a

GAO

United States General Accounting Office

Report to the Chairman, Committee on 

Foreign Relations, U.S. Senate

November 2003 EMBASSY 

CONSTRUCTION

State Department Has 

Implemented 

Management Reforms, 

but Challenges 

Remain

GAO-04-100
OBO in 2001 began instituting organizational and management reforms 

designed to cut costs, put in place standard designs and review processes, 

and reduce the construction period for new embassies and consulates. OBO 

now has mechanisms to more effectively manage the embassy construction 

program, including 

• an annual Long-Range Overseas Buildings Plan to guide the planning 

and execution of the program over a 6-year period; 

• monthly project reviews at headquarters; 

• an Industry Advisory Panel for input on current best practices in the 

construction industry; 

• expanded outreach to contractors in an effort to increase the 

number of bidders; 

• ongoing work to standardize and streamline the planning, design, 

and construction processes, including initiation of design-build 

contract delivery and a standard embassy design for most projects; 

• additional training for OBO headquarters and field staff; and 

• advance identification and acquisition of sites. 

 

State’s program to replace about 185 vulnerable embassies and consulates is 

in its early stages, but the pace of initiating and completing new construction 

projects has increased significantly over the past two fiscal years. As of 

September 30, 2003, State had started construction of 22 projects to replace 

facilities at risk of terrorist or other attacks. Overall, 16 projects have 

encountered challenges that have led or, if not overcome, could ultimately 

lead to extensions in the completion date or cost increases in the 

construction contract. According to OBO, project delays have occurred 

because of such factors as changes in project design and security 

requirements; difficulties hiring appropriate American and local labor with 

the necessary clearances and skills; differing site conditions; and unforeseen 

events such as civil unrest. In addition, the U.S. government has had 

problems coordinating funding for projects that include buildings for the 

U.S. Agency for International Development. None of the projects started 

since OBO instituted its reforms has been completed; thus GAO believes it is 

too early to assess the effectiveness of the reforms in ensuring that new 

embassy and consulate compounds are built within the approved project 

budget and on time. 

Since the 1998 bombings of two 

U.S. embassies in Africa, the State 

Department has done much to 

improve physical security at 

overseas posts. However, most 

overseas diplomatic office facilities 

still do not meet the security 

standards State developed to 

protect these sites from terrorist 

attacks and other dangers. To 

correct this problem, State in 1999 

embarked on an estimated $21 

billion embassy construction 

program. The program’s key 

objective is to provide secure, safe, 

and functional compounds for 

employees overseas—in most 

cases by building replacement 

facilities. In 2001, State’s Bureau of 

Overseas Buildings Operations 

(OBO)—which manages the 

program—began instituting 

reforms in its structure and 

operations to meet the challenges 

of the embassy construction 

program. This report discusses 

(1) OBO’s mechanisms for more 

effectively managing the embassy 

construction program and (2) the 

status of and challenges facing the 

program. 

We received comments from State, 

which said that the report is a fair 

and accurate representation overall 

of the Department’s overseas 

construction process. 

www.gao.gov/cgi-bin/getrpt?GAO-04-100.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Jess Ford at 

(202) 512-4128 or fordj@gao.gov. 

Highlights of GAO-04-100, a report to the 

Chairman, Committee on Foreign 

Relations, U.S. Senate 

November 2003 

EMBASSY CONSTRUCTION 

State Department Has Implemented 

Management Reforms, but Challenges 

Remain 
Page i GAO-04-100 Embassy Construction

Contents

Letter 1

Results in Brief 2

Background 3

OBO Mechanisms to More Effectively Manage the Embassy 

Construction Program 7

Status of and Challenges Facing the Construction Program 15

Conclusion 26

Agency Comments and Our Evaluation 26

Appendixes

Appendix I: Scope and Methodology 28

Appendix II: Information on Embassy Construction Projects’ Contractors 

and Building Size 31

Appendix III: Comments from the Department of State 33

GAO Comments 38

Appendix IV: GAO Contact and Staff Acknowledgments 39

GAO Contact 39

Staff Acknowledgments 39

Tables Table 1: Cost and Schedule Performance of Projects Awarded 

before OBO’s Management Reforms (as of late

July 2003) 18

Table 2: Cost and Schedule Performance of Projects Awarded since 

OBO’s Management Reforms (as of late July 2003) 20

Table 3: List of the 22 Post Replacement Projects Included in This 

Review 29

Table 4: List of Post Replacement Projects Awarded in Late Fiscal 

Year 2003 30

Table 5: List of Contractors for Ongoing Embassy and Consulate 

Replacement Projects 31

Table 6: Size of Embassy Construction Projects Using Standard 

Embassy Design 32

Figures Figure 1: Appropriations for Upgrading and Replacing Diplomatic 

Posts, Fiscal Years 1998-2004 6

Figure 2: Standard Embassy Design 13

Figure 3: Initiated and Completed Projects, Fiscal Years 

1999-2003 16
Contents

Page ii GAO-04-100 Embassy Construction

Figure 4: Status of State’s Program to Replace Embassies and 

Consulates, Fiscal Years 1999-2003 17

Figure 5: Site of Proposed, but Unfunded, USAID Building at the 

U.S. Embassy in Yerevan 25

Abbreviations

OBO Bureau of Overseas Buildings Operations

USAID U.S. Agency for International Development

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Page 1 GAO-04-100 Embassy Construction

United States General Accounting Office

Washington, D.C. 20548

A

November 4, 2003 Letr

The Honorable Richard Lugar

Chairman, Committee on Foreign Relations

United States Senate

Dear Mr. Chairman:

Since the 1998 bombings of two U.S. embassies in Africa,1 the State 

Department has done much to improve physical security at overseas posts, 

such as constructing perimeter walls and anti-ram barriers at many 

facilities. Despite these security upgrades, however, most overseas 

diplomatic office facilities do not meet security standards that State 

developed to protect them from terrorist attacks and other dangers. As a 

result, thousands of American and Foreign Service National U.S. 

government employees may be vulnerable to terrorist attacks. In March 

2003,2

 we testified on these security deficiencies at overseas diplomatic 

facilities, reporting that many facilities are in poor condition, do not meet 

fire and safety standards, and are in need of major maintenance. To correct 

the security shortcomings at existing embassies and consulates, the State 

Department in 1999 embarked on an estimated $21 billion embassy 

construction program, the largest program of its kind in the department’s 

history. The program’s key objective is to provide secure, safe, and 

functional compounds for employees assigned to work at U.S. embassies 

and consulates around the world, in most cases by building replacement 

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

responsible for planning and managing the program. Recognizing the 

challenges of managing State’s expanded overseas construction program, 

OBO in 2001 began to institute organizational and management reforms in 

its structure and operations.

At your request, this report discusses (1) OBO’s mechanisms for more 

effectively managing State’s construction program to replace vulnerable 

embassies and consulates and (2) the status of and challenges facing the 

overall construction program.

1

The 1998 terrorist bombings of the U.S. embassies in Nairobi, Kenya, and Dar Es Salaam, 

Tanzania, killed more than 220 people and injured 4,000. 

