[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]



 
                    RICHARD H. POFF FEDERAL BUILDING
                       RENOVATION: IS IT COSTING
                         THE TAXPAYER TOO MUCH?

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


                                (112-27)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON

    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT 

                                 OF THE

                              COMMITTEE ON

                   TRANSPORTATION AND INFRASTRUCTURE

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 14, 2011

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


         Available online at: http://www.gpo.gov/fdsys/browse/

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman

DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey        Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington    MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire       RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois             GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota             MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas              JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana               TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri                 HEATH SHULER, North Carolina
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania         LAURA RICHARDSON, California
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
STEPHEN LEE FINCHER, Tennessee       DONNA F. EDWARDS, Maryland
JEFFREY M. LANDRY, Louisiana
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
VACANCY

                                  (ii)




 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

                   JEFF DENHAM, California, Chairman

TIMOTHY V. JOHNSON, Illinois         ELEANOR HOLMES NORTON, District of 
ERIC A. ``RICK'' CRAWFORD,           Columbia
Arkansas,                            HEATH SHULER, North Carolina
  Vice Chair                         MICHAEL H. MICHAUD, Maine
RANDY HULTGREN, Illinois             RUSS CARNAHAN, Missouri
LOU BARLETTA, Pennsylvania           TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      DONNA F. EDWARDS, Maryland
PATRICK MEEHAN, Pennsylvania         BOB FILNER, California
RICHARD L. HANNA, New York           NICK J. RAHALL II, West Virginia
STEPHEN LEE FINCHER, Tennessee         (Ex Officio)
JOHN L. MICA, Florida (Ex Officio)

                                 (iii)

                                CONTENTS

                                                                   Page

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

                               TESTIMONY

Dudley, Julia C., Clerk of Court, United States District Court, 
  Western District of Virginia...................................     4
Ehrenwerth, David, Regional Administrator, Mid-Atlantic Region, 
  General Services Administration................................     4
Goodlatte, Hon. Bob, a Representative in Congress from the State 
  of Virginia....................................................     4
Miller, Hon. Brian D., Inspector General, General Services 
  Administration.................................................     4

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Norton, Hon. Eleanor Holmes, of the District of Columbia.........    30

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Dudley, Julia C..................................................    32
Ehrenwerth, David................................................    35
Goodlatte, Hon. Bob..............................................    39
Miller, Hon. Brian D.............................................    41

                       SUBMISSIONS FOR THE RECORD

General Services Administration, responses to questions from the 
  Subcommittee on Economic Development, Public Buildings, and 
  Emergency Management...........................................    45

                        ADDITIONS TO THE RECORD

Karnes, Daniel E., LTC, AUS, (Ret), President of the Roanoke 
  Valley Veterans Council, letter to Hon. Jeff Denham, a 
  Representative in Congress from the State of California........    48


[GRAPHIC] [TIFF OMITTED] 65722.001

[GRAPHIC] [TIFF OMITTED] 65722.002

[GRAPHIC] [TIFF OMITTED] 65722.003

[GRAPHIC] [TIFF OMITTED] 65722.004



                    RICHARD H. POFF FEDERAL BUILDING



                       RENOVATION: IS IT COSTING



                         THE TAXPAYER TOO MUCH?

                              ----------                              


                        THURSDAY, APRIL 14, 2011

                  House of Representatives,
       Subcommittee on Economic Development, Public
                Buildings and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:09 a.m. in 
Room 2167, Rayburn House Office Building, Hon. Jeff Denham 
(Chairman of the subcommittee) presiding.
    Mr. Denham. The subcommittee will come to order. First, let 
me welcome our witnesses here with us today. I especially want 
to recognize Representative Goodlatte. Thank you for joining 
us. Virginia--the renovation of the Richard H. Poff Federal 
Building in Roanoke, Virginia, is on GSA's list of Recovery Act 
projects, costing the taxpayer more than $50 million, not 
including the cost of temporary space for the tenant agencies.
    Last Congress the Recovery Act provided $5.5 billion from 
GSA's Federal building fund, $4.5 billion of which was 
designated for converting Federal buildings into high-
performance green buildings, trumping job creation as a 
priority. Greening buildings can be good if it is cost 
effective. But as Chairman Mica's ``Sitting on our Assets'' 
report pointed out, certain features like solar panel roofs 
typically do not see any return until well after the useful 
life of the roof.
    In fact, the GSA inspector general has found in a number of 
cases pay-back periods well beyond reasonable return to the 
taxpayer. It is unclear whether this lack of reasonable return 
was taken into account before GSA proceeded with this project, 
and whether any such analysis guided GSA in which greening 
features made sense and which did not.
    In addition to the cost, this project is expected to have a 
detrimental impact on the operations of the tenant agencies. 
The Poff Federal Building houses critical Federal entities, 
including the Department of Veterans Affairs and the U.S. 
Courts. The renovation will likely disrupt these operations, 
including relocation, relocating the VA in up to four different 
locations, raising concerns among a number of Members from the 
Virginia delegation as to how they will impact the processing 
of veterans' claims.
    And on top of these issues, the GSA IG has raised questions 
as to whether GSA followed all applicable contracting laws in 
awarding the construction contract, further bringing into 
question whether the costs are justified. Last November the GSA 
inspector general issued a report on this project, concluding 
that GSA failed to get an independent government estimate for 
the construction, and that by including the guaranteed maximum 
price in the RFP, GSA's pricing was not based on competition, 
as required by law.
    Some of the questions we hope will be addressed today 
include: is this renovation costing the taxpayer too much 
money; did GSA fully weigh the costs and benefits of the 
greening features and alternative housing solutions before 
proceeding with this project; did GSA get the best price for 
this deal; what steps is GSA doing to comply with the 
contracting laws; how many local jobs will this project create; 
and what is GSA doing to minimize the impact on the building's 
tenants?
    Again, I want to thank Congressman Goodlatte for his 
leadership on this issue, and hope we can get the answers to 
these important questions.
    I would now like to recognize Ranking Member Norton from 
the District of Columbia for 5 minutes to make any opening 
statement she may have.
    Ms. Norton. Thank you, Mr. Chairman. And thank you very 
much for calling this hearing.
    The American Recovery and Reinvestment Act of 2009 provided 
$5.5 billion to the General Services Administration, $4.5 
billion of which was to convert GSA buildings into high-
performance green buildings in all 50 States, the District of 
Columbia, and the 4 territories. The Recovery Act's primary 
purpose is to stimulate economic activity through investments 
and preserve and create jobs, spur technological advances to 
enhance energy conservation, and improve infrastructure to 
provide long-term economic benefits for the government and for 
the people.
    The Federal Government and the States were responsible for 
addressing the badly needed infrastructure upgrades that we got 
done in the Recovery Act, which pushed the government's 
responsibilities further during the response, which pushed 
GSA's responsibilities further during this recession, since 
infrastructure construction would also create jobs during the 
worst recession since the Great Depression.
    Our goal, however, has been not only to distribute the 
funds quickly to spark job creation, but to ensure that these 
investments lead to long-term savings.
    We are especially grateful that a recent Congressional 
Budget Office report on the Recovery Act released 2 months ago 
shows that the Recovery Act has had a positive effect on the 
Nation's economy. CBO estimates that the Recovery Act lowered 
the unemployment rate between .7 and 1.9 percentage points, 
increased the number of people employed by 1.3 million to 3.5 
million Americans, and increased the number of full-time jobs 
by 1.8 million to 5.0 million, compared with what would have 
occurred without the Recovery Act.
    According to CBO, the Recovery Act saved jobs, increased 
job opportunities, and increased the gross domestic product by 
3.5 percent. The Recovery Act was enacted while I chaired this 
subcommittee, when jobs were all that was on the country's 
mind. I see the--to see the quickest possible job creation, the 
subcommittee held six tracking hearings.
    We should give GSA credit, because credit is due. GSA has 
awarded contracts and begun work on 273 Recovery Act projects 
worth $5.2 billion, which was almost all of the Recovery Act 
funds under their jurisdiction. As of January 2011, GSA had 
already completed work on 26 projects, totaling $100 million. 
With bids for infrastructure projects coming in much lower than 
expected, GSA has saved the government $565 million, and has 
redirected these funds to 17 additional projects which urgently 
needed infrastructure upgrades. These projects will result in 
the installation of 78 roofs, including 68 photovoltaic rays on 
roofs, putting in place 140 light systems, installing 52 water 
systems, as well as completing 222 system tune-ups and 
recommissionings.
    Because of the high level of transparency, and the 
reporting requirements the committee insisted upon, there has 
been an unprecedented level of accountability while 
implementing these projects. Moreover, the Recovery Act 
actually established a special recovery board composed of 
inspectors general of the agencies that received funds. This 
unusual approach assured an environment where taxpayers' 
dollars would be sent quickly and--spent quickly and well, and 
the posting online of projects on each project, along with our 
frequent subcommittee hearings, all contribute to GSA's 
progress in meeting the mandate to get the funds on the street 
quickly but carefully.
    Along with other Federal agencies and the States, GSA 
stretched Recovery Act dollars further than anticipated. 
However, GSA should get special credit. Because, unlike most of 
the agencies, GSA was not a pass-through to the States. GSA was 
directly responsible for getting the funds out and working on 
the construction that produced the jobs. However, GSA did the 
work and deserves the credit. However, although GSA did the 
work and deserves the credit, GSA also must take a 
responsibility for whatever issues we find as today's hearing 
indicates.
    The success of the Recovery Act in helping the Nation 
emerge from the Great Recession in no way negates the need for 
continuous vigorous oversight by this subcommittee, or suggests 
that there are not problems from which GSA and the subcommittee 
can learn. Our subcommittee continues to bear a direct 
responsibility for the stimulus funds under our jurisdiction.
    Again I want to thank Chairman Denham for continuing these 
oversight efforts. Today we will focus our oversight on the 
renovation and modernization of the Richard H. Poff Federal 
Building in Roanoke, Virginia, funded by the Recovery Act. The 
Poff Building was constructed in 1975. It is owned by the 
government, and it is approximately 316,000 gross square feet 
of space occupied by the Department of Veterans Affairs, the 
U.S. Courts, the U.S. Marshal Services, and other agencies.
    Although the building is 35 years old, it has never had a 
comprehensive modernization. The Recovery Act modernization of 
the Poff Building includes a replacement of the window curtain 
wall, installment of an HVAC system, renovations of the 
bathrooms, upgrades to the lighting fixtures, and the 
installation of new, sustainable roofs, including a solar 
system to generate electricity. This project will increase the 
life of this Federal asset, and will result in a high-
performing, energy-efficient Federal building and ensure that 
the Federal investment in space the government owns is 
preserved, ensuring the highest and best use and its continuing 
contribution to the Federal building fund, as well as avoiding 
the need for rental space for these agencies.
    However, in reviewing this particular project, the GSA 
inspector general has raised concerns about whether the 
procurement for this project met competition requirements, and 
whether GSA has an adequate system of controls to ensure that 
the Poff Building project met competition requirements. GSA has 
concurred with both findings of the IG report, and is committed 
to implementing its recommendations.
    In addition, the U.S. representative from Roanoke, 
Virginia, and the two U.S. senators from Virginia have raised 
concerns about the impact of the operations of the Roanoke 
Veterans Affairs regional office, the building's largest 
tenant, and the efficacy of the energy improvements. We need to 
hear from GSA about what gave rise to the problems in order to 
ensure that they have been ameliorated, and will not occur 
again.
    I encourage GSA to allocate funds to projects that provide 
the best return in maintaining our public building inventory, 
and putting even more Americans to work. I look forward to 
hearing from the witnesses today about the modernization of the 
Poff Building and the cost benefit analysis used in selecting 
this project for modernization.
    I thank you, Mr. Chairman.
    Mr. Denham. Again I would like to welcome our witnesses 
here today. We will now call our panel of witnesses. The first, 
Honorable Bob Goodlatte from Virginia. Welcome.

