[Senate Hearing 111-460]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 111-460
 
                    NOMINATION OF MARTHA N. JOHNSON

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

                                HEARING

                               before the

                              COMMITTEE ON
               HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
                          UNITED STATES SENATE


                                 of the

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

 NOMINATION OF MARTHA N. JOHNSON TO BE ADMINISTRATOR, GENERAL SERVICES 
                             ADMINISTRATION

                              JUNE 3, 2009

                               __________

       Available via http://www.gpoaccess.gov/congress/index.html

                       Printed for the use of the
        Committee on Homeland Security and Governmental Affairs




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        COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS

               JOSEPH I. LIEBERMAN, Connecticut, Chairman
CARL LEVIN, Michigan                 SUSAN M. COLLINS, Maine
DANIEL K. AKAKA, Hawaii              TOM COBURN, Oklahoma
THOMAS R. CARPER, Delaware           JOHN McCAIN, Arizona
MARK L. PRYOR, Arkansas              GEORGE V. VOINOVICH, Ohio
MARY L. LANDRIEU, Louisiana          JOHN ENSIGN, Nevada
CLAIRE McCASKILL, Missouri           LINDSEY GRAHAM, South Carolina
JON TESTER, Montana
ROLAND W. BURRIS, Illinois
MICHAEL F. BENNET, Colorado

                  Michael L. Alexander, Staff Director
               Kristine V. Lam, Professional Staff Member
     Brandon L. Milhorn, Minority Staff Director and Chief Counsel
                   Jennifer L. Tarr, Minority Counsel
                  Trina Driessnack Tyrer, Chief Clerk
         Patricia R. Hogan, Publications Clerk and GPO Detailee
                    Laura W. Kilbride, Hearing Clerk


                            C O N T E N T S

                                 ------                                
Opening statements:
                                                                   Page
    Senator Lieberman............................................     1
    Senator Collins..............................................     3
    Senator Tester...............................................    10
    Senator McCaskill............................................    13
Prepared statements:
    Senator Lieberman............................................    17
    Senator Collins..............................................    19

                                WITNESS
                        Wednesday, June 3, 2009

Martha N. Johnson to be Administrator, General Services 
  Administration:
    Testimony....................................................     4
    Prepared statement...........................................    21
    Biographical and financial information.......................    23
    Responses to pre-hearing questions for the Record............    34
    Letter from the Office of Government Ethics..................    71
    Responses to post-hearing questions for the Record...........    72


                    NOMINATION OF MARTHA N. JOHNSON

                              ----------                              


                        WEDNESDAY, JUNE 3, 2009

                                     U.S. Senate,  
                           Committee on Homeland Security  
                                  and Governmental Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 10:18 a.m., in 
room SD-342, Dirksen Senate Office Building, Hon. Joseph I. 
Lieberman, Chairman of the Committee, presiding.
    Present: Senators Lieberman, McCaskill, Tester, and 
Collins.

            OPENING STATEMENT OF CHAIRMAN LIEBERMAN

    Chairman Lieberman. Good morning, and welcome to this 
hearing to consider the nomination of Martha Johnson to be 
Administrator of the General Services Administration (GSA). We 
welcome you, Ms. Johnson, particularly.
    GSA is often called the Federal Government's ``landlord'' 
because it provides workspace and office services for almost 
every Federal office and agency--from courthouses to ports of 
entry, with a lot in between. Managing 8,600 buildings and $500 
billion in assets makes GSA one of the world's largest property 
management organizations--maybe the largest.
    But GSA is far more than just a landlord. Its 12,000 
employees are dispersed across the country in 11 district 
headquarters from which they guide Federal spending on 
everything from basic office equipment to the Federal fleet of 
more than 200,000 vehicles.
    GSA's purchasing decisions have broad implications for the 
rest of the economy since, as we have seen, as an early 
acquirer of new technologies, including alternative fuel cars, 
the agency can help move those technologies through its 
purchasing power from innovation to the marketplace.
    GSA also has wide responsibilities for providing 
information technology and telecommunications services for 
Federal agencies. With its leadership, the agency can ensure 
that the Federal Government is using cutting-edge technology to 
lower costs, better engage with citizens, and detect and defend 
against cyber threats. These are very large and serious 
responsibilities which require strong leadership and great 
experience, and, Ms. Johnson, it looks to me like you bring 
that to this responsibility.
    Let me just lay out a few of the challenges that I think 
GSA has, as experienced in the oversight work of this 
Committee. In the area of procurement first, the contracts 
negotiated by GSA should leverage the vast buying power of the 
Federal Government so that agencies get more value for the 
taxpayer's dollar.
    Last year, Federal agencies bought approximately $37 
billion of goods and services off GSA schedules, which cover 
everything from office supplies to human resource services to 
security equipment. Having GSA negotiate these procurement 
agreements lets its customer agencies stay focused on their 
core missions. But some agencies have lost confidence in the 
ability of GSA to provide the best products at the best prices 
and have begun to negotiate their own contracts that duplicate 
services offered by GSA. That defeats the purpose of GSA, which 
was created under President Truman in 1949 with the specific 
intent of streamlining the Federal Government purchasing 
process. Today this agency and interagency contracting, 
including use of GSA contracts, is on the Government 
Accountability Office's (GAO) high-risk list, and that is 
something that should not continue, and we hope you will be 
able to change that, if confirmed.
    Similar problems exist in GSA's property management 
activities with some agencies questioning whether GSA meets 
their needs in the most cost-effective manner.
    One problem of particular concern to our Committee is the 
amount of excess or underutilized property owned by the Federal 
Government. In the last Congress, the Office of Management and 
Budget reported to us that the Federal Government owns 21,000 
buildings worth about $18 billion that are underused or no 
longer needed, and GAO has put management of Federal property 
also on its high-risk list since 2003. I want to point out and 
stress that not all of these properties are under GSA's 
control, but one of its jobs, I think, is to help and encourage 
and push other agencies, when necessary, to dispose of excess 
property, and we are going to need your leadership, Ms. 
Johnson, to resolve this problem. Another important role that 
GSA plays is as a promoter of green technologies, as I alluded 
to.
    The American Recovery and Reinvestment Act, the stimulus 
bill, greatly added to the ability of GSA to ``green the 
government'' by providing $4.3 billion to make Federal 
buildings more energy efficient and $300 million more to buy 
additional fuel-efficient vehicles for the Federal fleet.
    It is very important to us, and I know to all of Congress, 
that GSA carry out those responsibilities as quickly and 
effectively as possible. So these are big challenges for a big 
part of the Federal Government, but I personally believe that 
President Obama has made a very wise choice in nominating you, 
Ms. Johnson, to be the GSA Administrator. You bring a wealth of 
administrative and financial experience in the private, 
nonprofit, and government sectors to this job, if confirmed.
    Ms. Johnson began her career at Cummins Engines Company and 
more recently served as Vice President at SRA-Touchstone 
Consulting and then at Computer Sciences Corporation. She has 
also worked in the nonprofit sector at the Council for 
Excellence in Government and is no stranger to GSA, having 
served as Chief of Staff there from 1996 to 2001.
    So we welcome you before the Committee. We look forward to 
your testimony, to the question-and-answer period, and then to 
working with you, if confirmed. Thank you.
    Senator Collins.

