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

                      RECOVERY ACT PROJECT TO REPLACE THE
                        SOCIAL SECURITY ADMINISTRATION'S
                            NATIONAL COMPUTER CENTER

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

                                    HEARING

                                   before the

                          COMMITTEE ON WAYS AND MEANS

                        SUBCOMMITTEE ON SOCIAL SECURITY

                                 JOINT WITH THE

                        COMMITTEE ON TRANSPORTATION AND
                                 INFRASTRUCTURE

                     SUBCOMMITTEE ON ECONOMIC DEVELOPMENT,
                   PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                         U.S. HOUSE OF REPRESENTATIVES

                         ONE HUNDRED ELEVENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               DECEMBER 15, 2009

                                   __________

                               Serial No. 111-39

                                   __________

             Printed for the use of the Committee on Ways and Means

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                          COMMITTEE ON WAYS AND MEANS

                     CHARLES B. RANGEL, New York, Chairman

    FORTNEY PETE STARK, California       DAVE CAMP, Michigan
    SANDER M. LEVIN, Michigan            WALLY HERGER, California
    JIM McDERMOTT, Washington            SAM JOHNSON, Texas
    JOHN LEWIS, Georgia                  KEVIN BRADY, Texas
    RICHARD E. NEAL, Massachusetts       PAUL RYAN, Wisconsin
    JOHN S. TANNER, Tennessee            ERIC CANTOR, Virginia
    XAVIER BECERRA, California           JOHN LINDER, Georgia
    LLOYD DOGGETT, Texas                 DEVIN NUNES, California
    EARL POMEROY, North Dakota           PATRICK J. TIBERI, Ohio
    MIKE THOMPSON, California            OHIO GINNY BROWN-WAITE, Florida
    JOHN B. LARSON, Connecticut          GEOFF DAVIS, Kentucky
    EARL BLUMENAUER, Oregon              DAVID G. REICHERT, Washington
    RON KIND, Wisconsin                  CHARLES W. BOUSTANY, Jr.,
    BILL PASCRELL, JR., New Jersey       Louisiana
    SHELLEY BERKLEY, Nevada              DEAN HELLER, Nevada
    JOSEPH CROWLEY, New York             PETER J. ROSKAM, Illinois
    CHRIS VAN HOLLEN, Maryland
    KENDRICK B. MEEK, Florida
    ALLYSON Y. SCHWARTZ, Pennsylvania
    ARTUR DAVIS, Alabama
    DANNY K. DAVIS, Illinois
    BOB ETHERIDGE, North Carolina
    LINDA T. SANCHEZ, California
    BRIAN HIGGINS, New York
    JOHN A. YARMUTH, Kentucky

                 Janice Mays, Chief Counsel and Staff Director

                       Jon Traub, Minority Staff Director

                                     ______

                        SUBCOMMITTEE ON SOCIAL SECURITY

                      JOHN S. TANNER, Tennessee, Chairman

    EARL POMEROY, North Dakota           SAM JOHNSON, Texas, Ranking Member
    ALLYSON Y. SCHWARTZ, Pennsylvania    KEVIN BRADY, Texas
    XAVIER BECERRA, California           PATRICK J. TIBERI, Ohio
    LLOYD DOGGETT, Texas                 GINNY BROWN-WAITE, Florida
    RON KIND, Wisconsin                  DAVID G. REICHERT, Washington
    JOSEPH CROWLEY, New York
    LINDA T. SANCHEZ, California
    JOHN A. YARMUTH, Kentucky
                 COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                     JAMES L. OBERSTAR, Minnesota, Chairman

    NICK J. RAHALL, II, West Virginia,   JOHN L. MICA, Florida
    Vice Chair                           DON YOUNG, Alaska
    PETER A. DEFAZIO, Oregon             THOMAS E. PETRI, Wisconsin
    JERRY F. COSTELLO, Illinois          HOWARD COBLE, North Carolina
    ELEANOR HOLMES NORTON, District of   JOHN J. DUNCAN, Jr., Tennessee
    Columbia                             VERNON J. EHLERS, Michigan
    JERROLD NADLER, New York             FRANK A. LOBIONDO, New Jersey
    CORRINE BROWN, Florida               JERRY MORAN, Kansas
    BOB FILNER, California               GARY G. MILLER, California
    EDDIE BERNICE JOHNSON, Texas         HENRY E. BROWN, Jr., South
    GENE TAYLOR, Mississippi             Carolina
    ELIJAH E. CUMMINGS, Maryland         TIMOTHY V. JOHNSON, Illinois
    ELLEN O. TAUSCHER, California        TODD RUSSELL PLATTS, Pennsylvania
    LEONARD L. BOSWELL, Iowa             SAM GRAVES, Missouri
    TIM HOLDEN, Pennsylvania             BILL SHUSTER, Pennsylvania
    BRIAN BAIRD, Washington              JOHN BOOZMAN, Arkansas
    RICK LARSEN, Washington              SHELLEY MOORE CAPITO, West
    MICHAEL E. CAPUANO, Massachusetts    Virginia
    TIMOTHY H. BISHOP, New York          JIM GERLACH, Pennsylvania
    MICHAEL H. MICHAUD, Maine            MARIO DIAZ-BALART, Florida
    RUSS CARNAHAN, Missouri              CHARLES W. DENT, Pennsylvania
    GRACE F. NAPOLITANO, California      CONNIE MACK, Florida
    DANIEL LIPINSKI, Illinois            LYNN A WESTMORELAND, Georgia
    MAZIE K. HIRONO, Hawaii              JEAN SCHMIDT, Ohio
    JASON ALTMIRE, Pennsylvania          CANDICE S. MILLER, Michigan
    TIMOTHY J. WALZ, Minnesota           MARY FALLIN, Oklahoma
    HEATH SHULER, North Carolina         VERN BUCHANAN, Florida
    MICHAEL A. ARCURI, New York          ROBERT E. LATTA, Ohio
    HARRY E. MITCHELL, Arizona           BRETT GUTHRIE, Kentucky
    CHRISTOPHER P. CARNEY, Pennsylvania  ANH ``JOSEPH'' CAO, Louisiana
    JOHN J. HALL, New York               AARON SCHOCK, Illinois
    STEVE KAGEN, Wisconsin               PETE OLSON, Texas
    STEVE COHEN, Tennessee
    LAURA A. RICHARDSON, California
    ALBIO SIRES, New Jersey
    DONNA F. EDWARDS, Maryland
    SOLOMON P. ORTIZ, Texas
    PHIL HARE, Illinois
    JOHN A. BOCCIERI, Ohio
    MARK H. SCHAUER, Michigan
    BETSY MARKEY, Colorado
    PARKER GRIFFITH, Alabama
    MICHAEL E. McMAHON, New York
    THOMAS S. P. PERRIELLO, Virginia
    DINA TITUS, Nevada
    HARRY TEAGUE, New Mexico
                      SUBCOMMITTEE ON ECONOMIC DEVELOPMENT

                   PUBLIC BUILDINGS AND EMERGENCY MANAGEMENT

               ELEANOR HOLMES NORTON, District of Columbia, Chair

    BETSY MARKEY, Colorado               MARIO DIAZ-BALART, Florida
    MICHAEL H. MICHAUD, Maine            TIMOTHY V. JOHNSON, Illinois
    HEATH SHULER, North Carolina         SAM GRAVES, Missouri
    PARKER GRIFFITH, Alabama             SHELLEY MOORE CAPITO, West
    RUSS CARNAHAN, Missouri              Virginia
    TIMOTHY J. WALZ, Minnesota           MARY FALLIN, Oklahoma
    MICHAEL A. ARCURI, New York          BRETT GUTHRIE, Kentucky
    CHRISTOPHER P. CARNEY,                 ANH ``JOSEPH'' CAO, Louisiana
    Pennsylvania, Vice Chair             PETE OLSON, Texas
    DONNA F. EDWARDS, Maryland
    THOMAS S. P. PERRIELLO, Virginia
    JAMES L. OBERSTAR, Minnesota
      (Ex Officio)

    Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
    hearing records of the Committee on Ways and Means are also published
    in electronic form. The printed hearing record remains the official
    version. Because electronic submissions are used to prepare both
    printed and electronic versions of the hearing record, the process of
    converting between various electronic formats may introduce
    unintentional errors or omissions. Such occurrences are inherent in the
    current publication process and should diminish as the process is
    further refined.

                                C O N T E N T S

                                   __________

                                                                       Page

    Advisory of December 9, 2009 announcing the hearing..............     2

                                   WITNESSES

    Michael Gallagher, Deputy Commissioner, Office of Budget, Finance
      and Management, Social Security Administration.................    14
    Rob Hewell, Regional Commissioner, Mid-Atlantic Region, Public
      Buildings Service, General Services Administration,
      Philadelphia, Pennsylvania.....................................    20
    The Honorable Patrick P. O'Carroll, Inspector General, Social
      Security Administration........................................    25

                           SUBMISSION FOR THE RECORD

    Questions for the Record.........................................    45

                      RECOVERY ACT PROJECT TO REPLACE THE
                        SOCIAL SECURITY ADMINISTRATION'S
                            NATIONAL COMPUTER CENTER

                                  ----------

                           TUESDAY, DECEMBER 15, 2009

                         U.S. House of Representatives,
                                   Committee on Ways and Means,
                               Subcommittee on Social Security,
                                                 joint with the
                Committee on Transportation and Infrastructure,
                          Subcommittee on Economic Development,
                     Public Buildings and Emergency Management,
                                                        Washington, DC.

        The Subcommittees met, pursuant to notice, at 9:31 a.m. in
    room 1100 Longworth House Office Building, the Hon. John Tanner
    [Chairman of the Subcommittee on Social Security], presiding.
        [The advisory announcing the hearing follows:]

    ADVISORY FROM THE COMMITTEE ON WAYS AND MEANS
        Chairman Tanner and Chairwoman Holmes-Norton Announce a Joint
    Oversight Hearing on the Recovery Act Project to Replace the Social
    Security Administration's National Computer Center

        December 9, 2009

        Congressman John S. Tanner (D-TN), Chairman of the House Ways and
    Means Committee Subcommittee on Social Security, and Delegate Eleanor
    Holmes-Norton (D-DC), Chairwoman of the House Committee on
    Transportation and Infrastructure Subcommittee on Economic Development,
    Public Buildings, and Emergency Management, announced today that the
    Subcommittees will hold a joint oversight hearing on the progress made
    to replace the Social Security Administration's National Computer
    Center. The hearing will take place on Tuesday, December 15, 2009 in
    the main Ways and Means Committee hearing room 1100 Longworth House
    Office Building, beginning at 9:30 a.m.

        In view of the limited time available to hear witnesses, oral
    testimony at this hearing will be from invited witnesses only. However,
    any individual or organization not scheduled for an oral appearance may
    submit a written statement for consideration by the Committee and for
    inclusion in the printed record of the hearing.

    BACKGROUND:

        In February, Congress passed and the President signed the American
    Recovery and Reinvestment Act of 2009 (ARRA, Pub. L. 111-5), which
    provided $500 million for the Social Security Administration (SSA) to
    begin the process of replacing its national computer processing and
    data storage facility, the National Computer Center (NCC). This amount
    is expected to cover the cost of building a new facility and part of
    the cost of equipping it. Replacement of the NCC is the single largest
    building project funded under the Recovery Act.

        The NCC houses 450 million records of Americans' earnings and
    benefit data for almost 56 million beneficiaries. It performs a billion
    electronic transactions annually in the administration of benefits and
    data-matching agreements with other federal, state and local agencies.
    As reliance on electronic processing and technology has grown, the
    ability of the current NCC to function effectively is deteriorating.
    The NCC is nearly thirty years old and the building in which it is
    housed is nearing the end of its useful physical life. The NCC's
    capacity is inadequate to meet anticipated future needs, and
    deterioration of the facility is posing increasing risks to SSA
    operations.

        For these reasons, Congress provided SSA with necessary funds to
    begin the process of constructing and equipping a new facility. The
    General Services Administration (GSA) is managing the process of
    locating, designing and constructing the building which will house the
    new data center. In addition, the SSA Office of Inspector General (OIG)
    was assigned additional oversight duties under the Recovery Act,
    including oversight of the NCC project.

