Testimony 

Before the Subcommittee on the 

Legislative Branch, Committee on 

Appropriations, U.S. Senate 

United States Government Accountability Office

GAO

For Release on Delivery 

Expected at 10:30 a.m. EDT 

Tuesday, May 17, 2005 CAPITOL VISITOR 

CENTER 

Priority Attention Needed to 

Manage Schedules and 

Contracts 

Statement of David M. Walker 

Comptroller General of the United States 

GAO-05-714T 
Page 1 GAO-05-714T 

Mr. Chairman and Members of the Subcommittee: 

I am pleased to be here today to discuss GAO’s ongoing work on the 

progress of the Capitol Visitor Center (CVC) project. As you know, we 

have been performing this work in response to requests from members of 

the Capitol Preservation Commission (CPC) and as directed by the 

Conference Report to the Omnibus Consolidated and Emergency 

Supplemental Appropriations Act, 1999 (House Conference Report 105-

825) and the Conference Report on the Legislative Branch Appropriations 

Act, 2004 (House Conference Report 108-279). 

Approved in the late 1990s, CVC is the largest project on the Capitol 

grounds in over 140 years. Its purposes are to provide greater security for 

all persons working in or visiting the U.S. Capitol and to enhance the 

educational experience of visitors who have come to learn about Congress 

and the Capitol building. When completed, this three-story, underground 

facility, located on the east side of the Capitol, is designed to be a seamless 

addition to the Capitol complex that does not detract from the appearance 

of the Capitol or its historic landscaping. According to current plans, it will 

include theaters, an auditorium, exhibit space, a service tunnel for truck 

loading and deliveries, storage, and additional space for use by the House 

and Senate. 

In my testimony today, I will discuss the Architect of the Capitol’s (AOC) 

management of the project’s schedules and contracts; the project’s 

estimated costs, including risks and uncertainties; worker safety issues; 

and AOC’s monthly reporting to Congress on the project. I will also 

discuss recommendations that we have made in previous testimony and 

briefings and the actions AOC has taken in response. We testified on this 

topic before the Subcommittee on the Legislative Branch, House 

Committee on Appropriations, in July 2003,1

 and we have periodically 

briefed congressional representatives, the CVC project executive, and the 

Architect of the Capitol since then. 

My statement is based on our monitoring of the CVC project, which 

included reviewing monthly status reports, contract files, schedules, 

contractors’ cost estimates, other organizations’ construction management 

policies and procedures, industry best practices, and data for construction 

 1

GAO, Capitol Visitor Center: Current Status of Schedule and Estimated Cost, 

GAO-03-1014T (Washington, D.C.: July 15, 2003. 
Page 2 GAO-05-714T 

projects compiled by the Construction Industry Institute and the Bureau of 

Labor Statistics. We have attended regularly scheduled meetings on the 

CVC project’s progress; observed construction work at the site; and 

discussed management, procurement, and safety issues with AOC, 

contractor personnel, as well as experienced construction and contract 

management personnel at other organizations. Additionally, we obtained 

expert assistance in analyzing construction project costs and schedules 

from KPMG, Hulett & Associates, and the Defense Contract Audit Agency 

(DCAA). We did not perform an audit; rather, we performed our work to 

assist Congress in conducting its oversight activities. 

Before I summarize our principal observations and recommendations for 

moving forward, let me briefly set the stage. As previously noted, AOC is 

managing and has overall responsibility for this complex project, but a 

construction management firm, Gilbane Building Company, is providing a 

range of construction management services in support of AOC, including 

coordinating the activities of the major construction contractors, 

monitoring worker safety, and providing AOC with status information for 

reporting to Congress. AOC is implementing the project in two phases, or 

sequences. In June 2002, it awarded the sequence 1 contract for the 

excavation and structural work to Centex Construction Company, and in 

April 2003, it awarded the sequence 2 contract for mechanical, electrical, 

plumbing and interior finishing work to Manhattan Construction 

Company. 

In summary, the CVC project is taking about 2 years longer than planned 

and is expected to cost between about $522 million and $559 million—

significantly more than originally estimated. The majority of delays and 

cost increases were largely outside AOC’s control, but weaknesses in 

AOC’s schedule and contract management contributed to a portion of the 

delays and cost overruns. Of the project’s estimated cost increase, about 

$147 million is due to scope changes, such as the addition of the House 

and Senate expansion spaces; about $45 million to other factors also 

outside or largely outside AOC’s control, such as higher than expected bid 

prices on the sequence 2 contract; and about $58 million to factors more 

within AOC’s control, such as delays. Also, our analysis of CVC worker 

safety data showed that the injury and illness rate for 2003 was about 50 

percent higher for CVC than for comparable construction sites and that 

the rate for 2004 was about 30 percent higher than the rate for 2003. 

