As part of recent construction of Kabul facilities, in fiscal years 2009 and 2010, State awarded two contracts originally worth $625.4 million to meet growing facility requirements at the U.S. embassy in Kabul. Table 1 details the original scope of each contract. Figure 1 depicts the compound upon completion of current construction. State’s plans called for sequencing construction under the two contracts and also entailed acquiring the Afghan Ministry of Public Health site adjacent to the compound to build parking facilities for approximately 400 embassy vehicles. In September 2011, after State determined that the planned transfer of the Afghan Ministry of Public Health site would not happen, State removed the parking and vehicle maintenance facilities from the project. State also partially terminated elements of the first contract in September 2011—specifically one of the permanent office annexes and one of the staff apartment buildings—for the convenience of the U.S. government, in part, due to concerns about contractor performance and schedule delays. The 2009 contractor completed the temporary offices and housing units, but State transferred contract requirements for those permanent facilities not begun by this contractor to the 2010 contract, which increased cost and extended schedule. The cost for the 2009 and 2010 contracts has increased by about 27 percent, from $625.4 million to $792.9 million (see table 2). As of March 2015, OBO and the 2010 contractor were negotiating the value of several potential contract changes that will likely result in increased costs. For example, the contractor has asserted that site areas it needed were not available to start construction as planned. With regard to schedule, projected completion has been delayed over 3 years to fall 2017, although the 2010 contract had not yet been revised to reflect that date as of May 2015. We found that State did not follow its cost containment and risk assessment policies, resulting in lost opportunities to mitigate risks. The U.S. Office of Management and Budget (OMB) requires value engineering (referred to here as cost containment) for certain construction projects. In addition, OBO’s standard operating procedures require risk assessment studies to reduce and manage risks to a project. For the 2009 contract, State confirmed that it did not conduct either type of assessment. For the 2010 contract, State did complete a cost containment study and a risk assessment in March 2010. The 2010 cost containment study made 31 recommendations to streamline construction and improve the project. State accepted 18, rejected 12, and partially accepted 1 of these recommendations. The risk assessment identified over 30 risks to the project. In particular, it identified the interface between the 2009 and 2010 contracts as a major source of risk. The study raised concerns about how State could best coordinate the 2010 contract with the 2009 contract without sufficient information about the first contractor’s design plans, which were under development. Examples of other major risks identified included (1) that adjacent Afghan Ministries of Public Health and Defense sites that State planned to acquire might not be available in time, or at all, to enable construction to proceed as planned, and (2) that there might be insufficient space for two contractors to stage construction concurrently. The consultant responsible for the risk assessment recommended risk mitigation actions, which State did not act on, that aligned with the cost containment recommendations. For example, two of the recommendations were that State (1) facilitate greater project coordination between the two contracts, and (2) divide the 2010 contract into two separate contracts so that if the 2009 contract was delayed, the 2010 contract would not also be delayed. One State official indicated that, given concerns about security in Kabul and pressure to get permanent, hardened facilities built as soon as possible, State was not going to act on any recommendation that would delay getting the contracts awarded and the facilities built. A senior State management official acknowledged that State did not fully follow its cost and risk policies, and said that had State more fully considered the cost containment and risk assessment study recommendations, there might have been a decision to delay award of the 2010 contract, which would have slowed efforts to provide facilities as quickly as possible. Several risks noted by that study eventually materialized, such as the loss of the Afghan Ministry of Health site and insufficient space that interfered with the sequencing of construction. These factors contributed to increased cost and extended schedule. Thus, in our May 2015 report, we recommended that State ensure existing cost containment and risk assessment policies are followed in future Kabul construction projects. State concurred. Since 2002, State has spent over $100 million to construct temporary facilities on the embassy compound to accommodate evolving staffing needs and provide temporary office and housing space as permanent facilities are built. OBO building guidance from 2009 states that “temporary facilities” are facilities that will be occupied for no more than 5 years or until a permanent building is constructed, whichever is sooner. The guidance also indicates that temporary facilities include, but are not limited to, containerized housing/office units, modular units, modified shipping containers, and trailers. On completing the project in 2017, all temporary facilities on-compound will be nearly 5 years old or more, and a smaller subset will be more than 10 