State Department: Better Oversight and Controls Could Improve Timely Delivery of Legal Documents for Terrorism Victims

While foreign states generally cannot be sued in a U.S. court, under FSIA, parties can sue governments for certain crimes such as injury or death from an act of terrorism, if certain factors are present. State is required by statute to serve notice of such suits or default judgments when other means for effecting service are not available, and charges plaintiffs a fee of $2,275 to complete this task. Plaintiffs in such cases may also qualify for compensation from a fund that Congress established called the U.S. Victims of State Sponsored Terrorism Fund.

In this report, GAO examines (1) how State completes this service and the length of time it takes to complete requests, and (2) whether State has implemented key controls for executing service requests promptly. GAO reviewed State regulations, guidance, case files, and data from 2007 through 2017; and interviewed State officials in Washington, D.C., the Czech Republic, Germany, and Switzerland, which handle the vast majority of cases. GAO assessed State's controls against federal internal control standards.

The Department of State (State) notifies sovereign defendants of court proceedings under the Foreign Sovereign Immunities Act (FSIA) in a four stage process that has taken on average about 5 months to complete. State headquarters has overall responsibility for delivering legal documents but U.S. embassies and foreign governments play key roles as well. From 2007 through 2017, State completed 229 requests for delivery of legal documents in an average of about 5 months, but about 28 percent of the requests took longer than 6 months and 7 requests took more than a year. Slow delivery could adversely affect a plaintiff's ability to obtain compensation from a special victims' fund that Congress set up in 2015.

State's guidance and federal internal control standards require controls such as accurate and complete record-keeping, continuous monitoring, and analysis of data; however, GAO found that State lacks several key controls to manage its delivery of legal documents. First, State's records are incomplete. For example, for 82 percent of the cases, State had no information about when it received court requests. Second, State did not monitor the progress of cases, resulting in slow service. This slow service led State to waive fees of about $57,000 because checks had expired. Third, State did not analyze case data to identify factors contributing to slow service, or establish timeframes for completing service. As a result, managers lack a sound basis for making decisions on how to improve timeliness. In June 2018, State took some actions based on GAO's review to improve its performance, including preparing step-by-step guidance and developing a new record-keeping system, but further actions could fill the gaps that have impaired program performance.

GAO is making five recommendations to State, including that it update its record-keeping guidance to ensure its records are accurate and complete, monitor the progress of requests, periodically analyze data to identify causes of slow service and take corrective actions, and establish timeframes for completing service. State concurred with all five of GAO's recommendations and identified actions it plans to take to address them.

Victims and their families can sue a state sponsor of terrorism in a U.S.  court, but may need to rely on the Department of State (State) to deliver  legal documents. While foreign states generally cannot be sued in a U.S.  court, the Foreign Sovereign Immunities Act (FSIA) does allow private  parties to sue a foreign government in a U.S. court for specified reasons,  including for personal injury or death caused by an act of torture,  extrajudicial killing, aircraft sabotage, or hostage taking if the defendant  government caused or provided material support for that act and is  designated as a state sponsor of terrorism. Service of process (service)  is the procedure by which the defendant is given proper notice of the  initiation of court proceedings. Under FSIA, when plaintiffs bring legal  action against foreign governments and are otherwise unable to achieve  service using the three other methods set forth in the Act, they may  request that the State provide service through diplomatic channels to the  foreign state. In these instances, State is responsible for completing  service on the foreign government on behalf of U.S. courts at the request  of the plaintiffs by transmitting the necessary documents, and for sending  the clerk of court a certified copy of the diplomatic note indicating when  the documents were transmitted. Plaintiffs filing lawsuits under the FSIA,  including lawsuits on behalf of victims and their families against state  sponsors of terrorism, have won judgments against a number of foreign  governments, including Iran, Syria, and Sudan. Those who have won  judgments can also apply for compensation from a special fund that  Congress set up in 2015. Plaintiffs awarded compensation from this fund  have included Iran hostages held from 1979 to 1981 and their spouses  and children, and victims of the bombings of U.S. Embassies in Kenya  and Tanzania.

You asked us to review how State conducts service of process. In this  report, we examine (1) how State completes service and how long it takes  to perform this function; and (2) whether State has implemented key  controls in record-keeping, monitoring, analysis, and performance  management for completing service requests. To describe how State  completes service, we reviewed State and embassy documentation such  as regulations, official guidance, and case files. In Washington, D.C., we  also interviewed officials of State’s Bureau of Consular Affairs (CA);  Bureau of Near Eastern Affairs, and Bureau of Administration.  Specifically, we interviewed officials in Consular Affairs’ Directorate of  Overseas Citizens Services/Office of Legal Affairs (OCS/L) and  Administration’s Diplomatic Pouch and Mail Office. We met with consular  officials from the U.S. Embassies in Berlin, Germany; Bern, Switzerland; and Prague, Czech Republic. We also met with court officials from three  of the principal courts that have requested service from State. Using  these sources, we developed a process map that we provided to State  officials for their review and comment. State officials did not indicate any  concerns about the process map.

To document the length of time it took for State to complete service from  2007 through 2017, we reviewed State’s spreadsheet, or case tracker, for  tracking service requests (cases), which documents various milestones in  the completion of service requests made during this time period—for  example, when State received the request and when it notified the court  that service had been completed. Because the data in its spreadsheet  were incomplete, we improved the spreadsheet by supplementing it with  data from other sources such as court records. After making the  appropriate modifications to the data in the spreadsheet, we determined  that the data were sufficiently reliable for our purposes. We analyzed the  data in the improved spreadsheet to determine the length of time it took  for State to complete service for the period 2007 through 2017—the most  recent full-year data available at the time of our review—as well as for key  stages of the process.

To determine whether State implemented key controls in record-keeping,  monitoring, analysis and performance management for completing  service requests, we reviewed the FSIA and applicable guidelines,  including State and federal guidelines and met with State officials in  Washington, D.C. to discuss how they manage the completion of service,  as well as with consular officials from the U.S. Embassies in Berlin, Bern,  and Prague. These embassies were responsible for completing about 70  percent of all service requests. We also reviewed two State case trackers  to determine to what extent they were complete and accurate, and were  consistent with State record-keeping guidance. Similarly, we reviewed the  59 case files for service requests received in 2015 and 2016 to determine  to what extent the documentation contained in these files was consistent  with State guidance in the Foreign Affairs Manual (FAM) and the Foreign  Affairs Handbook (FAH).

We used the improved spreadsheet we developed, and worked with State  officials and the responsible plaintiffs’ attorneys, to identify 16 cases that  took more than, less than, or about the average amount of time to  process to identify the factors that affect the length of time it takes to  complete service requests. We also identified the principal courts that  have requested service through State. We discussed with court officials  and private attorneys and a firm familiar with service requirements under  the FSIA their experience obtaining service through State. We also met  with officials of the U.S. Victims of State Sponsored Terrorism Fund,  which was established by Congress to provide compensation to a specific  group of victims harmed by state-sponsored terrorism. We assessed  State’s implementation of its key controls against relevant State  Department guidance and relevant federal standards for internal  controls. Appendix I contains a full description of our scope and  methodology.

We conducted this performance audit from September 2017 to December  2018 in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

In Federal courts, civil actions, such as lawsuits, begin with the filing of a  complaint with the court. On or after filing a complaint, a plaintiff obtains a  summons to the defendant from the court. The summons, among other  things, names the court and the parties, states the time within which the  defendant must appear before the court to defend against the complaint,  and notifies the defendant that a failure to appear and defend will result in  a default judgment against the defendant for the relief demanded in the  complaint. Plaintiffs are responsible for providing defendants both the  summons and a copy of the complaint. This procedure, known as service  of process, gives parties formal notice of the initiation of court  proceedings. In the event of a default judgment against a foreign state in  which the defendant has not responded to a summons or complaint and  the court has ruled in favor of the plaintiff, FSIA requires that service of a  copy of the judgment be completed.

The FSIA prescribes a sequential process for completing service on  foreign governments that plaintiffs must follow before requesting that  State complete service through the diplomatic channel. Federal  regulations require State to complete service “promptly” although neither  the regulations nor State guidance further define the term. Pursuant to  these regulations, where there are no diplomatic or consular relations  between the United States and the defendant foreign government or  where the United States has suspended diplomatic or consular  operations, service may be accomplished pursuant to the arrangement  the United States has with a friendly government known as a protecting  power arrangement. The protecting power arrangement specifies the  consular services that the friendly government will provide in assisting the  United States. As of November 2018, the United States had protecting  power arrangements with the governments of the Czech Republic,  France, Sweden, and Switzerland. Each of the arrangements with the  Czech Republic and Switzerland contains a provision for service  respectively on Syria and Iran.

