Capitol Visitor Center: Update on Status of Project's Schedule	 
and Cost as of February 7, 2008 (07-FEB-08, GAO-08-475T).	 
                                                                 
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-08-475T					        
    ACCNO:   A80568						        
  TITLE:     Capitol Visitor Center: Update on Status of Project's    
Schedule and Cost as of February 7, 2008			 
     DATE:   02/07/2008 
  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-08-475T

   

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United States Government Accountability Office:
GAO: 

Testimony: 

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

For Release on Delivery: 
Expected at 10:00 a.m. EST:
Thursday, February 7, 2008: 

Capitol Visitor Center: 

Update on Status of Project's Schedule and Cost as of February 7, 2008: 

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

GAO-08-475T: 

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 November 14, 
2007,[Footnote 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 November 14, 2007, CVC hearing, the project's construction 
has progressed, and AOC is still anticipating an early November 2008 
opening date. But risks to the project's schedule remain in several 
time-critical activities, especially fire alarm acceptance testing, 
which, under the current schedule, must be completed on time for the 
CVC to open on time. Delays in work on the East Front, the Exhibit 
Gallery, and the House Hearing Room also pose risks to the project's 
schedule, as do the many items on the project's punch list and a steady 
number of proposed change orders. At this time, however, AOC does not 
expect the punch list items or the proposed change orders to affect the 
project's completion date. 

AOC's current estimate of the cost to complete the CVC project's 
construction, first 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 $566.2 million has been 
approved for CVC construction, and AOC has $16.2 million more in fiscal 
year 2008 CVC appropriations that it plans to use for construction 
after it obtains congressional approval to obligate these 
funds.[Footnote 2] AOC has estimated that it will need an additional 
$5.9 million in fiscal year 2008 to fund construction, and it has 
requested $31.1 million in fiscal year 2009 funds for CVC construction. 
Based on its current cost-to-complete estimate, AOC believes it may 
need an additional $2 million to complete the project in fiscal year 
2009. 

Construction Is Nearly Complete, but Risks Remain: 

According to AOC's construction management contractor, in dollar terms, 
the overall CVC project is 99 percent complete,[Footnote 3] as compared 
with 98 percent reported at the November 2007 CVC hearing. Yet even at 
this late stage in the construction process, delays in a number of 
time-critical activities related to the fire alarm system pose risks to 
the project's schedule. 

Work on the project's current critical path,[Footnote 4] fire alarm 
acceptance testing, is underway and is within a week of being on 
schedule. Since the last CVC hearing, delays have occurred in this 
activity because of required changes in the fire alarm system's planned 
sequence of operations. However, prompt attention by the CVC team 
reduced the time lost to 3 days and AOC still expects the CVC to be 
ready to open on November 3, 2008. Moreover, the opening could be 
sooner if AOC reduced the amount of fire alarm acceptance testing 
required, as AOC's consultants have suggested. Nonetheless, AOC's fire 
marshal has determined that the fire alarm acceptance testing will 
proceed as planned. 

Delays in less time-critical areas such as the East Front, the Exhibit 
Gallery and the House Hearing Room also continued. For example, in the 
East Front Upper Levels, the planned work schedule slipped by 4 weeks 
after AOC determined that additional sprinkler heads would be needed 
and other design changes were required. Work in the Exhibit Gallery was 
delayed by 3 weeks when AOC did not receive replacement pieces for the 
glass floor as scheduled. 

Delays in addressing items on the project's extensive punch list pose a 
further risk to the CVC's schedule and call for continued prompt 
attention by AOC and its contractors. For example, work in the Exhibit 
Gallery may fall behind schedule while AOC and its design team address 
deficiencies in the Wall of Aspirations, which failed a test of its 
fire protection system. In addition, damage to pavers on the East Front 
plaza has not been repaired, and extensive work may be required to 
prevent further damage. Efforts to relocate PEPCO electrical vaults, 
which are too high for the current landscaping plan, are still 
unresolved and may delay completion of the work in that area by 5 
months. 

Proposed change orders continue to pose risks to the project's schedule 
and to be identified by the CVC team each month. AOC and its 
contractors have continued to work together to reduce the number of 
open (outstanding) proposed change orders, but the number of open 
orders has remained essentially unchanged. Sustained attention to this 
issue is needed to reduce uncertainty about the project's costs and to 
avoid risks to the project's schedule as new proposed change orders 
come in. Figure 1 compares the number of outstanding proposed change 
orders with the number settled each month. 

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

[See PDF for image] 

This figure is a multiple line graph illustrating the Outstanding and 
Settled Proposed Change Orders by Month, March 2006 through December 
2007. The vertical axis of the graph represents number from 0 to 500. 
The horizontal axis of the graph represents monthly dates from March 
31, 2006 to December 31, 2007. Lines depict the following change 
orders: 

Outstanding PCOs: between approximately 380 on March 31, 2006 and 
approximately 450 on December 31, 2007; 

PCOs settled this month: approximately 40-60 per month. 

Source: AOC's construction management contractor. 

[End of figure] 

AOC's Cost Estimate Remains the Same, and Additional Funds Will Be 
Needed: 

In September 2007, AOC increased its estimate of the cost to complete 
the CVC project's construction to about $621million, which remains 
unchanged. The $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 $566.2 million has been approved for CVC construction, 
and AOC has $16.2 million more in fiscal year 2008 CVC appropriations 
that it plans to use for construction after it obtains congressional 
approval to obligate these funds. AOC has estimated that it will need 
an additional $5.9 million in fiscal year 2008 to fund construction, 
and it has requested $31.1 million in fiscal year 2009 CVC 
appropriations for construction. Based on its current cost-to-complete 
estimate, AOC believes it may need an additional $2 million to complete 
the project in fiscal year 2009. 

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. 

[End of section] 

Footnotes: 

[1] GAO, Capitol Visitor Center: Update on Status of Project's Schedule 
and Cost as of October 31, 2007, GAO-08-227T (Washington, D.C.: Nov. 
14, 2007). 

[2] For fiscal year 2008, AOC received $28,753,000 (before rescission) 
in appropriations for the CVC project. Pub. L. No. 110-161. Of that 
amount, AOC is allowed, but not required, to use up to $8.5 million for 
operations. AOC is currently planning to use the $8.5 million for 
operations. 

[3] In other words, the sequence 2 contractor has received about 99 
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. 

[4] The critical path is the single longest path of activities through 
a project's schedule. Each day of delay in the critical path could 
delay the completion of the entire project. 

[End of section] 

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