GAO-06-828T, Capitol Visitor Center: Update on Status of Project's Schedule and Cost As of August 2, 2006


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Testimony: 

Before the Subcommittee on the Legislative Branch, Committee on 
Appropriations, U.S. Senate: 

United States Government Accountability Office: 

GAO: 

For Release on Delivery Expected at 10:30 a.m. EDT: 

Wednesday, August 2, 2006: 

Capitol Visitor Center: 

Update on Status of Project's Schedule and Cost As of August 2, 2006: 

Statement of Terrell Dorn, Director Bernard L. Ungar, Director: 

Physical Infrastructure Issues: 

GAO-06-828T: 

Mr. Chairman and Members of the Subcommittee: 

We are pleased to be here today to assist the Subcommittee in 
monitoring progress on the Capitol Visitor Center (CVC) project. Our 
remarks will focus on the Architect of the Capitol's (AOC) progress in 
achieving selected project milestones and in managing the project's 
schedule since the Subcommittee's June 28, 2006, hearing on the 
project.[Footnote 1] As part of this discussion, we will address a 
number of key challenges and risks that continue to face the project, 
as well as actions AOC has taken or plans to take to address these 
risks. In addition, we will discuss the status of the project's costs 
and funding. 

Our remarks today 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, the General Services Administration, and the Office of 
Compliance. We also reviewed AOC's construction management contractor's 
periodic schedule assessments and daily reports on the progress of 
interior wall and floor stonework. 

In summary: 

Since the Subcommittee's June 28 CVC hearing, the CVC team has 
continued to move the project's construction forward, and the project's 
overall targeted completion dates have remained about the same as we 
reported at that hearing. However, risks have materialized, especially 
in connection with the CVC's fire protection system, and a number of 
important activities have been delayed, lessening our confidence in the 
likelihood of the CVC' team's meeting the targeted completion dates. We 
will reassess the project's schedule and monitor the team's progress in 
achieving effective management control over the CVC's fire protection 
system work during the next several weeks and report our results to the 
Subcommittee in September. 

* During the past month, work on the project has progressed in a number 
of areas. For example, chilled water began flowing from the Capitol 
Power Plant to the CVC this week, and the sequence 2 contractor expects 
to have dehumidified air in the exhibit gallery by around mid-August. 
In addition, critical interior wall and floor stone installation has 
continued, together with other interior and exterior construction work. 
Almost all of the interior wall stone for the CVC itself (excluding the 
atrium areas, the East Front, and the tunnels) is now installed. 

* A number of problems have developed in connection with the CVC's fire 
protection system, which we now consider to be the single greatest 
source of risk to meeting the project's scheduled completion dates. 
Although the overall schedule for completing this system has not 
slipped since the Subcommittee's last CVC hearing, some activities have 
been delayed, and the team continues to encounter new issues or 
"surprises" with the fire protection system. The CVC's fire protection 
system has not yet been fully approved, and a significant problem with 
the installation of one of the system's components was recently 
identified. Although this problem has been resolved, communication and 
management issues surfaced that could further affect work on the system 
if they are not effectively resolved quickly. In addition, critical 
building systems still have to be commissioned and tested, and certain 
design or work scope elements are still incomplete or are being 
clarified, refined, or changed, even though the project's overall 
design is essentially complete. 

* Several activities important to the CVC's completion, such as East 
Front work, have been delayed since the Subcommittee's last CVC 
hearing. During the last 5 weeks, the sequence 2 contractor exceeded 
its target for interior floor stone installation but again fell short 
of its target for interior wall stone installation. In addition, the 
sequence 2 contractor met only 2 of the 8 milestones we have been 
tracking for this hearing. Although this contractor's monthly billings 
were higher in June than in May, the trend in billings continues to 
indicate that construction work is more likely to be completed closer 
to AOC's new target dates than its previous ones. 

* AOC's schedule provides additional time to complete work after 
construction work is scheduled to be done. This additional time will 
give AOC some leeway, if necessary, to address risks and uncertainties 
such as those associated with complex building systems and trade 
stacking, should it occur. The CVC's complex heating, air conditioning, 
and ventilation (HVAC); fire protection; and security systems have to 
work together as well as separately, and uncertainties associated with 
each could affect the schedules for all. During the past month, the 
sequence 2 contractor has continued work on its area-by-area plans to 
prevent trade stacking[Footnote 2] during finish work. In our 
reassessment of the project's schedule, we will determine whether the 
additional time AOC has scheduled is likely to be sufficient to address 
these and other risks and uncertainties. AOC's construction management 
contractor has not yet completed its reassessment of the schedule but 
expects to have it done shortly. 

We previously estimated that the total cost to complete the entire CVC 
project would be about $556 million without an allowance for risks and 
uncertainties and $584 million with such an allowance. To date, about 
$530 million[Footnote 3] has been provided for CVC construction. AOC 
and its construction management contractor have completed their 
reassessments of the cost to complete the project and believe that 
sufficient funding will be available except for potential delay-related 
costs, assuming that AOC receives about $26 million in fiscal year 2007 
appropriations for CVC construction. This is the amount our previous 
cost-to-complete estimate showed would be necessary without provision 
for risks and uncertainties. We have not increased our $556 million 
estimate (which includes this $26 million) to reflect recent events. 
The results of our reassessment of the cost to complete the project, 
which we expect to have by mid-September, will include an assessment of 
the impact of these events. Although we anticipate that our $556 
million estimate is likely to increase, we have no specific indication 
at this time that the cost to complete the entire project will exceed 
our $584 million estimate, which does include an allowance for risks 
and uncertainties, such as potential delay-related costs. In addition, 
as we have previously indicated, AOC preliminarily expects to need 
about $950,000 in fiscal year 2007 AOC general administration 
appropriations to pay for the contractual support needed to complete 
acceptance testing of the facility's fire protection system in time to 
meet the project's schedule. AOC plans to determine if it can reduce 
the amount needed for this contractual support; we will keep the 
Subcommittee apprised of this situation. 