Based on our analysis of State and U.S. court data, from 2007 through  2017, State received 289 service requests to 33 countries. Iran alone  accounted for over 60 percent of all service requests, followed by Syria  with about 7 percent, and Sudan with about 5 percent. Because  Switzerland and the Czech Republic serve as protecting powers for the United States in Iran and Syria, respectively, about two-thirds of all  service requests were accounted for by the U.S. Embassies in Bern and  Prague. Figure 1 shows the breakdown of FSIA service requests by  defendant country from 2007 through 2017. Over the last 2 years, 2016  and 2017, State completed 31 and 48 cases respectively. The 48 cases  represent the highest number of cases in any year for the 11-year period  we reviewed (see App. II for further data on State’s provision of service  since 2007.)

Service requests to State were made through at least 31 federal, state,  and county courts. The vast majority of service requests were made  through federal district courts. One court—the U.S. District Court for the  District of Columbia—was the venue for 73 percent of all completed  service requests, followed by 8 percent for the U.S. District Court for the  Southern District of New York and 3 percent for the U.S. District Court for  the Southern District of Florida. According to some plaintiffs’ attorneys  with whom we spoke, the U.S. District Court for the District of Columbia  has jurisdiction over most cases involving victims of state-sponsored  terrorism. Figure 2 provides information on the service requests  completed from 2007 through 2017 based on the court used to make the  request.

According to plaintiffs’ attorneys, victims of state-sponsored terrorism who  have obtained judgments against a foreign state generally seek  compensation in two ways: (1) by attaching and directly seizing assets of  that state pursuant to the FSIA and other applicable provisions of law  and (2) from a temporary special fund called the U.S. Victims of State  Sponsored Terrorism Fund (Fund). The Fund was established by  Congress in 2015 with about $1 billion in appropriations. Congress  established the Fund for a period of 10 years ending in 2026 and  mandated that certain forfeiture proceeds, penalties, and fines be  deposited into the Fund if paid to the United States after the Fund’s  establishment. The Fund can provide compensation to those, who (1)  have secured final judgments in a U.S. district court against a state  sponsor of terrorism for a claim arising from an act of international  terrorism for which the state was not found immune from the FSIA, (2)  were held hostage at the U.S. Embassy in Tehran, Iran from November  1979 to January 1981,  or (3) are the personal representatives of the  estate of a deceased individual in one of these two categories. Victims  must file appropriate documentation with the Fund, and be found to  qualify. Compensation for victims is calculated on a pro-rata basis on the  amount of available funds for each distribution, and is subject to certain  statutory caps. The first payments from the Fund were authorized in  December 2016; the second distribution is scheduled for authorization in  January 2019. After 2019, eligible claims will be paid annually out of  available funds, until all eligible amounts have been paid in full or the  Fund terminates in 2026.

State Completes Service in Several Stages That Take 5 Months to Complete On Average

State’s Process for Completing Service Has Four Stages

State completes service through four stages involving the courts, the  Department of State, U.S. embassies, and foreign ministries through a  process that took about 5 months to complete on average for the period  2007 through 2017. State’s OCS/L within the Bureau of Consular Affairs  administers the diplomatic service provisions of the FSIA. Figure 3  summarizes how State completes service in countries where a protecting  power assists in the completion of service under the FSIA.

The steps involved are numerous and require action by litigants, courts,  and the State Department, but can be summarized in four stages:  1.  Preparing and submitting a request for service to State. Plaintiffs’  attorneys compile and submit the required documentation to the  relevant clerk of court, who transmits the package to State. This  documentation must include two copies of the complaint, summons  and a notice of suit, together with a translation of each into the official  language of the foreign state, or where a plaintiff has obtained a  default judgment against a foreign state, translated copies of that  default judgment and a notice of default judgment, as well as a  cashier’s check made out to the appropriate U.S. embassy for the  applicable fee.  2.  Receiving and processing the request at State. OCS/L receives  the package from the clerk of the court where the suit was filed,  verifies that the package is complete and the check is written for the  proper fee amount, works with plaintiff’s attorney or the clerk of court  to resolve any errors or issues with the package, prepares language  for the diplomatic note and instructions for the embassy staff, and  circulates the diplomatic note and instructions for clearances from  relevant Department of State offices. OCS/L sends, via diplomatic  pouch, this package to the appropriate embassy depending on the  defendant. In cases involving the assistance of a protecting power for  the United States to serve documents under the FSIA, OCS/L sends  the package via diplomatic pouch to the U.S. embassy in the country  that serves as the protecting power for U.S. interests in the defendant  country. In the case of suits against the government of Syria, for  example, the protecting power is the Czech Republic. In cases  involving countries where the United States has diplomatic relations  and an embassy the package goes to the U.S. embassy in the  defendant country.  3.  Receiving and processing a request at U.S. embassies and  working with protecting powers. At the U.S. embassy, an American  consular officer prepares a diplomatic note in accordance with OCS/L  guidance that is added to the package and sends the package to the  Ministry of Foreign Affairs. In cases involving the assistance of a  protecting power for the United States to serve documents under the  FSIA, the Ministry of Foreign Affairs prepares instructions for the  consular officer at the foreign interest section of the embassy in the  defendant country and sends him the package. A consular officer in  the U.S. interest section of the protecting power’s embassy in the  defendant country prepares a diplomatic note to add to the package  and delivers the package, or arranges for its delivery, to the Ministry  of Foreign Affairs of the defendant country.  4.  Notifying the court that service has been completed. Once service  has been completed, the package is sent back to OCS/L for delivery  to the clerk of court. In the instance of protecting power assistance,  the package will include certifications from the foreign interest section  of the protecting power that process was served on a specific date as  well as other certifications by the protecting power’s Ministry of  Foreign Affairs and the U.S. embassy.

From 2007 through 2017, State Completed Requests In About 5 Months On Average

Our analysis of State and court data shows that for the 229 service  requests that we analyzed, the average (mean) time for State to complete  the requests over the past 11 years was about 158 days—or about 5  months. About 50 percent of the service requests took State between  90 and 179 days to complete, and about 28 percent took 180 days or  more. Seven requests took longer than 1 year. The longest request took  695 days to complete. Figure 4 shows the completion times of service  requests measured in the number of days taken for 2007 to 2017, by 30- day intervals.

Our analysis shows the most time-consuming stage to complete service  was the period in Washington, D.C. in which State Headquarters  completes document review and clearance, as shown in table 1.

Slow Service Could Adversely Affect Victims’ Ability to Obtain Compensation

Although neither the FSIA, State’s implementing regulations, nor federal  rules of civil procedure establish a time limit for State to complete service,  the length of time State takes to complete service can affect plaintiffs’  compensation. According to plaintiffs’ attorneys we interviewed, State’s  taking a long time to complete service could adversely affect victims’  ability to gain compensation for two reasons. First, slow service can  lengthen the time it takes to obtain a final judgment against a foreign  government, thereby delaying plaintiffs’ ability to meet the requirements  necessary to satisfy judgments through asset seizures or to apply for  compensation from the U.S. Victims of State Sponsored Terrorism Fund.  For efforts to collect judgments through asset seizures, plaintiffs’  attorneys explained that the first plaintiff to successfully make such a  claim is awarded the entire asset. Thus they are competing to be first in  making such claims. Second, slow service can also reduce the total  award that claimants receive from the Victims Fund. For example, slow  service could result in plaintiffs being unable to provide the required  documentation before the deadline of a particular round of distributions  for the Fund. The deadline for the 2019 distribution was September 14,  2018.

The Fund’s procedures allow victims to apply for compensation after a  court has issued a default judgment that includes compensation against  the defendant government in their case and following their transmittal of a  request for service of the default judgment through State. Of the 10 firms  that submitted requests for service to State that we interviewed, 6  expressed concern that slow service could adversely affect their clients’  compensation from the Fund for one of the reasons described. Three of  the firms also cited ongoing cases where compensation could be  adversely affected if they are unable to obtain a default judgment and  apply for service through State by the deadline established by the Fund  for the next round of distribution. According to Fund officials the Fund has  allocated approximately $1.095 billion for second-round payments. The  Special Master will authorize second-round payments on a pro rata basis  to claimants with eligible claims by January 1, 2019.

State Has Not Implemented Key Controls to Manage the Completion of Service

OCS/L Did Not Maintain Complete and Accurate Records

OCS/L did not maintain complete and accurate records of the status of  service requests completed during calendar years 2007 through 2017.  State’s record-keeping guidance stresses the importance of creating and  preserving records so that documentation of an office’s activities is  complete and accurate.

To document and manage State’s completion of service, OCS/L officials  rely primarily on two forms of documentation. The first type of  documentation or record is a “case tracker” spreadsheet that OCS/L uses  to document the status of service requests (cases). The second type of  record OCS/L relies on is case files which include various documents  related to the completion of service.

