@Hooman; "it is getting personal" that is an understatement.
@Vagabond; actually the AI is not very good for 1997. Dark Reign 1 released the same year, and was released before Outpost 2, but it had fully working AI that would actually build up its main base and build up secondary bases if the game dragged on for too long. It had a fairly competent AI, and like Outpost 2, it was a tiled, sprite-based, isometric game. Plus, Dark Reign 1 had a map editor out of the box, and allowed for text-file editing out of the box as well; one of the first games I modded and produced maps for (perhaps even the first!)
The issue with the base building AI code is "tubes". An AI could likely be programmed to find an optimal place to construct its structure, but as it requires tubes to connect to the command center, the building wouldn't function without a tube connection. Thus, everything has to be hard-coded. My thought on this is what if we allowed the AI to "cheat a little", and thus was magically able to instantly produce tubes to a structure the moment it is placed, so that it will connect to the command center or even waive the need for the AI to have tubes at all. Yes, it would be a bit unfair for the player who does need to do tubes, but at least then the AI might be made competent enough to think for itself rather than have to be hard-coded to build in X,Y location because the earthworker built tubes to that location. I'd say its the tubes as Dark Reign 1 didn't have tubes, and its AI had no issues with base building.
Heck, even Earth 2140 had better AI and base building code than Outpost 2 does for its AI. I wouldn't say its better than Dark Reign's, but it was still fairly competent and did build all of its required structures and in Earth 2140, you did have to build a Research Lab to unlock (albeit automatically over time... it was basically research tech 1, then once that is finished, automatically switched to tech 2, etc) new technologies. And it was also from 1997.
And then of course there was Warcraft 1 (1994), Warcraft 2 (1995), C&C RA (1996), and Age of Empires 1 (1996) all came out before Outpost 2 and had competent AIs (I've played each one for varying amounts of time... I think Warcraft 2: BNE I played the most). Though again, none of them had to deal with tubes... or have vehicles pathfind around lava. Though to be fair, Warcraft 2 and C&C RA1 both had naval units and naval transports that they had to pathfind through water and avoid hitting land, so its semi-similar.
@leeor; You'll see how bad StarCraft 1's AI is when you try to make a custom scenario for them and you'll see that the AI is actually quite dumb on its own (I had one AI build 5 spawning pools, for no real apparent reason at all, but to build 5 spawning pools) and the programmer has to put a lot of effort into building complex scripts to get it to do what they want it to do. I've tried multiple times to make custom scenarios in StarCraft 1, and its often a pain in the butt to get the AI to do precisely what you want them to do... and leaving their code to their own devices often doesn't work either... skirmish mode makes the AI look so simple to implement flawlessly, but it aint and you'll struggle to get the AI to do what you want in custom scenarios.