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GSA TENANT AGENCIES: CHALLENGES AND 

OPPORTUNITIES IN REDUCING COSTS OF 

LEASED SPACE 

(113–80) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

SECOND SESSION 

JULY 30, 2014 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

MARK SANFORD, South Carolina 

DAVID W. JOLLY, Florida 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

LOU BARLETTA, Pennsylvania, Chairman 

THOMAS E. PETRI, Wisconsin 

JOHN L. MICA, Florida 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

BLAKE FARENTHOLD, Texas, Vice Chair 

MARKWAYNE MULLIN, Oklahoma 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

MARK SANFORD, South Carolina 

BILL SHUSTER, Pennsylvania (Ex Officio) 

ANDRE ́ CARSON, Indiana 

ELEANOR HOLMES NORTON, District of 

Columbia 

MICHAEL H. MICHAUD, Maine 

TIMOTHY J. WALZ, Minnesota 

DONNA F. EDWARDS, Maryland 

RICHARD M. NOLAN, Minnesota 

DINA TITUS, Nevada 

NICK J. RAHALL, II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

Norman Dong, Commissioner, Public Buildings Service, U.S. General Services 

Administration ..................................................................................................... 5 

Hon. Joyce A. Barr, Assistant Secretary, Bureau of Administration, U.S. 

Department of State ............................................................................................ 5 

William E. Brazis, Director, Washington Headquarters Services, U.S. Department of Defense .................................................................................................... 5 

Michael H. Allen, Deputy Assistant Attorney General for Policy, Management, and Planning, Justice Management Division, U.S. Department of 

Justice ................................................................................................................... 5 

E.J. Holland, Jr., Assistant Secretary for Administration, U.S. Department 

of Health and Human Services ........................................................................... 5 

Jeffery Orner, Chief Readiness Support Officer and Agency Senior Real Property Officer, U.S. Department of Homeland Security ....................................... 5 

Peter D. Spencer, Deputy Commissioner, Office of Budget, Finance, Quality, 

and Management, Social Security Administration ............................................ 5 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Norman Dong ........................................................................................................... 51 

Hon. Joyce A. Barr .................................................................................................. 56 

William E. Brazis ..................................................................................................... 60 

Michael H. Allen ...................................................................................................... 66 

E.J. Holland, Jr. ....................................................................................................... 69 

Jeffery Orner ............................................................................................................ 75 

Peter D. Spencer ...................................................................................................... 79 

SUBMISSIONS FOR THE RECORD 

Hon. John L. Mica, a Representative in Congress from the State of Florida, 

request to submit a list of vacant properties in the District of Columbia ....... 20 

Hon. Joyce A. Barr, Assistant Secretary, Bureau of Administration, U.S. 

Department of State, response to request for information from Hon. Andre ́

Carson, a Representative in Congress from the State of Indiana .................... 43 

William E. Brazis, Director, Washington Headquarters Services, U.S. Department of Defense, response to request for information from Hon. Lou 

Barletta, a Representative in Congress from the State of Pennsylvania ........ 48 

Jeffery Orner, Chief Readiness Support Officer and Agency Senior Real Property Officer, U.S. Department of Homeland Security, response to request 

for information from Hon. Lou Barletta, a Representative in Congress from 

the State of Pennsylvania .................................................................................... 48 

Hon. Lou Barletta, a Representative in Congress from the State of Pennsylvania, slides referenced during his opening remarks ....................................... 89 

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(1) 

GSA TENANT AGENCIES: CHALLENGES AND 

OPPORTUNITIES IN REDUCING COSTS OF 

LEASED SPACE 

Wednesday, July 30, 2014 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, 

PUBLIC BUILDINGS AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The subcommittee met, pursuant to notice, at 10 a.m., in Room 

2167 Rayburn House Office Building, Hon. Lou Barletta (Chairman 

of the subcommittee) presiding. 

Mr. BARLETTA. The committee will come to order. First, let me 

thank Commissioner Dong and our agency witnesses for all being 

here today. Together, your agencies occupy over half of GSA’s expiring leased inventory. 

Today’s hearing is the second step in our committee’s GSA leasing initiative to save taxpayer dollars through right-sizing Federal 

real estate. Step 1 was our July 15th roundtable where GSA agreed 

to partner with our committee to improve office utilization, lock in 

low rental rates and help agencies protect their employees from 

shrinking budgets. 

The purpose of today’s hearing is threefold: One, to set expectations for what it will take to approve agency leases. Two, to learn 

what challenges agencies face to shrink their footprint and use 

long-term leases to get the best prices. And, three, to learn how 

Congress can help GSA and the agencies achieve this goal. 

I believe we have a unique opportunity to work together and 

save a tremendous amount of taxpayer money. We have the same 

objective. The President wants to save money through real estate 

and so does Congress. And it is not just me who sees this opportunity. Private sector tenants are taking advantage of the market 

and negotiating good, long-term leases that cut their costs. 

So what are these conditions? One, inventory turnover. Two, low 

interest rates. And, three, a buyer’s market. Let’s take a closer look 

at these conditions. 

Inventory turnover. If you look at slide 1, you will see almost 100 

million square feet of GSA leases expire in 5 years. That is half of 

GSA’s leased inventory. It is also the size of 32 of the new World 

Trade Center buildings in New York. 

Low interest rates. Financing costs are near historical lows. Literally billions of dollars of cheap and abundant capital are sitting 

2 

on the sidelines waiting to help reshape the Government’s leased 

inventory. 

A buyer’s market. Vacancy rates are high and rental rates are 

low in almost every market GSA has a presence. 

So what is the key to realizing this potential? Long-term leases 

of 10 years or more. Why is the length of the lease so important? 

At the most basic level, a longer lease lowers risk, lowers finance 

costs and provides certainty for the landlord who can then offer 

lower rents. 

If you look at slide 2, you will see GSA pays a 20-percent premium for short-term leases of 3 years or less compared to longer 

leases. But long-term leases do much more than just lower rental 

rates. They allow the Government and the building owner to 

spread out the upfront costs of moving or reconfiguring space to accommodate more people. You cannot do this with a short-term 

lease. For example, slide 3 shows three recent GSA leases. The 3- 

year lease has a high rent and no concessions. The longer leases 

have lower rents and significant concessions. 

Unfortunately, slide 4 shows a significant amount of GSA leases 

are for 3 years or less. And that number is growing every year. 

There is clearly room for improving those numbers and saving taxpayer dollars. 

I also believe this is a win/win opportunity for everyone involved. 

Agencies can get new office space that better meets their needs, 

lowers their rent and allows them to protect their staff from budget 

cuts. The taxpayer gets significant savings, which the President 

and the committee wants. 

In order to get these types of good deals, planning must start 

well in advance. In particular, prospectus level leases require significant time to develop and execute. Tenant agencies need to embrace the President’s savings goals and run competitive procurements to replace their leases. 

Today, I hope to hear how GSA and its tenant agencies are going 

to replace 100 million square feet of expiring space with long-term 

deals that improve utilization rates and lower costs. That is a lot 

of leases and today’s market opportunity is not going to last forever. 

What are the challenges or obstacles that prevent agencies from 

moving or reducing their real estate footprint? As chairman of the 

subcommittee, I am open to suggestions to simplify and speed up 

the leasing process so that taxpayers can benefit from this opportunity. 

This Congress, we have already saved $1 billion by simply reducing the size of prospectus level lease replacements by up to 20 percent. 

Given the larger number of expiring leases, the opportunity for 

additional savings is even larger. For example, if the agencies before us here today lower their lease replacement costs by 10 percent through a combination of space reduction and good long-term 

rates, we can save $3 billion over the next 10 years. That is a goal 

worth achieving, and I look forward to working with all of you to 

get it done. 

I now call on the ranking member of the subcommittee, Mr. Carson, for a brief opening statement. 

3 

Mr. CARSON. Thank you, Chairman Barletta. And good morning 

to you, sir, and to the legendary, the incomparable Madam Eleanor 

Holmes Norton and my good friend, Mr. Walz and my other colleagues, Dr. Shultz, over there, my buddy. 

You know, subcommittee members and witnesses, welcome to today’s hearing. We are following up essentially on last year’s hearing when we examined the GSA’s implementation of the administration’s freeze on the Federal footprint dealing with real estate 

policy. 

We heard details from several agencies about their work to reduce their real estate footprint. The agencies testified about their 

efforts to increase utilization rates, release unneeded property and 

maintain their fiscal year 2012 real estate footprint. Today, we 

hope to get a better understanding of how agencies have executed 

their plans to maintain their baseline and how they plan to tackle 

expiring leases over the next 5 years within the ‘‘Freeze the Footprint’’ framework. 

According to GSA, over the next 5 years, over 100 million square 

feet of leases will expire. As Chairman Barletta mentioned, this is 

nearly 50 percent of their leases. As the Federal Government’s 

landlord, GSA has a responsibility to work with other Federal 

agencies to make good decisions that reflect both the will of the administration and Congress. The sheer volume of expiring leases 

over the next 5 years present a great opportunity to accelerate current efforts to reduce the Federal footprint by cutting existing 

space requirements. 

In the wake of the great recession, we have watched the private 

industry downsize and become more efficient in utilizing space as 

a result of economic pressure. We expect Federal agencies to do the 

same. 

Although the ‘‘Freeze the Footprint’’ policy currently applies only 

to office and warehouse space, we look forward to an update on 

broader efforts by GSA and other agencies beyond those two space 

classifications. If there is unneeded property that can be sold or redeveloped, it is very important for the committee to know about 

those properties. We also want to know about any assistance that 

we can offer these agencies in disposing of assets in their real estate portfolio. If an agency has a unique mission that needs to be 

impacted by your ability to ‘‘Freeze the Footprint’’ policy, we need 

to hear about them. We want GSA to help those agencies reduce 

their footprint, but we want them to be very smart about it. 

So thank you, Mr. Chairman. I look forward to hearing from our 

witnesses today. 

Mr. BARLETTA. Thank you, Mr. Carson. At this time, I would like 

to recognize the chairman of the full committee, Mr. Shuster. 

Mr. SHUSTER. Thank you, Mr. Barletta. And I want to thank the 

subcommittee chairman for holding this hearing today. And also to 

thank Ms. Norton, who has really been a champion for utilizing 

these Government spaces, saving money by doing things smarter, 

utilizing leases. So thanks to Ms. Norton, not just for the past couple of years but for over a decade or so, she has been really pushing 

the issue. And I appreciate it greatly. 

I want to thank all of our panelists for being here today, especially Mr. Dong. Thank you for coming. And I am very encouraged 

4 

by what I hear from Mr. Dong. He has only been on the job about 

4 months, so he cannot fix it basically overnight. But, again, I have 

been encouraged in our discussions, by what I see him doing at the 

GSA, at the Public Building Service. 

And the time is ripe. I do not want to go all over the numbers, 

which Mr. Barletta put out there so well, but this is a great opportunity for us to save a billion dollars. It is a great opportunity for 

us to look at things and do them in a different way. And it is not 

something that we want to do, it is something we have to do. 

And just a couple of days ago, I guess last week, the Old Post 

Office Building, groundbreaking with the Trumps coming in and 

redeveloping it. I understand that this is the first in a long period 

of time that we have done that. I guess the Hotel Monaco was the 

last one to my knowledge. And so again we need to be looking and 

learn from this opportunity. Talking with the Trumps and their organization, what was good, what was bad. 

I know Mr. Barletta had a hearing in New York City on this 

issue, and Ivanka Trump testified. And she had some positives, 

and she had some negatives. And, again, we really need to learn 

from that as we move forward. 

And, again, this billion-dollar savings I believe is the tip of the 

iceberg. There are many buildings around Washington, around the 

country, that we can have the private sector come in and utilize 

their money to rehabilitate these buildings and put them back into 

use, which I think is something, as former Chairman Mica always 

stresses, being a former developer, on the opportunity we have to 

do this. 

So I am very pleased that everybody is here today. I am pleased 

that Mr. Carson and Mr. Barletta are exploring this and have been 

for many, many months now. So, again, thank you all for being 

here and thank you, Mr. Chairman. 

Mr. BARLETTA. Thank you, Mr. Chairman. Before we begin, I 

would like to welcome Mr. Webster. Very happy he is participating 

today, he has a big interest in what is going on. And I ask unanimous consent that Mr. Webster of Florida, who is a member of the 

Transportation and Infrastructure Committee, be permitted to participate in today’s subcommittee hearing. Without objection, so ordered. 

