Page 1 GAO-14-661R U.S. Embassy Kabul Construction

441 G St. N.W.

Washington, DC 20548

July 8, 2014

Congressional Addressees

Afghanistan: Kabul Embassy Construction Costs Have Increased and Schedules Have 

Been Extended 

Since re-opening in 2002, the U.S. embassy in Kabul, Afghanistan, experienced a dramatic 

increase in staffing, followed by a gradual drawdown. To address space needs, the Department 

of State (State) awarded two contracts in 2009 and 2010, totaling $625.4 million, to construct 

additional housing and office facilities on the embassy compound. State has since partially 

terminated one contract for the convenience of the U.S. government, and has expanded the 

construction requirements of the second.

We performed our work under the authority of the Comptroller General to conduct evaluations 

on GAO's initiative because of broad congressional interest in the oversight and accountability 

of U.S. funds used in Afghanistan. We reviewed

• what contracts State put in place to construct new U.S. embassy facilities in Kabul 

starting in 2009;

• the extent to which construction requirements, cost, or schedule have changed, and the 

reasons for the changes; and

• the extent to which the present expansion matches projected needs. 

To conduct this work, we obtained and evaluated construction planning and contract 

documents, interviewed State and contractor officials, and traveled to Kabul in February 2014 to 

perform fieldwork. This report formally transmits the briefing we presented to congressional 

committees in June 2014 (see the enclosure for GAO’s briefing presentation). 

We conducted this performance audit from July 2013 to July 2014 in accordance with generally 

accepted government auditing standards. Those standards require that we plan and perform the 

audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings 

and conclusions based on our audit objectives. We believe that the evidence obtained provides 

a reasonable basis for our findings and conclusions based on our audit objectives.

Background

State’s Bureau of Overseas Buildings Operations (OBO) is responsible for project planning, 

design, and construction of U.S. diplomatic facilities abroad. 

From 2002 through 2009, State took several actions to expand the U.S. embassy compound in 

Kabul. Initially, OBO refurbished the existing office building, built in the 1960s. Additionally, OBO 
Page 2 GAO-14-661R U.S. Embassy Kabul Construction

completed the construction of a new chancery office building, staff apartments, and support 

facilities. As staffing increases continued, the embassy acquired hundreds of shipping 

containers for temporary offices and housing. The embassy also compressed office space by 

putting more desks in the new chancery and old existing office building. Today the Kabul 

embassy compound consists of the original compound on the west side of Great Massoud 

Road, referred to as the West Compound, and an expansion compound on the east side of 

Great Massoud Road, referred to as the East Compound (see figure 1 on page 8 of the 

enclosure).

State Awarded Two Contracts Totaling $625.4 Million to Meet Growing Facility 

Requirements

In 2009 and 2010, State awarded two contracts totaling $625.4 million to meet growing facility 

requirements at the U.S. embassy in Kabul. 

• On September 30, 2009, State awarded a $209.4 million contract to Contractor 1 for the 

design and construction of temporary offices and housing as well as permanent 

structures to include an office annex A, apartment building 1, a cafeteria and recreation 

center, perimeter security and compound access facilities, a warehouse addition, and a 

utility building. Upon State’s issuance of a notice to proceed with design work, Contractor

1 was to complete the temporary facilities within 6 months and the permanent facilities 

within 27 months. 

• On September 30, 2010, State awarded a $416 million contract to Contractor 2 for the 

design and construction of office annex B, apartment buildings 2 and 3, expansion of 

existing apartment building 4, compound access and perimeter security facilities, and 

parking facilities. Upon State’s issuance of a notice to proceed with design work, 

Contractor 2 was to complete these facilities within 48 months. 

