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Testimony:

Before the Subcommittee on the 
Legislative Branch, Committee on 
Appropriations, House of Representatives:

United States Government Accountability Office:

GAO:

For Release on Delivery Expected at 9:00 a.m. EDT:

Tuesday, July 31, 2007:

CAPITOL VISITOR CENTER:

Update on Status of 
Project's Schedule and Cost 
as of July 31, 2007:

Statement of Terrell G. Dorn, Director,
Physical Infrastructure Issues:

Capitol Visitor Center:

GAO-07-1149T:

Madam Chair and Members of the Subcommittee:

I appreciate the opportunity to be here today to assist the 
Subcommittee in monitoring progress on the Capitol Visitor Center (CVC) 
project. My remarks will focus on (1) the Architect of the Capitol's 
(AOC) construction progress since the last CVC hearing on June 27, 
2007; and (2) the project's expected cost at completion and funding 
status.[Footnote 1]

Today's remarks are based on our review of schedules and financial 
reports for the CVC project and related records maintained by AOC and 
its construction management contractor, Gilbane Building Company; our 
observations on the progress of work at the CVC construction site; and 
our discussions with the CVC team (AOC and its major CVC contractors), 
AOC's Chief Fire Marshal, and representatives from the U.S. Capitol 
Police. We also reviewed AOC's construction management contractor's 
periodic schedule assessments, potential change order log, and weekly 
reports on the progress of interior wall and floor stonework. In 
addition, we reviewed the contract modifications made to date.

Summary:

Since the June 27, 2007, CVC hearing, the project's construction has 
progressed, and according to the latest schedule, AOC is still 
projecting a June 27, 2008, completion date[Footnote 2] and a September 
22, 2008 opening date. Work has advanced on the project's heating, 
ventilation, and air-conditioning (HVAC) system, interior wall stone 
and ceiling installation, and other interior and exterior construction 
work. However, some delays have occurred in activities on the project's 
critical path (i.e., the work on the fire alarm system) and on most of 
its near-critical paths, and further delays are possible.[Footnote 3] 
AOC was able to mitigate the delay in the project's critical path by 
reducing the time available for future fire alarm testing. This action 
may not produce the desired results, though, given the complexity of 
the requirements for fire alarm testing. Delays in near-critical 
activities such as the ceiling close-ins and the House and Senate 
expansion spaces have reduced the time reserved for contingencies along 
those near-critical paths, but have not yet affected the critical path. 
Furthermore, a number of risks to the project's schedule remain. These 
include potential problems in completing the installation, integration, 
operation, and testing of the fire alarm, security, and HVAC systems. 
Recently, for example, AOC's Chief Fire Marshal completed his initial 
plan for final acceptance testing of the fire alarm systems and found 
additional complexity in testing requirements that has the potential to 
delay the project for a number of months. In addition, the Fire Marshal 
has added testing requirements for all of the CVC's smoke detectors, 
which could further delay the project's completion. Given these and 
other risks to the project's schedule, we believe that a September 2008 
opening date is unlikely. In our view, AOC will be able to meet or come 
close to meeting the opening date only if the CVC team promptly makes 
significant improvements in its execution of the project and the 
project's schedule.

At the November 15, 2006, CVC hearing,[Footnote 4] we reported that the 
total cost of the entire CVC project at completion is likely to be 
about $592 million without an allowance for risks and uncertainties, 
and over $600 million with such an allowance. Because the project's 
expected completion date remains uncertain, we have not updated these 
estimates. At the committee's last CVC hearing, we suggested that AOC 
update its cost estimate. Given the recent schedule developments, we 
continue to believe that AOC should update its estimate of the cost to 
complete the CVC project. To date, about $556.2 million has been 
approved for CVC construction, including about $25.2 million in fiscal 
year 2007 appropriations.[Footnote 5] For fiscal year 2007, AOC has 
also received an additional appropriation of $18.6 million for the CVC 
project, which AOC has not yet received approval to obligate. AOC has 
indicated that of this amount, approximately $6 million will be used 
for construction and $12.6 million will be used for operations. AOC has 
also requested $20 million in fiscal year 2008 CVC construction 
appropriations to cover remaining costs, and we estimate that AOC may 
need further appropriations in future fiscal years for construction 
claims.