 TESTIMONY OF HON. BOB GOODLATTE, A REPRESENTATIVE IN CONGRESS 
  FROM THE STATE OF VIRGINIA; HON. BRIAN D. MILLER, INSPECTOR 
  GENERAL, GENERAL SERVICES ADMINISTRATION; DAVID EHRENWERTH, 
 REGIONAL ADMINISTRATOR, MID-ATLANTIC REGION, GENERAL SERVICES 
  ADMINISTRATION; AND JULIA C. DUDLEY, CLERK OF COURT, UNITED 
      STATES DISTRICT COURT, WESTERN DISTRICT OF VIRGINIA

    Mr. Goodlatte. Well, thank you, Mr. Chairman, Ranking 
Member Norton, other members of the committee. I very much 
appreciate the subcommittee's willingness to hold a hearing on 
this important issue, and for allowing me to testify regarding 
the Richard H. Poff Federal Building renovation in Roanoke, 
Virginia.
    My statement exceeds 5 minutes, so I know that is a part of 
the record, and I will summarize the points.
    First of all, I want to say that when this--this building 
was built in 1975 at a cost of approximately $14 million. And 
when it was announced in April 2 years ago that this would be a 
renovation project that would cost initially $51 million to 
replace the roof, windows, bathrooms, and HVAC system, I 
immediately began receiving lots of contact from my 
constituents, who thought that this was a gross waste of money 
on a building that has received not a lot of plaudits over the 
years from the people who occupy it as being a good building. 
And that investment did not seem worthwhile to them. This 
included contacts from architects and engineers and others who 
have experience with these types of contracts.
    And so, I immediately began asking questions of the GSA. 
And for about a year, that correspondence took place just 
between me and the GSA. I did not go public with it, because I 
really wanted to get to the bottom of this. I was not looking 
for any kind of attention to the project, other than what was 
already being received. And then, when I repeatedly did not get 
any cooperation from the GSA, I finally went public with the 
issue, and a lot more information has been forthcoming, as a 
result of that, which is, I think, of benefit to the committee 
in examining what went wrong here.
    The GSA repeatedly failed to fully answer my many questions 
about the project's bid process and design process, in a 
pattern defined by a lack of transparency, unresponsiveness, 
and dismissal of the public's concerns about this project from 
its inception. The GSA's inspector general audited the project, 
and found that the agency provided the bidders the maximum 
contract amount, in violation of Federal procurement laws, 
giving bidders that information and depriving taxpayers of a 
fair process to determine the true cost of the project.
    The Ranking Member correctly noted that the environment for 
these types of projects has been very good, in terms of getting 
bids below the estimated cost. That did not happen in this 
instance because the GSA said the maximum amount that they 
would pay, and guess what? That is what the bids were.
    In addition, because of the lack of study ahead of time, it 
has now been determined that the primary tenant of the building 
will have to move out for a long period of time. So this is 
going to be a cost overrun of at least in excess of $60 
million, probably $65 million.
    Other than a two-page summary prepared after the project 
was commenced, the agency has never provided a comprehensive 
cost benefit analysis showing that the renovations would be 
more fiscally responsible than constructing a new building, nor 
have they considered a number of other alternatives that could 
be less expensive and more effective, including not doing major 
renovations, selling the building, building a new Veterans 
Affairs building, as was suggested by Virginia Senators Warner 
and Webb, or building a new courthouse. The GSA bypassed the 
normal procurement process, similar to what was used to build 
the new Social Security Administration building in Roanoke, 
preventing the full disclosure of the supposed benefits and 
project costs of green updates.
    The safety and security of the Poff Building has been given 
only cursory attention, despite the structure being located 
along a major thoroughfare in Roanoke's central business 
district. I attended a meeting in October of 2010 with members 
of the Poff Building's security committee and GSA officials to 
discuss the security of the building. To my knowledge, no 
action regarding the security of the building has been taken 
since then, even though it is widely known that there are major 
security concerns with this building that houses the United 
States District Court, which deals with a lot of controversial 
and high-profile criminals and other types of court 
proceedings.
    The security upgrades to the building, which will have to 
be done, will require additional funds, because the planned $51 
million renovation does not include funding to address the 
security needs of the building. The project's costs have 
ballooned by more than $10 million, due to the need to relocate 
the Veterans Affairs offices to four different locations in 
downtown Roanoke for up to 3 years, posing logistical concerns 
and inconveniencing veterans, many of whom are disabled.
    Many concerns have been raised about the disruption of the 
processing of claims, inadequate work facilities, problems with 
employee morale, files being separated in five different 
locations. The central file storage will remain in the Poff 
Building while the construction is going on, while the walls of 
the building are off of it for periods of time. The files will 
have to be shuffled around between different floors in order so 
that they are not exposed to the environment. There are serious 
problems with what is being planned for this process.
    I have received many complaints from veterans organizations 
and individual veterans, as well as from many employees in the 
building. In fact, one local veterans organization filed for an 
injunction, seeking to block the relocation of the Veterans 
Affairs office while the renovation project proceeds.
    I have called for the project to be halted, because I do 
not believe it is worthwhile. Failing that, my faith in the GSA 
remains deeply shaken, and I hope that this public hearing will 
offer additional opportunities to understand why the Poff 
Federal Building project has been conducted in such an 
unconvincing manner to date.
    Thank you, Mr. Chairman.
    Mr. Denham. Thank you.
    Now the Honorable Brian Miller, inspector general, U.S. 
General Services Administration.
    Mr. Miller. Thank you, Mr. Chairman. Good morning, Chairman 
Denham, Ranking Member Norton, distinguished members of the 
subcommittee. Thank you for the opportunity to testify here 
this morning.
    My office reviewed the Poff Federal Building in Roanoke, 
Virginia, and found that GSA awarded the contract without 
adequate price competition, in violation of the law. This 
hearing asks the question: ``Are taxpayers paying too much for 
the renovations to the Poff Building?'' The answer is we cannot 
tell, and we cannot tell because of how GSA awarded the 
contract. GSA set the price for construction, instead of using 
competition. Without competition, we cannot gauge whether the 
prices are fair and reasonable.
    Additionally, GSA did not obtain an independent cost 
estimate to evaluate price reasonableness. Thus, GSA did not 
follow the proper procedures for ensuring fair and reasonable 
prices for the Poff Federal Building.
    On top of all this, we have an untimely and ineffective 
cost benefit analysis. A cost benefit analysis compares 
alternatives of building a new building, or renovating an 
existing building. This is done as part of the decisionmaking 
and planning process to inform the decision that is ultimately 
made later. GSA, however, performed its cost benefit analysis 
after the decision had already been made, and the contract 
awarded.
    Even the amounts of Federal dollars spent on this project 
do not seem to add up. This project was listed on the Recovery 
Act's spending plan at $51 million. As of April 6th of this 
year, however, the contract amounts for the design, 
construction, and management of the Poff Building reported in 
the Federal procurement data system were $52.3 million, an 
increase of over $1 million.
    The Poff Building is not the only project where competition 
was lacking. We have identified six Recovery Act projects where 
GSA violated the Competition in Contracting Act by incorrectly 
using the construction manager as constructor methodology. I 
will refer to that as CMC.
    In each case, the construction price lacked price 
competition, as it was either set by GSA or set through sole-
source negotiation with the contractor. In each case, the 
Competition in Contracting Act was violated.
    My office has recommended that GSA institute a system of 
management controls to ensure that contractors, using the CMC 
methodology, meet competition requirements. In response, GSA 
has developed a corrective action plan. The plan includes 
standardizing the CMC methodology, issuing guidance, and 
providing training to GSA project and contracting staff, and 
having CMC procurements reviewed on an annual basis. GSA has 
begun to implement these corrective actions by issuing a 
standard contract template and guidance for CMC contracts. 
However, other steps are yet to be completed.
    GSA has an obligation to spend the taxpayers' money on 
sound, well-thought-out projects that make the best use of 
taxpayer dollars. Our reviews show that GSA does not always 
meet this obligation, and did not do so here, at the Poff 
Federal Building.
    I welcome any questions the subcommittee may have. Thank 
you.
    Mr. Denham. Thank you, Mr. Miller.
    Mr. David Ehrenwerth, regional administrator, U.S. General 
Services Administration. You may start your testimony. Thank 
you.
    Mr. Ehrenwerth. Thank you. Good morning, Chairman Denham, 
Ranking Member Norton, and distinguished members of the 
subcommittee. I very much do appreciate the opportunity to come 
here today and discuss this really exciting renovation of the 
Richard H. Poff Federal Building and courthouse in Roanoke.
    This absolutely critical project, which is funded by the 
American Recovery and Reinvestment Act, is a much needed 
investment in the GSA inventory that is going to keep a core, 
long-term asset functioning, while increasing its performance 
and its energy efficiency. This building modernization is part 
of our commitment to help the Nation's economic recovery by 
investing in aging infrastructure while creating jobs in local 
communities.
    As a responsible asset manager, GSA must ensure that our 
buildings are well-functioning, safe, and welcoming for all 
tenants and visitors. We have expertise in effectively managing 
building operations, and responding to the concerns of our 
occupants.
    The Poff Federal Building, which, as you have heard, houses 
the Department of Veterans Affairs and the courts, is 36 years 
old, and has never had a major renovation. The building is 
really in need of significant repairs to ensure that the 
building operates efficiently and provides a workplace 
environment that helps these crucial tenant agencies meet their 
missions. A modernization of this facility is simply the most 
