Hearing of the Economic Development, Public Buildings, and Emergency Management Subcommittee of the House Transportation and Infrastructure Committee - GSA Stimulus Funds -- Up, Out, and Creating Jobs

HEARING OF THE ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT SUBCOMMITTEE OF THE HOUSE TRANSPORTATION AND INFRASTRUCTURE COMMITTEE

SUBJECT: GSA STIMULUS FUNDS -- UP, OUT, AND CREATING JOBS

CHAIRED BY: DELEGATE ELEANOR HOLMES NORTON (D-DC)

WITNESSES: WILLIAM GUERIN, PROJECT MANAGEMENT OFFICE EXECUTIVE, GENERAL SERVICES ADMINISTRATION; BRIAN MILLER, INSPECTOR GENERAL, GENERAL SERVICES ADMINISTRATION; SHAPOUR ABADI, ST. ELIZABETH'S PROJECT EXECUTIVE, GENERAL SERVICES ADMINISTRATION; MICHAEL GALLAGHER, ASSISTANT DEPUTY COMMISSIONER, BUDGET, FINANCE AND MANAGEMENT, SOCIAL SECURITY ADMINISTRATION

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DEL. NORTON: I apologize to the committee for my tardiness in starting this committee hearing. I was detained off campus where I was speaking and I don't know what's happening in D.C. but you have to detour to get back to the office but I will find out.

The American Recovery and Reinvestment Act, signed into law on February 17, 2009, provided $5.55 billion for the General Services Administration.

I am especially pleased to be chairing the subcommittee on Economic Development, Public Buildings, and Emergency Management at a time when Congress has provided unprecedented funds for repair and rehabilitation to the GSA $4.5 billion to convert federally owned GSA buildings at the high performance green buildings, another 300 million (dollars) for border stations and land ports of entry and an additional 750 million (dollars) for repair, alteration, and construction of other federal buildings and courthouses, of which 450 million (dollars) is allocated to the new department of Homeland Security headquarters project located on the old St. Elizabeth's West Campus in the District of Columbia.

This second tracking hearing on GSA's progress on creation of jobs and repair and rehabilitation of federal buildings follows the full committee hearing last week featuring all the subcommittee's entitled Recovery Act: Ten Week Progress, a Report for Transportation and Infrastructure Program.

The Transportation and Infrastructure committee is requiring that all funds be obligated by September 30, 2010 with a remainder available until September 30, 2011. Note that word available, move it or lose it.

However, GSA stands out among federal agencies because this agency does not distribute its funds to states or localities but itself is fully accountable as a federal agency for the necessary job creation, of work, and timelines on federal buildings.

Moreover, because the GSA funds will be spent on federal structures, taxpayers will get an additional bang for the federal buck with energy savings that are central to all these GSA projects. So important is GSA's dual role as a federal agency for which the administration and the Congress is also accountable that the Whitehouse announced the GSA projects and locations itself.

Thus, this subcommittee has a particularly important oversight role to ensure that the GSA and the federal government lead by example and quickly create jobs.

Consequently, I intend to frequently convene hearings to track progress and obligating funds and creating jobs to help GSA spot issues early. The GSA project list, now online, covers all 50 states, the District of Columbia, and the territories. I urge members of the subcommittee and other members of Congress to personally monitor creation --- job creation in your district and state.

Today I am releasing the 22 projects in my district that include six high performance green building, full and partial building modernizations, and sixteen other high performance green building projects. Because the District of Columbia is the seat of the federal government with most of its prime land off the --- off the local tax rolls to be used for federal office space the District ranks number one in government projects in need of work, with Texas ranked number two.

However, GSA prepared its list of potential projects based entirely on its backlog of repairs needed to maintain its own large inventory throughout the nation.

The committee insisted, our subcommittee insisted, that all projects contain a significant energy saving component and GSA refined its list to incorporate energy efficiencies and new technologies along with contract timelines.

As a result of GSA's projects we expect to move federal government procurement to a lead position for energy efficient buildings allowing taxpayers to receive the rewards of lower energy costs.

The Congressional focus on the repair of existing federal buildings will also preserve the valuable federally owned inventory for occupancy and other vital needs.

Importantly, providing jobs that stimulate the economy is the primary purpose of the stimulus bill. Our subcommittee staff has worked closely with GSA to assure that its recovery act projects can be implemented quickly while providing many jobs at a variety of skill levels.

Because of its proven twin affects on stimulating the economy and putting people to work quickly, infrastructure is at the heart of the recovery act itself. It was, therefore, impossible to avoid the reality that the training deficit and construction jobs among some Americans could produce disputes when federal --- when federally funded jobs go to the already trained, mostly white male workforce.

However, these workers --- these construction workers have faced a long period of unemployment and have one of the highest unemployment rates in the country. Considering the steep rise in unemployment for minorities, women, and alike, however, the last thing the country needs is racial, ethnic, or other group tension.

We have taken some steps to avoid this division among workers and allied minorities and women. Consistent training that has been the consistent --- consistent training has been the major barrier for minorities and women in construction since the federal government ceased funding a large management labor training program in 1980, resulting in too few journeymen, apprentices, and other trained workers for many of the trades.

However, today's unprecedented amount of stimulus funds committed to infrastructure and job creation is a call to action to avoid missing this opportunity by announcing well designed pre- apprenticeship and apprenticeship training that could lead to high paying journeyman jobs.

If we are vigilant, the economic crisis, which has created the worst of times can create new opportunities. We have gotten off to a good start in this recovery act with $3 million for on the job pre- apprentice and apprenticeship training in the GSA's section of the bill and $20 million for training in the highway section.

The training money in the GSA section raises several issues because the amount is so small about where and how much money can be efficiently spent to produce the intended result. Both sections of the bill are woefully insufficient for this training and I intend to introduce a bill for mandatory training in the upcoming highways and transit reauthorization bill.

A good amount of money that --- a good amount of money has been available in the transportation bill for a decade and a --- for a decade with one half of one percent of state highway dollars available for training programs. However, only 17 states have chosen to spend some of their funds for training, leaving minorities and women untrained and abdicating the responsibility of the state and federal governments to prevent discrimination when federal dollars are used.

In the interim, the acting administrator for GSA, Paul Prouty, testified --- I'm sorry, when acting administrator, Paul Prouty, testified at last week's hearing I suggested that GSA consider working with the department of Transportation to devise the most effective way to allocate these funds on a nationwide basis. Both agencies have too little funds for the training necessary but together they may be able to avoid duplication of efforts and perhaps achieve some economies of scale.

At today's hearing we will hear in greater detail from GSA about how it expects to obligate funds to create jobs, to ensure quality construction, and to create it adhered to the necessary timetables.

GSA inspector general, Brian Miller, has already acknowledged that rapid spending of government funds creates considerable risks. We have learned that lesson in the post-Katrina period as well as with spending associated with the Iraqi war.

We will also hear from a GSA customer, the Social Security Administration, that will benefit from the funds.

I want to thank today's witness and very much look forward to their testimony.

May I ask now if the ranking member has any opening remarks?

REP. DIAZ-BALART: Thank you, Madam Chairwoman. Let me first thank you for holding this oversight hearing today on GSA's recovery act funds.

It seems that the Congress is now in the position of having put the cart before the horse by, frankly, passing legislation that contains no oversight and yet demanding after the money is spent or has been out the door to have some oversight, which is why this is such an important hearing.

We recently saw the consequences of, frankly, hastily enacted legislation, significant and expensive legislation without oversight with the ongoing scandals that we continue to read about and see regarding and resulting from the TARP money.

That's why, again, I want to thank the chairwoman for holding this hearing today to allow us some opportunity for oversight for the funds for the GSA projects.

As the chairwoman said, the recovery act included $5.5 billion for the GSA federal building fund. And considering this huge investment we know that potential is there for waste, frankly, and the chairwoman herself just talked about that. Federal real property has been on the GAO's high risk list since 2003 and according to the GAO longstanding problems in the federal real property have multi, multi billion dollar cost implications to the taxpayer, obviously, and to GSA.

So the workload for GSA with regards to federal buildings has tripled now under this legislation creating, obviously, more potential for problems, for mismanagement, for waste, for cost overrun. So the last thing, obviously, that the American taxpayers need or want to see are projects that are started and then all of a sudden they're not finished because they're too costly, there's not enough money, the money is misspent or coming back to Congress for more money because those funds were not sufficient for the projects that were started.

Again, we need to make sure the money is well spent and that's why I want to thank the chairwoman for this hearing.

At a hearing in January the GAO recommended three guiding principles for GSA projects funded under this recovery act.

Number one was to create well defined goals based on indentified areas of interest.

Number two was to incorporate performance and accountability into funding decisions.

And three, infer the best tools and approaches to emphasize return on investment.

Well now here lies a bit of the problem; none of these practical suggestions to help avoid wasteful spending of taxpayers' money was incorporated into the bill, which is, I think, too bad.

Now, however, I am interested in knowing if GSA's recommendations, again, the employment of these principles, if that's the objective of GSA to make sure that we don't have the problems that we could have.

So while the stated purpose of the recovery act was to stimulate jobs the bill also set aside $4.5 billion of the $5.5 billion to convert GSA facilities to high performance green building as identified in Section 401 of the Energy Independence and Security Act.

So, obviously, we all recognize that energy conservation and independence is an important goal, it's a very important goal. However, it's also important to realize that this was a stimulus bill and ensuring tax dollars included in the bill are there to create jobs has to be the primary goal and I think it is but it has to be the primary goal of GSA.

Unfortunately, and we had this conversation last week, we have yet to see the number of jobs that are going to be created by those from the projects and I'm hoping that those will be forthcoming.

In addition, among the requirements of the energy act, reducing energy, water and material resources use, improving indoor environmental quality, including acoustic environments and considering the indoor and outdoor effects of the building. Again, that's part of the act.

So there lies part of the challenge; create jobs or do this other part that is also required. I, for one, think, obviously, that the purpose of this bill was to create jobs and to create them immediately.

I'm pleased again that the chairwoman is holding this oversight hearing. She is very committed to doing this and I want to thank her for that.

I do remain concerned. There is still tremendous potential for mismanagement and for waste and the number of jobs that these projects will create, again, has yet to be demonstrated.

And so again, while many of the projects may be worthy and, frankly, even some of them very necessary we must ensure that such large commitments of taxpayer dollars are properly used and that the money is properly managed and, obviously, that the priority that Congress was hoping for, which is job creation, continues to be priority number one.

So I look forward to all of you. I really thank you all for being here, for spending your time with us today.

And again, I once again end by thanking the chairwoman for having what I think is a very important oversight hearing. Thank you.

DEL. NORTON: Thank you very much, Mr. Diaz-Balart. And it was a pleasure to go to Florida with you last Friday and to learn so much. I think that will prepare the entire country for the coming hurricane season.

And I'm pleased to recognize Ms. Edwards of Maryland.

REP. EDWARDS: Thank you, Madam Chairwoman.

And thank you to the panel this morning.

I'm excited to be here and to hear the progress that's being made in GSA. And I just want to take a moment and recognize along with you --- I know that you have the capacity at GSA to do not just the job creation that we envisioned under the recovery and reinvestment act but also to make sure that we're doing --- that we're building buildings for the future and that we're transforming buildings for the future.

And I note that I see --- where's the GSA team --- a fellow that was deeply involved in moving forward the amazing green building at the Food and Drug Administration, which is in my district. And I would like to see those kind of buildings under --- with federal funds, federal buildings all across the country because in the long run they'll save us a ton of money and I know that in the recovery and reinvestment act, Madam Chairwoman, part of what we recognize is that we want to create jobs in the short term and we want to create opportunities and savings for the taxpayer in the future.

