oversight

Overseas Presence: Conditions of Overseas Diplomatic Facilities

Published by the Government Accountability Office on 2003-03-20.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                            United States General Accounting Office

GAO                         Testimony
                            Before the Senate Committee on Foreign
                            Relations


For Release on Delivery
Expected at 2:30 p.m. EST
Thursday, March 20, 2003    OVERSEAS PRESENCE
                            Conditions of Overseas
                            Diplomatic Facilities
                            Statement of Jess T. Ford
                            Director, International Affairs and Trade




GAO-03-557T
This is a work of the U.S. government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety without further
permission from GAO. However, because this work may contain copyrighted images or
other material, permission from the copyright holder may be necessary if you wish to
reproduce this material separately.
                                                March 20, 2003


                                                OVERSEAS PRESENCE

                                                Conditions of Overseas Diplomatic
Highlights of GAO-03-557T, testimony
before the Senate Foreign Relations             Facilities
Committee




The 1998 terrorist bombings of the              The State Department has done much over the last 4 years to improve
U.S. embassies in Kenya and                     physical security at overseas posts. For example, State has constructed
Tanzania, which killed more than                perimeter walls, anti-ram barriers, and access controls at many facilities.
220 people and injured 4,000,                   However, even with these improvements, most office facilities do not meet
highlighted the compelling need for             security standards. As of December 2002, the primary office building at 232
safe and secure overseas facilities.
                                                posts lacked desired security because it did not meet one or more of State’s
In November 1999, an independent
advisory group, the Overseas                    five key current security standards of (1) 100-foot setback between office
Presence Advisory Panel, said that              facilities and uncontrolled areas; 2) perimeter walls and/or fencing; (3) anti-
thousands of Americans                          ram barriers; (4) blast-resistant construction techniques and materials; and
representing our nation abroad                  (5) controlled access at the perimeter of the compound. Only 12 posts have
faced an unacceptable level of risk             a primary building that meets all 5 standards. As a result, thousands of U.S.
from terrorist attacks and other                government and foreign national employees may be vulnerable to terrorist
threats. The panel called for                   attacks. Moreover, many of the primary office buildings at embassies and
accelerating the process of                     consulates are in poor condition. In fact, the primary office building at more
addressing security risks to provide            than half of the posts does not meet certain fire/life safety standards. State
overseas staff with the safest                  estimates that there is a backlog of about $730 million in maintenance at
working environment, consistent                 overseas facilities; officials stated that maintenance costs would increase
with the nation’s resources and the
demands of their missions.
                                                over time because of the age of many buildings. At least 96 posts have
Moreover, the panel concluded that              reported serious overcrowding.
many U.S. overseas facilities were
insecure, decrepit, deteriorating,              While State continues to fund some security upgrades at embassies and
overcrowded, and “shockingly                    consulates, State is shifting its resources from these upgrades toward
shabby,” and it recommended                     constructing new buildings and substantially retrofitting existing, newly
major capital improvements to                   acquired, or leased buildings. Funding for these capital projects has
redress these problems.                         increased from $9.5 million in fiscal year 1998 to a requested $890 million in
                                                fiscal year 2004. In addition to completing ongoing construction projects,
GAO was asked to (1) assess the                 State believes it needs to replace facilities at about 160 posts at an estimated
current conditions of overseas                  cost of $16 billion. At the proposed fiscal year 2004 rate of funding, it will
diplomatic facilities, including                take more than 20 years to fully fund and build replacement facilities. While
security, maintenance, office space,            GAO has not fully analyzed State’s performance in the early stages of this
and information technology; and
                                                large-scale building program, GAO has observed that State has taken a
(2) provide some preliminary
                                                number of positive steps to improve its program management. Because of
observations regarding State’s
efforts to improve facility
                                                the high costs and importance of this program, GAO believes the program
conditions by replacing existing                merits extensive oversight.
buildings with new, secure
                                                Number of Physical Security Standards Met by Primary Facilities
embassy compounds.




www.gao.gov/cgi-bin/getrpt?GAO-03-557T.

To view the full report, including the scope
and methodology, click on the link above.
For more information, contact Jess T. Ford at
(202) 512-4128, or fordj@gao.gov.
          Mr. Chairman and Members of the Committee:

          I am pleased to be here to discuss our work on the security and overall
          conditions of U.S. embassy and consulate facilities around the world. The
          1998 terrorist bombings of the U.S. embassies in Kenya and Tanzania,
          which killed more than 220 people and injured 4,000, highlighted the
          compelling need for safe and secure overseas facilities. Following the
          bombings, three high-level independent groups cited physical security
          problems at numerous overseas facilities. In November 1999, one of these
          groups, the Overseas Presence Advisory Panel,1 said that thousands of
          Americans representing our nation abroad faced an unacceptable level of
          risk from terrorist attacks and other threats. The panel called for
          accelerating the process of addressing security risks to provide overseas
          staff with the safest working environment, consistent with the nation’s
          resources and the demands of their missions. Moreover, the panel
          concluded that many U.S. overseas facilities were insecure, decrepit,
          deteriorating, overcrowded, and “shockingly shabby,” and it recommended
          major capital improvements to redress these problems. You asked us to
          assess current facility conditions and what the State Department is doing
          to improve them.

