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Report to the Chairman, Subcommittee on National Security, Emerging 
Threats, and International Relations, Committee on Government Reform, 
House of Representatives:

United States General Accounting Office:

GAO:

September 2003:

Overseas Presence:

Rightsizing Is Key to Considering Relocation of Regional Staff to New 
Frankfurt Center:

Overseas Presence: Frankfurt Regional Center:

GAO-03-1061:

GAO Highlights:

Highlights of GAO-03-1061, a report to the Chairman, Subcommittee on 
National Security, Emerging Threats, and International Relations, 
House Committee on Government Reform 

Why GAO Did This Study:

The State Department plans to spend at least $80 million to purchase 
and renovate a multibuilding facility in Frankfurt, Germany. The 
facility, known as Creekbed, is scheduled to open in mid-2005.

The project is a key rightsizing initiative under the Presidentís 
Management Agenda to reassess and reconfigure the staffing of the U.S. 
overseas presence. Creekbed is expected to achieve the departmentís 
major rightsizing and regionalization goals. The Office of Management 
and Budget expects the project to serve as a model for developing 
other regional centers. 

GAO was asked to determine whether State fully examined the potential 
for relocating regional staff from outside Germany to Creekbed.

What GAO Found:

The Department of State indicated it is currently renewing earlier 
efforts to relocate staff from outside Germany to the new Frankfurt 
regional center. State said it would pursue a rigorous rightsizing and 
regionalization strategy in staffing the Frankfurt facility. State 
prematurely stopped its earlier efforts to relocate regional staff 
from other posts in August/September 2002 because staffing planners 
interpreted space planning estimates as indicating that the regional 
center would be fully occupied. However, according to GAO analysis, 
the facility was not full and significant additional space existed. 
After touring the facility and studying staffing requirements and 
space allocated for specific agencies, GAO found there was space 
available for additional staff. Successfully staffing the Frankfurt 
regional facility has the potential to optimize its use and achieve 
broader regionalization objectives. 

What GAO Recommends:

GAO is not recommending executive action. However, Stateís comments on 
a draft of this report are inconsistent with its rightsizing goals for 
the facility and may indicate a lack of commitment to relocating 
regional staff as originally planned. GAO believes that Stateís 
actions regarding staffing of the facility warrant oversight. 
Accordingly, GAO is including a matter for congressional consideration 
that suggests Congress direct State to submit a staffing plan for 
Creekbed that specifically lists positions to be relocated from 
outside Germany.

www.gao.gov/cgi-bin/getrpt?GAO-03-1061.

To view the full product, including the scope and methodology, click 
on the link above. For more information, contact Jess T. Ford at (202) 
512-4128 or fordj@gao.gov.

[End of section]

Contents:

Letter:

Results in Brief:

Background:

State Indicated It Has Renewed Efforts to Identify Staff for Relocation 
from Posts Outside Germany:

Conclusions:

Agency Comments and Our Evaluation:

Matter for Congressional Consideration:

Scope and Methodology:

Appendix I: Comments from the Office of Management and Budget:

Appendix II: Comments from the Department of State:

Figure:

Figure 1: Aerial Photo of 23-Acre Regional Center in Frankfurt, 
Germany:

Abbreviations:

OBO: Bureau of Overseas Buildings Operations 

OMB: Office of Management and Budget:

United States General Accounting Office:

Washington, DC 20548:

September 2, 2003:

The Honorable Christopher Shays 
Chairman, 
Subcommittee on National Security, Emerging Threats, and International 
Relations 
Committee on Government Reform 
House of Representatives:

Dear Mr. Chairman:

The Department of State plans to spend at least $80 million to purchase 
and renovate a 23-acre, multibuilding facility in Frankfurt, Germany. 
This facility, called Creekbed, is scheduled to open in mid-2005 and, 
when completed, will be the largest U.S. diplomatic facility overseas. 
As stated in State's business plan to purchase the facility, Creekbed 
will provide office space for staff currently working at the primary 
U.S. consulate building in Frankfurt, five nearby office annex 
buildings, and offices located at the Rhein Main Air Force Base near 
Frankfurt; some staff currently located at the U.S. embassy in Berlin, 
Germany; and a substantial number of regional staff currently assigned 
to other embassies who could be relocated to take advantage of the 
security that Creekbed will provide. The project is a key initiative 
under the President's Management Agend[Footnote 1]a to reassess and 
reconfigure, where appropriate, the staffing of U.S. embassies and 
consulates. In congressional testimony, State officials have noted that 
the project is expected to achieve the department's key rightsizing and 
regionalization goal[Footnote 2]s. According to the Office of 
Management and Budget (OMB), the project is also expected to serve as a 
model for future efforts to expand the use of regional centers to 
conduct embassy and consular operations.

