[Senate Hearing 112-829]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-829

   GSA: OPPORTUNITIES TO CUT COSTS, IMPROVE ENERGY PERFORMANCE, AND 
                            ELIMINATE WASTE

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

                             JOINT HEARING

                               BEFORE THE

                       SUBCOMMITTEE ON OVERSIGHT

                                AND THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 30, 2011

                               __________

 Printed for the use of the Senate Committee on Environment and Public 
                                 Works






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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      ONE HUNDRED TWELFTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
FRANK R. LAUTENBERG, New Jersey      JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland         JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico                MIKE JOHANNS, Nebraska
JEFF MERKLEY, Oregon                 JOHN BOOZMAN, Arkansas
KIRSTEN GILLIBRAND, New York

       Bettina Poirier, Majority Staff Director and Chief Counsel
                 Ruth Van Mark, Minority Staff Director
                                 ------                                

                       Subcommittee on Oversight

               SHELDON WHITEHOUSE, Rhode Island, Chairman
BENJAMIN L. CARDIN, Maryland         MIKE JOHANNS, Nebraska
BERNARD SANDERS, Vermont             JOHN BOOZMAN, Arkansas
BARBARA BOXER, California, (ex       JAMES M. INHOFE, Oklahoma, (ex 
    officio)                             officio)





















                            C O N T E N T S

                              ----------                              
                                                                   Page

                             MARCH 30, 2011

Boxer, Hon. Barbara, U.S. Senator from the State of California...     1
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     2
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode 
  Island.........................................................     4
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland     5
Merkley, Hon. Jeff, U.S. Senator from the State of Oregon........     7

                               WITNESSES

Johnson, Martha, Administrator, U.S. General Services 
  Administration.................................................     8
    Prepared statement...........................................    10
Sindelar, John, client industry executive, HP Enterprise Services    50
    Prepared statement...........................................    53
Bautista, John, vice president, New Business Development, 
  Arrowhead Systems, Inc.........................................    56
    Prepared statement...........................................    58
Gatlin, Doug, vice president, LEED, U.S. Green Building Council..    65
    Prepared statement...........................................    67
    Responses to additional questions from:
        Senator Boxer............................................    75
        Senator Inhofe...........................................    75
Hubbell, Ward, president, Green Building Initiative..............    76
    Prepared statement...........................................    78
DeBoer, Jeffrey D., president and chief executive officer, The 
  Real Estate Roundtable.........................................    91
    Prepared statement...........................................    93

                          ADDITIONAL MATERIAL

Letter from several organizations and companies to Hon. John 
  Boehner and Hon. Nancy Pelosi, dated February 17, 2011.........   119
Statements:
    Block, Nadine, senior director of Government Outreach, 
      Sustainable Forestry Initiative, Inc.......................   121
    Phillips, Cassie, vice president, Sustainable Forests & 
      Products, Weyerhaeuser Company.............................   123
    National Association of Home Builders........................   125
    Glowinski, Robert, American Wood Council.....................   131
    American Forest Foundation...................................   133

 
    GSA: OPPORTUNITIES TO CUT COSTS, IMPROVE ENERGY PERFORMANCE AND 
                            ELIMINATE WASTE

                              ----------                              


                       WEDNESDAY, MARCH 30, 2011

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                           jointly with the

                                 Subcommittee on Oversight,
                                                    Washington, DC.
    The committees met, pursuant to notice, at 10 a.m. in room 
406, Dirksen Senate Office Building, Hon. Sheldon Whitehouse 
(chairman of the subcommittee) presiding.
    Present: Senators Boxer, Inhofe, Whitehouse, Cardin, 
Merkley and Boozman.

STATEMENT OF HON. BARBARA BOXER, U.S. SENATOR FROM THE STATE OF 
                           CALIFORNIA

    Senator Boxer. Thank you very much for being here today for 
this important hearing on opportunities at the GSA to cut 
costs, improve energy performance and eliminate waste.
    I am going to make my opening statement and then I am going 
to turn the gavel over to our subcommittee Chair on this very 
important matter. Then if he has to leave to go to another 
committee hearing, he will hand the gavel back. So, we are 
going to be doing a little passing off of gavels.
    The Federal Government is one of the Nation's largest 
energy consumers and purchases nearly $500 billion in goods and 
services every year. The Federal Government is positioned to be 
a leader in efforts to improve efficiency, eliminate waste, 
improve environmental performance and save money. So, this is 
an area where I think that Republicans and Democrats can meet 
because we all want to see efficiency in place.
    GSA provides office space to over 1 million Federal 
employees in over 9,600 Federal buildings and leases totaling 
370 million square feet of space. The Agency is already playing 
a key role in improving the efficiency of office buildings 
nationwide which account for a significant amount of the 
Nation's energy and water use and waste.
    According to the EPA and the U.S. Green Building Council, 
buildings in the U.S. account for 36 percent of total energy 
use, 36 percent, and 65 percent of electricity consumption, 12 
percent of total water consumption, 68 percent of total 
electricity consumption and 30 percent, I do not know, we said 
two electricities so that does not make sense. But let us just 
put it this way. We use a lot of energy. We will correct this 
for the record to show exactly how much.
    Now, Senator Inhofe and I worked together a long time ago 
and we did write some legislation which said let us save money 
and we set up a situation where in many Federal buildings we 
said we want to have someone in charge of making sure that the 
energy use is kept at the lowest level possible. We, I think 
learned, as we wrote this legislation, I will never forget it 
because Senator Inhofe said, I am not going to support this 
unless you show me the payback. The payback was just a few 
years for the capital that we put up front.
    GSA is also the central Agency for acquiring products and 
services for the Federal Government. The Agency offers over 12 
million products and services to other Federal agencies. GSA 
can have a large influence on the goods and services that are 
provided to the Federal Government by the private sector.
    Businesses worldwide are working to cut costs, reduce waste 
and improve efficiency and are creating competitive advantages 
in the process. I think the Federal Government can learn from 
these private sector efforts. Done right, these initiatives can 
cut waste and inefficiency while making the Federal 
Government's supply chain cleaner and sustainable.
    Again, the legislation we enacted, the Energy Independence 
and Security Act, provided for construction of green Government 
buildings and retrofit Federal buildings with energy efficient 
technologies. Both Presidents Bush and Obama also issued 
Executive orders to improve the sustainability of the Federal 
Government. These are important initiatives and today we will 
hear from GSA about how those initiatives are being 
implemented.
    On the second panel we will hear from companies who are 
working to improve their own operations about the benefits they 
have seen by becoming more efficient. We will also hear from 
building and energy efficiency experts from outside of 
Government regarding the progress that has been made in 
building efficiency to date, the barriers to further 
improvements, and what more can be done.
    I personally believe we must continue to aggressively 
improve the efficiency and sustainability of the Federal 
Government and I look forward to working with GSA and my 
colleagues to determine if adequate authorities exist to enable 
the Federal Government to continue cutting waste, reduce energy 
use, improve environmental performance and remove any barriers 
there may be to these ongoing efforts.
    I appreciate all of the witnesses who are here today. I am 
hoping to stay for all of you and, before I hand the gavel over 
to my colleague to run this meeting, I am going to call on 
Senator Inhofe for his opening remarks.

STATEMENT OF HON. JAMES M. INHOFE, U.S. SENATOR FROM THE STATE 
                          OF OKLAHOMA

    Senator Inhofe. Thank you, Madam Chairman. I am pleased to 
have the opportunity to discuss the ways that we might be able 
to improve our efficiency and eliminate waste. We have talked 
about this for a long time.
    Given the current state of the economy, people in 
businesses around the country continue to tighten their belts 
and look for ways to save money. We need to be doing the same 
thing.
    I look forward to hearing from Administrator Johnson on 
GSA's efforts to improve property purchases and maintain 
efficient buildings. For me, this is an area where we can cut 
costs and save taxpayers money. Additionally, it would be 
helpful to understand the financial impacts of EPA regulations 
and other Federal mandates on the Administration.
    I am extremely concerned about how GSA will cope with the 
added costs and burdens from the expansion of the EPA lead 
based paint removal to commercial buildings. We fought this 
battle for a long time and I thought the battle was over and I 
thought we had won. Now they are talking about expanding this, 
the lead based rules, to commercial buildings.
    We know the problems. We know that out there you have to 
have inspectors, they have to certify and all of these things, 
and we were not able to get this done. But we did come to a 
happy conclusion on that. I just want to, I know this is not 
really the GSA, this is the EPA, but you are having to deal 
with it so we want to weigh in on it.
    I also continue to be concerned with GSA's exclusive use of 
the LEED standard in certifying green buildings. This has 
created unintended consequences such as the use of foreign 
lumber instead of American grown lumber. Obviously this is 
costly, inefficient and environmentally unsound.
    I believe that the increased interest in green buildings 
and advances in technology in recent years have and are 
creating new building ratings systems. These systems should be 
allowed to compete in the market and Government agencies should 
be able to determine which systems meet their performance 
requirements.
    We also need to practice careful oversight to ensure that 
the best rating systems are being used in Government decisions. 
I am pleased to have Mr. Ward Hubbell, president of the Green 
Building Initiative with us today to discuss some of the issues 
with the lead and explain other certification programs used by 
the CBI.
    I am also happy to have Mr. Jeffrey DeBoer, president and 
CEO of The Real Estate Roundtable, here today. He will speak to 
the state of commercial real estate industry wide. I think he 
may even have some comments to make on the thing that concerns 
me right now having to do with the lead paint rule.
    Thank you, Madam Chairman.
    [The prepared statement of Senator Inhofe follows:]
       Statement of Hon. James M. Inhofe, U.S. Senator from the 
                           State of Oklahoma
    Thank you, Madam Chairman, for holding this hearing. I am pleased 
to have the opportunity to discuss ways in which we can improve 
efficiency and eliminate waste within GSA.
    Given the current state of the economy, people and businesses 
around the country continue to tighten their belts and look for ways to 
save money. The Federal Government should be doing the same. I look 
forward to hearing from Administrator Johnson on GSA's efforts to 
improve property purchases and maintain efficient buildings.
    For me, this is an area where we can cut costs and save taxpayer 
money. Additionally, it would be helpful to understand the financial 
impacts of EPA regulations and other Federal mandates on the 
Administration. I am extremely concerned about how GSA will cope with 
the added costs and burdens from an expansion of the EPA lead-based 
paint rule to commercial buildings. Potential purchasers of GSA 
property may be wary of having to comply with costly regulations.
    I also continue to be concerned with GSA's exclusive use of the 
LEED standard in certifying ``green'' buildings. This has created 
unintended consequences, such as the use of foreign lumber instead of 
American-grown lumber. Obviously, this is costly, inefficient, and 
environmentally unsound.
    I believe that the increased interest in green buildings and 
advances in technology in recent years have, and are, creating new 
building rating systems. These systems should be allowed to compete in 
the market and government agencies should be able to determine which 
system meets their performance requirements.
    We also need to practice careful oversight to ensure that the best 
rating systems are being used in government decisions.
    I am pleased to have Mr. Ward Hubbell, President of the Green 
Building Initiative, with us today to discuss some of the issues with 
LEED and explain another certification program used by GBI.
    I am also happy to have Mr. Jeffrey DeBoer, President and CEO of 
the Real Estate Round Table here today. He will speak to the state of 
commercial real estate industry nationwide. This is particularly 
important as GSA looks at disposing of excess and underutilized 
properties.
    Thank you again Madam Chairman for this opportunity, I look forward 
to hearing from all the witnesses.

