Capitol Visitor Center: Update on Status of Project's Schedule and Costs
Published: 2005-07-14T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: This testimony discusses the Architect of the Capitol's (AOC) progress in achieving selected project milestones and in managing the Capitol Visitor Center (CVC) project's schedule since Congress's June 14 hearing on the project. We will also discuss the project's costs and funding, including the potential cost impact of schedule-related issues. Our observations today are based on our review of schedules and financial reports for the CVC project and related records maintained by AOC and its construction management contractor, Gilbane Building Company; our observations on the progress of work at the CVC construction site; and our discussions with AOC's Chief Fire Marshal and CVC project staff, including AOC, its major CVC contractors, and representatives of an AOC schedule consultant, McDonough Bolyard Peck (MBP). We did not perform an audit; rather, we performed our work to assist Congress in conducting its oversight activities.
section_title: What GAO Found
paragraphs: AOC and its major construction contractors have made progress on the project since Congress's June 14 hearing, but work on some of the selected milestones scheduled for completion by today's hearing is incomplete; some work has been postponed; and some new issues have arisen that could affect the project's progress. Largely because of past problems, remaining risks and uncertainties, and the number of activities that are not being completed on time, we continue to believe that the project is more likely to be completed in the December 2006 to March 2007 time frame than in September 2006. AOC and its construction management contractor have continued their efforts to respond to two recommendations we made to improve the project's management--having a realistic, acceptable schedule and aggressively monitoring and managing adherence to that schedule. However, we still have some concerns about the amount of time scheduled for some activities, the extent to which resources can be applied to meet dates in the schedule, the linkage of related activities in the schedule, and the integration of planning for completing construction and starting operations. Since Congress's last CVC hearing, AOC has engaged contractors to help it respond to two other recommendations we made--developing risk mitigation plans and preparing a master schedule that integrates the major steps needed to complete construction with the steps needed to prepare for operations. AOC has also been taking a number of actions to improve coordination between the CVC project team and AOC's Fire Marshal Division. Insufficient coordination in this area has already affected the project's schedule and cost, and could do so again if further improvements are not made. We continue to believe that the project's estimated cost at completion will be between $522 million and $559 million, and that, as we have previously indicated, AOC will likely need as much as $37 million more than it has requested to cover risks and uncertainties to complete the project. At this time, we believe that roughly $5 million to $15 million of this $37 million is likely to be needed in fiscal year 2006, and the remainder in fiscal year 2007. In the next 2 to 3 months, AOC plans to update its estimate of the project's remaining costs. We will review this estimate and provide Congress with our estimate together with information on when any additional funding is likely to be needed. During the next several months, AOC is likely to face competing demands for funds that can be used for either CVC construction or operations, and it will be important for AOC to ensure that the available funds are optimally used. Finally, we are concerned that AOC may incur costs to open the facility to the public in September 2006 that it would not incur if it postponed the opening until after the remaining construction work is more or fully complete--that is, in March 2007, according to AOC's estimates.

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. As requested, we will  focus our remarks today on the Architect of the Capitol’s (AOC) progress  in achieving selected project milestones and in managing the project’s  schedule since the Subcommittee’s June 14 hearing on the project. We  will also discuss the project’s costs and funding, including the potential  cost impact of schedule-related issues. Our observations today are based  on our review of schedules and financial reports for the CVC project and  related records maintained by AOC and its construction management  contractor, Gilbane Building Company; our observations on the progress  of work at the CVC construction site; and our discussions with AOC’s  Chief Fire Marshal and CVC project staff, including AOC, its major CVC  contractors, and representatives of an AOC schedule consultant,  McDonough Bolyard Peck (MBP). We did not perform an audit; rather, we  performed our work to assist Congress in conducting its oversight  activities.
