Category Archives: Budget

Snapshot: Defense Spending in NATO Member States

– Domani Spero

 

On September 2, President Obama arrived in Tallinn, Estonia. From September 4-5, he will be in Wales for the NATO Summit. There will be 60 world leaders, 70 foreign ministers, 70 defence ministers and 28 NATO member countries invited to the UK summit.

According to the CRS, the formal summit agenda is expected to focus on three main issues:

• Enhancing allied readiness and strengthening collective defense and military capabilities, including through increased troop rotations and military exercises in Central and Eastern Europe;

• Marking the conclusion of NATO’s decade-long mission in Afghanistan at the end of 2014 and launching a planned follow-on training mission; and

• Enhancing NATO’s support of partner countries outside the alliance, including through a new “Defense Capacity Building Initiative.”

Apparently, also a key discussion that must be had during the summit is the defense spending of member states.  Below via the CRS:

A key question underlying summit deliberations on collective defense will be whether the allies are willing to devote the resources necessary to meet their stated commitments. As such, a primary objective of NATO leaders and U.S. and UK officials, among others, is to secure allied pledges to reverse the ongoing downward trend in allied defense spending.

In 2013, total defense spending by NATO European allies as a percentage of GDP was about 1.6%; just four NATO allies (Estonia, Greece, the UK, and the United States) met the alliance’s goal of spending 2% of GDP on defense (see Appendix for more allied defense spending figures).  Since 2001, the U.S. share of total allied defense spending has grown from 63% to 72%.13 Many analysts and U.S. officials have long asserted that defense spending in many European countries is not only too low; it is also inefficient, with disproportionately high personnel costs coming at the expense of much-needed research, development, and procurement. In 2013, only four allies (France, Turkey, the United Kingdom, and the United States) met a NATO guideline to devote 20% of defense expenditures to the purchase of major equipment, considered a key indicator of the pace of military modernization.

via CRS

via CRS (click on image for larger view)

Follow the NATO Summit Wales 2014 via GOV.UK here.

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U.S. Embassy Kabul Construction Bulge: From $625M to $773M, Est. Completion Now Moved to 2016

– Domani Spero

 

The Government Accountability Office (GAO) recently evaluated the construction of U.S. Embassy Kabul due to “broad congressional interest” in the oversight and accountability of U.S. funds used in Afghanistan. The GAO wanted to see what contracts State put in place to construct new U.S. embassy facilities in Kabul starting in 2009; the extent to which construction requirements, cost, or schedule have changed, and the reasons for the changes; and the extent to which the present expansion matches projected needs.

The GAO reports that contract costs for construction have increased by nearly 24 percent, from $625.4 million to $773.9 million as of May 2014.  The original construction completion was to be the end of  summer 2014; the contractual delivery date for all permanent facilities is now anticipated for July 2016.

With the withdrawal of U.S. troops in the horizon, SIGAR recently said that “constraint on oversight of US-funded Afghan reconstruction will only worsen as more US coalition bases close” and that the “ability to monitor, manage & oversee reconstruction programs in Afghanistan will only become more difficult.”

And yet, Embassy Kabul’s permanent facilities—both older and newly-constructed office and apartment buildings—will eventually contain 1,487 desks and 819 beds.  The projected embassy staffing for 2015 is approximately 600 U.S. direct hires and 1,100 locally employed staff.  Without the military support, State would once more end up with potentially contracting its own security and life-support contractors as it did in Iraq.

Excerpt from the GAO report:

From 2002 through 2009, State took several actions to expand the U.S. embassy compound in Kabul. Initially, OBO refurbished the existing office building, built in the 1960s. Additionally, OBO completed the construction of a new chancery office building, staff apartments, and support facilities. As staffing increases continued, the embassy acquired hundreds of shipping containers for temporary offices and housing. The embassy also compressed office space by putting more desks in the new chancery and old existing office building. Today the Kabul embassy compound consists of the original compound on the west side of Great Massoud Road, referred to as the West Compound, and an expansion compound on the east side of Great Massoud Road, referred to as the East Compound.
[...]