          Today I will focus my comments on the security conditions at U.S.
          embassies and consulates. I will also discuss building maintenance, office
          space, and information technology conditions. Our observations are based
          on an analysis of data from the State Department’s Bureaus of Diplomatic
          Security, Overseas Buildings Operations (OBO), and Information
          Resources Management, and our visits last month to four posts where we
          examined how facility conditions affect security risks and mission
          effectiveness. For security reasons, I will not be identifying these posts.
          Finally, I will discuss some preliminary observations regarding State’s
          efforts to improve facility conditions by replacing existing buildings with
          new, secure embassy compounds. These observations are based on our
          ongoing review of State’s multibillion-dollar embassy and consulate
          construction program on which we will report later this year.

          The State Department has done much over the last 4 years to improve
Summary   physical security at overseas posts. State has constructed perimeter walls,


          1
           Secretary of State Albright established the Overseas Presence Advisory Panel following
          the 1998 embassy bombings in Africa to consider the organization and condition of U.S.
          embassies. Department of State, America's Overseas Presence in the 21st Century, The
          Report of the Overseas Presence Advisory Panel (Washington, D.C.: Nov. 1999).



          Page 1                                                                     GAO-03-557T
anti-ram barriers, and access controls at many facilities; has obtained host
government approval to close off nearby streets at many locations; and has
implemented other measures. However, even with these new
improvements, most office facilities do not meet security standards. Our
analysis showed that as of December 2002, the primary office building at
232 posts lacked sufficient security because it did not meet one or more of
State’s five key standards.2 These standards are a 100-foot setback
between office facilities and public streets or other uncontrolled areas, the
presence of perimeter walls and/or fencing, anti-ram barriers, blast-
resistant construction techniques and materials, and controlled access at
the perimeter to the compound. Moreover, at 81 posts, the primary
building did not meet any of these standards. Only 12 posts have a
primary building that meets all 5 standards. As a result, thousands of U.S.
government and foreign national employees may be at risk. Our visits to
four posts last month provide numerous examples of serious physical
security shortcomings. None of the primary office buildings at the four
posts meets setback standards, and three posts have annex buildings
without any setback. At one post, an annex building has little or no
setback on four sides, and there is a public gas station on one side that
could potentially exacerbate the blast force from a bomb. In addition, U.S.
personnel at two posts occupy leased space in office buildings constructed
with extensive glass walls, which post officials told us could shatter,
seriously injuring or killing many occupants in the event of a large blast.
Security officials at the posts we visited are concerned that many of the
buildings we observed are vulnerable to terrorist attacks.

Many of the primary office buildings at embassies and consulates are in
poor condition. In fact, the primary office building at more than half of the
posts does not meet certain fire/life safety standards. During one site visit,
post officials described several buildings as fire traps—old wiring could
cause fires, and there are limited fire exits. State estimated that there is a
backlog of about $730 million in maintenance at overseas facilities, and
officials stated that maintenance costs will increase over time because of
the age of many buildings. Many embassy and consulate buildings are old,
and at the four posts we visited, several buildings were constructed in the
1800s. We observed sinking foundations, crumbling facades, and serious
cracks in the walls and around the windows. At one post, duct tape and



2
 At most posts, there are multiple buildings, often dispersed throughout the city. Our
analysis focused on the primary office building at each post. At an embassy, the primary
office building is called the chancery.



Page 2                                                                      GAO-03-557T
             plywood have been used in the ambassador’s suite to seal around a
             window opening. At least 96 posts have reported serious overcrowding.
             At one post we visited, crowded office space was dramatic—for example,
             the Political Counselor, who is one of the most senior officials at the
             embassy, had an 8 by 13-foot cubicle, and another work area had a
             cramped 7-foot ceiling height.

             While State continues to fund some security upgrades at embassies and
             consulates, it is shifting its resources from implementing upgrades toward
             constructing new buildings and substantially retrofitting existing, newly
             acquired, or leased buildings. Funding for State’s capital projects has
             increased from $9.5 million in fiscal year 1998 to a requested $890 million
             in fiscal year 2004. In addition to completing construction that is under
             way, State believes it needs to replace facilities at about 160 posts. This
             will be an expensive effort, costing an estimated $16 billion, and will
             require a sustained level of funding over many years. State’s timeline for
             completing this program will depend on the amount of funding it receives
             and how well it manages the program. At the proposed fiscal year 2004
             rate of funding, about $890 million for the construction of replacement
             facilities at 8 posts, it will take more than 20 years to fully fund and
             complete construction.