We analyzed the case tracker that OCS/L provided to us in November  2017. We determined that it did not contain complete and accurate data  about the service requests from 2006 through 2016 because it did not  contain any fields documenting the start of the process at State—for  example, the date when the court sent the request to OCS/L or the date  when OCS/L received the request. Without this, OCS/L lacked any data  about when it first received and began working on a request. In addition,  OCS/L lacked data about the status of any service request during the  initial document review and clearance stage of the process, which as  previously discussed, is the most time consuming stage. In response to  our request for additional data to use in analyzing the timeliness of State’s  service completions, in December 2017, OCS/L provided us with an  updated tracker containing three fields not in the previous tracker. The  three fields were designed to capture the start of the process, but were  often blank. For example, 82 percent of the cases did not contain the date  when OCS/L received the request from the court. By contrast, our  analysis of both the November 2017 and December 2017 case trackers  showed that OCS/L almost always recorded the “end dates” in the  process when service was completed and when OCS/L notified the court  that service had been completed.

We also reviewed the 59 case files OCS/L provided for the 2015 and  2016 service completions and determined that OCS/L did not consistently  keep copies of several critical documents. We chose these years  because OCS/L officials said that providing case files for the entire period  under review would present a significant logistical challenge and the case  files for the prior years were less complete. As table 2 summarizes, all but  three files contained a copy of the memorandum providing instructions to  the embassy and language for the diplomatic notes. Nine case files were  missing a copy of the diplomatic note. There were also 16 case files  missing the certification that service was completed on a specific date.  These two documents are critical to demonstrating that service has been  completed. There were also 47 case files lacking a signed copy of the  notification to the court. None of the 59 case files we reviewed included a  copy of an email required by State guidance providing key information on  the completion of service. The Foreign Affairs Manual requires embassies  to send OCS/L an email documenting when documents required for  service were received by the embassy, when those documents were  transmitted to a foreign ministry, and the date an executed request was  sent to OCS/L for relay to a court (including invoice, registry, and pouch  numbers by which the documents were returned to State headquarters),  but none of the files we reviewed contained this documentation. Table 2  summarizes the results of our review of the case files.

In discussing why their case tracker and case files are incomplete and  sometimes inaccurate, OCS/L officials noted that State’s agency-wide  record-keeping guidance does not prescribe what kind of records they  must keep for service requests. Federal internal control standards state  that management should implement control activities through policies  such as through day-to-day procedures or guidance. Additionally, these  standards state that management should design controls to achieve  objectives and respond to risks. These controls could, for example,  document significant events in a manner that allows the documentation to  be readily available for examination or require edit checks during  information processing. Further these control activities should ensure  that documentation and records are properly managed and maintained. In  September 2018, after reviewing our analysis, State officials said that as  a matter of practice they had begun digitally scanning service documents,  but still did not have a standard list of documents to be maintained in  case files. They also acknowledged that the level of completeness of the  “case tracker” and case files varied depending on the individual  maintaining the files.

Additionally, in June 2018 State launched a new case tracker using a  database management application. According to OCS/L officials, the new  tracker will facilitate the recording and updating of key milestone  information. The new tracker allows for including some information not  documented in the previous case tracker spreadsheet. However, it does not capture the date the court sent the request to OCS/L. According to  OCS/L officials and our analysis, the time between when the court sent  the request to OCS/L and OCS/L receives the request can vary  significantly. In nine instances, it took from about 3 weeks to over a year  for the service request to travel from the court to OCS/L. OCS/L officials  explained the new tracker does not capture the date when the court sent  the package because they believe the key information they need to use in  analyzing and managing the program begins at the point where OCS/L  receives the package and not before. However, without capturing this  data, OCS/L will not be able to determine the extent to which service  requests are delayed in CA’s mailroom before being delivered to  OCS/L—one of the four key stages of the process for completing service.  Further, without guidance that specifies the information OCS/L must  maintain in the case tracker and case files, State officials will continue to  lack complete and accurate information.

OCS/L Does Not Monitor Progress in Completing Service Requests

OCS/L does not continuously monitor service requests to determine their  progress in moving through the four stages. State’s guidance stresses the  importance of continuous monitoring to achieve office, bureau, and  agency-wide goals and objectives. Among other things, the Foreign  Affairs Manual states that monitoring data can help determine if  implementation is on time or if any timely corrections or adjustments may  be needed to improve efficiency or effectiveness. Additionally, federal  standards for internal control state that management should establish  monitoring activities, evaluate the results, and remediate any  deficiencies. OCS/L officials indicated that they have not continuously  monitored service requests because they are not required to do so.  OCS/L has no specific guidance requiring monitoring of the status of  service requests during any stage of the service completion process and,  as of October 2018, State had not established performance standards or  timeframes for completing service of process and associated tasks, as  discussed later in the report.

Based on our analysis of data and a sample of requests, we found that  OCS/L’s lack of monitoring meant that State missed opportunities to  ensure the timely processing of some requests, particularly during the  document review and clearance stage. To identify the factors that affect  the amount of time that State takes to process service requests, we  analyzed a non-generalizable sample of 16 requests that we selected to  ensure we obtained detailed information on cases that took above the  average amount of time, below the average amount of time, and about  the average amount of time to complete. We discussed the  circumstances of each of the 16 requests with OCS/L and embassy  officials, as well as with plaintiff’s attorneys. We identified several reasons  that cases took longer than average to complete:

Two cases took longer than average to complete because of staff  turnover in the relevant Department of State offices in Washington,  D.C.

One case took longer than average to complete when an OCS/L  contractor in Washington, D.C. failed to promptly distribute the  packages received by mail. In that instance, it took OCS/L 323 days to  clear and send the service request to the embassy after having  received the request from the court.

One case took longer than average to complete when a State official  at an embassy in Africa forgot to complete the service request. The  request was completed only after the official’s successor arrived and  noticed that the service request had not been completed. In this  instance, service took 563 days to complete, of which 475 days were  spent at the embassy.

One case took longer than average to complete because a State  official overseas misplaced two boxes of supporting documents that  accompanied the service request. According to plaintiff’s attorneys,  only after they called to ask about its status did OCS/L contact the  embassy to determine why the necessary documents had not been  delivered to the defendant state.

Two cases took longer than average to complete because State  officials failed to notice that the protecting power had not recorded the  date of service completion on the diplomatic note for two service  requests. In one case, the missing date was noticed by the plaintiffs’  attorneys only after OCS/L had notified the court that service had  been completed. Once alerted to the error by plaintiffs’ attorneys,  OCS/L took prompt action by requesting an amended diplomatic note  from the protecting power’s Ministry of Foreign Affairs, but it took 2  additional months to obtain the document.

OCS/L’s lack of monitoring also contributed to a loss of revenue. Based  on our analysis of available data and records kept by the U.S. Embassy  Bern we determined that the time it took OCS/L to review and clear  service requests led to OCS/L’s waiving the fees because checks for  payment of services had expired by the time they reached the U.S.  Embassy in Bern. In one such instance, OCS/L took 131 days to send  the request to Bern. OCS/L directed consular officials to proceed with the  provision of service without receiving payment. Our analysis showed that  this occurred in approximately 27 percent of all available service requests  handled by Bern in 2016 and 2017. The amount of revenue lost was  approximately $57,000.

In June 2018, OCS/L officials developed a new manual that provides a  written description of the roles and responsibilities of various officials in  OCS/L in completing service requests. However, the manual does not  require periodic monitoring of the time spent completing service by  embassies. Without monitoring by OCS/L, State cannot ensure timely  processing of service requests or prevent losses in revenue.

OCS/L Has Not Analyzed Data on Its Completion of Service

OCS/L officials said that they had not conducted any analysis that might  identify the opportunities to improve their performance. State’s guidance  in the Foreign Affairs Manual stresses the importance of assessing what  is and is not working well in a program. However, OCS/L officials told us  that they had not conducted an assessment because they did not have  good data and documentation to use in assessing what was and was not  working well in their completion of service.

OCS/L officials provided several reasons for some cases taking longer  than average in the process, in addition to those previously discussed,  but these reasons were not informed by data. These included: (1)  incomplete packages provided by plaintiffs’ attorneys; (2) the time it takes  to deliver diplomatic pouches to embassies, which can vary by post; (3)  delays due to some foreign governments’ avoidance or delay in accepting  meetings with consular staff; and (4) consular officials’ level of familiarity  with service requirements as well as heavy consular workloads. Our  analysis of available data showed that the document review and  clearance stage in Washington, D.C. took longer than the other stages.  However, we were unable to determine the extent to which the longer  time taken in Washington, D.C. was due to documentation that was  missing from the package that was sent by plaintiffs’ attorneys because  OCS/L only recorded a handful of cases where this occurred and did not  record the date when OCS/L first received the service request or the date  it determined the request was complete and free of errors. Moreover,  while OCS/L officials attributed most of the time it took to complete the  process to the time it takes to deliver documents overseas, our analysis  showed that most of the time spent processing requests was consumed  by OCS/L in the document review and clearance stage in Washington,  D.C. Without periodically analyzing data on service requests, as called for  in the Foreign Affairs Manual, OCS/L will not have a sound basis for  determining the causes for delays in completing service and how to make  improvements to eliminate those delays and reduce service completion  times. In September 2018, OCS/L officials told us that they planned to  begin using data to, among other things, measure current and past FSIA  workload and performance and identify areas for improvement. However,  they could not provide details or documentation of this effort.

