[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]





                     RECOVERY TRACKING HEARING #3:
                         FOLLOWING THE DOLLARS
                              TO THE JOBS

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

                                (111-72)

                                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

                               __________

                            October 27, 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
LEONARD L. BOSWELL, Iowa             TODD RUSSELL PLATTS, Pennsylvania
TIM HOLDEN, Pennsylvania             SAM GRAVES, Missouri
BRIAN BAIRD, Washington              BILL SHUSTER, Pennsylvania
RICK LARSEN, Washington              JOHN BOOZMAN, Arkansas
MICHAEL E. CAPUANO, Massachusetts    SHELLEY MOORE CAPITO, West 
TIMOTHY H. BISHOP, New York          Virginia
MICHAEL H. MICHAUD, Maine            JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
GRACE F. NAPOLITANO, California      CHARLES W. DENT, Pennsylvania
DANIEL LIPINSKI, Illinois            CONNIE MACK, Florida
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
JASON ALTMIRE, Pennsylvania          JEAN SCHMIDT, Ohio
TIMOTHY J. WALZ, Minnesota           CANDICE S. MILLER, Michigan
HEATH SHULER, North Carolina         MARY FALLIN, Oklahoma
MICHAEL A. ARCURI, New York          VERN BUCHANAN, Florida
HARRY E. MITCHELL, Arizona           ROBERT E. LATTA, Ohio
CHRISTOPHER P. CARNEY, Pennsylvania  BRETT GUTHRIE, Kentucky
JOHN J. HALL, New York               ANH ``JOSEPH'' CAO, Louisiana
STEVE KAGEN, Wisconsin               AARON SCHOCK, Illinois
STEVE COHEN, Tennessee               PETE OLSON, Texas
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
VACANCY

                                  (ii)




 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

           ELEANOR HOLMES NORTON, District of Columbia, Chair

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........................................    vi

                               TESTIMONY

Fernandez, John R., Assistant Secretary of Commerce for Economic 
  Development, Economic Development Administration...............     8
Gold, Larry, Director of Community Services, Covenant House DC...    33
Grunley, Kenneth M., President, Grunley Construction Company, 
  Inc............................................................    33
Kendall, Bruce, Director, Office of Facilities Engineering and 
  Operations, Smithsonian Institution............................     8
McKirchy, Kathleen, Director, Community Services Agency, 
  Metropolitan Washington Council, AFL-CIO, Accompanied by 
  Camille Cormier, Director, Local Programs and Policy, Wider 
  Opportunities for Women........................................    33
O'Keefe, John P., Division President, Public Division, Clark 
  Construction Group, LLC........................................    33
Peck, Robert, Commissioner, Public Buildings Service, U.S. 
  General Services Administration................................     8

               STATEMENT SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri.................................    50
Norton, Hon. Eleanor Holmes, of the District of Columbia.........    51
Oberstar, Hon. James L., of Minnesota............................    54
Walz, Hon. Timothy J., of Minnesota..............................    57

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Cormier, Camille.................................................    99
Fernandez, John R................................................    58
Grunley, Kenneth M...............................................    71
Kendall, Bruce...................................................    85
McKirchy, Kathleen...............................................    91
O'Keefe, John P..................................................   102
Peck, Robert.....................................................   110

                       SUBMISSIONS FOR THE RECORD

Fernandez, John, Assistant Secretary of Commerce for Economic 
  Development Administration (EDA), responses to questions from 
  the Subcommittee...............................................    65
Grunley, Kenneth M., President, Grunley Construction Company, 
  Inc.:..........................................................
      List of ARRA Funded Projects...............................    77
      Business profile...........................................    78
Kendall, Bruce, Director, Office of Facilities Engineering and 
  Operations, Smithsonian Institution, responses to questions 
  from the Subcommittee..........................................    89
McKirchy, Kathleen, Director, Community Services Agency, 
  Metropolitan Washington Council, AFL-CIO, Accompanied by 
  Camille Cormier, Director, Local Programs and Policy, Wider 
  Opportunities for Women, responses to questions from the 
  Subcommittee...................................................    96
Norton, Hon. Eleanor Holmes, a Representative in Congress from 
  the District of Columbia, letter to Chairman Oberstar from 
  Mayor Adrian M. Fenty from the District of Columbia............     4
Peck, Robert, Commissioner, Public Buildings Service, U.S. 
  General Services Administration, responses to questions from 
  the Subcommittee...............................................   119

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



 
    RECOVERY TRACKING HEARING #3: FOLLOWING THE DOLLARS TO THE JOBS

                              ----------                              


                       Tuesday, October 27, 2009

                  House of Representatives,
      Subcommittee on Economic Development, Public 
               Buildings, and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 2:10 p.m., in 
Room 2167, Rayburn House Office Building, Hon. Eleanor Holmes 
Norton [Chair of the Subcommittee] presiding.
    Ms. Norton. This recovery tracking hearing number 3 is open 
for business.
    The American Recovery and Reinvestment Act of 2009, which 
we call the Recovery Act, or the stimulus, signed into law on 
February 17th, 2009, provided 5.5 billion for the General 
Services Administration, 4.5 billion of which was to convert 
GSA buildings into high-performance green buildings in all 50 
States, the District of Columbia, and the 4 territories. In 
addition, GSA received $300 million for border stations and 
lands of entry, and an additional $750 million for repair, 
alteration, and construction of Federal buildings and 
courthouses, $450 million of which was allocated to the new 
Department of Homeland Security headquarters compound buildings 
to be located on the St. Elizabeth's campus in ward 8 of the 
District of Columbia.
    The Smithsonian Institution received an appropriation of 
$25 million for facilities capital, which was to be used for 
repair and revitalization of its many deteriorating facilities.
    The Economic Development Administration received $150 
million, almost all of which was allocated for strategic grant 
investments in areas hard hit by the current recession.
    The Recovery Act is premised on the direct spending that 
data from many decades has shown has the best record for 
simultaneously stimulating the economy, providing jobs, and 
meeting the ongoing and existing responsibilities of government 
at every level for public infrastructure. The Recovery Act's 
primary purpose is to stimulate economic recovery through 
investments that preserve and create jobs, spur technological 
advances to enhance energy conservation, and improve 
infrastructure to provide long-term economic benefits.
    Our goal, though, is not only to distribute the funds 
quickly and to spark short-term job creation, but to ensure 
that these investments will lead to long-term, higher-skill, 
and higher-wage jobs. To this end we will be interested in how 
the apprenticeship training funds I got included in our package 
are being implemented.
    Today, nearly 8 months after the passage of the Recovery 
Act, we want to know specifically about results. How many jobs 
have been created? How much has been obligated and spent? How 
much is left to be spent? When will it be spent, and whether it 
will be spent by the September 2010 deadline. If GSA knows that 
38,000 jobs will be produced by the DHS headquarters 
construction over a period of several years, I am also 
interested in its calculation of the number of jobs to be 
created by the total $5.5 billion.
    This Subcommittee's tracking hearings will continue 
throughout 2010, the duration of the stimulus funding, because 
of our unique responsibility among the various Committees that 
are charged with oversight of stimulus funds. Unlike other 
funds in the Recovery Act, the funds under our jurisdiction are 
not distributed to the States. GSA, EDA, and the Smithsonian 
are not pass-throughs, but instead directly administer stimulus 
funds and contract for the work. This Subcommittee in turn 
bears a similar direct responsibility for the stimulus funds 
under our jurisdiction, and must continue to conduct especially 
vigorous oversight of these agencies.
    Americans can find the projects in their States and 
localities on line, and we invite their comments and 
observations on job creation, efficiency, and other aspects of 
the work.
    The stimulus has given the GSA an unparalleled opportunity 
to build the biggest development in its 60-year history, the 
Department of Homeland Security headquarters compound of three 
buildings and the reuse of 60 historical structures. This 
development may be the largest project anywhere in the United 
States today. This work will occur over a period beyond the 
initial stimulus funding, over several more years. However, 
based on the difficulty I encountered in securing the first 
funding, I know that additional funding will depend on how well 
and how quickly the current work proceeds. So much is at stake 
that we will hold special hearings on the DHS project alone 
from time to time. Today we want to understand what has begun 
there, what has been accomplished so far, who and how many have 
been hired, and what the timeline is on the DHS headquarters 
overall, among other questions.
    I was able to get the first sizable funding for the DHS 
headquarters project only by arguing that the project would 
provide a clear, proven case for job creation for a vital 
Federal agency. I will not be able to get the necessary 
additional funds, totalling more than $2 billion for the DHS 
compound, without a showing of significant progress both in job 
creation and in efficiently getting the first building up, 
while simultaneously beginning work on making the historic 
structures usable.
    In addition, the GSA stimulus funding also bites into the 
GSA backlog of repair for its vast inventory. The Subcommittee 
expects a quick start on much of that work in particular. Many 
repair and rehabilitation projects do not require extensive 
design work, and therefore can be implemented quickly to 
provide jobs of many kinds at a variety of skill levels, while 
meeting the purpose of stimulating the economy. The repair and 
alteration of GSA's existing Federal buildings will also retain 
space in the Federal inventory for occupancy by Federal 
agencies, which helps prop up the declining Federal Building 
Fund that in turn returns rent payments to the Federal 
Government to fund repairs and rescue the GSA inventory from 
another cycle of decline.
    The Smithsonian Institution likewise has a huge backlog of 
repairs for facilities. Although the Recovery Act funding for 
the Smithsonian is small relative to the need, these funds 
should permit a more systematic approach to shoring up its 
infrastructure, while creating jobs.
    For the record, I also want to comment today on highway 
stimulus fund spending by the District of Columbia. Though 
tracked through another Subcommittee of this Committee, the 
Committee has had oversight hearings on the Recovery Act 
spending by agencies and the States for all of our 
Subcommittees. At the last hearing of the Full Committee, I was 
chagrined to see the District of Columbia listed next to last 
among the 50 States and the District of Columbia on highway 
stimulus fund spending. I want to report today, however, that 
70 percent of the District's highway stimulus funds have been 
awarded or spent.
    As the stimulus bill was being considered, I took pains to 
see that the District was treated as a State for funding 
purposes. In reality, however, the District could not begin its 
work, like States with large departments of transportation 
staffs on hand, but instead must rely almost entirely on 
contractors. Now that most of the work is in progress, it 
appears that the city is using the funds as Congress most 
desired, for energy conservation and sustainable projects that 
facilitate walking, cycling, and mass transit improvements, and 
other projects that improve the local retail and commercial 
environment.
    Just yesterday Chairman Jim Oberstar and I went to Murch 
Elementary School, where the National Center for Safe Routes to 
School awarded Murch Elementary the James L. Oberstar Safe 
Routes to School Award for being the best in the country in 
encouraging walking and biking to school. Murch was able to win 
the award because the District added $4 million from its 
stimulus funds to its existing infrastructure funding for the 
Safe Routes to School program. Without objection, I am placing 
a letter from the Mayor of the District of Columbia detailing 
this progress into the record.
    [Information follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Ms. Norton. We look forward to hearing from the GSA, the 
EDA, and the Smithsonian Institution about what exactly has 
been accomplished. We are also pleased to welcome private 
contractors who have received Recovery Act funds.
    With that, I am pleased to invite the Ranking Member to 
offer remarks at this time.
    Mr. Diaz-Balart. Thank you very much, Madam Chairwoman. 
Thank you for holding this very important hearing. As you said, 
this is the third oversight hearing by the Subcommittee under 
your leadership on the Recovery Act funding to agencies within 
our jurisdiction.
    As everybody knows, in February, Congress enacted the bill, 
a bill that the administration and those who were supporting it 
touted as necessary to create jobs and to stimulate the 
economy. At the time the administration asserted, both publicly 
and in writing, that spending that $787 billion of taxpayers' 
funds would create an estimated 3- to 4 million jobs. Now, 
doing some simple math, that works to close to $200,000 per job 
created or saved. That was the promise. That was the hope.
    Since the Recovery Act passed in February, the national 
unemployment rate has unfortunately increased to almost 10 
percent, to actually 9.8 percent. Unfortunately, in the State 
of Florida it is now above 10 percent; it is at 11 percent. 
Now, according to the Recovery.gov Web site, and I have it 
here, just over 30,000 jobs have been created or saved with 
$173 billion paid out so far. Simple math will tell you that 
that is basically $5.7 million per job. Obviously, that should 
give everybody serious reasons to be concerned, because we 
obviously must do much better than that.
    Now, as I mentioned before in previous hearings, the 
priority under this spending bill was supposed to be creating 
jobs. That was its stated purpose. That was what was promised 
to the American people. However, I have continued raising the 
concerns that other issues have trumped, unfortunately, the 
priority of creating jobs. For example, out of the $5.5 billion 
for GSA's Federal Building Fund, not less than $4.5 billion was 
designated for converting Federal buildings to high-performance 
green buildings. I have brought this up a number of times. Now, 
look, obviously energy efficiency and conservation is an 
important issue. It is one that I greatly support. But the 
priority of that legislation and the priority of the times, I 
think, dictate that the priority has to be creating jobs.
    With all that said, I am interested in hearing from 
witnesses today on their progress and how many jobs they have 
created so far. I do understand that the Economic Development 
Administration has obligated all of its funds. And we know that 
EDA has a track record of actually leveraging taxpayer dollars 
to create jobs and to spur investment by the private sector, 
because they leverage it with the private sector. For example, 
EDA investments in fiscal year 2007 created or retained 
American jobs at an average cost of $4,000 per job, and EDA 
leveraged over $26 in private sector capital investment for 
every dollar, taxpayer dollar, invested. That is pretty good 
bang for the buck. That is an example of the type of return on 
investment that we should insist upon for the enormous amount 
of money that the taxpayer, their children, and their 
grandchildren have been asked and have been forced to, frankly, 
put forward. So I am interested in hearing whether the same job 
figures are holding for EDA's stimulus funds.
    I hope as we move forward on those Recovery Act projects 
that we can see significantly more jobs created and a good 
return on investment for the American taxpayer. I look forward 
to hearing from the witnesses today on this important issue. 
And I once again need to thank the Chairwoman of this 
Subcommittee for her diligence in making sure that job creation 
is emphasized and that we continue to do oversight. And while I 
thank you, Madam Chairwoman, I would be remiss if we don't 
thank the Chairman of the Full Committee, who has been very 
adamant on trying to make sure that we continue to emphasize 
that as well.
    Thank you, Madam Chairwoman. I look forward to the hearing.
    Ms. Norton. I thank you very much, Mr. Diaz-Balart.
    Ms. Norton. And I just want to indicate that I recall your 
view and the view of the Minority in the Congress that more of 
this money should have gone for transportation and 
infrastructure, and less for other matters. And I do want to 
caution you about calculating the expenditure of money over 
time by looking at obligated money compared to number of jobs. 
The obligated money is an amount of money obligated, still 
going out into the economy, and does not reflect the number of 
jobs that are created over time. And that is the only way to 
see--when we see what money has been spent, that is the only 
way to know the number of jobs.
    But I understand your concern, and that is why we are 
holding these hearings. And I very much appreciate your active 
and cooperative participation in all of these hearings.
    Are there remarks from the other Members? Mr. Walz, do you 
have any remarks? Mr. Walz of Minnesota?
    Mr. Walz. Well, thank you, Madam Chairwoman and the Ranking 
Member, for holding this hearing. I will just go ahead, with no 
objections, I will put my statement in the record so we can 
hear our witnesses.
    Ms. Norton. Thank you very much, Mr. Walz. I appreciate you 
being here.
    Mr. Carnahan of Missouri.
    Mr. Carnahan. Thank you, Madam Chair. I did have some brief 
remarks.
    I want to thank you and the Ranking Member for really 
leading this hearing to examine the execution of projects by 
GSA, EDA, and the Smithsonian funded by the American Recovery 
and Reinvestment Act.
    Part of the Recovery Act that I am particularly interested 
in is the 5.5 billion apportioned to GSA to upgrade its 
facilities. Specifically, the Recovery Act directs 750 million 
to renovate and construct Federal buildings and courthouses, 
300 million to renovate and construct land ports of entry, and 
4.5 billion to convert Federal buildings to high-performance 
buildings. Among the many projects funded will be the Robert A. 
Young Federal Building in St. Louis to make high-performance 
green building modernizations. Through this investment, the 
Federal Government will be one step closer to meeting the 
energy goals of the Energy Independence and Security Act.
    I believe it is important for the Federal Government to 
lead by example by making our buildings more energy efficient. 
One concern I do have is that as we invest in high-performance 
buildings is that GSA have the necessary tools to not only 
retrofit our existing government building stock to high-
performance buildings, but also to ensure that these buildings 
are properly maintained and operated at their high-performance 
standards. We cannot and should not invest in high-performance 
buildings if we are not training those facility managers to run 
those buildings and keep them maintained and operating 
efficiently.
    In closing, I want to thank our witnesses for joining us 
today, and look forward to hearing their testimony.
    I yield back.
    Ms. Norton. Thank you very much, Mr. Carnahan.
    Now we will go to the first panel of today's witnesses: 
John Fernandez, Assistant Secretary of Commerce for Economic 
Development at the Economic Development Administration; Robert 
Peck, Commissioner of Public Buildings Service, GSA; and Bruce 
Kendall, Director, Office of Facilities Engineering and 
Operations at the Smithsonian Institution.
    You may proceed in the order in which you are sitting. Mr. 
Fernandez.