        SSA also has completed construction of and has transferred some
    computer operations to a secondary data center in North Carolina. This
    secondary data center was initially designed to support a portion of
    the work done at the NCC, but is now being developed as a comprehensive
    backup facility in case of failure of the NCC. It is unclear whether
    this secondary center will be fully operational in time, or if it will
    have sufficient capacity, to provide full backup support in the event
    of failure of SSA's primary data processing facility.

        In April, the Subcommittee on Social Security held a hearing on the
    initial plans and progress on this complex project. In May, the
    Subcommittee on Economic Development, Public Buildings, and Emergency
    Management also held a hearing on GSA's plans to execute the Recovery
    Act.
        This hearing will continue Congressional oversight of this critical
    project. It will provide a general update on the status of the project,
    including an examination of the decisions made thus far, and on the
    planning and next steps being taken by SSA and GSA. It will also
    provide an update on the agencies' plans for avoiding delays in the
    project's completion, and contingency plans in the event of
    catastrophic failure of the existing NCC prior to completion of the new
    facility.

        In announcing the hearing, Chairman John Tanner (D-TN) stated,
    ``Many of us strongly support the unprecedented transparency
    requirements for projects in the American Recovery and Reinvestment
    Act, including the construction of a new and updated Social Security
    data processing facility. This investment is urgently needed to ensure
    continued smooth operation of a program that is so crucial to 56
    million Americans. Our subcommittee is committed to making sure that
    the decisions made in pursuit of replacing the Social Security
    Administration's (SSA's) primary computing facility are fiscally and
    technically sound and help continue SSA's improvements in service to
    beneficiaries and other taxpayers.''

        Chairwoman Eleanor Holmes-Norton (D-DC) stated, ``I am pleased to
    hold this joint hearing on the General Services Administration's SSA
    primary computing center. Our committee has held four stimulus tracking
    hearings and believes that focusing on this project, with its many
    unique environmental and technical aspects, will serve as an excellent
    way to drill down into one project to highlight and explore the process
    and progress across the GSA portfolio.''

    FOCUS OF THE HEARING:

        The hearing will focus on the progress to date of SSA and GSA in
    using ARRA resources to replace the NCC, including the development of
    requirements for the new center, and the site selection process and
    criteria. The hearing will also evaluate SSA's and GSA's management of
    the potential for unexpected cost and delay. Finally, the hearing will
    examine SSA's preparedness in case of catastrophic failure of the
    existing NCC, including the role of the new data support center in
    North Carolina.

    DETAILS FOR SUBMISSION OF WRITTEN COMMENTS:

        Please Note: Any person(s) and/or organization(s) wishing to submit
    for the hearing record must follow the appropriate link on the hearing
    page of the Committee website and complete the informational forms.
    From the Committee homepage, http://democrats.waysandmeans.house.gov,
    select ``Committee Hearings''. Select the hearing for which you would
    like to submit, and click on the link entitled, ``Click here to provide
    a submission for the record.'' Once you have followed the online
    instructions, complete all informational forms and click ``submit'' on
    the final page. ATTACH your submission as a Word or WordPerfect
    document, in compliance with the formatting requirements listed below,
    by close of business Tuesday, December 29, 2009. Finally, please note
    that due to the change in House mail policy, the U.S. Capitol Police
    will refuse sealed-package deliveries to all House Office Buildings.
    For questions, or if you encounter technical problems, please call
    (202) 225-1721.

    FORMATTING REQUIREMENTS:

        The Committee relies on electronic submissions for printing the
    official hearing record. As always, submissions will be included in the
    record according to the discretion of the Committee. The Committee will
    not alter the content of your submission, but we reserve the right to
    format it according to our guidelines. Any submission provided to the
    Committee by a witness, any supplementary materials submitted for the
    printed record, and any written comments in response to a request for
    written comments must conform to the guidelines listed below. Any
    submission or supplementary item not in compliance with these
    guidelines will not be printed, but will be maintained in the Committee
    files for review and use by the Committee.

        1. All submissions and supplementary materials must be provided in
    Word or WordPerfect format and MUST NOT exceed a total of 10 pages,
    including attachments. Witnesses and submitters are advised that the
    Committee relies on electronic submissions for printing the official
    hearing record.

        2. Copies of whole documents submitted as exhibit material will not
    be accepted for printing. Instead, exhibit material should be
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    these specifications will be maintained in the Committee files for
    review and use by the Committee.

        3. All submissions must include a list of all clients, persons,
    and/or organizations on whose behalf the witness appears. A
    supplemental sheet must accompany each submission listing the name,
    company, address, telephone, and fax numbers of each witness.

        The Committee seeks to make its facilities accessible to persons
    with disabilities. If you are in need of special accommodations, please
    call 202-225-1721 or 202-226-3411 TTD/TTY in advance of the event (four
    business days notice is requested). Questions with regard to special
    accommodation needs in general (including availability of Committee
    materials in alternative formats) may be directed to the Committee as
    noted above.

        Note: All Committee advisories and news releases are available on
    the World Wide Web at http://democrats.waysandmeans.house.gov.

        Chairman TANNER. We will come to order. I am informed that
    Mr. Johnson is entering the premises now. I have been assured--
    we have a slight time problem here--that he has no objection to
    us going ahead. I know Ms. Holmes Norton's Ranking Member, has
    previously told us they would be running a little late.
        We will get started with our opening statements and then by
    that time hopefully Mr. Johnson will arrive.
        This is a joint oversight hearing that we have called. I
    want to welcome warmly Chairwoman Holmes Norton, who is our
    colleague on the Subcommittee on Economic Development, Public
    Buildings and Emergency Management, the House Committee
    overseeing GSA.
        I told her a while ago she may be the only one in Congress
    who is home for Christmas. The rest of us will be in our
    dreams, I am afraid.
        This is a critical project. It is the largest and one of
    the most needed construction projects funded by the American
    Recovery and Reinvestment Act.
        This is the second hearing the Subcommittee on Social
    Security has had concerning the project. I want to welcome
    again Chairwoman Holmes Norton and thank her for all her work
    in this regard.
        We have some real questions. I am not going to read all of
    my opening statement because I want to give this panel an
    opportunity and Ms. Holmes Norton an opportunity to talk about
    their interest in it.
        I want to know why we are in such a time crunch here and
    what has happened. I want to ask about some of the decisions
    that have been made and why they were made as they were.
        We are up against a time line here because in January I am
    told we will have a decision made on a location for the new
    data center.
        I hope we have a productive hearing this morning. I think
    we will.
        [The prepared statement of the Honorable John Tanner
    follows:]
    [GRAPHIC] [TIFF OMITTED] T3031.001

        Ms. Holmes Norton, do you have an opening statement?
        Ms. NORTON. Thank you, Mr. Chairman. Mr. Chairman, I am
    going to simply synopsize my opening remarks and ask that my
    full statement be placed into the record.
        I want only to say how pleased I am to sit with Chairman
    John Tanner and with the Ways and Means Committee in what
    amounts to a partnership between two agencies, General Services
    Administration, which comes under the jurisdiction of my
    Subcommittee, and of course, the Social Security Subcommittee.
        To have what amounts to a discussion of something that
    rarely happens in the Federal Government, where an agency gets
    a direct appropriation to do construction.
        The GSA is the Federal Government's expert construction and
    real estate agency. When it does, the agency which usually does
    not have particular expertise in construction, turns to the
    GSA, and the GSA is pleased that the Recovery Act has provided
    half a billion dollars to the Social Security Administration
    for a new National Computer Center, which we understand is very
    much needed.
        You are in an overloaded facility. You are in an energy
    inefficient facility which is costing the taxpayers needless
    dollars.
        I also want to say how important this large and important
    center is for job creation, which is an important element of
    the stimulus package. We are sure in Maryland where this is to
    be built and in the surrounding area, that part of the mission
    of these funds will be fulfilled.
        I thank you very much, Chairman Tanner. I yield back.
        [The prepared statement of the Honorable Eleanor Holmes
    Norton follows:]

    [GRAPHIC] [TIFF OMITTED] T3031.002

    [GRAPHIC] [TIFF OMITTED] T3031.003

        Chairman TANNER. Thank you, Madam Chairman.
        Mr. Johnson has joined us. Before I recognize him, I would
    like to ask unanimous consent that all opening statements be
    entered in the record in their entirety.
        [The prepared statement of the Honorable Mario Diaz-Balart
    follows:]

    [GRAPHIC] [TIFF OMITTED] T3031.004

        [The prepared statement of the Honorable Betsy Markey
    follows:]

    [GRAPHIC] [TIFF OMITTED] T3031.005

        Chairman TANNER. Mr. Johnson?
        Mr. JOHNSON of Texas. Thank you, Mr. Chairman. I want to
    thank you for holding this important hearing and welcome our
    witnesses.
        Before I turn to the hearing subject, in light of the
    Social Security Subcommittee Chairman's recent retirement
    announcement, I want to take advantage of this opportunity to
    personally acknowledge and thank the Chairman for his long and
    distinguished service to this nation.
        Chairman TANNER. Thank you.
        Mr. JOHNSON of Texas. Mr. Chairman, the American people
    have truly benefitted from your leadership and I am proud to
    call you a good friend.
        Chairman TANNER. Thank you, sir.
        Mr. JOHNSON of Texas. With about a year to go, I still look
    forward to working with you on this Subcommittee and thank you
    for all you have done. God bless you in whatever you try to do
    in the future.
        Turning to the focus of today's hearing, Social Security is
    at a critical crossroads. While this hearing may seem rather
    technical in nature, at heart, it is about Social Security
    being able to operate day in and day out for the American
    people.
        As our population ages, more workers and retirees are
    depending on Social Security's essential benefits and services
    that they paid for throughout their lives with their hard
    earned wages.
        Social Security's ability to deliver those services depends
    on its use of modern, secure technology that they and the
    American people can rely on. Yet Social Security's 30 year old
    National Computer Center that allows the Agency to process
    applications, pay benefits and store secure data for most U.S.
    workers is on its last legs.
        That is why Congress has given Social Security $500 million
    to build a new 21st Century center.
        In the meantime, however, should the current center fail,
    Social Security's recovery plan falls short. Currently, it
    would take a week to restart only some of the system's
    operations, and even then Social Security will only be
    operating at a third of its current level.
        Social Security reports it is making progress on plans to
    fully restore service delivery and protect Americans' personal
    information in the event of a major failure by bringing on line
    its back-up data center in North Carolina early next year.
        I look forward to hearing from Social Security in terms of
    what it is doing to ensure there is minimum disruption in
    service to the American people in the event of a system failure
    and the progress it is making to bring its North Carolina
    center on line.
        Replacing Social Security's outdated National Computer
    Center with a new support center is critical to maintaining and
    improving service delivery.
        Taxpayers are investing $500 million in this project. They
    rightfully deserve to know their investment will produce the
    right state-of-the-art center on time and within budget. It
    should not take seven years as we have been told.
        I thank the witnesses for joining us today and presenting
    their expert testimony and I yield back the balance of my time.
        [The prepared statement of the Honorable Sam Johnson
    follows:]

    [GRAPHIC] [TIFF OMITTED] T3031.006

    [GRAPHIC] [TIFF OMITTED] T3031.007

        Chairman TANNER. Thank you, Mr. Johnson. Without objection,
    we will put all the opening statements in the record in their
    entirety.
        Ms. Brown-Waite, you are recognized.
        Ms. BROWN-WAITE. Thank you very much, Mr. Chairman.
        I come from Florida and I represent a huge number of people
    on Social Security. I do not think I am number one in the
    nation. I think I am number two in the nation with people on
    Social Security. I know on Medicare, I am number one.
        One of the things that I believe taxpayers really bristle
    at is the slowness with which Government responds. The Social
    Security Administration--I know in previous years you have not
    had the funding that you needed. You have the funding now and
    to say it would take seven years to build is a little
    frightening, quite honestly.
        It is a disappointment to taxpayers and to those who have
    paid into Social Security.
        I am looking forward to hearing your testimony on what is
    being done to expedite the process while still being able to
    process those very necessary Social Security payments to
    individuals.
        I know that most people here did not come to hear us speak
    but rather to hear you speak, so with that, Mr. Chairman, I am
    going to yield back the balance of my time.
        Chairman TANNER. Thank you. We will have unanimous consent
    that all of the witnesses' statements be included in the record
    in their entirety, and we will ask the witnesses to please try
    to hold their statements to five minutes.
        Before we begin, I understand, Mr. Gray, you will be
    retiring and this is your last appearance before the
    Subcommittee on Social Security. Thirty-three years. Your
    service has been recognized by the Commissioners, Presidents
    and all of your peers, and we thank you.
        As Mr. Johnson was saying nice things about me, I am
    reminded of the fellow that was lamenting the fact that he
    would not be able to attend his own funeral because there would
    be so many nice things said about him, he said but I am going
    to miss it by three days.
        [Laughter.]
        Chairman TANNER. Mr. Gallagher, you are recognized for five
    minutes, sir.

