2.1
The Department of Foreign Affairs and Trade (DFAT) seeks approval from the Committee to proceed with the Australian Embassy Project in Washington, District of Columbia, USA.
2.2
The estimated cost of the project is $236.9 million excluding GST and includes DC sales tax 5.75 per cent.
2.3
The project was referred to the Committee on 1 December 2016.
Conduct of the inquiry
2.4
Following referral, the inquiry was publicised on the Committee’s website and via media release.
2.5
The Committee received one submission and one confidential submission from the Department. A list of submissions can be found at Appendix A.
2.6
On 17 February 2017, the Committee conducted a public and in-camera hearing. A transcript of the public hearing is available on the Committee’s website.
Need for the works
2.7
The existing chancery, which houses Australia’s current embassy in Washington DC is located at 1601 Massachusetts Avenue on Commonwealth owned land. It was designed in 1964 and purpose built in 1967. DFAT states that:
It sits within the ‘DuPont Circle Historic District’ although the building was classified in 2007 as ‘non-contributing’ to the character of the historic district.
The current building structure and most of the building services are at the end of their useable life. The electrical and hydraulic building services have become unreliable to the point that the running of the Embassy is subject to significant business continuity risks that could compromise critical core functions for the Australian Government.
2.9
Furthermore, DFAT told the Committee that the building is considered ‘B-Grade’ office accommodation:
Chronic delamination and spalling of the marble facades renders external areas unsafe to occupants, visitors and the general public to the extent that the building is now shrouded with scaffolding and protective netting. The building also requires significant base building services upgrade and site measures to provide appropriate levels of security, including the need for a sally port for vehicle screening.
2.10
As a result of the condition of the existing chancery, DFAT has identified a need for a replacement building:
The Australian Government requires a replacement chancery to ensure Embassy staff are provided with secure, modern and environmentally efficient facilities. The new chancery will highlight a modern, vibrant Australia to the various visitors, business groups and agencies which will include Australians who seek passport and consular assistance, international visits by Australian Government, State and Territory Ministers and parliamentarians and Australian business representatives who attend for trade development opportunities.
Options considered
2.11
In its submission, DFAT outlines three options that were analysed and considered to address the condition of the existing chancery:
Option one - maintain the existing building without refurbishment;
Option two - construct a new chancery on the existing site;
Option three - refurbishment of the existing chancery.
2.12
According to DFAT, option one would require ‘continuous major repairs and high levels of maintenance’ over the next 20 years. Additionally, the ‘increasing likelihood of building failure owning to the known degradation of the building services, structure and fabric’ holds the potential to disrupt business continuity ‘at short notice and for an extended period of time’.
2.13
Option three ‘would involve a substantial refurbishment program’, which would require the building to be completely stripped back ‘to the basic structural frame and concrete floor plates’.
2.14
DFAT told the Committee that, aside from the scale of the refurbishment, Option three presented additional problems:
[Option three] will also limit the capacity to improve physical security and will not support efficient, contemporary facilities, modern building engineering services and other internal and external fabric requirements. The resultant building will not overcome latent issues and provide access to natural light throughout due to the deep floorplates and existing ceiling heights.
2.15
Additionally, given that the existing chancery is reaching the end of the 50 year lifespan, following the required substantial refurbishment ‘structural elements that are exposed to weather will require ongoing maintenance beyond this period’. DFAT elaborated on this issue:
As the existing structure is approaching 50 years old, it is anticipated that some sections of the stripped-back structure will require costly remedial repairs. A significant refurbishment will trigger a requirement to bring the whole building up to current building codes and standards. The required works retrospectively applied to a building that is approaching 50 years old will be both complex and extensive, not representing value for money.
2.16
Option two involves the ‘demolition of the existing building’, the temporary relocation of the Embassy to another building for up to four years, and ‘the construction of a new chancery on the existing site’.
[Option two] offers optimal and contemporary space utilisation; the opportunity to embed appropriate security measures within the base building; deliver a design that is environmentally efficient through incorporation of the latest technology in building materials and systems; allow for ‘future-proofing’ and flexibility due to changing Australian Government priorities and requirements.
