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42–777 PDF 2008

MAKING THE GENERAL SERVICES ADMINISTRATION LEASE AND CONSTRUCTION PROCESS EFFICIENT, 

TRANSPARENT, AND USER-FRIENDLY 

(110–135) 

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 

JUNE 6, 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 

DORIS O. MATSUI, California 

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 

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 

Grunley, Ken, President of Grunley Construction ................................................ 5 

Seekins, Gail, Senior Property Manager, Akridge Company, and Member 

of the Building Owners and Managers Association (BOMA) International .... 5 

Turowski, Art, Senior Leasing Official, Jones Lang Lasalle ................................ 5 

Winstead, David, GSA Public Buildings Service Commissioner .......................... 5 

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS 

Altmire, Hon. Jason, of Pennsylvania .................................................................... 52 

Graves, Hon. Sam, of Missouri ............................................................................... 53 

Oberstar, Hon. James L., of Minnesota ................................................................. 58 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Grunley, Kenneth M. ............................................................................................... 59 

Seekins, Gail H. ....................................................................................................... 63 

Turowski, Arthur ..................................................................................................... 69 

Winstead, David ....................................................................................................... 75 

SUBMISSIONS FOR THE RECORD 

Winstead, David, GSA Public Buildings Service Commissioner, responses to 

questions from the Subcommittee ....................................................................... 90 

vi 


42777.001
vii 


42777.002
viii 


42777.003
(1) 

MAKING THE GSA LEASE AND CONSTRUCTION PROCESS EFFICIENT, TRANSPARENT, 

AND USER-FRIENDLY 

Friday, June 6, 2008 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS AND EMERGENCY MANAGEMENT, 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:57 a.m., in Room 

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

[Chair of the Subcommittee] presiding. 

Ms. NORTON. Today the Subcommittee will examine the processes and costs associated with leasing and construction by the 

General Services Administration. Although leasing and less frequently construction are perhaps the most important work of the 

Public Buildings Service Commission, during my years on this Subcommittee, there has never been a top to bottom look at out how 

the agency accomplishes this work or whether it needs changes. It 

is long past time for the Federal Government, the Nation’s major 

procurer of lease space, with 700,000 Federal employees at leased 

sites and with approximately, 640,000 employees in government 

owned space to look more closely at the benefits and burdens of its 

lease and construction practices. This is especially the case today 

when we are about to undertake the largest building project in the 

history of GSA, the new headquarters for the Homeland Security 

Agency. 

The stakes for the taxpayers and for government and private sectors alike are incredibly high. Taxpayers want the best deal the 

marketplace can offer. Especially considering the leverage that 

GSA’s outside footprint should afford, developers, building owners 

and contractors who incur considerable risk and substantial cost 

simply to compete for Federal leases and construction contracts 

want a cost efficient process that yields timely decisions. GSA 

wants to assure its clients are adequately served and that Federal 

requirements are met. 

The Subcommittee and ultimately the full Transportation and Infrastructure Committee authorizes GSA requests for space which 

come to the Committee in the form of an agency prospectus. The 

processes for leasing and construction are inherently complicated. 

But this does not mean that they cannot be streamlined or made 

less costly, more transparent and more user friendly. Is the present 

process the best we can do? Today we ask ourselves whether conVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
2 

sidering Federal requirements and professional and technical demands for leasing and construction, can the GSA leasing and construction process be improved? Before prospectuses even arrive on 

Capitol Hill, the GSA has used its considerable expertise and spent 

many staff hours of work, request for leasing, of course, occur far 

more often than for construction. 

GSA issues a solicitation for offers based on prospectus approved 

by Congress. After submission of offers, GSA evaluates the initial 

submissions for technical compliance with the original solicitation. 

Negotiations ensue on costs for tenant improvements, the availability of amenities, the range of acceptable rental rates and other 

tenant agency requirements. After GSA requests best and final offers from potential lessors, the final evaluation takes place. Even 

after final award is made, GSA must negotiate a final lease with 

several clauses designed to protect the government’s interest, although some of these same clauses may be at issue at today’s hearing. 

Clauses that give the government the right to terminate a lease 

at any point and to buy the building at market rates may create 

an economic risk that although not likely to be exercised by GSA, 

drive up the final price to private industry and ultimately to the 

Federal Government. If, however, construction is authorized by 

Congress, and usually that happens in advance, a lengthy set of 

steps also ensue, including consultation to determine client needs, 

site selection, architect and engineer selection, final design and 

procurement strategy. The current release steps GSA also develops 

a prospectus for Committee approval. 

Once the prospectus is approved the procurement phase begins 

and the private sector is engaged and award occurs and further refinements are made and negotiations are finalized. However during 

procurement, construction documents, advertising the project, preparation submission of bid awards, of contracts and final negotiations can stretch on for years. Market conditions, market volatility 

and labor costs, in the meantime, complicate the task of contractors 

in preparing a winning bid. In addition, numerous Federal requirements such as the provisions of the National Environmental Protection Act, or NEPA, Buy America, competition and contracting 

act, small and minority business Act, Fair Labor Standards Act, 

energy, historic and environmental rules and regulations all are incorporated into the procurement. 

During my service on this Subcommittee, I have had an opportunity to closely observe GSA as it has located agencies in particular here creating a virtual microcosm of GSA’s location policies 

nationwide. GSA is assigned this responsibility because unlike 

other Federal agencies, it has unique professional and technical 

knowledge. This is only part, but as it turns out, often the most 

visible and an important part of GSA’s leasing responsibilities. This 

function is assigned to GSA and not to Federal agencies themselves 

in order to ensure adherence to uniform policies to control important variables such as cost per square foot and to ensure taxpayers 

receive the best value for available Federal funds. 

Many of GSA’s decisions have created the impression that some 

locations are acceptable and some locations are not, despite the 

proximity to public transportation and amenities as required by 

3 

law and even where there has been existing Federal investment. To 

make this point, I held my first hearing as chair in NOMA, the 

part of downtown Washington north of Massachusetts Avenue that 

provided a case study for looking closely at GSA’s location policy. 

This area is bounded generally by Union Station, North Capitol 

Street, Florida and New York Avenues, you will recognize as main 

downtown parts of the district, as well as second street on the 

northeast side. 

The area, in addition, is very close to the Capitol, to the Senate 

and the House and is a prime location here, leading to a makeover 

that began almost two decades ago. The private sector found 

NOMA long before the rapid development in progress there today. 

For years, NOMA has been the headquarters for brand name private public and nonprofit entities among them, XM Radio, 

CareFirst, BlueCross/BlueShield, SEC and Kaiser Permanente. Yet 

although finally in the midst of a building boom, with 60 percent 

office space and 40 percent housing, a supermarket and amenities 

not available on K Street, Federal agencies still show reluctance to 

locate in NOMA. What should the Federal Government do about 

this? 

NOMA is not only close to the New York Avenue metro but to 

Union Station, the cities’s major transportation hub where rail, 

light rail, metro bus and taxi service converge. The local bid is running a taxi, a free service between New York Avenue and Union 

Station. Nor can it be doubted that the Federal Government regards the centrally located NOMA area as vital to Federal interests 

because the NOMA transformation now in progress has been significantly influenced by Federal policy, the new Bureau of Alcohol, 

Tobacco and Firearms, their headquarters which was just opened 

last month, signaled that NOMA was regarded as an ideal site for 

Federal facilities. Make the point unmistakable. 

The Federal Government also did what it never has done before, 

did a one-time only investment, at least thus far in an extra Metro 

station that had not been planned as part of the net metro station 

that had not been planned as part of the Metro system and specifically positioned the station to serve the NOMA area and thus fulfilling indeed more than fulfilling GSA requirements for Federal facilities and that they are arguably located in close proximity to 

public transportation. 

As a result, NOMA, unlike most areas where Federal facilities 

are located, has a new Metro station on the north end in addition 

to Union Station and the transportation hub on the south end. How 

then could anyone explain to taxpayers that there would be any reluctance by the Federal Government to locate agencies in 50 city 

blocks downtown Washington of existing space rapidly being developed at below market office space rates here. In years of oversight, 

this Committee has found evidence that agency preferences, not 

statutory mandates, often dominate GSA location selections. 

The 57-acre government-owned Southeast Federal Center, located on M Street in the neighborhood known as Capitol Riverfront, today is 5 minutes from the Capitol and is another case in 

point. GSA was unable ever to convince Federal agencies to locate 

there, even though long ago the Navy Yard Metro station at both 

ends of M Street have been located there. After 10 years of seeing 

4 

agencies avoid the area, and I introduced the southeast Federal 

Center legislation, that for the first time is allowing the private 

sector to develop on a Federally-owned site, a very valuable piece 

of land located on the River, shortly will there after the new Department of Transportation headquarters was built there still capital River front near the new Navy yard a multi use development 

which will have parks, to be found nowhere else where Federal 

agencies are located also a supermarket, a mall, may be experiencing the same reluctance by Federal agencies to locate there in 

the M Street Yards Southeast area. 

I will be holding a forum for agencies along with the local businesses improvement district or bid being formed just as NOMA has 

had a very effective bid to inform agencies more about the area and 

its amenities just as I did for NOMA. Several years ago, GSA cooperated with me in the form which introduced agencies to NOMA. 

And I am pleased that GSA is again involved with this upcoming 

forum in late June. But I must say that even after we had the 

forum, GSA had difficulty getting agencies to locate in NOMA, even 

as amenities tumbled down and were clearly being developed. 

Meanwhile Federal agencies continue to want to lease higherpriced space in more traditional areas, near K Street Connecticut 

Avenue and similar downtown locations. Not surprisingly, Federal 

employees often prefer downtown locations near their shops and 

their restaurants and their theaters regardless of what shops and 

restaurants and theaters are being built in new areas. Agency preferences are, of course, central and very relevant and must always 

be taken into account. However significant questions are raised 

concerning GSA’s adherence to statutory requirements when sites 

compete which have amenities and are continually bypassed by 

GSA. 

As a result of the NOMA hearing, the Subcommittee added important language to every GSA prospectus that requires GSA to notify our Subcommittee if any changes are to be made to the area 

designated in the prospectus. This language has had some effect. 

It was designed to keep Federal agencies from dictating where they 

will be located regardless of costs once a fair competition has occurred and enforces the original intent of executive order 12072 

that requires GSA to give serious consideration to neglected parts 

of urban areas. 

At bottom, GSA’s leasing and construction process requires not 

only more leadership from this Subcommittee but particularly from 

GSA in performing the vital role it has been assigned by Congress. 

Its role requires initiative as well as deference to serve its numerous and often inherently inconsistent roles to develop as developer, 

landlord, real estate agent and agent for major repairs and rehabilitation. 

The Subcommittee is earnestly looking for ways to help especially considering that GSA is a peer of the Federal agencies it 

serves and may need statutory or prospective changes from Congress for agencies to fully understand GSA’s role and what we expect of GSA and of other Federal agencies. 

In today’s atmosphere, budget deficits and requirements of 

PAYGO spending, agencies must be directed to convenient sites 

that have the required amenities, that the government of United 

5 

States can afford. NPR employees who will shortly be located in 

downtown NOMA, and CNN who was there before the current 

NOMA building boom began, did not try to veto the site, as some 

Federal agency officials and employees have done. 

Moreover, the most economical site agencies will surely find in 

this atmosphere is best for agency budgets who pay rent to the 

building fund, and I assure you will not get increases any longer 

to relocate wherever they choose. 

It is just as important, however, for GSA to work collaboratively 

with the private sector in reducing their costs of leasing and construction not only in these budget crunch times but because a costly and cumbersome process for leasing and construction by the Federal Government is not in the interests of any of the parties involved. 

We welcome the Commissioner of the Public Buildings Services 

this morning and the other witnesses who bring professional and 

personal experience and expertise that can help the Subcommittee 

and the GSA. 

We are going to ask all the witnesses to take the table at the 

same time. I think a good exchange might be beneficial to all concerned. So Commissioner David Winstead, Public Buildings Service 

Commission at GSA; Art Turowski, senior leasing official at Jones 

Lang LaSalle and a former official of the GSA, leasing official of 

the GSA; Gail Seekins, senior property manager, Akridge Company, and a member of the Building Owners and Management Association, or BOMA; and Ken Grunley, president of Grunley Construction. 

TESTIMONIES OF DAVID WINSTEAD, GSA PUBLIC BUILDINGS 

SERVICE COMMISSIONER; ART TUROWSKI, SENIOR LEASING 

OFFICIAL, JONES LANG LASALLE; GAIL SEEKINS, SENIOR 

PROPERTY MANAGER, AKRIDGE COMPANY, AND MEMBER 

OF THE BUILDING OWNERS AND MANAGERS ASSOCIATION 

(BOMA) INTERNATIONAL; AND KEN GRUNLEY, PRESIDENT 

OF GRUNLEY CONSTRUCTION 

Ms. NORTON. I am pleased to hear all of your testimony beginning with Mr. Winstead. 

Mr. WINSTEAD. Madam Chairman, thank you again. I am David 

Winstead, Commissioner of the Public Building Service. I am 

pleased to be before the Committee again. I thank you for the hearing on April 17 on Greening the NCR, and your continued oversight and interest in our business housing Federal agencies. 

I am also pleased to submit written testimony for the record 

which covers in detail a lot of the issues you raised and some of 

the concerns you raised, and I hope the Committee will take consideration of the written testimony. I am also pleased to be on this 

panel with a lot of our private sector partners. Everybody on my 

left is actually engaged in one way or another in delivering lease 

space or building programs or modernization for GSA. 

As you mentioned, Madam Chair, GSA leasing and construction 

is, in fact, governed by many statutory and regulatory requirements that do not apply to similar private sector transactions and 

are much more constrictive. GSA must comply with a really comVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
6 

prehensive list of laws and executive orders, some of which are contradictory. For example, urban policy versus rural requirements. 

We also have the Davis-Bacon Wage Act; we have the National 

Environmental Policy Act; we have the Competition and Contracting Act; we have the Small Business Act and other energy, environmental, historic preservation laws, orders and regulations. So 

this list of important laws and regulations, executive orders, OMB 

circulars, and other mandates has a really significant impact, as 

you noted, on our leasing and construction program, in particular, 

the time it takes to secure a lease or construct a building and the 

time it takes for customers to budget for space. I want to talk a 

little bit about some of the challenges and concerns you mentioned 

and the initiatives that we are taking and have taken to make the 

process more effective. 

In our capital program, which is substantial, 3 billion in the current year, there are a number of challenges faced by the construction industry in general that have had serious impact on GSA in 

recent years. I think, in former testimony to this Committee, I have 

mentioned that we have had over a 20 percent increase in construction costs over the last 4 years and this has impacted our bidding 

process. This includes the volatile market and the competition for 

construction, which has been very severe in southern California 

and the southwestern part of the country. 

Also, security requirements have presented additional challenges 

and impact construction two ways—obviously the background check 

of contractor workforce that is doing renovation in our buildings, 

and Ken Grunley is here and can speak about that in spades, and 

also the physical security of our building. The HSPD-12 requirements are administratively complex and delay access to work sites; 

getting crews for multiple crafts cleared through the program is 

challenging and time consuming. 

We have seen that with EEOB, we have seen that with the Department of Interior Renovation, and especially when we have 

phased construction such as the Department of Interior where crew 

sizes and composition vary during construction time periods, or the 

security of EEOB in terms of access to it. The physical security of 

buildings includes such items as perimeter security, obviously blast 

resistance glazing, structural design, and progressive collapse. All 

these are quite unique and require costly investments by the Federal Government through GSA, as well as time in terms of getting 

bids and being able to proceed on those. 

Besides these challenges, I would like to highlight some of the 

following initiatives that we have taken to improve our construction program in addition to ones detailed in my written statement 

and these include strengthening collaboration with industry. On 

April 17th, I mentioned to you, Madam Chair and the Committee, 

that I would be reaching out to the DCBIA, ULI, NAIOP and the 

other—BOMA and the others, to try to make sure that our requirements for green leasing, which are now on the table, are understood by them looking ahead. 

But we are using new technology such BIM technologies in design and construction of our building and new approaches to project 

delivery. We now use over four approaches to project delivery in 

addition to our emphasis right now on the CMC approach, which 

7 

I know has caused some issues about staffing with some of our contractors. Industry collaboration is key, and this panel, I think, reflects that. To find ways to better collaborate with industry partners and to build a common understanding, last fall we convened 

a building opportunities conference here at the NCR with representatives from the AIA, the Building Owners and Management 

Association as well as the Association of General Contractors. 