Construction Is Progressing, but Delays in Work on Near-critical Paths 
and Other Risks Could Affect the Scheduled Completion Date:

According to AOC's construction management contractor, in dollar terms, 
the overall CVC project is 96 percent complete, compared with 95 
percent reported complete at the June 27 CVC hearing. Twenty-one of the 
CVC's 23 air handling units were reportedly operating full time as of 
July 20, and work to test and balance these systems is currently 
underway.

Work on the project's critical path--fire alarm testing--was delayed 1 
week in June, but AOC mitigated the impact of this delay, AOC's 
construction management contractor reported, by reducing the time 
available for future fire alarm testing. This action may not produce 
the desired results, given complexities that have emerged through 
further analysis. As we recommended several months ago,[Footnote 6] 
AOC's Chief Fire Marshal completed his initial plan for final 
acceptance testing in June and found additional complexity in the fire 
alarm testing requirements that has the potential to extend the time 
needed for testing and to delay the project for a number of months. In 
addition, the Fire Marshal requested further testing for all of the 
CVC's smoke detectors.

Delays occurred in 10 of 17 near-critical paths in June. Although, as 
we noted at the June 27 CVC hearing, the current schedule includes 
about 3 additional months for slippages, risks, and uncertainties, 
further substantial delays in some near-critical paths could extend the 
project's completion date. For example, delays in ceiling installation, 
a near-critical-path activity, could limit the installation of fire 
alarm devices, a critical-path activity. Work on 5 near-critical paths 
fell at least 2 weeks further behind in June. While the date for 
completing the CVC's construction remains unchanged, the sequence 2 
contractor extended the schedule for completing the construction of the 
House and Senate expansion spaces because of delays in the House 
hearing room and in several near-critical-path activities, including 
testing and balancing the HVAC system, mounting fire alarm devices, and 
framing ceilings. As a result, the schedule for completing the 
expansion spaces slipped by about 3 weeks--to December 12, 2007-- 
according to the project's June 2007 schedule.

One indicator of construction progress we have been tracking--the 
completion date for certain work activities--shows that the project is 
not progressing as well as planned. As shown in table 1, the sequence 2 
contractor completed 3 of 10 activities on time and completed 1 other 
activity late.

Table 1: Activities Being Tracked for the Capitol Visitor Center, June 
28-July 31, 2007:

Activity: Ceiling installation; 
Location: Senate lower level; 
Scheduled completion: 7/11/2007; 
Actual completion: 7/12/2007.

Activity: Ceiling installation; 
Location: House lower level; 
Scheduled completion: 7/11/2007; 
Actual completion: [Empty].

Activity: Fabricate and deliver annunciators; 
Location: Life safety; 
Scheduled completion: 7/1/2007; 
Actual completion: 5/29/2007.

Activity: Program/Load system; 
Location: Life safety; 
Scheduled completion: 7/1/2007; 
Actual completion: [Empty].

Activity: Install, terminate, and test annunciators; 
Location: Life safety; 
Scheduled completion: 7/5/2007; 
Actual completion: 6/8/2007.

Activity: Testing and balancing AHU#12; 
Location: Auditorium; 
Scheduled completion: 6/30/2007; 
Actual completion: [Empty].

Activity: Floor stone; 
Location: East Front ground; 
Scheduled completion: 7/15/2007; 
Actual completion: [Empty].

Activity: Begin pre-testing; 
Location: Life safety; 
Scheduled completion: 7/11/2007; 
Actual completion: 6/11/2007.

Activity: Install fabric ceiling panels; 
Location: LOC tunnel; 
Scheduled completion: 7/13/2007; 
Actual completion: [Empty].

Activity: Floor stone; 
Location: East Front principal; 
Scheduled completion: 7/3/2007; 
Actual completion: [Empty].