In summary, AOC and its major construction contractors have made  progress on the project since the Subcommittee’s June 14 hearing, but  work on some of the selected milestones scheduled for completion by  today’s hearing is incomplete; some work has been postponed; and some  new issues have arisen that could affect the project’s progress.  Specifically, as of July 12, AOC’s sequence 2 contractor, Manhattan  Construction Company, had completed work on 11 of the 17 selected  milestones scheduled for completion before today’s hearing; however, it  completed only 3 of the 17 milestones on time. The sequence 2 contractor  missed the 14 remaining milestones for such reasons as unforeseen site  conditions, design problems, and more time being taken to complete some  other work than expected. In addition, the date scheduled for the initial  operation of the utility tunnel is now about 5 months later than AOC had  anticipated, and unforeseen conditions could delay the installation of  stone in the East Front. Although the June project schedule shows that the  delay on the East Front stonework would move the scheduled opening  date for the CVC project to October 19, 2006, AOC does not expect the  delays in completing the remaining milestones, including the utility tunnel  and East Front stonework, to postpone the project’s scheduled September  2006 completion date. In AOC’s view, the contractor can recover the time  lost in completing these milestones, as well as make up for delays in  completing interior stonework, by such means as using temporary  equipment, adding workers, or resequencing work, although using  temporary equipment or adding workers will also increase the project’s  costs. Largely because of past problems, remaining risks and uncertainties,  and the number of activities that are not being completed on time, we  continue to believe that the project is more likely to be completed in the  December 2006 to March 2007 time frame than in September 2006. AOC  and its construction management contractor have continued their efforts  to respond to two recommendations we made to improve the project’s  management—having a realistic, acceptable schedule and aggressively  monitoring and managing adherence to that schedule. However, we still  have some concerns about the amount of time scheduled for some  activities, the extent to which resources can be applied to meet dates in  the schedule, the linkage of related activities in the schedule, and the  integration of planning for completing construction and starting  operations. Since the Subcommittee’s last CVC hearing, AOC has engaged  contractors to help it respond to two other recommendations we made— developing risk mitigation plans and preparing a master schedule that  integrates the major steps needed to complete construction with the steps  needed to prepare for operations. AOC has also been taking a number of  actions to improve coordination between the CVC project team and AOC’s  Fire Marshal Division. Insufficient coordination in this area has already  affected the project’s schedule and cost, and could do so again if further  improvements are not made.
We continue to believe that the project’s estimated cost at completion will  be between $522 million and $559 million, and that, as we have previously  indicated, AOC will likely need as much as $37 million more than it has  requested to cover risks and uncertainties to complete the project. At this  time, we believe that roughly $5 million to $15 million of this $37 million is  likely to be needed in fiscal year 2006, and the remainder in fiscal year  2007. In the next 2 to 3 months, AOC plans to update its estimate of the  project’s remaining costs. We will review this estimate and provide  Congress with our estimate together with information on when any  additional funding is likely to be needed. During the next several months,  AOC is likely to face competing demands for funds that can be used for  either CVC construction or operations, and it will be important for AOC to  ensure that the available funds are optimally used. Finally, we are  concerned that AOC may incur costs to open the facility to the public in  September 2006 that it would not incur if it postponed the opening until  after the remaining construction work is more or fully complete—that is,  in March 2007, according to AOC’s estimates.
We are recommending that AOC designate who will be responsible for  integrating the planning and budgeting for CVC construction and  operations and notify Congress in advance of any estimated costs it  believes it will incur to open CVC to the public in September 2006 rather  than when the facility is more complete. AOC agreed with these  recommendations.
subsections: section_title: Schedule Milestones and Management
paragraphs: AOC and its major construction contractors have moved the CVC project  forward since the Subcommittee’s June 14 hearing, although the majority  of the selected milestones scheduled for completion by today’s hearing  have not been completed on time. According to the construction  management contractor, the base project’s construction was about 70  percent complete as of June 30, compared with about 65 percent as of May  31. The sequence 1 contractor, Centex Construction Company, which was  responsible for the project’s excavation and structural work, has  continued to address punch-list items, such as stopping water leaks.  Although AOC had expected the sequence 1 contractor to complete the  punch-list work and be off-site by June 30, some of this work remains to  be done. The sequence 1 contractor has closed its on-site project office  and plans to send workers back to the site to complete the remaining  work. AOC has retained funds from the sequence 1 contractor that it  believes will be sufficient to cover the cost of the remaining work.  Furthermore, the sequence 2 contractor, which is responsible for the  mechanical, electrical, plumbing, and finishing work, has continued to  make progress in these areas, including erecting masonry block, placing  concrete, and installing finish stone, drywall framing, plaster, and granite  pavers. Many of the granite pavers that were installed on the plaza deck  for the inauguration have to be replaced because of problems with quality  or damage after installation. The sequence 2 contractor plans to replace  these pavers when the plaza deck will no longer be needed for deliveries  of construction materials. The sequence 2 contractor has also continued  work on the utility tunnel, and in June, AOC executed a sequence 2  contract modification to construct the House connector tunnel. AOC  expects this work to begin soon.
