Work on the CVC project has progressed in many areas, but the project completion date has slipped to October 26, 2007, about 6 weeks beyond the September 17, 2007, completion date discussed at the Subcommittee’s last CVC hearing. This 6-week slippage is due to continuing problems associated with the CVC’s fire protection system, but many other important activities, including those associated with the HVAC system, East Front, and security system, have been delayed as well. Last week, at the request of the Subcommittee and as we had recommended, AOC completed and sent to Congress an action plan for improving management execution of the project and its schedule. The action plan was responsive to our recommendation. However, it is too early to tell whether implementing the plan will curtail the types of schedule slippages that have occurred since the Subcommittee’s last CVC hearing and throughout the project. Moreover, although the CVC team and AOC’s Fire Marshal Division have agreed on a number of important elements of the CVC’s fire protection system, they have not yet agreed on all important elements. Additionally, as noted, concerns have emerged regarding the CVC’s HVAC system, as well as the impact of the passage of the sequence 2 September 15, 2006, contract completion date. Accordingly, priority should be given to accomplishing all of the identified critical tasks so that pretesting of the facility’s fire protection system can begin in the spring of 2007. Additionally, to ensure that AOC gets a high-quality, fully functional facility, it is essential that AOC effectively implement the actions it has identified and give careful consideration to existing contractual remedies available to it to achieve completion of all necessary work within the current estimated time frame at a reasonable cost without otherwise compromising any of the government’s contractual rights or remedies. According to information provided by AOC and its construction management contractor and our observations, work on the project has advanced, in terms of both the dollar value of the work in place and individual project elements. In dollar terms, AOC’s construction management contractor reported that, as of October 31, the overall CVC project was about 88 percent complete and the sequence 2 work was about 84 percent complete—up from about 86 percent and 77 percent, respectively, as of the Subcommittee’s last CVC hearing. Progress on individual project elements includes the following: Interior CVC work has moved forward, according to AOC’s construction management and sequence 2 contractors. For example, the CVC team and AOC’s Fire Marshal Division have reached or nearly reached agreement on the design for several critical elements of the facility’s fire protection system. Agreement on these elements is necessary for the system’s installation to proceed. In addition, the mechanical subcontractor has completed certain preparations for operating the CVC’s air handling units, all but two of which passed a required test for leaks as of Monday, and the CVC team expects conditioned air to begin flowing to certain parts of the facility later this month. The sequence 2 contractor has also installed about 65 percent of the CVC’s floor stone, up from about 43 percent at the time of the Subcommittee’s last CVC hearing, and ceiling installation is complete or essentially complete in the great hall, south side corridor (lower level), both orientation theaters, and the food service area. (AOC notes that blistered ceiling tile in the orientation theaters will have to be repaired or replaced.) Surface work continued, including paving and brick gutter work on the Senate plaza. Work on the House connector tunnel and on linking the Library of Congress tunnel with the Jefferson Building has also continued. East Front work continued, including completion of stone installation on the redesigned archway above the main central staircase from the CVC to the East Front and installation of ductwork and metal stud framework to support wall stone at the rotunda and gallery levels. In the House and Senate expansion spaces, ceiling close-in inspections, ceiling panel installation, and stone work have continued, and installation of the circular staircase that will connect all three levels of the Senate expansion space has begun. On November 7, 2006, AOC sent Congress an action plan setting forth a number of steps it has taken, plans to take, or is considering to ensure that the CVC is ready for occupancy in the fall of 2007. AOC developed this plan at the Subcommittee’s request in response to recommendations we made to AOC at the Subcommittee’s September 21 CVC hearing. These recommendations were aimed at enhancing AOC’s execution of the schedule and project and at facilitating the Subcommittee’s efforts to (1) hold AOC accountable for managing the project and (2) work with AOC to ensure that the schedule implications of proposed scope or design changes are quickly determined and considered by all appropriate stakeholders before final decisions on the proposed changes are made. AOC’s actions included meeting weekly with the CVC team to deal exclusively with schedule having its construction management contractor identify areas needed to meet the project’s schedule