FEDERAL REAL 

PROPERTY

GSA Could Better 

Identify Risks of 

Unforeseen 

Conditions in Repair 

and Alteration 

Projects

Report to Ranking Member, Committee 

on Homeland Security and 

Governmental Affairs, U.S. Senate

March 2016

GAO-16-273

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-16-273, a report to the

Ranking Member, Committee on Homeland 

Security and Governmental Affairs, U.S. 

Senate

March 2016

FEDERAL REAL PROPERTY

GSA Could Better Identify Risks of Unforeseen 

Conditions in Repair and Alteration Projects

Why GAO Did This Study

GSA annually spends hundreds of 

millions of dollars making major and 

minor repairs and alterations to the 

more than 1,500 federally owned 

buildings that it holds. GAO’s past work 

has indicated that GSA sometimes 

encounters “unforeseen site 

conditions”—conditions that are 

different from what was expected—in 

performing this work. Unforeseen 

conditions can add both time and cost 

to repair and alteration projects. GAO 

was asked to review issues related to 

tenant repair and alteration projects. 

This report addresses (1) information 

about the extent, impact, and cause of 

unforeseen site conditions on selected

projects, and (2) how GSA identifies 

and assesses the risks of unforeseen 

conditions.

GAO reviewed 18 non-generalizable

repair and alteration projects funded

from fiscal year 2010 to 2013, valued 

at $2 million or more; interviewed GSA 

project managers and contracting 

officers about these projects; reviewed 

project documents; and interviewed a 

non-generalizable sample of

organizations and individuals 

knowledgeable about the construction 

industry (industry stakeholders).

What GAO Recommends

GAO recommends that GSA develop 

and implement a plan for analyzing 

information it collects to identify the 

role of unforeseen conditions in repair 

and alteration projects and the specific

causes and impacts of these 

conditions. GSA agreed with the 

recommendation and the agency 

stated it will develop a plan to address 

it.

What GAO Found

Both industry stakeholders and General Services Administration (GSA) officials 

told GAO that unforeseen conditions in repair and alteration projects are 

common. Such conditions, for example, included an unknown wood subflooring 

discovered during demolition work. Among the impacts identified by the 

stakeholders were increased project costs and schedule delays. In general, data 

are limited on unforeseen conditions since GSA does not analyze this type of 

information. Most of the repair and alteration projects GAO reviewed—11 of 18 

projects--experienced an unforeseen condition. The overall impact of the 

unforeseen conditions on the 18 projects GAO reviewed was largely limited. On 9

of the 11 projects that experienced such conditions, the cost to remediate them

accounted for 1 to 5 percent of the project’s original construction contract award 

amount, and on one project the cost was approximately 6 percent. These 

amounts were below the typical 10 percent construction contingency GSA adds 

to project costs. Schedule impacts were also limited: 4 of the 11 projects

experienced delays ranging from 23 to 105 days. GAO also found that three 

projects reviewed that did not experience unforeseen conditions were attached to 

larger projects that did experience these conditions. In two of these larger 

projects the cost increases from unforeseen conditions were about $2 million 

each. Incomplete building drawings and lack of building information were among 

the possible causes of the unforeseen conditions experienced in the projects 

GAO reviewed.

GSA has a variety of methods to identify and assess risks of unforeseen 

conditions. GSA’s Project Planning Guide states that, among other things,

facility condition assessments and site surveys should be conducted initially.

GSA guidance also calls for preparation of a project management plan (PMP), 

which includes a risk assessment matrix. GAO found that, in general, GSA used 

at least one of its risk identification methods on the projects reviewed. For 

example, GAO found that GSA prepared PMPs for 13 of the 18 projects 

reviewed. Three of the remaining five projects were attached to larger projects

that had PMPs and GSA was unable to provide a PMP for the other two projects. 

However, GSA’s risk identification was sometimes inconsistent with unforeseen 

conditions that were actually experienced. For example, on 11 of the projects, 

GSA did not identify risks that later materialized during the project. The 

Standards for Internal Control in the Federal Government state that agencies

should comprehensively identify risks using a variety of quantitative and 

qualitative methods. GSA officials told GAO that contract change orders are used

to document unforeseen conditions that result in a change to the contract, but

that these change orders are not analyzed to identify what role these conditions 

represent on projects or their causes or impacts. As shown in the projects GAO 

reviewed, unforeseen conditions can delay schedules and increase project 

costs—in some cases in the millions of dollars. Analyzing project information 

such as change orders would allow GSA to better know what role unforeseen

conditions play in repair and alteration projects and the magnitude of this risk.

View GAO-16-273. For more information, 

contact David J. Wise at (202) 512-2834 or 

wised@gao.gov.
Page i GAO-16-273 Federal Real Property

Letter 1

Background 5

Unforeseen Site Conditions Are Common, but Impacts on 

Reviewed Projects Were Limited 11

GSA Has a Variety of Methods to Identify and Assess Risks of 

Unforeseen Conditions but Risk Identification Could Benefit 

from Analysis of Project Information 20

Conclusions 29

Recommendation for Executive Action 30

Agency Comments 30

Appendix I Objectives, Scope, and Methodology 32

Appendix II Description of the General Services Administration’s (GSA) Repair 

and Alteration Projects GAO Reviewed 40

Appendix III Comments from the General Services Administration 42

Appendix IV GAO Contact and Staff Acknowledgments 43

Tables

Table 1: Examples of Unforeseen Site Conditions Experienced on 

Selected General Services Administration Repair and 

Alteration Projects GAO Reviewed 13

Table 2: Industry Stakeholders Contacted for GAO’s Repair and 

Alterations Engagement 36

Figures

Figure 1: Phases and Selected Activities in the General Services 

Administration’s Planning and Execution of Repair and 

Alteration Projects 9

Figure 2: Cost Increases from Unforeseen Site Conditions on the 

General Services Administration’s Repair and Alteration 

Projects GAO Reviewed 15

Contents
Page ii GAO-16-273 Federal Real Property

Figure 3: Possible Causes of Unforeseen Site Conditions in the 

General Services Administration’s Repair and Alteration 

Projects GAO Reviewed 18

Figure 4: Risks Identified by the General Services Administration 

and Unforeseen Site Conditions Experienced on Repair 

and Alteration Projects GAO Reviewed 24

Abbreviations

FAR Federal Acquisition Regulation 

FBF Federal Buildings Fund 

GSA General Services Administration

HVAC heating, ventilation, and air conditioning 

PDRI Project Definition Rating Index 

PMI Project Management Institute 

PMP project management plan 

RWA reimbursable work authorization 

SSA Social Security Administration 

USMS U.S. Marshals Service

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-16-273 Federal Real Property

441 G St. N.W.

Washington, DC 20548

March 17, 2016

The Honorable Thomas R. Carper

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

Dear Senator Carper:

The General Services Administration (GSA) annually spends hundreds of 

millions of dollars making major and minor repairs and alterations to the 

more than 1,500 federally owned buildings that it holds.1 These buildings 

are used for a variety of purposes—from office space to warehouses—

and are critical for federal agencies to fulfill their missions. Some of this 

work is initiated by GSA and some at the request of tenant agencies.

GSA’s repair and alterations program has become increasingly important 

over time as the inventory of buildings continues to age and deterioration 

and deferred maintenance increase. GSA estimated that at the end of 

fiscal year 2015 it had over $1.2 billion in deferred maintenance and 

repair work.2 This figure is for deferred maintenance and repair work that 

was categorized as needing to be performed immediately to restore or 

maintain the building inventory in acceptable condition.

Our past work has indicated that GSA sometimes encounters “unforeseen 

site conditions” in performing repair and alteration work.3 In general, 

unforeseen site conditions are different from what was expected or what 

 1

This report discusses federally owned buildings that GSA holds in its inventory. It does 

not include leased buildings or space.

2

This estimate is for immediate repairs and alterations to bring a building or other asset up 

to an acceptable condition rating. It does not include funding required for future repair and 

maintenance needs.

3

See for example GAO, Recovery Act: GSA’s Courthouse Projects Illustrate Opportunities 

to Improve Management Practices and Analyze Environmental Outcomes, GAO-15-307

(Washington, D.C.: Feb. 12, 2015).

Letter
Page 2 GAO-16-273 Federal Real Property

may have been in a project’s plans or specifications.4 In some cases, 

unforeseen site conditions are the result of greater than expected levels 

of deterioration or the result of hazardous materials, such as asbestos, in

buildings. In other cases, such conditions may be the result of previous 

repairs or alterations that were not recorded on building drawings. Once 

unforeseen site conditions are encountered they can add costs to 

projects, delay project schedules, or cause other changes. For example, 

in February 2015, we reported that a courthouse modernization project 

we reviewed was completed more than 6 months after originally planned 

and required an additional $10 million in funds, in part, to address 

unforeseen building conditions.5 In 2001, the GSA Inspector General’s 

office, which reviewed 45 repair and alteration projects, reported that 

unforeseen site conditions in 10 projects completed in fiscal years 1998 

and 1999 accounted for about $22 million, or about 43 percent, of cost 

growth on these projects.6

You asked that we review issues related to tenant repair and alteration 

work. This report addresses (1) information about the extent, impact, and 

cause of unforeseen site conditions during repair and alteration projects 

in federally owned buildings held by GSA and (2) how GSA identifies and 

assesses the risks of unforeseen site conditions.

To identify information about the extent, impact, and cause of unforeseen 

site conditions, we selected and reviewed 18 repair and alteration 

 4

For purposes of this report, we will use the term “unforeseen site conditions” to refer to 

differing site conditions as well as unforeseen site conditions. The Federal Acquisition 

Regulation (FAR) uses the term “differing site condition” to describe situations that we 

considered similar to unforeseen site conditions. The FAR definition for differing site 

condition is “(1) subsurface or latent physical conditions at the site which differ materially 

from those indicated in this contract, or (2) unknown physical conditions at the site, of an 

unusual nature, which differ materially from those ordinarily encountered and generally 

recognized as inhering in work of the character provided for in the contract.”

5

See GAO-15-307.

