Architect of the Capitol: A Formalized Process Could Improve Management of the Construction Division's Workforce and Workload

AOC is organized into 10 jurisdictions that operate and maintain the buildings and grounds of the U.S. Capitol complex. For projects such as renovations and repairs, the jurisdictions can use their own employees, a contractor, or AOC's Construction Division, which is staffed with trade workers such as electricians and plumbers. Most of the Division's staff are employed on a temporary basis and paid with funds the Division receives from the jurisdictions for projects it executes on their behalf. In March 2017, AOC laid off 30 of the Division's approximately 190 temporary employees, citing a lack of work from the jurisdictions.

GAO was asked to review the Division's operations. This report examines the jurisdictions' use of the Division and the Division's management of its workforce, among other issues. GAO analyzed information on projects the Division completed during fiscal years 2014 through 2018, reviewed AOC policies, visited the sites of six projects that are illustrative of the work the Division performs for the jurisdictions, and interviewed AOC staff, including officials from AOC's 10 jurisdictions and five of the employees AOC laid off in 2017.

The Architect of the Capitol's (AOC) Construction Division (hereafter the Division) is designed to serve as a flexible option that the 10 operational jurisdictions that comprise AOC can use to meet their facility needs. In their efforts to manage the buildings and grounds of the U.S. Capitol complex, AOC's jurisdictions have used the Division for projects that vary widely in cost, complexity, and duration (see figure). For example, over the last 5 fiscal years, the jurisdictions have used the Division for projects ranging in cost from about $1,000 to about $10 million and in scope from hazardous material testing to multiyear lighting-system upgrades. Jurisdiction officials cited the Division's flexibility in adjusting to scope and other changes to keep a project on schedule as one of the reasons they may decide to use the Division instead of an outside contractor. While jurisdiction officials said they were generally satisfied with the Division's services, officials from two jurisdictions suggested that the Division consider changing how it operates—for example, by transferring some positions to its parent organization in an effort to lower what it charges the jurisdictions. According to AOC officials, making changes such as this one to the Division's operations could have varying effects, such as increasing how much funding AOC would require from other sources beyond the jurisdictions.

The Division has taken steps to strategically manage its workforce to help ensure that it has the right number and composition of staff to meet the jurisdictions' needs but has not formalized the process it uses for collecting information on the jurisdictions' construction priorities each month. Because the Division's workload is driven by projects the jurisdictions hire it to perform, such things as changes in projects' priorities and work to be performed make determining future workforce needs challenging. The Division's approach to managing its workforce generally aligns with practices that GAO has previously identified that help agencies strategically manage their human capital. This approach includes having strategies to address gaps if the size and composition of an agency's workforce are not aligned with its workload requirements. However, because the Division has not formalized the process it uses to collect information each month on the jurisdictions' construction priorities it may miss opportunities to obtain information that is critical to making informed decisions. The Division also cannot provide reasonable assurance to AOC management and Congress that it is taking the steps necessary to manage its workload and that it is basing its workforce projections on the most current information available.

GAO recommends that AOC formalize the process the Division uses for collecting information on the jurisdictions' construction priorities each month, such as through developing written procedures. AOC concurred with GAO's recommendation.

The Architect of the Capitol (AOC) is responsible for the maintenance,  operation, and preservation of more than 18.4-million square feet of  building space and more than 570 acres of grounds in Washington, D.C.,  Maryland, and Virginia. This responsibility includes a number of buildings  that comprise the U.S. Capitol complex, including the U.S. Capitol, House  and Senate office buildings, the Library of Congress, the Supreme Court,  and the U.S. Botanic Garden. AOC is organized into 10 operational  jurisdictions, each of which is managed by a superintendent (or  equivalent), who oversees that jurisdiction. For renovations, repairs, and  new construction, the superintendents can use their own employees, a  private contractor, or AOC’s Construction Division (hereafter the Division).  The Division is designed to be a flexible option for the jurisdictions and  operates in response to their needs. It is comprised primarily of trade  workers such as electricians, plumbers, and masons that it employs on a  temporary basis. In March 2017, AOC laid off 30 of the Division’s  approximately 190 temporary employees, citing a lack of work from the  jurisdictions. While the number and types of temporary employees within  the Division are continually changing based on the work it is performing, the magnitude of this layoff raised questions about how AOC manages its  workload and workforce.

You asked us to review the Division’s role in supporting AOC’s  jurisdictions, as well as the circumstances surrounding the March 2017  layoff of 30 of the Division’s temporary employees. This report: describes how the jurisdictions use the Division and the factors they  reported considering when deciding whether to use the Division, assesses how the Division manages its workforce given the variability  of its workload, and assesses whether AOC’s appointment and subsequent March 2017  layoff of temporary employees from the Division complied with  applicable policy.

To describe how the jurisdictions use the Division and the factors  affecting this use, we obtained and analyzed available data on projects  the Division completed for the jurisdictions during fiscal years 2014  through 2018. In addition, we visited the sites of six projects that the  Division was executing at the time of our review. The projects we visited  were selected to enable us to understand the nature of the work the  Division performs for the jurisdictions; accordingly, the information we  provide regarding those projects is not generalizable to all projects the  Division performs for the jurisdictions. We also interviewed Division  officials and each of the jurisdictions’ superintendents. During the  interviews, we asked superintendents what suggestions they had to  change the Division’s operations and discussed with Division officials the  potential implications of those changes. We did not independently  evaluate the superintendents’ suggestions or the implications of  implementing the superintendents’ suggestions.

To assess how the Division manages its workforce, we reviewed pertinent  documents, such as the Division’s Organization and Operating Plan,  obtained and analyzed payroll data for the Division for fiscal years 2014  through 2018, and interviewed Division officials. We compared the  Division’s efforts to manage its workforce to strategic-human capital  management activities or practices identified in our prior work and  standards for internal control in the federal government.

