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entitled 'Overseas Presence: Framework for Assessing Embassy Staff 
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Report to the Chairman, Subcommittee on National Security, Veterans 

Affairs, and International Relations, Committee on Government Reform, 

House of Representatives:



United States General Accounting Office:



GAO:



July 2002:



Overseas Presence:



Framework for Assessing Embassy Staff Levels Can Support Rightsizing 

Initiatives:



Overseas Presence:



GAO-02-780:



Contents:



Letter:



Results in Brief:



Background:



Development of a Rightsizing Framework:



Rightsizing Framework Complements OMB Initiatives:



Conclusion:



Recommendation for Executive Action:



Agency Comments and Our Evaluation:



Scope and Methodology:



Appendix I: Timeline of Rightsizing Initiatives since the 

1998 Embassy Bombings:



Appendix II: Rightsizing Framework and Corresponding 

Questions:



Appendix III: Comments from the Office of Management and 

Budget:



Appendix IV: Comments from the Department of State:



GAO’s Comments:



Appendix V: GAO Contact and Staff Acknowledgments:



GAO Contact:



Staff Acknowledgments:



Figure:



Figure 1: Framework for Embassy Rightsizing:



Abbreviations:



OMB: Office of Management and Budget



OPAP: Overseas Presence Advisory Panel



MPP: Mission Performance Plan:



Letter:



July 26, 2002:



The Honorable Christopher Shays

Chairman, Subcommittee on National Security,

 Veterans Affairs, and International Relations

Committee on Government Reform

House of Representatives:



Dear Mr. Chairman:



Following the 1998 terrorist bombings of two U.S. embassies in Africa 

that resulted in more than 220 deaths and 4,000 injuries, there have 

been recurring calls to evaluate and realign--or rightsize--the number 

and location of staff at U.S. embassies and consulates and to consider 

staff reductions where practical to reduce security 

vulnerabilities.[Footnote 1] The administration showed its support for 

rightsizing in the President’s Management Agenda[Footnote 2] by 

directing all agencies operating overseas to rightsize their presence. 

The Office of Management and Budget (OMB) is implementing this 

rightsizing initiative by analyzing the U.S. overseas presence and 

reviewing the staffing allocation process. Given the high costs of 

maintaining more than 60,000 Americans and foreign nationals overseas 

and the events of September 11, 2001, that highlighted the security 

vulnerability of Americans worldwide, the administration’s rightsizing 

initiative aims to reconfigure U.S. government overseas staff to the 

minimum number necessary to meet U.S. foreign policy goals.



In May 2002, we presented testimony on a framework for determining the 

appropriate number of staff to be assigned to a U.S. embassy.[Footnote 

3] As you requested, this report presents the framework discussed in 

our testimony that outlines the key criteria for evaluating the U.S. 

overseas presence, along with examples of key questions that may be 

useful in making rightsizing decisions. We developed the framework by 

reviewing previous reports on rightsizing and overseas staffing issues, 

such as the Overseas Presence Advisory Panel (OPAP) report,[Footnote 4] 

and interviewing officials from the Department of State, other U.S. 

agencies operating overseas, and OMB. We tested the framework during 

our fieldwork at the U.S. embassy in Paris. In each section of this 

report, we include observations in applying the framework at that 

embassy. We plan additional work later this year to refine the 

framework and demonstrate how it can be used in other regions and 

environments.



Results in Brief:



Our framework provides a systematic approach for assessing overseas 

workforce size and identifying options for rightsizing, both at the 

embassy level and for making related decisions worldwide. The framework 

links staffing levels to three critical elements of overseas diplomatic 

operations: (1) physical/technical security of facilities and 

employees, (2) mission priorities and requirements, and (3) cost of 

operations. The first element includes analyzing the security of 

embassy buildings, the use of existing secure space, and the 

vulnerabilities of staff to terrorist attack. The second element 

focuses on assessing embassy priorities and the staff’s workload 

requirements. The third element involves developing and consolidating 

cost information from all agencies at a particular embassy to permit 

cost-based decision making. Unlike an analysis that considers the 

elements in isolation, the rightsizing framework encourages 

consideration of a full range of options, along with the security, 

mission, and cost trade-offs. With this information, decision makers 

would then be in a position to determine whether rightsizing actions 

are needed either to add staff, reduce staff, or change the staff mix 

at an embassy. Options for reducing staff could include relocating 

functions to the United States or to regional centers and outsourcing 

functions. Our analysis of the U.S. embassy in Paris demonstrated the 

framework’s viability--for example, by highlighting security concerns 

that may warrant staff reductions and by identifying options for 

relocating some staff--for example, to the United States and other 

locations in Europe.



In this report, we are recommending that the Director of OMB ensure 

that our framework is used in the administration’s rightsizing 

initiative, starting with its assessments of staffing levels and 

rightsizing options in U.S. embassies in Europe and Eurasia. OMB, in 

commenting on a draft of our report, agreed with the framework’s 

elements and options and said that it plans to build upon the framework 

in examining all posts within the European and Eurasia Bureau. The 

Department of State said that it welcomed our work on developing a 

framework as a commonsense approach for considering staffing issues.



Background:



The U.S. government maintains more than 250 diplomatic posts overseas 

(embassies, consulates, and other diplomatic offices) with 

approximately 60,000 personnel representing more than 50 government 

agencies and subagencies. The departments of Defense and State together 

comprise more than two-thirds of American personnel overseas under 

chiefs of mission authority--36 percent and 35 percent, 

respectively.[Footnote 5] The costs of maintaining staff overseas vary 

by agency but in general, as OMB has reported, they are high. The 

Deputy Director of OMB recently testified that the average annual cost 

of having one full-time direct-hire American family of four in a U.S. 

embassy is $339,100.[Footnote 6]



Following the 1998 embassy bombings, two high-level independent groups 

called for the reassessment of overseas staffing levels. The 

Accountability Review Boards that sent two teams to the region to 

investigate the bombings concluded that the United States should 

consider adjusting the size of its overseas presence to reduce security 

vulnerabilities.[Footnote 7] Following the Accountability Review 

Boards’ report, OPAP concluded that some embassies were 

disproportionately sized and needed staff adjustments to adapt to new 

foreign policy priorities and reduce security vulnerabilities. The 

panel recommended creating a permanent interagency committee to develop 

a methodology to determine the appropriate size and locations of the 

U.S. overseas presence. OPAP also suggested a series of actions to 

adjust overseas presence, including relocating some functions to the 

United States and to regional centers where feasible. However, the 

State-led interagency committee that was established to respond to 

OPAP’s recommendations did not produce a standard rightsizing 

methodology. As we previously reported,[Footnote 8] the committee did 

not spend sufficient time at overseas locations to fully assess 

workload issues or consider alternative ways of doing business. To move 

the issue forward, in August 2001, the President’s Management Agenda 

identified rightsizing as one of the administration’s priorities. In 

addition, the President’s fiscal year 2003 international affairs 

budget[Footnote 9] (1) highlighted the importance of making staffing 

decisions on the basis of mission priorities and costs and (2) directed 

OMB to analyze agencies’ overseas staffing and operating costs (see 

app. I for a summary of previous rightsizing initiatives).



