[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]
MAKING THE GENERAL SERVICES ADMINISTRATION LEASE AND CONSTRUCTION
PROCESS EFFICIENT, TRANSPARENT, AND USER-FRIENDLY
=======================================================================
(110-135)
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
SECOND SESSION
__________
JUNE 6, 2008
__________
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
Vice Chair DON YOUNG, Alaska
PETER A. DeFAZIO, Oregon THOMAS E. PETRI, Wisconsin
JERRY F. COSTELLO, Illinois HOWARD COBLE, North Carolina
ELEANOR HOLMES NORTON, District of JOHN J. DUNCAN, Jr., Tennessee
Columbia WAYNE T. GILCHREST, Maryland
JERROLD NADLER, New York VERNON J. EHLERS, Michigan
CORRINE BROWN, Florida STEVEN C. LaTOURETTE, Ohio
BOB FILNER, California FRANK A. LoBIONDO, New Jersey
EDDIE BERNICE JOHNSON, Texas JERRY MORAN, Kansas
GENE TAYLOR, Mississippi GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California HENRY E. BROWN, Jr., South
LEONARD L. BOSWELL, Iowa Carolina
TIM HOLDEN, Pennsylvania TIMOTHY V. JOHNSON, Illinois
BRIAN BAIRD, Washington TODD RUSSELL PLATTS, Pennsylvania
RICK LARSEN, Washington SAM GRAVES, Missouri
MICHAEL E. CAPUANO, Massachusetts BILL SHUSTER, Pennsylvania
TIMOTHY H. BISHOP, New York JOHN BOOZMAN, Arkansas
MICHAEL H. MICHAUD, Maine SHELLEY MOORE CAPITO, West
BRIAN HIGGINS, New York Virginia
RUSS CARNAHAN, Missouri JIM GERLACH, Pennsylvania
JOHN T. SALAZAR, Colorado MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois TED POE, Texas
DORIS O. MATSUI, California DAVID G. REICHERT, Washington
NICK LAMPSON, Texas CONNIE MACK, Florida
ZACHARY T. SPACE, Ohio JOHN R. `RANDY' KUHL, Jr., New
MAZIE K. HIRONO, Hawaii York
BRUCE L. BRALEY, Iowa LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania CHARLES W. BOUSTANY, Jr.,
TIMOTHY J. WALZ, Minnesota Louisiana
HEATH SHULER, North Carolina JEAN SCHMIDT, Ohio
MICHAEL A. ARCURI, New York CANDICE S. MILLER, Michigan
HARRY E. MITCHELL, Arizona THELMA D. DRAKE, Virginia
CHRISTOPHER P. CARNEY, Pennsylvania MARY FALLIN, Oklahoma
JOHN J. HALL, New York VERN BUCHANAN, Florida
STEVE KAGEN, Wisconsin ROBERT E. LATTA, Ohio
STEVE COHEN, Tennessee
JERRY McNERNEY, California
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
(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, Virginia
Pennsylvania, Vice Chair CHARLES W. DENT, Pennsylvania
TIMOTHY J. WALZ, Minnesota JOHN R. `RANDY' KUHL, Jr., New
STEVE COHEN, Tennessee York
JAMES L. OBERSTAR, Minnesota JOHN L. MICA, Florida
(Ex Officio) (Ex Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
TESTIMONY
Grunley, Ken, President of Grunley Construction.................. 5
Seekins, Gail, Senior Property Manager, Akridge Company, and
Member of the Building Owners and Managers Association (BOMA)
International.................................................. 5
Turowski, Art, Senior Leasing Official, Jones Lang Lasalle....... 5
Winstead, David, GSA Public Buildings Service Commissioner....... 5
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Altmire, Hon. Jason, of Pennsylvania............................. 52
Graves, Hon. Sam, of Missouri.................................... 53
Oberstar, Hon. James L., of Minnesota............................ 58
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Grunley, Kenneth M............................................... 59
Seekins, Gail H.................................................. 63
Turowski, Arthur................................................. 69
Winstead, David.................................................. 75
SUBMISSIONS FOR THE RECORD
Winstead, David, GSA Public Buildings Service Commissioner,
responses to questions from the Subcommittee................... 90
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
MAKING THE GSA LEASE AND CONSTRUCTION PROCESS EFFICIENT, TRANSPARENT,
AND USER-FRIENDLY
----------
Friday, June 6, 2008
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 10:57 a.m., in
Room 2167, Rayburn House Office Building, Hon. Eleanor Holmes
Norton [Chair of the Subcommittee] presiding.
Ms. Norton. Today the Subcommittee will examine the
processes and costs associated with leasing and construction by
the General Services Administration. Although leasing and less
frequently construction are perhaps the most important work of
the Public Buildings Service Commission, during my years on
this Subcommittee, there has never been a top to bottom look at
out how the agency accomplishes this work or whether it needs
changes. It is long past time for the Federal Government, the
Nation's major procurer of lease space, with 700,000 Federal
employees at leased sites and with approximately, 640,000
employees in government owned space to look more closely at the
benefits and burdens of its lease and construction practices.
This is especially the case today when we are about to
undertake the largest building project in the history of GSA,
the new headquarters for the Homeland Security Agency.
The stakes for the taxpayers and for government and private
sectors alike are incredibly high. Taxpayers want the best deal
the marketplace can offer. Especially considering the leverage
that GSA's outside footprint should afford, developers,
building owners and contractors who incur considerable risk and
substantial cost simply to compete for Federal leases and
construction contracts want a cost efficient process that
yields timely decisions. GSA wants to assure its clients are
adequately served and that Federal requirements are met.
The Subcommittee and ultimately the full Transportation and
Infrastructure Committee authorizes GSA requests for space
which come to the Committee in the form of an agency
prospectus. The processes for leasing and construction are
inherently complicated. But this does not mean that they cannot
be streamlined or made less costly, more transparent and more
user friendly. Is the present process the best we can do? Today
we ask ourselves whether considering Federal requirements and
professional and technical demands for leasing and
construction, can the GSA leasing and construction process be
improved? Before prospectuses even arrive on Capitol Hill, the
GSA has used its considerable expertise and spent many staff
hours of work, request for leasing, of course, occur far more
often than for construction.
GSA issues a solicitation for offers based on prospectus
approved by Congress. After submission of offers, GSA evaluates
the initial submissions for technical compliance with the
original solicitation. Negotiations ensue on costs for tenant
improvements, the availability of amenities, the range of
acceptable rental rates and other tenant agency requirements.
After GSA requests best and final offers from potential
lessors, the final evaluation takes place. Even after final
award is made, GSA must negotiate a final lease with several
clauses designed to protect the government's interest, although
some of these same clauses may be at issue at today's hearing.
Clauses that give the government the right to terminate a
lease at any point and to buy the building at market rates may
create an economic risk that although not likely to be
exercised by GSA, drive up the final price to private industry
and ultimately to the Federal Government. If, however,
construction is authorized by Congress, and usually that
happens in advance, a lengthy set of steps also ensue,
including consultation to determine client needs, site
selection, architect and engineer selection, final design and
procurement strategy. The current release steps GSA also
develops a prospectus for Committee approval.
Once the prospectus is approved the procurement phase
begins and the private sector is engaged and award occurs and
further refinements are made and negotiations are finalized.
However during procurement, construction documents, advertising
the project, preparation submission of bid awards, of contracts
and final negotiations can stretch on for years. Market
conditions, market volatility and labor costs, in the meantime,
complicate the task of contractors in preparing a winning bid.
In addition, numerous Federal requirements such as the
provisions of the National Environmental Protection Act, or
NEPA, Buy America, competition and contracting act, small and
minority business Act, Fair Labor Standards Act, energy,
historic and environmental rules and regulations all are
incorporated into the procurement.
During my service on this Subcommittee, I have had an
opportunity to closely observe GSA as it has located agencies
in particular here creating a virtual microcosm of GSA's
location policies nationwide. GSA is assigned this
responsibility because unlike other Federal agencies, it has
unique professional and technical knowledge. This is only part,
but as it turns out, often the most visible and an important
part of GSA's leasing responsibilities. This function is
assigned to GSA and not to Federal agencies themselves in order
to ensure adherence to uniform policies to control important
variables such as cost per square foot and to ensure taxpayers
receive the best value for available Federal funds.
Many of GSA's decisions have created the impression that
some locations are acceptable and some locations are not,
despite the proximity to public transportation and amenities as
required by law and even where there has been existing Federal
investment. To make this point, I held my first hearing as
chair in NOMA, the part of downtown Washington north of
Massachusetts Avenue that provided a case study for looking
closely at GSA's location policy. This area is bounded
generally by Union Station, North Capitol Street, Florida and
New York Avenues, you will recognize as main downtown parts of
the district, as well as second street on the northeast side.
The area, in addition, is very close to the Capitol, to the
Senate and the House and is a prime location here, leading to a
makeover that began almost two decades ago. The private sector
found NOMA long before the rapid development in progress there
today. For years, NOMA has been the headquarters for brand name
private public and nonprofit entities among them, XM Radio,
CareFirst, BlueCross/BlueShield, SEC and Kaiser Permanente. Yet
although finally in the midst of a building boom, with 60
percent office space and 40 percent housing, a supermarket and
amenities not available on K Street, Federal agencies still
show reluctance to locate in NOMA. What should the Federal
Government do about this?
NOMA is not only close to the New York Avenue metro but to
Union Station, the cities's major transportation hub where
rail, light rail, metro bus and taxi service converge. The
local bid is running a taxi, a free service between New York
Avenue and Union Station. Nor can it be doubted that the
Federal Government regards the centrally located NOMA area as
vital to Federal interests because the NOMA transformation now
in progress has been significantly influenced by Federal
policy, the new Bureau of Alcohol, Tobacco and Firearms, their
headquarters which was just opened last month, signaled that
NOMA was regarded as an ideal site for Federal facilities. Make
the point unmistakable.
The Federal Government also did what it never has done
before, did a one-time only investment, at least thus far in an
extra Metro station that had not been planned as part of the
net metro station that had not been planned as part of the
Metro system and specifically positioned the station to serve
the NOMA area and thus fulfilling indeed more than fulfilling
GSA requirements for Federal facilities and that they are
arguably located in close proximity to public transportation.
As a result, NOMA, unlike most areas where Federal
facilities are located, has a new Metro station on the north
end in addition to Union Station and the transportation hub on
the south end. How then could anyone explain to taxpayers that
there would be any reluctance by the Federal Government to
locate agencies in 50 city blocks downtown Washington of
existing space rapidly being developed at below market office
space rates here. In years of oversight, this Committee has
found evidence that agency preferences, not statutory mandates,
often dominate GSA location selections.
The 57-acre government-owned Southeast Federal Center,
located on M Street in the neighborhood known as Capitol
Riverfront, today is 5 minutes from the Capitol and is another
case in point. GSA was unable ever to convince Federal agencies
to locate there, even though long ago the Navy Yard Metro
station at both ends of M Street have been located there. After
10 years of seeing agencies avoid the area, and I introduced
the southeast Federal Center legislation, that for the first
time is allowing the private sector to develop on a Federally-
owned site, a very valuable piece of land located on the River,
shortly will there after the new Department of Transportation
headquarters was built there still capital River front near the
new Navy yard a multi use development which will have parks, to
be found nowhere else where Federal agencies are located also a
supermarket, a mall, may be experiencing the same reluctance by
Federal agencies to locate there in the M Street Yards
Southeast area.
I will be holding a forum for agencies along with the local
businesses improvement district or bid being formed just as
NOMA has had a very effective bid to inform agencies more about
the area and its amenities just as I did for NOMA. Several
years ago, GSA cooperated with me in the form which introduced
agencies to NOMA. And I am pleased that GSA is again involved
with this upcoming forum in late June. But I must say that even
after we had the forum, GSA had difficulty getting agencies to
locate in NOMA, even as amenities tumbled down and were clearly
being developed.
Meanwhile Federal agencies continue to want to lease
higher-priced space in more traditional areas, near K Street
Connecticut Avenue and similar downtown locations. Not
surprisingly, Federal employees often prefer downtown locations
near their shops and their restaurants and their theaters
regardless of what shops and restaurants and theaters are being
built in new areas. Agency preferences are, of course, central
and very relevant and must always be taken into account.
However significant questions are raised concerning GSA's
adherence to statutory requirements when sites compete which
have amenities and are continually bypassed by GSA.
As a result of the NOMA hearing, the Subcommittee added
important language to every GSA prospectus that requires GSA to
notify our Subcommittee if any changes are to be made to the
area designated in the prospectus. This language has had some
effect. It was designed to keep Federal agencies from dictating
where they will be located regardless of costs once a fair
competition has occurred and enforces the original intent of
executive order 12072 that requires GSA to give serious
consideration to neglected parts of urban areas.
At bottom, GSA's leasing and construction process requires
not only more leadership from this Subcommittee but
particularly from GSA in performing the vital role it has been
assigned by Congress. Its role requires initiative as well as
deference to serve its numerous and often inherently
inconsistent roles to develop as developer, landlord, real
estate agent and agent for major repairs and rehabilitation.
The Subcommittee is earnestly looking for ways to help
especially considering that GSA is a peer of the Federal
agencies it serves and may need statutory or prospective
changes from Congress for agencies to fully understand GSA's
role and what we expect of GSA and of other Federal agencies.
In today's atmosphere, budget deficits and requirements of
PAYGO spending, agencies must be directed to convenient sites
that have the required amenities, that the government of United
States can afford. NPR employees who will shortly be located in
downtown NOMA, and CNN who was there before the current NOMA
building boom began, did not try to veto the site, as some
Federal agency officials and employees have done.
Moreover, the most economical site agencies will surely
find in this atmosphere is best for agency budgets who pay rent
to the building fund, and I assure you will not get increases
any longer to relocate wherever they choose.
It is just as important, however, for GSA to work
collaboratively with the private sector in reducing their costs
of leasing and construction not only in these budget crunch
times but because a costly and cumbersome process for leasing
and construction by the Federal Government is not in the
interests of any of the parties involved.
We welcome the Commissioner of the Public Buildings
Services this morning and the other witnesses who bring
professional and personal experience and expertise that can
help the Subcommittee and the GSA.
We are going to ask all the witnesses to take the table at
the same time. I think a good exchange might be beneficial to
all concerned. So Commissioner David Winstead, Public Buildings
Service Commission at GSA; Art Turowski, senior leasing
official at Jones Lang LaSalle and a former official of the
GSA, leasing official of the GSA; Gail Seekins, senior property
manager, Akridge Company, and a member of the Building Owners
and Management Association, or BOMA; and Ken Grunley, president
of Grunley Construction.
TESTIMONIES OF DAVID WINSTEAD, GSA PUBLIC BUILDINGS SERVICE
COMMISSIONER; ART TUROWSKI, SENIOR LEASING OFFICIAL, JONES LANG
LASALLE; GAIL SEEKINS, SENIOR PROPERTY MANAGER, AKRIDGE
COMPANY, AND MEMBER OF THE BUILDING OWNERS AND MANAGERS
ASSOCIATION (BOMA) INTERNATIONAL; AND KEN GRUNLEY, PRESIDENT OF
GRUNLEY CONSTRUCTION
Ms. Norton. I am pleased to hear all of your testimony
beginning with Mr. Winstead.
Mr. Winstead. Madam Chairman, thank you again. I am David
Winstead, Commissioner of the Public Building Service. I am
pleased to be before the Committee again. I thank you for the
hearing on April 17 on Greening the NCR, and your continued
oversight and interest in our business housing Federal
agencies.
I am also pleased to submit written testimony for the
record which covers in detail a lot of the issues you raised
and some of the concerns you raised, and I hope the Committee
will take consideration of the written testimony. I am also
pleased to be on this panel with a lot of our private sector
partners. Everybody on my left is actually engaged in one way
or another in delivering lease space or building programs or
modernization for GSA.
