[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
 GENERAL SERVICES ADMINISTRATION'S FISCAL YEAR 2009 CAPITAL INVESTMENT 
                          AND LEASING PROGRAM

=======================================================================

                               (110-152)

                                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

                               __________

                             JULY 11, 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
NICK LAMPSON, Texas                  DAVID G. REICHERT, Washington
ZACHARY T. SPACE, Ohio               CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              JOHN R. `RANDY' KUHL, Jr., New 
BRUCE L. BRALEY, Iowa                York
JASON ALTMIRE, Pennsylvania          LYNN A WESTMORELAND, Georgia
TIMOTHY J. WALZ, Minnesota           CHARLES W. BOUSTANY, Jr., 
HEATH SHULER, North Carolina         Louisiana
MICHAEL A. ARCURI, New York          JEAN SCHMIDT, Ohio
HARRY E. MITCHELL, Arizona           CANDICE S. MILLER, Michigan
CHRISTOPHER P. CARNEY, Pennsylvania  THELMA D. DRAKE, Virginia
JOHN J. HALL, New York               MARY FALLIN, Oklahoma
STEVE KAGEN, Wisconsin               VERN BUCHANAN, Florida
STEVE COHEN, Tennessee               ROBERT E. LATTA, Ohio
JERRY McNERNEY, California
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
VACANCY

                                  (ii)

  
?

 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

        ELEANOR HOLMES NORTON, District of Columbia, Chairwoman

MICHAEL H. MICHAUD, Maine            SAM GRAVES, Missouri
JASON ALTMIRE, Pennsylvania          BILL SHUSTER, Pennsylvania
MICHAEL A. ARCURI, New York          SHELLEY MOORE CAPITO, West 
CHRISTOPHER P. CARNEY,               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

Winstead, David L., Commissioner, Public Buildings Service, U.S. 
  General Services Administration................................     3

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Altmire, Hon. Jason, of Pennsylvania.............................    39
Graves, Hon. Sam, of Missouri....................................    40
Norton, Hon. Eleanor Holmes, of the District of Columbia.........    45
Oberstar, Hon. James L., of Minnesota............................    48

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Winstead, David L................................................    50

                       SUBMISSIONS FOR THE RECORD

Winstead, David L., Commissioner, Public Buildings Service, U.S. 
  General Services Administration, responses to questions from 
  the Subcommittee...............................................    58

                        ADDITIONS TO THE RECORD

Judicial Conference of the United States, Chief Judge Joseph F. 
  Bataillon, U.S. District Court for the District of Nebraska, 
  Chairman, Committee on Space and Facilities, written statement.    71

[GRAPHIC] [TIFF OMITTED] T3598.001

[GRAPHIC] [TIFF OMITTED] T3598.002

[GRAPHIC] [TIFF OMITTED] T3598.003



GENERAL SERVICES ADMINISTRATION CAPITAL INVESTMENT PROGRAM, FISCAL YEAR 
                                  2009

                              ----------                              


                         Friday, July 11, 2008

                  House of Representatives,
    Committee on Transportation and Infrastructure,
Subcommittee on Economic Development, Public Buildings and 
                                      Emergency Management,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:06 a.m., in 
Room 2167, Rayburn House Office Building, Hon. Eleanor Holmes 
Norton [Chair of the Subcommittee] presiding.
    Ms. Norton. I want to welcome all.
    I want to begin by putting the opening statement of the 
Ranking Member, Mr. Graves, in the record.
    Ms. Norton. Welcome to everyone, especially the Public 
Buildings Service Administrator, David Winstead, to today's 
hearing on the GSA Fiscal Year 2009 Capital Investment and 
Leasing Program.
    The program represents a wide variety of agencies located 
throughout the United States in need of office space and 
facilities to further their mission. Since I have been a Member 
of the Subcommittee, which is since I have been in Congress, 
this annual hearing has often had a perfunctory and 
bureaucratic quality.
    However, I believe an annual request for funding provides 
an opportunity and an obligation to review the agency that is 
requesting more taxpayer dollars. This Subcommittee's oversight 
of the program this year will feature the necessity for GSA to 
think more self-critically and innovatively about the need for 
comprehensive reform about the agency's leasing and 
construction processes, with particular focus on making both 
more efficient and less costly to the Federal Government and 
the private sector alike. We are particularly disappointed that 
GSA has failed to use the authority to pursue innovative deals 
for construction on Federal land that Congress passed in 
section 412 of P.L. 110-447, the Omnibus Appropriations Act of 
2005, for more efficient approaches to construction contracts. 
The Subcommittee will not continue to tolerate GSA's reluctance 
to examine all the options available to bring construction and 
leasing processes into the 21st Century.
    GSA has submitted a request for $620.1 million for 
construction projects in fiscal year 2009. The largest project 
is an amended prospectus for $331.3 million for the 
consolidation of the Department of Homeland Security 
headquarters on St. Elizabeth's campus, an acquisition of a 
parcel of land for site access. The construction portfolio also 
includes funds for two land ports of entry at San Diego, and 
Portal, North Dakota. The fiscal year 2009 repair and 
alteration programs are about $692.3 million for work to be 
done on several projects, including the Eisenhower Executive 
Office Building, Phase III, Dirksen United States Courthouse, 
Chicago, and the West Wing Infrastructure Systems Replacement.
    The 20 leases in the fiscal year 2009 lease package include 
leases for the Internal Revenue Service, the Federal Emergency 
Management Agency, Department of Health and Human Services, 
Department of Interior, Department of Defense, Department of 
Homeland Security and the Federal Aviation Administration. The 
2009 Capital Investment Program is relatively small measured 
against past fiscal years. In recent years, the construction 
program has been reduced to special-use spaces, such as land 
ports of entry and courthouses, but very little general purpose 
office space. The Subcommittee is concerned that recent trends 
towards leasing buildings because of neglect of valuable 
federally owned property has led to a steady shrinking of the 
Federal Building Fund, which in turn limits the Federal 
Government's capacity both to maintain existing buildings and 
to construct new inventory. When Federal agencies make rent 
payments to the Federal Building Fund, it operates as a self-
replenishing revolving fund, generating income for the Federal 
Building Fund to the greater benefit of all Federal agencies 
under GSA control.
    Our major concern centers on Federal tenants leaving 
buildings owned by the Federal Government for leased space with 
a resulting loss of vital income to the Federal Building Fund. 
Last year the GSA submitted three prospectuses to move from 
federally owned sites to leased space. In particular, GSA 
allowed the National Archives and Records Administration 
building in St. Louis to go from disrepair to disintegration. 
And then GSA focused on the relative expense of rebuilding 
versus leasing new space when the failure was years of neglect 
of the Federal building. Making repairs is a much higher 
priority when the inevitable prospect is loss of Federal 
occupancy of a Federal property would help resolve continuing 
losses to the Federal Building Fund. We declined to approve the 
Billings, Montana, Courthouse prospectus, which sought to move 
from a government-owned courthouse to a leased courthouse. As a 
matter of security and policy, the Federal Government always 
requires courthouses to be built and housed on Federal 
property. The courthouse proposal vividly highlights the 
distressing portrait of the condition of an essential 
government function.
    The health of the Federal Building Fund is also threatened 
by the reduction of real estate experts at GSA because of 
retirement and inability to attract the necessary new talent. 
Lack of expertise has led to serious problems, such as so-
called holdover leases. In this case, the lack of trained GSA 
personnel is leading GSA to unfairly sit on leases rather than 
finding new space or renewing existing leases. In turn, Federal 
leaseholders in today's tight credit market are stuck with 
stagnant rent rates, making it difficult to get necessary 
financing for repairs for the Federal tenant or, alternatively, 
to get a private tenant.
    The Subcommittee must help GSA analyze the root causes of 
these and many other agency problems and must require GSA to 
pursue feasible steps to attract the personnel needed to 
accomplish the agency's mission. The Subcommittee initiated 
reform itself with our first hearing this session on February 
27, 2007. The Subcommittee held a hearing on GSA's delineated 
area policy, resulting in the provision we now require that 
directs GSA to inform the Committee when the delineated area of 
a prospectus is not the same as the solicitation area. The 2007 
hearing showed that agency abuses of the delineated area 
process had resulted in redlining an area or space shopping 
here and elsewhere with greater cost to taxpayers and needless 
cost and delay to the private sector. The change that we 
required has already had desirable effects and can lead the way 
to true reform at GSA.
    The Committee intends to retain this provision, but it is 
at best a tiny step toward reform and hardly represents the 
wholesale reform that GSA requires. To set the table for 
comprehensive reform, the Subcommittee held a hearing on June 
8, 2008, on the GSA leasing and construction processes and the 
necessary steps to make both of them efficient and, thus, less 
costly for all concerned. The Subcommittee is in the process of 
thinking through changes that the June 8th hearing demonstrated 
were necessary for the GSA leasing and construction processes.
    We look forward to hearing testimony about the 2009 GSA 
Capital Investment and Leasing package before the Subcommittee 
today.
    Ms. Norton. I am pleased to hear from Mr. Winstead.

