Capitol Visitor Center: Results of Risk-based Analysis of Schedule and Cost
Released: 2006-02-15T00:00:00

Letter

AOC Has Moved Construction Forward, Revised the Project’s Schedule, and Postponed Opening Dates

AOC and the CVC team have continued to refine the project’s schedule since the November hearing and have made substantive progress in addressing the issues that we and the Subcommittee have raised, particularly concerning the base project’s schedule. For example, the CVC team reviewed the sequence and duration of the activities scheduled for interior stonework, finish work, and work associated with the base project’s fire protection system, including the acceptance testing to be done by AOC’s Fire Marshal Division. To reflect the results of its review, the team revised the project’s December 2005 and January 2006 schedules, and in collaboration with the team that is planning for CVC operations, enhanced the manner in which the operations activities are incorporated into the project’s master schedule. AOC and its contractors’ staff who are involved in planning for CVC operations agree that the January 2006 schedule identifies the related construction and operations activities. The CVC team has not yet fully reassessed the schedule for the expansion spaces and has not yet reached agreement with the Chief Fire Marshal on the requirements for acceptance testing of those spaces. Finally, the CVC team has continued to meet weekly to identify risks facing the project and to discuss mitigation strategies and actions. As of February 1, 2006, the team had identified 62 risks and developed mitigation strategies for all but 1, which had just been identified. The plans vary in their level of detail and stage of implementation.

According to AOC’s December 2005 and January 2006 schedules, the CVC base project will be ready to open to the public with a temporary certificate of occupancy on February 13, 2007, and the House and Senate expansion spaces will be ready on April 24, 2007. To allow for possible delays and start-up time for operations, AOC has proposed an April 2007 opening date for the base project and a May 2007 occupancy date for the expansion spaces. By the April opening date for the base project, AOC believes, all construction work in the CVC and East Front will be completed, but the CVC’s occupancy at any one time will be temporarily limited to 3,500, compared with about 4,200, the normal anticipated occupancy level. This temporary limit will be necessary because the “horizontal exits,” or passages, through the expansion spaces, which the life safety code requires for exiting the base CVC project, will not be available until later. These horizontal exits cannot be used until the fire alarm system in the expansion spaces has been fully tested and accepted—work that is not slated to be completed until after the base CVC is scheduled to open. Some additional work will likely be required to provide temporary emergency exit routes from the CVC, but the CVC team does not believe that this work or its costs should be substantial.

Mr. Chairman, a brief explanation of AOC’s rationale for proposing a CVC opening with a temporary cap on visitor occupancy may be helpful at this point. The current project schedule calls for completing the construction of both the CVC and the expansion spaces before December 31, 2006, but would delay the start of acceptance testing the portions of the fire alarm system in the expansion spaces until such testing for the base CVC project is completed in February 2007. AOC is planning this approach because it believes that starting the acceptance testing for the expansion spaces earlier would prolong the completion of the acceptance testing in the base project and thereby delay the base project’s opening to the public. More specifically, the fire protection devices for the atriums, which are a part of the horizontal exits ultimately required by code for full occupancy of the base project, would undergo acceptance testing with the expansion spaces, rather than with the base CVC project. To accommodate this change, AOC shifted the finish work in the atriums from the base CVC schedule to the expansion space schedule, and is planning to conduct the acceptance testing for the atriums and the expansion spaces at the same time, after the acceptance testing for the base CVC project is done. Until the acceptance testing for the expansion spaces has been completed, AOC’s Chief Fire Marshal has said that the expansion spaces, including the exits through the atriums, cannot be used as emergency exit routes, and therefore AOC must take measures to provide temporary emergency exit routes from the base CVC project and reduce the number of occupants who can be in the base project until the exit routes are available.