2.18
As a result, Option two was considered to pose the least risk in terms of delivery schedule and budget. While Option two and three ‘are comparable in costs’, Option two was preferred as it will deliver ‘a far superior, supportable and efficient building with a longer life span’ and because Option three ‘has the highest cost with the longest program and higher delivery and budget risks’.
2.19
In addition to these three options, DFAT also explored the possibility of shifting the location of the chancery from 1601 Massachusetts Avenue. At the public hearing, DFAT stated:
We undertook a market review to look at what the alternatives were to the proposal that was put forward. That included acquisition of land at an alternative location, and it also included long-term lease of another building. We did not identify a building that was available for acquisition and occupation by the Australian Embassy. The acquisition of an alternative site was considered but not preferred, because the location of the sites that were available were deemed to be not as conducive or viable for the business needs of the embassy.
Scope of the works
2.20
DFAT stated that the proposed works ‘comprises the fit-out of a temporary chancery, the demolition of the existing chancery, and the construction of a new chancery’. This is proposed to be conducted ‘in accordance with DFAT and individual agency spatial, operational and security requirements’.
2.21
The scope of the new chancery building is proposed to:
Incorporate the latest integrated technology; provide future proofing and flexibility across floor plates; provide representation and other spaces in which to showcase Australian diplomacy, public and cultural affairs and business promotional events.
Provide a substantial new building within the diplomatic precinct that reflects Australia’s unique cultural values and defines Australia’s physical presence in Washington.
Construct the base building incorporating appropriate security measures together with an integrated furnished office fit out.
2.22
In its submission, DFAT outlined the proposed size of the replacement chancery:
The new chancery will consist of approximately 9,889 square metres of office net lettable area over six upper levels and 6,860 square metres gross floor area of storage and car parking on three basement levels, meeting the current specific space and functional requirements of the agencies. Expansion space has been factored into the building footprint, and additional density can be achieved through modular layout in open plan areas.
2.23
DFAT explained the proposed design of the office space within the new chancery:
The workplace design will be configured to suit the imperial planning module and will have inbuilt scalability. Open plan spaces will consider how increased efficiency can be achieved through workstation design, allowing for greater density for each department without the need to increase actual department footprint. Department layouts, where appropriate, will incorporate greater flexibility through a kit of parts approach, allowing spaces to be reconfigured with minimal disruption and minimal cost.
2.24
In terms of architecture, DFAT noted their intention to address ‘the key considerations of national expression, security and operational functionality in a scheme that is bold yet elegant, innovative yet practical and expressive yet dignified’.
2.25
DFAT’s submission provided details on the design aspects of the proposed replacement building:
A sophisticated visual imagery, including the expression of national identity in built form, is achieved through an innovative and unique spatial composition, using material richness, visual clarity and the expression of diversity. The building seeks to evoke distinctive characteristics of the Australian natural environment – expansive skies, rich red colouration, and a diversity of light and materials – into the architectural expression through the use of open and engaging spaces, direct and dappled light, solid and defined forms, and an honesty of expression with the use of rich natural materials.
2.26
The exterior of the building is proposed to use two materials – metal and glass. At the public hearing, DFAT told the Committee that while it was looking at different cladding types, for the metal parts of the building façade:
We are proposing to investigate using copper as the material. The reason behind copper is that is has a range of different effects that can be applied to it through either alloying or burnishing…
2.27
In its submission, DFAT elaborated on the representational intention behind the selection of the façade:
The warm reddish colour of the metal references the quintessential red colouration of the outback, whilst the crisp clear glazing references the open expanse of Australian sky. The two materials change in density across the building according to their location, coming to a culmination at the south east corner of the building as a crisp clear line of glass, referring to the horizon line. The horizon line and lands edge are important qualities of Australian identity, the country’s expanse and its distinct form as an island nation.