As you requested, this report discusses whether the Department of State 
is actively pursuing the potential for relocating regional staff from 
outside Germany to the new Frankfurt regional center. To perform our 
work, we reviewed State planning documents and met with State 
Department officials in the Bureau of European and Eurasian Affairs, 
the Bureau of Overseas Buildings Operations (OBO), and the Office of 
Management Policy. We also visited the Creekbed facility and agencies 
in Frankfurt that will be housed in the facility. In addition, we made 
brief visits to U.S. embassies in Paris, Rome, Budapest, and Vienna to 
determine what actions they had taken to identify staff who could be 
considered for relocation to the Frankfurt facility.

Results in Brief:

The Department of State indicated it is currently renewing earlier 
efforts to relocate staff from outside Germany to the new Frankfurt 
regional center. State said it would pursue a rigorous rightsizing and 
regionalization strategy in staffing the Frankfurt facility. State 
plans to base this effort on analyses of security, mission, and cost 
factors associated with each agency's regional operations at posts in 
Europe, Eurasia, Africa, and the Near East. State stopped its earlier 
efforts to relocate regional staff from other posts in August/September 
2002 because staffing planners interpreted space planning estimates as 
indicating the regional center would be fully occupied. However, our 
analysis indicated that the facility was not full and that significant 
additional space existed. After we toured the facility and studied the 
staffing requirements and space allocated for specific agencies, we 
found there was space available for additional staff. In addition, we 
found that some agencies already in Frankfurt had overestimated the 
number of positions they would move to the facility, another factor 
that freed up space. Successfully staffing the Frankfurt regional 
facility offers the potential for optimizing the use of the facility 
and achieving broader regionalization objectives.

We believe that State's comments on a draft of this report are 
inconsistent with its stated expectations that the Frankfurt project 
will achieve the department's key rightsizing and regionalization goals 
and with its plans to pursue a comprehensive approach to staffing the 
new Frankfurt facility. The comments lead us to question whether the 
department seriously intends to consider relocation of regional staff 
to the facility. For example, State questioned the capacity of the 
facility and suggested that the facility was already rightsized because 
our draft report did not identify specific positions at locations 
outside Germany that could be relocated to Frankfurt. There is ample 
space in the facility to accommodate regional staff from other posts, 
and there are many regional staff currently working at other posts in 
buildings with inadequate security that could be considered for 
relocation. We believe that State's actions regarding staffing of the 
facility warrant oversight. Accordingly, we are including a matter for 
congressional consideration that suggests Congress direct State to 
submit a detailed staffing plan for the facility that specifically 
lists positions to be relocated to Frankfurt.

Background:

The Creekbed facility was built in 1937 as a German air force hospital. 
The U.S. military acquired it at the conclusion of World War II and 
used it as a hospital until the late 1990s. The facility was slated to 
revert to the German government in 2000. From 2000 to 2001, State 
conducted discussions with the German government to acquire the 
property. In July 2002, Creekbed was officially transferred from the 
German government to the State Department for a cost of $30.3 million. 
Since July 2002, OBO has been determining which renovations, including 
security and safety enhancements, will be necessary to prepare the 
facility to house the U.S. government's Consulate General in Frankfurt. 
The design and renovation cost for the facility is estimated at $49.8 
million, bringing total project costs to an estimated $80.1 million. 
State estimates that, if Creekbed had not been available, acquiring a 
site and building a comparable facility to meet U.S. government needs 
in Frankfurt would have cost roughly $260 million.

