In fiscal years 2009 and 2010, State awarded two contracts originally  worth $625.4 million in total to meet growing facility requirements at the  U.S. embassy in Kabul. In September 2011, State partially terminated the  2009 contract for the convenience of the government due to concerns, in  part, about performance and schedule delays and reduced the contract  value by $121.4 million. See table 1 for a summary of cost increases and decreases for the two  contracts. However, State did not properly follow these cost containment and risk  assessment policies, a fact that likely contributed to increased costs and  extended schedules in the 2009 and 2010 contracts. The risk assessment identified over 30 risks to the project. Further, a  senior State management official acknowledged that State did not fully  follow its cost and risk policies, in part because of the urgency of the  embassy’s facility needs, the security environment, and challenges in  supporting the surge in embassy staffing that was occurring.to this official, had the cost containment and risk assessment study  recommendations been more fully considered by senior management,  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. These factors contributed to increased construction cost and extended  schedule. State to Continue Use of Temporary Facilities but Lacks Specific Security Standards for Them, Contributing to Increased Costs and Extended Schedules

Since 2002, State has spent over $100 million to construct temporary  facilities on-compound in Kabul, and the post will likely continue to use  some of those temporary facilities. At that time, all temporary facilities on- compound will be nearly 5 years old or more, and a smaller subset on the  west compound will be more than 10 years old. 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 temporary offices and housing. Lack of Strategic Facilities Planning and Policy Has Led to Coordination Challenges in Addressing Future Needs in Kabul

State officials indicate that additional capital construction investments are  needed to address interim and future facility needs of the U.S. embassy  in Kabul, both on- and off-compound. Further Construction and Funding Needed to Address Unmet Post Facility Needs

State has made or plans to make approximately $2.17 billion in  infrastructure investments in Kabul. Lack of a Strategic Facilities Plan Impedes Efforts to Coordinate Construction in Kabul

			State Lacks a Strategic Facilities Plan in Kabul

State does not have a strategic facilities plan for Kabul that documents  current and future embassy needs, comprehensively outlines existing  facilities, analyzes gaps, provides projected costs, and documents  decisions made. State Assigns Responsibility for Planning, but OBO Lacks Policy Governing Strategic Facilities and Master Planning

According to State policy, OBO’s Office of Master Planning and  Evaluations (MPE) is responsible for directing and preparing both master  plans and long-range facilities plans for posts abroad, not PDC, which is  OBO’s project coordination and management office. Recommendations for Executive Action

To maintain State’s adherence to construction risk management policy,  guide future construction of temporary facilities, strengthen coordination  efforts to address facility needs of the U.S. embassy in Kabul, and clarify  strategic planning policy, we recommend the Secretary of State take the  following four actions:
Ensure existing cost containment and risk assessment policies are  followed in future Kabul construction projects. State partially concurred with our recommendation to consider  establishing minimum security standards or other guidance for the  construction of temporary structures, especially those used in conflict  environments. In the report we examine (1) the extent to which construction  cost and schedule have changed and why, (2) State’s use of temporary  facilities on-compound, and (3) State’s planning for projected embassy  facility needs.
Why GAO Did This Study

Since re-opening in 2002, the U.S. embassy in Kabul, Afghanistan, has experienced a dramatic increase in staffing, followed by a gradual drawdown. State has invested or plans to invest a total of $2.17 billion in U.S. facilities to address current and projected space needs. State awarded two contracts in 2009 and 2010 to construct additional on-compound housing and office facilities. State partially terminated one contract for the convenience of the U.S. government, and expanded the construction requirements of the second, affecting cost and schedule. State's Bureau of Overseas Building Operations is responsible for the planning, design, and construction of U.S. embassies. This report updates and expands upon GAO's previous work.
This report examines (1) the extent to which construction cost and schedule have changed and why, (2) State's use of temporary facilities on-compound, and (3) State's planning for projected embassy facility needs. GAO evaluated construction planning and contract documents and interviewed State and contractor officials in Washington, D.C., and Kabul.

What GAO Found

Cost and schedule have increased for the Kabul embassy construction project, in part due to incomplete cost and risk assessment. Cost for the 2009 and 2010 contracts has increased by about 27 percent, from $625.4 million to $792.9 million, and is likely to increase further. Projected completion has been delayed over 3 years to fall 2017. The Department of State (State) did not follow its cost containment and risk assessment policies, resulting in lost opportunities to mitigate risks. These risks, such as delays in the sequencing of the two contracts, eventually materialized, increasing cost and extending schedule. Unless State follows its policy, it may be unable to avoid or mitigate risks to cost and schedule on future projects.
Architect's Rendering of Embassy Compound upon Project Completion
Since 2002, State has built over $100 million in temporary buildings (intended for no more than 5 years' use) to meet space needs on-compound but has no security standards tailored to those facilities. On completing the project in 2017, all temporary facilities will be 5 to 10 years old, and their continued use is likely. Without security standards or other guidance to guide temporary facility construction in conflict environments, State inconsistently applied alternative security measures that resulted in insufficient and different levels of security for temporary offices and housing, as well as increased cost and extended schedules. Without temporary facility security standards or guidance, future construction in conflict environments could encounter similar problems.
State's lack of a strategic facilities plan and policies governing such planning has led to coordination challenges in addressing the embassy's future facility needs. Industry standards cite the value of plans that comprehensively assess existing facilities, identify needs, and document decisions on meeting those needs. In Kabul, however, State constructed a guard facility without proper design review or applying for a building permit, leading to fire safety deficiencies that State corrected at extra cost. Finally, State formally assigns responsibility for strategic facilities planning but lacks policy that governs implementation of such planning. State intends to make additional facility investments to address future facility needs. Without a strategic facilities plan and policy to guide its development, coordination to address these needs will continue to be difficult.

What GAO Recommends

GAO recommends that State (1) adhere to its cost containment and risk assessment policies, (2) consider establishing security standards or guidance for temporary buildings in conflict zones, (3) develop a strategic facilities plan for Kabul, and (4) clarify its strategic facilities and master planning policy. State concurred with the first, third, and fourth recommendations and partially concurred with the second.