Segment 2 Of 2     Previous Hearing Segment(1)

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THE U.S. GENERAL SERVICES ADMINISTRATION'S FISCAL YEAR 2001 CAPITAL INVESTMENT PROGRAM

Tuesday, April 11, 2000
House of Representatives, Committee on Transportation and Infrastructure, Subcommittee on Economic Development, Public Buildings, Hazardous Materials and Pipeline Transportation, Washington, D.C.

    The subcommittee met, pursuant to call, at 3:05 p.m. in room 2253, Rayburn House Office Building, Hon. Bob Franks [chairman of the subcommittee] presiding.

    Mr. FRANKS. The subcommittee will now come to order. I wish to welcome the members of the subcommittee to this hearing on GSA's Fiscal Year 2001 Capital Investment Program.
    Before we begin, I would like to ask unanimous consent that a member from the full committee, Mr. Quinn, when he joins us, be able to sit with us today and to question the witnesses; without objection, so ordered.
    This is the second of two hearings held on the investment program. At our first hearing, we heard from many members and Federal judges, who have an interest in the courthouse construction program, in addition to Aren-Almon Kok, and an expert in contract guard security.
    Today we will hear from Mr. Robert Peck, the Commissioner of the Public Buildings Service of GSA; and Mr. Bernard Ungar from the GAO.
    Mr. Peck will address the overall fiscal year 2001 program, and Mr. Ungar will discuss the findings of a GAO report concerning the performance of the repair and alteration portion of the capital investment program over the past years, and how it relates to this year's request.
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    GSA is requesting $779 million in new authority to acquire sites, design, or to construct 19 Federal buildings, United States courthouses, and border stations, nationwide. $488 million is for new courthouse construction projects.
    The Administration is also requesting $721 million for the repair and alteration program, of which $30 million is for the national glass fragmentation program.
    While I am encouraged to see some level of support from the Administration for a courthouse construction program, the courthouse construction program has been significantly scaled back from GSA's request to OMB.
    Not only were several projects not funded, but the projects that did receive funding were reduced to reflect a courtroom sharing model, developed exclusively by OMB. I invited the Director of OMB to testify today and explain the sharing model, but OMB has deferred to GSA.
    I did, however, meet with OMB officials and discussed this important issue. And I am encouraged by OMB's willingness to work with this subcommittee.
    This afternoon, the full committee favorably reported eight resolutions for 11(b) studies on the courthouse construction projects that are in the site and design phase to help us better understand these projects.
    Allow me to recognize Ms. Norton for an opening statement.
    Ms. NORTON. Thank you, Mr. Chairman. I have no opening statement.
    Mr. FRANKS. Thank you.
    We will now proceed to our first witness, which is Mr. Robert Peck. Welcome, Mr. Peck; we look forward to your testimony. Thank you for joining us.
TESTIMONY OF ROBERT A. PECK, COMMISSIONER, PUBLIC BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION
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    Mr. PECK. Thank you, Mr. Chairman, and Ms. Norton, and staff.
    As you know, the GSA is the largest owner/operator of commercial style real estate in the United States. If I might, by the way, I should ask that my full statement be made a part of the record, and I will just summarize.
    We have about 55 percent of our space in 1,993 Government-owned buildings, and the remainder in about 6,400 privately-owned buildings. Our funding, and this is important, comes principally, and in fiscal year 2000, in fact, exclusively, from the rents that we charge to more than 100 Federal agencies, who are our tenants.
    More than 90 percent of the $5.5 billion we spend this year is paid out to the private sector for contracts. We are a highly leveraged, contracted-out agency. More than half of our fiscal year 2000 expenditures, just about $3 billion, will go towards lease payments in private buildings.
    I say that to put in context the capital program because, of course, the purpose of the capital program, the one that we discuss today, is principally to build and maintain the Government's assets, in which we house, as I said, a little more than half of the employees who we do house.
    We have done a lot of things in GSA in the last several years, and we have talked about this before, to make the GSA a more business-like program. Because we do have revenues coming in and expenses going out, we have a bottom line, which we can watch, and which we have been watching carefully, and with great success. And I will talk about that in a moment.
    But I also always hasten to recognize that we are not just a business program. No program in Government runs just like a business. We have some obligations that are different than what the private sector does.
    We have contracting procedures to go through which, while some of us complain about them, we always remember that they are in place to make sure that the Government is fair and open in a way that private enterprise generally does not have an obligation to do.
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    Second, we have some socioeconomic preferences that we follow, which we certainly support, which also make us different from a business. And, finally, and probably most importantly, in the last several years, we have security concerns which, unfortunately for us, are far beyond those that private sector building landlords seem to face.
    But on the business side, we have established nine important performance measures in GSA, which we call the ''Big Nine'' in our organization. We have tied regional budget allocations and even individual bonuses to our employees, to our region's ability to meet specific performance improvement targets.
    And as a result, I believe, of this program, I can report to you that from fiscal years 1998 to 1999, our funds from operations and measure of net income increased approximately 38 percent.
    We have reduced our vacant space in the inventory from 13 percent to 10 percent in just one year. Our operating costs per square foot in Government-owned space are approximately 13 percent below the private sector average.
    The average rents we pay in our leased buildings are at or below the average rate the private sector tenants pay in almost every market across the Government, meaning a cost avoidance to the Government of tens of millions of dollars.
    And our customer satisfaction scores are very important. Because in some cases, in Government-owned buildings, we have captive tenants, although we are a provider of choice and voluntary, in some instances, where we have people in Government-owned space, they have to lease from us, and our customer satisfaction scores have increased steadily since 1994, when we started measuring.
    And we are about to release in the next week or two a new set of customer satisfaction scores which show a dramatic improvement over the ones we had just two years ago.
    By pricing more realistically and reducing expenses, we have produced more net income, which is very important for us, because it is, for better or worse, the only available source of funding we have to upgrade our aging buildings.
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    We are proposing some new construction funding from the Federal Buildings Fund, as well. This is somewhat new in the past several years. We consider this to be a secondary priority for Federal Buildings Fund net income, and are recommending it for some urgent security and law enforcement projects only.
    I would reiterate what I have said before, that we believe most new construction projects should come out of appropriations to the Federal Buildings Fund, primarily because when you take a look at the amount of net income that we are realistically able to produce, we need just about all that we can get to maintain and upgrade the existing inventory.
    I will just note that in building the new buildings that we are building, and maintaining the ones we have, we are trying to take the Federal Government back to a tradition that began with Washington and Jefferson, in producing buildings that are landmarks in their community, that are architecturally distinguished, that are sources of vitality for their immediate neighborhoods, and that reflect the justifiable pride that the American people have in our system of Government.
    One thing that I will note that is new this year is, we have started a first impressions program, to redesign the entry and lobby areas of our building, so that they are more serviceable to the public, more welcoming, and at the same time, still secure.
    To get the capital investment and leasing program, as you will note in our proposed budget request this year, it notably does include a substantial new construction program, some of it funded, as I said, out of the Federal Buildings Fund and some out of a request for appropriations.
    From the Federal Buildings Fund, we ask for nine prospectus-level design and non-court design and new construction projects; fourteen prospectus-level repair and alteration projects; twelve prospectus-level repair and alteration designs; an ongoing CFC reduction and energy saving program; and as you noted, a glass fragmentation program, set out separately from a direct appropriation to the Federal Buildings Fund.