that the contractor believes are understaffed or face obstacles to progress; identifying sequence 2 and construction management personnel who are responsible for meeting key schedule dates and resolving identified problems; basing the sequence 2 contractor’s future award fee on meeting schedule reassessing the scope, depth, and time frames associated with the pretesting and final testing of the facility’s fire and life-safety protection systems; increasing communication among the CVC team, AOC’s Fire Marshal Division, and the U.S. Capitol Police; and discussing proposed significant scope or design changes with Capitol Preservation Commission representatives before such proposed changes are adopted and getting the congressional leadership’s approval for discretionary changes requested by the Senate or House. The actions AOC has identified are generally responsive to our recommendations and, if implemented effectively and quickly, should help AOC improve its project and schedule management as well as help ensure that the schedule and cost implications of proposed discretionary design or scope changes are appropriately considered before final decisions on them are made. However, we have concerns about the usefulness of one step AOC is considering—the possible establishment of a CVC peer review panel to assess the approaches planned for the fire protection system’s pretesting and final testing. We have expressed our concerns to AOC, and it has agreed to consider them. Besides the actions it identified in its November 2006 action plan, AOC has been considering how to deal with the impact of passing the sequence 2 contract completion date, September 15, 2006. This is a complex issue, in part because its resolution potentially involves preliminary determinations about the causes of, and responsibility for, project delays during sequence 2 up to September 15. AOC has also been considering other factors, such as the need to instill a sense of urgency and responsibility to meet the contractor’s currently established fall 2007 completion time frame; the possibility of setting a specific date as the new contract completion date and the implications associated with alternative dates; the constructive manner in which the sequence 2 contractor has worked with AOC and the rest of the CVC team to accomplish work and resolve problems; and the need to ensure that the work necessary to get the facility completed is done expeditiously at a reasonable cost. We have discussed these issues with AOC and pointed out that it needs to decide how it intends to proceed as quickly as possible and also consider the risks that various options pose. In view of additional schedule slippages that have occurred and issues that have arisen since the Subcommittee’s last CVC hearing, we are making additional recommendations to AOC, which we will discuss later in this testimony. In addition to the actions identified by AOC, the sequence 2 contractor has reported adding five superintendents to its CVC staff in the last several months to help achieve the schedule. Given the number and magnitude of the changes that have occurred to the sequence 2 contract since it was initially awarded and the extent to which problems have constrained progress, we believe that this additional supervision should put the team in a better position to meet schedule dates and address problems quickly. The additional time needed to make design changes to the CVC’s fire protection system has extended the project’s completion date by about 6 weeks since the Subcommittee’s September 21 CVC hearing—from September 17, 2007, according to the schedule in effect at that time, to October 26, 2007, according to the October 2006 schedule issued last week. In addition, AOC’s construction management contractor reported slippages in construction work for all of the 20 near-critical activity paths it identified in its schedule report for October 2006. For many of these activity paths, the schedule slipped at least 4 weeks. For example, the contractor reported a 65-workday delay for two East Front elevators due to late completion of necessary preceding work, a 66-workday delay for fabrication and installation of bronze doors because of fabrication problems experienced by the supplier, a 38-workday delay in ceiling close- ins in the upper level security lobby needed to resolve unexpected ceiling problems, and a 38-workday delay in completing wall stone work in the East Front basement area attributable to unanticipated design issues. The contractor also reported a 130-workday delay in the delivery of custom light fixtures, apparently the result of contractual issues between the sequence 2 contractor and its supplier. According to the construction management contractor, there are now five near-critical activity paths— including the HVAC system, East Front work, and work in the upper level security lobby and assembly rooms, for which additional slippages of 17 to 53 workdays could further delay the CVC’s completion date. Neither the September 17, 2007, nor the October 26, 2007, project completion dates included any time for (1) installing artifacts in the exhibit gallery after a certificate of occupancy has been issued, (2) preparing for operations, or (3) dealing with risks and uncertainties.