              OPENING STATEMENT OF SENATOR COLLINS

    Senator Collins. Thank you, Mr. Chairman.
    As President Obama's nominee to lead the General Services 
Administration, Martha Johnson comes to this Committee with 
significant experience in both the private sector and the 
Federal Government.
    The size and reach of GSA's operations make meeting today's 
challenges at the agency even more important than when Ms. 
Johnson last served there more than 8 years ago. GSA has more 
than 13,000 employees and an annual budget of approximately $16 
billion. It is charged with managing nearly $500 billion in 
Federal assets, including more than 8,600 government-owned or 
leased buildings and a fleet of more than 200,000 vehicles. 
GSA's performance has a significant impact on the efficiency 
and effectiveness of government-wide operations, affecting 
almost $66 billion in financial transactions throughout the 
government.
    As the Chairman has indicated, GSA is our Nation's landlord 
and the government's primary acquisition agency. As such, the 
agency must apply the lessons that this Committee has drawn 
from its investigations into mismanagement of the Federal 
Government's real property program and into numerous examples 
of waste, fraud, and abuse associated with Federal contracting 
practices. With total Federal purchases exceeding $500 billion 
a year, Federal procurement requires better stewardship of 
taxpayer dollars. Senator Lieberman and I have authored 
contracting reforms that are now law. In addition to helping to 
effectively implement those reforms, GSA must continue to press 
for additional improvements in the Federal procurement process.
    Another area that I would encourage the nominee to focus on 
is the crisis facing the overextended and underappreciated 
Federal acquisition workforce. The Federal Government must 
invest significantly in its acquisition workforce. The 
government entered the 21st Century with 22 percent fewer 
Federal civilian acquisition personnel than it had at the start 
of the 1990s. Moreover, 50 percent of the entire Federal 
acquisition workforce will be eligible to retire as early as 
2012. That means that as our contract spending has continued to 
increase dramatically, our contracting workforce continues to 
shrink. And this is not just a numbers game. In addition to 
having a sufficient number of personnel, the Federal Government 
must have the right mix of program managers, engineers, cost 
estimators, contracting officers, auditors, and technical 
experts.
    GSA must press forward on other challenges as well, 
including the sorely needed consolidation of the Department of 
Homeland Security offices at the St. Elizabeths Hospital 
complex and the management of billions of dollars to renovate 
and construct other Federal buildings. As the Chairman has 
indicated, I am particularly interested in the green building 
initiative, and I know that the Federal building in Bangor, 
Maine, which is long overdue for renovations, has been selected 
for one of those green projects.
    Of particular concern to border States like Maine is the 
role that GSA plays in enhancing our Nation's border security 
by managing the planning, design, and construction of ports of 
entry for Customs and Border Protection (CBP). It is now 
estimated that a port of entry takes more than 7 years to 
progress from planning to ribbon cutting. That is too long.
    In my home State of Maine, a new port of entry in Calais 
was seriously delayed by GSA's failure to award the 
construction contract on time and to account for the presence 
of significant ledge--a common occurrence in Maine construction 
projects. These delays have real impacts. Although the new 
international bridge that connects Calais, Maine, to St. 
Stephen, New Brunswick, was completed last year, and the 
Canadians have been completely ready on their side of the 
border, we have lagged on our side of the border. The U.S. port 
of entry will not be completed until this fall, and I would 
note that is an improvement over the original prediction of the 
end of the year.
    These many and diverse issues attest to the great breadth 
and depth of responsibilities that the Administrator of GSA 
must handle, and I look forward to discussing these issues with 
Ms. Johnson this morning.
    Thank you, Mr. Chairman.
    Chairman Lieberman. Thank you very much, Senator Collins.
    Martha Johnson has filed responses to a biographical and 
financial questionnaire, answered pre-hearing questions 
submitted by the Committee, and had her financial statements 
reviewed by the Office of Government Ethics. Without objection, 
this information will be made part of the hearing record, with 
the exception of the financial data, which are on file and 
available for public inspection in the Committee offices.
    Ms. Johnson, as I am sure you know, our Committee rules 
require that all witnesses at nomination hearings give their 
testimony under oath, so I would ask you at this time to please 
stand and raise your right hand. Do you swear that the 
testimony you are about to give this Committee is the truth, 
the whole truth, and nothing but the truth, so help you, God?
    Ms. Johnson. I do.
    Chairman Lieberman. Thank you very much. Please be seated. 
We would welcome now any opening statement you would like to 
make and, if you wish, introduction of family or friends who 
are here with you.