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    We are asking for funds for two construction programs in this area: the Food and Drug Administration Headquarters in Montgomery County; and the new Headquarters for the Alcohol, Tobacco, and Firearms Bureau in Washington; and in addition, seven new courthouse construction projects, as you notice in a total budget request of $488.4 million.
    In the repair and alteration program, which I know we will be discussing in part with the GAO, I just note the reason we say that we need just about as much funding as we can garner for is that half of our Government-owned buildings are more than 50 years old.
    Nearly a quarter of our inventory bears some kind of historic designation. We have an obligation to the country in those historic buildings to maintain them, because they are jewels, in many cases, in their community. And, in fact, they still provide us productive office space.
    For fiscal year 2001, we are proposing a budget of $721.2 million for repair and alteration, which is an eight percent increase over what we received in fiscal 2000.
    I know there is always a question about how much money you need. And I could flippantly say, as much as we can get. But there are some private sector benchmarks which we can go by.
    In the private sector, people generally try to spend two to four percent of the value of their inventory on repair and alteration. Our inventory has a value of about $32 to $33 billion dollars. It is significant.
    Our request would be something like 2.5 percent of the inventory's replacement value which, I have to tell you candidly, I believe, is at the low end of what we need for an inventory that is as old as ours is.
    How do we allocate the money that we do get, since it is not enough? And I have to say, nobody in the building business ever thinks they get enough money to maintain their inventory.
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    For us, because we run like a business, we can actually use the same kinds of tools that the private sector uses in allocating the money. We have a return on investment methodology which says to us that where we have the ability to spend money that will make us money in the Building Fund, that is where we should put the funds.
    Let me give you a concrete example of what I mean by that. If we do not invest in a building, to put the negative spin on it, when we go to price a building, as we are in some buildings in Washington, D.C. that are 60 to 80 years old, in some cases, the appraisers who set our prices, as they do in the private sector, take a look at our building and say, the building is not as good as it was five years ago. You have not put enough money into it. You can not charge as much rent.
    If that happens over a large portion of our inventory, we wind up in a terrible downward spiral, in which we keep getting less revenue, have less net income, and less opportunity to upgrade the inventory.
    Conversely, obviously, if we get enough money and can upgrade our inventory, we can charge rent sufficient to maintain the inventory at the level that I think the Federal employees and the visitors to those buildings deserve.
    One point I should make, having read the GAO study, it is easy to sort of add up all of the potential concerns that you can have in a building and say that is the amount of money you need.
    But a market analysis tells you something else, as well. It may be that you find that in a certain building, say, that is 30 years old, you need a new roof. But you then have to ask the question, are we going to keep the building, or is it better to divest ourselves of that building and go some place else?
    So in some cases where we do have things in our inventory of repairs and alterations that have a cost attached to them, we may not spend the money on them.
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    Also, there may be instances in which to be fair to our Federal tenants, we may have to say, this is a building in which the tenants have a legitimate gripe. If we do not put money into this building in the next year or two, these tenants are going to demand that they vacate the building, and that would punch a big hole in our revenue.
    So there are lots of reasons why we need to be more sophisticated. And I will be happy to tell you later, if we get into a more detailed dialogue about this, how we are doing it.
    We are trying to upgrade our analysis of the repair and alteration work inventory and come up with better methods of allocating those funds. We have some new computer systems on the way, as I think GAO noted in their report.
    Finally, on new construction and acquisition, I should just say that as I noted through revenues generated in the Building Fund, we are proposing to fund border stations, and the new U.S. mission to the U.N., and acquisition of site and design for a new FBI field office building.
    In the past, we have been leasing a lot of buildings for the FBI. We think, as a capital investment approach, and quite honestly, just because those buildings are unique, they should not be leased. And so we are beginning to say, in a lot of those instances, that those should be Government-owned buildings. As I noted, we are suggesting some funding for new courthouses, ATF and the FDA.
    As you know, the Administration this year proposed that we move to a courtroom sharing scheme for new courthouses. And the suggestion is that there be two new courtrooms built for every three active judges.
    I think it is a fair question, and it has been discussed in the press, and in a hearing on the other side, as well, is that the right number?
    And the short answer is, I do not think that we know. But as I have said before, it defies logic to believe that you, in every instance, need one courtroom per judge. But I think the interesting question is, where do you not? And we just do not have the data available.
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    The Administration's suggestion that we move to a courtroom sharing analysis, I have to say, is probably done out of a sense that we have been discussing this issue for many years, have not reached a conclusion, have not seen the data that we really need to come up with an answer. And so we have taken a number that is based on a GAO study done several years ago.
    Only within the last week or two, I believe, the Congressional Budget Office has come out with a report that I think does not suggest a ratio, but does suggest that courtroom sharing could be done, in some instances, without a significant impairment to court operations.
    The only thing I will say on this is that we all await, with great anticipation, the final results of the study that the administrative offices of the courts has had underway for some time. And I would urge you to urge the courts to get that study done and submitted to the Congress as expeditiously as possible, and a little bit sooner than I believe the courts are planning to do it at the moment.
    We have submitted for your considerations twelve lease prospectuses this year, which I also urge you to approve.
    One other point about the repair and alteration program is this. In order to reduce the size of the leased inventory which, quite honestly, loses money for the Federal Buildings Fund and in at least some cases puts Federal agencies in temporary locations, where they really ought to be in permanent locations, being in permanent locations would have a long term advantageous benefit to the taxpayers.
    By doing repairs and alterations on Federal buildings, we are able to recapture some of the vacant space we still have in our buildings. And it will allow us, in the long run, to see some efficiencies.
    I have attached to my testimony, but I will not drag you through it, lest I be accused once again of participating in one of the more boring hearings in Washington, that we can show that where we have flexibility to get out of vacant space, as we do in the lease program, we are doing a good job of reducing that vacancy rate.
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    Where we do not have sufficient funds through the repair and alteration program to fix up Federal space and move agencies into it, we are having a harder time reducing vacancy in the Government-owned space, and that should not happen.
    My final point is this. You will soon see, we have two suggestions for some legislative changes. The Administration, if it has not this week, will soon submit, and I believe this will go through Government reform, a proposal for some changes in the Federal Administrative and Property Services Act that, among other things, would allow Federal agencies to retain the proceeds where they get rid of buildings and property that they no longer need.
    And, second, we are suggesting that you consider raising the prospectus threshold beyond the indexing that now occurs. And I will be happy to discuss with you how, by increasing that slightly, you would actually not see fewer projects than you see at the moment.
    You would see, in fact, this would have almost no impact on your review of new construction projects, a little bit on your view of repair and alteration projects, many of which, however, are just for systems upgrades; and a more significant impact on the number of leases that you see.
    But there, too, I do not think it would deny you the review of those kind of things that traditionally have been the interest of the committee on this side or on the Senate side.
    That concludes my statement. I would be happy to answer any questions.
    Mr. FRANKS. Mr. Peck, thank you for your testimony.
    What is the total vacant, uncommitted space in the inventory, and what does that represent by way of loss to the Federal Buildings Fund?
    Mr. PECK. Let me go to the charts, as they say.