cost effective way to meet the government's housing needs in 
Roanoke.
    The Poff Federal Building was categorized as an under-
performing asset in GSA's inventory. Our building surveys and 
studies show that significant reinvestment is needed to repair 
this aging building. The Recovery Act provided us with the 
opportunity to invest the funds necessary to update the 
building systems and features with high-performance ones. Once 
this project is complete, the building will be a performing 
asset with an anticipated strong financial return, while 
satisfying the long-term customer needs. This project will 
extend the useful life of the building, and will improve public 
accessibility, while keeping Federal workers in owned and not 
leased space.
    Specifically, this renovation includes replacing the 
inefficient, poor quality, and leaking single-pane glass 
curtain wall with a new energy-efficient curtain wall that will 
better regulate the building's internal temperatures, and 
reduce operating costs. Currently, the windows are so bad that 
some of the tenants cannot even see out them, including our 
marshals.
    The project will also replace the deteriorating roof with a 
solar system to generate electricity. This new roof will 
prevent heat build-up and reduce the building's air 
conditioning load. Additionally, this project will improve the 
building's lighting and mechanical systems with new, energy-
efficient systems and technologies. We are replacing failing 
building systems that have simply reached the end of their 
useful life, including the heating, ventilation, and air 
conditioning systems.
    Currently, half of the tenants in the space are hot, while 
half of the other tenants are cold, often on the same floor. A 
new system must be installed to improve building conditions and 
reduce further repair costs.
    GSA is also addressing deficiencies that impair our 
tenants' ability to serve the public, particularly the Veterans 
Administration and the veterans that they serve, which occupies 
about half the building. We are improving the accessibility for 
handicapped individuals. We are renovating public restrooms to 
better serve our Nation's disabled veterans who visit this 
building, by meeting the Architectural Barriers Act 
accessibility standards, which is the Federal equivalent of 
complying with the Americans with Disabilities Act.
    Additionally, the floor structure will be strengthened to 
ensure that it is capable of safely supporting the current and 
future weight file needs of the VA, a crucial activity.
    GSA wants to ensure that we pursue this project in 
partnership with the community and to help create jobs. I have 
participated in a number of meetings and forums in Roanoke, 
including one with the city council of Roanoke, to explain the 
benefits and opportunities of the project, and why we are 
pursing it. The very enthusiastic response we received was 
quite gratifying.
    In these forums I have discussed the importance of ensuring 
that GSA assist the general contractor, Balfour Beatty, in 
outreach to the community and seeing where there might be 
opportunities for subcontracting participation. And there are 
many. Balfour Beatty has held a number of small business forums 
on its own, including one just this week with veterans groups 
and others. And they will continue to do so throughout the 
project to help engender the participation of local businesses 
in subcontracting.
    The design of the Poff Federal Building is now complete. 
The swing leases have been awarded. And construction begins 
this summer. The investments in the Poff Building will help 
stimulate job growth, increase building performance, and 
transform the Poff Federal Building into something it is not 
now, a welcoming, sustainable, productive workplace for Federal 
employees and for the public who come to this building to 
receive necessary and important services.
    As I said at the beginning, I greatly appreciate the 
opportunity to come here today, and to discuss this important 
investment. And I welcome any questions you have.
    Thank you.
    Mr. Denham. Thank you.
    And now, Ms. Julia Dudley, clerk, U.S. District Court for 
the Western District of Virginia. Welcome.
    Ms. Dudley. Good morning, Chairman Denham, Ranking Member 
Norton, and esteemed members of the subcommittee. I am the 
clerk of court for the Western District of Virginia. And I 
appreciate you giving me the opportunity today to come and give 
testimony of the impact this project is going to have on the 
operations of the court.
    Last July, the clerk's office moved from the third floor of 
the Poff Building into renovated space on the fifth floor. This 
move, in itself, was a long time coming. The move put 24 of my 
staff members into contiguous, well-designed, and functional 
space. The environment of the office--the morale lifted, the 
staff is very, very happy with our new space. It is a 
significant change from the chopped-up, cramped, and 
dysfunctional space we once occupied.
    The new space also provides a private office where 
attorneys and the public can access a public computer terminal. 
And there they can file pleadings, they can check court 
records. We also have an appropriately sized and comfortable 
assembly room for our jurors and grand jurors, and also for the 
citizens-to-be where they can wait until a naturalization 
ceremony begins.
    However, by this summer, we will be relocating staff around 
and within our space to accommodate the replacement of windows, 
lights, and the HVAC system, all part of the ARRA project, as 
we call it.
    GSA has hosted numerous informational meetings with the 
court family. These meetings have been good. The GSA project 
manager and other project participants have walked us through 
the phasing and construction details of the project. GSA has 
also been very responsive to our requests to accommodate the 
operational needs of the court. However, once the ARRA project 
begins, and for its duration, we will again occupy chopped-up, 
cramped space, and lose privacy and functionality.
    Neither the clerk's office nor the probation office nor the 
four judges whose chambers are located in the Poff Building 
will move during this project. Not that we elected to stay in 
this space, but because of lack of rentable space with 
courtrooms in the Roanoke area. So, instead of moving away from 
the construction, we will stay put throughout the 3 years, or 
however long it takes to finish the construction, as we carry 
on with our duties.
    Some of the direct impacts of this project will be: lost 
work time as we shuffle and relocate within our own spaces; 
additional work for our IT department; reduced courtroom 
capacity--we will lose the magistrate judge's courtroom for 
approximately 12 months to however long during one phase of 
this project. Also, work on the mechanical, electrical, and 
plumbing will go on every day on every floor throughout the 
project. Noise, dust, the presence of workmen will be a 
distraction to the staff.
    There likely will be temporary loss of power, heating, air 
conditioning. There could be a disruption to our security 
system and our IT infrastructure. The cafeteria in the building 
closes during the project. Because the windows will be blocked 
by temporary walls, we will lose some of the natural lighting 
in our space. The employees who are now in offices along the 
perimeter of the building will be relocated to temporary 
cubicles constructed within the interior of our office. It is 
like we are all squeezing together, and we will have to learn 
with inconvenient clutter for the next several years.
    Gone will be the private office for where the computer 
terminal is located. Gone will be the appropriately sized and 
comfortable room for our jurors, grand jurors, and citizens-to-
be. Additionally, the probation officers will have to move out 
of their offices into temporary structures that will afford 
little privacy to the officers and the clients who must visit 
them.
    My staff, just as all Federal employees, have been asked to 
conserve materials and cut back on spending. Now, we are being 
told that we will have to endure much disruption and 
distraction for the next several years while at work. With GSA 
being unable to relocate the court to outside space, the court 
and its related agencies will be the only occupants coming to 
work in what essentially will be a largely empty 14-story 
construction zone. No doubt you can imagine the impact this 
will have on the morale of the staff.
    Though I fully expect my staff to weather this construction 
period and continue to give services to the court and to the 
public, disruption of the work environment and our operations 
is just a fact of construction life. As with any construction 
project, you go into it with high hopes that the result will be 
good. However, you also have anxiety and uncertainty as to how 
long the project will actually last. But we are trying to keep 
the end in sight, and that end will be, hopefully, windows we 
can actually see out of, heating and air conditioning that 
works well, and a return to appropriate and functional space.
    Thank you for your time. I would be happy to answer any 
questions.
    Mr. Denham. Thank you, Ms. Dudley. I would at this time ask 
unanimous consent that our witnesses' full statements be 
included in the record. Without objection, so ordered.
    We will have two rounds of questioning this morning. We are 
going to keep a real strict time limit on the 5-minute rule. I 
would like to start, first of all, with Representative 
Goodlatte.
    You have been--you have done a lot of work investigating 
this topic, this project. From what you have found, do you 
believe GSA got the best deal for the taxpayers, and could you 
expand on----
    Mr. Goodlatte. Well, thank you, Mr. Chairman. As Mr. Miller 
says, we will never know what the best deal was. But, as the 
Ranking Member pointed out, on a multitude of these projects 
around the country, bids have come in lower than was 
anticipated. That did not take place here, because the GSA 
broke the law and who knows how much the savings might have 
been--$10 million, $15 million.
    And that just is--in terms of the cost of this project, 
there was no cost benefit analysis done to determine whether 
not doing this building or doing this project in a completely 
different way would have been more effective, and addressed the 
needs of the tenants. We have heard from the clerk of the 
court. The VA has an even bigger problem, in that they are 
dispersed to four different locations, while their files remain 
in the construction zone.
    I call your attention to all members of the committee. This 
is the cost benefit analysis that was done after the decision 
was made. Two small paragraphs on this page, and two columns of 
figures on this page, and some of the assumptions made here--I 
would love to have the committee ask some other contractors or 
architects or engineers whether, if you built a new building, 
your energy costs would be identical to this building.
    It seems to me--and I am not an architect or engineer--but 
if you build a new building, the energy efficiency with new 