As the Subcommittee requested, we worked with AOC to select sequence 2  milestones that the Subcommittee can use to help track the project’s  progress from the Subcommittee’s May 17 hearing to July 31. We and AOC  selected 22 milestones, of which 11 were scheduled for completion before  June 14, 6 others before July 14, and 5 others before July 31. These  milestones are shown in appendix 1 and include activities on the project’s  critical path, as well as other activities that we and AOC believe are  important for the project’s timely completion. As we reported during the  Subcommittee’s June 14 hearing, AOC’s sequence 2 contractor completed  6 of the 11 selected activities scheduled for completion before that date—3  were completed on time and 3 were late. The remaining 5 activities had  not been completed as of June 14. Of these 5, 4 have now been completed  and as of July 12, 1 remained incomplete. In addition, as of July 12, the  contractor was late in completing 1 of the 6 selected activities scheduled  for completion between June 14 and July 14 and had not yet completed the  remaining 5. AOC does not expect these delays to extend the project’s  scheduled September 2006 completion date because it believes that the  sequence 2 contractor can recover the lost time.
A few months ago, AOC expected the utility tunnel to be operational in  October 2005, but it extended that date to March 20, 2006, before the June  hearing. The June schedule shows the tunnel being operational on March  7. The sequence 2 contractor has indicated that the impact of the October- to-March delay on CVC construction could be mitigated by using  temporary dehumidification equipment, adding more workers to certain  utility tunnel activities, or both. However, this mitigation approach would  increase the government’s costs. We previously identified the utility tunnel  as a project schedule and cost risk because of possible unforeseen  conditions associated with underground work, and AOC and the sequence  2 contractor believe that such risk still exists with respect to the remaining  tunnel work. Given this risk and the importance to the rest of the project  of having the utility tunnel operational as soon as possible, AOC has asked  the project team to explore options for accelerating the completion of the  work necessary to begin the tunnel’s operations. We agree with AOC that  delays in making this tunnel operational could have significant adverse  effects on other project elements and that priority attention should be  given to this area. Accelerating work may be cost-beneficial in this case.
Since the June 14 hearing, the sequence 2 contractor has also encountered  unforeseen conditions that, according to AOC’s construction management  contractor, could delay the installation of stone on the Capitol’s East  Front. Unless mitigated, this delay, in turn, could delay AOC’s estimated  September 15, 2006, opening date. In fact, the June schedule shows a 24- day delay for this work, which is on the project’s critical path, and  therefore pushes AOC’s scheduled date for opening CVC to the public to  October 19, 2006. AOC and its construction management contractor are  assessing the situation and expect to have more information on this  problem within the next month. However, they believe that they will be  able to recover the lost time by resequencing work, although they  acknowledge that their mitigation approach would require sufficient stone  to be available. The project has not been receiving stone in the quantities  set forth in the delivery schedule—a risk that we previously identified— and AOC and its contractors have been taking action to address this  problem, but have not yet resolved it. Mitigating this potential delay in  East Front stone installation could increase the government’s costs if the  mitigation involves, among other actions, expediting the installation to  recover lost time.
