[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
GENERAL SERVICES ADMINISTRATION'S FISCAL YEAR 2008 CAPITAL INVESTMENT
AND LEASING PROGRAM
=======================================================================
(110-42)
HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND EMERGENCY MANAGEMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
MAY 10, 2007
__________
Printed for the use of the
Committee on Transportation and Infrastructure
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
JAMES L. OBERSTAR, Minnesota, Chairman
NICK J. RAHALL, II, West Virginia JOHN L. MICA, Florida
PETER A. DeFAZIO, Oregon DON YOUNG, Alaska
JERRY F. COSTELLO, Illinois THOMAS E. PETRI, Wisconsin
ELEANOR HOLMES NORTON, District of HOWARD COBLE, North Carolina
Columbia JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York WAYNE T. GILCHREST, Maryland
CORRINE BROWN, Florida VERNON J. EHLERS, Michigan
BOB FILNER, California STEVEN C. LaTOURETTE, Ohio
EDDIE BERNICE JOHNSON, Texas RICHARD H. BAKER, Louisiana
GENE TAYLOR, Mississippi FRANK A. LoBIONDO, New Jersey
ELIJAH E. CUMMINGS, Maryland JERRY MORAN, Kansas
ELLEN O. TAUSCHER, California GARY G. MILLER, California
LEONARD L. BOSWELL, Iowa ROBIN HAYES, North Carolina
TIM HOLDEN, Pennsylvania HENRY E. BROWN, Jr., South
BRIAN BAIRD, Washington Carolina
RICK LARSEN, Washington TIMOTHY V. JOHNSON, Illinois
MICHAEL E. CAPUANO, Massachusetts TODD RUSSELL PLATTS, Pennsylvania
JULIA CARSON, Indiana SAM GRAVES, Missouri
TIMOTHY H. BISHOP, New York BILL SHUSTER, Pennsylvania
MICHAEL H. MICHAUD, Maine JOHN BOOZMAN, Arkansas
BRIAN HIGGINS, New York SHELLEY MOORE CAPITO, West
RUSS CARNAHAN, Missouri Virginia
JOHN T. SALAZAR, Colorado JIM GERLACH, Pennsylvania
GRACE F. NAPOLITANO, California MARIO DIAZ-BALART, Florida
DANIEL LIPINSKI, Illinois CHARLES W. DENT, Pennsylvania
DORIS O. MATSUI, California TED POE, Texas
NICK LAMPSON, Texas DAVID G. REICHERT, Washington
ZACHARY T. SPACE, Ohio CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii JOHN R. `RANDY' KUHL, Jr., New
BRUCE L. BRALEY, Iowa York
JASON ALTMIRE, Pennsylvania LYNN A WESTMORELAND, Georgia
TIMOTHY J. WALZ, Minnesota CHARLES W. BOUSTANY, Jr.,
HEATH SHULER, North Carolina Louisiana
MICHAEL A. ACURI, New York JEAN SCHMIDT, Ohio
HARRY E. MITCHELL, Arizona CANDICE S. MILLER, Michigan
CHRISTOPHER P. CARNEY, Pennsylvania THELMA D. DRAKE, Virginia
JOHN J. HALL, New York MARY FALLIN, Oklahoma
STEVE KAGEN, Wisconsin VERN BUCHANAN, Florida
STEVE COHEN, Tennessee
JERRY McNERNEY, California
VACANCY
(ii)
?
Subcommittee on Economic Development, Public Buildings and Emergency
Management
ELEANOR HOLMES NORTON, District of Columbia, Chairwoman
MICHAEL H. MICHAUD, Maine SAM GRAVES, Missouri
JASON ALTMIRE, Pennsylvania BILL SHUSTER, Pennsylvania
MICHAEL A. ARCURI, New York SHELLEY MOORE CAPITO, West
CHRISTOPHER P. CARNEY, Pennsylvania Virginia
TIMOTHY J. WALZ, Minnesota CHARLES W. DENT, Pennsylvania
STEVE COHEN, Tennessee JOHN R. `RANDY' KUHL, Jr., New
JAMES L. OBERSTAR, Minnesota York
(Ex Officio) JOHN L. MICA, Florida
(Ex Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
TESTIMONY
Winstead, David L., Commissioner, Public Building Service,
General Services Administration................................ 2
PREPARED STATEMENT SUBMITTED BY MEMBERS OF CONGRESS
Altmire, Hon. Jason, of Pennsylvania............................. 24
Norton, Hon. Eleanor Holmes, of the District of Columbia......... 25
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Winstead, David L................................................ 26
[GRAPHIC] [TIFF OMITTED] T5924.001
[GRAPHIC] [TIFF OMITTED] T5924.002
[GRAPHIC] [TIFF OMITTED] T5924.003
HEARING ON GENERAL SERVICES ADMINISTRATION'S FISCAL YEAR 2008 CAPITAL
INVESTMENT AND LEASING PROGRAM
----------
Thursday, May 10, 2007
House of Representatives
Subcommittee on Economic Development, Public
Buildings and Emergency Management,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:05 a.m., in
Room 2253, Rayburn House Office Building, the Honorable Eleanor
Holmes Norton [chairwoman of the subcommittee] presiding.
Ms. Norton. Good morning. I want to welcome the
Commissioner of Public Building Service here this morning and
look forward to his testimony. I am especially eager to hear
progress the agency has made in regard to the Federal presence
in the NoMa Neighborhood, close to the Capitol. In addition, I
want to hear from the agency about the progress at the St.
Elizabeth's Campus and the egress-ingress plans for the campus,
which require the agency to request funds for the acquisition
of two acres of land along the campus.
This year's program is very modest in comparison with other
years. I also would comment on the fact that no new funding was
requested for courthouse construction in the fiscal year 2008
program. I think we ought to get that around the Congress so
people don't keep coming to me and asking me for courthouses.
The Border Station Program is the program that gets all the
attention this year, with funding requested for seven border
stations along both the northern and southern borders.
There are two funding requests for St. Elizabeth's Campus,
one for the construction of the Coast Guard Headquarters and
the other for funds to purchase land for road access, as I
previously mentioned.
Since the lease package was not until recently received,
the Committee will not consider the leases at this time.
I will limit my remarks, as I have many questions for Mr.
Winstead.
I am pleased to recognize now Ranking Member Graves for any
opening remarks he may wish to make.
Mr. Graves. Thank you, Madam Chair.
I want to thank the Public Buildings Commissioner Mr.
Winstead for being here today. I appreciate your coming in and
providing testimony on fiscal year 2008.
Each year, the General Services Administration submits to
Congress a prospectus for the alteration, acquisition, design,
construction, lease of Federal buildings, and courthouses. As
the Subcommittee with responsibility for overseeing these
projects, I believe we have an obligation to do our due
diligence to ensure that projects are necessary and
appropriately budgeted for.
As we review these projects, we need to make sure we are
getting the best value for the Government's dollars for the
taxpayers' dollars. On that note, I am very interested in the
results of the comprehensive courtroom usage study that this
Committee has requested. This study is going to investigate how
often courtrooms are actually used for official functions, and
I am very interested in the courtroom sharing as a means of
keeping the costs of courthouse construction reasonable. I
think it is very important that we don't overbuild when it
comes to courthouses.
Additionally, I think we should take a deeper look at the
cost of leasing versus Federal construction. About half of the
lease prospectuses submitted this year are for the Federal
Bureau of Investigation. The FBI has been growing since
September 11th, and it is clear that the FBI isn't going to go
away, obviously, soon, and their construction isn't going to go
away soon. These are large and expensive leases; they are
costly build-to-suit leases with expensive security
requirements. Does anybody really think that we are going to
leave these buildings after we have put so much money into
them? Is leasing really the best value for the Government is
the question I have.
