diff --git a/app/javascript/packages/build-sass/CHANGELOG.md b/app/javascript/packages/build-sass/CHANGELOG.md
index 1779cd56b61..fc30d6f8bfb 100644
--- a/app/javascript/packages/build-sass/CHANGELOG.md
+++ b/app/javascript/packages/build-sass/CHANGELOG.md
@@ -1,8 +1,10 @@
-## Unreleased
+## 1.3.0
 
 ### Improvements
 
 - Adds support for ".scss" file extension, as an alternative to the current ".css.scss" support. In both cases, the output files use the basename with a ".css" extension.
+- Creates the `--out-dir` directory if it does not exist already.
+- Outputs any error that occurs during build, not just Sass compilation errors.
 
 ## 1.2.0
 
diff --git a/app/javascript/packages/build-sass/cli.js b/app/javascript/packages/build-sass/cli.js
index c8bf23f2072..90fbe4f7786 100755
--- a/app/javascript/packages/build-sass/cli.js
+++ b/app/javascript/packages/build-sass/cli.js
@@ -2,6 +2,7 @@
 
 /* eslint-disable no-console */
 
+import { mkdir } from 'node:fs/promises';
 import { watch } from 'chokidar';
 import { fileURLToPath } from 'url';
 import { parseArgs } from '@pkgjs/parseargs'; // Note: Use native util.parseArgs after Node v18
@@ -80,6 +81,9 @@ function build(files) {
   );
 }
 
-build(fileArgs).catch(() => {
-  process.exitCode = 1;
-});
+mkdir(outDir, { recursive: true })
+  .then(() => build(fileArgs))
+  .catch((error) => {
+    console.error(error);
+    process.exitCode = 1;
+  });
diff --git a/app/javascript/packages/build-sass/cli.spec.js b/app/javascript/packages/build-sass/cli.spec.js
new file mode 100644
index 00000000000..a4a47896483
--- /dev/null
+++ b/app/javascript/packages/build-sass/cli.spec.js
@@ -0,0 +1,21 @@
+import { dirname, join } from 'node:path';
+import { fileURLToPath } from 'node:url';
+import { promisify } from 'node:util';
+import { stat } from 'node:fs/promises';
+import { exec as execCallback } from 'node:child_process';
+
+const exec = promisify(execCallback);
+const cwd = dirname(fileURLToPath(import.meta.url));
+
+describe('cli', () => {
+  context('with missing output directory', () => {
+    it('creates the output directory', async () => {
+      await exec(
+        './cli.js fixtures/missing-out-dir/in.css.scss --out-dir=fixtures/missing-out-dir/out',
+        { cwd },
+      );
+
+      await stat(join(cwd, 'fixtures/missing-out-dir/in.css.scss'));
+    });
+  });
+});
diff --git a/app/javascript/packages/build-sass/fixtures/missing-out-dir/.gitignore b/app/javascript/packages/build-sass/fixtures/missing-out-dir/.gitignore
new file mode 100644
index 00000000000..1fcb1529f8e
--- /dev/null
+++ b/app/javascript/packages/build-sass/fixtures/missing-out-dir/.gitignore
@@ -0,0 +1 @@
+out
diff --git a/app/javascript/packages/build-sass/fixtures/missing-out-dir/in.css.scss b/app/javascript/packages/build-sass/fixtures/missing-out-dir/in.css.scss
new file mode 100644
index 00000000000..e69de29bb2d
diff --git a/app/javascript/packages/build-sass/package.json b/app/javascript/packages/build-sass/package.json
index ab70347aa9c..477410a7ea2 100644
--- a/app/javascript/packages/build-sass/package.json
+++ b/app/javascript/packages/build-sass/package.json
@@ -1,6 +1,6 @@
 {
   "name": "@18f/identity-build-sass",
-  "version": "1.2.0",
+  "version": "1.3.0",
   "private": false,
   "description": "Stylesheet compilation utility with reasonable defaults and fast performance.",
   "type": "module",