Development of a Rightsizing Framework:



Although there is general agreement on the need for rightsizing the 

U.S. overseas presence, there is no consensus on how to do it. As a 

first step, we developed a framework that includes a set of questions 

to guide decisions on overseas staffing (see app. II for the set of 

questions). We identified three critical elements that should be 

systematically evaluated as part of this framework: (1) physical/

technical security of facilities and employees, (2) mission priorities 

and requirements, and (3) cost of operations. If the evaluation shows 

problems, such as security risks, decision makers should then consider 

the feasibility of rightsizing options, including relocating staff or 

downsizing. On the other hand, evaluations of agencies’ priorities may 

indicate a need for additional staff at embassies or greater external 

support from other locations. Figure 1 illustrates the framework’s 

elements and options.



Figure 1: Framework for Embassy Rightsizing:



[See PDF for image]



Source: GAO.



[End of figure]



State and other agencies in Washington, D.C., including OMB, could use 

this framework as a guide for making overseas staffing decisions. For 

example, ambassadors could use this framework to ensure that embassy 

staffing is in line with security concerns, mission priorities and 

requirements, and cost of operations. At the governmentwide level, 

State and other agencies could apply the framework to free up resources 

at oversized posts, reallocate limited staffing resources worldwide, 

and introduce greater accountability into the staffing process.



The following sections describe in more detail the three elements of 

our framework, examples of key questions to consider for each element, 

and potential rightsizing options. We also include examples of how the 

questions in the framework were useful for examining rightsizing issues 

at the U.S. embassy in Paris.



Physical/Technical Security of Facilities and Employees:



The substantial loss of life caused by the bombings of the U.S. 

embassies in Africa and the ongoing threats against U.S. diplomatic 

buildings have heightened concern about the safety of our overseas 

personnel. State has determined that about 80 percent of embassy and 

consulate buildings do not fully meet security standards. Although 

State has a multibillion-dollar plan under way to address security 

deficiencies around the world, security enhancements cannot bring most 

existing facilities in line with the desired setback--the distance from 

public thoroughfares--and related blast protection requirements. 

Recurring threats to embassies and consulates highlight the importance 

of rightsizing as a tool to minimize the number of embassy employees at 

risk.



What Is the Threat and Security Profile of the Embassy?



The Accountability Review Boards recommended that the Secretary of 

State review the security of embassies and consider security in making 

staffing decisions. We agree that the ability to protect personnel 

should be a key factor in determining embassy staffing levels. State 

has prepared a threat assessment and security profile for each embassy, 

which can be used when assessing staff levels. While chiefs of 

mission[Footnote 10] and State have primary responsibility for 

assessing overseas security needs and allocating security resources, 

all agencies should consider the risks associated with maintaining 

staff overseas. The Paris embassy, our case study, illustrates the 

importance of facility security in determining staffing levels. As at 

many posts, the facilities in Paris predate current security standards. 

The Department of State continues to mitigate security limitations by 

using a variety of physical and technical security countermeasures. 

That said, none of the embassy’s office buildings meets current 

standards.



Mission Priorities and Requirements:



The placement and composition of staff overseas must reflect the 

highest priority goals of U.S. foreign policy. Moreover, the 

President’s Management Agenda states that U.S. interests are best 

served by ensuring that the federal government has the right number of 

people at the right locations overseas.



What Are the Embassy’s Priorities?



Currently, there is no clear basis on which to evaluate an embassy’s 

mission and priorities relative to U.S. foreign policy goals. State’s 

fiscal year 2000-2002 Mission Performance Plan (MPP)[Footnote 11] 

process does not require embassies to differentiate among the relative 

importance of U.S. strategic goals. The Chairman of OPAP testified in 

May 2002 that no adequate system exists to match the size and 

composition of the U.S. presence in a given country to the embassy’s 

priorities.[Footnote 12] Currently it is difficult to assess whether 

700 people are needed at the Paris embassy. For example, the fiscal 

year 2000-2002 MPP includes 15 of State’s 16 strategic goals, and 

overall priorities are neither identified nor systematically linked to 

resources. In recent months, State has revised the MPP process to 

require each embassy to set five top priorities and link staffing and 

budgetary requirements to fulfilling these priorities. A successful 

delineation of mission priorities will complement our rightsizing 

framework and support future rightsizing efforts to adjust the 

composition of embassy staff.



Are Workload Requirements Validated and Prioritized?



Embassy workload requirements include influencing policy of other 

governments, assisting Americans abroad, articulating U.S. policy, 

handling official visitors, and providing input for various reports and 

requests from Washington. In 2000, on the basis of a review of six 

different U.S. embassies, the State-led interagency committee found the 

perception that Washington’s requirements for reports and other 

information requests were not prioritized and placed unrealistic 

demands on staff. We also found this same perception among some offices 

in Paris. Scrutiny of workload requirements could potentially identify 

work of low priority such as reporting that has outlived its 

usefulness. Currently, State monitors and sends incoming requests for 

reports and inquiries to embassies and consulates, but it rarely 

refuses requests and leaves the prioritization of workload to the 

respective embassies and consulates. Washington’s demands on an embassy 

need to be evaluated in light of how they affect other work 

requirements and the number of staff needed to meet these requirements. 

For example, the economics section in Paris reported that Washington-

generated requests resulted in missed opportunities for assessing how 

U.S. private and government interests are affected by the many ongoing 

changes in the European banking system.



How Do Agencies Determine Staffing Levels?



The President’s Management Agenda states that there is no mechanism to 

assess the overall rationale for and effectiveness of where and how 

many U.S. employees are deployed overseas. Each agency in Washington 

has its own criteria for assigning staff to U.S. embassies. Some 

agencies have more flexibility than others in placing staff overseas, 

and Congress mandates the presence of others. Thorough staffing 

criteria are useful for determining and reassessing staffing levels and 

would allow agencies to better justify the number of overseas staff. We 

found that the criteria to locate staff in Paris vary significantly by 

agency. Some agencies use detailed staffing models, but most do not. 