To assess whether AOC’s appointment and subsequent March 2017  layoff of 30 temporary employees from the Division followed applicable  practices and policy, we reviewed relevant federal laws, AOC policy, and  agency personnel documents. We also interviewed AOC’s Chief Human  Capital Officer and other officials within the Human Capital Management  Division about AOC’s appointment and layoff of the Division’s temporary  employees. In addition, we interviewed five of the nine laid off temporary  employees, who were subsequently rehired by AOC, to obtain their  perspective on AOC’s processes for appointing and laying off temporary  employees.

We assessed the reliability of the Division’s project and payroll data that  we used in our analysis by reviewing available documentation and  interviewing agency officials. We found these data to be sufficiently  reliable for the purposes of this report, which includes describing the type  and cost of projects the Division completed for the jurisdictions over the  last 5 fiscal years, identifying illustrative examples of those projects and  describing the size and composition of the Division’s workforce. For more  details on our scope and methodology, see appendix I.

We conducted this performance audit from March 2018 to March 2019 in  accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

AOC is responsible for the maintenance, operation, and preservation of  the buildings that comprise the U.S. Capitol complex, as shown in figure  1.

AOC is organized into the following 10 jurisdictions, each of which is  funded by a separate appropriation:  (1) Capitol Building,  (2) Capitol Grounds and Arboretum (hereafter the Capitol Grounds),  (3) Capitol Police Buildings, Grounds, and Security (hereafter the Capitol  Police),  (4) Capitol Power Plant,  (5) House Office Buildings (hereafter the House),  (6) Library Buildings and Grounds (hereafter the Library),  (7) Planning and Project Management (PPM),  (8) Senate Office Buildings (hereafter the Senate),  (9) Supreme Court Building and Grounds, and  (10) U.S. Botanic Garden (hereafter the Botanic Garden).

PPM provides consolidated services to all of AOC’s jurisdictions, such as  long-range facility planning, historic preservation, and architectural and  engineering design services. In addition, PPM manages systems that  span jurisdictions including electrical distribution and emergency  generators. PPM is also the parent organization of the Division, which  provides construction and facility management support to all of AOC’s  jurisdictions.

Established in the 1970s, the Division’s mission is to “support AOC  jurisdictions serving their Congressional and Supreme Court clients by  providing high quality construction and craftsmanship with seamless  flexibility, best value, and extraordinary customer service, while protecting  our national treasures.” The Division’s operations are funded through a  mix of appropriations and project funding from the jurisdictions.  Specifically, according to AOC officials, the agency’s appropriation for  Capital Construction and Operations provides the salaries and expenses  of up to 13 permanent staff. The salaries and expenses of the remaining  staff, as well as other costs (such as materials) are covered by the project  funding the Division receives from the jurisdictions. According to AOC  officials, essentially, the jurisdictions hire the Division to execute work on  their behalf, and the Division charges the jurisdictions for its expenses.

As a result, the number and type of temporary employees the Division  employs at any given time is directly related to the projects it is  performing for the jurisdictions. As of October 2018, of the Division’s 162  employees, 12 were permanent employees responsible for executive  management and administrative functions. The remaining 150 were  temporary employees—124 trade workers and 26 construction support  employees—that it hired under temporary (e.g., 13- or 24-month)  appointments. The trade workers include electricians, plumbers, masons,  woodcrafters and carpenters, cement finishers, sheet metal mechanics,  painters and plasterers, hazardous material abaters and insulators,  laborers, and warehouse and material handlers. The construction support  employees include personnel who perform activities such as construction  management, purchasing, and timekeeping.

The Division’s temporary employees are eligible for benefits. By law, AOC  is generally required to provide all temporary employees with “the same  eligibility for life insurance, health insurance and other benefits” to  temporary employees who are hired for periods exceeding one year.  The benefits AOC’s temporary employees receive may differ from what  other federal temporary employees in the executive branch receive since  these benefits vary depending on the type of temporary appointment and  the employing agency, among other things. For example, employees  serving under an appointment limited to 1 year or less are generally not  eligible for the Federal Employees’ Group Life Insurance program.

As previously stated, the Division pays for the salaries and expenses of  its temporary employees with project funding from the jurisdictions. That  project funding covers both the Division’s direct and indirect costs. Direct  costs are those directly attributed to and expended on a project, such as  labor (i.e., trade workers) and materials. In contrast, indirect costs are  necessary costs that are not directly attributable to a specific project, such  as employee leave and training, as well as salaries for construction  support employees, such as supervisors and purchasing agents. To pay  for its indirect costs, the Division charges the jurisdictions what it calls an  “indirect rate.” As of October 2018, the Division’s indirect rate was 0.85.  The Division applies this rate to every direct labor-hour associated with a  project it executes for the jurisdictions. For example, for a trade worker  with a hypothetical hourly cost of $45, the Division charges the  jurisdictions about $83, as shown in figure 2.

For more information on the Division’s direct and indirect costs, see  appendix II.

Jurisdictions Used the Division for a Wide Range of Projects, Citing Flexibility and Capacity as Key Factors, and Were Generally Satisfied with the Division’s Services

Jurisdictions Used the Division for a Wide Range of Projects

Based on our analysis of the Division’s data for projects completed during  fiscal years 2014 through 2018, the jurisdictions used the Division to  varying degrees for projects that ranged widely in terms of cost,  complexity, and duration.

Cost: There was a wide range in the nominal cost of individual  projects the Division completed during fiscal years 2014 through  2018. The smallest individual project cost about $1,100 in 2017  dollars to perform hazardous materials testing in the Ford Office  Building for the House jurisdiction in fiscal year 2016. Larger projects  may be done in phases and when combined can cost millions of  dollars. For example, in 2015 the Division completed a lighting project  at the James Madison Building for the Library jurisdiction in two  phases at a total cost of about $9.8 million in 2017 dollars.

Complexity: During this period, the Division’s projects ranged from  work involving one type of activity or trade to work involving several  phases or many trades. For example, the Capitol Power Plant  jurisdiction used the Division for paint projects and a door  replacement. Other projects included the construction of a lactation  suite at the Ford House Office Building. For this 4-month project, the  Division performed carpentry, electrical work, hazardous materials  abatement, and other tasks in order to demolish an existing women’s  restroom and build a lactation suite with an adjacent, smaller women’s  restroom (see fig. 3).

