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 Projectï¿½s 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 Projectï¿½s
			  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
			  AOCï¿½s 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.
			  
			  Projectï¿½s 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.
			  
			  Projectï¿½s 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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