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53–059 PDF 2009

RECOVERY TRACKING HEARING #3: 

FOLLOWING THE DOLLARS 

TO THE JOBS 

(111–72) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

October 27, 2009 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JAMES L. OBERSTAR, Minnesota, Chairman 

NICK J. RAHALL, II, West Virginia, Vice 

Chair 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

GENE TAYLOR, Mississippi 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

BRIAN BAIRD, Washington 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

MICHAEL A. ARCURI, New York 

HARRY E. MITCHELL, Arizona 

CHRISTOPHER P. CARNEY, Pennsylvania 

JOHN J. HALL, New York 

STEVE KAGEN, Wisconsin 

STEVE COHEN, Tennessee 

LAURA A. RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SOLOMON P. ORTIZ, Texas 

PHIL HARE, Illinois 

JOHN A. BOCCIERI, Ohio 

MARK H. SCHAUER, Michigan 

BETSY MARKEY, Colorado 

PARKER GRIFFITH, Alabama 

MICHAEL E. MCMAHON, New York 

THOMAS S. P. PERRIELLO, Virginia 

DINA TITUS, Nevada 

HARRY TEAGUE, New Mexico 

VACANCY 

JOHN L. MICA, Florida 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

VERNON J. EHLERS, Michigan 

FRANK A. LOBIONDO, New Jersey 

JERRY MORAN, Kansas 

GARY G. MILLER, California 

HENRY E. BROWN, JR., South Carolina 

TIMOTHY V. JOHNSON, Illinois 

TODD RUSSELL PLATTS, Pennsylvania 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

JOHN BOOZMAN, Arkansas 

SHELLEY MOORE CAPITO, West Virginia 

JIM GERLACH, Pennsylvania 

MARIO DIAZ-BALART, Florida 

CHARLES W. DENT, Pennsylvania 

CONNIE MACK, Florida 

LYNN A WESTMORELAND, Georgia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

MARY FALLIN, Oklahoma 

VERN BUCHANAN, Florida 

ROBERT E. LATTA, Ohio 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

AARON SCHOCK, Illinois 

PETE OLSON, Texas 

(II) 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

ELEANOR HOLMES NORTON, District of Columbia, Chair 

BETSY MARKEY, Colorado 

MICHAEL H. MICHAUD, Maine 

HEATH SHULER, North Carolina 

PARKER GRIFFITH, Alabama 

RUSS CARNAHAN, Missouri 

TIMOTHY J. WALZ, Minnesota 

MICHAEL A. ARCURI, New York 

CHRISTOPHER P. CARNEY, Pennsylvania, 

Vice Chair 

DONNA F. EDWARDS, Maryland 

THOMAS S. P. PERRIELLO, Virginia 

JAMES L. OBERSTAR, Minnesota 

(Ex Officio) 

MARIO DIAZ-BALART, Florida 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

MARY FALLIN, Oklahoma 

BRETT GUTHRIE, Kentucky 

ANH ‘‘JOSEPH’’ CAO, Louisiana 

PETE OLSON, Texas 

(III) 

(V) 

CONTENTS Page 

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

TESTIMONY 

Fernandez, John R., Assistant Secretary of Commerce for Economic Development, Economic Development Administration .................................................. 8 

Gold, Larry, Director of Community Services, Covenant House DC ................... 33 

Grunley, Kenneth M., President, Grunley Construction Company, Inc. ............ 33 

Kendall, Bruce, Director, Office of Facilities Engineering and Operations, 

Smithsonian Institution ....................................................................................... 8 

McKirchy, Kathleen, Director, Community Services Agency, Metropolitan 

Washington Council, AFL-CIO, Accompanied by Camille Cormier, Director, 

Local Programs and Policy, Wider Opportunities for Women .......................... 33 

O’Keefe, John P., Division President, Public Division, Clark Construction 

Group, LLC ........................................................................................................... 33 

Peck, Robert, Commissioner, Public Buildings Service, U.S. General Services 

Administration ..................................................................................................... 8 

STATEMENT SUBMITTED BY MEMBERS OF CONGRESS 

Carnahan, Hon. Russ, of Missouri ......................................................................... 50 

Norton, Hon. Eleanor Holmes, of the District of Columbia ................................. 51 

Oberstar, Hon. James L., of Minnesota ................................................................. 54 

Walz, Hon. Timothy J., of Minnesota ..................................................................... 57 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Cormier, Camille ...................................................................................................... 99 

Fernandez, John R. .................................................................................................. 58 

Grunley, Kenneth M. ............................................................................................... 71 

Kendall, Bruce ......................................................................................................... 85 

McKirchy, Kathleen ................................................................................................. 91 

O’Keefe, John P. ....................................................................................................... 102 

Peck, Robert ............................................................................................................. 110 

SUBMISSIONS FOR THE RECORD 

Fernandez, John, Assistant Secretary of Commerce for Economic Development 

Administration (EDA), responses to questions from the Subcommittee ......... 65 

Grunley, Kenneth M., President, Grunley Construction Company, Inc.: ...........

List of ARRA Funded Projects ..................................................................... 77 

Business profile ............................................................................................. 78 

Kendall, Bruce, Director, Office of Facilities Engineering and Operations, 

Smithsonian Institution, responses to questions from the Subcommittee ...... 89 

McKirchy, Kathleen, Director, Community Services Agency, Metropolitan 

Washington Council, AFL-CIO, Accompanied by Camille Cormier, Director, 

Local Programs and Policy, Wider Opportunities for Women, responses 

to questions from the Subcommittee .................................................................. 96 

Norton, Hon. Eleanor Holmes, a Representative in Congress from the District 

of Columbia, letter to Chairman Oberstar from Mayor Adrian M. Fenty 

from the District of Columbia ............................................................................. 4 

Peck, Robert, Commissioner, Public Buildings Service, U.S. General Services 

Administration, responses to questions from the Subcommittee ..................... 119 

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(1) 

RECOVERY TRACKING HEARING #3: 

FOLLOWING THE DOLLARS TO THE JOBS 

Tuesday, October 27, 2009 

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 2:10 p.m., in Room 

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

[Chair of the Subcommittee] presiding. 

Ms. NORTON. This recovery tracking hearing number 3 is open 

for business. 

The American Recovery and Reinvestment Act of 2009, which we 

call the Recovery Act, or the stimulus, signed into law on February 

17th, 2009, provided 5.5 billion for the General Services Administration, 4.5 billion of which was to convert GSA buildings into highperformance green buildings in all 50 States, the District of Columbia, and the 4 territories. In addition, GSA received $300 million 

for border stations and lands of entry, and an additional $750 million for repair, alteration, and construction of Federal buildings 

and courthouses, $450 million of which was allocated to the new 

Department of Homeland Security headquarters compound buildings to be located on the St. Elizabeth’s campus in ward 8 of the 

District of Columbia. 

The Smithsonian Institution received an appropriation of $25 

million for facilities capital, which was to be used for repair and 

revitalization of its many deteriorating facilities. The Economic Development Administration received $150 million, almost all of which was allocated for strategic grant investments in areas hard hit by the current recession. 

The Recovery Act is premised on the direct spending that data 

from many decades has shown has the best record for simultaneously stimulating the economy, providing jobs, and meeting the 

ongoing and existing responsibilities of government at every level 

for public infrastructure. The Recovery Act’s primary purpose is to 

stimulate economic recovery through investments that preserve 

and create jobs, spur technological advances to enhance energy conservation, and improve infrastructure to provide long-term economic benefits. 

Our goal, though, is not only to distribute the funds quickly and 

to spark short-term job creation, but to ensure that these investments will lead to long-term, higher-skill, and higher-wage jobs. To 

2 

this end we will be interested in how the apprenticeship training 

funds I got included in our package are being implemented. 

Today, nearly 8 months after the passage of the Recovery Act, we 

want to know specifically about results. How many jobs have been 

created? How much has been obligated and spent? How much is 

left to be spent? When will it be spent, and whether it will be spent 

by the September 2010 deadline. If GSA knows that 38,000 jobs 

will be produced by the DHS headquarters construction over a period of several years, I am also interested in its calculation of the 

number of jobs to be created by the total $5.5 billion. 

This Subcommittee’s tracking hearings will continue throughout 

2010, the duration of the stimulus funding, because of our unique 

responsibility among the various Committees that are charged with 

oversight of stimulus funds. Unlike other funds in the Recovery 

Act, the funds under our jurisdiction are not distributed to the 

States. GSA, EDA, and the Smithsonian are not pass-throughs, but 

instead directly administer stimulus funds and contract for the 

work. This Subcommittee in turn bears a similar direct responsibility for the stimulus funds under our jurisdiction, and must continue to conduct especially vigorous oversight of these agencies. 

Americans can find the projects in their States and localities on 

line, and we invite their comments and observations on job creation, efficiency, and other aspects of the work. 

The stimulus has given the GSA an unparalleled opportunity to 

build the biggest development in its 60-year history, the Department of Homeland Security headquarters compound of three buildings and the reuse of 60 historical structures. This development 

may be the largest project anywhere in the United States today. 

This work will occur over a period beyond the initial stimulus funding, over several more years. However, based on the difficulty I encountered in securing the first funding, I know that additional 

funding will depend on how well and how quickly the current work 

proceeds. So much is at stake that we will hold special hearings on 

the DHS project alone from time to time. Today we want to understand what has begun there, what has been accomplished so far, 

who and how many have been hired, and what the timeline is on 

the DHS headquarters overall, among other questions. 

I was able to get the first sizable funding for the DHS headquarters project only by arguing that the project would provide a 

clear, proven case for job creation for a vital Federal agency. I will 

not be able to get the necessary additional funds, totalling more 

than $2 billion for the DHS compound, without a showing of significant progress both in job creation and in efficiently getting the 

first building up, while simultaneously beginning work on making 

the historic structures usable. 

In addition, the GSA stimulus funding also bites into the GSA 

backlog of repair for its vast inventory. The Subcommittee expects 

a quick start on much of that work in particular. Many repair and 

rehabilitation projects do not require extensive design work, and 

therefore can be implemented quickly to provide jobs of many kinds 

at a variety of skill levels, while meeting the purpose of stimulating 

the economy. The repair and alteration of GSA’s existing Federal 

buildings will also retain space in the Federal inventory for occupancy by Federal agencies, which helps prop up the declining FedVerDate Aug 31 2005 17:17 Mar 12, 2010 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 P:\HEARINGS\ED\10-27-09\53059.TXT JASON
3 

eral Building Fund that in turn returns rent payments to the Federal Government to fund repairs and rescue the GSA inventory 

from another cycle of decline. 

The Smithsonian Institution likewise has a huge backlog of repairs for facilities. Although the Recovery Act funding for the 

Smithsonian is small relative to the need, these funds should permit a more systematic approach to shoring up its infrastructure, 

while creating jobs. 

For the record, I also want to comment today on highway stimulus fund spending by the District of Columbia. Though tracked 

through another Subcommittee of this Committee, the Committee 

has had oversight hearings on the Recovery Act spending by agencies and the States for all of our Subcommittees. At the last hearing of the Full Committee, I was chagrined to see the District of 

Columbia listed next to last among the 50 States and the District 

of Columbia on highway stimulus fund spending. I want to report 

today, however, that 70 percent of the District’s highway stimulus 

funds have been awarded or spent. 

As the stimulus bill was being considered, I took pains to see 

that the District was treated as a State for funding purposes. In 

reality, however, the District could not begin its work, like States 

with large departments of transportation staffs on hand, but instead must rely almost entirely on contractors. Now that most of 

the work is in progress, it appears that the city is using the funds 

as Congress most desired, for energy conservation and sustainable 

projects that facilitate walking, cycling, and mass transit improvements, and other projects that improve the local retail and commercial environment. 

Just yesterday Chairman Jim Oberstar and I went to Murch Elementary School, where the National Center for Safe Routes to 

School awarded Murch Elementary the James L. Oberstar Safe 

Routes to School Award for being the best in the country in encouraging walking and biking to school. Murch was able to win the 

award because the District added $4 million from its stimulus 

funds to its existing infrastructure funding for the Safe Routes to 

School program. Without objection, I am placing a letter from the 

Mayor of the District of Columbia detailing this progress into the 

record. 

[Information follows:] 

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Ms. NORTON. We look forward to hearing from the GSA, the 

EDA, and the Smithsonian Institution about what exactly has been 

accomplished. We are also pleased to welcome private contractors 

who have received Recovery Act funds. 

With that, I am pleased to invite the Ranking Member to offer 

remarks at this time. 

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

Thank you for holding this very important hearing. As you said, 

this is the third oversight hearing by the Subcommittee under your 

leadership on the Recovery Act funding to agencies within our jurisdiction. 

As everybody knows, in February, Congress enacted the bill, a 

bill that the administration and those who were supporting it touted as necessary to create jobs and to stimulate the economy. At the 

time the administration asserted, both publicly and in writing, that 

spending that $787 billion of taxpayers’ funds would create an estimated 3- to 4 million jobs. Now, doing some simple math, that 

works to close to $200,000 per job created or saved. That was the 

promise. That was the hope. 

Since the Recovery Act passed in February, the national unemployment rate has unfortunately increased to almost 10 percent, to 

actually 9.8 percent. Unfortunately, in the State of Florida it is 

now above 10 percent; it is at 11 percent. Now, according to the Recovery.gov Web site, and I have it here, just over 30,000 jobs have 

been created or saved with $173 billion paid out so far. Simple 

math will tell you that that is basically $5.7 million per job. Obviously, that should give everybody serious reasons to be concerned, 

because we obviously must do much better than that. 

Now, as I mentioned before in previous hearings, the priority 

under this spending bill was supposed to be creating jobs. That was 

its stated purpose. That was what was promised to the American 

people. However, I have continued raising the concerns that other 

issues have trumped, unfortunately, the priority of creating jobs. 

For example, out of the $5.5 billion for GSA’s Federal Building 

Fund, not less than $4.5 billion was designated for converting Federal buildings to high-performance green buildings. I have brought 

this up a number of times. Now, look, obviously energy efficiency 

and conservation is an important issue. It is one that I greatly support. But the priority of that legislation and the priority of the 

times, I think, dictate that the priority has to be creating jobs. 

With all that said, I am interested in hearing from witnesses 

today on their progress and how many jobs they have created so 

far. I do understand that the Economic Development Administration has obligated all of its funds. And we know that EDA has a 

track record of actually leveraging taxpayer dollars to create jobs 

and to spur investment by the private sector, because they leverage 

it with the private sector. For example, EDA investments in fiscal 

year 2007 created or retained American jobs at an average cost of 

$4,000 per job, and EDA leveraged over $26 in private sector capital investment for every dollar, taxpayer dollar, invested. That is 

pretty good bang for the buck. That is an example of the type of 

return on investment that we should insist upon for the enormous 

amount of money that the taxpayer, their children, and their 

grandchildren have been asked and have been forced to, frankly, 

7 

put forward. So I am interested in hearing whether the same job 

figures are holding for EDA’s stimulus funds. 

I hope as we move forward on those Recovery Act projects that 

we can see significantly more jobs created and a good return on investment for the American taxpayer. I look forward to hearing from 

the witnesses today on this important issue. And I once again need 

to thank the Chairwoman of this Subcommittee for her diligence in 

making sure that job creation is emphasized and that we continue 

to do oversight. And while I thank you, Madam Chairwoman, I 

would be remiss if we don’t thank the Chairman of the Full Committee, who has been very adamant on trying to make sure that 

we continue to emphasize that as well. 

Thank you, Madam Chairwoman. I look forward to the hearing. 

Ms. NORTON. I thank you very much, Mr. Diaz-Balart. 

Ms. NORTON. And I just want to indicate that I recall your view 

and the view of the Minority in the Congress that more of this 

money should have gone for transportation and infrastructure, and 

less for other matters. And I do want to caution you about calculating the expenditure of money over time by looking at obligated 

money compared to number of jobs. The obligated money is an 

amount of money obligated, still going out into the economy, and 

does not reflect the number of jobs that are created over time. And 

that is the only way to see—when we see what money has been 

spent, that is the only way to know the number of jobs. 

