Capitol Visitor Center: Update on Status of Project's Schedule	 
and Cost as of October 31, 2007 (14-NOV-07, GAO-08-227T).	 
                                                                 
Today's testimony will focus on (1) the Architect of the	 
Capitol's (AOC) construction progress since the last CVC hearing 
on September 25, 2007, and (2) the project's expected cost at	 
completion and funding status. Today's remarks are based on our  
review of schedules and financial reports for the CVC project and
related records maintained by AOC and its construction management
contractor, Gilbane Building Company; our observations on the	 
progress of work at the CVC construction site; and our		 
discussions with the CVC team (AOC and its major CVC		 
contractors), AOC's Chief Fire Marshal, and representatives from 
the U.S. Capitol Police. We also reviewed AOC's construction	 
management contractor's periodic schedule assessments, potential 
change order log, and weekly reports on construction progress. In
addition, we reviewed the contract modifications made to date.	 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-227T					        
    ACCNO:   A77806						        
  TITLE:     Capitol Visitor Center: Update on Status of Project's    
Schedule and Cost as of October 31, 2007			 
     DATE:   11/14/2007 
  SUBJECT:   Accountability					 
	     Construction contracts				 
	     Contract administration				 
	     Contract modifications				 
	     Cost analysis					 
	     Cost overruns					 
	     Facility construction				 
	     Federal facilities 				 
	     Federal funds					 
	     Future budget projections				 
	     Public visitor-centers				 
	     Risk assessment					 
	     Schedule slippages 				 
	     Strategic planning 				 
	     Cost estimates					 
	     Capitol Visitor Center Project			 

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GAO-08-227T

   

     * [1]Summary
     * [2]Construction Is Nearly Complete, but Remaining Risks Could A
     * [3]AOC's Cost Estimate Remains the Same, and Timing of Need for
     * [4]Contacts and Acknowledgments
     * [5]GAO's Mission
     * [6]Obtaining Copies of GAO Reports and Testimony

          * [7]Order by Mail or Phone

     * [8]To Report Fraud, Waste, and Abuse in Federal Programs
     * [9]Congressional Relations
     * [10]Public Affairs

Testimony

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

United States Government Accountability Office

GAO

For Release on Delivery
Expected at 9:00 a.m. EST
Wednesday, November 14, 2007

CAPITOL VISITOR CENTER

Update on Status of Project's Schedule and Cost as of October 31, 2007

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

GAO-08-227T

Madam Chair and Members of the Subcommittee:

I appreciate the opportunity to be here today to assist the Subcommittee
in monitoring progress on the Capitol Visitor Center (CVC) project. My
remarks will focus on (1) the Architect of the Capitol's (AOC)
construction progress since the last CVC hearing on September 25, 2007,1
and (2) the project's expected cost at completion and funding status.

Today's remarks are based on our review of schedules and financial reports
for the CVC project and related records maintained by AOC and its
construction management contractor, Gilbane Building Company; our
observations on the progress of work at the CVC construction site; and our
discussions with the CVC team (AOC and its major CVC contractors), AOC's
Chief Fire Marshal, and representatives from the U.S. Capitol Police. We
also reviewed AOC's construction management contractor's periodic schedule
assessments, potential change order log, and weekly reports on
construction progress. In addition, we reviewed the contract modifications
made to date.

Summary

Since the September 25, 2007, CVC hearing, the project's construction has
progressed, and AOC is still anticipating a November 2008 opening date. In
addition, AOC is soliciting contractor support to assist with fire alarm
acceptance testing and is also considering using other employees to assist
with fire alarm testing. However, risks to the project's schedule remain,
including delays in procuring fire alarm testing assistance and in the
completing the fire alarm testing.

AOC's current estimate of the cost to complete the CVC project's
construction, reported at the September 25, 2007 hearing, is about $621
million. We believe this estimate is reasonable, provided there are no
unusual delays. To date, about $556.2 million has been approved for CVC
construction, and AOC has $6 million more in fiscal year 2007 CVC
appropriations that it plans to use for construction after it obtains
congressional approval to obligate these funds. For fiscal year 2008, AOC
has requested $20 million for CVC construction and believes that it may
need another $39 million.