materials and new design is going to yield savings that are not 
achieved here. And yet, even after they are all done with this, 
the savings over the life of the 30-year projected life of this 
is only $8 million out of $111 million that they are talking 
about.
    In addition, the alterations, both by the building owner, 
the GSA, and by the tenants are estimated to be the same. The 
construction costs are estimated to be vastly higher for a new 
building, and yet there is no documentation of that. And the 
design costs are double. But I think they have put an awful lot 
of effort and energy into the design of this building for not 
much benefit.
    Mr. Denham. And could you also explain how the law was 
broken in this case?
    Mr. Goodlatte. Yes. As the inspector general discovered, 
the GSA transmitted to the bidders the maximum amount that the 
government was willing to pay on the project, prior to the 
bidding taking place. That, I think, resulted in all of the 
bidders bidding that maximum amount. And did we lose $10 
million, $15 million? I do not know how much we lost. But 
clearly, this was not done properly, and should have been done 
properly, and perhaps still could be done properly. But it is 
very disappointing to me and to my constituents.
    Mr. Denham. And, Mr. Miller, as you look at GSA contracts, 
is this typical, where the max bid is given out, or is it a 
more competitive process, secret bid process?
    Mr. Miller. Mr. Chairman, the GSA is required to get 
competition under the Competition in Contracting Act by not 
getting--by giving out the maximum guaranteed price, they 
essentially did not get competition for this project, in 
violation of that act.
    They have had this problem in other projects. I have listed 
six of those projects in my written testimony. And they are 
primarily connected to the use of this vehicle, the 
construction company as constructor methodology. And that 
methodology does have its virtues, which perhaps Mr. Ehrenwerth 
would like to explain. But it does create problems if it is not 
used correctly. And one of the chief problems is no 
competition, sole sourcing, and the result is taxpayers do not 
get their money's worth.
    Mr. Denham. But in this case there was competition. You had 
10 bidders, correct?
    Mr. Miller. There was--first of all, there was competition 
at the design phase, and that is $225,000 worth. So there was 
some competition. But the bulk of the project, the $39 million 
worth of it, the bulk of the project was not adequately 
competed, because they gave out the maximum price. And all the 
contractors, not surprisingly, put in the maximum--guaranteed 
maximum price. So there was no competition there, they all put 
the same price in, the price they got from GSA.
    Mr. Denham. And how many bids came in on the final process?
    Mr. Miller. I am not aware of exactly how many bids came 
in, but they all bid the same amount, so the competition 
element was not there.
    Mr. Denham. Mr. Ehrenwerth, how many bids came in in the 
final process?
    Mr. Ehrenwerth. I can confirm that to you. I believe it was 
10.
    Mr. Denham. Would that have completed the entire process?
    Mr. Ehrenwerth. No, it did not. If I might explain how this 
works to you----
    Mr. Denham. Briefly, and then we are going to go on to 
other questions, and I want to follow up on this on the second 
round, as well. But if you could, briefly----
    Mr. Ehrenwerth. Well, thank you. I respect and admire your 
interest in this, as well as the IG's, from whom we learn 
often.
    But the way this works, which I think is crucial to an 
understanding of the process, is that we use this construction 
method to get the contractor in earlier, to collaborate in the 
design, to have efficiencies and cost savings. It is true, as 
the IG points out, that, as we acknowledge, the guaranteed 
maximum price was not appropriate, and we are changing that.
    But what is missing from that analysis is that the vast, 
vast majority of the work on the project is accomplished by 
subcontractors who always were intended to be competitively bid 
in an open process, and under our contracts and procedures, all 
the vast majority of that saving is recouped by the government.
    So the bottom line of all of this is that there will be a 
competitive bidding of virtually the vast majority of this 
project. And the vast majority of that saving, after a small 
incentive to the general contractor to make sure we get the 
best and cheapest prices, will go right back to the Federal 
Government.
    So, the procedures, while clearly needing to be modified, 
are designed to preserve the best product for the best price, 
and get any savings back to the government.
    Mr. Miller. Mr. Chairman, if I could, very briefly? The----
    Mr. Denham. Very briefly.
    Mr. Miller. It is better to compete it upfront, so that you 
get the savings upfront. There may be some savings later on 
with subcontractors. Any savings, however, would have to be 
shared with the contractor, itself, so that that savings is----
    Mr. Ehrenwerth. Well----
    Mr. Denham. Thank you, thank you. We are not going to get 
into a debate here, but I would like to follow up on this on 
the next round of questioning.
    At this time I would like to turn it over to Ranking Member 
Norton.
    Ms. Norton. Mr. Ehrenwerth, you began to explain the 
agency, but I just want to say for the record I found your 
testimony wholly unresponsive to the subject matter of this 
hearing. This hearing is not about the project and its strong 
points and energy conservation. It is not about the local 
community--and I congratulate you on all of that.
    The very serious question is raised about the price 
competition. And the subcommittee, we have had some concerns 
about price that have emerged over time. For example, we have 
supported best value, because of the technical details and the 
need to take everything into account. But increasingly, best 
value does not seem to take price enough into consideration.
    You need to explain, first of all, if six projects were 
done, were these all six Recovery Act projects that were done 
using this?
    Mr. Miller. Yes.
    Ms. Norton. Yes, says Mr. Miller. So, all the other 
projects--none of the other projects uses construction manager 
approach?
    Mr. Miller. All six do.
    Ms. Norton. None of the other projects. They have 200-some 
projects. None of your other projects use this approach to the 
renovations that you know of, Mr. Miller or Mr. Ehrenwerth?
    Mr. Ehrenwerth. The technique is a standard one for the 
good purpose, as I believe, as I indicated----
    Ms. Norton. All right. If six used it----
    Mr. Ehrenwerth. Right----
    Ms. Norton. I have 5 minutes. If six used it, Mr. Miller, 
do you know of any other of the 275 or so that also used this?
    Mr. Miller. There are others, and they are under review 
currently.
    Ms. Norton. Other than the six?
    Mr. Miller. Yes.
    Ms. Norton. All right.
    Mr. Miller. And it is----
    Ms. Norton. Then we got to get at the root of this, because 
you concur, Mr. Ehrenwerth, with the inspector general. And you 
did so without much explanation. And you say that savings 
occurred--this time, certainly, you say--at the subcontractor 
level. If that is the case, then I want to know what was the 
disadvantage of proceeding with the usual competition for this 
project?
    Mr. Ehrenwerth. I think there are----
    Ms. Norton. Or perhaps put the other way, what was the 
advantage of proceeding in this way?
    Mr. Ehrenwerth. I believe the advantage of using this 
method was to have a coordinated approach between the 
contractor and the design process, so that it was effective and 
efficient----
    Ms. Norton. Did you anticipate that putting a price out 
there would mean that every single bidder would come up with 
the same price, implying no competition whatsoever?
    Mr. Ehrenwerth. Let me try to explain that the price, of 
course, was not picked from thin air. The price was the 
result----
    Ms. Norton. No, I understand that.
    Mr. Ehrenwerth [continuing]. Of all the estimates that----
    Ms. Norton. You know what? That is what--I understand that. 
But there is a marketplace out there, and people anxious to get 
work. So, when the government says, ``Here is the number,'' why 
in the world--and who knows, they may have been talking to one 
another, because we will never know that--but why does that 
encourage competition?
    Mr. Ehrenwerth. I think that we agree that that approach of 
the guaranteed maximum price should not be used in the future.
    The point I was trying to make, however, is that the 
process that was established--let's understand that well over 
80 percent of the price is really established by what 
subcontractors bid. And let's understand that----
    Ms. Norton. So if that is the case, you see, I have a 
problem understanding why we ever, then, use competition on the 
front-end of a project.
    Mr. Ehrenwerth. Oh, I have agreed with you, I think, that 
that is--best guaranteed maximum price, which is the maximum 
price, not the price that will be paid, and what I have been 
trying----
    Ms. Norton. You have given no explanation as to why you 
have used this construction manager price approach. Have you no 
justification for it?
    Mr. Ehrenwerth. It is a--the construction management 
contractor approach, as distinct from the guaranteed maximum 
price, which was part of it, is highly used, and a well-
established, efficient----
    Ms. Norton. Oh, yes. I am talking about construction 
manager approach.
    Mr. Ehrenwerth. Well, that approach, without the guaranteed 
maximum price, is well established to create efficiencies and 
effective ways to design and build a building.
    The guaranteed maximum price, which was utilized here in 
the context of the Recovery Act to move these projects along 
and create jobs, is clearly not one that we should use, as the 
IG said, and we are correcting that. I am not trying to justify 
it. I am trying to explain that through the subcontracting 
process, we believe that the vast majority of--if there is any 
excess amount in that guaranteed maximum price, which was the 
result of very substantial GSA calculations, the vast majority 
of that will be recouped through the subcontracting price, and 
we will not be using that guaranteed maximum price in this 
context again.
    Ms. Norton. Mr. Chairman, my time is up. Could I ask, 
though, since we have learned that there are even more than the 
six that may have used this form, this construction manager 
form, and we have been told that there is going to be savings 
to the government from the subcontracts, that on each of these 
projects, the six and any others that are found, the savings 
or, if no savings, be reported to the chairman of the 
subcommittee, be shared with the subcommittee?
    Mr. Denham. Thank you.
    Mr. Ehrenwerth. Happy to do that.
    Mr. Denham. Thank you. The chair now recognizes Mr. 
Hultgren for 5 minutes.
    Mr. Hultgren. Thank you, Mr. Chairman. Let us start with 
Mr. Ehrenwerth, just a couple of questions, if that is OK.
    Current estimate for the renovation of the Poff Building is 
$51 million. Just wondered, does that include cost for 
