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RICHARD H. POFF FEDERAL BUILDING 

RENOVATION: IS IT COSTING 

THE TAXPAYER TOO MUCH? 

(112–27) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

APRIL 14, 2011 

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 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

FRANK C. GUINTA, New Hampshire 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

STEPHEN LEE FINCHER, Tennessee 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

VACANCY 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

(II) 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

JEFF DENHAM, California, Chairman 

TIMOTHY V. JOHNSON, Illinois 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas, 

Vice Chair 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

STEPHEN LEE FINCHER, Tennessee 

JOHN L. MICA, Florida (Ex Officio) 

ELEANOR HOLMES NORTON, District of 

Columbia 

HEATH SHULER, North Carolina 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

TIMOTHY J. WALZ, Minnesota 

DONNA F. EDWARDS, Maryland 

BOB FILNER, California 

NICK J. RAHALL II, West Virginia 

(Ex Officio) 

(III) 

(V) 

CONTENTS Page 

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

TESTIMONY 

Dudley, Julia C., Clerk of Court, United States District Court, Western District of Virginia ..................................................................................................... 4 

Ehrenwerth, David, Regional Administrator, Mid-Atlantic Region, General 

Services Administration ...................................................................................... 4 

Goodlatte, Hon. Bob, a Representative in Congress from the State of Virginia 4 

Miller, Hon. Brian D., Inspector General, General Services Administration ..... 4 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Norton, Hon. Eleanor Holmes, of the District of Columbia ................................. 30 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Dudley, Julia C. ....................................................................................................... 32 

Ehrenwerth, David .................................................................................................. 35 

Goodlatte, Hon. Bob ................................................................................................. 39 

Miller, Hon. Brian D. .............................................................................................. 41 

SUBMISSIONS FOR THE RECORD 

General Services Administration, responses to questions from the Subcommittee on Economic Development, Public Buildings, and Emergency 

Management ......................................................................................................... 45 

ADDITIONS TO THE RECORD 

Karnes, Daniel E., LTC, AUS, (Ret), President of the Roanoke Valley Veterans Council, letter to Hon. Jeff Denham, a Representative in Congress 

from the State of California ................................................................................ 48 

vi 


Insert offset folio 1 here 65722.001
vii 


Insert offset folio 2 here 65722.002
viii 


Insert offset folio 3 here 65722.003
ix 


Insert offset folio 4 here 65722.004
(1) 

RICHARD H. POFF FEDERAL BUILDING 

RENOVATION: IS IT COSTING 

THE TAXPAYER TOO MUCH? 

THURSDAY, APRIL 14, 2011 

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 10:09 a.m. in Room 

2167, Rayburn House Office Building, Hon. Jeff Denham (Chairman of the subcommittee) presiding. 

Mr. DENHAM. The subcommittee will come to order. First, let me 

welcome our witnesses here with us today. I especially want to recognize Representative Goodlatte. Thank you for joining us. Virginia—the renovation of the Richard H. Poff Federal Building in 

Roanoke, Virginia, is on GSA’s list of Recovery Act projects, costing 

the taxpayer more than $50 million, not including the cost of temporary space for the tenant agencies. 

Last Congress the Recovery Act provided $5.5 billion from GSA’s 

Federal building fund, $4.5 billion of which was designated for converting Federal buildings into high-performance green buildings, 

trumping job creation as a priority. Greening buildings can be good 

if it is cost effective. But as Chairman Mica’s ‘‘Sitting on our Assets’’ report pointed out, certain features like solar panel roofs typically do not see any return until well after the useful life of the 

roof. 

In fact, the GSA inspector general has found in a number of 

cases pay-back periods well beyond reasonable return to the taxpayer. It is unclear whether this lack of reasonable return was 

taken into account before GSA proceeded with this project, and 

whether any such analysis guided GSA in which greening features 

made sense and which did not. 

In addition to the cost, this project is expected to have a detrimental impact on the operations of the tenant agencies. The Poff 

Federal Building houses critical Federal entities, including the Department of Veterans Affairs and the U.S. Courts. The renovation 

will likely disrupt these operations, including relocation, relocating 

the VA in up to four different locations, raising concerns among a 

number of Members from the Virginia delegation as to how they 

will impact the processing of veterans’ claims. 

And on top of these issues, the GSA IG has raised questions as 

to whether GSA followed all applicable contracting laws in awardVerDate Aug 31 2005 11:05 Oct 04, 2011 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\4-14-1~1\65722.TXT JEAN
2 

ing the construction contract, further bringing into question whether the costs are justified. Last November the GSA inspector general 

issued a report on this project, concluding that GSA failed to get 

an independent government estimate for the construction, and that 

by including the guaranteed maximum price in the RFP, GSA’s 

pricing was not based on competition, as required by law. 

Some of the questions we hope will be addressed today include: 

is this renovation costing the taxpayer too much money; did GSA 

fully weigh the costs and benefits of the greening features and alternative housing solutions before proceeding with this project; did 

GSA get the best price for this deal; what steps is GSA doing to 

comply with the contracting laws; how many local jobs will this 

project create; and what is GSA doing to minimize the impact on 

the building’s tenants? 

Again, I want to thank Congressman Goodlatte for his leadership 

on this issue, and hope we can get the answers to these important 

questions. 

I would now like to recognize Ranking Member Norton from the 

District of Columbia for 5 minutes to make any opening statement 

she may have. 

Ms. NORTON. Thank you, Mr. Chairman. And thank you very 

much for calling this hearing. 

The American Recovery and Reinvestment Act of 2009 provided $5.5 billion to the General Services Administration, $4.5 billion of 

which was to convert GSA buildings into high-performance green 

buildings in all 50 States, the District of Columbia, and the 4 territories. The Recovery Act’s primary purpose is to stimulate economic 

activity through investments and preserve and create jobs, spur 

technological advances to enhance energy conservation, and improve infrastructure to provide long-term economic benefits for the 

government and for the people. 

The Federal Government and the States were responsible for addressing the badly needed infrastructure upgrades that we got 

done in the Recovery Act, which pushed the government’s responsibilities further during the response, which pushed GSA’s responsibilities further during this recession, since infrastructure construction would also create jobs during the worst recession since 

the Great Depression. 

Our goal, however, has been not only to distribute the funds 

quickly to spark job creation, but to ensure that these investments 

lead to long-term savings. 

We are especially grateful that a recent Congressional Budget 

Office report on the Recovery Act released 2 months ago shows that 

the Recovery Act has had a positive effect on the Nation’s economy. 

CBO estimates that the Recovery Act lowered the unemployment 

rate between .7 and 1.9 percentage points, increased the number 

of people employed by 1.3 million to 3.5 million Americans, and increased the number of full-time jobs by 1.8 million to 5.0 million, 

compared with what would have occurred without the Recovery 

Act. 

According to CBO, the Recovery Act saved jobs, increased job opportunities, and increased the gross domestic product by 3.5 percent. The Recovery Act was enacted while I chaired this subcommittee, when jobs were all that was on the country’s mind. I 

3 

see the—to see the quickest possible job creation, the subcommittee 

held six tracking hearings. 

We should give GSA credit, because credit is due. GSA has 

awarded contracts and begun work on 273 Recovery Act projects 

worth $5.2 billion, which was almost all of the Recovery Act funds 

under their jurisdiction. As of January 2011, GSA had already completed work on 26 projects, totaling $100 million. With bids for infrastructure projects coming in much lower than expected, GSA has 

saved the government $565 million, and has redirected these funds 

to 17 additional projects which urgently needed infrastructure upgrades. These projects will result in the installation of 78 roofs, including 68 photovoltaic rays on roofs, putting in place 140 light systems, installing 52 water systems, as well as completing 222 system tune-ups and recommissionings. 

Because of the high level of transparency, and the reporting requirements the committee insisted upon, there has been an unprecedented level of accountability while implementing these projects. 

Moreover, the Recovery Act actually established a special recovery 

board composed of inspectors general of the agencies that received 

funds. This unusual approach assured an environment where taxpayers’ dollars would be sent quickly and—spent quickly and well, 

and the posting online of projects on each project, along with our 

frequent subcommittee hearings, all contribute to GSA’s progress 

in meeting the mandate to get the funds on the street quickly but 

carefully. 

Along with other Federal agencies and the States, GSA stretched 

Recovery Act dollars further than anticipated. However, GSA 

should get special credit. Because, unlike most of the agencies, 

GSA was not a pass-through to the States. GSA was directly responsible for getting the funds out and working on the construction 

that produced the jobs. However, GSA did the work and deserves 

the credit. However, although GSA did the work and deserves the 

credit, GSA also must take a responsibility for whatever issues we 

find as today’s hearing indicates. 

The success of the Recovery Act in helping the Nation emerge 

from the Great Recession in no way negates the need for continuous vigorous oversight by this subcommittee, or suggests that 

there are not problems from which GSA and the subcommittee can 

learn. Our subcommittee continues to bear a direct responsibility 

for the stimulus funds under our jurisdiction. 

Again I want to thank Chairman Denham for continuing these 

oversight efforts. Today we will focus our oversight on the renovation and modernization of the Richard H. Poff Federal Building in 

Roanoke, Virginia, funded by the Recovery Act. The Poff Building 

was constructed in 1975. It is owned by the government, and it is 

approximately 316,000 gross square feet of space occupied by the 

Department of Veterans Affairs, the U.S. Courts, the U.S. Marshal 

Services, and other agencies. 