Duration: During this period, the jurisdictions used the Division for  projects that varied from quick turnaround projects that took a few  days to complete to longer, multi-year projects. Most (about 88  percent) of the projects were completed within one year, while about 4  percent were completed between 1 and 2 years, and about 8 percent  took 2 or more years to complete. For example, the Senate  jurisdiction used the Division for an elevator repair project in 2016 at  the Russell Office Building that took one day to complete while smoke  detector upgrades in the James Madison Building for the Library  jurisdiction took over 5 years and were completed in 2014. We also  identified several examples of projects that the Division did for  jurisdictions in phases. Sometimes the duration of the phases were  less than one year but when combined the work spanned multiple  years. For example, the Division built additional office spaces for staff  displaced by the House jurisdiction’s renovation of the Cannon Office  Building. Each phase of the work was completed within one year, but  the work spanned almost 2 years from November 2014 to August  2016.

The extent to which each of the jurisdictions used the Division also varied.  Based on our analysis of the Division’s data and discussions with the  jurisdictions, the Library, House, and Senate jurisdictions were the  primary users of the Division during fiscal years 2014 through 2018,  comprising more than 90 percent of the total work by cost for completed  projects, as shown in figure 4. The Division completed projects exceeding  $1 million for each of these jurisdictions.

Jurisdiction Officials Cited the Division’s Flexibility and Capacity as Factors That Influence Decisions to Use the Division

While jurisdictions have the option to use their own staff or a contractor  for projects, jurisdiction officials said they consider a range of factors  when determining whether to use the Division. They most frequently cited  the Division’s flexibility in responding to scheduling and scoping changes  and the jurisdictions’ own internal capacity to execute a project. They less  frequently cited other factors, such as the availability of appropriations.

Schedule: Jurisdiction officials said the Division provided scheduling  flexibility at no extra charge compared to using outside contractors.  According to jurisdiction officials, when projects require a great deal of  flexibility, the jurisdictions may be more likely to choose the Division over  a contractor because the Division can start and stop work as needed and  can work nights or on weekends if necessary to keep a project on  schedule without charging extra fees. For example, work on projects may  need to be stopped or delayed for a variety of reasons, such as for  security purposes if there is a protest near the worksite, or during a  presidential visit.

Jurisdiction officials also noted that the Division can typically mobilize  faster than a contractor, a consideration that can be an important factor in  determining whether to use the Division. For example, jurisdiction officials  noted that the Division’s employees can begin work faster than an outside  contractor because they have employee identification badges that  authorize access to most buildings across the Capitol complex without an  escort. 'Contractors must obtain a badge prior to accessing a work site  and require escorts in instances when they do not have an AOC or site- specific badge, and the process of obtaining a badge adds time to when a  contractor can begin work. As another example, jurisdiction officials also  told us that using a contractor requires that AOC develop full design  specifications for a project, a process that takes time and resources. In  contrast, the Division can execute work without full design specifications.  For example, Capitol Power Plant officials told us they used the Division  for renovations to their Administration Building because, according to the  officials, the Division started the work sooner, without design  specifications and thereby completed the project faster than a contractor  likely could have. Capitol Power Plant officials explained that the work— which included new carpet and painting—was agreed upon with the  Division without spending time developing detailed design specifications  that would have been required to obtain a contractor for the work.

Scope Changes: According to jurisdiction officials, the Division is  typically more flexible than a contractor when dealing with issues that  arise from unforeseen site conditions or changes to a project’s scope. For  example, during the construction of the lactation suite discussed above,  the Division uncovered lead paint in the walls, requiring the work to stop  until the lead paint was removed. According to officials, contractors  typically charge for making changes to a project’s scope, such as  removing hazardous materials uncovered during construction or  associated delays. The Division does not charge for making changes or  associated delays. This flexibility is because the Division charges based  on direct labor hours spent on a project, meaning its expenses are  charged as they are incurred. Accordingly, while a project’s costs may  increase if more labor is charged to a project, the Division also has the  option of having its employees work on other projects if work on a  particular project has to stop.

Jurisdiction officials told us that the Division also works with the  jurisdictions to save money on projects. According to officials, such  savings were the case during a 2-year project that the Division completed  at the Library jurisdiction’s Jefferson Building in 2018 with a cost of $3.5  million in 2017 dollars. The project involved reversing the direction of  doors in high-occupancy areas to allow for more orderly evacuation of  occupants in the event of an emergency, as shown in figure 5. It also  involved replacing some of the building’s historic doors and associated  hardware with replicas that meet modern safety standards. Officials told  us the Division helped the jurisdiction save about $1.2 million (in current  dollars) during the course of the project by identifying less expensive  materials for the project than originally planned for.

Internal staff: Jurisdiction officials also told us that they use the Division  for projects when they lack the internal capacity to do so. Most of the  jurisdictions have some trade workers, such as electricians and plumbers,  on staff to handle their daily operations and maintenance needs.  Jurisdictions may execute smaller projects with their own employees but  may use the Division for projects beyond routine maintenance work that  their own employees cannot fit into their schedules. For example, officials  with the Senate jurisdiction told us that they have staff capable of  performing cabinetry work but have used the Division in the past for  cabinetry work so that their staff could focus on more routine  maintenance work. Senate jurisdiction officials also told us that they  primarily use their own staff for construction work, but will use the Division  as an option to supplement their staff when the volume of the Senate  jurisdiction’s own workload is higher than what can be handled internally.

Skill and equipment: Jurisdictions may use the Division if they lack the  skills or equipment to execute a particular project. Officials from five of the  jurisdictions told us that they have staff within their jurisdiction who can  execute small projects involving hazardous materials, such as lead paint  abatement under 2 square feet in size. Larger projects have additional  abatement requirements, and the jurisdictions have used the Division for  these projects. As another example, the Capitol Grounds jurisdiction used  the Division in 2016 to install the annual Christmas tree on the Capitol  lawn because the jurisdiction lacked the necessary equipment to do so.  The Botanic Garden jurisdiction, which does not employ any masons,  used the Division for a project at its Conservatory in 2016 because of the  Division’s masonry expertise. Officials with the Senate jurisdiction also  cited the Division’s masonry expertise among other factors, such as the  Division’s familiarity with the jurisdiction’s buildings, in selecting the  Division to repair the steps at the Russell Senate Office Building in 2017,  as shown in figure 6.

