Capitol Visitor Center: Update on Status of Project's Schedule	 
and Cost as of May 22, 2008 (22-MAY-08, GAO-08-811T).		 
                                                                 
This testimony is 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) and AOC's Chief Fire Marshal. We also 
reviewed AOC's construction management contractor's periodic	 
schedule assessments, proposed change order log, and weekly	 
reports on construction progress.				 
-------------------------Indexing Terms------------------------- 
REPORTNUM:   GAO-08-811T					        
    ACCNO:   A82170						        
  TITLE:     Capitol Visitor Center: Update on Status of Project's    
Schedule and Cost as of May 22, 2008				 
     DATE:   05/22/2008 
  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-08-811T


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

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 10:00 a.m. EDT: 

Thursday, May 22, 2008: 

Capitol Visitor Center: 

Update on Status of Project's Schedule and Cost as of May 22, 2008: 

Statement of Terrell G. Dorn, Director, 

Physical Infrastructure Issues: 

GAO-08-811T: 

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 April 15, 
2008,[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) 
and AOC's Chief Fire Marshal. We also reviewed AOC's construction 
management contractor's periodic schedule assessments, proposed change 
order log, and weekly reports on construction progress. 

Construction Is Nearly Complete, but Risks Remain: 

Since the April 15, 2008, CVC hearing, the project's construction and 
fire alarm acceptance testing have moved forward, and despite continued 
delays in certain CVC and expansion space work, AOC still believes that 
the project will be ready to open in November 2008. According to AOC's 
construction management contractor, in dollar terms, the overall CVC 
project remains 99 percent complete.[Footnote 2] However, risks to the 
project's schedule remain in several time-critical activities, 
including the fire alarm acceptance testing. Many punch list[Footnote 
3] items also remain to be completed, and a steady number of proposed 
change orders have to be resolved. At this time, however, AOC does not 
expect the punch list items or the proposed change orders to affect the 
project's completion date. 

Since the last hearing, work on the project's current critical 
path,[Footnote 4] fire alarm acceptance testing, has continued. For 
example, the fire marshal has begun testing the building's smoke 
exhaust system. Although some difficulties have occurred during this 
testing, no new significant issues have emerged. AOC still expects to 
receive a temporary certificate of occupancy for the project on or 
before July 31, 2008. We reviewed the construction management 
contractor's April 2008 schedule analysis, which indicates that the 
dates for completing the remaining sequence 2 construction and the 
House and Senate expansion spaces have continued to slip and are now 
expected to extend into July 2008. According to the construction 
management contractor, this remaining construction will not affect the 
completion of fire alarm testing or AOC's receipt of the temporary 
certificate of occupancy. 

Once AOC has received the temporary certificate of occupancy, efforts 
to complete the remaining construction and correct punch list items 
may, however, be disruptive to congressional organizations that are 
concurrently moving into the building. Consequently, such efforts will 
require extensive coordination by AOC. For example, access to elevators 
or certain parts of the building may be limited, and repairs may be 
very noisy. The CVC team has gradually reduced the number of punch list 
items, which we have cited at the last several hearings. According to 
AOC, the number of punch list items has been reduced from over 15,000 
to about 7,000. The exact number of punch list items is uncertain 
because multiple punch lists are now being used. For example, the fire 
marshal and the Office of Compliance are using separate lists to 
document new items from ongoing inspections. Unless AOC carefully 
reviews these new punch lists to separate true construction 
deficiencies from requests by project stakeholders for new work, there 
is a risk that increases in the project's scope could increase the 
project's cost. Already, Office of Compliance inspectors have 
identified several items they would like AOC to change, even though the 
items comply with the construction contract and are not in violation of 
applicable building codes. 

In July 2005, we reported that a number of pavers were 
damaged.[Footnote 5] At the last hearing, we reported that damage to 
pavers on the East Front plaza had not been repaired and that AOC had 
determined that substantial rework of the plaza may be 
required.[Footnote 6] According to AOC's independent consultant, 
problems in addition to the chipped pavers that may need to be 
corrected include inadequate drainage, improper materials for the 
pavers' setting bed, and a lack of adequate expansion joints. Also, 
according to AOC, repairing these deficiencies would require 
significant effort and at this time, there is no reliable estimate of 
when repairs will be complete. AOC is discussing these issues with the 
independent consultant and the plaza designer but has not yet 
determined how much the rework will cost and who will pay for it. 

Each month, the CVC team continues to identify proposed change orders. 
AOC and its contractors have continued to work together to reduce the 
number of open (outstanding) proposed change orders, and the number of 
open orders has declined since our last statement. Sustained attention 
to this issue is, however, needed to reduce uncertainty about the 
project's costs. 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 April 2008: 

This figure is a combination line graph showing outstanding and settled 
proposed change orders my month, March 2006 through April 2008. The X 
axis represents the date, and the Y axis represents the number of PCOs. 
One line represents Outstanding PCOs, and the other line represents 
PCOs settled this month. 

