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57–060 PDF 2010

BUILDING OUR WAY OUT OF THE 

RECESSION: GSA’S 2011 

CONSTRUCTION, MODERNIZATION, 

AND LEASING PROGRAM 

(111–121) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

June 17, 2010 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

JOHN GARAMENDI, California 

HANK JOHNSON, Georgia 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

TOM GRAVES, Georgia 

(II) 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chair 

BETSY MARKEY, Colorado 

MICHAEL H. MICHAUD, Maine 

HEATH SHULER, North Carolina 

RUSS CARNAHAN, Missouri 

TIMOTHY J. WALZ, Minnesota 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania, 

Vice Chair 

DONNA F. EDWARDS, Maryland 

THOMAS S. P. PERRIELLO, Virginia 

HANK JOHNSON, Georgia 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

MARIO DIAZ-BALART, Florida 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

MARY FALLIN, Oklahoma 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

VACANCY 

(III) 

(V) 

CONTENTS Page 

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

TESTIMONY 

Foley, David, Deputy Commissioner, Public Buildings Service, U.S. General 

Services Administration ...................................................................................... 39 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Norton, Eleanor Holmes, of the District of Columbia ........................................... 64 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Foley, David ............................................................................................................. 68 

SUBMISSIONS FOR THE RECORD 

Edwards, Hon. Donna F., a Representative in Congress from the State of 

Maryland, ‘‘GSA Leasing in the Greater Washington Metropolitan Region, 

a report by the National Center for Smart Growth Research and Education 

and the Master’s of Real Estate Development Program at the University 

of Maryland’’ ......................................................................................................... 8 

Foley, David, Deputy Commissioner, Public Buildings Service, U.S. General 

Services Administration: .....................................................................................

Response to request for information from Hon. Norton, a Representative in Congress from the District of Columbia: .....................................

Questions for the Record ....................................................................... 74 

Regarding P.V. McNamara FBI Annex ................................................ 59 

Supplemental Information .................................................................... 83 

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(1) 

BUILDING OUR WAY OUT OF THE RECESSION: 

GSA’S 2011 CONSTRUCTION, MODERNIZATION AND LEASING PROGRAM 

Thursday, June 17, 2010 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:13 a.m., in room 

2167, Rayburn House Office Building, Hon. Eleanor Holmes Norton 

[chairman of the Subcommittee] presiding. 

Ms. NORTON. I apologize for the delay. The hearing is open. The 

Ranking Member will be here shortly but has indicated that he has 

no objection to our proceeding. 

I want to welcome all to today’s hearing entitled Building Our 

Way Out of the Recession: GSA’s 2011 Construction, Modernization 

and Leasing Program, an examination of the General Service Administration’s Capital Investment and Leasing Program for fiscal 

year 2011 with its prospectus requests. 

Last year, we noted that the fiscal year 2010 request was limited 

in size and in scope, reflecting the unprecedented infusion of funds 

for construction in the American Recovery and Reinvestment Act, 

or ARRA, sometimes called stimulus legislation. The fiscal year 

2011 request reflects a more robust and comprehensive approach to 

managing the real estate portfolio of GSA. 

GSA’s Capital Investment and Leasing Program, as well as its 

ARRA funds, enable GSA to manage the general purpose real estate needs of the Federal Government. ARRA funding serves the 

additional and important purpose of putting Americans back to 

work. We have held regular hearings to ensure that GSA obligates 

ARRA funds as quickly as possible. Unlike other stimulus programs, GSA is no pass-through but is solely responsible for executing the contracts expeditiously and getting America back to 

work soon. 

As of May 14, 2010, GSA indicated it had obligated over $4.1 billion to more than 500 companies and outlaid over $367 million of 

ARRA funding. While obligating approximately 80 percent of its 

ARRA funding is impressive, the Subcommittee is mindful that 

U.S. unemployment hovers just below 10 percent and the mandate 

to make haste so that businesses can hire new and retain current 

employees is still in order. 

2 

ARRA has clearly helped stimulate an economic recovery, but the 

economy, it found, was shattered, so full economic recovery will require more coaxing to stimulate a more balanced economy with 

sensible regulations to prevent another collapse. 

The GSA Capital Investment and Leasing Program provides another opportunity to support our ongoing recovery. The largest 

amount in the request is $1.4 billion for construction, repair, and 

alteration of projects. 

The fiscal year 2010 prospectus requests are categorized into four 

main groups: repair and alteration projects, design and site acquisition projects, construction and building acquisition projects, and 

leases. I am going to submit for the record what those projects are, 

because there is a long list of them, and go on to the meat of my 

comments. 

Ms. NORTON. We must alert GSA again that the Subcommittee 

will hold GSA accountable for carrying out the provisions of all 

prospectuses authorized by Congress, particularly in light of the 

budget deficit and the requirements of PAYGO spending. GSA 

must not only work collaboratively with the private sector in reducing the costs of leasing and construction, GSA also must be far 

more vigorous and vigilant in using the role assigned to the agency 

by Congress to be the government’s realtor, not merely an adviser 

to Federal agencies. Today, this means indicating to agencies what 

is affordable and cutting costs across the board, both vocation and 

transaction costs. 

In the past, developers and Members of Congress have reported 

to the Subcommittee tactics used in solicitations that steer competitors away from the full and open competition mandated by statute. 

In one instance, the GSA listed amenities sought by an agency that 

included places of worship, a hardware store, and a hair saloon. 

Despite a requirement in the prospectus that changes be reported 

to the Subcommittee, we learned of these changes only from a long 

letter, complete with documentation, from a developer who sought 

to compete. 

GSA had violated the language of the prospectus that required 

changes to the prospectus to be reported to Congress by calling its 

changes ‘‘amendments,’’ as if amendments do not change a prospectus. The prospectus was delayed because the offending amendment to the solicitation had to be withdrawn. 

Reports of this kind require this Subcommittee to be vigilant 

with close oversight, even after the prospectus is approved. We intend to write the prospectuses accordingly and to make changes in 

law as part of our reauthorization of provisions of GSA’s statute 

itself. This Subcommittee will not tolerate the use of pretextual 

grounds to evade full competition or to direct lease procurements 

to pre-selected areas of a region. 

We are pleased, however, that there is genuine opportunity for 

savings in the leasing program. We intend to press GSA to continue to become more aggressive and efficient in using its market 

position to identify cost savings when leasing from the private sector. With a portfolio that contains 197 million square feet of lease 

space, the potential for savings is outstanding. 

This Subcommittee expects GSA to get the best possible deal for 

the Federal Government when identifying local office space for FedVerDate Aug 31 2005 17:33 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 P:\DOCS\57060.0 KAYLA
3 

eral agencies by using appropriately delineated areas and writing 

procurements that carry out congressional intent as expressed in 

the prospectus. GSA must refine its procedures to provide the maximum benefit to the taxpayer by holding down costs far more than 

the agency has done in the past. 

The fiscal year 2011 capital program request, coming in the wake 

of the more than $5 billion in projects authorized and appropriated 

through ARRA, would suggest that GSA still continues to need significant capital resources to maintain its inventory of owned properties and to expand that inconvenient through new building. 

The largest amount in this package is for continued construction 

of the DHS headquarters in Ward 8 of the District of Columbia. 

The co-location of the principal headquarters of DHS on the federally owned St. Elizabeths campus not only expands the portfolio of 

federally owned real estate but also creates great value for the taxpayer by avoiding some of the highest commercial leasing costs in 

the country here in this region. 

The funds for the DHS headquarters is for the construction of 4.5 

million gross square feet of general purpose space, exclusive of 

parking. This is an appreciable amount of construction, but GSA 

has estimated that it will result in savings of over $500 million on 

a 30-year present-value basis in terms of the avoidance of leasing 

space. 

Moreover, ownership of office space in the District also benefits 

GSA’s Federal Building Fund importantly. Because by charging 

commercial equivalent rate to the tenant agencies, GSA will be 

able to earn higher rents in higher-cost regions, thereby bolstering 

the Federal Building Fund. 

We also note, as with last year’s proposal to purchase Columbia 

Plaza, GSA is proposing to purchase another leased building, this 

one in Martinsburg, West Virginia. Without commenting on the 

merits of this specific case because we have not yet had time to examine it, we welcome as a general principle opportunities for GSA 

to increase its portfolio of owned properties on favorable economic 

terms through the unilateral right to exercise a fixed-price purchase option on a leased building. We are particularly interested in 

knowing how GSA can expand the frequency of such purchases. 

Finally, we welcome GSA’s input as we take up through new legislation the challenges of rebuilding the exhausted Federal Building Fund and of rebuilding the Public Buildings Service itself, 

which has been effectively divested of meaningful regulatory authority over agencies for space utilization and efficient space management. 

President Obama’s June 10th, 2010, memorandum on efficient 

management of real estate underscores the need for GSA as the 

central space management agency of the government to step up to 

a leadership role, not merely as a trusted advisor, in this area requiring very great expertise, where only GSA has the expertise and 

the agencies lack it altogether. 

We look forward to addressing these issues and to hearing the 

testimony of today’s witness. 

I am very pleased to welcome comments from the Ranking Member. 

4 

Mr. DIAZ-BALART. Thank you very much, Madam Chairwoman. 

Thank you for having this very important hearing. 

I want to thank the witness for being here. I want to make sure 

that you understand we are not shooting the messenger, but you 

are the messenger, OK? 

So, with that caveat, obviously, the GSA’s fiscal year program requests approval for seven alteration and modernization projections, 

three design projects, five construction and acquisition projects, 

and five leases. 