    The vacancy rate in Federal buildings, if I might have my chart here, in fiscal year 1999 in the owned space, we were at 27.4 million rentable square feet, which if someone on my staff will remind me, was about 13 percent of the vacant space.
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    And I can give you, for the record, what the loss to the Federal Buildings Fund is. I can tell you two things to keep in mind. The loss in rental revenues is probably in the range of about $400 million. It is probable that you would want to run a vacancy rate of about five percent, in the best of circumstances, because that allows you the flexibility to move people around, as you do alterations in the inventory.
    So we would always have what would look like a loss of somewhere on the order of $200 million of foregone revenue. But I will note that we are now below four percent vacancy rate in the leased inventory, because we have been focusing very hard on getting rid of that space when we do not need it, and we have the opportunity to do that.
    Mr. FRANKS. Who authorized the urban livability program, and how do you integrate our site and design decisions with local planning and development needs? And are you making your decisions subject to local approval?
    Mr. PECK. I will take the questions in order. I am one of the bigger promoters of an established center for urban development and livability, which is a way of our cooperating with local communities, both where we have existing buildings, so that Federal building plazas can be active parts of their community, like in Chicago, where once or twice a week, there is a farmers' market; there are city festivals that happen on Federal property.
    And also where we site buildings, we are trying to make sure that we site them where they can also conform better with community plans. For example, in Miami, where we will be building a new courthouse, we are going to have setbacks that are required for security, but we are going to try to make the area around the building an active urban park, which that part of Miami really could use.
    As you know, technically, when we are on a Federal site, we are not subject to city zoning and property requirements. But by policy and by long standing tradition, the Federal Government tries to meet those kinds of requirements.
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    And I will just note, sometimes we get in trouble for it. In Boston, at the new courthouse, we voluntarily agreed to go along with the city's plan on that waterfront, that requires that there be an open walkway and docking facilities alongside the courthouse.
    It costs us a little bit of extra money, but it is sort of the spark for redevelopment in that area. And now there are other projects being proposed around the courthouse.
    So I think that in the long run, this is the kind of thing that rebounds to the benefit of the communities around us. And considering we do not have our properties on the tax roles, anything we can do that helps the areas around our building to pay more money into the local tax roles is probably better for everybody.
    Mr. FRANKS. How many hold-over leases do you currently have, and have they been growing?
    Mr. PECK. I will have to get you the exact number. We believe that the number of hold-over leases is very small in almost every region.
    I have seen a recent number that in the National Capital Region, it is still significant. It could be as high as 60 leases out of an inventory of leases in the National Capital Region that is probably, what, 1,000 leases or more. But in most other regions, it is down.
    Hold-over leases are a bad business for us and for landlords, generally. And I will just tell you this, I will take a look back and give you a more direct answer.
    I am worried that we may have some hold-over leases in some cases, because the real estate markets in a lot of cities are tightening up. It is hard to find the number of blocks of space necessary anymore.
    The bad side of the good news in the economy is that it is hard sometimes to find a big block of space to move people into. But with sufficient planning, we should be able to move.
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    Mr. FRANKS. What is the status of the DEA lease in Northern Virginia?
    Mr. PECK. We have made a commitment. This is a bad example, just because we are doing a pretty good job of anticipating when we need to be out of a space.
    We have made a commitment. The landlord asked us, finally, to be out of that space, so they can sell their building, by September 1st, and we will be out. We are moving DEA into an interim locations so that we can vacate that space.
    Mr. FRANKS. Let us move to the courthouse construction program for a second. What is the effect on the projected rent, due to the delays in the courthouse construction program?
    Mr. PECK. Do you mean the delays of not having funded over the past year or two? You know, I will tell you, we have not done a net analysis of the delays in rent. Because on the one hand, I could tell you more easily that there is about a three percent penalty in terms of escalation of construction costs per year that we delay, on average.
    Although I have to tell you, in all candor, too, we say three percent, but there are markets in which construction costs are going up at a much higher rate than three percent. And unfortunately, they seem to be most of the markets in which we are trying to build courthouses.
    But I do not know, in short, what the answer is on foregone rent. The problem is, it depends on when you assume the courthouse would have been open for business. And in some cases, we are collecting rent at a different location. That is different.
    I can give you a more precise answer when you ask me if a courthouse project that we have started and anticipate opening on a certain date is delayed, you know, what do we lose in terms of rent.
    Some of these new courthouses that we have not built, we have not even set the final rent. So I do not know quite what it is per square foot that we would be collecting.
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    Mr. FRANKS. You told us there is a three percent annual penalty for delay in the construction program. What do you project will be the aggregate penalty for a three year delay in the Federal construction program for courthouses?
    Mr. PECK. I will have to get you an answer to that question. I honestly do not know, and for this reason. Let me establish the assumption, so we can give you the calculation. And it will not take that long to do.
    If we assume that we were going to build at the rate at which the original court's five year plan would have had us building, then I can give you that number. In other words, we did have a plan. It depends on when you start counting the slippage, too.
    If you go back, say, to 1999, and say, had we built in 1999 and in 2000 and in 2001 what we were planning in 1999, what would have happened? We have obviously skipped one year in there. So maybe we can talk to your staff about how you want us to make that assumption.
    Mr. FRANKS. You just opened the door to another question that I think is now appropriate to ask. What will each of these courthouse construction projects cost in terms of added cost, because of the delays in redesign?
    Mr. PECK. Let me see if I can approach it a different way. Let me try to get you a ballpark answer to your question.
    We have said for some years that we had assumed, back when I got this job four and-a-half years ago, that we would be building at a rate of about $500 million per year.
    If you then take a three percent inflation factor on that, you probably get some kind of a fair range, or three to five percent, of the cost due to delay. And that would be, obviously, about $15 to $25 million per year on delay. That is about where we are, I guess.
    Mr. FRANKS. You said something else that triggered something in my mind. You presumed four and-a-half years ago, when you took this job, there would be a $500 million per year building program
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    Mr. PECK. Right, Sylvia Matthews at OMB says, what? She never agreed to that. That was never her understanding. Well, where did you get that?
    Okay, well, here is the thing. When I got here, we were running a construction program that we thought was going to run at about $6 to $8 billion total, for the 160-some projects on the courts' priority lists.
    We had divided that up, and were assuming that to meet that, we would go at about $500 million. And in fact, we have made a commitment to the courts, in GSA at least, that we would request that every year.
    What Sylvia is referring to is also a fair comment, which is that the Administration never said, we guarantee that each and every year we will support that amount of funding for the courthouse program. I am saying we divided up the money and said, if we are going to finish this program in eight to ten years, that is what it would cost each year to do it.
    Mr. FRANKS. Okay, this is helping me to resolve one of the big mysteries of western civilization that I have encountered in the last month.
    You are telling me that you made these calculations, based on conversations with the AOC, understanding the volume of the construction program that they felt they needed and were going to come to you to help manage?
    Mr. PECK. Right.
    Mr. FRANKS. And you made a calculation that, in order to meet that objective, there would need to be a $500 million per year construction program.
    The courts acted on the belief or representation that you expressed to them. But the folks who had to really sign off on whether the money would be contained in the President's budget said, they were totally outside that loop, and never agreed to make that expenditure.