6

GSA, Office of Audits, Office of Inspector General, Audit of PBS’ Initiatives to Minimize 

Cost Growth on Prospectus Level Repair and Alteration Projects, Report Number 

A000890/P/H/R01008, Feb. 16, 2001. According to GSA officials, there would likely be 

fewer and less costly change orders, including those resulting from unforeseen site 

conditions, experienced on repair and alteration projects today compared to the time the 

Inspector General’s report was written. GSA officials said the agency now uses different 

delivery methods to procure services that allow for the sharing of risk between the building 

owner and the contractor, methods that, according to GSA officials, results in fewer 

change orders. 
Page 3 GAO-16-273 Federal Real Property

projects across four GSA regions (Mid-Atlantic, Pacific Rim, National 

Capital, and Northeast and Caribbean Region). The projects included 

three prospectus7 projects and 15 reimbursable work authorization 

(RWA)8 projects. The projects we reviewed had values of at least $2 

million and received funding from fiscal year 2010 to fiscal year 2013.9

We chose this period to help ensure that the projects selected had 

progressed into the construction phase (where unforeseen site conditions 

might be identified) and yet were recent enough that electronic records 

were likely to be available.10 We excluded projects that from their 

descriptions appeared to be for services and not construction, and we 

excluded projects that appeared to involve multiple sites. The regions 

selected accounted for the highest dollar amount of repair and alteration 

projects. We interviewed GSA project managers and contracting officers 

for these 18 projects and reviewed project documents to determine if the 

 7

Prospectus-level projects involve major work or acquisitions that are estimated to cost 

more than a statutorily prescribed amount, which GSA’s Administrator is authorized to 

adjust annually. Over the 2010 to 2013 period the threshold for prospectus projects 

ranged from $2.79 million to $2.85 million. Building repairs and alterations that are 

expected to cost more than the prospectus-level threshold must be submitted to certain 

congressional committees for authorization. 

8

An RWA is an agreement between GSA and a client agency, whereby GSA agrees to 

provide goods and services and a client agency agrees to reimburse GSA for the cost of 

these goods and services, indirect costs, and GSA fees. Work can vary from installation of 

equipment to major renovations. GSA has different types of RWAs. For purposes of this 

study we reviewed A, B, and N types since these are repair and alteration projects that are 

not recurring and have costs that can be separately identified from other recurring costs. 

A-type RWAs are for projects funded by both GSA and a tenant agency and are for a onetime need. B-type RWAs are used for projects that are funded by either the tenant agency 

or by the tenant agency and GSA. N-type RWAs fund standalone projects—that is, not 

associated with other repair or alteration projects—and are fully funded by the tenant 

agency.

9

On one project, the Daniel P. Moynihan U.S. Courthouse in New York City, $2 million in 

appropriations were received for the design phase. According to GSA, other funding for 

this project came from reprogramming funds from other projects. We considered this a 

prospectus project since a prospectus was prepared. However, the project manager told 

us it was not clear if a prospectus for construction was ever approved by the relevant 

congressional committees. In commenting on this report, GSA officials told us a 

prospectus was prepared for this project but it was not funded. Instead, GSA 

reprogrammed monies to do the project—one to undertake the space build-out and 

another to do the pavilion.

10GSA uses an electronic project management system to record project information and to 

manage projects. According to GSA, this system was developed in 2009 and is now being 

used to collect information on all repair and alteration projects with a value of $25,000 or 

more. 
Page 4 GAO-16-273 Federal Real Property

projects had encountered unforeseen site conditions. We also interviewed 

these officials to identify the nature of any cost, schedule, or scope 

impacts from the unforeseen site conditions encountered. To identify the 

causes of unforeseen site conditions we discussed with project managers 

and contracting officers the actual unforeseen site conditions experienced 

and their possible causes and coded these into categories of unforeseen 

site condition causes. Finally, we contacted 19 organizations and 

individuals with knowledge of or experience in the construction industry 

(industry stakeholders) to obtain their views on unforeseen site 

conditions. These industry stakeholders were selected based on asking 

GSA officials who would be most appropriate to contact, asking industry 

stakeholders about appropriate organizations or individuals to contact, 

and obtaining referrals from various professional organizations. We 

interviewed or received written responses to questions from 11 industry 

stakeholders. The results of our work are not generalizable to the 

universe of repair and alteration projects or the views of all industry 

stakeholders.

To identify how GSA identifies and assesses the risks of unforeseen site 

conditions, we reviewed documents related to GSA’s capital-planning 

process and project management requirements. We also reviewed 

planning and risk assessment documents for the projects we reviewed.

We assessed whether or not GSA’s practices and procedures on the 18 

projects we reviewed generally used a risk assessment tool as part of the 

project development process. We also interviewed officials in GSA 

headquarters and five regional offices (the four regions associated with 

the projects we reviewed plus one additional region) to discuss how GSA 

identifies and assesses risks on repair and alteration projects. The 

analysis of the risk assessment process and use of risk assessment tools 

included a review of documentation related to the project and GSA 

processes but was primarily focused on the project management plan as 

this was the key document that includes a risk assessment. Our analysis 

of project risks and causes of unforeseen site conditions included a 

comparison of the possible causes of unforeseen site conditions that 

were experienced on the 18 projects we reviewed and whether those 

same causes were identified as part of project planning. As part of 

evaluating how GSA identifies and assesses project risks to determine if 

improvements could be made, we reviewed Standards for Internal Control 

in the Federal Government and GAO’s Cost Estimating and Assessment 

Guide: Best Practices for Developing and Managing Capital Program 
Page 5 GAO-16-273 Federal Real Property

Costs (Cost Guide).

11 The Standards for Internal Control in the Federal 

Government provides the overall framework for establishing and 

maintaining an effective internal control system and, among other things, 

the Cost Guide addresses generally accepted best practices for ensuring 

credible program cost estimates and the role of risks and risk assessment 

in developing cost estimates. Appendix I contains a more complete 

discussion of our objectives, scope, and methodology and appendix II 

provides a brief description of the projects we reviewed.

We conducted this performance audit from February 2015 to March 2016 

in accordance with generally accepted government auditing standards.

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

In fiscal year 2014, GSA had over 1,500 federally owned buildings in its 

inventory. These buildings are occupied by a wide variety of federal 

agencies and are used to fulfill agency missions. In some instances, 

these buildings are old and in significant need of repair, renovation, or 

modernization. For example, according to GSA, the average age of its 

inventory is 49 years, and funding difficulties have led to deterioration of 

an already aged portfolio. In addition, GSA reports that more than a fourth 

of its inventory of federally owned buildings is listed in or eligible for the 

National Register of Historic Places, the nation’s listing of historic 

properties, and approximately half of this inventory is more than 50 years 

old.12 We have previously reported that deferring maintenance and repair 

 11GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999), and GAO, GAO Cost Estimating and Assessment 

Guide: Best Practices for Developing and Managing Capital Program Costs, GAO-09-3SP

(Washington, D.C.: March 2009).

12According to GSA officials, generally buildings need to be 50 years or older to be 

nominated to the National Register of Historic Places, although they can be nominated if 

they are less than 50 years old for exceptional significance. GSA told us the average age 

of its historical inventory is 91 years old—1925 being the average construction date. Using 

1965 as the cutoff date for 50 years old, GSA has 18 under-50-year-old buildings that are 

historic (dates range from 1966 to 1978), or 96 percent of GSA’s 482 historic buildings are 

over 50 years old. 

Background
Page 6 GAO-16-273 Federal Real Property

can reduce the overall life of federal facilities, lead to higher costs in the 

long term, and pose risks to safety and agencies’ missions.13

GSA addresses the need for repairs and alterations in the buildings in its 

inventory through its repair and alteration program. The program is 

implemented through repair and alteration projects in all 11 of GSA’s 

regional offices. In fiscal year 2015, about $800 million was appropriated 

from the Federal Buildings Fund (FBF) to perform major and minor 

repairs and alterations. This is down slightly from the $1.1 billion

appropriated in fiscal year 2014. GSA can make repairs or alterations on 

its own initiative or at the request of tenant agencies.14 Repairs or 

alterations made on GSA’s own initiative can be classified as “major”—

that is, exceed the current $2.85 million threshold requiring preparation of 

a prospectus that is submitted to Congress for approval—or “minor.” 

Minor repair or alteration projects are those projects where the 

construction costs exceed $25,000 but are less than the prospectus level 

threshold. According to GSA officials, major repair and alteration projects, 

among other things, primarily focus on reducing the agency’s real 

property footprint, achieving energy savings, and improving the condition 

of and protection of public assets and occupants’ health and safety. Minor 

repair and alteration projects primarily focus on building repairs and 

equipment and other replacement issues and funding is requested as a 

lump sum dollar amount for the program. Financing for GSA-initiated 

repair and alteration work comes from the FBF.

15 The FBF is a fund that 

 13GAO, Federal Real Property: Improved Transparency Could Help Efforts to Manage 

Agencies’ Maintenance and Repair Backlogs, GAO-14-188 (Washington D.C.: Jan. 23,

2014).

14GSA has the authority to delegate some repairs and alteration work directly to tenant 

agencies. GSA officials told us this delegation is not used very often. According to GSA 

officials, GSA did not authorize delegation of repair and alteration work to any agencies in 

fiscal years 2014 and 2015, and the agency last delegated authority for repair or alteration 

work in fiscal year 2013. GSA’s Delegation of Authority for Individual Repair and Alteration 

Guide requires that, among other things, agencies only request a delegation of authority 

for a specific repair or alteration, the estimated cost of the project not exceed $1 million 

unless approved by the GSA Administrator, and the delegation be in the best interest of 

the government. In January 2015, GSA also provided a blanket delegation of authority for 

agencies to perform small alteration work valued at $2,500 or less.

15We have previously reported on factors affecting the resources in the FBF. See GAO, 

Federal Buildings Fund: Improved Transparency and Long-Term Plan Needed to Clarify 

Capital Funding Priorities, GAO-12-646 (Washington, D.C.: Aug. 2, 2012) and GAO, 

Capital Financing: Alternative Approaches to Budgeting for Federal Real Property, 

GAO-14-239 (Washington, D.C: Mar. 12, 2014).
Page 7 GAO-16-273 Federal Real Property

is primarily financed by rents received from other agencies and it was 

authorized and established by the Public Buildings Act Amendments of 

1972.16 Instead of GSA’s receiving direct appropriations, the FBF 

operates as the primary means of financing the operating and capital 

costs associated with federal space, although GSA sometimes receives 

supplemental appropriations to meet repair or new construction needs, 

such as appropriations received from the American Recovery and 

Reinvestment Act of 2009. Congress exercises control over the FBF 

through the appropriations process that sets annual limits—called 

obligational authority—on how much of the fund can be obligated for 

various activities.

Repair and alteration work is also performed at the request of tenant 

agencies. This work is done under an RWA.17 RWA work can range from 

installation of equipment and security upgrades to major renovations of 

buildings. According to GSA’s RWA National Policy Document, to be 

accepted by GSA, an RWA must meet certain criteria, including that there 

is a bona fide need for the work, there is a preliminary scope of work that 

clearly describes the objectives and requirements of the customer 

request, a cost estimate, and proper funding certification and client 

signature. According to the RWA National Policy Document, the signed 

RWA authorizes GSA to execute the scope of the client agency request 

based on the authorized amount. The work is done on a reimbursable 

basis, and GSA bills the client agency as expenses are incurred. RWAs 

can be amended for changes in scope of work or authorized amounts as 

long as funding is legally available for that purpose. The RWA National 

Policy Document indicates there are four categories of RWAs—

severable, non-severable, recurring, and non-recurring.18 Non-recurring 

 16Pub. L. No. 92-312. As of September 30, 2015, the FBF had a balance of about $7.8 

billion.

