The federal government is the largest real property owner in the United States with a vast inventory costing billions of dollars annually to operate and maintain. Federally owned buildings include courthouses, offices, warehouses, hospitals, housing, data centers, and laboratories. GSA acts as the federal government’s landlord and is responsible for designing, constructing, and managing federal buildings that are occupied by federal agencies and the judiciary. Each year, GSA spends hundreds of millions of dollars on major construction projects, which include both new construction and repairs and alterations (R&A) to existing federal buildings. R&A projects can range from building system replacements and security upgrades to full building renovations. GSA manages its major construction projects through its central office in Washington, D.C., and its 11 regional offices. GSA’s central office establishes programming, design, and construction standards and guidance, and provides technical assistance, as needed, to the regional offices that are responsible for project implementation. To obtain authorization for projects above a defined threshold, GSA must submit to certain congressional committees a project prospectus that, among other items, describes the project and provides its estimated cost. Upon approving a project’s prospectus, Congress provides funding, either through an appropriation from the Federal Buildings Fund or appropriating funding to an agency. GSA posts approved project prospectuses on GSA’s public website. In general, GSA develops and implements projects through a sequential process that includes the following steps: Identification. Federal agencies submit a facility or space need to GSA; GSA prepares a feasibility analysis to determine the best way to fulfill the need, which could be through new construction, an R&A project, or a lease. Some R&A projects—limited to building system replacements—may be by identified by GSA based on building age and condition, and not originate from agencies’ space needs. Initiation. GSA assigns a project manager to define the project’s scope, develop cost and schedule estimates, and draft a project management plan (PMP). If a prospectus has not been previously submitted, GSA submits a prospectus to certain congressional committees for authorization. Planning. GSA’s project manager updates the PMP; the project’s baseline scope, schedule, and budget are finalized. Execution. For authorized and funded projects, GSA awards contracts for design and construction; the project’s baseline scope, schedule, and budget are revised, as needed, based on awarded contracts; GSA’s project manager monitors design and construction progress and manages changes to the project’s scope, cost, or schedule. Close-out. GSA’s project manager completes construction close-out activities and turns the project over for tenants’ use. GSA project managers perform key steps in the process that include overseeing contractors, monitoring and reporting on the progress of projects, managing changes to the project, and coordinating with tenant agencies. Additionally, GSA project managers are responsible for ensuring that “commissioning” is performed during the project. “Commissioning” generally requires that an independent commissioning agent oversee the construction contractor’s testing of installed building components to determine if they are performing as designed. According to GSA data, GSA substantially completed 36 major construction projects in the 5-year period from fiscal year 2014 through fiscal year 2018. The total cost of those 36 projects was approximately $3.2 billion. Listed below are some characteristics of those projects. Cost: Project costs ranged between $21 million and $343 million, with an average cost of about $89.3 million. Schedule: Project durations ranged between about 12 months and 79 months, with an average of about 43 months. Project Type: R&A projects made up the majority of projects (64 percent), with an average cost of about $74.2 million and an average duration of about 47 months. New construction projects accounted for 36 percent, with an average cost of about $116 million and an average duration of about 35 months. On average, R&A projects cost about $42 million less than new construction projects but took about 13 months longer to complete. See figure 1 for summary information on the cost and duration of these projects, by project type. Location: The National Capital Region (GSA Region 11) had the most projects with nine (25 percent), and all but one of the 11 GSA Regions had at least one project. Project Delivery Method: GSA utilized four delivery methods for 35 of the 36 projects in our 5-year time frame. Construction Manager as Constructor, whereby GSA contracts separately with a design firm and a construction contractor. The construction contractor is involved early-on to consult on the design as it is being developed; upon the design’s completion, GSA negotiates with the construction contractor on a price to undertake the construction. GSA used this method for 12 of the 36 projects (average cost of about $99.8 million). Design-Bid-Build, whereby GSA contracts with a design firm to develop a project’s design. After the design is completed, GSA contracts separately with a construction contractor. GSA used this method for 11 of the 36 projects (average cost of about $81.3 million). Design/Build-Bridging, whereby GSA contracts with a construction contractor to finish a partially completed design— termed a “bridging design”—begun by a separately contracted design firm. GSA used this method for 8 of the 36 projects (average cost of about $77.4 million). Design/Build, whereby GSA contracts with a contractor to provide both design and construction services under a single contract. GSA used this method for 4 of the 36 projects (average cost of about $120.4 million). See appendix I for more detailed information on each of the 36 projects. According to GSA officials and GSA’s internal construction-cost study prepared for GSA by the National Institute of Building Sciences (NIBS) in March 2016, several factors can result in higher costs for GSA’s construction projects compared to other similar private sector construction projects. For example, cost models in the 2016 NIBS study indicate that R&A projects cost roughly 15 to 25 percent more than R&A projects for a comparable Class A private sector building. Although the study was based on construction of R&A projects, both GSA and NIBS officials agreed that these same factors can contribute to similar cost premiums for GSA’s new construction projects compared to private sector projects. However, the NIBS staff who conducted the study told us that GSA’s more recent adoption of performance-based design standards, as compared to previously prescriptive standards, likely lowers the federal construction cost’s premium relative to private sector projects but some premium still exists. The performance-based design standards, for example, provide contractors greater latitude in selecting construction materials, which can have cost implications. According to the GSA’s internal construction-cost study, the factors that contribute to higher estimated costs for GSA construction projects when compared to similar private sector projects primarily include design and procurement requirements specific to federal projects that private sector counterparts may not have to comply with. Those requirements are specified in GSA’s design standards, as well as federal statutes and guidelines. Table 1 provides illustrative examples of factors cited by the study and GSA officials. In addition to the factors identified in the GSA’s internal construction-cost study, GSA