    Mr. PECK. I would not want to say for them that they were outside the loop. And I do not know what conversations there were before I got there. And I probably do not want to invite anyone else up here to say one way or the other off the top of their head.
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    But by the time I came in, we had a five year priority list from the courts, which assumed certain projects in certain years. And it came out to about $500 million a year. And it was clearly something that had been done in concert with GSA and the courts.
    We have continued, by the way, since I do not want to say this is all folks before me, since I have gotten to GSA, we have also tried to run this program in a responsible way, proposing a certain amount of money each year to OMB. And that has been about the number that we thought we could handle, in terms of our own capacity, and it would keep the program going in a steady way.
    Mr. FRANKS. Let me back up a second. This has caused great consternation among members on both sides of the aisle about who had represented what to whom about the status of their courthouse construction project.
    You have been here for four and-a-half years. During how many of those years has there been a courthouse construction program?
    Mr. PECK. Two, before this year.
    Mr. FRANKS. Yet, each year, were you telling the AOC things based on the belief or the arithmetic that there would be or needed to be a $500 million per annum construction program?
    Mr. PECK. Well, having once worked in OMB, and having worked up on the Hill, I think I always said, if we can get it through OMB and get it through Appropriations, this is what we ought to be running at.
    And we have proposed a program that would keep up with the courts. We proposed a program that was in accord with the program that we and the courts had agreed on, as an orderly way to accomplish the program.
    I would just note that the program we agreed on with the courts was a priority order listing. Congress, in fact, asked the courts to do this. And I think they did a very good job of doing it, of saying, give us your priorities and tell us where you need to go.
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    We sort of divided up the program into logical chucks. And we had said, early on, that if we spent about $500 million a year, we could keep this program going. And the short answer is, I am batting two for four.
    Mr. FRANKS. I am going to yield to my colleague, Ms. Norton. But I want to make one observation. This is an irrational process. You are having discussions with the AOC, based on what maybe should have been, candidly, the nature of the courthouse construction program each year.
    But the people who control OMB and the President's budget and, therefore, ultimately, what is likely to come through the pipeline, claim they are uninvolved. They were never party to agreeing that there should be any annual commitment; certainly, nothing in the range of $500 million a year. This was told to me 10 days ago.
    Mr. PECK. Right.
    Mr. FRANKS. And I think somebody needs to fix this. Because there are judges upset; there are members upset. There is justice being frustrated, in some jurisdictions.
    And candidly, maybe we have to do some work. But this, I would argue, lies more with the Executive Branch than it does with this branch. This whole circumstance, to me, is not entirely acceptable.
    Mr. PECK. Well, I do not want to argue about which branch is responsible for dropping the ball. And the Judicial Branch has its own view of what we are both doing wrong.
    But in this case, I would say this. I mean, it is just a part of the budget process that since this funding comes out of domestic discretionary funding, it is always up in the air.
    I have got to say, OMB has not gone back on any promises to me. All they have said is, submit your request. There are loads of priorities for domestic spending, both within the Executive Branch and on the Hill. And we will see where it comes out.
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    So, you know, we are part of a fairly orderly budget setting process. In some years, they have said, we find money available in the discretionary accounts, and in some years we do not.
    But I have to say, in two of those years, the Congress also followed the OMB lead, the appropriators at least. And in the Appropriations bills, the funding was not restored.
    Mr. FRANKS. I have taken more than enough time. I would merely say, there was not a discrepancy on the margins here. There was a threshold issue. Are we going to have an annual construction program or not? There is a big difference between $500 million and zero.
    Ms. Norton?
    Ms. NORTON. Thank you, Mr. Chairman.
    The fact is, this Administration does not want to fund courthouses. It does not want to fund government buildings. And I suppose that has been the case for a number of administrations. And I will tell you one thing, nobody is going to build federal office space if the Federal Government does not build it.
    And when it comes down to courthouses, the rubber does meet the road. Because at some point, courthouses really do have to be built. You might get away with putting federal workers in slums and in, you know, trailers or whatever.
    But at some point, you just have to do, I think, what the Chairman is indicating. Understand that you are not going to take, and I would be the first not to want to take disproportionally from the domestic expenditures. Children are more important to me. A lot of things are more important to me.
    But without some regular systematic way, you get more and more members up in arms, and everybody thinking it is a roulette game. And it even has the appearance of, you know, what do I have to do; or is there something special I have to do?
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    And the way to put an end to that kind of thing is to say, you know what we are going to do is, say a certain amount of the Federal budget will be spent every year on courthouses, on Federal construction, or we will use the following formula.
    That way, everybody is put on notice. We are all under-rationed. But you do not have everybody mad. And you have got everybody mad on both sides of the aisle, when this kind of thing happens.
    I sat through, just a few days ago, the testimony of a number of the Chief Justices. Let me ask you about the particularly intriguing testimony of Judge Harry Edwards, who claimed that OMB was forcing greater expense by virtue of the approach it was using with respect to the courthouse in the District. And it comes out of the sharing formula, in implementing the sharing formula, apparently in the middle of the game.
    The E. Barrett/Prettyman Courthouse is one that after the kind of long rigmarole that everybody goes through, it was finally funded. And I think that was, in part, because this is where so many of the security cases are. This is the nation's capital. It finally got through.
    The annex, and it is an annex, they do not want a new courthouse; they want to build on land right next door. On the Prettyman courthouse, Judge Edwards testified that the proposal to implement the new sharing formula for courtrooms would cost $5 million more.
    And he asserts that the reason has to do with the need to redesign, now that the sharing formula has been imposed after-the-fact and after all the work is done.
    Now I can understand why you would want to do the sharing. But if you look at this proposal, and here is the rationality that I think the Chairman talks about, and you say, well, we sure should have done the sharing. And if we would have had this in time, we would have done the sharing.
    But I will be darned, if this is going to cost me $5 million more, this one is going to go, because it is not worth $5 million to make sure they have the same sharing formula that everybody else has.
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    What is your response? That is a very brilliant judge, I must say; a law professor who has done his homework. Do you take issue with his figures?
    Mr. PECK. I do not know that I totally agree with his numbers. But I have to tell you, personally, and here I have to say I am clearly not speaking for the Administration budget, I happen to agree with his position.
    I think on this one, because the design was almost complete, clearly, there would have to be some redesign. It is within about a month of being done.
    You know, you can make different assumptions about how much redesign has to be done and how much that will delay construction. And however much you delay construction, you are obviously adding to the costs.
    I have to say that to run a program the way we try to run it, which is efficiently, this is one I certainly would have said, this horse is out of the stall. Let us get this one on the track and keep it moving, and not send it back.
    I have to say that what I think the Administration, and what we did in the budget, was to take an across-the-board formula to the program. And we probably should have been a little more judicious, to coin a phrase, about which ones we apply this to and which we did not.
    Ms. NORTON. Mr. Chairman, I do not know what the procedure would be, but if we could pick up $5 million by saying do not redesign, but go with what you already have; do not put this thing back in the hopper, I really think we ought to find a way to do it. I see no reason, whatever their reasons are.
    And GSA has not come forward with some figures to demonstrate that. And not only was there a very complete rendition of figures by the Chief Judge, but any fool knows that when you say to somebody, when a project is virtually complete, go back and redesign it, that you are adding to the costs.
