[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
MADE IN CHINA:
IS GSA COMPLYING WITH
PURCHASING RESTRICTIONS?
=======================================================================
HEARING
before the
SUBCOMMITTEE ON CYBERSECURITY, INFORMATION
TECHNOLOGY, AND GOVERNMENT INNOVATION
of the
COMMITTEE ON OVERSIGHT
AND ACCOUNTABILITY
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 29, 2024
__________
Serial No. 118-91
__________
Printed for the use of the Committee on Oversight and Accountability
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available on: govinfo.gov
oversight.house.gov or
docs.house.gov
------
U.S. GOVERNMENT PUBLISHING OFFICE
55-020 PDF WASHINGTON : 2024
COMMITTEE ON OVERSIGHT AND ACCOUNTABILITY
JAMES COMER, Kentucky, Chairman
Jim Jordan, Ohio Jamie Raskin, Maryland, Ranking
Mike Turner, Ohio Minority Member
Paul Gosar, Arizona Eleanor Holmes Norton, District of
Virginia Foxx, North Carolina Columbia
Glenn Grothman, Wisconsin Stephen F. Lynch, Massachusetts
Michael Cloud, Texas Gerald E. Connolly, Virginia
Gary Palmer, Alabama Raja Krishnamoorthi, Illinois
Clay Higgins, Louisiana Ro Khanna, California
Pete Sessions, Texas Kweisi Mfume, Maryland
Andy Biggs, Arizona Alexandria Ocasio-Cortez, New York
Nancy Mace, South Carolina Katie Porter, California
Jake LaTurner, Kansas Cori Bush, Missouri
Pat Fallon, Texas Shontel Brown, Ohio
Byron Donalds, Florida Melanie Stansbury, New Mexico
Scott Perry, Pennsylvania Robert Garcia, California
William Timmons, South Carolina Maxwell Frost, Florida
Tim Burchett, Tennessee Summer Lee, Pennsylvania
Marjorie Taylor Greene, Georgia Greg Casar, Texas
Lisa McClain, Michigan Jasmine Crockett, Texas
Lauren Boebert, Colorado Dan Goldman, New York
Russell Fry, South Carolina Jared Moskowitz, Florida
Anna Paulina Luna, Florida Rashida Tlaib, Michigan
Nick Langworthy, New York Ayanna Pressley, Massachusetts
Eric Burlison, Missouri
Mike Waltz, Florida
------
Mark Marin, Staff Director
Jessica Donlon, Deputy Staff Director and General Counsel
Peter Warren, Senior Advisor
Lauren Lombardo, Senior Policy Analyst
Raj Bharwani, Senior Professional Staff Member
Mallory Cogar, Deputy Director of Operations and Chief Clerk
Contact Number: 202-225-5074
Julie Tagen, Minority Staff Director
Contact Number: 202-225-5051
------
Subcommittee on Cybersecurity, Information Technology, and Government
Innovation
Nancy Mace, South Carolina, Chairwoman
William Timmons, South Carolina Gerald E. Connolly, Virginia
Tim Burchett, Tennessee Ranking Minority Member
Marjorie Taylor Greene, Georgia Ro Khanna, California
Anna Paulina Luna, Florida Stephen F. Lynch, Massachusetts
Nick Langworthy, New York Kweisi Mfume, Maryland
Eric Burlison, Missouri Jared Moskowitz, Florida
Vacancy Vacancy
Vacancy Vacancy
C O N T E N T S
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Page
Hearing held on February 29, 2024................................ 1
Witnesses
----------
Mr. David Shive, Chief Information Officer, U.S. General Services
Administration
Oral Statement................................................... 5
Mr. Robert C. Erickson, Jr., Deputy Inspector General, Office of
Inspector General, U.S. General Services Administration
Oral Statement................................................... 7
Written opening statements and statements for the witnesses are
available on the U.S. House of Representatives Document
Repository at: docs.house.gov.
Index of Documents
----------
* Questions for the Record: to Mr. Shive; submitted by Rep.
Raskin.
Documents are available at: docs.house.gov.
MADE IN CHINA:
IS GSA COMPLYING WITH
PURCHASING RESTRICTIONS?
----------
Thursday, February 29, 2024
U.S. House of Representatives
Committee on Oversight and Accountability
Subcommittee on Cybersecurity, Information Technology, and Government
Innovation
Washington, D.C.
The Subcommittee met, pursuant to notice, at 2:31 p.m., in
room 2154, Rayburn House Office Building, Hon. Nancy Mace
[Chairwoman of the Subcommittee] presiding.
Present: Representatives Mace and Connolly.
Ms. Mace. Good afternoon, everyone.
The Subcommittee on Cybersecurity, Information Technology,
and Government Innovation will now come to order.
We welcome everyone this afternoon.
Without objection, the Chair may declare a recess at any
time.
I will now recognize myself for the purpose of making an
opening statement.
Good afternoon, and welcome to this hearing of the
Subcommittee on Cybersecurity, Information Technology, and
Government Innovation.
The American people and those of us who serve on their
behalf here in Congress are angry that foreign adversaries,
such as China, are using cyber warfare to attack and weaken our
Nation.