Furthermore, they do not fully consider embassy priorities or the 

overall workload requirements on the embassy in determining where and 

how many staff are necessary.



Could an Agency’s Mission Be Pursued in Other Ways?



Some agencies are entirely focused on the host country, while others 

have regional responsibilities or function almost entirely outside the 

country in which they are located. Some agencies have constant 

interaction with the public, while others require interaction with 

their government counterparts. Some agencies collaborate with other 

agencies to support the embassy’s mission, while others act more 

independently and report directly to Washington. Analyzing where and 

how agencies conduct their business overseas may lead to possible 

rightsizing options. For example, the mission of the National Science 

Foundation involves interaction with persons throughout Europe and 

Eurasia and therefore raises the question of whether it needs Paris-

based staff.



Cost of Operations:



The President’s Management Agenda noted that the full costs of sending 

staff overseas are unknown. The Deputy Director of OMB testified that 

there is a wide disparity among agencies’ reported costs for a new 

position overseas.[Footnote 13] Without comprehensive cost data, 

decision makers cannot determine the correlation between costs and the 

work being performed, nor can they assess the short-and long-term costs 

associated with feasible business alternatives.



What Are an Embassy’s Operating Costs?



We agree with the President’s Management Agenda that staffing decisions 

need to include a full range of factors affecting the value of U.S. 

presence in a particular country, including the costs of operating the 

embassy. However, we found no mechanism to provide the ambassador and 

other decision makers with comprehensive data on all agencies’ costs of 

operations at an embassy. This lack of consolidated cost data for 

individual embassies makes linking costs to staffing levels, embassy 

priorities, and desired outcomes impossible. This is a long-standing 

management weakness that, according to the President, needs to be 

corrected. Our work in Paris demonstrates that this embassy is 

operating without fundamental knowledge and use of comprehensive cost 

data. State officials concurred that it is difficult to fully record 

the cost of all agencies overseas because of inconsistent accounting 

and budgeting systems. Nevertheless, we were able to document an 

estimated total cost for all agencies operating in France in fiscal 

year 2001 at more than $100 million. To do this, we developed a 

template in consultation with State and OMB to capture different 

categories of operating costs, such as salaries and benefits, and 

applied the template to each agency at the embassy.



Are Costs Commensurate with Expected Outcomes?



Once costs are known, it is important to relate them to the embassy’s 

performance. This will allow decision makers to (1) assess the relative 

cost-effectiveness of various program and support functions and (2) 

make cost-based decisions when setting mission priorities and staffing 

levels and determining the feasibility of alternative business 

approaches. With comprehensive data, State and other agencies could 

make cost-based decisions at the embassy level as well as on a global 

basis.



Rightsizing Options:



Analyses of security, mission, and cost may suggest the need for more 

or fewer staff at an embassy or an adjustment to the overall staff mix. 

Independent analysis of each element can lead to changes. However, all 

three elements of the framework need to be considered together to make 

reasonable decisions regarding staff size. For example, if the security 

element is considered in isolation and existing facilities are deemed 

highly vulnerable, managers may first consider adding security 

enhancements to existing buildings; working with host country law 

enforcement agencies to increase embassy protection; reconfiguring 

existing space to accommodate more people in secure space; and leasing, 

purchasing, or constructing new buildings. However, consideration of 

all elements of the framework may suggest additional means for reducing 

security vulnerabilities, such as reducing the total number of staff. 

Our framework encourages consideration of a full range of options along 

with the security, mission, and cost trade-offs.



Our framework is consistent with the views of rightsizing experts who 

have recommended that embassies consider alternative means of 

fulfilling mission requirements. For example, OPAP concluded that staff 

reductions should be considered as a means of improving security, and 

the Chairman of OPAP, in May 2002 testimony, supported elimination of 

some functions or performing functions from regional centers or the 

United States.[Footnote 14] Moreover, President Bush has told U.S. 

ambassadors that “functions that can be performed by personnel in the 

U.S. or at regional offices overseas should not be performed at a 

post.” Our analysis highlights five possible rightsizing options to 

carry out these goals, but this list is not exhaustive. These suggested 

options include:



1.	 relocating functions to the United States,



2.	 relocating functions to regional centers,



3.	 relocating functions to other locations under chief of mission 

authority where relocation back to the United States or to regional 

centers is not practical,



4.	 purchasing services from the private sector, and:



5.	 changing business practices.



Our case study at the Paris embassy illustrates the applicability of 

these options, which have the potential to reduce the number of 

vulnerable staff in the embassy buildings. These options may be 

applicable to as many as 210 positions in Paris. The work of about 120 

staff could be relocated to the United States--State already plans to 

relocate the work of more than 100 of these employees. In addition, the 

work of about 40 other positions could be handled from other locations 

in Europe, while more than 50 other positions are commercial in nature 

and provide services that are available in the private sector. For 

example:



* Some functions at the Paris embassy could be relocated to the United 

States. State is planning to relocate more than 100 budget and finance 

positions from the Financial Services Center in Paris to State’s 

financial center in Charleston, South Carolina, by September 2003. In 

addition, we identified other agencies that perform similar financial 

functions and could probably be relocated. For example, four Voice of 

America staff provide payroll services to correspondent bureaus and 

freelance reporters around the world and would benefit from collocation 

with State’s Financial Services Center.



* The Paris embassy could potentially relocate some functions to the 

regional logistics center in Antwerp, Belgium, and the planned 23-acre 

secure regional facility in Frankfurt, Germany, which has the capacity 

for approximately 1,000 people. The Antwerp facility could handle part 

of the embassy’s extensive warehouse operation, which is currently 

supported by about 25 people. In addition, some administrative 

operations at the embassy, such as procurement, could potentially be 

handled out of the Frankfurt facility. Furthermore, staff at agencies 

with regional missions could also be moved to Frankfurt. These staff 

include a National Science Foundation representative who spent 

approximately 40 percent of his time in 2001 outside of France; four 

staff who provide budget and finance support to embassies in Africa; 

and some Secret Service agents who cover eastern Europe, central Asia, 

and parts of Africa.



* There are additional positions in Paris that may not need to be in 

the primary embassy buildings where secure space is at a premium. The 

primary function of the National Aeronautics and Space Administration 

representative is to act as a liaison to European space partners. 