State’s plans called for sequencing construction under the two contracts and demolishing older 

temporary facilities to make space available for current construction projects. State’s plans also 

entailed acquiring an adjacent site from the Afghan Ministry of Public Health to enable 

construction of parking facilities for approximately 400 vehicles. In September 2011, State 

partially terminated the permanent facilities requirements in the Contractor 1 contract for the 

convenience of the U.S. government due to concerns, in part, about performance and schedule 

delays. Contractor 1 completed the temporary offices and housing units. In September 2011, 

State transferred contract requirements for the permanent facilities not begun by Contractor 1 to 

Contractor 2’s contract and extended the completion date from January 2016 to July 2016. As of 

February 2014, when we visited the site, the construction of office annexes A and B and 

apartment building 1 was in-process. (See figure 4 on page 14 of the enclosure for photos of 

those buildings). Construction of apartment buildings 2 and 3 is planned to follow the relocation 

of staff into office annex A and the demolition of temporary USAID offices that previously 

housed them. 
Page 3 GAO-14-661R U.S. Embassy Kabul Construction

Multiple Factors Have Affected Construction Requirements, Increased Cost, and 

Extended Schedule

Since the two contracts were awarded in 2009 and 2010, construction requirements have 

changed, costs have increased, and schedules have been extended. 

OBO’s original construction requirements have changed. In December 2009, OBO added two 

stories to planned office annex A. In September 2011, after the U.S. and Afghan governments

did not reach agreement to transfer the Afghan Ministry of Public Health site to the U.S. 

government, OBO removed the parking facilities from Contractor 2’s contract. The embassy 

also requested that OBO reconfigure the existing office building’s second floor. In March 2012 

and September 2013, new security upgrades to perimeter walls and guard towers were added. 

Because of the building alterations, OBO is building space for more desks and beds than 

originally planned. The new office annexes under construction are to contain 1,237 desks, a 

nearly 60 percent increase over the 778 desks originally planned. OBO is also building space 

for 661 beds, about 50 more than originally planned.

Contract costs for construction have increased by nearly 24 percent, from $625.4 million to

$773.9 million as of May 2014. (See table 1 on page 20 of the enclosure.) This $148.5 million 

cost increase is the result of multiple contract modifications to change construction 

requirements, including the transfer of construction requirements from the 1st contract to the 

2nd contract.

1

The overall project schedule has also been extended. OBO had originally planned to complete 

all construction on the compound by the end of summer 2014; the contractual delivery date for 

all permanent facilities is currently July 2016. (See figure 6 on page 21 of the enclosure.)

Factors affecting the project include:

• Increases in numbers and changes in composition of embassy staffing requirements. 

• Risks introduced by State during planning, such as awarding contracts before the 

Afghan Ministry of Public Health site was fully acquired and tightly sequencing the work 

of two contractors on one construction site. 

• Constructing new facilities on an occupied compound in a conflict environment. 

• Contractor performance delays and transfer of construction requirements from one 

contract to another.

• Delays and changes to shipping routes of building materials due to difficulties with 

shipments transiting through Pakistan. 

Several issues remain unresolved on this project, which may further affect requirements, cost 

and schedule. For example, shipping building materials to the site by alternate routes instead of 

Pakistan, where delays have occurred, could increase future costs. 

 1

Totals do not reflect State’s $40 million congressional reprogramming request in 2014 to cover future additional 

shipping costs.
Page 4 GAO-14-661R U.S. Embassy Kabul Construction

Difficult to Determine Whether Current Project Will Meet Future Embassy Needs

It is difficult to determine whether current projects and existing facilities will meet future embassy 

needs. Long-term construction has been occurring in an unpredictable political and security 

environment characterized by dramatic changes in U.S. staff levels. Additionally, as the U.S. 

military draws down its presence in Afghanistan, State will have to decide whether to close its 

facilities in the field or engage support contractors to replace life-support services currently 

provided by the military, such as food, water, fuel, and medical services. Such changes may 

affect embassy staffing and operations. Future composition of U.S. agencies, staffing levels, 

and embassy facility needs continue to be subject to change.

Once current contracts are completed, the Kabul embassy’s permanent facilities—both older 

and newly-constructed office and apartment buildings—are to contain 1,487 desks and 819 

beds. These totals do not include any desks or beds within temporary offices and housing that

State expects to demolish. Furthermore, the desk totals assume that compressed office areas in 

currently crowded office buildings will be alleviated as some staff move out of those areas and 

into the newly completed office annexes. 