Although the building is 35 years old, it has never had a comprehensive modernization. The Recovery Act modernization of the 

Poff Building includes a replacement of the window curtain wall, 

installment of an HVAC system, renovations of the bathrooms, upgrades to the lighting fixtures, and the installation of new, sustainable roofs, including a solar system to generate electricity. This 

4 

project will increase the life of this Federal asset, and will result 

in a high-performing, energy-efficient Federal building and ensure 

that the Federal investment in space the government owns is preserved, ensuring the highest and best use and its continuing contribution to the Federal building fund, as well as avoiding the need 

for rental space for these agencies. 

However, in reviewing this particular project, the GSA inspector 

general has raised concerns about whether the procurement for 

this project met competition requirements, and whether GSA has 

an adequate system of controls to ensure that the Poff Building 

project met competition requirements. GSA has concurred with 

both findings of the IG report, and is committed to implementing 

its recommendations. 

In addition, the U.S. representative from Roanoke, Virginia, and 

the two U.S. senators from Virginia have raised concerns about the 

impact of the operations of the Roanoke Veterans Affairs regional 

office, the building’s largest tenant, and the efficacy of the energy 

improvements. We need to hear from GSA about what gave rise to 

the problems in order to ensure that they have been ameliorated, 

and will not occur again. 

I encourage GSA to allocate funds to projects that provide the 

best return in maintaining our public building inventory, and putting even more Americans to work. I look forward to hearing from 

the witnesses today about the modernization of the Poff Building 

and the cost benefit analysis used in selecting this project for modernization. 

I thank you, Mr. Chairman. 

Mr. DENHAM. Again I would like to welcome our witnesses here 

today. We will now call our panel of witnesses. The first, Honorable 

Bob Goodlatte from Virginia. Welcome. 

TESTIMONY OF HON. BOB GOODLATTE, A REPRESENTATIVE 

IN CONGRESS FROM THE STATE OF VIRGINIA; HON. BRIAN 

D. MILLER, INSPECTOR GENERAL, GENERAL SERVICES ADMINISTRATION; DAVID EHRENWERTH, REGIONAL ADMINISTRATOR, MID-ATLANTIC REGION, GENERAL SERVICES ADMINISTRATION; AND JULIA C. DUDLEY, CLERK OF COURT, 

UNITED STATES DISTRICT COURT, WESTERN DISTRICT OF 

VIRGINIA 

Mr. GOODLATTE. Well, thank you, Mr. Chairman, Ranking Member Norton, other members of the committee. I very much appreciate the subcommittee’s willingness to hold a hearing on this important issue, and for allowing me to testify regarding the Richard 

H. Poff Federal Building renovation in Roanoke, Virginia. 

My statement exceeds 5 minutes, so I know that is a part of the 

record, and I will summarize the points. 

First of all, I want to say that when this—this building was built 

in 1975 at a cost of approximately $14 million. And when it was 

announced in April 2 years ago that this would be a renovation 

project that would cost initially $51 million to replace the roof, windows, bathrooms, and HVAC system, I immediately began receiving lots of contact from my constituents, who thought that this was 

a gross waste of money on a building that has received not a lot 

of plaudits over the years from the people who occupy it as being 

5 

a good building. And that investment did not seem worthwhile to 

them. This included contacts from architects and engineers and 

others who have experience with these types of contracts. 

And so, I immediately began asking questions of the GSA. And 

for about a year, that correspondence took place just between me 

and the GSA. I did not go public with it, because I really wanted 

to get to the bottom of this. I was not looking for any kind of attention to the project, other than what was already being received. 

And then, when I repeatedly did not get any cooperation from the 

GSA, I finally went public with the issue, and a lot more information has been forthcoming, as a result of that, which is, I think, of 

benefit to the committee in examining what went wrong here. 

The GSA repeatedly failed to fully answer my many questions 

about the project’s bid process and design process, in a pattern defined by a lack of transparency, unresponsiveness, and dismissal of 

the public’s concerns about this project from its inception. The 

GSA’s inspector general audited the project, and found that the 

agency provided the bidders the maximum contract amount, in violation of Federal procurement laws, giving bidders that information 

and depriving taxpayers of a fair process to determine the true cost 

of the project. 

The Ranking Member correctly noted that the environment for 

these types of projects has been very good, in terms of getting bids 

below the estimated cost. That did not happen in this instance because the GSA said the maximum amount that they would pay, 

and guess what? That is what the bids were. 

In addition, because of the lack of study ahead of time, it has 

now been determined that the primary tenant of the building will 

have to move out for a long period of time. So this is going to be 

a cost overrun of at least in excess of $60 million, probably $65 million. 

Other than a two-page summary prepared after the project was 

commenced, the agency has never provided a comprehensive cost 

benefit analysis showing that the renovations would be more fiscally responsible than constructing a new building, nor have they 

considered a number of other alternatives that could be less expensive and more effective, including not doing major renovations, selling the building, building a new Veterans Affairs building, as was 

suggested by Virginia Senators Warner and Webb, or building a 

new courthouse. The GSA bypassed the normal procurement process, similar to what was used to build the new Social Security Administration building in Roanoke, preventing the full disclosure of 

the supposed benefits and project costs of green updates. 

The safety and security of the Poff Building has been given only 

cursory attention, despite the structure being located along a major 

thoroughfare in Roanoke’s central business district. I attended a 

meeting in October of 2010 with members of the Poff Building’s security committee and GSA officials to discuss the security of the 

building. To my knowledge, no action regarding the security of the 

building has been taken since then, even though it is widely known 

that there are major security concerns with this building that 

houses the United States District Court, which deals with a lot of 

controversial and high-profile criminals and other types of court 

proceedings. 

6 

The security upgrades to the building, which will have to be done, will require additional funds, because the planned $51 million renovation does not include funding to address the security 

needs of the building. The project’s costs have ballooned by more 

than $10 million, due to the need to relocate the Veterans Affairs 

offices to four different locations in downtown Roanoke for up to 3 

years, posing logistical concerns and inconveniencing veterans, 

many of whom are disabled. 

Many concerns have been raised about the disruption of the processing of claims, inadequate work facilities, problems with employee morale, files being separated in five different locations. The 

central file storage will remain in the Poff Building while the construction is going on, while the walls of the building are off of it 

for periods of time. The files will have to be shuffled around between different floors in order so that they are not exposed to the 

environment. There are serious problems with what is being 

planned for this process. 

I have received many complaints from veterans organizations 

and individual veterans, as well as from many employees in the 

building. In fact, one local veterans organization filed for an injunction, seeking to block the relocation of the Veterans Affairs office 

while the renovation project proceeds. 

I have called for the project to be halted, because I do not believe 

it is worthwhile. Failing that, my faith in the GSA remains deeply 

shaken, and I hope that this public hearing will offer additional opportunities to understand why the Poff Federal Building project 

has been conducted in such an unconvincing manner to date. 

Thank you, Mr. Chairman. 

Mr. DENHAM. Thank you. 

Now the Honorable Brian Miller, inspector general, U.S. General 

Services Administration. 

Mr. MILLER. Thank you, Mr. Chairman. Good morning, Chairman Denham, Ranking Member Norton, distinguished members of 

the subcommittee. Thank you for the opportunity to testify here 

this morning. 

My office reviewed the Poff Federal Building in Roanoke, Virginia, and found that GSA awarded the contract without adequate 

price competition, in violation of the law. This hearing asks the 

question: ‘‘Are taxpayers paying too much for the renovations to 

the Poff Building?’’ The answer is we cannot tell, and we cannot 

tell because of how GSA awarded the contract. GSA set the price 

for construction, instead of using competition. Without competition, 

we cannot gauge whether the prices are fair and reasonable. 

Additionally, GSA did not obtain an independent cost estimate to 

evaluate price reasonableness. Thus, GSA did not follow the proper 

procedures for ensuring fair and reasonable prices for the Poff Federal Building. 

On top of all this, we have an untimely and ineffective cost benefit analysis. A cost benefit analysis compares alternatives of building a new building, or renovating an existing building. This is done 

as part of the decisionmaking and planning process to inform the 

decision that is ultimately made later. GSA, however, performed its 

cost benefit analysis after the decision had already been made, and 

the contract awarded. 

7 

Even the amounts of Federal dollars spent on this project do not 

seem to add up. This project was listed on the Recovery Act’s 

spending plan at $51 million. As of April 6th of this year, however, 

the contract amounts for the design, construction, and management 

of the Poff Building reported in the Federal procurement data system were $52.3 million, an increase of over $1 million. 

The Poff Building is not the only project where competition was 

lacking. We have identified six Recovery Act projects where GSA 

violated the Competition in Contracting Act by incorrectly using 

the construction manager as constructor methodology. I will refer 

to that as CMC. 

In each case, the construction price lacked price competition, as 

it was either set by GSA or set through sole-source negotiation 

with the contractor. In each case, the Competition in Contracting 

Act was violated. 

My office has recommended that GSA institute a system of management controls to ensure that contractors, using the CMC methodology, meet competition requirements. In response, GSA has developed a corrective action plan. The plan includes standardizing 

the CMC methodology, issuing guidance, and providing training to 

GSA project and contracting staff, and having CMC procurements 

reviewed on an annual basis. GSA has begun to implement these 

corrective actions by issuing a standard contract template and 

guidance for CMC contracts. However, other steps are yet to be 

completed. 

GSA has an obligation to spend the taxpayers’ money on sound, 

well-thought-out projects that make the best use of taxpayer dollars. Our reviews show that GSA does not always meet this obligation, and did not do so here, at the Poff Federal Building. 

I welcome any questions the subcommittee may have. Thank you. 

Mr. DENHAM. Thank you, Mr. Miller. 

Mr. David Ehrenwerth, regional administrator, U.S. General 

Services Administration. You may start your testimony. Thank 

you. 

