[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]
GENERAL SERVICES
ADMINISTRATION'S ECONOMIC
RECOVERY ROLE:
JOB CREATION, REPAIR,
AND ENERGY EFFICIENCY IN
FEDERAL BUILDINGS
AND ACCOUNTABILITY
=======================================================================
(111-7)
HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED ELEVENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 11, 2009
__________
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 VERNON J. EHLERS, Michigan
JERROLD NADLER, New York FRANK A. LoBIONDO, New Jersey
CORRINE BROWN, Florida JERRY MORAN, Kansas
BOB FILNER, California GARY G. MILLER, California
EDDIE BERNICE JOHNSON, Texas HENRY E. BROWN, Jr., South
GENE TAYLOR, Mississippi Carolina
ELIJAH E. CUMMINGS, Maryland TIMOTHY V. JOHNSON, Illinois
ELLEN O. TAUSCHER, California TODD RUSSELL PLATTS, Pennsylvania
LEONARD L. BOSWELL, Iowa SAM GRAVES, Missouri
TIM HOLDEN, Pennsylvania BILL SHUSTER, Pennsylvania
BRIAN BAIRD, Washington JOHN BOOZMAN, Arkansas
RICK LARSEN, Washington SHELLEY MOORE CAPITO, West
MICHAEL E. CAPUANO, Massachusetts Virginia
TIMOTHY H. BISHOP, New York JIM GERLACH, Pennsylvania
MICHAEL H. MICHAUD, Maine MARIO DIAZ-BALART, Florida
RUSS CARNAHAN, Missouri CHARLES W. DENT, Pennsylvania
GRACE F. NAPOLITANO, California CONNIE MACK, Florida
DANIEL LIPINSKI, Illinois LYNN A WESTMORELAND, Georgia
MAZIE K. HIRONO, Hawaii JEAN SCHMIDT, Ohio
JASON ALTMIRE, Pennsylvania CANDICE S. MILLER, Michigan
TIMOTHY J. WALZ, Minnesota MARY FALLIN, Oklahoma
HEATH SHULER, North Carolina VERN BUCHANAN, Florida
MICHAEL A. ARCURI, New York ROBERT E. LATTA, Ohio
HARRY E. MITCHELL, Arizona BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, Pennsylvania ANH ``JOSEPH'' CAO, Louisiana
JOHN J. HALL, New York AARON SCHOCK, Illinois
STEVE KAGEN, Wisconsin PETE OLSON, Texas
STEVE COHEN, Tennessee
LAURA A. RICHARDSON, California
ALBIO SIRES, New Jersey
DONNA F. EDWARDS, Maryland
SOLOMON P. ORTIZ, Texas
PHIL HARE, Illinois
JOHN A. BOCCIERI, Ohio
MARK H. SCHAUER, Michigan
BETSY MARKEY, Colorado
PARKER GRIFFITH, Alabama
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
(ii)
?
Subcommittee on Economic Development, Public Buildings, and Emergency
Management
ELEANOR HOLMES NORTON, District of Columbia, Chairwoman
BETSY MARKEY, Colorado MARIO DIAZ-BALART, Florida
MICHAEL H. MICHAUD, Maine TIMOTHY V. JOHNSON, Illinois
HEATH SHULER, North Carolina SAM GRAVES, Missouri
PARKER GRIFFITH, Alabama SHELLEY MOORE CAPITO, West
RUSS CARNAHAN, Missouri Virginia
TIMOTHY J. WALZ, Minnesota MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, ANH ``JOSEPH'' CAO, Louisiana
Pennsylvania, Vice Chair PETE OLSON, Texas
DONNA F. EDWARDS, Maryland
THOMAS S. P. PERRIELLO, Virginia
JAMES L. OBERSTAR, Minnesota
(Ex Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ 0vi
TESTIMONY
Gordon, Harry, American Institute of Architects, accompanied by
Anthony Costa, Acting Commissioner, Public Buildings Service... 8
Kampschroer, Kevin, Director, Office of Federal High-Performance
Green Buildings................................................ 8
Lehrkinder, Leslie, Acting Director, Real Estate and Facilities
Management, Internal Revenue Service........................... 8
Prouty, Paul, Acting Administrator, General Services
Administration................................................. 8
PREPARED STATEMENT SUBMITTED BY MEMBERS OF CONGRESS
Carnahan, Hon. Russ, of Missouri................................. 33
Diaz-Balart, Hon. Mario, of Florida.............................. 34
Norton, Hon. Eleanor Holmes, of the District of Columbia......... 39
Oberstar, Hon. James L., of Minnesota............................ 43
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Gordon, Harry.................................................... 46
Prouty, Paul F................................................... 57
ADDITIONS TO THE RECORD
Alliance to Save Energy, American Council for an Energy-Efficient
Economy, etc., Ladeene A. Freimuth, written statement.......... 63
National Institute of Building Sciences, Henry L. Green,
President, written statement................................... 68
U.S. Green Building Council, written statement................... 70
[GRAPHIC] [TIFF OMITTED] T7412.001
[GRAPHIC] [TIFF OMITTED] T7412.002
[GRAPHIC] [TIFF OMITTED] T7412.003
HEARING ON GSA'S ECONOMIC RECOVERY ROLE: JOB CREATION, REPAIR, AND
ENERGY EFFICIENCY IN FEDERAL BUILDINGS AND ACCOUNTABILITY
----------
Wednesday, February 11, 2009
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 9:00 a.m., in
Room 2167, Rayburn House Office Building, the Honorable Eleanor
Holmes Norton [Chair of the Subcommittee] presiding.
Ms. Norton. The Subcommittee will come to order. Good
morning, and I appreciate you being here this morning for one
of the most important hearings we will hold this session,
involving the General Services Administration and the stimulus
package.
The GSA provision for energy efficiency repairs and
construction of Federal buildings in the American Recovery and
Reinvestment Act, H.R. 1, is a classic example of stimulus
spending by Government that has the best proven record for
meeting three stimulus tests simultaneously: to provide jobs,
to stimulate the economy broadly, and to meet the existing
responsibilities of Government for infrastructure. This job
creation bill will revive the construction sector of our
economy, and the infrastructure jobs created in turn will feed
and help revive other sectors down the line.
Moreover, unlike the other necessary work funded in this
bill, which is largely delegated to States and localities, the
GSA section provides funds for Federal facilities for which the
Federal Government alone is both responsible and accountable.
The GSA infrastructure provision provides funds from the
Federal Government directly to a Federal agency, the GSA, for
maintaining and upgrading essential Federal facilities of
various kinds found in every State.
The House-passed version of H.R. 1 authorizes $7.7 billion
for alterations and construction nationwide, guided by the goal
that the funds and activities have the maximum effect on energy
efficiency and conservation consistent with the funding
provided. Border stations receive $1 billion with the same
energy efficiency mandate, and the GSA Inspector General
receives $15 million to participate in oversight, auditing, and
reporting as required in the bill.
The Senate-amended version of the bill currently contains
$5.5 billion--too little--in light of the job creation purpose
of the bill and the needs of the Federal Government the bill
addresses. Of that amount, the Senate would dedicate $1.2
billion for construction and repair of border stations and $2.5
billion for what it calls measures necessary to convert GSA
facilities to high-performance green buildings, as defined by
the energy act that we passed last year. There is an amount
identified in the Senate bill as $1.4 billion for Federal
buildings and courthouses.
We are left to assume that the Senate version is guided by
the President's stated energy efficiency goals for this section
of the stimulus, but the energy efficiency requirement, as well
as a mandate for energy savings and job creation, should be
stated explicitly, as the House version does. The Senate
language concerning measures--and that is its word--to assure
high-performance green buildings needs to be tightened so that
taxpayers are assured that funds will go directly to jobs and
infrastructure, and not, for example, to spending on
consultants or studies, which would undermine the purposes of
the American Recovery and Reinvestment Act.
Notably, President Obama, in his many appearances
concerning this bill, almost always mentions making Federal
buildings energy efficient. In his first prime time press
conference to the Nation as President, the President went out
of his way to answer critics of funds for Federal buildings. He
said, ``When people suggest a waste of money to make Federal
buildings more energy efficient, why would that be a waste of
money? We are creating jobs immediately by retrofitting these
buildings and we are saving taxpayers, when it comes to Federal
buildings, potentially $2 billion. We are reducing our
dependence on foreign oil in the Mideast. Why wouldn't we want
to make that kind of investment?''
It is understandable why President Obama focuses on energy
savings. Otherwise, the Federal Government is directly
responsible for wasting taxpayer funds on high-energy costs
associated with lighting, heating, air conditioning, and other
energy needs for Federal buildings that range from warehouses
to office buildings. And the Federal Government is directly and
needlessly subsidizing Mideast oil cartels with massive amounts
of purchases every day that it delays the implementation of
energy-efficient systems known to yield large energy savings in
only a few years.
GSA's backlog of needs to repair and maintain its vast
inventory has grown exponentially, and with it, needless
spending created by inefficient energy sources. Our staff has
worked closely with GSA to assure that its repair and
rehabilitation projects in this bill can be implemented
quickly, while providing many jobs, at a variety of skill
levels, meeting the primary purpose of the bill to provide jobs
which stimulate the economy. Among the jobs associated with GSA
construction projects are plumbing, electrical, mechanical,
carpentry, sheet metal work, and today a variety of green jobs
at various skill levels.
I have an amendment in this bill for pre-apprenticeship and
apprenticeship on-the-job training. This amendment is important
because the Federal Government seized funding training programs
25 years ago for the construction trades and, therefore, bears
significant responsibility for the profile of the construction
sector, which is largely white and male. The modest trading
funds in this amendment will allow minorities and women who
have not been trained in the skill trades in significant
numbers--although many, of course, do qualify for these jobs--
to get a foothold in the construction industry.
Ironically, the construction trades had experienced a
shortage of skilled trades workers until this recession. My
amendment will prevent antagonism and controversy between
minorities and women on the one hand and the large number of
unemployed construction workers on the other. The amendment is
also necessary because Title VI of the 1964 Civil Rights Act
bars the use of Federal funds for jobs and contracts that may
involve discrimination against minorities and women.
The GSA provisions of the House bill require that each
project contain a significant energy component and will help
put the Federal Government, with its large procurement
possibilities, in a leadership position for energy-efficient
buildings, allowing the taxpayers to receive the awards of
lower energy costs as well. Our focus on the repair and
authorization of existing Federal buildings can also preserve
the valuable federally-owned inventory for occupancy and other
vital needs.