Accomplishing this work may not require retaining office space at the 

embassy. In fact, the American Battle Monuments Commission has already 

established a precedent for this, housing about 25 staff in separate 

office space in a suburb of Paris. In addition, a Department of Justice 

official works in an office at the French Ministry of Justice. However, 

dispersing staff raises additional security issues that need to be 

considered.[Footnote 15]



* Given Paris’s modern transportation and communication links and large 

private-sector service industry, the embassy may be able to purchase 

services from the private sector, which would reduce the number of 

full-time staff at risk at the embassy if the services can be performed 

from another location.[Footnote 16] We identified as many as 50 

positions at the embassy that officials in Washington and Paris agreed 

are commercial in nature, including painters, electricians, plumbers, 

and supply clerks.



* Reengineering business functions could help reduce the size of the 

Paris embassy. Consolidating inventories at the warehouse could 

decrease staff workload. For instance, household appliances and 

furniture are maintained separately by agency with different warehouse 

staff responsible for different inventories. Purchasing furniture 

locally[Footnote 17] for embassies such as Paris could also reduce 

staffing and other support requirements.



Advances in technology, increased use of the Internet, and more flights 

from the United States may reduce the need for certain full-time 

permanent staff overseas. Moreover, we have identified opportunities to 

streamline or reengineer embassy functions to improve State’s 

operations and reduce administrative staffing requirements, 

particularly in western Europe, through measures that would reduce 

residential housing and furniture costs.[Footnote 18] We reported in 

March 2001[Footnote 19] that State has a number of outmoded and 

inefficient business processes. Our cost analyses of the U.S. embassy’s 

housing office in Brussels and the housing support function at the U.S. 

embassy in London illustrated how reengineering could potentially 

result in significant savings.



Rightsizing Framework Complements OMB Initiatives:



To implement the President’s Management Agenda, OMB and State have 

indicated that they plan to assess staffing requirements, costs, and 

options at embassies in Europe and Eurasia. As part of this effort, 

they are attempting to identify staff who could be relocated to the 

planned regional facility in Frankfurt. Applying our framework in this 

effort would provide a systematic means of assessing staff levels and 

considering embassy costs and relocation and other rightsizing options. 

Furthermore, OMB and State have other initiatives under way that will 

make it easier to use the framework in the future. For example, to make 

it easier to consider the costs of the U.S. overseas presence, OMB is 

gathering data on overseas costs for each agency and the costs of 

establishing new positions, and is assessing the process by which 

agencies request funding to assign additional staff overseas. To help 

assess mission priorities and workload, OMB and State are reviewing how 

embassies have implemented the revised MPPs, which are designed to more 

clearly set priorities, and how these plans could be used to determine 

allocation of embassy resources. We plan to monitor OMB’s progress in 

implementing the rightsizing initiative and work with it to incorporate 

comprehensive cost data into the overseas staffing process.



Conclusion:



Our rightsizing framework was designed to allow decision makers to 

systematically link embassy staffing levels and requirements to three 

critical elements of embassy operations--physical security, mission 

priorities and requirements, and cost. Using our framework’s common set 

of criteria for making staffing assessments and adjustments would be an 

important step toward establishing greater accountability and 

transparency in the overseas staffing process. The key questions of the 

framework will help decision makers identify the most important factors 

affecting an embassy’s staffing levels and consider rightsizing options 

to either add or reduce staff or adjust the staff mix. Rightsizing 

experts told us that the framework appears applicable to all embassies. 

Although we have tested it only at the U.S. embassy in Paris and are in 

the process of refining it, we too believe that the framework can 

provide guidance for executive branch rightsizing exercises at other 

embassies.



Recommendation for Executive Action:



To facilitate the use of a common set of criteria for making staff 

assessments and adjustments at overseas posts and encourage decision 

makers to consider security, mission priorities and requirements, and 

costs, we recommend that the Director of the Office of Management and 

Budget ensure that our framework is used as a basis for assessing 

staffing levels in the administration’s rightsizing initiative, 

starting with its assessments of staffing levels and rightsizing 

options at U.S. embassies in Europe and Eurasia.



Agency Comments and Our Evaluation:



OMB and State provided written comments on a draft of this report (see 

apps. III and IV). OMB said that it appreciated our efforts to develop 

a rightsizing framework. OMB agreed with the framework’s key elements 

and options and plans to build upon the framework in examining staffing 

at all posts within the European and Eurasia Bureau. However, OMB 

expressed concern regarding whether the GAO methodology can be 

uniformly applied at all posts worldwide. Nonetheless, OMB noted that 

it looks forward to working with us and the State Department in using 

the framework as a starting point to develop a broader methodology that 

can be applied worldwide.



State said that it welcomed our work in developing a framework for 

rightsizing. State noted the difficulties of previous efforts to 

develop a methodology, including attempts by the Overseas Presence 

Advisory Panel and a State-led interagency rightsizing committee. It 

stated that it has taken steps to regionalize responsibilities in the 

United States and overseas where appropriate. In addition, State 

provided technical comments that we have incorporated into this report, 

as appropriate.



Scope and Methodology:



To develop the elements of the rightsizing framework and corresponding 

checklist of suggested questions, we analyzed previous reports on 

overseas staffing issues, including those of the Accountability Review 

Boards, OPAP, and the State-led interagency rightsizing committee. We 

interviewed officials from OMB to discuss the administration’s current 

rightsizing initiatives in relation to the President’s Management 

Agenda. We discussed embassy staffing with rightsizing experts, 

including the Chairman of OPAP and the current and former 

Undersecretary of State for Management. We also interviewed officials 

from the Departments of State, Defense, the Treasury, Commerce, 

Justice, and Agriculture as well as officials from other agencies with 

personnel in France.



To further develop and test the framework, we conducted a case study at 

the U.S. embassy in Paris. To assess embassy security, we reviewed 

security reports, interviewed security experts, and made direct 

observations. To assess missions’ priorities and requirements, we 

interviewed and collected data from the U.S. Ambassador to France, the 

Deputy Chief of Mission, and other high-ranking embassy officials as 

well as officials from more than 35 sections at the Paris embassy. We 

also interviewed agency officials in Washington, D.C., and in Paris to 

determine the criteria used by agencies to set staffing levels at the 

Paris embassy. To assess costs, we interviewed budget and financial 

management officials from State and collected data on the different 

categories of operating costs, such as salaries and benefits, from each 

agency with staff assigned to the Paris embassy. To determine the 

feasibility of rightsizing actions, we collected and analyzed data 

associated with (1) relocating certain functions to the United States, 

regional centers in Europe, or other locations in France and (2) 

outsourcing or streamlining some functions. We visited State’s regional 

logistics and procurement offices in Antwerp, Belgium, and Frankfurt, 

Germany, which have been considered as options for expanded regional 

operations in Europe. To determine if opportunities exist to outsource 

functions, we collected and analyzed data on the business and staffing 

practices of Paris-based businesses, other U.S. embassies in western 

Europe, and other bilateral diplomatic missions in Paris.



