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


 
                      BUILDING OUR WAY OUT OF THE
                         RECESSION: GSA'S 2011
            CONSTRUCTION, MODERNIZATION, AND LEASING PROGRAM

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

                               (111-121)

                                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

                             SECOND SESSION

                               __________

                             June 17, 2010

                               __________

                       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           BRETT GUTHRIE, Kentucky
CHRISTOPHER P. CARNEY, Pennsylvania  ANH ``JOSEPH'' CAO, Louisiana
JOHN J. HALL, New York               AARON SCHOCK, Illinois
STEVE KAGEN, Wisconsin               PETE OLSON, Texas
STEVE COHEN, Tennessee               TOM GRAVES, Georgia
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
MICHAEL E. McMAHON, New York
THOMAS S. P. PERRIELLO, Virginia
DINA TITUS, Nevada
HARRY TEAGUE, New Mexico
JOHN GARAMENDI, California
HANK JOHNSON, Georgia

                                  (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
RUSS CARNAHAN, Missouri              SHELLEY MOORE CAPITO, West 
TIMOTHY J. WALZ, Minnesota           Virginia
MICHAEL A. ARCURI, New York          MARY FALLIN, Oklahoma
CHRISTOPHER P. CARNEY,               BRETT GUTHRIE, Kentucky
Pennsylvania, Vice Chair             ANH ``JOSEPH'' CAO, Louisiana
DONNA F. EDWARDS, Maryland           VACANCY
THOMAS S. P. PERRIELLO, Virginia
HANK JOHNSON, Georgia
JAMES L. OBERSTAR, Minnesota
  (Ex Officio)

                                 (iii)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    vi

                               TESTIMONY

Foley, David, Deputy Commissioner, Public Buildings Service, U.S. 
  General Services Administration................................    39

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Norton, Eleanor Holmes, of the District of Columbia..............    64

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Foley, David.....................................................    68

SUBMISSIONS FOR THE RECORD

Edwards, Hon. Donna F., a Representative in Congress from the 
  State of Maryland, ``GSA Leasing in the Greater Washington 
  Metropolitan Region, a report by the National Center for Smart 
  Growth Research and Education and the Master's of Real Estate 
  Development Program at the University of Maryland''............     8
Foley, David, Deputy Commissioner, Public Buildings Service, U.S. 
  General Services Administration:...............................
      Response to request for information from Hon. Norton, a 
        Representative in Congress from the District of Columbia:
          Questions for the Record...............................    74
          Regarding P.V. McNamara FBI Annex......................    59
          Supplemental Information...............................    83

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    BUILDING OUR WAY OUT OF THE RECESSION: GSA'S 2011 CONSTRUCTION, 
                   MODERNIZATION AND LEASING PROGRAM

