Capitol Visitor Center: Update on Schedule and Cost
Published: 2005-11-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: This testimony discusses the progress on the Capitol Visitor Center (CVC) project. Specifically, this testimony discusses (1) the status of the project schedule since Congress's October 18, 2005, hearing on the project, (2) the project's costs and funding, and (3) worker safety issues. We will discuss the progress made and problems encountered in completing scheduled construction work and in continuing to develop the project schedule, as we indicated during Congress's October 18 hearing; however, we will not be able to estimate specific completion dates until the project schedule is stable and the Architect of the Capitol (AOC) and its construction management contractor--Gilbane Building Company--have completed their assessments of the schedule and we have had an opportunity to evaluate them. Also, we will update the information we previously provided on the project's costs and funding, using readily available data, but we will wait until the project schedule is stable and has been fully reviewed before we comprehensively update our November 2004 estimate of the cost to complete the project and update the provision in our estimate for risks and uncertainties facing the project.
section_title: What GAO Found
paragraphs: Construction work in several areas has moved forward since Congress's October 18 CVC hearing, but additional delays have occurred, and AOC's construction management contractor has identified several concerns with the schedule that raise questions about its proposed mid-December 2006 opening of the base CVC project to the public. AOC and its construction management contractor expect to resolve outstanding scheduling concerns and issues by the end of this year. When AOC and its construction management contractor have prepared what they consider to be a reasonably stable project schedule, we will reevaluate the schedule and inform Congress of our results. In the interim, to help ensure that Congress has better information for making CVC-related decisions, we are recommending that AOC (1) implement the recommendations for obtaining a more reliable project schedule contained in its construction management contractor's November 2005 report, which are consistent with our previous recommendations on schedule management, and (2) reassess its proposed December 2006 date for opening the CVC to the public when it has a more reliable construction schedule. Our preliminary work indicates that the entire CVC project is likely, at a minimum, to cost $542.9 million. This preliminary estimate falls about midway between our September 15, 2005, interim estimate of $525.6 million, which did not provide for risks and uncertainties, and our November 2004 estimate of about $559 million, which did provide for risks and uncertainties. Specifically, this current $542.9 preliminary estimate is about $17.3 million more than the September 15 interim estimate and about $16.1 million less than the November 2004 estimate. The current $542.9 million preliminary estimate does not provide for risks and uncertainties or for additional payments to contractors to cover the costs of certain delays and other contingencies. Even without providing for risks and uncertainties, though, we have increased our cost estimate since September 15 because additional and more expensive changes to the project have been identified; we have increased our allowance for contingencies; and we have added funding for AOC and contractor staff that we believe are likely to be working on the project through the spring of 2007. Our preliminary estimate substantially exceeds MBP's November 2005 updated estimate of $481.9 million, largely because MBP's estimate does not cover a number of project components and does not, in our view, provide adequately for contingencies. According to our analysis of CVC data, worker safety rates have improved substantially this year, although the lost-time rate remains above industry norms. The injury and illness rate for the first 10 months of 2005 declined 52 percent from the rate for 2004, putting the CVC site's rate 3 percent below the average for comparable construction sites. The lost-time rate decreased 62 percent during the same period, but the CVC site's rate is still 29 percent higher than the average rate for comparable construction sites. AOC and its contractors have taken a number of actions during 2005 to improve safety performance on the project, such as conducting training to elevate safety awareness and placing safety posters around the worksite. In addition, senior managers are meeting periodically to develop strategies to improve safety. Poor housekeeping, however, has been an ongoing issue at the site, and the sequence 2 contractor has recently taken actions to address this issue.

section_title: Letter
paragraphs: We are pleased to be here today to assist the Subcommittee in monitoring  progress on the Capitol Visitor Center (CVC) project. Our remarks will  focus on (1) the status of the project schedule since the Subcommittee’s  October 18, 2005, hearing on the project, (2) the project’s costs and  funding, and (3) worker safety issues. We will discuss the progress made  and problems encountered in completing scheduled construction work  and in continuing to develop the project schedule, as we indicated during  the Subcommittee’s October 18 hearing; however, we will not be able to  estimate specific completion dates until the project schedule is stable and  AOC and its construction management contractor—Gilbane Building  Company—have completed their assessments of the schedule and we have  had an opportunity to evaluate them. Also, we will update the information  we previously provided on the project’s costs and funding, using readily  available data, but we will wait until the project schedule is stable and has  been fully reviewed before we comprehensively update our November  2004 estimate of the cost to complete the project and update the provision  in our estimate for risks and uncertainties facing the project.
Our remarks today are based on our review of schedules, financial reports,  and worker safety information for the CVC project and related records and  reports developed or maintained by AOC and its construction management  contractor; our review of AOC’s consultant’s—McDonough Bolyard Peck  (MBP)—November 1, 2005, report updating its October 2004 estimate of  the cost to complete the project; our observations on the progress of work  at the CVC construction site; and our discussions with CVC project staff  (including AOC and its major CVC contractors), AOC’s Chief Fire Marshal,  U.S. Capitol Police representatives, and officials responsible for managing  the Capitol Power Plant (CPP). We did not perform an audit; rather, we  performed our work to assist Congress in conducting its oversight  activities.