Earlier this month, for instance, a Federal cybersecurity
advisory confirmed that PRC state-sponsored actors are pre-
positioning for possible disruptive cyber-attacks against the
U.S. critical infrastructure. These actors are hacking into
computer systems, then lying low and undetected for, in some
cases, years--a tactic termed ``living off the land''--so that
they can be activated to wreak havoc should a major conflict
with the U.S. arise.
The threat is real, but there are laws on the books
designed to create safeguards and guardrails. This includes
restrictions on what the Federal Government buys. Each year,
Uncle Sam purchases about $100 billion in IT products and
services alone. Numerous bans and prohibitions exist to both
further U.S. trade policy objectives and to ensure our national
security.
No agency has a more crucial role in ensuring these bans
and prohibitions are enforced than the General Services
Administration, or GSA. The GSA serves as the primary
government-wide purchasing agent. It manages tens of billions
of dollars in annual contract spending.
That brings us to the GSA Office of Inspector General
report that is the subject of today's hearing. Last month, the
OIG issued a report entitled ``GSA Purchased Chinese-
Manufactured Videoconference Cameras and Justified It Using
Misleading Market Research.'' The report raises issues that we
will explore today.
The IG found that GSA, via two separate purchases occurring
in March and October 2022, bought 150 videoconference cameras
made in the PRC, in violation of the Trade Agreements Act, or
the TAA. With limited exceptions, the TAA prohibits agencies
from buying products made in China or other non-TAA-compliant
nations, such as Russia and Iran.
Security vulnerabilities with these specific cameras were
documented by a private security company and the subject of a
CISA public alert.
The IG found that the cameras were bought by a GSA
contracting officer who relied on egregiously flawed
information provided by her own GSA colleagues. This was,
quote, ``inaccurate, incomplete, and misleading market
research'' indicating no other cameras were available for
purchase that could meet the agency's need.
According to the IG report, the GSA CIO, who is testifying
today, signed off on both camera purchases, though he later
acknowledged he did so without having reviewed the market
research performed by his staff.
Mr. Shive also signed off on the GSA management response to
the IG report. That response did not contest the factual
narrative laid out in the report or the IG's assertion that the
purchase of the cameras was a violation of TAA.
GSA, in fact, concurred with nearly all the IG's
recommendations, including that the GSA Administrator should
take appropriate action against GSA IT and GSA IDT personnel to
address the misleading information provided to the contracting
officer.
However, GSA has since provided arguments and documents to
our Committee staff that challenge key elements of the IG
report, including that the camera purchases violated the law.
So, we will hear their side of the story today, and I hope
we can learn why it was omitted from GSA's management response
to the IG report.
More broadly, I hope GSA can give us some assurance today
that it is going to fix the problems the IG identified and
ensure, going forward, that it is complying with laws that
promote safe purchasing.
With that, I will now yield to Ranking Member Connolly for
his opening statement.
Mr. Connolly. Thank you, Madam Chairwoman.
The General Services Administration has become a bit of a
frequent flier with this Committee, in the worst kind of way.
GSA has hardly covered itself in glory.
On issues ranging from the highly flawed decision on a new
FBI headquarters, to the Old Post Office lease agreement, to
ascertainment of the winner of the 2020 Presidential election,
to login.gov, to the FBI headquarters again, GSA has repeatedly
made misrepresentations to this Congress, sidestepped agency
policy and the Constitution itself, and disregarded both the
letter and spirit of the law.
In 2018, I requested that GSA's own Office of Inspector
General review GSA's revised plan for the Federal Bureau of
Investigation's headquarters consolidation. The GSA OIG's
review found that then-Administrator of GSA, Emily Murphy,
misled Congress while under oath when she attempted to conceal
her meetings with then-President Trump regarding the FBI
headquarters and the decision to move it to the suburbs rather
than stay in downtown Washington, DC.
Donald Trump is a self-interested businessman when it comes
to the location of the FBI--or was at that time. And a
President to the American people ought not to be involved in
contract negotiations or in deciding to pull the award of a
contract for a new headquarters for a major agency of the
Federal Government. He wanted to prevent the construction of a
rival hotel, potentially, on a now commercially developed FBI
site downtown.
GSA had already faced congressional inquiries as to how
Donald Trump won the rights to convert the Old Post Office into
the Trump International Hotel. The Trump Organization signed a
lease with GSA that said, quote, ``no elected official of the
government shall be admitted to any share or part of this lease
or to any benefit that may arise therefrom.''
In the words of GSA's OIG again, former President Trump's
continued interest in the hotel was a ``possible violation'' of
the Foreign Emoluments Clause of the Constitution. And in
putting on the question, GSA ignored the Constitution.
The Committee tried to perform further oversight, but GSA
rebuffed all requests.
As the Oversight Democrats found in their recent
investigation, Donald Trump then collected millions of dollars
from foreign governments at the Trump International Hotel under
a GSA lease while he was the President, in violation of the
Emoluments Clause of the U.S. Constitution.
In 2020, after President Biden won the Presidential
election, then-Administrator Murphy ignored the law and refused
to issue a letter of ascertainment for 16 full days.