Since the two contracts were awarded in 2009 and 2010, construction requirements have changed, costs have increased, and schedules have been extended. OBO’s original construction requirements have changed. In December 2009, OBO added two stories to planned office annex A. In September 2011, after the U.S. and Afghan governments did not reach agreement to transfer the Afghan Ministry of Public Health site to the U.S. government, OBO removed the parking facilities from Contractor 2’s contract. The embassy also requested that OBO reconfigure the existing office building’s second floor. In March 2012 and September 2013, new security upgrades to perimeter walls and guard towers were added. Because of the building alterations, OBO is building space for more desks and beds than originally planned. The new office annexes under construction are to contain 1,237 desks, a nearly 60 percent increase over the 778 desks originally planned. OBO is also building space for 661 beds, about 50 more than originally planned. 

Contract costs for construction have increased by nearly 24 percent, from $625.4 million to $773.9 million as of May 2014. (See table 1 on page 20 of the enclosure.) This $148.5 million cost increase is the result of multiple contract modifications to change construction requirements, including the transfer of construction requirements from the 1st contract to the 2nd contract.1 

The overall project schedule has also been extended. OBO had originally planned to complete all construction on the compound by the end of summer 2014; the contractual delivery date for all permanent facilities is currently July 2016. 
[...]

Factors affecting the project include: 

    • Increases in numbers and changes in composition of embassy staffing requirements. 
    • Risks introduced by State during planning, such as awarding contracts before the Afghan Ministry of Public Health site was fully acquired and tightly sequencing the work of two contractors on one construction site. 
    • Constructing new facilities on an occupied compound in a conflict environment. 
    • Contractor performance delays and transfer of construction requirements from one contract to another. 
    • Delays and changes to shipping routes of building materials due to difficulties with shipments transiting through Pakistan. 
Via GAO

Via GAO

We’ve seen this before, haven’t we?

It is difficult to determine whether current projects and existing facilities will meet future embassy needs. Long-term construction has been occurring in an unpredictable political and security environment characterized by dramatic changes in U.S. staff levels. Additionally, as the U.S. military draws down its presence in Afghanistan, State will have to decide whether to close its facilities in the field or engage support contractors to replace life-support services currently provided by the military, such as food, water, fuel, and medical services. Such changes may affect embassy staffing and operations. Future composition of U.S. agencies, staffing levels, and embassy facility needs continue to be subject to change.

Once current contracts are completed, the Kabul embassy’s permanent facilities—both older and newly-constructed office and apartment buildings—are to contain 1,487 desks and 819 beds. These totals do not include any desks or beds within temporary offices and housing that State expects to demolish. Furthermore, the desk totals assume that compressed office areas in currently crowded office buildings will be alleviated as some staff move out of those areas and into the newly completed office annexes. 

Projected embassy staffing for 2015 is approximately 600 U.S. direct hires and 1,100 locally employed staff. State is working to identify its and other agencies’ desk positions (both U.S. direct hires and locally employed staff) that will occupy the new office space. State is also examining how to accommodate new support contractors—either on or off compound—that may be used to provide needed services after the U.S. military departs Afghanistan. 

State is conducting a master planning study, due in August 2014, to address on-compound facility needs unmet by current construction. That plan may address parking facilities that were removed from the current construction project. State is also considering the continued use of various leased off-compound facilities in the future.

 

Read the full report here (pdf).

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New Embassy Mexico City Estimated to Cost $350-$450M Now More Pricey At $763 Million

– Domani Spero

 

On June 20, 2014, the U.S. Embassy in Mexico City announced the 50thanniversary of the building of the chancery in Mexico
City´s  Reforma Avenue. According to Embassy Mexico City, the building began in 1960 during the Kennedy Administration and under then Ambassador Thomas Mann. The building reportedly cost 5 million dollars and in 1964 became the second largest U.S. embassy in the world.

In 2011, the State Department solicitation on fedbiz announced that the New Embassy Compound (NEC) in Mexico City, Mexico will be a design-bid-build project estimated to cost between $350 million and $450 million.

The new Embassy compound will be constructed on U.S. Government-owned property located in the Nuevo Polanco neighborhood of Mexico City. It will be in the range of 40,000-45,000 gross square meters in area and will include a new Chancery, General Services Office/support buildings, parking structures, Marine Security Guard Quarters, and vehicular/pedestrian screening facilities.

In 2012, the estimated construction cost was $450 – $500 million.

In November 2013, FP’s The Cable reported that the State Department has quietly reversed course, saying its initial solicitation to industry is “cancelled in its entirety” because plans have been altered. The State Department did not explain why in its announcement, but said a new, future solicitation to industry for the project “is under acquisition review.” (See State Department Quietly Reverses Course On Its $500 Million Mexican Embassy).