2

U.S. General Accounting Office, Overseas Presence: Conditions of Overseas Diplomatic 

Facilities, GAO-03-557T (Washington, D.C.: Mar. 20, 2003).
Page 2 GAO-04-100 Embassy Construction

To address these objectives, we reviewed the report of the Overseas 

Presence Advisory Panel,3

 earlier GAO reports that outlined problems in 

State’s embassy construction program, State’s Long-Range Overseas 

Buildings Plans for the past 3 years, monthly project performance 

documents, contract modifications, and other OBO documents. We also 

interviewed key State Department officials and contractors currently 

working on new embassy construction projects to determine the steps 

OBO has taken to more effectively manage the construction program. 

Further, we visited two field locations—in Sofia, Bulgaria, and Yerevan, 

Armenia—where we observed the level of management and supervision at 

the new embassy construction sites and the contractor’s performance on 

the projects. Appendix I provides more information on our scope and 

methodology. 

Results in Brief OBO in fiscal year 2001 began to institute a number of organizational and 

management reforms in its structure and operations designed to cut costs, 

put in place standard designs and review processes, and reduce the 

construction period for new embassies and consulates. Thus, OBO now has 

a number of mechanisms in place to more effectively manage the expanded 

construction program. These mechanisms include the annual Long-Range 

Overseas Buildings Plan, the first of which was developed in July 2001, 

which guides the planning and execution of its overseas construction 

program over a 6-year period, among other things. OBO in 2001 also 

instituted monthly project reviews at headquarters and in 2002 established 

a panel of industry advisors for input on current best practices in the 

construction industry. In addition, OBO expanded its outreach to 

contractors in an attempt to increase the number of contractors that bid on 

construction projects, has put in place standard designs, and has 

streamlined its project design delivery processes. Furthermore, OBO has 

increased its efforts to train staff in a variety of positions and to acquire 

sites well in advance of planned construction.

3

Secretary of State Albright established the Overseas Presence Advisory Panel following the 

1998 embassy bombings in Africa. Department of State, America’s Overseas Presence in the 

21st Century, The Report of the Overseas Presence Advisory Panel (Washington, D.C.: 

November 1999).
Page 3 GAO-04-100 Embassy Construction

State’s program to replace about 185 vulnerable embassies and consulates 

is in its early stages, but the pace of initiating and completing new 

construction projects has increased significantly over the past three fiscal 

years. From fiscal years 1999 through 2003, State received approximately 

$2.7 billion for the construction program. As of September 30, 2003, State 

had started construction of 22 projects to replace embassies and 

consulates at risk of terrorist or other attacks.4

 Eight of the 22 projects 

were started before OBO began to institute its recent management 

reforms—that is, before fiscal year 2001—and the remaining 14 were 

started since then. Overall, 16 projects—7 that were started before OBO’s 

reforms and 9 that were started after—have encountered challenges that 

have led or, if not overcome, ultimately could lead to extensions to the 

project completion date or cost increases in the construction contract, 

which represents the largest line item in project budgets. According to 

OBO reports, construction projects have been delayed due to such factors 

as changes in project design and security requirements, difficulties hiring 

appropriate American and local labor with the necessary clearances and 

skills, differing site conditions, and unforeseen events such as civil unrest. 

Moreover, the U.S. government has had difficulty in coordinating funding 

for projects that include buildings for the U.S. Agency for International 

Development (USAID), which can result in increased project costs and 

security risks to U.S. government personnel. None of the projects started 

since OBO’s management reforms has been completed; thus, we believe it 

is too early to assess the effectiveness of these reforms in addressing these 

challenges and in ensuring that new embassy and consulate compounds are 

built within the approved project budget and on time.

We received written comments from the Department of State, which we 

have reprinted in appendix III. State said that the report is a fair and 

accurate representation overall of the department’s overseas construction 

process and properly cites all of OBO’s management reforms. 

Background OBO was instituted on May 15, 2001, replacing State’s Office of Foreign 

Buildings Operations. OBO manages the construction of new facilities that 

can satisfy the State Department’s stringent security standards and provide 

U.S. diplomatic personnel secure, safe, and functional office and residential 

environments. Along with the input and support of other State Department 

4

OBO awarded contracts for seven additional projects toward the end of fiscal year 2003. 

These new projects were outside the scope of our review.
Page 4 GAO-04-100 Embassy Construction

bureaus, foreign affairs agencies, and Congress, OBO sets worldwide 

priorities for the design, construction, acquisition, maintenance, use, and 

sale of real properties and the use of sales proceeds. OBO is composed of 

five main offices: Planning and Development, Real Estate and Property 

Management, Project Execution, Operations and Maintenance, and 

Resource Management. The construction program is located primarily in 

the Project Execution Office, specifically in the Construction and 

Commissioning Division within that office.

In response to terrorist threats, the State Department in 1986 began an 

embassy construction program, known as the Inman program, to protect 

U.S. personnel and facilities. In 1991, we reported that State was unable to 

complete as many projects as originally planned due to systemic 

weaknesses in program management, as well as subsequent funding 

limitations.5

 This construction program suffered from delays and cost 

increases due to, among other things, poor program planning, difficulties 

acquiring sites, changes in security requirements, and inadequate 

contractor performance. Following the demise of the Inman program in the 

early 1990s, the State Department initiated very few new construction 

projects until the 1998 embassy bombings in Africa, which prompted 

additional funding for security upgrades and the construction of secure 

embassies and consulates.

5

U.S. General Accounting Office, State Department: Management Weaknesses in the 

Security Construction Program, GAO/NSIAD/92-2 (Washington, D.C.: November 1991).
Page 5 GAO-04-100 Embassy Construction

Through State’s security upgrade program, the department has done much 

since the 1998 bombings to upgrade physical security at existing overseas 

posts without building new embassy or consulate compounds. These 

security upgrades have included constructing perimeter walls, anti-ram 

barriers, and access control facilities at many posts. However, even with 

these improvements, most office facilities do not meet security standards 

that State developed to protect overseas diplomatic office facilities from 

terrorist attacks and other dangers. As of December 2002, the primary 

office building at 232 posts6

 lacked desired security because it did not meet 

one or more of State’s five key security standards7 of (1) 100-foot setback 

between office buildings and uncontrolled areas, (2) perimeter walls and/or 

fencing, (3) anti-ram barriers, (4) blast-resistant construction techniques 

and materials, and (5) controlled access at the perimeter of the compound. 

Only 12 posts had a primary building that met all five standards. As a result, 

thousands of U.S. and foreign national employees may be vulnerable to 

terrorist attacks.8

After the 1998 attacks, State identified facilities at about 185 posts that 

would need to be replaced to meet security standards. OBO plans to 

construct the replacement facilities on embassy and consulate compounds 

that will contain the main office building, all support buildings and, where 

necessary, a building for USAID. While State continues to fund some 

security upgrades at embassies and consulates, it has shifted its resources 

toward those capital projects that would replace existing facilities with 

new, secure diplomatic compounds or substantially retrofit existing, newly 

acquired, or leased buildings. As shown in figure 1, funding for State’s 

capital projects has significantly increased since fiscal year 1998. State 

received about $2.7 billion for its new construction program from fiscal 

year 1999 through fiscal year 2003 and requested $890 million for fiscal year 

2004. OBO in June 2003 estimated that beginning in fiscal year 2005 it 

would cost about $17.5 billion to replace the remaining vulnerable posts.

