Overseas Construction:

Design and Construction of U.S. Embassy Complex in Moscow

NSIAD-87-125BR: Published: Apr 10, 1987. Publicly Released: Apr 27, 1987.

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In response to a congressional request, GAO reviewed the Department of State's construction of U.S. embassy facilities in Moscow.

GAO found that, although State estimated that the complex would cost between $75 and $100 million, Congress appropriated $192 million and State obligated $142.9 million due to: (1) inadequate Soviet materials, security upgrades, and design corrections; (2) the slow progress the Soviets made in early site preparation; (3) the Soviet contractor's failure to follow the construction schedule and supply the appropriate materials and craftsmen to meet accepted quality standards; and (4) contract extensions which increased costs. State suspended all work on the new office building in order to conduct a comprehensive security and structural inspection. Although the Soviet Union and State submitted damage claims against each other for delays and failure to carry out contract obligations, both agreed to hold a negotiating session in June 1987.

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