TESTIMONY OF MARTHA N. JOHNSON \1\ TO BE ADMINISTRATOR, GENERAL 
                    SERVICES ADMINISTRATION

    Ms. Johnson. Thank you very much. I have a few brief 
comments.
---------------------------------------------------------------------------
    \1\ The prepared statement of Ms. Johnson appears in the Appendix 
on page 21.
---------------------------------------------------------------------------
    Mr. Chairman, Madam Ranking Member, and distinguished 
Members of the Homeland Security Committee, I am honored to 
come before you as President Obama's nominee for the 
Administrator of the General Services Administration.
    I am delighted to be joined this morning by my husband, 
Steve Johnson, who supplies me with unending trust and 
encouragement. I also want to acknowledge many dear friends, 
fellow church members, and former colleagues who are here with 
me today. I am a fortunate woman.
    I am deeply thrilled to be considered for the position of 
Administrator of the General Services Administration. 
``Thrilled'' is actually a code word of sorts for me and for 
the agency. To begin, it would be thrilling to return to GSA 
where I served as Chief of Staff in the 1990s. The agency is a 
special place and offers a fascinating range of challenges. 
Where else do the Executive, Judicial, and Legislative Branches 
converge but in the complex task of designing, funding, and 
constructing courthouses? Where else is one expected to 
champion historic preservation on the one hand and edge 
innovative technologies on the other?
    But thrilling is not just about the importance, breadth, 
and intellectual challenge of GSA. It is also the concept that 
we used during the Clinton Administration when we spoke of our 
work with customers. GSA's goals were more than efficiency and 
timely invoices. We were not just about customer satisfaction, 
which in many ways is simply a baseline idea. GSA was aiming 
for a full circle of service which included three things which 
are now classic parlance in the industry. They are operational 
efficiency, customer intimacy, and innovative solutions. With 
all three in our sights, we could aim to thrill--not just 
satisfy--a customer.
    And why would that be important? Isn't good enough for the 
government worker good enough?
    No. Absolutely not. President Obama is challenging us to be 
a truly effective government, one that invites talent, 
performance, collaboration, energy, and innovation. One does 
not support such a workforce simply by ``satisfying.'' I 
believe GSA must reach deep to be the true service agency that 
will further the President's agenda. I am seeking the 
opportunity to lead the people of GSA and shape its culture and 
performance to that end.
    GSA, however, is not just about its government clients. Its 
circle is bigger than that and therein lies a powerful 
strategic opportunity for GSA. If you will allow me a metaphor, 
I see GSA as the concierge for the government. It is through 
our Federal building lobbies that civil servants and citizens 
enter the places of government activity. It is through the 
electronic portals that civil servants and citizens can reach 
the information about the government. And it is through the 
contract vehicles and procurement schedules that industry can 
offer its services and products to the government. GSA is the 
concierge, introducing, shaping, structuring, and facilitating 
ways for government to interact with itself, with citizens, and 
with industry.
    If confirmed, I hope to be a steadfast and creative leader 
of this tremendous organization, deepening GSA's impact, 
confidence, and reputation. Thank you.
    Chairman Lieberman. Thank you very much for an excellent 
opening statement. Welcome to your family and friends who are 
here.
    I am going to start the questioning with the standard three 
questions we ask of all nominees.
    First, is there anything you are aware of in your 
background that might present a conflict of interest with the 
duties of the office to which you have been nominated?
    Ms. Johnson. No.
    Chairman Lieberman. Do you know of anything, personal or 
otherwise, that would in any way prevent you from fully and 
honorably discharging the responsibilities of the office to 
which you have been nominated?
    Ms. Johnson. No.
    Chairman Lieberman. And, finally, do you agree without 
reservation to respond to any reasonable summons to appear and 
testify before any duly constituted committee of Congress if 
you are confirmed?
    Ms. Johnson. I agree to.
    Chairman Lieberman. Thank you very much. We will start with 
a first round of questions of 7 minutes each.
    Let me ask you to focus a bit on this question of Federal 
property, the management of it, which has been on GAO's high-
risk list since 2003. And I stress again that there are other 
agencies besides GSA that own most of the Federal property, but 
GSA has a significant ownership role and, of course, a 
facilitating role.
    The major issues that GAO has identified are excess 
property and overreliance on costly leasing (as opposed to 
constructing), deteriorating facilities, and increased security 
needs. One major concern that I mentioned in my opening 
statement that has been a real focus for Senator Carper and 
Senator Coburn, Members of the Committee, has been the excess 
property held by the government. Again, not all the buildings 
are owned by GSA, but there is an important role for GSA to 
play here.
    In the last Congress, with leadership from Senators Carper 
and Coburn, our Committee reported out a bill to allow agencies 
to keep a portion of the proceeds of the sale of excess 
property, obviously as a way to create a motivating factor to 
get rid of some of the stuff we do not need anymore. I wonder 
if you could give us your opinion on that type of financial 
incentive and whether you think it would encourage agencies to 
act in the public interest and what other measures you would 
contemplate taking to improve overall the Federal property 
management function of GSA.
    Ms. Johnson. Thank you. I am quite delighted, since leaving 
GSA, to learn that GSA has been given the authority to retain 