2.28
In regard to the interior of the building, DFAT explained the intent behind the design at the public hearing:
Upon entry, rather than closing down the entry, we allow a view straight through the building. That gives you the idea that you are in a much larger volume. The connection to the sky through the atrium, which is critical for a contemporary workplace and allows natural light into the floors, also provides the ground floor with flooded light, so when you move into the representational spaces you are greeted with light. The materials inside are humble materials like timber. We are still looking at the floor, but it will potentially be Australian stone or simply just concrete. That is going to have further investigation.
2.29
Security was another consideration of the building design. DFAT told the Committee that the building seeks to integrate security ‘within landscape through lines of sight… whilst still creating a generous and welcoming environment of an Australian quality’.
2.30
The materials, particularly for the areas with high visibility to the general public and visitors, will be sourced with a preference for Australian products and materials, in line with the representational role of the proposed new chancery. DFAT stated that the building presents ‘an opportunity to showcase Australian materials and Australian design’, and that as the building moved through the detailed design phase, DFAT will ‘continue to explore and continue to maximise opportunities for showcasing Australian material’.
2.31
In discussing the fit-out of the temporary embassy, DFAT stated that the aim was to provide functional office accommodation while minimising cost as much as possible:
We will recognise at the outset the short-term nature of that occupancy and we will design accordingly to essentially minimise the expense that will be written off over that five year period. We will look at what the options are for some re-use and in the long term relocation back into the chancery. I accept that they will probably be somewhat limited, but certainly we are conscious of the cost of the short term accommodation and we are doing our best to minimise that expense.
2.32
DFAT also noted that the occupational density of the temporary fit-out is expected to fall below 14 square metres per occupied workstation.
2.33
In additional to the new chancery building and temporary accommodation, the scope of works includes a landscaping component, described in DFAT’s submission:
The site landscaping will include, subject to local approval, a selection of Australian species. An upstand anti-ram wall and bollards will provide security within a landscape setting. Low level planting will be complemented with a series of small trees and dedicated courts to enhance building presentation. The surrounding footpaths and kerb cuts will be upgraded in line with local requirements to ensure that the new building interfaces with the Washington urban landscape. Design will allow for clear lines of sight and automatic perimeter lighting.
Committee comment
2.34
The Committee finds that the design proposed for the new chancery presents an excellent opportunity to construct an iconic building of considerable beauty. DFAT’s intention to utilise Australian materials to the greatest extent possible is also appropriate. While this may increase costs in some respects, the representational functions of the building make it an ideal opportunity to showcase Australian materials such as timber, especially when these materials are showcased in a building that has an aesthetically pleasing façade, and incorporates artistic representations of the Australian landscape.
2.35
The Committee is also pleased to note DFAT’s intention to minimise costs for the fit-out of the temporary chancery, given that it will only be in use for several years.
2.36
The Committee finds that the proposed scope of works is suitable for the works to meet its purpose.
Cost of the works
2.37
The project has a budget of $236.9 million. This includes demolition of the existing building, fit out of the temporary office accommodation, construction of the new chancery, design consultant fees, project management, supervision and site office expenses. Escalation risk ‘will be borne by the contractor’, while foreign currency risk will be borne by the Commonwealth.
2.38
The Department provided further detail on project costings in its confidential submission and during an in-camera hearing.
2.39
The Committee is satisfied that the costings for the project provided to it have been adequately assessed by the proponent entity.
Committee comment
2.40
Having regard to its role and responsibilities contained in the Public Works Committee Act 1969, the Committee is of the view that this project signifies value for money for the Commonwealth and constitutes a project which is fit for purpose, having regard to the established need.
2.41
The Committee recommends that the House of Representatives resolve, pursuant to Section 18(7) of the Public Works Committee Act 1969, that it is expedient to carry out the following proposed works: Australian Embassy project, Washington DC.
2.42
Proponent entities must notify the Committee of any changes to the project scope, time, cost, function or design. The Committee also requires that a post-implementation report be provided within three months of project completion. A report template can be found on the Committee’s website.