Availability of appropriations: Jurisdiction officials told us that they  might not use the Division if the work cannot be completed by the time the  jurisdiction’s appropriations expire. Specifically, because the jurisdictions  pay for the Division’s services as work is executed rather than upfront  when the work is initiated, the jurisdictions must ensure that work by the  Division can be completed before their appropriations expire. Jurisdiction  officials told us that as a result, the Division may not be a realistic option  when using 1-year appropriations near the end of the fiscal year. In  contrast, when using a contractor, jurisdictions may obligate fixed period  appropriations prior to the end of the fiscal year for work that will continue  into the following fiscal year.

Cost: Most jurisdiction officials said that a project’s cost was not a key  factor they considered when determining whether to use the Division for a  project. When the jurisdictions are considering using a contractor they are  not required to obtain cost estimates from the Division first and generally  do not do so. As a result, comprehensive information on the relative costs  of using the Division compared to a contractor was not available.  However, in cases where the jurisdictions told us they did obtain  estimates from both the Division and a contractor, they said the cost to  use the Division was sometimes more expensive than a contractor and  sometimes less expensive, as illustrated in the following examples.

Officials with the Supreme Court Building and Grounds jurisdiction  told us they used the Division to install a new heating, ventilation, and  air-conditioning system in one of its buildings after it obtained an  estimate from a contractor. According to officials, the project required  specialized skills that the Division’s trade workers did not have.  However, once they received the contractor’s estimate, the jurisdiction  officials determined it was cheaper to pay for the Division’s employees  to get trained to do the project than using a contractor.

Officials with the Senate jurisdiction told us they obtained cost  estimates for lead abatement work from both the Division and a  contractor several years ago. According to officials, the contractor’s  estimate was less than that of the Division because the contractor  proposed using different equipment for the project than the Division,  and the jurisdiction used the contractor for the abatement.

Jurisdiction Officials Reported They Were Generally Satisfied with the Division’s Services; A Few Suggested Making Changes to Its Operations

The jurisdiction officials we interviewed said they were generally satisfied  with the Division’s services, including the quality of its work, and were  particularly satisfied with the flexibility the Division offers. Officials from  seven of the nine jurisdictions we interviewed also told us they would not  suggest making changes to how the Division currently operates.

Officials from two of the jurisdictions suggested the organizational and  cost-allocation changes discussed below. According to Division officials,  implementing those suggestions would have implications for its  operations and structure, and would require additional research and  evaluation to determine if they are feasible.

Transfer positions from the Division to its parent organization,  PPM: Officials from one jurisdiction suggested that the Division could  lower its indirect rate by transferring payroll responsibility for some  supervisory positions, such as its construction or safety managers,  from the Division to PPM. As discussed above, because the Division  does not receive an appropriation for the salaries and expenses of its  temporary construction support employees, it pays for those costs by  charging the jurisdictions for direct labor hours and also an “indirect  rate.”

Division officials told us that payroll responsibility for some  construction support positions could be transferred to PPM and that  this transfer would reduce the Division’s indirect rate because that  rate increases by about 1.1 percent for each employee captured in the  rate. Because PPM is the parent organization of the Division, this step  would not reduce the total costs of projects to AOC as an  organization; rather, it would transfer the responsibility for paying  certain costs from the jurisdictions to PPM. According to AOC officials,  this could have several effects. First, PPM would need to find a way to  fund those positions, which would likely require an increase in its  appropriations to cover additional positions. Second, transferring  supervisory positions to PPM could mean those personnel could be  tasked to support other AOC-wide efforts, rather than supervising and  managing the day-to-day execution of the Division’s projects.  Similarly, Division officials told us that transferring supervisory  positions or support personnel such as purchasing agents to PPM  could reduce the Division’s flexibility, such as its ability to hire  additional supervisors or support personnel if its workload increases in  the future.

Make the Division’s indirect rate variable: Officials with that same  jurisdiction suggested that the Division consider making its indirect  rate (which as of October 2018 was a fixed rate of 0.85) a variable  rate. Under a variable rate approach, projects would have different  rates depending on their needs. For example, a project requiring only  labor would be charged one rate, but a project requiring labor and  additional services, such as the purchasing of materials, would be  charged a higher rate. According to Division officials, charging the  jurisdictions varying rates depending on the extent to which a project  utilizes the Division’s resources could reduce the cost for some  jurisdictions but increase it for others since the Division must charge  enough to recover all of its costs. Division officials told us AOC  evaluated this option in 2017 but decided against it. AOC determined  that making the Division’s indirect rate variable would result in  increased administrative burden because the Division would have to  determine which projects and workhours would be variable and which  would not. It would then need to track and assess them differently for  each project.

Provide additional on-site supervisors for complex multi-trade  projects: For most projects, the Division provides supervisors who  manage the day-to-day execution of multiple projects. However,  jurisdictions have the option to pay, as a direct cost, for dedicated, on- site supervisors to oversee and manage their projects exclusively.  Officials with one jurisdiction suggested that the Division make it  standard practice for complex, multi-trade projects to have a  dedicated, on-site supervisor. Division officials told us that having a  dedicated, on-site supervisor works best for complex, multi-trade  projects such as the East Phase of the House jurisdiction’s 13-month,  $15 million child care center project that the Division completed in  December 2018 (see fig. 7).

According to Division officials, having dedicated, on-site supervisors day  and night during construction enabled the project to remain on schedule  and below budget because the supervisors were responsible for  overseeing all construction activities and could immediately address  questions or concerns that arose, thereby resulting in increased efficiency  and cost savings. Division officials told us that while the project’s scope  increased during execution, the Division was able to work additional  nights and weekends to meet the project’s deadline. Even with additional  scope, Division officials estimated that they have saved the House  jurisdiction about $500,000 (in current dollars) on the project through  increased oversight and by identifying areas of cost savings, such as  purchasing less expensive lighting fixtures than called for in the design.