officials said that meeting other statutory requirements, for example, the Buy American Act and the Federal Information Security Modernization Act of 2014 (FISMA), can contribute to higher costs for federal projects compared to private sector projects. GSA officials said that the cost of making information technology systems FISMA-compliant leads to federal projects costing more than private sector projects. FISMA-compliant systems, among other uses, are needed to enable the sharing of design and construction documents among GSA and contractor staff and the installation of control systems that are integral to the operation of building systems. GSA uses three principal tools—(1) project management plans (PMP), (2) peer reviews, and (3) “earned value management” (EVM)—to monitor its construction projects, including cost and schedule performance. The PMP is the overarching tool GSA and its contractors use to guide projects’ implementation. According to GSA policy, a PMP primarily defines the parameters of a project, to include scope, schedule, cost, implementation strategy, and risks, among other items. GSA policy also indicates that the PMP—which is an industry recognized tool—is to be updated during a project’s execution and reflect notable changes affecting the project’s scope, cost, and schedule. The PMP is to also establish stakeholder roles and responsibilities, project goals, and tenant expectations. In all of the five case-study projects we reviewed, we found the associated PMPs generally: outlined the project’s scope, cost, and schedule information; identified GSA’s project stakeholders—such as GSA’s project manager and GSA’s contracting officer—and representatives for the tenant agencies that the project will benefit; and identified potential risks posed to the delivery of the project. Four of the five PMPs included a “revision history” table that demonstrated that GSA generally used and updated the PMPs over the course of the projects’ execution. The fifth project’s PMP was developed prior to GSA’s 2012 update to its PMP standard format, which then required the use of a revision history log. More information pertaining to our case-study projects, including some information from the GSA PMPs we reviewed can be found in appendix II. The second tool GSA utilizes to monitor its construction projects is peer reviews. GSA policy requires that external peer reviews be conducted on projects with a construction cost over $25 million. Per GSA guidance, these on-site peer reviews typically occur twice during construction— when projects are about 15 percent and 60 percent complete. External peers—typically, construction industry experts who were not involved with the project—assess whether a project is progressing as planned and identify for GSA managers and project stakeholders any issues they observe that may affect its timely completion or cost. In general, peers also assess stakeholders’ working relationships and make recommendations for improvement or identify opportunities for greater consistency in the performance of GSA’s construction program or greater efficiency among project stakeholders. We found that four of our case-study projects utilized external peer reviews during construction, as required. For example, one peer review report included the following observations: The project team showed great progress toward completing the project on time, and potentially ahead of schedule; the implementation of the recommendations made during the initial external peer review resolved potential unknowns and cost issues that would have put the project at high financial risk; the safety record was exceptional; tenants were better informed; and security issues had been streamlined, allowing the contractor to staff the project in a timely manner. Most of the GSA’s project managers and construction contractors we interviewed for these four case study projects said they generally believed the external peer reviews were fair and added value. Our fifth case-study project did not utilize an external peer review because it was not required at the time GSA awarded the construction contract. The third tool GSA uses is EVM, which is an industry-recognized project management tool and is required for major federal acquisitions, such as construction projects, to help project managers monitor cost and schedule during project execution. According to the Office of Management and Budget’s (OMB) guidance and GAO’s cost-estimating guide, EVM measures the value of work accomplished in a given period and compares it with the planned value of work scheduled for that period and the actual cost of work accomplished in that period. The differences between the estimated and actual costs and schedule are used to determine, for example, whether less or more work had been completed than had been planned. By tracking these differences, EVM can provide warning signs of impending cost overruns or schedule delays and provide estimates of anticipated costs at completion. Consistent with our previous findings related to GSA’s use of EVM, we found that GSA continues to use EVM to assess its construction project delivery performance on two dimensions—on-schedule and on-budget: On schedule: GSA considers a construction project to be on- schedule if its construction duration is within 10 percent of the planned duration, from the construction start date to the substantial completion date (i.e., GSA considers a project to be substantially complete on the date the project space is suitable for tenant occupancy; however, the project’s cost could change prior to the actual contract close-out). On budget: GSA considers a construction project to be on budget if its actual cost is within the planned construction cost (as measured by the construction contract’s value at award or the contract value as adjusted based on post-award contract modifications) and the additional 7 to 10 percent construction contingency. According to GSA guidance, a project’s construction contingency is intended to cover unforeseen conditions and design deficiencies; it does not apply to additional scope. According to GSA officials, GSA’s central office uses EVM to conduct monthly performance reviews of GSA’s major construction projects. At these reviews, GSA’s central office considers certain proposed project changes forwarded for approval by GSA regional offices. We have previously reported that federal construction projects typically involve some degree of change as the project progresses and that contract changes, made through contract modifications, can occur for a variety of reasons, including design errors and unforeseen site conditions. In addition, GSA officials said that funding delays, tenant-caused delays, and site acquisition issues can also be factors that cause project delays. According to GSA guidance, while GSA regional offices have some latitude to make contract changes, the regional offices and their project managers must get central office approval if a proposed change is anticipated to exceed the approved contract cost, construction contingency, or schedule contingency. If such a change is approved, GSA will then revise—commonly referred to as “rebaseline”—either the construction contract cost, the planned schedule duration, or both. GSA will then use that new value to measure and report on the project’s budget and schedule performance. According to GSA officials and summary data on its rebaselining decisions, the majority of GSA’s major construction projects within our 5- year scope were rebaselined, within its policy, to account for changes to projects’ costs and schedules. Specifically, GSA officials told us they rebaselined 25 of the 36 projects (about 70 percent). Of