The facility consists of 13 major interconnected buildings that will 
provide 325,000 square feet of usable office space. In addition, an 
85,000-square-foot warehouse will be built on the property. The site 
also contains significant areas of land that can be used for 
construction and future expansion of operations if necessary. OBO 
stressed that the renovation will focus on building a perimeter wall, 
warehouse, and access controls; and performing basic renovation, such 
as painting and installing upgraded wiring. OBO does not plan to tear 
down walls, install air conditioning, or do other extensive work. 
Renovation of the facility is scheduled from September 2003 to March 
2005. State projects that by mid-2005, Creekbed will be fully 
operational.

Figure 1: Aerial Photo of 23-Acre Regional Center in Frankfurt, 
Germany:

[See PDF for image]

[End of figure]

According to State's business plan to purchase the facility, the 
Creekbed project had four fundamental objectives. First, the renovated 
facility would provide secure office space that is a vast improvement 
over security afforded by existing facilities in Frankfurt. Second, 
Creekbed would provide space for operations currently located at the 
Rhein Main Air Force Base, which the U.S. government has agreed to 
vacate in 2005 and return to the German government. Third, Creekbed 
would provide office space for staff currently working at the U.S. 
embassy in Berlin who will not have space in the new U.S. embassy 
building that is scheduled for construction. Finally, Creekbed has 
space to accommodate a number of regional staff from outside Germany 
who are assigned to embassies and consulates with security 
vulnerabilities. In its business plan, State identified several 
agencies from outside Germany that would be considered for relocation 
to Frankfurt. According to State, the Consul General in Frankfurt, and 
officials at each of the agencies in Frankfurt that we visited, 
Frankfurt is considered a good location as a regional hub because of 
its location and transportation links. They also noted that many of the 
offices currently assigned to the U.S. consulate have regional 
responsibilities.

Developing the Frankfurt facility as a regional center is consistent 
with recommendations of the Overseas Presence Advisory Panel[Footnote 
3] calling for use of regional centers and relocation of personnel to 
reduce security vulnerabilities at overseas posts. It is also 
consistent with a rightsizing framework we developed to support 
decision-making on overseas staffing. The framework encourages 
decisions to be based on a full consideration of the security, mission, 
and cost factors associated with each agency's presence and outlines 
rightsizing options, including regionalization of operations.[Footnote 
4]

OMB also cited this project as allowing U.S. agencies to put in one 
central location appropriate administrative functions now performed in 
multiple posts around Europe and beyond. Furthermore, the House 
Conference Report for the Consolidated Appropriations Resolution 
2003[Footnote 5] stated that the conferees support "the Department [of 
State]'s effort to initiate a consolidation, streamlining and 
regionalization of country and multi-regional staffing in Frankfurt, 
Germany." The report also said, "The success of this initiative will be 
measured largely by the staffing reductions made possible at less 
secure locations throughout Germany, Europe, Eurasia, Africa and the 
Near East.":

State Indicated It Has Renewed Efforts to Identify Staff for Relocation 
from Posts Outside Germany:

State indicated it has renewed its efforts to identify staff from posts 
outside Germany who could be relocated to the new Frankfurt regional 
center. According to State, this process will consider rightsizing 
factors such as security, mission requirements, and costs as well as 
possible changes in functions that would make operations more 
efficient. State's earlier efforts were prematurely halted in August/
September 2002 because staffing planners mistakenly interpreted space 
planning estimates as indicating the regional center would be fully 
occupied. However, in May 2003, we analyzed State's staffing 
requirements for Creekbed in relation to the facility's capacity and 
found additional space was available. We briefed both State and OMB 
officials on the capacity issue. OMB urged State to reopen the staffing 
process and to consider relocating more regional staff to Frankfurt.

State's Renewed Process for Staffing Creekbed:

In May 2003, State announced that it had restarted a process to 
identify staff from posts outside Germany who could be relocated to 
take advantage of Creekbed's available office space and enhanced 
security. State is reassessing the facility's space plans and staffing 
projections for all agencies and is focusing on identifying which 
additional regional activities might be moved to the Frankfurt center, 
especially where this action would improve security for U.S. government 
personnel. State also indicated that it would pursue a rigorous 
rightsizing and regionalization strategy in staffing the Frankfurt 
facility. State has said that under its new effort, it will analyze 
security, mission, and cost factors associated with each agency's 
regional operations at posts in Europe, Eurasia, Africa, and the Near 
East. On June 12, 2003, State sent formal guidance to the ambassadors 
at each post, directing them to identify staff who might transfer to 
the regional center in Frankfurt. To help the posts identify positions 
for relocation, State plans to conduct a detailed, Web-based survey 
based on our rightsizing framework. State plans to have revised 
staffing estimates for Frankfurt at the end of 2003.

