[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
SAVING TAXPAYER DOLLARS: FREEZING THE
FEDERAL REAL ESTATE FOOTPRINT
=======================================================================
(113-18)
HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MAY 22, 2013
__________
Printed for the use of the
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee, Columbia
Vice Chair JERROLD NADLER, New York
JOHN L. MICA, Florida CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana STEVE COHEN, Tennessee
BOB GIBBS, Ohio ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York JOHN GARAMENDI, California
DANIEL WEBSTER, Florida ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida JANICE HAHN, California
JEFF DENHAM, California RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky DINA TITUS, Nevada
STEVE DAINES, Montana SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
VACANCY
------ 7
Subcommittee on Economic Development, Public Buildings, and Emergency
Management
LOU BARLETTA, Pennsylvania, Chairman
THOMAS E. PETRI, Wisconsin ELEANOR HOLMES NORTON, District of
JOHN L. MICA, Florida Columbia
ERIC A. ``RICK'' CRAWFORD, Arkansas MICHAEL H. MICHAUD, Maine
BLAKE FARENTHOLD, Texas, Vice Chair DONNA F. EDWARDS, Maryland
MARKWAYNE MULLIN, Oklahoma RICHARD M. NOLAN, Minnesota
MARK MEADOWS, North Carolina ANN KIRKPATRICK, Arizona
SCOTT PERRY, Pennsylvania DINA TITUS, Nevada
VACANCY TIMOTHY J. WALZ, Minnesota
BILL SHUSTER, Pennsylvania (Ex NICK J. RAHALL, II, West Virginia
Officio) (Ex Officio)
CONTENTS
Page
Summary of Subject Matter........................................ iv
TESTIMONY
Dorothy Robyn, Commissioner, Public Buildings Service, U.S.
General Services Administration................................ 5
E.J. Holland, Jr., Assistant Secretary for Administration, U.S.
Department of Health and Human Services........................ 5
Jeffery Orner, Chief Readiness Support Officer and Agency Senior
Real Property Officer, U.S. Department of Homeland Security.... 5
R. William Borchardt, Executive Director for Operations, U.S.
Nuclear Regulatory Commission.................................. 5
PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE RECORD SUBMITTED
BY WITNESSES
Dorothy Robyn:
Prepared statement........................................... 38
Answers to questions from the following Representatives:
Hon. Lou Barletta, of Pennsylvania, and Hon. Eleanor
Holmes Norton, of the District of Columbia............. 46
Hon. John L. Mica, of Florida............................ 48
E.J. Holland, Jr.:
Prepared statement........................................... 51
Answers to questions from the following Representatives:
Hon. Lou Barletta, of Pennsylvania, and Hon. Eleanor
Holmes Norton, of the District of Columbia............. 57
Hon. Donna F. Edwards, of Maryland....................... 58
Jeffery Orner:
Prepared statement........................................... 60
Answers to questions from Hon. Donna F. Edwards, of Maryland. 64
R. William Borchardt:
Prepared statement........................................... 67
Answers to questions from the following Representatives:
Hon. Lou Barletta, of Pennsylvania, and Hon. Eleanor
Holmes Norton, of the District of Columbia............. 73
Hon. Donna F. Edwards, of Maryland....................... 74
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[GRAPHIC] [TIFF OMITTED] 81150.005
SAVING TAXPAYER DOLLARS: FREEZING THE FEDERAL REAL ESTATE FOOTPRINT
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WEDNESDAY, MAY 22, 2013
House of Representatives,
Subcommittee on Economic Development, Public
Buildings, and Emergency Management,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:07 a.m., in
Room 2167, Rayburn House Office Building, Hon. Lou Barletta
(Chairman of the subcommittee) presiding.
Mr. Barletta. Before we begin the hearing today, I would
like to take a moment to say our thoughts and prayers are with
the people and communities devastated by the recent tornadoes.
In Moore, Oklahoma, the tornado left destruction of a mile wide
and 20 miles long. Schools and homes were flattened,
communities destroyed, incredible and unimaginable devastation.
But much more devastating and heartwrenching than that is that
many more people lost their lives, including many children.