As you mentioned, Madam Chair, GSA leasing and construction
is, in fact, governed by many statutory and regulatory
requirements that do not apply to similar private sector
transactions and are much more constrictive. GSA must comply
with a really comprehensive list of laws and executive orders,
some of which are contradictory. For example, urban policy
versus rural requirements.
We also have the Davis-Bacon Wage Act; we have the National
Environmental Policy Act; we have the Competition and
Contracting Act; we have the Small Business Act and other
energy, environmental, historic preservation laws, orders and
regulations. So this list of important laws and regulations,
executive orders, OMB circulars, and other mandates has a
really significant impact, as you noted, on our leasing and
construction program, in particular, the time it takes to
secure a lease or construct a building and the time it takes
for customers to budget for space. I want to talk a little bit
about some of the challenges and concerns you mentioned and the
initiatives that we are taking and have taken to make the
process more effective.
In our capital program, which is substantial, 3 billion in
the current year, there are a number of challenges faced by the
construction industry in general that have had serious impact
on GSA in recent years. I think, in former testimony to this
Committee, I have mentioned that we have had over a 20 percent
increase in construction costs over the last 4 years and this
has impacted our bidding process. This includes the volatile
market and the competition for construction, which has been
very severe in southern California and the southwestern part of
the country.
Also, security requirements have presented additional
challenges and impact construction two ways_obviously the
background check of contractor workforce that is doing
renovation in our buildings, and Ken Grunley is here and can
speak about that in spades, and also the physical security of
our building. The HSPD-12 requirements are administratively
complex and delay access to work sites; getting crews for
multiple crafts cleared through the program is challenging and
time consuming.
We have seen that with EEOB, we have seen that with the
Department of Interior Renovation, and especially when we have
phased construction such as the Department of Interior where
crew sizes and composition vary during construction time
periods, or the security of EEOB in terms of access to it. The
physical security of buildings includes such items as perimeter
security, obviously blast resistance glazing, structural
design, and progressive collapse. All these are quite unique
and require costly investments by the Federal Government
through GSA, as well as time in terms of getting bids and being
able to proceed on those.
Besides these challenges, I would like to highlight some of
the following initiatives that we have taken to improve our
construction program in addition to ones detailed in my written
statement and these include strengthening collaboration with
industry. On April 17th, I mentioned to you, Madam Chair and
the Committee, that I would be reaching out to the DCBIA, ULI,
NAIOP and the other--BOMA and the others, to try to make sure
that our requirements for green leasing, which are now on the
table, are understood by them looking ahead.
But we are using new technology such BIM technologies in
design and construction of our building and new approaches to
project delivery. We now use over four approaches to project
delivery in addition to our emphasis right now on the CMC
approach, which I know has caused some issues about staffing
with some of our contractors. Industry collaboration is key,
and this panel, I think, reflects that. To find ways to better
collaborate with industry partners and to build a common
understanding, last fall we convened a building opportunities
conference here at the NCR with representatives from the AIA,
the Building Owners and Management Association as well as the
Association of General Contractors.
I would mention we do continue to have a strong commitment
to design excellence. Our design and construction peer program
is still very much intact. We develop a robust design and
construction peer review, which does take time, and as you all
probably know, this Committee has seen 2-year cycles for design
excellence to be applied and construction excellence.
I have taken a lot of action over the last 2-1/2 years in
response to direct concerns expressed by our biggest clients in
the construction area, the courts, the FBI, the DHS, and the
construction board of protection who have pulled me off very
early in my tenure and said design excellence is great, but it
is taking too long. We have, in fact, selected a new AC for
construction excellence who is taking a major new approach to
shortening the design cycle. In some cases with a new border
station, like the Adonna border station in Texas, we have cut
the design time from 2 years to 1 year.
We used design-build to get it in place earlier, and CBP
appreciated that. The courts had a similar concern. I heard it
from the top administrator of the courts. So we have been
reviewing our projects for design quality, looking at
shortening design and construction cycles, looking at cost
realism, because obviously with the market escalating at 8
percent per year in costs, we have to constantly be looking at
the prospectus level and make sure our management timeline is
focused. Now I know you have mentioned concerns in that regard
and we do have some.
The private sector has, in fact, and some of these
panelists might underscore that, expressed concerns about the
construction charging undue burden on some of their general
contract needs, and I think we are working with the
construction management association in BOMA and looking at
approaches that we can more effectively staff out in terms of
our management of the construction versus the contractor. We
are also looking at new approaches in construction estimating.
We are working closely with the design and construction
community to help us re-examine our cost estimating and our
bench marking. We have had major challenges by the courts, for
example, in the benchmarking that we have applied to the former
LA courthouse proposal.
We have minimized the impact of market conditions on the
construction cycle time. We have performed market surveys. We
have met several times in San Diego to assess the nature of
that market and our proposed construction approach for the San
Diego courthouse, and that has yielded a lot of regard and a
lot of good suggestions back to us.
New technologies are part of the solution to get a more
cost effective approach to construction. One of these, perhaps
leading that area, uses the building information system
approach, the BIM approach, which is a new technology of 3-D
visualization of the building showing not only the structural
side, but looking at the electrical and HVAC systems and
looking at buildouts requirements. Earlier this week, I
actually talked with some Canadian counterparts that are vested
with us, as well as other countries, on standardizing that BIM
approach which we think will create more competitiveness in
bidding for projects. I also met earlier this week with HVAC
engineers who see value with a BIM because it does lay out
those specifications early on in the project and visually shows
how they will fit together.
Consistency in design and planning is still a major focus.
We are taking steps to be more consistent nationwide. My deputy
behind me, Tony Costa, has spent a lot of his time ensuring
that our policy guidelines from headquarters are consistently
applied throughout the 11 regions so, again, contractors
dealing with us have the same protocols in place to respond to
bids and to build these buildings for us. One major issue,
which I will say I still think we need to focus more on, is
project management training and certification.
If you were to ask me, ``what is our major problem in terms
of contract and project management?'' it is the lack of
regional and consistency in approach and experience. We have
very committed project managers in all 11 regions, but project
size varies between a courthouse and small border station
addition, or a buildout, or just a T and I improvement in a
standard building.
They vary enormously and, quite frankly, with retirements
in the Federal Government, we are losing people like Art
Turowski, who have decades of experience. We have to focus on
training, and we have to lean on the BOMAs and other industry
groups for that input.
I would also mention that there are other initiatives that
I think will address some of the problems you mentioned in your
opening remarks, Madam Chairman, and that is that we are
rewriting the GSA standard clauses. We have a library of scope
of work templates that we are reviewing right now and we are
looking at various project types and construction options and
contracting options. We think these tools will make our project
solicitations more consistent, both for our needs in
safeguarding the expenditure of Federal Buildings Fund money as
well as the ability of our private sector partners, on our
left, to respond to those.
We will continue to engage with industry partners in
reviewing and commenting on these templates to make them as
effective as possible in promoting team work, in collaboration,
ultimately saving time and money for the private sector as well
as the Federal government.
Just some comments on leasing, because we have some
continued challenges in that regard. You have mentioned
several. Nationally now our lease inventory is 51 percent of
the Federal Building Fund_175 million square feet of space. We
are now at 49 percent government-owned space. We have now more
leased space than government-owned. Since 1965, we have seen
400 percent increase in the amount of leased inventory with GSA
from 43 million square feet to that 175 million I mentioned.
As you know, in the fiscal year 2009 Congressional Budget
Justification, we are increasing 7 percent more and leasing up
to 187 million square feet. This increase has created stress on
the program. We have also lost people, such as Art Turowski,
who have decades of experience, but we have Francesca Ryan and
her team at NCR, and Bart Bush that are there to pick up the
reins and continue to address the needs.
But we do hear from our customers. We do hear from
contractors that inconsistent organizational structures from
the past, and quite frankly, 10 or 15 years ago, the
governmental philosophy of GSA was to really decentralize into
the regions and decentralize in terms of management or leasing
in the NCR from centralized to essentially a service center
orientation. We feel that we need to bring back more
consistency through the regions by more protocols and direct
policy from Central Office.
Specifically, we set up an independent office about 1 year
ago, the Office of Real Estate Acquisition in Central Office,
to oversee leasing policy at the national level, and the
regions. We are completing the trend towards creating new
leasing divisions at NCR with clear lines of authority and
accountability. And in fact, we are holding a workshop on June
17th next week and 18th with PBS senior managers from around
the country to again review and make sure this implementation
is done as quickly as possible.
In order to meet the increasing needs for leased space, and
to strengthen our capacity and leverage the expertise of the
private sector, as you well know, and I know this Committee had
a great deal of debate on this. Three years ago, we awarded the
National Broker Contract in 2005. That effort is still well
underway. We have had a GAO report on it. We actually
implemented the 11 recommendations of that GAO review. Private
sector lease support now is very, very strong from our
contracting firms, one of which is on my left, assisting us in
efforts to standardize our leasing practice nationwide and
provide more support to our customers and government tenants.
As of March 31 of this year we have tasked our four
national broker contractors with 1,500 lease acquisitions
totalling about 30 million square feet. These leases represent
a contract value of $2.5 billion. Usage of this contract have
continued to increase. Our goal for implementation and
utilization of the national broker contract is 70 percent.
Madam Chair, I will tell you that usage is not consistent
between the regions. We have some regions that still only have
20 percent utilization, only two, but they are being driven to
increase that utilization. Quite frankly, we have seen benefit
not only in the rent credit, but also in terms of the market
rate yields we are getting on our leased inventory. We are
targeting 9 percent below market, and with the National Broker
Contract, in some cases, we are getting 11 percent below market
rates.
I think it is also significant that our brokers are not
paid by the GSA Federal Buildings Fund. Instead, they receive
market-based commissions from successful lessors with GSA
receiving commission credit, as you know, from the brokers paid
to offset some of the costs for our rent of our tenants
agencies. These credits today have generated in the pipeline
$33 million in direct savings to our clients customers in the
form of reduced rent.
In addition, we have had 882 additional lease acquisitions
in the pipeline, which would increase that recent aggregate
rent credit to almost $77 million when they get in place. We
have achieved rent rates, as I mentioned, that continue to be
below market. In order to succeed, I think, with our leasing
program, we not only need to leverage this National Broker
Contract, we also need to grow our inhouse leasing expertise. I
was talking to Art before this about the attrition we have had
in our leasing realty specialists. We do not have uniform
competency through all of our regions. But I will tell you that
in the last 4 years, even with the National Broker Contract in
place, we have had the need to add about 10 percent more
leasing specialists. We are now in the range of about 526
leasing specialists through our 11 regions nationwide.
This also continues to be a challenge. We have a retiring
workforce some 50 percent over next 5 years. We are recruiting,
training and trying to retain people of quality. I will tell
you that I am have proud of my 2-1/2 years at PBS in watching
how the Federal government, particularly the team at PBS,
trains and brings in new recruits and has a mentoring program
and ALD training, and it really is a team spirit across the
country, and I think that does help us to get kids to be
interested to come into GSA and to become leasing specialists
or project management specialists. And we have wonderful co-op
programs with universities. I happen to be on the board of John
Hopkins real estate program. We have recruited several
graduates of that program that have MS's in real estate. So
while I do think that we are losing talent, we are doing our
best to attract new talent.
One of your major concerns in your opening statement again
was solicitations for offers and the issues of how long that is
taking and some of the concern and burden that puts on the
private sector offerors in the National Capital Region. We have
800 million square feet here. We have 53 million square feet
leased, and the market is difficult. I went to the real estate
round table about 2 months ago and listened to the top CEOs in
the industry talking about the credit crunch impact on
commercial development.
We are very focused on trying to make that lease, the SFO
process more transparent and efficient. We have, in fact,
looked at revisions to the SFO process to make them better
organized so that an offeror can review the first section to
determine whether they want to pursue an offer before they are
spending $100,000 or more to do so. We also reorganized to
recognize the normal, essentially chronological events in lease
procurement between offer, award, design, construction and
administration. We have put a great deal of effort into this.
The work is not completed. I think Bart Bush and Francesca
could comment and provide the Committee further about what we
are doing in NCR. But this is a comprehensive and thorough
program, and I will tell you that we hope the new SFO will be
more user friendly, particularly during the bidding process for
offerors, and as well as in a life cycle of a lease.
Lastly, I will tell that another major concern is security
requirements. It is not surprising that we have varied between
level 1 and level 4 security requirements. There is a need for
greater building setbacks, glass resistance, building access
requirements, as well as challenge of co-location of tenants at
work places where we are leasing space but do not have the
whole building. I think we can better capture some of these
security costs in terms of our leases and make them more
transparent to the private sector, and we are developing_and
have developed_a security unit price that will allow an offeror
to review the security requirements more easily in the lease
and determine and categorize those costs.
I will tell you that I am concerned about the impact of the
security requirements. And I am concerned about the ISC
standards that are reflected in our lease portfolio and offers.
We are going to continue to try to make sure that that does not
impact on the competitiveness of offerors in the region.
Lastly, I will talk a little bit about the concern raised
about the time it is taking to clear leases and get them in
place. We do have a unique challenge in terms of those
requirements that I went through earlier, the sheer size of the
portfolio in the NCR is huge. We have 10 percent annual
expiration of leases and resolicitations. But both NCR and this
new Office Of Real Estate Acquisition are addressing and trying
to create more efficiencies in lease acquisition. I know that
Art only left us 6 months ago, so a lot of this was on his
watch, but we are committed to fixing programs and trying to
reduce delays and trying to make sure that we are commencing
rent payments and processing invoices timely. I can't tell you
that in all regards we have done that in a timely manner.
Some of the hold over leases and some of the closeouts of
leases are taking longer than I am comfortable with. And Bart
knows that, as well as Tony and the rest of the ARAs.
It is unacceptable really to cause unnecessary delays for
the contractors bidding on these leases. We do hope that some
of this improvement will improve the tracking, and some of the
efforts underway will improve basically the cost effectiveness
for people to bid.
I would also mention that we are, on the construction side,
we are looking at lease construction clauses nationwide and
trying to make sure that they are more uniform. We have
recently had a lease construction round table in June, I guess
it will be next week, and we are also looking at improving our
ability to get more uniformity in competition.
I will tell you several of the courthouses in the southwest
had very few bidders, and I was very concerned about that. And
part of it obviously was the construction process as well as
the competition the DOD and other builders in that region were
creating for us, and we did not have the bidding that I would
like to see.
Anyway, I do want to conclude by just saying I hope the
statement deals with some of the issues you mentioned in the
beginning. I really do thank our colleagues on the left for
their partnering in the many ways that they do through the
leasing construction as well as BOMA industry and their support
in working with us. And I would be pleased to answer any
questions that you might have. Thank you.
Ms. Norton. Thank you very much, Mr. Winstead.
Why don't we go right on down. Ms. Seekins.
Ms. Seekins. Good morning Madam Chairman and Members of the
Subcommittee. Thank you for holding this important hearing. I
am Gail Seekins, senior property manager of Akridge, a full
service real estate firm in Washington, D.C. I am here today
representing the Building Owners and Manager's Association
International. First and foremost, I would like to say that GSA
is one of BOMA's largest and most valued members. Our comments
today are intended to highlight improvement opportunities that
will help the Federal Government and the private sector
companies that build and lease to government agencies and
better streamline the processes to save money for all parties
involved.
Our comments are a compilation of feedback we receive from
a number of our member companies and are not intended to
highlight any specific project-related concerns of my company
or any other.
We would also like to compliment GSA for ongoing
cooperation with BOMA in seeking mutually beneficial changes to
construction and leasing practices. Scoring rules are at the
top of the list when asked to identify problematic aspects of
doing business with the government. To avoid the harsh
accounting treatment required for capital leases, GSA writes
only operating leases. The Office of Management and Budget
offers the rules for operating leases and OMB's circular A 11.