TESTIMONY OF DAVID L. WINSTEAD, COMMISSIONER, PUBLIC BUILDINGS 
         SERVICE, U.S. GENERAL SERVICES ADMINISTRATION

    Mr. Winstead. Chairman Norton, thank you again for holding 
this hearing. I am pleased to be back.
    I remember our June 6th hearing on the leasing program of 
GSA, and I also take into account your comments and concerns 
and interest to this Oversight Committee to help us do our job 
better for our Federal tenants, and I am pleased to be here 
again.
    I would like to ask that my full testimony be submitted for 
the record. And I would also like to thank the Committee staff 
and our GSA staff behind me for the work in preparing for this 
hearing and the prospectus proposals.
    As I mentioned, PBS is very proud of its record in terms of 
operating performance this year. If you look at the second 
quarter of fiscal year 2008, 81 percent of our government-owned 
assets are yielding a positive fund from operation, and that is 
rent minus expenses. And the percentage of vacant spaces at 
4.4, and Madam Chair that compares to about 12 percent 
nationwide given the state of the real estate industry in most 
of the urban markets. In addition, we are operating below, in 
terms of the operating costs, on 1.6 percent below the industry 
average in operating costs of cleaning, maintenance, and 
utilities.
    Before I address the fiscal year 2009 capital program for 
GSA, I would like to share several accomplishments that I think 
address some of the concerns that you have mentioned this 
morning and this Committee's continued interest in terms of our 
relationship with critical contractors, in addition to the 
challenges which we are having with our clients.
    First, I would like to mention that, in response to the 
increase in leasing that you have referred to and the hearing 
on June 6th dealt with, we have established a new office of 
real estate leasing acquisition. Our new director of that is 
behind me, Chip Morris. And I think, given the volume of 
leasing and the complexity of this work and the significant 
stakeholder interest in terms of rent and budgeting, we have 
made this really one of our top priorities. And this new office 
will continue to focus on improving the real estate leasing 
program for GSA, both in the National Capital Region and the 
other ten regions around the country.
    We are looking for increased, obviously, resources and 
staffing, as you have mentioned in terms of your concern on 
training of realty specialists, consistency between regions and 
efficiency in terms of the time it takes to execute these 
leases, and I believe that this new office will add value in 
that regard.
    Secondly, we are strengthening our Construction Excellence 
Program within the Office of Chief Architect at GSA and 
focusing really on issues, such as project estimating, which 
has been an increasing challenge over the last 3 years with 
market material increases of 9 percent, averaging almost 27 
percent over the last 3 years. We have new systems of project 
variance and tracking. We are also looking at project execution 
across the country.
    And I will acknowledge Bill Guerin our new assistant 
commissioner for construction excellence is with us today. And 
we are seeing, as you have alluded to, some differential in 
terms of competency in project managers around the country and 
adequacy of staffing in certain areas. But we are addressing 
it, I believe, very aggressively, and I know this interest to 
the Committee is very clear in that regard.
    A recent survey of our major clients, the courts, FBI, IRS, 
DHS, VA, and others, through our 11 regional offices, we really 
continue to try to develop national business plans to deal with 
these tenant agencies. And I hear from the IRS and the FBI and 
the courts and others that this national perspective in 
customer approach is really helping them react as they are 
trying to manage their budget and allocation of rent 
nationwide.
    Lastly, we continue in a state of new IT tools and new 
approaches to better managing projects and lease actions. We 
continue to develop new IT tools, such as our eLease, which is 
in development and utilization now; Transaction Management 
Playbook, which is our inventory system of really what the 
status of projects are throughout the country. We have got over 
200 in the development pipeline at the Chief Architects Office. 
Also the application of BIM, Building Information systems. 
Given these management approaches, as well as our increased 
portfolio on these, I am really pleased to say that, if you 
look back on what we are focused on, both leasing, construction 
and better business and better client relations, I am pleased 
to say that I think the request for authorization for 
individual projects as a part of our Fiscal Year 2009 Capital 
Program will not only meet the needs of agencies but be well 
administered.
    The projects that are in our fiscal year 2009 program have 
been analyzed. We have analyzed these projects. We have met 
with staff of the Committee and determined that they are 
consistent with overall portfolio objectives, which are 
primarily to optimize the value of owned inventory, some 1,500 
buildings that GSA owns around the country; direct capital 
resources primarily towards performing assets; and developing 
work and disposal strategies for underutilized or nonperforming 
assets; maintaining the continued functionality of our 
buildings; safeguarding the health and welfare of tenants and 
occupants; providing quality work space in support of mission-
critical goals of Federal agency tenants. And we have focused a 
lot in the last two years about a new work place initiative.
    We also have been--you had a hearing on this, Madam Chair--
about achieving energy efficiency and trying to meet the goals 
of the Energy Policy Act of 2009 and the recently signed Energy 
Dependence Act of 2007, as well as fulfilling the 
responsibility we have under the National Historic Preservation 
Act for over 400 historic buildings in that 1,500 building 
inventory. We continued to focus on these 1,500 federal 
buildings as well as our leased actions which have a 
replacement value, if you look at our GSA inventory, of about 
$39 billion. And we are requesting as a part of the capital 
program today a repair and alteration program of about $692 
million to maintain and approve these properties that are in 
the inventory for which there is a defined long-term Federal 
need and capable of self-sustaining those buildings at about 6 
percent return, which is our benchmark hurdle rate.
    The highlights of GSA's fiscal year 2007 repair and 
alteration program includes $350 million for basic program; $91 
million for limited scope program; $215 million for major 
modernization; and $37 million for the energy program.
    Before we utilize the finite revolving fund, Federal 
Building Fund resources, we evaluate and rank our repair and 
alteration proposals based on the following criteria; financial 
return and lifecycle cost of the buildings; projected project 
timing and execution risks; physical urgency, based on building 
condition; and customer urgency, based on mission requirements 
and overall satisfaction levels. So the projects before you and 
the Committee today have passed these criteria and reflects, we 
feel, sound investments of taxpayer dollars in the Federal 
civilian portfolio that GSA manages.
    One key section I would like to call your attention to also 
is the energy program, which is a small but really crucial part 
of our repair and alteration request. As you know, the 2007 
EISA Act sets aggressive goals for the Federal Government and 
GSA. I think we have addressed this in a Committee hearing 
about the role that GSA is playing. Before 2010 fiscal year, we 
are required to reduce consumption of fossil fuel emissions in 
new buildings. By 2030, as you well know I think, we are 
totally to be eliminating fossil fuel consumption in new 
buildings. This recent act accelerates the rate at which we 
must reduce energy consumption in our inventory as a whole to 
about 3 percent a year. So these funds that we are requesting 
in this category will go a long way, this $37 million, to 
implement individual energy and water retrofit projects and 
government-owned buildings during fiscal year 2007.
    GSA is currently identifying energy and water retrofit 
projects required through surveys and schedules of these 
buildings, and they are being prioritized in terms of 
installing high-energy HVAC systems, lighting controls and 
variable air flow systems, as well as building automation 
control systems. We are estimating that annual savings of about 
$6 million resulting from projects where we are applying this 
energy funding for fiscal year 2009 alone.
    Under new construction we are requesting $620 million. This 
request includes funding for site acquisition, design, 
infrastructure, construction and maintenance of inspection 
costs at six Federal facilities. PBS traditionally pursues a 
construction and ownership solution for special purpose in 
unique Federal buildings that are not readily available in 
local real estate markets through leasing. In addition, we 
recommend new construction where there is a long-term need not 
given locally and also, obviously, specialized facilities, such 
as courthouses and border stations.
    You well know GSA is working with the Department of 
Homeland Security to consolidate its headquarters in the NCR. 
We have gotten funding from both the House and the Senate for 
that project. DHS's current facilities are dispersed among some 
50 locations around NCR. And this has adversely impacted the 
communications, coordination, and efficiency of DHS. Madam 
Chair and I heard this firsthand from Secretary Chertoff at a 
visit to St. Elizabeth's a couple of months ago. A unified 
secure campus putting together DHS's senior leadership will 
fulfill their command-and-control functions as well as their 
mission, and we are very pleased to see the House and Senate 
actions in this regard.
    A quick highlight of the Fiscal Year 2009 New Construction 
Program include $331 million for the Coast Guard Headquarters 
at St. Elizabeth's; $79 million for the Food and Drug 
Administration consolidation White Oak, and that project is 
going extremely well and the Commissioner of the FDA, von 
Eschenbach, is very pleased with both the on-track as well as 
the environment that that is creating for FDA employees; $19 
million for infrastructure improvements at St. Elizabeth's West 
Campus and the Denver Federal Center; $7 million for 
acquisition off additional egress of the West Campus; and $74 
million for design and construction of two land port of 
entries.
    In addition, we are entering into a fairly healthy leasing 
program overall; leases in some 7,100 locations. Our total 
lease inventory is 176 million square feet. We are managing 
that leased action inventory very effectively, and we currently 
have only 1.5 percent vacancy in our leased inventory when the 
national average is about 12 percent.
    This year we have submitted 20 lease prospectuses for this 
Committee's consideration. This submission represents about 
half of the above prospectus level lease requirements for 
fiscal year 2009. Due to the volume and complexity of these 
programs, we will submit at least one more set of prospectuses 
separately for you and the Committee's considerations.
    In conclusion, Madam Chair, I would like to mention that we 
are very proud of the progress we are making. We do acknowledge 
the concern in the leasing area as well as in the speed and the 
construction procurement area. But I would like to mention that 
a lot of effort has been put, in addition to leasing, on 
portfolio management over recent years. I will be happy to 
submit for the record our new fiscal year 2007, "State of the 
Portfolio," which sets out those accomplishments. And in fact, 
in terms of disposal of facilities, which we got under the 412 
authority, we have, as a result of disposal of some 271 assets 
in recent years, we have had a cost avoidness of about $600 
million. Also, design excellence continues, I think, to be 
refined to focus on design cycle times and reduce that, which 
both the courts and the CDP are very pleased about. And I will 
tell you that we are making progress in the Design Excellence 
Program as well.
    We will also continue to work with this Subcommittee in the 
areas that you have expressed concern. To capitalize on the 
requirement of our aging inventory and growing needs, we have 
over $7 billion of reinvestment we need in our 1,500-building 
inventory. We do continue to restructure the portfolio and will 
continue to do so.
    . But I also wanted to mention, Madam Chair, as I did 
before the hearing to you directly, that we, as a result of the 
June 6th meeting, hearing, we had on leasing with some industry 
experts, as well as construction and building owners and 
managers, we have responded to that QFR, and we do have those 
submittals to come into the Committee. They should be up here 
momentarily. I would mention that they do address one of the 
issues in the June 6th hearing that I wanted to make sure we 
follow up on; our specific recommendations in terms of how we 
might, with the Committee's support, look at authority, look at 
legislative options to improve both the leasing program and the 
speed in which we are moving lease and construction projects 
through our schedule.
    So, with that, Madam Chair, I would be pleased to conclude 
my remarks and be happy to answer any questions the Committee 
may have.
    Ms. Norton. Thank you Mr. Winstead.
    As you know, first, let me say how pleased I am that the 
National Leasing Office has been set up. This has been one of 
the priorities of this Subcommittee for some time. If there is 
any interest in cost reduction it has got to begin, as you have 
now done, with the National Leasing Office. And I want to thank 
and commend the agency for setting that office up by the time 
you had this annual hearing.
    And you obviously report some other good steps you have 
begun to take. We are very pleased with those.
    Let me ask you directly about the program submitted today, 
the construction costs of the border stations. It seems 
particularly high. Can you explain those very high, $486 per 
square foot in San Diego, for example. Even in North Dakota, 
$404 per square foot. Can you explain those very high per-
square-foot costs in border stations?
    Mr. Winstead. Madam Chair, with the Portal border station, 
we had a pre-construction meeting just this month. And looking 
at those cost estimates, obviously, that is a very rural site--
--
    Ms. Norton. Very what?
    Mr. Winstead. It is a very rural site in terms of 
availability of materials and contractors. But we----
    Ms. Norton. Which one are you talking about, both of them?
    Mr. Winstead. No. Obviously, Portal. San Ysidro is quite 
populated on the southern border south of San Diego. It is a 
very large community.
    But the two are distinguishable in that the Portal is a 
not-very-populated area. We allocated $20 million in 2006 and 
requesting another $15 million. And the reason the per-square-
foot cost is, quite frankly, just the availability of competent 
contractors and material costs in that part of the country. We 
do not have the availability. And also the highly purposed and 
specialized use of the ports of entry. We have tried to, over 
the last 2 years in meetings with CBP, we have been trying to 
shorten the design cycle for our ports of entry. Because what I 
found when I came on as commissioner over 2 years ago, I saw 
that our design cycle for these relatively small ports was 
taking over 2 years. And so we were dragging out entering the 
