New Embassy Compounds: State Faces Challenges in Sizing Facilities and Providing for Operations and Maintenance Requirements
Published: 2010-07-20T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: In response to the 1998 bombings of two U.S. embassies, the Department of State (State) embarked on a multiyear, multibillion dollar program to replace insecure and dilapidated diplomatic facilities. Since 2001, State has constructed 52 new embassy compounds (NECs) under this program, and moved over 21,000 U.S. government personnel into more secure and safe facilities. GAO was asked to examine (1) the extent to which new facilities match the space and functionality needs of overseas missions and State's actions to address space and functionality challenges; and (2) operations and maintenance challenges at these new facilities and State's steps to address them. GAO analyzed staffing data and other documentation for 44 NECs built from 2001 to 2009 and interviewed State headquarters and embassy officials at 22 of these 44 NECs to obtain information on their functionality and operations and maintenance issues.
section_title: What GAO Found
paragraphs: State has located nearly one-quarter of overseas staff in NECs, which posts said are an improvement over older facilities. However, NECs do not fully meet the space and functionality needs of overseas missions. Current staffing levels exceed the originally-built desk--or office--space at over half of the 44 NECs GAO analyzed. Post management has dealt with space limitations by converting spaces, like conference rooms, into offices, but 4 posts have had to retain space outside the compound for staff that could not fit in the NECs. Also, officials at almost all of the 22 NECs that GAO reviewed in depth reported some spaces, like consular affairs spaces, did not fully meet their functional needs. According to State officials, it is difficult to predict changing foreign policy priorities that can affect staffing levels, and the process for planning NECs has been unable to fully account for these changes. Budget constraints also affected decisions about the size of NECs and types of features provided. State has taken some actions to improve NEC sizing, but does not have sufficient flexibility in its staffing projection and design processes to better address sizing challenges. To address problems with functionality, State implemented a lessons learned program to analyze issues in completed NECs and modify design criteria for future NECs, but State has not completed, in a timely manner, planned evaluations that are designed to identify such issues. While NECs are state-of-the-art buildings, they have presented operations and maintenance challenges, and the larger size and greater complexity of NECs, compared to facilities they replaced, have resulted in increased operations and maintenance costs. In 2010, State developed its first long-range maintenance plan that identifies $3.7 billion in maintenance requirements over 6 years for all overseas facilities, but it does not include time frames for implementing identified maintenance projects or address increased operating costs. Problems with testing, or "commissioning," new building systems have contributed to problems with building systems that do not function as they should, causing higher maintenance costs. State strengthened its commissioning process, though this change only applies to future NECs and does not address problems at existing NECs. Further, State does not currently recommission--or retest--NECs to ensure they are operating as intended. In addition, more than half of the 22 NECs that GAO reviewed in detail experienced problems with some building systems, resulting in the need for premature repair and replacement. Through its lessons learned program, State has changed some design criteria for future NECs to avoid problems with building systems. Finally, State has had problems hiring and training personnel who have the technical skills necessary to manage the complex NEC systems. State has taken initial steps to improve its staff hiring and training, but does not have an overall plan to establish its NEC human resource needs and the associated costs.

section_title: Letter
paragraphs: In the wake of 1998 terrorist bombings of embassies in Dar es Salaam,  Tanzania, and Nairobi, Kenya, that exposed the poor condition of and  security vulnerabilities at U.S. diplomatic facilities overseas, the  Department of State (State) began a multiyear, multibillion dollar program  to replace insecure and aging diplomatic facilities worldwide. The goal of  this program, the Capital Security Construction Program, is to construct  safe, secure, functional, and modern diplomatic facilities at approximately  214 overseas posts as quickly as possible. The program incorporates the  requirements of the Secure Embassy Construction and Counterterrorism  Act of 1999 that calls for new diplomatic facilities to be sufficiently sized  to ensure that all U.S. government personnel at the post are located on- site. State’s Bureau of Overseas Buildings Operations (OBO), which  operates the program, also intends that these new embassy and consulate  compounds are efficient, state-of-the-art office buildings.
In 2006, we reported that State has made significant progress constructing  new facilities but that better planning is needed for operations and   maintenance requirements. State supported our recommendation that it  should develop a plan that addressed the financial and human resources  for meeting the immediate and long-term operations and maintenance  requirements for new embassy compounds (NEC). Since 2001, OBO has  completed 52 NECs, and moved more than 21,000 United States  government personnel—about one-quarter of those employees working  overseas—into more secure, safe, and functional facilities. OBO  continues to manage ongoing construction and design of 33 additional  facilities.
In response to your request, we examined: (1) the extent to which NECs  match the space and functionality needs of overseas posts and the actions  d (2)  State has taken to address any space and functionality challenges, an  maintenance challenges at NECs and State’s steps to  operations and address them.
To address these objectives, we reviewed program, planning, budget,  evaluation, and other analysis documents from State, as well as previous  GAO reports on State’s embassy construction program. To examine space  needs, we analyzed data from State’s capital security cost-sharing  for 44 of the 52 completed NECs. Our analysis does not include 8  completed NECs, which generally were excluded from our scope becaus ul, e  they are unique projects, such as the NECs in Baghdad, Iraq, and Kab  also  Afghanistan, or were recently completed in fiscal year 2010. We reviewed 22 of the 44 NECs in greater depth, examining space,  functionality, operations, and maintenance issues; we reviewed these  NECs in more detail based on factors such as their geographic location  and their history with staffing, functionality, operations, or maintenance  challenges. For these 22 locations, we conducted site visits at 8 posts and  program  teleconferences with 14 posts. As part of our review of operations and  maintenance issues, we reviewed State documents and reports, including the Long-Range Overseas Buildings and Maintenance Plans. In addition, we discussed the embassy construction program with State officials in  Washington, D.C.; from OBO; regional bureaus; and Office of Management  Policy, Rightsizing and Innovatio n. Appendix I provides more information  on our scope and methodology.
subsections: section_title: Background
paragraphs: The United States maintains facilities at more than 260 diplomatic  missions, including embassies, consulates, and other diplomatic offices,  located around the world. More than 80,000 U.S. government emplo yees  from 30 age maintains.  ncies depend on infrastructure that State provides and  In 1998, terrorist bombings of embassies in Dar es Salaam, Tanzania, and Nairobi, Kenya, killed more than 220 people and injured 4,000 others. In  1998, State formed the Accountability Review Boards to investigate the  bombings. The Boards reported that unless security vulnerabilities at U.S.  embassies and consulates were addressed, U.S. government employees a the public would remain at risk from terrorist attacks at many overseas  facilities. In 1999, the Secretary of State formed the Overseas Presence  Advisory Panel to appraise the condition of overseas facilities and con the future of U.S. overseas representation. The Panel reported on the  unsafe, overcrowded, deteriorating, and “shockingly shabby” co U.S. embassies and consulates. Both the Boards and the Panel  recommended that State replace insecure and aging diplomatic facilities  worldwide. That same year, State embarked on a multiyear, multibillion  dollar program to replace overseas facilities. Through its Capital Security Construction Program, administered by OBO, State intends to construct  new facilities at 214 overseas posts with the goal of providing safe, sec functional, and modern buildings as quickly as possible. The program  incorporates the requirements of the Secure Embassy Construction and  Counterterrorism Act of 1999 that calls for new diplomatic facilities to be  sufficiently sized to ensure that all U.S. government personnel at th e post  ure,  are located on-site. In June 2006, we reported that State had made  significant progress in completing new embassy and consulate compounds.  As of April 2010, State has completed 52 NECs and placed over 21,000 U.S lation working  government employees—or about one-quarter of the popu overseas—in more safe, secure, and functional facilities.  .
To enable timely completion of its construction projects, OBO typically use the design-build project delivery method and a Standard Embassy Design  (SED) that can be adapted to accommodate conditions at each project si NECs generally consist of a main office building (chancery), compound al  access control buildings, utility buildings for mechanical and electric systems, and Marine Security Guard quarters (if a post has a Marine  contingent). Depending on the site, the project budget, and the needs of the  post, a new compound could also include a General Services support anne a warehouse, maintenance shops, recreation facilities, and employee and  public parking areas. Some compounds also include an annex building for  USAID or other program or agency functions. In 2003, we found that staf projections for NECs were developed without a systematic approach or  d  comprehensive rightsizing analyses, potentially resulting in wrong-size buildings, and recommended, among other things, that State provide  overseas posts with comprehensive guidance on developing staffing  projections for NECs. In 2004, State created the Office of Manageme Policy, Rightsizing, and Innovation (M/PRI), which now manages the  process for developing NEC staffing projections. In establishing project  requirements, OBO obtains information on a post’s projected staffing from  te. nt  M/PRI, which works closely with officials at the post, State’s regional  bureau, and other U.S. government agencies to develop a 5-year projection  of the post’s staffing needs based on an assessment of mission priorities and  the staffing levels required to pursue those priorities. With this informatio OBO outlines space requirements that define functional needs for office  (desks), common use (conference rooms, cafeteria), support (janito mechanical rooms), and future growth space. OBO uses this space  requirements analysis to estimate the cost of each project, which forms the basis for State’s Capital Security Construction Program budget request. At  the time of State’s budget submission, OBO considers project requirements  to be “locked,” meaning it intends to construct the facility according to the  requirements that were used to set the budget request. OBO generally lock project re quirements 2 years prior to awarding a contract for design-build  services.
section_title: NECs Do Not Fully Meet the Space and Functionality Needs of Overseas Posts and State Actions Have Addressed Some, but Not All, Challenges
paragraphs: State is making progress moving staff into more secure and functional  facilities. However, we found that over half of the 44 NECs completed from  2001 through 2009 have staffing levels that exceed the number of desks  originally provided by 5 percent or more. Additionally, officials at nearly all  of the 22 NECs we reviewed in greater depth reported the design of some  spaces—such as consular areas, warehouses, or maintenance shops—did  not fully meet their functional needs. According to State officials, it is  difficult to predict changes in foreign policy priorities that can affect  overseas staffing levels, and the current process for planning NECs has been  unable to fully account for these changing needs. State officials also  indicated that budget constraints affected decisions about the overall size  and types of features provided in NECs. In some cases, space and  functionality challenges resulted in the need to conduct follow-on projects  after posts occupied the NEC, resulting in millions of dollars of additional  costs. State has taken steps to address some space and functionality  challenges, such as creating M/PRI to standardize the process for projecting  future staffing levels; incorporating some additional flexibility for future  growth into NECs; and implementing a lessons learned program to analyze  issues in completed NECs and modify design criteria for future NECs.  However, sizing NECs remains challenging and State did not provide the  analytical basis for determining how much growth space should be  incorporated into an NEC. Additionally, State has not conducted planned  evaluations of completed NECs to ensure timely identification of issues.
subsections: section_title: State Is Making Progress Locating Staff in More Secure and Functional Facilities
paragraphs: As of April 2010, State has moved over 21,000 people—or about one- quarter of all overseas staff—into new facilities. State’s Inspector General  (IG) and OBO have reported that posts are satisfied with many aspects of  their NECs, such as the improved security they provide. In 2008, State’s IG  reported that posts commented favorably about their NECs and praised  their design, space, and security. In 2007, OBO surveyed officials at posts  with NECs, and occupants responded positively about many aspects of  their NECs, particularly when compared with old facilities. For example,  86 percent of respondents agreed or strongly agreed with the statement  that “the layout of the NEC is well designed compared with the previous  facility.” Overall, respondents rated security improvements and the fact  that personnel were all located on a single compound as NECs’ two most  important improvements to achieving their diplomatic mission. In many  cases, posts moved from facilities that were in poor condition, insecure,  and scattered throughout the city. State officials noted that, in general,  NECs are a dramatic improvement over older facilities. For example, the  former embassy in Sofia, Bulgaria, consisted of seven buildings spread  throughout the city that did not meet current security standards and  suffered from seismic and structural deficiencies. In comparison, officials  in Sofia noted the NEC was one of the nicest buildings in Bulgaria.  Additionally, officials at overseas posts and State’s regional bureaus  commented on the professional environment of the NECs. For example,  officials at overseas posts stated that NECs were a positive representation  of the United States’ commitment to the host country. However, some  officials also pointed out that the external appearance of NECs can be  imposing and that increased security standards, including the fact that  many NECs are located far from city centers, in part to meet more  stringent security requirements, reduced the willingness of host  government officials to hold meetings at NECs.
section_title: As Originally Constructed, Over Half of NECs Did Not Have Enough Desks for Current Staffing Levels, Resulting in the Need to Add Desks, Which Has Had Some Negative Consequences
paragraphs: Over half of the 44 NECs we analyzed did not have enough desk space to  meet current staffing needs. Post management has converted common  spaces, such as conference rooms or training rooms, into offices in order  to accommodate additional desks on the compound. However, actions  taken to accommodate additional staff have had some negative  consequences, such as the loss of common spaces.
subsections: section_title: Current Staffing Levels Exceed Originally Constructed Desk Space at Over Half NECs
paragraphs: While NECs are a long-term investment that State intends to serve a post  for decades, our analysis shows that most posts have filled their originally  constructed space within just a few years of occupying the NEC. Over half  (25 of 44) of the posts occupying NECs completed from 2001 through 2009  currently have more staff requiring desks than were provided in the NEC’s  original construction. Specifically, as indicated in figure 1, our analysis of  data for all 44 posts in our scope shows that current staffing levels exceed  as-built desks—the number of desks provided when the NEC was  constructed—by 10 percent or more at 21 of the 44 posts and exceed as- built desks by at least 5 percent at 4 additional posts. Not all posts have  exceeded the desk space initially provided. For example, our analysis also  shows 13 posts have current staffing levels at least 5 percent below as- built desk space. However, officials at overseas posts noted that having  some excess space can be helpful, as posts may require additional space  over time and it provides flexibility for post management to adapt to  changing circumstances.