    STATEMENT OF MICHAEL GALLAGHER, DEPUTY COMMISSIONER, OFFICE OF
       BUDGET, FINANCE AND MANAGEMENT, ACCOMPANIED BY BILL GRAY,
    DEPUTY COMMISSIONER FOR SYSTEMS, SOCIAL SECURITY ADMINISTRATION

        Mr. GALLAGHER. Thank you. Chairman Tanner, Chairwoman
    Holmes Norton, Ranking Members Johnson and Diaz-Balart, and
    Members of the Subcommittees, good morning.
        I am Michael Gallagher, Deputy Commissioner for Social
    Security's Office of Budget, Finance and Management, and the
    Senior Accountable Official for Recovery Act funds.
        I am joined here today by Bill Gray, Deputy Commissioner
    for Systems. I am also pleased to be joined by Pat O'Carroll,
    our Inspector General. We work closely with his office as it
    plays a vital role in ensuring the thoroughness of our decision
    making and actions.
        On behalf of Commissioner Michael J. Astrue, I thank you
    for the opportunity to update you on the progress we have made
    working with the General Services Administration (GSA) in
    replacing our outdated National Computer Center (NCC) using the
    $500 million appropriated to us in the Recovery Act.
        First, we want to thank you for your prompt response after
    we informed you of our need for a new data center. Our new data
    center is needed to ensure that we can continue to perform our
    vital services for the American public.
        We collect benefit, earnings, and demographic information
    on virtually every American. Over the last decade, we have
    moved from a paper-based system to electronic processing of our
    core workloads.
        Currently, over 95 percent of our work is electronic. As
    new benefit applications continue to flood our Agency due to
    the economic downturn and the aging of the baby boomers, we are
    handling an all-time high of over 75 million electronic
    transactions per day. Without technology, we would be unable to
    manage this onslaught of work.
        In order to ensure that we get our technology right, we
    continually examine our needs and the available technology to
    fit those needs, not just today but in the future.
        For example, we have established an advisory committee of
    world-class IT experts from top universities, successful
    companies, and other agencies for the best technical advice to
    guide our future use of technology.
        Internally, we have strengthened the role and functions of
    our Chief Information Officer (CIO) to ensure that we have a
    transparent and long-term vision and a process is in place to
    make use of leading edge technologies.
        One of the three issues you identified for the hearing
    today was our preparedness in case of a catastrophic failure of
    the NCC, including the role of a new supplemental center in
    North Carolina.
        Let me briefly address that issue now. Currently, if our
    NCC went down, we would take our back-up tapes to a commercial
    hot site to recover data. This process would take seven days
    and would provide only about 25 to 30 percent of our capacity
    to run our most critical applications that we use to issue
    Social Security numbers and administer benefits.
        To remedy this, we established our North Carolina facility
    to act as both a co-processing center and as a disaster
    recovery resource. In January 2009, we took possession of the
    North Carolina facility and began equipping it to provide the
    day-to-day operations for about half of our systems.
        In May 2009, the North Carolina facility began limited
    production operations. Earlier this year, the Commissioner
    accelerated the purchase and installation of additional
    hardware and software for North Carolina to support our
    critical claims and data processing systems currently housed in
    the National Computer Center.
        In January 2010, next month, this equipment will be fully
    operational and will recover all of our critical systems from
    the back-up tapes in seven days instead of using the commercial
    hot site.
        By October 2010, we will be able to recover the entire NCC
    production operations in the North Carolina facility. By 2012,
    we will be able to restore all production in 24 hours and not
    seven days. Thus, we have a sound plan to provide continued
    service to the American people in the event of a catastrophic
    failure in the NCC.
        The other two issues identified for the hearing today
    relate to our efforts to construct and equip a new state-of-
    the-art data center on budget and on time with the right site
    and building criteria.
        As these two issues are interrelated, I would like to
    address them together. To begin the process of developing the
    requirements for the new data center, SSA and GSA assembled a
    project team of our most seasoned technical experts, including
    architects, engineers and security and systems experts. We
    placed a senior executive with substantial experience in site
    selection and project management in the lead of our effort.
        The team is adhering to all applicable procurement rules
    and is engaged in a rigorous comprehensive and critical review
    of our needs, business processes and available technology.
        We are following best practices for site selection, data
    center design and construction, as well as green technology and
    security requirements.
        We are consulting with industry experts and our efforts
    have included site visits to leading edge data centers in both
    the public and private sectors.
        In August 2009, GSA solicited expressions of interest to
    obtain a site for the new data center and is reviewing possible
    sites along with SSA.
        Although GSA possesses the legal authority for SSA to lease
    or purchase real estate and award contracts for the building
    construction, our relationship with GSA is one of true
    partnership. Working together, we are pleased to report that we
    are on time and on budget.
        We provide regular updates directly to Congress. GSA and
    SSA meet quarterly with staff members from the Social Security
    Subcommittee to brief them on our progress towards constructing
    this important data center, and we provide written monthly
    updates to Congressional leadership on our progress.
        Finally, Recovery.gov, our own Web site, ensures
    transparency by posting weekly updated information about our
    progress in meeting plan objectives including costs and
    milestones.
        None of this progress would have been possible without the
    support of these two Subcommittees. Thank you. I would be
    pleased to answer any questions.
        [The prepared statement of Michael Gallagher follows:]

                Prepared Statement of Michael Gallagher, Deputy
                Commissioner for Budget, Finance, and Management

        Chairman Tanner, Chairwoman Norton, Ranking Members Johnson and
    Diaz-Balart, and Members of the Subcommittees:
        Good morning. I am Michael Gallagher, Deputy Commissioner for
    Social Security's Office of Budget, Finance, and Management and the
    Senior Accountable Official for Recovery Act funds. I am joined here
    today by Bill Gray, Deputy Commissioner for Systems. On behalf of
    Commissioner Michael J. Astrue, I thank you for the opportunity to
    update you on the progress we have made working with the General
    Services Administration (GSA) in replacing our outdated National
    Computer Center (NCC), using the $500 million appropriated to us in the
    Recovery Act. Our new data center, the National Support Center (NSC),
    will replace our 30-year-old NCC. This new facility will be state-of-
    the-art and incorporate green building technology.
        Before I explain our process for replacing the NCC and the
    safeguards we have established to deal with unexpected cost, delay, and
    the risk of catastrophic failure of the NCC, I will briefly describe
    the role and importance of information technology (IT) to the services
    we provide to the American public. An understanding of the ever-
    increasing role IT plays in our processes will put our needs for robust
    and reliable data repositories in perspective.
        Over the past three years, we have made a concerted effort to
    improve our service delivery by taking advantage of modern technology
    and the Internet, and have made fundamental changes in our use of IT.
    We have taken to heart the recommendations of the 2007 report by the
    National Academy of Sciences to modernize our IT infrastructure. We
    have established an advisory committee of world-class IT experts to
    guide our future use of IT, and we also have strengthened the role and
    functions of our Chief Information Officer (CIO).

    Technology Is Crucial to the Services We Provide

        We maintain benefit, earnings, and demographic information on
    virtually every American. Over the last decade, we have moved from a
    paper-based system to electronic processing of our core workloads.
    Currently, over 95 percent of our work is electronic. As new benefit
    applications continue to flood our agency due to the economic downturn
    and the aging of the baby boomers, we are handling an all-time high of
    over 75 million electronic transactions per day. Without technology, we
    would be unable to manage this onslaught of work. Technology has
    allowed us to provide faster and more accurate service to the American
    public.
        For instance, technology will allow us to fast-track about 140,000
    disability applications this year, and we will award benefits, when
    appropriate, in those cases in a matter of days. Our new electronic
    disability case analysis tool, eCat, is improving the consistency and
    quality of our disability decisions.
        In addition, we maintain claims information in electronic folders,
    which allows us to move work to available resources and respond to
    catastrophic events like Hurricane Katrina. We maintain one of the
    world's largest repositories of imaged medical evidence, storing over
    400 million medical records, to which we add nearly 3 million new
    records each week. We exchange over 2 billion data files annually with
    public and private entities for benefit management and homeland
    security purposes.
        We have embraced the need for more and better on-line services.
    With the launch of our new on-line retirement estimator, benefit
    application, and Medicare low-income subsidy application, we have
    emerged as the Federal Government's leader in on-line services. The
    public rated these three services the highest in the University of
    Michigan's satisfaction surveys. These new on-line service options have
    allowed us to weather the increased workloads due to baby boomers and
    the economic downturn without substantially increasing waiting times.
        We are not resting on our laurels. In 2010, we will introduce a
    Medicare-only on-line application, an improved disability application,
    and the first Federal Government Spanish-language on-line application.
        To help us achieve our IT vision for the future, we have
    established an advisory committee of world-class IT experts to reach
    outside of the agency for the best technical advice, which we use to
    guide our future use of technology. And internally, we have
    strengthened the role and functions of our Chief Information Officer
    (CIO) to ensure that we have a long-term vision, and the processes in
    place to make use of leading edge technologies. Our Office of the Chief
    Information Officer now has functional responsibility for: (1) Open
    Government to ensure transparency in our decisions, improving
    communication with the public, and providing authentication solutions
    that will create additional opportunities over the Internet; (2)
    Investment Management to oversee the agency's IT investment process;
    (3) Innovation to serve as our ``think tank'' for emerging
    technologies; (4) Vision and Strategy, so as to define our technology
    vision and establishing a long-term, architectural plan, and (5)
    Information Security, to develop a policy framework that effectively
    manages risk, and safeguards the personally identifiable information
    with which we are entrusted .
        To protect our sensitive data and continue to enhance our
    electronic services, we have worked with you and the Administration to
    address our need for data centers that support the rapidly expanding
    demand for electronic services. We first apprised you of this need in
    July 2008, and you quickly took action to allow us to replace our aging
    facility that is running out of capacity. We are grateful for your
    prompt response.