                              ----------                              


                        Thursday, June 17, 2010

                  House of Representatives,
      Subcommittee on Economic Development, Public 
                Buildings and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The Subcommittee met, pursuant to call, at 10:13 a.m., in 
room 2167, Rayburn House Office Building, Hon. Eleanor Holmes 
Norton [chairman of the Subcommittee] presiding.
    Ms. Norton. I apologize for the delay. The hearing is open. 
The Ranking Member will be here shortly but has indicated that 
he has no objection to our proceeding.
    I want to welcome all to today's hearing entitled Building 
Our Way Out of the Recession: GSA's 2011 Construction, 
Modernization and Leasing Program, an examination of the 
General Service Administration's Capital Investment and Leasing 
Program for fiscal year 2011 with its prospectus requests.
    Last year, we noted that the fiscal year 2010 request was 
limited in size and in scope, reflecting the unprecedented 
infusion of funds for construction in the American Recovery and 
Reinvestment Act, or ARRA, sometimes called stimulus 
legislation. The fiscal year 2011 request reflects a more 
robust and comprehensive approach to managing the real estate 
portfolio of GSA.
    GSA's Capital Investment and Leasing Program, as well as 
its ARRA funds, enable GSA to manage the general purpose real 
estate needs of the Federal Government. ARRA funding serves the 
additional and important purpose of putting Americans back to 
work. We have held regular hearings to ensure that GSA 
obligates ARRA funds as quickly as possible. Unlike other 
stimulus programs, GSA is no pass-through but is solely 
responsible for executing the contracts expeditiously and 
getting America back to work soon.
    As of May 14, 2010, GSA indicated it had obligated over 
$4.1 billion to more than 500 companies and outlaid over $367 
million of ARRA funding. While obligating approximately 80 
percent of its ARRA funding is impressive, the Subcommittee is 
mindful that U.S. unemployment hovers just below 10 percent and 
the mandate to make haste so that businesses can hire new and 
retain current employees is still in order.
    ARRA has clearly helped stimulate an economic recovery, but 
the economy, it found, was shattered, so full economic recovery 
will require more coaxing to stimulate a more balanced economy 
with sensible regulations to prevent another collapse.
    The GSA Capital Investment and Leasing Program provides 
another opportunity to support our ongoing recovery. The 
largest amount in the request is $1.4 billion for construction, 
repair, and alteration of projects.
    The fiscal year 2010 prospectus requests are categorized 
into four main groups: repair and alteration projects, design 
and site acquisition projects, construction and building 
acquisition projects, and leases. I am going to submit for the 
record what those projects are, because there is a long list of 
them, and go on to the meat of my comments.
    Ms. Norton. We must alert GSA again that the Subcommittee 
will hold GSA accountable for carrying out the provisions of 
all prospectuses authorized by Congress, particularly in light 
of the budget deficit and the requirements of PAYGO spending. 
GSA must not only work collaboratively with the private sector 
in reducing the costs of leasing and construction, GSA also 
must be far more vigorous and vigilant in using the role 
assigned to the agency by Congress to be the government's 
realtor, not merely an adviser to Federal agencies. Today, this 
means indicating to agencies what is affordable and cutting 
costs across the board, both vocation and transaction costs.
    In the past, developers and Members of Congress have 
reported to the Subcommittee tactics used in solicitations that 
steer competitors away from the full and open competition 
mandated by statute. In one instance, the GSA listed amenities 
sought by an agency that included places of worship, a hardware 
store, and a hair saloon. Despite a requirement in the 
prospectus that changes be reported to the Subcommittee, we 
learned of these changes only from a long letter, complete with 
documentation, from a developer who sought to compete.
    GSA had violated the language of the prospectus that 
required changes to the prospectus to be reported to Congress 
by calling its changes ``amendments,'' as if amendments do not 
change a prospectus. The prospectus was delayed because the 
offending amendment to the solicitation had to be withdrawn.
    Reports of this kind require this Subcommittee to be 
vigilant with close oversight, even after the prospectus is 
approved. We intend to write the prospectuses accordingly and 
to make changes in law as part of our reauthorization of 
provisions of GSA's statute itself. This Subcommittee will not 
tolerate the use of pretextual grounds to evade full 
competition or to direct lease procurements to pre-selected 
areas of a region.
    We are pleased, however, that there is genuine opportunity 
for savings in the leasing program. We intend to press GSA to 
continue to become more aggressive and efficient in using its 
market position to identify cost savings when leasing from the 
private sector. With a portfolio that contains 197 million 
square feet of lease space, the potential for savings is 
outstanding.
    This Subcommittee expects GSA to get the best possible deal 
for the Federal Government when identifying local office space 
for Federal agencies by using appropriately delineated areas 
and writing procurements that carry out congressional intent as 
expressed in the prospectus. GSA must refine its procedures to 
provide the maximum benefit to the taxpayer by holding down 
costs far more than the agency has done in the past.
    The fiscal year 2011 capital program request, coming in the 
wake of the more than $5 billion in projects authorized and 
appropriated through ARRA, would suggest that GSA still 
continues to need significant capital resources to maintain its 
inventory of owned properties and to expand that inconvenient 
through new building.
    The largest amount in this package is for continued 
construction of the DHS headquarters in Ward 8 of the District 
of Columbia. The co-location of the principal headquarters of 
DHS on the federally owned St. Elizabeths campus not only 
expands the portfolio of federally owned real estate but also 
creates great value for the taxpayer by avoiding some of the 
highest commercial leasing costs in the country here in this 
region.
    The funds for the DHS headquarters is for the construction 
of 4.5 million gross square feet of general purpose space, 
exclusive of parking. This is an appreciable amount of 
construction, but GSA has estimated that it will result in 
savings of over $500 million on a 30-year present-value basis 
in terms of the avoidance of leasing space.
    Moreover, ownership of office space in the District also 
benefits GSA's Federal Building Fund importantly. Because by 
charging commercial equivalent rate to the tenant agencies, GSA 
will be able to earn higher rents in higher-cost regions, 
thereby bolstering the Federal Building Fund.
    We also note, as with last year's proposal to purchase 
Columbia Plaza, GSA is proposing to purchase another leased 
building, this one in Martinsburg, West Virginia. Without 
commenting on the merits of this specific case because we have 
not yet had time to examine it, we welcome as a general 
principle opportunities for GSA to increase its portfolio of 
owned properties on favorable economic terms through the 
unilateral right to exercise a fixed-price purchase option on a 
leased building. We are particularly interested in knowing how 
GSA can expand the frequency of such purchases.
    Finally, we welcome GSA's input as we take up through new 
legislation the challenges of rebuilding the exhausted Federal 
Building Fund and of rebuilding the Public Buildings Service 
itself, which has been effectively divested of meaningful 
regulatory authority over agencies for space utilization and 
efficient space management.
    President Obama's June 10th, 2010, memorandum on efficient 
management of real estate underscores the need for GSA as the 
central space management agency of the government to step up to 
a leadership role, not merely as a trusted advisor, in this 
area requiring very great expertise, where only GSA has the 
expertise and the agencies lack it altogether.
    We look forward to addressing these issues and to hearing 
the testimony of today's witness.
    I am very pleased to welcome comments from the Ranking 
Member.
    Mr. Diaz-Balart. Thank you very much, Madam Chairwoman. 
Thank you for having this very important hearing.
    I want to thank the witness for being here. I want to make 
sure that you understand we are not shooting the messenger, but 
you are the messenger, OK?
    So, with that caveat, obviously, the GSA's fiscal year 
program requests approval for seven alteration and 
modernization projections, three design projects, five 
construction and acquisition projects, and five leases.
    Now, Madam Chairwoman, I know this is not going to surprise 
you. I am frankly just shocked--and, again, you and I tend to 
speak with one voice on a lot of these issues. I am, frankly, 
just shocked by the tremendous--I can't say this 
diplomatically, I guess--waste of taxpayer dollars and the 
gross mismanagement of the Federal Building Fund that this list 
of projects represents.
    This Subcommittee under the leadership of our chairwoman 
has had numerous hearings, hearing after hearing, about how 
courthouses have been overbuilt and the cost of leasing as 
opposed to ownership that is bankrupting the Federal Building 
Fund. And I have to again take this opportunity to once again 
comment on and commend our chairwoman for her leadership on 
those issues, and she has not been shy about these issues. So 
we know that that is bankrupting the Federal Building Fund, and 
yet the administration proposes a quarter billion dollars to 
renovate a half-empty courthouse and half a billion dollars to 
lease an agency headquarters.
    Sometimes, Madam Chairwoman, I think you and I maybe are 
speaking in a vacuum. Is nobody there listening? I am very 
concerned about some of these projects, and I simply don't 
understand how GSA can realistically expect for Congress to 
approve them; and, gosh, I hope Congress doesn't approve them.
    For example, GSA proposed spending--I am going to use one 
example, but it could have been Miami. It could have been a 
number of different places. But just for example, GSA proposed 
spending $288 million--I want to repeat that--$288 million to 
renovate the 600,000 square foot Prettyman Courthouse.
    Now, you will recall from our recent hearings that GAO 
singled out this specific courthouse complex as one of the most 
overbuilt and over budget in the entire country. Furthermore, 
in 2000, the courts projected there would be 49 judges in both 
the Prettyman building and its annex, but today there are only 
33 judges. About 400 people, just 400 people, work in that 
building, which means--again, it doesn't take rocket science--
which means there is about 1,500 gross square feet of building 
space for each employee.
    Now, frankly, many families live in smaller areas than 
that. I think that bears repeating. About 400 people, which 
means that there are about 1,500 gross square feet of building 
space for each Federal employee in that building. I don't have 
a word to describe that, I just don't, because saying it is 
immoral and unacceptable just doesn't seem strong enough.
    What is even more astonishing is the renovation of this 
courthouse is a priority project now on GSA's 5-year capital 
plan. Did the GSA not look at the reports? Did the GSA not 
spend time with us to understand? Did GSA not look at these 
numbers? I mean, how the administration can justify spending so 
much money on a half-empty building that will not generate any 
extra revenue for the Federal Building Fund that is again 
almost going bankrupt is inconceivable.
    So while GSA wants to pour even more money into an 
overbuilt courthouse, GSA is proposing a new 427,000 square 
foot lease for the Federal Trade Commission headquarters, 
further damaging the bankruptcy issue that I already mentioned 
and going against everything that we have been talking about, 
particularly this chairwoman has been fighting for and working 
on, and that, frankly, the taxpayers demand.
    So in hearing after hearing, Members of this Committee have 
repeatedly expressed concern about the overuse of expensive 
leases to meet Federal space needs, again especially when we 
are dealing with headquarters space. And again we have seen 
this in study after study that GAO has warned us about the cost 
of leasing to meet long-term space needs, but here GSA 
continues the same practice.
    But, again, GSA now proposes doubling FTC's lease space, 
doubling FTC's lease space. I am surprised the chairwoman 
hasn't just exploded right now from seeing this, knowing of her 
concern for the taxpayer on that issue alone.
    So, instead of consolidating the FTC headquarters into one 
government-owned location, FTC would operate in at least two 
separate locations. That really makes a lot of sense. In 
addition, this proposal would move some operations out of 
government-owned space into leased space. Again, what planet 
are we living on here?
    So, on the one hand, GSA is proposing constant leases for 
FTC headquarters; and, on the other hand, it wants to spend 
nearly $300 million to renovate a building that is, frankly, 
mostly empty, that is barely being used.
    Out of the thousands of buildings in the Federal inventory 
on the space needs identified for the FTC, the fact that the 
renovation of the Prettyman building would be at the top of 
GSA's list just raises incredible questions about GSA's 
management of the Federal Building Fund.
    Again, what planet are they living on? And I am not 
referring to you, and I want to make that very clear. But I am, 
frankly, just in shock. What is it? It is taxpayers' money so 
it doesn't matter? So it really doesn't matter? We can just 
irresponsibly spend it and blow it and continue to spend it and 
blow it? Even though we have reports, report after report after 
report expressing this, showing this, proving this, and yet we 
get from GSA more of the same and frankly even worse?
    So I am very concerned about how GSA is prioritizing its 
projects and whether some of them make any sense at all and 
whether there is any concern for the taxpayer when we look at 
these proposals.
    So I want to thank David Foley, the Deputy Commissioner--he 
is a good man--the Deputy Commissioner of the Public Buildings 
Service, for being here today; and I look forward to hearing 
from him on these important issues. But, again, I will mention 
it three times, you are a good man, you are a decent man, you 
work hard, but this proposal from GSA frankly is grossly 
irresponsible.
    Thank you, Madam Chairwoman.
    Ms. Norton. I very much thank you for those remarks. 
Indeed, I will follow up during the question period, because I 
am absolutely in accord with what the Ranking Member has said. 
As he said, there just is no daylight between us, especially 
when it comes to costs that cannot be justified.
    I want to indicate my deep concern at how late this leasing 
program has even come to the Congress, but I will put that 
aside until I hear from the other Members of the Committee.
    I want to ask Mr. Michaud of Maine if he has any comments.
    Mr. Michaud. First of all, I want to thank you, Madam 
Chairman, Mr. Ranking Member, for having this very important 
hearing on how we are going to build our way out of the 
recession. I think GSA definitely can have a role in helping, 
especially when you look at the high areas of unemployment, 
particularly in the construction area. I, too, have some 
concerns that were addressed earlier by both the Chairand 
Ranking Member.
    I look forward to hearing your testimony this morning, and 
I will save the rest of my remarks, Madam Chair, as well as my 
questions, after Mr. Foley has a chance to give his testimony 
today. I look forward to working with you.
    With that, I yield back the balance of my time.
    Ms. Norton. Thank you, Mr. Michaud.
    The gentlelady from Maryland, Ms. Edwards.
    Ms. Edwards. Thank you, Madam Chairwoman; and, to my 
colleagues, I think this is a really important hearing. I 
actually can't think of a better topic or more important one 
than that. Because while we have not officially approved what 
GSA is doing for 2010 because many of us on this Subcommittee 
have raised significant questions with some of GSA's leasing 
policies, I do think it is essential that our committee, our 
Subcommittee, with its oversight authority, begin to look very 
critically at GSA's construction and leasing program going 
forward.
    Now, just a couple of weeks ago, Mr. Morris was here from 
GSA and was unable to answer any number of the questions that I 
put forward about how GSA proceeds with its leases, what is the 
process, what is the transparency of the process. I had hoped 
to hear today from Mr. Peck, but, Mr. Foley, I thank you for 
being here, and I trust that you will be poised to answer some 
of these questions today as well, because I intend to repeat 
them. I know that we have submitted questions to you, and I am 
looking forward to getting actual answers back.
    As you know, I represent the Fourth Congressional District 
in Maryland, which comprises both Prince George's and 
Montgomery Counties in Maryland. We are located right here 
outside of Washington, D.C., in the capital region.
    Unfortunately, these counties, as documented by GSA, the 
University of Maryland, and other independent studies, 
including a study from information given to GSA that was just 
in the Washington Post a couple of weeks ago, these counties 
receive far less consideration for prime Federal leases than 
any other jurisdictions in the metropolitan area.
    Prince George's County in particular receives the fewest 
higher-class lease space compared to any other jurisdiction in 
the region when it comes to GSA property leasing. I raised this 
issue at the last hearing.
    A couple of years ago, as I said, the University of 
Maryland study showed that 10.1 percent of GSA's leases are 
within Prince George's County's borders. Moreover, the leases 
represent only 7.6 percent of the square feet leased by GSA in 
the metropolitan region and only 4.1 percent of the total rent. 
Even more striking is the fact that only 3.9 percent of the 
office space leased by GSA is in Prince George's County. The 
study from the University of Maryland goes on to say, 
``However, in Prince George's County, warehouses make up 49.4 
percent of GSA leases.''
    Again, this is from information also supplied by the GSA 
even just a couple of weeks ago as appeared in the paper. I 
would like to see that submitted to us for our record from GSA, 
but I was happy to read it in the Washington Post.
    [The information follows:]

