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43–598 PDF 2008

GENERAL SERVICES ADMINISTRATION’S FISCAL YEAR 2009 CAPITAL 

INVESTMENT AND LEASING PROGRAM 

(110–152) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

JULY 11, 2008 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

ELLEN O. TAUSCHER, California 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

BRIAN HIGGINS, New York 

RUSS CARNAHAN, Missouri 

JOHN T. SALAZAR, Colorado 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

NICK LAMPSON, Texas 

ZACHARY T. SPACE, Ohio 

MAZIE K. HIRONO, Hawaii 

BRUCE L. BRALEY, Iowa 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

JERRY MCNERNEY, California 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

WAYNE T. GILCHREST, Maryland 

VERNON J. EHLERS, Michigan 

STEVEN C. LATOURETTE, Ohio 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

ROBIN HAYES, North Carolina 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

TED POE, Texas 

DAVID G. REICHERT, Washington 

CONNIE MACK, Florida 

JOHN R. ‘RANDY’ KUHL, JR., New York 

LYNN A WESTMORELAND, Georgia 

CHARLES W. BOUSTANY, JR., Louisiana 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

THELMA D. DRAKE, Virginia 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

(II) 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chairwoman 

MICHAEL H. MICHAUD, Maine 

JASON ALTMIRE, Pennsylvania 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania, 

Vice Chair 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

CHARLES W. DENT, Pennsylvania 

JOHN R. ‘RANDY’ KUHL, JR., New York 

JOHN L. MICA, Florida 

(Ex Officio) 

(III) 

(V) 

CONTENTS Page 

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

TESTIMONY 

Winstead, David L., Commissioner, Public Buildings Service, U.S. General 

Services Administration ...................................................................................... 3 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Altmire, Hon. Jason, of Pennsylvania .................................................................... 39 

Graves, Hon. Sam, of Missouri ............................................................................... 40 

Norton, Hon. Eleanor Holmes, of the District of Columbia ................................. 45 

Oberstar, Hon. James L., of Minnesota ................................................................. 48 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Winstead, David L. .................................................................................................. 50 

SUBMISSIONS FOR THE RECORD 

Winstead, David L., Commissioner, Public Buildings Service, U.S. General 

Services Administration, responses to questions from the Subcommittee ...... 58 

ADDITIONS TO THE RECORD 

Judicial Conference of the United States, Chief Judge Joseph F. Bataillon, 

U.S. District Court for the District of Nebraska, Chairman, Committee 

on Space and Facilities, written statement ....................................................... 71 

vi 


43598.001
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43598.002
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43598.003
(1) 

GENERAL SERVICES ADMINISTRATION CAPITAL INVESTMENT PROGRAM, FISCAL YEAR 

2009 

Friday, July 11, 2008 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS AND EMERGENCY MANAGEMENT, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:06 a.m., in Room 

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

[Chair of the Subcommittee] presiding. 

Ms. NORTON. I want to welcome all. 

I want to begin by putting the opening statement of the Ranking 

Member, Mr. Graves, in the record. 

Ms. NORTON. Welcome to everyone, especially the Public Buildings Service Administrator, David Winstead, to today’s hearing on 

the GSA Fiscal Year 2009 Capital Investment and Leasing Program. 

The program represents a wide variety of agencies located 

throughout the United States in need of office space and facilities 

to further their mission. Since I have been a Member of the Subcommittee, which is since I have been in Congress, this annual 

hearing has often had a perfunctory and bureaucratic quality. 

However, I believe an annual request for funding provides an opportunity and an obligation to review the agency that is requesting 

more taxpayer dollars. This Subcommittee’s oversight of the program this year will feature the necessity for GSA to think more 

self-critically and innovatively about the need for comprehensive 

reform about the agency’s leasing and construction processes, with 

particular focus on making both more efficient and less costly to 

the Federal Government and the private sector alike. We are particularly disappointed that GSA has failed to use the authority to 

pursue innovative deals for construction on Federal land that Congress passed in section 412 of P.L. 110-447, the Omnibus Appropriations Act of 2005, for more efficient approaches to construction 

contracts. The Subcommittee will not continue to tolerate GSA’s reluctance to examine all the options available to bring construction 

and leasing processes into the 21st Century. 

GSA has submitted a request for $620.1 million for construction 

projects in fiscal year 2009. The largest project is an amended prospectus for $331.3 million for the consolidation of the Department 

of Homeland Security headquarters on St. Elizabeth’s campus, an 

2 

acquisition of a parcel of land for site access. The construction portfolio also includes funds for two land ports of entry at San Diego, 

and Portal, North Dakota. The fiscal year 2009 repair and alteration programs are about $692.3 million for work to be done on 

several projects, including the Eisenhower Executive Office Building, Phase III, Dirksen United States Courthouse, Chicago, and the 

West Wing Infrastructure Systems Replacement. 

The 20 leases in the fiscal year 2009 lease package include leases 

for the Internal Revenue Service, the Federal Emergency Management Agency, Department of Health and Human Services, Department of Interior, Department of Defense, Department of Homeland 

Security and the Federal Aviation Administration. The 2009 Capital Investment Program is relatively small measured against past 

fiscal years. In recent years, the construction program has been reduced to special-use spaces, such as land ports of entry and courthouses, but very little general purpose office space. The Subcommittee is concerned that recent trends towards leasing buildings because of neglect of valuable federally owned property has led 

to a steady shrinking of the Federal Building Fund, which in turn 

limits the Federal Government’s capacity both to maintain existing 

buildings and to construct new inventory. When Federal agencies 

make rent payments to the Federal Building Fund, it operates as 

a self-replenishing revolving fund, generating income for the Federal Building Fund to the greater benefit of all Federal agencies 

under GSA control. 

Our major concern centers on Federal tenants leaving buildings 

owned by the Federal Government for leased space with a resulting 

loss of vital income to the Federal Building Fund. Last year the 

GSA submitted three prospectuses to move from federally owned 

sites to leased space. In particular, GSA allowed the National Archives and Records Administration building in St. Louis to go from 

disrepair to disintegration. And then GSA focused on the relative 

expense of rebuilding versus leasing new space when the failure 

was years of neglect of the Federal building. Making repairs is a 

much higher priority when the inevitable prospect is loss of Federal 

occupancy of a Federal property would help resolve continuing 

losses to the Federal Building Fund. We declined to approve the 

Billings, Montana, Courthouse prospectus, which sought to move 

from a government-owned courthouse to a leased courthouse. As a 

matter of security and policy, the Federal Government always requires courthouses to be built and housed on Federal property. The 

courthouse proposal vividly highlights the distressing portrait of 

the condition of an essential government function. 

The health of the Federal Building Fund is also threatened by 

the reduction of real estate experts at GSA because of retirement 

and inability to attract the necessary new talent. Lack of expertise 

has led to serious problems, such as so-called holdover leases. In 

this case, the lack of trained GSA personnel is leading GSA to unfairly sit on leases rather than finding new space or renewing existing leases. In turn, Federal leaseholders in today’s tight credit 

market are stuck with stagnant rent rates, making it difficult to 

get necessary financing for repairs for the Federal tenant or, alternatively, to get a private tenant. 

3 

The Subcommittee must help GSA analyze the root causes of 

these and many other agency problems and must require GSA to 

pursue feasible steps to attract the personnel needed to accomplish 

the agency’s mission. The Subcommittee initiated reform itself with 

our first hearing this session on February 27, 2007. The Subcommittee held a hearing on GSA’s delineated area policy, resulting in the provision we now require that directs GSA to inform the 

Committee when the delineated area of a prospectus is not the 

same as the solicitation area. The 2007 hearing showed that agency abuses of the delineated area process had resulted in redlining 

an area or space shopping here and elsewhere with greater cost to 

taxpayers and needless cost and delay to the private sector. The 

change that we required has already had desirable effects and can 

lead the way to true reform at GSA. 

The Committee intends to retain this provision, but it is at best 

a tiny step toward reform and hardly represents the wholesale reform that GSA requires. To set the table for comprehensive reform, 

the Subcommittee held a hearing on June 8, 2008, on the GSA 

leasing and construction processes and the necessary steps to make 

both of them efficient and, thus, less costly for all concerned. The 

Subcommittee is in the process of thinking through changes that 

the June 8th hearing demonstrated were necessary for the GSA 

leasing and construction processes. 

We look forward to hearing testimony about the 2009 GSA Capital Investment and Leasing package before the Subcommittee 

today. 

Ms. NORTON. I am pleased to hear from Mr. Winstead. 

TESTIMONY OF DAVID L. WINSTEAD, COMMISSIONER, PUBLIC 

BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION 

Mr. WINSTEAD. Chairman Norton, thank you again for holding 

this hearing. I am pleased to be back. 

I remember our June 6th hearing on the leasing program of 

GSA, and I also take into account your comments and concerns and 

interest to this Oversight Committee to help us do our job better 

for our Federal tenants, and I am pleased to be here again. 

I would like to ask that my full testimony be submitted for the 

record. And I would also like to thank the Committee staff and our 

GSA staff behind me for the work in preparing for this hearing and 

the prospectus proposals. 

As I mentioned, PBS is very proud of its record in terms of operating performance this year. If you look at the second quarter of 

fiscal year 2008, 81 percent of our government-owned assets are 

yielding a positive fund from operation, and that is rent minus expenses. And the percentage of vacant spaces at 4.4, and Madam 

Chair that compares to about 12 percent nationwide given the state 

of the real estate industry in most of the urban markets. In addition, we are operating below, in terms of the operating costs, on 1.6 

percent below the industry average in operating costs of cleaning, 

maintenance, and utilities. 

Before I address the fiscal year 2009 capital program for GSA, 

I would like to share several accomplishments that I think address 

some of the concerns that you have mentioned this morning and 

4 

this Committee’s continued interest in terms of our relationship 

with critical contractors, in addition to the challenges which we are 

having with our clients. 

First, I would like to mention that, in response to the increase 

in leasing that you have referred to and the hearing on June 6th 

dealt with, we have established a new office of real estate leasing 

acquisition. Our new director of that is behind me, Chip Morris. 

And I think, given the volume of leasing and the complexity of this 

work and the significant stakeholder interest in terms of rent and 

budgeting, we have made this really one of our top priorities. And 

this new office will continue to focus on improving the real estate 

leasing program for GSA, both in the National Capital Region and 

the other ten regions around the country. 

We are looking for increased, obviously, resources and staffing, 

as you have mentioned in terms of your concern on training of realty specialists, consistency between regions and efficiency in terms 

of the time it takes to execute these leases, and I believe that this 

new office will add value in that regard. 

Secondly, we are strengthening our Construction Excellence Program within the Office of Chief Architect at GSA and focusing really on issues, such as project estimating, which has been an increasing challenge over the last 3 years with market material increases 

of 9 percent, averaging almost 27 percent over the last 3 years. We 

have new systems of project variance and tracking. We are also 

looking at project execution across the country. 

And I will acknowledge Bill Guerin our new assistant commissioner for construction excellence is with us today. And we are seeing, as you have alluded to, some differential in terms of competency in project managers around the country and adequacy of 

staffing in certain areas. But we are addressing it, I believe, very 

aggressively, and I know this interest to the Committee is very 

clear in that regard. 

A recent survey of our major clients, the courts, FBI, IRS, DHS, 

VA, and others, through our 11 regional offices, we really continue 

to try to develop national business plans to deal with these tenant 

agencies. And I hear from the IRS and the FBI and the courts and 

others that this national perspective in customer approach is really 

helping them react as they are trying to manage their budget and 

allocation of rent nationwide. 

Lastly, we continue in a state of new IT tools and new approaches to better managing projects and lease actions. We continue to develop new IT tools, such as our eLease, which is in development and utilization now; Transaction Management Playbook, 

which is our inventory system of really what the status of projects 

are throughout the country. We have got over 200 in the development pipeline at the Chief Architects Office. Also the application 

of BIM, Building Information systems. Given these management 

approaches, as well as our increased portfolio on these, I am really 

pleased to say that, if you look back on what we are focused on, 

both leasing, construction and better business and better client relations, I am pleased to say that I think the request for authorization for individual projects as a part of our Fiscal Year 2009 Capital Program will not only meet the needs of agencies but be well 

administered. 

5 

The projects that are in our fiscal year 2009 program have been 

analyzed. We have analyzed these projects. We have met with staff 

of the Committee and determined that they are consistent with 

overall portfolio objectives, which are primarily to optimize the 

value of owned inventory, some 1,500 buildings that GSA owns 

around the country; direct capital resources primarily towards performing assets; and developing work and disposal strategies for underutilized or nonperforming assets; maintaining the continued 

functionality of our buildings; safeguarding the health and welfare 

of tenants and occupants; providing quality work space in support 

of mission-critical goals of Federal agency tenants. And we have focused a lot in the last two years about a new work place initiative. 