Now, Madam Chairwoman, I know this is not going to surprise 

you. I am frankly just shocked—and, again, you and I tend to 

speak with one voice on a lot of these issues. I am, frankly, just 

shocked by the tremendous—I can’t say this diplomatically, I 

guess—waste of taxpayer dollars and the gross mismanagement of 

the Federal Building Fund that this list of projects represents. 

This Subcommittee under the leadership of our chairwoman has 

had numerous hearings, hearing after hearing, about how courthouses have been overbuilt and the cost of leasing as opposed to 

ownership that is bankrupting the Federal Building Fund. And I 

have to again take this opportunity to once again comment on and 

commend our chairwoman for her leadership on those issues, and 

she has not been shy about these issues. So we know that that is 

bankrupting the Federal Building Fund, and yet the administration proposes a quarter billion dollars to renovate a half-empty 

courthouse and half a billion dollars to lease an agency headquarters. 

Sometimes, Madam Chairwoman, I think you and I maybe are 

speaking in a vacuum. Is nobody there listening? I am very concerned about some of these projects, and I simply don’t understand 

how GSA can realistically expect for Congress to approve them; 

and, gosh, I hope Congress doesn’t approve them. 

For example, GSA proposed spending—I am going to use one example, but it could have been Miami. It could have been a number 

of different places. But just for example, GSA proposed spending 

$288 million—I want to repeat that—$288 million to renovate the 

600,000 square foot Prettyman Courthouse. 

Now, you will recall from our recent hearings that GAO singled 

out this specific courthouse complex as one of the most overbuilt 

and over budget in the entire country. Furthermore, in 2000, the 

courts projected there would be 49 judges in both the Prettyman 

building and its annex, but today there are only 33 judges. About 

400 people, just 400 people, work in that building, which means— 

again, it doesn’t take rocket science—which means there is about 

1,500 gross square feet of building space for each employee. 

Now, frankly, many families live in smaller areas than that. I 

think that bears repeating. About 400 people, which means that 

there are about 1,500 gross square feet of building space for each 

Federal employee in that building. I don’t have a word to describe 

that, I just don’t, because saying it is immoral and unacceptable 

just doesn’t seem strong enough. 

What is even more astonishing is the renovation of this courthouse is a priority project now on GSA’s 5-year capital plan. Did 

the GSA not look at the reports? Did the GSA not spend time with 

us to understand? Did GSA not look at these numbers? I mean, 

5 

how the administration can justify spending so much money on a 

half-empty building that will not generate any extra revenue for 

the Federal Building Fund that is again almost going bankrupt is 

inconceivable. 

So while GSA wants to pour even more money into an overbuilt 

courthouse, GSA is proposing a new 427,000 square foot lease for 

the Federal Trade Commission headquarters, further damaging the 

bankruptcy issue that I already mentioned and going against everything that we have been talking about, particularly this chairwoman has been fighting for and working on, and that, frankly, the 

taxpayers demand. 

So in hearing after hearing, Members of this Committee have repeatedly expressed concern about the overuse of expensive leases 

to meet Federal space needs, again especially when we are dealing 

with headquarters space. And again we have seen this in study 

after study that GAO has warned us about the cost of leasing to 

meet long-term space needs, but here GSA continues the same 

practice. 

But, again, GSA now proposes doubling FTC’s lease space, doubling FTC’s lease space. I am surprised the chairwoman hasn’t just 

exploded right now from seeing this, knowing of her concern for the 

taxpayer on that issue alone. 

So, instead of consolidating the FTC headquarters into one government-owned location, FTC would operate in at least two separate locations. That really makes a lot of sense. In addition, this 

proposal would move some operations out of government-owned 

space into leased space. Again, what planet are we living on here? 

So, on the one hand, GSA is proposing constant leases for FTC 

headquarters; and, on the other hand, it wants to spend nearly 

$300 million to renovate a building that is, frankly, mostly empty, 

that is barely being used. 

Out of the thousands of buildings in the Federal inventory on the 

space needs identified for the FTC, the fact that the renovation of 

the Prettyman building would be at the top of GSA’s list just raises 

incredible questions about GSA’s management of the Federal 

Building Fund. 

Again, what planet are they living on? And I am not referring 

to you, and I want to make that very clear. But I am, frankly, just 

in shock. What is it? It is taxpayers’ money so it doesn’t matter? 

So it really doesn’t matter? We can just irresponsibly spend it and 

blow it and continue to spend it and blow it? Even though we have 

reports, report after report after report expressing this, showing 

this, proving this, and yet we get from GSA more of the same and 

frankly even worse? 

So I am very concerned about how GSA is prioritizing its projects 

and whether some of them make any sense at all and whether 

there is any concern for the taxpayer when we look at these proposals. 

So I want to thank David Foley, the Deputy Commissioner—he 

is a good man—the Deputy Commissioner of the Public Buildings 

Service, for being here today; and I look forward to hearing from 

him on these important issues. But, again, I will mention it three 

times, you are a good man, you are a decent man, you work hard, 

but this proposal from GSA frankly is grossly irresponsible. 

6 

Thank you, Madam Chairwoman. 

Ms. NORTON. I very much thank you for those remarks. Indeed, 

I will follow up during the question period, because I am absolutely 

in accord with what the Ranking Member has said. As he said, 

there just is no daylight between us, especially when it comes to 

costs that cannot be justified. 

I want to indicate my deep concern at how late this leasing program has even come to the Congress, but I will put that aside until 

I hear from the other Members of the Committee. 

I want to ask Mr. Michaud of Maine if he has any comments. 

Mr. MICHAUD. First of all, I want to thank you, Madam Chairman, Mr. Ranking Member, for having this very important hearing 

on how we are going to build our way out of the recession. I think 

GSA definitely can have a role in helping, especially when you look 

at the high areas of unemployment, particularly in the construction 

area. I, too, have some concerns that were addressed earlier by 

both the Chairand Ranking Member. 

I look forward to hearing your testimony this morning, and I will 

save the rest of my remarks, Madam Chair, as well as my questions, after Mr. Foley has a chance to give his testimony today. I 

look forward to working with you. 

With that, I yield back the balance of my time. 

Ms. NORTON. Thank you, Mr. Michaud. 

The gentlelady from Maryland, Ms. Edwards. 

Ms. EDWARDS. Thank you, Madam Chairwoman; and, to my colleagues, I think this is a really important hearing. I actually can’t 

think of a better topic or more important one than that. Because 

while we have not officially approved what GSA is doing for 2010 

because many of us on this Subcommittee have raised significant 

questions with some of GSA’s leasing policies, I do think it is essential that our committee, our Subcommittee, with its oversight authority, begin to look very critically at GSA’s construction and leasing program going forward. 

Now, just a couple of weeks ago, Mr. Morris was here from GSA 

and was unable to answer any number of the questions that I put 

forward about how GSA proceeds with its leases, what is the process, what is the transparency of the process. I had hoped to hear 

today from Mr. Peck, but, Mr. Foley, I thank you for being here, 

and I trust that you will be poised to answer some of these questions today as well, because I intend to repeat them. I know that 

we have submitted questions to you, and I am looking forward to 

getting actual answers back. 

As you know, I represent the Fourth Congressional District in 

Maryland, which comprises both Prince George’s and Montgomery 

Counties in Maryland. We are located right here outside of Washington, D.C., in the capital region. 

Unfortunately, these counties, as documented by GSA, the University of Maryland, and other independent studies, including a 

study from information given to GSA that was just in the Washington Post a couple of weeks ago, these counties receive far less 

consideration for prime Federal leases than any other jurisdictions 

in the metropolitan area. 

Prince George’s County in particular receives the fewest higherclass lease space compared to any other jurisdiction in the region 

7 

when it comes to GSA property leasing. I raised this issue at the 

last hearing. 

A couple of years ago, as I said, the University of Maryland 

study showed that 10.1 percent of GSA’s leases are within Prince 

George’s County’s borders. Moreover, the leases represent only 7.6 

percent of the square feet leased by GSA in the metropolitan region 

and only 4.1 percent of the total rent. Even more striking is the 

fact that only 3.9 percent of the office space leased by GSA is in 

Prince George’s County. The study from the University of Maryland goes on to say, ‘‘However, in Prince George’s County, warehouses make up 49.4 percent of GSA leases.’’ 

Again, this is from information also supplied by the GSA even 

just a couple of weeks ago as appeared in the paper. I would like 

to see that submitted to us for our record from GSA, but I was 

happy to read it in the Washington Post. 

[The information follows:] 

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Ms. EDWARDS. I spent the last couple of years in office trying to 

understand why these disparities are present. The county has more 

Metro stops than any other county in the region, arguing for the 

consideration that others in this Committee have raised that if you 

have Metro stops and it is a priority to get people on and around 

transit and consolidating leases, why is it then that there is a lack 

of leasing in this region, or even building, in the areas where that 

is appropriate? 

Every time a new lease opportunity comes up, GSA has some 

reason unknown at the beginning to not lease in Prince George’s 

County or reason to release a prospectus in such a way that seems 

to favor other jurisdictions. And indeed in some of those instances 

it is not even clear what the process is for changing the prospectus 

on simple things, lowering ceiling heights, which seems so ridiculous that you could make a mistake like that twice in two separate 

leases and then explain it away as a typographical error when it 

has been done by two separate teams and included in two separate 

proposals for a prospectus. I don’t understand. If we have got that 

kind of inefficiency going on in GSA, then we have a bigger problem than we think. 