In summary, construction work in several areas has moved forward since  the Subcommittee’s October 18 CVC hearing, but additional delays have  occurred, and AOC’s construction management contractor has identified  several concerns with the schedule that raise questions about its proposed  mid-December 2006 opening of the base CVC project to the public.
Construction work has continued on all interior CVC levels, various  sections of the House and Senate expansion spaces, the plaza, and the  House connector and utility tunnels. Overall, however, the work,  especially stonework, has taken longer than scheduled. For example, the  installation of interior wall stone fell behind about 2 weeks because of  delays in receiving needed stone. Work on the utility tunnel was delayed  by a similar amount of time for a variety of reasons.
Efforts by the sequence 2 contractor to resequence activities involved in  testing, balancing, and commissioning the heating, ventilation, and air- conditioning (HVAC) system had the net effect of moving the base  project’s completion date forward 3 days. AOC’s construction  management contractor has accepted this resequencing. However, other  scheduling issues could delay completion. For example, AOC’s Fire  Marshal Division has raised several concerns about the schedule for  testing and inspecting the CVC’s fire protection system, and the  construction management contractor has identified a number of critical  activities whose completion dates slipped from the September to the  October schedule. Delays in completing these critical activities affect the  progress of the project because other work cannot continue until they are  completed. Critical stonework activities pose particular concerns, given  the problems with labor and supplies that the project has experienced. For  example, in October, the sequence 2 contractor received less than 20  percent of the stone expected.
AOC’s construction management contractor’s evaluation of the duration of  selected activities, completed last week, points to a later completion date  than is currently scheduled unless additional actions are taken. This  evaluation identified unrealistic durations for the selected activities  (especially stonework), concerns about the schedule’s logic, and  inaccuracies in reflecting the impact of delays and sequence 2 contract  changes to date. The construction management contractor made a number  of recommendations based on its findings. The contractor’s evaluation has  reinforced our view that the base project would be difficult to complete in  2006 and is more likely to be completed in early to mid-2007 unless AOC  and its contractors take extraordinary action or change the project’s  scope, which could increase the government’s costs. Our belief is based on  the project’s history of delays; the views of project personnel that several  activities (such as the installation of interior wall stone) are likely to take  longer than scheduled; the large number of critical activities in the current  project schedule; and the risks and uncertainties that continue to face the  project.
AOC and its construction management contractor expect to resolve  outstanding scheduling concerns and issues by the end of this year. When  AOC and its construction management contractor have prepared what  they consider to be a reasonably stable project schedule, we will  reevaluate the schedule and inform the Subcommittee of our results. In the  interim, to help ensure that Congress has better information for making  CVC-related decisions, we are recommending that AOC (1) implement the  recommendations for obtaining a more reliable project schedule contained  in its construction management contractor’s November 2005 report, which  are consistent with our previous recommendations on schedule  management, and (2) reassess its proposed December 2006 date for  opening the CVC to the public when it has a more reliable construction  schedule.
Our preliminary work indicates that the entire CVC project is likely, at a  minimum, to cost $542.9 million. This preliminary estimate falls about  midway between our September 15, 2005, interim estimate of $525.6  million, which did not provide for risks and uncertainties, and our  November 2004 estimate of about $559 million, which did provide for risks  and uncertainties. Specifically, this current $542.9 preliminary estimate is  about $17.3 million more than the September 15 interim estimate and  about $16.1 million less than the November 2004 estimate. The current  $542.9 million preliminary estimate does not provide for risks and  uncertainties or for additional payments to contractors to cover the costs  of certain delays and other contingencies. Even without providing for risks  and uncertainties, though, we have increased our cost estimate since  September 15 because additional and more expensive changes to the  project have been identified; we have increased our allowance for  contingencies; and we have added funding for AOC and contractor staff  that we believe are likely to be working on the project through the spring  of 2007. Our preliminary estimate substantially exceeds MBP’s November  2005 updated estimate of $481.9 million, largely because MBP’s estimate  does not cover a number of project components and does not, in our view,  provide adequately for contingencies. In total, the funds specifically  provided for project construction to date—about $528.4 million—are $14.5  million less than our preliminary $542.9 million cost estimate. In addition,  another $7.7 million has been provided to cover either CVC construction  or operations, although at this time AOC does not plan to use any of these  funds for construction. Congress has limited the amount of federal funds  that can be used for the construction of the tunnel connecting the CVC  with the Library of Congress to $10 million. As of October 31, 2005, AOC  estimated that the tunnel would cost about $8.8 million to construct;  however, AOC had not yet awarded the contract for certain modifications  to the tunnel project. Nevertheless, AOC believes that it will be able to  keep the tunnel’s construction cost below the congressional limitation,  and both we and AOC plan to monitor the tunnel’s construction cost  closely.