OMB's rules are generally more stringent than the
equivalent private sector. Scoring rules can contort lease
procurement and increase costs in the following ways. GSA is
prohibited from leasing government land and leasing back
improvements even when they own acceptable sites. GSA is
prohibited from outleasing underutilized buildings which could
be renovated and leased back. Unique features required by the
government must be paid outside the rent in a lump sum. Longer
lease terms that would reduce rental rates are often prohibited
by A11 rules to avoid capital treatment. Yet leasing for 20
years yields a lower rate than 10 to 15.
Lease to ownership options are not allowed ruling out the
cheapest financing options and lowest rates.
Let me give you a specific example in FBI build to suit
leases. Under present scoring rules, the rental rate is based
on a class A office building with no consideration given to
specific security and construction requirements for the FBI
which can increase the cost up to 20 percent.
The prospectus real estate rate is often not enough to
complete this job without a lump sum payment, frequently in the
millions of dollars for security that FBI and similar agencies
simply do not have in their budgets. Discovering this at the
time of bid evaluations causes problems and costs for everyone.
We believe GSA should make solicitations for offers net of
real estate taxes. When a project is bid, real estate taxes are
unknown, so local government assessors and project bidders
guess. Every bidder will guess a little differently, making it
impossible for GSA to compare apples to apples. Many SFOs
include square footage requirements for specific rooms and
offices without providing additional detail of actual
dimensions required. SFOs should be as specific as possible to
alleviate the possibility of a building being designed and
constructed that does not meet the agency's or system's
furniture requirements although the square feet requirements
were met.
Generally, the Federal Government is perceived by the
office building industry as terrific tenant for all the
obviously reasons including creditworthiness. The use of
outside brokerage firms over the past several years has been a
positive development.
But I must highlight a few frustrations as well. Prospectus
rental rates often approved well before lease procurement have
not kept up with rapid increases in construction materials and
labor costs. In addition, they may not take into account
differentiating features such as proximity to mass transit.
This may preclude commercial landlords from competing for GSA
leases who might otherwise do so. Government leases do not
reflect private sector practices and many clauses are not yet
landlord friendly. Over time one learns which clauses get
enforced and which don't. However, lenders look at all the
clauses when assessing risk and assigning interest. Clauses
that are not used do cost government. For example, there are no
holdover provisions in a government lease. But the government
can introduce condemnation, which means a government tenant
cannot be evicted.
While this makes sense due to the nature of government
functions, leases should have a hold over provision with a rent
escalation to include, encourage GSA to reduce or eliminate
hold overs. With the pending impact of BRAC relocations and
associated delays the hold over issue will become more intense
in the years to come.
Termination without notice and restoration clauses may not
be typical but are used in some regions. When used, they should
be aligned with industry standards to make them understandable
by the building owner community increasing competition for GSA
leases. Additionally, some clauses serve no benefit while
costing the government in the rental rate obtained for their
use. An example is clause included in builder suit leases
already alluded to allowing the government to buy a building at
market rates at any time. Although the government does not
exercise this clause, lenders see it as a risk and penalize the
project for it.
Personnel turnover is inevitable in any entity, public or
private. However it sometimes appears that GSA reassigns its
staff to positions where they have limited experience. The idea
that anyone can do anything is not correct. When building
owners and managers repeatedly start over with new people,
investing time and procedures and becoming acclimated, it
causes frustration, and more important, lack of productivity.
We recommend that GSA consider modifying its excellent
intern program to include more technical training in leasing
and facilities management.
In addition, the government is unfortunately notorious for
slow payment processing. Delays in payment for work orders,
operating expense increases and real estate tax payments are
not only frustrating but costly to the government due to the
mandate to pay interest on delayed payments and to the landlord
in terms of reduced cash flow. Delays in processing leased
documents are an issue. Commercial landlords still report that
it may take 3 to 4 months to receive an executed lease from GSA
after the landlord had signed. Delays associated with lease
amendments or modifications are even longer. We know that GSA
is working to address this issue and we are appreciative of
these efforts.
In summary, improvements in making GSA leases more in tune
to industry standards will not only help the private sector but
also increase competition for government leases. And that is
good for everyone.
We thank the Subcommittee for holding this important
hearing and look forward to working with Congress, GSA and
other public and private sector partners to achieve our mutual
goal of improving the construction and leasing process to make
it more effective for GSA and their private sector partners.
Madam Chairman, thank you very much.
Ms. Norton. Thank you, Ms. Seekins.
Mr. Turowski.
Mr. Turowski. Thank you, Madam Chairwoman. It is a great
pleasure to be here today to discuss means of improving the GSA
leasing and construction process.
Through a rewarding Federal career, I have had a 37-year
association with the GSA leasing program. My work with GSA has
been in several GSA regional offices and at GSA's headquarters.
During that time on watch, I witnessed and was part of many
changes and became intimately familiar with the constraints.
Most recently, since retiring from GSA's national capital
region and joining the firm of Jones Lang LaSalle in its
government investment services group, I have acquired the added
perspective of building owners in the GSA leasing process.
GSA's leased inventory is large by any measure. Most of the
leased transactions which comprise it are undertaken with
efficiency, transparency and user friendliness. However, it has
been by observation that among GSA which are larger, more
valuable or merely complex, this is often not the case. Let me
share with you the reasons why this is and how this is apparent
in the private sector and what some solutions might be.
First, the GSA lease process has been expanded in recent
years. Some examples of added stages in the process are more
rigorous acquisition planning, better formulated location
decisions, various compliance checks, and the creation of a new
set of documents binding Federal agencies to their obligations
under GSA leases. While these process additions represent
laudable objectives, GSA has yet to minimize their impact on
the procurement process, most notably the impact these new
steps have on procurement duration and project completion
timelines.
Second, and some years ago, GSA implemented new ideas in
its organizational placement of leasing. Their goal was to
achieve a greater degree of responsiveness to their client
agencies' lease requirements. An unintended consequence though
was to lose clear lines of knowledgeable leasing accountability
up to and through management levels in the leasing program, and
as importantly as well back down again into the leasing
organization.
Third, GSA has been challenged in its ability to accurately
ascertain their client agencies' requirements early in the
lease procurement process. By launching procurements without a
complete picture of their needs, GSA has negatively impacted
the perceived commercial reasonableness of GSA transactions in
the marketplace and added to the perception of the government
as a challenging transactional partner.
The lengthy budget cycle is clearly one reason for
disconnect between GSA and their client agencies when it
happens. But it is clear that greater attention is needed to
smoothly manage transactions in a manner that will satisfy GSA
users, provide the best price to the government, and encourage
the continued participation of private sector partners.
Fourth, and this has been echoed already, or I will echo
what has been said already, in staffing its leasing operations,
GSA faces major resources constraints. In the personnel arena,
a combination of factors have had significant impact, including
a long period of essentially no hiring of new personnel, a wave
of retirements today, and difficulty in dedicating the
significant time and expertise required to bring new hires up
to a full level of leasing proficiency.
Fifth, and we have heard this before, the volume and scope
of GSA's required lease documents significantly exceeds those
for lease transactions in the private sector. Again, though
often well intended, this added documentation adds to the
perception of the government as a difficult partner in private
sector transactions.
Process additions, a lack of sufficiently trained
personnel, and inadequate communication between GSA and its
client agencies have all served to complicate the GSA leasing
process. These weaknesses have become readily apparent to the
private sector and manifest themselves in many ways, including
an exceptionally high numbers of lease holdovers and
extensions, short term extensions, increasingly frequent
mention by GSA representatives of lease hold condemnations as
negotiating leverage, and from the nationwide perspective of a
service provider to the industry, each of GSA's 11 regions
handles their real estate transactions differently, and
therefore in practice there are functionally 11 different ways
GSA performs real estate transactions.
Also manifest in more project false starts as a result of
rescoping, prospectus shortfalls and reasonably foreseeable
site deficiencies as well as significant rent arrearages and
lease execution delays. There are solutions to these issues. In
fact, I am sure none of the issues I have raised comes as a
surprise to GSA. And I was leaving GSA I understood there were
moves afoot to take corrective actions.
But most importantly, a rigorous real estate oriented
training program is needed for GSA leasing personnel. A
coherent top down leasing management structure is needed to
strengthen accountability, better manage transactions and
maintain an action bias. GSA should take steps to simplify its
process and undo or better adapt well meaning but cumbersome
procedural steps that increase organizational and transactional
inefficiency. A thorough review of the submissions,
certifications and requirements of lease procurements should be
undertaken by GSA with the goal of streamlining and
simplification.
These, Madam Chairman, conclude my remarks and I will be
pleased to address any questions or comments by you or Members.
Ms. Norton. Thank you, Mr. Turowski.
Mr. Grunley.
Mr. Grunley. Good morning, Madam Chair Norton. I am pleased
to be here today to share my experiences with GSA with your
Committee. My name is Ken Grunley, and I am president and owner
of Grunley Construction Company. We are a general contractor
located in Rockville, Maryland, and the majority of our work is
in Washington D.C. or the surrounding areas. We are a family-
owned business employing 280 employees and annual revenues of
approximately $300 million.
Sense our inception in 1955, our business is primarily
focused on serving the public sector. I personally have 35
years of experience working on GSA projects. Grunley
Construction is very proud of our long relationship with GSA
and many projects that we have successfully completed as a
team. A few of these projects are the National World War II
Memorial, the Ariel Rios Building, which is EPA headquarters,
the Eisenhower Executive Office Building that we are presently
restoring, and my personal favorite was the renovation and
restoration of the Blair House known as the President's guest
house that we did in 1986 when I was quite a bit younger and a
very exciting project for me. I have also been a peer for GSA's
design and construction excellence program and have traveled
all over the country being involved in ongoing projects and
future projects for GSA.
From our inception in 1955 until 1995, so a period of about
40 years, the bid process remained relatively simple. You
picked up a set of drawings, you put a bid together, you turned
it into a bid room, and the only guarantee that you were going
to complete this project was a bid bond from a surety. The bids
were open publicly. And the low bidder was typically awarded
the project. And it worked fine for years, however, although
the bid process remained very simple, the construction process
became more complicated, and it was time for change.
I want to go through three changes that became evident to
us in how they impacted us. The first, and other people have
shared this, reduction in GSA inhouse staffing assigned to the
projects. The reality began in the 1990s when the size of the
government workforce was under pressure to shrink and it
continued for a variety of reasons that has led to the present
situation where all the projects are under the leadership of
quality project, GSA project execs and project managers,
however the majority of the staff involved in the day to day
oversight of both construction and paperwork are contract
personnel as I refer to as construction managers as agent.
GSA has managed this process well by employing qualified
contracting officers and retaining construction managers as
agent firms that understand GSA's mission. This approach is
necessary in order to assure the government that construction
activities are being performed and documented in accordance
with the contract requirements.
However, what seems to have resulted from this approach is
an increase in general contracting staff necessary to be
responsive to the CM staff assigned to the project.RPTS
KESTERSONDCMN HOFSTAD[11:56 a.m.]
Mr. Grunley. My sense is that we may have taken this
approach to a point where there may be a loss of efficiency;
improvements can be made. I was much more concerned with this
issue 10 years ago in the mid-1990s when I first saw it. And I
think GSA has done a wonderful job over the past decade in
making sure they pick the right teams for these projects.
During the late 1990s, the bid process changed drastically
to use the best value procurement. In all the years I have been
working with GSA, this is certainly the most dramatic change
and probably the best change. And, simply, it went from low bid
to best value being a combination of price and past
performance.
GSA has kept the process extremely simple. The technical
proposal usually has four parts, which would be past
performance, key personnel, a project schedule, and then a
combination of small-business plans and apprenticeship plans.
They want to hire a construction company; they do not want to
hire a marketing company. And they have made it very clear that
they don't want lots of fancy pictures and graphs. They want
the facts, and they just want you to take the test. So you take
the test the way it is done, and they have made it very easy
for the industry to adapt to their process.
There are some obvious advantages of best value
procurement. General contractors now compete as a construction
professional. GSA is not forced to award to companies that have
a long history of claims and poor performance. General
contractors are competing against quality firms. A much more
collegial relationship between the general contractor and the
architects and the tenants and the GSA. And the quality of the
projects are certainly better, and there are certainly less
claims.
I believe this approach created a much more open and
transparent environment between GSA, the contractor and the
design team. And it was really sort of the first step in an
integrated approach that we are using today in the Government
sector.
The third change that we have really seen is the
application of design-build and construction management at
risk. CM at risk is still in its infancy within the Federal
Government, but GSA is actually a frontrunner in using this
approach. These methods of procuring and delivering building
design and construction are found on two related precepts:
integrate the team, and the earlier the better.
Without getting into all the pros and cons of design-build
versus design-bid-build versus CM at risk, it is important to
note that these added methods of delivery significantly alter
the contractual relationships between the three key
participants.
GSA has put all these methods, along with variations, into
what I call their tool box. GSA makes its decisions to use
traditional design-bid-build, design-build, and CM at risk on a
project-by-project basis. In recognizing that the this type,
location, schedule and other project-specific requirements need
to be assessed in order to determine the most advantageous
delivery system, GSA has recognized the best value for the
Government.
In conclusion, I need to say that what I believe makes GSA
special is they have their own culture. And although they are
operating all across the country in 11 different regions--and I
have traveled those regions--you get a feeling of fair, honest
and open communications. They are open to newcomers, for new
companies. They have fairs. They advertise their projects very
well. And they give very clear, concise direction on how to
submit proposals for a GSA.
They certainly have a business-like atmosphere and always
looking for new ideas through the business community. They are
constantly having meetings at the various construction
organizations are invited to, just to come and talk about
changes, what they are doing well, what they could improve on.
The last item for me, as a businessman, every time we bid a
job I do risk millions of dollars. And in the best value
procurement, GSA is certainly now knowing who they are buying
services from. But what is important for me is that GSA is so
consistent that I really know who I am selling to, which
impacts our price dramatically. You know, all contractors are
going to weigh risk and reward, and GSA has truly taken the
risk away, a large piece of the risk away, from contractors.
Thank you.
Ms. Norton. Well, I thank you very much, Mr. Grunley.
All this testimony has been very, very important. Even as
you spoke, I have been having conversation about what some of
you have said because of its implications for what we want to
do.
Let me ask first Mr. Winstead a question.
First I should say that not only in my opening statement
but I think, Mr. Winstead, you have heard at the table that
people who deal with GSA, respect its expertise, inside GSA we
have heard some problems about staffing and about
decentralization, I will get to. But everybody understands that
GSA is the center of whatever real estate expertise we are
going to have, and they can handle so much of it that you have
learned to do it well.
The problem here--and that is why we want to get to what it
is that we can do to improve the processes, because we hear
about them all the time. I mean, you can give an overall--these
people seem to know what they are doing, and then you continue
to hear all kinds of issues that come up. You need to look at
the entire process.
For example--and understand this Subcommittee is here to
help, including changes in statute and prospectus, if
necessary. Mr. Winstead says it right at the top of his
testimony, on page 1, and cites the numerous laws and
regulations and executive orders and OMB and the rest of it.
Now, this is the Government. We recognize that a great deal
of that is necessary. Fraud of any kind in Government work gets
a big Bronx cheer, and it simply has to be avoided. And the way
you avoid it is layer on layer on layer that reduces risk to
the Government, a risk that the private sector is willing to
take. Because in taking that risk, the private sector in fact
saves money. The Government can't do that.
At the same time, I have to ask you whether you believe all
of the regulations, laws, executive orders, OMB circulars and
et cetera, things which you cannot change, do you believe all
of them are necessary, Mr. Winstead?