             In the past, we have raised concerns regarding State’s performance in
             managing its overseas real estate programs. While we have not fully
             analyzed State’s performance in the early stages of this large-scale building
             program, we have observed that OBO has taken a number of positive steps
             to improve its program management. For example, it has developed a
             long-range plan to help guide decision making, has taken steps to reduce
             the amount of time for designing and constructing new embassies and
             consulates, and has installed an industry advisory panel to ensure that
             “best practices” are in place. Because of the high costs associated with
             this program and the importance of providing secure office space as
             quickly as possible, we believe this program merits extensive oversight.


             The United States maintains more than 250 diplomatic posts, including
Background   embassies, consulates, and other diplomatic offices, located around the




             Page 3                                                           GAO-03-557T
world.3 More than 60,000 personnel—U.S. and foreign service nationals—
work at these locations. About 50 government agencies and subagencies
operate overseas, including the Departments of State, Defense, and
Justice; and the U.S. Agency for International Development.

Since the 1970s, U.S. diplomatic personnel overseas have been
increasingly at risk from terrorist attacks and other acts of violence. In
response, the State Department in 1986 began a substantial embassy
construction program, known as the Inman program, to protect U.S.
personnel and facilities. In 1991, we reported that State was unable to
complete as many projects as originally planned due to systemic
weaknesses in program management, as well as subsequent funding
limitations. This construction program suffered from delays and cost
increases due to, among other things, poor program planning, difficulties
in acquiring sites, changes in security requirements, and inadequate
contractor performance.4 Following the demise of the Inman program in
the early 1990s, the State Department initiated very few new construction
projects until the Africa embassy bombings in August 1998 prompted
additional funding.

In the 1998 bombings, terrorists attacked the U.S. embassies in Nairobi,
Kenya, and Dar es Salaam, Tanzania. These large-scale truck bombings
killed more than 220 people, including 12 American U.S. government
employees and family members, 32 Kenyan national U.S. government
employees, and 8 Tanzanian national U.S. government employees. In
addition, the bombings injured more than 4,000 Kenyans, Tanzanians, and
Americans.5 Figures 1 and 2 show pictures of the embassy in Tanzania
before and after the bombings.




3
 The number of embassies, consulates, and other diplomatic posts changes as new posts
are opened and posts are closed. In addition, State has a small presence in some other
locations that are not included in these figures. For example, it has five 1-person posts in
France, called American Presence posts.
4
 U.S. General Accounting Office, State Department: Management Weaknesses in the
Security Construction Program, GAO/NSIAD-92-2 (Washington, D.C.: Nov. 1991).
5
 State Department, Report of the Accountability Review Boards: Bombings of the U.S.
Embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, on August 7, 1998
(Washington, D.C.: Jan. 1999).



Page 4                                                                         GAO-03-557T
Figure 1: U.S. Embassy in Tanzania, before the August 7, 1998, Terrorist Attack




Page 5                                                                GAO-03-557T
Figure 2: U.S. Embassy in Tanzania, after the August 7, 1998, Terrorist Attack




Since these embassy bombings, U.S. facilities and personnel have faced
continued threats from terrorist and other attacks. Embassy and
consulate employees are on the front lines, often serving in dangerous
locations, and must rely heavily on the protection provided by the law
enforcement and security measures of the foreign country in which they
are located. From 1998 through 2002, there were 30 terrorist attacks
against overseas posts, personnel, and diplomatic residences. During that
same period, overseas posts were forced to evacuate personnel or suspend
operations 83 times in response to direct threats or unstable security
situations in the host country. (See table 1.) During the first 2 months of
2003, overseas posts authorized the departures of personnel and/or their
families a total of 11 times due to security concerns.




Page 6                                                                 GAO-03-557T
                     Table 1: Threats against U.S. Diplomatic Personnel and Posts, 1998-2002

                         Number and Type                          1998    1999    2000    2001    2002     Total
                         Terrorist attacks                          10        9      2        2       7       30
                         Evacuations                                 22      12       7      18      19       78
                           Authorized/voluntary                    [13]    [10]     [4]    [17]     [9]     [53]
                           Ordered                                  [9]     [2]     [3]     [1]    [10]     [25]
                         Suspended operations                         4       1                                5
                     Source: GAO analysis of State Department data.




Security Standards   Before I discuss the results of our work, I want to explain some of State’s
                     security standards and why they are important.6 State identified five key
                     security standards for overseas diplomatic office facilities to protect them
                     against terrorism and other dangers. First, State believes that office
                     facilities should be at least 100 feet from uncontrolled areas, such as a
                     street where vehicles can pass without first being checked by security
                     officials. Therefore, this distance helps to protect the buildings and
                     occupants against bomb blasts, mob attacks, and other threats. In
                     establishing the setback standard, the State Department determined that at
                     100 feet, the effects of a bomb blast have diminished to the point where
                     the cost of site acquisition and construction to protect against the
                     remaining blast effects are relatively affordable. State notes that
                     additional setback may not be practical at many locations. Exhibit 1 is a
                     video clip from the State Department showing a test blast from 100 feet
                     away.

                     The second and third standards are strong perimeter walls and anti-ram
                     barriers to ensure that vehicles cannot breach the facility perimeter to get
                     close to the building prior to detonating a bomb. Exhibits 2 and 3 are
                     video clips from the State Department showing the effectiveness of these
                     walls and barriers.