State’s Bureau of Consular Affairs Has Not Established Performance Standards to Manage and Improve Its Provision of Service Under the FSIA

Consular Affairs has not established performance standards for the full  process used to complete service requests. Consular Affairs officials said  they have not established performance measures for the full process  because they do not have good data to do so. When we began our  review, Consular Affairs did not have any time frames for completing  service requests. However, in June 2018, OCS/L issued a new manual  that includes timeframes for certain steps of completing service within  OCS/L. For example, the manual states that once OCS/L has received a  service request package, the package must be reviewed within 2  business days to determine whether it contains any errors, omissions, or  other issues that must be resolved. The manual also states that if OCS/L  does not get clearance to send the package to the embassy within 2  weeks, then a senior OCS/L official must be notified for further action.  However, the manual does not specify a deadline for staff to contact the  plaintiff’s attorney to correct any problems with the package, such as  missing documents, nor does the manual establish an overall timeframe  for State to complete the document reviews and clearances in  Washington, D.C. and U.S. embassies.

GAO’s prior work has demonstrated the importance of setting  performance standards that can be used across a range of management  functions to improve results. In addition, federal internal control  standards state that management should design control activities—such  as setting of performance standards—to achieve objectives. Setting  performance standards, among other things, can provide managers with  crucial information on which to base their organizational and management  decisions.

Consular Affairs has established performance standards for some of its  other activities. For example, in fiscal year 2017 Consular Affairs  established performance standards for processing passport applications  within published timeframes and ensuring that visa applicants were  interviewed within a 3-week period. For fiscal years 2018 and 2019,  among other goals, the Bureau established a performance standard of  100 percent to activate appropriate consular crises response tools, such as travel warnings and security and emergency messages, within 6 hours  after notification of a crisis event. Without performance standards for  completing service requests, Consular Affairs and OCS/L managers are  limited in their ability to monitor performance and perform effective  program management and oversight.

Plaintiffs suing foreign states in courts of the United States including  some victims of state-sponsored terrorism, sometimes rely on State to  promptly serve legal documents to foreign countries to receive  compensation for their losses. We found that the process of serving legal  documents to foreign countries takes an average of 5 months, but that  some cases take considerably longer. In analyzing cases from 2007  through 2017, we identified multiple opportunities to improve the  management and oversight of the process. Despite State’s recent steps  to improve how it completes service, additional actions could help to  ensure that service is completed in a timely manner. For example,  guidance that specifies information that OCS/L must maintain in its case  tracker and case files would help ensure that State has complete and  accurate information on service requests. By having better record- keeping and more accurate and complete data, State will be able to  monitor its progress in completing service requests and develop  performance standards to measure timeliness. Additionally, periodically  analyzing the data could help identify ways to improve timeliness.

We are making the following five recommendations to the Department of  State:  The Secretary of State should ensure that the Assistant Secretary of  State for Consular Affairs requires OCS/L to update guidance to specify  the data to be recorded in the service request case tracker. The required  data should include key dates for all four stages of the process for  completing service, such as the date the court sent the request to OCS/L.  (Recommendation 1)

The Secretary of State should ensure that the Assistant Secretary of  State for Consular Affairs requires OCS/L to update its record-keeping  guidance for service requests to include a standard list of documents to  maintain in service request case files. (Recommendation 2)

The Secretary of State should ensure that the Assistant Secretary of  State for Consular Affairs requires OCS/L to monitor the status of service  requests. (Recommendation 3)

The Secretary of State should ensure that the Assistant Secretary of  State for Consular Affairs requires OCS/L to periodically analyze its data  on service requests to identify the causes of any delays in State’s  completion of service and take corrective actions as appropriate.  (Recommendation 4)

The Secretary of State should ensure that the Assistant Secretary of  State for Consular Affairs establishes performance standards for  completing service, including timeframes for completing the various  processes at State and at U.S. embassies. (Recommendation 5)

We provided a draft of this report to State, the Department of Justice  (Justice), and the Administrative Office of the U.S. Courts for review and  comment. We received written comments from State that are reprinted in  appendix III. In its comments, State concurred with all five of our  recommendations and identified actions it planned to take to address  them. Justice and the Administrative Office of the U.S. Courts told us that  they had no formal comments on the draft report. State, Justice, and the  Administrative Office of the U.S. Courts also provided technical  comments, which we incorporated as appropriate.

We are sending copies of this report to the appropriate congressional  committees, the Secretary of State, the Deputy Attorney General, and the  Director of the Administrative Office of the U.S. Courts. In addition, the  report is available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any further questions about this report, please  contact me at (202) 512-6881 or BairJ@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. Key contributors to this report are listed in  appendix III.

Appendix I: Objective, Scope and Methodology

In this report, we examine (1) how the Department of State (State)  completes service under the Foreign Sovereign Immunities Act (FSIA)  and how long it takes to perform this function and (2) whether State has  implemented key controls in record-keeping, monitoring, analysis and  performance management for completing service requests.

To describe how State completes service, we obtained and reviewed  State and embassy documentation such as regulations, official guidance,  and case files. We also met with officials of State’s Bureau of Consular  Affairs. Consular Affair’s Directorate of Overseas Citizens Services/Office  of the Legal Affairs (OCS/L) is responsible for managing State’s  completion of service. Based on discussions with OCS/L and  documentation, we mapped how OCS/L manages the process in  Washington, D.C and confirmed the process that we mapped with State  officials. We met with officials from State’s Diplomatic Pouch and Mail  Office, who described how they put together and track diplomatic  pouches from State to embassies overseas. Because the role of consular  and other officials at embassies overseas in completing service to  defendant foreign governments is crucial, we also met with consular and  other officials at the U.S. Embassies in Berlin, Germany; Bern,  Switzerland; and Prague, Czech Republic.

We selected these embassies based on (1) the number of service  requests each handled, and (2) the method each uses to complete  service. The U.S. Embassies in Bern and Prague ranked first and second  on the list of embassies managing service requests, while the U.S.  Embassy in Berlin ranked fourth. In the Czech Republic, we met with  officials of the Czech Ministry of Foreign Affairs, who described how they  receive and complete service requests from the U.S. Embassy in Prague.  Similarly, the Swiss Ministry of Foreign Affairs provided us with a detailed  description of how it receives and completes service on the Iranian  government. We cannot generalize our findings from these two countries  to any other countries, and note that the majority of the other countries  received five or fewer requests for the 11 years we reviewed.

To describe the process used by courts and attorneys that represent  plaintiffs filing lawsuits against foreign governments under FSIA to  request service from State, we met with court officials and plaintiffs’  attorneys. Using a spreadsheet that State provided us in December 2017,  we identified the top four federal courts that requested service from State  from 2007 to 2017 (the most recent full year available) and met with  officials from three of these courts. We based our description of the  procedure followed by court officials and attorneys say they follow at the  United States District Court for the District of Columbia because about  three-fourths of all service requests were made through that court. Using  a spreadsheet that State had provided, we also identified and met with 10  firms that had requested service from State. The firms that we met with  had a mix of experience requesting service from State. Some firms had  extensive experience and others had little experience requesting service  from State. We cannot generalize the responses to these firms to all firms  that requested service from State.

To determine the length of time it took for State to complete service from  2007 through 2017, in December 2017 we obtained a spreadsheet that  OCS/L developed. This spreadsheet documents various milestones in the  completion of service requests made during this period—for example,  when the court sent the request to OCS/L, when OCS/L received the  request, when OCS/L sent the request to the appropriate embassy, and  when OCS/L notified the court that service had been completed. Because  OCS/L officials provided data that was not complete, we developed an  improved spreadsheet, using the spreadsheet we received in December  2017 as our starting point and improving the spreadsheet through the use  of supplemental data. To develop the improved spreadsheet, we first  identified requests for service, based on our examination of the original  spreadsheet, which appeared to have not been completed or were not  related to FSIA service. We requested clarification from State about  whether we should keep those requests in our improved spreadsheet,  and where appropriate, removed some service requests. We then  checked the remaining requests in the original spreadsheet against court  data obtained from the Lexis-Nexis database Courtlink. After completing  this process, we once again asked OCS/L officials for clarification about  certain service requests and incorporated their feedback. In June 2018,  State provided us with a copy of a new case tracker that OCS/L officials  had created. We incorporated data from 2017 into our improved  spreadsheet and once again checked the service requests in our  improved spreadsheet against court records. After making the appropriate  modifications, we had 289 requests for service between 2007 and 2017.  We processed the data in our improved spreadsheet using data analysis  software.

