this recovery tracking hearing number three is open for business the american recovery and in the reinvestment act of two thousand and nine which we call the work cover react or the stimulus  signed into law on february seventeenth two thousand and five out of five point five five billion for the general services administration of four point five billion of which was to convert g s a buildings into high performance green buildings in all fifty states the district of columbia the four territories in addition g s a received three hundred million dollars for border stations and lands of entry and an additional seven hundred fifty million dollars for repair alteration and construction of federal buildings and courthouses four hundred fifty million dollars of which was allocated to the new department of homeland and security headquarters compound buildings to be the ok to on the s at in ward eight of the district of columbia the smithsonian institution received an appropriation of point five million dollars for facilities capital which was to be used for repairing the vital evasion of its many deteriorated facilities the economic development administration received one hundred and fifty million dollars almost all of which was allocated for strategic grant investments in areas hard hit by the current recession the recovery act is premised on the direct spending that data from many decades has shown has the best record for staying relating simultaneously stimulating the economy providing jobs and meeting the ongoing and existing responsibilities of governments at every level for public infrastructure the recovery act the primary purpose is to stimulate economic recovery through investments that preserve and create jobs spur technological advances to enhance energy conservation and improve infrastructure to provide long term economic benefits  only to distribute the funds quickly and to spark short term job creation but to ensure that these investments will lead to higher to long term higher skill and higher wage jobs to this end we will be interested in how the apprenticeship training funds i got included in our package are being implemented today nearly eight months after the passage of the recovery act we want to know specifically about results how many jobs have been created how much has been obligated and spent how much is left to be spent when will it be and whether it will be spent by the september two thousand and ten deadline a know that thirty eight thousand jobs will be produced by the d h d h s headquarters construction over a period of several years i'm also interested and its calculation of the number of jobs to be created by the total five point five billion dollars this subcommittee is tracking hearings will continue throughout two thousand and ten the duration of the stimulus funding because of our unique responsibility among the various committees that charged with oversight of them us funds unlike other funds in the recovery act the funds under our jurisdiction are not distributed to the a similar direct responsibility for the stimulus funds under our jurisdiction and must continue to conduct as specially biggers oversight of these agencies americans can find the projects in their states and localities online and we invited their comments and observations on job creation efficiency and other aspects of the work the stimulus has given the g s a and on parallel opportunity to build the biggest development in its sixty year history that the department of homeland security headquarters compound of three buildings and the reuse of sixty historical structures  this development may be the largest project anywhere in the united states today this work will occur over a period beyond the initial stimulus funding over several more years however based on the difficulty i encountered in securing the first funding i know that additional funding will depend on how well and how quickly the current work proceeds so much is at stake that we will hold special hearings on the d h s project alone from time to time today we want to understand what has begun there what has been accomplished so far who and how many have been hired and what the timeline is on the d h as headquarters overall among other questions i was able to get the first sizable funding for the d h as headquarters project only by all going that the project would provide a clear proven case for job creation for a vital federal agency i will not be able to get the necessary additional fun totaling more than two billion dollars for the d h as a compound without a showing of significant progress both in job creation bites into the g s a backlog of repair for its vast inventory the subcommittee expects a quick start on much of that work in particular many repair and rehabilitation projects do not require extensive design work and therefore can be implemented quickly to provide jobs of many kinds of the right at a variety of skill levels while meeting the purpose of stem relating the economy the repair and alteration of g s a existing federal buildings will also retain space in the federal inventory for occupancy by federal agency which helps to prop up the declining federal building phone that in turn overturns rent payments to the federal government to fund repairs and rescue the g s a inventory from another cycle of decline the smithsonian institution likewise has a huge backlog of repairs for facilities although the recovery act funding for the smithsonian is small relative to the need these funds should permit a more systematic approach to shoring up its infrastructure while creating jobs for the record i also want to comment today on highway stimulus done spending by the district of columbia though tracked through another subcommittee of this committee the committee has had oversight hearings on the recovery act spending by agencies and the states under all four all of our subcommittees a last hearing of the full committee i was sure grand to see the district of columbia listed next to last among the fifty states and the district of columbia and highways then miller's fun spending i want to report today however that seventy percent of the district's highway stimulus funds have been awarded or spent as a stimulus bill was being considered i took pains to see that the district was treated as a state for funding purposes in reality however the district could not begin its work like states with a large department of transportation staffs on hand but instead must rely almost entirely on contractors now that most of the work as in progress it appears that the city is using the funds as congress most desired for energy conservation and sustainable projects that facilitate walking cycling and mass improvements to mass transit improvements and other projects that improve the local retail and commercial environment just yesterday chairman jim oberstar and i went to merge elementary school where the national center for safe routes to school awarded mirch elementary the james l over star safe routes to school award for being the best in the country and encouraging walking and biking to school mer was able to win the award because the district added four million dollars from its stimulus funds to its existing infrastructure funding for the safe routes to school program without objection i'm placing a letter from the mayor of the district of columbia detailing this this progress into the record we look forward to hearing from the g s a the e p a and the smithsonian institution about what exactly has been accomplished we are also pleased to welcome private contractors who have received recovery act funds with that i'm pleased  to invite the ranking member to offer remark to this thank you very much madam chairwoman thank you for holding this very important hearing as as you said this is the third oversight hearing on this by the subcommittee under your leadership of the recovery act funding of two agencies within our jurisdiction as everybody knows in february congress and after the bill a bill that will be administrative and then legislation and those who are supporting it touted as message kerry to create  now doing some simple math that works to close to two hundred thousand dollars per job created or saved that was a promise that was the hope since the recovery act passed in february the national employment rate has unfortunately increased to almost ten percent to actually nine point eight percent unfortunately the sort of thought it's actually now above ten percent eleven percent now according to the recovery dot gov website and i have it here  just over thirty thousand jobs have been created or saved with one hundred seventy three billion dollars paid out so far with a simple math will tell you that that's basically five point seven million million dollars per  job obviously that should give everybody serious reasons to be concerned because we obviously need must do much better than that now as i mentioned before in previous hearings the priority under this spending bill was supposed to be creating jobs that was its stated purpose that was what was promised to the american people however i've continued raising the concerns that other issues have trumped unfortunately the the priority of creating jobs for example out of the five point five billion dollars for g s a a federal building fund not less than four point five billion was doesn't needed for converting federal buildings to high performance green buildings i've brought this up a number of times now look obviously energy efficiency in concert and conservation is an important issue it's one that i greatly support but the priority of that legislation and the priority of the times i think dictates that the priority has to be creating jobs  with all that said i'm interested in hearing from witnesses today on their progress and how many jobs they have created so far i do understand that the economic development and ministration has obligated all of its funds and we know that  has a track record of actually leveraging taxpayer dollars to create jobs and to spur investment by the private sector has a leverage it with the private sector for example vestments in fiscal year two thousand and seven created or retain american jobs at an average cost of four thousand dollars per job and he leveraged over twenty six dollars in private sector capital investment for every dollar taxpayer dollar invested that's a pretty good bang for the buck that is an example the type of return on investment that we should insist upon for the enormous amount of money that the taxpayer the taxpayer their children and their grandchildren have been asked  and i have been forced to frankly put forward so i'm interested in hearing whether the same job figures are holding for e d s stimulus funds i hope as we move forward on those recovery act projects so we can see significant more jobs created and a good return t matters and i do want to caution you about jobs awaiting the expenditure of money over time by looking at obligated money compared to number of jobs the obligated money is an amount of money obligated still going out into the economy and does not for aflac the number of jobs that are created over time and that's the only way to see when we see what money what money has been spent that's the only way to know the number of jobs but i understand your concern and and that's why we are holding these hearings and i very much appreciate your apt and cooperative chair i did have some brief remarks want to thank you in the ranking member for really leading this hearing to examine the execution of projects by g s a e t a and the smithsonian funded by the american recovery and reinvestment act part of the recovery act that i am particularly interested in is the five and a half billion apportioned to g s a to upgrade its bacillus specifically the recovery act direct seven hundred fifty million to renovate and construct federal buildings and courthouses three hundred million to renovate and construct the land ports of entry and four point five billion to convert federal buildings to high performance buildings among the many projects fun will be the robber boeing federal building in st louis to make high performance green building modernizations through this investment the federal government will be one step closer to meeting the energy goals of the energy independence and security act i believe it's important for the federal government to lead by example by making our buildings more energy efficient one concern i do have is that as we invest in high performance buildings is that g s a have the necessary tools to not only retrofit our existing government building stock to high performance buildings but also to ensure that these buildings are properly maintained and operated at their high performance standards we cannot and should not invest in high performance buildings if we are not training facility managers to run those buildings and keep them maintained in operating efficiency efficiently in closing i want to thank our witnesses for joe joining us today and look forward to hearing your testimony building service g s a and bruce kendall director office of facilities yes facilities engineering and operations at the smithsonian institution you may have the economic development of ministration through our investments in local initiatives develop to create jobs and leverage private investment continues to seed communities for sustainable economic growth as part of the american recovery and reinvestment act of two thousand and nine received one hundred fifty million dollars to respond to areas in the nation that is variant sudden severe economic dislocation at the  outset determined that our implementation strategy will give preferences to projects that have the potential to quickly quickly stimulate job creation and leverage private capital investment why van seen regional economic development strategies responded with the appropriate sense of urgency while not sacrificing the important less than a month after as an act of