earnings when it has disposed of excess property. I believe 
that is a tremendous incentive, and I believe that our 
improvement on our excess and vacant property listings is a 
direct result of that. It is quite helpful to have that money 
flow into the Federal building fund and be able to be available 
for those purposes.
    And so I would be quite supportive and pleased to encourage 
any measures by which other agencies could retain profits, 
results, and funds from disposing of property. I think that 
incentive is very important, and I think it sends a strong 
signal to support agencies in that activity.
    Overall, I believe the management of the Federal real 
property inventory is quite a challenge. Aside from the 
vacancies and excess property, there is some substantial need 
for attention to repairs and alterations and to improvement in 
moving properties out of the bottom and middle tier to the 
upper tier in terms of the portfolio and how we would like the 
portfolio to be highly productive on a number of criteria, 
including return on investment, satisfaction to the customer 
health and safety and security. These new demands of security 
are also costly.
    The American Recovery and Investment Act funds are going to 
be quite important in some respects on this. Investing in high-
performance green buildings will be a long-term substantial 
help to the overall health of the inventory. So that funding 
will be critical.
    I believe from what I can tell--and I am sitting outside of 
GSA right now kind of looking at it through a bit of 
cellophane, if you will--that GSA is doing a terrific job 
within the constraints and within the protocols and the 
policies that it has to work with. Overall, the investment in 
the inventory is going to be one of the most critical factors 
for ultimately moving the entire portfolio into a more healthy 
status.
    Chairman Lieberman. I am going to go on. Senator Collins 
mentioned the problem of the time it takes to construct 
infrastructure at ports of entry. I want to mention one 
specific matter and call it to your attention if it has not 
been. I know Senator Collins will probably have questions about 
the process overall.
    In advance of your hearing, I have had some input from 
people in the vicinity of the San Ysidro port of entry, which 
apparently is the largest port of entry we have, and there is 
construction going on and it has been going on for a long time. 
Congressman Filner, who represents this area in the House, is 
very interested in this and is attempting to add language to an 
appropriations bill for GSA on this question.
    Basically, the local community is apparently concerned 
about what it sees as GSA's disregard about the reconfiguration 
of this facility that is going on now and how it would affect 
local commerce. And they have said to me that in the last 3 
months, in some sense between administrations, they believe 
there has been a change in what was an initially agreed upon 
decision last year.
    So this is a complex issue. I do not pretend to understand 
it all, but I want you to know that there is a lot of concern 
about it, and I just wanted to draw it to your attention and 
say that I hope we can be in touch with it. I am sure 
Congressman Filner will be in touch with you as soon as you are 
confirmed.
    I do not know if you know anything about this at this 
point.
    Ms. Johnson. I do not know any details. I will say that the 
President has certainly extended the notion that we need to be 
quite collaborative and collegial with our community and our 
stakeholders in positioning and investing in communities for 
these kinds of structures. So that would be my intention and my 
set of values around it, and I would be delighted to learn more 
about it and to be in conversation about it with you.
    Chairman Lieberman. Excellent. Thank you.
    Give me your response to what seems to be, as I mentioned 
in my opening statement, a kind of creeping away by various 
Federal agencies from using GSA particularly for contracting, 
which undercuts the basic purpose of the agency, and whether 
you observe the same and what, if anything, you hope to do 
about it.
    Ms. Johnson. I have a rather broad view of that. As a 
result of the Clinger-Cohen Act and some of the changes that 
were made in the 1990s, GSA moved from being the mandated 
source for much of the supplies and services and is now in more 
of a one among many non-mandated company store, if you will, as 
it was historically.
    The first rounds of response to those new authorities and 
possibilities on the part of other agencies meant that they 
wanted to establish their own contracting capacities, and I 
think that was a wave of response to long years of GSA being 
basically one of the few organizations that did that.
    I believe in that process, the acquisition workforce has 
now been dispersed much more broadly around the government, 
which is a very critical issue, and there is a lot of 
duplication, and there is a lot of overlapping and probably 
inefficiencies. I believe the competitive underscoring thinking 
behind this is appropriate. I do not believe having a sort of 
monolithic source for contracts is the exact right answer, but 
I am concerned about moving into a change in this because of 
the dispersion of the acquisition workforce.
    I also do believe this is a bit of a market gesture, if you 
will, around the performance of GSA. We would like to earn our 
customers through performance rather than through mandate, and 
that would be my attitude going forward and where I would put 
my energy. So performance is certainly the proper response, I 
believe.
    Chairman Lieberman. Well, that is a good attitude to go 
forward with, and I think you are right, it is a market 
response. Obviously, we will count on you, as well as GAO, I 
suppose, to let us know if this dispersion is getting to a 
point where it is inefficient. I agree with you, there is 
something to be gained from the competition, but sometimes it 
can be a loss, too, and an inefficiency. Thank you.
    Senator Collins.