We conducted our work between September 2001 and May 2002 in accordance 

with generally accepted government auditing standards.



We are sending copies of this report to other interested Members of 

Congress. We are also sending copies of this report to the Director of 

OMB and the Secretary of State. Copies will be made available to others 

upon request. In addition, this report will be available at no charge 

on the GAO Web site at http://www.gao.gov.



If you or your staff have any questions about this report, please 

contact me on (202) 512-4128. Another GAO contact and staff 

acknowledgments are listed in appendix V.



Sincerely yours,



Jess T. Ford

Director, International Affairs and Trade:



Signed by Jess T. Ford:



[End of section]



Appendix I: Timeline of Rightsizing Initiatives since the 1998 Embassy 

Bombings:



Time frame: January 1999; Initiative: Following the bombings of the 

U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, that 

killed more than 220, including 12 Americans, and injured more than 

4,000, the Accountability Review Boards recommended that the Department 

of State look into decreasing the size and number of embassies and 

consulates to reduce employees’ vulnerability to attack.



Time frame: November 1999; Initiative: The Overseas Presence Advisory 

Panel (OPAP) reported that overseas staffing levels had not been 

adjusted to reflect changing missions and requirements; thus, some 

embassies were too large and some were too small. OPAP said rightsizing 

was an essential component of an overall program to upgrade embassy and 

consulate capabilities, and it recommended that this be a key strategy 

to improve security by reducing the number of staff at risk. OPAP also 

viewed rightsizing as a way to decrease operating costs by as much as 

$380 million annually if a 10 percent worldwide staffing reduction 

could be achieved.



Time frame: February 2000; Initiative: President Clinton directed the 

Secretary of State to lead an interagency effort to (1) develop a 

methodology for assessing embassy staffing and (2) recommend 

adjustments, if necessary, to staffing levels at six pilot study 

embassies. We reported that the interagency committee was not 

successful in developing such a methodology. Although the committee 

concluded that it was impractical to develop a standard approach 

because of differences among embassies, we reported that the pilot 

studies had limited value because they were conducted without focused, 

written guidelines, and committee members did not spend enough time at 

each embassy for a thorough evaluation.



Time frame: August 2001; Initiative: The President’s Management Agenda 

identified rightsizing as one of the administration’s management 

priorities. President Bush directed the Office of Management and Budget 

(OMB) to collect, analyze, and review overall U.S. government staffing 

to help reconfigure overseas staff allocation to the minimum number 

necessary to achieve U.S. foreign policy goals.



Time frame: February 2002; Initiative: The President’s fiscal year 2003 

international affairs budget highlighted the importance of making 

staffing decisions on the basis of mission priorities and costs and 

directed OMB to analyze agencies’ overseas staffing and operating 

costs.



Sources: GAO analysis of the reports of the Accountability Review 

Boards, OPAP, and the Interagency Committee and of the President’s 

Management Agenda and the fiscal year 2003 international affairs 

budget.



[End of table]



[End of section]



Appendix II: Rightsizing Framework and Corresponding Questions:



Physical/technical security of facilities and employees: What is the 

threat and security profile of the embassy?.



Physical/technical security of facilities and employees: Has the 

ability to protect personnel been a factor in determining staffing 

levels at the embassy?.



Physical/technical security of facilities and employees: To what extent 

are existing office buildings secure?.



Physical/technical security of facilities and employees: Is existing 

space being optimally utilized?.



Physical/technical security of facilities and employees: Have all 

practical options for improving the security of facilities been 

considered?.



Physical/technical security of facilities and employees: Do issues 

involving facility security put the staff at an unacceptable level of 

risk or limit mission accomplishment?.



Physical/technical security of facilities and employees: Do security 

vulnerabilities suggest the need to reduce or relocate staff?.



Mission priorities and requirements: What are the 

staffing levels and mission of each agency?.



Mission priorities and requirements: How do 

agencies determine embassy staffing levels?.



Mission priorities and requirements: Is there an 

adequate justification for the number of employees at each agency 

compared with the agency’s mission?.



Mission priorities and requirements: Is there 

adequate justification for the number of direct hire personnel devoted 

to support and administrative operations?.



Mission priorities and requirements: What are the 

priorities of the embassy?[A].



Mission priorities and requirements: Does each 

agency’s mission reinforce embassy priorities?.



Mission priorities and requirements: To what extent 

are mission priorities not being sufficiently addressed due to staffing 

limitations or other impediments?.



Mission priorities and requirements: To what extent 

are workload requirements validated and prioritized and is the embassy 

able to balance them with core functions?.



Mission priorities and requirements: Do the 

activities of any agencies overlap?.



Mission priorities and requirements: Given embassy 

priorities and the staffing profile, are increases in the number of 

existing staff or additional agency representation needed?.



Mission priorities and requirements: To what extent 

is it necessary for each agency to maintain its current presence in 

country, given the scope of its responsibilities and its mission?; - 

Could an agency’s mission be pursued in other ways?; - Does an agency 

have regional responsibilities or is its mission entirely focused on 

the host country?.



Cost of operations: What is the 

embassy’s total annual operating cost?.



Cost of operations: What are the 

operating costs for each agency at the embassy?.



Cost of operations: To what extent 

are agencies considering the full cost of operations in making staffing 

decisions?.



Cost of operations: To what extent 

are costs commensurate with overall embassy strategic importance, with 

agency programs, and with specific products and services?.



Consideration of rightsizing options: What are the 

security, mission, and cost implications of relocating certain 

functions to the United States, regional centers, or to other 

locations, such as commercial space or host country counterpart 

agencies?.



Consideration of rightsizing options: To what extent 

could agency program and/or routine administrative functions 

(procurement, logistics, and financial management functions) be handled 

from a regional center or other locations?.



Consideration of rightsizing options: Do new 

technologies and transportation links offer greater opportunities for 

operational support from other locations?.



Consideration of rightsizing options: Do the host 

country and regional environments suggest there are options for doing 

business differently, that is, are there adequate transportation and 

communications links and a vibrant private sector?.



Consideration of rightsizing options: To what extent 

is it practical to purchase embassy services from the private sector?.



Consideration of rightsizing options: Does the ratio 

of support staff to program staff at the embassy suggest opportunities 

for streamlining?.



Consideration of rightsizing options: Can functions 

be reengineered to provide greater efficiencies and reduce requirements 

for personnel?.



