In fiscal year 2014, GSA had over 1,500 federally owned buildings in its inventory. These buildings are occupied by a wide variety of federal agencies and are used to fulfill agency missions. In some instances, these buildings are old and in significant need of repair, renovation, or modernization. For example, according to GSA, the average age of its inventory is 49 years, and funding difficulties have led to deterioration of an already aged portfolio. In addition, GSA reports that more than a fourth of its inventory of federally owned buildings is listed in or eligible for the National Register of Historic Places, the nation’s listing of historic properties, and approximately half of this inventory is more than 50 years old. We have previously reported that deferring maintenance and repair can reduce the overall life of federal facilities, lead to higher costs in the long term, and pose risks to safety and agencies’ missions. GSA addresses the need for repairs and alterations in the buildings in its inventory through its repair and alteration program. The program is implemented through repair and alteration projects in all 11 of GSA’s regional offices. In fiscal year 2015, about $800 million was appropriated from the Federal Buildings Fund (FBF) to perform major and minor repairs and alterations. This is down slightly from the $1.1 billion appropriated in fiscal year 2014. GSA can make repairs or alterations on its own initiative or at the request of tenant agencies. Repairs or alterations made on GSA’s own initiative can be classified as “major”— that is, exceed the current $2.85 million threshold requiring preparation of a prospectus that is submitted to Congress for approval—or “minor.” Minor repair or alteration projects are those projects where the construction costs exceed $25,000 but are less than the prospectus level threshold. According to GSA officials, major repair and alteration projects, among other things, primarily focus on reducing the agency’s real property footprint, achieving energy savings, and improving the condition of and protection of public assets and occupants’ health and safety. Minor repair and alteration projects primarily focus on building repairs and equipment and other replacement issues and funding is requested as a lump sum dollar amount for the program. Financing for GSA-initiated repair and alteration work comes from the FBF. The FBF is a fund that is primarily financed by rents received from other agencies and it was authorized and established by the Public Buildings Act Amendments of 1972. Instead of GSA’s receiving direct appropriations, the FBF operates as the primary means of financing the operating and capital costs associated with federal space, although GSA sometimes receives supplemental appropriations to meet repair or new construction needs, such as appropriations received from the American Recovery and Reinvestment Act of 2009. Congress exercises control over the FBF through the appropriations process that sets annual limits—called obligational authority—on how much of the fund can be obligated for various activities. Repair and alteration work is also performed at the request of tenant agencies. This work is done under an RWA. RWA work can range from installation of equipment and security upgrades to major renovations of buildings. According to GSA’s RWA National Policy Document, to be accepted by GSA, an RWA must meet certain criteria, including that there is a bona fide need for the work, there is a preliminary scope of work that clearly describes the objectives and requirements of the customer request, a cost estimate, and proper funding certification and client signature. According to the RWA National Policy Document, the signed RWA authorizes GSA to execute the scope of the client agency request based on the authorized amount. The work is done on a reimbursable basis, and GSA bills the client agency as expenses are incurred. RWAs can be amended for changes in scope of work or authorized amounts as long as funding is legally available for that purpose. The RWA National Policy Document indicates there are four categories of RWAs— severable, non-severable, recurring, and non-recurring. Non-recurring RWAs, those RWAs that, according to GSA would be applicable to repair and alteration work, are established to cover an indefinite period that must not exceed 5 fiscal years from the end of the last year in which authority to obligate funds is available. In fiscal year 2014, GSA accepted about 3,400 RWA projects in federally owned buildings held by GSA with a total value of about $670 million. In general, about 75 percent of these projects were less than about $80,000; however, about 2 percent of the projects were valued at $1.9 million or higher. Planning and executing repair and alteration projects follows a process which is prescribed by GSA and other federal requirements. In general, this process has five phases: (1) pre-project planning, (2) project development and design, (3) contracting, (4) construction, and (5) project closeout (see fig. 1). GSA officials told us that, with the exception of certain checklists, prospectus-level RWA projects are treated the same as regular capital projects. The