I would say also, as I close here, that these questions are really 

not unique to the Washington, D.C., metropolitan area. I think that 

these are considerations for a number of metropolitan areas where 

there has to be both transparency and fairness of process, treating 

an entire region as a region. 

When we do transportation funding and policy and any number 

of other policies, we look at regions. There are a dozen major metropolitan and regions around this country. If we have that kind of 

disparity within a region, then it creates the kind of inequity that 

we see in this leasing program. So I would like some explanations 

about process, about how costs are determined within the region, 

and about how changes are made so it is transparent to the public 

and to those of us on this committee. 

Then, lastly, Mr. Foley, I think it is really imperative that GSA 

understands that its customer is not an agency, its customer is not 

a bureaucrat. The customer for GSA, who ought to get the benefit 

of the best bargain, is the taxpayer, and if your process in leasing 

or building doesn’t benefit the taxpayer, then GSA is not doing its 

job. 

With that, I yield back. 

Ms. NORTON. I thank the gentlelady for yielding back, and I 

thank her for her comments. I join her in those comments. 

Mr. Foley, would you like to say for the record where those who 

are supposed to be here are and why they are not here? 

Mr. FOLEY. Certainly. I am speaking on behalf of the agency and 

for Commissioner Peck. He is actually at a meeting at the White 

House complex today regarding the Presidential memo that you 

mentioned earlier in GSA’s leadership role with the Federal Real 

Property Council and the 23 landholding agencies. He had to go to 

that meeting and is chairing that as well. We provide direction to 

the agencies and are developing the path forward to implement 

that memorandum. 

Ms. NORTON. We will regard this as an excused absence. 

Mr. Foley, you may proceed. 

39 

STATEMENT OF DAVID FOLEY, DEPUTY COMMISSIONER, PUBLIC BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION 

Mr. FOLEY. Thank you. 

Good morning, Madam Chair, Ranking Member Diaz-Balart, and 

Members of the Subcommittee. Thank you for inviting me here 

today to discuss GSA’s fiscal year 2011 Capital Investment and 

Leasing Program. I am pleased to be here today to request the Subcommittee’s authorization for the projects in our capital program. 

The Public Buildings Service is one of the largest and most diversified public real estate organizations in the world. Our mission is 

to provide a superior workplace for Federal agencies at an economical cost to the American taxpayer. 

We continue to demonstrate strong operational performance, surpassing many private sector benchmarks. We are also becoming a 

green proving ground for new and innovative technologies and sustainability methods. These efforts enable PBS to reduce the Federal Government’s carbon footprint and optimize energy savings. 

The projects in the fiscal year 2011 program were selected based 

upon a number of criteria, including the urgency of the requirement, priorities of the tenant agency, physical condition of the 

asset, high-performance green building features, timing and execution, improving asset utilization, return on investment and payback, avoidance of lease costs, and historical significance. 

PBS is requesting a repairs and alterations program of $703 million to enable GSA to maintain and improve these properties so 

that they continue to meet the mission needs of our customer agencies. Each of these projects has a continuing Federal need and is 

capable of being economically self-sufficient. 

Through the Recovery Act, funding for repairs and alterations 

enabled us to reduce our repair and alterations need, but clearly 

there continues to be a great additional need, and this is one of our 

top priorities. 

The highlights of GSA’s fiscal year 2011 repair and alterations 

program include $335 million for basic repairs and alterations, 

$321 million for full scope and major repairs and alterations, $120 

million for fire prevention programs, $20 million for energy and 

water retrofit and conservation measures, and $7 million for 

wellness and fitness programs. 

The program includes the following proposed major building 

modernizations: $66 million for the Major General Emmett Bean 

Federal Center in Indianapolis, Indiana; $11 million for the James 

C. Corman Federal Building in Van Nuys, California; $28 million 

for the Daniel Patrick Moynihan U.S. Courthouse in New York; 

and $114 million for the Frank Hagel Federal Building in Richmond, California. 

These funds also provide designs for the following buildings: $6 

million for the West Wing at the White House complex for phase 

two construction; $51 million for the FBI Federal Building in Los 

Angeles, California; $22 million for the Edward J. Schwartz U.S. 

Courthouse and Federal Building in San Diego, California and support of an ICE co-location project; and $23 million for the E. Barrett Prettyman U.S. Courthouse in Washington, DC. 

40 

The fiscal year 2011 capital program includes funding to improve 

PBS’s buildings with additional greening technologies and repairs 

and alterations to increase energy savings. These improvements 

will help GSA meet the goals set forth in the Energy Independence 

and Security Act of 2007 and Executive Order 13514. To meet 

these goals, PBS is requesting $20 million for the implementation 

of energy and water retrofit conservation projects and another $20 

million for the fire prevention program. PBS is also dedicating in 

support of the administration’s new health and wellness initiatives 

$7 million to our wellness and fitness program to upgrade, replace, 

and improve space within government-owned buildings in support 

of employee wellness. 

We are also requesting a construction and acquisition of facilities program of $676 million. This request includes funding for site acquisition, design, infrastructure, construction, and the management 

and inspection of 10 Federal facilities. PBS traditionally pursues 

construction and ownership solutions for special purpose and 

unique facilities that are not readily available in the real estate 

market. In addition, we recommend new construction where there 

is a long-term need in a given locality. 

PBS’s fiscal year ’11 construction program is focused on urgent 

customer priorities ranging from the consolidation of governmentcritical defense organizations, laboratories for protecting the public 

health, and land ports of entry to secure our borders. The program includes $380 million for the St. Elizabeths DHS 

consolidation, West Campus Infrastructure, Historic Preservation 

Mitigation and Highway Interchange in Washington, D.C.; $174 

million for the FDA consolidation at White Oak in Maryland; $8 

million for the Denver Federal Center remediation; $86 million for 

the design and/or construction of two land ports of entry in 

Calexico, California, and Calais, Maine; $4 million for the design 

of an automotive maintenance and secured parking garage at the 

P.V. McNamara Federal Building in Detroit; and $25 million for 

the acquisition of the IRS Annex Building in Martinsburg, West 

Virginia. 

In addition to owned space, GSA has entered into almost 9,000 

private sector leases in 8,000 locations nationwide to meet the 

space requirements of tenant agencies. We are pleased that the vacant space within our leased inventory has been at or below 1.5 

percent for the last 5 years, well below national industry averages 

of over 15 percent. 

We strive to keep leasing costs at or below market levels and 

have developed a comprehensive strategy to do so, including the 

use of industry benchmarks and market surveys to comparison 

shop for best value for the agencies that occupy our space and the 

taxpayers. 

In addition to the fiscal year 2011 leasing program, PBS is also 

seeking authorization for the balance of our fiscal year 2010 program. PBS continues to work with agencies to help them shape 

their requirements to meet mission needs while improving operational efficiencies and space utilization to minimize costs for the 

American taxpayer. We also work with our stakeholders to capitalize the requirements of our aging inventory and growing and increasingly specialized needs of our customers. 

41 

Finally, PBS strives to reduce our asset liability by concentrating 

reinvestment in core assets and disposing of unneeded and underutilized properties. 

Madam Chair, Ranking Member Diaz-Balart, this concludes my 

prepared statement. I will be pleased to answer any question you 

or any other Member of the Subcommittee may have about our proposed fiscal year 2011 Capital Investment and Leasing Program. 

Thank you. 

Ms. NORTON. Thank you very much, Mr. Foley. 

The prospectus, upon inspection, is probably going to be further 

delayed in approval because so many questions are raised by what 

the prospectus proposes. 

First let me indicate that surely you are aware that, by law, authorizations of this committee, and for that matter of the Senate 

Environmental and Public Works Committee, are to precede appropriations for GSA’s projects. What is the reason we are receiving 

this package, I don’t know, about 4 months after the President’s 

budget? This is worse than tardiness. It is disrespect for the committee. 

Mr. FOLEY. Madam Chair, I do have to apologize for the lateness 

of the program getting to you and the committee. We did have 

some issues with final clearance of the prospectus package, and we 

are striving to ensure that that doesn’t happen. 

Ms. NORTON. Final clearance in your agency? 

Mr. FOLEY. Through both the administration and the agency. We 

are working on a new process so that that does not happen next 

year, and our goal is to get it up immediately following the President’s budget for fiscal year 2012. We recognize that this puts you 

in a bind, and we strive—— 

Ms. NORTON. It puts you in a bind, because we are not going to 

rubber-stamp any prospectus, and we are not going to authorize it, 

and we are going to ask the Appropriations Committee to delay it. 

So we are not in a bind, but you certainly are in a bind, and you 

will have to make haste to in fact respond to the questions that 

have been raised by this tardy submission. 

For example, 2 weeks ago, we requested information on what the 

Ranking Member raised about the Prettyman Courthouse. That is 

a courthouse that has a relatively new—it must be within the last 

5 or 10 years—a beautiful new annex. But it is one of the courthouses that was cited for being overbuilt. I am lost to understand 

why, given—what is it—an $8 billion backlog of courthouses to be 

built, I am astonished that you want to rehabilitate a courthouse 

that is underutilized as a priority. Explain yourself. 

Mr. FOLEY. Certainly. We do understand that there were a number of questions, and again I apologize for the delay—— 

Ms. NORTON. You can answer them right now. 

Mr. FOLEY. I fully intend to answer. 

This project does go back a number of years. In fact, the design 

for the Bryant Annex to the Prettyman Courthouse was done in 

1997, long before any of the courtroom sharing models adopted by 

the Administrative Office of the Courts and GSA. At the time the 

Annex was designed, GSA and the courts attempted to build to the 

full capacity of the site. 