TESTIMONY OF JOHN R. FERNANDEZ, ASSISTANT SECRETARY OF COMMERCE 
FOR ECONOMIC DEVELOPMENT, ECONOMIC DEVELOPMENT ADMINISTRATION; 
   ROBERT PECK, COMMISSIONER, PUBLIC BUILDINGS SERVICE, U.S. 
 GENERAL SERVICES ADMINISTRATION; AND BRUCE KENDALL, DIRECTOR, 
 OFFICE OF FACILITIES ENGINEERING AND OPERATIONS, SMITHSONIAN 
                          INSTITUTION

    Mr. Fernandez. Thank you very much.
    Ms. Norton. Please put your microphone as close as you can. 
This room has difficulty hearing.
    Mr. Fernandez. Madam Chair, Ranking Member Diaz-Balart, 
Members Walz and Carnahan, thank you for this opportunity to 
testify on behalf of the Economic Development Administration. 
Through our investments in local initiatives developed to 
create jobs and leverage private investment, EDA continues to 
seed communities for sustainable economic growth.
    As part of the American Recovery and Reinvestment Act of 
2009, EDA received $150 million to respond to areas in the 
Nation that had experienced sudden and severe economic 
dislocation. At the outset EDA determined that our 
implementation strategy would give preferences to projects that 
had the potential to quickly stimulate job creation and 
leverage private capital investment, while advancing regional 
economic development strategies.
    EDA responded with the appropriate sense of urgency, while 
not sacrificing the important. Less than a month after ARRA's 
enactment, EDA published a Federal Funding Opportunity notice 
and distributed the funds to each of our six regional offices. 
EDA established a stretch goal to have all of our ARRA funding 
obligated by the end of fiscal year 2009, and I am pleased to 
report that we met that goal. And as of September 25th, 2009, 
we had obligated the entire $147 million for program 
allocation. The balance of $3 million is available for salary 
and expense funding, which we will continue to use as part of 
the administration and oversight of EDA's ARRA awards.
    With its ARRA appropriation, EDA funded 68 projects in 37 
States, ranging in size from $184,000 to $6.4 million. The vast 
majority of our investments, in fact 96 percent of our 
investments, are funding construction projects, projects 
including traditional infrastructure as well as business 
incubators. These investments support a diverse mix of economic 
development activities linked to the recipient's regional 
economic development strategy.
    For example, EDA invested $4.7 million in the City of Santa 
Cruz, California, to help create the Digital Media Center @ the 
Tannery. This is a business incubator for digital media 
companies. EDA invested $800,000 in the Delaware Technical 
Community College to construct a Green Building Technology and 
Alternative Energy Systems Training Center. In Savannah, 
Georgia, EDA invested $2 million in the Georgia Ports Authority 
to enhance the port's service capacity.
    The Recovery and Reinvestment Act also required new 
measures for unprecedented accountability and transparency. We 
have directed our regional office to develop specific outreach 
initiatives to assist our recipient partners in meeting these 
additional reporting requirements. And I am pleased to report 
that as of today, 98 percent, really all but one of our grant 
recipients has successfully reported.
    Throughout this process, EDA staff here in Washington as 
well as in our field offices has been untiring in their 
efforts. Their dedication and commitment has been outstanding. 
I wish to congratulate them on their accomplishments to date.
    Madam Chair, EDA has a long and very successful 
relationship working with you and this Committee. I look 
forward to working with you as we strive to strengthen EDA, 
but, more importantly, strengthen the American economy. And I 
thank you for your time today, for inviting me to give an 
update on EDA's use of stimulus funds, and I look forward to 
answering any questions you might have.
    Ms. Norton. Thank you, Mr. Fernandez.
    Mr. Peck.
    Mr. Peck. Thank you, Madam Chair. Good afternoon. And 
Ranking Member Diaz-Balart, Mr. Walz and Mr. Carnahan. I have a 
statement that I would like to submit for the record, and I 
will make brief remarks. Thank you for inviting me to appear 
before you today to discuss GSA's contribution to the Nation's 
recovery through the green modernization of our building 
inventory.
    The ARRA, the American Recovery and Reinvestment Act, gave 
us an unprecedented and exciting opportunity to contribute to 
the Nation's recovery. As of today, GSA has obligated more than 
$1.4 billion for Federal building construction projects funded 
by the Recovery Act, and we have expended over $57 million. We 
exceeded our goal of obligating $1 billion by August 1st, and 
we are well on our way to obligating another billion dollars by 
the end of the calendar year, for a total of $2 billion by 
December 31st.
    We project that 60,200-some jobs will be created from the 
$5.5 billion in Recovery Act funding allocated to GSA. This 
projection is based on the Council of Economic Advisers' 
estimates of job creation. Initial reports indicate that as of 
October 23rd, 2009, our Recovery Act funding recipients have 
created or retained 773 jobs as a direct result of the $57 
million in spending, and I would emphasize that that is direct 
spending to date. It does not include the multiplier effect of 
other jobs. And it refers to the direct work that is being done 
today out of the $1.4 billion.
    While contract award is the catalyst for money flowing 
through the economy, it is important to note that Recovery Act 
funds do not flow immediately following a contract award. 
Rather, payments to contractors for progress made as they do 
the work provides steady support for the economy over an 
extended period; not a jolt that lasts for a few months, but a 
longtime recovery. These are positive preliminary indications 
of GSA's contributions to the economic recovery.
    We are leveraging our Recovery Act investments to begin to 
turn our large, varied, and stable inventory of buildings into 
a proving ground for green building technologies, materials, 
and operating practices. We are also moving forward with 
several leases required to move Federal employees out of 
buildings, and that will provide a $25 million stimulus through 
rent payments, including Recovery Act-funded relocation leases 
for the Lafayette Building renovation in Washington, D.C., and 
the Bishop Whipple Building in Fort Snelling, Minnesota.
    We have set interim target dates for project awards in each 
quarter to ensure that we obligate the $5 billion of the 5.5 
billion that we are supposed to obligate by our target date of 
the end of fiscal year 2010; that is, September 30th, 2010. The 
projects we have funded are varied in scope, type and region, 
and cover our entire portfolio. For example, we are building a 
new courthouse in Austin, Texas, that incorporates many 
innovative green features, such as high-efficiency heating, 
ventilating and air conditioning systems, and extensive use of 
natural light. I attended the groundbreaking ceremony for that 
on September 2nd. I am excited that we are building this 
courthouse to achieve a LEED Silver certification. The 
excavation has begun on that courthouse and is already 80 
percent complete. Building piers will be sunk beginning in mid-
November.
    Our progress toward consolidating the Department of 
Homeland Security, as you noted, Madam Chair, at St. 
Elizabeth's is on schedule. As we committed we would, we 
awarded a $435 million contract in August, of which 162 million 
was funded by the Recovery Act, for the design of a new energy-
efficient, 1.18-million-square-foot Coast Guard headquarters. 
The award went to Clark Design Build, LLC, a local contractor 
in this area. As you are aware, as you noted, St. E's will be 
the Washington metro area's largest Federal construction 
project since the Pentagon, and will revitalize and spur 
economic development in Anacostia, and will feature green 
roofs, landscaped courtyards, and provisions to reuse surface 
water runoff.
    In addition to new project starts, we are enhancing 
projects already under way by adding new high-performance green 
features, and that is one important way in which we will reduce 
some of the backlog of needed repairs to our Federal buildings 
and also make our inventory more green.
    The Recovery Act requires recipients of funds from GSA to 
submit quarterly reports. For this initial reporting period 
that will be completed October 31st, we utilized multiple media 
to help recipients with the reporting process. Our recipients 
have provided a lot of positive feedback about our call center, 
for example, and have expressed gratitude for our staff's 
assistance. I am proud to report that 99 percent of PBS' prime 
recipients have reported, and I can't emphasize enough how much 
the White House Recovery Office is emphasizing on-the-ground, 
real-time reporting of actual jobs that are created as they are 
created.
    We are also excited that apprenticeship and 
preapprenticeship programs are an integral part of our Recovery 
Act programs. We launched the preapprenticeship programs with 
two contract awards worth $1.8 million. These programs will 
enroll more than 400 unemployed people. We have initiated a 
process for additional candidate organizations to apply for the 
preapprenticeship training programs. We issued a solicitation 
on October 14th, and proposals are due back to us on November 
13th.
    Finally, we have identified 10 large Recovery Act projects 
representing about a billion and a quarter dollars in Recovery 
Act spending where project labor agreements may be used, and we 
are researching markets in several of those areas to make sure 
we do the PLA work right.
    We are also managing real estate in RWA-reimbursable work 
authorization projects to the tune of about $1 billion from 
other Federal agencies, most notably Social Security, State 
Department, NOAA, and DHS, and DHS Customs and Border 
Protection. We will also report on those as we do work. And to 
date I can tell you that we have authorizations from those 
agencies totalling $293 million in spending.
    In conclusion, I have just reported briefly on our 
accomplishments. You have in my written statement a list of all 
of the projects that have received at least partial funding to 
date, and I look forward to answering your questions.
    Ms. Norton. Thank you for that report, Mr. Peck.
    Mr. Kendall.
    Mr. Kendall. Chairwoman Norton and other distinguished 
Members, good afternoon. I am Bruce Kendall, Director of 
Facilities Engineering and Operations for the Smithsonian 
Institution. On behalf of the Institution, let me express my 
appreciation to you for this opportunity to testify on the 
tracking of Recovery Act dollars.
    The Smithsonian is extremely pleased to have received $25 
million of stimulus funds from the American Recovery and 
Reinvestment Act of 2009. We are grateful for the support of 
the Administration and the Congress for the essential work now 
under way here in the District of Columbia on the National 
Mall, and at the National Zoo in Rock Creek Park, at the zoo's 
Conservation Resource Center in Front Royal, Virginia, and at 
the Smithsonian's Environmental Research Center on the 
Chesapeake Bay in Edgewater, Maryland. We have applied these 
funds expeditiously to 16 important repair and revitalization 
projects at the aforementioned locations. All contracts were 
competed, and all but two of these contracts were let to 
qualifying Small Business/8a set-aside firms in the local area, 
for a total of $16.5 million. This is an update to what we have 
previously provided in written testimony. With the exception of 
a small retainage, about $3 million, for unforeseen 
contingencies, the funds are completely obligated, and work is 
in progress.
    In the spirit of the Recovery Act, we anticipate 
substantial completion of the work by the end of 2010. Valuable 
work is being accomplished under this program and will make 
significant improvements to the safety and reliability of many 
of the Smithsonian's buildings and systems. We are managing 
this work carefully to ensure the highest quality and safe 
delivery of products, while fully complying with the 
requirements for complete transparency and accurate reporting. 
The Smithsonian is gaining a great benefit from these funds 
while we create jobs for local craftsmen and laborers.
    Work on most of our contracts is under way, while reports 
on jobs created or retained are just starting to arrive. We 
anticipate that we will have created or assisted employers in 
retaining well over 100 jobs once the final reports are 
received.
    Thank you for this opportunity to provide an accounting of 
our Recovery Act dollars. I look forward to answering any 
questions.
    Ms. Norton. Thank you, Mr. Kendall.
    Before I proceed with questions from the Members, I want to 
ask Chairman Oberstar and Mr. Perriello if they have any 
opening remarks.
    Mr. Oberstar.
    Mr. Oberstar. Madam Chair, it is very important for us to 
continue this process of hearings on the Recovery Act and 
holding Federal and State agencies accountable for the Recovery 
Act funds that we crafted into the recovery program. And in the 
end, it was an appropriations bill, but we did all the 
programmatic portion of it.
    And we expected the highway and highway safety, bridge, and 
transit accounts to move out quickly, and they did. Those funds 
were allocated within 13 days of the President signing the bill 
into law on February 17th. Thirteen days after that, we had 
States notified of their amounts for their respective DOTs 
under the allocation formula in Federal law, which the Recovery 
Act followed. And we now have some 70 percent of the funds 
either out for bid, under contract, or on construction site, 
over 6,000 highway projects.
    And when our next report--our next hearing will be held and 
our next report is received, we will be in the range of 185,000 
direct construction jobs. There will be another 120,000 jobs in 
the supply chain supplying Redi-Mix, asphalt, sand and gravel, 
rebar, fencing, guard rails, and all that goes into highway 
construction. There is already a documented $6.5 billion 
payroll for those 180,000 construction jobs, and $900 million 
paid or being paid in Federal taxes alone.
    The public is getting its money back, it is getting 
permanent improvements, jobs are being created, and we are 130-
some days--we are well past the halfway point. The work of 
other government agencies and programs has lagged behind the 
performance of the Federal Highway Administration.
    And what I want to understand from the GSA is that we had a 
December 2008 list that we requested of GSA and of a whole host 
of other government agencies. You gave us courthouses and ports 
of entry. But in the response that we got to questions asked 
was that, quote, GSA did not expect Congress to authorize 
Recovery Act funds for modernization projects, and, in GSA's 
view, that only a billion, a little over a billion dollars, was 
allocated in the appropriations process for courthouses and 
ports of entry. The first question I want you to respond to is 
how did that dichotomy occur? And I know that the language 
change occurred in the House-Senate conference and also with 
the intervention of OMB.
    But the second beef that I have, frankly, is that questions 
that we have submitted to GSA have taken up to 2 months to get 
answers. That is unacceptable. We expect you to respond. You 
took over 45 days to develop the final list of projects. There 
are people out there hungry for these jobs. And I don't know 
what has taken so long, and I am unhappy with that.
    Further, on May 6th I sent a letter to GSA asking for a 
specific response to the renovation of the Federal building at 
United Nations Plaza in San Francisco. Five months later we got 
a response. That is not acceptable.
    Maybe GSA needs some stimulus to get enough people on board 
to answer our inquiries. We don't have time to be bird-dogging; 
we expect you to respond. And I expect better response in the 
future.
    So let us go back to the first one. What was the problem 
that you had design-ready projects in December of 2008, but 
then didn't proceed with those after the bill was enacted?
    Mr. Peck. Mr. Chairman, first may I say that--may I go back 
to the letter just for a moment? That is an unacceptable time 
period to respond to a letter. I arrived at GSA 2 months ago. I 
wasn't aware that that letter had taken that long. But I can 
tell you that the question of responding to correspondence both 
from the Congress, from vendors and others is a matter of great 
attention to us at the moment, and I assure you you will get 
much faster answers, and I apologize.
    Mr. Oberstar. I accept that, and I will look forward to a 
quick response in the future.
    Mr. Peck. Yes, sir.
    Second, I am probably not the person with the right 
knowledge to respond to you, because, again, when I arrived at 
GSA, I asked for a briefing. I am aware of the projects that we 
have to date. I do not, but can provide you with some quick 
answers for the record on what happened between December 2008 
and the list that was finally approved and that we have been 
working on. But as you note, it certainly does include a good 
number of full building modernizations and as well as some 
smaller-scale projects, which we believe we can get under way 
much faster. There are some projects that have broken ground. 
Many of them were fairly well into design by the time the 
stimulus money came in, and we were able to use it. And then 
other projects are very close to being awarded.
    I think that one of the problems we have, I will just make 
the note, is we are--obviously, these are directly funded 
Federal projects. We are not sending the money to anyone else 
to spend it. It is our money, your money, the taxpayers' 
dollars that we are spending directly. And I believe that we 
have moved out very quickly on some of the large projects to 
put them in shape. To put the contracts out, I think you will 
find in the next two quarters that we will have most of our 
$5.5 billion out on the street in contract awards. There is 
just a--in heavy building construction like this, there is a 
time lag that sometimes you don't see as much in----
    Mr. Oberstar. You had a billion obligated and committed to 
specific projects by the beginning of August, and you 
anticipate, according to our Committee investigative staff 
report, a billion by the end of this calendar year; is that 
correct?
    Mr. Peck. That is correct. That is correct. Yes, sir.
    Mr. Oberstar. And do you have a detailed list submitted 
that you can submit to the Committee of those specific 
projects?
    Mr. Peck. Mr. Chairman, we have given you--in my statement 
we have a list of projects, but they don't have the dollar 
amounts with them, which I will provide for the record. We do 
have that. We are up to a little over $1.4 billion as of today.
    Mr. Peck. One thing I will note and you should know about 
the numbers is that because of the slowdown in the economy, we 
are seeing construction bids coming back to us lower than we 
anticipated. So we have actually, for the $1.4 billion, awarded 
contracts that had earlier in the year we thought would be 
about $1.8 billion. So we are moving projects up on the list as 
we go.
    Mr. Oberstar. We have seen that in the Federal Highway 
Program with the States getting bids back 25 percent on average 
