Capitol Visitor Center: Update on Status of Project's Schedule
and Cost As of November 15, 2006 (15-NOV-06, GAO-07-129T).
We are pleased to assist the Senate Committee on Appropriations,
Subcommittee on the Legislative Branch in monitoring progress on
the Capitol Visitor Center (CVC) project. Our remarks will focus
on (1) the Architect of the Capitol's (AOC) construction progress
and problems since the Subcommittee's September 21, 2006, hearing
and their impact on the project's schedule; and (2) the project's
expected cost at completion and funding situation. 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 recently taken, and plans or needs to take, to meet its
currently scheduled completion date.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-07-129T
ACCNO: A63404
TITLE: Capitol Visitor Center: Update on Status of Project's
Schedule and Cost As of November 15, 2006
DATE: 11/15/2006
SUBJECT: Construction contracts
Contract administration
Cost analysis
Cost overruns
Facility construction
Federal facilities
Federal funds
Future budget projections
Public visitor-centers
Risk management
Schedule slippages
Strategic planning
Cost estimates
Capitol Visitor Center Project
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GAO-07-129T
* [1]Construction Progress Has Not Been Sufficient to Offset Impa
* [2]Progress: CVC Team Has Advanced Interior CVC and Other Const
* [3]Problems: Required Changes to Fire Protection System and Con
* [4]Problems with the HVAC System
* [5]Delays in Completing the Expansion Spaces and the Library
of
* [6]Indicators of Construction Progress Point to Further Delays
* [7]Project's Schedule Remains Vulnerable to Challenges, Risks,
* [8]Project's New Schedule Appears Achievable Only under Certain
* [9]Recommendations
* [10]Project's Estimated Cost and Funding
* [11]Contacts and Acknowledgments
* [12]Appendix I: Capitol Visitor Center Critical Construction Mil
* [13]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 2:30 p.m. EST
Wednesday, November 15, 2006
CAPITOL VISITOR CENTER
Update on Status of Project's Schedule and Cost As of November 15, 2006
Statement of Bernard L. Ungar, Director Bradley M. James, Assistant
Director Physical Infrastructure Issues
GAO-07-129T
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 (1) the Architect of the Capitol's (AOC) construction progress
and problems since the Subcommittee's September 21, 2006, hearing and
their impact on the project's schedule; and (2) the project's expected
cost at completion and funding situation.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 recently taken, and plans or needs
to take, to meet its currently scheduled completion date.
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, potential change order log, and daily reports on the progress
of interior wall and floor stonework. We retained a mechanical engineering
consulting firm (Kincaid/Bryant) to help us assess the CVC team's progress
in completing the project's heating, ventilation, and air-conditioning
(HVAC) system. In addition, we reviewed the contract modifications made to
date and the estimates of cost increases provided by AOC and its
construction management contractor, including their estimates of the costs
related to delays,2 and their preliminary cost estimates for recent
changes to the CVC's fire protection and security systems.
At the Subcommittee's September 21 CVC hearing, we reported that our
assessment of the project's schedule and expected cost at completion was
somewhat constrained because the CVC team was still analyzing the impact
on the project's schedule and cost of the recently identified changes
required for certain components of the fire protection and security
systems. We also noted that the team expected to have firmer schedule and
cost information around mid-October. However, the CVC team did not receive
firmer information on the impact of the recent fire alarm system changes
on the schedule until late last week, noted some remaining uncertainty
about how long the pretesting of the fire alarm system would take, and
recently learned of significant changes that would be needed in the
security system and in the sequence for bringing the CVC's air handling
units online. In addition, the impact of these changes on the project's
cost is not yet fully known. Therefore, we could not thoroughly assess the
project's schedule or estimated cost at completion and are basing our
views on the information available as of November 9, 2006, recognizing
that our views could change as more information on the impact of these
changes becomes available.
1GAO, Capitol Visitor Center: Update on Status of Project's Schedule and
Cost As of September 21, 2006, GA0-06-1058T (Washington, D.C.: Sept. 21,
2006).
2The estimates for most of the delay-related costs were provided by AOC
and its construction management contractor for budgetary purposes only and
do not reflect any judgments by GAO of the validity of any potential
contractor claims.
In summary:
Since the Subcommittee's September 21 CVC hearing, the CVC team has
continued to move the project's construction forward, but the project's
scheduled completion date has slipped by 6 weeks, to October 26, 2007,3
and further delays are possible. The 6-week delay was attributable to
problems with the project's most critical activity--the fire protection
system. Under the current schedule, the construction of the House and
Senate expansions spaces will be completed before the CVC's construction,
but both the CVC and the expansion spaces will be available for occupancy
at the same time because final acceptance testing of both is slated to be
done concurrently.
o During the past month, the CVC team has made progress on the
project's HVAC system, interior floor stone and ceiling
installation, and other interior and exterior construction work.