market a year longer than we really needed to. And as I 
mentioned in my testimony, material costs have been going up 9 
percent a year for the last 3 years. So in the Portal 
situation, I think, and we can get the Committee more 
information on pre-bids, but it is really a rural setting. And 
what I have heard, it has been very difficult to get the 
materials and basically the economics of available materials 
and construction is much more costly in that area.
    In terms of San Diego, we have a very, very complicated 
project there. It is the biggest port of entry in the country. 
We have some 50,000 vehicles going through it daily. We are 
actually acquiring 17 acres of site. The huge number you see is 
really the site acquisition.
    Ms. Norton. The cost of land is----
    Mr. Winstead. Is very high in that area. I mean, San Diego 
was one of the highest-growth markets.
    Ms. Norton. And North Dakota, this rural area, is just as 
high as in San Diego?
    Mr. Winstead. No, clearly not.
    Ms. Norton. But the costs are pretty close?
    Mr. Winstead. They are, even though at the Portal, 
obviously, the land costs are much less; material costs are 
much more compatible with San Diego. The 17 acres are going to 
be very costly due to the price of real estate on the border in 
the largest crossing in the U.S. We are going to be demolishing 
the court in San Diego, and we are going to begin to do 
construction of Phase I in 2009. And I will tell you, it is a 
very, very complicated project. And the $59 million we are 
requesting is really for Phase I looking at the northbound 
capacity expansions for that port. I am visiting the San Diego 
port on July 24th with our Region 9 people to meet with our 
project team as well as CBP, our client, to try to obviously 
understand both the difficulties of that project as well as 
where we are in terms of the completion.
    Ms. Norton. You need to submit--I understand what you are 
saying. From what I--the notion about requiring the expertise, 
you are talking about specialized expertise to put this up, to 
put these buildings up?
    Mr. Winstead. Yes.
    Ms. Norton. I recognize, by the way, that there is a 
shortage in the construction trade. We will need to have back-
up information to be able to understand, though, these very 
high costs. I am not sure I understand the cost of land in, for 
example, North Dakota being factored in here so we get to $404 
per square foot. I am not sure why those should be so close.
    Mr. Winstead. We would be happy to give you both the 
acquisition value of the land as well as material allocations 
for those two projects.
    Ms. Norton. Where do you buy the land from?
    Mr. Winstead. Sorry?
    Ms. Norton. Where do you buy the land from?
    Mr. Winstead. The land in San Ysidro was basically 
looking----
    Ms. Norton. Who owns those two parcels of land?
    Mr. Winstead. Are you talking about North Dakota or San 
Ysidro?
    Ms. Norton. Both of them. Apparently you are having to 
acquire land. That is understandable.
    Mr. Winstead. Right. I do not know actually the ownership 
of the property. They are both in the private sector, Madam 
Chair. I mean, both the land and----
    Ms. Norton. I would like to know who owns the land. They 
saw you coming is all I can say. It really goes to my question 
about expertise. I also want to know what land in the area goes 
for.
    Mr. Winstead. Okay. We do have those estimates.
    Ms. Norton. I want to know what you paid for it, and I want 
to know comparable costs for land, just land, in the area. I am 
not sure that you could possibly have taken into account this 
economy. If anything, it may drive it up, or it can drive it 
down, so many people are looking for work. But it is very, very 
difficult. In fact, the reason that we moved forward without 
more is that we are talking about border stations. We have got 
to do it. And do you know what? Everybody knows we have got to 
do it. And we are dealing with amateurs because you don't have 
people who know how to deal with people who know the government 
is coming, and that is what we are going to be facing. So I 
just need more background, and what in the world led to this? 
If you can justify it, maybe that is the way it has to be. 
Frankly, the most interesting thing to me is the cost virtually 
in two different States, very different States, if I may say 
so.
    Mr. Winstead. No, they are. I mean, the markets are very 
different. I do have the breakdown, which we can give the 
Committee.
    Ms. Norton. You go to two East Coast States that different, 
you will not find those kinds of course. But, again, it is up 
to you to justify that within 30 days please.
    Mr. Winstead. I will be happy to.
    Ms. Norton. Let me then follow up about what looks to be a 
very serious, perhaps even a crisis, in trained personnel and 
specifically at a number of levels, but certainly realty 
specialists. Is it true, for example, that the number of realty 
specialists have been cut in half from, I don't know, 2000 or 
so, the year 2000 or so? What are the numbers?
    Mr. Winstead. Looking at--you are correct.
    In 1992, we had about 1,200 realty specialists through our 
11 regions. Currently, we employ about 526. That is up actually 
from about 500 three years ago. But we are--the realty function 
has changed, as you well know, with the incorporation of the 
national brokerage contract. But we are finding challenges, 
recruiting and keeping talented realty specialists.
    Ms. Norton. So let's go to that, since the agency was in 
great pains to contract out this service, one thing you sure 
did was to reduce the personnel there. That may have been a 
lethal blow, because you did that very quickly, and of course, 
you assured this Subcommittee that the way to do it was to 
broker out this function. Well, why then are we having the 
concerns we see everywhere?
    Mr. Winstead. Well, Madam Chair, we are in fact--the 
national brokerage contract is in its fourth year, as you know. 
And we are finding that in a large majority of the regions, it 
is working extremely well and it is leveraging, for example, 
the NCR, which you are most familiar with. The application----
    Ms. Norton. This 1,200 figure was nationwide?
    Mr. Winstead. That is correct. So the 1,200 was a 1992 
figure. Now we have about 500.
    Ms. Norton. I know. But you cut in half the personnel----
    Mr. Winstead. That is correct.
    Ms. Norton. --of an agency, you have to make it up some 
way. And of course, you said, we want to contract this out.
    Mr. Winstead. Right.
    Ms. Norton. So you certainly--the agency never informed the 
commission that there would be less work or that there would be 
new problems arising in the agency. All I want to know is, who 
is taking up the slack?
    Mr. Winstead. Well, number one, the application, in terms 
of utilization of the national brokerage contract on a 
nationwide level, is at about 80 percent.
    Ms. Norton. Say that again. What is 80 percent?
    Mr. Winstead. Eighty percent of leasing actions nationwide 
are being handled on average through the national brokerage 
contract. And what we have been trying to do since the 
implementation of the national brokerage contract is continue 
to train the realty specialists in both, obviously, the 
oversight and management of the national----
    Ms. Norton. All right. Wait a minute. The oversight and 
management of what?
    Mr. Winstead. Of the national--of the brokerage contract, 
as well as looking at property management functions, leasing, 
as well as disposal. So these 562 realty specialists, their 
role is really broadened with the support of the private sector 
and the actual finding, the best deal on the market and 
assisting us in negotiating the best lease rate for our tenant 
clients. We are also, these realty specialists are also working 
to look at the long-term housing needs and focus much more on 
the client in a long-term way.
    Now, the reality is----
    Ms. Norton. Let us now focus on the client then. The client 
is the Federal Government. The client is a Federal agency. I 
raised, among the many problems that we are aware of at GSA, is 
the problem of holdover leases. That punishes everybody 
concerned. It punishes the agency who may want that space, may 
want other space. Really, it kicks the lease holder where it 
hurts. It makes the government look like a very bad actor. Now, 
since we have got 80 percent of the work being done by these 
contracted brokers, why are we having this problem?
    Mr. Winstead. Well, I think on June 6th, I talked in detail 
what we are trying to do in the lease hold, lease situation, 
both at NCR, where we--at that point, and I know we are less 
than that now--but we had about 80 leases in the holdover 
situation. But we have actually reduced the holdover leases 
from 4 to 3 percent since the beginning of the year. So we are 
addressing the issue. But your question----
    Ms. Norton. That is an important figure.
    Mr. Winstead. --nationwide from 4 to 3 percent, so we are 
tackling the problem.
    Ms. Norton. From 4 percent to 3 percent?
    Mr. Winstead. That is correct.
    Ms. Norton. Would you kindly answer my question? Why, since 
80 percent--I am now looking to the people who you say are 
responsible, the contracted brokers; how could they possibly be 
doing satisfactory work if you have that, I believe, huge 
percentage when you understand that everybody involved is being 
penalized of holdover leases? How could you be possibly be 
satisfied with what these people are doing? I have never heard 
of this problem arising since I have been on the Subcommittee, 
at least to this degree.
    Frankly, do you know where I heard about it? Is in the 
newspapers. You know, when it hits the press, it must be fairly 
unusual. And I have certainly never heard about 4 percent 
holdover leases before.
    Mr. Winstead. Basically, we have experienced, particularly 
in NCR, but there is cases around the country of it, we have 
seen--the national brokerage contract is in fact delivering 
better deals, some 9 percent below market on average, so we are 
getting better value. The reality is that the administration of 
the lease----
    Ms. Norton. Wait a minute. In 30 days, I want a list--I am 
tired of hearing that with nobody coming forward with something 
to prove it. I want a list of what they are producing below 
market.
    Mr. Winstead. All right.
    Ms. Norton. I would congratulate them, particularly given 
the fact that you are losing expertise in the agency. But 
generalities will never fly with this Subcommittee, and that is 
not the first time I have heard that one. They are delivering. 
How many deals? How many were below market? How many were at 
market? Where were they?
    Mr. Winstead. We would be happy to provide that. We keep it 
up monthly. We review these with the brokers monthly, and we 
have that data. We would be happy to give the Committee full 
information in that regard.
    The issue on the--the staffing issue, we are working very, 
very hard to try to have training programs to----
    Ms. Norton. How do you--you have got to deal with my 
question. Holdover leases at a percentage that is totally 
unacceptable, you say the contractors are largely responsible. 
What is the reason for the holdover leases in this large 
number? All I am asking is, why? I am pleased that you are 
reducing it, but I don't understand the origin of this high 
percentage of holdover leases.
    Mr. Winstead. Well, it has been increased quantity in terms 
of the number of lease actions, as well as, obviously, we are 
responsible for getting the leases tasked to the brokers, and 
that with the fact that it is a 3 or 4 year new program, it has 
taken longer to bring realty specialists up to speed in terms 
of that tasking.
    Ms. Norton. So you have the specialists, or the specialists 
need to be trained?
    Mr. Winstead. That is correct. They have to be retrained. 
The leasing specialist is responsible, as well as the 
contracting officers, need to be trained in the use of the 
national brokerage contract. We are 3 years into it. That 
training has been done nationwide where every quarter we are 
doing regional training. We are monitoring their performance 
and evaluating the realty specialists' actions in terms of 
managing these leases.
    Ms. Norton. Of course, not having access for sure has not 
helped that whole process of getting some kind of uniform 
system of training and understanding of your own people so that 
they can have the appropriate relationship with the contractors 
who are responsible. They are not doing any of this work. It is 
the contractors who are doing it?
    Mr. Winstead. Yes, in terms of the leasing action and in 
finding the best deal in the market, yes. In terms of managing 
the brokers and overseeing the contracting, it is the realty 
specialists.
    Ms. Norton. So you think the problem is not with the 
contractors, but with the agency's slow process in getting to 
the contractors what?
    Mr. Winstead. In terms of the holdovers, clearly, it is 
getting the lease action in place, given the quantity of 
leases. And I talked on June 6th about what NCR is trying to do 
to improve that and reduce the holdovers. It is a high 
priority. And the QFR that we are giving to the Committee 
addresses specifically----
    Ms. Norton. What percentage of holdovers----
    Mr. Winstead. We have 4 percent.
    Ms. Norton. --would be acceptable do you think?
    Mr. Winstead. Well, I mean, obviously, we would like to 
reduce it down to 1 percent, but we are clearly at 3 percent. I 
think that the tolerance point is probably some 1 percent or 
minimum number----
    Ms. Norton. Are you hiring more realty specialists?
    Mr. Winstead. We are. We are trying to--we are basically 
reaching out in the market. I will tell you that, up until 
recently, the real estate market was fairly healthy. Now we are 
certainly seeing, on the commercial side, which we are 
obviously impacted by, as well as residential, there are a few 
more people in the market than there were a year ago. We 
continue to have co-op programs in local schools. We attract 
through obviously ads to try to get----
    Ms. Norton. I have asked you a question, and you obviously 
don't have the pictures before you. Would you submit to this 
Subcommittee the number of realty specialists hired from 2000 
to 2008, the number hired in each of those years?
    Mr. Winstead. I would be happy to. I know, Madam Chair, the 
last 3 years we have increased----
    Ms. Norton. Wait a minute. You are right. You created the 
program.
    Mr. Winstead. But we have actually increased the realty 
specialists by 10 percent.
    Ms. Norton. You created the contracting program. It started 
3 years ago; is that right?
    Mr. Winstead. That is correct. We are in our fourth year. 
And we have increased from 500 realty specialists----
    Ms. Norton. I still want it from 2000 to 2008. I have to 
have some--I can't be--otherwise I may be criticizing the 
agency for things for which it doesn't deserve criticism. I 
need to have something to compare with, so I need to know how 
many were hired in each of those years. The only thing I can 
compliment you for at the moment is how fast you got rid of 
half the staff. That you all did with great efficiency.
    Mr. Winstead. Well, I am very concerned about this issue 
that you have seen and watched the agency for years on. And we 
do meet quarterly with the ARAs, who are responsible for the 
regional--the realty specialists and the leasing function----
    Ms. Norton. Quarterly with?
    Mr. Winstead. With the assistant regional administrators, 
the people that run our 11 regions. And I have constantly been 
asking them, how is the transition going between the former GSA 
