U.S. Department of State Fiscal Year 2019 Agency Financial Report

substandard facilities, which sometimes has implications for the safety and security of personnel. In a notable example of this concern, for a construction project at Camp Eggers in Afghanistan, the Department used a clause in a contract for protective services to facilitate construction, even though this type of contract vehicle had not previously been used for the type of extensive construction work planned at this location. 15 As a result of the contract vehicle, Bureau of Diplomatic Security officials were assigned to oversee the work, and they acknowledged that DS had very little, if any, expertise related to construction or construction-related contracts. 16 There were numerous subsequent problems, including a failure to take meaningful corrective action against the contractor even though it missed milestones and failed to comply with contract requirements. We found that the Department ultimately terminated the project for convenience after very little work had been accomplished at a cost of $103.2 million. 17 Our FY 2019 work also examined the commissioning phase in construction contracts— the systematic process of assuring that all building systems perform interactively, in accordance with the design documentation and intent, and with the owner’s operational needs. Typically, all major systems should be commissioned before the Department declares new buildings substantially complete and, thus, allows for their occupancy by personnel. However, in a report that addressed the commissioning of two residential buildings at Embassy Kabul, we found that—in order to accommodate the Ambassador’s request to expedite occupancy as a result of security concerns—the Bureau of Overseas Buildings Operations (OBO) declared the buildings substantially complete even though 8 of 22 systems were not commissioned. We reported that the way in which OBO managed construction at Embassy Kabul—as a single project with one 15 OIG, Evaluation of the Bureau of Diplomatic Security’s Aegis Construction Contract at Camp Eggers, Afghanistan (ESP-19-04, July 2019). 16 ESP-19-04, July 2019. 17 ESP-19-04, July 2019. 18 OIG, Audit of the Bureau of Overseas Buildings Operations Commissioning of Diplomatic Housing at U.S. Embassy Kabul, Afghanistan (AUD-MERO-19-37, August 2019). 19 OIG, Management Assistance Report: Modernizing Processes To Maintain Overseas Building Operations Commissioning Documentation Is Needed (AUD-MERO-19-31, June 2019). 20 OIG, Inspection of Embassy Nairobi, Kenya (ISP-I-19-08, October 2018). completion date for multiple buildings constructed over the course of many years—contributed to a situation where the Department essentially had to choose between moving staff into hardened structures and completing commissioning. 18 We also identified weaknesses in how OBO maintains commissioning documentation, which serves as the historical record of key decisions made throughout the project planning and delivery process. In one review, we found some documents were completed in a hard-copy format and placed in binders. This practice is concerning because the commissioning process can take years to complete, and hard-copy tests cannot be easily and simultaneously accessed by stakeholders onsite and in Washington. Additionally, we found OBO uploads commissioning documentation only at the end of a construction project, which inhibits its visibility and increases the risk that documents could be inadvertently lost or not uploaded. We concluded that the Department should identify industry best practices for automating commissioning documentation, which would benefit OBO construction projects worldwide. 19 Our inspections work has also identified issues related to oversight of construction contracts. For example, at Embassy Nairobi, Kenya, staff from the Bureau of International Narcotics and Law Enforcement Affairs (INL) accepted a renovated building in February 2017 without an adequate inspection of the construction. More than 15 months after acceptance, the building still could not be used as intended, and the bureau planned to execute a second phase of renovations, which would include repairing the deficiencies from the first phase of work. We found the bureau also failed to include a warranty in the contract terms and conditions for the renovation and repair of the building, thereby limiting its recourse against the contractor. 20 2019 A gency F inancial R eport U nited S tates D epartment of S tate | 115 INSPECTOR GENERAL’S STATEMENT ON THE DEPARTMENT’S MAJOR MANAGEMENT AND PERFORMANCE CHALLENGES | OTHER INFORMATION