lower than final design estimates, final design and engineering 
estimates. So we are getting more dollars for the investment 
and more projects and more jobs created.
    Mr. Peck. That is also correct. If you take a look at our 
cost per jobs on the money spent, which is nowhere near the 
$1.4 billion, but the $57 million and 773 jobs--I hope I got 
that number right--we are down around 70-some-thousand dollars 
per job.
    Mr. Oberstar. Thank you.
    Mr. Fernandez, the EDA had moved out very efficiently and 
very effectively, had the best record of any of the agencies 
under our jurisdiction getting money out early to projects that 
had long been awaiting funding and that are specifically 
directed to job creation, industrial parks, and water and 
wastewater service, to industrial job growth and business 
development. I want to thank you and your staff throughout the 
country of staying on top of things.
    Mr. Fernandez. Thank you, Mr. Chairman. I wish I could take 
credit for it, but seeing how I have been here for----
    Mr. Oberstar. Put your mike on.
    Mr. Fernandez. It is on.
    Mr. Oberstar. Get closer.
    Mr. Fernandez. Mr. Chairman, I have been here for 6 weeks 
now. I wish I could take credit for the great work our agency 
did, but as you know, we have got a wonderful number of folks 
throughout the country in our regional offices that are very 
good at putting together these types of applications. They are 
in the field constantly evaluating opportunities to fund 
economic development projects, and they have got a wonderful 
track record. So they deserve all the credit for that.
    Mr. Oberstar. They do. They have been through Accelerated 
Public Works in 1963, Accelerated Public Works II in 1965, 
1966, and then Local Public Works I, Local Public Works II in 
the last year of Carter, first year of the Reagan 
administration. So EDA has learned how to do these projects and 
has grass-roots support. All these projects are initiated by 
the local development district boards, and they turn out to be 
very effective not only in immediate job creation, but long-
term job establishment and business development.
    Mr. Kendall, I appreciate the Smithsonian, relatively small 
slice of the stimulus, but there are many good initiatives that 
the Smithsonian has undertaken. And thank you for your 
presentation.
    Madam Chair, I will withhold at this point.
    Ms. Norton. Thank you, Mr. Chairman.
    Now, after asking Mr. Perriello if he has any comments, I 
am going to see if the Ranking Member has any questions, and 
then we will proceed.
    Mr. Perriello?
    Mr. Perriello. I just want to briefly thank Chairman 
Oberstar and Chairwoman Norton for their leadership on this.
    You know, we have made a major push here in Congress to try 
to prevent us from falling off a cliff into a depression. I 
come from a district that has over 20 percent unemployment in 
some areas, and the seriousness with which the people in my 
district are struggling just to get by day to day, week to week 
looking for job creation, I think it is incumbent upon all of 
us to dig deep 24/7 and see this as more than just a job right 
now, this is a calling to try to turn this economy around. And 
I know many people in your agencies and organizations are doing 
that sort of work.
    We just need to be sure to hold ourselves to the highest 
possible standard of everything we can possibly do for economic 
recovery and remember that behind each of those statistics that 
we talk about is a person looking for a job, there is a family 
trying to get by. So I hope we will just keep that in mind. And 
I really appreciate the Chairman keeping our feet to the fire 
on all of this, and look forward to hearing more from you 
during the questions.
    Thank you.
    Ms. Norton. Thank you, Mr. Perriello, for being here, and 
for those comments.
    Mr. Diaz-Balart, have you any questions?
    Mr. Diaz-Balart. Madam Chairman, I was going to withhold, 
but actually I do want to add to what Mr. Perriello said now 
that the Chairman is here.
    I mentioned before to you, Madam Chairwoman, and to the 
Chairman before, early on in this process, the Chairman was 
very emphatic about stating that he was not going to just sit 
back and hope that things happened; that he was going to have 
hearings and keep people's feet to the fire. Mr. Chairman, and 
I have told you this multiple times, I can agree or disagree 
with you, but you said that that is what you were going to do, 
you have continued to do it, and I want to thank you for that, 
add to the words of Mr. Perriello.
    A lot of words are spoken in this process. People do need 
to understand that when Chairman Oberstar--and I know in a very 
partisan process that we have here, it may sound weird for 
somebody to hear this from a Republican saying this about a 
Democrat--but when the Chairman said he was going to do that, 
he has done so. He has been emphatic, he has been aggressive, 
and yet always very inclusive. And as Mr. Perriello said, this 
has to be the priority, job creation.
    And I want to thank you for your efforts to get a 
transportation bill out, to make sure that the stimulus--we all 
wanted that stimulus to have more transportation money, and now 
to continue this struggle and this fight to make sure that we 
do the best job that we can with the cards that we were dealt. 
So thank you, Mr. Chairman, and also the Chairwoman of the 
Subcommittee, who, Mr. Chairman, you might want to know, I know 
she has a reputation, and rightfully so, of being really tough, 
but who has been nothing but wonderful to work with. So thank 
you, sir.
    Ms. Norton. I thank the gentleman for his kindness. We 
enjoy the greatest collegiality, he and I, and for that matter 
this Subcommittee, and it is why we get things done.
    And I just want to say, before I ask the first question, 
and then I am going to ask a question and go on to other 
Members before coming back to questions, you see a Chairman--
well, the Subcommittee is used to my taking names and writing 
down numbers. But you see there is a better name taker and 
number cruncher than I am at the head of the Committee. And the 
fact that the Chairman, who has oversight over more 
Subcommittees than I think any Chairman in the House, makes his 
way to this hearing says everything about the accountability 
expected of us, especially in light of our direct 
responsibility, because except for EDA, you are not pass-
throughs, you are accountable directly for the contracting. We 
have to show we can do it.
    And I want to associate myself, Mr. Diaz-Balart, with your 
remarks concerning a new transportation bill, which the 
Chairman is strenuously trying to get through here. We are not 
going to get another large stimulus package, but that is no 
excuse for letting the transportation bill lie fallow while 
jobs, not to mention highways, and transit, and improvements in 
great need, go by the way.
    We have a huge deficit problem, but no one can doubt, with 
unemployment as a lagging indicator, that something is going to 
have to be done. The best thing to do to stir jobs and the 
economy at the same time is get as much of the reauthorization 
of the highway bill out as possible.
    That said, I want to ask the same question to all of you. 
Notwithstanding my good friend's concern about outlays and 
jobs, I think we can come to some kind of agreement on that at 
a later time, but I do think both he and I would want to know 
precisely how many--well, not precisely, it is an organic 
process, but approximately how many jobs have been created on 
the projects under your agency, and how much of the total 
amount of funds has been obligated? Let me start with that 
before I go to the rest of the bottom line. All three of you. 
How many jobs? How much obligated of the total amount? What 
percentage of the total amount obligated?
    Mr. Fernandez.
    Mr. Fernandez. Madam Chairman, as I noted earlier, we have 
obligated 100 percent of our ARRA funds. In terms of the job 
numbers, we are in the final--you know, as part of the 
reporting mechanisms, numbers have been submitted to 
reporting.gov, and now we are in the final review of those 
numbers. We should have the--we should be able to give you the 
specific number in a matter of days.
    I can tell you the approach we took to the review of 
projects was traditional to the extent that EDA has been doing 
this for a long time. So we would anticipate very similar 
results in terms of the number of jobs based on the amount of 
investment or the investment per job.
    Ms. Norton. Now, you indicated in your testimony that you 
have a recipient reporting requirement and a kind of almost 
checklist. Does that include the number of jobs? Is that 
something new? Is that useful? Could perhaps we use it with 
other agencies?
    Mr. Fernandez. Well, as I understand it, we are looking at 
the direct construction jobs related to the investment.
    Ms. Norton. Now, this is an important distinction. The 
direct construction jobs is, of course, the only question I can 
ask. The reason we are doing stimulus funding is because of the 
multiplier effect that Mr. Peck spoke of, which is many times 
those jobs down the line and, interestingly, in various job 
categories across the spectrum of the entire economy. So go 
ahead, Mr. Fernandez.
    Mr. Fernandez. Yes. Absolutely, Madam Chairman. The numbers 
that are being reported through recovery--or reporting.gov are 
the recipient numbers that go to that particular investment. We 
review those numbers, and then there is a final checkoff before 
the numbers are released.
    Ms. Norton. So how often do you do that, Mr. Fernandez?
    Mr. Fernandez. It is a quarterly requirement. So we are 
coming to the end of the first reporting period at the end of 
this month. So those numbers will be----
    Ms. Norton. Well, that is fair. It does take some time to 
get a fair sense of whether you have people who are permanently 
on the ground for this period. Thirty days, would you get us 
your first report on jobs created?
    Mr. Fernandez. Absolutely.
    Ms. Norton. Mr. Peck, same question for you. How many jobs? 
What percentage of total funds, 5.5 billion obligated?
    Mr. Peck. Of the 5.5 billion we have obligated 1.4 billion, 
or 25 percent.
    Ms. Norton. Now, is that on target for something or how do 
you arrive at----
    Mr. Peck. It is.
    Ms. Norton. How do you know whether you are going to finish 
on time without looking at integrals?
    Mr. Peck. Well, as you know, on construction projects you 
have milestones for when you are going to acquire the site, 
when you are going to begin design. ``When you end design, when 
you award the construction contract,'' end design or work the 
construction contract. You make progress payments along the way 
and you have a target date for the date it is going to be done. 
And we have all of those.
    So what we did, and I have to say again, there is a project 
management office in GSA that manages this superbly. We for 
each project know the project schedules, we aggregate them and 
have a----
    Ms. Norton. Are you on target, is 25 percent where you 
expected to be at this hearing?
    Mr. Peck. Yes, ma'am, that is correct, and we expect to be 
at $2 billion by December 31st of this year.
    Ms. Norton. Okay. You have given us a very hopeful 
calculation for the number of jobs that will be created at the 
Department of Homeland Security site, maybe over 7 or 8 years, 
38,000. How many jobs have you created thus far at the various 
GSA sites?
    Mr. Peck. At the various sites so far our recipient 
reporting indicates 773, because again the spending to date is 
57 million.
    Ms. Norton. Okay. I am going to ask questions about 
spending in a moment. Mr. Kendall, same question, obligation 
and number of hires.
    Mr. Kendall. Madam Chair, we have obligated 86-1/2 percent 
of our funds for construction projects, which is approximately 
$21 million. The reporting that was established has just 
recently begun, October 20th I believe is the cut-off date for 
the reporting, and we had 51 new jobs retained or created 
reported by our prime contractors. We expect, as I stated in my 
testimony, that number to be well over 100 as our jobs get 
underway. Many of our construction jobs are just getting 
underway and will run from 7 to 15 months for construction. So 
we do expect those numbers to increase.
    Ms. Norton. Thank you, Mr. Kendall.
    Now at our tracking hearing for the entire overall 
Committee, great dispute arose because of the difference 
between obligation outlays and real spending. So let me ask you 
about spending. How many money has been spent so far and what 
does that indicate about your contracting process? Mr. 
Fernandez.
    Mr. Fernandez. Well, to date, Madam Chairman, we have spent 
about 8 percent of the obligated funds, or a little over $12 
million. We anticipate by the end of this calendar year that--
these are the start dates of the projects so that the money is 
not just allocated to the recipient, but they are actually in 
the field doing the work and the money is being spent. We 
anticipate getting up to 30 percent or almost $32 million by 
the end of this calendar year. Not to go quarter by quarter, 
but by the end of September 2010, which will be the target date 
for us, we will be at 98 percent of all of our ARRA spending.
    Ms. Norton. Now, I understand what this means, a worker 
goes on the job and you pay that worker every 2 weeks, or 
whatever is the amount of time. So those expenditures of course 
go up the longer the worker stays employed. What about 
expenditures, Mr. Peck, in terms of outlays or actual spending?
    Mr. Peck. Actual spending, as I noted, is about $57 
million. That is about 5 percent of the obligations to date. 
And let me note two things. I am not surprised there was a 
debate before, because these numbers are part science and part 
art. The job numbers are a science, because I think you have to 
give the administration a lot of credit for setting up a 
centralized reporting mechanism that says we want to know 
exactly direct----
    Ms. Norton. So there is the transparency, anybody can find 
out.
    Mr. Peck. Absolutely. There is no fudging. That is not a 
multiplier effect, just is just jobs that people say they have 
created. The other thing to note here is that those numbers 
will really--in a construction project, as long as we are at a 
point where we are paying for design up front, architects, some 
demolition, environmental testing, we are not spending money in 
great big gobs. When we are award construction contracts, we 
will see a lot of workers put on. That is one.
    The second point to remember is that we pay in arrears, 
which means that people are being paid in advance of the 
Federal funding going out. People apply for progress payments 
when they have made progress. That is number two.
    Number three , it is important to note that even awarding a 
construction contract before--when we indicate that we are 
going to go forward with a project and we start hiring 
architects and then we make a construction award, the 
contractors, and you can ask the contractors who are here, can 
mobilize their subcontractors and tell them that there is going 
to be a job in 2 months. That makes a difference in how much 
people feel confident about the economy and what they do, and I 
think that is one of those lagging indicators that you just 
don't quite see.
    Ms. Norton. Thank you, Mr. Peck. Mr. Kendall, expenditures?
    Mr. Kendall. Madam Chair, a little over $4 million has been 
billed by our contractors of the obligated amount of $21 
million.
    Ms. Norton. Yes.
    I am going to go now to I think it was Mr. Walz would have 
been next. Mr. Walz of Minnesota, do you have any questions?
    Mr. Walz. No, ma'am.
    Ms. Norton. Mr. Carnahan.
    Mr. Carnahan. Thank you, Madam Chair. And I want to thank 
the panel and start with Mr. Peck, and I want to specifically 
focus on the GSA's capabilities in terms of having enough 
Federal facilities, managers and operators who are properly 
trained and certified. Where does that stand today? If it is 
not where you think it needs to be, what plans are in place to 
really bring that up as the sophistication of these buildings 
increases with these investments? How are we keeping our 
personnel up with that.
    Mr. Peck. I am glad you asked that because one of the 
things that gets lost sometimes with all of us who do 
construction and real estate is we love the new buildings and 
love to build them, and then sometimes we walk away a little 
bit once they are up. And particularly on green technology 
there is, as you note, a learning curve for our building 
managers. We have--I think we have sufficient building 
managers, facilities managers to run our projects well 
currently, in part because what we do is our facilities 
managers really contract a lot with private sector services for 
cleaning and maintenance on our buildings.
    But you have put your finger on a problem that we have both 
in the public and private sector at the moment, which is that 
to some extent our green practices and technologies are running 
a little bit ahead of the people who have to maintain them. We 
are working with the International Facilities Management 
Association, the Building Owners and Managers Association. We 
are all talking about the same kinds of issues, and we are 
putting in place training programs for our managers to train 
them in some of the new green practices.
    It requires different ways. If you install certain kinds of 
water conserving devices in your buildings, people have to 
learn a different way to maintain them. And that means not just 
the Federal facilities managers, but also the contractors. I 
can tell you tell you one of the choke points that we have 
experienced in previous years, and I think it is getting 
better, is finding private sector contractors who know how to 
clean a building or maintain a building using green practices.
    Because the industry as a whole is starting to embrace 
green practices, it is becoming a little bit easier, but it is 
something that we are talking about. We are contracting, we are 
sending people to training all the time.
    Mr. Carnahan. Is that specific training for your employees 
in the public building service or is this also in partnership 
with the private sector?
    Mr. Peck. It is both. It is training our people and also 
changing the specifications we have in the contracts we put out 
for the people we hire to do some of the detailed maintenance 
and cleaning work.
    Mr. Carnahan. The other thing I want to ask about is energy 
performance contracts and the ability to leverage some of this 
funding with those type of companies where they can come in and 
provide the up front capital costs for some of these 
renovations with the energy saving gains that are passed along 
to the government.
    Mr. Peck. We have made use of those in a number of previous 
years, and we have looked at them for some of the Recovery Act 
projects as well. There is a--in some cases the time it takes 
to get those contracts in place has made us decide not to use 
them on some of the Recovery Act projects. But can I also say 
that we believe we are in this for the long term. We think we 
need to green our inventory not just with the $5-1/2 billion we 
have, but as we go forward we are taking up how we can use 
those contracts best. Some of it may require some streamlining 
