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entitled 'Courthouse Construction: Information on Project Cost and Size 
Changes Would Help to Enhance Oversight' which was released on July 29, 
2005. 

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Report to Congressional Requesters: 

June 2005: 

Courthouse Construction: 

Information on Project Cost and Size Changes Would Help to Enhance 
Oversight: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-673]: 

GAO Highlights: 

Highlights of GAO-05-673, a report to congressional requesters: 

Why GAO Did This Study: 

The General Services Administration (GSA) and the federal judiciary are 
in the midst of a multibillion-dollar courthouse construction 
initiative aimed at addressing the housing needs of federal district 
courts and related agencies. From fiscal year 1993 through fiscal year 
2005, Congress appropriated approximately $4.5 billion for 78 
courthouse construction projects. 

GAO (1) compared estimated and actual costs for recently completed 
courthouse projects and determined what information GSA provided to 
Congress on changes to proposed courthouse projects, (2) identified 
factors that contributed to differences between the estimated and 
actual costs of seven projects selected for detailed review, and (3) 
identified strategies that were used to help control the costs of the 
seven selected projects. 

What GAO Found: 

The actual costs of courthouse construction projects exceeded the 
estimated costs submitted to Congress at the design and construction 
phases by an average of 17 percent and 5 percent, respectively, and the 
reasons for the cost changes were not consistently explained. The 
actual costs were closer to the estimates provided at the construction 
phase, but as the figure shows, the actual cost still varied widely 
from the estimate for some projects. Both the estimated cost and the 
proposed building size often changed between the two funding requests. 
GSA did not always indicate that changes had occurred or explain the 
reasons for the changes. Including this information would be consistent 
with leading practices in capital decision making. 

For the seven projects GAO reviewed in detail, most cost changes 
resulted from changes to the projects scope or from postponing the 
start of construction. For example, scope changes called for by 
security requirements and revisions to the U.S. Marshals Services 
Design Guide increased the costs of some projects. Postponing the start 
of construction also increased costs because of inflation and changes 
in local market conditions. Factors that led to postponing construction 
included difficulties with site acquisition and GSA receiving funding 
later than anticipated. 

GSA used several strategies to help reduce or control costs for the 
seven projects, including value engineering, modified contracting 
methods, and involving tenant agencies. Value engineering was used 
during design on all projects, and in some cases, resulted in the use 
of less expensive materials to finish the courthouse interiors, but in 
other cases resulted in changes that could increase the long-term cost 
of operating the buildings. Some project managers used modified 
contracting methods to control costs by reducing the time between the 
design and construction phases. Project managers also used a variety of 
approaches for involving tenant agencies in decisions about the 
building design and informing them about the progress of the project. 

Comparison of Actual and Estimated Courthouse Project Costs: 

[See PDF for image]

[End of figure]

What GAO Recommends: 

To improve the usefulness of the information on courthouse construction 
projects that GSA provides to Congress, GAO recommends that GSA, when 
requesting funding for those projects, identify and explain changes in 
estimated costs and building size from the information provided to 
Congress in prior project prospectuses or fact sheets. GSA concurred 
with our recommendation. 

www.gao.gov/cgi-bin/getrpt?GAO-05-673. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Mark L. Goldstein at 
(202) 512-2834 or goldsteinm@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Actual Costs of Courthouse Projects Can Vary Significantly from 
Estimates Provided to Congress, and Changes Are Not Consistently 
Explained: 

Changes in Scope and Postponement of Planned Construction Start Dates 
Resulted in Cost Changes for Selected Projects: 

GSA Used Several Strategies to Reduce and Control Costs of Selected 
Projects: 

Recent GSA Program Improvements: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendixes: 

Appendix I: Scope and Methodology: 

Appendix II: Timelines and Costs of Courthouse Projects Completed Since 
1998: 

Appendix III: Comments from the General Services Administration: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Changes between Estimated and Actual Costs for Seven Projects: 

Table 2: Factors That Caused Scope Changes for Seven Selected Projects: 

Table 3: Summary of Estimated and Actual Costs: 

Figures: 

Figure 1: Development and Approval Process for Funding a Typical 
Courthouse: 

Figure 2: Breakdown of Estimates Provided to Congress by GSA for 38 
Projects: 

Figure 3: Comparison of Actual and Estimated Costs: 

Figure 4: Changes between Design and Construction Funding Requests: 

Figure 5: Historic Preservation for the Gulfport Courthouse Project: 

Figure 6: Timelines of Courthouse Construction Projects: 

Abbreviations: 

AOUSC: Administrative Office of the U.S. Courts: 

CCP: Center for Courthouse Programs: 

ESPC: Energy Savings and Performance Contracts: 

GSA: General Services Administration: 

OMB: Office of Management and Budget: 

USMS: U.S. Marshals Service: 

Letter June 30, 2005: 

The Honorable James M. Inhofe: 
Chairman, Committee on Environment and Public Works: 
United States Senate: 

The Honorable Christopher S. Bond: 
Chairman, Subcommittee on Transportation and Infrastructure: 
Committee on Environment and Public Works: 
United States Senate: 

The General Services Administration (GSA) and the federal judiciary are 
in the midst of a multibillion-dollar courthouse construction program 
aimed at addressing the housing needs of federal district courts and 
related agencies. From fiscal year 1993 through fiscal year 2005, 
Congress appropriated approximately $4.5 billion for 78 courthouse 
construction projects.[Footnote 1] The judiciary's current 5-year plan 
(covering fiscal years 2005 through 2009) identifies 57 new projects 
that are expected to cost $3.8 billion. 

In response to concerns that GSA's Inspector General and we have raised 
over the years, GSA and the judiciary have taken actions to manage and 
control courthouse construction costs. However, courthouse projects 
continue to be costly, and increasing rents and budgetary constraints 
have given the judiciary further incentive to control their costs. The 
judiciary pays rent to GSA for the use of the courthouses, which GSA 
owns, and the proportion of the judiciary's budget that goes to rent 
has increased as the judiciary's space requirements have grown. 
Additionally, in fiscal year 2004, the judiciary faced a budgetary 
shortfall that required it to cut its administrative costs and reduce 
staff by 6 percent. In September 2004, the judiciary announced a 2-year 
moratorium on new courthouse construction projects as part of an effort 
to address its increasing operating costs and budgetary constraints. 
During this time, among other things, the judiciary plans to review its 
space needs and standards in an effort to reduce the costs of its 
space. While some of the 57 projects in the current 5-year plan and 
their costs may change as a result of the moratorium, the judiciary 
believes that it will continue to need additional space to accomplish 
its mission. 

To assist the committees with their oversight of the courthouse 
construction program, you asked us to review courthouse construction 
project costs. As a result, we (1) compared estimated and actual costs 
for recently completed courthouse projects and determined what 
information GSA provided to Congress on changes to the proposed 
courthouse projects, (2) identified factors that contributed to 
differences between the estimated and actual costs of selected 
projects, and (3) identified strategies that were used to help control 
the costs of the selected projects. To do this work, we reviewed 
project documents submitted to Congress and obligations data from GSA's 
budget office for 38 projects completed since 1998. For each project, 
we compared the actual cost, including claims, with the estimated total 
project cost that GSA provided to Congress, typically when it requested 
funding for the project's design and construction. GSA generally 
requests funding in two phases--initially for the design of the project 
and then later for the project's construction--and provides Congress 
with an estimate of the project's total cost with each request. We then 
selected seven completed courthouses for a detailed review to identify 
factors that affected costs and the strategies used to help control 
them. The seven courthouses we reviewed were located in Albany, 
Georgia; Cleveland, Ohio; Denver, Colorado; Erie, Pennsylvania; 
Gulfport, Mississippi; Las Vegas, Nevada; and Seattle, Washington. We 
selected these courthouses to include a range of cost changes, sizes, 
and geographic locations. We visited the courthouses, reviewed relevant 
project files, and interviewed GSA project managers and others involved 
in the projects. We also discussed our work with judiciary officials, 
including Administrative Office of the U.S. Courts (AOUSC) officials 
and judges. We determined that the project cost data were reliable for 
the purposes of our review. We conducted our work from July 2004 
through April 2005 in accordance with generally accepted government 
auditing standards (see app. I for more information on our scope and 
methodology). 

Results in Brief: 

The actual costs of courthouse construction projects exceeded the 
estimated costs submitted to Congress at the design and construction 
phases by an average of 17 percent and 5 percent, respectively, and the 
reasons for the cost changes were not consistently explained in GSA's 
documents. Specifically, the actual costs for courthouse construction 
projects completed since fiscal year 1998 ranged from 23 percent below 
to 115 percent above the first cost estimates provided to 
Congress.[Footnote 2] The actual costs were closer to the estimates 
provided at the second key point, when funds were requested for 
construction, than they were to the design phase estimates, but the 
actual costs still ranged from 25 percent below to 52 percent above the 
construction phase estimates.[Footnote 3] Both the estimated project 
cost and the proposed building size, described in the prospectus or 
fact sheet submitted to Congress with the request for construction 
funding, often differed from the information contained in earlier 
design phase documents. However, GSA did not always indicate that 
changes had occurred or explain the reasons for the changes. As a 
result, changes to the courthouse projects that could have increased 
costs might not have been apparent to congressional decision makers. 

