Overseas Presence:

State and USAID Should Adopt a Comprehensive Plan to Improve the Consolidation of Overseas Support Services

GAO-06-829: Published: Sep 8, 2006. Publicly Released: Oct 2, 2006.

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The Department of State (State) has embassies in about 180 countries, and the U.S. Agency for International Development (USAID) maintains missions in about 90 of those countries. At many posts, State and USAID are located on separate compounds and maintain multiple support service operations, such as warehouses. However, the United States is in the process of building new embassy compounds that will collocate all agencies, creating opportunities for greater sharing of services. In September 2004, we recommended that State pursue the elimination of duplicative support structures at overseas facilities. We reviewed (1) the status of State and USAID's joint initiative to consolidate overseas services, and plans for advancing the initiative; and (2) the challenges State and USAID face in these efforts.

State and USAID have demonstrated the feasibility of consolidating overseas support services and are seeking to expand their efforts. In June 2004, State and USAID initiated pilot projects at four posts to demonstrate the feasibility of consolidating support services. The four posts that participated in the pilot successfully consolidated 12 of the 16 support services, such as residential property maintenance, and reported operational efficiencies and costs avoided. For example, Dar es Salaam eliminated several positions and Phnom Penh improved motor pool and housing procedures. State and USAID learned valuable lessons from the pilot projects. They have directed posts to begin the process of identifying duplicative services and initiating consolidation efforts. As of July 2006, nine posts had responded, but only one had advanced beyond the planning stage. The two agencies face several challenges in consolidating services at posts. The challenges include the need for State and USAID in Washington and at posts to address concerns that USAID's costs may increase if services are consolidated, develop better cost and performance data, reduce the number of locally employed staff and reduce or replace U.S. direct hires with locally employed staff, communicate better, and resolve technical differences. During our work, State and USAID took steps to address some of these challenges. For instance, in June 2006, the two agencies produced a draft strategy that defines broad goals and sets forth a common vision-to combine at collocating posts all State and USAID services into a single administrative structure and reduce the number of U.S. direct hire personnel. This is a positive step. However, our analysis of the draft strategy shows that it does not include a plan that details milestones, specific goals, timelines, and performance measures or accountability mechanisms to demonstrate results.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In September 2006, we reported (Overseas Presence: State and USAID Should Adopt a Comprehensive Plan to Improve the Consolidation of Overseas Support Services, 09/08/2006) that State and USAID had demonstrated the feasibility of consolidating overseas support services, but faced several challenges, including the need for State and USAID to address concerns that USAID's costs could increase as a result of consolidating support services. We recommended that the Secretary of State, in conjunction with the USAID Administrator, among other things, set timelines for accomplishing the standardization of State and USAID policies, procedures, and systems. State and USAID have responded to our recommendation by setting forth guidance outlining timelines for consolidating support services at posts. The guidance calls for a three-tier approach, with the goal of consolidating all services into a single consolidated administrative unit under the direction of State/ICASS. Tier 1 posts, consisting of posts where State and USAID are collocated or will be collocated on a new embassy compound by the end of fiscal year 2007, should develop plans to consolidate services by fiscal year 2008. Tier 2 posts, consisting of posts where State and USAID will be collocated in fiscal years 2008, 2009, or 2010, will consolidate services at the beginning of the fiscal year immediately following the post's move into the new embassy compound. Tier 3 posts, consisting of posts where State and USAID will be collocated in or after fiscal year 2011, will develop plans to consolidate administrative services as appropriate and where consolidation can be cost-effective. As part of the effort to consolidate overseas support services, State and USAID have also standardized policies, procedures, and systems, and associated business processes with respect to warehouse management; expendable supplies; functional and residential property leasing; motor pool; residential and non-residential maintenance; customs and shipping; custodial services; reproduction services; mail and pouch services; cashiering; and the hiring, retention and reduction-in-force of foreign service national personnel. For instance, the two agencies have agreed that posts will consolidate all warehouse inventory, using State's inventory management system and software, and not USAID's, to keep track of both State and USAID warehouse inventory. USAID will begin the process of transferring its warehouse inventory data to State's warehouse inventory system in fiscal year 2008. The two agencies have also agreed that posts will maintain a single housing office that will provide housing to both State and USAID officials. In April 2007, the two agencies issued guidance identifying the software applications that both agencies will use in the consolidated administrative unit. Finally, State and USAID have agreed on the policies and procedures that they will use to hire, retain, and fire foreign service nationals or locally employed staff. The two agencies have directed posts to update their reduction-in-force polices. State and USAID have also agreed that best locally employed staff will be hired by State/ICASS as contract personnel. State's Director of the Office of Rightsizing has estimated that as a result of consolidating overseas support services, State and USAID have saved approximately $18 million over the last five years. However, we have not validated this figure and for that reason cannot determine its accuracy.