So I look forward to hearing that aspect of what you all have in mind and to working with you over these next several months and years to make sure that we can do what the chairwoman has in mind as well and that is create job opportunities for the thousands and thousands of people out there who could be trained up to engage in productive economic activity in support of the mission of GSA and in support of the taxpayer if we could just get them the skills base to do that.

And so thank you for being here today and Madam Chairwoman thank you very much for holding this important oversight hearing.

And I would say, in conclusion, that while there may not be direct oversight authority as we move forward with looking at the expenditure in the American recovery and reinvestment act, Congress always has broad authority to look at the way the taxpayer dollars are spent and that's exactly what we're doing here today. Thank you.

DEL. NORTON: Thank you very much, Ms. Edwards. May I congratulate you on your performance at Shakespeare last night where you were type cast as an environmental activist.

Mr. Cao have you any opening remarks?

REP CAO: Thank you, Madam Chairwoman.

And I'd like to thank the members of the panel for being here today.

I'm very much interested in the recovery process of these second Congressional district and I know that there are various projects in the district that are presently being used --- the stimulus money being used in connection with several projects down there in the district. And I'm interested in hearing those, those projects, and how taxpayer's money is being used to renovate or to improve some of those projects down there.

And I'd just like to thank Mr. Brian Miller personally for being a member of the department of Justice Hurricane Katrina taskforce because right after Katrina we faced a tremendous crime issue in the district and your help along with others were very appreciated and I hope that you can continue assisting us in that area if possible.

So with that thank you very much, Madam Chairwoman.

DEL. NORTON: Thank you, Mr. Cao. Thank you very much, Mr. Cao, I'm just playing tic-tac-toe with my ranking member here. No, we were listening to you but having an off side conversation.

Meanwhile, we are very pleased to welcome today's witnesses.

William Guerin who is the project management office executive for this project who is accompanied by Daoud Abder-Rahman (ph) who is the development director for the largest of the projects, the project at the headquarters of department of Homeland Security.

Brian Miller, the inspector general for GSA.

And Michael Gallagher, the assistant deputy commissioner of budget, finance, and management at Social Security Administration.

Let's begin in the order I just indicated.

MR. GUERIN: Good afternoon, Madam Chair.

Ranking member Diaz-Balart, Mr. Cao, and Ms. Edwards thank you very much for inviting us to participate in the panel today.

My name is William Guerin and I'm the recovery executive in our newly established recovery program management office in GSA's public building service.

The funds Congress provided us through the American recovery and reinvestment act are a sound investment. First, these funds will stimulate growth in the construction and real estate sectors. Second, it will help us reduce energy consumption and improve the environmental performance of our inventory. And third, it's the investment in the existing infrastructure.

We recognize that this isn't business as usual. To better implement our part of the recovery act we created a program management office. The PMO is nationally managed and regionally executed.

At the national level we are staffed with a combination of in- house experts, high performing employees, and industry hires. The PMO is further supported by contracted consultant resources.

I was recently named as the recovery executive to lead this office. In addition, an executive steering committee, headed by our deputy commissioner, advises the PMO. The steering committee developed a nationwide program strategy and help set priorities. They will approve any changes to the project list and will address national customer concerns.

In terms of project execution we have an aggressive schedule. We are streamlining our business processes and approaches to meet that schedule. For example, we created three zone committees. The zones are geographically based to monitor projects at the regional level. Each zone is lead by a zone executive who assists in tracking and monitoring our projects. They'll be able to shift support resources to projects and regions as needed.

In effect, the PMO serves as an early warning system for projects that are not meeting anticipated targets and we have just appointed our three zone executives last week.

Since enactment of the recovery act we have moved quickly. On March 31 we delivered a list of 254 projects to Congress. These projects fall into three categories; new construction, including one billion dollars invested in 17 projects; full and partial building modernizations, investing $3.2 billion in 43 projects; and limited scope high performance green building projects where we have invested $807 million to repair and enhance building infrastructure systems in more than 194 projects.

To date we've awarded close to $100 million and we currently have a number of solicitations on the street that we expect to reward at least another $100 million in recovery projects by early June.

Of the $5.5 billion we received, our goal is to obligate $1 billion by August 1st and another billion dollars by the end of the calendar year. We have target dates for projects awards in each quarter to ensure we obligate $5 billion by the end of FY2010 and an additional $550 million by the end of 2011.

As described previously in our written statement, we use criterion selecting projects for our spend plan that would put people back to work quickly and transform our federal buildings into high performance green buildings.

For many of the common high performance green building elements we developed standard scopes of work. These standard scopes of work will be shared nationwide and with other agencies engaged in recovery act work.

In addition, we are using regional and national contracts to support our reporting and tracking efforts and program management activities.

Finally, pre-apprenticeship and apprenticeship programs will be an integral part of our recovery act projects. These programs will establish --- will be established at contractual requirement for our building projects. The programs will be modeled after GSA's successful program in the national capital region, through which at least 840 at 15 projects have been trained and employed since the program's inception in 2002.

Joining me today is Daroud Abdur-Rahman ---(sp)—- the development director for the DHS headquarters at St. Elizabeth's.

Madam Chair, ranking member Diaz-Balart, and members of the subcommittee this concludes my prepared statement. I have briefly described our activities as part of the American recovery and reinvestment act. We look forward to working with you and members of the subcommittee as we engage in this important work. We have just appointed our three zone executives, which fills out our whole team in the central office. And I will be pleased to answer any questions that you or other members of the subcommittee may have.

DEL. NORTON: Mr. Abdur-Rahman ---(sp)-- do you have any statement at this time?

MR. ABDUR-RAHMAN: No, Madam Chair, I do not.

DEL. NORTON: Well then are you prepared to answer questions later?

MR. ABDUR-RAHMAN: Yes.

DEL. NORTON: Glad to have you here.

Mr. Miller.

MR. MILLER: Thank you, Madam Chair. Good afternoon Madam Chair, ranking member Diaz-Balart, members of the committee, thank you for inviting me to testify at this important hearing.

These recovery act projects are monumental. Fifty years from now people will be talking about how these recovery act projects have changed --- have transformed the way government delivers services to the American people.

It's important that we get these right. Thank you for having this hearing.

As you know GSA's normal construction budget for building projects is about 1.3 billion (dollars) a year. The recovery act provides GSA with an additional 5.55 billion (dollars) in construction funding and 300 million (dollars) for acquisition of energy efficient vehicles.

The increase in construction funding alone is four times GSA's typical construction budget for a single year. And the recovery act requires GSA to obligate the majority of those funds within a 20 month period.

In addition to funds going directly to GSA, significant additional amounts will flow through GSA from other agencies. These additional amounts include, for example, 620 million (dollars) from DHS, 90 million (dollars) from State, and possibly 500 million (dollars) from Social Security Administration.

The bottom line is that GSA is being asked to spend and manage five times more than it normally does in a significantly shortened timeframe.

The office of inspector general has been meeting regularly with the agency both to monitor recovery act activities and to ensure that we have a clear understanding of the agencies plans. This positive working relationship exists partly due to the efforts of acting administrator, Paul Prouty, and I commend him for his collegiality.

We have also developed strategies to conduct more timely reviews in recognition of the need of the agency to act quickly on recovery act projects.

The mantra from the movie Field of Dreams is, if you build it they will come. Well GSA is building it now. However, some of those who will come are criminals, fraudsters, and cheats. If contracting for hurricane Katrina and the war in Iraq taught us anything it was that quick government spending of large amounts of money creates considerable risks.

To address these risks and meet the timeframes set out in the recovery act we have developed new ways to respond quickly. We have adopted a quick response approach using auditors and investigators to rapidly follow up on recovery act complaints and referrals, including those forwarded to us by the Recovery Accountability and Transparency board.

We have established a core team of auditors and will be using a streamlined approach to performing reviews.

The amount of funds and the short timeframe will create significant challenges for GSA. I'd like to highlight what I see as four of those challenges.

First, I believe the most critical challenge will be the need for additional qualified personnel, especially contracting officers and project managers. Because GSA may not be able to hire sufficient qualified new employees to meet this need, GSA is considering hiring contractors to fill the immediate void and assist with the increased workload. This blended workforce, however, will create a second challenge, namely the additional risks related to security, conflicts of interest, and management of contractors.

The third challenge, based on problems identified in the past, will be managing projects to prevent cost escalations beyond approved funding, resolving claims, and avoided project delays.

A fourth challenge will be managing unbudgeted customer needs. As it struggles to meet these challenges, GSA is like a single-engine freight train that suddenly must carry four times its normal load with the addition of more freight cars. The anticipated addition of even more cars to that train, as agencies start turning over their project funding to GSA, will put even more strain on the GSA engine. If it hits a hill or a bump, the engine may quickly fry and burn out.

Thank you for your attention. I'd be happy to answer any questions.

DEL. NORTON: Thank you, Mr. Miller, for your testimony. Mr. Gallagher.

MR. GALLAGHER: Madame Chair, Ranking Member Diaz-Balart and members of the subcommittee. Good afternoon. I am Michael Gallagher, Assistant Deputy Commissioner for Social Security's Office of Budget, Finance and Management. On behalf of Commissioner Michael Astrue, I thank you for the opportunity to discuss our partnership with the General Services Administration to construct a new data center using 500 million dollars appropriated to us in the Recovery Act. This new center will replace our aging 30-year-old National Computer Center. In addition to being state-of-the-art, the new facility will incorporate green building technology and use new energy efficient equipment and processes.

To ensure the project is completed on time, on budget, and in full compliance with Recovery Act requirements, we and GSA have assigned our best, most experienced, project managers. We look forward to this important collaboration, and I would like to thank GSA for its leadership of this vital project.

Our current data center is the technological heart of the agency, housing critical computer operations and essential data for prompt and accurate benefit payments to tens of millions of Americans. Let me put this work into context.

Last fiscal year, we paid over 650 billion dollars to more than 52 million Americans. We currently process and all-time high of over 75 million business transactions per day, and, to support our disability workload, we store nearly 370 million imaged health records to which we add 2 million more records each week. To manage benefits, annually we exchange over 1 billion data files with federal and state governments and businesses.

Given the nature and volume of these workloads, it is clear that the successful construction of the new data center is essential for us to continue serving the American people. With the Recovery Act funding, we and GSA will ensure that the new data center will be operational as our current facility nears the end of its functional life.

I am pleased to report to you that we and GSA are moving aggressively to build this new facility. GSA has already hired a construction management firm for this project and it has hit the ground running. In addition, we and GSA are formulating specific requirements to construct a state-of-the-art data center that meets industry standards, developing the site selection criteria, and developing a detailed construction plan.

Now GSA is primarily responsible for executing these steps; nevertheless, we will provide input and oversight throughout the process to ensure the facility is designed to meet our requirements. Our key milestones for this project are acquiring the site in the second quarter of Fiscal Year 2010, awarding the design-build contract in the second quarter of Fiscal Year 2011, and completing construction in the first quarter of Fiscal Year 2014.

GSA is working closely with us and industry experts to review procurement options so that we can expedite this project to the extent possible without compromising quality or accepting undue risks or added costs. Our joint efforts meet all the accountability and transparency objectives set forth by the administration and by the Congress when these funds were appropriated.

Again, we thank the Congress for this important appropriation and we extend our appreciation to GSA for working so diligently with us to construct a new data center. Thank you for the opportunity to speak with you today and I look forward to answering your questions.