The Division Has Taken Steps to Strategically Manage Its Workforce but Does Not Have a Formalized Process for Collecting Some Information

Uncertainties Make Anticipating the Division’s Workforce Needs Challenging

The variability of the Division’s workload makes anticipating the  necessary size (number of employees) and composition (mix of trades  and number of employees within each trade) of its workforce challenging.  AOC has reported to Congress that the primary drivers behind the size  and composition of the Division’s workforce have been project demand  and the availability of funding. As previously discussed, the Division’s  workload is driven by projects the jurisdictions hire it to perform. Without  projects to execute for the jurisdictions, the Division does not have  funding to pay the salaries and expenses of most of its employees.  Accordingly, the size of the Division’s workforce expands and contracts in  response to the jurisdictions’ demand for work. For example, over the last  5 fiscal years, the size of the Division’s trade workforce has fluctuated  between a high of 191 in fiscal year 2016 and a low of 121 in fiscal year  2018. During that period, the number of employees the Division employed  within each trade also fluctuated.

Several factors contribute to the variability of the Division’s workload and  make determining its future workforce needs challenging. First, officials  told us that the Division has no control over whether the jurisdictions use  the Division for their projects. Second, even if a jurisdiction decides to use  the Division, Division officials told us that projects are notional or  uncertain until that jurisdiction signs a project agreement, among other  things. Third, even with a signed agreement, jurisdictions can reduce a  project’s scope or cancel it all together, a situation that can leave the  Division searching to find work for the trade workers it planned to use for the project. Finally, differing project priorities also come into play, as both  Division officials and representatives from three of the jurisdictions  acknowledged that some projects and work for certain jurisdictions are a  higher priority than others. According to officials, when priority or  emergency projects arise, the timing and work for ongoing projects can  be affected as trade workers are shifted to the priority or emergency. In  some cases, the on-going project may continue at a slower pace with  fewer workers and in other cases all work might be stopped for a period  of time.

The Division Has Taken Steps to Anticipate Its Workforce Needs but Lacks a Formalized Process for Collecting Information on the Jurisdictions’ Construction Priorities

Over the last several years the Division has made efforts to strategically  manage its workforce to help ensure that it has the right number and  composition of employees to meet the jurisdictions’ needs. Our prior work  has identified certain practices that, when implemented, can help federal  agencies strategically manage their human capital. These practices  include: (1) involving managers and stakeholders in decision-making, (2)  basing workforce decisions on current needs and future projections, (3)  having strategies to address workforce gaps, and (4) monitoring progress.  As discussed below, we found that the Division has taken steps that  generally align with those practices. However, it does not have a  formalized process for collecting information that it uses to project future  workforce needs, and we note that several of the steps it has taken date  to the time of the March 2017 layoffs or more recently.

Involve managers and stakeholders in decision-making: The Division  has taken steps to involve AOC’s management, including the  superintendents of the jurisdictions, in managing its workforce given the  variability of its workload. According to Division officials, its staff are in  frequent contact with the jurisdictions and meet periodically with the  jurisdictions to discuss the status of ongoing and future projects. The  officials said that Division staff meet bi-weekly with the larger  jurisdictions—such as the Senate, House, and Library—and monthly or  as needed with others as well as with PPM on a weekly basis to discuss  the status of projects and workforce needs. According to Division officials,  this regular communication with the jurisdictions is their primary and most  important method of identifying and addressing workload issues or  concerns. Jurisdiction officials echoed the Division’s comments, noting  that they are in frequent contact with staff from the Division or as needed.

Base workforce decisions on current needs and future projections:  Over the last several years, the Division has taken steps to improve how  it collects and tracks information from the jurisdictions upon which to base  its future workforce projections. Prior to 2015, the Division used a paper- based process to collect information on the jurisdictions’ work requests  and tracked information on a spreadsheet. In 2015, the Division  implemented a software tool called the Construction Division  Management System (CDMS) to streamline that process, making it easier  for the jurisdictions to submit requests for work. For example, using  CDMS, the Division can now electronically collect information for ongoing  projects from the jurisdictions, such as change orders and schedule  updates, and the jurisdictions can electronically submit requests for cost  or schedule information for future projects. According to Division officials,  Construction Managers, who are familiar with the resource needs of  individual projects, are responsible for updating and validating the  information in CDMS—typically bi-weekly—and the information in CDMS  is available to the jurisdictions to review and verify.

More recently, in July 2017, the Division hired a scheduler to develop  resource-loaded schedules for ongoing projects. This involves assigning  labor, materials, equipment, and other resources to a project’s schedule.  According to Division officials, currently, the Division develops resource- loaded schedules for about 70 percent of its workload as the projects that  comprise its remaining workload are too small or short-term for such  schedules. In addition, in October 2017, the Division began collecting  additional information on the jurisdictions’ construction priorities through a  monthly data call. As part of this data call, which the Division performs via  email, the Division requests updated information from the jurisdictions on  their current projects, such as the expected start date or whether minor  tasks remain, and the status of potential future projects. Using the  information the Division collects from the jurisdictions, officials told us it  then forecasts its workload and workforce needs out over the succeeding  12 months. According to officials, those projections are an “art, not a  science,” because of the uncertainties surrounding the Division’s  workload.