Our Analysis Indicates Later Opening Dates in Light of Problems, Challenges, Risks, and Uncertainties

Our work to date in monitoring the CVC project and the results of our recently completed risk assessment of the project’s schedule point to later opening dates than the schedule indicates. Although the schedule for the base project goes a long way toward responding to our concerns about the amount of time previously provided for a number of activities and extends their duration, CVC team managers and members we interviewed believe that certain work will take longer to complete than the revised schedule allows. For example, they believe that interior stonework and finish work for the base project and the East Front are likely to take longer. According to our risk analysis, which reflects the CVC team’s input and assumes that AOC will successfully address the challenges it faces, the CVC is more likely to be ready for opening with a temporary certificate of occupancy between late April and mid-May 2007 than in February, as indicated in AOC’s current schedule. AOC is now proposing an April 2007 opening date to provide time for possible construction slippages and operations preparation. The additional time AOC says is necessary for operations preparation after construction completion would mean that the CVC would be ready for opening with a temporary cap on visitor occupancy by about the end of May 2007, according to our analysis. Similarly, our analysis suggests that the House and Senate expansion spaces are more likely to be ready in mid August or early September 2007 than in April or May 2007. We believe the later time frames are more likely because (1) AOC has scheduled the acceptance testing of the expansion spaces after the acceptance testing of the base project and, according to our work, the base project testing will take longer than scheduled and (2) AOC’s Chief Fire Marshal believes that the acceptance testing of the expansion spaces will take longer than scheduled.

We have discussed the results of our analysis with AOC, and it continues to believe that it will be able to meet its April and May 2007 time frames for the CVC and the expansion spaces, respectively. Furthermore, AOC said that it and the CVC team will continuously review the schedule to identify opportunities for improvement. For example, AOC pointed out that it may be able to have the acceptance testing of the expansion spaces done in segments so that Members and staff will not have to wait for the entire facility to be tested before they can occupy their space. AOC also believes it may be able to revise the scheduling of some East Front mechanical work to save time. We agree that AOC should continuously look for ways to improve the schedule and that improvements may be possible. However, we also believe that AOC will be challenged to meet even the later opening dates we have identified given the problems, challenges, risks, and uncertainties the project faces. A discussion of these follows: Delivery of stone and pace of stone installation remain critical. Although the CVC team has made progress in installing interior wall and floor stone, work on the wall stone has fallen behind schedule in several areas, and the project still faces significant challenges, risks, and uncertainties in this area. These include whether sufficient quantities of the appropriate wall stone will be received in time and whether the pace of installation will be sufficient to complete this work as scheduled. According to information provided by the sequence 2 contractor on February 10, the wall stone supplier still had a 20-truckload backlog and was not shipping wall stone at the scheduled rate, resulting in a delivery shortfall of about 6,000 cubic feet. According to AOC’s construction management contractor, stone supply is not affecting interior wall stone installation because a large quantity of stone is currently on site; however, the contractor is concerned about the ability of the stone supplier to meet current and future requirements that include stone for the East Front, adequate stone to maintain productivity, and the 20-truckload backlog. The pace of installation is also an issue. The sequence 2 contractor has recently increased the number of stone masons working on the project and has begun meeting the installation targets in its work plan. However, if the wall stone installation targets are not achieved, whether because the masons are less productive than planned or work spaces are not ready for stonework to begin, completion delays are likely. The sequence 2 contractor has already encountered work spaces in the service level, the orientation lobby, and the East Front that were not available for stonework because concrete was out of tolerance or masonry walls were not ready for wall stone to be hung. Finally, the sequence 2 contractor still needs to install about 120,000 square feet of floor stone in the CVC and could have problems meeting the scheduled completion dates if not enough masons are available, the amount of floor space available is insufficient because other finish work is not done, or other trades are working in the areas where floor stone is to be laid. As of February 10, AOC had not received a floor stone installation plan requested from the sequence 2 contractor, but the sequence 2 contractor said that it intends to finish the plan soon.

Stacking of trades could delay completion. Continued delays, particularly in wall stone installation, could adversely affect the sequence 2 contractor’s ability to accomplish all of the required finish work on schedule. The sequence 2 contractor has been making progress relative to its current plan for installing wall stone in the auditorium and the orientation lobby, but according to the current project schedule, wall stone installation is delayed in other areas, such as the East Front, the great hall, and the orientation theaters’ exterior walls. Furthermore, as of February 10, although the contractor had completed 10 of the 13 milestones relating to wall stone that are being tracked for the Subcommittee, none of the 10 was completed by the date set in the September 2005 baseline schedule, and only 4 were completed by the date set in the November 2005 schedule. (See app. I.) If delays continue, a stacking of trades such as we described at the Subcommittee’s November hearing could hold up finish work, such as drywall or ceiling installation, electrical and plumbing work, plastering, or floor stone installation. Such a situation could also increase the risk of accidents and injuries. The CVC team has also identified “trade stacking” as a high risk. The sequence 2 contractor acknowledges the risk, but said that it has structured its schedule to avoid the risk and plans to monitor progress closely to avoid problems. We acknowledge that these steps can be helpful; however, the more the wall stone schedule slips, the greater is the likelihood of “trade stacking,” since more and more work will have to be done in less time to meet the schedule. AOC’s construction management contractor agrees that this is a serious potential problem.