  STATEMENT OF HON. SHELDON WHITEHOUSE, U.S. SENATOR FROM THE 
                     STATE OF RHODE ISLAND

    Senator Whitehouse [presiding]. Let me first thank Chairman 
Boxer for agreeing to hold this joint hearing of the full EPW 
Committee and my Oversight Subcommittee. Thank you, 
Administrator Johnson and all of the witness, for being here.
    As the Administrator of GSA, I believe you are the largest 
single consumer of energy in the United States, accounting for 
1.5 percent of the Nation's annual energy consumption. That 
probably actually makes you the world's largest consumer of 
energy, not just the United States' largest consumer of energy.
    The Federal Government spends about $24 billion every year 
on electricity and fuel and in the current budget climate, 
anything we can do to help find opportunities for greater 
efficiency and cost savings for the American taxpayer is worth 
doing.
    We also, as the U.S. Government, have access to capital in 
order to make the investments to achieve that payoff, unlike 
many homeowners in Rhode Island and places like that who could 
save a lot of money this way but have difficulty getting the 
capital investment together to make the investment in their 
homes and businesses.
    President George W. Bush and President Obama each issued 
Executive orders calling for the Federal Government to use its 
purchasing power to achieve improved energy and environmental 
performance, and the President has set emissions reductions 
goals for the Federal Government that, if they were met, would 
save an estimated $8 to $11 billion in energy costs over the 
next decade, surely a worthy target. Your General Services 
Administration has been a central player in this drive and 
through your purchasing of a vast number of products each year, 
including vehicles and office supplies and, of course, the 
buildings that you run.
    On the building side, you own nearly 2 percent of all 
commercial real estate in the United States. Reducing our 
energy and water footprint at these buildings can save 
operation and maintenance costs while also limiting the 
Government's environmental impact.
    You have shown admirable leadership in implementing a suite 
of initiatives in the purchasing and building areas which have 
helped drive the market toward more efficient products and 
encouraged the deployment of new American technologies that 
need a foothold in the market in order to demonstrate success 
and move on to greater success. This, in turn, benefits all of 
us and our economy as these products become more widely 
available.
    So, I commend you for your leadership in these areas and I 
look forward to hearing from you on GSA's next steps in 
achieving the goals of these initiatives.
    I also look forward to hearing from our second panel today, 
what the Government can learn from the private sector. Many 
businesses have already realized significant cost savings and 
improved performance of their own buildings and products and I 
am interested in how partnerships between industry and 
Government can help generate mutual advantage and cost savings 
as well as new markets for efficient products and new jobs.
    So, again, Chairman Boxer, thank you very much for holding 
this hearing. I look forward to working with all of the members 
of the committee to protect our taxpayers and the environment 
through improved efficiency and performance.
    I would recognize the distinguished Senator from Maryland, 
Senator Cardin.

  STATEMENT OF HON. BENJAMIN L. CARDIN, U.S. SENATOR FROM THE 
                       STATE OF MARYLAND

    Senator Cardin. Well, Chairman Whitehouse, Chairman Boxer 
and Senator Inhofe, thank you very much for convening this 
hearing.
    Administrator Johnson, it is a pleasure to have you before 
our committee. We all understand that this Nation is facing an 
energy and environmental and fiscal challenge. The way that we 
administrate our buildings can very well help us in each one of 
those categories.
    My colleagues have already mentioned the Executive orders 
that have been issued by this Administration and previous 
Administrations that deal with these issues. The Congress 
passed the Energy Independence and Security Act of 2007 that 
established important performance standards to reduce energy 
consumption and lessen the environmental impact of Federal 
facilities.
    I must tell you the trend toward green buildings is not 
motivated by just the environment or doing something that you 
feel good about. There is a fiscal reason why we do it. It 
makes good sense from a business point of view.
    The U.S. Green Building Council, the independent private 
trade organization responsible for developing the Leadership in 
Energy and Environmental Design or LEED certification program 
has issued a detailed report on this and their report shows us 
that by doing LEED certification, we actually save money during 
the life cycle of the building, saving money in public 
buildings for the taxpayers of this country.
    Due to Maryland's proximity to Washington, DC, Maryland has 
a large number of both federally-owned and federally-leased 
properties throughout the State. In addition to these Federal 
Agencies, Maryland is home to 16 Department of Defense 
installations, dozens of national parks and historical sites, 
and many fantastic national wildlife refuges located along the 
waters and tributaries of the Chesapeake Bay.
    Ensuring that the Federal Government with its multimillion 
acre footprint is taking adequate measures to protect natural 
resources like the Chesapeake Bay, to conserve energy 
resources, is important in the long-term economic and 
environmental health of the country. I believe the Federal 
Government has a responsibility of leading by example when it 
comes to reducing energy costs and consumption and minimizing 
the impact the Federal facilities have on the environment.
    The Government should not be exempt from paying its fair 
share for mitigating or controlling its impacts on the natural 
environment. I am proud that I have authored two separate bills 
granting these responsibilities to the Federal Government.
    First is to design standard requirements that all new 
Federal buildings must meet to protect the predevelopment 
hydrology of project sites. Stormwater runoff is the largest 
source of water pollution in this Nation. This provision, as 
part of the Energy Independence and Security Act, is designed 
to limit the impact Federal facilities have on water quality.
    The second bill, which became law in the last Congress, 
ensures that the Federal Government pays it fair share of the 
costs of municipal stormwater infrastructure fees where the 
Federal Government has a structural presence.
    I want to thank the Administration for help in the passage 
of both of these laws. I think they are important statements 
that the Federal Government in fact will comply, as any 
landowner, with their responsibility for our environment.
    Local governments and residents should not have to pick up 
the tab for the Federal Government when it comes to paying for 
water infrastructure maintenance. The GSA's responsibility for 
complying with these laws, it is their responsibility, and I 
look forward to hearing the progress from you, Administrator 
Johnson, in the compliance with both of these laws.
    The Federal inventory of buildings in Maryland runs the 
gamut in terms of sophistication and sound environmental 
design. The new FDA facility in White Oak will be the state-of-
the-art green buildings that save money on electricity and 
water usage. This is very much to the benefit of the Federal 
taxpayers.
    Yet, at the other end of the spectrum there is a Baltimore 
Federal Courthouse. Simply put, the Baltimore Federal 
Courthouse is an embarrassment in design and construction. 
Baltimore Courthouse remains the most poorly-constructed U.S. 
courthouse in the country. The building has by no means been a 
money saver for the taxpayers. An inefficient 35 year HBAC 
system, inefficient windows, wasteful, leaking and frequently 
failing plumbing infrastructure has cost Federal taxpayers 
millions of dollars over the years.
    The wise investment from a life cycle cost perspective 
would be either to start over with a newly-designed green 
building or to give the current structure a massive renovation 
overhaul because it does not make sense to pump more taxpayer 
life support money into this perpetually-failing Federal 
building.
    I really want to acknowledge and thank Bob Peck, the 
Commissioner of Public Building Services. He has taken a 
personal interest. He has visited the facility, he has worked 
with us, and I just really want to applaud that type of effort.
    I know these are difficult fiscal times and we need to make 
the right investments to save taxpayer money. Here is one area 
where I hope we can move forward.
    I look forward to working with GSA. The Administration has 
indicated that Federal facilities play a huge part in the 
development of our cities like Baltimore and I think that we 
can do a more efficient job for the taxpayers of this country 
working together to advance our environment, advance our energy 
policies, and advance our fiscal needs.
    Thank you, Mr. Chairman.
    Senator Whitehouse. Thank you, Senator Cardin.
    Administrator Johnson, before I turn to Senator Merkley, 
you are not here before this committee all the time. But as a 
member of the committee I want to let you know that this is not 
the first time that Senator Cardin has raised these concerns 
about his courthouse, to put it mildly, and I am certain it is 
not going to be the last time.
    [Laughter.]
    Senator Whitehouse. So, I urge you to give them 
considerable weight.
    Senator Merkley.

 STAEMENT OF HON. JEFF MERKLEY, U.S. SENATOR FROM THE STATE OF 
                             OREGON

    Senator Merkley. Thank you very much, Mr. Chair.
    Administrator Johnson, it is great to have you here, and in 
the midst of a national dialog about fiscal responsibility, and 
certainly an important opportunity to save money and improve 
the environment is to reduce the amount of energy we consume in 
our Government operations.
    Certainly the technologies exist and the Federal Government 
is in a position to take the lead, take the lead in the use of 
smart materials including greater use of wood in a variety of 
capacities and to make certain building practices more 
commonplace.
    I think the Federal Government has been taking a lot of 
steps in the right direction. But we can go further and faster. 
I particularly want to encourage the Administration to pursue 
every possible effort to electrify its fleet of vehicles.
    There is more and more presence in the private markets, 
firms recognizing that in delivery van type operations where 
you have common stops with significant loads, regenerative 
braking saves enormous amounts of power or recaptures the 
power, and that in the lifetime costs are becoming very 
competitive or better than gasoline fueled vehicles.
    Certainly in the context of world events today, as we look 
at the unrest around the world in Libya and Egypt and so forth, 
it should put an exclamation point on the national security 
costs of depending on the Middle East for oil.
    So, much can be done. Thank you for being here to help lay 
out a vision for where we are headed.
    Senator Whitehouse. Let me, Administrator Johnson, add to 
Senator Merkley's point that an active role by GSA in that 
would also help build out the electronic infrastructure for 
electronic vehicles for recharging and so forth. There is a 
little bit of a chicken or the egg problem as we move more into 
that, where you find recharging and so forth. So, I would 
strongly encourage you to do that.
    If you could please go ahead and give your testimony.

   STATEMENT OF MARTHA JOHNSON, ADMINISTRATOR, U.S. GENERAL 
                    SERVICES ADMINISTRATION

    Ms. Johnson. Thank you very much.
    Good morning Chairman Boxer, Chairman Whitehouse, Ranking 
Member Inhofe, Senator Johanns, members of the committee and my 
Senator from Maryland. I appreciate being here today to discuss 
GSA's role in encouraging a high-performing and sustainable 
Government that reduces waste, increases efficiency and lowers 
costs while fostering innovative new sectors of the economy 
that will help create jobs.
    I am here today not just as the head of an agency, but as a 
businesswoman, which is not just a job, but an identity, an 
identity which compels my commitment to making the most 
reasonable and cost-effective decisions possible on behalf of 
taxpayers.
    GSA is an agency which has a broad portfolio. We manage 370 
million square feet of space and help facilitate over $62 
billion in acquisitions through our contracting vehicles. We 
touch many markets and wide portions of the supply chain.
    At this moment, we have to do more with less. We have to 
use our resources efficiently and effectively, shrink our waste 
and be agile and responsive to new opportunities to do just 
that. We have to be the best of what is promised by 
sustainability.
    To the private sector, sustainability is about 
productivity, efficiency, innovation and the bottom line. It is 
about rooting out waste and finding greater efficiencies. This 
requires innovation. Whether it is providing cutting edge IT 
solutions like cloud computing or installing geothermal heating 
technology in our buildings, we are pursuing emerging and ever-
improving services and technologies that will give us the best 
value for each taxpayer dollar expended.
    By providing cloud solutions and consolidating data 
centers, we can cut into the billions spent annually on data 
center infrastructure. By installing the latest technologies in 
our buildings, we can reduce energy usage and save on operating 
costs. By moving toward fuel efficient and hybrid vehicles, we 
can work to reduce the Federal fleet's fuel consumption and 
encourage domestic industries. By embracing initiatives like 
telework and alternative workplace strategies, we can reduce 
our footprint and our need for real estate while increasing 
productivity.
    We are pursuing these initiatives in partnership with 
industry. We need to understand the latest trends in the 
market, encourage innovation and support good ideas. We must be 
flexible and nimble to incorporate new technologies.
    That is why we have reached out to industry through our 
Green Proving Ground Program, to figure out the latest 
innovative technologies and solutions and work to incorporate 
them into our buildings, measuring and reporting the results. 
That is why we have established a green-gov supply chain 
partnership to hear from companies that are reducing their 
greenhouse gas emissions, to learn how best to use 
sustainability considerations in our Federal procurements. That 
is why the pending removal of the statutory price limitation. 
We intend to initiate a pilot program to lease 100 plug-in 
electric vehicles and test them in five major cities across the 
United States.
    By pursuing and making available the latest the market has 
to offer, as well as utilizing cost-effective technologies and 
solutions, we can make significant progress in improving energy 
performance and cutting costs.
    The initiatives outlined above are just a handful of those 
that we pursuing to encourage a sustainable Government. It 
increases our efficiency and fosters emerging sectors of our 
economy.
    The President has made operational excellence in Government 
a key goal, and GSA is proud to be part, the central part, of 
this effort.
    I welcome the opportunity to be here today and I am happy 
to answer any questions you have.
    Thank you.
    [The prepared statement of Ms. Johnson follows:]