Repairing valuable Federal real estate, in time, will
reduce GSA's growing dependence on leasing that is a direct
result of the neglect and deterioration of its owned inventory.
Leasing, instead of ownership, leads to depletion of the
Federal Building Fund, the source of funding for repair and
alteration. Thus, the repair of the Nation's public buildings
presents a unique opportunity to bolster the Federal Building
Fund, which in turn provides funds for the maintenance, repair,
and preservation of these same Federal buildings in a revolving
fund.
This Recovery Act will jump start an urgent round of
energy-oriented repairs of valuable buildings, ensuring that
they remain viable capital assets of the Federal Government.
Today's hearing is as important as any concerning the funds in
this comprehensive stimulus bill because, unlike other funds in
the American Recovery and Reinvestment Act, GSA itself, the
Federal Government itself, not the States, will be
administering these funds.
Therefore, this Subcommittee intends to provide frequent,
direct, and vigorous oversight of GSA's capital priorities and
its methods for achieving them. GSA transparency in all its
decision making will be mandatory, including the buildings it
intends to repair, the nature of the alteration work, and the
green building measures that the agency plans to implement.
We begin the necessary oversight today evaluating the
rationale and details of the GSA portion of the bill. By the
way we conduct our oversight, the American people will be able
to judge for themselves whether Government resources are being
used to achieve the explicit goals of the bill.
This morning we have invited not only GSA representatives
responsible for carrying out the mandate of the American
Recovery and Reinvestment Act, we have asked for a
representative of an agency that will benefit to give us a
real-time and accurate idea of what these funds can accomplish.
In addition, we have invited a witness from outside the
Government to help us reach for objective measures of best
practices. We look forward to learning what needs to be
accomplished and how it will be done. We are grateful, very
grateful, to all of today's witnesses for their testimony.
I am pleased to ask our new Ranking Member if he has any
remarks.
Mr. Diaz-Balart. Thank you, Madam Chairman. Let me first
thank you for this very important hearing. I agree with you, it
is a very important hearing. I also want to echo your words
about our gratitude for the witnesses that are here.
You are all busy, so we appreciate your being here.
We must ensure that effective oversight is there to avoid
wasteful spending, so I agree with the Chairwoman. We cannot
afford another repeat of the TARP bailout fiasco that we have
been hearing and reading about. In this case, Congress is
proposing spending billions more and we have an obligation to
ensure that those funds will be spent appropriately, and
without waste and without problems.
Last month, the House passed the American Recovery and
Reinvestment Act. Yesterday, we all know, the Senate passed out
their version. Now, while the stated purpose of this
legislation is to create jobs and to promote economic recovery,
there are some real questions, frankly, as to whether the
different proposals would, in reality, provide the taxpayer
with the best return on their investment, the best bang for the
buck.
Now, specifically, here we are focusing on GSA and the
General Services Administration. The House-passed bill includes
$7.7 billion for the Federal Building Fund. The Senate is now
proposing $5.5 billion. That is in addition to the billions
more that are going to the individual agencies for their
capital projects, obviously.
Now, while the proposal provides some additional funding to
the Inspector General and some transparency provisions, I
clearly am very concerned still that the provisions wouldn't
provide for meaningful congressional oversight of capital
projects, and some of those things that we have been talking
about are not included in this legislation.
Now, we know that at the Full Committee hearing we heard,
Madam Chairwoman, last month regarding the stimulus project
proposal that the GSO recommended three guiding principles for
GSA projects, and they are the following: number one, to create
well defined goals based on identified areas of interest;
number two, to incorporate performance and accountability,
performance and accountability into funding decisions; and,
three, employ the best tools and approaches to emphasize return
on investment.
None of these practical suggestions to help avoid wasteful
spending of the taxpayers' dollars has been incorporated into
the legislation, none of them. Instead, we have mechanisms that
will only serve to highlight the problems after the money has
already been obligated or spent. I repeat that, after the money
has been either obligated or spent, which is highly
unacceptable.
We know that the potential for waste is huge. Federal real
property has been on the GAO's high-risk list since 2003 and,
according to the GAO, longstanding problems in the Federal real
property area have multi-billion dollar cost implications to
the taxpayer.
Now, unfortunately, the proposals pending in Congress would
appropriate billions of dollars with little accountability. The
funds for GSA will be going to the hands of the GSA
bureaucracy. They would determine, the bureaucracy would
determine how to spend those funds, however the bureaucracy
sees fit. In fact, there seems to be little that would prevent
funds from being used for projects that this Committee
specifically has intentionally rejected.
We can, and need to, hold hearings--and that is why I am so
grateful to the Chairwoman, who is very aggressive about
oversight hearings like today's. But we also know that GSA will
be responding to competing interests, and we understand how the
process works. And given that there is explicit language in the
Senate proposal regarding courthouses, for example, GSA could
very well decide to spend $1 billion in a single project that
this Committee repeatedly refused to approve because of the
wasteful nature of that proposal.
Now, while such projects would be reported to the
appropriations committees and posted on the newly created
recovery.gov website, not even the standard checks and balances
normally in place for such projects would apply. It is hard to
believe. The proposed bill not only ignores the prospectus
process normally required for such projects, this Committee is
not even included in the reporting requirements mandated in the
legislation. Again, not acceptable.
Another concern that I have relates to whether the proposal
focuses enough on the actual creation of jobs, which obviously,
as we know, is the stated purpose of this legislation. Now, for
example, while energy efficiency is something that the Federal
Government should strive for and that we all support, it seems
that energy efficiency and conservation is given greater
consideration in the pending proposals than is job creation.
Now, remember, this is supposed to be a job creation bill. That
is the purpose of the bill.
The House-passed bill gives priority to projects that will
create the greatest impact on energy efficiency and
conservation. The Senate version goes even further, to require
that nearly half of the proposed funds are used to convert GSA
facilities into high-performance green buildings as defined by
the Energy Independence and Security Act, not to create jobs,
which is supposedly the purpose of the legislation.
While creating efficient buildings is a noble goal that we
all share and that obviously might have long-term benefits, it
seems to trump consideration of the immediate need for job
creation and economic stimulus, which, I repeat, is supposedly
the purpose of the bill. If we are going to spend billions of
taxpayers' dollars to stimulate the economy and create jobs,
as, I repeat, supposedly is what the bill is for, we should
have a bill that ensures that such a stimulus effect is
maximized and is prioritized.
One option, for example, is using acquisition as a
stimulus. Now, while the proposed bill does not explicitly
mention that you can acquire property as an option, they do
allow for projects authorized under existing GSA authorities,
which may include acquisition of buildings. Now, such
authorities should be encouraged, and I am pleased that GSA's
testimony says that it is exploring those options.
There are many development projects that have either
stalled or are at risk of, frankly, stalling because of the
economy. This potentially creates an opportunity for the
taxpayers to acquire needed property at a significant savings
to the taxpayer and also putting people to work immediately,
which is the supposed purpose of this bill. At the same time,
such investment will help to stabilize economic development
projects that local economies are relying upon to help their
neighborhoods and create sustainable jobs.
Again, however, I remain concerned. This legislation could
be a good opportunity, could be a great opportunity to put in
place real solutions that may help ensure and address ongoing
challenges related to real property management. Instead,
unfortunately, the proposed legislation seems to do little to
address these concerns and, in fact, may lead to more wasteful
spending. We should not repeat the mistakes made on the bailout
bill, on the TARP bill, of writing a blank check. There must be
meaningful oversight and accountability.
I am now, Madam Chairman--and I am working on it right
now--drafting a resolution that will, at the very least,
provide some direction to GSA on avoiding wasteful projects and
spending. That resolution would make clear that funds should
not be spent on projects that this Committee has rejected,
include this Committee on any reporting requirements, and
ensure that we know the number of jobs that each project will
generate. I hope that this resolution could be a first step--
again, just a first step--in providing some guidance to GSA and
to minimize the very real chance of wasteful, out-of-control
spending. I plan to introduce this legislation later today, and
I hope that other Members of the Committee would join me in
sponsoring it.
Now, again, while there are very worthy and necessary
projects in the pipeline that need to be funded, and which
actually may help to support needed jobs, we must ensure that
such large commitments of taxpayer dollars are properly used
and managed, and we must ensure that the priority is job
creation. That is the purpose of this bill.
So I hope that these issues can be addressed and I look
forward to hearing from the witnesses on these and other
witnesses. I want to again thank the Chairwoman for her
leadership on these issues.
Ms. Norton. I want to thank the Ranking Member for joining
us in our concern that there be more oversight than one might
expect because of the nature of this bill. I do want to say for
the record that we had a very considerable testimony from the
construction industry about green jobs of every kind. We
believe that when you are retrofitting a building plus making
it green, you are using construction workers plus a set of
workers, many of them with special skills, as, if anything,
add-ons of the kind you never would have used if you were
simply repairing buildings.
I also want to say for the record that the green sections
of this bill to save taxpayers' money, which now is pouring,
pouring money down the drain for Mideast oil, must be a part of
this bill, and we are pleased at the synergy between the energy
savings and the job creation that we saw in the day-long
hearings that the Chairman held.
And I will ask Ms. Edwards if she has any opening remarks.
Ms. Edwards, do you have any opening remarks before we begin?
Ms. Edwards. I do, Madam Chairwoman, just very briefly. And
thank you very much for convening this hearing.
And thank you to our witnesses in advance for your
testimony, and I look forward to it. As you may know, I
represent Maryland's 4th Congressional District, which covers
both Prince George's and Montgomery County in the national
capital region, and I will say I think that there is great
consistency between the idea of creating green jobs, saving
money, and really investing in the future. These are not
incompatible and inconsistent ideas.
In the 4th Congressional District, we are home to the Food
and Drug Administration, the Census Bureau, and NOAA, all
buildings built very recently that have amazing green
components to them, and with using some of the latest
technologies and techniques that really demonstrate to us that
the Federal Government can really be in the business of
creating a model for how you develop and build green buildings,
create good jobs, and save money for the taxpayer. So I would
like to see more of that going on.
I look forward to your testimony about the way in this
stimulus package we also balance the distribution of the
projects, particularly the national capital region, so that all
of the capital region, particularly those areas that are the
most disinvested, receive the benefit of this stimulus and of
the jobs and the jobs for the future. So I look forward to
hearing some of your testimony about those aspects of the way
that GSA looks at its leases and buildings and the projects
that are in the pipeline so that the entire national capital
area benefits comparably in the projects that are being
created.