But I understand your concern, and that is why we are holding 

these hearings. And I very much appreciate your active and cooperative participation in all of these hearings. 

Are there remarks from the other Members? Mr. Walz, do you 

have any remarks? Mr. Walz of Minnesota? 

Mr. WALZ. Well, thank you, Madam Chairwoman and the Ranking Member, for holding this hearing. I will just go ahead, with no 

objections, I will put my statement in the record so we can hear 

our witnesses. 

Ms. NORTON. Thank you very much, Mr. Walz. I appreciate you 

being here. 

Mr. Carnahan of Missouri. 

Mr. CARNAHAN. Thank you, Madam Chair. I did have some brief 

remarks. 

I want to thank you and the Ranking Member for really leading 

this hearing to examine the execution of projects by GSA, EDA, 

and the Smithsonian funded by the American Recovery and Reinvestment Act. 

Part of the Recovery Act that I am particularly interested in is 

the 5.5 billion apportioned to GSA to upgrade its facilities. Specifically, the Recovery Act directs 750 million to renovate and construct Federal buildings and courthouses, 300 million to renovate 

and construct land ports of entry, and 4.5 billion to convert Federal 

buildings to high-performance buildings. Among the many projects 

funded will be the Robert A. Young Federal Building in St. Louis 

to make high-performance green building modernizations. Through 

this investment, the Federal Government will be one step closer to 

meeting the energy goals of the Energy Independence and Security 

Act. 

8 

I believe it is important for the Federal Government to lead by 

example by making our buildings more energy efficient. One concern I do have is that as we invest in high-performance buildings 

is that GSA have the necessary tools to not only retrofit our existing government building stock to high-performance buildings, but 

also to ensure that these buildings are properly maintained and operated at their high-performance standards. We cannot and should 

not invest in high-performance buildings if we are not training 

those facility managers to run those buildings and keep them 

maintained and operating efficiently. 

In closing, I want to thank our witnesses for joining us today, 

and look forward to hearing their testimony. 

I yield back. 

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

Now we will go to the first panel of today’s witnesses: John 

Fernandez, Assistant Secretary of Commerce for Economic Development at the Economic Development Administration; Robert Peck, 

Commissioner of Public Buildings Service, GSA; and Bruce Kendall, Director, Office of Facilities Engineering and Operations at 

the Smithsonian Institution. 

You may proceed in the order in which you are sitting. Mr. 

Fernandez. 

TESTIMONY OF JOHN R. FERNANDEZ, ASSISTANT SECRETARY 

OF COMMERCE FOR ECONOMIC DEVELOPMENT, ECONOMIC 

DEVELOPMENT ADMINISTRATION; ROBERT PECK, COMMISSIONER, PUBLIC BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION; AND BRUCE KENDALL, DIRECTOR, 

OFFICE OF FACILITIES ENGINEERING AND OPERATIONS, 

SMITHSONIAN INSTITUTION 

Mr. FERNANDEZ. Thank you very much. 

Ms. NORTON. Please put your microphone as close as you can. 

This room has difficulty hearing. 

Mr. FERNANDEZ. Madam Chair, Ranking Member Diaz-Balart, 

Members Walz and Carnahan, thank you for this opportunity to 

testify on behalf of the Economic Development Administration. 

Through our investments in local initiatives developed to create 

jobs and leverage private investment, EDA continues to seed communities for sustainable economic growth. 

As part of the American Recovery and Reinvestment Act of 2009, 

EDA received $150 million to respond to areas in the Nation that 

had experienced sudden and severe economic dislocation. At the 

outset EDA determined that our implementation strategy would 

give preferences to projects that had the potential to quickly stimulate job creation and leverage private capital investment, while advancing regional economic development strategies. 

EDA responded with the appropriate sense of urgency, while not 

sacrificing the important. Less than a month after ARRA’s enactment, EDA published a Federal Funding Opportunity notice and 

distributed the funds to each of our six regional offices. EDA established a stretch goal to have all of our ARRA funding obligated by 

the end of fiscal year 2009, and I am pleased to report that we met 

that goal. And as of September 25th, 2009, we had obligated the 

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9 

lion is available for salary and expense funding, which we will continue to use as part of the administration and oversight of EDA’s 

ARRA awards. 

With its ARRA appropriation, EDA funded 68 projects in 37 States, ranging in size from $184,000 to $6.4 million. The vast majority of our investments, in fact 96 percent of our investments, are 

funding construction projects, projects including traditional infrastructure as well as business incubators. These investments support a diverse mix of economic development activities linked to the 

recipient’s regional economic development strategy. For example, EDA invested $4.7 million in the City of Santa 

Cruz, California, to help create the Digital Media Center @ the 

Tannery. This is a business incubator for digital media companies. 

EDA invested $800,000 in the Delaware Technical Community College to construct a Green Building Technology and Alternative Energy Systems Training Center. In Savannah, Georgia, EDA invested $2 million in the Georgia Ports Authority to enhance the 

port’s service capacity. 

The Recovery and Reinvestment Act also required new measures 

for unprecedented accountability and transparency. We have directed our regional office to develop specific outreach initiatives to 

assist our recipient partners in meeting these additional reporting 

requirements. And I am pleased to report that as of today, 98 percent, really all but one of our grant recipients has successfully reported. 

Throughout this process, EDA staff here in Washington as well 

as in our field offices has been untiring in their efforts. Their dedication and commitment has been outstanding. I wish to congratulate them on their accomplishments to date. 

Madam Chair, EDA has a long and very successful relationship 

working with you and this Committee. I look forward to working 

with you as we strive to strengthen EDA, but, more importantly, 

strengthen the American economy. And I thank you for your time 

today, for inviting me to give an update on EDA’s use of stimulus 

funds, and I look forward to answering any questions you might 

have. 

Ms. NORTON. Thank you, Mr. Fernandez. 

Mr. Peck. 

Mr. PECK. Thank you, Madam Chair. Good afternoon. And Ranking Member Diaz-Balart, Mr. Walz and Mr. Carnahan. I have a 

statement that I would like to submit for the record, and I will 

make brief remarks. Thank you for inviting me to appear before 

you today to discuss GSA’s contribution to the Nation’s recovery 

through the green modernization of our building inventory. 

The ARRA, the American Recovery and Reinvestment Act, gave 

us an unprecedented and exciting opportunity to contribute to the 

Nation’s recovery. As of today, GSA has obligated more than $1.4 

billion for Federal building construction projects funded by the Recovery Act, and we have expended over $57 million. We exceeded 

our goal of obligating $1 billion by August 1st, and we are well on 

our way to obligating another billion dollars by the end of the calendar year, for a total of $2 billion by December 31st. 

We project that 60,200-some jobs will be created from the $5.5 

billion in Recovery Act funding allocated to GSA. This projection is 

10 

based on the Council of Economic Advisers’ estimates of job creation. Initial reports indicate that as of October 23rd, 2009, our Recovery Act funding recipients have created or retained 773 jobs as 

a direct result of the $57 million in spending, and I would emphasize that that is direct spending to date. It does not include the 

multiplier effect of other jobs. And it refers to the direct work that 

is being done today out of the $1.4 billion. 

While contract award is the catalyst for money flowing through 

the economy, it is important to note that Recovery Act funds do not 

flow immediately following a contract award. Rather, payments to 

contractors for progress made as they do the work provides steady 

support for the economy over an extended period; not a jolt that 

lasts for a few months, but a longtime recovery. These are positive 

preliminary indications of GSA’s contributions to the economic recovery. 

We are leveraging our Recovery Act investments to begin to turn 

our large, varied, and stable inventory of buildings into a proving 

ground for green building technologies, materials, and operating 

practices. We are also moving forward with several leases required 

to move Federal employees out of buildings, and that will provide 

a $25 million stimulus through rent payments, including Recovery 

Act-funded relocation leases for the Lafayette Building renovation 

in Washington, D.C., and the Bishop Whipple Building in Fort 

Snelling, Minnesota. 

We have set interim target dates for project awards in each quar- ter to ensure that we obligate the $5 billion of the 5.5 billion that 

we are supposed to obligate by our target date of the end of fiscal 

year 2010; that is, September 30th, 2010. The projects we have 

funded are varied in scope, type and region, and cover our entire 

portfolio. For example, we are building a new courthouse in Austin, 

Texas, that incorporates many innovative green features, such as 

high-efficiency heating, ventilating and air conditioning systems, 

and extensive use of natural light. I attended the groundbreaking 

ceremony for that on September 2nd. I am excited that we are 

building this courthouse to achieve a LEED Silver certification. The 

excavation has begun on that courthouse and is already 80 percent 

complete. Building piers will be sunk beginning in mid-November. 

Our progress toward consolidating the Department of Homeland 

Security, as you noted, Madam Chair, at St. Elizabeth’s is on 

schedule. As we committed we would, we awarded a $435 million 

contract in August, of which 162 million was funded by the Recovery Act, for the design of a new energy-efficient, 1.18-millionsquare-foot Coast Guard headquarters. The award went to Clark 

Design Build, LLC, a local contractor in this area. As you are 

aware, as you noted, St. E’s will be the Washington metro area’s 

largest Federal construction project since the Pentagon, and will 

revitalize and spur economic development in Anacostia, and will 

feature green roofs, landscaped courtyards, and provisions to reuse 

surface water runoff. 

In addition to new project starts, we are enhancing projects already under way by adding new high-performance green features, 

and that is one important way in which we will reduce some of the 

backlog of needed repairs to our Federal buildings and also make 

our inventory more green. 

11 

The Recovery Act requires recipients of funds from GSA to submit quarterly reports. For this initial reporting period that will be 

completed October 31st, we utilized multiple media to help recipients with the reporting process. Our recipients have provided a lot 

of positive feedback about our call center, for example, and have 

expressed gratitude for our staff’s assistance. I am proud to report 

that 99 percent of PBS’ prime recipients have reported, and I can’t 

emphasize enough how much the White House Recovery Office is 

emphasizing on-the-ground, real-time reporting of actual jobs that 

are created as they are created. 

We are also excited that apprenticeship and preapprenticeship 

programs are an integral part of our Recovery Act programs. We 

launched the preapprenticeship programs with two contract awards 

worth $1.8 million. These programs will enroll more than 400 unemployed people. We have initiated a process for additional candidate organizations to apply for the preapprenticeship training 

programs. We issued a solicitation on October 14th, and proposals 

are due back to us on November 13th. 

Finally, we have identified 10 large Recovery Act projects representing about a billion and a quarter dollars in Recovery Act 

spending where project labor agreements may be used, and we are 

researching markets in several of those areas to make sure we do 

the PLA work right. 

We are also managing real estate in RWA-reimbursable work au- thorization projects to the tune of about $1 billion from other Federal agencies, most notably Social Security, State Department, 

NOAA, and DHS, and DHS Customs and Border Protection. We 

will also report on those as we do work. And to date I can tell you 

that we have authorizations from those agencies totalling $293 million in spending. 

In conclusion, I have just reported briefly on our accomplishments. You have in my written statement a list of all of the 

projects that have received at least partial funding to date, and I 

look forward to answering your questions. 

Ms. NORTON. Thank you for that report, Mr. Peck. 

Mr. Kendall. 

Mr. KENDALL. Chairwoman Norton and other distinguished 

Members, good afternoon. I am Bruce Kendall, Director of Facilities 

Engineering and Operations for the Smithsonian Institution. On 

behalf of the Institution, let me express my appreciation to you for 

this opportunity to testify on the tracking of Recovery Act dollars. The Smithsonian is extremely pleased to have received $25 million of stimulus funds from the American Recovery and Reinvestment Act of 2009. We are grateful for the support of the Administration and the Congress for the essential work now under way 

here in the District of Columbia on the National Mall, and at the 

National Zoo in Rock Creek Park, at the zoo’s Conservation Resource Center in Front Royal, Virginia, and at the Smithsonian’s 

Environmental Research Center on the Chesapeake Bay in 

Edgewater, Maryland. We have applied these funds expeditiously 

to 16 important repair and revitalization projects at the aforementioned locations. All contracts were competed, and all but two of 

these contracts were let to qualifying Small Business/8a set-aside 

firms in the local area, for a total of $16.5 million. This is an upVerDate Aug 31 2005 17:17 Mar 12, 2010 Jkt 000000 PO 00000 Frm 00019 Fmt 6602 Sfmt 6602 P:\HEARINGS\ED\10-27-09\53059.TXT JASON
12 

date to what we have previously provided in written testimony. 

With the exception of a small retainage, about $3 million, for unforeseen contingencies, the funds are completely obligated, and 

work is in progress. 

In the spirit of the Recovery Act, we anticipate substantial completion of the work by the end of 2010. Valuable work is being accomplished under this program and will make significant improvements to the safety and reliability of many of the Smithsonian’s 

buildings and systems. We are managing this work carefully to ensure the highest quality and safe delivery of products, while fully 

complying with the requirements for complete transparency and accurate reporting. The Smithsonian is gaining a great benefit from 

these funds while we create jobs for local craftsmen and laborers. 

Work on most of our contracts is under way, while reports on 

jobs created or retained are just starting to arrive. We anticipate 

that we will have created or assisted employers in retaining well 

over 100 jobs once the final reports are received. 

Thank you for this opportunity to provide an accounting of our 

Recovery Act dollars. I look forward to answering any questions. 

Ms. NORTON. Thank you, Mr. Kendall. 

Before I proceed with questions from the Members, I want to ask 

Chairman Oberstar and Mr. Perriello if they have any opening remarks. 

Mr. Oberstar. 

Mr. OBERSTAR. Madam Chair, it is very important for us to continue this process of hearings on the Recovery Act and holding Federal and State agencies accountable for the Recovery Act funds that 

we crafted into the recovery program. And in the end, it was an 

appropriations bill, but we did all the programmatic portion of it. 

And we expected the highway and highway safety, bridge, and 

transit accounts to move out quickly, and they did. Those funds 

were allocated within 13 days of the President signing the bill into 

law on February 17th. Thirteen days after that, we had States notified of their amounts for their respective DOTs under the allocation 

formula in Federal law, which the Recovery Act followed. And we 

now have some 70 percent of the funds either out for bid, under 

contract, or on construction site, over 6,000 highway projects. 

And when our next report—our next hearing will be held and our 

next report is received, we will be in the range of 185,000 direct 

construction jobs. There will be another 120,000 jobs in the supply 

chain supplying Redi-Mix, asphalt, sand and gravel, rebar, fencing, 

guard rails, and all that goes into highway construction. There is 

already a documented $6.5 billion payroll for those 180,000 construction jobs, and $900 million paid or being paid in Federal taxes 

alone. 

The public is getting its money back, it is getting permanent improvements, jobs are being created, and we are 130-some days—we 

are well past the halfway point. The work of other government 

agencies and programs has lagged behind the performance of the 

Federal Highway Administration. 

And what I want to understand from the GSA is that we had a 

December 2008 list that we requested of GSA and of a whole host 

of other government agencies. You gave us courthouses and ports 

of entry. But in the response that we got to questions asked was 

13 

that, quote, GSA did not expect Congress to authorize Recovery Act 

funds for modernization projects, and, in GSA’s view, that only a 

billion, a little over a billion dollars, was allocated in the appropriations process for courthouses and ports of entry. The first question 

I want you to respond to is how did that dichotomy occur? And I 

know that the language change occurred in the House-Senate conference and also with the intervention of OMB. 

But the second beef that I have, frankly, is that questions that 

we have submitted to GSA have taken up to 2 months to get answers. That is unacceptable. We expect you to respond. You took 

over 45 days to develop the final list of projects. There are people 

out there hungry for these jobs. And I don’t know what has taken 

so long, and I am unhappy with that. 

Further, on May 6th I sent a letter to GSA asking for a specific 

response to the renovation of the Federal building at United Nations Plaza in San Francisco. Five months later we got a response. 

That is not acceptable. 

Maybe GSA needs some stimulus to get enough people on board 

to answer our inquiries. We don’t have time to be bird-dogging; we 

expect you to respond. And I expect better response in the future. 