On our panel today, we have Mr. Norman Dong, Commissioner, 

Public Buildings Service, General Services Administration; the 

Honorable Joyce A. Barr, Assistant Secretary, Bureau of Administration, U.S. Department of State; Mr. William Brazis, Director, 

Washington Headquarters Services, U.S. Department of Defense; 

Mr. Michael H. Allen, Deputy Assistant Attorney General for Policy, Management and Planning, Justice Management Division, U.S. 

Department of Justice; Mr. E.J. Holland, Jr., Assistant Secretary 

for Administration, U.S. Department of Health and Human Services; Mr. Jeffery Orner, Chief Readiness Support Officer, U.S. Department of Homeland Security; and Mr. Peter Spencer, Deputy 

Commissioner, Office of Budget, Finance, Quality, and Management, Social Security Administration. 

I ask unanimous consent that our witnesses’ full statements be 

included in the record. Without objection, so ordered. 

5 

Since your written testimony has been made a part of the record, 

the subcommittee would request that you limit your oral testimony 

to 5 minutes. 

Mr. Dong, you may proceed. 

TESTIMONY OF NORMAN DONG, COMMISSIONER, PUBLIC 

BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION; HON. JOYCE A. BARR, ASSISTANT SECRETARY, BUREAU OF ADMINISTRATION, U.S. DEPARTMENT OF STATE; 

WILLIAM E. BRAZIS, DIRECTOR, WASHINGTON HEADQUARTERS SERVICES, U.S. DEPARTMENT OF DEFENSE; MICHAEL H. ALLEN, DEPUTY ASSISTANT ATTORNEY GENERAL 

FOR POLICY, MANAGEMENT, AND PLANNING, JUSTICE MANAGEMENT DIVISION, U.S. DEPARTMENT OF JUSTICE; E.J. 

HOLLAND, JR., ASSISTANT SECRETARY FOR ADMINISTRATION, U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES; 

JEFFERY ORNER, CHIEF READINESS SUPPORT OFFICER 

AND AGENCY SENIOR REAL PROPERTY OFFICER, U.S. DEPARTMENT OF HOMELAND SECURITY; AND PETER D. SPENCER, DEPUTY COMMISSIONER, OFFICE OF BUDGET, FINANCE, QUALITY, AND MANAGEMENT, SOCIAL SECURITY ADMINISTRATION 

Mr. DONG. Good morning, Chairman Barletta, Chairman Shuster, Ranking Member Carson and members of the subcommittee. 

My name is Norman Dong, and I am the Commissioner of the Public Buildings Service at GSA. 

Our mission is to deliver the best value in real estate, acquisition 

and technology services to Government and to the American people. And when it comes to leasing, this means reducing costs and 

improving space delivery, which allows our partner agencies to 

focus their resources on core mission needs. 

I would like to make three points this morning. First, GSA is focused on improving utilization throughout our portfolio, including 

in our lease space. We hold more than 375 million square feet of 

space, half of which is distributed among 9,000 leases across the 

country. And we are working with Federal agencies to improve utilization throughout our owned and leased portfolios. And, as a result, we have saved millions of dollars for our Federal partners and 

for the American taxpayer. 

For example, in our fiscal year 2014 prospectus level leases, GSA 

and our partner agencies proposed a 13-percent square footage reduction, going from 4.3 to 3.7 million square feet. We are doing this 

by helping Federal agencies adopt new workplace arrangements 

and develop mobile work strategies so more people can work in less 

space. 

Our client portfolio planning process helps agencies identify opportunities to co-locate and consolidate their space and right-size 

their inventories. And our Total Workplace Program helps agencies 

address the cost of furniture, IT and other upfront expenses that 

would otherwise prevent them from consolidating their space. 

Second, within our leasing program, our top priority is to reduce 

cost by improving long-range planning and broadening competition. 

As this committee has pointed out, GSA has an unprecedented opportunity to reduce the cost of Federal real estate needs over the 

6 

long term. More than 59 percent of GSA’s leases will expire over 

the next 5 years. And this year we have 10.7 million square feet 

of lease space expiring in the National Capital Region alone. 

We still can capitalize on favorable market conditions while average rates remain below their peak levels. As I mentioned earlier, 

our strategy for leasing requires better workload management and 

better improved long-range planning. We need to start working 

with agencies to develop requirements at least 36 months prior to 

lease expiration and to issue advertisements at least 18 months 

prior to expiration. And we will be managing to these benchmarks 

to allow more time for competitive procurements that prevent costly holdovers and extensions. 

And at the same time, we must broaden delineated areas and 

simplify specialized requirements to generate greater competition 

and more favorable rates. 

In addition, GSA is moving away from the days of replacing expiring leases at a one for one ratio. Many of our fiscal year 2014 

prospectuses address three or more lease expirations. For example, 

we are seeking a lease for the Department of Justice that will replace four different expirations across the District of Columbia. 

And we are improving utilization from 184 square feet to just 130 

square feet of office space per person through this process. 

By improving our upfront planning, taking a more flexible approach to delineated areas and seeking longer term lease arrangements, we are better positioning the Federal Government to take 

advantage of existing market conditions. 

My third point is this: While today’s hearing is about our shared 

efforts to reduce leasing costs, GSA’s first priority is to maximize 

the use of our federally owned inventory. Our fiscal year 2015 capital plan continues our work to consolidate agencies out of expensive leases and into federally owned space. 

In Detroit, for example, we are exercising an option to purchase 

a lease property on Michigan Avenue. This will allow GSA to renovate and backfill the building with agencies housed in four other 

leases. And this project will save the Federal Government about 

$11 million each year. 

GSA will also continue DHS consolidation at St. Elizabeths. Last 

year, we opened a new headquarters building for the Coast Guard. 

And our fiscal year 2015 budget request allows us to complete the 

infrastructure needed to fully occupy the Center Building Complex 

and to move additional DHS components to St. Elizabeths. 

And we are also maintaining our emphasis on large-scale consolidation projects. Our budget request this year reflects another $100 

million to support agency efforts to co-locate, consolidate and reduce their footprint. As with current projects, we are showing how 

these upfront investments and agency consolidation will help reduce the real estate footprint and save money on agency leasing 

costs. 

These investments are absolutely central to GSA’s and this committee’s work to reduce leasing costs and to shrink the Government’s real estate footprint. We appreciate the fact that this committee approved 27 GSA prospectuses earlier this month. 

Thank you for the opportunity to speak with you. Our work at 

GSA continues to benefit from our strong partnership with this 

7 

committee. I look forward to continuing to work with you, and I 

welcome your questions. 

Mr. BARLETTA. Thank you for your testimony, Mr. Dong. Ms. 

Barr, you may proceed. 

Ms. BARR. Chairman Barletta, Ranking Member Carson and 

members of this subcommittee, my name is Joyce Barr, and I am 

the Assistant Secretary of the Bureau of Administration at the 

State Department. Thank you for inviting me to testify today. 

The State Department is a relatively small part of GSA’s overall 

real estate holdings, accounting for approximately 2 percent of its 

nationwide portfolio. Approximately half of the domestic real estate 

that the Department occupies is Government-owned space and half 

is leased, primarily in the metropolitan areas. State Department 

personnel are housed in about 150 facilities across the country. We 

are the sole tenant in roughly half of these locations. In the remainder, we are co-located with other Federal organizations and 

other entities, mostly in Federal space. In addition, under special 

legislative authority, we own nine properties. 

We have a close relationship with the GSA to acquire space to 

meet our operational needs, and we depend on their expertise and 

experience in real property management to meet U.S. mission requirements domestically. 

The Bureau of Administration, which I head, is responsible for 

defining and validating the Department’s evolving real estate requirements, coordinating with GSA in acquiring facilities and in 

managing the costs of those assets effectively. Our many missions 

shape and add complexity to our overall domestic real estate strategy. 

As a member of the national intelligence community, the Department must meet certain operational security directives, which can 

increase costs under certain circumstances, such as when we move 

operations. Bureaus within the State Department are heavily integrated and must continually collaborate to effectively support the 

numerous policy and operational requirements of 275 U.S. embassies and consulates abroad. Therefore, we strive to co-locate bureaus together to foster that collaboration. And depending upon the 

need, place them as close as possible to headquarters in Foggy Bottom. 

At the same time, back office functions, like passport production 

and financial activities, are located in lower cost areas, like Portsmouth, New Hampshire or Charleston, South Carolina. Mail and 

shipping operations supporting overseas posts, along with the Department’s IT support, are also located outside of the Washington, 

DC, metropolitan area. 

These operational factors have guided State’s overall domestic 

real estate strategy for 25 years. We wholeheartedly endorse the 

goal of reducing leasing costs to the greatest extent possible. We 

recognize the need to minimize our real estate footprint and have 

been reducing our space allocation per person within our properties 

as opportunities arise. For example, GSA recently leased the Old 

World Bank Building on our behalf, enabling us to consolidate our 

Bureau of Consular Affairs from five separate locations. By incorporating space utilization benchmarks consistent with Federal and 

8 

private sector trends, we can now accommodate approximately 30 

percent or 600 more personnel in the same space. 

The Department has also made it a priority to operate facilities 

smartly by integrating energy conservation and environmental sustainability principles into our day-to-day activities. 

We have a great partnership with the GSA. They have been instrumental in helping us to identify the most suitable real estate 

opportunities to meet our long-term office space needs. 

On behalf of the American taxpayer, we practice good stewardship of the Department’s real estate assets, and we will continue 

our efforts to increase efficiencies in order to obtain the best value 

for each dollar spent. 

Thank you for the opportunity to appear today. And I welcome 

any questions you may have. 

Mr. BARLETTA. Thank you for your testimony, Ms. Barr. Mr. 

Brazis, you may proceed. 

Mr. BRAZIS. Good morning, Chairman Barletta, Ranking Member 

Carson and members of the subcommittee. Thank you for the invitation to discuss the Department of Defense’s lease space portfolio, 

particularly in the National Capital Region, and especially to express the Department of Defense’s commitment to continue to substantially reduce our lease footprint and lease costs. 

I am Bill Brazis, Director of the Department of Defense Washington Headquarters Services—WHS—and responsible for managing key Government-owned facilities, as well DOD’s leased facilities here in the National Capital Region—NCR. This portfolio includes the Pentagon Reservation, the Mark Center, and a number 

of other smaller Government-owned buildings. And in addition, the 

Department of Defense has, at the end of fiscal year 2013, nearly 

6.5 million square feet of leased space, secured by over 100 leases 

in 82 buildings here in the National Capital Region. Together, 

these facilities house over 70,000 Defense personnel, supporting the 

military departments and the Defense agency missions. 

The current lease portfolio in the National Capital Region reflects substantial recent reductions that have occurred in our 

leased facilities since 2005. Under BRAC 2005, by the end of 2012, 

the Department of Defense has shed over 3 million square feet of 

our leased space inventory in the National Capital Region, primarily by relocating to Government facilities on military installations, both within the NCR and outside of the NCR. 

Today, WHS is engaged heavily with the General Services Administration and our plan is to continue to substantially reduce 

DOD’s overall NCR leased space portfolio and our cost over the 

next 5 years. 

In the current program budget review, the Secretary of Defense 

has directed another 20-percent reduction from our 2013 NCR 

leased space levels, commensurate with reductions in DOD headquarters. 

DOD works in direct and strong partnership with the GSA to 

strategically optimize our leased space to satisfy DOD’s mission requirements. To do so, the Department plans on continuing to leverage GSA’s expertise to achieve cost-effective and quality leases 

while transitioning from expiring leases. 

9 

In addition, we are leveraging GSA’s leading edge space management tools to optimize space usage and improve our utilization of 

all our facility spaces, both Government-owned and leased. 

DOD is committed to effectively managing and drawing down its 

lease space inventory while executing its national defense mission. 

Our twin goals of improved utilization of existing Governmentowned space while minimizing our leased space inventory permits 

shifting of taxpayer resources to support the mission and reduce 

our overhead costs. 

Thank you for the opportunity to appear hear today. I am happy 

to answer any questions. 

Mr. BARLETTA. Thank you for your testimony, Mr. Brazis. Mr. 

Allen, you may proceed. 

Mr. ALLEN. Good morning Chairman Barletta, Ranking Member 

Carson, and distinguished members of the subcommittee. I appreciate the opportunity to discuss with you today the Department of 

Justice’s challenges and opportunities in reducing the cost of real 

property leased through GSA. We certainly share your commitment 

to achieving taxpayer savings in today’s real estate market. 

Given the Department’s size, number of locations and unique 

mission requirements, leasing through GSA is delegated to each of 

the Department’s major components and bureaus, including the 

FBI, DEA, BOP, ATF, Executive Office for U.S. Attorneys, U.S. 