temporary space for VA? And, if not, what are the costs 
associated with swing space, including moving costs?
    Mr. Ehrenwerth. No, Congressman, it does not. As was 
pointed out, it is crucial to us that the remodeling and 
modernization occur in a way that does not disrupt tenants. So, 
in collaboration with the VA and all involved, we have set up 
an arrangement where there will be four temporary swing space 
locations established in a manner to serve the VA and that has 
a cost to it. One has to move in there, pay rent, in lieu of, 
of course, what would be paid in the Federal building. So there 
is a cost of an additional $10 million, approximately, for all 
that process.
    Mr. Hultgren. So it is $10 million for the space, including 
moving costs?
    Mr. Ehrenwerth. A lot of it is dependent, of course, in 
terms of how long we are there, because we pay rent at new 
space depending on how long we are in the new space. If it is 
shorter, it will be less. If it is longer, it will be more. But 
the overall project is in the $10 million, plus or minus, 
range.
    Mr. Hultgren. OK. Including the moving----
    Mr. Ehrenwerth. For what we are talking about, the----
    Mr. Goodlatte. Congressman Hultgren, if I might add, I do 
not believe that does include the $3 million cost of moving the 
VA out to these four locations and moving them back.
    Mr. Ehrenwerth. Oh, I am sorry. Would you like me to 
analyze the----
    Mr. Hultgren. No, I just wanted to know the cost of it. So 
it is $10 million for the rental of the space, and $3 million--
--
    Mr. Ehrenwerth. The rental of space----
    Mr. Hultgren [continuing]. For the move to the four other 
spots, is that right?
    Mr. Ehrenwerth. The rental--Congressman Goodlatte makes an 
appropriate point. The rental of the space, the build-out of 
what we need to do to make the VA function, and so forth, is in 
the $10 million or small amount more than that range.
    There is a cost to move, and to coordinate the move, and to 
do all that goes with that. Very complicated move. That could 
be another $4 million, roughly.
    Mr. Hultgren. So $4 million for the move. OK.
    According to the GSA inspector general, current GSA data 
indicates that the Poff Building renovation has already 
exceeded the amount listed in GSA's Recovery Act spending plan. 
How do you account for this increase, and what assurances do we 
have that the cost will not increase further?
    Mr. Ehrenwerth. That, I believe, is an accounting 
bookkeeping entry. We have not expended, and do not intent to 
expend more money than is budgeted. The vast majority of it is 
in our Recovery Act major fund. There is a separate fund for 
which the other part is budgeted. All--I would be happy to very 
transparently convey all of this to you, but there is no 
expenditures that are not covered in our budgeted plans.
    Mr. Hultgren. Congressman Goodlatte, do you have a comment 
on that?
    Mr. Goodlatte. Thank you, Congressman Hultgren. First of 
all, the reason why we have $10 million plus $3 million plus we 
do not know how much more, is because there was not proper 
planning done in advance, and a proper cost benefit analysis 
was not done in advance.
    Secondly, there are major security issues with this 
building. And it is agreed that those are going to have to be 
addressed. No plan has been put forward on how it is going to 
be addressed, or who is going to pay for it, and how much it is 
going to cost. But that is also an additional substantial cost 
that is not accounted for at this point.
    Mr. Hultgren. Well, that is something I wanted to ask, as 
well. With the security questions of the move here, I wondered 
how that is going to be addressed, and wanted to make sure we 
get a commitment from you to brief us on these security issues 
and what GSA plans are to remedy security issues.
    Mr. Ehrenwerth. Well, you certainly can have that 
commitment, Congressman, and we are happy to brief you.
    We have worked very closely with Homeland Security, with 
Federal Protection Service, with the marshals, with the judges, 
to make sure that this building is safe and secure. Remember, 
we are doing this with Recovery Act funds that have specified 
purposes to the extent that--and there is no security issue 
that makes this a high-risk building, based on all we have been 
told by the experts.
    To the extent security upgrades are appropriate or 
necessary, separate funding is being sought for that.
    Mr. Hultgren. Congressman Goodlatte, it looked like you 
maybe had something to say on that.
    Mr. Goodlatte. Let me just--some of this you might want not 
to discuss in a public hearing, because we do not want to go 
into too much detail about what those----
    Mr. Hultgren. Well, and that is fine. I do think we need to 
get this information, though, to our subcommittee, at least. 
But----
    Mr. Goodlatte. Some of these issues have been raised 
publicly. This building is vulnerable. I have attended meetings 
of the security committee, which is a group of representatives 
from the various agencies that are in the building, none of 
which have authority--nor does this committee have authority--
to act, unless the parent agencies provide agreement and 
funding to proceed.
    And so, to put money into a building that has this kind of 
a problem and not have a plan to address these major security 
concerns which exist right now at the building--and Homeland 
Security and others responsible for security in the building 
will tell you that, the U.S. Marshal's office and so on will 
tell you that right now--is, I think, irresponsible.
    And the construction project is about to move forward. The 
court is still going to be operating there. There are going to 
be lots of unusual activities taking place on a construction 
site, and there is no coherent plan to address the security 
during that part of the process.
    Mr. Hultgren. My time is up. I yield back.
    Mr. Denham. Thank you, Mr. Hultgren. Mr. Ehrenwerth, what 
is the security level of the building?
    Mr. Ehrenwerth. I am sorry, could you repeat that?
    Mr. Denham. What is the security level of the building?
    Mr. Ehrenwerth. I am not sure I understand your question. 
The building is deemed to be appropriately secure for a 
courthouse. Every courthouse can be improved. There are things 
to be----
    Mr. Denham. There are different security levels, as I 
understand it, for--depending on----
    Mr. Ehrenwerth. Oh, for different Federal buildings?
    Mr. Denham. Yes.
    Mr. Ehrenwerth. Let me inquire.
    Mr. Denham. Number five is the White House. Is it the same 
as the White House?
    Mr. Ehrenwerth. It is not----
    Mr. Denham. Is it a four, then?
    Mr. Ehrenwerth. It is not like the White House. There are--
--
    Mr. Denham. Is it a level four?
    Mr. Ehrenwerth. I do not have the information in that 
context for you. I would be happy to get it for you.
    My point simply was that, in collaboration with all the 
affected parties, we regularly address security and----
    Mr. Denham. And it is not my time right now, but my point 
is I am just--I am alarmed at not knowing, first of all, what 
level of security it is. But, secondly, I would want to make 
sure that whatever the current level of security is, that the 
temporary facility is that same level of security or higher, so 
that we make sure that the good folks of Congressman 
Goodlatte's district are safe.
    Mr. Ehrenwerth. Absolutely.
    Mr. Denham. And now I will recognize Mr. Gibbs for 5 
minutes.
    Mr. Gibbs. Thank you, Mr. Chairman. Mr. Ehrenwerth, I 
assume that you are the guy that signed off on all this. You 
are in charge, right?
    Mr. Ehrenwerth. Well, I am the regional administer. GSA has 
a number of people that approve what goes on, some of which 
occurred before I got here, but I am----
    Mr. Gibbs. How long have you been in this position?
    Mr. Ehrenwerth. I have been here since last August.
    Mr. Gibbs. Last August?
    Mr. Ehrenwerth. Yes.
    Mr. Gibbs. What did you do before that?
    Mr. Ehrenwerth. I was a partner at a law firm specializing 
in real estate development law for 35 years.
    Mr. Gibbs. OK. I have a lot of concerns. I mean this is 
really embarrassing, I think, that your testimony--to follow up 
on Congresswoman Holmes Norton, you know--is about the project, 
and all the good things you are doing with the building. But, 
you know, you broke the law, as far as I am concerned.
    Did you do a cost benefit analysis if we should sell the 
building, versus renovate? Whenever I do a project--I do some 
stuff back home in Ohio--you know, I determine if it is worth 
putting the money in an old project, or to build it new. Did 
you guys do an analysis?
    Mr. Ehrenwerth. Absolutely. I am very glad you asked that 
question, because I think we may have not focused enough on the 
fundamental question here. We are, at core, an asset manager. 
The first question we ask: ``Is this an important asset that, 
if an amount of money that is rational is spent on it, will 
extend its useful life to make it an effective building at a 
much lower cost than building a new building, or any other 
alternative?'' And we looked at it closely, and the answer was 
a clear yes.
    The reason for that is it would cost twice as much to build 
a new building, and the building simply could not continue to 
function. And if we did not spend this money, it would 
deteriorate further, the cost would be greater, and there was 
simply no alternative. It was suggested also, for example, that 
we sell the building to some private developer and let that 
person spend the money. Well, I have been in the real estate 
legal world long enough to know that any developer who would do 
that would have to make a profit. So, you have all the costs 
that we have, plus his profit. And at the end of it, guess 
what? We do not own the building. So, none of those 
alternatives made sense.
    Mr. Gibbs. Well, I think that is questionable. I think my 
colleague wants to respond to that.
    Mr. Goodlatte. Well, I think the claim that a cost benefit 
analysis was done is simply not accurate. The fact of the 
matter is no cost benefit analysis was done prior to the work. 
The inspector general has confirmed that. And if you call this 
a cost benefit analysis, I think that any private entity making 
the kind of decision that you are talking about here, involving 
the expenditure of $65 million or more, would spend a little 
more effort and a little more energy in doing it.
    And then, I think it is worth looking at some of the 
conclusions they have drawn in here, saying that, for example, 
the energy efficiency on a retrofitted building will be the 
same as a new building of the same amount of square footage.
    It also does not address the needs of the United States 
District Court--and perhaps the clerk would like to address 
it--but they have specific needs that are not addressed in this 
building, and will not be addressed after this retrofit. And 
the VA has told us the same thing. So, while this is 
definitely, you know, going to improve the building, the cost 
benefit analysis has not been done.
    And one of the big advertisements in green energy--the 
local newspaper, The Roanoke Times, did a Freedom of 