Mr. Winstead. Madam Chair, you know, a lot of them are
statutory requirements. So the question----
Ms. Norton. That wasn't--I know that I am--me, Congress;
you, agency.
Mr. Winstead. Right.
Ms. Norton. But Congress is not going to know what to do
if--and that is why we have assembled a whole panel here--if we
never hear from the agency that there is anything that Congress
can do, that Congress can change.
And as you are well aware, Mr. Winstead, Congress hasn't
looked at this process. We don't know diddly-squat about this
process.
So I am simply asking you--I am not saying we are going to
change the laws or that we are going to change the regulations.
But I am asking you, can you think of any of these that, over
time, may have become obsolete or may no longer be necessary or
may be too cumbersome to be useful today?
Mr. Winstead. Well, I do think that that would be very
important for us to look at. And I think what we are doing both
on the national level to look at those requirements and to
figure out better what can be----
Ms. Norton. You know what I am going to ask you to do, Mr.
Winstead? If you have been there 2 years and you have not
experienced enough frustration to be able to name some when you
have a Member of Congress here willing to give help, I am going
to ask you to get me, in 30 days, some that you think I ought
to look at, even if you are not willing to believe they should
be changed.
This should be asked of the rest of the panel, who may not
feel similarly constrained. Are there specific, I mean,
specific laws, regulations--understand that the burden will be
on you and, if I go about trying to change it, on me to show
why this or that law or regulation or executive order or
whatever is no longer necessary or is inconsistent.
Remember how we enact laws, one on top of the other. We
don't go back and say, "Oh, that law isn't needed because of
something we did 50 years ago." So I kind of depend on the
people who use laws, regulations, executive orders and the rest
to tell me the truth, the whole truth.
So anybody else have something to say about specific laws
or regulations you would like to see changed and why you think
we could change it without increasing the risk or harm to the
Government?
Mr. Grunley. Madam Chair?
Ms. Norton. Any of you?
Mr. Grunley. The Davis-Bacon wage rates, which I am
actually in favor of----
Ms. Norton. You say you are?
Mr. Grunley. I am in favor of the Davis-Bacon wage rates.
Ms. Norton. That is good, because that is not about to
change.
Mr. Grunley. But the reporting I find to be obsolete.
You know, we all need to pay minimum wage, but none of us
report to the Federal Government that we pay minimum wage, or
we don't certify we pay minimum wage. The Davis-Bacon reporting
is a paperwork nightmare. Our company has at least eight people
that full-time do nothing but collect certified payrolls, check
them to make sure they are correct and turn them into GSA. And
GSA also has people that are also reviewing what we turn in to
make sure they are okay.
And, to me, competent contractors should just be able to
certify that they are paying the Davis-Bacon wage rate, and we
will save lots of trees.
Ms. Norton. Well, I find that is a very useful comment. You
say they look to see if, in fact, they are paying the rate.
Now, this is complicated, look at the market rates, et cetera.
Is it some kind of surveys of others that have to be done? And
how complicated is the process of looking to see whether you
are paying those rates?
Because this is a very useful comment.
Mr. Grunley. Each specification that we bid on has the most
current Davis-Bacon wage rate.
Ms. Norton. Where do you get that from?
Mr. Grunley. GSA issues it in the request for proposal. So
the rates exist for each project. And what I am saying is that
we have to keep track--we collect them from all of our
subcontractors.
Ms. Norton. So they tell you what is the rate?
Mr. Grunley. Yes.
Ms. Norton. You look to see if the rate is being paid. How
does that get complicated? They give you a number; you look at
a number. I am missing something.
Mr. Grunley. If a typical project has 50 subcontractors,
they have somebody in their office sending our firm their
certified payrolls, which lists every employee, how much money
they were paid, how many hours they worked during the week,
their gross pay, their net pay. We check them to make sure they
are correct, and then we send them to GSA, who then checks
them.
Ms. Norton. Now, does GSA then go through the same process?
Now, you have already checked it to your subcontractors. Does
GSA go through the same process, Mr. Winstead?
Mr. Winstead. Madam Chair, the Davis-Bacon threshold was
recently raised from 1 million to 2 million, not 2,000. We want
it raised--I apologize--we would like it raised. That would
help. Again, as a suggestion, you asked earlier, but raising
the threshold would help. It is not 2,000--it is currently
2,000. We would like it raised to 1 million to 2 million.
Ms. Norton. Raising the rate based on what?
Mr. Winstead. Based in terms of the streamlining the Davis-
Bacon effort, trying to get adherence to the wage rate, but to
raise the threshold from 2,000. And it has never been indexed,
which would help.
Ms. Norton. That is interesting. Apparently you have to do
it up to a certain rate, but GSA's projects are so large that
you generally go above the rate?
Mr. Winstead. Yeah. And apparently that 2,000 constraint
makes it unrealistic, very difficult to deal with.
Ms. Norton. Mr. Turowski?
I mean, I don't understand. I mean, is there redundant work
going on here between the Government and the contractor?
All I am asking you, Mr. Winstead, is, do you go through
the very same process he goes through? Do you check him in some
way? Do you spot-check him in some way?
Mr. Winstead. Yes, in terms of the compliance with Davis-
Bacon, we do.
Ms. Norton. You don't go through the same process he has
just gone through? Do you go back to his subcontractors, do you
go back to him----
Mr. Winstead. No, we have our own market-based information,
labor wage information----
Ms. Norton. But you have already given it to him.
Mr. Winstead. Right. So we verify based on their submittal,
their compliance with the Davis-Bacon rates.
Ms. Norton. Well, it sounds to me the same thing is going
on.
Mr. Grunley. What I am suggesting--I don't believe it needs
to be done at all if you--again, by law, we all need to pay
minimum wage if you own a business. But you don't report to
anybody, you don't list all of your employees and show that you
are paying minimum wage. So on a Federal construction project
where you need to pay the Davis-Bacon wage rate, which is in
the book, what I am saying is for every single employee, so if
you have a project that has 1,200 employees on it, every week
you are getting reports on 1,200 employees on what they are
being paid, that we need to check to make sure it is accurate,
and then GSA does. And I am suggesting that the general
contractor just certify that everybody on the job has been paid
the Davis-Bacon wage rate, and there is no reason----
Ms. Norton. You do that for minimum wage? You do that for
minimum wage?
Mr. Grunley. You don't do that for minimum wage.
Ms. Norton. I thought you said you don't do every
employee----
Mr. Grunley. For minimum wage I am not aware that companies
turn anything into the Federal Government on every one of their
employees. But the Davis-Bacon wage rate is clearly higher than
minimum wage.
Ms. Norton. Yeah, sure. You recognize that if the
Government were to allow that, that there would have to be some
penalties associated with not paying the rate. Nobody would
say, are you certifying, that is fine. Would you be willing to
incur such a penalty if----
Mr. Grunley. Sure. If you certify that you are paying the
wage and then under an audit you are not, it is whatever the
penalties would be.
Ms. Norton. Do you audit, Mr. Winstead? Or do you simply go
through and cull every----
Mr. Winstead. We basically look at the rates in order to
certify that they are in compliance.
Ms. Norton. He has eight employees that do it; is that
right?
Mr. Grunley. Full-time, yes.
Ms. Norton. How many do you have?
Mr. Winstead. I would assume in every region we have--at
NCR, how many? Bart?
Ms. Norton. How often do we find----
Mr. Winstead. I can get you that figure.
Ms. Norton. How often do we find the contractor or
subcontractor is not paying Davis-Bacon?
Mr. Winstead. I think it is probably fairly rare. But I
will have to submit to the Committee, you know, how many in our
reviews. But I suspect it is pretty rare.
Ms. Norton. GSA is going to have to--before I decide to
have the GAO do it, it seems to me a quick audit could tell us
whether or not this is even a problem. And it may be emblematic
of the kinds of things you could do. You are not going to
change Davis-Bacon. You weren't able to change it with 12 years
of Republicans. You are not going to be able to change it now
that the Democrats are here.
So then you go to the next-best thing, and you get to why
it is so opposed. And it turns out that there are a number of
reasons. And this is the part of Government I hate. To the
extent that the reasons on the table have a lot to do with
paperwork, that, it seems to me, the burden then shifts to
Government to show why it needs to cost so much to do it.
So I am going to ask staff to work with GSA to design--I am
going to have you work with staff to have an IG audit of
contracts, representative of various kinds and levels of
contracts, so that we know what we are doing here. This is
classically what I would like to do.
If I find there are problems, then I will know the degree
of problems and whether there can be changes. At least get
those eight employees doing something that benefits the
economy, if I may say so, besides their own paperwork. If we
find there are problems, there may need to be changes that we
aren't aware of. That is a----
Mr. Winstead. I would be happy to work with the Committee
on that.
Ms. Norton. Thank you. In 30 days, I want the IG to come
back here, 30 days from today. Because I am not asking for a
whole, big audit of everything they have ever done. I am trying
to get a snapshot of whether we have a problem here or not.
Let me ask Mr. Turowski a question. More than one of you
has spoken about decentralized leasing, which apparently
occurred sometime in the 1990s. In essence, I guess it is you,
Mr. Turowski, that says you have 11 different kinds of leasing
practices being practiced in your regions.
Mr. Turowski. GSA's regions.
Ms. Norton. Excuse me?
Mr. Turowski. In GSA's regions.
Ms. Norton. In GSA's regions.
Mr. Turowski. Right.
Ms. Norton. I would hate to take a close look at that one,
because I can't--the first thing I have to ask you, Ms. Seekins
and Mr. Winstead, on that one is, what is to assure the
Government that there is uniform adherence in policy, in
national policy, if, in fact, there are 11 different leasing
regions and no centralized leasing expertise of the kind there
was before it was decentralized?
I mean, in terms of--while all these may differ, the
notions of a negotiation strategy, time frames that should be
expected region to region, how does GSA know that national or
congressional policy and regulations are being adhered to if
people are going off in 11 different regions of the country as
their own leasing offices?
Mr. Winstead. Madam Chair, the point about consistency and
as well as enforcing the leasing policies in the stages of the
lease, facing program management, pipeline, workplace
requirements, development, some of these things are, in fact. I
will tell you we have centralized that effort in terms of a new
office, as I said, about a year ago, because of the growth in
leasing, because of the amount of activity----
Ms. Norton. Listen. What has been centralized?
Mr. Winstead. The policy guidance for leasing--we have
broken out and established a new Office Of Real Estate
Acquisition--Chip Morris behind me heads it up. For the same
reasons you are mentioning, we wanted to ensure that all the
regions who are responsible--we don't procure out of central
office; the regions do, NCR and the other 10 regions--to make
sure that they are following guidelines, they are following all
of the procurement regulations, but that they are doing it
consistently and there is not variation, so that----
Ms. Norton. There is not variation because you have moved
to centralized leasing once again?
Mr. Winstead. In terms of our lease policy guidance and
strengthening an office of leasing expertise at our central
office in D.C. Similarly, the NCR is now regrouping----
Ms. Norton. The National Capital Region?
Mr. Winstead. Yes, ma'am--regrouping--previously, and I
think through most of Art's tenure, the leasing was centralized
in the service centers. And Bart Bush and Francesca Ryan are
looking at bringing some of the centralized administrative
responsibilities back into the regional office to, again,
address the uniformity issue, management issue and efficiency
of getting leases done and getting rent start dates in place.
So that is what we have been doing through this new office
over the last year or so.
Ms. Norton. Complaints we have received had to do with the
different service centers, and one didn't know what the next
was doing. I wanted to ask Ms. Seekins, what is your comment on
the decentralized leasing? And have you seen any evidence of
more centralized management?
Ms. Seekins. Excuse me. You are getting my Lauren Bacall
voice, because I have a cold. I apologize.
Our members contributed a number of these comments, and
they did not speak specifically to the decentralized leasing
process. So my familiarity with that is primarily from hearsay.
I would be happy to go out to our membership and get some
specific comments and transfer them to Committee.
Ms. Norton. Well, we would appreciate it.
But, Mr. Turowski, you have been on both sides with
centralized leasing now, then decentralized leasing, then
apparently some moved back to centralized leasing. What have
you seen?
Mr. Turowski. Well, the problem typically manifests itself
when you compare one region to another in the areas where the
process affords judgment.
Ms. Norton. So obviously you have to make room for the
difference between a Washington, D.C., and for that matter New
York City and a rural area where there is a courthouse?
Mr. Turowski. Well, in the leasing arena, if I might give
one example, I mean, we see regions when they are in expiring-
lease mode resorting to a technique available within the
regulations that permits them to forego the issuance of
competitive solicitations. It is a long----
Ms. Norton. By doing what, Mr. Turowski?
Mr. Turowski. By affording themselves of the process within
the regulations, a justifying a less than full competition and
foregoing the issuance of a competitive SFO. When the lease is
expiring, the occupying agency is predisposed to stay. There is
no room in there, but there is no availability in their budgets
for move costs, which we know can run $80, $100 a square foot
today. Some regions will utilize the piece of the regulations
which allows them to simply advertise for informational quotes
and, based on the information they get, decide if they need, in
consideration of the move and replication costs, decide if they
need to issue a competitive solicitation.
Ms. Norton. But you said they couldn't afford to move. So
it sounds like the agency is just trying to indicate that,
while they do need space, they can't afford what it would take
to move, because it does come out of their budget.
Mr. Turowski. That is right. And what they are doing is
justifying negotiating with the incumbent owner.
Other regions, on the other hand, won't avail themselves of
that wherewithal in the regulations. They will proceed with
issuance of a competitive solicitation when we in the market
know that the likelihood of a move eventuating from that
competitive SFO, solicitation for offers, is probably less than
5 percent.
So we go through a process there that probably--well, does
disserve a lot of people. And that is a difference in regional
interpretation of the regulations.
Ms. Norton. Well, that is a huge difference. That is a huge
difference because of what it takes to go through the
solicitation process.
Mr. Turowski. Procedural, in terms of the time it consumes
and so forth, yes, it is.
Ms. Norton. That is what I mean, staff time, GSA time, and
I hate to say--I mean, do people bid? Do people bid under those
circumstances?
Mr. Turowski. Some do.
Ms. Norton. Because then I think that is an outrage. Of
course everybody wants a Federal lease. And if you think the
Government is out here in good faith, you may think there is
more to it than you know.
Mr. Turowski. You know, Congresswoman, if I might, this
goes to the question you put earlier about what conceivably
might be changed in the law or the regulations.
Only because I was present at the passage of the
Competition in Contracting Act and was somewhat privy to the
debates at the time, the policy debates, about whether it
applied to leasing or not am I sensitive to the idea that
potentially there might be a carve-out, as it were, a statutory
carve-out or exception to leasing from the Competition in
Contracting Act.
That wouldn't for a moment suggest that GSA dispense with
competitive solicitations when they are genuinely on the market
for a real estate transaction. But it would render far more
easily and consistently not going on the market and justifying
the price they pay based on information and the cost to move
were they to move.
It strikes me that if that were far clearer in the statute,
that that would be a significant improvement and enhancement of
the process across GSA's regions.
Ms. Norton. Mr. Winstead, what--well, I don't think I will
get a direct answer. But, Mr. Winstead, here is a suggestion.
That, in essence, GSA has forced agencies to use tactics that
are in conformity with the regulations, fool the public, fool
those at least who respond to the solicitations, when in fact
the agency has no intention or is trying its best not to move
because of the costs associated with the moving.
There is a classic example of the transparency within the
agency that perhaps is needed. And if regulation is clouded,
the question then becomes, how do you proceed in the absence of
that regulation?
But it does sound to me that any regulation that makes
people take action at odds with what the regulation requires
and, worse, makes those who deal with the Government spend
money when everybody knows that there is, in fact, no change
that a Government can afford to be made, something is wrong
with that regulation and perhaps not with what is being done.