For the seven projects we reviewed in detail, most cost changes 
resulted from changes in the scope of the project or from postponing 
the start of construction. We found that changes to the scope of these 
projects often resulted in cost changes. For example, changes called 
for by security requirements and revisions to the U.S. Marshals 
Service's Design Guide increased the costs of some projects. We also 
found that postponing the start of construction increased the 
likelihood of cost increases due to inflation and changes in local 
market conditions. Factors that led to postponing construction included 
difficulties with site acquisition and GSA receiving funding later than 
anticipated. We did not find that departures from the U.S. Courts 
Design Guide (Design Guide), which sets standards for courthouse 
construction, were a major factor in project cost increases. 

For the seven projects we reviewed in detail, GSA used several 
strategies to help reduce or control costs, such as value engineering 
(a process to identify potential cost-saving changes), modified 
contracting methods, and a variety of approaches for involving and 
communicating with tenant agencies. GSA used value engineering during 
the design of all seven projects to help control costs. Many of the 
value engineering changes resulted in the use of less expensive 
materials to finish the interior of the courthouses. Some other 
changes, such as the removal of a window washing platform, could 
increase the future operating costs of the buildings. Some project 
managers used modified contracting methods in an effort to control 
costs by reducing the time between the design and construction phases. 
This strategy reduced the risk that changes in tenants' requirements 
and inflation could increase costs. In keeping with capital project 
leading practices, GSA project managers also used a variety of 
communication tools to involve project stakeholders in decisions about 
the building design and keep them informed about the progress of the 
project. For example, each project manager had a full-size model of a 
district courtroom built before construction began to solicit judges' 
and other stakeholders' comments and input. Changes to the design and 
layout of the courtrooms were made at this point, thereby helping to 
control costs by minimizing changes during construction. 

We are recommending that GSA clearly identify and explain changes in 
estimated project costs and building size to improve the usefulness of 
project information that GSA provides to Congress. GSA commented on a 
draft of this report and concurred with our findings and 
recommendation. GSA and AOUSC also provided technical clarifications, 
which we have incorporated in this report as appropriate. 

Background: 

The judiciary and GSA are responsible for managing the multibillion- 
dollar federal courthouse construction program, which is designed to 
address the judiciary's long-term facility needs. AOUSC, the 
judiciary's administrative agency, works with the nation's 94 judicial 
districts to identify and prioritize needs for new and expanded 
courthouses. Since fiscal year 1996, AOUSC has used a 5-year plan to 
prioritize new courthouse construction projects, taking into account a 
court's need for space, security concerns, growth in judicial 
appointments, and operational inefficiencies that may exist. The Design 
Guide specifies the judiciary's criteria for designing new court 
facilities and sets the space and design standards for courthouse 
construction. First published in 1991, the Design Guide has been 
revised several times to address budgetary considerations, 
technological advancements, and other issues. 

GSA has been using AOUSC's 5-year plan since fiscal year 1996 to 
develop requests for both new courthouses and expanded court 
facilities. GSA also prepares feasibility studies to assess various 
courthouse construction alternatives and serves as the central point of 
contact with the judiciary and other stakeholders throughout the 
construction process. For courthouses that are selected for 
construction, GSA prepares detailed project descriptions called 
prospectuses.[Footnote 4] The prospectus includes the justification, 
location, size, and estimated cost of the new or annexed facility. GSA 
typically submits two prospectuses to Congress to request authorization 
and funding.[Footnote 5] The first prospectus, often called the site 
and design prospectus, outlines the scope and estimated costs of the 
project at the outset and typically requests authorization and funding 
to purchase the site for and design of the building. The second 
prospectus, often called the construction prospectus, outlines the 
scope and estimated costs of the project as it enters the construction 
phase and typically requests authorization and funding for 
construction, as well as additional funding if needed for site and 
design. At the request of Congress or when additional authority and 
funding are required, GSA may also provide additional prospectuses or 
fact sheets that contain the project's estimated total cost. 

GSA requests funding for courthouses as part of the President's annual 
budget request to Congress. Once Congress authorizes and appropriates 
funds for the project, GSA refines the project budget and selects 
private-sector firms for the design and construction work through a 
competitive procurement process. GSA also manages the construction 
contract and oversees the work of the construction contractor. If 
disputes arise between GSA and the contractor that cannot be resolved, 
the contractor has the option of filing a claim against the federal 
government. Figure 1 illustrates the process for planning, approving, 
and constructing a courthouse project. 

Figure 1: Development and Approval Process for Funding a Typical 
Courthouse: 

[See PDF for image]

Note: This figure shows the typical process for a project procured 
through the design-bid-build method. 

[A] Courthouse projects are financed through the Federal Buildings Fund 
(FBF), a revolving fund that is used to fund GSA real property 
activities with rent from tenant agencies. The President's annual 
budget request to Congress proposes spending from the FBF. GSA submits 
detailed project descriptions called prospectuses to Congress as part 
of its Capital Investment Program. Prospectuses request authorization 
and funding for new construction and repair and alteration projects. 

[End of figure]

GSA and the judiciary have implemented a number of initiatives since 
fiscal year 1995 to improve the management of the courthouse 
construction program. These initiatives are consistent with leading 
practices that we have recognized in prior reports, including the use 
of project management tools and communication with 
stakeholders.[Footnote 6] To improve comprehensive planning, the 
judiciary implemented an annually updated 5-year plan to prioritize its 
courthouse projects and revised its Design Guide to include new 
criteria intended to encourage cost consciousness. 

In 1995, GSA established the Courthouse Management Group, which was 
reorganized in 2003 as the Center for Courthouse Programs (CCP), to 
serve as a central point of contact for the judiciary, GSA's field 
offices, the Office of Management and Budget (OMB), and Congress. CCP's 
responsibilities include reviewing and finalizing prospectuses before 
they are submitted to OMB, developing cost benchmarks and comparing new 
projects' cost estimates with these benchmarks, and determining whether 
proposed courthouse designs conform to the Design Guide's standards. 
GSA also established three programs--the Project Management Center of 
Expertise and the Design and Construction Excellence programs--to share 
project management innovations and provide opportunities for peer 
review during the design and construction phases. 

To provide for accountability and oversight throughout a project, GSA 
uses a benchmarking system at the start of the design process to 
develop the first estimate of the project's construction cost. This 
system computes the estimated cost of the building by comparing it to 
similarly sized courthouses and adjusts for differences in local market 
conditions and the number of years expected to complete the project. 
The benchmark is used to estimate the construction costs that will be 
submitted in the prospectus. To help ensure that courthouse projects 
can be built within authorized budgets, GSA develops independent cost 
estimates for each new courthouse at three milestone dates--during the 
preliminary planning, design development, and construction document 
phases. GSA also facilitates stakeholders' involvement, another 
recognized leading practice, by encouraging regular partnership 
meetings between the judiciary and GSA and by using courtroom mock-ups 
to encourage greater judicial feedback on the design of the courthouse 
facilities. 

Since the courthouse construction program began in the early 1990s, 
budgetary constraints faced by GSA and the courts have affected the 
program's progress, putting some planned courthouse construction 
projects on hold for extended periods. In response to recommendations 
by the 1993 National Performance Review, GSA initiated a "time-out and 
review" of all prospectus-level new construction projects, including 
courthouse projects, in 1993 and 1994. During this time-out and review, 
GSA reevaluated the costs of new construction projects to ensure that 
proposed projects were justified and cost effective and that 
alternatives had been adequately considered. Funding requests for 
courthouse projects were not included in the President's budget in 4 of 
the last 10 fiscal years (1998, 1999, 2000, and 2004). Congress did not 
provide funding for courthouse projects in fiscal years 1998 and 2000. 
Most recently, in September 2004, the Judicial Conference adopted a 2- 
year courthouse construction moratorium on planning, authorizing, and 
budgeting courthouse construction projects. This moratorium affects 42 
out of the 57 projects listed on the judiciary's 5-year plan. According 
to judiciary officials, the moratorium was necessary to seek remedies 
for its own budgetary shortfalls, resulting in part from the increase 
in the total rent it pays to GSA for the space it occupies. According 
to the judiciary, rent currently accounts for just over 20 percent of 
its operating budget and is expected to increase to over 25 percent of 
its operating budget in fiscal year 2009 when the costs of new court 
buildings already under way are included. During this moratorium, AOUSC 
officials said that they plan to reevaluate the courthouse construction 
program, including reassessing the size and scope of projects in the 
current 5-year plan, reviewing the Design Guide's standards, and 
reviewing the criteria and methodology used to prioritize projects. 
Judiciary officials also said that they plan to reevaluate their space 
standards in light of technological advancements and opportunities to 
share space and administrative services. 

Actual Costs of Courthouse Projects Can Vary Significantly from 
Estimates Provided to Congress, and Changes Are Not Consistently 
Explained: 

The actual costs for courthouse construction projects completed since 
fiscal year 1998 varied from the estimates provided to Congress at the 
design and construction phases. As expected, the variation was greater, 
on average, for the design phase estimates than for the later, more 
refined construction phase estimates. For many projects, the estimated 
cost and proposed building size changed between the design and 
construction phases, but GSA often did not indicate that these changes 
had occurred or explain the reasons for them in the prospectuses and 
fact sheets it supplied to Congress. 