    Senator Collins. Thank you, Mr. Chairman. Let me follow up 
on the two issues that you just raised.
    As I indicated to you, Ms. Johnson, I, too, am concerned 
about the explosive growth in government-wide acquisition 
contracts and multi-agency contracts because I believe the 
prevalence of those vehicles for purchasing demonstrates a lack 
of confidence in GSA, and it indicates to me that GSA is not 
meeting the needs of the client agencies.
    Do you have some specific recommendations in mind to try to 
deal with this explosive growth that cuts GSA out of the 
process and may lead to additional costs for the taxpayers?
    Ms. Johnson. I would go at it from a number of different 
angles. On the first one, I would work closely with the Office 
of Federal Procurement Policy. I believe they need to be strong 
leaders in thinking through and understanding where 
efficiencies and inefficiencies need to be managed. So I would 
believe GSA should be a good partner, and I think that is 
historically true, and I would want to continue that.
    Second, I believe that we do have a challenge around talent 
and the acquisition skills that are available, so in any kind 
of adjustments we are going to have to deal with the human-ware 
underneath all of this dilemma.
    The third, I believe, is about performance, and I will say 
that has something to do with leadership. If I am confirmed, I 
will be the fifth Administrator of GSA in 14 months, and I 
think it is time for GSA to have leadership settled, 
established, and then we can, I think, have a more aggressive 
stance around productivity and performance, and that is a very 
important thing to me.
    I also believe we need to have some data around this, 
understanding really where the contracts are, what is going on, 
what is bumping into each other. I have not been able yet to 
get in under the hood and kick the tires and so on, and that 
will be something I need to understand and would be delighted 
and pleased to be sharing with all our stakeholders so we can 
gather the best answers, so it is a collaborative response as 
well.
    Senator Collins. I also want to follow up on the Chairman's 
comments about community involvement when GSA is designing land 
ports of entry. GSA does a very good job of talking to the 
client agency, such as CBP or, in the case of a courthouse, the 
Administrative Office of the U.S. Courts for Federal 
courthouses. But it does not always do as much outreach to the 
community, and a lot of times that outreach can prevent 
problems down the road.
    To give you an example, there is now discussion underway on 
a new port of entry in Madawaska, Maine, and it is a very 
unusual situation, perhaps a unique situation, because there is 
a paper mill that straddles the border. The pulp is produced on 
the Canadian side, and the paper on the American side, or vice 
versa. And that is a very complicated situation. There are a 
lot of trucks going back and forth, and the current port of 
entry does not have sufficient room.
    I commend GSA for starting to involve the community in 
those discussions, but it is absolutely critical that it occurs 
in a way that does not create problems for the biggest employer 
of the area.
    So I just want to associate myself with the comments made 
by the Chairman and ask for you to commit to instructing GSA 
when it is designing and planning new construction, regardless 
of what it is, to reach out to the community for input.
    Ms. Johnson. I will do so. If confirmed, I would be quite 
pleased to. I believe thinking about the entire stakeholder map 
on any of these projects is important, and clearly the 
community is one of the critical ones. Having that healthy 
dialogue is important, and following up on it.
    Senator Collins. The Chairman also mentioned that GSA's 
management of Federal real property is on the high-risk list, 
and several years ago, I chaired a hearing that looked at the 
deteriorating buildings that were owned by the Federal 
Government and the lost dollars and lost opportunities that are 
entailed by this mismanagement.
    There has been progress, but there is a long way to go. And 
I am interested in what you are going to do specifically to 
focus on excess and underutilized property, unreliable real 
property data, and reliance on costly leasing, in some cases 
despite the fact that the government owns suitable buildings or 
buildings that could be made suitable.
    Ms. Johnson. I would reference portfolio thinking, which I 
think is part of how the real property management work is done 
in the Public Buildings Service. I am keen to support that and 
to be sure that the decisions about any given situation are 
almost like a Russian doll. That decision has a number of 
stakeholders and concerns and criteria associated with it, but 
there is also the larger doll it fits into, which is the 
overall portfolio, and this conversation is where GSA is the 
facilitator. They need to be thinking about and referencing the 
greater portfolio questions as well.
    With respect to leasing, I also appreciate that the leasing 
portion of the inventory is now exceeding the constructed 
portion, if I have my facts right, and that is a trend that has 
been steadily increasing. I am going to have to get a lot 
smarter about this, but when an agency or an organization is 
considering workspace, there is the decision to stay put, there 
is the decision to lease and use some flexibilities involved in 
that, or the decision to construct. And often, I believe, the 
decision to lease is the best of those three alternatives in 
that situation, which incrementally has increased the size of 
the leased space. It is an expensive alternative. I understand 
you are paying for the flexibility to some extent, but it is 
often better than staying put.
    So, relatively speaking, leasing has surfaced as an option, 
and I think that the issues around how to support the 
construction process and make it possible, make it streamlined, 
and fund it will be a way in which we can right-size.
    Senator Collins. Thank you.
    Chairman Lieberman. Thanks very much, Senator Collins.
    Senator Tester, good morning.