We also have been—you had a hearing on this, Madam Chair— 

about achieving energy efficiency and trying to meet the goals of 

the Energy Policy Act of 2009 and the recently signed Energy Dependence Act of 2007, as well as fulfilling the responsibility we 

have under the National Historic Preservation Act for over 400 historic buildings in that 1,500 building inventory. We continued to 

focus on these 1,500 federal buildings as well as our leased actions 

which have a replacement value, if you look at our GSA inventory, 

of about $39 billion. And we are requesting as a part of the capital 

program today a repair and alteration program of about $692 million to maintain and approve these properties that are in the inventory for which there is a defined long-term Federal need and capable of self-sustaining those buildings at about 6 percent return, 

which is our benchmark hurdle rate. 

The highlights of GSA’s fiscal year 2007 repair and alteration 

program includes $350 million for basic program; $91 million for 

limited scope program; $215 million for major modernization; and 

$37 million for the energy program. 

Before we utilize the finite revolving fund, Federal Building 

Fund resources, we evaluate and rank our repair and alteration 

proposals based on the following criteria; financial return and 

lifecycle cost of the buildings; projected project timing and execution risks; physical urgency, based on building condition; and customer urgency, based on mission requirements and overall satisfaction levels. So the projects before you and the Committee today 

have passed these criteria and reflects, we feel, sound investments 

of taxpayer dollars in the Federal civilian portfolio that GSA manages. 

One key section I would like to call your attention to also is the 

energy program, which is a small but really crucial part of our repair and alteration request. As you know, the 2007 EISA Act sets 

aggressive goals for the Federal Government and GSA. I think we 

have addressed this in a Committee hearing about the role that 

GSA is playing. Before 2010 fiscal year, we are required to reduce 

consumption of fossil fuel emissions in new buildings. By 2030, as 

you well know I think, we are totally to be eliminating fossil fuel 

consumption in new buildings. This recent act accelerates the rate 

at which we must reduce energy consumption in our inventory as 

a whole to about 3 percent a year. So these funds that we are requesting in this category will go a long way, this $37 million, to 

implement individual energy and water retrofit projects and government-owned buildings during fiscal year 2007. 

6 

GSA is currently identifying energy and water retrofit projects 

required through surveys and schedules of these buildings, and 

they are being prioritized in terms of installing high-energy HVAC 

systems, lighting controls and variable air flow systems, as well as 

building automation control systems. We are estimating that annual savings of about $6 million resulting from projects where we 

are applying this energy funding for fiscal year 2009 alone. 

Under new construction we are requesting $620 million. This request includes funding for site acquisition, design, infrastructure, 

construction and maintenance of inspection costs at six Federal facilities. PBS traditionally pursues a construction and ownership solution for special purpose in unique Federal buildings that are not 

readily available in local real estate markets through leasing. In 

addition, we recommend new construction where there is a longterm need not given locally and also, obviously, specialized facilities, such as courthouses and border stations. 

You well know GSA is working with the Department of Homeland Security to consolidate its headquarters in the NCR. We have 

gotten funding from both the House and the Senate for that 

project. DHS’s current facilities are dispersed among some 50 locations around NCR. And this has adversely impacted the communications, coordination, and efficiency of DHS. Madam Chair and I 

heard this firsthand from Secretary Chertoff at a visit to St. Elizabeth’s a couple of months ago. A unified secure campus putting together DHS’s senior leadership will fulfill their command-and-control functions as well as their mission, and we are very pleased to 

see the House and Senate actions in this regard. 

A quick highlight of the Fiscal Year 2009 New Construction Program include $331 million for the Coast Guard Headquarters at St. 

Elizabeth’s; $79 million for the Food and Drug Administration consolidation White Oak, and that project is going extremely well and 

the Commissioner of the FDA, von Eschenbach, is very pleased 

with both the on-track as well as the environment that that is creating for FDA employees; $19 million for infrastructure improvements at St. Elizabeth’s West Campus and the Denver Federal 

Center; $7 million for acquisition off additional egress of the West 

Campus; and $74 million for design and construction of two land 

port of entries. 

In addition, we are entering into a fairly healthy leasing program 

overall; leases in some 7,100 locations. Our total lease inventory is 

176 million square feet. We are managing that leased action inventory very effectively, and we currently have only 1.5 percent vacancy in our leased inventory when the national average is about 

12 percent. 

This year we have submitted 20 lease prospectuses for this Committee’s consideration. This submission represents about half of the 

above prospectus level lease requirements for fiscal year 2009. Due 

to the volume and complexity of these programs, we will submit at 

least one more set of prospectuses separately for you and the Committee’s considerations. 

In conclusion, Madam Chair, I would like to mention that we are 

very proud of the progress we are making. We do acknowledge the 

concern in the leasing area as well as in the speed and the construction procurement area. But I would like to mention that a lot 

7 

of effort has been put, in addition to leasing, on portfolio management over recent years. I will be happy to submit for the record our 

new fiscal year 2007, ′′State of the Portfolio,′′ which sets out those 

accomplishments. And in fact, in terms of disposal of facilities, 

which we got under the 412 authority, we have, as a result of disposal of some 271 assets in recent years, we have had a cost 

avoidness of about $600 million. Also, design excellence continues, 

I think, to be refined to focus on design cycle times and reduce 

that, which both the courts and the CDP are very pleased about. 

And I will tell you that we are making progress in the Design Excellence Program as well. 

We will also continue to work with this Subcommittee in the 

areas that you have expressed concern. To capitalize on the requirement of our aging inventory and growing needs, we have over 

$7 billion of reinvestment we need in our 1,500-building inventory. 

We do continue to restructure the portfolio and will continue to do 

so. 

. But I also wanted to mention, Madam Chair, as I did before the 

hearing to you directly, that we, as a result of the June 6th meeting, hearing, we had on leasing with some industry experts, as well 

as construction and building owners and managers, we have responded to that QFR, and we do have those submittals to come into 

the Committee. They should be up here momentarily. I would mention that they do address one of the issues in the June 6th hearing 

that I wanted to make sure we follow up on; our specific recommendations in terms of how we might, with the Committee’s 

support, look at authority, look at legislative options to improve 

both the leasing program and the speed in which we are moving 

lease and construction projects through our schedule. 

So, with that, Madam Chair, I would be pleased to conclude my 

remarks and be happy to answer any questions the Committee may 

have. 

Ms. NORTON. Thank you Mr. Winstead. 

As you know, first, let me say how pleased I am that the National Leasing Office has been set up. This has been one of the priorities of this Subcommittee for some time. If there is any interest 

in cost reduction it has got to begin, as you have now done, with 

the National Leasing Office. And I want to thank and commend the 

agency for setting that office up by the time you had this annual 

hearing. 

And you obviously report some other good steps you have begun 

to take. We are very pleased with those. 

Let me ask you directly about the program submitted today, the 

construction costs of the border stations. It seems particularly high. 

Can you explain those very high, $486 per square foot in San 

Diego, for example. Even in North Dakota, $404 per square foot. 

Can you explain those very high per-square-foot costs in border stations? 

Mr. WINSTEAD. Madam Chair, with the Portal border station, we 

had a pre-construction meeting just this month. And looking at 

those cost estimates, obviously, that is a very rural site—— 

Ms. NORTON. Very what? 

Mr. WINSTEAD. It is a very rural site in terms of availability of 

materials and contractors. But we—— 

8 

Ms. NORTON. Which one are you talking about, both of them? 

Mr. WINSTEAD. No. Obviously, Portal. San Ysidro is quite populated on the southern border south of San Diego. It is a very large 

community. 

But the two are distinguishable in that the Portal is a not-verypopulated area. We allocated $20 million in 2006 and requesting 

another $15 million. And the reason the per-square-foot cost is, 

quite frankly, just the availability of competent contractors and 

material costs in that part of the country. We do not have the 

availability. And also the highly purposed and specialized use of 

the ports of entry. We have tried to, over the last 2 years in meetings with CBP, we have been trying to shorten the design cycle for 

our ports of entry. Because what I found when I came on as commissioner over 2 years ago, I saw that our design cycle for these 

relatively small ports was taking over 2 years. And so we were 

dragging out entering the market a year longer than we really 

needed to. And as I mentioned in my testimony, material costs 

have been going up 9 percent a year for the last 3 years. So in the 

Portal situation, I think, and we can get the Committee more information on pre-bids, but it is really a rural setting. And what I have 

heard, it has been very difficult to get the materials and basically 

the economics of available materials and construction is much more 

costly in that area. 

In terms of San Diego, we have a very, very complicated project 

there. It is the biggest port of entry in the country. We have some 

50,000 vehicles going through it daily. We are actually acquiring 17 

acres of site. The huge number you see is really the site acquisition. 

Ms. NORTON. The cost of land is—— 

Mr. WINSTEAD. Is very high in that area. I mean, San Diego was 

one of the highest-growth markets. 

Ms. NORTON. And North Dakota, this rural area, is just as high 

as in San Diego? 

Mr. WINSTEAD. No, clearly not. 

Ms. NORTON. But the costs are pretty close? 

Mr. WINSTEAD. They are, even though at the Portal, obviously, 

the land costs are much less; material costs are much more compatible with San Diego. The 17 acres are going to be very costly 

due to the price of real estate on the border in the largest crossing 

in the U.S. We are going to be demolishing the court in San Diego, 

and we are going to begin to do construction of Phase I in 2009. 

And I will tell you, it is a very, very complicated project. And the 

$59 million we are requesting is really for Phase I looking at the 

northbound capacity expansions for that port. I am visiting the San 

Diego port on July 24th with our Region 9 people to meet with our 

project team as well as CBP, our client, to try to obviously understand both the difficulties of that project as well as where we are 

in terms of the completion. 

Ms. NORTON. You need to submit—I understand what you are 

saying. From what I—the notion about requiring the expertise, you 

are talking about specialized expertise to put this up, to put these 

buildings up? 

Mr. WINSTEAD. Yes. 

9 

Ms. NORTON. I recognize, by the way, that there is a shortage in 

the construction trade. We will need to have back-up information 

to be able to understand, though, these very high costs. I am not 

sure I understand the cost of land in, for example, North Dakota 

being factored in here so we get to $404 per square foot. I am not 

sure why those should be so close. 

Mr. WINSTEAD. We would be happy to give you both the acquisition value of the land as well as material allocations for those two 

projects. 

Ms. NORTON. Where do you buy the land from? 

Mr. WINSTEAD. Sorry? 

Ms. NORTON. Where do you buy the land from? 

Mr. WINSTEAD. The land in San Ysidro was basically looking—— 

Ms. NORTON. Who owns those two parcels of land? 

Mr. WINSTEAD. Are you talking about North Dakota or San 

Ysidro? 

Ms. NORTON. Both of them. Apparently you are having to acquire 

land. That is understandable. 

Mr. WINSTEAD. Right. I do not know actually the ownership of 

the property. They are both in the private sector, Madam Chair. I 

mean, both the land and—— 

Ms. NORTON. I would like to know who owns the land. They saw 

you coming is all I can say. It really goes to my question about expertise. I also want to know what land in the area goes for. 

Mr. WINSTEAD. Okay. We do have those estimates. 

Ms. NORTON. I want to know what you paid for it, and I want 

to know comparable costs for land, just land, in the area. I am not 

sure that you could possibly have taken into account this economy. 

If anything, it may drive it up, or it can drive it down, so many 

people are looking for work. But it is very, very difficult. In fact, 

the reason that we moved forward without more is that we are 

talking about border stations. We have got to do it. And do you 

know what? Everybody knows we have got to do it. And we are 

dealing with amateurs because you don’t have people who know 

how to deal with people who know the government is coming, and 

that is what we are going to be facing. So I just need more background, and what in the world led to this? If you can justify it, 

maybe that is the way it has to be. Frankly, the most interesting 

thing to me is the cost virtually in two different States, very different States, if I may say so. 

Mr. WINSTEAD. No, they are. I mean, the markets are very different. I do have the breakdown, which we can give the Committee. 

Ms. NORTON. You go to two East Coast States that different, you 

will not find those kinds of course. But, again, it is up to you to 

justify that within 30 days please. 

Mr. WINSTEAD. I will be happy to. 

Ms. NORTON. Let me then follow up about what looks to be a 

very serious, perhaps even a crisis, in trained personnel and specifically at a number of levels, but certainly realty specialists. Is it 

true, for example, that the number of realty specialists have been 

cut in half from, I don’t know, 2000 or so, the year 2000 or so? 

