CVC Contract Sparks Criticism

Posted April 25, 2003 at 6:25pm

As Capitol Visitor Center construction reaches a critical phase with the award of the sequence two contract, Members are blasting the Architect for communication and management deficiencies — leading some to fear that the project’s achievements could get lost amid news reports of cost overruns.

The relevant House and Senate oversight committees were not told that Manhattan Construction Co. was awarded the second phase contract for $144.3 million prior to its announcement a week and a half ago.

“This is news to me. Obviously it would have been nice if some of us would have been informed of this so we don’t have to hear it through the media,” said Rep. Ray LaHood (R-Ill.), a member of the Appropriations subcommittee on the legislative branch.

Apparently the full committee wasn’t notified either. “The contract announcement was mishandled by the Architect’s office. The committee would rather be properly notified about the contract award than read about it in the press,” said Appropriations spokesman John Scofield.

LaHood isn’t the only frustrated Member. And his assertion that the communications issues in AOC Alan Hantman’s office are endemic suggest a bigger problem for the Architect.

“It’s part of the way the Architect has run the office and in large part why he has had difficulties with Members of Congress, in the House and Senate. We find out more details about these projects from the local press than from the Architect,” LaHood added.

CVC spokesman Tom Fontana responded that the award was given while some of the communications staff was on leave. “Unfortunately, as a result, the press release was distributed before all the relevant oversight committees were informed of the contract award. We regret the error, but we have maintained, and we will continue to maintain, open lines of communication with leadership and staff through weekly coordination meetings, through distribution of our weekly CVC construction summary, through Friday morning site walks for Members and Staff and through regular, and often daily, correspondence.”

The $144 million contract awarded to Manhattan was 10 percent to 20 percent higher than the figure Fontana gave a few months ago when asked how much the Architect expected the second phase would cost. At the time he said an exact number couldn’t be given because of procurement sensitivities, but he put the total in the $120 million range.

After the pricing proposals from the finalists came in higher than anticipated, appropriators and members of the leadership were told last month that the project could need an additional infusion of funds.

At a Senate hearing last month, Hantman defended the CVC’s overall costs, maintaining that numerous construction projects in the Washington region are driving up costs. He also said some of the unobligated funds were needed for unforeseen obstacles, including inaccurately documented utility lines.

The project’s almost universal support on the Hill virtually guarantees that Congress will cover its additional expenses. It’s the Architect’s own support that has come sharply into question.

‘Serious Reservations’

In a scathing April 14 letter, House Appropriations Chairman Bill Young (R-Fla.) and ranking member David Obey (D-Wis.) told the Architect that they would allow the AOC to obligate $145.7 million for the second phase construction but only with “serious reservations” due to Hantman’s insufficient management.

In doing so, the committee put five stringent conditions on the execution of the contract, including forcing the AOC to give the committee monthly financial reports, which also must address anything that could cause the project to exceed its “budget, schedule, or diminish quality.” The panel also ordered a General Accounting Office probe and will hold a hearing to review the findings in early June.

The letter went on to note that the Architect was requesting obligating authority without a final “cost-to-complete” estimate and that the $373.5 million total price tag for the visitor center could be “significantly higher than estimated.”

More telling, however, in terms of Hantman’s long-term relations with Congress was Young and Obey’s comments on the AOC’s modus operandi with the committee.

“It was not long until we discovered that you and your staff had ignored the prerogatives of this Committee and we have been fighting an uphill battle ever since for truth in budgeting and execution,” the letter read.

“It is unfortunate that we must find ourselves in such a situation and look to you to correct the management of this project as we move on from here. … The Committee intends to make it abundantly clear that we anticipate your responsiveness to our inquiries to be nothing but the fullest.”

But a leadership aide defended the AOC’s outreach efforts, at least among the bicameral, bipartisan leadership team, which the aide described as a “Herculean effort.” The aide described almost a barrage of details about every facet of construction to a CVC working group that includes House and Senate leaders from both parties.