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    Ms. Edwards. I spent the last couple of years in office 
trying to understand why these disparities are present. The 
county has more Metro stops than any other county in the 
region, arguing for the consideration that others in this 
Committee have raised that if you have Metro stops and it is a 
priority to get people on and around transit and consolidating 
leases, why is it then that there is a lack of leasing in this 
region, or even building, in the areas where that is 
appropriate?
    Every time a new lease opportunity comes up, GSA has some 
reason unknown at the beginning to not lease in Prince George's 
County or reason to release a prospectus in such a way that 
seems to favor other jurisdictions. And indeed in some of those 
instances it is not even clear what the process is for changing 
the prospectus on simple things, lowering ceiling heights, 
which seems so ridiculous that you could make a mistake like 
that twice in two separate leases and then explain it away as a 
typographical error when it has been done by two separate teams 
and included in two separate proposals for a prospectus. I 
don't understand. If we have got that kind of inefficiency 
going on in GSA, then we have a bigger problem than we think.
    I would say also, as I close here, that these questions are 
really not unique to the Washington, D.C., metropolitan area. I 
think that these are considerations for a number of 
metropolitan areas where there has to be both transparency and 
fairness of process, treating an entire region as a region.
    When we do transportation funding and policy and any number 
of other policies, we look at regions. There are a dozen major 
metropolitan and regions around this country. If we have that 
kind of disparity within a region, then it creates the kind of 
inequity that we see in this leasing program. So I would like 
some explanations about process, about how costs are determined 
within the region, and about how changes are made so it is 
transparent to the public and to those of us on this committee.
    Then, lastly, Mr. Foley, I think it is really imperative 
that GSA understands that its customer is not an agency, its 
customer is not a bureaucrat. The customer for GSA, who ought 
to get the benefit of the best bargain, is the taxpayer, and if 
your process in leasing or building doesn't benefit the 
taxpayer, then GSA is not doing its job.
    With that, I yield back.
    Ms. Norton. I thank the gentlelady for yielding back, and I 
thank her for her comments. I join her in those comments.
    Mr. Foley, would you like to say for the record where those 
who are supposed to be here are and why they are not here?
    Mr. Foley. Certainly. I am speaking on behalf of the agency 
and for Commissioner Peck. He is actually at a meeting at the 
White House complex today regarding the Presidential memo that 
you mentioned earlier in GSA's leadership role with the Federal 
Real Property Council and the 23 landholding agencies. He had 
to go to that meeting and is chairing that as well. We provide 
direction to the agencies and are developing the path forward 
to implement that memorandum.
    Ms. Norton. We will regard this as an excused absence.
    Mr. Foley, you may proceed.