42 

GSA and the courts, we both recognized, and I think in the hearing last week, that there were issues with projections and the number of judges. We are working closely together to address that moving forward. In fact, Commissioner Peck is actually going to be 

meeting with the Court Space and Facilities Committee tomorrow 

to discuss this very issue. 

However, that doesn’t diminish the need for this critical project. 

This is a busy court facility with a number of high-profile cases. 

The project is mainly a building systems project. It is not designed 

to build out additional courtrooms. This is an historic asset that 

the government will hold onto for decades; and the majority of the 

construction dollars are for exterior construction, plumbing and mechanical, fire protection, electrical, and abatement. 

Ms. NORTON. Mr. Foley, you could run that down for dozens of 

courthouses in the United States that have had no recent additions 

the way the courthouse here has. I hope you don’t think that the 

fact it is here makes a dime’s worth of difference to me. We will 

need answers other than ‘‘it is needed,’’ particularly since it is on 

the hit list in the first place as an overbuilt courthouse. 

Is it being fully utilized? 

Mr. FOLEY. I believe that there are underutilized courtrooms in 

the facility. However, I think it is important to point out that there 

are only nine courtrooms in the annex which was recently completed. The majority of the courtrooms are actually in the old facility. I believe there are—— 

Ms. NORTON. There are some courtrooms in the Annex, and there 

are some in the old facility. Is anybody being pushed out into the 

street, Mr. Foley? 

Mr. FOLEY. I don’t believe at this time. 

Ms. NORTON. Is any sharing of courtrooms going on in the 

Prettyman Courthouse? 

Mr. FOLEY. I believe there actually is some sharing going on, in 

part as we move folks around in preparation for the modernization 

of this facility. 

Ms. NORTON. Well, you know, they better stay put. Because, as 

it stands now, we are not requesting to approve the Prettyman 

Courthouse. 

You have to get those answers to us. And you know what? We 

need those answers before the hearing. Because if you think getting answers after a hearing means we say, OK, it is OK—what 

was disturbing is to hear you tell us when the courthouse was approved in 1997. Duh? So once you approve it, what you are telling 

me is GSA never looks at it again, but it just keeps on going. 

It seems to me a review was in order here before pushing up to 

the top a high-profile courthouse that happens to be in the Nation’s 

capital. I don’t know why we ought to be more open to this courthouse than others. If you came forward with a comparison between 

its needs and the needs of others, perhaps we could understand. 

But the Federal Government looks foolish if it in fact proceeds now 

to modernize a courthouse that it has just given an addition to 

without any indication of the need compared with other courthouses in the United States. 

We are not going to do it. The burden is on you. Right now, the 

burden hasn’t been met. The Prettyman Courthouse is not in your 

43 

prospectus, unless you can show us that that courthouse needs renovation more than any other courthouse in the United States that 

is not on the list. If that is not the rule, then the President’s memorandum isn’t worth the paper it is written on. 

Now, we can’t ignore the President’s memorandum, and I wish 

you wouldn’t. I regard this as nothing less than ignoring what the 

President has already said, much less what he is going to tell Mr. 

Peck at the White House today. 

Now, the Ranking Member and I have spoken of our concern 

about the increasing reliance on leasing. I know, for one, and I am 

sure the Ranking Member does as well, that we can’t go around 

buying buildings. We don’t have the capital. We didn’t have it before the collapse of the economy. 

But I am very concerned that you are not—and we see that you 

bought a building last year. You are buying a building this year. 

We are very pleased to see you are proceeding in that way. I don’t 

see the capital for going around doing what we ought to do. Therefore, we have to look for other ways to see if we can purchase. 

Now, one way does not involve purchasing, but it very much involves your lease procurements and the way you do them. Now, you 

do them through best-practice transactions, that makes a lot of 

sense normally, best-practice procurements in which you evaluate 

technical factors along with price in awarding a decision. So we 

don’t want to say there is anything inherently wrong with best 

value. 

But given that lease procurements are highly prescriptive in 

terms of establishing minimum requirements for many, many technical matters, the present GSA practice of making price significantly subordinate to technical factors is of huge concern to this 

Committee in this climate. Why should price now—or, for that matter, even before, but particularly now—be subordinate to technical 

factors which are already prescribed in the prospectus? 

Mr. FOLEY. Madam Chair, I should note the majority of our procurements are done through lowest-cost, technically acceptable. So 

it has to meet the minimum criteria, but we do use low-cost procurement. We do use more complicated source selection criteria to 

evaluate technical criteria for many of our larger procurements. 

Ms. NORTON. It is the larger procurements that I am worried 

about. That is where we spend the money, Mr. Foley. 

Mr. FOLEY. Agreed. Those criteria typically have to do with factors such as space configuration, proximity to public transportation, 

which was mentioned previously, energy efficiency, past performance of the landlord, project team qualifications. 

Ms. NORTON. All those things are already a matter of law. They 

are already prescribed. 

Mr. FOLEY. So I think those are all critical criteria in addition 

to price for consideration. 

As far as location decisions, they are made in accordance with 

the customer’s mission, requirements, and established location policies. 

Obviously, one of the things from the executive order on sustainability is the emphasis on transit-oriented, sustainable development. So that is a critical consideration for us through where we 

locate facilities. 

44 

I agree with you that we have an excellent opportunity in the 

current real estate market to take advantage of many of the lower 

prices we are seeing at this point in time. We are working extremely closely with our tenant agencies to look at both their requirements, what is available in the existing marketplace, and provide expertise and guidance as far as how they might be able to 

utilize their space. 

Ms. NORTON. Let me ask you about that, Mr. Foley. Just give me 

a straight answer. Why should price ever be significantly less important as a factor? Should it ever be significantly less important 

than technical factors? 

Mr. FOLEY. I think the critical piece for us is making sure that 

we deliver a workplace that will satisfy the tenant agency’s mission 

requirement. So if you have a proposal where it is not—— 

Ms. NORTON. Just a moment, Mr. Foley. You have just walked 

into the lion’s den. Because that is precisely what the problem with 

procurements has been. Instead of understanding who you are responsible to, you have said more than once during your responses 

that you are responsible to the agency. 

Now, I don’t know what we are going to have to do to blow you 

out of that mandate that you apparently feel you have, but it is so 

serious that we are designing law that will make you understand 

that you are subordinate to the committees and through them to 

the taxpayers. 

You are being manipulated in every conceivable way. In my own 

opening statement, I offered an example of that which was shocking. It happened to have been from Prince George’s County, and 

the manipulation of a prospectus in violation of the prospectus was 

so serious you had to withdraw it. And now you are here by rote 

telling me that price can be significantly less important if the agency in fact needs that change. That is why you are not in Prince 

George’s County. That is why you are not even in NoMa here in 

the District of Columbia within a stone’s throw from the Senate, 

because you pay attention to agencies who obviously have every 

reason to manipulate. 

If you came to me and you said, Eleanor, what kind of house do 

you want and you don’t have to pay for it, I could regale you with 

technical matters, as you indicate, that I would want, because price 

would not be a concern. 

I must therefore ask you, who makes the decision in a given procurement that price should be below certain technical factors? Who 

makes that decision? 

Mr. FOLEY. GSA is the leasing agency for the government, so ultimately GSA. 

Ms. NORTON. Who within GSA? How is that done? What is the 

process? 

For example, is there any written guidance promulgated by the 

central office of GSA to leasing officers and others to know, so that 

you don’t have—and that is where we are going next. If you want 

a GAO report to tell us differences among your agencies or your regions, that is what you are going to get. Because what we detect 

just from what we can see here are determinations in price that we 

cannot justify. 

45 

So I am asking you, who in GSA? What is the process? Is it uniform region to region? Who gets to make these nice decisions on 

which is more important, price or technical matters? 

Mr. FOLEY. First, I would like to respond to a couple of things. 

GSA, we are expanding our leasing in NoMa. In fact, as an agency, 

we will be relocating a portion of our headquarters into NoMa. So 

we have seen a significant increase—— 

Ms. NORTON. Of course, that does not answer my question. The 

fact is—because you are only telling us what the Subcommittee has 

done. It is not GSA that broke open the NoMa matter. It is the 

Subcommittee. And do you know how we broke it open? Don’t take 

any credit for what we did. We put in the prospectus that you had 

to come back to the Subcommittee before deciding to lease on K 

Street rather than in NoMa on Massachusetts Avenue. Now you 

are taking credit for that. That happened because we required it 

to happen. 

And still you violated the prospectus when it came to Prince 

George’s County, because you ignored that mandate and did not 

come back to us to tell us that the agency involved wanted 

changes, such as hair saloons and places of worship. So, yes, you 

are absolutely right. NoMa got broken open, and we are going to 

break open the rest of this as well. 

But you are not answering my question, and it is not good form 

when my question is one thing to go to another. 

Now, my question is—and you realize the significance of my 

question by the priority I have put on understanding best value. I 

want to know—and I will say it again—who in GSA makes the decision on best value? Are there written guidelines so that there are 

not one set of best-value decisions made in one region and another 

made in another region? That is what my question is. That is what 

I want to know, not about NoMa, which is what this Subcommittee 

did, not what you did at all. 

Mr. FOLEY. Yes, Madam Chair. We have had inconsistency from 

region to region. However, we are going through a major reinvention of our leasing program at this point in time. We are working 

to provide consistent guidance to all of our regions so that they do 

their procurements in a similar fashion, whether it is consistency 

amongst the solicitations all the way through the process. 