When Administrator Murphy finally issued the letter, she
broke with precedent by refusing to call the clear victor
President-elect Biden. While the letter fulfilled her duty
technically, its content exposed her egregiously false belief
that President Biden did not win the election, further fueling
Donald Trump's harmful election lies and helping lay the
groundwork for the violent January 6th insurrection.
No less than a year ago, the GSA OIG found that GSA
officials misrepresented login.gov's compliance with Federal
digital identity standards. GSA then billed agencies more than
$10 million for services that failed to meet required security
and privacy standards.
While login.gov has since worked to remediate these issues,
GSA's noncompliance and its officials' misleading actions
eroded the trust between the agency, the Federal Government,
and the people we all serve.
This past fall, GSA announced its decision to select
Greenbelt, Maryland, as the site for the new FBI headquarters
amid an overwhelming amount of evidence indicating that GSA's
own site-selection process was fouled by political
interference.
GSA first changed the weighting of the original site-
selection criteria over FBI Director Wray's objections. And he
is the client here. Then, they changed the individual tasked
with confirming the final site selection from a career official
to a political appointee. Finally, that same political
appointee overturned the unanimous decision from a panel of
career officials and then promptly left the agency after the
damage she inflicted.
You do not have to just take my word for it. The FBI
Director, Christopher Wray, in an email to his colleagues,
wrote, quote, ``We have concerns about the fairness and
transparency in the process and GSA's failure to adhere to its
own site-selection plan,'' and stated that the FBI identified
concerns about a potential conflict of interest involving the
site-selection authority and whether changes that individual
made in the final stage of the process adhered to the site-
selection criteria.
And, of course, we know she did not, because she went in
and changed the weight, the final weight, unanimously provided
by that site-selection committee of professionals--two from
GSA, one from the FBI--in every category. And it just so
happened every category she changed was changed in the
direction of Maryland, at the expense of Virginia, despite the
professional findings of the site-selection panel.
Despite these controversies, I want to acknowledge the
leaders at GSA's Office of the Chief Information Officer for
their tireless work on IT modernization and procurement
efforts. The Office of the CIO has been engaged as a partner in
improving the digital experience of the Federal Government, and
we applaud that.
They deserve credit for managing the effectiveness of more
than $800 million in 51 different transformative IT investments
across 29 Federal agencies through the administration of the
Technology Modernization Fund.
GSA also spearheaded implementation of the FedRAMP
Authorization Act. The legislation, which I championed into
enactment last Congress, enforces a standardized approach to
security assessments and authorizations for cloud-computing
products and services to better safeguard sensitive data and
systems.
Unfortunately, the GSA's OIG's report that is the focus of
today's hearing provides yet another instance in which GSA did
not follow proper processes and policies. The GSA OIG report
made two concerning claims.
First, the report claims that GSA Office of Digital
Infrastructure Technologies employees misled a contracting
officer with quote, ``egregiously flawed information,''
unquote, that led to the purchase of 150 Chinese-made
videoconference cameras. GSA has the responsibility to explain
how this error happened and what changes have been implemented
to prevent that mistake from happening again.
Second, the report claims that GSA failed--I am almost
done--to address the camera's known security vulnerabilities.
Security concerns about Chinese-made products are not new. As
stewards of Federal IT procurement government-wide, GSA,
especially, must show preeminent expertise and diligence in
buying the right IT to ensure government works and is secured.
While GSA has made the case, they have not violated any
laws, the American people deserve to know why they piloted
products that would not have complied with the Trade Agreements
Act, if they were bought at the amount necessary to serve the
full organization; why GSA believed dividing the acquisition
into multiple purchases would fall below the TAA threshold; and
why IDT said there were no TAA-compliant options when the GSA
OIG found compliant options in abundance.
Today, GSA must once again begin the work to regain the
trust of the American people and of this Committee. I look
forward to hearing from GSA today about how it will address the
problems enumerated in the Inspector General report.
And I yield back.
Ms. Mace. Thank you, Mr. Connolly.
I am pleased to introduce our witnesses for today's
hearing. Our first witness is Mr. David Shive, Chief
Information Officer at U.S. General Services Administration, or
GSA. Our second witness is Mr. Robert Erickson, Acting
Inspector General at GSA's Office of Inspector General.
Welcome, and we are pleased to have both of you this
afternoon.
Pursuant to Committee Rule 9(g), the witnesses will please
stand and raise your right hands.
Do you solemnly swear or affirm that the testimony that you
are about to give is the truth, the whole truth, and nothing
but the truth, so help you God?
Let the record show that the witnesses answered in the
affirmative.
We appreciate both of you being here today and look forward
to your testimony.
Let me remind the witnesses that we have read your written
statements, and they will appear in full in the hearing record.
Please limit your oral arguments to 5 minutes.
As a reminder, please press the button on the microphone in
front of you so that it is on, and the Members can hear you.
When you begin to speak, the light in front of you will
turn green. After 4 minutes, the light will turn yellow. When
the red light comes on, your 5 minutes has expired, and we
would ask that you please wrap it up.
So, I recognize Mr. Shive to please begin his opening
statement.
STATEMENT OF DAVID SHIVE
CHIEF INFORMATION OFFICER
U.S. GENERAL SERVICES ADMINISTRATION
Mr. Shive. Great. Thanks for the opportunity to testify
today.