As figure 2 demonstrates, our analysis shows a difference of more than 50  desks for 11 of the 25 posts in which current staffing levels exceed as-built  desk space by at least 5 percent.
State typically plans NECs with some additional desk space for future  growth, but the amount of growth space provided fluctuated over time and  across posts. When the NECs we examined were designed, State typically  budgeted for NECs to include from 5 percent to 10 percent additional desk  space as future growth space. Some growth space is designed as office  space, with desks or cubicles installed during construction, while other  growth space may initially be designed as conference rooms or file rooms,  with the intention that they can be converted to office space in the future,  if needed. State’s typical growth factor for NECs has fluctuated over time.  Prior to 2003, OBO typically planned for growth space equivalent to 10  percent of the projected desk space in an NEC. However, in 2003, due to  concerns about the high cost of the embassy construction program, OBO  reduced the growth space allowance to 5 percent of an NEC’s projected  desk space needs. In 2008, OBO returned to a 10 percent growth factor to  provide a greater margin to accommodate unanticipated growth. These  policies only serve as general guides, though, and some NECs received  less growth space than is typically budgeted. For example, in Bamako,  Mali, State eliminated growth space in the chancery in order to reduce  total construction costs to meet construction contractor bids that were  higher than anticipated.
For the 25 posts in which current staffing levels exceed as-built space by  at least 5 percent, we found that, in general, the number of State positions  has grown more than the number of positions for all other agencies,  including the U.S. Agency for International Development (USAID). As  shown in figure 3, for the 25 posts collectively, the number of current State  desk positions exceeds as-built desk space by more than 1,400 desks, or 38  percent. Comparatively, the number of desk positions for all other U.S.  government agencies combined exceeds as-built desk space by about 200  desks, or 10 percent. Individually, we found a larger increase—both in  terms of absolute numbers and percentage increase—in the number of  State desk positions than in the number of other agency desk positions at  20 of the 25 posts.
Because our analysis groups all non-State agencies into a single category,  it may not highlight the changing make up of overseas posts. While some  non-State agencies have grown substantially, other agencies have reduced  their overseas presence. For example, according to one State official, law  enforcement agencies have increased their overseas presence since  September 11, 2001, while the Departments of the Treasury and  Transportation reduced their overseas staffing levels. Additionally, some  of the growth within State may have resulted from consolidating  administrative services once all agencies collocated at the NEC. State has  taken on additional administrative responsibilities while other agencies  were able to reduce administrative staff.
Some State officials commented that the earliest-built NECs are more  likely to have space shortages, since it is difficult to project staffing levels  farther into the future and there has been more time for the post to  outgrow the space originally provided. However, we found that the age of  an NEC was not a major factor in explaining space shortages. For  example, while 4 of the 6 NECs completed from 2001 to 2003 have  shortages of 5 percent or more, 8 of the 16 NECs occupied since 2007 also  have shortages of 5 percent or more.
section_title: Posts Have Used Growth Space, Converted Conference Rooms and Other Common Spaces, and Reduced Cubicle Size to Locate Staff On- Compound
paragraphs: We reviewed 22 posts in greater depth to determine how they found office  space for additional staff. At most of the 22 posts we reviewed, State was  able to find enough space on the new compound for all additional staff.  Current staffing levels exceed as-built desk space by at least 5 percent in  15 of the 22 posts we reviewed. Eleven of those posts were able to  accommodate all desk positions on compound by using growth space;  converting common spaces, such as conference rooms or training rooms,  into offices; or reducing cubicle sizes. Figure 4 provides examples of some  spaces that posts have converted into office space.
However, 4 of the posts we reviewed had to retain some office space off- site. Table 1 lists the posts that have office space off-site, as well as the  reasons for doing so.
In addition to potentially increasing the security risks for those employees  not on-compound, State officials noted that having employees off- compound results in additional costs and can affect coordination across  the mission and reduce the efficiency of posts’ operations because  embassy personnel have to spend more time in transit between facilities.  In the cases in which posts have some staff working off-site, post  management has had to either retain old facilities or lease additional office  space. In the case of Berlin, the most cost-effective option for locating  staff off-site—at an estimated cost of $25 million—involved purchasing  and renovating an office facility the post had formerly leased. In Abuja,  leasing off-site office space costs over $800,000 per year.
section_title: Space Constraints and Actions Taken to Add Desks Have Had Some Negative Consequences for Post Operations
paragraphs: State officials noted that, because post management often has to convert  common areas, such as conference rooms or training rooms, into offices  to accommodate additional staff, posts may not have sufficient meeting or  training space. For example, regional bureau officials stated that dedicated  training rooms in NECs are often converted into office space, but that  having training space is important for embassy operations. Officials also  noted that other actions, such as having staff share desks or locating new  staff in available spaces far from the rest of their agency or section, can  result in operational inefficiencies. For example, at one African post, some  FBI staff have to work in shifts in order to share a limited number of  classified computers.
Additionally, officials at some of the posts we reviewed expressed  concerns that space could increasingly become a consideration in  approving requests for new overseas positions, potentially reducing the  post’s ability to execute its mission. In general, the vast majority of new  position requests are approved—over 97 percent of all requests were  approved in 2008 and 2009. In considering new position requests, State  advises Chiefs of Mission to consider space availability, among other  issues, and we found that a few position requests at posts with NECs have  been denied, at least in part, because of space constraints. According to  State data, in a few instances, posts have cited resource limitations,  including space constraints, when denying requests for new overseas  positions. Of the seven posts that cited resource limitations when denying  requests for overseas positions in 2008 and 2009, three currently occupy  NECs and one is scheduled to move into an NEC with known space  shortages in 2010. Some post officials also noted that space shortages can  make it difficult to accommodate short-term, or temporary duty, positions.  Officials noted that, in cases where the NEC has little or no available office  space, it can be difficult to find places for short-term staff to work. At  some posts, the number of short-term positions can be quite large. For  example, an official in Beijing, China, stated that the post can have up to  100 short-term staff at the NEC on any given day and finding desks for  them can be challenging.
section_title: Officials at Nearly All Posts We Reviewed Reported the Design of Some Spaces Did Not Fully Meet Their Functional Needs
paragraphs: Though staff at overseas posts noted many aspects of NECs function well,  officials at 21 of the 22 posts we reviewed reported the design of some  spaces within the NEC did not fully meet their functional needs, with an  average of five functionality-related issues per post. While officials  reported a variety of different concerns about each of the spaces, several  officials noted an overarching concern that the design of some spaces in  the NEC failed to take into account local conditions, such as weather or  economic factors, or how the post would ultimately use the space. Table 2  shows the six most commonly cited issues.
Figures 5 through 10 provide descriptions of some of the types of issues  post officials reported with each of the above functional areas.
section_title: Challenges with Projecting Future Staffing Levels and Budget Constraints Have Resulted in the Need to Conduct Follow-on Work
paragraphs: According to State officials, it is difficult to predict changes to staffing  levels associated with shifting foreign policy priorities, and the process for  planning NECs has not been able to fully account for those changes. State  officials also indicated that budget limitations contributed to decisions  about the overall size and types of features provided in NECs. In some  cases, space and functionality challenges resulted in the need to conduct  follow-on projects, resulting in millions of dollars of additional costs.
subsections: section_title: The Current Process for Sizing NECs Has Not Been Able to Fully Account for Changing Foreign Policy Priorities
paragraphs: According to State officials, the process for planning NECs has not been  able to fully account for changing staffing levels associated with shifting  foreign policy priorities. Because of the time required to plan and  construct an NEC, there can be a lag of multiple years from the time  staffing projections are finalized to the time a post moves into an NEC.  The process for projecting future staffing needs starts with an assessment  of mission priorities and the staffing levels necessary for carrying out  those priorities. Therefore, State officials noted it can be very difficult to  predict future staffing levels when changes occur as a result of unexpected  events or initiatives. Officials at overseas posts, OBO, the regional  bureaus, and M/PRI all agreed that changes in U.S. foreign policy priorities  following the planning or construction of an NEC resulted in significant  growth at many posts, contributing to the differences between current  staffing levels and as-built desk space. According to State officials, some  posts have had large increases in staffing due to recent initiatives, such as  the President’s Emergency Plan for AIDS Relief (PEPFAR) and recent  State and USAID initiatives to substantially increase their Foreign Service  presences. For example, according to officials in Kigali, Rwanda, the  post’s staffing projections predicted that the Centers for Disease Control  and Prevention would have 18 desk positions at the time the NEC opened,  but it actually had 34 desk positions when the NEC opened because of  increases associated with PEPFAR. Staffing levels have also reflected  changing needs in response to world events. For example, according to an  M/PRI report, following the terrorist attacks of September 11, 2001, many  law enforcement, security, and military agencies increased their overseas  presence. According to State officials, many of these initiatives were not  anticipated when NECs were planned.
Additionally, when staffing projections are prepared, an agency may not  have clearly planned for or articulated future needs. According to State  officials, some agencies have historically been better than others in  developing staffing projections and articulating the policy justifications for  staffing growth. However, other agencies have been less clear in their  planning, complicating State’s ability to plan an NEC. For example, State  officials report that USAID frequently revises its projected staffing levels,  sometimes even after construction of a facility has begun. Also, as our  earlier analysis showed, at the posts that have exceeded as-built desk  space by at least 5 percent, State has grown substantially more than other  agencies, indicating it has also been challenging for State to predict its  own future staffing levels.
State officials also noted that the staffing projections that determine an  NEC’s size are not directly tied to the process for approving actual staffing  levels at each post. OBO sizes NECs based on staffing projections  provided in a post’s rightsizing report. While posts, tenant agencies, and  the regional bureaus all have input into the rightsizing process, M/PRI has  final approval for these staffing projections. However, State officials noted  that the Chief of Mission has authority over actual staffing levels at each  post and may approve positions beyond the levels planned for in the NEC.  According to State officials, in cases where M/PRI and the Chief of Mission  do not agree on the appropriate staffing levels for a post, discrepancies  can result between an NEC’s planned size and the post’s actual staffing  levels. For example, in Addis Ababa, Ethiopia, the post’s initial projections  anticipated the post would expand and become a regional center. Both  M/PRI and State’s IG disputed the premise that Addis Ababa should be a  regional center, noting that Nairobi, Kenya, already serves a regional role  in East Africa. In addition, M/PRI found the post’s initial projections  included substantial growth even though the post had dozens of unfilled  positions. Therefore, the rightsized staffing projections anticipated more  limited growth, reducing the post’s initial projections by 47 desk positions.  However, the Chief of Mission continued to add new positions at a rate  even faster than the post initially projected and, in 2009, OBO had to  initiate changes after construction of the Addis Ababa NEC had already  begun in order to accommodate 96 additional desk positions at a cost of  about $13 million.