So let us go back to the first one. What was the problem that you 

had design-ready projects in December of 2008, but then didn’t proceed with those after the bill was enacted? 

Mr. PECK. Mr. Chairman, first may I say that—may I go back 

to the letter just for a moment? That is an unacceptable time period to respond to a letter. I arrived at GSA 2 months ago. I wasn’t 

aware that that letter had taken that long. But I can tell you that 

the question of responding to correspondence both from the Congress, from vendors and others is a matter of great attention to us 

at the moment, and I assure you you will get much faster answers, 

and I apologize. 

Mr. OBERSTAR. I accept that, and I will look forward to a quick 

response in the future. 

Mr. PECK. Yes, sir. 

Second, I am probably not the person with the right knowledge 

to respond to you, because, again, when I arrived at GSA, I asked 

for a briefing. I am aware of the projects that we have to date. I 

do not, but can provide you with some quick answers for the record 

on what happened between December 2008 and the list that was 

finally approved and that we have been working on. But as you 

note, it certainly does include a good number of full building modernizations and as well as some smaller-scale projects, which we 

believe we can get under way much faster. There are some projects 

that have broken ground. Many of them were fairly well into design by the time the stimulus money came in, and we were able 

to use it. And then other projects are very close to being awarded. 

I think that one of the problems we have, I will just make the 

note, is we are—obviously, these are directly funded Federal 

projects. We are not sending the money to anyone else to spend it. 

It is our money, your money, the taxpayers’ dollars that we are 

spending directly. And I believe that we have moved out very 

quickly on some of the large projects to put them in shape. To put 

the contracts out, I think you will find in the next two quarters 

that we will have most of our $5.5 billion out on the street in conVerDate Aug 31 2005 17:17 Mar 12, 2010 Jkt 000000 PO 00000 Frm 00021 Fmt 6602 Sfmt 6602 P:\HEARINGS\ED\10-27-09\53059.TXT JASON
14 

tract awards. There is just a—in heavy building construction like 

this, there is a time lag that sometimes you don’t see as much 

in—— 

Mr. OBERSTAR. You had a billion obligated and committed to specific projects by the beginning of August, and you anticipate, according to our Committee investigative staff report, a billion by the 

end of this calendar year; is that correct? 

Mr. PECK. That is correct. That is correct. Yes, sir. 

Mr. OBERSTAR. And do you have a detailed list submitted that 

you can submit to the Committee of those specific projects? 

Mr. PECK. Mr. Chairman, we have given you—in my statement 

we have a list of projects, but they don’t have the dollar amounts 

with them, which I will provide for the record. We do have that. 

We are up to a little over $1.4 billion as of today. 

Mr. PECK. One thing I will note and you should know about the 

numbers is that because of the slowdown in the economy, we are 

seeing construction bids coming back to us lower than we anticipated. So we have actually, for the $1.4 billion, awarded contracts 

that had earlier in the year we thought would be about $1.8 billion. 

So we are moving projects up on the list as we go. 

Mr. OBERSTAR. We have seen that in the Federal Highway Program with the States getting bids back 25 percent on average lower 

than final design estimates, final design and engineering estimates. 

So we are getting more dollars for the investment and more 

projects and more jobs created. 

Mr. PECK. That is also correct. If you take a look at our cost per jobs on the money spent, which is nowhere near the $1.4 billion, 

but the $57 million and 773 jobs—I hope I got that number right— 

we are down around 70-some-thousand dollars per job. 

Mr. OBERSTAR. Thank you. 

Mr. Fernandez, the EDA had moved out very efficiently and very 

effectively, had the best record of any of the agencies under our jurisdiction getting money out early to projects that had long been 

awaiting funding and that are specifically directed to job creation, 

industrial parks, and water and wastewater service, to industrial 

job growth and business development. I want to thank you and 

your staff throughout the country of staying on top of things. 

Mr. FERNANDEZ. Thank you, Mr. Chairman. I wish I could take 

credit for it, but seeing how I have been here for—— 

Mr. OBERSTAR. Put your mike on. 

Mr. FERNANDEZ. It is on. 

Mr. OBERSTAR. Get closer. 

Mr. FERNANDEZ. Mr. Chairman, I have been here for 6 weeks 

now. I wish I could take credit for the great work our agency did, 

but as you know, we have got a wonderful number of folks throughout the country in our regional offices that are very good at putting 

together these types of applications. They are in the field constantly evaluating opportunities to fund economic development 

projects, and they have got a wonderful track record. So they deserve all the credit for that. 

Mr. OBERSTAR. They do. They have been through Accelerated 

Public Works in 1963, Accelerated Public Works II in 1965, 1966, 

and then Local Public Works I, Local Public Works II in the last 

year of Carter, first year of the Reagan administration. So EDA 

15 

has learned how to do these projects and has grass-roots support. 

All these projects are initiated by the local development district 

boards, and they turn out to be very effective not only in immediate 

job creation, but long-term job establishment and business development. 

Mr. Kendall, I appreciate the Smithsonian, relatively small slice 

of the stimulus, but there are many good initiatives that the 

Smithsonian has undertaken. And thank you for your presentation. 

Madam Chair, I will withhold at this point. 

Ms. NORTON. Thank you, Mr. Chairman. 

Now, after asking Mr. Perriello if he has any comments, I am 

going to see if the Ranking Member has any questions, and then 

we will proceed. 

Mr. Perriello? 

Mr. PERRIELLO. I just want to briefly thank Chairman Oberstar 

and Chairwoman Norton for their leadership on this. 

You know, we have made a major push here in Congress to try 

to prevent us from falling off a cliff into a depression. I come from 

a district that has over 20 percent unemployment in some areas, 

and the seriousness with which the people in my district are struggling just to get by day to day, week to week looking for job creation, I think it is incumbent upon all of us to dig deep 24/7 and 

see this as more than just a job right now, this is a calling to try 

to turn this economy around. And I know many people in your 

agencies and organizations are doing that sort of work. 

We just need to be sure to hold ourselves to the highest possible 

standard of everything we can possibly do for economic recovery 

and remember that behind each of those statistics that we talk 

about is a person looking for a job, there is a family trying to get 

by. So I hope we will just keep that in mind. And I really appreciate the Chairman keeping our feet to the fire on all of this, and 

look forward to hearing more from you during the questions. 

Thank you. 

Ms. NORTON. Thank you, Mr. Perriello, for being here, and for 

those comments. 

Mr. Diaz-Balart, have you any questions? 

Mr. DIAZ-BALART. Madam Chairman, I was going to withhold, 

but actually I do want to add to what Mr. Perriello said now that 

the Chairman is here. 

I mentioned before to you, Madam Chairwoman, and to the 

Chairman before, early on in this process, the Chairman was very 

emphatic about stating that he was not going to just sit back and 

hope that things happened; that he was going to have hearings and 

keep people’s feet to the fire. Mr. Chairman, and I have told you 

this multiple times, I can agree or disagree with you, but you said 

that that is what you were going to do, you have continued to do 

it, and I want to thank you for that, add to the words of Mr. 

Perriello. 

A lot of words are spoken in this process. People do need to understand that when Chairman Oberstar—and I know in a very partisan process that we have here, it may sound weird for somebody 

to hear this from a Republican saying this about a Democrat—but 

when the Chairman said he was going to do that, he has done so. 

He has been emphatic, he has been aggressive, and yet always very 

16 

inclusive. And as Mr. Perriello said, this has to be the priority, job 

creation. 

And I want to thank you for your efforts to get a transportation 

bill out, to make sure that the stimulus—we all wanted that stimulus to have more transportation money, and now to continue this 

struggle and this fight to make sure that we do the best job that 

we can with the cards that we were dealt. So thank you, Mr. Chairman, and also the Chairwoman of the Subcommittee, who, Mr. 

Chairman, you might want to know, I know she has a reputation, 

and rightfully so, of being really tough, but who has been nothing 

but wonderful to work with. So thank you, sir. 

Ms. NORTON. I thank the gentleman for his kindness. We enjoy 

the greatest collegiality, he and I, and for that matter this Subcommittee, and it is why we get things done. 

And I just want to say, before I ask the first question, and then 

I am going to ask a question and go on to other Members before 

coming back to questions, you see a Chairman—well, the Subcommittee is used to my taking names and writing down numbers. 

But you see there is a better name taker and number cruncher 

than I am at the head of the Committee. And the fact that the 

Chairman, who has oversight over more Subcommittees than I 

think any Chairman in the House, makes his way to this hearing 

says everything about the accountability expected of us, especially 

in light of our direct responsibility, because except for EDA, you 

are not pass-throughs, you are accountable directly for the contracting. We have to show we can do it. 

And I want to associate myself, Mr. Diaz-Balart, with your remarks concerning a new transportation bill, which the Chairman 

is strenuously trying to get through here. We are not going to get 

another large stimulus package, but that is no excuse for letting 

the transportation bill lie fallow while jobs, not to mention highways, and transit, and improvements in great need, go by the way. 

We have a huge deficit problem, but no one can doubt, with unemployment as a lagging indicator, that something is going to have 

to be done. The best thing to do to stir jobs and the economy at 

the same time is get as much of the reauthorization of the highway 

bill out as possible. 

That said, I want to ask the same question to all of you. Notwithstanding my good friend’s concern about outlays and jobs, I think 

we can come to some kind of agreement on that at a later time, 

but I do think both he and I would want to know precisely how 

many—well, not precisely, it is an organic process, but approximately how many jobs have been created on the projects under 

your agency, and how much of the total amount of funds has been 

obligated? Let me start with that before I go to the rest of the bottom line. All three of you. How many jobs? How much obligated of 

the total amount? What percentage of the total amount obligated? 

Mr. Fernandez. 

Mr. FERNANDEZ. Madam Chairman, as I noted earlier, we have 

obligated 100 percent of our ARRA funds. In terms of the job numbers, we are in the final—you know, as part of the reporting mechanisms, numbers have been submitted to reporting.gov, and now 

we are in the final review of those numbers. We should have the— 

17 

we should be able to give you the specific number in a matter of 

days. 

I can tell you the approach we took to the review of projects was 

traditional to the extent that EDA has been doing this for a long 

time. So we would anticipate very similar results in terms of the 

number of jobs based on the amount of investment or the investment per job. 

Ms. NORTON. Now, you indicated in your testimony that you have 

a recipient reporting requirement and a kind of almost checklist. 

Does that include the number of jobs? Is that something new? Is 

that useful? Could perhaps we use it with other agencies? 

Mr. FERNANDEZ. Well, as I understand it, we are looking at the 

direct construction jobs related to the investment. 

Ms. NORTON. Now, this is an important distinction. The direct 

construction jobs is, of course, the only question I can ask. The reason we are doing stimulus funding is because of the multiplier effect that Mr. Peck spoke of, which is many times those jobs down 

the line and, interestingly, in various job categories across the spectrum of the entire economy. So go ahead, Mr. Fernandez. 

Mr. FERNANDEZ. Yes. Absolutely, Madam Chairman. The numbers that are being reported through recovery—or reporting.gov are 

the recipient numbers that go to that particular investment. We review those numbers, and then there is a final checkoff before the 

numbers are released. 

Ms. NORTON. So how often do you do that, Mr. Fernandez? 

Mr. FERNANDEZ. It is a quarterly requirement. So we are coming 

to the end of the first reporting period at the end of this month. 

So those numbers will be—— 

Ms. NORTON. Well, that is fair. It does take some time to get a 

fair sense of whether you have people who are permanently on the 

ground for this period. Thirty days, would you get us your first report on jobs created? 

Mr. FERNANDEZ. Absolutely. 

Ms. NORTON. Mr. Peck, same question for you. How many jobs? 

What percentage of total funds, 5.5 billion obligated? 

Mr. PECK. Of the 5.5 billion we have obligated 1.4 billion, or 25 

percent. 

Ms. NORTON. Now, is that on target for something or how do you 

arrive at—— 

Mr. PECK. It is. 

Ms. NORTON. How do you know whether you are going to finish 

on time without looking at integrals? 

Mr. PECK. Well, as you know, on construction projects you have 

milestones for when you are going to acquire the site, when you are 

going to begin design. ‘‘When you end design, when you award the 

construction contract,’’ end design or work the construction contract. You make progress payments along the way and you have a 

target date for the date it is going to be done. And we have all of 

those. 

So what we did, and I have to say again, there is a project management office in GSA that manages this superbly. We for each 

project know the project schedules, we aggregate them and have 

a—— 

18 

Ms. NORTON. Are you on target, is 25 percent where you expected 

to be at this hearing? 

Mr. PECK. Yes, ma’am, that is correct, and we expect to be at $2 

billion by December 31st of this year. 

Ms. NORTON. Okay. You have given us a very hopeful calculation 

for the number of jobs that will be created at the Department of 

Homeland Security site, maybe over 7 or 8 years, 38,000. How 

many jobs have you created thus far at the various GSA sites? 

Mr. PECK. At the various sites so far our recipient reporting indicates 773, because again the spending to date is 57 million. 

Ms. NORTON. Okay. I am going to ask questions about spending 

in a moment. Mr. Kendall, same question, obligation and number 

of hires. 

Mr. KENDALL. Madam Chair, we have obligated 86-1/2 percent of 

our funds for construction projects, which is approximately $21 million. The reporting that was established has just recently begun, 

October 20th I believe is the cut-off date for the reporting, and we 

had 51 new jobs retained or created reported by our prime contractors. We expect, as I stated in my testimony, that number to be 

well over 100 as our jobs get underway. Many of our construction 

jobs are just getting underway and will run from 7 to 15 months 

for construction. So we do expect those numbers to increase. 

Ms. NORTON. Thank you, Mr. Kendall. 

Now at our tracking hearing for the entire overall Committee, 

great dispute arose because of the difference between obligation 

outlays and real spending. So let me ask you about spending. How 

many money has been spent so far and what does that indicate 

about your contracting process? Mr. Fernandez. 

Mr. FERNANDEZ. Well, to date, Madam Chairman, we have spent 

about 8 percent of the obligated funds, or a little over $12 million. 

We anticipate by the end of this calendar year that—these are the 

start dates of the projects so that the money is not just allocated 

to the recipient, but they are actually in the field doing the work 

and the money is being spent. We anticipate getting up to 30 percent or almost $32 million by the end of this calendar year. Not to 

go quarter by quarter, but by the end of September 2010, which 

will be the target date for us, we will be at 98 percent of all of our 

ARRA spending. 

Ms. NORTON. Now, I understand what this means, a worker goes 

on the job and you pay that worker every 2 weeks, or whatever is 

the amount of time. So those expenditures of course go up the 

longer the worker stays employed. What about expenditures, Mr. 

Peck, in terms of outlays or actual spending? 

Mr. PECK. Actual spending, as I noted, is about $57 million. That 

is about 5 percent of the obligations to date. And let me note two 

things. I am not surprised there was a debate before, because these 

numbers are part science and part art. The job numbers are a 

science, because I think you have to give the administration a lot 

of credit for setting up a centralized reporting mechanism that says 

we want to know exactly direct—— 

Ms. NORTON. So there is the transparency, anybody can find out. 

Mr. PECK. Absolutely. There is no fudging. That is not a multiplier effect, just is just jobs that people say they have created. The 

other thing to note here is that those numbers will really—in a 

19 

construction project, as long as we are at a point where we are paying for design up front, architects, some demolition, environmental 

testing, we are not spending money in great big gobs. When we are 

award construction contracts, we will see a lot of workers put on. 

That is one. 

The second point to remember is that we pay in arrears, which 

means that people are being paid in advance of the Federal funding 

going out. People apply for progress payments when they have 

made progress. That is number two. 

Number three , it is important to note that even awarding a construction contract before—when we indicate that we are going to 

go forward with a project and we start hiring architects and then 

we make a construction award, the contractors, and you can ask 

the contractors who are here, can mobilize their subcontractors and 

tell them that there is going to be a job in 2 months. That makes 

a difference in how much people feel confident about the economy 

and what they do, and I think that is one of those lagging indicators that you just don’t quite see. 

