Inquiry Into Change Orders and Claims for Construction of the Richard B. Russell Federal Building

LCD-79-313: Published: May 16, 1979. Publicly Released: May 29, 1979.

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Concern was expressed over the costs and the delay in completing the Richard B. Russell Federal Building in Atlanta, Georgia. An investigation was conducted of the cost overruns and the legitimacy of the claims filed by the construction contractor.

In April 1979, the General Services Administration (GSA) estimated the total cost of the Russell Building project, excluding claims, at about $62 million or about $15 million less than the amount authorized by Congress for the project. Claims awards could significantly increase the total cost. The validity of the claims is presently an issue pending before the General Service Board of Contract Appeals. Most of the construction contractor's claims related to change orders. The change orders increased the contract by a net amount of $32,387. The total increase in construction cost for change orders in this and other contracts amounts to $3.18 million. The majority of change orders are due to design deficiencies or changed agency requirements. At the time the review was completed, the construction contractor had filed or expressed its intent to file claims totalling $39.6 million. The bulk of the claims is for time extensions. The contractor has provided GSA with no backup support for these claims. The General Service Board of Contract Appeals or the U.S. Court of Claims will make the final determination on most of the claims.

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