I would mention we do continue to have a strong commitment to 

design excellence. Our design and construction peer program is still 

very much intact. We develop a robust design and construction 

peer review, which does take time, and as you all probably know, 

this Committee has seen 2-year cycles for design excellence to be 

applied and construction excellence. 

I have taken a lot of action over the last 2-1/2 years in response 

to direct concerns expressed by our biggest clients in the construction area, the courts, the FBI, the DHS, and the construction board 

of protection who have pulled me off very early in my tenure and 

said design excellence is great, but it is taking too long. We have, 

in fact, selected a new AC for construction excellence who is taking 

a major new approach to shortening the design cycle. In some cases 

with a new border station, like the Adonna border station in Texas, 

we have cut the design time from 2 years to 1 year. 

We used design-build to get it in place earlier, and CBP appreciated that. The courts had a similar concern. I heard it from the 

top administrator of the courts. So we have been reviewing our 

projects for design quality, looking at shortening design and construction cycles, looking at cost realism, because obviously with the 

market escalating at 8 percent per year in costs, we have to constantly be looking at the prospectus level and make sure our management timeline is focused. Now I know you have mentioned concerns in that regard and we do have some. 

The private sector has, in fact, and some of these panelists might 

underscore that, expressed concerns about the construction charging undue burden on some of their general contract needs, and I 

think we are working with the construction management association in BOMA and looking at approaches that we can more effectively staff out in terms of our management of the construction 

versus the contractor. We are also looking at new approaches in 

construction estimating. We are working closely with the design 

and construction community to help us re-examine our cost estimating and our bench marking. We have had major challenges by 

the courts, for example, in the benchmarking that we have applied 

to the former LA courthouse proposal. 

We have minimized the impact of market conditions on the construction cycle time. We have performed market surveys. We have 

met several times in San Diego to assess the nature of that market 

and our proposed construction approach for the San Diego courthouse, and that has yielded a lot of regard and a lot of good suggestions back to us. 

New technologies are part of the solution to get a more cost effective approach to construction. One of these, perhaps leading that 

area, uses the building information system approach, the BIM approach, which is a new technology of 3-D visualization of the building showing not only the structural side, but looking at the elecVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
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trical and HVAC systems and looking at buildouts requirements. 

Earlier this week, I actually talked with some Canadian counterparts that are vested with us, as well as other countries, on standardizing that BIM approach which we think will create more competitiveness in bidding for projects. I also met earlier this week 

with HVAC engineers who see value with a BIM because it does 

lay out those specifications early on in the project and visually 

shows how they will fit together. 

Consistency in design and planning is still a major focus. We are 

taking steps to be more consistent nationwide. My deputy behind 

me, Tony Costa, has spent a lot of his time ensuring that our policy 

guidelines from headquarters are consistently applied throughout 

the 11 regions so, again, contractors dealing with us have the same 

protocols in place to respond to bids and to build these buildings 

for us. One major issue, which I will say I still think we need to 

focus more on, is project management training and certification. 

If you were to ask me, ‘‘what is our major problem in terms of 

contract and project management?’’ it is the lack of regional and 

consistency in approach and experience. We have very committed 

project managers in all 11 regions, but project size varies between 

a courthouse and small border station addition, or a buildout, or 

just a T and I improvement in a standard building. 

They vary enormously and, quite frankly, with retirements in the 

Federal Government, we are losing people like Art Turowski, who 

have decades of experience. We have to focus on training, and we 

have to lean on the BOMAs and other industry groups for that 

input. 

I would also mention that there are other initiatives that I think 

will address some of the problems you mentioned in your opening 

remarks, Madam Chairman, and that is that we are rewriting the 

GSA standard clauses. We have a library of scope of work templates that we are reviewing right now and we are looking at various project types and construction options and contracting options. 

We think these tools will make our project solicitations more consistent, both for our needs in safeguarding the expenditure of Federal Buildings Fund money as well as the ability of our private sector partners, on our left, to respond to those. 

We will continue to engage with industry partners in reviewing 

and commenting on these templates to make them as effective as 

possible in promoting team work, in collaboration, ultimately saving time and money for the private sector as well as the Federal 

government. 

Just some comments on leasing, because we have some continued 

challenges in that regard. You have mentioned several. Nationally 

now our lease inventory is 51 percent of the Federal Building 

Fund—175 million square feet of space. We are now at 49 percent 

government-owned space. We have now more leased space than 

government-owned. Since 1965, we have seen 400 percent increase 

in the amount of leased inventory with GSA from 43 million square 

feet to that 175 million I mentioned. 

As you know, in the fiscal year 2009 Congressional Budget Justification, we are increasing 7 percent more and leasing up to 187 

million square feet. This increase has created stress on the program. We have also lost people, such as Art Turowski, who have 

9 

decades of experience, but we have Francesca Ryan and her team 

at NCR, and Bart Bush that are there to pick up the reins and continue to address the needs. 

But we do hear from our customers. We do hear from contractors 

that inconsistent organizational structures from the past, and quite 

frankly, 10 or 15 years ago, the governmental philosophy of GSA 

was to really decentralize into the regions and decentralize in 

terms of management or leasing in the NCR from centralized to essentially a service center orientation. We feel that we need to bring 

back more consistency through the regions by more protocols and 

direct policy from Central Office. 

Specifically, we set up an independent office about 1 year ago, 

the Office of Real Estate Acquisition in Central Office, to oversee 

leasing policy at the national level, and the regions. We are completing the trend towards creating new leasing divisions at NCR 

with clear lines of authority and accountability. And in fact, we are 

holding a workshop on June 17th next week and 18th with PBS 

senior managers from around the country to again review and 

make sure this implementation is done as quickly as possible. 

In order to meet the increasing needs for leased space, and to 

strengthen our capacity and leverage the expertise of the private 

sector, as you well know, and I know this Committee had a great 

deal of debate on this. Three years ago, we awarded the National 

Broker Contract in 2005. That effort is still well underway. We 

have had a GAO report on it. We actually implemented the 11 recommendations of that GAO review. Private sector lease support 

now is very, very strong from our contracting firms, one of which 

is on my left, assisting us in efforts to standardize our leasing practice nationwide and provide more support to our customers and 

government tenants. 

As of March 31 of this year we have tasked our four national 

broker contractors with 1,500 lease acquisitions totalling about 30 

million square feet. These leases represent a contract value of $2.5 

billion. Usage of this contract have continued to increase. Our goal 

for implementation and utilization of the national broker contract 

is 70 percent. 

Madam Chair, I will tell you that usage is not consistent between 

the regions. We have some regions that still only have 20 percent 

utilization, only two, but they are being driven to increase that utilization. Quite frankly, we have seen benefit not only in the rent 

credit, but also in terms of the market rate yields we are getting 

on our leased inventory. We are targeting 9 percent below market, 

and with the National Broker Contract, in some cases, we are getting 11 percent below market rates. 

I think it is also significant that our brokers are not paid by the 

GSA Federal Buildings Fund. Instead, they receive market-based 

commissions from successful lessors with GSA receiving commission credit, as you know, from the brokers paid to offset some of 

the costs for our rent of our tenants agencies. These credits today 

have generated in the pipeline $33 million in direct savings to our 

clients customers in the form of reduced rent. 

In addition, we have had 882 additional lease acquisitions in the 

pipeline, which would increase that recent aggregate rent credit to 

almost $77 million when they get in place. We have achieved rent 

10 

rates, as I mentioned, that continue to be below market. In order 

to succeed, I think, with our leasing program, we not only need to 

leverage this National Broker Contract, we also need to grow our 

inhouse leasing expertise. I was talking to Art before this about the 

attrition we have had in our leasing realty specialists. We do not 

have uniform competency through all of our regions. But I will tell 

you that in the last 4 years, even with the National Broker Contract in place, we have had the need to add about 10 percent more 

leasing specialists. We are now in the range of about 526 leasing 

specialists through our 11 regions nationwide. 

This also continues to be a challenge. We have a retiring workforce some 50 percent over next 5 years. We are recruiting, training 

and trying to retain people of quality. I will tell you that I am have 

proud of my 2-1/2 years at PBS in watching how the Federal government, particularly the team at PBS, trains and brings in new 

recruits and has a mentoring program and ALD training, and it 

really is a team spirit across the country, and I think that does 

help us to get kids to be interested to come into GSA and to become 

leasing specialists or project management specialists. And we have 

wonderful co-op programs with universities. I happen to be on the 

board of John Hopkins real estate program. We have recruited several graduates of that program that have MS’s in real estate. So 

while I do think that we are losing talent, we are doing our best 

to attract new talent. 

One of your major concerns in your opening statement again was 

solicitations for offers and the issues of how long that is taking and 

some of the concern and burden that puts on the private sector 

offerors in the National Capital Region. We have 800 million 

square feet here. We have 53 million square feet leased, and the 

market is difficult. I went to the real estate round table about 2 

months ago and listened to the top CEOs in the industry talking 

about the credit crunch impact on commercial development. 

We are very focused on trying to make that lease, the SFO process more transparent and efficient. We have, in fact, looked at revisions to the SFO process to make them better organized so that an 

offeror can review the first section to determine whether they want 

to pursue an offer before they are spending $100,000 or more to do 

so. We also reorganized to recognize the normal, essentially chronological events in lease procurement between offer, award, design, 

construction and administration. We have put a great deal of effort 

into this. 

The work is not completed. I think Bart Bush and Francesca 

could comment and provide the Committee further about what we 

are doing in NCR. But this is a comprehensive and thorough program, and I will tell you that we hope the new SFO will be more 

user friendly, particularly during the bidding process for offerors, 

and as well as in a life cycle of a lease. 

Lastly, I will tell that another major concern is security requirements. It is not surprising that we have varied between level 1 and 

level 4 security requirements. There is a need for greater building 

setbacks, glass resistance, building access requirements, as well as 

challenge of co-location of tenants at work places where we are 

leasing space but do not have the whole building. I think we can 

better capture some of these security costs in terms of our leases 

11 

and make them more transparent to the private sector, and we are 

developing—and have developed—a security unit price that will 

allow an offeror to review the security requirements more easily in 

the lease and determine and categorize those costs. 

I will tell you that I am concerned about the impact of the security requirements. And I am concerned about the ISC standards 

that are reflected in our lease portfolio and offers. We are going to 

continue to try to make sure that that does not impact on the competitiveness of offerors in the region. 

Lastly, I will talk a little bit about the concern raised about the 

time it is taking to clear leases and get them in place. We do have 

a unique challenge in terms of those requirements that I went 

through earlier, the sheer size of the portfolio in the NCR is huge. 

We have 10 percent annual expiration of leases and resolicitations. 

But both NCR and this new Office Of Real Estate Acquisition are 

addressing and trying to create more efficiencies in lease acquisition. I know that Art only left us 6 months ago, so a lot of this was 

on his watch, but we are committed to fixing programs and trying 

to reduce delays and trying to make sure that we are commencing 

rent payments and processing invoices timely. I can’t tell you that 

in all regards we have done that in a timely manner. 

Some of the hold over leases and some of the closeouts of leases 

are taking longer than I am comfortable with. And Bart knows 

that, as well as Tony and the rest of the ARAs. 

It is unacceptable really to cause unnecessary delays for the contractors bidding on these leases. We do hope that some of this improvement will improve the tracking, and some of the efforts underway will improve basically the cost effectiveness for people to 

bid. 

I would also mention that we are, on the construction side, we 

are looking at lease construction clauses nationwide and trying to 

make sure that they are more uniform. We have recently had a 

lease construction round table in June, I guess it will be next week, 

and we are also looking at improving our ability to get more uniformity in competition. 

I will tell you several of the courthouses in the southwest had 

very few bidders, and I was very concerned about that. And part 

of it obviously was the construction process as well as the competition the DOD and other builders in that region were creating for 

us, and we did not have the bidding that I would like to see. 

Anyway, I do want to conclude by just saying I hope the statement deals with some of the issues you mentioned in the beginning. I really do thank our colleagues on the left for their 

partnering in the many ways that they do through the leasing construction as well as BOMA industry and their support in working 

with us. And I would be pleased to answer any questions that you 

might have. Thank you. 

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

Why don’t we go right on down. Ms. Seekins. 

Ms. SEEKINS. Good morning Madam Chairman and Members of 

the Subcommittee. Thank you for holding this important hearing. 

I am Gail Seekins, senior property manager of Akridge, a full service real estate firm in Washington, D.C. I am here today representing the Building Owners and Manager’s Association InterVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00019 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
12 

national. First and foremost, I would like to say that GSA is one 

of BOMA’s largest and most valued members. Our comments today 

are intended to highlight improvement opportunities that will help 

the Federal Government and the private sector companies that 

build and lease to government agencies and better streamline the 

processes to save money for all parties involved. 

Our comments are a compilation of feedback we receive from a 

number of our member companies and are not intended to highlight any specific project-related concerns of my company or any 

other. 

We would also like to compliment GSA for ongoing cooperation 

with BOMA in seeking mutually beneficial changes to construction 

and leasing practices. Scoring rules are at the top of the list when 

asked to identify problematic aspects of doing business with the 

government. To avoid the harsh accounting treatment required for 

capital leases, GSA writes only operating leases. The Office of Management and Budget offers the rules for operating leases and 

OMB’s circular A 11. 

OMB’s rules are generally more stringent than the equivalent 

private sector. Scoring rules can contort lease procurement and increase costs in the following ways. GSA is prohibited from leasing 

government land and leasing back improvements even when they 

own acceptable sites. GSA is prohibited from outleasing underutilized buildings which could be renovated and leased back. Unique 

features required by the government must be paid outside the rent 

in a lump sum. Longer lease terms that would reduce rental rates 

are often prohibited by A11 rules to avoid capital treatment. Yet 

leasing for 20 years yields a lower rate than 10 to 15. 

Lease to ownership options are not allowed ruling out the cheapest financing options and lowest rates. 

Let me give you a specific example in FBI build to suit leases. 

Under present scoring rules, the rental rate is based on a class A 

office building with no consideration given to specific security and 

construction requirements for the FBI which can increase the cost 

up to 20 percent. 

The prospectus real estate rate is often not enough to complete 

this job without a lump sum payment, frequently in the millions 

of dollars for security that FBI and similar agencies simply do not 

have in their budgets. Discovering this at the time of bid evaluations causes problems and costs for everyone. 

We believe GSA should make solicitations for offers net of real 

estate taxes. When a project is bid, real estate taxes are unknown, 

so local government assessors and project bidders guess. Every bidder will guess a little differently, making it impossible for GSA to 

compare apples to apples. Many SFOs include square footage requirements for specific rooms and offices without providing additional detail of actual dimensions required. SFOs should be as specific as possible to alleviate the possibility of a building being designed and constructed that does not meet the agency’s or system’s 

furniture requirements although the square feet requirements were 

met. 

Generally, the Federal Government is perceived by the office 

building industry as terrific tenant for all the obviously reasons inVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
13 

cluding creditworthiness. The use of outside brokerage firms over 

the past several years has been a positive development. 

But I must highlight a few frustrations as well. Prospectus rental 

rates often approved well before lease procurement have not kept 

up with rapid increases in construction materials and labor costs. 

In addition, they may not take into account differentiating features 

such as proximity to mass transit. This may preclude commercial 

landlords from competing for GSA leases who might otherwise do 

so. Government leases do not reflect private sector practices and 

many clauses are not yet landlord friendly. Over time one learns 

which clauses get enforced and which don’t. However, lenders look 

at all the clauses when assessing risk and assigning interest. 

Clauses that are not used do cost government. For example, there 

are no holdover provisions in a government lease. But the government can introduce condemnation, which means a government tenant cannot be evicted. 

While this makes sense due to the nature of government functions, leases should have a hold over provision with a rent escalation to include, encourage GSA to reduce or eliminate hold overs. 

With the pending impact of BRAC relocations and associated 

delays the hold over issue will become more intense in the years 

to come. 