I would also like to point to the Chairwoman's leadership
in making sure that we also have training opportunities so that
the jobs we are creating down the line are available to people
who may not be in the skill set that we have right now, but
down the line will, working with our apprenticeship programs
and our job corps programs so that we are training up the folks
who can come into this industry and build in the kind of way
that makes the most sense for the taxpayer.
And if ever there were an environment in which the watch
words are accountability and transparency, we are in that
environment now. So I fully expect that from this Subcommittee
and from your continued testimony and the oversight that we
will provide, that we offer the taxpayer the kind of
accountability and transparency they deserve for this
significant expenditure in funding, and I look forward to your
testimony. Thank you.
Ms. Norton. Thank you, Ms. Edwards.
We will go to our first witnesses and then ask those, after
they testify, who are accompanying them to come forward for
questioning. First, Paul Prouty, who is the Acting
Administrator of General Services Administration. Mr. Prouty?
TESTIMONY OF PAUL PROUTY, ACTING ADMINISTRATOR, GENERAL
SERVICES ADMINISTRATION; HARRY GORDON, AMERICAN INSTITUTE OF
ARCHITECTS; ACCOMPANIED BY ANTHONY COSTA, ACTING COMMISSIONER,
PUBLIC BUILDINGS SERVICE; KEVIN KAMPSCHROER, DIRECTOR, OFFICE
OF FEDERAL HIGH-PERFORMANCE GREEN BUILDINGS; AND LESLIE
LEHRKINDER, ACTING DIRECTOR, REAL ESTATE AND FACILITIES
MANAGEMENT, INTERNAL REVENUE SERVICE
Mr. Prouty. Madam Chair, Ranking Member Diaz-Balart, and
Members of the Subcommittee, my name is Paul Prouty, and I am
the Acting Administrator of the General Services
Administration. I am pleased to have the opportunity today to
discuss GSA's role in the Nation's economic recovery. My full
statement was submitted to the Committee and, with your
permission, I will now give a brief summary.
I will also ask the Subcommittee's permission that Mr.
Anthony Costa, Acting Commissioner of the Public Buildings
Service, and Mr. Kevin Kampschroer, Acting Director of our
Office of High Performance Green Buildings, be allowed to join
me at the conclusion of my prepared remarks to assist in
answering any questions the Subcommittee may have.
I would also like to thank Leslie Lehrkinder, Acting
Director of Real Estate and Facilities Manager with IRS, and
Harry Gordon, with the American Institute of Architects, for
joining us today.
GSA has a unique and exciting opportunity to be part of the
solution to this Nation's economic crisis. By investing in our
critical infrastructure projects, we can help stimulate jobs in
the construction, manufacturing, and real estate sectors while
supporting long-term growth in energy-efficient technologies,
alternative energy solutions, and green construction.
These sectors--construction, manufacturing, and real
estate--are among the hardest hit by the current economic
crisis and we have the ability to help them. GSA can get money
flowing directly to the building industries, to construction
workers, electricians, plumbers, heating and air conditioning
mechanics, carpenters, architects, engineers, and others in the
design and construction fields, and through them to suppliers
and manufacturers. We can help get people back to work quickly.
Not only will we be helping to create jobs in the building
construction field across the Country, we will be creating a
market for skilled building technicians who will manage and
operate these new technologies. By reinvesting in existing
structures and building high-performance green buildings, we
will lessen our dependence on foreign oil and encourage the
development and use of alternative energy technologies.
Currently, GSA spends almost a half a billion dollars a
year on utilities. High-performance green buildings foster
energy efficiency and promote building systems that work
together. By retrofitting buildings to be high performing, we
can realize immediate savings on our utility bills. These
buildings are not only high-performing, they will also enable
the Federal workforce to perform at the highest level.
At the same time, we can make meaningful improvements to
our portfolio that will yield a sound financial return, restore
our crumbling infrastructure, and ensure these important assets
remain available to meet the future needs of Federal agencies
and serve local communities and their citizens.
Today, I would like to summarize the four major areas of
responsibility described in my prepared statement. They are:
one, project identification; two, energy efficiency and green
buildings; three, project execution; and, four, transparency
and reporting.
Project identification. I will begin by summarizing how we
identify needed projects that achieve the reinvestment goals.
We convened a team consisting of national and regional GSA
professionals in several disciplines to review projects that
are likely candidates for this funding. We have a large number
of new construction, repair and alteration, and below
prospectus projects that are already in the pipeline and ready
to go.
To this universe we are adding projects that have clear
energy efficiency components with good return on investment and
that promote the development of alternative energy
technologies. We also are enhancing the existing projects to
incorporate the latest technology, reduce energy consumption,
and increase renewable energy generation.
As we review potential projects, the two most important of
several criteria are how fast we can create jobs by getting
shovels in the ground and how much added energy efficiency we
can gain from projects ready for construction award. Besides
creating jobs, investment in our infrastructure provides an
unprecedented opportunity for GSA to improve the performance of
our buildings. These investments will help reduce our energy
consumption and cut maintenance and utility costs, reduce our
backlog of repair and alteration needs, prevent the
deterioration of our valuable real property, and prolong the
useful life of our building assets.
In addition, we can rely less on lease space to house
Federal agencies. In the past, we have had to move people out
of federally owned space that could no longer meet their needs.
If it is included in the legislative priorities, we have
identified future building projects that could become
Government construction rather than lease construction.
I want to emphasize that no project is on our list if it
does not deliver a positive return on investment.
Turning next to our energy and green building
responsibilities. GSA is required to reduce our energy
consumption and lessen our dependence on fossil fuels. We are
looking for every opportunity to improve the energy efficiency
components of existing designs. Many improvements are as simple
as substituting more efficient equipment or adding components.
Some examples we have already identified are: one, providing
additional installation; two, installing variable frequency
drives to reduce energy and extend the life of mechanical
equipment; three, converting parking structure lighting to
light-emitting diode, LEED. LEEDs dramatically lower energy
consumption, improve safety and visibility. LEEDs also lower
future maintenance costs because they last longer than typical
parking lot lights. And, four, retrofitting or replacing less
efficient windows.
By using well established contracting techniques such as
design-build, we can start work quickly on existing designs and
concurrently improve other project designs with energy-
efficient approaches.
To further streamline our energy efficiency improvements,
we have identified and will continue to identify a number of
initiatives that can rapidly be deployed in many buildings.
Some examples of these are, first, installing intelligent
lighting systems to use daylight rather than electric lights
and to use lower-level ambient light with task lights where
needed; second, replacing old, inefficient roofs with either
ENERGY STAR membranes, integrated photovoltaic panels bonded to
the membrane, or planted roofs; third, accelerating the
installation of advanced meters to help us better manage
buildings. By providing instantaneous information on a
building's energy use, we can take immediate action to respond
to fluctuations.
In short, we are looking for every opportunity to quickly
optimize our reinvestment funds by increasing building energy
performance, cutting operating costs, and reducing our
dependence on fossil fuel.
Next I would like to address our project execution
responsibilities, or what we describe as getting the work done.
We are looking for new, faster ways of delivering our
renovation and construction projects. To manage the work
expected with the large influx of capital, we are focusing on
three areas. They are: management, measurement, and tracking
and reporting. We will be supporting regional program personnel
with a disciplined approach to standard business processes,
communication plans, updated policy and guidance, consistent
lines of authority, and consistent training.
Given the complexity of the project management
responsibilities, GSA has formed a nationally managed,
regionally executed Program Management Office, or PMO, which is
dedicated to managing reinvestment-funded projects. It will be
staffed with project management experts and will draw from
resources across the Public Building Service, Federal
Acquisition Service, and other parts of the agency. The Program
Management Office will maintain an aggressive schedule and will
be supported and mirrored by teams in each region.
In the GSA acquisition community, we are exploring a
variety of tools that can be customized, standardized, and
consistently used to support the reinvestment initiative. For
example, we are using consistent, standardized scopes of work
and specifications. In addition, we will use existing contract
vehicles like indefinite delivery, indefinite quantity
contracts, and GSA scheduled contracts. In all these
acquisitions, GSA will seek competition within the marketplace
and will strive to maintain our good record of outreach and
support to small businesses.
Measurement is a key component in managing the reinvestment
initiative. Management of these precious reinvestment funds
relies on accurate measurement, reporting, and tracking. GSA
has business measures that are widely considered to be among
the best in the industry. We currently use several performance
measures to track the progress and budgets of our capital
projects. We will apply these measures to track the design
process and the progress of reinvestment projects.
We also have well established systems to measure our
contract and energy performance. To meet the anticipated
increase in volume, as well as the need for greater
transparency in reporting for reinvestment-funded projects, we
will be expanding and enhancing these measures.
Our infrastructure reinvestment requires greater
accountability, transparency of actions, and reporting
requirements. GSA will be taking the lead to launch and manage
recovery.gov, the official website of the Federal Government,
which will report the ongoing progress on the reinvestment
funding for the American public. We are also ensuring that our
financial systems will track information at the required level
in order to meet the recovery.gov requirements.
Finally, as part of the proposed American Reinvestment and
Recovery Act, GSA is being asked to purchase and promote
energy-efficient motor vehicles for Federal fleets. We stand
ready to help stimulate that sector of our economy as well.
Today, I have described GSA's readiness to contribute to
our Nation's economic recovery, to address strategic energy
goals, and to make financially sound and long-overdue
reinvestment in our public buildings. We fully recognize this
is an extraordinary opportunity and we are ready to move
forward with speed, tempered by careful consideration of our
procurement responsibilities and our responsibilities and
accountability to the American taxpayer. We are eager to work
with you and other Members of this Subcommittee as we engage in
this important work.
Madam Chair, Ranking Member Diaz-Balart, this concludes my
statement. I and my colleagues will be pleased to answer any
questions that you or any other Members of this Subcommittee
may have.
Ms. Norton. Thank you very much, Mr. Prouty.
Mr. Gordon of the American Institute of Architects.
Mr. Gordon. Chairwoman Norton, Ranking Member Diaz-Balart,
and Members of the Subcommittee, good morning. I am Harry
Gordon, FAIA, the Chairman of Burt Hill, an international
architecture and engineering firm, and I am appearing today on
behalf of the American Institute of Architects, the AIA.