Finally, a number of AOC’s monthly reports to Congress have not 

accurately reflected the status of the project’s construction schedules and 

costs and have transmitted inaccurate worker safety data. This has led to 

certain “expectation gaps” within Congress. 
Page 3 GAO-05-714T 

AOC has taken a number of actions to improve its management of the 

project; however, these actions have not yet fully corrected all identified 

problems. To help prevent further schedule delays, control cost growth, 

and enhance worker safety, AOC urgently needs to give priority attention 

to managing the project’s construction schedules and contracts, including 

those contract provisions that address worker safety. These actions are 

imperative if further cost growth, schedule delays, and worker safety 

problems are to be avoided. AOC also needs to see that it reports accurate 

information to Congress on the project. Furthermore, decisions by 

Congress will have to be made regarding the additional funding needed to 

complete construction and address any risks and uncertainties that arise. 

According to AOC, the entire base project is about 60 percent complete.2

Except for some punch-list items, such as fixing water leaks, construction 

work under the sequence 1 contract is now complete. This work includes 

the basic structure, the truck and Library of Congress tunnels, and the 

East Front interface. AOC and its contractors also completed work 

associated with the Inauguration. Work has started on the sequence 2 

contract, including fitting out and finishing the basic structure and the 

Library of Congress tunnel and constructing the utility tunnel and space 

for the exhibits. AOC has just made contractual arrangements for fitting 

out and finishing the Senate and House expansion spaces and is now 

procuring the House Connector tunnel and the connection between the 

Library of Congress tunnel and the Jefferson building. 

AOC’s scheduled completion date for CVC is now September 2006, nearly 

20 months later than originally planned. We believe, given past problems 

and future risks and uncertainties, that the completion date may be 

delayed until sometime between December 2006 and March 2007. 

Additionally, AOC’s scheduled completion date for the interior of the 

House and Senate expansion spaces is March 2007. 

The project’s schedule delays are due in part to scope changes, design 

changes, and unforeseen conditions beyond AOC’s control (e.g., adding 

 2

The base project includes a finished visitor center shell and core, an extended loading 

dock service tunnel, exterior finishes, improvements to the East Plaza, construction of 

unfinished House and Senate expansion space shell, exhibits, technical security systems, a 

utility tunnel, and a connecting tunnel to the Library of Congress. The base project does not 

include other items, such as finishing the House and Senate expansion space and certain 

security-related enhancements. 

Enhanced Schedule 

Management Needed 
Page 4 GAO-05-714T 

the Senate and House expansion spaces and encountering underground 

obstructions). However, factors more within AOC’s control also 

contributed to the delays. First, the original schedule was overly 

optimistic. Second, AOC has had difficulty obtaining acceptable, 

contractually required schedules from its contractors, such as a master 

summary schedule from its construction management contractor. In 

addition, AOC and its contractors did not adhere to contract provisions 

designed for effective schedule management, including those calling for 

monthly progress review meetings and schedule updates and revisions. 

AOC and its construction management contractor also had difficulty 

coordinating the work of the sequence 1 and 2 contractors and did not 

systematically track and document delays and their causes as they 

occurred or apportion time and costs to the appropriate parties on a 

timely basis. Additionally, AOC has not yet reached full agreement with 

CPC on the extent to which construction must be completed before the 

facility can be opened to the public, and AOC has not yet developed an 

overall summary schedule that links the completion of construction with 

the steps necessary to prepare CVC for facility operations. Finally, AOC 

needs to fully implement our recommendation that it develop plans to 

mitigate the project’s remaining risks and uncertainties, such as shortages 

in the supply of stone or skilled stone workers, unforeseen conditions 

associated with the remaining underground tunnels, and commissioning 

the building in the allotted time. 

We have made numerous recommendations to improve schedule 

management, and AOC has taken actions to implement most of them. We 

believe, however, that both AOC and its construction management 

contractor will need to sustain their attention and apply additional effort 

to managing the project’s schedule, as well as fully implement our 

recommendations, to help keep the project on track and as close to budget 

as possible. More specifically, AOC needs to give priority attention to: 

• obtaining and maintaining acceptable project schedules, including 

reassessing the times allotted for completing sequence 2 work; 

• aggressively monitoring and managing contractors’ adherence to the 

schedule, including documenting and addressing the causes of delays; 

• developing and implementing risk mitigation plans; 

• reaching agreement on what project elements must be complete before 

CVC can open to the public; and 
Page 5 GAO-05-714T 

preparing a summary schedule, as Congress requested, that integrates the 

major steps needed to complete CVC construction with the steps 

necessary to prepare for operations. 