prenational brokerage contract and the current tool we have and 
integration? And they are very focused on this. There are fewer 
people. I will tell you I do have a concern. One of the 
concerns I picked up in going to service centers around the 
country is that some of the realty specialists are doing more 
administrative work, at particularly the 13 and 14 level, than 
they should be doing. And I brought that back to Tony Costa and 
our team in Washington to try to make sure that we offload some 
of the more clerical, obviously administrative.
    Ms. Norton. Anybody without expertise needs to be doing it, 
you know, 24/7.
    Mr. Winstead. And I will tell you, one of the concerns I 
have brought back from those meetings is that the realty 
specialists are overloaded with some functions that maybe 10 
years ago they weren't doing. And so we are looking at that.
    Ms. Norton. And what kinds of functions were they not 
doing, like supervising the contractors?
    Mr. Winstead. Obviously that. Looking at the long-term 
housing--you know, working with the tenant agency on an ongoing 
basis, working through the occupancy agreement, ensuring all 
the program----
    Ms. Norton. So the decision to, now that we have some 
contractors, let's quickly get rid of specialized staff who can 
get probably get higher-paying jobs in the private sector turns 
out to have been shortsighted; wasn't it?
    Mr. Winstead. Well, Madam Chair----
    Ms. Norton. It seems to me, if you are going to let people 
go while you are still in transition, you can understand that, 
at some point, you would figure out that you had in fact 
somehow balanced this out.
    Mr. Winstead. Right. And it still is very much in that 
process. We still need to improve.
    Ms. Norton. But the people are gone.
    Mr. Winstead. Not all of them are gone. Last----
    Ms. Norton. I want to know, also submit to this office--
first of all, were these people--how were these people let go?
    Mr. Winstead. Well, back in 2002, I think that the realty 
team was dealing with about 7,600 leases. In 2007, about 8,500. 
So we have had an increased number of leases, but we have 
increased the realty specialists from 3 years ago to today 10 
percent to deal with that.
    Ms. Norton. But all of that was foreseeable. More leases--a 
whole new function given to contractors, and the first thing 
the agency does is to use it as an opportunity to get rid of 
people and save money. And now the wind is blowing right back 
in your face, and it has become a matter of public controversy 
and embarrassment to the government and to this Subcommittee.
    Mr. Winstead. Well, we are very focused on it. I will tell 
you that the majority of the realty specialists that did leave 
between that 1992 time period--you want the 2000 to 2008--left 
through attrition. And I will tell you that a lot of the alumni 
of PBS have gone to other Federal agencies in some of their 
lease programs. But we have attempted to stimulate--one of the 
things I have marvelled at----
    Ms. Norton. Once the agency announces that we are going to 
get rid of an X number of people, people better fend for 
themselves, of course, we don't lay off people, particularly 
with this kind of expertise. They easily find other jobs. Yet 
this is the government's leasing and construction central 
agency. It is a matter of some serious concern----
    Mr. Winstead. I will be happy to----
    Ms. Norton. --to the Subcommittee.
    Mr. Winstead. I will be happy to get the data specifically 
on the people that have left since 2000 to 2008, the current 
numbers, as well as their grade and their responsibilities to 
the Committee. And we are making every effort, looking at work 
force modeling in the realty functioning throughout the 11 
regions.
    Ms. Norton. How many realty specialists does the agency--
you have a program for hiring them right now as I speak?
    Mr. Winstead. Yes. We are looking----
    Ms. Norton. You are trying to bring on realty specialists 
right now.
    Mr. Winstead. We are looking to fill slots that are 
available. And I will be happy to get exactly----
    Ms. Norton. Yeah, please submit it.
    Mr. Winstead. I would be happy to.
    Ms. Norton. You got available FTEs. I would like you to 
submit what your goal is for hiring, when you expect them to be 
hired. We can't allow this situation to go on. If you say it is 
not the contractors, it is getting necessary information to the 
contractors, then in fact you have got to--that is why I am 
trying to penetrate to see what the cause is. We have got to 
that to that cause.
    Mr. Winstead. I would be happy to provide all the 
information on both attrition as well as what we have done to 
bring new realty specialists in to what positions in the 
region. We are not ignoring--this is a critical staffing area.
    Ms. Norton. And the attrition took place because the agency 
announced it was going to contract out people's jobs, so I 
understand that. At the same time that you do that, you will be 
requesting that people help you in the transition, which what 
bothers me is the short-sightedness of leaving the agency short 
of the necessary expertise to accomplish its mission so that 
the Federal Government looks like it can't even negotiate 
leases with the private sector. And that becomes a matter of 
public controversy that is then written up.
    Mr. Winstead. I am very concerned as you are on this.
    Ms. Norton. What are you doing to make sure we don't lose 
any more, Mr. Winstead?
    Mr. Winstead. Madam Chair, I think I mentioned on June 6th, 
we have a very aggressive training program with them. We have a 
very aggressive recruitment program through internships, 
through co-op programs with the universities.
    Ms. Norton. You recruit from other agencies? Where are you 
getting these people?
    Mr. Winstead. Well, we are advertising in both the private 
sector as well as in Federal Government.
    Ms. Norton. Is the pay sufficient, do you think?
    Mr. Winstead. No, the pay is not competitive with the 
private sector. I can get you the pay grades for the realty 
team. But if you look at it compared to what brokers and----
    Ms. Norton. Do you have a special program, for example? 
When you are dealing in an area like you are dealing in where 
people can, after all, if they already have the expertise, the 
private sector knows what to do with them. Agencies confront 
that all the time. So then they have very special recruitment 
programs for hot shots, people who may have the necessary 
educational background and fairly shallow experience but who 
are just the kinds of people the Federal Government would want 
to hire and often can't hire because, once they get that 
expertise, the private sector may get to them. And so one of 
the things some agencies do is to go after such people, train 
them, give them a very special status so as to bring in the 
kinds of new talent it takes, particularly when they face this 
kind of loss. Usually agencies aren't facing this kind of loss. 
They are facing the need to backfill with retirements that are 
occurring with the baby boomers leaving and that kind of thing. 
You are facing something where you all did it. This is what 
gets me about this one. You have the same baby boom problem as 
every other part of the Federal agency, then you said, look, 
everybody, your job is going to go as soon as these contractors 
get on the job. People would have been crazy to stay there. So 
they had to know that their jobs were being contracted out. But 
at the very same time, any agency that valued its expertise 
would have in place something that would encourage those people 
not to leave quickly, if, for no other reason, to help us train 
whoever were the new people coming in and to keep from 
handicapping the agency.
    I am very, very concerned at the effect of this broker 
contract on the expertise inside the agency, and if I may so, 
foreseeable effects at a time when the Federal Government is 
having trouble attracting the kind of, yeah, hot shots from the 
baby boom that gravitated toward public service and therefore 
to the Federal Government. We are having trouble no matter 
where we look.
    So unless you have some kind of special program, Mr. 
Winstead, going out and advertising, whatever you are doing, I 
don't know why they ought to choose GSA.
    Mr. Winstead. Well, Madam Chair, we are doing all the 
above. I mean, the impact of the national brokerage contract, 
as you have alluded to, there obviously has been some attrition 
as a result of tasks that are now being done by private sector 
that were originally done by realty specialists. But I think 
the majority of our core, the 562, have adjusted to that. And I 
will give evidence in terms of who we have lost and why we 
think they have left.
    Ms. Norton. But you can't ever know anything until you know 
how long was it taking us, whether or not they have adjusted, 
how long was it taking us last year to get to prepare what was 
needed for the brokers versus how long is it taking us this 
year?
    How long will it take us in the first year of the brokerage 
contract? Second year? Third year? We need those figures from 
the Committee.
    Mr. Winstead. I will be happy to provide that.
    We also----
    Ms. Norton. The only reason that I ask for these figures, I 
want to encourage the agency to quantify everything. People 
respond--we are not saying to you that giving guidance means if 
you don't meet this guidance, off with your head. But if the 
guidance doesn't say we expect X to be done within this period 
of time, then--you are a bureaucrat in the government. Well, 
then you just do it. You work hard. But you work hard. You may 
not even focus on that particular--particularly since you say 
these people are overloaded. You may not even focus on that as 
your priority, because you have got so many other things to do. 
So unless you are saying that we are trying to reduce this 
time, it is getting out of hand, you can't simply say to 
people, work harder.
    Mr. Winstead. Madam Chairman, we are--I will provide this 
Committee--we are very focused on this. I fully understand your 
concern.
    We are, I think, getting more interest from second-career 
people and coming in from baby boomers. I go to the PBS boot 
camps. I am amazed, out of the GSA personnel, there are many 
more people coming into the agency for the PBS workforce 
because of what we do, the hands-on nature of real estate.
    I do think we have--we are still listed in the top 10 
Federal agencies as good places to work. We have a wonderful 
work environment. I am amazed, coming from the private sector, 
to look at the camaraderie between people coming in at the 
lower levels of the realty function versus the majority of the 
ARAs and ACs that have come through realty functions and have 
had 20 years career in PBS.
    We have recruited and kept a lot of people, and a lot of 
them have come through that basic understanding of the real 
estate delivery and the functions that you learn on the realty 
level, those 600--560 people. But I am concerned and do 
understand your concern about what has happened as a result of 
the national brokerage contract in terms of retention. We are 
doing workload modeling. I will be happy to provide that in 
terms of those functions and regions, what will be filled and 
how we are going about filling them.
    Ms. Norton. Providing that to the Committee would be very, 
very important.
    I would ask that, besides your recruiting, your training--
we need information on the training program--that you take 
affirmative steps to staunch--to stop the outflow of people 
from the agency and--I don't know--at least realty specialists. 
To the extent----
    That means somebody has got to sit down and think about 
what would we need to do to encourage people who have every 
reason to leave because of early retirement, because of 
competition with the private sector, what should we be doing 
while we are trying to rebuild this realty specialist workforce 
to keep this from getting any worse?
    So I would ask you to think about that. I am not asking you 
to submit that within 30 days, but expect me to want to know, 
since I think this is something that has to be thought through, 
about what you can do.
    My interest in this, by the way, comes also from the other 
Committee on which I serve, the Oversight and Reform Committee, 
which has jurisdiction, of course, over Federal employees; and, 
therefore, I am aware of the difficulty you face in the 
ordinary course. I am horrified, though, to see the difference 
between your loss in this specialty and the losses of other 
agencies. Because theirs has been more natural and yours came 
largely--at least in these numbers--as a result of contracting 
out people's work so fast that they knew exactly what they had 
to do.
    So I think you are in a pinch, and you have got to make up 
for it, and you have got to make up for it soon, and you can't 
do it by the usual strategies. At the very least, you have got 
to do all you can to keep the personnel you have there that you 
are now piling work on, because you don't have enough people. 
So somebody has got to think through how do you keep this very 
central function staffed.
    The other problem I raise had much to do with the Federal 
Building Fund. What has been the growth or reduction in the 
Federal Building Fund over the past, let's say, 4 years?
    Mr. Winstead. We still--in terms of the budget, we still 
have the requested $8 billion in terms of the Federal Building 
Fund.
    I think what you are alluding to is the concern, again, 
with the leasing. Your opening statement talked about the lease 
inventory, and we have seen that increase quite considerably 
over recent years. And if you look back 40 years we have had a 
quadrupling of that, up to the point now where we have 51 
percent of our needs, space needs delivered through private 
sector leases, versus 49 percent through space in our 1,500 
federally owned inventory.
    I think the reality of that impact is clearly that the more 
we are leasing, that leased price is a pass-through. It doesn't 
generate additional revenue for the Federal Building Fund.
    You know, from our own inventory, we are getting in the 
neighborhood of about $9 a square foot. If you look at the 
nationwide inventory of federally owned leases, we are getting 
about $9 a square foot that goes into the Federal Building Fund 
from then-owned inventory. It is reinvested in reinvestment 
capital through the R&A program and modernization of our 
buildings. So every time we go to a leased option we are seeing 
an attrition of revenues coming into the Federal Building Fund.
    If you were to take the leased inventory and look at fiscal 
year 2007, last year we saw a growth in the leased inventory 
for PBS nationwide of 3.2 million square feet. Now we are at 
175 million square feet. And what that meant, Madam Chairman--I 
think this gets to your point--is that with this increase, the 
3.2 million square feet in fiscal year 2007, we actually did 
lose--that equates to about $30 million of lost revenue to the 
Federal Building Fund.
    So the reality is----
    Ms. Norton. And that you said was sheer growth in----
    Mr. Winstead. That is correct. If you take the 3 percent--
3.2 percent increase in new square footage on the lease side, 
that essentially equates to a loss of $30 million in terms of 
that $9 a square foot of owned inventory contribution to the 
Federal Building Fund for capital reinvestment. So what has 
happened is we have seen, you know, the allocation, the 
revenues have gone up to the Federal Building Fund. Because 
they are bringing on new office buildings, new courthouses, so 
the revenues are increasing. But with the increased leasing 
action, we are seeing a reduction of contributions to 