In addition, AOC sent Congress an action plan for improving its
execution of the project and the project's schedule, as the
Subcommittee requested and we had recommended, and this plan is
responsive to our recommendations. AOC is also considering other
action not discussed in this plan.
o Despite this progress, problems have occurred in many important
activities besides the CVC's fire protection system, according to
AOC's construction management contractor. Although these delays
did not add time to the project's schedule this month, additional
delays could do so in the future. For example, the completion date
for wall stone installation in the East Front basement slipped by
38 workdays since the Subcommittee's last CVC hearing, and an
additional 17-workday slippage could delay the CVC project's
scheduled completion date. Similarly, work on the HVAC system
slipped 19 workdays, and an additional slippage of 46 workdays
could delay the project's scheduled completion date. Recently
identified issues associated with the CVC's HVAC system, fire
protection system, and security system--including issues
associated with their coordination and testing--also pose risks to
the project's scheduled completion date. In addition, concerns
have arisen about AOC's ability to achieve a high-quality,
complete, and usable facility within the current estimated time
frame and cost now that the contractual date for completing
sequence 2 construction work--September 15, 2006--has passed. In
particular, there is a risk that, without negative consequences,
the resolve of some major stakeholders to complete the project in
a timely and efficient manner could be adversely affected.
Finally, all the indicators of progress that we have been tracking
for the Subcommittee, together with other risks and uncertainties,
suggest that the project is likely to finish later than October
2007.
As we said at the Subcommittee's September 21 CVC hearing, AOC
will be able to meet or come close to meeting its scheduled
project completion date only if the CVC team promptly makes
significant improvements in its execution of the project and the
project's schedule. It is too early to tell whether the actions
identified in AOC's November 2006 action plan will be effective in
curtailing additional schedule slippages. Furthermore, the
concerns identified since the Subcommittee's last CVC hearing,
particularly those related to the CVC's HVAC system, if not
quickly addressed, could adversely affect the project's schedule.
Thus, until it is clear that AOC's actions are effective in
curtailing additional schedule slippages, we believe that the
facility is more likely to be completed in early 2008 than in the
fall of 2007. To improve AOC's ability to meet its schedule and to
reduce the risks to the project's schedule and cost facing AOC now
that the contract completion date is past, we are recommending
that AOC (1) promptly work with the CVC team to address the
concerns associated with the CVC's HVAC system and (2) carefully
consider the existing contractual remedies available to achieve
completion of all necessary work within the current estimated time
frame and cost without otherwise compromising any of the
government's contractual rights or remedies.
Since the Subcommittee's September 21 CVC hearing, we have
increased our estimate of the total cost to complete the entire
CVC project by about $8 million to account for the delays and
changes identified during this period,4 but our estimate is rough
because we have not had the information or the time needed to
fully assess the impact of these delays and changes on the
projects' cost. With this $8 million increase, we now estimate
that the total cost of the entire CVC project at completion is
likely to be about $592 million without an allowance for risks and
uncertainties, recognizing, however, that the extent of AOC's
responsibility for the delay-related costs is uncertain. To date,
about $531 million has been provided for CVC construction. For
fiscal year 2007, AOC has requested $26 million in CVC
construction appropriations, plus $950,000 in AOC general
administration appropriations for contractual support to complete
acceptance testing of the CVC's fire protection system on
schedule. During fiscal year 2007, AOC is also likely to need, but
has not yet requested, additional funds to pay for changes. At the
Subcommittee's last CVC hearing, we roughly estimated that AOC
would need an additional $5 million to $10 million in fiscal year
2007 over and above what it had already requested for changes
unless it decided to use funds slated for other purposes, after
obtaining the necessary congressional approvals. AOC agrees with
this rough estimate at this time and notes that it will likely
need additional money in fiscal year 2008 to replenish these funds
and to cover other costs if they materialize.
Construction Progress Has Not Been Sufficient to Offset Impact of
Changes and Delays on the Project�s Schedule and Completion
Work on the CVC project has progressed in many areas, but the
project completion date has slipped to October 26, 2007, about 6
weeks beyond the September 17, 2007, completion date discussed at
the Subcommittee's last CVC hearing. This 6-week slippage is due
to continuing problems associated with the CVC's fire protection
system, but many other important activities, including those
associated with the HVAC system, East Front, and security system,
have been delayed as well. Last week, at the request of the
Subcommittee and as we had recommended, AOC completed and sent to
Congress an action plan for improving management execution of the
project and its schedule. The action plan was responsive to our
recommendation. However, it is too early to tell whether
implementing the plan will curtail the types of schedule slippages
that have occurred since the Subcommittee's last CVC hearing and
throughout the project. Moreover, although the CVC team and AOC's
Fire Marshal Division have agreed on a number of important
elements of the CVC's fire protection system, they have not yet
agreed on all important elements. Additionally, as noted, concerns
have emerged regarding the CVC's HVAC system, as well as the
impact of the passage of the sequence 2 September 15, 2006,
contract completion date. Accordingly, priority should be given to
accomplishing all of the identified critical tasks so that
pretesting of the facility's fire protection system can begin in
the spring of 2007. Additionally, to ensure that AOC gets a
high-quality, fully functional facility, it is essential that AOC
effectively implement the actions it has identified and give
careful consideration to existing contractual remedies available
to it to achieve completion of all necessary work within the
current estimated time frame at a reasonable cost without
otherwise compromising any of the government's contractual rights
or remedies.