Having walked through and spoken with survivors of previous
disasters, including those in my home district in Pennsylvania
following Irene and Lee, the pain the residents are enduring is
incredible and often unbearable. Losing loved ones, losing
their homes, and possessions, heirlooms, memories.
As the chairman of the subcommittee that oversees FEMA, we
will do our part in monitoring the Federal response and
ultimately the rebuilding as families try and put their lives
back together. FEMA has declared a major disaster for Oklahoma
and Federal, State and local first responders continue to work
around the clock. And we will work with Representative Mullin
of our subcommittee and our Members representing districts in
Oklahoma. Obviously we know some things are irreplaceable. But
what we can do is support those communities devastated and help
communities rebuild. If any Members need to be linked to the
FEMA update or have questions regarding this and other recent
disasters, please let the committee staff know.
The committee will come to order. Before we begin today's
hearing I would like to personally offer my congratulations to
former Acting Commissioner Dan Tangherlini who has now been
named the real full Administrator, Commissioner, and we wish
him well. With that being said, hopefully we can get this
problem resolved and get off on the right foot.
The purpose of today's hearing is to review the
administration's efforts to freeze the footprint of Federal
office space and to explore how Congress can help save billions
of taxpayer dollars on Federal real estate. The President's
efforts began to take shape in 2010. The administration issued
a Presidential memorandum to save billions of dollars in real
estate activities.
In March 2013, OMB issued another directive requiring
agencies to freeze their real estate footprints and offset any
increases with decreases in their inventory. Over the last
several years, the committee has made an aggressive effort to
cut GSA's lease cost as well. The committee shrunk the size of
lease renewals, required more Federal workers and less space
and froze rental rates.
The committee's actions have been bipartisan and together
we have saved almost a billion taxpayer dollars on prospectus
level leases in the last 2\1/2\ years. It has been difficult
and somewhat painful to achieve these savings for three basic
reasons; one, most of the lease requests before the committee
in 2010 were based on workforce projections and utilization
standards that predated the financial crisis. In other words,
they were not worth the paper they were written on. Two, many
agencies don't want to adopt the President's new real estate
standards. Three, GSA took far too long to provide the
committee with updated information the committee needed to
authorize them. As a result, it took time to negotiate
reductions with agencies. Fortunately, the committee reached an
agreement with all the agencies except one, the Nuclear
Regulatory Commission. I am pleased a few agencies such as the
Homeland Security Department and the Health and Human Services
Department are proposing to cut their real estate footprint and
adopt stricter utilization rates on their own initiative.
As I see it, we have a unique chance to save billions of
dollars in Federal leasings and here is why: First, both the
President and Congress want to put more people in less space
and save taxpayer money. We all know that doesn't happen too
often. When Democrats, Republicans and the President all agree
and the American people want to see that. Republicans and
Democrats actually agree on spending cuts. How often does that
happen?
Second, huge numbers of GSA leases are expiring in the next
3 years, which creates an easy opportunity to shrink our
footprint. In the National Capital region alone, there are 24
million square feet of leases expiring and most of them have
terrible utilization rates.
Third, we are still in a buyers market, rental rates are
low and good deals can be made for long-term leases. We don't
want to miss this opportunity. We need GSA to more actively
carry out the committee's and the President's goal to shrink
our real estate footprint and save taxpayers money. I know most
agencies don't want to give up office space. It can be hard for
GSA to tell them no. The committee will continue telling
agencies that they have to cut their office space, but GSA must
also deliver that message when agencies come to them with new
requests.
The committee will do its job, and we need you to do yours.
The committee needs prospectuses in a timely fashion. Even
though millions of square feet of leases are expiring soon, GSA
has submitted zero lease prospectuses. The committee needs
information to authorize projects. For example, none of the 39
Government-owned project requests the committee received with
the budget include housing plans. How is the committee supposed
to know if a project will result in a good or bad utilization
rate if we don't have a housing plan? We can't do our job
without this kind of information.
