	Schedule Milestones and Management

AOC and its major construction contractors have moved the CVC project  forward since the Subcommittee’s June 14 hearing, although the majority  of the selected milestones scheduled for completion by today’s hearing  have not been completed on time. AOC and its construction management contractor are  assessing the situation and expect to have more information on this  problem within the next month. According to AOC’s construction management contractor, both the  project’s May and June 2005 master schedules (1) reflect significant  improvement in the linkage of interrelated tasks, although the contractor  recognizes that more work needs to be done in this area and (2) generally  provide sufficient information to manage the project’s resources. However, we  still have concerns about the extent to which the schedule links related  activities, which the construction management contractor has agreed to  address, and about whether AOC’s September 15, 2006, target date for  opening the facility to the public is realistic. For the following reasons, we  continue to believe that the project is more likely to be substantially  completed in the December 2006 to March 2007 time frame than by  September 2006:    Because of unforeseen site conditions and other problems, AOC’s  construction contractors have had difficulty meeting a number of  milestones. Last week, we began to update our risk assessment of the project’s  schedule and plan to have this update completed in September. While  monitoring the CVC project, we have identified a number of risks and  uncertainties that could have significant adverse effects on the project’s  schedule and costs. Although AOC  has started to plan and prepare for CVC operations, as we indicated in our  May 17 and June 14 testimonies, it has not yet developed a schedule that  integrates the construction activities with the activities that are necessary  to prepare for operations. First, the operations planning  contractor’s scope of work includes both the design of certain space  within the CVC project and the wayfinding signs that are to be used within  the project, and the timing and content of this work needs to be  coordinated with CVC construction work. Second, about $7.8 million is  available for either CVC construction or operations, and it will be  important for AOC to balance the need for both types of funding to ensure  optimal use of the funds. Project Costs and Funding

As we said during the Subcommittee’s May 17 and June 14 hearings, 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 $37 million we have suggested be allowed for  risks and uncertainties, we believe that, to complete the construction of  CVC’s currently approved scope, AOC is likely to need more funds in fiscal  years 2006 and 2007 than it has already received and has requested. Although the exact amount and timing of AOC’s needs are not clear, we  believe that between $5 million and $15 million of this $37 million may be  required in fiscal year 2006. First, coordination within the CVC project team and between the team and  AOC’s Fire Marshal Division has been an issue, especially with respect to  the project’s fire protection systems. Recommendations for Executive Action

To ensure that (1) Congress has sufficient information for deciding when  to open CVC to the public and (2) planning and budgeting for CVC  construction and operations are appropriately integrated, we recommend  that the Architect of the Capitol take the following two actions:  In consultation with other appropriate congressional organizations,  provide Congress with an estimate of the additional costs that it expects  will be incurred to open CVC to the public by September 15, 2006, rather  than later, such as after the completion of the House and Senate expansion  spaces.
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 Capitol Visitor Center (CVC) project's schedule since Congress's June 14 hearing on the project. We will also discuss the project's costs and funding, including the potential cost impact of schedule-related issues. 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 AOC's Chief Fire Marshal and CVC project staff, including AOC, its major CVC contractors, 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

AOC and its major construction contractors have made progress on the project since Congress's June 14 hearing, but work on some of the selected milestones scheduled for completion by today's hearing is incomplete; some work has been postponed; and some new issues have arisen that could affect the project's progress. Largely because of past problems, remaining risks and uncertainties, and the number of activities that are not being completed on time, 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. AOC and its construction management contractor have continued their efforts to respond to two recommendations we made to improve the project's management--having a realistic, acceptable schedule and aggressively monitoring and managing adherence to that schedule. However, we still have some concerns about the amount of time scheduled for some activities, the extent to which resources can be applied to meet dates in the schedule, the linkage of related activities in the schedule, and the integration of planning for completing construction and starting operations. Since Congress's last CVC hearing, AOC has engaged contractors to help it respond to two other recommendations we made--developing risk mitigation plans and preparing a master schedule that integrates the major steps needed to complete construction with the steps needed to prepare for operations. AOC has also been taking a number of actions to improve coordination between the CVC project team and AOC's Fire Marshal Division. Insufficient coordination in this area has already affected the project's schedule and cost, and could do so again if further improvements are not made. We continue to believe that the project's estimated cost at completion will be between $522 million and $559 million, and that, as we have previously indicated, AOC will likely need as much as $37 million more than it has requested to cover risks and uncertainties to complete the project. At this time, we believe that roughly $5 million to $15 million of this $37 million is likely to be needed in fiscal year 2006, and the remainder in fiscal year 2007. In the next 2 to 3 months, AOC plans to update its estimate of the project's remaining costs. We will review this estimate and provide Congress with our estimate together with information on when any additional funding is likely to be needed. During the next several months, AOC is likely to face competing demands for funds that can be used for either CVC construction or operations, and it will be important for AOC to ensure that the available funds are optimally used. Finally, we are concerned that AOC may incur costs to open the facility to the public in September 2006 that it would not incur if it postponed the opening until after the remaining construction work is more or fully complete--that is, in March 2007, according to AOC's estimates.