                     The fourth standard requires blast-resistant construction techniques and
                     materials. Among other things, these materials include reinforced
                     concrete and steel construction and blast-resistant windows. Diplomatic
                     Security officials state that flying glass is a primary cause of injuries and
                     deaths in a blast. Coupled with a 100-foot setback, blast-resistant
                     construction provides the best possible protection against a vehicle bomb


                     6
                      These standards apply to the construction of new buildings. Existing buildings are
                     required to meet the setback standard to the “maximum extent feasible.”



                     Page 7                                                                         GAO-03-557T
                          attack, according to Diplomatic Security officials. Combined, these four
                          standards mitigate the effect of a vehicle bomb attack and prevent the
                          building from suffering catastrophic collapse and complete destruction.

                          State’s fifth security standard is controlled access at the perimeter to the
                          compound. At this control access point, guards can screen personnel and
                          visitors before they enter the embassy compound to verify that they have
                          no weapons and that they should be allowed to enter, and can fully search
                          vehicles before they are permitted to enter the compound.


                          Over the last 4 years, State has accomplished much in improving posts’
State Has Done Much       security through various security upgrades. These upgrades include the
to Improve Facility       installation of Mylar shatter-resistant window film and forced
                          entry/ballistic-resistant doors; the construction of perimeter security walls
Security but Most         and fences, jersey barriers, and compound access controls; and the
Facilities Still Do Not   stationing of additional police and security guards. In June 2002, a bomb
Meet Security             attack against the U.S. consulate in Karachi demonstrated the
                          effectiveness of recent security upgrades to the compound. As shown in
Standards                 figure 3, physical damage to the building was minimized by these
                          upgrades. As of September 30, 2002, State had completed security
                          upgrades at 113 posts and had installed Mylar window film barriers and
                          forced entry/ballistic-resistant doors at 242 posts.




                          Page 8                                                           GAO-03-557T
Figure 3: U.S. Consulate, Karachi, Pakistan, after Car Bomb Attack of June 14,
2002, Showing Little Damage to the Building




Further, to address security concerns at some of the buildings without a
100-foot setback, State has secured host government cooperation in either
closing adjacent streets and/or posting local police officers as guards to
monitor and control surrounding streets. State has also acquired adjacent
land at 34 posts to increase setback since the 1998 embassy bombings.
For example, State purchased a gas station next to an office annex
building in Athens, Greece, and closed the gas station, thus increasing
setback and improving security.

At all four posts we visited, we observed that recent security upgrades
have enhanced security. At three of these posts, local authorities have
permitted closing off streets to public traffic in order to protect U.S.
facilities. However, Diplomatic Security officials acknowledged that it is
not feasible to increase setback by acquiring land and closing off nearby
streets at many locations. Furthermore, these officials also told us that
security upgrades were partial fixes that did not bring the buildings up to
physical security standards. As a result, many buildings and their


Page 9                                                                GAO-03-557T
occupants remain vulnerable to terrorist attacks. Exhibit 4 is a video clip
from the State Department that illustrates this vulnerability. It shows the
effect of a blast 100 feet away on an office that does not meet the standard
for blast-resistant construction. The windows have been treated with
Mylar sheeting, a standard upgrade that mitigates the effects of glass
shattering in a blast. Although Mylar provides some protection, the non-
blast-resistant window construction may allow glass to be forced into the
building at a high rate of speed.

To assess the security of embassy and consulate facilities, we analyzed
State Department data to determine if the primary facilities meet State’s
five key standards that I discussed earlier. Figure 4 shows the portion of
posts where the primary office building meets or does not meet four of the
five security standards: setback, perimeter wall or fence, anti-ram barrier,
and compound access control. At the request of Diplomatic Security
officials, we will not discuss details on the remaining standard, blast-
resistant construction, due to its sensitivity. We can say, however, that
facilities completed since the late 1980s are considered to be blast
resistant. Figure 5 shows the number of primary facilities that meet one,
two, three, four, or five of the physical security standards.7 For example, it
shows that the primary office facility at 81 posts met none of the five
standards. Of these, 36 facilities are in locations that the State Department
has designated as posing a high or critical threat level.




7
 Our analysis of facilities’ security focused on the primary facility at 244 posts for which
State provided security data.



Page 10                                                                         GAO-03-557T
Figure 4: Percentage of Primary Facilities that Meet or Do Not Meet Key Physical
Security Standards




Figure 5: Number of Physical Security Standards Met by Primary Facilities




Page 11                                                               GAO-03-557T
Setback   As shown in figure 4, only 28, or 11 percent, of the primary buildings meet
          the 100-foot setback standard. More than half of the primary buildings
          have less than 15 feet of setback—these buildings are virtually perched on
          the street. Figure 6 is an example of a post with limited setback.