OBO officials report it is difficult to make changes to a project to  accommodate changing needs after the staffing projections have been  finalized. The NEC construction process typically requires a 2-year lag  from the time staffing projections are initiated to the time a contract is  issued and an additional 3-year lag between contract issuance and the time  a post moves into the NEC. When changes are requested, State officials  said State and other tenant agencies may reassess the project to determine  whether the requirements are critical enough to warrant changing the  project’s planned schedule and budget. In some instances, State officials  reported changes could be accommodated to the program and in other  cases changes could not. OBO officials noted it is easier to make changes  to a project before a contract has been awarded. While changes have been  made to a few projects after a contract has been issued, OBO officials  stated it is not preferable because it can increase costs and delay  construction.
section_title: Budget Limitations Also Contributed to Space Constraints and Functionality Issues
paragraphs: Budget limitations also contributed to space constraints and functionality  issues in some NECs. According to OBO officials, congressional and  executive concerns about the high cost of the embassy construction  program were a primary reason for the 2003 decision to reduce the NEC  growth factor from 10 percent to 5 percent. Budget limitations also  impacted decisions about the overall size of the NEC at some posts with  significant desk shortages. For example, State officials noted that, the  overall size of the NEC in Dushanbe, Tajikistan—where, according to our  analysis, current staffing levels are more than double the number of desks  initially provided—was largely based on the planned budget. We  identified 10 posts in which some spaces or features were reduced or  eliminated between the initial planning and final construction of the NEC.  Some NECs were significantly affected by budget limitations. In Berlin,  Germany, for example, more than one-third of the originally planned space  in the new facility was cut due to budget limitations. In Conakry, Guinea,  functional spaces—including the cafeteria, multipurpose room, and most  conference rooms—were cut in order to meet the project’s planned  budget. According to OBO officials, programmatic support facilities, such  as warehouses, recreational facilities, and cafeterias, were eliminated from  a project’s scope before any changes were made to office space. State  officials noted that, in some cases, reducing the scope of a project may  have been preferable to delaying the project.
section_title: Space and Functionality Challenges Resulted in the Need for Follow-on Work at Some Posts
paragraphs: In some cases, problems with space and functionality resulted in the need  to conduct follow-on work after the post moved into the NEC, such as  planning for a major redesign of interior space or constructing an office  annex or support facility, which has cost implications. In particular, State  has completed or plans to complete new construction or major  renovations in at least six of the 44 completed NECs within our scope. For  example, State is constructing an office annex in Beijing, China, to  accommodate 318 additional desks at a cost of $103 million. In Dushanbe,  Tajikistan, OBO developed a plan to rearrange space within the existing  chancery to accommodate new and projected desk positions, as well as  build a warehouse and maintenance shops on-compound. In total, OBO  estimates the changes will cost about $7.5 million, but notes that, even  with the recommended changes to add office space, there will be no  available space for future growth beyond the staffing levels projected for  2013. Additionally, in its 2010 Long Range Overseas Maintenance Plan,  OBO identifies 96 needed projects for the 22 posts we reviewed in greater  depth at a total cost of approximately $98 million. Most of the costs are  attributable to major rehabilitation projects, including $42 million in  Frankfurt, Germany, for renovations that were anticipated but not  undertaken when the post originally moved into the new facilities in  2005. Additionally, officials at 16 of the 22 posts we reviewed reported  they have already undertaken follow-on projects of varying size and  complexity to correct problems with their respective NEC.
section_title: State Has Begun to Take Actions to Address Space and Functionality Challenges, but Not All Problems Have Been Fully Addressed
paragraphs: State has recognized many of the problems related to space and  functionality and has taken actions that have resulted in improvements,  but not all problems have been fully addressed. To improve NEC sizing,  State created M/PRI to standardize the process for projecting future  staffing levels. Additionally, OBO has taken some actions to incorporate  additional flexibility for growth in NECs. However, accurately projecting  future staffing needs remains challenging and State did not provide an  analytical basis for determining how much growth space is appropriate. To  address functionality challenges, OBO implemented a lessons learned  program that analyzes issues in completed NECs and, as appropriate,  modifies design criteria for future NECs. However, State has not ensured  timely identification of problems in completed NECs through reviews, like  post-occupancy evaluations.
subsections: section_title: State Has Taken Actions to Improve Sizing of NECs, but Challenges Remain
paragraphs: Through its creation of M/PRI in 2004, State standardized the process for  developing staffing projections for posts receiving an NEC. As we noted in  2003, under State’s prior process, State’s headquarters gave embassies  little guidance on factors to consider in developing projections, and U.S.  agencies therefore did not take a consistent or systematic approach to  determining long-term staffing needs. M/PRI now directs the process and  has developed formal guidance on developing staffing projections for  posts. According to State officials, in combination with the 2005  establishment of the Capital Security Cost Sharing program, through  which each agency with an overseas presence contributes funds for  construction on the basis of its overseas staffing levels and the type of  space occupied, changes made through the rightsizing process have  brought greater discipline to the planning process and have provided  greater incentive for State and other agencies operating overseas to  seriously consider their long-term staffing needs. State has also  undertaken efforts to work more closely with tenant agencies to better  understand their staffing needs. For example, State now meets with  officials from USAID on a monthly basis to discuss future staffing needs.
OBO has also taken actions to incorporate some additional flexibility for  growth into NECs. According to OBO officials, the SED was changed to  incorporate more flexibility after the first year of its use. For example, the  first version of the SED included detailed floor plans that dictated where  offices and open workstations would be located. However, in the SED’s  second year, OBO moved to a different approach that focused on the  overall size of the NEC but left greater interior flexibility to rearrange  office space. Recognizing the need to reassess the amount of growth space  provided in NECs, in 2008 OBO increased the standard growth factor from  5 percent back to 10 percent, which it had been prior to 2003, to provide a  greater margin to accommodate unanticipated growth. According to State  officials, OBO has made an effort to be more accommodating to changing  post needs through the design and construction process, when possible.  OBO officials noted four cases in which they made changes to add space  to an NEC’s design after the staffing projections were finalized. However,  officials also stated that, while they want to accommodate posts’ needs,  OBO prefers to avoid making changes after the contract has been issued  because it is costly and can cause substantial delays.
While the implementation of a formal rightsizing process is an important  step to improving projections for sizing NECs, accurately planning for  future needs remains challenging. State officials acknowledged it remains  difficult to accurately project future staffing needs. While only 6 of the 44  posts included in our scope underwent a thorough rightsizing review when  planning their NEC, our analysis of staffing data at these posts suggests  that accurately projecting future staffing needs can still be difficult. We  found that current staffing levels exceed as-built desk space by at least 20  percent at four of the six posts that underwent a rightsizing review, all of  which were completed in 2008 or later.
OBO, M/PRI, and regional bureau officials agreed that the NEC planning  process should include a greater degree of flexibility to account for  unanticipated changes. OBO officials indicated it may be more  advantageous to plan buildings based on flexible bands that correspond to  a post’s general size—for example, posts with a need of 200 to 250 desks  might constitute one band—rather than focusing on a specific desk count.  Officials noted construction costs tend to come in bands and such an  approach could incorporate more flexibility than is allowed in the current  process. M/PRI officials also said that placing less focus on a specific desk  count in planning NECs could be beneficial, as it would allow them to  focus more resources on assessing the potential for policy changes that  could impact future staffing levels.
section_title: Analytical Basis for Growth Factor Unclear
paragraphs: While State revised the growth factor for NECs in 2008, officials did not  provide the analytical basis for determining how much growth space is  appropriate. OBO officials stated that, while the growth factor was  originally intended to provide space for future growth, even a 10 percent  growth factor can be exhausted very quickly at many posts, essentially  providing some posts with no available growth space from the moment  they occupy the NEC. As our earlier analysis showed, nearly half of all  NEC posts have current staffing levels that exceed as-built space by more  than 10 percent, while some posts have staffing levels lower than the  initial projections. However, while the amount of growth space provided is  sometimes reduced based on budget or other considerations, officials  noted that State essentially applies a uniform growth factor across all  posts and does not adjust the growth factor based on post-specific  characteristics, such as a post’s geographic location or the presence of  rapidly growing agencies or functions, that might help forecast growth not  explicitly planned for in the staffing projections. State officials did not  indicate they have conducted any analysis of characteristics associated  with rapid growth at completed NECs, but officials from M/PRI  acknowledged that examining such characteristics could improve the  process for sizing NECs. OBO officials report they have considered  changing the standard growth factor based on certain post characteristics,  such as adding 5 percent additional growth space at posts in which USAID  has a presence. While we could not identify clear industry or government  standards regarding how much growth space is appropriate, one agency— the National Institutes of Health—recommends that in determining how  much flexibility should be incorporated into a building, one should  consider the cost of incorporating flexibility now compared with the cost  of renovating space in the future, among other factors. However,  according to State officials, State has no current plans to make any  changes to the NEC growth factor.
section_title: State Implemented a Lessons Learned Program to Improve Future NEC Design
paragraphs: In 2004, State implemented a formal lessons learned program that seeks to  improve the design of future NECs. According to OBO officials, the  program entails bringing together representatives from a variety of  technical disciplines within OBO to systematically evaluate issues  identified in completed NECs and, if appropriate, take action to modify  NEC design criteria to avoid similar problems in future facilities. OBO  identifies topics to evaluate through the lessons learned program through  a variety of sources, including post-occupancy evaluations, contractor  roundtables, and facilities management industry best practices. Through  the lessons learned program, State identified many of the functionality  issues at the posts we reviewed and has taken action to change the design  criteria for a number of functional areas of future NECs. According to  State officials, for fiscal years 2005 through 2008, OBO implemented  changes to design criteria for over half of the issues identified through the  lessons learned program. OBO officials noted that, on average, the  program reviews about 500 issues of varying size and complexity per year.  Table 3 lists certain recent modifications that have been made through the  lessons learned program to address functionality challenges.
Evaluations of completed NECs are one mechanism for obtaining  information for the lessons learned program. State has undertaken post- occupancy evaluations on some completed NECs to assess what aspects  of the building worked well and what aspects need improvement. State  officials reported post-occupancy evaluations are a very important tool for  identifying issues and noted that some of the design changes they have  initiated were based on issues identified through post-occupancy  evaluations. In conducting a post-occupancy evaluation on the NEC in  Yerevan, Armenia, for example, State reported it identified a number of  issues with the maintenance shops, which led to a recommendation to  examine how State could improve maintenance shops in future NECs. In  addition to post-occupancy evaluations, in 2008, OBO initiated a “look  back” study to identify issues and problems for review through its lessons  learned process with regard to the planning, design, construction, and  maintenance of 55 NECs and office annexes completed from 2001 to 2007.  For example, OBO officials report that the look back study found posts  have had issues with consular windows, such as poor acoustics impacting  the privacy afforded to visa applicants. While the look back study was an  important tool for identifying issues in completed NECs, the study had  some limitations. For example, according to an OBO official, it was  completed in a very short time frame and the level of detail in its findings  was inconsistent across posts.