The Frankfurt facility will have a capacity of about 1,100 desk 
positions.[Footnote 6] The facility will have sufficient space to 
consolidate existing diplomatic operations in Frankfurt as well as 
bring in significant numbers of personnel from posts outside Germany to 
expand regional operations. Positions currently in Germany envisioned 
to relocate to the Frankfurt regional center include a total of about 
900 personnel from the current Frankfurt consulate, offices at the 
Rhein Main Air Force Base, and the embassy in Berlin. Based on current 
capacity estimates, there is also desk space for about 200 staff who 
could be relocated from other posts.

To help address staffing decisions, State also plans to undertake what 
it characterizes as a "think outside the box" exercise by asking 
embassies to examine whether any functions in Europe or elsewhere can 
be reengineered to be more effective. Our rightsizing framework 
encourages decision makers to consider reengineering actions such as 
competitively sourcing support functions, regionalizing contract 
activities, and centralizing warehouse operations.[Footnote 7] This 
kind of reengineering, which could help reduce costs of support 
functions and staffing requirements for embassies, should be weighed 
along with the options for relocating staff to regional centers.

Although State has renewed its process for staffing Creekbed, its 
comments on a draft of this report lead us to question State's 
commitment to the process. State's comments and our evaluation of them 
are discussed in more detail on page 10.

Resistance from Some Agencies Is Expected:

Although substantial space exists for relocating staff from other 
posts, State documents indicate that the department may encounter some 
resistance among agencies identified to relocate. While some agencies 
and offices agree that relocation would improve their security, State 
anticipates that they will raise concerns about their relative ability 
to effectively carry out their mission from Frankfurt, the cost of 
relocating staff from other locations, the convenience of airline 
connections, and costs related to living and operating out of Germany. 
These issues indicate that State and other agencies will have to 
carefully weigh the security, mission, and cost trade-offs associated 
with staffing relocation decisions. In some cases, security issues may 
be so compelling that some staff will have to be relocated.

State's Earlier Effort Was Halted Prematurely:

From September 2001 to August 2002, State tried to identify positions 
with regional responsibilities that could be relocated to Creekbed. 
Although State initially identified potential positions, State halted 
its efforts in August/September 2002.

In September 2001, State initiated discussions with key agencies 
operating at its European posts and asked them to consider relocating 
to Frankfurt if it would be substantially more secure than their 
current facilities. This process was more formally articulated in a 
March 2002 State cable to 48 European and Eurasian posts having 
regional coverage, asking ambassadors to review their staffing with an 
eye toward relocating to Frankfurt staff whose primary responsibilities 
were regional. Although many of the posts were slow to respond, some 
listed possible candidates for relocation. For example, one post 
identified three agencies with a combined total of more than 50 staff 
members whom the ambassador believed should be considered for 
relocation.

Although this effort initially identified positions for possible 
relocation, it was halted when planners in State's Bureau of European 
and Eurasian Affairs received a document from OBO in August 2002 
stating that "the facility is at 100% occupancy" based on a projected 
staffing level of about 900 desks. OBO later explained that this 
document meant that the facility was filled to the requirements level 
of 900 positions but did not mean the facility was filled to capacity. 
OBO acknowledged that the wording of the document was confusing. 
However, State officials told us that based on that document, the 
department concluded there would be no additional room in the facility 
for staff beyond the 900-desk staffing level. (The 900-desk projection 
only included staff currently in the Frankfurt consulate offices, staff 
currently at the Rhein Main Air Force Base, newly created staff 
positions, and staff "overflow" from the U.S. embassy in Berlin, 
Germany.) As a consequence, in August/September 2002, State stopped its 
efforts to relocate staff from posts outside Germany. For example, in 
September 2002, State's Under Secretary for Management sent a letter to 
the U.S. Agency for International Development, one of the key agencies 
initially identified by State as having staff potentially available for 
relocation from outside Germany, indicating that the Frankfurt facility 
would be fully occupied.