Termination without notice and restoration clauses may not be 

typical but are used in some regions. When used, they should be 

aligned with industry standards to make them understandable by 

the building owner community increasing competition for GSA 

leases. Additionally, some clauses serve no benefit while costing the 

government in the rental rate obtained for their use. An example 

is clause included in builder suit leases already alluded to allowing 

the government to buy a building at market rates at any time. Although the government does not exercise this clause, lenders see it 

as a risk and penalize the project for it. 

Personnel turnover is inevitable in any entity, public or private. 

However it sometimes appears that GSA reassigns its staff to positions where they have limited experience. The idea that anyone can 

do anything is not correct. When building owners and managers repeatedly start over with new people, investing time and procedures 

and becoming acclimated, it causes frustration, and more important, lack of productivity. 

We recommend that GSA consider modifying its excellent intern 

program to include more technical training in leasing and facilities 

management. 

In addition, the government is unfortunately notorious for slow 

payment processing. Delays in payment for work orders, operating 

expense increases and real estate tax payments are not only frustrating but costly to the government due to the mandate to pay interest on delayed payments and to the landlord in terms of reduced 

cash flow. Delays in processing leased documents are an issue. 

Commercial landlords still report that it may take 3 to 4 months 

to receive an executed lease from GSA after the landlord had 

signed. Delays associated with lease amendments or modifications 

are even longer. We know that GSA is working to address this 

issue and we are appreciative of these efforts. 

14 

In summary, improvements in making GSA leases more in tune 

to industry standards will not only help the private sector but also 

increase competition for government leases. And that is good for 

everyone. 

We thank the Subcommittee for holding this important hearing 

and look forward to working with Congress, GSA and other public 

and private sector partners to achieve our mutual goal of improving the construction and leasing process to make it more effective 

for GSA and their private sector partners. Madam Chairman, 

thank you very much. 

Ms. NORTON. Thank you, Ms. Seekins. 

Mr. Turowski. 

Mr. Turowski. Thank you, Madam Chairwoman. It is a great 

pleasure to be here today to discuss means of improving the GSA 

leasing and construction process. 

Through a rewarding Federal career, I have had a 37-year association with the GSA leasing program. My work with GSA has 

been in several GSA regional offices and at GSA’s headquarters. 

During that time on watch, I witnessed and was part of many 

changes and became intimately familiar with the constraints. Most 

recently, since retiring from GSA’s national capital region and joining the firm of Jones Lang LaSalle in its government investment 

services group, I have acquired the added perspective of building 

owners in the GSA leasing process. 

GSA’s leased inventory is large by any measure. Most of the 

leased transactions which comprise it are undertaken with efficiency, transparency and user friendliness. However, it has been by 

observation that among GSA which are larger, more valuable or 

merely complex, this is often not the case. Let me share with you 

the reasons why this is and how this is apparent in the private sector and what some solutions might be. 

First, the GSA lease process has been expanded in recent years. 

Some examples of added stages in the process are more rigorous acquisition planning, better formulated location decisions, various 

compliance checks, and the creation of a new set of documents 

binding Federal agencies to their obligations under GSA leases. 

While these process additions represent laudable objectives, GSA 

has yet to minimize their impact on the procurement process, most 

notably the impact these new steps have on procurement duration 

and project completion timelines. 

Second, and some years ago, GSA implemented new ideas in its 

organizational placement of leasing. Their goal was to achieve a 

greater degree of responsiveness to their client agencies’ lease requirements. An unintended consequence though was to lose clear 

lines of knowledgeable leasing accountability up to and through 

management levels in the leasing program, and as importantly as 

well back down again into the leasing organization. 

Third, GSA has been challenged in its ability to accurately ascertain their client agencies’ requirements early in the lease procurement process. By launching procurements without a complete picture of their needs, GSA has negatively impacted the perceived 

commercial reasonableness of GSA transactions in the marketplace 

and added to the perception of the government as a challenging 

transactional partner. 

15 

The lengthy budget cycle is clearly one reason for disconnect between GSA and their client agencies when it happens. But it is 

clear that greater attention is needed to smoothly manage transactions in a manner that will satisfy GSA users, provide the best 

price to the government, and encourage the continued participation 

of private sector partners. 

Fourth, and this has been echoed already, or I will echo what has 

been said already, in staffing its leasing operations, GSA faces 

major resources constraints. In the personnel arena, a combination 

of factors have had significant impact, including a long period of essentially no hiring of new personnel, a wave of retirements today, 

and difficulty in dedicating the significant time and expertise required to bring new hires up to a full level of leasing proficiency. 

Fifth, and we have heard this before, the volume and scope of 

GSA’s required lease documents significantly exceeds those for 

lease transactions in the private sector. Again, though often well 

intended, this added documentation adds to the perception of the 

government as a difficult partner in private sector transactions. 

Process additions, a lack of sufficiently trained personnel, and inadequate communication between GSA and its client agencies have 

all served to complicate the GSA leasing process. These weaknesses 

have become readily apparent to the private sector and manifest 

themselves in many ways, including an exceptionally high numbers 

of lease holdovers and extensions, short term extensions, increasingly frequent mention by GSA representatives of lease hold condemnations as negotiating leverage, and from the nationwide perspective of a service provider to the industry, each of GSA’s 11 regions handles their real estate transactions differently, and therefore in practice there are functionally 11 different ways GSA performs real estate transactions. 

Also manifest in more project false starts as a result of rescoping, 

prospectus shortfalls and reasonably foreseeable site deficiencies as 

well as significant rent arrearages and lease execution delays. 

There are solutions to these issues. In fact, I am sure none of the 

issues I have raised comes as a surprise to GSA. And I was leaving 

GSA I understood there were moves afoot to take corrective actions. 

But most importantly, a rigorous real estate oriented training 

program is needed for GSA leasing personnel. A coherent top down 

leasing management structure is needed to strengthen accountability, better manage transactions and maintain an action bias. 

GSA should take steps to simplify its process and undo or better 

adapt well meaning but cumbersome procedural steps that increase 

organizational and transactional inefficiency. A thorough review of 

the submissions, certifications and requirements of lease procurements should be undertaken by GSA with the goal of streamlining 

and simplification. 

These, Madam Chairman, conclude my remarks and I will be 

pleased to address any questions or comments by you or Members. 

Ms. NORTON. Thank you, Mr. Turowski. 

Mr. Grunley. 

Mr. GRUNLEY. Good morning, Madam Chair Norton. I am 

pleased to be here today to share my experiences with GSA with 

your Committee. My name is Ken Grunley, and I am president and 

16 

owner of Grunley Construction Company. We are a general contractor located in Rockville, Maryland, and the majority of our 

work is in Washington D.C. or the surrounding areas. We are a 

family-owned business employing 280 employees and annual revenues of approximately $300 million. 

Sense our inception in 1955, our business is primarily focused on 

serving the public sector. I personally have 35 years of experience 

working on GSA projects. Grunley Construction is very proud of 

our long relationship with GSA and many projects that we have 

successfully completed as a team. A few of these projects are the 

National World War II Memorial, the Ariel Rios Building, which is 

EPA headquarters, the Eisenhower Executive Office Building that 

we are presently restoring, and my personal favorite was the renovation and restoration of the Blair House known as the President’s guest house that we did in 1986 when I was quite a bit 

younger and a very exciting project for me. I have also been a peer 

for GSA’s design and construction excellence program and have 

traveled all over the country being involved in ongoing projects and 

future projects for GSA. 

From our inception in 1955 until 1995, so a period of about 40 

years, the bid process remained relatively simple. You picked up a 

set of drawings, you put a bid together, you turned it into a bid 

room, and the only guarantee that you were going to complete this 

project was a bid bond from a surety. The bids were open publicly. 

And the low bidder was typically awarded the project. And it 

worked fine for years, however, although the bid process remained 

very simple, the construction process became more complicated, 

and it was time for change. 

I want to go through three changes that became evident to us in 

how they impacted us. The first, and other people have shared this, 

reduction in GSA inhouse staffing assigned to the projects. The reality began in the 1990s when the size of the government workforce 

was under pressure to shrink and it continued for a variety of reasons that has led to the present situation where all the projects are 

under the leadership of quality project, GSA project execs and 

project managers, however the majority of the staff involved in the 

day to day oversight of both construction and paperwork are contract personnel as I refer to as construction managers as agent. 

GSA has managed this process well by employing qualified contracting officers and retaining construction managers as agent 

firms that understand GSA’s mission. This approach is necessary 

in order to assure the government that construction activities are 

being performed and documented in accordance with the contract 

requirements. 

However, what seems to have resulted from this approach is an 

increase in general contracting staff necessary to be responsive to 

the CM staff assigned to the project.RPTS KESTERSONDCMN 

HOFSTAD[11:56 a.m.] 

Mr. GRUNLEY. My sense is that we may have taken this approach 

to a point where there may be a loss of efficiency; improvements 

can be made. I was much more concerned with this issue 10 years 

ago in the mid-1990s when I first saw it. And I think GSA has 

done a wonderful job over the past decade in making sure they pick 

the right teams for these projects. 

17 

During the late 1990s, the bid process changed drastically to use 

the best value procurement. In all the years I have been working 

with GSA, this is certainly the most dramatic change and probably 

the best change. And, simply, it went from low bid to best value 

being a combination of price and past performance. 

GSA has kept the process extremely simple. The technical proposal usually has four parts, which would be past performance, key 

personnel, a project schedule, and then a combination of smallbusiness plans and apprenticeship plans. They want to hire a construction company; they do not want to hire a marketing company. 

And they have made it very clear that they don’t want lots of fancy 

pictures and graphs. They want the facts, and they just want you 

to take the test. So you take the test the way it is done, and they 

have made it very easy for the industry to adapt to their process. 

There are some obvious advantages of best value procurement. 

General contractors now compete as a construction professional. 

GSA is not forced to award to companies that have a long history 

of claims and poor performance. General contractors are competing 

against quality firms. A much more collegial relationship between 

the general contractor and the architects and the tenants and the 

GSA. And the quality of the projects are certainly better, and there 

are certainly less claims. 

I believe this approach created a much more open and transparent environment between GSA, the contractor and the design 

team. And it was really sort of the first step in an integrated approach that we are using today in the Government sector. 

The third change that we have really seen is the application of 

design-build and construction management at risk. CM at risk is 

still in its infancy within the Federal Government, but GSA is actually a frontrunner in using this approach. These methods of procuring and delivering building design and construction are found 

on two related precepts: integrate the team, and the earlier the better. 

Without getting into all the pros and cons of design-build versus 

design-bid-build versus CM at risk, it is important to note that 

these added methods of delivery significantly alter the contractual 

relationships between the three key participants. 

GSA has put all these methods, along with variations, into what 

I call their tool box. GSA makes its decisions to use traditional design-bid-build, design-build, and CM at risk on a project-by-project 

basis. In recognizing that the this type, location, schedule and 

other project-specific requirements need to be assessed in order to 

determine the most advantageous delivery system, GSA has recognized the best value for the Government. 

In conclusion, I need to say that what I believe makes GSA special is they have their own culture. And although they are operating all across the country in 11 different regions—and I have 

traveled those regions—you get a feeling of fair, honest and open 

communications. They are open to newcomers, for new companies. 

They have fairs. They advertise their projects very well. And they 

give very clear, concise direction on how to submit proposals for a 

GSA. 

They certainly have a business-like atmosphere and always looking for new ideas through the business community. They are conVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
18 

stantly having meetings at the various construction organizations 

are invited to, just to come and talk about changes, what they are 

doing well, what they could improve on. 

The last item for me, as a businessman, every time we bid a job 

I do risk millions of dollars. And in the best value procurement, 

GSA is certainly now knowing who they are buying services from. 

But what is important for me is that GSA is so consistent that I 

really know who I am selling to, which impacts our price dramatically. You know, all contractors are going to weigh risk and reward, 

and GSA has truly taken the risk away, a large piece of the risk 

away, from contractors. 

Thank you. 

Ms. NORTON. Well, I thank you very much, Mr. Grunley. 

All this testimony has been very, very important. Even as you 

spoke, I have been having conversation about what some of you 

have said because of its implications for what we want to do. 

Let me ask first Mr. Winstead a question. 

First I should say that not only in my opening statement but I 

think, Mr. Winstead, you have heard at the table that people who 

deal with GSA, respect its expertise, inside GSA we have heard 

some problems about staffing and about decentralization, I will get 

to. But everybody understands that GSA is the center of whatever 

real estate expertise we are going to have, and they can handle so 

much of it that you have learned to do it well. 

The problem here—and that is why we want to get to what it is 

that we can do to improve the processes, because we hear about 

them all the time. I mean, you can give an overall—these people 

seem to know what they are doing, and then you continue to hear 

all kinds of issues that come up. You need to look at the entire 

process. 

For example—and understand this Subcommittee is here to help, 

including changes in statute and prospectus, if necessary. Mr. 

Winstead says it right at the top of his testimony, on page 1, and 

cites the numerous laws and regulations and executive orders and 

OMB and the rest of it. 

Now, this is the Government. We recognize that a great deal of 

that is necessary. Fraud of any kind in Government work gets a 

big Bronx cheer, and it simply has to be avoided. And the way you 

avoid it is layer on layer on layer that reduces risk to the Government, a risk that the private sector is willing to take. Because in 

taking that risk, the private sector in fact saves money. The Government can’t do that. 

At the same time, I have to ask you whether you believe all of 

the regulations, laws, executive orders, OMB circulars and et 

cetera, things which you cannot change, do you believe all of them 

are necessary, Mr. Winstead? 

Mr. WINSTEAD. Madam Chair, you know, a lot of them are statutory requirements. So the question—— 

Ms. NORTON. That wasn’t—I know that I am—me, Congress; you, 

agency. 

Mr. WINSTEAD. Right. 

Ms. NORTON. But Congress is not going to know what to do if— 

and that is why we have assembled a whole panel here—if we 

19 

never hear from the agency that there is anything that Congress 

can do, that Congress can change. 

And as you are well aware, Mr. Winstead, Congress hasn’t looked 

at this process. We don’t know diddly-squat about this process. 

So I am simply asking you—I am not saying we are going to 

change the laws or that we are going to change the regulations. 

But I am asking you, can you think of any of these that, over time, 

may have become obsolete or may no longer be necessary or may 

be too cumbersome to be useful today? 

Mr. WINSTEAD. Well, I do think that that would be very important for us to look at. And I think what we are doing both on the 

national level to look at those requirements and to figure out better 

what can be—— 

Ms. NORTON. You know what I am going to ask you to do, Mr. 

Winstead? If you have been there 2 years and you have not experienced enough frustration to be able to name some when you have 

a Member of Congress here willing to give help, I am going to ask 

you to get me, in 30 days, some that you think I ought to look at, 

even if you are not willing to believe they should be changed. 

This should be asked of the rest of the panel, who may not feel 

similarly constrained. Are there specific, I mean, specific laws, regulations—understand that the burden will be on you and, if I go 

about trying to change it, on me to show why this or that law or 

regulation or executive order or whatever is no longer necessary or 

is inconsistent. 

Remember how we enact laws, one on top of the other. We don’t 

go back and say, ′′Oh, that law isn’t needed because of something 

we did 50 years ago.′′ So I kind of depend on the people who use 

laws, regulations, executive orders and the rest to tell me the 

truth, the whole truth. 

So anybody else have something to say about specific laws or regulations you would like to see changed and why you think we could 

change it without increasing the risk or harm to the Government? 

Mr. GRUNLEY. Madam Chair? 

Ms. NORTON. Any of you? 

Mr. GRUNLEY. The Davis-Bacon wage rates, which I am actually 

in favor of—— 

Ms. NORTON. You say you are? 

Mr. GRUNLEY. I am in favor of the Davis-Bacon wage rates. 

Ms. NORTON. That is good, because that is not about to change. 

Mr. GRUNLEY. But the reporting I find to be obsolete. 

You know, we all need to pay minimum wage, but none of us report to the Federal Government that we pay minimum wage, or we 

don’t certify we pay minimum wage. The Davis-Bacon reporting is 

a paperwork nightmare. Our company has at least eight people 

that full-time do nothing but collect certified payrolls, check them 

to make sure they are correct and turn them into GSA. And GSA 

also has people that are also reviewing what we turn in to make 

sure they are okay. 

And, to me, competent contractors should just be able to certify 

that they are paying the Davis-Bacon wage rate, and we will save 

lots of trees. 

