Overseas Presence: Rightsizing Is Key to Considering Relocation of Regional Staff to New Frankfurt Center
Published: 2003-09-02T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The State Department plans to spend at least $80 million to purchase and renovate a multibuilding facility in Frankfurt, Germany. The facility, known as Creekbed, is scheduled to open in mid-2005. The project is a key rightsizing initiative under the President's Management Agenda to reassess and reconfigure the staffing of the U.S. overseas presence. Creekbed is expected to achieve the department's major rightsizing and regionalization goals. The Office of Management and Budget expects the project to serve as a model for developing other regional centers. GAO was asked to determine whether State fully examined the potential for relocating regional staff from outside Germany to Creekbed.
section_title: What GAO Found
paragraphs: The Department of State indicated it is currently renewing earlier efforts to relocate staff from outside Germany to the new Frankfurt regional center. State said it would pursue a rigorous rightsizing and regionalization strategy in staffing the Frankfurt facility. State prematurely stopped its earlier efforts to relocate regional staff from other posts in August/September 2002 because staffing planners interpreted space planning estimates as indicating that the regional center would be fully occupied. However, according to GAO analysis, the facility was not full and significant additional space existed. After touring the facility and studying staffing requirements and space allocated for specific agencies, GAO found there was space available for additional staff. Successfully staffing the Frankfurt regional facility has the potential to optimize its use and achieve broader regionalization objectives.

section_title: Letter
paragraphs: The Department of State plans to spend at least $80 million to purchase  and renovate a 23-acre, multibuilding facility in Frankfurt, Germany. This  facility, called Creekbed, is scheduled to open in mid-2005 and, when  completed, will be the largest U.S. diplomatic facility overseas. As stated  in State’s business plan to purchase the facility, Creekbed will provide  office space for staff currently working at the primary U.S. consulate  building in Frankfurt, five nearby office annex buildings, and offices  located at the Rhein Main Air Force Base near Frankfurt; some staff  currently located at the U.S. embassy in Berlin, Germany; and a substantial  number of regional staff currently assigned to other embassies who could  be relocated to take advantage of the security that Creekbed will provide.  The project is a key initiative under the President’s Management Agenda  to reassess and reconfigure, where appropriate, the staffing of U.S.  embassies and consulates. In congressional testimony, State officials have  noted that the project is expected to achieve the department’s key  rightsizing and regionalization goals. According to the Office of  Management and Budget (OMB), the project is also expected to serve as a  model for future efforts to expand the use of regional centers to conduct  embassy and consular operations.
As you requested, this report discusses whether the Department of State is  actively pursuing the potential for relocating regional staff from outside  Germany to the new Frankfurt regional center. To perform our work, we  reviewed State planning documents and met with State Department  officials in the Bureau of European and Eurasian Affairs, the Bureau of  Overseas Buildings Operations (OBO), and the Office of Management  Policy. We also visited the Creekbed facility and agencies in Frankfurt that  will be housed in the facility. In addition, we made brief visits to U.S.  embassies in Paris, Rome, Budapest, and Vienna to determine what  actions they had taken to identify staff who could be considered for  relocation to the Frankfurt facility.
subsections: section_title: Background
paragraphs: The Creekbed facility was built in 1937 as a German air force hospital. The  U.S. military acquired it at the conclusion of World War II and used it as a  hospital until the late 1990s. The facility was slated to revert to the German  government in 2000. From 2000 to 2001, State conducted discussions with  the German government to acquire the property. In July 2002, Creekbed  was officially transferred from the German government to the State  Department for a cost of $30.3 million. Since July 2002, OBO has been  determining which renovations, including security and safety  enhancements, will be necessary to prepare the facility to house the U.S.  government’s Consulate General in Frankfurt. The design and renovation  cost for the facility is estimated at $49.8 million, bringing total project  costs to an estimated $80.1 million. State estimates that, if Creekbed had  not been available, acquiring a site and building a comparable facility to  meet U.S. government needs in Frankfurt would have cost roughly $260  million.