          At the four posts we visited, all of the primary office buildings have limited
          setback from the street and several annex buildings have no setback. As
          shown in figure 7, one of these buildings is adjacent to a public gas station,
          which could exacerbate the effects of a bomb attack.

          Figure 6: Insufficient Setback at a U.S. Embassy




          Page 12                                                          GAO-03-557T
Figure 7: Public Gas Station Behind an Embassy Building Poses Security Concern




Another building, with little setback, is located next to a main
thoroughfare. Consequently, public traffic, including trucks and buses,
routinely travels within feet of U.S. government office space. At three of
the four posts we visited, the embassy had secured host government
cooperation in closing at least one street surrounding the primary office
building; however, embassy officials at one location noted that these
agreements were temporary and could be revoked at any time. Moreover,
the embassies had not been able to close streets running next to all of their
facilities, such as office annexes. For example, figure 8 depicts the view
from a senior official’s office in an annex building where post officials
were unable to close the main thoroughfare that runs directly in front of
the building.




Page 13                                                            GAO-03-557T
                            Figure 8: View from Annex Office Showing Traffic Flow Nearby




Perimeter Walls or Fences   Perimeter walls or fences and anti-ram barriers are two standards that
and Anti-ram Barriers       work together to protect facilities. We found that 120 primary facilities
                            lack an adequate perimeter wall/fence, while 147 lack adequate anti-ram
                            barriers. Diplomatic Security officials explained that in many cases, posts
                            are unable to install these upgrades due to host country limitations, such
                            as their impact on traffic flow, parking, and the operation of adjoining
                            residences and commercial buildings. Diplomatic Security officials stated
                            that perimeter upgrades have been installed at all posts that are able to
                            accommodate them.


Compound Access Control     We also found that 108 posts either lack or have inadequate compound
                            access control, a system of gates, barriers, and guard booths that is used to
                            pre-screen personnel and vehicles before entering the embassy grounds.
                            At one embassy we visited, visa applicants could gain access to the
                            embassy building prior to undergoing proper screening, which would be a
                            serious concern in the case of a terrorist action. Figure 9 depicts an
                            inadequate compound access control booth, which is located within the
                            embassy compound. The Security Officer acknowledged that this was a
                            serious weakness and that visitors were not screened adequately before
                            entering the embassy building. Construction of a new compound access
                            control system is scheduled to begin in May 2003. Figure 10 depicts a

                            Page 14                                                         GAO-03-557T
newly upgraded compound access control system that facilitates full
screening of all vehicles and persons prior to their gaining access to the
compound.

Figure 9: Inadequate Compound Access Control Booth




Page 15                                                          GAO-03-557T
                        Figure 10: Newly Upgraded Compound Access Control Booth




                        Ambassadors and security officers at three of the four posts we visited
                        emphasized that in addition to facilities not meeting standards, there were
                        security difficulties associated with the number of office facilities at their
                        post that were spread out around the city. Three of the four posts we
                        visited had more than five locations, and post managers were concerned
                        that this made it extraordinarily difficult and expensive to implement
                        security measures. Officials also stated that dispersion of facilities
                        complicates emergency action planning. We note that frequent travel
                        between dispersed facilities may also pose security risks to personnel
                        because terrorists and criminals can target them while they are in transit.
                        In the construction of new embassy compounds, all U.S. government
                        offices are required to be located on the compound.


                        State Department data show that many buildings are in poor condition. At
Buildings Are in Poor   133 posts, the primary office building has certain fire/life safety
Condition                                                                               th
                        deficiencies. At one post we visited, the fire escape for the 6 floor of the
                        chancery was a chain-link ladder strapped to a heating radiator (fig. 11).
                        OBO fire officials explained that a number of posts were unable to meet
                        fire standards, such as sprinkler systems and proper number of exits, due
                        to the structural limitations of the building. This underscores the
                        Department’s position that many buildings are in a condition that will not
                        allow a security and safety upgrade.


                        Page 16                                                           GAO-03-557T
                         Figure 11: Chain-link Ladder Serves as Fire Escape for 6th Floor Embassy
                         Employees




                         Another safety problem is the seismic condition of buildings. Although the
                         State Department does not have data on seismic conditions at all facilities,
                         it acknowledges that embassy and consular employees at some locations
                         may be working in buildings that do not protect against earthquakes. At
                         one of the posts we visited, located in an earthquake region, the consular
                         building has a very poor seismic rating. The State Department has been
                         unable to locate a suitable temporary facility that can house the consular
                         services while the landlord makes seismic improvements to the current
                         building. The landlord has absolved himself from any responsibility in the
                         event of earthquake damage.


Maintenance Is Serious   Maintenance is a serious concern because “essential maintenance and
Concern                  repair requirements have long been unfunded,” according to OBO
                         documents. In May 2002, State estimated that its repair backlog to be
                         about $736 million. For the primary office buildings alone, maintenance
                         needs exceed $316 million, with the primary building at more than one-
                         third of all posts having more than $1 million in maintenance
                         requirements. OBO projects that maintenance costs will increase over
                         time because many of the facilities are so old and antiquated, some dating
                                             th           th
                         back to the late 19 and early 20 century. Our visits to four posts
                         provided numerous examples of maintenance problems. All of the posts
                         we visited had buildings with serious maintenance concerns that are

                         Page 17                                                              GAO-03-557T
                          common to old and deteriorating buildings, such as sinking foundations,
                          crumbling walls, bursting pipes, and electrical overloads.