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Senator Whitehouse. Thank you, Administrator Johnson.
    You are presently at work in the Pastore Federal Building 
in Providence, RI, named after my illustrious predecessor, John 
O. Pastore, doing energy refits there in the air conditioning 
system, with additional insulation and advanced metering that 
are estimated to save $15,000 to $35,000 per year once they are 
completed. We are also very pleased that a Rhode Island 
contractor is doing that work and creating jobs.
    But I am interested in how that fits into the larger 
picture of how you identify buildings for that kind of work. Do 
you conduct energy audits of all buildings to identify energy 
savings projects such as these, and what criteria does GSA use 
for selecting building retrofits? What is that process?
    Ms. Johnson. Thank you for that, and thank you for the 
comments about the building. Some of these projects are 
terribly exciting. It is good to see them.
    We have a regional structure that has people across the 
United States, experts in both sustainability, energy design 
and, of course, building maintenance. One of the things that is 
important for us is that real estate is a local business. It is 
what is going on in that community and in that environment, in 
that weather, in that altitude. So, we need to take a number of 
factors into consideration as we consider which buildings to 
invest in and to assess.
    But there is no question that one of the great things about 
the sustainability effort is that it asks us first for data. We 
need to know what we are talking about. We need to know the 
baseline we are working from or we cannot demonstrate 
performance improvement or make good decisions.
    So, we do a fair amount of auditing and we are aware of our 
buildings and we survey and understand what is going on in 
them, look at the energy costs, look at what is happening to 
them, their age, their usage. One of the amazing things about 
buildings is that of course every day a couple of hundred 
little heaters walk into a building and walk out. They distort 
and change the environment all the time. We need to be 
monitoring very carefully to understand what is happening in 
those buildings. It is using that kind of data that helps us 
make our priority list.
    Senator Whitehouse. Is it systematized though so that you 
know that every single one of your buildings is at some point 
going to be triggered for a retrofit review?
    Ms. Johnson. We have a process that, it is called re-
commissioning. Every 4 years we look at the entire, every 4 
years we look at buildings and we assess whether or not from 
the baseline__
    Senator Whitehouse. So this is baked into that 4-year 
process.
    Ms. Johnson. Yes. It is a very, very rigorous systematic 
data base project.
    Senator Whitehouse. On the purchasing side, back in the 
1990s there was an evaluation criterion for environmental 
performance on the Federal purchasing schedules which I 
understand was removed in a subsequent rewrite of the Federal 
Acquisition Regulation. It seems to me that it makes sense to 
help people who want to do business with the Federal 
Government, particularly small businesses, to be able to 
identify which products would be the most effective from an 
efficiency point of view.
    Would you be willing to work with me and with the Chairman 
to develop a non-binding factor for the Federal schedule that 
takes into account energy and environmental performance?
    Ms. Johnson. We would certainly be delighted to work on 
that. There are a number of ways of going about trying to 
figure out which products perform in what ways along a green 
scale. I think we are at a time when that whole conversation is 
unfolding. There are all sorts of ways of assessing the 
performance of products and it is a, it would be a delight to 
work on that with you. Yes.
    Senator Whitehouse. Good. My last question is that you are, 
the Federal Government, which you tend to administer behind, is 
the Nation's largest consumer of electronics and you dispose of 
around 10,000 computers every week. You have a task force 
working right now on your strategy for managing this electronic 
waste stream.
    What are your initial thoughts at this point on where GSA 
can make an impact in managing that electronic waste which, as 
you know, has considerable metals and both potential hazards 
and potential opportunities from recycling and capturing the 
waste?
    Ms. Johnson. Yes. E-waste is a huge and emerging critical 
issue and we are working with the EPA to figure out, in a 
partnership, how we can attack this problem. There is a lot of 
baseline that we need to do. We are expecting to issue our 
guidance and thoughts in May and that will, I will be happy to 
provide that to you so that you can understand where our 
thinking is.
    It is about trying to figure out the entire stream, how do 
we, specify what we want to buy to put into the system and then 
how do we dispose of what we already have. There are enormous, 
there is toxic waste, there are precious metals that we should 
be recapturing rather than re-buying, and there is, of course, 
landfill considerations. There are international trade issues. 
We need to be sure this is a problem that we take care of here 
and not export.
    Senator Whitehouse. Well, we will followup in May once they 
are out and my time has expired so I will yield to Senator 
Inhofe.
    Senator Inhofe. Thank you, Mr. Chairman.
    As I mentioned in my opening statement, I have been 
concerned about the rating systems that are out there. It was 
2006 that the GSA concluded that the LEED was the most 
appropriate rating system. I would ask you, what kind of steps 
have you taken since then? I know you have not been here all 
that time, but have you taken to look at other rating systems, 
other technologies?
    Ms. Johnson. We have. Under the ESA, under the Act, we are 
asked to indicate a predominant system that we trusted and 
used. But we are asked also to review and reconsider every 5 
years which one we are focused on.
    LEED has been the one we have been using. We have also, 
however, been looking at Green Globe, and we are more than 
interested in finding out the usefulness and the applicability 
of any of these standards and performance measurement systems 
so that we can guide the asset management of our inventory 
better.
    So, the bottom line is we are open to considering and 
always reviewing which systems steer us in the best directions, 
and we have a 5-year cycle that we are__
    Senator Inhofe. Yes, I was going to mention that ESA is not 
just an encouragement to look in, you actually have a deadline 
of 2012, I think.
    Ms. Johnson. Yes.
    Senator Inhofe. Will you commit to a deadline of that 2012, 
as the regulations require, so that we can really get a chance 
to have a robust study of this system as opposed to others that 
are available and all that?
    Ms. Johnson. Oh, absolutely. We think of this in two ways. 
One is that we want to be sure that we are guiding our own 
assets well. We are a major player in the real estate market. 
At the same time, we want to be sure we are signaling to the 
market because we are a big player and in spite of ourselves, 
we signal, that we are signaling with the best practices and 
the best data and the best performance measures.
    So, yes, I completely commit to being rigorous in our 
review and being sure that we are steering both ourselves and 
the signals that we are sending about those kinds of__
    Senator Inhofe. Let's get, I think between now and 2012 we 
could get some updates because things are moving pretty fast 
right now.
    Ms. Johnson. They are. That is one of the reasons why this 
cycle is an important one to observe and not delay on.
    Senator Inhofe. Yes. Now, let me ask you a question. I have 
been on this committee, well, actually, before coming here in 
1994 I was on the same committee in the House, and I can 
remember so many different times you had to make these 
decisions as to are we talking about a new building as opposed 
to a renovated building, all these, it becomes very political. 
I have been guilty of that myself a few times, of looking and 
saying, what would benefit us the most.
    In many of the boards and commissions that we have, 
Administrator Johnson, we have the opportunity to have a 
consulting group or someone, a board that we consult, to make 
determinations. Now, I know you do have a board in terms of 
green energy and technology that is moving and looking at the 
financial considerations. Have you given thought to, is there 
anything out there that would serve as a consulting group that 
you could talk to beyond just the GSA or within the GSA that 
could help make these determinations?
    Because it is pretty heavy lifting when you are talking 
about having something over a period of time, when you write it 
off, all these considerations, like we do in the private sector 
because that is what I did in the private sector.
    Ms. Johnson. Are you talking about disposal or are you 
talking about disposal of real estate or__
    Senator Inhofe. Both. Creating new, if you are a, we went 
through the thing on transportation, I remember, some years 
ago, and the question is always do you take something that is 
existing right now and you go through a renovation, or do you 
build new? All of these proposals are out there, but the 
proposals are always coming from someone who, obviously, stands 
to benefit from it.
    So, is there any group, or do you think there is any 
necessity for, a group to consult on these things? This would 
be a fiscal consultation.
    Ms. Johnson. Yes. One of the joys of being in the real 
estate business is that you are involved in a lot of local 
stakeholdering that is__
    Senator Inhofe. Yes, you are.
    Ms. Johnson. One of the things that I have to say I am very 
proud of is that GSA, by virtue of its size and its history and 
the range of its portfolio, we have, I think, a tremendous 
expertise inside the organization that is then honed as we have 
to explain within the Administration and then to Congress how 
we are thinking about what building projects and so on. These 
are huge building projects and require, I think, that kind of 
scrutiny and care.
    I am more than interested in being sure that our process is 
as robust as possible. I had not thought about a particular 
board or source of other input. I am happy to consider ways in 
which we can be getting the right kind of support and advice.
    Senator Inhofe. Yes, yes, I think, and I am the last one to 
advocate a new board for anything around here, but I do know 
this, that it is even for your own protection because there are 
always accusations that certain groups are getting benefits. It 
is easier to talk about this before it comes up than 
afterwards.
    Ms. Johnson. Yes, I think the governance of the process and 
the way you get expertise is __
    Senator Inhofe. Good. Thank you very much.
    Ms. Johnson. Thank you.
    Senator Inhofe. Thank you, Mr. Chairman.
    Senator Whitehouse. Thank you, Senator Inhofe.
    Chairman Boxer.
    Senator Boxer. Thank you so much.
    I am so delighted to have this opportunity to see you 
again.
    Ms. Johnson. It is good to see you.
    Senator Boxer. The last time I saw you we were freezing.
    Ms. Johnson. We were freezing.
    Senator Boxer. We were freezing on the San Diego border 
with Mexico and we were there because there is a wonderful new 
crossing point that is being built at that border with Mexico 
because we have tremendous trade there and we have terrible, 
terrible congestion there. So the Administrator came out to 
beautiful San Diego and we froze that day.
    It was cold. You know that song, It Never Rains in Southern 
California? Do not believe it all the time. It is not always 
true.
    Senator Inhofe. Where is global warming when you need it?
    [Laughter.]
    Senator Boxer. Well, that is right. I needed global warming 
that day. Actually, we got it 2 days later, but that day it was 
freezing.
    So, here is the thing. Do you know the cost of energy that 
the Federal Government from, the total cost? I saw it in one 
document and it was $24 billion a year. Is that accurate? Do 
your people know how much we spend on energy every year?
    Ms. Johnson. Not if you include DOD. I think it is even 
greater if you include DOD.
    Senator Boxer. Well, what you are in charge of?
    Ms. Johnson. What I am in charge of?
    Senator Boxer. Yes.
    Ms. Johnson. Four hundred fifty million.
    Senator Boxer. Four hundred fifty million a year?
    Ms. Johnson. Four hundred fifty million for buildings a 
year.
    Senator Boxer. OK, $450 million for buildings every year. 
So I want to point out that that is a lot and we also, you have 
to deal with water and all of the other activities that go on. 
Is that an electric bill? Does that include heating, cooling, 
what is that?
    Ms. Johnson. That would be everything, yes, and that is 
about 10 percent of the Federal Government's overall usage.
    Senator Boxer. Only 10 percent, GSA? OK, interesting. Is it 
fair to say that, well, it may not be fair to say, but is there 
any coordination, since you only are involved with 10 percent, 
where is the other 90 percent coming from?
    Ms. Johnson. From DOD, I would assume.
    Senator Boxer. Do you talk with them about any of this?
    Ms. Johnson. Yes, we do. There can always be more and I 
know that they are embarking on a lot of different efforts. I 
am particularly in touch with the Navy because, of course, they 
are really very serious about their energy reduction so that 
they can spare themselves the costs and the security issues of 
carting fuel around.
    Senator Boxer. Yes.
    Ms. Johnson. So, the Navy is one of the places that I am__
    Senator Boxer. I know the DOD is doing a lot. I was 
reading, Senator Inhofe, which is, this is totally your 
territory, but I am understanding that in foreign places we are 
looking to more solar, portable type of energy because it is so 
dangerous to move the fuel in some of these areas where we are 
in theater. So, I think that $24 billion is probably about 
right if you figure you are using 10 percent. Is that right? 
Does somebody have a calculator there? If $450 million is 10 
percent, what is the rest of it? How do we get $24 billion?
    Ms. Johnson. The $450 million, that is buildings. So then 
you add fuel for ships, vehicles, airplanes, it can add up 
quickly.
    Senator Boxer. OK. Because the President used a $24 billion 
number and that is huge.
    Ms. Johnson. That would probably be the whole thing then.
    Senator Boxer. OK. So just the buildings, I want to go back 
again, 10 percent of the buildings, or 10 percent of the bill 
is $450 million that you are in charge of. Now, could you 
describe your role in implementing the Executive order of the 
President, both Presidents actually reduced it, saying the 
Federal agencies need to account for and reduce their energy 
and water use and pollution.
    Ms. Johnson. We have a number of different roles. The first 
one, of course, is to see that we ourselves are efficient. That 
is GSA, for GSA. Then of course through our policies and our 
high performance green buildings organization, we are doing a 
fair amount of data gathering, analysis of best practices, 
running pilots.
    Senator Boxer. Are you quantifying your savings?
    Ms. Johnson. Yes, we are quantifying our savings.
    Senator Boxer. Do you have any numbers for me as to what 
you are saving?
    Ms. Johnson. I do not have any numbers right now, but I can 
certainly provide them.
    Senator Boxer. When will you have the first accounting of 
the savings from some of the things you have been doing?
    Ms. Johnson. Oh, I can get them for you this week.
    Senator Boxer. That would be really good.
    Ms. Johnson. I am just talking about quoting them off the 
top of my head.
    Senator Boxer. No, I understand. Anybody behind you know 
those numbers of the savings?
    Ms. Johnson. Some are real, some are projected and we will 
get you what we have.
    Senator Boxer. Would you do that? That would be very 
helpful. I appreciate it, to get that this week and hand it on 
to my colleagues.
    Do you have a goal of savings that you want to make out of 
this $450 million a year? What is your goal?
    Ms. Johnson. Well, our goals are constructed in a number of 
different ways. We are looking at significant goals around 
energy consumption.
    Senator Boxer. How much do you want to save? What is your 
goal of savings?
    Ms. Johnson. We are aiming to save 30 percent in our energy 
consumption by 2015, by 2020, and we are looking to save 16 
percent of our water consumption by 2020, and we are also 
looking at__
    Senator Boxer. Off of what year's base?
    Ms. Johnson. Two thousand and three.
    Senator Boxer. OK. So I need to know what you have done so 
far. That would be, so you are going to get that to me on 
water, and on electricity.
    Ms. Johnson. On waste disposal, we can do that, too.
    Senator Boxer. Yes. That would be very, very helpful 
because frankly, we had President Bush and President Obama say 
this really key.
    Ms. Johnson. Yes.
    Senator Boxer. As we struggle to find our savings, and I 
think, if you could, so I will close with this. I mean, I think 
if you could be a model and learn from the private sector, 
which you said you are doing, it is terrific because if we can 
do it here and it works, then best practices can go out to, for 
example, city governments, county governments. If you tally all 
the buildings that are run by government at every level and 
they all became cost effective and efficient, this is a good 