    Second Support Center SSC) Necessary for Our Electronic Environment

        For years, we have contracted with a commercial hot site to provide
    us with the ability to recover our data in the event of a disaster. As
    our use of technology has grown, this commercial site has become a less
    viable disaster recovery option. With nearly all of our business
    processes fully electronic, if the NCC were to go down, we would come
    to a near standstill while we recover our systems. If our NCC went down
    tomorrow, we would need to take backup our tapes to the commercial hot
    site in order to recover these data. This process would take 7 days and
    would provide only about 25-30 percent of our capacity to run the
    critical applications that we use to issue Social Security numbers and
    administer benefits. To remedy this issue, we sought a second support
    center, geographically separate from the NCC, now located in North
    Carolina.
        The initial vision of the second support center (SSC) was to serve
    as a co-processing center on a daily basis and back up the NCC in the
    event of a disaster or catastrophic systems failure. In the last year,
    we have accelerated and expanded the role of the SSC to address the
    vulnerabilities of our 30-year old NCC.
        In January 2009, we took possession of the SSC and began equipping
    it to function as a co-processing center that will provide the day-to-
    day operations for about half of our systems. It began production
    operations in May 2009 and now maintains medical images for the
    electronic disability folders and fully-redundant communications
    connections to our offices, to the Internet, and the NCC. Moving these
    workloads to the SSC reduced our disaster exposure from systems failure
    in the NCC. In addition, maintaining medical records at the SSC
    minimizes the down time of our disability systems.
        By 2012, we will synchronize data between both centers every hour.
    In the event of a disaster, we will be able to use these data to
    restore services within 24 hours. These data will be current to within
    one hour prior to the disaster.
        Recognizing that the timeframes for fully synchronizing the two
    centers would still leave us dependent on the commercial hot site in
    the event of a disaster through 2012, the Commissioner decided to
    accelerate the purchase and installation of the additional hardware and
    software necessary to support our critical claims and data processing
    systems housed in the NCC. This equipment will be fully operational by
    January, 2010, and a major protection for the American public, because
    we will be capable of recovering all our critical systems from the
    backup tapes at the SSC, instead of using the commercial hot site.
    While it would still take us 7 days to restore services, once services
    are up and running, we would be able to handle all critical claims and
    data processing workloads. In the near future, we will perform a
    disaster recovery exercise in the SSC to fully test our ability to
    recover completely.
        We are currently adding the facility infrastructure to the SSC to
    support important NCC workloads that are not critical to the payment of
    benefits. These workloads include management information, forecasting,
    cyclical, regional, and end-user developed applications. By October
    2010, we will have the infrastructure needed to recover these services
    in the SSC. With these changes, we will be able to recover the entire
    NCC production operations in the SSC. (Please see the attached chart
    for additional details about our NCC disaster recovery capability
    timeline.)

    National Support Center Project Is on Track

        Our rapidly growing electronic business processes and service
    channels, as well as the tragic events of September 11, 2001,
    underscored the critical need for the SSC. At the same time we decided
    to pursue the SSC, we continued to make improvements to the NCC to deal
    with our growing workloads.
        The NCC was designed over 30 years ago. Technology has changed
    radically since then, and the NCC's infrastructure, including the
    building's cooling, electrical, and fire suppression systems, is not
    sufficient to fully accommodate current technologies. As a result, the
    infrastructure systems will not be capable of accommodating the
    information technology necessary to handle our increasing volumes of
    work, our new and expanded responsibilities, and our new ways of doing
    business. Our transition to full electronic processing of our core
    workloads and the growth of electronic service delivery over the last
    decade resulted in a dramatic increase in our need for data storage and
    network capacity. While we have modernized our hardware, we are facing
    finite limitations on our ability to distribute electrical power to our
    servers and mainframes.
        Updated servers and mainframes have significant electrical
    requirements. Until recently, each server required only one power
    supply to operate; now, a server requires two to four power supplies to
    function, which the NCC can accommodate at this time. The current
    facility's electrical panels will not accommodate the more than four
    power supplies that we will need to run servers in the future.
        We have undertaken important steps to continue the services of the
    current facility until the new data center is operating. As the NCC has
    aged, we have continuously upgraded and repaired structural,
    electrical, and data processing capabilities. Incrementally upgrading a
    facility of this kind is a best industry practice for maintaining
    facilities beyond their life cycle. We must incrementally repair these
    infrastructure systems because we cannot totally replace them in the
    existing NCC. To replace them, we would have to shut down the building
    completely for an extended period of weeks or months. Such a shutdown
    would result in an unacceptably long interruption of service to the
    public.
        We considered the possibility of renovating the existing building;
    however, renovations of this magnitude would require us to vacate the
    building and design and lease a facility to temporarily house the data
    and employees. The expense of doing this would be almost as costly as
    simply building a new, up-to-date data center and would create a risk
    of a major interruption in service and require relocation twice,
    incurring significant costs.
        Even if we could overcome the obstacles to repair and upgrade the
    NCC and its infrastructure, we would still have a building designed
    around a 1970s mainframe environment. In the seventies, redundant
    electrical, heating, and cooling systems were not state-of-the-art
    requirements for data centers. In addition, fire suppression systems
    were not designed to cover an entire floor. In short, the current
    facility will not be able to meet the industry standards for data
    centers in the future.
        In 2008, it was determined that a replacement facility was the most
    viable option and began the planning efforts with GSA. SSA cannot lease
    or purchase real estate, so we rely on GSA; and our relationship is one
    of partnership. GSA offers its expertise in real estate and building
    construction, and we offer our expertise in data center design and
    operations. Specifically, we work closely and constructively with GSA
    and its expert contractors throughout every stage of this process. Our
    most seasoned real estate professionals work side by side with their
    GSA counterparts. I assure you that both we and GSA are taking all
    appropriate steps to ensure that this partnership is successful.
        Our GSA/SSA project team includes architects, electrical engineers,
    mechanical engineers, fire protection engineers, project managers,
    occupational safety and industrial hygiene experts, physical security
    experts, and network and IT engineers with knowledge and experience in
    our IT program requirements. We have great confidence in the site
    criteria and Program of Requirements that the team developed. The team
    is adhering to all applicable procurement rules and is following the
    best practices for data center construction.
        We and GSA are closely monitoring the planning and construction of
    the NSC to ensure mitigation of any unexpected challenges, and we are
    holding our executives and staff accountable for achieving the goals of
    this initiative. For example, as the Senior Accountable Official, I
    oversee and monitor overall progress. I also function as a liaison for
    the SSA executives who have lead responsibility for the planning and
    the execution of the project.
        We hold periodic meetings at both the executive and staff levels to
    discuss implementation status and any other issues that may arise. We
    also hold regular meetings internally and with GSA executives to review
    the status of the project. We have established performance measure
    targets that we will monitor in these status meetings.
        The joint project team is thoroughly analyzing our detailed list of
    technical specifications for all aspects of the NSC project to
    efficiently use taxpayers' dollars and minimize cost and schedule
    overruns. We have consulted with industry experts, such as Uptime
    Institute, to ensure we are implementing the most current data center
    standards. We have toured several existing data centers to learn about
    best practices.
        Our requirements for the new facility site are based on our
    business process and technology needs, and the security standards that
    are necessary given the sensitive data we maintain. In August 2009, GSA
    requested expressions of interest using the Federal Business
    Opportunities Web site. The notice contained mandatory requirements,
    such as a minimum of 35 acres suitable for development within 40 miles
    of our headquarters. It also included requirements to avoid increased
    project costs or a delayed schedule that could be caused by landfills,
    hazardous waste, or soil or water contamination on or near the site.
    The site cannot be located within 100 or 500 year flood plain and must
    have reasonable access to utilities, including fiber optic, power and
    water.
        After conducting research and consulting industry experts, we
    determined that the best practice to ensure continuous service to the
    public when we eventually migrate from the NCC to the new center would
    be to bring the systems in the NSC online incrementally. That would
    allow us to test their stability while continuing to operate the
    systems in the NCC in case something did not work properly. For
    example, the computer processes involved in adjudicating a benefit
    application actually ``talk'' to each other to verify and update the
    applicant's personal information on multiple systems. In order to
    properly maintain this interactivity, we need to use software that
    enables the synchronization of data bases with responsive systems
    performance. Available technology limits the separation of the
    transitioning systems to less than 100 kilometers. A site located
    within 40 miles of our headquarters assures us a lower risk transition
    that will not disrupt service to the public.
        The project team is currently evaluating the sites.
        GSA is also leading the development of the detailed Program of
    Requirements for building the NSC. GSA's contractor, Jacobs, is
    developing these requirements through interviews with technical
    experts. While this process is lengthy, a comprehensive and systematic
    approach to long-term planning will provide us with a facility that
    will meet our needs.

    Conclusion

        The SSC will allow us to recover all essential functions and
    systems associated with our primary mission while we make steady
    progress toward having our NSC fully operational in 2015. This state-of
    the-art facility will help us maintain the service the American public
    expects.
        None of this progress would have been possible without the support
    of these two subcommittees. We appreciate your advice and input as we
    work together to improve our computer systems and security. Again, we
    thank you for the Recovery Act funding and for your continued support
    for timely, adequate, and sustained funding.
        Chairman TANNER. Thank you very much.
        Mr. Hewell, you are recognized.

     STATEMENT OF ROB HEWELL, REGIONAL COMMISSIONER, MID-ATLANTIC
          REGION, PUBLIC BUILDINGS SERVICE, GENERAL SERVICES
               ADMINISTRATION, PHILADELPHIA, PENNSYLVANIA

        Mr. HEWELL. Thank you, Chairman Tanner. Good morning,
    Chairman, Chairwoman Holmes Norton, Ranking Members Johnson and
    Diaz-Balart, and members of the Subcommittees.
        My name is Rob Hewell. I am the Regional Commissioner of
    the General Services Administration's Public Buildings Service
    in the Mid-Atlantic Region.
        I am pleased to have the opportunity today to discuss GSA's
    progress on behalf of the Social Security Administration in the
    delivery of the new Social Security Administration's national
    support center.
        As part of the American Recovery and Reinvestment Act of
    2009, SSA received a $500 million appropriation for a new
    national support center to replace the existing National
    Computer Center in Woodlawn.
        SSA turned to GSA for assistance in locating, designing and
    building this new national support center which will meet the
    Agency's requirement for redundancy and expansion needs for
    long-term needs.
        Based on initial capacity studies, we are planning to
    construct a facility of approximately 300,000 gross square feet
    that will include data, office and warehouse space. We are
    using a multi-phased approach to the construction of the
    facility ensuring that site and design criteria development are
    concurrent and interrelated.
        With respect to site selection, GSA has committed to
    researching, evaluating and selecting a site that can best
    serve the interests of the Federal Government, the end users,
    and the community. There are many factors associated with
    selecting and acquiring a site for Federal construction and a
    data center creates additional challenges.
        In August 2009, GSA requested expressions of interest from
    land owners and authorized agents through a FedBizOpps notice.
    We also contacted local economic development and planning
    groups regarding our search, which produced over 150 potential
    sites.
        These locations were screened against a number of mandatory
    criteria that included land area and geography, proximity to
    SSA headquarters and roadway access, available utility
    infrastructure, cultural and historic resources, proximity to
    security hazards, and proximity to environmental hazards or
    concerns. These sites were then narrowed down based on further
    evaluation of proximity to power and site characteristics.
        Our next steps include a more detailed analysis of
    potential locations to closely examine utility and fiber
    availability, security, environmental impact, development
    costs, and potential schedule impacts. The site selection
    remains on schedule for purchase in March 2010.
        With respect to requirements development, GSA is currently
    working with Jacobs Facilities to conduct a full analysis of
    the SSA data center building and housing plans.
        In July 2009, GSA brought EMC Consultants on board to
    assist in developing a design for the building that is
    versatile and flexible enough to serve SSA information
    technology needs for the long term.
        EMC has developed a growth model for equipment requirements
    through 2033, which takes into account both SSA historical data
    as well as industry trends toward newer equipment technology.
    SSA concurred on this growth model in October 2009. We are now
    working collaboratively with both EMC and Jacobs to develop a
    space power cooling and data center master plan.
        The program of requirements is progressing toward a 50
    percent report at the end of December 2009. Once the location
    is selected, site specific design directives will be
    incorporated into the program of requirements. Program of
    requirements completion is scheduled for August 2010.
        Once we acquire the site, we will begin developing the
    solicitation for a design/build contract based on the finalized
    program of requirements. At the same time, we will continue
    developing the design criteria specific to the selected
    location.
        We will then procure a contractor to both design and build
    the facility. We anticipate contract award for design and
    construction of the new national support center in March 2011.
    Substantial construction completion is scheduled for October
    2013, at which time the building will be turned over to SSA for
    IT migration.
        This is the same schedule we provided to the Committee back
    in April and included in our recovery program plan, and we are
    still confident we can deliver on schedule.
        There are a number of steps we are taking to minimize risks
    throughout this process. We have toured established data
    centers to identify industry best practices.
        In July 2009, the project team participated in a charrette
    facilitated by Lawrence Berkley Laboratories that focused on
    energy optimization techniques in data center design.
        Environmental screening of possible sites is helping us to
    identify potential impacts early in the process.
        Our partnership with Jacobs and EMC are ensuring that we
    will provide a flexible facility design capable of
    accommodating expansion, mission related changes, and
    advancements in technology.
        GSA is moving swiftly to meet SSA's national support center
    requirements on schedule, within budget, and with careful
    consideration given our responsibility and accountability to
    the American taxpayers.
        Along with SSA, we are happy to provide quarterly briefings
    to these Subcommittees as the project proceeds, and we are
    committed to working with you in the successful delivery of the
    national support center as part of the Recovery Act program.
        Chairman Tanner, Chairwoman Holmes Norton, Ranking Members
    Johnson and Diaz-Balart, Members of the Subcommittees, this
    concludes my statement. I will be pleased to answer any
    questions you may have.
        [The prepared statement of Hewell follows:]

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        [GRAPHIC] [TIFF OMITTED] T3031.011

        Chairman TANNER. Thank you very much.
        Mr. Inspector General, glad to have you back. You are
    recognized.