AOC is relying on contractors to design, build, and help manage CVC’s 

construction and help prepare for its operation. AOC has obligated over 

$350 million for contracts and contract modifications for these activities. 

We found that AOC needed to take additional steps to ensure that it was 

(1) receiving reasonable prices for proposed contract modifications, (2) 

obtaining adequate support for contractors’ requests for reimbursement of 

incurred costs, (3) adequately overseeing its contractors’ performance, 

and (4) taking appropriate steps to see that contractual work is not done 

before it is appropriately authorized under contractual arrangements. 

• Initially, AOC was not preparing independent government estimates as 

part of its price analyses for proposed modifications to the two major 

contracts. In early 2004, AOC hired an employee for the CVC staff with 

contract management experience, and AOC has improved its capacity to 

obtain reasonable prices by, among other things, preparing government 

estimates as part of its effort to evaluate the reasonableness of prices 

offered by the contractors for the proposed modifications. 

• Although most CVC work is being done under fixed price contracts, for 

which payment is not based on incurred costs, AOC has received or is 

anticipating requests for reimbursement of over $30 million in costs that 

the contractors say they incurred because of delays.3

 In addition, AOC has 

awarded some contract modifications for unpriced work that will require 

reliable information on incurred costs. According to the Defense Contract 

Audit Agency, several concerns relating to the contractors’ accounting 

systems need to be addressed to ensure the reliability of the contractors’ 

incurred cost information. 

• AOC has continued to experience difficulty getting fully acceptable 

performance from contractors. For example, as of April 30, 2005, the 

construction management contractor had not provided an acceptable 

master schedule identifying appropriate links between tasks and key 

milestones, and it has not been providing AOC with accurate safety data 

for an extended period of time. Similarly, one of AOC’s major construction 

 3

Reimbursements for the costs of non-weather-related delays not attributable to the 

contractor are standard practice in the construction industry. 

Stronger Contract 

Management Needed 
Page 6 GAO-05-714T 

contractors had not corrected recurring safety concerns over an extended 

period. 

• One of AOC’s CVC consultants began work several months before AOC 

had awarded a contract to it authorizing the work. AOC agreed to take 

action to prevent this type of problem from recurring. 

We have made several recommendations to enhance AOC’s contract 

management. AOC has generally agreed and taken action to implement 

these recommendations. For example, it has enhanced its capacity to 

review cost-related data submitted by contractors with requests for 

reimbursement based on incurred costs, and it has better evaluated its 

construction management contractor’s performance and taken action to 

obtain improvements. To help prevent further schedule delays and control 

cost growth, AOC needs to aggressively manage its contractors’ 

performance, particularly in the areas of managing schedules and 

obtaining reasonable prices on contractual actions, and continue to ensure 

that contractors’ requests for payment based on incurred costs are 

adequately evaluated. It also needs to ensure that its contractors report 

accurate safety data and promptly act to correct safety concerns. 

We currently estimate that the cost to complete the construction of the 

CVC project, including proposed additions to its scope, is about $522 

million without any allowance for risks and uncertainties.4

 Of this amount, 

$483.7 million has been provided to date.5

 In November 2004, we estimated 

that the cost to complete the scope of work approved at that time was 

likely to be about $515 million, without an allowance for risks and 

uncertainties. Since November 2004, AOC and the U.S. Capitol Police have 

proposed about $7 million in scope changes that we included in our 

 4

Our November 2004 estimate of $515 million was similar to AOC’s estimate based on work 

done by one of its consultants; however, except for the $4.2 million in additional scope 

items, AOC has not requested funds to cover risks and uncertainties provided for in our $44 

million. 

5

Public Law 108-447, enacted in December 2004, provided that up to $10.6 million could be 

transferred from funds appropriated for Capitol Buildings operations and maintenance to 

CVC upon the approval of the House and Senate Committees on Appropriations. In March 

2005, AOC requested that about $4 million of these funds be transferred to CVC, including 

some funds for construction-related work, such as design of the gift shop space. As of May 

12, the House Committee had not yet approved this transfer, and none of the $10.6 million 

has been included in the $483.7 million figure above. 