Mr. EHRENWERTH. Thank you. Good morning, Chairman 

Denham, Ranking Member Norton, and distinguished members of 

the subcommittee. I very much do appreciate the opportunity to 

come here today and discuss this really exciting renovation of the 

Richard H. Poff Federal Building and courthouse in Roanoke. 

This absolutely critical project, which is funded by the American 

Recovery and Reinvestment Act, is a much needed investment in 

the GSA inventory that is going to keep a core, long-term asset 

functioning, while increasing its performance and its energy efficiency. This building modernization is part of our commitment to 

help the Nation’s economic recovery by investing in aging infrastructure while creating jobs in local communities. 

As a responsible asset manager, GSA must ensure that our 

buildings are well-functioning, safe, and welcoming for all tenants 

and visitors. We have expertise in effectively managing building operations, and responding to the concerns of our occupants. 

The Poff Federal Building, which, as you have heard, houses the 

Department of Veterans Affairs and the courts, is 36 years old, and 

has never had a major renovation. The building is really in need 

of significant repairs to ensure that the building operates efficiently 

8 

and provides a workplace environment that helps these crucial tenant agencies meet their missions. A modernization of this facility 

is simply the most cost effective way to meet the government’s 

housing needs in Roanoke. 

The Poff Federal Building was categorized as an under-performing asset in GSA’s inventory. Our building surveys and studies 

show that significant reinvestment is needed to repair this aging 

building. The Recovery Act provided us with the opportunity to invest the funds necessary to update the building systems and features with high-performance ones. Once this project is complete, 

the building will be a performing asset with an anticipated strong 

financial return, while satisfying the long-term customer needs. 

This project will extend the useful life of the building, and will improve public accessibility, while keeping Federal workers in owned 

and not leased space. 

Specifically, this renovation includes replacing the inefficient, 

poor quality, and leaking single-pane glass curtain wall with a new 

energy-efficient curtain wall that will better regulate the building’s 

internal temperatures, and reduce operating costs. Currently, the 

windows are so bad that some of the tenants cannot even see out 

them, including our marshals. 

The project will also replace the deteriorating roof with a solar 

system to generate electricity. This new roof will prevent heat 

build-up and reduce the building’s air conditioning load. Additionally, this project will improve the building’s lighting and mechanical systems with new, energy-efficient systems and technologies. 

We are replacing failing building systems that have simply reached 

the end of their useful life, including the heating, ventilation, and 

air conditioning systems. 

Currently, half of the tenants in the space are hot, while half of 

the other tenants are cold, often on the same floor. A new system 

must be installed to improve building conditions and reduce further 

repair costs. 

GSA is also addressing deficiencies that impair our tenants’ ability to serve the public, particularly the Veterans Administration 

and the veterans that they serve, which occupies about half the 

building. We are improving the accessibility for handicapped individuals. We are renovating public restrooms to better serve our Nation’s disabled veterans who visit this building, by meeting the Architectural Barriers Act accessibility standards, which is the Federal equivalent of complying with the Americans with Disabilities 

Act. 

Additionally, the floor structure will be strengthened to ensure 

that it is capable of safely supporting the current and future 

weight file needs of the VA, a crucial activity. 

GSA wants to ensure that we pursue this project in partnership 

with the community and to help create jobs. I have participated in 

a number of meetings and forums in Roanoke, including one with 

the city council of Roanoke, to explain the benefits and opportunities of the project, and why we are pursing it. The very enthusiastic response we received was quite gratifying. 

In these forums I have discussed the importance of ensuring that 

GSA assist the general contractor, Balfour Beatty, in outreach to 

the community and seeing where there might be opportunities for 

9 

subcontracting participation. And there are many. Balfour Beatty 

has held a number of small business forums on its own, including 

one just this week with veterans groups and others. And they will 

continue to do so throughout the project to help engender the participation of local businesses in subcontracting. 

The design of the Poff Federal Building is now complete. The 

swing leases have been awarded. And construction begins this summer. The investments in the Poff Building will help stimulate job 

growth, increase building performance, and transform the Poff Federal Building into something it is not now, a welcoming, sustainable, productive workplace for Federal employees and for the public 

who come to this building to receive necessary and important services. 

As I said at the beginning, I greatly appreciate the opportunity 

to come here today, and to discuss this important investment. And 

I welcome any questions you have. 

Thank you. 

Mr. DENHAM. Thank you. 

And now, Ms. Julia Dudley, clerk, U.S. District Court for the 

Western District of Virginia. Welcome. 

Ms. DUDLEY. Good morning, Chairman Denham, Ranking Member Norton, and esteemed members of the subcommittee. I am the 

clerk of court for the Western District of Virginia. And I appreciate 

you giving me the opportunity today to come and give testimony of 

the impact this project is going to have on the operations of the 

court. 

Last July, the clerk’s office moved from the third floor of the Poff 

Building into renovated space on the fifth floor. This move, in 

itself, was a long time coming. The move put 24 of my staff members into contiguous, well-designed, and functional space. The environment of the office—the morale lifted, the staff is very, very 

happy with our new space. It is a significant change from the 

chopped-up, cramped, and dysfunctional space we once occupied. 

The new space also provides a private office where attorneys and 

the public can access a public computer terminal. And there they 

can file pleadings, they can check court records. We also have an 

appropriately sized and comfortable assembly room for our jurors 

and grand jurors, and also for the citizens-to-be where they can 

wait until a naturalization ceremony begins. 

However, by this summer, we will be relocating staff around and 

within our space to accommodate the replacement of windows, 

lights, and the HVAC system, all part of the ARRA project, as we 

call it. 

GSA has hosted numerous informational meetings with the court 

family. These meetings have been good. The GSA project manager 

and other project participants have walked us through the phasing 

and construction details of the project. GSA has also been very responsive to our requests to accommodate the operational needs of 

the court. However, once the ARRA project begins, and for its duration, we will again occupy chopped-up, cramped space, and lose privacy and functionality. 

Neither the clerk’s office nor the probation office nor the four 

judges whose chambers are located in the Poff Building will move 

during this project. Not that we elected to stay in this space, but 

10 

because of lack of rentable space with courtrooms in the Roanoke 

area. So, instead of moving away from the construction, we will 

stay put throughout the 3 years, or however long it takes to finish 

the construction, as we carry on with our duties. 

Some of the direct impacts of this project will be: lost work time 

as we shuffle and relocate within our own spaces; additional work 

for our IT department; reduced courtroom capacity—we will lose 

the magistrate judge’s courtroom for approximately 12 months to 

however long during one phase of this project. Also, work on the 

mechanical, electrical, and plumbing will go on every day on every 

floor throughout the project. Noise, dust, the presence of workmen 

will be a distraction to the staff. 

There likely will be temporary loss of power, heating, air conditioning. There could be a disruption to our security system and our 

IT infrastructure. The cafeteria in the building closes during the 

project. Because the windows will be blocked by temporary walls, 

we will lose some of the natural lighting in our space. The employees who are now in offices along the perimeter of the building will 

be relocated to temporary cubicles constructed within the interior 

of our office. It is like we are all squeezing together, and we will 

have to learn with inconvenient clutter for the next several years. 

Gone will be the private office for where the computer terminal 

is located. Gone will be the appropriately sized and comfortable 

room for our jurors, grand jurors, and citizens-to-be. Additionally, 

the probation officers will have to move out of their offices into 

temporary structures that will afford little privacy to the officers 

and the clients who must visit them. 

My staff, just as all Federal employees, have been asked to conserve materials and cut back on spending. Now, we are being told 

that we will have to endure much disruption and distraction for the 

next several years while at work. With GSA being unable to relocate the court to outside space, the court and its related agencies 

will be the only occupants coming to work in what essentially will 

be a largely empty 14-story construction zone. No doubt you can 

imagine the impact this will have on the morale of the staff. 

Though I fully expect my staff to weather this construction period and continue to give services to the court and to the public, 

disruption of the work environment and our operations is just a 

fact of construction life. As with any construction project, you go 

into it with high hopes that the result will be good. However, you 

also have anxiety and uncertainty as to how long the project will 

actually last. But we are trying to keep the end in sight, and that 

end will be, hopefully, windows we can actually see out of, heating 

and air conditioning that works well, and a return to appropriate 

and functional space. 

Thank you for your time. I would be happy to answer any questions. 

Mr. DENHAM. Thank you, Ms. Dudley. I would at this time ask 

unanimous consent that our witnesses’ full statements be included 

in the record. Without objection, so ordered. 

We will have two rounds of questioning this morning. We are 

going to keep a real strict time limit on the 5-minute rule. I would 

like to start, first of all, with Representative Goodlatte. 

11 

You have been—you have done a lot of work investigating this 

topic, this project. From what you have found, do you believe GSA 

got the best deal for the taxpayers, and could you expand on—— 

Mr. GOODLATTE. Well, thank you, Mr. Chairman. As Mr. Miller 

says, we will never know what the best deal was. But, as the Ranking Member pointed out, on a multitude of these projects around 

the country, bids have come in lower than was anticipated. That 

did not take place here, because the GSA broke the law and who 

knows how much the savings might have been—$10 million, $15 

million. 

And that just is—in terms of the cost of this project, there was 

no cost benefit analysis done to determine whether not doing this 

building or doing this project in a completely different way would 

have been more effective, and addressed the needs of the tenants. 

We have heard from the clerk of the court. The VA has an even 

bigger problem, in that they are dispersed to four different locations, while their files remain in the construction zone. 

I call your attention to all members of the committee. This is the 

cost benefit analysis that was done after the decision was made. 

