Capitol Visitor Center: Update on Status of Project's Schedule	 
and Cost as of September 25, 2007 (25-SEP-07, GAO-07-1249T).	 
                                                                 
Since the July 31, 2007, Capitol Visitor Center (CVC) hearing,	 
the project's construction has progressed, and Architect of the  
Capitol (AOC) is now anticipating a November 2008, opening date. 
In addition, AOC and the sequence 2 contractor have signed a	 
contract modification that extends the date for completing the	 
majority of the sequence 2 work from September 15, 2006 to	 
November 15, 2007. However, because delays have occurred on a	 
number of near-critical paths, and risks to the project's	 
schedule remain, we agree with the November 2008 opening date.	 
AOC has increased its estimate of the cost to complete the CVC	 
project's construction to about $621 million to cover the costs  
associated with extending the sequence 2 schedule and to provide 
for delays, change orders, and remaining uncertainties. We	 
believe this estimate is reasonable, provided there are no	 
unusual delays. To date, about $556.2 million has been approved  
for CVC construction, and AOC has $18.6 million more that it has 
not yet received approval to obligate. Of this amount, AOC plans 
to use about $6 million for construction and the remainder for	 
operations. For fiscal year 2008, AOC has requested $20 million  
for CVC construction and believes that it may need another $39	 
million.							 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-07-1249T					        
    ACCNO:   A76669						        
  TITLE:     Capitol Visitor Center: Update on Status of Project's    
Schedule and Cost as of September 25, 2007			 
     DATE:   09/25/2007 
  SUBJECT:   Accountability					 
	     Construction contracts				 
	     Contract administration				 
	     Contract modifications				 
	     Cost analysis					 
	     Cost overruns					 
	     Facility construction				 
	     Federal facilities 				 
	     Federal funds					 
	     Future budget projections				 
	     Public visitor-centers				 
	     Risk assessment					 
	     Schedule slippages 				 
	     Strategic planning 				 
	     Cost estimates					 
	     Capitol Visitor Center Project			 

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GAO-07-1249T

   

     * [1]Summary
     * [2]Construction Is Progressing, but Delays in Work on Near-crit
     * [3]AOC Has Updated Its Cost Estimate, and Additional Funds Are
     * [4]Contacts and Acknowledgments
     * [5]PDF6-Ordering Information.pdf

          * [6]Order by Mail or Phone

Testimony

Before the Subcommittee on the Legislative Branch, Committee on
Appropriations, House of Representatives

United States Government Accountability Office

GAO

For Release on Delivery
Expected at 10:00 a.m. EDT
Tuesday, September 25, 2007

CAPITOL VISITOR CENTER

Update on Status of Project's Schedule and Cost as of September 25, 2007

Statement of Terrell G. Dorn, Director, Physical Infrastructure Issues

GAO-07-1249T

Madam Chair and Members of the Subcommittee:

I appreciate the opportunity to be here today to assist the Subcommittee
in monitoring progress on the Capitol Visitor Center (CVC) project. My
remarks will focus on (1) the Architect of the Capitol's (AOC)
construction progress since the last CVC hearing on July 31, 2007,1 and
(2) the project's expected cost at completion and funding status.

Today's remarks 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, potential change order log, and weekly reports on
construction progress. In addition, we reviewed the contract modifications
made to date.

Summary

Since the July 31, 2007, CVC hearing, the project's construction has
progressed, and AOC is now anticipating a November 2008, opening date. In
addition, AOC and the sequence 2 contractor2 have signed a contract
modification that extends the date for completing the majority of the
sequence 2 work from September 15, 2006 to November 15, 2007. However,
because delays have occurred on a number of near-critical paths,3 and
risks to the project's schedule remain, we agree with the November 2008
opening date.

AOC has increased its estimate of the cost to complete the CVC project's
construction to about $621 million to cover the costs associated with
extending the sequence 2 schedule and to provide for delays, change
orders, and remaining uncertainties. We believe this estimate is
reasonable, provided there are no unusual delays. To date, about $556.2
million has been approved for CVC construction, and AOC has $18.6 million
more that it has not yet received approval to obligate. Of this amount,
AOC plans to use about $6 million for construction and the remainder for
operations. For fiscal year 2008, AOC has requested $20 million for CVC
construction and believes that it may need another $39 million.

1GAO, Capitol Visitor Center: Update on Status of Project's Schedule and
Cost as of July 31, 2007,  GAO-07-1149T  (Washington, D.C.: July 31,
2007).