Projected embassy staffing for 2015 is approximately 600 U.S. direct hires and 1,100 locally 

employed staff. State is working to identify its and other agencies’ desk positions (both U.S. 

direct hires and locally employed staff) that will occupy the new office space. State is also 

examining how to accommodate new support contractors—either on or off compound—that may 

be used to provide needed services after the U.S. military departs Afghanistan. 

State is conducting a master planning study, due in August 2014, to address on-compound 

facility needs unmet by current construction. That plan may address parking facilities that were 

removed from the current construction project. State is also considering the continued use of 

various leased off-compound facilities in the future.

Agency Comments

We are not making any recommendations in this report. We provided a draft of this report to 

State for comment. State provided technical comments that we incorporated as appropriate.

- - - -

We are sending copies of this report to the appropriate congressional committees, the Secretary 

of State, and other interested parties. In addition, the report will be available at no charge on 

GAO’s website at http://www.gao.gov. 
Page 5 GAO-14-661R U.S. Embassy Kabul Construction

If you or your staffs have any questions about this report, please contact either Michael J. 

Courts at (202) 512-8980 or at courtsm@gao.gov or David Wise at (202) 512-5731 or at 

wised@gao.gov. Contact points for our Office of Congressional Relations and Office of Public 

Affairs can be found on the last page of this report. In addition to the contacts named above, 

Michael Armes (Assistant Director, Physical Infrastructure), Leslie Holen (Assistant Director, 

International Affairs and Trade) John Bauckman, Jacob Beier, Eugene Beye, David Hancock, 

Jon Fremont, and Marc Schwartz all made key contributions to this report. Technical assistance 

was provided by Lynn Cothern, Etana Finkler, Kristine Hassinger, Ernie Jackson, Oziel Trevino, 

and Gwyneth Woolwine.

Michael J. Courts

Director, International Affairs and Trade

David J. Wise

Director, Physical Infrastructure Issues

Enclosure
Page 6 GAO-14-661R U.S. Embassy Kabul Construction

List of Addressees 

The Honorable Carl Levin

Chairman

The Honorable James Inhofe

Ranking Member

Committee on Armed Services

United States Senate

The Honorable Robert Menendez

Chairman 

The Honorable Bob Corker 

Ranking Member 

Committee on Foreign Relations 

United States Senate

The Honorable Tom Coburn

Ranking Member

Committee on Homeland Security and Governmental Affairs

United States Senate

The Honorable Patrick J. Leahy

Chairman

The Honorable Lindsey Graham

Ranking Member

Subcommittee on State, Foreign Operations, and Related Programs

Committee on Appropriations

United States Senate

The Honorable Howard P. “Buck” McKeon

Chairman

The Honorable Adam Smith

Ranking Member

Committee on Armed Services

House of Representatives

The Honorable Edward R. Royce 

Chairman 

The Honorable Eliot L. Engel 

Ranking Member 

Committee on Foreign Affairs 

House of Representatives

The Honorable Elijah Cummings

Ranking Member

Committee on Oversight and Government Reform

House of Representatives

The Honorable Kay Granger

Chairwoman

The Honorable Nita Lowey
Page 7 GAO-14-661R U.S. Embassy Kabul Construction

Ranking Member

Subcommittee on State, Foreign Operations, and Related Programs

Committee on Appropriations

House of Representatives

The Honorable John Tierney 

Ranking Member

Subcommittee on National Security

Committee on Oversight and Government Reform

House of Representatives
Afghanistan: Kabul Embassy 

Construction Costs Have Increased 

and Schedules Have Been Extended

Briefing for Congressional Committees

June 2014

Page 1
Introduction

• Since re-opening in 2002, the U.S. Embassy in Kabul, 

Afghanistan has experienced a dramatic increase in 

staffing, followed by a gradual drawdown. 

• In 2009 and 2010, State awarded two contracts totaling 

$625.4 million to construct additional housing and office 

facilities. State has since partially terminated one contract 

for the convenience of the U.S. government, and expanded 

the construction requirements of the second. 

• Due to broad congressional interest in the oversight of 

funds spent in Afghanistan, we conducted this review 

under the authority of the Comptroller General of the 

United States to conduct evaluations on GAO’s initiative.