      STATEMENT OF PATRICK P. O'CARROLL, JR., INSPECTOR GENERAL,
                     SOCIAL SECURITY ADMINISTRATION

        Mr. O'CARROLL. Good morning, Mr. Chairman, Madam
    Chairwoman, Mr. Johnson, and members of both Subcommittees.
        Thank you for requesting that I testify today and for your
    interest in this critical issue.
        The National Computer Center houses benefit data for SSA's
    56 million beneficiaries and earnings data on every American.
    The importance of the NCC to SSA's operations and many other
    facets of American life, such as applying for a driver's
    license, cannot be overstated.
        A failure of the NCC would have devastating consequences.
    Unfortunately, the NCC is now 30 years old, and is rapidly
    approaching obsolescence.
        You recognized the need for replacement when you provided
    SSA with $500 million for this purpose in the American Recovery
    and Reinvestment Act.
        The Office of the Inspector General is committed to
    ensuring that SSA uses these funds wisely. Replacement of the
    NCC must be accomplished based on sound decision making and
    without unnecessary delays.
        SSA's experience in constructing the Durham Support Center,
    a co-processing site for the NCC, revealed the challenges that
    can cause delays. It took six years to take possession of the
    DSC, and the facility is still not fully functional.
        Replacing the NCC itself began in earnest in 2007 with a
    Lockheed Martin study completed in 2008. Lockheed Martin
    identified several NCC replacement options, but ultimately
    recommended that SSA construct a new NCC offsite.
        Based on this, it is our understanding that SSA plans to go
    forward with an offsite NCC within 40 miles of the main SSA
    campus, to maximize data transmission speed and limit employee
    commutes.
        SSA next asked GSA for a more detailed cost estimate, then
    engaged Booz Allen Hamilton to conduct an alternative analysis.
    Booz Allen recommended against locating the NCC on the SSA
    campus for reasons ranging from outages during construction to
    higher operational and maintenance costs than any other option.
        Thus, it has been consistently suggested that the off-
    campus option is the more efficient approach. Unfortunately,
    the OIG did not initially receive the information and
    documentation it needed to conduct an independent analysis of
    this issue.
        More recently, we obtained additional information from SSA
    and retained a contractor, Strategic e-Business Solutions or
    SeBS, which conducted a review of SSA's site selection process
    on our behalf. They found that SSA, working with GSA, had
    developed ``a highly sophisticated set of selection criteria
    which was used to evaluate general areas of consideration and
    prospective individual properties.''
        However, they also found that questions remained concerning
    the process SSA used in creating a short list of priorities and
    properties.
        They recommended that SSA look more closely at the
    following factors: prospective energy costs, better methodology
    documentation, and early involvement of power providers and
    telcom providers.
        After SeBS completed this report, we asked that they take a
    closer look at the on-campus versus off-campus dichotomy. We
    were informed yesterday that they agree with two of our most
    significant concerns.
        First, there appears to have been confusion starting with
    the Lockheed Martin report as to purported six-year delays for
    land acquisition and zoning issues if an on-campus site was
    selected.
        While there may be some community-based issues if this
    option is chosen, there are no actual zoning issues and delays
    should be short-lived.
        Second, SeBS shares our concern that the comparison of the
    on-campus and off-campus options may not fully take into
    account how different each project is from the other. Comparing
    these two undertakings is much like comparing apples to
    oranges, and we remain unconvinced that many differences have
    been fully taken into account.
        The Office of the Inspector General looks forward to
    continuing to monitor SSA's efforts to use sound planning and
    due care in replacing the NCC. We will keep these Subcommittees
    fully informed of SSA's progress.
        I thank you again for your invitation to be here today, and
    I will be happy to answer any questions.
        Chairman TANNER. Thank you all for again being here and for
    testifying. We do have some questions.
        How did we arrive at this urgency that we are told that
    exists and that I believe exists where the time line is this
    tight? The North Carolina facility, I am told, still cannot
    function as a back-up for any sort of construction.
        We have been given a whole menu of reasons why the on-
    campus site is not acceptable, some of which changed.
        I must tell you I am upset about the situation we find
    ourselves in here. I want somebody to explain exactly where we
    are and how we got here and why we are having so much trouble
    when even 48 hours ago we got another reason why we cannot
    build on-campus.
        This thing is very, very loose in my opinion in terms of
    the way it is being handled. Who wants to try to respond? Mr.
    Gallagher?
        Mr. GALLAGHER. Yes, sir. I think you raised a couple of
    different questions. I will try to take them in order.
        We began our deliberations on replacing the National
    Computer Center back in 2007, and that resulted in a report
    that Mr. O'Carroll referenced concluding that the NCC is a 30
    year old building and needed to be replaced.
        We began discussions with GSA at that point and started to
    engage in the normal process for appropriations where we would
    get the prospectus and such working with GSA to replace that
    building, and I believe GSA actually had contracted with a firm
    called EYP to take a look at a possible lease issue, looking at
    various alternatives.
        We did receive, as Mr. O'Carroll said, two Booz Allen
    Hamilton reports. Then the passage of the stimulus bill gave us
    the $500 million, and we started in earnest to assemble the
    team to get things started, and on a rather aggressive
    schedule.
        As somebody mentioned before, we expect that later next
    month we actually will select a site for the National Support
    Center (NSC). In March 2010, we will purchase the site. In
    March of 2011, we will start the design and build construction.
        That alone, the design/build approach will help to
    accelerate the timeliness in the sense that there are pieces of
    it that we can start to build while also doing some of the
    design work. By October 2011, we will start the general
    construction on it. By October of 2013, we will be
    substantially complete on the construction of the facility.
        By November 2013, we will finish up the final commissioning
    and that will be completed in January 2014, and then the
    transfer of data from the current National Computer Center to
    the new facility will be completed in or about July of 2015.
        I believe we are on a rapid schedule to get that done.
        Chairman TANNER. I am told that the existing NCC is
    supposed to reach its electrical capacity in 2013, and you say
    2015 is when we will be functional. What about that 24 month
    gap?
        Mr. GALLAGHER. Sir, let me address that. Actually as early
    as the Lockheed Martin report, we looked at the fact that we
    were at the greatest risk starting about 2012 and going
    forward. We saw actually a couple of different contemporaneous
    items to mitigate that risk while we are building the new
    National Support Center.
        One of our biggest issues that we identified was our
    uninterrupted power system. That is we need to be able to take
    the wholesale power we get from the electric company and clean
    it up so we can go ahead through generators and switching gears
    and to make it into useable electricity.
        In addition, we recognize that the current NCC contains old
    pieces of equipment and that we were running out of spare
    parts, and our maintenance contract was going to end at the end
    of 2012.
        One of the things we did is we bought all the spare parts
    we could to have them on hand. We were able to extend the
    maintenance contract through 2015 so we could keep that going.
    We actually did replace a number of feeder cables and some of
    the panels that actually handle the transfer of cables up to
    the data center area so we would have that in place.
        We did some other things as far as updating and
    retrofitting some of the other electrical cables so we could
    mitigate the risk we would have, so we would have confidence
    that we would be able to get to that 2015 date.
        I would say that the North Carolina facility also plays a
    part in that mitigation in the sense that it will be up and
    running in phases to take on additional workloads, to take that
    off the campus location, so we could reduce the ever increasing
    demand for power, we could actually lessen that, and that was
    part of risk mitigation as well.
        That combination of North Carolina being up and taking on
    some of those workloads plus some of the continual maintenance
    that we were doing to get things updated would help us mitigate
    that risk.
        Chairman TANNER. I want to give the other members of the
    panel time. Tell me again how you went about determining that
    an on-campus site was not feasible. We have been told various
    things for over a year now it seems. In fact, we were told that
    at one time there was a zoning problem out there, which is
    almost ludicrous.
        Where are we on that? Why?
        Mr. GALLAGHER. With respect to the campus, we looked at the
    campus and actually made a presentation to the Commissioner
    back on or about the first of August 2008 on various possible
    sites. He actually pushed back on us about not putting it on-
    campus. We talked about the areas that we were looking at for
    the campus.
        Our view was that the topography and the actual envelope
    did not present itself as a good site for it. There were two
    pieces that really led to that.
        One, sir, we made an error on the zoning issue. We had
    deliberated that it could take up to 72 months for zoning. That
    was set forth in the contract reports. That was an error. We
    should not have relied upon a 72 month period for zoning.
        Zoning and land use actually is part of the study that will
    go on as far as an assessment on it, but we did make a mistake
    there.
        The other issue we had is that we looked at the building
    envelope. Our thought that the best place based upon the
    topography was a place on the large parking lot that houses
    thousands of spaces for our employees. In order to do that, we
    thought we would have to build a parking garage before we would
    be able to begin digging for the computer center. That could
    take 18 to 24 months.
        It was our view that this was a project that needed to be
    shovel ready, that we needed to act with all the speed we
    could. We wanted to eliminate risk to any delay in getting that
    built, so we made the recommendation to the Commissioner and he
    did push back on us, so our initial thought back in 2008 was
    the campus was not the right place for it.
        Last month, as a result of some questions from the
    Committee, GSA and SSA revisited that issue, and GSA took a
    thorough look, re-look, at the viability of the campus for that
    location. I heard as well as I think some of your Committee
    staffers heard this past Friday about their review of the
    usefulness of the campus location.
        With your permission, perhaps Mr. Hewell could address the
    assessment of that.
        Chairman TANNER. I am a business guy. If I was in business
    and I had a campus like this, I think I could figure out how to
    utilize it. Mr. Hewell?
        Mr. HEWELL. It is difficult to figure out where to start.
    There have been a number of studies done on this campus and on
    this project. They have been used in different ways. Some of
    the early ones were intended for a lease solution which
    produces different issues than a federally owned solution.
        Relying on contractors sometimes produces impressions that
    are wrong such as the zoning one. There is clearly not a zoning
    issue on federally owned land.
        Chairman TANNER. Who was the contractor? This is almost
    ludicrous as a reason for not proceeding because of a zoning
    problem.
        Mr. HEWELL. I bring it up just to say that it is clear
    mistakes have been made. We went back after our last meeting
    with the Committee and we were asked how the existing site
    compares to the site criteria that we were using for the site
    selection.
        We went back and took the campus and ran it through the
    same process that we have used to evaluate over 150 sites. We
    briefed Committee staff last week on this for four or five
    hours, and I do not propose to take that much time today. I
    would just like to offer you sort of a summary of it.
        Our conclusions--we did a number of things. We looked at
    the topography of the site, the land use around the site, the
    incoming electrical service, the needs for other things, the
    associated spaces including parking associated with the data
    center.
        We did several test fits in different places on the site to
    see how well the data center would fit there. It is incorrect
    to say that the data center cannot be built on the existing
    campus. It clearly can be. In our opinion, it is not the best
    solution.
        I think there is a presumption that using the existing
    campus would save so much money in land costs that we should do
    it for cost reasons. There is no identifiable cost advantage to
    being on the campus. It will probably cost more because of the
    need to create parking garages or structured parking of another
    kind, which will actually cost more than the cost of acquiring
    a site.
        There is clearly an increased complexity both in design and
    in construction that will add to the schedule. It is much