According to our analysis of CVC data, worker safety rates have improved  substantially this year, although the lost-time rate remains above industry  norms. The injury and illness rate for the first 10 months of 2005 declined  52 percent from the rate for 2004, putting the CVC site’s rate 3 percent  below the average for comparable construction sites. The lost-time rate  decreased 62 percent during the same period, but the CVC site’s rate is still  29 percent higher than the average rate for comparable construction sites.  AOC and its contractors have taken a number of actions during 2005 to  improve safety performance on the project, such as conducting training to  elevate safety awareness and placing safety posters around the worksite.  In addition, senior managers are meeting periodically to develop strategies  to improve safety. Poor housekeeping, however, has been an ongoing issue  at the site, and the sequence 2 contractor has recently taken actions to  address this issue.
subsections: section_title: Work and Revisions to the Project Schedule Continue, but Delays Hamper Progress
paragraphs: Work in several areas has moved forward since the Subcommittee’s  October 18 CVC hearing, but additional delays have occurred, and AOC’s  construction management contractor has identified several concerns  about the project schedule. AOC has been addressing previously identified  schedule-related problems.
subsections: section_title: AOC Continues to Project a Mid-December 2006 Opening for the Base CVC Project
paragraphs: According to the October 2005 schedule prepared by AOC’s sequence 2  construction management contractor, the base CVC project can open to  the public in December 2006, and the House and Senate expansion spaces  will be finished by the end of February 2007. The contractor’s October  schedule indicates that, with some exceptions, construction work on the  base CVC project will be essentially complete by September 15, 2006, and  the remaining work will be completed by December 8, 2006. This  remaining work includes testing, balancing, and commissioning the HVAC  system; testing and inspecting the fire protection system; completing  punch-list items; and preparing for operations. For the East Front, the  October schedule shows construction work, such as the roof restoration,  finish work, and elevator/escalator installation, completed after September  15, 2006. The October schedule also shows other construction work, such  as the installation of ceiling panels in the orientation lobby and painting in  the atria, extending after September 15, 2006. AOC expects all this  construction work to be done and the base CVC project to be ready for  operations between September 15, 2006, and mid-December 2006, enabling  the facility to open to the public in mid-December. Additionally, under the  October project schedule, the House and Senate expansion spaces will be  completed in December 2006, and the testing, balancing, and  commissioning of the HVAC system and the testing of the fire protection  system will be finished by February 26, 2007. According to AOC’s sequence  2 and construction management contractors, it is not yet clear whether the  expansion space construction work will have progressed far enough to  omit the temporary fire safety measures once considered necessary to  open the CVC to the public. They said they are still analyzing the work  associated with the areas where the base project and the expansion spaces  come together to determine whether and how the need for temporary fire  safety measures can be minimized or eliminated.
section_title: Construction Work Continued, but Problems with Stonework and Other Issues Caused Delays
paragraphs: Since the Subcommittee’s October 18 CVC hearing, construction work has  continued on the CVC, the East Front, the plaza, the House and Senate  expansion spaces, and the House connector and utility tunnels. For  example, the installation of wall stone has continued in the auditorium, the  orientation theaters, and the upper west lobby. Mechanical, electrical, and  plumbing work has also been proceeding in the CVC.
Overall, however, construction work, especially stonework, has taken  longer than scheduled. Between the Subcommittee’s October 18 hearing  and November 10, the sequence 2 contractor completed 8 of the 16  activities that we and AOC have been tracking for the Subcommittee, but  only 3 of these activities were completed by the target dates shown in the  contractor’s September 2005 schedule. (See app. I.) Delays have also  occurred in interior stonework and in work on the East Front, the utility  tunnel, and the penthouse’s mechanical systems. For example, according  to AOC’s construction management contractor, similar to what happened  in September, the sequence 2 contractor lost about 10 out of 21 possible  workdays, both on critical interior stonework and on the utility tunnel.  According to the construction management contractor, the stonework was  delayed by the slow and late delivery of stone, a lack of critical pieces of  stone, the need to address problems arising from sequence 1 work, and a  shortage of stone masons. During October, the installation of wall stone in  the great hall and exhibit gallery was especially impeded because the  stone supplier failed to meet scheduled delivery dates and the sequence 2  contractor received less than 20 percent of the stone the supplier had  agreed to provide. Moreover, according to the sequence 2 contractor,  during several preceding months, deliveries of stone were only about half  as large as expected. Additionally, the contractor said, the delivered stone  was not in the appropriate sequence and did not cover complete areas. To  help mitigate these problems, during October, the sequence 2 contractor  transferred stone masons from areas such as the exhibit gallery, for which  no wall stone was available, to the auditorium, for which wall stone was  available.
