	Schedule Milestones and Management

AOC and its major construction contractors have made progress since the  Subcommittee’s May 17 hearing. The sequence 2 contractor also continued  work on the utility tunnel. AOC’s sequence 2  contractor completed 3 of the 11 activities listed in appendix 1 as  scheduled for completion by today. According to AOC, the delays in 8 of these  activities were caused by a number of factors, such as unforeseen site  conditions, a design problem, and delays in completing certain masonry  work that had to be completed before other work could be done. AOC  does not expect these delays to postpone the project’s scheduled  September 2006 completion date because it believes that the sequence 2  contractor can recover the lost time. A brief discussion follows of the issues that need  AOC’s priority attention and the current status of AOC’s actions to address  these issues. We will have  a more complete assessment for the Subcommittee by its next CVC  oversight hearing. Furthermore, as we said during the May 17 hearing, we  continue to believe that AOC’s scheduled September 2006 completion date  is optimistic and that the project is more likely to be done in the December  2006 to March 2007 time frame, largely because of past problems, the risks  to the schedule identified during our assessment of it in early 2004, and  future risks and uncertainties facing the project. Aggressive monitoring and managing contractors’ adherence to the  schedule, including documenting and addressing the causes of  delays, and reporting accurately to Congress on the status of the  project’s schedule. On  June 9, the construction management contractor told us that a project  control engineer who had been assigned temporarily to help manage the  project’s schedule would be working full time on the project starting June  13. Developing and implementing risk mitigation plans. Preparing a master schedule that integrates the major steps  needed to complete CVC construction and the steps necessary to  prepare for operations. Although AOC has  started to plan and prepare for CVC operations, as we indicated in our May  17 testimony, it has not yet developed a schedule that integrates the  construction activities with those activities necessary to prepare for  operations. Project Costs and Funding

As we said during the Subcommittee’s May 17 hearing, we estimate that  the cost to complete the construction of the CVC project, including  proposed revisions to its scope, will range from about $522 million without  provision for risks and uncertainties to about $559 million with provision  for risks and uncertainties. For several reasons, we believe that AOC may need additional funds for  CVC construction in the next several months. Thus, while AOC may not need all of the remaining $37  million we have suggested be allowed for risks and uncertainties, we  believe AOC is likely to need more funds in fiscal years 2006 and 2007 than  it has already received and has requested to complete the construction of  CVC’s currently approved scope, although the exact amount and timing  are not clear at this time. Recommendation for Executive Action

Given the development of a new project schedule, the pace at which  sequence 2 change orders are being proposed, and the risks and  uncertainties that continue to face the project, we recommend that, in the  September to November 2005 time frame, the Architect of the Capitol  update the estimated cost to complete the project.
Why GAO Did This Study

This testimony discusses the Architect of the Capitol's (AOC) progress in achieving selected project milestones and in managing the project's schedule since Congress's May 17 hearing on the project. We will also discuss the project's costs and funding, including the potential impact of schedule-related issues on the project's costs. Our observations 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 CVC project staff, including AOC, its construction management contractor, and representatives of an AOC schedule consultant, McDonough Bolyard Peck (MBP). We did not perform an audit; rather we performed our work to assist Congress in conducting its oversight activities.

What GAO Found

In summary, AOC's sequence 2 contractor, Manhattan Construction Company, has met 3 of 11 significant milestones scheduled for completion by today's hearing. The sequence 2 contractor missed the other 8 milestones for several reasons, such as unforeseen site conditions and a design problem. AOC does not expect these delays to affect the CVC project's scheduled September 2006 completion date because AOC believes that the contractor can recover the lost time. Furthermore, certain utility tunnel work is scheduled for completion about 5 months later than previously reported, but AOC does not expect this delay to postpone the project's completion date because AOC plans to use temporary equipment that will allow the project to move forward but will also increase its costs. However, largely because of past problems and risks and uncertainties that face the project, we continue to believe that the project is more likely to be completed in the December 2006 to March 2007 time frame than in September 2006, as shown in AOC's schedule. AOC and its construction management contractor have continued their efforts to address two of the areas we identified during Congress's May 17 CVC hearing as requiring priority attention--having a realistic, acceptable schedule and aggressively monitoring and managing adherence to the schedule. But AOC has not yet developed risk mitigation plans or, as the Subcommittee requested, prepared a master schedule that integrates the major steps needed to complete construction with the steps needed to prepare for operations. Until recently, AOC did not have funding to continue contractual support it had been receiving to help plan and prepare for CVC operations. We continue to believe that these areas require AOC's priority attention and that the project's estimated cost at completion will be between $522 million and $559 million, and that, as we indicated during the May 17 hearing, AOC will likely need as much as $37 million more than it has requested to cover risks and uncertainties to complete the project. We believe that most of these additional funds will be needed in fiscal years 2006 and 2007, although exactly how much will be needed at any one time is not clear. We are recommending that this fall AOC update its estimate of the cost to complete the project.