The facility consists of 13 major interconnected buildings that will provide  325,000 square feet of usable office space. In addition, an 85,000-square- foot warehouse will be built on the property. The site also contains  significant areas of land that can be used for construction and future  expansion of operations if necessary. OBO stressed that the renovation  will focus on building a perimeter wall, warehouse, and access controls;  and performing basic renovation, such as painting and installing upgraded  wiring. OBO does not plan to tear down walls, install air conditioning, or  do other extensive work. Renovation of the facility is scheduled from  September 2003 to March 2005.  State projects that by mid-2005, Creekbed  will be fully operational.
According to State’s business plan to purchase the facility, the Creekbed  project had four fundamental objectives. First, the renovated facility  would provide secure office space that is a vast improvement over security  afforded by existing facilities in Frankfurt. Second, Creekbed would  provide space for operations currently located at the Rhein Main Air Force  Base, which the U.S. government has agreed to vacate in 2005 and return  to the German government. Third, Creekbed would provide office space  for staff currently working at the U.S. embassy in Berlin who will not have  space in the new U.S. embassy building that is scheduled for construction.  Finally, Creekbed has space to accommodate a number of regional staff  from outside Germany who are assigned to embassies and consulates with  security vulnerabilities. In its business plan, State identified several  agencies from outside Germany that would be considered for relocation to  Frankfurt. According to State, the Consul General in Frankfurt, and  officials at each of the agencies in Frankfurt that we visited, Frankfurt is  considered a good location as a regional hub because of its location and  transportation links. They also noted that many of the offices currently  assigned to the U.S. consulate have regional responsibilities.
Developing the Frankfurt facility as a regional center is consistent with  recommendations of the Overseas Presence Advisory Panel calling for use  of regional centers and relocation of personnel to reduce security  vulnerabilities at overseas posts. It is also consistent with a rightsizing  framework we developed to support decision-making on overseas staffing.  The framework encourages decisions to be based on a full consideration  of the security, mission, and cost factors associated with each agency’s  presence and outlines rightsizing options, including regionalization of  operations.
OMB also cited this project as allowing U.S. agencies to put in one central  location appropriate administrative functions now performed in multiple  posts around Europe and beyond. Furthermore, the House Conference  Report for the Consolidated Appropriations Resolution 2003 stated that  the conferees support “the Department ’s effort to initiate a  consolidation, streamlining and regionalization of country and multi- regional staffing in Frankfurt, Germany.” The report also said, “The  success of this initiative will be measured largely by the staffing  reductions made possible at less secure locations throughout Germany,  Europe, Eurasia, Africa and the Near East.”
section_title: State Indicated It Has Renewed Efforts to Identify Staff for Relocation from Posts Outside Germany
paragraphs: State indicated it has renewed its efforts to identify staff from posts  outside Germany who could be relocated to the new Frankfurt regional  center. According to State, this process will consider rightsizing factors  such as security, mission requirements, and costs as well as possible  changes in functions that would make operations more efficient. State’s  earlier efforts were prematurely halted in August/September 2002 because  staffing planners mistakenly interpreted space planning estimates as  indicating the regional center would be fully occupied. However, in May  2003, we analyzed State’s staffing requirements for Creekbed in relation to  the facility’s capacity and found additional space was available. We briefed  both State and OMB officials on the capacity issue. OMB urged State to  reopen the staffing process and to consider relocating more regional staff  to Frankfurt.
subsections: section_title: State’s Renewed Process for Staffing Creekbed
paragraphs: In May 2003, State announced that it had restarted a process to identify  staff from posts outside Germany who could be relocated to take  advantage of Creekbed’s available office space and enhanced security.  State is reassessing the facility’s space plans and staffing projections for  all agencies and is focusing on identifying which additional regional  activities might be moved to the Frankfurt center, especially where this  action would improve security for U.S. government personnel. State also  indicated that it would pursue a rigorous rightsizing and regionalization  strategy in staffing the Frankfurt facility. State has said that under its new  effort, it will analyze security, mission, and cost factors associated with  each agency’s regional operations at posts in Europe, Eurasia, Africa, and  the Near East. On June 12, 2003, State sent formal guidance to the  ambassadors at each post, directing them to identify staff who might  transfer to the regional center in Frankfurt. To help the posts identify  positions for relocation, State plans to conduct a detailed, Web-based  survey based on our rightsizing framework. State plans to have revised  staffing estimates for Frankfurt at the end of 2003.