man published a federal funding opportunity notice and distributed the funds to each of our six regional offices stablish a stretch goal to have all of our era funding obligated by the end of fiscal year two thousand and nine and i'm pleased to report that we met that goal and as of september twenty fifth two thousand and nine we had obligated the entire hundred forty seven million dollars for the program allocation the balance of three million dollars is available for salary and spends funding which will continue to ranging in size from a hundred eighty four thousand dollars to six point four million dollars the vast majority of our investments in fact ninety six percent of our investments are funding construction  projects projects including traditional infrastructure as well as business incubators these investments support a diverse mix of economic development activities linked to the recipient's regional economic development strategy for example  invested four point seven million dollars in the city of santa cruz california to help create the digital media center at the tannery this is a business incubator for digital media companies e d m vested eight hundred thousand dollars in the delaware technical community college to construct a green building technology an alternative energy systems training center and savannah georgia invested two million dollars in the georgia ports authority to enhance the port service capacity the recovery and reinvestment act also required new measures for unprecedented accountability and transparency we've directed our regional office to develop specific outreach initiatives to assist our recipient partners in meeting these additional reporting requirements and i'm pleased to report that as of today ninety eight percent really all but one of our recipient grant recipients as successfully reported throughout this process staff here in washington as well as in our field offices has been untiring in their efforts their dedication and commitment has m standing outstanding i wish you congratulate them on their accomplishments today and madam chair e t a has a long and very successful relationship working with you and this committee and i look forward to working with you as we strive to strengthen e t a but more importantly strengthen the american economy and i thank you for your time today for inviting inviting me to give an update on the as you said stimulus funds and i love for answering any questions you might have submit for the record and i will make brief remarks thank you for inviting me to appear before you today to discuss g s a contribution to the nation's recovery through the green modernization of our building inventory the our the american act gave us an unprecedented exciting opportunity to contribute to the nation's recovery as of today g s a has obligated more than one point four billion dollars for federal building construction projects funded by the recovery act and we have expended over fifty seven million dollars we exceeded our goal of obligating one billion dollars by august first and we are well on our way to obligating another billion dollars by the end of the calendar year for a total of two billion dollars by december thirty first we project that sixty thousand two hundred some jobs will be created from the five point five billion dollars in recovery act funding allocated to g s a this projection is based on the council on economic advisors estimates of job creations initial reports indicate that as of october twenty third two thousand and nine our recovery act funding recipients have created or retained seven hundred seventy three jobs as a direct result of the fifty seven million dollars in spending and i would emphasize that that's direct spending to date does not include the multiplier effect of other jobs and it refers to the direct work that's being done today out of the one point four billion dollars well contract award as a catalyst for money flowing through the economy it is important to note that recovery act funds do not flow immediately following a contract award rather payments to contractors for progress made as they do the work provide steady support for the economy over an extended period not a jolt that lasts for a few months but a long time recovery these are positive pulmonary indications of g s a's contribution to the economic recovery we are leveraging our recovery act investments to begin to turn our large varied and stable inventory of buildings into a proving ground for br green building technologies materials and operating practices we are also moving forward with several leases required to move federal employees out of buildings and that will provide a twenty five million dollars stimulus through rent payments including recovery act funded relocation leases for the last yet building renovation in washington d c and the bishop wilton whipple building in fort snelling minnesota we have set interim target dates for project awards in each quarter to ensure that we obligate the five billion dollars of the five point five billion that we are supposed to obligate by our target date of the end of fiscal year two thousand and ten that is september thirtieth two thousand and ten the projects we have funded are varied in scope type in region and cover our entire portfolio for example we are building a new courthouse in austin texas that incorporates many innovative green features such as high efficiency heating ventilating air conditioning systems and extensive use of natural light i attended the groundbreaking ceremony for that on september second i'm excited that we're building this courthouse there to achieve a lead silver certification the excavation has begun on that courthouse and is already eighty percent complete building piers will be sunk beginning in mid november our progress toward consolidating the department of homeland security as you noted madam chair at st elizabeths is on schedule as we committed we would we awarded a four hundred thirty five million dollars contract in august of which one hundred sixty two two million was funded by the recovery act for the design of a new energy efficient one point one eight million square foot coast guard headquarters the award went to clarke design build l l c a local contractor in this area as you are aware as you noted say needs will be the washington metro areas the largest federal construction project since the pentagon it will revitalize and spur economic development in anacostia and will feature green roofs landscape courtyards and provisions to reuse surface water run off in addition to new projects starts we are and and hansen projects already underway by adding new high performance green features and that's one important way in which we will reduce some of the backlog of needed repairs to our federal buildings and also make our inventory more green the recovery act requires recipients of funds from g s a to submit quarterly reports for this initial reporting period that will be completed october thirty first we utilize multiple media to help recipients with the reporting process our recipients have provided a lot of positive feedback about our call center for example and express gratitude for our staff assistance i am proud to report that ninety nine percent of p b s prime recipients have reported and i can't emphasize enough how much the white house recovery office is emphasizing on the ground real time reporting of actual jobs that are created as they are created we are also excited apprenticeship and pre apprenticeship programs are an integral part of our recovery act projects we launched the pre apprenticeship programs with two contract awards worth one point eight million dollars these programs will enroll more than four hundred unemployed people we have initiated a process for additional candidate organizations to apply for the pre apprenticeship training programs we issued a solicitation on october fourteenth and proposals are due back to us on november thirteenth finally we have identified ten large cover yack projects rep representing about a billion and a quarter dollars in recovery act spending where project labor agreements may be used and we are researching markets in several of those areas to make sure we do the p l a work right we are also managing real estate in r w r w a wreath reimbursable walk work authorization projects to the tune of about one billion dollars from other federal agencies most notably social security state department agencies totaling two hundred ninety three million dollars in spending in conclusion i have just emphasize i have just reported briefly on our accomplishments you have in my written statement a list of all of the projects that have received at least partial funding to date and i look forward to answering your questions thank you for that report mr peck mr kendall woman norton and other distinguished members good afternoon i bruce general director of facilities engineering operations for the smithsonian institution on behalf of the institution let me express my appreciation to you for this opportunity to testify on the tracking recovery dollars is extremely pleased to receive twenty five million of stimulus funds from the american recovery and reinvestment act of two thousand and nine we are grateful for the support of the administration and the congress for the essential work now underway here in their district of columbia on the national mall and at the national zoo and rock creek park at the zoos conservation resource center and loyal virginia and at the smithsonian's environmental research center on the chesapeake and edgewater maryland we have applied the spawn's expeditiously to sixteen important repair and revitalization projects at the aforementioned locations all contracts were competed and all but two of these contracts were let to qualifying small  business firms in the local area for total of sixteen point five million this is an update to what we have previously provided in written testimony with the exception of a small retain age about three million dollars for unforeseen contin the funds are completely obligated and work is in progress in the spirit of the recovery act we anticipate substantial completion of the work by the end of two thousand and ten the valuable work is being accomplished on this  program and will make significant improvements to the safety reliability of many of the smithsonian's buildings and we are managing this work carefully to ensure the highest quality and safety livery a product while fully complying with the requirements for complete transparency and accurate reporting great benefit from these bonds while we create jobs for a lot of local craftsman and laborers work most of our contract is underway while reports on jobs created or retained are just starting to arrive we anticipate that we will have created or system employers and retaining well over one hundred jobs once the final report to receive thank you for this opportunity to provide an accounting of our recovery act dollars i look forward to answering any questions madam chair it's very important for us to continue this process of hearings on the recovery act and holding federal and state agencies accountable for the recovery act funds that we  highway and i would move out quickly located within us to move out quickly and they did those funds were allocated within thirteen days of the president signing the bill into law on february seventeenth and thirteen days after that we had states notified of their amounts for the respect of the o t s under the allocation formula in federal law which the recovery act contract or on construction site over six thousand highway projects and when our next report is our next hearing will be held our next report is received will be in the range of one hundred eighty five thousand direct construction jobs there will be another hundred twenty thousand jobs in the supply chain supplying ready mix asphalt sand and gravel rebar fencing guardrails and all that goes into the highway construction there is already a documented six and a half billion dollar payroll for those one hundred eighty thousand construction jobs and nine hundred million dollars paid or being paid in federal taxes alone public is getting its money back it's getting permanent improvements jobs are being created and were hundred in thirty some days were well past the halfway point work of other government agencies and and programs is has lagged behind the performance of the federal highway administr a billion a little over a billion dollars has been was allocated in the appropriation process for courthouses and ports of entry first question want to respond  how did that dichotomy occur and i know the language change occurred in the house senate conference and also with the intervention of be about the second beef that i have frankly is that questions that we've submitted to g s a have taken up to two months to get answers that's not acceptable we expect you to respond you took over forty five days to develop the final list of projects there are people out there hungry for these jobs and i don't know what's what has taken so long and i'm unhappy with that further on may sixth i sent a letter to g s a x asking for a specific response to the renovation of a federal building at united nations plaza in san francisco five months later we got a response that's not acceptable maybe needs some stimulus to get enough people on board to answer our inquiries we're not we don't have time to be bird dog you expect you to respond and i expect better response in the future so let's go back to the first one why was the problem you had design right what was the problem you had design ready projects in december zero eight but then didn't proceed with those after the bills and act d mr chairman first man i say that mag aback the letter just for a moment that is an unacceptable time period to respond to a letter arrived at g s a two months ago i wasn't aware that that letter had taken that long and but i can tell you that the question