6

The United States maintains more than 250 diplomatic posts—embassies, consulates, and 

other diplomatic missions—around the world. More than 60,000 U.S. and Foreign Service 

National personnel work at these locations. About 50 government agencies and subagencies 

operate overseas, including the Departments of State, Defense, and Justice; and USAID. 

7

These standards apply to the construction of new buildings. Existing buildings are required 

to meet the setback standard to the “maximum extent feasible.” 

8

GAO-03-557T.
Page 6 GAO-04-100 Embassy Construction

Figure 1: Appropriations for Upgrading and Replacing Diplomatic Posts, Fiscal 

Years 1998-2004

Note: Fiscal year 2002 includes $200.5 million in emergency spending provided by the 2002 

Supplemental Appropriations Act for Further Recovery From and Response to Terrorist Attacks on the 

United States (Pub. L. No. 107-206).

As of September 30, 2003, State had started construction of 22 projects to 

replace embassies and consulates that are at risk of terrorist or other 

attacks. Toward the end of fiscal year 2003, State awarded contracts for an 

additional 7 projects. The timeline for funding and completing the 

remaining projects depends on the amount of funding State receives 

annually for the construction program. At the proposed fiscal year 2004 

rate of funding, it will take more than 20 years to fully fund and build 

replacement facilities.9

9

GAO-03-557T.
Page 7 GAO-04-100 Embassy Construction

OBO Mechanisms to 

More Effectively 

Manage the Embassy 

Construction Program 

Recognizing past problems managing State’s overseas construction 

program, OBO in 2001 began to institute organizational and management 

reforms in its structure and operations. OBO intended that these reforms—

which are designed to cut costs, put in place standard designs and review 

processes, and reduce the construction period for new embassies and 

consulates—would bring rational and efficient management to OBO by 

using a results-based approach to program management. 

OBO has instituted the following seven key mechanisms over the past 3 

years to better manage its expanded embassy construction program: 

• the Long-Range Overseas Buildings Plan,10 which prioritizes and 

summarizes capital projects over 6 years; 

• monthly project reviews at headquarters, where senior management 

officials review ongoing projects to identify and resolve current or 

potential issues at all stages of the project; 

• an Industry Advisory Panel, which advises OBO on industry best 

practices in the construction sector; 

• efforts to broaden the contractor pool through events such as Industry 

Day, where interested contractors are invited to learn about OBO’s 

construction program;

• ongoing work to standardize and streamline the planning, design, and 

construction processes, including the initiation of design-build contract 

delivery and a standard embassy design for most projects; 

• additional training for OBO headquarters and field staff; and 

• advance identification and acquisition of sites.

10See Bureau of Overseas Buildings Operations, U.S. Department of State, Long-Range 

Overseas Buildings Plan: FY 2003-FY 2008 (Washington, D.C.: March 2003) for the latest 

version of the plan.
Page 8 GAO-04-100 Embassy Construction

Development of the LongRange Overseas Buildings 

Plan

To help manage State’s expanding large-scale construction program, OBO 

developed the Long-Range Overseas Buildings Plan, first published in July 

2001 and most recently updated in March 2003. The latest version of the 

plan prioritizes proposed capital projects over 6 years, from fiscal years 

2003 through 2008, based on input from State’s Bureau of Diplomatic 

Security, regional bureaus, and agencies with overseas presence. It 

describes and provides a justification for the foreign affairs community’s 

global and regional capital project requirements. According to OBO, it also 

provides the basis for proceeding in a logical and focused fashion to 

improve the security, safety, and functionality of facilities overseas. Each 

year the plan is updated to capture changes resulting from budget actions 

and requirements of posts overseas. According to the latest version of the 

plan, State plans to start replacing facilities at 75 vulnerable posts from 

fiscal year 2003 to fiscal year 2008 at an estimated cost of $7.4 billion.

As described in the March 2003 plan and by OBO officials, State followed a 

multistep process in developing its phased site acquisition, design, and 

construction schedule for its security capital projects: 

• The Bureau of Diplomatic Security completed its annual security 

evaluation of all the U.S. overseas posts, taking into account many 

factors affecting a post’s overall security level. The evaluation listed 

vulnerable posts and ranked them in terms of security issues. Because 

the terrorist threat is global and because the buildings have fundamental 

security problems, Diplomatic Security and OBO officials believe that 

there are a great many posts that are very vulnerable and in need of 

replacement, and that the differences in vulnerability do not make posts 

at the lower end of the list substantially safer than those at the top of the 

list. By congressional mandate,11 these posts are listed and ranked in 

bands of 20, through a process discussed in the following paragraphs.12

11Pub. L. No. 106-113, div. B, Sec. 1000(a)(7) (div. A, title VI, Sec. 605) codified as a note to 22 

U.S.C. 4865.

12This replacement list is updated annually. According to OBO officials, posts that have 

received full funding and have begun construction on their new facilities are removed from 

the list each year and moved to a “funded/under construction/completed” column for record 

purposes. Senior State Department management, considering the Diplomatic Security 

vulnerability list and such factors as the number of U.S. government employees at a post, 

nominates new posts to move into the top 80 replacement list. These nominations are 

forwarded to the Under Secretary for Management and the Secretary for their approval and 

inclusion in the replacement list. This list is then provided to Congress.
Page 9 GAO-04-100 Embassy Construction

Congress directed that State spend its security capital funds, which are 

funded within the Embassy Security, Construction and Maintenance 

account, on the top 80 posts only. 

• Working with the security-prioritized list, each regional bureau annually 

ranked all posts within its region that were in the top 80 replacement list 

based on such factors as threat, survivability, staffing trends, regional 

interests, and functionality. OBO officials told us this effort resulted in a 

prioritized list for State’s security capital projects for each of the six 

regional bureaus, which responds to the global nature of the 

transnational terrorism threat. Each year, as new posts are added, these 

posts usually go to the end of a bureau’s priority list.

• Finally, OBO combined the prioritized lists from the different regions 

into one master list, which, as mentioned above, OBO updates annually. 

The first six posts on the list were the top ranked post from each region. 

Posts 7 through 12 on the list were the second-ranked posts from each 

region, and so on. With the help of its Planning and Real Estate Offices, 

OBO then determined if a site already existed to build a new facility and, 

if not, when new sites could actually be acquired. When necessary, OBO 

rescheduled the list based on the likely available capital security funding 

in each year covered in the Long-Range Overseas Buildings Plan, 

opportunities or problems in acquiring a site, and constraints on the 

ability of construction companies to work in a particular country at the 

planned time. This prioritized and scheduled listing of projects then 

becomes the security capital portion of the Long-Range Overseas 

Buildings Plan.

State also requests funds for regular capital projects to replace posts not in 

the top 80 that have compelling operational or other requirements that 

must be addressed. The Long-Range Overseas Buildings Plan includes 

descriptions of these regular capital projects. 