What are the numbers? 

Mr. WINSTEAD. Looking at—you are correct. 

10 

In 1992, we had about 1,200 realty specialists through our 11 regions. Currently, we employ about 526. That is up actually from 

about 500 three years ago. But we are—the realty function has 

changed, as you well know, with the incorporation of the national 

brokerage contract. But we are finding challenges, recruiting and 

keeping talented realty specialists. 

Ms. NORTON. So let’s go to that, since the agency was in great 

pains to contract out this service, one thing you sure did was to reduce the personnel there. That may have been a lethal blow, because you did that very quickly, and of course, you assured this 

Subcommittee that the way to do it was to broker out this function. 

Well, why then are we having the concerns we see everywhere? 

Mr. WINSTEAD. Well, Madam Chair, we are in fact—the national 

brokerage contract is in its fourth year, as you know. And we are 

finding that in a large majority of the regions, it is working extremely well and it is leveraging, for example, the NCR, which you 

are most familiar with. The application—— 

Ms. NORTON. This 1,200 figure was nationwide? 

Mr. WINSTEAD. That is correct. So the 1,200 was a 1992 figure. 

Now we have about 500. 

Ms. NORTON. I know. But you cut in half the personnel—— 

Mr. WINSTEAD. That is correct. 

Ms. NORTON. —of an agency, you have to make it up some way. 

And of course, you said, we want to contract this out. 

Mr. WINSTEAD. Right. 

Ms. NORTON. So you certainly—the agency never informed the 

commission that there would be less work or that there would be 

new problems arising in the agency. All I want to know is, who is 

taking up the slack? 

Mr. WINSTEAD. Well, number one, the application, in terms of 

utilization of the national brokerage contract on a nationwide level, 

is at about 80 percent. 

Ms. NORTON. Say that again. What is 80 percent? 

Mr. WINSTEAD. Eighty percent of leasing actions nationwide are 

being handled on average through the national brokerage contract. 

And what we have been trying to do since the implementation of 

the national brokerage contract is continue to train the realty specialists in both, obviously, the oversight and management of the 

national—— 

Ms. NORTON. All right. Wait a minute. The oversight and management of what? 

Mr. WINSTEAD. Of the national—of the brokerage contract, as 

well as looking at property management functions, leasing, as well 

as disposal. So these 562 realty specialists, their role is really 

broadened with the support of the private sector and the actual 

finding, the best deal on the market and assisting us in negotiating 

the best lease rate for our tenant clients. We are also, these realty 

specialists are also working to look at the long-term housing needs 

and focus much more on the client in a long-term way. 

Now, the reality is—— 

Ms. NORTON. Let us now focus on the client then. The client is 

the Federal Government. The client is a Federal agency. I raised, 

among the many problems that we are aware of at GSA, is the 

problem of holdover leases. That punishes everybody concerned. It 

11 

punishes the agency who may want that space, may want other 

space. Really, it kicks the lease holder where it hurts. It makes the 

government look like a very bad actor. Now, since we have got 80 

percent of the work being done by these contracted brokers, why 

are we having this problem? 

Mr. WINSTEAD. Well, I think on June 6th, I talked in detail what 

we are trying to do in the lease hold, lease situation, both at NCR, 

where we—at that point, and I know we are less than that now— 

but we had about 80 leases in the holdover situation. But we have 

actually reduced the holdover leases from 4 to 3 percent since the 

beginning of the year. So we are addressing the issue. But your 

question—— 

Ms. NORTON. That is an important figure. 

Mr. WINSTEAD. —nationwide from 4 to 3 percent, so we are tackling the problem. 

Ms. NORTON. From 4 percent to 3 percent? 

Mr. WINSTEAD. That is correct. 

Ms. NORTON. Would you kindly answer my question? Why, since 

80 percent—I am now looking to the people who you say are responsible, the contracted brokers; how could they possibly be doing 

satisfactory work if you have that, I believe, huge percentage when 

you understand that everybody involved is being penalized of holdover leases? How could you be possibly be satisfied with what these 

people are doing? I have never heard of this problem arising since 

I have been on the Subcommittee, at least to this degree. 

Frankly, do you know where I heard about it? Is in the newspapers. You know, when it hits the press, it must be fairly unusual. 

And I have certainly never heard about 4 percent holdover leases 

before. 

Mr. WINSTEAD. Basically, we have experienced, particularly in 

NCR, but there is cases around the country of it, we have seen— 

the national brokerage contract is in fact delivering better deals, 

some 9 percent below market on average, so we are getting better 

value. The reality is that the administration of the lease—— 

Ms. NORTON. Wait a minute. In 30 days, I want a list—I am 

tired of hearing that with nobody coming forward with something 

to prove it. I want a list of what they are producing below market. 

Mr. WINSTEAD. All right. 

Ms. NORTON. I would congratulate them, particularly given the 

fact that you are losing expertise in the agency. But generalities 

will never fly with this Subcommittee, and that is not the first time 

I have heard that one. They are delivering. How many deals? How 

many were below market? How many were at market? Where were 

they? 

Mr. WINSTEAD. We would be happy to provide that. We keep it 

up monthly. We review these with the brokers monthly, and we 

have that data. We would be happy to give the Committee full information in that regard. 

The issue on the—the staffing issue, we are working very, very 

hard to try to have training programs to—— 

Ms. NORTON. How do you—you have got to deal with my question. Holdover leases at a percentage that is totally unacceptable, 

you say the contractors are largely responsible. What is the reason 

for the holdover leases in this large number? All I am asking is, 

12 

why? I am pleased that you are reducing it, but I don’t understand 

the origin of this high percentage of holdover leases. 

Mr. WINSTEAD. Well, it has been increased quantity in terms of 

the number of lease actions, as well as, obviously, we are responsible for getting the leases tasked to the brokers, and that with the 

fact that it is a 3 or 4 year new program, it has taken longer to 

bring realty specialists up to speed in terms of that tasking. 

Ms. NORTON. So you have the specialists, or the specialists need 

to be trained? 

Mr. WINSTEAD. That is correct. They have to be retrained. The 

leasing specialist is responsible, as well as the contracting officers, 

need to be trained in the use of the national brokerage contract. 

We are 3 years into it. That training has been done nationwide 

where every quarter we are doing regional training. We are monitoring their performance and evaluating the realty specialists’ actions in terms of managing these leases. 

Ms. NORTON. Of course, not having access for sure has not helped 

that whole process of getting some kind of uniform system of training and understanding of your own people so that they can have 

the appropriate relationship with the contractors who are responsible. They are not doing any of this work. It is the contractors who 

are doing it? 

Mr. WINSTEAD. Yes, in terms of the leasing action and in finding 

the best deal in the market, yes. In terms of managing the brokers 

and overseeing the contracting, it is the realty specialists. 

Ms. NORTON. So you think the problem is not with the contractors, but with the agency’s slow process in getting to the contractors what? 

Mr. WINSTEAD. In terms of the holdovers, clearly, it is getting the 

lease action in place, given the quantity of leases. And I talked on 

June 6th about what NCR is trying to do to improve that and reduce the holdovers. It is a high priority. And the QFR that we are 

giving to the Committee addresses specifically—— 

Ms. NORTON. What percentage of holdovers—— 

Mr. WINSTEAD. We have 4 percent. 

Ms. NORTON. —would be acceptable do you think? 

Mr. WINSTEAD. Well, I mean, obviously, we would like to reduce 

it down to 1 percent, but we are clearly at 3 percent. I think that 

the tolerance point is probably some 1 percent or minimum number—— 

Ms. NORTON. Are you hiring more realty specialists? 

Mr. WINSTEAD. We are. We are trying to—we are basically reaching out in the market. I will tell you that, up until recently, the 

real estate market was fairly healthy. Now we are certainly seeing, 

on the commercial side, which we are obviously impacted by, as 

well as residential, there are a few more people in the market than 

there were a year ago. We continue to have co-op programs in local 

schools. We attract through obviously ads to try to get—— 

Ms. NORTON. I have asked you a question, and you obviously 

don’t have the pictures before you. Would you submit to this Subcommittee the number of realty specialists hired from 2000 to 

2008, the number hired in each of those years? 

Mr. WINSTEAD. I would be happy to. I know, Madam Chair, the 

last 3 years we have increased—— 

13 

Ms. NORTON. Wait a minute. You are right. You created the program. 

Mr. WINSTEAD. But we have actually increased the realty specialists by 10 percent. 

Ms. NORTON. You created the contracting program. It started 3 

years ago; is that right? 

Mr. WINSTEAD. That is correct. We are in our fourth year. And 

we have increased from 500 realty specialists—— 

Ms. NORTON. I still want it from 2000 to 2008. I have to have 

some—I can’t be—otherwise I may be criticizing the agency for 

things for which it doesn’t deserve criticism. I need to have something to compare with, so I need to know how many were hired in 

each of those years. The only thing I can compliment you for at the 

moment is how fast you got rid of half the staff. That you all did 

with great efficiency. 

Mr. WINSTEAD. Well, I am very concerned about this issue that 

you have seen and watched the agency for years on. And we do 

meet quarterly with the ARAs, who are responsible for the regional—the realty specialists and the leasing function—— 

Ms. NORTON. Quarterly with? 

Mr. WINSTEAD. With the assistant regional administrators, the 

people that run our 11 regions. And I have constantly been asking 

them, how is the transition going between the former GSA 

prenational brokerage contract and the current tool we have and 

integration? And they are very focused on this. There are fewer 

people. I will tell you I do have a concern. One of the concerns I 

picked up in going to service centers around the country is that 

some of the realty specialists are doing more administrative work, 

at particularly the 13 and 14 level, than they should be doing. And 

I brought that back to Tony Costa and our team in Washington to 

try to make sure that we offload some of the more clerical, obviously administrative. 

Ms. NORTON. Anybody without expertise needs to be doing it, you 

know, 24/7. 

Mr. WINSTEAD. And I will tell you, one of the concerns I have 

brought back from those meetings is that the realty specialists are 

overloaded with some functions that maybe 10 years ago they 

weren’t doing. And so we are looking at that. 

Ms. NORTON. And what kinds of functions were they not doing, 

like supervising the contractors? 

Mr. WINSTEAD. Obviously that. Looking at the long-term housing—you know, working with the tenant agency on an ongoing 

basis, working through the occupancy agreement, ensuring all the 

program—— 

Ms. NORTON. So the decision to, now that we have some contractors, let’s quickly get rid of specialized staff who can get probably 

get higher-paying jobs in the private sector turns out to have been 

shortsighted; wasn’t it? 

Mr. WINSTEAD. Well, Madam Chair—— 

Ms. NORTON. It seems to me, if you are going to let people go 

while you are still in transition, you can understand that, at some 

point, you would figure out that you had in fact somehow balanced 

this out. 

14 

Mr. WINSTEAD. Right. And it still is very much in that process. 

We still need to improve. 

Ms. NORTON. But the people are gone. 

Mr. WINSTEAD. Not all of them are gone. Last—— 

Ms. NORTON. I want to know, also submit to this office—first of 

all, were these people—how were these people let go? 

Mr. WINSTEAD. Well, back in 2002, I think that the realty team 

was dealing with about 7,600 leases. In 2007, about 8,500. So we 

have had an increased number of leases, but we have increased the 

realty specialists from 3 years ago to today 10 percent to deal with 

that. 

Ms. NORTON. But all of that was foreseeable. More leases—a 

whole new function given to contractors, and the first thing the 

agency does is to use it as an opportunity to get rid of people and 

save money. And now the wind is blowing right back in your face, 

and it has become a matter of public controversy and embarrassment to the government and to this Subcommittee. 

Mr. WINSTEAD. Well, we are very focused on it. I will tell you 

that the majority of the realty specialists that did leave between 

that 1992 time period—you want the 2000 to 2008—left through attrition. And I will tell you that a lot of the alumni of PBS have 

gone to other Federal agencies in some of their lease programs. But 

we have attempted to stimulate—one of the things I have marvelled at—— 

Ms. NORTON. Once the agency announces that we are going to 

get rid of an X number of people, people better fend for themselves, 

of course, we don’t lay off people, particularly with this kind of expertise. They easily find other jobs. Yet this is the government’s 

leasing and construction central agency. It is a matter of some serious concern—— 

Mr. WINSTEAD. I will be happy to—— 

Ms. NORTON. —to the Subcommittee. 

Mr. WINSTEAD. I will be happy to get the data specifically on the 

people that have left since 2000 to 2008, the current numbers, as 

well as their grade and their responsibilities to the Committee. And 

we are making every effort, looking at work force modeling in the 

realty functioning throughout the 11 regions. 