following briefly describes these five phases: Pre-project planning: According to GSA’s Project Planning Guide, the pre-project planning phase is where GSA develops the contextual knowledge of its inventory, facilities, budgets, and stakeholders. This is to enable GSA to identify potential projects, alternative solutions, and implementation strategies. Among other things, this phase would include facility condition and other special studies to assess the condition of GSA’s inventory and identify repair and alteration needs. Project development and design: This phase is where GSA begins to develop a repair and alteration project in more detail, to refine options, and to develop project management plans (PMP). According to GSA officials, project development also includes risk assessment, including documentation of known and likely unknown conditions. GSA’s Project Planning Guide indicates both a feasibility study, which defines project goals, scopes customer need, and assesses alternatives, and a program development study, which reviews previous project assumptions, plans, and budgets and proposes a construction budget and implementation strategy, would be prepared. In addition, cost estimates are to be completed, an initial Capital PMP is to be prepared, and preliminary design concepts are to be developed. A Capital PMP is a document that, among other things, defines the goals of a project and the organization required to accomplish the goals, as well as target budgets and schedules. According to GSA, the PMP should also set forth the acquisition strategy for the project and identify any constraints or risks associated with the project. Contracting: Acquisition planning begins in the early stages of project development and GSA’s Project Planning Guide recommends that as part of the feasibility study an implementation plan be prepared that identifies the best strategy for procuring a project. During the contracting phase, GSA solicits bids for architect/engineering services and repair and alteration work, evaluates these bids, and awards contracts. Construction: This phase is when the repair and alteration work is done. Construction includes construction of building and site improvements, arranging for utilities, and preparing for building occupancy. According to GSA officials, when unforeseen site conditions are discovered they are documented through contract change orders and modifications if they require a change to the contract. GSA uses both an electronic system and paper records to record contract changes. Contract change orders and modifications are also recorded in GSA’s electronic project management system. Project closeout: Project closeout is when the work is completed, final payments are made, and contracts are closed. GSA’s Acquisition Manual requires that appropriate steps be taken to ensure that physically completed projects are formally closed out in accordance with FAR and GSA requirements. Project closeout includes filing as- built drawings in project records. In January 2015, GSA began implementation of a Central Facilities Repository, which will be used to house project documents, including as-built drawings and other building information. To help address unexpected events or circumstances, including unforeseen site conditions, repair and alteration projects may include construction contingencies. According to GSA, contingencies are a part of total estimated project costs and cover costs that may result from incomplete design, unforeseen and unpredictable conditions, or uncertainties concerning project scope. GSA officials said contingencies are held by the owner (GSA) and are not part of the contract price at award. GSA currently recommends a 10 percent construction contingency for repairs and alterations and a 7 percent construction contingency for new construction. Contingencies are also applied to RWA projects, and according to GSA, prospectus-level repair and alteration RWAs would generally have a 10 percent construction contingency. According to industry stakeholders we interviewed, unforeseen site conditions are common in repair and alteration projects. Ten of the 11 stakeholders told us that unforeseen site conditions were very prevalent, and the other stakeholder said unforeseen site conditions were somewhat to very prevalent. Some of the stakeholders said the older the building the more likely unforeseen site conditions would be encountered. Officials from the Architect of the Capitol said they run into unforeseen site conditions on most of their projects. Officials from the U.S. Postal Service also said unforeseen site conditions are prevalent and most often appeared in paving projects, in underground storage tanks that were leaking, and in roof replacements with deteriorated decking. The industry stakeholders we interviewed identified the main types of unforeseen site conditions as: environmental hazards (such as asbestos and lead-based paint), and conditions being different than in building drawings or items not located where they were expected to be. Stakeholders also told us impacts of unforeseen site conditions are generally cost increases and schedule delays but the impacts can vary depending on the project.