Proposed Completion and Opening Dates Have Held Steady and Construction 
Has Progressed, but Risks and Delays Threaten the Project's Current 
Schedule: 

The proposed completion and opening dates in the CVC project's schedule 
have remained about the same since the Subcommittee's last CVC hearing, 
and work on the project has continued to progress, but risks have 
materialized, delaying several important activities and threatening the 
project's current schedule. Most important, a problem with a component 
of the fire protection system was identified and has now been resolved. 
At this time, the problem seems to have greater implications for the 
project's cost than for its schedule, but the underlying management 
control issues that it reveals could adversely affect the schedule, 
even though AOC has agreed to take actions that we suggested to enhance 
its management control over the design and completion of the fire 
protection system. In addition, risks have led to problems in a number 
of areas, such as the HVAC systems, the gift shops, and the exhibit 
gallery, causing delays in these activities and increasing the risk of 
delay for the project as a whole. For example, the proposed opening of 
the exhibit gallery was deferred about 3 months--to June 29, 2007-- 
after the team learned that it must have a certificate of occupancy 
before the artifacts for display can be delivered and installed. The 
indicators of progress that we have been tracking for the Subcommittee 
showed mixed results during June, but the improvements in some are not 
sufficient to offset our concerns about the risks and uncertainties and 
delays. Overall, we have diminished confidence in the likelihood that 
the team will be able to meet its currently proposed opening dates. As 
noted, we plan to reassess the project's schedule and report our 
results to the Subcommittee in September. 

AOC's Proposed Completion and Opening Dates Have Remained about the 
Same: 

According to the June 2006 project schedule, the base CVC project will 
be completed in May 2007 (except for the exhibit gallery) and the House 
and Senate expansion spaces will be completed in August 2007. These 
dates are about the same as those indicated in the May 2006 schedule. 
Moreover, according to both schedules, the base project will be opened 
in July 2007 and the expansion spaces will be opened in August 2007-- 
time frames that AOC believes will accommodate possible additional 
delays and allow start-up time for operations. 

According to the June 2006 schedule, most of the physical construction 
work in the CVC, the East Front, and the expansion spaces will be 
completed by December 31, 2006; however, some work extends into 2007-- 
as far as April 2007 for the exhibit gallery and March 2007 for the 
gift shops, certain East Front mechanical work, and the installation of 
wayfinding signage. Certain other construction work, such as the 
completion of space for the Capitol guide service, East Front finish 
work, and seating installation in the auditorium, also extends into 
2007. Neither the CVC nor the expansion spaces can be opened until the 
Chief Fire Marshal has completed acceptance testing for the fire 
protection and life safety systems, now scheduled for May 2007 for the 
CVC and August 2007 for the expansion spaces. The Chief Fire Marshal 
plans to issue a temporary certificate of occupancy for the CVC's base 
building when he completes his testing of it and a final certificate 
after he completes his testing of the expansion spaces and limited 
retesting of the CVC's base building. AOC believes that it may be able 
to shorten some of the time scheduled for testing the fire protection 
system and that it may be able to open segments of the expansion spaces 
earlier than August 2007. As we have discussed in previous CVC 
testimonies, AOC is continuing to explore this possibility. 

Construction Work Is Progressing: 

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 June 30, the overall CVC 
project was about 84 percent complete and the sequence 2 work was about 
74 percent complete--up from about 82 percent and 71 percent, 
respectively, as of May 31. 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 chilled water 
systems were flushed, and chilled water began flowing from the Capitol 
Power Plant to the CVC this week. The sequence 2 contractor expects to 
have dehumidified air in the exhibit gallery by around mid-August. In 
addition, the sequence 2 contractor has installed about 95 percent of 
the floor stone in the exhibit gallery and has installed about half of 
the floor stone in the great hall. Millwork in the south orientation 
theater has begun; bulkheads were being hung and finished; and the 
installation of kitchen wall and floor tile was substantially completed 
on the lower level. On the upper level and in the auditorium, 
mechanical, electrical, and plumbing rough-ins were substantially 
completed. Furthermore, the CVC team and AOC's Fire Marshal Division 
have continued resolving issues associated with the CVC's fire 
protection system. 

* Surface work continued, including the installation of (1) stone 
pavers above the CVC, (2) stone steps on the concrete base slab between 
and around the trees planted alongside the auditorium, and (3) the 
skylight structure in the north opening above the great hall. Work on 
the House connector tunnel has also continued. 

* Wall stone installation has now been fully completed in the food 
service area; all but four pieces have been installed in the great 
hall; and installation has progressed substantially in the East Front 
basement and plaza levels, atriums, and auditorium. As of last week, 
the sequence 2 contractor had installed 99 percent of the interior wall 
stone in the CVC itself, excluding the atrium areas, the East Front, 
and the tunnels. 

* On the East Front exterior, AOC and its construction management 
contractor reported, the center steps have been reinstalled over new 
waterproofing material, and air-handling equipment has been placed on 
the East Front penthouse area. 

* In the House and Senate expansion spaces, progress was made in 
installing and priming drywall; installing mechanical, electrical, and 
plumbing systems; and inspecting wall and ceiling close-ins. 