17GSA is authorized to provide special services, not included in the standard level user 

charge (rent), to other federal agencies on a reimbursable basis. 40 U.S.C. § 592(b)(2). 

According to GSA, RWA work may also be performed when the finished project will be in 

space not under the jurisdiction, custody, or control of GSA. See 31 U.S.C. § 1535.

18Severable RWAs are those RWAs in which the client agency receives value as the 

service is rendered. Non-severable RWAs are those in which the client agency receives 

value only when the entire service is performed. Recurring RWAs provide services to 

client agencies where the costs of those services cannot be readily identified from 

standard operating costs. Non-recurring RWAs are those RWAs that provide services 

where costs can readily be identified and captured.
Page 8 GAO-16-273 Federal Real Property

RWAs, those RWAs that, according to GSA would be applicable to repair 

and alteration work, are established to cover an indefinite period that 

must not exceed 5 fiscal years from the end of the last year in which 

authority to obligate funds is available. In fiscal year 2014, GSA accepted 

about 3,400 RWA projects in federally owned buildings held by GSA with 

a total value of about $670 million.19 In general, about 75 percent of these 

projects were less than about $80,000; however, about 2 percent of the 

projects were valued at $1.9 million or higher.

Planning and executing repair and alteration projects follows a process 

which is prescribed by GSA and other federal requirements. In general, 

this process has five phases: (1) pre-project planning, (2) project 

development and design, (3) contracting, (4) construction, and (5) project 

closeout (see fig. 1).20 GSA officials told us that, with the exception of 

certain checklists, prospectus-level RWA projects are treated the same as 

regular capital projects.

 19This only includes RWAs in federally-owned GSA buildings. 

20GSA officials said the five steps we use are not exactly the same as the five phases 

contained in GSA guidance for the lifecycle of a project—identification, initiation, planning, 

execution, and closeout. However, as can be seen, these two are similar. Figure 1 was 

developed by reviewing, among other things, GSA policies and guidance to present a 

simplified depiction of the phases involved in planning and executing a repair and 

alteration project and highlighting some of the activities within these phases that are 

associated with identifying and assessing project risks. It is not intended to illustrate the 

lifecycle of a repair or alteration project.
Page 9 GAO-16-273 Federal Real Property

Figure 1: Phases and Selected Activities in the General Services Administration’s Planning and Execution of Repair and 

Alteration Projects

The following briefly describes these five phases:

• Pre-project planning: According to GSA’s Project Planning Guide,

21

the pre-project planning phase is where GSA develops the contextual 

knowledge of its inventory, facilities, budgets, and stakeholders. This 

is to enable GSA to identify potential projects, alternative solutions, 

and implementation strategies. Among other things, this phase would 

include facility condition and other special studies to assess the 

condition of GSA’s inventory and identify repair and alteration needs.

• Project development and design: This phase is where GSA begins to 

develop a repair and alteration project in more detail, to refine options, 

and to develop project management plans (PMP). According to GSA 

officials, project development also includes risk assessment, including 

documentation of known and likely unknown conditions. GSA’s 

Project Planning Guide indicates both a feasibility study, which 

 21GSA, Project Planning Guide (2004).
Page 10 GAO-16-273 Federal Real Property

defines project goals, scopes customer need, and assesses 

alternatives, and a program development study, which reviews 

previous project assumptions, plans, and budgets and proposes a 

construction budget and implementation strategy, would be prepared.

In addition, cost estimates are to be completed, an initial Capital PMP

is to be prepared, and preliminary design concepts are to be 

developed. A Capital PMP is a document that, among other things, 

defines the goals of a project and the organization required to 

accomplish the goals, as well as target budgets and schedules.

According to GSA, the PMP should also set forth the acquisition 

strategy for the project and identify any constraints or risks associated 

with the project.

• Contracting: Acquisition planning begins in the early stages of project 

development and GSA’s Project Planning Guide recommends that as 

part of the feasibility study an implementation plan be prepared that 

identifies the best strategy for procuring a project. During the 

contracting phase, GSA solicits bids for architect/engineering services 

and repair and alteration work, evaluates these bids, and awards 

contracts.

• Construction: This phase is when the repair and alteration work is 

done. Construction includes construction of building and site 

improvements, arranging for utilities, and preparing for building 

occupancy. According to GSA officials, when unforeseen site 

conditions are discovered they are documented through contract 

change orders and modifications if they require a change to the 

contract. GSA uses both an electronic system and paper records to 

record contract changes. Contract change orders and modifications 

are also recorded in GSA’s electronic project management system.

• Project closeout: Project closeout is when the work is completed, final 

payments are made, and contracts are closed. GSA’s Acquisition 

Manual requires that appropriate steps be taken to ensure that 

physically completed projects are formally closed out in accordance 

with FAR and GSA requirements. Project closeout includes filing asbuilt drawings in project records. In January 2015, GSA began 

implementation of a Central Facilities Repository, which will be used 
Page 11 GAO-16-273 Federal Real Property

to house project documents, including as-built drawings and other 

building information.22

To help address unexpected events or circumstances, including 

unforeseen site conditions, repair and alteration projects may include 

construction contingencies. According to GSA, contingencies are a part of 

total estimated project costs and cover costs that may result from 

incomplete design, unforeseen and unpredictable conditions, or 

uncertainties concerning project scope.23 GSA officials said contingencies 

are held by the owner (GSA) and are not part of the contract price at 

award. GSA currently recommends a 10 percent construction contingency 

for repairs and alterations and a 7 percent construction contingency for 

new construction. Contingencies are also applied to RWA projects, and 

according to GSA, prospectus-level repair and alteration RWAs would 

generally have a 10 percent construction contingency.

According to industry stakeholders we interviewed, unforeseen site 

conditions are common in repair and alteration projects. Ten of the 11 

stakeholders told us that unforeseen site conditions were very prevalent, 

and the other stakeholder said unforeseen site conditions were somewhat 

to very prevalent. Some of the stakeholders said the older the building the 

more likely unforeseen site conditions would be encountered. Officials 

from the Architect of the Capitol said they run into unforeseen site 

conditions on most of their projects. Officials from the U.S. Postal Service 

also said unforeseen site conditions are prevalent and most often 

 22According to GSA, the Central Facilities Repository will be a central source for building

information and will be used, among other things, to help plan projects.

23GSA, P-120: Project Estimating Requirements for the Public Buildings Service, U.S. 

General Services Administration, Office of the Chief Architect (January 2007).

Unforeseen Site 

Conditions Are 

Common, but Impacts 

on Reviewed Projects 

Were Limited

Both Industry 

Stakeholders and GSA 

Officials Told Us 

Unforeseen Site 

Conditions Are Common in 

Repair and Alteration 

Projects
Page 12 GAO-16-273 Federal Real Property

appeared in paving projects, in underground storage tanks that were 

leaking, and in roof replacements with deteriorated decking. The industry 

stakeholders we interviewed identified the main types of unforeseen site 

conditions as: environmental hazards (such as asbestos and lead-based 

paint), and conditions being different than in building drawings or items 

not located where they were expected to be. Stakeholders also told us 

impacts of unforeseen site conditions are generally cost increases and 

schedule delays but the impacts can vary depending on the project. For 

example, one industry stakeholder told us typical impacts include costs, 

increased time and schedule delays, as well as the need for greater 

resources to mitigate impacts. Another stakeholder told us the impacts of 

unforeseen site conditions depend on how prepared the property owner is 

to address the condition and what was and was not planned for.

GSA has also reported that unforeseen site conditions are common in 

repair and alteration projects. As noted earlier in this report, in 2001 the 

GSA Office of Inspector General examined 45 prospectus-level repair and 

alteration projects and found that in 10 projects completed in fiscal years 

1998 and 1999 unforeseen site conditions accounted for about 43 percent 

of the cost growth in these projects.24 Officials in four of the five GSA 

regional offices we contacted described unforeseen site conditions as 

very prevalent and officials in one regional office said they were 

somewhat to very prevalent. Officials in this office went on to indicate that 

unexpected asbestos, lead, and mold can be found anytime during 

construction. The GSA officials identified hazardous materials as being 

one of the main types of unforeseen site conditions found.

Although industry stakeholders and GSA told us unforeseen site 

conditions are common in repair and alteration projects, data on the 

overall extent and impacts of unforeseen site conditions are limited. For 

example, as discussed in more detail below, GSA officials told us that the 

agency tracks but does not analyze project change orders to determine 

whether they resulted from unforeseen site conditions.

 24GSA, Report Number A000890/P/H/R01008. As previously mentioned, according to 

GSA officials, there would likely be fewer and less costly change orders, including those 

resulting from unforeseen site conditions, experienced on repair and alteration projects 

today compared to the time the Inspector General’s report was written. GSA now uses 

different delivery methods to procure services that allow for the sharing of risk between 

the building owner and the contractor, methods that, according to GSA officials, results in 

fewer change orders. 
Page 13 GAO-16-273 Federal Real Property

Most of the projects we reviewed had unforeseen site conditions.

Specifically, unforeseen site conditions were encountered in 11 out of the 

18 repair and alteration projects, including two of the three prospectus 

projects and nine of the 15 RWA projects (see table 1).25 As shown in 

table 1, the types of unforeseen site conditions varied. For example, in 

one prospectus project we reviewed—a project to, among other things, 

build a Pavilion at the Daniel P. Moynihan U.S. Courthouse in New York 

City—GSA discovered that the existing wall in the plaza area was 

reinforced concrete rather than a standard concrete masonry unit, which 

was what the building drawings indicated. The reinforced concrete made 

demolition of the wall more difficult and, according to the project manager, 

GSA spent approximately an additional $70,000 to pay for more labor to 

demolish the wall.

Table 1: Examples of Unforeseen Site Conditions Experienced on Selected General Services Administration Repair and 

Alteration Projects GAO Reviewed

Project name Location Examples of unforeseen site conditionsa

Prospectus projects

Daniel P. Moynihan U.S. Courthouse New York, NY • Drawings failed to show reinforced concrete

New Executive Office Building Washington, DC • Hidden piping on the 10th floor connecting the fan coil units 

was not holding and led to several leaks and significant 

office damage

Reimbursable work authorization projects

Social Security Administration (SSA) 

command center 

Woodlawn, MD • Unforeseen electrical conduits that were added after the 

original design of the wood ceiling was completed

SSA generator replacement project Woodlawn, MD • Unidentified masonry wall underground that is in the way of 

cable

U.S. Marshals Service (USMS) renovation Baltimore, MD • Lack of fireproofing on the existing beam and steel decking

SSA Frank Hagel Federal Building: main 

entrance

Richmond, CA • Physical conflicts with conduits in the ceiling which were 

not adequately shown in as-built drawings

 25For purposes of our review, we counted each contract modification that was associated 

with an unforeseen site condition as one unforeseen site condition. On one of the 

prospectus projects we reviewed, a roof replacement at the Eisenhower Executive Office 

Building in Washington, D.C., no unforeseen site conditions were reported. GSA officials 

initially told us unforeseen site conditions were experienced on this project, including 

differing roof materials. However, a GSA official subsequently told us none of the 

unforeseen site conditions resulted in contract modifications. In addition, GSA was unable 

to provide documentation for this project since project records had been archived. Based 

on the information provided by GSA and the lack of documentation, we considered this 

project as not having unforeseen site conditions.