of some of our processes, but it is a great opportunity to 
leverage our funding.
    Mr. Carnahan. Thank you, gentlemen.
    Ms. Norton. Mr. Diaz-Balart, do you have any additional 
questions?
    Mr. Diaz-Balart. I will hold.
    Ms. Norton. Thank you. He is holding for the moment.
    The President has spoken out on the failure of small 
businesses to feel the--for example, the 10,000 Dow last week. 
I guess they must have shook their heads, wow, 10,000 Dow. The 
reason they shook their heads is we only reached that for the 
first time I think in 1999, and zip, these folks are back, 
thanks to our money. And yet, you will find that my 
constituents and I are still not feeling it. Do you feel me? 
No.
    I want to know what each of you have done to make sure 
small business contracting is included in the stimulus funding 
so they at least feel it from us, if not from Wall Street 
loans.
    Mr. Fernandez.
    Mr. Fernandez. That is a very good question, Madam 
Chairman. In fact, I will have to commit to coming back to you 
with a response as far as any specific elements of our funding 
opportunity notice that may have included those elements.
    Ms. Norton. Mr. Fernandez, you are the only one of the 
three here who is in effect the pass-through to the States.
    Mr. Fernandez. Right.
    Ms. Norton. Now, this is very important.
    Mr. Fernandez. Absolutely.
    Ms. Norton. EDA is highly effective in spending funds, 
which is why we were able to get funding for you in the first 
place. You should have and we need to know in 30 days whether 
or not there is a small business plan for the spending of these 
stimulus dollars, these dollars. Your dollars for sure are 
going to those with the highest unemployment rates where small 
business is down, if not out. We need to see your small 
business plan within 30 days to know how it is communicated to 
the States and to see what the reporting requirement is, not 
only with job creation, but with stimulus. If this money does 
not reach a small business contract, then the funds over which 
we have oversight will have been a partial failure.
    Mr. Peck, small business incorporation into your work, how 
is that occurring?
    Mr. Peck. Well, it is part of our normal procedure as any 
construction contract for a million dollars or more has to come 
with a small business subcontracting plan. It is a little bit 
unfortunate in Federal small business contract reporting that 
we don't get credit for subcontracts.
    Ms. Norton. Could you explain why--please make me 
understand. I know there must be a reason why whenever you hear 
something like that, the first thing you should not think is 
how stupid. Somebody had a reason for doing that and you 
shouldn't try to undo it until you get all the facts on the 
table. So what is the reason why since most of the small 
business contracting, for example, would go on----
    Mr. Peck. Right.
    Ms. Norton. --through these subcontractors. Why does the 
government not count it?
    Mr. Peck. I think--I believe, I guess we should ask others 
who know better, but I believe that the good intention here is 
not to let agencies off the hook by hiring big contractors for 
things and then they will just sort of pass it down--you know, 
they will pretend they have a subcontractor doing the work and 
get credit for it.
    In our case, in the construction industry, I have to say, I 
think that is a generic view of Federal contracting. In the 
construction industry, though, where you know when you hire a 
general contractor, often so much of what they do is done 
through small business subcontractors--I don't want to get into 
trouble with any of my friends here who are contractors here, 
but I don't know what the percentage is of their own full-time 
employees versus their subs who really don't work full time for 
them. All I am saying in the construction industry it is 
somewhat different. But we monitor very closely the 
subcontracting plans that people give us and find out if they 
are actually following them.
    Can I just say----
    Ms. Norton. At least in the construction industry, so long 
as you kept records, and I hate to even talk about keeping 
records, but as long as you knew who it was, whether the sub or 
the general contractor who obviously doesn't have as many 
opportunities to engage in small business contracting, as long 
as you knew, there wouldn't be any problem at least in 
construction work, with getting credit, for that matter putting 
some pressure on your subcontractors to engage in small 
business contracting?
    Mr. Peck. That is correct, and we do track how much of the 
subcontracting is going to small businesses.
    Ms. Norton. So in construction, Mr. Peck, if we gave credit 
for the subs hiring or, excuse me, engaging in small business 
contracting, wouldn't that be an incentive for them in letting 
their own subcontracting hold those subcontractors accountable, 
and since they are also going to get some credit? I don't see 
why at least in contracting it wouldn't make sense to do.
    Mr. Peck. Well, I don't have a good answer for you about 
why is wouldn't make good sense.
    Ms. Norton. I accept your answer that generically perhaps 
in some other areas of the economy it wouldn't work as well.
    Mr. Peck. That would probably make sense, but we do have 
subcontracting goals, as I said, for small businesses, we hold 
our contractors to them. In addition to that, we hold, have 
held and are going to hold more fairs for small business 
contractors and we have put things on websites and through 
contractors association, because not everybody is still so 
computer savvy, to let people know where there are 
opportunities. Sometimes with small businesses I have to say it 
is a matter of leading them to the large businesses that have 
some of our contracts.
    Ms. Norton. Of course. There was a very large and 
impressive fair held just yesterday at the Ronald Reagan 
Building where all these small businesses and large businesses 
alike set up booths, so that the industry itself, we didn't do 
this, or GSA didn't do this. The industry brought every which a 
way of small business and other mid-sized and larger businesses 
in the same large atrium and they could network among 
themselves, find themselves, find the contractor, find the 
subs.
    A contractor, a very successful subcontractor who was 
working on a GSA project, told me that a large contractor saw 
what he had already done and came to him and invited him to 
participate in his work.
    Well, I want that. That was a large sub contract. I want 
him to get credit for seeking out the small business who is 
going to now be doing some subcontracting. I am going to ask 
staff to help me figure out whether there is a way to give an 
incentive for larger contractors to enable or encourage their 
subs to engage in small businesses contracting, particularly in 
light of the fact that the greatest problem, as I see it, with 
the stimulus in the business sector has to do with the small 
business sector, which provides jobs more quickly than other 
sections of the economy.
    Mr. Kendall.
    Mr. Kendall. Madam Chair, specifically to the Recovery Act 
projects that we have awarded, we are proud that 100 percent of 
our projects were awarded competitively, and we are also very 
proud that small business 8(a) firms were significant partners 
in this effort. That is, those small businesses and 8(a) firms 
were recipients of 68 percent of the value of the funds that we 
received. And this goes to the very proactive program that we 
have with small business at the Smithsonian and it was 
leveraged here in the case of the ARRA funds.
    Ms. Norton. Thank you, Mr. Kendall. And would each of you, 
Mr. Fernandez and Mr. Peck, break down the small business to 
get within 30 days how many of those have been 8(a) small 
businesses or disadvantaged businesses of any kind. And could I 
see, Mr. Peck, could we see within 30 days your small business 
plan, how it operates since you do this almost automatically? 
Mr. Kendall has already done it and Mr. Fernandez is getting us 
such a plan.
    Let me ask you, Mr. Peck, in May when we had--first let me 
say we note--I should ask you another question, as it turns 
out, on small business plans. Are small business involved or 
small business plans also a part of the national broker 
contract?
    Mr. Peck. Yes, ma'am.
    Ms. Norton. Would you get us a copy of your small business 
plan that is a part of the national broker contract within 30 
days?
    Mr. Peck. Yes, ma'am.
    Ms. Norton. That is obviously an enormous opportunity, 
particularly today, for smaller firms. We have these huge firms 
that have the broker contract for leasing and who are real 
hungry, smaller firms who also do leasing and may be a whole 
lot better and quicker at it than the larger firm which may 
serve an entire region of the country.
    I note, and we are very pleased to see, that GSA is 
available to help our agencies, because you are the agency with 
the most direct--did I say the NRC--you are the agency with the 
most direct--yes, it is the NRC, the Nuclear Regulatory 
Commission is what I am talking about. You are the agency with 
the direct building and construction expertise.
    Now we have got to find out. Well, first, let me see if you 
helped the--this is the Washington Post, October 27th, this 
very day. NRC design, build office tower. Didn't go through 
this Committee, real no-no. Somebody lobbied, probably the 
agency itself, and got the money put in an appropriation bill. 
I want to know if GSA has assisted the NRC in this unauthorized 
project to build--design-build no less, in a specific location 
without competitive contracting, the mortal sin in this area. 
Whether or not the GSA has assisted the NRC to in this 14-story 
design-build project, across the street from where it is, where 
at taxpayers expense they go to downtown Bethesda, one of the 
most expensive parts of the region or of the United States of 
America without allowing the taxpayers to see if that is the 
best place for it to be spent. Where did they get the 
authority? What is the cost per square foot? Did you help them 
at all in how far they have gone with respect to this 
unauthorized construction?
    Mr. Peck. Madam Chair, the NRC lease is in fact a GSA 
lease. I don't----
    Ms. Norton. The design, build, and construction.
    Mr. Peck. It is actually not what is known as a lease 
construction per se, but it was a--it is a 15-year lease. There 
was a----
    Ms. Norton. A 15-year lease of a private----
    Mr. Peck. Of a privately owned brand new building.
    Ms. Norton. Understand, everybody what we are hearing. Some 
developer somewhere has been able to get the government to plop 
down money to rent his building for 15 years and he did not 
have to compete anywhere else in the region. Is that so, Mr. 
Peck?
    Mr. Peck. Well, there was--we did issue a competitive--what 
was supposed to be a competitive solicitation for offers. 
However----
    Ms. Norton. Oh, it is interesting on what say-so. We don't 
have any record of that before this Committee.
    Mr. Peck. Well, I think because there was a direct 
reference to the lease in an appropriations act. The 
Consolidated Appropriations Act for 2008, Public Law 110-161, 
included a provision requiring that the lease for an expansion 
lease for the NRC be "as close to reasonably possible to the 
Commission's headquarters location in Rockville, Maryland."
    Ms. Norton. Well, of course we never use language like 
that. Because we are the authorizers and the taxpayers tell us 
that wherever it is, it has to be the best deal for the 
taxpayers. If it is across town or if it is across the street, 
fine. But after competition. Did you tell those who superseded 
the leasing language of this Subcommittee what the law requires 
and question that at all or did you just go ahead and do 
unauthorized work without consulting even with this 
Subcommittee.
    Mr. Peck. Madam Chair, I rarely duck a question, but it was 
before my time and, to be honest, I saw the newspaper this 
morning and saw that this lease was announced and it is--I 
don't have any more information than what I just gave you. I 
have asked this morning to find out what I can about it. I 
don't know quite how this lease started. I do know that NRC was 
working for expansion space, they have other leases. There 
has--there was in the previous administration a push for more 
nuclear energy. Interest may be in this one too for all I know. 
NRC I know had asked for more staff and this was an expansion 
lease. How the language got in the appropriations bill, I 
unfortunately don't know.
    Ms. Norton. I can't hold you responsible. I do want your 
commitment that on your watch you will never simply supercede 
language from this Committee without informing this Committee 
so that we can have a little talk with the appropriators of the 
Senate.
    Mr. Peck. You know I used to work on an authorizing 
Committee on the Senate side. I know this issue and you have my 
assurance.
    Ms. Norton. Well, let me tell you, this is very serious. We 
have seen some executive redlining by GSA in this Committee 
where people try to go to K Street at hugely inflated rents to 
the taxpayers. Inflated only because there are so many, that is 
where the highest prices are, when right down the street, just 
close to the Senate; for example, in NOMA, they could get the 
space much cheaper.
    We saw an extraordinary case of redlining where HHS indeed 
altered without consulting this Committee a prospectus, even 
though language says you can't offer a prospectus. They did it 
by amendment and said that wasn't alteration, whereby the new 
amendment said that HHS had to lease space close to 
hairdressers, barber shops, churches, violation of church and 
state, hardware stores. It was a complete and total outrage. It 
was such an outrage that GSA had to withdraw the prospectus. It 
so flew in the face of the law, and GSA was going to have its 
pants sued off of it. I only came to know about it because a 
competing developer wrote me a 3-page letter.
    So we take very seriously unauthorized matters. And as long 
as you assure us that that will not happen on your watch. I 
can't hold you responsible for what didn't happen on your 
watch. But I have to tell you that it is a combination of 
overriding the authorizers and redlining, because these people 
say I like my neighborhood. I don't care what it costs the 
taxpayer. It is totally unacceptable and where we find it, we 
have to stop it and call the agency to account.
    I accept your response. Be on notice.
    However, Mr. Fernandez, one of the goals you name is what 
attracts us to the EDA. By the way the EDA, I think he 
authorized this too when he was a staffer as one of the 
favorites of the Chairman and of mine, but it has to do with 
something stated on page 1 about your goal to attract private 
capital investment. Unlike other infrastructure building, you 
are charged not only with building, but with building so that, 
as we are seen from our hearings, much more often private 
capital investment is attracted simply because of what you do.
    I wonder if would tell us how you decided on the projects? 
You say, for example, they are not in all 50 States. So you 
must have had some kind of--indeed, you had a competitive 
process, but you must have had some goals, and we are 
interested in this goal of attracting private sector based on 
what you do in the public sector.
    Mr. Fernandez. As I mentioned in one of my earlier answers, 
Madam Chairman, that for us the Stimulus Act was not a new 
process or totally different extension of the Agency's work. So 
we were able to pretty quickly adopt a hybrid approach to our 
grant process in terms of the criteria we used for allocating 
the total funds across the regions. But as part of the review 
process, our regional offices and their internal investment 
review committees approach these grants the same way that they 
approach our ongoing program funds, and that is to look at the 
capacity of the recipient or the applicant to administer the 
fund, the amount of projected jobs, the amounts of private 
investment that they project, the leverage.
    Ms. Norton. Could you give us an example of a project, how 
you would, unlike the way we would do a highways project, or 
maybe in fact some highways projects are done this way, too, of 
perhaps an ongoing project that has been selected and has or 
you expect to leverage several times the amount you are putting 
in with private investment?
    Mr. Fernandez. Yeah, as you I am sure were aware, Madam 
Chair, when we look it the applicants, we provide guidelines or 
guidance to the regional offices, and the vast majority of 
decisions are made at the regional office. They are the folks 
that have people on the ground, they understand what is 
important within their States and within the sub districts 
within their State in terms of the economic development 
priorities of those communities. So they have guidance from us 
on the private investment side. We try and shoot for a return 
north of maybe 25, $26 return for every Federal dollar 
invested. Historically EDA has been very good at receiving that 
kind of return on investment.
    As I noted earlier, we are going through the recipient 
responses as part of the transparency in reporting 
requirements. We should be able to give you projections, but I 
feel very confident since our staff was using a very similar 
evaluation methodology that we should meet or exceed those 
leveraged numbers as well for the stimulus projects as we do 
for our other ongoing funding.
    Ms. Norton. Mr. Fernandez, to the extent you can get us 
those projections for projects, that would be very helpful and 
very useful to us, because we are in the process of 
reauthorizing the EDA as I speak and there will be a bill 
coming forward.
    Mr. Carnahan, do you have further questions?
    Mr. Carnahan. No, Madam Chair.
    Ms. Norton. I have a question for Mr. Peck. Mr. Peck, you 
know and I am sure you have the same concern as our concern 
with the declining Federal Building Fund. One of the things 
your stimulus package is going to do is maintain our inventory 
so we don't have to lease as much. So we have a hard time 
understanding how any agency could get away with paying no 
rent. But I want to shout it from the hilltops so that all the 
agencies who are paying rent to the Federal Building Fund 
knows. One of the largest agencies, the USDA, the Department of 
Agriculture, is paying no rent. Even the smallest agencies who 
occupy Federal office space pay the going rate. That way we 
circulate the money and we fix up the buildings so that they 
don't go into decline.
    Now, we have asked this question in the past, indeed for 5 
years. The USDA, GSA tells us is trying to get the USDA to pay 
rent. What a scofflaw. Now I have to tell you we have been 
discussing, my good friend went to the floor, I went to caucus 
to discuss health care today. It hasn't taken us 5 years to 
discuss health care, which is going to shortly come to the 
floor.
    So I am going to have to ask you, Mr. Peck, what amount of 
back rent has thus far been paid into the Federal Building Fund 
by the USDA pursuant to your negotiations with the Agency? 
Imagine negotiating with a scofflaw. Maybe you can't put them 
out, but you do have real authority. And so I want to know how 
much in arrears, how much you have gotten so far, and what you 
are doing to get the rest. Let's hear it, sir.
