Air and Space Museum's $528M Renovation Had No Approval Trail
Summary
A Smithsonian Inspector General audit of the National Air and Space Museum's revitalization contract -- which grew from $480.2 million to $528.1 million through 901 change orders -- sampled 54 of them for testing. 41 exceeded the dollar threshold requiring sign-off from the project's own Change Control Board. None had documentation showing that board ever approved them. Separately, auditors found the Smithsonian paid $148,905 for costs already covered elsewhere in the contract, including $137,522 billed twice for the same work.
A $480 million contract grew by another $48 million
In January 2017, the Smithsonian awarded a Guaranteed Maximum Price contract worth $480,236,337 to a joint venture of three construction firms to renovate the National Air and Space Museum -- redesigning all 23 exhibition spaces, replacing the exterior cladding, and overhauling the mechanical systems over a planned seven years. By November 2022, SI had approved 54 contract modifications bundling 901 individual change orders, known as Proposed Change Orders (PCOs), pushing the Guaranteed Maximum Price⧉ up to $528,085,168 -- a $47.8 million increase.
Auditors from Sikich CPA LLC, engaged by the Smithsonian's , didn't test all 901 PCOs. They picked a judgmental sample of 54 -- weighted toward higher-dollar and higher-risk changes -- worth $27,073,642. That's just 6 percent of the PCOs by count, but 46 percent of the dollar value of every change made to the contract.
View data as table
| Below the $50,000 approval threshold | 13 | Did not require Change Control Board (CCB) sign-off |
|---|---|---|
| Required CCB approval -- documented | 0 | No PCO in the sample had a documented CCB approval on file |
| Required CCB approval -- no documentation | 41 | Exceeded the $50,000/14-day threshold; the project team could not produce approval records for any of them |
The board that was supposed to sign off left no sign it did
The project's own Change Management Plan is specific: any change over $50,000, or with a schedule impact beyond 14 days, requires approval from a Change Control Board (CCB) drawn from the Smithsonian's construction and contracting offices, backed by a completed Change Request Form. Of the 54 PCOs auditors sampled, 41 crossed that threshold. For none of them could the project team produce a record of CCB approval. Across all 54 sampled PCOs -- including the 13 below the threshold -- the team could locate only three incomplete Change Request Forms, and none had enough detail to be matched to a specific PCO.
The project team told auditors the CCB had informally raised its own approval floor from $50,000 to $100,000, which would exempt 7 of the 41 flagged PCOs -- but could not locate a record of that decision either. For the other 34, the team said there simply isn't a process for keeping CCB approval records at all. In its written response, SI's Under Secretary for Finance and Administration disagreed that the informal threshold change added risk, while still concurring with the recommendation to update its policies.
View data as table
| Direct costs already covered by markups | 137,522 | 18 of 54 sampled PCOs double-billed costs the contract's 21% overhead-and-profit markup already covered |
|---|---|---|
| Under-applied credit markups | 7,915 | 3 instances where subcontractor credit documentation didn't show the required markup |
| Excess equipment-rental markups | 3,468 | 2 instances billed at 15-21% overhead and profit against a 6% contract cap |
Paying once for the crew, again for the same work
Separate from the documentation gap, auditors checked whether the sampled change orders' prices were themselves correct. The contract lets the construction manager and subcontractors add a combined 21 percent markup on top of direct costs to cover overhead and profit -- things like project supervision, mobilization, and site management. In 18 of the 54 sampled PCOs, auditors found SI had also paid those same categories of cost as separate line-item direct costs, without questioning or removing them -- paying for the same work twice. The overpayment totaled $137,522. Two smaller findings -- $7,915 in subcontractor credits that may not have carried the required markup, and $3,468 in equipment-rental markups billed at 15 to 21 percent against the contract's 6 percent cap -- brought the total questioned costs to $148,905.
SI concurred with all 10 of the audit's recommendations, mostly with a target completion date of December 16, 2024. But on the three cost-recovery recommendations specifically, its written response said it had "completed our initial review and at this time, believe these costs were allowable" -- meaning the $148,905 auditors flagged is disputed by the agency that would have to pay it back, not a confirmed refund. Sikich, the audit firm, classified all 10 recommendations as resolved but open pending verification.
- 41 of 54 sampled change orders exceeded the $50,000 threshold requiring Change Control Board approval, and none had documentation showing the board approved them -- on a contract whose price had already grown by $47.8 million.
- Across all 54 sampled change orders, the project team could produce only three incomplete Change Request Forms -- the internal record meant to document who requested each change and why -- none detailed enough to tie to a specific order.
- Auditors flagged $148,905 in questioned costs, including $137,522 the Smithsonian paid twice: once as a contractor markup, again as a duplicated direct cost.
- The project team told auditors the CCB had informally doubled its own approval threshold to $100,000 -- with no record of that decision either, leaving the higher bar itself undocumented.
- SI concurred with all 10 recommendations but disputes the underlying cost findings, telling auditors in writing it believes the $148,905 in questioned costs 'were allowable' pending further review.
Sikich's sample of 54 PCOs was judgmental, not random or statistically representative, and its findings cannot be projected onto the full population of 901 PCOs in the contract; the audit does not test whether the same documentation gaps exist outside the sample. No fraud is alleged -- the audit describes a control failure (missing approval records) and separate pricing errors (duplicated or excess markups), not deliberate wrongdoing, and this piece describes every finding by role (the project team, the CCB, the construction manager) rather than by name, consistent with how the audit itself attributes its findings. The report's transmittal and management-response memos identify the individual Smithsonian officials who received and responded to the audit in their official capacities; none is named here because none is alleged to have done anything wrong personally. As of the report's September 26, 2024 issue date, all 10 recommendations were open, with most SI-committed completion dates of December 16, 2024; this piece describes the audit record as issued and does not independently confirm what has since closed.
Sources(2) ▾
- Smithsonian Institution Office of the Inspector General, Performance Audit of the National Air and Space Museum Revitalization Project's Contract Modifications (OIG-A-24-08) (2024-09-26) — A performance audit by Sikich CPA LLC, engaged by the Smithsonian Institution's Office of the Inspector General, transmitted September 26, 2024. The audit tested whether contract modifications for the National Air and Space Museum (NASM) Revitalization Project -- a Guaranteed Maximum Price construction contract that grew from $480,236,337 to $528,085,168 between January 2017 and November 2022 -- were reasonable, necessary, within the scope of the contract, and effectively awarded and administered. Hosted directly on oig.si.edu, the Smithsonian's own inspector-general domain. oig.si.edu · original document
- Smithsonian Institution Office of the Inspector General, OIG Hotline (2026-07-21) — The Smithsonian 's public hotline page, re-fetched this iteration to source the call-to-action contact details in this piece: phone, email, mailing address, and online complaint form for reporting fraud, waste, and abuse in Smithsonian programs and operations -- the same office that produced the audit this article covers. oig.si.edu · original document
Comments
Always open. Logged-in readers can annotate paragraphs in place.
A Smithsonian Institution Office of the Inspector General audit⧉ of the National Air and Space Museum's Revitalization Project found that of 54 sampled contract change orders, 41 exceeded the dollar threshold requiring approval from the project's own Change Control Board -- and the project team could not produce documentation showing the board approved a single one of them. Testing the same sample for cost accuracy, auditors separately found the Smithsonian had paid $148,905 for work already covered elsewhere in the contract, including $137,522 billed as a direct cost on top of a markup meant to cover it.