Mr. FAZIO. I know you have several other points you want to make, but we can begin now with the Joint Economic Committee, since at least two of the witnesses are here, and we will continue with the Architect when they complete their testimony.

Mr. LEWIS. I am not sure what our schedule will be like, but I will at least have questions for the record. As you know, I have interest in a number of items that are going on. I am sorry for my schedule running me in and out.

Mr. WHITE. We will be happy to answer questions.

LIBRARY RESTORATION AND RENOVATION

Mr. FAZIO. George, I am sorry. We ended up having a much more animated discussion among the Subcommittee Chairmen than normal. We don't always have those types of discussions and so we took longer than I had hoped.

You were going to point out three major projects that are underway, one of which you had just discussed, which was the West Front, and you were going on to the others. I am sure the Library is among them. And what is the third?

Mr. WHITE. Yes, one is the Library, and the third one is a description of the Federal Judiciary Building, which, while it isn't under this appropriation, we are asking for funds for lease purposes.

Mr. FAZIO. Please proceed.

Mr. WHITE. All right. Well, the Library, let me report, is within budget still, which is a critical factor, and I might say that after roughly 10 years, we are still within budget. So I am kind of pleased to be able to report that.

Mr. FAZIO. That is putting the best face on it.

Mr. WHITE. Well, I think it is

Mr. FAZIO. The project is 43 months behind.

Mr. WHITE. Well, yes. But on the other hand

Mr. FAZIO. It has slipped 11 months in the last year, at least in terms of

Mr. WHITE. But time is only important in a construction project if it affects operations or affects cost. And in this case, the Library has been in continuous operation, and the cost has been held down, and in a sense, the delay may have been beneficial in terms of cost. Because the most recent contract we awarded was in a very good market. That is not to say delay is acceptable.

Mr. FAZIO. You weren't waiting for low interest rates.

Mr. WHITE. It just happened. That isn't why the delay occurred, but I am just saying that if delay results in an adverse circumstance, it is important. In this case, it has not insofar as I am aware, either in Library operations, which has continued to operate during this period, perhaps at some less efficiency.

Mr. FAZIO. Well, I agree with you. I mean if there were cost overruns and tremendous increases, along those lines, I would be very unhappy, and I guess my only concern now is that we get the project finished.

Mr. WHITE. We now have just two years to go, Mr. Chairman, in terms of the construction that is taking place. We experienced, as

which we hadn't anticipated. There were a number of problems that occurred. But I think we have those all behind us.

Mr. FAZIO. That was the most legitimate, as I remember. There were a tremendous number of pure delays at the Library.

Mr. WHITE. There were.

Mr. FAZIO. There were delays in relocating employees. There was a feeling, I guess, that this project could go on forever and nobody would care.

Mr. WHITE. There were some problems.

Mr. Fazio. And I think to be honest, you have to cut through a lot of that and get it done and try to stay on schedule, at least the latest one that we have agreed to.

Mr. WHITE. We certainly will do that. And there has been a strong effort made to do that. But, as I say, of primary importance are the dollars.

Mr. FAZIO. Right. There have been other problems where there were delays and the dollars climbed at the same time, I am well aware of those.

Mr. WHITE. Exactly. Let me say in that regard that if you recall the design of the so-called courts in fron of the pavilions. We had meetings with you and with the Senate side, and so on, and we weren't sure what that was going to cost.

But as it turns out, we are able to accommodate that within the budgeted amount as a result of a lot of things, including the market conditions.

Mr. FAZIO. The donations as well, I guess. Haven't we had some donations to the Library in terms of some of the shelving and this sort of thing?

Mr. WHITE. I am not sure about that.

Mr. FAZIO. I got that impression from Dr. Billington.

Mr. WHITE. They may have from the standpoint of contributions to their furnishings, but it hasn't affected our construction aspect at all. We are not in a position legally to accept contributions.