    Mr. Peck. Okay. I don't have an answer for you today, 
although I am afraid I can guess at the answer. I can tell you 
that I have already had, I think you made me aware of this at a 
previous hearing, I have already had a meeting with officials 
at the Department of Agriculture. I do understand they have 
heard this from GSA before and----
    Ms. Norton. Heard what from GSA?
    Mr. Peck. Heard from GSA before that GSA would like them to 
pay rent.
    Ms. Norton. They are well aware of it, and I don't see why 
they should pay unless GSA does--what should GSA be doing?
    Mr. Peck. This is one of those things that I think we need 
to talk to inside the executive branch at a higher level than 
between me and the people at GSA.
    Ms. Norton. Mr. Peck, within 30 days we need to see, 
because I believe we could get a response, we need to see a 
letter from you before we send our letter. We need to see a 
letter from you to the head of OMB, indicating that the 
agencies of the Federal Government are subsidizing the USDA, 
because everybody else pays rent or virtually everybody else. 
By the way, I would like to see in 30 days a list of agencies 
who do not pay rent because everybody who does is therefore 
subsidizing all of them, but surely this is the largest of 
them. We know who can get this done and we know how little GSA 
gets done when they are in this kind of fix.
    So first of all, we need not your whispering to OMB, why 
don't you all do something about this, we need to see in 
writing a letter indicating what the back rent is, your 
inability or the inability before you came to get USDA to move, 
how this becomes an incentive for other agencies also to stop 
paying, the state of the Federal Building Fund today, which is 
declining because we must lease more, given the state of our 
own inventory, laying it out and requesting and indicating that 
the Subcommittee and the Full Committee have asked you to make 
this request, you do so on our behalf and on behalf of the 
Agency itself.
    Do you have any problem with sending a letter within 30 
days to the head of OMB to that effect?
    Mr. Peck. Madam Chair, of all the questions you have ever 
asked me, that is the one I am probably happiest to answer, 
yes. I am happy to do it.
    Ms. Norton. Because I have not put on your shoulders more 
than--what is the old spiritual--give you strength to bear. But 
I think that if you called to the attention of this White House 
that there is a scofflaw among them, that they will feel some 
obligation to do what it seems to me they can do best, and send 
a cc to us, because that means the White House will send a cc 
to us. We will back you up. We hope never to have to ask this 
question again.
    I must say to you that just we are looking for you to use 
all the leverage you have, and you have indicated in your own 
testimony you are doing so. It seems to me well enough with 
respect to the stimulus funds, but we note that we went to 
great lengths to get the Old Post Office project out here. Like 
the USDA, which you have the authority to make pay the rent, 
you on your own, if you are an agency that stands up to a peer 
agency. You also had the authority, you before you were there, 
to in fact do the Old Post Office, a slum of a great historic 
building right across from the White House. In July the GSA 
testified that it was hosting the Urban Land Institute to talk 
with the private sector about financing opportunities. You 
should have done this 5 years ago when the economy was hard, 
now you have to do it now.
    What is the status of the Old Post Office project?
    Mr. Peck. That Urban Land Institute panel is meeting here 
in Washington in early December. As you indicated, the right 
question to ask at the moment is whether a private sector 
partner could find the financing today to do the kind of 
project that government is contemplating.
    Ms. Norton. Just a moment, this is easier than some 
projects would be, first of all because it is a historic 
project and the GSA itself would be involved in the funding. 
This is like the Tariff Building. This shows the return to the 
government. This administration understands return to the 
government. That is why it bought a building that it had been 
renting with this year's appropriations. So I need to know how 
you intend to move on the Old Post Office building, even though 
the economy may not come back this year or next year.
    Mr. Peck. I can tell you in brief that the purpose of 
having the Urban Land Institute panel is to test the market's 
response to a potential solicitation for offers on the 
building, because that is what we would like to do. That is 
what we did with the Tariff Building, now the Hotel Monaco, 
although, as you note, we were able to do that in a better 
economic period and that is one of the things we need to do. 
What we want don't want to do is go to the market and find out 
there is no response. So this is just a marketing, a test 
marketing that we are going to do with the ULI people.
    Ms. Norton. Before I go on with more questions, I know that 
the Ranking Member and Mr. Carnahan have to go to the floor on 
a motion to instruct conferees. And I am hoping to go to the 
floor very soon when the D.C. voting rights bill gets through, 
but if I could ask if either of you have any questions before 
you have to leave so I can proceed with this panel, finish with 
this panel, go on to the next, and hope you will be able to 
return.
    Mr. Diaz-Balart. Mr. Carnahan.
    Thank you very much. Let me ask just a couple more 
questions. What is the state of the Federal Building Fund, Mr. 
Peck?
    Mr. Peck. If by that you mean this year how much do we 
anticipate coming----
    Ms. Norton. Well, actually I don't expect you to have off 
the top of your head what I want to know. What I want to know 
is this: How much was in the Federal Building Fund over the 
past 5 years? And I am trying to figure out how much trouble we 
are in as we lease more and more space, which means ad abnitio 
it doesn't go into the Federal Building Fund.
    Mr. Peck. I will provide you with--we have some pretty good 
charts on that. I can tell you that the disturbing news is that 
at the rate we are going, and this is based on our guesses 
about rental rates in the coming years, that we anticipate that 
somewhere around 2015 or 2016 the Federal Building Fund will no 
longer be profitable. And as you know----
    Ms. Norton. What does it mean by profitable?
    Mr. Peck. Well, we charge rent so have revenues and then we 
have expenses, a large chunk of which are payments to lessors 
for rent. We have building expenses, and the difference between 
our revenues and expenses is in essence, because we can't 
borrow our capital, the capital funds we have, to make 
significant repairs to Federal buildings and keep them up and 
in some cases build new buildings. Because we are leasing so 
much more and we do anticipate that rent rates are coming down 
some, it looks like somewhere around 6 years from now we will 
just be maintaining. We won't be in deficit, but--we will bring 
in enough revenue to meet our lease obligations and our 
operating expenses and minor repairs, but not capital 
expenditures.
    Ms. Norton. On straight out leasing we are doing more and 
more of that, so we are hastening the moment you just described 
where your expenses outgrow your obligations--your obligations 
outgrow any growth in the fund.
    Mr. Costa testified before us in July or he testified 
concerning a meeting in July between the Real Property Council 
and the OMB to discuss 412 authority. And that authority would 
of course allow us to do some construction of Federal space for 
Federal use.
    Given the urgency that you have just described for the 
Federal Building Fund, I must ask you, what was the outcome of 
that July meeting and what is the status of your request to use 
412 authority, which this Congress gave, I think under 110th 
Congress, gave to GSA and where Mr. Costa testified you hadn't 
even asked the OMB to help you use that authority the last time 
he was here.
    What is the status of 412 authority and of your discussions 
to use it, especially in light of your testimony that the 
Federal Building Fund is going defunct?
    Mr. Peck. We have--I have had--in the time I have been at 
GSA, I have already had a conversation with OMB about the 
possibility of using 412 authority just generically, and we 
have rehashed some of the issues which have arisen before 
because you know I asked for something similar when I was here 
in the Clinton administration, and we do have one major project 
coming up on which we are going to ask the Office of Management 
and Budget for the permission to use the--at least for their go 
ahead, which we need in various ways to go ahead with the 
project. I have to tell you I don't know a lot about that.
    Ms. Norton. What is that project?
    Mr. Peck. It is a project in Denver, and I have to tell 
you, I don't--I am not allowed to know too much about it, 
because my former firm worked on the feasibility studies. So I 
am recused from talking about it. I just know that the----
    Ms. Norton. What made the Agency believe that that would be 
a good 412 authority?
    Mr. Peck. I am not quite sure. Again, I don't know.
    Ms. Norton. You know--let me try again. Let me make sure I 
get who gives permission in the United States of America. The 
permission was granted by the Congress of the United States for 
the GSA to use 412 authority. And now you say you have to got 
permission from the OMB. Who gave them permission, once we have 
given permission for you to proceed? Who gave them permission 
to get in between us and an agency we have told to use 412 
authority?
    Mr. Peck. Well, I think you know the procedure under the 
OMB----
    Ms. Norton. And the procedure for the Agency is to say I 
have in my hot little hands something that this Committee has 
not only now put in law, but which I am going to be called 
account for at every hearing that they have, and what do you 
want me to say? If the Agency doesn't press back, there is not 
going to be any change in the status quo. That is the GSA I 
have known ever since I have been in Congress.
    Mr. Peck. Well, that is not the GSA when I am there. But I 
can tell you that I have argued strenuously for the authority. 
But as you know, before we can submit testimony or other 
proposals to the Congress, they have to go through an OMB 
review. And I probably shouldn't say more than that, but----
    Ms. Norton. This isn't testimony. Testimony has to do with 
agency policy. This is a policy of the Congress of the United 
States, and therefore I am asking you how any agency, OMB 
included, can countermand what Federal law has said do in light 
of the urgency with the Federal Building Fund. You are making 
us lease over and over again. You are making us bleed other 
agencies because you don't use authority that we demanded that 
you use at least a few years ago.
    Mr. Peck. Well, Madam Chair, I think part of it is the way 
that the legislative language is written, again as you noted, 
authorizes us to use the authority, but doesn't direct us to 
use the authority.
    Ms. Norton. Oh, would you like to be directed, because that 
is what you are going to get?
    Mr. Peck. I would get in trouble if I suggested that.
    Ms. Norton. You need not answer, you need not give an 
incriminating answer. But you ought to tell OMB that we know 
how to operate when an agency doesn't do what we urgently 
believe must be done. We didn't think this would be a nice 
thing to do, after all it would be good to see that happen. We 
see an untenable situation that you have just described: 2012, 
hey, no Federal Building Fund and all that we have now done 
goes down the drain because you get a huge rise in 
deteriorating buildings again, all because the OMB for some--
and tell us the reason that you think that the OMB has not 
moved besides the fact that you never asked them to move at 
least since you have been here this time. Why would they oppose 
this?
    Mr. Peck. Well, you know, Madam Chair, if I knew--well, I 
could give you their reasons for opposing. They have existed 
for a long time. They are concerned about abuse of what is 
essentially public-private financing. They believe that federal 
financing, that since the Federal government finances at a 
lower rate than the private sector, that by definition anything 
that you finance with the private sector is going to be more 
costly. They believe that this might encourage agencies to buy 
properties or put up buildings that are not necessary. I could 
give you their reasons, but I would be giving somebody else's 
argument, not my own. I can tell you that there is new 
management at OMB, we have talked to them initially about some 
potential and, as I suggested, we are thinking that if we go to 
them with specific projects perhaps we will get a different 
outcome.
    I should also note we have also made the point that some 
other agencies have similar authorities and have used them.
    Ms. Norton. Yeah, we have seen the problem over and over 
again. We have done the calculations of the cost of money and 
the use of the 412 authority. We know for sure that today we 
could drive the cost of capital debt down to benefit the 
taxpayers. And you are, I have drawn this to the attention of 
the administration in my own report to them or my own 
transition memo to them, that they are caged in a budgeting 
notion of real estate. Real estate is finance, it ain't budget. 
And thus we have some people from the 19th century in there 
that are budget examiners that are wasting the taxpayers' 
money. I hope to be able to break through that with this 
administration, in part by getting some people in the OMB who 
understand real estate and how it is financed and how much 
money we are wasting, not only with respect to 412 authority, 
nonuse of 412 authority, but generally with respect to real 
estate.
    But I have to tell you, particularly since you have also 
been in the private sector, you have got to help the 
Subcommittee as well. We have got an administration that I 
think would understand what we are talking about, particularly 
since we are prepared to provide. And I know you are in an even 
better position to provide evidence of savings to the Federal 
Government through use of 412 authority, and this 
administration, given the circumstances that have forced it 
into raising sky high deficit, needs to be leveraging every 
authority it can to drive down the deficit. What you are doing 
now drives it up.
    Mr. Peck. Well, I certainly agree with you and I hope that 
we can work together to make a change in this.
    Ms. Norton. I thank you for that. Let me ask one final 
question based on again the testimony of the Agency at prior 
stimulus hearings, and indeed our tracking hearings in May. The 
Subcommittee indicated its concern about trained personnel. Mr. 
Carnahan asked about trained personnel in doing some of the 
work. We were talking about threshold trained personnel that 
was necessary to get the work on board and done. GSA witnesses 
at the time mentioned that they were beginning to hire 
annuitants temporarily in order to have trained people who 
could get this done and out into the streets. This agency had 
been so bled by the last administration you didn't exactly have 
a lot of people to bring from the region or elsewhere.
    Have you used annuitants? We were shocked to see that we 
had to virtually order the process to actually use annuitants. 
Have you used them? What has been the progress? How many are on 
board? How many are helping you in the effort now underway with 
stimulus funding? How many contracting officers, for example?
    Mr. Peck. We have--hold on a second. I have actually just 
seen those numbers and I would like to provide them for the 
record, but the short answer is that we have hired a number of 
retired annuitants. I believe we have hired either--we have had 
extensive discussions on this. We have hired either 9 or 11 
retired annuitants who are contracting officers, who are 
warranted contracting officers. And this is total number of----
    Ms. Norton. How about program managers?
    Mr. Peck. Program managers, we have hired so far related to 
the Recovery Act program 80 Full-Time-Equivalent employees.
    Ms. Norton. These would be annuitants, retired annuitants?
    Mr. Peck. Not just--we have hired 9, that number was in my 
head. We have hired 9 retired annuitants who are in one 
function or another, but I believe most of them are retired 
contracting officers, because we needed them back because you 
have to have a warranted contracting officer to issue 
contracts. We have hired 28 permanent employees, 23 of whom are 
contracting officers, and 52 temporary or term employees. And 
the retired annuitants all come in that latter category of 
temporary of term employees. But again I believe that most of 
them are contracting officers, retired contracting officers.
    Ms. Norton. Well, we leave it to the agency the best way 
you can find trained personnel who can quickly do the work. The 
only reason we had fastened on annuitants is they had done it 
before. So I am pleased to see that you have been able to hire 
temporary employees. You have enough to keep on track and on 
record? You see the Chairman takes names, too.
    Mr. Peck. Right. You know what we have done to make the 
Recovery Act projects move is we have moved a lot of our--and 
the reason there hasn't been more hiring, I was wondering why 
we hadn't hired more people, is we have moved a lot of our 
experienced people into the Recovery Act projects because we 
needed people on board on those projects. It was a big workload 
that we hadn't anticipated before. So we moved mostly 
experienced people into the Recovery Act program, and in some 
cases our hiring is backfilling for the regular program, 
which----
    Ms. Norton. Wait a minute. For the Recovery Act, I mean, I 
thought these annuitants were for the Recovery Act.
    Mr. Peck. The annuitants are on the Recovery Act program.
    Ms. Norton. The temporary employees, what are they on?
    Mr. Peck. Most of the temporary employees are also Recovery 
Act program because it is a temporary program.
    Ms. Norton. But you just said you had moved----
    Mr. Peck. We have moved some permanent employees into the 
Recovery Act program as well, and so you don't see them in our 
new hiring figures. You don't see the kind of new hiring that 
some of us--that I think you may have heard as a projection 6 
months ago. We have been able to move permanent employees in 
there and backfill a smaller number of people in some of the 
regular programs. We have also put on board some retired 
annuitants and other temporary employees to work on the 
Recovery Act.
    Ms. Norton. Well, thank you, Mr. Peck, and thank you, Mr. 
Fernandez and Mr. Kendall, for very important testimony as we 
track the progress of the three agencies.
    Ms. Norton. We will ask the next witnesses to come forward. 
They are John O'Keefe--and we will just go in this order--John 
P. O'Keefe, Clark Construction, Division President of Public 
Division; and then we will go to Kenneth Grunley, President of 
Grunley Construction Company; then to Kathleen McKirchy, 
Director of the Community Services Agency of Metropolitan Labor 
Council.
    At this hearing we now want to hear from private sector 
parties, who are equally responsible for carrying out the terms 
of stimulus funding. This will be our final panel.
    Mr. O'Keefe.