Yesterday, the House Appropriations Committee’s draft report on the fiscal 2015 State and foreign aid spending bill notes that the new construction cost estimate of NEC Mexico City is now at $763,500,000.  The following is the section of the Committee draft report on the new embassy that will soon join our list of most expensive embassies in the world:

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.

 

In 2013, State/OBO awarded the New U.S. Embassy Mexico City project to Tod Williams Billie Tsien/ Davis Brody Bond Architects and Planners Joint Venture. It is listed as a capital program project for FY2015 (pdf).

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Cuban Twitter: Short Message Service for Displaced People in the Northwest Frontier of Pakistan?

– Domani Spero

The month of April started off with a bang for USAID!  We saw the Twitter Cubano story first, and then there’s USAID’s reportedly $1billion a year “DARPA-like” innovation lab.  Also SIGAR John Sopko accused USAID of cover up in Afghanistan. And no, USAID Administrator is not going to New Delhi as the next US Ambassador to India. We were seriously intrigued by  the ZunZuneo story, the secret Cuban Twitter reported by the Associated Press. Can you blame us?

 

We thought the Associated Press did a great investigative piece. Sorry, we are not convinced that this was ‘breathlessly written.’

In July 2010, Joe McSpedon, a U.S. government official, flew to Barcelona to put the final touches on a secret plan to build a social media project aimed at undermining Cuba’s communist government.

McSpedon and his team of high-tech contractors had come in from Costa Rica and Nicaragua, Washington and Denver. Their mission: to launch a messaging network that could reach hundreds of thousands of Cubans. To hide the network from the Cuban government, they would set up a byzantine system of front companies using a Cayman Islands bank account, and recruit unsuspecting executives who would not be told of the company’s ties to the U.S. government.

McSpedon didn’t work for the CIA. This was a program paid for and run by the U.S. Agency for International Development, best known for overseeing billions of dollars in U.S. humanitarian aid.

For a look on how much the U.S. Government spent on Cuban Democracy between 1996-2011, see a snapshot of the funding here.

In an interview with Popular Science, USAID’s Administrator, Rajiv Shah, who led USAID through the program, defended it.

“One of the areas we work in is in the area of rights protection and accountability,” Shah said. The highest-level official named in the AP documents is a mid-level manager named Joe McSpedon.

But Shah—despite the fact that the program was unknown to the public—said the idea that ZunZuneo was a covert operation is “inaccurate,” and pointed out that there are other USAID programs that require secrecy, such as protecting the identities of humanitarian workers in Syria. “These projects are notified to Congress and the subject of a thorough accountability report,” he said.

 

The AP story mentions two USAID connected companies: Creative Associates International as contractor and Denver-based Mobile Accord Inc. as one of the subcontractors.

According to Denver Business Journal, Mobile Accord is the parent organization of the mGive business, which helps nonprofits raise donation via text message, and of the GeoPoll business handling opinion surveys in developing nations.

The Guardian reports that the money that Creative Associates spent on ZunZuneo was “publicly earmarked for an unspecified project in Pakistan, government data show. But there is no indication of where the funds were actually spent.”

So we went digging over at USASpending.gov. The first contract we located is a State Department contract with Mobile Accord in the amount of $969,000 and signed on September 18, 2009.  The contract description says: “Short Message Service Support to Be Provided to Displaced People in the Northwest Frontier of PAKISTAN.”

Screen Shot 2014-04-04

 

The second contract also with Mobile Accord in the amount of $720,000 was signed in July 8, 2010:

Screen Shot 2014-04-04

So if Twitter Cubano was not a “covert”operation, what’s this over $1.6 million contract between the State Department and Mobile Accord for the Northwest Frontier Pakistan about?  The folks who prepared this data for USASpending.gov did not really intend to be inaccurate with this public information, right?  They just inadvetently spelled ‘Cuba’ as ‘Northwest Frontier Pakistan.’

And this is the official version of  ‘truth in reporting”as public service? What you don’t know can’t harm you?

If this money actually went to Twitter Cubano, and was hidden in plain sight, how are we to believe the accuracy of the data we see on the USASpending website?

Where else do we have similar projects for democracy promotion and/or regime change if possible, do you know?

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Snapshot: Cuba Democracy Funding to State and USAID – FY1996-2011

– Domani Spero

The Associated Press recently produced an investigative piece on ZunZuneo, a Twitter Cubano reportedly aimed at undermining the socialist government in Cuba that was managed by USAID.