Progress: CVC Team Has Advanced Interior CVC and Other
Construction Work and Has Begun to Implement an Action Plan
for Strengthening Its Project Management
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 October
31, the overall CVC project was about 88 percent complete and the
sequence 2 work was about 84 percent complete--up from about 86
percent and 77 percent, respectively, as of the Subcommittee's
last CVC hearing. 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 CVC team and AOC's Fire Marshal Division have reached or
nearly reached agreement on the design for several critical
elements of the facility's fire protection system. Agreement on
these elements is necessary for the system's installation to
proceed. In addition, the mechanical subcontractor has completed
certain preparations for operating the CVC's air handling units,5
all but two of which passed a required test for leaks as of
Monday, and the CVC team expects conditioned air to begin flowing
to certain parts of the facility later this month. The sequence 2
contractor has also installed about 65 percent of the CVC's floor
stone, up from about 43 percent at the time of the Subcommittee's
last CVC hearing, and ceiling installation is complete or
essentially complete in the great hall, south side corridor (lower
level), both orientation theaters, and the food service area. (AOC
notes that blistered ceiling tile in the orientation theaters will
have to be repaired or replaced.)
o Surface work continued, including paving and brick gutter work
on the Senate plaza. Work on the House connector tunnel and on
linking the Library of Congress tunnel with the Jefferson Building
has also continued.
o East Front work continued, including completion of stone
installation on the redesigned archway above the main central
staircase from the CVC to the East Front and installation of
ductwork and metal stud framework to support wall stone at the
rotunda and gallery levels.
o In the House and Senate expansion spaces, ceiling close-in
inspections, ceiling panel installation, and stone work have
continued, and installation of the circular staircase that will
connect all three levels of the Senate expansion space has begun.
On November 7, 2006, AOC sent Congress an action plan setting
forth a number of steps it has taken, plans to take, or is
considering to ensure that the CVC is ready for occupancy in the
fall of 2007. AOC developed this plan at the Subcommittee's
request in response to recommendations we made to AOC at the
Subcommittee's September 21 CVC hearing. These recommendations
were aimed at enhancing AOC's execution of the schedule and
project and at facilitating the Subcommittee's efforts to (1) hold
AOC accountable for managing the project and (2) work with AOC to
ensure that the schedule implications of proposed scope or design
changes are quickly determined and considered by all appropriate
stakeholders before final decisions on the proposed changes are
made. AOC's actions included
o meeting weekly with the CVC team to deal exclusively with
schedule issues;
o having its construction management contractor identify areas
needed to meet the project's schedule that the contractor believes
are understaffed or face obstacles to progress;
o identifying sequence 2 and construction management personnel who
are responsible for meeting key schedule dates and resolving
identified problems;
o basing the sequence 2 contractor's future award fee on meeting
schedule milestones;
o reassessing the scope, depth, and time frames associated with
the pretesting and final testing of the facility's fire and
life-safety protection systems;
o increasing communication among the CVC team, AOC's Fire Marshal
Division, and the U.S. Capitol Police; and
o discussing proposed significant scope or design changes with
Capitol Preservation Commission representatives before such
proposed changes are adopted and getting the congressional
leadership's approval for discretionary changes requested by the
Senate or House.
The actions AOC has identified are generally responsive to our
recommendations and, if implemented effectively and quickly,
should help AOC improve its project and schedule management as
well as help ensure that the schedule and cost implications of
proposed discretionary design or scope changes are appropriately
considered before final decisions on them are made. However, we
have concerns about the usefulness of one step AOC is
considering--the possible establishment of a CVC peer review panel
to assess the approaches planned for the fire protection system's
pretesting and final testing. We have expressed our concerns to
AOC, and it has agreed to consider them.
Besides the actions it identified in its November 2006 action
plan, AOC has been considering how to deal with the impact of
passing the sequence 2 contract completion date, September 15,
2006. This is a complex issue, in part because its resolution
potentially involves preliminary determinations about the causes
of, and responsibility for, project delays during sequence 2 up to
September 15. AOC has also been considering other factors, such as
the need to instill a sense of urgency and responsibility to meet
the contractor's currently established fall 2007 completion time
frame; the possibility of setting a specific date as the new
contract completion date and the implications associated with
alternative dates; the constructive manner in which the sequence 2
contractor has worked with AOC and the rest of the CVC team to
accomplish work and resolve problems; and the need to ensure that
the work necessary to get the facility completed is done
expeditiously at a reasonable cost. We have discussed these issues
with AOC and pointed out that it needs to decide how it intends to
proceed as quickly as possible and also consider the risks that
various options pose. In view of additional schedule slippages
that have occurred and issues that have arisen since the
Subcommittee's last CVC hearing, we are making additional
recommendations to AOC, which we will discuss later in this
testimony.
In addition to the actions identified by AOC, the sequence 2
contractor has reported adding five superintendents to its CVC
staff in the last several months to help achieve the schedule.
Given the number and magnitude of the changes that have occurred
to the sequence 2 contract since it was initially awarded and the
extent to which problems have constrained progress, we believe
that this additional supervision should put the team in a better
position to meet schedule dates and address problems quickly.