For fiscal years 2006 through 2008, GSA has proposed 22 FBI
lease projects. The estimated annual lease payments for these
projects is $160 million. To deliver those same projects
through construction, it would cost about $1.7 billion. That
means that in 11 years these leases will cost more than if we
constructed these buildings ourselves. Clearly, there is a
definite cost advantage to ownership. Colossal Government waste
is involved with leasing over Government-owned facilities, and
we do this because of ridiculous budget scoring rules that we
have.
I am looking forward to working with the Chairman in
examining many of these issues as we move forward, and, again,
I appreciate, Mr. Winstead, you for being here today. Thank
you.
Ms. Norton. Thank you very much, Mr. Graves. I certainly
want to associate myself with your comment on leasing versus
construction that has turned out to be a scoring problem that
is penny wise and very pound foolish. I hope we can find some
way around it to save the taxpayers' money.
I would ask Mr. Arcuri if he has any opening statement at
this time.
Mr. Arcuri. No, ma'am.
Ms. Norton. Thank you very much.
I am pleased to hear testimony now from Mr. Winstead.
TESTIMONY OF DAVID L. WINSTEAD, COMMISSIONER, PUBLIC BUILDING
SERVICE, GENERAL SERVICES ADMINISTRATION
Mr. Winstead. Thank you, Chairman Norton, Congressman
Graves. I am very pleased to be before the Subcommittee on
Economic Development, Public Buildings and Emergency
Management. I am David Winstead. I am Commissioner of Public
Buildings Service. I have been privileged to serve in this
position since October 2005.
I am also very pleased to have with me Deputy Tony Costa
and Assistant Commissioner Bill Matthews and members of our NCR
team, including Bart Bush, Art Turowski, and others.
I wanted to share with you both addressing some of the
questions you just mentioned in your introductory remarks, but
also I thank you for inviting me to testify here today on
behalf of our 2008 Capital Investment and Leasing Program. As
you know, I have put to the record a full statement addressing
a lot of the issues and background on these projects.
I am happy to report to you today that Public Buildings
Service, we feel, continues to have a strong operating position
at the end of fiscal year 2006. Eighty-one percent of our
Government-owned assets achieved positive funds from operation
and our percentage of vacant space in our owned inventory,
which is half of our portfolio, was 7 percent, which is way
below the private sector standards. In addition, our cleaning
operation and maintenance of our Federal buildings to ensure
that we are meeting both safe and healthy and comfortable work
environments was 4.2 percent below the private sector.
Before I address our fiscal year 2008 Capital Program, I
would like to share with you some of our efforts in the recent
year and accomplishments in looking at the critical
organizational support we have for the Federal Buildings Fund
and our program, as well as challenges that we are having with
clients, as well as meeting those challenges. As you know, my
predecessor spent a great deal of time on customer relations,
and a lot of the things he put in place we are continuing to
refine.
We have also, in the last year, strengthened our Capital
Program delivery by restructuring the Office of the Chief
Architect and adding a new position, Assistant Commissioner for
Construction, to really focus on both the number of projects
that you have mentioned--the FBI, the courthouses, and the
border stations--but also focus on the reality of the
marketplace. We are seeing huge costs and increase in material
costs, twice as high as the CPI in recent years.
Also, in order to more effectively manage our Real Estate
Leasing Program, as well as the administration of the national
brokerage contract, we are also strengthening and will be
working this current year on looking at our real estate
acquisition and trying to strengthen that with perhaps some new
support internally; and that is in addition to our customer
service efforts through Assistant Commissioner Martha Benson.
Given the business volume, complexity of our work, and
significant stakeholder interest, I think this area has to
continue to be a major priority in the coming months.
Now I would like to provide you a quick overview of sort of
our fiscal year 2008 program. I believe these projects
submitted meet the needs of our customer agencies and will
enhance, in fact, the Federal real property portfolio. I would
mention that we have had an incredible management career. Bill
Matthews has been focused, as Assistant Commissioner, on our
portfolio, looking at optimizing the value, optimizing our
income from the Federal Building Fund, directing capital
resources to the best use, and helping us overall to manage the
continued owned inventory.
Looking at repair and alteration section of the budget for
fiscal year 2008, we are requesting a Repair and Alteration
Program of $804 million to maintain and improve properties in
GSA's inventory. GSA traditionally first looks at reinvesting
in our existing owned properties before considering new
construction. A recent renovation of the historic Pittsburgh
U.S. Post Office and Courthouse--I mentioned this to
Congressman Altmire recently--was rededicated just this last
year, in November, with some $88 million in renovation
expansion. We provided through that a modern office space for
the courts and also invested in a landmark national register
building to ensure both the Federal presence, as well as to
preserve a vital part of downtown Pittsburgh.
In addition, GSA has had a longstanding practice of
actively managing our buildings to reduce operating costs and
energy consumption. We know that Congress and the
Administration are very committed to looking for obvious energy
saving efforts, and we are doing that through our 18 LEEDs
buildings and all the new LEEDs, as well as lease these
requirements that we are administering.
In addition this year, we are requesting $15 million for
implementation of energy retrofit in Government-owned
properties, such as lighting control and energy management and
solar systems. Based on our previous experience, we estimate
that energy savings at some 70 billion BTU or about $1.1
million annually through those efforts alone.
GSA is also continuing to support opportunities for solar
and new renewable energy. In 2006, about 4.5 percent of our
electricity was generated through renewable power and through
renewable energy certificates, compared with a national average
of about 2.3. So we are almost two percentage points higher
than the national average.
Turning to the new construction portion of our program, we
are requesting a Construction and Acquisition of Facilities
Program of $615 million. This includes funding for site
acquisition, design, infrastructure, construction, the
management and inspection costs for all our Federal facilities
in our inventory, which now are over 1500. An example of one of
most recent major construction programs and projects is a new
headquarters for the Bureau of Alcohol, Tobacco, Firearms and
Explosives, which will open in the next couple of months in the
North Massachusetts area, or NoMa section, of Washington, D.C.
As you can see on your far left, a picture of that new
facility, it is a state of the art headquarters for ATF
encompassing approximately 422 million [subsequently edited by
witness to read: 422 thousand] square feet.
Our largest program request this year is the Department of
Homeland Security Consolidation and Development at St.
Elizabeths West Campus in Washington, D.C. Our fiscal year 2008
program request for St. Elizabeths is for construction of the
Coast Guard Headquarters and Command Center and the design of
the DHS Headquarter elements, infrastructure work to facilitate
development and funding to purchase an additional site to
facilitate egress and ingress into this proposed new campus of
DHS.
That second overview is a picture of the St. Elizabeths
campus, the middle photograph.
GSA is also requesting funds for site acquisition, design,
and construction of seven land ports of entry and funding to
complete the consolidated FDA Headquarters at White Oak, which
is about a $1.1 billion overall project new campus for the
Federal Food and Drug Administration.
In our Courthouse Program, the President's budget contains
funding to begin construction of the Buffalo Courthouse. As you
know, GSA funded this project in fiscal year 2007 spending,
instead of 2008.
As you turn to our Leasing Program, as I testify here
today, I will tell you our leasing portfolio is now a little
bit above our owned portfolio for the first time. We continue
to acquire leased space for our customers, and in order to meet
these space requirements, we have entered into more than 8500
private sector leases in some 7100 locations nationwide. We are
very pleased, however, that the management of those lease
actions, in terms of vacant space within our leased inventory,
has been at or below 1.5 percent for the last four years, well
below the national average of vacancy of about 11.6 percent. So
we are managing these Federal leases in a very tight manner to
ensure that we have fully occupied space under these lease
contracts.