Risks Associated with the Fire Protection System Pose the Greatest 
Challenge to the Project's Schedule: 

According to the project's June 2006 schedule, the completion date for 
the fire protection system has not changed, but for a variety of 
reasons, we are concerned that this system is at significant risk of 
delay. Moreover, delays in completing this system could directly affect 
the CVC's completion date. Specifically, the activities associated with 
the fire protection system now constitute the single longest path 
through the project's schedule, meaning that each day the system's 
completion is delayed, the CVC's completion could also be delayed. 

Our analysis indicates that progress on the fire protection system has 
been affected by communication and management issues, despite the 
team's various efforts to coordinate activities and prevent problems, 
as well as identify and resolve problems. A number of issues or 
"surprises" have occurred, requiring unanticipated changes to the fire 
protection system, the interrelated security system, the schedule, or a 
combination of these elements. The changes include adding control 
panels for the fire alarm system in the expansion spaces, changing the 
specifications for the programming of the fire alarm system, adding 
activities to the schedule for the fire alarm system, and changing the 
sequence of activities associated with the fire alarm system. AOC and 
its construction management contractor have attempted to avoid problems 
such as these by such means as holding biweekly or weekly meetings with 
the CVC team and AOC's Fire Marshal Division and by meeting with 
representatives of the U.S. Capitol Police when specific security 
issues arise. In our opinion, these biweekly or weekly meetings--which 
started in early 2005 and are chaired by a senior engineer with AOC's 
construction management contractor--have generally helped to identify 
and resolve the specific issues being addressed. AOC's weekly risk 
management meetings have also been helpful in identifying and 
addressing specific risks. However, the U.S. Capitol Police, which is 
responsible for managing the CVC's security system, has not always 
participated in the fire protection meetings and does not participate 
in the risk management meetings. As a result, representatives have not 
always been present to identify issues associated with the interface 
between the security and the fire protection systems. Furthermore, some 
issues have not been addressed because the issues have not been 
included in the meeting agendas or specifically raised. As we reported 
during the Subcommittee's June 28, 2006, CVC hearing, the CVC team has 
not had a comprehensive, prioritized list of system designs that have 
to be approved by AOC's Fire Marshal Division. In addition, although 
the team does address various parts of the fire protection system 
during its progress review, fire protection system, and risk management 
meetings the team is just now developing a comprehensive list of the 
system elements that can be used to (1) discuss their status or (2) 
systematically and effectively identify potential or actual problems 
with the design, installation, or testing of all of the system's 
components. The team is working to develop such lists and expects to 
complete them shortly. The lists should be particularly useful in 
identifying potential issues, including those involving the interface 
between the security and the fire protection systems. 

Notwithstanding the regular meetings between the CVC team and the Fire 
Marshal Division, a problem with a component of the CVC's fire 
protection system recently arose. This component is being installed as 
an alternative to an approach that was originally planned to provide a 
level of protection specified in the life safety code. Designed to 
provide an equivalent level of protection, the alternative approach is 
necessary because the original one could not be accommodated within the 
CVC's design. However, according to AOC's Fire Marshal Division, the 
component--which the sequence 2 contractor has almost completely 
installed--would not provide an equivalent level of protection because 
it does not meet a survivability standard applicable to the original 
system. The CVC team and the Fire Marshal Division resolved this issue 
last week, but additional work is required and additional costs will be 
incurred. The exact impact of the additional work on the project's 
schedule and cost is not yet clear, and AOC expects to have more 
information on both shortly. Moreover, although this issue has been 
resolved, other issues may arise and other changes may be required 
because the design of the fire protection system has not yet been fully 
approved; efforts to resolve open issues for some shop drawings have 
dragged on for several months; installation is still in progress; and 
pretesting and testing of the fire protection system have not yet 
begun. 

We have not fully evaluated all of the circumstances surrounding the 
problem with this component of the CVC's fire protection system. 
However, according to the information we have gathered, issues in at 
least two areas--communication and management--contributed to the 
problem. 

* Communication broke down because certain requirements were not stated 
explicitly in writing, assumptions varied, and information was conveyed 
largely through document exchanges rather than meetings, during which 
the unwritten requirements and differences in assumptions could have 
surfaced, leading to earlier resolution of the problem. According to 
both the CVC team and AOC's Chief Fire Marshal, much of the 
communication problem stemmed from the uniqueness of the CVC and the 
application of the component in question and the fact that the 
situation being addressed is not specifically covered in the life 
safety code and other project-related documents. 

* Management issues also contributed to the problem with the component, 
despite all the efforts of the CVC team' and the Fire Marshal Division' 
to coordinate and successfully address the fire safety issues. The CVC 
team and the Fire Marshall Division have not been able to resolve all 
issues quickly. For example, resolution of the team's shop drawings and 
product specifications for the fire protection system component in 
question has dragged on for over 9 months and is still not complete. 
Resolution of the Fire Marshal Division's comments on some other fire 
protection system components is also taking several months, but a 
recent change in AOC's approach to resolving comments seems to have 
improved the situation. Notably, the Division's comments on the team's 
February 2006 submittal for another fire protection system component in 
the exhibit gallery had not yet been resolved as of last week. At the 
same time, though, the CVC team has been working aggressively to 
resolve the Division's comments on the drawings for the base project's 
fire alarm system, and recently, at the Architect of the Capitol's 
direction, the team and the Fire Marshal Division have been meeting (as 
well as exchanging documents) to discuss the Division's comments on the 
team's submittal for this system. This process appears to be working 
well. 