thing, I think.
    So, we are looking to you. I am going to look to you as 
Chairman of this committee for these answers and we are going 
to talk to you every few months about it and it probably, with 
the Chairman of the subcommittee with his leadership, I think 
this is key. So, I am hoping we can do this again in about 6 
months and see where you are at that time.
    Thank you, Mr. Chairman.
    Senator Whitehouse. Thank you very much, Chairman Boxer. 
Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman. Thank you, Ms. 
Johnson, for being here.
    The LEED rating system discriminates against the use of 
most American wood products. So GSA, using the LEED system, 
discriminates. Can you tell me why?
    Ms. Johnson. I cannot tell you exactly why. I can say that 
we are looking at the LEED system to be sure that it is setting 
us up for success on all the dimensions that are 
environmentally fragile that we need to be paying attention to.
    Certainly, the understanding that I have about wood is that 
the wood content in GSA buildings is too little for us to use a 
LEED point for certification. But we can certainly, so we are 
not trying to set limits on the choices of wood supplies 
through that standard. So, it is about a sizing issue, I 
understand. But I can supply a little bit more for the record 
to, to verify that.
    Senator Boozman. No, I think that is important because I 
think it is clear that LEED does discriminate and that you all 
are discriminating and that most of the wood products produced 
in the United States do not qualify. I would argue that 
certainly wood is very environmentally friendly, it stores 
carbon, and so I guess the other thing is that as you do the 
study, the review process that is done, are you going to have a 
public comment or are you going to be able to have it put in 
that way?
    Ms. Johnson. OK, I understand that the Secretary of Energy 
will do a public comment. So yes, there will be some public 
comments possible, absolutely.
    Senator Boozman. Very good. So, you are looking into the 
wood.
    Ms. Johnson. Thank you very much.
    Senator Whitehouse. Senator Cardin?
    Senator Boozman. I am sorry. Can I reclaim for just a 
second.
    If that is the case after looking into it, how can that be 
changed?
    Ms. Johnson. Well, the LEED, LEED specifically is not a 
government measurement. It is managed by a not-for-profit 
organization. So, it is not necessarily for us to change, but 
we can__
    Senator Boozman. No, but how can you change the fact that 
that is what you are using exclusively?
    Ms. Johnson. Oh, well, we are under a five-year cycle in 
which we are committed to reviewing our use of whatever 
performance measurement standards we are setting up. We are 
currently in the middle of that and in 2012 we will be deciding 
what we should be__
    Senator Boozman. So, you could administratively say, if you 
agreed that wood was a problem, you could administratively say 
that we are going to continue to use LEED but also we want to 
use more of this product or that product?
    Ms. Johnson. I think our__
    Senator Boozman. I mean, you are not locked into this 
legislatively.
    Ms. Johnson. No. We are asked to promote good performance 
measures and in that sense we have looked to LEED over the last 
period of time and we are in constant review of that and we are 
in a specific 5-year cycle review of it. I think it is 
important for us to be as open as possible about what we 
understand about these techniques and tools so that the rest of 
industry can understand why we are leaning in the way we are.
    Senator Boozman. Right. But if you wanted to, tomorrow you 
could change your rule? I mean, this is your rule.
    Ms. Johnson. Well, we can certainly, yes, we can change, we 
can change it. What we want to do is be sure that we are in 
concert with the Department of Energy about it. The National 
Labs are involved in helping us to do these reviews. We are in 
the business side. They are in the science side. I want to be 
sure that we are in good alignment with them. So, it is not 
like I want to act like a solo player on that.
    Senator Boozman. OK. Thank you.
    Senator Whitehouse. Senator Boozman is the Co-Chair of this 
hearing. I would be very interested in working with you and 
with Ranking Member Inhofe and the Chairman on that issue.
    Senator Cardin.
    Senator Cardin. Thank you, Mr. Chairman. Again, welcome, 
Administrator.
    Let me just make one comment about LEED certification. One 
of the things that we are pretty sensitive about in Congress is 
to make sure that what we do as Federal agencies are in 
compliance to what we would expect in the private sector. It is 
interesting that in the private sector, LEED certification 
seems to be the most popular use.
    So, I think before the Federal Government charts out on a 
different standard, that it is important that we be in 
compliance with what is generally accepted in the private 
sector. I think that it is an important point. Because 
otherwise it looks like we are exempting ourselves or using 
special rules, which I think the public does not want to see 
from the Federal Government.
    But let me point out, in your statement you said you want 
to root out waste. Yes, I will bring up the Federal Courthouse, 
but not for your specific reply to that, but I am convinced 
that if this was a privately-owned structure doing private 
business that it would be knocked down and rebuilt or the owner 
would sell it and move on to a new location because the 
budgeting in the private sector does not have the same 
restraints that we have in the public sector.
    Now, you cannot change the budget rules that we have. Only 
we can do that. But it makes no sense to pour good money into a 
structure that is costing us a lot of money and waste. Although 
it may make sense in your annual budget, it does not make sense 
for the taxpayers of this country.
    I just think you have a responsibility to inform us when 
you have facilities that really need replacement or significant 
change and that yes, you have to comply with the budget rules 
and the budget money that you receive. But we need your 
guidance to root out waste.
    I would hope that you would take a look at a building such 
as the Federal Courthouse in Baltimore and give us your 
recommendations as to whether it makes sense to put in the tens 
of millions of dollars that are going to be necessary for 
renovation or whether it is time to consider putting it on 
replacement. I would just urge you to take a look at that and 
work with us so that we can respect the best interests of the 
taxpayers of this country.
    Ms. Johnson. I would be delighted to. I would also just 
like to mention that the sustainability agenda is a tremendous 
tool for the leaders of organizations because it is about 
finding the waste. It is about the culture of the organization 
and the forward leaning that we need to do in order to act on 
all accounts to be sure that we are not wasting money or making 
poor decisions.
    Clearly, the asset base that we have as part of, in our 
real estate portfolio, is one that has at times gotten a little 
long in the tooth and a lot of that needs to be aired, 
understood, and I do think we need to be in close dialog about 
it. I would welcome the opportunity to work in that vein, 
absolutely. Thank you.
    Senator Cardin. Thank you very much. I want you to bring us 
up to date as to how the Federal Government is in compliance 
with the best practices on stormwater runoff on their new 
facilities. I want you also to comment to me whether we, what 
we are doing when we are doing the lease to suite or are using 
existing facilities as to how we are sensitizing the developer 
as to their needs in regards to storm runoff issues.
    Ms. Johnson. Stormwater runoff is a tremendous issue, as 
you have pointed out. I am happy to say that all new 
construction and all major repair and alteration projects have 
the pre-development hydrology provisions that are included in 
the 401 Recovery Act Projects.
    But I will also say that we are really, as an organization, 
we are quite committed to stormwater runoff work and I am happy 
to say that internally we have sort of gone through all of our 
constraints and our loops that we needed to go through and we 
will be paying the fees for the stormwater runoff in the 
Washington area. So, I just wanted to be sure you knew we were 
talking with money as well.
    Senator Cardin. Well, I thank you for that. I would hope 
that you would keep us informed as to how the provisions in law 
that require you to use best practices are affecting your 
building decisions, I mean, whether it is cost effective, 
whether there are other things that we can do, and whether we 
have any concerns as to the landlords we deal with in complying 
with best practices as it relates to stormwater issues.
    Ms. Johnson. All right.
    Senator Cardin. If we need to change policy here or at 
least reflect upon the policy, we need to have that information 
from your Agency.
    Ms. Johnson. I think one of the wonderful things about GSA 
is that we are on the front line so we can see how policy is 
playing out and we are happy to share our observations and our 
understanding as a result of that.
    Senator Cardin. Thank you very much.
    Thank you, Mr. Chairman.
    Senator Whitehouse. Senator Merkley.
    Senator Merkley. Thank you, Mr. Chairman, and thank you, 
Administrator Johnson.
    One of the things that I would find very helpful is to see 
how the GSA has ranked the cost effectiveness of strategies. In 
other words, is the very most effective thing you can do per 
money spent is, the White Rose Initiative, are you familiar 
with that concept where essentially you have white colored 
roofing material, it reflects heat and therefore greatly 
reduces cooling costs? Is that more cost effective than putting 
photovoltaic on the ceiling or adding insulation?
    Because I think there is just kind of a thirst for being 
smart about what we do. I do not see anything in your testimony 
that gives any sense of any sort of cost effectiveness ranking 
effort. I suspect that has gone on, but do you want to share a 
little bit about that?
    Ms. Johnson. Yes, we are eager to understand what we are 
saving when we are engaging in some of these new techniques or 
tools or products or services. I will say the market is rather 
immature on understanding all that performance. So, we are sort 
of at the beginning of gathering the data and understanding it. 
Where we know it, it certainly needs to play into our 
decisionmaking.
    This is a complex portfolio and just the dimensions of it, 
is it energy or stormwater runoff or recycling or waste 
disposal, what are all the tools and techniques and how do we 
balance, where do we put our energy? I would say we are getting 
smarter by the day about tradeoffs. But it is not like a pair 
wise comparison where these two things, one is more efficient 
than the other, then you have a whole other dimension you are 
working on.
    So, it is a portfolio management problem. I think that we 
are pretty smart about portfolios. But it is multidimensional. 
So, it is hard to have one checklist to say, go there first and 
go second.
    Senator Merkley. No, I certainly understand that. But in 
terms of a lot of these technologies around saving energy, and 
a lot of them around greenhouse gases, and understanding kind 
of how for what we invest we get back, even if it has multiple 
dimensions, would be very helpful because if it turns out that 
one technology is twice as cheap on the energy front and three 
times as effective on the greenhouse front but we are doing 
something different because some of us thought it was a good 
idea, that may not be, we would like to put a little more 
science behind this, which is something I think you have 
already expressed.
    Ms. Johnson. Yes. The Energy Star Program was a good 
example of it, helping consumers to be informed consumers 
around energy consumption of the appliances that they were 
buying. I think that we would like to work toward those kinds 
of, more, of intuitively understandable tradeoffs about cars, 
about buildings, about systems. We play a part in that.
    Senator Merkley. Do you have any aspect of your efforts 
that is related to vampire electronics, that is, that so many 
of our electric appliances utilize energy when they are not in 
use, and Europe, I think, is far ahead of the United States on 
this, but when something is sitting there humming when it is 
not being used and it could be programmed differently? Even 
chargers. I just saw one cell company advertising that its 
charger will turn off when there is no load on the transformer. 
Very simple, very straightforward and saves on electronics. If 
you are not familiar with that term vampire, I mean it kind of 
represents the bleeding of electricity in a harmful way.
    Ms. Johnson. Well, it makes the point. We are really, in 
our buildings, trying to look at tight metering, the sub-
metering, so that we can understand what is going on in rooms 
rather than just in the whole building. So that is one way in 
which we are trying to get more precise.
    As I travel around the country, I was recently in Silicon 
Valley, and talking to people who are, there are dozens of 
these kinds of products coming out and we need to be on the 
front edge of knowing them and then being sure that we are 
offering them for the Federal buyer.
    Senator Merkley. I have to say I am guilty of leaving my 
cell phone charger plugged in behind the dresser day in and day 
out, and I would love to have a version that shuts off when I 
unplug my phone.
    Ms. Johnson. As would I.
    Senator Merkley. A couple of other things I wanted to 
mention. I know I am running out of time here. One is that the 
100 plug-in vehicle goal does not sound very aggressive for the 
size of GSA. There is in your testimony, GSA is looking for 
innovative technologies in alternative fuel vehicles and would 
like to initiate a pilot to lease 100 plug-in electric vehicles 
in five cities across the United States.
    The Fiscal Year 2012 budget proposes language that would 
allow GSA to acquire motor vehicles that operate on emerging 
clean-burning technologies. Now, I am not sure if clean-burning 
technologies is related to the source of electricity or 
actually fuel combustion in a car, but you are impeded by a 
statutory price limitation clause. I am assuming that clause 
does not take into account the life cycle costs of operating 
vehicles. But why is the initiative so small and how does the 
clean-burning technologies relate to the plug-in electrics?
    Ms. Johnson. We would like to initiate a 100 car pilot 
project with plug-in electric vehicles. These are new items in 
the American economy. But we cannot purchase them because right 
now the statutory price level is set so that we cannot get our 
hands on it.
    When you run pilots, you find out what is in your way. This 
is one of the things that is in our way. Then when we can, we 
hope to launch with 100 and see what the challenges are and how 
do we synchronize the plug-in capability with the vehicles and 
how do we figure out how one would deploy this.
    There are a lot of questions that we need to get through 
and I think 100 is just literally a starting place.
    Senator Merkley. My time is out. I would love to followup 
on that. I would love to echo the concern about the standards 
in which one standard really looks at, the LEED standard looks 
at energy conservation at the point and therefore discriminates 
against wood, where if you look at the life cycle of wood 
versus concrete and steel, you find significant life cycle 
savings.
    The good thing is we are debating among fine tuning 
standards as opposed to whether or not to utilize standards. 
So, it is a, we are moving quickly in the right direction and 
thank you.
    Ms. Johnson. Thank you.
    Senator Whitehouse. Let me thank the Administrator for her 
testimony today. I appreciate very much that you took the 
trouble to come up and you are excused onto your other duties 
and I will call up the second panel.
    Ms. Johnson. Thank you so much. It was a pleasure.
    Senator Boxer. Administrator, as you are leaving, I really 
need those numbers. Thank you.
    Senator Whitehouse. Let me welcome all of you to our second 
panel. I appreciate very much that you are here. I will ask, I 
will do a brief introduction of each of you and then we can 
take the testimony all the way through and then have questions 
at the conclusion of all of your testimony.
    I would urge you to pay attention to the little light in 
front of you that lets you know when your time has expired. 
Your full testimony will be a matter of record, but as a 
courtesy to the members and to each other, if you could try to 
comply with the time restrictions, that would be much 
appreciated.
    Mr. Sindelar will be our first witness. He has served as 
Client Industry Executive for HP Enterprise Services since 
2007, supporting the U.S. public sector with a major focus on 
sustainability, Smart Grid and cloud computing.
    Previously, he was the Deputy Associate Administrator for 
the Office of Governmentwide Policy. Before that, he acted as 
Acting Associate Administrator for OGP. As Acting Associate 
Administrator, Mr. Sindelar directed an office with a 
policymaking role for information technology and accessibility, 
electronic government, smart cards and other emerging 
technologies.
    He received a Bachelor's Degree in Business Administration 
at the University of Maryland.
    We are delighted that he is here and why don't I ask you to 
begin with your remarks, Mr. Sindelar.