Also, GSA's own building database fails to include the
number of people that work in each building. How is GSA ever
going to improve building utilization rates if it doesn't
collect actual building utilization data? If agencies have
multiple facilities in a location GSA needs to show the
committee how a single leased request fits into that agency's
plan for consolidating its footprint in that region. For
example, the current prospectus to renew the NRC's expiring
lease at its Maryland headquarters is very misleading. The
housing plan clearly states the same number of people will
occupy the building after the lease renewal, yet we know that
is not true, because the NRC has just taken possession of an
even larger leased building across the street.
As a result, the NRC is going in exactly the opposite
direction that the administration mandates. In this budget
climate, smart agencies realize they have to choose between
employee salaries and rent. So they are cutting off office
space. However, NRC doesn't seem to have gotten that memo.
I hope today we can hear from our witnesses on the steps
that they are taking to improve their space utilization and
save taxpayer dollars. I hope we can finally get answers to
resolve the issues related to the NRC's space. I look forward
to our witnesses' testimony.
I now call on the ranking member of the subcommittee, Ms.
Norton, for a brief opening statement.
Ms. Norton. I thank you very much, Mr. Chairman. And first
I want to strongly associate myself with your remarks on the
Oklahoma disaster. We have not had occasion to have hearings
this year or this Congress, but you remind the subcommittee
that it is this subcommittee that has the primary FEMA
jurisdiction, because we have the jurisdiction over natural
disasters and those occur all the time, whereas Homeland
Security has jurisdiction, of course, over terrorist disasters.
So I am hoping, Mr. Chairman, that we can have a
subcommittee hearing soon on Oklahoma and what FEMA is doing
and what needs to be done, especially what needs to be done to
prepare and prevent. It does seem like Oklahoma has moved ahead
of perhaps some other jurisdictions because it is in tornado
alley, as it is called. But I am reminded that we have had
hearings in the last several years, not since you have been
chairman, Mr. Chairman, but on predisaster mitigation where the
Government saves $4 for every dollar invested, it is one of the
best programs of the Federal Government and it has now expired.
So I think Oklahoma will make us want to think again of
predisaster mitigation.
Mr. Chairman, I associate myself as well with your
critiques of where GSA is now. For example, you cleaned up the
backlog that had been bequeathed to you, we now have no 2014
leases? And today, we are going to hear in a hearing that has
been titled ``Freezing the Federal Real Estate Footprint,''
just how much freezing has been done, and hear from several
agencies what the best practices are now for utilization rates,
and whether they reflect the changes that both this committee
and the administration have been pressing now for several
years.
In 2010, as far back as July 2010, the administration
released a memo stating that many of the properties necessary
for the Government's work are not being operated efficiently,
and that they needed to reduce operating costs. Subsequent to
that, in May 2012, another memorandum was issued essentially
saying that the agency should not increase the size of their
real estate inventory unless offset through consolidation,
collocation or disposal of space. The procedures for complying
with the administration memorandum were clarified later in
March 2013 in a memorandum that directed OMB and the GSA to
annually monitor the continuing implementation of this policy.
As part of this process, each agency was to develop and
submit a revised real property cost savings and innovation
plan, and in future years, the annual agency evaluation to
describe the agency's overall approach in managing its real
estate usage and spending.
I must say, Mr. Chairman, that the better approach is the
one we began and has not been completed and that is to remove
these properties from these agencies in the first place. They
don't know anything about property management and we are
creating a bureaucratic mechanism to ensure that they who are
ignorant in this field do what they are supposed to do.
This committee has, last Congress passed a bill and another
committee on which I serve, Oversight and Government Reform,
passed a bill, I think its bill is on its way--at least it is
passed out of committee. I would hope that our committee would
meet with that committee to see if between the two of us we can
get a bill on the floor that would give this mission to,
perhaps, OMB and GSA. I doubt that we are going to create a
whole new agency the way we had initially thought, it wouldn't
have been very large, but it doesn't look like that is in the
cards. Meanwhile we are back to the kind of monitoring we have
been doing all along and the kind of criticisms that we have
had all along.