Ms. NORTON. Well, I find that is a very useful comment. You say 

they look to see if, in fact, they are paying the rate. Now, this is 

20 

complicated, look at the market rates, et cetera. Is it some kind of 

surveys of others that have to be done? And how complicated is the 

process of looking to see whether you are paying those rates? 

Because this is a very useful comment. 

Mr. GRUNLEY. Each specification that we bid on has the most 

current Davis-Bacon wage rate. 

Ms. NORTON. Where do you get that from? 

Mr. GRUNLEY. GSA issues it in the request for proposal. So the 

rates exist for each project. And what I am saying is that we have 

to keep track—we collect them from all of our subcontractors. 

Ms. NORTON. So they tell you what is the rate? 

Mr. GRUNLEY. Yes. 

Ms. NORTON. You look to see if the rate is being paid. How does 

that get complicated? They give you a number; you look at a number. I am missing something. 

Mr. GRUNLEY. If a typical project has 50 subcontractors, they 

have somebody in their office sending our firm their certified payrolls, which lists every employee, how much money they were paid, 

how many hours they worked during the week, their gross pay, 

their net pay. We check them to make sure they are correct, and 

then we send them to GSA, who then checks them. 

Ms. NORTON. Now, does GSA then go through the same process? 

Now, you have already checked it to your subcontractors. Does 

GSA go through the same process, Mr. Winstead? 

Mr. WINSTEAD. Madam Chair, the Davis-Bacon threshold was recently raised from 1 million to 2 million, not 2,000. We want it 

raised—I apologize—we would like it raised. That would help. 

Again, as a suggestion, you asked earlier, but raising the threshold 

would help. It is not 2,000—it is currently 2,000. We would like it 

raised to 1 million to 2 million. 

Ms. NORTON. Raising the rate based on what? 

Mr. WINSTEAD. Based in terms of the streamlining the DavisBacon effort, trying to get adherence to the wage rate, but to raise 

the threshold from 2,000. And it has never been indexed, which 

would help. 

Ms. NORTON. That is interesting. Apparently you have to do it 

up to a certain rate, but GSA’s projects are so large that you generally go above the rate? 

Mr. WINSTEAD. Yeah. And apparently that 2,000 constraint 

makes it unrealistic, very difficult to deal with. 

Ms. NORTON. Mr. Turowski? 

I mean, I don’t understand. I mean, is there redundant work 

going on here between the Government and the contractor? 

All I am asking you, Mr. Winstead, is, do you go through the 

very same process he goes through? Do you check him in some 

way? Do you spot-check him in some way? 

Mr. WINSTEAD. Yes, in terms of the compliance with DavisBacon, we do. 

Ms. NORTON. You don’t go through the same process he has just 

gone through? Do you go back to his subcontractors, do you go back 

to him—— 

Mr. WINSTEAD. No, we have our own market-based information, 

labor wage information—— 

Ms. NORTON. But you have already given it to him. 

21 

Mr. WINSTEAD. Right. So we verify based on their submittal, 

their compliance with the Davis-Bacon rates. 

Ms. NORTON. Well, it sounds to me the same thing is going on. 

Mr. GRUNLEY. What I am suggesting—I don’t believe it needs to 

be done at all if you—again, by law, we all need to pay minimum 

wage if you own a business. But you don’t report to anybody, you 

don’t list all of your employees and show that you are paying minimum wage. So on a Federal construction project where you need 

to pay the Davis-Bacon wage rate, which is in the book, what I am 

saying is for every single employee, so if you have a project that 

has 1,200 employees on it, every week you are getting reports on 

1,200 employees on what they are being paid, that we need to 

check to make sure it is accurate, and then GSA does. And I am 

suggesting that the general contractor just certify that everybody 

on the job has been paid the Davis-Bacon wage rate, and there is 

no reason—— 

Ms. NORTON. You do that for minimum wage? You do that for 

minimum wage? 

Mr. GRUNLEY. You don’t do that for minimum wage. 

Ms. NORTON. I thought you said you don’t do every employee—— 

Mr. GRUNLEY. For minimum wage I am not aware that companies turn anything into the Federal Government on every one of 

their employees. But the Davis-Bacon wage rate is clearly higher 

than minimum wage. 

Ms. NORTON. Yeah, sure. You recognize that if the Government 

were to allow that, that there would have to be some penalties associated with not paying the rate. Nobody would say, are you certifying, that is fine. Would you be willing to incur such a penalty 

if—— 

Mr. GRUNLEY. Sure. If you certify that you are paying the wage 

and then under an audit you are not, it is whatever the penalties 

would be. 

Ms. NORTON. Do you audit, Mr. Winstead? Or do you simply go 

through and cull every—— 

Mr. WINSTEAD. We basically look at the rates in order to certify 

that they are in compliance. 

Ms. NORTON. He has eight employees that do it; is that right? 

Mr. GRUNLEY. Full-time, yes. 

Ms. NORTON. How many do you have? 

Mr. WINSTEAD. I would assume in every region we have—at 

NCR, how many? Bart? 

Ms. NORTON. How often do we find—— 

Mr. WINSTEAD. I can get you that figure. 

Ms. NORTON. How often do we find the contractor or subcontractor is not paying Davis-Bacon? 

Mr. WINSTEAD. I think it is probably fairly rare. But I will have 

to submit to the Committee, you know, how many in our reviews. 

But I suspect it is pretty rare. 

Ms. NORTON. GSA is going to have to—before I decide to have 

the GAO do it, it seems to me a quick audit could tell us whether 

or not this is even a problem. And it may be emblematic of the 

kinds of things you could do. You are not going to change DavisBacon. You weren’t able to change it with 12 years of Republicans. 

22 

You are not going to be able to change it now that the Democrats 

are here. 

So then you go to the next-best thing, and you get to why it is 

so opposed. And it turns out that there are a number of reasons. 

And this is the part of Government I hate. To the extent that the 

reasons on the table have a lot to do with paperwork, that, it seems 

to me, the burden then shifts to Government to show why it needs 

to cost so much to do it. 

So I am going to ask staff to work with GSA to design—I am 

going to have you work with staff to have an IG audit of contracts, 

representative of various kinds and levels of contracts, so that we 

know what we are doing here. This is classically what I would like 

to do. 

If I find there are problems, then I will know the degree of problems and whether there can be changes. At least get those eight 

employees doing something that benefits the economy, if I may say 

so, besides their own paperwork. If we find there are problems, 

there may need to be changes that we aren’t aware of. That is 

a—— 

Mr. WINSTEAD. I would be happy to work with the Committee on 

that. 

Ms. NORTON. Thank you. In 30 days, I want the IG to come back 

here, 30 days from today. Because I am not asking for a whole, big 

audit of everything they have ever done. I am trying to get a snapshot of whether we have a problem here or not. 

Let me ask Mr. Turowski a question. More than one of you has 

spoken about decentralized leasing, which apparently occurred 

sometime in the 1990s. In essence, I guess it is you, Mr. Turowski, 

that says you have 11 different kinds of leasing practices being 

practiced in your regions. 

Mr. TUROWSKI. GSA’s regions. 

Ms. NORTON. Excuse me? 

Mr. TUROWSKI. In GSA’s regions. 

Ms. NORTON. In GSA’s regions. 

Mr. TUROWSKI. Right. 

Ms. NORTON. I would hate to take a close look at that one, because I can’t—the first thing I have to ask you, Ms. Seekins and 

Mr. Winstead, on that one is, what is to assure the Government 

that there is uniform adherence in policy, in national policy, if, in 

fact, there are 11 different leasing regions and no centralized leasing expertise of the kind there was before it was decentralized? 

I mean, in terms of—while all these may differ, the notions of a 

negotiation strategy, time frames that should be expected region to 

region, how does GSA know that national or congressional policy 

and regulations are being adhered to if people are going off in 11 

different regions of the country as their own leasing offices? 

Mr. WINSTEAD. Madam Chair, the point about consistency and as 

well as enforcing the leasing policies in the stages of the lease, facing program management, pipeline, workplace requirements, development, some of these things are, in fact. I will tell you we have 

centralized that effort in terms of a new office, as I said, about a 

year ago, because of the growth in leasing, because of the amount 

of activity—— 

Ms. NORTON. Listen. What has been centralized? 

23 

Mr. WINSTEAD. The policy guidance for leasing—we have broken 

out and established a new Office Of Real Estate Acquisition—Chip 

Morris behind me heads it up. For the same reasons you are mentioning, we wanted to ensure that all the regions who are responsible—we don’t procure out of central office; the regions do, NCR 

and the other 10 regions—to make sure that they are following 

guidelines, they are following all of the procurement regulations, 

but that they are doing it consistently and there is not variation, 

so that—— 

Ms. NORTON. There is not variation because you have moved to 

centralized leasing once again? 

Mr. WINSTEAD. In terms of our lease policy guidance and 

strengthening an office of leasing expertise at our central office in 

D.C. Similarly, the NCR is now regrouping—— 

Ms. NORTON. The National Capital Region? 

Mr. WINSTEAD. Yes, ma’am—regrouping—previously, and I think 

through most of Art’s tenure, the leasing was centralized in the 

service centers. And Bart Bush and Francesca Ryan are looking at 

bringing some of the centralized administrative responsibilities 

back into the regional office to, again, address the uniformity issue, 

management issue and efficiency of getting leases done and getting 

rent start dates in place. 

So that is what we have been doing through this new office over 

the last year or so. 

Ms. NORTON. Complaints we have received had to do with the 

different service centers, and one didn’t know what the next was 

doing. I wanted to ask Ms. Seekins, what is your comment on the 

decentralized leasing? And have you seen any evidence of more 

centralized management? 

Ms. SEEKINS. Excuse me. You are getting my Lauren Bacall 

voice, because I have a cold. I apologize. 

Our members contributed a number of these comments, and they 

did not speak specifically to the decentralized leasing process. So 

my familiarity with that is primarily from hearsay. I would be 

happy to go out to our membership and get some specific comments 

and transfer them to Committee. 

Ms. NORTON. Well, we would appreciate it. 

But, Mr. Turowski, you have been on both sides with centralized 

leasing now, then decentralized leasing, then apparently some 

moved back to centralized leasing. What have you seen? 

Mr. TUROWSKI. Well, the problem typically manifests itself when 

you compare one region to another in the areas where the process 

affords judgment. 

Ms. NORTON. So obviously you have to make room for the difference between a Washington, D.C., and for that matter New York 

City and a rural area where there is a courthouse? 

Mr. TUROWSKI. Well, in the leasing arena, if I might give one example, I mean, we see regions when they are in expiring-lease 

mode resorting to a technique available within the regulations that 

permits them to forego the issuance of competitive solicitations. It 

is a long—— 

Ms. NORTON. By doing what, Mr. Turowski? 

Mr. TUROWSKI. By affording themselves of the process within the 

regulations, a justifying a less than full competition and foregoing 

24 

the issuance of a competitive SFO. When the lease is expiring, the 

occupying agency is predisposed to stay. There is no room in there, 

but there is no availability in their budgets for move costs, which 

we know can run $80, $100 a square foot today. Some regions will 

utilize the piece of the regulations which allows them to simply advertise for informational quotes and, based on the information they 

get, decide if they need, in consideration of the move and replication costs, decide if they need to issue a competitive solicitation. 

Ms. NORTON. But you said they couldn’t afford to move. So it 

sounds like the agency is just trying to indicate that, while they do 

need space, they can’t afford what it would take to move, because 

it does come out of their budget. 

Mr. TUROWSKI. That is right. And what they are doing is justifying negotiating with the incumbent owner. 

Other regions, on the other hand, won’t avail themselves of that 

wherewithal in the regulations. They will proceed with issuance of 

a competitive solicitation when we in the market know that the 

likelihood of a move eventuating from that competitive SFO, solicitation for offers, is probably less than 5 percent. 

So we go through a process there that probably—well, does disserve a lot of people. And that is a difference in regional interpretation of the regulations. 

Ms. NORTON. Well, that is a huge difference. That is a huge difference because of what it takes to go through the solicitation process. 

Mr. TUROWSKI. Procedural, in terms of the time it consumes and 

so forth, yes, it is. 

Ms. NORTON. That is what I mean, staff time, GSA time, and I 

hate to say—I mean, do people bid? Do people bid under those circumstances? 

Mr. TUROWSKI. Some do. 

Ms. NORTON. Because then I think that is an outrage. Of course 

everybody wants a Federal lease. And if you think the Government 

is out here in good faith, you may think there is more to it than 

you know. 

Mr. TUROWSKI. You know, Congresswoman, if I might, this goes 

to the question you put earlier about what conceivably might be 

changed in the law or the regulations. 

Only because I was present at the passage of the Competition in 

Contracting Act and was somewhat privy to the debates at the 

time, the policy debates, about whether it applied to leasing or not 

am I sensitive to the idea that potentially there might be a carveout, as it were, a statutory carve-out or exception to leasing from 

the Competition in Contracting Act. 

That wouldn’t for a moment suggest that GSA dispense with 

competitive solicitations when they are genuinely on the market for 

a real estate transaction. But it would render far more easily and 

consistently not going on the market and justifying the price they 

pay based on information and the cost to move were they to move. 

It strikes me that if that were far clearer in the statute, that 

that would be a significant improvement and enhancement of the 

process across GSA’s regions. 

Ms. NORTON. Mr. Winstead, what—well, I don’t think I will get 

a direct answer. But, Mr. Winstead, here is a suggestion. That, in 

25 

essence, GSA has forced agencies to use tactics that are in conformity with the regulations, fool the public, fool those at least who 

respond to the solicitations, when in fact the agency has no intention or is trying its best not to move because of the costs associated 

with the moving. 

There is a classic example of the transparency within the agency 

that perhaps is needed. And if regulation is clouded, the question 

then becomes, how do you proceed in the absence of that regulation? 

But it does sound to me that any regulation that makes people 

take action at odds with what the regulation requires and, worse, 

makes those who deal with the Government spend money when everybody knows that there is, in fact, no change that a Government 

can afford to be made, something is wrong with that regulation and 

perhaps not with what is being done. 

But if I don’t get some indications, then we can’t work through 

the process. Because every time you change a regulation, you have 

to watch that you are not making moves that endanger the Government in the first place. After so many years, though, under such 

regulations, you would think that the agency would know, particularly from its experience with the marketplace, whether or not a 

regulation is useful. And this sounds to me as though it does not 

have uses on either side. 

So I won’t ask you, Mr. Winstead, because I think I will get the 

same kind of answer I have been getting from you, unless you have 

something to say. If you have a direct answer to his suggestion, I 

will take it. 

Mr. WINSTEAD. Well, Madam Chair, I do think that the issue 

that Art mentioned about having more flexibility is certainly something that could benefit us. But on the other hand, we are trying 

to deal with the current regulations in advertising. We have put in 

a new lease-tiering process that gives us advance notice so we can 

get to the agency and understand fully, which we do track when 

their leases are expiring, and have enough time with requirements 

to compete in the market to decide whether, you know, a succeeding lease—— 

Ms. NORTON. Mr. Winstead, see, that is what I mean. We are not 

talking about when people don’t know. We are talking about the 

agency and having those central abilities to advise the agencies 

that this doesn’t make sense and a regulation that seems to tell 

them that either you solicit or not. And they seem to be at crosspurposes with one another. And it may go back to having some advice from central policy. 

Mr. WINSTEAD. Yes, we will do that. 

Ms. NORTON. Mr. Winstead, up here I have been put in the arduous position of dealing with two appropriations for very important 

Federal construction. Has it occurred to GSA that the agency 

should be requesting all the funding for Level 4 construction, including whatever add-ons, like technology add-ons, security addons, so that the project would not have to go to two separate appropriators? 

Mr. WINSTEAD. I think that, you know, we put an awful lot of 

thought in the prospectus handling of trying to reduce and trying 

to get authorization up front for a lot of these, you know, stages, 

26 

such as design and construction, and the separation of those authorizations. I think there is great efficiency to be gained from 

that. 

Ms. NORTON. Why isn’t it done in the first place? The major appropriation—to give you an example of the things we would like to 

change if we understood why in the world it was being done, the 

Department of Homeland Security construction is where you might 

expect, in the appropriation Committee that handles GSA. But security technology, a very small amount was in the appropriation for 

Department of Homeland Security. 

It has been easier to get out of the GSA than the Department 

of Homeland Security for reasons that doesn’t have much to do 

with anything except the foibles of the appropriation process. 