Our May 17 and June 14 statements contained several observations on  AOC’s management of the project’s schedules, including our view that  problems in this area contributed to slippage in the project’s scheduled  completion date and additional project costs associated with delays. The  statements also discussed recommendations we had already made to AOC  to enhance its schedule management. AOC had agreed with these  recommendations and had generally begun to implement them, but we  believed that it still needed to give priority attention to them to keep the  project on track and as close to budget as possible. An updated discussion  follows of the issues that need AOC’s priority attention, along with current  information on the status of AOC’s actions to address these issues.
Having realistic time frames for completing work and obtaining  fully acceptable schedules from contractors. Over the course of the  project, AOC’s schedules have shown dates for completing tasks that  project personnel themselves considered optimistic or unlikely to be met.  In addition, the master project schedule (prepared by AOC’s construction  management contractor) that AOC was using in May 2005 (the April  schedule that AOC said it would use as a baseline for measuring progress  on the project) did not tie all interrelated activities together and did not  identify the resources to be applied for all the activities, as AOC’s contract  requires. During the Subcommittee’s June 14 hearing, AOC said that it  would reassess the time scheduled for tasks by today’s hearing. Since the  Subcommittee’s June 14 hearing, AOC’s construction management and  sequence 2 contractors reviewed the reasonableness of the time scheduled  for 14 critical or near-critical activities and determined that, in general, the  time shown in the May 2005 schedule reasonably reflected the time  required to perform 11 of these activities. In addition, the sequence 2  contractor agreed to provide more detail about the 3 remaining activities  so that the reasonableness of the time scheduled for them could be  reviewed later.
Although the contractors’ review did not involve a detailed, data-based  analysis of the time scheduled for activities using such information as  crew size and worker productivity, AOC’s construction management  contractor said that it would do such analyses in the future, as  appropriate. The construction management contractor said it has not yet  done such an analysis for stonework because, to date, less stone has been  delivered to the site than was expected and more stone workers have been  available than could be used, given the shortage of stone. In AOC’s view,  this stone shortage has begun to delay important activities, and as we  previously indicated, AOC is working with its contractors to resolve the  problem.
According to AOC’s construction management contractor, both the  project’s May and June 2005 master schedules (1) reflect significant  improvement in the linkage of interrelated tasks, although the contractor  recognizes that more work needs to be done in this area and (2) generally  provide sufficient information to manage the project’s resources.  However, the contractor also recognizes the need for the sequence 2 and  other contractors to continue adding more detail to the activities  scheduled for some project elements, such as the exhibit and expansion  spaces, so that more of the interrelated activities will be linked in the  schedule. The contractor also said that it will be continuously reassessing  the extent to which construction contractors identify the resources they  plan to apply to meet scheduled completion dates, as contractually  required. Both adding detail to activities and identifying the resources to  be applied are helpful in assessing the reasonableness of the time  scheduled and in managing contractors’ performance. The sequence 2  contractor has provided a separate schedule showing its target dates for  adding more detail to 30 project tasks. On July 8, AOC’s construction  management contractor accepted the April project schedule, subject to  several conditions.
Because the May 2005 master schedule for the CVC project contains  additional detail on activities and information on resources to be applied,  we agree with AOC’s construction management contractor that this  schedule represents an improvement over earlier schedules. However, we  still have concerns about the extent to which the schedule links related  activities, which the construction management contractor has agreed to  address, and about whether AOC’s September 15, 2006, target date for  opening the facility to the public is realistic. For the following reasons, we  continue to believe that the project is more likely to be substantially  completed in the December 2006 to March 2007 time frame than by  September 2006:    Because of unforeseen site conditions and other problems, AOC’s  construction contractors have had difficulty meeting a number of  milestones. The project still faces risks and uncertainties that could  adversely affect its schedule. As we noted in our June 14 testimony, the  number of critical and near-critical paths the construction management  contractor has identified complicates schedule management and increases  the risk of problems that could lead AOC to miss the scheduled  completion date. Like the project’s May 2005 schedule, the June schedule  shows seven paths that are critical or near critical. Among the critical  paths are East Front stonework and some interior stonework, which  slipped by 24 days and 3 days in June, respectively. In addition, some other  interior stonework that is not generally on a critical path, such as the  installation of wall stone in the Great Hall, has slipped by about 4 months  since April because of stone shortages according to AOC. Continued  slippages in interior stonework could make it difficult for the sequence 2  contractor to meet the September 15, 2006, completion date. Although the  CVC project team believes that it can recover this time, its ability to do so  is not yet clear, given the stone supply problem facing the project.  Furthermore, although work on the utility tunnel progressed during June,  the tunnel work continues to face risks and uncertainties that could delay  the project, and the May and June schedules show that the start and finish  dates for a number of activities have continued to slip. Although it is  possible for AOC to recover this time, continued slippage could push so  many activities to later dates that the contractors may not be able to  complete all the work in the remaining available time.