While State’s efforts to implement the lessons learned program have  resulted in improvements, State has not ensured that reviews of completed  NECs are undertaken in a timely manner. Due to the time required to  contract and construct NECs, it can take 4 years for an approved lessons  learned recommendation to materialize as an improvement in future  NECs. Therefore, according to State officials, timely identification of  issues through OBO reviews, such as post-occupancy evaluations, is  critical to ensure that problems are not repeated in future designs. We  found that OBO has completed a post-occupancy evaluation for 10 of the  44 NECs completed since 2001 and has not completed any post-occupancy  evaluations since 2008. OBO officials reported that OBO intended to  complete 17 post-occupancy evaluations of NECs in 2009, but did not  complete any because staff were diverted to other priorities. OBO officials  also report they plan to complete 9 post-occupancy evaluations of NECs in  2010; however, as of May, 2010—almost halfway through the year—no  evaluations have been completed.
section_title: NECs Are Challenging to Operate and Maintain; State Has Taken Steps to Address These Challenges, but Problems Remain
paragraphs: State has constructed NECs that are state-of-the-art buildings, built in  accordance with current building codes, security, and energy-efficiency  standards. The comparatively larger size of NECs, relative to the facilities  they replaced, and complexity of NEC building systems have resulted in  increases to operations and maintenance costs. State has developed a plan  that identifies future maintenance requirements to protect the investments  made in NECs but the plan does not report on the increased operating  costs, and likely future costs, to operate NECs. NECs have also presented  challenges for some posts due to rushed testing of building systems— recognized in the industry as “commissioning”—or poorly coordinated  transfer of the NEC from OBO to the post, which has contributed to  operational issues affecting building cooling and fire protection systems.  More than half of the 22 NECs we reviewed also have experienced  problems operating building systems, which have resulted in the need for  earlier-than-anticipated repair and replacement projects. State has made  organizational changes, revised its commissioning process, and changed  design criteria to avoid problems with future NECs. However, State has  not developed a plan to recommission or retest completed NECs to ensure  building systems are operating as efficiently as possible and that  outstanding and potential problems with NEC building systems, such as  the increased risk of failure of NEC cooling systems, are being fully  addressed. In addition, State has had problems in hiring U.S. facility  managers and hiring and training locally employed maintenance staff that  have the necessary technical skills to operate and maintain an NEC’s  complex systems.
subsections: section_title: State Is Making Progress in Constructing Facilities That Meet Building Codes and Security Standards and Support Federal Energy Reduction Goals
paragraphs: State constructs NECs in accordance with modern building codes, State  security standards, and federal energy-efficiency goals. The new facilities  are modern, state-of-the-art buildings that incorporate technologically  sophisticated building systems and are more secure than the old  embassies and consulates that would not meet current codes and  standards. (Fig. 11 shows examples of the equipment that support the  sophisticated NEC building systems.)
NECs are modern, state-of-the-art facilities designed and built in  accordance with the International Building Code, which guides design of  the facilities’ structural components, fire and life safety features, and  seismic engineering provisions, among other elements. For example, NECs  have modern fire protection systems that require fire pumps to protect  multiple buildings on a typical 10-acre compound. In addition, NECs are  safer than older embassies because the designs for NECs consider the  seismic conditions in local areas to enable the NECs to be constructed to  withstand seismic events. The NEC in Port-au-Prince, Haiti, for example,  was one of the few facilities to withstand the January 2010 earthquake in  the country and was used in support of recovery operations. Meeting  modern code requirements by including fire pumps and designing  structural systems to withstand seismic events contribute to NECs being  larger than the facilities they replaced. Additionally, NECs provide  common areas (e.g., cafeterias, atriums, and recreational facilities) that  also contribute to the larger size of NECs.
NECs are constructed to meet security standards and, as a result, are more  secure than the facilities they replace because the buildings’ exteriors are  hardened to provide blast protection, and windows and doors also are  designed to meet forced-entry and ballistic-resistance standards. In  addition, NECs’ heating, ventilation, and air conditioning systems are  equipped with larger, technologically sophisticated systems to filter  potentially harmful airborne contaminants and effectively create an air- tight environment within the buildings. NECs also have redundant systems  such as generators that operate in the event of local power loss and  provide storage for water and fuel so that posts are capable of maintaining  operations. Some NECs receive services from local utility systems while  others must independently produce their own utility services. The NEC in  Port-au-Prince, Haiti, for example, operates its own utility systems that  enable it to generate electricity, produce potable water on-site, and treat  waste water. Constructing NECs to meet current security standards, such  as hardening structures and having built-in system redundancies,  contributes to NECs being more secure and larger than the old facilities.
To meet federal energy mandates to reduce energy and water  consumption, NECs contain technologically sophisticated building  automation and energy management systems that control and monitor  heating, cooling, ventilation, lighting, and power systems.  In addition,  starting in 2008, State’s goal is to design all new NECs to meet the U.S  Green Building Council’s Leadership in Energy and Environmental Design  (LEED) certification requirements related to promoting energy efficiency  and minimizing environmental impacts. To date, State has constructed  LEED-certified NECs in Sofia, Bulgaria (see fig. 12); Panama City, Panama;  Brazzaville, Republic of Congo; and Johannesburg, South Africa. State  officials report that the department has approximately 30 projects  registered with the LEED program and they expect many of the projects  will receive LEED certification over the next few years.
section_title: Larger, More Technologically Complicated New Facilities Cost More to Operate and Maintain than Those They Replaced
paragraphs: The comparatively larger size of NECs and the complexity of their building  systems have resulted in higher operations and maintenance costs than at  the facilities they replaced. Costs of utilities, maintenance staff, and  service contracts are contributing to the cost increases. In our review of 10  recently completed posts, we found that total post-managed operations  and maintenance costs were about $12 million greater than at the facilities  they replaced. Utility costs (e.g., electricity, gas, fuel oil, water, and  sewer) increased on average $827,000—or about 250 percent—per post.  Each of the 10 posts experienced at least a 75 percent increase in utility  costs after moving into an NEC. Our analysis is consistent with a State  2009 benchmarking study of approximately 165 overseas posts that shows  a trend of increasing operations and maintenance costs. In addition,  State’s report shows that four of the five posts with the highest utility  costs (calculated on a gross square meter basis) were NECs. Table 4, for  NECs completed in 2007 and 2008, shows the pre-NEC utility costs  approximately 1 year prior to the move into the NEC compared to posts’  fiscal year 2009 utility costs.
State officials noted that while building systems in NECs are more energy  efficient compared to systems in buildings that were replaced, operating  conditions cause them to consume a greater amount of energy due to, for  example, additional security equipment such as security gates, lighting,  cameras, and vehicle barriers that all require power. Further, NECs are  physically larger than replaced facilities, meaning that costs to heat and  cool the NECs will be greater. In addition, the air filtration equipment  needed to maintain the sealed environment in NECs is about 50 percent  larger in size and costs about 40 percent more to operate than if the  filtration systems were not installed.
subsections: section_title: Maintenance Staff Costs Are Increasing at NECs
paragraphs: The costs for maintenance staff increased by approximately $200,000 on  average at the 10 posts for which we analyzed cost data because of the  need to hire additional facilities staff to operate and maintain the NECs.  For example, officials in Kigali, Rwanda, reported the size of its facilities  staff prior to occupying the NEC was 20. Kigali now has 50 facilities  maintenance staff as a result of the larger chancery and increased staff  housing. Fourteen of those staff are dedicated solely to the NEC  operations and maintenance. The additional annual cost for those 14  positions solely dedicated to NEC maintenance in Kigali was  approximately $236,000.
section_title: Service Contracts Are Needed to Support Some NEC Maintenance
paragraphs: For fiscal year 2011, to ensure proper maintenance of systems and  equipment at NECs, OBO estimates that posts would spend approximately  $150,000, on average, to fund maintenance service contracts. Posts use  service contracts to obtain technicians to maintain some systems, like  elevators and building automation systems, that may not have existed at  the older facilities. Some posts also use service contracts to obtain  maintenance service from regional sources when they are unable to find  skilled labor to hire locally. Because some posts’ maintenance personnel  may not be capable of fully addressing all maintenance requirements of an  NEC’s technically sophisticated systems, use of maintenance service  contracts enables posts to obtain contractors that can perform specialized  maintenance, such as conducting infrared testing on equipment  temperatures.
section_title: State Has Developed Its First Long-Range Overseas Maintenance Plan, but Plans Are Incomplete
subsections: section_title: State’s Strategy to Maintain NECs Includes Revisions to Processes for Funding Routine Maintenance and Service
paragraphs: In fiscal year 2010, partly in response to our 2006 recommendation, OBO  developed its first Long-Range Overseas Maintenance Plan (LROMP) to  support State in budgeting for what OBO reports in the plan as an  “investment protection” strategy for the multibillion dollar investment  made in constructing NECs. The LROMP outlines facility maintenance  needs—characterized as “non-capital projects”—over a 6-year planning  horizon for NECs as well as older facilities at posts not scheduled to move  into an NEC. State intends to update the plan annually as a companion  document to the Long-Range Overseas Buildings Plan which outlines  State’s capital construction plan for building new embassies over the same  period. The plan is intended to inform State’s budget requests beginning  with the fiscal year 2011 budget request. The plan currently identifies over  3,300 potential projects for the period from fiscal year 2010 through fiscal  year 2015. Overall, the plan presents what State characterizes as “the  universe of requirements” (i.e., based on approximately 5,200 facilities  located in over 260 locations) identified in fiscal year 2010, which total just  over $3.7 billion. State has also identified a number of areas where the  LROMP needs to be improved in next year’s edition, such as ensuring that  posts have accurately identified all their maintenance requirements, better  defining costs for major rehabilitation projects (e.g., costs to move staff  into temporary space during a project), and better automating the process  for escalating or reducing project costs as proposed projects move  between fiscal years.
In addition to identifying future maintenance projects, State has taken  action to improve its processes for establishing budgets targets for (1)  determining and allocating funding for posts’ routine maintenance and  repair and (2) setting funding targets for posts’ maintenance service  contracts. The LROMP reports that starting with its fiscal year 2011 budget  request, State changed its approach for setting posts’ annual routine  maintenance and repair budgets that fund maintenance activities that are  considered routine, recurring, and minor, and that are managed by posts,  such as painting and weather stripping. Historically, routine maintenance  and repair funds were allocated to posts by simply escalating prior year  funding levels without consideration for factors such as the age of posts’  facilities. Under a new approach, a more objective determination of posts’  budget levels is made based upon factors such as the age and current  condition of posts’ facilities, the amount of space needed to be maintained,  and an index for geographic costs considerations, such as the costs to  procure or ship maintenance materials in the region. Under this new  approach, State identified a requirement of $98 million for fiscal 2011 to  support routine maintenance and repair at overseas posts, more than  double the amount of State’s 2009 budget of $44.5 million for routine  maintenance and repair. The LROMP also reports that, starting in fiscal  year 2009, State took action to establish a new cost category for Building  Maintenance Expenses (BME) in order to improve how it budgets, funds,  and captures costs for preventative maintenance service contracts (e.g.,  service contracts for elevators, generators, fire protection systems, and  building automation systems) at overseas posts. The new process places  the responsibility for setting State’s budget targets for maintenance service  contracts with OBO as opposed to posts and other agencies; other  agencies at posts are still required to fund their share of the maintenance  service contracts. State made the decision to fund its agency’s share of the  maintenance service contracts out of existing OBO funding in order to  protect the investment made in NECs. According to a senior State official,  development of the LROMP, as well as the shifting of responsibilities to  OBO for setting funding targets for State’s share of posts’ maintenance  service contracts, should be seen as moving State toward clarifying at least  the maintenance requirements for overseas posts.
section_title: State’s Plan Does Not Provide Planning Time Frames to Implement Projects
paragraphs: While the LROMP has begun to outline maintenance requirements, and  does prioritize projects, our analysis of the plan found it does not provide  an indication as to when projects would be executed over the 6-year  period and the likely implications of delaying projects due to lower-than- anticipated budgets. Rather, the plan outlines the “universe of  requirements” of 3,300 potential projects at a cost of nearly $3.7 billion  over a 6-year period. A senior State official acknowledged the plan does  not indicate in what specific fiscal years projects are planned to be  implemented. He noted that undertaking the first edition of the LROMP  was itself a major undertaking and getting posts to identify maintenance  requirements was challenging. Without some detail on the planned time  frames to implement some of the maintenance projects, for at least the  current fiscal year and pending budget year, the usefulness of the plan in  supporting State’s budget requests is diminished.
section_title: State’s Plan Does Not Address Increasing Costs to Operate NECs
paragraphs: While the LROMP is a step toward providing insight into the maintenance  resources needed to protect the investment in NECs, we found it does not  provide insight into operating costs, such as the costs for utilities. In  2007, OBO took action to create a utility database to capture some of  posts’ annual operating costs as well as posts’ energy and water  consumption data; however, our review of database reports shows that  many posts have reported incomplete or missing data for recent years,  including data for some of the NECs we reviewed. OBO prepared a 2009  benchmarking study that may enable State to focus on reducing operating  expenses at posts with high costs. However, according to OBO, except  for providing posts with first-year operating cost estimates for individual  NECs, planning for operations is not an area that OBO officials feel they  can address directly, as it is outside OBO’s program area of  responsibility. State and other agencies at overseas posts are responsible  for funding operations through the International Cooperative  Administrative Support Services (ICASS) process, while OBO is  responsible for funding maintenance. Following State’s briefing of the  LROMP to its Industry Advisory Panel, one of the panel members  representing a leading international facilities management organization  commented that he felt that State’s plan was missing the “operations  piece.” He reported that his organization found that building owners must  plan for both operations and maintenance and remarked that, while the  LROMP does outline future maintenance budget needs, it does not provide  insight into future operations costs.