This year we are submitting 13 lease prospectuses and one
alteration and lease space prospectus for your consideration.
In conclusion, GSA is always seeking ways to increase
investment capital, to address our liability for Repair and
Alteration. It is a fact that we now have over $1 billion
[subsequently edited by witness to read: $7 billion] a year in
terms of reinvestment needs in our inventory. Obviously we do
not have quite that number in terms of this budget, so we are
constantly looking at ways to restructure and access
underutilized assets, our Tier 3, as we call them, and reinvest
that into our owned assets.
We are also currently exploring the use and appropriate
ways under existing authority to expand our program, both
looking at obviously the authority we have to retain the
revenues from disposal of properties, which in the fiscal year
2005 appropriations bill gave us that authority, as well as
exploring some additional authority under that disposal which
allows for out-leasing assets and lease-back for improved space
to help to look at potentially funding reinvestment in this
owned inventory.
Congress has periodically recognized the need to intervene
where there is rapid growth in government programs and emerging
public priorities in terms of direct funding where we have
exceeded the capacity of the Federal Buildings Fund.
GSA continues to collaborate with our client agencies to
address customer financial constraints, while preserving
necessary capital. I have spent a lot of time over the last
year working with the Federal judiciary in a very aggressive
partnership to contain costs and to work with them to both
administer our program and build through Design Excellence new
courthouses, but also to reflect a sensitivity to their rent
and delivering these projects on time and on budget.
We have identified opportunities to consolidate
requirements, to reduce underutilized space, to minimize tenant
improvement costs, and expiring space assignments, and we look
forward to working with the Subcommittee on solutions that
enable GSA to address a growing inventory and infrastructure
liability, as well as the requirements of special purpose
facilities such as Federal courthouses and border stations.
Before I conclude, I would mention that I am also pleased
to provide to the Committee copies of some documents that we
find very, very useful, both in terms of our stakeholders here
in Congress and our clients. I do have copies of a number of
documents. One is the state of our portfolio that essentially
addresses some of the facts that I have said in testimony about
the health of our Federal buildings. This last year we are now
focusing on a new effort called Workplace Matters, where we
essentially have a program where we are implementing workplace
solutions with our clients so they can get more utilization out
of the space they currently have in either owned or leased
inventory.
Lastly, as you all know, for 15 years now we have had a
Design Excellence program which has been recognized by the
architectural profession as one of the--and in fact put us in
the lead in terms of landmark Federal structures that are
receiving awards from the AIA and many other organizations. In
fact, this morning, the Urban Land Institute is awarding an
award for one of our buildings. Every two years we have a
design award that we do with our new construction. I am also
giving you all a copy of our new design awards to look at.
Madam Chair, Ranking Member Graves, Congressman Arcuri, I
am very pleased to be here and I hope that this has given you
some background on our 2008 request. I would be happy to answer
any questions.
Ms. Norton. Thank you very much, Mr. Winstead. As you know,
you are about to embark on the largest building program I think
in the history of the agency with the St. Elizabeths campus.
That would mean building not one agency, but a compound of
agencies. I don't think there has been a building effort like
that by the Federal Government since the Pentagon.
We have seen some recent spike in construction costs--they
can be expected over the years when construction will take
place--of the several agencies, beginning with the Coast Guard,
that will be built. I would like to know how the cost of
construction today has affected your Capital Lease and
Investment Program on the one hand and, on the other, whether
you have looked into ways of mitigating or alleviating the
pressure of the rising cost of construction both in leases and
now as you begin a construction program of your own.
Mr. Winstead. Chairman Norton, as I mentioned earlier, we
have seen an enormous increase in the marketplace over the last
three or four years that is in fact doubling the CPI; 5.7
percent increase in construction average nationwide compared to
2.3 for the CPI. In Southern California, where we have seen a
lot of competition with billions of dollars of school
construction competing for our Federal construction leases out
there on new projects, we have seen over 12 percent increase in
steel, which has driven up. So we have had to manage these
projects with some new oversight.
That is why I created this Assistant Commissioner for
Construction who is now in place, Bob Fraga, who has put in
place many more controls in terms of both looking at variance
of projects along the way, looking at how we can shorten the
design process so that, as we start a new courthouse, it
traditionally takes six or seven years. We try to do the design
work much quicker so that the end results in the marketplace
and better, obviously, meets the prospectus level funding that
we have gotten authority from you to deliver this project.
I will tell you that the recent years, as you have just
mentioned, have been extremely challenging, but I think with
these new mechanisms in place, and what we have had in place
before, I think we are going to be better able to control these
projects moving forward. Also, we do not expect, in the coming
year, quite the level of multiples over the CPI we have seen in
material cost increases.
Ms. Norton. Why don't you expect those in the coming years?
Mr. Winstead. Our AC does not feel that it will be quite
the same as it was in 2006, where we saw some 10 percent
increase.
Ms. Norton. What caused that in 2006?
Mr. Winstead. Well, as I mentioned, I think competition in
certain markets. Obviously, the consumption of material, steel,
glass----
Ms. Norton. The reason I ask, Mr. Winstead, is because what
I think we all are going to have to get used to is not some
hunch that school systems are also building where we are
building and calling upon the same resources, but the Chinese
are in the market.
Mr. Winstead. Oh, you are correct.
Ms. Norton. They want all the wood; they want all the
steel.
Mr. Winstead. Yes. No question.
Ms. Norton. So in calculating the costs, it seems to me one
has to have a global vision as to how costs are driven up. I
mean, everybody is applauding biofuels, and then we find that
the cost of corn is going up. I don't know what is going to
happen to poor people who depend upon corn in other countries;
it is an ingredient in much food that we eat.
So in a real sense it becomes very much more difficult to
control costs when you are not even dealing within a regional
or national market. Is this new Commissioner prepared to look
at how the global marketplace will affect costs, especially as
you embark with steel and concrete? You are going to be maybe
20 years building St. Elizabeths campus, for example.
Mr. Winstead. Madam Chair, I think you are absolutely
correct. The growth in China and India and other parts of the
world that are consuming these products are driving up the
prices for American construction here in the U.S. But I do feel
that the tracking mechanisms of variance, in terms of project
costs, the way we are reviewing them, we recently had a
charrette with industry leaders from the construction industry,
members of the AGC, to come and to help share with us their
perspective on how they in the private sector are dealing with
these cost issues. It is going to continue to be a challenge,
but we are doing the best we can, and I think we both have
internal professional support, real estate and project
management support, as well as outside advice, to try to deal
with it.
Ms. Norton. I know we are building in different parts of
the Country and different regions. One wonders if there is not
a way to somehow get the advantage from being the Federal
Government in the amount of--the decentralization of the way,
of course, we have to build may mean that the savings that
would otherwise come, for example, to a major corporation who
was building in various parts of the Country, might not come to
us depending on whether or not there is some way for our role
in the marketplace, wherever we happen to be building, whatever
is the regional basis for the particular contracts, unless
somehow we can bring to bear the fact that it is the Federal
Government and the fact that we are major players, somehow, if
you look at us nationally in the marketplace.
I am hoping that your new leasing commissioner, or whatever
is his title, can somehow make the economies of scale come to
play here.
Mr. Winstead. Madam Chairman, on the point, you are kind of
referencing supply side management, and one of the things we
are doing more is looking at obviously the quantity, the
hundreds of millions of dollars of building materials and
projects we are building to manage that in terms of contracts,
and we are doing that a lot more aggressively now than we were
three years ago. That is part of it. I mean, we do understand
the leverage we have with $2 billion in the marketplace than we
should get economies.