   TESTIMONY OF JOHN P. O'KEEFE, DIVISION PRESIDENT, PUBLIC 
 DIVISION, CLARK CONSTRUCTION GROUP, LLC; KENNETH M. GRUNLEY, 
    PRESIDENT, GRUNLEY CONSTRUCTION COMPANY, INC.; KATHLEEN 
  McKIRCHY, DIRECTOR, COMMUNITY SERVICES AGENCY, METROPOLITAN 
 WASHINGTON COUNCIL, AFL-CIO, ACCOMPANIED BY CAMILLE CORMIER, 
 DIRECTOR, LOCAL PROGRAMS AND POLICY, WIDER OPPORTUNITIES FOR 
WOMEN; AND LARRY GOLD, DIRECTOR OF COMMUNITY SERVICES, COVENANT 
                            HOUSE DC

    Mr. O'Keefe. Chairwoman Norton, Members of the 
Subcommittee, my name is John O'Keefe. I am the division 
president for the public division in the Mid-Atlantic region 
for Clark Construction Group, LLC. Founded in 1906, Clark 
Construction Group is one of the Nation's most experienced and 
respected providers of construction services, with over $4.5 
billion in annual revenue, with major projects throughout the 
United States. We perform a full range of construction 
services, from small interior renovations to some of the most 
visible architectural landmarks in our country. Projects we are 
known for in the Washington area include the Verizon Center, 
the U.S. Department of Transportation headquarters, and the 
Largo Metrorail station.
    Here in the Washington area, our home, Clark is committed 
to working with the community with demonstrated success in 
creating opportunities for small businesses. Also, last year we 
testified before the Subcommittee on Federal Workforce, Postal 
Service, and the District of Columbia on our program to hire 
ex-offenders. This successful program has provided well-paying 
jobs with benefits and training opportunities to ex-offenders 
for the past 8 years.
    Today I am pleased to respond to the Subcommittee request 
that Clark address the use of stimulus funds provided by the 
American Recovery and Reinvestment Act of 2009. To date we have 
been awarded four projects which include ARRA funding. Three of 
these projects are in the National Capital area. The first is 
the Air National Guard Readiness Center-Area D, located at the 
Andrews Air Force Base; the emergency repairs for the 
settlement at the Jefferson Memorial Seawall; and the 
construction of the new U.S. Coast Guard headquarters building 
at the St. Elizabeth's campus.
    The Air National Guard Readiness Center-Area D at Andrews 
Air Force Base was awarded on July 30th of this year, and 
allowed for additional work to continue under an existing IDIQ 
contract. While completing needed improvements, this project 
has and will continue to allow for 6 Clark employees and about 
25 construction workers to remain on the job daily over the 
entire 10- to 11-month duration of the project.
    Emergency repairs for the settlement at the Jefferson 
Memorial Seawall was just awarded on September 11th. We expect 
work to begin next month, and that project will be completed in 
about 14 months. This effort should employ about 40 people at 
its peak in 6 to 7 months from now. These will be new 
construction jobs as a direct result of the ARRA-funded 
project.
    The largest of our stimulus-funded projects here in the 
Nation's Capital is the U.S. Coast Guard headquarters at St. 
Elizabeth's. We continue to support GSA and the National 
Capital Planning Commission's efforts to ensure that all issues 
related to this historic property and project are addressed and 
that construction work can begin as expediently as possible.
    In the meantime, we are proceeding with our design work, 
and have received excavation bids and are reviewing them to 
select that subcontractor. Once work begins, which we expect to 
occur right after the new year, about 50 new jobs will be 
created on site in the first month. In addition, hundreds of 
dump truck operators will also be employed to move 
approximately 1.3 million cubic yards of rock and earth. By 
month 2, about 100 individuals will be employed directly on the 
site. The number of jobs created rapidly increases as the 
project continues, peaking at about 1,000 direct construction 
workers on site sometime during the second year of this 3-year-
long construction project.
    It should be noted that we can only project direct jobs the 
Coast Guard headquarters will add to the economy. I am not an 
economist, and I cannot tell you how many additional jobs might 
be saved or created due to the manufacturing, assembling, 
packaging, shipping of concrete, steel, wire, piping, and other 
building materials that are made here in the U.S. that will be 
shipped to this job. However, the number must be much, much 
larger than the estimated 1,500 direct construction jobs 
created at the site.
    Stimulus or not, construction jobs help fuel the American 
economy, creating good-paying jobs and creating demand for 
American goods and services.
    On behalf of Clark Construction Group, I want to thank you 
for the opportunity to testify today, and I will be happy to 
answer any questions you may have.
    Ms. Norton. Thank you very much, Mr. O'Keefe.
    Mr. Grunley, Grunley Construction Company.
    Mr. Grunley. Good afternoon, Madam Chair Norton and the 
Members. It is a pleasure and an honor to be here today.
    My name is Kenneth Grunley, president and owner of Grunley 
Construction Company. Grunley is a local family-owned general 
contractor that for over 50 years has specialized in 
renovations, restorations, and modernizations of large 
government and commercial buildings. Some of these projects 
include the main Treasury building, the Eisenhower Executive 
Office Building, National Archives Museum. And you were talking 
about the Old Post Office; I renovated that when I was a young 
man in the late 1970s.
    Over the past 20 years, Grunley, due to its local 
reputation, has grown along with a strong national economy. 
There was just a few pauses in the early 1990s and early 2000s, 
but we grew from 30 employees to 300 employees during that 20-
year period.
    In the fall of 2008, we witnessed a slowdown in procurement 
across the industry, and a doubling of competition. In 
addition, the BRAC program, the majority of that work was 
awarded in 2005 through 2007, so we have seen a slowdown in the 
BRAC procurement. During the fourth quarter of 2008 and the 
first half of 2009, I saw our backlog at Grunley Construction 
drop by one-third and our revenues slow for the first time in a 
decade. For the first time in the company history, we were 
forced to lay off loyal employees due to a lack of work. We 
reduced our staff from a high of 300 to approximately 260, and 
had made a list of an additional 50 employees that we would 
have to let go if we didn't see things improve in the later 
part of 2009.
    During the third quarter of 2009, thanks to the 
availability of stimulus funds, Grunley Construction was 
awarded nine projects. Three of these were for the General 
Services Administration, totalling $160 million. One was for 
the U.S. Department of Agriculture at their South Building, 
four for the Navy, and one for Arlington Public Schools, which 
was about an $8 million job.
    A quick rule of thumb for our type of construction, for 
renovations of significant buildings, is that it takes 
approximately 5 manyears to put in place $1 million worth of 
work. Thus, the nearly $200 million worth of stimulus work 
awarded to our firm would employ approximately 1,000 full-time 
workers for 1 year. The 1,000 full-time workers are for 
construction crews, so that excludes supervisory and 
administrative staff as well as factory workers to fabricate 
the materials and the truck drivers. In addition, this has 
allowed Grunley the opportunity to continue our robust small 
business outreach program, our apprenticeship program, and our 
recent conversation with the local carpenters' apprenticeship 
program about the preapprentice program.
    Just an observation about the industry--and we did a lot of 
GSA work, and some of those projects are out of town--there is 
still a tremendous amount of contractors chasing a very few 
projects, and the competition is fierce. The prices, I believe, 
are becoming unrealistically low. From the subcontractor 
community there really is no bottom. The subcontractors are 
willing to take jobs at whatever number they hear on the 
street, and it does caution me for the future on where we will 
end up with that.
    The stimulus program has been great for Grunley 
Construction and, I think, for a lot of our competitors. 
Obviously, our concern is when the stimulus dollars run out, 
will we see the commercial industry lead the way in the future, 
or will we possibly be just avoiding a problem until 2011?
    Thank you.
    Ms. Norton. Thank you very much, Mr. Grunley.
    Kathleen McKirchy, Executive Director, Community Services 
Agency of the Metropolitan Washington Council of AFL-CIO.
    Ms. McKirchy. Good afternoon, Chairwoman Norton, and thank 
you for inviting us to this hearing. I am here on behalf of the 
Community Services Agency, which is the nonprofit arm of the 
Metro Washington AFL-CIO, which is the area labor federation, 
with 175 local unions and about 150,000 union members in the 
area.
    I also would just like to pass on the regards of the 
president of the labor council, Josh Williams.
    I want to thank you for making dollars available to help us 
put area residents back to work and to help them reap some of 
the benefits of the Federal stimulus spending, and hopefully 
the private sector economic development which we think will 
result from some of this spending. We are very honored to have 
won a contract from the General Services Administration to 
provide preapprenticeship training and placement services to 
220 area low-income residents, which are including women, 
minorities, youth, and ex-offenders. It is very gratifying to 
us that this award was made to an entity that is connected with 
registered union apprenticeship programs, all of which are 
jointly operated labor-management programs, and they are among 
the best in the country for the level of training, completion 
rates, and continuing career development for workers.
    We also are honored to be partnering with Wider 
Opportunities for Women, who you will hear from in a moment, 
and also from Covenant House D.C., who you will hear from in a 
moment. In addition to that, we have partnerships with the 
Associated General Contractors of D.C., which represents over 
500 area construction contractors, and we have agreements with 
over 30 community-based organizations who will help us recruit 
area residents for the project and work with us on case 
management for these folks.
    Our contract was just awarded effective October 1 of this 
year, so we are just getting rolling. Our deliverables include 
providing preapprenticeship training to 180 individuals, and we 
will be including the core curriculum, which is something new 
from the Building and Construction Trades Department at the 
AFL-CIO, which includes safety and health training, CPR and 
first aid, blueprint reading, orientation to the construction 
industry, construction math, tools and materials and that sort 
of thing, in addition to job readiness training to make folks 
good candidates for employment with the area contractors.
    We will also be doing some green orientation and training 
specifically around weatherization and some of the new building 
materials that will be used in construction as everybody turns 
green. The Associated General Contractors has a green 
construction curriculum, and they have offered to work with us 
to implement that with our students.
    We are also going to be providing hands-on experience for 
the students at some of the area union construction 
apprenticeship programs. They actually work with tools. They 
work with materials. They weld. They start learning the 
different trades that are possible within this industry and 
start figuring out where they think they might want to end up. 
The classes will be divided into two groups. Those for 18- to 
24-year-olds will be run at Covenant House on Mississippi 
Avenue in Southeast. For those 25 and older, they will be held 
at Cement Masons Local 891 on Kenilworth Avenue NE.
    We will also--in addition to the 180 people that we will be 
training, we will also provide job placement and case 
management services to 32 young people who come through 
Covenant House's Artisans Program, which is a carpentry 
training program for young people.
    Our first class is scheduled to start on Monday. We expect 
to have 30 people over the age of 25 who are starting that 
class. Of that group of 30, about 85 percent of them at the 
moment are D.C. residents. And it is a 6-week training program. 
At the end of the 6 weeks, we will do heavy-duty job placement 
with these folks to ensure that they get employed. We will also 
be following them at 30, 60, and 90 days throughout the grant 
period to ensure that they retain their positions.
    We are very excited about all of the GSA activities that 
will be going on in the metro Washington area, including the 
Coast Guard, Homeland Security, and also the Federal Government 
retrofits that will be going on. We have already had 
conversations with GSA about relaxing possibly their 
restrictions with security background checks so that we can 
ensure that ex-offenders are able to get some of these jobs, 
and they indicated that they will be somewhat flexible in this 
area.
    Also I believe that Clark Construction will be providing a 
trailer, or GSA will in conjunction with Clark, at the St. E's 
campus once the Coast Guard project gets started, and this 
trailer will have training space for up to 20 people. So we 
hope to be able to use that space not only to expand our 
training, but also to recruit residents from Southeast D.C. to 
work on those projects. We have already been in touch with 
Clark Construction, and we look forward to working with them 
closely on helping get jobs for D.C. residents.
    I would like to just conclude by thanking you for the 
leadership role that you have played in helping to get these 
funds earmarked for the metro Washington area. And we, with our 
partners, are very committed to running a quality program and 
getting local residents into good construction jobs.
    Ms. Norton. Thank you, Ms. McKirchy, but actually I didn't 
get them earmarked. You and the Metropolitan Council competed 
with all 11 regions. The regions that made the first cut had to 
have the highest unemployment, and then it was a straight-out 
competitive process. And I congratulate you on winning one of 
these contracts.
    Ms. Cormier.
    Ms. Cormier. Thank you. Good afternoon, Chairwoman Norton 
and Members of the Subcommittee. I am here this afternoon 
representing Wider Opportunities for Women, or WOW, which is a 
national and local D.C. nonprofit women's organization that 
works to create pathways to lifelong economic security for 
America's women and girls.
    WOW has a long history of providing such pathways to low-
income women through activities promoting their employment in 
construction and other nontraditional occupations for women. We 
were actually one of the first organizations in the country in 
the 1970s to provide green jobs training to women through our 
program at the Blue Plains Wastewater Treatment Facility in 
Southwest Washington.
    As I speak with you today, WOW is convening the first-ever 
Green Jobs for Women Training Institute, and has brought to 
D.C. for the 2-day kick-off partners from 10 States around the 
country who engage in construction and green workforce and 
economic development for women. One of these partners in 
attendance is, in fact, the only other contract recipient 
through this GSA funding stream, Oregon Tradeswomen, Inc.
    We are also really pleased to be able to say that we have 
secured stimulus funding for women in nontraditional jobs by 
the Department of Labor to develop a green jobs guide for women 
and related on-line curriculum so that we can continue to get 
resources out to the field, practitioners, researchers, 
funders, et cetera. They can begin to focus their efforts. We 
are especially honored today to be partnering with the CSA and 
Covenant House D.C. on this new direct-training effort in DC.
    As my colleague has provided an excellent program overview, 
I will put this training effort into the larger context of 
targeting low-income, high-barrier job seekers, particularly 
women, and how best to serve them using Federal stimulus 
dollars through specific legislation and best practices.
    WOW's experience working nationally and locally to prepare 
and place women into nontraditional jobs makes clear that 
targeted dollars for their recruitment, hiring, and promotion 
is essential if they are to be on an equal playing field with 
men. Even today we see that women represent basically less than 
5 percent of workers in most building and construction sectors. 
We also know that with the targeting of funds like that in the 
original ISTEA and WANTO legislation, women do enter and 
succeed in these jobs in much greater numbers when such 
resources and incentives are in place. Most importantly about 
this is that these are the kinds of jobs where low-income women 
without postsecondary college degrees can earn enough money to 
take care of themselves and their families.
    For these reasons, WOW strongly supports your proposal, 
Congresswoman, in the current transportation bill to make the 
training of underrepresented workers mandatory. Like the 
Transportation Equity Network, WOW would urge the Committee and 
the Transportation Committee and the Subcommittee to go further 
and increase funding for the on-the-job training and support 
services line items from one-half of 1 percent to 1percent of 
funds going out to the field for highway construction, transit, 
and rail projects. We also urge you to require 30 percent of 
the workhours on large projects be reserved for low-income 
people, including ex-offenders, women, and minorities. And we 
also endorse maximizing the use of the Registered Construction 
Apprenticeship System and Community Benefit Agreements.