Two small paragraphs on this page, and two columns of figures on 

this page, and some of the assumptions made here—I would love 

to have the committee ask some other contractors or architects or 

engineers whether, if you built a new building, your energy costs 

would be identical to this building. 

It seems to me—and I am not an architect or engineer—but if 

you build a new building, the energy efficiency with new materials 

and new design is going to yield savings that are not achieved here. 

And yet, even after they are all done with this, the savings over 

the life of the 30-year projected life of this is only $8 million out 

of $111 million that they are talking about. 

In addition, the alterations, both by the building owner, the GSA, 

and by the tenants are estimated to be the same. The construction 

costs are estimated to be vastly higher for a new building, and yet 

there is no documentation of that. And the design costs are double. 

But I think they have put an awful lot of effort and energy into 

the design of this building for not much benefit. 

Mr. DENHAM. And could you also explain how the law was broken in this case? 

Mr. GOODLATTE. Yes. As the inspector general discovered, the 

GSA transmitted to the bidders the maximum amount that the 

government was willing to pay on the project, prior to the bidding 

taking place. That, I think, resulted in all of the bidders bidding 

that maximum amount. And did we lose $10 million, $15 million? 

I do not know how much we lost. But clearly, this was not done 

properly, and should have been done properly, and perhaps still 

could be done properly. But it is very disappointing to me and to 

my constituents. 

Mr. DENHAM. And, Mr. Miller, as you look at GSA contracts, is 

this typical, where the max bid is given out, or is it a more competitive process, secret bid process? 

Mr. MILLER. Mr. Chairman, the GSA is required to get competition under the Competition in Contracting Act by not getting—by 

giving out the maximum guaranteed price, they essentially did not 

get competition for this project, in violation of that act. 

12 

They have had this problem in other projects. I have listed six 

of those projects in my written testimony. And they are primarily 

connected to the use of this vehicle, the construction company as 

constructor methodology. And that methodology does have its virtues, which perhaps Mr. Ehrenwerth would like to explain. But it 

does create problems if it is not used correctly. And one of the chief 

problems is no competition, sole sourcing, and the result is taxpayers do not get their money’s worth. 

Mr. DENHAM. But in this case there was competition. You had 10 

bidders, correct? 

Mr. MILLER. There was—first of all, there was competition at the design phase, and that is $225,000 worth. So there was some competition. But the bulk of the project, the $39 million worth of it, 

the bulk of the project was not adequately competed, because they 

gave out the maximum price. And all the contractors, not surprisingly, put in the maximum—guaranteed maximum price. So there 

was no competition there, they all put the same price in, the price 

they got from GSA. 

Mr. DENHAM. And how many bids came in on the final process? 

Mr. MILLER. I am not aware of exactly how many bids came in, 

but they all bid the same amount, so the competition element was 

not there. 

Mr. DENHAM. Mr. Ehrenwerth, how many bids came in in the 

final process? 

Mr. EHRENWERTH. I can confirm that to you. I believe it was 10. 

Mr. DENHAM. Would that have completed the entire process? 

Mr. EHRENWERTH. No, it did not. If I might explain how this 

works to you—— 

Mr. DENHAM. Briefly, and then we are going to go on to other 

questions, and I want to follow up on this on the second round, as 

well. But if you could, briefly—— 

Mr. EHRENWERTH. Well, thank you. I respect and admire your interest in this, as well as the IG’s, from whom we learn often. 

But the way this works, which I think is crucial to an understanding of the process, is that we use this construction method to 

get the contractor in earlier, to collaborate in the design, to have 

efficiencies and cost savings. It is true, as the IG points out, that, 

as we acknowledge, the guaranteed maximum price was not appropriate, and we are changing that. 

But what is missing from that analysis is that the vast, vast majority of the work on the project is accomplished by subcontractors 

who always were intended to be competitively bid in an open process, and under our contracts and procedures, all the vast majority 

of that saving is recouped by the government. 

So the bottom line of all of this is that there will be a competitive 

bidding of virtually the vast majority of this project. And the vast 

majority of that saving, after a small incentive to the general contractor to make sure we get the best and cheapest prices, will go 

right back to the Federal Government. 

So, the procedures, while clearly needing to be modified, are designed to preserve the best product for the best price, and get any 

savings back to the government. 

Mr. MILLER. Mr. Chairman, if I could, very briefly? The—— 

Mr. DENHAM. Very briefly. 

13 

Mr. MILLER. It is better to compete it upfront, so that you get 

the savings upfront. There may be some savings later on with subcontractors. Any savings, however, would have to be shared with 

the contractor, itself, so that that savings is—— 

Mr. EHRENWERTH. Well—— 

Mr. DENHAM. Thank you, thank you. We are not going to get into 

a debate here, but I would like to follow up on this on the next 

round of questioning. 

At this time I would like to turn it over to Ranking Member Norton. 

Ms. NORTON. Mr. Ehrenwerth, you began to explain the agency, 

but I just want to say for the record I found your testimony wholly 

unresponsive to the subject matter of this hearing. This hearing is 

not about the project and its strong points and energy conservation. 

It is not about the local community—and I congratulate you on all 

of that. 

The very serious question is raised about the price competition. 

And the subcommittee, we have had some concerns about price 

that have emerged over time. For example, we have supported best 

value, because of the technical details and the need to take everything into account. But increasingly, best value does not seem to 

take price enough into consideration. 

You need to explain, first of all, if six projects were done, were 

these all six Recovery Act projects that were done using this? 

Mr. MILLER. Yes. 

Ms. NORTON. Yes, says Mr. Miller. So, all the other projects— 

none of the other projects uses construction manager approach? 

Mr. MILLER. All six do. 

Ms. NORTON. None of the other projects. They have 200-some 

projects. None of your other projects use this approach to the renovations that you know of, Mr. Miller or Mr. Ehrenwerth? 

Mr. EHRENWERTH. The technique is a standard one for the good 

purpose, as I believe, as I indicated—— 

Ms. NORTON. All right. If six used it—— 

Mr. EHRENWERTH. Right—— 

Ms. NORTON. I have 5 minutes. If six used it, Mr. Miller, do you 

know of any other of the 275 or so that also used this? 

Mr. MILLER. There are others, and they are under review currently. 

Ms. NORTON. Other than the six? 

Mr. MILLER. Yes. 

Ms. NORTON. All right. 

Mr. MILLER. And it is—— 

Ms. NORTON. Then we got to get at the root of this, because you 

concur, Mr. Ehrenwerth, with the inspector general. And you did 

so without much explanation. And you say that savings occurred— 

this time, certainly, you say—at the subcontractor level. If that is 

the case, then I want to know what was the disadvantage of proceeding with the usual competition for this project? 

Mr. EHRENWERTH. I think there are—— 

Ms. NORTON. Or perhaps put the other way, what was the advantage of proceeding in this way? 

14 

Mr. EHRENWERTH. I believe the advantage of using this method 

was to have a coordinated approach between the contractor and the 

design process, so that it was effective and efficient—— 

Ms. NORTON. Did you anticipate that putting a price out there 

would mean that every single bidder would come up with the same 

price, implying no competition whatsoever? 

Mr. EHRENWERTH. Let me try to explain that the price, of course, 

was not picked from thin air. The price was the result—— 

Ms. NORTON. No, I understand that. 

Mr. EHRENWERTH [continuing]. Of all the estimates that—— 

Ms. NORTON. You know what? That is what—I understand that. 

But there is a marketplace out there, and people anxious to get 

work. So, when the government says, ‘‘Here is the number,’’ why 

in the world—and who knows, they may have been talking to one 

another, because we will never know that—but why does that encourage competition? 

Mr. EHRENWERTH. I think that we agree that that approach of 

the guaranteed maximum price should not be used in the future. 

The point I was trying to make, however, is that the process that 

was established—let’s understand that well over 80 percent of the 

price is really established by what subcontractors bid. And let’s understand that—— 

Ms. NORTON. So if that is the case, you see, I have a problem understanding why we ever, then, use competition on the front-end of 

a project. 

Mr. EHRENWERTH. Oh, I have agreed with you, I think, that that 

is—best guaranteed maximum price, which is the maximum price, 

not the price that will be paid, and what I have been trying—— 

Ms. NORTON. You have given no explanation as to why you have 

used this construction manager price approach. Have you no justification for it? 

Mr. EHRENWERTH. It is a—the construction management contractor approach, as distinct from the guaranteed maximum price, 

which was part of it, is highly used, and a well-established, efficient—— 

Ms. NORTON. Oh, yes. I am talking about construction manager 

approach. 

Mr. EHRENWERTH. Well, that approach, without the guaranteed 

maximum price, is well established to create efficiencies and effective ways to design and build a building. 

The guaranteed maximum price, which was utilized here in the 

context of the Recovery Act to move these projects along and create 

jobs, is clearly not one that we should use, as the IG said, and we 

are correcting that. I am not trying to justify it. I am trying to explain that through the subcontracting process, we believe that the 

vast majority of—if there is any excess amount in that guaranteed 

maximum price, which was the result of very substantial GSA calculations, the vast majority of that will be recouped through the 

subcontracting price, and we will not be using that guaranteed 

maximum price in this context again. 

Ms. NORTON. Mr. Chairman, my time is up. Could I ask, though, 

since we have learned that there are even more than the six that 

may have used this form, this construction manager form, and we 

have been told that there is going to be savings to the government 

15 

from the subcontracts, that on each of these projects, the six and 

any others that are found, the savings or, if no savings, be reported 

to the chairman of the subcommittee, be shared with the subcommittee? 

Mr. DENHAM. Thank you. 

Mr. EHRENWERTH. Happy to do that. 