    And here, what bothers me is that we are talking about design costs; not just delay costs. Then I would say, if the committee is empowered to pick up that $5 million, one way or the other, it is our obligation to do so, and to let it go ahead as it is.
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    Mr. FRANKS. Ms. Norton, thank you.
    Somebody got the logo confused. I think they are delivering less for more.
    [Laughter.]
    Ms. NORTON. Yes, and you know, we make a lot of mistakes, because we have a lot of folks here. But when we get this kind of mistake put right in our face, and the Chief Judge thinks he has got to come down himself to call it to our attention, I believe that we ought to take action to see that this does not occur.
    It has come to our attention now. Now it is on our watch. And it is our mistake, not just OMB's preference.
    Has the OMB consulted with the GSA in developing this new court sharing proposal? Was there direct consultation, partnership, working with the expert agency on developing the notion of courtroom sharing?
    And I do not come to you as somebody who is against courtroom sharing, on its face. I just want to know how the process worked.
    Mr. PECK. It depends on what the meaning of ''consult'' is. And I would put it this way. We were told rather late in the budget process.
    We had a discussion with OMB about what it would look like if a certain formula were used. And we provided information about what that would do to the numbers. If that constitutes a conversation, it is not quite what I would term consultation.
    Ms. NORTON. That is why we have got to have something to respond to the judges on. Because, you know, when you say, ''share'' we are all for sharing here, if it would save money.
    You know, it would help us a great deal, if they gave you some numbers, gave you a formula, and said, respond to this only, that obviously is not consultation, unless you have a back and forth process. Are you saying that there was not a back and forth process?
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    Mr. PECK. It was not a back and forth process.
    Ms. NORTON. Okay, I will ask this. And I understand it is on page 9 of your statement, that by the end of fiscal year 2000, 367 courtrooms would be available for use by the judiciary.
    I would appreciate it if you would supply for the record the number of judges assigned to these courtrooms. Maybe we just need to look at it ourselves, and let staff take a look at it, and see if we can make some reasoning.
    We have got to say something to judges who say, do not share, since frankly my instinct is to say, ''why not?'' And I do not have an answer.
    We have another huge federal building in Washington, just huge. It is the Waterside Mall in Southwest. That has been a troubled building, and now it is almost entirely vacated, or is certainly largely vacated. I am pleased to see that there are some other tenants from outside the Federal Government that have come into that building.
    I would be interested to know what discussions, if any, that you have had with the lessor on a plan to make renovations to the building, or attract new agencies; especially since you are always telling us that you need Federal office space. And here is one that is almost standing empty.
    Mr. PECK. I will provide that to you. As you have noted, that is a building that the Government has leased. We have leased it for about 30 years.
    I think there have been some conversations, but I will provide them. The building needs work. It is old and needs renovation to meet modern standards. And I think we have had some conversations with potential tenants, but I would have to provide more of the details of the conversation.
    Ms. NORTON. You are going to have a hard time convincing this subcommittee about the need for space with that large space standing, without a plan.
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    The great problem we have, and I do not need to tell you, Mr. Peck, is that there is not enough space in the District, lessor owned. So to allow that building to go empty, and by the way, if it becomes empty, it becomes a real hulk in the neighborhood. It is a Southwest middle income neighborhood. That is not exactly fair either for the Federal Government to do.
    But quite apart from the surrounding neighborhood, we need space. We hear it from you all the time, and you are absolutely right. We need a plan as to what you intend to do with the Waterside Mall.
    The District, whose problem this is not, did something, it seems to me, very responsible. They asked, what is it called?
    Mr. PECK. The Urban Land Institution.
    Ms. NORTON. Yes, they asked the Urban Land Institute to come in and work with everybody concerned and say, what would you do, if you could do something with this area?
    And this Urban Land Institute and the Federal Government put up a little bit of money, but it was paid for by the District and private parties. And they came forward with some ideas for what to do, since this is the domineering presence in the area.
    Now nothing has happened since I have chastised the District. I said, okay, you were part of this. Where are your planners? You need to work with the Federal Government.
    So I would ask you to submit, by the time we come back from recess, what plan or contacts, if any, you have had, and any progress you have had toward a plan to make use of this space for Federal office space.
    Mr. PECK. Okay, I would be happy to do that.
    Ms. NORTON. Even if we had to do something to the building, it would be something besides going out, far flung, saying where can we find some Federal office space.
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    Mr. Chairman, I have just a few more questions.
    I am interested that you say that your cost, per square foot, is 13 percent below the private industry average. Do you mean throughout the country? And this is wonderful.
    Mr. PECK. Throughout the country.
    Ms. NORTON. If so, how are you able to do that? Tell us your secret.
    Mr. PECK. There are a couple of good stories here. We participate with the Building Owners and Managers Association in a survey of space costs. So our numbers are measured the same way theirs are.
    There are a couple of things to tell you. One is, that is made up of three things. And here is where we get in trouble with the press for being boring. But anyway, it is made up of cleaning costs, maintenance costs, and utilities costs.
    Ms. NORTON. Is that what the private sector's costs are made up of, too?
    Mr. PECK. Yes, ma'am.
    Ms. NORTON. All right, we are comparing apples and apples here.
    Mr. PECK. Our energy costs, because we consume less energy per square foot than do private sector buildings, in part, because the Federal Government started investing, some time ago, in energy conserving equipment, are about 27 percent less per square foot, nationally, than the private sector's.
    When we started measuring our business, about two to two and-a-half years ago, and starting to give bonuses, based on how people do, our cleaning costs, in part because we are required to use union labor and we use handicapped workers, were higher than the private sector's, and our cleaning costs, and my graphs at the end of my presentation show, that our cleaning costs have now gone below the private sector's, and so have our maintenance costs.
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    And quite honestly, it is because we are a very large purchaser of services. And there are economies of scale, which we just were not taking enough advantage of, and we are now. And I think that is the short answer to the question.
    Ms. NORTON. Well, you deserve a lot of credit for that, particularly if it is energy conservation and despite union labor, using the critical mass advantage of the Government to drive down costs. We criticize you a lot, and I want to be on the commending end of this one.
    Could I ask about the ATF Headquarters? Finally, after a lot of effort by the Federal Government, because when a central example of a target agency, and I want to say, internal and external, with great concerns for the building it is now located in, right there in the middle of downtown, and they would take the rest of us with them, you finally have found space with the needed set-back and all for the ATF.
    I would like to know where we are now on that building with appropriation, with timeframe, the whole nine yards, please.
    Mr. PECK. What we actually found, working with the District of Columbia, was a site at New York Avenue and Florida Avenue, which was a District-owned site. The Treasury Department got funding last year in its appropriation for the site and design.
    And we are proceeding towards selecting an architect. And I will have to provide you with a schedule. But I believe we will be under construction within a year and-a-half, if we adhere to the schedule.
    Ms. NORTON. You do not see any funding problems that could erode this?
    Mr. PECK. Well, we need funding in this appropriation cycle for construction, and we are requesting that, for $83 million.
    Ms. NORTON. Well, I do not think the government would fail to understand what finally getting the ATF site going means, generally, to that agency, and to its mission and its vulnerability.
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    Mr. FRANKS. Ms. Norton, could I come back to you, and let Mr. Quinn have a shot here?