Good afternoon, Chair Mace, Ranking Member Connolly, and
the Members of the Subcommittee. My name is David Shive, and I
am the Chief Information Officer at the U.S. General Services
Administration. I appreciate the opportunity to appear before
you today.
GSA relies on a connected workforce operating across the
country to meet our mission. Videoconferencing equipment allows
for seamless interaction, productive collaboration, and
enhanced user experiences.
In February 2022, in light of increasing office presence,
employees provided feedback that indicated new requirements for
videoconferencing, and, thus, new equipment was needed. The
existing solution was obsolete, and employees suggested that a
portable camera with a 360-degree view capability would address
the shortcoming of the legacy solutions.
A joint pilot program between the Office of GSA IT and
other offices sought to evaluate products that would improve
collaboration and the user experience with modern
telecommunications and videoconferencing infrastructure. The
team engaged in discussions with technology vendors to better
understand their offerings, and GSA IT conducted market
research to identify portable and cost-effective solutions.
GSA's decision to pilot equipment from Owl Labs was based
in part on its unique capability of a 360-degree view and
portability. It also required no installation, was compact and
easy to relocate and store, and was one of the least expensive
among the options.
GSA accepts that we could have done a better job
documenting our requirements, including the need for a camera
with a 360-degree view of field that allows participants to
easily track who is speaking. However, I am unaware of any
evidence suggesting that GSA IT personnel sought to
intentionally mislead acquisition officials.
As a result of this audit, GSA has put in place new
processes and improved documentation requirements. The team has
strengthened our alternatives of analysis documentation that
allows for possible solutions to be adequately analyzed and
locked down once the analysis is completed.
GSA IT has also partnered with acquisition experts that
focus primarily on market research to bolster any future
efforts. Procurement training courses with respect to Buy
America Act and Trade Agreement Act are now required for IT
personnel regularly involved in procurement actions. GSA fully
supports the purchase and use of American-made products
wherever possible and is committed to complying with all
acquisition statutes, including the BAA and the TAA.
GSA was in full compliance with the BAA for both the first
and second procurement of Owl cameras. The TAA did not apply to
either of these acquisitions because neither equaled or
exceeded the threshold of $183,000. The value of an acquisition
is a determining factor in the applicability of any of our
trade agreements. The applicability of BAA versus TAA is
mutually exclusive, and the determination by the contracting
officer of which statute to apply in any acquisition is
dictated by the dollar value. It is not aggregated across
multiple acquisitions. GSA's requirements did not reach the
threshold to invoke TAA.
Foreign acquisition rules are complicated. In 2018, GSA
raised BAA approval levels to the head of the contracting
activity and is updating TAA policy to match. This will help
ensure that GSA continues to correctly apply both laws.
Most importantly, GSA's deployment of Owl cameras in its
work environment was done in a manner that was secure, and that
remains true today. In line with our security protocols, GSA
voluntarily removed older Owls from use that the vendor
indicated would no longer be supported. For the remaining Owl
devices, our security assessment determined that the
cybersecurity risks were low. GSA chose to intentionally
configure them for use in a more limited manner in order to
further reduce any potential vulnerabilities.
While these choices made the devices inherently more
secure, it did create other challenges. GSA has since
strengthened how we manage the devices and software-updating
protocols so that, going forward, we can effectively locate and
ensure timely updates of the devices that might be needed.
Specifically, we have developed an Owl device user
agreement that improves the responsibility and accountability
related to timely patching of software. In addition, we have
formalized the standard operating procedures for the management
of the devices with processes and actions in place if policies
are not adhered to.
The current inventory of Owls are all fully patched with
respect to security updates.
GSA is committed to delivering the best value in government
services while ensuring the security of our technology
environment, as well as prudently utilizing taxpayer money. GSA
appreciates the IG's recommendations to improve our internal
processes, which helped to improve our security posture and IT
purchases.
We are confident that we have complied with all procurement
rules, have maintained robust mitigations to reduce security
risks, and at no time intentionally misled acquisition
officials.
We believe that the actions taken so far as a result of our
internal reviews, along with implementing the recommendations
made by our IG partners, will strengthen our processes.
Thank you.
Ms. Mace. OK.
I will now recognize Mr. Erickson to please begin your
opening statement.
STATEMENT OF ROBERT C. ERICKSON, JR.
DEPUTY INSPECTOR GENERAL
U.S. GENERAL SERVICES ADMINISTRATION
Mr. Erickson. Thank you. Chairwoman Mace, Ranking Member
Connolly, and Members of the Subcommittee, good afternoon.
I am here today to answer your questions regarding our
January 2024 audit report that found that GSA purchased
Chinese-made videoconference cameras and justified it with
misleading information.
As you have already noted, the Trade Agreements Act
requires Federal agencies to buy only goods that are made in
America or a TAA-designated country with limited exceptions.
China is not on that list. Agencies are allowed to buy TAA
noncompliant products if no TAA-compliant product on the market
meets the needs of the government.
In 2022, our office was contacted by a senior GSA employee
who was concerned that GSA's purchase and use of Chinese-made
videoconference cameras violated the TAA. In response, we
initiated an audit and found that employees in GSA IT misled a
GSA contracting officer to justify purchasing 150 Chinese-made
cameras.