But if I don't get some indications, then we can't work
through the process. Because every time you change a
regulation, you have to watch that you are not making moves
that endanger the Government in the first place. After so many
years, though, under such regulations, you would think that the
agency would know, particularly from its experience with the
marketplace, whether or not a regulation is useful. And this
sounds to me as though it does not have uses on either side.
So I won't ask you, Mr. Winstead, because I think I will
get the same kind of answer I have been getting from you,
unless you have something to say. If you have a direct answer
to his suggestion, I will take it.
Mr. Winstead. Well, Madam Chair, I do think that the issue
that Art mentioned about having more flexibility is certainly
something that could benefit us. But on the other hand, we are
trying to deal with the current regulations in advertising. We
have put in a new lease-tiering process that gives us advance
notice so we can get to the agency and understand fully, which
we do track when their leases are expiring, and have enough
time with requirements to compete in the market to decide
whether, you know, a succeeding lease----
Ms. Norton. Mr. Winstead, see, that is what I mean. We are
not talking about when people don't know. We are talking about
the agency and having those central abilities to advise the
agencies that this doesn't make sense and a regulation that
seems to tell them that either you solicit or not. And they
seem to be at cross-purposes with one another. And it may go
back to having some advice from central policy.
Mr. Winstead. Yes, we will do that.
Ms. Norton. Mr. Winstead, up here I have been put in the
arduous position of dealing with two appropriations for very
important Federal construction. Has it occurred to GSA that the
agency should be requesting all the funding for Level 4
construction, including whatever add-ons, like technology add-
ons, security add-ons, so that the project would not have to go
to two separate appropriators?
Mr. Winstead. I think that, you know, we put an awful lot
of thought in the prospectus handling of trying to reduce and
trying to get authorization up front for a lot of these, you
know, stages, such as design and construction, and the
separation of those authorizations. I think there is great
efficiency to be gained from that.
Ms. Norton. Why isn't it done in the first place? The major
appropriation--to give you an example of the things we would
like to change if we understood why in the world it was being
done, the Department of Homeland Security construction is where
you might expect, in the appropriation Committee that handles
GSA. But security technology, a very small amount was in the
appropriation for Department of Homeland Security.
It has been easier to get out of the GSA than the
Department of Homeland Security for reasons that doesn't have
much to do with anything except the foibles of the
appropriation process.
But if I were sitting at GSA and I had experienced what you
experienced, the President put money in his budget, not being
able to get this out even when he controlled the House and the
Senate, I mean, what kind of reflection is that on GSA? And
what do you suggest should happen in such cases?
Mr. Winstead. I think, again, it is a question--in the case
of St. Elizabeth's, the projections, as you well know, are
about a billion from DHS in terms of contribution to cost and
about $2 billion from the Federal Building Fund. I think it is
all a question of, you know, if we have the resources on our
side. And, quite frankly, I think that, you know, the
additional supplemental appropriations on the DHS side helps
us.
Ms. Norton. I am sorry. I didn't hear that last----
Mr. Winstead. I think that the billion that we project
coming from DHS for security and fit-out and equipment does
help expand our ability because of the constraints in the
Federal Buildings Fund to get that project done. So I think the
concept of having to----
Ms. Norton. First of all, you see what you are doing? The
fact is we are talking about one building at this moment. We
are talking about the Coast Guard building.
Mr. Winstead. Right. That is correct.
Ms. Norton. We are not talking about the whole project. We
are talking about that building. That building we could have
gotten out of here far more easily if it were all in the GSA.
Long term, we probably shouldn't be building this way in the
first place. This is Government-owned land. And we have been
trying to think of a way to do this far more economically to
the Government.
But let's deal with what we have now. If we have to do a
construction one building at a time, is there any policy reason
why the prospectus and the submission should not be submitted
such that it would go to one agency appropriation Committee,
the appropriation Committee that handles GSA? Is there any
reason for it to be divided?
Mr. Winstead. Madam Chair, obviously that would be more
efficient. The reality is OMB requires customer agencies to pay
certain----
Ms. Norton. See, if you not going to help me if you say----
Mr. Winstead. But you are correct.
Ms. Norton. Because I know what it requires, and I know OMB
is part of the problem, and I know that we can't change OMB
unless I know whether it works or not. And I am not asking you
who did it. I know who did it.
I am asking you, would it be better if, in fact--would it
be more efficient, would it be less costly to the agency and to
all involved if this were submitted to one appropriation? And
could it be developed such that that would happen? Could it
technically be done?
Mr. Winstead. I do think that it would make things more
accountable and easier to get authorization for. But the
Committee----
Ms. Norton. We have the authorization. I am going to insist
that my questions be answered. We have the authorization for
one building, Coast Guard. What we don't have is the
appropriation, in part because a small part is in one Committee
and most of it is in GSA. Ask the GSA building service
commissioner, do you believe that changes should be made that
would place such appropriations before one appropriator?
Mr. Winstead. Obviously I think it would be easier to
manage, and obviously procedurally it will be easier. I guess--
--
Ms. Norton. We need to look at that, unless the agency--I
ask you these questions because, if you find a reason why some
of this is done, then that overcomes what would seem like a
simple-minded change. Not because, you know, "This is the
answer. Why don't you give me the answer?" I am looking for a
reason why perhaps this was done this way in the first place.
You have given me one reason: In the long term, you would
like DHS to pay for part of the building. I like that reason.
But when it comes to this particular building, it doesn't seem
to me one has to be looking at a project that is going to take,
what, 15 years to build and that I hope won't be built this
way.
Mr. Winstead. Right.
Ms. Norton. Let me ask all of you about the new security
requirements. Obviously, they add delay and expense. My concern
in this Committee is that if you look at those security
requirements, there is simply not the inventory in the United
States of America to meet them. So I am trying to find out
where they come from and whether you have any recommendations
for streamlining them and particularly whether you think they
are all necessary.
Anything any of you would have to say on that would be very
helpful.
Mr. Grunley. Madam Chair, for the construction workers
themselves, HSPD 12 is a real burden for the construction
workers. And I say that----
Ms. Norton. And of course to those who lease, because they
then have to meet certain kinds of requirements as well.
Go ahead, Mr. Grunley.
Mr. Grunley. The construction workers now under HSPD 12 now
fill out a form that I believe is the exact same form you fill
out if you are trying to get a top-secret security clearance.
They want to know every time you have been out of the country.
They want to know three friends from high school and three
friends from your neighborhood. And if you have a transient
workforce, it becomes very difficult.
They ask about your siblings and your parents. And we can
easily have legal employees that are here with green cards
whose parents or siblings may be in the country without those,
and they are unable to fill out those forms without perjuring
themselves by, you know, saying they don't know where their
family is.
So it is hurting us getting construction workers to the job
site, which is impacting the schedules.
Ms. Norton. It sounds like overkill, but it does raise
questions about--you are building a Federal building and what
you need to know about those who are constructing the building
where I guess you could do the most damage by the way you
construct it.
Who issues those requirements? GSA? Department of Homeland
Security?
Mr. Winstead. Department of Homeland Security, in
coordination with the Federal Protection Service in terms of
the clearance side in the Federal buildings.
But the HSPD 12 is, in fact, being implemented now, and it
does have the issues that Mr. Grunley mentioned. I know
firsthand that we have had experiences here in Washington about
the time it is taking and the lack of mobility in terms of
taking certain workers or craftsmen to other sites. And it is a
burden. But it----
Ms. Norton. This raises very fundamental questions.
Ms. Seekins?
Ms. Seekins. My perspective is a little bit different in
that I manage buildings in place. But I am sure my experience
is similar, and that is that there can be a disconnect between
GSA and the agencies. And I frequently get the agencies
advising X, Y and Z with regard to security while my privity of
contract is with GSA.
I think that improving----
Ms. Norton. What do you mean, the agency advising somebody
with regard to security----
Ms. Seekins. I have one building where the agency is
imposing higher security standards than are called for on the
lease.
Ms. Norton. How could that be? You have a lease----
Ms. Seekins. And in this instance, the agency oversees the
guards in the building. The guards won't let construction
workers in the building even though I have been to GSA. It
becomes a problem. There is a considerable amount of confusion.
I would like to see----
Ms. Norton. But GSA has authority over the guards.
Mr. Winstead, the Federal Protective Service?
Mr. Winstead. Yes, ma'am. Madam Chair, the Federal
Protective Service is under DHS. We do have an MOU with them in
the buildings, in terms of the protocols.
But this issue is really getting--and I was not fully aware
of that, that there is a different level both in terms of the
contract clauses versus what is being imposed in the buildings.
I do know that we are meeting regularly with Federal Protective
Service to make sure that there are no inconsistencies in the--
--
Ms. Norton. Well, Ms. Seekins, when an agency violates the
lease, considering that the lease is with the GSA, do you
report that to the GSA?
Ms. Seekins. Yes, I do. And, in this case, GSA gave me
permission to work around the agency, which I proceeded to do,
and my construction process is finished. I am a little--I think
this is probably emblematic of some larger problems where
agencies forget that GSA has the privity of lease.
Ms. Norton. I do think that these lapses--it is not the
first time I have heard of agencies taking charge of security.
Mr. Winstead, are you aware that apparently for security
reasons I would daresay anybody in this room who is not a
Federal employee, who sought admission to the new Department of
Transportation, not a very high-risk target, on M Street, who
came through the door, might be asked to offer her
identification, would still not be able to get into the
building? This could be a taxpayer with children who needed to
go to the restroom. It could be along M Street, which is being
built up and its amenities are not all in place. It could be
somebody who knows, "Wow, this is a Government building; I know
I can find a cafeteria."
Are you aware that you cannot get into that building unless
you are a Government employee or are accompanied by somebody on
the stairs to show you have an appointment? Are you aware of
that?
Mr. Winstead. I do know that protocols are in place for the
screening at that building, and Bart might know more, but in
terms of appointment review and calling up for a specific
appointment----
Ms. Norton. No, I just asked, did you know that a taxpayer
can't get in the building?
Mr. Winstead. I was not aware.
Ms. Norton. This is a--they are not exactly a--it is
obviously built to resist terrorism, but it is not exactly
considered a target. Who set that policy?
Mr. Winstead. Well, that would have been done with the
Building Security Committee and FPS and the requirements
dealing with DOT, looking at their--you know, they have
control--tenant agency has control over the building and works
with the Federal Protective Service in terms----
Ms. Norton. The tenant agency has what?
Mr. Winstead. Sorry?
Ms. Norton. The tenant agency has----
Mr. Winstead. They have control over their entry of the
building. They work with DHS and the Federal Protective
Service. We do negotiate often on behalf----
Ms. Norton. So you are telling me that there is no uniform
guidance among agencies even about admission of the public,
based on whether or not--based on the security needed for the
building, the mission and function of the building, that
agencies are free to make that decision on their own, even if
it means the average taxpayer who paid for the building can't
get into the building to use the restroom? That is satisfactory
policy, as far as you are concerned?
Mr. Winstead. No. I think what we----
Ms. Norton. I am just giving you a case in point.
Mr. Winstead. I understand. And it seems illogical and an
inconvenience to the public and taxpayer. I mean, I totally
agree with you.
My understanding is that we are constantly engaging with
the Federal Protective Service on either lease properties like
DOT or our own buildings to make sure----
Ms. Norton. Well, you obviously are not, because you did
not know about this. This is why in those hearings--those
answers, Mr. Winstead, will get you nowhere at these hearings.
Now, what I am going to ask GSA to do is, within 30 days,
create a questionnaire for agencies on their security and
admission policies affecting the public. In designing that
questionnaire within 30 days, I want that questionnaire
submitted to the Subcommittee.
Mr. Winstead. I will do so.
Ms. Norton. There will be very different kinds of things
needed, but I know who is not qualified to do it, is the agency
head. And I can't figure out who does it. Indeed, I would like
to know about your own leadership on security. Apparently there
is a committee, an interagency security committee.
Mr. Winstead. Right.
Ms. Norton. Who decides the security, and what security are
they deciding? And who puts it before them? And is it factored
into the cost of the construction and the cost to lessors?
Mr. Winstead. Basically, it depends on the level of the
security of the facility. But the ISC essentially is made up of
the Federal Protective Service, GSA, and the tenant agencies.
The standards that are suggested for Level 1 to 4 facilities
are essentially enforced by the Federal Protective Service. But
we work--that is what we do. We actually help----
Ms. Norton. No, I am not asking who enforces them. I am
asking who says what the security is and, in designing that
security, all the people at the table, including those who can
tell you whether or not the Government or, for that matter, the
private sector can or will pay for the kind of security you are
ordering.
Mr. Winstead. Well, we do decide that within the security
elements of either a new construction project or a leased
facility. We work with the Federal Protective Service and the
Interagency Security Committee standards. That is how we arrive
at these standards.
Ms. Norton. So who has the final say on this? Who has final
say on what the Interagency----
Mr. Winstead. Each agency has an official designee for that
purpose and advisors from both the Federal Protective Service
and GSA. The cost is an issue, which is what we try to
arbitrate to make sure that, you know, the requirements are not
unrealistic given the risk that has been identified and the
risk levels that have been identified.
Ms. Norton. The costs are relevant in the recommendation
made?
Mr. Winstead. That is correct.
Ms. Norton. Ms. Seekins, what has been the effect--perhaps
Mr. Turowski and Mr. Grunley as well--what has been the effect
of the additional security that the Government has had to
require following 9/11? And has it been done in a way so that
the private sector can meet the demands that the Government now
puts forward?
Mr. Turowski. Madam Chair, I think from the standpoint of
security, physical security in leased space, and keeping in
mind that offset of 50 foot or even 100 foot setbacks are not
required when GSA is seeking existing product, except for law
enforcement, it hasn't really been----
Ms. Norton. Say that again. Only for law enforcement?
Mr. Turowski. Well, law enforcement, defense and
intelligence have their own----
Ms. Norton. Like the ATF?
Mr. Turowski. Precisely, have their own security.
Ms. Norton. For example, no great setback had been required
for the Department of Transportation? They have a setback, but
it is very different from the ATF setback.
Mr. Turowski. I think agencies can upgrade their security
requirements from the standard if they are willing to pay for
it. But----
Ms. Norton. Who will pay in the first place?
Mr. Turowski. Well, the agency. If they are requiring----
Ms. Norton. The taxpayers of the United States of America.
Mr. Turowski. Well, out of their budget, as opposed to the
GSA budget.
Ms. Norton. All of this is out of their budget. And the
budgets are just not going to be there.
Mr. Turowski. But if I might return to the question, in
terms of physical security, when lease space is sought in
existing product, we don't see any material impact. The idea of
magnetometers and X-ray machines in the lobby and at the
loading docks, the treatment of air intakes and so forth, while
on occasion problematical, really don't amount to major
challenges.
However, as part of GSA's leasing process, they do require
an inspection, a security inspection, by a physical security
specialist. Typically, that is from the Federal Protective
Service. And oftentimes the waiting that it takes to get a
security specialist to a proposed lease location can be fairly
extended, and that, in and of itself, can extend the process.
So just to reiterate a bit, physical security when GSA
seeks existing product tends not to be a problem. However, the
security inspectors----
Ms. Norton. When it comes to leasing?
Mr. Turowski. When it comes to leasing, yes.
Ms. Norton. Because GSA is living with the existing
inventory.
Mr. Turowski. For the most part, yes. I mean, they do
specify build-to-suits, and build-to-suits at level 4 we
understand would kick in a requirement for at least 50 foot
setback. But in major urban areas where we see most GSA
activity, it is for existing product and, again, build-to-suits
generally aren't pursued.
Ms. Norton. Ms. Seekins and Mr. Grunley, I would like to
hear what both of you have to say on security to make sure that
we are being realistic here.
Ms. Seekins. I think that the physical security standards
are quantifiable and administered in an even-handed way. So I
find that quite acceptable.