Problems: Required Changes to Fire Protection System and Continued
Slippages in Other Important Activities Have Extended the Project�s
Schedule and Completion Date
The additional time needed to make design changes to the CVC's
fire protection system has extended the project's completion date
by about 6 weeks since the Subcommittee's September 21 CVC
hearing--from September 17, 2007, according to the schedule in
effect at that time, to October 26, 2007, according to the October
2006 schedule issued last week. In addition, AOC's construction
management contractor reported slippages in construction work for
all of the 20 near-critical activity paths it identified in its
schedule report for October 2006. For many of these activity
paths, the schedule slipped at least 4 weeks. For example, the
contractor reported a 65-workday delay for two East Front
elevators due to late completion of necessary preceding work, a
66-workday delay for fabrication and installation of bronze doors
because of fabrication problems experienced by the supplier, a
38-workday delay in ceiling close-ins in the upper level security
lobby needed to resolve unexpected ceiling problems, and a
38-workday delay in completing wall stone work in the East Front
basement area attributable to unanticipated design issues. The
contractor also reported a 130-workday delay in the delivery of
custom light fixtures, apparently the result of contractual issues
between the sequence 2 contractor and its supplier. According to
the construction management contractor, there are now five
near-critical activity paths--including the HVAC system, East
Front work, and work in the upper level security lobby and
assembly rooms, for which additional slippages of 17 to 53
workdays could further delay the CVC's completion date.
Neither the September 17, 2007, nor the October 26, 2007, project
completion dates included any time for (1) installing artifacts in
the exhibit gallery after a certificate of occupancy has been
issued, (2) preparing for operations, or (3) dealing with risks
and uncertainties. AOC's October 2006 schedule shows the artifacts
installed in the exhibit gallery by November 30, 2007, but does
not allow any time for dealing with risks or uncertainties
associated with completing the work necessary for a certificate of
occupancy, and it is not clear whether the additional time
provided for installing the artifacts will be sufficient to
prepare for operations.
Problems with the HVAC System
In work on the CVC's HVAC system, AOC's construction management
contractor reported a 19-workday slippage, which the contractor
attributed to a steam pipe support problem and a problem at the
Capitol Power Plant. As we indicated at the Subcommittee's last
CVC hearing, we asked our mechanical engineering consultant to
reassess the status of the CVC's air handling units in early
November 2006 because the CVC's HVAC system affects many
activities, has had a number of problems, and poses significant
risks to the project's successful completion. We asked the
consultant to compare the units' mechanical readiness to provide
conditioned air to the CVC as of November 1 with their readiness
as of his previous assessment, on September 6, 2006. On November
1, he found that the installation of controls for the air handling
units was nearing completion, substantial work had been done to
insulate 7 of the units, and all of the units could be ready on
schedule with committed effort by the sequence 2 mechanical
subcontractor. He noted, however, that except for pressure and
leak testing and controls installation, little visible work had
been done on 12 of the units to address the issues he had
identified during his September visit. He said he did not see a
large number of workers in the air handling unit areas and the
work that was being done appeared to be on pipe insulation.
Moreover, he saw little coordination between work on completing
the air handling units and on the spaces they are to serve, and he
noted a number of concerns about the operational readiness of
both, indicating that delays in providing conditioned air to the
facility and in balancing of the air handling units could
potentially delay the project's schedule.
Even though the HVAC system's installation and associated work are
progressing, a number of issues besides those observed by our
mechanical engineering consultant have arisen since the
Subcommittee's last CVC hearing, heightening our concerns about
the CVC team's ability to meet its schedule for completing and
commissioning the system. Because some of the spaces to be served
by the air handling units were not yet ready, the sequence 2
contractor recently decided to change the sequence in which some
of the air handling units would be placed in service. However, as
of last week, the technical implications of this change had not
been fully determined. The commissioning contractor has questioned
whether enough people will be available to support the
commissioning process
within the scheduled time frames, and, as noted, our mechanical
engineering consultant has raised operational readiness concerns.
AOC's construction management contractor has also expressed
concerns about these issues, and we have raised the issues in a
number of CVC team meetings, but the responses have not given us
confidence that (1) all the work associated with bringing the air
handling units on line and commissioning them has been
sufficiently coordinated among the team members; (2) all technical
issues and risks associated with fully operating the units have
been adequately addressed; and (3) that sufficient staff will be
available to meet the scheduled dates.
According to sequence 2 contractor personnel, these types of
problems and ongoing schedule adjustments to address day-to-day
events are not uncommon in large, complex construction projects.
Not all the problems with the air handling units have to be
resolved fully before commissioning work can proceed, they said,
and air handling units are typically turned on before other work
is completed to provide conditioned air for materials that need
it. The sequence 2 contractor said it would work with the
mechanical subcontractor and other parties to ensure that the HVAC
system issues are resolved in a timely manner. Furthermore,
according to the contractor personnel, contractual provisions are
in place to address providing conditioned air to the CVC while
construction work is underway. We understand these points and
recognize the progress that has been made. However, in light of
the recurring slippages in the HVAC system's schedule, the
system's importance to the pretesting and final testing of the
facility's fire protection system, and the concerns expressed by
AOC's construction management contractor and the commissioning
contractor, we believe prompt action is needed to resolve the
concerns and ensure that the schedule for completing the HVAC
system work is realistic and will be met.