In our opinion, AOC lacks reasonable assurance that its contractors have  accurately estimated the time necessary to complete work for a number of  activities in the schedule. Although the construction management  contractor’s recent review of how much time is needed to complete  schedule activities was helpful, we are still concerned about the  reasonableness of the time allowed for a number of the activities. For  example, one of the activities reviewed in June whose scheduled duration  was found to be generally reasonable was final occupancy inspections.
Although AOC’s Fire Marshal Division is to do critical work associated  with this activity, the duration review that took place since the June 14  hearing occurred without any input from that division, which is to conduct  fire safety and occupancy inspections for the project and approve its  opening to the public. The Chief Fire Marshal told us that although  coordination has improved between his office and the CVC project team,  he has not always had an opportunity to review project documentation  early in the process and has not yet received the project schedule. As a  result, he was uncertain whether the schedule provided enough time for  his office to do its work. For example, as of July 8, he had not yet received  documentation for the fire protection systems, which his office needs to  examine before it can observe tests of these systems as the CVC team has  already requested. The Fire Marshal Division will also be involved in fire  alarm testing; the construction management contractor plans to assess the  duration of this activity later after more detail is added to the schedule. In  addition, at the time the construction management contractor performed  its duration reassessment of East Front stonework, the project was  experiencing difficulty getting stone deliveries on time. It is unclear to us  how the duration of the stonework could have been determined to be  reasonable given this problem and the lack of a clear resolution at the  time.
The May 2005 schedule includes a number of base project activities that  could be completed after September 15, 2006, even though their  completion would seem to be important for CVC to be open to the public.  Such activities include installing security systems, kitchen equipment, and  theater seating. According to the schedule, the late finish dates for these  activities are after September 15. The late finish date is the latest date that  an activity can be completed without delaying the scheduled completion  date for the entire project. According to the construction management  contractor, a number of activities in the schedule that are important to  CVC’s opening were not linked to the September 15 opening date in the  schedule. The contractor agreed to address this issue.
Last week, we began to update our risk assessment of the project’s  schedule and plan to have this update completed in September. AOC has  also engaged a consultant to perform a risk assessment of the project’s  schedule and expects the assessment to be done by mid-September. We  believe that better information on the likelihood of AOC’s meeting its  September 15, 2006, opening date will be available after our update and  AOC’s schedule risk assessment are done.
Aggressively monitoring and managing contractors’ adherence to  the schedule, including documenting and addressing the causes of  delays, and reporting accurately to Congress on the status of the  project’s schedule. We noted in our May 17 testimony that neither AOC  nor its construction management contractor had previously (1) adhered to  contract provisions calling for monthly progress review meetings and  schedule updates and revisions, (2) systematically tracked and  documented delays and their causes as they occurred or apportioned their  time and costs to the appropriate parties on an ongoing basis, and (3)  always accurately reported on the status of the project’s schedule. On June  7 and July 8, AOC, its construction management contractor, the sequence 2  contractor, and AOC’s schedule consultant conducted the first and second  monthly reviews of the schedule’s status using a newly developed  approach that we discussed during the Subcommittee’s June 14 hearing.  Additionally, on June 28, we met with AOC and its construction  management contractor to discuss how delays are to be analyzed and  documented in conjunction with the new approach to schedule  management. During that meeting, AOC’s construction management  contractor agreed to have its field supervisors document delays and their  causes on an ongoing basis and its project control engineer summarize this  information for discussion at the monthly schedule reviews. After  assessing the new approach and observing the first two review sessions,  we believe that, if effectively implemented and sustained, this approach  should generally resolve the schedule management concerns we  previously raised, including how delays will regularly be handled and how  better information on the status of the project will be provided to  Congress. As we indicated on June 14, we are encouraged by the  construction management contractor’s addition of a full-time project  control engineer to the project and have seen noteworthy improvements in  schedule management since his arrival. Nevertheless, we plan to closely  monitor the implementation of this new approach, including the resources  devoted to it, the handling of delays, and the accuracy of the information  provided to Congress.