Ms. NORTON. Thank you, Mr. Peck. Mr. Kendall, expenditures? 

Mr. KENDALL. Madam Chair, a little over $4 million has been 

billed by our contractors of the obligated amount of $21 million. 

Ms. NORTON. Yes. 

I am going to go now to I think it was Mr. Walz would have been 

next. Mr. Walz of Minnesota, do you have any questions? 

Mr. WALZ. No, ma’am. 

Ms. NORTON. Mr. Carnahan. 

Mr. CARNAHAN. Thank you, Madam Chair. And I want to thank 

the panel and start with Mr. Peck, and I want to specifically focus 

on the GSA’s capabilities in terms of having enough Federal facilities, managers and operators who are properly trained and certified. Where does that stand today? If it is not where you think 

it needs to be, what plans are in place to really bring that up as 

the sophistication of these buildings increases with these investments? How are we keeping our personnel up with that. 

Mr. PECK. I am glad you asked that because one of the things 

that gets lost sometimes with all of us who do construction and real 

estate is we love the new buildings and love to build them, and 

then sometimes we walk away a little bit once they are up. And 

particularly on green technology there is, as you note, a learning 

curve for our building managers. We have—I think we have sufficient building managers, facilities managers to run our projects 

well currently, in part because what we do is our facilities managers really contract a lot with private sector services for cleaning 

and maintenance on our buildings. 

But you have put your finger on a problem that we have both 

in the public and private sector at the moment, which is that to 

some extent our green practices and technologies are running a little bit ahead of the people who have to maintain them. We are 

working with the International Facilities Management Association, 

the Building Owners and Managers Association. We are all talking 

about the same kinds of issues, and we are putting in place training programs for our managers to train them in some of the new 

green practices. 

20 

It requires different ways. If you install certain kinds of water 

conserving devices in your buildings, people have to learn a different way to maintain them. And that means not just the Federal 

facilities managers, but also the contractors. I can tell you tell you 

one of the choke points that we have experienced in previous years, 

and I think it is getting better, is finding private sector contractors 

who know how to clean a building or maintain a building using 

green practices. 

Because the industry as a whole is starting to embrace green 

practices, it is becoming a little bit easier, but it is something that 

we are talking about. We are contracting, we are sending people to 

training all the time. 

Mr. CARNAHAN. Is that specific training for your employees in the 

public building service or is this also in partnership with the private sector? 

Mr. PECK. It is both. It is training our people and also changing 

the specifications we have in the contracts we put out for the people we hire to do some of the detailed maintenance and cleaning 

work. 

Mr. CARNAHAN. The other thing I want to ask about is energy 

performance contracts and the ability to leverage some of this funding with those type of companies where they can come in and provide the up front capital costs for some of these renovations with 

the energy saving gains that are passed along to the government. 

Mr. PECK. We have made use of those in a number of previous 

years, and we have looked at them for some of the Recovery Act 

projects as well. There is a—in some cases the time it takes to get 

those contracts in place has made us decide not to use them on 

some of the Recovery Act projects. But can I also say that we believe we are in this for the long term. We think we need to green 

our inventory not just with the $5-1/2 billion we have, but as we 

go forward we are taking up how we can use those contracts best. 

Some of it may require some streamlining of some of our processes, 

but it is a great opportunity to leverage our funding. 

Mr. CARNAHAN. Thank you, gentlemen. 

Ms. NORTON. Mr. Diaz-Balart, do you have any additional questions? 

Mr. DIAZ-BALART. I will hold. 

Ms. NORTON. Thank you. He is holding for the moment. 

The President has spoken out on the failure of small businesses 

to feel the—for example, the 10,000 Dow last week. I guess they 

must have shook their heads, wow, 10,000 Dow. The reason they 

shook their heads is we only reached that for the first time I think 

in 1999, and zip, these folks are back, thanks to our money. And 

yet, you will find that my constituents and I are still not feeling 

it. Do you feel me? No. 

I want to know what each of you have done to make sure small 

business contracting is included in the stimulus funding so they at 

least feel it from us, if not from Wall Street loans. 

Mr. Fernandez. 

Mr. FERNANDEZ. That is a very good question, Madam Chairman. 

In fact, I will have to commit to coming back to you with a response as far as any specific elements of our funding opportunity 

notice that may have included those elements. 

21 

Ms. NORTON. Mr. Fernandez, you are the only one of the three 

here who is in effect the pass-through to the States. 

Mr. FERNANDEZ. Right. 

Ms. NORTON. Now, this is very important. 

Mr. FERNANDEZ. Absolutely. 

Ms. NORTON. EDA is highly effective in spending funds, which is 

why we were able to get funding for you in the first place. You 

should have and we need to know in 30 days whether or not there 

is a small business plan for the spending of these stimulus dollars, 

these dollars. Your dollars for sure are going to those with the 

highest unemployment rates where small business is down, if not 

out. We need to see your small business plan within 30 days to 

know how it is communicated to the States and to see what the reporting requirement is, not only with job creation, but with stimulus. If this money does not reach a small business contract, then 

the funds over which we have oversight will have been a partial 

failure. 

Mr. Peck, small business incorporation into your work, how is 

that occurring? 

Mr. PECK. Well, it is part of our normal procedure as any construction contract for a million dollars or more has to come with 

a small business subcontracting plan. It is a little bit unfortunate 

in Federal small business contract reporting that we don’t get credit for subcontracts. 

Ms. NORTON. Could you explain why—please make me understand. I know there must be a reason why whenever you hear 

something like that, the first thing you should not think is how 

stupid. Somebody had a reason for doing that and you shouldn’t try 

to undo it until you get all the facts on the table. So what is the 

reason why since most of the small business contracting, for example, would go on—— 

Mr. PECK. Right. 

Ms. NORTON. —through these subcontractors. Why does the government not count it? 

Mr. PECK. I think—I believe, I guess we should ask others who 

know better, but I believe that the good intention here is not to let 

agencies off the hook by hiring big contractors for things and then 

they will just sort of pass it down—you know, they will pretend 

they have a subcontractor doing the work and get credit for it. 

In our case, in the construction industry, I have to say, I think 

that is a generic view of Federal contracting. In the construction 

industry, though, where you know when you hire a general contractor, often so much of what they do is done through small business subcontractors—I don’t want to get into trouble with any of 

my friends here who are contractors here, but I don’t know what 

the percentage is of their own full-time employees versus their subs 

who really don’t work full time for them. All I am saying in the 

construction industry it is somewhat different. But we monitor very 

closely the subcontracting plans that people give us and find out 

if they are actually following them. 

Can I just say—— 

Ms. NORTON. At least in the construction industry, so long as you 

kept records, and I hate to even talk about keeping records, but as 

long as you knew who it was, whether the sub or the general conVerDate Aug 31 2005 17:17 Mar 12, 2010 Jkt 000000 PO 00000 Frm 00029 Fmt 6602 Sfmt 6602 P:\HEARINGS\ED\10-27-09\53059.TXT JASON
22 

tractor who obviously doesn’t have as many opportunities to engage 

in small business contracting, as long as you knew, there wouldn’t 

be any problem at least in construction work, with getting credit, 

for that matter putting some pressure on your subcontractors to 

engage in small business contracting? 

Mr. PECK. That is correct, and we do track how much of the subcontracting is going to small businesses. 

Ms. NORTON. So in construction, Mr. Peck, if we gave credit for 

the subs hiring or, excuse me, engaging in small business contracting, wouldn’t that be an incentive for them in letting their own 

subcontracting hold those subcontractors accountable, and since 

they are also going to get some credit? I don’t see why at least in 

contracting it wouldn’t make sense to do. 

Mr. PECK. Well, I don’t have a good answer for you about why 

is wouldn’t make good sense. 

Ms. NORTON. I accept your answer that generically perhaps in 

some other areas of the economy it wouldn’t work as well. 

Mr. PECK. That would probably make sense, but we do have subcontracting goals, as I said, for small businesses, we hold our contractors to them. In addition to that, we hold, have held and are 

going to hold more fairs for small business contractors and we have 

put things on websites and through contractors association, because not everybody is still so computer savvy, to let people know 

where there are opportunities. Sometimes with small businesses I 

have to say it is a matter of leading them to the large businesses 

that have some of our contracts. 

Ms. NORTON. Of course. There was a very large and impressive 

fair held just yesterday at the Ronald Reagan Building where all 

these small businesses and large businesses alike set up booths, so 

that the industry itself, we didn’t do this, or GSA didn’t do this. 

The industry brought every which a way of small business and 

other mid-sized and larger businesses in the same large atrium and 

they could network among themselves, find themselves, find the 

contractor, find the subs. 

A contractor, a very successful subcontractor who was working 

on a GSA project, told me that a large contractor saw what he had 

already done and came to him and invited him to participate in his 

work. 

Well, I want that. That was a large sub contract. I want him to 

get credit for seeking out the small business who is going to now 

be doing some subcontracting. I am going to ask staff to help me 

figure out whether there is a way to give an incentive for larger 

contractors to enable or encourage their subs to engage in small 

businesses contracting, particularly in light of the fact that the 

greatest problem, as I see it, with the stimulus in the business sector has to do with the small business sector, which provides jobs 

more quickly than other sections of the economy. 

Mr. Kendall. 

Mr. KENDALL. Madam Chair, specifically to the Recovery Act 

projects that we have awarded, we are proud that 100 percent of 

our projects were awarded competitively, and we are also very 

proud that small business 8(a) firms were significant partners in 

this effort. That is, those small businesses and 8(a) firms were recipients of 68 percent of the value of the funds that we received. 

23 

And this goes to the very proactive program that we have with 

small business at the Smithsonian and it was leveraged here in the 

case of the ARRA funds. 

Ms. NORTON. Thank you, Mr. Kendall. And would each of you, 

Mr. Fernandez and Mr. Peck, break down the small business to get 

within 30 days how many of those have been 8(a) small businesses 

or disadvantaged businesses of any kind. And could I see, Mr. 

Peck, could we see within 30 days your small business plan, how 

it operates since you do this almost automatically? Mr. Kendall has 

already done it and Mr. Fernandez is getting us such a plan. 

Let me ask you, Mr. Peck, in May when we had—first let me say 

we note—I should ask you another question, as it turns out, on 

small business plans. Are small business involved or small business plans also a part of the national broker contract? 

Mr. PECK. Yes, ma’am. 

Ms. NORTON. Would you get us a copy of your small business 

plan that is a part of the national broker contract within 30 days? 

Mr. PECK. Yes, ma’am. 

Ms. NORTON. That is obviously an enormous opportunity, particularly today, for smaller firms. We have these huge firms that 

have the broker contract for leasing and who are real hungry, 

smaller firms who also do leasing and may be a whole lot better 

and quicker at it than the larger firm which may serve an entire 

region of the country. 

I note, and we are very pleased to see, that GSA is available to 

help our agencies, because you are the agency with the most direct—did I say the NRC—you are the agency with the most direct—yes, it is the NRC, the Nuclear Regulatory Commission is 

what I am talking about. You are the agency with the direct building and construction expertise. 

Now we have got to find out. Well, first, let me see if you helped 

the—this is the Washington Post, October 27th, this very day. NRC 

design, build office tower. Didn’t go through this Committee, real 

no-no. Somebody lobbied, probably the agency itself, and got the 

money put in an appropriation bill. I want to know if GSA has assisted the NRC in this unauthorized project to build—design-build 

no less, in a specific location without competitive contracting, the 

mortal sin in this area. Whether or not the GSA has assisted the 

NRC to in this 14-story design-build project, across the street from 

where it is, where at taxpayers expense they go to downtown Bethesda, one of the most expensive parts of the region or of the 

United States of America without allowing the taxpayers to see if 

that is the best place for it to be spent. Where did they get the authority? What is the cost per square foot? Did you help them at all 

in how far they have gone with respect to this unauthorized construction? 

Mr. PECK. Madam Chair, the NRC lease is in fact a GSA lease. 

I don’t—— 

Ms. NORTON. The design, build, and construction. 

Mr. PECK. It is actually not what is known as a lease construction per se, but it was a—it is a 15-year lease. There was a—— 

Ms. NORTON. A 15-year lease of a private—— 

Mr. PECK. Of a privately owned brand new building. 

24 

Ms. NORTON. Understand, everybody what we are hearing. Some 

developer somewhere has been able to get the government to plop 

down money to rent his building for 15 years and he did not have 

to compete anywhere else in the region. Is that so, Mr. Peck? 

Mr. PECK. Well, there was—we did issue a competitive—what 

was supposed to be a competitive solicitation for offers. However—— 

Ms. NORTON. Oh, it is interesting on what say-so. We don’t have 

any record of that before this Committee. 

Mr. PECK. Well, I think because there was a direct reference to 

the lease in an appropriations act. The Consolidated Appropriations Act for 2008, Public Law 110-161, included a provision requiring that the lease for an expansion lease for the NRC be ′′as close 

to reasonably possible to the Commission’s headquarters location in 

Rockville, Maryland.′′ 

Ms. NORTON. Well, of course we never use language like that. Because we are the authorizers and the taxpayers tell us that wherever it is, it has to be the best deal for the taxpayers. If it is across 

town or if it is across the street, fine. But after competition. Did 

you tell those who superseded the leasing language of this Subcommittee what the law requires and question that at all or did 

you just go ahead and do unauthorized work without consulting 

even with this Subcommittee. 

Mr. PECK. Madam Chair, I rarely duck a question, but it was before my time and, to be honest, I saw the newspaper this morning 

and saw that this lease was announced and it is—I don’t have any 

more information than what I just gave you. I have asked this 

morning to find out what I can about it. I don’t know quite how 

this lease started. I do know that NRC was working for expansion 

space, they have other leases. There has—there was in the previous administration a push for more nuclear energy. Interest may 

be in this one too for all I know. NRC I know had asked for more 

staff and this was an expansion lease. How the language got in the 

appropriations bill, I unfortunately don’t know. 

Ms. NORTON. I can’t hold you responsible. I do want your commitment that on your watch you will never simply supercede language from this Committee without informing this Committee so 

that we can have a little talk with the appropriators of the Senate. 

Mr. PECK. You know I used to work on an authorizing Committee on the Senate side. I know this issue and you have my assurance. 

Ms. NORTON. Well, let me tell you, this is very serious. We have 

seen some executive redlining by GSA in this Committee where 

people try to go to K Street at hugely inflated rents to the taxpayers. Inflated only because there are so many, that is where the 

highest prices are, when right down the street, just close to the 

Senate; for example, in NOMA, they could get the space much 

cheaper. 

We saw an extraordinary case of redlining where HHS indeed altered without consulting this Committee a prospectus, even though 

language says you can’t offer a prospectus. They did it by amendment and said that wasn’t alteration, whereby the new amendment 

said that HHS had to lease space close to hairdressers, barber 

shops, churches, violation of church and state, hardware stores. It 

25 

was a complete and total outrage. It was such an outrage that GSA 

had to withdraw the prospectus. It so flew in the face of the law, 

and GSA was going to have its pants sued off of it. I only came 

to know about it because a competing developer wrote me a 3-page 

letter. 

So we take very seriously unauthorized matters. And as long as 

you assure us that that will not happen on your watch. I can’t hold 

you responsible for what didn’t happen on your watch. But I have 

to tell you that it is a combination of overriding the authorizers 

and redlining, because these people say I like my neighborhood. I 

don’t care what it costs the taxpayer. It is totally unacceptable and 

where we find it, we have to stop it and call the agency to account. 

I accept your response. Be on notice. 

However, Mr. Fernandez, one of the goals you name is what attracts us to the EDA. By the way the EDA, I think he authorized 

this too when he was a staffer as one of the favorites of the Chairman and of mine, but it has to do with something stated on page 

1 about your goal to attract private capital investment. Unlike 

other infrastructure building, you are charged not only with building, but with building so that, as we are seen from our hearings, 

much more often private capital investment is attracted simply because of what you do. 