But if I were sitting at GSA and I had experienced what you experienced, the President put money in his budget, not being able 

to get this out even when he controlled the House and the Senate, 

I mean, what kind of reflection is that on GSA? And what do you 

suggest should happen in such cases? 

Mr. WINSTEAD. I think, again, it is a question—in the case of St. 

Elizabeth’s, the projections, as you well know, are about a billion 

from DHS in terms of contribution to cost and about $2 billion from 

the Federal Building Fund. I think it is all a question of, you know, 

if we have the resources on our side. And, quite frankly, I think 

that, you know, the additional supplemental appropriations on the 

DHS side helps us. 

Ms. NORTON. I am sorry. I didn’t hear that last—— 

Mr. WINSTEAD. I think that the billion that we project coming 

from DHS for security and fit-out and equipment does help expand 

our ability because of the constraints in the Federal Buildings 

Fund to get that project done. So I think the concept of having 

to—— 

Ms. NORTON. First of all, you see what you are doing? The fact 

is we are talking about one building at this moment. We are talking about the Coast Guard building. 

Mr. WINSTEAD. Right. That is correct. 

Ms. NORTON. We are not talking about the whole project. We are 

talking about that building. That building we could have gotten out 

of here far more easily if it were all in the GSA. Long term, we 

probably shouldn’t be building this way in the first place. This is 

Government-owned land. And we have been trying to think of a 

way to do this far more economically to the Government. 

But let’s deal with what we have now. If we have to do a construction one building at a time, is there any policy reason why the 

prospectus and the submission should not be submitted such that 

it would go to one agency appropriation Committee, the appropriation Committee that handles GSA? Is there any reason for it to be 

divided? 

Mr. WINSTEAD. Madam Chair, obviously that would be more efficient. The reality is OMB requires customer agencies to pay certain—— 

Ms. NORTON. See, if you not going to help me if you say—— 

Mr. WINSTEAD. But you are correct. 

Ms. NORTON. Because I know what it requires, and I know OMB 

is part of the problem, and I know that we can’t change OMB unVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
27 

less I know whether it works or not. And I am not asking you who 

did it. I know who did it. 

I am asking you, would it be better if, in fact—would it be more 

efficient, would it be less costly to the agency and to all involved 

if this were submitted to one appropriation? And could it be developed such that that would happen? Could it technically be done? 

Mr. WINSTEAD. I do think that it would make things more accountable and easier to get authorization for. But the Committee—— 

Ms. NORTON. We have the authorization. I am going to insist 

that my questions be answered. We have the authorization for one 

building, Coast Guard. What we don’t have is the appropriation, in 

part because a small part is in one Committee and most of it is in 

GSA. Ask the GSA building service commissioner, do you believe 

that changes should be made that would place such appropriations 

before one appropriator? 

Mr. WINSTEAD. Obviously I think it would be easier to manage, 

and obviously procedurally it will be easier. I guess—— 

Ms. NORTON. We need to look at that, unless the agency—I ask 

you these questions because, if you find a reason why some of this 

is done, then that overcomes what would seem like a simple-minded change. Not because, you know, ′′This is the answer. Why don’t 

you give me the answer?′′ I am looking for a reason why perhaps 

this was done this way in the first place. 

You have given me one reason: In the long term, you would like 

DHS to pay for part of the building. I like that reason. But when 

it comes to this particular building, it doesn’t seem to me one has 

to be looking at a project that is going to take, what, 15 years to 

build and that I hope won’t be built this way. 

Mr. WINSTEAD. Right. 

Ms. NORTON. Let me ask all of you about the new security requirements. Obviously, they add delay and expense. My concern in 

this Committee is that if you look at those security requirements, 

there is simply not the inventory in the United States of America 

to meet them. So I am trying to find out where they come from and 

whether you have any recommendations for streamlining them and 

particularly whether you think they are all necessary. 

Anything any of you would have to say on that would be very 

helpful. 

Mr. GRUNLEY. Madam Chair, for the construction workers themselves, HSPD 12 is a real burden for the construction workers. And 

I say that—— 

Ms. NORTON. And of course to those who lease, because they then 

have to meet certain kinds of requirements as well. 

Go ahead, Mr. Grunley. 

Mr. GRUNLEY. The construction workers now under HSPD 12 

now fill out a form that I believe is the exact same form you fill 

out if you are trying to get a top-secret security clearance. They 

want to know every time you have been out of the country. They 

want to know three friends from high school and three friends from 

your neighborhood. And if you have a transient workforce, it becomes very difficult. 

They ask about your siblings and your parents. And we can easily have legal employees that are here with green cards whose parVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
28 

ents or siblings may be in the country without those, and they are 

unable to fill out those forms without perjuring themselves by, you 

know, saying they don’t know where their family is. 

So it is hurting us getting construction workers to the job site, 

which is impacting the schedules. 

Ms. NORTON. It sounds like overkill, but it does raise questions 

about—you are building a Federal building and what you need to 

know about those who are constructing the building where I guess 

you could do the most damage by the way you construct it. 

Who issues those requirements? GSA? Department of Homeland 

Security? 

Mr. WINSTEAD. Department of Homeland Security, in coordination with the Federal Protection Service in terms of the clearance 

side in the Federal buildings. 

But the HSPD 12 is, in fact, being implemented now, and it does 

have the issues that Mr. Grunley mentioned. I know firsthand that 

we have had experiences here in Washington about the time it is 

taking and the lack of mobility in terms of taking certain workers 

or craftsmen to other sites. And it is a burden. But it—— 

Ms. NORTON. This raises very fundamental questions. 

Ms. Seekins? 

Ms. SEEKINS. My perspective is a little bit different in that I 

manage buildings in place. But I am sure my experience is similar, 

and that is that there can be a disconnect between GSA and the 

agencies. And I frequently get the agencies advising X, Y and Z 

with regard to security while my privity of contract is with GSA. 

I think that improving—— 

Ms. NORTON. What do you mean, the agency advising somebody 

with regard to security—— 

Ms. SEEKINS. I have one building where the agency is imposing 

higher security standards than are called for on the lease. 

Ms. NORTON. How could that be? You have a lease—— 

Ms. SEEKINS. And in this instance, the agency oversees the 

guards in the building. The guards won’t let construction workers 

in the building even though I have been to GSA. It becomes a problem. There is a considerable amount of confusion. 

I would like to see—— 

Ms. NORTON. But GSA has authority over the guards. 

Mr. Winstead, the Federal Protective Service? 

Mr. WINSTEAD. Yes, ma’am. Madam Chair, the Federal Protective Service is under DHS. We do have an MOU with them in the 

buildings, in terms of the protocols. 

But this issue is really getting—and I was not fully aware of 

that, that there is a different level both in terms of the contract 

clauses versus what is being imposed in the buildings. I do know 

that we are meeting regularly with Federal Protective Service to 

make sure that there are no inconsistencies in the—— 

Ms. NORTON. Well, Ms. Seekins, when an agency violates the 

lease, considering that the lease is with the GSA, do you report 

that to the GSA? 

Ms. SEEKINS. Yes, I do. And, in this case, GSA gave me permission to work around the agency, which I proceeded to do, and my 

construction process is finished. I am a little—I think this is probVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
29 

ably emblematic of some larger problems where agencies forget 

that GSA has the privity of lease. 

Ms. NORTON. I do think that these lapses—it is not the first time 

I have heard of agencies taking charge of security. 

Mr. Winstead, are you aware that apparently for security reasons 

I would daresay anybody in this room who is not a Federal employee, who sought admission to the new Department of Transportation, not a very high-risk target, on M Street, who came through 

the door, might be asked to offer her identification, would still not 

be able to get into the building? This could be a taxpayer with children who needed to go to the restroom. It could be along M Street, 

which is being built up and its amenities are not all in place. It 

could be somebody who knows, ′′Wow, this is a Government building; I know I can find a cafeteria.′′ 

Are you aware that you cannot get into that building unless you 

are a Government employee or are accompanied by somebody on 

the stairs to show you have an appointment? Are you aware of 

that? 

Mr. WINSTEAD. I do know that protocols are in place for the 

screening at that building, and Bart might know more, but in 

terms of appointment review and calling up for a specific appointment—— 

Ms. NORTON. No, I just asked, did you know that a taxpayer 

can’t get in the building? 

Mr. WINSTEAD. I was not aware. 

Ms. NORTON. This is a—they are not exactly a—it is obviously 

built to resist terrorism, but it is not exactly considered a target. 

Who set that policy? 

Mr. WINSTEAD. Well, that would have been done with the Building Security Committee and FPS and the requirements dealing 

with DOT, looking at their—you know, they have control—tenant 

agency has control over the building and works with the Federal 

Protective Service in terms—— 

Ms. NORTON. The tenant agency has what? 

Mr. WINSTEAD. Sorry? 

Ms. NORTON. The tenant agency has—— 

Mr. WINSTEAD. They have control over their entry of the building. They work with DHS and the Federal Protective Service. We 

do negotiate often on behalf—— 

Ms. NORTON. So you are telling me that there is no uniform guidance among agencies even about admission of the public, based on 

whether or not—based on the security needed for the building, the 

mission and function of the building, that agencies are free to make 

that decision on their own, even if it means the average taxpayer 

who paid for the building can’t get into the building to use the restroom? That is satisfactory policy, as far as you are concerned? 

Mr. WINSTEAD. No. I think what we—— 

Ms. NORTON. I am just giving you a case in point. 

Mr. WINSTEAD. I understand. And it seems illogical and an inconvenience to the public and taxpayer. I mean, I totally agree with 

you. 

My understanding is that we are constantly engaging with the 

Federal Protective Service on either lease properties like DOT or 

our own buildings to make sure—— 

30 

Ms. NORTON. Well, you obviously are not, because you did not 

know about this. This is why in those hearings—those answers, 

Mr. Winstead, will get you nowhere at these hearings. 

Now, what I am going to ask GSA to do is, within 30 days, create 

a questionnaire for agencies on their security and admission policies affecting the public. In designing that questionnaire within 30 

days, I want that questionnaire submitted to the Subcommittee. 

Mr. WINSTEAD. I will do so. 

Ms. NORTON. There will be very different kinds of things needed, 

but I know who is not qualified to do it, is the agency head. And 

I can’t figure out who does it. Indeed, I would like to know about 

your own leadership on security. Apparently there is a committee, 

an interagency security committee. 

Mr. WINSTEAD. Right. 

Ms. NORTON. Who decides the security, and what security are 

they deciding? And who puts it before them? And is it factored into 

the cost of the construction and the cost to lessors? 

Mr. WINSTEAD. Basically, it depends on the level of the security 

of the facility. But the ISC essentially is made up of the Federal 

Protective Service, GSA, and the tenant agencies. The standards 

that are suggested for Level 1 to 4 facilities are essentially enforced 

by the Federal Protective Service. But we work—that is what we 

do. We actually help—— 

Ms. NORTON. No, I am not asking who enforces them. I am asking who says what the security is and, in designing that security, 

all the people at the table, including those who can tell you whether or not the Government or, for that matter, the private sector can 

or will pay for the kind of security you are ordering. 

Mr. WINSTEAD. Well, we do decide that within the security elements of either a new construction project or a leased facility. We 

work with the Federal Protective Service and the Interagency Security Committee standards. That is how we arrive at these standards. 

Ms. NORTON. So who has the final say on this? Who has final say 

on what the Interagency—— 

Mr. WINSTEAD. Each agency has an official designee for that purpose and advisors from both the Federal Protective Service and 

GSA. The cost is an issue, which is what we try to arbitrate to 

make sure that, you know, the requirements are not unrealistic 

given the risk that has been identified and the risk levels that have 

been identified. 

Ms. NORTON. The costs are relevant in the recommendation 

made? 

Mr. WINSTEAD. That is correct. 

Ms. NORTON. Ms. Seekins, what has been the effect—perhaps 

Mr. Turowski and Mr. Grunley as well—what has been the effect 

of the additional security that the Government has had to require 

following 9/11? And has it been done in a way so that the private 

sector can meet the demands that the Government now puts forward? 

Mr. TUROWSKI. Madam Chair, I think from the standpoint of security, physical security in leased space, and keeping in mind that 

offset of 50 foot or even 100 foot setbacks are not required when 

31 

GSA is seeking existing product, except for law enforcement, it 

hasn’t really been—— 

Ms. NORTON. Say that again. Only for law enforcement? 

Mr. TUROWSKI. Well, law enforcement, defense and intelligence 

have their own—— 

Ms. NORTON. Like the ATF? 

Mr. TUROWSKI. Precisely, have their own security. 

Ms. NORTON. For example, no great setback had been required 

for the Department of Transportation? They have a setback, but it 

is very different from the ATF setback. 

Mr. TUROWSKI. I think agencies can upgrade their security requirements from the standard if they are willing to pay for it. 

But—— 

Ms. NORTON. Who will pay in the first place? 

Mr. TUROWSKI. Well, the agency. If they are requiring—— 

Ms. NORTON. The taxpayers of the United States of America. 

Mr. TUROWSKI. Well, out of their budget, as opposed to the GSA 

budget. 

Ms. NORTON. All of this is out of their budget. And the budgets 

are just not going to be there. 

Mr. TUROWSKI. But if I might return to the question, in terms 

of physical security, when lease space is sought in existing product, 

we don’t see any material impact. The idea of magnetometers and 

X-ray machines in the lobby and at the loading docks, the treatment of air intakes and so forth, while on occasion problematical, 

really don’t amount to major challenges. 

However, as part of GSA’s leasing process, they do require an inspection, a security inspection, by a physical security specialist. 

Typically, that is from the Federal Protective Service. And oftentimes the waiting that it takes to get a security specialist to a proposed lease location can be fairly extended, and that, in and of 

itself, can extend the process. 

So just to reiterate a bit, physical security when GSA seeks existing product tends not to be a problem. However, the security inspectors—— 

Ms. NORTON. When it comes to leasing? 

Mr. TUROWSKI. When it comes to leasing, yes. 

Ms. NORTON. Because GSA is living with the existing inventory. 

Mr. TUROWSKI. For the most part, yes. I mean, they do specify 

build-to-suits, and build-to-suits at level 4 we understand would 

kick in a requirement for at least 50 foot setback. But in major 

urban areas where we see most GSA activity, it is for existing 

product and, again, build-to-suits generally aren’t pursued. 

Ms. NORTON. Ms. Seekins and Mr. Grunley, I would like to hear 

what both of you have to say on security to make sure that we are 

being realistic here. 

Ms. SEEKINS. I think that the physical security standards are 

quantifiable and administered in an even-handed way. So I find 

that quite acceptable. 

I think I join Mr. Grunley in the idea that some of the personnel 

security requirements are quite costly and do not seem to be evenly 

administered. 

Ms. NORTON. Do you mean like guards? 

32 

Ms. SEEKINS. Bringing contract employees into a building, do you 

do a NACI background check? Do you have them go through what 

is called an eQIP form, which is longer? Do you have them go 

through a higher level of security clearance? That—— 

Ms. NORTON. Is there some guidance so that, for example, the 

building owner knows the difference in which employees are required——RPTS JOHNSONDCMN MAYER[12:52 p.m.] 

Ms. SEEKINS. I would like to say—I would like to get that. Because I don’t see it. 

Ms. NORTON. All right. We would like to see that guidance clearer so that the building owner won’t be faced with the people are 

ready to come in the building, contract signed to do it, and then 

he has got to figure out which level of forms this contractor has to 

meet then. That’s the kind of thing I am after. 

Ms. SEEKINS. Precisely. Thank you very much. 

Ms. NORTON. Again, GSA can’t know these things unless we 

bring them out at public hearings. We are just trying to get rid of 

these things as soon as possible. 

Mr. Turowski, you have anything to say on that. 

Mr. TUROWSKI. No. 

Ms. NORTON. Mr. Grunley, on security, surely you are building 

buildings. I guess if the government wants to pay for it, you build 

whatever they require. 

Mr. GRUNLEY. I think the buildings we are working in that is 

doing some sort of structural hardening seems adequate. You 

know, I don’t see it being overkill. I think they are important buildings with prominent people that could be targets. 

As far as getting the construction workers in, I think they should 

look at it more practically. If you had a brand-new site and the 

first guy on the job is putting up a construction fence, and then he 

is going to leave, I don’t think he should need a security clearance. 

