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United States Government Accountability Office: GAO: 

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

For Release on Delivery Expected at 10:00 a.m. EDT: Tuesday, September 
25, 2007:  

Capitol Visitor Center:
Update on Status of Project's Schedule and Cost as of September 25, 
2007: 

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

GAO-07-1249T: 

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 July 31, 
2007,[Footnote 1] and (2) the project's expected cost at completion and 
funding status. 

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 construction progress. In addition, we reviewed the contract 
modifications made to date. 

Summary: 

Since the July 31, 2007, CVC hearing, the project's construction has 
progressed, and AOC is now anticipating a November 2008, opening date. 
In addition, AOC and the sequence 2 contractor[Footnote 2] have signed 
a contract modification that extends the date for completing the 
majority of the sequence 2 work from September 15, 2006 to November 15, 
2007. However, because delays have occurred on a number of near- 
critical paths,[Footnote 3] and risks to the project's schedule remain, 
we agree with the November 2008 opening date. 

AOC has increased its estimate of the cost to complete the CVC 
project's construction to about $621 million to cover the costs 
associated with extending the sequence 2 schedule and to provide for 
delays, change orders, and remaining uncertainties. We believe this 
estimate is reasonable, provided there are no unusual delays. To date, 
about $556.2 million has been approved for CVC construction, and AOC 
has $18.6 million more that it has not yet received approval to 
obligate. Of this amount, AOC plans to use about $6 million for 
construction and the remainder for operations. For fiscal year 2008, 
AOC has requested $20 million for CVC construction and believes that it 
may need another $39 million. 

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 98 percent complete, compared with 96 
percent reported complete at the July 31 CVC hearing. Twenty-one of the 
CVC's 23 air handling units were reportedly operating full time as of 
September 13, 2007 and these systems are now undergoing testing, 
balancing, and commissioning. 

In August 2007, AOC and the sequence 2 contractor signed a contract 
modification that extends the date for completing the majority of the 
sequence 2 work from September 15, 2006, to November 15, 2007. The 
sequence 2 contractor continues to work hard on completing this portion 
of the project, which must be finished before the final fire alarm 
testing can begin. 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. 

AOC has not reported any delays on the CVC project's critical path. 
However, work has fallen further behind schedule on the majority of the 
near-critical paths we have been monitoring, including, for the CVC, 9 
of the 17 near-critical paths reported on at the last CVC hearing and 1 
new near-critical path, monitored last month. Work on 6 of the CVC near-
critical paths fell at least 2 weeks further behind. Altogether, there 
are now 5 CVC near-critical paths with 1 week or less of float 
remaining--meaning that with delays of 5 days or less, these near- 
critical paths will become the critical path or paths. 

In the House and Senate expansion spaces, work on 11 of 14 near- 
critical paths lost time last month. Because of delays in the House 
hearing room and in several near-critical-path activities, such as work 
in the atriums, mounting fire alarm devices, and framing ceilings, the 
schedule for completing the expansion spaces has slipped by about 7 
weeks since the last hearing--to February 5, 2008--according to the 
project's August 2007 schedule. 

Although the delays in work on the CVC's near-critical paths are 
significant, the major risk to the project's schedule continues to be 
technical problems that may surface during the installation, 
integration, operation and testing of the CVC's complex major building 
systems, including the fire alarm, security and HVAC systems. Moreover, 
such technical problems may not be evident until the systems undergo 
their final acceptance testing. 

Additional potential change orders also pose risks and continue to be 
identified by the CVC team each month. AOC and its contractors have 
continued to work together to address the number of open (unresolved) 
potential change orders, and the list of open orders has continued its 
slight decline. Sustained attention to this issue is needed to reduce 
budget uncertainty and to avoid risks to the project's schedule as new 
proposed change orders come in. 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 August 2007: 

[See PDF for image] 

This is a line graph with two lines (Outstanding PCOs and PCOs settled 
this month). The vertical axis of the graph depicts total number from 0 
to 500. The horizontal axis depicts 18 dates from March 31, 2006 
through August 31, 2007. The PCOs settled this month line is generally 
around 30 to 50 for each date. The outstanding PCOs line is generally 
from approximately 350 on the initial date (March 31, 2006) to 
approximately 430 on the ending date (August 31, 2007), with several 
highs and lows in between. 

Source: AOC's construction management contractor.  

[End of figure] 

AOC Has Updated Its Cost Estimate, and Additional Funds Are Likely to 
Be Needed: 

AOC has increased its estimate of the cost to complete the CVC 
project's construction to about $621 million. This revised estimate 
reflects, among other things, the cost associated with extending the 
date for completing sequence 2 work and is consistent with our report 
at the July 31, 2007, CVC hearing that the total cost of completing the 
project's construction was likely to exceed $600 million. The new $621 
million estimate includes contingency amounts for delays, change 
orders, and remaining uncertainties among other things related to the 
project's fire alarm testing. Our review of this estimate indicates 
that it is reasonable, given the information available at this time, 
provided there are no extraordinary delays in the future. Although 
there is still considerable uncertainty about the cost impact of 
earlier construction delays and future fire alarm testing, we believe 
reasonable budgetary allowances have been made. 

To date, about $556.2 million has been approved for CVC construction. 
In addition, AOC has $18.6 million of its fiscal year 2007 CVC 
appropriations that it 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 requested $20 million for fiscal year 2008 CVC appropriations 
for construction and estimates, on the basis of its new project 
estimate, that it may need an additional $39 million. 

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. 

[End of section]  

FOOTNOTES 

[1] GAO, Capitol Visitor Center: Update on Status of Project's Schedule 
and Cost as of July 31, 2007, GAO-07-1149T (Washington, D.C.: July 31, 
2007). 

[2] AOC contracted with two firms to construct the CVC project in 
phases, or sequences. The sequence 1 contractor, Centex Construction 
Company, performed the project's excavation and structural work, while 
the sequence 2 contractor, Manhattan Construction Company, is 
responsible for the mechanical, electrical, plumbing, and interior 
finishing work. 

[3] Near-critical paths are, after the critical path or paths, the 
longest paths of activities through a project's schedule. Each day of 
delay in the critical path could delay the completion of the entire 
project.  

[End of section]  

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