section_title: Problems in Commissioning and Transferring the Early NECs from OBO to Post Posed Potential Safety Risks and Hindered Efficient Operations
paragraphs: NECs have presented operations and maintenance challenges for posts  due to problems, in part, related to the inspection, testing, and  documentation of building systems—recognized in the construction  industry and by the federal government as “commissioning.” In 13 of the 22  posts we reviewed, we found problems that were linked, in part, to  commissioning. State’s Inspector General identified significant problems  with the commissioning process in its 2008 report on OBO’s operations,  citing it as the most maligned issue raised by posts with NECs. Officials  at NECs report they have had to contend with operational issues,  including some systems not functioning properly due to commissioning- related issues. Officials’ concerns regarding commissioning relate to  operational issues they have experienced with critical systems, such as  NEC cooling, building automation, and fire protection systems. Prior to  September 2008, the commissioning agents did not work for State directly,  but rather were hired by the construction contractors. Furthermore, we  found there were problems when NECs were transferred from OBO to  post, such as the facility managers not receiving accurate drawings of the  NEC to support maintenance.
subsections: section_title: Commissioning of Critical NEC Building Systems Has Been Challenging
paragraphs: At more than half the posts we reviewed, we found problems related, in  part, to the commissioning of heating, ventilation, and cooling systems and  the building automation systems controlling those systems. For example,  in Berlin, Germany, the facility manager told us that, nearly a year after  taking occupancy, the embassy’s building automation system has had  ongoing operational problems, resulting in it not being able to fully control  NEC mechanical systems. He believes these problems should have been  identified during commissioning. He further noted that OBO is providing  funding for a contractor to continue to work on the programming of the  building automation system. In Sofia, Bulgaria, one official noted the  building automation system as commissioned and transferred by OBO was  not programmed to provide for the most efficient operation of heating and  cooling systems and that it took time for maintenance staff to learn how to  adjust the system and achieve energy savings by optimizing the system.  Similarly, in Yaoundé, Cameroon, officials reported that the building  automation system was only recently programmed—nearly 4 years after  the NEC was completed—to run the NEC’s cooling system at a reduced  level during periods of low occupancy such as during nights and on  weekends. Post officials reported this change allowed them to save $4,000  per month ($48,000 per year) in utility costs. In addition, the embassy in  Kathmandu, Nepal, reported that systems were not commissioned for  efficient operation and that maintenance staff had to undertake their own  efforts to optimize operations of the new chancery’s building automation,  cooling, and power generator systems, resulting in reduced energy  consumption and savings of approximately $58,000 in electrical energy  costs and $84,000 in diesel fuel costs between approximately November  2008 and May 2009.
Prior to 2009, commissioning responsibilities for fire protection systems  resided with OBO’s Office of Design and Engineering, rather than OBO’s  Office of Fire Protection, which is largely responsible for inspections of  existing fire protection systems, supporting posts in maintaining those  systems, and investigating fires. While OBO’s Office of Design and  Engineering had fire protection engineers verifying compliance with  contract documents in an effort to ensure fire systems were commissioned  before NECs were occupied, OBO officials reported those staff engineers  did not have the direct authority to prevent occupancy of NECs. Also,  while commissioning of fire protection systems may have been conducted  before post personnel moved into the NECs, post officials reported many  problems with those systems shortly after commissioning, including false  alarms, problems with fire alarm panels, and some fire devices (e.g.,  smoke detectors) not being connected. In its written responses to our  questions, OBO’s Office of Fire Protection reported that some early NECs  were occupied without the correction of critical deficiencies.
In its review of OBO and its survey of overseas NECs, the State IG also  reported there were numerous comments about NEC fire systems not  being fully ready at occupancy. Embassy officials in Panama City,  Panama, reported to us that when post personnel moved into the NEC, the  fire alarm system in the warehouse was not hooked up, some smoke  detectors were not installed, and the fire alarm panels were problematic.  They believe that schedule pressures led to occupying the NEC before  issues were fully resolved. Officials at 3 NECs we reviewed told us that  OBO’s fire engineers, or its contractors, had visited their post to help fix  problems that occurred after moving into the NECs.
section_title: State’s Commissioning Approach Lacked Independence
paragraphs: State reported that until 2008 the testing and commissioning of NECs was  largely an activity controlled by OBO’s project director and the  construction contractor who employed the commissioning agent, rather  than a third-party independent entity working for State. Department of  Energy (DOE) federal facilities commissioning guidance states that the  use of independent third-party commissioning agents is the most common  option used by federal agencies for conducting commissioning. The  guidance also states that for large projects with highly sophisticated  systems, the savings to the government by employing an independent  agent typically outweigh the government’s cost to obtain those  commissioning services. DOE further reports that using an independent  commissioning agent provides an independent judge, with a minimum  possible conflict of interest, and avoids instances when contractors  perform commissioning activities on their projects and evaluate their own  work. Some State officials further stated that the completion of the  commissioning tests may have been subject to pressures driven by OBO  officials wanting to complete projects on schedule and that in some cases  commissioning was not completed before staff moved into the NECs. OBO  officials reported that starting in 2008, State generally extended the  duration of NEC project schedules by 4 to 5 months, in part, to allow more  time for commissioning and transfer activities at the end of projects.
Some posts questioned the independence of commissioning agents that  were working for the construction contractor. Officials at the NEC in  Managua, Nicaragua, believe that OBO’s former commissioning process  resulted in many problems that post officials have had to resolve. For  example, they said post had to hire a contractor to fix problems with air  pressurization controlled by the building’s air handling and ventilation  system, which they said is due to the incorrect set up of the building  automation system. They believe there would have been fewer problems  after moving into the building had OBO used an independent  commissioning agent. In addition, in response to our written questions on  what could have been done differently to eliminate operations and  maintenance problems that occurred, embassy officials in Belmopan,  Belize, indicated that OBO should have hired an independent  commissioning agent, which they believe would have resulted in OBO  identifying many of the problems that post staff identified on their own  after occupying the NEC.
section_title: Several Posts Reported the Transfer of an NEC from OBO to the Post Resulted in a Lack of Information
paragraphs: In addition to commissioning issues, we found that at 11 of 22 NECs,  transferring of completed facilities from OBO’s on-site project director,  who managed the construction of the NEC, to posts and their facility  managers was not always well coordinated or without problems, resulting  in some information—such as preventative maintenance plans, operations  and maintenance manuals for building systems, and as-built drawings— either not being turned over to the maintenance staff or being incomplete.  In addition, officials at many posts reported that the training for NEC  maintenance staff to support effective operations and maintenance  activities is inadequate. OBO officials acknowledged there has been a wide  variance in the completeness and accuracy of construction contractors’  turnover documents. In particular, we found    6 of 22 posts had not received preventive maintenance plans;    8 of 22 posts did not receive as-built drawings that accurately reflect  details of the final construction; and    16 of 22 posts thought that the basic familiarization training on new  building systems provided by construction contractors to local facilities  staff, by itself, is insufficient to fully train staff.
Among the problems reported by post officials were cases when  maintenance plans were not fully loaded into the NEC’s computerized  maintenance management system. As a result of not having complete  information about system components (e.g., equipment make and model,  required maintenance, and location in the facility), facilities staff at three  posts we visited reported staff had to populate the incomplete  maintenance databases, an effort that required posts’ maintenance staff to  populate the databases themselves with information such as the location  of equipment, the manufacturer, and the required preventative  maintenance that needed to be undertaken on the systems. In Belmopan,  Belize, for example, post officials said that wiring diagrams for the  building automation system showing the connections between it and the  NEC building systems it controlled were not provided with the as-built  drawings. As a result, the facilities staff must use a trial-and-error  approach to determine how the system is configured, which makes it  difficult for them to respond in emergency situations.
section_title: State Revised Its Commissioning and Transfer Processes for Future NECs, but Issues with Completed NECs Remain
subsections: section_title: State Strengthened Its Processes for Commissioning and Transferring NECs and Made Organizational Improvements
paragraphs: OBO has recognized and taken action to address posts’ concerns regarding  issues related to past commissioning and turnover of the early NECs.  Senior OBO officials emphasize that while they believe that on-site project  directors fully enforced contract requirements related to commissioning,  there may have been some instances when commissioning by the  construction contractor was rushed. In 2008, OBO changed its process for  commissioning NECs; OBO now contracts with independent  commissioning agents to oversee the commissioning process on behalf of  the government and provide a more independent assessment of the testing  of building systems than State had in the past. In 2009, in briefing its  Industry Advisory Panel, OBO’s Director reported there was a disconnect  between OBO’s on-site project directors, who oversaw construction, and  posts’ facility managers with regard to expectations on system  performance and turnover documentation that resulted in instances of  each blaming the other for building systems’ problems. In recognition of  the organizational disconnect between those constructing the NECs and  those maintaining them, the OBO Director combined OBO’s Office of  Construction Management and its Office of Facility Management under a  single managing director to improve communication, coordination, and  efficiency related to both commissioning and turnover of completed  projects from OBO’s construction project directors to posts and their  facility managers. In addition, given issues with commissioning and  maintenance of fire protection systems, OBO’s Director removed the fire  engineers from OBO’s Office of Design and Engineering and assigned them  to OBO’s Office of Fire Protection. In written comments to us, OBO  officials reported those staff engineers did not have the direct authority to  prevent occupancy of NECs. According to the director of the Office of Fire  Protection, starting in January 2009, that office now has full authority for  overseeing commissioning tests of the fire protection systems in NECs and  provides the final approval authority on acceptance of those systems prior  to issuance of a certificate of occupancy that allows post to move into the  NEC. Furthermore, that office is organized so that staff conducting and  overseeing commissioning reviews and testing are fully independent of the  fire protection engineers who conduct the design and construction  reviews of the fire protection systems to support the on-site construction  project director. This is to ensure OBO’s fire commissioning officials are  not pressured by project director concerns related to completion  schedules and that they have an independent perspective on the project.
OBO has also made changes to the process it uses to transfer a completed  NEC to post. For example, in 2009 it established an NEC Transition  Program and a new Transition Division, with the intent to assign an on-site  Operations and Maintenance Transition Coordinator—6 months before,  and 6 months after an NEC opens—to assist posts, the project director,  and the incoming facility manager during the turnover to ensure, among  other things, that maintenance staff receive required maintenance  manuals, maintenance plans, and as-built drawings. The individual will  also serve as coordinator with OBO headquarters to assist post  management and the facility manager in resolving contractor punch lists  and warranty issues that may still be at issue after a post has moved into  the NEC and OBO’s project director has departed.
In 2009, OBO also updated its standard operating procedures governing  the responsibilities of all parties involved in the transfer of NECs from the  project director to the post facility manager and provided additional  guidance to smooth the transition process of NECs. OBO officials also  reported they now conduct a warranty inspection site visit approximately  8 to 11 months after construction to ensure all warranty-related issues  have been addressed before the contractor’s 1-year warranty period  expires. OBO officials report that NECs that are completed in fiscal year  2010 would be the first set of projects where the changes made to the  commissioning process should be evident and result in fewer issues after  posts move into the NECs.
section_title: Changes to the Commissioning and Transfer Processes Do Not Address Completed NECs
paragraphs: While OBO has taken action to change its commissioning process, the  changes do not address problems that resulted at NECs completed under  the old process. We note that DOE’s commissioning guide for federal  agencies states that federal facilities should be recommissioned every 3 to  5 years and that the costs associated with commissioning the systems  again—effectively a tune-up of the building—will typically be recaptured  in about 2 years as the tune-up results in energy cost savings. More than a  third of completed NECs are now nearly 5 years old, but OBO has not  undertaken any complete recommissioning of NECs despite the many  reported issues with some NECs’ building cooling, fire protection, and  other systems. While OBO has undertaken some limited recommissioning  on individual systems—such as systems in Beijing, China; Conakry,  Guinea; and Phnom Penh, Cambodia—one official noted that the problems  with one system sometimes have linkages to others. Industry  commissioning experts cite that, while some building owners (e.g., the  federal government) do undertake limited commissioning on existing  building systems, focusing on a single system does not typically result in a  facility that operates optimally overall; an integrated approach maximizes  positive results to ensure the building is operating efficiently and safely.  For example, the building cooling system may be affected by electrical  power conditioning problems. One OBO management official indicated  that he would like State’s goal to be to recommission NECs every 5 years  but further noted there is no established budget for recommissioning. In  our review of State’s Long-Range Overseas Maintenance Plan, we found  the plan did not include any proposed prioritization, schedule, or costs for  recommissioning completed NECs. OBO officials affirmed they are not  performing recommissioning on a 5-year basis and do not have a formal  plan to recommission NECs.
section_title: Several NECs Had Problems with Building Systems, Including Failures That Disrupted NEC Operations
paragraphs: More than half of the 22 NECs we reviewed have experienced problems  with operating critical building systems, which have resulted in the need  for projects to repair or replace some systems. The problems involved  three building systems, including NEC cooling systems, fire alarm systems,  and security doors and windows, and were common across many of the  NECs we reviewed. In particular, we found that    14 of 22 NECs had problems with their cooling systems—specifically the  chillers—not performing as intended, including failing completely;    16 of 22 NECs had false alarms or other recurring problems with the fire    16 of 22 NECs had problems with their forced-entry and ballistic-resistant  security doors or windows.