Marshals Service, Executive Office of Immigration Review, and Office of Justice Programs. 

The Justice Management Division provides departmentwide real 

property guidance, policy and oversight. We also manage GSA leasing for the headquarter components in the National Capital Region, 

amounting to approximately 15 percent of DOJ’s portfolio. 

Under the leadership of Attorney General Eric Holder, DOJ has 

been committed to cost savings by effectively managing our real 

property and improving utilization efficiencies. For instance, the 

Department successfully reduced our overall square footage in fiscal year 2013 from the fiscal year 2012 benchmark level. In addition, we continue to work closely with GSA to acquire leases that 

offer more efficient and cost-effective space to meet DOJ’s varied 

mission requirements. 

As this subcommittee has emphasized, we too support negotiating longer term leases wherever possible to maximize savings. In 

fiscal year 2013, the Department developed a revised real property 

cost savings and innovation plan to support OMB’s ‘‘Freeze the 

Footprint’’ initiative. The Department’s plan focuses on office and 

warehouse space, covers new construction and renovation projects, 

lease consolidations, replacement and succeeding leases, as well as 

disposal of owned and leased assets. 

The plan covers fiscal years 2013 through 2015 and highlights 

the benefits of effective real property management and initiatives 

and the substantial savings that can be generated through space 

and operating cost reductions. 

I would also like to take this opportunity to thank the subcommittee for its support and approval earlier this year for the 

first in a series of prospectus level projects here in Washington, 

DC. These projects will dramatically reduce our space usage by 

more than 25 percent for our headquarter litigating divisions. We 

10 

also have other projects now in the pipeline that will continue our 

efforts to reduce our square footage and provide substantial cost 

savings in the out years. 

As to the number of GSA leases expiring in the near future, we 

also recognize the challenges and opportunities identified by this 

subcommittee. Between fiscal years 2015 and 2020, the Department will have nearly 900 leases expiring nationwide. Our components have been working diligently with GSA on renewal and replacement strategies that identify opportunities for improved efficiencies and take advantage of today’s favorable real estate market 

conditions. 

We continue to work with our components as well to manage 

both our owned and leased real property while also pursuing new 

workplace strategies to better utilize our portfolio and save money. 

Thank you again for the opportunity to discuss the Department 

of Justice’s important work in this area, and I look forward to answering any questions you might have. 

Mr. BARLETTA. Thank you for your testimony, Mr. Allen. Mr. 

Holland, you may proceed. 

Mr. HOLLAND. Good morning, Chairman Barletta, Ranking Member Carson, and members of the subcommittee. My name is E.J. 

Holland, Jr. I am the Assistant Secretary for Administration at the 

U.S. Department of Health and Human Services. 

Under the leadership of former Secretary Kathleen Sebelius and 

our new Secretary Sylvia Burwell, the Department has continued 

its commitment to save taxpayer dollars through effective management of our real property assets, improve utilization through reduced space requirements and pursue alternative workplace strategies that increase utilization and reduce costs. 

At the end of fiscal year 2013, HHS had over 4,000 real property 

assets. We recognize that moving from GSA-leased space to GSAowned space will save taxpayer dollars and have taken steps to 

consolidate space from leased locations into GSA-owned space 

where it is available. 

A prime example is the ongoing consolidation of the Food and 

Drug Administration on its White Oak Campus. Completion of the 

current master plan and consideration of further consolidation 

under that campus will further reduce our leased footprint. 

The Mary E. Switzer Building, a few blocks from here, consolidation is another project and an example of moving current leases 

into GSA-owned space. The Switzer Building was identified to accommodate not only the headquarters of the consolidated Administration for Children and Families but also the Administration for 

Community Living, the Office of the National Coordinator for 

Health Information Technology, the Departmental Appeals Board, 

several components of the Office of Assistant Secretary for Health 

and other components of the Office of the Secretary. 

They were scattered in seven leased locations and two federally 

owned buildings across the Southwest Complex area just a bit west 

and south of here. This project will reduce HHS’s footprint of 

leased space by over 349,000 rentable square feet. And HHS is 

moving what would have been more than $17 million in private 

sector lease payments to the Federal Building Fund payments. 

11 

We also have taken advantage of the GSA’s fiscal year 2014 omnibus appropriations for consolidation activities, which funds loans 

to agencies for consolidation projects. We submitted funding to consolidate the Office of the Chief Information Officer—OCIO—another group which reports to me, into an alternative workplace 

pilot within the Humphrey Building, again about two blocks from 

here, creating a more effective and collaborative work environment 

for the OCIO team. 

As a result, OCIO’s usable square feet will be reduced by approximately 34,000 square feet or 50 percent. After consolidating 

into the Humphrey Building, the Office of the Chief Information 

Officer’s utilization rate will be reduced from 207 square feet per 

person to 103 square feet per person. 

As evidenced by that low rate, this is our first opportunity to create a showcase space for employee mobility in our headquarters 

building, a strategic goal for HHS in its efforts to reduce its footprint. Additionally, this project will save HHS approximately 

$750,000 in annual rent cost and further reduce our footprint of 

leased space by over 35,000 square feet for the OCIO portion. 

We submitted our initial ‘‘Freeze the Footprint’’ plan for fiscal 

year 2013 through 2015 in September of 2013. An update was submitted in May of 2014. As outlined in that plan, we face several 

challenges in adhering to our plan. There were a number of large 

lease acquisitions and construction projects that were underway 

but not included in the baseline. Those projects will add 1.8 million 

square feet of space to our footprint over the next 2 years. 

Other challenges for us are the recent legislative mandates from 

this Congress that have asked us to do additional things and require increases in staff. This means there will in fact be some temporary additions to our real property footprint, but we will achieve 

the reduced footprint effort by 2016. 

We also find that a significant challenge is the upfront costs 

needed to support consolidations and more efficient space utilization. We simply do not have a realistic way to do capital improvements. As a result, we have taken advantage of GSA’s Total Workplace Program for a number of our larger projects. However, not 

funding upfront capital investments in furniture, fixtures and 

equipment has a direct impact on the immediate return on investment and short term, 3 to 5 years, it actually increases our operating costs. 

We are committed to generating savings for the taxpayers 

through better utilization of our real property assets. The President’s management agenda benchmark recently demonstrated we 

are making progress in improving utilization of our office assets, 

but we also know opportunities remain for even better utilization. 

We recognize that our leased inventory is an opportunity to reduce costs, and we continue to work closely with GSA to identify 

opportunities for improved efficiencies in our lease portfolio. 

Thank you for the opportunity to appear today. And I do welcome 

your questions. 

Mr. BARLETTA. Mr. Holland, I am very impressed. Your agency 

is a good example of what we are trying to achieve. You are not 

only talking about it, but you are actually doing it. 

Mr. HOLLAND. Thank you, sir. 

12 

Mr. BARLETTA. Thank you for your testimony. Mr. Orner, you 

may proceed. 

Mr. ORNER. Thank you, Chairman Barletta, Ranking Member 

Carson, and members of the subcommittee for the opportunity to 

testify today. I am DHS’s Chief Readiness Support Officer and Senior Real Property Officer. I am a career civil servant with 32 years’ 

experience in the Federal Government, including positions in the 

Department of the Navy, Coast Guard and now DHS headquarters. 

I manage DHS real estate, mobile assets, environmental compliance and logistics with a goal of providing your dedicated workforce 

with the operational tools and support they need to keep our Nation safe at a reasonable cost to the taxpayers. 

Today, I will discuss how the Department, with General Services 

Administration support, will consolidate our footprint and save 

money while supporting the DHS mission. 

DHS’s real property portfolio consists of 38,000 properties with 

99 million square feet of space. Half of our real property is DHS 

owned and the remainder is leased. Additionally, half of our space 

is operational mission space and personnel housing. And the other 

half is predominately office space. Lease payments account for 82 

percent of our annual real estate costs at $1.7 billion annually. 

In support of our frontline mission, we at DHS continue to improve our management of real property with the support we receive 

from GSA. In addition, the administration’s ‘‘Freeze the Footprint’’ 

initiative has proved to be of immense value to the Department of 

Homeland Security. 

In 2010, DHS and GSA began a partnership to improve our use 

of space by conducting a space use analysis in the National Capital 

Region. That partnership was delivering benefits and specifically 

the workforce recommendations report, which validated that an average office utilization rate of under 150 square feet per person is 

a reasonable and achievable target, and more so when mobility and 

telework becomes part of the equation. 

It also reinforced that real estate decisions are long lead time decisions. Additionally, this partnership and report is assisting with 

educating, training and change management throughout the Department in our space decisions. 

The key is that our organization has internalized the concept of 

efficient use of space, which is a critical step required to understanding and delivering a new way of managing space. 

We in DHS view lease expirations as an ideal opportunity for 

consolidation and economy. Over the next 5 years, 15 million office 

square feet nationally will be expiring. This is 27 percent of our 

total leased building portfolio and 48 percent of our office leased 

buildings. We have a 5-year plan, and we are monitoring all expirations to ensure that the Department’s footprint and lease costs are 

optimally managed to deliver footprint reductions. 

We started with my own offices in DC whereas the successful 

proof of concept, we reduced our footprint by 60 percent for over 

$1 million in annual savings. 

Another example of DHS and GSA as partners in delivering real 

estate solutions is the significant efficiencies that we will be achieving in the new space at One World Trade Center in lower Manhattan. CBP will realize a 45-percent reduction in occupied space by 

13 

implementing more flexible space design and incorporating mobile 

work for place concepts. This occupancy will result in space that 

meets mission needs at a cost avoidance of $5 million annually as 

a result of space compression. Despite challenges related to distance, culture, changed management and adopting new work practices, DHS headquarters, Customs and Border Protection and GSA 

worked together to achieve this. 

A 10-year period of growth in the DHS lease portfolio has leveled 

off. We expect modest declines in the footprint in the short term, 

but the 10-year opportunity created by lease expirations will build 

momentum towards significant future reductions as a result of the 

Department’s 150 square foot per person requirement. Particularly 

over the next decade, 70 percent of our office space leases will expire, and we plan to achieve a 20-percent reduction and meet our 

mission while paying for 4.4 million square feet less than we occupy today. 

Real estate reduction strategies for the Department’s office locations are the focus of our fiscal year 2015 work plan. Ten major cities contain in excess of 7 million square feet of DHS office space. 

For those top 10 field locations, we have assessed the requirements 

cost and expiration dates of existing leases to develop plans for 

lease compression, consolidation and cost reduction. 

The National Capital Region currently has 10 million square feet 

of DHS office space. Here, DHS continues to work with GSA on our 

headquarters consolidation project. Consolidation will allow the 

strategic realignment of the real property portfolio in the National 

Capital Region to more effectively support our mission. 

DHS continues currently to occupy over 50 separate locations in 

the National Capital Region at an average space utilization of 200 

square feet per person. Consolidation will contribute to reducing 

the number of locations and will bring our utilization rate below 

the 150 square feet standard, lower facility costs and provide quality work space for our workforce. 

Finally, I am happy to point out that DHS submitted our revised 

real property cost savings and innovation plan to OMB in September 2013 and established its 48 million square feet of fiscal year 

2012 office space as our baseline. And we provided an update in 

May of 2014 that indicates we are meeting the ‘‘Freeze the Footprint’’ guidelines. 

In closing, DHS will continue to aggressively pursue real property strategies in partnership with GSA. We will lead departmental 

efforts to exceed the ‘‘Freeze the Footprint’’ objectives and our ultimate goal remains to perform our mission support with effectively 

designed space for the way we work today without sacrificing mission effectiveness for our employees on the front line of Homeland 

Security. 

I very much appreciate the opportunity to testify before you 

today, and I look forward to answering your questions. 

Mr. BARLETTA. Thank you for your testimony, Mr. Orner. Mr. 

Spencer, you may proceed. 

Mr. SPENCER. Chairman Barletta, Ranking Member Carson, 

members of the subcommittee, thank you for inviting Social Security to testify today. My name is Pete Spencer. I am the Deputy 

Commissioner for Budget, Finance, Quality and Management. I am 

14 

also the agency’s Chief Financial Officer. I retired after 44 years 

of service in 2011 and came back last March because I am concerned about the budgets that we face and how we can restrict 

spending to make sure we meet both the needs of the American 

public for Social Security services and at the same time protect the 

investment of the American taxpayer. 

We are delighted to be part of this discussion this morning. We 

are looking forward to learning about proven practices that you all, 

as members of this subcommittee, can share with us as we move 

forward here. 

I have three main points that I want to discuss today. First, we 

fully support and appreciate the work of this subcommittee. There 

is no question about the number of issues that you have identified 

for us, and we look forward to learning the proven practices from 

others. 

