[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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