OBO’s development of the plan was a major advancement in ensuring the 

embassy construction program would be better managed.13 According to 

the OBO director, while the current plan is not a budget document, it is an 

13In January 2001, we recommended that OBO develop such a plan because it was an 

industry best practice that has helped leading organizations establish project priorities, plan 

for resource use, control costs, and provide decision makers a rationale for allocating 

funding. Several months later, OBO’s new management accepted this recommendation and 

agreed that it is an important tool for the budget process.
Page 10 GAO-04-100 Embassy Construction

important tool that provides information for the budget decision-making 

process. It presents OBO’s best understanding of the U.S. government’s 

most urgent diplomatic and consular facility requirements through 2008 

and provides all stakeholders, especially other U.S. government agencies 

that rely on State for their overseas facilities, a road map of where the 

department is headed. 

Monthly Project Reviews at 

Headquarters 

As part of OBO’s ongoing efforts to improve accountability and 

performance, OBO in June 2001 began holding monthly project 

performance reviews at headquarters for senior OBO officials and project 

executives. At these meetings, senior managers convene to discuss 

developments in their areas of responsibility and their plan of action to 

address current or potential issues. According to OBO documents and our 

observations of five monthly meetings, the monthly project performance 

reviews covered the following topics:

• real estate and property management, including acquisitions and 

disposals and evaluations;

• project planning and development, including project evaluation and 

analysis;

• project execution, including the status of both construction projects by 

region and security upgrade projects; interiors and furnishings; design 

and engineering issues, such as design management, standard embassy 

designs, value engineering, and energy and seismic concerns; and 

security management of ongoing projects;

• information management, including issues related to information 

technology; and

• other management concerns, including management support, human 

resources and financial management, and operations and maintenance.

At these monthly meetings, senior OBO staff present information on 

internal and external operations. For instance, in reviewing internal 

operations, the Project Execution Office presents information about 

personnel vacancies, number of training events attended per month, 

performance indicators, and travel budget. The Project Execution Office’s 

Construction and Commissioning Division reports on construction-related 

issues, including the number of outstanding claims, contract modifications, 
Page 11 GAO-04-100 Embassy Construction

and the status of each construction project. For each construction project, 

the division notes the completion of major milestones, such as 

congressional notification, site acquisition, contract award, and notice to 

proceed. It also assigns a color-coded rating—green, yellow, or red—to 

each project. This rating reflects the project executives’ assessment of 

current or future issues that could affect either the project’s cost or 

scheduled completion date, with green indicating the project is generally 

on track and red indicating a major issue. 

Establishment of the 

Industry Advisory Panel 

In February 2002, OBO held the first quarterly meeting of the Industry 

Advisory Panel, whose function is to keep OBO apprised of the private 

sector’s best practices in the construction and maintenance of facilities. 

The panel consists of volunteer industry representatives who meet 

quarterly to discuss issues related to OBO’s construction program and 

advise OBO management on the industry’s views on the most efficient 

processes, optimal solutions, and best new technologies. OBO prepares 

new topics of discussion for each meeting, and the experts respond based 

on their experience dealing with similar issues. 

At the meeting held on May 20, 2003, we observed that the panel and senior 

OBO officials discussed the following: 

• how to more effectively apply Value Engineering—a method that looks 

for the best value to the government at each phase of the design process,

• to what extent private U.S. companies build to U.S. standards overseas 

and how much they rely on local materials and equipment,

• the best approach for estimating project costs and budgets, and 

• criteria used to determine if direct-hire staff should fill an organization’s 

gap in required skills or specialized contractors.

OBO takes minutes of each Industry Advisory Panel meeting and posts 

them on its Web site where they are available to the public. According to 

OBO officials, the panel has been very active in providing invaluable 

strategic industry insights into a variety of issues. They touch upon the 

latest innovations in the commercial world combining best practices, 

streamlined processes, and proven cost-effective methods. According to a 

recent General Services Administration survey of about 470 federal 
Page 12 GAO-04-100 Embassy Construction

advisory groups, OBO's Industry Advisory Panel demonstrated superior 

results on the “people,” “process,” and “outcome” indices of the survey. 

Efforts to Broaden 

Contractor Pool 

OBO has expanded its efforts to increase competition for bids on its new 

embassy and consulate compound projects through outreach to potential 

contractors. For example, OBO has held two annual Industry Days where 

interested parties can attend presentations and information sessions about 

doing business with OBO. According to OBO, Industry Day 2002 attracted 

more than 350 representatives, with slightly more than half from small 

firms. Industry Day 2003 had about 450 participants. As a result of these 

efforts, OBO has increased the number of contractors prequalified to bid 

on OBO contracts from 5 to 14.14 OBO believes that increasing the number 

of prequalified contractors will likely increase the number of bids on a 

project—thus allowing OBO to select the best value for its money—and 

will be important to the expanding construction program. 

Standardizing and 

Streamlining the Design 

Process 

OBO has initiated two major efforts to standardize and streamline the 

design process for new embassy and consulate compounds. First, it 

developed a standard embassy design for three different sizes of 

compounds, with a standard design for a small, medium, or large main 

office building (see fig. 2). For each project, the contractor adapts the 

standard design to meet site- and post-specific requirements. OBO believes 

that standard designs will give it the ability to contract for shortened design 

and construction periods, control costs through standardization, and assist 

with State’s initiative to rightsize its overseas posts. 

14On September 25, 2003, the contractor for 7 of the 22 ongoing embassy and consulate 

construction projects declared bankruptcy. OBO and contractor officials told us that the 

bankruptcy has had and will have no effect on the contractor’s ability to complete the 

projects. 
Page 13 GAO-04-100 Embassy Construction

Figure 2: Standard Embassy Design

Second, OBO uses design-build as a contract delivery method, instead of 

design-bid-build, for most of its new projects. According to the latest LongRange Overseas Buildings Plan, OBO plans to award design-build contracts 

for 56 compound projects between fiscal years 2003 and 2008. State’s 

design-build process saves time by (1) avoiding the time needed to award 

separate design and construction contracts and (2) allowing construction 

to proceed before design is completed. Under this process, a compound 
Page 14 GAO-04-100 Embassy Construction

could be one-third of the way through construction before the final design 

is completed. In Sofia, Bulgaria, for instance, the project was 30 percent 

complete before the contractor delivered the final design package. To 

minimize any cost and schedule risks associated with design-build 

contracts, building requirements must be fully and precisely identified 

early in the process.

Training According to OBO officials, OBO has instituted additional training 

requirements for all OBO staff involved in the contracting process and for 

all field staff. To enhance their knowledge of contracting, headquarters and 

field staff take courses in areas such as acquisition procedures, principles 

of contract pricing, and government contract law. Staff can take classes 

offered by the Defense Acquisition University and other private institutions 

to meet their training requirements. Staff in the Construction and 

Commissioning Division enroll in additional courses that enhance their 

skills in such areas as computerized project planning, leadership and 

management, cost control, language training, and security and safety. 

These courses are designed to increase their effectiveness as project 

supervisors.

During our visits to two new embassy construction sites in Sofia, Bulgaria, 

and Yerevan, Armenia, we observed that the OBO project directors and the 

contract project managers closely managed and supervised the projects. 

Project directors maintained oversight with the help of experienced and 

knowledgeable American and Foreign Service National staff. Project 

directors made daily visits to the construction site to observe worker 

performance and held weekly progress meetings with OBO and contractor 

staff. During the weekly meetings, OBO staff asked about the activity 

schedule, identified potential problems, and came to a consensus on 

solutions. 