those projects, 18 (50 percent) were driven, at least in part, by tenant-requested changes, which GSA officials said were the most prevalent reasons for rebaselining a project. According to GSA policy, if a tenant agency requests a project change that falls outside the original scope, the project manager is to ensure that the tenant agency provides all the associated design-related requirements and funding necessary to perform this additional scope. For example, for one of our case study projects, the tenant provided $17.7 million in additional funding as part of the final phase of its headquarters building’s multi-year modernization. The tenant’s funds paid for, among other things, the tenant-requested change to convert part of the multi-story library into offices to increase the building’s space efficiency and allow more staff to move into the building. Based on our review of GSA’s internal data, we found that four of our five case-study projects were rebaselined; GSA rebaselined the cost of two projects, the schedule of one project, and both the cost and schedule of one project. For example, concerning costs, GSA rebaselined one project to account for a $2.7 million increase to the contract—initially awarded for $21.8 million—upon realizing that the tenant’s plan to increase the number of occupants in the building required another stairwell be added for fire safety purposes. With regard to schedule, GSA rebaselined one project, as previously discussed, to address a tenant-requested change to convert parts of the library into offices; this change extended the schedule by about 1 year. Given GSA’s methodology that allows for rebaselining and GSA’s cost and schedule contingencies, GSA’s EVM performance data showed that all five case-study projects were completed on budget and on schedule, if not early. See appendix II for a summary of the cost and schedule performance of our five case-study projects. Federal agencies should report pertinent and reliable information to the Congress, so that Congress can adequately assess agencies’ progress in meeting established performance goals, ensure accountability for results, and understand how individual programs and activities fit within a broader portfolio of federal efforts to aid in federal funding decisions. GSA has publicly reported high-level information on its construction project performance in its Annual Performance Reports, which GSA provides to Congress and publishes on GSA’s website. For example, GSA’s fiscal year 2014 through 2018 Annual Performance Reports show that GSA met or exceeded its stated performance targets for project delivery (see fig. 2). Over this period (fiscal year 2014 through 2018), GSA took steps to improve the content and usefulness of its annual reports. For example, in fiscal year 2014, GSA included R&A projects in its performance measure to fully encompass all GSA capital construction projects. Prior to fiscal year 2014, GSA’s performance measure was calculated solely on the performance of GSA’s new construction projects. Also, starting in fiscal year 2017, GSA included additional summary-level information in its reports that identified the total number of projects and total contract value of both completed and ongoing projects that fiscal year. In fiscal year 2018, as shown in figure 2, GSA again revised its performance measure to reflect both the budget and schedule performance of projects. Prior to fiscal year 2018, GSA’s performance measure reflected only projects’ schedule performance. Further, in its fiscal year 2018 report, GSA listed the specific costs of its seven largest projects completed on-schedule and on-budget of the 24 projects completed that year. While GSA has taken some actions to improve the usefulness of its external reporting, neither GSA’s Annual Performance Reports nor its public prospectus website provide information on the extent to which projects have been rebaselined or the final costs of projects. Standards for Internal Control in the Federal Government state that agencies should provide necessary quality information to external stakeholders so that the external parties can help the agency achieve its mission and address related risks. As noted above, GSA regularly rebaselines projects, within policy, to account for changes to projects that affect construction contract costs and schedules due to a variety of reasons. GSA officials told us that they manage total project costs to be within the original prospectus estimate provided to Congress adjusted, as applicable, by funds it receives for tenant-requested changes; the officials do not believe that it is critical to report final costs or if projects have been rebaselined. However, we have found that simply measuring and reporting performance based on the most recent baseline may obscure how projects have performed over their entire construction time frame. Being more transparent about which projects or how many projects were rebaselined, as well as reporting cost and schedule growth from original baselines, can provide stakeholders with a more accurate view of project performance and enhance accountability. Reporting on such cost information, for example, would allow GSA to communicate to Congress actual construction costs at a project’s completion that may be different than the estimated costs on the prospectus approved by Congress at the project’s initiation which likely did not account for items to be funded by tenants. Without that information, it is not possible for Congress to know how projects performed against approved estimated costs and whether final project costs are consistently above, below, or meeting estimated costs. Having this information could benefit Congress in its oversight role and in making future funding decisions. Key Challenges Identified during Commissioning of Case Study Projects Issues with State-of-the-Art Building Systems State-of-the-art building systems and the automation systems that monitor and control them were not optimally operating for at least two of our case-study projects at substantial completion. For example, stakeholders for one project reported that it was very challenging to get all the integrated systems to work properly, in part, because the design was very technologically advanced. One GSA official said the biggest challenge was coordinating the operations sequence of the various building systems to function as the design team intended. As such, it took well over a year after the building was completed to resolve these issues. Limited Capabilities of Building Contractors to Maintain Complex Systems In three of the five case-study projects, stakeholders said maintenance service contractors were either not prepared to assume or had not yet been contracted to provide for the higher technical maintenance and operation responsibilities for all the building systems. For example, one construction contractor said there seemed to be a knowledge gap between the technical capabilities needed to effectively manage the more advanced building systems and the skills possessed by the existing maintenance contractor. A GSA official said that GSA plans to solicit a new contract for the building’s maintenance. agencies, and others. The Guide identifies its primary audience to be: GSA’s project managers, their construction management agents who help GSA manage the project, and the commissioning agent who oversees the commissioning process. The Guide’s secondary audience includes the many other stakeholders in the commissioning process, including tenant agencies. According to the Guide, the commissioning process is intended to assist in preparing maintenance personnel to operate and maintain any newly installed building systems. We found