As shown in figure 2, GSA provided Congress with at least two separate 
total cost estimates for 24 of the 38 projects. Of the remaining 14 
projects, GSA provided Congress with a single, total-cost estimate for 
11 of the projects and provided no formal estimate prior to the 
appropriation of funds for 3 of the projects. The single estimates were 
for design-build projects, for which all funding was requested at one 
time, or for projects for which GSA did not provide a total project 
cost estimate when requesting funds for design. In all, for the 38 
projects we reviewed, GSA provided Congress with a total project cost 
estimate at the design phase for 27 projects and at the construction 
phase for 32 projects. The project cost estimates that GSA provides to 
Congress typically include all costs associated with acquiring the site 
and designing and constructing the courthouse.[Footnote 7] These 
estimates do not include estimates for items that the tenant agencies 
fund for the new courthouse, such as space alterations above the 
standard normally provided by GSA. 

Figure 2: Breakdown of Estimates Provided to Congress by GSA for 38 
Projects: 

[See PDF for image]

Notes: Estimate provided at design for 27 projects. 

Estimate provided at construction for 32 projects. 

[End of figure]

For the 27 projects that had a total cost estimate provided to Congress 
at the design phase, the actual cost, including claims, exceeded the 
estimate by an average of 17 percent and ranged from 23 percent below 
to 115 percent above the estimate.[Footnote 8] The actual cost compared 
more favorably with the estimate at the construction phase, which is 
provided to Congress an average of 2 years after the initial design 
phase estimate. This improved accuracy is expected because more 
information is available to estimate the cost of the project as its 
design moves forward and becomes more fully defined. For the 32 
projects that had a total cost estimate provided to Congress at the 
construction phase, the actual cost exceeded the estimate by an average 
of 5 percent and ranged from 25 percent below to 52 percent above the 
estimated cost. The actual cost exceeded this estimate by more than 10 
percent for 9 of these 32 projects. The construction industry commonly 
uses 10 percent as a benchmark for the expected variance between the 
actual cost and the construction estimate. Figure 3 illustrates the 
numbers of projects whose actual costs fell short of or exceeded 
estimates at both the design and construction phases. See appendix II 
for additional details on the estimated project costs provided to 
Congress and the actual costs for all projects we examined. 

Figure 3: Comparison of Actual and Estimated Costs: 

[See PDF for image] 

[End of figure] 

The Public Buildings Act of 1959, as amended, requires GSA to seek 
approval from Congress if the estimated maximum expenditures for a 
project exceed the amount appropriated for the project by more than 10 
percent. We found that GSA obtained approval from Congress for those 
projects where the estimated cost exceeded appropriated amounts by more 
than 10 percent. 

Project cost estimates and proposed building sizes often changed 
between GSA's submissions to Congress of the design and construction 
phase documents. According to prospectuses and fact sheets provided to 
Congress, 29 of the 38 projects experienced changes in cost, building 
size, or both after the initial estimated project cost at design was 
submitted. As shown in figure 4, for 16 projects, both the proposed 
building size and the estimated project cost changed between the design 
phase and the construction phase. For another 7 projects, only the cost 
estimate changed, and for the other 6 projects, the building size 
changed; but only one estimate was provided to Congress, so we could 
not determine if the estimated cost changed. The building size changes 
ranged from small additions or subtractions of tenant space to 
substantial changes in overall square footage. For example, the 
proposed size of the Hammond, Indiana, courthouse increased by nearly 
two-thirds because the need for additional space was identified during 
a long-range planning process initiated after the initial funding 
request was submitted to Congress. By contrast, the proposed size of 
the Omaha, Nebraska, courthouse was reduced by approximately 11 percent 
after funds were requested for design because of a re-evaluation of 
construction projects completed as part of GSA's time-out and review 
process. 

Figure 4: Changes between Design and Construction Funding Requests: 

[See PDF for image]

[A] For these six projects, we were unable to determine if the 
estimated costs had changed because only one estimated total project 
cost was provided. 

[End of figure]

As we have explained in a previous report on funding capital projects, 
an important factor reinforcing the decision-making process is the 
availability of good information.[Footnote 9] Although changes in the 
proposed building size and estimated cost of a project during its 
design phase are not unexpected, GSA did not consistently identify or 
explain project changes in the prospectuses and fact sheets it 
submitted to Congress. For 17 of the 29 projects that changed after the 
design phase, no description or explanation of the change was provided 
in later construction phase documents submitted to Congress. In some 
cases, significant changes in building size, estimated cost, or both 
were not explained. For example, a comparison of documents submitted at 
the design and construction phases for the Jacksonville, Florida, 
courthouse shows a total estimated cost increase of over $11 million 
(13 percent) and an increase in total building size of approximately 
9,000 square feet (2 percent), yet these changes are not described or 
explained. Similarly, an increase in the estimated unit construction 
cost of $55 per square foot--which increased the estimated total costs 
by over $3 million (11 percent) for the Greeneville, Tennessee 
courthouse--was not explained in the fact sheet provided to Congress. 
By contrast, GSA fully explained the reasons for a nearly 40-percent 
decrease in the proposed size of the Youngstown, Ohio, courthouse, 
along with a 27-percent decrease in the project's estimated cost. For 
the Tucson, Arizona, courthouse, GSA submitted a fact sheet describing 
numerous changes made in building size and estimated costs since the 
initial funding request, but it did so in response to a congressional 
staff request. 

Changes in Scope and Postponement of Planned Construction Start Dates 
Resulted in Cost Changes for Selected Projects: 

For the seven projects we reviewed in detail, changes in scope and the 
postponement of planned construction start dates resulted in 
differences between estimated and actual project costs.[Footnote 10] 
Several factors contributed to changes in scope, including issues 
associated with site selection, historic preservation requirements, 
changes in tenants' requirements, and the need for additional security 
after the Oklahoma City bombing. Depending on circumstances unique to 
each project, some changes increased, while other changes decreased, 
the project's total costs. Postponing the start of construction for 
five of the seven projects increased their cost because of inflation, 
since GSA's project cost estimates are based on an expected 
construction start date. 

The actual costs for the seven projects we reviewed in detail varied 
from 5 to 56 percent above the cost estimates provided to Congress at 
the design phase and from 2 percent below to 25 percent above the cost 
estimates provided at the construction phase. Table 1 compares the 
estimated costs with the actual costs for these seven projects. 

Table 1: Changes between Estimated and Actual Costs for Seven Projects: 

Dollars in millions. 

Albany, GA[A]; 
Estimate at design: N/A; 
Estimate at construction: $12.2; 
Actual cost: $13.1; 
Change between estimate at design and actual cost: N/A; 
Change between estimate at construction and actual cost: 7.9%. 

Cleveland, OH; 
Estimate at design: $199.2; 
Estimate at construction: $170.5; 
Actual cost: $213.3; 
Change between estimate at design and actual cost: 7.1%; 
Change between estimate at construction and actual cost: 25.1%. 

Denver, CO; 
Estimate at design: $76.2; 
Estimate at construction: $93.5; 
Actual cost: $99.1; 
Change between estimate at design and actual cost: 30.0%; 
Change between estimate at construction and actual cost: 5.9%. 

Erie, PA[B]; 
Estimate at design: $21.5; 
Estimate at construction: $34.0; 
Actual cost: $33.4; 
Change between estimate at design and actual cost: 55.8%; 
Change between estimate at construction and actual cost: -1.8%. 

Gulfport, MS; 
Estimate at design: $52.1; 
Estimate at construction: $52.4; 
Actual cost: $59.3; 
Change between estimate at design and actual cost: 13.8%; 
Change between estimate at construction and actual cost: 13.2%. 

Las Vegas, NV[C]; 
Estimate at design: $99.0; 
Estimate at construction: N/A; 
Actual cost: $103.7; 
Change between estimate at design and actual cost: 4.7%; 
Change between estimate at construction and actual cost: N/A. 

Seattle, WA[B]; 
Estimate at design: $164.4; 
Estimate at construction: $216.1; 
Actual cost: $214.7; 
Change between estimate at design and actual cost: 30.6%; 
Change between estimate at construction and actual cost: -0.6%. 

Source: GAO analysis of GSA data. 

Note: N/A = Not applicable. 

[A] GSA submitted only one prospectus to Congress on February 23, 1995. 
The prospectus noted that Congress had included design funding in GSA's 
fiscal year 1992 budget and construction funding in GSA's fiscal year 
1993 and fiscal year 1995 budgets. 

[B] Additional costs are likely for the Seattle and Erie projects 
because of outstanding claims. 

[C] The Las Vegas courthouse project was procured using the design- 
build method, thus requiring only one prospectus. 

[End of table]

Multiple Factors Led to Changes in Project Scope: 

For each of the seven projects we reviewed, the scope changed and 
contributed to differences between the estimated cost provided to 
Congress and the actual cost. The term "scope" refers both to building 
size and to the amount of work or number of tasks required to complete 
the project. Factors that caused changes in scope included site 
selection issues, the need to address historic preservation 
requirements, changes in tenants' requirements, and the need for 
additional security provisions. Although some scope changes changed 
both the building size and the amount of work to be done, other scope 
changes, such as those necessary to comply with historic preservation 
requirements and certain improvements requested by tenants, increased 
only the amount of work to be done. Table 2 identifies the factors that 
contributed to changes in scope for each of the projects we reviewed. 

Table 2: Factors That Caused Scope Changes for Seven Selected Projects: 

Project: Albany, GA; 
Additional security needs. 

Project: Cleveland, OH; 
Changes in tenants' requirements; 
Additional security needs. 

Project: Denver, CO; 
Changes in tenants' requirements; 
Additional security needs. 

Project: Erie, PA; 
Historic preservation requirements. 

Project: Gulfport, MS; 
Site acquisition issues; 
Historic preservation requirements. 

