	Background

The judiciary and GSA are responsible for managing the multibillion-dollar  federal courthouse construction program, which is designed to address the  judiciary’s long-term facility needs. Actual Costs of Courthouse Projects Can Vary Significantly from Estimates Provided to Congress, and Changes Are Not Consistently Explained

The actual costs for courthouse construction projects completed since  fiscal year 1998 varied from the estimates provided to Congress at the  design and construction phases. For many projects, the estimated cost and  proposed building size changed between the design and construction  phases, but GSA often did not indicate that these changes had occurred or  explain the reasons for them in the prospectuses and fact sheets it supplied  to Congress. For the 32 projects that had a total cost estimate provided to  Congress at the construction phase, the actual cost exceeded the estimate  by an average of 5 percent and ranged from 25 percent below to 52 percent  above the estimated cost. Changes in Scope and Postponement of Planned Construction Start Dates Resulted in Cost Changes for Selected Projects

For the seven projects we reviewed in detail, changes in scope and the  postponement of planned construction start dates resulted in differences  between estimated and actual project costs. Changes made to the U.S. Marshals’ Design Guide increased the costs of  projects in Cleveland, Albany, and Denver. Postponing Construction and Changes in Local Market Conditions Contributed to Changes in Project Costs

Postponing the start of construction and changes in local market  conditions contributed to changes in costs for five of the seven projects we  reviewed. These  strategies included value engineering, modified contracting methods, and a  variety of approaches for involving and communicating with tenant  agencies. Project managers also used value engineering as the primary  method to reduce costs to meet the budget when the initial construction  bids exceeded the project’s budget. The most common change for all  seven projects was substituting less expensive materials for more  expensive materials that were originally called for in the design. Change orders  on a project may increase the time needed to construct the building and  increase the cost of construction. GSA project managers used a variety of strategies,  such as regular meetings and courtroom mock-ups, to identify changes  prior to construction, to involve tenant agencies in planning the courthouse  projects, and to keep them informed about the progress of the projects. Such a practice would be consistent with our  past work on leading practices in capital decision making. Scope and Methodology

The objectives of our report were to (1) compare estimated and actual  costs for recently completed courthouse projects, (2) identify factors that  contributed to differences between the estimated and actual costs of  selected projects, and (3) identify strategies that were used to help control  the costs of selected projects.
Why GAO Did This Study

The General Services Administration (GSA) and the federal judiciary are in the midst of a multibillion-dollar courthouse construction initiative aimed at addressing the housing needs of federal district courts and related agencies. From fiscal year 1993 through fiscal year 2005, Congress appropriated approximately $4.5 billion for 78 courthouse construction projects. GAO (1) compared estimated and actual costs for recently completed courthouse projects and determined what information GSA provided to Congress on changes to proposed courthouse projects, (2) identified factors that contributed to differences between the estimated and actual costs of seven projects selected for detailed review, and (3) identified strategies that were used to help control the costs of the seven selected projects.

What GAO Found

The actual costs of courthouse construction projects exceeded the estimated costs submitted to Congress at the design and construction phases by an average of 17 percent and 5 percent, respectively, and the reasons for the cost changes were not consistently explained. The actual costs were closer to the estimates provided at the construction phase, but the actual cost still varied widely from the estimate for some projects. Both the estimated cost and the proposed building size often changed between the two funding requests. GSA did not always indicate that changes had occurred or explain the reasons for the changes. Including this information would be consistent with leading practices in capital decision making. For the seven projects GAO reviewed in detail, most cost changes resulted from changes to the project's scope or from postponing the start of construction. For example, scope changes called for by security requirements and revisions to the U.S. Marshals Service's Design Guide increased the costs of some projects. Postponing the start of construction also increased costs because of inflation and changes in local market conditions. Factors that led to postponing construction included difficulties with site acquisition and GSA receiving funding later than anticipated. GSA used several strategies to help reduce or control costs for the seven projects, including value engineering, modified contracting methods, and involving tenant agencies. Value engineering was used during design on all projects, and in some cases, resulted in the use of less expensive materials to finish the courthouse interiors, but in other cases resulted in changes that could increase the long-term cost of operating the buildings. Some project managers used modified contracting methods to control costs by reducing the time between the design and construction phases. Project managers also used a variety of approaches for involving tenant agencies in decisions about the building design and informing them about the progress of the project.