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We are conducting a series of audits of the Smithsonian’s management of the National Museum of African American History and Culture (NMAAHC) building project.
This is the second report covering the contract modification process. Our audit objectives were to assess the efficiency and effectiveness of the Smithsonian’s: 1) contract modification process for the construction management at-risk(CMR) contract; and 2) oversight process for awarding construction packages under the CMR contract.
In 2003, Congress established NMAAHC, dedicated to the collection, preservation, research, and exhibition of African American historical and cultural material. The $500 million funding for this project will be split evenly between federal appropriations and private donations. The Smithsonian announced that the museum will open to the public in November 2015.
While Smithsonian management actively oversees the National Museum of African American History and Culture (NMAAHC) building project, they need to continue to improve the efficiency of awarding and administering construction packages for the construction management at-risk (CMR) contract. First, the Contract Specialist did not authorize the CMR contractor to begin work on construction packages soon after executing the modifications. This partially contributed, along with other process inefficiencies, to a 51 day delay in the start of construction.
In addition, the Smithsonian did not adequately monitor the CMR contractor’s allowance pool to ensure adequate competition. Therefore, this increases the risk that the Smithsonian may not be receiving a fair and reasonable price for this work.
The conditions we identified were primarily caused by a lack of written policies and procedures within the Office of Contracting and Personal Property Management (OCon&PPM) and the Office of Facilities, Engineering, and Operations (OFEO) for awarding and administering construction packages.
To improve the efficiency and effectiveness of the CMR contract modification process, we recommended that management reinforce project priorities and that OCon&PPM and OFEO develop and implement policies and procedures for awarding construction packages.
Management concurred with our findings and recommendations and has planned corrective actions to address the recommendations. We will continue to monitor management’s progress towards completion of these recommendations.