Mr. DENHAM. Thank you. The chair now recognizes Mr. Hultgren 

for 5 minutes. 

Mr. HULTGREN. Thank you, Mr. Chairman. Let us start with Mr. 

Ehrenwerth, just a couple of questions, if that is OK. 

Current estimate for the renovation of the Poff Building is $51 

million. Just wondered, does that include cost for temporary space 

for VA? And, if not, what are the costs associated with swing space, 

including moving costs? 

Mr. EHRENWERTH. No, Congressman, it does not. As was pointed 

out, it is crucial to us that the remodeling and modernization occur 

in a way that does not disrupt tenants. So, in collaboration with 

the VA and all involved, we have set up an arrangement where 

there will be four temporary swing space locations established in 

a manner to serve the VA and that has a cost to it. One has to 

move in there, pay rent, in lieu of, of course, what would be paid 

in the Federal building. So there is a cost of an additional $10 million, approximately, for all that process. 

Mr. HULTGREN. So it is $10 million for the space, including moving costs? 

Mr. EHRENWERTH. A lot of it is dependent, of course, in terms of 

how long we are there, because we pay rent at new space depending on how long we are in the new space. If it is shorter, it will 

be less. If it is longer, it will be more. But the overall project is 

in the $10 million, plus or minus, range. 

Mr. HULTGREN. OK. Including the moving—— 

Mr. EHRENWERTH. For what we are talking about, the—— 

Mr. GOODLATTE. Congressman Hultgren, if I might add, I do not 

believe that does include the $3 million cost of moving the VA out 

to these four locations and moving them back. 

Mr. EHRENWERTH. Oh, I am sorry. Would you like me to analyze 

the—— 

Mr. HULTGREN. No, I just wanted to know the cost of it. So it 

is $10 million for the rental of the space, and $3 million—— 

Mr. EHRENWERTH. The rental of space—— 

Mr. HULTGREN [continuing]. For the move to the four other spots, 

is that right? 

Mr. EHRENWERTH. The rental—Congressman Goodlatte makes 

an appropriate point. The rental of the space, the build-out of what 

we need to do to make the VA function, and so forth, is in the $10 

million or small amount more than that range. 

There is a cost to move, and to coordinate the move, and to do 

all that goes with that. Very complicated move. That could be another $4 million, roughly. 

Mr. HULTGREN. So $4 million for the move. OK. 

According to the GSA inspector general, current GSA data indicates that the Poff Building renovation has already exceeded the 

amount listed in GSA’s Recovery Act spending plan. How do you 

16 

account for this increase, and what assurances do we have that the 

cost will not increase further? 

Mr. EHRENWERTH. That, I believe, is an accounting bookkeeping 

entry. We have not expended, and do not intent to expend more 

money than is budgeted. The vast majority of it is in our Recovery 

Act major fund. There is a separate fund for which the other part 

is budgeted. All—I would be happy to very transparently convey all 

of this to you, but there is no expenditures that are not covered in 

our budgeted plans. 

Mr. HULTGREN. Congressman Goodlatte, do you have a comment 

on that? 

Mr. GOODLATTE. Thank you, Congressman Hultgren. First of all, 

the reason why we have $10 million plus $3 million plus we do not 

know how much more, is because there was not proper planning 

done in advance, and a proper cost benefit analysis was not done 

in advance. 

Secondly, there are major security issues with this building. And 

it is agreed that those are going to have to be addressed. No plan 

has been put forward on how it is going to be addressed, or who 

is going to pay for it, and how much it is going to cost. But that 

is also an additional substantial cost that is not accounted for at 

this point. 

Mr. HULTGREN. Well, that is something I wanted to ask, as well. 

With the security questions of the move here, I wondered how that 

is going to be addressed, and wanted to make sure we get a commitment from you to brief us on these security issues and what 

GSA plans are to remedy security issues. 

Mr. EHRENWERTH. Well, you certainly can have that commitment, Congressman, and we are happy to brief you. 

We have worked very closely with Homeland Security, with Federal Protection Service, with the marshals, with the judges, to 

make sure that this building is safe and secure. Remember, we are 

doing this with Recovery Act funds that have specified purposes to 

the extent that—and there is no security issue that makes this a 

high-risk building, based on all we have been told by the experts. 

To the extent security upgrades are appropriate or necessary, 

separate funding is being sought for that. 

Mr. HULTGREN. Congressman Goodlatte, it looked like you maybe 

had something to say on that. 

Mr. GOODLATTE. Let me just—some of this you might want not 

to discuss in a public hearing, because we do not want to go into 

too much detail about what those—— 

Mr. HULTGREN. Well, and that is fine. I do think we need to get 

this information, though, to our subcommittee, at least. But—— 

Mr. GOODLATTE. Some of these issues have been raised publicly. 

This building is vulnerable. I have attended meetings of the security committee, which is a group of representatives from the various agencies that are in the building, none of which have authority—nor does this committee have authority—to act, unless the 

parent agencies provide agreement and funding to proceed. 

And so, to put money into a building that has this kind of a problem and not have a plan to address these major security concerns 

which exist right now at the building—and Homeland Security and 

others responsible for security in the building will tell you that, the 

17 

U.S. Marshal’s office and so on will tell you that right now—is, I 

think, irresponsible. 

And the construction project is about to move forward. The court 

is still going to be operating there. There are going to be lots of unusual activities taking place on a construction site, and there is no 

coherent plan to address the security during that part of the process. 

Mr. HULTGREN. My time is up. I yield back. 

Mr. DENHAM. Thank you, Mr. Hultgren. Mr. Ehrenwerth, what 

is the security level of the building? 

Mr. EHRENWERTH. I am sorry, could you repeat that? 

Mr. DENHAM. What is the security level of the building? 

Mr. EHRENWERTH. I am not sure I understand your question. The 

building is deemed to be appropriately secure for a courthouse. 

Every courthouse can be improved. There are things to be—— 

Mr. DENHAM. There are different security levels, as I understand 

it, for—depending on—— 

Mr. EHRENWERTH. Oh, for different Federal buildings? 

Mr. DENHAM. Yes. 

Mr. EHRENWERTH. Let me inquire. 

Mr. DENHAM. Number five is the White House. Is it the same as 

the White House? 

Mr. EHRENWERTH. It is not—— 

Mr. DENHAM. Is it a four, then? 

Mr. EHRENWERTH. It is not like the White House. There are—— 

Mr. DENHAM. Is it a level four? 

Mr. EHRENWERTH. I do not have the information in that context 

for you. I would be happy to get it for you. 

My point simply was that, in collaboration with all the affected 

parties, we regularly address security and—— 

Mr. DENHAM. And it is not my time right now, but my point is 

I am just—I am alarmed at not knowing, first of all, what level of 

security it is. But, secondly, I would want to make sure that whatever the current level of security is, that the temporary facility is 

that same level of security or higher, so that we make sure that 

the good folks of Congressman Goodlatte’s district are safe. 

Mr. EHRENWERTH. Absolutely. 

Mr. DENHAM. And now I will recognize Mr. Gibbs for 5 minutes. 

Mr. GIBBS. Thank you, Mr. Chairman. Mr. Ehrenwerth, I assume 

that you are the guy that signed off on all this. You are in charge, 

right? 

Mr. EHRENWERTH. Well, I am the regional administer. GSA has 

a number of people that approve what goes on, some of which occurred before I got here, but I am—— 

Mr. GIBBS. How long have you been in this position? 

Mr. EHRENWERTH. I have been here since last August. 

Mr. GIBBS. Last August? 

Mr. EHRENWERTH. Yes. 

Mr. GIBBS. What did you do before that? 

Mr. EHRENWERTH. I was a partner at a law firm specializing in 

real estate development law for 35 years. 

Mr. GIBBS. OK. I have a lot of concerns. I mean this is really embarrassing, I think, that your testimony—to follow up on Congresswoman Holmes Norton, you know—is about the project, and all the 

18 

good things you are doing with the building. But, you know, you 

broke the law, as far as I am concerned. 

Did you do a cost benefit analysis if we should sell the building, 

versus renovate? Whenever I do a project—I do some stuff back 

home in Ohio—you know, I determine if it is worth putting the 

money in an old project, or to build it new. Did you guys do an 

analysis? 

Mr. EHRENWERTH. Absolutely. I am very glad you asked that 

question, because I think we may have not focused enough on the 

fundamental question here. We are, at core, an asset manager. The 

first question we ask: ‘‘Is this an important asset that, if an 

amount of money that is rational is spent on it, will extend its useful life to make it an effective building at a much lower cost than 

building a new building, or any other alternative?’’ And we looked 

at it closely, and the answer was a clear yes. 

The reason for that is it would cost twice as much to build a new 

building, and the building simply could not continue to function. 

And if we did not spend this money, it would deteriorate further, 

the cost would be greater, and there was simply no alternative. It 

was suggested also, for example, that we sell the building to some 

private developer and let that person spend the money. Well, I 

have been in the real estate legal world long enough to know that 

any developer who would do that would have to make a profit. So, 

you have all the costs that we have, plus his profit. And at the end 

of it, guess what? We do not own the building. So, none of those 

alternatives made sense. 

Mr. GIBBS. Well, I think that is questionable. I think my colleague wants to respond to that. 

Mr. GOODLATTE. Well, I think the claim that a cost benefit analysis was done is simply not accurate. The fact of the matter is no 

cost benefit analysis was done prior to the work. The inspector general has confirmed that. And if you call this a cost benefit analysis, 

I think that any private entity making the kind of decision that 

you are talking about here, involving the expenditure of $65 million 

or more, would spend a little more effort and a little more energy 

in doing it. 