DEL. NORTON: Thank you very much, Mr. Gallagher. Mr. Miller, you testified page two of your testimony, just of some facts that speak for themselves, when you say that the increase in construction funding alone is four times GSA's typical construction budget in a single year -- the Recovery Act requires GSA to obligate the majority of those funds in a 20-month period. This subcommittee is well acquainted with problems of timing in GSA -- it is one of the banes of our existence.

So, we have two issues here, I'd like to raise with you. One, whether you think, given what you know, and what I must assure you this subcommittee knows, about the pruning of the agency with staff such as with the hired staff. It's sometimes legendary inefficiency. The need to spend these funds quickly to produce quality work without conflicts of interest -- so can you testify here today that you think the agency is capable of meeting these standards?

MR. MILLER: Madame Chair, that's an excellent question. The role of an inspector general is to review what the agency is doing and we are reviewing the agency's planning process and what they plan to do to try to meet these goals and we'll continue to do that. Perhaps Mr. Guerin might want to address this question more directly.

DEL. NORTON: Well, he'll tell me "yes", you see. That's why -- we count on you to tell us the truth. Believe me, we have a great admiration for GSA. If my remarks sound jaundiced, I want you to know the very fact that Mr. Gallagher -- and other agencies, by the way -- have handed over money to GSA to do their work when they could, I guess, have hired a contractor or something -- speaks to the high regard is held in. We also have seen the agency -- pruning of staff is a quite polite word for what has happened to this agency over the last several years. And yet, we're putting -- even if it were fully staffed as it was, let's say, when I came to Congress a century ago, we would have been a lot to put on the agency to say "do this", "do it fast", "do it well", "do it so the OIG salutes you".

I don't expect you to deprecate the agency ahead of time, but I have to ask you, sir, I note in your testimony on page five, that you speak else you have just an answer to my question about a quick response approach using auditors and investigators to quote, "rapidly follow up on recovery act complaints and referrals". Now, the committee subcommittee is far more interested in pre-audits -- understanding the terrible time constraints you're under -- that keep an agency which is known for slow work, maybe in order to make sure they get it right, but to keep the agency from making mistakes while the train is running, as you say four times the rate it usually does. Are you prepared to do pre-audits, or something of that nature, to help GSA weather this extraordinary storm we put upon it and insist that it do?

MR. MILLER: Madame Chair, we are prepared to do that. We're not relying on the old yellow book audit standard. They take too long. Traditional audits take too long. We're adopting a more rapid approach, akin to the critical point evaluations that you may be familiar with, or may not be familiar with. And we hope to review these projects early -- very early -- and establish points at which we will get feedback back to the agency -- that we will provide reviews to the agency quickly so that they can change direction if they're going in the wrong direction or if they have a mistaken assumption, we'll be able to inform them. We're attempting to form --

DEL. NORTON: Do you have the staff to do that, Mr. Miller? I know we funded you, as well. All of those Stimulus Act funds have these extra funds, realizing we're putting the burden on you, as well. Do you have the funds to do not only the "Oh, got you" stuff that IGs, of course do so well, but here's how not to get you?

MR. MILLER: Well, we could use more auditors and investigators. We're reassigning --

DEL. NORTON: How many additional auditors? How big is your office and how many additional auditors and investigators have you been authorized to have?

MR. MILLER: We have about 300 total individuals in the office -- a little more than that and --

DEL. NORTON: Now this is, I'm talking about the people -- I know you do a lot of work with GSA contractors aside from Public Buildings Service. I'm interested in Public Buildings Service auditors and contractors, because that's the way this money, I think, is going. How many in that service now and how many additional have you been authorized to have?

MR. MILLER: We have seven FTEs that are funded by the Recovery Acts.

DEL. NORTON: Seven?

MR. MILLER: Seven. We are reassigning other auditors from other projects. We do, as you've noted, we have statutorily required audits in other areas that we have to perform. Not the least of which is a review of customer service centers, that we are required by statute to do what the Department of Defense IG on the acquisition side, which --

DEL. NORTON: Is this staff all together? That's separate work, as far as I'm concerned -- Department of Defense work.

MR. MILLER: I agree.

I --

DEL. NORTON: You see, I'm looking for how much of your staff, giving the fact that Public Buildings Service is the largest part of GSA, is diverted to PBS work?

MR. MILLER: Under the Act, we were funded seven additional FTE -- seven additional slots.

DEL. NORTON: Are most of those other auditors not doing PBS work?

MR. MILLER: Most of those will go to Public Building Service work.

DEL. NORTON: Okay.

MR. MILLER: There is additional money in the Recovery Act for fleet, the energy efficient vehicles. So, we will be looking at those t0o. The only reason I mention the other --

DEL. NORTON: Does GSA have authority above the fleet vehicles as well?

MR. MILLER: Yes, it does. And the only reason I mention the work with the DoD IG is that we're trying to move our resources, to marshal them, to look at Recovery Act funds, so that we can spot issues early as you said. But, we do have limits and we are stretched thin. So, we do need auditors and investigators.

DEL. NORTON: Now, I'm very concerned about another issue you testified concerning and that is the need for more staff, bringing on more staff quickly -- I'm also on another committee where the entire federal government is legendary for how long it takes people to get on staff and so, some of the best and the brightest say, "Later. I could actually get hired tomorrow at some big, private firms."

Let me disaggregate this. When it comes to what is mentioned on page seven of your testimony -- security, conflicts of interest, manage of contractors. When my staff heard me ask a question about how many retirees -- "Oh, Congresswoman. I thought you wanted new employees, you know, to get more jobs". I do, but I'm desperate and I would assume that retirees, if you could get them, would already meet the security conflict of interest and other such requirements.

What percentage of these new people are going to be retirees and do you expect to be retirees, or maybe I should also ask Mr. Guerin, and what percentage will be contractors? Now, I am assuming that a contractor, working on government work will have to go through certain kinds of conflict of interest and security doors that others would have to go only briefly. So, I need to know how many of each kind of employee we are likely to get working on this matter because it has lots to do with how quickly we get going. I also assume that if your contractors need to be trained -- God help us if we've got a whole new training module to get into. So, I want to get down to personnel real quick since nothing gets done in this world unless you've got the best people who work themselves overtime, and then some, to get it done.

MR. MILLER: Madame Chair, thank you for asking that. We are trying to hire retired annuitants. We have several auditors that have a great deal of experience that have retired from GSA that would be willing to work for us again and we would love to hire them again and also, we're helping to pick up some retired auditors from DCAA. We're currently working with OPM to obtain the authority to hire retired annuitants.

DEL. NORTON: Do you think we will be able to get more retirees than contractors, or not, Mr. Miller?

MR. MILLER: Well, from my office, we're hoping to get more retirees.

DEL. NORTON: How about you, Mr. Guerin?

MR. GUERIN: Congresswoman, we've identified upwards of twenty annuitants that could potentially come back to work for us. Just in reaching out recently, not everybody is interested in coming back, of course, and they're concerned about losing some of their retirement funds as part of that process, but we're actively --

DEL. NORTON: (Crosstalk) -- is that still the law here? Is there any way -- Is it still impossible for an annuitant -- I think we made some changes in that.

MR. GUERIN: I think they reduced the annuity for people who are coming back. That's my understanding, Congresswoman.

(Crosstalk).

MR. MILLER: Madame Chair, we're working with OPM to obtain that authority. Currently, my office does not have that authority and I understand that GSA does not have the authority to hire retired annuitants without them waiting their retirement.

DEL. NORTON: Oh, have mercy. You mean they haven't instantly done that?

MR. MILLER: They have not. We are working with OPM and we're optimistic that they will do it shortly.

DEL. NORTON: You know, moan, moan, moan. Well that's something -- neither office has it. Do you know how many agencies have it? I'm on the Oversight and Reform Committee and here I'm under the illusion that we have already understood how important that is (quite apart from?) the stimulus funds in certain circumstances. And GSA has needed it for a long time. Do you know how many offices have it -- most offices have it?

MR. MILLER: Madame Chair, I've been trying to get this authority very quickly because we have about 10 to 15 retired annuitants that would come to work for us. I talked to other IGs and a few of the other IGs have the authority already, but it's a process --

DEL. NORTON: You know, I'm going to say to the staff directly: We just learned while I sent you out of the room to fetch my good friend who I knew had some questions, that GSA, including the IG, has no authority to hire retired annuitants as some agencies do. By the close of business tomorrow, would staff let me know if GSA has that authority or not. This is just crippling. We've already had to pull Mr. Guerin and everybody else in GSA from everything else they were doing just to get started. I'm going to go to the Ranking Member and I then want to go to Ms. Edwards who I know has been waiting. Forgive me for going on so long.

REP. MARIO DIAZ-BALART (R-FL): Thank you. And by the way, it was not a century, okay? I just want to defend you here.

DEL. NORTON: Thanks very much.

(Laughter).

DEL. NORTON: Just don't tell them how long it has been.

REP. DIAZ-BALART: Right, right, right. Thank you, Madame Chair. Mr. Guerin, one of the things that -- and I mentioned this before in other hearings, but the Recovery Act includes money for federal buildings and U.S. courthouses. In addition, the Recovery Act's authorized GSA to initiate design, construction, repair, alteration, and other projects through existing authorities -- (inaudible).

Now, GSA has an existing authority to strategically acquire property if -- you know, for example, to help save stalled buildings, that may be out there, -- that would create jobs. Obviously, it would help the neighborhood, help the whole area, but it would also create jobs. Buildings that, you know, that were starting to go up and they're now dead, frankly. And there's a bunch of them out there, unfortunately, throughout the entire country.

And, you know, GSA's Purchase Opportunity Program in the 80's -- the heck of a good job in creating opportunities for the taxpayer to save money precisely by doing that. And so I'm hoping that you're looking at that. Are you? And, if not, why not? I mean, here we have opportunity to create jobs and also here we have an opportunity to, on a short and long tem, help the taxpayer in a real substantial way, while creating jobs. It's not something that you have to reinvent the wheel.

It was done by GSA in the 80's. Why --

MR. WILLIAM GUERIN: We do have the authority and we --

REP. DIAZ-BALART: And it worked successfully in the 80's.

MR. GUERIN: Yes. We are continuing to look at using that authority judiciously where we can afford to do that with projects. We are not doing that through the Recovery Act. We looked at those projects -- again, as you said, the New Construction Program as opportunities for us to complete federal buildings and we thought the legislation was written in a way that that was the target of the legislation to take care of our federal building program. And we had quite a backlog of federal buildings — courthouses and land ports of entry.

So, we looked at that. We also included a couple projects that were going to be lease-projects, but are now being converted to federal buildings, including buildings in Bakersfield and a FBI building in San Juan. I believe there's one other one, Congressman. So, we converted several leases to ownership, specifically for that purpose.

REP. DIAZ-BALART: Which saves a lot of money for the taxpayer.

(Crosstalk).

REP. DIAZ-BALART: That should free up some money, though, for you. The bottom line is that you had projects in the pipeline. Now, you're going to be able to do them. Is that not going to free up some money for you?

MR. GUERIN: It doesn't free up money in the Recovery Act, but in future years, obviously, we won't be leasing those buildings, so in future years it will allow us to use our leasing money more effectively.

REP. DIAZ-BALART: Right. So it does free up money in future years?

MR. GUERIN: Yes.

REP. DIAZ-BALART: Fine. And I'll try and be brief, Madame Chair. I know we just were called for votes. Can you elaborate a little bit on your position, what is it, Project Manager Office Executive, what is the --

MR. GUERIN: Program Management Office Executive.