Number two, we have a strong relationship with GSA, and we 

are working together to reduce our usable square footage and our 

annual rent costs. Unlike other agencies, however, we do not own 

property nor do we have direct leasing authority. GSA handles all 

of that for us. 

Third, I think you all know that we have a unique communitybased organization that requires a strong national network of field 

facilities in order to serve our public, whether that is in Hazleton 

or whether it is in Indianapolis or whether it is in Orlando or 

whether it is in the District or whether it is in Glen Burnie. Our 

local offices are there to serve, and that is part of our real estate 

footprint. 

Few programs touch as many lives as ours do. To help the millions of people we serve, we must maintain this network of offices 

across the country. It is not surprising then that we are GSA’s 

fourth largest customer in commercial leases and the fifth largest 

customer in rent costs. We are fully committed to maintaining our 

local field facilities across the country in order to serve the public. 

Our ‘‘Freeze the Footprint’’ plan is not based on consolidating local 

offices in our communities. 

I want to underscore the fact that we continue to be an efficient 

organization. Our administrative costs are only 1.4 percent of the 

benefit payments we pay each year. We are very proud of our efficiency at Social Security. 

Given the unique characteristics of our real estate portfolio, we 

are pleased to report that we have decreased our usable square 

footage by more than 330,000 square feet in fiscal year 2013 compared to the 2012 baseline. We will reduce our square footage by 

the end of 2014 by 1 million square feet and by the end of 2015 

by 2 million square feet. 

GSA has worked with us to achieve our goal of freezing our footprint, and they have also worked with us to lower our current annual rental costs. For example, we collaborate with GSA, as you 

have suggested Mr. Chairman, to identify opportunities to reduce 

our rent in targeted markets by extending the lease terms and negotiating a lower rental rate in our existing leases. So, for example, 

in Salinas, California, GSA extended the lease terms and was able 

to lower the rent by $7.50 per square foot. Based on that reduced 

rent, the projected rent savings over the subsequent 5-year period 

15 

is about $3 million. That is a good example of doing what you have 

asked us to do. 

That example, in addition to initiatives I have outlined in my 

written testimony, will help us reduce total usable space. I need to 

quickly add, however, that these savings may not be good enough 

to offset projected increases in rent costs. In many cases, cost increases are due to the cost of improvements that must be made to 

many of our local offices in order to provide security for the in-person service that we give. But the savings mentioned above certainly will help us offset most of those costs. 

In conclusion, we are delighted to have the opportunity to work 

with you, Mr. Chairman, and the subcommittee. We look forward 

to your ideas on how we could better manage our lease property 

in an efficient and cost-effective way. 

Thank you, and I will be glad to answer any questions you may 

have. 

Mr. BARLETTA. Thank you for your testimony, Mr. Spencer. I will 

now begin the first round of questions, limited to 5 minutes for 

each Member. If there are additional questions following the first 

round, we will have additional rounds of questions as needed. 

To start, this question is for all panelists. Each of your agencies 

have been directed by the President to cut your real estate costs. 

You also have heard there is a limited window of opportunity to replace your expiring leases with good long-term deals that improve 

utilization rates and save significant dollars. Will you commit to 

work with our committee to seize this opportunity, replace these 

leases on time and achieve the President’s savings goal? And I 

would appreciate a response from each agency. 

Ms. Barr? 

Ms. BARR. Of course. We have for the last 25 years been guided 

by a strategy where we are trying to make sure that we serve the 

taxpayer by offering the lowest cost for the longest term lease. And 

we also, in order to facilitate the way we work together, provide opportunities for our bureaus to collaborate since much of our business is conducted overseas. 

In that vein, we have consistently for a number of years tried to 

get into owned space. And recently we were able to acquire property across the street from the State Department, Potomac Annex 

from the Navy. It took us quite a while to finally finalize this 

transfer, but it is 7 acres. It will give us an opportunity to look at 

all of our real estate in the DC metro area and move them out of 

high-cost space into lower cost space. 

Mr. BARLETTA. Thank you. If I could have a brief answer as we 

go through. Thank you for that information. Mr. Brazis? 

Mr. BRAZIS. Mr. Chairman, yes, the Department of Defense is 

committed. We, in fact, have been working with the GSA very 

closely in looking at the 82 buildings that we are in today to come 

up with a strategic plan with them, looking over the next 5 years 

to aggressively achieve that 20-percent drawdown. And GSA has 

really helped lead us in this analysis, looking across the portfolio, 

to commit longer term leases, and use anchor buildings that we are 

trying to move folks into to help get out of more leases. 

Mr. BARLETTA. Thank you. Mr. Allen? 

16 

Mr. ALLEN. Mr. Chairman, yes, we commit and we believe we 

have already begun that process with our latest prospectus here in 

the Washington, DC, area. 

Mr. BARLETTA. Thank you. Mr. Holland? 

Mr. HOLLAND. Yes, Mr. Chairman, we commit to that. We will 

continue doing precisely what you have suggested we ought to be 

doing. 

Mr. BARLETTA. Mr. Orner? 

Mr. ORNER. Absolutely, we enthusiastically make that commitment, and we appreciate the subcommittee’s leadership on this 

issue. 

Mr. BARLETTA. Thank you. Mr. Spencer? 

Mr. SPENCER. Absolutely, Mr. Chairman. Fifty-two percent of our 

leases expire in the next 5 years. I have a list of them right here. 

We are working through the list as we speak. 

Mr. BARLETTA. Very good, thank you. Short-term leases cost your 

agencies and the taxpayer an extra 20 percent in lease costs. 

Leases over 10 years can save an additional 10 percent or more 

and cover much of your upfront relocation costs. Yet, the number 

of short-term extensions is growing each year. Will you commit to 

replacing your long-term lease requirements with leases that are at 

least 10 years? And I would appreciate a brief response from each 

agency. Ms. Barr? 

Ms. BARR. Yes. 

Mr. BRAZIS. Yes, to every extent possible. 

Mr. BARLETTA. OK. Mr. Allen? 

Mr. ALLEN. Yes. 

Mr. HOLLAND. Yes, sir, that is our objective. 

Mr. BARLETTA. Mr. Orner? 

Mr. ORNER. Yes, we make that commitment. 

Mr. SPENCER. Yes, sir. 

Mr. BARLETTA. Each of your agencies have 50 percent to 70 percent of your leases expiring in 5 years. Reducing these costs by 

even 10 percent will result in a $300 million saving annually. How 

far in advance does the work need to begin to prepare for expiring 

leases, particularly larger prospectus level leases? And are your 

agencies on track with your expiring leases so that we do not see 

holdovers or costly short-term extensions? Ms. Barr? 

Ms. BARR. The first part of your question was how far are we on 

track? 

Mr. BARLETTA. Yes, how far in advance does the work need to 

begin to prepare for these expiring leases, particularly the larger 

prospectus level leases? 

Ms. BARR. We usually start working with GSA like 3 years in advance, like Mr. Dong mentioned before. And we are in constant 

conversations with GSA about these leases and trying to put them 

into more cost-effective—— 

Mr. BARLETTA. And are you on track with your expiring leases 

so that we do not see holdovers? 

Ms. BARR. We are now. 

Mr. BARLETTA. OK, thank you. Mr. Brazis? 

Mr. BRAZIS. We need 2 to 5 years in advance, and we are working with GSA right now looking down range in the next 3 to 5 

years. There are some leases that we may end up vacating entirely 

17 

that may require some short-term periods so that we can get into 

the longer term strategy. Our goal is to get into anchor buildings 

that have longer term leases. Our more recent ones do. To the extent that we need some time to get out of situations we are in now 

to get into longer term leases, they require some shorter term 

leases. 

Mr. BARLETTA. Mr. Allen? 

Mr. ALLEN. We agree with the 36 months. And I would say that 

where we are trying to consolidate leases, there may be some shortterm extensions to marry up the expirations. 

Mr. BARLETTA. Mr. Holland? 

Mr. HOLLAND. Mr. Chairman, I am not sure there is a date that 

I could say 36 or 48. When I arrived here 5 years ago after having 

been safely ensconced in Kansas for a long time, I found that we 

had a major project that we are still working on that started in 

2006. So my view is that we should be doing what GSA asked us 

to do 4 years ago, and that is to participate in an ongoing portfolio 

review. 

I received a call out of the blue one morning from somebody I did 

not know, and he said, ‘‘Mr. Holland, will you do this?’’ I did the 

wrong thing as a manager. I did not go down the hall and talk to 

my folks. I said, ‘‘Yes.’’ And we have been doing that ever since. 

And so I view it as an ongoing project. There will be some holdovers because as we try to consolidate two, three, four, six different 

divisions into a single space, the lease expirations will not be at the 

same time. So in some cases, we will have to have short-term extensions. We have no choice. But if the ultimate objective is to get 

a bunch of different functions into a single building, I think it will 

be worth that effort. 

Mr. BARLETTA. Mr. Orner? 

Mr. ORNER. We begin working with GSA on lease expirations at 

least 3 years in advance of the lease expiring. That can be up to 

5 years if it is a particularly complex project. And we are interested 

in long-term leases to save money for the taxpayers. And we would 

only allow a short-term extension in order to synchronize projects 

so that we can consolidate our operations. 

Mr. BARLETTA. Mr. Spencer? 

Mr. SPENCER. Yes, sir, Mr. Chairman. We certainly want to start 

well in advance, and we do that. We have very few short-term 

leases. I will just say in defense of GSA that in some situations— 

and this is a place where I think the subcommittee can help us— 

we find that not always are we able to find someone who is willing 

to give us space on the commercial market. Believe it or not, some 

of the areas in which we have to locate our offices are lower economic areas—not necessarily areas in which somebody wants to 

build a building or give us space that we might be able to use. 

But the bottom line is each situation requires us to look well in 

advance to make sure we do not have short-term leases. It is our 

goal not to have any. 

Mr. BARLETTA. Thank you. I would like to recognize Ranking 

Member Mr. Carson for questioning. 

Mr. CARSON. Thank you, Chairman Barletta. Mr. Dong, can you 

please discuss the selection of the three sites for the new FBI headquarters and how that fits into the ‘‘Freeze the Footprint’’ initiaVerDate Aug 31 2005 12:29 Nov 10, 2014 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\ED\7-30-1~1\88927.TXT JEAN
18 

tive? And are you building a building or are you building a campus? And if you are unable to receive the full cost of a replacement 

facility with the value of the current headquarters, how will GSA 

and the FBI effectively make up the difference? 

You might need to use Madam Barr’s microphone, sir. Thank 

you. 

Mr. DONG. One more time, OK. 

Mr. CARSON. There we are. 

Mr. DONG. There we go. 

Mr. CARSON. Alright. 

Mr. DONG. As you mentioned, GSA announced the short list of 

potential sites for the FBI headquarters yesterday. That process 

was the product of a thorough review and evaluation of sites submitted by private bidders as well as federally owned sites against 

criteria that were clearly stated in our initial advertisement thing 

such as delineated area and access to transportation and minimum 

acreage. And through that process the evaluation committee and 

the source selection official identified what they thought were the 

three most viable sites that would meet the FBI requirements. 

You talked about the swap construction process where we would 

be taking the value of the Hoover Building and trading that for 

construction services towards the development of the new FBI 

headquarters facility. What we want to be able to do is to let the 

market tell us what the value is for that building. If there is a potential valuation gap, we want to be able to come back to this committee to talk about options for bridging that gap. 

Mr. CARSON. Thank you. Madam Barr, given the increase in cost 

to real estate in the Foggy Bottom area of DC and Rosslyn, Virginia, do you believe it is in the taxpayers’ interest to reevaluate 

the State Department policy of consolidating in these particular 

markets? 

Ms. BARR. Well, I would like to take 1 minute to just explain how 

we accomplish our mission. Since we are primarily focused on supporting operations overseas, unlike bureaus and other agencies, we 

have to collaborate closely in order to fulfill that mission. For example, when we have to reduce staffing because of security or a 

natural disaster, it takes more than just the Diplomatic Security 

Bureau. It also involves the regional bureau because sometimes 

when we pull people out, that has an impact on our bilateral relationship with those countries. It involves Consular Affairs because 

we have to make sure that we treat private American citizens the 

same as we treat ourselves when it comes to assessing whether 

there are problems there. 

We often have other types of programs, like democracy building, 

that involve other functional bureaus. So when we need to make 

a complicated decision in a short period of time, it often is better 

if we can do it together. 