of responding to correspondence both in the congress now from vendors and others is a matter of great attention to us at the moment and i assure you you'll get much faster again when i arrived at g s a i asked for a briefing i'm aware of the projects that we have to date i do know not but can provide you with some quick answers for the record on what happened between december two thousand and eight and the list that was finally approved and that we've been working on but as you noted certainly doesn't clued a good number of full building modernizations and as well as some smaller scale projects which we believe we can get we can get under much faster there are some projects that have broken ground those that were many of them were fairly well into designed by the time the stimulus money came in and we were able to to use it and then other projects are very close to being awarded i think the one of the problems we have i'll just just make the note as we are obviously these are directly funded federal projects we are not sending the money to anyone else to spend it it's our money your money the taxpayers dollars that we're spending directly and i believe that we've moved out very quickly on some of the large projects to put them in shape to put the contracts out i think you'll find in the next  quarters that we will have most of our five point five billion dollars out on the street in contract awards there's there's just a in heavy building construction like this there is a time lag that sometimes you don't see as much and you had a billion obligated committed to specific projects by the in the beginning of august and you anticipate according to our many investigative staff report billion by the end of this calendar year that i correct that is correct yes sir and you have a detailed list submitted to submit to the committee of those specific projects mr chairman we have given you a in my statement we have a list of projects but they don't have the dollar amounts with them which i will provide for the record we do have that we are up to a little over one point four billion dollars as of today one one thing i will i will note and you should know about the numbers is that because of the slowdown in the economy we are seeing construction bids coming back to us lower than we anticipated so we have actually for the one point four billion dollars awarded contracts that it earlier in the year we thought would be about one point eight billion dollars so we are moving projects up on the list as we go that's what we've seen that in the federal highway program with the states getting bids back twenty five percent on average lower than final design estimates the design engineering estimates so we're we're getting more dollars for the for the investment and more projects and more jobs created that that is also correct if you take a look at our our cost per jobs on the money spent which is nowhere near the one point four billion dollars but the fifty seven million dollars and seven hundred seventy three jobs i hope i got that number right we are down and  for six weeks now i wish i could take credit for the great work our agency did but as you know we've got a wonderful number of folks throughout the country and our regional offices are very good  at putting together these types of applications they're in the field constantly evaluating opportunities to find economic development projects and they've got a wonderful track record so they deserve all the credit for that but they do they've been through accelerated public works in nineteen sixty three accelerated public works to in sixty five sixty six and then local public works one local public works to and last year carter first year the reagan administration has learned how to do these projects and has grass roots support  in the scandal i appreciate the smithsonian relatively small slice of the stimulus but there are many good initiatives at the smithsonian as undertaken and thank you for your presentation percent unemployment in some areas and the seriousness with which the people in my district are struggling just to get by day to day week to week looking for job creation i think it's incumbent upon all of us to to dig deep twenty four seven and see this is more than just a job right now this is a calling to try to turn this economy around and i know many people in your agencies and organizations are doing that sort of work we just need to be sure to high hold ourselves the highest possible standard of everything we can possibly do for economic recovery and remember that behind each of those statistics that we talk about as a person looking for a job as a family trying to get by i hope i'll just keep that in mind and i really appreciate the chairman keeping our feet to the fire on all this on the floor to hearing more from you during the questions thank you do that he has done so he's been in fattah he's been aggressive and yet always very inclusive and then mr pros said this has to be the priority job creation and i thank you for your efforts to get a transportation bill out to make sure the gentleman for his kindness we enjoy in private now we enjoy the greatest collegiality here and i and for that matter this subcommittee and it's why we get things done and i just want to say  before i ask the first question then i'm going to ask a question and go on to other members before coming back to questions you see a chairman well the subcommittee is used to my take and name and writing down numbers but you see there is a better name taker and number crunch that i am at the head of the committee and the fact that the chairman who has oversight over more subcommittees and i think any chairman in the in the house makes his way to this this hearing says everything about the accountability expected of us especially in light of our direct responsibility because except that you da you are not passed you are you are accountable directly for the contracting that this this matter has to we have to show we can do it and i want i want to sociate myself mr diaz with your remarks concerning  a new transportation bill which the chairman is is strange was he trying to get through here we're not going to get another large stimulus package with that is no excuse for letting the transportation bill lie fallow while jobs not to mention highways and transit and improvements in great need go by the way we would have a huge deficit problem but no one can doubt with unemployment at the lagging indicator that something is going to have to be done the best thing to do there are jobs and the economy at the same time is to get as much of the reauthorization of the highway bill as possible that said i want to ask the same question to all of you not was betting my good friends concern about i would lay jobs i think we can come to some kind of agreement on that at a later time but i do think both he and i would want to know precisely how many well not precisely it's an organic process but approximately how many draw obs have been created on the projects under your agency and how much of the total amount of funds has been obligated let me stop with that before i go to the rest of the bottom line all three of you how many jobs how much obligated of the total amount what percentage of the total amount obligated mr fernandez sorry madam chairman as i noted earlier we've obligated one hundred percent of our a a reporting requirement and a kind of almost checklist does that include the number of jobs is that something new is that useful could perhaps we use it with other agencies  as i understand a word looking at the direct construction jobs related to the investment which this is an important distinction to direct instruction jobs is of course all the only question i can ask the reason we are doing stimulus funding is because of the multiplier effect that mr peck spoke of which is many times those jobs down the line and interestingly in their job categories so we're coming to the end of the first reporting period the end of this month so those numbers will be well that's it does take some time to get a fair sense of whether you have people who are permanently on the ground for this period  thirty days would you get us your first report on jobs absolutely ated now mr peck same question for you how many jobs what percentage of total fon five point five billion obligated of the of the five point five billion we have obligated one point four billion or twenty five percent now is that on target for something or how do you arrive is how do you know whether you're  going to finish on time without looking at and for those well as you know on construction projects i mean you have milestones for when you're going to have when you're going to acquire the site when you're going to begin design when you end design when you are the construction contractor you make progress payments along the way and you have a target date for the date that it's going to be done and we have all of those so what what we did and i have to say again not there is a project management office and g s a that manages this superbly that we for each project know the project schedules we aggregate them and we have a pretty are you on talk is it twenty five percent where where you expected to be as i'm just hearing yes ma'am that is that is correct and we expect to be at two billion dollars by december thirty first of this year ok you have given us a very hopeful calculation for the number of jobs that will be created at the at the department of homeland security side over the several years maybe seven or eight years thirty eight thousand how many jobs have you created thus far in at the various g sites at the various sites so far recipient reporting indicate seven hundred seventy three because again the spending to date is fifty seven million ok i'm going to i'm going to ask questions about spending in a moment but then we go to mr kendal established just recently being done october twentieth i believe was the cutoff date for the reporting and we had fifty one new jobs retained or created reported by our prime contractors we expect as i stated in my testimony that we expect that number to be well over one hundred as our jobs get underway many of our construction jobs are just getting committee great dispute arose because of the difference between obligation as law i would like a real spending so let me ask you about spending how much money has over twelve million dollars we anticipate by the end of this calendar year that these are the start of the project so that the money is not just iowa get it but they're actually in the field doing the work and the money's being or whatever it is the amount of time so those expenditures of course go up the longer the worker stays employed what about expenditures mr mr pad in terms of outlays or actual spending actual spending is as i noted is about fifty seven million dollars that's about five percent of the obligations to date and  let me know two things i'm i'm not surprised that there was a debate before because these numbers are part science and part art the job numbers are science because i think you have to give the administration a lot of credit for setting up a centralized reporting mechanism that says we want to know exactly direct transparency about it and there's no fudging that's not the multiplier effect that's just jobs of people say they've they've created you know thing to note here is that those numbers really in a construction project as long as we are at the point where we are paying for design upfront architect some demolition some environmental testing we're not spending money and great big gobs when we award construction contracts we will see a lot of workers put on that's one second point to remember is that we pay in arrears which means that people are being paid in advance of the federal funding going out people apply for progress payments when they've made progress that's number two and number three simple you know that even awarding a a construction contract before when we indicate that we are going to go forward with a project and we start hiring architects and then we make it a construction award the contractors and you can ask the contractors who are here can mobilize their sub contractors and start telling them that there is going to be a job in two months that makes a difference in how much people feel confident about the economy and what they do and i think that's one of those lagging indicators that you did you just don't quite see mr peck mr kandel expenditures manager little over four million dollars has already been bill contractors the obligated amount of twenty one million yes i'm going to go now to i think it was just waltz would have been next a minnesota do you have any questions mr carnahan capabilities in terms of of having enough federal facilities managers and operators that are probably trained and certified and said where does that stand today and it's not where you think it needs to be what plans are in place to really bring that up as the sophistication of these buildings increases with these investments how are we keeping our personnel up with  that that's a i'm glad you asked that because one of the things that gets lost sometimes with all of us who do construction in real estate is we love the new buildings and we love to build them and then sometimes we walk away a little bit once they're up and particularly on green technology and there is as you note a learning curve for our for our building managers we have i think we have sufficient building managers facilities managers to run our projects well currently in part because what we do is our facilities managers really contract a lot with private sector services for cleaning and maintenance on our buildings but you put your finger on a problem that we have both in the public and private sector at the moment which is that to some extent our green practices and technologies are running a little bit ahead of the people who have to maintain them we are working with the international facilities