   STATEMENT OF JOHN SINDELAR, CLIENT INDUSTRY EXECUTIVE, HP 
                      ENTERPRISE SERVICES

    Mr. Sindelar. Good morning, Senator Whitehouse and other 
distinguished committee members. Thank you for the opportunity 
to testify on behalf of HP Enterprise Services. It is an honor 
to be here today.
    HP is the largest IT corporation in the world with over 
325,000 employees in more than 170 countries. As a major 
producer of products, energy is the significant cost driver, in 
many parts of the world a scarce resource. Therefore, we must 
manage those costs to keep our products competitive in the 
marketplace. This fact brings our commercial practices in line 
with the Government's desire for improved energy use resulting 
in a cleaner environment.
    GSA, as the major procurement agency for the Federal 
Government, is tasked with helping to procure energy efficient 
and environmentally-friendly products, and we have the same 
goal. Further, both HP and GSA are committed to sustainability 
by reducing energy consumption, increasing the use of renewable 
energy, consolidating real estate and data centers, greening 
our supply chain, and leveraging the acquisition of sustainable 
technology products and services.
    Adding to this portfolio, HP includes cloud computing, 
telework, telepresence, applications modernization and shared 
services as key organizational strategies to lower the carbon 
footprint.
    HP has proactively addressed most of these areas for 20 
years or more. As a result, HP long ago learned that the green 
way is the way to optimize costs, reduce waste, increase energy 
efficiency and be environmentally responsible. I will touch 
briefly on some of these areas.
    HP understands that operational sustainability is nearly 
synonymous with energy use and a catalyst for innovation. On 
March 10, HP established a new line of business, Energy and 
Sustainability Management, that leverages our data center 
energy efficiency and now applies it to facilities.
    We know that organizations that can see their total energy 
spent and address priorities for reducing consumption can save 
10 to 30 percent of their energy costs because we have seen 
those savings our self. We urge GSA in their acquisition 
process to emphasize the energy side of the sustainability 
equation as a best practice that will result in the Agency 
spending less on energy and more on their mission.
    In renewable energy, HP continues to set aggressive goals 
to buy more energy from renewable resources such as wind and 
solar. In 2009, HP purchased 3.6 percent of its electricity 
from renewable sources and in 2010 we surpassed our goal of 8 
percent by the end of 2012.
    HP is in the third year of implementing its Global 
Workplace Initiative. This initiative captures under-utilized 
space that results from an increasingly mobile work force which 
now, through enabling technology, is no longer tied to a desk. 
It has allowed HP to reduce its real estate portfolio from a 
baseline of 30 percent and operating costs by 25 percent. The 
environmental attractions are many.
    HP has the industry's most extensive supply chain with more 
than 700 production suppliers in over 1,200 locations 
worldwide. For over 10 years, HP has embraced the challenge of 
raising standards in our supply chain through our Social and 
Environmental Responsibility Program with positive results. We 
are aggressively addressing ways to lower supply chain costs 
and reduce greenhouse gas emissions in manufacturing, packaging 
and transportation. Likewise, we urge GSA to be aggressive in 
greening their supply chain.
    HP was the co-founder of the Electronic Industry Citizens 
Coalition established to provide a code of conduct for the 
global electronics supply chain and improve working conditions 
and the environment. HP is partnering to develop sustainability 
standards with EPA and DOE as well as organizations represented 
at this table and the World Resources Institute.
    HP embeds these standards throughout the life cycle of its 
products including leadership in Energy and Environmental 
Design, LEED, certified data centers and an end of life asset 
management program second to none. In fact, HP complies with 
over 100 eco-label standards worldwide.
    In that regard, HP supports a collaborative approach in the 
development of standards between industry and Government to 
keep costs as low as possible. As these standards are 
finalized, we advocate that GSA incorporate them in a 
meaningful way as part of the acquisition process as an 
incentive for industry investment.
    This concludes my opening statement and I look forward to 
your questions.
    Thank you.
    [The prepared statement of Mr. Sindelar follows:]



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    Senator Whitehouse. Thank you very much, Mr. Sindelar.
    Our next witness is John Bautista, Vice President of New 
Business Development at Arrowhead Systems Incorporated, a 
veteran-owned small business employing approximately 250 
employees at two Wisconsin manufacturing plants.
    The company is comprised of three divisions, the Busse 
material handling division, did I pronounce that correctly?
    Mr. Bautista. That is correct.
    Senator Whitehouse. Arrowhead conveyor division and A & B 
Engineering. We are delighted to have you here, Mr. Bautista, 
and are eager to hear your testimony.

   STATEMENT OF JOHN BAUTISTA, VICE PRESIDENT, NEW BUSINESS 
              DEVELOPMENT, ARROWHEAD SYSTEMS, INC.

    Mr. Bautista. Good morning, Senators, thank you very much 
for allowing me to testify.
    Our customers are predominantly Fortune 100 companies. Our 
products can literally be found on every continent around the 
world. Recently we decided to diversify into the spray foam 
insulation business and that will create five new jobs in 2011.
    Our business model is straightforward and simple. We are 
very serious about our responsibility to our customers, 
creditors, employees and the environment. So, we strive for 
excellence and work very hard to minimize our costs because we 
have to as a small business.
    We have recently been asked to participate in the GSA small 
business pilot program to reduce our carbon footprint. Our 
motivation for participating in this program has been to 
collaborate and exchange best practices and ideas with other 
pilot program participants.
    We also see that we have ourselves a competitive advantage 
because we are able to put ourselves outside of the rest of the 
customers that we deal with. So, some of our customers are 
already Tier One Government contractors so we are, therefore, 
subcontractors and look to help GSA facilitate their 
sustainable goal in acquisitions.
    Some of the contracting opportunities that we see are part 
of this initiative is because GSA's rewriting the purchasing 
powers into new rules. We want to add the Federal Government as 
a contractor as well. These new rules equal opportunities for 
us. So, because of the small company that we are and we have 
established policies and procedures and products and services 
that we feel the Federal Government can use, we feel that it is 
a great fit.
    Another reason for our participation in the program is 
because it makes business sense for us. We exercise cost 
savings opportunities as we go through this and our employees 
are very enthusiastic in participating in this program.
    Some of the initiatives that we have been able to achieve 
is using recycled steel in our manufacturing where possible. We 
use more efficient motors that consume less energy and we also 
use sophisticated controllers that very carefully control 
energy consumption. We have also taken steps to reduce energy 
consumption by installing more efficient lights in both plants 
and we have committed to spraying our own plants with 
polyurethane foam to improve the insulation in the building 
envelope.
    Having said all of this, our participation is not without 
challenges. In some of the challenges we see, there is a hard 
dollar cost associated with attending meetings and 
participating in the program. Another challenge for us is 
return on investment and payback. For us, a good return on 
investment and payback are 10 percent and no more than 24 
months, respectively. Currently, some of these green 
technologies fall significantly outside of this window.
    As I mentioned, we can offer sustainable options in our 
manufacturing to our customers. However, these customers have 
to be willing to pay the added costs associated with 
sustainable upgrades to their products.
    That concludes my comments and I look forward to your 
questions.
    Thank you.
    [The prepared statement of Mr. Bautista follows:]



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    Senator Whitehouse. Thank you, Mr. Bautista.
    My next witness is Doug Gatlin who is the vice president of 
Leadership in Energy and Environmental Design, LEED, at the 
U.S. Green Building Council and is responsible for oversight of 
the family of LEED ratings systems in all major commercial 
market segments.
    Previously, he has worked at the Environmental Protection 
Agency, including as Team Leader for the Energy Star Commercial 
Buildings Program, he has managed the Energy Smart Cities 
Campaign, and helped the U.S. Department of Energy launch the 
Rebuild America Program. We are delighted that he is here.
    Mr. Gatlin, please proceed.

