Agencies will help shoulder cost of new embassy construction

Federal agencies that send workers overseas to U.S. embassies will have to pony up to help pay for new embassy construction under a provision signed by President Bush last month.

The $388 billion spending bill, which provides funding authority for most government agencies outside of the Homeland Security and Defense departments, authorizes the creation of a Capital Security Cost-Sharing Program. Under the program, agencies will pay fees to the State Department based on how many staffers they send to embassies abroad.

According to estimates released by State's Overseas Buildings Operations division last year, State will bear the bulk of the cost, with its share growing from $163 million in 2005 to $813 million in 2009. The Defense Department will pay fees ranging from $27 million in 2005 to $135 million in 2009. The portion from the U.S. Agency for International Development will increase from $20 million to $101 million. Justice's share will rise from $14 million to $68 million, while the Homeland Security Department will pay $8 million in 2005 and $38 million in 2009.

In total, State estimates that it will need about $17.5 billion to speed the construction of 150 new overseas facilities that will replace existing, but antiquated facilities. Without cost-sharing, State estimates that it would take 26 years to complete funding; with it, construction will last 14 years.

The impetus for the cost-sharing program was the 1998 terrorist bombings of U.S. embassies in Kenya and Tanzania that killed more than 250 people and wounded more than 4,000. After the bombings, a presidential commission inventoried overseas facilities and found most were overcrowded and did not meet current safety standards.

The Bush administration endorsed the cost-sharing plan as a means of speeding new embassy construction, while also forcing agencies to right-size their overseas presence. The fees, the administration believes, will provide incentive for agencies with employees abroad to carefully consider whether those jobs could be performed in the United States.

Last year, several agencies protested the cost-sharing initiative in letters to the Government Accountability Office, which conducted a review of the proposal. In letters to the GAO, representatives from the Agriculture, Commerce, Health and Human Services, Homeland Security, and Justice departments, as well as the Library of Congress, said the report posed too few critical questions of State's plan and the impact it would have on the agencies' missions.

Otto Wolff, chief financial officer for the Commerce Department, for example, noted that Commerce would not have a say in which embassies would be built, the order in which they'd be constructed, or the space Commerce employees would occupy within them.

At the same time, the agencies added that if congressional appropriations did not cover the cost of agency contributions, then the program would drain money from the worthwhile initiatives that they oversee. GAO, however, accepted State's analysis of the program's benefits.

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