I wonder if would tell us how you decided on the projects? You 

say, for example, they are not in all 50 States. So you must have 

had some kind of—indeed, you had a competitive process, but you 

must have had some goals, and we are interested in this goal of 

attracting private sector based on what you do in the public sector. 

Mr. FERNANDEZ. As I mentioned in one of my earlier answers, 

Madam Chairman, that for us the Stimulus Act was not a new 

process or totally different extension of the Agency’s work. So we 

were able to pretty quickly adopt a hybrid approach to our grant 

process in terms of the criteria we used for allocating the total 

funds across the regions. But as part of the review process, our regional offices and their internal investment review committees approach these grants the same way that they approach our ongoing 

program funds, and that is to look at the capacity of the recipient 

or the applicant to administer the fund, the amount of projected 

jobs, the amounts of private investment that they project, the leverage. 

Ms. NORTON. Could you give us an example of a project, how you 

would, unlike the way we would do a highways project, or maybe 

in fact some highways projects are done this way, too, of perhaps 

an ongoing project that has been selected and has or you expect to 

leverage several times the amount you are putting in with private 

investment? 

Mr. FERNANDEZ. Yeah, as you I am sure were aware, Madam 

Chair, when we look it the applicants, we provide guidelines or 

guidance to the regional offices, and the vast majority of decisions 

are made at the regional office. They are the folks that have people 

on the ground, they understand what is important within their 

States and within the sub districts within their State in terms of 

the economic development priorities of those communities. So they 

have guidance from us on the private investment side. We try and 

shoot for a return north of maybe 25, $26 return for every Federal 

26 

dollar invested. Historically EDA has been very good at receiving 

that kind of return on investment. 

As I noted earlier, we are going through the recipient responses 

as part of the transparency in reporting requirements. We should 

be able to give you projections, but I feel very confident since our 

staff was using a very similar evaluation methodology that we 

should meet or exceed those leveraged numbers as well for the 

stimulus projects as we do for our other ongoing funding. 

Ms. NORTON. Mr. Fernandez, to the extent you can get us those 

projections for projects, that would be very helpful and very useful 

to us, because we are in the process of reauthorizing the EDA as 

I speak and there will be a bill coming forward. 

Mr. Carnahan, do you have further questions? 

Mr. CARNAHAN. No, Madam Chair. 

Ms. NORTON. I have a question for Mr. Peck. Mr. Peck, you know 

and I am sure you have the same concern as our concern with the 

declining Federal Building Fund. One of the things your stimulus 

package is going to do is maintain our inventory so we don’t have 

to lease as much. So we have a hard time understanding how any 

agency could get away with paying no rent. But I want to shout 

it from the hilltops so that all the agencies who are paying rent to 

the Federal Building Fund knows. One of the largest agencies, the 

USDA, the Department of Agriculture, is paying no rent. Even the 

smallest agencies who occupy Federal office space pay the going 

rate. That way we circulate the money and we fix up the buildings 

so that they don’t go into decline. 

Now, we have asked this question in the past, indeed for 5 years. 

The USDA, GSA tells us is trying to get the USDA to pay rent. 

What a scofflaw. Now I have to tell you we have been discussing, 

my good friend went to the floor, I went to caucus to discuss health 

care today. It hasn’t taken us 5 years to discuss health care, which 

is going to shortly come to the floor. 

So I am going to have to ask you, Mr. Peck, what amount of back 

rent has thus far been paid into the Federal Building Fund by the 

USDA pursuant to your negotiations with the Agency? Imagine negotiating with a scofflaw. Maybe you can’t put them out, but you 

do have real authority. And so I want to know how much in arrears, how much you have gotten so far, and what you are doing 

to get the rest. Let’s hear it, sir. 

Mr. PECK. Okay. I don’t have an answer for you today, although 

I am afraid I can guess at the answer. I can tell you that I have 

already had, I think you made me aware of this at a previous hearing, I have already had a meeting with officials at the Department 

of Agriculture. I do understand they have heard this from GSA before and—— 

Ms. NORTON. Heard what from GSA? 

Mr. PECK. Heard from GSA before that GSA would like them to 

pay rent. 

Ms. NORTON. They are well aware of it, and I don’t see why they 

should pay unless GSA does—what should GSA be doing? 

Mr. PECK. This is one of those things that I think we need to talk 

to inside the executive branch at a higher level than between me 

and the people at GSA. 

27 

Ms. NORTON. Mr. Peck, within 30 days we need to see, because 

I believe we could get a response, we need to see a letter from you 

before we send our letter. We need to see a letter from you to the 

head of OMB, indicating that the agencies of the Federal Government are subsidizing the USDA, because everybody else pays rent 

or virtually everybody else. By the way, I would like to see in 30 

days a list of agencies who do not pay rent because everybody who 

does is therefore subsidizing all of them, but surely this is the largest of them. We know who can get this done and we know how little GSA gets done when they are in this kind of fix. 

So first of all, we need not your whispering to OMB, why don’t 

you all do something about this, we need to see in writing a letter 

indicating what the back rent is, your inability or the inability before you came to get USDA to move, how this becomes an incentive 

for other agencies also to stop paying, the state of the Federal 

Building Fund today, which is declining because we must lease 

more, given the state of our own inventory, laying it out and requesting and indicating that the Subcommittee and the Full Committee have asked you to make this request, you do so on our behalf and on behalf of the Agency itself. 

Do you have any problem with sending a letter within 30 days 

to the head of OMB to that effect? 

Mr. PECK. Madam Chair, of all the questions you have ever 

asked me, that is the one I am probably happiest to answer, yes. 

I am happy to do it. 

Ms. NORTON. Because I have not put on your shoulders more 

than—what is the old spiritual—give you strength to bear. But I 

think that if you called to the attention of this White House that 

there is a scofflaw among them, that they will feel some obligation 

to do what it seems to me they can do best, and send a cc to us, 

because that means the White House will send a cc to us. We will 

back you up. We hope never to have to ask this question again. 

I must say to you that just we are looking for you to use all the 

leverage you have, and you have indicated in your own testimony 

you are doing so. It seems to me well enough with respect to the 

stimulus funds, but we note that we went to great lengths to get 

the Old Post Office project out here. Like the USDA, which you 

have the authority to make pay the rent, you on your own, if you 

are an agency that stands up to a peer agency. You also had the 

authority, you before you were there, to in fact do the Old Post Office, a slum of a great historic building right across from the White 

House. In July the GSA testified that it was hosting the Urban 

Land Institute to talk with the private sector about financing opportunities. You should have done this 5 years ago when the economy was hard, now you have to do it now. 

What is the status of the Old Post Office project? 

Mr. PECK. That Urban Land Institute panel is meeting here in 

Washington in early December. As you indicated, the right question to ask at the moment is whether a private sector partner could 

find the financing today to do the kind of project that government 

is contemplating. 

Ms. NORTON. Just a moment, this is easier than some projects 

would be, first of all because it is a historic project and the GSA 

itself would be involved in the funding. This is like the Tariff 

28 

Building. This shows the return to the government. This administration understands return to the government. That is why it 

bought a building that it had been renting with this year’s appropriations. So I need to know how you intend to move on the Old 

Post Office building, even though the economy may not come back 

this year or next year. 

Mr. PECK. I can tell you in brief that the purpose of having the 

Urban Land Institute panel is to test the market’s response to a 

potential solicitation for offers on the building, because that is 

what we would like to do. That is what we did with the Tariff 

Building, now the Hotel Monaco, although, as you note, we were 

able to do that in a better economic period and that is one of the 

things we need to do. What we want don’t want to do is go to the 

market and find out there is no response. So this is just a marketing, a test marketing that we are going to do with the ULI people. 

Ms. NORTON. Before I go on with more questions, I know that the 

Ranking Member and Mr. Carnahan have to go to the floor on a 

motion to instruct conferees. And I am hoping to go to the floor 

very soon when the D.C. voting rights bill gets through, but if I 

could ask if either of you have any questions before you have to 

leave so I can proceed with this panel, finish with this panel, go 

on to the next, and hope you will be able to return. 

Mr. Diaz-Balart. Mr. Carnahan. 

Thank you very much. Let me ask just a couple more questions. 

What is the state of the Federal Building Fund, Mr. Peck? 

Mr. PECK. If by that you mean this year how much do we anticipate coming—— 

Ms. NORTON. Well, actually I don’t expect you to have off the top 

of your head what I want to know. What I want to know is this: 

How much was in the Federal Building Fund over the past 5 

years? And I am trying to figure out how much trouble we are in 

as we lease more and more space, which means ad abnitio it 

doesn’t go into the Federal Building Fund. 

Mr. PECK. I will provide you with—we have some pretty good 

charts on that. I can tell you that the disturbing news is that at 

the rate we are going, and this is based on our guesses about rental rates in the coming years, that we anticipate that somewhere 

around 2015 or 2016 the Federal Building Fund will no longer be 

profitable. And as you know—— 

Ms. NORTON. What does it mean by profitable? 

Mr. PECK. Well, we charge rent so have revenues and then we 

have expenses, a large chunk of which are payments to lessors for 

rent. We have building expenses, and the difference between our 

revenues and expenses is in essence, because we can’t borrow our 

capital, the capital funds we have, to make significant repairs to 

Federal buildings and keep them up and in some cases build new 

buildings. Because we are leasing so much more and we do anticipate that rent rates are coming down some, it looks like somewhere 

around 6 years from now we will just be maintaining. We won’t be 

in deficit, but—we will bring in enough revenue to meet our lease 

obligations and our operating expenses and minor repairs, but not 

capital expenditures. 

29 

Ms. NORTON. On straight out leasing we are doing more and 

more of that, so we are hastening the moment you just described 

where your expenses outgrow your obligations—your obligations 

outgrow any growth in the fund. 

Mr. Costa testified before us in July or he testified concerning a 

meeting in July between the Real Property Council and the OMB 

to discuss 412 authority. And that authority would of course allow 

us to do some construction of Federal space for Federal use. 

Given the urgency that you have just described for the Federal 

Building Fund, I must ask you, what was the outcome of that July 

meeting and what is the status of your request to use 412 authority, which this Congress gave, I think under 110th Congress, gave 

to GSA and where Mr. Costa testified you hadn’t even asked the 

OMB to help you use that authority the last time he was here. 

What is the status of 412 authority and of your discussions to 

use it, especially in light of your testimony that the Federal Building Fund is going defunct? 

Mr. PECK. We have—I have had—in the time I have been at 

GSA, I have already had a conversation with OMB about the possibility of using 412 authority just generically, and we have rehashed 

some of the issues which have arisen before because you know I 

asked for something similar when I was here in the Clinton administration, and we do have one major project coming up on which we 

are going to ask the Office of Management and Budget for the permission to use the—at least for their go ahead, which we need in 

various ways to go ahead with the project. I have to tell you I don’t 

know a lot about that. 

Ms. NORTON. What is that project? 

Mr. PECK. It is a project in Denver, and I have to tell you, I 

don’t—I am not allowed to know too much about it, because my 

former firm worked on the feasibility studies. So I am recused from 

talking about it. I just know that the—— 

Ms. NORTON. What made the Agency believe that that would be 

a good 412 authority? 

Mr. PECK. I am not quite sure. Again, I don’t know. 

Ms. NORTON. You know—let me try again. Let me make sure I 

get who gives permission in the United States of America. The permission was granted by the Congress of the United States for the 

GSA to use 412 authority. And now you say you have to got permission from the OMB. Who gave them permission, once we have 

given permission for you to proceed? Who gave them permission to 

get in between us and an agency we have told to use 412 authority? 

Mr. PECK. Well, I think you know the procedure under the 

OMB—— 

Ms. NORTON. And the procedure for the Agency is to say I have 

in my hot little hands something that this Committee has not only 

now put in law, but which I am going to be called account for at 

every hearing that they have, and what do you want me to say? 

If the Agency doesn’t press back, there is not going to be any 

change in the status quo. That is the GSA I have known ever since 

I have been in Congress. 

Mr. PECK. Well, that is not the GSA when I am there. But I can 

tell you that I have argued strenuously for the authority. But as 

30 

you know, before we can submit testimony or other proposals to the 

Congress, they have to go through an OMB review. And I probably 

shouldn’t say more than that, but—— 

Ms. NORTON. This isn’t testimony. Testimony has to do with 

agency policy. This is a policy of the Congress of the United States, 

and therefore I am asking you how any agency, OMB included, can 

countermand what Federal law has said do in light of the urgency 

with the Federal Building Fund. You are making us lease over and 

over again. You are making us bleed other agencies because you 

don’t use authority that we demanded that you use at least a few 

years ago. 

Mr. PECK. Well, Madam Chair, I think part of it is the way that 

the legislative language is written, again as you noted, authorizes 

us to use the authority, but doesn’t direct us to use the authority. 

Ms. NORTON. Oh, would you like to be directed, because that is 

what you are going to get? 

Mr. PECK. I would get in trouble if I suggested that. 

Ms. NORTON. You need not answer, you need not give an incriminating answer. But you ought to tell OMB that we know how to 

operate when an agency doesn’t do what we urgently believe must 

be done. We didn’t think this would be a nice thing to do, after all 

it would be good to see that happen. We see an untenable situation 

that you have just described: 2012, hey, no Federal Building Fund 

and all that we have now done goes down the drain because you 

get a huge rise in deteriorating buildings again, all because the 

OMB for some—and tell us the reason that you think that the 

OMB has not moved besides the fact that you never asked them 

to move at least since you have been here this time. Why would 

they oppose this? 

Mr. PECK. Well, you know, Madam Chair, if I knew—well, I 

could give you their reasons for opposing. They have existed for a 

long time. They are concerned about abuse of what is essentially 

public-private financing. They believe that federal financing, that 

since the Federal government finances at a lower rate than the private sector, that by definition anything that you finance with the 

private sector is going to be more costly. They believe that this 

might encourage agencies to buy properties or put up buildings 

that are not necessary. I could give you their reasons, but I would 

be giving somebody else’s argument, not my own. I can tell you 

that there is new management at OMB, we have talked to them 

initially about some potential and, as I suggested, we are thinking 

that if we go to them with specific projects perhaps we will get a 

different outcome. 

I should also note we have also made the point that some other 

agencies have similar authorities and have used them. 

Ms. NORTON. Yeah, we have seen the problem over and over 

again. We have done the calculations of the cost of money and the 

use of the 412 authority. We know for sure that today we could 

drive the cost of capital debt down to benefit the taxpayers. And 

you are, I have drawn this to the attention of the administration 

in my own report to them or my own transition memo to them, that 

they are caged in a budgeting notion of real estate. Real estate is 

finance, it ain’t budget. And thus we have some people from the 

19th century in there that are budget examiners that are wasting 

31 

the taxpayers’ money. I hope to be able to break through that with 

this administration, in part by getting some people in the OMB 

who understand real estate and how it is financed and how much 

money we are wasting, not only with respect to 412 authority, nonuse of 412 authority, but generally with respect to real estate. 

But I have to tell you, particularly since you have also been in 

the private sector, you have got to help the Subcommittee as well. 

We have got an administration that I think would understand 

what we are talking about, particularly since we are prepared to 

provide. And I know you are in an even better position to provide 

evidence of savings to the Federal Government through use of 412 

authority, and this administration, given the circumstances that 

have forced it into raising sky high deficit, needs to be leveraging 

every authority it can to drive down the deficit. What you are doing 

now drives it up. 

Mr. PECK. Well, I certainly agree with you and I hope that we 

can work together to make a change in this. 

Ms. NORTON. I thank you for that. Let me ask one final question 

based on again the testimony of the Agency at prior stimulus hearings, and indeed our tracking hearings in May. The Subcommittee 

indicated its concern about trained personnel. Mr. Carnahan asked 

about trained personnel in doing some of the work. We were talking about threshold trained personnel that was necessary to get the 

work on board and done. GSA witnesses at the time mentioned 

that they were beginning to hire annuitants temporarily in order 

to have trained people who could get this done and out into the 

streets. This agency had been so bled by the last administration 

you didn’t exactly have a lot of people to bring from the region or 

elsewhere. 