    Recommendation: The Secretary of State, in conjunction with the USAID Administrator, should set timelines for accomplishing the standardization of State and USAID policies, procedures, and systems.

    Agency Affected: Department of State: Agency for International Development

  2. Status: Closed - Implemented

    Comments: In September 2006, we reported that while State and USAID had demonstrated the feasibility of consolidating overseas support services, they faced several major challenges. The challenges include the need for State and USAID in Washington and at posts to address concerns that USAID's costs could increase if services are consolidated; develop better cost and performance data; reduce the number of local national hires and reduce or replace U.S. direct hires with local national hires; communicate better; and resolve technical differences. We recommended, among other things, that State and USAID develop a plan that details the desired end state and defines timelines. In response, State and USAID have agreed on a plan that defines the end-state and outlines a three-tiered approach to consolidating State and USAID services. The end-state is defined as the consolidation of agreed-upon duplicative administrative services into one joint administrative platform at co-located overseas missions. The three-tiered approach to implement this plan is as follows. First, posts where State and USAID are currently co-located or will be co-located on a new embassy compound within fiscal year 2007 should develop plans to combine agreed-upon State and USAID services starting in October, 2007. Second, posts where State and USAID will be co-located in fiscal years 2008, 2009, or 2010 should develop plans to consolidate agreed-upon administrative services beginning in fiscal year 2008, with the view to providing consolidated services at the beginning of the fiscal year immediately following the move onto the new embassy compound. Third, posts planning to co-locate State and USAID in fiscal year 2011 or later should develop plans to consolidate agreed-upon administrative services where efficiencies can be achieved. The services that both State and USAID have agreed to consolidate were specified in an April 2006 message to posts. The plan also provides a list of tier 1, tier 2, and tier 3 posts. According to the State Department official in charge of the Office of Rightsizing, on October 1, 2007, nearly 50 of the 80 posts where State and USAID are present should have combined management platforms.

    Recommendation: The Secretary of State, in conjunction with the USAID Administrator, should define a comprehensive plan that provides a detailed picture of the desired end state; addresses cost and incentive differences between agencies; enables clear and consistent communications from headquarters to post; demonstrates the overall cost benefits of consolidation; defines timelines, metrics, and results-oriented criteria for success; and outlines, where appropriate, options for leveraging more locally employed staff.