Analysis Showed Facility Has Additional Space:

Beginning in March 2003, we performed a detailed analysis of State's 
staffing requirements for Creekbed in relation to the facility's 
capacity. We found that the facility had substantial additional 
capacity beyond the 900-desk level, affording opportunity for the 
relocation of personnel from posts outside Germany.

Before visiting the Frankfurt facility in early May 2003, we 
interviewed the private contractor officials responsible for the space 
planning and concept design for Creekbed, who confirmed that there was 
space available for additional staff. While at the facility, we 
examined space allotted for two agencies and found the space 
significantly exceeded the number of positions slated to fill it. For 
example, one agency projected 28 office personnel for the facility but 
was allotted space for about 38 offices. Another agency also projected 
28 office personnel but was allotted space for about 50 offices.

In addition, we found that there was potentially more office space 
available at Creekbed because some agencies did not conduct a rigorous 
staffing process before submitting their staff projections. During our 
fieldwork in Frankfurt, we reviewed the documented 2002 staffing 
projections with the agencies in Frankfurt that will be moving into 
Creekbed and found that some agencies disputed their earlier 
projections. Some agencies had overestimated their individual staffing 
requirements, which were eventually curtailed by their headquarters in 
Washington, D.C. We have previously reported that U.S. agencies do not 
take a systematic approach to determining long-term staffing needs for 
embassy buildings scheduled for construction.[Footnote 8]

We discussed these issues with the Consul General and the facility 
manager in Frankfurt, who agreed that the facility had substantial 
space to accommodate staff from other posts. When we completed our 
fieldwork in May 2003, we also discussed our observations with 
officials in State's Bureau of European and Eurasian Affairs, the 
Office of Management Policy, and OBO; and with OMB. They, too, agreed 
that there was additional space. State then announced that it was 
renewing its efforts to regionalize operations in Frankfurt. In a May 
2003 letter to OMB, State's Under Secretary for Management said that 
the department was reopening the space plan for the facility and 
anticipated that Creekbed would accommodate significant additional 
positions. State indicated that it took this action because OMB urged 
it to do so. In a June 2003 cable to all posts, State said that it is 
considering which additional activities might be relocated to Creekbed. 
State emphasized that its renewed effort is part of its overall 
rightsizing strategy.

Conclusions:

Successful staffing of the Frankfurt facility consistent with State's 
regionalization goals is a critical step in efforts to rightsize U.S. 
overseas operations. In fact, it may be the single most visible and 
concrete example of a rightsizing initiative by the U.S. government in 
the near term. We believe that the revised staffing plans for Creekbed 
will provide State a significant opportunity to work with other 
agencies to regionalize diplomatic operations in Europe and develop a 
more rational, secure, and cost-effective overseas presence. The 
facility has ample, available office and other space that, when fully 
renovated, will provide a secure alternative location to conducting 
regional operations at embassies and consulates with physical security 
deficiencies. Deciding which U.S. government positions will be 
relocated to the facility will require a careful consideration of the 
security, mission, and cost factors associated with agencies' presence 
at individual posts. In some situations, State may encounter agency 
resistance to relocation. However, security considerations may be so 
compelling that relocation of certain staff may be necessary. In other 
cases, State and other agencies will have to work hard to reach 
agreement on the relative importance of the security, mission, and cost 
factors associated with the relocation decision and how the factors 
should be weighed. More importantly, it will require a strong and 
continual commitment by State to the broader objective of rightsizing 
the U.S. overseas presence.

Agency Comments and Our Evaluation:

OMB and the Department of State provided written comments on a draft of 
this report (see apps. I and II). OMB said that it is working closely 
with State to develop a plan of action to appropriately staff the new 
facility, to assess if staff could be shifted from their current 
overseas location to Frankfurt, and to discuss potential moves to 
Frankfurt with headquarters staff at all agencies. OMB also expressed 
the hope that this facility will serve as an example of a best practice 
for the development of other regional centers around the world.