However, the Division has not formalized the process it uses to collect  information about the jurisdictions’ construction priorities. Specifically, we  found that the Division lacks a written set of procedures for the monthly  data call discussed above to help ensure that staff understand who is  responsible for collecting information, what information should be  collected, and when that information should be collected. This lack of  procedures led to a situation in July 2018 where, according to officials,  the Division did not conduct that data call but has since set calendar  reminders for key staff in an effort to help ensure they do not miss it  again. While setting such reminders may have some benefit now, it does  not ensure that others within AOC will execute that data call in the future.  Formalized processes, such as written procedures, can help ensure that  steps an agency is taking can be implemented in a predictable,  repeatable, and accountable way. Such procedures are also a key  component of internal control designed to provide reasonable assurance  that an organization’s operations are effective and efficient. AOC  officials agreed that a more formalized process for collecting information  about the jurisdictions’ construction priorities could help ensure the data is  collected consistently. It would also better position AOC management to  ensure that the Division’s process will be implemented consistently and  that the jurisdictions understand what information is expected of them. It  could also provide reasonable assurance to AOC management and  Congress that the Division is taking the steps necessary to manage its  workload and basing its workforce projections on the most current  information available.

Have strategies to address workforce gaps: The Division has a  number of strategies it can employ if the size and composition of its  workforce are not aligned with its workload requirements. For example,  officials told us the Division can utilize direct-hire authority to quickly fill  positions if there is a shortage of employees with specific skillsets to meet  the jurisdictions’ needs. Officials told us employees may also work  overtime to meet the jurisdictions’ needs if the Division’s workload  projections do not show a need to hire additional employees. In instances  where there is a lack of work, officials told us the Division has the options  of not renewing the appointments of its temporary employees; helping  affected employees in finding positions in jurisdictions to the extent  practicable; or, if necessary, lay off affected employees, as it did in March  2017.

Division officials told us they are also exploring additional strategies to  help address potential instances where the size and composition of its  workforce are not aligned with its workload requirements moving forward.  One potential strategy involves using the Division to help address AOC’s  backlog of deferred maintenance and capital renewal, which AOC  estimated in 2017 was about $1.4 billion. Another potential strategy  involves working with the jurisdictions to establish more large projects that  provide a stable amount of work over a period of time. An example of a  recent such project is the East Phase of the O’Neill Child Care Center  project. According to Division officials, around 25–30 trade workers  worked at the site at any given time, providing stability and work for  multiple trades. When work on other projects was delayed or did not  materialize, the Division was able to move the trade workers to the child  care project.

Monitor progress: Over the last several years the Division has taken  steps to monitor the accuracy of its workload and workforce projections  by discussing its projections with AOC management, including the  Architect of the Capitol and the superintendents of the jurisdictions, each  month. According to officials, the Division began these monthly briefings  for AOC’s management in December 2016, when its workload decreased  due to the completion of work related to the renovation of the Cannon  Office Building. During these briefings, Division staff provide the Architect  of the Capitol and the superintendents with information on the Division’s  active, committed, and potential projects over the next several months.  According to Division officials, these briefings provide an opportunity to  discuss with AOC’s management any issues or concerns they have with  the Division’s workload.

The Division employed the practices described above in the months  leading up to the March 2017 layoff of the 30 temporary employees.  Division officials told us that 5 to 6 months prior to March 2017, they  anticipated a potential decline in the Division’s workload and worked with  the jurisdictions to identify potential projects that the Division could  execute, but sufficient additional projects did not materialize. During this  process, the Division involved PPM, the jurisdictions, and AOC’s  management, among others. The efforts to minimize the number of  employees affected by any layoffs included identifying job openings within  the jurisdictions that employees could apply for. According to officials, one  employee was hired by the Senate jurisdiction, another by the Capitol  Grounds jurisdiction, and a third by the Office of the Chief Administrative  Officer in the House, prior to the layoff.

During the course of our review, we observed that the Division employed  these strategies. Specifically, Division officials told us that they  anticipated there might be a potential decline in the Division’s workload in  early 2019. The Division raised this potential with AOC’s management  during the summer of 2018, and officials told us the issue was resolved  once the House and Library jurisdictions identified several projects that  the Division could execute beginning in 2019.

AOC’s Appointment and Subsequent Lay Off of Temporary Employees in March 2017 Followed Applicable Practices and Policy

AOC’s authority to appoint and remove its employees is governed by title  2 of the U.S. Code and AOC has established various practices and policy  related to their terms of employment. We found that AOC generally  followed its practices when it appointed 30 temporary employees and  adhered to its policy when it subsequently laid them off in March 2017.

AOC Generally Followed Its Practices in Appointing and Renewing the Terms of Employment for Temporary Employees

Our review of the appointment letters for 27 of the 30 temporary  employees laid off in March 2017 found that the letters specified that the  position was temporary and was for a term not-to-exceed 13-months.  We also found that 10 of the 27 appointment letters included language  stating that the position was dependent on the availability of work or  funding. As part of our review, we met with five of the nine employees that  AOC rehired following the March 2017 layoffs, all five employees told us  that they were aware of the temporary nature of their positions and of the  fact that they could be laid off at any time due to lack of work. Human  capital officials told us that in April 2017, they developed a standard  appointment letter to communicate the terms of employment for  temporary employees more consistently. This letter includes language  explaining that temporary appointments may be terminated at any time  due to a lack of work, lack of funds, or failure to meet management’s  expectations. For a copy of AOC’s standard appointment letter for  temporary employees, see appendix III.

AOC may renew the employment of temporary employees at the end of  their 13-month appointment based on project needs and the availability of  funding, according to human capital officials. We found that the 13 month  appointments for 26 of the 30 temporary employees were routinely  renewed prior to their March 2017 layoff. Of the 26 temporary  employees, 12 had been employed from 13 months to 5 years, 9 had  been employed from 6 to 10 years, and 5 had been employed for more  than 10 years. The remaining four had been employed for less than 13  months. Human capital officials told us that there is no limitation on the  number of times an employee’s appointment may be renewed. To ensure  that employees serving under temporary appointments understand the  terms of their employment, human capital officials told us that since  March 2014 employees who have had their appointments renewed sign a  standard Extension of Temporary Appointment form. This form states the  position is temporary, may be shorter or longer than 13 months, and may  end at any time. For a copy of this extension form, see appendix IV.

AOC Generally Followed Applicable Policy When Laying Off the Division’s Temporary Employees

AOC’s layoff policy allows the Director of PPM, as delegated by the  Architect of the Capitol, to lay off the Division’s temporary employees for  lack of work, lack of funds, or failure to meet management’s  expectations. The policy does not specify which factors AOC should  consider in selecting employees to be laid off, thereby allowing the  agency discretion in this area.