During the last 2 weeks, we met with AOC to discuss our concerns about 
the fire protection system and suggested that AOC take immediate steps 
to enhance management control over the completion of the fire 
protection system as well as its interface with the CVC's security 
system. In particular, we believe it is important for AOC to determine 
immediately and on an ongoing basis whether other problems with the 
design, installation, or testing of the fire protection system and its 
interface with the security system could have significant adverse 
effects on life safety, functionality, or the project's schedule or 
cost. To complement the team's ongoing efforts, which we believe have 
been quite helpful, we suggested, and AOC agreed, to have weekly 
meetings with key CVC team members and representatives from AOC's Fire 
Marshal Division and the U.S. Capitol Police to discuss all elements of 
the fire protection system and to identify and resolve any concerns, 
problems, or issues associated with all aspects of the system's design, 
installation, pretesting, or final testing, including any quality, 
scheduling, or coordination matters, and to focus on expeditiously 
attaining fully approved designs for all aspects of the system. In 
addition, we asked AOC's Chief Fire Marshal if he could develop his 
plans for acceptance testing of the fire protection system in the next 
few weeks so that the CVC team could factor these plans into its work, 
scheduling, and resource planning. The Chief Fire Marshal agreed and 
said that he has proposed that (1) his Division meet with the CVC team 
and the U.S. Capitol Police to identify potential submission items; (2) 
all submission items be tracked in weekly meetings; and (3) the 
submission items be prioritized for review and resolution. In addition, 
both AOC and a U.S. Capitol Police representative agreed that 
participation by the U.S. Capitol Police in more of the team's weekly 
meetings should prove helpful. Although it may be impossible to prevent 
all problems or surprises, we believe that these steps, if effectively 
implemented by all parties, can reduce the risks associated with the 
fire protection system's completion and the system's interface with the 
CVC's security system and identify problems early enough to minimize 
their consequences. 

Other Risks Have Materialized, Delaying Activities Important to the 
Project's Completion: 

Although the scheduled completion date for the CVC has remained about 
the same as we reported at the Subcommittee's June 28 hearing, problems 
in a number of areas have either delayed or could delay activities 
whose late completion could adversely affect the project's overall 
completion. For example, according to the construction management 
contractor, the date for the air-handling units to be mechanically 
ready slipped by 2 weeks because of further problems in completing 
tunnel pipe insulation work, and efforts to close in the ceiling in the 
upper-level orientation and security lobby slipped by 3 weeks because 
of problematic sequence 1 work that required remediation. According to 
the project's June schedule, additional delays in these activities of 
15 and 25 workdays, respectively, could further delay the project's 
overall completion. In addition, a delay of as little as 2 workdays in 
completing the gift shops--whose design, AOC says, has now been agreed 
upon--could affect the project's overall completion date. As we will 
discuss later in our testimony, several other activities that are 
important to meeting the CVC's May 2007 scheduled completion date have 
also been delayed. 

Several activities important to completing the House and Senate 
expansion spaces have also been delayed since the Subcommittee's last 
CVC hearing. For example, AOC's construction management contractor 
reported design-related delays of about a month each in activities 
involving a custom light fixture, a concrete ramp, and a special fire 
suppression system. Furthermore, the sequence 2 subcontractor doing the 
expansion work identified other concerns that could delay the 
completion of its work, some of which could affect the CVC's opening. 
For example, the subcontractor reported being instructed to stop 
certain work in the U.S.Capitol Police's command center pending the 
resolution of an issue involving the facility's fire protection system. 
The subcontractor also reported that a lack of humidity controls, 
caused by the delay in getting the air-handling units operational, 
could delay certain casework and ceiling tile installation. 

Finally, although not critical to the CVC's opening, work being done to 
connect the Library of Congress's Jefferson building to the tunnel 
linking it with the CVC may fall behind by as much as 53 calendar days 
because of an asbestos problem. However, the contractor believes that 
it may be able to recover some of this time after the asbestos 
abatement work is completed. 

Indicators of Construction Progress Show Mixed Results: 

The four indicators of construction progress that we have been tracking 
for the Subcommittee show mixed results since the Subcommittee's June 
28 CVC hearing. An update on these indicators follows: 

Sequence 2 contractor has continued to miss most milestones. Starting 
with the Subcommittee's June 2005 CVC hearing, at the Subcommittee's 
request, we and AOC have been selecting and tracking sequence 2 
milestones to help the Subcommittee monitor construction progress. 
These milestones include activities that were either on the project's 
critical path or that we and AOC believe are critical to the project's 
timely completion. As figure 1 shows, the sequence 2 contractor has 
generally missed these milestones. For today's hearing, the contractor 
met 2 of the 8 milestones that were due to be completed, according to 
the project's June 2006 schedule, and for both, the work was completed 
ahead of schedule. However, the contractor was late in meeting 2 other 
milestones and had not met the remaining 4 milestones as of July 31. 
(See app. I.) The sequence 2 contractor attributed the slippages to a 
number of factors, including the need to do remedial or other work 
first, the work itself or necessary preceding work taking longer than 
expected, and a resequencing of work by the contractor. 

Figure 1: Sequence 2 Contractor's Progress in Meeting Selected 
Milestones as of CVC Hearing Dates: 

[See PDF for image] 

Source: Sequence 2 contractor, AOC and its construction management 
contractor, and GAO. 

[End of figure] 

In total, AOC's construction management contractor reported delays in 
17 of 24 critical and near-critical paths that AOC's construction 
management contractor identified as important to meeting the base 
project's overall completion date.[Footnote 4] According to AOC's 
construction management contractor, delays occurred in, but were not 
limited to, the utility tunnel, East Front, orientation theaters, 
exhibit gallery, certain elevator installations, the upper level 
assembly room, the atrium, and the Library of Congress tunnels. 
According to the CVC team, these other delays were attributable to such 
factors as water leaks, deficient sequence 1 work, changes in the 
sequence of work activities by the sequence 2 contractor, the need to 
do lead abatement work, and inaccessible work areas. Even more 
important than the individual delays themselves, however, is their 
likely impact on the CVC team's ability to complete construction work 
on schedule. So many activities have fallen behind schedule that 
relatively short additional delays could push the CVC's overall 
completion date further back. The number of critical and near-critical 
paths increased from 23 in the project's May schedule to 24 in the June 
schedule, and a number of the activities that slipped in June had also 
slipped in the May schedule. 