AOC’s construction management contractor cited other delays in October,  especially in the utility tunnel and in the exhibit gallery. For instance,  work on First Street for the utility tunnel was delayed by unforeseen site  conditions, rain, and the need to do unanticipated work. However, the  construction management contractor said that steps have been taken to  mitigate the impact of the delays, including the sequence 2 contractor’s  hiring of another subcontractor and the installation of piping in the tunnel.  In the view of the construction management contractor and the sequence 2  contractor, these steps will enable the CVC’s air-handling units to start up  in February 2006 rather than in March 2006, as indicated in the October  schedule. In the exhibit gallery, besides the delay in wall stone installation,  the construction management contractor identified several problems,  including delays in drawings for marble and finishes and concerns about  the acceptability of the gallery’s fire suppression system, that could further  delay work in the exhibit gallery.
section_title: Schedule Revisions Saved Some Time, but Many Activities Are Highly Vulnerable to Delay
paragraphs: The sequence 2 contractor resequenced activities involved in testing,  balancing, and commissioning the HVAC system and made other schedule  changes that had the net effect of moving the base project’s completion  date forward 3 days. While the resequencing will result in a loss of 10  workdays for the HVAC activities, according to the contractor’s revised  schedule, the other changes have advanced the base project’s scheduled  completion date to December 8, 2006, rather than December 11, 2006, as  indicated in the September schedule. AOC’s construction management  contractor reports that it, the sequence 2 contractor, and AOC’s  commissioning contractor have generally agreed on the revised schedule  for testing, balancing, and commissioning the HVAC system. However,  AOC’s Fire Marshal Division has not yet agreed on the schedule for those  activities that relate to the CVC’s fire protection system, such as testing  and inspecting the smoke control system, the fire alarm system, and stair  pressurization. On October 31, the division provided its comments on the  revised schedule for the fire protection system. The division’s Deputy Fire  Marshal expressed several significant concerns about the schedule. AOC  and its construction management contractor expect to complete their  reviews of this part of the schedule and resolve the Fire Marshal Division’s  concerns by December 31, 2005.
The construction management contractor has identified 14 critical activity  paths in the October schedule that will extend the base project’s  completion date beyond AOC’s September 15, 2006, target date if expected  lost time cannot be recovered or further delays cannot be prevented.  Eleven of the 14 critical activity paths in the October schedule were also  identified in the September schedule. For 4 of these 11 paths, such as the  auditorium wall stone installation and the orientation theater millwork,  the completion dates showed improvement compared with the September  schedule, but for the other 7 paths, such as the utility tunnel and the  exhibit gallery stonework, the completion dates slipped. The 3 paths newly  identified in October are elevator installation, exhibit gallery steel framing,  and 10- and 12-inch water line installation, each of which could delay the  project if expected lost time cannot be recovered. In addition, our analysis  of productivity data for interior wall stone installation, coupled with the  sequence 2 contractor’s analysis of stone deliveries, indicates that AOC is  not likely to meet its September 15, 2006, target date for completing the  base project’s construction without significant increases in the pace of  wall stone deliveries and installation. That is, without more stone masons  and/or more work hours, more stone delivered more quickly, and faster  stone installation, AOC is unlikely to meet its target schedule. The  sequence 2 contractor believes that stone masons will be able to install  more wall stone per day in some areas, such as the exhibit gallery, because  the work is not as difficult as in the great hall or orientation theaters.  However, the pace of this installation remains uncertain, in our view.  Furthermore, given the project’s experiences to date with the number of  stone masons, the quantity of stone deliveries, and the pace of installation,  AOC’s construction management contractor notes that the completion of  wall stone installation could extend up to several months beyond the July  2006 date shown in the project schedule without more work hours, higher  productivity, and sufficient stone. The pace of wall stone installation is  especially important because it affects the timing of other critical work  necessary for the project’s completion, such as the ceiling’s installation  and the HVAC system’s testing, balancing, and commissioning. The stone  supply problem is the subject of litigation between the sequence 2  contractor and its subcontractors, and the sequence 2 contractor has been  working to resolve the problem. However, at this time, it is not clear how  or when this issue will be resolved.
section_title: Construction Management Contractor’s Evaluation and Our Analysis Point to a Later Completion Date
paragraphs: Most of the activities we have been discussing, such as the wall stone  installation, fire safety inspections, and House connector tunnel  construction, are among the activities that we previously identified as  likely having optimistic durations, suggesting that those activities could  take longer to complete than shown in the project schedule. These  activities served as the basis for our September 15 recommendation that  AOC rigorously evaluate the durations for the activities shown in the  project schedule. Last week, AOC’s construction management contractor  finished evaluating these durations and the logic for what it considered the  most critical activities, such as wall stone installation, and discussed the  impact of delays and sequence 2 contract changes on the project schedule.  In its November 9 report to AOC, the construction management contractor  said that (1) it was generally difficult to identify any activities that were  completed within the planned duration; (2) none of the activities  underway, primarily stonework, can be projected to be completed within  the planned duration unless additional resources are applied; (3) the  durations for a number of activities exceed 40 days compared with the  contractual limit of 20 days; and (4) the sequence 2 contractor’s  resequencing of work to mitigate the impact of delays will result in a  “stacking of trades,” which will require more manpower. Moreover,  although the sequence 2 contractor has said that the project schedule  reflects the impact of contract modifications executed to date and delays,  the construction management contractor noted that the schedule does not  accurately reflect the impact of contract changes and of delays due to the  schedule’s logic and raised concern about whether the schedule fully  reflected the impact of changes and delays given their magnitude.