    In addition, we thank you and your colleagues in the House 
for the passage in June of the climate change bill and its 
Green Construction Careers Demonstration Project. We view this 
legislation, with its recruitment and hiring targets, as a 
foundation for more ambitious, yet essential mandates to 
include underrepresented workers in construction, and are 
actively working with our State partners around the country to 
help ensure passage of similar legislation, including the 
version that is pending in the Senate.
    I would just like to close by thanking you, Madam 
Chairwoman, for the leadership role you have played in securing 
these funds for the D.C. area and going forward to increase the 
employment of the area's most marginalized residents. My thanks 
also to Members of the Subcommittee, and I am happy to answer 
any questions.
    Ms. Norton. Thank you, Ms. Cormier.
    Let me ask the witnesses, I need to know how each of you 
relates to the other on the apprenticeship program. I need to 
know how Clark and Grunley are using the preapprenticeship 
program, if they are. And I need to know how Ms. McKirchy and 
Ms. Cormier relate to existing projects. We have a 
disproportionate number, for example, in this region and even 
in this city. You have described some of them. You have 22 
sites, for example, are GSA sites alone that don't even involve 
the DHS.
    Mr. O'Keefe, to what extent is an apprenticeship or 
preapprenticeship program part of what you are doing?
    Mr. O'Keefe. We do intend to integrate the activities 
specifically at the Coast Guard project with CSA. The project 
will have a number of opportunities for apprentices. And the 
large majority of our subcontractors will have registered 
apprenticeship programs.
    Ms. Norton. That is now a requirement. This started as a 
requirement in this region. The Registered Certified 
Apprenticeship Program, which we asked and negotiated with the 
GSA initially for this region, is now a nationwide requirement 
if you want to do business with the Government of the United 
States to ensure quality in the labor we bring to the table.
    Mr. O'Keefe. That is correct. And in general the Davis-
Bacon Act requires, depending upon the trade, a required number 
of apprentices. But on average, if you average it out over the 
whole job, it is basically going to mean there is going to be 
an apprenticeship position for every four journeymen on 
average. So on a job of that size, we are talking about 
hundreds of apprenticeship positions on the job site.
    Ms. Norton. Now, are you prepared--I was pleased to hear 
you say you are prepared to deal with the community services 
contract that has already been awarded. You speak of 
apprentices, and, of course, that is important to hear, but you 
recognize that this work involves preapprenticeship programs as 
well. Are you prepared to deal with preapprenticeship programs 
as well as with apprentices, already qualified apprentices?
    Mr. O'Keefe. Yes. Our intention is to work closely with GSA 
and CSA to take those--the people that graduate from the 
preapprentice program, and align them with our subcontractors 
who have openings for apprentices on the project.
    Part of the job opportunity trailer that they are talking 
about, we are teaming with GSA who has taken the lead on that, 
but we intend to have that trailer there. It is going to 
provide a way for residents and small business, local 
businesses right there in the community, to have access 
directly to the job site to understand what work is coming up, 
what are the opportunities for apprentice positions, and a 
schedule of when work is going to be happening on the job site 
and when they can participate in competing for that work.
    So the trailer is going to serve multiple functions, but 
the idea is that we integrate with CSA and try to link up those 
graduates from the preapprentice program with the 
apprenticeship needs that we have from all of our 
subcontractors at the site. And we think that that is a good 
marriage.
    Ms. Norton. That would work. That is what we will be 
tracking. That would work very well.
    Mr. Grunley, how about the work you are doing in 
preapprentice and apprenticeship programs?
    Mr. Grunley. Yes, ma'am. We are proud to be members of the 
local carpenters union since 1955, so we do employ our own 
carpenters and our own apprentices. A gentleman who works for 
me this year is the secretary of the Carpenters Training Fund--
I am sorry, Carpenters Training School, and has been in 
conversations with the--I don't know the gentleman's name, but 
the gentleman who runs the school for the carpenters. Yeah, Tom 
Barrett. And we have talked to him about setting up a 
preapprenticeship program. He told me that he has not had great 
success in the past, but I don't believe that there was any 
financing behind what they had done in the past. He shared with 
me that if he ran 10, what he has found in the past running 10 
kids through the program, that he would probably not recommend 
more than 2 of them for employment. So what I am hearing today, 
hopefully that will change.
    I was planning on doing this as kind of a pilot program at 
Grunley with the carpenters at really no expense to the 
government or GSA on any of our projects and try it myself.
    Ms. Norton. Actually, I appreciate what you are saying, Mr. 
Grunley. We had an experience here, I will say this to Ms. 
McKirchy, which frankly did not commend itself to me. The 
District constructed the Nationals Stadium, and it had a magic 
opportunity that it had every intention to fulfill. It 
recognized that working with unions you had a better chance of 
getting people moved from one job to the other job. It had 
precisely no effect, so far as I can see, because they simply 
threw the kids at the work. So far as we can tell, there were 
nothing but about grumbling about it.
    You can't say to people at Local X, Y, Z, 1,2,3, here is 
some preapprentices, never been exposed to the weeding out. 
Yes, Mr. Grunley, part of a preapprenticeship program is 
strict, is that I wouldn't want to work on any construction 
job--and let me tell you something else. The sons of those who 
worked those jobs don't want to work on them either. And I am 
sure you and Mr. O'Keefe will attest that during the period, 
the boom period of a few years ago, you would often find 
shortages of trained journeymen for the reason that journeymen 
are like everybody else; they are aging out, they are baby 
boomers, they are going to have good union retirement, and they 
are gone.
    One of the reasons that it is absolutely imperative that we 
have a preapprenticeship program is, one, that we are going to 
have those shortages again. We need it, unless you are going to 
be importing workers the way we are importing every other thing 
in this society. And, two, it is time that people who were 
traditionally excluded from the construction trades, people who 
were black and brown and female, took advantage of this 
opportunity to get a foothold into construction trades which 
specifically excluded them.
    Now you will find the construction trades are wide open. 
But if you go through the union, which often places trained 
journeymen, you can't expect the journeymen on the ground, who 
are referring people who themselves were trained through a 
measured process, to proceed with the pool that is now before 
us and to pick out people who, upon being slapped onto the job, 
simply pick up the cudgels and act as if they were apprentices. 
This happened too often at the ballpark. There was not in place 
a rigorous preapprenticeship program.
    If I can be clear, actually they told me when I went to 
Yale Law School that they no longer said this: Look to your 
left and look to your right. The person you see on either side 
will not be here next year. Before I got there--I guess that is 
how I made it--they no longer threw people out that way, used 
the process of the first year to weed people out. Well, guess 
what? Because this is work, it means you got to get up, you got 
to be with Clark and Grunley at 7 a.m. or whatever time they 
say. You got to be there in 40-degree weather, at 90-degree 
weather.
    I want people exposed to that. I want them thrown into 
that, and say, if you want it bad enough, and test it. And I 
think most people don't want it bad enough. That is why the 
sons would rather sit at a computer, where they are doing low-
level computer work, while we have to bring over people from 
Europe and India and everywhere else to do computer work at the 
level we need it. They would rather sit there and do that and 
get fat than, in fact, go out and take on that weather, take on 
that hard labor even for high union wages.
    So I don't care if, in fact, they weed out all but a couple 
for Mr. Grunley. He is going to be held to produce the highest 
level of work for the Federal Government. We do not play. We 
want these people trained, but we do not play. We deal only in 
a competitive process with the very best in the business. The 
reason we want certified apprentices is because the best in the 
business do not take chances with fly-by-night operations that 
come in and say, oh, we got some apprentices, too.
    So we know the quality we want. We know what you need to 
get it. And we know that most of the people, Ms. McKirchy, Ms. 
Cormier, who come through your program are not ready to make 
top dollar putting in this kind of hard labor in this kind of 
weather.
    So I need to ask you what is your--what is the word you 
used, Ms. McKirchy, core curriculum that you mentioned on page 
2? What is the completion rate? I am not looking for a top 
completion rate. I am looking to get some people out there like 
the ex-offenders. The reason that we have such a return to the 
ex-offenders, they have been through, excuse me, hell. They 
know this is their last chance, and so they are ready to do 
whatever it takes.
    I am the first to admit that when you have been sitting 
there playing computer games, you may not be ready. Fine. But 
we need to know we have a core curriculum and a screening 
process that will help us know who wants to do this and who 
doesn't. Don't think any of the worst of you. I am right with 
you. I can't make it. But I need not to have on my projects 
people who aren't better than I am and who are ready for this. 
And I need to know from both of you how can you assure me that 
you are going to weed out the people who they don't know either 
until they get before you that this is not for them? And I need 
to know how you will use a curriculum which helps us get to 
those who really want to do it can do it. And what is in place 
now, especially since we understand from Ms. McKirchy that her 
first class begins on Monday?
    Ms. McKirchy. First, I would say that part of the success 
is trying to assess people at the beginning about their 
aptitude and attitude about doing this kind of work. There are 
a number of tools we used in past programs. They are not 
totally foolproof, but that, combined with very serious talk 
with people before they are accepted into the program about 
what construction is and is not, helps give people a realistic 
idea of what these jobs are.
    It is a tough job to do, because I think my cohorts here 
would agree that if you take any random hundred people, maybe 
five of them would have an interest and aptitude in working in 
construction. Part of our job as a screening process is to make 
sure people are clear about what these jobs are. You have to be 
at the job at 6:00 or 7:00 in the morning. It is hot. It is 
cold. It is outside. It is inside. You know, you use the 
facilities that are there. And it is tough work, it is physical 
labor. It is hard work. But also the positive side, it is 
rewarding work. You get to see what you are doing. For people 
who have an interest in working with their hands and seeing 
their project develop in front of them, this is good work.
    Secondly, we at this point are requiring high school 
diplomas or GEDs. If people are close to getting their GEDs, we 
will help them get them. But our experience in the 3 years we 
have been doing this kind of training is that those are the 
people most likely to succeed through this process. They also 
have to be at around an eighth grade reading or math level. You 
cannot succeed on a job site if you can't read. You can't 
succeed on a job site if your math skills aren't where they 
should be. Additionally, we drug-test people.
    So that all happens before they even start the 6-week 
program. We then treat the 6-week program as a job. They have 
to be there on time. Our classes are going to be starting at 8 
a.m. They have to be there on time. They have to attend. They 
have to participate. If they are not doing that by the end of 
the first week, we will start weeding people out. But hopefully 
we will have screened people adequately so we have got folks 
that are taking this seriously and want to succeed. Our plan is 
that we will not graduate people that aren't completing the 
program and aren't succeeding in the program. And we certainly 
don't----
    Ms. Norton. And we are going to have a test right before 
you, because these people won't be going off into some job in 
the great beyond, they are going to go straight to the work 
that is going on in the District and in the region.
    Ms. McKirchy. Exactly. And we don't want--one of our 
objectives, of course, is to develop good relationships with 
the contractors. We want to send them ready-to-work people who 
are going to be successful employees. And to the extent that we 
don't send them people like that, we aren't going to have a 
successful project. So that is our intent.
    The curriculum that the Building Trades Department at the 
AFL-CIO has developed is similar to many other curricula that 
have already been put out there. They have tested it. They have 
gotten input from union contractors and from all of the 16 
building trades unions, and it is intended to be a baseline 
curriculum that meets the needs of all the trades. It provides 
the basic information that people need to be able to be 
successful apprentices on a construction site: the basic 
background in math as it relates to construction, blueprint 
reading, OSHA 10 certification, CPR, first aid, tool ID and 
use, actual exposure to some job sites, exposure to the various 
trades and how to get into the various apprenticeship schools. 
And that is what the curriculum is intended to do.
    Ms. Norton. Ms. Cormier, the same question for you.
    Ms. Cormier. Sure, thanks.
    Out of that 5 out of 100 who have the aptitude to be 
construction workers, 1 of them is a woman, and one-half of her 
is going to want to do it. So we certainly have our work cut 
out for us. The gender-focused components of this new program 
in partnership with CSA and Covenant House are halfway through 
the 6 weeks, the women who are obviously going to be making it 
will get paired with individual mentors, not just support 
groups, although that will be important, too.
    Ms. Norton. Individual what?
    Ms. Cormier. Mentors. Experienced local tradeswomen who 
want an individual relationship with our graduates as they are 
getting ready to graduate and will go out there and will follow 
them for at least a period of a year after graduation.
    We do currently run support groups from past construction 
training programs. We certainly intend to ramp that up, 
especially with the new program. At least quarterly, if not 
more often than that, we want to do support groups for the 
women.
    The case management that we will be focusing on really----
    Ms. Norton. By the way, Ms. McKirchy, are there similar 
support groups for many of these youngsters who will come out 
of circumstances where they have not been mentored even by 
fathers, much less others in their communities who have been 
journeymen? Do you have any support group----
    Ms. McKirchy. Yes. I guess I might ask Larry Gold, who is 
the community service director from Covenant House, who deals 
with the 18- to 24-year-old population, to also pipe up about 
what they have been doing.
    Ms. Norton. Ms. Cormier, we will get back to you in a 
moment.
    Mr. Gold, will you identify yourself, please?
    Mr. Gold. My name is Larry Gold. I direct community 
services at Covenant House Washington. I know that you are 
familiar with Covenant House and the wraparound services that 
we provide to the young people who come through our programs.
    I have actually been at Covenant House for over 7 years, 
mostly with the Artisans Program, which is a vocational 
training program in woodworking. I think that for us, a large 
part of the work that we have done is experiential learning 
with our youth, where they actually have the opportunity in a 
worklike setting to learn the kinds of values and skills that 
they are going to need.
    Ms. Norton. I want to know about the notion of Ms. Cormier 
says, and this is very important for the women, you know, most 
of them have never seen a woman on a construction job unless 
you take a microscope, so that the notion of having a woman who 
has been on the job as a journeyman or an apprentice, that can 
have an effect like nothing I can think of. I am asking, 
understanding that many of the youngsters from disadvantaged 
neighborhoods, and that is who you are getting. Today most of 
our kids--here you can get $10,000 if you live in the District 
of Columbia, because of a bill I have, to go to any public 
university in the United States. You get $2,500 straight out. 
All you got to do is get in it.
    So who are you getting? You are getting, as Ms. McKirchy 
says, people who have high school or are on their way to 
getting GED.
    Now, the youngsters from Covenant House will often be 
youngsters who have grown up in households with only women in 
communities where the men have not been trained to do 
construction work, where there is a great deal of crime. So 
they, like Ms. Cormier's women, have never been faced with a 