And do I believe that the—— 

Ms. NORTON. The construction worker just putting up a fence you 

mean? 

Mr. GRUNLEY. Right. Under HSPD-12 may very well have to fill 

out the form just to put the fence up for 2 days and leave. 

Certainly, the mechanical and electrical trades that are working 

inside, working in telephone closets, I think that is a wonderful 

idea. Maybe the painter who is roaming a building like this at 

night should have the clearance. But I think there needs to be a 

practical approach to it. 

Ms. NORTON. Are any of those different—Mr. Winstead, requiring 

necessary—indeed, I am on Homeland Security Committee, so I am 

listening with two kinds of ears here. And these requirements of 

employees, are distinctions made between somebody who has been 

called to put up a fence and somebody on the inside putting up cables? 

Mr. WINSTEAD. Obviously, Mr. Grunley mentioned they have not 

been. Perimeter fence security might be if, you know, it was related 

to a high security building. But I think he is correct in that there 

could be more flexibility in people who are not in the interior of the 

building. 

Ms. NORTON. These are the kinds of practical suggestions we—— 

33 

Mr. WINSTEAD. We would be happy to, you know, to take these 

suggestions and others and get them back. And obviously our responsibility is to try to make it as easy as possible, working with 

the HSPD-12, this new system of badging, as well as the requirements that DHS and FPS have. 

Ms. NORTON. Let me ask you about the Prompt Pay Act. 

By the way, Mr. Winstead, it is not the case that Federal Protective Service comes entirely under my other Committee, the Homeland Security Committee. There is jurisdiction shared there. And 

we have had very, very important hearings on the Federal Protective Service, which is in very dire straits since its transfer from 

GSA. If I might say so, it ran very much better at GSA. 

One of the ways brought into question the Prompt Pay Act when 

we found that—and this is one example; obviously, if you apply it 

to leasing and construction I would be most interested. But this example had to do with security guards. 

It was reported to my office they weren’t being paid—that kind 

of scared us, since they guard secure sites and Federal buildings— 

and learned that one of them had fraudulent—you know, was a 

felon, shouldn’t have a contract in the first place. We passed legislation there. 

But the most pathetic case was one we corrected by working very 

closely with ICE and the GSA, and working hand-in-glove with 

them, which is why I say we want to help. Instead of just bringing 

them up here and exposing them, we have helped ICE within a period of—didn’t take any more than 2 or 3 months to reorganize 

their relationship to contractors. 

The best case was a former police commander at D.C. and his 

wife, who owned a contracting company, who had habitually and 

chronically not been paid. 

Now, Mr. Grunley is a pretty big guy. This was a—would be considered a small business owner. So how did he keep from getting 

in the same position as the felon whom we caught, whom we found 

out had the GSA money, the FPS money, and simply hadn’t paid 

his guards? Why had this man not done the same thing? 

Well, besides the fact that he was honest, what he was doing was 

essentially depending upon the fact that he had a government contract, getting a loan from a trusted bank that continued to fund 

him until his FPS ship came in. Not until he came before us did 

it begin to come in. It was an outrageous case of failure to—a violation of the Prompt Pay Act that endangered government facilities. 

As a result of this, they centralized their contracting, put in an 

ombudsman, not only brought themselves current, but quickly negotiated what amounted to many contractors who, in fact, were 

owed money. 

But there were disputes. So you could set those aside forever and 

just ring up the cash register. Part of the problem was that people 

also thought they weren’t getting paid under the Prompt Pay Act. 

I have got to ask you both, all three of you, do you know of instances where people have failed to be paid promptly? I ask you, 

if GSA pays a penalty for late payments—I can tell you this much, 

you will pay a penalty if it goes the other way. I would like to have 

your experience. 

34 

On this one I feel a little passionate because of the small business person. So anything you have to say to me. Remember, our 

answer to ICE and FPS was not to beat them about the head and 

shoulders, but to actually develop a relationship with them which 

changed the system, which didn’t turn out to need a lot of wholesale makeover. 

So give me, first, the experience. Maybe with construction and 

leasing this is not the same problem. 

Mr. GRUNLEY. First of all, thanks for the comment about being 

large, but—I was thinking I should go on a diet. But until 1987, 

we did operate as a small business, so it was nice to graduate from 

that program. 

We have absolutely zero problems getting paid from GSA. They 

meet the Prompt Pay Act. Occasionally, a check may be a day or 

two late because somebody was on vacation—— 

Ms. NORTON. Would there be a penalty if they did not meet the 

Prompt Pay in your case? 

Mr. GRUNLEY. Yes. And they automatically send the interest. We 

do not have to ask for it. So occasionally we will see $12.82, and 

we don’t know what it is for, and we will call and find out it is an 

interest payment. 

Ms. NORTON. Fabulous. Because they know if that added up it 

would ultimately come to the attention of the government because 

the amounts are so large. 

Go ahead. 

Mr. GRUNLEY. I would say 80 to 90 percent of the people that are 

having trouble getting paid, it is because they either don’t understand the process or they are not doing it correctly. And it happens 

in my company also. 

I will have a young—— 

Ms. NORTON. What do you mean, they don’t understand the process? 

Mr. GRUNLEY. They should. You can’t just submit a requisition; 

you need to have it approved by somebody. The Prompt Pay Act 

starts with approval. 

Ms. NORTON. But people want their money. 

We also found that some contractors, that some of the problem 

at FPS really were the contractors themselves. In this case, they 

were small businesses that didn’t understand everything. And part 

of what they did was to train all their contracting officers, submit 

new material to people, the ABCs of what you have to do. And they 

don’t have the problem anymore. 

I don’t understand. In other words, these fools don’t understand 

what they have to do to get their own money. Well, whose fault is 

that? 

Is it that the agency has made it perfectly clear, Mr. Winstead? 

And if these people only did what you told them to do, they would 

be paid just like Mr. Grunley has been paid? I don’t understand 

what the problem is. 

If there is no problem, we know if they are as big as Mr. 

Grunley—not very big in his chair, but he has grown from a small 

business—apparently you all know what to do, but I know what 

happened to small businesses. 

35 

Well, just let me go on. I don’t want to—I am trying to find experience. 

Mr. Turowski, you on the inside and the outside, did you find 

this to be a problem or not with leasing and with construction? 

Prompt Payment Act. 

Mr. TUROWSKI. Madam Chair, from both sides of the leasing program, I only have anecdotal recollection of Prompt Pay—— 

Ms. NORTON. I am not asking you to come with a survey. Once 

I find anecdotal evidence, then I look to see whether this is endemic or whether this is—— 

Mr. TUROWSKI. Has it happened on a couple of occasions? Yes, 

there have been Prompt Pay violations in leasing. But honestly, to 

my—in my memory, the incidences in the leasing area are comparatively rare. 

Of course, if we were talking about prompt execution, that would 

be another story. But Prompt Pay is not a—— 

Ms. NORTON. Prompt execution. What is it essentially you are 

making? 

Mr. TUROWSKI. Prompt execution of the lease. Not so much payment on the lease, but execution of the lease once it has been 

agreed to by—— 

Ms. NORTON. And what keeps that recurring? In other words, 

here is this person raring to go with maybe an empty building or 

at least empty space, but you can’t move because of why? 

Mr. TUROWSKI. Well, it is the processes that I alluded to in my 

earlier remarks. 

Ms. NORTON. Because some of those processes, and you indicated 

that those processes—you weren’t prepared to say those processes 

were simply unnecessary. 

Do you think that there is a streamlining of those processes that 

could be done if we all sat down and worked together? 

Mr. TUROWSKI. I think it could be done. And I think resources 

are the key ingredient to getting that done, yes. 

Ms. NORTON. Well, you know what kind of strain the government 

is under. 

Mr. TUROWSKI. Yes. 

Ms. NORTON. And so the one answer I cannot accept is the answer I most want, but know I cannot produce on, which is, why not 

just put some more staff in there. That is why I know Mr. 

Winstead and part of what Mr. Winstead is dealing with, and you 

don’t hear me beating up on him on staff. I know what he has to 

go through to get staff. 

I headed a Federal agency. And now that we are into this, you 

know, awesome deficit, I can tell you I don’t care who becomes 

President next time, there is not going to be much difference. That 

is why the agencies need to be put on notice. I am going to be going 

to the Appropriations Committee to make sure that agencies do not 

spend well beyond what they are spending now. And the reason I 

am going to do that is because I am on Oversight and Government 

Reform, I am here where construction takes place. 

So what the agencies have to do is this: When you have this kind 

of squeeze—and we are in for the squeeze for some time—you have 

got to take it from someplace. Are you going to take it from personnel? With Federal workers retiring? Are you going to take it 

36 

from the child care center? Or are you going to say, I want to be 

on K Street? So what I am going to submit to the Appropriations 

Committee is the increased rent that K Street can afford. 

I am not going to do this. I am not going to sit on the authorizing 

Committee and allow that to happen. You had all better put people 

on notice. 

And I don’t think the trade-offs that I have just described are 

fair unless you are overstaffed. Then maybe it is personnel. But the 

appropriators are going to have my help as an authorizer—and, indeed, I sit on the Subcommittee that has to do with personnel in 

the Federal Government, and as an authorizer here. 

So the squeeze is going to come. It is going to come in the right 

place. And I don’t think the right place is to go to the most expensive part in downtown D.C. or New York. 

So, Ms. Seekins, is your Prompt Pay Act—excuse me, execution. 

Back to what Mr. Winstead needs more than what Mr. Turowski 

has suggested, more people as smart and experienced as he is. Absent that, do you think that execution within the kind of resources 

you can say you know you are going to get out of your experience, 

are there ways to streamline the process so that quite unfairly one 

does not hold somebody who has a lease but just can’t get it executed to essentially absorb that cost? 

Or is he absorbing that cost? Mr. Turowski, is he absorbing that 

cost? 

Mr. TUROWSKI. Yes. 

Ms. NORTON. Is the rent being paid by the government anyway? 

Mr. TUROWSKI. No, not at that point. Not at that point, but the 

space is being carried by the owner. 

Ms. NORTON. He is absorbing the cost? 

Mr. TUROWSKI. To the extent there is cost, yes, it is being absorbed by the owner. 

Ms. NORTON. Because until GSA is on the dotted line, it is his 

money, not ours. I am glad of that for the taxpayers, but one of the 

reasons for this hearing is to try to keep from unfairly burdening 

those who do business with the government as well. So I am asking 

whether or not that time period between knowledge of exactly who 

gets the lease and the signing of the lease—are we talking about 

that period, Mr. Turowski, so I know what I am talking about? 

Mr. TUROWSKI. We are talking about the period between which 

the owner signs and GSA signs. The owner signed a lease, GSA has 

not yet signed. Okay. It is the end of the process. And we have seen 

in—— 

Ms. NORTON. I would have thought the GSA would have gone 

through a lot—GSA would have done a lot of work before it would 

even let the owner sign. 

So what has to be done between the time the owner signs and 

GSA signs? 

Mr. TUROWSKI. They do their compliance checks, their scoring 

checks, their conformity with prospectus checks. They ensure that 

the agreement they have with the occupying agency fully reflects 

all the business aspects of the lease. They get the using agency’s 

signature on those documents, their internal pricing documents. 

It has proven to be fairly time-consuming. 

37 

Ms. NORTON. Scoring? That late in the game we are looking at 

scoring? 

By the way, several of you have mentioned scoring. You have 

taken the issue I most hate about the Federal Government and 

have been able to do least about. We had a successful fight on scoring. I know what you are going through. But again, I put my attack 

dog on them, and this was the Old Post Office Building, where indeed there was an attempt by CBO to score—essentially, Mr. 

Turowski, what we did at the Monaco Hotel. 

So when you put before—which, of course, is now bringing revenue to the Federal Government. 

When you put that before them, you realize you are dealing in 

part with people who don’t understand real estate or land management at all. So all they do is do the general crossword puzzle. But 

I can tell you that that is a very hard—that is the first one I think 

we have ever won. Well, Southeast Federal Center, but we haven’t 

been able to duplicate this, the Southeast Federal Center. 

See, when I find that kind of wall, then I go, okay, what is another way to do this? 

So you have heard some of these things. Scoring I am taking off 

the list. But during this period of prospectuses, occupancy and so 

forth, does that duplicate what has already been done, Mr. 

Winstead? 

Mr. WINSTEAD. The problem that I think Art is talking about is 

the close-out of the lease in terms of a winning bidder and how 

much time it is taking us to basically sign the government on the 

line. And I will tell you that because—— 

Ms. NORTON. First of all, I want to make sure he is talking about 

what? 

Mr. WINSTEAD. The time it is taking, on average, now in NCR 

between the actual signing of the lease and the final lease—— 

Ms. NORTON. Is that what you are talking about, Mr. Turowski? 

Mr. TUROWSKI. That is precisely it. 

Ms. NORTON. So at least we are talking about the same thing. 

Go ahead. 

Mr. WINSTEAD. And it has been a concern in terms of that time, 

taking more. It has in some cases taken 3 months. It should not 

take that long. 

Part of the issue is, and I think we have addressed it, we are addressing it now, it is a burden on the private sector lessor. I mean, 

they have got a building financed, we have come to a meeting of 

the minds in terms of price, but there are all those compliance 

things that Art talked about—some of which cannot be done in advance—that have to be done after an arriving of sort of the real 

price. 

Ms. NORTON. Can’t that be streamlined at all, Mr. Winstead? 

Mr. WINSTEAD. Sorry? 

Ms. NORTON. Can this process be—you see the unfairness. 

How long does it take, Mr. Turowski? Give me an example. 

Mr. TUROWSKI. Oh, it routinely has taken 2 to 3 months, that period of time in the leases that were being done at the time I left 

the agency. 

Ms. NORTON. How would you like to be left with that for 2 or 3 

months, Mr. Winstead? 

38 

Mr. WINSTEAD. That is unacceptably too long, I must say. 

Part of our problem, Madam Chair, that I don’t think everybody 

is aware of is that we have had, through the National Broker Contract, through looking at a rent bill management effort, which is 

a new system for managing rent and is contracted out, through basically the new e-lease system, where all the realty specialists are 

plugging in the details on leases into a new IT tool, that unfortunately—a lot of the demands of these new systems create in the 

long term greater efficiency—have been on top of the leasing specialists and the COTRs, and have been an additional burden. And 

unfortunately, I am afraid the time in which closing out this lease 

and getting a signed lease back is taking more—longer than we are 

comfortable with. 

And I think that is what Art is talking about, as well as Gail. 

Ms. NORTON. That comes under the category of not only wanting 

to save money for the Federal Government, but to save money for 

people who are unfairly penalized in the private sector. 

I am going to ask the IG to look at that process and to make suggestions between lease signing and lease execution. Again, we are 

looking for recommendations. We understand that these things 

have been in place. And we are not looking for penalties, we are 

not looking to criticize the agency, but we can’t do anything if we 

don’t know anything about these things. 

We have had an instance recently where an unnamed agency 

simply refused to sign for as long as it got ready. Ultimately, I 

think it looked closely at the fact that, given what the Subcommittee had already done, it was not going to be able to do what 

agencies have routinely done: get out of the competition that had 

won the lease. 

So they finally figured out what to do. And they did not—and 

they did accept the space, albeit not for the unit it had initially 

wished to be in the space. But the agency, how long—what did it 

take the agencies? Surely it was almost a year. Well, staff says at 

least 6 months. 

Now, I don’t think the agency could have done anything else. 

And I couldn’t understand it, because the agreement was not with 

the agency; the agreement was with GSA. The lease is not the 

agency’s lease. 

So you are going to have to make me understand why an agency 

can hold up the whole Federal Government, even though the agency has no responsibility under the law for leasing after a fair competition on price, amenities, and everything else has taken place. 

Understand, this fair competition has occurred after the agency has 

signed on that it must have all of these things. So make me now 

understand what GSA can do about the fact that the agency says, 

well, I am just going to hang out here as long as I want to no matter what it costs the private sector and no matter what it costs the 

government. 

Is there anything you want to suggest that the agencies can be 

doing about this? Or, if not, what additional authority do you need 

so that that does not occur?DCMN HERZFELD 

Mr. WINSTEAD. Well, Madam Chair, obviously in the original requirements, efforts of looking at agency need and the one in question, we are obviously trying to go to the market and determine 

39 

within the delineated area what the competition is. And to get to 

that stage and then have the tenant agency not party to the move 

or delaying the move is not what we are supposed—— 

Ms. NORTON. Are there any time limits on the agency at all? 