These problems, some that should have been caught during  commissioning, have caused varying levels of disruption to post  operations, ranging from nuisances caused by false fire alarms to  substantial disturbance resulting from chiller failures that have caused  flooding with damage to property and equipment.
subsections: section_title: Posts Have Had Numerous Problems with NEC Building Cooling Systems
paragraphs: According to a 2007 OBO study, NECs have experienced numerous failures  with the buildings’ cooling systems that are due to problems with the air  conditioning chiller units. The report shows that over 100 chillers, installed  since 2001, have either failed or experienced serious operating problems.  OBO identified 22 completed NECs that have experienced problems that  affected the proper operation of the units, including chiller failures. At the  NEC in Panama City, Panama, for example, post officials noted that one of  the chillers failed on several occasions, resulting in critical spaces being  flooded with water used within the cooling system and causing damage to  equipment. One post official further noted that to adequately address the  problem, major portions of the cooling system had to be redesigned and that  OBO is planning to replace the system in 2010. In 2009, OBO funded  emergency repairs of two chillers that failed in Conakry, Guinea, at a  reported cost of $250,000. In 2008, State’s IG reported that in Abuja, Nigeria,  chillers did not work properly for at least 2 years after the post opened. One  OBO official reported that a new chiller is planned to be installed in Abuja  sometime in 2010.
OBO officials identified that most chiller problems are associated with a  single manufacturer’s units and characterized some problems as “latent  defects,” meaning that the problems were not detectable at the time of  inspection and acceptance. Circuit board burn outs, refrigerant loss or  leakage, defective refrigerant valves, and compressor failures have led to  failures of the chillers. OBO reports that the manufacturer has addressed  some of the problems with the chillers during the one year warranty period.  However, our review of OBO reports found that some chillers have been  replaced prior to the units’ expected useful life, which is estimated to be at  least 25 years. Our review found that OBO has already identified a need to  replace chillers in Yaoundé, Cameroon (completed in 2005), and  Kathmandu, Nepal (completed in 2007). In interviews with OBO, the chief of  the mechanical engineering branch reported that OBO is starting to develop  a program to replace chillers where critical problems exist; however, OBO  does not yet have a clear idea of which posts will definitively need their  chillers replaced. OBO’s 2007 study estimated the cost to replace a single  post’s chillers to range from $500,000 to over $1 million.
Our review of OBO’s study on chillers found OBO’s mechanical  engineering branch was neither fully involved in the selection and  approval of chillers as proposed by the contractor nor the commissioning  of building cooling systems. In addition, OBO’s mechanical engineering  branch chief noted the NEC design specifications for chillers were “not as  tight as they perhaps could have been.” In some instances, he noted the  building cooling systems were oversized resulting in chillers not operating  properly. Those issues reveal that some problems State experienced were  not due solely to problems with the units but rather were also due, in part,  to problems with OBO’s internal processes. In addition, both OBO and  post officials have reported that local facilities staff at some posts may not  have the requisite technical skills to adequately maintain the chillers and  could have also contributed to problems posts experienced. An OBO  official reported that the design criteria for NECs prior to 2007 allowed  contractors to install either water-cooled or air-cooled chillers based on  life-cycle cost considerations. They further reported that maintaining  water-cooled chillers is challenging due to technical issues, such as having  to treat the water-cooled systems by using potentially hazardous  chemicals. In 2007, after learning of the problems that facilities staff had  maintaining the water-cooled systems, OBO changed its design criteria to  require air-cooled chillers to be installed in future NECs. OBO based its  decision on its conclusion that the units are less difficult to operate, in  part, due to not having cooling towers to maintain. OBO reported that  water-cooled systems will no longer be used in NECs, despite being  generally more cost effective with regard to energy use. OBO officials  believe there is no case where energy savings of using water cooled  chillers would outweigh the costs of maintaining those systems.
In addition to problems with chillers, we found evidence of other issues  related to the NECs cooling systems, including temperature control  problems, building air pressure issues, condensation on pipes and in  ductwork, mold, and inadequate cooling of computer server rooms. Some  of the contributing factors include design and installation issues and lack  of required preventative maintenance on the systems. (See figs. 13 and 14  for examples of problems we found that are related to the design,  installation, operation, or maintenance of the NEC cooling systems.)
Several posts we reviewed have experienced false alarms or other  repeated problems with operations of their fire alarm systems. These  alarms disrupt operations—particularly consular services and classified  operations—when post personnel need to cease activities and secure  classified materials and workspaces prior to evacuating the building in the  event of an alarm. Embassy officials in Sofia, Bulgaria, reported, for  example, repeated false alarms during the first 4 years of occupancy that  took several visits from OBO and contractor teams to troubleshoot and  resolve. In Yaoundé, Cameroon, officials reported they experienced four  false alarms per week and that OBO spent $120,000 on repairs to the NEC  fire alarm system. At one NEC, officials said the ambassador would  advise people he was meeting with that the NEC fire alarm system had  problems and they need not evacuate the building unless the public  address system indicated there was an actual fire incident.
In addition to false alarms, several NECs have had repeated problems with  fire alarm control panels, with illuminated “trouble” or “supervisory”  lights, or the sounding of an alarm on the panel that signals a problem with  the system. OBO fire officials report that the problems with the fire alarm  control panels are related to one manufacturer’s products that are  complex to operate and cannot easily be corrected by the maintenance  staff because of special tools and programming codes from the  manufacturer that are needed to troubleshoot and fix the problems. These  alarms can cause disruptions. For example, in Kigali, Rwanda, the General  Service Officer who oversees warehouse operations commented that the  fire alarm control panel in the warehouse routinely sounds an audible  alarm. The alarm is very loud and disturbing to warehouse staff. While the  alarm has been reset many times, she noted it has been an issue since the  facility was completed in 2008. During our visit, we found the panel had  both trouble and supervisory lights lit. Post facilities personnel noted they  have been waiting for nearly 8 months for OBO to find a solution. Figure  15 shows the fire alarm control panel at Kigali, Rwanda, which we  observed had warning lights indicating a condition in the system that  requires attention. Similar trouble and supervisory conditions were found  at some of the other posts we visited as well.
OBO fire officials report that while they assess most problems as being  minor in nature, they report there are some problems that are more  significant and require extensive troubleshooting by trained technicians.  Fixing the problems is complicated by most posts’ lack of qualified and  experienced staff to perform testing and maintenance of the complex fire  protection systems. As a result, OBO staff or contractors must be sent to  posts to resolve the problems. In discussions with OBO’s fire officials, they  noted they are aware of many of the past problems with false alarms and  are trying to address them; however, higher priorities to conduct final  acceptance testing on NECs under construction has slowed their ability to  respond to the problems as quickly as they would like.
section_title: NEC Security Doors and Windows Had Problems and Replacements Are Under Way
paragraphs: More than half the posts we reviewed have encountered problems with  their security forced-entry and ballistic-resistant doors and windows,  including problems with doors malfunctioning and window glass cracking.  State officials reported, as the NEC program grew and the demand for  security doors and windows increased, recurring problems with the doors  and windows became evident as projects were completed. Problems with  doors and windows relate to a combination of design, manufacturing, and  installation defects. For example, doors used in early NECs were fitted  with hinges that were incapable of supporting the door’s weight and prone  to premature failure, especially in high-traffic areas such as main lobbies  and the consular applicant waiting areas. Doors installed at NECs built  prior to 2005 also presented maintenance challenges because their design  specifications did not adequately allow for adjustment to keep doors  properly aligned in relation to the door frame and building structure. State  has revised its specifications to ensure the doors are installed correctly  and that they allow for future adjustment to properly maintain the doors.  Similarly, windows used at early NECs exhibited manufacturing defects  that contributed to their cracking, especially in locations with high  temperatures. Also, because some contractors were not experienced with  these products, doors and windows were not always installed correctly,  and as a result, did not operate properly after the facilities were occupied.
While OBO expects fewer problems with security doors and windows in  the future because of improvements made to design specifications,  manufacturing processes, and installation techniques, it is systematically  managing efforts to repair or replace defective doors and windows at  several existing NEC locations. For example, in Yaoundé, Cameroon,  OBO reports that it funded a project to replace 24 doors at a cost of  approximately $840,000. In Kathmandu, Nepal, 30 windows cracked  shortly after the NEC opened in 2007, and post officials report OBO is  planning to replace them. Going forward, our review shows that OBO  plans to repair or replace security doors and windows in at least 16  additional NEC locations at a total estimated cost of $25 million (see figs.  16 and 17). While some replacements are reported by OBO officials as  being driven by an increase in the security standards since the NECs were  completed, it is unclear the extent to which replacements are also due to  poor performance of those products or deficiencies in the design criteria  for the doors in early NECs.
section_title: State Has Taken Steps to Avoid Future Problems with Building Systems
paragraphs: As previously discussed, State has a lessons learned process that examines  issues and problems with past projects so as to inform future designs of  NECs. OBO officials have acknowledged the numerous issues posts  reported, such as problems with building cooling systems, fire alarm panels,  and security doors and windows. We found that OBO has taken action to  change the SED design and contract requirements that govern future NECs  with regard to all three of those building systems. Table 5 outlines some of  the changes that have been made through the lessons learned program to  avoid the problems that exist with the underperformance or failure of  building systems in earlier NECs; however, due to the time required to  contract and construct NECs, it typically takes 4 years before these changes  are evident in completed NECs. While changes to SED design criteria for  future projects do not resolve problems with completed NECs, interviews  with OBO officials and our review of State’s LROMP show evidence that  OBO is trying to address some of the problems with chillers and security  windows and doors through planned replacement projects, a few of which  have already been completed. OBO fire officials are also working with posts  to develop maintenance contracts to assist in troubleshooting maintenance  problems with NEC fire alarm systems.
section_title: State Faces Challenges in Hiring and Training NEC Facilities Staff and Lacks a Plan to Fully Address Challenges
paragraphs: State has experienced problems in hiring U.S. Foreign Service facility  managers and the locally employed maintenance staff that possess needed  technical skills to operate and maintain the NECs. In addition, the local  maintenance staff need more training on operating the sophisticated NEC  building systems. As a result, facilities may be operating suboptimally and  important maintenance activities may be compromised, leaving NECs at  risk of not performing as expected. We found that State’s LROMP does not  identify costs or a schedule to address the training needs of local  maintenance staff to ensure the investment in NECs is protected. If State  cannot hire enough facility managers and local maintenance staff with the  technical skills and qualifications needed to understand the NEC building  systems and also train the local facilities staff responsible for operating  and maintaining those sophisticated systems, State puts at risk the  investment made in those NECs, the safety of the people operating and  working in the facilities, and the ability of U.S. government employees to  conduct their work.
subsections: section_title: State Faces Challenges Hiring Qualified U.S. Foreign Service Facility Managers and Local Maintenance Staff
paragraphs: State officials reported that, based on sophisticated building systems  installed in NECs, State’s hiring criteria needed to be strengthened for U.S.  facility managers and, further, hiring appropriate staff has proven to be a  slow process. Specifically, State now requires that newly hired facility  managers have a degree in facilities management or a related engineering  field. OBO currently has approximately 170 facility managers, of which  approximately 145 are assigned to overseas posts and some facility  managers have regional duties supporting more than one post; however, to  meet its intent of placing specially qualified facility managers at every  large embassy and consulate worldwide, OBO is undertaking a long-term  recruitment and hiring effort. OBO officials reported a goal to hire 20  facility managers in fiscal year 2009, 20 in fiscal year 2010, and 24 total for  fiscal years 2011 to 2015. However, OBO has fallen short of achieving its  hiring goals. In fiscal year 2009, for example, OBO reported that it hired 11  facility managers (i.e., just over half of its goal), and as of May 2010, OBO  had hired a total of 6 facility managers relative to its fiscal year 2010 goal  of 20. Some of the challenges and delays in hiring were due to the process  of developing new position descriptions that require facility managers to  have a degree in facilities management or a related engineering field, and  working with State’s human resources department to get those new  qualifications requirements approved.