reinvestment revenues that we can put through R&A back into our 
own inventory.
    Ms. Norton. We are quite aware that some of this you can't 
do very much about. I am not suggesting that the Federal 
Government is going to start building lots of its own space. 
That is why you saw me in my--saw me focus on priorities of the 
agency, which seem to me to be quite skewed.
    If you own some property--if I own a house in which I have 
invested and I look around me today and I see what the cost of 
buying a new house would be or renting a house, that is a 
precious investment that I have. So one thing I do, any 
homeowner does, is, you know, make the necessary repairs so I 
don't have to move out of the thing because either it was--it 
got to be so decrepit or I just couldn't stand anymore.
    That is why I have been very concerned about whether or not 
the agency is, in fact, prioritizing the importance of its own 
inventory and the repair and rehab or perhaps even expansion of 
that inventory that might have an effect on reducing the 
leasing and therefore keeping the Federal Building Fund alive 
and kicking.
    You have got a new Congress here, and it is not going to go 
away, and it is not going to be adding funds willy-nilly to the 
Federal Building Fund. This whole notion of pay-for is real 
real, so somebody has to be thinking about what are our options 
for maintaining a viable Federal Building Fund as need for more 
space occurs with fewer contributions to the Federal Building 
Fund. What are your thoughts on how you are going to maintain 
the fund and how much has it been reduced or not over the last 
4 years I asked as a benchmark?
    Mr. Winstead. Right. Madam Chairman, I am very concerned 
and I think you address an issue that I see in the field. As I 
go out and go to our service centers and seeing the condition 
of our buildings, the 1,500 buildings that we have in the 
inventory, I am concerned about the condition of many of them. 
You know, we have needs in about six----
    Ms. Norton. Is there any chance that any Federal building 
will come forward, that you know of, in the near future and ask 
to be moved out of a Federal site into----
    Mr. Winstead. I preference, it has happened. It will 
inevitably--I think inevitably those are the discussions that 
occur on our property management level and the portfolio 
management level where we are getting requests to move out of 
owned inventory. And, as the Chairman certainly mentioned, part 
of this is because of the condition of the building.
    As I look at the business model of the Federal Building 
Fund, you know, I am very concerned, as Commissioner, about 
this issue of reinvestment need, the $7 billion that we need to 
maintain this inventory.
    I think we have done an excellent job in recent years, for 
the last 4 or 5 years, through our portfolio strategy of coming 
down and holding on to tier one assets where there is a long-
term tenant demand. I mentioned earlier we have actually sold 
and surplused 272 buildings. It has brought in almost $200 
million and created huge savings in terms of carrying costs. 
But for that inventory that is left, we do have long-term 
housing needs; and what we need to do is to manage the revenues 
in the Federal Building Fund, along with direct appropriation 
requests, and make sure that we are prioritizing and moving 
forward with renovation of these buildings to keep them in 
competitive condition. And that is what we struggle with every 
day. I mean, that is what the portfolio group at NCR and head 
office and all the regions is doing.
    Ms. Norton. And could I just ask, when we own a site, we 
own the land. What happens to the land and the site? In 
Billings, Montana, where we declined, that was really radical. 
Abandon a courthouse and lease a courthouse. What did you 
intend to do with the land and the building if we had been 
foolish enough to allow that precedent?
    Mr. Winstead. Well, the Billings, Montana, courthouse was a 
part of the fiscal year 2008 capital program, as you well know. 
We originally had submitted a lease prospectus for the courts 
and the Marshal Service. Our intent now is, obviously, we have 
proposed two leases instead of the one; and we are looking at 
improved land in a very scarce part of downtown Billings. But 
we will, in fact, based on the contribution of the--and 
considering the small amount generated from the lease solution, 
it will have an impact on the Federal Building Fund, as you 
alluded to, of $100,000.
    But the Executive Committee of the Judiciary has viewed 
this as a space emergency since 2006, and we are moving forward 
with it.
    In terms of any surplus property, we put it through a 
disposal process; and it goes, in many cases, to public sale. 
And as a result of the 2005 Appropriation Act language that I 
know this Committee supported, we are now pumping those 
proceeds back, any surplus property, any surplus buildings that 
go to public sale back into the Federal Building Fund.
    Ms. Norton. Would you submit--you threw out a figure of 
revenue from Federal buildings sold.
    Mr. Winstead. Right.
    Ms. Norton. Would you submit that list of buildings?
    Mr. Winstead. Sure.
    Ms. Norton. Where they were located to us?
    I make no judgment, except if I had some land today, 
according to how much land and where, I would have to be very 
careful about just selling it off. And, therefore, the 
Subcommittee at least needs to know what are these sales? How 
much did they return to the Federal Government?
    Mr. Winstead. I will be happy to get that.
    Ms. Norton. The difficulties that you report are, as to 
what to do with the Federal Building Fund, is an example of 
how--you know, the Federal Building Fund was--is an example of 
what kind of innovative agency GSA used to be. That is working 
with Congress and come up with a way to pay for everything with 
a revolving fund.
    Now, if you are sitting in an agency today and you see what 
you have reported, the huge increases in need, with continuing 
lowering of contributions, then what you do is you sit around 
and you say, well, you know, how do I rethink this idea? What 
do I think should be done?
    And I love government, and I hate the bureaucratic approach 
to, well, this is the way we do it. I guess it is just not 
working.
    Well, who knows best how to reinvent what has shown that, 
if we keep doing it that way, we are going to get into a 
crisis? And so it bothers me very much that the people who know 
best, who are experiencing the crisis, instead of coming 
forward to Congress to say here are some options, here are some 
things to do----
    Well, you know what? Congress had an option--what is it 
now? More than 3 years ago, we passed a bill. This is the 
Congress of the United States. And we are still waiting for use 
of this authority. This authority, you know well, is authority 
that I don't even think took the kind of imagination that 
trying to do something about the Federal Building Fund 
requires.
    But we wrote December 11, 2007, to ask GSA to provide a 
detailed analysis for use of that authority on the St. 
Elizabeth's campus project. If ever there was a project made 
for that authority, it is where GSA, for the first time in its 
history, is asked to build a compound, not simply a building. 
That is the kind of thing that would excite anybody as just a 
new and important way to do it. And the last thing you want to 
do it is the old-fashioned way, particularly since they have 
got perhaps a half a dozen buildings.
    Far from seizing this as a new way, a more creative way, a 
more 21st century government way to deal with a problem that 
you have, in its report, GSA says--and I am quoting--proceeds 
from the ground lease may not be used to offset the space lease 
rental obligation.
    Why not shoot yourself in the gut? Why does GSA hold that 
view against its own interests?
    Mr. Winstead. Madam Chairman, I would--I am very pleased of 
the Committee's support for the section 412 authority, and as 
you----
    Ms. Norton. Why are you pleased? Why are you pleased if you 
fail to use it?
    Mr. Winstead. Because since fiscal year 2006 we have 
actually applied the retention of proceeds effort. We have 
actually utilized the portion of authority and retention of 
proceeds. As I have mentioned earlier, we have recaptured 
almost $170 million.
    The reality is that we have been working since then--I will 
address St. Elizabeth's--but we have been working since then on 
the ability to utilize section 412 in other ways, to look at 
lease and lease-back opportunities for our older inventory. I 
would also look at new construction applications for 412.
    Ms. Norton. Wait, wait. You know, you have a way of not 
answering the question I asked you directly. I don't mind a 
witness prefacing his answer.
    We just talked about the authority, frankly, that you 
already had to sell property. I am now talking about using the 
proceeds from a ground lease to offset the space lease rental 
obligation. And we just talked about the Federal Building Fund. 
We have just talked about the problems you are having 
generally.
    That is the question I want answered. Why--I am now quoting 
you all here--proceeds from the ground lease may not be used to 
offset the space lease rental obligation, when the very 
opposite is what Congress had in mind? What do you think we 
were doing this for?
    Mr. Winstead. Obviously, ground lease will still be 
deposited in the Federal Building Fund and a pure offset not 
required. So I know that that is an option. And new revenues to 
the Federal Building Fund.
    In terms of the St. Elizabeth's issue, which is your 
question, we have reviewed it, both internally and with OMB, in 
terms of the application of 412. It is not, in our judgment, 
the most ideal situation to apply 412 because of, as you well 
know, the secure nature of that campus.
    Ms. Norton. It is not what?
    Mr. Winstead. It is not an ideal situation to apply 412.
    Ms. Norton. Why?
    Mr. Winstead. Because of the secure campus nature of it. 
DHS would have to lease 100 percent of the space, which would 
violate the scoring rules. We come against the constraints of 
the scoring rules in almost every instance when we look at the 
412 application to a St. Elizabeth's or other projects. The 
site also is a highly--obviously, high infrastructure cost.
    Ms. Norton. Mr. Winstead, to get back to my question, how 
would that problem fare if we used the ground lease to offset 
the space lease rental obligation?
    Mr. Winstead. If we could use the ground lease and we could 
use the 412 application in doing so, it would offset----
    Ms. Norton. There is nothing in the statute that says you 
can't.
    Mr. Winstead. Well, I think our problem, in looking at this 
to date, has been the constraints of the scoring rule and being 
able to craft economically a ground lease and construction to 
be approved under a scoring rule.
    Ms. Norton. You believe it would score--you believe there 
would be a scoring--you said--I am trying to find out----
    Mr. Winstead. It would be----
    Ms. Norton. --whether or not offsetting the space lease 
obligation scores; and, if so, who says so.
    Mr. Winstead. Well, in our look at St. Elizabeth's and 
applying a ground lease or a 412 approach to it, we have not 
been able to get the economics of that beyond the security 
issue, beyond the high cost of infrastructure and the reality 
of being able to do a 412 lease, ground lease arrangement on 
St. Elizabeth's. We have also run into the financial costs of 
the security cost on any proposal of that nature and the fact 
that it would not be scorable.
    And that is our problem, and we have been working on this 
the last 3 years. We have looked at, you know, many 
applications of 412 to this situation as well as others, and we 
have not been able to get it past the constraints of the 
scoring rules to date.
    Ms. Norton. So the specific reason for your statement that 
the proceeds from the ground lease may not be used to offset 
the space lease rental obligation--see, I keep coming back to 
it, because it is your words. The specific reason for that is 
scoring? Is--fill in the blanks, please. You put that language 
in. There may be lots of reasons why you think you ought not to 
use that. You put that language in.
    Mr. Winstead. OMB scoring specifically on the time 
arrangement between the ground lease and the lease-back is the 
issues that we have had in that letter and response on the 412 
application St. Elizabeth's.
    Ms. Norton. OMB's what?
    Mr. Winstead. OMB's scoring specifically on tying the 
relationship between a ground lease and lease-back arrangement 
and the risk allocation issues under scoring rules, as well as 
the financial viability, given the security costs at St. 
Elizabeth's, given the 100 percent occupancy that DHS would 
have in the building and the fact that that 100 percent 
occupancy, because of allocation of risk criteria, that the 
scores at OMB make it unacceptable in terms of getting it 
scored.
    We do have--we have vigorously--I have had two meetings at 
OMB in the last 2 months on this issue of looking at other 
options for lease financing, lease purchase, applications of 
412. We have come up with studies. We have locked at, you know, 
the St. Elizabeth's applications. We have looked at the Denver 
Federal Center applications. We have looked at ground lease 
applications. And every time, in terms of the economics of the 
current market, any arrangement would be scorable and would not 
be--we could not get it approved, and we haven't had--you know, 
we need also to get authorization for it. So we have had----
    Ms. Norton. Before I leave this line of questioning, could 
I ask you to give me an example of where 412 authority could be 
used?
    Mr. Winstead. One example of what we spent a great deal of 
time, for the reasons that you have mentioned, on the R&A and 
modernization side and the condition of our buildings, 600 
buildings requiring--1,500 required substantial renovation. We 
focused 412 in that area initially.
    We were hoping that the authority and the view of OMB, in 
terms of the budget scoring, we could apply 412 to essentially 
lease out Federal buildings that had substantial renovation 
need and lease it back with renovation included. And in looking 
at the economics of that, our portfolio people and our 
financial people looked very carefully at ensuring that the 
funding element of that for renovation was very focused in 
terms of basic utility renovation so that the aggregate costs, 
it would still be scorable.
    The reality is we could not get concurrence with OMB on our 
proposal in that regard, and we have been working with them. We 
continue to work with OMB to explore ways that a ground lease, 
lease-back structure can work. We are looking at new 
construction most specifically now because of that risk 
allocation. So----
    Ms. Norton. Wait a minute. On the renovation, you know, OMB 
told you you couldn't even use it on renovation?
    Mr. Winstead. That is correct. And we are still----
    Ms. Norton. We have the veto here by OMB on both new 
construction and on renovation. Now, my question becomes, when 
is 412--on what kinds of construction could 412 authority be 
used? Or, in the alternative, on what kinds of renovation could 
it be used? Are you telling this Subcommittee that that is a 
useless authority?
    Mr. Winstead. No. We do believe, and we continue to talk to 
OMB, that new construction, ground leasing the land separate, 
competitively, with a lease-back arrangement can be viable and 
can be structured financially to be competitive in the market, 
that we would actually get competent developers wanting to 