    I would like to welcome Mr. Quinn, a member of the full committee, to our subcommittee today. I understand you have a passing interest in the jurisdiction of this subcommittee, today.
    Mr. QUINN. I do. Thank you Mr. Chairman. I appreciate the opportunity to allow me to burst in on your subcommittee here. I am on three other subcommittees and have a waiver. So Mr. Shuster will not allow a fourth.
    [Laughter.]
    Mr. QUINN. If he did, however, at least I would ask for a temporary assignment, until we get the Buffalo situation squared around.
    Mr. Chairman, I also want to associate myself with some of the remarks of Ms. Norton. Without embarrassing her, I believe she is one of our most thoughtful, hardest working members here on the Hill. And I appreciate your work for all of us, and not just the District.
    Mr. Peck, I want to just spend a few minutes, if I can, speaking to you about the Buffalo courthouse situation. Recently, on March 23rd, Mr. LaFalce, a Democrat, and myself, a Republican, joined with a Federal judge from Buffalo, Judge Skretny, to testify before Mr. Frank's subcommittee, to try to get some answers on the situation on why the Buffalo project sort of dropped out, or got left out, or was leaped over here. And our discussion that day is on the record for you to view, if you need it or have it.
    But I came over at Bob's invitation today to see if we could not continue that discussion. Can you offer any insight, today?
    Mr. PECK. I can tell you why it dropped out of the request. And I think we have already provided this to the staff.
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    It is no secret that when GSA made its recommendation on the fiscal 2001 program, we recommended the program that, again, was in the court's long-term plan that did include money for site and design for the Buffalo courthouse annex.
    And OMB, again, to be fair to them, they set a limit with discretionary spending, or at least this year, they provided us funding for courthouses.
    Unfortunately, just the way the limit is set, if you go down the list, what they did was a fairly logical process. And they funded the top priority projects that were ready for site and design, and particularly construction. Because once you have design done, you are ready to go to construction, and you really start losing money and momentum, if you do not go to construction.
    So when we did that and funded the construction projects that were ready to go, and we took out a couple, like Eugene, Oregon; Springfield; Massachusetts; and Salt Lake City; that for various reasons had been in the works for awhile, but we have either had trouble finding a site, or have been urged by the community to change a site. Buffalo was the very first project on site and design that dropped below the line on available funding. And that is the very short answer.
    There is one other project which I should note, because I know I will get a question about it. We did provide some additional funding for design in Little Rock, Arkansas.
    Mr. QUINN. What a shock.
    Mr. PECK. Well, as I have said on the Senate side, to be perfectly honest, I am not privy to all the conversations in the White House. But the President's major focus on construction in Little Rock right now is the Presidential library. So I do not think his interest had anything to do with this.
    But in Little Rock, we had already spent money on design of a project. The scope of the project has changed, and we needed more to finish it, to get it ready. Buffalo, unfortunately, dropped below the line.
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    I will just note to you, since I spent many years working for Senator Moynihan, and I spent a lot of time in Buffalo, New York, it was disappointing to me, too.
    Mr. QUINN. Thank you, and on behalf of the judges who worked so hard back in Buffalo to pare back an expensive project, and again, our testimony will note the dozens and dozens of thousands of dollars, to get it to down to a better cost.
    They thought that $3.6 million out of $488 million was a very small amount of money to get the project going for design and site, and to talk about and battle it out when it is scheduled for actual construction, because we knew we were behind.
    But, again, speaking for those folks in Buffalo, and Rochester, actually, because we are going to serve an area over toward Rochester, New York, they are having a hard time understanding why Buffalo was skipped, and then another project after it was funded, to the tune of lots of millions of dollars.
    And we can not help but think about the Little Rock situation, in spite of your explanation with the Presidential library, and so on and so forth. So whether we subscribe to your explanation or not, remains to be seen.
    Let me ask another question, if I may, Mr. Chairman. So how do we get it back in?
    Mr. PECK. Let us put it this way. If in the House budget resolution, there is room for this committee to authorize additional courthouse projects, or if the committee, in its discretion, chooses to fund Buffalo, in lieu of another, obviously, the project can be back in.
    Mr. QUINN. So in $488 million, there is not room for $3.6 million?
    Mr. PECK. Well, let me put it this way, the Administration is not prepared to submit a budget amendment. So our take on the fiscal 2001 budget is set. But, obviously, the Congress can make changes.
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    Mr. QUINN. Okay, we will get back to you.
    Thank you, Mr. Chairman.
    Mr. FRANKS. Thank you, Mr. Quinn.
    Ms. Norton?
    Ms. NORTON. Thank you, Mr. Chairman. I have only a couple of other questions.
    I would be interested in knowing how many contract employees you have helping to manage your portfolio at this time.
    Mr. PECK. I will have to provide that to you.
    Ms. NORTON. I wish you would provide it for the record, within the next 10 days.
    Mr. PECK. Okay.
    Ms. NORTON. But I would also be interested in the employee/supervisor ratio.
    Mr. PECK. Okay.
    Ms. NORTON. On page nine of your testimony, Mr. Peck, you say that GSA plans to back-bill more than 1.1 million square feet of space, and that that would involve moving clients from leased space to government-owned space. I am interested in the government-owned space.
    But I wonder if you could give us examples of what you have in mind. For example, I would be interested in what kind of space you are speaking about, what the affected agencies are, and what kind of savings you anticipate.
    Mr. PECK. I can provide the savings to you, for the record. I will just give you one example, because I saw it last year on a trip.
    In Ft. Worth, we have had a vacant space on one floor of the Federal building there. I do not know for how long it was vacant, but for some time. And we actually got a part of the FBI, which had been in leased space, to move back into the Federal building.
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    And because you pay for the security and the air conditioning and heating on space, you can not zone out every vacant square foot in a building. We are spending money to maintain that space. It is better to have somebody in it, occupying it, and you can also give up some leased space.
    Ms. NORTON. But is most of the space like that unused federal space?
    Mr. PECK. It is unused Federal space. That is what we are talking about.
    And one of our highest priorities, when regions come to us and say they want money for an apparent alteration, we say, is this going to result in increased usage in Federal space that is otherwise going vacant?
    Ms. NORTON. I can not say enough, and I can not encourage you enough, to move toward that kind of efficient use of space. There should not be a square foot of Federal space, owned Federal space, that is not used, given our needs.
    I recognize that that sometimes takes some real strategic planning. But that is something that you are in the business of doing, anyway.
    And if you are going through your inventory, and seeing who is out there, who could move into a floor or a room or a part of a Federal courthouse or other Federal space, that is precisely, it seems to me, what efficiency on the part of the agency is all about.
    Mr. PECK. I am reminded, too, that when we build a new courthouse, I mean, often we are moving courts out of space in an existing building into a new courthouse. We usually get to back-fill that space, too.
    In fact, we have been moving a lot of bankruptcy courts out of leased space into Federal office space, which usually saves both them and us money.
    Ms. NORTON. Thank you very much, Mr. Chairman.
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    Mr. FRANKS. Thank you, Ms. Norton.
    Mr. Peck, how many child care centers have been upgraded with shatter-resistent glass, and when will GSA complete the retrofitting of all child care centers in Federal buildings?