The official government response cited a GAO report from 2013 which make no mention of ZunZeneo. The report, however, provides a snapshot of how much we have spent on the Cuba Democracy project from 1996-2011. Ay mucho dinero:

In fiscal years 1996 through 2011, Congress appropriated $205 million for Cuba democracy assistance, appropriating 87 percent of these funds since 2004. Increased funding for Cuba democracy assistance was recommended by the interagency Commission for Assistance to a Free Cuba, which was established by President George W. Bush in 2003.13 Program funding, which peaked in 2008 with appropriations totaling $44.4 million, has ranged between $15 and $20 million per year during fiscal years 2009 through 2012. For fiscal year 2013, USAID and State reduced their combined funding request to $15 million, citing operational challenges to assistance efforts in Cuba.14

In fiscal years 1996 through 2011, $138.2 million of Cuba democracy funds were allocated to USAID and $52.3 million were allocated to State. (see GAO report pdf).

 

Screen Shot 2014-04-03

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Dear Future D/MR Heather Higginbottom — Your Third Priority Up Close With Prospective Savings

– Domani Spero

We would guess from the kind of email we get that a good number of our readers are not newbies or prospective employees of the State Department.  But every now and then, we’d hear from folks interested in joining the Foreign Service.  Recently, we heard from a prospective employee informing us that there are 600 individuals currently waiting on the State Department “Register.”

“Some have even lost their jobs after having Diplomatic Security show up to interview their supervisors and coworkers, only to be timed off the register for lack of hiring.”

Of course, being on the Register does not guarantee that you will be given a firm offer of employment.  But it means that 600 people have taken and passed the Foreign Service Officer Test (FSOT), have submitted their Personal Narratives, have passed the QEP and taken the Oral Assessment, have completed the required clearances: Medical and Security, have gone through the  Final Review Panel and are waiting on The Register, the rank-ordered list of successful candidates, sorted by career track.

Here is careers.state.gov:

“You should be aware that your placement on the Register does not guarantee an appointment as a Foreign Service Officer, for the number of appointments depends on the needs of the Foreign Service. Your rank-order on the Register is dynamic. People with higher scores will be placed above you regardless of when they are placed on the Register. Likewise, you will be placed above candidates with lower scores, regardless of how long they have been on the Register. Your name may stay in the Register for a maximum of 18 months. After that, your name will be removed. You may decline the first offer of employment. If you decline a second offer, your name will be removed from the Register. “

Screen Shot 2013-12-08

But … but… the State Department makes no mention that invitation to join the Foreign Service not only depends on the “needs of the Foreign Service” it also depends on funding from Congress.

Below is an extract from FY2014 State and Foreign Operations Budget Request:

The Administration’s FY2014 request seeks to grow its Human Resources account (under Diplomatic & Consular Programs) by 5% over its FY2012 level, to a total of $2.60 billion. While the Administration’s FY2014 request indicates that it plans 186 new positions at the Department of State altogether, 151 of these would be funded by consular fees and devoted to meeting increasing visa demand. The remaining 35 new positions (30 Foreign Service, 5 Civil Service) for which State seeks appropriated funding would be focused on the high priorities of the “rebalance” to Asia, and to staffing the Secretary’s Office of the Coordinator for Cyber Issues. As a point of comparison, the State Department requested appropriated funding for 121 new positions in its FY2013 request, and for 133 in its FY2012 request.

It is not clear from the justification above if the 186 new positions are FSOs or Limited Career Appointees (LNAs) tasked to handle visa work in selected places around the globe (Brazil, China, Mexico).  But what is clear is given the budget constraints, officials at the State Department know that their authority to hire new employees is severely restricted.

And yet, the FSOT continue to be administered multiple times a year.  Interviews continue to be conducted. The selection process continue to chug along as usual resulting in a glut of candidates waiting on the Register.  A good number of these individuals will most probably time out after 18 months.

So we asked a former State Department official who previously worked at BEX if this makes sense.  And got a royal scolding. Like, “what planet are you living in, girl?” Apparently, it’s what they do “free from reality” according to our source.

“It means little if there are 10 or 10,000 on the register. Also, all those people in HR and DS have to be kept busy, so they march on.”

That’s a little harsh, right?