Our review of the layoff letters for the 30 temporary employees laid off in  March 2017 confirmed that AOC communicated to the employees that the  layoff was due to a lack of work. In this particular situation, the Division  officials said they determined the number of temporary employees  needed to carry out its projected workload and considered two factors  equally: (1) the employees’ performance and skillset and (2) the  employees’ ability to work independently and as part of a team. Human  capital officials told us that AOC’s offices of Employee and Labor  Relations and its General Counsel reviewed the Division’s request, and  found no human-capital or legal concerns. The human capital officials  drafted letters notifying the 30 employees of their layoff, effective upon receipt. Division supervisors provided the letters to employees at the start  of their shifts on March 21, 2017. Figure 8 provides summary information  by trade on the 30 temporary employees that AOC laid off in March 2017.

At the time of the March 2017 layoff, AOC did not have a policy that  required the Division to notify the Division’s temporary employees of an  impending layoff. Human capital officials told us that they did not provide  the Division’s temporary employees with advance notice of their layoff  because of concerns that such advance notice could result in an  unproductive and disruptive work environment. In terms of notifying  relevant employee unions, human capital officials said they provided 12- hour advance notification of the layoff to one employee union, in  accordance with that union’s collective-bargaining agreement. The five  rehired employees we interviewed told us they were caught off guard by  the March 2017 layoffs. None of the 30 temporary employees filed  grievances related to the layoff, according to human capital officials.

Since the layoff, human capital officials told us they recognized that AOC  did not have a consistent policy for providing advance notice of layoffs to  temporary employees across AOC’s 10 jurisdictions. According to AOC’s  Chief Human Capital Officer, some jurisdictions provided advance notice  of layoffs to temporary employees while others did not. To provide  consistency with such notification and in response to our inquiries, in  October 2018 AOC issued guidance standardizing the notification period  for temporary employees laid off due to lack of work or lack of funds  across all jurisdictions. This guidance directs jurisdictions to provide all  temporary employees with a notification period of 2-weeks prior to the  effective date of being laid off for these reasons. It also provides  jurisdictions the option to request administrative leave so that the  temporary employee may stop work immediately and be paid during the  two week notification period.

The Division was created to serve as a flexible option that the jurisdictions  can use to meet the facility needs of their congressional and Supreme  Court clients. By design, the Division can hire employees if there is  demand for its services and lay off employees, as it did in March 2017, if  there is insufficient demand or project funding to pay them. In recent  years, the Division has taken steps to more strategically manage its  workforce and minimize disruptions to that workforce in part by increasing  its communication with the jurisdictions. However, formalizing the process  the Division uses to collect information on the jurisdictions’ construction  priorities, such as by providing staff with a written set of procedures,  which specifies what is required of staff and when, could help ensure that  those staff consistently collect and use the best information to make  decisions about the appropriate number of employees and the mix of  trades. Formalizing that process in this manner could also help the  Division provide reasonable assurance to AOC management and  Congress that it is taking the steps necessary to manage its workload and  basing its workforce projections on the most current information available.

The Architect of the Capitol should formalize the process the Construction  Division uses to collect information on the jurisdictions’ construction  priorities each month, such as through developing written procedures.  (Recommendation 1)

We provided AOC with a draft of this report for review and comment.  AOC responded with a letter in which it concurred with our  recommendation and said it intended to address our recommendation  later this year. AOC’s letter is reprinted in appendix V. AOC also provided  technical comments, which we incorporated in the report as appropriate.

We are sending copies of this report to the appropriate congressional  committees and the Architect of the Capitol. In addition, the report is  available at no charge on the GAO website at https://www.gao.gov.

If you or your staff have any questions about this report, please contact  us at (202) 512-2834 or rectanusl@gao.gov or (202) 512-7215 or  gurkinc@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  GAO staff who made key contributions to this report are listed in appendix  VI.

Appendix I: Objectives, Scope, and Methodology

Our objectives were to: (1) describe how the Architect of the Capitol’s  (AOC) jurisdictions use the Construction Division (hereafter the Division)  and the factors they reported considering when deciding whether to use  the Division, (2) assess how the Division manages its workforce given the  variability of its workload, and (3) assess whether AOC’s appointment and  subsequent March 2017 layoff of temporary employees from the Division  complied with applicable policy.

To describe how the jurisdictions use the Division and the factors  affecting this use, we obtained and analyzed data on projects the Division  completed for the jurisdictions during fiscal years 2014 through 2018. We  focused our discussion of these data to the cost, scope, and duration of  projects and do not present information on the number of completed  projects because of differences in how the jurisdictions identify projects.  To assess the reliability of the Division’s data, we reviewed available  documentation and interviewed agency officials. We determined that the  Division’s project data were sufficiently reliable for the purposes of this  report, which includes describing the type and cost of projects the  Division completed for the jurisdictions over the last 5 fiscal years and  identifying illustrative examples of those projects. For appropriate  comparison, the costs of completed projects we present in our report  have been adjusted for inflation and converted to 2017 dollars using the  fiscal-year gross domestic product index, which is compiled by the U.S.  Department of Commerce, Bureau of Economic Analysis. We attempted  to obtain comparable data for projects where the jurisdictions used their  own employees or a contractor, but these data were not readily available.  With respect to the jurisdictions’ use of their own employees, the Capitol  Building jurisdiction attempted to obtain this data for us, but the data that  were available did not include the cost of all labor spent on projects.  Further, according to AOC, the jurisdictions do not capture data on  employees’ time spent on construction work so this data also included  projects that were considered routine maintenance. With respect to the  jurisdictions’ use of contractors, the data that were available also included  purchase card transactions, among other unrelated costs. According to  AOC, identifying just the contract costs of the jurisdictions’ construction  projects would require that AOC conduct significant research and review  every transaction associated with its contracts.