And then, I think it is worth looking at some of the conclusions 

they have drawn in here, saying that, for example, the energy efficiency on a retrofitted building will be the same as a new building 

of the same amount of square footage. 

It also does not address the needs of the United States District 

Court—and perhaps the clerk would like to address it—but they 

have specific needs that are not addressed in this building, and will 

not be addressed after this retrofit. And the VA has told us the 

same thing. So, while this is definitely, you know, going to improve 

the building, the cost benefit analysis has not been done. 

And one of the big advertisements in green energy—the local 

newspaper, The Roanoke Times, did a Freedom of Information Act 

request, and finally got some information on which to do some 

analysis of the energy savings involved here. And one conclusion 

was that it could take as long as 218 years to achieve a payback 

on the energy savings in this building. Now, I do not know if it 

would be that long, but clearly that is way beyond the life of the 

building or the equipment that will be put in the building to 

19 

achieve that energy efficient. I do not think a cost benefit analysis 

was done. 

Mr. EHRENWERTH. If—— 

Mr. GIBBS. Go ahead. 

Mr. EHRENWERTH. If I just might clarify one thing, remember 

now, the base reason we are doing this is because the systems are 

no longer operational. We need to act to improve them, or this 

building will not be viable. 

As a bonus of that, there are various energy efficiencies and sustainable goals. That is not why we are spending all this money. We 

are spending all this money to make this building a strong asset 

for many years to come, which we have done, in collaboration with 

the VA and the local courts. 

And, by the way, I have just been advised that the building is 

level four, and of course all the contracting staff is cleared by the 

Department of Homeland Security. We are taking every step—— 

Mr. GIBBS. This is my time. I am very concerned. I think, Mr. 

Chairman, that, you know, obviously there was not competitive bidding done, there was not a cost analysis study done that, to my 

level, that should be. And I think that, you know, the first thing 

that comes to my mind is just plain incompetence. 

And then, if it is not incompetence of how this has been handled, 

it really does kind of smell of how the use of the stimulus dollars 

was used. And, you know, and I think we really—I do not know 

if the inspector general—this might be a question for the inspector 

general. Will there be more investigation, because this was a political favors payback with stimulus money? Because this thing really, to me, smells. 

Mr. MILLER. Congressman, we are reviewing other uses of the 

construction company as contractor. They are under review. We are 

currently working with the Public Building Service to find out the 

root cause, the root problem involving the construction manager as 

contractor, and we have had discussions with the commissioner of 

the Public Building Service, which is—who is the highest ranking 

member of the Public Building Service. And we are currently working with him and the Service to find out what is causing this. 

One of the—I am sure Mr. Ehrenwerth would confirm that one 

of the virtues of the construction manager as contractor vehicle, as 

far as it concerns the Federal Government, is that it gets the 

money out quickly. It commits it quickly, the money gets obligated 

quickly. 

Mr. GIBBS. My time is up. 

Mr. DENHAM. Thank you. The chair now recognizes Ranking 

Member Norton for 5 minutes. 

Ms. NORTON. The ultimate cost benefit analysis for this committee has always been will we end up leasing, where the money 

goes to a private contractor forever, just as what happened in the 

Transportation building, located right here in this city. 

Representative Goodlatte, we have a letter from January the 7th 

that you wrote to Mr. Ehrenwerth, where you said you had received a letter from a constituent, Mr. Jake Kofter of Feldheimer 

Commercial Real Estate. You met with Mr. Kofter regarding his 

proposal for a private alternative to the government’s renovation of 

the Poff Federal Building. And you even say in your testimony that 

20 

there were a number of alternatives that could be less expensive 

and more effective, including not doing major renovations, selling 

the building, et cetera. And you point to the OMB analysis. 

I am not sure, Mr. Goodlatte, if you are aware. This building 

would have been amortized, had it been sold, over the first term 

of the lease—usually that is about 15 years—you are talking about 

selling the building, a building we own, to another owner on a 

lease-back arrangement, which you seem to favor for your constituents, which would mean that the Federal Government would then 

pay rent on a building it once owned. 

And if the experience of this committee is any guide, particularly 

since, in effect, we would have paid for the renovation anyway, we 

will pay for the rent, and the building, and, at the end of the lease, 

we will go again. We will lease it again. Because, after all, we have 

made a considerable investment in it. It is as if you had a house, 

it needs a lot of repair, but you say to somebody else, ‘‘You repair 

it, and I will lease it, and I will keep leasing it for my life and for 

the life of everybody in the—who wants to live in this house.’’ 

Now, this has been one of the great wasters of money of the Federal Government. The Transportation building is a prime example 

of it. We are not going to move from that building. But because of 

the way in which scoring works, we are in the outrageous position 

of, in effect, leasing back the building that is the headquarters 

building we will never move from. 

Whatever they did wrong—and I certainly have nothing to say 

about what—nothing good to say about what the GSA did—I must 

say—— 

Mr. GOODLATTE. Congresswoman—— 

Ms. NORTON [continuing]. I find your proposal even worse. 

Mr. GOODLATTE. Congresswoman, may I respond to that? Because that is not my proposal at all. 

Ms. NORTON. Well, you say it even in your testimony, Mr. Goodlatte. 

Mr. GOODLATTE. Well, let me respond, if I might. First of all, I 

received inquiries from constituents about what was going on. One 

individual came to me and said, ‘‘We think we have a better idea. 

We forwarded it to the GSA.’’ 

We are not advocating that. We are saying that a cost benefit 

analysis should have been done that took into account all of the different options that were available, including the option proposed by 

anybody—not that particular individual, because this would have 

been done before this all ever took place—but anybody could certainly have an idea. No such study was done by the GSA to make 

any determination about that. 

If you talk to people who are in the building, they will tell you 

that that building does not suit their needs. So one option would 

be to sell the building and use the money that was made available 

here to do something different, whether it is to build a new building or to build a courthouse and move the VA to a different facility. 

There are lots of different options that were not—— 

Ms. NORTON. We do not know that, Mr. Goodlatte. We do not 

know if, you know, if—— 

Mr. GOODLATTE. We do not know any of that. 

21 

Ms. NORTON. Go around Roanoke and just do a new building. We 

know that they have invested in this building. Your options were 

not doing major renovations—I think we can cross that off. The 

courts, the vets who were seriously dislocated, all agreed that this 

was not a suitable facility. Selling the building with us leasing it 

back, do you understand that that would not have been a viable alternative for the taxpayers? 

Mr. GOODLATTE. I think that there are different alternatives 

in—— 

Ms. NORTON. Would you—I am asking about this one, Mr. Goodlatte. 

Mr. GOODLATTE. Well, look, I do not know whether that is a good 

alternative or not, because no effective study was done to determine whether or not any of these alternatives made more sense 

than what was decided to do here for a project that was supposed 

to be shovel-ready, and here, 21⁄2 years later, they have still not 

begun construction on the project. 

So, the fact of the matter is that, like you, when I get inquiries 

from constituents I forward them on to the agency so they can consider whether they are good ideas or not. That in no way, shape, 

or form, constitutes—— 

Ms. NORTON. Well, I am glad you do not endorse selling—— 

Mr. GOODLATTE [continuing]. Any particular idea. 

Ms. NORTON. I am very glad you do not endorse what would 

clearly have been the worst of the alternatives, Mr. Goodlatte. 

Mr. DENHAM. Thank you. The chair now recognizes Mr. Hanna 

for 5 minutes. 

Mr. HANNA. Good morning, everyone. I have been in the building 

business for about 30 years, probably bid 2,000 jobs in my life. 

Been pretty successful. The one thing I have learned about the 

business is that competition is not only free, but it is your friend. 

And when you exclude it, you automatically get something different 

than the optimum outcome. 

I am curious, Congressman. What would be your remedy to all 

this, if you had a chance to do it all over right now? 

Mr. GOODLATTE. First of all, I think you would do a cost benefit 

analysis of whether this building is worth putting $65 million into 

it when it cost $14 million to build just 30, 35 years ago. 

Secondly, you would look at whether or not it makes sense, given 

the heightened security concerns that certainly have taken place in 

the last—certainly since this building was built, to determine 

whether it made sense to have the largest tenant in the building, 

the Veterans Administration office, having a key role in determining security issues with a United States District Court, which 

has very, very different security concerns. 

And it would make sense to me to look at whether you would 

move the court out and build a smaller building to house the court, 

and make some renovations to this building, and give the VA more 

space, which they say they will need, even after this process is conclude. Those would certainly be good alternatives. 

Given the economic environment that we are in today, and given 

the fact that this building is functioning, I would think that a very 

legitimate thing to consider would be to not do anything major with 

22 

these dollars right now. Rather, take the time to figure out what 

the long-term needs are. 

I think what happened here is that the GSA had a building that 

they want to keep, clearly, and they suddenly had a lot of money 

made available to them. This building generates—I believe, if you 

look into it—a net revenue to them, because the tenants in the 

building, the court and so on, make their books look better. Why 

not take free money and put it into an old building, regardless of 

the cost, and let us keep that revenue stream flowing? 

None of that was properly openly analyzed and reviewed before 

this decision moved forward and was made. 

Mr. HANNA. So it is safe to say that you are not here with any 

particular predisposition, you just would like to maximize the opportunities to find the best outcome. 

Mr. GOODLATTE. That is correct. 

Mr. HANNA. Mr. Ehrenwerth, do you think that because of the 

stimulus package and the rush to get that money out there for 

what was generally regarded—and hopefully were shovel-ready 

products—projects, do you think that that was a cause for this type 

of sloppy process, which I think we would all agree is? 