I think I join Mr. Grunley in the idea that some of the
personnel security requirements are quite costly and do not
seem to be evenly administered.
Ms. Norton. Do you mean like guards?
Ms. Seekins. Bringing contract employees into a building,
do you do a NACI background check? Do you have them go through
what is called an eQIP form, which is longer? Do you have them
go through a higher level of security clearance? That----
Ms. Norton. Is there some guidance so that, for example,
the building owner knows the difference in which employees are
required----RPTS JOHNSONDCMN MAYER[12:52 p.m.]
Ms. Seekins. I would like to say--I would like to get that.
Because I don't see it.
Ms. Norton. All right. We would like to see that guidance
clearer so that the building owner won't be faced with the
people are ready to come in the building, contract signed to do
it, and then he has got to figure out which level of forms this
contractor has to meet then. That's the kind of thing I am
after.
Ms. Seekins. Precisely. Thank you very much.
Ms. Norton. Again, GSA can't know these things unless we
bring them out at public hearings. We are just trying to get
rid of these things as soon as possible.
Mr. Turowski, you have anything to say on that.
Mr. Turowski. No.
Ms. Norton. Mr. Grunley, on security, surely you are
building buildings. I guess if the government wants to pay for
it, you build whatever they require.
Mr. Grunley. I think the buildings we are working in that
is doing some sort of structural hardening seems adequate. You
know, I don't see it being overkill. I think they are important
buildings with prominent people that could be targets.
As far as getting the construction workers in, I think they
should look at it more practically. If you had a brand-new site
and the first guy on the job is putting up a construction
fence, and then he is going to leave, I don't think he should
need a security clearance.
And do I believe that the----
Ms. Norton. The construction worker just putting up a fence
you mean?
Mr. Grunley. Right. Under HSPD-12 may very well have to
fill out the form just to put the fence up for 2 days and
leave.
Certainly, the mechanical and electrical trades that are
working inside, working in telephone closets, I think that is a
wonderful idea. Maybe the painter who is roaming a building
like this at night should have the clearance. But I think there
needs to be a practical approach to it.
Ms. Norton. Are any of those different--Mr. Winstead,
requiring necessary--indeed, I am on Homeland Security
Committee, so I am listening with two kinds of ears here. And
these requirements of employees, are distinctions made between
somebody who has been called to put up a fence and somebody on
the inside putting up cables?
Mr. Winstead. Obviously, Mr. Grunley mentioned they have
not been. Perimeter fence security might be if, you know, it
was related to a high security building. But I think he is
correct in that there could be more flexibility in people who
are not in the interior of the building.
Ms. Norton. These are the kinds of practical suggestions
we----
Mr. Winstead. We would be happy to, you know, to take these
suggestions and others and get them back. And obviously our
responsibility is to try to make it as easy as possible,
working with the HSPD-12, this new system of badging, as well
as the requirements that DHS and FPS have.
Ms. Norton. Let me ask you about the Prompt Pay Act.
By the way, Mr. Winstead, it is not the case that Federal
Protective Service comes entirely under my other Committee, the
Homeland Security Committee. There is jurisdiction shared
there. And we have had very, very important hearings on the
Federal Protective Service, which is in very dire straits since
its transfer from GSA. If I might say so, it ran very much
better at GSA.
One of the ways brought into question the Prompt Pay Act
when we found that--and this is one example; obviously, if you
apply it to leasing and construction I would be most
interested. But this example had to do with security guards.
It was reported to my office they weren't being paid--that
kind of scared us, since they guard secure sites and Federal
buildings--and learned that one of them had fraudulent--you
know, was a felon, shouldn't have a contract in the first
place. We passed legislation there.
But the most pathetic case was one we corrected by working
very closely with ICE and the GSA, and working hand-in-glove
with them, which is why I say we want to help. Instead of just
bringing them up here and exposing them, we have helped ICE
within a period of--didn't take any more than 2 or 3 months to
reorganize their relationship to contractors.
The best case was a former police commander at D.C. and his
wife, who owned a contracting company, who had habitually and
chronically not been paid.
Now, Mr. Grunley is a pretty big guy. This was a--would be
considered a small business owner. So how did he keep from
getting in the same position as the felon whom we caught, whom
we found out had the GSA money, the FPS money, and simply
hadn't paid his guards? Why had this man not done the same
thing?
Well, besides the fact that he was honest, what he was
doing was essentially depending upon the fact that he had a
government contract, getting a loan from a trusted bank that
continued to fund him until his FPS ship came in. Not until he
came before us did it begin to come in. It was an outrageous
case of failure to--a violation of the Prompt Pay Act that
endangered government facilities.
As a result of this, they centralized their contracting,
put in an ombudsman, not only brought themselves current, but
quickly negotiated what amounted to many contractors who, in
fact, were owed money.
But there were disputes. So you could set those aside
forever and just ring up the cash register. Part of the problem
was that people also thought they weren't getting paid under
the Prompt Pay Act.
I have got to ask you both, all three of you, do you know
of instances where people have failed to be paid promptly? I
ask you, if GSA pays a penalty for late payments--I can tell
you this much, you will pay a penalty if it goes the other way.
I would like to have your experience.
On this one I feel a little passionate because of the small
business person. So anything you have to say to me. Remember,
our answer to ICE and FPS was not to beat them about the head
and shoulders, but to actually develop a relationship with them
which changed the system, which didn't turn out to need a lot
of wholesale makeover.
So give me, first, the experience. Maybe with construction
and leasing this is not the same problem.
Mr. Grunley. First of all, thanks for the comment about
being large, but--I was thinking I should go on a diet. But
until 1987, we did operate as a small business, so it was nice
to graduate from that program.
We have absolutely zero problems getting paid from GSA.
They meet the Prompt Pay Act. Occasionally, a check may be a
day or two late because somebody was on vacation----
Ms. Norton. Would there be a penalty if they did not meet
the Prompt Pay in your case?
Mr. Grunley. Yes. And they automatically send the interest.
We do not have to ask for it. So occasionally we will see
$12.82, and we don't know what it is for, and we will call and
find out it is an interest payment.
Ms. Norton. Fabulous. Because they know if that added up it
would ultimately come to the attention of the government
because the amounts are so large.
Go ahead.
Mr. Grunley. I would say 80 to 90 percent of the people
that are having trouble getting paid, it is because they either
don't understand the process or they are not doing it
correctly. And it happens in my company also.
I will have a young----
Ms. Norton. What do you mean, they don't understand the
process?
Mr. Grunley. They should. You can't just submit a
requisition; you need to have it approved by somebody. The
Prompt Pay Act starts with approval.
Ms. Norton. But people want their money.
We also found that some contractors, that some of the
problem at FPS really were the contractors themselves. In this
case, they were small businesses that didn't understand
everything. And part of what they did was to train all their
contracting officers, submit new material to people, the ABCs
of what you have to do. And they don't have the problem
anymore.
I don't understand. In other words, these fools don't
understand what they have to do to get their own money. Well,
whose fault is that?
Is it that the agency has made it perfectly clear, Mr.
Winstead? And if these people only did what you told them to
do, they would be paid just like Mr. Grunley has been paid? I
don't understand what the problem is.
If there is no problem, we know if they are as big as Mr.
Grunley--not very big in his chair, but he has grown from a
small business--apparently you all know what to do, but I know
what happened to small businesses.
Well, just let me go on. I don't want to--I am trying to
find experience.
Mr. Turowski, you on the inside and the outside, did you
find this to be a problem or not with leasing and with
construction? Prompt Payment Act.
Mr. Turowski. Madam Chair, from both sides of the leasing
program, I only have anecdotal recollection of Prompt Pay----
Ms. Norton. I am not asking you to come with a survey. Once
I find anecdotal evidence, then I look to see whether this is
endemic or whether this is----
Mr. Turowski. Has it happened on a couple of occasions?
Yes, there have been Prompt Pay violations in leasing. But
honestly, to my--in my memory, the incidences in the leasing
area are comparatively rare.
Of course, if we were talking about prompt execution, that
would be another story. But Prompt Pay is not a----
Ms. Norton. Prompt execution. What is it essentially you
are making?
Mr. Turowski. Prompt execution of the lease. Not so much
payment on the lease, but execution of the lease once it has
been agreed to by----
Ms. Norton. And what keeps that recurring? In other words,
here is this person raring to go with maybe an empty building
or at least empty space, but you can't move because of why?
Mr. Turowski. Well, it is the processes that I alluded to
in my earlier remarks.
Ms. Norton. Because some of those processes, and you
indicated that those processes--you weren't prepared to say
those processes were simply unnecessary.
Do you think that there is a streamlining of those
processes that could be done if we all sat down and worked
together?
Mr. Turowski. I think it could be done. And I think
resources are the key ingredient to getting that done, yes.
Ms. Norton. Well, you know what kind of strain the
government is under.
Mr. Turowski. Yes.
Ms. Norton. And so the one answer I cannot accept is the
answer I most want, but know I cannot produce on, which is, why
not just put some more staff in there. That is why I know Mr.
Winstead and part of what Mr. Winstead is dealing with, and you
don't hear me beating up on him on staff. I know what he has to
go through to get staff.
I headed a Federal agency. And now that we are into this,
you know, awesome deficit, I can tell you I don't care who
becomes President next time, there is not going to be much
difference. That is why the agencies need to be put on notice.
I am going to be going to the Appropriations Committee to make
sure that agencies do not spend well beyond what they are
spending now. And the reason I am going to do that is because I
am on Oversight and Government Reform, I am here where
construction takes place.
So what the agencies have to do is this: When you have this
kind of squeeze--and we are in for the squeeze for some time--
you have got to take it from someplace. Are you going to take
it from personnel? With Federal workers retiring? Are you going
to take it from the child care center? Or are you going to say,
I want to be on K Street? So what I am going to submit to the
Appropriations Committee is the increased rent that K Street
can afford.
I am not going to do this. I am not going to sit on the
authorizing Committee and allow that to happen. You had all
better put people on notice.
And I don't think the trade-offs that I have just described
are fair unless you are overstaffed. Then maybe it is
personnel. But the appropriators are going to have my help as
an authorizer--and, indeed, I sit on the Subcommittee that has
to do with personnel in the Federal Government, and as an
authorizer here.
So the squeeze is going to come. It is going to come in the
right place. And I don't think the right place is to go to the
most expensive part in downtown D.C. or New York.
So, Ms. Seekins, is your Prompt Pay Act--excuse me,
execution. Back to what Mr. Winstead needs more than what Mr.
Turowski has suggested, more people as smart and experienced as
he is. Absent that, do you think that execution within the kind
of resources you can say you know you are going to get out of
your experience, are there ways to streamline the process so
that quite unfairly one does not hold somebody who has a lease
but just can't get it executed to essentially absorb that cost?
Or is he absorbing that cost? Mr. Turowski, is he absorbing
that cost?
Mr. Turowski. Yes.
Ms. Norton. Is the rent being paid by the government
anyway?
Mr. Turowski. No, not at that point. Not at that point, but
the space is being carried by the owner.
Ms. Norton. He is absorbing the cost?
Mr. Turowski. To the extent there is cost, yes, it is being
absorbed by the owner.
Ms. Norton. Because until GSA is on the dotted line, it is
his money, not ours. I am glad of that for the taxpayers, but
one of the reasons for this hearing is to try to keep from
unfairly burdening those who do business with the government as
well. So I am asking whether or not that time period between
knowledge of exactly who gets the lease and the signing of the
lease--are we talking about that period, Mr. Turowski, so I
know what I am talking about?
Mr. Turowski. We are talking about the period between which
the owner signs and GSA signs. The owner signed a lease, GSA
has not yet signed. Okay. It is the end of the process. And we
have seen in----
Ms. Norton. I would have thought the GSA would have gone
through a lot--GSA would have done a lot of work before it
would even let the owner sign.
So what has to be done between the time the owner signs and
GSA signs?
Mr. Turowski. They do their compliance checks, their
scoring checks, their conformity with prospectus checks. They
ensure that the agreement they have with the occupying agency
fully reflects all the business aspects of the lease. They get
the using agency's signature on those documents, their internal
pricing documents.
It has proven to be fairly time-consuming.
Ms. Norton. Scoring? That late in the game we are looking
at scoring?
By the way, several of you have mentioned scoring. You have
taken the issue I most hate about the Federal Government and
have been able to do least about. We had a successful fight on
scoring. I know what you are going through. But again, I put my
attack dog on them, and this was the Old Post Office Building,
where indeed there was an attempt by CBO to score--essentially,
Mr. Turowski, what we did at the Monaco Hotel.
So when you put before--which, of course, is now bringing
revenue to the Federal Government.
When you put that before them, you realize you are dealing
in part with people who don't understand real estate or land
management at all. So all they do is do the general crossword
puzzle. But I can tell you that that is a very hard--that is
the first one I think we have ever won. Well, Southeast Federal
Center, but we haven't been able to duplicate this, the
Southeast Federal Center.
See, when I find that kind of wall, then I go, okay, what
is another way to do this?
So you have heard some of these things. Scoring I am taking
off the list. But during this period of prospectuses, occupancy
and so forth, does that duplicate what has already been done,
Mr. Winstead?
Mr. Winstead. The problem that I think Art is talking about
is the close-out of the lease in terms of a winning bidder and
how much time it is taking us to basically sign the government
on the line. And I will tell you that because----
Ms. Norton. First of all, I want to make sure he is talking
about what?
Mr. Winstead. The time it is taking, on average, now in NCR
between the actual signing of the lease and the final lease----
Ms. Norton. Is that what you are talking about, Mr.
Turowski?
Mr. Turowski. That is precisely it.
Ms. Norton. So at least we are talking about the same
thing.
Go ahead.
Mr. Winstead. And it has been a concern in terms of that
time, taking more. It has in some cases taken 3 months. It
should not take that long.
Part of the issue is, and I think we have addressed it, we
are addressing it now, it is a burden on the private sector
lessor. I mean, they have got a building financed, we have come
to a meeting of the minds in terms of price, but there are all
those compliance things that Art talked about_some of which
cannot be done in advance_that have to be done after an
arriving of sort of the real price.
Ms. Norton. Can't that be streamlined at all, Mr. Winstead?
Mr. Winstead. Sorry?
Ms. Norton. Can this process be--you see the unfairness.
How long does it take, Mr. Turowski? Give me an example.
Mr. Turowski. Oh, it routinely has taken 2 to 3 months,
that period of time in the leases that were being done at the
time I left the agency.
Ms. Norton. How would you like to be left with that for 2
or 3 months, Mr. Winstead?
Mr. Winstead. That is unacceptably too long, I must say.
Part of our problem, Madam Chair, that I don't think
everybody is aware of is that we have had, through the National
Broker Contract, through looking at a rent bill management
effort, which is a new system for managing rent and is
contracted out, through basically the new e-lease system, where
all the realty specialists are plugging in the details on
leases into a new IT tool, that unfortunately--a lot of the
demands of these new systems create in the long term greater
efficiency--have been on top of the leasing specialists and the
COTRs, and have been an additional burden. And unfortunately, I
am afraid the time in which closing out this lease and getting
a signed lease back is taking more--longer than we are
comfortable with.
And I think that is what Art is talking about, as well as
Gail.
Ms. Norton. That comes under the category of not only
wanting to save money for the Federal Government, but to save
money for people who are unfairly penalized in the private
sector.
I am going to ask the IG to look at that process and to
make suggestions between lease signing and lease execution.
Again, we are looking for recommendations. We understand that
these things have been in place. And we are not looking for
penalties, we are not looking to criticize the agency, but we
can't do anything if we don't know anything about these things.
We have had an instance recently where an unnamed agency
simply refused to sign for as long as it got ready. Ultimately,
I think it looked closely at the fact that, given what the
Subcommittee had already done, it was not going to be able to
do what agencies have routinely done: get out of the
competition that had won the lease.