enter and bid on the contract. But we need to have generic--
basically, the building and the structure needs to be fairly 
generic office space that, you know, that keeps those costs, 
because of the finance market now and the cost of financing, 
keeping them below the scoring limits.
    And that is our struggle. Our struggle has been to look 
at--we first looked at renovation approach of 412. We were not 
successful there. We are currently still engaged with OMB in 
looking at new construction ground lease approach under 412 and 
looking at separate, competitive lease-back transactions that 
have that separation and allocation of risk between any offeror 
and the Federal lease. And it is a very----
    Ms. Norton. Well, you know, Congress is going to have to--
--
    Mr. Winstead. So we would be happy to share with you.
    Ms. Norton. --increase its instructions to the agency on 
this matter. Because I still can't get out of you how you could 
ever use it.
    All right. General office space.
    Mr. Winstead. We will be happy to provide----
    Ms. Norton. Here we are about to build six buildings. If 
you build a hypothetical building someplace else, just count on 
us to do it.
    Mr. Winstead. Madam Chair, one example that I think is--
some funding is in this budget for it for remediation effort is 
the Denver Federal Center. We have a very remarkable piece of 
property north of Denver in Lakewood, Colorado, that is 500 
acres or so. We do have existing tenants, in basically 1940 
buildings.
    We have--fortunately, we have been very engaged--our 
regional staff out in Denver has been very engaged with the 
Lakewood mayor and planning board and the commission and the 
regional transit authority in Denver that is bringing a light 
rail to that campus. We have actually had the light rail 
alignment brought down into the Federal campus, as you know 
well, to prevent very direct public transit access as we do on 
New York Avenue and all the Metro stations here in Washington.
    That land, we feel, is very, very valuable for 
consolidation of leasing in and around Lakewood and Denver onto 
that site. We have available land. There is an opportunity 
there, we believe, to do a ground lease, lease-back under a 
412.
    We are running the numbers. We are engaged with OMB 
constantly on this. Our team from Denver has come to Washington 
to discuss it with us. We would be happy to share with the 
Committee that project because it is an ideal project. As I 
said, to date, we have had issues under the application of that 
ground lease, lease-back and getting it under the scoring 
rules, but I will be happy to give the Committee examples of 
that.
    Ms. Norton. I very much appreciate you giving us that 
example. Very much appreciate it.
    Particularly, since Congress--we have had some recent 
experience. Don't think I don't sympathize with your dealing 
with scorers. It is very interesting. Instead of moving ahead 
and doing this, you went to granddaddy and said, can I do this?
    Congress never had that in mind. We thought we were dealing 
with a grown-up agency. But you can always expect OMB to say 
no. So I don't know why you wouldn't just use your authority 
and make them stop you. But that, of course, is my problem with 
GSA, period.
    Is there a rule? Have you been instructed not to use this 
authority without coming to OMB?
    Mr. Winstead. The interpretations of the scoring rules in 
looking at some of these projects will provide the profile and 
the economics of them--would--rule scoring would in fact not 
allow for the annual allocation of----
    Ms. Norton. Let me tell you something about scoring, 
because you are really talking to somebody who understands your 
frustration here. Don't think it is not the very same thing in 
the Congress.
    Recently, we met some scorers. Understand that these people 
who score things know doodly squat about real estate land 
development. They know about scoring in the usual sense.
    So we met some scorers here at CBO. These scorers said that 
the old Post Office scored. Now, Congress is very respectful of 
CBO. But we have got the kind of staff who looked at the 
precedents, who had the background knowledge, and who argued 
and convinced CBO, after it had rendered its decision saying 
the old Post Office scored, the first thing we used was, 
really? This is the Tariff Building. Armed with that precedent 
and with people who understood scoring and real estate, CBO 
backed off.
    The job of people in the scoring business is to score. Your 
job is to build. Now if you were having problems with OMB, you 
should have come and talked to people over here. Perhaps we 
could work together.
    Mr. Winstead. Madam Chairman----
    Ms. Norton. Perhaps we could work with CBO and OMB. The 
last thing I would do is to salute to OMB when the Congress of 
the United States gives you authority and you are about to 
build the largest set of buildings in the history of the 
agency. They don't care what you are about to do.
    Mr. Winstead. I will commit to you, Madam Chairman--I mean, 
I have been on this issue ever since I became Commissioner of 
the Public Building Service, and I will continue to be on it 
with this Committee.
    I have read, as you have, Madam Chairman, every circular, 
A-11 and others on this topic. I have read CBO reports. I have 
read four reports of GAO on the issue of leasing and scoring. 
We are doing everything--I am doing everything in my power as 
Commissioner to approach OMB at every level to address our 
funding needs and address our real estate needs under the 
authorities we have and to----
    Also, I think it is fair, your assessment of the scoring 
budget people at OMB, is they are narrowly focused on the 1992 
Federal Budget Act. They are not real estate professionals. 
Some of them are. Our budget analysts and others who have been 
around there for a couple of decades understand real estate, 
but----
    Ms. Norton. Name one.
    Mr. Winstead. Well, you are absolutely correct in the issue 
that we are struggling with, as you correctly have 
articulated----
    Ms. Norton. My only point, Mr. Winstead, is, you know, you 
are playing by their rules.
    Mr. Winstead. Well, I am doing it----
    Ms. Norton. --and you will always get their answer. And 
don't think you are talking to somebody who has no idea about 
OMB. I headed a Federal agency. I know their power, and I know 
how difficult it is once a decision is made.
    You knew that they were not going to approve this 
authority. And, you know, even if you go back with the general 
purpose office space, they are not going to approve this 
authority. So unless you have another whole way of playing the 
game you are going to lose and this Congress loses and the 
taxpayers lose.
    And again, if I run up upon that--you know, OMB, after all, 
has to be respected by the Congress. So if OMB is saying one 
thing about scoring, we ought to get together. We ought to talk 
to CBO.
    By the way, they have the same problems. You are absolutely 
wrong that the budget analysts understand enough about real 
estate and land development. They understand about scoring. 
They understand about how to make sure you don't spend any 
money, and they understand about how to make sure you don't 
spend any money even when you are not spending any money.
    So my problem is saluting and then not using--and, indeed, 
yourself putting language in. You didn't need to put this 
language in: Proceeds from the grounds may not be used. On 
whose authority? Then you should have come to Congress. If you 
really believed this is as useless as you are saying, you 
should be up here talking to us about what we need to do.
    We thought we had done it. We thought we had done it in 
time for St. Elizabeth's. And now you are telling me that we 
ought to do it the way we have always done it and have the 
taxpayers front gazillions of dollars to build these buildings. 
That is terrible. That is a terrible conclusion to reach.
    Mr. Winstead. We would be happy to continue to get together 
with your staff and this Committee and making it very, very 
clear what we have done and looking at 412 application and what 
we can do with this Committee going forward.
    I will tell you, I am equally as concerned as you are about 
relief and resources. Under the Federal Building Act, we got 
direct appropriations and we have got 412 and we have got ESPC 
contracts to finance energy. That is it. Direct appropriations 
and ESP contracts to finance utility upgrades, as I mentioned 
earlier.
    I am very concerned about it. And in February of this year 
we supplied this Committee, at your request, a copy of 10 
leases demonstrating, in fact, the economics of our attempts to 
move forward on client agency needs in a timely manner under 
our existing authority and existing funds in the Federal 
Building Fund. And that list, which this Committee has, makes 
very, very clear the direct appropriations Federal Building 
Fund approach, the operating lease approach, and any kind of 
lease finance or 412 application alternative. And it, in every 
case--obviously, the operating lease is more expensive. So, I 
mean----
    Ms. Norton. Mr. Winstead, I respect your background and 
expertise in this field. What authority would you need from 
Congress in order to be able to use the 412 authority? Is there 
anything we could do, given your very extensive background in 
this field and now in the government as well?
    Mr. Winstead. I do believe that the intent of 412 is 
dealing both with attention of proceeds and giving us the 
ability to ground lease and lease-back facilities. I have 
talked to you about our approach after we were given this 
authority to look at the renovation approach. I mentioned the 
new construction approach. You know, the clear intent of the 
language, I think, gives us that authority to do it with, 
obviously, scoring and authorization to move forward with those 
projects that we need from this Committee.
    Ms. Norton. So the intent somehow didn't do it. Therefore, 
what further do we need to do?
    Mr. Winstead. I do believe we have provided, you know, 
basically the existing law I have in front of me, and it says 
could be expended under the 412 authority. I think it is 
inclusive. The interpretation and the intent of this Committee 
and that language is clear, is that we could apply it in the 
areas we have talked about. The difficulty----
    Ms. Norton. So, as I read you, what we need to say is that 
we direct GSA to apply the proceeds to offset the space lease 
rental obligation. Would you agree that that would----
    Mr. Winstead. What we are doing aggressively is trying to--
--
    Ms. Norton. I am asking you. If we did that, would you 
agree that that is a direct--that that is a law?
    Mr. Winstead. I think that anything that would clarify our 
authority to lease back 100 percent of space under 412 would be 
helpful. Because what we have is, as you well know, that 
allocation of risk assessment in terms of how that lease is 
interpreted, capital or operating lease, and it comes under 
that scrutiny. So that authority to have 100 percent lease-
back, clarifying that obviously helps make those deals viable.
    Ms. Norton. Thank you.
    I listened to what you say about the security and the rest 
of it. I am not suggesting there is a simple solution here. I 
am suggesting that I have never bought the notion of 
impossibility. I buy the notion of think harder, and that is 
what I am trying to do, and I have to get you to help me do.
    Mr. Winstead. I appreciate the Committee's support on this. 
We have briefed staff on 412, our authority, the scoring issues 
and the like and will continue to work with this Committee in 
these areas.
    Ms. Norton. Could I ask--I never did get an answer for 
what--you are going to, I think, submit a list of what has 
happened to all--well, no, that is different. I want to know 
what is happening--okay. That takes care of that.
    We have learned that your office has recalibrated the 
formula used to determine what courts pay into the fund. The 
predicate for this question is what I have asked about the fund 
up until now.
    Now, I have the testimony of your predecessor, Mr. Moravek, 
performing June of 2005. Just to give you the context, it is 
important to note that the fund was intended by Congress to 
produce cash flow for reinvestment in the upkeep of government 
buildings and the construction of new buildings and to reduce, 
as it has over the years, to under 5 percent the need for 
direct appropriations to the fund by Congress.
    I don't know if that is still the case, by the way. It is 
that it is less than 5 percent.
    It--meaning the fund--is--and this is the operative 
language--is not a simple cost recovery system. It was intended 
by Congress to produce funds for reinvestment.
    Without coming or even informing this Subcommittee, the 
courts have, once again, apparently, decided they are in charge 
of courthouses. Because, for them, the biggest user--the 
biggest user--of the Federal Building Fund, you have 
recalibrated the formula in light of your own testimony about 
the threats to the fund, some of which you have no control 
over, such as increased need for lease space. How--why in the 
world would you change the pricing formula for the biggest user 
of the fund? And why would you do so without informing this 
Committee?
    Mr. Winstead. Madam Chairman, I know that we have engaged 
with this Committee on discussion of the ROI pricing 
alternative as well as, obviously, appraisal-market-based rent. 
I will tell you that, going back to early 2006, when I came on 
and really got into this job as Commissioner, I had meetings 
with the courts. And I also saw that they were very concerned 
both about their rent, the aggregate rent, which is a billion 
plus, as well as what I was seeing in terms of the efforts of 
the portfolio staff in terms of rent bill accuracy and 
appraisal work that we were doing on behalf of the courts 
constantly. They are questioning every appraisal. They were 
going back out and doing three stages of reappraisal of every 
appraisal in the country on the rent.
    What we looked at--and I will tell you that the ROI pricing 
is not a new concept. We did not--it was not in response to a 
proposal from the courts. We did not adopt----
    You talked about Commissioner Moravek's comments. They had 
a proposal with Commissioner Moravek that basically said at the 
end of the ROI period they are going to pay off the mortgage 
and not contribute to the Federal Building Fund.
    That is not what we are talking about here. The ROI pricing 
concept is not new. We have been using it since the early 
1990s. It is a method of pricing that we have used for 
courthouses, for land port of entry, for special purpose 
facilities such as labs that do not have easily obtained 
comparables in the marketplace in terms of appraisal rent.
    Periodically, we have reviewed the assumptions of those ROI 
models and resulting rents. We have established, under the ROI, 
a minimum rate of return for the Federal Building Fund of 6 
percent and evaluated all of our assets to see whether they 
provide this return. And all the courthouses that you have 
mentioned----
    Ms. Norton. Excuse me. You said this was not requested by 
the courts. Then why did you do it? Who requested it?
    Mr. Winstead. We already had--the courts were very--in 
terms of the application of ROI, they had been arguing for some 
time that, number one, we already apply it to courts, that they 
were not comparables. In most urban markets, courthouses are 
unique structures. And what they were constantly arguing is 
that the approach, in their mind, should be an ROI pricing 
approach that guaranteed fair return to the Federal Building 
Fund.