that GSA conducted commissioning largely in alignment with the Guide on our five case-study projects based on our review of project documentation and interviews with GSA’s project managers, facilities managers, and contractors. Further, we identified two key challenges in regard to state-of-the-art building systems’ and building contractors’ capabilities. See sidebar for additional information on the two challenges. While GSA generally conducted commissioning according to its Guide on the five case-study projects we reviewed, we found that the 2005 Guide is outdated. For example, the Guide references dated industry practices and some outdated external guidance, both of which were in existence at the time the Guide was developed. Specifically, it references the 2003 Leadership in Energy and Environmental Design (LEED), Green Building Rating System, Version 2.1; however, the LEED rating system for projects since 2016 was Version 4.0, and Version 4.1 was recently issued in 2019. We also found disconnects between the 2005 Guide and GSA’s current design standards or industry practices. For example: While the Guide states that GSA buildings should be LEED certified and strive for a Silver certification, GSA now requires buildings to achieve a higher certification, LEED Gold. The Guide states that GSA “strongly recommends” that GSA regions—and agencies to which GSA has delegated the operations of federal buildings—recommission buildings every 3 to 5 years. The current LEED standards call for “periodic commissioning requirements, ongoing commissioning tasks, and continuous tasks for critical facilities.” In general, over the past decade, federal statutes, guidance, executive orders, and changes to industry building certifications have moved the federal government and the industry toward more real- time, continuous monitoring and commissioning in cases where advanced building-automation systems, energy information- management systems, and advanced meters (e.g., electrical, water, gas, temperature, and light meters) have been installed. The continuous data provided by these systems can help building owners make real-time adjustments to optimize building operations. However, the Guide does not mention continuous monitoring-based commissioning as a possible option to, or in addition to, recommissioning buildings. Standards for Internal Control in the Federal Government state that management should periodically review policies, procedures, and related control activities for continued relevance and effectiveness in achieving the entity’s objectives or addressing related risks. Those standards also indicate that if there is a significant change in an entity’s process, management should review this process in a timely manner after the change to determine that the control activities are designed and implemented appropriately. Without updated guidance, GSA’s commissioning activities may be limited in their effectiveness in assuring building systems are operating optimally. Two of the five GSA contractors we interviewed expressed frustration that the commissioning process on their projects did not run smoothly. GSA’s external peer reviews for those same two projects also found that the roles of the various stakeholders in the commissioning process were not clear. In addition, three stakeholders on one of those projects said that some stakeholders—especially GSA’s contracted design team—were not fully involved during part of building’s commissioning. In light of our review, GSA is planning to evaluate its commissioning guidance to determine an appropriate update. GSA officials stated that this update may result in revising the existing commissioning guide or replacing it with industry-recognized guidance. However, GSA is still in the process of identifying the scope of the update, including a timeline and resources required to do so. According to OMB guidance, Post Occupancy Evaluations (POE) are tools to evaluate the effectiveness of an agency’s overall capital acquisition process. The primary objectives of a POE include (1) identifying how accurately a project meets its objectives, expected benefits, and strategic goals of the agency and (2) ensuring the continual improvement of an agency’s capital-programming process based on lessons learned. The guidance also states that agencies should have a documented methodology for conducting POEs to ensure that each asset is evaluated consistently. The guidance identifies 17 factors to be considered for evaluation in conducting a POE, such as a project’s performance, compliance with design standards, maintenance issues and building workforce competences, use of advanced building technologies, tenant satisfaction, and cost savings. The guidance also notes that a POE should generally be conducted 12 months after the project has been occupied to allow time for the tenant to evaluate the building’s performance and the delivery of the project. However, the guidance allows agencies some flexibility in the timing of a POE to meet their unique needs if 12 months is not the optimal timing to conduct the evaluation. We found GSA did not conduct any POEs on its completed major construction projects in the 4-year period from 2014 to 2017, as called for by OMB guidance. In fiscal year 2018, GSA contracted with the National Institute of Building Sciences (NIBS) to conduct six POEs and seven additional POEs in fiscal year 2019. GSA officials told us that while they understand the value POEs can provide, they are only able to conduct them when funding is available. They explained that POEs are funded through general program funding (not project funding based on the approved prospectus) within GSA’s Office of Facilities Management, and the available resources to conduct such efforts are limited given other GSA portfolio-wide maintenance and operations priorities. GSA acknowledged that it did not have a specific policy for conducting POEs or selecting completed projects for POEs. Instead, GSA officials said when selecting which buildings should undergo a POE, they ensure there is a representation of different building types (i.e., federal buildings, U.S. courthouses, and land ports of entry) and a mix of new and R&A projects. Because GSA does not have a policy for POEs, NIBS developed a general methodology, which it used for conducting each of those POEs. While GSA tries to ensure there is a mix of projects represented when selecting POEs, it is not clear that its selection factors help ensure GSA makes the best use of its limited resources. To balance OMB’s guidance to agencies that POEs should be conducted on agencies’ completed capital-construction projects, and given its resource constraints, GSA could benefit from a more strategic approach to select the projects for POEs. For example, GSA could use a risk-based approach to select for POEs (e.g., more expensive projects or those that include the integration of advanced, state-of-the-art building systems) to help improve the design and construction of future projects. Such an approach is consistent with the Standards for Internal Control in the Federal Government, which states that management should design control activities to achieve objectives and respond to risks and implement those control activities through policies. Control activities could include establishing criteria for selecting projects for POEs and formalizing it through policy. GSA officials also noted that GSA has conducted multi-building studies— which share some similarities with individual building POEs—that GSA officials broadly consider to be POEs. However, while the studies assessed some of the factors described in OMB guidance (e.g., project performance, maintenance, or advanced technology