Delays in Completing the Expansion Spaces and the Library of
Congress Tunnel
The schedule for essentially completing the construction of the
House and Senate expansion spaces (currently scheduled for April
23, 2007) has slipped about 6 weeks since the Subcommittee's last
CVC hearing, and several activities important to completing these
spaces have also been delayed. For example, AOC's construction
management contractor reported another 14-workday delay in
completing the circular stairs in the atrium areas. Delays have
also occurred in, for example, the installation of the stone arch
in the House lower level, because the work is taking longer than
expected, and in the installation of millwork in the House lower
level, because of fabrication delays. In addition, a special fire
suppression system was not installed because it had not been
approved. Furthermore, the sequence 2 subcontractor doing the
expansion space work identified a number of concerns that could
affect the project's completion. For example, the subcontractor
reported that its schedule could be adversely affected if
significant scope or design changes continue. Assuming that scope
and design changes are controlled, the sequence 2 subcontractor
responsible for the expansion space work hopes to recover some of
the lost time and essentially complete its construction work in
March 2007. In addition, the project's schedule shows that the
construction activity (excluding testing) remaining after the
April 2007 essential completion date is primarily related to work
necessary to complete the circular stair in the House atrium. AOC
anticipates that a design change will enable the circular stairs
in both the House and the Senate atriums to be completed sooner
than currently scheduled.
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 has fallen more than 3 weeks
behind since the Subcommittee's last CVC hearing, according to the
construction management contractor, at least in part, because
certain stone work has taken longer to install than anticipated.
The subcontractor responsible for this work, which is currently
scheduled for completion on April 24, 2007, expects to recover
lost time and complete the work in March 2007. Furthermore, the
construction management and sequence 2 contractors report that,
for a number of reasons, the work on the tunnel itself has slipped
about 9 1/2 weeks beyond the completion date in effect at the
Subcommittee's last CVC hearing.
Indicators of Construction Progress Point to Further Delays unless
AOC�s Project Execution Significantly Improves
The four indicators of construction progress that we have been
tracking for the Subcommittee, together with the risks and
uncertainties that continue to face the project--which we will
discuss shortly--demonstrate to us that AOC will be unlikely to
meet its fall 2007 project completion date unless it significantly
improves its project execution. 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 or was
expected to meet 4 of the 18 milestones that were due to be
completed, according to the project's September 2006 schedule, and
for 1 of these 4, the work was completed ahead of schedule.6
However, the contractor was late in completing work for 4 other
milestones and had not completed or was not expected to complete
the work for the remaining 10 milestones by November 15, 2006.
(See app. I.) The sequence 2 contractor attributed the slippages
to a number of factors, including design issues and a need to
relocate ductwork, add steel support for wall stone, and
resequence work.
Figure 1: Sequence 2 Contractor's Progress in Meeting Selected
Milestones as of CVC Hearing Dates
Value of completed work has increased since the last hearing, but
trend reflects the sequence 2 contractor's difficulties in meeting
scheduled completion dates. 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. Overall, the sequence 2
contractor's monthly billings, including the bills for March
through October 2006, indicate that construction work is about 2
months behind the late finish curve, which indicates completion
around November 2007. 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 suggests that
AOC faces challenges in meeting its fall 2007 completion date and
is more likely to complete the facility later than its current
schedule shows.
3This date does not allow time for installing artifacts in the exhibit
gallery, preparing for operations, or addressing risks and uncertainties.
AOC has allowed another 5 weeks, until November 30, 2007, for installing
the artifacts and has not estimated a time frame for operations
preparations.
4Our estimate includes delay-related costs that AOC and its construction
management contractor estimated for budgetary purposes only. Our inclusion
of these costs in our estimate does not reflect any judgments by GAO of
the validity of any potential contractor claims.
5Chilled water balancing.
6As of November 14, AOC's sequence 2 and construction management
contractors expected that work associated with three tracked milestones
would be completed today. We therefore counted them as completed today. We
did not have the opportunity to verify the completion of these activities
before we submitted our prepared statement to the Subcommittee for today's
hearing. We did not count as completed activities that the sequence 2
contractor believed were completed that were not confirmed as such by the
construction management contractor.
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 144 ($237.5 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 the late
lines in the figure. For the CVC, the actual billing line has been
trending below, and in March 2006 went below, the late finish line, where
it remained through October 2006. Even with the lag in billings, this
trend indicates that the amount of work being completed and billed each
month is not sufficient to keep the project on schedule.
Installation of interior wall and floor stone is taking longer than
expected. Overall, about 86 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 nearly 85,000 of the 129,780 square feet of interior
floor stone required as of November 9. Although the sequence 2 contractor
has installed almost all of the wall stone in the CVC itself and all of
the wall stone in the atrium areas, wall stone installation in the East
Front is significantly behind schedule. According to the sequence 2
contractor's January 2006 wall stone installation schedule, the East Front
wall stone was to be completely installed by July 10, 2006. As of November
10, about 4,700 pieces of wall stone remained to be installed in the East
Front--the same quantity as we reported at the Subcommittee's last CVC
hearing. During the 8 weeks since that hearing, the sequence 2 contractor
installed about 34,900 square feet of interior floor stone, or about 65
percent of the 52,060 square feet specified in the floor stone
installation plan that the contractor had previously provided to AOC.
According to the construction management contractor, the sequence 2
contractor's installation of interior floor stone has been impeded by a
lack of available space and by some work taking longer than expected.