Project: Las Vegas, NV; 
Additional security needs. 

Project: Seattle, WA; 
Site acquisition issues; 
Changes in tenants' requirements. 

Source: GAO analysis. 

[End of table]

Site Selection Issues: 

Difficulties with finding and acquiring a site for a new courthouse 
increased the scope of two projects, adding to their costs. 

The scope of the Gulfport project increased when GSA faced community 
resistance to the preferred site and had to purchase a larger site and 
close a street to accommodate the new courthouse. According to GSA 
officials and the project files we reviewed, procuring the only site 
that was suitable and acceptable to the community required GSA to 
purchase more land than it had planned in order to accommodate the 
preservation of a historic high school building that was on part of the 
property. The site cost $3.63 million, or 94 percent, more than GSA had 
planned when it submitted its design funding request. 

In Seattle, GSA had to redesign the courthouse to include three more 
courtrooms when it could not locate the new courthouse adjacent to the 
existing courthouse as planned. Under the new plan, the circuit 
courtrooms remained in the existing courthouse building and the 
bankruptcy courts were included in the new building. This change was 
required after GSA was unable to reach an agreement with the city of 
Seattle on relocating the city library, which was located on the 
preferred site. 

Historic Preservation: 

The scope of two courthouse projects increased to provide for historic 
preservation work that GSA had not anticipated when it requested design 
funding for the projects. The original design concept for the Erie 
courthouse project called for the preservation and incorporation of a 
historic public library building into the courthouse design. According 
to GSA officials and the project files we reviewed, additional 
preservation work was required when an old clothing store on the site 
became eligible for historic status. Rather than demolish the store as 
originally planned, GSA incorporated it into the project design. This 
decision increased the project's total cost by about $1.3 million. 

Procuring the Gulfport project site, as discussed above, was contingent 
on preserving a historic high school. This requirement increased the 
scope of work for both the design and construction phases because, as 
shown in figure 5, three of the old school's four exterior walls had to 
be preserved. According to our analysis of GSA data, preserving the 
exterior walls and retrofitting a new structure within the walls of the 
old school increased the project's design costs by 14 percent. 

Figure 5: Historic Preservation for the Gulfport Courthouse Project: 

[See PDF for image]

[End of figure]

Tenants' Space Requirements: 

Changes in tenants' space requirements increased the scope of work for 
three of the projects we reviewed. The U.S. Marshals Service (USMS) 
provides security for the federal judiciary, including physical 
protection of courthouses and prisoner transport, and was a tenant in 
each of the courthouses we reviewed. The U.S. Attorneys Offices are 
also often located in courthouse facilities. In Cleveland and Seattle, 
the U.S. Attorneys Offices initially resisted relocation to the new 
courthouses because they preferred their current leased spaces. In 
addition, for the Seattle U. S. Attorneys, there were questions of 
whether they would have to move again at a later date as the courts' 
space needs grew. In Denver, the USMS revised its plans for the amount 
of office space it would occupy in the new courthouse. For these three 
projects, GSA had to redesign space to meet the tenant agencies' needs. 

According to GSA's project manager, to preserve the Cleveland project's 
schedule, the project moved forward after an agreement could not be 
reached with the U.S. Attorneys Office on the design of its space. The 
U.S. Attorneys determined that the original space was not large enough 
and received authorization from the Department of Justice for 
additional space in the courthouse. This change required five floors of 
the courthouse to be redesigned to meet the U.S. Attorneys Office's 
requirements. 

In Seattle, according to the GSA project manager, the redesign effort 
was minimized because GSA anticipated the inclusion of the U.S. 
Attorneys in the courthouse and included an option in the construction 
contract to build out the required space. In Denver, the USMS revised 
its occupancy plan for the Denver courthouse during the design phase, 
prompting a redesign effort. The USMS decided to occupy office space in 
the new courthouse rather than remain in the existing, adjacent 
courthouse as planned. According to the GSA project manager, this 
change in the tenant's requirements led to redesigning and allocating 
most of the third floor to the USMS. 

GSA now has a policy to obtain signed agreements from the tenant 
agencies specifying how much space they will occupy in a new building 
before construction begins. These agreements, called occupancy 
agreements, also specify the rent that the agencies will pay for their 
space. According to the project managers we spoke with, the occupancy 
agreements have helped tenant agencies understand the rent commitments 
they are entering into and have helped GSA resolve occupancy issues 
before starting construction. 

Security Enhancements: 

Enhancements made to building security required scope changes for four 
of the seven projects we reviewed. According to the GSA project 
managers for the Denver and Albany projects, these enhancements were 
made in response to the 1995 Oklahoma City bombing and reflected 
updates to the U.S. Marshals' Design Guide. Thus, additional security 
features were added to those projects that were in design or under 
construction between 1995 and 1999. 

Changes to the design criteria for federal buildings increased the 
scope of work for the Las Vegas courthouse project and resulted in a 
claim against the project. This was the first federal courthouse 
designed after the Oklahoma City bombing. For security purposes, the 
building was reinforced with additional steel, increasing the project's 
costs. In addition, because this was a new security design, the 
contractor had not correctly anticipated the amount of steel that would 
be needed and filed a claim to recoup the cost of the additional steel. 
According to the GSA project manager, the project's budget was 
increased by $4.7 million to meet the enhanced security requirements; 
and after the construction was complete, the contractor was paid $3.2 
million to settle his claim for the additional work and materials 
associated with blast proofing the exterior walls. 

Changes made to the U.S. Marshals' Design Guide increased the costs of 
projects in Cleveland, Albany, and Denver. Among other things, these 
changes modified the type of materials used in the prisoners' holding 
cells. 

Postponing Construction and Changes in Local Market Conditions 
Contributed to Changes in Project Costs: 

Postponing the start of construction and changes in local market 
conditions contributed to changes in costs for five of the seven 
projects we reviewed. GSA had to postpone its schedule for starting 
construction on five projects. Of these five projects, two were built 
in highly competitive local construction markets whose volatility also 
contributed to increases in the projects' costs. Local market 
conditions are driven by the supply of skilled construction labor, 
materials, and the relative number of construction projects within a 
locality. 

Courthouse construction takes place in a dynamic and constantly 
changing economic environment. Postponing construction schedules 
exposes a project to cost changes caused by annual inflation or 
deflation rates and increases the risk that the assumptions used to 
establish the project's budget may not keep pace with changing local 
market conditions. Yet, even if construction is not postponed, the 2 
years that typically elapse between the development of a prospectus and 
the actual funding of a project provide ample time for local market 
conditions to drift from the conditions assumed in developing the 
estimates in the first place. Thus, postponing construction schedules 
for reasons as diverse as the timing of appropriations or the 
judiciary's current moratorium increase the probability that estimated 
and actual costs will diverge. 

The Erie project illustrates the effect that not receiving funding when 
anticipated and postponing construction can have on a project's costs. 
The design prospectus for the Erie project was submitted in March 1994. 
When a fact sheet was submitted in March 1999--5 years after the 
prospectus--the design concept had changed, as discussed earlier, 
increasing the scope of historic preservation work and adding to the 
design costs. Furthermore, appropriations for construction funding were 
not provided until fiscal year 2002. Primarily because of inflation and 
the scope increase, the project's estimated total cost increased 59 
percent in nominal dollars over the estimate provided in the 1994 
prospectus. 

Construction on two projects, Gulfport and Seattle, were postponed as a 
result of site acquisition issues, as discussed earlier. In addition, 
according to the GSA project manager, the booming local construction 
market in Seattle contributed to increased project costs. The Seattle 
project also illustrates the uncertainty involved in anticipating local 
market conditions. GSA's benchmark used an escalation factor of 3 
percent to estimate construction costs, but the project manager said 
that the escalation in Seattle was closer to 3.9 percent. 

According to GSA's project manager, the Denver courthouse also was 
constructed in a highly competitive economic environment that increased 
the project's cost. During the project's development, the project 
manager said that Denver experienced a construction boom that caused 
construction prices to rise sharply and contributed to construction 
bids for the project that came in approximately $10 million over 
budget. Although one floor was removed from the design and other cost- 
saving measures were implemented, the persistent, ongoing competition 
in the local construction market contributed to actual costs that were 
6 percent higher than the estimated costs submitted with the 
construction funding request. 

Other Factors Caused Project Costs to Change: 

Other factors that were unique to specific projects we reviewed also 
caused costs to change. For example, costs increased for the Denver 
project when GSA headquarters decided that the Denver courthouse 
project would serve as a demonstration project to showcase a number of 
sustainable design features, such as solar panels, light shelves, and 
automated heating and air-conditioning controls. These project changes 
increased the estimated cost of construction by $5 million.[Footnote 
11] 

According to the Cleveland project manager, problems with contractors 
and a design error increased the actual costs of the project. Although 
the project was originally intended to use design-bid-build 
procurement, because of design delays, the construction schedule was 
divided into three phases, and construction started before the design 
was completed. When the contractor fell behind in the second phase, GSA 
followed the advice of its construction manager and became the general 
contractor for the final construction phase in an effort to avert 
potential claims arising from the second phase delays. GSA managed over 
10 contracts in the final construction phase. According to the GSA 
claims attorney involved in the project, GSA's taking on the role of 
general contractor accounted for the large number of claims paid on the 
project. GSA settled the claims for approximately $20.8 million, or 12 
percent of the estimated total cost that was submitted with the 
construction prospectus. In addition, construction costs increased when 
a design error that underestimated the size of certain steel beams was 
corrected, and special beams had to be manufactured and imported from 
an overseas supplier. 