STATEMENT OF DAVID FOLEY, DEPUTY COMMISSIONER, PUBLIC BUILDINGS 
         SERVICE, U.S. GENERAL SERVICES ADMINISTRATION

    Mr. Foley. Thank you.
    Good morning, Madam Chair, Ranking Member Diaz-Balart, and 
Members of the Subcommittee. Thank you for inviting me here 
today to discuss GSA's fiscal year 2011 Capital Investment and 
Leasing Program. I am pleased to be here today to request the 
Subcommittee's authorization for the projects in our capital 
program.
    The Public Buildings Service is one of the largest and most 
diversified public real estate organizations in the world. Our 
mission is to provide a superior workplace for Federal agencies 
at an economical cost to the American taxpayer.
    We continue to demonstrate strong operational performance, 
surpassing many private sector benchmarks. We are also becoming 
a green proving ground for new and innovative technologies and 
sustainability methods. These efforts enable PBS to reduce the 
Federal Government's carbon footprint and optimize energy 
savings.
    The projects in the fiscal year 2011 program were selected 
based upon a number of criteria, including the urgency of the 
requirement, priorities of the tenant agency, physical 
condition of the asset, high-performance green building 
features, timing and execution, improving asset utilization, 
return on investment and payback, avoidance of lease costs, and 
historical significance.
    PBS is requesting a repairs and alterations program of $703 
million to enable GSA to maintain and improve these properties 
so that they continue to meet the mission needs of our customer 
agencies. Each of these projects has a continuing Federal need 
and is capable of being economically self-sufficient.
    Through the Recovery Act, funding for repairs and 
alterations enabled us to reduce our repair and alterations 
need, but clearly there continues to be a great additional 
need, and this is one of our top priorities.
    The highlights of GSA's fiscal year 2011 repair and 
alterations program include $335 million for basic repairs and 
alterations, $321 million for full scope and major repairs and 
alterations, $120 million for fire prevention programs, $20 
million for energy and water retrofit and conservation 
measures, and $7 million for wellness and fitness programs.
    The program includes the following proposed major building 
modernizations: $66 million for the Major General Emmett Bean 
Federal Center in Indianapolis, Indiana; $11 million for the 
James C. Corman Federal Building in Van Nuys, California; $28 
million for the Daniel Patrick Moynihan U.S. Courthouse in New 
York; and $114 million for the Frank Hagel Federal Building in 
Richmond, California.
    These funds also provide designs for the following 
buildings: $6 million for the West Wing at the White House 
complex for phase two construction; $51 million for the FBI 
Federal Building in Los Angeles, California; $22 million for 
the Edward J. Schwartz U.S. Courthouse and Federal Building in 
San Diego, California and support of an ICE co-location 
project; and $23 million for the E. Barrett Prettyman U.S. 
Courthouse in Washington, DC.
    The fiscal year 2011 capital program includes funding to 
improve PBS's buildings with additional greening technologies 
and repairs and alterations to increase energy savings. These 
improvements will help GSA meet the goals set forth in the 
Energy Independence and Security Act of 2007 and Executive 
Order 13514. To meet these goals, PBS is requesting $20 million 
for the implementation of energy and water retrofit 
conservation projects and another $20 million for the fire 
prevention program. PBS is also dedicating in support of the 
administration's new health and wellness initiatives $7 million 
to our wellness and fitness program to upgrade, replace, and 
improve space within government-owned buildings in support of 
employee wellness.
    We are also requesting a construction and acquisition of 
facilities program of $676 million. This request includes 
funding for site acquisition, design, infrastructure, 
construction, and the management and inspection of 10 Federal 
facilities. PBS traditionally pursues construction and 
ownership solutions for special purpose and unique facilities 
that are not readily available in the real estate market. In 
addition, we recommend new construction where there is a long-
term need in a given locality.
    PBS's fiscal year '11 construction program is focused on 
urgent customer priorities ranging from the consolidation of 
government-critical defense organizations, laboratories for 
protecting the public health, and land ports of entry to secure 
our borders.
    The program includes $380 million for the St. Elizabeths 
DHS consolidation, West Campus Infrastructure, Historic 
Preservation Mitigation and Highway Interchange in Washington, 
D.C.; $174 million for the FDA consolidation at White Oak in 
Maryland; $8 million for the Denver Federal Center remediation; 
$86 million for the design and/or construction of two land 
ports of entry in Calexico, California, and Calais, Maine; $4 
million for the design of an automotive maintenance and secured 
parking garage at the P.V. McNamara Federal Building in 
Detroit; and $25 million for the acquisition of the IRS Annex 
Building in Martinsburg, West Virginia.
    In addition to owned space, GSA has entered into almost 
9,000 private sector leases in 8,000 locations nationwide to 
meet the space requirements of tenant agencies. We are pleased 
that the vacant space within our leased inventory has been at 
or below 1.5 percent for the last 5 years, well below national 
industry averages of over 15 percent.
    We strive to keep leasing costs at or below market levels 
and have developed a comprehensive strategy to do so, including 
the use of industry benchmarks and market surveys to comparison 
shop for best value for the agencies that occupy our space and 
the taxpayers.
    In addition to the fiscal year 2011 leasing program, PBS is 
also seeking authorization for the balance of our fiscal year 
2010 program. PBS continues to work with agencies to help them 
shape their requirements to meet mission needs while improving 
operational efficiencies and space utilization to minimize 
costs for the American taxpayer. We also work with our 
stakeholders to capitalize the requirements of our aging 
inventory and growing and increasingly specialized needs of our 
customers.
    Finally, PBS strives to reduce our asset liability by 
concentrating reinvestment in core assets and disposing of 
unneeded and underutilized properties.
    Madam Chair, Ranking Member Diaz-Balart, this concludes my 
prepared statement. I will be pleased to answer any question 
you or any other Member of the Subcommittee may have about our 
proposed fiscal year 2011 Capital Investment and Leasing 
Program. Thank you.
    Ms. Norton. Thank you very much, Mr. Foley.
    The prospectus, upon inspection, is probably going to be 
further delayed in approval because so many questions are 
raised by what the prospectus proposes.
    First let me indicate that surely you are aware that, by 
law, authorizations of this committee, and for that matter of 
the Senate Environmental and Public Works Committee, are to 
precede appropriations for GSA's projects. What is the reason 
we are receiving this package, I don't know, about 4 months 
after the President's budget? This is worse than tardiness. It 
is disrespect for the committee.
    Mr. Foley. Madam Chair, I do have to apologize for the 
lateness of the program getting to you and the committee. We 
did have some issues with final clearance of the prospectus 
package, and we are striving to ensure that that doesn't 
happen.
    Ms. Norton. Final clearance in your agency?
    Mr. Foley. Through both the administration and the agency. 
We are working on a new process so that that does not happen 
next year, and our goal is to get it up immediately following 
the President's budget for fiscal year 2012. We recognize that 
this puts you in a bind, and we strive----
    Ms. Norton. It puts you in a bind, because we are not going 
to rubber-stamp any prospectus, and we are not going to 
authorize it, and we are going to ask the Appropriations 
Committee to delay it. So we are not in a bind, but you 
certainly are in a bind, and you will have to make haste to in 
fact respond to the questions that have been raised by this 
tardy submission.
    For example, 2 weeks ago, we requested information on what 
the Ranking Member raised about the Prettyman Courthouse. That 
is a courthouse that has a relatively new--it must be within 
the last 5 or 10 years--a beautiful new annex. But it is one of 
the courthouses that was cited for being overbuilt. I am lost 
to understand why, given--what is it--an $8 billion backlog of 
courthouses to be built, I am astonished that you want to 
rehabilitate a courthouse that is underutilized as a priority. 
Explain yourself.
    Mr. Foley. Certainly. We do understand that there were a 
number of questions, and again I apologize for the delay----
    Ms. Norton. You can answer them right now.
    Mr. Foley. I fully intend to answer.
    This project does go back a number of years. In fact, the 
design for the Bryant Annex to the Prettyman Courthouse was 
done in 1997, long before any of the courtroom sharing models 
adopted by the Administrative Office of the Courts and GSA. At 
the time the Annex was designed, GSA and the courts attempted 
to build to the full capacity of the site.
    GSA and the courts, we both recognized, and I think in the 
hearing last week, that there were issues with projections and 
the number of judges. We are working closely together to 
address that moving forward. In fact, Commissioner Peck is 
actually going to be meeting with the Court Space and 
Facilities Committee tomorrow to discuss this very issue.
    However, that doesn't diminish the need for this critical 
project. This is a busy court facility with a number of high-
profile cases. The project is mainly a building systems 
project. It is not designed to build out additional courtrooms. 
This is an historic asset that the government will hold onto 
for decades; and the majority of the construction dollars are 
for exterior construction, plumbing and mechanical, fire 
protection, electrical, and abatement.
    Ms. Norton. Mr. Foley, you could run that down for dozens 
of courthouses in the United States that have had no recent 
additions the way the courthouse here has. I hope you don't 
think that the fact it is here makes a dime's worth of 
difference to me. We will need answers other than ``it is 
needed,'' particularly since it is on the hit list in the first 
place as an overbuilt courthouse.
    Is it being fully utilized?
    Mr. Foley. I believe that there are underutilized 
courtrooms in the facility. However, I think it is important to 
point out that there are only nine courtrooms in the annex 
which was recently completed. The majority of the courtrooms 
are actually in the old facility. I believe there are----
    Ms. Norton. There are some courtrooms in the Annex, and 
there are some in the old facility. Is anybody being pushed out 
into the street, Mr. Foley?
    Mr. Foley. I don't believe at this time.
    Ms. Norton. Is any sharing of courtrooms going on in the 
Prettyman Courthouse?
    Mr. Foley. I believe there actually is some sharing going 
on, in part as we move folks around in preparation for the 
modernization of this facility.
    Ms. Norton. Well, you know, they better stay put. Because, 
as it stands now, we are not requesting to approve the 
Prettyman Courthouse.
    You have to get those answers to us. And you know what? We 
need those answers before the hearing. Because if you think 
getting answers after a hearing means we say, OK, it is OK--
what was disturbing is to hear you tell us when the courthouse 
was approved in 1997. Duh? So once you approve it, what you are 
telling me is GSA never looks at it again, but it just keeps on 
going.
    It seems to me a review was in order here before pushing up 
to the top a high-profile courthouse that happens to be in the 
Nation's capital. I don't know why we ought to be more open to 
this courthouse than others. If you came forward with a 
comparison between its needs and the needs of others, perhaps 
we could understand. But the Federal Government looks foolish 
if it in fact proceeds now to modernize a courthouse that it 
has just given an addition to without any indication of the 
need compared with other courthouses in the United States.
    We are not going to do it. The burden is on you. Right now, 
the burden hasn't been met. The Prettyman Courthouse is not in 
your prospectus, unless you can show us that that courthouse 
needs renovation more than any other courthouse in the United 
States that is not on the list. If that is not the rule, then 
the President's memorandum isn't worth the paper it is written 
on.
    Now, we can't ignore the President's memorandum, and I wish 
you wouldn't. I regard this as nothing less than ignoring what 
the President has already said, much less what he is going to 
tell Mr. Peck at the White House today.
    Now, the Ranking Member and I have spoken of our concern 
about the increasing reliance on leasing. I know, for one, and 
I am sure the Ranking Member does as well, that we can't go 
around buying buildings. We don't have the capital. We didn't 
have it before the collapse of the economy.
    But I am very concerned that you are not--and we see that 
you bought a building last year. You are buying a building this 
year. We are very pleased to see you are proceeding in that 
way. I don't see the capital for going around doing what we 
ought to do. Therefore, we have to look for other ways to see 
if we can purchase.
    Now, one way does not involve purchasing, but it very much 
involves your lease procurements and the way you do them. Now, 
you do them through best-practice transactions, that makes a 
lot of sense normally, best-practice procurements in which you 
evaluate technical factors along with price in awarding a 
decision. So we don't want to say there is anything inherently 
wrong with best value.
    But given that lease procurements are highly prescriptive 
in terms of establishing minimum requirements for many, many 
technical matters, the present GSA practice of making price 
significantly subordinate to technical factors is of huge 
concern to this Committee in this climate. Why should price 
now--or, for that matter, even before, but particularly now--be 
subordinate to technical factors which are already prescribed 
in the prospectus?
    Mr. Foley. Madam Chair, I should note the majority of our 
procurements are done through lowest-cost, technically 
acceptable. So it has to meet the minimum criteria, but we do 
use low-cost procurement. We do use more complicated source 
selection criteria to evaluate technical criteria for many of 