Ms. NORTON. How many realty specialists does the agency—you 

have a program for hiring them right now as I speak? 

Mr. WINSTEAD. Yes. We are looking—— 

Ms. NORTON. You are trying to bring on realty specialists right 

now. 

Mr. WINSTEAD. We are looking to fill slots that are available. 

And I will be happy to get exactly—— 

Ms. NORTON. Yeah, please submit it. 

Mr. WINSTEAD. I would be happy to. 

Ms. NORTON. You got available FTEs. I would like you to submit 

what your goal is for hiring, when you expect them to be hired. We 

can’t allow this situation to go on. If you say it is not the contractors, it is getting necessary information to the contractors, then in 

fact you have got to—that is why I am trying to penetrate to see 

what the cause is. We have got to that to that cause. 

Mr. WINSTEAD. I would be happy to provide all the information 

on both attrition as well as what we have done to bring new realty 

15 

specialists in to what positions in the region. We are not ignoring— 

this is a critical staffing area. 

Ms. NORTON. And the attrition took place because the agency announced it was going to contract out people’s jobs, so I understand 

that. At the same time that you do that, you will be requesting 

that people help you in the transition, which what bothers me is 

the short-sightedness of leaving the agency short of the necessary 

expertise to accomplish its mission so that the Federal Government 

looks like it can’t even negotiate leases with the private sector. And 

that becomes a matter of public controversy that is then written 

up. 

Mr. WINSTEAD. I am very concerned as you are on this. 

Ms. NORTON. What are you doing to make sure we don’t lose any 

more, Mr. Winstead? 

Mr. WINSTEAD. Madam Chair, I think I mentioned on June 6th, 

we have a very aggressive training program with them. We have 

a very aggressive recruitment program through internships, 

through co-op programs with the universities. 

Ms. NORTON. You recruit from other agencies? Where are you 

getting these people? 

Mr. WINSTEAD. Well, we are advertising in both the private sector as well as in Federal Government. 

Ms. NORTON. Is the pay sufficient, do you think? 

Mr. WINSTEAD. No, the pay is not competitive with the private 

sector. I can get you the pay grades for the realty team. But if you 

look at it compared to what brokers and—— 

Ms. NORTON. Do you have a special program, for example? When 

you are dealing in an area like you are dealing in where people 

can, after all, if they already have the expertise, the private sector 

knows what to do with them. Agencies confront that all the time. 

So then they have very special recruitment programs for hot shots, 

people who may have the necessary educational background and 

fairly shallow experience but who are just the kinds of people the 

Federal Government would want to hire and often can’t hire because, once they get that expertise, the private sector may get to 

them. And so one of the things some agencies do is to go after such 

people, train them, give them a very special status so as to bring 

in the kinds of new talent it takes, particularly when they face this 

kind of loss. Usually agencies aren’t facing this kind of loss. They 

are facing the need to backfill with retirements that are occurring 

with the baby boomers leaving and that kind of thing. You are facing something where you all did it. This is what gets me about this 

one. You have the same baby boom problem as every other part of 

the Federal agency, then you said, look, everybody, your job is 

going to go as soon as these contractors get on the job. People 

would have been crazy to stay there. So they had to know that 

their jobs were being contracted out. But at the very same time, 

any agency that valued its expertise would have in place something 

that would encourage those people not to leave quickly, if, for no 

other reason, to help us train whoever were the new people coming 

in and to keep from handicapping the agency. 

I am very, very concerned at the effect of this broker contract on 

the expertise inside the agency, and if I may so, foreseeable effects 

at a time when the Federal Government is having trouble attractVerDate Aug 31 2005 19:11 Jun 17, 2009 Jkt 000000 PO 00000 Frm 00023 Fmt 6633 Sfmt 6633 P:\DOCS\43598 JASON
16 

ing the kind of, yeah, hot shots from the baby boom that gravitated 

toward public service and therefore to the Federal Government. We 

are having trouble no matter where we look. 

So unless you have some kind of special program, Mr. Winstead, 

going out and advertising, whatever you are doing, I don’t know 

why they ought to choose GSA. 

Mr. WINSTEAD. Well, Madam Chair, we are doing all the above. 

I mean, the impact of the national brokerage contract, as you have 

alluded to, there obviously has been some attrition as a result of 

tasks that are now being done by private sector that were originally done by realty specialists. But I think the majority of our 

core, the 562, have adjusted to that. And I will give evidence in 

terms of who we have lost and why we think they have left. 

Ms. NORTON. But you can’t ever know anything until you know 

how long was it taking us, whether or not they have adjusted, how 

long was it taking us last year to get to prepare what was needed 

for the brokers versus how long is it taking us this year? 

How long will it take us in the first year of the brokerage contract? Second year? Third year? We need those figures from the 

Committee. 

Mr. WINSTEAD. I will be happy to provide that. 

We also—— 

Ms. NORTON. The only reason that I ask for these figures, I want 

to encourage the agency to quantify everything. People respond— 

we are not saying to you that giving guidance means if you don’t 

meet this guidance, off with your head. But if the guidance doesn’t 

say we expect X to be done within this period of time, then—you 

are a bureaucrat in the government. Well, then you just do it. You 

work hard. But you work hard. You may not even focus on that 

particular—particularly since you say these people are overloaded. 

You may not even focus on that as your priority, because you have 

got so many other things to do. So unless you are saying that we 

are trying to reduce this time, it is getting out of hand, you can’t 

simply say to people, work harder. 

Mr. WINSTEAD. Madam Chairman, we are—I will provide this 

Committee—we are very focused on this. I fully understand your 

concern. 

We are, I think, getting more interest from second-career people 

and coming in from baby boomers. I go to the PBS boot camps. I 

am amazed, out of the GSA personnel, there are many more people 

coming into the agency for the PBS workforce because of what we 

do, the hands-on nature of real estate. 

I do think we have—we are still listed in the top 10 Federal 

agencies as good places to work. We have a wonderful work environment. I am amazed, coming from the private sector, to look at 

the camaraderie between people coming in at the lower levels of 

the realty function versus the majority of the ARAs and ACs that 

have come through realty functions and have had 20 years career 

in PBS. 

We have recruited and kept a lot of people, and a lot of them 

have come through that basic understanding of the real estate delivery and the functions that you learn on the realty level, those 

600—560 people. But I am concerned and do understand your concern about what has happened as a result of the national brokerVerDate Aug 31 2005 19:11 Jun 17, 2009 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 P:\DOCS\43598 JASON
17 

age contract in terms of retention. We are doing workload modeling. I will be happy to provide that in terms of those functions 

and regions, what will be filled and how we are going about filling 

them. 

Ms. NORTON. Providing that to the Committee would be very, 

very important. 

I would ask that, besides your recruiting, your training—we need 

information on the training program—that you take affirmative 

steps to staunch—to stop the outflow of people from the agency 

and—I don’t know—at least realty specialists. To the extent—— 

That means somebody has got to sit down and think about what 

would we need to do to encourage people who have every reason 

to leave because of early retirement, because of competition with 

the private sector, what should we be doing while we are trying to 

rebuild this realty specialist workforce to keep this from getting 

any worse? 

So I would ask you to think about that. I am not asking you to 

submit that within 30 days, but expect me to want to know, since 

I think this is something that has to be thought through, about 

what you can do. 

My interest in this, by the way, comes also from the other Committee on which I serve, the Oversight and Reform Committee, 

which has jurisdiction, of course, over Federal employees; and, 

therefore, I am aware of the difficulty you face in the ordinary 

course. I am horrified, though, to see the difference between your 

loss in this specialty and the losses of other agencies. Because 

theirs has been more natural and yours came largely—at least in 

these numbers—as a result of contracting out people’s work so fast 

that they knew exactly what they had to do. 

So I think you are in a pinch, and you have got to make up for 

it, and you have got to make up for it soon, and you can’t do it by 

the usual strategies. At the very least, you have got to do all you 

can to keep the personnel you have there that you are now piling 

work on, because you don’t have enough people. So somebody has 

got to think through how do you keep this very central function 

staffed. 

The other problem I raise had much to do with the Federal 

Building Fund. What has been the growth or reduction in the Federal Building Fund over the past, let’s say, 4 years? 

Mr. WINSTEAD. We still—in terms of the budget, we still have the 

requested $8 billion in terms of the Federal Building Fund. 

I think what you are alluding to is the concern, again, with the 

leasing. Your opening statement talked about the lease inventory, 

and we have seen that increase quite considerably over recent 

years. And if you look back 40 years we have had a quadrupling 

of that, up to the point now where we have 51 percent of our needs, 

space needs delivered through private sector leases, versus 49 percent through space in our 1,500 federally owned inventory. 

I think the reality of that impact is clearly that the more we are 

leasing, that leased price is a pass-through. It doesn’t generate additional revenue for the Federal Building Fund. 

You know, from our own inventory, we are getting in the neighborhood of about $9 a square foot. If you look at the nationwide inventory of federally owned leases, we are getting about $9 a square 

18 

foot that goes into the Federal Building Fund from then-owned inventory. It is reinvested in reinvestment capital through the R&A 

program and modernization of our buildings. So every time we go 

to a leased option we are seeing an attrition of revenues coming 

into the Federal Building Fund. 

If you were to take the leased inventory and look at fiscal year 

2007, last year we saw a growth in the leased inventory for PBS 

nationwide of 3.2 million square feet. Now we are at 175 million 

square feet. And what that meant, Madam Chairman—I think this 

gets to your point—is that with this increase, the 3.2 million 

square feet in fiscal year 2007, we actually did lose—that equates 

to about $30 million of lost revenue to the Federal Building Fund. 

So the reality is—— 

Ms. NORTON. And that you said was sheer growth in—— 

Mr. WINSTEAD. That is correct. If you take the 3 percent—3.2 

percent increase in new square footage on the lease side, that essentially equates to a loss of $30 million in terms of that $9 a 

square foot of owned inventory contribution to the Federal Building 

Fund for capital reinvestment. So what has happened is we have 

seen, you know, the allocation, the revenues have gone up to the 

Federal Building Fund. Because they are bringing on new office 

buildings, new courthouses, so the revenues are increasing. But 

with the increased leasing action, we are seeing a reduction of contributions to reinvestment revenues that we can put through R&A 

back into our own inventory. 

Ms. NORTON. We are quite aware that some of this you can’t do 

very much about. I am not suggesting that the Federal Government is going to start building lots of its own space. That is why 

you saw me in my—saw me focus on priorities of the agency, which 

seem to me to be quite skewed. 

If you own some property—if I own a house in which I have invested and I look around me today and I see what the cost of buying a new house would be or renting a house, that is a precious 

investment that I have. So one thing I do, any homeowner does, is, 

you know, make the necessary repairs so I don’t have to move out 

of the thing because either it was—it got to be so decrepit or I just 

couldn’t stand anymore. 

That is why I have been very concerned about whether or not the 

agency is, in fact, prioritizing the importance of its own inventory 

and the repair and rehab or perhaps even expansion of that inventory that might have an effect on reducing the leasing and therefore keeping the Federal Building Fund alive and kicking. 

You have got a new Congress here, and it is not going to go 

away, and it is not going to be adding funds willy-nilly to the Federal Building Fund. This whole notion of pay-for is real real, so 

somebody has to be thinking about what are our options for maintaining a viable Federal Building Fund as need for more space occurs with fewer contributions to the Federal Building Fund. What 

are your thoughts on how you are going to maintain the fund and 

how much has it been reduced or not over the last 4 years I asked 

as a benchmark? 

Mr. WINSTEAD. Right. Madam Chairman, I am very concerned 

and I think you address an issue that I see in the field. As I go 

out and go to our service centers and seeing the condition of our 

19 

buildings, the 1,500 buildings that we have in the inventory, I am 

concerned about the condition of many of them. You know, we have 

needs in about six—— 

Ms. NORTON. Is there any chance that any Federal building will 

come forward, that you know of, in the near future and ask to be 

moved out of a Federal site into—— 

Mr. WINSTEAD. I preference, it has happened. It will inevitably— 

I think inevitably those are the discussions that occur on our property management level and the portfolio management level where 

we are getting requests to move out of owned inventory. And, as 

the Chairman certainly mentioned, part of this is because of the 

condition of the building. 

As I look at the business model of the Federal Building Fund, 

you know, I am very concerned, as Commissioner, about this issue 

of reinvestment need, the $7 billion that we need to maintain this 

inventory. 