As far as who directly decides in the procurement process, it is 

the contracting officer and the project team that work together in 

terms of developing the source selection criteria. 

Ms. NORTON. As I understand it, you are promulgating such 

guidance? 

Mr. FOLEY. Yes. 

Ms. NORTON. So you recognize there may be differences without 

guidelines. You can’t expect bureaucrats out there to proceed if 

they don’t have guidance from central headquarters. 

Mr. Foley, we are going to require now that before we receive a 

prospectus you must come to the staff so that we can beforehand 

look at evaluations on price alongside technical factors. We do this 

because the President himself is requiring large changes, some of 

which are going to come out of our budget, and could and should, 

and we perceive that this loose using of technical factors is basiVerDate Aug 31 2005 17:33 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00055 Fmt 6602 Sfmt 6602 P:\DOCS\57060.0 KAYLA
46 

cally a way for agencies essentially to design their headquarters 

through leasing as they see fit. 

We do not say that that is your intention. We do say that we believe unless you can show us this is not the case that that is the 

result. 

I have other questions for you, but I am going to go now to the 

Ranking Member. 

Mr. DIAZ-BALART. Madam Chairwoman, if I may, and again as 

I mentioned before, Mr. Foley is a good man, he is trying to do the 

best job he can and trying to answer these questions. 

I really don’t have questions or comments for him. I really want 

to kind of speak among ourselves here, if that is OK. 

Look, we have the same issue with the San Diego courthouse, by 

the way. It is business as usual, but, frankly, worse, because now 

we have the information. As you said, I guess it is when a decision 

was made, whether it was years ago, they can’t change it, whether 

or not we have proof that the money is being wasted. So that seems 

to be the case with this agency. 

Really, my question and my comment, Madam Chairman, is 

more of an internal thing to us. We know what the problem is. 

There is a huge problem here. There is an attitude of ‘‘we are going 

to continue to waste the money.’’ The San Diego courthouse that 

we have been speaking about in this Subcommittee way before I 

was on the Subcommittee, Madam Chairman, you are more aware 

of it than anybody else, now we see that what they are doing with 

that courthouse is the same kind of thing. There was a deal cut to 

allow the construction to go forward but to bring in agencies and 

other departments that were in leased space into that new facility 

that was being built. 

Now that is not what is being done here. That is not what is 

being proposed. Now they are proposing moving people out of the 

old courthouse, and then you have to renovate the old courthouse, 

as opposed to just while we are building this new one let’s get 

those who are in leased space in there. 

We could go on forever. So I think really the question and the 

comment, Madam Chairwoman, is really almost towards you, 

which is I think we need to figure out what we need to do in order 

to, frankly, try to reverse and stop this. 

As I said before in one of the hearings that you led for us recently, when we have facts that prove that the money is being 

wasted and then the administration, the agency, continues to do so, 

knowing that it is being wasted ahead of time when we have reports, studies, et cetera, it gets to the point where we are going to 

have to do our part. 

So I think we need to just now kind of figure out what we have 

to do. Because I don’t think we are going to get this agency to 

change. I just don’t. I think we are going to have to do our part. 

We are going to have to, obviously, contact the appropriators. Unfortunately, we don’t have a lot of time, because the information 

was given to us late, as you already mentioned. 

So I think we are going to have to be very aggressive. Because 

we are getting no help in protecting the taxpayer. We are getting 

no help in changing the way things are being done. We are getting 

no help in even realizing the reality we have, studies after studies 

47 

and fact after fact, showing the money is being wasted and just 

thrown away. 

So I think we are just going to have to do our part; and we are 

going to have to be, frankly, very, very aggressive. Because I just 

don’t see any help from the agency. 

Ms. NORTON. I join you, Mr. Diaz-Balart. We have sat here and 

preached to an unwilling choir for a long time without results that 

I think we could justify. 

Yes, that is part of the reason we are reauthorizing provisions in 

the statute and part of the reason why I say we are not going to 

approve any prospectuses for best value unless we look at them 

ahead of time. If the agency needs us to essentially act like they 

are students and we are the teachers, we are going to have to do 

that. Because, otherwise, we just become a check-off Subcommittee. 

At a time when every Subcommittee is trying to save funds, we 

can’t allow a big amount—the kinds of big amounts it takes to 

lease and construct properties—to simply go with no more indication, for example, that best value is being used appropriately to 

control price than we have here today. 

I am going to go to Mr. Michaud. 

Mr. MICHAUD. Thank you very much, Madam Chair. 

I have a couple of questions. 

Have you done an analysis of what are the total needs of projects 

out there that GSA has? 

Mr. FOLEY. In terms of repair and alterations and new construction? 

Mr. MICHAUD. For new construction and alterations, if you have 

them separated. 

Mr. FOLEY. Sure. We estimate our current repair liability for the 

portfolio somewhere in the range of about $5.3 billion. We know 

that there are a number of large new construction needs out there 

for Federal executive branch agencies exceeding another $2 billion, 

including things like the remainder of the St. Elizabeths campus. 

There is a large courthouse construction program as well. Needs 

on the 5-year plan I think exceed another $1.5 billion to $2 billion, 

as well as the land port of entry program has about $5 billion 

worth of construction long term. I think the 5-year plan is significantly less for that. But there are significant needs out there for 

the Federal inventory. 

Mr. MICHAUD. When you look at the projects, do you look at veteran-owned businesses, whether or not they would have a priority 

in that regard? 

Mr. FOLEY. Certainly. We follow all the procurement rules and 

the preferences required for the small business goals, including veteran owned. 

Mr. MICHAUD. What about project labor agreements? Do you sign 

any project labor agreements? 

Mr. FOLEY. GSA has been a leader in terms of the implementation of project labor agreements, particularly through the Recovery 

Act projects. We were one of the first agencies to move out on that 

and I believe established PLAs in at least four projects and identified ten projects that we are looking at negotiating them as we 

move forward on. 

48 

Mr. MICHAUD. OK. When you talk about agencies trying to meet 

the agencies’ needs, does GSA look at—for instance, you could have 

the Department of Labor, OSHA, EPA, EDA. They all need space. 

Do you look at co-locating a lot of these agencies, even though they 

may not want to be co-located? How does GSA deal with that issue 

where you are involving different agencies and different needs? 

Mr. FOLEY. Certainly. We do look at the overall Federal requirement. When an agency comes to us with a housing need, we look 

at what we have in terms of existing federally owned space, what 

we might already have under lease, and what the alternatives are 

for leasing. If there are opportunities for economies of scale provided through co-location, that is certainly something we look at 

pursuing. 

If there isn’t sufficient existing federally owned space, one of the 

issues with co-location is, depending on the given real estate market, if you consolidate three or four agencies together, you may 

drive the requirement so large that existing space may not be 

available; and so in some instances that can actually increase costs. 

So it is sort of a delicate balance, and it is definitely something 

that is real estate market specific as to how we handle that. 

We also have to consider the compatibility of the agencies. And 

the ones you mentioned might be compatible, but you have to look 

at law enforcement versus those with, you know, public access and 

that sort of thing. So all of these criteria are factored into our locational decisions. 

Mr. MICHAUD. How do you prioritize the agencies list that you 

have to deal with? Is it by region or is it—how is the prioritization 

done? 

Mr. FOLEY. In terms of priority, it is many of the factors that I 

mentioned in my opening statement. So we do look at the mission 

need, the priority for the tenant agency. But, also, there are a number of factors that, frankly, weigh equally as much in terms of the 

benefit to the taxpayer, return on investment and payback period, 

improving the condition of existing facilities, environmental usage, 

improving the energy efficiency and high-performance green building factors, stewardship roles such as historic preservation of significant government-owned assets, all of those. There is a myriad 

of factors that go into it. 

Mr. MICHAUD. Have you looked at—just looking at some of the projects on your list—the new construction, the $380 million for the 

St. Elizabeths—have you looked—I am not picking on that one, but 

have you looked at the needs out there for energy efficiencies, for 

projects that actually might not be as expensive, that you can wipe 

off the books, so to speak? A lot of smaller projects versus doing 

a larger project? 

Mr. FOLEY. Certainly. You will notice we have a $20 million line 

item for energy efficiency and high-performance green building features. A lot of that is for that. 

We also are working to become a green proving ground where we 

can address a lot of these smaller issues for specific buildings and 

improve the energy efficiency of them. We have a number of goals 

to meet under the Energy Independence and Security Act and the 

executive order, and that is what a lot of these funds are for, for 

many of the smaller projects that wouldn’t rise to a full building 

49 

modernization to allow us to do things such as integrated photovoltaic sun roofs or cool roof technology, a lot of different things. 

Mr. MICHAUD. I see my time has expired, so thank you very 

much. 

Mr. FOLEY. Certainly. 

Ms. NORTON. We will hear next from Ms. Edwards. 

Ms. EDWARDS. Thank you, Madam Chairman. 

I have a couple of questions. Can we go back to this issue of best 

value and how and when you make a determination that price in 

terms of its importance for consideration sort of falls below some 

of the technical factors? 

Mr. FOLEY. Certainly. I think, as I said before, you know, the 

majority of our procurements are done with low cost, technically acceptable. But we do source selection, particularly when it is a much 

more complicated requirement for specialized space where technical 

factors are critical. 

Also, for some of our larger procurements which, as you know, 

are a lot of the bigger dollar acquisitions, where there are a myriad 

of factors, including price, which are important, but making sure 

that we do have something that provides the best value, not just 

to the occupying agency but to the taxpayer as well. 

