Kennedy Center Facilities: Life-Cycle Cost Analysis and Other Capital-Planning Practices Could Help Minimize Long-term Costs
Fast Facts
The Kennedy Center is a national arts center and a living memorial to President John F. Kennedy. The federal government funds its repairs and renovations, as well as its operations and maintenance—which are expected to cost $40.4 million in FY 2021.
We found that the Kennedy Center generally used key practices in its planning process for repairs and renovations. However, it could do more to ensure that its planning process for future projects is efficient.
We made 5 recommendations, including that the Kennedy Center comprehensively analyze the life-cycle costs of its projects, and update its planning and procurement policies.
Kennedy Center
Highlights
What GAO Found
The John F. Kennedy Center for the Performing Arts partially or fully met most selected practices for capital planning, procurement, and maintaining its facilities, but could take action to help ensure efficiency in future projects. Specifically, in planning for maintaining and renovating its facilities, the Kennedy Center met or partially met six out of seven selected capital planning practices. For example, it developed a capital plan for its portfolio of projects, budgeted for these projects, prioritized these projects, and completed an assessment of its facilities' conditions. The Kennedy Center has not, however, updated its capital planning policies and procedures for over 15 years nor did it comprehensively analyze the life-cycle costs—such as the cost of repair, maintenance, and operations—of its projects, including the recent REACH expansion. Implementing these two selected practices would position the Kennedy Center to ensure that it has a consistent, repeatable process for managing projects effectively and that it is making decisions early in the planning of the project to minimize the long-term costs to the federal government.
Kennedy Center's Original Building with the REACH Expansion
Six of the Kennedy Center's nine highest cost capital projects from 2015-2020 were within 10 percent of the contract award amount, a government benchmark. But GAO found that the Kennedy Center did not have up-to-date procurement procedures or well-documented projects. Without updated procurement policies and procedures in accordance with selected practices, the Kennedy Center could apply its procurement program inconsistently. Further, without complete project documentation, the Kennedy Center lacks reasonable assurance that project requirements are met or that it established traceability concerning what has been done, who has done it, and when it was done. This omission could potentially affect the quality of the product delivered to the Kennedy Center.
The Kennedy Center met most selected practices for operations and maintenance. For example, it developed an operations and maintenance plan, used a specialized information system to help manage its activities, and used automatic control systems to enhance energy efficiency. However, fully defined policies and procedures for its operations and maintenance program would better position the Kennedy Center to meet its mission to provide the highest quality services related to the repair and maintenance of its facilities.
Why GAO Did This Study
The Kennedy Center is a national cultural arts center and a living memorial to President John F. Kennedy. The federal government funds the Kennedy Center's capital repairs and renovations of its facilities, as well as its operations and maintenance, all of which totaled $40.4 million in regular appropriations for fiscal year 2021. The REACH expansion, built using private funds, has increased the Kennedy Center's federally funded operations and maintenance expenses.
GAO was asked to examine how well the Kennedy Center manages its projects. This report evaluates the extent to which the Kennedy Center followed selected practices in its: (1) capital planning, including for the REACH; (2) procurement; and (3) operations and maintenance, including energy efficiency and facility security.
GAO selected criteria from government and industry to review the Kennedy Center's documentation for three projects that GAO selected based on cost. GAO assessed the Kennedy Center's capital planning, procurement, and operations and maintenance actions against selected industry and government practices and interviewed officials.
Recommendations
GAO is making five recommendations to the Kennedy Center: that it conduct life-cycle cost analyses for its projects, update its capital-planning and procurement policies and procedures, establish sound project documentation practices, and define and document operations and maintenance policies and procedures. The Kennedy Center agreed with GAO's recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status Sort descending |
|---|---|---|
| John F. Kennedy Center for the Performing Arts | The President should, as the Kennedy Center begins to update its capital-planning policies and procedures, include a requirement to conduct an alternatives analysis with a life-cycle cost analysis for its capital projects. (Recommendation 1) |
Closed – Implemented
The federal government is responsible for funding the Kennedy Center's major repairs and renovations as well as its operations and maintenance program. We selected criteria from government and industry to review the Kennedy Center's capital planning efforts. We assessed the Kennedy Center's capital planning actions against seven selected industry and government capital planning practices that we identified based on a review of Office of Management (OMB) and Budget guidance and General Services Administration guidance. To learn about the Kennedy Center's capital planning practices including whether these practices included a project alternatives analysis with life-cycle cost analysis for each capital project, we also conducted case studies of three projects (Garage Surfaces Restoration, Terrace Theater Renovations, and Mechanical, Electrical, and Plumbing Modernizations Phase 2) that were selected among the highest cost projects completed from 2015-2020. In May 2021, we reported that the Kennedy Center met two of these selected practices, partially met four of them, and did not meet one of them. The selected capital planning practice that the Kennedy Center did not meet was conducting an alternatives analysis with a life-cycle cost analysis. We found that the Kennedy Center did not conduct alternatives analyses that included life-cycle cost analyses for any of the three projects we examined. We recommended that, as the Kennedy Center begins to update its capital-planning policies and procedures, it include a requirement to conduct an alternatives analysis with a life-cycle cost analysis for its capital projects. In April 2022, the Kennedy Center updated its project management policies and procedures manual to include the requirement for capital projects over $5 million to include an alternatives analysis with a life-cycle cost analysis. Conducting a life-cycle cost analysis would help in selecting the most cost-effective alternatives for maintaining the facilities over the long term. Since the federal government funds the Kennedy Center's operations and maintenance, knowing the life-cycle costs could give Congress a more accurate picture of the Kennedy Center's long-term funding needs.