But look,  if 600 people are sitting on the Register, that’s 600 candidates ready to hire.  Which also means the State Department had already paid for the medical examination of these individuals.  In addition, it had already conducted “a comprehensive background investigation, in cooperation with other federal, state, and local agencies, and has determined each candidate’s suitability for appointment to the Foreign Service and for a Top Secret security clearance.”

According to the GAO, the fiscal year 2012 base price for a top secret clearance investigation conducted by OPM is $4,005 and the periodic reinvestigation is $2,711.  For the State Department, the Bureau of Diplomatic Security’s Office of Personnel Security and Suitability, conducts all national agency and credit history checks in support of their investigations. Diplomatic Security investigators located worldwide also conduct all other investigative leads, which includes local law enforcement checks. While there is no readily available data on the TS clearance adjudications for State, it has been suggested elsewhere that the the average cost to process a TS clearance is between $3,000 and about $15,000, depending upon individual factors.

If we take the lower figure, $6,700 X 600 = $4,020,000.

If we take the upper figure, $15,000 X = $9,000,000.

The actual cost of processing the TS clearance for 600 candidates sitting on the Register is probably somewhere in the middle.  Add the medical clearance cost for the candidates and family members and you got quite a pile of money there.

If we only hire a third from that pool of candidates, how much money have we wasted?

President Obama recently announced the nomination of Heather Higginbottom, the new Counselor in the Office of the Secretary of State to be the third Deputy Secretary of State for Management and Resources. During her November confirmation hearing, Ms. Higginbottom told the Senate that her third priority, if confirmed, will be management, reform, and innovation.

Well, here’s one place to start.

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Welcome Back, State/OIG, We’ve Missed You!

– By Domani Spero

On September 30, Mr. Linick’s first day in office, we posted this:  Senate Confirms Steve Linick; State Dept Finally Gets an Inspector General After 2,066 Days.

One day later, he lost 65% of his entire staff. State Dept Declares Inspector General Office “Non-Essential”, Furloughs All Staffers Except a Handful (Corrected).

In one of its six offices (Inspection, Audit, Investigation, General Counsel, Public Affairs and EX) four out of approximately 50 employees were declared “excepted.”  The rest were given letters notifying them that they had been furloughed. So on Tuesday, the first day of the shutdown, the State/OIG employees worked no more than four hours to “shutdown” then went home for an undetermined period of time.  They’re back at work today but we fear that the 16-day furlough will have a demoralizing impact.

Besides the IG office, the International Water Boundary Commission was also furloughed. The total number of employees furloughed by State, a number hard to come by, was reportedly in the low hundreds.

The Cable’s John Hudson who puts the number at about 340 employees, reports that this “disproportionate furlough allotment has led critics to accuse the department of undervaluing the watchdog office, though the department strongly disputes that.”

“On day one, they sent home the IG’s office without knowing how long the shutdown would last,” a Congressional staffer familiar with State’s shutdown planning told The Cable. “I think the Department’s action speaks for itself about its commitment to transparency, accountability, and oversight.”

But State’s IG spokesman Douglas Welty denied the allegation. “OIG does not feel ‘targeted’ or ‘undervalued’ at all,” he said. “While there was certainly a significant impact on OIG operations with about 65% of our staff furloughed due to the government shutdown, work on several priority issues and projects continued.”

That may be, but as The Cable notes, “the optics of OIG taking a disproportionate share of the furloughs isn’t great for an office with a history of being marginalized.”

We were told that while it was “a challenge” to have about 65% of OIG staff furloughed one day after Mr. Linick started as the Inspector General, some critical work did continue.  For instance, the Office of Audits excepted staff did continue work on financial statement audits, as well as those working on projects and investigations in the Middle East Region Office (MERO).  The MERO Directorate is responsible for performing engagements within the Middle East and South and Central Asia, in addition to the general operation of overseas offices in Kabul Afghanistan; Islamabad, Pakistan; and Baghdad, Iraq.  However, several overseas and domestic inspections have been delayed.  The exceptions were two overseas inspections that did continue despite the shutdown because they were already in the field.

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If you want the upside here, it is probably that while Mr. Linick’s transition has not been smooth, the last two weeks did give him time to meet with his senior staff (at least those not furloughed) and get a thorough briefings on OIG’s structure, operations and priority issues.  The downside, of course, is — the new kid in the block was in no position to make the case for continued operation when he just got there. And what a reception!    On a related note, Emilia Disanto has been appointed Acting Deputy Inspector General as of October 1. Karen Ouzts is the new Assistant Inspector General for Administration, with appointment date of  September 4, 2013. And  Norman P. Brown, the Acting Assistant Inspector General for Audits was appointed to his position on September 13, 2013.