Page 2
Objectives

1. What contracts did State put in place to construct new 

U.S. embassy facilities in Kabul starting in 2009?

2. To what extent have construction requirements, cost, 

or schedule changed, and why?

3. To what extent does the present expansion match 

projected needs? 

Page 3
Methodology

• Methodology: Review of construction planning and contract 

file documentation, interviews with State and contractor 

officials, and February 2014 fieldwork in Kabul to observe 

progress made. We conducted this work from July 2013 

through June 2014. 

• State provided technical comments for this briefing, which 

we have incorporated as appropriate.

Page 4
Results in Brief

• In 2009 and 2010, State awarded two contracts totaling $625.4 

million to meet growing facility requirements. The first contract 

was partially terminated in 2011; the remaining construction 

requirements were transferred to the other contractor.

• Construction requirements have changed; for example, 

additional desks and beds are to be provided. Total current cost 

is $773.9 million, and overall project schedule has been 

extended by 2 years. 

• Uncertain political and security environment makes it difficult to 

determine whether current projects and existing facilities will 

meet future embassy needs.

Page 5
State Constructs Diplomatic Facilities 

Worldwide

• State’s Bureau of Overseas Buildings Operations (OBO) is 

responsible for project planning, design, and construction of 

embassy facilities abroad.

• Embassy construction typically occurs on newly acquired 

property separate from an operating compound. 

• State asserts that construction times for new embassy 

compounds range from 30 to 48 months. State indicates that 

such times can exceed that norm due to factors such as building 

on an existing compound.

• Construction requirements usually include all facilities, 

contracted to a single construction firm or a joint venture 

partnership consisting of multiple firms. 

Page 6

Background
Embassy Compound Expansion from 2002 

through 2009

• From 2002 through 2009, State took the following actions 

to expand the Kabul embassy compound:

• OBO refurbished the existing office building, built in the 

1960s.

• State and USAID acquired hundreds of shipping 

containers for temporary housing and offices.

• OBO constructed new chancery, cafeteria, warehouse, 

and staff apartments. 

• Embassy compressed office areas by putting more 

desks in office facilities to accommodate staffing growth. 

Page 7

Background
Figure 1: Condition Prior to 2009 and 2010 Contracts

Page 8
Objective 1: Summary

• In 2009 and 2010, State awarded two contracts totaling $625.4 

million to meet growing facility requirements.

• Plans called for sequencing construction under the two contracts 

and demolishing some temporary facilities.

• The first contract was partially terminated in 2011; the remaining 

construction requirements were transferred to the other onsite 

contractor.

Page 9
State Awarded Two Contracts Totaling $625.4 Million to 

Meet Growing Facility Requirements

Fiscal Year 2009: Fiscal Year 2010:

Contractor 1 Contractor 2

Awarded Amount: $209.4 million Awarded amount: $416 million

Requirements - design and construction of: Requirements - design and construction of: - office annex A - office annex B - apartment building 1 - apartment buildings 2 and 3 - temporary offices and housing - expand apartment building 4 - utility building - compound access facilities - warehouse addition - perimeter security facilities - compound access facilities - parking facilities - perimeter security facilities - cafeteria and recreation center

Schedule: Schedule:

 180 days (6 months) - for temporary facilities 48 months

 810 days (27 months) - for permanent facilities

Note: Information above is at time of contract award. The contracts were awarded in September 30, 2009, and September 

30, 2010, respectively. Schedules do not start until the contractor has received notice-to-proceed for the design work at 

an appropriate point following contract award. 

Page 10

Objective 1
Page 11

Figure 2: Contractor 1 Planned Construction
Contractor 1 Contract Partially Terminated; Remaining 

Construction Requirements Transferred to Contractor 2

• In September 2011, State partially terminated the Contractor 1 

contract for convenience due to concerns, in part, about 

performance and schedule delays. Additionally, when State and the 

Afghan government did not reach agreement on the transfer of the 

Afghan Ministry of Public Health site, OBO became concerned 

there was insufficient space for two contractors to work oncompound. 