  STATEMENT OF DOUG GATLIN, VICE PRESIDENT, LEED, U.S. GREEN 
                        BUILDING COUNCIL

    Mr. Gatlin. Thank you.
    On behalf of the U.S. Green Building Council and our nearly 
16,000 member companies and organizations and 80 local 
chapters, I would like to thank the Chairman and the members of 
the committee for this opportunity to testify.
    Green buildings are an essential element of any business 
management strategy. They reduce energy, save water, cut waste 
and, perhaps more importantly, have a positive impact on 
occupant health and productivity.
    With an inventory of over 7,000 leased and 1,500 owned 
buildings, GSA has an extraordinary capacity to reduce the 
environmental impact of our Nation's buildings and save 
taxpayer dollars. GSA has already taken significant steps to 
this end, implementing many far reaching energy efficiency and 
green building initiatives.
    I would like to focus on three particular areas. These are 
first, maintaining a robust budget for the Federal Buildings 
Fund at GSA, second, focusing on existing buildings as a 
primary opportunity to reduce waste, and then third, examining 
financial mechanisms that can boost efficiency in both the 
public and private sectors and support GSA's goal to achieve 
zero environmental footprint.
    So first, sustained investment in the Federal Buildings 
Fund. This significantly reduces long-term costs to the Federal 
Government and taxpayers. According to recent estimates, 
including those of GAO, tens of billions of dollars are needed 
to repair or restore Government building assets so that they 
may function properly. A failure to update these buildings 
forces taxpayers to unnecessarily subsidize excess utility 
bills in the short-term, while leaving them exposed to 
additional long-term expenses as restoring and upgrading 
facilities becomes more costly over time.
    The Federal Government is now achieving significant long-
term cost savings through buildings that use substantially less 
energy, cost less to operate and maintain and that lead to 
greater occupant health and satisfaction. In 2010, GSA 
testified that a study of the Agency's 12 first sustainable 
Federal buildings shows energy use is down 26 percent compared 
to commercial office benchmarks, and top performers have 
actually achieved over 50 percent lower maintenance costs.
    Yet, significant cost savings associated with sustainable 
Federal building properties are in jeopardy should GSA's 
Buildings Fund be cut under the Full Year Continuing Resolution 
Appropriations Act of 2011. That is why in February USGBC 
joined nearly 30 real estate, business, trade and environmental 
organizations in a letter to the House and Senate leadership, 
which I have submitted along with my testimony, to express 
serious concern about the proposed cuts.
    One of the activities that is funded by the fund and 
Administrator Johnson referenced is ongoing commissioning of 
GSA facilities. I want to stress the importance of this 
activity, which is part of the funding that could potentially 
be cut.
    According to the latest Lawrence Berkley National Lab's 
studies, commissioning, and that is essentially tuning up the 
energy systems, it is not replacement but it is tuning up 
existing energy systems to make sure they are working properly, 
has a typical payback time of 1.1 years and a 91 percent return 
on investment. This type of commissioning is arguably the 
single most cost effective strategy for reducing utility costs 
in Federal buildings today and is a very important part of 
GSA's current efforts toward greening its Federal building 
stock and simply managing its buildings more efficiently.
    Second is a focus on existing buildings. To tap into the 
building sector's full potential for saving costs and 
resources, it is essential to update both public and private 
existing building stock. A focus on existing building 
operations leverages taxpayer dollars through investment in 
cost saving energy and water saving measures and provides a 
return in investment over time.
    The LEED for Existing Buildings Operations and Maintenance 
System uses measured performance data to track the efficiency 
of building systems and requires whole building metering and 
reporting through the Energy Star System for at least 1 year 
prior to certification. There are now over 900 projects and 
roughly half of the certified square footage in the USGBC's 
LEED System that have used this O&M ratings system.
    Then the third I wanted to mention is financing of 
retrofits. This is critical for congressional support and for 
achieving deeper cost savings from GSA's portfolio. It is tax 
incentives for private building owners to make their buildings 
more energy efficient.
    One of the key elements of the President's recently 
announced Better Buildings Initiative is to reform the current 
Commercial Buildings Tax Deduction, Section 179(d) of the 
Internal Revenue Code, which was signed into law by President 
Bush as part of EPAct 2005. With a few key changes to this 
mechanism, which are outlined in my written testimony, the 
deduction could be used more broadly and effectively by 
commercial owners.
    Thank you for the opportunity to testify and I look forward 
to your questions.
    [The prepared statement of Mr. Gatlin follows:]



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  Response by Doug Gatlin to an Additional Question from Senator Boxer
    Question. Mr. Gatlin, GSA is undertaking a variety of efforts to 
improve the efficiency and environmental performance of both new and 
existing Federally-owned and leased buildings.
    What more can GSA do to improve the buildings it oversees?
    Are there any barriers--statutory or otherwise--that inhibit the 
Federal Government's ability to continue to improve the efficiency, 
performance, and sustainability of the Federal building stock?
    Response. While the General Services Administration (GSA) continues 
to be a leader in advancing efficient sustainable buildings. As I 
discussed in my full testimony there are a number of areas that would 
assist GSA in this mission.
      Provide constituent funding to the Federal Buildings 
Fund;
      Focus on existing buildings performance through use of 
LEED for Existing Buildings Operations and Maintenance, expanding 
commission and implementing education and training requirements passed 
in the 111th Congress; and
      Improve financing for new green construction and 
retrofits.

                                 ______
                                 
  Responses by Doug Gatlin to Additional Questions from Senator Inhofe
    Question 1. How does LEED award points for the use of local 
products? How does this process work?
    Response. Like all credits in the LEED rating system the credits 
dealing with local procurement requires documentation and verification. 
Specifically, the current material and resource (MR) credit 5, 
encourages the use of local and regional materials from within 500 
miles of the project for a minimum of 10 percent or 20 percent, based 
on cost, of the total materials value. This strategy is frequently 
adopted, as project data indicates that almost 90 percent of certified 
commercial LEED projects attain this credit.

    Question 2. Who are the board members of the U.S. Green Building 
Council and how do you avoid any conflicts of interest that may arise?
    Response. USGBC board of directors is located on our website: 
http://www.usgbc.org/DisplayPage.aspx?CMSPageID=2382&. In compliance 
with Internal Revenue Service (IRS) guidelines USGBC, has in place a 
conflict of interest policy that board members are required to disclose 
any conflicts they have relative to each call or meeting agenda. That 
information is reflected in official minutes, and the person with a 
stated conflict can participate in the discussion (as long as the board 
or committee does not object) but must abstain from voting on the 
matter. Our full conflict of interest policy is also on our website: 
http://www.usgbc.org/ShowFile.aspx?DocumentID=3351.

    Question 3. In your opinion, has the emergence of additional 
building rating systems had a positive impact of building efficiency?
    Response. While having additional rating systems can assist in 
broader market transformation LEED continues to be the only true market 
leader in the United States. The GSA concluded in its July 2006 study 
on green building rating systems that ``LEED is not only the U.S. 
market leader, but is also the most widely used rating system by 
Federal and State agencies, which makes it easy to communicate a 
building's sustainable design achievements with others.'' LEED is also 
the only rating system that provides opportunities to scale green 
building principles across an entire enterprise by providing 
certification in Volume-Build, Portfolio, Multi-Building Campus, 
Neighborhood Development and Residential programs. By aligning its 
green building goals within the framework of LEED, GSA and other 
agencies ensures that green building principles are credibly evaluated 
on true apples to apples comparison.

    Senator Whitehouse. Thank you very much, Mr. Gatlin.
    Our next witness is Ward Hubbell. Mr. Hubbell is president 
and CEO of the Green Building Initiative which he established 
in 2004. Under his leadership, the Initiative became the first 
green building organization to be certified as a standards 
developer by the American National Standards Institute and is 
in the process of establishing its proprietary tool, the Green 
Globes Environmental Assessment, as an official and the 
standard.
    I should note, as Senator Merkley is well aware, he serves 
on the board of the Portland Chamber of Commerce and the Oregon 
Business Association.
    So, we welcome you from the far coast and look forward to 
your testimony, Mr. Hubbell.

 STATEMENT OF WARD HUBBELL, PRESIDENT, GREEN BUILDING INTIATIVE

    Mr. Hubbell. Thank you, Mr. Chairman.
    Chairman Boxer, Chairman Whitehouse, Ranking Member Inhofe 
and distinguished members of the committee, thank you so much 
for having me here today.
    I represent the Green Building Initiative of Portland, OR, 
the exclusive U.S. licensee of Green Globes, which is an online 
green building assessment and ratings system for new and 
existing commercial buildings. Our Green Building Assessment 
Protocol became an ANSI standard last year in 2010.
    The scope of my testimony today will be to share with you 
how our organization has worked with Federal agencies in ways 
that I believe have resulted in improvements in both the 
quality and the value of green building assessment and 
certification in the Federal sector in hopes that we can 
encourage this committee and the GSA to promote policies that 
allow for competition in this area.
    Green Globes is an established and proven means of 
evaluating and improving the environmental performance of new, 
renovated and existing commercial buildings. Green Globes 
delivers a comprehensive sustainability assessment through an 
interactive, web-based platform which results in greater ease 
of use, lower costs, and enables the evaluation of building 
performance over time. We also offer what we believe is the 
most credible, comprehensive and cost effective third party 
certification process that exists today.
    Green Globes has been used to certify about 7 percent of 
the cumulative number of Federal buildings certified to date. 
Green Globes is also used by major corporations, school 
districts, State and local governments and higher education 
institutions. It has been incorporated into law as an 
equivalent standard to LEED in more than 20 U.S. States.
    Green Globes is highly compatible with the guiding 
principles for sustainable buildings and the Executive orders 
that have been previously mentioned due to its focus in areas 
such as energy and water conservation, carbon emission 
reduction and continuous improvement. Green Globes is 
recognized as an equivalent standard to LEED by the U.S. 
Departments of Veterans Affairs, Interior and Health and Human 
Services. The U.S. Navy and the Army Corp of Engineers have 
broadened their LEED-only policies to allow for the use of 
Green Globes as well.
    In my view, one of the reasons an increasing number of 
Federal agencies are using LEED alternatives such as Green 
Globes is due to their realization that an approach for 
building assessment and certification that works well under one 
set of circumstances may not in another. The U.S. Department of 
Veterans Affairs is an excellent case in point.
    The VA came to us in search of a cost effective and 
efficient way to assess and certify their existing building 
portfolio. We began with a 21 building pilot program 2 years 
ago. In the course of this collaboration, we found a way to 
more accurately assess the unique systems within healthcare 
facilities, and then used that knowledge to create a variant of 
Green Globes specifically designed for these kinds of 
facilities. Recently, we won a competitive bidding process to 
assess nearly 200 additional buildings in the VA portfolio.
    In addition to being able to more accurately assess and 
certify these unique building types, the Green Globes tool will 
also enable the VA to cost-effectively screen a large number of 
buildings and implement selective improvements before spending 
time and money on third party certification.
    Another good example is the U.S. Department of State. Like 
the VA, the State Department was in search of a less costly, 
more user-friendly and faster way to evaluate their portfolio 
of buildings. They tried Green Globes on a few buildings and 
recently decided to use it to evaluate one of their campuses in 
Arlington, Virginia. They like the ease of use of Green Globes, 
its low cost, and its emphasis on energy performance. They also 
found it useful as a benchmarking tool since it is based on 12 
months of operational data, enabling them to evaluate and 
improve their buildings over time.
    Finally, despite their current LEED-only policy, we are 
also very pleased to be working successfully with several 
regional offices of the GSA to benchmark and certify some of 
their existing buildings.
    I give you these examples not to suggest that Green Globes 
is the only green building rating tool that Federal agencies 
should ever use. Rather, to make the point that an open playing 
field has given several agencies much more flexibility to 
choose an assessment and rating tool that best fits their 
needs.
    It also incentivizes organizations like mine to be 
innovative, to keep its costs to the consumer low and to focus 
intensely on good customer service in order to win and keep 
business.
    In conclusion, I would like to say that given our many 
successful experiences with other Federal agencies, we do not 
believe that GSA should have a LEED-only policy. If general 
performance goals are set, as they have been, agencies should 
have the flexibility to use a variety of tools to help them 
achieve their sustainability goals.
    In their 5-year sustainability plan, GSA lists as one of 
their key accomplishments that they are a proving ground for 
new green building technologies. We believe their policy toward 
green building rating systems should reflect that.
    Thank you.
    [The prepared statement of Mr. Hubbell follows:]



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    Senator Whitehouse. Thank you very much, Mr. Hubbell.
    Now, our last witness is Mr. Jeffrey DeBoer who is the 
founding president and the chief executive officer of The Real 
Estate Roundtable, which represents the leadership of the 
Nation's top 100 privately-owned and publicly-held real estate 
ownership, development, lending and management firms.
    He has served as president and CEO of the Roundtable since 
1997. He also serves as chairman of the Real Estate Industry 
Information Sharing and Analysis Center, an organization that 
is dedicated to enhancing communication between the industry 
and Federal policymakers on matters relating to building 
security, terrorist threats and incident reporting.
    We are delighted that he is here and look forward to his 
testimony.
    Mr. DeBoer.