Mr. FAZIO. I will insert some questions for the record on the renovation project.

[The questions and responses follow:]

LIBRARY OF CONGRESS RENOVATION

I know your statement outlines the status of the Library of Congress restoration. This project is now over 32 years (43 months) behind schedule. Last year, during hearings, it was 33 months behind schedule. There is constant slippage in this project.

Question. When will it be ready for occupancy? In general terms, what remains to be done?

Some of the delays had been caused earlier by the Library's not completing interim moves on time or making other changes. Has that situation been brought under control?

You have informed the committee on several occasions-during various construction projects that delays cost money. Higher costs, delay claims, etc. Aren't these delays in this project expensive? What can we do to prevent these excessive delays? Response. Yes, delays can be expensive. We are presently experiencing extended time periods for additional administrative salaries and related expenses to complete this project. However, the cost of delays with respect to bonafide claims by Contractors have, thus far, been minimal and have been resolved. There are presently two (2) contracts that are experiencing extended time for completion which may result in potential claims, but it is not known at this time what the exposure may be. We

a position to address the remaining contract once Phase II construction activities commence in earnest.

In addition, it should be recognized that the two primary possible adverse effects of delay have not been experienced in this project, namely, increased total cost or interference with the operation of the Library. The project remains within budget, and relatively normal operation of the Library has been maintained.

In any event, we are faced with a situation with the Library of Congress restoration that prevents us from regaining ground already lost to delays. The hope for the remainder of the project is that of avoiding further delays of the type that have been experienced so far. There are several reasons that delays have occurred; some of which may provide guidance for completing the remainder of this project in a more timely manner and some which may also lend guidance for any projects of this nature that may be undertaken in the future.

The major items contributing to the delays have been outlined in the past, but for the record are enumerated herein, the more significant and obvious factors being: 1. Maintaining each building in a half-open status for use by the public and occupancy by Library staff.

2. Necessity to perform asbestos abatement throughout both buildings that was not originally anticipated and that must be accomplished while portions of the buildings are in use.

3. Logistical problems dealing with arrangements for interim moves and related occupancy activities.

4. Numerous changes to contracts necessitated by unforeseen job conditions; that is a circumstance that is typically inherent in the restoration of older buildings expecially the Thomas Jefferson Building which is nearly 100 years old.

5. Noises, oders and other distractions that are common to the construction industry, but nonetheless, unique to patrons and staff of the Library, and that result in postponement of activities.

6. Phased work with multi-disciplined Contractors attempting to coordinate their work activities within the same areas of the structures.

In order to move the project toward completion and make every attempt to adhere to the most recently established end date of May 1994, we have either implemented or propose to implement certain actions which will enhance the possibility of being successful in our endeavor. With the implementation of these plans, significant progress should be made toward achieving this new goal and thus avoid any further excessive delays. A description of these actions follows:

1. Given the situation of each building being in a half-open status, there must be an understanding by all parties the Library, the Public, the Contractors and we as Managers of the project-of the need to recognize each others' interests, yet share the mutual goal of achieving a completion as expeditiously as possible. This may mean being somewhat tolerant of noises, odors, inconveniences and other activities which lend themselves to the accomplishment of the combination of construction activities and the operation of a Library.

2. Asbestos has been recognized as a significant problem in construction performed thus far and has been identified in various locations of remaining areas of the project. To avert serious delays or interruptions to Contractor's construction activities, funds have been set aside in the project budget to specifically identify and remedy asbestos related conditions which could possibly interfere with project progress. This work is being performed by in-house forces and has provided a head start status to have asbestos abatement performed before Constructors enter an area for construction purposes. Additionally, the major contract for Phase II contains an established allowance for situations requiring involvement by Contractors with respect to asbestos abatement activities.

3. To speed up completion of remaining activities to accommodate interim occupancy moves, certain work will be assigned to the Architect of the Capitol's Construction Branch which can devote resources directly to construction activities, thus freeing-up the Supervising Engineer's human resources for maintenance and repair activities.

