U.S. Embassy, Moscow:

Why Construction Took Longer and Cost More Than Anticipated

NSIAD-88-23: Published: Oct 23, 1987. Publicly Released: Nov 30, 1987.

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

GAO found that: (1) as of March 1987, Congress had appropriated $192 million for the construction, of which State has obligated about $146 million and expended about $137 million; (2) there were 80 modifications to contracts awarded to U.S. firms under the project, resulting in an increase of about $10.9 million over the original price; (3) the increased construction costs were due to inflation, increased project requirements, changes in facility security, and delays by the Soviet contractor; and (4) security enhancement revisions were the most costly changes. GAO also found that the Soviet contractor: (1) lacked sufficient skilled craftsmen; (2) was unable to timely provide necessary building materials; (3) failed to properly prepare the site; and (4) failed to follow the construction schedule. GAO noted that work at the U.S. embassy is at a standstill, pending the outcome of U.S. security reviews.

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