The Frankfurt facility will have a capacity of about 1,100 desk positions.  The facility will have sufficient space to consolidate existing diplomatic  operations in Frankfurt as well as bring in significant numbers of  personnel from posts outside Germany to expand regional operations.  Positions currently in Germany envisioned to relocate to the Frankfurt  regional center include a total of about 900 personnel from the current  Frankfurt consulate, offices at the Rhein Main Air Force Base, and the  embassy in Berlin. Based on current capacity estimates, there is also desk  space for about 200 staff who could be relocated from other posts.
To help address staffing decisions, State also plans to undertake what it  characterizes as a “think outside the box” exercise by asking embassies to  examine whether any functions in Europe or elsewhere can be  reengineered to be more effective. Our rightsizing framework encourages  decision makers to consider reengineering actions such as competitively  sourcing support functions, regionalizing contract activities, and  centralizing warehouse operations. This kind of reengineering, which  could help reduce costs of support functions and staffing requirements for  embassies, should be weighed along with the options for relocating staff to  regional centers.
Although State has renewed its process for staffing Creekbed, its  comments on a draft of this report lead us to question State’s commitment  to the process.  State’s comments and our evaluation of them are  discussed in more detail on page 10.
section_title: Resistance from Some Agencies Is Expected
paragraphs: Although substantial space exists for relocating staff from other posts,  State documents indicate that the department may encounter some  resistance among agencies identified to relocate. While some agencies and  offices agree that relocation would improve their security, State  anticipates that they will raise concerns about their relative ability to  effectively carry out their mission from Frankfurt, the cost of relocating  staff from other locations, the convenience of airline connections, and  costs related to living and operating out of Germany. These issues indicate  that State and other agencies will have to carefully weigh the security,  mission, and cost trade-offs associated with staffing relocation decisions.  In some cases, security issues may be so compelling that some staff will  have to be relocated.
section_title: State’s Earlier Effort Was Halted Prematurely
paragraphs: From September 2001 to August 2002, State tried to identify positions with  regional responsibilities that could be relocated to Creekbed. Although  State initially identified potential positions, State halted its efforts in  August/September 2002.
In September 2001, State initiated discussions with key agencies operating  at its European posts and asked them to consider relocating to Frankfurt if  it would be substantially more secure than their current facilities. This  process was more formally articulated in a March 2002 State cable to 48  European and Eurasian posts having regional coverage, asking  ambassadors to review their staffing with an eye toward relocating to  Frankfurt staff whose primary responsibilities were regional. Although  many of the posts were slow to respond, some listed possible candidates  for relocation. For example, one post identified three agencies with a  combined total of more than 50 staff members whom the ambassador  believed should be considered for relocation.
Although this effort initially identified positions for possible relocation, it  was halted when planners in State’s Bureau of European and Eurasian  Affairs received a document from OBO in August 2002 stating that “the  facility is at 100% occupancy” based on a projected staffing level of about  900 desks. OBO later explained that this document meant that the facility  was filled to the requirements level of 900 positions but did not mean the  facility was filled to capacity. OBO acknowledged that the wording of the  document was confusing. However, State officials told us that based on  that document, the department concluded there would be no additional  room in the facility for staff beyond the 900-desk staffing level. (The 900- desk projection only included staff currently in the Frankfurt consulate  offices, staff currently at the Rhein Main Air Force Base, newly created  staff positions, and staff “overflow” from the U.S. embassy in Berlin,  Germany.) As a consequence, in August/September 2002, State stopped its  efforts to relocate staff from posts outside Germany. For example, in  September 2002, State’s Under Secretary for Management sent a letter to  the U.S. Agency for International Development, one of the key agencies  initially identified by State as having staff potentially available for  relocation from outside Germany, indicating that the Frankfurt facility  would be fully occupied.
section_title: Analysis Showed Facility Has Additional Space
paragraphs: Beginning in March 2003, we performed a detailed analysis of State’s  staffing requirements for Creekbed in relation to the facility’s capacity. We  found that the facility had substantial additional capacity beyond the 900- desk level, affording opportunity for the relocation of personnel from  posts outside Germany.
Before visiting the Frankfurt facility in early May 2003, we interviewed the  private contractor officials responsible for the space planning and concept  design for Creekbed, who confirmed that there was space available for  additional staff. While at the facility, we examined space allotted for two  agencies and found the space significantly exceeded the number of  positions slated to fill it. For example, one agency projected 28 office  personnel for the facility but was allotted space for about 38 offices.  Another agency also projected 28 office personnel but was allotted space  for about 50 offices.