I think we have done an excellent job in recent years, for the last 

4 or 5 years, through our portfolio strategy of coming down and 

holding on to tier one assets where there is a long-term tenant demand. I mentioned earlier we have actually sold and surplused 272 

buildings. It has brought in almost $200 million and created huge 

savings in terms of carrying costs. But for that inventory that is 

left, we do have long-term housing needs; and what we need to do 

is to manage the revenues in the Federal Building Fund, along 

with direct appropriation requests, and make sure that we are 

prioritizing and moving forward with renovation of these buildings 

to keep them in competitive condition. And that is what we struggle with every day. I mean, that is what the portfolio group at NCR 

and head office and all the regions is doing. 

Ms. NORTON. And could I just ask, when we own a site, we own 

the land. What happens to the land and the site? In Billings, Montana, where we declined, that was really radical. Abandon a courthouse and lease a courthouse. What did you intend to do with the 

land and the building if we had been foolish enough to allow that 

precedent? 

Mr. WINSTEAD. Well, the Billings, Montana, courthouse was a 

part of the fiscal year 2008 capital program, as you well know. We 

originally had submitted a lease prospectus for the courts and the 

Marshal Service. Our intent now is, obviously, we have proposed 

two leases instead of the one; and we are looking at improved land 

in a very scarce part of downtown Billings. But we will, in fact, 

based on the contribution of the—and considering the small 

amount generated from the lease solution, it will have an impact 

on the Federal Building Fund, as you alluded to, of $100,000. 

But the Executive Committee of the Judiciary has viewed this as 

a space emergency since 2006, and we are moving forward with it. 

In terms of any surplus property, we put it through a disposal 

process; and it goes, in many cases, to public sale. And as a result 

of the 2005 Appropriation Act language that I know this Committee supported, we are now pumping those proceeds back, any 

surplus property, any surplus buildings that go to public sale back 

into the Federal Building Fund. 

Ms. NORTON. Would you submit—you threw out a figure of revenue from Federal buildings sold. 

20 

Mr. WINSTEAD. Right. 

Ms. NORTON. Would you submit that list of buildings? 

Mr. WINSTEAD. Sure. 

Ms. NORTON. Where they were located to us? 

I make no judgment, except if I had some land today, according 

to how much land and where, I would have to be very careful about 

just selling it off. And, therefore, the Subcommittee at least needs 

to know what are these sales? How much did they return to the 

Federal Government? 

Mr. WINSTEAD. I will be happy to get that. 

Ms. NORTON. The difficulties that you report are, as to what to 

do with the Federal Building Fund, is an example of how—you 

know, the Federal Building Fund was—is an example of what kind 

of innovative agency GSA used to be. That is working with Congress and come up with a way to pay for everything with a revolving fund. 

Now, if you are sitting in an agency today and you see what you 

have reported, the huge increases in need, with continuing lowering of contributions, then what you do is you sit around and you 

say, well, you know, how do I rethink this idea? What do I think 

should be done? 

And I love government, and I hate the bureaucratic approach to, 

well, this is the way we do it. I guess it is just not working. 

Well, who knows best how to reinvent what has shown that, if 

we keep doing it that way, we are going to get into a crisis? And 

so it bothers me very much that the people who know best, who 

are experiencing the crisis, instead of coming forward to Congress 

to say here are some options, here are some things to do—— 

Well, you know what? Congress had an option—what is it now? 

More than 3 years ago, we passed a bill. This is the Congress of 

the United States. And we are still waiting for use of this authority. This authority, you know well, is authority that I don’t even 

think took the kind of imagination that trying to do something 

about the Federal Building Fund requires. 

But we wrote December 11, 2007, to ask GSA to provide a detailed analysis for use of that authority on the St. Elizabeth’s campus project. If ever there was a project made for that authority, it 

is where GSA, for the first time in its history, is asked to build a 

compound, not simply a building. That is the kind of thing that 

would excite anybody as just a new and important way to do it. 

And the last thing you want to do it is the old-fashioned way, particularly since they have got perhaps a half a dozen buildings. 

Far from seizing this as a new way, a more creative way, a more 

21st century government way to deal with a problem that you 

have, in its report, GSA says—and I am quoting—proceeds from 

the ground lease may not be used to offset the space lease rental 

obligation. 

Why not shoot yourself in the gut? Why does GSA hold that view 

against its own interests? 

Mr. WINSTEAD. Madam Chairman, I would—I am very pleased of 

the Committee’s support for the section 412 authority, and as 

you—— 

Ms. NORTON. Why are you pleased? Why are you pleased if you 

fail to use it? 

21 

Mr. WINSTEAD. Because since fiscal year 2006 we have actually 

applied the retention of proceeds effort. We have actually utilized 

the portion of authority and retention of proceeds. As I have mentioned earlier, we have recaptured almost $170 million. 

The reality is that we have been working since then—I will address St. Elizabeth’s—but we have been working since then on the 

ability to utilize section 412 in other ways, to look at lease and 

lease-back opportunities for our older inventory. I would also look 

at new construction applications for 412. 

Ms. NORTON. Wait, wait. You know, you have a way of not answering the question I asked you directly. I don’t mind a witness 

prefacing his answer. 

We just talked about the authority, frankly, that you already had 

to sell property. I am now talking about using the proceeds from 

a ground lease to offset the space lease rental obligation. And we 

just talked about the Federal Building Fund. We have just talked 

about the problems you are having generally. 

That is the question I want answered. Why—I am now quoting 

you all here—proceeds from the ground lease may not be used to 

offset the space lease rental obligation, when the very opposite is 

what Congress had in mind? What do you think we were doing this 

for? 

Mr. WINSTEAD. Obviously, ground lease will still be deposited in 

the Federal Building Fund and a pure offset not required. So I 

know that that is an option. And new revenues to the Federal 

Building Fund. 

In terms of the St. Elizabeth’s issue, which is your question, we 

have reviewed it, both internally and with OMB, in terms of the 

application of 412. It is not, in our judgment, the most ideal situation to apply 412 because of, as you well know, the secure nature 

of that campus. 

Ms. NORTON. It is not what? 

Mr. WINSTEAD. It is not an ideal situation to apply 412. 

Ms. NORTON. Why? 

Mr. WINSTEAD. Because of the secure campus nature of it. DHS 

would have to lease 100 percent of the space, which would violate 

the scoring rules. We come against the constraints of the scoring 

rules in almost every instance when we look at the 412 application 

to a St. Elizabeth’s or other projects. The site also is a highly—obviously, high infrastructure cost. 

Ms. NORTON. Mr. Winstead, to get back to my question, how 

would that problem fare if we used the ground lease to offset the 

space lease rental obligation? 

Mr. WINSTEAD. If we could use the ground lease and we could 

use the 412 application in doing so, it would offset—— 

Ms. NORTON. There is nothing in the statute that says you can’t. 

Mr. WINSTEAD. Well, I think our problem, in looking at this to 

date, has been the constraints of the scoring rule and being able 

to craft economically a ground lease and construction to be approved under a scoring rule. 

Ms. NORTON. You believe it would score—you believe there would 

be a scoring—you said—I am trying to find out—— 

Mr. WINSTEAD. It would be—— 

22 

Ms. NORTON. —whether or not offsetting the space lease obligation scores; and, if so, who says so. 

Mr. WINSTEAD. Well, in our look at St. Elizabeth’s and applying 

a ground lease or a 412 approach to it, we have not been able to 

get the economics of that beyond the security issue, beyond the 

high cost of infrastructure and the reality of being able to do a 412 

lease, ground lease arrangement on St. Elizabeth’s. We have also 

run into the financial costs of the security cost on any proposal of 

that nature and the fact that it would not be scorable. 

And that is our problem, and we have been working on this the 

last 3 years. We have looked at, you know, many applications of 

412 to this situation as well as others, and we have not been able 

to get it past the constraints of the scoring rules to date. 

Ms. NORTON. So the specific reason for your statement that the 

proceeds from the ground lease may not be used to offset the space 

lease rental obligation—see, I keep coming back to it, because it is 

your words. The specific reason for that is scoring? Is—fill in the 

blanks, please. You put that language in. There may be lots of reasons why you think you ought not to use that. You put that language in. 

Mr. WINSTEAD. OMB scoring specifically on the time arrangement between the ground lease and the lease-back is the issues 

that we have had in that letter and response on the 412 application 

St. Elizabeth’s. 

Ms. NORTON. OMB’s what? 

Mr. WINSTEAD. OMB’s scoring specifically on tying the relationship between a ground lease and lease-back arrangement and the 

risk allocation issues under scoring rules, as well as the financial 

viability, given the security costs at St. Elizabeth’s, given the 100 

percent occupancy that DHS would have in the building and the 

fact that that 100 percent occupancy, because of allocation of risk 

criteria, that the scores at OMB make it unacceptable in terms of 

getting it scored. 

We do have—we have vigorously—I have had two meetings at 

OMB in the last 2 months on this issue of looking at other options 

for lease financing, lease purchase, applications of 412. We have 

come up with studies. We have locked at, you know, the St. Elizabeth’s applications. We have looked at the Denver Federal Center 

applications. We have looked at ground lease applications. And 

every time, in terms of the economics of the current market, any 

arrangement would be scorable and would not be—we could not get 

it approved, and we haven’t had—you know, we need also to get 

authorization for it. So we have had—— 

Ms. NORTON. Before I leave this line of questioning, could I ask 

you to give me an example of where 412 authority could be used? 

Mr. WINSTEAD. One example of what we spent a great deal of 

time, for the reasons that you have mentioned, on the R&A and 

modernization side and the condition of our buildings, 600 buildings requiring—1,500 required substantial renovation. We focused 

412 in that area initially. 

We were hoping that the authority and the view of OMB, in 

terms of the budget scoring, we could apply 412 to essentially lease 

out Federal buildings that had substantial renovation need and 

lease it back with renovation included. And in looking at the ecoVerDate Aug 31 2005 19:11 Jun 17, 2009 Jkt 000000 PO 00000 Frm 00030 Fmt 6633 Sfmt 6633 P:\DOCS\43598 JASON
23 

nomics of that, our portfolio people and our financial people looked 

very carefully at ensuring that the funding element of that for renovation was very focused in terms of basic utility renovation so that 

the aggregate costs, it would still be scorable. 

The reality is we could not get concurrence with OMB on our 

proposal in that regard, and we have been working with them. We 

continue to work with OMB to explore ways that a ground lease, 

lease-back structure can work. We are looking at new construction 

most specifically now because of that risk allocation. So—— 

Ms. NORTON. Wait a minute. On the renovation, you know, OMB 

told you you couldn’t even use it on renovation? 

Mr. WINSTEAD. That is correct. And we are still—— 

Ms. NORTON. We have the veto here by OMB on both new construction and on renovation. Now, my question becomes, when is 

412—on what kinds of construction could 412 authority be used? 

Or, in the alternative, on what kinds of renovation could it be 

used? Are you telling this Subcommittee that that is a useless authority? 

Mr. WINSTEAD. No. We do believe, and we continue to talk to 

OMB, that new construction, ground leasing the land separate, 

competitively, with a lease-back arrangement can be viable and can 

be structured financially to be competitive in the market, that we 

would actually get competent developers wanting to enter and bid 

on the contract. But we need to have generic—basically, the building and the structure needs to be fairly generic office space that, 

you know, that keeps those costs, because of the finance market 

now and the cost of financing, keeping them below the scoring limits. 

And that is our struggle. Our struggle has been to look at—we 

first looked at renovation approach of 412. We were not successful 

there. We are currently still engaged with OMB in looking at new 

construction ground lease approach under 412 and looking at separate, competitive lease-back transactions that have that separation 

and allocation of risk between any offeror and the Federal lease. 

And it is a very—— 

Ms. NORTON. Well, you know, Congress is going to have to—— 

Mr. WINSTEAD. So we would be happy to share with you. 

Ms. NORTON. —increase its instructions to the agency on this 

matter. Because I still can’t get out of you how you could ever use 

it. 

All right. General office space. 

Mr. WINSTEAD. We will be happy to provide—— 

Ms. NORTON. Here we are about to build six buildings. If you 

build a hypothetical building someplace else, just count on us to do 

it. 

Mr. WINSTEAD. Madam Chair, one example that I think is—some 

funding is in this budget for it for remediation effort is the Denver 

Federal Center. We have a very remarkable piece of property north 

of Denver in Lakewood, Colorado, that is 500 acres or so. We do 

have existing tenants, in basically 1940 buildings. 

We have—fortunately, we have been very engaged—our regional 

staff out in Denver has been very engaged with the Lakewood 

mayor and planning board and the commission and the regional 

transit authority in Denver that is bringing a light rail to that 

24 

campus. We have actually had the light rail alignment brought 

down into the Federal campus, as you know well, to prevent very 

direct public transit access as we do on New York Avenue and all 

the Metro stations here in Washington. 