The other thing we are doing that is new from the last year
when I was here is in the ports of entry. Although we continue
to design them under Design Excellence, we are looking at more
modularization of the components in a port and, in so doing,
trying to get economies from port to port instead of
reinventing the wheel, if you will, every time we go to procure
or have bids out for a new land port of entry.
Ms. Norton. Let me ask one more question then round and
then go to the Ranking Member.
I am sure the agency was embarrassed--I certainly was--
particularly after the hearing we held on NoMa, to see a two-
day story recently in The Washington Post about employees at
the Equal Employment Opportunity Commission--and I am
embarrassed because I once chaired the agency--who were up in
arms about coming to NoMa cast doubt on the marketing and,
frankly, realtor skills of the GSA. Now, here we have a part of
Washington which the Federal Government has invested heavily,
where the way has been broken open, even before the Federal
Government put the ATF there, put the new New York Avenue
subway there, broken open by the private sector, the CareFirsts
of this world, with, of course, some Federal agencies there.
I have to ask you what was your outreach to EEOC in
specific terms? What did you do? How did you handle that?
Mr. Winstead. As you know, the National Capital Region has
been working very, very closely with the EEOC. In fact, I
believe by week's end we are going to have an action on the
EEOC, and Bart Bush is here and his people, if you need any
additional information on that.
Ms. Norton. We were very pleased to see, finally, an agency
come forward, perhaps before you became commissioner, five
years ago, when the GSA joined with me in having a forum,
inviting in all of the developers who were already bringing
amenities there with nothing. We are talking about the area in
downtown closest to the Capitol of the United States. So that
meant that somehow marketing of the kind that--again, the local
real estate community, in whom I understand you are
increasingly relying, would never have abided.
I mean, if you are trying to market a place that people
don't know as well, you have got to do it, it is not going to
do it for itself. Of course, there is a lot of knowledge on the
part of the Committee about what is happening there, but there
seemed to be almost no knowledge on the part of EEOC employees,
and the chairman of the agency was left on her own. I am about
to send a letter over there in which I describe some of what
has been happening. But she seemed to be left on her own to
handle this matter.
I called the BID--BID stands for Building Improvement
District--and they are ready and willing to go, and I said, my
goodness, why are we fighting this war about a part of the city
where they ought to be given the prices closest to the only
thing even remotely resembling a mall in the District of
Columbia, two subways? What in the world are they fighting
about? And if the GSA can't handle that, what are they going to
do when we send a hundred and some thousand Federal employees
out to St. Elizabeths, which is indeed a new area for the
Federal Government, across the Anacostia?
It did not exactly inspire confidence in the skills of the
agency to market property that the United States Government
says is where it wants Federal agencies to locate because we
have spent our money in order to accommodate their location
there. I have got to find out what happened to the EEOC.
Mr. Winstead. Madam Chairman, I will make sure that I get
to you and the Committee exactly what meetings were held with
the chairman of the EEOC in terms of discussion about
locational options, and I will be happy to----
Ms. Norton. Well, of course, the chairman--Mr. Winstead, I
want you to answer the question I am asking. The chairman did
her job. She knew that Federal agencies don't have the funds in
their budget in order to accommodate the K Street rents. She
went and did the right thing. So I am not worried about her. I
want to know what you did and what you offered to help her and
the agency prepare the employees to come to NoMa, not exactly
the end of the world; I can walk there from here.
Mr. Winstead. Well, Madam Chairman, I do know that the NCR
and their customer service and leasing team were actively
engaged with the EEOC. Obviously, it did not translate into
full understanding at the Commissioner's level or the
chairman's level, or the employees, and we will redouble
efforts.
I do want to make two comments. We have put a lot of effort
on customer relations and outreach and engagement, and if we
were deficient with the EEOC, we will certainly----
Ms. Norton. Well, do you not see that you were deficient
with the EEOC? If we were deficient? If you have not learned
anything from the EEOC experience, then how is the Committee to
have confidence that you are prepared to handle, if I may say
so, St. Elizabeths? Because that is, it seems to me, a much
more difficult task.
Mr. Winstead. Well, all I can do is to commit to you that
we will redouble efforts----
Ms. Norton. Well, let me ask for more than a commitment. I
would like to see a plan from the agency on preparing employees
to understand the parts of the city in which they are moving if
those parts of the city don't happen to be smack dab in the
middle of K Street and Connecticut Avenue. I mean, it ought to
be clear that the employees need some help.
What does the agency head know? The agency head is in the
EEOC business, so the agency head cannot be expected to
anticipate that employees will go up there, look and see a
vacant lot or so, without understanding that there is a new
grocery store coming; that there is rental housing coming; that
there is going to be a shuttle; that every building there has
amenities on the ground floor; that we will not approve
prospectuses if they don't; that CareFirst is there; that CNN
is there; that NPR is coming; that CBS is coming. You know,
they don't know any of that.
And if you are professional real estate people, it is not
the EEOC chairman's job to do that. And, now, what she is
having to do is to deal with the backlash that never should
have been there before.
Frankly, I am really outraged. I am outraged because we
just had a hearing on NoMa. I am outraged because I took my own
time and effort, the effort of my staff and committee five
years ago to work with your agency in order to prepare NoMa,
and here we have The Washington Post telling people that it is
not the place to go because there are vacant lots there and
McDonald's. It is a terrible, terrible comment and a huge
failure on the part of the agency. You need to know it, and
within 30 days I want to see a plan for how you are going to do
outreach to employees to prepare them to understand what is
present in new areas if those areas are not the areas that are
traditional areas for Federal agencies.
I will ask Mr. Graves if he has any questions at this time.
Mr. Graves. Thank you, Madam Chairman.
My main question is what I brought up in my opening
statement, when it comes to leasing versus ownership.
Obviously, the numbers bear out that over the long run it is
cheaper if we were to build some of these facilities rather
than leasing, but I am curious if there are any other savings.
I mean, are you looking at anything differently? Would we be
better off owning these facilities rather than leasing them?
And kind of as a follow-up to that, too, I know the scoring
is obviously an issue and you have constraints there. What do
we need to do legally to change and help that.
Mr. Winstead. Congressman Graves, I know that you are
concerned about the FBI leasing program as specific in terms of
being a lease-construct versus Federal construction. I will
tell you that I would be happy to provide to counsel and the
Committee a very sophisticated economic analysis that we go
through as part of the prospectus process. It is called The
Automated Prospectus System, or TAPS, where we actually look at
present value calculation in terms of the options of owned
versus lease-constructs versus lease actions, and we look at
values comparing basically constructing a new building with
altering an existing or modernization, and what payback that
has over a 30-year life cycle and present value, as well as
leasing a building. So we go through this kind of analysis and
cost out each alternative over the 30 years, including
reversionary value to buildings. So we are looking at that on
every project.
In terms of the FBI program specifically, you know, we do
have part of the FBI program--and I was not here when we
negotiated this initially with the FBI--was to deliver on a
huge number of facility needs that they needed over a short
period of time. Some of this was driven by new requirements
after 9/11 in terms of security. These campuses are largely
secure outside of major areas, where traditionally the FBI has
been in some of our Federal buildings in downtown. We were
asked by Director Mueller to do this on an expedited basis, and
he actually had a goal of having this program in place and
largely completed by the time he completed his term.
So we have been working on a number of prospectuses, some
22. I will tell you that we got into this because, number one,
we had a schedule issue in terms of delivering these projects
on a very tight time frame, and we felt that the lease-
construct approach and leveraging the private sector in that
regard could do that quicker.