In addition to that, because we often have security requirements 

and these conversations are easier in those cases if they take place 

in a classified environment, being able to bring people quickly together helps us to do that. We recognize that it is expensive to 

have things located in the Foggy Bottom or Rosslyn area. So for 

those routine things, we make a concerted effort to push them elsewhere. 

19 

For example, we own a facility in Charleston. We have HR and 

financial services there. We pushed some of our Consular Affairs 

production facilities down there because we do recognize that 

money is important, so we only put our high-value things close to 

the Foggy Bottom area. 

Mr. CARSON. Thank you, ma’am. Mr. Spencer, with the over 43 

million Americans visiting your offices annually, the SSA is somewhat different from other agencies before us today because of the 

level of interaction that the SSA has with the public. How does 

that guide your decision as you look to reduce your Federal footprint? 

Mr. SPENCER. It is a challenge for us because we do have to account for the fact that we do have visitors coming into our offices. 

They bring family members with them. So we need space for them. 

As we set our space standards in a local field office, we have a 

standard for the individual employee but also for the individuals 

who are going to be visiting our offices. We have to put both of 

those factors into place when we decide how much space we need 

in a particular office. 

I will also say that we are looking for alternative means of exchanging information with the public, using the Internet more and 

so on. That certainly does guide us as well. 

Mr. CARSON. That is great. Thank you all. 

Mr. BARLETTA. The Chair would like to recognize former chairman of the full committee, Mr. Mica. 

Mr. MICA. Thank you, Mr. Barletta and thank you for carrying 

on an important subcommittee role and conducting this important 

hearing today about trying to get the best deal for the taxpayers, 

particularly on leased property. 

Mr. Dong, how long have you been now in your position? 

Mr. DONG. At GSA? I have been at GSA just 4 months. 

Mr. MICA. Four months, OK. Well, you are not aware of some of 

the history of what has taken place with some of the leases and 

all. But actually back with Mr. Oberstar, I was reminding staff, the 

staff came on some years ago, at the bottom of the recession, I had 

been in real estate. So Mr. Oberstar and I got in a van, maybe Dan 

Mathews was with us. And we looked at vacant properties around 

Washington, DC, because there was a fire sale going on, prices 

were down. And we looked at different places, leases expiring. Not 

too much was done, unfortunately. There were some new leases 

cast but now you are back up again in price. 

This is a list that I was given of vacant properties in just the 

District. And they start from 374,000 contiguous square feet, prices 

from here is $28.78 a square foot. The highest I see up is about 

$61, but most of them in the $40s. 

What are you paying now on average in the District, do you 

know? Guess? 

Mr. DONG. Do not have the exact figure, but I am happy to follow 

up. 

Mr. MICA. But there is lots of property available. There are still 

some good deals, not like there used to be. We will submit that for 

the record and also if staff will provide Mr. Dong with a copy, it 

would be appreciated. 

Mr. BARLETTA. Without objection. 

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Mr. MICA. Thank you. Yesterday, I conducted a hearing, and I 

have been trying to get information that our committee has I think 

back to this subcommittee from OMB on the amount of vacant 

space. Finally, after issuing a subpoena and some threats, we did 

get—I did get a response and got a report just recently on the 

amount of vacant space. 

Now, there are some big offenders here with vacant space. DOD 

is one of the worst. They have a huge inventory of vacant space. 

In fact, this report from OMB identified 7,500 properties or buildings, 3,292 excess buildings or properties and 4,208 underutilized. 

One of things we found from that report is it was incomplete. So 

it is actually much worst than that. 

What are you doing, Mr. Dong, to make certain that we have excess Federal properties—here in the District we have excess Federal properties vacant that we fill them with some of the activities. 

Is that an agenda item that you are looking at—and across the 

country of course? 

Mr. DONG. Absolutely. We want to be able to look at our Federal 

buildings to identify those assets that are underutilized or underperforming and to make sure that at the end of the day, we are 

seeing highest and best use of all of our Federal assets. 

Mr. MICA. OK. 

Mr. DONG. So some examples, we talked about the Old Post Office Building. That is a situation where we saw that that building—— 

Mr. MICA. Well, we have held hearings, this subcommittee, my 

first hearing as chairman, we dragged the staff down there in the 

vacant portion of the building, the Old Annex had been vacant for 

15 years. And nearly half of the 370,000 square feet were vacant 

and losing around $6 million to $8 million a year. Very familiar 

with that one. That is a turnaround. 

But in politics and in GSA, you cannot sit on your laurels or your 

assets, so I am more interested in what we are going to do to move 

forward to fill some of these. 

One of the problems too, you have very limited area. I mean you 

have thousands of buildings and properties but the Federal Government, a lot of them outside your jurisdiction, for example, DOD, 

DOD has huge assets. We do not have a good inventory. 

Now, I just got an inventory of eight vacant or underutilized but 

a good current inventory too of the leased properties, and that is 

something we need to haul OMB in here, Mr. Barletta, and see 

that each agency reports specifically on leased and where they are 

with their leases, et cetera. So what you are doing, we would have 

some handle on how we can get them to move forward. 

And then there are impediments the agencies face. And that is 

something else we need to deal with so they can get rid of those 

things. 

I will give GSA, there is a new—some new kids on the block including Mr. Dong. And some of your folks, the last few months, are 

now looking at more creative ways of leasing and actually of not 

circumventing but dealing with the impediments that Congress or 

law has in place by creatively singling out. We are very supportive 

of that because if it makes sense for the taxpayers, it is very important. 

34 

DHS, I have done everything. I can close down any further new 

buildings for you. We have done—we made a huge mistake, it was 

a committee across the hall, in creating DHS in its current form. 

It is too big. Anyone who ever thought that combining 22 agencies 

and over 200,000 people would be more efficient is not dealing with 

common sense or ability to manage agencies. 

Very concerned. I want to do everything I can to make certain 

you do not build another—a monument to bureaucracy at the St. 

Elizabeths site. We needed to do something with the Coast Guard 

and that has been done and adequate. And we might even look at 

putting some of that property up for sale or leased to the private 

sector. 

Consolidation of some of your leases is a goal, is that right? 

Mr. ORNER. That is correct. 

Mr. MICA. OK. 

Mr. ORNER. We are looking at consolidating our leases nationwide. 

Mr. MICA. Some of that may look—makes sense. And maybe we 

will also have the committee provide you with a copy of some of 

the properties that are available at still some pretty reasonable 

rates. But, again, big bureaucracies require big spaces. My goal is 

to get the size of the bureaucracy down, consolidate the space and 

save taxpayers money. 

I yield back. 

Mr. BARLETTA. Thank you, Mr. Chairman. The Chair recognizes 

Ms. Holmes Norton for 5 minutes. 

Ms. NORTON. Thank you, Mr. Chairman, and I appreciate this 

hearing. I would like to find out from Mr. Orner, I suspect that is 

who I should be asking, the Coast Guard building was planned before the requirement for space utilization reduction. How are you 

reducing space in the Coast Guard building? And will that mean 

you are able to consolidate more of the Coast Guard—into the 

Coast Guard headquarters? 

Mr. ORNER. Congresswoman, you are exactly correct. We did plan 

that before we had our new space standards. It is my estimate that 

we can put up to an additional 1,000 people into the Coast Guard 

headquarters building. Our plan is the Coast Guard has various offices and lease space in Arlington. Our plan is to move all of those 

people as those leases expire into the new Coast Guard headquarters building. 

Ms. NORTON. So you think you could get the entire Coast Guard 

into that one building? 

Mr. ORNER. The entire National Capital Region Coast Guard. 

Ms. NORTON. Yes, of course. 

Mr. ORNER. Yes, and that will save the Coast Guard roughly $7 

million a year in rent. And we may be able to put a couple of other 

offices on top of that. So we will achieve over the next 11⁄2 to 2 

years significantly greater density in that building. 

Ms. NORTON. Excellent. Mr. Dong, what is the effect of reducing 

the footprint or reducing the utilization for employees for these 

agencies that remain in place or are reluctant to move? There is 

this outstanding requirement, their space remains as it is, holdover 

or whatever, especially if they do not move, say they cannot move, 

do not have the money to move? Is there any way to enforce this 

35 

standard or is the only way to enforce it is to have the agency 

move? 

Mr. DONG. We have seen examples of how agencies are able to 

improve their utilization as they stay in their existing space. So if 

we look, for example, at FEMA where their headquarters is at 500 

C Street, they have been able—that is their headquarters building. 

They have been able to dramatically improve the utilization of that 

building. 

Ms. NORTON. That leased space, that was not lease—that was 

leased space? 

Mr. DONG. That is a leased space, but that is an example where 

they had a number of different facilities across the National Capital Region. They were able to reduce the number of facilities by 

putting more of their staff within that headquarters building. So I 

think we are seeing examples across the Government of how agencies recognize that excess spending on real property comes at the 

expense of mission-critical activities. 

Ms. NORTON. So you are requiring the reduction in space even 

for agencies that are remaining in the space and have no intention 

of moving? 

Mr. DONG. We are working with agencies to help them reduce 

their footprint, whether they are in leased space, whether they are 

owned space, we are looking for any and all opportunities to help 

them reduce their spending on real property. 

Ms. NORTON. Mr. Dong, as you know, you own buildings—sorry, 

you lease buildings where the agency has no intention of ever moving. We are virtually buying these buildings. Is there a purchase 

option in every lease or new lease today? 

Mr. DONG. We do not have purchase options in every lease, and 

I would say that the days of bargain purchase options are behind 

us. And we recognize that purchase options are not free. But 

again—— 

Ms. NORTON. Nor is leasing the space over and over again free 

to the taxpayers. 

Mr. DONG. You are absolutely right. 

Ms. NORTON. So I want to know what you are doing with purchase options? What are you doing to acquire space so you have to 

lease less space? You say in your testimony that GSA hopes to 

demonstrate the value of investments that reduce the real estate 

of the footprint. Ms. Barr talked about apparently owning or buying space across from the State Department. Are you looking at 

public-private partnerships, for example, to complete the Department of Homeland Security? 

That first building, the Coast Guard, was finished on time and 

on budget because of annual appropriations. It has been slowed, especially with the reduction in appropriations. But even if there had 

been appropriations as planned on an annual basis, it is very hard 

to build a complex asking the Government to put the money down 

each year. Now, you know, that is not the cheapest way to build 

a building but is there a way to complete, at least some of the 

buildings, using a public-private partnership? And are you investigating that alternative as a way to complete some of the Department of Homeland Security? 

36 

Mr. DONG. Congresswoman Norton, let me come back to the first 

part of your question. As my colleagues have testified, we are seeing some great examples of how agencies are moving from leased 

space into owned space. Assistant Secretary Holland talked about 

the consolidation at the Switzer Building. I mentioned earlier about 

what we are trying to do in Detroit by moving four different lease 

locations into what would be a federally owned building. We are 

seeing some good examples across the Federal—— 

Ms. NORTON. You bought a building in Detroit? 

Mr. DONG. Correct. In terms of St. Elizabeths—— 

Ms. NORTON. That was a purchase option, wasn’t it? 

Mr. DONG. That was a purchase option. In terms of St. Elizabeths, we recognize the current constraints that we are operating 

under. We are open to exploring any and all innovative approaches 

that would allow us to support—— 

Ms. NORTON. Are you exploring a public-private partnership to 

complete the St. Elizabeths complex? 

Mr. DONG. We are open to any and all options for—— 

Ms. NORTON. You are not exploring, you are just open? 

Mr. DONG. We want to make sure that we are looking at all viable options for completing this project. And I know that this is an 

important issue to members of this committee, and we look forward 

to working with you on this. 

Ms. NORTON. I think it was Mr. Holland that mentioned the upfront capital as an impediment to reducing the space. Are you amortizing the cost for any agency that wants to do so and can do so 

in order to take advantage of the need, in order to enforce your 

mandate to reduce the space of each agency? 

Mr. DONG. We want to be able to help—— 

Ms. NORTON. Because this will be the first excuse given, that we 

cannot pay for the upfront costs. 

Mr. DONG. The upfront costs in the past have been a significant 

obstacle that have prevented agencies from doing the right thing 

in terms of co-locating and consolidating and reducing their footprint. We see two things that change that dynamic. One is the 

Total Workplace Program that I mentioned before that allows us 

to amortize the cost of furniture and IT and other upfront expenses 

that had previously been an obstacle to be able to make that move. Two, is in our fiscal year 2015 budget, we request $100 million 

to support agency consolidation efforts. The amount that we received in fiscal year 2014, the $70 million, has been a force multiplier for us in terms of being able to work with agencies to reduce 

their footprint. 