So they finally figured out what to do. And they did not--
and they did accept the space, albeit not for the unit it had
initially wished to be in the space. But the agency, how long--
what did it take the agencies? Surely it was almost a year.
Well, staff says at least 6 months.
Now, I don't think the agency could have done anything
else. And I couldn't understand it, because the agreement was
not with the agency; the agreement was with GSA. The lease is
not the agency's lease.
So you are going to have to make me understand why an
agency can hold up the whole Federal Government, even though
the agency has no responsibility under the law for leasing
after a fair competition on price, amenities, and everything
else has taken place. Understand, this fair competition has
occurred after the agency has signed on that it must have all
of these things. So make me now understand what GSA can do
about the fact that the agency says, well, I am just going to
hang out here as long as I want to no matter what it costs the
private sector and no matter what it costs the government.
Is there anything you want to suggest that the agencies can
be doing about this? Or, if not, what additional authority do
you need so that that does not occur?DCMN HERZFELD
Mr. Winstead. Well, Madam Chair, obviously in the original
requirements, efforts of looking at agency need and the one in
question, we are obviously trying to go to the market and
determine within the delineated area what the competition is.
And to get to that stage and then have the tenant agency not
party to the move or delaying the move is not what we are
supposed----
Ms. Norton. Are there any time limits on the agency at all?
Should there be?
Mr. Winstead. Well, only in terms of any existing lease
obligation they have in the current housing arrangement or
Federal----
Ms. Norton. You would know that by now, or you wouldn't be
negotiating for a new lease.
Mr. Winstead. Pardon?
Ms. Norton. Mr. Winstead, that kind of answer doesn't help.
Nobody is going to make a move out before their lease is up.
That is already understood. That is why I lose patience.
Mr. Winstead. Right.
Ms. Norton. I am really trying to look for answers. I am
not trying to criticize GSA. And therefore, my answer is--my
question is does the agency need authority in order to keep an
agency from deciding on its own motion when to sign a lease
which under law it is obligated to sign? It wasn't obligated to
agree to all of these things before the competition. It agreed,
sat down with you, and you virtually do everything they say.
Fair competition has taken place. They hang out there for as
long as they want to. You, of course, call them; you do the
right thing. And they say later for you. What I am asking you
is what should be done. If you can't tell me, then I am asking
somebody else to tell me what can be done either
administratively or by law.
Mr. Winstead. I think it is more--I know that case that you
presented was a troubling one and makes no sense in terms of
the amount of work and the determination we have had on the
Public Building Act in terms of where they should go. In terms
of strengthening the adherence in a timing sense of that
decision and the agency's move, I would be happy----
Ms. Norton. Strengthening what, I am sorry?
Mr. Winstead. Sorry? Between the commitment in terms of an
offer and an option and getting the agency to move, there could
be additional guidelines that could be supportive. But I think
we do the best we can to get the agency into the best space. We
have the delegated--we have the authority to do so, and that is
what OMB and the Congress expects us to do is to make the best
real estate----
Ms. Norton. You have the authority to do so. It would have
been difficult for you to do. Either we need to do something,
or you need to do something. Do any of you at the table see
anything that the agency could do on its own?
See, we can instruct the agency, or we can do it by law. We
don't think that is fair to just say bide your time, and then
when you get ready, you sign. You understand that when they
sign, then there is a whole process GSA has to go through. You
just heard testimony about that. So the whole works is--one
agency, what authority or none? Can't sign a lease. Has none of
the obligations under the lease. GSA does. It is taking a hit
and saying it is okay, just hit us. Well, you are not going to
hit this Subcommittee, so I want to know whether you all can
think of anything administratively that can be done, or whether
you have any recommendations of any kind.
Mr. Winstead. Madam Chair, again, we have the authority to
direct the agency to move. And, you know----
Ms. Norton. Okay. I get it.
Mr. Winstead. We have that authority. But I agree that
there have been some onerous cases, I don't know them in
detail, where that has not happened.
Ms. Norton. The Subcommittee will look to see whether it
needs to instruct the agency to issue guidance, or whether we
need to issue this guidance by law. We do not intend to sit
here and try to get the best deal for the government without--
in a one-sided process without trying to help those who must
contract with the government to also avoid needless
regulations. That is why I appreciate--I am a strong Davis-
Bacon supporter, but I have no case to be made for paperwork.
The point is to get some money to workers.
Why, Mr. Winstead, does the agency delegate the management
of leases in some cases? Give me examples where you do this. I
know you do this in some cases.
Mr. Winstead. There are about 13 agencies that have
delegated acquisition authority. We passed a new regulation
guidance last September that limited the ability of those
agencies to execute lease delegation unless it is under 20,000
square feet. And it is generally.
Ms. Norton. Wait a minute. Are you saying it is limited--I
need to hear this.
Mr. Winstead. It limited the agencies that have lease
delegation authority to only apply that delegation authority,
or we have to grant it to leases that are under 20,000 square
feet.
Ms. Norton. You grant it in the first place, or else it
wouldn't be delegated. Are there going to be any more leases
delegated?
Mr. Winstead. They have to submit a delegated lease
request.
Ms. Norton. Why are you delegating any leases if you are
the agency?
Mr. Winstead. Many of the agencies--USDA, for example, have
a lot of leases that are in areas----
Ms. Norton. Who?
Mr. Winstead. The USDA and Forest Service and agencies like
that are in areas where we really do not have the national
broker contractors.
Ms. Norton. So specialized agencies, you are saying
specialized agencies. So are all the agencies that have
delegation and management leases specialized agencies like
Department of----
Mr. Winstead. No. The delegation is generally in a small--
only 1 percent of all leases that we manage are delegated.
Ms. Norton. Would you submit to the agency a list of all of
the agencies who have the delegated management of leases
authority and any guidelines for those lease delegations that
you now have? What is the average number of leases in the lease
portfolio for what looks like a dwindling number of specialists
at GSA? Average number of leases.
Mr. Winstead. Well, we have about--we have an inventory of
53 million square feet in the National Capital Region. About 10
percent of that turns over every year. Nationally, as I
mentioned earlier----
Ms. Norton. So what is the average number?
Mr. Winstead. The average number per annum, we have, well,
125.
Ms. Norton. I don't enough to know whether that is
manageable or not. One hundred twenty-five?
Mr. Winstead. Annual leases in the NCR in terms of an
average lease load in the National Capital Region.
Ms. Norton. Handled by a specialist? One--I am asking, I am
sorry, the average number in the lease portfolio of a GSA lease
specialist.
Mr. Winstead. I think we have about 6,000 lease actions per
year in NCR. Is that correct?
Ms. Norton. I am just saying----
Mr. Winstead. One hundred twenty-five lease actions a year.
Ms. Norton. How many?
Mr. Winstead. One hundred twenty-five lease actions.
Ms. Norton. For each specialist?
Mr. Winstead. I am sorry, we have seven specialists--70
specialists and 125 annual lease actions in the NCR.
Ms. Norton. You consider that adequate or not?
Mr. Winstead. Well, you know, as I mentioned before, I
think we are--again, we have had attrition, again the issue of
the National Broker Contract and training people on that, and
being able to utilize that have, in fact--we have seen it
diminish. At one point 10 years ago, we had 1,000 realty
specialists. Now we have got 560 realty specialists. So we have
seen a long-term decrease in the number of realty specialists.
But the whole concept behind the National Broker Contract
was to contract out, and basically under contract, have the
expertise to determine and to advise us on the best deal in the
market. And the concept behind that was also that the same
realty specialists could work upstream with the client agency
to avoid what Art talked about in terms of the holdover
situation. And that has essentially been the mechanism we have
had in place the last 3 years under the National Broker
Contract.
Ms. Norton. Is there a private sector benchmark to measure
this by, or is the government unique in this way? Because I
don't have any idea whether that number is a good number or
not. Is there a private sector benchmark if you look at what
the private sector would regard as what is necessary to manage
such a portfolio?
Mr. Turowski. Not off the top of my head, Madam Chair. A
lot depends on the size of the lease, its complexity. I mean,
indeed, some major leases could have two lease negotiators
assigned to them. If a lease is comparatively small, a private
sector lease negotiator could be working, you know, 10 or 15 or
20 at one time.
Ms. Norton. These, of course, would be complicated just by
the number of rules and regulations and laws of the Federal
Government.
Mr. Turowski. Yes.
Ms. Norton. Mr. Turowski, I am aware that you were working
on a streamlined lease before you left the government. I am not
aware that it has been institutionalized. Do you know what I am
talking about, rewriting some of the parts of the leases that
might be eliminated so that you could streamline? Is that in
use?
Mr. Turowski. Honestly, no. That is catching me a bit cold.
Ms. Norton. What happened? Mr. Winstead seems to know what
I am talking about. Streamlined leases.
Mr. Winstead. Yeah, we have looked at the concept I
mentioned about trying to centralize more of the policy side in
the management of leasing. We have looked----
Ms. Norton. Very important. Go ahead.
Mr. Winstead. We basically looked at the skill erosion
issue and procurement expertise, and made sure that realty
specialists that were burdened with all these other things I
mentioned, that we do have enough seasoned people to guide
their actions and to train them. And I will tell you it is a
challenge.
Ms. Norton. That is good, because to meet the challenge
that it looks like the Federal Government isn't about to give
more personnel to agencies, one would think that the greater
the centralization, the more done by guidance, the better off
you would be unless you can expect some influx of qualified
people. As you know, people leave because you give them the
kind of training that makes it possible for them to earn
considerably more in the private sector.
Mr. Winstead. We do have attrition, and Art is an example.
Of course, he had 37 years.
Ms. Norton. Nobody stays these days as long as Art stayed.
Mr. Winstead. Right. But I do think we have taken the
management actions for this lease management both from a policy
standpoint, in Central Office and the regions. I think the real
weakness is the staffing question, and the real weakness is the
lack of seasoned expertise that goes back that many years. And
what we are leaning on is the private sector knowledge of the
market, but we still do not have sufficient members that have
had the years of training in lease and action and contract
officials.
And I also would like to mention that a lot of our--some of
our regions are concerned about that to the extent that, you
know, they are taking some of the more complicated leases and
trying to ensure that the senior people are using those as
examples for the newer incoming lease specialists to be trained
on.
Ms. Norton. You would think that that would be common
practice.
Mr. Winstead. It is common practice. I think what----
Ms. Norton. But the centralization that you say you are
doing seems to me would move toward that and toward that kind
of guidance.
Mr. Winstead. It is. We are issuing it now.
Ms. Norton. It is like I am a law associate, to take my own
profession. You know, the first thing you do is to look for
somebody who has written the same kind of pleadings and then go
from there.
Mr. Winstead. Right. We are regularly scheduling zonal
trainings in the regions for our realty specialists, and also
training them in some of these new tools I mentioned, which
will ultimately lessen the burden and allow them to focus more
on both, obviously, the client needs and the transaction. That
is e-lease and the rental management and other initiatives that
are tied in, which are new tools we put in place in the last 2
years. And I think part of the problem, what I hear when I go
to the regions, is that all these are great ideas, but it
diverts time and attention from getting people trained on those
new systems. And the result is maybe the leases are not getting
closed out as quickly. And I guess that is what we heard
evidence of earlier.
Ms. Norton. Well, somehow or the other that is the job of
management, to make sure people get trained, or else they just
create more of the same problem, or the problem is not a cure.
I am very interested, though, in your notion about seasoned
workers, particularly given what I know about this area, and
your intern program. Would you tell me about this intern
program and whether it leads to conversion, somehow some of
these employees to Federal employees?
Mr. Winstead. We have always had a very----
Ms. Norton. Where do they come from? Where do these interns
come from?
Mr. Winstead. Most of the interns, some of them were
recruited out of college; some of them actually worked for GSA
while they were in college through our co-op program.
Ms. Norton. How many of them have become government
employees?
Mr. Winstead. I think of the six that graduated, we went to
an intern graduation at central office about a month ago, and I
think all of them have stayed with GSA. And most of them were
at GSA before they entered the intern program. So we have two
levels. One are the college-age people that are still involved
during breaks and summer, that is the Co-Op program; but the
intern programs are essentially there were seven and----
Ms. Norton. Is there any requirement--wait a minute. All
right. These are people who work in the summer?
Mr. Winstead. No, the interns actually are full time, but
the co-ops, the college grads, or people that are in college
rather----
Ms. Norton. Both would be very valuable. Now, the interns,
they are being paid by the government?
Mr. Winstead. Yes. And they are selected by----
Ms. Norton. Can you be an intern paid by the government and
then leave and go to the private sector as soon as you finish
your internship?
Mr. Winstead. There is no--I don't believe there is any
signed agreement with the intern program that requires----
Ms. Norton. Why? The reason you are losing people is
because they get the training and quickly go to where they can
earn good money. Is there a quid pro quo for the government
money being used to train people so they can at least get
something out of it for the training?
Mr. Winstead. Madam Chair, I think the distinction is that
these are selected and prequalified in terms of their potential
to go up the career chain to become senior executives.
Ms. Norton. Are they already government employees you are
saying?
Mr. Winstead. Yes, yes, those people. The ones I mentioned
before in the----
Ms. Norton. The word "intern" applies to--you are using the
word "intern" because they are interning in GSA?
Mr. Winstead. That is right.
Ms. Norton. They are already government employees.
Mr. Winstead. That is right.
Ms. Norton. Are they government employees at the GSA?
Mr. Winstead. Yes.
Ms. Norton. Where did they come from? What kind of sections
of the GSA do they come from?
Mr. Winstead. Well, they are all over. They are in all the
programs areas, some in the Chief Architect's Office, some in
Portfolio, some in Financial.
Ms. Norton. So I am in one of those kind of related
functions, but I want to become a what, a realty specialist?
Mr. Winstead. Yes.
Ms. Norton. Okay. You then are paid the same you were paid
elsewhere in the agency, except you are learning now the whole
business of GSA as a realty specialist, right? Or not?
Mr. Winstead. Yeah, but the GS level could be higher. I
mean, obviously it is in some instances. Some of those interns
would go----
Ms. Norton. Okay. It could be higher. I am trying to find
out how many of these are there?
Mr. Winstead. Well, I know that there were six in terms of
Central Office. I think nationwide there are over 100.
Ms. Norton. Let me deal with the last six. Did they all
become realty specialists at----
Mr. Winstead. No, they didn't, but some of them are in the
realty----
Ms. Norton. What happened to the rest of them?
Mr. Winstead. Some of them went into the Chief Architect,
some of them went to Portfolio to manage our portfolio. Others
went----
Ms. Norton. All of them remained at GSA?
Mr. Winstead. Yes. At least the ones I am most familiar
with, the ones that graduated this year.
Ms. Norton. What I would like you--if you are saying that
all six at least are with the agency now, first of all, when
did they graduate?
Mr. Winstead. The ones I am familiar, which I talked to a
week ago, graduated--it is a 2-year----
Ms. Norton. You know for a fact----
Mr. Winstead. It is a 2-year program, and they participate.
The group that I am closely aware of, the group that just
graduated, are all staying with GSA. And I would be happy to
get the Committee exactly the qualifications of getting into
this program, how we determine both from their interest and
need in terms of staffing, where they end up after the program,
whether it is----
Ms. Norton. On this, you know, the one thing I don't do,
because I ran a Federal agency myself, is try to micromanage
something like this. I am trying now to figure out, given what
I am sure will be--you have already said is a problem in
recruiting realty specialists, whether it makes sense for you--
I would like you to try to figure this out--at least for the
time being you think these people will remain at GSA. Let me
give you this scenario. I am now an architect someplace else,
and I want to get more of what GSA does overall as a realty
specialist. So while I know something about one part of the
agency, I want to get the others. I can spend 2 years there, I
will go back for a year or so, and then I am off here to where
people pay top dollar. Nobody is going to begrudge that
ultimately, but in terms of the need for realty specialists,
the difficulty that you are encountering now you will continue
to encounter.