In addition, we found that there was potentially more office space  available at Creekbed because some agencies did not conduct a rigorous  staffing process before submitting their staff projections. During our  fieldwork in Frankfurt, we reviewed the documented 2002 staffing  projections with the agencies in Frankfurt that will be moving into  Creekbed and found that some agencies disputed their earlier projections.  Some agencies had overestimated their individual staffing requirements,  which were eventually curtailed by their headquarters in Washington, D.C.  We have previously reported that U.S. agencies do not take a systematic  approach to determining long-term staffing needs for embassy buildings  scheduled for construction.
We discussed these issues with the Consul General and the facility  manager in Frankfurt, who agreed that the facility had substantial space to  accommodate staff from other posts. When we completed our fieldwork in  May 2003, we also discussed our observations with officials in State’s  Bureau of European and Eurasian Affairs, the Office of Management  Policy, and OBO; and with OMB. They, too, agreed that there was  additional space. State then announced that it was renewing its efforts to  regionalize operations in Frankfurt. In a May 2003 letter to OMB, State’s  Under Secretary for Management said that the department was reopening  the space plan for the facility and anticipated that Creekbed would  accommodate significant additional positions. State indicated that it took  this action because OMB urged it to do so. In a June 2003 cable to all  posts, State said that it is considering which additional activities might be  relocated to Creekbed. State emphasized that its renewed effort is part of  its overall rightsizing strategy.
section_title: Conclusions
paragraphs: Successful staffing of the Frankfurt facility consistent with State’s  regionalization goals is a critical step in efforts to rightsize U.S. overseas  operations. In fact, it may be the single most visible and concrete example  of a rightsizing initiative by the U.S. government in the near term. We  believe that the revised staffing plans for Creekbed will provide State a  significant opportunity to work with other agencies to regionalize  diplomatic operations in Europe and develop a more rational, secure, and  cost-effective overseas presence. The facility has ample, available office  and other space that, when fully renovated, will provide a secure  alternative location to conducting regional operations at embassies and  consulates with physical security deficiencies. Deciding which U.S.  government positions will be relocated to the facility will require a careful  consideration of the security, mission, and cost factors associated with  agencies’ presence at individual posts. In some situations, State may  encounter agency resistance to relocation. However, security  considerations may be so compelling that relocation of certain staff may  be necessary. In other cases, State and other agencies will have to work  hard to reach agreement on the relative importance of the security,  mission, and cost factors associated with the relocation decision and how  the factors should be weighed. More importantly, it will require a strong  and continual commitment by State to the broader objective of rightsizing  the U.S. overseas presence.
section_title: Agency Comments and Our Evaluation
paragraphs: OMB and the Department of State provided written comments on a draft  of this report (see apps. I and II). OMB said that it is working closely with  State to develop a plan of action to appropriately staff the new facility, to  assess if staff could be shifted from their current overseas location to  Frankfurt, and to discuss potential moves to Frankfurt with headquarters  staff at all agencies. OMB also expressed the hope that this facility will  serve as an example of a best practice for the development of other  regional centers around the world.
State said that OBO’s estimate that the facility could accommodate about  1,100 desk positions represented a maximum theoretical capacity and that  the actual capacity would probably be less. We subsequently asked OBO,  which is State’s expert on overseas real estate and facility issues, if it was  confident of its capacity estimate. OBO reiterated its estimate stating that  it has identified space in the facility for about 1,100 personnel. However,  even if the capacity of the facility were slightly less, there would still be  ample room to accommodate some staff currently assigned to other  locations outside Germany.