Consideration of rightsizing options: Are there best 

practices of other bilateral embassies or private corporations that 

could be adapted by the U.S. embassy?.



Consideration of rightsizing options: To what extent 

are there U.S. or host country legal, policy, or procedural obstacles 

that may impact the feasibility of rightsizing options?.



[A] Embassy priorities are the U.S. government priorities in that 

country. 

Source: GAO.



[End of table]



[End of section]



Appendix III: Comments from the Office of Management and Budget:



EXECUTIVE OFFICE OF THE PRESIDENT OFFICE OF MANAGEMENT AND BUDGET 

WASHINGTON, D.C. 20503:



July 11, 2002:



THE DIRECTOR:



Jess T. Ford, Director International Affairs and Trade United States 

General Accounting Office 441 G Street, NW:



Washington, D.C. 20548:



Dear Mr. Ford:



The Office of Management and Budget is pleased to have the opportunity 

to provide comments on your draft report, “Framework for Assessing 

Embassy Staff Levels Can Support Rightsizing Initiatives.” We 

appreciate the effort by GAO to develop a rightsizing methodology that 

fits soundly with the Administration’s rightsizing initiative.



OMB agrees that mission priorities, cost and security are key elements 

to the rightsizing framework. In addition, workload requirements, 

options for information technology, regionalization possibilities and 

competitive sourcing opportunities should be considered in order to 

adapt the methodology to fit each post.



Rightsizing is not a synonym for downsizing. It is meant to signify the 

most efficient, cost-effective deployment of resources overseas in away 

that assures US representation matches and serves US priorities. 

Rightsizing requires a fundamental change in the way that we link the 

United States Government’s mission overseas with our foreign policy 

goals and then determine which agency is best suited to implement and 

achieve those goals.



Agencies should be held accountable in budgeting for their overseas 

staffing decisions. We are in the process of addressing this by working 

with the State Department to develop a rent surcharge proposal. 

Agencies need to be encouraged to consider the total cost to the United 

States Government (USG) of sending personnel overseas. We are 
addressing 

this by adapting the A-11 Budget Request process to agencies and 

requesting they include overseas staffing and cost data in FY04.



Ambassadors are currently delegated authority for staffing decisions 

but have little cost data or information on real agency needs. They 

should be provided with multiagency cost and staffing information so 

that they are well informed and empowered to manage resources, 

requirements and staff to the appropriate level. We have addressed this 

by working with the State Department to revise the mission performance 

planning process (MPP). The FY04 MPPs now include: multiagency input, 

workload requirements by priority on each agency and projected over 

several years, a reduction in the number of priorities posts may claim 

(from up to 15 to up to 5) and Ambassador certification of the entire 

document.



It is easy to suggest that agencies should assign staff to a region not 

a country, but it is hard particularly for smaller agencies to make 

significant resource shifts to such an option. We are addressing this 

by coordinating the acquisition and rightsizing of the Creekbed 

hospital in Frankfurt as a pilot for regional-based efforts. This will 

be a regional center for Europe and Eurasia. We are also looking at 

potential alternative regional centers in other European locations.



We are not confident the GAO methodology can be uniformly applied at 

all posts worldwide. While the results seem to work well in Paris, 

there are a multitude of other posts with widely varied issues and 

needs that may not be addressed in this methodology. We believe that 

the methodology proposed in this report may serve as a valuable 

starting point for the development of a broader methodology that can be 

applied worldwide. Based on the recommendations in this report we look 

forward to working with you and the State Department to develop a 

rightsizing methodology that can be applied to all new and existing 

embassies.



The Administration’s interagency rightsizing initiative is moving from 

recommendations to concrete steps that will have an impact on how 

resources of all USG agencies are deployed overseas. On a practical 

level, OMB, State, and other USG agencies have been working to ensure 

that a proposed new interagency regional center in Frankfurt, Germany 

is developed from the outset to serve country-specific and regional 

needs. State and OMB are analyzing the current staff USG agencies have 

in Frankfurt as well as some functions USG agencies perform across 

Europe, to determine which functions could be regionalized in Frankfurt 

or performed from the United States. A more extensive pilot project on 

interagency rightsizing is underway to examine all posts within the 

European and Eurasia Bureau. This pilot effort will involve OMB and 

interagency cooperation and build upon the rightsizing work of GAO to 

consider how to conduct rightsizing on a larger scale. Finally, State 

and OMB are working to develop a cost sharing mechanism that would 

apply to all USG agencies to finance the construction of new embassies. 

If properly designed, a cost sharing mechanism for capital costs could 

be a powerful on-going incentive to rightsize future presence at new 

posts.



Once again, we appreciate the opportunity to comment and hope that you 

will incorporate our observations into your final report to Congress. 

If you have any questions concerning this response, please contact Ms. 

Alexandra Gianinno of the International Affairs Division at (202) 395-

1483.



Sincerely,



Mitchell E. Daniels, Jr. Director:



Signed by Mitchell E. Daniels, Jr. Director:



[End of section]



Appendix IV: Comments from the Department of State:



Note: GAO comments supplementing those in the report text appear at the 

end of this appendix.



United States Department of State:



Washington, D.C.20520:



Dear Ms. Westin:



We appreciate the opportunity to review your draft report, “OVERSEAS 

PRESENCE: Framework for Assessing Embassy Staff Levels Can Support 

Rightsizing Initiatives,” GAO-02-780, GAO Job Code 320123.



The enclosed Department of State comments are provided for 

incorporation with this letter as an appendix to the final report.



If you have any questions concerning this response, please contact 

William Duffy, Policy Analyst, Office of Management Policy, at (202) 

647-0093.



Sincerely,



Christopher B. Burnham Assistant Secretary and Chief Financial 

Officer:



Signed by Christopher B. Burnham:



Enclosure:



As stated.



cc: GAO/IAT - John Brummet State/OIG - Mr. Berman State/M/P - 

Marguerite Coffey:



Ms. Susan S. Westin, Managing Director, International Affairs and 

Trade, U.S. General Accounting Office.



Department of State Comments on GAO Draft Report OVERSEAS PRESENCE: 

Framework for Assessing Embassy Staff Levels Can Support Rightsizing 

Initiatives (GAO Report 02-780, GAO Job Code 320123):



The Department of State welcomes GAO’s work on developing a right-

sizing framework. GAO’s framework lays out a common-sense approach that 

asks the kinds of questions Chiefs of Mission (COMs) and other 

decision-makers have always routinely addressed through formal and 

informal processes when considering staffing issues.