We observed the OBO project management team in Sofia, which consists of 

seven engineers and assistants, interacting closely with the contractor staff 

to identify possible delays and oversee construction. For instance, the 

project director questioned the pace at which the contractor was laying 

concrete slab on one of the floors. The project director was able to 

convince the contractor to pour concrete slab on one of the floors a day or 

two ahead of schedule. 
Page 15 GAO-04-100 Embassy Construction

Site Acquisition To address potential issues in site acquisition, OBO has used its LongRange Overseas Buildings Plan to guide its contingency planning and give it 

the flexibility to continue the overall program if an individual site is not 

available in the planned year. Rather than hold up the appropriated funds 

for a given project, State will, with congressional support, shift funding to 

another project where a site is available. For example, OBO deferred the 

planned compound in Asmara, Eritrea, from fiscal year 2004 to fiscal year 

2005 due to difficulties obtaining a site. The new embassy compound in 

Lome, Togo, which had been planned for fiscal year 2004, took the place of 

Asmara. For projects planned for construction from fiscal years 2005 

through 2007, State has a supply of seven U.S. government-owned sites and 

five sites under contract in its regular and security capital programs. These 

12 sites will offer some flexibility to State as it moves forward with its 

Long-Range Overseas Buildings Plan. OBO officials told us that they plan to 

continue acquiring sites ahead of time to provide the program with this 

type of scheduling flexibility over the foreseeable future. 

These management initiatives show promise for improving the cost and 

schedule performance of embassy and consulate construction projects. 

However, as discussed in the following section, it is still too early in the 

new program’s implementation to assess their effectiveness in achieving 

these goals. 

Status of and 

Challenges Facing the 

Construction Program 

As of September 30, 2003, State had started construction of 22 projects to 

replace embassies and consulates at risk of terrorist or other attacks. Eight 

of the 22 projects were started before OBO began to institute its recent 

management reforms, and the remaining 14 were started since then. None 

of the projects started after the reforms were implemented has yet been 

completed; only one is more than 50 percent complete. Over half of the 22 

projects have faced challenges that have led or, if not overcome, could lead 

to extensions to or cost increases in the construction contract. OBO 

reports attribute project delays to such factors as changes in project design 

and security requirements, difficulties hiring appropriate labor, differing 

site conditions, and civil unrest. The U.S. government also has had 

difficulty coordinating funding for projects that include buildings for 

USAID, which could lead to increased costs and security risks.

From fiscal years 1999 through 2003, State received approximately $2.7 

billion for its new embassy construction program. As of September 30, 

2003, State was still in the initial phase of the overall program, having 
Page 16 GAO-04-100 Embassy Construction

awarded the contracts for 11 of its 22 projects in fiscal year 2002. In 

addition, the contracts for another 7 projects were awarded in late fiscal 

year 2003 (see figs. 3 and 4). Of the seven completed projects, six were new 

embassy compounds and one was a newly acquired building that was 

retrofitted to meet the required security standards.

Figure 3: Initiated and Completed Projects, Fiscal Years 1999-2003

 Note: The contracts for seven new projects were awarded in the last quarter of fiscal year 2003. 
Page 17 GAO-04-100 Embassy Construction

Figure 4: Status of State’s Program to Replace Embassies and Consulates, Fiscal 

Years 1999-2003

Note: For each fiscal year, ongoing projects equals ongoing projects from the prior fiscal year plus 

new starts minus completed projects.

Status of Projects Awarded 

before OBO Instituted 

Management Reforms

As shown in table 1, seven of the eight projects that started before OBO’s 

management reforms were implemented have been completed. All eight 

projects experienced cost increases in the construction contract, which 

typically accounts for 60 to 70 percent of the total project budget; however, 

none of the seven completed projects exceeded its approved budget, and 

the budget for one was lower than originally planned. 
Page 18 GAO-04-100 Embassy Construction

In addition, six projects were extended 30 days or more beyond the project 

completion date. The primary reasons for the delays included contract 

modifications and security-related disruptions. 

Table 1: Cost and Schedule Performance of Projects Awarded before OBO’s Management Reforms (as of late July 2003) 

Source: GAO analysis of OBO data as of September 2003.

Note: This table includes projects whose contracts were awarded from fiscal years 1999 through 

2001.

a

Completed project.

b

Ongoing project.

c

This number represents contract modification days as this project had not yet been completed.

OBO has attempted to manage project resources and keep its projects 

within their approved budgets by using funds from the projects’ 

contingency line items or, in some cases, a management reserve line item. 

The use of contingency and management reserve line items is an industry 

practice. In Istanbul, for instance, the cost of the construction contract 

increased by about $8.5 million. OBO covered this cost increase by using 

funds from the project’s contingency line item, which OBO includes in 

project budgets for this purpose. In some cases where OBO has awarded 

contracts at a much lower value than the original independent government 

estimate, it has established a management reserve to hold these extra funds 

to insure against potential cost increases later in the construction. The 

Region/location

Number of days

over original

end date Primary reason for delay

Percentage over 

original contract 

value

Change from original 

project budget

Africa

Dar Es Salaam, Tanzaniaa 2 Delay not significant 9 8% under budget

Kampala, Ugandaa 90 Contractor dispute 29 On budget

Nairobi, Kenyaa 80 Contract modifications 12 On budget

Europe

Istanbul, Turkeya 74 Mitigation of security problem 28 On budget

Zagreb, Croatiaa 1 Delay not significant 18 On budget

Near East

Abu Dhabi, United Arab 

Emiratesb

154c Material delivery did not arrive 

as scheduled; contractor 

reported differing soil conditions

11 10% under budget

Doha, Qatara 30 Security threat 41 On budget

Tunis, Tunisiaa 127 Change in project scope 20 On budget
Page 19 GAO-04-100 Embassy Construction

OBO director must approve the use of funds for that project from the 

management reserve. We did not review how OBO established its project 

budgets, how it determined the contingency and management reserve line 

item amounts, or how it used the funds from those line items. 

Further, OBO has also reevaluated its budget plans for ongoing and 

planned projects and has identified significant savings to be applied either 

to a project whose contract bid had come in above the approved budget or 

to new projects. For example, in the March 2003 project performance 

review, OBO identified anticipated savings of about $63.6 million for six 

projects. OBO used these funds to sign a contract for a new construction 

project in Freetown, Sierra Leone, during fiscal year 2003. In the fiscal year 

2002 appropriations conference report, Congress commended State for 

identifying such budget savings and urged the department to use them to 

significantly exceed the level of activity described in the budget request. 

OBO officials told us that the amount of such savings would decrease over 

time as the bureau improves its cost estimates.

Status of and Challenges 

Encountered by Projects 

Awarded since OBO 

Instituted Management 

Reforms

From fiscal year 2001, when OBO began to institute its management 

reforms, through the end of fiscal year 2003, State had started construction 

of 14 projects to replace vulnerable embassies and consulates.15 As shown 

in table 2, as of July 2003, OBO expected 13 of these 14 projects to come in 

at or under their approved budgets and 1 project—Conakry, Guinea---to 

come in 6 percent over the approved budget. Six of these projects have had 

increases in their construction contract costs ranging from 2 percent to 11 

percent above their original contract value. In addition, the project in Sao 

Paulo, Brazil, added 48 contract modification days to its original project 

completion date. This project, a major renovation initiated at the end of 

August 2002, missed its scheduled completion date of August 28, 2003, and 

was completed on October 15, 2003. Table 2 provides more information on 

challenges that have affected or may affect the cost and schedule of the 

projects that were initiated after OBO made reforms to its management 

practices.