State said that OBO's estimate that the facility could accommodate 
about 1,100 desk positions represented a maximum theoretical capacity 
and that the actual capacity would probably be less. We subsequently 
asked OBO, which is State's expert on overseas real estate and facility 
issues, if it was confident of its capacity estimate. OBO reiterated 
its estimate stating that it has identified space in the facility for 
about 1,100 personnel. However, even if the capacity of the facility 
were slightly less, there would still be ample room to accommodate some 
staff currently assigned to other locations outside Germany.

State also noted that our report did not identify specific agencies or 
staff that we believe should be relocated to Frankfurt. State said this 
suggested that we do not believe that there are suitable candidates for 
relocation. This is not the case. As we noted in this report, State's 
business plan for the purchase of the facility indicated it has space 
to accommodate regional staff from outside Germany who are assigned to 
embassies with security vulnerabilities. Moreover, State's plan 
identified 73 staff from five agencies at posts outside Germany for 
potential relocation. As further noted in this report, State's 
subsequent efforts at its European and Eurasian posts identified 
suitable candidates for relocation, but that exercise was halted 
because State mistakenly believed that the facility did not have 
sufficient space. Our work at the four posts outside Germany validated 
the existence of significant numbers of staff with regional 
responsibilities, many of which were located in buildings with 
substandard security. We did not identify specific candidates for 
relocation in this report because State said that it was conducting a 
full assessment of staffing options for Frankfurt, and we did not want 
to preempt that assessment. However, in our briefings with State and 
OMB officials, we discussed our fieldwork observations and told them 
that there were many staff that could be considered for relocation. For 
example, there were at least 87 staff with regional responsibilities in 
Vienna and Budapest that were assigned to space with substandard 
security. Furthermore, we noted that in 2002, we had identified 
regional positions in Paris that could be considered for relocation to 
Frankfurt based on security, mission, and/or cost factors.[Footnote 9]

State also said that it believes, based on their follow-up to the 1999 
Overseas Presence Advisory Panel report, that the U.S. government's 
overseas presence is already rightsized. We have previously pointed out 
the substantial weaknesses in the pilot studies which provided the 
basis of State's follow-up.[Footnote 10] State subsequently indicated 
that it intended to reinvigorate the rightsizing process consistent 
with the President's Management Agenda, OMB's directives, and our 
rightsizing framework.

In our view, State's comments are inconsistent with its (1) stated 
expectations that the Frankfurt project will achieve the department's 
key rightsizing and regionalization goals and (2) plans to conduct a 
full assessment of staffing options for the Frankfurt regional center. 
In addition, State's comments lead us to question whether the 
department seriously intends to implement its business plan for the 
Frankfurt center regarding relocating regional staff, as well as its 
commitment to the overall rightsizing process. We believe that State's 
actions regarding staffing of the facility warrant oversight.

State also provided technical comments that we have incorporated into 
this report, as appropriate.

Matter for Congressional Consideration:

In view of State's comments on a draft of this report and the continued 
importance of rightsizing the overseas U.S. presence consistent with 
security, mission, and cost factors, the Congress may wish to direct 
the Secretary of State to submit a detailed staffing plan for the 
Frankfurt facility that specifically lists positions to be relocated to 
Frankfurt.

Scope and Methodology:

To determine State's process for creating staffing projections for the 
Frankfurt regional center, we reviewed documents and interviewed 
officials in State's Bureau of European and Eurasian Affairs, OBO, and 
Office of Management Policy. We visited the current consulate 
facilities in Frankfurt and spoke with the Consul General and 
appropriate State officers about the current security status of their 
consulate buildings as well as the multiple projections of staff 
relocating to the facility. We spoke to representatives from agencies 
that will be moving to the Creekbed facility. We also toured the 
facilities at the Rhein Main Air Force Base that are scheduled to be 
relocated by June 2005 as well as the currently empty Frankfurt 
regional center facility. In addition, we visited other posts in 
Europe--Paris, Rome, Budapest, and Vienna--to determine (1) the extent 
to which each has agencies and personnel performing regional functions 
that could be considered for relocation to Frankfurt based on the 
nature of their mission and/or their security vulnerability and (2) 
what actions these embassies had taken to identify staff who could be 
considered for relocation to the Frankfurt facility. Specifically, at 
these posts, we interviewed not only the agencies that were earlier 
identified by State or by their ambassadors as being potential 
relocatees, but also officials from other agencies with regional 
responsibilities. To determine the facility's capacity to accommodate 
staff from outside Germany, we interviewed the private contractor 
officials in Albany, New York responsible for the initial feasibility 
design to discuss their space planning and concept design for the 
Frankfurt center. We also compared OBO's capacity estimates with 
staffing requirements for the facility. In addition, during our visit 
to Creekbed, we compared the size of office space allocated to two 
different agencies in Frankfurt with the number of people in those 
agencies. We also met with officials in OMB to obtain documentation on 
the plans for purchasing the facility and to discuss State's approach 
to staffing it.