“We are kept remarkably well informed. The minute the contract was awarded, I was informed by e-mail,” the aide said, adding that appropriators often think the Architect tends to “play fast and loose.”

But inadequate communications seem to extend to committees beyond House Appropriations.

“To not keep people in the loop who are supportive of the projects and want to be supportive of their efforts is just very disturbing,” said an aide on another oversight committee.

“This is the most important addition to the Capitol in a generation and will probably be the last major addition. This is a way for people to understand the historical significance of the Capitol. And that’s not being communicated,” the aide said. “Nothing outside the rising costs is getting through. It just makes everyone look bad.”

Negative Headlines

Up until this point in the four-plus-year project, news coverage came almost exclusively from Hill publications with relatively narrow audiences. When media outlets outside Washington did cover CVC construction, they mostly painted broad strokes about the features for visitors and the project’s historical significance.

But the storyline has started to shift.

The bad news started to pour last week with a New York Times piece on the second phase award — headlined “At the Capitol, a Big Dig’s Cost Draws Critics” — that focused almost entirely on the project’s escalating costs. And insiders on the Hill are nervously awaiting an upcoming piece on NBC expected to look at the project’s growing price tag.

Worry is starting to take hold that reports of escalating costs will all too easily fit into negative perceptions about Congress feathering its own nest — even though the vast majority of the 588,000-square-foot subterranean center is designated for amenities and exhibition space for visitors to learn about the institution.

And although news organizations are bound to focus on the fact that the CVC was originally projected to cost $265 million when it was approved in 1999, the jump to $373.5 million came after two large infusions that changed the project’s scope. After Sept. 11, 2001, $38.5 million was added for security upgrades and $70 million was later added to build out 170,000 square feet of “shell space” for use by the House and Senate that was originally designated to be left unfinished.

Although a supplemental appropriation is widely expected soon, and the Young-Obey letter explicitly referred to the likely need for one, so far not a dime of the cost increases reflects cost overruns.

That did not prevented Citizens Against Government Waste from issuing a press release chiding the CVC as a “boondoggle.”

Other stories are sure to follow, and people on the Hill maintain that much of the bad press is unfounded and could be easily averted with an effective communications strategy.

‘Short on Details’

To this point, much of the information on the project has been delivered through AOC’s Web site, primarily consisting of weekly construction updates.

“They actually do provide a fair amount of detailed information in terms of the actual ongoing construction of that day,” the committee aide said. “But they are obviously short on details as to the longer-term plans and the long-term target dates.”

Indeed, there has been little in the way of public disclosure of the milestones that must be achieved to reach the target “functionally complete” date of Jan. 20, 2005, for the presidential inauguration. Requests going back almost two years for a rough schedule were never fulfilled by the Architect’s office.

Fontana said earlier this year that a schedule would be available once the phase two contractor was selected.

CVC officials have insisted that the project is on time, even though events on an internal timeline provided to contractors have moved.

For example, the first statement Hantman made in the release announcing the sequence two contact boasted of its “timely award.” But internal documents show otherwise.

Manhattan Construction was told April 18, a Friday, that it had won the contract (although the news release, dated for that day, was inexplicably not sent out until Sunday, April 20). At the hearing last month, Hantman said the contract would be awarded in April.

However, Fontana said in January that the contract would be granted in late February or early March. That was at least the second time the date of the award was pushed back.

In a “summary schedule” given to contractors last October the contract was set to be awarded in mid-March. On the same summary schedule eight months prior, the sequence two contract was set to be awarded in the beginning of January 2003.

But even though the second phase contract was awarded four months after a February 2002 schedule said it would be, there has been no corresponding movement of the end date.

On the same February 2002 timeline, the sequence one construction was supposed to be completed in September 2003. That date was pushed back to mid-February 2004 in the timeline released last October. The schedule for site utility work was similarly extended.