We endorse GAO’s definition of rightsizing:



Rightsizing [is] aligning the number and location of staff assigned 

overseas with foreign policy priorities and security and other 

constraints. Rightsizing may result in the addition or reduction of 

staff, or a change in the mix of staff at a given embassy or consulate.



A range of U.S.G. agencies has traditionally staffed U.S. embassies and 

consulates. The current number of American direct hire positions under 

the authority of Chiefs of Mission stands at about 18,000, smaller now 

than at its 1966 peak of 42,000. The current level is essentially the 

same as in 1990, and reflects a 4.5% decline since 1995. Since at least 

the 1950s, the Department of State has represented a third or less of 

all overseas staffing.



Rationalizing the U.S. Government’s overseas presence - an objective of 

successive Administrations since the 1960s - is no easy task. Past 

efforts to develop an interagency staffing methodology have not 

succeeded. The 1999 Overseas Presence Advisory Panel (OPAP), for 

example, did not develop such a methodology, even though its original 

charter charged it with “preparing a report recommending the criteria 

by which [the USG] might determine the location, size, and composition 

of overseas posts in the coming decade.”:



There is no substitute for face-to-face interaction with host 

governments and publics.State continues to support the principle of 

universality, under which the U.S. Government maintains an on-the-

ground presence in virtually all nations with which we have diplomatic 

relations. We agree with OPAP’s conclusion that “a universal, on-the-

ground overseas presence is more critical than ever to the nation’s 

well-being.”:



The Department of State’s policy is to pursue regionalization 

initiatives when appropriate. It relies heavily on centralizing a 

variety of administrative, consular, and some policy functions (e.g., 

Labor Attaches, Environment and Science hubs), either overseas or in 

the United States. State has four U.S. regional centers:



* The Fort Lauderdale Regional Center provides support services to U.S. 

posts throughout the Western Hemisphere. * The National Visa Center in 

Portsmouth NH and the Kentucky Consular Center in Williamsburg KY 

perform various consular tasks traditionally carried out at individual 

posts.



* The Charleston (SC) Financial Service Center provides financial 

services for U.S. posts throughout the Western Hemisphere and for some 

European posts, and is in the process of assuming financial services 

for additional European and African posts formerly carried out at the 

regional Financial Service Center in Paris.



State is also shifting routine passport production from overseas posts 

to U.S. domestic passport agencies in order to take advantage of the 

high security passport photodigitization process installed in the 

United States.



When relocation to the United States is not feasible, U.S.G. agencies 

(including State) use many embassies and consulates such as Frankfurt 

and Bangkok as regional platforms for their activities.



As GAO has pointed out, a major U.S.G. regionalization effort now 

underway is the Frankfurt Regional Support Center, to be located on the 

site of what was the Department of Defense’s 469th Hospital. The Center 

will be home to numerous personnel from State and other U.S.G. agencies 

with regional responsibilities for Africa, Europe, Eurasia, and the 

Middle East.



A large number of staff in non-regional centers also have regional 

responsibilities. For example, employees manage many medical and 

security functions on a regional basis. While we can gain economies 

(usually in the management field) by regionalizing some functions, this 

does not eliminate the need for more people at some posts.



In addition, it should be pointed out that there are negative aspects 

to regionalization. One drawback to locating personnel away from the 

posts they serve is reduced linguistic and cultural awareness and 

knowledge that is required to function well-issues for which GAO has 

previously criticized State. In this context, it should be noted that 

for a regional American officer to function effectively when s/he does 

not have language and cultural skills, the regionally serviced post 

basically needs to hire at least one foreign national employee to work 

the issues in the regional officer’s absence. Fundamentally, as OPAP 

concluded “a universal, on-the-ground overseas presence is more 

critical than ever to the nation’s well-being.”:



Another drawback is that the Department of State reports that it is 

increasingly difficult to find personnel who are willing to provide 

true regional service, i.e., spend 600 of their time on the road. 

Although the issue may be addressable through career or financial 

incentives, there will be costs associated with going over to a 

“regional” basis of service.



GAO prioritizes the three elements in its framework as Security - 

Mission - Cost. We think a more logical priority would put “mission” 

first. The first question that must be answered before all others is 

whether the United States has a compelling reason to be in a particular 

location. If the answer is “Yes,” then it may be necessary to place 

personnel there, even in the face of serious security concerns or 

excessive costs (e.g., the recent opening of the U.S. Embassy in Kabul, 

Afghanistan). If the answer is “No,” the question of whether personnel 

can be securely or economically located there is irrelevant.



The draft GAO report does not mention some of the primary drivers for 

other agencies’ overseas staff increases.



* Agencies want to maintain independence. Despite the “country team” 

concept, agency offices in missions seek to avoid the constraints of 

standardized mission services, practices, systems, and regulations. 

As long as agencies are free to maintain independent and separate 

support standards, they will add in-house staff to achieve them. 

The GAO report (p. 9) notes this indirectly in mentioning the 

separate furniture inventories and warehouse staff in Paris, but it 

does not make clear that this can be a primary driver of staff size 

rather than a corollary result.



* The “rank-in-job” system of non-Foreign Affairs Agencies encourages 

incentives for staff growth that are not part of the growth dynamic for 

the “rank-in-person” Foreign Affairs agencies. Conversely, reducing 

staff tends toward downgrading of staff and meets resistance.



* Office assets of non-Foreign Affairs agencies are often linked to 

size as well. For example, most agency heads at posts have government 

owned vehicles; almost no agencies other than State participate in 

pooled vehicles for transporting staff. The larger an agency unit, the 

more justification it has to expand the number of vehicles it has. This 

principle extends to other resources/assets as well.



* The costs of overseas offices’ operations are often infinitesimal 

compared to the agency’s total programs, which are primarily 

domestically based (e.g., Defense, Agriculture, Justice) and only small 

blips at the agency-level budget allocations. As a result, serious 

analysis of the sizing of an agency’s overseas presence and 

coordination with other activities and mission priorities is often 

neglected. The COM through the NSDD 38 process effectively bears the 

entire burden of enforcing rightsizing. The COM has little in the way 

of resources, time, or practical mechanisms for communication about 

agency objectives and priorities in placing personnel at a particular 

mission. Nor is there any organizational structure charged with 

evaluating whether the agencies’ mission could be better achieved from 

a different location. Without an enforcement mechanism, GAO’s proposed 

criteria will not be effectively applied and it is likely that the 

particular needs of the requesting agencies will prevail over the 

broader interest in rightsizing.