Overseas posts are responsible for hiring locally employed maintenance  staff and sometimes face challenges hiring individuals with the technical  skills and experience required to operate NECs’ complex systems. OBO  officials report a key issue with NEC maintenance, which they believe has  contributed to the problems with some systems, is that posts have not been  able to hire appropriately qualified local staff. OBO provides individual  posts with a recommended maintenance staffing plan and advises posts  that, because NECs are large and have sophisticated building systems, posts  should be prepared to hire additional staff to properly support the  maintenance needs when an NEC opens. State’s IG, in surveying posts with  NECs about whether they had hired the required maintenance staff, found  that several did not hire the required maintenance staff due to budget  constraints or had not hired them by the time the NEC initially opened.
As noted previously, local staffing costs at NECs increased by  approximately $200,000, on average, at 10 posts we reviewed because of the  need to hire additional local maintenance staff. State’s Inspector General  reported that the level and quality of maintenance services appears to be  determined by available ICASS funds rather than need, and a few posts  reported concerns that ICASS budgets did not keep pace with increased  NEC staff needs. Some posts also reported that it can be difficult in some  less developed countries to find qualified maintenance technicians to hire.  OBO officials reported to us that part of the reason why posts face problems  hiring local maintenance staff in a timely manner is these additional  positions must be approved by other agencies located at the post through  ICASS. OBO officials also indicated that in some cases, the salaries needed  to get qualified technical staff—such as a building automation operator— have created difficulties for posts when it would require paying the new hire  more than senior local staff in other offices within the embassy.
To address hiring challenges related to facility manager positions, OBO  officials report they are reaching out to industry facilities management  associations and universities to increase the number of potential  applicants that apply for the positions. As we reported, State did not meet  its fiscal year 2009 goal for hiring new facility managers and may not meet  its goal for fiscal year 2010. Starting in 2009, OBO reports that the new  Operations and Maintenance Transition Coordinators assigned to each  project will assist posts’ management officials in hiring additional local  maintenance staff as needed; however, OBO officials reported that the  approval and hiring of local facilities staff, to include setting salaries,  remains an ICASS decision and is not under OBO’s control.
section_title: State Faces Challenges in Training Maintenance Staff to Operate and Maintain the NECs
paragraphs: State officials report that prior to 2008, the department had not focused on  training and career development needed for its facilities maintenance  personnel. While State had provided training in the areas of management  and leadership for facility managers, there was no formal training program  available that provided technical training on the sophisticated NEC  systems and State policies governing overseas facility management in an  embassy environment. In addition, there were no training programs for  local maintenance staff. State has started to take action to address some of  the challenges, but OBO officials report those actions will not fully address  the needs of local maintenance personnel. In 2008, OBO developed a  training program for State’s facility managers. Unlike local maintenance  staff, OBO officials report they are directly responsible for training and  career development for facility managers. OBO officials recognized the  need to provide more training for facility managers and report that newly  hired facility managers now attend courses at the Foreign Service Institute  and receive specialized training in areas such as (1) building automation  systems; (2) heating, cooling, and ventilation systems; and (3) fire  protection systems. In addition, facility managers receive training on  overseas facilities management related to specific State regulations  governing maintenance budgets and the maintenance protocols for  classified areas.
Training of the local maintenance staff remains a problem. As noted  earlier, the basic familiarization training provided by the NEC construction  contractor during the time of commissioning and prior to transfer is not  sufficient by itself to fully train the local maintenance staff on the building  systems. As a result, operation of building automation systems, in particular,  has been challenging for posts. Our review of OBO reports and interviews  with posts show that 14 of the 22 NECs we reviewed encountered problems  with operating building automation systems. For example, embassy  officials in Kigali, Rwanda, report that personnel will have difficulty learning  enough programming on the system to facilitate programming replacement  components in the event the original components fail; they report that  emergencies may not enable post to wait for a service contractor or OBO to  travel to post to troubleshoot or fix problems. One of State’s contractors  noted that sufficiently operating and maintaining the building automation  system is challenging, since it requires training and knowledge of both  mechanical engineering and advanced computer programming. He reported  that at some NECs he finds sensors, controllers, and equipment that have  been shut off by facilities staff who have not had adequate training on the  systems and may not understand the implications when components are  merely turned off. For example, shutting a component down may restrict  fresh air being provided to a closed office.
We found that State’s LROMP does not identify needed resources and  costs to meet the training needs of local maintenance staff at NECs. OBO  officials recognize that NEC building systems require extensive training to  operate. OBO officials also recognize that if the local maintenance staff are  not trained properly, the condition and operation of the NECs will be  affected; however, OBO officials report they do not receive funding to  train overseas maintenance staff, as it is an ICASS responsibility.  Regardless, in 2009, OBO took some initial action to address some of the  training deficiencies of local maintenance personnel and reported that it  would be providing posts’ local staff with access to online training in areas  such as water and wastewater treatment, environmental security  protection systems, building automation systems, and work order  management. However, two of these courses came online only recently  and one is still in development; therefore, the action is too recent to assess  in terms of the number of staff trained and the effectiveness of the  training. OBO officials also reported that they have just begun  discussions with a facility management training provider to explore if they  can develop facility maintenance courses that could be made available to  posts’ local staff. Again, the actions are too recent to assess in terms of  their effectiveness.
According to State officials, they are trying to compensate for the lack of  technical skills of the local staff through the use of regional maintenance  programs and posts’ maintenance service contracts; however, that may not  be the most cost-effective solution. For example, State’s IG reported that the  U.S. embassy in Abidjan, Cote d’Ivoire, did not have trained personnel to  maintain the critical elements of the NEC’s heating and cooling systems and  that post had to bring in a contractor from South Africa for emergency  repairs at a cost of about $9,000 per visit. OBO officials reported they are  exploring the idea of making use of OBO’s facility managers to act as  trainers to control costs as OBO does not have dedicated funding to train  posts’ local maintenance staff. According to OBO officials, some of OBO’s  efforts to provide more training to local maintenance staff are being funded  out of existing NEC project funds. Starting in 2009, OBO began to set aside  0.1 percent of NEC project funding—which would equate to $100,000 on a  $100 million NEC project—to provide additional training, but OBO officials  acknowledged it alone will not be sufficient to fully train local maintenance  staff. OBO officials further noted that, while ICASS should normally fund  the training of local staff, OBO is funding what it can to try to address some  of the local staff training needs.
section_title: Conclusions
paragraphs: State has built 52 NECs that are more secure, safe, and functional for U.S.  government personnel working overseas. Constructing such facilities that  meet stringent requirements, such as building codes, security standards,  and energy-efficiency goals, has been a significant undertaking requiring  billions of dollars and sustained effort over nearly 10 years. However,  State has encountered a number of challenges in building NECs that are  the appropriate size for immediate and long-term staffing levels and in  planning for the increased operational and maintenance needs of these  new, technologically sophisticated buildings. As a result, State has had to  build additional office space at some locations, and may need to construct  more, and has also faced higher operating, maintenance, and repair costs.
Currently, the process to determine the size of an NEC does not allow  enough flexibility to ensure that NECs have sufficient space to  accommodate staffing changes related to ever-shifting foreign policy  priorities. State has not analyzed post-specific characteristics in completed  projects that have been associated with rapid staff growth, such as  geographic location, nor have officials been able to explain the analytical  basis for determining the amount of growth space to include in building an  NEC. In addition, overseas officials have found that the design of some  spaces does not fully meet functional needs. While State has been able to  identify and address certain design issues, identifying these design  problems earlier, by, for example, conducting timely post-occupancy  evaluations in accordance with State’s plans, is crucial to avoid similar  problems in future NECs. Since State expects NECs to support U.S policy  efforts for several decades, it is important that the facilities are large  enough to safely and securely house the changing number of overseas staff  in a manner in which staff are able to effectively carry out their missions.
State has not fully addressed the increased operations and maintenance  requirements of the more technologically sophisticated NECs. Problems  with commissioning and transferring the NECs from the contractors to the  posts have resulted in some building systems that do not function as they  should and led to added costs to repair and replace systems, contributed to  higher operating costs, and created potential safety risks for staff. State has  made changes to building design requirements to avoid future problems  with NEC building systems. However, since changes can take at least 4  years to materialize in completed NECs, due to time to contract for and  construct NECs, the changes are too recent to assess. State does not have a  formal plan to recommission, or retest, the building systems at NECs that  have already been completed. Recommissioning NECs would help ensure  that the systems operate as efficiently as possible and that the problems  with building systems are being fully addressed. State’s recent LROMP  outlines—for the first time—NEC maintenance costs over a number of  years and identifies the need for improvements in future editions, but it does  not establish a time table for when specific projects should be completed  which would help to further strengthen the planning process. In addition,  the LROMP is focused solely on maintenance costs and does not address  operating costs, resulting in an incomplete assessment of all costs  associated with the functioning of NECs. Finally, without a plan that  comprehensively outlines all human resources required to operate and  maintain NECs, including identifying hiring and training needs, State will  have difficulty ensuring NECs operate in an efficient and cost-effective  manner. As State continues building NECs and strives to maintain those  already constructed, addressing these challenges is important to provide  U.S. employees with a secure and dependable working environment and  ensure that State protects the country’s investment in these facilities.
section_title: Recommendations for Executive Action
paragraphs: In order to strengthen the operations of the extensive U.S. program that  provides for new embassy compounds around the world, we recommend  that the Secretary of State take the following six actions.
Take steps to improve the process for determining the appropriate size for  an NEC, including reassessing the analytical basis for projecting future  staffing levels and determining how much growth space is allocated.
Ensure that OBO conducts post-occupancy evaluations of completed  NECs as planned.
Develop a plan to recommission those NECs completed before 2008 to, for  example, resolve any problems posts may still have with building systems,  and ensure that the operating costs are not being incurred unnecessarily as  a result of building systems that are not operating as efficiently as intended.
Identify time frames for implementing the maintenance projects that are  outlined in the LROMP.
Expand on future editions of the LROMP to include reporting on operating  costs to allow for a more complete assessment of the costs to maintain  and operate NECs.
Develop a human resource plan that addresses the requirements and cost  implications for hiring required NEC facilities maintenance staff and  sufficiently training the local maintenance staff.
section_title: Agency Comments
paragraphs: We received written comments on a draft of this report from the  Department of State. State said that the report contains helpful input about  its program to build NECs which State will use to further its efforts to  improve the efficiency and effectiveness of its operations. State concurred  with our principle findings, conclusions, and recommendations. For  example, State wrote it will work to identify time frames for implementing  the LROMP maintenance projects, develop a system to compile and report  on operating costs, and undertake human resource planning to hire and  train local maintenance staff. State further outlined specific actions that  begin to address our recommendations in a few instances. For example,  State said it is currently conducting post-occupancy evaluations at three  posts and plans to evaluate at least six more by the end of 2010. In  addition, State said it is conducting two pilot recommissioning studies,  and plans to conduct two more studies in fiscal year 2011 if funding is  available. State provided additional clarifying and technical comments on  a number of points, which we have incorporated throughout the report, as  appropriate. Many of State’s comments we had already acknowledged in  our report. State’s complete comments, along with our responses to  specific points, are reprinted in appendix II.
We are sending copies of this report to interested congressional  committees. We are also sending copies of this report to the Secretary of  State. In addition, this report will be available at no charge on the GAO  Web site at http://gao.gov.