Office Space Is Crowded   Although there are no specific criteria to measure the adequacy of office
                          space, OBO has provided posts a questionnaire to help them evaluate
                          space needs. Based on post inputs, OBO’s Long-range Overseas Buildings
                          Plan describes space conditions at posts where it plans a new facility or
                          major rehabilitation. We counted 96 posts mentioned in the plan where
                          OBO described the office space as being crowded or poorly configured.
                          During our post visits, we verified that crowded and poorly configured
                          office space is a problem. This was particularly true in the controlled
                          access areas of the embassies where classified information is stored and
                          processed. Because of the special requirements of these areas, it is
                          generally not feasible to lease additional space as the embassies have done
                          to expand office space for unclassified work. One post had severe
                          overcrowding in its chancery. To cope, the post resorted to creating
                          workspaces under a stairway and in storage areas. One office stacked a
                          printer on top of shelving that can only be accessed with a stepladder in
                          order to make room for another small workstation. This post used trailers
                          located behind the chancery to augment office space. In addition, all of
                          the posts expressed concern that the crowded conditions would get worse
                          because they anticipate staff increases to handle additional
                          responsibilities, such as performing more rigorous screening of visa
                          applicants. Several ambassadors told us that the dispersion of office space
                          in multiple buildings hindered operational efficiency. This is because
                          personnel spend significant amounts of time going from one facility to
                          another to conduct daily business.


Information Technology    I will now briefly discuss information technology capabilities at overseas
Issues                    posts, which, along with office facilities, are an important part of
                          diplomatic readiness. State has long been plagued by poor information
                          technology capabilities. In 1999, the Overseas Presence Advisory Panel
                          reported that many posts are equipped with obsolete systems that prevent
                          effective interagency information sharing.8




                          8
                          America’s Overseas Presence in the 21st Century: The Report of the Overseas Presence
                          Advisory Panel.



                          Page 18                                                                  GAO-03-557T
The Secretary of State has made a major commitment to modernizing
information technology. According to State officials, the department
invested $236 million in fiscal year 2002 on key modernization initiatives
for overseas posts and plans to spend $262 million over fiscal years 2003
and 2004. State reports that its information technology is in the best shape
it has ever been, and embassy personnel at the four posts we visited
agreed, noting that they now have improved Internet access and upgraded
computer equipment. State is now working to replace its antiquated cable
system with the State Messaging and Archive Retrieval Toolset (SMART),
a new integrated messaging and retrieval system.

We have raised a number of concerns regarding State’s management of
information technology programs, and believe that State’s information
technology modernization efforts warrant management attention and
oversight to ensure that State is following effective management practices.
In 2001, we reported that State was not following proven system
acquisition and investment practices in attempting to deploy a common
overseas knowledge management system.9 State canceled this initiative
because it could not get buy-in from other foreign affairs agencies. In
2001, we reported on State’s information security problems, including
weaknesses in access control that place information resources at risk of
unauthorized access.10 As State continues to modernize information
technology at overseas posts, it is important that it employs rigorous and
disciplined management processes on each of its projects and that it
addresses its information security weaknesses. This is particularly
important on the SMART system, which State acknowledges is an
ambitious effort. The Office of Management and Budget recently reduced
funding for the system because of concerns that State was not employing
effective management processes.




9
 U.S. General Accounting Office, Information Technology: State Department-Led Overseas
Modernization Program Faces Management Challenges, GAO-02-41 (Washington, D.C.;
Nov. 2001); and U.S. General Accounting Office, Foreign Affairs: Effort to Upgrade
Information Technology Overseas Faces Formidable Challenges,
GAO/T-AIMD/NSIAD-00-214 (Washington, D.C.; June 2000).
10
 U.S. General Accounting Office, Major Management Challenges and Program Risks:
Department of State, GAO-01-252 (Washington, D.C.: Jan. 2001).



Page 19                                                                 GAO-03-557T
                         State continues to make security upgrades at some posts, but it is shifting
Replacing Buildings Is   its resources toward replacing existing facilities with new, secure embassy
State’s Long-term        compounds or substantially retrofitting existing, newly acquired, or leased
                         buildings. As shown in figure 12, funding for State’s capital projects has
Solution to Physical     increased from $9.5 million in fiscal year 1998 to a requested $890 million
Security Problems        in fiscal year 2004. State is still in the early phase of this multiyear,
                         multibillion-dollar construction program. I will discuss this program
                         briefly and then make several preliminary observations regarding State’s
                         management of this program.

                         Figure 12: Appropriations for Upgrading and Replacing Diplomatic Posts, Fiscal
                         Years 1998-2004




                         Fiscal Year 2002 includes $200.5 million from Emergency Supplemental Act, 2002.