In addition, we are constrained, as you suggest, by the
scoring issue and about the Federal Building Fund resources to
deal with a program of this magnitude. If you look at these 22
projects and you look at the fair market value of them under
the analysis that we did, the TAPS analysis, it is about $1.7
billion in annual rent. As a comparison, it is about $158
million for that portfolio of projects.
So, when we got into this program, we were dealing with
their needs and direction that they were giving us, the time
schedule, plus the fact that to move ahead on this we were
committing the Federal Government to aggregate $159 million of
lease payments annually versus $1.7 billion in federal
construction. So it was really a question of availability of
resources in the Federal Building Fund, the schedule, and their
program and what they needed. So we have entered into this
lease program.
With that said, you know, there may well be, in the out
portions of this, a way that we can look at the construction
based on schedule and see if there are any savings and
capabilities in the Federal Buildings Fund to look at that
again. But these figures I have just given you include lease-
construct of all those 22 locations.
Mr. Graves. I didn't know if you were looking down the
road. I understand trying to get them in something and get them
up and going. Obviously, to go into a lease, you can get them
going quicker than building a building that may take two years.
Is it something, though, that you are looking at more long-term
now? I mean, obviously, that is not going to go away and they
are going to keep expanding.
Mr. Winstead. Yes, I think it is. We also obviously--I will
just give you two cases in point that sort of illustrate this.
Houston, Texas occupancy for fiscal year 2008--this is the FBI
facility--leasing on that particular property will be $121
million new construction. So we actually saw an annual cost
advantage of about $1.7 million.
In addition, on the San Diego side, we saw the equivalent
of an annual cost saving of about $900 million going with this
approach in the short-term. But we will be looking in the out
years part of the program to see if we have the resource in the
Federal Building Fund and, in fact, if a wholly-owned Federal
facility makes more sense, and we will obviously be bringing
that back to the Committee.
Mr. Graves. Thanks.
Ms. Norton. Thank you very much, Mr. Graves.
Mr. Arcuri?
Mr. Arcuri. Thank you, Madam Chairwoman.
Mr. Winstead, thank you very much. Good to see you again.
Mr. Winstead. Nice to see you.
Mr. Arcuri. Thank you very much for being here. I have just
a couple of questions that are somewhat unrelated. The first
one, can you tell us to what extent does the agency try to
follow a ``buy American'' policy in terms of the contracts and
the projects that you are working on?
Mr. Winstead. Well, obviously, we have in our procurement,
both evaluation for locally procured projects and that is also
a part in terms of our sustainability goal, to look, in Federal
construction, to look for a U.S. product in the local market.
So I think we proceed on that basis with all of our projects.
Mr. Arcuri. To what extent do you comply with it in the
past 10 years, the percentage of goods that you purchased that
are American as opposed to non-American?
Mr. Winstead. In terms of percentage? Congressman, I can't
give you that here, but I will definitely get that figure back
to you and your staff. Do we have it on a specific project? No.
Mr. Arcuri. Okay.
Mr. Winstead. But I will get that back to you.
Mr. Arcuri. Thank you.
My next question is how does your agency incorporate energy
efficiency into your design program?
Mr. Winstead. Congressman, we do it under two ways, we do
it both through our new construction--three ways: through our
new construction in terms of LEEDs requirements; we try to
obtain silver LEEDs; and one of the things that I am
particularly interested in this area is to continue to try to
quantify the payback and the savings under LEED certification.
We are beginning to see that there is more data and
essentially more interest in sustainable buildings. About 40
percent of national consumption of energy goes into our built
environment, both residential and commercial. Seventy percent
of that 40 percent consumption is in electricity. So what we
have been doing since 1985 is retrofitting all of our lighting
in our Federal buildings to save on energy utility costs.
We are moving aggressively in terms of solar. We have a new
building called NARA in Waltham, Massachusetts that has a solar
roof that is essentially embedded in the rubber membrane of the
roof; it is not one of these panels, it is in fact the roof. In
technology like that we have to take the lead on, and we are.
We have recently participated in the Green Building Council in
Denver, Colorado and had exhibits on all of our 18, now, LEEDs
buildings.
In the renovation process we focus on it as well. We look
at, obviously, when we are renovating a building, new chillers
that have high energy efficiency; we look at basically any kind
of glazing of windows, retrofitting glazing to save on cooling
and heating and insulation factors. On the lease side we are
working with lease provisions that will in fact drive potential
landlords and developers to provide more energy-efficient
buildings.
So in all three areas we are really trying to push the
envelope, and I think the Federal Government is regarded as a
leader in this area, and I can certainly provide great examples
of that. In fact, the ATF building has a lot of the new one and
NoMa has a lot of those new systems in place, and we will
continue to demand it both in terms of LEED certification for
new construction and in terms of our lease actions.
Mr. Arcuri. Would you consider energy efficiency to be one
of your priorities in terms of your design of new buildings?
Mr. Winstead. In terms of new buildings?
Mr. Arcuri. Yes.
Mr. Winstead. Yes. Absolutely. Again, it rests on this huge
percentage; 40 percent of energy consumption is going into
basically our built environments, so we are consuming a huge
portion of it. The more we can do, whether our 1500 buildings,
you know, obviously, that pays off in terms of overall goals.
Mr. Arcuri. One last question I have. I understand that you
use independent or private realtors at times in terms of
finding space or selling buildings. Does that continue?
Mr. Winstead. Yes, sir, it does. Both in terms of disposal
and in terms of lease acquisition, we do use a broker. As I
mentioned to you, I think, when I met with you, we do have a
new program that is about two years old and a national
brokerage contract where we have selected--we had a competition
and four firms won it, and we are essentially using them in a
leveraged capability to get the best deal in the marketplace
for us, and it is proving results. I have provided, I think to
this Committee, I think the agency has, and we will continue
to, an update on the results from the national brokerage
contract. But we are seeing, in some cases, savings way below
our target.
Back to Chairman Norton's issue about leverage in the
marketplace in leased actions, that is where we really do have
leverage, and we are seeing--our target is about an 8 percent
savings below market. In some of these national brokerage lease
actions we have seen 13 percent. So we are actually seeing 2 or
3 percentage points savings.
Mr. Arcuri. And does the amount that you pay vary from
market to market, depending on where in the Country the
realtors are being used?
Mr. Winstead. Yes, absolutely. Obviously, in the major
urban markets, the cost in Lower Manhattan, where we are now
negotiating a 600,000 square foot lease to reoccupy at The
World Trade Center, you know, leases up there are $80 a square
foot versus other parts of the Country where they are much
less. So we do go in the market, we look at both comparative
and appraisal market rates; we do judge the leasing actions and
what the brokerage are giving; we review the kind of rate we
are getting, as well as their action in terms of what they
are----
Mr. Arcuri. So you pay a prevailing wage, so to speak, to
the realtors, depending on where they are.
Mr. Winstead. Yes. In terms of the commission rate within
that market, yes. And that is reviewed by our staff.
Mr. Arcuri. Thank you.
Mr. Winstead. Thank you.
Ms. Norton. In light of Mr. Arcuri's questions on energy, I
am going to be holding a series of three hearings on energy,
but I am going to begin with energy conservation. Something
akin to the fascination with technology has developed in the
green movement, and that is there are all these wonderful
things we could be doing, and if big players like the Federal
Government had been even more energetic--and, yes, the Federal
Government has indeed tried to some of this--then, of course,
we would have driven down some of the costs of some of the more
expensive ways to conserve energy.
My concern is with ordinary energy conservation in, for
example, the Federal inventory of buildings. What, if any,
guidance is given to Federal agencies about common sense things
that could save millions upon millions of dollars, like when to
turn off lights, about heating and air conditioning
temperatures to maintain, about who to be responsible in each
facility for energy, is there an energy officer, for example,
in every courthouse, or someone assigned that responsibility.