              OPENING STATEMENT OF SENATOR TESTER

    Senator Tester. Good morning. Thank you, Mr. Chairman. I 
appreciate you being here, Martha Johnson. It is good to have 
you in front of the Committee, and I appreciate you putting 
yourself up for this job. I think it is a very important job, 
and I think you will do a good job--at least that is my hope.
    I want to continue the conversation we had in my office 
about GSA becoming the administrator of land ports of entry, a 
modernization program. As you well know, Congress appropriated 
to CBP $420 million to rebuild the land ports of entry and to 
GSA about $300 million for the same purpose. It is my 
understanding that GSA and the Army Corps of Engineers will be 
the agencies in charge of overseeing this money and the 
contracts that have been given out for this work.
    To state that I was disappointed to find out that these 
contracts went to a handful of large engineering firms who 
already had GSA schedule for large-scale work would be a huge 
understatement. There is no reason in the world why the work, 
and 100 percent of the work, could not be done by local 
contractors or at least given the opportunity to bid on it. I 
think it represents backwards, ``business as usual'' thinking 
to give the contracts away to the big boys, and I am one of 
those that do not think that bigger is better. I think that 
small business is critically important to this country, and we 
need to support them when the opportunity arises. I think this 
was an opportunity that we messed up on.
    You are not the Administrator yet, although, as I said, I 
hope you will be soon, so I will not hold you responsible for 
that decision. But I do hope that as you take the job, you can 
direct the GSA away from this business as usual, which recently 
has been characterized by non-competitive big contracts for big 
businesses.
    Small businesses are the backbone of the economy. They are 
the ones that we are going to be riding to get out of this 
recession. And we need to make sure we have more opportunities, 
not fewer. Let me give you an example.
    Last week, a week ago tomorrow, I was in Havre, Montana, 
for a dedication of a Border Patrol new sector headquarters. 
Havre, Montana, is a town of 10,000, give or take a couple 
grand. That building was designed and built and even landscaped 
100 percent by Montana companies. The architectural firm was a 
Montana firm. Every one of the companies that built that 
building was from that town of 10,000 people. That project was 
finished on budget, significantly ahead of schedule. These 
folks can compete, and they can do the work.
    So, with that in mind, a couple questions. I understand 
that you cannot tell prime contractors who have the contracts 
now who to use as subcontractors. But will you commit to 
working with me to make certain that local small businesses 
have every opportunity to learn about and compete for some of 
this work that is going to be going on along the northern 
border to rebuild these border stations?
    Ms. Johnson. I will work with you as closely as possible to 
support small businesses and their inclusion in this important 
business. The Recovery Act money, I understand, is--each of 
these projects is being assessed in part with respect to how 
much it is designating small business. So I am hoping to 
support that and continue with that, and as a small-town North 
Dakota girl, I understand how important small businesses are in 
these environments.
    Senator Tester. Now that the contracts are in the hands of 
out-of-State firms that are quite big--by Montana's standard, 
they are huge--do you think there are going to be opportunities 
for subcontractors along that northern border where they could 
use some employment to be able to participate?
    Ms. Johnson. I am going to have to get back to you on that. 
I am not really sure I understand the process enough to go on 
record and say that now.
    Senator Tester. I would appreciate that.
    Ms. Johnson. I would be happy to get back to you promptly.
    Senator Tester. I would appreciate that.
    Would you be willing to come to Montana to host a workshop 
for interested small businesses to hear from GSA and CBP 
directly about how to pursue some of the work?
    Ms. Johnson. I would be delighted to come to Montana. I 
will have to learn about whether my schedule would fit the 
workshops, which I understand are being organized and I want to 
support. So let me work on calendar confirmation and get back 
to you.
    Senator Tester. I appreciate that. This may not seem like a 
big deal to a lot of folks. But this is truly a big deal. And 
it not only applies to the ports, by the way. It applies to all 
the recovery money that is coming out, whether it is through 
the Forest Service or whatever. I do not want to cut any deals, 
I just want to make sure that there is an opportunity for these 
folks to compete because they will compete and they will get 
those bids, there is no doubt in my mind.
    Finally, about rebuilding the ports--when I was in Havre, 
one of the gentlemen who is an economic developer up there gave 
me a letter that I passed along to the appropriate people, but 
it talked about the ports that are being rebuilt--we are 
talking about Montana ports now, with Alberta and 
Saskatchewan--that there is some concern that those ports, when 
they are rebuilt, will not be rebuilt with growth in mind, with 
opportunity to expand those ports potentially from an 8- to 10-
hour to a 24-hour port. And I am not saying that is what is 
needed now, but if down the line there is a need for a 24-hour 
port where there is currently a port that is open 8 or 10 hours 
a day, I certainly do not want to be restricted by poor 
planning at this point in time.
    It is tough for you because you are not in the position yet 
so you do not know, and so I am not going to ask you the 
question. I would just ask that once you get confirmed, could 
you do your level best to make sure that we are looking into 
the future for potential increased traffic, more economic 
growth, and the opportunity to expand those ports, if needed, 
so that we do not have to start all over again and rebuild the 
port again? These ports are 50 years old now. They do need to 
be rebuilt. Our border is only as strong as the weakest link. 
This is going to help firm that border up, so I think it is a 
step in the right direction.
    But along the same lines, 10 years from now if we want to 
expand a port, for example, or a year from now if we want to 
expand a port, we need to keep those options open. And I would 
hope that as the planning process goes forth from this time 
forward that we keep our options open and do not limit 
ourselves by poor planning.
    Ms. Johnson. I would be delighted to work with you on that, 
and I would trust that the planning takes into account future 
scenarios that would be fairly rational or logical to 
anticipate.
    Senator Tester. I would hope so, too, but sometimes logic 
is not necessarily the driving force in some of these 
decisions. I want to once again thank you for being here. I 
want to thank you for your willingness for a North Dakota girl 
to come out and really help small businesses. I think it is one 
of the things that we need to do across the line.
    Just an editorial comment, if I might, Mr. Chairman.
    Chairman Lieberman. Sure.
    Senator Tester. We talk in other committees about banks 
being too big to fail. Well, if we continue to give advantages 
to the big guys, we are going to have a lot of businesses that 
are too big to fail. If we support the little guys, we will 
have good competition. The system we have of government will 
work better, and capitalism will work better, and the whole 
program will work better. Like I said, do not tilt the playing 
field. Let us just make sure it is level so people have 
opportunity. Thank you.
    Ms. Johnson. Thank you, Senator.
    Chairman Lieberman. Thanks, Senator Tester. I agree with 
you. I cannot resist saying that the nominee is not only a 
North Dakota girl, but she is a North Dakota girl with a Yale 
education. [Laughter.]
    Ms. Johnson. There you go.
    Chairman Lieberman. A little parochial----
    Ms. Johnson. I was born in Connecticut. [Laughter.]
    I will claim everything I can.
    Chairman Lieberman. You have got the best of all worlds. 
When President Kennedy got his honorary degree at Yale, because 
he had gone to Harvard, he said he now had the best of both 
worlds--a Harvard education and a Yale degree. [Laughter.]
    Senator McCaskill.