Finally, a general contractor's inability to maintain the construction 
schedule and meet its obligations to building material suppliers caused 
the construction phase of the Albany project to be extended 3 years 
beyond its anticipated completion. Eventually, the general contractor's 
surety company, which guaranteed the contractor's ability to perform 
the work, took over the management of the project and brought it to 
completion. GSA still had to settle claims brought against the project 
by the contractor's surety. Although GSA was able to limit the actual 
cost increase to 7.9 percent over the estimate submitted to Congress, 
the relatively small building took 5 years to construct. 

Several project managers also noted the effect that GSA's time-out and 
review initiative had on the early planning for the projects. The 
principal motivation of GSA's time-out and review initiative was to cut 
costs, reevaluate priorities, and improve the management of the federal 
buildings program. For the courthouse construction program, GSA 
reevaluated priorities and trimmed the costs of existing projects, 
identifying savings of $324 million from 43 courthouse projects. For 
example, as a result of time-out and review, the estimated cost of the 
Cleveland project was reduced by $63 million or about 26 percent. 
However, in this project, much of the savings were not realized and had 
to be added back into the project during construction. 

Departures from the Design Guide Had Little Impact on Project Costs: 

In 1991, the judiciary issued the U.S. Courts Design Guide, which 
specified the judiciary's criteria for designing new court facilities. 
The Design Guide provides specific guidelines for the size, design 
requirements, security, and other features of courtrooms, judges' 
chambers, and other court-related space. Significant departures from 
the Design Guide criteria must be justified by the district courts and 
approved by the Circuit Judicial Council for the judicial circuit where 
the project is located. The Design Guide has been revised several times 
in response to economic constraints and is being reevaluated during the 
judiciary's current moratorium to determine if additional revisions are 
appropriate. 

Departures from the Design Guide are often thought to increase 
courthouse project costs. However, we found few departures from the 
Design Guide in the projects we reviewed, and most of them were made to 
increase the building's functionality. The project managers said none 
of the departures resulted in an increase in the building size. We were 
not able to quantify the costs associated with the departures, but 
according to the project managers, their impact on cost was minimal. 

* In the Albany courthouse, ceilings were lowered by 1 to 2 feet, which 
reduced costs and allowed the magistrate judge courtrooms on the floor 
above to be built to the size of district courtrooms to meet future 
expansion needs. 

* In Gulfport, the judiciary obtained approval to include a special 
proceedings courtroom in the new courthouse. These courtrooms are 600 
square feet larger than a traditional district courtroom and are used 
for multidefendant trials or special events, such as naturalization 
ceremonies. 

* In Cleveland, increases in the size of the grand jury suite and 
magistrate judges' courtrooms were accommodated within the planned size 
of the building by reducing the size of other court spaces. 

GSA Used Several Strategies to Reduce and Control Costs of Selected 
Projects: 

For the seven projects we reviewed in detail, GSA project managers used 
several strategies to reduce costs and keep them within budget. These 
strategies included value engineering, modified contracting methods, 
and a variety of approaches for involving and communicating with tenant 
agencies. On the basis of estimates provided by GSA, Congress 
authorizes and appropriates funds for individual courthouse 
construction projects. GSA sets each project budget according to the 
appropriated funds and seeks to manage each project to the specified 
budget. 

Value Engineering Used to Bring Costs within Budget: 

For the seven projects we reviewed, GSA project managers used value 
engineering during the design phase to identify cost-saving changes and 
to reduce costs. Project managers also used value engineering as the 
primary method to reduce costs to meet the budget when the initial 
construction bids exceeded the project's budget. Value engineering is 
an organized effort to analyze the functions of systems, equipment, and 
facilities for the purpose of achieving the essential functions at the 
lowest cost possible while maintaining performance, reliability, 
quality, and safety. Changes resulting from value engineering ranged 
from using less expensive materials than originally planned to making 
changes in scope that affected the features built into the courthouse. 
Some changes made as a result of value engineering permanently reduced 
building costs while other changes deferred costs to later years. 

In a commitment to continue cost reduction after the time-out and 
review process of the mid-1990s, GSA emphasized the use of value 
engineering as a method to reduce costs below the approved budgets. The 
Office of Management and Budget requires executive branch agencies to 
use value engineering as appropriate to reduce program and acquisition 
costs while maintaining necessary quality levels. For the projects we 
reviewed, GSA project managers generally hired outside consultants to 
perform value engineering studies during the design phase to identify 
potential areas for cost savings. Project managers used value 
engineering again for four of the seven projects, when the construction 
bids exceeded the project's budgets. The estimated cost at construction 
or the construction bids exceeded the budget by $2 million to $16 
million, or 6 to 18 percent, for these four projects. The project 
managers tasked the contractors that were bidding on the construction 
phase of the project to submit ideas for cutting costs. This approach 
allowed GSA to reduce the bids to within the budget without redesigning 
the building. Having to redesign the building, then going through 
another bidding process is time consuming; and as discussed earlier, 
starting construction later than planned can lead to cost increases. 

Many relatively small changes were often made as a result of value 
engineering to reduce projects' costs. The most common change for all 
seven projects was substituting less expensive materials for more 
expensive materials that were originally called for in the design. For 
example, using commercially available products rather than custom-made 
materials lowered costs. These material substitutions often had no or 
minimal impact on the appearance and functionality of the building. For 
example, in two courthouse projects, wainscoting was used in place of 
full-height wood paneling. For the Seattle project, GSA removed the 
copper cladding from the roof after determining that its removal would 
not negatively affect the appearance or durability of the building. 

The court officials involved in the seven projects told us that they 
participated in the value engineering sessions and agreed with the 
changes to reduce the construction costs. These officials understood 
that there was a limited budget and made trade-offs to get the features 
they wanted the most. For example, in Las Vegas the judges agreed to 
reduce the amount of limestone used on the outside of the building so 
that they could keep wood paneling in the courtrooms. 

Other value engineering changes resulted in the elimination or 
reduction of spending on some features, such as building systems, to 
reduce projects' costs. While these changes lowered the construction 
costs, some could increase future operating and maintenance costs. In 
Las Vegas, a window-washing platform was eliminated to save $250,000. 
According to the GSA building manager, it now costs about $30,000 to 
wash the courthouse's windows, because special equipment is needed. As 
a result, the windows are seldom washed. For two projects, GSA 
eliminated the funds for heating and air-conditioning systems from the 
construction contracts and entered into energy savings and performance 
contracts (ESPC) to procure these systems. Under an ESPC, the 
contractor purchases and installs the heating and air-conditioning 
systems and GSA pays for the systems over the life of the contract, for 
as long as 25 years, from its operating budget. It is expected that the 
contractor will install a more energy-efficient system than would have 
been installed without the ESPC and that the cost of the system will be 
paid for from the savings attributed to a more efficient system. In new 
construction, energy savings are estimated using many assumptions about 
energy usage and costs, since there are no actual systems and costs on 
which to base estimates of expected savings. 

In December 2004, we reported that using ESPCs to install heating and 
air-conditioning systems is more expensive than funding the 
installation of such systems up front as part of the construction 
costs.[Footnote 12] In that review, we estimated that the use of an 
ESPC for the Gulfport Federal Courthouse might cost about $2.5 million, 
compared with about $1.6 million if the system had been installed as 
part of the construction. This is an increase of about 56 percent in 
the cost of the heating and air conditioning system. We found that GSA 
focused on reducing the construction costs, so that it could award the 
construction contract, rather than on the long-term cost implications 
of using an ESPC. 

Modified Contracting Methods Used to Control Costs: 

On three projects, project managers identified the contracting method 
as a strategy they used to help control costs and keep the project on 
schedule. One project involved the construction contractor in the 
design phase of the project while another included incentive award 
clauses in the construction contract. The third project used versions 
of both of these approaches. 

GSA traditionally approaches a new construction project by designing 
the building and then soliciting bids to construct the building based 
on the design. This is referred to as the design-bid-build method of 
contracting. In this traditional method, the construction contractor is 
not involved in the design process and often has questions about the 
design, which can lead to changes during construction. To reduce the 
risk of changes during construction and accelerate the project's 
schedule, the Las Vegas project manager used a design-build bridging 
contract method. Under this contracting method, the project began with 
a traditional design phase to develop the concept for the building. The 
concept design identified the basic structure of the building, 
including the layout of courtrooms and chambers on each floor. GSA then 
advertised for a contractor to complete the detailed building design 
and construct the building. The winning contractor was a joint venture 
between an architectural firm and a general contractor. This approach 
allowed construction to begin as soon as the design was completed, thus 
saving time and reducing the chances of the tenants' requirements 
changing between the time of design completion and the start of 
construction. In addition, the architect and builder were with the same 
firm, so when issues came up during construction, each had an interest 
in arriving at solutions rather than finger-pointing and blaming each 
other. According to the project manager, as a result of this 
contracting method, relatively few changes were made on the project 
during construction. 

For the Gulfport courthouse project, GSA hired the general contractor 
during the design stage when the building's design was only 35 percent 
complete. The project manager believed that involving the general 
contractor in the development of the design and construction documents 
would minimize the number of questions the contractor would have about 
the design and thus minimize the number of change orders. Change orders 
on a project may increase the time needed to construct the building and 
increase the cost of construction. The project manager believed that 
this was a successful approach because there were few questions about 
the design during construction and relatively few change orders due to 
design issues. 