Have you used annuitants? We were shocked to see that we had 

to virtually order the process to actually use annuitants. Have you 

used them? What has been the progress? How many are on board? 

How many are helping you in the effort now underway with stimulus funding? How many contracting officers, for example? 

Mr. PECK. We have—hold on a second. I have actually just seen 

those numbers and I would like to provide them for the record, but 

the short answer is that we have hired a number of retired annuitants. I believe we have hired either—we have had extensive discussions on this. We have hired either 9 or 11 retired annuitants 

who are contracting officers, who are warranted contracting officers. And this is total number of—— 

Ms. NORTON. How about program managers? 

Mr. PECK. Program managers, we have hired so far related to the 

Recovery Act program 80 Full-Time-Equivalent employees. 

Ms. NORTON. These would be annuitants, retired annuitants? 

Mr. PECK. Not just—we have hired 9, that number was in my 

head. We have hired 9 retired annuitants who are in one function 

or another, but I believe most of them are retired contracting officers, because we needed them back because you have to have a 

warranted contracting officer to issue contracts. We have hired 28 

permanent employees, 23 of whom are contracting officers, and 52 

temporary or term employees. And the retired annuitants all come 

in that latter category of temporary of term employees. But again 

32 

I believe that most of them are contracting officers, retired contracting officers. 

Ms. NORTON. Well, we leave it to the agency the best way you 

can find trained personnel who can quickly do the work. The only 

reason we had fastened on annuitants is they had done it before. 

So I am pleased to see that you have been able to hire temporary 

employees. You have enough to keep on track and on record? You 

see the Chairman takes names, too. 

Mr. PECK. Right. You know what we have done to make the Recovery Act projects move is we have moved a lot of our—and the 

reason there hasn’t been more hiring, I was wondering why we 

hadn’t hired more people, is we have moved a lot of our experienced people into the Recovery Act projects because we needed people on board on those projects. It was a big workload that we 

hadn’t anticipated before. So we moved mostly experienced people 

into the Recovery Act program, and in some cases our hiring is 

backfilling for the regular program, which—— 

Ms. NORTON. Wait a minute. For the Recovery Act, I mean, I 

thought these annuitants were for the Recovery Act. 

Mr. PECK. The annuitants are on the Recovery Act program. 

Ms. NORTON. The temporary employees, what are they on? 

Mr. PECK. Most of the temporary employees are also Recovery 

Act program because it is a temporary program. 

Ms. NORTON. But you just said you had moved—— 

Mr. PECK. We have moved some permanent employees into the 

Recovery Act program as well, and so you don’t see them in our 

new hiring figures. You don’t see the kind of new hiring that some 

of us—that I think you may have heard as a projection 6 months 

ago. We have been able to move permanent employees in there and 

backfill a smaller number of people in some of the regular programs. We have also put on board some retired annuitants and 

other temporary employees to work on the Recovery Act. 

Ms. NORTON. Well, thank you, Mr. Peck, and thank you, Mr. 

Fernandez and Mr. Kendall, for very important testimony as we 

track the progress of the three agencies. 

Ms. NORTON. We will ask the next witnesses to come forward. 

They are John O’Keefe—and we will just go in this order—John P. 

O’Keefe, Clark Construction, Division President of Public Division; 

and then we will go to Kenneth Grunley, President of Grunley Construction Company; then to Kathleen McKirchy, Director of the 

Community Services Agency of Metropolitan Labor Council. 

At this hearing we now want to hear from private sector parties, 

who are equally responsible for carrying out the terms of stimulus 

funding. This will be our final panel. 

Mr. O’Keefe. 

33 

TESTIMONY OF JOHN P. O’KEEFE, DIVISION PRESIDENT, PUBLIC DIVISION, CLARK CONSTRUCTION GROUP, LLC; KENNETH M. GRUNLEY, PRESIDENT, GRUNLEY CONSTRUCTION 

COMPANY, INC.; KATHLEEN McKIRCHY, DIRECTOR, COMMUNITY SERVICES AGENCY, METROPOLITAN WASHINGTON 

COUNCIL, AFL-CIO, ACCOMPANIED BY CAMILLE CORMIER, 

DIRECTOR, LOCAL PROGRAMS AND POLICY, WIDER OPPORTUNITIES FOR WOMEN; AND LARRY GOLD, DIRECTOR OF 

COMMUNITY SERVICES, COVENANT HOUSE DC 

Mr. O’KEEFE. Chairwoman Norton, Members of the Subcommittee, my name is John O’Keefe. I am the division president 

for the public division in the Mid-Atlantic region for Clark Construction Group, LLC. Founded in 1906, Clark Construction Group 

is one of the Nation’s most experienced and respected providers of 

construction services, with over $4.5 billion in annual revenue, 

with major projects throughout the United States. We perform a 

full range of construction services, from small interior renovations 

to some of the most visible architectural landmarks in our country. 

Projects we are known for in the Washington area include the 

Verizon Center, the U.S. Department of Transportation headquarters, and the Largo Metrorail station. 

Here in the Washington area, our home, Clark is committed to 

working with the community with demonstrated success in creating 

opportunities for small businesses. Also, last year we testified before the Subcommittee on Federal Workforce, Postal Service, and 

the District of Columbia on our program to hire ex-offenders. This 

successful program has provided well-paying jobs with benefits and 

training opportunities to ex-offenders for the past 8 years. 

Today I am pleased to respond to the Subcommittee request that 

Clark address the use of stimulus funds provided by the American 

Recovery and Reinvestment Act of 2009. To date we have been 

awarded four projects which include ARRA funding. Three of these 

projects are in the National Capital area. The first is the Air National Guard Readiness Center-Area D, located at the Andrews Air 

Force Base; the emergency repairs for the settlement at the Jefferson Memorial Seawall; and the construction of the new U.S. Coast 

Guard headquarters building at the St. Elizabeth’s campus. 

The Air National Guard Readiness Center-Area D at Andrews 

Air Force Base was awarded on July 30th of this year, and allowed 

for additional work to continue under an existing IDIQ contract. 

While completing needed improvements, this project has and will 

continue to allow for 6 Clark employees and about 25 construction 

workers to remain on the job daily over the entire 10- to 11-month 

duration of the project. 

Emergency repairs for the settlement at the Jefferson Memorial 

Seawall was just awarded on September 11th. We expect work to 

begin next month, and that project will be completed in about 14 

months. This effort should employ about 40 people at its peak in 

6 to 7 months from now. These will be new construction jobs as a 

direct result of the ARRA-funded project. 

The largest of our stimulus-funded projects here in the Nation’s 

Capital is the U.S. Coast Guard headquarters at St. Elizabeth’s. 

We continue to support GSA and the National Capital Planning 

Commission’s efforts to ensure that all issues related to this hisVerDate Aug 31 2005 17:17 Mar 12, 2010 Jkt 000000 PO 00000 Frm 00041 Fmt 6602 Sfmt 6602 P:\HEARINGS\ED\10-27-09\53059.TXT JASON
34 

toric property and project are addressed and that construction work 

can begin as expediently as possible. 

In the meantime, we are proceeding with our design work, and 

have received excavation bids and are reviewing them to select that 

subcontractor. Once work begins, which we expect to occur right 

after the new year, about 50 new jobs will be created on site in the 

first month. In addition, hundreds of dump truck operators will 

also be employed to move approximately 1.3 million cubic yards of 

rock and earth. By month 2, about 100 individuals will be employed directly on the site. The number of jobs created rapidly increases as the project continues, peaking at about 1,000 direct construction workers on site sometime during the second year of this 

3-year-long construction project. 

It should be noted that we can only project direct jobs the Coast 

Guard headquarters will add to the economy. I am not an economist, and I cannot tell you how many additional jobs might be 

saved or created due to the manufacturing, assembling, packaging, 

shipping of concrete, steel, wire, piping, and other building materials that are made here in the U.S. that will be shipped to this 

job. However, the number must be much, much larger than the estimated 1,500 direct construction jobs created at the site. 

Stimulus or not, construction jobs help fuel the American economy, creating good-paying jobs and creating demand for American 

goods and services. 

On behalf of Clark Construction Group, I want to thank you for 

the opportunity to testify today, and I will be happy to answer any 

questions you may have. 

Ms. NORTON. Thank you very much, Mr. O’Keefe. 

Mr. Grunley, Grunley Construction Company. 

Mr. GRUNLEY. Good afternoon, Madam Chair Norton and the 

Members. It is a pleasure and an honor to be here today. 

My name is Kenneth Grunley, president and owner of Grunley 

Construction Company. Grunley is a local family-owned general 

contractor that for over 50 years has specialized in renovations, 

restorations, and modernizations of large government and commercial buildings. Some of these projects include the main Treasury 

building, the Eisenhower Executive Office Building, National Archives Museum. And you were talking about the Old Post Office; 

I renovated that when I was a young man in the late 1970s. 

Over the past 20 years, Grunley, due to its local reputation, has 

grown along with a strong national economy. There was just a few 

pauses in the early 1990s and early 2000s, but we grew from 30 

employees to 300 employees during that 20-year period. 

In the fall of 2008, we witnessed a slowdown in procurement 

across the industry, and a doubling of competition. In addition, the 

BRAC program, the majority of that work was awarded in 2005 

through 2007, so we have seen a slowdown in the BRAC procurement. During the fourth quarter of 2008 and the first half of 2009, 

I saw our backlog at Grunley Construction drop by one-third and 

our revenues slow for the first time in a decade. For the first time 

in the company history, we were forced to lay off loyal employees 

due to a lack of work. We reduced our staff from a high of 300 to 

approximately 260, and had made a list of an additional 50 employVerDate Aug 31 2005 17:17 Mar 12, 2010 Jkt 000000 PO 00000 Frm 00042 Fmt 6602 Sfmt 6602 P:\HEARINGS\ED\10-27-09\53059.TXT JASON
35 

ees that we would have to let go if we didn’t see things improve 

in the later part of 2009. 

During the third quarter of 2009, thanks to the availability of 

stimulus funds, Grunley Construction was awarded nine projects. 

Three of these were for the General Services Administration, totalling $160 million. One was for the U.S. Department of Agriculture 

at their South Building, four for the Navy, and one for Arlington 

Public Schools, which was about an $8 million job. 

A quick rule of thumb for our type of construction, for renovations of significant buildings, is that it takes approximately 5 

manyears to put in place $1 million worth of work. Thus, the nearly $200 million worth of stimulus work awarded to our firm would 

employ approximately 1,000 full-time workers for 1 year. The 1,000 

full-time workers are for construction crews, so that excludes supervisory and administrative staff as well as factory workers to 

fabricate the materials and the truck drivers. In addition, this has 

allowed Grunley the opportunity to continue our robust small business outreach program, our apprenticeship program, and our recent 

conversation with the local carpenters’ apprenticeship program 

about the preapprentice program. 

Just an observation about the industry—and we did a lot of GSA 

work, and some of those projects are out of town—there is still a 

tremendous amount of contractors chasing a very few projects, and 

the competition is fierce. The prices, I believe, are becoming unrealistically low. From the subcontractor community there really is no 

bottom. The subcontractors are willing to take jobs at whatever 

number they hear on the street, and it does caution me for the future on where we will end up with that. 

The stimulus program has been great for Grunley Construction 

and, I think, for a lot of our competitors. Obviously, our concern is 

when the stimulus dollars run out, will we see the commercial industry lead the way in the future, or will we possibly be just avoiding a problem until 2011? 

Thank you. 

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

Kathleen McKirchy, Executive Director, Community Services 

Agency of the Metropolitan Washington Council of AFL-CIO. 

Ms. MCKIRCHY. Good afternoon, Chairwoman Norton, and thank 

you for inviting us to this hearing. I am here on behalf of the Community Services Agency, which is the nonprofit arm of the Metro 

Washington AFL-CIO, which is the area labor federation, with 175 

local unions and about 150,000 union members in the area. 

I also would just like to pass on the regards of the president of 

the labor council, Josh Williams. 

I want to thank you for making dollars available to help us put 

area residents back to work and to help them reap some of the benefits of the Federal stimulus spending, and hopefully the private 

sector economic development which we think will result from some 

of this spending. We are very honored to have won a contract from 

the General Services Administration to provide preapprenticeship 

training and placement services to 220 area low-income residents, 

which are including women, minorities, youth, and ex-offenders. It 

is very gratifying to us that this award was made to an entity that 

is connected with registered union apprenticeship programs, all of 

36 

which are jointly operated labor-management programs, and they 

are among the best in the country for the level of training, completion rates, and continuing career development for workers. 

We also are honored to be partnering with Wider Opportunities 

for Women, who you will hear from in a moment, and also from 

Covenant House D.C., who you will hear from in a moment. In addition to that, we have partnerships with the Associated General 

Contractors of D.C., which represents over 500 area construction 

contractors, and we have agreements with over 30 communitybased organizations who will help us recruit area residents for the 

project and work with us on case management for these folks. 

Our contract was just awarded effective October 1 of this year, 

so we are just getting rolling. Our deliverables include providing 

preapprenticeship training to 180 individuals, and we will be including the core curriculum, which is something new from the 

Building and Construction Trades Department at the AFL-CIO, 

which includes safety and health training, CPR and first aid, blueprint reading, orientation to the construction industry, construction 

math, tools and materials and that sort of thing, in addition to job 

readiness training to make folks good candidates for employment 

with the area contractors. 

We will also be doing some green orientation and training specifically around weatherization and some of the new building materials that will be used in construction as everybody turns green. 

The Associated General Contractors has a green construction curriculum, and they have offered to work with us to implement that 

with our students. 

We are also going to be providing hands-on experience for the 

students at some of the area union construction apprenticeship programs. They actually work with tools. They work with materials. 

They weld. They start learning the different trades that are possible within this industry and start figuring out where they think 

they might want to end up. The classes will be divided into two 

groups. Those for 18- to 24-year-olds will be run at Covenant House 

on Mississippi Avenue in Southeast. For those 25 and older, they 

will be held at Cement Masons Local 891 on Kenilworth Avenue 

NE. 

We will also—in addition to the 180 people that we will be training, we will also provide job placement and case management services to 32 young people who come through Covenant House’s Artisans Program, which is a carpentry training program for young 

people. 

Our first class is scheduled to start on Monday. We expect to 

have 30 people over the age of 25 who are starting that class. Of 

that group of 30, about 85 percent of them at the moment are D.C. 

residents. And it is a 6-week training program. At the end of the 

6 weeks, we will do heavy-duty job placement with these folks to 

ensure that they get employed. We will also be following them at 

30, 60, and 90 days throughout the grant period to ensure that 

they retain their positions. 

We are very excited about all of the GSA activities that will be 

going on in the metro Washington area, including the Coast Guard, 

Homeland Security, and also the Federal Government retrofits that 

will be going on. We have already had conversations with GSA 

37 

about relaxing possibly their restrictions with security background 

checks so that we can ensure that ex-offenders are able to get some 

of these jobs, and they indicated that they will be somewhat flexible in this area. 

Also I believe that Clark Construction will be providing a trailer, 

or GSA will in conjunction with Clark, at the St. E’s campus once 

the Coast Guard project gets started, and this trailer will have 

training space for up to 20 people. So we hope to be able to use 

that space not only to expand our training, but also to recruit residents from Southeast D.C. to work on those projects. We have already been in touch with Clark Construction, and we look forward 

to working with them closely on helping get jobs for D.C. residents. 

I would like to just conclude by thanking you for the leadership 

role that you have played in helping to get these funds earmarked 

for the metro Washington area. And we, with our partners, are 

very committed to running a quality program and getting local 

residents into good construction jobs. 

Ms. NORTON. Thank you, Ms. McKirchy, but actually I didn’t get 

them earmarked. You and the Metropolitan Council competed with 

all 11 regions. The regions that made the first cut had to have the 

highest unemployment, and then it was a straight-out competitive 

process. And I congratulate you on winning one of these contracts. 

Ms. Cormier. 

Ms. CORMIER. Thank you. Good afternoon, Chairwoman Norton 

and Members of the Subcommittee. I am here this afternoon representing Wider Opportunities for Women, or WOW, which is a national and local D.C. nonprofit women’s organization that works to 

create pathways to lifelong economic security for America’s women 

and girls. 