15Toward the end of fiscal year 2003, State awarded contracts for an additional 7 projects.
Page 20 GAO-04-100 Embassy Construction

Table 2: Cost and Schedule Performance of Projects Awarded since OBO’s Management Reforms (as of late July 2003)

Location

Percentage 

complete

Percentage over 

contract value

Change from 

original project 

budget

Number of 

contract 

modification days

Project challenges 

identified by OBO

Sao Paulo, Brazil 60 (2) On budget 48 Contractor delays in 

procuring materials and 

labor

Abidjan, Cote D’Ivoire 33 0 2% under budget 0 Ordered departure of 

personnel caused by the 

political situation will have 

an impact on cost and 

schedule

Sofia, Bulgaria 31 3 19% under budget 0 None reported

Yerevan, Armenia 31 2 4% under budget 0 USAID building unfunded

Luanda, Angola 27 5 On budget 14 Design revisions for 

mitigation of security 

concerns include a cost 

increase and time 

extension

Abuja, Nigeria 23 0 On budget 0 Contractor has claimed that 

rock excavation due to 

differing site conditions will 

have an impact on 

schedule. OBO is 

evaluating 

USAID building unfunded

Cape Town, South 

Africa

15 0 28% under budget 0 None reported

Conakry, Guinea 15 2 6% over budget 0 Contract will need 

additional time and will cost 

more due to the design and 

construction of a new type 

of foundation because of 

site conditions that differ 

from those originally 

anticipated 

USAID building unfunded

Dushanbe, Tajikistan 14 2 3% under budget 0 None reported

Yaounde, Cameroon 14 0 9% under budget 0 Contractor claims differing 

soil conditions will affect 

the soil’s capacity for a 

foundation

Tbilisi, Georgia 13 0 12% under budget 0 USAID building unfunded

Kabul, Afghanistan 11 0 On budget 0 None reported
Page 21 GAO-04-100 Embassy Construction

Sources: GAO analysis of July 2003 Project Performance Review data, OBO officials.

Note: This table includes projects whose contracts were awarded in fiscal year 2001 or 2002. All 14 

projects are using a design-build contract delivery method. Six projects that began in fiscal year 2002 

employ a standard embassy design.

Integrating All Requirements 

Early in the Design Process

Once a contract has been awarded, any subsequent changes to the design 

of the building are likely to have cost and schedule implications. In State’s 

design-build process, design and construction sometimes occur 

simultaneously. Any changes to the design can require changes in the 

construction schedule. 

A key component of the planning process for new embassy construction 

projects is the development of staffing projections. Staffing projections 

present the number of staff likely to work in the facility and the type of 

work they will perform. These are the two primary drivers of the size and 

cost of new facilities. Changes to staffing projections after Congress has 

appropriated money for a construction project may result in redesign and 

could lead to lengthy delays and additional costs, according to an OBO 

official. There is little room for flexibility after the budget is submitted 

given budgetary and construction time frames.

Officials from Diplomatic Security, the State Department bureau that 

initiates changes for security reasons, make every effort to have security 

requirements finalized before a contract is awarded, but changes in 

technologies or new analyses sometimes make design modifications 

necessary. Although the bureau does not insist that previously awarded 

contracts be modified to reflect these kinds of changes, OBO makes a 

decision about what is most prudent for security reasons in determining 

whether to modify the contract.

At both embassy construction projects that we visited, State added security 

or other requirements that increased costs and led to an extension in the 

contract completion date. At the U.S. embassy in Sofia, State added 

security requirements late in the design phase that increased the cost of the 

Phnom Penh, 

Cambodia

11 0 12% under budget 0 Diplomatic Security 

certification is holding up 

construction 

USAID building unfunded

Tashkent, Uzbekistan 11 0 18% under budget 0 None reported

(Continued From Previous Page)

Location

Percentage 

complete

Percentage over 

contract value

Change from 

original project 

budget

Number of 

contract 

modification days

Project challenges 

identified by OBO
Page 22 GAO-04-100 Embassy Construction

$50 million project by about $2 million and led to a 2-month extension to 

the original contract completion date. As in Sofia, Yerevan has had to adapt 

recent security modifications to include, among others, the addition of a 

generator and changes to the mail screening room. 

Finding Appropriate U.S. and 

Local Labor

Contractors on at least two projects have had difficulty finding appropriate 

workers at the right time. For example, one project—a major retrofit of 

existing buildings in Sao Paulo, Brazil—was completed in about 14 months 

rather than 12 months due in part to a lack of skilled labor. In March 2003, 

OBO reported delays in executing this project because the contractor had 

not yet hired critical craftsmen, particularly U.S. and Brazilian certified 

welders. At the project we visited in Yerevan, which OBO considers to be 

on track, the contractor had not hired enough local laborers because of a 

shortage of qualified construction workers in Armenia. OBO officials said 

that the contractor hired skilled workers from neighboring countries and 

made up the lost time on the project. 

In addition, each project requires U.S. supervisors and laborers with 

security clearances to work in certain areas. However, contractor 

representatives told us that as State’s overall construction program 

accelerates and the demand for U.S. workers with security clearances 

escalates, this form of labor could command a premium. Some contractor 

officials stated that there could be a shortage of these workers in the near 

term, which could result in delays that could potentially affect the duration 

and cost of the overall program. Others said the workers will be available 

but will demand a higher price for their labor, which would increase 

contract costs. 

Differing Site Conditions In four ongoing projects16 where OBO had raised concerns about the 

projects’ progress, contractors had reported site conditions that differed 

from what they had originally anticipated. According to OBO documents, 

this difference could affect the projects’ cost or schedule because it could 

require the contractor to construct a different type of foundation for the 

buildings. At the construction site we visited in Yerevan, a project OBO 

considered on track as of July 2003, the contractor determined that it had 

not thoroughly analyzed the soil conditions at the site and would need to 

blast away about 9 feet of rock from the site to make room for the 

16Abuja, Nigeria; Conakry, Guinea; Yaounde, Cameroon; and Abu Dhabi, United Arab 

Emirates.
Page 23 GAO-04-100 Embassy Construction

foundation. This blasting process caused about a 6-week delay, time that 

the contractor made up as the project progressed. 

Political and Civil Unrest or 

Other Unforeseen Events

Many ongoing and planned projects are located in developing countries 

with the potential for political and civil unrest and thus pose unpredictable 

challenges to State in its embassy construction work. For example, civil 

unrest delayed the start of the project in Abidjan, Cote D’Ivoire, in 2002, 

leading to delays in the project schedule and potential cost increases. 