GSA used construction contracts with incentive award clauses for the 
Gulfport and Seattle courthouses. The incentive awards required 
periodic reviews of the contractors' performance throughout the 
projects, which ensured a certain level of communication. The project 
manager for the Seattle courthouse said that this method forced the 
stakeholders to communicate and address issues that, without the 
incentive award, might not have been addressed until the end of the 
project. The use of incentive awards is intended to increase 
communication and help control the projects' overall costs. The 
contractor on the Gulfport project earned 85 percent of the incentive 
award, and the contractor on the Seattle project earned about 92 
percent of the incentive award. 

Tenant Agency Involvement and Communication Identified as Keys to 
Projects' Success and to Controlling Costs: 

GSA project managers and judiciary officials said the involvement of 
tenant agencies and open and continual communication with them on the 
projects we reviewed were important to the successful completion of the 
projects and to controlling their costs.[Footnote 13] Judges at each of 
the courthouses said the new buildings met their requirements, and they 
were all very happy with the new courthouses. GSA project managers used 
a variety of strategies, such as regular meetings and courtroom mock- 
ups, to identify changes prior to construction, to involve tenant 
agencies in planning the courthouse projects, and to keep them informed 
about the progress of the projects. The judiciary also generally hired 
its own project manager to oversee each of the projects and to 
facilitate communication between GSA and the judiciary. In addition, 
many of the project managers used a Web-based project management tool 
to facilitate communication among the construction contractors. 

Involving tenant agencies and incorporating their interests into a 
project, particularly during the planning stages, is one of the five 
components of a leading practices framework. Project managers agreed 
that working with tenant agencies to define their requirements and 
keeping tenants informed about the project were important to getting 
the agencies' "buy-in" on the project and to minimizing changes during 
construction. Making changes during a project's design to ensure that 
tenants' requirements are met is generally less costly than making 
changes during construction. Leading practices in capital project 
management suggest frequent communication and involvement through such 
means as meetings and correspondence. GSA project managers and 
judiciary officials who represented the various courts' interests said 
that judiciary officials were actively involved from the conception of 
the projects. Project documents show that other tenant agencies were 
also involved throughout the projects. 

While all of the project meetings included tenant agency 
representatives, GSA and judiciary officials said that using courtroom 
mock-ups and having a judicial project manager were important 
strategies used to facilitate communication. All project managers used 
courtroom mock-ups in which a full-size model of a courtroom was 
constructed and the judges and other courtroom participants evaluated 
the model for such things as sight lines and the placement of 
furniture. The courtroom mock-ups resulted in changes to courtroom 
designs, and, according to GSA, no major changes were required during 
or after the construction of the courtrooms to correct deficiencies. 
Thus, the courtrooms met the judges' requirements, and costs were 
avoided by making necessary changes prior to construction. 

According to judiciary officials, there was open communication between 
the judiciary and GSA on six of the seven projects. These officials 
said that the collegial relationships they developed with GSA 
facilitated communication and allowed them to work together to control 
and, when necessary, to reduce costs in a constructive way. For these 
six projects, the judiciary had its own project manager, who interacted 
with GSA on a regular basis. The judges said that it was critical for 
them to have this project manager, who was knowledgeable about 
construction, and could advise the judges on suggested changes and 
facilitate communication with GSA. 

The USMS and the U.S. Attorneys Office were also major tenants in most 
of the courthouses we reviewed. According to GSA project managers, 
these agencies were involved in the projects to a lesser extent than 
the judiciary. USMS officials said that their level of involvement 
varied, depending on the project and the project manager involved. As 
discussed, some of the cost increases during construction resulted from 
the USMS's and the U.S. Attorneys Office's requirement changes. USMS 
changes primarily resulted from increases in security standards, which 
could not have been anticipated prior to construction. Changes 
involving the U.S. Attorneys Office more often resulted because of its 
decisions about moving to the new building. As noted, GSA's policies 
and procedures have changed over the last several years, and GSA now 
requires tenant agencies to sign occupancy agreements prior to 
construction. Such agreements define the amount of space the tenant 
will occupy and the rental cost for the space. This policy should 
eliminate last minute questions about which tenants will occupy the 
building and the amount of space they will occupy. 

Finally, GSA used commercially available Web-based project management 
tools for several of the projects to facilitate communication among the 
contractors. These tools facilitate communication by reducing 
paperwork; electronically assigning responsibility for tasks; tracking 
changes, questions, and answers; and providing all contractors with 
access to the same information as appropriate. For example, if a 
contractor has a question about the design of a particular building 
element, it can submit a question to the architect; and GSA can track 
the question and response to ensure that the question is resolved as 
quickly as possible. The Seattle project manager highlighted the 
importance of having clearly defined design and construction 
requirements. The manager said that in Seattle, he was able to reduce 
the construction bid by meeting with the subcontractors to answer their 
questions about the building requirements. If subcontractors do not 
fully understand an aspect of the design, they will build in additional 
costs to cover their risk. By clarifying the building requirements, GSA 
was able to reduce the subcontractors' risk and thus reduce their bids 
on the project. 

Recent GSA Program Improvements: 

During the last decade, GSA has implemented a number of initiatives to 
enhance and improve the performance of the courthouse construction 
program. Among these initiatives are enhancements to the benchmarking 
system, the use of courtroom mock-ups, and the ongoing development of 
project management practice through the Project Management Center of 
Expertise. GSA's Center for Courthouse Programs is also conducting 
independent cost estimates and quality control reviews at three points 
during the design phase of projects to help ensure that courthouse 
projects can be built within budget and the quality of the buildings is 
not being sacrificed to stay within budget. While the results of some 
of these initiatives were apparent in the seven projects we reviewed, 
such as with the courtroom mock-ups, the effects of the more recent 
efforts to enhance the program are not captured in our data collection. 
This situation occurred because many of the projects in our universe 
were already fairly advanced by time the more recent initiatives were 
introduced. 

Conclusions: 

Courthouse construction is a process that evolves over many years and 
includes multiple stakeholders. Many factors can affect the cost of a 
courthouse project as it moves from planning and design to 
construction. Our work showed that the most significant cost changes 
occurred between the time of GSA's request for design and its request 
for construction funding. Some reasons for cost increases, such as the 
need for additional security or changing market conditions, affected 
several projects and could not have been easily anticipated. Other 
reasons for cost changes were unique to individual projects. It is 
important to provide decision makers with information about the costs, 
risks, and scope of projects before resources are committed. Such a 
practice would be consistent with our past work on leading practices in 
capital decision making. In the case of courthouse projects, GSA does 
not consistently explain project changes in documents provided to 
congressional decision makers. These changes may only be apparent if 
congressional decision makers compare the information submitted with 
the construction funding request to the information submitted, 
sometimes years earlier, with the design funding request. 

Recommendations for Executive Action: 

To improve the usefulness of the information on courthouse construction 
projects that GSA provides to Congress, we recommend that the 
Administrator of GSA, when requesting funding for those projects, 
identify and explain changes in estimated costs and building size from 
the information provided to Congress in prior project prospectuses or 
fact sheets. 

Agency Comments: 

We provided a draft copy of this report to the Administrator of the 
General Services Administration and the Director of the Administrative 
Office of the U. S. Courts for their review and comment. On June 24, 
2005, GSA provided us with written comments and concurred with our 
recommendation (see app. III). GSA noted that in 2004 it began 
notifying Congress when significant changes in scope and budget 
occurred in courthouse projects. While GSA started notifying the 
authorizing committees of significant changes to projects in 2004, it 
has not been notifying the appropriation committees of these changes. 
We believe that all the stakeholders should have the same information, 
and changes to the project should be included in the prospectuses as 
part of the funding process. GSA also noted changes it has made over 
the years to how it plans, budgets, and manages courthouse projects and 
provided technical clarifications, which we have incorporated in this 
report as appropriate. AOUSC provided technical clarifications, which 
we have incorporated as appropriate. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to the appropriate congressional committee, the Administrator of GSA, 
and the Director of the Administrative Office of the U.S. Courts. 
Copies will also be made available to other interested parties on 
request. In addition, the report will be available at no charge on 
GAO's Web site at [Hyperlink, http://www.gao.gov]. 

If you or your staff have any questions about this report, please 
contact me at (202) 512-6670 or [Hyperlink, GoldsteinM@gao.gov]. 
Contact points for our Offices of Congressional Relations and Public 
Affairs may be found on the last page of this report. GAO staff who 
made major contributions to this report are listed in appendix IV. 

Signed by: 

Mark L. Goldstein: 
Director, Physical Infrastructure Issues: 

[End of section]

Appendixes: 

Appendix I: Scope and Methodology: 

The objectives of our report were to (1) compare estimated and actual 
costs for recently completed courthouse projects, (2) identify factors 
that contributed to differences between the estimated and actual costs 
of selected projects, and (3) identify strategies that were used to 
help control the costs of selected projects. To address these 
objectives, we reviewed project prospectuses and courthouse expenditure 
data; interviewed General Services Administration (GSA) and judiciary 
officials; and conducted a detailed review of seven completed 
courthouses around the country. 

We identified a total of 38 new courthouse construction projects 
completed since 1998 from information supplied by GSA's Center for 
Courthouse Programs (CCP). We chose 1998 as a starting date to exclude 
the projects we had considered in our previous report on the courthouse 
construction program and to include only those projects that were 
designed and built during the period when a number of changes were made 
to the program, such as the implementation of 5-year plans by the 
Administrative Office of the U.S. Courts (AOUSC) and the establishment 
of the CCP. 