    easier to design and build a project on a green field site that
    is leveled, that does not have the surrounding complications of
    the campus.
        There are topography issues on the site that will clearly
    limit what we can do. It is not impossible to build it there.
    It will be quicker and cheaper to build it somewhere else.
        Chairman TANNER. How many cars are you talking about in
    this parking garage?
        Mr. HEWELL. Offhand, I do not know, if you will give me
    just a second, I can get you an answer.
        Chairman TANNER. You are telling me a parking garage is the
    problem? They built parking garages for every football and
    baseball stadium in this country. They built a big stadium
    right beside the old one in Atlanta. You are telling me you
    cannot build because it is so expensive to build a parking
    garage out there that you have to move?
        Mr. HEWELL. No. It is not impossible to build. It will be
    more expensive to build those garages than it will be to----
        Chairman TANNER. How many cars are you talking about?
        Mr. HEWELL. To do surface parking on a flat site.
        Chairman TANNER. How many cars are you talking about?
        Mr. HEWELL. Just one second. The existing NCC has 760
    parking spaces. The NSC will require an additional 300. That is
    over 1,000 parking spaces. The construction cost for that is
    roughly $20,000 per square foot--per space.
        Chairman TANNER. Thank you. Mr. O'Carroll, would you
    comment, please?
        Mr. O'CARROLL. Yes, Mr. Chairman. Our biggest concern has
    been the documentation. Part of the job of an Inspector General
    is to be able to examine documents and then provide feedback.
        This has been a fairly confusing issue over the last few
    months because we have gotten information from four different
    contractors with costs ranging anywhere from about $200 million
    to $800 million. We are talking buildings without computers,
    buildings with computers, et cetera.
        It has been very confusing for us to sort through these
    apples and oranges estimates.
        What we are looking at is the decision process that was
    made first on not considering the current NCC property and
    instead looking at other properties. We have been trying to
    compile that information.
        We have hired a contractor, SeBS, who has been requesting
    these documents. It has been enlightening, as they are asking
    for these different documents, and we are getting some
    documents months after decisions are made. We are sorting
    through them all right now.
        We are really just waiting to get our report back from the
    contractor. We got an initial report back yesterday with some
    preliminary information. I have to say our contractor at this
    point has found the offsite solution could be viable.
        We are looking very closely at that. We are still skeptical
    and we are still waiting for all the documents.
        Chairman TANNER. One final thing. Mr. Hewell, could you
    give us the analysis for the record that you have gone through
    of this parking garage and the on and off-campus proposals? Do
    you have one? I assume you have some sort of analysis about why
    one is better than another. Can you submit that for the record?
        Mr. HEWELL. The cost analysis is fairly straightforward.
    The cost of acquiring land, our current estimate for that is
    about $12 million. The cost of structured parking for the
    number of spaces that we need to deal with would be a little
    bit more than twice that.
        Chairman TANNER. Do you have an analysis of that we could
    see, or are you just telling me?
        Mr. HEWELL. We will prepare it for you, sir.
        Chairman TANNER. All right. Thank you. Ms. Holmes Norton,
    you are recognized.
        Ms. NORTON. Mr. Chairman, first I want to say I thank you
    for your line of questions because I am perplexed, and Mr.
    Hewell, you know there is a strong presumption of building on
    Government owned land, a commonsense presumption, it is a
    presumption that can be overcome but not very easily.
        Your Agency is about to build on the old St. Elizabeth
    campus. It is not an optimum site. It is not in the middle of
    Washington. It is not close to the Capitol. Guess what? The
    Government of the United States owns that land. Uncle Sam owns
    this land. We are going to build on land we own.
        I listened carefully to Chairman Tanner's questions for how
    you overcame the presumption, a very strong presumption, in
    favor of building on your own land with by the way considerable
    land, I understand, at the site, rather than as you seem to
    believe should happen, going and buying land to build near the
    site.
        I think you have to explain to us and to the Ways and Means
    Committee why this is a rare instance where given existing
    land, where there is room to build, you are asking the
    taxpayers to buy you some more land and then build a new
    facility.
        Mr. HEWELL. Thank you for the question. There were several
    reasons why we came to the conclusion that a new site would be
    preferable to building on the existing campus site.
        Ms. NORTON. Excuse me, I have to stop you there. It is
    preferable for me to build a house on land I do not own because
    I like that land, because I could do it more easily.
        I want to know given all of the considerations,
    particularly the strong consideration of existing federally
    owned land, how you overcame that. Not what is preferable. It
    might be preferable to build it anywhere, but comparing
    building on-site, on land you owned, how did you overcome the
    presumption that you were well aware of, Mr. Hewell, from your
    GSA experience, how did you overcome that presumption?
        We spend our lives preferring one thing over another, but
    that it was essential to build off site and to acquire land in
    order to do so.
        Mr. HEWELL. The conclusions that we came to, let me just
    run down those really quickly. Any savings in land cost is
    overcome by additional project costs created by building on the
    site.
        Ms. NORTON. Mr. Chairman, I am going to ask that a detailed
    analysis based upon those conclusions be given to this
    Committee and to our Subcommittee. I have seen no analysis, Mr.
    Chairman, to indicate that it flies in the face of the usual
    situation where the opposite is the case.
        I am aware of the topography there. I am also aware that
    GSA knows how to build on all kinds of topography. Look at what
    you are going to be doing at the old St. Elizabeth's site where
    the topography is anything but made to be built upon.
        Mr. HEWELL. We are not contending that it is impossible to
    do it. We are contending that it will cost more and take
    longer.
        Ms. NORTON. I will end this line of questioning by saying
    if a detailed analysis----
        Mr. HEWELL. We will be happy to provide that analysis.
        Ms. NORTON. Some of the issues that arise in building would
    certainly not arise if you built on the site. Public
    transportation. I take it public transportation is near a site
    you are considering?
        Mr. HEWELL. There is limited public transportation at the
    majority of sites that were offered to us.
        Ms. NORTON. I have a GSA estimate here of $396 million. Why
    is that so much higher than the Lockheed Martin estimate of
    $172 million?
        Mr. HEWELL. I am sorry, Madam Chairman. I do not
    understand.
        Ms. NORTON. We understand that GSA estimated a cost of $396
    million and Lockheed Martin's study was very much lower.
        Mr. HEWELL. The Lockheed Martin study was preliminary. Ours
    is much later and much more comprehensive.
        Ms. NORTON. What LEED rating will this building have?
        Mr. HEWELL. We are seeking a minimum of a silver rating.
        Ms. NORTON. That is good. What about the old discussion, if
    you really want to get into controversy when you are building,
    you mess with the delineated area. Is that straightened out, so
    that we are not carving out part of what would be a natural
    area and saying wherever we build, that area cannot be
    considered the old redlining technique that the GSA is famous
    for?
        Mr. HEWELL. As far as we know, the delineated area is a 40-
    mile radius of the campus.
        Ms. NORTON. On our own Subcommittee, we have been doing
    hearings in order to see whether or not one of the major points
    of the money you have received--you probably would not have
    gotten this money except for the collapse of the economy and
    the need to stimulate jobs.
        When are we going to get to the point where you can report
    to those committees that jobs are in fact being created, are
    they being created? You say you are on time and on budget. How
    much money has been spent and obligated?
        Mr. HEWELL. I would have to get back on you on to how much
    money has been spent to date. It has been mostly on the cost of
    doing studies and doing planning.
        Ms. NORTON. You see the problem, the administration and
    this Committee is going to be held accountable for whether or
    not there will be jobs produced.
        What does ``on time, on budget'' mean? When are you going
    to be making jobs?
        Mr. HEWELL. The substantial portion of the jobs that are
    created by this project will begin on or around October 2011
    with the start of general construction. There will be obviously
    other people employed before that in the design process, but
    the numbers will be much smaller than the construction.
        Ms. NORTON. When will the building be completed?
        Mr. HEWELL. From our perspective, before IT migration, it
    will be completed by October 2013.
        Ms. NORTON. Finally, the design/build option, you need to
    explain why GSA has chosen the design/build option as opposed
    to the advantages and disadvantages as opposed to other ways
    that GSA builds, because GSA does not usually build/design
    build.
        Mr. HEWELL. The primary reason for using design/build in
    this case is that----
        Ms. NORTON. Explain what ``design/build'' is.
        Mr. HEWELL. I am sorry. In the traditional construction
    project, we contract for design separately. We get a complete
    design and then we compete that design for construction.
        In a design/build project, we hire one contractor to do
    both the design and the construction. It saves us time in
    procurement because we do one procurement instead of two, and
    in general, because the contractor can start construction
    before design is complete, we often find the design/build
    produces a shorter schedule. That was the primary reason for
    using it in this case.
        Ms. NORTON. That is certainly understandable.
        Finally, the GSA isn't very good in my experience in
    keeping public controversy from developing around projects.
    Have you a program of public outreach so as to avoid public
    controversy?
        Mr. HEWELL. Absolutely. One of the criteria that we are
    using in the site selection is to try and find a site that we
    believe would not cause much public disruption in order to make
    the environmental process easier and quicker.
        Ms. NORTON. We certainly know on-campus would not cause
    much public disruption or much public controversy, since you
    would be building on your own land, sir.
        Mr. HEWELL. In order to build on our land, there are some
    private properties that are sprinkled around the campus that
    would probably have to be acquired.
        Ms. NORTON. What does that mean? You are talking about you
    would have to build on land you do not own as well?
        Mr. HEWELL. Most of the potential test fits of the facility
    would require the acquisition of individual homesteads that are
    sprinkled throughout the eastern side of the campus. There
    would be some issues with respect to acquisition.
        Ms. NORTON. Again, as part of your analysis, I think you
    need to submit that analysis to the Chairman and to our
    Subcommittee.
        Mr. HEWELL. We will be happy to do that.
        Ms. NORTON. Thank you very much, Mr. Chairman.
        Chairman TANNER. Thank you. Mr. Johnson. Mr. Diaz-Balart,
    welcome. We have asked unanimous consent that any opening
    statements be submitted to the record in their entirety.
        Mr. Johnson.
        Mr. JOHNSON of Texas. Thank you, Mr. Chairman.
        You know, following that line of questions, what would be
    the cost of condemning or buying those houses that are private
    on that property as compared to what you are doing now or
    thinking about doing?
        Mr. HEWELL. I do not know what the cost of acquiring
    those----
        Mr. JOHNSON of Texas. You have not looked at it yet; is
    that correct?
        Mr. HEWELL. Yes, we would need to do appraisals and that
    kind of thing.
        Mr. JOHNSON of Texas. Tell me who makes the final decision
    regarding the location. Is it GSA, SSA, OMB or all three?
        Mr. HEWELL. The correct answer is probably all three. The
    project team, which is primarily both SSA and GSA, will come to
    a conclusion and make a recommendation to the Commissioner of
    SSA who will, I guess, do thumb's up or thumb's down, and if it
    is thumb's up, he would report that decision to OMB and
    ultimately to Congress.
        I have been asked that question before and I do not
    actually know the answer.
        Mr. JOHNSON of Texas. If you have been asked the question
    before, you ought to go find out the answer.
        Mr. HEWELL. The authorities seem to be multiple.
        Mr. JOHNSON of Texas. Then you need to deal with all those
    agencies; is that true?
        Mr. HEWELL. Yes, that is true.
        Mr. JOHNSON of Texas. Would it cost less to buy up those
    houses and put the building on that property than what you are
    talking about?
        Mr. HEWELL. The site acquisition costs for those properties
    at the existing campus would I am sure be less than the cost of
    acquiring a new site.
        Mr. JOHNSON of Texas. That is interesting.
        Mr. HEWELL. The cost of developing the existing campus for
    this project would exceed the cost of developing that in an
    open green field site with flat topography.