We conducted our work from February 2003 through August 2003 in 
accordance with generally accepted government auditing standards.

We are sending copies of this report to the Director of OMB and the 
Secretary of State. We are also sending copies of this report to other 
interested Members of Congress. Copies will be made available to others 
upon request. This report will also be available at no charge on the 
GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please 
contact me on (202) 512-4128. John Brummet, Janey Cohen, Lynn Moore, 
Ann M. Ulrich, and Joseph Zamoyta made key contributions to this 
report.

Sincerely yours,

Jess T. Ford:
Director, International Affairs and Trade:

Signed by Jess T. Ford: 

[End of section]

Appendix I: Comments from the Office of Management and Budget:

EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET 
WASHINGTON, D.C. 20503:

August 15, 2003:

Ms. Susan Westin:

Managing Director, International Affairs and Trade United States 
General Accounting Office Washington, DC 20548:

Dear Ms. Westin:

The Office of Management and Budget appreciates the opportunity to 
provide comments on your draft report, "Rightsizing Considerations Are 
Key to Renewed Effort to Relocate Staff to Frankfurt Regional Center." 
The framework developed in this GAO report is a valuable contribution 
to the rightsizing initiative.

We support GAO's efforts to encourage the Department of State and other 
agencies to appropriately staff the Creekbed facility and to develop a 
regional rightsizing framework that can be applied worldwide. OMB 
continues to work closely with the State Department to develop a plan 
of action to appropriately staff the new facility and to facilitate the 
effective review of all existing overseas staff. OMB and the State 
Department coordinated a survey of European and Eurasian posts and 
reviewed Near East Asian and South Asian bureau positions to assess if 
any resources could be shifted from their current overseas location to 
Frankfurt. Further, OMB and the Department of State have frequent 
discussions with headquarters staff at all agencies regarding potential 
moves to Frankfurt. OMB has also asked the State Department to conduct 
an analysis of staff currently located in the Frankfurt consulate.

As you know, we have worked closely with the GAO on rightsizing, the 
development of the Frankfurt regional facility, and the Capital 
Security Cost Sharing proposal, and we truly appreciate the efforts and 
the recommendations made by the GAO on each of these initiatives. We 
look forward to working with you, the Department of State, and other 
agencies to ensure that the Frankfurt Creekbed facility is successfully 
staffed. It is our hope that this facility will serve as an example of 
best practice for the development of other regional centers around the 
world.

Again, thank you for the opportunity to comment on this draft report. 
If you have any questions concerning this response, please contact Ms. 
Alexandra Gianinno of the International Affairs Division at (202) 395-
1483.

Signed by: 

Robin Cleveland 
Associate Director National Security Programs:

[End of section]

Appendix II: Comments from the Department of State:

United States Department of State Washington, D.C. 20520:

AUG 14 2003:

Dear Ms. Westin:

We appreciate the opportunity to review your draft report, "OVERSEAS 
PRESENCE: Rightsizing Considerations Are Key to Relocate Staff to 
Frankfurt Regional Center," GAO-03-1061, GAO Job Code 320555.

The enclosed Department of State comments are provided for 
incorporation with this letter as an appendix to the final report.

If you have any questions concerning this response, please contact Jay 
Anania, Director, Office of Management Policy, at (202) 647-0093.

Signed by: 

Christopher B. Burnham: 

Assistant Secretary for Resource Management and Chief 
Financial Officer:

Enclosure:

As stated.

cc:

GAO/IAT - John Brummet State/OIG - Luther Atkins State/M/P - Jay Anania 
State/H - Paul Kelly:

Ms. Susan S. Westin, Managing Director, International Affairs and Trade, 
U.S. General Accounting Office.