4. It is anticipated that unforeseen job conditions and resulting changes will be kept to a minimum in contrast to what occurred during Phase I. To the extent applicable, the Phase I changes have been incorporated into the Phase II construction documents and the number of changes/extras should be substantially reduced. There will, of course, be certain conditions that are unique to Phase II areas of the buildings which will involve changes. As indicated elsewhere in this response, the structure is old and there are intangibles that will

5. The most recent construction contract awarded encompasses the majority of remaining construction associated with the renovation program. All remaining work which includes architectural, mechanical, electrical, fire protection— but excludes air conditioning modernization which is being performed under separate contract and which is limited to mechanical equipment rooms-and also includes Office Colonnade and Office Colonnade Forecourts, is now under the control of the same Contractor. This will permit the Contractor to exercise more control for coordination and interfacing among his contracts. This will also permit us, as the Construction Managers, to more effectively allocate our human resources for the purpose of controlling, directing and responding to the Contractor. Additionally, we are positioned to utilize management tools and techniques such as CPM scheduling and reporting facilities to monitor and modify progress as necessary.

Open buildings, asbestos, logistical problems, changes, noises, oders and other distractions and inconveniences notwithstanding, efforts will continue to be directed toward assuring that the recently established date of May 1994, remains the primary target for completion of the Renovation and Restoration of the Jefferson and Adams Library of Congress Buildings.

Question. Supply the original and current time and cost schedules for the record. Also, provide allotment/obligation data. Response. The information follows.

FEDERAL JUDICIARY BUILDING

Mr. WHITE. So that is the story on the Library. The Federal Judiciary Building, let me just say, to refresh your recollection, has been built without the appropriation of any funds at all. In effect, it is a unique program, all provided for by law.

We are under the jurisdiction of the Judiciary Office Building Commission, which is established by law. And in effect, what we did was borrow the money from the money market through what we call certificates of participation, but in effect they are zero coupon bonds. We borrowed the money, we received it all at once. We then took that money and put it at interest in another interest-bearing account, so that there was a wash or an equivalence of the interest we were earning as opposed to the interest we will have to pay until such time as we began to use the money for actual construction.

In the course of that, we borrowed $127 million, but we will have accumulated 145 million by the time the project is over. And let me say in that regard that because of a number of circumstances, we have been able to stay under the budget by somewhere between 10 to $12 million.

Those funds will be used to pay rent, in effect by the savings through the construction process. We also arranged, when we borrowed the funds, to not have to amortize any of the debt for five years after we borrowed the funds.

The construction will have taken three years, so we have two years of leeway before we have to begin to retire debt. That, coupled with the savings, means that we probably will not have to get appropriations for rent by any of the agencies until 1995, and we will have occupied the building for almost three years by then.

Now, that has to do with retirement of debt. On the other hand, the rent is separated into two areas: The necessity to retire debt, like paying off the mortgage on your house, and that incidentally is an important factor here.

This building will belong to the United States Government free and clear of any debt at the end of 30 years, so that the moneys that are being paid are paying off our mortgage, in effect, instead of leasing rented from the private sector.

That is of primary importance, because for the Judiciary Building, the Administrative Offices of the U.S. Courts, are the primary tenant, and they have been paying rent to GSA-leased spaces in the downtown area, all of which is going into somebody else's mortgage.

So, I think it has worked out to be an excellent project, both from the standpoint of money as well as construction. We are on time, and it has been an excellent experience; so good, in fact, that it has made me uneasy, because a project of that magnitude has to have some problems with it.

So, I don't know when they will arise, but hopefully, not at all. In any event, the rent is divided into two basic categories. One is the retirement of debt, which is principal and interest, and the other is operating expenses. The retirement of debt will be constant over the entire 30-year period. So that rent will not change, which 20 years from now is going to have a major benefit as rents