        Mr. JOHNSON of Texas. I am not sure that we can guarantee
    that thing will be built on time and on budget. Can you
    guarantee that?
        Mr. HEWELL. We are very confident about that, sir.
        Mr. JOHNSON of Texas. Are you?
        Mr. HEWELL. Yes.
        Mr. JOHNSON of Texas. We have not been able to do that in
    the past.
        Mr. HEWELL. If I may speak for my regional office, sir, we
    have a long history of being on time and on budget. We are very
    proud of it.
        Mr. JOHNSON of Texas. That is why you stick it way out
    there to 2015, you can make that.
        Mr. Gallagher, you say next October you will have the
    infrastructure in Durham to recover and run the entire
    operations through the computer center. Why did you decide to
    build a new computer center instead of using Durham as a
    primary site?
        Mr. GRAY. Mr. Johnson, maybe I can answer that for you. The
    reason that we cannot just move our workloads to Durham while
    we are building a new data center to replace our current one is
    that if we did that, we would be in exactly the same situation
    that we are in today where, if we had a disaster, we would have
    to back-up at our commercial hot site, which is inadequate for
    a disaster.
        If we can maintain two data centers throughout this entire
    effort, we can make sure that if we have a disaster, we can
    recover all of our workloads at either one.
        Mr. JOHNSON of Texas. I understand that idea. Why can you
    not make Durham the primary center and the one up here a back-
    up?
        Mr. GRAY. Because neither one is a primary and a back-up.
    Both of them are co-processing centers today. Half of our
    workloads run at Durham. Half of our workloads run in the
    National Computer Center. In the event of a disaster, either
    one would take over for the other.
        Mr. JOHNSON of Texas. Is the Durham center modernized? It
    doesn't use COBOL; is that true?
        Mr. GRAY. Yes, sir. It is modernized. The workload that is
    there is on modern computers. There is some code that we run
    that is COBOL code that runs both in the National Computer
    Center and in North Carolina.
        Mr. JOHNSON of Texas. Why has it taken us 13 years or more
    to get off that COBOL system?
        Mr. GRAY. Well, first of all, the issue here is that you
    could just hire someone to convert that COBOL code----
        Mr. JOHNSON of Texas. I think Microsoft could do it
    overnight.
        Mr. GRAY. I do not know if they could do it overnight but
    certainly they could do it much faster. The issue here is that
    if we did that, if we just converted the code to another, we
    would maintain the same problems in our systems that we have
    today.
        Let me give you an example. You are very familiar with the
    fact that today, we are replacing 54 COBOL systems that run in
    our DDS', independent systems. If we were to just convert that
    code, we would end up with 54 web based systems all
    independent, all hard to change, all the problems that we have
    today.
        Instead, as we are going forward and replacing the COBOL
    code, we are modernizing our systems, we are redesigning them
    so that we really have more flexibility, for example, in the
    DDS systems, not only will there be one single web based system
    that can be changed overnight, but in addition to that, we will
    be able to integrate health information technology. It will be
    able to integrate case analysis tools.
        We will really have a more robust system serving us for the
    21st Century than if we were just to convert that code from one
    language to another.
        Mr. JOHNSON of Texas. Do you agree with that, Mr.
    O'Carroll?
        Mr. O'CARROLL. Mr. Johnson, our concerns are with the speed
    with which the Agency is moving forward with conversion of the
    COBOL. As it stands now, it is in the plans, and as Bill just
    mentioned with the DDSs, but when you are looking at the major
    systems of SSA, we are seeing no major progress in converting
    that COBOL language.
        Our concern, and what I think should be the concern of
    everyone, is as we are building this new computer center,
    wherever it is built, that we look into the future and do some
    long range planning, and look out 20 years and see what type of
    technology is going to be needed, and take that into
    consideration.
        I use the example of buying a brand new limousine and
    putting a golf cart engine in it. We should be making sure that
    the best of technology is being used in the location as well as
    in the data systems.
        Mr. GRAY. Mr. Johnson, I agree that we ought to be looking
    ahead to the best technologies that are available. I would just
    say to you that over the last several years, we have made a lot
    of progress in moving into modernized systems. Our databases
    that house information, benefit data, two-thirds of that data
    has now been moved into a modern industry standard database.
    Forty percent of the COBOL code we had is now running in modern
    languages.
        I think we are making progress as we move along. I just
    think it is more difficult in some cases as we redesign our
    systems.
        Mr. JOHNSON of Texas. It is awfully slow. I think today's
    computers all over the world share information with each other
    and yours do not seem to want to.
        Let me ask Mr. Hewell, did you analyze and concur with
    Social Security's rationale for a 40 mile radius or did you
    just accept it?
        Mr. HEWELL. I guess the quickest answer to your question is
    that we accepted it. We looked at their rationale for it. It
    seemed to make sense. The rationale was a technical one.
        Mr. JOHNSON of Texas. Yes, but it would not be a problem if
    we put it on the current site, would it?
        Mr. HEWELL. That would not be a problem.
        Mr. JOHNSON of Texas. I think that is another reason for
    doing that. Are you saying, Mr. Gallagher, let me ask you, that
    by October, Durham is going to be able to recover all the
    systems?
        Mr. GALLAGHER. Yes, sir.
        Mr. JOHNSON of Texas. October of this year? Are you telling
    me it is going to be until October next year before we can
    recover all the systems?
        Mr. GRAY. Sir, maybe I can help you. In January, in a
    couple of weeks, the North Carolina site will be able to
    recover all of our critical production systems, which are the
    payment systems.
        In October, we will also be able to recover the non-
    critical systems, which are some of the regional workloads,
    some of the management information, some of the forecasting
    workloads that are not as time sensitive to bring up.
        In reality, the systems that this country relies on to be
    available will be able to be recovered in North Carolina
    starting in just a couple of weeks.
        Mr. JOHNSON of Texas. In October of next year?
        Mr. GRAY. In January.
        Mr. JOHNSON of Texas. That is only a couple of weeks away,
    you know.
        Mr. GRAY. Yes, that is what I am saying.
        Mr. JOHNSON of Texas. By January, we have full capability
    on our Social Security system and we will not lose anything
    except what you just talked about?
        Mr. GRAY. Yes, sir. All critical production systems we
    would be able to recover in North Carolina.
        Mr. JOHNSON of Texas. We would not have to stop Social
    Security checks or disability checks; is that true?
        Mr. GRAY. That is true, sir.
        Mr. JOHNSON of Texas. I am glad to know that.
        Mr. Gallagher, you also talk about the strengthened role of
    your Chief Information Officer is to ensure that you have a
    long term vision and a process in place to make use of leading
    edge technologies. Is this position that you are talking about
    a political appointee, and if that is such an important thing,
    why is he not testifying here today?
        Mr. GALLAGHER. The new Chief Information Officer is a
    political appointee, but is not in a position that requires
    confirmation by the Senate. We have only three Senate-confirmed
    positions which are the Commissioner, the Deputy Commissioner
    and then we have the Inspector General as well.
        Mr. Baitman joined us earlier this year. He is actually
    seated behind me.
        Mr. JOHNSON of Texas. Has he signed off on your decisions
    concerning the national support center, the new location?
        Mr. GALLAGHER. He has been involved in meetings. I believe
    he attended the meeting on Friday. He has raised some questions
    which is rightly so, because we look for him to be a critical
    thinker.
        I met with the Commissioner last night where we expressed
    to him or I expressed to him along with the chief of staff the
    results of Mr. Hewell's study, and the Commissioner has decided
    that we need to have this shovel ready. He wanted to proceed as
    we initially had outlined about moving forward.
        Mr. JOHNSON of Texas. How many GSA staff are assigned to
    you for help in this deal?
        Mr. GALLAGHER. Sir, I actually do not have that number. In
    a project that is a joint project, I guess I am hesitant to use
    the word ``assigned.'' I would defer to Mr. Hewell about how
    many folks are actually from his shop that are working on the
    project, if that would answer your question.
        Mr. HEWELL. In one capacity or another, we have about a
    dozen people from GSA assigned to the project, and then of
    course, there are additional contractors assigned.
        Mr. JOHNSON of Texas. How many consultants and contractors
    have been involved in the process so far and did you hire them
    or did somebody else hire them?
        Mr. HEWELL. The consultants we are using we hired. Let me
    just get a number for you. We have two consulting firms working
    for us.
        Mr. JOHNSON of Texas. You coordinate with them every day?
        Mr. HEWELL. Several times; yes.
        Mr. JOHNSON of Texas. Okay. What do they think about the
    location?
        Mr. HEWELL. They were part of the study. They are in full
    agreement that it should be off site.
        Mr. JOHNSON of Texas. Can you give us about ten reasons why
    you cannot use the existing site?
        Mr. HEWELL. As I said earlier, sir, I would not tell you
    that you cannot use it. I would tell you there are reasons why
    it makes more sense to use a different one. Those reasons are--
    --
        Mr. JOHNSON of Texas. I think Ms. Holmes Norton was right
    on when she asked, ``What are we doing buying more property for
    the Federal Government when we have a site that large?''
        Mr. HEWELL. If I may, sir, the actual developable area of
    the site is smaller than it looks. What is developable is
    fairly critically sloped which makes development on the site
    more expensive and more complicated.
        Most of the flat area on the existing campus is currently
    developed. As we expand construction on the campus, we would be
    building on existing parking lots and creating structured
    parking in other places at the expense of that. It also
    requires that we phase construction which affects schedule on
    the site of anything that we do.
        If we do something for the computer center on the existing
    site, we would be taking away some of the possibility of
    further developing the site in the future for additional office
    related space, like what is on the campus now.
        That actually in our opinion would be a mistake because we
    already have a lot of leased square footage in buildings that
    kind of ring the campus, and for long term, we would like to
    see that become Government owned because this is clearly a
    facility that will be around.
        Mr. JOHNSON of Texas. One of the questions that has not
    been asked is what do you intend to do with the existing
    building? Are you going to demolish it?
        Mr. HEWELL. The existing building would probably be
    ultimately converted to office space. We need to do further
    study on it. There is a chance it would be torn down. The
    likelihood is that it would end up being converted.
        Mr. JOHNSON of Texas. Are you going to get rid of all that
    wiring that is in there right now?
        Mr. HEWELL. We would certainly have to get rid of some of
    it; yes.
        Mr. JOHNSON of Texas. Thank you, Mr. Chairman. Thank you,
    Ms. Holmes Norton.
        Ms. NORTON. I just wanted to say in light of both Mr.
    Johnson's questions and your questions, for the record, on the
    St. Elizabeth's site, we do have something to compare with
    here, that is the biggest construction going on in the United
    States today. We own the land.
        The Chairman was concerned about the parking lot, about
    parking, and whether or not you needed to have a flat surface.
    I just want to say that at the old St. Elizabeth's site, they
    simply dug into a hill and they are putting parking right on
    that site. Again, in keeping with the presumption in favor of
    building on land you own.
        Your notion that you have to have a flat site in order to
    park----
        Mr. HEWELL. Most of the construction that is going on at
    St. Elizabeth's is office space, which can be----
        Ms. NORTON. I am talking about the parking lot. I am
    talking about the parking. There is parking. This is a sloped
    area.
        This is an area full of historic buildings and still the
    Government is so concerned that we build on existing land that
    we are re-using the historic buildings rather than taking the
    whole facility off site.
        That is how strong there is a presumption of building on
    your own land, even using--these are old, old buildings, not
    only old buildings, buildings that we used for everything from
    clinics to dormitories. Because they are historic, the
    Government is willing to spend some money to in fact re-use
    them because they are on land we own.
        Again, Mr. Chairman, I have not heard in your call for
    specific analyses, particularly given the fact that we have
    some time, it is very important before we do what frankly
            -- I will ask you, Mr. Hewell, do you know of any other
            instance where the Government has owned land but has
            decided to buy land instead of using land it owned?