Department of State Comments on GAO Draft Report OVERSEAS PRESENCE: 
Rightsizing Considerations Are Key to Renewed Effort to Relocate Staff 
to Frankfurt Regional Center (GAO 03-1061):

The Department of State welcomes GAO's on-going rightsizing work, 
including its review of the Frankfurt Creekbed project.

Creekbed offers a cost-effective solution to the need to provide safe, 
secure, and modern facilities to U.S.G. staff based in Frankfurt. The 
remodeled Creekbed facility will meet security requirements, including 
a 100-foot set back, and will house numerous employees now scattered 
among six inadequate and insecure sites in Frankfurt. The Department of 
State estimates that, were Creekbed not available, acquiring a site and 
building a new facility to meet U.S.G. needs would have cost roughly 
$260 million, almost four times Creekbed's projected cost of $73 
million.

Based upon the recent review of desk capacity requested by OMB, the 
Department now estimates that Creekbed has a maximum theoretical 
capacity of approximately 1,100 desks. This does not take into account 
as yet undetermined requirements such as relocating printing operations 
or for features such as conference and training space, which would 
reduce the overall desk count. We assume that those requirements, once 
determined, will result in an actual capacity that falls short of 1,100 
desks.

GAO states that it visited four posts other than Frankfurt (Paris, 
Rome, Budapest, and Vienna) "to determine the extent to which each has 
agencies and personnel performing regional functions that could be 
considered for relocation to Frankfurt based on the nature of their 
mission and/or their security vulnerability." We regret that the report 
does not state whether GAO identified any agencies or personnel that it 
believes should be considered for relocation to Frankfurt. The report's 
silence on this point suggests that GAO does not believe there are any 
suitable candidates for such a move. This tends to support the 
Department's judgment that the U.S. Government's interagency overseas 
presence is already substantially rightsized, based on the follow-up to 
the 1999 Overseas Presence Advisory Panel report and noted in the 
Department's report to Congress pursuant to Section 302 (b) (3) of the 
FY 2003 Department of State Authorization Act (P.L. 107-671).

We look forward to continuing to work with GAO and the Office of 
Management and Budget on rightsizing.

FOOTNOTES

[1] Office of Management and Budget, President's Management Agenda, 
Fiscal Year 2002 (Office of Management and Budget, Washington, D.C. 
Aug. 2001). 

[2] U.S. Department of State, The U.S. Presence Overseas, Testimony of 
the Under Secretary of State for Management, Grant S. Green, Jr., 
before the House Committee on Government Reform, Subcommittee on 
National Security, Veterans Affairs, and International Relations, 107th 
Congress (Washington, D.C. May 1, 2002).

[3] Former Secretary of State Madeleine Albright established the panel 
following the 1998 embassy bombings in Africa to consider the 
reorganization of embassies and consulates. Department of State, 
America's Overseas Presence in the 21st Century, The Report of the 
Overseas Presence Advisory Panel (Department of State, Washington, 
D.C. Nov. 1999). 

[4] U.S. General Accounting Office, Overseas Presence: Framework for 
Assessing Embassy Staff Levels Can Support Rightsizing Initiatives, 
GAO-02-780 (Washington, D.C. July 26, 2002).

[5] House of Representatives, Report 108-10: Making Further Continuing 
Appropriations For The Fiscal Year 2003, And Other Purposes, Conference 
Report to Accompany H.J. Res. 2 (U.S. Government Printing Office, 
Washington, D.C. Feb. 13, 2003).

[6] There will be additional personnel working at the facility who do 
not require desks, such as security guards and maintenance personnel. 

[7] GAO-02-780.

[8] U.S. General Accounting Office, Embassy Construction: Process for 
Determining Staffing Requirements Needs Improvement, GAO-03-411 
(Washington, D.C. Apr. 7, 2003.)

[9] GAO-02-780.

[10] U.S. General Accounting Office, Overseas Presence: More Work 
Needed on Embassy Rightsizing, GAO-02-143 (Washington, D.C.; Nov. 27, 
2001).

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