WOW has a long history of providing such pathways to low-income women through activities promoting their employment in construction and other nontraditional occupations for women. We were 

actually one of the first organizations in the country in the 1970s 

to provide green jobs training to women through our program at 

the Blue Plains Wastewater Treatment Facility in Southwest 

Washington. 

As I speak with you today, WOW is convening the first-ever 

Green Jobs for Women Training Institute, and has brought to D.C. 

for the 2-day kick-off partners from 10 States around the country 

who engage in construction and green workforce and economic development for women. One of these partners in attendance is, in 

fact, the only other contract recipient through this GSA funding 

stream, Oregon Tradeswomen, Inc. 

We are also really pleased to be able to say that we have secured 

stimulus funding for women in nontraditional jobs by the Department of Labor to develop a green jobs guide for women and related 

on-line curriculum so that we can continue to get resources out to 

the field, practitioners, researchers, funders, et cetera. They can 

begin to focus their efforts. We are especially honored today to be 

partnering with the CSA and Covenant House D.C. on this new direct-training effort in DC. 

As my colleague has provided an excellent program overview, I 

will put this training effort into the larger context of targeting lowincome, high-barrier job seekers, particularly women, and how best 

38 

to serve them using Federal stimulus dollars through specific legislation and best practices. 

WOW’s experience working nationally and locally to prepare and 

place women into nontraditional jobs makes clear that targeted dollars for their recruitment, hiring, and promotion is essential if they 

are to be on an equal playing field with men. Even today we see 

that women represent basically less than 5 percent of workers in 

most building and construction sectors. We also know that with the 

targeting of funds like that in the original ISTEA and WANTO legislation, women do enter and succeed in these jobs in much greater 

numbers when such resources and incentives are in place. Most importantly about this is that these are the kinds of jobs where lowincome women without postsecondary college degrees can earn 

enough money to take care of themselves and their families. 

For these reasons, WOW strongly supports your proposal, Congresswoman, in the current transportation bill to make the training 

of underrepresented workers mandatory. Like the Transportation 

Equity Network, WOW would urge the Committee and the Transportation Committee and the Subcommittee to go further and increase funding for the on-the-job training and support services line 

items from one-half of 1 percent to 1percent of funds going out to 

the field for highway construction, transit, and rail projects. We 

also urge you to require 30 percent of the workhours on large 

projects be reserved for low-income people, including ex-offenders, 

women, and minorities. And we also endorse maximizing the use 

of the Registered Construction Apprenticeship System and Community Benefit Agreements. 

In addition, we thank you and your colleagues in the House for 

the passage in June of the climate change bill and its Green Construction Careers Demonstration Project. We view this legislation, 

with its recruitment and hiring targets, as a foundation for more 

ambitious, yet essential mandates to include underrepresented 

workers in construction, and are actively working with our State 

partners around the country to help ensure passage of similar legislation, including the version that is pending in the Senate. 

I would just like to close by thanking you, Madam Chairwoman, 

for the leadership role you have played in securing these funds for 

the D.C. area and going forward to increase the employment of the 

area’s most marginalized residents. My thanks also to Members of 

the Subcommittee, and I am happy to answer any questions. 

Ms. NORTON. Thank you, Ms. Cormier. 

Let me ask the witnesses, I need to know how each of you relates 

to the other on the apprenticeship program. I need to know how 

Clark and Grunley are using the preapprenticeship program, if 

they are. And I need to know how Ms. McKirchy and Ms. Cormier 

relate to existing projects. We have a disproportionate number, for 

example, in this region and even in this city. You have described 

some of them. You have 22 sites, for example, are GSA sites alone 

that don’t even involve the DHS. 

Mr. O’Keefe, to what extent is an apprenticeship or 

preapprenticeship program part of what you are doing? 

Mr. O’KEEFE. We do intend to integrate the activities specifically 

at the Coast Guard project with CSA. The project will have a numVerDate Aug 31 2005 17:17 Mar 12, 2010 Jkt 000000 PO 00000 Frm 00046 Fmt 6602 Sfmt 6602 P:\HEARINGS\ED\10-27-09\53059.TXT JASON
39 

ber of opportunities for apprentices. And the large majority of our 

subcontractors will have registered apprenticeship programs. 

Ms. NORTON. That is now a requirement. This started as a requirement in this region. The Registered Certified Apprenticeship 

Program, which we asked and negotiated with the GSA initially for 

this region, is now a nationwide requirement if you want to do 

business with the Government of the United States to ensure quality in the labor we bring to the table. 

Mr. O’KEEFE. That is correct. And in general the Davis-Bacon 

Act requires, depending upon the trade, a required number of apprentices. But on average, if you average it out over the whole job, 

it is basically going to mean there is going to be an apprenticeship 

position for every four journeymen on average. So on a job of that 

size, we are talking about hundreds of apprenticeship positions on 

the job site. 

Ms. NORTON. Now, are you prepared—I was pleased to hear you 

say you are prepared to deal with the community services contract 

that has already been awarded. You speak of apprentices, and, of 

course, that is important to hear, but you recognize that this work 

involves preapprenticeship programs as well. Are you prepared to 

deal with preapprenticeship programs as well as with apprentices, 

already qualified apprentices? 

Mr. O’KEEFE. Yes. Our intention is to work closely with GSA and 

CSA to take those—the people that graduate from the 

preapprentice program, and align them with our subcontractors 

who have openings for apprentices on the project. 

Part of the job opportunity trailer that they are talking about, we 

are teaming with GSA who has taken the lead on that, but we intend to have that trailer there. It is going to provide a way for residents and small business, local businesses right there in the community, to have access directly to the job site to understand what 

work is coming up, what are the opportunities for apprentice positions, and a schedule of when work is going to be happening on the 

job site and when they can participate in competing for that work. 

So the trailer is going to serve multiple functions, but the idea 

is that we integrate with CSA and try to link up those graduates 

from the preapprentice program with the apprenticeship needs that 

we have from all of our subcontractors at the site. And we think 

that that is a good marriage. 

Ms. NORTON. That would work. That is what we will be tracking. 

That would work very well. 

Mr. Grunley, how about the work you are doing in preapprentice 

and apprenticeship programs? 

Mr. GRUNLEY. Yes, ma’am. We are proud to be members of the 

local carpenters union since 1955, so we do employ our own carpenters and our own apprentices. A gentleman who works for me 

this year is the secretary of the Carpenters Training Fund—I am 

sorry, Carpenters Training School, and has been in conversations 

with the—I don’t know the gentleman’s name, but the gentleman 

who runs the school for the carpenters. Yeah, Tom Barrett. And we 

have talked to him about setting up a preapprenticeship program. 

He told me that he has not had great success in the past, but I 

don’t believe that there was any financing behind what they had 

done in the past. He shared with me that if he ran 10, what he 

40 

has found in the past running 10 kids through the program, that 

he would probably not recommend more than 2 of them for employment. So what I am hearing today, hopefully that will change. 

I was planning on doing this as kind of a pilot program at 

Grunley with the carpenters at really no expense to the government or GSA on any of our projects and try it myself. 

Ms. NORTON. Actually, I appreciate what you are saying, Mr. 

Grunley. We had an experience here, I will say this to Ms. 

McKirchy, which frankly did not commend itself to me. The District 

constructed the Nationals Stadium, and it had a magic opportunity 

that it had every intention to fulfill. It recognized that working 

with unions you had a better chance of getting people moved from 

one job to the other job. It had precisely no effect, so far as I can 

see, because they simply threw the kids at the work. So far as we 

can tell, there were nothing but about grumbling about it. 

You can’t say to people at Local X, Y, Z, 1,2,3, here is some 

preapprentices, never been exposed to the weeding out. Yes, Mr. 

Grunley, part of a preapprenticeship program is strict, is that I 

wouldn’t want to work on any construction job—and let me tell you 

something else. The sons of those who worked those jobs don’t want 

to work on them either. And I am sure you and Mr. O’Keefe will 

attest that during the period, the boom period of a few years ago, 

you would often find shortages of trained journeymen for the reason that journeymen are like everybody else; they are aging out, 

they are baby boomers, they are going to have good union retirement, and they are gone. 

One of the reasons that it is absolutely imperative that we have 

a preapprenticeship program is, one, that we are going to have 

those shortages again. We need it, unless you are going to be importing workers the way we are importing every other thing in this 

society. And, two, it is time that people who were traditionally excluded from the construction trades, people who were black and 

brown and female, took advantage of this opportunity to get a foothold into construction trades which specifically excluded them. 

Now you will find the construction trades are wide open. But if 

you go through the union, which often places trained journeymen, 

you can’t expect the journeymen on the ground, who are referring 

people who themselves were trained through a measured process, 

to proceed with the pool that is now before us and to pick out people who, upon being slapped onto the job, simply pick up the cudgels and act as if they were apprentices. This happened too often at 

the ballpark. There was not in place a rigorous preapprenticeship 

program. 

If I can be clear, actually they told me when I went to Yale Law 

School that they no longer said this: Look to your left and look to 

your right. The person you see on either side will not be here next 

year. Before I got there—I guess that is how I made it—they no 

longer threw people out that way, used the process of the first year 

to weed people out. Well, guess what? Because this is work, it 

means you got to get up, you got to be with Clark and Grunley at 

7 a.m. or whatever time they say. You got to be there in 40-degree 

weather, at 90-degree weather. 

I want people exposed to that. I want them thrown into that, and 

say, if you want it bad enough, and test it. And I think most people 

41 

don’t want it bad enough. That is why the sons would rather sit 

at a computer, where they are doing low-level computer work, 

while we have to bring over people from Europe and India and everywhere else to do computer work at the level we need it. They 

would rather sit there and do that and get fat than, in fact, go out 

and take on that weather, take on that hard labor even for high 

union wages. 

So I don’t care if, in fact, they weed out all but a couple for Mr. 

Grunley. He is going to be held to produce the highest level of work 

for the Federal Government. We do not play. We want these people 

trained, but we do not play. We deal only in a competitive process 

with the very best in the business. The reason we want certified 

apprentices is because the best in the business do not take chances 

with fly-by-night operations that come in and say, oh, we got some 

apprentices, too. 

So we know the quality we want. We know what you need to get 

it. And we know that most of the people, Ms. McKirchy, Ms. 

Cormier, who come through your program are not ready to make 

top dollar putting in this kind of hard labor in this kind of weather. 

So I need to ask you what is your—what is the word you used, 

Ms. McKirchy, core curriculum that you mentioned on page 2? 

What is the completion rate? I am not looking for a top completion 

rate. I am looking to get some people out there like the ex-offenders. The reason that we have such a return to the ex-offenders, 

they have been through, excuse me, hell. They know this is their 

last chance, and so they are ready to do whatever it takes. 

I am the first to admit that when you have been sitting there 

playing computer games, you may not be ready. Fine. But we need 

to know we have a core curriculum and a screening process that 

will help us know who wants to do this and who doesn’t. Don’t 

think any of the worst of you. I am right with you. I can’t make 

it. But I need not to have on my projects people who aren’t better 

than I am and who are ready for this. And I need to know from 

both of you how can you assure me that you are going to weed out 

the people who they don’t know either until they get before you 

that this is not for them? And I need to know how you will use a 

curriculum which helps us get to those who really want to do it can 

do it. And what is in place now, especially since we understand 

from Ms. McKirchy that her first class begins on Monday? 

Ms. MCKIRCHY. First, I would say that part of the success is trying to assess people at the beginning about their aptitude and attitude about doing this kind of work. There are a number of tools 

we used in past programs. They are not totally foolproof, but that, 

combined with very serious talk with people before they are accepted into the program about what construction is and is not, helps 

give people a realistic idea of what these jobs are. 

It is a tough job to do, because I think my cohorts here would 

agree that if you take any random hundred people, maybe five of 

them would have an interest and aptitude in working in construction. Part of our job as a screening process is to make sure people 

are clear about what these jobs are. You have to be at the job at 

6:00 or 7:00 in the morning. It is hot. It is cold. It is outside. It 

is inside. You know, you use the facilities that are there. And it is 

tough work, it is physical labor. It is hard work. But also the posiVerDate Aug 31 2005 17:17 Mar 12, 2010 Jkt 000000 PO 00000 Frm 00049 Fmt 6602 Sfmt 6602 P:\HEARINGS\ED\10-27-09\53059.TXT JASON
42 

tive side, it is rewarding work. You get to see what you are doing. 

For people who have an interest in working with their hands and 

seeing their project develop in front of them, this is good work. 

Secondly, we at this point are requiring high school diplomas or 

GEDs. If people are close to getting their GEDs, we will help them 

get them. But our experience in the 3 years we have been doing 

this kind of training is that those are the people most likely to succeed through this process. They also have to be at around an eighth 

grade reading or math level. You cannot succeed on a job site if you 

can’t read. You can’t succeed on a job site if your math skills aren’t 

where they should be. Additionally, we drug-test people. 

So that all happens before they even start the 6-week program. 

We then treat the 6-week program as a job. They have to be there 

on time. Our classes are going to be starting at 8 a.m. They have 

to be there on time. They have to attend. They have to participate. 

If they are not doing that by the end of the first week, we will start 

weeding people out. But hopefully we will have screened people 

adequately so we have got folks that are taking this seriously and 

want to succeed. Our plan is that we will not graduate people that 

aren’t completing the program and aren’t succeeding in the program. And we certainly don’t—— 

Ms. NORTON. And we are going to have a test right before you, 

because these people won’t be going off into some job in the great 

beyond, they are going to go straight to the work that is going on 

in the District and in the region. 

Ms. MCKIRCHY. Exactly. And we don’t want—one of our objectives, of course, is to develop good relationships with the contractors. We want to send them ready-to-work people who are going to 

be successful employees. And to the extent that we don’t send them 

people like that, we aren’t going to have a successful project. So 

that is our intent. 

The curriculum that the Building Trades Department at the 

AFL-CIO has developed is similar to many other curricula that 

have already been put out there. They have tested it. They have 

gotten input from union contractors and from all of the 16 building 

trades unions, and it is intended to be a baseline curriculum that 

meets the needs of all the trades. It provides the basic information 

that people need to be able to be successful apprentices on a construction site: the basic background in math as it relates to construction, blueprint reading, OSHA 10 certification, CPR, first aid, 

tool ID and use, actual exposure to some job sites, exposure to the 

various trades and how to get into the various apprenticeship 

schools. And that is what the curriculum is intended to do. 

Ms. NORTON. Ms. Cormier, the same question for you. 

Ms. CORMIER. Sure, thanks. 

Out of that 5 out of 100 who have the aptitude to be construction 

workers, 1 of them is a woman, and one-half of her is going to want 

to do it. So we certainly have our work cut out for us. The genderfocused components of this new program in partnership with CSA 

and Covenant House are halfway through the 6 weeks, the women 

who are obviously going to be making it will get paired with individual mentors, not just support groups, although that will be important, too. 

Ms. NORTON. Individual what? 

43 

Ms. CORMIER. Mentors. Experienced local tradeswomen who 

want an individual relationship with our graduates as they are getting ready to graduate and will go out there and will follow them 

for at least a period of a year after graduation. 

We do currently run support groups from past construction training programs. We certainly intend to ramp that up, especially with 

the new program. At least quarterly, if not more often than that, 

we want to do support groups for the women. 

The case management that we will be focusing on really—— 

Ms. NORTON. By the way, Ms. McKirchy, are there similar support groups for many of these youngsters who will come out of circumstances where they have not been mentored even by fathers, 

much less others in their communities who have been journeymen? 

Do you have any support group—— 

Ms. MCKIRCHY. Yes. I guess I might ask Larry Gold, who is the 

community service director from Covenant House, who deals with 

the 18- to 24-year-old population, to also pipe up about what they 

have been doing. 

Ms. NORTON. Ms. Cormier, we will get back to you in a moment. 

Mr. Gold, will you identify yourself, please? 