To determine estimated costs, we examined prospectuses and fact sheets 
submitted to Congress during the appropriations process.[Footnote 14] 
For 35 of the 38 projects completed since 1998, at least one estimate 
of total project cost was provided to Congress. Three projects did not 
go through the typical approval and funding process. GSA typically 
submits two requests for funding, one in the prospectus for design 
funding and another in the prospectus for construction funding, but 
this is not always the case. For some projects, the initial estimate 
was submitted in the form of a "Report of Building Project Survey," 
sometimes called an 11(b) report after the section of the Public 
Buildings Act of 1959, which provides for such a report. In other 
cases, the estimate was submitted in the form of a one-page fact sheet 
either as a supplement to or in lieu of a prospectus. Prospectuses and 
fact sheets typically contain an estimated total project cost as the 
sum of separate estimates for site acquisition, design, management and 
inspection, and construction. For some projects, we added the 
construction cost estimate to the amounts previously appropriated for 
design and site acquisition to arrive at a total project cost estimate. 
To determine changes in proposed building size and parking, we compared 
documents submitted for the construction phase funding with those 
submitted for the design phase funding. 

To determine actual costs, we used data provided by GSA's Public 
Building Service (PBS) Budget Office for all courthouse projects 
completed since 1998. We defined actual costs as all obligations 
recorded against each project through the end of fiscal year 2004 plus 
any claims paid from the U.S. Treasury Department's Judgment Fund. 
According to information supplied by the PBS Budget Office, 13 of the 
38 projects that we examined had at least one claim paid from the 
Judgment Fund, ranging from $65,000 on the St. Louis courthouse to over 
$20 million on the Cleveland courthouse. Claims are paid from the 
Judgment Fund when there are no funds left available in the project 
budget to pay the claims. The reported actual costs of the courthouse 
projects include only funds budgeted by GSA and specifically authorized 
by Congress for new construction and exclude items funded by the tenant 
agencies. We also reviewed appropriation acts for fiscal years 1993 
through 2005 to identify funding appropriated for new courthouse 
construction projects and other relevant legislation relating to GSA's 
construction authority. 

To compare actual with estimated costs, we calculated the percentage by 
which actual costs differed from estimates of the costs. When more than 
one estimate was provided for a project, we compared the actual costs 
with the initial and latest estimates. For example, when an 11(b) 
report was prepared for a project, we used this document as a source 
for the original estimate. Similarly, when a fact sheet was submitted 
after a construction prospectus for a project, we used the estimate 
provided in the fact sheet. 

To identify factors that contributed to differences between estimated 
and actual costs and to identify the types of strategies used to 
controls costs, we selected seven courthouses whose construction was 
completed between 2000 and 2004: Albany, Georgia; Cleveland, Ohio; 
Denver, Colorado; Erie, Pennsylvania; Gulfport, Mississippi; Las Vegas, 
Nevada; and Seattle, Washington. To select these courthouses, we 
considered a number of factors, including the range and scope of the 
cost changes, the size of the project, and the geographic location. For 
each of these seven courthouses, we obtained estimated and actual cost 
information by reviewing prospectuses, 11(b) reports, and fact sheets 
submitted to Congress and budgetary expenditure data provided by GSA. 

During our visits to the seven courthouses, we reviewed the relevant 
project files from GSA. We looked specifically for documentation of 
factors that contributed to or helped control cost changes, such as 
scope modifications, contractor and bid documents, change orders, and 
claims. We also interviewed GSA and judiciary officials responsible for 
each courthouse project, including judges, project managers, 
contracting officers, and other individuals involved during the design 
and construction phases of the courthouse. We also interviewed 
judiciary officials associated with the projects including 
Administrative Office of the U.S. Courts (AOUSC) officials and judges. 
From the interviews and project file reviews, we obtained information 
on the extent of and reasons for the cost changes. We also reviewed GSA 
and AOUSC documents related to management controls, policies, 
procedures, and guidance for courthouse construction projects. 

For the estimated costs of the 38 courthouse projects, we relied on the 
original source documents, including the prospectuses that GSA provided 
to Congress. We assessed the reliability of actual cost data provided 
by GSA's PBS Budget Office by (1) reviewing documents describing 
policies and procedures for the administrative control of funds, (2) 
interviewing knowledgeable agency officials about the data, and (3) 
reviewing an independent auditor's report. We determined that the data 
were sufficiently reliable for the purposes of this report. We also 
corroborated much of the testimonial information provided by GSA and 
judiciary officials during our seven courthouse reviews by obtaining 
documentation of project management and cost changes during our file 
reviews. Because we selected a nonprobability sample of courthouses to 
review in detail, our findings are not generalizable to the 38 
projects. 

[End of section]

Appendix II: Timelines and Costs of Courthouse Projects Completed Since 
1998: 

Figure 6: Timelines of Courthouse Construction Projects: 

[See PDF for image] 

Note: Project initiation refers to the fiscal year for which funds were 
first requested from Congress, an 11(b) report was submitted, or funds 
were first appropriated. 

[End of figure] 

Table 3: Summary of Estimated and Actual Costs: 

Project location: Albany, GA; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: $12,163,000; 
Total obligations[C]: $13,127,344; 
Actual cost: $13,127,344. 

Project location: Albuquerque, NM; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: $56,794,000; 
Total obligations[C]: $50,146,643; 
Actual cost: $50,146,643. 

Project location: Beckley, WV; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: N/A; 
Total obligations[C]: $35,677,860; 
Actual cost: $35,677,860. 

Project location: Boston, MA; 
Design ETPC[A]: $163,005,000; 
Construction: ETPC[B]: $202,005,000; 
Total obligations[C]: $230,671,501; 
Claims: $4,250,000; 
Actual cost: $234,921,501. 

Project location: Brownsville, TX; 
Design ETPC[A]: $35,027,000; 
Construction: ETPC[B]: $33,813,000; 
Total obligations[C]: $32,708,650; 
Actual cost: $32,708,650. 

Project location: Central Islip, NY; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: $227,009,000; 
Total obligations[C]: $215,629,990; 
Claims: $700,000; 
Actual cost: $216,329,990. 

Project location: Charleston, WV; 
Design ETPC[A]: $80,406,500; 
Construction: ETPC[B]: N/A; 
Total obligations[C]: $80,754,535; 
Actual cost: $80,754,535. 

Project location: Cleveland, OH; 
Design ETPC[A]: $199,203,000; 
Construction: ETPC[B]: $170,537,000; 
Total obligations[C]: $192,497,198; 
Claims: $20,790,000; 
Actual cost: $213,287,198. 

Project location: Columbia, SC; 
Design ETPC[A]: $55,960,000; 
Construction: ETPC[B]: $55,961,000; 
Total obligations[C]: $63,721,116; 
Actual cost: $63,721,116. 

Project location: Corpus Christi, TX; 
Design ETPC[A]: $33,740,000; 
Construction: ETPC[B]: $33,056,000; 
Total obligations[C]: $34,244,915; 
Actual cost: $34,244,915. 

Project location: Covington, KY; 
Design ETPC[A]: $20,858,000; 
Construction: ETPC[B]: $21,791,000; 
Total obligations[C]: $22,155,221; 
Actual cost: $22,155,221. 

Project location: Denver, CO; 
Design ETPC[A]: $76,211,000; 
Construction: ETPC[B]: $93,504,000; 
Total obligations[C]: $99,052,566; 
Actual cost: $99,052,566. 

Project location: Erie, PA; 
Design ETPC[A]: $21,450,000; 
Construction: ETPC[B]: $34,039,000; 
Total obligations[C]: $33,412,332; 
Actual cost: $33,412,332. 

Project location: Fargo, ND; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: N/A; 
Total obligations[C]: $19,328,942; 
Actual cost: $19,328,942. 

Project location: Ft. Myers, FL; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: $29,796,000; 
Total obligations[C]: $25,897,340; 
Actual cost: $25,897,340. 

Project location: Greeneville, TN; 
Design ETPC[A]: $28,043,000; 
Construction: ETPC[B]: $31,165,000; 
Total obligations[C]: $31,056,543; 
Actual cost: $31,056,543. 

Project location: Gulfport, MS; 
Design ETPC[A]: $52,093,000; 
Construction: ETPC[B]: $52,391,000; 
Total obligations[C]: $59,287,053; 
Actual cost: $59,287,053. 

Project location: Hammond, IN; 
Design ETPC[A]: $28,028,000; 
Construction: ETPC[B]: $59,061,000; 
Total obligations[C]: $60,316,073; 
Actual cost: $60,316,073. 

Project location: Jacksonville, FL; 
Design ETPC[A]: $85,305,000; 
Construction: ETPC[B]: $96,680,000; 
Total obligations[C]: $96,591,397; 
Actual cost: $96,591,397. 

Project location: Kansas City, MO; 
Design ETPC[A]: $114,476,000; 
Construction: ETPC[B]: $112,181,000; 
Total obligations[C]: $113,860,442; 
Claims: $232,665; 
Actual cost: $114,093,107. 

Project location: Knoxville, TN; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: N/A; 
Total obligations[C]: $39,709,609; 
Actual cost: $39,709,609. 