    Mr. PECK. We have 113 child care centers. By June 30th, because some are in the process now, 74 will have upgraded glass of one form or another, film or something else, installed in them. And we anticipate that the remainder will be completed in the Fall of this year.
    There are about six centers that do not have windows at all, that we need to deal with. So it will be done this Fall.
    We started that program, and in fiscal 1998, we took existing funds, and we internally took some money and started spending money on the child care center glass upgrades.
    Mr. FRANKS. I am curious, was that done in some priority sequence?
    Mr. PECK. It was. In part, we have a sense of which ones are more vulnerable, because of existing locations. And so it has been that sort of priority.
    Mr. FRANKS. Let me just add, I think that is the appropriate priority. I am glad to hear that.
    Mr. PECK. It is. The only other thing is that one of the things that is not so easy about this, is that just putting glass film on some glass windows is not enough, because it sounds like you sound be able to do this awfully quickly.
    One of the problems is, obviously, glass fragments are a terrible danger if there is an explosion. But you also have to sometimes strengthen the window frames around it, or else the whole piece will come out and become a flying object, which itself is dangerous. So it is that kind of a program.
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    One other thing I would just say to put the whole glass fragmentation thing in perspective is that we have, since the Oklahoma City bombing, spent more than $200 million on various upgrades, equipment, glass, structural upgrades to our buildings.
    So glass is not the only thing that we have done to upgrade the program. And we have doubled the size of our guard force, our uniformed force. So glass is important, along with other things.
    There are other security issues we have had in the child care program, which we have also addressed, such as security checks on the personnel and maintenance workers in those spaces.
    Mr. FRANKS. Let me ask, the IG recently issued a report on the contract guard program. What were the findings of that report, and what is GSA doing to address the shortcomings that were identified in that report?
    Mr. PECK. We have a good relationship with our IG. This is one time when we were ahead of them. We had some of the same concerns that they found specific instances of.
    For example, there were cases where the contract guards had not completed the training that they were supposed to complete. We had been relying on certifications from the contractors that they were carrying out the program that we expected.
    In going back and looking through some of the records, the IG found that it is quite likely that the guards had not met that training.
    We had heard the same thing from our Federal Protective Service organization, which has also been scrutinizing the guard program. They found, in some cases, that the guards either have not had post-orders, telling them what to do, or have not been following the post-orders.
    Let me just take those two things and tell you what we are doing. One is, we made a decision late last year, or early this year, that the Federal Protective Service will directly be monitoring the exams we give at the end of training.
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    In fact, we are going to set up training for the contractors that we hire from now on, and make them go through it. There are some computer-based courses, which all the guards will have to take. Our folks will be monitoring weapons training certification and the final testing on the program.
    With respect to post-orders, one reason that we have moved in FPS to a cross-training system for our uniformed officers and given them different instructions is that we want all the people in FPS, who go around our buildings, to know that part of their responsibility is supervising the contract guards, and making sure they have orders on what to do, and that they are following those orders.
    So I think we have a pretty good handle on upgrading the contract guard program, and meeting the recommendations of the IG report.
    Mr. FRANKS. I am going to ask one additional favor, if you will, relative to this contract guard issue.
    We had a witness in our last hearing, from the private sector, talk about why some of the major firms that provide contract security guards for Fortune 50 companies never choose to bid on Federal work.
    Would you review that testimony for me and give me a response to the points raised by that private contract agency?
    Mr. PECK. I can give you a short answer.
    Mr. FRANKS. Sure.
    Mr. PECK. I have looked at it, and we will provide something for the record.
    One of the things that happens here is that there are a lot of small businesses that are in the contract guard business. And because of that, it is a program in which we all try to give as much of our contracting business as we can to small business concerns, to encourage them.
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    The contract guard business is a classic example of one where you can generally find competent folks to do this. Like I said, I think we need to do a better job monitoring them.
    The trade-off that we always have in our procurement programs is that given the size of a business that we are, if you really wanted to find the most efficient way to save money and manage your program, and I have said this for awhile with respect to this particular program, you would find two or three very large contract guard providers, given the business for the whole country. But that would deny a lot of small businesses the opportunity to do it.
    And so what I think I saw in the testimony, if I understood his concerns, was that he runs up against our small business preference program. And that is why it is a little bit cumbersome for someone like him to make it.
    We have, in other areas of our business, however, contracted with some very large companies; for example, in elevator maintenance. But it does always bump up against the small business preference program.
    Mr. FRANKS. If you could get me something in writing, I would really be grateful.
    Mr. PECK. I will.
    Mr. FRANKS. I want to thank you for your testimony. I am going to declare a five minute recess, and then we will hear from the next panel.
    Mr. PECK. Thank you.
    Mr. FRANKS. Thank you.
    [Recess.]
    Mr. FRANKS. Mr. Ungar, welcome.
    Mr. UNGAR. Thank you, sir.
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    Mr. FRANKS. We are delighted to have you here. We look forward to your testimony.
TESTIMONY OF BERNARD L. UNGAR, DIRECTOR, GOVERNMENT BUSINESS OPERATIONS ISSUES, U.S. GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY GERALD STANKOSKY, JAMES COOKSEY, WILLIAM DOWDAL, AND JOSH BARTZEN
    Mr. UNGAR. Mr. Chairman and staff, I am pleased to be here today to assist the committee in this oversight hearing.
    I would like to focus today on our recently completed review of GSA's repair and alteration program, which was done at the request of the subcommittee. In fact, that report was just released today by the subcommittee. It was issued on March 30th, but again, just released today.
    I am accompanied today by our team who worked on this particular effort, Mr. Gerald Stankosky, Mr. James Cooksey, Mr. William Dowdal, and Mr. Josh Bartzen.
    Some of these team members are also part of the team that worked on our two reports that we issued a few years earlier on the courtroom utilization area, which was discussed earlier. So they certainly would be in a position to answer questions on that, although I am not going to focus my summary on that.
    In our review, which we just recently completed, as I mentioned, we noted that this program, the repair and alteration program, is a program that GSA has historically spent, at least in recent years, about $580 million a year on. So it is not an insignificant program.
    We found that GSA has been struggling, over a number of years, to meet repair and alteration requirements at Government-owned buildings that it manages.
    As of October of 1999, when we completed our work, the repairs and alterations were needed at about half or about 900 of the Federally-owned buildings that GSA manages. The total amount of money involved in that backlog of repair and alteration work was about $4 billion.
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    Just over 40 of those buildings accounted for 60 percent of that $4 billion, ranging from $21.5 million for the San Diego Federal building and courthouse, to about $187 million for the Eisenhower building in Washington, which is the old Executive Office building, that houses OMB.
    The needed work at these facilities included such items as replacing electrical systems, plumbing systems, roofing, fire and life safety equipment, and measures for removal of asbestos, enhanced security equipment, and efforts to improve the protection of the building from earthquakes in a number of locations.
    A number of factors have hindered GSA in its ability to keep up with repair and alteration requirements of the buildings it owns. First and foremost, Mr. Peck mentioned money. Obviously, GSA has not had enough money, over the years, to meet the needs that have been identified.
    Primarily, as he mentioned, the funding for repair and alteration comes out of the Federal Buildings Fund. And, in effect, since it has been in operation since the mid-1970s, it just has not been able to produce enough money to operate the buildings, do the repairs and alterations, and provide for new construction of various Federally-owned facilities.
