The Cable

State Department Quietly Reverses Course On Its $500 Million Mexican Embassy

The State Department is planning a new, sprawling embassy compound in Mexico City, but it has quietly scuttled how it was to select a construction firm for it.

The new complex will be erected on eight acres the U.S. purchased in the city's Nuevo Polanco neighborhood, and cost $400 million to $500 million, State Department officials said. The main building will be about 515,000 square feet, making it one of the U.S.'s largest embassies. There also will be a 281,150 square-foot parking garage with space for 665 vehicles, a 70,900 square-foot warehouse and maintenance facility, a 13,850 square-foot residence for Marine Corps embassy security guards, and an 11,300 square-foot facility to securely allow vehicles and pedestrians to enter.

The new embassy will be built in a country in which drug cartels have operated with "near impunity" in recent years, according to newly declassified U.S. documents. They suggest the U.S. is extremely concerned about drug violence, in which more than 100,000 people have been killed or disappeared since 2006, when then-President Felipe Calderón vowed to take on the cartels.

U.S. personnel have come under fire in the process. In one example, two employees from the embassy in Mexico City were wounded about 35 miles south of the city in August 2012 after federal police opened fire on their vehicle. They were reportedly traveling to a Mexican navy base.

In June, the State Department's Bureau of Overseas Building Operations announced that it wanted construction firms to submit qualifications for the new Mexico City embassy in order to pre-qualify them to be involved in the project. It has quietly reversed course, saying its initial solicitation to industry is "cancelled in its entirety" because plans have been altered. The State Department did not explain why in its announcement, but said a new, future solicitation to industry for the project "is under acquisition review.

The project is still moving forward, however. State Department leaders want it completed by 2019.  It's part of a larger overhaul of embassy facilities across the globe spurred by the Secure Embassy Construction and Counterterror Act, which Congress passed in 1999 following the bombing of U.S. embassies in Tanzania and Kenya. The U.S. has opened 108 new diplomatic facilities since, and has an additional 31 projects in planning or under construction, said Christine Foushee, a department spokeswoman. In total, new embassies cost more than $10 billion as of 2010, according to Congress' investigative body, the Government Accountability Office.

In the case of the Mexico City embassy, the State Department decided to swap gears in how it will select a construction firm. The design of the project already has been awarded, but the U.S. needs to determine who will do the construction, Foushee said.

"The Department explored options for utilizing early contractor involvement, but after a careful review determined that a traditional design-bid-build methodology would be better aligned with the timeline and goals for the new U.S. Embassy project in Mexico City," she said in an email to Foreign Policy.

The decision follows a 2009 GAO report that pointed out problems in involving contractors on projects before they were designed. The State Department has frequently used a two-phase "design-build" solicitation process in awarding contracts for new embassies in the past, it said. In the first phase, contractors submit documentation to show how they will meet all qualifications for the project. The department then commonly issues a list of companies allowed to bid on the contract, which awarded with a fixed price.

That has led to problems in which contractors don't have limited time to meet construction deadlines because of the lengthy process to certify embassy design plans, the GAO found. The State Department said at the time that it would consider an alternative options, but continues to use the two-phase process on some projects. The State Department isn't using the two-phase system in New Mexico, however: It's using a three-step "design-bid-build" one, which will create more time for the construction firm selected to complete the work because the plans for it are more concrete.

The State Department also has struggled to find enough qualified contractors to carry out its slate of construction projects. That isn't the case in Mexico, either, Foushee said.

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The Cable

Israel and White House Locked in an Info War Over Iran

The White House and Israel are locked in an information war on Capitol Hill, and right now, Israel may be winning.

All week, the Obama administration has provided facts and figures to lawmakers on its sanctions relief proposal to build support for a deal on Iran's nuclear program. But some members in Congress don't trust the data U.S. officials are providing -- they trust conflicting data provided privately by senior Israeli officials.

According to multiple Congressional aides, Israeli ambassador to the U.S. Ron Dermer and the American Israel Public Affairs Committee are storming Capitol Hill in an effort to discredit the Obama administration's interim nuclear deal with Iran. The effort coincides with a visit by Israel's Minister of Economy Naftali Bennett, who is also speaking with lawmakers on the Hill. The campaign includes one-on-one briefings with lawmakers that provide data that strays from official U.S. assessments.