Project location: Lafayette, LA; 
Design ETPC[A]: $34,409,000; 
Construction: ETPC[B]: $34,607,000; 
Total obligations[C]: $34,314,536; 
Actual cost: $34,314,536. 

Project location: Laredo, TX; 
Design ETPC[A]: $23,194,000; 
Construction: ETPC[B]: $36,531,000; 
Total obligations[C]: $42,579,078; 
Actual cost: $42,579,078. 

Project location: Las Vegas, NV[D]; 
Design ETPC[A]: $99,041,000; 
Construction: ETPC[B]: N/A; 
Total obligations[C]: $100,491,555; 
Claims: $3,200,000; 
Actual cost: $103,691,555. 

Project location: London, KY; 
Design ETPC[A]: $15,808,000; 
Construction: ETPC[B]: $16,642,000; 
Total obligations[C]: $19,018,809; 
Actual cost: $19,018,809. 

Project location: Montgomery, AL; 
Design ETPC[A]: $53,638,000; 
Construction: ETPC[B]: $48,335,000; 
Total obligations[C]: $60,115,326; 
Claims: $13,178,171; 
Actual cost: $73,293,497. 

Project location: Omaha, NE; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: $67,194,000; 
Total obligations[C]: $65,579,829; 
Claims: $5,300,000; 
Actual cost: $70,879,829. 

Project location: Phoenix, AZ; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: $111,063,000; 
Total obligations[C]: $114,030,705; 
Claims: $11,152,007; 
Actual cost: $125,182,712. 

Project location: Sacramento, CA; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: $173,249,000; 
Total obligations[C]: $130,509,658; 
Actual cost: $130,509,658. 

Project location: Santa Ana, CA; 
Design ETPC[A]: N/A; 
Construction: ETPC[B]: $134,902,000; 
Total obligations[C]: $125,861,026; 
Claims: $18,080,137; 
Actual cost: $143,941,163. 

Project location: Scranton, PA; 
Design ETPC[A]: $41,679,000; 
Construction: ETPC[B]: $36,188,000; 
Total obligations[C]: $35,553,938; 
Actual cost: $35,553,938. 

Project location: Seattle, WA; 
Design ETPC[A]: $164,407,000; 
Construction: ETPC[B]: $216,082,000; 
Total obligations[C]: $214,730,651; 
Actual cost: $214,730,651. 

Project location: St. Louis, MO; 
Design ETPC[A]: $251,772,000; 
Construction: ETPC[B]: $230,863,000; 
Total obligations[C]: $250,234,082; 
Claims: $65,000; 
Actual cost: $250,299,082. 

Project location: Tallahassee, FL; 
Design ETPC[A]: $23,472,000; 
Construction: ETPC[B]: $29,129,000; 
Total obligations[C]: $30,556,900; 
Claims: $721,684; 
Actual cost: $31,278,584. 

Project location: Tampa, FL; 
Design ETPC[A]: $84,561,000; 
Construction: ETPC[B]: $81,161,000; 
Total obligations[C]: $69,487,426; 
Claims: $1,253,605; 
Actual cost: $70,741,031. 

Project location: Tucson, AZ; 
Design ETPC[A]: $98,625,000; 
Construction: ETPC[B]: $81,708,000; 
Total obligations[C]: $83,765,867; 
Claims: $9,050,776; 
Actual cost: $92,816,643. 

Project location: Wheeling, WV[D]; 
Design ETPC[A]: $29,303,000; 
Construction: ETPC[B]: N/A; 
Total obligations[C]: $28,324,368; 
Actual cost: $28,324,368. 

Project location: Youngstown, OH; 
Design ETPC[A]: $21,534,000; 
Construction: ETPC[B]: $15,799,000; 
Total obligations[C]: $16,517,999; 
Actual cost: $16,517,999. 

Source: GAO Analysis of funding requests submitted to Congress. 

Note: N/A = not applicable. 

[A] ETPC = estimated total project cost. 

[B] For some projects, additional funds were requested after the 
construction ETPC was submitted. 

[C] Total obligations are through the end of fiscal year 2004. 

[D] These projects were procured using the design-build process, so 
only one ETPC was provided to Congress. 

[End of table]

[End of section]

Appendix III: Comments from the General Services Administration: 

GSA: 

GSA Administrator: 

JUN 24 2005: 

Mr. Mark L. Goldstein:
Director, Physical Infrastructure: 
Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Goldstein: 

The General Services Administration (GSA) appreciates this opportunity 
to review and provide the enclosed comments on the Government 
Accountability Office's (GAO's) draft Report to the Chairmen, Committee 
on Environment and Public Works and Subcommittee on Transportation and 
Infrastructure, U.S. Senate, Courthouse Construction: Information on 
Project Cost and Size Changes Could Enhance Oversight (GAO-05-673). 

The report recommends that GSA, when requesting funding for new 
courthouse projects, identify and explain changes in estimated costs 
and building size from the information provided to Congress in prior 
project prospectuses or fact sheets. 

GSA concurs with this recommendation and has made significant changes 
in how it plans, budgets, and manages these projects that, in many 
cases, began more than 10 years ago. For example: 

* A "verification of preparedness" checklist is administered to ensure 
that project teams are prepared to begin design phase;

* Design start meetings reinforce the requirements of scope, schedule, 
and budget;

* Design management evaluations by independent consultants are 
performed to ensure that scope, program, and budget requirements are 
met; 

* Construction start meetings confirm that the most effective 
construction delivery method is used and that project's scope and 
program can be delivered on schedule and within budget; and,

* Controls were established on how to issue construction change orders. 

In 2004, GSA began notifying Congress when significant changes in the 
scope and budget occurred in courthouse projects that had been 
previously authorized and had funding appropriated for design. GSA is 
also working with the judiciary to better define and confirm space 
requirements for future courthouse projects during the planning phase. 
Detailed space programming studies will be conducted and confirmed by 
signed occupancy agreements prior to the design prospectus. 

In addition, beginning in fiscal year 2007, GSA will request design 
funding sufficient to incorporate interoperable building information 
modeling using Industry Foundation Classes into the design of new 
courthouse projects. This system will allow automated standards 
checking and cost estimating during design to better control project 
scope and cost. 

Should you have any questions, please contact me. Staff inquiries may 
be directed to Mr. Robert Andrukonis, Director, Center for Courthouse 
Programs, Public Buildings Service, at (202) 501-1517. 

Sincerely,

Signed for: 

Stephen A. Perry: 
Administrator: 

Enclosure: 

[End of section]

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Mark L. Goldstein, (202) 512-2834: 

Staff Acknowledgments: 

In addition to those named above, Lindsay Bach, Maria Edelstein, Bess 
Eisenstadt, Daniel Hoy, David E. Sausville, Dave Stikkers, and Dorothy 
Yee made key contributions to this report. 

(543106): 

FOOTNOTES

[1] The $4.5 billion does not include all rescissions that affected the 
total funding available for the 78 projects. 

[2] This range is for the 27 projects that GSA provided a total project 
cost estimate to Congress at the project design phase. 

[3] This range is for the 32 projects that GSA provided a total project 
cost estimate to Congress with the construction funding request. 

[4] Under the Public Buildings Act of 1959, as amended, prospectuses 
are submitted to the Senate Committee on Environment and Public Works 
and the House committee on Transportation and Infrastructure for the 
proposed construction, alteration, or acquisition of a public building 
that exceeds a certain annually adjusted cost threshold. The prospectus 
threshold for projects in fiscal year 2005 was $2,360,000. 

[5] Some courthouse projects are procured using the design-build 
method, which typically requires only one prospectus to be submitted to 
Congress because funding for the site, design, and construction are 
requested at the same time. 

[6] GAO, Executive Guide: Leading Practices in Capital Decision-Making, 
GAO/AIMD-99-32 (Washington, D.C.: Dec. 1998) and GAO, Intercity 
Passenger Rail: Amtrak's Management of Northeast Corridor Improvements 
Demonstrates Need for Applying Best Practices, GAO-04-94 (Washington, 
D.C.: Feb. 27, 2004). 

[7] GSA accounts for inflation in estimates by escalating the project's 
cost to reflect the anticipated construction start date. 

[8] Claims are paid out of available project funds until the funds are 
exhausted. If additional funds are needed, they are paid out of the 
U.S. Treasury Department's Judgment Fund. 

[9] GAO/AIMD-99-32. 

[10] These seven projects represent a nonprobability sample. Results 
from nonprobability samples cannot be used to make inferences about a 
population, because in a nonprobability sample, some elements of the 
population being studied have no chance or an unknown chance of being 
selected as part of the sample. For details on how these projects were 
selected, see appendix I. 

[11] GSA did a life-cycle cost analysis that showed the sustainable 
design features may lower the energy related life cycle costs. 

[12] GAO, Capital Financing: Partnerships and Energy Savings 
Performance Contracts Raise Budgeting and Monitoring Concerns, GAO-05- 
55 (Washington, D.C.: Dec. 16, 2004). 

[13] The courthouse projects that we reviewed often included space for 
the district, magistrate, and bankruptcy courts; U.S. Attorneys Office; 
USMS; Probation and Pretrial Services; and congressional offices. 

[14] Under the Public Buildings Act of 1959, as amended, prospectuses 
are submitted to the Senate Committee on Environment and Public Works 
and the House Committee on Transportation and Infrastructure for the 
proposed construction, alteration, or acquisition of a public building 
that exceeds a certain annually adjusted cost threshold. The prospectus 
threshold for construction projects in fiscal year 2005 was $2.36 
million. 

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