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

June 24, 2014 By in Budget, Congress, Contractors, New Embassy, State Department, U.S. Missions Tags: , , , ,

— Domani Spero
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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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