The construction management contractor made several recommendations  to AOC based on its findings. For example, the construction management  contractor recommended the development of a revised schedule that  reflects (1) enhanced logic and sequencing of work, (2) activity durations  more in line with the contract’s 20-day maximum requirement, and (3) the  impact of all delays and contract changes encountered to date and the use  of available resources. The construction management contractor also  recommended the development of a recovery schedule for each  recognized delay, an analysis of the impact of the recovery activities on  required resources, and an examination of the amount of time required to  prepare for operations between completing construction and opening to  the public. The construction management contractor’s findings and  recommendations concerning the project schedule are generally  consistent with ours.
Although the sequence 2 contractor has taken, plans to take, and is  considering various actions to recover lost time and prevent or mitigate  further delays, we continue to believe that the contractor will have  difficulty completing construction before early to mid-2007. Among our  reasons for concern are the uncertainty associated with the fire protection  system schedule, including the concerns expressed by AOC’s Fire Marshal  Division and our earlier work that raised questions about the amount of  time being provided for system testing and inspections; the schedule  slippages to date; the optimistic durations for a number of activities based  on the views of CVC team members and the results of the construction  management contractor’s recently completed review; the large number of  activity paths that are critical; and the risks and uncertainties that  continue to face the project. In addition, the continued schedule slippages  indicate that more and more work will have to be done in a diminishing  amount of time, and we are concerned—as is the construction  management contractor—that the project schedule may not reflect the  impact of changes to sequence 2 work resulting from contract  modifications. Many changes, some substantial, have been made to the  sequence 2 contract since it was initially awarded in April 2003. Yet,  according to the construction management contractor, none of the  modifications that have added work to the sequence 2 contract or changed  the facility’s design have been reflected in the project schedule. Moreover,  as AOC’s construction management contractor has noted, several  problems have developed with activities associated with the exhibit  gallery, and delays in completing CVC ceiling work necessary for the  HVAC and fire protection systems could be problematic, although the CVC  team is considering ways to mitigate these risks. We also note that the  Chief Fire Marshal has not yet approved the construction drawings for the  fire protection system or the schedule for the system’s commissioning and  testing.
section_title: AOC Has Been Addressing Previously Identified Schedule-Related Issues
paragraphs: AOC and its construction management contractor have been working to  implement recommendations we have made to improve AOC’s schedule  management and to address other schedule-related issues we have  identified.
We have recommended for some time that AOC improve its schedule  management and analyze and document delays and the reasons and  responsibilities for them on an ongoing basis—at least monthly. In an  October 20, 2005, letter, AOC asked its construction management  contractor to implement this recommendation. The construction  management contractor has begun to establish a process for doing so and  plans to have it operational by December 31.
We have also recommended that the project schedule show the resources  to be applied to meet the schedule dates. While the sequence 2 contractor  has shown proposed resource levels for many activities, it has not done so  for many of the new activities added to the project schedule. The lack of  such information can complicate the analysis of delays, including their  causes and costs. AOC’s construction management contractor has  expressed particular concern about the resources for the stone and  finishing work and has requested additional resource information from the  sequence 2 contractor for these activities.
We have further recommended that AOC develop plans to mitigate risks  and uncertainties facing the project. In July 2005, AOC asked one of its  consultants—MBP—to assist it in identifying risks and developing plans to  address those risks. As of November 1, AOC had identified 55 risks facing  the project and had begun to develop and implement plans for managing  these risks. As of November 1, AOC said that it had developed mitigation  plans in varying levels of detail for about 30 risks and has been discussing  or plans to discuss the remaining risks at a weekly meeting. AOC also said  that it plans to add new risks to its list and develop mitigation plans for  other risks as appropriate.