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| John F. Kennedy Center for the Performing Arts | The President should, as the Kennedy Center begins to update its capital-planning policies and procedures, ensure they fully address all selected capital-planning practices, such as more transparent project prioritization and assessment of facility needs against performance metrics. (Recommendation 2) |
Closed – Implemented
The federal government is responsible for funding the Kennedy Center's major repairs and renovations as well as its operations and maintenance program. We selected criteria from government and industry to review the Kennedy Center's capital planning efforts. We assessed the Kennedy Center's capital planning actions against seven selected industry and government capital planning practices that we identified based on a review of Office of Management and Budget (OMB) guidance and General Services Administration guidance. In May 2021, we reported that the Kennedy Center met two of these selected practices, partially met four of them, and did not meet one of them. One key criterion that it partially met was updating its capital planning policies and procedures to include all selected capital planning practices. We found that the Kennedy Center did not have updated capital planning policies and procedures that included all selected capital planning practices. Kennedy Center officials told us that they had not yet started the process of updating its capital-planning policies and procedures, and that this updating process will require dedicated staff to complete. We recommended that the Kennedy Center update its capital-planning policies and procedures and ensure they address all selected capital planning practices. In May 2022, the Kennedy Center completed the update of its capital planning policies and procedures within its project management policies and procedures manual to address all selected capital planning practices. Updating project management policies and procedures better positions the Kennedy Center to meet the other partially met practices, such as project prioritization and assessment of the facility's needs against performance metrics. With such updates, the Kennedy Center is better positioned to apply a consistent, repeatable process to select projects that meet its most pressing needs and support its mission.
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| John F. Kennedy Center for the Performing Arts | The President should, as the Kennedy Center begins to update its procurement policies and procedures, ensure they fully address all selected procurement practices, such as requiring an acquisition plan and post-project evaluation. (Recommendation 3) |
Closed – Implemented
The federal government is responsible for funding the Kennedy Center's major repairs and renovations as well as its operations and maintenance program. We selected criteria from government and industry to review the Kennedy Center's procurement efforts. We assessed the Kennedy Center's procurement actions against nine selected industry and government procurement practices that we identified based on a review of Office of Management and Budget (OMB) guidance and Project Management Institute guidance. In May 2021, we reported that the Kennedy Center partially met eight of these selected procurement practices and did not meet one of them. One key criterion that it partially met was updating its procurement policies and procedures. We found that the Kennedy Center did not have updated procurement policies and procedures that included all selected capital planning practices. Kennedy Center officials told us that they had not yet started the process of updating its procurement policies and procedures due, in part, to the considerable turnover among the management and staff in the project management office. Therefore, we recommended that the Kennedy Center update its procurement policies and procedures and ensure they address all selected procurement practices, such as requiring an acquisition plan and a post-project evaluation. In December 2021, the Kennedy Center completed the update of its procurement policies and procedures within its project management manual to address all selected procurement practices, such as requiring acquisition plans. With such an update, the Kennedy Center is better positioned to consistently apply leading procurement policies and procedures from project to project.
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| John F. Kennedy Center for the Performing Arts | The President should, as the Kennedy Center begins to update its procurement policies and procedures, ensure they include requirements for reviewing project documentation for each capital project. (Recommendation 4) |
Closed – Implemented
The federal government is responsible for funding the Kennedy Center's major repairs and renovations as well as its operations and maintenance program. We selected criteria from government and industry to review the Kennedy Center's documentation for three projects that we selected based on cost. We assessed the Kennedy Center's procurement actions against nine selected industry and government practices. In 2021, we reported that the Kennedy Center partially met eight of these selected practices. However, it did not meet one selected procurement practice: establishing effective project-documentation practices. Two of three projects we reviewed--Garage Surfaces Restoration and Mechanical, Electrical, and Plumbing Modernizations Phase 2 projects--generally lacked complete project documentation, such as acquisition plans and proposal evaluations. In addition, the Kennedy Center policies and procedures did not state who should review project files and when this review should occur, both of which are important documentation practices based on the procurement practices we identified. Further, the Kennedy Center's procurement policies and procedures manual had not been updated since 2008. Although Kennedy Center officials told us they planned to update their manual, it had not been updated as of January 2021. We recommended that as the Kennedy Center begins to update its procurement policies and procedures that it ensure that they include requirements for reviewing project documentation for each capital project. In December 2021, the Kennedy Center updated its project management policies and procedures manual to include requirements for reviewing project documentation for each capital project. With complete project documentation and effective review practices, the Kennedy Center provides assurance that project requirements are fulfilled and establish traceability concerning what has been done, who has done it, and when it has been done, better assuring the quality of the product delivered to the Kennedy Center.
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| John F. Kennedy Center for the Performing Arts | The President should ensure that the Kennedy Center fully defines and documents its operations and maintenance policies and procedures, such as roles and responsibilities of the different organizational units and staff that run the program. (Recommendation 5) |
Closed – Implemented
In 2021, we reported that the Kennedy Center had not fully defined policies and procedures for its operations and maintenance program. For example, the Kennedy Center had not described the roles and responsibilities of the different organizational units and staff that run the program. Fully defined policies and procedures for its program would better position the Kennedy Center to meet its mission to "provide the highest quality services related to the repair, maintenance, and alteration of its facilities in order to maintain optimum functionality." In addition, fully defined policies and procedures would better position the Kennedy Center to benefit from the institutional knowledge of its staff. Therefore, we recommended that the Kennedy Center fully define and document its operations and maintenance policies and procedures, such as roles and responsibilities of the different organizational units and staff that run the program. In 2022, we confirmed that the Kennedy Center developed two manuals that fully define its operations and maintenance policies and procedures, including the roles and responsibilities of the different organizational units and staff that run the program. This action should help improve the effectiveness of the Kennedy Center's operations and maintenance program by preserving the accumulated institutional knowledge of the program's staff to pass on to new staff needing this information.
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