REP. DIAZ-BALART: Yea. Can you elaborate a little bit about your structure and what that is and how that works and what you'll be doing?

MR. GUERIN: Yes. The Program Management Office is set up in a three-tiered program. We have regional executives in each of our eleven regions, focused primarily -- entirely, I should say -- on the Recovery Act projects in each of the regions. So, those people then would reach into the organization, make sure that information is flowing properly, make sure people are in the right positions to do the work that they need to do to support the Recovery Act. They're viewing staffing -- Congressman Norton was talking about staffing earlier. They're making sure that they understand what the staffing requirements are in the regions and making sure that we have the resources we need to -- I think I'm feedback here -- to make sure the Recovery Act goes well.

Then we have a second tier, which are zone executives. I announced in my opening comments that we've just recently selected those three people. The zone executives are specifically the first line of defense to ensure that the projects are being reviewed and tracked properly, to make sure that resources across regions are being shared where necessary, so that if we have opportunities to use our few GSA resources more effectively -- if someone in one region's not being used to their full extent, we can swap those resources across regions. And those, zone executives are designed to do that.

They're looking at variants. They're looking at resources. They're looking at sharing and particularly looking at lessons learned so where we have an opportunity to learn a lesson and share something good to accelerate the program, we can do that quickly and effectively through the zone executives.

Then, in the central office, under my direct purview, is a group of people that are specifically there to provide the tracking and reporting function that Congress requires and OMB certainly requires -- (inaudible) -- program. We have a series of stakeholders that are quite interested in everything that we do and we're making sure that we have the reporting functions set up to both track projects, make sure that they're happening appropriately, jump in where we need to to save projects that are getting themselves in trouble, to revamp the list where necessary if a project starts to go haywire and it will not recover. We need to be able to jump on that right away and ship the funds to a different source, to a different project to make sure that those funds get spent wisely and then, finally, they're there to provide that reporting function as I described.

REP. DIAZ-BALART: Thank you. I have a number of questions, but our time is limited. Ms. Edwards probably has a question, too, so if I may just to Mr. Miller a couple questions. Again, I had a lot more than that, but are you going to be able to also review the number of jobs created by the projects among the things that you're looking at, because obviously this is supposed to be for that purpose?

MR. MILLER: Congressman, most of the GSA projects are building projects. That's the majority of the projects. We will be focusing on those projects and particularly, the challenges that I laid out in my testimony. So, we'll be looking at the effectiveness of the project as well, but certainly we would be happy to include that as one of the items that we look at.

REP. DIAZ-BALART: And, again, I have a number of other questions, but as Madame Chairwoman has reminded me, we do have votes, and we have one more person that wants to ask questions, but thank you. Thank you, Madame Chairwoman.

DEL. NORTON: Again, I apologize because it looks like we have one 15 minute vote and two fives for those who can vote in this set of votes. Ms. Edwards. I will remain for the remaining questions, but Ms. Edwards.

REP. DONNA F. EDWARDS (D-MD): Thank you, Madame Chairwoman and thank you to the Ranking Member as well. I stand here and I listened to the testimony and I have to tell you, the one thing that jumped out at me, Mr. Miller, is that in your testimony, and it's clear from our legislation, we have quadrupled the amount of money that we're giving to go out to renovate and build public buildings. Have we quadrupled the number of investigators and auditors to oversee that money going out?

MR. MILLER: No, we have not. Thank you for asking. We need more auditors and investigators to make sure these projects are on track and to get answers back early.

REP. EDWARDS: And then, I just want to be clear, though. Are you unclear as to your authority to hire those people directly rather than contracting them?

MR. MILLER: OPM has not given us the right to hire retired annuitants -- retirees. And so, we have no authority to hire them without them waiving their retirement.

REP. EDWARDS: And so, there may be, just to follow this along -- we may have to do something that enables that authority so that we can get people who are qualified and experienced and who can hit the ground running to do the kind of oversight and accountability that we need for the taxpayer. Is that correct?

MR. MILLER: That is correct. I'm optimistic that OPM will come through quickly in the near future. We are working with OPM to gain that authority, but we do not have it now.

REP. EDWARDS: And let me just continue on this line, my major concern was hiring of contractors to do what I believe, of all the things that we have to do, we can't have -- government workers can't be building roads and buildings, but government workers should surely be able to oversee how taxpayer dollars are being spent. I think that is the most efficient way for us to oversee these funds and I am greatly concerned that, instead, you may have to rely on -- and no offense intended -- but a bunch of hired hands to come in and do the function of government. And that concerns me tremendously.

We have the lessons of Katrina; we have the lessons of Iraq and Afghanistan and the list is just long, replete with billions of dollars that are spent with contractors who are overseeing every single part of the process and government has no role other than writing the check and the check just gets greater precisely because we haven't overseen the funds. And so, this member anyway, is going to be disturbed tremendously if we can't figure out a way to bring people in who know what they're doing because they've done it before.

And let me just ask this as well: On the question of security, how do we ensure that we're going to get people in who have the right kind of security clearances to be able to oversee and audit and investigate in the way that they need to if we need to rely on a set of contractors and sort of, third party verification of security compliance, when we could get that and get it a lot faster if we were able to hire those who had already served in government?

MR. MILLER: I couldn't agree more. Hiring contractors compounds the risk.

REP. EDWARDS: And, Mr. Guerin, if you have any concerns about this, I would appreciate that you would put those on the record now for this subcommittee because the last thing that we want is to be accused of mismanaging quadruple the amount of money that GSA has ever had before for these functions because we want people back to work. We want public buildings that meet efficiency requirements and are able to perform for the, for the future and we don't want to waste taxpayer dollars and so do you have the assurances that, that you're going to be able to function in a way that works for the taxpayers given that, given the resource limitation?

MR. WILLIAM GUERIN: I'll, I'll simply say that our biggest concern is around contracting officers. We believe that there are project management professionals in need of work now that will, and frankly I've received, you know, upwards of 50 applications personally, I know it's happening across the country, of people, quite qualified, looking for work with the federal government and we are able to bring them in temporarily on four year contracts, things like that to support our programs and we will be doing that.

We're not looking to staff dramatically in federal hires, federal permanent employees because this is a huge program, but it is a blip in our radar. We'll go back to, I suspect that, you know, a typical billion dollar or so a year construction program after the stimulus money has been spent down. But contracting officers are certainly a concern and we're actively engaged, you know, particularly chasing into it and, and looking at people that have that kind of very specialized experience and trying to bring them on board as quickly as possible.

It's something that, you know, we're actively looking at. Several regions have different ways of doing business. We're looking at those lessons learned and those great ideas out there to how to use contracting officers more effectively and staff them with the kind of support they need to become much more efficient, I guess, is the best word for, to do the contracting that needs to be done for this and then it's staffing up. But I think that area is a concern for GSA. Otherwise I think we're, we believe the people are out there that can help us do the program.

REP. EDWARDS: Thank you, Madame Chairwoman and I just look forward to working with you and the ranking members so that we can make certain that with the quadrupling of the money that's gone out to GSA that we make sure that it's spent in the most efficient and effective way and that the agency has, and the inspector general in particular has the authority to do what they need to bring on experienced people who know the job to do the job. Thank you very much.

DEL. NORTON: Thank you, Ms. Edwards. Mister Diaz-Balart.

REP. MARIO DIAZ-BALART (R-FL): Thank you, Madame Chairwoman and I think I have a couple, maybe a minute or so left before I have to run and I thank you for, for that. I think Ms. Edwards is right on target and that's the key, is making sure that the resources are there and they have the flexibility. Mister Miller, you highlighted that the potential for cost escalations and delays in your testimony obviously you also make a point that's not a new issue. But with the workload increase, what can be done differently, though, to minimize those risks?

MR. BRIAN MILLER: If I may go back to your earlier question about job creation. I understand now that according to the Office of Management and Budget they've given the Department of Commerce the responsibility of looking at job creation so that my office will not be looking at that particular aspect, so, I'm sorry I gave you an incorrect answer before. These are historical problems that that GSA faces. The cost escalations, the time delays, and they're well aware of these issues and, you know, I assume that Mister Guerin and others are taking efforts to try and correct them. But we will be keeping our eyes on that, those issues and looking at those issues very carefully.

REP. DIAZ-BALART: Thank you, Mister Miller, and again, Madame Chairwoman, I apologize but I do have to go to a vote.

DEL. NORTON: You are excused, sir. (Laughter.)

REP. DIAZ-BALART: Thank you, Madame Chairwoman.

DEL. NORTON: Let me continue then with a question. Mister Miller, am I correct that if you took on a contractor, the contract would have to get a security clearance, and be checked for, as you said, the floor -- (laughter) -- the floor makers will come to be checked for entire background and so, how long does that take contractors to be able to do this kind of work with the GSA?

MR. MILLER: Madame Chair, you are correct. They would have to go get a security clearance. The exact level of the clearance would depend on the job that they perform. We are trying to expedite those clearances but, again, it could --

DEL. NORTON: Is that also through OPM by the way?

MR. MILLER: The security clearances?

DEL. NORTON: Yes.

MR. MILLER: I believe they are. I know at various times our office will help out expediting those clearances. Do you happen to know --

MR. : Some of the clearances that we process go through the Federal Protective Service of DHS. The --

(Cross talk.)

DEL. NORTON: But they've got to go to another agency which is backlogged on getting those and here, if we've got some contractors, we've got to get in line behind, you know, others who are hiring contractors.

MR. MILLER: And I'm not sure where the security clearances are processed with GSA. I'm talking about the HSPD-12 clearances that support our contractors.

DEL. NORTON: And so it's a security clearance, who does the background check? We do the background check or does OPM do that?

MR. MILLER: Others do the background check.

DEL. NORTON: You see what I'm getting at. Especially with contractors. You're not the only one doing stuff.

MR. MILLER: Right. Right.

DEL. NORTON: Um --

MR. MILLER: Madame Chair, if I could clarify that as the Office of Inspector General, we don't plan to hire contractors.

DEL. NORTON: Alright. No contractors, this is important. Who are you going to hire, sir?

MR. MILLER: We're hoping to hire retirees as well as new auditors and investigators.

DEL. NORTON: Well, but they'll have to go through the same kind of, so what percentage of the new, you only have seven. What percentage will be, do you expect to be, and this is temporary employees, Mister Miller, you know, they'll last for a couple of years or so.

MR. MILLER: Yes.

DEL. NORTON: So are you trying, to the best of your ability to hire all retirees or annuitants at one time or another?

MR. MILLER: Madame Chairwoman --

(Cross talk.)

DEL. NORTON: I suppose you will have to lay them off probably.

MR. MILLER: Madame Chairwoman, we're going to hire as many as we can because retired -- (inaudible) -- have these, as long as they have the experience and they're good workers, we want to hire them --

(Cross talk.)

DEL. NORTON: So there's a preference for annuitants given the time savings over brand new employees?

MR. MILLER: We need both. We'd like to hire both.

DEL. NORTON: Why do you need both? If you've got seven (annuitants ?) who say, I'm ready to work tomorrow, why would you need somebody who had to go through the security clearance, background check, look, I want more people hired. Guess what? GSA better have its work done on time. And therefore I want to know why you wouldn't prefer to hire annuitants who would be presumably short shifted through this process?

MR. MILLER: Madame Chair, we do and we're trying to hire about 10 to 15 retired annuitants to help us to audit, in particular, construction projects. We also, in the same process, would like to hire new employees.