Most Projects We 

Reviewed Had 

Unforeseen Site 

Conditions, but Cost and 

Schedule Impacts Were 

Largely Limited
Page 14 GAO-16-273 Federal Real Property

Project name Location Examples of unforeseen site conditionsa

SSA Frank Hagel Federal Building : marina 

way entrance 

Richmond, CA • After demolition was completed, a drain was found to be 

too high and needed to be recessed for proper draining 

USMS courthouse renovation Tucson, AZ • Existing space above the corridor is a different height than 

listed on the construction drawings

• More openings in the corridor than was documented 

U.S. Agency for International Development 

consolidation mobility design lab

Washington, DC • Existing sprinkler system in one portion of the ceiling was 

lower than expected and below the height of the new 

design

U.S. Forest Service’s consolidation Washington, DC • Unknown hardwood subflooring discovered during 

demolition; lack of a smoke detection system and fire 

retardant

U.S. Secret Service’s firing range Washington, DC • Unexpected clearance between a wall and a window

Source: GAO analysis of GSA documents and interviews. | GAO-16-273

a

Examples of unforeseen site conditions are provided for illustrative purposes and are not an 

exhaustive list of the unforeseen site conditions encountered on each project.

However, despite the prevalence of unforeseen site conditions in our 

selected projects, our review showed that the overall impact of these 

conditions appeared largely limited. On nine of the 11 projects we 

selected that experienced unforeseen site conditions, the cost for 

remediating those conditions accounted for 1 to 5 percent of the project’s

original construction contract award (see fig. 2).26 On one of the 11 

projects—a prospectus project to, among other things, modernize the 

heating, ventilation, and air-conditioning system at the New Executive 

Office Building in Washington, D.C.—the cost for addressing unforeseen 

site conditions was approximately 6 percent of the original construction 

contract award.27 All of the reported costs for remediating unforeseen site 

conditions on the projects we reviewed were below the typical 10 percent 

construction contingency that GSA attaches to repair and alteration 

projects. In addition, the impacts on project schedules also appeared to 

 26For our analysis, we measured the cost by determining the cost of the unforeseen site 

condition as a percentage of the original construction contract award amount. This amount 

does not include additional costs that may have been added subsequent to contract award 

such as exercising contract options or general price adjustments. 

27This project consisted of three construction contracts. Unforeseen site conditions were 

experienced on one of the three contracts. For purposes of our analysis, we compared the 

costs of unforeseen site conditions with the original construction contract award amounts 

for all three contracts since all three contracts were part of the construction work. On a

standalone basis, the cost of unforeseen site conditions were about 25 percent of the 

original construction cost award on the one contract where unforeseen site conditions 

were experienced.
Page 15 GAO-16-273 Federal Real Property

be limited. Three of the 11 projects that encountered unforeseen site 

conditions experienced schedule delays. These ranged from 23 to 105 

days due to the unforeseen site condition.28 For example, in an RWA 

project to replace power generators at a Social Security Administration 

center in Maryland, GSA encountered an unidentified masonry wall buried 

in the ground which interfered with the planned installation of wiring. As a 

result of this unforeseen condition, GSA issued a contract change order, 

which, among other things, called for the contractor to remove the wall. 

The removal added 23 days to the project’s schedule. In another project 

for the Social Security Administration, the existence of conduits in the 

ceiling that were unexpected led to a 75-day delay in the project 

schedule. Although only 3 of the 11 projects we reviewed appeared to 

experience schedule delays based on the records we reviewed, 

unforeseen site conditions may have caused additional delays. For 

example, some GSA project managers and contracting officers we 

interviewed said that extensions due to unforeseen site conditions can 

sometimes be absorbed into other project delays. As a result, it is not 

clear how much of a delay, if any, can be attributed to some unforeseen 

site conditions.

Figure 2: Cost Increases from Unforeseen Site Conditions on the General Services 

Administration’s Repair and Alteration Projects GAO Reviewed

 28We measured schedule delays by reviewing contract modifications for unforeseen site 

conditions and determining if there were any changes to the substantial completion date of 

the projects.
Page 16 GAO-16-273 Federal Real Property

Note: For the repair and alteration project at the Daniel P. Moynihan Courthouse, the total cost for 

addressing unforeseen site conditions, about $318,000, includes an item with a cost of $20,500 that 

addresses both work on an unforeseen site condition as well as work unrelated to unforeseen 

conditions. Also, we did not include a cost for the unforeseen site condition encountered during the 

project at the U.S. Secret Service’s firing range because there was no contract modification 

associated with the unforeseen site condition and the cost of the unforeseen site condition was 

unknown.

Three of the RWA projects we reviewed were associated with larger 

projects that experienced unforeseen site conditions.29 None of the three 

RWA projects had unforeseen site conditions, but unforeseen site 

conditions were experienced in the three larger projects. The following 

provides information about these projects:

• One of the RWAs we reviewed was attached to a prospectus project 

to renovate the St. Elizabeth’s Campus in Washington, D.C., for the 

Department of Homeland Security. The RWA was to complete, among 

other things, tenant-requested improvements to building 49 on the 

campus. GSA officials told us the RWA we reviewed did not 

encounter any unforeseen site conditions. However, they also told us 

the building where the tenant improvements were being made had 

undergone extensive renovations prior to the start of the RWA project.

GSA officials said that this earlier work essentially eliminated the risks 

of unforeseen site conditions on the RWA project since the building 

was gutted as part of the prospectus project. As part of the larger 

prospectus project, GSA encountered unforeseen site conditions, 

which included steel beams that were buried in the ground under the 

building. According to the GSA officials, the beams were unforeseen, 

deteriorated, and had to be replaced. GSA also abated lead-based 

paint and asbestos in the building prior to the start of the RWA project.

GSA officials said remediating these unforeseen site conditions cost 

about $2.4 million. The estimated construction cost for the renovation 

work conducted as part of the prospectus project was $84.3 million.

• One RWA project called for an upgrade of security and other 

equipment for the Department of Homeland Security’s Customs and 

Border Protection at the San Ysidro Land Port of Entry in San Diego, 

California. This project was attached to a larger prospectus project to 

reconfigure and expand the entire land port of entry. According to the 

 29As previously discussed, GSA classifies RWA projects into different types. Among the 

RWA projects we reviewed were B-type RWAs. These are projects associated with 

prospectus projects, including projects where the tenant agency pays for and requests 

“above-standard” tenant improvements. 
Page 17 GAO-16-273 Federal Real Property

project manager, GSA did not encounter unforeseen site conditions 

during the RWA project we reviewed, but unforeseen site conditions 

were encountered on the prospectus project. This included greater 

than expected contaminated soil conditions that needed to be 

remediated. The remediation added almost $2 million to the cost of 

the prospectus project, which had an estimated site development cost 

of about $287 million.30

• A third RWA project called for the renovation of spaces occupied by 

the U.S. Marshals Service at a federal building in Honolulu, Hawaii.

This RWA was attached to a larger project to modernize the building 

funded through the American Recovery and Reinvestment Act of 

2009. According to a GSA official, there were no unforeseen site 

conditions associated with the RWA project but unforeseen site 

conditions were experienced in the larger project. The project 

manager told us the cost to address the unforeseen site conditions 

was paid for from the larger project. Among the unforeseen conditions 

experienced were additional electrical conduits in the ceiling that were 

not on as-built drawings and were not discovered until the ceiling was 

demolished. The project manager estimated the cost to remediate the 

unforeseen site conditions was approximately $168,000.

There can be a variety of causes for unforeseen site conditions in repair 

and alteration projects. For example, 5 of the 11 industry stakeholders we 

interviewed cited old, inaccurate, or not up-to-date building drawings as a 

cause of unforeseen site conditions. Among other causes cited by the 

stakeholders were the level or type of building maintenance, lack of 

information about previous renovations, construction, or use of hazardous 

materials, and an insufficient number, type, or scope of environmental 

tests or surveys. Some of the causes these stakeholders cited were 

similar to the possible causes of unforeseen site conditions we identified 

in the projects we reviewed based on project records and discussions 

 30Site development costs include grading, utilities, paving, and demolition of existing 

facilities. Site development work is only a portion of the total estimated cost of 

construction, which for this project was almost $545 million. According to GSA officials, 

the contaminated soils were under existing structures and buildings, and the condition of 

the soils could not have been identified without demolishing the building.

Incomplete Building 

Drawings and Lack of 

Building Information Were 

among the Possible 

Causes of Unforeseen 

Site Conditions in Projects 

We Reviewed
Page 18 GAO-16-273 Federal Real Property

with GSA officials (see fig. 3).31 For example, as the figure shows, for 

projects we reviewed, incomplete building drawings and lack of building 

information were among the possible causes for unforeseen site 

conditions. We also identified access issues, tenant alterations, and a 

building not built up to code as possible causes. We did not identify such 

things as hazardous materials, naturally occurring site conditions, and 

other causes (“other”) mentioned by industry stakeholders.

Figure 3: Possible Causes of Unforeseen Site Conditions in the General Services 

Administration’s Repair and Alteration Projects GAO Reviewed

 31We categorized possible causes of unforeseen site conditions based on discussions 

with GSA officials knowledgeable about the project and reviews of project records, 

including contract modifications. In some cases, neither GSA officials nor project records 

were clear as to actual cause(s) of unforeseen site conditions. As a result, the information 

we present shows the possible causes of unforeseen site conditions based on the officials 

we spoke with and the records we reviewed.
Page 19 GAO-16-273 Federal Real Property

We found that incomplete, inaccurate, or out-of-date building drawings—

including as-built, electrical, and mechanical drawings—were the possible 

cause for the unforeseen site conditions in 9 of the 11 projects we 

reviewed that encountered unforeseen site conditions.32 For example, in 

an RWA project to build out a mobile workplace at the headquarters of 

the U.S. Agency for International Development in Washington, D.C., GSA 

encountered a sprinkler main and storm pipe that were placed lower in a 

portion of the ceiling than other pipes. According to a GSA official, the 

height of the water main and pipe were not shown in the building’s 

mechanical and electrical drawings. Furthermore, the pipes were not 

identified during a building survey. According to the official, that section of 

the water main and pipe were the only ones that were lower than the rest 

of the main and pipe in the ceiling. This unforeseen site condition caused 

GSA to redesign that section of the office to have the ceiling lowered by 6 

inches in order to accommodate the system and pipe.

