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Iraq Embassy Cost Rises $144 Million Amid Project Delays
Planning, Workmanship Cited as Problems

By Glenn Kessler
Washington Post Staff Writer
Sunday, October 7, 2007

The massive U.S. embassy under construction in Baghdad could cost $144 million more than projected and will open months behind schedule because of poor planning, shoddy workmanship, internal disputes and last-minute changes sought by State Department officials, according to U.S. officials and a department document provided to Congress.

The embassy, which will be the largest U.S. diplomatic mission in the world, was budgeted at $592 million. The core project was supposed to have been completed by last month, but the timetable has slipped so much that the State Department has sought and received permission from the Iraqi government to allow about 2,000 non-Iraqi construction employees to stay in the country until March.

Two key office buildings, including the new chancery, will not be finished until early 2009, according to the document.

Completing the sprawling, 21-building compound is viewed by some officials as a key element of building a sustainable, long-term diplomatic presence in Baghdad. It will allow U.S. personnel to vacate their offices in Saddam Hussein's former Republican Palace and consolidate operations that are spread across the Green Zone. The new facility is also intended to provide diplomats with housing that is better protected to withstand mortar and rocket attacks.

The growing price tag and delayed opening have alarmed members of Congress, some of whom regard the troubled project as the latest in a series of State Department management problems in Iraq. The department has been criticized for failing to send enough reconstruction specialists to assist U.S. forces in Baghdad and for not providing adequate oversight of its principal private security force, Blackwater USA, whose personnel have been accused of using excessive force to protect U.S. diplomats.

Rep. Tom Lantos (D-Calif.), chairman of the House Foreign Affairs Committee, wrote in a letter to Deputy Secretary of State John D. Negroponte last week that "disturbing problems" in the Baghdad construction and "other incidents involving separate embassy construction projects raise concerns about the adequacy of the Department's management of our overseas building operations."

State Department spokesman Sean McCormack said he does not know when the embassy will be ready. "I can't tell you right now when it will open," he said Friday. "Now, that's not to indicate to you that it's going to be a lengthy period of time. It could be a brief period of time. But the fact is, I can't give you an opening date right now."

The Baghdad project has been complicated by a dispute between the U.S. ambassador in Iraq, Ryan C. Crocker, and the top Washington-based official charged with overseeing the project. That official, James L. Golden, has been barred from entering Iraq by Crocker because he allegedly disobeyed embassy orders during an investigation of a worker's death, sources said.

The sources, speaking on the condition of anonymity because they were revealing sensitive internal matters, said Golden -- who is a contract employee -- was suspected of destroying evidence in the case. When confronted by embassy officials, he allegedly told them he worked for Washington, not the embassy. Crocker then banished him from the country.

Golden did not return calls to his office, and Crocker declined to comment. Pat Kennedy, the director of the State Department's Office of Management Policy, confirmed that Crocker would not allow Golden to return to Iraq, saying there was "a discussion about following procedures at post."

Department officials contend that some of the delays are a result of poor workmanship by the project's primary contractor, First Kuwaiti General Trade and Contracting, a Middle Eastern firm. Apparent building and safety blunders in a facility to house embassy security guards have made it unsafe to open. Originally due to open last December, the facility is still not operational because of formaldehyde fumes in 252 prefabricated residential trailers.

First Kuwaiti denies that the formaldehyde levels are unacceptable, but Baghdad-based U.S. officials have tested the trailers and demanded that they be brought up to an acceptable standard, according to an exchange of e-mails in recent weeks between the company and State Department officials obtained by The Washington Post.

While embassy officials have blamed First Kuwaiti for many of the problems and have chafed at restrictions on access to the construction site, another arm of the State Department, Overseas Building Operations, is backing First Kuwaiti. A Sept. 18 internal report on problems with the guard facility's electrical system, prepared for Charles E. Williams, the director of building operations, suggested that KBR, the former Halliburton subsidiary hired to run the facility, was responsible for overloading the system. The facility is "electrically safe and functional," the report said.

Lantos, in his letter, suggested that "significant contractor deficiencies" throughout the complex, including the problems with the guard facility, are responsible for the delays.

In an interview, Lantos said he had been told by a top State Department official that during a recent test of the embassy sprinkler system, "everything blew up." He said he has "very serious concerns" about the project that he intends to raise with Secretary of State Condoleezza Rice when she testifies before his committee this month.

The 32-page State document provided to Congress describes much of work to be funded with the additional $144 million as "follow-on projects" to the original plans. But U.S. officials involved in the construction said the projects are partly the result of new staffing needs and an embassy reorganization that could greatly delay completion of the compound.

Officials said some of the new work is required because Rice reorganized embassy operations this year. A decision to locate Army Gen. David H. Petraeus, the top U.S. commander in Iraq, and his staff in the new embassy will require the conversion of normal office space into a facility secure enough to handle classified material. The reconfiguration of the chancery will cost $14.7 million.

The cafeteria was originally designed for the light duty expected at a typical embassy, where people live in their own apartments and eat only lunch on the job. But now it is being redesigned, at a cost of $27.9 million, to provide three meals a day -- and to be rocket-, bomb- and mortar-proof.

Some officials report that substandard work and extensive problems have been discovered during infrequent site inspections of the new embassy. They suggested the new projects, which apparently will be completed by contractors other than First Kuwaiti, are designed to patch up the existing problems.

While some of the new costs could be covered by an existing supplemental funding request for Iraq, the State document said the department is still searching for ways to pay for nearly $70 million of the additional work.

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