DEL. NORTON: Listen up. Are you or are you not giving preference to this work? I'm not nearly as interested, if you will forgive me, in your overall agency. I am trying to pinpoint and to circumscribe, if you will, the work that has a time frame and the time frames are foreign to the GSA.

MR. MILLER: Right.

DEL. NORTON: They don't do anything. If it's supposed to take you two months to do something, it will take them a year. So given the time frame that they are accustomed to, which is no time frame, if we have front end problems, in hiring, and I will get to Mister Guerin in a moment, when I search your testimony was that with respect to this work, you are looking for annuitants, then you spread it to, to other folks you'd like. And I want to know, are those other folks who'll be working on this work as well?

MR. MILLER: Yes, Madame Chair. We would like --

DEL. NORTON: Do you have some other authority, do you have authority to hire people who work for the DOD, part of your work, for example?

MR. MILLER: Madame Chair, no, we do not.

DEL. NORTON: Do you have any authority to hire anyone except for the public building service work?

MR. MILLER: Madame Chair, I'd have to check. I don't believe that we have authority outside of the new --

DEL. NORTON: See then I can't understand it. There's seven people you told us you could hire. Then you went to 15. Where are these other, where are these other people coming from? Who funds those?

MR. MILLER: Madame Chair, we would, I, the 10 to 15 would be retirees. And we are seeking authority to hire those. I guess some of those spot FTE's would be taken by the retired, retirees. So we would have to - -

(Cross talk.)

DEL. NORTON: I just want to know, will, my question is very simple. Will the auditors, with this grant of money, I don't have the amount before me, will you be able to hire authorities for the GSA grant of money from annuitants who could hit the ground running? I'm not, I'm pleased that there may be other employees, but there is a specific amount of money, and I'm going to hold you accountable for this amount and this says, the conference agreement provides $7 million for the GSA administrative office of Inspector General to be available through September 30th 2013 for oversight and audit of programs. I want to know about this $7 million, will this, is it possible that this $7 million can be used exclusively to hire annuitants who can hit the ground running?

MR. MILLER: Madame Chair, we will try to do that. Part of the confusion is that with retired annuitants, many of those will work part time. So that two to three retired annuitants will equal one FTE.

DEL. NORTON: Now is that sufficient to do? And it might be because people who work part time often end up working more than their part time hours. Do you believe that you could do it with part time employees?

MR. MILLER: We do believe that. Again, we are seeking the authority to hire those retired, retirees.

DEL. NORTON: Thank you very much. Now, I want to ask Mister Guerin. How many contractors and how many retirees do you plan to hire?

MR. WILLIAM GUERIN: Congresswoman, we've gone and evaluated that with all of our regional offices to determine the total number of people required and we think it's somewhere upwards of 150 people. We haven't settled on how many will be contractors, how many will be temporary employees, and how many will be GSA --

DEL. NORTON: What was holding up, Mister Guerin?

MR. GUERIN: Simple, simple decision making. We are in the process --

DEL. NORTON: There's this long - - Mister Guerin, February 17th is when the bill was passed. For at least six months ahead of that, you have been preparing for this and remember what I said to Mister Miller about timelines. I realize that's a foreign language, but we're going to learn to speak it now. So, I've got a, I don't understand what is the holdup in making the simple decision of how many retirees, for example, the easy decision to make is, let's get as many retirees as we could possibly find, and anything we can't find has to go to contractors because of the sheer savings and, and, and process time.

But, Mister Guerin, let me tell you my disappointment. We had to bring out in this hearing that you didn't even have the authority, and let me just say, that over and over again I have found that all the agency had to do would be to come to staff. And among staff that it didn't have X, Y and Z and they could have had it. The new head of OPM, who I don't even think I have to go to happens to be a person I know very, very well. He lives in this region, has worked for the Congress and the government his entire professional life.

He's already off and running to create a new, more efficient OPM and I don't know, if we hadn't had this hearing, and this is a tracking hearing, we're going to have them very often, how we would have even found out that you did not have the authority which this stupid Chair assumes you had. It is very troublesome to me and, Mister Miller, I want you to take notice. I didn't even know it. It's not raised, except in Mister Guerin's testimony.

It certainly is raised, the hiring issues are certainly raised in your testimony, so it gives me no sense of confidence in the agency that you haven't been here before the bill was passed, knowing how short staffed GSA has been for years, to say, we don't the staff, you discussed that with, with staff and talked about moving people around but, no one has ever said to me we need some OPM, we need to move OPM to make us an agency. It's extremely disconcerting to hear this only in the hearings.

So I've got to ask you.

Am I going to be left with people combing the fields with some contractors because you haven't even decided that the best way to get people on board is to look for some people who've left the agency and who may be lured back, I mean, I don't understand, I don't understand your proceeding, and you need to help me out here, because, because you've just lowered my confidence several degrees in your ability to even confront the challenge before. Can I ask you this? You heard Mister Miller say that he believes he will be able to hire annuitants to do this work.

Maybe he won't. But he sees the efficiency to the government and the timeframe. Could I ask you, whether you will only take, beginning when you leave this hearing to recruit as many annuitants as possible to do this work and if that is impossible or if you see some issues there, I would be pleased to hear them, because I'm only asking this from ignorance, you see? I don't know, maybe there is a reason why, one, it shouldn't be attempted, and two, if it were attempted it would not be a good thing.

So would you please inform me of whether you are willing to do that in light of the fact that you had to pull people from all over the agency just to accomplish what you've done thus far?

MR. GUERIN: Yes. As I said earlier, we are already identified upwards of a couple dozen people that we want to bring back to GSA and, again, I brought up the challenge of the annuity and that I think is what, we're going to try to -- (cross talk) -- at your concern, so, so, immediately. The fact is - -

DEL. NORTON: Which you also, before you go further, would you go down a list of other needs the agency has either in legislation or in moves the administration should take? It would be easier for us if, also, to get that to happen sooner that it would for you to go up the ladder, because we are a co-equal branch of government and you see the reason to see me pressing this. There's not going to be anyone to blame but us, it's us doing federal bill business. So, if this doesn't get in time, we're not going to be able to say, you know, Maryland did it or look what, we told Virginia. We are going to have to take responsibility ourselves.

So we've got to stay on top of this since we've got nobody to point to but ourselves. But if we don't even know things, unless we do what I'm doing now. So, you already have identified a couple of, although you see that's, that's contrary to your initial answer in which case I wouldn't have gone on. You said you were trying to define how many contractors and I recognize you may run out of annuitants, but if it's not even been established a preference for people who can hit the ground running, then I'm not sure where the hiring authority is at this point.

MR. GUERIN: Can I address that? We have two rolling registers out now, one focused on primarily contracting officers and one primarily focused on project managers. We know we have needs in both of those areas, so we've identified those and we've put them out and advertised them in three ways. One is affirmative hire, one a temporary hire, and one is --

DEL. NORTON: Mister -- (laughter) -- here's my problem. Guess who's not looking for a job? Somebody who's sitting at home on their pension. We've got people retired early, some of them wish they haven't now. We've got people retired. Even the people who might want to come back to work are not among those who are looking at your, who, let's see who's hiring now. It's not, as far as, I guess I should ask you, who's out recruiting annuitants? Who's looking for annuitants?

MR. GUERIN: The regions are out recruiting right now.

DEL. NORTON: Huh?

MR. GUERIN: The regional offices are out recruiting. They're the ones who know the --

DEL. NORTON: How are you contacting annuitants?

MR. GUERIN: Directly. Based on --

DEL. NORTON: But what about all this advertising? I will tell you one thing, if I saw an ad in the paper and I didn't have a job, I'd inundate you all, so you're convinced that a lot of folks are going to come in, just going through those folks to decide who to call. That's a whole big job. Who needs it? We're not going to be sitting up here giving excuses to GSA.

MR. GUERIN: No, we don't believe there is enough annuitants to staff all of the positions that we have out there but are identifying the people --

DEL. NORTON: We'll never know, if you don't have somebody on the case, calling up annuitants, look, a lot of these people are settled in doing other things. Mister Miller testified that you can only get some of them part time. Somebody ought to say, hey, look, you know, look at your 401k, what do we call ours? Whatever we call ours, wouldn't you like to come back for, at least part time work? I'd be aggressively recruiting these people unless, and let me ask Mister Miller, how long does it take a contractor, a new person to get through the system, as opposed to a annuitant to get through the system?

MR. MILLER: Madam Chair, I don't have the precise timeline, but it would be a lot longer.

DEL. NORTON: Yes. I can't do anything without people, you know, we're stuck on stupid without people. Say, and then, you know, somebody comes like this is (comical ?) and sorry we're having trouble contracting people. We'll get the phone. I asked the staff how long it had been nine days since the darn bill was passed and they were preparing for it long before the bill had passed. This is extremely disappointing. How many people have been brought on new at the to work exclusively on this work, Mister Guerin?

MR. GUERIN: I don't have that number Congresswoman.

DEL. NORTON: Tell you what. This is very, very just anxiety raising. By the close of business tomorrow, we want to see a personnel chart for the Recovery Fund Act alone, including those who've been brought on board and when. When we say tracking hearing, that's what I mean. You know what? Given the fact that some of this only comes out on what call cross examination, I will say to the staff, I think you've got to be prepared to hold a hearing, even if a brief hearing every two weeks.

Until we are sure that these folks have, and we may have to do them on a Friday, or we may have to do them in one of the other rooms. Until we are sure that they have staff on board and are going, we're going to get so backlogged, we won't be able to catch up. It'll be on us. By the close of business tomorrow, I want that staff chart here, please. You need to bring on the people just to help you get on people. I understand how understaffed you are. I should think it'd be an incentive to go forward.

Let me ask you about swing space. Is there positions between swing space already contracted for the full blown building makeovers that are going to take place throughout the United States, Mister Guerin?

MR. GUERIN: We've identified the swing space needs for each of those large projects. We have funds available to the program, in order to accommodate those swing space --

DEL. NORTON: Are they available?

MR. GUERIN: We are investigating that right now. I believe they are available. Several of the leases are in the district and we believe space is available in the district to accommodate them.

DEL. NORTON: What I'd like, by the close of business tomorrow, to know what the swing space is in the district and where the swing space will be needed for, in other areas. And I want, you know, where are the timelines? Have you asked, do you have the timelines for the projects?

MR. GUERIN: Yes.

DEL. NORTON: Could we have those timelines as well?

MR. GUERIN: Yes.

DEL. NORTON: By the close of business tomorrow.

Could I ask about something is, if you had come to us, I would have made a priority, because it's certainly gotten on our nerves, but only episodically, so-called unbudgeted customer needs. We have seen GSA's work held up, I don't know why this wasn't an incentive, because the agency had, had needs that were unbudgeted with GSA. As you know, I am in the process of also doing hearings to reauthorize the GSA.

That's a fancy word to say reform its statutes and hope that it will reform the agency itself. But, one of the things I'd like to do is to make sure that, for example, for things like moving funds, GSA has the authority. So the agency, which then has to go and find it in its budget, which, of course, is a disincentive. Doesn't hold up the works, where we can end up paying for space. How many time have I seen that occur? Or just because GSA doesn't have the funds to move the agency into the space, that is then finished, now, most of your, the buildings you do are all late level four.

Any reasons why you, are there any similar unbudgeted customer needs that of the kind that are mentioned on page eight of Mister, of the kind I've just said? Moving needs for example. Of the kind that are also mentioned in passing on page eight of Mister Miller's testimony.

MR. MILLER: Those --

DEL. NORTON: Agency funds that have they escalate the social security administrator here and I'm going to see if there's any such funds related to the work that the Social Security Administration has asked you to do. Go ahead.