In addition, lack of information about buildings was also a top possible 

cause. For 9 of the 11 projects we reviewed that encountered unforeseen 

site conditions, the possible cause was lack of information about a 

building’s condition. We defined this category to include unforeseen site 

conditions that resulted from such things as poor building records, as well 

as inadequate surveys and testing. For example, one RWA project we 

reviewed was for the renovation of the U.S. Forest Service Headquarters 

in Washington, D.C. to allow Forest Service staff to vacate leased space 

and consolidate in the headquarters building. According to project 

officials, during demolition, GSA discovered wood subflooring, and that 

the subflooring lacked fire retardant. Prior to demolition, GSA was not 

aware of the existence of the wood subflooring, because the wood floor 

was hidden by carpet. In addition, the building being renovated was built 

in 1880, and, according to the PMP, original construction documents were 

not available. In general, project officials said that there was no 

 32To ascertain the possible causes for unforeseen site conditions for each of our selected 

projects, we relied on project documents and responses provided by project managers 

and other GSA officials knowledgeable about the causes of unforeseen site conditions 

encountered on each project. We took this documentation and official responses and 

coded them into nine possible causes: (1) lack of building condition information, (2) 

hazardous materials, (3) tenant alterations unknown to GSA, (4) lack of accurate building 

drawings, (5) building not built up to code, (6) technology changes over time, (7) naturally 

occurring site conditions, (8) access issues, and (9) other. We developed these nine 

categories based on grouping the causes of unforeseen site conditions identified by GSA 

officials on the projects we selected into the common causes of unforeseen site conditions 

identified by industry stakeholders we spoke with.
Page 20 GAO-16-273 Federal Real Property

information available that would lead them to know that wood subflooring 

existed and that they did not expect to encounter wood subflooring.33

Remediation of the unforeseen site condition included installation of fire 

retardant on the floor and installation of a smoke detection system. GSA 

officials noted this project finished on schedule and within budget and any 

additional costs or time delays were absorbed by the schedule and 

budget contingencies.

The possible causes of the remaining unforeseen site conditions were 

tenant alterations unknown to GSA (2 out of 11 projects), a building’s not 

being originally built up to code (2 of 11 projects), and difficulty faced by 

GSA in accessing the building for surveying and testing (4 out of 11 

projects).34

 33For the purposes of this review, some of the repair and alteration projects we reviewed 

had multiple possible causes of unforeseen site conditions. This situation was true for the 

U.S. Forest Service RWA, which included both a lack of building condition information and 

a lack of accurate building drawings as possible causes of the unforeseen site condition. 

34As discussed earlier, three RWA projects were associated with larger projects. We did 

not determine the possible causes of the unforeseen site conditions on the larger projects.

GSA Has a Variety of 

Methods to Identify 

and Assess Risks of 

Unforeseen 

Conditions but Risk 

Identification Could 

Benefit from Analysis 

of Project Information
Page 21 GAO-16-273 Federal Real Property

GSA policies and procedures describe a variety of methods available to 

identify and assess potential risks on repair and alteration projects. These 

methods are used throughout the planning and execution of projects. The 

following describes some of the methods and tools used by project 

phase.

• Pre-project planning: GSA’s Project Planning Guide describes that 

during the pre-project planning phase GSA is to assess the condition 

of its facilities and prepare building reports and other studies (e.g., 

historic preservation plans) to establish project requirements. The 

Project Planning Guide also describes how site surveys and various 

tests may be conducted to identify possible project risks, such as 

hazardous materials. GSA officials told us reviews, employing private 

sector peers, are established during this phase, to assess the project 

team’s cohesion and the quality of communications to ensure that any 

issues that may arise during the project can be timely resolved so 

they do not turn into unforeseen conditions. Tools available during this 

phase include facility condition assessments and site surveys.

• Project development and design: GSA uses this phase to begin 

defining projects and their specifications as discussed earlier in this 

report. To begin identifying potential project risks the Project Planning 

Guide describes how GSA may conduct additional site surveys and 

tests and develop the initial PMP.35 The PMP includes a risk

assessment that identifies and assesses potential risks to projects. In 

addition, GSA is to prepare a feasibility study and a program 

development study which, according to the Project Planning Guide, 

includes an assessment of potential project risks. A Project Definition 

Rating Index (PDRI) may also be prepared. GSA’s Capital Project: 

PM Guide describes the PDRI as, among other things, a tool used to 

identify a project’s readiness to move forward to the next phase, as 

well as identify areas of risk that may require better definition and 

possible mitigation. Finally, GSA’s Capital Investment and Leasing 

Program Call—a document used to identify requirements for repair 

and alteration projects to receive funding—requires various 

documents and checklists, including an Environmental Review Sheet 

and a Regional Office-Central Office Alignment checklist. These 

 35GSA created three types of PMPs: full, condensed, and express PMPs, to be prepared 

on individual projects, based on the individual project characteristics, including the type of 

project and project cost. These PMPs may include a risk assessment, acquisition strategy, 

and communication plan.

Variety of Methods Are 

Available to Identify and 

Assess Potential Project 

Risks and GSA Generally 

Used These Methods on 

Projects We Reviewed
Page 22 GAO-16-273 Federal Real Property

documents and checklists further identify and assess potential project 

risks. For RWA projects, GSA’s National Project Intake Guide, 

describes an initial risk determination tool that is used to assist project 

managers in assessing risks posed by a range of factors, including 

project size and complexity. Tools available during this phase include 

the PMP, feasibility study, program development study, PDRI, and 

RWA risk determination tool.

• Contracting: As part of this step, GSA officials told us that during 

project planning architect/engineering firms are hired to identify 

potential project risks through site investigations, preparation of 

project specifications, and initial designs. GSA’s Capital Projects: PM 

Guide states that GSA may also use Construction Managers to assist 

project teams in evaluating project execution and identify potential 

project risks. According to GSA officials, contract clauses are also 

incorporated into construction contracts to address unforeseen site 

conditions as they arise. Finally, construction contingencies are to be 

added to project cost estimates to cover risks that are not identified or 

mitigated in up-front planning. Tools available during this phase 

include contract provisions and construction contingencies.

• Construction: Risk identification and assessment during construction 

includes monitoring project budgets and schedules for cost growth or 

schedule delays and for “earned-value-management” purposes.36

GSA’s Capital Projects: PM Guide states that project status reports 

are prepared that include information on project spending and 

progress in meeting project schedules. According to the guide, this 

information is used to identify whether projects are experiencing 

difficulties and, if so, why. GSA officials told us that contract change 

orders and modifications are used to document unforeseen site 

conditions. Finally, GSA officials told us that lessons learned 

documents are sometimes prepared on repair and alteration projects.

According to GSA’s Project Management Practices Guide, lessons 

learned documents should assess GSA’s risk response strategies.

Tools available during this phase include monthly status reports, 

contract change orders and modifications, and lessons learned 

documents.

 36According to GSA, “earned-value-management” is a project management tool that 

effectively integrates the project’s scope of work with cost, schedule, and performance 

elements for optimum project planning and control. 
Page 23 GAO-16-273 Federal Real Property

• Project closeout. GSA officials told us this step includes updating asbuilt drawings and filing them in project records. As mentioned, GSA’s 

Project Management Practices Guide also describes how project 

teams are to discuss projects and prepare lessons learned, including 

an assessment of GSA’s risk response strategies. Tools available 

during this phase include updated as-built drawings and lessons 

learned documents.

Based on the interviews we conducted and project documentation we 

reviewed, GSA generally used at least one of the methods or tools to 

identify potential risks on 16 of the 18 projects we reviewed. To make this 

determination we reviewed such documents as PMPs and feasibility 

studies. GSA guidance calls for PMPs to identify constraints and project 

risks and to be used continuously throughout a project to identify risks.

We found that, in general, GSA prepared PMPs for our selected projects.

For example, GSA prepared PMPs for 13 of the 18 RWA and prospectus 

projects we reviewed. Five projects did not have PMPs—three were RWA 

projects associated with larger projects and no separate PMP was 

prepared for the RWA project, and for two projects, GSA officials were not 

sure if a PMP was prepared and were unable to provide documentation of 

a PMP. The project documents we reviewed generally discussed and 

identified potential project risks, including sections of the PMP that 

identified specific potential risks. Some of the projects we reviewed also 

had other risk identification documents such as feasibility studies, 

hazardous material surveys, and program development studies.

Although GSA has risk assessment methods that were generally used on 

the projects we reviewed, these methods had inconsistent results in terms 

of identifying unforeseen site conditions that were later experienced.

Based on the risk assessment methods, GSA identified a range of risks 

across the projects we reviewed and identified one or more types of 

unforeseen site conditions on at least 16 projects (see fig. 4).37 However, 

the risk assessment did not consistently identify the risk of specific 

unforeseen site conditions that materialized during 11 of the projects.

 37It should be noted that repair and alteration projects can have multiple risks identified as 

part of the risk assessment methods. Similarly, repair and alteration projects can 

experience a multitude of risks, including unforeseen site conditions. 

Although GSA Identified 

Risks on Projects We 

Reviewed, Identification of 

Unforeseen Site 

Conditions Were 

Inconsistent
Page 24 GAO-16-273 Federal Real Property

Figure 4: Risks Identified by the General Services Administration and Unforeseen Site Conditions Experienced on Repair and 

Alteration Projects GAO Reviewed
Page 25 GAO-16-273 Federal Real Property

The risks associated with unforeseen site conditions that GSA most often 

identified on the projects we reviewed included:

• access issues (7 projects): limiting access to areas may limit building 

information (for example, not being able to conduct site testing and 

evaluation in an occupied space may lead to an unforeseen site 

condition);

• presence of hazardous materials (9 projects);

• lack of accurate building drawings (4 projects); and

• other risks (11 projects), included risks that did not fall into other 

categories, including risks from procurement and acquisition methods.

On 11 of the projects we reviewed that experienced an unforeseen site 

condition, GSA did not identify risks that later materialized. For example, 

an RWA project for the U.S. Marshals Service in Baltimore, Maryland, did 

not identify risks, including a lack of accurate building drawings, and the 

risk of tenant alterations in an occupied building, though these risks led to 

several unforeseen site conditions throughout the building. Another RWA 

project for the Social Security Administration in Richmond, California, 

identified the risk of hazardous materials through site testing but did not 

identify the risk of poor building drawings or a lack of access due to 

continued occupation during design and construction work.

On five of the projects we reviewed that experienced unforeseen site 

conditions, GSA identified risks, and the project experienced those 

specific unforeseen site conditions later.38 For example, a renovation 

RWA project for the U.S. Marshal Service in Baltimore, Maryland, 

identified access issues early on as a risk to the project. According to 

GSA officials, there were limitations to reducing or eliminating this risk 

since the project was performed in a building with security concerns and 

while still occupied. In addition, on a prospectus project at the Daniel P. 