Before completing the purchases, the contracting officer
requested information from GSA IT to justify the request for
the TAA-noncompliant cameras. As part of the request, the
contracting officer asked whether there were any TAA-compliant
alternatives and why GSA IT needed a specific Chinese-made
camera. In response, GSA IT provided misleading market research
in support of the TAA-noncompliant cameras. They failed to
disclose that comparable TAA-compliant alternatives were
available.
Additionally, we found that these cameras had known
security risks that need to be addressed with a software
update. As of mid-September 2023, there were dozens of these
cameras that had not been undated to address the security
problems.
In our report, we made several recommendations to the GSA
Administrator for corrective actions. Agency leadership agreed
in writing to all of our recommendations, except our
recommendation that GSA return or otherwise dispose of the
Chinese-made cameras.
Despite the fact that GSA employees we interviewed during
our audit agreed that TAA applied, and GSA concurred with all
but one of our recommendations, GSA now asserts that TAA does
not apply. Legally, this assertion fails for three reasons.
First, the Federal Acquisition Regulation states, in
determining whether the TAA threshold has been met, the
contracting officer should use the total estimated value of the
projected recurring awards for the same type of product and not
divide an acquisition with the intent of reducing the estimated
value below the TAA threshold.
Second, GSA's own policy for a similar acquisition vehicle
states that, for the purpose of determining the applicability
of the TAA, the total value of the acquisition is the estimated
dollar amount of the entire contract.
Third, a D.C. Federal court noted that the Federal
Acquisition Regulation, quote, ``suggests the value of the
acquisition refers to the overall annual value of the contract
and not the value of each transaction under that contract,''
end quote.
In addition, GSA's argument does not pass the common-sense
test. These purchases were made as part of a pilot to purchase
additional cameras for the entire agency. If you accept GSA's
assertion, they could purchase 170 of these Chinese-made
cameras per day for a year, spending $44 million, and still not
cross the TAA threshold.
Today's hearing can be boiled down to two simple facts.
First, the GSA contracting officer stated that she would not
have purchased these cameras if she had been provided with
complete and accurate information. Second, as noted previously,
you cannot split the purchases to avoid the limits of the TAA.
This concludes my brief summary of our audit regarding the
GSA's purchase of Chinese-made cameras, and I am happy to
answer any questions you may have.
Ms. Mace. All right. Thank you so much.
I will now recognize myself for 5 minutes.
My first few questions will go to you, Mr. Shive. You are
the subject of an IG audit report. You are also one of the GSA
officials who signed the Agency's written response to that
report.
Your testimony states that the cameras purchased did not
violate the TAA. So, why does the GSA formal written response
to the IG report not reflect that?
Mr. Shive. Yes, thank you for the question. I appreciate
it, and I appreciate the opportunity to add some clarity there.
When we signed the written response, we were agreeing to
the recommendations. We were signing and saying that we agreed
to the recommendations that the IG put forward. We were not
saying that we agreed with everything that the IG said.
Ms. Mace. OK.
You signed concurrence memos for the videoconference camera
purchases. You told the IG you do not usually get so involved
in purchases but here you did, and you signed off without
reviewing the market research your staff prepared.
Why did you treat these purchases differently?
Mr. Shive. Because the document showed up on my desk, I was
obligated to take a look at it and read it and understand it.
Ms. Mace. Do documents not normally show up on your desk
or----
Mr. Shive. They do all the time.
Ms. Mace. OK.
Mr. Shive. They do all the time.
And this one, it was something that I had not seen before,
so I asked questions of why was----
Ms. Mace. You mean the cameras, or the documents, or the
type of contract purchase?
Mr. Shive. The document asking for me to sign off.
Ms. Mace. OK. You had not seen a document like that before?
What does----
Mr. Shive. No.
Ms. Mace [continuing]. That mean? What do you mean by that?
Mr. Shive. Correct. That is the first time I had seen a
document like that. And so, it was a determination of--I forget
what the right word is--nonavailability and not a waiver.
And so, when I looked at that, I said, what are we--what is
not available? And they said, there is no TAA-compliant
infrastructure out there that are suitable for purchase that
meet the requirements of the agency. And I said, OK, I
understand that, and I signed.
Ms. Mace. So, what about the requirements that there was
nothing out--no other alternatives? Is it the 360 thing?
Mr. Shive. So that is part of it, the 360-degree view. And
the other is the ultra-portability of the device.
Ms. Mace. Do you see 360-degree view as a requirement?
Mr. Shive. Absolutely, yes.
Ms. Mace. Why would that be?
Mr. Shive. So, we were coming out of the pandemic and
starting to work in a hybrid work environment----
Ms. Mace. But you did not buy these until February 2022.
So, we were coming out of the pandemic. More people should be
at work than at home. Was that not the case at your agency?
Mr. Shive. We were coming out of the pandemic then at the
Agency.
Ms. Mace. So, at the end of the pandemic, when people were
coming back to work, you decided you needed 360-degree cameras?
Mr. Shive. No, we decided that that would be a good thing
beforehand, and then we did the work to develop a pilot,
because----
Ms. Mace. So is this----
Mr. Shive [continuing]. We perform our purchases based on
actual information.