Value of completed work increased in June, but trend continues to 
indicate completion in late spring or summer of 2007. Another indicator 
of construction progress that we and AOC's construction management 
contractor have been tracking is the value of the completed 
construction work billed to the government each month. Although the 
sequence 2 contractor's billings for June were about $2.2 million 
higher than for May, both we and the construction management contractor 
believe that, overall, the sequence 2 contractor's monthly billings, 
including the bills for March through June 2006, indicate that AOC is 
more likely to finish closer to its currently scheduled completion 
dates than its previously scheduled completion dates. While this 
indicator has some limitations (for example, billings lag behind 
construction), it is generally regarded in the construction industry as 
a useful measure of how likely a project is to be completed on time. 
Figure 2 compares the sequence 2 contractor's billings since May 2003 
with the billings needed to complete construction work on schedule and 
indicates that the sequence 2 contractor is unlikely to finish the 
project until at least late spring or summer 2007 unless the value of 
completed work increases significantly and is sustained at the 
increased level. We believe that such a significant increase will be 
difficult, given the limited number of areas that will be ready for 
finish work at any given time. 

Figure 2: Total Billings by the Sequence 2 Contractor for the Entire 
CVC Project Compared with the Billings Needed to Finish Construction 
Work on Schedule: 

[See PDF for image] 

Source: AOC's construction management contractor. 

Notes: 

1. The early and late lines on this figure reflect the cumulative 
billings that would be required to complete the project through 
contract modification number 110 ($226.8 million total contact value) 
by the early and late finish dates shown in the sequence 2 contractor's 
schedule, which is based on the September 2006 contractual completion 
date. 

2. The actual line reflects the sequence 2 contractor's actual monthly 
billings. 

3. Although bills are typically submitted for payment after work is 
completed, it is often likely that construction work will be completed 
on schedule when the actual billing line falls between the early and 
late lines in the figure. With respect to the CVC, the actual billing 
line has been trending below, and in March 2006 went below, the late 
finish line, where it remained through June 2006. Even with the lag in 
billings, this trend indicates that the amount of work being completed 
each month is not sufficient to finish the project by the previously 
scheduled completion date. 

[End of figure] 

Interior wall stone installation is taking longer than expected, but 
floor stone installation exceeded target. Overall, about 84 percent of 
the CVC's interior wall stone has been installed (in the CVC, East 
Front, atrium areas, and tunnels), according to AOC's construction 
management contractor, and the sequence 2 contractor installed 2,890 
pieces of interior wall stone during the last 5 weeks, about 61 percent 
of its 4,736 piece production target. During the same period, the 
sequence 2 contractor installed about 7,130 square feet of floor stone, 
or about 5 percent more than the 6,770 square feet specified in the 
floor stone installation plan that the contractor recently provided to 
AOC. In addition, 2 of the 8 schedule milestones that we and AOC have 
been tracking for the Subcommittee for today's hearing are related to 
interior wall stone installation, and the sequence 2 contractor 
completed work for one ahead of schedule, but has not yet completed the 
other one, according to AOC's construction management contractor. 
Although the sequence 2 contractor made good progress in installing 
interior wall stone in the base project, it encountered delays in 
installing wall stone in the East Front and atrium areas. According to 
the construction management contractor, the East Front delays were 
attributable to a need for remedial, preparatory, and lead abatement 
work, and the atrium delays were attributable to the need to do 
remedial work and a decision by the sequence 2 contractor to resequence 
work affecting those areas. 

Figures 3 and 4 show the sequence 2 contractor's progress in installing 
interior wall and floor stone since January 23 and February 13, 2006, 
respectively. 

Figure 3: Progress of CVC Interior Wall Stone Installation Compared 
with Targets Set by the Sequence 2 Contractor: 

[See PDF for image] 

Source: AOC's construction management contractor. 

[End of figure] 

Figure 4: Progress of CVC Interior Floor Stone Installation Compared 
with Preliminary Targets Set by the Sequence 2 Contractor: 

[See PDF for image] 

Source: AOC's construction management contractor. 

[End of figure] 

Project's Schedule Remains Vulnerable to Challenges, Risks, and 
Uncertainties: 

As we have indicated during the Subcommittee's previous CVC hearings, 
we believe that the CVC team continues to face challenges, risks, and 
uncertainties in completing the project. In our view, the remaining 
work associated with the fire protection system poses the greatest 
single risk to meeting AOC's July and August 2007 proposed opening 
dates. At this time, we are uncertain whether the 2 to 3 months that 
AOC has added to the schedule for addressing the challenges, risks, and 
uncertainties that continue to face the project--including the fire 
protection system--will be sufficient, particularly given the project's 
history of delays, the difficulties the CVC team has encountered in 
getting effective control over the fire protection system, and the 
large number of near-critical activities that can affect the project's 
overall completion if they incur relatively short additional delays. 
Accordingly, we plan to monitor the actions taken by the CVC team to 
enhance its control over the completion of the fire protection system, 
reassess the project's schedule this summer, and report our results to 
the Subcommittee by mid-September 2006. A brief update follows on the 
challenges, risks, and uncertainties the CVC team continues to face and 
the team's plans for addressing them: 