In our October 18 testimony, we noted several problems associated with  the CPP that could adversely affect the CVC, as well as other  congressional buildings, if they are not corrected or addressed. For  example, potential delays in completing the West Refrigeration Plant  Expansion project and storm damage to electrical equipment that has  precluded the use of an East Refrigeration Plant chiller could limit the  ability of the CPP to provide enough steam and chilled water for the CVC’s  air handlers to begin operating in March 2006, as shown in the October  2005 schedule. Staffing and training issues associated with operating the  new equipment and a vacant CPP director position also pose management  concerns. Work on the West Refrigeration Plant Expansion project could  be delayed because AOC has directed the contractor to proceed with two  significant contract modifications since the Subcommittee’s October 18  CVC hearing. Specifically, the contractor is authorized to (1) reconfigure  piping so that the existing West Refrigeration Plant can be operated  independently of the West Refrigeration Plant Expansion to enhance the  CPP’s chilled water production capability and (2) change the design of the  control system that will serve both the West Refrigeration Plant and new  West Refrigeration Plant Expansion. These changes could affect the March  2006 completion date for the expansion project; however, AOC believes it  will have sufficient chilled water capacity for the CVC even if the  expansion project’s completion is delayed. Furthermore, AOC plans to  restore power to the chiller in the East Plant by realigning existing  equipment and is still determining why the electrical equipment (e.g., aging  equipment, inadequate maintenance) was vulnerable to storm damage.  Finally, the period for applying for the plant’s vacant director’s position  closed on November 4. According to AOC, it received 26 applications and  expects to fill the position in December. As part of a separate review for  this Subcommittee, we are continuing to assess certain CPP issues, such  as the staffing and training for, and the estimated cost to complete, the  West Refrigeration Plant Expansion project.
In our October testimony, we identified problems with coordination  between the CVC project team and AOC’s Fire Marshal Division. To  address these problems, AOC and its construction management contractor  have established a process for the team and the division to arrange for and  document CVC inspections.
section_title: Recommendations for Executive Action
paragraphs: To help ensure that Congress receives a more reliable estimate of the  project’s completion date in order to plan for the CVC’s opening to the  public and make more informed decisions about AOC’s funding needs for  CVC construction and operations, we recommend that the Architect of the  Capitol (1) implement the recommendations (which are consistent with  our prior recommendations on schedule management) made by its  construction management contractor in its November 9 report on its  schedule evaluation; and (2) reassess its proposal to open the CVC in mid- December 2006 when it is confident that it has a project schedule that  reflects realistic durations, enhanced logic, the resolution of concerns  expressed by the Fire Marshal Division, and the impact of delays and  contract changes.
section_title: Project’s Estimated Cost to Complete Expected to Increase, but Our Comprehensive Assessment Awaits Schedule Stabilization
paragraphs: Mr. Chairman, our preliminary work shows the cost to complete the entire  CVC project at around $542.9 million without provision for risks and  uncertainties. This preliminary estimate falls between our September 15,  2005, interim estimate of $525.6 million without provision for risks and  uncertainties, and our November 2004 estimate of about $559 million with  provision for risks and uncertainties. Our current estimate is substantially  higher than MBP’s updated estimate, and it exceeds the funding provided  for the project to date. As we said at the Subcommittee’s October 18  hearing, we are waiting for the project schedule to stabilize before we  comprehensively update our November 2004 estimate of the cost to  complete the project, including any costs to the government for delays. We  plan to provide this updated estimate with and without allowances for  risks and uncertainties and with adjustments for specific expected project  completion dates.
We would now like to discuss the basis for our estimate and why we  expect the project’s costs to increase, why our estimate differs from  MBP’s, how much funding is currently available for CVC construction and  how much more may be needed, and how much the Library of Congress  tunnel’s construction is likely to cost.
subsections: section_title: Estimate Is Preliminary
paragraphs: Our preliminary estimate of the cost to complete the entire CVC project,  which we will discuss today, is based on information provided by AOC  and its construction management contractor. It reflects our review of  MBP’s November 1, 2005, final report, which updates MBP’s October 2004  estimate and includes supporting data; our review of CVC contract  modifications and changes proposed between August 1, 2005, and October  31, 2005; the knowledge and experience we have gained from monitoring  this and other major construction projects; and our view that the base CVC  project in not likely to be completed before the spring of 2007. We have  discussed our preliminary estimate with AOC; however, we have not  completed other work needed for a comprehensive update of our cost-to- complete estimate. For example, we have not updated our previous  discussions of the project’s expected costs, risks, and uncertainties with  other CVC project team members and fully assessed the schedule’s impact  on costs, because the schedule has not been stabilized. Furthermore, we  have not incorporated any costs for delays over and above the amount  included in our November 2004 estimate. Delays have occurred since then,  but as of October 31, 2005, CVC construction contractors had not filed any  requests for adjustments or claims with AOC for delays occurring after  November 2004. AOC nevertheless expects to receive additional requests  for adjustments, and AOC’s construction management contractor believes  that AOC may incur more costs than budgeted for delays. At this time, it is  unclear who will bear responsibility for the various delays that have  occurred at the CVC site, and it is therefore difficult to estimate their  possible costs to the government.