Mr. EHRENWERTH. Well—— 

Mr. HANNA. A less-than-optimum. How is that? 

Mr. EHRENWERTH. Well, certainly there is always room for improvement. The Recovery Act in this particular case, and in all 

cases that I am aware of, is creating a lot of jobs and doing a lot 

of necessary work on our properties. 

It is agreed, as we told the IG previously, that we agree with his 

criticism with respect to the guaranteed maximum price. That is 

being fixed. 

But at the bottom line, the end of the day, this is a very needed 

project that will be done for an appropriate price, and our subcontracting process will ensure that. So I think we are very convinced 

that it is the right thing to do to move forward. 

Mr. HANNA. Is it possible to start over? 

Mr. EHRENWERTH. I think it would be—anything is possible, of 

course. But it would be a waste of funds, it would delay the project, 

and it is a much-needed project. So I do not believe we should start 

over, no. 

Mr. HANNA. I yield back. 

Mr. DENHAM. Thank you. The chair now recognizes Ranking 

Member Norton for 5 minutes. 

Ms. NORTON. Thank you, Mr. Chairman. Mr. Ehrenwerth, perhaps this is for both Mr. Miller and Mr. Ehrenwerth. This subcommittee is always concerned about the Federal building fund, 

which is one of the reasons that we look carefully before we decide 

to lease. We already have tipped the point now on leasing. 

Will the rate of return to essentially the building fund, and 

therefore to the taxpayers, after the completion of this modernization of this building, be—what will the rate of return—than it is 

now, what will the rate of return be? 

Mr. EHRENWERTH. I can get you specifics I do not have with me 

on the calculations of that. But I can say this, that the rate of return on a deteriorating building whose systems are falling apart is 

going to get worse and worse. With this expenditure, we believe 

23 

that over the life of this building, which will be, literally, generations, the rate of return will be much improved and very, very elongated as compared to not doing this. 

Ms. NORTON. Mr. Miller? 

Mr. MILLER. Congresswoman, problems existed prior to the Recovery Act, as well. And the Recovery Act did prompt GSA to fasttrack projects, and they did not correctly follow the CMC (construction management contract), for example. The problems existed before, and will exist even after all the Recovery Act money is spent. 

Ms. NORTON. But affecting the rate of return of the Federal 

building fund was my—yes. And I hope those problems will be corrected. I am asking about the Federal building fund. You are aware 

that the upkeep of this building, of buildings all around the United 

States so they do not deteriorate the way this building has, it depends upon whether or not the buildings pay into the Federal 

building fund instead of to a private developer. I am asking about 

the return to the Federal building fund. 

Mr. MILLER. We have not evaluated the rate of return. The agency would have to provide data on that. 

Ms. NORTON. Mr. Ehrenwerth, I wish you would, because that is 

of great concern to us. That building fund does not do what it is 

supposed to do now. 

Mr. Miller, does the sale and lease-back of—is the sale and leaseback of a government-owned building, is that a good deal for the 

government? 

Mr. MILLER. Congresswoman, that is a policy question that we 

do not usually get into. We would have to look at the facts and the 

numbers. It does seem odd to lease—to build a building to lease out 

and to buy back. That generally does not strike me as a good deal. 

But it is essentially a policy area that I would leave to the policymakers—— 

Ms. NORTON. I guess I should add that, too. I could ask that to 

the average person walking down the street, frankly. It does not require much expertise. What we do want to make sure is if—is that 

whatever we do with buildings we own, in fact, gives us the best, 

the most competition, not the least. And that is the problem we are 

having here. 

For the courts, I understand your concern, and I understand the 

dislocation. Some of the dislocation, I think, is what every homeowner experiences. When I renovated my kitchen, I could not believe it. And that, of course, is something that is the price of—and 

I do not mean the cost—of renovation. 

But I would be concerned at how that price that the courts and 

especially the veterans, how it was handled. Now, there is concern, 

and Mr. Goodlatte raised concern about the cost of what is essentially swing space, the cost of moving people around. Ms. Dudley 

said she was pleased that they were able to remain in the building, 

especially the courts, even while she discussed some of the inconvenience. 

Would you make us understand the cost, essentially, of relocation, and the files, and the swing space cost, and how much of that 

is taken into account when one renovates a building? 

Mr. EHRENWERTH. Yes. Well, you raise a very good point, of 

course. The first basic building block is it is extraordinarily expenVerDate Aug 31 2005 11:05 Oct 04, 2011 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\4-14-1~1\65722.TXT JEAN
24 

sive to move courts to temporary space, because they need courtrooms and chambers, and all the security that goes with it. So 

when you are trying to preserve the taxpayers’ dollars, unless there 

is some unique situation where you can place court somewhere 

else, it is advisable to keep them there, and cost effective to do so. 

With respect to the Veterans Administration, and due to the size 

of their space, the need to strengthen the floors and all that we had 

to do, it was not viable, because of everyone’s concern, including 

the GSA, and—— 

Ms. NORTON. It is the veterans I am most concerned about. It is 

the veterans I am—— 

Mr. EHRENWERTH. Well—— 

Ms. NORTON. In fact, the senators were basically concerned about 

the veterans. They want to make sure that veterans and their 

files—and let me tell you it is interesting to note that the government has centralized veterans concerns so that even veterans from 

the District of Columbia relay to this office in Roanoke. So they do 

have a large caseload. 

Mr. EHRENWERTH. That is right. And I agree with you in full. 

And what we did—and I personally have met with the national 

director of facilities for the VA, for the local VA office, for the veterans groups. We have done this not by edict, but by collaboration, 

to make sure that every veteran and every veteran’s group has the 

best result out of this, not only as we see it, but as they see it. And 

the decision was that we needed to move them, we would have 

liked to have moved them to one building, of course. That was not 

available. 

So, we took those aspects of the Veterans Administration operations, the service centers where the veterans come, the service-related private organizations that serve the veterans, and put them 

together right across a little street from each other, making sure 

there was parking, handicap parking, and brought their files over 

to them, again, in very, very, very regular collaboration with the 

veterans. And we are spending some money to do this, because we 

are achieving the very important goal of minimizing any disruptions to the VA while we are doing this. 

The VA facilities office nationally has signed off on it, and is very 

pleased with what we are doing. We have spent—as we indicated 

earlier, there is a substantial cost—$4 million to move, $10 millionplus for this temporary space—for the goal of having this operation 

of the VA continue to run smoothly and effectively as our veterans 

deserve, and have them come back to a better building—for example, where there are accessible restrooms, where disabled veterans 

can utilize when they are meeting the VA, which is not currently 

the case. 

So, we are trying to take care of them permanently, as well as 

temporarily, in the most effective way we can. 

Mr. DENHAM. Thank you. Ms. Dudley, you mentioned in your testimony space was already being renovated when the Recovery Act 

project started. Can you briefly describe what the renovation was? 

Ms. DUDLEY. It predates my time in the office. But I think about 

10 years ago a project was planned to renovate judges chambers on 

the third floor and the clerk’s office and the probation office and 

other offices. It took 2 years to actually finish the construction 

25 

work on the clerk’s office. Part of the phasing has now been interrupted by the ARRA project. The construction on the judges chambers has been halted. But halted—but now we are going to roll it 

into the ARRA project. So it will be done, it is just kind of delayed. 

Mr. DENHAM. And what has GSA done to mitigate the impacts 

on your operation? 

Ms. DUDLEY. Well, we have had good meetings with the GSA, 

and we have talked about logistics of moving the IT, the phone 

lines, the data lines. They worked with us to kind of smooth out 

those issues. They have worked with us in terms of making sure 

that when areas are blocked we will have other cubicles and other 

space to go to. 

So, GSA, the project manager, and the other participants have 

been very responsive to our requests for accommodation. 

Mr. DENHAM. And from a security perspective, same level of security as you have always had? 

Ms. DUDLEY. Well, I do not know. You know, that probably goes 

a little bit beyond what I am actually able to talk about today. 

That would get the marshal’s input on that. 

Mr. DENHAM. OK. 

Ms. DUDLEY. Thank you. 

Mr. DENHAM. Thank you. And Mr. Ehrenwerth, I just wanted to 

go back to the thinking on the analysis itself, what did or did not 

happen. And I would certainly like to see a better cost benefit analysis than what has currently been provided us. But just from the rough numbers, a $14 million facility in 1975, now spending $65 million to renovate. Could we not have built an 

entire new facility for that, state-of-the-art facility with all the 

green bells and whistles that were wanted for $65 million? 

Mr. EHRENWERTH. Congressman, we looked into that. And the 

cost of building an adequate new building would be approximately 

$124 million, double the cost. 

Mr. DENHAM. What would you have been able to sell the current 

facility for? 

Mr. EHRENWERTH. Well, I have been in the real estate business 

long enough to know that you do not know. You put a sign on the 

door, say ‘‘For Sale,’’ and it would depend on, first, the condition 

of the building, which is not anywhere near what it should be—— 

Mr. DENHAM. Isn’t that part of the cost benefit analysis? 

Mr. EHRENWERTH. You can do all the cost benefit analysis possible, but you do not know what a building will sell for until you 

see what the marketplace will buy. 

Our experience is, and our cost benefit analysis suggests that a 

building in this condition would not yield a high price, not anywhere near the cost of building a new building, nor anywhere near 

the cost of selling this—— 

Mr. DENHAM. You do not do a rough market analysis? I mean I 

can tell you what my house is worth before I put it on the market. 

I mean I have got a pretty good idea, just by looking at what the 

market is doing. 

Mr. EHRENWERTH. Well, let me—to be specific, if we sold the 

building as it now stands, we think we could get approximately— 

assuming someone was ready and able to buy—$23 million for it. 