That land, we feel, is very, very valuable for consolidation of leasing in and around Lakewood and Denver onto that site. We have 

available land. There is an opportunity there, we believe, to do a 

ground lease, lease-back under a 412. 

We are running the numbers. We are engaged with OMB constantly on this. Our team from Denver has come to Washington to 

discuss it with us. We would be happy to share with the Committee 

that project because it is an ideal project. As I said, to date, we 

have had issues under the application of that ground lease, leaseback and getting it under the scoring rules, but I will be happy to 

give the Committee examples of that. 

Ms. NORTON. I very much appreciate you giving us that example. 

Very much appreciate it. 

Particularly, since Congress—we have had some recent experience. Don’t think I don’t sympathize with your dealing with scorers. It is very interesting. Instead of moving ahead and doing this, 

you went to granddaddy and said, can I do this? 

Congress never had that in mind. We thought we were dealing 

with a grown-up agency. But you can always expect OMB to say 

no. So I don’t know why you wouldn’t just use your authority and 

make them stop you. But that, of course, is my problem with GSA, 

period. 

Is there a rule? Have you been instructed not to use this authority without coming to OMB? 

Mr. WINSTEAD. The interpretations of the scoring rules in looking 

at some of these projects will provide the profile and the economics 

of them—would—rule scoring would in fact not allow for the annual allocation of—— 

Ms. NORTON. Let me tell you something about scoring, because 

you are really talking to somebody who understands your frustration here. Don’t think it is not the very same thing in the Congress. 

Recently, we met some scorers. Understand that these people 

who score things know doodly squat about real estate land development. They know about scoring in the usual sense. 

So we met some scorers here at CBO. These scorers said that the 

old Post Office scored. Now, Congress is very respectful of CBO. 

But we have got the kind of staff who looked at the precedents, 

who had the background knowledge, and who argued and convinced CBO, after it had rendered its decision saying the old Post 

Office scored, the first thing we used was, really? This is the Tariff 

Building. Armed with that precedent and with people who understood scoring and real estate, CBO backed off. 

The job of people in the scoring business is to score. Your job is 

to build. Now if you were having problems with OMB, you should 

have come and talked to people over here. Perhaps we could work 

together. 

Mr. WINSTEAD. Madam Chairman—— 

Ms. NORTON. Perhaps we could work with CBO and OMB. The 

last thing I would do is to salute to OMB when the Congress of the 

United States gives you authority and you are about to build the 

25 

largest set of buildings in the history of the agency. They don’t care 

what you are about to do. 

Mr. WINSTEAD. I will commit to you, Madam Chairman—I mean, 

I have been on this issue ever since I became Commissioner of the 

Public Building Service, and I will continue to be on it with this 

Committee. 

I have read, as you have, Madam Chairman, every circular, A11 and others on this topic. I have read CBO reports. I have read 

four reports of GAO on the issue of leasing and scoring. We are 

doing everything—I am doing everything in my power as Commissioner to approach OMB at every level to address our funding 

needs and address our real estate needs under the authorities we 

have and to—— 

Also, I think it is fair, your assessment of the scoring budget people at OMB, is they are narrowly focused on the 1992 Federal 

Budget Act. They are not real estate professionals. Some of them 

are. Our budget analysts and others who have been around there 

for a couple of decades understand real estate, but—— 

Ms. NORTON. Name one. 

Mr. WINSTEAD. Well, you are absolutely correct in the issue that 

we are struggling with, as you correctly have articulated—— 

Ms. NORTON. My only point, Mr. Winstead, is, you know, you are 

playing by their rules. 

Mr. WINSTEAD. Well, I am doing it—— 

Ms. NORTON. —and you will always get their answer. And don’t 

think you are talking to somebody who has no idea about OMB. I 

headed a Federal agency. I know their power, and I know how difficult it is once a decision is made. 

You knew that they were not going to approve this authority. 

And, you know, even if you go back with the general purpose office 

space, they are not going to approve this authority. So unless you 

have another whole way of playing the game you are going to lose 

and this Congress loses and the taxpayers lose. 

And again, if I run up upon that—you know, OMB, after all, has 

to be respected by the Congress. So if OMB is saying one thing 

about scoring, we ought to get together. We ought to talk to CBO. 

By the way, they have the same problems. You are absolutely 

wrong that the budget analysts understand enough about real estate and land development. They understand about scoring. They 

understand about how to make sure you don’t spend any money, 

and they understand about how to make sure you don’t spend any 

money even when you are not spending any money. 

So my problem is saluting and then not using—and, indeed, 

yourself putting language in. You didn’t need to put this language 

in: Proceeds from the grounds may not be used. On whose authority? Then you should have come to Congress. If you really believed 

this is as useless as you are saying, you should be up here talking 

to us about what we need to do. 

We thought we had done it. We thought we had done it in time 

for St. Elizabeth’s. And now you are telling me that we ought to 

do it the way we have always done it and have the taxpayers front 

gazillions of dollars to build these buildings. That is terrible. That 

is a terrible conclusion to reach. 

26 

Mr. WINSTEAD. We would be happy to continue to get together 

with your staff and this Committee and making it very, very clear 

what we have done and looking at 412 application and what we can 

do with this Committee going forward. 

I will tell you, I am equally as concerned as you are about relief 

and resources. Under the Federal Building Act, we got direct appropriations and we have got 412 and we have got ESPC contracts 

to finance energy. That is it. Direct appropriations and ESP contracts to finance utility upgrades, as I mentioned earlier. 

I am very concerned about it. And in February of this year we 

supplied this Committee, at your request, a copy of 10 leases demonstrating, in fact, the economics of our attempts to move forward 

on client agency needs in a timely manner under our existing authority and existing funds in the Federal Building Fund. And that 

list, which this Committee has, makes very, very clear the direct 

appropriations Federal Building Fund approach, the operating 

lease approach, and any kind of lease finance or 412 application alternative. And it, in every case—obviously, the operating lease is 

more expensive. So, I mean—— 

Ms. NORTON. Mr. Winstead, I respect your background and expertise in this field. What authority would you need from Congress 

in order to be able to use the 412 authority? Is there anything we 

could do, given your very extensive background in this field and 

now in the government as well? 

Mr. WINSTEAD. I do believe that the intent of 412 is dealing both 

with attention of proceeds and giving us the ability to ground lease 

and lease-back facilities. I have talked to you about our approach 

after we were given this authority to look at the renovation approach. I mentioned the new construction approach. You know, the 

clear intent of the language, I think, gives us that authority to do 

it with, obviously, scoring and authorization to move forward with 

those projects that we need from this Committee. 

Ms. NORTON. So the intent somehow didn’t do it. Therefore, what 

further do we need to do? 

Mr. WINSTEAD. I do believe we have provided, you know, basically the existing law I have in front of me, and it says could be 

expended under the 412 authority. I think it is inclusive. The interpretation and the intent of this Committee and that language is 

clear, is that we could apply it in the areas we have talked about. 

The difficulty—— 

Ms. NORTON. So, as I read you, what we need to say is that we 

direct GSA to apply the proceeds to offset the space lease rental obligation. Would you agree that that would—— 

Mr. WINSTEAD. What we are doing aggressively is trying to—— 

Ms. NORTON. I am asking you. If we did that, would you agree 

that that is a direct—that that is a law? 

Mr. WINSTEAD. I think that anything that would clarify our authority to lease back 100 percent of space under 412 would be helpful. Because what we have is, as you well know, that allocation of 

risk assessment in terms of how that lease is interpreted, capital 

or operating lease, and it comes under that scrutiny. So that authority to have 100 percent lease-back, clarifying that obviously 

helps make those deals viable. 

Ms. NORTON. Thank you. 

27 

I listened to what you say about the security and the rest of it. 

I am not suggesting there is a simple solution here. I am suggesting that I have never bought the notion of impossibility. I buy 

the notion of think harder, and that is what I am trying to do, and 

I have to get you to help me do. 

Mr. WINSTEAD. I appreciate the Committee’s support on this. We 

have briefed staff on 412, our authority, the scoring issues and the 

like and will continue to work with this Committee in these areas. 

Ms. NORTON. Could I ask—I never did get an answer for what— 

you are going to, I think, submit a list of what has happened to 

all—well, no, that is different. I want to know what is happening— 

okay. That takes care of that. 

We have learned that your office has recalibrated the formula 

used to determine what courts pay into the fund. The predicate for 

this question is what I have asked about the fund up until now. 

Now, I have the testimony of your predecessor, Mr. Moravek, 

performing June of 2005. Just to give you the context, it is important to note that the fund was intended by Congress to produce 

cash flow for reinvestment in the upkeep of government buildings 

and the construction of new buildings and to reduce, as it has over 

the years, to under 5 percent the need for direct appropriations to 

the fund by Congress. 

I don’t know if that is still the case, by the way. It is that it is 

less than 5 percent. 

It—meaning the fund—is—and this is the operative language— 

is not a simple cost recovery system. It was intended by Congress 

to produce funds for reinvestment. 

Without coming or even informing this Subcommittee, the courts 

have, once again, apparently, decided they are in charge of courthouses. Because, for them, the biggest user—the biggest user—of 

the Federal Building Fund, you have recalibrated the formula in 

light of your own testimony about the threats to the fund, some of 

which you have no control over, such as increased need for lease 

space. How—why in the world would you change the pricing formula for the biggest user of the fund? And why would you do so 

without informing this Committee? 

Mr. WINSTEAD. Madam Chairman, I know that we have engaged 

with this Committee on discussion of the ROI pricing alternative 

as well as, obviously, appraisal-market-based rent. I will tell you 

that, going back to early 2006, when I came on and really got into 

this job as Commissioner, I had meetings with the courts. And I 

also saw that they were very concerned both about their rent, the 

aggregate rent, which is a billion plus, as well as what I was seeing 

in terms of the efforts of the portfolio staff in terms of rent bill accuracy and appraisal work that we were doing on behalf of the 

courts constantly. They are questioning every appraisal. They were 

going back out and doing three stages of reappraisal of every appraisal in the country on the rent. 

What we looked at—and I will tell you that the ROI pricing is 

not a new concept. We did not—it was not in response to a proposal 

from the courts. We did not adopt—— 

You talked about Commissioner Moravek’s comments. They had 

a proposal with Commissioner Moravek that basically said at the 

28 

end of the ROI period they are going to pay off the mortgage and 

not contribute to the Federal Building Fund. 

That is not what we are talking about here. The ROI pricing concept is not new. We have been using it since the early 1990s. It 

is a method of pricing that we have used for courthouses, for land 

port of entry, for special purpose facilities such as labs that do not 

have easily obtained comparables in the marketplace in terms of 

appraisal rent. 

Periodically, we have reviewed the assumptions of those ROI 

models and resulting rents. We have established, under the ROI, 

a minimum rate of return for the Federal Building Fund of 6 percent and evaluated all of our assets to see whether they provide 

this return. And all the courthouses that you have mentioned—— 

Ms. NORTON. Excuse me. You said this was not requested by the 

courts. Then why did you do it? Who requested it? 

Mr. WINSTEAD. We already had—the courts were very—in terms 

of the application of ROI, they had been arguing for some time 

that, number one, we already apply it to courts, that they were not 

comparables. In most urban markets, courthouses are unique structures. And what they were constantly arguing is that the approach, 

in their mind, should be an ROI pricing approach that guaranteed 

fair return to the Federal Building Fund. 

So what we found that was some appraised based rents that they 

did not provide—under the appraisal rent approach, they did not 

provide sufficient return when you examined the expanded use of 

ROI for these projects. So we did enter into—and we did talk to 

this Committee about it, as well as OMB. We did enter into an 

MOU which established the existing—revised the existing ROI 

pricing model to apply to new courthouse construction. 

If I could just have a couple more points to make. 

The new courthouse projects were unique in terms of overall 

long-term requirements, and we did apply the ROI pricing to them. 

And what we are seeing is that in the market you are well aware 

of, in Los Angeles, in almost every major market where there has 

been a lot of construction, increased costs and construction have 

not really been reflected totally by appraisal rates, that we don’t 

have in many markets equivalent appraisal rates for courthouses. 

We have the courthouse in most markets. 

So what we did as a result of very high costs in construction with 

a lot of the new courthouses is we applied a guaranteed rate of 6 

percent which is adjustable under a review. And we did find—I will 

give you an example of the results of that. 

Under that approach and analysis, we have five examples, taking 

future courthouses, just to illustrate this, on why the ROI approach 

guaranteed fair return to the Federal Building Fund 6 percent. 