Now —  we understand that the reason why the OIG was furloughed was due to its annual fiscal year funding, as opposed to multi-year or no-year funding for the rest of the State Department.  Of all the many offices at State, OIG is one of the very few offices with one-year funding.  But since the OIG is tasked with investigating fraud, waste and mismanagement of an agency with multi-year/no-year funds, wouldn’t it make sense that its funding corresponds/mirrors with the designated Federal entity’s funding to which the Inspector General reports? So if State has multi-year funding, shouldn’t State/OIG ought to have multi-year funding, too?

Something to watch out for when State/OIG, a statutorily created independent entity, makes its 2015 Congressional Budget Justification. For now we just want to say —

🎈🎈🎈

Welcome back folks, we’ve missed you!

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State Dept’s Made in the USA Glass Stemware Makes News on Shutdown Week

– By Domani Spero

In April 2010, this made the news: Not Made in the USA Glass Stemware Causes Not-So-Diplomatic Protest.  This week, the glass stemware controversy returned for another news splash.  The Cable reports that the State Dept Defends Its $5 Million Order for Hand-Crafted Glassware.

Apparently, according to The Cable, Congress is asking the State Department for specifics about a recent $5 million contract for handcrafted glasses for use in embassies around the world.

The order with a potential five-year contract covers “20 different styles of custom handcrafted stem and barware from the Vermont-based glassblowing company Simon Pearce.”  The Daily Mail says this includes 12,000 pieces of stemware for American embassies from a company that makes hand blown crystal that retails for up to $85-per-wine glass. Even the Wine Spectator covered the need for quality stemware here.

Below is an excerpt from Valley News on how this contract was “re-competed”:

Vermont Sen. Patrick Leahy, who is the chairman of the Senate Appropriations Subcommittee on State, Foreign Operations and Related Agencies, which oversees State Department funding, was instrumental in helping Simon Pearce get the contract. Leahy wrote to Secretary of State John Kerry in support of the bid by Simon Pearce, a news release says.

“It is wonderful to have such an exquisite example of Vermont craftsmanship on display and in use in our embassies around the world,” Leahy said in the release. “Marcelle and I have visited many of those embassies, and knowing that Simon Pearce’s products will be there is something that all Vermonters should be proud of,” Leahy said.

A State Department official, speaking on background, told The Cable that neither the order nor the timing is unusual:  “It’s not unusual for lots of contracts to be awarded by the end of the fiscal year.” 

The Cable quotes one Hill aide who was less than happy with this contract. “Seems like a poor use of funds given the current budget environment.” 

Aah! Aah! Aah!  Wanna bet that the Hill aide was not Senator Leahy’s. Okay.

Today is Day 11 of the shutdown but just a couple of weeks ago was “use it or lose it” week. In many cases, agencies must spend all their allotted funds by September 30, the end of the fiscal year.  If they don’t, they lose the money, or Congress could cut short their future funding.  So agencies are certainly incentivized to spend.  Jeffrey B. Liebman and Neale Mahoney who did a 2010 paper on Do Expiring Budgets Lead to Wasteful Year-End Spending? noted that “spending spikes in all major federal agencies during the 52nd week of the year as the agencies rush to exhaust expiring budget authority.”

Apparently, some contractors even make 25% of their annual business on that 52nd week alone.  The last week of September — AKA: the end-of-year spending binge, the Flush, or just Christmas in September.

If you think State is the only one doing this, get ready for a booo!

WaPo details some of the end of year binges in late September:

  • The Department of Veterans Affairs bought $562,000 worth of artwork.
  • The Agriculture Department spent $144,000 on toner cartridges.
  • The Coast Guard spent $178,000 on “Cubicle Furniture Rehab.”

According to Feds here, government offices in their equivalent of shop till you drop week, bought three years worth of staples. What the what?  One office purchased 10 portable generators “that just sit there.” One department reportedly bought some flat screen TVs “which are not used, just big shiny black wall decorations.”

One from the National Guard said, “We had to go to the range every year to expend all of our remaining ammunition. It was fun for a while, but we were firing so much that it became tedious. When you get BORED from shooting MACHINE GUNS, there is a problem.”