And if you use that $23 million against the price of a new building, 

26 

then your new building would net cost you $100 million, in comparison to what we are spending here, $40-some million less. 

Mr. DENHAM. And you had said we have not started the Recovery 

Act work until this summer? 

Mr. EHRENWERTH. We have—— 

Mr. DENHAM. That is projected to start the Recovery—— 

Mr. EHRENWERTH. We have—we are doing the actual construction of the building starting later this summer. Of course, we have 

been doing other work that has created jobs, getting the four swing 

spaces ready and all the preliminary activity that goes with it. 

Mr. DENHAM. And the Recovery Act dollars were for shovel-ready 

projects. What is your definition of shovel-ready? 

Mr. EHRENWERTH. The Recovery Act dollars obviously had the 

goal of moving as quickly as possible. That goal had to be combined 

with the goal, as I mentioned earlier, of doing this in a way that 

did not disrupt the VA, that considered everyone’s concerns. So, in 

this particular case, shovel-ready was combined with the goal of 

having the right building done with the right swing space. And so 

it has taken a bit longer. 

Mr. DENHAM. And your definition of shovel-ready? 

Mr. EHRENWERTH. Shovel-ready, I believe, is that you can go as 

quickly as possible, and most is in order. In this particular case, 

as I indicated, there were important things to do, such as not disrupt the VA. And that is why it has taken a bit longer. 

Mr. GOODLATTE. Mr. Chairman? 

Mr. DENHAM. You have a number of different projects under GSA 

where you are doing Recovery Act dollars, right? 

Mr. EHRENWERTH. Yes. 

Mr. DENHAM. And you had to justify on those projects what the 

timeline was for shovel-ready. We are trying to put people back to 

work as quick as possible. So what is your timeline on a shovelready project? 

Mr. EHRENWERTH. Our timeline—— 

Mr. DENHAM. Is it 5 years? Is that shovel-ready? 

Mr. EHRENWERTH. The—many of the projects are in order. Let 

me back up, if I might, to answer you honestly. 

Mr. DENHAM. We are short on time. We are going to come back. 

We are going to do another round of questions. But just a ballpark. 

Is it 5 years? Two years? One month? What is shovel-ready? 

Mr. EHRENWERTH. As soon as possible. We obviously like to do 

them within months. But we have to look at what is the requirement. Here we have a project—— 

Mr. DENHAM. It is either shovel-ready or it is not. You must have 

some type of criteria. If the President says, ‘‘Here, here is a pot of 

money for shovel-ready projects,’’ which projects are shovel-ready? 

And you cannot say that there is a 5-year project that is shovelready today. I mean I have got to imagine the American public believes shovel-ready is, ‘‘We can get out there and start immediately.’’ So what is ‘‘immediately,’’ in your definition? 

Mr. EHRENWERTH. I do not think there is a particular number of 

days or weeks. ‘‘Immediately’’ means as soon as possible to achieve 

an important goal by—the goal being fast and appropriately done 

to preserve a substantial asset. 

Mr. DENHAM. Thank you. Mr. Goodlatte? 

27 

Mr. GOODLATTE. Mr. Chairman, two things. First of all, because 

no study or cost benefit analysis was done before this quick decision was made, an assumption was made at the outset that was 

faulty and very costly, and that is they assumed that the VA would 

be able to stay in their space, just like the courts are staying in 

their space. And when they got into it, they discovered that that 

was not possible, and the VA was going to have to move out, at an 

additional cost of at least $14 million. So, that, I think, is part of 

their problem. But this clearly was not shovel-ready from the getgo. 

Mr. Chairman, I have been advised that I am needed in the Judiciary Committee. We are marking up the patent bill, and I am the 

chairman of the subcommittee. I wonder if I might be excused. 

Mr. DENHAM. Absolutely. One final question. In your definition, 

what is shovel-ready? 

Mr. GOODLATTE. In my opinion, shovel-ready would be something 

where you are pretty close to being able to take the plans off the 

shelf and get to work on the project right away. 

Mr. DENHAM. Now, this is government. Is 5 years shovel-ready? 

Mr. GOODLATTE. I think it would be, to me, a lot less than that. 

I would think you would be talking months, as opposed to years. 

Mr. DENHAM. Thank you. The chair will now recognize Ranking 

Member Norton for 5 minutes. 

Ms. NORTON. Well, I think that it is a fair question to ask what 

is shovel-ready. I do note that in my testimony I indicated that 

GSA had obligated virtually all the funds, and I do think that if 

shovel-ready means anything, it is that you are working on the 

money and getting it out. 

Now, if there is any criticism to be made of the shovel-ready nature of this project, I am sure it was on a list to be renovated, given 

its needs. It is the time it takes that is—was perhaps not included 

to make sure that the veterans were accommodated and that the 

courts were not disrupted. Did that delay going into the ground 

with this project, Mr. Ehrenwerth? 

Mr. EHRENWERTH. Well, I think—yes, I think, as we have heard 

this morning, we would be subject to great criticism if we put moving rapidly ahead of making certain that the veterans and courts 

were not disrupted, at least any more than we had to. So, as we 

explored options for moving quickly, the decision was made to do 

what we need to do to minimize. And, yes, that requires a little 

more time, and that is what happened. 

Ms. NORTON. I have only one more question. I just want to say 

this hearing has been very important, because it has made clear to 

me, and I think the GSA, that even if you are trying to get work 

out on the street quickly, there are great problems with violating— 

if it was not a violation, at least with skirting the price and competition requirements of the government. 

But this hearing has also convinced me that you certainly could 

not have built a building for what you are renovating this building 

for, and that it would have been a disaster if you had brought 

the—had taken the proposal of Mr. Goodlatte’s constituent, and put 

us in the position of selling the building for $23 million and then 

leasing it back to him and making him a rich man forever, because 

we would have had to lease it forever from him. 

28 

I might also say that I do not see how you could have done that 

in the first place, because we do not allow courts to be in leased 

space. So we have to own space where our Federal courts are. 

My final question to you is how many jobs were created or are 

expected to be created as you continue with this work? 

Mr. EHRENWERTH. Quite a substantial number. There are over 

100 people working already, preparing the swing space. We expect 

there to be 550 direct and indirect jobs as a result of the construction, and goodness knows how many ripple effect jobs with more 

business at the restaurants and hotels, and all that goes with it. 

So, several hundred jobs, at a minimum. 

Ms. NORTON. Thank you very much. 

Mr. DENHAM. Thank you. I wanted to just go back. You said— 

again, Ranking Member Norton re-emphasized the point about not 

disrupting the veterans. I agree. I could not agree more. I am on 

the veterans committee, I am a veteran myself. We do a lot of work 

in that area. The last thing I want to do is disrupt the veterans, 

or create a security issue with the courts and the local folks. 

What my concern is—is this shovel-ready? So, if we have to have 

greater planning, because of a situation with veterans or a hospital 

or courts or—regardless of what the project is, then maybe that is 

on a capital plan where we are putting assets out there, or funding 

available out there for a long-term, 2-year, 5-year, 10-year plan. 

But if it is shovel-ready, I believe the American people believe that 

a shovel-ready project is going to be ready to put a shovel into the 

ground, not push paperwork for several years, or several months. 

So, one of the things that this committee would like to see is, 

what is your definition for a shovel-ready project. You must have 

some criteria available that, when the President comes and says, 

‘‘I have got stimulus dollars, I have got Recovery Act dollars, we 

are going to work on putting people back to work,’’ that there must 

be some type of criteria to actually getting people back to work, 

and getting projects moved forward. 

Not only on this project, but we have—in my district, we have 

got high-speed rail where we are putting stimulus dollars on something that we are not going to see a shovel into the ground for 4, 

5, or 6 years, which again, in my definition, is not shovel-ready. So 

I would like to see specific criteria on what your shovel-ready 

projects are, or what your goals are, specifically, for Recovery Act 

and stimulus dollars. 

As well, I would like to see the cost benefit analysis that you 

have already provided, as well as any other information that has 

come out, either after the bid, as well as prior to accepting the bid. 

And then, lastly—this is more of a comment than a question— 

it appears to me, from my conversations with Congressman Goodlatte, that he has not had the greatest level of cooperation. I am 

working very well with GSA and OMB right now. We are getting 

a great deal of cooperation. But this—certainly from past history 

with Ranking Member Norton a number of projects, as well as taking over this chairmanship, there has not been the greatest track 

record there. And once again, we are seeing from another congressman, from his local perspective, not the greatest cooperation, as far 

as getting information. 

29 

I would hope that we would continue, as we have seen over the 

last month, a greater working partnership here, so that we can 

avoid having these types of conflicts in the future. 

Final comments from Ranking Member Norton? 

Ms. NORTON. Thank you. You are speaking for me, as well, Mr. 

Chairman, about cooperating with the subcommittee and promptly 

getting information to the subcommittee. You only gain the resentment of the subcommittee when you do not get information, whereas the subcommittee—and you have seen Chairman Denham runs 

the committee just as I do—they are willing to work with you. But 

if we do not get the information, then we are working against you. 

Thank you very much, Mr. Chairman. 

Mr. DENHAM. Thank you for your testimony. Your comments 

have been very insightful. We will look forward to getting this information back on the various questions. 

If there are no further questions from the committee, I would 

like to 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. 

[No response.] 

Mr. DENHAM. Without objection, so ordered. I would like to thank 

our witnesses again for their testimony today. If no other Members 

have anything to add, the subcommittee stands adjourned. 

[Whereupon, at 11:42 a.m., the subcommittee was adjourned.] 

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