Information Act request, and finally got some information on 
which to do some analysis of the energy savings involved here. 
And one conclusion was that it could take as long as 218 years 
to achieve a payback on the energy savings in this building. 
Now, I do not know if it would be that long, but clearly that 
is way beyond the life of the building or the equipment that 
will be put in the building to achieve that energy efficient. I 
do not think a cost benefit analysis was done.
    Mr. Ehrenwerth. If----
    Mr. Gibbs. Go ahead.
    Mr. Ehrenwerth. If I just might clarify one thing, remember 
now, the base reason we are doing this is because the systems 
are no longer operational. We need to act to improve them, or 
this building will not be viable.
    As a bonus of that, there are various energy efficiencies 
and sustainable goals. That is not why we are spending all this 
money. We are spending all this money to make this building a 
strong asset for many years to come, which we have done, in 
collaboration with the VA and the local courts.
    And, by the way, I have just been advised that the building 
is level four, and of course all the contracting staff is 
cleared by the Department of Homeland Security. We are taking 
every step----
    Mr. Gibbs. This is my time. I am very concerned. I think, 
Mr. Chairman, that, you know, obviously there was not 
competitive bidding done, there was not a cost analysis study 
done that, to my level, that should be. And I think that, you 
know, the first thing that comes to my mind is just plain 
incompetence.
    And then, if it is not incompetence of how this has been 
handled, it really does kind of smell of how the use of the 
stimulus dollars was used. And, you know, and I think we 
really--I do not know if the inspector general--this might be a 
question for the inspector general. Will there be more 
investigation, because this was a political favors payback with 
stimulus money? Because this thing really, to me, smells.
    Mr. Miller. Congressman, we are reviewing other uses of the 
construction company as contractor. They are under review. We 
are currently working with the Public Building Service to find 
out the root cause, the root problem involving the construction 
manager as contractor, and we have had discussions with the 
commissioner of the Public Building Service, which is--who is 
the highest ranking member of the Public Building Service. And 
we are currently working with him and the Service to find out 
what is causing this.
    One of the--I am sure Mr. Ehrenwerth would confirm that one 
of the virtues of the construction manager as contractor 
vehicle, as far as it concerns the Federal Government, is that 
it gets the money out quickly. It commits it quickly, the money 
gets obligated quickly.
    Mr. Gibbs. My time is up.
    Mr. Denham. Thank you. The chair now recognizes Ranking 
Member Norton for 5 minutes.
    Ms. Norton. The ultimate cost benefit analysis for this 
committee has always been will we end up leasing, where the 
money goes to a private contractor forever, just as what 
happened in the Transportation building, located right here in 
this city.
    Representative Goodlatte, we have a letter from January the 
7th that you wrote to Mr. Ehrenwerth, where you said you had 
received a letter from a constituent, Mr. Jake Kofter of 
Feldheimer Commercial Real Estate. You met with Mr. Kofter 
regarding his proposal for a private alternative to the 
government's renovation of the Poff Federal Building. And you 
even say in your testimony that there were a number of 
alternatives that could be less expensive and more effective, 
including not doing major renovations, selling the building, et 
cetera. And you point to the OMB analysis.
    I am not sure, Mr. Goodlatte, if you are aware. This 
building would have been amortized, had it been sold, over the 
first term of the lease--usually that is about 15 years--you 
are talking about selling the building, a building we own, to 
another owner on a lease-back arrangement, which you seem to 
favor for your constituents, which would mean that the Federal 
Government would then pay rent on a building it once owned.
    And if the experience of this committee is any guide, 
particularly since, in effect, we would have paid for the 
renovation anyway, we will pay for the rent, and the building, 
and, at the end of the lease, we will go again. We will lease 
it again. Because, after all, we have made a considerable 
investment in it. It is as if you had a house, it needs a lot 
of repair, but you say to somebody else, ``You repair it, and I 
will lease it, and I will keep leasing it for my life and for 
the life of everybody in the--who wants to live in this 
house.''
    Now, this has been one of the great wasters of money of the 
Federal Government. The Transportation building is a prime 
example of it. We are not going to move from that building. But 
because of the way in which scoring works, we are in the 
outrageous position of, in effect, leasing back the building 
that is the headquarters building we will never move from.
    Whatever they did wrong--and I certainly have nothing to 
say about what--nothing good to say about what the GSA did--I 
must say----
    Mr. Goodlatte. Congresswoman----
    Ms. Norton [continuing]. I find your proposal even worse.
    Mr. Goodlatte. Congresswoman, may I respond to that? 
Because that is not my proposal at all.
    Ms. Norton. Well, you say it even in your testimony, Mr. 
Goodlatte.
    Mr. Goodlatte. Well, let me respond, if I might. First of 
all, I received inquiries from constituents about what was 
going on. One individual came to me and said, ``We think we 
have a better idea. We forwarded it to the GSA.''
    We are not advocating that. We are saying that a cost 
benefit analysis should have been done that took into account 
all of the different options that were available, including the 
option proposed by anybody--not that particular individual, 
because this would have been done before this all ever took 
place--but anybody could certainly have an idea. No such study 
was done by the GSA to make any determination about that.
    If you talk to people who are in the building, they will 
tell you that that building does not suit their needs. So one 
option would be to sell the building and use the money that was 
made available here to do something different, whether it is to 
build a new building or to build a courthouse and move the VA 
to a different facility. There are lots of different options 
that were not----
    Ms. Norton. We do not know that, Mr. Goodlatte. We do not 
know if, you know, if----
    Mr. Goodlatte. We do not know any of that.
    Ms. Norton. Go around Roanoke and just do a new building. 
We know that they have invested in this building. Your options 
were not doing major renovations--I think we can cross that 
off. The courts, the vets who were seriously dislocated, all 
agreed that this was not a suitable facility. Selling the 
building with us leasing it back, do you understand that that 
would not have been a viable alternative for the taxpayers?
    Mr. Goodlatte. I think that there are different 
alternatives in----
    Ms. Norton. Would you--I am asking about this one, Mr. 
Goodlatte.
    Mr. Goodlatte. Well, look, I do not know whether that is a 
good alternative or not, because no effective study was done to 
determine whether or not any of these alternatives made more 
sense than what was decided to do here for a project that was 
supposed to be shovel-ready, and here, 2\1/2\ years later, they 
have still not begun construction on the project.
    So, the fact of the matter is that, like you, when I get 
inquiries from constituents I forward them on to the agency so 
they can consider whether they are good ideas or not. That in 
no way, shape, or form, constitutes----
    Ms. Norton. Well, I am glad you do not endorse selling----
    Mr. Goodlatte [continuing]. Any particular idea.
    Ms. Norton. I am very glad you do not endorse what would 
clearly have been the worst of the alternatives, Mr. Goodlatte.
    Mr. Denham. Thank you. The chair now recognizes Mr. Hanna 
for 5 minutes.
    Mr. Hanna. Good morning, everyone. I have been in the 
building business for about 30 years, probably bid 2,000 jobs 
in my life. Been pretty successful. The one thing I have 
learned about the business is that competition is not only 
free, but it is your friend. And when you exclude it, you 
automatically get something different than the optimum outcome.
    I am curious, Congressman. What would be your remedy to all 
this, if you had a chance to do it all over right now?
    Mr. Goodlatte. First of all, I think you would do a cost 
benefit analysis of whether this building is worth putting $65 
million into it when it cost $14 million to build just 30, 35 
years ago.
    Secondly, you would look at whether or not it makes sense, 
given the heightened security concerns that certainly have 
taken place in the last--certainly since this building was 
built, to determine whether it made sense to have the largest 
tenant in the building, the Veterans Administration office, 
having a key role in determining security issues with a United 
States District Court, which has very, very different security 
concerns.
    And it would make sense to me to look at whether you would 
move the court out and build a smaller building to house the 
court, and make some renovations to this building, and give the 
VA more space, which they say they will need, even after this 
process is conclude. Those would certainly be good 
alternatives.
    Given the economic environment that we are in today, and 
given the fact that this building is functioning, I would think 
that a very legitimate thing to consider would be to not do 
anything major with these dollars right now. Rather, take the 
time to figure out what the long-term needs are.
    I think what happened here is that the GSA had a building 
that they want to keep, clearly, and they suddenly had a lot of 
money made available to them. This building generates--I 
believe, if you look into it--a net revenue to them, because 
the tenants in the building, the court and so on, make their 
books look better. Why not take free money and put it into an 
old building, regardless of the cost, and let us keep that 
revenue stream flowing?
    None of that was properly openly analyzed and reviewed 
before this decision moved forward and was made.
    Mr. Hanna. So it is safe to say that you are not here with 
any particular predisposition, you just would like to maximize 
the opportunities to find the best outcome.
    Mr. Goodlatte. That is correct.
    Mr. Hanna. Mr. Ehrenwerth, do you think that because of the 
stimulus package and the rush to get that money out there for 
what was generally regarded--and hopefully were shovel-ready 
products--projects, do you think that that was a cause for this 
type of sloppy process, which I think we would all agree is?
    Mr. Ehrenwerth. Well----
    Mr. Hanna. A less-than-optimum. How is that?
    Mr. Ehrenwerth. Well, certainly there is always room for 
improvement. The Recovery Act in this particular case, and in 
all cases that I am aware of, is creating a lot of jobs and 
doing a lot of necessary work on our properties.
