United Nations Renovations:

Original Scope Reduced and Project Over Budget, but Lessons Learned Could Improve Future Projects

GAO-15-414: Published: May 14, 2015. Publicly Released: May 14, 2015.

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What GAO Found

The Capital Master Plan (CMP) intended to modernize, secure, and restore the United Nations (UN) Headquarters Complex, is substantially complete. However, the project is 3 years behind schedule primarily due to unplanned security upgrades and is projected to be over budget, while the UN has removed two buildings from its scope due to lack of a feasible solution to security concerns. As of February 2015, the UN estimated that the CMP will cost about $379 million more than originally planned. In resolutions passed in December 2013 and April 2015, the UN General Assembly authorized financing of the CMP cost overrun through various means, including an additional member state assessment.

United Nations Headquarters Complex in New York City

United Nations Headquarters Complex in New York City

UN internal and external auditors have identified lessons learned from the CMP that could be applied to future capital projects, such as including all foreseeable costs at a project's outset. The UN is applying some of these lessons to a new capital improvement project in Geneva. However, the UN has not made these lessons standard practice as called for by federal and UN standards for internal control. As a result, the UN could miss the opportunity to apply its experience to help achieve long-term savings and efficiencies in future capital improvement efforts.

The UN has identified as viable three options to address its future office space needs in New York, including a new building within the UN Headquarters Complex, a new building south of the UN Complex, and the status quo—relying on leased space. However, GAO found the assumptions upon which the UN bases these options—including UN workforce projections and the potential impact of flexible workplace policies such as teleworking or desk sharing—are not well supported and documented. Without an understanding of the methodology and calculations underlying the assumptions, UN decision makers may have difficulties deciding which options will achieve the most efficient and effective allocation of resources in the coming years.

Why GAO Did This Study

In December 2006, the UN approved a $1.88 billion plan to modernize its headquarters by 2014 (the CMP project), including renovating five buildings. In a separate effort, the UN is considering options to address its future needs for office space. As the UN's largest financial contributor, the United States has a significant interest in these projects.

GAO was asked to review progress on these efforts. GAO examined (1) the extent to which the CMP is on schedule and achieving its originally planned scope of work within budget, (2) the UN's application of lessons learned from the CMP to other UN capital projects, and (3) how the UN determines and plans to address future office space needs at its headquarters. To perform this work, GAO reviewed CMP schedule, planning, budget, and cost documents; examined relevant UN General Assembly resolutions; and met with officials from the Department of State and relevant UN offices.

What GAO Recommends

The Secretary of State and the U.S. Permanent Representative to the United Nations should work with other member states to (1) ensure that lessons learned during the CMP are used to develop documented guidance for future capital projects and (2) clearly justify assumptions used to estimate future office space needs, for example, by documenting the underlying factors, data, and analyses.

The Department of State concurred with GAO's recommendations.

For more information, contact Thomas Melito at (202) 512-9601 or melitot@gao.gov, or David Wise at (202) 512-2834 or wised@gao.gov.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: In 2015, GAO released a report examining the Capital Master Plan (CMP), a project intended to modernize, secure, and restore the United Nations (UN) Headquarters Complex. GAO found that the UN had not made lessons learned from the CMP standard practice as called for by federal and UN standards for internal control. GAO recommended the Secretary of State and U.S. Permanent Representative to the United Nations work with other member states to ensure that lessons learned during implementation of the CMP be used to develop documented guidance for future capital projects funded by UN member states. The Department of State (State) concurred with GAO's recommendation. In August 2016, State officials reported that the U. S. Mission to the United Nations, using the recommendations contained in GAO-15-414, worked with other member states to ensure that the UN developed written guidance for future capital projects that included information on lessons learned during the implementation of the CMP. According to State officials, the UN included these lessons learned in its 'Guidelines for the Management of Construction Projects' (Version 1) which the UN released in March of 2016. GAO reviewed these guidelines to confirm that they addressed lessons learned from the CMP similar to those that GAO had identified in GAO-15-414, including: identifying and including all foreseeable costs at the outset of a project, developing a risk management strategy that guides the use of contingency funds for a project and establishing a formal project steering committee.

    Recommendation: To allow UN member states to make informed decisions about completing the CMP and addressing future UN office space needs, the Secretary of State and U.S. Permanent Representative to the United Nations should work with other member states to ensure that lessons learned during implementation of the CMP are used to develop documented guidance for future capital projects funded by UN member states.

    Agency Affected: Department of State

  2. Status: Closed - Implemented

    Comments: The Department of State concurred with GAO's recommendations. In December 2015, the United Nations (UN) passed a resolution requesting the Secretary-General further review options for long-term accommodation at UN headquarters, including evaluating assumptions on which space estimates were based, and submit a progress report to the General Assembly by September 2016. The United States strongly advocated for this resolution. According to an official from the U.S. Mission to the UN (USUN), in line with GAO's May 2015 report recommendation regarding more information about assumptions used to justify the space estimates, USUN and other member states were concerned that the Secretary General had not done enough research to allow members to make an informed decision and therefore acted to pass the resolution. Furthermore, the USUN worked with other member states to push for the resolution because the mission wanted to be provided additional information before it committed to spending additional resources for long term staff accommodation.

    Recommendation: To allow UN member states to make informed decisions about completing the CMP and addressing future UN office space needs, the Secretary of State and U.S. Permanent Representative to the United Nations should work with other member states to clearly justify assumptions used to estimate future office space needs, for example, by documenting the underlying factors, data, and analyses.

    Agency Affected: Department of State

 

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