With Los Angeles, a market rate of $40 a square foot and an ROI 

rate of $65 a square foot. So in Los Angeles approach, which is obviously a very problematic project, we saw a differential of $25 between the appraisal rental rate of 40 bucks, and the ROI rate of 

65. So in the case of Los Angeles, in the case of Mobile, in the case 

of Nashville, Cedar Rapids and San Diego, the ROI return was 

higher on a square foot basis than the fair market value approach. 

It also—so the ease of calculation, the assurance—— 

Ms. NORTON. Wait a minute. The 6 percent, is that in perpetuity? 

29 

Mr. WINSTEAD. It can be—no, it can be increased. We do review 

the ROI rate at 6 percent. It is reviewed with OMB as well. But 

it is calculated on the fair return based on—— 

Ms. NORTON. But are they going to have to continue to pay into 

it? At no point would the Court stop paying into the fund the way 

the people pay rent into the fund? 

Mr. WINSTEAD. No. That is correct. 

Ms. NORTON. Is that your testimony? That there doesn’t come a 

point where you have paid for it as you would, for example, pay 

for a mortgage, pay off your mortgage? 

Mr. WINSTEAD. No, this LOI pricing is not a mortgage. I think 

Commissioner Moravek’s comments were about their proposal back 

3 or 4 years ago when he was Commissioner. This is not a mortgage. This does not expire. The courts proposed—— 

Ms. NORTON. Now, Mr. Winstead, you help me to understand 

things, if I can intervene and ask questions. Because you will not 

find me unsympathetic to the notion that in L.A. and places like 

that there may need to be some exceptions as to how we go about 

building. After all, my colleagues come up to me, you know, pulling 

their hair out in places like that. Was this done for the courts generally? 

Mr. WINSTEAD. No, we apply ROI pricing to other—— 

Ms. NORTON. Was this done for the executive committee of the 

courts? Was that who you dealt with for courts to get this new recalibration of the formula? Or were you talking about recalibration 

of the formula for specific courthouses? 

Mr. WINSTEAD. No, for application of ROI going forward. 

Ms. NORTON. For all courts. 

Mr. WINSTEAD. Yes. But still—— 

Ms. NORTON. Was this done—okay. Excuse me. Not finished with 

that answer? Don’t want to cut you off. Was this done by MOU? 

Mr. WINSTEAD. It was done—— 

Ms. NORTON. How is that recorded? 

Mr. WINSTEAD. It is in—I know we—it was recorded in a document in February of this year that we strongly—— 

Ms. NORTON. Drawn up by GSA? 

Mr. WINSTEAD. Yes, and we did have discussions about the ROI. 

Ms. NORTON. You know, Mr. Winstead, if we may be so humble, 

when you are talking about—well, maybe as to ask for a copy of 

the document? Not only did you not inform this Committee, but we 

have received none of the information you describe. 

Mr. WINSTEAD. I would be happy to make sure—— 

Ms. NORTON. Did you do an analysis on the impact on the Federal Building Fund that you say you are so concerned—that very 

Federal Building Fund that you say you are as concerned about as 

I am, on the long-term effect on this change for all courts, whether 

located in places like L.A. or low-cost areas of the country? Did you 

do an analysis of the long-term effect on the Federal Building 

Fund? 

Mr. WINSTEAD. Yes, ma’am, we did. 

Ms. NORTON. And what is it then? What is it? Does it hurt, help 

or have no effect? 

Mr. WINSTEAD. It does not have—it benefits—I mentioned these 

five projects that we have applied ROI to, the revenue base with 

30 

L.A., Mobile, Nashville. There is a higher return on the ROI pricing. And we do have—Tony Costa and our financial people, when 

we were looking at this option, because of increased costs and the 

appropriateness and return of the Federal Building Fund, we did 

do analysis on impact to the Federal Building Fund, and we 

had—— 

Ms. NORTON. Submit that analysis within 30 days, please. 

Mr. WINSTEAD. Oh absolutely. I do believe that we had—and I 

will make sure that we get everything. But I do think we shared 

discussions of ROI approach, but I will make sure you have everything, both letters and correspondence, on this. 

Ms. NORTON. Mr. Winstead, the staff said you shared it, and we 

said it was not a good idea, and we told you it wasn’t a good idea. 

And you went ahead and did it without informing us that you were 

going to do it and without submitting any indication that you were 

proceeding to work directly with the courts to change the formula 

for the biggest user. 

Look, again, we have been around the mulberry bush. We understand the terrible problems that some parts of the country have. 

Look, over here we are dealing, as I speak, with people in jurisdictions like L.A., San Francisco, Washington, D.C., and Boston, arguing that this new housing bill ought to allow for—ought to apply 

to housing up to, I think, you know, beyond what we would ever 

think of before, 700,000, a rather large number. 

So we understand that there may be reasons. Probably they are 

negotiating, as I speak, whether or not that ought to apply all over 

the country or only in districts where the new housing bill that is 

now being put through the Senate or whether only in those districts to which it applies because of the cost of housing. 

I use that analogy to make this point. The Committee is not insensitive to the need for exceptions to Federal policy. You have 

made no exception. You have drawn a new policy to apply across 

the board. That is—and you have informed, without informing the 

Subcommittee. That is as close to a cardinal sin that can be committed against a Subcommittee. To hear from the Subcommittee, 

not a good idea, go ahead and do it, submit no indication that you 

are doing it, and no background information invites the Subcommittee to take corrective action. 

Mr. WINSTEAD. Well, I will get you all the information—— 

Ms. NORTON. You need to get us all the background information 

you can—— 

Mr. WINSTEAD. Certainly I will and also—— 

Ms. NORTON. Because we will not allow this to stand unless it 

can be justified. So be on notice, anybody who wants to go ahead 

and do something as structural as this—that is the only way to 

characterize it—the kinds of things you generally do by legislation, 

make a gross exception for one party, with other parties having to 

do what they have been doing, when you make that kind of decision, not only should you inform the Subcommittee—— 

I believe only the Committee should be making that decision, and 

I believe so because the Federal Building Fund is close to crisis. I 

believe so because I have heard nothing from you to indicate you 

know what to do about it, and I believe so because it is a change 

of mammoth proportions because it applies to all courthouses and 

31 

because the courts are the largest user of the Federal Building 

Fund. 

I have made my case. I haven’t heard your case for an acrossthe-board exception; and unless we hear the case for it, you are on 

notice it will not stand. I will leave that, because we will look at 

your materials. 

And I can be convinced of anything. You could easily have convinced the Subcommittee about L.A. and similar places. The burden is on you to overcome the presumption against applying such 

a formula across the board because the courts said so. And the burden is on you to explain why other Federal agencies ought to bear 

that burden for the courts while they do not accept their proportionate share while using disproportionately the Federal Building 

Fund. 

You have got to understand our own history with these people. 

They have come up here asking for outrageous exceptions for the 

Federal Building Fund, and we have said to them—looked them 

right in the face and said no. So they know the Subcommittee opposes it. 

So you ought to tell the courts, this is on such shaky ground that 

it will not stand. We are not going to—unless—again, since they 

are directing courthouse construction, unless they can come up 

with a better answer than I have heard here today for making a 

huge exception to Federal law and policy—and I emphasize law— 

the law says, you all pay. You pay the same amount and, guess 

what, ultimately, you all will benefit. Some of you will never get 

a new building, but I tell you, you are going to get your repairs 

done more quickly. So we don’t want to hear it, that you don’t want 

to contribute in a cooperative fashion. 

All I know is the impact will be not so much on construction but 

on the very issue we raised, that you have to abandon Federal 

property because you cannot do repairs. I don’t know how this is 

going to help you to do repairs for all the other people who are paying into the Federal Building Fund and getting no discount the 

way the courts are, and yet not getting their repairs done, and yet 

not getting a new building. Very, very distressing. 

Of all the things we learned about preparing for this hearing, the 

failure to notify us of something we told you not to do and then 

going ahead and doing it, when the policy of this Committee, under 

Republicans and Democrats alike, has been equal, this is the most 

distressing thing that we learned about in preparation for this 

hearing. We are not going to take it. So if you all are contemplating 

doing anything else like that on your own, you ought to go back 

and rethink it right now. 

Let me go on. Speaking of courts, we have had to fight them, so 

we know you do. I once had to tell the judge who was in charge 

of them all what separation of powers meant, because she actually 

informed me that they could actually have a say in building courthouses—no say, much expertise, much background, but no say. The 

say is with you and the say is with the Congress of the United 

States. 

Now we have been on the courthouses and getting nowhere—or 

at least not anywhere that anybody would want to write home 

about—about their design guide. We have now received, finally, a 

32 

new design guide, and included are a series of actions to make the 

guide different from the previous guide. 

The whole point was to reduce costs, control costs for the out-ofcontrol courthouse sector. Because they essentially were driving the 

ship. They have been driving the ship ever since I have been in 

Congress. Well, I haven’t been in the Chair until now. They are not 

going to drive this ship. And if they think—we will undo the things 

they have done. The horrendous things that we have uncovered are 

close to the kinds of things you penalize other Federal agencies for 

doing, like building kitchens and extra kitchens and extra facilities, 

extra fitness rooms. 

You know, you give—who wouldn’t let them do it? Why not do 

it? So they don’t have any credibility with me. And you know what? 

When it comes to building, they don’t have any power. 

One revision calls for ′′reduced chamber spaces′′, but it doesn’t 

tell us what the old chamber space was or what the new number 

is, what the potential cost savings are. What role did GSA play in 

the design guide? 

Mr. WINSTEAD. Madam Chairman, we worked closely with the 

courts on the design guide, and it was an attempt to, obviously, 

focus in on the building requirements of a courthouse and looking 

at efficiency and some things like law libraries that are no longer 

as relevant as they were in old courthouses because of the practice 

of law, as you know, being online, to a large extent. 

But the 2007 design guide of the U.S. courts was aimed at reducing and focusing in on—— 

Ms. NORTON. Reducing what? 

Mr. WINSTEAD. The space requirements. 

Ms. NORTON. How about aimed at reducing cost, Mr. Winstead? 

Mr. WINSTEAD. Yes, cost. 

Ms. NORTON. What is the cost reduction for the new design guide 

space requirements versus the old design guide space requirements? That was the whole point, to reduce the high cost of space 

for courthouses, not just reduce the space. The two go together, of 

course. What is the reduction of space? 

Mr. WINSTEAD. The analysis that we have done to date in the Office of Chief Architect, with our project teams, is that the implementation of the design guide will save approximately 2 percent in 

terms of total space usage by the court. So we are actually—the 

new design guide will, in fact—the total square footage for traditional courthouse—— 

Ms. NORTON. So what’s the square footage? 

Mr. WINSTEAD. Sorry? 

Ms. NORTON. In other words, there ought to be a standard square 

footage for courthouses of different kinds. You know, that shouldn’t 

be up to you. Hey, I want a big one. I want a small one. Is there 

a standard square footage you are looking toward? 

Mr. WINSTEAD. No—— 

Ms. NORTON. If there is a standard square footage—as with everything else in life—I don’t believe in cookie cutter or anything. 

There out to be—this is the standard. You can overcome the standard by showing the reason why. Is that what the design guide allows or not? 

33 

Mr. WINSTEAD. Yes. It is an effort—we made several—we made— 

in the design guide drafting with the AOC—they have, actually, 

since 1991, published this design guide. We actually spent—provided 13 pages of 128 suggestions in 2004, 2005 and 2006 aimed 

at establishing a working group, and we basically looked at less 

probate. 

Ms. NORTON. Who is in on the working group? 

Mr. WINSTEAD. Our team, the head office, the Office of the Chief 

Architect and construction and the AOC facility Committee and a 

special group, obviously, their chief executive group, that is in 

charge of our liaison, our rent and the rent issue. We actually 

made a number of these examples. I will just share with you. 

We located probate and pretrial and less expensive space. We 

looked at base requirements on true need consistent with the current workload and real estate growth trends. 

I will tell you that, as I go around to meet with judges in and 

around the country, one of the questions I ask, not only how is our 

current team doing in managing that courthouse and how is that 

operating, how does it meet your need, but I also ask, what is the 

case load burden? What is the case load in courts? You know, it 

generally is going down because of mediation and settlement out of 

court versus the cost of litigation. 

So what I am saying, a lot of these recommendations—we institutionalize a lot of systematic methods for courtroom sharing. 

Ms. NORTON. Say that again? I am sorry. 

Mr. WINSTEAD. We instituted a systematic methodology for courtroom sharing. As you are well aware on this Committee—— 

Ms. NORTON. A systematic what? 

Mr. WINSTEAD. Methodology. 

Ms. NORTON. Yeah, well, what is it? 

Mr. WINSTEAD. Based on past use, obviously, and judgeships 

coming on stream. 