             OPENING STATEMENT OF SENATOR MCCASKILL

    Senator McCaskill. I wanted to start by saying that, 
clearly, Senator Tester is serious about this--either that, or 
he is trying to cure you of any habits you learned at Yale--
because I have not seen him invite very many people to Montana 
in this Committee. So the fact that he invited you, I do not 
know whether to congratulate you or warn you. [Laughter.]
    I wanted to talk a little bit about post-award audits, and 
we visited about this briefly in my office when we talked. On 
the Subcommittee on Contracting Oversight, Brian Miller and I 
talked a lot about post-award audits. Prior to 1997, GSA did 
post-award audits, and more often than not, they found millions 
of dollars of cost savings. And, obviously, this is an audit 
where you look at the information in the bid to make sure it is 
accurate as it relates to comparables and so forth in the bid 
itself.
    Recently, Network Appliance, Inc., a GSA contractor, agreed 
to pay $128 million for the fact that it failed to offer the 
government its best commercial pricing on information 
technology goods and services, and that was discovered through 
a private lawsuit.
    I think that these post-award audits make sense. I think 
the fact that you are doing them--you do not have to do them on 
every one. But the power of audits is that everyone knows it 
might happen to them, and it brings about a remarkable change 
in behavior. And if you have a major government contractor that 
knows they could be selected for a post-award audit, I think 
you are going to see measurable taxpayer savings just with the 
announcement that you are going back to having post-award 
audits.
    I would like your commitment, and on a timely basis, if 
possible, to let the Committee know, let me know, let my office 
know, let the Subcommittee on Contracting know whether or not 
you are willing to move back into a post-award audit position.
    Ms. Johnson. I believe I am going to, if confirmed, be 
receiving some reports from some commissions with respect to 
this, and I would like to be sure to honor that process, and 
once I receive those and review and understand what those 
recommendations are, I would be delighted to commit to being 
close in communication with you and to take it very seriously.
    It is a very important subject. I have the highest regard 
for Brian Miller and the Inspector General Office at GSA, and I 
am deeply interested in being sure that he is able to play his 
role in supporting us. A good IG allows an administrator to 
sleep at night, and I do not want to diminish that role in any 
way.
    Senator McCaskill. I heard the earlier testimony about how 
we had spread acquisitions out over many places in the 
government, and as always, the goal was that we were going to 
get it cheaper. It has not really turned out that way. It is 
not cheaper. What really has happened is that there are 
agencies that advertise their ability to get you stuff, and 
then they get a hit on it, they get a cut, which is in their 
best interest to do. And then there is also shopping that has 
to do with ease of how quickly you can get around regulations 
and bureaucracy. And I get that. I mean, if you need something 
in government, you want to be able to buy it without having to 
spend 16 months in some kind of bureaucratic bungling and the 
failure of getting anybody to make a decision and so forth. So 
I think we made it easier to buy stuff. I am just not sure that 
we paid enough attention to value in terms of the taxpayer 
getting the best value.
    I think it is time for us to take a broad look--and 
hopefully we can do this on the Subcommittee--at the various 
goals here. The first and foremost goal is to get a good value 
for taxpayers. That is more important--I have a famous story 
that I told many times. I went to Iraq looking at contracting. 
I had a general say to me, ``I did not care how much it cost. I 
wanted three kinds of ice cream in the mess yesterday.'' OK? 
Well, I get that. And I appreciate his candor. And, frankly, 
most people in government would not be that candid. But that is 
part of the problem. It is three kinds of ice cream in the mess 
yesterday as opposed to do we have systems in place that are 
making sure we are competitive, making sure we are getting the 
best bang for the buck. And you know and I know, and I think 
everybody in this room knows, that we got away from that by 
diminishing our acquisition personnel and completely 
decentralizing purchasing to the point that the right hand does 
not know what the left hand is doing.
    So, I think that we will see a lot of your office as it 
relates to the contracting work we are going to try to do on 
the Ad Hoc Subcommittee on Contracting Oversight, and I would 
hope that you would help designate somebody on your staff to 
work with us on these issues of how we can get back to more 
accountability in contracting.
    Ms. Johnson. I would be delighted to, if confirmed.
    Senator McCaskill. Great. The last thing I really wanted to 
talk to you about was the issue of buildings that were under 
lease where bids had been let but, because of the credit market 
crisis, have stalled. And there is a silver lining to that dark 
cloud, and that is, if we have non-performing contractors that 
have received the bids because of the credit market that gives 
us an excuse to rebid. And right now construction costs are 
incredibly low. So there is no doubt whatever was bid 12 months 
ago, 18 months ago, if it was bid today, we would get a better 
value.
    So we have not been able to get information about a 
building in St. Louis County that is very important. It is a 
records center for the military. The contractor has been unable 
to perform, and we understand now, but not directly, that the 
reason that everyone is holding off is he is saying, ``I am 
going to be able to get to the table,'' but now we are hearing 
that the reason he is going to get to the table is he is going 
to the Missouri government for State financing on bonds to help 
him get there.
    So what started out as a certain value for the taxpayers is 