I wonder whether or not--I literally ask this as a
question, I have no idea the answer, and I have no idea where
to find realty specialists, but I am wondering whether or not
it would be useful to the agency to say that this program--
that those who get first druthers on this program will be those
who make X commitment. I can't tell you what that should be.
We do it in the Federal Government all the time. This is
in-kind training that is very valuable. What we do is very
different, you know. It may have to do with paying parts of
loans in order to encourage people to go to some places in
order to practice one or another profession like nursing or
something of the kind.
So I am very roughly analogizing to see, one, whether this
is necessary, or whether you get the realty specialists from
someplace else, and whether or not this would be a useful thing
to do, not excluding others, but trying to retain this
expertise where it might be particularly valuable.
Mr. Winstead. I would be happy to get you--for the 560 I
referred to, I would be happy it to get you a breakdown of
their tenure, which ones have participated in the intern
program and returned to the realty function, and I will get
that information to you. But I think it is going to continue--I
think the market, obviously the commercial market, is cooling a
bit. The residential market has fallen out. I think the reality
is the temptation, hopefully, on the near term might be more
encouraging to stay than to head to the private sector.
Ms. Norton. Since I am not dealing with the near term, but
dealing with what Federal policy should be generally----
Mr. Winstead. We will be happy to get that down and get to
you what we have in place in terms of those requirements and
how many are staying with GSA versus going out. And we can get
it for the Chief Architect's Office, the engineers and
architects and designers.
Ms. Norton. I am going to ask only one more question. I am
going to submit questions, additional questions to all of you.
As you will see, my modus operandi is not to ask questions and
have staff look at the transcript. I don't know anything about
the things I have been asking you. So I am trying, in my own
role as Chair of the Subcommittee, to understand what it is you
do. I am not a very good person for staff simply to put
something on my desk and say, you sign here, Eleanor. So I got
to have at least some sense, and I don't know how to get it
outside of the inside here if I don't learn by asking questions
of those who come before me in the Subcommittee. Rarely am I
trying to get the agency on something, because if we knew about
that, we would call the agency and not simply use a hearing.
I need to know about contractors supervising contractors.
This has been an endemic problem in the government, and we see
it in Oversight and Government Reform and huge and horrid
abuses. Above all we have been impressed by the fact that the
government does not--perhaps you do--have the resources to
supervise the contractors. So they can't supervise the
contractors in the first place, and then they have contractors
that don't supervise supervising other contractors. Why should
I have any confidence in that kind of process?
Some of the testimony--I forget who mentioned this, or Mr.
Grunley told us among those who mentioned contractors
supervising contractors. First of all, I want to know about the
process, and then I want to know what, if anything, can be done
about it.
Mr. Grunley. The process has been where GSA has not had the
staff to have day-to-day inspection and project management on
the job sites, they have hired large firms that provide
manpower. I have found that the manpower is extremely competent
in most cases. And where it has worked the best is where there
is still a strong contracting officer or a project exec for GSA
who has the oversight that will set the rules straight very
early on what they are looking for, that they are typically
looking for.
Ms. Norton. Has there been sufficient contract officers?
Mr. Grunley. Excuse me?
Ms. Norton. Has there been such oversight?
Mr. Grunley. Absolutely. Especially the last few years.
Ms. Norton. For large projects you have found for
construction projects there has been a contracting supervisor--
--
Mr. Grunley. Working for GSA on our job site.
Ms. Norton. Right. So what about the contractors'
supervision of other contractors? Are you satisfied with that
as well?
Mr. Grunley. Yes, and especially the last few years. When I
first saw this was in the mid-1990s. We were actually doing a
job in Baltimore, not for the National Capital Region. And
there was three employees that worked for the construction
manager, and there was nobody on site for GSA, and we felt
these people ran over us and around us and everything they
could do.
Ms. Norton. I am asking this question out of your own
testimony, where you said that--and I don't have the sections--
where you mentioned that it was a problem, although not for
you. And we understand that you are a big contractor, sir, but
in your experience it had been a problem of contracting,
otherwise I wouldn't be raising it. I don't know anything about
contractors supervising, so I got to have got it from
somewhere. So would you talk to us about the experience of
others then?
Staff brings to me the page, and it is not numbered in your
testimony so I can at least know what I am asking. What you say
is the approach is necessary in order to assure the government
that construction activities are being performed and documented
in accordance with the contract requirements. However, what
seems to have resulted from this approach is an increase in
general contractor staffing necessary to be responsive to CM
staff assigned to the project. My sense is that we may have
taken this approach to a point where there is a loss of
efficiency and improvement can be made.
Mr. Grunley. This is my personal opinion. The construction
management firms that are being hired to do that work are very
large firms. They are doing work for GSA and other government
agencies all over the country, and it is very important for
them when they get a contract to do a wonderful job. In doing a
wonderful job, they look to have larger staffs. They will go
back to GSA and say, we really think we need a safety officer,
we need two more inspectors, whatever the issue is. Sometimes
they are granted those larger staffs, and other times they are
not. When they increase their staff, we tend to need to have to
increase our staff because of just additional oversight.
That is the lesser problem than we have had, and we do not
have this issue with GSA, we have it with other Federal
agencies, where they have hired who I consider to be abusive
construction managers, who I think--and they do not have the
mission of the Federal Government. They have a mission to beat
up on the contractor. We do not see that at GSA, though.
Mr. Winstead. Madam Chair?
Ms. Norton. Yes, Mr. Winstead.
Mr. Winstead. The increased use of the CMC, construction
management contractor, option has since the beginning of the
1990s increased a lot, but basically they are on site. We have
a project manager who is a full-time GSA employee to assure
quality assurance by the contractor and the building. They
don't actually supervise the contractor.
I think what Ken is complaining about is that because of
our increased use of CMC, because we find that we can manage a
very complicated project, looking at cost implications of a
major courthouse by the expertise in the private sector, what
he is concerned about, I think, is the fact that our increased
use of it means there are more people on the quality assurance
task than there were before, and then he needs more people to
respond to their questions and work with them. So I think it
has increased the burden----
Ms. Norton. I see the issue, particularly having sat on
oversight and reform hearings, except that it is hard for me--I
understand what you are saying. I am going to give you an
example in a moment that I think either may show this is
valuable, or that it didn't happen in the example I cite.
The problem that the Federal Government has faced in recent
years is essentially that nobody was supervising large
contracts. Huge, terrible headlines everywhere. Some of this
came from Iraq. Some of it came here, because the Government
Oversight and Reform is about that, oversight of every Federal
agency. We have had before us, you know, DOD, the State
Department, you know, some of these with the most horrendous
stories.
So here I am, and the contractor says, look, GSA, we have
to hire more to respond to their hiring more of these
construction managers. But what it says to me is that for these
large contracts, you are doing what we have found is absent
very often in very large contracts of the Federal Government;
that is to say, not putting that money out there and having
nobody on staff with the expertise who is supervising.
Yes, more, that means more cost, I guess, passed on to the
government, but what we have found in these oversight hearings
is very frankly we would rather incur the costs because of the
really horrible--I can't even begin--they range from straight
out stealing and fraud to inefficiency that makes GSA look like
the picture of efficiency. Left to their own devices, people
spend money on--wow, on things that the taxpayers have found
shocking in my oversight hearings. So it may be as long as you
pass this, and I bet you do, the costs, on to the Federal
Government, Federal Government Oversight and Reform is asking
for that rather than to lose, I am telling you, billions of
dollars for failure to give appropriate oversight.
Mr. Winstead. Madam Chair?
Ms. Norton. Go ahead.
Mr. Winstead. I would mention the Grunley firm has a very
strong presence in a growth market, as I view it, and that is
the renovation of these older buildings. I mean, they have done
the Department of Interior, they are doing the EEOB, and that
work can be much more complicated than a new field office of
the FBI or a new branch office under lease-construct for SSA.
Obviously, the security issues at the EEOB and Interior--
obviously at EEOB are huge. And so that is also----
Ms. Norton. Historic problems.
Mr. Winstead. --that is why we on quality assurance and
contract----
Ms. Norton. Are you saying you want it there, but not in
other places?
Mr. Winstead. I think there are ways that we can--look,
this is the first time with this testimony this morning, quite
frankly, I have heard concern by him about this issue of we
have got more CMCs, and I am having to hire more, so obviously
that is reflected in his cost. And we ought to look at that and
see what that pairing is----
Ms. Norton. Good.
Mr. Winstead. --and figure if it is effective or not. And
we will be happy to do that.
Ms. Norton. Can I give you this example? I don't know if it
is even relevant to CMC. I am over at DOT on another matter
altogether. An employee comes out and says, oh, my goodness,
what are we going through? They moved us all out of a floor or
so of DOT, and they completely are redoing how it is set up.
And she said, oh, my Lord, we are in a new building, and now we
are doing--and this is just a few weeks ago.
And I had somebody from the agency there, and I said, what
is she talking about? They said, well, there were, you know, in
order to--there were some spaces that were too small, there
were some spaces--they were finding that out now.
Why is it they are finding that out, Mr. Winstead? I guess
I should just put it that way. I said, who is paying for it? I
sure hope the contractor is paying for it.
Mr. Winstead. In the case of the DOT, they are still
finishing out some work on several floors there. And I think
what DOT's requirements were in their housing plan was to us in
advance. We had a good project manager working with JBG, who
was the lease construction firm, but there were some issues in
terms of the tenant agency changing some space configuration
essentially after the fact. So we have been trying to work with
that and trying to get it done.
So I think that is what you saw was the work that is still
being finished out at DOT. And Bart and I were just over there
talking to the Federal Highway Administrator about his section
of that building.
Ms. Norton. Part of what I was told is that there was--and
this may be related to what Art said about the time between the
lease and its execution, that people are wanting to get into
the building. And so it rings true when you say something
about, well, you know, some of this stuff wasn't really
completely done. I suppose--and trade-offs are what we have to
be ready for. I suppose I would rather take--particularly with
the agency rapidly wanting to move in, I would rather take that
kind of trade-off than to have a long lag time between
execution of the lease and signing of the lease if that was the
reason.
What would bother me is after-the-fact changes that you
just mentioned by the agency. Why should the agency, which, in
the case of this building and any other I can think of, had an
enormous amount of time to consider what it needed and has
built a huge building out there, why should it be allowed to do
after-the-fact changes?
Mr. Winstead. Well, number one, you know, we had a--part of
the balance and part of the enforcement of that contract is
obviously not to cost either the agency or the government more.
But the reality was there were some subsets of DOT, some of the
modal groups within like highway or transit, that took--they
took longer getting their requirements in. And that is what has
led to this. I can get for the Committee from NCR exactly what
those costs have been.
Ms. Norton. But could they have done that and you sign a
lease? I mean----
Mr. Winstead. Yeah. I mean, the reality is, had we gotten
all the requirements vetted early enough from the tenant
agency, some of this would not have occurred. That is the
reality.
Ms. Norton. Well, Mr. Turowski, is there, in your
experience, outside and inside, is there a way to somehow have
called the question at a point in time? Or are these changes
just inevitable no matter what happens and the Government just
needs to be prepared to absorb the cost?
Mr. Turowski. Well, lease changes in a building in excess
of 1 million square feet are fairly difficult to avoid,
particularly given the time from the, I believe--and I am going
on memory here, recollection--particularly in projects of that
size from the creation of the original program requirements,
which can be up to 3 years later when the space is being built
out. So that is a bit of an unusual circumstance, I would say,
or atypical.
Ms. Norton. The lesson there is, of course--and here you
have dealing with more than one agency in the building; is that
right? Department of Transportation--is Federal Transportation
Agency in the building?
Mr. Winstead. It is all occupied. The million three square
feet are all occupied by the DOT.
Ms. Norton. Who is paying for the changes?
Mr. Winstead. Oh, who is paying for the changes? Basically
it is within--it would be under our contract lease agreement
with JBG, and we would be responsible and the tenant agency.
Ms. Norton. So the tenant, namely the Department, is paying
for it out of its agency budget, right?
Mr. Winstead. Yes.
Ms. Norton. So the Government is paying for it.
Mr. Winstead. That is correct.
Ms. Norton. It was not a mistake on the part of the
contractor?
Mr. Winstead. No.
Ms. Norton. And I do understand what Mr. Turowski was
saying. We really don't expect perfection in this process. And
we all expect some losses on both sides. For example, the
competition means, you know, it is your risk. If you get the
contract, you know, you got it. If you didn't, it is the risk
you take. But I don't want to accept the risk of everybody
signs on and somebody over here is just not signing, even
though he doesn't have anything to do with the lease. And I
don't want to take the risk of the time between the agency
signing and GSA signing is excessive. So I am trying to measure
the differences.
Let me say that there are a lot of things that I would have
asked about simply to establish that GSA is doing a very good
job in some respects. Some of them--I mean, Mr. Grunley had
mentioned best value, which I have looked at for some time. And
it does seem--you know, having moved from lowest bid to best
value, looking at how it is done, it is done fairly. I have
seen GSA oversee the certified apprenticeship program. I have
some terrific misgivings, but I am going to be working with GSA
on that. It was very important. The certified apprenticeship
program is really not simply about getting work. Most of these
apprentices won't come from--certified apprentices, certainly
won't come from the people in my district who need it most.
But if you look at what the best contractors want, they
really do want the people who have had that kind of training
and are not working with people who have thrown together
apprenticeship programs. And then you get somebody who really
doesn't know how to do the job.
In working with GSA for--we have heard good things about
construction manager as opposed to no oversight, know about the
cost, we understand the tradeoffs. Some tradeoffs we are
willing to accept.
We heard about security. And I am on Homeland Security. I
also represent the District of Columbia. I don't lightly tread
on that. I am not satisfied that GSA is the leader there. There
is every indication that who leads the band are the people
whose only mission is security. And that is very bothersome to
the Subcommittee. We are going to be looking at what we can do
about that. It may take some statutory changes; it may take
other kinds of changes.
And because of my long experience with GSA, I still regard
it as the repository of extraordinary expertise available
nowhere else. I also see it dwindling, going, retiring. I am
very concerned about it and doing all I can. That is why you
hear me talking about the intern program. I would like to see
it expanded. It is in the best interest of the Government.
I am not going to be able to get that done unless I can
assure the Government, as the Government has required, on, for
example, the substitute it gives for doctors, lawyers and
Indian chiefs to go to certain places in the country. If I can
assure the Government, I think I can get some kind of trade-off
there, so you don't have just six, you begin to replenish the
supply.
Because today for, let's say, a young person interested in
real estate work, the question is, shall I go with Mr.
Turowski's company, Mr. Grunley's company, or the GSA? I will
tell you what. If they take very bright people that just
graduated, have some interest, it is no contest; the Government
isn't going to get them. So one of the things the Government
has to say is, what is it that could make people want to come
here? Or with respect to those people who work for GSA and
could then go off, not simply come here to this division, get
expertise and then fly off to the Federal sector.
I want to thank each and every one of you for bearing with
me so long while essentially I was engaged in a training
exercise for myself and the Subcommittee. And I promise that
you will see the results of this hearing.
Thank you very much. The hearing is adjourned.
Before it adjourns, excuse me, I do want to submit for the
record the opening statement of the Ranking Member.
Ms. Norton. And I do want to say that the Congress went out
of session yesterday. And so the Ranking Member, like every
other Member of Congress except me, could be expected to return
to his own constituents. And I appreciate that Mr. Graves, in
fact, is just as interested in this matter as I am and has left
his own opening statement in that regard.
Now the hearing is adjourned.
[Whereupon, at 1:56 p.m., the Subcommittee was adjourned.]
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