Source: AOC and its construction management and construction 
contractors.

[End of table]

Two major risks to the project's schedule persist. First, as 
demonstrated this month, problems in completing the installation, 
integration, operation, and testing of complex, major building systems, 
including the fire alarm, security, and HVAC systems, remain the 
greatest risk. Delays continue, and technical problems remain a risk 
until these systems have been installed, integrated, and successfully 
tested. Moreover, problems with these systems may not be evident until 
their final acceptance testing.

Second, the number of outstanding proposed change orders for sequence 
II work continues to pose a risk to the project's schedule. Even though 
fewer proposed change orders were resolved in June than in May (35 
compared with 49), the total number of open proposed change orders fell 
slightly from 451 in May to 443 in June. The large majority (over 80 
percent) of the proposed change orders are in the hands of either AOC's 
construction management contractor or sequence II construction 
contractor for resolution. Proposed change orders that result in 
contract modifications for new work or rework could delay the project's 
scheduled completion, as well as possibly increase the project's costs. 
Even though the dollar values of recent proposed change orders have 
been relatively small compared with the project's total cost, unsettled 
change order requests are a cause for concern. Figure 1 compares the 
number of outstanding proposed change orders with the number settled 
each month.

Figure 1: Outstanding and Settled Proposed Change Orders by Month, 
March 2006 through June 2007:

(See PDF for image)

Source:  AOC's construction management contractor.

[End of figure]

Cost Estimate Remains Unchanged, but Additional Funds Have Been 
Provided and More Are Likely to Be Needed:

Because the project's expected completion date remains uncertain, we 
have not updated our cost-to-complete estimate since the November 15, 
2006, CVC hearing--$592 million without provision for risks and 
uncertainties and over $600 million with such provision. At the 
committee's last CVC hearing, we suggested that AOC update its cost 
estimate. Given the recent schedule developments, we continue to 
believe that AOC should update its estimate of the cost to complete the 
CVC project. To date, about $556.2 million has been approved for CVC 
construction, including about $25.2 million in fiscal year 2007 
appropriations.[Footnote 7] AOC also received an additional $18.6 
million in fiscal year 2007 appropriations for the CVC project, which 
AOC has not yet received approval to obligate. AOC has indicated that 
of this amount, approximately $6 million will be used for construction 
and $12.6 million will be used for operations. AOC has also requested 
$20 million in fiscal year 2008 CVC construction appropriations to 
cover remaining costs. In addition to this requested fiscal year 2008 
funding, we estimate that AOC may need further appropriations in future 
fiscal years for construction claims.

Madam Chair, this completes my prepared statement. I 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 Terrell 
Dorn at (202) 512-6923. Other key contributors to this testimony 
include Shirley Abel, Lindsay Bach, Maria Edelstein, Elizabeth 
Eisenstadt, Jeanette Franzel, Jackie Hamilton, Bradley James, David 
Merrill, and Joshua Ormond.

FOOTNOTES

[1] GAO, Capitol Visitor Center: Update on Status of Project's Schedule 
and Cost as of June 27, 2007, GAO-07-897T (Washington, D.C.: June 27, 
2007).

[2] This date does not allow time for installing artifacts in the 
exhibit gallery or preparing for operations. 

[3] The critical path is the single longest path of activities through 
a project's schedule. Each day of delay in the critical path could 
delay the completion of the entire project. Near-critical paths are the 
next longest paths through the project's schedule.

[4] GAO, Capitol Visitor Center: Update on Status of Project's Schedule 
and Cost as of November 15, 2006, GAO-07-129T (Washington, D.C.: Nov. 
15, 2006).

[5] This amount includes $950,000 for contract support for AOC's Fire 
Marshal, whose office is funded using AOC's General Administration 
account. We are currently reviewing whether the CVC appropriation is 
available for such purposes. 

[6] GAO, Capitol Visitor Center: Update on Status of Project's Schedule 
and Cost as of February 16, 2007, GAO-07-507T (Washington, D.C.: Feb. 
16, 2007).

[7] See footnote 5.

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