My architectural firm, Burt Hill, has designed over 20
million square feet of buildings nationwide that incorporate
high-performance building features. These buildings save 40 to
50 percent of the energy used by regular buildings; save up to
80 percent of municipally supplied water; produce less
pollution, reducing ozone alert days and global warming;
provide healthy and productive working and living spaces for
people; and generally do not cost more than conventional
buildings.
On behalf of the 86,000 AIA members and the 281,000
Americans who work for architectural firms nationwide, I would
like to thank you for the opportunity to appear today. I speak
before you at a critical juncture in our Nation's history. The
collapsing economy presents us with a challenge that we need to
face, but also an opportunity to take bold steps that will
strengthen our Country and its people for years to come.
Just yesterday, the Senate passed a massive economic
recovery bill and, as I speak, a conference committee is
meeting to produce a final bill for President Obama's
signature. The differing bills passed by the House and Senate
include a number of critical priorities that will stimulate the
economy through investments in our Nation's buildings.
Unfortunately, the Senate bill drastically reduces funding for
GSA's Federal Building Fund and high performance Federal
buildings, as compared to the House bill. The AIA and its
partners in the design and construction industry strongly urge
Congress to include the House-passed funding levels for the GSA
Federal Building Fund and for high-performing Federal buildings
in the final version of H.R. 1 that it sends to President
Obama.
Investing in green Federal buildings will create jobs,
reduce energy costs, increase the value of GSA's portfolio, and
ultimately save taxpayers money. A significant investment in
high-performance Federal buildings as a part of economic
recovery legislation is not only warranted, but vital for the
continued economic and environmental health of our Nation.
I'd like to address two specific topics. The first is job
creation and the second the benefits of high-performance
buildings.
Speaking first to job creation, investing in the design,
construction, and renovation of Federal buildings will create
thousands of jobs in the design and construction industry at a
time when this sector has all but collapsed. In January alone,
these industries have lost over 110,000 jobs. A number of
recent studies has shown that each $1 million in construction
spending supports about 28.5 full-time jobs. This means that
the $7.7 billion the House appropriated for the Federal
Building Fund could create as many as 219,000 jobs.
I would point out that these are private sector jobs across
a wide range of sectors, from architects and engineers, to
sheet metal and insulation installers and electricians,
plumbers, masons, and carpenters. And because GSA has indicated
that it has nearly 500 projects that are ready to go and can be
obligated in 90 to 180 days, these are jobs that will be
created immediately. It also means that the Senate bill, by
cutting this amount by approximately $2 billion, essentially
eliminates 57,000 job opportunities. This is the last thing
that we should do at this moment.
Both Congress and President Obama have stated that saving
and creating jobs is our Nation's top priority. By investing in
high-performance Federal buildings, Congress can go a long way
toward meeting this goal and do so in an intelligent way that
is good for business, good for the environment, and good for
the American taxpayer.
The second topic I would like to address is the benefits of
green buildings. Both the Federal Government and the private
sector have proven that investing in high-performance buildings
offers countless benefits in addition to the potential to
create thousands of new jobs. Investing in high-performance
buildings will increase energy efficiency, therefore reducing
energy costs. The Department of Energy has identified several
case studies of commercial buildings that have undergone energy
efficiency construction or retrofits. They find that the actual
energy cost savings--not predicted or theoretical, but actual--
to be as high as 67 percent. For private owners, that is money
right back into their pocket, and for Federal buildings, that
is saving taxpayers money.
The economic benefits of green buildings go beyond just
reduced energy costs. In the private sector, high-performing
buildings enjoy higher rent premiums, higher occupancy rates,
and often sell for more money per square foot than conventional
buildings. This shows that the value of a building increases,
and increased dramatically, when the building owner goes green.
The private sector has also shown that high-performance
buildings bring a greater ability to attract talented workers,
higher employee retention rates, improved worker productivity,
and improvements in employee health. I have included details of
these facts in my written testimony.
Given the substantial benefits high-performance buildings
offer, Congress should support our Nation's largest landlord,
the General Services Administration, in greening their
buildings. Investing in high-performing Federal buildings is a
common sense approach to creating jobs, reducing energy costs,
and ultimately saving taxpayers money. For these reasons, the
AIA and its partners in the design and construction industry
strongly urge Congress to include the House-passed funding
levels for the GSA Federal Building Fund and high-performing
Federal buildings in the final version of H.R. 1 that it sends
to President Obama.
I welcome any questions from the Subcommittee. Thank you,
Chairwoman Norton and Ranking Member Diaz-Balart, for the
opportunity to testify before your Subcommittee today.
Ms. Norton. Thank you very much, Mr. Gordon. It is very
important to hear from the private sector, which has the
immediate bottom line to take into consideration when it comes
to what to do, as the Government does not always have. Of
course, we do have it with respect to these funds because this
is our inventory.
Before I ask my questions, I will have to leave here at
10:15 because of the markup of a bill involving my District in
the Senate, and I am only hoping that the Chairman of us all
will be able to stay and take the chair at that time. We are
pleased that the Chairman of the Full Committee is here, and
ask him if he has any comments before I ask my questions.
Mr. Oberstar. Madam Chair, thank you very much. I wish you
great success in the mission to the Senate. It is missionary
work when you go over there, across the border, and it is
important for you to do that, and I will happily remain here to
join with mi hermano, Senor Diaz-Balart. We have a very
distinguished panel of witnesses, very, very above average,
recommending we stick with the House number. Thank you.
Ms. Norton. Thank you very much, Mr. Chairman.
Let me get on the record, so that everyone will understand,
that GSA was not born yesterday when it comes to energy and
incorporating energy in construction and repairs. When we are
about to embark on the most important, largest perhaps--perhaps
not the most important, but the largest building project under
the jurisdiction of this Subcommittee or the GSA, which is the
multi-agency Department of Homeland Security, in building that
headquarters or in doing other construction work today, does
the GSA already try to meet the state-of-the-art, use the
opportunity of repair, alteration, and construction to meet the
state-of-the-art in energy efficiency as a part of its general
mission? Mr. Prouty.
And would others please come to the table, now that it is
time for the questions?
For example, I will give you another construction example.
One of the things you often have to do to save a building is to
put a new roof on that building. In putting a new roof on the
building today, would the GSA consider photovoltaics as a
possibility in order to conserve energy in that building? Would
it consider the possibility of a green roof? Or would it just
fix the roof?
Mr. Prouty. The answer is we would definitely consider new
technologies. Kevin Kampschroer has joined us, and he can
expand on that answer.
Mr. Kampschroer. We would not only consider it, but we have
experience in doing it. In Waltham, Massachusetts we have
incorporated a roof repair, which was badly needed, with an
integrated photovoltaic roof which today produces 50 percent of
the electricity required by the building. And we have looked at
every project we are considering here to see where those
opportunities are. This is an exact example of the kinds of
things we are doing to be responsive to the goals that are
articulated in the proposed legislation.
Ms. Norton. Now, Mr. Kampschroer, you are from the Office
of Federal High Performance Green Buildings, which is part of
the energy bill that we enacted. Are there some up-front costs
that would deter, or should deter, the Government in making
repairs on buildings or in construction?
Mr. Kampschroer. There are certainly cases where the most
energy efficient or the newest technology is more expensive. A
good example of that is the use of geothermal or ground-source
heat loop. It is a great technology, it is well proven, but it
is more expensive in initial capital costs. So as we examine
those, frequently, if you have very little money, it is a
balancing act between how much money you have and what you can
afford to do. As we look forward, we are trying to maximize
that. It is one of the goals that was articulated in the Energy
Independence and Security Act, and we are incorporating those
goals into our activities in response to the stimulus.
Ms. Norton. Mr. Prouty, it has been alleged that this money
will be used to ``spruce up office space for Federal workers.''
Will any of this money be used to spruce up or make Federal
workers more comfortable? Will any of it be used on furniture?
Will any of it be used on interior finishes? Are any of those
expenditures what GSA has in mind for this infrastructure
money?
Mr. Prouty. Once again, the simple answer is no. These
projects all have a return, they are all involving
infrastructure energy. However, I might add that there will be
some finish work, because as we get into the buildings we
obviously are going to have to put the buildings back together.
But that is certainly not a significant amount of money.
Ms. Norton. Now, normally, if there is major construction,
we require a prospectus. You come here, we look at it in its
exclusive detail. Because of the nature of this work here--and,
if I may say so, you don't have to come to us for repairs and
alterations unless they are major.
But, in any case, because of the time frame, the urgency of
the economic situation, the normal kind of coming forward here,
at least for major repairs, may not occur. Of course, we will
have oversight and we will have oversight ahead of time, before
you begin your work.
This Committee, this Subcommittee will not micro manage
what it doesn't understand. We are not builders, we are not
repairers; we defer to your expertise. At the same time, as a
Committee of oversight, I want to know what objective measures
will you use in choosing projects for repair, alteration,
construction, or other work.
Mr. Prouty. The response to that is, first of all, the
projects with an existing need and the projects that we can get
in the ground, but we are still going to use the same criteria
that we use for the return on investment of all our projects,
the existing projects, energy-specific projects, new projects,
existing projects that need to be brought up to new standards.
But, obviously, we are going to look at the criteria and the
criteria is going to be where those projects are located, what
those markets look like, what the labor markets, how many
projects we have in each location. But the criteria that we use
to determine which projects we are going to go forth with is no
different than those that we bring to you under the prospectus
process.
Ms. Norton. We are not in the project business. We are not
trying to decide who gets a project business. The most
important part of what we do on GSA in my 18 years here has
been the objective nature of it. Nobody can put in a chit for
her project or his project in his State; this is the cleanest
Committee in the Congress. We don't do earmarks; we don't favor
Members of the Committee. At the same time, we would be
interested in the location of these projects. Do you see the
need for project spread across the Country that meet your
criteria?
Mr. Prouty. We definitely do.
Ms. Norton. You know that the criteria you have just
indicated is going to be tested, because there will come a time
when you will come before us with those projects. We know you
have to give you time to do that, but, by the way, not much
time. In fact, I want to know how soon, since all the projects
have to be shovel-ready, are you prepared to choose projects
and make them transparent so this Committee will know exactly
what the projects are?
Mr. Prouty. We are going to be prepared to do that as soon
as we know the final criteria of the legislation. But I will
let Tony Costa expand on that.
Mr. Costa. Good morning. Since discussion of the stimulus
started a couple of months ago, we have been scrubbing
projects, and the interesting thing is we think as many as $6
billion worth of projects have already gone through the
Subcommittee for authorization, projects, for instance, that
are multi-phased that you all have already reviewed and
approved. So much of the work has already been reviewed.