    Agency Affected: Department of State: Agency for International Development

  3. Status: Closed - Implemented

    Comments: In September 2006, we reported that while State and USAID had demonstrated the feasibility of consolidating overseas support services, they faced several major challenges. The challenges include the need for State and USAID in Washington and at posts to address concerns that USAID's costs could increase if services are consolidated; develop better cost and performance data; reduce the number of local national hires and reduce or replace U.S. direct hires with local national hires; communicate better; and resolve technical differences. We recommended, among other things, that State and USAID develop a plan that details the desired end state and defines timelines. In response, State and USAID have agreed on a plan that defines the end-state and outlines a three-tiered approach to consolidating State and USAID services. The end-state is defined as the consolidation of agreed-upon duplicative administrative services into one joint administrative platform at co-located overseas missions. The three-tiered approach to implement this plan is as follows. First, posts where State and USAID are currently co-located or will be co-located on a new embassy compound within fiscal year 2007 should develop plans to combine agreed-upon State and USAID services starting in October, 2007. Second, posts where State and USAID will be co-located in fiscal years 2008, 2009, or 2010 should develop plans to consolidate agreed-upon administrative services beginning in fiscal year 2008, with the view to providing consolidated services at the beginning of the fiscal year immediately following the move onto the new embassy compound. Third, posts planning to co-locate State and USAID in fiscal year 2011 or later should develop plans to consolidate agreed-upon administrative services where efficiencies can be achieved. The services that both State and USAID have agreed to consolidate were specified in an April 2006 message to posts. The plan also provides a list of tier 1, tier 2, and tier 3 posts. According to the State Department official in charge of the Office of Rightsizing, on October 1, 2007, nearly 50 of the 80 posts where State and USAID are present should have combined management platforms.

    Recommendation: The Secretary of State, in conjunction with the USAID Administrator, should define a comprehensive plan that provides a detailed picture of the desired end state; addresses cost and incentive differences between agencies; enables clear and consistent communications from headquarters to post; demonstrates the overall cost benefits of consolidation; defines timelines, metrics, and results-oriented criteria for success; and outlines, where appropriate, options for leveraging more locally employed staff.

    Agency Affected: Department of State: Agency for International Development

  4. Status: Closed - Implemented

    Comments: In September 2006, we reported that while State and USAID had demonstrated the feasibility of consolidating overseas support services, they faced several major challenges. The challenges include the need for State and USAID in Washington and at posts to address concerns that USAID's costs could increase if services are consolidated; develop better cost and performance data; reduce the number of local national hires and reduce or replace U.S. direct hires with local national hires; communicate better; and resolve technical differences. We recommended, among other things, that State and USAID develop a plan that details the desired end state and defines timelines. In response, State and USAID have agreed on a plan that defines the end-state and outlines a three-tiered approach to consolidating State and USAID services. The end-state is defined as the consolidation of agreed-upon duplicative administrative services into one joint administrative platform at co-located overseas missions. The three-tiered approach to implement this plan is as follows. First, posts where State and USAID are currently co-located or will be co-located on a new embassy compound within fiscal year 2007 should develop plans to combine agreed-upon State and USAID services starting in October, 2007. Second, posts where State and USAID will be co-located in fiscal years 2008, 2009, or 2010 should develop plans to consolidate agreed-upon administrative services beginning in fiscal year 2008, with the view to providing consolidated services at the beginning of the fiscal year immediately following the move onto the new embassy compound. Third, posts planning to co-locate State and USAID in fiscal year 2011 or later should develop plans to consolidate agreed-upon administrative services where efficiencies can be achieved. The services that both State and USAID have agreed to consolidate were specified in an April 2006 message to posts. The plan also provides a list of tier 1, tier 2, and tier 3 posts. According to the State Department official in charge of the Office of Rightsizing, on October 1, 2007, nearly 50 of the 80 posts where State and USAID are present should have combined management platforms.

    Recommendation: The Secretary of State, in conjunction with the USAID Administrator, should designate overseas services consolidation a priority joint State/USAID objective.

