State Department Construction: Basis for Building versus Leasing Decisions Was Insufficiently Documented at Three Embassies
Highlights
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.
Recommendations
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.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Department of State | 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. |
The U.S Department of State (State) was in the midst of a multiyear, multibillion-dollar construction program to replace vulnerable embassies worldwide. In 2015, GAO reported that, in the three cases it reviewed, State officials at the Bureau of Overseas Building Operations (OBO) made decisions during the construction or renovation process to lease facilities off-site versus build onsite, but the officials did not provide a clear explanation or retain documents on how those decisions were made in the documents OBO uses to plan for and track the status of embassy construction and renovation projects. 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 made construction planning decisions. Therefore, GAO recommended that State 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. In 2018, GAO confirmed in response to our correspondence, that OBO had taken steps to improve its documentation and retention of planning decisions related to embassy construct on-site or lease space off-site. OBO has developed a risk-based alternatives analysis model for major programmatic decisions related to new embassy construction or major rehabilitation projects. As part of this analysis, OBO and other offices within State document planning decisions about whether to pursue new construction, renovate and stay in place, or relocate to new leased space. The final documentation and decision memorandum for this analysis are then saved in an OBO internal project tracking system. OBO has also started developing warehouse business case analysis to document its decision to build warehouses on-site or lease off-site, and these are kept in the OBO internal project tracking system as well. As a result, State's construction planning decisions for embassies are documented and future decision makers will have access to the rationale for these decisions to help determine the best way forward.
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