Developing and implementing risk mitigation plans. While  monitoring the CVC project, we have identified a number of risks and  uncertainties that could have significant adverse effects on the project’s  schedule and costs. Some of these risks, such as underground  obstructions and unforeseen conditions, have already materialized and  have had the anticipated adverse effects. We believe the project continues  to face risks and uncertainties, such as unforeseen conditions associated  with the project’s remaining tunnels, the East Front, and other work;  scope gaps or other problems associated with the segmentation of the  project between two major contractors; and shortages in the supply of  stone and skilled stone workers. As discussed during the Subcommittee’s  June 14 hearing, AOC has not yet implemented our recommendations that  it develop risk mitigation plans for these types of risks and uncertainties,  but it has agreed to do so by mid-September. On July 1, AOC added  assistance in risk mitigation to the scope of its contract with its schedule  consultant.
Preparing a master schedule that integrates the major steps  needed to complete CVC construction and the steps necessary to  prepare for operations. A number of activities, such as obtaining  operators’ input into the final layouts of retail and food service areas,  hiring and training staff, procuring supplies and services, and developing  policies and procedures, need to be planned and carried out on time for  CVC to open to the public when construction is complete. Although AOC  has started to plan and prepare for CVC operations, as we indicated in our  May 17 and June 14 testimonies, it has not yet developed a schedule that  integrates the construction activities with the activities that are necessary  to prepare for operations. The Subcommittee requested such a schedule  during its April 13, 2005, hearing on AOC’s fiscal year 2006 budget request.  Because it lacked funds, AOC had not been able to extend the work of a  contractor that had been helping it plan and prepare for operations.  During the week of June 6, AOC received authority to spend the funds  needed to re-engage this contractor, and on June 30, AOC awarded a  contract for the continued planning and preparation for CVC operations.  Now that AOC has re-engaged its operations planning contractor, we  believe that close coordination between AOC staff working with this  contractor and the CVC project’s construction team will be especially  important for at least two reasons. First, the operations planning  contractor’s scope of work includes both the design of certain space  within the CVC project and the wayfinding signs that are to be used within  the project, and the timing and content of this work needs to be  coordinated with CVC construction work. Second, about $7.8 million is  available for either CVC construction or operations, and it will be  important for AOC to balance the need for both types of funding to ensure  optimal use of the funds. Moreover, it is not clear to us who in AOC will be  specifically responsible for integrating the construction and operations  schedules and for overseeing the use of the funds that are available for  either construction or operations.
section_title: Project Costs and Funding
paragraphs: As we said during the Subcommittee’s May 17 and June 14 hearings, we  estimate that the cost to complete the construction of the CVC project,  including proposed revisions to its scope, will range from about $522  million without provision for risks and uncertainties to about $559 million  with provision for risks and uncertainties. As of July 11, 2005, about $483.7  million had been provided for CVC construction. In its fiscal year 2006  budget request, AOC asked Congress for an additional $36.9 million for  CVC construction. AOC believes this amount will be sufficient to complete  construction and, if approved, will bring the total funding provided for the  project’s construction to $520.6 million. Adding $1.7 million to this amount  for additional work related to the air filtration system that we believe will  likely be necessary brings the total funding needed to slightly more than  the previously cited $522 million. AOC believes that it could obtain this  $1.7 million, if needed, from the Department of Defense, which provided  the other funding for the air filtration system. AOC’s $36.9 million budget  request includes $4.2 million for potential additions to the project’s scope  (e.g., congressional seals, an orientation film, and storage space for  backpacks) that Congress will have to consider when deciding on AOC’s  fiscal year 2006 CVC budget request.