* Complex building systems remain a significant risk. The CVC will 
house complex building systems, including HVAC, fire protection, and 
security systems. These systems not only have to perform well 
individually, but their operation also has to be integrated. If the CVC 
team encounters any significant problems with them, either separately 
or together, during the resolution of design issues, installation, 
commissioning, or testing, the project could be seriously delayed. The 
risks and uncertainties associated with the fire protection system are 
apparent: the shop drawings for some elements of the system have not 
yet been approved; installation has begun, and issues other than the 
problem we discussed earlier may require resolution. In addition, the 
process for testing the system is not yet clear; the time needed to 
complete these activities is uncertain, and the fire protection system 
must work in tandem with the security system. The unanticipated 
problems that emerged in reviewing the design of the fire alarm system 
and in programming it illustrate the impact such problems can have on 
the project's schedule. Additional delays could occur if the team takes 
longer than expected to get approved shop drawings, if the proposed 
system does not meet the project's design specifications or the life 
safety code, or if the fire protection system does not work effectively 
with the security system.[Footnote 5] Additionally, the Chief Fire 
Marshal noted that delays could occur if the CVC team does not 
adequately pretest the system and correct any problems found during the 
pretesting. On March 23, AOC's commissioning contractor submitted its 
plan for testing the performance of the CVC's smoke control system, 
which is a critical component of the CVC's fire protection system and 
must work properly before the CVC can be opened to the public. As of 
July 27, this plan had not yet been submitted to or approved by the 
Fire Marshal Division. Moreover, as we have previously noted, the Chief 
Fire Marshal's timely completion of the fire protection system's 
acceptance testing depends on his ability to obtain sufficient funding 
for a contractor to help perform the tests. 

* Trade stacking could delay completion. As we discussed during the 
Subcommittee's previous CVC hearings, trade stacking could hold up 
finish work, such as drywall or ceiling installation, electrical and 
plumbing work, plastering, or floor stone installation. This work could 
be stacked because of delays in wall stone installation. Trade stacking 
could also increase the risk of accidents and injuries. Hence, it 
remains important, as we said at previous CVC hearings, for the CVC 
team to closely monitor construction to identify potential trade 
stacking and promptly take steps to address it. The CVC team has also 
identified trade stacking as a high risk. The sequence 2 contractor has 
developed plans that show when various subcontractors will be working 
in each area of the CVC except the East Front, which the sequence 2 
contractor does not expect to be ready for finish work for several 
weeks. According to the sequence 2 contractor, it intends to continue 
meeting regularly with its subcontractors to review and update the area 
plans and to have the area plan for the East Front done before finish 
work begins there. According to the sequence 2 contractor, its area-by- 
area plans have prevented trade stacking to date. 

* Building design and work scope continue to evolve. The CVC has 
undergone a number of design and work scope changes. Since the 
Subcommittee's June 28 CVC hearing, AOC's architectural contractor has 
issued nine design changes or clarifications. As of July 27, 2006, this 
contractor reported, another eight were in process. In addition, since 
the project began, AOC has executed about 100 sequence 2 contract 
modifications for work that was not anticipated.[Footnote 6] Some of 
these changes, such as changes in the exhibit gallery and in the East 
Front, have resulted in delays. Furthermore, although shop drawings 
have been approved for almost all project elements except the fire 
protection system, according to AOC, further design or scope changes in 
various project elements are likely, given the project's experience to 
date. In fact, in reporting on the June schedule, AOC's construction 
management contractor noted that anticipated changes to the House 
expansion space could affect ceiling close-ins. Project design and 
scope changes are typically reflected in the development of potential 
change orders (PCO), many of which result in contract modifications. 
Figure 5 shows the PCOs submitted for consideration for sequences 1 and 
2 since September 2003. Although PCOs are not always approved, they are 
often regarded as a reasonably good indicator of likely future design 
or scope changes that can affect a project's cost and schedule. Even 
more important, the adverse impact of scope and design changes on a 
project's schedule is likely to increase as the project moves toward 
completion. For example, changes in the design of the gift shops are 
likely to affect the project's schedule more adversely now than if the 
changes had been made several months ago. 

Figure 5: Cumulative Number of Potential Change Orders Submitted for 
CVC Sequences 1 and 2 between September 2003 and June 2006: 

[See PDF for image] 

Source: AOC's construction management contractor. 

[End of figure] 

As the figure indicates, new PCOs for sequence 1 were submitted until 
shortly before, and even for several months after, November 2004, when 
AOC determined that the sequence 1 contract work was substantially 
complete. Similarly, PCOs for sequence 2 are still being submitted, and 
we have seen no indication that their submission is likely to stop 
soon. It therefore appears likely to us that some of the design or 
scope changes indicated in PCOs could lead to contract modifications 
that will affect the project's schedule. AOC agrees that it is 
important to minimize the impact of proposed design and scope changes. 

Additional delays associated with the CVC's new utility tunnel have 
resulted, or are likely to result, in additional work or slippages. As 
we have previously testified, the delay in starting up the utility 
tunnel's operations has necessitated the use of temporary humidity 
control equipment for the orientation theaters to avoid damage to 
finish work and ceiling tile. Moreover, utility tunnel delays could 
require additional equipment in other areas, subject certain work to 
risk of damage, or delay finish or ceiling work in areas not suitable 
for the use of temporary humidity and temperature control equipment. 
For example, the CVC team installed ceiling tile in portions of the 
great hall to take advantage of the scaffolding in place, even though 
neither the temperature nor the humidity were controlled in that area. 
According to the CVC team, the installed tile could be damaged if the 
temperature or humidity is not within the specified levels. The CVC 
team has completed the preparatory work necessary to begin running 
chilled water through the CVC utility tunnel and expects to have steam 
running through the tunnel by mid-August. The team expects to have the 
first air-handling unit--which serves the exhibit gallery--providing 
dehumidified air to the exhibit gallery by mid-August. To keep the CVC 
and expansion space finish work on schedule, the team will have to 
either get the other air-handling units operational within the 
necessary time frames or obtain temporary equipment to provide 
conditioned air, where feasible. 