The Washington Times reported that in the waning months of the 2012 fiscal year, the Navy paid $51,000 for clarinets and $21,000 for an organ. The Army spent $40,000 on violins. And the Army National Guard reportedly bought $18,000 worth of coffee mugs for recruitment.

This year, we saw some more interesting purchases in kind and volume during the last week of September.  The U.S. Navy spent $135,330.67 for book and overhead scanners. The U.S. Army spent $16,597.46 for kettlebells. The Department of Veterans Affairs spent $48,953.58 on trash cans. The Department of Homeland Security used $213,879.72 to leased copiers.

And oh, the U.S. Army spent $4,152,000.00 to purchase GUNS, OVER 30MM UP TO 75MM.

Perhaps the more interesting purchases are $50,937.3 for an E-1 Between US Embassy, Paris, France and Elysee Palace, Paris, France by the Defense Information Systems Agency and $409,305.47 for a Catholic Priest by the Department of the Army, a firm-fixed-priced contract with a base period of one year beginning 1 October 2013 plus four one-year option periods.

Surprised? Me, too.

Anyway, it has been suggested even by the Feds that agencies be allowed to roll over their funds for next year’s funding. But the Liebman-Mahoney paper suggests that “even with rollover authority, there remain incentives for agencies to use up their full allocation of funding. Large balances carried over from one period to another are likely to be interpreted by OMB and Congressional appropriators as a signal that budget resources are excessive and lead to reduced budgets in subsequent periods.”

Given that Continuing Resolutions have now become the norm rather than the exception,  the propensity to hoard funds or to shop till you drop when funds are available is not going to get any better.  The solution might be to regularized funding and not to penalized agencies when they are unable to spend all their allocated funds.

But what do we know.  That’s the way it’s been for a long time now.  And since Congress is busy with some CC or Continuing Craziness of their own making, we are not hopeful that they will find a solution that works soon. For now, the Hill aide can continue being “less than enthused” because obviously there’s no fault in the Congress’ stars.

($_$)

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State Department’s Magic Number on the Furloughs?

– By Domani Spero

Via the October 7 Daily Press Brief with Deputy Spokesperson Marie Harf:

QUESTION: We have some congressional sources who are telling us that the magic number on the furloughs at State is 343, half of them being – 179 – being from OIG, the Office of Inspector General. Can you confirm those numbers for me?

MS. HARF: Well, I can say that we currently have, I would say, hundreds of employees furloughed. Again, as we’ve said, it’s a small number. We talked about that some are from the Office of the Inspector General; some are from another office as we’ve talked about as well. And I would underscore that every day this goes on longer, we risk having that number go up to the thousands. Thankfully, we’re not there yet. But every day this goes on longer we get closer.

Via WordItOut

QUESTION: So can give us any –

QUESTION: (Off-mike.)

QUESTION: I’m sorry, just one quick follow-up.

MS. HARF: Mm-hmm.

QUESTION: Can you tell us about any upcoming impacts that might happen, say, later this week or next week if this thing drags on?

MS. HARF: I don’t have a timeline. I think this was where Elise was about to go. I don’t have a timeline for when furloughs might happen. No additional steps to announce at this point. As we’ve said, we’ve sharply curtailed travel, participation in conferences, public participation, and other events. That’s happening – that’s already started happening, was happening last week, but nothing new on top of that to announce at this point.

As of October 7, AFSA is telling members that “Bureaus, with the exception of the OIG, have yet to notify any employees of their excepted/non-excepted status.”  It reiterated once more that the Department “intends to provide some notice before any emergency furloughs.”

(o_O)

 

 

 

 

 

 

 

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State Dept Declares Inspector General Office “Non-Essential”, Furloughs All Staffers Except a Handful (Corrected)

– By Domani Spero

 

The State Department Under Secretary for Management Patrick Kennedy sent a letter to employees on September 30 reiterating, that “Department offices, bureaus, and State elements at our posts overseas will continue to function for a limited period of time.

In the September 30 Daily Press Briefing (DPB), State Department was going to stay open despite the shutdown.  (See Shutdown News:  State Department Stays Open and Operational. For Now.)

The MGT memo and the October 1 DPB now indicates that “a small number of offices” will be impacted initially by the shutdown.