use), none of them comprehensively reviewed the 36 projects in our 5-year time frame. Accordingly, while these broader studies can provide some useful information to GSA, they are limited in their ability to provide GSA with timely information that meets the POE goal stated in OMB’s guidance: “to evaluate the overall effectiveness of the agency’s capital planning and acquisition process” and to “solicit customer feedback and incorporate that feedback into improvements to the performance and delivery of the capital investment process.” OMB guidance states that agencies should establish mechanisms to use lessons learned from POEs to minimize risks of repeating past mistakes on future projects. Along these lines, NIBS produced a summary report for GSA of the six 2018 POEs it conducted; the report identified design, construction, commissioning, and operational maintenance issues and lessons learned. From these lessons learned, NIBS also offered some recommendations to GSA. For example, NIBS said that GSA should establish a POE review committee to examine GSA’s building designs to highlight and offer solutions to previously identified problems in other buildings and develop and distribute a checklist describing the identified problems to teams that are responsible for designing new buildings. GSA developed an operational guide to synopsize the lessons learned from the NIBS report and expects that future building projects will benefit through its efforts to incorporate these lessons in the design of future projects. Further, NIBS reported that improvements to future projects in response to the issues identified in the six 2018 POE projects would result in reductions to GSA’s future operational costs. However, it is unclear whether the extent of these issues and lessons learned are unique to the 2018 POE projects reviewed by NIBS, or may be occurring across more of GSA’s construction projects. According to NIBS officials, they have observed some recurring project issues among the six POEs conducted in fiscal year 2018 and two of the seven conducted in fiscal year 2019. GSA officials said that they plan to implement lessons learned from these POEs into GSA’s design standards by the end of 2019 and expect to later update these design standards based on future POEs. According to GSA officials, they made NIBS’s individual POE reports and the 2018 POE summary report available to their project managers through a shared folder on GSA’s internal intranet site, which can be accessed by over 120 staff. In addition, one GSA project manager told us that GSA periodically holds knowledge-sharing webinars with its project managers where lessons learned from specific projects may be presented. This official indicated that the knowledge-sharing presentations are heavy on photos and that there is no real prescribed format or requirements for content. Accordingly, the presentations are an informal way for project teams to share project knowledge across GSA’s regions. Further, this official said the lessons-learned presentations from those webinars are also posted for a period of time on GSA’s internal website. However, communicating information via such means provides ad-hoc benefits to only the select individuals who know about the availability of the reports or webinars, and choose to access them. This approach may not effectively expand the broader knowledge base of the organization or best position GSA to, as OMB guidance indicates, ensure continual improvement of an agency’s capital-programming process based on lessons learned. Standards for Internal Control in the Federal Government also indicate that management should communicate necessary quality information to all relevant internal stakeholders to achieve the entity’s objectives. Without a sustained effort to consistently conduct POEs on its completed projects, GSA may miss opportunities to gather valuable tenant feedback and to identify marked successes or notable problems, including any issues that are recurring. Such information could inform future improvements to GSA’s major construction projects and increase tenant satisfaction. Further, such information may also help identify the need to change or update some of GSA’s policies, standards, guidance, or practices, such as those recommended by NIBS or other project stakeholders. However, even if GSA undertakes a more systematic approach to conducting POEs, the benefits of doing so can only fully materialize if GSA takes steps to effectively communicate POE lessons learned to all staff who may be at risk of repeating previously identified project mistakes. GSA annually spends hundreds of millions of dollars on major construction projects to provide tenant agencies with new buildings and modernized spaces that help support agencies’ missions and enable the effective delivery of government services. GSA has improved its public reporting on major construction projects to depict project schedule and budget performance over time. However, GSA’s public reporting does not include information about the extent to which projects’ schedule or costs were rebaselined, or on projects’ final costs, which may differ from GSA’s estimates in the initial prospectuses approved by Congress. Providing the additional information on projects’ schedule and cost rebaselining, and projects’ final costs could further benefit Congress in its oversight role and improve public knowledge about the full costs of major federal construction projects. In addition, given the significant fiscal exposure for the government to maintain these buildings for the long term, having updated guidance on commissioning would enable GSA to better ensure that completed projects are meeting GSA’s design standards. Finally, given resource constraints, identifying and communicating information about when and how POEs are to be conducted could help GSA maximize opportunities to capture lessons learned from completed projects. Knowledge gained from POEs could also ensure tenant agencies are satisfied with completed projects and improve the design and construction of major projects in the future. We are making the following three recommendations to GSA: The Administrator of the GSA should report for Congress and the public— for example, on GSA’s prospectus website—the extent to which completed projects’ construction costs and schedules were rebaselined and final construction costs, to include any additional funding tenant agencies may have provided to GSA for changes. (Recommendation 1) The Administrator of the GSA should update its 2005 Commissioning Guide—or replace it with appropriate industry-recognized standards and guidance—to be consistent with GSA’s current design standards and industry practices. (Recommendation 2) The Administrator of the GSA should identify and communicate—such as through policy, guidance, or other appropriate mechanism—(a) when and how Post Occupancy Evaluations should be conducted for completed projects considering resource constraints and (b) how recommendations or lessons learned from those evaluations are effectively communicated to future project teams. (Recommendation 3) We provided a draft of this report to GSA for review and comment. In written comments, reproduced in appendix III, GSA stated that it partially concurred with recommendation 1 and concurred with recommendations 2 and 3, and provided related comments. In response to recommendation 1, GSA agreed to publish key information that would be helpful, such as GSA’s total construction costs at project completion. However, GSA said it would be misleading to publish information on additional funds provided to GSA from tenant agencies— that lead to contract changes and rebaselining—because these funds