GSA, of course, has a responsibility to guide these
agencies into making good decisions on what the administration
and the Congress wants done. With the advent--we have long had
issues with how GSA guides these agencies, and I think part of
the problem is the agencies don't pay any attention to GSA,
they are all peer agencies so without some legislation that
sets who has responsibility, we are probably still going to
have that problem as well.
We are seeing increasingly the advent of hoteling,
alternative work schedules, and teleworking, so it is far more
possible today for agencies to have even a smaller footprint
given these technological advances that decrease the need for
workers to be in the office all the time. Correspondingly, the
committee has increasingly authorized less space than agencies
have requested with a special focus on space requests that were
received before the 2012 OMB memorandum. We have watched
private industry in the wake of the great recession downsized
and become more efficient in utilizing space as a result of
economic pressure. And there is an expectation surely that
Federal agencies would likewise meet the challenge of utilizing
office space more efficiently.
Today we are going to hear from a number of agencies
besides GSA since they now are all still involved in this
process, as they discuss how they have approached the
administration and congressional mandate to alter their
utilization rates and dispose of unneeded Federal space. The
committee has made no secret of its concern about the Nuclear
Regulatory Commission, in particular. And so we will be most
interested in how a procurement that was authorized before the
mandate can be reconciled with both a modified narrower mission
for the agency, and a requirement that space utilization be
improved. I looked forward to it the hearing and today's
witnesses. I thank you, Mr. Chairman for calling this hearing.
Mr. Barletta. Thank you, Ranking Member Norton. On our
panel today, we have Dr. Dorothy Robyn, Commissioner, Public
Buildings Service, General Services Administration; Mr. E.J.
Holland, Jr., Assistant Secretary for Administration,
Department of Health and Human Services; Mr. Jeffrey Orner,
chief readiness support officer, Department of Homeland
Security; and Mr. William Borchardt, executive director for
operations, Nuclear Regulatory Commission.
I ask unanimous consent that our witnesses' full statements
be included in the record, without objection so ordered. Since
your written testimony has been made a part of the record, the
subcommittee would request that you limit your oral testimony
to 5 minutes.
Dr. Robyn you may proceed.
TESTIMONY OF DOROTHY ROBYN, COMMISSIONER, PUBLIC BUILDINGS
SERVICE, U.S. GENERAL SERVICES ADMINISTRATION; E.J. HOLLAND,
JR., ASSISTANT SECRETARY FOR ADMINISTRATION, U.S. DEPARTMENT OF
HEALTH AND HUMAN SERVICES; JEFFERY ORNER, CHIEF READINESS
SUPPORT OFFICER AND AGENCY SENIOR REAL PROPERTY OFFICER, U.S.
DEPARTMENT OF HOMELAND SECURITY; AND R. WILLIAM BORCHARDT,
EXECUTIVE DIRECTOR FOR OPERATIONS, U.S. NUCLEAR REGULATORY
COMMISSION
Ms. Robyn. Thank you. Good morning, Chairman Barletta,
Ranking Member Norton, members of the subcommittee. I
appreciate being invited here today to talk about a topic near
and dear to GSA's heart reducing the Federal Government's real
estate footprint. I want to briefly address three topics:
First, the administration's ``Freeze the Footprint''
initiative; second, GSA's action to help Federal agencies
shrink their footprint; and third, GSA's role in disposing of
unneeded properties and the critical need for a civilian BRAC
process.
Your opening statements clearly indicate that you are very
familiar with the administration's 2012 ``Freeze the
Footprint'' policy. And you will hear more about what my
colleagues are doing to achieve that. So I am going to skip
over the description of that, and just say that GSA has been
given a central role in helping to monitor an agency's
compliance with that, and to help them meet that. The
information on how agencies are going to achieve it and how
they are doing will, in time, be available on OMB's Web site,
www.performance.gov, so it can be the aggregate numbers
information on specific projects, so it will be directly
trackable.
Although GSA directly manages only about 375 million of the
nearly 3 billion square feet of space under the Federal
Government's control we do have the statutory authority to
acquire, manage, utilize, and dispose of real property for most
Federal agencies, thus, we are well positioned to drive change
in this area. And in fact, we have been actively working to do
so, and as one illustration in our prospectus level lease
program in fiscal year 2013, we and our partner Federal
agencies reduce our space needs from a proposed requirement of
3.4 million square feet to about 3.1 million square feet, so a
reduction of 10 percent in line with the numbers that you were
citing, Mr. Chairman.