our larger procurements.
    Ms. Norton. It is the larger procurements that I am worried 
about. That is where we spend the money, Mr. Foley.
    Mr. Foley. Agreed. Those criteria typically have to do with 
factors such as space configuration, proximity to public 
transportation, which was mentioned previously, energy 
efficiency, past performance of the landlord, project team 
qualifications.
    Ms. Norton. All those things are already a matter of law. 
They are already prescribed.
    Mr. Foley. So I think those are all critical criteria in 
addition to price for consideration.
    As far as location decisions, they are made in accordance 
with the customer's mission, requirements, and established 
location policies.
    Obviously, one of the things from the executive order on 
sustainability is the emphasis on transit-oriented, sustainable 
development. So that is a critical consideration for us through 
where we locate facilities.
    I agree with you that we have an excellent opportunity in 
the current real estate market to take advantage of many of the 
lower prices we are seeing at this point in time. We are 
working extremely closely with our tenant agencies to look at 
both their requirements, what is available in the existing 
marketplace, and provide expertise and guidance as far as how 
they might be able to utilize their space.
    Ms. Norton. Let me ask you about that, Mr. Foley. Just give 
me a straight answer. Why should price ever be significantly 
less important as a factor? Should it ever be significantly 
less important than technical factors?
    Mr. Foley. I think the critical piece for us is making sure 
that we deliver a workplace that will satisfy the tenant 
agency's mission requirement. So if you have a proposal where 
it is not----
    Ms. Norton. Just a moment, Mr. Foley. You have just walked 
into the lion's den. Because that is precisely what the problem 
with procurements has been. Instead of understanding who you 
are responsible to, you have said more than once during your 
responses that you are responsible to the agency.
    Now, I don't know what we are going to have to do to blow 
you out of that mandate that you apparently feel you have, but 
it is so serious that we are designing law that will make you 
understand that you are subordinate to the committees and 
through them to the taxpayers.
    You are being manipulated in every conceivable way. In my 
own opening statement, I offered an example of that which was 
shocking. It happened to have been from Prince George's County, 
and the manipulation of a prospectus in violation of the 
prospectus was so serious you had to withdraw it. And now you 
are here by rote telling me that price can be significantly 
less important if the agency in fact needs that change. That is 
why you are not in Prince George's County. That is why you are 
not even in NoMa here in the District of Columbia within a 
stone's throw from the Senate, because you pay attention to 
agencies who obviously have every reason to manipulate.
    If you came to me and you said, Eleanor, what kind of house 
do you want and you don't have to pay for it, I could regale 
you with technical matters, as you indicate, that I would want, 
because price would not be a concern.
    I must therefore ask you, who makes the decision in a given 
procurement that price should be below certain technical 
factors? Who makes that decision?
    Mr. Foley. GSA is the leasing agency for the government, so 
ultimately GSA.
    Ms. Norton. Who within GSA? How is that done? What is the 
process?
    For example, is there any written guidance promulgated by 
the central office of GSA to leasing officers and others to 
know, so that you don't have--and that is where we are going 
next. If you want a GAO report to tell us differences among 
your agencies or your regions, that is what you are going to 
get. Because what we detect just from what we can see here are 
determinations in price that we cannot justify.
    So I am asking you, who in GSA? What is the process? Is it 
uniform region to region? Who gets to make these nice decisions 
on which is more important, price or technical matters?
    Mr. Foley. First, I would like to respond to a couple of 
things. GSA, we are expanding our leasing in NoMa. In fact, as 
an agency, we will be relocating a portion of our headquarters 
into NoMa. So we have seen a significant increase----
    Ms. Norton. Of course, that does not answer my question. 
The fact is--because you are only telling us what the 
Subcommittee has done. It is not GSA that broke open the NoMa 
matter. It is the Subcommittee. And do you know how we broke it 
open? Don't take any credit for what we did. We put in the 
prospectus that you had to come back to the Subcommittee before 
deciding to lease on K Street rather than in NoMa on 
Massachusetts Avenue. Now you are taking credit for that. That 
happened because we required it to happen.
    And still you violated the prospectus when it came to 
Prince George's County, because you ignored that mandate and 
did not come back to us to tell us that the agency involved 
wanted changes, such as hair saloons and places of worship. So, 
yes, you are absolutely right. NoMa got broken open, and we are 
going to break open the rest of this as well.
    But you are not answering my question, and it is not good 
form when my question is one thing to go to another.
    Now, my question is--and you realize the significance of my 
question by the priority I have put on understanding best 
value. I want to know--and I will say it again--who in GSA 
makes the decision on best value? Are there written guidelines 
so that there are not one set of best-value decisions made in 
one region and another made in another region? That is what my 
question is. That is what I want to know, not about NoMa, which 
is what this Subcommittee did, not what you did at all.
    Mr. Foley. Yes, Madam Chair. We have had inconsistency from 
region to region. However, we are going through a major 
reinvention of our leasing program at this point in time. We 
are working to provide consistent guidance to all of our 
regions so that they do their procurements in a similar 
fashion, whether it is consistency amongst the solicitations 
all the way through the process.
    As far as who directly decides in the procurement process, 
it is the contracting officer and the project team that work 
together in terms of developing the source selection criteria.
    Ms. Norton. As I understand it, you are promulgating such 
guidance?
    Mr. Foley. Yes.
    Ms. Norton. So you recognize there may be differences 
without guidelines. You can't expect bureaucrats out there to 
proceed if they don't have guidance from central headquarters.
    Mr. Foley, we are going to require now that before we 
receive a prospectus you must come to the staff so that we can 
beforehand look at evaluations on price alongside technical 
factors. We do this because the President himself is requiring 
large changes, some of which are going to come out of our 
budget, and could and should, and we perceive that this loose 
using of technical factors is basically a way for agencies 
essentially to design their headquarters through leasing as 
they see fit.
    We do not say that that is your intention. We do say that 
we believe unless you can show us this is not the case that 
that is the result.
    I have other questions for you, but I am going to go now to 
the Ranking Member.
    Mr. Diaz-Balart. Madam Chairwoman, if I may, and again as I 
mentioned before, Mr. Foley is a good man, he is trying to do 
the best job he can and trying to answer these questions.
    I really don't have questions or comments for him. I really 
want to kind of speak among ourselves here, if that is OK.
    Look, we have the same issue with the San Diego courthouse, 
by the way. It is business as usual, but, frankly, worse, 
because now we have the information. As you said, I guess it is 
when a decision was made, whether it was years ago, they can't 
change it, whether or not we have proof that the money is being 
wasted. So that seems to be the case with this agency.
    Really, my question and my comment, Madam Chairman, is more 
of an internal thing to us. We know what the problem is. There 
is a huge problem here. There is an attitude of ``we are going 
to continue to waste the money.'' The San Diego courthouse that 
we have been speaking about in this Subcommittee way before I 
was on the Subcommittee, Madam Chairman, you are more aware of 
it than anybody else, now we see that what they are doing with 
that courthouse is the same kind of thing. There was a deal cut 
to allow the construction to go forward but to bring in 
agencies and other departments that were in leased space into 
that new facility that was being built.
    Now that is not what is being done here. That is not what 
is being proposed. Now they are proposing moving people out of 
the old courthouse, and then you have to renovate the old 
courthouse, as opposed to just while we are building this new 
one let's get those who are in leased space in there.
    We could go on forever. So I think really the question and 
the comment, Madam Chairwoman, is really almost towards you, 
which is I think we need to figure out what we need to do in 
order to, frankly, try to reverse and stop this.
    As I said before in one of the hearings that you led for us 
recently, when we have facts that prove that the money is being 
wasted and then the administration, the agency, continues to do 
so, knowing that it is being wasted ahead of time when we have 
reports, studies, et cetera, it gets to the point where we are 
going to have to do our part.
    So I think we need to just now kind of figure out what we 
have to do. Because I don't think we are going to get this 
agency to change. I just don't. I think we are going to have to 
do our part. We are going to have to, obviously, contact the 
appropriators. Unfortunately, we don't have a lot of time, 
because the information was given to us late, as you already 
mentioned.
    So I think we are going to have to be very aggressive. 
Because we are getting no help in protecting the taxpayer. We 
are getting no help in changing the way things are being done. 
We are getting no help in even realizing the reality we have, 
studies after studies and fact after fact, showing the money is 
being wasted and just thrown away.
    So I think we are just going to have to do our part; and we 
are going to have to be, frankly, very, very aggressive. 
Because I just don't see any help from the agency.
    Ms. Norton. I join you, Mr. Diaz-Balart. We have sat here 
and preached to an unwilling choir for a long time without 
results that I think we could justify.
    Yes, that is part of the reason we are reauthorizing 
provisions in the statute and part of the reason why I say we 
are not going to approve any prospectuses for best value unless 
we look at them ahead of time. If the agency needs us to 
essentially act like they are students and we are the teachers, 
we are going to have to do that. Because, otherwise, we just 
become a check-off Subcommittee.
    At a time when every Subcommittee is trying to save funds, 
we can't allow a big amount--the kinds of big amounts it takes 
to lease and construct properties--to simply go with no more 
indication, for example, that best value is being used 
appropriately to control price than we have here today.
    I am going to go to Mr. Michaud.
    Mr. Michaud. Thank you very much, Madam Chair.
    I have a couple of questions.
    Have you done an analysis of what are the total needs of 
projects out there that GSA has?
    Mr. Foley. In terms of repair and alterations and new 
construction?
    Mr. Michaud. For new construction and alterations, if you 
have them separated.
    Mr. Foley. Sure. We estimate our current repair liability 
for the portfolio somewhere in the range of about $5.3 billion. 
We know that there are a number of large new construction needs 
out there for Federal executive branch agencies exceeding 
another $2 billion, including things like the remainder of the 
St. Elizabeths campus.
    There is a large courthouse construction program as well. 
Needs on the 5-year plan I think exceed another $1.5 billion to 
$2 billion, as well as the land port of entry program has about 
$5 billion worth of construction long term. I think the 5-year 
plan is significantly less for that. But there are significant 
needs out there for the Federal inventory.
    Mr. Michaud. When you look at the projects, do you look at 
veteran-owned businesses, whether or not they would have a 
priority in that regard?
    Mr. Foley. Certainly. We follow all the procurement rules 
and the preferences required for the small business goals, 
including veteran owned.
    Mr. Michaud. What about project labor agreements? Do you 
sign any project labor agreements?
    Mr. Foley. GSA has been a leader in terms of the 
implementation of project labor agreements, particularly 
through the Recovery Act projects. We were one of the first 
agencies to move out on that and I believe established PLAs in 
at least four projects and identified ten projects that we are 
looking at negotiating them as we move forward on.
    Mr. Michaud. OK. When you talk about agencies trying to 
meet the agencies' needs, does GSA look at--for instance, you 
could have the Department of Labor, OSHA, EPA, EDA. They all 
need space. Do you look at co-locating a lot of these agencies, 
even though they may not want to be co-located? How does GSA 
deal with that issue where you are involving different agencies 
and different needs?
    Mr. Foley. Certainly. We do look at the overall Federal 
requirement. When an agency comes to us with a housing need, we 
look at what we have in terms of existing federally owned 
space, what we might already have under lease, and what the 
alternatives are for leasing. If there are opportunities for 
economies of scale provided through co-location, that is 
certainly something we look at pursuing.
    If there isn't sufficient existing federally owned space, 
one of the issues with co-location is, depending on the given 
real estate market, if you consolidate three or four agencies 
together, you may drive the requirement so large that existing 
space may not be available; and so in some instances that can 
actually increase costs. So it is sort of a delicate balance, 
and it is definitely something that is real estate market 
specific as to how we handle that.
    We also have to consider the compatibility of the agencies. 
And the ones you mentioned might be compatible, but you have to 
look at law enforcement versus those with, you know, public 
access and that sort of thing. So all of these criteria are 
factored into our locational decisions.
    Mr. Michaud. How do you prioritize the agencies list that 
you have to deal with? Is it by region or is it--how is the 
prioritization done?