                         Page 20                                                                           GAO-03-557T
Summary of State’s        Following the 1998 east Africa bombings, State identified about 185 posts
Requirements and Plans    needing replacement facilities in order to meet security standards. As of
for Future Construction   February 10, 2003, State had begun to replace 25 of these posts with new
                          or retrofitted embassy and consulate compounds. From fiscal year 1999
                          through fiscal year 2003, State has received approximately $2.7 billion for
                          its new construction program. OBO officials estimated that beginning in
                          fiscal year 2004, it will cost an additional $16 billion to replace facilities at
                          the remaining 160 posts. OBO plans to construct these replacement
                          facilities on embassy/consulate compounds that will contain the main
                          office building, all support buildings, and, where necessary, a building for
                          the U.S. Agency for International Development.

                          To help manage this large-scale construction program, OBO developed the
                          Long-range Overseas Buildings Plan, first published in July 2001 and most
                          recently updated in April 2002. The latest version of the plan outlines and
                          prioritizes proposed capital projects over 6 years, from fiscal year 2002
                          through fiscal year 2007, based on input from State’s Bureau of Diplomatic
                          Security, regional bureaus, and agencies with overseas presence.

                          According to the April 2002 plan, State plans to fund the replacement of
                          facilities at 81 posts at an estimated cost of $7.9 billion from fiscal year
                          2002 through fiscal year 2007. As shown in figure 13, the majority of these
                          projects are planned for Africa and Europe. OBO plans to release the next
                          update of the Long-range Overseas Buildings Plan by the end of March
                          2003.




                          Page 21                                                              GAO-03-557T
Figure 13: Plans for Post Replacement Projects, Fiscal Years 2002-2007




                                        Of State’s 25 post replacement projects funded after the 1998 embassy
                                        bombings, State has completed the construction of 2 new embassy
                                        compounds and major retrofits of 2 newly acquired buildings that will




                                        Page 22                                                       GAO-03-557T
serve as embassies.11 The remaining 21 projects are currently in the
construction process. These consist of 18 new embassy and consulate
compounds, 1 consulate compound renovation, and 2 newly acquired
buildings undergoing major retrofitting for use as embassies (see fig. 14).
State plans to initiate another 7 post replacement projects in fiscal year
2003 and 8 post replacement projects in fiscal year 2004. These projects
will be completed in fiscal years 2005 and 2006, respectively, if they adhere
to State’s planned 2-year construction schedule.




11
 Capital project figures exclude support buildings such as Marine Security Guard Quarters,
U.S. Agency for International Development buildings, and General Services Operations
buildings that were built independently of new embassy compounds.



Page 23                                                                     GAO-03-557T
Figure 14: Scheduled Completion of Capital Projects Funded Fiscal Years 1999-2004*




                                        *As of February 10, 2003. Excludes smaller capital projects such as Marine Security Guard Quarters,
                                        U.S. Agency for International Development Buildings, and General Services Offices. Assumes a 2-
                                        year construction period for projects funded in 2003 and planned in 2004.


                                        Regarding the four posts we visited, a replacement facility is under
                                        construction at one post and fiscal year 2006 funding is scheduled for
                                        replacement facilities at two posts. The replacement facility for the fourth
                                        post is not currently scheduled; however, post officials told us that a
                                        replacement facility at their location would be included in OBO’s March
                                        2003 update of the Long-range Overseas Buildings Plan. Assuming that
                                        funding were made available to replace facilities for the three posts in
                                        fiscal year 2006, construction would not be completed until about 2009.
                                        Ambassadors at two of these posts expressed concern that it would be
                                        difficult to wait that long for a solution to their facility needs and that
                                        interim measures were needed.


                                        Page 24                                                                            GAO-03-557T
                       We are currently reviewing State’s capacity and performance in
State’s Management     implementing its large-scale construction program. Two important
of the Recently        questions for program oversight by this and other committees are: (1) Is
                       the construction of embassies and consulates proceeding on time and on
Expanded               budget? (2) Do OBO and its contractors have the capacity to properly
Construction Program   manage the program and ensure that funds are used wisely? State is in the
                       early stages of its expanded construction program and, therefore, has not
                       yet established a clear track record that would provide complete answers
                       to these questions. However, we do have several observations based on
                       our ongoing work.

                       First, OBO has made a number of positive changes in its management of
                       capital projects as the construction program has expanded over the past
                       few years. As mentioned earlier, OBO developed the Long-range Overseas
                       Buildings Plan in July 2001, an action we had previously recommended.12
                       This plan represents a major improvement in the management of embassy
                       construction because it provides decision makers with an overall sense of
                       proposed project scope and funding needs, and sets performance targets
                       that can be compared with actual performance. Further, in February 2002,
                       OBO leadership convened the Industry Advisory Panel. The panel consists
                       of volunteer industry representatives who meet quarterly to discuss issues
                       related to OBO’s construction program and advise OBO management on
                       industry’s best practices. Moreover, senior OBO management has
                       increased its oversight of ongoing capital and other projects. For example,
                       each month, the OBO Director holds a 2-day Project Performance Review
                       meeting to review the progress and problems of all ongoing OBO projects
                       in detail. In addition, OBO is requiring contract administration training for
                       all senior field staff who are to supervise new embassy and consulate
                       construction.