Figure 3 shows the sequence 2 contractor's progress in installing interior
floor stone since February 13, 2006.7
7Our statement no longer includes a figure comparing actual to targeted
wall stone installation because all targeted quantities were to have been
installed by August 7, 2006, according to the sequence 2 contractor's
January 2006 installation plan.
Figure 3: 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 quickly completing the project. Given the project's
history of delays, the difficulties the CVC team has encountered in
quickly resolving problems that arise, and the large number of
near-critical activities that can affect the project's overall completion,
the CVC team's efforts to identify potential problems early and resolve
issues quickly will be even more important from this point forward,
because AOC has left no "slack" in the schedule for contingencies. In our
view, the remaining work associated with the fire protection and HVAC
systems poses the greatest risks to meeting AOC's fall 2007 project
completion date. The steps AOC has taken to mitigate these risks have been
helpful, but much work remains to be done on these systems and on their
linkages with other building systems. In addition, the project continues
to face risks and uncertainties associated with other work important to
its completion, such as the East Front, and additional design or scope
changes. The project's current schedule does not provide the 2 to 3 months
that a previous schedule allowed for addressing ongoing challenges, risks,
and uncertainties. Accordingly, we plan to continue to monitor the CVC
team's efforts to meet its schedule for the fire protection, HVAC,
security, and other building systems and other key near-critical
activities as well as the timeliness of the actions taken by the CVC team
to address problems, concerns, and questions that arise. 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 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. AOC's Fire Marshal Division and the CVC team have
recently made considerable progress in reaching agreement on the
design of a number of important elements of the CVC's fire
protection system that are important to the purchasing and
installation of wiring and equipment. As of November 13, the Fire
Marshal Division had approved or essentially agreed to the designs
of the sprinkler, smoke control, and emergency public address
systems as well as most aspects of the CVC's and East Front's fire
alarm systems that are related to the ordering and installation of
wiring and equipment. According to the Fire Marshal Division, any
outstanding comments on these system elements are minor. On the
other hand, agreement has not yet been reached on a number of
other system elements, including the sequence of operations for
the CVC fire alarm system, the design for the special fire
protection system in the exhibit gallery, and the plan for final
acceptance testing of the facility's fire protection system. A
sequence 2 subcontractor has identified dates by which certain
elements must be approved to avoid further delays. Thus,
additional delays could occur if the team takes longer than
expected to get necessary remaining approvals or if the fire
protection system does not work effectively individually or in
concert with the security or other building systems.8 It is
because of constraints such as these that we believe it is so
important to address open issues associated with the HVAC system
and to continue coordination with the U.S. Capitol Police on the
security system. Since the Subcommittee's last CVC hearing, the
Capitol Police have identified another security problem that will
require additional work. The impact of this work, if any, had not
been determined as of November 9.
o Building design and work scope continue to evolve. The CVC has
undergone a number of design and work scope changes. Since
September 15, 2006, AOC's architectural contractor has issued five
design changes or clarifications. As of November 8, 2006, this
contractor reported, another four were in process. In addition,
since the project began, AOC has executed over 100 sequence 2
contract modifications for work that was not anticipated.9 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,
according to AOC, further design or scope changes in various
project elements are 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 4 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.
8According 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
schedule for completing the expansion spaces.
9These 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 4: Cumulative Number of Potential Change Orders Submitted for CVC
Sequences 1 and 2 between September 2003 and November 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.
o Trade stacking could delay completion.10 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
various areas of the CVC. According to the sequence 2 contractor,
it has been continuing to meet regularly with its subcontractors
to identify and resolve potential issues. The CVC team identified
instances of trade stacking that occurred in an effort to expedite
certain East Front work and in doing millwork and stone work in
the orientation theaters. AOC's construction management contractor
has noted trade stacking as a potential issue associated with the
compressed time frame for bringing all of the air handling units
on line.
o Additional delays associated with the CVC's new utility tunnel
have resulted, or could result, in additional work or slippages.
The delay in starting up the utility tunnel's operations has
necessitated the use of temporary humidity control equipment for
several areas to avoid damage to finish work and ceiling tile.
Such delays may subject certain work to the risk of damage or may
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 was controlled in that area.
According to the CVC team, the installed tile could be damaged if
the temperature or humidity is not within specified levels, and
certain exhibit gallery woodwork has been delayed because
conditioned air has not been available. Although the CVC team
expected in early August to be providing dehumidified air to the
exhibit gallery by mid-August, the sequence 2 contractor now
expects to begin providing conditioned air to the CVC later this
month. However, as noted, the contractor has resequenced the order
for bringing some air handling units on line because some
spaces--including the exhibit gallery, which was slated to receive
conditioned air first--were not clean enough for the units to
operate. The air handling unit serving the exhibit gallery is now
expected to come on line early in December. Remaining risks
include having sufficient manpower to meet the scheduled dates for
getting the HVAC system fully operational, having sufficiently
clean spaces, and being able to quickly overcome any problems that
may arise in getting the system properly balanced, controlled, and
commissioned, including providing enough manpower without causing
trade stacking.
