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[[underlined]] Museum Support Center [[/underlined]]

The Secretary introduced the following status report on the Museum Support Center and added that, thanks to the generosity of the Congress and the Regents, the Smithsonian was able to sign a $24,961,000 contract with the George Hyman Construction Company on January 8, 1981. The contract calls for completion within two years. The final specifications for the storage equipment are being prepared and a contract for the procurement of the initial increment of the equipment is expected to be awarded in September 1981.

It was noted that the General Services Administration will have a project manager on the site, and the Institution will be represented by Tom Peyton, Director of the Smithsonian Office of Facilities Services. Mr. Mineta expressed strong interest in being kept informed of project status and was advised that regular progress reports would be available to the Regents.

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On September 17, 1980, construction bids were received from seven general contractor firms. The lowest bid received for the completed project was $24,961,000. This exceeded funds available for an award by approximately $7.0 million and, thus, the bids had to be rejected.

The Institution staff, together with representatives of the General Services Administration and the architect, Metcalf/KCF, and their consultants, conducted a thorough analysis of the project, including discussions with each of the bidding construction firms. The analysis disclosed that the contractors anticipated an annual inflation rate of 12% during the two-year construction period, whereas the project was planned and budgeted on the basis of a two-step inflation increase of 8 and 10 %. Also, a cost-reducing plan was developed which included the