Some of us remember when there were long lines during the
Carter Administration and the President put on sweaters. You
know, we saved a lot of energy during that period, when he set
the example that you didn't have to put your heat up to 80, you
could put on a sweater and save fuel.
What written or other guidance do we give this huge
inventory, those who occupy this huge inventory of Federal
buildings around the Country and around the world?
Mr. Winstead. Madam Chairman, we do have, both in our
Applied Science Division, where we have energy experts, Kevin
Kampschroer we do have within our Building Operations Section
that reports to Bill Matthews, guidelines that obviously we are
trying to manage our properties and ensure----
Ms. Norton. Give me an example of what you are talking
about. I gave you examples of what I was talking about. For
example, does everybody in a Federal facility in this region
have any guidance on turning lights out at night?
Mr. Winstead. We do have a constant sort of regulation in
terms of the local building manager in each of our properties
that we are working with in terms of guidelines on contributing
to the cost savings in terms of turning off lights.
Ms. Norton. When are lights supposed to be shut off in
buildings unless somebody is in the building doing work in
Federal buildings in this region, for example?
Mr. Winstead. Well, obviously, the older buildings don't
have the same controls. A lot of our newer buildings have----
Ms. Norton. We understand. Here you are getting back into
technology again. I am not talking about controls. I am talking
about you go past buildings and you see lights on.
Mr. Winstead. Right.
Ms. Norton. And you say, boy, those are some hard working
people in there with all those lights on, until you recognize
that there probably aren't any people there at all and that
some building superintendent who was in charge of making sure
that all lights were out by dah-dah-dah, you tell me, would
save the Federal Government money instead of running them all
night. Not to mention computers. Is there any guidance on
shutting down computers?
Mr. Winstead. Yes, there are, Madam Chairman. We do have--
--
Ms. Norton. What is that guidance specifically?
Mr. Winstead. I don't know on the timing. I don't think it
varies in terms of an hour of the day, but obviously Federal
employees are instructed to turn off their computers to save
energy.
Ms. Norton. By whom?
Mr. Winstead. By both the agency head in terms of
guidelines, as well as, obviously, our building managers that
are in our buildings who, you know, are in there and obviously
trying to enforce turning off lights, as well as, obviously,
computers, and trying to save energy.
Ms. Norton. Mr. Winstead, would you get me whatever written
guidance already exists on that score?
Mr. Winstead. Sure. I would be happy to. We will be happy
to get it to you, Chairwoman Norton.
Ms. Norton. And, again, I ask for that within 30 days.
Mr. Winstead. All right.
Ms. Norton. Until the notion of energy conservation became
what it has today become, an extraordinarily urgent one, we
couldn't blame GSA or anybody else for putting an emphasis in
design in the 20th century sense of the word. What are you
doing now, or could you do, to shift the focus away form the
way a building looks or its aesthetics to how it performs. You
have got to spend money on something or the other, particularly
today, when there are going to be great restrictions on how
money is spent.
Have you considered the tradeoff between usual design and
aesthetics on the one hand and the performance of the building
with respect to energy, for example, on the other?
Mr. Winstead. Madam Chairman, we do, obviously, through our
Design Guide and through the execution of our Design Excellence
Program, we are focused much more on not only LEED
certification solutions and energy efficient systems in the
buildings, but also on that issue you talk about, and that is
that form should follow function, and it shouldn't necessarily
be driving complicated buildings because their design are in
fact more difficult and more expensive to cool and heat.
I think I share with you some of that concern and
reflection. I think there are some instances over the last 15
years that we have in fact designed some buildings that are
aesthetically striking and beautiful, but, in fact, in terms of
maybe some of the components of some of these courthouses they
are not as efficient because of the design. So we are focused
on that and ensuring that that not happen in the future.
Ms. Norton. It does seem to me that in your RFPs, to the
extent that an RFP reflects the interest of the Federal
Government in this kind of building performance and the
tradeoff you are willing to do to get that given the costs of
construction that you just testified to, for example, you would
move us, it seems to me, very substantially now--go ahead, sir.
Mr. Winstead. That is actually in the P-100. We are
actually revising that right now, which has a lot of these
guidelines, and I would be happy to get you a copy.
Ms. Norton. We would be very much interested in seeing
that.
Well, this is one of those times when the bell rings and
even the congresswoman from the District of Columbia has to
vote because it is a vote in the Committee of the whole. It
will be a vote of about 20 minutes.
Mr. Winstead. All right.
Ms. Norton. And I will be back. So we will recess the
hearing for another 20 minutes and we will return.
Mr. Winstead. All right.
[Recess.]
Ms. Norton. The Ranking Member gets to vote on a few more
things than I do. I finished with the part that I can vote on
and he has left word that we should certainly proceed.
I had, I think, left off asking about energy. It would just
help us, as we prepare for these hearings, to also know about
some of what you are already doing in implementing your energy
initiatives into new construction. I know I am quite aware that
you have been doing some of that for years now, so if you would
get us the written information on what you are doing, that
would be helpful to us.
Mr. Winstead. Madam Chairman, I will get that to you, and I
did mention there is a letter which I talked to counsel about
that I will get to you that essentially provides the guidance
that you were asking about to both our building managers and
our tenants on the energy conservation issue. So I will get
that letter to you. It was sent out about 18 months ago.
Ms. Norton. We would very much like to have that.
Does GSA have all the authority it needs to implement the
highest and best use of energy conservation initiatives?
Well, most of this you have been doing a great deal of
this--let's say you were doing it the 20th century way, which
was ahead of most developers. Now you see private companies
leaping ahead. You, yourself, mentioned in your testimony that
you believe that the ATF building will qualify as within the
LEED family of buildings.
Have you considered, given the urgency now attached to
conservation in many different ways, the competition you are
going to meet in the marketplace for fuel, the uses of scores
of materials in cleaning, in building, the new approaches to
energy conservation that are being incorporated into buildings?
Do you believe you have all the authority you need to do
whatever you need to do when these new ideas begin to come
forward?
Mr. Winstead. Madam Chair, I do think we do overall, in
terms of both the Energy Policy Act of 2005 and the Executive
Order that was passed this last January.
Ms. Norton. How is the Executive Order enforced?
Mr. Winstead. There are guidelines. There is an interagency
panel that is actually caucusing with all the members of the
Federal Property Council to make sure that the Energy
Initiative Executive Order is implemented. So I do think we are
abiding by and do have the authority to achieve the kind of
objectives we want. In truth, as you suggest, we are actually
driving the market. We are insisting on these LEED
certifications. By doing so, both the contract construction
side, as well as the landlord development community, are having
to meet it.
In testimony before the Senate, there was one minor change
that we had in terms of the term from a 10 to 20 year, I guess
it was a tax credit. It was part of my Senate testimony that I
will make part of the record. There was one thing that our
people did feel that would help us to amortize those energy
costs over a longer period than just 10 years. That would have
helped. We suggested that to the Senate. But outside of that,
both with the Energy Policy Act Executive Order and our
construction and lease provisions, I think we are able to
achieve those objectives.
Ms. Norton. Have you asked for the tax credit in your
Senate testimony?
Mr. Winstead. Madam Chair, this has to do with contracting
authority for buying power. Now it is limited to 10 years. We
have actually asked for legislation considering a proposal to
increase that to 20 years so that the payback would be longer.
So that request has been made and has been suggested.
Ms. Norton. Well, staff tells me that that amendment is
going to be included in our energy package as well to the full
Committee.