Ms. NORTON. Mr. Chairman, I know my time is out. Mr. Holland 

indicated that he was having difficulties with the program and yet 

the answer here has been that they are able to move ahead. So I 

am not sure that I understand that Mr. Holland’s needs are being 

met by what Mr. Dong has just said. 

Mr. HOLLAND. Congresswoman Norton, we in fact are taking 

very aggressive advantage of what Mr. Dong just described, both 

at the Parklawn project in Rockville and at the Switzer project 

here. We could not have done those projects without that help. My 

observation was to the point that this is a problem all the time. We 

have ways to solve the shortfall here, and we have. But I will have 

37 

other opportunities, and even $100 million is not unlimited and Mr. 

Dong will not always be able to meet our needs. A more thoughtful 

private sector type way of handling capital investments would be 

helpful. 

Mr. BARLETTA. Thank you. Mr. Webster? 

Mr. WEBSTER. Thank you, Mr. Chairman. Thank you for allowing 

me to attend this meeting, and thank you panelists for your presentation. 

When we had our last prospectus level project approval, I was 

the only voice vote no because I was somewhat shocked at a couple 

of the examples I saw there of the new leases. One in particular 

was in a metropolitan area. It was in the same building as an expiring long-term lease. They were just going to re-up the lease. And 

the cost over the lease period was around $1,100 to $1,200 per 

square foot for the entire lease. So I figured, I was just sitting 

there at my desk, this distance here to here would be around 

$5,000 to $6,000. 

And I was really concerned about that because the lease that was 

being completed, the only option was to either leave or re-up. There 

was no lease purchase or anything. And then the new lease, there 

was also no agreement. So by the end of the full term from the 

start to the finish, there would have been paid out about $2,200 

per square foot. The building would probably be, if it is a normal 

building, would be about half its life cycle had been expired. And 

yet you could have built, you know, five times, four times, three 

times the building if it had been built and owned by the Federal 

Government. And you still at the end of that timeframe would have 

had only used half the life of the building. 

So, Mr. Dong, my question would be what criteria do you use to 

determine whether or not there will be a lease purchase agreement? When you start 3 years ahead and you begin planning out, 

are there things that you—is there a checklist that you go down 

to determine what is the best buy life-cycle cost, energy cost, lease 

to own, all of those or just buying it outright? Is there a checklist 

that is a standardized checklist? 

Mr. DONG. Our preference is to have federally owned buildings 

as opposed to leased buildings. There are situations, as you know, 

where we have to be in lease arrangements. 

You mentioned earlier purchase options, and we want to be able 

to see those in more of our lease arrangements, but we recognize 

that again those come at a cost. So it really is dependent of the 

specifics of the transaction in terms of when a purchase option 

would be appropriate. 

Mr. WEBSTER. But wouldn’t a lease that expires and you re-up 

it and it expires again, there is a cost to that too because at the 

end of that timeframe, you have nothing to show for it except you 

have to go out and lease again. Wouldn’t there be some consideration with that? I assume that is in your calculation, is that true? 

Mr. DONG. Absolutely. And, again, we want to be able to kind of 

look more strategically at these transactions, not just to get caught 

up in the cycle of leasing but to really think through what is the 

longer term strategy for this asset and for the tenants in this asset. 

Mr. WEBSTER. The last list of projects that we approved, most of 

them were in—those leases were in urban areas. Given technology 

38 

and other advances, can’t you be just about anywhere you want to 

be including some less urban area that would be a lot less expensive to operate? And is that considered? 

Mr. DONG. Absolutely. There are two things that we emphasize. 

First and foremost, it is about meeting agency mission requirements, but we want to make sure that we are doing so in a fiscally 

responsible way. So it really comes back to a collaborative dialogue 

with the agency in terms of what their specific requirements are, 

whether they need to be downtown in the central business district 

or they could be out in the suburbs and really understand what the 

trade-offs are given the requirements and look to balance both objectives in terms of meeting agency mission requirements but doing 

so in a fiscally responsible way. 

Mr. WEBSTER. OK, Mr. Orner—Orner, sorry, could you—I have 

one question. You said you were about 50 percent owned, 50 percent leased. And you are the only one that mentioned that, so I 

would ask you is that a static number or is moving? Are you moving towards more owned or are you moving towards more leases? 

Mr. ORNER. It is a relatively static number. The large majority 

of our owned spaces are Coast Guard and CBP. And the Coast 

Guard, we are talking about stations, Coast Guard stations, depos. 

We do not buy and sell a lot of those. So it is relatively static. 

Mr. WEBSTER. Thank you, Mr. Chairman. 

Mr. BARLETTA. Thank you, Mr. Webster. The Chair recognizes 

Ms. Edwards. 

Ms. EDWARDS. Thank you, Mr. Chairman. And I want to say a 

special thanks to the ranking member because I had intentionally 

not planned to ask a question about the FBI and the land slot, but 

I appreciate the response. 

It does raise a question that I had though and it is about process. 

And so I appreciate that, Mr. Dong, you have explained the process 

because sometimes I know we get confused and annoyed by process 

but in the case of GSA leasing, and I know this is true in the Metropolitan Washington area, process is in fact very important because it can lead to a better deal for the taxpayer if things are fair, 

if they are transparent and if there is a competitive process for 

leasing. And I think when that happens, it can also create an environment in which you do not invite protest, appeal and litigation. 

And so I have been really interested in the process. I represent 

a district, as you know, right outside of the District of Columbia 

in Prince George’s and Anne Arundel County, but I want to focus 

on Prince George’s County because that has been a subject of some 

process. 

The Office of Management and Budget through its approval of 

GSA rent requests is largely responsible for setting the prospectus 

rent caps nationwide. But nowhere is the scrutiny more draconian 

than I think it is here in the National Capital Region where OMB 

sets a one-size-fits-all cap for leasing in northern Virginia, the District of Columbia and suburban Maryland. And quite ironically, 

these caps are often well below those approved in other parts of the 

country, whatever the economy, despite the Washington region’s 

higher prevailing market rents. In the District of Columbia, that 

cap is at about $50, in Maryland $35 and in Virginia $39. I am 

really hard-pressed to understand, and I have asked numerous 

39 

times when GSA and our agencies have been in front of us, what 

explains the disparity in one metropolitan region and why is that 

disparity only present in the Washington metropolitan region. 

One of your predecessors, 2 years ago, in 2011 when I asked, 

could not explain that at all when he was in front of this committee. And I will tell you what he said to me in 2011. And this 

is a quote from Mr. Robert Peck, who was the GSA’s Public Building—in charge of the Public Building Service. And he said, ‘‘I think 

that there is the opportunity to make some adjustments here or 

overhaul that system, and I am looking forward to doing it.’’ 

So I want to fast forward from 2011 to 2014, and the cap disparity that I described still exists without any other explanation. 

And I know we have talked about this before, but I have to get 

your commitment on the record that GSA will provide an answer 

and a response and something that is acceptable that gives relative 

competitive weight in the region for each of the jurisdictions that 

compete in this region. While one can understand the District of 

Columbia, it is a city, I do not understand the disparity among all 

of the suburbs. And that has not been explained sufficiently, and 

it has to be resolved because it creates such a disadvantage to 

those who want to develop and provide a taxpayer-based resource 

for the Federal Government. 

So, Mr. Dong, I will ask you on the record, do I have your commitment within a time certain to get back to this committee on 

that question? 

Mr. DONG. Yes, you have my commitment. I want to come back 

to the whole notion of competition and getting the best deal for 

Federal agencies and for the American taxpayer. I am still looking 

into this issue of rent caps. As I mentioned earlier, I have only 

been on this job for about 4 months. There is a lot more that I need 

to learn about rent caps. I know that this is a critically important 

issue to you and to other members of the subcommittee. I am looking into it, and I commit to get back to you on this. 

Ms. EDWARDS. I appreciate that because if we look at the millions of lease space that is going to be available, this element of 

this rent cap could end up costing the taxpayer millions of dollars 

if we do not resolve the issue. And so I would appreciate that. 

And I want to just say lastly if you would indulge, Mr. Chairman, to Mr. Holland, you raised an interesting question. And I believe that when you referred to the success in Rockville, you were 

referring to Parklawn. And I just have to ask whether you think 

the appropriate role of the agencies, and this can be open to other 

members on the panel, whether the appropriate role for the agency 

is to dictate the details to such minutia in the requirements that 

it could in fact constrain decisionmaking? And I would point specifically to the Parklawn lease in which HHS was insisting that we 

identify requirements such as location near dry cleaners. Do you 

think that is an appropriate conversation for a Federal Government agency to be engaged in to get a good deal for the taxpayers 

when it comes to lease requirements? 

Mr. HOLLAND. First of all, Congresswoman Edwards, that was 

before my time, so I do not know—— 

Ms. EDWARDS. I know, the problem is you work at the agency. 

40 

Mr. HOLLAND. Yes, I inherited it. I inherited that project. That 

is the one I alluded to that had been going on since 2006. I will 

say that the Department, as you know, will have four operating divisions going into that facility. The Department does need to provide oversight, otherwise we have so many different desires and 

views that we cannot ever achieve consensus. And with GSA’s help, 

we have been doing that. I would not think that I need to dictate 

where dry cleaners are, and I am pretty confident I would not be 

able to make that stick. But I do think we have to provide standards, and that is what I have tried to ensure. 

Ms. EDWARDS. Thank you. And with that, I am going to yield just 

by saying to the chairman, we have had the experience on this 

committee of looking at potential leases and seeing those kinds of 

things being dictated wherever it is coming from within agencies. 

And it really hampers the ability of the taxpayer to get the best 

deal for the dollar. And I think that there should be some way that 

GSA, whether it is using—needs additional oversight authority so 

that GSA is in the driver’s seat for the taxpayer. And not that we 

should not consider the concerns of the agencies, but the driver has 

to be the GSA in making determinations about baselines for requirements and about standardizing a process so that the taxpayer 

can have the confidence when that lease is let, that we have gotten 

a good deal. And I do not know that that is always the case. 

And I think those are the kind of things that we, this subcommittee, should be looking at for the future given the amount, 

the number of leases and the value of the dollar that is coming up 

in this committee. 

Thank you. 

Mr. BARLETTA. I agree with you. They do it with ceiling heights 

in the District, which also limits competition and a good rate. So 

it is a good point. 

Before we begin our second round, the Chair is going to recognize 

Mr. Mica for an additional 30 seconds. He has another hearing to 

attend to. Mr. Mica? 

Mr. MICA. Well, thank you. And, Mr. Dong, yesterday we did a 

hearing. You sent Mr. Gelber, the Deputy Commissioner of the 

Public Buildings Service, I mentioned to him that this actually 

starting back with the work on this committee, we got Dorothy 

Robyn, she was the former Public Buildings Service Commissioner, 

to consider putting together a panel of experts for GSA who have 

great skills in disposing or best practices for utilizing property, vacant and otherwise. You actually have that panel in place. They 

have been selected in May 2013, this came out. Mr. Gelber said he 

not met with this panel. I said, ‘‘Would you meet?’’ He said he 

would. I said, ‘‘Could you get Mr. Dong to also meet?’’ Will you 

meet with the panel because they have some great ideas, great experience. 

They have only dealt with a dozen properties or so and a couple 

hundred thousand dollars. But these people have the expertise and 

knowledge that I think would be helpful. Will you meet with them? 

Mr. DONG. I will meet with the panel. I want us to be aggressive 

on this question of property disposition. 

Mr. MICA. Great, and I will get you a copy of this and that will 

avoid another subpoena. Thank you. 

41 

Mr. BARLETTA. We will now begin our second round of questioning. Mr. Dong, the upfront cost of an agency move an lead an 

agency to stay in place without any reductions in space, improvements to the utilization rates or a competitive procurement, re-location and replication costs regularly run between $100 and $200 

per square foot, yet GSA’s internal policy only allows $40 per 

square foot to be amortized into the lease. Since these costs are 

stopping agencies from getting good long-term leases that save millions of dollars, will GSA consider changing this policy? 

Mr. DONG. I think it comes back to the larger commitment that 

we have to breaking down the barriers that prevent agencies from 

co-locating and consolidating and reducing their footprint. And we 

want to find any and all opportunities to do that. 

Mr. BARLETTA. Again, Mr. Dong, you have a—there is 100 million square feet of expiring leases in the next 5 years, and that is 

obviously a tremendous amount of work. To take advantage of this 

opportunity, it must be an ‘‘all hands on deck’’ effort at GSA and 

at the tenant agencies. You have a no-cost contract that gives you 

access to the best commercial real estate talent in the country. 

