DB integrates design and construction responsibilities into a  single contract. Aesthetics. In 2010, then U.S. Quality. Location. This issue also arose in a 2007 report to State entitled The  Embassy of the Future. Functionality. Key elements under the Excellence approach  include (1) allotting funding and time for developing custom designs; (2)  hiring leading design firms for projects and promoting innovation in  design; (3) conducting peer reviews of designs; and (4) using bridging  and DBB project delivery (rather than DB). New design firms OBO has  hired for Excellence projects have faced some challenges, and OBO only  recently began assessing their performance. OBO’s staff had split opinions regarding the Excellence  approach compared to the SED approach. Thus OBO did not contract with design firms to develop  customized designs. OBO’s Excellence approach—using bridging and DBB—also represents a  new investment in up-front design time, potentially  up to 2 additional  years (compared to the SED approach) to develop custom, innovative  designs before OBO contracts for construction. OBO officials  believe that greater design control under Excellence will improve  embassies’ appearance in representing the United States, functionality,  quality, and operating costs. However, OBO has not defined performance measures specific to  Excellence goals at either the strategic or project level, such as greater  adaptability to individual locations, functionality, or environmental  sustainability. OBO also lacks a centralized database to broadly manage  Excellence by enabling, for example, effective reporting on projects’  design and construction costs and schedules. Without performance  measures specific to Excellence and sufficient systems to collect and  analyze relevant data, OBO will not be able to demonstrate whether the  performance of Excellence projects over time justifies the increased  emphasis on and investment in their designs. The consultant’s report made numerous recommendations to OBO,  including that OBO (1) seek to manage and clarify change internally; (2)  assign dedicated staff to be responsible for instituting change; (3) utilize  more standardization for project requirements, while acknowledging the  recommendation may seem counterintuitive in light of OBO’s move away  from the SED; (4) further define the Excellence program to capture the  new standards and processes OBO was instituting; and (5) train OBO  personnel and modify internal systems and practices to be compatible  with the new OBO project delivery methods and design standards. The largest percent of  OBO staff who responded generally agreed with the statement: “Since  2011, OBO has provided clear and comprehensive technical standards  and guidelines related to my job.” The largest percent of OBO staff who  responded generally disagreed with the statement: “Since 2011, OBO has  provided clear and comprehensive strategic or long-term guidance to  implement its planning, design, construction, and maintenance approach.”

		OBO Lacks Performance Measures to Evaluate the Potential Costs and Benefits of Excellence

While OBO has established Excellence and taken some steps to  implement it, OBO has not established strategic or project-level  performance measures to evaluate and communicate the effectiveness of  the Excellence approach in delivering embassies under the Capital  Security Construction Program. Performance measures are essential  tools for managers to evaluate progress toward a program’s objectives. GAO’s Standards for Internal Control in the Federal Government state  that agencies’ internal controls should include the establishment and  review of performance indicators. In its written comments, State concurred with our four  recommendations and described actions planned or under way to  address each of them. Appendix I: Objectives, Scope, and Methodology

This report examines (1) reasons for the Department of State’s (State)  shift to its Excellence approach, (2) key elements and trade-offs of the  new approach, and (3) the extent to which State has established  guidance and tools to implement and evaluate its Excellence approach. To conduct this review, we obtained and analyzed information from State  policy, planning, funding, and reporting documents, administrative  memos, and select project documentation. Appendix II: Results of GAO’s Survey of Staff of the Department of State’s Bureau of Overseas Buildings Operations

We conducted a web-based survey of the Department of State’s (State)  Bureau of Overseas Buildings Operations (OBO) staff from July 15  through August 12, 2016, soliciting their views on the sufficiency of OBO’s  strategic vision, policies, procedures, and technical guidance for the  Excellence approach to the design and construction of U.S. embassies  and consulates, as well as any particular efficiencies or challenges  brought about by the approach. Selected Survey Comments on Concerns with SED  The SED program was a failure for site specific implementation.
Why GAO Did This Study

In 1998, terrorists bombed the U.S. embassies in Nairobi, Kenya, and Dar es Salaam, Tanzania, killing over 220 people and injuring 4,000. In 1999, State began a new embassy construction program, administered by OBO, which to date has received $21 billion, according to State. OBO's primary goal was to provide secure, safe, and functional workplaces, and it adopted SED with a streamlined, standard design for all embassies. In 2011, OBO replaced the SED with the Excellence approach, which makes use of customized designs for each embassy.
GAO was asked to review the implementation of Excellence. This report examines (1) the reasons for State's shift to the Excellence approach, (2) key elements and tradeoffs of the new approach, and (3) the extent to which State has established guidance and tools to implement and evaluate its Excellence approach. GAO analyzed information from State policy, planning, funding, and reporting documents and interviewed State and industry officials. GAO also surveyed OBO staff about, among other things, the sufficiency of OBO's policies, procedures, and technical guidance for the Excellence approach. GAO will examine project cost and schedule issues in a subsequent report.

What GAO Found

In 2011, the U.S. Department of State's (State) Bureau of Overseas Buildings Operations (OBO) established the Excellence approach in response to concerns regarding the aesthetics, quality, location, and functionality of embassies built using its Standard Embassy Design (SED). The SED utilized a standard prototypical design for new embassies and consulates along with a streamlined delivery method combining responsibility for design and construction under a single contract. Under the Excellence approach, OBO now directly contracts with design firms to develop customized embassy designs before contracting for construction. OBO officials believe that greater design control under Excellence will improve embassies' appearance in representing the United States, functionality, quality, and operating costs.
Excellence consists of several key elements and involves trade-offs. For example, OBO now allots time and funding to develop customized designs and hires leading design firms to produce them. These design firms have faced initial adjustment challenges designing U.S. embassies, and OBO only recently began evaluating their performance as required by federal regulation. OBO's new approach poses cost and schedule trade-offs since, for example, OBO now has greater design control but may also be responsible if design problems are identified during construction. GAO's survey found that OBO staff who responded held split or conflicting opinions on Excellence compared with SED.
While OBO has established guidance to implement Excellence, it lacks tools to fully evaluate the performance of this new approach. Performance measures are essential tools for managers to evaluate progress toward a program's goals, as noted in Standards for Internal Control in the Federal Government . However, OBO has not established performance measures to specifically evaluate and communicate the effectiveness of Excellence in delivering embassies. Moreover, OBO's bureau-wide strategic measures do not address Excellence priorities, such as greater adaptability to individual locations, functionality, or sustainability. OBO also lacks a reliable system to monitor operating performance, such as building energy usage, and a centralized database to broadly manage the Excellence program, to include effectively reporting on projects' design and construction costs and schedules. Without performance measures and reliable systems to collect and analyze relevant data, OBO cannot fully assess the value of shifting to the Excellence approach and away from the SED.

What GAO Recommends

GAO is making four recommendations that State take several steps to strengthen performance measures and reporting, monitoring mechanisms, and data systems for the Excellence approach. State concurred with all four recommendations.