Further, political upheaval in Zimbabwe forced OBO to postpone 

construction of the new embassy in Harare from fiscal year 2002 until at 

least fiscal year 2005, according to OBO’s most recent Long-Range 

Overseas Buildings Plan. On the other hand, State decided to replace the 

embassy in Kabul, Afghanistan, and brought the construction project to the 

front of the 2002 schedule following the U.S. and allied military action there 

that responded to the September 11 terrorist attacks.17

Site Acquisition Although OBO has developed a flexible approach to deal with problems in 

acquiring sites for new embassy compounds, the issue of site acquisition 

could become more important as OBO increases the number of projects it 

undertakes each year. In the short term, the shifting of projects across 

fiscal years, as discussed earlier, keeps the overall program on track; 

however, in the long term, the number of difficult site acquisitions per year 

may increase. If the less complicated site acquisitions continue to be pulled 

to the front of the line, and more complicated ones pushed back, State may 

have increasing difficulty obtaining sites for its annual program. 

Coordinating Funding for 

Construction of Compounds 

with USAID Buildings

As mentioned earlier in this report, OBO attempts to build embassy and 

consulate compounds that contain the main office building, all support 

buildings, and, where necessary, a building for USAID. In several cases, 

however, OBO has started to build compounds without the proposed 

USAID building because funding for the USAID building was not available.

17The U.S. embassy in Kabul, which had been closed in January 1989 for security reasons, 

officially reopened as an embassy on January 17, 2002.
Page 24 GAO-04-100 Embassy Construction

In compounds where USAID is likely to require desk space for more than 

50 employees, USAID and OBO informally agreed that USAID would secure 

funding in its appropriations for a separate building on the compound.18 If 

USAID does not secure funding for its building at the same time as the new 

embassy compound, the compound is constructed as scheduled, but the 

USAID building may be built either after the rest of the compound, later in 

the construction process, or not at all. If a USAID building is constructed 

after the rest of the compound, the overall costs to the government would 

likely be higher because the contractor must remobilize the construction 

staff. The delay could also pose a security risk and inconvenience to post 

operations, as construction personnel and equipment would be coming into 

and out of the site on a regular basis. OBO officials told us that five projects 

were awaiting funding for the construction of the proposed USAID building 

on the compounds. 

At the U.S. embassy in Yerevan, funding for the compound’s USAID 

building was not available when the compound construction contract was 

awarded. Therefore, USAID staff will not move to the new site concurrent 

with the rest of the embassy’s staff. Rather, USAID may be forced to remain 

at the current, insecure facility at an additional cost until completion of its 

annex unless alternative arrangements can be made. The Ambassador told 

us that USAID was one of the most important missions at the embassy and 

that not having it colocated on the compound would create a major 

inconvenience to the embassy’s operations and decrease mission 

effectiveness. Figure 5 shows the central location of the proposed USAID 

building within the new U.S. embassy compound in Yerevan.

18U.S. General Accounting Office, Embassy Construction: Process for Determining 

Staffing Requirements Needs Improvement, GAO-03-411 (Washington, D.C.: April 2003).
Page 25 GAO-04-100 Embassy Construction

Figure 5: Site of Proposed, but Unfunded, USAID Building at the U.S. Embassy in Yerevan

As of September 2003, one completed project and five ongoing 

construction projects—including Yerevan—had to delay or postpone 

building the USAID annex due to a lack of USAID funding at the start of 

construction for the rest of the compound. Other locations included the 

recently completed project at Nairobi, Kenya; as well as the ongoing 

projects in Tbilisi, Georgia; Conakry, Guinea; Abuja, Nigeria; and Phnom 

Penh, Cambodia. In addition, according to an OBO official, two projects 

that will receive security capital funding this year—Bamako, Mali, and 

Kingston, Jamaica—may not have funding for the planned USAID buildings 

at the time of construction, although funding may become available 

sometime during construction. 

The U.S. government has had mixed success in dealing with this problem of 

coordinating funding. For example, for the new compound in Nairobi—the 
Page 26 GAO-04-100 Embassy Construction

location of one of the 1998 embassy bombings—State awarded a 

construction contract for the USAID building in September 2003, 7 months 

after the rest of the compound had been completed. In another case, Dar Es 

Salaam, funding became available in time for OBO to modify the 

construction contract and complete the USAID building at the same time as 

the rest of the compound. 

We plan to do additional work in the near future on the issue of 

coordinating USAID funding with funding for new embassy and consulate 

compounds. 

Conclusion Providing secure and safe office facilities at U.S. embassies and consulates 

is a critical task that will require sustained funding and management 

attention over many years. To sustain support for this program, the State 

Department must demonstrate that it is exerting effective management, 

resulting in projects that are on time and within approved budgets. We 

believe that State has put in place a number of mechanisms that together 

represent a positive management approach with the potential to achieve 

favorable program results. However, it is too early to assess whether these 

new mechanisms will ensure that State can consistently achieve cost and 

schedule targets on individual construction projects over the course of the 

program. 

Agency Comments and 

Our Evaluation

The Department of State provided written comments on a draft of this 

report (see app. III). In the comments, State said that the report is a fair and 

accurate representation overall of the department’s overseas construction 

process and provided additional information on (1) how State prioritizes 

and plans for its construction projects, (2) the problems in funding USAID 

building projects, and (3) other capital construction projects being 

implemented by OBO. We revised the text of the report to include 

information on how Diplomatic Security and OBO view the relative 

vulnerability of facilities at overseas posts. State also provided technical 

comments, which we incorporated in the report where appropriate. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 10 days from the 

report date. At that time, we will send copies of this report to other 

interested members of Congress. We will also provide copies of this report 
Page 27 GAO-04-100 Embassy Construction

to the Secretary of State and the Director of the Office of Management and 

Budget. We also will make copies available to others upon request. In 

addition, the report will be available at no charge on the GAO Web site at 

http://www. gao.gov.

If you or your staff has any questions about this report, please call me at 

(202) 512-4128. Another contact and staff acknowledgments are listed in 

appendix IV.

Sincerely yours,

Jess T. Ford, Director

International Affairs and Trade
Page 28 GAO-04-100 Embassy Construction

Appendix I

Scope and Methodology AAppenednxidexiIs

To determine whether the Bureau of Overseas Buildings Operations (OBO) 

has mechanisms in place to more effectively manage State’s construction 

program to replace vulnerable embassies and consulates, we (1) reviewed 

the report of the Overseas Presence Advisory Panel and earlier GAO 

reports that outlined problems in embassy security and State’s embassy 

construction program and (2) interviewed OBO and contractor officials 

about specific steps OBO has taken to improve program management, 

including the usefulness of and rationale behind both the standard embassy 

design for new embassy and consulate compounds and the design-build 

contract delivery method. We also attended quarterly meetings of the 

Industry Advisory Panel where industry representatives provided advice 

and information on industry best practices to senior OBO management 

officials, as well as monthly project performance reviews where senior 

OBO officials addressed issues related to embassy construction projects. 

Further, we visited two field locations—in Sofia, Bulgaria, and Yerevan, 

Armenia—where we observed the level of management and supervision at 

the new embassy construction sites and the contractor’s performance on 

the projects.