If you or your staff have any questions about this report, please contact  Jess T. Ford at (202) 512-4268, fordj@gao.gov, or Terrell G. Dorn at (202)  512-6923, dornt@gao.gov. Contact points for our Offices of Congressional  Relations and Public Affairs may be found on the last page of this report.  Other GAO contact and staff acknowledgements are listed in appendix IV.
section_title: Appendix I: Scope and Methodology
paragraphs: The objectives of this report were to examine (1) the extent to which new  diplomatic facilities match the space and functionality needs of overseas  posts and the actions State has taken to address any space and  functionality challenges; and (2) operations and maintenance challenges at  these new facilities and State’s steps to address them.
Our scope included new facilities Overseas Buildings Operations (OBO) refers to as New Embassy  Compounds (NEC), New Consulate Compounds, and New Office  Buildings. In addition, we included a Acquired B intended to locate all U.S. governmen location. We inclu fiscal year 1999 and were comp  at 44 posts that State’s Bureau of  ny facility OBO refers to as a Newly  uilding if the purchase and renovation of such a facility were  t employees at a new and single  ded all posts for which construction began in or after  leted by September 30, 2009.  o obtain information on space, functionality, and operations and  T maintenance challenges identified at NECs within our scope, we reviewed  State’s 2008 Revalidation Look Back Study, which identified issues and  problems, as well as successes, with regard to the planning, design,  construction, and maintenance of the new facilities. The study took place  between August and October 2008 and identified 23 challenges as frequently  occurring throughout completed NECs. We also conducted interviews with  officials at OBO and State’s regional bureaus and reviewed other  documentation, including the State Inspector General’s (IG) inspection of  OBO; IG post inspection reports; posts’ responses to a March 2008 IG  satisfaction survey; posts’ lessons learned cables; rightsizing reports; and  post-occupancy evaluations of some completed projects.
To obtain more detailed information on space, functionality, and  operations and maintenance challenges, we reviewed 22 NECs, or one-half  of the posts within our scope, in greater depth. We selected these posts  based on interviews with regional bureau officials, reviews of rightsizing  reports and 2008 staffing data, OBO and OIG reports on embassy  operations and maintenance issues, OBO’s Revalidation Look Back study,  and past GAO reviews of the NEC program.  In addition to selecting posts  with many identified space, functionality, and operations and maintenance  problems, we also selected some posts with few identified problems to be  able to analyze a range of experiences. Geographical diversity of posts and  project type were also factors in determining which posts to contact.
Of the 22 posts we reviewed in greater depth, we conducted site visits at 8  posts and conducted teleconference interviews with 14 posts.  In addition  to contacting officials at each post, we interviewed officials at the regional  bureaus in Washington to obtain information on space, functionality, and  operations and maintenance challenges at posts that we were unable to  contact, as well as to gain further insight on how these challenges affect  their respective regions as a whole.
Table 6 lists all 44 NECs within our scope and identifies those we visited  or interviewed via teleconference.
To assess the extent to which initially constructed desk space matched  co posts’ current desk space needs, we  mpared State data on the number of  at each post with desks originally built  each post’s 20 positions, as reported in  the purposes of determining each over Capital Security Cost Sharing program for all 44  We interviewed knowledgeablh data sources were sufficiently reliable for our  with the 22  and determined that bot purposes. However, we identified a in agenci not be comple and subsequ posts; (3) the as-built data may not have d (4) the curre construction and do not include planned growth space; an staffing data report auth if all positio our checks f most of which, in our ju In addition,  Policy, Right respective roles in planning for the s  current authorize 09 submission  seas agency’s charg  our scope.  iewed our analysis  posts we interviewed, OBO, and each of the regional bureaus  cluding: (1) in a small number of cas es, current staffing data es, particularly the U.S. Agency for International Development, may  tely accurate; (2) the dat ent changes may have occ a are based on a  urred that altered th s made during  nt  e post’s total need  orized position ns were filled, but some po ound only a small number dgment, had lit we interviewed officials at s representing th sitions may not be f  of Management  sizing, and Innovation (M/PRI) and OBO to discuss their   of inaccuracies in eit tle impact on our ov  State’s Office erall findings. ce needs of NECs.
To examine functionality challenges, we asked officials at the 22 posts we  contacted open-ended questions about functionality concerns. We then  summarized functionality challenges that were commonly identified  during our interviews and site visits. These ranged from the amount of  controlled access and noncontrolled access space available at NECs to  issues with the NEC’s quality-of-life facilities. Our methodology may not  have captured all costs we reviewed, ed at all of the phallenges experienc as post officials ms they deemed to ted the challengeight have only repor be most significant.
To analyze challenges found in operating and mai quantified common challenges found a based on off and site visit reports and the Revalidation Look-Bac from proble windows to  contractor and OBO to the posts. Our methodolo a  we contacted,  icials’ responses to open-ended questions in our interviews  s, as well as our review of documentation, including State IG  k study. These c ms with forced-entry and ballistic-resistant doors and  the process of turning over the NEC from the construction  gy may not have captured  ll challenges experienced at all of the posts we reviewed, as post officials  might have only reported the challenges they deemed to be most  significant.
In addition, we analyzed operations and maintenance cost data from 10  NECs opened in fiscal years 2007 and 2008. We asked officials to pro vide  fiscal year 2009 data on operating expenses (e.g. cost for utilities such aselectric, gas, water, and sewer as well as other costs like grounds keeping and janitorial services), costs for maintenance service contracts (e.g.  elevator service contract), and the cost of hiring additional facilities  maintenance staff (e.g. building automation system operator) for the We also asked for data on each of these expenses for the last full fiscal  year in which the post operated from its previous facilities. Because these  NECs were completed recently, inflation and other time-related issues,  such as price changes, did not play a significant factor in our comparison  of 2009 costs at the NECs with the last full year of operation in the  previous facilities, and thus the reported cost are not adjusted for inflation  or currency fluctuations. We discussed potential discrepancies in the data  with post officials and tested the data for internal consistency. Although in some cases, posts may or may not have included utilities costs for leased NEC.  facilities, we determined that unreported utility costs for leased facilities  would not materially impact our findings. We determined the data we sufficiently reliable for the purpose of demonstrating that the operatin costs of the 10 NECs were substantially higher than the co facilities they replaced. Due to concerns about OBO having complete and  accurate data on posts’ expenses, we obtained the cost data directly from  posts.
Finally, to identify actions State has taken to address space, functionalit and operations and maintenance challenges, we interviewed State offici at OBO, the regional bureaus, and M/PRI. In addition, we reviewed  documentation of programs or initiatives that State has developed to  address identified challenges.
section_title: Appendix II: Comments from the Department of State
paragraphs: The following are GAO’s comments to the Department of State’s letter  dated June 28, 2010.  1.  We do not dispute that NEC maintenance costs may be in line with  those for similar facilities as suggested by OBO’s analysis. Rather, our  intent in comparing operations and maintenance costs of NECs to  those at the facilities they replaced is to show that because of their  larger size and the increased complexity of building systems, among  other factors, NEC operations and maintenance costs are higher. Our  analysis of utility costs indicates, for example, that NECs have a  comparatively higher utility demand than previous facilities and pay  correspondingly higher amounts for utilities. As the higher costs to  operate and maintain NECs present long-term budget implications, we  believe it is important for State to continue its efforts, as it has begun  to do with the recent development of its Long Range Overseas  Maintenance Plan (LROMP), to comprehensively plan for the long-term  resource requirements necessary for protecting its investment in  NECs. 2.  We acknowledge that NECs provide an improved level of safety  compared to the facilities they replaced. However, the intent of our  discussion is to convey that safety concerns, particularly concerning  the operation of fire protection systems, were apparent at some of the  earlier NECs as a result of deficiencies with the commissioning  process. For example, OBO’s Office of Fire Protection reported that  some early NECs were occupied without the correction of critical  deficiencies affecting operation of their fire protection systems, a  situation that we believe would not have occurred if commissioning  had been properly conducted. Because of the paramount importance  of safety, we believe it is necessary to report on issues that potentially  result in reduced safety levels. 3.  We support State’s intention to place greater emphasis on proactive  analysis and objective comparison. State concludes that its analysis of  the 16 NECs planned since the inception of M/PRI, many of which are  still under construction, indicates that “the problem of inadequate  office space is gradually being resolved.” However, State’s analysis  does not clearly demonstrate whether these NECs match the space  needs of overseas posts. For example, State’s analysis includes all  positions at overseas posts and does not distinguish between those  positions that require office space in the NEC (referred to in our report  as “desk” positions) and those, such as warehouse or maintenance  personnel, that do not. While such an analysis could be appropriate for  determining whether the rightsizing process is resulting in greater  accuracy projecting overall staffing levels, it is does not provide a clear  picture of whether the amount of office space that was planned for the  NECs is adequate for current office space needs.
In addition to having concerns that State’s analysis may not provide a  clear assessment of space requirements, we also believe that the  results of State’s analysis do not indicate that NECs planned under  rightsizing will face fewer space challenges than their predecessors.  For example, State’s analysis of all positions shows that 7 of the 16 (44  percent) NECs planned under rightsizing have at least 5 percent m staff than were included in the initial projections, even though none o the NECs planned under rightsizing is more than 3 years old and ma are still under construction. Our analysis of 44 completed NECs  showed that over half have current desk space needs that exceed the  nally,  amount of desk space constructed by at least 5 percent. Additio we found that 4 of the 6 NECs completed since the inception of M/PRI  had current staffing levels that exceeded constructed desk space b more th analysis support our finding that many NECs have already run out of  desk space and, therefore, the planning process might benefit from  additional analysis of the relationship between post-specific  characteristics and staffing growth.  an 20 percent. We believe that both our analysis and State’s  4.  We acknowledge OBO’s intention to revise the growth factor formula which would provide additional space in NECs. However, this does n address our concern that OBO has not provided any analytical basi demonstrate that a growth factor of 10 percent, applied uniformly  across all projects, is appropriate.  5.  We support State’s initial effort in taking action to identify and  prioritize its maintenance needs as d the LROMP. Establishing a timeline concurrent with availability of  funds would provide greater transparency for projects to be initiated  during a specific funding period. However, we also believe State  should consider outlining notional implementation time frames for  requirements identified over each of the future budget years covered ocumented in its first edition of  by the LROMP, including those years for which future funding is not certain. By identifying notional time frames, based on forecasted  budget scenarios and not solely on available funds, we believe State  will be better able to demonstrate whether the plan can effectively be  resourced by future anticipated budget scenarios or whether  maintenance requirements potentially exceed likely funding scenarios.  We believe such an approach would strengthen State’s efforts to show  how timely investments in maintenance can protect the multibillion dollar investment State is making in constructing NECs. 6.  We support OBO’s efforts in developing first-year  stimates for NECs when they open. However, we still maintain State  e needs to develop an assessment of future operating costs that is  included in the LROMP. A plan that outlines future operating costs is  particularly important since, as our analysis shows, the operating co at NEC posts have clearly increased relative to the facilities they  replaced. By developing estimates of future years’ operating costs and  combining those with estimates of future maintenance costs that State  has already outlined in its LROMP, we believe State will have a more  complete assessment of the financial resources that State and other  contributing agencies will need in future budget years to operate and  maintain overseas facilities.
7.
We maintain that State needs a human resources plan for NEC  facilities maintenance staff, regardless of the funding mechanism. Such a plan, that addresses cost implications for hiring and training  necessary staff, could assist State in better identifying the necessary  financial resources and planning to address resource limitations.
section_title: Appendix III: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
paragraphs: Jess T. Ford, Director, International Affairs and Trade, (202) 512-4268 or  fordj@gao.gov  Terrell G. Dorn, Director, Physical Infrastructure, (202) 512-6923 or  dornt@gao.gov.
section_title: Staff Acknowledgments
paragraphs: In addition to the individuals named above, Leslie Holen, Assistant  Director; Michael Armes, Assistant Director; John Bauckman; Sam Bernet; Raj Chitikila; Kalvin Jenhung Lo; Kara Marshall; Christina Werth; and  Richard Winsor made key contributions to this report. In addition, Joe  Carney, Martin de Alteriis, Mark Dowling, and Faye Morrison provided  technical or legal assistance.