* Opening the CVC and expansion spaces at different times is likely to 
result in a temporary cap on CVC occupancy and could increase costs. 
AOC's current plan to open the CVC in July 2007 before the expansion 
spaces are scheduled for completion is likely to result in a temporary 
cap on CVC visitor occupancy and may necessitate the construction of 
temporary emergency exits for fire and life safety protection.[Footnote 
7] AOC is proposing this sequential approach because it believes that 
conducting acceptance testing for the fire protection system for the 
CVC and the expansion spaces concurrently would delay opening the CVC 
to the public. AOC's proposed July 2007 opening date for the CVC 
depends on the timely completion of work not only on the base project 
but also on the expansion spaces, since certain expansion space work 
must be completed before the CVC's opening. Because certain work on 
both the base project and the expansion spaces has been delayed during 
the last several months, we believe that it will be especially 
important to monitor the progress of construction to determine what 
additional work (and funding) may be needed to meet AOC's planned date 
for opening the CVC, including what temporary work may be required in 
the expansion spaces for the opening to occur before the expansion 
space work is completed. AOC's Chief Fire Marshal has not yet worked 
out the details of how he will conduct his acceptance testing for the 
CVC and the expansion spaces; so the order in which various CVC and 
expansion space areas will be available for opening is not yet clear. 
More information on this sequencing issue should be available by the 
Subcommittee's next CVC hearing because the Chief Fire Marshal expects 
to have his testing plan done soon. 

* Risks from insufficient stone deliveries appear to be diminishing. 
Although wall stone shortages have caused delays in the past, they have 
not recently been a problem. All of the wall stone for the base project 
and atrium areas has been delivered, and AOC does not anticipate a 
problem with the remaining wall stone deliveries. According to the 
construction management contractor, about 3,700 pieces of wall stone 
for the East Front and all of the wall stone for the tunnels still have 
to be delivered. For a time, the sequence 2 contractor did have a 
problem with the delivery of floor stone for the exhibit gallery, but 
that problem has been resolved, and the contractor does not anticipate 
problems with floor stone deliveries for other areas. The sequence 2 
subcontractor doing the House and Senate expansion space work said that 
some wall stone for the expansion spaces has been delivered, and at 
this time he does not anticipate a delivery problem with the remaining 
wall stone. 

Finally, as we have said in previous discussions with AOC, its 
construction management contractor, and the Subcommittee, it will be 
important for AOC to have adequate analysis and documentation of the 
reasons and responsibilities for delays.[Footnote 8] On April 11, 2006, 
AOC executed a contract modification authorizing its construction 
management contractor to have one of its managers who has not been 
involved in the CVC project assess the adequacy of this type of 
information. The manager submitted his report to AOC in early June. He 
reported generally positive findings but also identified desired 
improvements. He made several recommendations to AOC, which AOC has 
generally agreed with and plans to implement consistent with the 
availability of resources. As we have previously stated, we believe it 
is important for AOC to complete its analysis of delays expeditiously 
given the current September 15, 2006, sequence 2 contract completion 
date and the impact this analysis is likely to have on delay-related 
costs. 

Estimated Project Cost and Funding: 

Our most recent estimate of the cost to complete the CVC project was 
made several months ago. At that time, we estimated that the total cost 
to complete the entire CVC project would be about $556 million without 
an allowance for risks and uncertainties and could be as much as about 
$584 million with such an allowance. To date, about $530 
million[Footnote 9] has been provided for CVC construction. This amount 
includes about $3.6 million that was made available for either CVC 
construction or operations and has been approved for CVC construction 
by the House and Senate Committees on Appropriations.[Footnote 10] AOC 
and its construction management contractor have completed their 
reassessments of the cost to complete the project and have concluded 
that the amount of funds provided to date plus the $26 million that AOC 
hopes to receive in fiscal year 2007 CVC construction funds will be 
sufficient to complete the project except for possible delay-related 
costs. (This $26 million in additional funds is the amount our previous 
cost-to-complete estimate showed would be necessary without provision 
for risks and uncertainties.) AOC and its construction management 
contractor acknowledged, however, that in drawing their conclusions, 
they assumed that some funds that have been slated for use for possible 
delay-related costs may have to be used for other purposes, thus 
possibly requiring additional funding for potential delay-related 
costs. As we testified during the Subcommittee's June 28 CVC hearing, 
recent events have raised questions about the sufficiency of the $556 
million cost-to-complete estimate, given that it does not provide an 
allowance for risks and uncertainties. Although recent events suggest 
to us that our previous $556 million estimate may increase, we have not 
changed it yet pending the results of our reassessment of the cost to 
complete the project, which we expect to have by mid-September. 
Notwithstanding our pending reassessment, we have no specific 
indication that the total cost to complete the project will exceed our 
$584 million estimate, which does include an allowance for risks and 
uncertainties. 

In addition, AOC has indicated that it plans to use about $950,000 of 
the fiscal year 2007 general administration appropriations it has 
requested to provide contractual support for its Fire Marshal Division. 
As we stated in our last several CVC testimonies, AOC believes that it 
may be able to reduce the amount of funds it will need in fiscal year 
2007 to provide contractual support for testing the CVC's fire 
protection system and is exploring ways to do so. We plan to monitor 
this situation and report to the Subcommittee as soon as AOC has a 
firmer estimate. 

AOC currently has sufficient contingency funding available to cover 
anticipated possible delay-related costs associated with the asbestos 
problem identified in connection with the work being done to connect 
the tunnel running from the CVC to the Jefferson Building. Even after 
considering use of the contingency to address anticipated possible 
costs for the asbestos problem, AOC would have contingency funding 
available for some additional problems or changes related to the 
Jefferson Building work. We will continue to monitor this work and the 
use of the contingency funds for it. 