section_title: CVC Costs Are Likely to Increase, Largely Because of Actual and Anticipated Changes and Delays
paragraphs: Assuming that the base project and the House and Senate expansion  spaces are completed in the spring of 2007 and considering the  qualifications just discussed, our preliminary estimate of the cost to  complete the entire project is about $542.9 million without provision for  risks and uncertainties. This estimate is about $17.3 million greater than  our September updated estimate of $525.6 million without provision for  risks and uncertainties and about $16.1 million less than our November  2004 estimate of about $559 million with provision for risks and  uncertainties. The $17.3 million increase is due largely to the following:  1.  Actual and anticipated changes in the project’s work scope. Most of  these changes were associated with sequence 2 work, but some also  occurred or are expected in other project components, such as  preconstruction. Significant sequence 2 changes include the  modifications to the CVC fire protection system that we discussed at  the Subcommittee’s October 18 CVC hearing, changes to the building’s  automated control system, and additional work to address gaps in the  scopes of sequence 1 and sequence 2 work, such as additional  waterproofing. Changes in the preconstruction component include  moving security screening trailers and doing additional materials  testing.  2.  Additional contingency funds. We believe that AOC will need  significantly more contingency funds for the remainder of the project  for three major reasons: First, the actual or estimated costs for  changes in sequence 2, the East Front interface, and the  preconstruction project components either exceed or account for the  majority of the funds budgeted for unanticipated work, and available  information indicates that additional changes in these areas are likely  as the project progresses. For example, the actual and proposed  sequence 2 changes to date are more numerous and more costly  (without any provision for risks and uncertainties) than we, AOC, and  MBP anticipated in late 2004, and the actual and estimated value of the  already identified changes greatly exceeds the budgeted contingency  funding. Moreover, according to AOC’s construction management  contractor, only about half the value of sequence 2 work is complete.  Given that about half the work remains and changes to the project  have been frequent thus far, we believe that more changes are likely to  require funding in the future. Second, a number of issues that were not  included in MBP’s analysis, such as the need for temporary  dehumidification, have arisen. Proposed change orders for work to  address these issues were not completed in time for the work to be  included in MBP’s report. Third, as MBP pointed out, the costs of many  pending (proposed, but not yet approved) changes that were included  in its report may be understated because they are based on AOC’s and  its construction management contractor’s estimates rather than on the  contractor’s price. According to MBP, historically, AOC’s construction  management contractor has significantly understated the costs of  pending changes. Thus, additional funds are likely to be needed to  cover the difference between the estimated and actual costs of the  approved changes.  3.  Delay-related project management costs. The schedule analysis  underlying our November 2004 cost-to-complete estimate suggested  that the CVC base project would most likely be completed in  December 2006, and our November 2004 and September 2005 cost  estimates therefore included funding for AOC’s CVC staff and  architectural and construction management contractors through that  time. Although the specific expected completion date for the base  project is still uncertain because AOC and its contractors have not yet  finished their schedule reassessment, our work indicates that the base  project is unlikely to be done before early 2007. Thus, our preliminary  estimated cost to complete includes the estimated costs for extending  AOC’s CVC staff and architectural and construction management  contractors for the base project to March 2007.
section_title: Our Estimate Differs from MBP’s Estimate Largely Because We Included More Items in the Project Scope and More Funds for Contingencies
paragraphs: Our preliminary $542.9 million estimate of the cost to complete the CVC  project is significantly higher than MBP’s November 1, 2005, $481.9 million  estimate for several reasons.
Our estimate includes the costs for the CVC’s air filtration system; MBP’s  does not.
MBP assumed the base project would be completed in December 2006; we  considered the spring of 2007 more likely.
MBP did not include the costs of all CVC construction-related work, such  as the fabrication and installation of wayfinding signs or the fit-out of the  gift shops. Our estimate includes these costs.
MBP provided less contingency funding than we did for a number of  project components (sequence 2, the House connector tunnel, the East  Front interface with the CVC, and the House and Senate expansion  spaces). We believe that our larger allowance is warranted, given the  complexity of the work, the CVC project’s experience with changes, and  our experience in monitoring other Capitol Hill construction projects.
section_title: Available Funding Is Unlikely to Be Sufficient
paragraphs: About $528.4 million has been provided for CVC construction, and an  additional $7.7 million has been provided for CVC construction or  operations. The $528.4 million consists of  the 527.9 million we discussed during the Subcommittee’s October 18 CVC  hearing and   $500,000 that the Department of Defense (DOD) originally provided to  AOC for security enhancements for the East Front of the Capitol and that  AOC now intends, with DOD’s approval, to use for security enhancements  related to the CVC’s air filtration system.
According to AOC, it does not currently plan to use any of the $7.7 million  for CVC construction. Thus, our preliminary $542.9 million cost-to- complete-estimate indicates that AOC would need about $14.5 million  more to complete the project, assuming it is completed in March 2007. As  noted, this estimate is preliminary and does not provide for contractor  delay costs beyond the amount included in our November 2004 cost  estimate.