We estimated, among other things, the mean and median lengths of time  it took for State to complete service from 2007 through 2017, as well as  for the three of the four key stages of the process for which State is fully  responsible. We estimated the time elapsed as the difference in calendar  days between the key dates that were available, for example, between  the date State notified the court that service was completed and the date  the court had sent to OCS/L the request for service. The three stages for  which we were able to estimate timeliness were (1) the days between the  date State received the request from the court and the date OCS/L sent  the request to the appropriate U.S. embassy overseas and, (2) the days  between the date OCS/L had sent the request to the embassy and the  date when service was completed overseas and, and (3) the days  between the date that service had been completed by the embassy or  protecting power and the date when OCS/L notified the court that service  was completed. The time taken for these stages includes the times for a  number of activities that we could not precisely estimate, such as the time  it took for the court’s request to reach OCS/L and the time taken for  service documentation to be sent via diplomatic pouch to and from the  appropriate embassy. We used the date the court sent its request to  OCS/L as our start date because that was the most complete start date  data among the three options available. We restricted our analysis to  those cases for which State had completed service.

One limitation that we had to address in our analysis was the lack of  certain key dates in OCS/L’s spreadsheet for some of the requests. In  particular, while the date we used as the start date (which was the date  on which the court sent its request for service to OCS/L) had the most  complete data of the three possible start dates, the data were missing for  59 of the 289 requests for service that we were able to document. We  calculated overall time elapsed for the document review and clearance  stage using that date, but then had to do some sensitivity analysis to  check that the missing dates were not skewing our results. To perform the  sensitivity analysis, we identified those instances when the date the court  sent its request to OCS/L was missing, but an alternative start date, either  the date of the request letter, or the date when OCS recorded receiving  the request, was present. We were able to identify 40 instances where  this happened for the 59 missing cases. Our calculations using  estimations of the missing “court sent to OCS/L” dates indicated that the  results we present would likely have changed minimally if we could have  included them. In addition, we conducted further analysis of the  characteristics of the 17 service requests that had no start date of any  kind and found that these were generally similar to ones for which we had  start dates. However because these simulations indicated that there  would be minor changes, we present qualified rounded numbers in the  main body of the report.

We also used the improved spreadsheet to extract other information, and  calculate timeliness by the years for which the requests were made, the  courts making requests for service, the countries for service, and the date  of service requested. In addition, we estimated the time elapsed for  service for each case for which we had data and generated a list of  service requests sorted from the ones that took the longest to those that  took the least amount of time to complete.

To determine whether State has implemented key controls in record- keeping, monitoring, analysis, and performance management for  completing service requests, we met with OCS/L officials in Washington,  D.C. to discuss how they manage the process, as well as with consular  officials from the U.S. Embassies in Berlin, Bern, and Prague. We also  examined the 59 service request case files for requests received in 2015  and 2016. This sample is not generalizable to all requests for service  between 2007 and 2017. We determined to what extent these files were  missing key documents, such as a signed copy of the notification letter or  the diplomatic note. We also reviewed the December 2017 spreadsheet  that we had obtained from State to determine to what extent the  spreadsheet contained missing data as well as a November 2017  spreadsheet. As discussed earlier, because OCS/L officials did not  provide complete data, we created a separate improved spreadsheet  using court data. We analyzed the data in the improved spreadsheet we  created to determine where bottlenecks were occurring. We also used the  improved spreadsheet to help identify and review 16 service requests in  more depth with OCS/L officials. We selected these 16 service requests  to include: 6 requests that took well above the average number of days to  complete, 5 that took about the average amount of time to complete, and  5 that took below the average amount of time to complete. We met with  OCS/L and consular officials, as well as plaintiffs’ attorneys to discuss  events related to the 16 requests we had identified for review. We  obtained documentation from the U.S. Embassies in Bern and Prague for  the actions taken in providing service, the controls implemented, and the  records of transactions that they maintained. We met with officials from  three principal courts that request service, as well as officials of the U.S.  Victims of State Sponsored Terrorism Fund (Fund) to discuss how service  could affect the progress of court cases and the compensation awarded.  Finally, we assessed State’s implementation of key controls against  applicable laws, including the FSIA and Government Performance and  Results Act of 1993, as well as State guidance and federal internal control  standards.

To determine the reliability of the data used in the report, we manually  checked State’s December 2017 spreadsheet as well as the improved  spreadsheet that we developed for logical and other errors—for example,  for dates that seemed out of order. We also performed electronic checks  on the improved spreadsheet to identify logical and other errors. Where  appropriate, we made adjustments to the improved spreadsheet. Based  on the results obtained, we determined that the improved spreadsheet  that we developed is sufficiently reliable for our use, though we note the  limitations in terms of the start dates, which required us to conduct  sensitivity analyses, as described earlier in this OSM, to increase our  confidence in the overall estimates for timeliness and for the document  review and clearance stage of the process (stage 2). As noted above, we  are rounding our estimates to reflect this limitation and qualifying them as  approximations.

Appendix II: Additional Data on How Long It Takes to Complete Service

We identified a total of 289 verified requests for service from 2007 to  2017. Verified requests are those that remained after we compiled the  lists the State Department provided, scrubbed them for duplicates and  instances when the requests were subsequently withdrawn, and checked  the data against court records in the Court Link database. Figure 5 shows  how those cases were distributed by year over this period.

The average number of days State took to complete service varied  notably by year from 2007 to 2017, as Figure 6 demonstrates. The  average (mean) ranged from 77 days in 2011 to 206 days in 2008. We  can also see variation in the most recent years. The mean in 2015 was  130 days while in 2016 it was 205 days.

We also found that cases for European and Eurasian countries, such as  Switzerland and Germany, had much lower means and medians than  those sent through protecting powers to Iran and Syria. While the  averages for Iran and Syria were 158 and 215 days respectively, the  cases for Germany, Switzerland, the Holy See, Russia, and Poland all  had averages of 106 days or less. In table 3 we provide information on  the length of time it took to complete service requests by country.

We looked more broadly at country type, and created three groups, one  for the two countries where the State Department has to rely on the  protecting powers for service, namely Iran and Syria, another group for  the European and Eurasian nations, and another group for all remaining  countries. Service completion was fastest for the European nations. This  information by country groupings is presented in table 4.

Appendix III: Comments from the Department of State

Appendix IV: GAO Contact and Staff Acknowledgements

In addition to the contact named above, Kim Frankena (Assistant  Director), Claude Adrien, José M Peña III, Martin De Alteriis, Candace  Caruthers, Mark Dowling, Chris Keblitis, Aldo Salerno and Hannah  Heidrich made key contributions to this report. Travis Cady and Jeff  Isaacs provided technical assistance.

Some victims of state-sponsored terrorism can sue the responsible government and may also be eligible for compensation from a special victims' fund. However, they often rely upon the State Department to deliver the necessary legal documents for a fee. State did this more than 200 times from 2007 through 2017. Those cases took:

longer than 6 months about 29% of the time

Delays caused the State Department to waive $57,000 in fees it would have collected, and may have affected victims' compensation eligibility. We recommended ways to improve performance.


Federal Buildings: GSA Should Establish Goals and Performance Measures to Manage the Smart Buildings Program

To help comply with federal policies aimed at improving federal building energy and environmental management, GSA has implemented a smart buildings program nationwide in federally owned buildings under its custody and control. Two key technologies included in the program are Internet-connected advanced utility meters and an analytical software application, GSAlink, which alerts staff to potential building system problems, such as equipment operating outside of normal hours.

GAO was asked to review GSA's smart buildings program. This report examines: (1) what is known about the costs and benefits of the program, (2) the extent to which GSA has developed performance goals and measures to help it manage the performance of the program, and (3) any challenges GSA faces in implementing the technologies used in the program and GSA's actions to mitigate those challenges. GAO reviewed relevant GSA documentation, interviewed officials at GSA's central and regional offices, and visited a sample of GSA smart buildings in San Francisco, California, and Washington, D.C. that were selected based on the high concentration of GSA smart buildings located in each city.

Limited quantified information exists on the costs and benefits of the General Services Administration's (GSA) smart buildings program's key technologies. GSA officials stated that the approximate cost of equipping a building with these technologies ranged between about $48,000 to $155,000. However, they stated that accurately calculating installation costs is challenging because GSA typically installs these technologies in selected buildings incrementally and sometimes as part of other capital improvement projects. Additionally, GSA officials identified perceived operational benefits of the smart buildings program's key technologies, including that these technologies enable officials to more precisely identify building system problems and more closely monitor contractors. However, existing data on the smart buildings program are of limited usefulness in quantifying the program's benefits. For example, according to GSA officials, while data from an application within GSAlink that estimates avoided costs from addressing each fault that GSAlink identifies are useful for prioritizing maintenance actions, the imprecise estimates preclude their use as a measure of actual avoided costs in quantifying program benefits.