Date: March 31, 2006; 
Outstanding PCOs: 336; 
PCOs settled this month: 27. 

Date: April 30, 2006; 
Outstanding PCOs: 360; 
PCOs settled this month: 32. 

Date: May 31, 2006; 
Outstanding PCOs: 372; 
PCOs settled this month: 24. 

Date: June 30, 2006; 
Outstanding PCOs: 340; 
PCOs settled this month: 23. 

Date: July 31, 2006; 
Outstanding PCOs: 403; 
PCOs settled this month: 26. 

Date: August 31, 2006; 
Outstanding PCOs: 367; 
PCOs settled this month: 19. 

Date: September 30, 2006; 
Outstanding PCOs: 369; 
PCOs settled this month: 19. 

Date: October 31, 2006; 
Outstanding PCOs: 374; 
PCOs settled this month: 26. 

Date: November 30, 2006; 
Outstanding PCOs: 391; 
PCOs settled this month: 23. 

Date: December 31, 2006; 
Outstanding PCOs: 417; 
PCOs settled this month: 10. 

Date: January 31, 2007; 
Outstanding PCOs: 445; 
PCOs settled this month: 29. 

Date: February 28, 2007; 
Outstanding PCOs: 456; 
PCOs settled this month: 16. 

Date: March 31, 2007; 
Outstanding PCOs: 421; 
PCOs settled this month: 28. 

Date: April 30, 2007; 
Outstanding PCOs: 444; 
PCOs settled this month: 28. 

Date: May 31, 2007; 
Outstanding PCOs: 451; 
PCOs settled this month: 49. 

Date: June 30, 2007; 
Outstanding PCOs: 443; 
PCOs settled this month: 35. 

Date: July 31, 2007; 
Outstanding PCOs: 437; 
PCOs settled this month: 21. 

Date: August 31, 2007; 
Outstanding PCOs: 432; 
PCOs settled this month: 54. 

Date: September 30, 2007; 
Outstanding PCOs: 432; 
PCOs settled this month: 33. 

Date: October 31, 2007; 
Outstanding PCOs: 451; 
PCOs settled this month: 39. 

Date: November 30, 2007; 
Outstanding PCOs: 425; 
PCOs settled this month: 18. 

Date: December 31, 2007; 
Outstanding PCOs: 425; 
PCOs settled this month: 21. 

Date: January 31, 2008; 
Outstanding PCOs: 398; 
PCOs settled this month: 30. 

Date: February 29, 2008; 
Outstanding PCOs: 413; 
PCOs settled this month: 42. 

Date: March 31, 2008; 
Outstanding PCOs: 385; 
PCOs settled this month: 41. 

Date: April 30, 2008; 
Outstanding PCOs: 333; 
PCOs settled this month: 37. 

[See PDF for image] 

Source: AOC's construction management contractor. 

[End of figure] 

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

AOC's current estimate of the cost to complete the CVC project's 
construction, first reported in September 2007, remains about $621 
million. We believe this estimate is realistic and contains a 
sufficient allowance for contingencies, provided there are no 
unexpected delays over the next 2 months, when construction is 
scheduled to be complete. To date, about $569.5 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 7] In addition, AOC has estimated that it will still 
need an additional $2.6 million in fiscal year 2008 to fund CVC 
construction. Furthermore, AOC has requested $31.1 million in fiscal 
year 2009 funds for CVC construction. Given its current cost-to- 
complete estimate, AOC may need an additional $2 million in fiscal year 
2009 to complete the project. 

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 on (202) 512-6923 or [email protected]. Other key contributors to this 
testimony include Shirley Abel, Michael Armes, Lindsay Bach, Maria 
Edelstein, Elizabeth Eisenstadt, Jeanette Franzel, Jackie Hamilton, 
Kara Patton, and Joshua Ormond. 

[End of section] 

Footnotes: 

[1] GAO, Capitol Visitor Center: Update on Status of Project's Schedule 
and Cost as of April 15, 2008, GAO-08-677T (Washington, D.C.: Apr. 15, 
2008). 

[2] 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 sequence 2 contract, such as the fire 
marshal's fire alarm acceptance testing. 

[3] A punch list identifies tasks, usually minor, to be completed at 
the end of a project. 

[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. 

[5] GAO, Capitol Visitor Center: Update on Status of Project's Schedule 
and Cost, GAO-05-910T (Washington, D.C.: July 14, 2005). 

[6] GAO-08-677T. 

[7] 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. 

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