Thursday, May 28, 2015

Rep. Jason Chaffetz Plugs His Next Oversight Hearing (New Construction at U.S. Embassy Mexico)

Representative Jason Chaffetz was interviewed by CBS News today and he dropped the bombshell news that there are some problems with the big new U.S. Embassy construction project in Mexico City.

It is an embassy that was supposed to cost $577 million to build, but the construction estimate has gone up by one third -- and the State Department hasn't even broken ground yet.

No one disputes that the current U.S. Embassy in Mexico City is crowded, outdated and needs to be replaced. So four years ago the State Department bought a 15 acre plot in a former industrial district for $120 million. But there was a catch: the site had housed a Colgate-Palmolive factory for decades, which left behind hazardous waste. Colgate has been cleaning the site but it's been three and a half years and it's still not ready for construction.

"It's a bit of a fiasco," said Rep. Jason Chaffetz, R-Utah.

Fiasco? I've seen fiascos, and this isn't one yet. The Mexico City project is certainly a Real Big Deal for the Bureau of Overseas Buildings Operations, its first new embassy job to be executed from start to finish under OBO's Design Excellence program. Also very costly, which is a given due to the large size of U.S. Embassy Mexico, with over 1,300 'desk positions' to be accommodated.

There are also environmental remediation problems to be worked out with the previous owner of the construction site. That site is a so-called 'brown field,' a property that had a prior industrial use and is being redeveloped, in contrast to a 'green field' or previously undeveloped property. Building in brown fields is part of the whole design excellence whim-wham, since it allows new embassies to be located near city centers rather than on their edges or beyond (which is a common complaint about Fortress Embassies). The Mexico City project is squarely in the center of the city, and only about 4 kilometers from the current embassy location.

As for the high cost of the project, that will presumably be offset by the proceeds of sale of existing embassy properties, some of which are in super-prime locations. That intention was announced way back in 2010 when the embassy signed the contract to acquire the construction site:
Mexico City, October 27, 2010 —Ambassador Anthony Wayne, on behalf of the U.S. Department of State, today signed a contract with Colgate-Palmolive, S.A. de C.V., to acquire a property in the New Polanco area of Mexico City in order to construct a new United States Embassy to replace the existing building on Paseo de la Reforma … The existing embassy compound on Reforma, as well as any excess land at the new site, will be offered for sale at a later date.

Fourteen sites are now up for sale, which means that the taxpayers might come away from this deal with a profit.

By the way, there is absolutely nothing new or newsworthy in this matter, no matter how breathlessly Rep. Chaffetz revealed it all to CBS News. You could read all about the Mexico City project, and Congressional concern for costs and environmental remediation, in the last appropriations bill for STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS:
Enhanced notification requirements.—The Congressional Budget
Justification for Department of State Operations, Fiscal Year 2015 estimates the cost for construction of the New Embassy Compound in Mexico City, Mexico at $763,500,000. The Committee is troubled that this is an escalation in cost of more than 38 percent in the two years since the initial estimate was provided. Cost increases of this magnitude, as well as reports of other new embassy project cost escalations, are of great concern to the Committee. Accordingly, in order to enhance the oversight of new construction projects, the Committee recommendation modifies and expands section 7004(d) of the bill to require that all notifications for the purchase of land and for the award of construction contracts be subject to the regular notification procedures of, and prior approval by, the Committees on Appropriations.

Notifications made pursuant to section 7004(d) shall include the following information, at a minimum: (1) the location and size of the property to be acquired, including the proximity to existing United States diplomatic facilities and host government ministries; (2) the justification of need for acquiring the property and construction of new facilities; (3) the total projected cost of the project delineated by site acquisition, project development, design/construction, and any other relevant costs; (4) any unique requirements of the project which may drive up the cost of the project, such as consular workload, legal environment, physical and/or security requirements, and seismic capabilities; (5) any religious, cultural, or political factors which may affect the cost, location, or construction timeline; (6) the current and projected number of desks, agency presence, and the projected number of United States direct hire staff, Locally Engaged Staff, and Third Country Nationals; (7) the current and projected number of beds, if applicable; (8) the most recent rightsizing analysis; and (9) a justification for exceeding the staffing projections of such rightsizing analysis, if applicable. Additionally, the Committee directs the Department of State to carefully review the design and cost of the Mexico City new embassy compound and to provide updated design plans and options for reducing the cost of the facility to the Committees on Appropriations prior to the obligation of additional funds for this project from funds made available in this Act or prior Acts.

Watching Rep. Chaffetz do his song and dance for CBS News was more entertaining than reading that dry appropriations bill language, I will concede. But he brings nothing new of substance.

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