Ms. Mace. So, this was a pilot for a potentially bigger
purchase?
Mr. Shive. Potentially, yes.
Ms. Mace. OK.
So, why would you put your own signature on a memo
supported by materials you did not review, not even enough to
spot egregious errors relied upon to justify buying cameras
made in China? If you were not familiar with the documents, why
would you sign them?
Mr. Shive. Well, I was familiar with it.
Ms. Mace. OK.
You agreed with the IG that appropriate disciplinary action
should be taken in response to the findings of the IG report.
Who will action be taken against, and what kind of disciplinary
action will be taken?
Mr. Shive. Yes, it has already been taken.
So, what we did is, we did a fulsome analysis of both the
market research and interviewed the people involved----
Ms. Mace. Uh-huh.
Mr. Shive [continuing]. And determined that nobody
intentionally misled the contracting officer; and said, OK,
this is a training opportunity. So, we have trained not only
this person but corresponding staff in two ways.
One, we have given them training on BAA and TAA compliance.
And the other is, we have trained them on what proper market
research would look like, specifically documentation, so that
the documentation could be----
Ms. Mace. Was the 360-degree requirement, as you call it,
in the documentation----
Mr. Shive. That----
Ms. Mace [continuing]. Requirements or contract? It was
not?
Mr. Shive. That was one of the places where we agreed with
the IG; it did not show up. It showed up in any number of
places, including email exchanges with people----
Ms. Mace. Why were these cameras bought? Was it because
they were cool? Like, why--I mean, why do you need a 360-degree
camera? Are you the only agency in the Federal Government that
bought these cameras from China?
Mr. Shive. I do not know what other----
Ms. Mace. But why did you need a 360-degree--OK. It is the
end of the pandemic; people are coming back to work. I would
think you would need fewer cameras than more. But why the 360?
Mr. Shive. So, the way that most conference rooms are laid
out, there is a table with a ring of people sitting----
Ms. Mace. I am familiar.
Mr. Shive [continuing]. Around it. People who are offsite,
if there is a camera that only----
Ms. Mace. How many people are offsite at your agency?
Mr. Shive. I do not have that number, but I am happy to get
that for you.
Ms. Mace. You do not know how many people work from home?
Mr. Shive. I know percentages, and----
Ms. Mace. OK.
Mr. Shive. [continuing] It is different----
Ms. Mace. What is the percentage of people that work from
home at your agency?
Mr. Shive. It is different every day. I do not have the
exact number.
Ms. Mace. On average?
Mr. Shive. On average, 30, 40 percent of people are onsite
every day.
Ms. Mace. OK. OK. So, based on data that we have seen, your
agency seems to be an outlier, even for Federal agencies, in
terms of employees that are working from home.
Mr. Shive. Right.
Ms. Mace. GAO found that the GSA's D.C. headquarters
building was only about 10-percent occupied on a typical
workday a year ago.
So, has that number changed?
Mr. Shive. Well, so headquarters is not representative of
the entire GSA enterprise. Think of field offices and remote
sites.
Ms. Mace. Uh-huh.
Mr. Shive. Property managers are----
Ms. Mace. So, there are more people elsewhere; thus, the
D.C. is an outlier.
Mr. Shive. I am sorry, I did not hear----
Ms. Mace. The D.C. headquarters is an outlier compared to
the rest of the agency offices.
Mr. Shive. It could be, but I am not that aware of those
numbers.
Ms. Mace. OK. What percent--OK, so you have got that. All
right.
So, my next questions will be for Mr. Erickson.
And then I will give you extra time if you would like it.
Mr. Connolly. Yes, no problem. Uh-huh.
Ms. Mace. Your office issued an audit saying GSA broke the
law when it bought these cameras made in China.
If GSA feels that an IG report falsely accuses them of
breaking the law, shouldn't GSA say so in their formal response
in the report--to the report?
Mr. Erickson. Thank you for the question.
That is exactly right. They had many opportunities to read
the report. They have a discussion draft which they get, and
they--we discuss it with them and have meetings with them. They
have the draft report and then the final report.
And they simply did not say anything in their written
response to our audit report.
Ms. Mace. Why would that be, you think?
Mr. Erickson. I do not know the answer to that, ma'am. You
would just have to ask the GSA.
Ms. Mace. According to your report, GSA staff provided
misleading data to their own colleague, information that was
used to justify buying the PRC China-made cameras.
Was this done intentionally or gross incompetence, in your
opinion?
Mr. Erickson. We did not find any evidence of intent.
Ms. Mace. OK. Just complete incompetence. All right.
Could staff who Mr. Shive relied upon so much that he
signed off on their work without checking it out--I guess they
would be grossly incompetent here, from your response.
Can agencies get around the TAA ban of products made in
China simply by breaking big purchases up into a series of
smaller purchases throughout the year?
Mr. Erickson. No, ma'am. That would completely eviscerate
the rule, and they cannot do it that way.
Our position is--and this was going to be a bigger
purchase. It was going to be scaled up to purchase a lot of
Chinese video cameras.
Ms. Mace. Do you see a need to have 360-degree cameras? Is
that like a--I have never seen that need before at a Federal
agency. Do you think that there is a need for that, a
requirement for that?