To provide illustrative examples, we visited the sites of six projects that  the Division was executing at the time of our review. To select these  projects, we asked the agency to provide us with projects that would  enable us to understand the nature of the work the Division performs for  the jurisdictions. In addition to the 4 projects the agency provided, we  selected 2 additional sites based on projects that were discussed during  our interviews. During our visits, we met with Division officials and  representatives from the jurisdictions to discuss the projects in detail. We  visited the following projects: an abatement and insulation project at the Russell Senate Office  repairs to the drainage system at the Russell Senate Office Building,  the replacement of doors at the Library of Congress, demolition and construction activities associated with the construction  of a new lactation suite at the Ford House Office Building, demolition and construction activities associated with the construction  of a new child care center at the O’Neill House Office Building, and  the replacement of light poles across the U.S. Capitol complex.

We also interviewed officials from the Division and AOC’s 10 jurisdictions,  including their respective superintendents. Except Planning and Project  Management, we asked the jurisdictions if they had any suggestions for  changing the Division’s operations. We did not ask Planning and Project  Management because the Division is a component of that jurisdiction. We  then discussed with Division officials the potential implications of making  those changes. We did not independently evaluate the implications of  implementing the superintendents’ suggestions as part of this review.

To assess how the Division manages its workforce, we reviewed pertinent  documents, such as AOC’s August 2017 report to Congress on the  Division, the Division’s Organization and Operating Plan, user guides  for the Construction Division Management System, and prior GAO  reports. We also obtained and analyzed payroll data for the Division for  fiscal years 2014 to 2018 and interviewed Division officials. To assess the  reliability of the Division’s data, we interviewed agency officials. We  determined that the Division’s payroll data were sufficiently reliable for the  purposes of this report, which includes describing the size and  composition of the Division’s workforce over the last 5 fiscal years. We  compared the Division’s efforts to manage its workforce to strategic  human capital-management activities or practices identified in our prior  work and standards for internal control in the federal government.

To assess whether AOC’s layoff of temporary employees from the  Division in March 2017 complied with applicable policy, we reviewed  relevant federal laws and agency policy, such as the Separation of Non- Permanent Employees Policy Memorandum (AOC Order 316-1). We also  reviewed pertinent personnel documents, such as appointment letters,  layoff letters, and Standard Form 50 personnel documentation. We  compared AOC’s policy with AOC’s implementation during the March  2017 layoff of 30 temporary employees. We did not independently verify  AOC’s application of the criteria used to determine which employees to  lay off in March 2017. In addition, we interviewed officials from both  AOC’s Human Capital Management Division and the Division. As part of  our work, we requested interviews with the nine temporary employees  that AOC subsequently rehired and interviewed the five who responded in  order to obtain their perspective on AOC’s processes for laying off  temporary employees. This information is not generalizable to all rehired  temporary employees.

Appendix II: The Construction Division’s Direct and Indirect Costs

The Construction Division’s (hereafter the Division) costs include both  direct and indirect costs. Direct costs are costs directly attributed to and  expended on a project, such as labor (i.e., trade workers) and materials.  Indirect costs are costs that cannot be directly attributed to a single  project, such as costs associated with employee leave and training. Table  1 shows the components of the Division’s direct and indirect costs.

To pay for its indirect costs, the Division charges the jurisdictions what it  calls an “indirect rate” as part of the work it performs. As of October 2018,  the Division’s indirect rate was 0.85. The Division applies this rate to  every direct labor-hour associated with a project it performs for the  jurisdictions. For example, a trade worker that the Division employs who  has a hypothetical hourly cost of $45 also has an indirect cost of about  $38. Accordingly, that trade worker’s total hourly cost, which the Division  charges the jurisdictions, is about $83.

The Division developed the methodology for its indirect rate in 2012, in  consultation with the Architect of the Capitol’s (AOC) Chief Financial  Officer and the jurisdictions, after it determined that its funding model at  that time did not adequately recover costs that were not directly  attributable to projects. According to the Division, the primary driver for  developing this indirect rate was employee leave. Specifically, the  Division’s employees earn about 11 hours of leave per pay period, and  funds to cover that leave need to be recovered because they cannot be  obligated and charged to a project at the time the leave is earned but  prior to its being taken by the employee. The Division allocates its indirect  costs among the jurisdictions, using statutory authorities available to the  Architect of the Capitol.

According to AOC officials, historically, the Division’s indirect rate was  determined by staff within the Division. The rate was determined by  looking at historical cost and project data over the two prior fiscal years.  As of fiscal year 2019, AOC established a steering committee to  determine the Division’s indirect rate. This committee is comprised of five  members: AOC’s Chief Financial Officer, the Director of the Division, the  superintendent of the House Office Buildings jurisdiction, and a  superintendent from another large jurisdiction and a small jurisdiction.  According to AOC officials, the Division’s indirect rate is now based on  projected costs and projects for the current fiscal year, and this rate will  be monitored and may be adjusted throughout the year to address  potential gaps or overages in funding for the Division’s annual indirect  costs.

Appendix III: Architect of the Capitol’s Standard Temporary Appointment Letter

Appendix IV: Architect of the Capitol’s Acknowledgement Form for the Extension of Temporary Appointment

Appendix V: Comments from the Architect of the Capitol

Appendix VI: GAO Contacts and Staff Acknowledgments

In addition to the contact above, key contributors to this report included  Mary Crenshaw (Assistant Director); Maria Edelstein (Assistant Director);  Melissa Bodeau; Sarah Cornetto; Patrick Dibattista; Camille M. Henley;  Wesley A. Johnson; Efrain Magallan; Josh Ormond; Cheryl Peterson;  Kelly Rubin; and Laurel Voloder.

The Architect of the Capitol maintains more than 18.4 million square feet of buildings in Washington, D.C., including the U.S. Capitol, House and Senate office buildings, and the Library of Congress.

The Architect of the Capitol may use its Construction Division for renovations and repairs. The Division relies primarily on temporary workers, which allows it to quickly adjust its workforce to match its workload.

We recommended that the Division formalize how it collects information on the agency's construction priorities to help it ensure the appropriate workforce will be available when needed.