 STATEMENT OF JEFFREY D. DeBOER, PRESIDENT AND CHIEF EXECUTIVE 
              OFFICER, THE REAL ESTATE ROUNDTABLE

    Mr. DeBoer. Thank you and good morning, Mr. Chairman. It is 
a pleasure to be here.
    You mentioned the Roundtable. I would note that Roundtable 
members hold portfolios containing about 5 billion square feet 
of developed property that is valued, even in today's down 
market, at an excess of $1 trillion. We also hold about 1.5 
million apartment units and in excess of 1.3 million hotel 
rooms.
    I would like to begin by simply saying that our members, by 
and large, find working with the GSA and in particular working 
with the Public Buildings Commissioner, Bob Peck, to be a very 
positive working relationship. Obviously, doing business with 
the Federal Government requires some additional expertise and 
work. But again, our members who take the time to work in this 
area find the GSA to be a very positive business partner.
    My comments today will focus on how the GSA, how we think 
the GSA can improve energy efficiency in buildings through 
their plans and through the discussions here in Congress on 
plans to dispose of assets in the Government's real estate 
portfolio.
    I have provided to you a much more detailed statement for 
the record on a lot of different aspects of this and in 
particular I have detailed some of how we see the current 
markets across the country and the challenges that we think are 
continuing.
    Beginning, I want to note that we do support Congressional 
and Administrative efforts to focus on a more streamlined 
efficient program to dispose of properties. These buildings are 
a drag not only on the Federal budget balance sheet, but also 
on the vitality of local communities.
    I would caution a few things, that things be done 
deliberately and carefully as you always do, Mr. Chairman. But 
you need to understand there are difficult challenges right now 
in valuing of properties and that local markets are being 
treated differently across the country.
    Specifically, I would bring up four points that as you move 
to streamline your disposal program that you keep in mind.
    First, smart decisions about when, how and how many GSA 
controlled properties should be considered to put on the market 
have to consider local market conditions. Today, the commercial 
real estate market across the country reads like a page from 
``A Tale of Two Cities.'' Our recovery is highly bifurcated. It 
is characterized by a robust, optimistic outlook in select 
gateway cities like Washington, New York, and western Los 
Angeles. But many other markets across the country in 
commercial real estate continue to suffer.
    The point here is that new criteria and procedures cannot 
be a one size fits all program. These gateway markets should be 
where you focus now, not only because the local markets can 
absorb the product but because the Government can get a higher 
return than they otherwise might be able to get.
    Seasoned professionals need to be involved. The 
Administration has proposed this in their discussion. We think 
that was a very valuable thing. We also think the list of 
identified properties must be made public on a website and it 
should be update regularly.
    We think that the disposal process presents a rare 
opportunity to improve building energy efficiency across the 
board. I join my colleague on the panel talking about 179(d), 
the current tax incentive. It needs to be reformed, modified. 
The Administration has some good proposals in the Building 
Initiative and we urge you to take a look at this.
    Fourth, I think that we have to keep in mind that as we 
want private sector investors and owners to come in and buy 
these properties, and return them to productive use in the 
communities, but they cannot be confronted with unnecessary 
regulatory burdens. In particular, and Senator Inhofe mentioned 
this, I do want to highlight a regulatory problem that we see 
in the proposed Lead Paint Program. We think that Congress 
needs to press EPA quickly to provide a study, as they are 
mandated, by the way, under the Toxic Substances Control Act, 
determining whether there is truly a health hazard when 
retrofitting buildings due to lead paint. We think it is very 
important that this done prior to these lead paint regulations 
being issued.
    In conclusion, I guess I would say that the GSA real estate 
disposal program has a great deal of positive attributes to it. 
But, if not done correctly, it could hamper economic recovery 
and it could hurt local markets.
    We do think that if done right, it will hasten economic 
recovery, it will stimulate jobs in certain parts of our 
country, and it will help drive energy efficiency not only in 
federally-owned buildings but in the entire building stock.
    So, we at the Roundtable look forward to being a resource 
for you as this program moves forward.
    Thank you again for the opportunity today.
    [The prepared statement of Mr. DeBoer follows:]