o Late identification or slow resolution of problems or issues
could delay completion. Historically, the project has experienced
or been at risk of experiencing some delays resulting from slow
decision-making. In addition, some CVC team members believe that
some of the problems that have resulted in delays, such as certain
problems associated with the East Front or with problematic
sequence 1 concrete work could have been identified and addressed
earlier than they were. In responding to these comments, the
sequence 2 contractor said that although earlier identification of
these types of problems is conceptually possible, it is difficult
in practice. Looking forward, we do not believe that the team will
be able to meet its scheduled completion date if it does not
quickly decide on issues; respond to concerns, questions, and
submittals; or resolve problems. In September 2006, AOC told the
CVC team that starting October 1, the architectural contractor
would be decreasing its staff support to the project. In our
opinion, this change increased the risk of slow responses to
design questions or requests for design instructions at a very
critical time, particularly because we have not seen evidence of a
decrease in potential change orders. AOC believes that it will be
able to provide its CVC construction contractors with sufficient
architectural support to respond to appropriate questions or
requests in time to avoid delays. We believe that this situation
needs close monitoring as well as corrective action if problems
arise. AOC has not reported any problems in this area since the
last CVC hearing, and has identified steps in its November 2006
action plan aimed at identifying and resolving design problems
quickly.
Finally, as we noted earlier in our testimony today, AOC's delay
analysis is even more critical given the passage of the sequence 2
September 15, 2006, contract completion date and the need to
obtain a complete facility without further delays and unreasonable
costs, including delay-related costs. 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.
Project�s New Schedule Appears Achievable Only under Certain
Conditions
The October project schedule shows that almost all physical
construction work on the CVC, the East Front, and the expansion
spaces will be completed by spring 2007 and that the pretesting
and final testing of all fire protection, life safety, and related
systems for these areas will be carried out between then and late
October 2007. This schedule reflects the amount of time that AOC's
Chief Fire Marshal said he would need to perform his acceptance
testing, although the CVC team is working to see if certain
aspects of the testing can be done differently to save some time.
The October 2006 schedule also calls for completing the
installation of artifacts in the exhibit gallery by November 30,
2007. However, this schedule does not allow any time for
addressing problems, risks, or uncertainties associated with
obtaining a certificate of occupancy or for preparing for
operations.
Given the uncertainty about how much time will be needed to
pretest the fire protection system, the concerns associated with
the HVAC system, the unknown effectiveness of AOC's recently
identified actions to curtail future schedule slippages, and the
limited amount of time we had to assess the October project
schedule, we do not feel that we are in position to suggest a
definitive project completion date. However, in light of the work
we have done, we do not believe AOC will be able to complete the
project by fall 2007 if the actions it has identified are not
effective in curtailing future schedule slippages. Thus, until we
see that AOC has satisfactorily addressed our schedule-related
concerns, we believe that the project is more likely to be
completed in early 2008 rather than in the fall of 2007.
Recommendations
To minimize the risks associated with the CVC's HVAC system and
the government's ability to get the CVC completed within the
current schedule and cost estimates and to give Congress and us
greater confidence in the CVC team's project schedules from this
point forward, we recommend that the Architect of the Capitol
promptly take the following two actions:
o Work with the rest of the CVC team to ensure that the schedule
for completing and commissioning the HVAC system is realistic,
that all the work necessary for the proper and safe functioning of
the HVAC system--including work in the spaces the air handling
units are to serve--is completed in a timely, well-coordinated
manner, and that sufficient resources will be available to meet
the schedule without creating a trade-stacking problem.
o Carefully consider the contractual remedies available to AOC to
complete all tasks that must precede the start and completion of
final acceptance testing of the CVC's fire protection and life
safety systems within the time necessary to meet the estimated
fall 2007 project completion time frame.
AOC generally agreed with our recommendations.
Project�s Estimated Cost and Funding
Since the Subcommittee's September 21 CVC hearing, we have added
about $8 million to our estimate of the total cost of the CVC
project at completion.11 This increase reflects a rough estimate
of the impact on the project's cost of the 6-week delay associated
with the fire protection system and other scope and design changes
identified during the past 8 weeks; however, the actual costs for
changes are not yet known, and we have not had sufficient time to
fully assess the CVC team's cost estimates incorporated in our
estimate.12 With this approximately $8 million increase, we now
estimate, on the basis of our limited review, that the total cost
of the entire CVC project at completion is likely to be about $592
million without an allowance for risks and uncertainties. We
nevertheless recognize that the project continues to face a number
of uncertainties, including uncertainty over the extent of AOC's
responsibility for the delay-related costs. (We have not updated
our estimate of the project's cost at completion with an allowance
for risks and uncertainties.)
To date, about $531 million has been provided for CVC
construction. This amount includes about $3.9 million that was
made available for either CVC construction or operations13 and has
been approved for CVC construction by the House and Senate
Committees on Appropriations. An earlier cost-to-complete
estimate, prepared for the Subcommittee's March 2006 CVC hearing,
showed that another $26 million in construction funds would be
necessary to reach the previous cost estimate of $556 million,
which did not include an allowance for risks and uncertainties.