Moynihan U.S. Courthouse Building in New York City, an unforeseen site 

condition was experienced related to inaccurate as-built drawings even 

though the building drawings were reviewed in detail as part of a site 

inspection.

 38As part of our work we did not evaluate mitigation actions or strategies that GSA may or 

may not have used to reduce or eliminate specific risks that were identified. Instead, we 

evaluated whether GSA identified a particular risk and whether this same risk was later 

identified as an unforeseen site condition. 
Page 26 GAO-16-273 Federal Real Property

On at least 16 of the projects, GSA both identified specific types of 

unforeseen site conditions, and these projects did not subsequently 

experience that type of unforeseen site condition during the project. For 

example, the presence of hazardous materials was recognized as a risk 

on nine of the projects, and none of these projects experienced an 

unforeseen site condition caused by the presence of hazardous materials.

During a windows replacement RWA project for the Social Security 

Administration in Woodlawn, Maryland, GSA identified issues related to 

hazardous materials (asbestos) and re-scoped the project from replacing 

windows to caulking the windows. GSA officials told us this change was 

made so as not to disturb the asbestos. The re-scoping also resulted in a 

lower-cost project.

While GSA officials noted that risks are important and that the risk 

assessment methods are designed to identify and assess risks

associated with repair and alteration projects, we found that GSA is not

analyzing project information it has available to identify risks that 

materialized and their impact on project costs and schedules. A good 

understanding of project risks and their impact on project costs and 

schedules is important. Standards for Internal Control in the Federal 

Government39 states that an agency’s approach to assessing risks should 

comprehensively identify agency risks using a variety of quantitative and 

qualitative methods and estimate the significance of those risks to help 

decide how to manage those risks and plan what actions should be taken.

This approach is important in the context of repair and alteration projects 

given that, as discussed earlier, risks from unforeseen site conditions, if 

not mitigated, can increase project costs and potentially jeopardize 

project schedules. Similarly, GAO’s Cost Estimation and Assessment 

Guide40 states more specifically that agencies should, among other 

things, conduct root cause analysis; develop a list of likely risks for 

individual projects, including a list of emerging risk items that could impact 

costs and schedule; and perform trend analyses and monitor project risks 

to develop reliable and valid cost estimates. As discussed earlier in this 

report, development of cost estimates is an integral part of GSA’s project 

planning and execution process, as is establishing construction 

contingencies to cover the cost of unexpected events, such as 

 39GAO/AIMD-00-21.3.1. 

40GAO-09-3SP.

Risk Assessment Could 

Benefit from Additional 

Analysis of Project 

Information
Page 27 GAO-16-273 Federal Real Property

unforeseen site conditions. Finally, the Project Management Institute’s 

Global Standard: Practice Standard for Project Risk Management also 

discusses the importance of identifying types of risks and their causes as 

part of project planning and management, as well as the effects of these 

risks on projects.41

GSA’s risk assessment methods for the most part are focused on 

identifying risks associated with individual projects and not identifying the 

risks related to change orders on a program-wide basis, or necessarily 

the cause of certain types of risks.42 GSA officials told us they use 

contract change orders and modifications to document unforeseen site 

conditions resulting in a change to the contract, and they track these for 

individual projects to assess project status in terms of budgets and 

schedules. They also told us they document reasons change orders or 

modifications are made using a findings-of-fact form. However, GSA 

officials also told us they do not analyze change orders or modifications to 

identify the primary causes of cost growth or schedule delays on repair 

and alteration projects, nor do they analyze the findings of fact to identify 

the primary reasons change orders or modifications were made.43

Furthermore, GSA officials told us this information is not used to identify 

types of risks experienced on repair and alteration projects or their impact 

on costs and schedules. GSA officials told us there are challenges to 

using contract change orders and modifications to identify the specific 

role unforeseen site conditions or other types of risks play in projects.

Challenges include the inability to conduct searches of change orders, 

modifications, or findings of fact forms. According to GSA officials, neither 

the electronic project management system nor the electronic acquisition 

data system that GSA uses to record change orders and modifications, 

are structured to permit searches to identify instances where unforeseen 

site conditions were the reason for a change order or modification.

 41The Project Management Institute is a not-for-profit professional membership 

association for the project, program, and portfolio management profession. It has 2.9 

million members and, among other things, issues global standards related to project 

management.

42GSA officials said they do record risks program-wide and known risks are documented. 

For example, they said an environmental liability register is used to record asbestos, 

underground storage tanks, and other similar risks that represent a financial liability. 

43According to GSA officials, they have analyzed contract change orders and 

modifications for other purposes, such as contract delivery method, but not specifically to 

assess the impact of unforeseen site conditions. 
Page 28 GAO-16-273 Federal Real Property

Supporting documents which could indicate the possible cause of change 

orders or modifications also cannot be searched. Despite these 

challenges, GSA officials said they would be open to analyzing contract 

change orders and modifications, particularly if the analysis was focused 

on a sample of change orders and modifications and not all of them. One 

official told us such an analysis could help GSA identify when unforeseen 

site conditions occur and what their impact was during certain phases of 

projects. According to this official, most unforeseen site conditions are 

discovered during the demolition phase of projects after construction 

contracts have been awarded.

Although the projects we reviewed largely had limited cost impacts 

resulting from unforeseen site conditions, change orders, including those 

from unforeseen site conditions, can impact the cost and schedule of 

repair and alteration projects. For example, during our design work for 

this study, we reviewed the renovation of the Department of Commerce’

headquarters building in Washington, D.C. This is an ongoing prospectus 

project with an estimated construction cost of $651 million. Unforeseen 

site conditions, including the presence of asbestos and lead paint, were 

experienced on this project and increased project costs by roughly $3 

million. Also during the renovation of the Department of Interior’s 

headquarters building in Washington, D.C., another ongoing prospectus 

project we reviewed during our design work, contract change orders 

related to unforeseen site conditions resulted in $3 million in increased 

costs. The prospectus project had a current estimated construction cost 

of $282 million. GSA officials told us that unforeseen site conditions are 

driven by, among other things, the age of buildings. Therefore, as GSA’s 

average building age increases the risk of unforeseen site conditions and 

their related costs can be expected to increase. GSA officials also told us 

that unforeseen site conditions are a major driver of project risk in repair 

and alteration projects.

We have previously reported that risk assessments allow project 

managers to identify and manage risks related to project’s costs, 

schedules, and other aspects and that assessing and mitigating risks 

reduces the probability of later encountering problems that can cause 

cost increases and schedule delays.44 Analyzing contract modifications 

 44GAO, 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).
Page 29 GAO-16-273 Federal Real Property

and change orders to identify the causes of project cost growth and 

schedule delays would not only allow GSA to better know what role 

unforeseen site conditions play in project cost growth or schedule delays 

but also the magnitude of this type of risk. This information would then 

allow GSA to potentially better target these conditions in its risk 

assessments and potentially reduce the probability of encountering this 

risk in future repair and alteration projects. This approach will be 

important as the federally-owned buildings in GSA’s inventory continue to 

age and the probability of unforeseen site conditions increases.

GSA’s repair and alteration program serves an important function in 

maintaining the inventory of federal buildings and facilities, and this 

program will continue to increase in importance as GSA’s inventory ages 

and continues to deteriorate. Repairs and alterations are expensive (over 

$1.2 billion to address immediate deferred maintenance and repair needs 

as estimated by GSA), and, therefore, it is imperative that the program 

operate as efficiently and effectively as possible and that costs, schedule 

delays, and project changes are minimized to the greatest degree 

possible. This strategy includes identifying and assessing major types of 

risks to projects, including those from unforeseen site conditions. Both 

industry stakeholders and GSA officials have said that unforeseen site 

condition risks are common, particularly in aging buildings, and can lead 

to increases in project costs and schedule delays. Of equal importance is 

identifying and understanding the cause of unforeseen site conditions, 

such as poor quality building drawings, so these causes can be 

addressed and not lead to unforeseen site conditions in the future.

GSA has risk assessment methods that consider potential risks, including 

those from unforeseen site conditions. GSA also has a number of tools, 

such as PMPs and project-rating indexes that help the agency identify 

and assess risks. However, GSA can improve how it identifies types of 

project risks and minimize their impacts on repair and alteration projects.

In particular, GSA can better analyze the information it has available, like 

contract change orders and modifications, an approach that would allow a 

more comprehensive identification of types of project risks, the role these 

risks play in repair and alteration projects, and the impacts these risks 

have on project costs, schedules, or scope of work. GSA is also not 

assessing the information it has available to identify the cause of 

unforeseen site conditions and identifying steps that could be taken to 

address these causes in order that they do not lead to unforeseen site 

conditions in the future. Such an analysis could also have broader 

benefits, including allowing GSA to identify if unforeseen site conditions or 

Conclusions
Page 30 GAO-16-273 Federal Real Property

other types of risks are common to particular types of projects or 

locations, and if there are common causes for certain types of risks. This 

type of analysis would better inform GSA’s risk assessments and help 

minimize cost and other project impacts from unforeseen site conditions 

or other types of risks.

To improve risk assessments for repair and alteration projects, we 

recommend that the Administrator of GSA develop and implement a plan 

to periodically analyze information GSA already collects, for example, 

based on a representative sample of repair and alterations projects, in 

order to:

• identify the specific impacts unforeseen conditions have had on 

project costs, schedules, and scope of work;

• analyze the causes of these conditions for those projects that

experienced unforeseen site conditions; and

• identify actions that will be taken to address the potential causes of

unforeseen site conditions.

We provided a draft of this product to GSA for comment. In its written 

comments reproduced in appendix III, GSA agreed with the 

recommendation and said it will develop a plan to address it. GSA also 

provided technical comments that were incorporated, as appropriate. 

We will send copies of this report to appropriate congressional 

committees and the Administrator of the General Services Administration.

In addition, we will make copies available to others upon request, and the 

report will be available at no charge on the GAO website at 

http://www.gao.gov. 

Recommendation for 

Executive Action

Agency Comments
Page 31 GAO-16-273 Federal Real Property

If you or your staff have any questions about this report, please contact 

me at 202-512-2834 or wised@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 key contributions to this report are 

listed in appendix IV.

Sincerely yours,

David J. Wise

Director,

Physical Infrastructure
Appendix I: Objectives, Scope, and 

Methodology

Page 32 GAO-16-273 Federal Real Property

The objectives of this report were to (1) identify information about the 

extent, impact, and cause of unforeseen site conditions1 during selected 

repair and alteration projects in federally owned buildings held by the 

General Services Administration (GSA) and to (2) determine how GSA 

identifies and assesses the risks of unforeseen site conditions. The scope 

of the work was limited to buildings and facilities that are federally owned 

and held by GSA. We did not include leased buildings or facilities since 

these could be owned or managed by private sector entities and may not 

necessarily be under GSA’s jurisdiction related to repair and alteration 

work. In addition, in order to determine how GSA identifies project risks 

we focused on projects where GSA played a role in planning and 

developing projects.