    It is agreed, as we told the IG previously, that we agree 
with his criticism with respect to the guaranteed maximum 
price. That is being fixed.
    But at the bottom line, the end of the day, this is a very 
needed project that will be done for an appropriate price, and 
our subcontracting process will ensure that. So I think we are 
very convinced that it is the right thing to do to move 
forward.
    Mr. Hanna. Is it possible to start over?
    Mr. Ehrenwerth. I think it would be--anything is possible, 
of course. But it would be a waste of funds, it would delay the 
project, and it is a much-needed project. So I do not believe 
we should start over, no.
    Mr. Hanna. I yield back.
    Mr. Denham. Thank you. The chair now recognizes Ranking 
Member Norton for 5 minutes.
    Ms. Norton. Thank you, Mr. Chairman. Mr. Ehrenwerth, 
perhaps this is for both Mr. Miller and Mr. Ehrenwerth. This 
subcommittee is always concerned about the Federal building 
fund, which is one of the reasons that we look carefully before 
we decide to lease. We already have tipped the point now on 
leasing.
    Will the rate of return to essentially the building fund, 
and therefore to the taxpayers, after the completion of this 
modernization of this building, be--what will the rate of 
return--than it is now, what will the rate of return be?
    Mr. Ehrenwerth. I can get you specifics I do not have with 
me on the calculations of that. But I can say this, that the 
rate of return on a deteriorating building whose systems are 
falling apart is going to get worse and worse. With this 
expenditure, we believe that over the life of this building, 
which will be, literally, generations, the rate of return will 
be much improved and very, very elongated as compared to not 
doing this.
    Ms. Norton. Mr. Miller?
    Mr. Miller. Congresswoman, problems existed prior to the 
Recovery Act, as well. And the Recovery Act did prompt GSA to 
fast-track projects, and they did not correctly follow the CMC 
(construction management contract), for example. The problems 
existed before, and will exist even after all the Recovery Act 
money is spent.
    Ms. Norton. But affecting the rate of return of the Federal 
building fund was my--yes. And I hope those problems will be 
corrected. I am asking about the Federal building fund. You are 
aware that the upkeep of this building, of buildings all around 
the United States so they do not deteriorate the way this 
building has, it depends upon whether or not the buildings pay 
into the Federal building fund instead of to a private 
developer. I am asking about the return to the Federal building 
fund.
    Mr. Miller. We have not evaluated the rate of return. The 
agency would have to provide data on that.
    Ms. Norton. Mr. Ehrenwerth, I wish you would, because that 
is of great concern to us. That building fund does not do what 
it is supposed to do now.
    Mr. Miller, does the sale and lease-back of--is the sale 
and lease-back of a government-owned building, is that a good 
deal for the government?
    Mr. Miller. Congresswoman, that is a policy question that 
we do not usually get into. We would have to look at the facts 
and the numbers. It does seem odd to lease--to build a building 
to lease out and to buy back. That generally does not strike me 
as a good deal.
    But it is essentially a policy area that I would leave to 
the policymakers----
    Ms. Norton. I guess I should add that, too. I could ask 
that to the average person walking down the street, frankly. It 
does not require much expertise. What we do want to make sure 
is if--is that whatever we do with buildings we own, in fact, 
gives us the best, the most competition, not the least. And 
that is the problem we are having here.
    For the courts, I understand your concern, and I understand 
the dislocation. Some of the dislocation, I think, is what 
every homeowner experiences. When I renovated my kitchen, I 
could not believe it. And that, of course, is something that is 
the price of--and I do not mean the cost--of renovation.
    But I would be concerned at how that price that the courts 
and especially the veterans, how it was handled. Now, there is 
concern, and Mr. Goodlatte raised concern about the cost of 
what is essentially swing space, the cost of moving people 
around. Ms. Dudley said she was pleased that they were able to 
remain in the building, especially the courts, even while she 
discussed some of the inconvenience.
    Would you make us understand the cost, essentially, of 
relocation, and the files, and the swing space cost, and how 
much of that is taken into account when one renovates a 
building?
    Mr. Ehrenwerth. Yes. Well, you raise a very good point, of 
course. The first basic building block is it is extraordinarily 
expensive to move courts to temporary space, because they need 
courtrooms and chambers, and all the security that goes with 
it. So when you are trying to preserve the taxpayers' dollars, 
unless there is some unique situation where you can place court 
somewhere else, it is advisable to keep them there, and cost 
effective to do so.
    With respect to the Veterans Administration, and due to the 
size of their space, the need to strengthen the floors and all 
that we had to do, it was not viable, because of everyone's 
concern, including the GSA, and----
    Ms. Norton. It is the veterans I am most concerned about. 
It is the veterans I am----
    Mr. Ehrenwerth. Well----
    Ms. Norton. In fact, the senators were basically concerned 
about the veterans. They want to make sure that veterans and 
their files--and let me tell you it is interesting to note that 
the government has centralized veterans concerns so that even 
veterans from the District of Columbia relay to this office in 
Roanoke. So they do have a large caseload.
    Mr. Ehrenwerth. That is right. And I agree with you in 
full.
    And what we did--and I personally have met with the 
national director of facilities for the VA, for the local VA 
office, for the veterans groups. We have done this not by 
edict, but by collaboration, to make sure that every veteran 
and every veteran's group has the best result out of this, not 
only as we see it, but as they see it. And the decision was 
that we needed to move them, we would have liked to have moved 
them to one building, of course. That was not available.
    So, we took those aspects of the Veterans Administration 
operations, the service centers where the veterans come, the 
service-related private organizations that serve the veterans, 
and put them together right across a little street from each 
other, making sure there was parking, handicap parking, and 
brought their files over to them, again, in very, very, very 
regular collaboration with the veterans. And we are spending 
some money to do this, because we are achieving the very 
important goal of minimizing any disruptions to the VA while we 
are doing this.
    The VA facilities office nationally has signed off on it, 
and is very pleased with what we are doing. We have spent--as 
we indicated earlier, there is a substantial cost--$4 million 
to move, $10 million-plus for this temporary space--for the 
goal of having this operation of the VA continue to run 
smoothly and effectively as our veterans deserve, and have them 
come back to a better building--for example, where there are 
accessible restrooms, where disabled veterans can utilize when 
they are meeting the VA, which is not currently the case.
    So, we are trying to take care of them permanently, as well 
as temporarily, in the most effective way we can.
    Mr. Denham. Thank you. Ms. Dudley, you mentioned in your 
testimony space was already being renovated when the Recovery 
Act project started. Can you briefly describe what the 
renovation was?
    Ms. Dudley. It predates my time in the office. But I think 
about 10 years ago a project was planned to renovate judges 
chambers on the third floor and the clerk's office and the 
probation office and other offices. It took 2 years to actually 
finish the construction work on the clerk's office. Part of the 
phasing has now been interrupted by the ARRA project. The 
construction on the judges chambers has been halted. But 
halted--but now we are going to roll it into the ARRA project. 
So it will be done, it is just kind of delayed.
    Mr. Denham. And what has GSA done to mitigate the impacts 
on your operation?
    Ms. Dudley. Well, we have had good meetings with the GSA, 
and we have talked about logistics of moving the IT, the phone 
lines, the data lines. They worked with us to kind of smooth 
out those issues. They have worked with us in terms of making 
sure that when areas are blocked we will have other cubicles 
and other space to go to.
    So, GSA, the project manager, and the other participants 
have been very responsive to our requests for accommodation.
    Mr. Denham. And from a security perspective, same level of 
security as you have always had?
    Ms. Dudley. Well, I do not know. You know, that probably 
goes a little bit beyond what I am actually able to talk about 
today. That would get the marshal's input on that.
    Mr. Denham. OK.
    Ms. Dudley. Thank you.
    Mr. Denham. Thank you. And Mr. Ehrenwerth, I just wanted to 
go back to the thinking on the analysis itself, what did or did 
not happen. And I would certainly like to see a better cost 
benefit analysis than what has currently been provided us.
    But just from the rough numbers, a $14 million facility in 
1975, now spending $65 million to renovate. Could we not have 
built an entire new facility for that, state-of-the-art 
facility with all the green bells and whistles that were wanted 
for $65 million?
    Mr. Ehrenwerth. Congressman, we looked into that. And the 
cost of building an adequate new building would be 
approximately $124 million, double the cost.
    Mr. Denham. What would you have been able to sell the 
current facility for?
    Mr. Ehrenwerth. Well, I have been in the real estate 
business long enough to know that you do not know. You put a 
sign on the door, say ``For Sale,'' and it would depend on, 
first, the condition of the building, which is not anywhere 
near what it should be----
    Mr. Denham. Isn't that part of the cost benefit analysis?
    Mr. Ehrenwerth. You can do all the cost benefit analysis 
possible, but you do not know what a building will sell for 
until you see what the marketplace will buy.
    Our experience is, and our cost benefit analysis suggests 
that a building in this condition would not yield a high price, 
not anywhere near the cost of building a new building, nor 
anywhere near the cost of selling this----
    Mr. Denham. You do not do a rough market analysis? I mean I 
can tell you what my house is worth before I put it on the 
market. I mean I have got a pretty good idea, just by looking 
at what the market is doing.
    Mr. Ehrenwerth. Well, let me--to be specific, if we sold 
the building as it now stands, we think we could get 
approximately--assuming someone was ready and able to buy--$23 
million for it. And if you use that $23 million against the 
price of a new building, then your new building would net cost 
you $100 million, in comparison to what we are spending here, 
$40-some million less.