Should there be? 

Mr. WINSTEAD. Well, only in terms of any existing lease obligation they have in the current housing arrangement or Federal—— 

Ms. NORTON. You would know that by now, or you wouldn’t be 

negotiating for a new lease. 

Mr. WINSTEAD. Pardon? 

Ms. NORTON. Mr. Winstead, that kind of answer doesn’t help. 

Nobody is going to make a move out before their lease is up. That 

is already understood. That is why I lose patience. 

Mr. WINSTEAD. Right. 

Ms. NORTON. I am really trying to look for answers. I am not trying to criticize GSA. And therefore, my answer is—my question is 

does the agency need authority in order to keep an agency from deciding on its own motion when to sign a lease which under law it 

is obligated to sign? It wasn’t obligated to agree to all of these 

things before the competition. It agreed, sat down with you, and 

you virtually do everything they say. Fair competition has taken 

place. They hang out there for as long as they want to. You, of 

course, call them; you do the right thing. And they say later for 

you. What I am asking you is what should be done. If you can’t tell 

me, then I am asking somebody else to tell me what can be done 

either administratively or by law. 

Mr. WINSTEAD. I think it is more—I know that case that you presented was a troubling one and makes no sense in terms of the 

amount of work and the determination we have had on the Public 

Building Act in terms of where they should go. In terms of 

strengthening the adherence in a timing sense of that decision and 

the agency’s move, I would be happy—— 

Ms. NORTON. Strengthening what, I am sorry? 

Mr. WINSTEAD. Sorry? Between the commitment in terms of an 

offer and an option and getting the agency to move, there could be 

additional guidelines that could be supportive. But I think we do 

the best we can to get the agency into the best space. We have the 

delegated—we have the authority to do so, and that is what OMB 

and the Congress expects us to do is to make the best real estate—— 

Ms. NORTON. You have the authority to do so. It would have been 

difficult for you to do. Either we need to do something, or you need 

to do something. Do any of you at the table see anything that the 

agency could do on its own? 

See, we can instruct the agency, or we can do it by law. We don’t 

think that is fair to just say bide your time, and then when you 

get ready, you sign. You understand that when they sign, then 

there is a whole process GSA has to go through. You just heard testimony about that. So the whole works is—one agency, what authority or none? Can’t sign a lease. Has none of the obligations 

under the lease. GSA does. It is taking a hit and saying it is okay, 

just hit us. Well, you are not going to hit this Subcommittee, so I 

want to know whether you all can think of anything administraVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00047 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
40 

tively that can be done, or whether you have any recommendations 

of any kind. 

Mr. WINSTEAD. Madam Chair, again, we have the authority to direct the agency to move. And, you know—— 

Ms. NORTON. Okay. I get it. 

Mr. WINSTEAD. We have that authority. But I agree that there 

have been some onerous cases, I don’t know them in detail, where 

that has not happened. 

Ms. NORTON. The Subcommittee will look to see whether it needs 

to instruct the agency to issue guidance, or whether we need to 

issue this guidance by law. We do not intend to sit here and try 

to get the best deal for the government without—in a one-sided 

process without trying to help those who must contract with the 

government to also avoid needless regulations. That is why I appreciate—I am a strong Davis-Bacon supporter, but I have no case to 

be made for paperwork. The point is to get some money to workers. 

Why, Mr. Winstead, does the agency delegate the management 

of leases in some cases? Give me examples where you do this. I 

know you do this in some cases. 

Mr. WINSTEAD. There are about 13 agencies that have delegated 

acquisition authority. We passed a new regulation guidance last 

September that limited the ability of those agencies to execute 

lease delegation unless it is under 20,000 square feet. And it is 

generally. 

Ms. NORTON. Wait a minute. Are you saying it is limited—I need 

to hear this. 

Mr. WINSTEAD. It limited the agencies that have lease delegation 

authority to only apply that delegation authority, or we have to 

grant it to leases that are under 20,000 square feet. 

Ms. NORTON. You grant it in the first place, or else it wouldn’t 

be delegated. Are there going to be any more leases delegated? 

Mr. WINSTEAD. They have to submit a delegated lease request. 

Ms. NORTON. Why are you delegating any leases if you are the 

agency? 

Mr. WINSTEAD. Many of the agencies—USDA, for example, have 

a lot of leases that are in areas—— 

Ms. NORTON. Who? 

Mr. WINSTEAD. The USDA and Forest Service and agencies like 

that are in areas where we really do not have the national broker 

contractors. 

Ms. NORTON. So specialized agencies, you are saying specialized 

agencies. So are all the agencies that have delegation and management leases specialized agencies like Department of—— 

Mr. WINSTEAD. No. The delegation is generally in a small—only 

1 percent of all leases that we manage are delegated. 

Ms. NORTON. Would you submit to the agency a list of all of the 

agencies who have the delegated management of leases authority 

and any guidelines for those lease delegations that you now have? 

What is the average number of leases in the lease portfolio for 

what looks like a dwindling number of specialists at GSA? Average 

number of leases. 

Mr. WINSTEAD. Well, we have about—we have an inventory of 53 

million square feet in the National Capital Region. About 10 perVerDate Aug 31 2005 17:52 Jun 09, 2009 Jkt 000000 PO 00000 Frm 00048 Fmt 6633 Sfmt 6633 P:\DOCS\42777 JASON
41 

cent of that turns over every year. Nationally, as I mentioned earlier—— 

Ms. NORTON. So what is the average number? 

Mr. WINSTEAD. The average number per annum, we have, well, 

125. 

Ms. NORTON. I don’t enough to know whether that is manageable 

or not. One hundred twenty-five? 

Mr. WINSTEAD. Annual leases in the NCR in terms of an average 

lease load in the National Capital Region. 

Ms. NORTON. Handled by a specialist? One—I am asking, I am 

sorry, the average number in the lease portfolio of a GSA lease specialist. 

Mr. WINSTEAD. I think we have about 6,000 lease actions per 

year in NCR. Is that correct? 

Ms. NORTON. I am just saying—— 

Mr. WINSTEAD. One hundred twenty-five lease actions a year. 

Ms. NORTON. How many? 

Mr. WINSTEAD. One hundred twenty-five lease actions. 

Ms. NORTON. For each specialist? 

Mr. WINSTEAD. I am sorry, we have seven specialists—70 specialists and 125 annual lease actions in the NCR. 

Ms. NORTON. You consider that adequate or not? 

Mr. WINSTEAD. Well, you know, as I mentioned before, I think 

we are—again, we have had attrition, again the issue of the National Broker Contract and training people on that, and being able 

to utilize that have, in fact—we have seen it diminish. At one point 

10 years ago, we had 1,000 realty specialists. Now we have got 560 

realty specialists. So we have seen a long-term decrease in the 

number of realty specialists. 

But the whole concept behind the National Broker Contract was 

to contract out, and basically under contract, have the expertise to 

determine and to advise us on the best deal in the market. And the 

concept behind that was also that the same realty specialists could 

work upstream with the client agency to avoid what Art talked 

about in terms of the holdover situation. And that has essentially 

been the mechanism we have had in place the last 3 years under 

the National Broker Contract. 

Ms. NORTON. Is there a private sector benchmark to measure 

this by, or is the government unique in this way? Because I don’t 

have any idea whether that number is a good number or not. Is 

there a private sector benchmark if you look at what the private 

sector would regard as what is necessary to manage such a portfolio? 

Mr. TUROWSKI. Not off the top of my head, Madam Chair. A lot 

depends on the size of the lease, its complexity. I mean, indeed, 

some major leases could have two lease negotiators assigned to 

them. If a lease is comparatively small, a private sector lease negotiator could be working, you know, 10 or 15 or 20 at one time. 

Ms. NORTON. These, of course, would be complicated just by the 

number of rules and regulations and laws of the Federal Government. 

Mr. TUROWSKI. Yes. 

Ms. NORTON. Mr. Turowski, I am aware that you were working 

on a streamlined lease before you left the government. I am not 

42 

aware that it has been institutionalized. Do you know what I am 

talking about, rewriting some of the parts of the leases that might 

be eliminated so that you could streamline? Is that in use? 

Mr. TUROWSKI. Honestly, no. That is catching me a bit cold. 

Ms. NORTON. What happened? Mr. Winstead seems to know 

what I am talking about. Streamlined leases. 

Mr. WINSTEAD. Yeah, we have looked at the concept I mentioned 

about trying to centralize more of the policy side in the management of leasing. We have looked—— 

Ms. NORTON. Very important. Go ahead. 

Mr. WINSTEAD. We basically looked at the skill erosion issue and 

procurement expertise, and made sure that realty specialists that 

were burdened with all these other things I mentioned, that we do 

have enough seasoned people to guide their actions and to train 

them. And I will tell you it is a challenge. 

Ms. NORTON. That is good, because to meet the challenge that it 

looks like the Federal Government isn’t about to give more personnel to agencies, one would think that the greater the centralization, the more done by guidance, the better off you would be unless 

you can expect some influx of qualified people. As you know, people 

leave because you give them the kind of training that makes it possible for them to earn considerably more in the private sector. 

Mr. WINSTEAD. We do have attrition, and Art is an example. Of 

course, he had 37 years. 

Ms. NORTON. Nobody stays these days as long as Art stayed. 

Mr. WINSTEAD. Right. But I do think we have taken the management actions for this lease management both from a policy standpoint, in Central Office and the regions. I think the real weakness 

is the staffing question, and the real weakness is the lack of seasoned expertise that goes back that many years. And what we are 

leaning on is the private sector knowledge of the market, but we 

still do not have sufficient members that have had the years of 

training in lease and action and contract officials. 

And I also would like to mention that a lot of our—some of our 

regions are concerned about that to the extent that, you know, they 

are taking some of the more complicated leases and trying to ensure that the senior people are using those as examples for the 

newer incoming lease specialists to be trained on. 

Ms. NORTON. You would think that that would be common practice. 

Mr. WINSTEAD. It is common practice. I think what—— 

Ms. NORTON. But the centralization that you say you are doing 

seems to me would move toward that and toward that kind of guidance. 

Mr. WINSTEAD. It is. We are issuing it now. 

Ms. NORTON. It is like I am a law associate, to take my own profession. You know, the first thing you do is to look for somebody 

who has written the same kind of pleadings and then go from 

there. 

Mr. WINSTEAD. Right. We are regularly scheduling zonal 

trainings in the regions for our realty specialists, and also training 

them in some of these new tools I mentioned, which will ultimately 

lessen the burden and allow them to focus more on both, obviously, 

the client needs and the transaction. That is e-lease and the rental 

43 

management and other initiatives that are tied in, which are new 

tools we put in place in the last 2 years. And I think part of the 

problem, what I hear when I go to the regions, is that all these are 

great ideas, but it diverts time and attention from getting people 

trained on those new systems. And the result is maybe the leases 

are not getting closed out as quickly. And I guess that is what we 

heard evidence of earlier. 

Ms. NORTON. Well, somehow or the other that is the job of management, to make sure people get trained, or else they just create 

more of the same problem, or the problem is not a cure. 

I am very interested, though, in your notion about seasoned 

workers, particularly given what I know about this area, and your 

intern program. Would you tell me about this intern program and 

whether it leads to conversion, somehow some of these employees 

to Federal employees? 

Mr. WINSTEAD. We have always had a very—— 

Ms. NORTON. Where do they come from? Where do these interns 

come from? 

Mr. WINSTEAD. Most of the interns, some of them were recruited 

out of college; some of them actually worked for GSA while they 

were in college through our co-op program. 

Ms. NORTON. How many of them have become government employees? 

Mr. WINSTEAD. I think of the six that graduated, we went to an 

intern graduation at central office about a month ago, and I think 

all of them have stayed with GSA. And most of them were at GSA 

before they entered the intern program. So we have two levels. One 

are the college-age people that are still involved during breaks and 

summer, that is the Co-Op program; but the intern programs are 

essentially there were seven and—— 

Ms. NORTON. Is there any requirement—wait a minute. All right. 

These are people who work in the summer? 

Mr. WINSTEAD. No, the interns actually are full time, but the coops, the college grads, or people that are in college rather—— 

Ms. NORTON. Both would be very valuable. Now, the interns, 

they are being paid by the government? 

Mr. WINSTEAD. Yes. And they are selected by—— 

Ms. NORTON. Can you be an intern paid by the government and 

then leave and go to the private sector as soon as you finish your 

internship? 

Mr. WINSTEAD. There is no—I don’t believe there is any signed 

agreement with the intern program that requires—— 

Ms. NORTON. Why? The reason you are losing people is because 

they get the training and quickly go to where they can earn good 

money. Is there a quid pro quo for the government money being 

used to train people so they can at least get something out of it for 

the training? 

Mr. WINSTEAD. Madam Chair, I think the distinction is that 

these are selected and prequalified in terms of their potential to go 

up the career chain to become senior executives. 

Ms. NORTON. Are they already government employees you are 

saying? 

Mr. WINSTEAD. Yes, yes, those people. The ones I mentioned before in the—— 

44 

Ms. NORTON. The word ′′intern′′ applies to—you are using the 

word ′′intern′′ because they are interning in GSA? 

Mr. WINSTEAD. That is right. 

Ms. NORTON. They are already government employees. 

Mr. WINSTEAD. That is right. 

Ms. NORTON. Are they government employees at the GSA? 

Mr. WINSTEAD. Yes. 

Ms. NORTON. Where did they come from? What kind of sections 

of the GSA do they come from? 

Mr. WINSTEAD. Well, they are all over. They are in all the programs areas, some in the Chief Architect’s Office, some in Portfolio, 

some in Financial. 

Ms. NORTON. So I am in one of those kind of related functions, 

but I want to become a what, a realty specialist? 

Mr. WINSTEAD. Yes. 

Ms. NORTON. Okay. You then are paid the same you were paid 

elsewhere in the agency, except you are learning now the whole 

business of GSA as a realty specialist, right? Or not? 

Mr. WINSTEAD. Yeah, but the GS level could be higher. I mean, 

obviously it is in some instances. Some of those interns would 

go—— 

Ms. NORTON. Okay. It could be higher. I am trying to find out 

how many of these are there? 

Mr. WINSTEAD. Well, I know that there were six in terms of Central Office. I think nationwide there are over 100. 

Ms. NORTON. Let me deal with the last six. Did they all become 

realty specialists at—— 

Mr. WINSTEAD. No, they didn’t, but some of them are in the realty—— 

Ms. NORTON. What happened to the rest of them? 

Mr. WINSTEAD. Some of them went into the Chief Architect, some 

of them went to Portfolio to manage our portfolio. Others went—— 

Ms. NORTON. All of them remained at GSA? 

Mr. WINSTEAD. Yes. At least the ones I am most familiar with, 

the ones that graduated this year. 

Ms. NORTON. What I would like you—if you are saying that all 

six at least are with the agency now, first of all, when did they 

graduate? 

Mr. WINSTEAD. The ones I am familiar, which I talked to a week 

ago, graduated—it is a 2-year—— 

Ms. NORTON. You know for a fact—— 

Mr. WINSTEAD. It is a 2-year program, and they participate. The 

group that I am closely aware of, the group that just graduated, 

are all staying with GSA. And I would be happy to get the Committee exactly the qualifications of getting into this program, how 

we determine both from their interest and need in terms of staffing, where they end up after the program, whether it is—— 

Ms. NORTON. On this, you know, the one thing I don’t do, because I ran a Federal agency myself, is try to micromanage something like this. I am trying now to figure out, given what I am sure 

will be—you have already said is a problem in recruiting realty 

specialists, whether it makes sense for you—I would like you to try 

to figure this out—at least for the time being you think these people will remain at GSA. Let me give you this scenario. I am now 

45 

an architect someplace else, and I want to get more of what GSA 

does overall as a realty specialist. So while I know something about 

one part of the agency, I want to get the others. I can spend 2 

years there, I will go back for a year or so, and then I am off here 

to where people pay top dollar. Nobody is going to begrudge that 

ultimately, but in terms of the need for realty specialists, the difficulty that you are encountering now you will continue to encounter. 

I wonder whether or not—I literally ask this as a question, I 

have no idea the answer, and I have no idea where to find realty 

specialists, but I am wondering whether or not it would be useful 

to the agency to say that this program— that those who get first 

druthers on this program will be those who make X commitment. 