management association the building owners and managers association we're all talking about the same kinds of issues and we are putting in place training programs for managers to train them in some of the new green practices requires different ways if you install certain kinds of water conserving devices in your buildings people have to learn a different way to maintain them and that means not just of his federal facilities managers but also the contractors and i can tell you one of the choke points that we've experienced in previous years and i think it's getting better is finding private sector contractors who know how to clean a building or maintain a building using green practices because the the industry as a whole is starting to embrace green practices it's becoming a little bit easier service or this also in partnership with the private sector it's it's both it's training our people and also changing the specifications we have in the contracts we put out for for the people we hired to do some of the detailed maintenance and cleaning work  the other thing i want to ask about is energy performance contracts and the ability to leverage some of this funding with those types of companies where they can come in  and provide the upfront capital cost for some of these renovations with the energy saving gains that are passed along to the government and we have made we have made use of those in a number of previous years and we've looked at them for some of the recovery act projects as well there is a in some cases the time it takes to get those contracts in place is has made us decide not to use them on some of the recovery act projects but can i also say that we believe we're in this for the long term we think we need to green our inventory not just with a five and a half billion dollars we have but as we go forward we are taking a lot of look at how we can use those contracts pass some of it may or may require some streamlining of some of our processes but it is a it is a great opportunity to leverage our funding thank you mr diaz but i do you have any additional questions thank you thank you he's holding for the moment the president has spoken out on the failure of small businesses to fill the reason they shook their heads we only reach that in for the first time i think it is one thousand nine hundred ninety and was it these folks are back thanks to our money and yet you will find that my constituents and i was still not feeling it do you feel me no i want to know what each of you have done to make sure our small business contracting is included in effective in spending funds which is why we way will to get it funding for you in the first place you should have and we need to know in thirty days whether or not there is a small business  plan for the spending of these stimulus dollars these dollars your dollars fifty sure are going to the those with the highest unemployment rates where where small business is down if not out we need to see your small business plan within thirty days to know how it is communicated to the states and to see what the reporting requirement is not only w creation but with stimulus if this money does not reach small business contracts and then the funds over which we have oversight will have been a partial failure m small business incorporation into your work how is that occurring well as it's part of our normal procedures as any any construction contract for a million dollars or more has to come with a small business sub contracting plan it's a little bit unfortunate in in federal small business contracts reporting that we don't get credit for  explain why and please make me understand i know there must be a reason why whenever you hear something like that the first thing you should not think is have stupid somebody had a reason for doing that and on do it until you get all the facts on the table so what's the reason why sense most of the small business contracting for example would go on right through these contractors why does the government not count i think  i believe yes we should ask here is by intention here is is not to let agencies off the hook by hiring you know big contractors for things and then they'll just sort of pass it down to you know they'll pretend that they have a sub contractor doing the work and get credit for it in our case in the construction industry i have to say i think that's a generic view of federal contracting in the construction industry though where you know when you hire a general contractor often so much of what they do is done through small business subcontractors i don't want to get to with any of my friends who are contractors here but you know i don't know what the percentages of their own full time employees versus their subs who really don't work full time for them in the end all i'm saying is in construction industry it's somewhat different but we monitor very closely the sub contracting plans that people give us and find not if they're actually what i said so at least in the construction industry so long as you can't break or and i hate to even talk about keeping records but so long as you knew who it was whether the boy or the general contractor you obviously don't have as many opportunities to engage in small business contract was a long as you knew there wouldn't be any problem in leasing construction work with getting credit all after that matter putting some pressure on your sub contractors to engage in small business contracts that's great and we do track how much of the sub contracting is going to small businesses i'm just saying no so if we go in and construction mr pac if we gave credit for those sub contractors accountable and since they also are going to get some credit for i just still don't see why leith and contracting it wouldn't make sense to do what i don't have a good answer for you about why it wouldn't make good but i  accept your answer that generically perhaps in some other areas of the economy it wouldn't work as well but it probably makes sense but we do have we have some contracting goals as i said we for small businesses we hold our contractors to  them in addition to that we hold we have held and are going to hold more failures for small business contractors and we put things on web sites and through contractors associations because not everybody is still so computer savvy  to let people know where there are opportunities sometimes with small businesses that say it's a matter of leading them to the larger businesses that they'd have or some of our cortex at of course there was a very large and impress fair held just yesterday at the ronald reagan building where all the small businesses and large businesses and like set up bolts so that the industry themselves we didn't do this g s a didn't do this the end the street brought every which a way of small business and other mid size and larger businesses in the same large atrium and they could network among themselves and find themselves find the contractor find the sub contractor very successful sub contractors work on a project told me that large contractors saw what he had already done and came to him and invited him to participate in his work but i want  that that was a large sub contractor i want to get credit for seeking out the small business who is going to now be doing some sub contracting with them so i'm going to add staff to help me figure out whether there's a way  the greatest problem as i see it with the stimulus in the business sector has to do with small business sector which provides jobs more quickly than other other sections of the  kendall madam chair specific to the recovery act projects that we've warded we're proud that one hundred percent of our projects were awarded competitively we're also very proud that small break down the small business to get within thirty days how many of those have been a small business is a disadvantage businesses of any kind and could i see mr packard we see within thirty days  plan that is a part of the national broker contract within thirty days yes ma'am that's obviously an enormous opportunity to take you today with smaller firms we have a few firms that have the broker contract for leasing and who have real hungry smaller firms who also do leasing and maybe a whole lot better and quicker at it then the larger firm which may serve an entire region of the country  regulatory commission is what i'm talking about you're the agency with a brick building and construction expertise now we have got to find out first let me help you see if you helped the washington post october twenty seventh this very day in our c design build office tire didn't go through this committee we'll know know somebody lobbied probably the agency itself and got the money put in a appropriation bill i want to know if g s a has assisted the n r c see in this an authorized project to build a design build no assisted the n r c to in this fourteen story design build projects across the street from where it is where at taxpayer expense they go to downtown but there's the one of the most expensive parts of the region or of the united states of america without  taxpayers to see if that's the best place for to be met where did they get the authority what the cost per square foot did you help them at all and how far they have gone with respect to this on authorized construction madam chair the the n r c lease is in is in fact a g s a lease i don't  the design build construction it's it's actually it's not a it's it's not what's known as a lease can struction per se but it was a it is a fifteen year lease there was a fifteen of a private of a privately somebody own brand new been understand everybody what we're hearing some developer somewhere has been able to get the government u plop dale money to rent his building for fifteen years and he didn't have to compete anywhere else in the region is that's almost a fact well that there was that we did issue a we did is us all a  competitive what was supposed to be a competitive solicitation for offers however as it always out as being on what's safe so we don't have any record of that before this committee well i think because there was a direct reference to the lease in an appropriations act the consolidated appropriations act of for two thousand and eight public law one ten dash one sixty one included a provision requiring that the lease for the for the and expansion lease for the n r c be quote as close as reasonably possible to the commission's headquarters location in rockville maryland and well of course that was we never use language like that where you don't know where the authorizer is and with the taxpayers tell us that wherever it is it's got to be the best deal for the say a taxpayer then it was across town or if it's cos the street fine but after competition well you did you tell the the those who who superceded the leasing language of this subcommittee what the law requires and question that at all or did you just go ahead and and do an authorized work without consulting even with the subcommittee met madam chair  rarely duck a question but it was before my time and to be honest i saw the newspaper this morning and saw that this lease was was announced and it's the i don't have any more information than what i just gave you i've asked this morning to find out what i can about it i don't know quite how this least started i do know that n r c was looking for expansion space they have other leases there as there was  in the previous administration a a push for more nuclear energy and there may well be on this one too for all i know and r c i know had asked for more staff and this was an expansion lease how the language got in the appropriations bill i just unfortunately don't know i can't hold you responsible i do want your commitment that under your on your watch you will never simply supersede  language from this committee without informing this committee so that we can have a little talk with the appropriators of the senate you know i used to work on the authorizing committee on the senate side i i know this issue and you have my assurance well let me tell you this is  very serious we've seen some executive redlining by g s a in this committee where people try to go to k street at a hugely inflated rents to the taxpayer inflated only extraordinary case of redlining where a judge asked indeed altered without consulting this committee a prospectus even though language says you can't  prospectus they did it by amendment and said that was an alteration whereby the new amendment stead that h h s has the had to lease space close to hairdressers bo because a competing developer wrote me a three page letter so we take very seriously on authorized matters and as long as you assure us that that will not happen on your watch i can't hold you responsible for what didn't happen on your watch but i have to tell you that it's a combination of of overriding the all the risers and red lining because these people say i like my neighborhood i don't care what it costs the taxpayer it is totally unacceptable and where we find it we have to stop it and call the agency to account i accept your your your your response be on two when he was a staffer is one of the favorites of the chairman and mine but it has to do with something stated on page one about your  attract private capital investment like other infrastructure building you are george not only with building but with building so that as we have seen from our hearings much more often did not in all fifty states so you must've had some kind of and did you have a competitive process but you must have had some goals and we're most interested in this goal about attracting private sector they saw what you do in the public sector and say we as i mentioned in my opening one of my earlier answers madam chairman that you know for us the stimulus act was not a new process for a totally different  and agencies work so we were able to pretty quickly adopt a hybrid approach to our grand process in terms of the criteria we use for allocating