State Department Construction:

Basis for Building versus Leasing Decisions Was Insufficiently Documented at Three Embassies

GAO-15-472R: Published: Apr 24, 2015. Publicly Released: Apr 24, 2015.

Additional Materials:

Contact:

David J. Wise
(202) 512-2834
wised@gao.gov

 

Michael J. Courts
202-512-8980
courtsm@gao.gov

 

Office of Public Affairs
(202) 512-4800
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What GAO Found

The U.S. Department of State's (State) Bureau of Overseas Building Operations (OBO) officials made decisions during the construction or renovation process in Sarajevo, Bosnia and Herzegovina; Belgrade, Serbia; and Helsinki, Finland to lease facilities off-site versus build on-site, but they did not provide a clear explanation of how those decisions were made in the documents they used to plan and track the construction and renovation of embassy compounds. OBO's planning documentation for the three embassy compounds provided general information on the construction projects and changes to the planned scope, schedule, and cost. However, GAO was unable to determine from the documentation the reasons for the decisions. Without complete documentation, as directed by State's guidance, GAO could not verify how OBO makes decisions, informs future decision makers about the basis for these decisions, or maintains institutional knowledge in the face of staff turnover.

Why GAO Did This Study

State is in the midst of a multiyear, multibillion-dollar construction program to replace vulnerable embassies worldwide. Given the large financial investment--approximately $2.2 billion projected annually through fiscal year 2018 for new embassy construction projects--it is important to understand how State makes decisions to assist in planning future construction efforts worldwide. GAO most recently reported on State's management of overseas real property in September 2014. During that review, GAO visited three recently constructed or renovated embassies-- Sarajevo, Bosnia and Herzegovina; Belgrade, Serbia; and Helsinki, Finland--and learned that State was leasing space off-site for buildings that are typically included on an embassy compound. GAO has previously concluded that embassy construction projects should be well-planned from the initial design through the project's completion. Further, every effort should be made to minimize the cost to the U.S. government in the short- and long- term while maintaining quality standards. This effort includes decisions about whether to build or lease space.

What GAO Recommends

The Secretary of State should take steps to ensure that OBO fully documents and keeps readily available the basis for its planning decisions for new embassy compounds and major renovation projects, such as decisions to construct a building on-site or lease space off-site. State concurred with our recommendation and stated that OBO will endeavor to more thoroughly document its major planning decisions with regard to new embassy compounds and major renovation projects.

For more information, contact David J. Wise at 202-512-2834 or wised@gao.gov or Michael J. Courts at 202-512-8980 or courtsm@gao.gov

Recommendation for Executive Action

  1. Status: Open

    Comments: Beginning in 2016, major programmatic decisions related to choosing new embassy construction projects for award each fiscal year will be documented using a risk-based decision-making model. This model incorporates concepts of multi-attribute decision analysis and risk analytics to suggest an ideal project sequencing. Model inputs and outputs are stored on the Bureau of Overseas Building Operations (OB0) SharePoint directory. State expects to develop a similar method for the major rehabilitation program that may be implemented as early as 2017. Major project level decisions are documented through a variety of methods. OBO and other offices at State develop new embassy compound alternative analyses to document decisions about whether to pursue new construction, renovate and stay-in-place, or relocate to new leased space. Warehouse business cases document decisions to build on, or lease off compound. Those are kept, readily available, in OBO's SharePoint Directory. As projects proceed further through design and construction phases, any major decisions required are generally documented in decision memoranda and saved in OBO Link.

    Recommendation: The Secretary of State should take steps to ensure that OBO fully documents and keeps readily available the basis for its planning decisions according to State's policy for new embassy compounds and major renovation projects, such as decisions to construct a building on-site or lease space off-site.

    Agency Affected: Department of State

 

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