AOC has not asked Congress for an additional $37 million (the difference  between $559 million and $522 million) that we believe will likely be  needed to address the risks and uncertainties that continue to face the  project. These include, but are not limited to, shortages in the supply of  stone, unforeseen conditions, scope gaps, further delays, possible  additional requirements or time needed because of life safety or security  changes or commissioning, unknown operator requirements, and  contractor coordination issues. These types of problems have been  occurring, and as of June 30, 2005, AOC had received proposed sequence 2  change orders whose costs AOC now estimates exceed the funding  available in fiscal year 2005 for sequence 2 changes by about $1.3 million.  AOC’s estimate of these change order costs has grown by about $900,000  during the past 4 weeks. AOC plans to cover part of this potential shortfall  by requesting approval from the House and Senate Committees on  Appropriations to reprogram funds that AOC does not believe will be  needed for other project elements. At this time, AOC does not believe that  it will need additional funds in fiscal year 2005, assuming it receives  reprogramming authority for sequence 2 changes, unless it reaches  agreement with the sequence 2 contractor on the costs associated with 10  months’ worth of delays that have already occurred. If AOC needs funds  for this purpose or for other reasons, it can request approval from the  Appropriations Committees to use part of the $10.6 million that Congress  approved for transfer to the CVC project from funds appropriated for  Capitol Buildings operations and maintenance.
For several reasons, we believe that AOC may need additional funds for  CVC construction in the next several months. These reasons include the  pace at which AOC is receiving change order proposals for sequence 2  work, the problems AOC has encountered and is likely to encounter in  finishing the project, the uncertainties associated with how much AOC  may have to pay for sequence 2 delays, and uncertainty as to when AOC  will have fiscal year 2006 funds available to it. For example, AOC is likely  to incur additional costs for dehumidification or for additional workers to  mitigate the expected delay in the utility tunnel. AOC may also incur more  costs than it expects for certain activities, such as those necessary to  support security during the remainder of the project’s construction. AOC  may be able to meet these needs as well as the other already identified  needs by obtaining approval to use some of the previously discussed $10.6  million and by additional reprogramming of funds. However, these funds  may not be sufficient to address the risks and uncertainties that may  materialize from later this fiscal year through fiscal year 2007. Thus, while  AOC may not need all of the $37 million we have suggested be allowed for  risks and uncertainties, we believe that, to complete the construction of  CVC’s currently approved scope, AOC is likely to need more funds in fiscal  years 2006 and 2007 than it has already received and has requested.  Although the exact amount and timing of AOC’s needs are not clear, we  believe that between $5 million and $15 million of this $37 million may be  required in fiscal year 2006. Effective implementation of our  recommendations, including risk mitigation, could reduce AOC’s funding  needs.
Since the Subcommittee’s June 14 hearing, three issues related to the  project’s costs have emerged that we believe should be brought to your  attention. Discussion of these issues follows.
First, coordination within the CVC project team and between the team and  AOC’s Fire Marshal Division has been an issue, especially with respect to  the project’s fire protection systems. Although the CVC project team  established biweekly meetings with Fire Marshal Division staff in March  2005 to enhance coordination, gaps in coordination have, as discussed,  already led to uncertainty about whether enough time has been scheduled  for fire alarm testing and for building occupancy inspections. Such gaps  have also increased the costs associated with the fire protection system.  For example, AOC recently took contractual action costing over $90,000 to  redesign the mechanical system for the Jefferson Building connection to  the Library of Congress tunnel to meet the Fire Marshal Division’s fire  safety requirements. According to the Chief Fire Marshal, he was not given  the opportunity to participate in the planning process before the design of  the Jefferson Building connection was substantially completed. In  addition, several fire-safety-related contract modifications and proposed  change orders for additional work now total over $3.5 million. With better  coordination between the CVC project team and the Fire Marshal Division,  the need for some of this work might have been avoided or identified  sooner, and had this work been identified during the original competition,  the price would have been subject to competitive pressures that might  have resulted in lower costs. Because of the fire protection system’s  increasing costs, disagreements within the CVC team and between the  team and the Fire Marshal Division over fire safety requirements,  problems in scheduling fire safety activities, and other related issues, we  suggested that AOC take appropriate steps to address the coordination of  fire protection activities related to the CVC project. AOC agreed and has  taken action. For example, starting this week, AOC’s Fire Marshal Division  agreed to have a staff member work at the CVC site 2 days a week, and  AOC CVC staff recently agreed to provide the necessary documentation to  the Fire Marshal Division before its inspections or observations were  needed.