now going to be augmented, potentially, by additional taxpayer 
help, and to me that does not seem like that is the right way 
to go about it.
    So I would appreciate your attention because if this is 
going on in one place, I bet it is going on in other places, 
where people who made bids on projects are not able to meet 
their obligations because they cannot get the credit right now, 
which is too bad. But we ought to make sure we are taking full 
advantage of that in terms of value that we might be able to 
receive on behalf of the taxpayers.
    Ms. Johnson. I completely agree with you about the silver 
lining, that we should be looking for the silver linings as the 
economy and the financial markets are shifting the terms on 
many of these projects and, indeed, both on the lease and the 
construct projects. I trust and I hope to understand that as 
well as we can and to take advantage of that for the 
government, yes.
    Senator McCaskill. And your office has not been able to get 
back to me. I specifically want to make sure that I understand 
that if this person who won this bid, if he is able to perform 
only with the assistance of State government help, I think we 
need to take a hard look at it.
    Ms. Johnson. If confirmed, I will commit to exploring that 
and understanding it and be in communication with you about it.
    Senator McCaskill. Thank you very much. Thank you, Mr. 
Chairman.
    Chairman Lieberman. Thank you very much, Senator McCaskill. 
Excellent questions.
    I just have two more questions I want to ask you, Ms. 
Johnson. First is the general area of cyber security. This has 
engaged the attention of this Committee. The Department of 
Homeland Security particularly has unique responsibility for 
cyber security for non-defense government sites and for 
interacting with the private sector. Obviously, the President 
announced a new cyber security policy featuring a new cyber 
security coordinator in the White House.
    As you well know--and we talked about this earlier--the 
Federal Government through its tremendous buying power can 
influence activities of the vendors, of the sellers. The last 
estimate I have seen says that we are spending $76 billion a 
year for information technology. And it seems to me that there 
is an opportunity here for GSA to acquire contractors in a way 
that may encourage the providers to keep in mind cyber security 
that may have broader implications than just for the Federal 
Government as a purchaser. And I wonder what you think of that, 
if you have thought about it, and what you have generally on 
the extent to which GSA can contribute to raising our cyber 
security. As you well know, we now know our sites and private 
sites are being attacked every day by the strange combination 
of hostile nations, non-state actors like terrorist groups, 
organized criminal groups, and just plain hackers.
    Ms. Johnson. I am certain that, if confirmed, I will be in 
a position to learn a lot more about this very complicated 
subject. I think that cyber security is baffling to the buyer, 
if you will. How do you know what you can trust in terms of the 
products? And GSA, I would think, could provide some useful 
information, useful perspectives in helping people sort through 
that.
    When you start thinking of anti-virus software and how do 
you have trusted access through the Internet and encryption, 
you start beginning to be swamped by this. And because of its 
complication, we could, I think, be a much better concierge for 
people on making those decisions.
    Clearly, the buying power and the amount that we will be 
regularly consuming should alert us to thinking about what kind 
of opportunities we could provide, and I am interested in 
learning about this. I cannot tell you much more specifically 
right now, but as I learn, I would be happy to communicate 
about that. And I think GSA does play a role.
    Chairman Lieberman. Good. Please do. I really just wanted 
to put that quite literally on your screen.
    Ms. Johnson. Thank you.
    Chairman Lieberman. The last question is one that is local 
for the Committee, which is the construction of the new 
headquarters for the Department of Homeland Security at St. 
Elizabeths. The legislation creating the Department came out of 
this Committee. We are both very proud of it and we push it 
hard to be better every day. It is very hard for it to operate 
across the 22 agencies that it does, spread out as it is, so 
this is really important to homeland security.
    I gather that construction of the Department of Homeland 
Security headquarters will be the largest construction project 
for the Federal Government in the Washington area since the 
building of the Pentagon. I do not know if anybody has briefed 
you on it yet, but large projects have a tendency of going awry 
and taking longer and costing more than they should. And I 
wanted to ask you to please give it your personal attention and 
make sure that it is being properly managed, and then also to 
ask that you keep us informed as to how it is going.
    Ms. Johnson. I will commit to working very closely with you 
on it. Clearly, this is very important both for the Department 
and for the District of Columbia, and we need to be excellent 
stewards in that process.
    Chairman Lieberman. Thank you. Do you have anything else 
you would like to say in your defense?
    Ms. Johnson. I am fine. Thank you. [Laughter.]
    I appreciate the opportunity, but no, I am fine. Thank you.
    Chairman Lieberman. Your testimony has been very helpful. 
Without objection, we are going to keep the record of this 
hearing open until 12 noon tomorrow for submission of any 
additional questions or statements. My hope is that we can move 
your nomination through the Committee and through the Senate as 
quickly as possible because GSA, the President, and the 
government need you to be at your desk. Thank you very much.
    Ms. Johnson. Thank you, Senator.
    Chairman Lieberman. The hearing is adjourned.
    [Whereupon, at 11:14 a.m., the Committee was adjourned.]


                            A P P E N D I X

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