When pressed for the affected offices, Ms. Psaki promised to get “a specific list.” But she added that “the way that it’s categorized, the impacted offices are those that operate with one-year funds that do not have available carryover funds to sustain operations. So they don’t have funds from the previous fiscal year and they are on one-year funding mechanisms.”

QUESTION: I’m just concerned, when you said they’ll be – continue to function for a time, I know you wouldn’t give weeks or days. But if I’m overseas and I need to see somebody at the embassy, I better get myself there right away?
[...]
QUESTION: What does “for a time” mean? I mean, “for a time” could be anything, correct?

MS. PSAKI: Well, I think I separated –

QUESTION: I mean, you said –

MS. PSAKI: Let me just finish. I separated out that as – the consular services as – I think as I said, since consular operations are fee-funded, there is significantly less chance at any point those individuals will be furloughed. And passport and consular services are fee-funded, which means they pay for themselves. So obviously, those operations will continue. Now, we can’t predict how long this will continue, so I’m just conveying that we’re taking it day by day.

We were looking for some clarity like this:

“SIGAR’s FY 2013 Appropriations provided $48.04M (post sequestration)5 in funds as multi-year funds. At present, SIGAR is projecting a carryover of$7.9M in unobligated funding to FY 2014, which will remain available through September 30, 2014. SIGAR will use this funding to delay the large disruption a lapse in funding would cause to SIGAR’s employees and operations. SIGAR projects the available funding will sustain current operations through December I, 2013 (61 days).”

We hope such clarity is forthcoming from the podium but we’re not holding our breath.  So folks will be left guessing how long the carryover funds will last for the rest of the agency.

In any case, Ms. Psaki was also asked about furloughed employees:

QUESTION: Were there any employees that, let’s say, came today and had to leave after four hours, like was suggested by some?

MS. PSAKI: Well, again, I referred to just a minimal number impacted by one-year funded programs. But the vast majority of employees reported to work today, are here today. Given that we are part of – we are a national security agency and we represent American interests around the world, that’s where our staffing levels are at this point.

QUESTION: So it’s safe to assume that some people did come to work, spent two or three hours, and then were asked to go home?

MS. PSAKI: I did not imply that. I think there’s a small, minimal number that are impacted by the one-year programs. That’s – beyond that, I don’t have specific numbers.

We just don’t understand this.  How hard is it to admit that yes, some employees had been furloughed?  Here’s what we’ve learned so far:

The State Department’s Office of Inspector General (State/OIG) has approximately 50 200 employees.  In one of its six offices (Inspection, Audit, Investigation, General Counsel, Public Affairs and EX) four out of approximately 50 employees were declared “excepted.”  The rest were given letters notifying them that they had been furloughed. So on Tuesday, the first day of the shutdown, the State/OIG employees worked no more than four hours to “shutdown” then went home for an undetermined period of time.  We understand that all inspections (save one already in the field) have been suspended.

That’s right.  The office entrusted with ensuring that waste, fraud, and abuse does not occur within the Department was deemed “non-essential” and sent home without pay.  (Also see Senate Confirms Steve Linick; State Dept Finally Gets an Inspector General After 2,066 Days).

Correction:  State/OIG’s Inspection branch has approximately 65 employees; adding the number of staffers from Audit, Investigation and other units we are told totals approximately 200 employees. One branch has four employees designated as “excepted” out of 50 employees.  We are guesstimating that about 10-12% of the total IG staff has been declared “excepted.” We will update the numbers if we get further clarification, officially or unofficially.  The blogpost title has been corrected.  

By contrast, the Office of the Special Inspector General for Afghanistan Reconstruction (SIGAR), also in the national security cone, has all its staff in Washington, DC and Afghanistan working normal.  That’s a staff of about 190 including 50 deployed to the war zone considered “”emergency essential” (EE) personnel.”

In any case, everything else is reportedly open and operational in the State Department including the Foreign Service Institute. It looks like State/OIG was the only exception, so the spokesperson’s “specific list” should be very short. Most other offices are apparently on two-year funding which we are told should last (unconfirmed officially) “until next week.”

AFSA’s update to members cited an unnamed Department management official conveying to HR employees that “there appeared to be enough funds to continue operations for approximately one pay period.”  Furthermore, the Department will reportedly try to provide ample notice (e.g. approximately 5 business days) to non-excepted employees before any emergency furlough. Also, bureaus (with exception of OIG) have not scrubbed their excepted/non-excepted lists nor notified any employees of their individual status.

(*O*)

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