Ms. NORTON. Excuse me, past use? 

Mr. WINSTEAD. We are still operating under both the San Diego 

resolution which you all passed here in terms of courtroom sharing. 

I know they are still doing a report on that in terms of workload. 

We eliminated a majority of the library space because of what I 

said before. We reviewed lighting criteria to try to include the same 

standards, that they and GSA had the same standards. We revised 

a requirement for carpet. Instead of a 42-ounce carpet, to something that have greater choices. We reduced the expectation for 

elaborate millwork, trying to work with the courts to save money 

in both their concern for rent. We capped the courtroom ceiling 

heights at 16 feet. We reduced the minimum—— 

Ms. NORTON. You will help us—not by that kind of list—— 

Mr. WINSTEAD. Okay. 

Ms. NORTON. —but by—important as it is, I don’t want to minimize that. You will help us by equating square foot to reduction in 

costs. I want to see that, please. 

Mr. WINSTEAD. All right. 

Ms. NORTON. That I will give you 60 days to do, because it looks 

like it hasn’t been done. 

34 

We—for example, we don’t know what reducing built-in bookcases would be. I mean, I clerked for a Federal judge, and I am not 

sure you save a lot of money. 

Mr. WINSTEAD. No, but the reduction of library and probate 

space. 

Ms. NORTON. But a billion bookcases. 

Mr. WINSTEAD. No, we are not going to save a lot of bookshelves. 

Ms. NORTON. I mean, any office has to have some bookshelves. 

I don’t even know how that would even save money. 

Mr. WINSTEAD. Well, we are talking about reducing the library 

space, basically eliminating it. 

Ms. NORTON. Okay, my information was built-in bookcases, reducing the library space because they can find that elsewhere. 

They all do have books in their offices as well. They are all Federal 

courts. They don’t need access to torts and every State law there 

is. So I understand what you are saying. 

We are down to that kind of nitpicking, because we have that 

kind of lack of money. 

Eliminate jury boxes for bankruptcy courtrooms. We don’t know 

anything about that unless you equate it to savings. 

We are pleased that you have gone through this process. Now, 

you don’t want been to lose the credit by leaving us without any 

understanding of what it does for costs, particularly since the Federal Building Fund is deeply implicated and since you have given 

a pass to the courthouses on it, as we learned. 

So, if you would, within 60 days prepare a cost-saving analysis 

based on these space-saving analysis. You are moving us forward 

in a very tough area that the courts have resisted, and I very much 

appreciate that. 

Ms. NORTON. Let me ask you quickly—oh, my goodness—about 

security standards. We now have a total, you-are-on-your-own 

agency had to do with security wherever you want to. You add 

costs to the project by apparently designing your own security 

standards. 

I have had a terrible experience, and I am going to have a hearing on this one, and that is, very kindly, the Transportation building—it took us two decades, I guess, because they were working before both of us got here. It is up. 

We learned about the security because we have worked with 

them. We had an event there. It is a beautiful building. We were 

very pleased with the event, very pleased with their staff and how 

they handled it. They have entrances on both sides. 

Now, mind you, this was—would have been even for Federal 

workers. We had an event. Frankly, it was an event—your folks 

came, were extremely helpful to us to make sure that we were 

looking for space all over the city, including space, would you believe, 5 minutes from the Capitol, because it isn’t in the middle of 

town or K Street, had been avoided. 

So we are simply trying to do the kind of marketing and hope 

that GSA took note because that is the kind of marketing we expect them to do. 

The GSA was wonderful in setting up something outdoors for us 

for breakfast, indoors, and then someone proposed to staff that 

35 

they do a walking tour around the building and you could then see 

what they are going to do. I said, are you crazy? 

In NoMa, it was precisely the site of some not-yet-built structures that was a deterrent to many agencies. Some of them still 

don’t understand that this is going to be the only new part of town. 

So the last thing—even though some of these buildings and the 

mall are going to be up, frankly, in 2009, the last thing you want 

to do is to give them a walk anywhere near that—well, you know, 

on one side there is a place that they have concerts—of course, 

there are no concerts going on now. But all over here is where this 

bill the GSA worked with me on, the Federal Center bill, all that 

is just being built. So I say they would have to be out of their mind 

to, say, taking a walking tour, which would include looking at those 

spaces. 

Then we walk all around the building—what street would that 

be? M Street. By the way, if you are a race walker the way I am, 

although not in high heels, you might say, well, this is an exercise. 

Of course, you are doing that in the heat of July in Washington. 

So I—you know, I came over to do my own site inspection; and 

I said to the people, are you crazy, what about a door? This was 

to be attended, yes, by some developers, but mostly by Federal 

workers. They were set up for people to come in on the other side. 

Even though this was mostly Federal employees, that was a way 

to get people to walk all around a huge building and come in on 

the side they wanted to. 

Upon further investigation, I learned that this low-target building—al Qaeda is—and all the chatter we hear on the Homeland Security Committee has not yet focused on the Department of Transportation. We also learned that you could get in the building with, 

if you are a Federal employee, show your ID. 

But if, for example, you were, like the BID building—the BID is 

each part of the city now has a business association; and, in fact, 

the GSA, the Federal agencies are part of it because they keep the 

area up. It is a terrific thing, with great cooperation from GSA and 

its buildings. 

Well, the person there, who is a neighbor, could not enter the Department of Transportation unless somebody came down, couldn’t 

enter—who was an employee—to bring them in. That means, of 

course, nobody can go to the cafeteria. 

The thing that most got me was not so much the Federal workers 

but 20 million people who come to visit their Member of Congress 

every year, some of whom will find their way down there and will 

say, wow, I have got to go to the john. Here is a Federal building. 

I am going to alert you, before you hear from some Member of 

the House and Senate, you try denying entrance of a taxpayer to 

a premise that taxpayer pays for, and you will see smoke coming 

out of this building. That comes because you have been sitting on 

a Committee that has allowed people to have their own way when 

it comes to security transactions, whether it is high or low security. 

I need an explanation for that when you have what amounts to 

abuses of people entering the business for ordinary purposes. 

I can say to you that I have seen different policies in agencies 

that I regard as higher targeted or security agencies, have seen— 

the most stringent policy I have seen is at the Department of 

36 

Transportation. I need you to explain how that could have possibly 

happened. 

Mr. WINSTEAD. Well, I do believe, Madam Chairman, it is, you 

know—the situation that you mention is frustrating. I know it was 

raised again on June 6. 

Ms. NORTON. How did it happen? Who made the decision? 

Mr. WINSTEAD. Well, the Building Security Committee, of which 

GSA has a part, as well as, obviously, the Department, DHS, and 

the Federal Protection Service, and the tenant agency, DOT, sets 

these standards for security in buildings, depending upon the IFC 

standards and the security rating of that building, 1 to 4. 

Ms. NORTON. What is the security rating of the—we know it is 

all these Federal agencies, headquarters, level 4, but that is not a 

security rating. Don’t tell me they have the same security rating 

as the FBI. 

Mr. WINSTEAD. Yes, as you well know, this is a leased facility, 

but it has been rated. It is a new facility. It is level 4. 

Ms. NORTON. All right. Mr. Winstead, you will never get away 

with answering my questions around the mulberry bush, so let me 

put it directly to you. 

Do you think that is appropriate for the Department of Transportation—that kind of requirement I described to you, is that appropriate for the Department of transportation? 

Mr. WINSTEAD. Madam Chairman, a level 4 is a high—— 

Ms. NORTON. I am asking you—let me ask it again. Is it appropriate for the Department of Transportation and the FBI to have 

the same requirements for how you enter the building, who gets in 

and what you have to show in order to get in? Is it your view that 

they should have the same requirements? 

Mr. WINSTEAD. Madam Chairman, it is a level 4, the DOT building. 

Ms. NORTON. Is it your view that at least these two buildings, 

hypothetical, should have the same requirement? 

Mr. WINSTEAD. I am concerned about the inconvenience that 

level 4 at that facility is creating and the evidence of your event 

over there the other day and what it created. 

We follow the lead of the Federal Protection Service in their evaluation of the security leads for our tenant agencies. Federal Protection Service, as you well know, is a part of DHS. I know you had 

a hearing recently on the Federal Protection Service. It is, you 

know, a headquarter agency. It is the DOT headquarters. There is 

a large staff. 

Ms. NORTON. So your answer is, whatever they say, you follow 

their lead? 

Mr. WINSTEAD. No. I think this area deserves—you are correct. 

The biggest concentration of Federal buildings is in your district. 

I think we need to look for aggressively—and you suggest this 

Committee is going to do that—at these kinds of issues, the accessibility of the public. This a 1.2 million-square foot leased headquarters of a Cabinet-Level agency. 

Ms. NORTON. Could there be, to the greatest extent possible—notice how I have said that—uniformity with respect to these policies, 

bearing in mind the different security needs and rankings of the 

agency? 

37 

Should there be, to the greatest extent possible, a presumption 

about getting into Federal buildings, a presumption that all enter 

until you show you have a different need because of security? 

Would that be the understanding to begin with? 

Mr. WINSTEAD. Absolutely. It makes a lot of sense to have—and 

I am concerned as you are that—— 

Ms. NORTON. Mr. Winstead, I don’t know who this Committee is, 

but all of you are going to be before us. Because we are going to 

have not just GSA—it is not just you. We are going to have you 

all before us, and we are going to lay out the record of the differences. 

We want the taxpayers to hear about how, when they can go in 

some buildings and not other buildings—we want them to know 

that you can’t go in the Department of Transportation at all. We 

want to know that regardless of—unless your emergency, I guess, 

is one, a health emergency, if it is only that you want to use the 

bathroom, you can’t go. 

We want to tell them that they built a gorgeous cafeteria and 

that only those inside can use it. We want them to know about 

cafeterias, including that in the House of Representatives that all 

of them can use, and then we want to ask all of those who have 

decided that the agency head—you know good and well that is who 

is making the decision, and not your Committee—should decide security policies. 

We want you to defend that. And I wanted to not close this hearing without letting you know how outrageous it was that this happened at a building that no one would consider to be a high-security building, notwithstanding its status as a headquarters building. 

And I wanted you to know how unacceptable it will always be 

for a taxpayer to be kept out of a building, and that is what would 

happen to an ordinary taxpayer. There would be no way for that 

taxpayer to get in the building. 

That taxpayer would say, I am sorry, I would like to use the 

bathroom. That would not let that taxpayer into the building. That 

taxpayer would have to know an employee. That employee would 

have to come down. That is indecent. 

It is so unacceptable that you would think that the Committee 

would say we begin with this, free entry, because that is how it always was before Oklahoma City. Now, the things that all of you, 

at the very least, must do, to guard the security of the employees 

and visitors—— 

Now, beyond that minimum—this is really not rocket science. Beyond that minimum, there are differences among you. In consultation with the agency and security experts, those differences would 

have to be laid out. 

If I may say so, under no circumstances, at least in the District 

of Colombia, could I envision a circumstance where an ordinary citizen could not cross the threshold. If there is such a case, you need 

to come and tell us about that case. 

This is the most high—except for the White House. Now that is 

the only place I know where that rule obtains, and I will grant that 

to the President of the United States. 

38 

But I regard this as a personal insult to taxpayers, and I am 

hearing their insult to you before—one of these days, if we were to 

let this stand, there would be something that caused a taxpayer to 

run straight to the press and say I tried to get in XOY building, 

and they said security says that I can’t even go into a building that 

I, as a taxpayer, am responsible for. Don’t let it get to that the way 

it had to get to holdover leases in the newspapers. 

I have to leave and, in fact, I know I have exhausted you with 

these questions. There are questions for the record, this is where 

the National Capital Region—more than half the Federal presence 

is here. I would like to know the holdover status, in detail, of every 

holdover lease in the National Capital Region, how long held over, 

what the cause of the holdover is, when do you expect the holdover 

to be released. I want that within 30 days. 

And I would like to supply—we would like you to supply the 

Committee with a definition of these terms: ′′new lease, succeeding 

lease, replacement lease, consolidation lease, and superseding 

lease′′. Part of what you have had to go through today is that I have sat 

through 17 years on this Committee with many frustrations. Now 

that I am the Chair of the Committee I feel a need and an obligation to try to go at some of these things. I feel a very special pressure in this economic climate and I feel special pressure in light 

of the PAYGO rules that the Congress of the United States has, 

I think, correctly adopted. 

Thank you very much for your testimony, Mr. Winstead; and I 

look forward to look working with you on these issues. 

Mr. WINSTEAD. Thank you, Madam Chairman. I appreciate it. 

[Whereupon, at 12:30 p.m., the Subcommittee was adjourned.] 

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