    Mr. Denham. And you had said we have not started the 
Recovery Act work until this summer?
    Mr. Ehrenwerth. We have----
    Mr. Denham. That is projected to start the Recovery----
    Mr. Ehrenwerth. We have--we are doing the actual 
construction of the building starting later this summer. Of 
course, we have been doing other work that has created jobs, 
getting the four swing spaces ready and all the preliminary 
activity that goes with it.
    Mr. Denham. And the Recovery Act dollars were for shovel-
ready projects. What is your definition of shovel-ready?
    Mr. Ehrenwerth. The Recovery Act dollars obviously had the 
goal of moving as quickly as possible. That goal had to be 
combined with the goal, as I mentioned earlier, of doing this 
in a way that did not disrupt the VA, that considered 
everyone's concerns. So, in this particular case, shovel-ready 
was combined with the goal of having the right building done 
with the right swing space. And so it has taken a bit longer.
    Mr. Denham. And your definition of shovel-ready?
    Mr. Ehrenwerth. Shovel-ready, I believe, is that you can go 
as quickly as possible, and most is in order. In this 
particular case, as I indicated, there were important things to 
do, such as not disrupt the VA. And that is why it has taken a 
bit longer.
    Mr. Goodlatte. Mr. Chairman?
    Mr. Denham. You have a number of different projects under 
GSA where you are doing Recovery Act dollars, right?
    Mr. Ehrenwerth. Yes.
    Mr. Denham. And you had to justify on those projects what 
the timeline was for shovel-ready. We are trying to put people 
back to work as quick as possible. So what is your timeline on 
a shovel-ready project?
    Mr. Ehrenwerth. Our timeline----
    Mr. Denham. Is it 5 years? Is that shovel-ready?
    Mr. Ehrenwerth. The--many of the projects are in order. Let 
me back up, if I might, to answer you honestly.
    Mr. Denham. We are short on time. We are going to come 
back. We are going to do another round of questions. But just a 
ballpark. Is it 5 years? Two years? One month? What is shovel-
ready?
    Mr. Ehrenwerth. As soon as possible. We obviously like to 
do them within months. But we have to look at what is the 
requirement. Here we have a project----
    Mr. Denham. It is either shovel-ready or it is not. You 
must have some type of criteria. If the President says, ``Here, 
here is a pot of money for shovel-ready projects,'' which 
projects are shovel-ready?
    And you cannot say that there is a 5-year project that is 
shovel-ready today. I mean I have got to imagine the American 
public believes shovel-ready is, ``We can get out there and 
start immediately.'' So what is ``immediately,'' in your 
definition?
    Mr. Ehrenwerth. I do not think there is a particular number 
of days or weeks. ``Immediately'' means as soon as possible to 
achieve an important goal by--the goal being fast and 
appropriately done to preserve a substantial asset.
    Mr. Denham. Thank you. Mr. Goodlatte?
    Mr. Goodlatte. Mr. Chairman, two things. First of all, 
because no study or cost benefit analysis was done before this 
quick decision was made, an assumption was made at the outset 
that was faulty and very costly, and that is they assumed that 
the VA would be able to stay in their space, just like the 
courts are staying in their space. And when they got into it, 
they discovered that that was not possible, and the VA was 
going to have to move out, at an additional cost of at least 
$14 million. So, that, I think, is part of their problem. But 
this clearly was not shovel-ready from the get-go.
    Mr. Chairman, I have been advised that I am needed in the 
Judiciary Committee. We are marking up the patent bill, and I 
am the chairman of the subcommittee. I wonder if I might be 
excused.
    Mr. Denham. Absolutely. One final question. In your 
definition, what is shovel-ready?
    Mr. Goodlatte. In my opinion, shovel-ready would be 
something where you are pretty close to being able to take the 
plans off the shelf and get to work on the project right away.
    Mr. Denham. Now, this is government. Is 5 years shovel-
ready?
    Mr. Goodlatte. I think it would be, to me, a lot less than 
that. I would think you would be talking months, as opposed to 
years.
    Mr. Denham. Thank you. The chair will now recognize Ranking 
Member Norton for 5 minutes.
    Ms. Norton. Well, I think that it is a fair question to ask 
what is shovel-ready. I do note that in my testimony I 
indicated that GSA had obligated virtually all the funds, and I 
do think that if shovel-ready means anything, it is that you 
are working on the money and getting it out.
    Now, if there is any criticism to be made of the shovel-
ready nature of this project, I am sure it was on a list to be 
renovated, given its needs. It is the time it takes that is--
was perhaps not included to make sure that the veterans were 
accommodated and that the courts were not disrupted. Did that 
delay going into the ground with this project, Mr. Ehrenwerth?
    Mr. Ehrenwerth. Well, I think--yes, I think, as we have 
heard this morning, we would be subject to great criticism if 
we put moving rapidly ahead of making certain that the veterans 
and courts were not disrupted, at least any more than we had 
to. So, as we explored options for moving quickly, the decision 
was made to do what we need to do to minimize. And, yes, that 
requires a little more time, and that is what happened.
    Ms. Norton. I have only one more question. I just want to 
say this hearing has been very important, because it has made 
clear to me, and I think the GSA, that even if you are trying 
to get work out on the street quickly, there are great problems 
with violating--if it was not a violation, at least with 
skirting the price and competition requirements of the 
government.
    But this hearing has also convinced me that you certainly 
could not have built a building for what you are renovating 
this building for, and that it would have been a disaster if 
you had brought the--had taken the proposal of Mr. Goodlatte's 
constituent, and put us in the position of selling the building 
for $23 million and then leasing it back to him and making him 
a rich man forever, because we would have had to lease it 
forever from him.
    I might also say that I do not see how you could have done 
that in the first place, because we do not allow courts to be 
in leased space. So we have to own space where our Federal 
courts are.
    My final question to you is how many jobs were created or 
are expected to be created as you continue with this work?
    Mr. Ehrenwerth. Quite a substantial number. There are over 
100 people working already, preparing the swing space. We 
expect there to be 550 direct and indirect jobs as a result of 
the construction, and goodness knows how many ripple effect 
jobs with more business at the restaurants and hotels, and all 
that goes with it. So, several hundred jobs, at a minimum.
    Ms. Norton. Thank you very much.
    Mr. Denham. Thank you. I wanted to just go back. You said--
again, Ranking Member Norton re-emphasized the point about not 
disrupting the veterans. I agree. I could not agree more. I am 
on the veterans committee, I am a veteran myself. We do a lot 
of work in that area. The last thing I want to do is disrupt 
the veterans, or create a security issue with the courts and 
the local folks.
    What my concern is--is this shovel-ready? So, if we have to 
have greater planning, because of a situation with veterans or 
a hospital or courts or--regardless of what the project is, 
then maybe that is on a capital plan where we are putting 
assets out there, or funding available out there for a long-
term, 2-year, 5-year, 10-year plan. But if it is shovel-ready, 
I believe the American people believe that a shovel-ready 
project is going to be ready to put a shovel into the ground, 
not push paperwork for several years, or several months.
    So, one of the things that this committee would like to see 
is, what is your definition for a shovel-ready project. You 
must have some criteria available that, when the President 
comes and says, ``I have got stimulus dollars, I have got 
Recovery Act dollars, we are going to work on putting people 
back to work,'' that there must be some type of criteria to 
actually getting people back to work, and getting projects 
moved forward.
    Not only on this project, but we have--in my district, we 
have got high-speed rail where we are putting stimulus dollars 
on something that we are not going to see a shovel into the 
ground for 4, 5, or 6 years, which again, in my definition, is 
not shovel-ready. So I would like to see specific criteria on 
what your shovel-ready projects are, or what your goals are, 
specifically, for Recovery Act and stimulus dollars.
    As well, I would like to see the cost benefit analysis that 
you have already provided, as well as any other information 
that has come out, either after the bid, as well as prior to 
accepting the bid.
    And then, lastly--this is more of a comment than a 
question--it appears to me, from my conversations with 
Congressman Goodlatte, that he has not had the greatest level 
of cooperation. I am working very well with GSA and OMB right 
now. We are getting a great deal of cooperation. But this--
certainly from past history with Ranking Member Norton a number 
of projects, as well as taking over this chairmanship, there 
has not been the greatest track record there. And once again, 
we are seeing from another congressman, from his local 
perspective, not the greatest cooperation, as far as getting 
information.
    I would hope that we would continue, as we have seen over 
the last month, a greater working partnership here, so that we 
can avoid having these types of conflicts in the future.
    Final comments from Ranking Member Norton?
    Ms. Norton. Thank you. You are speaking for me, as well, 
Mr. Chairman, about cooperating with the subcommittee and 
promptly getting information to the subcommittee. You only gain 
the resentment of the subcommittee when you do not get 
information, whereas the subcommittee--and you have seen 
Chairman Denham runs the committee just as I do--they are 
willing to work with you. But if we do not get the information, 
then we are working against you.
    Thank you very much, Mr. Chairman.
    Mr. Denham. Thank you for your testimony. Your comments 
have been very insightful. We will look forward to getting this 
information back on the various questions.
    If there are no further questions from the committee, I 
would like to ask unanimous consent that the record of today's 
hearing remain open until such time as our witnesses have 
provided answers to any questions that may be submitted to them 
in writing, and unanimous consent that the record remain open 
for 15 days for any additional comments and information 
submitted by Members or witnesses to be included in the record 
of today's hearing.
    [No response.]
    Mr. Denham. Without objection, so ordered. I would like to 
thank our witnesses again for their testimony today. If no 
other Members have anything to add, the subcommittee stands 
adjourned.
    [Whereupon, at 11:42 a.m., the subcommittee was adjourned.]
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