State also noted that our report did not identify specific agencies or staff  that we believe should be relocated to Frankfurt. State said this suggested  that we do not believe that there are suitable candidates for relocation.  This is not the case. As we noted in this report, State’s business plan for  the purchase of the facility indicated it has space to accommodate regional  staff from outside Germany who are assigned to embassies with security  vulnerabilities. Moreover, State’s plan identified 73 staff from five agencies  at posts outside Germany for potential relocation. As further noted in this  report, State’s subsequent efforts at its European and Eurasian posts  identified suitable candidates for relocation, but that exercise was halted  because State mistakenly believed that the facility did not have sufficient  space. Our work at the four posts outside Germany validated the existence  of significant numbers of staff with regional responsibilities, many of  which were located in buildings with substandard security. We did not  identify specific candidates for relocation in this report because State said  that it was conducting a full assessment of staffing options for Frankfurt,  and we did not want to preempt that assessment. However, in our  briefings with State and OMB officials, we discussed our fieldwork  observations and told them that there were many staff that could be  considered for relocation. For example, there were at least 87 staff with  regional responsibilities in Vienna and Budapest that were assigned to  space with substandard security. Furthermore, we noted that in 2002, we  had identified regional positions in Paris that could be considered for  relocation to Frankfurt based on security, mission, and/or cost factors.
State also said that it believes, based on their follow-up to the 1999  Overseas Presence Advisory Panel report, that the U.S. government’s  overseas presence is already rightsized. We have previously pointed out  the substantial weaknesses in the pilot studies which provided the basis of  State’s follow-up.  State subsequently indicated that it intended to  reinvigorate the rightsizing process consistent with the President’s  Management Agenda, OMB’s directives, and our rightsizing framework.
In our view, State’s comments are inconsistent with its (1) stated  expectations that the Frankfurt project will achieve the department’s key  rightsizing and regionalization goals and (2) plans to conduct a full  assessment of staffing options for the Frankfurt regional center. In  addition, State’s comments lead us to question whether the department  seriously intends to implement its business plan for the Frankfurt center  regarding relocating regional staff, as well as its commitment to the overall  rightsizing process.  We believe that State’s actions regarding staffing of  the facility warrant oversight.
State also provided technical comments that we have incorporated into  this report, as appropriate.
section_title: Matter for Congressional Consideration
paragraphs: In view of State’s comments on a draft of this report and the continued  importance of rightsizing the overseas U.S. presence consistent with  security, mission, and cost factors, the Congress may wish to direct the  Secretary of State to submit a detailed staffing plan for the Frankfurt  facility that specifically lists positions to be relocated to Frankfurt.
section_title: Scope and Methodology
paragraphs: To determine State’s process for creating staffing projections for the  Frankfurt regional center, we reviewed documents and interviewed  officials in State’s Bureau of European and Eurasian Affairs, OBO, and  Office of Management Policy. We visited the current consulate facilities in  Frankfurt and spoke with the Consul General and appropriate State  officers about the current security status of their consulate buildings as  well as the multiple projections of staff relocating to the facility. We spoke  to representatives from agencies that will be moving to the Creekbed  facility. We also toured the facilities at the Rhein Main Air Force Base that  are scheduled to be relocated by June 2005 as well as the currently empty  Frankfurt regional center facility. In addition, we visited other posts in  Europe—Paris, Rome, Budapest, and Vienna—to determine (1) the extent  to which each has agencies and personnel performing regional functions  that could be considered for relocation to Frankfurt based on the nature of  their mission and/or their security vulnerability and (2) what actions these  embassies had taken to identify staff who could be considered for  relocation to the Frankfurt facility. Specifically, at these posts, we  interviewed not only the agencies that were earlier identified by State or  by their ambassadors as being potential relocatees, but also officials from  other agencies with regional responsibilities. To determine the facility’s  capacity to accommodate staff from outside Germany, we interviewed the  private contractor officials in Albany, New York responsible for the initial  feasibility design to discuss their space planning and concept design for  the Frankfurt center. We also compared OBO’s capacity estimates with  staffing requirements for the facility. In addition, during our visit to  Creekbed, we compared the size of office space allocated to two different  agencies in Frankfurt with the number of people in those agencies. We  also met with officials in OMB to obtain documentation on the plans for  purchasing the facility and to discuss State’s approach to staffing it.
We conducted our work from February 2003 through August 2003 in  accordance with generally accepted government auditing standards.
We are sending copies of this report to the Director of OMB and the  Secretary of State. We are also sending copies of this report to other  interested Members of Congress. Copies will be made available to others  upon request. This report will also be available at no charge on the GAO  Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  on (202) 512-4128.  John Brummet, Janey Cohen, Lynn Moore, Ann M.  Ulrich, and Joseph Zamoyta made key contributions to this report.
section_title: Appendix I: Comments from the Office of Management and Budget
section_title: Appendix II: Comments from the Department of State