        Mr. HEWELL. The answer to that is surely yes, but I can't
    give you----
        Ms. NORTON. You are going to have to--I do respect
    precedent. If you give me examples given GSA's long history of
    building, I think it would be----
        Mr. HEWELL. We will look for some precedence. Madam
    Chairman, I ask you to realize also that we are talking about a
    computer center and not office space here. The construction
    needs of a computer center are different. This is a big flat
    building.
        We are also talking about a need for speed. I have heard
    that from all of you today. Building on the campus will present
    difficulties that we will not experience elsewhere that will
    affect the schedule.
        Chairman TANNER. How many acres are out there on the
    campus?
        Mr. HEWELL. 270.
        Chairman TANNER. You said earlier that it was not cost
    effective to build there because you had to build a parking
    garage. You have surface parking now, and you cannot find in
    270 acres other surface parking if you use the campus?
        Mr. HEWELL. The large majority of the space in that 270
    acres that is flat, the easiest to build on, is either covered
    currently with buildings or parking lots.
        Chairman TANNER. You are saying you cannot build a surface
    parking lot on a hill?
        Mr. HEWELL. You can certainly build parking on a hill. It
    requires excavation and foundation work.
        Chairman TANNER. Would that be cheaper than a parking
    garage?
        Mr. HEWELL. Structuring parking whether it is a garage or
    not is comparably priced. The area to the north of the existing
    data center, as an example, has something like a 60 foot
    elevation on it, between where the current data center and the
    property line is, which is roughly six stories.
        We are dealing with some significant topography.
        Chairman TANNER. Mr. Diaz-Balart?
        Mr. DIAZ-BALART. Thank you very much, Mr. Chairman.
        I am from Florida. I do not have a dog in this fight as far
    as one place or another. I am concerned obviously about making
    sure that the safety issue has to be paramount.
        Also, regardless of what has happened in the past or what
    will happen, safety is paramount. I think you all will agree
    with that.
        You mentioned speed. Speed is important because of costs. I
    know it is also part of job creation which is supposed to be a
    stimulus. Also, cost is paramount in my opinion.
        Let me ask you the following, which is less expensive, to
    keep it on-site or to move it to a new location? Number two is
    which is safer for everything that it entails to keep it on-
    site or to move it to a new location, and third, which is
    related to the expense, which is faster, to keep it in this
    location or to move it to a new location?
        Mr. HEWELL. My answer to those three questions would be the
    outside solution in all three cases.
        Mr. DIAZ-BALART. The off site solution is less expensive?
        Mr. HEWELL. We believe it would be less expensive.
        Mr. DIAZ-BALART. Any idea how much less expensive?
        Mr. HEWELL. I do not believe our studies are developed
    enough to give you that answer specifically. We know the cost
    we would incur to go off site as opposed to stay on-site would
    be the cost of acquiring land. That cost is roughly $12
    million.
        The additional cost we will incur on the existing campus to
    deal with the things that we have been talking about will in
    our opinion exceed that. I am a little afraid to throw out any
    numbers because I do not know that we have developed them that
    much.
        The cost of dealing with the topography to build either a
    building or parking will exceed that $12 million cost.
        Mr. DIAZ-BALART. In your opinion, it would be less
    expensive to build elsewhere than on the current site?
        Mr. HEWELL. We believe so.
        Mr. DIAZ-BALART. It would be great if you could give us
    something regarding that.
        Mr. HEWELL. We will develop that analysis.
        Mr. DIAZ-BALART. That is crucial. Again, we should not be
    talking about theories here. We should know. Again, we would
    like to see and I think the Committee would like to see that,
    as the Chairman has just said off microphone, an analysis of
    price differences between off-campus and on the current
    location.
        Number two is speed. I would also like to see, Mr.
    Chairman, if possible, an analysis of which one would happen
    quicker, if that is at all possible.
        Mr. HEWELL. It is possible and we will produce that.
        Mr. DIAZ-BALART. The third one which is paramount,
    obviously--I said I do not have a dog in this fight except for
    the fact that we all need to make sure that safety is
    paramount. We need to make sure people continue to get their
    checks and that information is not lost or whatever.
        Do you have an analysis on what the impact on safety of the
    information would be, the potential risk of putting it on-
    campus versus off?
        Mr. HEWELL. The analysis would go something like this. If
    we build a facility off site, we will not run any risk of a
    backhoe running into existing wiring or something like that
    which we may or may not know about.
        If we build on-site, we will certainly do everything we can
    with respect to the plans that we have for what is underground
    and that sort of thing already, but the risk exists for
    something to happen. It happens on construction jobs all the
    time.
        Mr. DIAZ-BALART. Particularly with an old facility where--
    --
        Mr. HEWELL. Where the plans from 30 years ago are not
    necessarily up to date or findable.
        Mr. DIAZ-BALART. Mr. Chairman, what I would like is as much
    as possible if you could get us answers to those three
    questions as specific as possible, as accurate as possible.
        Mr. HEWELL. We will take a shot at it.
        Mr. DIAZ-BALART. Great. Thank you. Thank you, Mr. Chairman.
        Ms. NORTON. Mr. Diaz-Balart, you asked a question that was
    very important here about safety. In the analysis they are
    getting to the Committee on safety, an analysis of the kinds of
    offsets that would be required.
        Once you acquire new land, which is not already protected
    as this land is, you then will have to erect a whole new set of
    security procedures which have to be figured into the cost. It
    raises costs and certainly for the Social Security system
    raises real safety issues in security terms.
        Mr. HEWELL. The offset for the perimeter security will
    actually not be a great deal less because that same security
    would need to be done on the campus. The campus itself is not
    secured to the level that the data center area needs to be.
    There are setbacks and things that are associated just with
    that facility.
        Mr. DIAZ-BALART. If I may, Mr. Chairman.
        Chairman TANNER. Yes.
        Mr. DIAZ-BALART. I think my Chairwoman had a very important
    point. I think we need to have some answers and we need to have
    those as specific as possible and as timely as possible. I
    appreciate if you could do that.
        Thank you, Mr. Chairman.
        Chairman TANNER. Thank you. Ms. Brown-Waite?
        Ms. BROWN-WAITE. Thank you very much, Mr. Chairman.
        Mr. Hewell, I travel back and forth in my District every
    week, and sometimes at the airport, I meet some of the most
    interesting people.
        Are you aware that GSA actually has contracted with an
    organization that has expertise in putting up commercial
    buildings and has sought their advice? Are you aware of such a
    contract? This is a consulting contract on how GSA can build
    better, faster and cheaper. Are you aware of such a contractor?
        Mr. HEWELL. I have to say no, I am not. My purview is the
    regional office. What you are describing sounds to me like a
    national office contract.
        Ms. BROWN-WAITE. If I could make a suggestion. I have seen
    this person several times at the airport, and I am naturally
    interested in saving taxpayer dollars. This consultant has come
    up with a plan. They believe that various buildings could be
    constructed in half the time at half to two-thirds of the
    current cost.
        Obviously, GSA was amazed at this. It seems to me as if in
    private industry, there is a deadline, and cost overruns are
    very seldom allowed because they hold the feet of the
    contractors to the fire and get the construction done very
    quickly.
        I strongly advise you to follow up and get the information
    that has been supplied to GSA. Government workers, we are
    shocked, tried to shoot holes in the proposal, but were really
    unsuccessful because it works.
        I would really strongly suggest that you follow up on this
    with the main office.
        The other question that I have is how do you think other
    than this private contractor that Congress could help you speed
    up this process? The whole building process.
        Mr. HEWELL. For all of the 35 years or so that I have
    worked for GSA, we have continuously looked for ways to do
    that, and we have actually made significant improvement.
        We do over 95 percent of our business in terms of dollars
    spent through contractors. We talk to them all the time about
    many things.
        I would like to take this opportunity to say that in terms
    of dealing with the SSA issue at hand, Congress has certainly
    helped us a lot already by appropriating the funds for this
    project as quickly as they did.
        If I might get the name of this contractor that you were
    talking about after the hearing, I would like to do that.
        Ms. BROWN-WAITE. I have a briefing I have to go to but I
    will make sure my staff gets it to you.
        Mr. HEWELL. Thank you very much.
        Ms. BROWN-WAITE. I have a question for Mr. O'Carroll. Mr.
    O'Carroll, what do you think is the most important lesson that
    can be learned from the building of the secondary data center
    in Durham, and how can we apply this lesson to the new
    construction of the National Computer Center?
        We were originally told that the building would take six
    years. It took eight years. Should we really believe that the
    building that we are discussing today will be constructed on
    time?
        Mr. O'CARROLL. Congresswoman, that is a very good question.
    All of these questions are interesting. One of the
    responsibilities of being the Inspector General is remaining
    independent. With all the discussions of the tour on Friday, we
    are usually not invited to those events. We do not go along,
    but we review the documentation afterwards.
        It is sort of the same thing that happened with the Durham
    Support Center. We took a look at the overruns, and we went
    down there twice. Once, we went down with the Agency to do a
    walk-through. Afterwards, our auditors went down and we took a
    look at the pitfalls that occurred as they were building the
    Durham Support Center.
        We identified those issues and wrote a report that is
    available.
        We are optimistic that a lot of the mistakes and a lot of
    the issues on the overruns in Durham, now that they are known,
    should be avoided in any of the planning going forward.
        I have to say we are impressed with the way that Durham has
    progressed. We were impressed with the flexibility, because
    nine months ago, it did not have the capability of redundancy
    that it now will have. That is partly a result of our report in
    which we noted on the disaster recovery that not enough
    resources were put into Durham. They are included now and we
    are looking at that for the future.
        I think the mistakes that were made and valuable lessons
    learned, Durham should help going into the future.
        Ms. BROWN-WAITE. Mr. Chairman, if I could ask one followup
    question to Mr. O'Carroll.
        Mr. O'Carroll, when you say not enough resources, could you
    elaborate a little bit on that? Not enough staff? Help me out
    here.
        Mr. O'CARROLL. Yes. Having made the visit down there, we
    found the facility is in a rural area. It was away from a lot
    of the resources that were needed.
        I think in terms of, as we discussed here, the infringing
    area, they needed a lot of real estate development. It was
    initially interesting.
        When Durham was first selected, it was going to be for
    redundancy, but with funding and other issues, it became a
    secondary site as opposed to being a redundant site.
        I have to say in some ways, it was probably a reduction in
    funding, why the decision was made to make it a secondary site
    as opposed to a redundant site. Now, with more resources
    devoted to it, it is now redundant, so it is going to have that
    capability in January that Mr. Gray mentioned, being able to
    replicate many of the same processes that are done in
    Baltimore.
        On resources, it means you are going to have to make sure
    there will be enough power generators. One of the issues that
    was addressed in the last year is they doubled the amount of
    generator power down there so it could be redundant. That is a
    resource that needs to be looked at in advance.
        Ms. BROWN-WAITE. Are you concerned that all of the
    facilities are along the East Coast?
        Mr. O'CARROLL. We are looking at that. One of our concerns,
    of course, when we heard about a 40 mile range, we thought that
    immediately took off the table the ability to go into other
    states, other areas, other parts of the country.
        It, of course, is a concern that everything is East Coast
    located. However, we are feeling more comfortable that there is
    going to be redundancy in at least a couple of different
    locations, which in a sense is doubling the sense of security
    that there was a few years ago.
        It would be nice if geographically it could be in a
    completely different location, but I have to say, given the
    resources and the opportunities that SSA had, just the fact
    that there are eventually going to be two redundant sites, we
    are less concerned with geographical location.
        Ms. BROWN-WAITE. Mr. Chairman, thank you for your
    understanding, and I yield back the balance of my time.
        Chairman TANNER. Thank you. Does any Member have further
    questions?
        [No response.]
        Chairman TANNER. We want to again thank you all.
        Ms. NORTON. Mr. Chairman, I just want to make sure that Mr.
    Hewell and Mr. Gallagher understand that in light of the
    questions of the Committees, before you move forward on buying
    land, one, the analyses need to be presented to the Committees,
    and two, the Committees need to have fair notice in advance if
    the decision is made to buy land.
        Thank you, Mr. Chairman.
        Chairman TANNER. Thank you, Ms. Holmes Norton.
        There is a concern here. We need to see some data, some
    analyses here. I think you all would agree this is a big deal.
    It is extremely important. It is critical to the Social
    Security delivery system.
        The concern here is that we have access to the analyses
    about what we are doing so that you all and these two
    Committees who have jurisdiction can comfortably face any
    questions about it that we might receive.
        We will be looking forward to your submission.
        Do any of you all have any closing comments?
        [No response.]
        Chairman TANNER. If not, we thank you and the hearing is
    adjourned.
        [Whereupon, at 11:03 a.m., the Subcommittees were
    adjourned.]
        [Questions for the Record follow:]
          Questions from Chairman John Tanner to Mr. Michael Gallagher

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                Questions from Chairman Tanner to Mr. Rob Hewell

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