Mr. Erickson. I will say, it was not a requirement of the
procurement. There were 13 requirements for the procurement,
and that--the 360-degree camera angle was not one of the
requirements.
Ms. Mace. Have you found flaws in GSA's procedure for
enforcing procurement bans with respect to the Multiple Awards
Schedule?
Mr. Erickson. We have. We have written a report about that,
and it is currently--they are working on the corrective action
plan for that.
Ms. Mace. All right.
I will now yield to Mr. Connolly.
Mr. Connolly. Thank you, Madam Chairwoman.
By the way, Mr. Shive, in answer to the Chairwoman's
question about what percentage of the workforce is at
headquarters every day, does that include Administrator
Carnahan? Is she at the headquarters every day?
Mr. Shive. Not that I am aware of.
Mr. Connolly. In fact, does she not spend a fair amount of
time back in Missouri?
Mr. Shive. I do not really track her movements, personally.
We can give you what----
Mr. Connolly. Well, yes, I think the Committee would be
very interested in her location attendance. Because one would
assume that the Administrator would want to be hands-on,
especially given all of the controversial issues GSA deals with
and its record.
Mr. Erickson, I read your report. You used the word in your
testimony ``misleading'' or ``misled'' multiple times.
You just heard Mr. Shive testify, ``we did not mislead at
all.'' Comment.
And if you could bring that mic closer to you, so we can
hear you. Thank you.
Mr. Erickson. Mr. Connolly, we got that evidence from the
contracting officer. She said that she--and two of our auditors
were present when she said it--were egregiously misled. We
followed up----
Mr. Connolly. ``Egregiously misled.''
Mr. Erickson. Yes. And we followed up and asked her after
the report came out, and she confirmed that that was the intent
of her words.
Mr. Connolly. Right.
So, Mr. Shive, your own employees are testifying before the
IG that--the word ``egregious,'' not just misled, egregiously
misled. Do you wish to modify your testimony that there was no
misleading?
Mr. Shive. No, but I would like to clarify. The comments
were ``egregiously flawed'' and ``intentionally misled.'' Those
are two separate things that are being conflated here. So----
Mr. Connolly. Mr. Erickson has just testified that what she
said to his auditors was ``egregiously misled,'' not
``egregiously flawed.''
Is that correct, Mr. Erickson?
While you are looking that up, Mr. Erickson said that he
was told by GSA employees that Meeting Owl, the Chinese camera,
was the, quote, ``only product that would fit their needs,''
unquote.
In retrospect, that was not a true statement, was it, Mr.
Shive?
Mr. Shive. Well, according to the requirements that were
commonly discussed by the entire procurement and technology
teams, we still have not been able to find another camera that
is highly portable, has a 360-degree view, and also contains
the other 13 requirements that were detailed.
Mr. Connolly. Mr. Erickson, did your auditors find there
were alternatives available to the Chinese Meeting Owl camera?
Mr. Erickson. Yes, they did. They did market research----
Mr. Connolly. So, again, we have got contradiction here,
Mr. Shive, from the auditor, from the IG, saying, that is not
true, that is just not true.
And when we say that it is more a matter of incompetence
than, say, deliberate intent, I guess I would gently suggest
that it was easier to just deal with a product that was cheaper
and available and decide there were no competing alternatives
and not have to look into it and do the work to actually
examine the merits of the competing products.
I think that is a more likely explanation of what happened
than just sheer incompetence. And all the re-training about how
to do it is great, but it does not get at the fact that I just
made a unilateral decision and explained it that way because it
is a lot easier.
And now I want to get into Chinese.
So, Mr. Erickson, you know, here is the United States
saying, ``Do not use Huawei.'' We not only have tried to ban it
here, we have gone to Europe and told our partners, ``Get off
Huawei. Get out of it.''
We have developed an alternative to the Chinese 5G because
we are worried about security. And we have done that with our
allies and here at home.
There are states that have even tried to ban TikTok because
of its Chinese connections and compromise of privacy and
security.
So, what could go wrong with having the lead agency of the
Federal Government that sets standards for everyone else
deciding to buy a Chinese product--a camera, no less--and, by
the way, misleading what alternatives were available, and
deliberately--deliberately--parceling this out so that they
would technically, from their point of view, not be subject to
the legal requirements otherwise, in terms of the dollar
threshold, that would have prevented this?
What could go wrong with a Chinese product like Meeting
Owl? What should I worry about? What is wrong with a Chinese
product?
Mr. Erickson. We were worried----
Mr. Connolly. Apparently, GSA did not think there was
anything wrong with it.
Mr. Erickson. We were worried about Chinese surveillance
and it--you know, the firewall being breached and information
that is not supposed to leave the government, you know, leaving
the government, getting out.
Mr. Connolly. And did you find any similar concern
expressed at GSA when you brought to their attention this
procurement and the concerns about it?
Mr. Erickson. We did not really address that, but they--we
did address the security concerns and the software updates that
needed to happen, and they took that suggestion rather
positively.