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    Senator Whitehouse. Thank you, Mr. DeBoer, it is good to 
have you with us.
    I will yield my time to the Chairman. Chairman Boxer.
    Senator Boxer. Thank you so much. I am really interested in 
this LEED versus Green Globes. Globe or Globes?
    Mr. Hubbell. Globes.
    Senator Boxer. Globes. Because I asked Senator Inhofe, I 
was, when Senator Boozman was questioning about the wood, I was 
trying to find out from him about the issue and he, so I am 
going to ask the two of you to talk to me about this.
    The point made by Senator Inhofe is that in order to meet 
the LEED standard, you have to have a certain type of wood and 
that means that the wood, the building, in order to qualify, 
you have to import the wood from other places rather than use 
the wood we have in this country. Is that an accurate 
statement? Mr. Gatlin, and then followed by Mr. Hubbell.
    Mr. Gatlin. I think it is an inaccurate statement.
    Senator Boxer. Inaccurate.
    Mr. Gatlin. The standard relies on use of third party 
standards wherever possible and, in that case, the standard is 
for sustainable wood products and I do not__
    Senator Boxer. Explain what sustainable wood products means 
versus unsustainable.
    Mr. Gatlin. It is how they are harvested, it is the type of 
woods, it is the forest management practices.
    Senator Boxer. I see.
    Mr. Gatlin. We have a lot of sustainable forestry in this 
country.
    Senator Boxer. So, it is not the wood itself. It is not 
hard wood versus soft wood.
    Mr. Gatlin. It is not the type of wood. If I could just 
mention, this is a voluntary credit. It is pursued in maybe 40 
percent of projects. But you have to understand wood is not 
that significant a building material in commercial buildings. 
So, but we are not in any way linked to a standard that 
encourages use of wood from a particular location or 
destination.
    Senator Boxer. OK, and let me repeat this, and then I will 
ask Mr. Hubbell. Senator Boozman, I am very interested in your 
response.
    So, what you are saying is the fact is that there is no 
standard that you cannot use a certain type of wood.
    Mr. Gatlin. The third party standard, which we refer to in 
the LEED rating system, requires the use of sustainable 
practices in the growth and the production of the wood.
    Senator Boxer. But it is not the type of wood.
    Mr. Gatlin. It is not a type of wood, it is not a 
destination or a growing location of wood. We also have a 
credit that focuses on using regional materials. Those are 
materials that are grown or manufactured locally, and actually 
90 percent of our projects pursue that credit. So, that credit 
is equally or more significant than the sustainable wood 
credit.
    Senator Boxer. So, it offsets it?
    Mr. Gatlin. Well, it does not necessarily offset it. It is 
just that we try to encourage the use of locally grown and 
manufactured materials wherever we possibly can.
    Senator Boxer. Because of the shipping costs and all that?
    Mr. Gatlin. For our members, it was first and foremost 
because of the environmental benefits with using and growing 
local materials. But also there is economic benefits to stuff 
that is manufactured domestically.
    Senator Boxer. Sure, good. Now Mr. Hubbell, could you give 
me your answer to that?
    Mr. Hubbell. Sure. The difference between LEED and Green 
Globes on that particular issue is that LEED gives credit for 
forest certification under one forest certification system 
called FSC. Green Globes gives that same credit, but we 
recognize not just FSC but we recognize other major rating 
systems that are used in the United States.
    The question you asked, Senator, about wood not being 
eligible under LEED. The vast majority of domestic wood in this 
country to my knowledge does not participate in the FSC program 
so they would not get__
    Senator Boxer. FSC?
    Mr. Hubbell. Forest Stewardship Council, or whatever it is. 
The vast majority of domestically grown and produced wood does 
not participate in that program and so they are ineligible for 
those points.
    Senator Boxer. Why is that?
    Mr. Hubbell. That is a question for Mr. Gatlin.
    Senator Boxer. Mr. Gatlin, why is that?
    Mr. Gatlin. Well, I think you would have to have an 
industry representative of the forest and paper products 
industry. Many of the forest and paper products industry 
associations and their member companies, companies like 
Kimberly-Clark, are active members of the U.S. Green Building 
Council.
    I would like to mention that we have worked for about 4 
years on developing our own benchmarks for sustainable wood 
certification and that initiative was put to our membership, we 
are a member organization, our members did not vote to support 
the adoption of that new initiative. I believe that, frankly, 
has to do with the wood industry not reaching a consensus on 
sustainable certification.
    Senator Boxer. OK. I have one more question. Can I ask it?
    Senator Whitehouse. Yes.
    Senator Boxer. I just wanted to say welcome to HP and I am 
proud of the work you are doing here. I want to quote you and I 
want to make sure I am getting it right. You said the green way 
is the way to reduce costs. Is that what you said?
    Mr. Sindelar. Yes, that is correct.
    Senator Boxer. Well, good. Senator Boozman, the green way 
is the way to reduce costs, says HP.
    Mr. Sindelar. Thank you.
    Senator Boxer. I think that is really important because I 
certainly believe that. I always think we argue here over the 
word sustainability. We do not have to use that word. It makes 
sense. You cut costs. So, for me, I do not want to get into a 
battle over sustainability. If you can reduce costs and reach 
it in a good way, I am thrilled with it.
    So, I wanted, I was amazed to see, and tell me that this is 
true, that you saved $1 billion annually by consolidating your 
IT infrastructure. Is that correct?
    Mr. Sindelar. Thank you, Senator. It is correct. We reduced 
from 85 data centers that served our internal requirements down 
to six in three communities including Atlanta, Austin and 
Houston. We are saving $1 billion annually now, cost__
    Senator Boxer. That is incredible.
    Mr. Sindelar. Over a 4-year period.
    Senator Boxer. So, would you have any notion of what is 
possible for the Federal Government if we did data center 
consolidation on the scale that you did it, what we could save?
    Mr. Sindelar. I do not have that figure, but it would be 
very, very significant since the Administration's initiative is 
reduction of 800 data centers.
    Senator Boxer. Would you be willing, just for me as 
Chairman, and I will share it with any colleagues who want it, 
I know Senator Whitehouse would and I hope Senator Boozman 
would, would you send us a little bit of a letter just in 
simple, like a white paper, just a paper, on how you achieved 
this over how many years. It is amazing. You did not lose any 
of your functions?
    Mr. Sindelar. No. Our business actually grew.
    Senator Boxer. That is remarkable. I hold that up to the 
committee. It is such a wonderful statement by the private 
sector about what you could do. Thank you very much, Mr. 
Sindelar.
    Mr. Sindelar. Thank you. I will provide that. Thank you.
    Senator Whitehouse. Senator Boozman.
    Senator Boozman. Thank you, Mr. Chairman, and I agree, 
Senator Boxer, that one of my companies is Wal-Mart in Arkansas 
and they have done a tremendous job of putting so much of this 
in place and not only being environmentally friendly, but 
saving the consumers money, being able to pass those costs on, 
that these things actually do work.
    I would like to get back, though, to the wood, and I think 
it really is important. In Arkansas, zero percent of the 
certified forests are eligible for LEED certification. Seventy-
five percent of the certified forests in North America are not 
eligible for LEED's wood certification credit.
    Can you tell me why, Mr. Gatlin?
    Mr. Gatlin. I believe, as Mr. Hubbell mentioned, the owners 
of those firms are not participating in the FSC certification 
process. I do not believe it is necessarily that they are 
eligible or ineligible but that they opt not to participate. 
They may not like that system.
    Senator Boozman. Well, they are ineligible for your 
certification, based on your criteria.
    Mr. Gatlin. Yes, sir. Our criteria for that is that wood 
products, in order to earn that point, and it is a voluntary 
point out of 100 points, that they would be participating in 
the FSC certification. That is simply because we try to refer 
to other third party environmental standards wherever we 
possibly can, and not come up with our own.
    Senator Boozman. Do you have any relationship with the FSC 
folks?
    Mr. Gatlin. Not other than just communication. There is a 
dialog like there is with most other industry associations, but 
no relationship, no formal relationship.
    Senator Boozman. Why choose that as opposed to the 
certified forest designation? I mean, 75 percent are not able 
to qualify. Most of our producers in our States, which are 
Americans who pay taxes and stuff, they do not qualify.
    Mr. Gatlin. Well, again, as I mentioned in response to 
Senator Boxer's question, our organization, we are a membership 
organization, almost 17,000 member companies, we spent several 
years working on an alternative. It did not pass our 
membership. So, those things happen sometimes.
    The alternative was sort of our last fallback because we do 
not like to create our own benchmarks where there are existing 
ones in the market. We tried to look at a number of factors, 
management practices, clear-cutting practices, and so forth. 
There are a number of factors and I am not actually an expert 
on the forest industry. But we tried to look at a number of 
factors in creating that benchmark standard and it did not pass 
because a lot of the wood industry itself has not reached a 
consensus on those practices.
    Senator Boozman. I guess my problem is that then GSA is 
having, we as a Government are having to rely, I guess what you 
are saying is on your membership as to how they vote on these 
things, which to me is kind of crazy.
    Mr. Gatlin. I think, unfortunately, we are sort of looking 
to the forest and paper products industry to come to a better 
consensus than they currently have on sustainable 
certification.
    Senator Boozman. Can you comment, Mr. Hubbell?
    Mr. Hubbell. Yes, sir. One of the reasons that we founded 
the Green Building Initiative 6 years ago is because we thought 
we could do a better job of involving all of the relevant 
stakeholders in the maintenance and development of a green 
building standard.
    So, we licensed a consensus standard into the U.S. and then 
we immediately took it through a very rigorous process as 
dictated by the American National Standards Institute and 
essentially separated the organization from the content of the 
standard. We do not control the content of the standard.
    The committee that looked at this consisted of people from 
the wood industry, and from the concrete industry, and a lot of 
places like that, but it also included representatives from the 
American Institute of Architects and the USEPA and a lot of 
folks. So it was a very balanced, transparent process that 
resulted in the inclusion of four major forest certification 
systems, FSC being one and the other three, SFI and a couple of 
others.
    That was the collective wisdom of that committee over which 
we had no control. So that is how it has come to be the way it 
is with our system.
    Senator Boozman. So you agree that the 75 percent should or 
should not be included?
    Mr. Hubbell. I agree with the technical committee that 
recommended that four major North American forest certification 
systems should be recognized in our rating system.
    Senator Boozman. Yes, sir, I agree. Very good. I am glad 
you clarified that.
    I guess, what is the rationale that that is not the 
approach that you all take, Mr. Gatlin? I mean, that, to me, is 
common sense. You said that they had not come to a consensus, 
but again, I do not understand why.
    Mr. Gatlin. Well, in short, the way our process works is we 
have a technical committee similar, I think, to what was 
described and for energy, water, materials being one, and our 
materials technical committee years ago identified the FSC 
standard as the most objective, ideal standard for wood 
certification.
    As I mentioned, in trying to be more open or at least 
perceived to be more open, we tried to create our own sort of 
benchmark criteria which, as I mentioned, did not pass.
    But I think one of the points that is probably the most 
important, again, is 90 percent of our projects actually pursue 
materials credits that are focused on buying locally. That 
could include wood products and it could include many other 
types of products. So we see that as a real win and we are 
going to continue to work on the wood issue to the best that we 
can given that there is disagreement in the forest industry 
right now.
    Senator Boozman. Well, OK, thank you. Again, thank you, Mr. 
Chairman. I guess the only thing I would say is that you cannot 
buy locally in Arkansas because zero percent qualifies. That is 
true, again, in much of the States, much of our constituency. 
So we have a situation where the Federal Government is 
discriminating based on your membership and I think that is a 
real problem.
    Thank you.
    Senator Whitehouse. Thanks, Senator Boozman.
    If I could just followup for a point of clarification to 
the point that you are making, Mr. Gatlin? You referenced that 
there were two different benefits that one could get with 
respect to wood in LEED buildings. One had to do with having 
been produced under the approved sustainability standard. The 
other had to do with having been harvested locally.
    Are they independent of each other, or do you have to be 
within the sustainability standard in order to get, to take 
advantage of the local harvesting benefit?
    Mr. Gatlin. Two independent credits in the same general 
category of sustainable materials.
    Senator Whitehouse. So, somebody who was not within the FSC 
standard could, nevertheless, get a LEED credit for wood that 
was harvested locally, say in Arkansas? They could not get 
both, they could just get the one?
    Mr. Gatlin. Absolutely. In fact, my well-informed staff has 
indicated that we have about 50, there are about 50 LEED 
certified products in the State of Arkansas and about 86 
percent of those projects have used the regional credit, which 
includes regionally-grown wood.
    Senator Whitehouse. It does not fix the other problem but 
it is at least clarification on that.
    Now, let me ask you, everybody on the panel, I am going to 
ask you all the same question, and it is what can GSA do better 
to accelerate its, I mean it has very significant market power. 
What can it do to accelerate the investment here?
    I would like to start with Mr. Sindelar and if you have the 
chance to mention something about supply chain management, I 
know HP has been particularly good in supply chain management 
and in pushing your top tier suppliers to audit and manage 
their own energy use. GSA clearly operates at a scale similar 
to or greater than HP's and might have a similar capability.
    So, whatever you wish to say, of course, but if you could 
just touch on your supply chain management program as well.
    Mr. Sindelar. OK, well, let me take the supply chain first. 
We are actually the largest IT supply chain with other 700 
production suppliers and thousands of non-production suppliers. 
Our focus has been on a program called sustainability 
environmental, or Supplier Environmental Responsibility 
Program.
    So, we have made that a corporate policy from the beginning 
and, being a founding member of the EICC, which is the 
Electronic Industry Code of Conduct, we build that into our 
contract with suppliers and we focus on working directly with 
our suppliers and we have coverage of over 60 percent of them 
in terms of reviewing our work with them.
    But we work with them directly on, to the contractual 
arrangements, the self-assessment, then we go in and look at 
the accuracy of that self-assessment, conformity with the 
standards that are built into our contracts with them, and then 
we take corrective action with them in a collaborative way from 
an audit process, and I mean audit in the good sense of the 
word, and then we help build their capabilities.
    What we have found from 2004 through 2009 there is a 40 
percent drop in conformance problems and we continue to achieve 
positive results there.
    On things that I would like to see GSA do, from a 
leadership position they need, we had a saying in the Office of 
Governmentwide Policy, which was part of GSA and still is, of 
course, when I was the head of that, is make sure you align the 
incentives in your policymaking role or at least make everybody 
feel equally bad.
    So, one of the things that I would like to see GSA do is 
build this into their acquisition process to the extent that 
they can, in terms of encouraging energy efficiency and 
sustainability through their acquisition process, through their 
technical evaluation and source selection processes. I think 
that is very important, particularly if you want companies to 
invest in energy efficiency and sustainability and reward the 
ones that did.
    The other thing I would say is the Government needs, it 
does not have one throat to choke. Nobody knows their total 
energy spend in most organizations. It is not transparent. So, 
they need to look at the total energy spend and address it in 
ways that are metric based.
    Senator Whitehouse. My time has expired here and I have 
also been summoned to the last bit of a Judiciary Committee 
hearing I need to attend. So, I am going to depart and allow my 
distinguished Chairman to conclude the hearing.
    For those of you who did not get a chance to answer that, I 
would very much appreciate it if you would make that a question 
for the record and give me written recommendations on what GSA 
could be doing to improve its vigor in this area and the vigor 
of its suppliers in this area.
    I thank you all very much, and I thank very much, again, 
the Chairman for her courtesy.
    Senator Boxer [presiding]. Well, Mr. Chairman, thank you 
for chairing the hearing and good luck on your next mission.
    Mr. Bautista, your company is one of the first to work with 
the Federal Government to analyze its operations and to 
identify opportunities to reduce emissions. Clearly, this is 
important to us, I think all of us on the committee that want 
to see cost reductions.
    So far, what can you tell us? Do you feel that there are 
opportunities for cost savings? Do you feel that GSA is moving 
quickly enough? I really could not get from them too much of a 
sense of, I mean, it was broad, they did not have specifics for 
me. So, what is your sense of it?
    Mr. Bautista. We are one of 60 small businesses that are 
participating in a pilot program. For us, there are certainly 
opportunities to save costs as part of reducing our carbon 
footprint. At the same time, there is a significant investment 
for a company the size of ours to put an outlay such as that.
    As an example, I mentioned that we changed the lighting out 
in both of our plants to increase their energy efficiency. That 
was a significant capital outlay. As part of the new business 
we are launching, which is spray foam insulation, we decided to 
spray our own plants to reduce the carbon footprint as well as 
reduce energy consumption. That is also a significant 
investment.
    So, as part of this program, I do not think that GSA has 
really looked at what a small business has to do to participate 
in the program.
    Senator Boxer. Thank you. That is important going forward.
    Mr. DeBoer, when we were looking at carbon energy 
legislation, which I was sad to say we got out of this 
committee and then died a couple of times, a part of what was 
in that bill was an authorization of a program I thought would 
be helpful to the private real estate market, which was to set 
up a revolving fund that could be tapped at either no interest 
or low interest for the explicit purposes of old buildings, 
being able to get the capital to invest in energy saving 
projects.
    I remember when I went to New York City and met with a 
group of real estate, I am sure you have many from there. They 
were excited about this idea because even for them, and you 
point out what a huge group they are, some of these up front 
costs are very expensive. They have a payback, sometimes 2 
years, 5 years, the bigger ones take a little longer.
    But I guess I would like to ask you, would you be 
interested in that type of a program? You would have to pay it 
back but it would be a revolving fund and as we got the funding 
back, we would lend it out.
    It just seems to me the low-hanging fruit on all of this, 
for everyone, in other words, whether you care about 
importation of foreign oil, which none of us wants to depend 
on, so it is energy security, it is cost saving, it is lower 
the carbon footprint, it is save money, it is all these things, 
it is what I call a huge win all around.
    So what do you think about that type of idea?
    Mr. DeBoer. Senator, thank you, you raise a lot of 
excellent points that are irrefutable actually. I mean, we, 
clearly a significant way to address energy consumption and to 
reduce costs and to make businesses more productive is to make 
their buildings more energy efficient. We think you can get a 
very strong bang for the buck by focusing in that area, 
particularly on existing buildings, as you mentioned. We have 
statistics, and they range from 75 percent to as high as 90 
percent, of the building stock that is going to be standing in 
America in 2030 is standing today.
    Senator Boxer. How much? Say it again.
    Mr. DeBoer. Well, some people say 70 percent, some people 
say as much as 90 percent. But the point is that a significant 
number of the buildings that are currently built today will be 
standing in 2030. So, if we want to achieve great energy 
efficiency many years from now, the focus is not on new 
development.
    Senator Boxer. Yes.
    Mr. DeBoer. New development will naturally be energy 
efficient. We need incentives and we need financial programs to 
make the existing buildings retrofit in a correct way. One of 
the problems is financing for a large number of individuals, 
even prior to the current economic situation. So, your 
revolving fund concept was one that we supported and our New 
York folks that you mentioned found it to be a very attractive 
thing to do.
    We have suggested in our testimony another approach to this 
which might be to do a pilot program where you have a credit 
enhancement from the Department of Energy. Currently, there are 
financing programs out there for energy saving activities in 
nuclear and solar and some other things. Why not have a credit 
enhancement to get lower, more attractive financing if you are 
going to retrofit your building? We are not talking about a 
permanent program. We are talking about something that might 
jump start the private market in this area.
    Senator Boxer. That is interesting. What I like about it is 
it is an existing program so you just have to add eligibility.
    Mr. DeBoer. Correct. We think that current law allows DOE 
to go in this area.
    Senator Boxer. Really?
    Mr. DeBoer. We do. If they so chose. Perhaps a nudge from 
you would be very helpful there, Senator. But your points are 
absolutely well taken. It is very expensive to do this. We 
should focus on existing buildings, there are ways to do it, 
Energy Star, LEED, these other programs are all positive. But 
we need to be rewarding people to do things and to make their 
properties more energy efficient.
    Senator Boxer. Well, in California, you probably know, we 
have terrific, when you put together this Federal credit for 
solar roofs and what we do in California, it is terrific. I 
mean you spend, I do not know, $35,000, I am making this pretty 
accurate, to put a solar roof on a home that will pretty much 
cover all of its electric bills and you get back a very nice, 
reduce it by one third.
    Mr. DeBoer. May I?
    Senator Boxer. Yes.
    Mr. DeBoer. The other, obviously focusing on getting 
financing is a significant thing, but this tax incentive that 
you were very active in when it was originally put in place, it 
does have some deficiencies that could be corrected that no one 
saw at the time and the Administration has put forward some 
very good proposals on this so-called 179 deduction to make it 
work and that would be very powerful as well.
    Senator Boxer. Well, would you work with us? Because I am 
very interested, I mean, this is something that is really 
troubling me that it is such as obvious place. I mean, first of 
all, you get the capital, people are hired, small businesses, 
private sector people, terrific stimulus, and then the payback 
is so good, and then the businesses have more funding in their 
pocket to reinvest in another project, painting the building or 
hiring more custodians or whatever it is. I just think it is as 
jobs are the major consideration still for us, just this is an 
obvious one and reduces the carbon pollution.
    Mr. DeBoer. We would be happy to work with you.
    Senator Boxer. I would love it. So, first of all, I think 
we would like to write to DOE and raise this point. Then, these 
corrections, do you think they need to be made legislatively or 
could they be----
    Mr. DeBoer. In the tax deduction area?
    Senator Boxer. Yes.
    Mr. DeBoer. They would need a tax bill, yes.
    Senator Boxer. OK. All right. Well, let us take a look at 
what we can do and then I will look at also the program that I, 
there is a big move here to do an Infrastructure Bank and the 
Infrastructure Bank, it is a Kerry bill with Senator Hutchison, 
it is going to look at, I think the capitalization is $10 
billion. Is that right? Yes, $10 billion. Then they are going 
to allow it to be used for various things.
    I would like to talk to Kerry and Hutchison and see if they 
would put in these types, because it is all a revolving fund 
process where loans are made and then they are paid back to the 
Infrastructure Bank.
    But the beauty of it is the savings would be generated from 
day one and would be paid back in 5 years just with the 
savings. So, the payback to the Federal Government could be 
pretty quick. We could say, in the number of years it takes to 
actually get the savings.
    I just want to thank all of you. This is very important. It 
may not seem too exciting to the outside world when we are 
looking at how to save energy. But it is exciting to me. I know 
it is exciting to all of you. You have dedicated a lot of your 
time and efforts, and some of you your lives, to it.
    I would love to see you two get together a little because I 
do not like to see the competition. We rate it this way and we 
are better. I honestly feel if you could get together and maybe 
have a project where you work together, it would be very good. 
Because what happens is, I am for this standard and I am for 
that, and then we lose the momentum. We cannot afford to do 
that.
    I just thank you all very, very much. I am very proud of 
the work that you are all doing.
    We stand adjourned. Thank you.
    [Whereupon, at 12 p.m., the committees were adjourned.]
    [Additional statements submitted for the record follow:]
    


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