Mr. Winstead. Okay, good.
Ms. Norton. Because the full Committee is--and, indeed, the
majority wants the committees to submit doable proposals for
energy conservation of various kinds.
Mr. Winstead. Madam Chair, I think the marketplace is a
part of this. If you look back, there is a group called the
Green Building Council that meets annually and brings the
development community together with both public building
owners, such as the GSA, with private, and about three years
ago they were attracting--I spoke at it about six months ago--
they were attracting about 4,000 people to these conferences.
The last one they had in Denver, there were 13,000 people
there. So what you are now seeing is the private sector
realizes that they can make money at this, so I think a lot of
these new energy saving systems that are showing payback over
two to three years--we do have better data I would be happy to
provide to the Committee.
Recently, at a presentation I heard from BOMA, they
actually looked at, for all these energy systems like new
chillers and glazing and various other, what the payout is in
years, and I would be happy to provide that to the Committee,
because it is much shorter than you would think. For most of
the new technologies, the payback is between two and three
years. Some people have been arguing this is going to take a
decade or more to keep this competitive if we go this way. But
I will provide that to the Committee.
Ms. Norton. You, of course, are a big rate payer in a
region like this. Have you ever considered ways in which,
again, given the importance of the Federal Government in
regions like this--the Defense Department would be another one
in various regions of the Country, but certainly the GSA--how
you could affect building codes to reflect more energy
efficient buildings, building codes in the regions where you
are located? Is there any way for GSA to affect this project?
Again, the Federal Government is such a big player. Nobody
would try to regulate them. But here we are a big player. Are
we using all of our considerable presence?
Mr. Winstead. I think we are, Madam Chair. I am sure there
is more that we can do, but our P-100 reflects a lot of these
new systems and requirements, and in terms of the District they
have a new incentive, as you know, in terms of development in
the District for LEEDs, so I think we are going to see that
more in communities around the Country.
Ms. Norton. See, that really goes to my question. I see
communities on their own. Did you have anything to do with the
District's LEED proposal?
Mr. Winstead. Well, I don't know whether we actually
reviewed the legislation----
Ms. Norton. The reason I ask is to the extent we are in
these areas----
Mr. Winstead. Absolutely, we should be engaging.
Ms. Norton.--a major player, it would be a good thing to be
involved in them locally.
Mr. Winstead. We will definitely follow up with you.
Ms. Norton. There will be no developer here bigger than the
GSA, so if the GSA is at the table, you are likely to have an
effect upon how building codes shape up.
You have $15 million for energy programs in your fiscal
year 2008 budget. How is that to be used?
Mr. Winstead. That is for, Madam Chair, specific projects
beyond what we are including in new construction. That is for
basically looking at electronic monitoring devices and looking
at specific, some solar applications. So these are special
projects that are funded by that $15 million.
Ms. Norton. For buildings, for sites, for----
Mr. Winstead. For specific projects in various buildings
around the Country. But this is beyond what we are doing under
the LEEDs. That is for specific projects for that $15 million.
And we will be happy to break that out for you.
Ms. Norton. I would like to know about your progress on the
St. Elizabeths campus.
Mr. Winstead. Sure.
Ms. Norton. This Committee has been very active with the
appropriators and, unlike last session, we believe we have
gotten the appropriators to some understanding of the
importance of not letting the President's allocation be
disbursed elsewhere. It was a terrible thing to happen that we
didn't have the ability to get that through last time. So staff
has done a very good job of keeping in very close touch with
our appropriators.
Would you tell me why the Homeland--oh, and I should
mention that who is just as adamant about the new headquarters
on the St. Elizabeths campus because of the management
difficulties the Homeland Security agency has encountered is
the chairman of that committee, who has also pressed very hard
for this building to start.
First, could you tell me why this appropriation was divided
between two committees? Here we have GSA responsible for
construction, no matter what type of construction it is, and
yet some of the money was put into the Homeland Security
budget. I realize it is the Homeland Security building. Has
that generally been the case, if you are building a building
specifically for an agency, it is divided between committees,
the GSA committee and the committee which normally handles its
appropriation?
Mr. Winstead. Chairman Norton, as you know, in our request
for St. Elizabeths, which is considerable in the budget, there
was additional appropriations on the DHS side to move that----
Ms. Norton. Is it a technical reason why it was on the DHS
side? As I understand it, that is for the wiring and the
security upgrades and the rest, without which you couldn't
build a building anyway. Does anybody know why that occurred?
That was a tremendous problem last time.
Mr. Winstead. I think that is typical in terms of what that
was funding, versus what we have in for moving these elements
of the Coast Guard Headquarters forward.
Ms. Norton. Well, apparently----
Mr. Winstead. It is agency equipment, telecommunications.
Ms. Norton. Yes. Like furniture, I guess.
Mr. Winstead. Yes.
Ms. Norton. You fund the base building. It really was a
terrible impediment----
Mr. Winstead. To the issues last year.
Ms. Norton. Yes, it was. We believe it won't be, but we are
working double-time, and I would like to know what you have
been doing, particularly in the Senate, to make sure that this
appropriation goes through. I don't believe the agency did all
it could have done last time.
Mr. Winstead. Well, I remember last year, and continually,
we have been in touch with you and your staff on this. Since
March of 2006 we have had over 12 briefings on Capitol Hill
with the appropriators on the House and Senate side to try to
move this project forward, which I have heard directly, not in
recent months, but from Michael Jackson, and I actually talked
to Secretary Chertoff in January about this project, and he was
very supportive of it. So I know that the issue is getting this
money through Capitol Hill and us being diligent, along with
this Committee, obviously, in ensuring the appropriation side
gets done.
Apparently we had, even recently, May 14th--I mean in four
days, rather, we are going to have a briefing for the Senate on
this same subject, so my sense is the agency has been very
aggressive in trying to make sure that we are briefing the
House and Senate appropriators on this, the importance of the
project. Back in October, as you know, Madam Chair, the housing
plan that we were worried about a year ago that was not
specific enough to convince certain of those.
We think that is in place and we are, in fact, as you know,
rapidly almost completing the Master Plan, of which I was
briefed last Friday and would be happy to provide additional
briefings to you and your staff on. So I think things are
moving, and we will just work diligently, as we will with the
Senate group in four days, to make sure this appropriation
action gets done.
Ms. Norton. Well, I am very pleased to hear that you are
briefing the Senate, because we have done our homework over
here. Now, we believe we are in decent shape here. We are
watching it every day to make sure that nothing slips off the
side of the cliff, but we need your help and Homeland
Security's help on the Senate side as well, because obviously
we are on pay-go this year, and this is the easiest money to
pull out because it is for bricks and mortar.
It also happens to be for an agency which is crippled,
frankly, by having 60 different locations, 80 different leases,
huge shuttle costs. When the authorization bill was passed for
the Homeland Security bill yesterday, I didn't go in to talk
about ordinary homeland security measures on which I have been
very deeply involved; I went to talk about what it means to
have gone to all the trouble after 9/11 to put together this
building, and then to have it exactly as it was, with people
having to shuttle all over the place with duplicate facilities
of every kind, from mail rooms to child care facilities.
Mr. Winstead. Madam Chair, one element of this that I just
wanted to bring you up to speed on is the historic preservation
elements here that we are working very hard on. I had a
briefing last Friday on what our alternatives do in terms of
preserving that historic element of St. Elizabeths. I would
also mention that I have, as we have on the appropriations
side, I have actually reached out personally to the chairman of
the Advisory Council on Historic Preservation, a guy named John
Nau, whose role, that Council's role is to advice Federal
agencies on the issue of historic buildings preservation. I
have reached out to Dick Moe, who is with the National
Preservation Trust.