Ms. EDWARDS. So, let’s take, for example, the solicitation—the 

prospectus, rather, for the DHS Annex. On April 1, you issued a 

solicitation for offers up to 1.136 million square feet of space to 

house three tenant agencies. The offers were originally due on May 

7. That was then extended by a week to May 14, so an extra week. 

In that submission, the offers had to include evidence of, quote, 

all final base building zoning subdivision site plan approvals and 

any other required local, regional, State, or Federal Government 

approvals that might be required related to the base building utilities, stormwater management, parking facilities, and landscape requirements. 

My own experience, just as an activist doing zoning and planning 

work, is that there is no possible way that you could get through 

probably in any one of our jurisdictions—I know one of the ones I 

represent, Prince George’s County—that process in 4 weeks or in 

5 weeks. So can you just tell me then on that particular prospectus 

what is the average or even median time for site-planned approval 

processes in the various jurisdictions in this metropolitan area? Do 

you know? 

Mr. FOLEY. I do not know. And we can certainly follow up with 

that information, based on our experience. 

I think the DHS omnibus prospectus—I mean, it was shaped and 

designed to allow for the maximum competition possible but, at the 

same time, meeting the timeline for the Department of Homeland 

Security and aligned with other expiring leases that we have. 

Ms. EDWARDS. Right. But let me just go back to this, because I 

can assure you that that process generally takes between 12 to 18 

months to complete that process in the local zoning and planning 

process. 

Site plan approvals, all of that, stormwater management, meeting local zoning requirements, 12 to 18 months. I would be shocked 

if GSA could come back and tell me that in any of the jurisdictions 

in this metropolitan area that that would not be true, just absoVerDate Aug 31 2005 17:33 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00059 Fmt 6602 Sfmt 6602 P:\DOCS\57060.0 KAYLA
50 

lutely shocked. I mean, I have sat in on these hearings for months 

and months and months. So I would be interested in an answer for 

that. 

With respect to that particular solicitation and the other one that 

was referenced by the chairwoman regarding the Health and 

Human Services facility, there was a change in the prospectus from 

9-foot ceilings to 8-foot ceilings. When my staff inquired to you, the 

GSA, about that change, it was described in both of those instances, two separate teams doing them, that it was a typographical error that resulted in exactly the same change to the prospectus, which, in effect, favored one jurisdiction. 

Is it the practice of GSA, in the prospectus process of amending 

a prospectus, to make that kind of technical change, what seemed 

on its face to be a technical change? What’s the process? How do 

you make a decision that a prospectus has to be changed to reflect 

a change from a 9-foot ceiling to an 8-foot ceiling? 

Mr. FOLEY. I believe that in that instance I have also heard that 

it was a typographical error. 

Ms. EDWARDS. Two typographical errors, right? Same two typographical errors. 

Mr. FOLEY. Yes. I believe the intent in that was to increase the 

competition, allowing more existing buildings to compete and so, 

again, looking for the best value and trying to maximize competition. I think that it—you know, it does have to do with the level 

of competition and what we are seeing in the marketplace. Clearly, 

if there has been an error or omission, we will clarify and look to 

make that clarification amendment. 

Ms. EDWARDS. So if you are maximizing competition but the result is that you are including then competition which results in 

greater rental price by adding in competition that brings in another 

jurisdiction, it is hard for me to see that that actually makes it a 

better deal for the taxpayers. 

So, for example, if there is a disparity from Washington, D.C., of 

$49 per square foot to Northern Virginia, which is $38 a square 

foot, to Maryland, which is $34 a square foot, where do you think 

the best value is for the taxpayer. 

Mr. FOLEY. I mean, obviously, price is a key consideration, as 

well as the quality of the building and what we get and how does 

that meet the customer agency need. 

Ms. EDWARDS. How does it meet the taxpayers need? 

Mr. FOLEY. I mean, ensuring that they can efficiently carry out 

their mission is a key component. Obviously, price is also a critical 

consideration. 

Ms. EDWARDS. And so, in a metropolitan region, how does GSA 

make a determination that there is that wide a variance, I guess 

it is, about a $15 per square foot variance in a metropolitan region? 

How does GSA come to that conclusion? 

Mr. FOLEY. Certainly. When we determine the maximum annual 

rental rate in the jurisdictions, it is based on an analysis of the cost 

of existing lease space and existing market space, what is available. And so, looking at the average cost of space within each of 

the jurisdictions, how much space is available and what we believe 

we can lease it for in a given program year. 

51 

Ms. EDWARDS. And so how will one jurisdiction ever be competitive, given that consideration? And especially when price isn’t, you 

know, at the top of the line? 

Mr. FOLEY. I mean, I think our goal is to maximize competition. 

Certainly we want to make sure that all jurisdictions are competitive in our procurements where that is possible. 

Ms. EDWARDS. Thank you, Madam Chairman. 

Ms. NORTON. I thank you, Ms. Edwards, for those probing questions. 

I want to finish off this best price—this concern I have with best 

value, and the reason I spend the time on it is I detect the possibility of real savings there. You know what the public thinks? The 

public thinks price is what matters. We would have to explain to 

them about best values. And it is very, very unfortunate to give 

best value a bad name. That is what GSA, I believe, may be doing. 

For example, you had a protest actually sustained just 2 weeks 

ago, June 1st. It had to do with your procurement for an EPA space 

in San Francisco. And I want to quote what the Controller General 

said in overturning, essentially, what GSA had done. 

In responding to this protest, GSA furnished us with several 

versions of the Source Selection Evaluation Board’s final technical 

evaluation report. The agency was not able to identify which if any 

of the versions represented the consensus views of the evaluators. 

Only one of the three versions of the report furnished to us included signatures in the blanks for the SSEB members signatures, 

and the dates that the evaluators signed varied. The differing dates 

of signatures, along with different versions of the report, suggest 

that the report was revised as it was circulated among the various 

members for signature. 

Troublingly, there is no evidence that the version that included 

final edits was recirculated for approval to the board members who 

had signed off on earlier versions. This seems to show something 

close to disregard of a process, certainly lax discipline in making 

perhaps the most important decision you could make which is how 

much should it cost the taxpayer. 

Does GSA have standard procedures, or does this fall under the 

answer you gave me before that you are going to have to develop 

such guidelines so that these procedures are standardized? 

Mr. FOLEY. I am not aware of the specifics of that case, and we 

will be happy to follow up with you on that. 

As far as how the procurements are run and how they go, we do 

have procedures in place for how source selection boards are established. The standards, as far as the criteria, may not be as consistent, and that is one of the areas that we are looking at. 

Ms. NORTON. What percentage of your protests are sustained in 

favor of the protestor? 

Mr. FOLEY. I don’t have that information. 

Ms. NORTON. Get that information to the Subcommittee within 

30 days. We want the protests that GSA has lost, let me put it that 

way, over the last 5 years. We understand that government-wide 

only about 20 percent does the government lose. We would be interested in knowing. 

52 

Ms. NORTON. Do you circulate the protest decisions so that contracting officers across the country can benefit from lessons 

learned? 

Mr. FOLEY. We do have a network of our realty services folks, the 

leasing community. In fact, they are meeting this week in Washington, DC. 

Ms. NORTON. The leasing community. You mean the people who 

make these decisions on the boards? 

Mr. FOLEY. Well, it is the directors for each of our 11 regions are 

meeting here and then they do work with their folks. 

Ms. NORTON. Do you circulate—look, I am a lawyer. If I am in 

a law firm and the firm lost a decision of a court, I would want 

everybody within that section of the firm that deals with those 

matters to read that decision. 

I am asking you if the decision itself is circulated so that 

throughout the region people can understand why they lost a protest. A protest is a very heavy thing for an agency to lose. Very, 

very costly for the protestor but terrible for the agency. Do you circulate these decisions so that people can learn not to make that 

mistake again? 

Mr. FOLEY. I am not aware of a formal process where we circulate the actual decision. If there is an issue where we need to 

clarify a policy or reiterate, we do that as a result and that does 

get circulated to all members of the real estate community. 

Ms. NORTON. All right. When do you intend to have this guidance 

to regional employees done with respect to the best value and technical matters that we questioned you about before? When is that 

guidance due to be done? 

Mr. FOLEY. I will have to confirm that. 

Ms. NORTON. Would you confirm that by close of business Friday, 

what is the date for this guidance, and would you make sure that 

it includes circulation of all matters where the agency has lost a 

protest? 

I want to ask you about another recent matter that came before 

this Subcommittee as it relates to yet a new issue, and I am now 

referring to the Emmett Bean Federal Center in Indianapolis. It 

houses the Defense Finance Accounting Service. Now, GSA proposes to spend $19.33 million in security upgrades. I want to know 

what percentage of these upgrades are driven by DOD’s 

antiterrorism standards. 

Mr. FOLEY. I believe the security enhancements are as a result 

of the DOD antiterrorism force protection standards and the USC 

code. What I am not aware of, and we can certainly—— 

Ms. NORTON. I am sorry. I didn’t hear what you said there. The 

what? 

Mr. FOLEY. The USC code which shapes the antiterrorism force 

protection standards. 

Ms. NORTON. Now, are you aware that DOD’s authority is to promulgate security standards limited to military installations? And I 

am going to ask you, is the Indianapolis Defense Finance Accounting Service a military installation? 

Mr. FOLEY. I am aware of similar concerns. We are actually 

working with the Department of Defense, and I understand they 

have been meeting with your Committee as well. There has been 

53 

a broader interpretation that the security criteria apply to all Department of Defense facilities, and we have been working under 

that criteria as well. So under those criteria, it would. 