AOC does not believe that future changes will require as much funding as  we do. We recognize that the total amount of funds that will be needed for  contingencies, as well as for adjustments to contracts to offset the costs of  delays, is unclear at this time and is subject to differing views.  Nevertheless, the costs for these items will be a major factor in  determining whether AOC will need additional appropriated funds. We  plan to address both issues when we do our comprehensive cost-to- complete update early next year.
section_title: Estimated Construction Costs for Library of Congress Tunnel under Limit, but Could Increase
paragraphs: Public Law 108-83 limits to $10 million the amount of federal funds that  can be obligated or expended for the construction of the tunnel  connecting the CVC with the Library of Congress. As of October 31, 2005,  AOC estimated that the tunnel’s construction would cost about $8.8  million, and AOC had obligated about $4.7 million for it. The remaining  estimated costs are for modifications to the Jefferson building to  accommodate the tunnel and for contingencies. AOC expects to receive  the bids for the Jefferson building work by November 22. Given that the  work associated with the Jefferson building has not started and involves  risks and uncertainties (since it will create an opening in the building’s  foundation and change an existing structure), we believe that AOC could  receive higher-than-expected bids and is likely to encounter unforeseen  conditions that could increase costs significantly. Both we and AOC plan  to monitor the tunnel’s construction closely to ensure that the statutory  limit is not exceeded.
section_title: Worker Safety Has Improved
paragraphs: Worker safety will remain an important issue at the CVC site as new  hazards arise with changes in the site’s physical structure and increases in  the number of employees and subcontractors in the months ahead. Since  we testified in May 2005 on worker safety, AOC and its contractors have  achieved improvements in key worker safety measures and actions. For  example, the CVC injury and illness rate declined, from 9.1 in 2003 and  12.2 in 2004, to 5.9 for the first 10 months of 2005—below the 2003  industry average of 6.1. Furthermore, the CVC lost-time rate declined, from  8.1 in 2003 and 10.4 in 2004, to 4.0 for the same 10-month period— approaching the 2003 industry average of 3.1. The quality of the  construction management contractor’s monthly CVC progress reports has  also improved. Whereas the reports for 2003 and 2004 contained  inaccurate data for key worker safety measures, as we testified in May  2005, the reports since June 2005 have contained accurate worker safety  data. (In one instance, however, the draft report we received from the  construction management contractor contained inaccurate worker safety  data, which were corrected after we pointed them out to the construction  management contractor.) Finally, AOC’s reporting of lost-time rates is now  consistent with an updated definition issued by the Bureau of Labor  Statistics in 2003.
AOC and its contractors have taken a number of actions during 2005 to  improve worker safety at the CVC site. For example, they have    held periodic safety meetings with senior managers to elevate safety issues  (and will schedule additional meetings as needed);   held a project safety day to increase CVC project employees’ safety    provided and scheduled training on fall protection and electrical safety, for  example, to elevate safety awareness and avoid accidents;   posted safety-related signs and banners around the CVC site to reinforce    added a second safety professional at the CVC project.
In addition, since this past summer, AOC’s Central Safety Office has been  involved in CVC worker safety. Specifically, the responsible official has (1)  clarified his role on the project with the CVC Project Executive, (2) visited  the CVC project site to obtain an understanding of general site conditions,  (3) attended periodic CVC safety meetings and (4) reviewed safety-related  data, reports, and meeting minutes. Drawing upon these efforts, the  official has made suggestions to CVC management on ways to improve  worker safety.
Poor housekeeping has been an ongoing issue at the site, and the sequence  2 contractor has recently taken actions to address this issue. Piles of  construction debris and trash, improperly stored equipment and materials,  and poorly maintained employee break areas have been identified in the  construction management contractor’s past safety audits. Although no  injuries have been attributed to housekeeping issues, the construction  management contractor and the sequence 2 contractor have recognized  that these issues present an ongoing problem. To address these issues, the  sequence 2 contractor is daily (1) cleaning up construction material debris  and other items, (2) cleaning up the site’s three assigned eating areas, and  (3) removing five to seven truckloads of trash. In addition, the sequence 2  contractor has placed more bait traps around the site to control rodents.
Mr. Chairman, this concludes our statement. We would be pleased to  answer any questions that you or Members of the Subcommittee may have.
section_title: Contacts and Acknowledgments
paragraphs: For further information about this testimony, please contact Bernard  Ungar at (202) 512-4232 or Terrell Dorn at (202) 512-6923. Other key  contributors to this testimony include Shirley Abel, Michael Armes, John  Craig, George Depaoli, Maria Edelstein, Elizabeth Eisenstadt, Brett  Fallavollita, Jeanette Franzel, Jackie Hamilton, Bradley James, Scott  Riback, and Kris Trueblood.
section_title: Appendix I: Capitol Visitor Center Critical Construction Milestones October 19- November 17, 2005
paragraphs: Wall stone Area 2 base  Wall stone area 1 layout  Wall stone Area 3 base  Excavate/shore Station Sta.  0.00-1.00  Concrete Working Slab Sta.  0.00-1.00  Waterproof Working Slab  Sta. 0.00-1.00  Install Mat Slab Sta.   0.00-1.00  Install Mat Slab Sta.   1.00-2.00  Install Walls Sta. 1.00-2.00  11/4/05  This is a work of the U.S. government and is not subject to copyright protection in the  United States. It 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.