years old. Based on numbers provided by State, those temporary facilities will likely consist of over a third of available desks and beds. State officials indicated that continued use of these temporary facilities is likely, as some may be used by contractors that will provide support services following the U.S. military’s drawdown. For more information, see appendix 1. The lack of security standards for temporary facilities contributed to insufficient and differing levels of protection, increased costs, and extended schedule. Prior to building additional temporary facilities under the 2009 contract, State informed Congress in its fiscal year 2008 Supplemental Appropriations Justification of its concerns about threats posed from potential incoming weapons fire—amid increasing attacks around Kabul—and indicated that overhead protection was required to protect staff in existing temporary facilities on compound. Also, State security standards in 2009 indicated that housing constructed as an integral part of or adjoining the chancery (i.e., office building) should be constructed to meet chancery physical security standards. State has physical security standards governing construction of offices and housing that State seeks to meet regardless of whether a facility is permanent or temporary. However, according to DS officials, State does not have security standards specifically tailored to temporary facility construction. For practical purposes, DS officials said that State’s physical security standards governing new construction—regardless of whether a facility is permanent or temporary—are standards that only permanent construction can meet. Where newly constructed temporary facilities— unlike newly constructed permanent facilities—cannot be constructed to meet all State’s security standards, State has the discretion to grant exceptions from those standards and to specify mitigating alternative security measures that will be provided. In the absence of minimal security standards (or guidance) to guide planning for temporary facility construction, State inconsistently applied alternative security measures, resulting in insufficient and different levels of security between the temporary offices and housing. When awarding the 2009 contract, State did not specify that overhead protection was required for either the temporary housing or offices, even though State had previously expressed to Congress concerns about the threat posed from incoming weapons fire in 2008. Furthermore, the only security protection measure specified in the 2009 contract for the temporary housing was shatter-resistant window film. By comparison, temporary offices were to receive forced entry and ballistic protection. State subsequently took corrective action through modifications on the 2009 contract that increased cost and extended schedule. State likely paid more than it would have had the security requirements been included in the original contract requirements. Thus, to address this issue, in our May 2015 report, we recommended that State consider establishing minimum security standards or other guidance for the construction of temporary structures, especially those used in conflict environments. State partially concurred. State does not support separate standards for temporary structures, reiterating that it aims to meet Overseas Security Policy Board security standards in all environments. Where this is not possible, State asserts it works to meet the intent of these standards through alternative security mitigation measures via its “waivers and exceptions” process. However, State commented that it does believe that there is value in documenting standard operating procedures and best practices associated with the deployment and protection of temporary structures in high-threat and conflict environments. State noted that while such documentation would not constitute security standards and would not circumvent risk management integral to its waivers and exceptions process, it would provide templates from which to base the design of future projects in exigent environments. Should State produce such documentation, we believe that this could meet the intent of our recommendation. As discussed in our May 2015 report, since the U.S. embassy in Kabul reopened in 2002, the unpredictable operating environment of Afghanistan has produced changing facility needs that have continually outpaced the post’s existing capabilities. This has been due to various factors such as policy and program changes, staffing fluctuations, and changes in the security environment. To meet these needs, State has made or plans to make approximately $2.17 billion in infrastructure investments in Kabul. During this time, the embassy has used a variety of off-compound facilities to meet some needs that could not be met on-compound. Key off-compound facilities include Camp Sullivan, a 20.9-acre property near Kabul International Airport; Camp Seitz, a 7-acre facility southwest of the embassy that serves as housing and office space for security contractors; and Camp Eggers, a 16.8-acre former Department of Defense (DOD) facility southwest of the embassy planned to serve as a contractor camp. In addition, State is upgrading Camp Alvarado, a property located near the airport that serves as the main aviation hub for the embassy’s air transport and counternarcotics operations. As of March 2015, these off- compound properties represented a total State investment of almost $731.4 million. The relative locations of these properties are shown in figure 2. State plans to use $394.9 million to address unmet facility needs on- and off-compound in fiscal year 2015.