Ms. NORTON. I understand from staff that they will be meeting 

and have been meeting with DOD personnel. But I must ask you, 

Mr. Foley—and we understand you are not the person in charge, 

you are the deputy, and I suppose you ought to know these things 

and be as involved in these things as anyone else—but has GSA 

ever made an attempt to challenge the applicability of the 

antiterrorism standards by saying, look, military installations, our 

lawyers tell us that accountants don’t usually operate in military 

installations. Have you ever even challenged them? 

Mr. FOLEY. I am not aware of a formal legal challenge that we 

have made. We do work with them—— 

Ms. NORTON. I am talking about—I don’t mean a formal legal 

challenge. Have you ever sat down with DOD and said, you know, 

you could save a lot of money for the taxpayers if we didn’t have 

to do $19.1 million in security upgrades for some accountants who 

al Qaeda does not tend to target. 

Mr. FOLEY. We have sat down with them and discussed the implications of security requirements on the cost of many of these 

projects. I can’t speak to and I will defer to the Department of Defense on how they develop their criteria and how they determine 

their risk levels. But we do discuss tradeoffs and things that we 

might be able to do that may be more economically efficient, such 

as hardening of the facility, as opposed to setbacks and those sorts 

of things that are tradeoffs. 

Ms. NORTON. Did you do so with respect to this facility before it 

was—before it became controversial? 

Mr. FOLEY. I believe we did. 

Ms. NORTON. I agree with the Ranking Member, though. I believe that the reluctance of GSA to take on even peer agencies, I 

don’t have any confidence that you would take on the DOD by just 

sitting down and having a conversation with them. We don’t see 

any implication of that. It was a shocking hearing we had on DOD 

and its application of these standards, which, by rote, GSA was 

just carrying out. Hey, we want them with the accountants. We 

want them—— 

And they were clear at the table. They say, we think anything 

with defense in front of its name, in fact, should have these standards. And when we pointed out to them that the word is military, 

not defense, they had absolutely no response except that is the way 

they think it ought to be. So when they think it ought to be that 

way, with all the—and here we documented in that particular case 

four times the amount that it would otherwise cost. This was the 

military plan. 

If they think it ought to be that way and if GSA thinks it ought 

to be that way, what the Ranking Member says is correct. Then we 

have got to make many of these things a matter of law. So we are 

going to help you out. 

Let me ask you about the DHS headquarters at St. Elizabeths, 

where GSA is requesting $10 million for new pedestrian tunnels. 

Where are these tunnels and why are they needed? 

54 

Mr. FOLEY. Certainly. The majority of that funding is for a tunnel that is on the west campus. It provides for utility infrastructure 

and connection between the central utility plant and the operations 

center. I believe that is about $8 million of the total cost. 

There is also a portion that goes for—— 

Ms. NORTON. So $8 million is not for people to pass from one side 

of the street to the other? 

Mr. FOLEY. Correct. I believe it is for infrastructure. 

Ms. NORTON. But, of course, the words used in the prospectus is 

pedestrian tunnels. If you are saying you are also going to put 

some of the wires and cables up, we understand that. But you label 

them yourself—I am using your language—pedestrian tunnels. 

Mr. FOLEY. The language in the prospectus is not correct then. 

My understanding is that $8 million of that estimate is for a particular tunnel on the west campus. 

Ms. NORTON. So we can cut it by $2 million, because we don’t 

need the pedestrian part of it. 

Mr. FOLEY. Well, the $2 million is for the pedestrian connection 

from the east campus to the west campus. We worked with the Department of Homeland Security, and part of our commitment is to 

provide a unified campus to fulfill their mission of the consolidation 

on the St. Elizabeths campus. When the FEMA portion, when it 

was decided that would be located on the east campus, we agreed 

to provide secure access from one portion of the campus to the 

other so that we only have to badge in and out once. 

Ms. NORTON. Let me understand this. One part of DHS, among 

the several to be located there, will be on the other side of the 

street. 

Mr. FOLEY. Yes. 

Ms. NORTON. Let’s assume that is FEMA. And I am sure there 

is going to be—that is why we want consolidation—business between FEMA and what is on the other side of the street. 

Mr. FOLEY. Yes. 

Ms. NORTON. Why can’t people just cross the street, Mr. Foley? 

Is a campus, for example, of the kind we have all around this region—let me start with the one that you are sitting on. To be sure, 

after the House was built, we had tunnels. But we sure didn’t have 

tunnels for most of the time. It is a campus. Universities have campuses. And a campus means or implies that you get to walk around 

the campus. We are not creating one building. We are creating a 

campus. 

Now, you are about to get into something very controversial, because the appearance is that the agency is trying to seal itself up 

within the complex and, in doing so, to discourage. One of the reasons we build in such areas, by executive order, Federal buildings, 

Federal agencies look for areas like this area to build in because 

it helps to, in fact, invigorate the area. That being the case, I don’t 

know how that will happen if you instruct employees to take the 

tunnel across the street, rather than to walk across the street. 

You are creating, for the first time, a face for the project that has 

been very well received. It has been very well received in the community. If, in fact, this tunnel goes ahead without some overriding 

need being shown, you will tear all of that up. It will be seen as 

55 

impossible, therefore, to foster the commercial and retail on the 

other side because there will be nobody to go to it. 

Remember that the agency already will have an unfortunate 

frontage not of its making. It is behind an old-fashioned high wall, 

very high, very foreboding because the St. Elizabeths was built for 

what they regarded as mentally insane people who shouldn’t get 

out; and they had a whole community there. It was, by the way, 

a state-of-the-art facility. 

But that wall was really meant to keep people in there. That 

wall is a historic wall. We are not going to take down that wall. 

So you are already walled up. And the surrounding community and 

the District of Columbia understands that. It is very difficult to understand who would go outside if, in fact, all you had to do was 

walk under the street, not around the campus as we walk around 

this campus, for example. 

Mr. FOLEY. We believe Homeland Security will be a good neighbor to the community. And, you know, as you are aware, we fully 

support the redevelopment and we think that is one of the big benefits of this project. And we thank you for your support and help 

in getting the dollars to move this program forward. 

I think one of the things that will help in terms of that is the 

parking ratio. As you know, we work closely with you all to ensure 

that there is only a one-to-four ratio, encouraging the use of mass 

transit, as opposed to everyone driving their cars on to the secured 

campus. 

Ms. NORTON. Well, how is that going to help? Because the mass 

transit is located nearby, but you are going to have to run shuttles, 

aren’t you, in order to connect with the mass transit? 

Mr. FOLEY. I think there is a portion of that. But as the redevelopment happens in the area through mixed use and retail, we are 

also hopeful that as folks are coming to and from work that provides an opportunity. We believe that as the redevelopment takes 

place it will provide an impetus for the employees to go out into 

the community. 

Ms. NORTON. Do you agree that the amount of amenities located 

within the building should be limited in order to encourage use of 

retail in the neighborhood? 

Mr. FOLEY. I believe that there are a limited number of amenities planned for the campus. It is similar to what we have in other 

campuses and facilities. Part of the intent, as you mentioned, is to 

foster economic development in the local community. So we certainly do encourage folks within the campus to go out and take advantage of those amenities within the local community. 

Ms. NORTON. Mr. Foley, we will need a detailed written analysis 

for a tunnel before approving either $10 million or any amount of 

that for a tunnel beneath the building. It doesn’t need to be in this 

prospectus. You are not even close to it. But we have not heard, 

and I am not—perhaps you did not know because we did not get 

the prospectus early enough for you to be prepared. But we are not 

going to spend—I mean, I see this as a nice, large opportunity to 

say to the administration, we hear you. We are cutting $10 million 

for a tunnel. 

Among the things we do not do today is dig tunnels. We have 

tried every way to see whether tunnels could solve some of our 

56 

problems. There was huge concern when Pennsylvania Avenue was 

closed in front of the White House and all kinds of people, all sorts 

of suggestions. And one of them was to do a tunnel under Pennsylvania Avenue. And at that time it was interesting to hear the responses. And it was, we just don’t do tunnels anymore. We do not 

do tunnels. Tunnels are so costly that the Federal Government essentially is out the tunnels business. 

And you are out of business for it unless you can show us an 

overriding reason why a tunnel—overriding. It has to be very, very 

important as to why we ought to say to the taxpayers you are not 

only building these people some brand new buildings, you are making sure that in inclement weather they don’t have to go out and 

cross the street. 

Now, we understand that on campuses that you are used to people have to do that, but we think these people deserve every amenity, so we are spending $10 million to make sure they can cross the 

street, consisting of a few hundred yards. 

So even as I lay out the case, I lay out a case because I want 

a rebuttal, not because we have made a decision. But I need a rebuttal. In the absence of a rebuttal, there will not be a $10 million 

tunnel. 

Here is something that we would like to see, a model we would 

like to see you build on. I mentioned the Martinsburg, West Virginia, facility. Purchase. It was an option embedded in a release 

from 1995. Now, apparently, this fixed-price option did not render 

the lease a capital lease when it was negotiated in 1995; and that 

would have, of course, brought it within the Budget Enforcement 

Act. 

Why doesn’t GSA routinely negotiate fixed-price options when 

agreeing to the terms for whole building leases as long as the fixed 

price is not a bargain on its face at the time it is negotiated? Now 

here is a more creative thing you could have done. Why don’t you 

do that? 

Mr. FOLEY. My understanding of the purchase option for Martinsburg is that the clause in the lease actually says it is for fair 

market value. We estimate the fair market value to be at the price 

in the prospectus. 