                       Second, State is taking steps to accelerate the construction process,
                       reduce construction costs, and further enhance physical security
                       conditions of new buildings. For example, OBO has developed a standard
                       embassy design for use in most projects and has moved away from a
                       “design-bid-build” method of contracting toward a “design-build” method.
                       Use of a standard design and design-build contracting has the potential to
                       reduce project costs and the time taken to implement projects. Table 2
                       provides details of the three standard designs that OBO has developed for



                       12
                        U.S. General Accounting Office, Embassy Construction: Better Long-term Planning Will
                       Enhance Program Decision-making, GAO-01-11 (Washington, D.C.: Jan. 2001).



                       Page 25                                                                 GAO-03-557T
small, medium, and large posts. OBO has set a goal of a 2-year design and
construction period for its standard embassy design buildings, which, if
met, would reduce the amount of time spent in design and construction by
almost a year.13

Table 2: Characteristics of Standard Embassy Designs for New Capital Projects

                                           General size                General construction cost a
Small new office building                  46,285 gross square feet    $45 million
Medium new office building                 79,653 gross square feet    $65 million
Large new office building                  121,632 gross square feet   $85 million
Source: Long-range Overseas Buildings Plan, April 2002.
a
This figure is in 2002 dollars and excludes value added tax and land costs.


In addition, OBO and the Bureau of Diplomatic Security are actively
seeking to incorporate advanced technologies into the construction
program. Exhibit 5, a video clip from the State Department showing the
performance of new windows and building materials, indicates that these
technologies show promise of providing an even greater level of physical
security for personnel operating in new buildings.

While OBO has taken positive steps, we do have concerns regarding
requirements for staffing levels at locations where OBO is planning to
build a new embassy compound. We believe that improvements are
needed in how the State Department and other agencies project staffing
requirements for new embassies. In April 2003, we will report to the
Chairman of the House Government Reform Committee’s Subcommittee
on National Security, Emerging Threats, and International Relations that
staffing projections for new embassy compounds are developed without a
systematic approach or comprehensive assessments of the number and
types of staff who would be needed in the future. Without adhering to a
systematic process for developing future staffing needs at U.S. embassies
and consulates, the U.S. government risks building the wrong-sized
facilities, which could lead to security concerns, additional costs, and
other work inefficiencies.




13
 Current new post construction projects have a contract schedule averaging 2 years and 11
months to complete. Only one project completed thus far—the new embassy compound in
Kampala, Uganda—has used the standard embassy design.



Page 26                                                                              GAO-03-557T
Funding and Timelines for   State’s timeline for completing the replacement of all 160 remaining posts
Completing the              will depend on the amount of funding it receives for the construction
Construction Program        program. For fiscal year 2004, State’s Long-range Overseas Buildings Plan
                            called for almost $2 billion to fund the design and/or construction of 19
                            capital projects; in contrast, the President’s proposed fiscal year 2004
                            budget requested $890 million for 8 new diplomatic posts. As shown in
                            figure 15, at the proposed fiscal year 2004 rate of replacement, it would
                            take about 20 years to fund and 22 years to complete construction of the
                            estimated 160 remaining posts (assuming a 2-year design and construction
                            period). Figure 15 also shows that this timeline would be shortened if
                            State receives more funds annually. According to an OBO projection, the
                            program to replace the remaining 160 posts could be completed in 12
                            years if OBO receives $1.4 billion annually for new capital projects.

                            Figure 15: Projected Timelines for Funding Facility Replacement Projects




                            In a January 2001 report,14 we identified potential industry bottlenecks and
                            management issues that could affect State’s ability to further expand and
                            increase the pace of the construction program. These potential problems


                            14
                             GAO-01-11.



                            Page 27                                                              GAO-03-557T
                  include the availability of appropriate sites for new buildings, particularly
                  in major urban areas; appropriately cleared U.S. labor; construction
                  materials; and unique security materials, such as glazing for windows and
                  forced entry- and ballistic-resistant doors. Further, State and its
                  contractors may require more management resources to implement and
                  manage the program. In our continuing work for the committee, we will
                  be considering these and other issues related to State’s and its contractors’
                  performance in building new embassies and consulates.


                  Mr. Chairman, this concludes my prepared statement. I will be happy to
                  answer any questions you or other members of the committee may ask.


                  For future contact regarding this testimony, please contact me at (202)
Contact and       512-4128 or at fordj@gao.gov. Individuals making key contributions to this
Acknowledgments   testimony include John Brummet, Janey Cohen, Cynthia Jackson, Judy
                  McCloskey, Nanette Ryen, Michael Simon, and Joe Zamoyta.




(320157)
                  Page 28                                                          GAO-03-557T