Your own data shows that they negotiate better deals for the taxpayer on leases over 50,000 square feet. Yet, GSA’s use of the brokers has declined every year to where they are not being used anywhere close to their potential. 

Given your responsibility to replace 100 million square feet of 

leases in the next 5 years, please tell me and the committee how 

you are going to maximize the use of the brokers to seize this opportunity and benefit the taxpayers? 

Mr. DONG. If we look at the bow wave of expiring leases, I need 

to utilize every resource at my disposal to make sure that we are 

getting on top of that workload and that we are getting out of the 

cycle of holdovers and extensions. You talked about the national 

broker contracts, I think that is an important resource that we 

need to bring to bear on this problem, particularly as we look at 

the larger markets with more complex procurements. 

Mr. BARLETTA. Anyone can answer this questions, any of the 

panelists. What are some of the other major challenges preventing 

your agency from getting your leases replaced on time with good 

deals? And what can GSA or this committee do to overcome those 

challenges? Anyone who wants to jump in. 

Mr. HOLLAND. Mr. Chairman, I have already suggested to you 

what I think is the biggest problem. As we solve the problem with 

GSA’s help, it creates another problem and that is the operating 

expenses of our divisions have to be inflated for 3 to 5 years, depending upon whether it is technology or furniture and equipment. 

So that is the biggest gap. 

The other is something that again I would give GSA credit for 

helping us is helping employees understand that the changes we 

are going to make are in fact appropriate changes and in the end 

they will think they are good changes. I assume the committee 

members have visited 18th and F and seen where Mr. Dong and 

Mr. Tangherlini have their offices. I have taken multiple people 

from my Department over there. 

We have to educate people. I come from the private sector. I 

spent 41 years in the private sector before I came here 5 years ago, 

42 

and what we are doing here is SOP, standard operating procedures, 

in the private sector. We need to educate more and more of our employees that that is the right way to do things. And in the end, 

frankly, they like it. And if we do more of that, we will have fewer 

problems doing the consolidations. 

I think Congresswoman Norton asked about doing things while 

we are in place. We are doing several things while we are in place. 

It is not ideal, frankly, because we actually disrupt operations during the time we are doing reconstruction while people are still 

there. But it can be done, if and only if, the employees, their managers and their leaders accept that risk and understand what we 

can do for them. 

Mr. BARLETTA. Mr. Dong, in recent years, GSA has pulled back 

delegated leasing authorities from tenant agencies. If GSA’s delegated leasing authority was managed to ensure proper oversight, 

including application of prospectus process, that may address problems that have occurred in the past. Has GSA examined whether 

lease delegations could help with the workload? 

Mr. DONG. Our view is that we have developed a center of excellence and a core competence in the issue of leasing. That is GSA’s 

core competence. We want agencies to be able to focus on their core 

mission functions. We believe that leasing is our core mission function, and we believe that we do that well. And we want to be able 

to support agencies, whether we do it or that they have delegated 

leasing authority. We still feel that we can provide strong support 

in the process. 

Mr. BARLETTA. Has any of your agencies used the delegation authority in the past? And do you think such authority could help get 

these leases replaced on time? 

Mr. HOLLAND. Well, Mr. Chairman, the Department of Health 

and Human Services does in fact use the delegated authority for 

a variety of things, although 70 percent of our space, 70 percent of 

our overall 55 million square feet of real estate is owned by the 

Federal Government. We do it both ways. I am frankly not sure 

there is magic either way. And even in that case, we look to GSA 

to use its expertise to help us. 

Mr. BARLETTA. Anyone else want to—— 

Mr. ORNER. Well, speaking for DHS, I agree with Mr. Dong that 

they do have a center of excellence for leases, particularly for generic office space. I am perfectly happy with the existing arrangement. They are able to meet our needs. 

Mr. BARLETTA. The Chair will recognize Ranking Member Carson. 

Mr. CARSON. Thank you, Mr. Chair. Mr. Allen, the DOJ has significantly reduced its space standards by 25 percent. What was 

your most effective argument to your employees in getting them to 

accept a new normal with respect to space allocations? 

Mr. ALLEN. I do not think there is a single argument. I think 

that we all want to work together to accomplish our mission in the 

most effective and efficient means possible. And we have had that 

conversation about how can we do things differently today than we 

have done in the past to make us more effective and efficient and 

use taxpayer resources wisely. So those conversations have occurred, and they need to continue to occur to make this happen. 

43 

Mr. CARSON. Mr. Holland, if HHS were to receive capital funding 

for renovations, furniture and fixtures, do you believe you would be 

able to gain even more savings in your real estate program? 

Mr. HOLLAND. Yes, sir, I do. 

Mr. CARSON. Yes. Madam Barr, can you please commit to the 

committee, ma’am, to reevaluate the State Department’s strategy 

to locate the majority of its leased space in the Foggy Bottom and 

Rosslyn area—I am going back to that again—and report back to 

us respectfully on the cost and benefits of such a strategy? 

Ms. BARR. Yes. 

[The Department of State responded to Hon. Carson’s question 

with the following information:] 

In response to Representative Carson’s request, the Department continues 

to evaluate its strategy of locating most of its leased space in the Foggy 

Bottom and Rosslyn area. We appreciate this opportunity to explain the 

fashion in which our personnel collaborate to perform our country’s many 

foreign policy missions, and how those personnel interactions impact our 

real estate decisions. 

Virtually all of the activities in the decision-making process of the Department’s offices and bureaus require interdependency; as a result, Department of State offices in Foggy Bottom and Rosslyn operate as a centralized 

hub that supports staff all over the world, at over 275 embassies and consulates, on a 365/7/24 basis. The proximity of the Department’s bureaus to 

leadership in the Harry S. Truman (HST) Building, and to one another, results from the interrelated nature of diplomatic missions and the requirement to effectively represent U.S. government interests overseas. However, 

we realize that some bureaus and offices can perform effectively outside the 

Foggy Bottom-Rosslyn hub, and when possible, the Department locates 

functions in more cost-effective locations. In fact, almost half (45 percent) 

of the Department’s commercially leased space is located outside of Foggy 

Bottom and Rosslyn. For instance, the vast majority of our passport services, financial services, information technology services, and warehousing 

are located in less expensive space outside of major metropolitan areas. 

Whether it is managing responses to crises such as Ebola, threats to our 

nation’s security, longer term engagements such as coalition building in the 

fight against the Islamic State of Iraq and the Levant (ISIL), or overseeing 

grants and policymaking, different bureaus with equities in a particular 

issue are engaged in developing appropriate solutions; thus the requirement 

for constant contact and inter-bureau communications, some of which must 

be carried out expeditiously and in strict confidence as the outcomes of 

these decisions often have national security implications. Many of our dayto-day discussions involve information that cannot be discussed over the 

phone or other unsecure means. 

Given the breadth of the Department’s portfolio and the corresponding 

structure of its bureaus and offices to support those missions, a longstanding management goal continues to be the alignment of the real estate 

portfolio with the space and proximities Department staff need to perform 

their functions effectively. The Department prioritizes the proximity of its 

various bureaus to HST based on their involvement in diplomatic matters. 

Regional bureaus (e.g., Western Hemisphere Affairs, African Affairs, Near 

Eastern Affairs, etc.) are directly and intricately involved in policymaking, 

coordination with overseas posts, and negotiations with foreign governments. Certain functional bureaus (e.g., Population, Refugees and Migration; Economic and Business Affairs; Democracy, Human Rights and Labor; 

Counterterrorism; International Narcotics and Law Enforcement) perform 

their missions in conjunction with the regional bureaus necessitating that 

their offices be located in the HST Building or within a short walk of HST 

to allow for direct personal engagement in policymaking. Additionally, the 

management bureaus (e.g., Diplomatic Security, Consular Affairs, Overseas 

Buildings Operations, Human Resources Management, Information Resource Management, Medical Affairs, Administration, etc.) support a very 

wide range of activities, including those of Foreign Service Officers overVerDate Aug 31 2005 12:29 Nov 10, 2014 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6621 P:\HEARINGS\113\ED\7-30-1~1\88927.TXT JEAN
44 

seas, the security of our overseas facilities, all civil service employees, other 

agency personnel, foreign nationals, and family members. 

Most of the personnel in the management bureaus are also required to be 

close to HST and the regional and functional bureaus, but may locate in 

Foggy Bottom or Rosslyn depending upon their primary collaborators. For 

example, Overseas Buildings Operations, Diplomatic Security, and key elements of the Bureau of Administration collaborate intensively to provide 

safe, secure, and functional facilities that represent the U.S. government to 

the host nation and support our staff overseas as they work to achieve U.S. 

foreign policy objectives. In these times of increasing security threats overseas, the levels of coordination among these bureaus are constant and significant, and much of the work involves the Department’s largest contracts, 

and/or is of a classified nature. Over time, these bureaus have collocated 

in several buildings proximate to one another in Rosslyn. 

Likewise, the payroll and financial functions of the Department operate 

from Charleston, South Carolina, where they work in close proximity with 

several human resources activities that relocated to that area in recent 

years. This is a great example of the Department’s efforts to relocate complementary personnel and functions, to the extent possible, to more cost-effective areas away from the Foggy Bottom-Rosslyn hub. 

The Department’s real estate asset management program is geared towards 

solutions that best reflect and support the realities of the way in which the 

Department manages the nation’s foreign policy objectives. In making real 

estate decisions the Department assesses the total cost to government approach, seeking results that yield the lowest long term cost to the taxpayers, while still fulfilling the needs of the mission. Whether expansion, 

new construction, or a lease replacement; the costs, options, mission needs, 

the current and proposed tenant mix, location, and housing plans are all 

taken into consideration, reviewed, and evaluated before final decisions are 

made. 

For leased spaces, direct costs such as Move and Replication, Information 

Technology, and Security are accounted for, as are indirect costs such as additional administrative support necessary in ancillary locations, and the 

productivity and financial costs of commuting between locations. The Department continually seeks to reduce costs by improving utilization rates in 

existing space, as leases expire, and through other consolidation activities. 

Thus, in recent years the Department has been meeting and in many cases 

exceeding evolving government space utilization standards. For example, 

following the Bureau of Consular Affairs (CA) Foggy Bottom consolidation 

in 2013 (with an ‘all in’ total square feet/person of less than 200 USF/person), its former space in Columbia Plaza is being backfilled by various bureaus consolidating out of expiring leases, and out of HST due to the modernization of this 50+ year old building. Each of these backfill projects are 

being built to an ‘all in’ total square feet/person of less than 170 USF/person, well below the government median of 265 square feet/person, as reported in the President’s Management Agenda ‘‘Benchmarks for MissionSupport Functions in September 2014.’’ The Department’s current portfolio 

also scores below the median in all three utilization rate metrics in this report. 

As noted, security costs are a strong consideration when evaluating a new 

facility lease or purchase. The Department’s facilities are protected through 

strong physical security measures as well as a robust security team of the 

Diplomatic Security Service. The Department has evaluated the possibility 

of leasing vacant space in Crystal City, but, in addition to increased travel 

time and lost productivity, any such location would need to have physical 

security measures installed. We also note that the prime reason for the Department of Defense’s move away from Crystal City was the inherent lack 

of security of their buildings there. 

The Department of State remains committed to taking a careful approach 

to its real estate activities, and managing its portfolio to best support the 

many missions entrusted to it by the American public in the most efficient, 

effective, and economical ways possible. We appreciate the opportunity to 

provide the committee with this additional information in order to clearly 

demonstrate the real estate acquisition process used by the Department of 

State. 

45 

Department of State occupied, prospectus-level leases expiring between 

2014 and 2019: 

(1) 1701 North Fort Myer St., Rosslyn, VA, expires December 2014 (Prospectus has been submitted to House Transportation and Infrastructure 

Committee); 

(2) 2121 Virginia Avenue, NW., Washington, DC, expires October 2017; 

(3) 400 C Street, SW., Washington, DC, expires January 2018; 

(4) 2200 C St., NW., Washington, DC, expires June 2019; 

(5) 515 22nd St., NW., Washington, DC, expires September 2019. 

This report was prepared by the U.S. Department of State’s Bureau of Administration, Office of Operations, September 2014. 

Mr. CARSON. OK. Thank you, Mr. Chairman. 

Mr. BARLETTA. The Chair recognizes Ms. Norton. 

Ms. NORTON. Thank you, Mr. Chairman. Mr. Dong, under Administrator Tangherlini, we have seen the agency operate more like 

a real estate agency. That has not much been the history of GSA. 

It has been more innovative, for example. I mean the FBI trade is 

an example of that. 

