General Services Administration

Better Data and Oversight Needed to Improve Construction Management Gao ID: GGD-94-145 June 27, 1994

The General Services Administration's (GSA) construction program continues to be plagued by major problems. Construction contracts experience substantial cost growth; many contract changes that contribute to cost growth are authorized to overcome design and planning problems; and incomplete and inaccurate data--combined with a lack of criteria for measuring and evaluating cost-growth--impede effective program oversight. These problems are not new. In fact, GSA has been criticized repeatedly for problems linked to the management and administration of contract modifications. GSA has tried to improve the management of the construction program and avoid some of the problems that have contributed to contract modifications. Without sustained attention to better design and planning and improved data, however, GSA can expect to continue to experience huge cost increases on its contracts and will not be in a good position to head off problems before they occur.

GAO found that: (1) GSA has obligated over $1.4 billion for major construction projects in the last 4 years; (2) from fiscal year (FY) 1988 through the first half of FY 1993, 51 percent of new construction contracts exceeded their 5-percent cost growth estimates, and 56 percent of the repair and alteration contracts exceeded their 7-percent cost growth estimates; (3) 43 percent of GSA construction contracts had cost growth of 10 percent or more; (4) GSA officials believed that a large part of the cost growth was due to exercising contract options rather than unanticipated problems; (5) 70 percent of the cost growth on the 12 contracts reviewed was due to design and planning problems; (6) according to GSA officials, design and planning problems occurred because of architect-engineering (A-E) firms' errors and omissions, poor communication between GSA, A-E firms, and tenants, limited GSA design reviews, and changes in tenants' needs and technology; (7) GSA lacks readily available and complete management information for identifying potential problems and evaluating the reasons why changes occur; (8) GSA has not been able to resolve its construction management problems despite 10 years of effort to improve the program; and (9) GSA has taken actions, including a new information system, to improve construction oversight and reduce the number of costly construction modifications.


Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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