MADISON CONTRACT COSTS The James Madison Memorial Building is being built under the phased construction concept, four phases, of which all were fixed-price contracts awarded through the competitive, low bid process. Following is a listing of the four construction contracts, the original award amount and the final or current cost of each, which represents changes, deletions, and additions to the primary contract. Outstanding claims not yet recognized through the obligation of funds process, amount to approximately $3,184,689, thus they are not reflected in the afore-cited cost of Phase IV. However, they have been identified and are being reviewed and negotiated with the contractor to arrive at a proper and equitable settlement. The estimated total cost of the James Madison Memorial Building is presently projected to require the amount authorized and appropriated, $130,675,000. Additional costs incurred in excess of the original contract prices are attributable to such necessary changes as those requested by the Library of Congress, which in most instances were mandated by Congress, amounting to approximately $2,000,000, which result from adjustments in areas involving partitions, computer facilities, electrical services, television facilities, and other numerous miscellaneous changes. Other increases are attributable to existing building changes concerning modifications (increased scope) to the pedestrian tunnel at an estimated cost of $100,000; operation and maintenance of the heating, ventilating, and air conditioning systems in compliance with the beneficial occupancy requirement will cost an estimated $800,000; and approximately $2,400,000 is required due to changes that have resulted from job conditions, unforeseen circumstances and design deficiencies. GAO REPORT ON THE HART BUILDING Mr. BENJAMIN. On August 14, 1978, the GAO issued a report on the Hart Building and found, amongst other things, that: (1) the estimate for interior contract was understated; (2) allowances for contingencies were understated; (3) the inclusion of "deductible alternatives" in the bid package for the interior contract was intended to increase flexibility in awarding the contract rather than to reduce scope and cost of project; (4) the Architect of the Capitol's procedures deviated from standard practices of other Federal agencies concerning selection of the architectural firm, lack of written policies and procedures and inadequate project control systems; problems with cost and time overruns have also been experienced on other Capitol Hill projects. In relation to the Hart Building, have you done anything to correct these alleged deficiencies? Mr. WHITE. Yes, we have. Mr. BENJAMIN. Would you give that to us for the record? [The information follows:] (1) "The estimate for the interior contract was understated." Although several arithmetical errors were detected in the original computation, the final effect of those will not be known until actual bids are received. For example, because limited funds did not permit the solicitation of bids for the entire Phase V (the interior and related work) following the GAO report, it will not be possible to presently determine the accuracy of the total estimate. However, on December 27, 1978 bids were received on a portion of Phase V which had been estimated to cost approximately $21,400,000. The low bid was $16,898,000, or $4,502,000 below the estimate, which would indicate that the GAO assessment of the Architect's estimate for all of Phase V may not be borne out when all costs are finally determined. (2) "The allowance for contingencies were understated." Future contingency allowances will be increased in accordance with the GAO recommendation. (3) "The inclusion of 'deductible alternates' in the bid package for the interior contract was intended to increase flexibility in awarding the contract rather than to reduce scope and cost of the project." The deductible alternatives were included at the request of the Senate Office Building Commission, which has statutory authority over this project, in order to derive exact values of the deductibles rather than estimates so that the Commission could make an informed judgment with regard to selecting various means of reducing scope and cost of the project. (4) "The Architect of the Capitol's procedures deviated from standard practices of other Federal agencies concerning selection of the architectural firm, lack of written policies and procedure and inadequate project control systems". The GAO thus pointed out not that the Architect's selection procedures are deficient, but only that they differ from those of other Federal agencies, whose procedures are mandated by P.L. 92-582, which does not apply to the Architect of the Capitol. Indeed, the GAO states, "As far as we can determine, the selection was made based on demonstrated competence and qualifications, as required by the law. An adequate number of firms were considered, each was given a preliminary interview, and the field was narrowed down to the three final contenders based on the interviews." With regard to the lack of written policies and procedures, again GAO does not assess the Architect's procedures as deficient but simply points out that they differ from other Federal agencies. Indeed, it is believed that the Architect's high standards for architectural and engineering drawings and other services are more stringent than those of other agencies and they are communicated to consultants both verbally and graphically. Nevertheless, though the present procedure is considered quite adequate, there may be merit in written procedures and such