GAO Releases Study on Embassy Construction

On Tuesday February 17, the Government Accountability Office publicly released a report on diminishing contractor participation in the State Department's Bureau of Overseas Buildings Operations (OBO) embassy construction program. The report was jointly requested by the Senate and House Foreign Relations Committees in August 2007 after a series of meetings with AGC, congressional staff and OBO. The report, titled Embassy Construction: Additional Actions Are Needed to Address Contractor Participation, highlights longstanding AGC concerns that have led to diminishing contractor participation in the OBO program. Additionally, the report examined proposed legal changes in OBO prequalification criteria, factors that have impacted contactors interest in participating in the program including risk allocation, project management, design issues, REA's, compressed schedules and the termination of partnering under the direction of former OBO Director Charles Williams. In addition to the GAO report, AGC's efforts led to an internal review by the State Department Inspector General released in August 2008 which examined of the entire OBO program and made over 50 recommendations to improve construction and management issues at the State Department. In a letter to AGC of America President Doug Barnhart on January 9, 2009, OBO highlighted many of the changes that are underway, including instituting project management, streamlining the Standard Embassy Design (SED) RFP, creating bridging documents, improving REA and change order management, address scheduling and other management issues which are intended to create a more equitable and consistent relationship with contractors. AGC and OBO remain committed to an open and honest dialogue as OBO undertakes these significant steps to improve its program.