Both of those gentleman I have talked with about St.
Elizabeths so that as we proceed on the Master Plan and begin
to move on the issue of scale and density and restoration of
certain buildings--as you know, we have 60 buildings on that
campus--that we have the historical preservation.
Ms. Norton. The historic preservation people are likely to
be the last ones to come under the tent. What is your view of
where they stand on these matters?
Mr. Winstead. Chairman Norton, I think our historic
preservation people at GSA are working very closely with, as I
mentioned, the Advisory Council on Historic Preservation. They
actually asked a group of their board to work on St. Elizabeths
in an advisory way with us. The chairman of that is this
gentleman I mentioned named John Nau. I have shared, obviously,
the efficiencies of consolidating DHS there, the positive
economic development impact on the community in that area. He
is a businessman very sensitive to that, but he is going to try
to make sure that we adhere to the Section 106 requirements,
but he is obviously very much in support of the concept,
generally. The densities are the issue, and we feel we have
some alternatives that we are studying that will be acceptable,
and we are going to continue on that stretch.
Ms. Norton. Well, we will get through it. We will get
through it, but we can expect--and, of course, GSA is old hands
at having to deal with various parts of the community,
including the historic preservation. I am a strong historic
preservationist. I live in a historic district in D.C. and in
one of those houses that you can't change, so I understand it
very much. This is part of the city which no developer could
ever develop because of the number of historic buildings. There
are a number of them we are going to preserve. Some of them may
not be as historic as people think, so we are going to have to
do what is necessary.
I finally want to ask you a set of questions about cost as
a factor in leasing, and want to just put you on notice that
the Subcommittee will be taking some actions to make sure that
agencies do not have the authority they believe they have, but
which the statute clearly does not give them, to pick and
choose wherever they want to go, no matter the cost to the
taxpayers. That was always wrong. It becomes really impossible
now. The EEOC Chair, I think, recognized not only that her own
budget had been cut very substantially over the years and that
she had no choice, but that we were to a point where that
simply wasn't going to be allowed.
So the Committee intends to take action. But I need to know
what you are doing to make the cost of the lease itself a
bigger factor in deciding where to locate agencies so that
agencies have a realistic sense of where they can find sites
that are indeed appropriate for them with the appropriate
amenities, but recognizing that the day is over when they can
decide as if they were private people with their own
pocketbook. What have you done to make the cost of the lease a
bigger factor in the location of Federal agencies and in making
Federal agencies understand that you will consult with them,
but that the statute does not make them the final arbiter of
that matter when it comes to the expenditures involved?
Mr. Winstead. Madam Chair, I know that this has been a
concern of yours for some time, and I know that there is
history of certain moves over the last decade--I wasn't party
to them as Commissioner--where we actually made recommendations
and there were other appeals higher up the chain and they ended
up trying to get to some place other than where we have
directed them based on real estate, our procurement guidelines,
and low-cost considerations, which is what you are most
concerned about.
We continue to work hard looking at all the rules, the
Section 102 under the Federal Management Regulations, our GSA
Customer Guide to our tenant agencies in terms of requiring
delineated areas and making sure there is full competition and
those aren't constrained, including places like NoMa, as you
know, we have done. The reality is we are going to continue to
set and require the requirements and ensure that they adhere by
our decision in terms of we are the landlord, we are the real
estate experts; and that is what we try to do in all of our
procurements, is to drive to both low-cost for the Government,
as well as satisfactory location and workplace solutions for
our Federal tenants, and I will continue to do that.
I know you had great concern over NoMa. You and I are on
the same wavelength. I spent, in my prior career, a lot of time
understanding the potential in areas like that in terms of both
lease cost as well as transportation accessibility and
amenities. I frankly think that our existing policies set a
framework that allows us to achieve low-cost lease options, but
also engages the agencies in terms of delineated areas and in
terms of ultimate decisions in terms of location decisions.
Ms. Norton. We believe the agency needs help. The fact is
that the evidence is before us that clearly agencies have been
able to further delineate after there is a delineated area, and
they do so, they say, because they want to be near
``customers.'' That, of course, is code for lawyers and code
for being in the highest cost parts of the District of
Columbia. That is what lawyers can afford. In a city the size
of the District of Columbia, with an excellent transportation
system, a taxi system, a livable walkable city, the notion that
you have to be ``close to your customers,'' this is not
Manhattan. This is a not a huge city. And, yet, there is no
question that NoMa would not be empty except for I guess one
agency, which now is having to fight its own employees to
locate in NoMa because they don't have the available
information.
In effect, what has happened is that GSA, for all of its
expertise--and I am a big fan of this agency for its expertise,
for the way it does much of its work, but the fact is that GSA
has allowed agencies to redline parts of the District of
Columbia. There is no question in my mind that that is what
happened in NoMa. The people did so because they did not know
that NoMa was the place, the up and coming place. They had not
been sold on NoMa. So we do not intend to allow that to
continue. That is why I want you to, on your end, get to the
Committee what you intend to do in very specific terms to reach
out to employees, and we believe the agency needs help.
Very frankly, I will tell you that I think part of the
problem is that EEOC is structural. EEOC is a peer agencies of
these agencies, and it would take considerable strength and
some, perhaps, ammunition besides perhaps what you have had to,
in fact, make agencies understand that they are not free agents
here. We have seen how the courts have just used the fact that
they are courts to try to run roughshod all over GSA literally
for every single year that I have been on this Committee, so I
have some understanding. At least with agencies, they are peer
agencies. The courts have tried to lord it over GSA as if they
were somehow very special and had to be treated very specially.
Well, the agency needs help, and under the new Congress we
intend to give you that help.
Mr. Winstead. Chairman Norton, under both the FMR 102
Section 83, as well as Executive Order 12072, which deals with
space assignment and efficiencies, I will look at those
carefully and get back to you recommendations that we think you
should consider that could tighten it and give us more. I don't
know, my lawyers will look at it and get back to you in terms
of what we think are needed in those sections and others to
strengthen both the result of low-cost leases as well as,
obviously, locational decisions that are correct for the
agency. I do know the history here, so I would be happy to look
at these sections and others and get back to you.
Ms. Norton. Well, that is really the way to proceed. To the
extent that the agencies can help us as we design new policies,
that is the best way, for the agencies to come to the
Subcommittee and say we need help, and this is the kind of help
we could best use. We would be very much open to receiving
that. The only bottom line is it is not going to continue the
way it is, and the agencies really have developed this
culture--that is all it can be called. It is an impression that
they have, and they need to somehow have that abruptly turned
around, other than being put in the position the EEOC is in,
where she is out there fending for herself, trying to make
people understand that she really doesn't have any recourse.
And guess what, she does not. She really does not have any
recourse, and they believe that by being--they are treating
this as a protest action.
Nobody would ever make or require Federal employees to go
where there weren't all the amenities necessary. It is of
course the case that the statute contemplates that Federal
agencies will lead the way. Here we are not asking them to lead
the way, and it is very interesting that big private entities
are willing to lead the way based on cost and based on their
analysis of the area and what is likely to happen, and in the
Federal Government that has been harder to get across.
I don't want to continue to beat upon the agency for this.
I recognize that this is not entirely your responsibility, it
is the responsibility of this Committee. I would welcome,
welcome your participation in this effort and any information
or recommendations that you can give us, and I would caution
you that you should do that before we have the hearing on the
leases, because I intend to make this known at that time.
Mr. Winstead. We will get it right back to you.
Ms. Norton. Thank you very much.
This hearing is adjourned. Thank you all for attending.
[Whereupon, at 12:05 p.m., the subcommittee was adjourned.]
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