    Mr. Foley. In terms of priority, it is many of the factors 
that I mentioned in my opening statement. So we do look at the 
mission need, the priority for the tenant agency. But, also, 
there are a number of factors that, frankly, weigh equally as 
much in terms of the benefit to the taxpayer, return on 
investment and payback period, improving the condition of 
existing facilities, environmental usage, improving the energy 
efficiency and high-performance green building factors, 
stewardship roles such as historic preservation of significant 
government-owned assets, all of those. There is a myriad of 
factors that go into it.
    Mr. Michaud. Have you looked at--just looking at some of 
the projects on your list--the new construction, the $380 
million for the St. Elizabeths--have you looked--I am not 
picking on that one, but have you looked at the needs out there 
for energy efficiencies, for projects that actually might not 
be as expensive, that you can wipe off the books, so to speak? 
A lot of smaller projects versus doing a larger project?
    Mr. Foley. Certainly. You will notice we have a $20 million 
line item for energy efficiency and high-performance green 
building features. A lot of that is for that.
    We also are working to become a green proving ground where 
we can address a lot of these smaller issues for specific 
buildings and improve the energy efficiency of them. We have a 
number of goals to meet under the Energy Independence and 
Security Act and the executive order, and that is what a lot of 
these funds are for, for many of the smaller projects that 
wouldn't rise to a full building modernization to allow us to 
do things such as integrated photovoltaic sun roofs or cool 
roof technology, a lot of different things.
    Mr. Michaud. I see my time has expired, so thank you very 
much.
    Mr. Foley. Certainly.
    Ms. Norton. We will hear next from Ms. Edwards.
    Ms. Edwards. Thank you, Madam Chairman.
    I have a couple of questions. Can we go back to this issue 
of best value and how and when you make a determination that 
price in terms of its importance for consideration sort of 
falls below some of the technical factors?
    Mr. Foley. Certainly. I think, as I said before, you know, 
the majority of our procurements are done with low cost, 
technically acceptable. But we do source selection, 
particularly when it is a much more complicated requirement for 
specialized space where technical factors are critical.
    Also, for some of our larger procurements which, as you 
know, are a lot of the bigger dollar acquisitions, where there 
are a myriad of factors, including price, which are important, 
but making sure that we do have something that provides the 
best value, not just to the occupying agency but to the 
taxpayer as well.
    Ms. Edwards. So, let's take, for example, the 
solicitation--the prospectus, rather, for the DHS Annex. On 
April 1, you issued a solicitation for offers up to 1.136 
million square feet of space to house three tenant agencies. 
The offers were originally due on May 7. That was then extended 
by a week to May 14, so an extra week.
    In that submission, the offers had to include evidence of, 
quote, all final base building zoning subdivision site plan 
approvals and any other required local, regional, State, or 
Federal Government approvals that might be required related to 
the base building utilities, stormwater management, parking 
facilities, and landscape requirements.
    My own experience, just as an activist doing zoning and 
planning work, is that there is no possible way that you could 
get through probably in any one of our jurisdictions--I know 
one of the ones I represent, Prince George's County--that 
process in 4 weeks or in 5 weeks. So can you just tell me then 
on that particular prospectus what is the average or even 
median time for site-planned approval processes in the various 
jurisdictions in this metropolitan area? Do you know?
    Mr. Foley. I do not know. And we can certainly follow up 
with that information, based on our experience.
    I think the DHS omnibus prospectus--I mean, it was shaped 
and designed to allow for the maximum competition possible but, 
at the same time, meeting the timeline for the Department of 
Homeland Security and aligned with other expiring leases that 
we have.
    Ms. Edwards. Right. But let me just go back to this, 
because I can assure you that that process generally takes 
between 12 to 18 months to complete that process in the local 
zoning and planning process.
    Site plan approvals, all of that, stormwater management, 
meeting local zoning requirements, 12 to 18 months. I would be 
shocked if GSA could come back and tell me that in any of the 
jurisdictions in this metropolitan area that that would not be 
true, just absolutely shocked. I mean, I have sat in on these 
hearings for months and months and months. So I would be 
interested in an answer for that.
    With respect to that particular solicitation and the other 
one that was referenced by the chairwoman regarding the Health 
and Human Services facility, there was a change in the 
prospectus from 9-foot ceilings to 8-foot ceilings. When my 
staff inquired to you, the GSA, about that change, it was 
described in both of those instances, two separate teams doing 
them, that it was a typographical error that resulted in 
exactly the same change to the prospectus, which, in effect, 
favored one jurisdiction.
    Is it the practice of GSA, in the prospectus process of 
amending a prospectus, to make that kind of technical change, 
what seemed on its face to be a technical change? What's the 
process? How do you make a decision that a prospectus has to be 
changed to reflect a change from a 9-foot ceiling to an 8-foot 
ceiling?
    Mr. Foley. I believe that in that instance I have also 
heard that it was a typographical error.
    Ms. Edwards. Two typographical errors, right? Same two 
typographical errors.
    Mr. Foley. Yes. I believe the intent in that was to 
increase the competition, allowing more existing buildings to 
compete and so, again, looking for the best value and trying to 
maximize competition. I think that it--you know, it does have 
to do with the level of competition and what we are seeing in 
the marketplace. Clearly, if there has been an error or 
omission, we will clarify and look to make that clarification 
amendment.
    Ms. Edwards. So if you are maximizing competition but the 
result is that you are including then competition which results 
in greater rental price by adding in competition that brings in 
another jurisdiction, it is hard for me to see that that 
actually makes it a better deal for the taxpayers.
    So, for example, if there is a disparity from Washington, 
D.C., of $49 per square foot to Northern Virginia, which is $38 
a square foot, to Maryland, which is $34 a square foot, where 
do you think the best value is for the taxpayer.
    Mr. Foley. I mean, obviously, price is a key consideration, 
as well as the quality of the building and what we get and how 
does that meet the customer agency need.
    Ms. Edwards. How does it meet the taxpayers need?
    Mr. Foley. I mean, ensuring that they can efficiently carry 
out their mission is a key component. Obviously, price is also 
a critical consideration.
    Ms. Edwards. And so, in a metropolitan region, how does GSA 
make a determination that there is that wide a variance, I 
guess it is, about a $15 per square foot variance in a 
metropolitan region? How does GSA come to that conclusion?
    Mr. Foley. Certainly. When we determine the maximum annual 
rental rate in the jurisdictions, it is based on an analysis of 
the cost of existing lease space and existing market space, 
what is available. And so, looking at the average cost of space 
within each of the jurisdictions, how much space is available 
and what we believe we can lease it for in a given program 
year.
    Ms. Edwards. And so how will one jurisdiction ever be 
competitive, given that consideration? And especially when 
price isn't, you know, at the top of the line?
    Mr. Foley. I mean, I think our goal is to maximize 
competition. Certainly we want to make sure that all 
jurisdictions are competitive in our procurements where that is 
possible.
    Ms. Edwards. Thank you, Madam Chairman.
    Ms. Norton. I thank you, Ms. Edwards, for those probing 
questions.
    I want to finish off this best price--this concern I have 
with best value, and the reason I spend the time on it is I 
detect the possibility of real savings there. You know what the 
public thinks? The public thinks price is what matters. We 
would have to explain to them about best values. And it is 
very, very unfortunate to give best value a bad name. That is 
what GSA, I believe, may be doing.
    For example, you had a protest actually sustained just 2 
weeks ago, June 1st. It had to do with your procurement for an 
EPA space in San Francisco. And I want to quote what the 
Controller General said in overturning, essentially, what GSA 
had done.
    In responding to this protest, GSA furnished us with 
several versions of the Source Selection Evaluation Board's 
final technical evaluation report. The agency was not able to 
identify which if any of the versions represented the consensus 
views of the evaluators. Only one of the three versions of the 
report furnished to us included signatures in the blanks for 
the SSEB members signatures, and the dates that the evaluators 
signed varied. The differing dates of signatures, along with 
different versions of the report, suggest that the report was 
revised as it was circulated among the various members for 
signature.
    Troublingly, there is no evidence that the version that 
included final edits was recirculated for approval to the board 
members who had signed off on earlier versions. This seems to 
show something close to disregard of a process, certainly lax 
discipline in making perhaps the most important decision you 
could make which is how much should it cost the taxpayer.
    Does GSA have standard procedures, or does this fall under 
the answer you gave me before that you are going to have to 
develop such guidelines so that these procedures are 
standardized?
    Mr. Foley. I am not aware of the specifics of that case, 
and we will be happy to follow up with you on that.
    As far as how the procurements are run and how they go, we 
do have procedures in place for how source selection boards are 
established. The standards, as far as the criteria, may not be 
as consistent, and that is one of the areas that we are looking 
at.
    Ms. Norton. What percentage of your protests are sustained 
in favor of the protestor?
    Mr. Foley. I don't have that information.
    Ms. Norton. Get that information to the Subcommittee within 
30 days. We want the protests that GSA has lost, let me put it 
that way, over the last 5 years. We understand that government-
wide only about 20 percent does the government lose. We would 
be interested in knowing.
    Ms. Norton. Do you circulate the protest decisions so that 
contracting officers across the country can benefit from 
lessons learned?
    Mr. Foley. We do have a network of our realty services 
folks, the leasing community. In fact, they are meeting this 
week in Washington, DC.
    Ms. Norton. The leasing community. You mean the people who 
make these decisions on the boards?
    Mr. Foley. Well, it is the directors for each of our 11 
regions are meeting here and then they do work with their 
folks.
    Ms. Norton. Do you circulate--look, I am a lawyer. If I am 
in a law firm and the firm lost a decision of a court, I would 
want everybody within that section of the firm that deals with 
those matters to read that decision.
    I am asking you if the decision itself is circulated so 
that throughout the region people can understand why they lost 
a protest. A protest is a very heavy thing for an agency to 
lose. Very, very costly for the protestor but terrible for the 
agency. Do you circulate these decisions so that people can 
learn not to make that mistake again?
    Mr. Foley. I am not aware of a formal process where we 
circulate the actual decision. If there is an issue where we 
need to clarify a policy or reiterate, we do that as a result 
and that does get circulated to all members of the real estate 
community.
    Ms. Norton. All right. When do you intend to have this 
guidance to regional employees done with respect to the best 
value and technical matters that we questioned you about 
before? When is that guidance due to be done?
    Mr. Foley. I will have to confirm that.
    Ms. Norton. Would you confirm that by close of business 
Friday, what is the date for this guidance, and would you make 
sure that it includes circulation of all matters where the 
agency has lost a protest?
    I want to ask you about another recent matter that came 
before this Subcommittee as it relates to yet a new issue, and 
I am now referring to the Emmett Bean Federal Center in 
Indianapolis. It houses the Defense Finance Accounting Service. 
Now, GSA proposes to spend $19.33 million in security upgrades. 
I want to know what percentage of these upgrades are driven by 
DOD's antiterrorism standards.
    Mr. Foley. I believe the security enhancements are as a 
result of the DOD antiterrorism force protection standards and 
the USC code. What I am not aware of, and we can certainly----
    Ms. Norton. I am sorry. I didn't hear what you said there. 
The what?
    Mr. Foley. The USC code which shapes the antiterrorism 
force protection standards.
    Ms. Norton. Now, are you aware that DOD's authority is to 
promulgate security standards limited to military 
installations? And I am going to ask you, is the Indianapolis 
Defense Finance Accounting Service a military installation?
    Mr. Foley. I am aware of similar concerns. We are actually 
working with the Department of Defense, and I understand they 
have been meeting with your Committee as well. There has been a 
broader interpretation that the security criteria apply to all 
Department of Defense facilities, and we have been working 
under that criteria as well. So under those criteria, it would.
    Ms. Norton. I understand from staff that they will be 
meeting and have been meeting with DOD personnel. But I must 
ask you, Mr. Foley--and we understand you are not the person in 
charge, you are the deputy, and I suppose you ought to know 
these things and be as involved in these things as anyone 
else--but has GSA ever made an attempt to challenge the 
applicability of the antiterrorism standards by saying, look, 
military installations, our lawyers tell us that accountants 
don't usually operate in military installations. Have you ever 
even challenged them?
    Mr. Foley. I am not aware of a formal legal challenge that 
we have made. We do work with them----
    Ms. Norton. I am talking about--I don't mean a formal legal 
challenge. Have you ever sat down with DOD and said, you know, 