Ms. Norton. So there are projects that we have already
approved?
Mr. Costa. Yes.
Ms. Norton. Could you give us examples?
Mr. Costa. For instance, the Department of Interior
headquarters is a multi-phased project. It's already been
approved and we have future phases that are going to be funded
in the latter years. That is one project, for instance, that we
are looking at seriously that could become part of the stimulus
project list. So a significant number of projects and money
involved in the potential project list really has already been
seen by the Subcommittee.
Ms. Norton. Now, one of these projects involves the
Internal Revenue Service. This is Ms. Lehrkinder. Ms.
Lehrkinder, would you describe the internal IRS work and where
it is located and why you believe it is an example of what we
are trying to do with this bill?
Ms. Lehrkinder. Yes, ma'am. One of the projects that is
under review and is in consideration that we are working in
partnership with GSA with is our Andover Campus.
Ms. Norton. Where is that located?
Ms. Lehrkinder. Andover, Massachusetts. And the campus is
an aging building. It was constructed in the 1960s. Its
infrastructure is aging. We have significant concerns with the
electrical systems, the mechanical systems, the roof. It is a
project that, actually, the prospectus for design was approved
in the 1990s and we have been working with GSA to prepare for
the construction phase once we received approval for
construction. So that is one of the projects, I believe, that
is under consideration.
Ms. Norton. That is a building owned by the Federal
Government?
Ms. Lehrkinder. Yes.
Ms. Norton. Owned by the Federal Government. How many
square feet, approximately?
Ms. Lehrkinder. It's about 400,000 square feet.
Ms. Norton. If that building is rehabilitated, what will be
the effect on heating, savings, energy?
Ms. Lehrkinder. Let me give you a very good example. We
have an electrical system that is aging. The switch gear is
such that we have to manufacture the primary switch gear
because it is no longer standard manufacture. And we actually
have had issues where the building electrical systems have gone
down.
Ms. Norton. You have to manufacture the switch gear? What
do you mean?
Ms. Lehrkinder. The switch gear itself is no longer
manufactured, we have to custom manufacture the switch gear.
Ms. Norton. Oh, my goodness.
Ms. Lehrkinder. It is so old. So we actually have had an
example of lost power and the impact of sending the workforce
home because we had no power in the facility. So this is, we
think, a very good candidate for this project.
Ms. Norton. Finally, before I go to the Ranking Member,
because many of his questions about how you proceed need to be
answered. They are important and good questions. But I would
like to ask Mr. Gordon one final question. The reason that you
are an important witness for us is because we have noticed many
private developers and building owners moving ahead of the
Government in going green and making the up-front expenditure,
and your testimony is valuable in a number of ways.
First of all, you indicate, by talking about the
unemployment in your area, how construction wakes up other
sectors. This is construction work. But on down the line there
are many sectors--and more so than in any other kind of
stimulus spending--that get waked up to support or that
otherwise are awakened because the construction workers have
money to spend. It is what has been proved over and over again
by stimulus spending. So I noted the very high unemployment
rate, which matches the huge construction worker unemployment
rate as well.
But you mentioned, on page 6, the financial benefits,
actual benefits of going green. There are savings and there are
benefits. I need somebody from the private sector who has a
bottom line to talk to this Committee about the benefits of
going green while you are in the process of making repairs or
doing construction.
Mr. Gordon. Thank you, Chairwoman Norton. I would be happy
to address that point. In the private sector we have found that
there are very substantial advantages to the incorporation of
high performance features in green buildings. We found, for
example, that the rent premiums of high performance buildings
over their conventional counterparts are typically $11.24 per
square foot. We have seen a 3.8 percent higher occupancy rate
in these green buildings, and some studies indicate that the
sales price of green buildings is an average of $171 more per
square foot than their conventional competitors. So all of
those advantages in the private sector accrue directly to the
bottom line.
But that's not the only benefit. These buildings are better
buildings for the people who work in them, and we see higher
rates of retention, the ability to attract talent to those
buildings. We see less sick time and we see a number of other
benefits to the workers in those buildings that come in
addition to the benefits of job creation, energy improvement,
and increase in value.
Ms. Norton. So have you found a reluctance of the private
sector? Let's leave aside this economy, where there is a
reluctance to do anything. But how much reluctance have you
found in the private sector when you advise clients to move
forward with greening of one kind or another in the work that
you do for them?
Mr. Gordon. We are finding increasingly that our private
sector clients, both the developer clients and also the private
sector universities that we work for, the hospitals and other
health care facilities, all these private sector entities
recognize the benefits of high performance green buildings and
are making those investments. Now, that is not to say that
every one of them does. We don't all become enlightened at the
same time. But a very significant percentage of our clients in
the private sector mandate that these features are part of the
designs that we create for them.
Ms. Norton. Thank you, Mr. Gordon.
I would like to go now to our Ranking Member, Mr. Diaz-
Balart.
Mr. Diaz-Balart. Thank you, Madam Chairman. We understand,
Madam Chairman, that you have an interesting morning ahead of
you, going to the other side, as the Chairman said, so thank
you and Godspeed.
Before I begin my questions, I do want to mention that we
are obviously honored to have the Chairman of the Full
Committee. One of the untold stories in this process is that
there are areas and there are individuals that do not allow
partisan bickering to get in the way of good products, and if
you will kind of hear that between the Chairwoman and myself
and other Members, we have a lot of things in common, a big
part of that reason is because the Chairman of the Full
Committee has an attitude where he listens and will take ideas
from anybody and everybody if they are deemed to be good ideas.
And I think that is one of the reasons you will see a lot more
cooperation in this Committee than anywhere else.
So, Mr. Chairman, I want to thank you again. I have told
you that before, I have told you that in private, I have told
you that in public, but I think it is important to note that
because, when times are tough, there are certain times when you
have got to look at things that do work, and your leadership
works. So we thank you for that, sir.
Mr. Prouty, is that how I pronounce it?
Mr. Prouty. Prouty.
Mr. Diaz-Balart. With a name like Diaz-Balart, I shouldn't
be messing other people's names up, right?
You mentioned in your testimony, sir, that each project is
being evaluated on a number of criteria, including--and I was
glad to hear that--first, how fast jobs can be created, which
is the purpose of this bill, and energy efficiency, which
obviously we all support. Now, can you talk a little more about
this criteria and others that you are using?
One of the things that came up in discussion now is energy
savings, savings and cost versus up-front costs, and one of the
criteria that I would like you to kind of discuss--not the only
one--is there a standard, for example, on how many years the
taxpayer will get their money back as part of that decision
making? If you could just discuss that and also other criteria
that you are looking at.
Mr. Prouty. We will do that. As far as the first question,
I will ask Kevin Kampschroer to respond to it.
Mr. Kampschroer. Thank you. There is a standard process by
which we examine that, life cycle costing analysis. We use that
on all of these projects and we are systematically using that.
In the money that we have spent in the past, we have had
positive returns on investments averaging at around seven or
eight years. Obviously, it varies. The projects that get the
quickest return are usually control systems, and the ones that
have the longest return are usually renewable energy
generation. So we are seeking to have a balance of these with a
blended return on investment rate that is positive.
One of the things that this Committee did in the Energy
Independence and Security Act was lengthen the amount of time
that we had available to us to do life cycle cost analysis from
25 years to 40 years, and that enables us to really examine
over the full life cycle of long-lasting products, like
photovoltaic panels, exactly when they begin to return on
investment.
Mr. Diaz-Balart. And that criteria is going to be used for
this as well, I am assuming?
Mr. Kampschroer. That is correct. On every project we are
the moment looking at total savings and absolute energy, the
potential savings and the cost of operation of the buildings,
as well as the savings and the cost of energy.
Mr. Diaz-Balart. Great. The Senate bill requires that
nearly half of the funds--and, again, I understand we are in
conference, so we will see what comes out, but the Senate bill
says that nearly half of the funds to be available for measures
necessary to convert GSA facilities to high performance green
buildings, and the Act seems to set some pretty high bars as to
what is considered a high performance green building.
I have some of those definitions and they include reducing
energy--by the way, we all support this; obviously, this is
legislation that Congress did. It includes reducing energy,
water, material resource use, improving indoor environmental
quality, including acoustic environments, thermal comfort,
considering the indoor and outdoor effects of the building,
among others. These are only a few of the requirements
outlined, but it is and. In other words, it is not or, it is
and, so all those things have to be part of it.
Now, obviously, we all want to take steps to improve energy
efficiency and to minimize the carbon footprint of Federal
buildings and save money long-term, et cetera, so we also
support that. However, the standard set for high performance
green buildings may seem to be so high that it may actually
impact a number of projects that might be able to be completed
through the stimulus package.
For example--and we have talked a little bit about that--
with many older buildings in the inventory in need of repair,
it is unclear if they could meet this high bar. At least to me
they are unclear. From your current list of potential projects,
how many of them already meet these requirements?
Mr. Kampschroer. From the potential list, I would say none
of them meet all the requirements, or else they wouldn't be on
the potential list. I hope that doesn't sound like a facile
answer, but we are really looking at the buildings that need
improvement. We are seeking to address all of these. In a new
construction project that we are starting from scratch, you
have the opportunity, using integrated design principles, to
address all of these areas in the balance, and, as Mr. Gordon
says, that enables you to deliver those projects at very little
additional cost.
For repair buildings, we are seeking to address not just
energy efficiency, but all of the rest of the items that you
mentioned, and, in fact, in many cases they are interrelated.
We can improve the indoor environmental quality in buildings by
reducing energy consumption simultaneously by maximizing the
use of daylight, for example. We use the daylight, we turn off
the lights with automatic controls and then you have a better
working environment for people inside the building, as well as
reducing energy and saving costs.
Mr. Diaz-Balart. And you mentioned those examples and
others. In your testimony you talked about thicker insulation,
converting light into LED, and retrofitting windows, but for
each of these areas, and others that you just mentioned right
now, sir, have you determined how many jobs will be created
based on the dollars invested and what those figures are? Is
there a way that we can see something like that?
Mr. Costa. We have. There are various models to talk about
job generation. We have looked at a couple and one that
pertains directly to construction spending was developed by the
National Association of Industrial and Office Properties. Their
basic model suggests that for every billion dollars spent in
the construction field generates about 28,000 full-time jobs,
increases $1 billion in personal earnings, and contributes $3.4
billion to the gross domestic product.