    So what we found that was some appraised based rents that 
they did not provide--under the appraisal rent approach, they 
did not provide sufficient return when you examined the 
expanded use of ROI for these projects. So we did enter into--
and we did talk to this Committee about it, as well as OMB. We 
did enter into an MOU which established the existing--revised 
the existing ROI pricing model to apply to new courthouse 
construction.
    If I could just have a couple more points to make.
    The new courthouse projects were unique in terms of overall 
long-term requirements, and we did apply the ROI pricing to 
them. And what we are seeing is that in the market you are well 
aware of, in Los Angeles, in almost every major market where 
there has been a lot of construction, increased costs and 
construction have not really been reflected totally by 
appraisal rates, that we don't have in many markets equivalent 
appraisal rates for courthouses. We have the courthouse in most 
markets.
    So what we did as a result of very high costs in 
construction with a lot of the new courthouses is we applied a 
guaranteed rate of 6 percent which is adjustable under a 
review. And we did find--I will give you an example of the 
results of that.
    Under that approach and analysis, we have five examples, 
taking future courthouses, just to illustrate this, on why the 
ROI approach guaranteed fair return to the Federal Building 
Fund 6 percent. With Los Angeles, a market rate of $40 a square 
foot and an ROI rate of $65 a square foot. So in Los Angeles 
approach, which is obviously a very problematic project, we saw 
a differential of $25 between the appraisal rental rate of 40 
bucks, and the ROI rate of 65. So in the case of Los Angeles, 
in the case of Mobile, in the case of Nashville, Cedar Rapids 
and San Diego, the ROI return was higher on a square foot basis 
than the fair market value approach.
    It also--so the ease of calculation, the assurance----
    Ms. Norton. Wait a minute. The 6 percent, is that in 
perpetuity?
    Mr. Winstead. It can be--no, it can be increased. We do 
review the ROI rate at 6 percent. It is reviewed with OMB as 
well. But it is calculated on the fair return based on----
    Ms. Norton. But are they going to have to continue to pay 
into it? At no point would the Court stop paying into the fund 
the way the people pay rent into the fund?
    Mr. Winstead. No. That is correct.
    Ms. Norton. Is that your testimony? That there doesn't come 
a point where you have paid for it as you would, for example, 
pay for a mortgage, pay off your mortgage?
    Mr. Winstead. No, this LOI pricing is not a mortgage. I 
think Commissioner Moravek's comments were about their proposal 
back 3 or 4 years ago when he was Commissioner. This is not a 
mortgage. This does not expire. The courts proposed----
    Ms. Norton. Now, Mr. Winstead, you help me to understand 
things, if I can intervene and ask questions. Because you will 
not find me unsympathetic to the notion that in L.A. and places 
like that there may need to be some exceptions as to how we go 
about building. After all, my colleagues come up to me, you 
know, pulling their hair out in places like that. Was this done 
for the courts generally?
    Mr. Winstead. No, we apply ROI pricing to other----
    Ms. Norton. Was this done for the executive committee of 
the courts? Was that who you dealt with for courts to get this 
new recalibration of the formula? Or were you talking about 
recalibration of the formula for specific courthouses?
    Mr. Winstead. No, for application of ROI going forward.
    Ms. Norton. For all courts.
    Mr. Winstead. Yes. But still----
    Ms. Norton. Was this done--okay. Excuse me. Not finished 
with that answer? Don't want to cut you off. Was this done by 
MOU?
    Mr. Winstead. It was done----
    Ms. Norton. How is that recorded?
    Mr. Winstead. It is in--I know we--it was recorded in a 
document in February of this year that we strongly----
    Ms. Norton. Drawn up by GSA?
    Mr. Winstead. Yes, and we did have discussions about the 
ROI.
    Ms. Norton. You know, Mr. Winstead, if we may be so humble, 
when you are talking about--well, maybe as to ask for a copy of 
the document? Not only did you not inform this Committee, but 
we have received none of the information you describe.
    Mr. Winstead. I would be happy to make sure----
    Ms. Norton. Did you do an analysis on the impact on the 
Federal Building Fund that you say you are so concerned--that 
very Federal Building Fund that you say you are as concerned 
about as I am, on the long-term effect on this change for all 
courts, whether located in places like L.A. or low-cost areas 
of the country? Did you do an analysis of the long-term effect 
on the Federal Building Fund?
    Mr. Winstead. Yes, ma'am, we did.
    Ms. Norton. And what is it then? What is it? Does it hurt, 
help or have no effect?
    Mr. Winstead. It does not have--it benefits--I mentioned 
these five projects that we have applied ROI to, the revenue 
base with L.A., Mobile, Nashville. There is a higher return on 
the ROI pricing. And we do have--Tony Costa and our financial 
people, when we were looking at this option, because of 
increased costs and the appropriateness and return of the 
Federal Building Fund, we did do analysis on impact to the 
Federal Building Fund, and we had----
    Ms. Norton. Submit that analysis within 30 days, please.
    Mr. Winstead. Oh absolutely. I do believe that we had--and 
I will make sure that we get everything. But I do think we 
shared discussions of ROI approach, but I will make sure you 
have everything, both letters and correspondence, on this.
    Ms. Norton. Mr. Winstead, the staff said you shared it, and 
we said it was not a good idea, and we told you it wasn't a 
good idea. And you went ahead and did it without informing us 
that you were going to do it and without submitting any 
indication that you were proceeding to work directly with the 
courts to change the formula for the biggest user.
    Look, again, we have been around the mulberry bush. We 
understand the terrible problems that some parts of the country 
have.
    Look, over here we are dealing, as I speak, with people in 
jurisdictions like L.A., San Francisco, Washington, D.C., and 
Boston, arguing that this new housing bill ought to allow for--
ought to apply to housing up to, I think, you know, beyond what 
we would ever think of before, 700,000, a rather large number.
    So we understand that there may be reasons. Probably they 
are negotiating, as I speak, whether or not that ought to apply 
all over the country or only in districts where the new housing 
bill that is now being put through the Senate or whether only 
in those districts to which it applies because of the cost of 
housing.
    I use that analogy to make this point. The Committee is not 
insensitive to the need for exceptions to Federal policy. You 
have made no exception. You have drawn a new policy to apply 
across the board. That is--and you have informed, without 
informing the Subcommittee. That is as close to a cardinal sin 
that can be committed against a Subcommittee. To hear from the 
Subcommittee, not a good idea, go ahead and do it, submit no 
indication that you are doing it, and no background information 
invites the Subcommittee to take corrective action.
    Mr. Winstead. Well, I will get you all the information----
    Ms. Norton. You need to get us all the background 
information you can----
    Mr. Winstead. Certainly I will and also----
    Ms. Norton. Because we will not allow this to stand unless 
it can be justified. So be on notice, anybody who wants to go 
ahead and do something as structural as this--that is the only 
way to characterize it--the kinds of things you generally do by 
legislation, make a gross exception for one party, with other 
parties having to do what they have been doing, when you make 
that kind of decision, not only should you inform the 
Subcommittee----
    I believe only the Committee should be making that 
decision, and I believe so because the Federal Building Fund is 
close to crisis. I believe so because I have heard nothing from 
you to indicate you know what to do about it, and I believe so 
because it is a change of mammoth proportions because it 
applies to all courthouses and because the courts are the 
largest user of the Federal Building Fund.
    I have made my case. I haven't heard your case for an 
across-the-board exception; and unless we hear the case for it, 
you are on notice it will not stand. I will leave that, because 
we will look at your materials.
    And I can be convinced of anything. You could easily have 
convinced the Subcommittee about L.A. and similar places. The 
burden is on you to overcome the presumption against applying 
such a formula across the board because the courts said so. And 
the burden is on you to explain why other Federal agencies 
ought to bear that burden for the courts while they do not 
accept their proportionate share while using disproportionately 
the Federal Building Fund.
    You have got to understand our own history with these 
people. They have come up here asking for outrageous exceptions 
for the Federal Building Fund, and we have said to them--looked 
them right in the face and said no. So they know the 
Subcommittee opposes it.
    So you ought to tell the courts, this is on such shaky 
ground that it will not stand. We are not going to--unless--
again, since they are directing courthouse construction, unless 
they can come up with a better answer than I have heard here 
today for making a huge exception to Federal law and policy--
and I emphasize law--the law says, you all pay. You pay the 
same amount and, guess what, ultimately, you all will benefit. 
Some of you will never get a new building, but I tell you, you 
are going to get your repairs done more quickly. So we don't 
want to hear it, that you don't want to contribute in a 
cooperative fashion.
    All I know is the impact will be not so much on 
construction but on the very issue we raised, that you have to 
abandon Federal property because you cannot do repairs. I don't 
know how this is going to help you to do repairs for all the 
other people who are paying into the Federal Building Fund and 
getting no discount the way the courts are, and yet not getting 
their repairs done, and yet not getting a new building. Very, 
very distressing.
    Of all the things we learned about preparing for this 
hearing, the failure to notify us of something we told you not 
to do and then going ahead and doing it, when the policy of 
this Committee, under Republicans and Democrats alike, has been 
equal, this is the most distressing thing that we learned about 
in preparation for this hearing. We are not going to take it. 
So if you all are contemplating doing anything else like that 
on your own, you ought to go back and rethink it right now.
    Let me go on. Speaking of courts, we have had to fight 
them, so we know you do. I once had to tell the judge who was 
in charge of them all what separation of powers meant, because 
she actually informed me that they could actually have a say in 
building courthouses--no say, much expertise, much background, 
but no say. The say is with you and the say is with the 
Congress of the United States.
    Now we have been on the courthouses and getting nowhere--or 
at least not anywhere that anybody would want to write home 
about--about their design guide. We have now received, finally, 
a new design guide, and included are a series of actions to 
make the guide different from the previous guide.
    The whole point was to reduce costs, control costs for the 
out-of-control courthouse sector. Because they essentially were 
driving the ship. They have been driving the ship ever since I 
have been in Congress. Well, I haven't been in the Chair until 
now. They are not going to drive this ship. And if they think--
we will undo the things they have done. The horrendous things 
that we have uncovered are close to the kinds of things you 
penalize other Federal agencies for doing, like building 
kitchens and extra kitchens and extra facilities, extra fitness 
rooms.
    You know, you give--who wouldn't let them do it? Why not do 
it? So they don't have any credibility with me. And you know 
what? When it comes to building, they don't have any power.
    One revision calls for "reduced chamber spaces", but it 
doesn't tell us what the old chamber space was or what the new 
number is, what the potential cost savings are. What role did 
GSA play in the design guide?
    Mr. Winstead. Madam Chairman, we worked closely with the 
courts on the design guide, and it was an attempt to, 
obviously, focus in on the building requirements of a 
courthouse and looking at efficiency and some things like law 
libraries that are no longer as relevant as they were in old 
courthouses because of the practice of law, as you know, being 
online, to a large extent.
    But the 2007 design guide of the U.S. courts was aimed at 
reducing and focusing in on----
    Ms. Norton. Reducing what?
    Mr. Winstead. The space requirements.
    Ms. Norton. How about aimed at reducing cost, Mr. Winstead?
    Mr. Winstead. Yes, cost.
    Ms. Norton. What is the cost reduction for the new design 
guide space requirements versus the old design guide space 
requirements? That was the whole point, to reduce the high cost 
of space for courthouses, not just reduce the space. The two go 
together, of course. What is the reduction of space?
    Mr. Winstead. The analysis that we have done to date in the 
Office of Chief Architect, with our project teams, is that the 
implementation of the design guide will save approximately 2 
percent in terms of total space usage by the court. So we are 
actually--the new design guide will, in fact--the total square 
footage for traditional courthouse----
    Ms. Norton. So what's the square footage?
    Mr. Winstead. Sorry?
    Ms. Norton. In other words, there ought to be a standard 
square footage for courthouses of different kinds. You know, 
that shouldn't be up to you. Hey, I want a big one. I want a 
small one. Is there a standard square footage you are looking 
toward?
    Mr. Winstead. No----
    Ms. Norton. If there is a standard square footage--as with 
everything else in life--I don't believe in cookie cutter or 
anything. There out to be--this is the standard. You can 
overcome the standard by showing the reason why. Is that what 
the design guide allows or not?
    Mr. Winstead. Yes. It is an effort--we made several--we 
made--in the design guide drafting with the AOC--they have, 
actually, since 1991, published this design guide. We actually 
spent--provided 13 pages of 128 suggestions in 2004, 2005 and 
2006 aimed at establishing a working group, and we basically 
looked at less probate.
    Ms. Norton. Who is in on the working group?
    Mr. Winstead. Our team, the head office, the Office of the 
Chief Architect and construction and the AOC facility Committee 
and a special group, obviously, their chief executive group, 
that is in charge of our liaison, our rent and the rent issue. 
We actually made a number of these examples. I will just share 
with you.
    We located probate and pretrial and less expensive space. 
We looked at base requirements on true need consistent with the 
current workload and real estate growth trends.
    I will tell you that, as I go around to meet with judges in 
and around the country, one of the questions I ask, not only 
how is our current team doing in managing that courthouse and 
how is that operating, how does it meet your need, but I also 
ask, what is the case load burden? What is the case load in 
courts? You know, it generally is going down because of 
mediation and settlement out of court versus the cost of 
litigation.