the total funds across the regions but as part of the review process our regional office and their internal investment review committees approach the grants the same way that project that has been selected and had or you expect to have to leverage several times the amount you're putting in with private investment i'm sure where i'm am sure when we look at the applicants we provide guidelines our guidance to the regional office and the vast majority of decisions are made at the regional office they're the people on the ground they understand what's important  within their states and within the subdistricts within their state in terms of the economic development priorities of those communities so they have guidance from us too on the private investment side we try and shoot for a return of north of maybe twenty five twenty six dollars a return for every federal dollar invested in historically has been very good at receiving that kind of return on investment as i noted earlier we're going through the recipient responses as part of the transparency in reporting requirements we should be able to give you projections but i feel very confident since our staff was using a very similar evaluation maintain inventory so we don't have leases much so we have a hard time understanding how any agency could get away with paying no rent but i want to shout i no rent even the smallest agencies who occupy that all office space pay the going rate that way we circulate the money and we fix up the buildings so that they don't go with the agency imagine that go see a thing with a scaffold on it maybe you can call and put them out but you do have real authority and so i want to know how much in amir's how much you've gotten so far and what you're doing to get the that's here it's there ok i don't have an answer for you today although i'm afraid i can guess the answer i can tell you that i have already had i think you made me aware of this at a previous hearing i've already had a meeting with officials at the department of agriculture i do understand that they've heard this from g s a before and a lot from g e i heard from they would like them to pay  to the inside the executive branch at a higher level than between me and the mr palliser within thirty days we need to see because i believe we could get a response we need to see a letter from you before we send our letter we need to see a letter from you to the head of o m b indicating that the agencies of the federal government are subsidizing the u s d a because everybody else pays brando virtually everybody else by the way i'd like to see in thirty days a list of agencies that do not pay rent because everybody who does is therefore subsidizing all of them but surely this is the largest of them i would like and we know who can get this done and we know how little g s a gets done we're when they're in this kind of fit so first of all we need not sure whispering to oh i'm being wanted to do something about this see in writing a letter indicating what the back rent also to stop paying the state of the federal building fund today which is the client saying because we must leave more given the state of our own inventory laying it out and requesting and indicating that the subcommittee and the full committee have asked you to make this request to do so on our behalf and on behalf of the agency itself you have any problem with sending a letter within thirty days to the head of the head of o m b to that effect madam chair of all the questions you've ever asked me that's the one i'm probably happiest to answer yes  obligation to do what it seems to me they can do best and send the c d c to us because that means the white house will send a c c to us we will back you up  hope never to have to ask this question again and i must say to you that just we are looking for you to use all the leverage you have and you've indicated in your own testimony you're doing so it seems to me well enough with respect to the stimulus funds but we know that we went to great lengths to get the old post office project out of out here like the u s d a which you have the authority to make bread you on your own if you're an agency the stands up to a p r agency you also had the authority you before you were there to in fact do the old post office a mob a great historic building right across from the white house into the g s a testified that it was hosting the urban land institute to talk with the private sector about financing opportunities you should have done this five years ago when the economy was hard now you've got to do it now what is the status of the  office project that urban land institute panel is meeting here in washington in early december as as you indicated the right question to ask at the moment is whether a private would be involved in the funding this is like the tariff building this is this is is it shows the return to the government this administration understands return to the government that's why i bought a building that it had been ranting on with this year's appropriations so i need to know how you intend to move on the old post office building even though the economy may not come  or next year but i can tell you in brief the president pervez of having the urban land institute panel is to test to see if to test the markets response to a potential solicitation for offers on the building because that's what we would like to do which is what we did with the tariff building now the hotel the hotel monaco although as you know we were able to do that in a better economic period and that's one of the things we need to do what we don't want to do is go to the market and find out that there's no response so this is a this is just a marketing test marketing that we're going to do with you ally people before i go on with more questions i know that that ranking member and and  ask just a couple more questions what's the state of the federal building building fund to pack if by that you mean this year how much are we do anticipate yeah actually i don't expect you to have off the top of your hand what i want to know what i want to know is this how much was in the federal building fund over the past five years and whether it i'm trying to figure out how much trouble we are and as we lease more and more space which means so it doesn't go into the fat up bill right i can tell you i will provide you with we have some pretty good charts on that i can tell you that the the disturbing news is of the rate we're going and this is based on our guesses about run a rate and in the coming years that we anticipate that somewhere around two thousand and fifteen or two thousand and sixteen the federal building fell no longer be profitable and as you know what does any of that profit of well are we charged rent so we have revenue there's a no we have expenses which a large chunk of which are payments to less sores for rent we have building expenses and the difference between our revenues expenses and it is in essence because we can't borrow our capital  capital funds we have to make significant repairs to federal buildings and keep them up and in some cases build new buildings and because we are leasing so much more and we do anticipate that rent rates are coming down so we it looks like somewhere around six years from now the you know we'll just be maintaining we won't we won't be in deficit but will bring in enough revenue to keep it to maintain to meet our lease obligations and our in our operating expenses in minor repairs but not capital expenditures all straight out leasing we're doing more and more of that so we're hastening the moment you just described where your advances i'll grow your ah but i'll grow any your council and the o m b to discuss for twelve already and that authority would of course how to do some construction of federal space federal use given the urgency that you have just described for the federal building fine i must ask you what was the outcome of that july me ding and what is the status of your help you use that authority the last time he was here what's the status of four twelve authority and your discussions to use it especially in light at the or testimony that the federal building f is going from we have i have had a in the time i've been a g s a i've already had a conversation with with with the o m b about the possibility of using for twelve authority just generically and we've we've rehashed some of the issues which have a risen before because as you you know i asked for something similar when i was here in the clinton administration and  their go ahead which we need in various ways to go ahead with the project have to tell you i don't know a lot about that idea what is that part of it but it's a project in denver and i have tell you i don't i'm not allowed to know too much permission was granted by the congress of the united states for the g s a to use for twelve authority and now you say you've got to get permission from the o m b who gave them permission once we've given permission for you to proceed who gave them permission to get in between us and an agency we've told to use for twelve authority well as i think you know the procedure under the o m b and the  agency is to say i got in my hat little hand something that this committee has not only now put in law but which i'm going to be called account for at every hearing that they have and what do you want me to say if the agency doesn't back there is not going to be any change in the status quo that is a g s a i have known ever since i've been in congress well that's not the g s a when i'm there but it is i can tell you i've argued strenuously for for the authority and but as you know before we can submit testimony or other proposals to the congress they have to go through an o m b review and you know i probably than half assed omonia and that are that the testimony has to do with agency policy this is a policy of the congress of the united states and i'm asking you how the any agency only included can countermand what federal law has said do in light of the urgency with the federal building fun you're making us leave over and over again you're making us a bullied other agencies because you  authority that we demanded that you use at least three years ago without a chair i think i think part of it is the way that the the way that the legislative language is is written again as you noted arises us to use how to operate when an agency doesn't do what we urgently believe must be done we don't think this would be a nice thing to do after all it would be good to see what happened we see an untenable situation that you have just described two thousand and twelve pay no federal building bond and all that we have now done goes down the drain because you begin to get a huge rise and deteriorated buildings again all because the o m b force and the reason that you knew i mean i could give you their reasons for opposing they they've existed for a long time they are concerned about what is essentially public private financing they believe that federal financing the sense of the federal government finances at a lower rate than the private sector that by definition anything that you finance with the private sector is going to be more costly they believe that this might encourage agencies to buy properties or or put up buildings that are not necessary i could give you their reasons but i'd be giving somebody else's argument not my own i can tell you that there are there is new management at o m b we have talked to them initially about some potential and as i suggested we are thinking that if we go to them with specific projects perhaps we'll get a different outcome i should also know we've we have also made the point that some other agencies have similar authorities and have used them yet we have seen the problem over and over again we we've done the calculations with the cost of money a centuries and there that are budget examiners that are wasting the taxpayers money i hope to be able to break through that with this administration in part by getting some people in the o m b who understand real estate and how it is financed and how much money we are wasting not only with respect for twelve authority nonuse of four twelve authority but generally with respect to real estate but i have to add to tell you particularly since you've also been in the private sector provide evidence of savings to the federal government through use of force twelve authority and this is ministration given the circumstances that have forced it into raising sky high deficit needs to l that would necessary to get the work on board and done g s a witnesses at the time mentioned that they were beginning to hire a new one temporarily in order to have trained people who could get this done and out into the streets you had been this agency and been so glad by the last administration you didn't exactly have a lot of people to bring from the region or many are on board how many are helping you in the effort now underway with them it was funding how many contracting officers or example we have  of actually just seen those numbers and i'd like to provide them for the record but the short answer is that we have hired a number of retired annuitants i believe we've hired we've hired either or either we've had extensive discussions on this was never was in my head we've hired nine retired annuitants who are in one function or another but i believe most of them are retired contracting officers because we needed them back because you have to have a war and it contracting officer to issue contracts  we have to hire twenty eight permanent employees and twenty three of whom are contracting officers and fifty two temporary or term employees in the retired annuitants all come in that latter category of temporary or term employees but again i you've been able to hire temporary employees you have and you have enough to keep on track and on record you see the chairman takes names to you know you know what we what we have done to make the recovery act projects move  is we have