Just doing the math at House spending levels, at $7.7
billion worth of construction, that would translate to over
220,000 full-time jobs and close to $8 billion in personal
earnings. We are really confident that the work that we are
proposing will generate jobs quickly and efficiently. Our
record is pretty outstanding. For every dollar we spend in our
budget, 95 percent of it goes directly to the private sector to
do renovation work, construct our buildings, design our
buildings, operate our buildings.
Mr. Diaz-Balart. I understand that and I understand those
general numbers, but, however, you know, we can make numbers do
things. And I am not questioning them, however, because they
are obviously--but specifically on a project-by-project, are
you looking at specifically how many jobs this project, this
retrofit will actually create on that project, versus just
relying on general numbers that are out there in a general
sense?
Mr. Costa. In our project-by-project analysis, we are
looking at job generation depending on the kind of work that we
are proposing.
Mr. Diaz-Balart. Good. Good. And it would be great if you
could show us some of those when you have a--I am not going to
ask you to do that right now, but I am saying it would be good
to have that to have an idea of what specifically each project,
whether it is insulation, whether it is LED, whatever, what
that is actually going to create, as opposed to just the
general numbers in a general sense that the industry can put
out.
Mr. Costa. Congressman, when we provide our project
listing, we expect to provide fairly specific information on
each project and really an articulation of goals achieved for
each project, not in general terms.
Mr. Diaz-Balart. Great.
Mr. Costa. So we are actually excited to provide that
information when we provide our listing.
Mr. Diaz-Balart. Great. Thank you, sir.
I mentioned this a little bit at the beginning. In 1983,
GSA made a number of acquisitions under the building purchase
program. And I hate saying this in front of the Chairman
because he will probably correct me on numbers, because he will
remember, unfortunately, all the details. But, anyway, at the
risk of not getting it totally right, Mr. Chairman, I know that
in 1983 GSA made a number of acquisitions under the building
purchase program.
Now, this program resulted in, to my understanding, an
additional 3.8 million square feet of space, saved the taxpayer
nearly $300 million in rent payments, and now it is about a
half a billion dollars worth of property that the Federal
Government owns. In addition, these programs had an actual
effect of stimulating job creation because a lot of these
projects were ones that were dying, that were not going up,
that had stalled.
Can you talk a little bit about these programs and the
benefit that they provided to the taxpayer?
Mr. Prouty. We definitely agree that these programs
benefitted the taxpayer. We know the inventory you are talking
about and it was an opportunity that we don't get very often,
and certainly benefitted from it. And to whatever extent we can
do that with these funds, we will certainly consider it.
Obviously, it would take a unique circumstance where a project
was in trouble so you could cause the job creation, but we are
certainly open to looking at that and we would very much like
to have those properties in our portfolio.
Mr. Diaz-Balart. Great. Now, one of the things that I
mentioned also was that the House bill and the Senate bill both
require that GSA provide detailed plans by project to the
Appropriations Committee. Not to this Committee, however. Could
we get GSA to commit to provide this Committee the same
information that, prior to obligating to spending the money,
that it is required to provide to the Appropriations Committee,
regardless of what language comes out in the bill at the end?
Mr. Prouty. I was going to say yes. Mr. Costa said of
course.
Mr. Diaz-Balart. Thank you.
Mr. Oberstar. If the gentleman would yield.
Mr. Diaz-Balart. Mr. Chairman.
Mr. Oberstar. Whether they want to or not, they are going
to provide the information to this Committee. We have made it
very clear in our bipartisan proposal last fall, last October,
last December, that we are going to hold hearings every 30 days
and require all Federal Government agencies to report to this
Committee on the jobs created, the payroll made, and the jobs
by description, and we are going to make that information
public. So they will report to us regardless what the
Appropriations Committee does.
Mr. Diaz-Balart. Thank you, Mr. Chairman. And I saw you
even have an agenda on that, Mr. Chairman, but I just wanted to
put that on the record as well. Thank you.
You mentioned also that the project list will be based on
sound assessed management practices, which is good, following
the Real Property Council's guiding principles and principles
related to green buildings. Will decisions by this Committee
related to the approval or disapproval of projects factor in
your decision? And, if so, how? I mentioned the fact that there
is nothing in the legislation that would stop you from, for
example, funding projects that this Committee has not wanted to
do.
Mr. Costa. Of course, we have a long history of working
together. We understand your priorities on a project-by-project
basis and in general, and we will consider that input when
concluding on a project listing, no question.
Mr. Diaz-Balart. Great. Thank you. Let me ask some
questions to Mr. Gordon again.
Thank you, Mr. Gordon, and thank you for being here. It is
a privilege to have you here, sir. You outlined the costs and
benefits of green buildings, which, again, we all support. Do
you have cost benefit statistics related to retrofitting or
converting older buildings to meet the standards set in the
Senate bill?
Mr. Gordon. Yes, sir. We found that in renovating existing
buildings, that if we put some additional funds into the
renovation of those buildings, we typically get a very high
return in terms of increased performance and reduced energy
costs. So the number that was used earlier of approximately a
five to seven year return on that investment is quite typical
of what we see in both our private sector retrofitting of
buildings and also the buildings we have had the privilege to
do for the Federal Government.
Mr. Diaz-Balart. Great. Great. Lastly, the intent of the
legislation, as we all know--and I have been kind of talking
about that a little bit today--is to create jobs through a lot
of different ways, including funding shovel-ready projects,
obviously. Any idea how long you think it would take GSA to
incorporate the standards as required by the Senate bill, for
example, into existing designs? Is that something that can be
done quickly?
Mr. Gordon. Yes, that can be done very quickly. GSA has had
a very commendable history of improving the performance of
their buildings over time. They have done this in a number of
ways. The things we are talking about today in terms of energy
performance and more environmentally responsive buildings are
two examples, but I would cite also some of the advancements
that GSA has made in the use of building information modeling
and other advances in the building industry. They have really
been a driver for those things.
Because of that progressive position that the GSA has had
in so many areas, they are very familiar with the kinds of
things that are appropriate to incorporate in these buildings,
and I think the ability to incorporate those rapidly will be
met by the experienced levels in the private sector, the
architects, engineers, and builders who will incorporate those
features and will work quite compatibly with the GSA to achieve
those quickly.
Mr. Diaz-Balart. Thank you. And thank all of you for being
here this morning. I really appreciate that.
Thank you, Mr. Chairman.
Mr. Arcuri. [Presiding] Thank you, Ranking Member Diaz-
Balart.
The Chair now recognizes the very distinguished Chairman of
the Transportation and Infrastructure Committee, Chairman
Oberstar.
Mr. Oberstar. Thank you, Mr. Chairman and mi amigo Diaz-
Balart, muchas gracias.
And if you think Diaz-Balart is hard to pronounce, try
Pustos Schlemshek or Coyvo Kivimaqi, constituents in my
district. Those are tongue twisters. Diaz-Balart, that rolls
off the tongue easily.
And I thank you for your service on this Committee. It is
very, very distinguished.
I appreciate our witnesses. Mr. Gordon, your contributions
on behalf of the American Institute of Architects recalls to
mind a hearing I presided over in my second term, in 1977, when
the American Institute of Architects, along with GSA and with
the Sheet Metal Workers Union, came to this Committee to
discuss a study that the Sheet Metal Workers Union had
commissioned of the benefits of retrofitting Federal office
buildings with photovoltaic systems.
Their report concluded--it was a two volume document--that
you would save huge amounts of electricity, you would create
135,000 construction jobs over a three year period, with an
investment of $175 million a year over three years, and would
reduce the cost of energy from photovoltaics from then $1.75 a
kilowatt hour to close to the investor-owned utilities rate of
$0.07 an hour for PEPCO in the Washington, D.C. area.
Well, I introduced legislation. In fact, the Committee
staff resurrected my testimony last year that I gave at our own
Committee hearing in defense of my bill to implement this
proposal, and the Committee approved the bill, the House passed
the bill, the Senate passed the bill, President Carter signed
it into law, and put the first increment of $175 million in his
budget and then lost the election. Unfortunately, the incoming
Reagan administration thought that windmills and photovoltaics
were nonsense and, in effect, repealed by deleting the entire
$960 million alternative energy budget.
Time passes. They are gone; I am Chairman.
[Laughter.]
Mr. Oberstar. It took 30 years, but we resurrected that
bill and got it into the energy package in 2007, and the first
of the targets was the Department of Energy facility.
I mention architects. The AIA was so enamored of and
supportive of this legislation, and recited for us, by the way,
in that testimony the experience of the government of Canada
and the provincial governments of Canada. As a result of that,
I went to Toronto, traveled there, met with my colleagues in
the Canadian parliament, toured their department of provincial
and Federal department of energy building in which the Federal
and provincial governments were doing energy audits for private
homeowners, for small businesses, and for all Federal and
provincial government facilities. They saved hundreds of
millions of dollars by retrofitting--today I call it
futurefitting--those facilities.
Now, last year, the cost of photovoltaics, all by itself,
all through various Federal Government agencies, State
government agencies, private sector entities investing in
photovoltaics has come down to $0.25 a kilowatt hour, roughly.
Investor-owned utility numbers still around $0.07. If we had
proceeded with this program on a massive scale nationwide, we
would be way farther ahead than we are today, and yet we are
not too late, maybe just in time, and with an opportunity to
both create jobs, save energy costs, protect our environment,
and do good for America. And by government getting in in a big
way into acquisition from the private sector of off-the-shelf
technology, installing, creating jobs, you will reduce the unit
cost even further, and that is what I am keen on.
Now, when the Department of Energy photovoltaic roof was
installed, I think Mr. Kampschroer, you were lead on that
project, if I recall. I remember you came up and gave me a
briefing on it, and then I went to the Department of Energy
facility, trucked across the--it was a hot day out there, by
the way--and it was a five month from start to finish, from the
time DOE--now, GSA contracted out to--not contracted, but
allowed DOE to manage the contract. They did things
sequentially instead of concurrently. GSA's practice would have
been to negotiate concurrently with PEPCO on the
interconnection, while proceeding with the balance of the
contract and getting it in place.
Do you, under this economic stimulus initiative, plan to
self-contract, that is, take the lead, as GSA should, instead
of being nice to those Federal agencies who don't know how to
do this on their own?
Mr. Kampschroer. Our plan is to do the contracting for
these projects with GSA professionals, working closely with the
private sector people who will execute them.