To identify information about the extent, impact, and cause of unforeseen 

site conditions during selected repair and alteration projects, we selected 

18 repair and alteration projects across four GSA regions (National 

Capital, Northeast and Caribbean, Mid-Atlantic, and Pacific Rim). The 

projects included three prospectus2 projects and 15 reimbursable work 

authorization (RWA)3 projects. The prospectus projects were all those 

projects that received an appropriation from fiscal years 2010 through 

 1

For purposes of this report, we use the term “unforeseen site condition” to refer to 

differing site conditions as well as unforeseen site condition. The Federal Acquisition 

Regulation (FAR) uses the term “differing site condition” to describe situations that we 

considered similar to unforeseen site conditions. The FAR definition for differing site 

condition is “(1) subsurface or latent physical conditions at the site which differ materially 

from those indicated in this contract, or (2) unknown physical conditions at the site, of an 

unusual nature, which differ materially from those ordinarily encountered and generally 

recognized as inhering in work of the character provided for in the contract.”

2

Prospectus projects involve major work or acquisitions that are estimated to cost more 

than a statutorily prescribed amount, which GSA’s Administrator is authorized to adjust 

annually. During the time period we selected the threshold for prospectus projects ranged 

from $2.79 million to $2.85 million. Building repairs and alterations that are expected to 

cost more than the prospectus-level threshold must be submitted to certain congressional 

committees for authorization.

3

A RWA is an agreement between GSA and a client agency, whereby GSA agrees to 

provide goods and services and a client agency agrees to reimburse GSA for the cost of 

these goods and services, indirect costs, and GSA fees. Work can vary from installation of 

equipment to major renovations. 

Appendix I: Objectives, Scope, and 

Methodology
Appendix I: Objectives, Scope, and 

Methodology

Page 33 GAO-16-273 Federal Real Property

2013.4 The RWA projects also received funding over this period. We 

chose this period to help ensure projects selected had progressed into 

the construction phase (where unforeseen site conditions might be 

identified) and yet were recent enough that electronic records were more 

likely to be available.5 To select repair and alteration projects to review, 

we applied four criteria: (1) project cost, (2) range of project years, (3) 

projects in construction, and (4) geographic diversity.

There were a total of six prospectus projects that received funding from 

fiscal years 2010 through 2013. These included the following:

• East Wing Infrastructure Systems Replacements (Washington, D.C.)

• New Executive Office Building (Washington, D.C.)

• Eisenhower Executive Office Building (Washington, D.C.)

• Daniel P. Moynihan U.S. Courthouse (New York, NY)

• West Wing Design Phase II (Washington, D.C.)

• West Wing/East Wing Infrastructure Systems Replacements 

(Washington, D.C.)

After additional research and discussion with GSA, we excluded three 

projects. This was because one of the projects was solely for design work 

(West Wing Design Phase II), not construction. According to GSA, the 

other two projects (West Wing Infrastructure Replacements and West 

Wing/East Wing Infrastructure Replacements) were combined. We 

selected the remaining projects for review.

The RWA projects we reviewed were selected based on a list of RWA 

projects provided by GSA. According to GSA, the list was intended to be 

 4

On one project, the Daniel P. Moynihan U.S. Courthouse in New York City, $2 million in 

appropriations were received for the design phase. According to GSA, other funding for 

this project came from reprogramming funds from other projects. We considered this a 

prospectus project since a prospectus was prepared. However, the project manager told 

us it was not clear if a prospectus for construction was ever approved by relevant

congressional committees. In commenting on this report, GSA officials told us a 

prospectus was prepared but it was not funded. Instead, GSA reprogrammed monies to 

do the project—one to undertake the space build-out and another to do the pavilion.

5

GSA uses an electronic project management system to record project information and to 

manage projects. According to GSA, this system was developed in 2009 to allow access 

to above-prospectus level project data on a uniform data system, particularly for projects 

funded as part of the American Recovery and Reinvestment Act. A GSA official said the 

system is now being used to collect information on repair and alteration projects with a 

value of $25,000 or more.
Appendix I: Objectives, Scope, and 

Methodology

Page 34 GAO-16-273 Federal Real Property

all RWA projects between fiscal years 2010 and 2013 that were for tenant 

repairs and alterations and were in federally owned buildings held by 

GSA. GSA has different types of RWA projects. For purposes of this 

study we reviewed A, B, and N-type RWAs.6 To select specific projects 

we first reviewed the list to ensure no single RWA project was 

represented multiple times in the data. We then combined and sorted the 

cost information of all RWA and prospectus projects and excluded all 

projects below a dollar-value cutoff ($2 million) and sorted the projects 

into GSA regional offices. We selected the three regional offices that 

accounted for the highest dollar amount of projects.7 Finally, we selected 

all relevant prospectus projects (see discussion above) and randomly 

selected 15 RWA projects from each of three regional offices. We 

selected more RWA projects than we planned to review to account for 

potential data reliability issues we might encounter. In selecting RWA 

projects, we excluded projects that based on their descriptions appeared 

to be for services and not construction, and we excluded projects that 

appeared to involve multiple sites. We asked GSA to verify the final list of 

RWA projects to, among other things, ensure they were in federally 

owned buildings held by GSA. We made additional adjustments based on 

GSA’s verification.

We interviewed GSA project managers and contracting officers for the 

projects we selected8 and reviewed project documents to determine if the 

projects encountered unforeseen site conditions. We also interviewed 

these officials to identify the nature of any cost, schedule, or scope 

impacts from the unforeseen site conditions encountered. Finally, we 

reviewed project documents, including contract modifications, to obtain 

information about the unforeseen site conditions encountered. This 

 6

A-type RWAs are for projects funded by both GSA and a tenant agency and are for a 

one-time need. B-type RWAs are used for projects that are funded by either the tenant 

agency or by the tenant agency and GSA. N-type RWAs fund standalone projects—that 

is, not associated with other repair or alteration projects—and are fully funded by the 

tenant agency. The list GSA provided excluded certain RWAs. These included RWAs for 

national emergencies, were prepaid (e.g., renting of space for a specific purpose, D-type 

RWAs), were recurring in nature (C and R-type RWAs), or were small, miscellaneous 

items only good for a year (F-type RWAs).

7

We also included the Daniel P. Moynihan U.S. Courthouse project in a fourth GSA 

regional office (Northeast and Caribbean) since this project received an appropriation of 

$2 million and was treated by GSA for planning purposes like a prospectus project.

8

GSA did not identify the contracting officer for one of our projects.
Appendix I: Objectives, Scope, and 

Methodology

Page 35 GAO-16-273 Federal Real Property

included a description of the unforeseen condition, the cost to remediate 

the condition, and any schedule delays experienced. Where applicable, 

we asked GSA to clarify any discrepancies between what was in the 

documentation provided and what we were told in interviews. To identify 

the causes of unforeseen site conditions, we discussed with project 

managers and contracting officers the actual unforeseen site conditions 

experienced and their potential causes. Working independently, two 

analysts then coded these potential causes into one of nine different 

categories of unforeseen site condition causes—lack of building condition 

information, hazardous materials, tenant alterations, lack of accurate 

drawings, building not built up to code, technology changes over time, 

naturally occurring site conditions, access issues, and other. These nine 

categories were developed by reviewing the responses of (1) 

knowledgeable GSA officials, (2) officials in two government agencies 

(U.S. Postal Service and the Architect of the Capitol), and (3) 

individuals/representatives who were knowledgeable and experienced in 

private sector practices for repair and alteration projects. The results of 

our work are not generalizable to the universe of repair and alteration 

projects.

Finally, we contacted 19 organizations and individuals (referred to in this 

report as industry stakeholders) with knowledge of or experience in the 

construction industry (see table 2). These contacts included industry trade 

associations as well as two construction companies that had done repair 

or alteration work for GSA and two public sector organizations—Architect 

of the Capitol and the U.S. Postal Service.9 Our selection of industry 

stakeholders was based on three methods: (1) asking GSA officials who 

would be the most appropriate to contact, (2) asking industry 

stakeholders about appropriate organizations or individuals to contact, 

and (3) obtaining referrals from various professional organizations. Of the 

19 organizations and individuals contacted, we had an interview or some 

other type of positive contact from 14 organizations/individuals. Of the 14 

for which we had a positive contact, we had an interview or received 

written responses to GAO questions from 11. In the interviews we 

discussed such issues as the prevalence of unforeseen site conditions, 

the types of conditions encountered, and the causes of unforeseen or 

differing site conditions. We also discussed potential impacts on projects 

 9

We contacted a third public sector organization, the Army Corps of Engineers, but a 

planned meeting was canceled.
Appendix I: Objectives, Scope, and 

Methodology

Page 36 GAO-16-273 Federal Real Property

such as cost increases or schedule delays. The results of our work are 

not generalizable to the entire universe of industry stakeholders.

Table 2: Industry Stakeholders Contacted for GAO’s Repair and Alterations 

Engagement

Name of organization or individual Type of organization

Trade and Professional Organizations

Construction Management Association of 

America

Professional organization

Construction Industry Institute Professional organization

Construction Institute of the American Society 

of Civil Engineers

Professional organization

Project Management Institute Professional organization

American Association of Cost Engineers Trade association

American Society for Testing and Materials Professional organization

International Facility Management Association Trade association

Building Owners and Managers Association Trade association

American Builders and Contractors of America Trade association

Associated General Contractors of America Trade association

Construction Owners Association of America Trade association

American Institute of Architects Trade association

Individuals and private companies

James Rispoli University professor

Dr. Gayraj Acharya Project manager, Government of 

Alberta, Canada

Grunley Construction Company Construction company

Clark Construction Company Construction company

Government agencies

Army Corps of Engineers Government agency

Architect of the Capitol Government agency

U.S. Postal Service Government agency

Source: GAO. | GAO-16-273

To identify how GSA identifies and assesses the risks of unforeseen site 

conditions, we reviewed documents related to GSA’s capital-planning and 

execution process and reviewed planning and risk assessment 

documents for projects we reviewed. Among the planning and project 
Appendix I: Objectives, Scope, and 

Methodology

Page 37 GAO-16-273 Federal Real Property

management documents we reviewed were GSA’s Capital Planning 

Guide, Capital Projects: Project Management Guide, and Project 

Management Practices Guide.

10 We also reviewed GSA’s Fiscal Year 

2017 Capital Investment and Leasing Program Call (Program Call),

11

GSA’s P-120, Project Estimating Guide (P-120),

12 GSA’s RWA National 

Policy Document,

13 and National Project Intake Guide.14 The Program 

Call document outlined the requirements that must be met for a project to 

be considered for inclusion in GSA’s Capital Investment Program and the 

P-120 document, among other things, discussed the technical and 

administrative requirements for cost estimating and cost management 

tasks involved with construction projects’ planning and execution stages.