moved a lot of arcs in the reason there hasn't been more hiring i was wondering why we haven't hired more people as we have moved a lot of our experienced people into the recovery act projects because we need people on board on those projects it was a big a big workload that we hadn't anticipated before so we moved mostly experienced people into the recovery act program and we're in some cases are hiring is back filling for the regular program we went to for the recovery i got mean i thought these annuitants were for the recovery i rate their new events are on the recovery act kroger the temporary employees what are they on it a lot of some of the temporary employees most of the temporary employees are also recovery act program because it's a temporary program you just said you move we have hired so we have moved some permanent employees act program as well and so you don't see them in the in our new hiring figures and you don't see the kind of new hiring that some of us like that i think you may have heard is a projection six months ago we've been able to move permanent employees in there and back fill a smaller number of people in some of the regular program we have also put on board some retired annuitants another temporary employees to work on the recovery act well thank you mr pac and thank you m fernandez and mr kendall for their important testimony as we track the progress of the three agencies will ask the next witnesses to come forward and they are john  chairwoman norton members of the subcommittee my name is john o'keefe i'm the division president for the public division in a minute lana greeting for clark construction group l l c founded in one thousand and six clark construction group is one of the nation and respected providers of construction services with over four point five billion dollars in annual revenue with major projects throughout the united states we perform a full range of construction services from small interior renovations to some of the most visible architectural landmarks in our country projects we are known for in the washington area include the verizon center the u s department of transportation headquarters and the largo metro rail stations here in the washington area our home clarke is committed to working with the community with demonstrated c s s in creating opportunities for small businesses also last year we testified before the subcommittee on federal workforce postal service and the district of columbia on our program to hire x offenders this excess fall program has provided well paying jobs with benefits and training opportunities to exit fender's for the past eight years today i'm pleased to respond to the subcommittee requests that clark addressed the use of stimulus funds provided by the american recovery and reinvestment act of two thousand and nine to date we have been awarded for projects which include a r r a funding three of these projects are in the national capital area the first is the air national guard readiness center area d located at the air dru's air force base the emergency repairs for the settlement at the jefferson memorial seawall and the action of the new u s coast guard headquarters building at the st elizabeth campus the air national guard readiness center area d at andrews air force base was awarded on july thirtieth of this year and allowed for additional work to continue under an existing idea i q contract while completing needing improvements this project has and will continue to allow for six clark employees and about twenty five construction workers to remain on the job daily over the entire ten to eleven months duration of the project emergency repairs for the settlement at the jefferson memorial seawall was just awarded on september eleventh we expect work to begin next month and that project will be completed in about fourteen months this effort should employ about forty people at its peak in six seven months from now these will be new construction jobs as a direct result of the a r a funded project the largest of our stimulus funded projects here in the nation's capital is the u s coast guard headquarters at st elizabeths we continue to support g s a and the national capital planning commission's efforts to ensure that all issues related to this historic property and project are addressed and that construction work can begin as expediently as possible in the meantime we are proceeding with our design work and have received excavation bids and are reviewing them to select that sub contractor once work begins which we expect to occur right after the new year about fifty new jobs will be created on site in the first month in addition hundreds of dump truck operators will also be employed to move approximately one point three million cubic yards of earth by months to about one hundred individuals will be employed directly on the site the number of jobs created rapidly increases as the project continues peaking at about one thousand direct construction workers on site sometime during the second year of this three year long can project it should be noted that we can only project direct jobs the coast guard headquarters will add to the economy i am not an economist and i cannot tell you how many additional jobs might be saved  created due to the manufacturing assembling packaging shipping of concrete steel wire piping and other building materials that are made here in the us that will be shipped to this job however the number must be much much larger than the estimated fifteen hundred direct construction jobs created at the site stimulus or not construction jobs help fuel the american economy creating good paying jobs and creating demand for american goods and services on behalf of on behalf of clark construction group i want to thank you for the opportunity to testify today i'll be happy to answer any questions you may have thank you very much mr o'keefe mr gladly run late construction company good afternoon madam chair norton and the members is a pleasure and an honor to be here today my name is kenneth grandly president and  owner of brownlee construction company run lee is a local family owned general contractor that for over fifty years of specialized renovations restorations and modernizations of large government commercial buildings some of these projects include the main treasury building the executive eisenhower executive office building national archives museum and you're talking about the old post office i renovated that when i was a young man in the late one nine hundred seventy s over the past twenty years grum its local reputation has grown along with a strong national economy there was just a few pauses in the early ninety's and early two thousand but we grew from thirty employees to three hundred employees during that twenty year period in the fall revenues slow for the first time in a decade for the first time in the company history we were forced to lay off loyal employees due to a lack of work we reduced our staff from a high of three hundred to approximately two sixty and had made a list of an additional fifty these were for the general services administration told a hundred sixty million dollars one was for the u s department of agriculture at their south building four for the navy and one for arlington public schools which is that eight dollars where the work thus the nearly two hundred million dollars where the stimulus work awarded to our firm will employ approximately one thousand full time workers for one year two thousand full time workers or for construction crews so that excludes supervisory administrative staff as well as factory workers to fabricate the materials and and the truck drivers in addition this is allowed me the opportunity to continue our robust small business outreach program our apprenticeship program and in recent conversation with the local carpenters apprenticeship program about with the pre apprentice  willing to take jobs that whatever number they hear on the street and it does caution me for the future and where we wind up with stimulus programs been great for growing construction i hearing i am here on behalf of the community services agency which is the nonprofit arm of the metro washington a f l cio which is the area labor federation with one hundred seventy five local unions and about one hundred fifty thousand union members in the area i also would like to just pass on their regards of the president of the labor council josh williams i want to thank you for making dollars available to help us put area residents back to work and to help them reap some of the benefits of the federal stimulus spending and hopefully the private sector economic development which we think will all from some of the spending we're very honored to have won a contract from the general services administration to provide pre apprenticeship training and placement services to two hundred twenty area low income residents which are including women minorities youth and x offenders it's very gratifying to us that this award was made to an entity that's connected with registered union apprenticeship programs all of which are jointly operated labor management programs and they're among the best in the country for the level of training completion rates and continuing career development for workers we also are honored to be partnering with wider opportunities for women who you'll hear from him in a moment and also from covenant house to  who you will hear from in a moment in addition to that we have partnerships with the associated general contractors of d c which represents over five hundred area construction contractors and we have agreements with over thirty community based organizations who will help recruit area residents for the project and work with us on case management for these folks our contract was just awarded effective october one of this year so we are just getting rolling  deliverables include providing pre apprenticeship training to one hundred eighty individuals and we will be including the core curriculum which is something new from the building and construction trades department at the a f l cio which includes safety and health training r and first aid blueprint reading orientation to the construction industry construction math tools and materials and that sort of thing in addition to job readiness training to make folks good candidates for employment with the area contractors we will also be doing some green orientation and training specifically around weather ization and some of the new building materials that will be used in construction as everybody turns green associated general contractors has a rien construction curriculum and they have offered to work with us to implement that with our students we're also going to be providing hands on experience for the students at some of the area construct union construction apprenticeship programs they actually work with tools they work with materials they weld they start learning the different trades that are possible within this industry and start figuring out where they think they might want to end up the classes will be divided into two groups those for eighteen to twenty four year olds will be run at covenant house on mississippi avenue in south east for those twenty five and older they will be held at cement masons local eight ninety one i'm kind of worth avenue ne we will also in addition to the one hundred eighty people that we will be training we will also provide job training job placement and case management services to thirty two young people who come through covenant houses artisans program which is a carpentry training program for young people our first class is scheduled to start on monday we expect to have thirty people over the age of twenty five who are starting that class of that group of thirty about eighty five percent of them at the moment are d c residents and it is a six week training program at the end of the six weeks we will do heavy duty job placement with these folks to ensure that they get employed we will also be following them at thirty sixty ninety days throughout the grant period to ensure that they retain their positions we're very excited about all of the g s a activities that will be going on in the metro washington area including the coast guard homeland security and also the federal government retrofits that will be going on we've already had conversations with g about relaxing possibly their restrictions with security background checks so that we can ensure that x offenders are able to get some of these jobs and they've indicated that they will be somewhat flexible in this area also i believe that clark construction will be providing a trailer or g s a will in conjunction with clark at the seine as campus once the coast guard project gets started and this trailer will have training space for up to twenty people so we hope to be able to use that space not only to expand our training but also to recruit residents from southeast d c to work on those projects we've already been in touch with clark construction and we look forward to working with them closely on helping get jobs for d c residents i'd like to just conclude by thanking you for the leadership role that you've played and helping to get these funds earmarked for the metro washington area and we with our partners are very committed to running a quality in the region the region that made the first call it had to have the highest unemployment and then it was a straight out competitive process and i congratulate you on the on winning one of thank you good afternoon gentlemen norton and members of the subcommittee i am here this afternoon representing a wider opportunities for women or wow which is the national and local d c nonprofit women's organization that works to create pathways to lifelong economic security for america's women and girls well has a long history of providing such pathways to low income women through activities promoting their employment in construction and other nontraditional occupations for women we were actually one