    Secondly, the data that GSA has had to manage the program by has not been accurate or complete. It has not been sufficient to provide such information to GSA managers, as the length of time that various items have been in its inventory; in terms of the repair and alteration inventory, how critical each item is in terms of the functionality of the building; or what is going to happen if something does not get fixed—what are the adverse consequences—and what are the costs, in terms of dollars, and in terms of impact of the agencies' abilities to do their mission or on the health and safety of the employees or the public who may be visiting the buildings.
    And thirdly GSA has largely addressed the issue on a project-by-project basis, as opposed to what we would call a more strategic basis; that is, having a comprehensive long-range plan, let us say, for five years or so, that would identify the total needs of the R&A program, what the priorities are, and what strategy there might be for funding these particular buildings, particularly the worst buildings, the buildings that are in the worst shape.
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    Unfortunately, the conditions that we found in our most recent review are pretty similar to the conditions that we reported back in 1991, after our last review of this particular program. In fact, we could probably just change the date. The numbers are the same and the issues are the same.
    GSA has initiated some efforts to solve some of these problems. It is working on improving its planning. It prepares a business plan for each asset. And it is improving those. It is standardizing those.
    It is in the process of developing a long-range, five year repair and alteration plan, which is to lay out the priorities and the funding that is needed.
    It is taking steps currently to improve the accuracy of the data for the program. And it is exploring ways and alternatives to provide additional funding, and some of them seem quite innovative.
    GSA estimates that its actions, and particularly the finishing up with the asset plan for each building and completing the five year plan, would be done within the next two years. However, it does not have a specific action plan to complete this particular series of activities.
    In our March 2000 report, we recommended that GSA develop such a plan. Given the slow start, if you will, in completing these actions, GSA said it would agree to do that. And certainly, we are pleased with that.
    With that, I would like to conclude my summary. I would be available for questions. I might have to call up our team here to help bail me out on some of the tougher ones.
    Mr. FRANKS. Thank you, Mr. Ungar, for your testimony.
    Let me first ask, are there any buildings in the GSA inventory that pose an immediate danger to the occupants?
    Mr. UNGAR. I do not think we would be in a position to say that, Mr. Chairman. In this particular review, we did not go out and physically inspect a large number of buildings.
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    We did our work, this time, based on the records that GSA has, plus our discussions with GSA headquarters people and folks in each of its regional offices.
    Mr. FRANKS. You talk about regional offices. As I understand it, you discovered that there is an inconsistency in the quality of the information coming from various regions of the country. What is GSA doing to resolve that issue?
    Mr. UNGAR. Mr. Chairman, there are a couple of things. One of the most important actions it has underway is to standardize the asset plan, the business plan for each asset. Historically, the regions had a lot of latitude in what type of information to put in those plans, and they varied quite a bit from region to region, and maybe even within regions.
    So now, hopefully, with a more standardized format and the standard data that is going to be required, you will be able to compare the information within the region and across regions, for the whole country.
    Mr. FRANKS. Given the recent experiences of GSA's lack of resources to repair the Pentagon, do you expect that there will be attempts to transfer other costly building repair programs back to the agencies, themselves?
    Mr. UNGAR. I do not know how extensive that effort will be, Mr. Chairman. I know that the Agriculture building is one which, along with the Pentagon building, we reported on in 1991. At that time, that both had serious problems.
    I think there have been some actions to transfer at least the funding, going directly to Agriculture, for that particular project.
    We understand that Agriculture is somewhat behind schedule in addressing the needs there. And perhaps GSA might be able to add more to that. But I would not be surprised if more and more agencies did come in for a similar type of arrangement.
    Mr. FRANKS. I am going to be brief here, because we have got to go to the Floor for a vote. But I want to ask one question about courthouse utilization, Mr. Ungar, if you can help us out with this.
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    We recently met with OMB officials, who explained that they used a 1997 GAO study on courthouse utilization, to make a determination on courtroom sharing. Could you comment on that study and its applicability to general policymaking?
    Mr. UNGAR. Yes, sir, we actually issued two reports at that point, in 1997. We looked at the utilization of courtrooms in 11 district courts in various geographic locations.
    And what we had found was that basically those courtrooms had not been used for about half of the available time that we had looked at, for any purpose; and that they had been used for trials about one-third of the time, or less, of the total number of days available for the periods that we looked at, at that point in time. So obviously, I think that suggested that there is an opportunity to address the sharing issue.
    We did not particularly come up with a specific number. In fact, we cited in the report that our information was one piece of information that would be needed in a more complete and thorough analysis. But it certainly suggested that the opportunity is there for the judges, in at least the areas we looked at, to share courtrooms, and perhaps save the Government some money.
    Mr. FRANKS. Mr. Stankosky?
    Mr. STANKOSKY. Yes, I would just like to add to that, because I became familiar with this dialogue, over the last week.
    The one thing our report pointed out that I did not hear in this dialogue was any conversation on senior judges. The trial rates for senior judges are a lot less than active judges. I think it was something like 13 or 15 percent of the time, that they use their courtrooms for trial.
    In our report, we made a recommendation to the Judiciary to come up with the data or a study, so that they could support conclusions, one way or the other on courtroom usage, because right now, they are not in a position to defend it, either way. And our recommendation still has not been implemented.
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    Mr. FRANKS. Since no one has done a comprehensive system-wide utilization analysis, are you folks prepared to do that?
    Mr. UNGAR. Well, sir we could certainly consider that. It would be a question of what your timing is and our resource availability.
    Mr. FRANKS. How about next week?
    [Laughter.]
    Mr. UNGAR. That would be a fairly huge study.
    Mr. STANKOSKY. Let me comment on that. You see the judges bring up a lot of factors that can affect courtroom sharing, and they probably have others. There are a lot of intangibles that can affect courtroom usage.
    And that is why we put the recommendation back on the Federal Judicial Center and the Judiciary to take a look at what they think is important to courtroom utilization, and factor that in, in any study they do.
    Our study that produced data that certainly indicates that there may be room for courtroom sharing. But, there are too many other intangibles that can affect courtroom sharing. And they are in the best position, we think, to factor in those intangibles, because I do not know if you will convince the Judiciary, that courtroom sharing may be possible unless it has a hand in this study.
    Mr. FRANKS. There is one point that the Judiciary makes. And I am not in the business of bailing out the Judiciary. But one point that they make, which I think is important for us all to consider, is that we should not misinterpret or over-interpret what a vacant courtroom means. Because it is only with vacant courtrooms that they can compel litigants into a settlement.
    If the lawyers for those litigants know that there is no courtroom to go to jury trial, it does not have the pressure on the parties that the vacant courtroom does. So they do not want me, at least, to misinterpret that.
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    It looks astounding on its face, admittedly. But they claim, as with everything else, that there is a different side to that same story, that we can not lose site of.
    Mr. STANKOSKY. And they should factor that in, in any study they do, to conclude this issue.
    Mr. FRANKS. Thank you very much for your testimony, Mr. Ungar. We appreciate it. We may be getting back to you with some more questions in writing. We appreciate your testimony today.
    With that, we are adjourned.
    [Whereupon, at 4:30 p.m., the subcommittee was adjourned.]

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