Mr. Oberstar. Now, that project took five months. It
actually--the contract was awarded April 1st, complete August
1. There was still some fine-tuning to be done, and then the
switch was thrown mid-September. It is producing 205 kilowatts
of electricity every day, correct?
Mr. Kampschroer. On sunny days.
Mr. Oberstar. On sunny days, that's all right. A day like
this, it's okay. That's why you have battery backups. Had GSA
done this contracting, would that time frame have compressed?
Mr. Kampschroer. We believe the procurement process would
have compressed. It was four months of procurement in front of
four or five months of construction. We think we can do that
more quickly.
Mr. Oberstar. I think the actual work onsite went very
quickly. Now we have 175 million square feet of Federal
Government GSA-owned civilian office space, non-military, non-
VA, and 176, roughly, million square feet--within a square foot
or two--of rental facility. Would GSA retrofit--or I still
prefer futurefit--those rental facilities with photovoltaics,
Mr. Prouty?
Mr. Prouty. We would certainly try to cause them to do
that, but we are not going to invest this money in leased
facilities, just owned facilities.
Mr. Oberstar. Because that would inure as a benefit to the
non-Federal owner of the building.
Mr. Prouty. Right.
Mr. Oberstar. So that entity could do so if they chose to
do it. There is a benefit to them in the future value of that
building if it no longer leased to a Government agency, right?
Mr. Prouty. Certainly.
Mr. Oberstar. And you have roughly 8,600 buildings in the
GSA leased and owned inventory, and the electricity bill, if my
recollection is right, is in the range of $500 million a year?
Mr. Prouty. That's right.
Mr. Oberstar. And the cost of installing that roof was
roughly $2 million, so the payback needn't be measured strictly
in electricity savings--that will take a few years--but also in
the broader picture of environmental benefit and reduce CO2 and
so on.
Mr. Prouty. That's right. And I am sure that's why we are a
leader in this.
Mr. Oberstar. Have you completed energy audits of all
facilities under the jurisdiction of GSA?
Mr. Prouty. We have been doing energy audits over the past
years on the rate of about one building in ten every year. Part
of what we are looking to do in the course of this stimulus
work is systematically look at all the buildings in the
inventory, taking into account the goals of the Energy
Independence and Security Act, which require recommissioning
and retro-commissioning of existing buildings.
In a recent example of that, in a courthouse in Maine, we
reduced the energy consumption just through the recommissioning
of the building, tuning up of the systems, changing the
operations, and installing just one additional physical sensor
on the exterior of the building by 42 percent. So we think that
there is a very large benefit to using energy audits,
recommissioning and retro-commissioning to make sure that we
are identifying, in the process of this work, all of the
possibilities for energy conservation.
Mr. Oberstar. With Mr. Gordon, I agree that the Senate was
misguided in cutting funding from the GSA and then further
subdividing. They purport to suballocate funds to various
functions, designating courthouses, among others. We, in our
House-passed version, just allocated a total sum to GSA and
said you distribute it on the basis of projects that are ready
to go, that can be under development, construction within 90
days. But, nonetheless, do you and GSA have a plan for bringing
in additional personnel if you don't have enough people to get
these projects underway promptly?
Mr. Gordon. Mr. Chairman, speaking about this just from the
standpoint of architecture and engineering, since I am the
chairman of a private sector firm, let me tell you that the
rate of unemployment in the architecture and engineering
industry is at record levels, and we have many people who are
very qualified but for whom we don't have sufficient work, and
it is creating great agony and devastation, I must say, in the
employment within those professions, just as it is in the
construction trades. There is not work for the construction
trades; there is not work for the design disciplines. So I
think that the capability of responding quickly is there. We
have talented people that we can put to work immediately on
these projects.
Mr. Oberstar. And you have the experience on the greening
side. There is other work as well, it is not necessarily
related to energy conservation.
Mr. Gordon. Precisely. As I mentioned in my testimony, we
have been responsible, just our firm, for the greening, if you
will, of 20 million square feet of buildings nationwide. Some
of those are facilities for GSA; many of them are facilities
for the private sector. And those have obvious job creation
benefits, but many other benefits as well.
Mr. Oberstar. Mr. Prouty, do you have plans for bringing in
additional contracting out to the private sector who have
experience, as Mr. Gordon has just described?
Mr. Prouty. We do indeed. Tony Costa will answer.
Mr. Costa. Mr. Chairman, Mr. Prouty had mentioned early on
in his opening statement that we were creating a program
management office which will deal exclusively with the
execution and delivery of the projects we are proposing, and we
have great folks within GSA who are really excited to deliver
this program, and many of them will be reassigned to that group
to really spend their time, again, delivering the program.
We do expect to hire some additional folks, some permanent
folks, some experts, some contracting people, and also to hire
some people on a temporary and term basis throughout the life
cycle of delivery of this program. And then, again, we expect
to rely on the private sector, even in some of the contract
management roles, to help us manage the program nationally.
Mr. Oberstar. My focus all throughout has been very, very
directed, very narrowly trained on putting people to work, from
December 2007, when this Committee first, on a bipartisan
basis, proposed a $15 billion infrastructure stimulus through
to the piece that passed the House just recently. Now, in that
period of time, I have worked and brought in the State DOTs,
and I just want to go over something with you. Every State
Department of Transportation, in consultation with and
cooperation, partnership with the Federal Highway
Administration, has a stewardship and oversight plan for
management of their regular program. They are going to shift
that into high gear for the stimulus. Do you have a similar
stewardship and oversight plan at GSA?
Mr. Costa. We do, and essentially we are calling our
program management office, but essentially it will serve that
function.
Mr. Oberstar. We also have, in Minnesota--and I saw the
similar plan at the Department of Transportation for Illinois--
an earned value management plan in which the department tracks
their projects day-by-day--this is an eye test; we will get you
copies of it. But they envision, at Illinois DOT, at Minnesota
DOT, awarding contracts every two weeks starting 10 days from
signature by the President, notification from Federal Highway
Administration of their allocation to the State of Minnesota,
State of Illinois, State of Wisconsin, State of California,
every State across the Country I have talked with.
Every two weeks they are going to have bid lettings, and we
are going to be monitoring that with our flowchart of
accountability, transparency, and responsibility. And we are
going to have a hearing in this Committee every 30 days, so I
hope you are prepared to have your bid lettings and then come
to this Committee and say this is what we have done, these are
the contractors on the job, these are the job descriptions,
this is the payroll that we have in the works.
Mr. Prouty. We look forward to that.
Mr. Oberstar. That is what I am looking for. Thank you.
Mr. Chairman.
Mr. Arcuri. Thank you, Mr. Chairman. The Chair now
recognizes the gentleman from Louisiana, Mr. Cao.
Mr. Cao. Thank you very much. I just have a couple
questions to ask. How many of GSA's shovel-ready projects are
located within the 2nd Congressional District of Louisiana and
what does that represent as a percentage of projects and a
percentage of dollars awarded, do you know?
Mr. Prouty. We don't know right now what projects. We have
assembled a list. We don't know what the priority is, so we are
not in a position to comment on which projects are going to be
included in this list. We will have to get the final number in
the final criteria before we can respond.
Mr. Cao. Do you have a time line when these projects will
be awarded, if they----
Mr. Prouty. We definitely will. As soon as we get the
legislation and know the criteria. We have got projects
assembled and ready. As soon as we make the decisions, they are
going to go fast.
Mr. Cao. And are there any requirements that would be that
the companies that are awarded these contracts must come from
the immediate area to ensure the dollars are returned to that
community?
Mr. Prouty. We can't specify that in particular, but with
the amount of work and the many locations, we are confident
that a lot of local firms are going to get the work.
Mr. Cao. Okay. And what other types of construction
projects does GSA have in queue for the 2nd District outside of
the stimulus package?
Mr. Prouty. As far as the work we are doing in your
district?
Mr. Cao. Correct.
Mr. Prouty. We will have to get back to you on the record,
if that would be okay.
Mr. Cao. That's fine. Thank you. That's all the questions I
have.
Mr. Prouty. Thanks.
Mr. Arcuri. Thank you, Mr. Cao.
A question for the panel, sort of a follow-up. We hear a
lot about the new projects; we hear a lot about the shovel-
ready projects. But I represent a very rural district and I am
concerned about some of the smaller courthouses around the
Country, the smaller post offices. What kind of steps are going
to be taken to try to make, let's say, a small post office or a
small courthouse, let's say in my district, in Utica, New York,
more energy efficient? Mr. Kampschroer?
Mr. Kampschroer. Thank you. We have a complete--not a
complete, we have a very long list of possibilities that we are
using to apply to every project we looked at, and we are
looking at every building in the inventory for the possibility
of increasing the energy performance and all the related
sustainability goals that are articulated in the Energy
Independence and Security Act.
We are also working with the National Renewable Energy
Laboratory, which has an excellent modeling system which gives
us a set of priorities so we can feed information into this
system and get the best return and a prioritized rank of what
makes sense to do in each individual building. And the third
thing that we are doing is we are looking at establishing not
just building specific projects, but also some conceptual
projects, if you will, where we look at, for example, lighting
or roofing, and we do many lighting and roofing projects in
multiple buildings which may or may not be associated with the
whole building modernization.
Mr. Arcuri. Not to put you on the spot, but other than
replacing light bulbs, what kind of projects can you do in,
let's say, a building that is a courthouse that is 100 years
old? Would it be the kind of building that might be suitable
for photovoltaic? And how would those decisions be made and who
would make them?
Mr. Kampschroer. Especially in older buildings, there are a
number of opportunities, and when we talk about lighting
replacement, it is not so much changing light bulbs as really
changing the entire control systems associated with the lights.
So in many cases we would be replacing lights with higher
efficiency lights, but also ones that have ballasts that are
sensitive to the lights so that they dim automatically when
there is daylight in place.
Also, in a custom house, similar to an older courthouse in
Maine, in the course of replacing some of the antiquated
equipment in there, we replaced it with geothermal systems,
which are now saving 40 percent of the energy in that building,
and that is another possibility, especially where chillers are
in place. And we have, again, made arrangements through the
Department of Energy to use the geothermal experts of Oak Ridge
National Lab to augment our own internal expertise in this
area.
Mr. Arcuri. Is geothermal a priority in terms of energy
efficiency for your department?