a manual is presently in preparation. The Architect of the Capitol agrees fully with the GAO report conclusion that its project control systems were inadequate and, as noted in the report, had already begun corrective action with regard to scheduling. He immediately took steps to tighten these controls with the assistance of outside construction management consultants who have already instituted better methods of cost, scheduling and process control. SELECTION OF ARCHITECTS Mr. BENJAMIN. How many of these five points would apply to the James Madison Library Building? Mr. WHITE. The indications of the manner in which architects are selected is applicable in general. We deviate in a minor way from the manner in which the GSA makes selections, largely through not general advertising. The projects generally on the Hill are well enough known so we haven't felt it was necessary to advertise, and I am referring to the question of selection of architects and engineers. We normally have many more applicants than you would imagine because of the publicity that a project gets when it is known on the Hill. And there is nothing in the law that requires the advertising for our purposes. In my judgment, advertising is a useful thing if you have projects in different parts of the country; local people wouldn't have any way of knowing about it unless some publication of that information was made. Mr. BENJAMIN. How does the GSA advertise? Mr. WHITE. I am not sure. Mr. ELLIOTT CARROLL. Commerce Business Daily. Mr. BENJAMIN. You don't use that publication. Mr. ELLIOTT CARROLL. We do in advertising for public bids for the construction itself. Mr. BENJAMIN. Isn't that a Government Printing Office publication? Mr. WHITE. Department of Commerce. Mr. BENJAMIN. Is it printed by our Government Printing Office and at the taxpayers' expense? Mr. WHITE. That is right. Mr. BENJAMIN. That wouldn't be too costly, would it? Mr. WHITE. No, it is just something we haven't felt necessary. Mr. BENJAMIN. Does GSA advertise for the construction of buildings in the Washington, D.C. area? Mr. WHITE. Yes. Mr. BENJAMIN. And they don't presume they are so well known they don't need to advertise? Mr. WHITE. They do it as a general policy throughout the country, and we have such a small operation here in terms of the number of times that we construct buildings that that particular facet hasn't been used. We follow the so-called Brooks law precisely in all other respects, but because there is that deviation, it was cited as such. Mr. BENJAMIN. Doesn't it allow cliques to be built up, and lead to non-competitive bidding? ARCHITECT SELECTION PROCEDURE Mr. WHITE. That is the implication, of course, and yet the procedure in which it is done would indicate otherwise. Mr. BENJAMIN. What is the procedure? Mr. WHITE. Let's take, for example, the Hart Building. There were undoubtedly about 20 firms that were interviewed. The Senate Office Building Commission, consisting of seven Senators, interviewed the final three firms that had been selected from the original 20, and made the selection, themselves. RECOMMENDATION BY THE ARCHITECT OF THE CAPITOL Mr. BENJAMIN. Do they make the selection after you make a recommendation? Mr. WHITE. They ask for my recommendation; yes. Mr. BENJAMIN. Was the selection based on your recommendation? Mr. WHITE. It was. Mr. BENJAMIN. Is that generally what occurs? Mr. WHITE. I think my recommendation is indeed a strong one because I would be viewed as someone who would have more expertise in knowing about the individuals, and yet advertising wouldn't change that. at. Mr. BENJAMIN. It would bring a lot more bids in, wouldn't it? Mr. WHITE. It would bring a lot more in; yes. Mr. BENJAMIN. And you would have a bigger panorama to look OUT OF TOWN FIRMS Mr. WHITE. That is true. But there are other aspects that we feel are important locally, and that is that it has been our experience, when work is done by firms that are not locally situated, either with a local office or where their sole work is here, that we encounter a lot of difficulty in the design process. Mr. BENJAMIN. When did you last encounter that difficulty? Mr. WHITE. Well, I would say as recently as during the past year. Mr. BENJAMIN. In what building? Mr. WHITE. I guess it is closer to a year and a half. We had some difficulties in the House Office Building Annex No. 2. Mr. BENJAMIN. That was designed by a firm that didn't have an architectural base here? Mr. WHITE. That is correct. Mr. BENJAMIN. That was a firm you had actually picked? Mr. WHITE. NO; in that instance it was a joint venture of two firms which the GSA had selected through their normal procedures, and because, when we asserted jurisdiction over the building, that firm had already begun to do some work for GSA, we felt it was, therefore, appropriate to hire them rather than to start through the process again. Some funds had already been expended, in a sense, in educating them about the building. Mr. BENJAMIN. I think you had about $1.2 million in that expense item, didn't you? DIFFICULTIES WITH COMMUNICATION Mr. WHITE. I think that is approximately correct. So we hired that same joint venture firm, a responsible firm, and good architects, and yet the architectural work was done in Philadelphia, and we had considerable difficulty, even though it is close, especially since it is an alteration kind of work, where information is needed quickly. The needs change rapidly as one becomes more and more familiar with a building, when you begin to open it up so to speak. And we had considerable difficulty- Mr. BENJAMIN. That was unique, though, since you did the work in-house? |