• Contractor 1 completed the temporary offices and housing units 

and did not begin construction of permanent facilities.

• Two weeks after contract termination, requirements for facilities not 

begun by Contractor 1 were transferred to Contractor 2, extending 

its contract completion date from January 2016 to July 2016.

Page 12

Objective 1
Page 13

Figure 3: Contractor 2 Planned Construction
Figure 4: Current Status of Construction

Page 14
Figure 5: Site Upon Completion of All Planned Projects

Page 15
Objective 2: Summary

• Changed construction requirements include larger buildings, 

loss of parking facilities, and new security upgrades. 

• Post-requested staffing increases since 2009 resulted in more 

desks and beds than originally planned.

• Total current cost is $773.9 million; $148.5 million (24 percent) 

over the contract award amounts. 

• OBO had originally planned to complete all projects by summer 

2014; schedule for permanent facilities has been extended to 

summer 2016. 

• Multiple factors have affected construction requirements, cost, 

and schedule.

Page 16
Contract Requirements Have Changed

• December 2009: 

• Two stories added to office annex A due to post’s increased staffing needs.

• September 2011: 

• Parking structures and motor pool facilities for 400 official and staff vehicles 

removed from construction plan because the Afghan government did not agree 

to transfer the Afghan Ministry of Public Health site.

• Reconfiguration of existing office building’s second floor due to post’s 

increased staffing needs.

• March 2012: 

• New security upgrades related to additional temporary housing on adjacent site 

constructed by embassy Kabul under a separate contract. 

• September 2013: 

• New security upgrades to perimeter walls, guard towers, and staff apartments 

due to increased security requirements.

Page 17

Objective 2
Staffing Increases Affected OBO Planning and 

Implementation

• U.S. direct hires in Afghanistan expanded from 320 to 1,119 from 

January 2009 through January 2012. 

• February 2009 - OBO began planning construction requirements 

based on latest rightsizing report.

• April 2009 - Embassy Kabul requested additional staff.

• July 2009 - Embassy Kabul requested further additional staff and 

asked that OBO accommodate new estimates in construction.

• March 2010 - After interagency review, OBO received approval on 

staffing projection revisions from the Bureau of South and Central 

Asian Affairs.

• Revisions increased size of planned facilities within both contracts.

Page 18

Objective 2
Project Contains More Desks and Beds Than 

Originally Planned

• Based on March 2010 approval, over 450 additional desks 

added to project due to post-requested staffing increases.

• OBO’s original construction plan:

• 545 desks in office annex A

• 233 desks in office annex B 

• 778 = Total planned desks to construct

• Current construction: 

• 917 desks in office annex A

• 320 desks in office annex B

• 1,237 = Total desks under construction

• OBO is also building space for 661 beds, about 50 more than 

originally planned. 

Page 19

Objective 2
Table 1: Costs Have Increased by $148.5 Million 

or Nearly 24 Percent

Dollars in millions

Contracts: Fiscal Year 2009 Fiscal Year 2010 Total

 Contractor 1 Contractor 2 2 contracts

Award: $209.4 $416.0 $625.4

Modifications: less ($121.4)a plus $269.9 increase $148.5 

As of May 2014: $ 88.0 $685.9 $773.9b

a Decrease in contract costs is due to the partial termination of this contract for the 

convenience of the U.S government.

b Totals do not reflect State’s $40 million congressional reprogramming request in 2014 to 

cover future additional shipping costs.

Page 20

Objective 2
Figure 6: Schedules Have Been Extended

Page 21

2009 2010 2011 2012 2013 2014 2015 2016

IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II

OBO’s original 

plan

Temporary facilities to be completed by fall 2010.

Office annex A and apartment building 1 to be completed 

by end of summer 2012.

Office annex B and apartment buildings 2 and 3 to be completed by end of 

summer 2014.

Final schedule

Contractor 1

Contractual delivery date for 

temporary facilities mid-summer 

2011; final delivery end of 2011.

Late

Current schedule 

Contractor 2

Contractual delivery date for all elements is July 2016. Office annex A, office 

annex B, and apartment building 1, are projected to be completed before this time 

(see below). 