Project Costs and 

Funding Provided as 

of May 2005 
Page 7 GAO-05-714T 

current estimate, bringing it to $522 million.6 However, the project 

continues to face risks and uncertainties, such as unforeseen conditions, 

scope gaps and changes, and possible further delays.7

 To provide for these, 

we estimated in November 2004 that an additional $44 million would likely 

be needed, bringing our estimate of the total cost to about $559 million. 

We continue to believe that this estimate of the project’s total costs is 

appropriate. We have not increased our allowance for risks and 

uncertainties in response to the recent requests for $7 million in scope 

changes because we consider such changes among the risks and 

uncertainties that the project faced in November. 

Over the years, CVC construction costs have increased considerably. Most 

of these costs were outside or largely outside AOC’s control, but other 

costs were more within its control. About $147 million of the cost increase 

was due to changes in the project’s scope, many of which were for security 

enhancements following September 11 and the anthrax attacks in October 

2001. Congress added the House and Senate expansion spaces and the 

Library of Congress tunnel to the project’s scope after the original 

project’s cost was estimated; similarly, the Department of Defense 

recommended and funded an air filtration system for the facility. Other 

factors also outside or largely outside AOC’s control contributed about $45 

million to the increase. For example, bid prices for the sequence 1 and 2 

contracts exceeded budgeted costs, and unforeseen field conditions, such 

as underground obstructions, necessitated additional work. Finally, 

factors more within AOC’s control accounted for about $58 million of the 

expected additional project costs. For example, the project experienced 

significant delays during sequence 1, and we expect AOC will incur 

additional costs in the future because we believe the sequence 2 work will 

not be done by AOC’s September 2006 completion date; slow decisionmaking by AOC also contributed to higher costs. 

In its fiscal year 2006 budget request, AOC asked Congress for an 

additional $36.9 million for CVC construction. AOC believes this amount 

 6

Last week, Congress enacted legislation that provided the additional funding requested by 

the Capitol Police for security monitoring. Public Law 109-13, Emergency Supplemental 

Appropriations for Defense, the Global War on Terror, and Tsunami Relief, 2005 (May 11, 

2005). 

7

Other risks and uncertainties that continue to face the project include, but are not limited 

to, shortages in the supply of stone and skilled stone workers, possible additional 

requirements for life safety or security changes, unknown operator requirements, and 

contractor coordination issues. 
Page 8 GAO-05-714T 

will be sufficient to complete the project’s construction and, if approved, 

will bring the total funding provided for the project to $520.6 million. 

AOC’s request includes the $4.2 million for potential additions to the 

project’s scope (e.g., congressional seals, an orientation film, and 

backpack storage space), but does not include $1.7 million for the air 

filtration system—-an amount that AOC thought it would not need and 

returned to DOD, but that we believe AOC will still likely need. AOC 

believes that it could obtain these funds from DOD if needed. Thus, with a 

$1.7 million increase for the air filtration system, the total estimated cost 

to complete the project’s construction would be the $522.3 million cited 

above without provision for risks and uncertainties.8

To continue to move the project forward, Congress will have to consider 

the additional funding AOC has requested for fiscal year 2006 to complete 

the project, including the $4.2 million in additional scope items. Through 

effective risk mitigation, as we have recommended, and effective 

implementation of our other recommendations for enhancing schedule 

and contract management, AOC may be able to avoid some of the $44 

million that we allowed for risks and uncertainties. However, given the 

project’s complexity and the additional requests for funds already made 

and anticipated, we believe AOC will likely need much of this $44 million 

even with effective implementation of our recommendations. Already, it 

appears that AOC may need additional funds for sequence 2 changes in 

fiscal year 2005. For example, as of April 30, 2005, AOC had identified 

proposed changes to the sequence 2 contract that it considered necessary 

and expected to cost about $13.8 million. This sum is about $700,000 less 

than the $14.5 million AOC has available during fiscal year 2005 for 

sequence 2 changes. 

Because the number of construction workers at the CVC site is soon 

expected to increase significantly, worker safety will continue to be an 

important issue during the remainder of the project. Our review of worker 

safety issues found that the construction management contractor’s 

monthly CVC progress reports contained some inaccurate data for key 

measures of worker safety, including injuries and illnesses and lost time. 

For example, the contractor reported 3 lost-time incidents for 2004, but 

 8

Essentially, AOC’s $36.9 million fiscal year 2006 budget request was consistent with our 

$515.1 million estimated cost at completion except that it included $4.2 million for the 

additional scope items and excluded the $1.7 million for filtration—$517.6 million less $4.2 

million plus $1.7 million equals $515.1 million. 