Now, as you will hear from my colleagues, a major focus of
our efforts is on transforming the physical design and the
layout of the workplace in line with what is going on in the
private sector. Many of today's Federal work spaces were
designed for a time when the Government processed and stored
large amounts of paper and completed daily tasks in very
regimented and predictable ways. With today's increasingly
mobile and flexible employees, agencies can get by with far
less space, if that space is appropriately configured. Toward
that end, we are working with agencies to implement innovative
workplace strategies including rightsizing of individual
spaces, hoteling, open floor plan design, and desk sharing. At
the same time, we are supporting telework policy and training
while providing the technology support to encourage mobility.
Over the long term, these practices hold great promise for
enabling the Federal Government to carry out its functions with
much less office space per Federal employee. This is a very,
very promising development.
One obstacle, a major obstacle to us achieving this vision
more quickly is the need for upfront funding to reconfigure
space. We have doubled the number of people occupying GSA's
headquarters at 1800 F, and in fact, we will triple it when we
get to phase 2 of our renovation. But we have been able to do
that because we had ARRA funding to renovate the space and to
reconfigure it for an open office plan design.
The President's 2014 budget includes $100 million
specifically for us to work with other agencies to reconfigure
and renovate GSA-owned space in support of that kind of
improved utilization. We are also, of course, requesting
funding for a number of individual specific projects that are
large repair and alteration projects that are designed to
renovate buildings so as to allow Federal agencies to
consolidate their space needs and collocate with other Federal
agencies and to move out of costly leases and into federally
owned space. In addition to shrinking our footprint in leased
space, we want to get agencies out of leased space all together
and into federally owned space.
Our role in freezing the Federal Government's footprint
starts with the space we occupy ourselves. We will not only
meet but exceed the ``Freeze the Footprint'' requirement by
shrinking the amount of office and warehouse inventory that GSA
itself occupies by 15 percent by 2015. And a lot of that is a
result of the transformation of our headquarters and our
ability to move several thousand GSA employees out of leased
space and into our headquarters building.
Finally, let me touch on property disposal which is key to
any effort to shrink the Federal footprint. We are the primary
real estate disposal agent for the Federal Government, we have
long worked aggressively to identify and target unneeded assets
for disposal. We just, last week, sold a 427-acre portion of
the former Twin Cities ordinance plant in Arden Hills,
Minnesota, on behalf of the Department of the Army. This
negotiated sale was worth $28 million in direct benefits to the
Federal Government. It eliminated 110 buildings and 1.7 million
square feet of space from the Federal inventory which would
allow the Army to avoid significant future operations and
maintenance costs.
Despite these and other success stories at property
disposal, Federal agencies face major challenges in doing this.
As GAO has repeatedly pointed out in reports that this
committee has commissioned, these challenges include the high
upfront costs to prepare property for disposal, various legal
requirements which contribute to these costs, and perhaps most
important, resistance from various stakeholder groups to be the
disposal of individual properties.
Mr. Chairman, we need a civilian BRAC process to help us
address these challenges. The Department of Defense's BRAC
process has helped DOD overcome these barriers resulting in
enormous savings to DOD in the Federal Government. The first
four rounds of BRAC 1988 to 1995 are producing $8 billion in
annual recurring savings. The comparable figure for BRAC 2005
in a couple of years will be $4 billion, that is a total of
$100 billion in savings to date to the Department of Defense
and every year DOD avoids $12 billion in annual costs, every
year, as far as, you know, looking out to the future, they will
avoid those costs every year. That is equivalent to what the
Department would spend to buy 300 Apache attack helicopters, or
4 Virginia class submarines.
We need that tool on the civilian side as well. President
Obama proposed a civilian BRAC mechanism in 2011, the
administration reiterated its support for the proposal in the
2014 budget. We want to work with Congress to develop this or a
similar proposal that addresses these ongoing challenges. Thank
you.