To determine the status of the overall construction program, as well as its 

current and potential challenges, we reviewed capital projects—whether a 

completely new embassy or consulate compound, a new building, or a 

major retrofit of an existing building—that would bring the post up to 

current security standards. Table 3 provides the list of projects included in 

this review: 7 completed projects and 15 ongoing projects whose contracts 

were awarded from fiscal years 1999 through 2002. We excluded the Dili, 

East Timor, project from the scope of our review because it was an interim 

office building. 
Appendix I

Scope and Methodology

Page 29 GAO-04-100 Embassy Construction

Table 3: List of the 22 Post Replacement Projects Included in This Review

Source: OBO.

a

As of September 30, 2003.

Table 4 shows the seven projects whose contracts were awarded in late 

fiscal year 2003 that are outside the scope of our review. This table does not 

include the recently started projects in Athens, Moscow, or Beijing because 

OBO is utilizing the design-bid-build process for these three projects and 

has yet to award their construction contracts.

Project statusa Project location

Completed Dar Es Salaam, Tanzania

Kampala, Uganda

Nairobi, Kenya

Istanbul, Turkey

Zagreb, Croatia

Doha, Qatar

Tunis, Tunisia

Not completed Abidjan, Cote D’Ivoire

Abuja, Nigeria

Yaounde, Cameroon

Cape Town, South Africa

Conakry, Guinea

Luanda, Angola

Dushanbe, Tajikistan

Kabul, Afghanistan

Sofia, Bulgaria

Tashkent, Uzbekistan

Tbilisi, Georgia

Yerevan, Armenia

Phnom Penh, Cambodia

Abu Dhabi, United Arab Emirates

Sao Paulo, Brazil
Appendix I

Scope and Methodology

Page 30 GAO-04-100 Embassy Construction

Table 4: List of Post Replacement Projects Awarded in Late Fiscal Year 2003

Source: OBO.

We also reviewed the State Department’s Long-Range Overseas Buildings 

Plan, monthly project performance documents, contract modifications, and 

other OBO documents. We interviewed key State Department officials from 

OBO and Diplomatic Security and contractor officials currently working on 

new embassy construction projects. We visited the ongoing projects in 

Sofia and Yerevan to determine the types of problems that could affect cost 

and schedule and what OBO and the contractor are doing to overcome 

these problems. Contracts for the design and construction of these projects 

were awarded in September and August 2001, respectively. The contractor 

broke ground around September 2002. When we visited the sites in July 

2003, the contractor was pouring concrete slabs for the floors. We did not 

verify data provided by OBO. 

We conducted our work between October 2002 and September 2003 in 

accordance with generally accepted government auditing standards.

Project location

Freetown, Sierra Leone

Bamako, Mali

Astana, Kazakhstan

Frankfurt, Germany

Bridgetown, Barbados

Kingston, Jamaica

Tirana, Albania
Page 31 GAO-04-100 Embassy Construction

Appendix II

Information on Embassy Construction 

Projects’ Contractors and Building Size ApendxiI

This appendix provides information on the contractors responsible for 

each of the 22 ongoing embassy or consulate construction projects. It also 

indicates which projects are using standard embassy design and the 

respective sizes of these projects. Table 5 is a list of contractors currently 

working on a new embassy or consulate construction project or compound 

renovation. Company locations are provided to show the geographic 

dispersion of the companies to which State awards its contracts.

Table 5: List of Contractors for Ongoing Embassy and Consulate Replacement 

Projects

Source: OBO.

Contractor name and location Projects

ABB SUSA 

North Brunswick, New Jersey

Luanda, Angola

Alutiiq-Fluor Joint Venture

Rosslyn, Virginia

Sao Paulo, Brazil

B.L. Harbert International 

Birmingham, Alabama

Abuja, Nigeria

Brown & Root Services 

Rosslyn, Virginia

Kabul, Afghanistan

Caddell Construction

Montgomery, Alabama

Yaounde, Cameroon 

Conakry, Guinea

Freetown, Sierra Leone

Bamako, Mali

Caribbean Consultants, Ltd.

Bridgetown, Barbados

Bridgetown, Barbados

Hensel Phelps Construction 

Aurora, Colorado

Cape Town, South Africa

HITT 

Fairfax, Virginia

Tirana, Albania

J.A. Jones Construction

Charlotte, North Carolina

Abidjan, Cote D’Ivoire 

Sofia, Bulgaria

Yerevan, Armenia

Tashkent, Uzbekistan 

Tbilisi, Georgia

Abu Dhabi, United Arab Emirates

Frankfurt, Germany 

Kullman Industries, Inc. 

Lebanon, New Jersey

Dushanbe, Tajikistan

Fluor International, Inc.

Greenville, South Carolina

Astana, Kazakhstan

Kingston, Jamaica 

H.B. Zachry Construction 

San Antonio, Texas

Phnom Penh, Cambodia
Appendix II

Information on Embassy Construction 

Projects’ Contractors and Building Size

Page 32 GAO-04-100 Embassy Construction

Table 6 is a list of the projects employing a standard embassy design and 

their size. Standard embassy designs were not used until fiscal year 2002. 

OBO plans to use the standard design for most future projects, unless the 

embassy involves a large degree of complexity or has special significance 

to the United States, such as Beijing.

Table 6: Size of Embassy Construction Projects Using Standard Embassy Design

Source: OBO.

Location Size of embassy

Freetown, Sierra Leone Small

Yaounde, Cameroon Medium

Conakry, Guinea Medium

Cape Town, South Africa Medium

Bamako, Mali Medium

Kingston, Jamaica Large

Astana, Kazakhstan Large

Phnom Penh, Cambodia Large

Tbilisi, Georgia Large

Tashkent, Uzbekistan Large
Page 33 GAO-04-100 Embassy Construction

Appendix III

Comments from the Department of State ApendxiI

Note: GAO comments 

supplementing those in 

the report text appear 

at the end of this 

appendix.
Appendix III

Comments from the Department of State

Page 34 GAO-04-100 Embassy Construction
Appendix III

Comments from the Department of State

Page 35 GAO-04-100 Embassy Construction

See comment 1.

Now on pp. 8 and 9.
Appendix III

Comments from the Department of State

Page 36 GAO-04-100 Embassy Construction

See comment 2.

Now on pp. 3 and 23.
Appendix III

Comments from the Department of State

Page 37 GAO-04-100 Embassy Construction

See comment 3.
Appendix III

Comments from the Department of State

Page 38 GAO-04-100 Embassy Construction

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

October 27, 2003.

GAO Comments 1. We relied primarily on information from the March 2003 Long-Range 

Overseas Buildings Plan and discussions with OBO officials in drafting 

this section of the report. We revised the text to include information on 

how Diplomatic Security and OBO officials view the relative 

vulnerability of facilities at overseas posts. 

2. We plan to do additional work in the near future on the issue of the U.S. 

government’s efforts to coordinate USAID funding with funding for new 

embassy and consulate compounds.

3. Our work focused on the replacement of vulnerable embassies and 

consulates through construction projects that would bring the post up 

to current security standards. As a result, our report does not discuss 

these projects.
Page 39 GAO-04-100 Embassy Construction

Appendix IV

GAO Contact and Staff Acknowledgments ApendxiIV

GAO Contact John Brummet (202) 512-5260

Staff 

Acknowledgments

In addition to the individual named above, Janey Cohen, Jessica Lundberg, 

Judy McCloskey, Nanette Ryen, and Michael Simon made key contributions 

to this report.

(320163)
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