MR. MILLER: Before I answer that question, Congresswoman, I just wanted to clarify something. GSA has requested and receive a waiver for our contracting officers from OMB regarding the annuitant, the retirement payments, so we have the authority to hire them without penalty. And we're seeking --

DEL. NORTON: Say that again, you have received.

MR. MILLER: Yes. We -- (cross talk) -- we asked for a waiver from OPM and they granted a waiver for 1102 which are the contracting officers, so we have the ability to bring back annuitants --

DEL. NORTON: Wait a minute. So contracting officers including annuitants.

MR. MILLER: No, for annuitant contracting officers or previous contracting officers, we're able to bring them in without penalizing and we're seeking authority for other positions as well.

DEL. NORTON: Well, this good. Thank you very much. So in other words, you already can and are hiring annuitants.

MR. MILLER: Without penalty.

DEL. NORTON: Without penalty.

MR. MILLER: Right. (Cross talk) -- and to your question, Congresswoman, the, the agency moves, as GSA developed a list, we work with OMB on the cost associated with moving the tenants in and out of the buildings. Where we had the opportunity and where OPM, excuse me, OPM, OMB was able to add money to the 2010 program for those agencies, they accommodated --

DEL. NORTON: That's 2010, is that connected -- (inaudible) -- funds?

MR. MILLER: It's connected to getting, getting funding for the agencies in 2010 as appropriated --

(Cross talk.)

DEL. NORTON: You see, this is our inefficiency we could do without. (Inaudible) --- are any of these funds associated, Mister Gallagher, with the work you have to do with these? We call them unbudgeted customer needs because it falls to you to do it. You've already delegated, what is this, $500 million to GSA. Are there any other funds you've had to delegate or get from your budget in order for them to complete the work that they're doing for you?

MR. MICHAEL GALLAGHER: Are you speaking just about the computer center, or --

(Cross talk.)

DEL. NORTON: Yes, sir.

MR. GALLAGHER: I'm not prepared to answer that question, but if maybe I could have somebody from our staff get back to your staff and answer that question.

DEL. NORTON: Yes, I wish you would because we'd to get ahead of them in case --

MR. GALLAGHER: We'll have somebody come back and brief you on that.

DEL. NORTON: What made you decide to have GSA perform this work for the Social Security Administration?

MR. GALLAGHER: Well, under the law, only the General Services Administration can perform this type of a real estate --

DEL. NORTON: (Cross talk) -- Well, I wonder why this wasn't included in the, I wonder why this wasn't included in their, in their package. You had to delegate it to them. You had to give them money over. You had the money. You had to give it over to them?

MR. GALLAGHER: Yes, we -- (inaudible) -- work authorization back to GSA for this function.

DEL. NORTON: Actually maybe this was just to keep the funds from going beyond certain amounts for each agency. Maybe that's the reason this occurred. But I'm, you're right, you don't have the authority. The reason I'm asking questions like this is that we are authorizing the bill. We don't want to just step into something that, that's not what we want to do. What all, and what are the plans, Mister Gallagher for this computer center?

MR. GALLAGHER: Well, the first step is that we get -- (inaudible) -- process. We have a construction management firm that's already been contacted by GSA and so, GSA has the lead on this and we work with them --

DEL. NORTON: Now, where's the company located?

MR. GALLAGHER: Where's the company located?

DEL. NORTON: Yeah.

MR. GALLAGHER: It's name is Jacobs Facilities. I don't know where it's --

DEL. NORTON: You mean it's a facility that --

MR. GALLAGHER: It is a contractor.

DEL. NORTON: No, no. Where is the new facility?

MR. GALLAGHER: No decision's been made yet as to where the new facility will be. We're still undergoing the limit of site selection process on that.

DEL. NORTON: Do you have to purchase land?

MR. GALLAGHER: Yes, this will require a purchase of land.

DEL. NORTON: Mister Guerin, what about the purchase of land here? That's, that's, that's, and, and we don't even know where it's going to be at.

MR. GUERIN: Well, we're working with the administration to identify appropriate locations for the project and we're—

DEL. NORTON: We understand it's going to be within -- the staff believes it's going to be within 50 miles of Baltimore.

MR. GALLAGHER: Somewhere about that. We do know that there are some technology reasons that require it to be close to our current facility.

There are some technology issues with that amount of data transferred back and forth. There are also some reasons that we want to make sure that we have access of our intellectual capacity -- our employees will be able to get back and forth to that facility.

DEL. NORTON: Where is it located now, Mr. Gallagher?

MR. GALLAGHER: It's in Baltimore County. I'd rather not give you the specific location, due to its critical nature.

DEL. NORTON: Is it a secure facility?

MR. GALLAGHER: It is a secure facility, yes, ma'am.

DEL. NORTON: All right. But it's in Baltimore County.

MR. GALLAGHER: Yes, ma'am.

DEL. NORTON: What is the delineated area, Mr. Guerin, going to be ? You said 50 miles, about 50 miles—

MR. GALLAGHER: I can tell you. We are still engaged in the process of actually developing site criteria; that is one of the ones that we have, which is the technology driver for some in relatively close proximity.

DEL. NORTON: Mr. Guerin, in light of what I can only call a shameful episode recently experienced whereby there were gross violations in the delineated area, or the facilities -- unheard of violations which are already on the record -- I am going to ask you, within 24 hours of the delineated area choice, to submit that information to this committee and subcommittee. I am going to remind you that when there is a delineated area, the rule is that any change in the delineated area must be reported to this committee -- as did not occur with the Social Security or HHS facility, which caused its cancellation, as I recall.

That is something we will need to know right away, especially since it looks like you'll have to purchase land. How big of a facility is this?

Any idea, Mr. Gallagher, how big a facility this is?

MR. GALLAGHER: Again, we are in the beginning parts of the discussion; it's somewhere around 300,000 square feet.

DEL. NORTON: Mr. Gallagher, let me say to you, again, you have been working with an agency that's overburdened in the first place. We believe that there are other agencies that will also yet be required to ask GSA to do the work. The earlier you get this done -- because you're essentially starting at the beginning with land purchase -- the better off you'll be. I'm going to have to ask you to get all of your basic decisions made within the next 30 days at the outset so that they won't be able to put it on you; they'll do it in a second. They will say, "oh, you know, what could we do? We're waiting for the Social Security Administration."

MR. GALLAGHER: If I could -- we are actually working very closely with Region 3 of GSA. I will tell you, we are very pleased with their enthusiasm and how they have reached out to us on that—

DEL. NORTON: But the site hasn't been selected—

MR. GALLAGHER: That's correct.

DEL. NORTON: Part of this is -- remember, it's 90 days. They're short-staffed and they really are being asked to do everything at one time. So we're here to do the impossible. But I want to make sure you're not left since you have to start with land purchase, which makes yours even more difficult than what we've been describing here.

MR. GALLAGHER: If I could, ma'am, we do expect -- because there's a considerable amount of work to do ahead of time -- our current plan is we expect to be able to acquire the site in the second quarter of fiscal year 2010.

DEL. NORTON: Yeah, which means that you have to decide upon the site. Acquire it means—

MR. GALLAGHER: That's correct. Actually, we have to set up the requirements for it, go through the competitive process for that. This is actually a GSA function that we work with—

DEL. NORTON: Yes, it does take time. It does take time.

In light of that, I'm going to have to ask Mr. Guerin, since you have testified that you are looking for streamlined methods -- I think you've used the word "innovative approaches" -- to do projects associated with this thing, here's a classic one where you're being asked to do really a very difficult thing, which is to acquire land and go forward from there.

Could you give us an idea of what kinds of innovative approaches to deliver projects you are using -- can you give me an example? What do you mean by innovative or streamlining the present process?

MR. GUERIN: Well, as an example, Congresswoman, you're right, the new design starts with a new site and those kinds of projects are going to be our most challenging because of the timeframe involved with all of those activities. As an example, in Bakersfield, we're looking to have a design competition to completely streamline the design selection process and get us very quickly to a—

DEL. NORTON: How?

MR. GUERIN: A design competition eliminates the need to actually go through a formal selection process of the architect. We issue a solicitation and the designers actually provide designs as part of their initial submission to us. So it cuts out quite a bit of the design time associated with getting to a conceptual project. By doing that, we shorten the time dramatically in the design phase and by using design build bridging, we can take that quickly to a construction project by using the concepts that are provided, selecting the architect that gets the winning contract, asking them to continue the design, and starting the design build process at the same time. It's an example of substantially compressing the timeframe associated with it.

DEL. NORTON: That is, that certainly is.

Indeed, as I understand it, Mr. Abdul-Rahman (ph), we're using something of that kind of process for the DHS headquarters?

MR. ABDUL-RAHMAN: For the Coast Guard headquarters, we're using a design build bridging process.

DEL. NORTON: I'm sorry, Coast Guard; thank you for that correction. Go ahead.

MR. ABDUL-RAHMAN: Yes, we are -- of course with the St. Elizabeth's project, we own the site so we have the advantage of having the site already. But for the Coast Guard design, which is the first phase of that development, we are using a design build bridging process to accelerate the project and—

DEL. NORTON: Are you on time? We had some dates that you delivered to us. Are you on time thus far?

MR. ABDUL-RAHMAN: Yes, we're on schedule to ultimately have a ward of the Coast Guard headquarters building in September of this year, as well as the construction manager for that project.

DEL. NORTON: So that means we won't be -- when will we be obligating funds?

MR. ABDUL-RAHMAN: Yes, we will be obligating funds beginning this summer. The first part of that development I was mentioning kind of the larger package, which is the actual Coast Guard building but we're going to be starting with abatement and demolition of the buildings that are on the site that the Coast Guard will occupy; that work will start this summer in June.

DEL. NORTON: That's important.

So you're testifying that in June the first abatement work and what else, abatement and--?

MR. ABDUL-RAHMAN: Demolition, demolition of the site that will house -- or the site for the Coast Guard headquarters is currently occupied by buildings that are identified for demolition in the final approved master plan.

DEL. NORTON: Except for acquisition of site, you, of course, have perhaps the most challenging work to do. We got $450 million out of the stimulus package. This is classic, old-fashioned, WPA funding. Those cornerstones down on Pennsylvania Avenue show you that this is, what, this is how you do it. Every last one of those buildings on Constitution and Pennsylvania Avenues were built during The Great Depression. I think this is maybe the only one that we're doing except for the smaller port entry buildings, land port entry buildings, in that fashion. That's the reason we were able to get this out in stimulus funds and we got them out largely through the Senate where there was an understanding of the history of the use of infrastructure buildings to actually build something.

We got them out. The reason we're so focused on you, Mr. Abdul- Rahman, is that congress -- and particularly the Senate, who was really our help-mate here -- showed their belief in building as a way to stimulate jobs. Now we've heard the figure, 38,000 jobs; that 38,000 encompasses how many buildings? Where does that figure come from? Is that still a good figure?

MR. ABDUL-RAHMAN: Yes, the figure that you're quoting was from the final environmental impact statement and record of decision. That's a regional number. The figure I'm recalling was about 32,000, I think, jobs, direct employment opportunities.

DEL. NORTON: Over what period of time?

MR. ABDUL-RAHMAN: Over the development of the project, which begins this year and has final occupancy in 2016.

DEL. NORTON: That's a long term project. How many buildings?

MR. ABDUL-RAHMAN: We are retaining, in terms of adaptive readings, we're retaining 52 of the 62 buildings that contribute to the NHL status and there will be several—

DEL. NORTON: NHL?