GSA’s RWA National Policy Document states that it is the primary 

resource within GSA for RWA policy and use of RWAs. The National 

Project Intake Guide establishes national guidance for the intake of all 

Public Buildings Service projects and, among other things, supplements 

information in the Project Management Practices Guide. Finally, we 

reviewed other GSA policy and procedure documents, including GSA’s 

policy for using Project Definition Rating Indexes, GSA’s procedures for 

environmental account coding, and GSA’s Initial Risk Determination tool.

We assessed whether or not GSA’s practices and procedures on the 18 

projects15 we reviewed generally used a risk assessment tool as part of 

the project development process. The analysis of the risk assessment 

process and use of risk assessment tools included a review of 

documentation related to the project and GSA processes but was 

primarily focused on the project management plan (PMP), which is a key 

document that includes a risk assessment. Among the documents we 

 10GSA, Project Planning Guide (2004), GSA, Public Buildings Service, Capital Projects: 

PM Guide, v.2012 (July 2012), and GSA, PBS Project Management Practice Guide V.2

(undated).

11GSA, Fiscal Year 2017 Capital Investment and Leasing Program Call (May 2015).

12GSA, P-120, Project Estimating Requirements for the Public Buildings Service (January 

2007).

13GSA, Reimbursable Work Authorization National Policy Document, Version 3.0 (August 

22, 2012).

14GSA, National Project Intake Guide (January 2014).

15Three RWA projects were attached to larger projects. For two of these projects, project 

management plans were performed for the larger projects. 
Appendix I: Objectives, Scope, and 

Methodology

Page 38 GAO-16-273 Federal Real Property

reviewed were PMPs, feasibility studies, and program development 

studies. We interviewed GSA officials, both at headquarters and in five 

GSA regional offices (the four regional offices associated with the projects 

we selected plus Region 4, the Southeast-Sunbelt region), about GSA’s 

overall risk assessment methods and tools. These regions were selected 

since they accounted for about 80 percent of the funding for the RWA 

projects from which we selected projects to review. We also interviewed 

GSA project managers about how they identified and assessed risks for 

the specific projects we reviewed.

Our analysis of project risks and causes of unforeseen site conditions 

included a comparison of the possible causes of unforeseen site 

conditions that were experienced on the 18 projects we reviewed with 

whether those same causes were identified as part of project planning. As 

discussed earlier, we discussed with project managers and contracting 

officers the possible causes of unforeseen site conditions encountered 

and coded the causes into nine different categories. We also reviewed 

such documents as PMPs, feasibility studies, program development 

studies, and hazardous materials studies for the projects that submitted 

documentation to identify the potential project risks and their causes 

identified during project planning. We then compared the potential project 

risks identified during project planning with the actual unforeseen site 

conditions and their potential causes that were actually experienced as 

coded into the nine categories of causes. This resulted in a grouping of 

projects based on whether or not project planning identified the risk and 

whether or not they experienced a related unforeseen site condition. As 

part of our analysis, we did not assess whether GSA did or did not comply 

with its stated risk assessment methods or tools, use the appropriate risk 

assessment tool or method, or correctly identify appropriate risks as part 

of its assessment. We also did not assess whether or not additional risks 

could or should have been identified by GSA as part of the risk 

assessment process. Rather, we reviewed risk assessment documents, 

such as PMPs and feasibility studies for each of our projects to determine 

whether these documents were prepared and the types of risks identified. 

In some instances, we used our professional judgement to determine the 

type of risk identified by GSA based on the language or intent contained 

in the source document.

As part of evaluating how GSA identifies and assesses project risks to 

determine if improvements could be made, we reviewed Standards for 
Appendix I: Objectives, Scope, and 

Methodology

Page 39 GAO-16-273 Federal Real Property

Internal Control in the Federal Government and GAO’s Cost Estimating

and Assessment Guide: Best Practices for Developing and Managing 

Capital Program Costs (Cost Guide).

16 The Standards for Internal Control 

in the Federal Government provides the overall framework for 

establishing and maintaining an effective internal control system for the 

federal government. Among other things, the Cost Guide addresses 

generally accepted best practices for ensuring credible program cost 

estimates. It also discusses the role of risks and risk assessment in 

developing cost estimates. Finally, we reviewed the Project Management 

Institute’s (PMI) Global Standard: Practice Standard for Project Risk 

Management. PMI is a not-for profit professional membership 

organization for the project, program, and portfolio management 

profession. Among other things, this organization issues standards and 

conducts academic research to improve the profession of project 

management. The Global Standard: Practice Standard for Risk 

Management discusses principles of effective risk management, including 

risk identification and risk assessment.

We conducted this performance audit from February 2015 to March 2016 

in accordance with generally accepted government auditing standards.

Those standards require that we plan and perform the audit to obtain 

sufficient, appropriate evidence to provide a reasonable basis for our 

findings and conclusions based on our audit objectives. We believe that 

the evidence obtained provides a reasonable basis for our findings and 

conclusions based on our audit objectives.

 16GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1 

(Washington, D.C.: November 1999) and GAO Cost Estimating and Assessment Guide: 

Best Practices for Developing and Managing Capital Program Costs, GAO-09-3SP

(Washington, D.C.: March 2009).
Appendix II: Description of the General 

Services Administration’s (GSA) Repair and 

Alteration Projects GAO Reviewed

Page 40 GAO-16-273 Federal Real Property

Project name Location Project description

Project cost

(in millions)a

Prospectus projects

Dwight D. Eisenhower 

Executive Office Building

Washington, D.C. • Roof replacement $15.0

Daniel P. Moynihan U.S. 

Courthouse 

New York, NY • Construction of swing space to provide temporary 

chambers for district judges from the Thurgood Marshall 

Courthouse

• Construction of a new entrance pavilion for security and 

screening

26.3b

New Executive Office Building Washington, D.C. • Modernization of the heating, ventilation, and air 

conditioning (HVAC) system and abatement of 

hazardous materials

36.5c

Reimbursable work authorization projects

GSA Region

Region 3

Social Security Administration 

(SSA) variable air volume 

Wilkes Barre, PA • Replacement of variable air volume boxes throughout 

the building 

5.0

SSA command center Woodlawn, MD • Construction renovation to relocate the existing control 

and emergency response command center to a new 

building

• Update of the fire alarm system at SSA headquarters

11.6

SSA generator replacement Woodlawn, MD • Replacement of two emergency generators and 

reconfiguration of the associated electrical loads

• Upgrade of 8 existing elevators to current building code

4.5

SSA windows replacement Woodlawn, MD • Re-caulking of all windows in the building to reduce 

energy consumption

3.7d

U.S. Marshals Service (USMS) 

renovation 

Baltimore, MD • Renovation, over multiple phases, to construct new cell 

blocks, interview rooms, command center, security 

system, office space and a dedicated HVAC system

• Renovation of elevators and upgrades to mechanical 

and electrical systems

6.3

Region 9

Customs and Border Protection

San Ysidro Land Port of Entry

San Diego, CA • Installation of additional security equipment and the 

associated cabling and wiring

6.2

SSA Frank Hagel Federal 

Building: main entrance

Richmond, CA • Renovation of building entrance, including aesthetic and 

security upgrades

3.5

SSA Frank Hagel Federal 

Building: marina way entrance 

Richmond, CA • Renovation of building entrance, including aesthetic, 

security, and life-safety upgrades

3.8

USMS Courthouse renovation Tucson, AZ • Renovation of courthouse in 3 phases including the 

establishment of swing space for dislocated staff and 

the expansion of existing cell blocks

9.0

Appendix II: Description of the General 

Services Administration’s (GSA) Repair and 

Alteration Projects GAO Reviewed
Appendix II: Description of the General 

Services Administration’s (GSA) Repair and 

Alteration Projects GAO Reviewed

Page 41 GAO-16-273 Federal Real Property

Project name Location Project description

Project cost

(in millions)a

USMS tenant improvements at 

Prince Jonah Kalanianaole

Courthouse and Federal 

Building

Honolulu, HI • Renovation of special purpose and support space within 

the courthouse, including the renovation and 

construction of new holding cells 

4.7

Region 11

Department of Homeland 

Security St. Elizabeth’s 

development

Washington, D.C. • Construction of an operations center for the U.S. Coast 

Guard

• Renovation of existing building for tenant improvements 

and miscellaneous site work

20.2

Federal Bureau of Investigation 

field office design

Washington, D.C. • Renovation of existing space to create a secure work 

environment and improve energy consumption

5.1

U.S. Agency for International 

Development consolidation 

mobility design lab

Washington, D.C. • Renovation of office to a mobile workplace 7.2

U.S. Forest Service’s 

consolidation

Washington, D.C. • Renovation to upgrade all major building systems in 

order to accommodate the consolidation and relocation 

of employees from Rosslyn, Virginia, to Washington, 

D.C.

23.0

U.S. Secret Service’s firing 

range 

Washington, D.C. • Construction of firing range 4.4

Source: GAO analysis of project information and interviews with GSA officials. | GAO-16-273

a

For Prospectus projects, project costs are the total amount appropriated or apportioned for the 

project and for reimbursable work authorization projects, the project costs are the original award 

amount and any amendments to the original award.

b

Two million ($2 million) in appropriations were received for the design phase for this project. 

According to GSA, other funding for this project came from reprogramming funds from other projects. 

We considered this a prospectus project since a prospectus was prepared. However, the project 

manager told us it was not clear if a prospectus for this project was ever approved by relevant 

congressional committees. In commenting on this report, GSA officials told us a prospectus was 

prepared but it was not funded. Instead, GSA reprogrammed monies to do the project—one to 

undertake the space build-out and another to do the pavilion.

c

The original amount appropriated for this project was $36.5 million. However, the original project was 

subsequently canceled and GSA officials told us $20 million of the amount originally appropriated has 

been spent on this project.

d

According to GSA, this project was re-scoped from a replacement project to a re-caulking project due 

to the presence of hazardous materials. The cost of the project was reduced from $3.7 to $1.4 million.
Appendix III: Comments from the General 

Services Administration

Page 42 GAO-16-273 Federal Real Property

Appendix III: Comments from the General 

Services Administration
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 43 GAO-16-273 Federal Real Property

David J. Wise, (202) 512-2834, wised@gao.gov

In addition the individual named above, other key contributors to this 

report were Nancy Lueke, Assistant Director; Russell Burnett; Jenny 

Chow; Richard Jorgenson; Hannah Laufe; Malika Rice; Amy Rosewarne; 

Charles Schartung; and Crystal Wesco.

Appendix IV: GAO Contact and Staff 

Acknowledgments

GAO Contact

Staff 

Acknowledgments

(542242)
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