of the first organizations in the country in one nine hundred seventy s to provide green jobs training to women through our program at the blue plains wastewater treatment facility in southwest washington as i speak with you today where i was convening the first ever green jobs for women training institute and has brought to to d c for the two day kick off partners from ten states around the country who engage in construction and green work force and economic development for women one of these partners in attendance is in fact the only other contract recipient through this just a funding stream organ trades women and we're also really pissed a be able to say that we've secured stimulus funding for women and nontraditional jobs by the department of labor to develop a green jobs guide for women and related online curriculum so that we can continue to get resources out to the field practitioners and researchers funders etc they can begin to focus their efforts we are especially honored today to be partnering with the c s a and covenant house d c on this new director in an effort in d c as my colleague has provided an excellent program over do for you i will put this training effort into the larger context of targeting low income high barrier job seekers particularly women and how best to serve them using federal stimulus dollars through specific legislation and best practices was experience working nationally and locally to prepare and place women into nontraditional jobs makes clear that targeted dollars for their recruitment hiring and promotion is essential if they are to be on an equal playing field with men even today we see that women represent basically less than five percent of workers in most building and construction sectors we also know that with the targeting of funds like that in the original i see and want to legislation women do enter and succeed in these jobs in much greater numbers when such resources and incentives are in place most importantly about this is that these are the kinds of jobs where low income women without post secondary college degrees can earn enough money to take care of themselves and their families for these reasons while strongly supports your proposal congresswoman in the current transportation bill to make the training of under represented workers mandatory like the transportation equity network why would urge the committee and the transportation  committee and the subcommittee to go further and increase funding for the on the job training and support services line items from one half of one percent to one percent of the funds going out to the field for highway construction transit and rail pro we also urge you to require thirty percent of the work hours large projects be reserved for low income people including ex offenders women and minorities and we also endorse maximizing the use of the registered because struction apprenticeship system and community found benefit agreements in addition we thank you and your colleagues in the house for the passage in june of the climate change bill and it's growing construction career's demonstration project we view this legislation with recruitment and hiring targets as a foundation for more ambitious yet essential mandates to include under represented workers and construction and are actively working with our state partners around the country to help ensure passage of similar legislation including the version that is pending thanks also to a member of the subcommittee and i'm happy to answer any questions how clark and i are using the pre apprenticeship program if they are and i need to know  how to existing projects we have a disproportionate number for example in this region and even in the city you describe some of them twenty two sites for example  intend to integrate the activities specifically at the coast guard project with us the project will have a number of opportunities for apprentices and the large majority of our subcontractors will have registered apprenticeship programs that is now a requirement this started as a requirement is region registered certified apprenticeship program which we asked with the g s nationally for this region is now a nationwide requirement if you want to do business with the government the united states to be for quality in the labor we bring to the table that's correct and  general the davis bacon act requires depending on the trade required number of premises but on average if you average it out over the whole job it's it's basically going to mean there's going to be an apprenticeship position for every four journeyman on  contract that's already been awarded you speak of apprentices and of course that's important here but you recognise that this work involves pretty apprenticeship small business local businesses right there in the community to have access directly to to the job site to understand what work is coming up what are the opportunities for four apprentice positions and a schedule of  when work is going to be happening on the job site and when they can participate in competing for that work so the trailer is going to serve multiple functions but the idea is that we integrate with c s a and try to link up those graduates from the programs we are proud to be members of the local carpenters union since one nine hundred fifty five so we do employer own carpenters and our own apprentices a gentleman who works for me  this year is the secretary of the carpenters training fun carpenters training school and has been in conversations with i don't know the gentleman's name but the gentleman who runs the school for the carpenters  tom barrett and we've talked to him about setting up a pretty apprenticeship program he has told me that he has not had great success in the past but i don't believe that there was a any financial arm behind what they had done in the past shared with me that if we were if he ran ten but he's found in the past running ten kids through the program that he would probably not recommend more than two of them for employment so what i'm hearing today hopefully they will change i was planning on doing this is kind of a pilot program at run leigh with with the carpenters really no expense to the government or g s a on any of our projects fulfil it recognised that working with unions you could go you have got a chance of getting people moved from one job to the other job it had precisely is that i wouldn't want to work on any construction job and let me tell you something else the sons of those who work those jobs don't want to work on them either and i'm sure you and mr o'keefe will att that during the period the boom period of a few years ago you would often find shortages of trained german for the reason that  germany like everybody else they're aging out their baby boomers they got to have good retirement and they're they're gone one of the reasons that it is absolutely imperative that we have a pr program is one that we are going to have those shortages again we need it unless you're going to be importing workers the way we're importing every other thing in this society and so it is that people who were traditionally excluded from the construction trades people who were black and brown and female took advantage of this opportunity to get a foothold into construction trades which specifically excluded them now you will find the construction trades are wide open but if you go through the union which often places train journal men you can expect the german on the ground who are referring people who themselves were trained through a man process to proceed with the pull that is now before us and to pick out people who  n being slapped onto the job simply pick up the cudgels and act as if they were apprentices this happen too often at the ballpark a rigorous clear base a rigorous after if i can be clear actually they told me when i went to yale law school that they no longer said this look to your left and look to your right the person you see any of the sides will not be here next year before i got there i guess that's how i made it no longer two people out that way used the process of the first year to weed people out well guess what because this is work that means if you gotta get it you gotta get up you got to be with with clark and grandly at seven a m or whatever time they say you gotta be there in forty degree weather and ninety degree weather i want people exposed to that i want t on into that and say if you want it bad enough and tested and i think most people don't want it bad enough best a lot of fans would rather sit at a computer where they do and lower level computer work while we have take on that weather take on that hard labor even for high union wages so i don't care if in fact they weed out all but a couple for mr grant to i will he's going to be hel to produce the highest level of work for the federal government we do not play we want these people train but we do not play we deal only in a competitive process with the very best in the business the reason we want certified apprentices is because the best in the business is do not take take chances with fly by night operations that come in and say well we've got some apprentices too so we know the quality we want we know what you need to get it and we need and we know that most of the people miss mukherjee miss call me or who come to your program on not ready to make top dollar put an end this kind of hard labor in this kind of weather so i need to ask you what is your what is the word you use this for courage core curriculum that you mentioned on on page two what is the completion rate i'm not looking for a top completion i'm looking to get some people out there like the acts of vendors the reason that we have have such high return for the exits and that they have been through excuse me have no they know what this is their last chance when they are ready to do whatever it takes on the first to admit that when you've been so that is sitting there you know playing computer games you may not be ready fine but we need to know we have a core curriculum and a screening process that will help us know who wants to do this and who doesn't don't think any of the worst of your arm right which you are can't make it but i need not to have on my projects people who are better than i am and who are ready for this and i need to know from both of you how can you assure me that you're going to weed out the people who they don't know either until they get before you that this is not for them and i need to know how you better begins on monday first i would say that part of the success is trying to assess people at the beginning about their aptitude and interest in doing this kind of work there are a number of different tools that we've used in past programs that are not totally foolproof but that combined with very serious talk with people before they are accepted into the program about what construction is and is not helps give people a realistic idea of what these jobs are it's a tough job to do because i think my cohorts here would agree that if you take any random hundred people maybe five of them would have an interest in aptitude in working in construction part of our job before as a screening process is to make sure people are clear about what these jobs are you have to be at the job at six or seven in the morning it's hot it's cold it's outside it's inside you you know you use the facilities that are there and it's tough work it's physical labor it's hard work but also the positive side it's rewarding work you get to see what you're doing for people who have an interest in working with their hands and seeing their project develop in front of them this is good work secondly we do we we at this point are requiring high school diplomas or g e d s if people are close to getting their g e d s we will help them get them but our experience in the three years we've been doing this kind of training is that those are the people most likely to succeed through this process they also have to be at around eight grade reading or math level you cannot succeed on a job site if you can't read you can't succeed on a job site if your math skills aren't where they should be additionally we drug test people so that's all that all happens before they even start the six week program we then treat the six week program as a job they have to be there on time our classes are going to be starting at eight am they have to be there on time they have to attend they have to participate if they are not doing that by the end of the first week we will start weeding people out but hopefully we will have screened people adequately so we've got folks that are taking this seriously a job in the great beyond the going straight to the broke the to do the work that's going on in the district in the region and you know we don't want one of our objectives of course is to develop good relationships with the contractors we want to send them ready to work people who are going to be successful employees and to the extent that we don't send them people like that we are going to have a successful project so that is our intent the curriculum that the building trades department at the  cio has developed is similar to many other curricula that have already been put out there they have tested it they have gotten input from union contractors and from all of the sixteen building trades unions and it's intended to be a baseline curriculum that meets the needs of all the trades it provides the basic information that people need to be able to be successful apprentices on a construction site the basic background and can match that as it relates to construction blueprint reading osha ten certification c p r first aid tool idea and use actual exposure to some job sites exposure to the different trades and how to get into the various apprenticeship schools and that's what the curriculum is intended to  do the same question sure thanks well that's five out of one hundred who are have the aptitude to be construction workers one of them is a woman and one half