Worker Safety Issues 
Page 9 GAO-05-714T 

our analysis identified 45 such incidents. These inaccuracies resulted in 

both overstatements and understatements of rates.9

 For instance, the 

contractor reported a rate of 6.3 injuries and illnesses for April 2004, 

whereas our analysis identified 12.5.10 The construction management 

contractor attributed the inaccuracies to key data missing from its 

calculations, unawareness of a formula change that began in 2002, 

mathematical errors, and poor communication with the major 

construction contractors. 

According to our analysis, the rates for injuries and illnesses and for lost 

time were higher for CVC than for comparable construction sites. For 

2003, the injury and illness rate was about 50 percent higher, and the losttime rate was about 160 percent higher.11 Additionally, both the numbers 

and the rates for injuries and illnesses and for lost time worsened from 

2003 to 2004. For example, the injury and illness rate increased from 9.1 in 

2003 to 12.2 in 2004, and the lost-time rate increased from 8.1 to 10.4. AOC 

and its contractors have taken some actions to promote and manage safety 

on the site, such as conducting monthly safety audits and making 

recommendations to improve safety. However, at the time of our review, 

neither AOC nor its construction management contractor had analyzed the 

results of the monthly safety audits to identify trends or concerns, and 

neither had reviewed the safety audit findings in conjunction with the 

injury and illness data. Our analysis of key safety audit data for the first 10 

months of 2004 identified about 700 safety concerns, the most frequent of 

which was inadequate protection against falls. Furthermore, AOC had not 

fully exercised its authority to have the contractors take corrective actions 

to address recurring safety concerns. 

 9

The Bureau of Labor Statistics (BLS) calculates the number of injury/illness incidents per 

100 full-time workers as follows: (N/EH) x 200,000, where (N) = number of 

injuries/illnesses, (EH) = total hours worked by all employees during the calendar year, and 

200,000 = base for 100 equivalent full-time workers (working 40 hours per week, 50 weeks 

per year). BLS calculates the number of lost-time incidents per 100 full-time workers as 

follows: (LT/EH) x 200,000 where (LT) = cases of (1) days away from work, (2) restricted 

work or (3) work transfer, (EH) = number of employee hours for the desired period and 

200,000 = base for 100 equivalent full-time workers (working 40 hours per week, 50 weeks 

per year). 

10In early 2005, the major contractors provided us with updated data for injuries and 

illnesses and lost time in 2004. We used these data to recalculate the 2004 rates. For 

example, the monthly rate for injuries and illnesses in April 2004 increased to 15.7. 

11The CVC rates are sensitive to small variations in the number of injuries, illnesses, or losttime incidents for a given year. 
Page 10 GAO-05-714T 

We recommended that, to improve safety and reporting, AOC ensure the 

collection and reporting of accurate injury and illness and lost-time data, 

work with its contractors to develop a mechanism for analyzing the data 

and identifying corrective actions, and more fully exercise its authority to 

take appropriate enforcement actions when warranted. AOC agreed with 

our recommendations and initiated corrective actions. However, follow-up 

work that we did in early 2005 at AOC’s request indicated the corrective 

actions had not yet fully eliminated errors in reporting. AOC agreed that 

continued action on our recommendations was essential. 

Both AOC and its construction management contractor prepare monthly 

progress reports on CVC. AOC relies heavily on its contractor for the 

information it puts into its own reports, which it sends to Congress. We 

have found that AOC’s reports have sometimes failed to identify problems, 

such as cost increases and schedule delays. This has resulted in certain 

“expectation gaps” within Congress. We have suggested to AOC that its 

reports could be more helpful to Congress if, for example, they discussed 

critical issues facing the project and important upcoming decisions. AOC 

has been making improvements to its monthly reports and has agreed to 

continue doing so. 

Mr. Chairman, this completes my prepared statement. We would be happy 

to answer questions that you and other Subcommittee Members may have. 

For further information about this testimony, please contact Bernard 

Ungar at (202)512-4232 or Terrell Dorn at (202) 512-6923. Other key 

contributors to this testimony include Shirley Abel, Timothy DiNapoli, 

Brett Fallavollita, Jeanette Franzel, Jackie Hamilton, Bradley James, David 

Merrill, Scott Riback, Susan Tindall, and Kris Trueblood. 

Reporting to Congress 

Contact and 

Acknowledgments 

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