the sequence 2 contractor did have a
problem with the delivery of floor stone for the exhibit gallery,
but that problem has been resolved, and the contractor does not
anticipate problems with floor stone deliveries for other areas.
The sequence 2 subcontractor doing the House and Senate expansion
space work said that some wall stone for the expansion spaces has
been delivered, and at this time he does not anticipate a delivery
problem with the remaining wall stone.
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
Our most recent estimate of the cost to complete the CVC project
was made several months ago. At that time, we 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 million9 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.10 AOC and its construction management contractor
have completed their reassessments of the cost to complete the
project and have concluded that the amount of funds provided to
date plus the $26 million that AOC hopes to receive in fiscal year
2007 CVC construction funds will be sufficient to complete the
project except for possible delay-related costs. (This $26 million
in additional funds is the amount our previous cost-to-complete
estimate showed would be necessary without provision for risks and
uncertainties.) AOC and its construction management contractor
acknowledged, however, that in drawing their conclusions, they
assumed that some funds that have been slated for use for possible
delay-related costs may have to be used for other purposes, thus
possibly requiring additional funding for potential delay-related
costs. As we testified during the Subcommittee's June 28 CVC
hearing, recent events 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. Although
recent events suggest to us that our previous $556 million
estimate may increase, we have not changed it yet pending the
results of our reassessment of the cost to complete the project,
which we expect to have by mid-September. Notwithstanding our
pending reassessment, 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.
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 several 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.
AOC currently has sufficient contingency funding available to
cover anticipated possible delay-related costs associated with the
asbestos problem identified in connection with the work being done
to connect the tunnel running from the CVC to the Jefferson
Building. Even after considering use of the contingency to address
anticipated possible costs for the asbestos problem, AOC would
have contingency funding available for some additional problems or
changes related to the Jefferson Building work. We will continue
to monitor this work and the use of the contingency funds for it.
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, June
29, 2006-August 2, 2006
Scheduled Actual
Activity Location completion completion
Wall Stone Area 3 East Front Ground 7/17/06 7/15/06a
Plaster Walls Orientation Lobby 7/18/06 7/25/06a
Plaster Ceilings West Lobby Assembly 7/19/06 7/25/06a
Hang VP Drywall Congressional Auditorium, Lower 7/20/06 b
Ceiling Level
Wall Stone Area 6 Congressional Auditorium 7/20/06 c
Flush and Treat CVC 7/24/06 6/24/06
HVAC Piping
Fire Alarm Record CVC 7/31/06 d
Submittal
Install AHU-EF-1 Mechanical System 8/01/06 e
Source: AOC's June 2006 CVC sequence 2 construction schedule for
the scheduled completion dates and AOC and its construction
management contractor for the actual completion dates and reasons
for missing milestones.
aWork noted as substantially complete by contractor.
bPreceding work took longer than expected.
cWork delayed by concrete tolerance issues related to sequence 1.
dContractor needed to incorporate a revised sequence of operations
specification recently received from AOC, and other issues took
longer than expected to resolve.
eWork was resequenced after schedule was updated in June and is
now expected to be done in late August.
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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).
9See footnote 3.
10Public Law 108-447, enacted on December 8, 2004, provided that up to
$10.6 million (reduced to $10.5 million by a subsequent budget recission
of $84,800) 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. AOC has now received approval to obligate the entire $10.5
million, which we will discuss further in our next CVC testimony.
(545045)
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