• Estimated delivery dates for key buildings are: 

• office annex A – October 2014, rather than summer 2012.

• apartment building 1 – July 2015, rather than summer 2012.

• office annex B – November 2015, rather than summer 2014.

• Although not yet reflected in the contract, estimated delivery of apartment 

buildings 2 and 3 is March 2017, rather than summer 2014.

Objective 2

-- Permanent facilities moved to Contractor 2 contract in September 2011.

 Source: GAO analysis of State planning and contract file documents. | GAO-14-661R
Multiple Factors Affected Requirements, Cost, and 

Schedule Throughout the Project

• State-introduced risks during planning: 

• awarding contracts before Afghan Ministry of Public Health site was 

fully acquired,

• aggressive scheduling, 

• tightly sequencing work of two contractors on one site.

• Construction on an occupied compound in a conflict environment. 

• Increases in numbers and changes in composition of embassy staffing 

requirements.

• Design changes and new security requirements.

• Delayed turnover of site areas to contractors.

• Contractor performance delays and transfer of construction 

requirements from one contract to another.

• Delays and changes to shipping routes of building materials due to 

difficulties with shipments transiting through Pakistan.

Page 22

Objective 2
Ongoing Project Issues

• Shipping of building materials – likely to increase contract costs.

• Changes in construction requirements related to changing post needs

• Changing security requirements.

• Unresolved master planning issues regarding post functions and facilities 

on and off compound.

• Design issues 

• Floor-to-floor heights within apartment buildings 2 and 3.

• Temporary housing security upgrades.

• Construction management continuity and contract oversight issues 

• Since 2009, three different project directors and seven different 

construction managers assigned on-site. 

• Loss of OBO project support staff, including safety and quality assurance.

• Concurrent oversight of multiple construction projects not included in the 

2009 and 2010 contracts.

Page 23

Objective 2
Objective 3: Summary 

• Uncertain political and security environment makes it difficult to 

determine whether current projects and existing facilities will 

meet future embassy needs.

• Planned compound after completion is to contain 1,487 desks 

and 819 beds.

• Approximately 600 U.S. direct hires and 1,100 locally employed 

staff projected for Kabul in 2015.

• Planning continues for future embassy facility needs.

Page 24
Difficult to Determine Whether Present 

Construction Will Meet Future Needs

• Long-term construction has been occurring in an unpredictable 

political and security environment characterized by dramatic 

changes in U.S. staff levels. 

• Military drawdown levels announced in May 2014. 

• State decisions to close diplomatic facilities in the field or 

curtail their activities will be linked to security conditions and 

may affect embassy staffing or operations.

• State will decide whether and where to engage support 

contractors to replace life-support services currently 

provided by the military. 

• Composition of U.S. agencies, staffing levels, and embassy 

facility needs subject to change.

Page 25

Objective 3
Compound to Contain 1,487 Desks and 819 

Beds When Projects Are Complete

• Once complete, the permanent facilities are to 

contain:

• 1,487 total desks, in new and older office buildings.

• 819 beds, in new and older apartment buildings.

• Numbers assume demolition of all temporary offices 

and housing.

• Numbers assume reconfiguring offices within existing 

facilities to alleviate overcrowding. 

• State’s long-term objective is to have staff in 

permanent, hardened structures.

Page 26

Objective 3
Planning Continues for Embassy Staffing

• Projected embassy staffing for 2015 is approximately 600 

U.S. direct hires and 1,100 locally employed staff.

• Desk and bed space to be used by U.S. direct hires as 

well as some locally employed and other staff. 

• State is working to identify agency and section desk 

positions for permanent office space. 

• State’s plans for accommodating support contractors 

are in process.

Page 27
Planning Continues for Some Additional 

Facility Needs

• State is conducting a master planning study, due in August 

2014, to address facility needs on-compound unmet by 

current construction, including: 

• Permanent vehicle maintenance facility and parking. 

• Possible modifications to staff apartments built in 2005.

• State is also considering future use of leased offcompound facilities.

Page 28

Objective 3

(320990)
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