1GAO, Capitol Visitor Center: Update on Status of Project's Schedule and
Cost as of September 25, 2007, [11]GAO-07-1249T (Washington, D.C.: Sept.
25, 2007).

Construction Is Nearly Complete, but Remaining Risks Could Affect the Scheduled
Opening Date

According to AOC's construction management contractor, in dollar terms,
the overall CVC project is 98 percent complete,2 the same percentage
reported at the September 25 CVC hearing. Twenty-two of the 23
air-handling units are now operational. In addition, 18 of the 19 the
air-handling units necessary for smoke control have been commissioned, and
AOC expects the remaining unit to be commissioned before the final fire
alarm acceptance testing is scheduled to begin.

In August 2007, AOC and the sequence 2 contractor signed a contract
modification that extended the date for completing the majority of the
sequence 2 work from September 15, 2006, to November 15, 2007. Since the
last hearing, the remaining work and site cleanup have continued to
progress across the project. With only 2 weeks left before November 15,
AOC anticipates that the sequence 2 contractor will meet the revised
completion date; however, an extensive punch list of corrective actions
will remain for the contractor to complete before the building's
anticipated opening in November 2008. Making these corrections and
finishing other work scheduled for completion after November 15, 2007,
while simultaneously conducting the final fire alarm acceptance testing
will present challenges to the CVC team. For example, corrective action to
repair ceilings or walls may create excessive dust, which could cause
false fire alarms, disrupt the fire alarm testing schedule, and reduce the
time remaining to prepare for the CVC's startup and operations. AOC has
taken steps to mitigate this risk. Furthermore, delays in the fire alarm
acceptance testing could delay the dates for completing the CVC project's
construction and for opening the CVC project. AOC is currently soliciting
contractor support to assist with the fire alarm testing, but negotiations
are not yet complete. The CVC team is also developing plans for AOC
employees to assist in completing the testing.

As of October 19, 2007, AOC had not issued the September update of its
construction schedule. Its weekly progress reports indicate that although
minor problems have occurred as construction has proceeded, AOC does not
expect any of the problems to delay the substantial completion of sequence
2 work by November 15, 2007, which will allow the fire alarm acceptance
testing to begin. Since the successful completion of the testing is
critical to obtaining a certificate of occupancy for the CVC and preparing
for operations, any delays in starting this testing could place the CVC's
opening in November 2008 more at risk. Additional potential change orders
also pose risks and continue to be identified by the CVC team each month.
AOC and its contractors have continued to work together to address the
number of open (unresolved) potential change orders, and the list of open
orders has remained essentially unchanged. Sustained attention to this
issue is needed to reduce budget uncertainty and to avoid risks to the
project's schedule as new proposed change orders come in. Figure 1
compares the number of outstanding proposed change orders with the number
settled each month.

2In other words, the sequence 2 contractor has received about 98 percent
of the current contract value. This value does not include the costs of
unsettled proposed change orders, potential claims, and work performed
outside the current contract, such as the fire marshal's fire alarm
acceptance testing.

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

AOC's Cost Estimate Remains the Same, and Timing of Need for Additional Funds
Has Not Been Determined

In September, AOC increased its estimate of the cost to complete the CVC
project's construction to about $621 million. The new $621 million
estimate includes, among other things, contingency amounts for delays,
change orders, and remaining uncertainties related to the project's fire
alarm testing.

To date, about $556.2 million has been approved for CVC construction, and
AOC has $6 million more in fiscal year 2007 CVC appropriations that it
plans to use for construction after it obtains congressional approval to
obligate these funds. AOC has requested $20 million in fiscal year 2008
CVC appropriations for construction and estimates, on the basis of its new
project estimate, that it may need an additional $39 million.

Madam Chair, this completes my prepared statement. I would be pleased to
answer any questions that you or Members of the Subcommittee may have.

Contacts and Acknowledgments

For further information about this testimony, please contact Terrell Dorn
at (202) 512-6923. Other key contributors to this testimony include
Shirley Abel, Lindsay Bach, Maria Edelstein, Elizabeth Eisenstadt,
Jeanette Franzel, Jackie Hamilton, Bradley James, David Merrill, and
Joshua Ormond.

(545065)

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