    So what I am saying, a lot of these recommendations--we 
institutionalize a lot of systematic methods for courtroom 
sharing.
    Ms. Norton. Say that again? I am sorry.
    Mr. Winstead. We instituted a systematic methodology for 
courtroom sharing. As you are well aware on this Committee----
    Ms. Norton. A systematic what?
    Mr. Winstead. Methodology.
    Ms. Norton. Yeah, well, what is it?
    Mr. Winstead. Based on past use, obviously, and judgeships 
coming on stream.
    Ms. Norton. Excuse me, past use?
    Mr. Winstead. We are still operating under both the San 
Diego resolution which you all passed here in terms of 
courtroom sharing. I know they are still doing a report on that 
in terms of workload.
    We eliminated a majority of the library space because of 
what I said before. We reviewed lighting criteria to try to 
include the same standards, that they and GSA had the same 
standards. We revised a requirement for carpet. Instead of a 
42-ounce carpet, to something that have greater choices. We 
reduced the expectation for elaborate millwork, trying to work 
with the courts to save money in both their concern for rent. 
We capped the courtroom ceiling heights at 16 feet. We reduced 
the minimum----
    Ms. Norton. You will help us--not by that kind of list----
    Mr. Winstead. Okay.
    Ms. Norton. --but by--important as it is, I don't want to 
minimize that. You will help us by equating square foot to 
reduction in costs. I want to see that, please.
    Mr. Winstead. All right.
    Ms. Norton. That I will give you 60 days to do, because it 
looks like it hasn't been done.
    We--for example, we don't know what reducing built-in 
bookcases would be. I mean, I clerked for a Federal judge, and 
I am not sure you save a lot of money.
    Mr. Winstead. No, but the reduction of library and probate 
space.
    Ms. Norton. But a billion bookcases.
    Mr. Winstead. No, we are not going to save a lot of 
bookshelves.
    Ms. Norton. I mean, any office has to have some 
bookshelves. I don't even know how that would even save money.
    Mr. Winstead. Well, we are talking about reducing the 
library space, basically eliminating it.
    Ms. Norton. Okay, my information was built-in bookcases, 
reducing the library space because they can find that 
elsewhere. They all do have books in their offices as well. 
They are all Federal courts. They don't need access to torts 
and every State law there is. So I understand what you are 
saying.
    We are down to that kind of nitpicking, because we have 
that kind of lack of money.
    Eliminate jury boxes for bankruptcy courtrooms. We don't 
know anything about that unless you equate it to savings.
    We are pleased that you have gone through this process. 
Now, you don't want been to lose the credit by leaving us 
without any understanding of what it does for costs, 
particularly since the Federal Building Fund is deeply 
implicated and since you have given a pass to the courthouses 
on it, as we learned.
    So, if you would, within 60 days prepare a cost-saving 
analysis based on these space-saving analysis. You are moving 
us forward in a very tough area that the courts have resisted, 
and I very much appreciate that.
    Ms. Norton. Let me ask you quickly--oh, my goodness--about 
security standards. We now have a total, you-are-on-your-own 
agency had to do with security wherever you want to. You add 
costs to the project by apparently designing your own security 
standards.
    I have had a terrible experience, and I am going to have a 
hearing on this one, and that is, very kindly, the 
Transportation building--it took us two decades, I guess, 
because they were working before both of us got here. It is up.
    We learned about the security because we have worked with 
them. We had an event there. It is a beautiful building. We 
were very pleased with the event, very pleased with their staff 
and how they handled it. They have entrances on both sides.
    Now, mind you, this was--would have been even for Federal 
workers. We had an event. Frankly, it was an event--your folks 
came, were extremely helpful to us to make sure that we were 
looking for space all over the city, including space, would you 
believe, 5 minutes from the Capitol, because it isn't in the 
middle of town or K Street, had been avoided.
    So we are simply trying to do the kind of marketing and 
hope that GSA took note because that is the kind of marketing 
we expect them to do.
    The GSA was wonderful in setting up something outdoors for 
us for breakfast, indoors, and then someone proposed to staff 
that they do a walking tour around the building and you could 
then see what they are going to do. I said, are you crazy?
    In NoMa, it was precisely the site of some not-yet-built 
structures that was a deterrent to many agencies. Some of them 
still don't understand that this is going to be the only new 
part of town.
    So the last thing--even though some of these buildings and 
the mall are going to be up, frankly, in 2009, the last thing 
you want to do is to give them a walk anywhere near that--well, 
you know, on one side there is a place that they have 
concerts--of course, there are no concerts going on now. But 
all over here is where this bill the GSA worked with me on, the 
Federal Center bill, all that is just being built. So I say 
they would have to be out of their mind to, say, taking a 
walking tour, which would include looking at those spaces.
    Then we walk all around the building--what street would 
that be? M Street. By the way, if you are a race walker the way 
I am, although not in high heels, you might say, well, this is 
an exercise. Of course, you are doing that in the heat of July 
in Washington.
    So I--you know, I came over to do my own site inspection; 
and I said to the people, are you crazy, what about a door? 
This was to be attended, yes, by some developers, but mostly by 
Federal workers. They were set up for people to come in on the 
other side. Even though this was mostly Federal employees, that 
was a way to get people to walk all around a huge building and 
come in on the side they wanted to.
    Upon further investigation, I learned that this low-target 
building--al Qaeda is--and all the chatter we hear on the 
Homeland Security Committee has not yet focused on the 
Department of Transportation. We also learned that you could 
get in the building with, if you are a Federal employee, show 
your ID.
    But if, for example, you were, like the BID building--the 
BID is each part of the city now has a business association; 
and, in fact, the GSA, the Federal agencies are part of it 
because they keep the area up. It is a terrific thing, with 
great cooperation from GSA and its buildings.
    Well, the person there, who is a neighbor, could not enter 
the Department of Transportation unless somebody came down, 
couldn't enter--who was an employee--to bring them in. That 
means, of course, nobody can go to the cafeteria.
    The thing that most got me was not so much the Federal 
workers but 20 million people who come to visit their Member of 
Congress every year, some of whom will find their way down 
there and will say, wow, I have got to go to the john. Here is 
a Federal building.
    I am going to alert you, before you hear from some Member 
of the House and Senate, you try denying entrance of a taxpayer 
to a premise that taxpayer pays for, and you will see smoke 
coming out of this building. That comes because you have been 
sitting on a Committee that has allowed people to have their 
own way when it comes to security transactions, whether it is 
high or low security. I need an explanation for that when you 
have what amounts to abuses of people entering the business for 
ordinary purposes.
    I can say to you that I have seen different policies in 
agencies that I regard as higher targeted or security agencies, 
have seen--the most stringent policy I have seen is at the 
Department of Transportation. I need you to explain how that 
could have possibly happened.
    Mr. Winstead. Well, I do believe, Madam Chairman, it is, 
you know--the situation that you mention is frustrating. I know 
it was raised again on June 6.
    Ms. Norton. How did it happen? Who made the decision?
    Mr. Winstead. Well, the Building Security Committee, of 
which GSA has a part, as well as, obviously, the Department, 
DHS, and the Federal Protection Service, and the tenant agency, 
DOT, sets these standards for security in buildings, depending 
upon the IFC standards and the security rating of that 
building, 1 to 4.
    Ms. Norton. What is the security rating of the--we know it 
is all these Federal agencies, headquarters, level 4, but that 
is not a security rating. Don't tell me they have the same 
security rating as the FBI.
    Mr. Winstead. Yes, as you well know, this is a leased 
facility, but it has been rated. It is a new facility. It is 
level 4.
    Ms. Norton. All right. Mr. Winstead, you will never get 
away with answering my questions around the mulberry bush, so 
let me put it directly to you.
    Do you think that is appropriate for the Department of 
Transportation--that kind of requirement I described to you, is 
that appropriate for the Department of transportation?
    Mr. Winstead. Madam Chairman, a level 4 is a high----
    Ms. Norton. I am asking you--let me ask it again. Is it 
appropriate for the Department of Transportation and the FBI to 
have the same requirements for how you enter the building, who 
gets in and what you have to show in order to get in? Is it 
your view that they should have the same requirements?
    Mr. Winstead. Madam Chairman, it is a level 4, the DOT 
building.
    Ms. Norton. Is it your view that at least these two 
buildings, hypothetical, should have the same requirement?
    Mr. Winstead. I am concerned about the inconvenience that 
level 4 at that facility is creating and the evidence of your 
event over there the other day and what it created.
    We follow the lead of the Federal Protection Service in 
their evaluation of the security leads for our tenant agencies. 
Federal Protection Service, as you well know, is a part of DHS. 
I know you had a hearing recently on the Federal Protection 
Service. It is, you know, a headquarter agency. It is the DOT 
headquarters. There is a large staff.
    Ms. Norton. So your answer is, whatever they say, you 
follow their lead?
    Mr. Winstead. No. I think this area deserves--you are 
correct. The biggest concentration of Federal buildings is in 
your district. I think we need to look for aggressively--and 
you suggest this Committee is going to do that--at these kinds 
of issues, the accessibility of the public. This a 1.2 million-
square foot leased headquarters of a Cabinet-Level agency.
    Ms. Norton. Could there be, to the greatest extent 
possible--notice how I have said that--uniformity with respect 
to these policies, bearing in mind the different security needs 
and rankings of the agency?
    Should there be, to the greatest extent possible, a 
presumption about getting into Federal buildings, a presumption 
that all enter until you show you have a different need because 
of security? Would that be the understanding to begin with?
    Mr. Winstead. Absolutely. It makes a lot of sense to have--
and I am concerned as you are that----
    Ms. Norton. Mr. Winstead, I don't know who this Committee 
is, but all of you are going to be before us. Because we are 
going to have not just GSA--it is not just you. We are going to 
have you all before us, and we are going to lay out the record 
of the differences.
    We want the taxpayers to hear about how, when they can go 
in some buildings and not other buildings--we want them to know 
that you can't go in the Department of Transportation at all. 
We want to know that regardless of--unless your emergency, I 
guess, is one, a health emergency, if it is only that you want 
to use the bathroom, you can't go.
    We want to tell them that they built a gorgeous cafeteria 
and that only those inside can use it. We want them to know 
about cafeterias, including that in the House of 
Representatives that all of them can use, and then we want to 
ask all of those who have decided that the agency head--you 
know good and well that is who is making the decision, and not 
your Committee--should decide security policies.
    We want you to defend that. And I wanted to not close this 
hearing without letting you know how outrageous it was that 
this happened at a building that no one would consider to be a 
high-security building, notwithstanding its status as a 
headquarters building.
    And I wanted you to know how unacceptable it will always be 
for a taxpayer to be kept out of a building, and that is what 
would happen to an ordinary taxpayer. There would be no way for 
that taxpayer to get in the building.
    That taxpayer would say, I am sorry, I would like to use 
the bathroom. That would not let that taxpayer into the 
building. That taxpayer would have to know an employee. That 
employee would have to come down. That is indecent.
    It is so unacceptable that you would think that the 
Committee would say we begin with this, free entry, because 
that is how it always was before Oklahoma City. Now, the things 
that all of you, at the very least, must do, to guard the 
security of the employees and visitors----
    Now, beyond that minimum--this is really not rocket 
science. Beyond that minimum, there are differences among you. 
In consultation with the agency and security experts, those 
differences would have to be laid out.
    If I may say so, under no circumstances, at least in the 
District of Colombia, could I envision a circumstance where an 
ordinary citizen could not cross the threshold. If there is 
such a case, you need to come and tell us about that case.
    This is the most high--except for the White House. Now that 
is the only place I know where that rule obtains, and I will 
grant that to the President of the United States.
    But I regard this as a personal insult to taxpayers, and I 
am hearing their insult to you before--one of these days, if we 
were to let this stand, there would be something that caused a 
taxpayer to run straight to the press and say I tried to get in 
XOY building, and they said security says that I can't even go 
into a building that I, as a taxpayer, am responsible for. 
Don't let it get to that the way it had to get to holdover 
leases in the newspapers.
    I have to leave and, in fact, I know I have exhausted you 
with these questions. There are questions for the record, this 
is where the National Capital Region--more than half the 
Federal presence is here. I would like to know the holdover 
status, in detail, of every holdover lease in the National 
Capital Region, how long held over, what the cause of the 
holdover is, when do you expect the holdover to be released. I 
want that within 30 days.
    And I would like to supply--we would like you to supply the 
Committee with a definition of these terms: "new lease, 
succeeding lease, replacement lease, consolidation lease, and 
superseding lease".
    Part of what you have had to go through today is that I 
have sat through 17 years on this Committee with many 
frustrations. Now that I am the Chair of the Committee I feel a 
need and an obligation to try to go at some of these things. I 
feel a very special pressure in this economic climate and I 
feel special pressure in light of the PAYGO rules that the 
Congress of the United States has, I think, correctly adopted.
    Thank you very much for your testimony, Mr. Winstead; and I 
look forward to look working with you on these issues.
    Mr. Winstead. Thank you, Madam Chairman. I appreciate it.
    [Whereupon, at 12:30 p.m., the Subcommittee was adjourned.]

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