Mr. Kampschroer. It is. It is one of the acceleration
programs that the Energy Independence and Security Act
particularly pointed out. In 1995, the Government Accounting
Office reported to Congress that geothermal technology was one
of the overlooked possibilities for increasing energy
efficiency, and the problem, of course, has been, in the past,
familiarity and availability of the technicians to install
them.
Now, that availability has gone down since that report was
written. But also there is a higher initial capital cost
associated with geothermal, which means that it tends to get
forgotten sometimes. So that is why we have an acceleration
program within the General Services Administration to emphasize
that.
Mr. Arcuri. Thank you, sir.
Ms. Edwards.
Ms. Edwards. Thank you, Mr. Chairman.
I just have a couple of questions, first for Mr. Gordon. We
met recently with a couple of your representatives from AIA,
and I have talked with our local architects, and many of them
are very frustrated, frankly, that when the fee payment comes
along, that 10 percent of those fees are withheld. Maybe Mr.
Prouty can answer this as well, but I am curious as to what
goes into that decision, because a lot of our local architects
are independent business people and they might use that extra
10 percent to invest in what they need to do to prepare for the
next project.
So it leaves me with a little bit of concern that,
particularly for small business, for minority business, for
women-owned businesses, that they won't have the same capacity
to compete from a design perspective and an engineering
perspective, even with that small amount of 10 percent. So I am
just curious as to what goes into that kind of decision.
Mr. Gordon. Well, speaking about it from the private sector
perspective, cash flow in small businesses is always a critical
issue, so one always looks to find ways to maintain a positive
cash flow and not have to be borrowing money from banks, which
is especially difficult these days. We understand that our
clients have a significant and legitimate interest in having
architects and engineers completely perform their services and
be paid for the full value of the work that is done, and I
think that that is quite possibly, from the owner's side, from
the client's side, one of the reasons that the concept of a 10
percent retention is employed. But I would agree with you that
it can make it difficult, particularly for small businesses, to
be competitive and to grow.
Ms. Edwards. Mr. Prouty, is there a policy that GSA engages
in that requires an automatic withholding, no matter what the
work is?
Mr. Prouty. There is not. We pay monthly in arrears based
on work done that is verified. So that is why we are scrambling
here. We are trying to figure out exactly what that refers to.
Ms. Edwards. Well, we can get back to you on some specific
concerns that have been raised in our office.
Then, Mr. Prouty, my other question is about valuation. I
mean, I am very concerned, for example, you look in this
metropolitan region and at least one of the counties that I
represent seems to not get the same value for land for dollar
as other jurisdictions. And we can pursue this outside of this
hearing, but I am very concerned about that and I want to put
that on the record, because then when it comes to obtaining new
opportunities in your priority list, I am concerned that at
least one of the counties that I represent is going to be
completely left out of the picture.
Moreover, I think I have a question that goes back to Mr.
Oberstar's concern about leases. I understand where you have a
lease that the lease is a private owner and you are leasing the
building, but on these longer term leases that GSA has, if the
building isn't energy efficient and you can't incentivize the
owner to retrofit that building, it seems to me, without
knowing any numbers, that the taxpayer cost over time for that
leasehold for energy costs really greatly outweighs what is
happening on the lease side. So I wonder if there is some way
that you might consider, in these longer term leases,
incentivizing those owners to retrofit the buildings; not for
their benefit, but for a taxpayer benefit.
Mr. Prouty. The question I was answering previously had to
do, I thought, at least, with the funds that we might expend on
lease properties, which we are not. But we do cause incentives.
We do write the spec. We are increasingly writing specs that
require increased energy efficiency. Obviously, there is a
concern about existing inventory and causing people not to be
able to compete because of those requirements, so we try to
balance that.
Ms. Edwards. All right. And then, lastly, as you are using
this money, again going to transparency and accountability, in
the States with the highway funds, virtually every one of our
counties in my State has an idea of whether the projects in
their jurisdictions are on the priority list, because it is
developed by the governor, it is submitted to the Department of
Transportation, so everybody knows what the priorities are on
the list. And, really, we have no clue what the priorities are
on the GSA list.
And I understand we don't have the legislation yet, but it
does seem to me that there are a set of factors that go into
determining what those priorities are and that there is some
weighting given to those factors, and I would like to explore
with a little bit more detail what the weighting is, what the
factors are so we actually might be able to predict in some
ways what kinds of projects might end up on the priority list.
Mr. Prouty. Mr. Costa will respond.
Mr. Costa. We did some preliminary work and did provide
some project information early on, in December, when
discussions first started occurring about a stimulus package.
We have been running at 180 miles an hour just to get
additional information on projects. We expect, in the coming
weeks, that it would be a great idea to both talk about some
specificity on criteria that we are applying to those projects
and also giving an overview of the projects, where they are,
potential scopes, obviously without a conclusion, but to give
you all an overview of what we are looking at. It makes perfect
sense. We have just been so caught up, frankly, in pulling
together information and verifying it that we hadn't really had
the time to do that, but we can.
Ms. Edwards. My last comment is that it would be--I mean,
there has to be some more empirical basis beyond the
subjectivity of my building or this courthouse or that building
in my district needs to be on the list, and we can't even
answer questions that come from our districts about what is on
and why one thing would be prioritized over another thing. So
it would be very helpful to have that kind of empirical look at
how the decision will be made. Thank you.
Mr. Costa. We feel confident that we can provide that, so
we will. Thanks.
Mr. Arcuri. Thank you, Ms. Edwards.
Mr. Perriello.
Mr. Perriello. Thank you so much. And thank you to all of
our witnesses today for all the time you have put into
preparing this. A few quick questions.
First of all, looking at the overall strategy of economic
recovery and the part that is under consideration today, do you
feel confident that were the Government functioning as a
private business and this were the board of directors, that you
would be able to recommend and defend the projects that we are
talking about as ones that are going to be good for business
going forward?
Mr. Prouty. We absolutely do.
Mr. Perriello. And related to that, is there a situation
here, looking at the next, say, 18-month period, where we have
actually seen construction and other costs dropping in such a
way that some projects would be coming in under the budgets
that had previously been estimated? And if so, what scale of
savings might we be seeing on that?
Mr. Costa. We are revisiting project costs right now, so we
have seen some drops, and that will be accounted for in the
project listing that we provide to you all in 30 or 60 days,
whenever we are required to provide it. So I think those
project budgets will already reflect a certain decline, so you
will see those on the projects listing.
Mr. Perriello. And related to that, is there a scale that
we could take this to beyond this recovery that would not
produce, say, inflationary costs or not lead to projects that
we couldn't defend? What do you think would be the overall
investments that would be needed over the next couple of years
in these areas?
Mr. Costa. We would love to continue to get billions of
dollars to do infrastructure work on our inventory. We have a
significant backlog and as you will see in our interim
information and on our project listing, we will certainly have
much, much more work to do not only when it comes to increasing
energy efficiency, but just basic infrastructure building
systems. So, yes, we think we could spend a fair amount more
and spend a fair amount that would achieve a great return to
the Government and taxpayers.
Mr. Perriello. And one additional question that has come up
earlier, which is the issue of making sure small towns and
rural communities are not left out of the equation. Sometimes,
when we get down to the biggest bang for the buck in terms of
job creation, the 20 percent of the Country that are small
towns and rural communities, much in my district, will not be
up on that priority list. What guarantees, if any, can you give
us that we will be seeing representation from those parts of
the Country as well?
Mr. Prouty. We are mindful of our responsibility to make
sure that this covers the entire Country.
Mr. Perriello. Thank you.
Mr. Arcuri. Thank you, Mr. Perriello.
I just have a couple more questions. Could someone tell me
a little bit about energy savings performance contracts?
Mr. Kampschroer. Energy savings performance contracts,
which were permanently authorized in the Energy Independence
and Security Act, act as a method for private sector financing
of capital improvements in buildings. We have used them in GSA.
The Department of Energy has just recently rewarded what is
called the super ESPC contract, and we issue task orders
against that. We have several energy savings performance
contracts that are ongoing right now and we intend to continue
with those as well.
Mr. Arcuri. Now, the President has called for retrofitting
75 percent of Federal buildings. Both the House and the Senate
stimulus packages allocate billions in stimulus to the GSA for
projects with the greatest impact on energy efficiency and
conservation. I am concerned that the current language in the
stimulus may not achieve the intended results. Do you think we
can leverage more efficiency and more jobs if we encourage
comprehensive projects like the energy savings performance
contracts?
Mr. Kampschroer. We intend to continue using energy savings
performance contracts, as there will still be work to be done,
as Mr. Costa mentioned earlier, in addition to the stimulus. So
we will continue to do that, and they are already authorized in
the bill, and the tools and techniques have been provided both
inside GSA and through the Department of Energy.
Mr. Arcuri. Do you think they can leverage more jobs,
though?
Mr. Kampschroer. Certainly, because the investment is
coming from other sources.
Mr. Arcuri. Now, it seems to me that additional efficiency
and job creation can be obtained with leveraging private sector
dollars, particularly on projects where savings are measured,
verified, and guaranteed, such as with the ESPCs. This seems to
me a very responsible use of Government stimulus dollars. Is
the GSA planning to fully utilize the ESPCs to reach its energy
efficiency goals? And will the GSA solicit the assistance of
the Department of Energy Federal Energy Management Program to
achieve these goals?
Mr. Kampschroer. We will solicit their assistance. In fact,
we have been having ongoing discussions with them on how to
best do that since, certainly, this summer, at the very least,
to try and coordinate their activities with our activities and
the award of the new contract, which they just awarded in
December. We have had ongoing discussions with Mr. Kidd, who
runs the Federal Energy Management Program in the Department of
Energy. We meet with them monthly on the interagency task force
on energy management, as well as monthly on the interagency
sustainability working group to coordinate our activities not
just between ourselves and the Department of Energy, but also
across the entire Federal Government.
Mr. Arcuri. Will the GSA be able to ensure compliance with
the Federal building provisions in the Energy Independence and
Security Act of 2007?
Mr. Kampschroer. These are in the forefront of our thinking
in the examination of every project and one of the reasons that
we are looking at some of the older designs to make them better
and also meet the requirements of the Energy Independence and
Security Act, yes, sir.
Mr. Arcuri. I ask unanimous consent to insert two letters
into the record from the Green Building Council. There being no
objection, so admitted.
Any other questions?
[No response.]
Mr. Arcuri. The hearing is adjourned.
[Whereupon, at 11:00 a.m., the Subcommittee was adjourned.]
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