Mr. GOLD. My name is Larry Gold. I direct community services 

at Covenant House Washington. I know that you are familiar with 

Covenant House and the wraparound services that we provide to 

the young people who come through our programs. 

I have actually been at Covenant House for over 7 years, mostly 

with the Artisans Program, which is a vocational training program 

in woodworking. I think that for us, a large part of the work that 

we have done is experiential learning with our youth, where they 

actually have the opportunity in a worklike setting to learn the 

kinds of values and skills that they are going to need. 

Ms. NORTON. I want to know about the notion of Ms. Cormier 

says, and this is very important for the women, you know, most of 

them have never seen a woman on a construction job unless you 

take a microscope, so that the notion of having a woman who has 

been on the job as a journeyman or an apprentice, that can have 

an effect like nothing I can think of. I am asking, understanding 

that many of the youngsters from disadvantaged neighborhoods, 

and that is who you are getting. Today most of our kids—here you 

can get $10,000 if you live in the District of Columbia, because of 

a bill I have, to go to any public university in the United States. 

You get $2,500 straight out. All you got to do is get in it. 

So who are you getting? You are getting, as Ms. McKirchy says, 

people who have high school or are on their way to getting GED. 

Now, the youngsters from Covenant House will often be youngsters who have grown up in households with only women in communities where the men have not been trained to do construction 

work, where there is a great deal of crime. So they, like Ms. 

Cormier’s women, have never been faced with a man who has been 

a journeyman, who has been on a job. Is it possible to encourage 

these youngsters so that there are some journeymen somewhere 

with whom on at least a periodic basis this kid could work or this 

young person, as is likely to be the case, could work so that he 

could see success is possible where this brother who also just had 

a high school education and is now making $20 an hour? 

44 

I am trying my best to break through what I see is a formidable 

barrier to people even believing that they are ever going to get to 

making the high union wage that journeymen, in fact, are able to 

take home. So I am asking you, if you don’t have it, whether you 

could explore for the youngsters who come out of disadvantaged 

homes, the male youngsters, getting them somebody who makes 

them believe that they can do this work because they see someone—and they are all over the place. There are, for example, African American and Latino journeymen who will be hired on these 

jobs. 

Mr. GOLD. I can only say that, again, with my experience at the 

Artisans Program, we had a volunteer who was there for over 3 

years who had spent 20 years—an African American who had come 

up from the South and worked extremely hard to become a carpenter at the White House and the State Department. And he provided a mentorship opportunity. And—— 

Ms. NORTON. That is the kind of thing I am talking about, somebody who is kind of like them and has succeeded. Because they go 

out in the street, they don’t see many people like them, which is 

one of the reasons we were able to get extra money for stimulus 

funding for preapprentice and apprenticeship programs. 

Continue, Ms. Cormier. 

Ms. CORMIER. Yes. So in addition to being paired with an experienced tradeswoman as a mentor, and attending at least quarterly 

support group meetings, the case management that we will be 

doing on this project and have done to date is really focused on the 

issues that a woman will experience and quite often a single head 

of household will experience around making sure that the barriers 

are cleared for you with transportation; you have got a realistic, 

failsafe child care plan. If you need more of our help perhaps than 

a guy enrolled in the program to get that learners permit and/or 

that driver’s license, because it is kind of out of the ken of your experience, then our case managers are there to help smooth those 

transitions out so that the women can be adequately supported so 

that then they can go on and do their thing and be responsible and 

have a good training effort, and they get placed somewhere and be 

able to stay in that job. 

And our follow-up support for any of the graduates with this program will be up to a year. So we will be following them as well. 

And, of course, with our folks here on the panel with us, we will 

have some very immediate feedback on how some of our graduates 

are doing. But we certainly intend a follow-up piece after they are 

placed on the job to ensure their job retention. 

Ms. NORTON. I appreciate this testimony. This is not my father’s 

generation of the Great Depression where, you know, anything that 

enabled you to live. These are people who don’t understand why 

life hasn’t been given to them as it was given to others immediately 

before them. And, frankly, we have given them to understand that, 

and we have got to give them the support that is necessary so that 

they understand that nothing gets accomplished without hard 

work. 

Mr. Grunley, you indicated that subcontractors—I think you 

were indicating there might be some concern about the quality of 

subcontractors, because you said that people are so hungry for 

45 

work, to use subcontractors as an example, that you can get subcontractors for very low bids. Would you elaborate on that? 

Mr. GRUNLEY. If I could just go back to the preapprentice for one 

item real quickly? 

Ms. NORTON. The what? 

Mr. GRUNLEY. Preapprentice program for 1 second. 

I heard you talking about training ex-legal offenders. And my 

only concern with that is under HSPD-12, I don’t believe they will 

get onto Federal construction projects. That is something they are 

going to look at very carefully. 

Ms. NORTON. Ms. McKirchy? 

Ms. MCKIRCHY. We have had some conversations with some of 

the contracting people at GSA, and they have indicated that they 

are prepared to be somewhat flexible, and to look at case-by-case 

basis for placing people—— 

Ms. NORTON. Federal law does not keep a contractor from looking on a case-by-case basis. For example, you will find people who 

have had offenses as juveniles. It is pretty hard to find some kid 

who grew up in the inner city who hasn’t had some kind of something for which some white kid wouldn’t even have come into court, 

and GSA knows how to tell the difference. And therefore, I ask you 

to look closely at anyone that has gone through their screening, because it will take a whole lot to get through their screening and 

get to the point where such a preapprentice is being held out for 

an apprenticeship program. I accept your notion that that indeed 

is the way in which Federal work is handled according to the nature of the site. But let me ask you about subcontracts and what 

you are finding, given how hungry people are to get subs, to be 

subs. 

Mr. GRUNLEY. The local subcontracting community, most of them 

are family-run businesses that spent years building up a workforce 

and who is faced with enormous pressure to lay off these workers 

for a lack of work. I get calls regularly from our subs, don’t you 

have anything to bid? We will take anything you have. And there 

appears to be no bottom price for the subcontracting community. 

When we take bids on bid day, we try to award to the low responsive bidder on bid day. And in the past, once we are awarded a job, 

people will call us, you know, what do we need to do to get the job? 

And we say, oh, we awarded it yesterday. 

What we are finding now is that it doesn’t matter—you could tell 

them any number, and they said, oh, if you had called me back, 

I would beat that number. The numbers are getting driven down 

dramatically. I am seeing projects for GSA that I think are coming 

in 30 percent below the budgets. I know that has occurred at the 

Corps of Engineers also. And there is going to be a price to pay at 

the end. 

We used to get about one letter a quarter from some law firm 

looking for money for one of our subcontractors. We haven’t 

changed the way we do business, and I say we get one a week now. 

So there is such an enormous pressure on the subcontracting community, their prices. They don’t know how to keep their employees, 

so they are cutting their prices in the hope of a turnaround. I think 

if the stimulus funds—— 

46 

Ms. NORTON. I can understand what you are saying. I wonder if 

Mr. O’Keefe is finding the same, and how you, therefore, given the 

fact everybody—you want to go that low; let me go lower is the response. How do you know, therefore, who is the quality subcontractor to take? Mr. O’Keefe? 

Mr. O’KEEFE. First of all, I can certainly confirm what Mr. 

Grunley has just said. We are seeing the same things. We suspect 

that in some cases, in many cases, subcontractors are bidding numbers below their cost in an effort to keep their company alive and 

to keep their core employees employed. We have certainly seen, 

and as evidenced by the national construction unemployment rate; 

I think it is near 17 percent unemployment in the construction industry on a national basis. To a large extent that is the result of 

a much significantly reduced private sector of construction, which, 

you know, it has been a big part of the local construction market 

here, and it has shrunk significantly. So what you have is the same 

number of subcontractors and contractors now competing for much 

less work. 

What happens—because similar to Grunley, Clark, most of our 

work, I think, is competitively bid—we compete for the work. So 

what happens on bid day, as these numbers are coming in, you 

really have to evaluate whether you think that the subcontractors 

can perform that work, because if you just cobble together all the 

low numbers, and you put that in there, you are at risk, because 

once we put that number in, we are committed to that number. 

Okay. Whether they—— 

Ms. NORTON. And you and Mr. Grunley, because of your expertise, will have a sense of what the costs to the sub is. 

Mr. O’KEEFE. Yes. Yes. But you also have to look at what your 

competitors are doing, because Mr. Grunley is going to use some 

of these numbers. So, you know, you can’t just say, well, they can’t 

do it, so I can’t take that number. If you do that, we will not be 

low, and we will not get the work. 

So it is a fine line we are walking between trying to select the 

right subcontractors at what we think are the right numbers, but 

being right on the edge there to be competitive, to be able to be low 

to obtain the work. 

Ms. NORTON. Let me ask you, Mr. O’Keefe, and indeed we are 

submitting a question because I meant to ask it of Mr. Peck, you 

know, we clap with one hand when we hear that a building built 

from the ground up by the Federal Government is only a LEED 

building, not a gold building or a platinum building. What would 

it take to make the new Coast Guard headquarters building a gold 

building or a platinum building? 

Mr. O’KEEFE. First of all, the first level is a certified building— 

I guess they are going with the next level, certified silver, which 

the U.S. Coast Guard is a silver. 

Ms. NORTON. Silver is what they are building. 

Mr. O’KEEFE. That is correct. That is correct. And then there is 

gold and platinum. 

We have constructed all levels of LEED certification buildings, 

and I guess the bulk of that work has to be done in the design 

phase. Okay. Very little of it has to do with how it is being built; 

it is how it is being designed. 

47 

Ms. NORTON. But that goes to cost, doesn’t it? 

Mr. O’KEEFE. Yes, it does. Yes, it does. The higher the level you 

go, the more stringent are the requirements for energy efficiency. 

Ms. NORTON. So why would anybody building in 2009 for a headquarters—because the headquarters is going to be there for eternity, we are not building another headquarters for anybody—why 

would anybody want to build without getting the maximum in energy savings for the taxpayers by investing some more in the design in order to guarantee less in energy costs to the taxpayers 

down the line? 

Mr. O’KEEFE. To answer that question directly, there is a tradeoff of, first, cost versus the long-term sustainability and the costs 

for the long term. 

Ms. NORTON. But that could mean that let us say 20 years from 

now we are going in there trying to add something that will bring 

down the cost of HVAC or heat or what. 

Mr. O’KEEFE. Yeah, it is very difficult to come back after the fact 

and make adjustments without a whole-scale redesign of systems. 

Ms. NORTON. So if we don’t do it now, we are just going to be 

paying for whatever is the cost of energy wherever it goes. 

Mr. O’KEEFE. Yeah. I would like to make one note here. Although we are obligated for the silver certification, we are, in fact, 

attempting to get the gold certification for that project. 

Ms. NORTON. Tell me how are you able to do that. What are the 

differences? 

Mr. O’KEEFE. Okay. This is a design-build procurement. So we 

have control over the design and the construction of the project, 

and through that control, we are able to work on these elements, 

the mechanical systems, the water use systems, and so on. And we 

have made a commitment in house to ourselves that we are going 

to attempt to get gold on this. GSA has been working with us on 

this, and this is something we would like to try to do. The current 

design and the current program is calling for silver, but we are 

going to try to one up that. 

Ms. NORTON. Oh, that is amazing to hear that the contractor can 

himself perhaps improve on the aspiration of the agency, and I 

would encourage you to do so. I can’t tell you what it would mean 

to the Federal Government and what we would be able to do in the 

future. We believe that even in my time on the Committee when 

we began to look at energy savings, water savings, where it was 

more difficult to calculate in dollars and cents, it isn’t difficult anymore. You can calculate in dollars and cents. Even the average 

homeowner can do that today. And there is no question that this 

can be done. 

So for us not to maximize this once-in-a-lifetime opportunity—we 

are never going back, we are never going to improve on it—for us 

not to maximize on it—now, if more needs to be done, GSA needs 

to talk to me, because I am certainly willing to talk to the appropriators as we go through this prospect. The President himself is engaged now in investments that have no pay-out while he is President of the United States. All of this energy conservation that he 

is doing doesn’t have a dime’s worth of difference to him in terms 

of anything he is going to be able to show. 

48 

So I know that we are able to advocate for platinum when we 

are building the largest construction in the United States of America today and the largest in the history of the Federal Government. 

We know that, for example, platinum has to do in part with things 

that the contractor and, for that matter, GSA has done the best it 

can on this proximity to Metro. And this does have proximity, but 

it is not down the street the way many of our buildings are, which 

at least—let me ask you what else goes into platinum, for goodness 

sakes, Mr. O’Keefe? Can you think of anything, you or Mr. 

Grunley? I am trying to find out what platinum is so I will know 

whether I am just going for nothing or whether there is really 

something in platinum, some real difference. 

Mr. O’KEEFE. I will speak to that first. I don’t know all of the 

specifics, although that is something that—they actually have 

scorecards that tally up points on certain things that you have to 

achieve in order to get a certain rating, either a gold or a platinum 

or a silver. And those are all centered around use of local materials, building techniques, and the design of the energy systems in 

any facility, such as water usage. For example, if you can put in 

low-flow toilets and have a rainwater collection cistern system that 

reuses that rainwater, those are the sorts of things that you can 

incorporate into a project to reach these higher levels of certification. 

Ms. NORTON. What we are going to do, I am going to ask staff 

to get from GSA or the comparable—or the expert organizations 

what the real difference is. For example, staff says, you know, a 

bike rack will get you that. That is almost a no-cost something. 

Runoff may cost a little more, but it may be well worth it, given 

the fact that water savings is part of what we are talking about, 

too. 

So I am interested in finding out, particularly given your testimony that you are going to try to at least get the gold, to find out 

what it is that can be done. 

Do you, Mr. Grunley, do you, Mr. O’Keefe, have a small business 

plan connected with the work you are doing in the stimulus funding for the Federal Government? 

Mr. GRUNLEY. All of our Federal projects have a small business 

plan, whether they are in the stimulus package or not. 

Ms. NORTON. Could I ask you and Mr. O’Keefe to get within 30 

days to this Subcommittee a copy of your respective small business 

plans? Could I ask you to get to me as well within 30 days the 

number of apprentices you have hired and the number you intend 

to hire as you foresee at the moment? 

Mr. GRUNLEY. You would like those apprentices for both our own 

workforce as well as the subcontractors on the project? 

Ms. NORTON. I would. I would. 

Ms. NORTON. And I am pleased that you heard my discussion, because I am certainly going to give you credit. I want to see that 

GSA gives you credit. And I am going to find out whether we can 

change this for at least construction, whatever are the reasons for 

other kinds of subcontracting work. 

I would also like from each of you, Mr. Grunley and Mr. O’Keefe, 

a list of the projects you are undertaking throughout the United 

States that utilize stimulus funds. 

49 

Ms. NORTON. I want to thank all of these witnesses. You have 

very much enriched our record. You saw from the appearance of 

the Chairman himself that we are down to the really itsy-nitsy 

gritty here. 

I want to say to all of you, jobs could not be more important here. 

If we end up getting a lot built and a lot rehabilitated, and we are 

not able to show a large number of jobs for it, we will all be held 

accountable. So bear in mind for all the other questions we have 

asked, we want real people employed on the job. We want you to 

reach out to the existing community. 

And particularly you, Mr. O’Keefe, are, for example, building for 

the first time in the history of the United States on the other side 

the Anacostia in the lowest-income community in the District of 

Columbia. Imagine how you are going to be watched like no contractor has ever been watched before in a period such as this, and 

not only by me, but especially by the community. From all I understand from the GSA personnel who have been working with you, 

we have no dissatisfaction with what is happening now. But do understand that as we put questions before you, we feel it incumbent 

upon ourselves to do so because of the large difference between ourselves and other Committees, because this money is under our direct supervision, and not under the supervision of the States, and 

because this is the largest amount of money at one time to do work 

quickly that GSA has had, and we have got to be accountable for 

it. 

Thank you very much for very important testimony today, and 

this hearing is adjourned. 

[Whereupon, at 5:03 p.m., the Committee was adjourned.] 

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Æ 


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