of her is going to want to do it so we certainly have our work cut out for us the gender focused components of this new program in partnership with c s a and covenant house are halfway through the six weeks the women who are obviously going to be making it will get paired with individual mentors not just support groups although that will be important too but you know i had a visual mentors experience local trades women who want to who want an individual relationship with our graduates as they're getting ready to graduate and go out there and we'll follow them you know for at least a period of a year after graduation we do currently run support groups from path construction training programs we certainly intend to ramp that up especially with the new program at least quarterly if not more often than that we want to do support groups for the women the case management that we'll be focusing on really by the way the support groups for many of these youngsters who will come out of those circumstances  service is coming house washington i think i know that you're familiar with the covenant house and the wrap around services that we provide to the young people who come through our programs i've actually been a covenant house for over seven years mostly with the artisans program which is a vocational training graeme and woodworking i think that for us a large part of the work that we've done is experience a learning with our youth where they actually have the opportunity in a work like setting to learn the kinds of values and skills that they're going to i want to know about the notion of this call me i says this is very important but women here you know most of never seen a that can have an effect like nothing i can think of asking understanding that miss that many of the youngsters from disadvantaged neighborhoods and that is who you're getting today most of our kids here you get ten thousand dollars if you live in the district of columbia because i bill i have to go to any public university in the united states you get twenty five w the youngsters from covering a house will often be youngsters grow grown up in a household with only women in communities where the men have not been trained to do construction work where there's a great deal of crime so they like ms call me as women have never been faced with a man who's been on a job is it possible case could work so that he can see success is possible with this brother who also just had a high school education and is now making twenty dollars an hour i'm trying my best to break through what i see is  barrier to people even believing that they're ever going to get to making the union wage that journeyman in fact are able to take home so i'm asking you if you don't have it whether you could explore for the youngsters who come out of disadvantaged homes the male youngsters getting them somebody who makes them believe that they can do this work as a somewhat and they are all over the place there are for example african american and latino gentleman who will be hard on these jobs i can only say that again with my experience with the artisans program we had  volunteer who was there for over three years who had spent twenty years an african american who had come up from the south and worked extremely hard to become a carpenter at the white house and the state department and he provided a mentor chef the company today and that's the kind of thing that i feel like i'm talking about somebody who's who kind of like me and has succeeded because they go out in the street they don't think many people like them which is one of the reasons we were able to meetings the case management that we will be doing on this project and have done today is really focused on the issues that a woman will well experience and quite often a single head of household will experience around making sure that the barriers are cleared for you with transportation you've got a realistic fail safe childcare so childcare plan if you need more of our help perhaps than a guy enrolled in the program to get that learners permit and where that driver's license because it's kind of out of the can of your experience that in our case managers they there to help smooth those transitions out so that the women can be adequately supported so that then they can go on and do their thing and be responsible and have a good training effort and then get placed somewhere and be able to stay in that job and our follow up support for any of the graduates of this program will be up to a year so we'll be following them as well and of course with our folks here on the panel with us we'll have some very immediate feedback on on half of our graduates are doing  but we certainly intend a follow up piece after they're placed on the job to assure their job retention appreciate this testimony this is not the my father's generation of the great depression where you  know anything that enables you to live these are people who don't understand why life hasn't been given to them as it was given to others immediately before them and frankly we have given them to understand that we've got to give them t support that's necessary so that they understand that nothing gets accomplished without hard work mr runway you've indicated the contract is thank you indicating there might be some concern about the quality of sub for one i don't really know what the pre apprentice program for one second i heard you talking about training exley and my only concern with that is under twelve i don't believe they'll get on to the federal construction project so it's something they're going to look at very carefully we've had some conversations with the contracting people at g s a and they have indicated that they are prepared to be somewhat flexible and in the past ones were awarded a job people call us you know what do we need to do to get the job and we say well we awarded it yesterday what we're finding now is that it doesn't matter what you could tell them any number and they said oh if you called me back i would beat that number the numbers are getting driven down dramatically i'm seeing projects that i think are coming in thirty thirty percent below the budgets i know that's occurred at the corps of engineers also and there's going to be a price to pay at the end we used to get about one letter quarter from some law firm looking for money for one of our subcontractors we haven't changed the way we do business and i say we get one a week now so there's such an enormous pressure on the sub contracting community their prices they don't know how to keep their employees so they're   confirm what mr grantly has just said we are seeing the same things we suspect that in some cases in many cases sub contractors are bidding numbers below their cost in an effort to keep their company alive and to keep their core employees employed we've certainly i mean and is evidenced by the national i think it's near seventeen percent unemployment in the construction industry a national basis to a large extent that's that's the result of a much significantly reduced private sector construction which is you know it's been a big part of the local construction market here and it's and it's shrunk significantly so what you have is the same number of sub contractors and contractors now competing for much less work what happens  because it's similar to grindingly clark most of our work i think it is competitively we compete for the work so what happens on bid day is these numbers are coming in you really have to evaluate whether you think that the contract the sub contractors can perform that work because if you just cobble together all the low numbers and you put that in there you're at risk because once we put that number and we are committed to that number ok whether they can you a mystic runway because of your expertise we'll have a sense of what the cost yes to the sub is yes but but you also have to look at what your competitors are doing because mr grandly is going to is going to use some of these numbers so you know you can't just say well they can't do it i can't take that number if you do that we will not be low we will not get the work so it's a fine line we're walking between trying to select the right subcontractors at what we think are the right numbers but being being right on the edge there to be competitive to be able to be low t the certified building i guess they go with certified silver which which the u s coast guard is a builder is what they are building that's correct that's correct and then there's gold and platinum we have constructed all levels of lead certification buildings and i guess that the bulk of that work has to be done in the design phase ok very little of it has to do with with how it's being built it's how it's being designed well but that goes to cost yes it does yes it does the higher the level you go the more stringent are the requirements for energy efficient why would anybody building in two thousand building in two thousand and four a headquarters is the headquarters not be there for eternity we're not building another headquarters for anybody why would anybody want to want to build without getting the maximum energy savings for the taxpayers by investing some more in the design in order to guarantee less and energy costs of the taxpayers down the line to answer that question directly there is a tradeoff of first cost versus the long term sustainability and the cost for the long term but that could mean that let's say twenty years and we're going in there trying to add something that will bring down the cost of back or it's very difficult to come back after the fact and make adjustments without a whole scale redesign at all if we don't do it now is paying for whatever is the cost of energy wherever it goes yeah i will i would like to make one note here although we are obligated for the silver certification we are in fact attempting to get the gold certification all of that product tell me how you're able to do that this is a damn what i differences ok this is a design build procurement so we have control over the design and the construction of the project and through that control we're able to work on these elements the mechanical systems the water use systems and so on and we have made a commitment in house to ourselves that we're going to attempt to get gold on this g s a is been working with us on this and this is something we'd like to try to do the current design and the current program called for silver but we are going to try to one up that that that's amazing to hear that that that the contractor can him self perhaps improve on the aspiration of the agency and i would encourage you to do so i can tell you what it would mean to the federal government what we're able to do in the future we believe that even in my time on the committee when we began to look at energy savings water savings where it was more difficult to calculate in dollars and cents it's called anymore you can calculate in dollars and cents even the average home owner can do that today and there's no question that this can be done so for us not to maximize this once in my life opportunity we never going back we never going to improve on it well not to maximize on and they have more needs to be done and yes they need to talk to me because i'm certainly willing to talk to the appropriators as we go through this prospect the president is now in investments that have no pay out while he is president of the united states all of this energy conservation than have a dime's worth of difference to him in terms of anything he's going to be able to show as i know that we are able to advocate platinum when we are building the largest construction in the united states of america today and the largest in the history of the amedee to metro and this is this is that have been a but is not down the street the way many of our buildings are which at least let me ask you what else goes into platinum for goodness sakes silver and those are all centered around use of local materials building techniques and the design of the energy systems in any in any facility such as water usage for example if you can put in low flow toilets and have a rainwater collection cistern system that uses that rainwater those are the sorts of things that you can incorporate into a project to to reach the that that almost no cost something run off may cost a little more but it may be well worth it given the fact that water saving is part of what we're talking about who i am interested business plan connected with the work you are doing in the stimulus funding for the federal government all of our federal projects that are small business whether they're in the stimulus package or not number you have hired and the number you intend to hire as you foresee at the moment like those apprentices for both our own workforce as well as the sub contractors in iraq i would please that you contracting work i would also like from each of you mr grandly and mr o'keefe a list of the projects you are undertaking throughout the united states that job we want to reach out to the existing community and particularly you mister are for example building for the first time in history united states on the other side of the anacostia and the lowest income community in the district of columbia imagine how you go and be watched like no contractors ever been watched before in a period such as this and not only by me but especially by the community from all i understand from g s a personnel who have been working with you we have no dissatisfaction with what is happening now but do understand that as we put questions before you we feel it incumbent upon ourselves to do so because of the large difference between ourselves and other committees because this money is under direct supervision and not under the supervision of the state because this is a large amount of money at one time to do work with that his head and we've got to be accountable for it thank you very much for a very important testimony today and this hearing is