[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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