I can’t tell you what that should be. 

We do it in the Federal Government all the time. This is in-kind 

training that is very valuable. What we do is very different, you 

know. It may have to do with paying parts of loans in order to encourage people to go to some places in order to practice one or another profession like nursing or something of the kind. 

So I am very roughly analogizing to see, one, whether this is necessary, or whether you get the realty specialists from someplace 

else, and whether or not this would be a useful thing to do, not excluding others, but trying to retain this expertise where it might 

be particularly valuable. 

Mr. WINSTEAD. I would be happy to get you—for the 560 I referred to, I would be happy it to get you a breakdown of their tenure, which ones have participated in the intern program and returned to the realty function, and I will get that information to 

you. But I think it is going to continue—I think the market, obviously the commercial market, is cooling a bit. The residential market has fallen out. I think the reality is the temptation, hopefully, 

on the near term might be more encouraging to stay than to head 

to the private sector. 

Ms. NORTON. Since I am not dealing with the near term, but 

dealing with what Federal policy should be generally—— 

Mr. WINSTEAD. We will be happy to get that down and get to you 

what we have in place in terms of those requirements and how 

many are staying with GSA versus going out. And we can get it 

for the Chief Architect’s Office, the engineers and architects and 

designers. 

Ms. NORTON. I am going to ask only one more question. I am 

going to submit questions, additional questions to all of you. As you 

will see, my modus operandi is not to ask questions and have staff 

look at the transcript. I don’t know anything about the things I 

have been asking you. So I am trying, in my own role as Chair of 

the Subcommittee, to understand what it is you do. I am not a very 

good person for staff simply to put something on my desk and say, 

you sign here, Eleanor. So I got to have at least some sense, and 

I don’t know how to get it outside of the inside here if I don’t learn 

by asking questions of those who come before me in the Subcommittee. Rarely am I trying to get the agency on something, because if we knew about that, we would call the agency and not simply use a hearing. 

46 

I need to know about contractors supervising contractors. This 

has been an endemic problem in the government, and we see it in 

Oversight and Government Reform and huge and horrid abuses. 

Above all we have been impressed by the fact that the government 

does not—perhaps you do—have the resources to supervise the contractors. So they can’t supervise the contractors in the first place, 

and then they have contractors that don’t supervise supervising 

other contractors. Why should I have any confidence in that kind 

of process? 

Some of the testimony—I forget who mentioned this, or Mr. 

Grunley told us among those who mentioned contractors supervising contractors. First of all, I want to know about the process, 

and then I want to know what, if anything, can be done about it. 

Mr. GRUNLEY. The process has been where GSA has not had the 

staff to have day-to-day inspection and project management on the 

job sites, they have hired large firms that provide manpower. I 

have found that the manpower is extremely competent in most 

cases. And where it has worked the best is where there is still a 

strong contracting officer or a project exec for GSA who has the 

oversight that will set the rules straight very early on what they 

are looking for, that they are typically looking for. 

Ms. NORTON. Has there been sufficient contract officers? 

Mr. GRUNLEY. Excuse me? 

Ms. NORTON. Has there been such oversight? 

Mr. GRUNLEY. Absolutely. Especially the last few years. 

Ms. NORTON. For large projects you have found for construction 

projects there has been a contracting supervisor—— 

Mr. GRUNLEY. Working for GSA on our job site. 

Ms. NORTON. Right. So what about the contractors’ supervision 

of other contractors? Are you satisfied with that as well? 

Mr. GRUNLEY. Yes, and especially the last few years. When I first 

saw this was in the mid-1990s. We were actually doing a job in 

Baltimore, not for the National Capital Region. And there was 

three employees that worked for the construction manager, and 

there was nobody on site for GSA, and we felt these people ran 

over us and around us and everything they could do. 

Ms. NORTON. I am asking this question out of your own testimony, where you said that—and I don’t have the sections—where 

you mentioned that it was a problem, although not for you. And we 

understand that you are a big contractor, sir, but in your experience it had been a problem of contracting, otherwise I wouldn’t be 

raising it. I don’t know anything about contractors supervising, so 

I got to have got it from somewhere. So would you talk to us about 

the experience of others then? 

Staff brings to me the page, and it is not numbered in your testimony so I can at least know what I am asking. What you say is 

the approach is necessary in order to assure the government that 

construction activities are being performed and documented in accordance with the contract requirements. However, what seems to 

have resulted from this approach is an increase in general contractor staffing necessary to be responsive to CM staff assigned to 

the project. My sense is that we may have taken this approach to 

a point where there is a loss of efficiency and improvement can be 

made. 

47 

Mr. GRUNLEY. This is my personal opinion. The construction 

management firms that are being hired to do that work are very 

large firms. They are doing work for GSA and other government 

agencies all over the country, and it is very important for them 

when they get a contract to do a wonderful job. In doing a wonderful job, they look to have larger staffs. They will go back to GSA 

and say, we really think we need a safety officer, we need two more 

inspectors, whatever the issue is. Sometimes they are granted 

those larger staffs, and other times they are not. When they increase their staff, we tend to need to have to increase our staff because of just additional oversight. 

That is the lesser problem than we have had, and we do not have 

this issue with GSA, we have it with other Federal agencies, where 

they have hired who I consider to be abusive construction managers, who I think—and they do not have the mission of the Federal Government. They have a mission to beat up on the contractor. 

We do not see that at GSA, though. 

Mr. WINSTEAD. Madam Chair? 

Ms. NORTON. Yes, Mr. Winstead. 

Mr. WINSTEAD. The increased use of the CMC, construction management contractor, option has since the beginning of the 1990s increased a lot, but basically they are on site. We have a project manager who is a full-time GSA employee to assure quality assurance 

by the contractor and the building. They don’t actually supervise 

the contractor. 

I think what Ken is complaining about is that because of our increased use of CMC, because we find that we can manage a very 

complicated project, looking at cost implications of a major courthouse by the expertise in the private sector, what he is concerned 

about, I think, is the fact that our increased use of it means there 

are more people on the quality assurance task than there were before, and then he needs more people to respond to their questions 

and work with them. So I think it has increased the burden—— 

Ms. NORTON. I see the issue, particularly having sat on oversight 

and reform hearings, except that it is hard for me—I understand 

what you are saying. I am going to give you an example in a moment that I think either may show this is valuable, or that it didn’t 

happen in the example I cite. 

The problem that the Federal Government has faced in recent 

years is essentially that nobody was supervising large contracts. 

Huge, terrible headlines everywhere. Some of this came from Iraq. 

Some of it came here, because the Government Oversight and Reform is about that, oversight of every Federal agency. We have had 

before us, you know, DOD, the State Department, you know, some 

of these with the most horrendous stories. 

So here I am, and the contractor says, look, GSA, we have to hire 

more to respond to their hiring more of these construction managers. But what it says to me is that for these large contracts, you 

are doing what we have found is absent very often in very large 

contracts of the Federal Government; that is to say, not putting 

that money out there and having nobody on staff with the expertise 

who is supervising. 

Yes, more, that means more cost, I guess, passed on to the government, but what we have found in these oversight hearings is 

48 

very frankly we would rather incur the costs because of the really 

horrible—I can’t even begin—they range from straight out stealing 

and fraud to inefficiency that makes GSA look like the picture of 

efficiency. Left to their own devices, people spend money on—wow, 

on things that the taxpayers have found shocking in my oversight 

hearings. So it may be as long as you pass this, and I bet you do, 

the costs, on to the Federal Government, Federal Government 

Oversight and Reform is asking for that rather than to lose, I am 

telling you, billions of dollars for failure to give appropriate oversight. 

Mr. WINSTEAD. Madam Chair? 

Ms. NORTON. Go ahead. 

Mr. WINSTEAD. I would mention the Grunley firm has a very 

strong presence in a growth market, as I view it, and that is the 

renovation of these older buildings. I mean, they have done the Department of Interior, they are doing the EEOB, and that work can 

be much more complicated than a new field office of the FBI or a 

new branch office under lease-construct for SSA. Obviously, the security issues at the EEOB and Interior—obviously at EEOB are 

huge. And so that is also—— 

Ms. NORTON. Historic problems. 

Mr. WINSTEAD. —that is why we on quality assurance and contract—— 

Ms. NORTON. Are you saying you want it there, but not in other 

places? 

Mr. WINSTEAD. I think there are ways that we can—look, this is 

the first time with this testimony this morning, quite frankly, I 

have heard concern by him about this issue of we have got more 

CMCs, and I am having to hire more, so obviously that is reflected 

in his cost. And we ought to look at that and see what that pairing 

is—— 

Ms. NORTON. Good. 

Mr. WINSTEAD. —and figure if it is effective or not. And we will 

be happy to do that. 

Ms. NORTON. Can I give you this example? I don’t know if it is 

even relevant to CMC. I am over at DOT on another matter altogether. An employee comes out and says, oh, my goodness, what 

are we going through? They moved us all out of a floor or so of 

DOT, and they completely are redoing how it is set up. And she 

said, oh, my Lord, we are in a new building, and now we are 

doing—and this is just a few weeks ago. 

And I had somebody from the agency there, and I said, what is 

she talking about? They said, well, there were, you know, in order 

to—there were some spaces that were too small, there were some 

spaces—they were finding that out now. 

Why is it they are finding that out, Mr. Winstead? I guess I 

should just put it that way. I said, who is paying for it? I sure hope 

the contractor is paying for it. 

Mr. WINSTEAD. In the case of the DOT, they are still finishing 

out some work on several floors there. And I think what DOT’s requirements were in their housing plan was to us in advance. We 

had a good project manager working with JBG, who was the lease 

construction firm, but there were some issues in terms of the tenant agency changing some space configuration essentially after the 

49 

fact. So we have been trying to work with that and trying to get 

it done. 

So I think that is what you saw was the work that is still being 

finished out at DOT. And Bart and I were just over there talking 

to the Federal Highway Administrator about his section of that 

building. 

Ms. NORTON. Part of what I was told is that there was—and this 

may be related to what Art said about the time between the lease 

and its execution, that people are wanting to get into the building. 

And so it rings true when you say something about, well, you 

know, some of this stuff wasn’t really completely done. I suppose— 

and trade-offs are what we have to be ready for. I suppose I would 

rather take—particularly with the agency rapidly wanting to move 

in, I would rather take that kind of trade-off than to have a long 

lag time between execution of the lease and signing of the lease if 

that was the reason. 

What would bother me is after-the-fact changes that you just 

mentioned by the agency. Why should the agency, which, in the 

case of this building and any other I can think of, had an enormous 

amount of time to consider what it needed and has built a huge 

building out there, why should it be allowed to do after-the-fact 

changes? 

Mr. WINSTEAD. Well, number one, you know, we had a—part of 

the balance and part of the enforcement of that contract is obviously not to cost either the agency or the government more. But 

the reality was there were some subsets of DOT, some of the modal 

groups within like highway or transit, that took—they took longer 

getting their requirements in. And that is what has led to this. I 

can get for the Committee from NCR exactly what those costs have 

been. 

Ms. NORTON. But could they have done that and you sign a 

lease? I mean—— 

Mr. WINSTEAD. Yeah. I mean, the reality is, had we gotten all 

the requirements vetted early enough from the tenant agency, 

some of this would not have occurred. That is the reality. 

Ms. NORTON. Well, Mr. Turowski, is there, in your experience, 

outside and inside, is there a way to somehow have called the question at a point in time? Or are these changes just inevitable no 

matter what happens and the Government just needs to be prepared to absorb the cost? 

Mr. TUROWSKI. Well, lease changes in a building in excess of 1 

million square feet are fairly difficult to avoid, particularly given 

the time from the, I believe—and I am going on memory here, 

recollection—particularly in projects of that size from the creation 

of the original program requirements, which can be up to 3 years 

later when the space is being built out. So that is a bit of an unusual circumstance, I would say, or atypical. 

Ms. NORTON. The lesson there is, of course—and here you have 

dealing with more than one agency in the building; is that right? 

Department of Transportation—is Federal Transportation Agency 

in the building? 

Mr. WINSTEAD. It is all occupied. The million three square feet 

are all occupied by the DOT. 

Ms. NORTON. Who is paying for the changes? 

50 

Mr. WINSTEAD. Oh, who is paying for the changes? Basically it 

is within—it would be under our contract lease agreement with 

JBG, and we would be responsible and the tenant agency. 

Ms. NORTON. So the tenant, namely the Department, is paying 

for it out of its agency budget, right? 

Mr. WINSTEAD. Yes. 

Ms. NORTON. So the Government is paying for it. 

Mr. WINSTEAD. That is correct. 

Ms. NORTON. It was not a mistake on the part of the contractor? 

Mr. WINSTEAD. No. 

Ms. NORTON. And I do understand what Mr. Turowski was saying. We really don’t expect perfection in this process. And we all 

expect some losses on both sides. For example, the competition 

means, you know, it is your risk. If you get the contract, you know, 

you got it. If you didn’t, it is the risk you take. But I don’t want 

to accept the risk of everybody signs on and somebody over here 

is just not signing, even though he doesn’t have anything to do 

with the lease. And I don’t want to take the risk of the time between the agency signing and GSA signing is excessive. So I am 

trying to measure the differences. 

Let me say that there are a lot of things that I would have asked 

about simply to establish that GSA is doing a very good job in some 

respects. Some of them—I mean, Mr. Grunley had mentioned best 

value, which I have looked at for some time. And it does seem— 

you know, having moved from lowest bid to best value, looking at 

how it is done, it is done fairly. I have seen GSA oversee the certified apprenticeship program. I have some terrific misgivings, but 

I am going to be working with GSA on that. It was very important. 

The certified apprenticeship program is really not simply about getting work. Most of these apprentices won’t come from—certified apprentices, certainly won’t come from the people in my district who 

need it most. 

But if you look at what the best contractors want, they really do 

want the people who have had that kind of training and are not 

working with people who have thrown together apprenticeship programs. And then you get somebody who really doesn’t know how 

to do the job. 

In working with GSA for—we have heard good things about construction manager as opposed to no oversight, know about the cost, 

we understand the tradeoffs. Some tradeoffs we are willing to accept. 

We heard about security. And I am on Homeland Security. I also 

represent the District of Columbia. I don’t lightly tread on that. I 

am not satisfied that GSA is the leader there. There is every indication that who leads the band are the people whose only mission 

is security. And that is very bothersome to the Subcommittee. We 

are going to be looking at what we can do about that. It may take 

some statutory changes; it may take other kinds of changes. 

And because of my long experience with GSA, I still regard it as 

the repository of extraordinary expertise available nowhere else. I 

also see it dwindling, going, retiring. I am very concerned about it 

and doing all I can. That is why you hear me talking about the intern program. I would like to see it expanded. It is in the best interest of the Government. 

51 

I am not going to be able to get that done unless I can assure 

the Government, as the Government has required, on, for example, 

the substitute it gives for doctors, lawyers and Indian chiefs to go 

to certain places in the country. If I can assure the Government, 

I think I can get some kind of trade-off there, so you don’t have 

just six, you begin to replenish the supply. 

Because today for, let’s say, a young person interested in real estate work, the question is, shall I go with Mr. Turowski’s company, 

Mr. Grunley’s company, or the GSA? I will tell you what. If they 

take very bright people that just graduated, have some interest, it 

is no contest; the Government isn’t going to get them. So one of the 

things the Government has to say is, what is it that could make 

people want to come here? Or with respect to those people who 

work for GSA and could then go off, not simply come here to this 

division, get expertise and then fly off to the Federal sector. 

I want to thank each and every one of you for bearing with me 

so long while essentially I was engaged in a training exercise for 

myself and the Subcommittee. And I promise that you will see the 

results of this hearing. 

Thank you very much. The hearing is adjourned. 

Before it adjourns, excuse me, I do want to submit for the record 

the opening statement of the Ranking Member. 

Ms. NORTON. And I do want to say that the Congress went out 

of session yesterday. And so the Ranking Member, like every other 

Member of Congress except me, could be expected to return to his 

own constituents. And I appreciate that Mr. Graves, in fact, is just 

as interested in this matter as I am and has left his own opening 

statement in that regard. 

Now the hearing is adjourned. 

[Whereupon, at 1:56 p.m., the Subcommittee was adjourned.] 

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