GSA does not have documented, clearly defined goals for the smart buildings program, nor has GSA developed performance measures that would allow it to assess the program's progress. These omissions are contrary to leading practices of results-oriented organizations identified in previous GAO work. GSA officials verbally described broad goals for the smart buildings program to GAO, but the agency has not documented these goals. Further, because GSA has not clearly defined its verbally expressed goals, it cannot demonstrate progress in achieving them. For example, GSA officials said that the agency cannot measure progress for the stated goal of improving tenant productivity and comfort because of the subjective nature of individual tenant preferences, such as for office temperatures. Additionally, GSA has not developed performance measures to assess the program, and GSA's lack of data that can be used to quantify benefits of the program impedes its ability to measure the success of the program. Without clearly defined goals, related performance measures, and data that can be used to measure its progress, GSA is limited in its ability to make informed decisions about the smart buildings program.

GSA faces challenges in implementing the smart buildings program and has taken steps to mitigate these challenges. Since smart building technologies are Internet-connected, they are potentially vulnerable to cyberattacks that could compromise security or cause harm to facilities or their occupants. GSA has taken actions intended to mitigate cybersecurity challenges, such as instituting policies to address threats and known vulnerabilities and moving Internet-connected building systems to GSA's secured network. Separately, according to GSA officials, GSA faces implementation challenges related to the limited technological proficiency of some GSA building managers and contractors or lack of buy-in from them. GSA is taking actions intended to address these challenges. For example, it has provided training to staff and contractors, and its central office monitors the extent to which staff address problems detected by the smart buildings program's key technologies.

GAO recommends that GSA establish clearly defined performance goals and related performance measures for the smart buildings program, and identify and develop data to measure progress. GSA concurred with GAO's recommendations.

The U.S. General Services Administration (GSA) maintains custody and  control of a diverse buildings portfolio that includes approximately 1,600  federally owned buildings across the United States which cost over $1  billion annually to operate and maintain. Numerous federal policies aim to  improve federal building energy and environmental management through  the implementation of sustainable practices intended to reduce energy  use, lower operating costs, and limit the environmental impact of federal  buildings. To help comply with these policies, GSA implemented key  “smart buildings technologies” nationwide in federally owned buildings  under its custody and control starting around 2005. According to GSA  officials, the smart buildings program uses technologies that allow for  more precise monitoring of energy use, costs, and system operations  than in buildings without these technologies. These officials told us that  analyzing data from buildings equipped with smart building technologies  allows GSA building managers to more directly oversee the operations of  these buildings.

You asked us to review GSA’s smart buildings program. This report  addresses: (1) what is known about the costs and benefits of the smart  buildings program’s key technologies, (2) the extent to which GSA has  developed performance goals and measures to help it manage the  performance of the smart buildings program, and (3) any challenges GSA  faces in implementing the technologies used in the smart buildings  program and GSA’s actions to mitigate those challenges.

To describe the costs and benefits of the smart buildings program’s key  technologies, we reviewed information from GSA regarding these costs  and benefits. We also interviewed officials at GSA’s central office, as well  as conducted semi-structured interviews with officials at each of GSA’s 11  regional offices. In addition, we conducted site visits and interviewed GSA  building managers and operations and maintenance services contractors  who work at selected GSA smart buildings in San Francisco, California,  and Washington, D.C. We selected these locations because of the high  number of GSA smart buildings located in each city. To obtain a wider  perspective on smart buildings in general, we interviewed officials at three  other federal agencies that have implemented smart building efforts,  including the Department of Energy, the Department of Defense, and the  National Aeronautics and Space Administration. We also interviewed  seven industry stakeholders—including five service contractors and two  university researchers—who were near the GSA smart buildings we  visited and had experience in operating smart buildings or researching  related technologies. The results of our site visits and interviews with  GSA smart building officials, federal agencies, and industry stakeholders  are not generalizable to all GSA smart buildings, but provide illustrative  examples of smart building technologies in general, and the  implementation of the GSA smart buildings program specifically.  Appendix I provides a complete list of the organizations we contacted.

To evaluate the extent to which GSA has developed performance goals  and measures to help it manage the performance of the smart buildings  program, we reviewed GSA reports and documents concerning the smart  buildings program and interviewed knowledgeable agency officials. We  compared GSA’s actions to leading practices of results-oriented  organizations that we have identified in our prior work, as well as federal  standards for internal control.

To describe the challenges GSA faces in implementing the technologies  used in the smart buildings program and its actions to mitigate those  challenges, we reviewed GSA, prior GAO, and other reports concerning  building management issues. We also gathered information during our  site visits and interviews noted above with officials at GSA’s central office,  GSA regional offices, federal agencies, and industry stakeholders. We did  not evaluate the effectiveness of the actions GSA has taken to mitigate  challenges facing implementation of the technologies used in the smart  buildings program. Related to cybersecurity risks, however, our past work  has reported on GSA’s efforts to address cyber risks in federal buildings  in compliance with relevant statute and guidance.

We conducted this performance audit from October 2016 to January 2018  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

GSA maintains custody and control of real property for many civilian  federal agencies and has a large portfolio of federally owned and leased  properties that GSA rents to its federal agency customers. It is  responsible for approximately 1,600 federally owned buildings, and the  agency generally provides operations and maintenance services for  building systems—such as heating, cooling, and lighting systems—used  in building operations. According to GSA officials, their federally owned  smart buildings are managed by a GSA building manager who oversees a  private operations and maintenance services contractor.

According to GSA officials, the agency began implementing what would  become its smart buildings program around 2005 in response to  numerous federal policies aimed at improving federal building energy and  environmental management. These officials told us that the smart  buildings program includes two key technologies: advanced utility meters  and a computer software program known as “GSAlink.” According to GSA  officials, outfitting buildings with these technologies allows for more  precise monitoring of energy use and equipment operations in these  buildings, and was initially based on the use of advanced utility meters to  meet federal mandates. Later, this concept was expanded to include use  of analytics, through GSAlink, aimed at reducing energy consumption and  increasing the efficiency of operations and maintenance activities.  According to GSA officials, GSA’s smart buildings use these technologies  to connect and monitor multiple pieces of building equipment, such as  heating and air conditioning system components. Further, according to  these officials, the program is intended to achieve efficiencies in energy  use and in operations and maintenance activities while also providing a  comfortable workplace potentially conducive to improved tenant  productivity. As GSAlink and advanced meters are Internet-connected,  GSA officials told us that they implemented protections that are intended  to help mitigate potential cyberattacks, including using firewalls.

Advanced Utility Meters: In response to energy reduction and  advanced metering requirements established in the Energy Policy Act  of 2005—as well as subsequent amendments and an Executive  Order—GSA began installing advanced meters in its federally owned  buildings starting around 2005. Internet-connected advanced utility  meters measure utility use in real-time, which GSA officials told us  allows GSA’s building managers to identify opportunities to reduce  energy use or anomalies that contribute to energy waste. For  example, GSA officials said that advanced utility meters can be used  to monitor energy consumption patterns and detect lights or other  building systems being used after normal business hours. According  to a senior GSA official, GSA currently has 675 advanced meters  installed in the agency’s approximately 1,600 federally owned  buildings.

GSAlink: GSA officials told us that GSAlink is a computer software  program that collects and analyzes data from advanced meters— including gas, electric, and water meters—and from a facility’s  “building automation system” and uses this information to alert  building staff to potential problems. Further, GSA officials said that  GSAlink allows them to identify building problems that occur over time  that may not be readily observable through the building automation  system, which generally presents information to building personnel on  how a building system is operating in real-time, not over a longer time  frame. For example, GSA officials told us that GSAlink can collect  data on the temperature and pressure of chilled water that is being  circulated through a building’s cooling system and identify equipment  that is operating outside of normal parameters or normal business  hours when a building automation system may not be actively  monitored. If GSAlink detects a potential issue, GSA officials told us  the software creates a record so that building maintenance staff can  investigate and remedy that issue. GSA building managers as well as  GSA staff at the regional and national levels told us they can log in to  GSAlink to check on the status of building system issues. According  to GSA officials, the contract for GSAlink was awarded in 2012 and  GSAlink is currently in use in 81 buildings, with at least one GSAlink- equipped building in each of GSA’s 11 regions. A senior GSA official  told us that eighty of these buildings are also equipped with advanced  meters. Further, in September 2017, this official told us that GSA  contracted to equip 4 additional buildings with GSAlink. According to  GSA officials, GSA generally plans to limit installation of GSAlink in  additional buildings until more is learned about using the technology in  the buildings in which it is currently installed.

Figure 1 illustrates an example of a GSA smart building that includes  advanced meters, GSAlink, and the building systems monitored by these  technologies.