I was troubled therefore that this week I had to introduce a bill 

to ask the GSA to do what it already has the authority to do. You 

will recall that the Old Post Office came out of a bill I had to introduce because GSA just would not develop the property. I have not 

had to introduce a bill to develop property that the Government 

owned since the Old Post Office Building, but this week I introduced a bill to redevelop the entire Department of Energy Forrestal 

Complex. And I felt I had to do that for the very same reason— 

well, not the very same reason, because GSA was not doing its 

complete job. It has indicated that it wants to develop part of, indeed the greater part of the nearby property, the Cotton Annex, the 

GSA regional office. But GSA left out some parcels. 

There is not any professional party in real estate who would 

have a great big parcel and say, ‘‘We are going to develop this entire parcel.’’ Understand, this part of GSA’s own eco-district plan, 

which has been approved by the National Capital Planning Commission—the NCPC. Why would you leave out some parcels? Are 

we back into GSA doing what the agency wants to do instead of 

doing what your statute says to do and what the Congress says do? 

And you are not developing some small parcels. Some of it may be 

parcels that the Department of Energy wants to deal with on its 

own terms. 

But why in the world would GSA leave out small parcels in a 

total section of land that can bring return to the Federal Government? Why are you not developing the entire Department of Energy Forrestal Complex? And what is the reason for the parcels 

that have been left out? 

Mr. DONG. Congresswoman Norton, when we look at the parcel 

of property on Federal Triangle South, we want to make sure that 

we are getting the highest and best use for all of the parcels, not 

just the Cotton Annex and the regional office building. 

Ms. NORTON. Well, you have got the GSA regional office. You 

have got the Cotton Annex. You have got some small parcels that 

are left out. My question is very particular, Mr. Dong. Why are 

those small parcels, which apparently—I cannot say are owned by 

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46 

partment of Energy, at least one of them, why are they left out as 

a kind of pock mark in the total land that you wish to redevelop? 

Mr. DONG. We want to make sure that we have got viable housing strategies for the agencies that are on those other parcels. 

When you mentioned the regional office—— 

Ms. NORTON. We will get housing strategies if you put it in there 

because then everybody will begin to look for the appropriate housing. You leave them out, then of course there is no incentive for 

them to find—especially when the parcels are so small. And of 

course we know, and if you want to complicate things for the Federal Government, we know as well that the railroad is coming in 

these adjacent parcels, that there is value for the Federal Government in those parcels because the railroad would obviously be one 

of those who wish to use those parcels. You have even negotiated 

with interests who are involved and yet you have left them out. It 

just makes no economic sense from the Government’s point of view. 

And if you want to find housing for the Government, do not tell 

me that again. Because that was the excuse of GSA for not developing the Old Post Office. They had agencies in there. So you have 

got an agency. That agency, the Department of Energy will get 

space. It will be able to reduce its footprint. You will get land and 

a return on that land for the Federal Government that you do not 

get now. What possible reason could there be for not putting the 

whole parcel out if you put most of it out? 

Mr. DONG. I agree with you. We need to get highest and best use 

for all of the parcels in Federal Triangle South. Based on the RFI 

and the responses to the RFI that we issued last year, what the 

market was telling us is that we needed to move out on these two 

parcels first. But our plan and our commitment is not to ignore 

these other parcels in Federal Triangle South. 

Ms. NORTON. You see what you force me to do? And the last time 

you forced me to put in a bill, the Congress passed this bill. So I 

want to just tell you right now I am going to press very hard for 

Congress to pass the bill to develop the entire parcel that I introduced this week. 

Thank you, Mr. Chairman. 

Mr. BARLETTA. Thank you. An important factor the committee 

considers before approving a lease prospectus is the all-in utilization rate. That means the total usable square footage of a building 

divided by the number of people working there. While we do not 

have a one-size-fits-all standard, we are looking for significant improvements and good utilization rates for how the building is used. 

Barring a few unique exceptions, the committee has not approved 

prospectuses with all-in utilization rates of over 200 usable square 

feet per person. 

Mr. Holland, can you talk about how HHS has instituted the 170 

usable square feet per person standard and is that departmentwide 

and does it include common areas in the calculation? 

Mr. HOLLAND. Yes, sir, we adopted that 3 years ago. The Office 

of the Secretary issued instructions to that effect. We have had cooperation from several agencies. We operate through a federated 

system of many independent operating divisions. And they have 

been following it. 

47 

Now, I do not want to sit here and tell the committee that we 

always get to 170. Sometimes we will be below it. Sometimes we 

are not quite there. It depends on the shape and the scope of the 

building, for example, or if we are having a little trouble—Switzer 

is an example. It is not a modern contemporary building that is 

easy to lay out. So what we do is use that as a target. My project 

with my OCIO will get well under it. I have some others where we 

are a little over it. But we will generally speaking use that as a 

target. I am reminded of the old saying, ‘‘If you do not care where 

you are going, any road will get you there.’’ That is why we use 

that as the target. 

Mr. BARLETTA. To the other agencies, what are your all-in utilization rate targets and how are you applying them as the leases 

expire, Ms. Barr? 

Ms. BARR. 200 usable square feet or less. We are renovating our 

building right now, our headquarters, and in the new space we expect to be able to put in 1,500 more employees. And I am actually 

doing this in my own section, which is not always easy, as referred 

to earlier, getting employees to understand. But we are full on 

board with this. 

Mr. BARLETTA. Mr. Brazis? 

Mr. BRAZIS. The Department of Defense, 200 also. Our most recent prospectus for Suffolk and other buildings, our longer term 

leases we have entered into, have consistently been at 200 and 

below. And below is really our target. 

Mr. BARLETTA. OK, Mr. Allen? 

Mr. ALLEN. We took a different approach in 2012 and mandated 

per person office size standards of 130 square feet for most people. 

Less than 100 for law enforcement agencies. Our latest prospectus 

that this subcommittee approved was at 240, reflecting special use 

needs for attorneys and litigating divisions. So we will vary, but we 

will meet our per person office standards across the Department. 

Mr. BARLETTA. Mr. Orner? 

Mr. ORNER. Our number is 150. Every time we—a lease expires, 

our commitment is to get under 150. Now, that is an average. In 

some cases, we have needs for highly specialized spaces, skiffs and 

whatnot, that will skew the numbers for a particular organization. 

But we are committing to an average of 150. 

Mr. BARLETTA. Mr. Spencer? 

Mr. SPENCER. Mr. Chairman, as was pointed out earlier, we have 

a range of kinds of opportunities in our organization. Certainly in 

our community-based field offices, we have a different arrangement 

there with the public needing to be considered. But when it comes 

to prospectus level leases, which we are going to be sending to you 

in the next 5 years, we have a number of those, and we are certainly going to be looking to make sure we are within the 200 

square feet. 

Mr. BARLETTA. Thank you. So far this year the committee has received three lease prospectuses for the fiscal year 2015 leasing program, including one for the State Department, one for the FBI. 

Given the amount of potential prospectus level leases expiring in 

the next 5 years, this seems a little low. Mr. Dong, will we be receiving more? And, if so, when can we expect them? 

48 

Mr. DONG. Mr. Chairman, you have my commitment that you 

will be receiving the balance of the lease prospectuses in the coming weeks. 

Mr. BARLETTA. Great, thank you. The other panelists, each of 

your agencies should have prospective level leases before us soon. 

Where are those prospectuses in the process and which ones should 

we see this year? 

Ms. BARR. Excuse me. We definitely have one with you now. I 

will have to get back to you on how many more we will send to you 

this year. 

Mr. BARLETTA. Mr. Brazis? 

Mr. BRAZIS. Mr. Chairman, I will have to get back to you on the 

record on the precise number pending. 

[The information follows:] 

The Department of Defense currently has one prospectus level lease package for this year being processed at the General Services Administration. 

Within the National Capital Region (NCR), GSA submits prospectus level 

lease packages on behalf of DOD. 

Mr. BARLETTA. Mr. Allen? 

Mr. ALLEN. I will get back to you on the precise number, but I 

know we have two for litigating divisions here in Washington coming soon. 

Mr. HOLLAND. Mr. Chairman, the Department of Health and 

Human Services has none coming this year. And, in fact, we pulled 

one recently as part of our consolidation into the Switzer Building. 

There was a prospectus lease pending. And we were able to avoid 

that and not go back out to the lease market and instead move into 

a GSA-owned building. I will have to get back to you on whether 

we have any in the coming year. But, frankly, as I look at our lease 

expirations, a substantial number of them have happened or are in 

the process of happening. And I am not sure we have a significant 

number of prospectus leases. And, frankly, I will try to avoid those 

because I will try to work with Mr. Dong and Mr. Tangherlini to 

move into federally owned space wherever we can. 

Mr. BARLETTA. Mr. Orner? 

Mr. ORNER. Mr. Chairman, I will get back to you with a list of 

this year’s lease prospectus. 

[The information follows:] 

• In the FY14 cycle, DHS had four (4) prospectuses totaling just under 1 

million square feet in four (4) locations. 

49 

• For the FY15 cycle, DHS has one (1) prospectus in process. 

• This prospectus is for USCG within the National Capital Region; and it is 

currently under review in GSA’s Central Office. 

• The prospectus is seeking authority for up to 15 years and up to 95,000 

RSF; however, the Department is also working on options to eliminate this 

lease and move the personnel into the USCG Building on the St. Elizabeths 

campus. 

• For FY16, only one (1) prospectus level project is planned: 

• The space requirement is for ICE Headquarters lease (located at 500 12th 

St., in Washington, DC), and is expiring in January 2018. 

• This occupancy currently contains 500,000 RSF, and going forward will be 

subject to the Department’s new size standard (average 150 sqft per 

person). 

• In FY17 DHS will have a major lease prospectus year due to twelve (12) 

locations; DC (3), VA (3), MD (2), NJ (2) and NY (2) will be coming due 

with more than 1.9 million square feet. 

• The Department, its components, and in partnership with GSA is 

examining all office space requirements with the objective of achieving 

DHS’s size standard average of 150 usable square feet or less per person. 

• The Department’s effort to compress office space requirements is anticipated to result in fewer prospectus level projects. 

Mr. BARLETTA. Mr. Spencer? 

Mr. SPENCER. Mr. Chairman, Social Security does not have any 

this year. 

Mr. BARLETTA. This is my final question. I think we have a tremendous opportunity to save taxpayers a lot of money and help 

your agencies get quality space that meets your needs and helps 

you protect your personnel. However, I am very concerned that we 

are going to miss this opportunity if we continue with business as 

usual. So I am open to considering a pilot program for a limited 

amount of time, which would simplify the leasing process and give 

you greater flexibility to cover your upfront costs. The leases would 

need to have good utilization rates, be long term and competitive. 

But in exchange, you get a fast track process. Do you think this 

could help us get the job done? 

Mr. DONG. Mr. Chairman, I think it is important that collectively 

we look at the current process, and we identify any and all opportunities to streamline the process. And, as you said, take advantage of the current market opportunity. 

Ms. BARR. I agree with Mr. Dong. 

Mr. BRAZIS. As do I, Mr. Chairman. 

Mr. ALLEN. And as I do. 

Mr. HOLLAND. The same response, sir. I would say that we have 

two ongoing examples. The Parklawn project is now pushing 10 

years old. And the Switzer project on the other hand is about 18 

months old and will finish before Parklawn. So where we can get 

help, and GSA has been very helpful on Switzer, we can move more 

quickly. And any pilot project that the committee comes up with 

would be welcome. 

Mr. ORNER. DHS would also welcome such a pilot. The opportunity to streamline the timeline and find a way of covering the upfront costs would be welcomed. 

Mr. SPENCER. We absolutely would agree that we would be interested in pursuing this. One of the problems we have had, Mr. 

Chairman, is adequate, sustained funding where we know where 

we are going to be able to go in the long run. We had a prospectus 

level project that was approved as a prospectus level project, but 

50 

then funding was not available. And we actually had started moving people out of the building. We were left with lower utilization 

and no place to go. So absolutely we would be interested in pursuing this. 

Mr. BARLETTA. Ranking Member Carson, do you have any more 

questions? 

I want to thank you all for your testimony. Your comments have 

been helpful in today’s discussion. If there are no further questions, 

I would ask unanimous consent that the record of today’s hearing 

remain open until such time as our witnesses have provided answers to any questions that may be submitted to them in writing. 

And unanimous consent that the record remain open for 15 days 

for any additional comments and information submitted by Members or witnesses to be included in the record of today’s hearing. 

Without objection, so ordered. 

I would like to thank again our witnesses again for your testimony today. If no other Members have anything to add, this subcommittee stands adjourned. 

[Whereupon, at 12 p.m., the subcommittee was adjourned.] 

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