Complex building systems remain a significant risk. The CVC will contain complex building systems, including systems for heating, air conditioning, and ventilation; fire protection; and security. These systems not only have to perform well individually, but their operation has to be integrated. If the CVC team encounters any significant problems with their functioning, either individually or together, during commissioning or testing, the project could be seriously delayed. AOC and the CVC team are aware of these risks and have been taking steps to mitigate them as part of their risk management process. Yet despite these steps, a significant problem could arise during commissioning or testing, and it is important that the team be prepared for such an event.

Building design continues to evolve. The CVC has undergone a number of design changes, and design changes are continuing for a number of building components, such as the exhibit gallery and the fire protection and security systems. Some of these changes have resulted in delays, such as in the exhibit gallery and in the East Front. In addition, designs or shop drawings for some elements of the project, such as aspects of the facility’s fire protection systems, have not yet been fully approved and are subject to change. At this stage of the project’s construction, one might expect the number of design changes to dwindle. However, this is not the case. For example, more than 20 design changes or clarifications were issued last month. Additional design changes are being considered, and the potential exists for such changes to further adversely affect the schedule.

Multiple critical activity paths complicate schedule management. In its report on the project’s January 2006 schedule, AOC’s construction management contractor identified 18 critical activity paths—4 more than in the contractor’s report on the project’s October 2005 schedule—that are crucial to meeting the scheduled completion date. In addition, the construction management contractor said that several noncritical activities have fallen behind schedule since November 2005, and a number of these have moved closer to becoming critical to the project’s completion. As we have previously said, having a large number of critical and near-critical activities complicates project management and increases the risk of missing completion dates. We believe that the CVC team will be particularly challenged to manage all of these areas concurrently and to deal effectively with problems that could arise within these areas, especially if multiple problems arise at the same time.

Estimated Project Costs Exceed Funding Provided as of February 2006

We currently estimate that the total cost to complete the entire CVC project is about $555 million without an allowance for risks and uncertainties and could be as much as about $584 million with such an allowance. As table 1 indicates, our current estimate without an allowance for risks and uncertainties is about $12 million higher than the estimate without such an allowance that we presented at the Subcommittee’s November 16, 2005, hearing. This $12 million increase is largely attributable to additional delay costs estimated by AOC’s construction management contractor and actual and anticipated changes in the design and scope of the project.

In particular, changes in the project’s fire protection system, which we discussed at the Subcommittee’s October 18, 2005, CVC hearing, are now expected to cost more than previously estimated. Specifically, the system’s acceptance testing is expected to be more extensive and to take place later than originally anticipated, and additional temporary construction may be required to ensure fire safety if the CVC is opened to the public before the Senate and House expansion spaces are completed. This additional construction would involve designing and installing—and then removing— temporary walls and perhaps taking other fire protection measures to create emergency exits from the CVC. As discussed in more detail earlier in this statement, the need for temporary construction may be reduced or eliminated if the fire safety acceptance testing of the expansion spaces and of the CVC can be performed concurrently, rather than over two separate periods, as would be likely if the CVC is opened to the public before the expansion spaces are completed. We discussed this issue during the Subcommittee’s July 14, 2005, CVC hearing and recommended then that AOC estimate the cost of these temporary measures so that Congress could weigh the costs and benefits of opening the CVC before the expansion spaces are completed. AOC has agreed to provide this estimate to Congress when it has more information on the status of construction progress on the CVC and expansion spaces and the specific steps that will be necessary to provide adequate temporary exit routes.

We now estimate that the total cost to complete the entire project with an allowance for risks and uncertainties could be as much as $584 million, or about $25 million more than we estimated in November 2005. This increase reflects the potential for the project to incur additional costs if difficulties arise in commissioning and testing its complex and sophisticated fire protection, ventilation, and security systems; significant problems with the building’s design are identified and need to be corrected during construction; delays cost more than anticipated; and significant discretionary changes in the project’s design and scope are requested.