Limited Quantified Information Exists on the Costs and Benefits of Key Smart Buildings Program Technologies

The Smart Buildings Program’s Installation Costs Are Affected by Building Characteristics and Can Be Difficult to Quantify

According to GSA officials, the approximate cost of equipping a building  with smart building technologies ranged from between about $48,000 to  $155,000. This includes costs for installing: advanced utility meters (approximately $25,000 to $55,000), and

GSAlink (approximately $23,000 to $100,000).

The cost of installing GSAlink depends on the condition of the building  automation system to which GSAlink is connected as well as the number  of individual building components (e.g., chilled water pumps, cooling  tower fans, thermostats) to be monitored by GSAlink. GSA officials  anticipate that advances in system architecture and reduced software  licensing costs will lower the cost of future installations. For example, a  senior GSA official told us in October 2017 that the cost to install GSAlink  in four additional buildings—the most recent buildings in which GSAlink  was installed—ranged between $23,000 and $25,000.

In addition, GSA is undertaking a broader effort to upgrade building  automation systems in its buildings to enable these systems and  connected applications, such as GSAlink, to operate on GSA’s protected  information technology network. According to GSA officials, GSA can only  install GSAlink in buildings whose building automation system operates  on GSA’s protected network. To date, GSA has upgraded building  automation systems to operate on the agency’s protected network in  approximately 400 buildings. GSA officials told us that the cost of these  upgrades has varied by building and depends on several factors,  including the size of the building, the complexity or condition of its building  automation system, and its age. According to GSA officials, upgrading  building automation system components to enable them to operate on the  protected network has cost approximately $90,000 per building, on  average. However, in some cases, these costs can be much higher;  integrating older systems in larger buildings has cost up to $3 million,  according to GSA officials.

Further, according to GSA officials, accurately calculating smart building  implementation costs can be difficult because GSA typically installs key  technologies—that is, advanced meters and GSAlink—and makes  upgrades necessary to install GSAlink in selected buildings incrementally,  sometimes as part of other capital improvement projects. For example,  the American Recovery and Reinvestment Act of 2009 and annual  appropriations have provided funding to GSA for energy and  conservation measures, including the purchase and installation of  advanced meters.

GSA Has Taken Steps toward Assessing Benefits of the Smart Buildings Program, but Efforts to Quantify Benefits Have Been Limited

GSA officials we interviewed at the central office, regional, and individual  building levels identified perceived operational benefits from implementing  the smart buildings program, including that it (1) enables them to identify  problems with building equipment or system operations more quickly and  more thoroughly and (2) allows for their greater oversight of operations  and maintenance services contractors relative to other GSA buildings. For  example, according to GSA regional staff we spoke to, both advanced  meters and GSAlink could detect if the cooling system was operating  when tenants were not occupying the building, thereby allowing the  building managers to adjust operations to avoid unneeded energy use  and wear on the cooling system equipment. Regarding contractor  oversight, GSA building managers stated that GSAlink allows the agency  to better monitor operations and maintenance contractors’ performance,  potentially yielding a better-run building with lower operations and  maintenance costs. For example, GSA officials described how the  analytic capability of GSAlink might allow building managers to precisely  identify and address a problem with a building before that problem is  noticed by tenants. This may result in, for example, a reduction in the  number of maintenance service requests from tenants and contribute to  lower building operating costs. In addition, GSA officials told us that  GSAlink allows GSA building managers to confirm the information  operations and maintenance services contractors present to them on the  status of issues identified by GSAlink. Further, according to these  officials, GSAlink allows building managers to monitor contractor  compliance with GSA’s requirement that contractors address building  issues identified by GSAlink within 30 days, thereby giving GSA officials  closer oversight of contractor performance.

GSA has taken some steps in the past to quantify the benefits associated  with the smart buildings program. While those efforts have identified  benefits, they have had some limitations. For example, in 2009—after  having begun installing advanced meters but before installing GSAlink— GSA attempted to forecast benefits of the smart buildings program by  commissioning a business case analysis. The business case concluded  that GSA’s energy and operating costs could be reduced by a smart  buildings program and that such a program would pay for itself in 1.7  years based on combined energy and operational savings. However,  this business case’s estimates of the program’s benefits have limited  usefulness for evaluating the current program because this study took  place before the program was fully implemented and did not account for  constraints affecting building operations. For example, a senior GSA  official told us that GSA’s operations and maintenance service contracts  are generally for multiple years at a fixed price, calling into question  whether operational cost savings can be realized to achieve payback  within the time frame estimated by the study.

In addition, GSA’s service contractor developed an application within  GSAlink that automatically estimates the costs that would be avoided by  addressing each type of fault that GSAlink identifies. According to GSA  officials, these estimates are imprecise and do not reflect actual avoided  costs, which thereby precludes their use in quantifying program benefits.  However, according to these officials, these estimates can be used to  compare the relative benefits expected to be achieved by addressing  identified faults and to prioritize maintenance and repair actions. GSA  officials told us that they took steps in June 2017 to improve the accuracy  of avoided cost estimates produced by this application, for example, by  enabling adjustments to account for differences in weather conditions and building size, and plan to continue their efforts to adjust and refine this  tool.

In a separate study in October 2016, GSA—in collaboration with  researchers at Carnegie Mellon University—analyzed the energy use  changes associated with both capital upgrades and operational initiatives,  including the use of smart building technologies. Capital upgrades  include actions such as installing new energy-efficient building systems  and equipment, whereas operational initiatives include, among other  things, changes to building operations based on the analysis of advanced  meter and GSAlink data. While the researchers concluded that the use of  advanced meter and GSAlink data led to reductions in energy use, the  researchers found that GSA’s utility consumption records were  incomplete and that GSA records of capital upgrades often do not include  key details, such as project start or completion dates, to indicate when  GSA would have received the benefit derived from the capital project.  This lack of complete data adds to the difficulty of estimating the reduced  energy consumption attributable to specific factors, including use of  advanced meters and GSAlink.

GSA Does Not Have Documented, Clearly Defined Performance Goals or Measures to Help It Manage the Smart Buildings Program

We have previously found that results-oriented organizations set  performance goals to clearly define desired program outcomes and  develop performance measures that are clearly linked to the performance  goals. Program goals communicate what results the agency seeks and  allow agencies to assess or demonstrate the degree to which those  desired results are achieved. Performance measures also show the  progress the agency is making toward achieving program goals. We have  previously reported that performance measurement gives managers  crucial information to identify gaps in program performance and plan any  needed improvements.

GSA has not documented the smart buildings program’s goals, contrary  to leading practices we identified in our prior work, which call for program  goals to clearly define desired program outcomes. GSA officials verbally  described to us broad goals for the smart buildings program: (1) reducing  energy consumption, (2) generating operations and maintenance cost  savings, and (3) creating a comfortable work environment conducive to  improved tenant productivity. However, GSA has not documented these  goals—for example, in the agency’s performance plan or in other program  documents. GSA officials could not provide a reason for why the agency  has not documented the smart buildings program’s goals.

Further, because GSA has not clearly defined its verbally expressed  goals, it cannot demonstrate progress in achieving them. This lack of  clearly defined goals is contrary to federal internal control standards,  which state that agency management should define objectives in  measurable terms so that performance toward those objectives can be  assessed. GSA could potentially measure progress toward its stated  smart buildings program goals of reducing energy consumption and  generating operations and maintenance cost savings, if data were  available to do so, as these goals seek to identify changes in quantifiable  outcomes, specifically energy use and cost savings. However, GSA  officials said that the agency cannot measure progress toward the stated  goal of improving tenant productivity and comfort because of the  subjective nature of individual tenant preferences, such as for office  temperatures. This subjectivity is consistent with statements from the  industry stakeholders we spoke with, who also said that identifying the  existence of a causal relationship between a building’s environment and  the productivity of its inhabitants is challenging. For example, an industry  stakeholder we spoke to told us that different building occupants have  different temperature or ventilation preferences and may accordingly be  the most productive at different ambient temperatures, making it  challenging to determine a building’s optimal temperature. Without  documented, clearly defined goals, it will be challenging for GSA to  determine what type of evaluative information it will need to monitor the  progress of the smart buildings program.

In addition, contrary to the leading practices we have identified in our  previous work, GSA has not developed performance measures for the  smart buildings program. According to these leading practices,  performance measures allow for an assessment of progress toward  achieving goals by including concrete, objective, and observable ways to  measure the program’s performance and compare this with the program’s  expected results. Further, federal internal control standards call for  federal program managers to use quality information to achieve that  program’s objectives and make informed decisions. However, GSA  lacks quality information that can be used to measure program  performance. As discussed in the previous section, GSA’s efforts to  quantify the smart buildings program’s benefits, including energy  reductions and cost savings, have been limited because GSA has had  difficulty in compiling data that would allow it to do so. For example,  GSAlink’s calculation of avoided costs estimated to be achieved by  addressing identified faults is useful for prioritizing maintenance actions  but not for measuring program performance because, according to GSA  officials, the estimates lack precision and relation to actual costs. In  addition, GSA’s October 2016 study on energy use reductions attributable  to the program faced problems owing to incomplete records on utility  consumption and capital upgrades. While we recognize that determining  what data can be collected in a cost-effective manner and can be used to  measure the performance of the smart buildings program may be difficult,  without such data and measures, GSA lacks the ability to determine the  program’s progress and make informed decisions about its current and  future operations.