    Agency Affected: Department of State

  5. Status: Closed - Implemented

    Comments: In September 2006, we reported that while State and USAID had demonstrated the feasibility of consolidating overseas support services, they faced several major challenges. The challenges include the need for State and USAID in Washington and at posts to address concerns that USAID's costs could increase if services are consolidated; develop better cost and performance data; reduce the number of local national hires and reduce or replace U.S. direct hires with local national hires; communicate better; and resolve technical differences. We recommended, among other things, that State and USAID develop a plan that details the desired end state and defines timelines. In response, State and USAID have agreed on a plan that defines the end-state and outlines a three-tiered approach to consolidating State and USAID services. The end-state is defined as the consolidation of agreed-upon duplicative administrative services into one joint administrative platform at co-located overseas missions. The three-tiered approach to implement this plan is as follows. First, posts where State and USAID are currently co-located or will be co-located on a new embassy compound within fiscal year 2007 should develop plans to combine agreed-upon State and USAID services starting in October, 2007. Second, posts where State and USAID will be co-located in fiscal years 2008, 2009, or 2010 should develop plans to consolidate agreed-upon administrative services beginning in fiscal year 2008, with the view to providing consolidated services at the beginning of the fiscal year immediately following the move onto the new embassy compound. Third, posts planning to co-locate State and USAID in fiscal year 2011 or later should develop plans to consolidate agreed-upon administrative services where efficiencies can be achieved. The services that both State and USAID have agreed to consolidate were specified in an April 2006 message to posts. The plan also provides a list of tier 1, tier 2, and tier 3 posts. According to the State Department official in charge of the Office of Rightsizing, on October 1, 2007, nearly 50 of the 80 posts where State and USAID are present should have combined management platforms.

    Recommendation: The Secretary of State, in conjunction with the USAID Administrator, should designate overseas services consolidation a priority joint State/USAID objective.

    Agency Affected: Department of State

  6. Status: Closed - Implemented

    Comments: In September 2006, we reported (Overseas Presence:State and USAID Should Adopt a Comprehensive Plan to Improve the Consolidation of Overseas Support Services, 09/08/2006) that State and USAID had demonstrated the feasibility of consolidating overseas support services, but faced several challenges, including the need for State and USAID to address concerns that USAID's costs could increase as a result of consolidating support services. We recommended that the Secretary of State, in conjunction with the USAID Administrator, among other things, set timelines for accomplishing the standardization of State and USAID policies, procedures, and systems. State and USAID have responded to our recommendation by setting forth guidance outlining timelines for consolidating support services at posts. The guidance calls for a three-tier approach, with the goal of consolidating all services into a single consolidated administrative unit under the direction of State/ICASS. Tier 1 posts, consisting of posts where State and USAID are collocated or will be collocated on a new embassy compound by the end of fiscal year 2007, should develop plans to consolidate services by fiscal year 2008. Tier 2 posts, consisting of posts where State and USAID will be collocated in fiscal years 2008, 2009, or 2010, will consolidate services at the beginning of the fiscal year immediately following the post's move into the new embassy compound. Tier 3 posts, consisting of posts where State and USAID will be collocated in or after fiscal year 2011, will develop plans to consolidate administrative services as appropriate and where consolidation can be cost-effective. As part of the effort to consolidate overseas support services, State and USAID have also standardized policies, procedures, and systems, and associated business processes with respect to warehouse management; expendable supplies; functional and residential property leasing; motor pool; residential and non-residential maintenance; customs and shipping; custodial services; reproduction services; mail and pouch services; cashiering; and the hiring, retention and reduction-in-force of foreign service national personnel. For instance, the two agencies have agreed that posts will consolidate all warehouse inventory, using State's inventory management system and software, and not USAID's, to keep track of both State and USAID warehouse inventory. USAID will begin the process of transferring its warehouse inventory data to State's warehouse inventory system in fiscal year 2008. The two agencies have also agreed that posts will maintain a single housing office that will provide housing to both State and USAID officials. In April 2007, the two agencies issued guidance identifying the software applications that both agencies will use in the consolidated administrative unit. Finally, State and USAID have agreed on the policies and procedures that they will use to hire, retain, and fire foreign service nationals or locally employed staff. The two agencies have directed posts to update their reduction-in-force polices. State and USAID have also agreed that best locally employed staff will be hired by State/ICASS as contract personnel. State's Director of the Office of Rightsizing has estimated that as a result of consolidating overseas support services, State and USAID have saved approximately $18 million over the last five years. However, we have not validated this figure and for that reason cannot determine its accuracy.

    Recommendation: The Secretary of State, in conjunction with the USAID Administrator, should set timelines for accomplishing the standardization of State and USAID policies, procedures, and systems.

    Agency Affected: Department of State

 

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