Currently, we are prohibited from pre-negotiating a strike price. 

And we do work to get purchase options in many of our leases, particularly when we know there would be a long-term advantage to 

Federal Government ownership. 

Ms. NORTON. Wait a minute. This was a fixed price. What differentiates this? Why are you able to purchase this building? We 

would like to see more of it. 

Mr. FOLEY. Certainly. I mean, we do have a purchase option in 

that lease; and many of our leases have similar purchase options. 

The clause says something along the lines of for fair market value. 

It doesn’t pre-determine a price. 

Ms. NORTON. OK. Why can’t we do that so that we can purchase 

more buildings? 

Mr. FOLEY. We do include those in numerous leases, such as 

many of the FBI facilities and others. 

57 

Ms. NORTON. All right. The fair market price according to the records we have, in April, was 28,000—I’m sorry. $28,400,000. 

However, the building and site acquisition amount is $24,767,000. 

Mr. FOLEY. I will have to confirm those numbers and follow up. 

Ms. NORTON. Real important, because it looks like you are buying it for below fair market price. Within 30 days, we need—well, 

given how late this is, within 10 days, we need an explanation. 

Mr. FOLEY. Certainly. 

Ms. NORTON. We want to encourage this. We are not criticizing 

this. Some perhaps good lawyer has found a technical way for you 

to buy buildings without scoring. You ought to be jumping for joy, 

especially in light of a very troublesome, at least on its face—perhaps you can explain. It had to do with the FBI garage in Detroit, 

very expensive. You are building a garage annex. This building is 

called the Patrick McNamara Federal Building. It has a large price 

tag, $45.6 million in total costs. Fairly modest garage. That 

amounts to $176,000 per space for 259 vehicles to be parked there. 

So we need an explanation as to why GSA is proposing to spend 

$185 per square foot for a garage project. We understand indeed 

the FBI advises that their garages typically cost in the range of 

$30,000 per parking space. This is roughly six times higher. Could 

you explain this? 

Mr. FOLEY. Certainly. This project is tied to actually some Recovery Act funding that we are doing for conversion of the McNamara 

building to keep FBI in there. As you are well aware, this Committee authorized a lease prospectus for the FBI in Detroit that we 

are not moving forward with. So we actually believe this is a good 

story. As opposed to spending over $160 million leasing for the FBI 

over the next 15 plus years, we are combining the $45 million for 

the garage with $55 million in the Recovery Act, a significant savings for the taxpayer. 

The project is for a garage and vehicle maintenance facility. It 

is not a typical parking garage that you might think of. As I understand it, it is going to house the automotive maintenance program, 

electronic technician program, and evidence response teams, each 

with vehicle bays, storage facilities, and work areas. So it goes well 

beyond that. 

In addition, the facility also provides secured covered parking 

and access control for the FBI’s government vehicles, specialty vehicles like panel trucks, bucket trucks. They also have command 

post vehicles, trailers, all kinds of other things that are fairly 

unique that you wouldn’t see in a typical parking garage for government construction. 

Ms. NORTON. Yeah, it looks like some of it is just storing cars or 

doing maintenance. I don’t see why that gets the price so high. 

$45.6 million in total cost. 

Is there an oversell factor here? For example, are you taking into 

account that on any given day some will be on vacation or sick 

leave or travel status? What diversity of factors did the FBI and 

the GSA use to arrive at this requirement? 

Mr. FOLEY. I will have to follow up with that information. 

Ms. NORTON. Ten days. We need it, in light of the lateness of this 

prospectus. In fact, everything that has to do with this prospectus 

should be to us within 10 days if you all expect this prospectus to 

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Ms. NORTON. Could you explain what steps you at the GSA are 

taking to implement the President’s June 10 memorandum on 

unneeded real estate? For example, he wants the further consolidation and reduction of data center space and to assist agencies in 

measuring their own utilization and occupancy rates. What guidance does GSA anticipate as a result of the President’s memorandum? 

Mr. FOLEY. Certainly. 

As you mentioned, the memorandum was signed just last week 

directing the Federal Government to look for up to $8 billion in 

savings. I believe $5 billion of that is BRAC related and $3 billion 

for other Federal assets. This will dominantly be achieved through 

the disposal and proceeds from unneeded government-owned assets 

and reducing operating costs and more efficiently using existing facilities and new facilities. 

Clearly, our first priority is working with the agencies. GSA has 

the lead for developing the guidance that will be done within the 

first 90 days or within the next 90 days. In fact, that’s why Commissioner Peck was unable to be here today. As I mentioned, he is 

at the White House complex on a meeting kicking that off to help 

set the direction for that. 

The first priority I think that we are working with other landholding agencies and reviewing our own portfolio for is to expedite 

the disposal of unneeded Federal assets and the demolition of properties in many cases on a Federal complex where we may be spending operating costs on these facilities or where we have an opportunity to achieve proceeds from the sale of them. So opportunity for 

multiple savings there. 

We are also working to improve the utilization of space. As leases 

expire or we renovate and reconfigure existing Federal facilities, we 

are looking for opportunities to improve our utilization and the 

density of use, which would allow us to either eliminate space or 

backfill with other functions. 

We are working closely with agencies to review their requirements. And one of the things that we are doing is, as the agencies 

come to us and say, for example, I need 100,000 square feet of 

space, GSA is taking a much more active role and aggressive role, 

saying can you really do it with 75,000 or 80,000 square feet? Help 

us understand your requirement because we think there may be a 

better way to do this, and pushing back on agencies to better utilize their space. 

You mentioned the data centers. That is another critical area 

where we believe there is significant opportunity. Most agencies 

have their own data centers. With advances in technology like 

cloud computing, server virtualization, there are clearly opportunities to reduce the number of data centers government-wide; and 

that could have a significant impact on not only the square footage 

but the energy performance of the portfolio as well. 

So, again, a lot of opportunities out there. GSA is excited to have 

a leadership role in this, and we look forward to moving forward 

and helping implement the intent of the President’s memo. 

Ms. NORTON. I appreciate that this is expertise that GSA would 

have a leadership role. Our experience is that when GSA gets to 

62 

the table with other agencies, it is miniaturized. It just doesn’t 

have the stomach to stand up, even behind its own law. 

So we will be watching you very closely to see if you indeed offer 

leadership inasmuch as you have been given a leadership role, 

largely because of your expertise, not because of your record. For 

example, your record on price versus technical matters in procurement has been anything but a lead record; and I didn’t hear it 

mentioned among the matters you will be looking at in order to 

save funds. Are you willing to look at the readjusting or the price, 

as opposed to technical factors in your prospectuses as a cost-saving matter? 

Mr. FOLEY. Certainly. We are always looking for ways that we 

can maximize the government’s position and that we can get the 

best value for—— 

Ms. NORTON. I asked about price versus technical matters in particular. Are you willing to look at that? 

Mr. FOLEY. I think that is certainly an area where we can look 

at that. 

Ms. NORTON. Are you willing to look at the monies that could be 

saved with respect to the DOD antiterrorism standards inasmuch 

as the word military installations is used with respect to implementation of those standards? And clearly millions of dollars could 

be saved if, with back office employees of the kind we have in the 

rest of the government, we used general GSA standards and not 

antiterrorism standards. Are you willing to take a look at the DOD 

standards? 

Mr. FOLEY. Absolutely. And we already are working with them. 

Ms. NORTON. Very much appreciate that response. 

Before I close the hearing, I want you to make known to the appropriate parties at GSA that for the record we have outstanding 

requests from our hearing on March 24 entitled Capital Assets Crisis: Maintaining Federal Real Estate with the Dwindling FBF, the 

Federal Building Fund. Where are GSA’s responses, given the fact 

that 60 or more days have passed since the hearing and some of 

the responses were due within 30 days? 

Mr. FOLEY. I do not know, but I will personally follow up today 

and find out the status of those. 

Ms. NORTON. Please bear in mind, particularly in light of the tardiness of these prospectuses and the capital and leasing program 

for 2011, that the Committee expects the—particularly when you’ve 

gotten, as we always give, timely notice, we expect the 

prospectuses, the leases to be here. We understand that the leases 

may have to come a little later, but much of what was in your portfolio was locked in by the President’s own budget. So you didn’t 

have very much you could have done because the President had 

locked you in, and yet we are 4 months late. The effect of that, Mr. 

Foley, is simply on you. Because it means we are not going to proceed to the prospectus until the questions we have asked have been 

answered. 

We regard these hearings always as problem-solving hearings, so 

if we seem to be concerned, it is not that we are wringing our 

hands and we want to beat up on the GSA. GSA has no better defenders than this Subcommittee. What it does mean, though, is 

that we want to work with the agency in order to solve the probVerDate Aug 31 2005 17:33 Dec 21, 2010 Jkt 000000 PO 00000 Frm 00072 Fmt 6602 Sfmt 6602 P:\DOCS\57060.0 KAYLA
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lems that we raise. We do not say, go back, fix it, and then come 

so that we can beat up on you, or you haven’t fixed it. We say fix 

it. And the best way to fix it is to be in close consultation with the 

expert staff we have. 

You may have disagreements with them. That is all right. We 

will not always respond in favor of the staff decision. Our concern 

will be if we have laid out problems in the Committee hearing, 

what has been the response, has it been timely. 

Thank you very much for your testimony. Tell Mr. Peck we understand that, why he was not here today, and we look forward to 

your response and his responses to the questions we have posed. 

The hearing is adjourned. 

[Whereupon, at 12:02 p.m., the Subcommittee was adjourned.] 

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Æ 


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