GSA Faces Some Challenges in Implementing Smart Building Technologies and Is Taking Steps to Mitigate Them

GSA Is Taking Actions That May Mitigate Challenges Related to Cybersecurity

GSA faces cybersecurity challenges to its buildings, but is taking steps  intended to mitigate these challenges. According to GSA officials,  advanced meters and GSAlink operate in conjunction with Internet- connected building automation systems on the protected GSA information  technology network. GSA regional staff and industry stakeholders we  interviewed stated that cybersecurity presents challenges to those  operating smart building technologies, including GSA. Specifically,  because these building automation systems are connected to the  Internet, they provide a potential pathway for cyberattacks on GSA’s  network. According to our prior work, this connectivity could  compromise security, hamper GSA’s ability to carry out its mission, or  cause physical harm to GSA’s facilities or their occupants.

GSA has taken several actions that are intended to help mitigate  cybersecurity challenges to its buildings, including those that affect the  smart buildings program:

GSA has instituted policies and procedures addressing cybersecurity  threats and known vulnerabilities in its building systems. In December  2015, GSA published an information technology security policy,  defining the roles and responsibilities of GSA staff and establishing  controls to ensure compliance with federal regulations, laws, and GSA  directives. For example, this policy defines the role of the Federal  Government Authorizing Official whose responsibilities include  ensuring that monthly operating system scans, database scans, and  web application scans are performed and that all vulnerabilities  identified are resolved.

According to a GSA senior official, under GSA’s Building Monitoring  and Controls Program, which provides the infrastructure support  needed to connect a building to GSA’s network, GSA is taking steps  to mitigate the effects of potential external cyberattacks by moving  building automation systems of GSA-controlled buildings away from  public networks to GSA’s secured network. GSA officials told us that  there are currently approximately 400 federally owned buildings on  GSA’s secured network, which includes the 81 buildings equipped  with GSAlink. According to GSA officials, a building automation  system must be on GSA’s secured network before GSAlink can be  installed.

According to GSA officials, GSA also performs regular assessments  to validate that GSAlink system controls comply with relevant statutes,  such as the Federal Information Security Management Act of 2002,  National Institute of Standards and Technology security standards,  and GSA policies and procedures. In December 2014, we reported  on GSA’s efforts to address cyber risks in federal buildings in  compliance with relevant statute and guidance, finding that GSA had  not conducted security control assessments for all of its systems in  about 1,500 federally owned facilities. We recommended that GSA  assess its building control systems in a manner fully consistent with  federal law and related implementation guidelines. GSA has since  implemented this recommendation.

According to GSA documentation and officials, GSA conducts regular  vulnerability scanning of the equipment and systems involved in the  smart buildings program. For example, according to GSA regional  staff, a recent vulnerability in the GSA system that manages  maintenance requests was identified by GSA central office and was  remedied through a software upgrade.

GSA Is Taking Actions That May Mitigate Challenges with Stakeholder Support

GSA faces smart building technology implementation challenges related  to the limited technological proficiency of or lack of buy-in from some GSA  building managers and operations and maintenance services contractors,  but the agency is taking steps that are intended to engage these  stakeholders and ensure they are learning to use the smart buildings  program’s technologies. GSA regional staff acknowledge that there can  be inconsistencies among building managers and operations and  maintenance services contractors in terms of their familiarity and comfort  with using computers and computer-based analytical tools. According to  GSA officials, GSAlink proficiency and adoption varies by building and as  such, some buildings may obtain greater benefits from the system than  others. A lack of proficiency among building managers in smart building  technologies not only affects GSA, but is also an industry-wide concern,  according to industry stakeholders we interviewed. Industry stakeholders  we interviewed stated that operations and maintenance services  contractors are generally not well trained on smart building operations or  the differences between managing a smart building and managing a  traditional building.

GSA regional staff and GSAlink’s support contractor we interviewed also  identified operations and maintenance services contractors’ limited buy-in  to the smart buildings technologies as a challenge affecting  implementation of the program. According to GSA officials, this limited  buy-in to the smart buildings technologies could potentially lead to loss of  support for the program among operations and maintenance services  contractors, posing a risk to the program’s successful implementation.  GSA officials, regional staff, and GSAlink’s support contractor  acknowledge it is important to demonstrate how GSAlink, for example,  can make the operations and maintenance services contractors’ jobs  easier. According to GSA officials, if GSAlink can help a building’s  systems operate more efficiently, that improvement should result in less  unscheduled maintenance and fewer work orders for the contractor.  Additionally, industry stakeholders we interviewed suggested that  operations and maintenance services contractors do not currently have a  stake in whether a smart buildings program is successful.

According to those we interviewed, GSA has taken several actions that  are intended to help address these challenges:

GSA officials and regional staff told us that GSA provided initial  training to building managers and operations and maintenance  services contractors when GSAlink was first installed. According to  GSA officials, refresher training is available online through recorded  training sessions. Additionally, GSA regional staff told us that  knowledgeable GSA staff provide training to newly hired staff as  needed.

GSAlink’s support contractor staff told us that they lead regularly  scheduled teleconferences with each smart building’s staff either  monthly or quarterly depending on each building’s needs. At these  meetings, the support contractor remotely accesses GSAlink data for  a particular building to discuss the status of GSAlink notifications of  building system issues and recommend adjustments to building  equipment or systems to ensure optimal operations. GSA regional  staff we spoke with stated that this meeting serves as a form of  training and helps educate participants on how to use GSAlink.

To ensure that building personnel are using smart buildings  technologies, GSA officials told us that GSA’s central office monitors a  key performance indicator requiring GSA building managers and  operations and maintenance services contractors to address all  GSAlink notifications of building system issues within 30 days.  According to GSA officials, GSA central office and regional staff also  have the ability to remotely monitor advanced meter and GSAlink data  for individual buildings.

According to a senior GSA official, new operations and maintenance  services contracts will expressly require contractors to use smart  building technologies as part of their efforts to optimally operate GSA  buildings.

According to GSA officials, the agency’s smart buildings program is  intended to allow its staff and contractors to more efficiently manage  energy consumption and operations and maintenance actions aimed at  promoting cost-efficient operation of building systems and creating a  comfortable work environment for tenants in GSA’s buildings. Given  GSA’s recent decision to expand the use of GSAlink technology, it is  important that the agency be able to determine whether use of the  technology achieves these intended results. However, without  documented, clearly defined goals, performance measures linked to  those goals, and quality information to measure progress, GSA is limited  in its ability to make informed decisions about the smart buildings  program’s current or future operations as it develops plans to enlarge the  program to serve a greater proportion of its buildings portfolio. As a result,  GSA risks continuing to expend resources on a program that the agency  cannot demonstrate is meeting its intended objectives.

We are making the following two recommendations to GSA:  The Administrator of the General Services Administration should establish  clearly defined goals and related performance measures for the smart  buildings program. (Recommendation 1)

The Administrator of the General Services Administration should identify  and develop data that can be used to measure progress in achieving the  smart buildings program’s goals. (Recommendation 2)

We provided a draft of this report to GSA for comment. In its written  comments, reproduced in appendix II, GSA stated that it concurred with  our recommendations and is developing a plan to address them. In  addition, GSA clarified that the agency has been upgrading building  automation systems across its buildings inventory for a variety of reasons,  to include providing needed safeguards to comply with GSA’s information  technology security protocols. GSA also provided information on the  methodology used and results reported in its October 2016 study on  energy savings realized from combined investments in advanced  metering and GSAlink.

We are sending copies of this report to the appropriate congressional  committees and the Administrator of the General Services Administration.  In addition, the report is available at no charge on the GAO website at  http://www.gao.gov.

If you or your staff have any questions about this report, please contact  me at (202) 512-2834 or rectanusl@gao.gov. Contact points for our  Offices of Congressional Relations and Public Affairs may be found on  the last page of this report. GAO staff who made key contributions to this  report are listed in appendix III.

GSA Smart Buildings – San Francisco, California

Appendix II: Comments from the General Services Administration

Appendix III: GAO Contact and Staff Acknowledgments

Lori Rectanus, (202) 512-2834 or rectanusl@gao.gov.

In addition to the contact named above, Michael Armes (Assistant  Director); Daniel Paepke (Analyst in Charge); Edward Alexander, Jr.;  Jenny Chanley; John de Ferrari; Peter Haderlein; Geoffrey Hamilton;  Thomas Johnson; Nick Marinos; Malika Rice; Stephen Schluth; Elaine  Vaurio; Jack Wang; Michelle Weathers; and Dave Wise made key  contributions to this report.