MR. ABDUL-RAHMAN: National Historical Landmark, I'm sorry, National Historic Landmark status.

DEL. NORTON: So that's re-use of building.

MR. ABDUL-RAHMAN: Re-use of building.

DEL. NORTON: How many buildings are being re-used? That makes a lot of work. How many buildings are being reused?

MR. ABDUL-RAHMAN: Fifty-two.

DEL. NORTON: That's excellent.

MR. ABDUL-RAHMAN: And then there will be a new building; the Coast Guard headquarters will be a new facility. There will be a national operations center that will be largely an underground facility where DHS will be able to coordinate an organized response to different threats and challenges. Then there will be new facilities on the site for other parts of the DHS program for the Transportation Security Agency, customs and border protection, and immigrations and customs support -- and FEMA.

DEL. NORTON: I hope you understand, Mr. Guerin, part of my last question that said I do not believe that you're going to be able to bring on even a new one that's fast enough without selling them on coming back and, therefore, we need a proactive program -- not here. I'm advertising for some contractors who get thousands; this is a very tough time. We want very special kinds of people -- obviously contractors -- but to the extent that we can get people who threaten this process, the committee will be particularly looking to that.

Mr. Miller, you mentioned the old bugaboos of fraud, waste, and abuse. You've earlier testified that it's very difficult to spend government money rapidly and you mentioned some recent examples without incurring some fraud. Now, we're sophisticated about the notion that certainly some PhD candidate will tell us how much fraud -- what's the minimal fraud we can expect in any government contract. Maybe that standard would help us.

I am worried about GSA more so than other agencies because of what you've just seen is what looks like almost a startup of an agency for stimulus funds. You have to hire yourself some people; you don't even know yet whether they'll be experienced people or people who have to go through a long process. You have to do four times the amount of work. You have to make sure it's quality work because in construction you can tell in a mini-second if it's not quality work. You have to do a competitive process.

My question to you is, how should we look at the possibilities here for fraud, waste, and abuse with a short-staffed agency who essentially has had to staff up even to do the stimulus job while keeping its other functions going? How are we going to prevent fraud, waste, and abuse, given the considerable handicaps and challenges that this agency experiences?

MR. GUERIN: Madame Chair, I share your concern. We are very concerned about this as well. We are looking -- we hope to look at projects very early so that we can spot issues early and spot warning signs, red flags, and hopefully catch the fraud, waste, and abuse.

DEL. NORTON: How about warnings signs? That scares me. By that time, it's pretty bad.

MR. GUERIN: Yes.

DEL. NORTON: How about warning signs, give us examples of the kinds of warning signs that would be useful to you and to GSA to know of?

MR. GUERIN: Well, some warning signs are, I guess, the keeping of the records; if contracts are being split; if there are equitable adjustments; if there is no record of the contracting officer's technical representative on a contract or a project.

DEL. NORTON: Is there a project director, for example, from Mr. Gallagher's project? That's a separate project.

Mr. Gallagher, do you know if there is yet a separate project -- you see Mr. Abdul-Rahman is the project manager for a project that, at this point, has roughly the same amount of money, $750 million, is that right? You have $500 million.

Is there a project manager, Mr. Guerin?

MR. GUERIN: Yes there is. Ed Meyers in our Region 3 is the project manager for the SSA project.

DEL. NORTON: It's very important for a project of this kind, both to satisfy the client and the committee.

I'm sorry, go ahead, Mr. Miller.

MR. MILLER: If information being reported in multiple locations do not match -- for example, a contract awarded in FPDS is not reported when the obligation is also reported to OMB—

DEL. NORTON: Mr. Miller, is there any percentage? I don't know if this is even feasible. There are some kinds of work being done all over the country -- the same kinds of work like HVAC work, which is going to be very important because of the emphasis on energy conservation.

Is there anything to be said? God knows, I'm offering no opinion here. I have no idea about a contractor who would be prepared as a matter of scale both to give us a good price and to do the work quickly, even though located in a number of different locations -- or is it best to go region by region with all of the inefficiencies that can come from that process?

MR. MILLER: Madame Chair, that appears to be a very difficult issue, that we would rely on the expertise of the agency—

DEL. NORTON: Well, what does Mr. Guerin say? I'm offering no view. I have no expertise here. You were put in a very strange position, even for a well-staffed agency. We have decided there are so many federal facilities that it would be impossible to locate this money in just a few of them. We tried to work with you to see that there was some objective process to choosing needed work in all 50 states characterized in the District of Columbia because every single jurisdiction, where they're outside of a building, has incurred the same lack of funding for GSA projects.

I'm trying to find out whether there are economies of scale for work of the same type or whether -- particularly in light of Mr. Miller's concern about fraud, waste, and abuse in those -- that it's better to go piece by piece, jurisdiction by jurisdiction. I recognize that you've not had this kind of work going on in all 50 states before. It's conceivable that there could be some contractors whose record of doing similar work with the GSA has been of such a quality and such a speed that there could be advantages.

Do we have any sense of that at this point?

MR. GUERIN: We do, Congresswoman. We have a series of IDIQ, indefinite quantity, contracts that we intend to use for some of the projects—

DEL. NORTON: Give me an example of what that means, please.

MR. GUERIN: It means we've hired a series of contractors in particular geographic locations that we understand the quality of work that they've been producing for us—

DEL. NORTON: Like to do what kind of work?

MR. GUERIN: To do construction work; to do some design work as well. We have a number of different kinds of contracts that we use. They give us the ability to task contracts so we don't have to go out and re-compete, reselect, and reeducate someone who has not had experience with GSA in the past. So those people are available to us and we're increasing the maximum order limitations and the amount of money available to those contracts so we can effectively use them as we move forward.

We want to make sure that we take into account our small business goals, so we will push a lot of contracts out to individual contractors and pursue those because we want to make sure that we achieve our small business and set-aside program goals as well.

We have a series of programmatic contracts that we're putting out for lighting, for re-commissioning, that will be national contracts. We will rely on specific experts to make sure that we have a consistently-coordinated approach to how we evaluate our projects and how we define the scope of work for these programmatic projects moving forward. So we have those kinds of things going on where we're absolutely relying on specific expertise to make sure that we get exactly what we want and make sure that we achieve the energy goals that we're trying to achieve here.

DEL. NORTON: Is monitoring of this work centralized here or are we relying on the regions?

MR. GUERIN: Both. We have some contracts that are being managed centrally and most of the contracts are being managed regionally. We have experts. Obviously, GSA puts its program out through our regional offices and the vast majority of the work will happen in the regional offices.

DEL. NORTON: Mr. Abdul-Rahman, would you put on the record about small business goals with respect to the DHS project, which Mr. Guerin alluded to generally? Have you goals and how have they been met or not on the DHS work done thus far at St. Elizabeth's?

MR. ABDUL-RAHMAN: The goals that we're establishing for the DHS program are 40 percent for small businesses. As I mentioned, we're in the early stages of those procurements. Those goals will be included in the requests for proposals that are being issued and then we'll follow up and report on those as the contracts are awarded and the GC's submit their subcontractors.

DEL. NORTON: Now we understand that in the clearing of the land, there have been some goals and that -- do you have any figures on those goals?

MR. ABDUL-RAHMAN: Yes, I think what you're referring to was that we began when we obtained custody and control of this property from the Department of Health and Human Services, we immediately began to stabilize the properties that were there that were in disrepair and do some repairs.

I don't have the exact figures but it occurs to me that we spent about $13 million investing in the site so far in stabilization. All of that work has gone to small business to date. I like to point out that the solicitation that we're going to be awarding for the abatement and demolition is going to be a small business project also. That will help our record and increase our objective to make opportunities available to the maximum extent to small business on this project.

DEL. NORTON: Given the speed with which you have to proceed, Mr. Guerin, how are you going to meet the small business goals? We're piling that in on top of everything else we've piled on your back.

MR. GUERIN: But we're used to it, Congresswoman. We pursue small business contracts regularly. We have a good track record of achieving our goals and we're going to continue to advertise and specifically set aside for a small business owner to do that.

The vast majority of the projects -- not the dollar amounts but the projects -- are small projects that can be successfully awarded to small businesses and we intend to do that.

DEL. NORTON: Well, Mr. Abdul-Rahman and GSA have been holding forums here for small businesses and I was at the last one. On Tuesday I said, people are out learning about the 8A and other processes. Are those forums going to be held around the country in any other locations? Are any others expected here?

MR. GUERIN: Yes, Congresswoman, both across the country and in D.C. you will see additional opportunities for small business to understand and get to know GSA and get to know what our processes are and participate in our contracts; that's certainly a way that we go out and strive to get as much small business participation as we can through those types of forums that you're referring to.

MR. GALLAGHER: Madame Chair, would you mind if I took a very brief break?

DEL. NORTON: Yes, sir, go ahead.

How many of these -- Mr. Abdul-Rahman, how many of -- you've been having these forums. Have any of these small businesses been added to the GSA schedule as a result of your forums?

MR. ABDUL-RAHMAN: I'm not aware and I will have to get back to you about whether they've been added to the GSA schedule.

DEL. NORTON: What does it take to get on a GSA schedule?

MR. ABDUL-RAHMAN: They would need to apply to a solicitation that GSA would issue specifically for GSA schedules.

DEL. NORTON: But how do you get on the schedule?

MR. ABDUL-RAHMAN: They would -- when we have opportunities for schedules, we announce those in the Federal Business Opportunities.

When those solicitations are issued, then those companies would compete for those. The training that we're having right now is for people to be certified by Small Business Administration as small disadvantaged contractors.

If I have a moment, I would like to clarify that. Our goal for construction is 40 percent small business and for the construction managers, 38 percent. The solicitation that we have out now for the abatement and demolition is specifically for small disadvantaged or 8A contractors.

DEL. NORTON: That's for DBE's. How are they getting on the GSA schedule? You're just talking about SBA -- that's important -- but then there's the all-important GSA schedule.

MR. GUERIN: I think we should get back to you with a specific response on that, Congresswoman. I don't think --

DEL. NORTON: Are people being trained so that -- I mean, what does it take to get on the GSA schedule? What do you have to have in order to qualify--?

MR. GUERIN: I think we need to get back to you on a specific answer on exactly how that happens because I don't think Dahoud (ph) or I are in a position to answer that question exactly.

DEL. NORTON: Would you within 14 days get back to us? It's one thing to be on it and to, therefore, compete among those who are already on it, but I'd like details of how you get on it. I'd like to know -- and may I thank GSA, who will be appearing and offering advice at my small business fair, held annually. May I thank you for always being there at that fair? That fair is the 13th of May next Tuesday and I know you will be offering a workshop on how to get on the GSA schedule. So I'd like a list of all of the businesses in the District of Columbia that are on the GHS schedule for whatever purpose.

Then I'd like a list of all businesses in the region, national capitol region, that are on the GHS schedule -- that's public information, I'm sure.

MR. GUERIN: I'm sure it is.

DEL. NORTON: I'm almost through. We would not be engaged in this hearing and you would not have this money except for one purpose: to create jobs. So as much as we talk about fraud, waste, and abuse; quality of work; how soon it gets out; if we were to list what the purpose of this money is, it would be to create jobs and to help us get out of this structural recession.

A look at what has happened to our country makes it clear that there will be no coming up one sector at a time. All 50 states are down. There is a terrible cobweb. You can't break into it and break somebody out of it. Everything has happened at one time; that is why we're doing TARP and why we're doing mortgages and why the president does have to do it all at one time or go home -- and he ain't going home.