2AOC contracted with two firms to construct the CVC project in phases, or
sequences. The sequence 1 contractor, Centex Construction Company,
performed the project's excavation and structural work, while the sequence
2 contractor, Manhattan Construction Company, is responsible for the
mechanical, electrical, plumbing, and interior finishing work.

3Near-critical paths are, after the critical path or paths, the longest
paths of activities through a project's schedule. Each day of delay in the
critical path could delay the completion of the entire project.

Construction Is Progressing, but Delays in Work on Near-critical Paths and Other
Risks Could Affect the Scheduled Completion Date

According to AOC's construction management contractor, in dollar terms,
the overall CVC project is 98 percent complete, compared with 96 percent
reported complete at the July 31 CVC hearing. Twenty-one of the CVC's 23
air handling units were reportedly operating full time as of September 13,
2007 and these systems are now undergoing testing, balancing, and
commissioning.

In August 2007, AOC and the sequence 2 contractor signed a contract
modification that extends the date for completing the majority of the
sequence 2 work from September 15, 2006, to November 15, 2007. The
sequence 2 contractor continues to work hard on completing this portion of
the project, which must be finished before the final fire alarm testing
can begin. Work has advanced on the project's heating, ventilation, and
air-conditioning (HVAC) system, interior wall stone and ceiling
installation, and other interior and exterior construction work.

AOC has not reported any delays on the CVC project's critical path.
However, work has fallen further behind schedule on the majority of the
near-critical paths we have been monitoring, including, for the CVC, 9 of
the 17 near-critical paths reported on at the last CVC hearing and 1 new
near-critical path, monitored last month. Work on 6 of the CVC
near-critical paths fell at least 2 weeks further behind. Altogether,
there are now 5 CVC near-critical paths with 1 week or less of float
remaining--meaning that with delays of 5 days or less, these near-critical
paths will become the critical path or paths.

In the House and Senate expansion spaces, work on 11 of 14 near-critical
paths lost time last month. Because of delays in the House hearing room
and in several near-critical-path activities, such as work in the atriums,
mounting fire alarm devices, and framing ceilings, the schedule for
completing the expansion spaces has slipped by about 7 weeks since the
last hearing--to February 5, 2008--according to the project's August 2007
schedule.

Although the delays in work on the CVC's near-critical paths are
significant, the major risk to the project's schedule continues to be
technical problems that may surface during the installation, integration,
operation and testing of the CVC's complex major building systems,
including the fire alarm, security and HVAC systems. Moreover, such
technical problems may not be evident until the systems undergo their
final acceptance testing.

Additional potential change orders also pose risks and continue to be
identified by the CVC team each month. AOC and its contractors have
continued to work together to address the number of open (unresolved)
potential change orders, and the list of open orders has continued its
slight decline. Sustained attention to this issue is needed to reduce
budget uncertainty and to avoid risks to the project's schedule as new
proposed change orders come in. Figure 1 compares the number of
outstanding proposed change orders with the number settled each month.

Figure 1: Outstanding and Settled Proposed Change Orders by Month, March
2006 through August 2007

AOC Has Updated Its Cost Estimate, and Additional Funds Are Likely to Be Needed

AOC has increased its estimate of the cost to complete the CVC project's
construction to about $621 million. This revised estimate reflects, among
other things, the cost associated with extending the date for completing
sequence 2 work and is consistent with our report at the July 31, 2007,
CVC hearing that the total cost of completing the project's construction
was likely to exceed $600 million. The new $621 million estimate includes
contingency amounts for delays, change orders, and remaining uncertainties
among other things related to the project's fire alarm testing. Our review
of this estimate indicates that it is reasonable, given the information
available at this time, provided there are no extraordinary delays in the
future. Although there is still considerable uncertainty about the cost
impact of earlier construction delays and future fire alarm testing, we
believe reasonable budgetary allowances have been made.

To date, about $556.2 million has been approved for CVC construction. In
addition, AOC has $18.6 million of its fiscal year 2007 CVC appropriations
that it has not yet received approval to obligate. AOC has indicated that
of this amount, approximately $6 million will be used for construction and
$12.6 million will be used for operations. AOC has requested $20 million
for fiscal year 2008 CVC appropriations for construction and estimates, on
the basis of its new project estimate, that it may need an additional $39
million.

Madam Chair, this completes my prepared statement. I 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 Terrell Dorn
at (202) 512-6923. Other key contributors to this testimony include
Shirley Abel, Lindsay Bach, Maria Edelstein, Elizabeth Eisenstadt,
Jeanette Franzel, Jackie Hamilton, Bradley James, David Merrill, and
Joshua Ormond.

(545065)

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