you could save a lot of money for the taxpayers if we didn't 
have to do $19.1 million in security upgrades for some 
accountants who al Qaeda does not tend to target.
    Mr. Foley. We have sat down with them and discussed the 
implications of security requirements on the cost of many of 
these projects. I can't speak to and I will defer to the 
Department of Defense on how they develop their criteria and 
how they determine their risk levels. But we do discuss 
tradeoffs and things that we might be able to do that may be 
more economically efficient, such as hardening of the facility, 
as opposed to setbacks and those sorts of things that are 
tradeoffs.
    Ms. Norton. Did you do so with respect to this facility 
before it was--before it became controversial?
    Mr. Foley. I believe we did.
    Ms. Norton. I agree with the Ranking Member, though. I 
believe that the reluctance of GSA to take on even peer 
agencies, I don't have any confidence that you would take on 
the DOD by just sitting down and having a conversation with 
them. We don't see any implication of that. It was a shocking 
hearing we had on DOD and its application of these standards, 
which, by rote, GSA was just carrying out. Hey, we want them 
with the accountants. We want them----
    And they were clear at the table. They say, we think 
anything with defense in front of its name, in fact, should 
have these standards. And when we pointed out to them that the 
word is military, not defense, they had absolutely no response 
except that is the way they think it ought to be. So when they 
think it ought to be that way, with all the--and here we 
documented in that particular case four times the amount that 
it would otherwise cost. This was the military plan.
    If they think it ought to be that way and if GSA thinks it 
ought to be that way, what the Ranking Member says is correct. 
Then we have got to make many of these things a matter of law. 
So we are going to help you out.
    Let me ask you about the DHS headquarters at St. 
Elizabeths, where GSA is requesting $10 million for new 
pedestrian tunnels. Where are these tunnels and why are they 
needed?
    Mr. Foley. Certainly. The majority of that funding is for a 
tunnel that is on the west campus. It provides for utility 
infrastructure and connection between the central utility plant 
and the operations center. I believe that is about $8 million 
of the total cost.
    There is also a portion that goes for----
    Ms. Norton. So $8 million is not for people to pass from 
one side of the street to the other?
    Mr. Foley. Correct. I believe it is for infrastructure.
    Ms. Norton. But, of course, the words used in the 
prospectus is pedestrian tunnels. If you are saying you are 
also going to put some of the wires and cables up, we 
understand that. But you label them yourself--I am using your 
language--pedestrian tunnels.
    Mr. Foley. The language in the prospectus is not correct 
then. My understanding is that $8 million of that estimate is 
for a particular tunnel on the west campus.
    Ms. Norton. So we can cut it by $2 million, because we 
don't need the pedestrian part of it.
    Mr. Foley. Well, the $2 million is for the pedestrian 
connection from the east campus to the west campus. We worked 
with the Department of Homeland Security, and part of our 
commitment is to provide a unified campus to fulfill their 
mission of the consolidation on the St. Elizabeths campus. When 
the FEMA portion, when it was decided that would be located on 
the east campus, we agreed to provide secure access from one 
portion of the campus to the other so that we only have to 
badge in and out once.
    Ms. Norton. Let me understand this. One part of DHS, among 
the several to be located there, will be on the other side of 
the street.
    Mr. Foley. Yes.
    Ms. Norton. Let's assume that is FEMA. And I am sure there 
is going to be--that is why we want consolidation--business 
between FEMA and what is on the other side of the street.
    Mr. Foley. Yes.
    Ms. Norton. Why can't people just cross the street, Mr. 
Foley? Is a campus, for example, of the kind we have all around 
this region--let me start with the one that you are sitting on. 
To be sure, after the House was built, we had tunnels. But we 
sure didn't have tunnels for most of the time. It is a campus. 
Universities have campuses. And a campus means or implies that 
you get to walk around the campus. We are not creating one 
building. We are creating a campus.
    Now, you are about to get into something very 
controversial, because the appearance is that the agency is 
trying to seal itself up within the complex and, in doing so, 
to discourage. One of the reasons we build in such areas, by 
executive order, Federal buildings, Federal agencies look for 
areas like this area to build in because it helps to, in fact, 
invigorate the area. That being the case, I don't know how that 
will happen if you instruct employees to take the tunnel across 
the street, rather than to walk across the street.
    You are creating, for the first time, a face for the 
project that has been very well received. It has been very well 
received in the community. If, in fact, this tunnel goes ahead 
without some overriding need being shown, you will tear all of 
that up. It will be seen as impossible, therefore, to foster 
the commercial and retail on the other side because there will 
be nobody to go to it.
    Remember that the agency already will have an unfortunate 
frontage not of its making. It is behind an old-fashioned high 
wall, very high, very foreboding because the St. Elizabeths was 
built for what they regarded as mentally insane people who 
shouldn't get out; and they had a whole community there. It 
was, by the way, a state-of-the-art facility.
    But that wall was really meant to keep people in there. 
That wall is a historic wall. We are not going to take down 
that wall. So you are already walled up. And the surrounding 
community and the District of Columbia understands that. It is 
very difficult to understand who would go outside if, in fact, 
all you had to do was walk under the street, not around the 
campus as we walk around this campus, for example.
    Mr. Foley. We believe Homeland Security will be a good 
neighbor to the community. And, you know, as you are aware, we 
fully support the redevelopment and we think that is one of the 
big benefits of this project. And we thank you for your support 
and help in getting the dollars to move this program forward.
    I think one of the things that will help in terms of that 
is the parking ratio. As you know, we work closely with you all 
to ensure that there is only a one-to-four ratio, encouraging 
the use of mass transit, as opposed to everyone driving their 
cars on to the secured campus.
    Ms. Norton. Well, how is that going to help? Because the 
mass transit is located nearby, but you are going to have to 
run shuttles, aren't you, in order to connect with the mass 
transit?
    Mr. Foley. I think there is a portion of that. But as the 
redevelopment happens in the area through mixed use and retail, 
we are also hopeful that as folks are coming to and from work 
that provides an opportunity. We believe that as the 
redevelopment takes place it will provide an impetus for the 
employees to go out into the community.
    Ms. Norton. Do you agree that the amount of amenities 
located within the building should be limited in order to 
encourage use of retail in the neighborhood?
    Mr. Foley. I believe that there are a limited number of 
amenities planned for the campus. It is similar to what we have 
in other campuses and facilities. Part of the intent, as you 
mentioned, is to foster economic development in the local 
community. So we certainly do encourage folks within the campus 
to go out and take advantage of those amenities within the 
local community.
    Ms. Norton. Mr. Foley, we will need a detailed written 
analysis for a tunnel before approving either $10 million or 
any amount of that for a tunnel beneath the building. It 
doesn't need to be in this prospectus. You are not even close 
to it. But we have not heard, and I am not--perhaps you did not 
know because we did not get the prospectus early enough for you 
to be prepared. But we are not going to spend--I mean, I see 
this as a nice, large opportunity to say to the administration, 
we hear you. We are cutting $10 million for a tunnel.
    Among the things we do not do today is dig tunnels. We have 
tried every way to see whether tunnels could solve some of our 
problems. There was huge concern when Pennsylvania Avenue was 
closed in front of the White House and all kinds of people, all 
sorts of suggestions. And one of them was to do a tunnel under 
Pennsylvania Avenue. And at that time it was interesting to 
hear the responses. And it was, we just don't do tunnels 
anymore. We do not do tunnels. Tunnels are so costly that the 
Federal Government essentially is out the tunnels business.
    And you are out of business for it unless you can show us 
an overriding reason why a tunnel--overriding. It has to be 
very, very important as to why we ought to say to the taxpayers 
you are not only building these people some brand new 
buildings, you are making sure that in inclement weather they 
don't have to go out and cross the street.
    Now, we understand that on campuses that you are used to 
people have to do that, but we think these people deserve every 
amenity, so we are spending $10 million to make sure they can 
cross the street, consisting of a few hundred yards.
    So even as I lay out the case, I lay out a case because I 
want a rebuttal, not because we have made a decision. But I 
need a rebuttal. In the absence of a rebuttal, there will not 
be a $10 million tunnel.
    Here is something that we would like to see, a model we 
would like to see you build on. I mentioned the Martinsburg, 
West Virginia, facility. Purchase. It was an option embedded in 
a release from 1995. Now, apparently, this fixed-price option 
did not render the lease a capital lease when it was negotiated 
in 1995; and that would have, of course, brought it within the 
Budget Enforcement Act.
    Why doesn't GSA routinely negotiate fixed-price options 
when agreeing to the terms for whole building leases as long as 
the fixed price is not a bargain on its face at the time it is 
negotiated? Now here is a more creative thing you could have 
done. Why don't you do that?
    Mr. Foley. My understanding of the purchase option for 
Martinsburg is that the clause in the lease actually says it is 
for fair market value. We estimate the fair market value to be 
at the price in the prospectus.
    Currently, we are prohibited from pre-negotiating a strike 
price. And we do work to get purchase options in many of our 
leases, particularly when we know there would be a long-term 
advantage to Federal Government ownership.
    Ms. Norton. Wait a minute. This was a fixed price. What 
differentiates this? Why are you able to purchase this 
building? We would like to see more of it.
    Mr. Foley. Certainly. I mean, we do have a purchase option 
in that lease; and many of our leases have similar purchase 
options. The clause says something along the lines of for fair 
market value. It doesn't pre-determine a price.
    Ms. Norton. OK. Why can't we do that so that we can 
purchase more buildings?
    Mr. Foley. We do include those in numerous leases, such as 
many of the FBI facilities and others.
    Ms. Norton. All right. The fair market price according to 
the records we have, in April, was 28,000--I'm sorry. 
$28,400,000. However, the building and site acquisition amount 
is $24,767,000.
    Mr. Foley. I will have to confirm those numbers and follow 
up.
    Ms. Norton. Real important, because it looks like you are 
buying it for below fair market price. Within 30 days, we 
need--well, given how late this is, within 10 days, we need an 
explanation.
    Mr. Foley. Certainly.
    Ms. Norton. We want to encourage this. We are not 
criticizing this. Some perhaps good lawyer has found a 
technical way for you to buy buildings without scoring. You 
ought to be jumping for joy, especially in light of a very 
troublesome, at least on its face--perhaps you can explain. It 
had to do with the FBI garage in Detroit, very expensive. You 
are building a garage annex. This building is called the 
Patrick McNamara Federal Building. It has a large price tag, 
$45.6 million in total costs. Fairly modest garage. That 
amounts to $176,000 per space for 259 vehicles to be parked 
there. So we need an explanation as to why GSA is proposing to 
spend $185 per square foot for a garage project. We understand 
indeed the FBI advises that their garages typically cost in the 
range of $30,000 per parking space. This is roughly six times 
higher. Could you explain this?
    Mr. Foley. Certainly. This project is tied to actually some 
Recovery Act funding that we are doing for conversion of the 
McNamara building to keep FBI in there. As you are well aware, 
this Committee authorized a lease prospectus for the FBI in 
Detroit that we are not moving forward with. So we actually 
believe this is a good story. As opposed to spending over $160 
million leasing for the FBI over the next 15 plus years, we are 
combining the $45 million for the garage with $55 million in 
the Recovery Act, a significant savings for the taxpayer.
    The project is for a garage and vehicle maintenance 
facility. It is not a typical parking garage that you might 
think of. As I understand it, it is going to house the 
automotive maintenance program, electronic technician program, 
and evidence response teams, each with vehicle bays, storage 
facilities, and work areas. So it goes well beyond that.
    In addition, the facility also provides secured covered 
parking and access control for the FBI's government vehicles, 
specialty vehicles like panel trucks, bucket trucks. They also 
have command post vehicles, trailers, all kinds of other things 
that are fairly unique that you wouldn't see in a typical 
parking garage for government construction.
    Ms. Norton. Yeah, it looks like some of it is just storing 
cars or doing maintenance. I don't see why that gets the price 
so high. $45.6 million in total cost.
    Is there an oversell factor here? For example, are you 
taking into account that on any given day some will be on 
vacation or sick leave or travel status? What diversity of 
factors did the FBI and the GSA use to arrive at this 
requirement?
    Mr. Foley. I will have to follow up with that information.
    Ms. Norton. Ten days. We need it, in light of the lateness 
of this prospectus. In fact, everything that has to do with 
this prospectus should be to us within 10 days if you all 
expect this prospectus to be approved by this Committee in time 
and before the appropriators, before we speak to the 
appropriators.
    [The information follows:]