That being the case, the job creation element of this becomes exquisitely important, if I may say so, the most important element of this. Can you tell me how many people have been hired as of this time?

MR. GUERIN: We have awarded $100 million worth of contracts; those are several large projects and a series of small studies and design projects. I don't have the exact figure of how many people are hired—

DEL. NORTON: So now are any of those projects underway?

MR. GUERIN: They are just getting started, Congresswoman. In fact—

DEL. NORTON: Now how do we track jobs? Again, that's how we're most accountable and then everything else comes after that. Do we know when somebody is on the ground working in whatever capacity?

MR. GUERIN: Yes, we have a specific contract clause that's going to be inserted into every contract that we issue through the recovery to ask the contractors to track jobs in a very specific way. They report those jobs directly to a web site that I don't remember -- I believe it's a commerce web site, where all the jobs are tracked and reported. That will happen across the country. They will feed into a specific web site.

DEL. NORTON: I know we're early in the obligation, but you are separately tracking jobs. For example, the contractor that's slow getting people on the ground, what happens to that contractor? Is there a word of contract? There he's sitting on a contract or somehow or other he is behind and there are a glut of people looking for jobs -- what does he do? What do you do?

MR. GUERIN: We don't anticipate that happening, Congresswoman. We—

DEL. NORTON: I anticipate what you should anticipate and I anticipate what you shouldn't anticipate and I absolutely anticipate that once some of these guys get the jobs, even though there's every incentive to start, that you will be looking at some people who start up and some people who put in a good bid that don't start up as quickly.

How will you make sure that all of these contractors are working quickly?

MR. GUERIN: We're going to continue to use the processes we use to pick the best contractors. We have source elections processes that we use.

DEL. NORTON: When they worry about the contract, yet you see the contractor A in x jurisdiction has started up and is working quickly. Contractor B is working less quickly, even though he is actually from the same work force. What does GSA do? Is there a marker that shows how fast someone ought to be able, given the number of unemployed--?

MR. GUERIN: We have very specific information about each of our contracts, a milestone schedule for not only the design but the procurement and the construction projects. My office is going to specifically track those things to ensure that the projects are happening on the schedules that they created for us and that we agreed to contractually.

If they do not perform, again, to get the money out, GSA has to spend the money in five years and that's' a very important aspect of this program.

DEL. NORTON: But what do you do, though, Mr. Miller, if somebody doesn't -- you know, doesn't get up all this stuff because he's a slow as GSA used to be, shall we say? What do you do? He's already got the contract. Maybe he's hiring some people but he's not putting the money where the jobs are. But he has this nice little piece of paper in his hand. What, if anything, can the government do, having already awarded him the money except to say you should be doing better? We don't have that luxury this time.

MR. MILLER: Madame Chair, there are probably a number of remedies available to GSA -- cancellation of the contract comes to mind.

DEL. NORTON: I guess that, though, is really the atom bomb; that's a nuclear matter. Of course, the contractor knows that it's nuclear and he's never seen GSA do that under any circumstances, even when it virtually defaults.

What internal mechanisms would you -- or, for that matter, Mr. Guerin or any of the rest of you -- suggest for a contractor that's slow on the draw?

MR. GUERIN: We also have remedies through the bonding agencies that bond the contractors. We can force them to perform.

I think the nuclear bond, as you referred to, is there for us but we have various ways to remedy the contracts before that time. Again, we're going to be tracking very carefully and we will know when projects are starting to get off track and we'll use every remedy we have available to us—

DEL. NORTON: I do know what those remedies are, I really do. I have no confidence, "yeah, we'll do everything we can," answers that.

Mr. Miller?

MR. MILLER: The first remedy is for GSA to issue a cure notice, a notice asking the contractor to cure the defect -- and that's the very first thing—

DEL. NORTON: And that would include, "you're too slow and we're held accountable for jobs and we haven't got any jobs to speak of?"

MR. MILLER: I would think so, yes.

MR. GUERIN: And we have liquidated damages, Congresswoman. If they don't perform, there is a contractual penalty that forces them to pay the government for their poor performance.

DEL. NORTON: When was the last time we've ever extracted that from a contractor?

MR. GUERIN: We extract liquidated damages regularly. For slow contractors that don't perform within the contractual timeframe, if there is not a good reason -- and, again, a negotiated reason -- between GSA and the contractor to—

DEL. NORTON: Is that included in the contract so they understand that they don't pay us?

MR. GUERIN: Yes.

DEL. NORTON: This is so important -- sitting on top of government money and not acting and no penalty for it. I'm also looking at this -- I'll say to the staff for the reauthorization to perhaps clarify that about the necessity to do that. This is a very valuable piece of paper you have in your hand is the government contract and it's invaluable today.

Mr. Guerin, you testified -- I'm here reading from your testimony. The apprentice and apprenticeship programs are an integral part. These programs would be established as contractual requirements -- that is excellent -- as construction projects; meaning, that's in the RFP?

MR. GUERIN: Yes.

DEL. NORTON: But then it says, "the funding provided in the act shall be used for costs of pre-apprentice and apprenticeship programs modeled after successful GSA programs in the national capitol region through which 840 persons and 15 projects—" The problem with that, if it's modeled after that, we're going to get the people who already are apprentices or qualified apprentices.

All that does is say, make sure we have certified apprentices because of the history, not of GSA, of the construction industry of simply using apprentices. Sometimes those apprentices are not certified from certified programs -- and we rectified that -- but what do we do about the fact that the underemployment has been among people of color and women who are not certified to do anything; who have not been recruited into these programs because there has been no formal program of the kind there was up until 1980? You, of course, have been given almost no money to do it.

The thing that caught me up -- I love the first part of this in the RFP -- when we were doing exactly what we've been doing here for certified apprenticeship programs, we weren't dealing with the pool that the three million dollars you have seeks to target; that pool of people are already apprentices; they just have to be in a certified apprenticeship program.

MR. GUERIN: Right.

DEL. NORTON: I'm looking at people who are in the pre-apprentice category, largely women and people of color.

MR. GUERIN: As soon as we got wind of the potential for funds in the bill, we got to work with DOL to understand their program better to make sure that we were working with them directly to identify under-represented areas and areas with economic disadvantages so we could identify with DOL. They're going to help us identify the locations where we can really use the best bang for the buck.

You said it, Congresswoman. We don't have a lot of money on this program so we want to be very effective in how we spend it. Large contracts we can have apprenticeship and we can require pre- apprenticeship as well through the contracts. But where we really want to spend our money is in training those pre-apprentices and bringing them up to speed to get the job skills, that you and I have talked about before, to ensure they understand what it is to hold a job and what it is to have the opportunity and then move them into the apprenticeship programs that are already ongoing across the country.

DEL. NORTON: Even as we were getting money for this program, we realized we weren't going to get enough and we put you at a terrible disadvantage. We thought it important to get whatever money we could. We anticipate real disputes of when people look at these jobs and we anticipate litigation -- if I can be just clear.

The 14th Amendment of the United States in Title Six of the 1964 Civil Rights Act is very explicit: you can't spend federal or state money that has discriminatory purposes. If people see, if the various organizations see an overwhelmingly white work force, it will court litigation and it could slow us up.

We haven't given you enough money to proceed. What I would closely add, because of my past experience as head of the EEOC, it was clear to me that the problem is not in the construction trade, the problem is in training. It's not as if there are, of course, qualified journeymen and journeywomen out here. But compared to the overwhelmingly white male workforce, they pale in numbers. So I expect, frankly, that qualified minority journeymen and apprentices will be easily hired -- I really do. I think the states will grab them up even before you get hold of them.

What I'm worried about are people in the street going out there and counting people and saying, "well, I don't see a single XYZ." And some of that may be bogus, you can't tell anything particularly when you're talking about a few million dollars here and a few million dollars there. I don't have any advice for you. The Secretary of Transportation is such a good friend of ours and was before the full committee. They're in the same predicament. They have a lot more money than you and they have only 20 million lousy dollars.

The reason you got three million dollars is proportionate. I got a question from the appropriators, if you can't get as much as you asked for -- I forgot what I asked for -- do you believe that it is fair to get a proportionate amount to the transportation funds? Well, in fairness, how could I say no? Well they see it as they got too few funds and we got too few.

I don't know if this will work but I'm going to have to ask you again -- I'm going to ask staff to meet with them this week because I think we're all now on unplowed ground. I have said to the Secretary of Transportation, "you and I are in the construction business." Maybe there is some way for transportation and GSA money to be pooled so that, for example, you're not in the same place they are or whatever programs they're using compliments your -- I have no idea.

All I know is that with both of you having so little money, I'm going to ask staff if you will -- the secretary has very much agreed to begin to search this out -- if you will meet with the appropriate transportation staff and the appropriate GSA staff just to investigate how to take a tiny bit of money and make it useful to us. I am at a loss to put this terrible burden on you. I don't even believe there are a lot of folks out here -- particularly doing pre-apprenticeship work -- that I would trust. We are in touch with what we heard are programs. Are they better than others? We don't know.

DOL is problematic because they work with states and have a lousy job, have done a lousy job of training in the construction trades. You heard in my opening statement, I said that, shucks, billions of dollars they could have drawn upon to do training, FS 2000 based on our authorization bills, only 17 have -- (inaudible) -- that money.

It's important to talk to DOL, but I don't think there's group state experience either because they have chosen to take every living cent and put it on the street with whatever workforce they have.

This is real startup stuff and I want to work with you. I have a vested interest, very much like what's being done on small business. They're much easier to do, frankly; a smaller number of people geared to understand the competitive process. Here, you're dealing with people in the street who have large unemployment rates, just like the construction workers who will never, ever understand why they are not being employed but who will understand if there are targeted projects around the country -- they may not be in their area. If there are targeted models around the country from which we can proceed -- and listen to me on this -- in the next reauthorization bill, my intention is to make these funds mandatory over states in the next transportation and infrastructure reorganization bill. So you can't take billions of dollars, if you're the state of XYZ, and put 100 percent of it in the ground and not train a single person in your state -- that's an outrage.

The way in which we did it before was in good faith. We said, you're encouraged to take zero-point-five of your funds and put it into training. They said, thank you, we're encouraged. We will take that at face value -- zero. That's what most of them said, zero. We don't even know -- I've asked the secretary to get back with me as to how much each state and to give me a list of what those states were. That being the state of the ark, we want to work closely with you on what amounts to startup for training.

This, interestingly, is not about small business, as much as we've worked on that -- and you've done a good job on that. This is about jobs. It's not about jobs only for those who are out of work, it's about jobs for those who couldn't possibly get the jobs to do the work today but can use what amounts to a magical once-in-a-lifetime opportunity to get a foothold into the construction trade.

MR. GUERIN: Congresswoman, I just want to let you know that based on your comments last week at the hearing we did reach out to DOT and we started conversation with them about working together. We would definitely welcome the opportunity to participate in a program that you're bringing DOT and GSA together to look at this issue because we're very interested in it.

DEL. NORTON: Thank you very much. At the end of this week you will get from staff some sense of how those conversations are proceeding, given the great difficulty we see here.

Is there anything else any of the rest of you, the others of you or any of you, would like to say before we close this hearing? The hearing is very important to us, as you can see by how long I've kept you in it. I will tell you one thing, I do not intend to offer any -- I'm not going to say GSA made me do it or GSA didn't do it or Social Security Administration didn't do for GSA what it should have done.

I'm going to take responsibility and that's why I'm going to hold your feet to the fire. Expect another tracking hearing within about two weeks.

Thank you very much.

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