Embassy Construction:

Achieving Concurrent Construction Would Help Reduce Costs and Meet Security Goals

GAO-04-952: Published: Sep 28, 2004. Publicly Released: Sep 28, 2004.

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After the 1998 bombings of two U.S. embassies in Africa, the State Department embarked on a multibillion-dollar, multiyear program to build new, secure facilities on compounds at posts around the world. The Secure Embassy Construction and Counterterrorism Act of 1999 generally requires that all U.S. agencies, including the U.S. Agency for International Development (USAID), colocate offices within the newly constructed compounds. This report discusses how State is incorporating office space for USAID into the construction of new embassy compounds and the cost and security implications of its approach.

State has built new embassy compounds in separate stages--scheduling construction of the USAID annex after work has begun (or in many cases after work has been completed) on the rest of the compound. State and USAID attributed this practice to a lack of full simultaneous funding for construction at nine locations through fiscal year 2004. Concurrent construction of USAID annexes could help decrease overall costs to the government and help achieve security goals. Concurrent construction would eliminate the second expensive mobilization of contractor staff and equipment and added supervision, security, and procurement support expenses that result from nonconcurrent construction. State has estimated that if nine future USAID annexes scheduled for nonconcurrent construction are built concurrently, it could save taxpayers $35 million. Extrapolating from data provided by State, GAO estimated a total cost savings of around $68 million to $78 million if all 18 future USAID projects are built concurrently. GAO also found that designing additional space for USAID within the main office building, or chancery, may cost less than erecting a separate annex, depending on a number of factors, including the size and configuration of the planned buildings. In addition to cost considerations, concurrent construction could help State and USAID comply with the colocation requirement and decrease the security risks associated with staff remaining outside of the embassy compound. For example, USAID staff who remain in a temporary USAID facility after other U.S. government personnel move into a new embassy compound may be more vulnerable to terrorist attack because the temporary facility does not meet security standards for new buildings and may be perceived to be a "softer" target relative to the new, more secure embassy compound. State's current plans call for continued nonconcurrent construction through fiscal year 2009. State acknowledged that there are substantial advantages to concurrent construction and has indicated that it may revise its building schedule to allow for more concurrent construction if a new cost-sharing proposal to fund new embassies by allocating construction costs among all agencies having an overseas presence is implemented in fiscal year 2005. However, even if cost sharing is not implemented, there are still opportunities for building some USAID facilities concurrently with the overall construction of the embassy compound if State, with congressional consent, revised its plan and rescheduled some projects.

Matter for Congressional Consideration

  1. Status: Closed - Not Implemented

    Comments: Congress passed Capital Cost Sharing, rendering this moot.

    Matter: In order to minimize costs and further improve security associated with building new embassy compounds, if the Capital Security Cost-Sharing Program is not implemented in fiscal year 2005, Congress may wish to consider alternative funding approaches to support concurrent construction of new embassy compounds.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In September 2004, (Embassy Construction: Achieving Concurrent Construction Would Help Reduce Costs and Meet Security Goals, GAO-04-952, 09/28/04) GAO recommended that State (1) achieve concurrent construction of U.S. Agency for Development (USAID) facilities to the maximum extent possible and (2) consider, in coordination with USAID, incorporating USAID space into single office buildings, where appropriate. State agreed with the recommendations and stated that it planned to revise its long-range overseas buildings plan to implement the recommendations. State has implemented the recommendations. Except for cases in which the new embassy compound has already been built without space for USAID, State no longer plans for nonconcurrent construction of future embassy compounds and no longer builds separately-funded facilities for USAID. The Long-Range Overseas Buildings Plan for 2006-2011 includes NECS with space for USAID as well as other agencies in single buildings. GAO identified nine projects in which State originally planned to build a new embassy compound that included a separate building for USAID that would be built noncurrently. Analysis of recent plans and discussion with State shows that of the nine projects, two are underway with nonconcurrent separate facilities for USAID, one project included two construction sites and one project that was originally planned with a separate facility is now being built to include one building that incorporates space for USAID. The original cost of the project was $108,236,000. The current cost is $105,987,000. GAO-04-952 also suggested that Congress consider alternatives for funding future compounds if the Capital Cost-Sharing Proposal was not implemented. However, the proposal was implemented in 2005. The present value is about $2.329 million.

    Recommendation: The Director of State's Bureau of Overseas Buildings Operations should update the Long-Range Overseas Buildings Pan to achieve the concurrent construction of USAID facilities to the maximum extent possible.

    Agency Affected: Department of State: Bureau of Overseas Buildings Operations

  2. Status: Closed - Implemented

    Comments: September 2004, (Embassy Construction: Achieving Concurrent Construction Would Help Reduce Costs and Meet Security Goals, GAO-04-952, 09/28/04) GAO recommended that State (1) achieve concurrent construction of U.S. Agency for Development (USAID) facilities to the maximum extent possible and (2) consider, in coordination with USAID, incorporating USAID space into single office buildings, where appropriate. State agreed with the recommendations and stated that it planned to revise its long-range overseas buildings plan to implement the recommendations. State has implemented the recommendations. Except for cases in which the new embassy compound has already been built without space for USAID, State no longer plans for nonconcurrent construction of future embassy compounds and State no longer builds separately-funded facilities for USAID. The Long-Range Overseas Buildings Plan for 2006-2011 includes NECS with space for USAID as well as other agencies in single buildings. GAO identified nine projects in which State originally planned to build a new embassy compound that included a separate building for USAID that would be built noncurrently. Analysis of recent plans and discussion with State shows that of the nine projects, two are underway with nonconcurrent separate facilities for USAID, one project included two construction sites and one project that was originally planned with a separate facility is now being built to include one building that incorporates space for USAID. The original cost of the project was $108,236,000. The current cost is $105,987,000. GAO-04-952 also suggested that Congress consider alternatives for funding future compounds if the Capital Cost-Sharing Proposal was not implemented. However, the proposal was implemented in 2005. The present value is about $2.329 million. Action taken by: Agency

    Recommendation: The Director of State's Bureau of Overseas Buildings Operations should, in coordination with USAID, consider incorporating USAID space into single office buildings in future compounds, where appropriate.

    Agency Affected: Department of State: Bureau of Overseas Buildings Operations

 

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