As a result, lawmakers have begun citing a range of facts and figures the Obama administration says are wildly inaccurate.

For instance, the Obama administration is offering Iran no more than $9 billion in sanctions relief, according to a source briefed by senior officials. But Israeli officials are telling lawmakers the U.S. is offering Iran $20 billion in sanctions relief or, if you ask Israel's Strategic Affairs Minister Yuval Steinitz, up to $40 billion.

Israeli officials are also saying that Iran's concessions would only set back its nuclear program by 24 days -- a fact also disputed by the administration.

"There are very large, inaccurate, false numbers out there in terms of what's on the table," State Department spokeswoman Jen Psaki said Thursday. She declined to call out Israeli officials, instead referring to inaccurate "reports." (Some of the reports just so happen to be sourced to Israeli officials.)

The wide discrepancies led to a major clash of viewpoints during Wednesday's classified briefing between Secretary of State John Kerry and members of the Senate Banking Committee. One GOP Senate aide said the administration repeatedly shot down data cited by senators provided by Israeli officials. "You'd raise the Israeli perspective and they'd say, that's wrong -- the Israelis don't know what they're talking about," the aide told The Cable."The administration would interrupt, 'that information is inaccurate.'" 

One of the senators citing Israeli data was Mark Kirk (R-Ill.), who said Kerry's briefing was "anti-Israeli."

"The administration very disappointingly said, 'discount what the Israelis say," he told reporters on Wednesday. "I don't. I think the Israelis probably have a pretty good intelligence service." Kirk said he had been briefed on Wednesday by a "senior Israeli official," but would not name the individual. 

He is not alone in his belief that the Obama administration is misleading lawmakers and undervaluing its sanctions relief offer to the Iranians by at least $10 billion. The rival estimate is $20 billion -- a figure supported by the Israeli government and the think tank Foundation for the Defense of Democracies (FDD), which cites Israeli media reports in some of its analysis. During a House Foreign Affairs Committee briefing on Wednesday, a number of Republicans and Democrats nodded in agreement to the $20 billion figure during testimony by FDD's executive director Mark Dubowitz. "The sanctions relief package offered at Geneva, if ultimately approved, will rescue Iran's struggling economy," testified Dubowitz. "The dollar value of the proposed sanctions relief at Geneva could yield Iran a minimum of $20 billion or more." 

House Foreign Affairs Committee chairman Ed Royce (R-CA) pegged the sanctions relief even higher in his opening statement -- suggesting the figure could be as much as $50 billion

Dubowitz told The Cable he was not surprised at the discrepancy between U.S. and Israeli assessments on sanctions. "I would say this is not unusual," he said. "I think there have been significant disagreements between the Israelis and the Americans on these sanctions questions. Significant differences on information on research and on the analysis and conclusions."

Other arms control experts were puzzled as to why the Israeli assessment gained any traction at all over the American assessment -- since Israelis are not members of the so-called P5+1 countries negotiating a deal with Iran.

"Personally, I would tend to believe the estimates and figures of the people who are actually at the negotiating table rather than people that are getting this information second-hand, even if they're senior Israeli officials," Daryl Kimball, executive director of the Arms Control Association, told The Cable. "This is in many cases a distortion of the physics and the reality."

Regardless, the administration is struggling to win over lawmakers. On Wednesday, Republican senators expressed strong disappointment with the administration's briefings on the Hill. Now, critics of the administration's message include an increasing number of Democrats, such as Sen. Bob Menendez, the chairman of the Senate Foreign Relations Committee, Rep. Steve Israel, the chairman of the Democratic Congressional Campaign Committee, and Pennsylvania Senator Bob Casey. On Thursday night, Casey defied administration pleas to halt any additional sanctions on Iran and urged his colleagues to advance sanctions legislation in the Senate Banking Committee.  "At this time, I see no reason to let up the pressure," Casey said.

When asked about the "huge gap" between the administration and Congress on the Iran deal on Thursday, Psaki did not exactly beam with optimism. "Look, I'm not here to give you a whip acount of where members of Congress stand," she told reporters. "But as I mentioned a little bit earlier, the secretary felt it was an important conversation he had with members yesterday. He laid out the full construct of our approach ... He doesn't feel that anybody could come out of there without a full understanding of what the approach would be."

Yochi Dreazen contibuted to this report.

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