    [GRAPHIC] [TIFF OMITTED] T7060.035
    
    [GRAPHIC] [TIFF OMITTED] T7060.036
    
    Ms. Norton. Could you explain what steps you at the GSA are 
taking to implement the President's June 10 memorandum on 
unneeded real estate? For example, he wants the further 
consolidation and reduction of data center space and to assist 
agencies in measuring their own utilization and occupancy 
rates. What guidance does GSA anticipate as a result of the 
President's memorandum?
    Mr. Foley. Certainly.
    As you mentioned, the memorandum was signed just last week 
directing the Federal Government to look for up to $8 billion 
in savings. I believe $5 billion of that is BRAC related and $3 
billion for other Federal assets. This will dominantly be 
achieved through the disposal and proceeds from unneeded 
government-owned assets and reducing operating costs and more 
efficiently using existing facilities and new facilities.
    Clearly, our first priority is working with the agencies. 
GSA has the lead for developing the guidance that will be done 
within the first 90 days or within the next 90 days. In fact, 
that's why Commissioner Peck was unable to be here today. As I 
mentioned, he is at the White House complex on a meeting 
kicking that off to help set the direction for that.
    The first priority I think that we are working with other 
landholding agencies and reviewing our own portfolio for is to 
expedite the disposal of unneeded Federal assets and the 
demolition of properties in many cases on a Federal complex 
where we may be spending operating costs on these facilities or 
where we have an opportunity to achieve proceeds from the sale 
of them. So opportunity for multiple savings there.
    We are also working to improve the utilization of space. As 
leases expire or we renovate and reconfigure existing Federal 
facilities, we are looking for opportunities to improve our 
utilization and the density of use, which would allow us to 
either eliminate space or backfill with other functions.
    We are working closely with agencies to review their 
requirements. And one of the things that we are doing is, as 
the agencies come to us and say, for example, I need 100,000 
square feet of space, GSA is taking a much more active role and 
aggressive role, saying can you really do it with 75,000 or 
80,000 square feet? Help us understand your requirement because 
we think there may be a better way to do this, and pushing back 
on agencies to better utilize their space.
    You mentioned the data centers. That is another critical 
area where we believe there is significant opportunity. Most 
agencies have their own data centers. With advances in 
technology like cloud computing, server virtualization, there 
are clearly opportunities to reduce the number of data centers 
government-wide; and that could have a significant impact on 
not only the square footage but the energy performance of the 
portfolio as well.
    So, again, a lot of opportunities out there. GSA is excited 
to have a leadership role in this, and we look forward to 
moving forward and helping implement the intent of the 
President's memo.
    Ms. Norton. I appreciate that this is expertise that GSA 
would have a leadership role. Our experience is that when GSA 
gets to the table with other agencies, it is miniaturized. It 
just doesn't have the stomach to stand up, even behind its own 
law.
    So we will be watching you very closely to see if you 
indeed offer leadership inasmuch as you have been given a 
leadership role, largely because of your expertise, not because 
of your record. For example, your record on price versus 
technical matters in procurement has been anything but a lead 
record; and I didn't hear it mentioned among the matters you 
will be looking at in order to save funds. Are you willing to 
look at the readjusting or the price, as opposed to technical 
factors in your prospectuses as a cost-saving matter?
    Mr. Foley. Certainly. We are always looking for ways that 
we can maximize the government's position and that we can get 
the best value for----
    Ms. Norton. I asked about price versus technical matters in 
particular. Are you willing to look at that?
    Mr. Foley. I think that is certainly an area where we can 
look at that.
    Ms. Norton. Are you willing to look at the monies that 
could be saved with respect to the DOD antiterrorism standards 
inasmuch as the word military installations is used with 
respect to implementation of those standards? And clearly 
millions of dollars could be saved if, with back office 
employees of the kind we have in the rest of the government, we 
used general GSA standards and not antiterrorism standards. Are 
you willing to take a look at the DOD standards?
    Mr. Foley. Absolutely. And we already are working with 
them.
    Ms. Norton. Very much appreciate that response.
    Before I close the hearing, I want you to make known to the 
appropriate parties at GSA that for the record we have 
outstanding requests from our hearing on March 24 entitled 
Capital Assets Crisis: Maintaining Federal Real Estate with the 
Dwindling FBF, the Federal Building Fund. Where are GSA's 
responses, given the fact that 60 or more days have passed 
since the hearing and some of the responses were due within 30 
days?
    Mr. Foley. I do not know, but I will personally follow up 
today and find out the status of those.
    Ms. Norton. Please bear in mind, particularly in light of 
the tardiness of these prospectuses and the capital and leasing 
program for 2011, that the Committee expects the--particularly 
when you've gotten, as we always give, timely notice, we expect 
the prospectuses, the leases to be here. We understand that the 
leases may have to come a little later, but much of what was in 
your portfolio was locked in by the President's own budget. So 
you didn't have very much you could have done because the 
President had locked you in, and yet we are 4 months late. The 
effect of that, Mr. Foley, is simply on you. Because it means 
we are not going to proceed to the prospectus until the 
questions we have asked have been answered.
    We regard these hearings always as problem-solving 
hearings, so if we seem to be concerned, it is not that we are 
wringing our hands and we want to beat up on the GSA. GSA has 
no better defenders than this Subcommittee. What it does mean, 
though, is that we want to work with the agency in order to 
solve the problems that we raise. We do not say, go back, fix 
it, and then come so that we can beat up on you, or you haven't 
fixed it. We say fix it. And the best way to fix it is to be in 
close consultation with the expert staff we have.
    You may have disagreements with them. That is all right. We 
will not always respond in favor of the staff decision. Our 
concern will be if we have laid out problems in the Committee 
hearing, what has been the response, has it been timely.
    Thank you very much for your testimony. Tell Mr. Peck we 
understand that, why he was not here today, and we look forward 
to your response and his responses to the questions we have 
posed.
    The hearing is adjourned.
    [Whereupon, at 12:02 p.m., the Subcommittee was adjourned.]

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