[Congressional Record Volume 144, Number 105 (Thursday, July 30, 1998)]
[Senate]
[Pages S9482-S9483]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            PATENT AND TRADEMARK OFFICE'S LEASE PROCUREMENT

 Mr. WARNER. Mr. President, I rise today to set the record 
straight about the Patent and Trademark Office's lease procurement for 
a new or remodeled facility. There is a continuing misinformation 
campaign being waged to delay the Patent and Trademark Office's lease 
procurement or put it back to square one.
  Allegations are being made that, to the taxpayer's detriment, the new 
facility is vastly overpriced and that a new federal construction 
option has not been considered.
  The fact is that the procurement has been conducted by the book and 
has undergone several, impartial reviews, all of which conclude that 
the project is on the right track, competitively sound and should 
continue.
  Mr. President, we all know that funding is not available to support 
the federal construction of a new headquarters for PTO because of the 
limitations of the Balanced Budget Act. We also know that the new 
lease, authorized by the Senate Environment and Public Works Committee 
in Fall of 1995, will result in cost savings of $72 million over the 
life of the lease. That cost savings will accrue in spite of moving 
costs, an upgraded work environment, new furniture and other 
improvements designed to enable the PTO to more effectively do its job.
  The PTO is fully fee funded and does not receive any taxpayer 
support. All lease and moving costs will be borne by PTO's customers in 
the normal course of business.
  The Subcommittee on Transportation and Infrastructure intends to have 
a hearing on this matter in September. In the meantime, I am submitting 
a number of points regarding the procurement, in addition to a letter 
sent to me by Bruce A. Lehman, Assistant Secretary of Commerce and 
Commissioner of Patents and Trademarks.
  I urge you to take time to hear the real story of the PTO project. 
The clear facts are that failure to take action to consolidate PTO 
space will result in wasteful use of funds and prevents PTO from 
modernizing services for its customers.
  The material follows:


        the facts on the patent and trademark office procurement

       No taxpayer funds are being spent on the project. PTO is 
     fully user fee funded.
       PTO's largest user groups support the project. The American 
     Intellectual Property Law Association, the Intellectual 
     Property Owner's Association and the Intellectual Property 
     Section of the ABA have all expressed strong support in 
     numerous Congressional letters for continuation of the 
     ongoing procurement.
       Federal construction is not a viable option. The 
     Administration and PTO's Appropriations Committees agree that 
     a competitive lease is the only viable option since neither 
     user fees nor taxpayer funding are available to construct or 
     purchase a facility for PTO.
       Consolidated project will save the PTO at least $72 
     million. Whether the project proceeds or the PTO remains at 
     its current leased, unconsolidated locations, the PTO will 
     spend approximately $1.3 billion in lease costs over the next 
     20 years to house the agency. Delaying consolidation will 
     prevent PTO from passing this $72 million in savings on to 
     its fee-paying customers.
       Senate Bill already caps build-out costs. The Senate 
     Appropriations Bill (S. 2260), as passed, would cap interior 
     office build-out at $36.69 per square foot, the Government-
     wide standard rate. Moreover, these costs are included in the 
     new rent amount.
       PTO's projected moving costs are reasonable. All moving 
     costs were taken into account in computing the $72 million in 
     savings. PTO's projected costs are comparable to those spent 
     by other recently consolidated agencies.
       PTO will not purchase $250 shower curtains, etc. Estimates 
     for $250 shower curtains for the fitness facility, $750 cribs 
     for the child care center, $309 ash cans for smoking rooms, 
     and $1,000 coat racks for training facilities were 
     intentionally ``worst case'' estimates used for the purpose 
     of calculating the cost savings that would result from 
     consolidation. Standardization, mass buys and competitive 
     furniture purchases will generate lower actual costs. PTO has 
     not yet made any requested appropriations of user fees for 
     furniture purchases. Proceeding with the procurement and 
     applying a sharp pencil to PTO's future appropriations 
     requests for furniture can only enhance the $72 million in 
     savings.
       Any environmental costs will be totally funded by the 
     developer. All three sites competing for PTO's lease already 
     house Federal employees. The Government just constructed a 
     federal courthouse on the Carlyle site, the Defense 
     Department has occupied the Eisenhower site for over 20 
     years, and the PTO has occupied the Crystal City site for 
     over 25 years. There is no evidence that developers cannot 
     accomplish any environmental work that may be required to 
     further develop these sites.
       DOC's IG concluded that the project should proceed. The 
     IG's key conclusion was that PTO will benefit from the 
     project and will realize long-term cost savings. Both the IG 
     and an independent consultant to the DOC Secretary (Jefferson 
     Solutions) found that

[[Page S9483]]

     enhanced building capability, which is the goal of planned 
     interior upgrades, is not unreasonable in terms of cost and 
     purpose. And S. 2260, as passed, would place the ceiling on 
     build-out that the IG recommends.
       Two of the PTO's three unions fully support the project. 
     National Treasury Employees Union locals 243 (representing 
     clerical and administrative staff) and 245 (representing 
     trademark examining attorneys) have already signed a 
     partnership agreement supporting PTO's plans for the project. 
     The PTO is continuing talks with the third union.
                                      U.S. Department of Commerce,


                                  Patent and Trademark Office,

                                    Washington, DC, July 29, 1998.
     Hon. John W. Warner,
     U.S. Senate, Washington, DC.
       Dear Senator Warner: In light of recent reports on the U.S. 
     Patent and Trademark Office's (PTO) on-going procurement 
     process to competitively acquire new, consolidated space for 
     the PTO, I want to assure you that this procurement is based 
     on sound principles.
       These reports are focused on estimates of furniture costs 
     mentioned in our Deva and Associates business case study. 
     This study was undertaken to compare our present, 
     unconsolidated space with a worst-case scenario of moving to 
     a new, consolidated facility under the GSA prospectus.
       Many of the dollar amounts cited in the Deva report are 
     being touted as what the PTO is spending for furniture at a 
     new facility. Nothing is farther from the truth. I personally 
     assure you, we have never contemplated nor will we spend $250 
     for a shower curtain, $750 for a crib, or $1,000 for a coat 
     rack. I agree that some of these furniture estimates are too 
     high even for a worst-case scenario. However, it must be kept 
     in mind that even with these extremely high estimates, this 
     procurement project still shows savings of at least $72 
     million. No one is disputing this fact.
       I look forward to working with you and our appropriators to 
     ensure that any expenditures for furniture are prudent and 
     responsible. Delaying or stopping this procurement will only 
     increase space costs for our fee-paying customers.
           Sincerely,

                                              Bruce A. Lehman,

                               Assistant Secretary of Commerce and
     Commissioner of Patents and Trademarks.

                          ____________________