Audit of Select Contract Administration Processes Related to the Construction of New Embassy Compound Mexico City, Mexico

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Date Issued

Wednesday, January 24, 2024

Submitting OIG

Department of State OIG

Other Participating OIGs

Department of State OIG

Agencies Reviewed/Investigated

Department of State

Components

Bureau of Overseas Buildings Operations

Bureau of Administration

Report Number

AUD-CGI-24-09

Report Type

Audit

Agency Wide

Yes

Number of Recommendations

Questioned Costs

Funds for Better Use

Open Recommendations

This report has 6 open recommendations.

Recommendation Number	Significant Recommendation	Recommended Questioned Costs	Recommended Funds for Better Use
1	Yes	$0	$0
OIG recommends that the Bureau of Overseas Buildings Operations, in coordination with the Bureau of Administration, develop, implement, and communicate a process to ensure that Project Directors for construction projects prepare independent government cost estimates that consider the impact that the modification will have on the overall schedule of the project to determine if extensions are justified. At a minimum, the process should include clarification of individual responsibilities and accountability.
2	Yes	$0	$0
OIG recommends that the Bureau of Overseas Buildings Operations (OBO) develop, implement, and communicate a process to ensure a separation of duties between OBO staff who receive the price proposal for a request for equitable adjustment related to a construction project and OBO staff who develop the independent government cost estimate for the construction project. At a minimum, the process should include clarification of individual responsibilities and accountability.
3	Yes	$0	$0
OIG recommends that the Bureau of Administration, in coordination with the Bureau of Overseas Buildings Operations, develop, implement, and communicate a process to ensure that Contracting Officers prepare prenegotiation objectives for modifications to construction projects of more than $25,000 and that Project Directors do not revise independent government cost estimates during or after negotiations in accordance with the Federal Acquisition Regulation and Department of State policy. At a minimum, the process should include guidance on documenting fair and reasonable pricing and any schedule extensions for the modification and a clarification of individual responsibilities and accountability.
4	Yes	$0	$0
OIG recommends that the Bureau of Administration, in coordination with the Bureau of Overseas Buildings Operations, develop, implement, and communicate a process to ensure that Project Directors for construction projects conduct and document price negotiations in accordance with the Federal Acquisition Regulation and Department of State policy. At a minimum, the process should include guidance on documenting fair and reasonable pricing and any schedule extensions for the modification and a clarification of individual responsibilities and accountability.
5	No	$0	$0
OIG recommends that the Bureau of Overseas Buildings Operations develop, implement, and communicate a process to ensure that Project Directors comply with the Construction Management Guide's process for all reporting requirements, including daily logs. At a minimum, the process should include clarification of individual responsibilities and accountability.
6	No	$0	$0
OIG recommends that the Bureau of Overseas Buildings Operations develop, implement, and communicate a process to ensure that Project Directors comply with the Construction Management Guide's requirement for developing and distributing a project procedures manual. At a minimum, the process should include clarification of individual responsibilities and accountability.