AOC has requested this additional $26 million in its fiscal year
2007 budget for CVC construction. AOC has also requested $950,000
in fiscal year 2007 general administration appropriation funds to
provide contractual support for the Chief Fire Marshal's final
acceptance testing of the CVC. During fiscal year 2007, AOC is
also likely to need, but has not yet requested, additional funds
to pay for changes. At the Subcommittee's last CVC hearing, we
roughly estimated that AOC would need an additional $5 million to
$10 million in fiscal year 2007 for changes unless it decides to
use funds slated for other purposes, after obtaining the necessary
congressional approvals. AOC agrees with this rough estimate at
this time and notes that it would likely need additional funding
in fiscal year 2008 to replenish these funds and to cover certain
additional costs if they materialize.
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
September-November 2006
Scheduled Actual
Activity Location completion completion
Install wood ceiling Orientation Theater 10/13/2006 10/24/2006a
panels
CONOP matrix Fire alarm system 10/30/2006 b
Flush steam piping HVAC Steam 10/23/2006 10/31/2006
Relocate kitchen Food Service 10/23/2006 c
exhaust duct
Set cab shell/ Elevator VC # 17 East Front 10/25/2006 d
control panel
Dismantle scaffold Orientation Theater 10/27/2006 10/24/2006e
Finish paint Food Service 10/30/2006 11/6/2006f
Ceiling fabric Congressional Auditorium 10/30/2006 11/15/2006g
Plaster Ceilings West Lobby & Assembly 10/31/2006 h
Install marble wall Exhibit Gallery 11/7/2006 i
stone 1st Third
Resubmit Riser Fire alarm system 11/9/2006 11/9/2006
Diagram
Wall stone Area #1 East Front Principal 11/10/2006 j
Interior cab Elevator VC # 12 Orientation 11/10/2006 d
finishes Theater
Fabric Ceiling West Lobby & Assembly 11/14/2006 k
Panels
Hang Drywall Orientation Lobby 11/14/2006 l
Bulkheads
Mechanically Ready Great Hall AHU # 3 &16 11/15/2006 11/15/2006m
Floor stone Orientation Lobby 11/15/2006 11/15/2006n
Wood wall panels Congressional Auditorium 11/15/2006 o
Source: AOC's September 2006 CVC sequence 2 construction schedule
for the scheduled completion dates and AOC and its construction
management contractor for the actual completion dates.
Note: Reasons for delay, as provided by the sequence 2 contractor,
and explanations, as provided by the sequence 2 contractor and
GAO, are listed in the following notes:
aWhile the ceiling has been completed, the blistered panels will
need to be repaired or replaced.
bContinuing efforts are being made to understand and develop the
sequence of operations (CONOP) matrix requirements. The matrix
must be approved by December 8, 2006, to avoid an impact on the
critical path.
cEnough of the ductwork has been relocated to allow hood
installation to begin. Currently three of the six hoods have been
installed. The balance of hood installation is scheduled to be
complete by November 24, 2006.
dControl panels are set and operational. This activity included
setting cab shells without finishes. The cab vendor decided to
prefinish the cabs rather than to finish the shells on site.
Finished cabs are on site and preparations are being made for
installation this week.
eWhile the scaffold for ceiling installation has been removed,
scaffolding has been erected along the walls in the south theater
to install wood panels. This scaffolding will affect installation
of the stone stair steps.
fThis work is essentially completed.
gCeiling panel installation began on November 9, 2006.
hPlaster ceilings have been completed in the main lobby area and
south assembly room. Hanging of the north assembly room ceiling
began on November 7, 2006.
iInstallation of the unistrut framing was delayed because of
structural design concerns. Additional cross bracing was added to
stiffen the assembly. Wall stone installation is to begin this
week.
jThe work has been delayed because structural steel was added to
support the metal stud wall at the east side of stair #37. Upon
the completion of metal stud wall, the stone work is scheduled to
begin. The revised start date for wall stone on the principal
level is November 30, 2006.
kFabric ceiling panel installation has been delayed because of
delays in necessary preceding East Front work--completion of the
East Front archway stone, ceilings, and escalator installation.
Installation of the fabric panel currently cannot be completed
until the escalator trusses are set to clear the floor area.
Setting of the trusses is currently projected to be completed by
the end of January 2007.
lBecause of above-ceiling conflicts, the work was resequenced to
allow the floor stone installation to proceed ahead of the ceiling
work. Hanging of bulkheads started in the south screening area on
November 2, 2006 and is expected to be completed in November 2006.
mMechanically ready priorities have been resequenced. AHU #1 has
been switched with AHUs #3 and 16, which are now scheduled for
November 15, 2006. AOC's construction management contractor
believes that this activity is essentially complete. AHU #1 is now
scheduled for December 6, 2006.
nThe sequence 2 and construction management contractors expect
this work to be essentially completed by close of business today.
oThe start of wood panel installation is pending humidity control
within the space.
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10Trade 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.
11At the Subcommittee's September 21 CVC hearing, we estimated that the
total cost of the entire CVC project at completion was likely to be about
$584 million without an allowance for risks and uncertainties and about
$596 million with such an allowance--increases of $28 million and $12
million, respectively, over our previous estimates. We also pointed out
that a number of uncertainties, such as the possibility of further delays
associated with the CVC's fire alarm system, could affect our estimates.
12AOC estimated the additional delay-related costs for budgetary purposes
only and did not provide for possible concurrent delays.
13Public Law 108-447, enacted on December 8, 2004, provided that up to
$10.6 million (reduced to $10.5 million by a subsequent budget rescission
of $84,000) 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.
(545049)
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