man who has been a journeyman, who has been on a job. Is it 
possible to encourage these youngsters so that there are some 
journeymen somewhere with whom on at least a periodic basis 
this kid could work or this young person, as is likely to be 
the case, could work so that he could see success is possible 
where this brother who also just had a high school education 
and is now making $20 an hour?
    I am trying my best to break through what I see is a 
formidable barrier to people even believing that they are ever 
going to get to making the high union wage that journeymen, in 
fact, are able to take home. So I am asking you, if you don't 
have it, whether you could explore for the youngsters who come 
out of disadvantaged homes, the male youngsters, getting them 
somebody who makes them believe that they can do this work 
because they see someone--and they are all over the place. 
There are, for example, African American and Latino journeymen 
who will be hired on these jobs.
    Mr. Gold. I can only say that, again, with my experience at 
the Artisans Program, we had a volunteer who was there for over 
3 years who had spent 20 years--an African American who had 
come up from the South and worked extremely hard to become a 
carpenter at the White House and the State Department. And he 
provided a mentorship opportunity. And----
    Ms. Norton. That is the kind of thing I am talking about, 
somebody who is kind of like them and has succeeded. Because 
they go out in the street, they don't see many people like 
them, which is one of the reasons we were able to get extra 
money for stimulus funding for preapprentice and apprenticeship 
programs.
    Continue, Ms. Cormier.
    Ms. Cormier. Yes. So in addition to being paired with an 
experienced tradeswoman as a mentor, and attending at least 
quarterly support group meetings, the case management that we 
will be doing on this project and have done to date is really 
focused on the issues that a woman will experience and quite 
often a single head of household will experience around making 
sure that the barriers are cleared for you with transportation; 
you have got a realistic, failsafe child care plan. If you need 
more of our help perhaps than a guy enrolled in the program to 
get that learners permit and/or that driver's license, because 
it is kind of out of the ken of your experience, then our case 
managers are there to help smooth those transitions out so that 
the women can be adequately supported so that then they can go 
on and do their thing and be responsible and have a good 
training effort, and they get placed somewhere and be able to 
stay in that job.
    And our follow-up support for any of the graduates with 
this program will be up to a year. So we will be following them 
as well. And, of course, with our folks here on the panel with 
us, we will have some very immediate feedback on how some of 
our graduates are doing. But we certainly intend a follow-up 
piece after they are placed on the job to ensure their job 
retention.
    Ms. Norton. I appreciate this testimony. This is not my 
father's generation of the Great Depression where, you know, 
anything that enabled you to live. These are people who don't 
understand why life hasn't been given to them as it was given 
to others immediately before them. And, frankly, we have given 
them to understand that, and we have got to give them the 
support that is necessary so that they understand that nothing 
gets accomplished without hard work.
    Mr. Grunley, you indicated that subcontractors--I think you 
were indicating there might be some concern about the quality 
of subcontractors, because you said that people are so hungry 
for work, to use subcontractors as an example, that you can get 
subcontractors for very low bids. Would you elaborate on that?
    Mr. Grunley. If I could just go back to the preapprentice 
for one item real quickly?
    Ms. Norton. The what?
    Mr. Grunley. Preapprentice program for 1 second.
    I heard you talking about training ex-legal offenders. And 
my only concern with that is under HSPD-12, I don't believe 
they will get onto Federal construction projects. That is 
something they are going to look at very carefully.
    Ms. Norton. Ms. McKirchy?
    Ms. McKirchy. We have had some conversations with some of 
the contracting people at GSA, and they have indicated that 
they are prepared to be somewhat flexible, and to look at case-
by-case basis for placing people----
    Ms. Norton. Federal law does not keep a contractor from 
looking on a case-by-case basis. For example, you will find 
people who have had offenses as juveniles. It is pretty hard to 
find some kid who grew up in the inner city who hasn't had some 
kind of something for which some white kid wouldn't even have 
come into court, and GSA knows how to tell the difference. And 
therefore, I ask you to look closely at anyone that has gone 
through their screening, because it will take a whole lot to 
get through their screening and get to the point where such a 
preapprentice is being held out for an apprenticeship program. 
I accept your notion that that indeed is the way in which 
Federal work is handled according to the nature of the site. 
But let me ask you about subcontracts and what you are finding, 
given how hungry people are to get subs, to be subs.
    Mr. Grunley. The local subcontracting community, most of 
them are family-run businesses that spent years building up a 
workforce and who is faced with enormous pressure to lay off 
these workers for a lack of work. I get calls regularly from 
our subs, don't you have anything to bid? We will take anything 
you have. And there appears to be no bottom price for the 
subcontracting community. When we take bids on bid day, we try 
to award to the low responsive bidder on bid day. And in the 
past, once we are awarded a job, people will call us, you know, 
what do we need to do to get the job? And we say, oh, we 
awarded it yesterday.
    What we are finding now is that it doesn't matter--you 
could tell them any number, and they said, oh, if you had 
called me back, I would beat that number. The numbers are 
getting driven down dramatically. I am seeing projects for GSA 
that I think are coming in 30 percent below the budgets. I know 
that has occurred at the Corps of Engineers also. And there is 
going to be a price to pay at the end.
    We used to get about one letter a quarter from some law 
firm looking for money for one of our subcontractors. We 
haven't changed the way we do business, and I say we get one a 
week now. So there is such an enormous pressure on the 
subcontracting community, their prices. They don't know how to 
keep their employees, so they are cutting their prices in the 
hope of a turnaround. I think if the stimulus funds----
    Ms. Norton. I can understand what you are saying. I wonder 
if Mr. O'Keefe is finding the same, and how you, therefore, 
given the fact everybody--you want to go that low; let me go 
lower is the response. How do you know, therefore, who is the 
quality subcontractor to take? Mr. O'Keefe?
    Mr. O'Keefe. First of all, I can certainly confirm what Mr. 
Grunley has just said. We are seeing the same things. We 
suspect that in some cases, in many cases, subcontractors are 
bidding numbers below their cost in an effort to keep their 
company alive and to keep their core employees employed. We 
have certainly seen, and as evidenced by the national 
construction unemployment rate; I think it is near 17 percent 
unemployment in the construction industry on a national basis. 
To a large extent that is the result of a much significantly 
reduced private sector of construction, which, you know, it has 
been a big part of the local construction market here, and it 
has shrunk significantly. So what you have is the same number 
of subcontractors and contractors now competing for much less 
work.
    What happens--because similar to Grunley, Clark, most of 
our work, I think, is competitively bid--we compete for the 
work. So what happens on bid day, as these numbers are coming 
in, you really have to evaluate whether you think that the 
subcontractors can perform that work, because if you just 
cobble together all the low numbers, and you put that in there, 
you are at risk, because once we put that number in, we are 
committed to that number. Okay. Whether they----
    Ms. Norton. And you and Mr. Grunley, because of your 
expertise, will have a sense of what the costs to the sub is.
    Mr. O'Keefe. Yes. Yes. But you also have to look at what 
your competitors are doing, because Mr. Grunley is going to use 
some of these numbers. So, you know, you can't just say, well, 
they can't do it, so I can't take that number. If you do that, 
we will not be low, and we will not get the work.
    So it is a fine line we are walking between trying to 
select the right subcontractors at what we think are the right 
numbers, but being right on the edge there to be competitive, 
to be able to be low to obtain the work.
    Ms. Norton. Let me ask you, Mr. O'Keefe, and indeed we are 
submitting a question because I meant to ask it of Mr. Peck, 
you know, we clap with one hand when we hear that a building 
built from the ground up by the Federal Government is only a 
LEED building, not a gold building or a platinum building. What 
would it take to make the new Coast Guard headquarters building 
a gold building or a platinum building?
    Mr. O'Keefe. First of all, the first level is a certified 
building--I guess they are going with the next level, certified 
silver, which the U.S. Coast Guard is a silver.
    Ms. Norton. Silver is what they are building.
    Mr. O'Keefe. That is correct. That is correct. And then 
there is gold and platinum.
    We have constructed all levels of LEED certification 
buildings, and I guess the bulk of that work has to be done in 
the design phase. Okay. Very little of it has to do with how it 
is being built; it is how it is being designed.
    Ms. Norton. But that goes to cost, doesn't it?
    Mr. O'Keefe. Yes, it does. Yes, it does. The higher the 
level you go, the more stringent are the requirements for 
energy efficiency.
    Ms. Norton. So why would anybody building in 2009 for a 
headquarters--because the headquarters is going to be there for 
eternity, we are not building another headquarters for 
anybody--why would anybody want to build without getting the 
maximum in energy savings for the taxpayers by investing some 
more in the design in order to guarantee less in energy costs 
to the taxpayers down the line?
    Mr. O'Keefe. To answer that question directly, there is a 
trade-off of, first, cost versus the long-term sustainability 
and the costs for the long term.
    Ms. Norton. But that could mean that let us say 20 years 
from now we are going in there trying to add something that 
will bring down the cost of HVAC or heat or what.
    Mr. O'Keefe. Yeah, it is very difficult to come back after 
the fact and make adjustments without a whole-scale redesign of 
systems.
    Ms. Norton. So if we don't do it now, we are just going to 
be paying for whatever is the cost of energy wherever it goes.
    Mr. O'Keefe. Yeah. I would like to make one note here. 
Although we are obligated for the silver certification, we are, 
in fact, attempting to get the gold certification for that 
project.
    Ms. Norton. Tell me how are you able to do that. What are 
the differences?
    Mr. O'Keefe. Okay. This is a design-build procurement. So 
we have control over the design and the construction of the 
project, and through that control, we are able to work on these 
elements, the mechanical systems, the water use systems, and so 
on. And we have made a commitment in house to ourselves that we 
are going to attempt to get gold on this. GSA has been working 
with us on this, and this is something we would like to try to 
do. The current design and the current program is calling for 
silver, but we are going to try to one up that.
    Ms. Norton. Oh, that is amazing to hear that the contractor 
can himself perhaps improve on the aspiration of the agency, 
and I would encourage you to do so. I can't tell you what it 
would mean to the Federal Government and what we would be able 
to do in the future. We believe that even in my time on the 
Committee when we began to look at energy savings, water 
savings, where it was more difficult to calculate in dollars 
and cents, it isn't difficult anymore. You can calculate in 
dollars and cents. Even the average homeowner can do that 
today. And there is no question that this can be done.
    So for us not to maximize this once-in-a-lifetime 
opportunity--we are never going back, we are never going to 
improve on it--for us not to maximize on it--now, if more needs 
to be done, GSA needs to talk to me, because I am certainly 
willing to talk to the appropriators as we go through this 
prospect. The President himself is engaged now in investments 
that have no pay-out while he is President of the United 
States. All of this energy conservation that he is doing 
doesn't have a dime's worth of difference to him in terms of 
anything he is going to be able to show.
    So I know that we are able to advocate for platinum when we 
are building the largest construction in the United States of 
America today and the largest in the history of the Federal 
Government. We know that, for example, platinum has to do in 
part with things that the contractor and, for that matter, GSA 
has done the best it can on this proximity to Metro. And this 
does have proximity, but it is not down the street the way many 
of our buildings are, which at least--let me ask you what else 
goes into platinum, for goodness sakes, Mr. O'Keefe? Can you 
think of anything, you or Mr. Grunley? I am trying to find out 
what platinum is so I will know whether I am just going for 
nothing or whether there is really something in platinum, some 
real difference.
    Mr. O'Keefe. I will speak to that first. I don't know all 
of the specifics, although that is something that--they 
actually have scorecards that tally up points on certain things 
that you have to achieve in order to get a certain rating, 
either a gold or a platinum or a silver. And those are all 
centered around use of local materials, building techniques, 
and the design of the energy systems in any facility, such as 
water usage. For example, if you can put in low-flow toilets 
and have a rainwater collection cistern system that reuses that 
rainwater, those are the sorts of things that you can 
incorporate into a project to reach these higher levels of 
certification.
    Ms. Norton. What we are going to do, I am going to ask 
staff to get from GSA or the comparable--or the expert 
organizations what the real difference is. For example, staff 
says, you know, a bike rack will get you that. That is almost a 
no-cost something. Runoff may cost a little more, but it may be 
well worth it, given the fact that water savings is part of 
what we are talking about, too.
    So I am interested in finding out, particularly given your 
testimony that you are going to try to at least get the gold, 
to find out what it is that can be done.
    Do you, Mr. Grunley, do you, Mr. O'Keefe, have a small 
business plan connected with the work you are doing in the 
stimulus funding for the Federal Government?
    Mr. Grunley. All of our Federal projects have a small 
business plan, whether they are in the stimulus package or not.
    Ms. Norton. Could I ask you and Mr. O'Keefe to get within 
30 days to this Subcommittee a copy of your respective small 
business plans? Could I ask you to get to me as well within 30 
days the number of apprentices you have hired and the number 
you intend to hire as you foresee at the moment?
    Mr. Grunley. You would like those apprentices for both our 
own workforce as well as the subcontractors on the project?
    Ms. Norton. I would. I would.
    Ms. Norton. And I am pleased that you heard my discussion, 
because I am certainly going to give you credit. I want to see 
that GSA gives you credit. And I am going to find out whether 
we can change this for at least construction, whatever are the 
reasons for other kinds of subcontracting work.
    I would also like from each of you, Mr. Grunley and Mr. 
O'Keefe, a list of the projects you are undertaking throughout 
the United States that utilize stimulus funds.
    Ms. Norton. I want to thank all of these witnesses. You 
have very much enriched our record. You saw from the appearance 
of the Chairman himself that we are down to the really itsy-
nitsy gritty here.
    I want to say to all of you, jobs could not be more 
important here. If we end up getting a lot built and a lot 
rehabilitated, and we are not able to show a large number of 
jobs for it, we will all be held accountable. So bear in mind 
for all the other questions we have asked, we want real people 
employed on the job. We want you to reach out to the existing 
community.
    And particularly you, Mr. O'Keefe, are, for example, 
building for the first time in the history of the United States 
on the other side the Anacostia in the lowest-income community 
in the District of Columbia. Imagine how you are going to be 
watched like no contractor has ever been watched before in a 
period such as this, and not only by me, but especially by the 
community. From all I understand from the GSA personnel who 
have been working with you, we have no dissatisfaction with 
what is happening now. But do understand that as we put 
questions before you, we feel it incumbent upon ourselves to do 
so because of the large difference between ourselves and other 
Committees, because this money is under our direct supervision, 
and not under the supervision of the States, and because this 
is the largest amount of money at one time to do work quickly 
that GSA has had, and we have got to be accountable for it.
    Thank you very much for very important testimony today, and 
this hearing is adjourned.
    [Whereupon, at 5:03 p.m., the Committee was adjourned.]

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