Mr. Chairman, this completes our prepared statement. We 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 Bernard 
Ungar at (202) 512-4232 or Terrell Dorn at (202) 512-6923. Other key 
contributors to this testimony include Shirley Abel, John Craig, Maria 
Edelstein, Elizabeth Eisenstadt, Jeanette Franzel, Jackie Hamilton, 
Bradley James, Joshua Ormond, and Scott Riback. 

[End of section] 

Appendix I: Capitol Visitor Center Critical Construction Milestones, 
June 29, 2006-August 2, 2006: 

Activity: Wall Stone Area 3; 
Location: East Front Ground; 
Scheduled completion: 7/17/06; 
Actual completion: 7/15/06[A]. 

Activity: Plaster Walls; 
Location: Orientation Lobby; 
Scheduled completion: 7/18/06; 
Actual completion: 7/25/06[A]. 

Activity: Plaster Ceilings; 
Location: West Lobby Assembly; 
Scheduled completion: 7/19/06; 
Actual completion: 7/25/06[A]. 

Activity: Hang VP Drywall Ceiling; 
Location: Congressional Auditorium, Lower Level; 
Scheduled completion: 7/20/06; 
Actual completion: [B]. 

Activity: Wall Stone Area 6; 
Location: Congressional Auditorium; 
Scheduled completion: 7/20/06; 
Actual completion: [C]. 

Activity: Flush and Treat HVAC Piping; 
Location: CVC; 
Scheduled completion: 7/24/06; 
Actual completion: 6/24/06. 

Activity: Fire Alarm Record Submittal; 
Location: CVC; 
Scheduled completion: 7/31/06; 
Actual completion: [D]. 

Activity: Install AHU-EF-1; 
Location: Mechanical System; 
Scheduled completion: 8/01/06; 
Actual completion: [E]. 

Source: AOC's June 2006 CVC sequence 2 construction schedule for the 
scheduled completion dates and AOC and its construction management 
contractor for the actual completion dates and reasons for missing 
milestones. 

[A] Work noted as substantially complete by contractor. 

[B] Preceding work took longer than expected. 

[C] Work delayed by concrete tolerance issues related to sequence 1. 

[D] Contractor needed to incorporate a revised sequence of operations 
specification recently received from AOC, and other issues took longer 
than expected to resolve. 

[E] Work was resequenced after schedule was updated in June and is now 
expected to be done in late August. 

[End of table] 

FOOTNOTES 

[1] GAO, Capitol Visitor Center: Update on Status of Project's Schedule 
and Cost as of June 28, 2006, GA0-06-827T (Washington, D.C.: June 28, 
2006). 

[2] Trade stacking can occur when workers from different trades, such 
as stone masons, electricians, plumbers, or plasterers, have to work in 
the same area at the same time to meet a schedule, sometimes making it 
difficult to ensure sufficient space and resources for concurrent work. 

[3] Since our last CVC testimony, the House and Senate Committees on 
Appropriations approved an AOC request to reprogram about $1 million 
from CVC operations funding to CVC construction. We have not reflected 
this reprogramming in our cost-to-complete estimates or funding figures 
above, but will include this change, as well any other changes we 
believe are appropriate, in our next CVC testimony. 

[4] Construction projects typically have one critical path, which is 
the sequence of activities having the longest duration through the 
schedule. There is no slack time associated with these activities, 
meaning that a delay in a critical path activity will delay the entire 
project unless a way is found to reduce the time required for other 
activities along the critical path. Some projects have multiple 
critical paths simultaneously; in practice, the CVC had what 
essentially amounted to two concurrent critical paths in May--(1) 
acceptance testing of the fire protection system and (2) fit-out of the 
gift shops. In June, there was one critical path--acceptance testing of 
the fire protection system. Generally, the more critical and near- 
critical activities a project has, the greater is the risk of late 
completion because there are more opportunities for slight delays that 
can adversely affect the project's completion. 

[5] According to the sequence 2 subcontractor that is fitting out the 
House and Senate expansion spaces, the delays in getting approved shop 
drawings for the fire protection system have already postponed ceiling 
close-ins in the expansion spaces, and AOC believes that further such 
delays, along with possible requests for design changes, pose the 
greatest risks to the completion schedule for the expansion spaces. 

[6] These data exclude sequence 2 contract modifications for work that 
was planned but not included in the sequence 2 base contract. Examples 
include the fit-out of the House and Senate expansion spaces, the 
construction of the utility tunnel, and the purchase and installation 
of food service equipment. 

[7] According to AOC, the CVC's occupancy at any one time would be 
temporarily limited to 3,500, compared with about 4,200, the normal 
anticipated occupancy level, until acceptance testing of the fire 
protection system for the expansion spaces has been completed. Although 
AOC anticipates the need for some temporary work, it does not believe 
that the associated costs will be substantial. 

[8] See for example: GAO, Capitol Visitor Center: Effective Schedule 
Management and Updated Cost Information Are Important, GAO-05-811T 
(Washington, D.C.: June 14, 2005). 

[9] See footnote 3. 

[10] Public Law 108-447, enacted on December 8, 2004, provided that up 
to $10.6 million (reduced to $10.5 million by a subsequent budget 
recission of $84,800) could be transferred from AOC's Capitol Building 
appropriation account for the use of the CVC project. The use of the 
amount transferred is subject to the approval of the House and Senate 
Committees on Appropriations. AOC has now received approval to obligate 
the entire $10.5 million, which we will discuss further in our next CVC 
testimony. 

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