The report does not mention International Cooperative Administrative 

Support Services (ICASS), implemented in FY 1998. ICASS is the shared 

administrative support system through which more than 250 U.S. 

government entities at our overseas posts obtain essential services and 

share costs of operating facilities and services. ICASS’s cost 

distribution system ensures that a more comprehensive estimate of the 

cost of each agency’s presence overseas is reflected in that agency’s 

budget.



One example GAO cites as a position that could be transferred from 

Paris to Frankfurt - the National Science Foundation - is particularly 

troubling. According to GAO, the representative “spent approximately 40 

percent of his time in 2001 outside of France” (p. 9). We disagree with 

the proposition that a position whose incumbent spends 600 of the time 

in one location should be moved to a “regional” location elsewhere.



We look forward to continuing to work with GAO and the Office of 

Management and Budget on rightsizing.



The following are GAO’s comments on the Department of State’s letter 

dated July 9, 2002.



GAO’s Comments:



1.	 We did not set priorities for the elements in the framework that 

appear in this report. As we state on page 9, decision makers need to 

consider all three elements of the framework together to make 

reasonable decisions regarding staff size.



2.	 In the mission priorities and requirements section, the framework 

includes the question, “To what extent is it necessary for each agency 

to maintain its current presence in country?” The amount of time that 

officials spend in country is a key factor needed to answer the 

question and in this case the location of the National Science 

Foundation’s representative in Paris warranted further analysis as a 

possible candidate for rightsizing. The mandate of the National Science 

Foundation representative is to communicate with bilateral and 

multilateral counterpart agencies in more than 35 countries in Europe 

and Eurasia. The representative stated that he could do his job from 

any location in Europe, as long as he has high-speed internet 

connectivity. Given security limitations at facilities in Paris and the 

availability, in the near future, of secure space in Frankfurt, 

Germany, decision makers should consider these types of positions for 

relocation.



[End of section]



Appendix V: GAO Contact and Staff Acknowledgments:



GAO Contact:



John Brummet (202) 512-5260:



Staff Acknowledgments:



In addition to the person named above, David G. Bernet, Janey Cohen, 

Chris Hall, Katie Hartsburg, Lynn Moore, and Melissa Pickworth made key 

contributions to this report.



[End of section]



FOOTNOTES



[1] Throughout this report, we refer to rightsizing issues at 

embassies. However, the rightsizing process is also applicable to 

diplomatic offices that are located outside the capital cities. For our 

purposes, we define rightsizing as aligning the number and location of 

staff assigned overseas with foreign policy priorities and security and 

other constraints. Rightsizing may result in the addition or reduction 

of staff, or a change in the mix of staff at a given embassy or 

consulate.



[2] Office of Management and Budget, The President’s Management Agenda, 

Fiscal Year 2002 (Washington, D.C.: August 2001).



[3] U.S. General Accounting Office, Overseas Presence: Observations on 

a Rightsizing Framework, GAO-02-659T (Washington, D.C.: May 1, 2002).



[4] Secretary of State Madeline Albright established OPAP following the 

1998 embassy bombings in Africa to consider the organization of U.S. 

embassies and consulates. Department of State, America’s Overseas 

Presence in the 21st Century, The Report of the Overseas Presence 

Advisory Panel (Washington, D.C.: November 1999).



[5] U.S. Department of State, Trends in American (US) Full-Time 

Permanent (FTP) Direct-Hire (USDH) World Wide Positions FY 1985 - FY 

2001 (Washington, D.C.: June 2001).



[6] Testimony of Nancy Dorn, Deputy Director of the Office of 

Management and Budget, before the Subcommittee on National Security, 

Veterans Affairs, and International Relations, House Committee on 

Government Reform, on May 1, 2002.



[7] Secretary of State Albright appointed the Accountability Review 

Boards to investigate the facts and circumstances surrounding the 1998 

embassy bombings in East Africa. Department of State, Report of the 

Accountability Review Boards on the Embassy Bombings in Nairobi and Dar 

Es Salaam (Washington, D.C.: January 1999).



[8] U.S. General Accounting Office, Overseas Presence: More Work Needed 

on Embassy Rightsizing, GAO-02-143 (Washington, D.C.: Nov. 27, 2001).



[9] Office of Management and Budget, Budget of the U.S. Government, 

Fiscal Year 2003 (Washington, D.C.: Feb. 4, 2002).



[10] According to the Foreign Service Act of 1980 (P.L. 96-465), as 

amended, “chiefs of mission” are principal officers in charge of 

diplomatic missions of the United States or of a U.S. office abroad, 

such as U.S. ambassadors, who are responsible for the direction, 

coordination, and supervision of all government executive branch 

employees in a given foreign country (except employees under a military 

commander).



[11] Mission Performance Plans are annual embassy plans describing 

performance goals and objectives.



[12] Testimony of Lewis B. Kaden, chairman of the Overseas Presence 

Advisory Panel, before the Subcommittee on National Security, Veterans 

Affairs, and International Relations, House Committee on Government 

Reform, on May 1, 2002.



[13] Dorn, May 1, 2002.



[14] Kaden, May 1, 2002.



[15] Following the 1998 embassy bombings, a provision was passed into 

law, codified at 22 U.S.C. § 4865, that requires the Secretary of 

State, in selecting a site for any new U.S. diplomatic facilities 

abroad, to ensure that all U.S. personnel under chiefs of mission 

authority be located on the site. However, the Secretary of State may 

waive this requirement, if the Secretary, together with the heads of 

those agencies with personnel who would be located off site, determine 

that security considerations permit it and that it is in the U.S. 

national interests. 



[16] With enactment of the Federal Activities Inventory Reform Act of 

1998 (P.L. 105-270), Congress mandated that U.S. government agencies 

identify activities within each office that are not “inherently 

governmental,” that is, commercial activities. Competitive sourcing 

involves using competition to determine whether a commercial activity 

should be performed by government personnel or contractors. The 

President’s Management Agenda states that competition historically has 

resulted in a 20-to 50-percent cost savings for the government.



[17] State currently has a central contract requiring that all overseas 

posts purchase furniture from the United States and not from local 

sources. Logistics management officials at State said that the contract 

is currently under renegotiation and that the revised agreement will 

include local procurement allowances for pilot posts. 



[18] U.S. General Accounting Office, State Department: Options for 

Reducing Overseas Housing and Furniture Costs, GAO/NSIAD-98-128 

(Washington, D.C.: July 31, 1998).



[19] U.S. General Accounting Office, Supporting Congressional 

Oversight: Framework for Considering Budgetary Implications of Selected 

GAO Work, GAO-01-447 (Washington, D.C.: May 9, 2001).



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