come from different appropriations. GSA believes this would not accurately reflect how GSA managed its original budget and schedule. However, we believe that reporting total project costs in a way that clearly identifies both GSA and tenant agency costs is possible, and would not be misleading. We continue to believe that such additional transparency in reporting can benefit Congress in its oversight role and improve public knowledge about the full costs of major federal construction projects. Related to recommendation two that GSA concurred with, the agency noted that it has other commissioning documents and processes outside of its Building Commissioning Guide (Guide) that it uses to ensure building systems are operating optimally. We believe GSA’s use of other documents and processes is a good practice in light of the outdated nature of its current Guide, which serves as a key document in its commissioning process. Nevertheless, we continue to believe that it is important for GSA to update its outdated Guide, or replace it with appropriate industry-recognized standards and guidance to be consistent with GSA’s current design standards and industry practices, as we recommended. Finally, regarding recommendation three, after a discussion with GSA officials during the comment period, we modified the wording of the recommendation to recognize the range of administrative tools (e.g., policy, guidance, or other appropriate mechanism) that GSA could use to identify when and how Post Occupancy Evaluations (POEs) should be conducted and how lessons learned from those evaluations are communicated. As we noted in the report, under its current process, GSA selects the number of facilities evaluated as its annual budget allows based on several selection factors. We continue to believe that GSA could benefit from a more formalized and strategic approach to identifying and communicating when and how POEs should be conducted to make best use of its limited resources. GSA also mentioned its Design Guide for Operational Excellence as a tool to communicate lessons learned from POEs. We agree that such a guide is a good example of how POEs can be used to inform the design of future projects. However, because the guide was based on a limited number of POEs from 2018, we believe that there is more GSA can do to maximize opportunities to communicate lessons learned to future project teams. The draft report had included a fourth recommendation for the Administrator of the GSA to improve the transparency of what is being measured and reported in GSA’s Annual Performance Reports, including noting any key limitations, such as comparing results from year to year if the measure changed. While GSA was reviewing the draft, the agency provided clarifications on the structure and content of its annual reports that mitigated our concerns about the transparency of the information being presented. As a result, we made changes to the body of the report and removed that recommendation from our final report. GSA also provided technical and clarifying comments, which we incorporated, where appropriate. We are sending copies of this report to the appropriate congressional committees and the Administrator of the General Services Administration. In addition, the report is available at no charge on the GAO website at http://www.gao.gov. If you or your staff have any questions about this report, please contact me at (202) 512-2834 or rectanusl@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made key contributions to this report are listed in appendix IV. Appendix I: General Services Administration’s (GSA) Completed Major Construction Projects, Fiscal Years 2014 to 2018 Case study project. This appendix contains information on five General Services Administration (GSA) case-study projects that we included in our review. We judgmentally selected these five major construction projects that were substantially completed between fiscal years 2014 through 2018 representing diversity in project type, geographic area, building-type, and range in cost and scope. Although not generalizable to all GSA major construction projects, information gathered from our case studies provides illustrative examples of GSA’s monitoring and construction efforts. For each case study, GSA provided us with extensive project documentation. We reviewed this documentation to obtain key information such as on contract award amounts and modifications that resulted in changes to the project’s original budget or schedule. The contract modifications we discuss for each project are examples of modifications that added cost or credit to the final contract value or that changed the delivery schedule; however, these modifications do not necessarily include all the modifications to the construction contract. In addition, we interviewed relevant stakeholders, such as GSA project managers, contractors, and facility managers who were involved with the projects. All information in the case study narratives is attributable to GSA based on our review of project documentation and interviews with GSA project officials and stakeholders. The Charles F. Prevedel building was constructed in 1990. For fiscal year 2014, GSA proposed alterations and renovations to the building’s interior and upgrades to the building’s systems such that the Veterans’ Benefits Administration could consolidate into the building. The building was nearly two-thirds vacant at the time, as two federal tenants had moved out of the building. The Veterans’ Benefits Administration had been dispersed in both a nearby federal building and leased space. GSA estimated that the Veterans’ Benefits Administration’s move into the consolidated space would save $3.3 million annually in lease costs. The building is five stories above-grade and two-stories below-grade. The project scope included renovating the building’s central atrium; reconfiguring and increasing the building’s useable space; replacing obsolete heating, ventilation, and air-conditioning (HVAC) systems; and, installing an energy-management control system to automate the HVAC and lighting systems and reduce energy consumption. The HVAC upgrades also included replacing and relocating the outdoor air intakes on the roof in order to meet current security requirements. Minor seismic upgrades were also implemented. The design/build-bridging construction contract was awarded in January 2015 for $21.8 million. The construction contract cost was rebaselined to $25.4 million, in part, to provide an additional stairwell to meet life-safety egress requirements as required by GSA’s design guide. GSA reported that change required GSA’s Public Buildings Commissioner to approve an overall project budget escalation of $2.7 million in June 2015. GSA reported the final construction cost was $25 million (roughly a 14.5 percent increase from the initial construction contract award). Construction of the repair and alteration project started in May 2015 and was substantially completed after a year and a half in November 2016, approximately 2 months earlier than originally projected. Figure 3 shows before and after views of the building’s main lobby and newly installed stairwell. Figure 4 shows views of meeting and training room spaces renovated during the project. Location (GSA Region): Bangor, Maine (Region 1) Original Construction Completion Year: 1967 Project Type: Repair and Alteration Project Delivery Method: Construction Manager as Constructor (CMc) The 3-story Margaret Chase-Smith Federal Building and Courthouse was built in 1967 and had not had a major renovation since its construction. The project was funded by the American Recovery and Reinvestment Act of 2009 (Recovery Act). GSA proposed the project