Second, as we indicated earlier in our testimony, we are concerned about  the integration of planning, scheduling, and budgeting for CVC  construction and operations. While the CVC project team has been  overseeing CVC construction, other AOC staff have been assisting the  operations planning contractor in planning and budgeting for CVC  operations. Close coordination between the two groups will be especially  important in the next few months, when decisions will likely have to be  made on how to use the $7.8 million remaining from the $10.6 million that  Congress made available to the CVC project for either operations or  construction. The Architect of the Capitol agreed to give this issue priority  attention.
Finally, we are concerned that AOC may incur additional costs for interim  measures, such as temporary walls that it may have to construct to open  CVC to the public in September 2006. Such interim measures may be  needed to make the project safe for visitors if some other construction  work has not been completed. For example, AOC may have to do  additional work to ensure adequate fire protection for CVC, since the  House and Senate expansion spaces are not scheduled to be done until  March 2007. In addition, AOC may have to accelerate some work to have it  completed by September 15, 2006. While it is not necessarily unusual to  use a facility for its intended purpose before all construction work is  complete, we believe that it will be important for Congress to know what  additional costs AOC expects to incur to open CVC by September 15, 2006,  so that Congress can weigh the costs and benefits of opening the facility  then rather than at a later date, such as March 2007, when AOC plans to  complete the House and Senate expansion spaces.
section_title: Recommendations for Executive Action
paragraphs: To ensure that (1) Congress has sufficient information for deciding when  to open CVC to the public and (2) planning and budgeting for CVC  construction and operations are appropriately integrated, we recommend  that the Architect of the Capitol take the following two actions:  In consultation with other appropriate congressional organizations,  provide Congress with an estimate of the additional costs that it expects  will be incurred to open CVC to the public by September 15, 2006, rather  than later, such as after the completion of the House and Senate expansion  spaces.
Promptly designate who is responsible for integrating planning and  budgeting for CVC construction and operations and give this activity  priority attention.
section_title: Agency Comments
paragraphs: AOC agreed to take the actions we are recommending. According to AOC,  information on the estimated costs of the additional work necessary to  open CVC to the public in September 2006 may not be available until this  fall. In addition, AOC said that the recent re-engagement of the contractor  assisting AOC in planning for CVC operations and the hiring of an  executive director for CVC, which AOC plans to do in the next few  months, are critical steps for integrating CVC construction and operations.
Mr. Chairman, this completes our prepared statement. We would be happy  to answer any questions that you or other Subcommittee Members 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, 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, May 2005-July 2005
paragraphs: Scheduled for completion between  5/17/05 and 6/14/05  Wall Stone Area 3 Base Support  Wall Stone Layout Area 4  Saw Cut Road at 1st Street  Wall Stone Area 4 Base Support  Wall Stone Layout Area 5  Masonry Wall Lower Level East  Wall Stone Area 5 Base Support  Wall Stone Layout Area 6  Drill/Set Soldier Piles at 1st Street  Wall Stone Area 6 Base Support  Scheduled for completion between  6/15/05 and 7/31/05  Wall Stone Layout Area 8  Wall Stone Layout Area 9  Wall Stone Area 9 Base Support  Wall Stone Installation Area 2  Wall Stone Installation Area 3  Wall Stone Installation Area 4  Wall Stone Area 9 Base  Concrete Working Slab 1st Street  Waterproof Working Slab Station 0-1  Utility Tunnel  7/29/05 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.