To date, about $528 million has been provided for CVC construction. This amount does not include about $7.7 million that was made available for either CVC construction or operations. According to AOC, it expects to use about $2 million of this amount for construction. To obtain the additional funding that it expected to need to complete the project’s construction, AOC, in December 2005, requested $20.6 million as part of its budget request for fiscal year 2007. This request was based, in part, on discussions with us and took into account our November 16, 2005, estimate of the cost to complete the project’s construction without an allowance for risks and uncertainties and funding from existing appropriations. The request also reflected updates to our November estimate through mid-December 2005. At that time, the $20.6 million request for additional appropriations, coupled with the additional funds that AOC planned to use from existing appropriations, would have been sufficient to cover the estimated cost to complete construction without an allowance for risks and uncertainties.

Our work since mid-December 2005 indicates that AOC will need about $5 million more, or about $25.6 million in additional funds, to complete construction without an allowance for risks and uncertainties. This increase reflects the number and magnitude of potential change orders that CVC team members and we believe are likely and additional costs associated with extending the project’s expected completion date beyond March 31, 2007, the date contemplated in our last cost estimate.

AOC generally agrees with our estimate, particularly with respect to having sufficient contingency funds available for necessary design or scope changes or for additional delay-related costs.

Estimated Construction Costs for Library of Congress Tunnel Close to, but under, Limit

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 February 14, 2006, AOC estimated that the tunnel’s construction would cost about $9.8 million, and AOC’s total obligations for the Library of Congress tunnel construction work totaled about $8.7 million. AOC’s remaining estimated costs are for potential changes.

On February 13, 2006, AOC awarded a contract for the work to connect the tunnel to the Jefferson Building. This work is costing more than AOC had estimated—a possibility we raised in our November 16 testimony before the Subcommittee. Because this work involves creating an opening in the building’s foundation and changing the existing structure, we believe that AOC is likely to encounter unforeseen conditions that could further increase its costs. Therefore, we included additional contingency funds for this work in our $555 million estimate of the cost to complete the CVC project’s construction. Both AOC and we plan to monitor the remaining tunnel and Jefferson Building construction work closely to ensure that the statutory spending limit is not exceeded.

Mr. Chairman, in conclusion, AOC has responded to many of the schedule- related concerns we have identified, but its planned opening date for the CVC is still somewhat optimistic. For AOC to meet even our estimated opening time frame, we believe that it is critically important for the CVC team to do the following: Aggressively take all necessary and appropriate actions to install interior wall and floor stone as expeditiously as possible, including seeing that sufficient quantities of masons, stone, and work space are available when needed to meet the wall stonework plan and the forthcoming floor stone installation plan.

Closely monitor construction to identify potential “trade stacking” and promptly take steps to prevent it or effectively address it should it occur.

Reassess its risk mitigation plans to ensure that the team takes the steps necessary to prevent a major building system problem during commissioning or testing and has measures in place to deal quickly with problems should they arise.

Carefully consider the necessity of proposed scope and design changes and attempt to minimize the impact of necessary changes on the project’s schedule and cost.

Reassess the capacity of the CVC team (AOC and its contractors) to effectively manage and coordinate the schedule and work from this point forward, particularly with respect to the large number of activities that are currently critical, or close to being critical, to the project’s timely completion.

Identify and consider the pros and cons (including the estimated costs) of opening the CVC and expansion spaces at about the same time and provide this information to Congress.

We have discussed these actions with AOC, and it generally agrees with them. It pointed out that it would be in a better position to assess the pros and cons of opening the CVC and the expansion spaces concurrently when construction is further along and it becomes clearer when the work will actually be done. This appears reasonable to us.

We would be pleased to answer any questions that you or Members of the Subcommittee may have.

Contacts and Acknowledgments

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, John Craig, Maria Edelstein, Elizabeth Eisenstadt, Brett Fallavollita, Jeanette Franzel, Jackie Hamilton, Bradley James, and Scott Riback.

Appendix I: Capitol Visitor Center Critical Construction Milestones November 16, 2005- February 15, 2006

Wall Stone Area 2 base Wall Stone Area 3 base Wall Stone Area 1 Pedestals Wall Stone Area 2 Pedestals Install Walls Sta. 1+00- 2+00 Install Roof Sta. 1+00- 2+00 Install Roof Sta. 0+00-1+00 12/07/05 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.