be funded to recapture the vacant space in the building, which in part increased to approximately 33 percent after the U.S. Postal Service vacated. The proposed project would renovate and provide alterations to the building that would expand space for its existing tenants—including the U.S. Courts and the Social Security Administration, among others—and provide space for new tenant agencies. GSA officials reported that in order to get the project started quickly using Recovery Act funds, GSA made the decision to deliver the project under the Construction Manager as Constructor (CMc) delivery method. Under CMc method, the contractor was brought in to advise on the design as it was being completed. In addition to space renovations and alterations, the project repaired and replaced HVAC systems, improved energy efficiency, and provided exterior structural improvements including the replacement of windows. New secure elevators were also added to improve court safety. Other components of the project included repairs and replacements of electrical systems, hazardous materials mitigation, elevator improvements, upgrades to the fire protection system, installing sprinklers, and correcting code deficiencies including bringing the building into compliance with accessibility standards. The CMc construction contract was initially awarded in March 2010 for $33.9 million. In September 2010 (6 months later), two contract modifications totaling roughly $4.6 million were issued to increase the contract price to reflect changes made in completing the design. GSA and the contractor reported that the baseline construction contract—after the design was completed—was $38.5 million. While GSA had provided some funding allowances within the initial construction contract to address some project requirements that were not yet fully designed— such as the building’s entry pavilion—another $1.9 million contract modification was issued in March 2011 (a year after the initial contract award), in part, to increase the funding allowances for the front entry pavilion and to provide additional glass that was to be installed in the lobby area. The entry pavilion was added to improve the security screening process and adhere to the U.S. Marshalls Service and U.S. Courts screening station requirements. That $1.9 million cost modification also addressed increased requirements associated with the geothermal heating system and below grade wells. Also, the contract costs increased, in part, due to tenant-requested changes. For example, an $802,000 contract modification was issued, in part, for requested millwork (e.g., judge’s bench and cabinet work) and the Court’s audiovisual equipment, telecommunications, and data-related requirements. GSA reported the final construction cost was approximately $41.3 million (about a 7.5 percent increase above the $38.5 baseline). Construction of the repair and alteration project started in October 2010 and was substantially completed approximately one month early in November 2013. Figure 5 shows the exterior of the building including its new entry pavilion. Figure 6 shows an exterior side view of the new entry pavilion and an interior view of the lobby. As part of the Recovery Act, the Social Security Administration received an appropriation to construct a new National Support Center to replace an older data center whose systems were approaching the end of their useful lives. The new National Support Center provides a state-of-the-art data center, added reliability, and the ability to expand to meet future needs. For example, the data center’s flexible, scalable design allows for a smooth transition to future information technology upgrades and new, emerging technology. The new 300,000 gross square foot data center complexbuilt on a 63 acre siteincludes the data center, warehouse, and office building; the facility was built to accommodate 200 employees. The constructed facility—supporting 24 hours a day, 7 day a week operations—is Leadership in Energy and Environmental Design (LEED) Gold Certified, even though data centers traditionally rank among the largest power users in modern facilities. GSA’s estimated construction cost for the project was adjusted down in August 2012 from $334 million to $262 million. GSA awarded the design- build construction contract in January 2012 for $191.6 million. The project’s construction contract cost was later rebaselined to $207.4 million due in part to the Social Security Administration requesting GSA have the contractor provide operations and maintenance transition services for 6 months. That contract change was made in March 2014—approximately 4 months before substantial completion—for roughly $2.1 million. GSA reported to us that the final construction cost was $208.1 million (roughly an 8.5 percent increase from the base contract award). Because the construction cost was well below GSA’s original construction estimate of $334 million, GSA reported to us the remaining project funds were returned to the Social Security Administration in accordance with the Recovery Act appropriation. GSA issued a notice to proceed (i.e., contract start date) to the design-build contractor in January 2012 and the project was substantially completed on-schedule roughly two and a half years later in July 2014. Figure 7 shows an exterior view of the main entrance to the data center. Figure 8 shows an interior view of the data center’s server space prior to occupancy. Figure 9 shows an exterior view of the on-site solar panel array with the data center in the background. The Department of the Interior (Interior) headquarters building— occupying two city blocks—was initially completed in 1936; upgrades to the building’s systems were required to extend the useful life of the building, support Interior’s operations, and meet current building codes and standards. In 2000, GSA began the construction of its multi-year, six- phase modernization plan, where each of the building’s six wings was to be modernized during one of the six phases. Phase 6 (Wing 1)—the final phase of the building’s modernization— included upgrading the mechanical and electrical systems, replacing the lights and ceiling systems, installing fire safety upgrades and emergency egress stairs, upgrading restrooms, improving accessibility, and restoring historic spaces to include the auditorium, library, and the Undersecretary’s and Secretary’s suites. In 2001, GSA originally negotiated with the contractor the costs to execute Phase 6, which was structured as a contract option. The option could be exercised at GSA’s discretion upon receiving funding but allowed for future, economic price escalation, for inflation. The contract price in 2001 for the Phase 6 scope was approximately $19.3 million. Because appropriated funding was not received until fiscal year 2014, that earlier contract pricing was contractually updated by GSA in 2014 to roughly $38 million; however, that figure included roughly $4.5 million in additional scope that GSA added into the project. The additional scope included, among other items, that the Phase 6 space was to be certified under the Leadership in Energy and Environmental Design criteria and that lessons learned from the earlier completed phases—implemented over nearly 15 years—would be incorporated into the Phase 6 project. Additionally, Interior asked GSA that parts of the library be converted into office spaces to increase the building’s space efficiency and allow Interior to move more personnel into the building. That contract change, for about $6.2 million, was made in May 2016 and also resulted in the schedule’s being rebaselined, adding about one year to the project’s duration. GSA reported that Interior provided $17.7 million in additional funding, inclusive of the costs for converting the library space. GSA reported that the construction contract cost for Phase 6 was $51.7 million (about a 36 percent increase above the 2014 adjusted, base contract cost of $38 million). Phase 6’s construction started in May 2014 and was completed approximately 3 years later in June 2017. Figure 10 shows the exterior of the Department of Interior headquarters building with its six wings. Figure 11 shows interior view of historic spaces that were restored during Phase 6. The primary driver for the project was to address the long term housing needs of the United States Courts and related agencies. The District Court required additional space that the adjacent existing John A. Campbell Courthouse could not provide, and GSA determined that a new courthouse was necessary to accommodate the Courts’ projected 10 to 30 year space needs. The Campbell Courthouse renovation followed the new courthouse construction to allow for the relocation of the Bankruptcy and Probation Courts from leased space, and allow for the full Court family to be co-located between the two adjacent buildings. The new courthouse building, adjacent to the existing Campbell Courthouse, was designed to provide 155,600 gross square feet of space, including parking. The building houses six courtrooms, nine judges’ chambers, the United States Marshalls Service, 38 below-grade parking spaces, and the capability to expand and accommodate eight additional courtrooms in the future. In fiscal year 2010, the new construction project received partial funding in an appropriation in the amount of $50 million, for construction. However, the project was not awarded at that time. The U.S. Courts and GSA had to revisit the long-term space needs for the U.S. Courts, which was later done as part of GSA’s 2013 feasibility study. In fiscal year 2014, an additional $69.5 million was appropriated for a new approach that would involve repairs and alterations to the existing Campbell Courthouse, as well as the construction of a new federal courthouse (which was to be smaller than originally designed), adjacent to the Campbell Courthouse. GSA fiscal year 2014 documentation for the new courthouse project estimated the total design cost at $8.5 million and the total construction cost at $71.1 million, which excluded any prior funding spent on site acquisition costs and the project’s earlier design. In April 2015, GSA awarded a single design-build contract for both the design and construction of the new courthouse and for the repairs and alteration of the existing Campbell Courthouse. GSA baselined the construction cost for the new courthouseexclusive of the costs for the Campbell Courthouse alterationsat $70 million. GSA data showed that the final construction cost for the new courthouse was $72.6 million (an increase of about 4 percent over the baseline cost of $70 million; roughly 9 percent less than the $79.6 million total estimated costs for both the design and construction). Construction started in Spring 2016 and was completed in just over 2 years, in June 2018. The schedule was rebaselined by roughly a month for severe weather delays during the construction. Figure 12 shows the exterior of the new U.S Courthouse and two interior spaces. In addition to the contact named above, Mike Armes (Assistant Director); Catherine Kim (Analyst-in-Charge); John Bauckman; Delwen Jones; Timothy Kinoshita; Ying Long; Malika Rice; Rachel Stoiko; and Crystal Wesco made key contributions to this report.

Summary: As the federal government's landlord, GSA spends hundreds of millions of dollars to construct or modernize federal buildings. By delivering these major construction projects, GSA supports tenant agencies' missions and facilitates the delivery of government services. GAO was asked to review GSA's major construction projects. This report: (1) identifies costs of these projects in the last 5 years and factors that contribute to those costs; (2) examines how GSA monitors and publicly communicates cost and schedule information; and (3) assesses GSA's efforts to confirm that projects meet GSA's requirements and that tenants are satisfied with completed projects. GAO analyzed GSA's performance data from fiscal years 2014 to 2018 for 36 projects with a minimum cost each of $20 million (i.e., a major construction project); selected five case-study projects representing diversity in project type, geographic area, building type, and range in cost and scope; reviewed applicable GSA policies, procedures, guidance, and reports; and interviewed GSA officials and project stakeholders. In fiscal years 2014 through 2018, the General Services Administration (GSA) completed 36 major construction projects—projects with a minimum cost of $20 million to construct new buildings or modernize existing buildings—with a total cost of $3.2 billion. According to a GSA consultant, factors specific to federal construction projects may result in GSA's projects costing roughly 15 to 25 percent more than comparable private sector projects. For example, GSA uses more durable but more expensive materials to achieve a longer building service life compared to private owners who may plan for a shorter service life. GSA's Annual Performance Reports to Congress do not indicate how much GSA “rebaselined” projects' schedules and costs. Rebaslining reestablishes the point at which GSA measures on-schedule and on-budget performance. In accordance with agency policy, GSA rebaselined 25 of 36 projects GAO reviewed to account for issues such as design changes and tenant-funded requests. For example, GSA rebaselined one of its modernization projects for a $2.7 million increase to the construction contract initially awarded for $21.8 million. The increase resulted from a design change to add a stairwell for fire safety purposes to accomodate the tenant's plan to increase the building's occupants (see figure). After GSA rebaselines a project, costs may differ from the project estimates approved by Congress. Because GSA does not report the extent that it has rebaselined projects or projects' final costs, Congress lacks information about GSA's performance: such as whether final costs are consistently above, below, or meeting estimated costs. Reporting such information could benefit Congress' ability to carry out its oversight role and improve transparency about the full costs of major federal construction projects. GSA assesses whether projects meet requirements and tenants' needs but does not fully capture or share lessons learned. For example, GSA uses “commissioning”—testing installed building systems—to validate that the buildings' systems function as designed. However, because GSA's 2005 commissioning guide references outdated guidance, the effectiveness of its activities may be limited in assuring buildings are operating optimally. GSA also uses post occupany evaluations (POE) to assess projects' performance and tenants' satisfaction. However, in the last 5 years, GSA has not regularly conducted POEs, due in part to resource constraints, and lacks a policy for selecting projects for POEs and communicating findings from completed POEs. As a result, GSA may be missing opportunities to fully utilize POEs to gather tenants' feedback and inform the design and construction of future projects. GAO is recommending that GSA (1) report the extent projects were rebaselined and their final costs; (2) update GSA's commissioning guidance; and (3) identify and communicate when and how to conduct POEs and share lessons learned. GSA concurred with two recommendations and partially concurred with the other, which GAO believes should be fully implemented as discussed in the report.