Mr. Connolly. I know it is maybe a little bit beyond your
field, but isn't there a concern here that the standards-
setting agency of the Federal Government, GSA, which tells us
all kinds of products we can buy and cannot buy and, you know,
sets standards for all Federal agencies except DOD, is
essentially saying here, ``Nothing wrong with this Chinese
product; have at it. Everyone else should buy them too''? Isn't
that the risk of the message, whether it is witting or
unwitting, with this procurement?
Mr. Erickson. That is the risk, sir.
Mr. Connolly. And doesn't that fly in the face of not only
congressional intent but the policies of the Administration and
this government?
Mr. Erickson. It does. And we believe it violates the Trade
Agreements Act as well.
Mr. Connolly. So, it is actually a violation of law.
Mr. Erickson. Yes, sir.
Mr. Connolly. Mr. Shive, you have heard people were
deliberately misled; it is a violation of law; there are
security concerns. You--GSA circumvented the threshold
requirements by parceling this out so that--which, according to
Mr. Erickson, even that does not work, because it is a
cumulative number. So, that was wrong to begin with, but you
tried it--not you personally.
This sounds like a major, major problem in terms of, not
only a procurement, but the whole tainted process that went on
at GSA, which seems to be to circumvent the law and to mislead
others for convenience.
Your comment?
Mr. Shive. So, GSA--we maintain that we did not break the
law, that we did not procure these devices with the intent to
break up procurements. If you take a look at the total purchase
price of the procurements now, they do not even--they still do
not meet the TAA compliance threshold.
Regarding the cybersecurity----
Mr. Connolly. But that is only because it was a pilot
program. As Mr. Erickson has testified, your intent was to buy
a lot more of these after you piloted it.
Mr. Shive. Absolutely not. And we told the IG that we had
no intention to buy additional Owl cameras. We told them in
writing that we had no additional intent.
Mr. Connolly. Mr. Erickson, real quickly?
Mr. Erickson. I believe the evidence showed that we were
told that this was part of a pilot project, and they were going
to scale up and----
Mr. Connolly. Exactly.
Mr. Erickson [continuing]. Buy more video cameras for the
agency.
Mr. Connolly. Yep.
Mr. Shive. And that is exactly right, that it is part of a
pilot designed to inform larger purchases. When you move to the
larger purchase phase, there is no indication, there is no
predisposition that you are going to buy the same
infrastructure. You buy pilot infrastructure----
Mr. Connolly. Mr. Shive, I am sorry, that does not even
pass the [inaudible] test. You have already got GSA employees
saying there was no other product. So, that would argue, no,
once we have the pilot, we are going to scale up with this
product.
There seemed to be no sensitivity or care that it was
Chinese and that there was security concerns inherent in a
Chinese camera because we have experience with other Chinese
technologies that ought to--red lights ought to go on.
And it was in violation, frankly, of U.S. Government
policy. And that is strange given the fact, you know, you are
the General Services Administration, charged with this very
mission on behalf of the Federal Government.
It is a very troubling episode.
And I just want to say, Madam Chairwoman, I once again
appreciate the independent work and independent judgment
brought to this subject by the IG.
Because we rely on you for that analysis and that
objectivity. We look forward to other studies undertaken by
your office, but we really appreciate what you have uncovered
here. And I know that we are going to continue to pursue this.
I thank the Chair.
Ms. Mace. Thank you.
And I want to thank our witnesses for being here today.
In closing, I want to thank our panelists for their
testimony. I want to thank the IG for being here today.
And it is just--it is just so confusing, Mr. Shive, in your
testimony, to say, this was the only camera that met our
requirements, this was a pilot program that met our
requirements, and yet you are not going to buy more of these
cameras, but if you do, it will be a different camera, even
though there is no other camera on the market that fits your
requirements. Like, the math does not work for me.
And that level of, sort of, incompetence is why people in
this country do not have a lot of faith in our agencies, when
they come here and say things that do not--that just do not
make sense and they do not add up.
And I do want to leave you with this, Mr. Shive. China is
not our friend. There have been many instances, dozens and
dozens of instances, where Communist-China-aligned bad actors
have tried to hack our software, our systems, our agencies,
over and over and over again. We have had--we know that there
have been spy balloons over our country and other countries
around the world. We know they have tried to hack our systems.
I mean, I just--to think that buying Chinese equipment that
could be used to spy on us and our government is a good idea is
a terrible idea. And I hope that you never do it again. And I
hope you get rid of what you have and give it to somebody else,
maybe give it to Russia, because I do not want that stuff in
our Federal Government or in our agencies.
So, the last thing I want to say to you, Mr. Shive, is, in
closing, I am going to request that you get back to the
Committee on an actual answer with a real percentage and
numbers of GSA employees who work remotely and your teleworking
rates. Because my understanding is, it is far and significantly
higher than just about any other agency. And even still with
that number, it does not warrant Chinese cameras that could spy
on the U.S. Government.
I would like to yield to you if you have any final remarks,
Mr. Connolly.
Mr. Connolly. No, thank you.
Ms. Mace. With that, without objection, all Members will
have 5 legislative days within which to submit materials and to
submit additional written questions for the witnesses, which
will be forwarded to the witnesses for their response.
Ms. Mace. And if there is no further business, without
objection, the Subcommittee stands adjourned.
[Whereupon, at 3:15 p.m., the Subcommittee was adjourned.]
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