Mr. Barletta. Thank you.
And Representative Denham actually has a civilian property
realignment bill and we would certainly appreciate your support
as we move that bill forward. Thank you for your testimony. Mr.
Holland you may proceed.
Mr. Holland. Thank you, Chairman Barletta and Ranking
Member Norton. My name is E.J. Holland, Jr., most people call
me Ned, and I am the Assistant Secretary for Administration at
the Department of Health and Human Services. Under the
leadership of Secretary Kathleen Sebelius, HHS is committed to
saving taxpayer dollars through effective management of our
real property assets, improving our utilization through reduced
space requirements, and pursuing alternative workplace
strategies that increase our utilization rates and reduce our
costs.
HHS currently has over 4,100 real property assets, fewer
than 1,000 of which are leased. The majority of our leased
assets are acquired through the General Services
Administration, and we work with GSA closely in acquiring
leases to ensure that we deliver the most efficient and cost
efficient space to meet our mission requirements.
Most of our real property portfolio falls into three major
categories: offices are about 36 percent, laboratories are
about 33 percent and hospitals and clinics are about 15
percent. Over 15 million gross square feet, or about 71 percent
of our leased inventory is, in fact, office space.
After President Obama issued his June 2010 memorandum
``Disposing of Unneeded Real Estate,'' we accelerated our
records to improve utilization of our existing assets. That
resulted in identified savings and cost avoidance of over $23
million between fiscal year 2010 and fiscal year 2012 through
energy savings, disposals, consolidations and improved
utilization. In the fall of 2010, we initiated working sessions
among our operating divisions to develop strategies to improve
office utilization. In addition, working with GSA we identified
prospectus lease requirements anticipated through 2014 and
projected their impacts on our real property portfolio.
In May 2011, I issued an office utilization rate policy
that reduced authorized usable square feet per person to an
average of 170, including office and office support space, and
pro rata share of any joint use space. This policy replaced the
previous situation of over 215 usable square feet per person.
Even before we formally issued our 170-square-foot utilization
policy, we began looking at opportunities within existing
projects to improve space utilization. One specific opportunity
we explored in early fiscal year 2011 was the Parklawn
replacement lease in Rockville, Maryland. The replacement lease
originally was planned for 2,828 occupants in 772,553 usable
square feet, for a calculated utilization rate of 273.
After re-examination and consultation with the Secretary,
we made the decision to consolidate three of our agencies along
with the fourth that was already there into the Parklawn
replacement lease. The current planned facility will house
4,517 people in 823,924 usable square feet for a calculated
utilization of 182. Over the term of that lease, the Department
expects to save in excess of $215 million in rent costs
associated with the consolidation of the four operating
divisions.
In April 2011, HHS agreed to work with GSA's Office of
Client Solutions as part of their proposed Client Portfolio
Planning initiative aimed at working with agencies to find
long-term cost savings. We became one of the pilot agencies and
the initial plan focused on reaching the President's goal of $3
billion in savings by end of fiscal year 2012.
GSA worked with our Department to optimize our real estate
footprint. In addition to savings that we had already
identified, GSA looked for targeted opportunities for potential
additional savings in managing our portfolio. The original plan
identified roughly eight opportunities by September of 2012,
six of those, in fact, were implemented or complete.
We are now working with GSA to develop a long-term plan
that aligns our National Capital region real estate portfolio
with leadership's long-range business goals. The plan will
change the Department's approach to real estate from a
transactional model that manages each separate asset
individually to one that takes into account Departmentwide
planning and goals. We will evaluate potential strategies for
consolidation and lease replacement in order to increase
overall efficiencies and utilization of space.
We are committed to generating savings for the taxpayers
through better utilization of our real property assets. We
continue to work with our operating divisions and with GSA to
identify opportunities for improved efficiencies in our leased
portfolio, whether through consolidations, improved utilization
costs, or innovative workplace solutions like the chairman and
the ranking member mentioned.
This effort requires Departmentwide cooperation and the
accomplishments we achieved to date are the product of that
cooperation. I appreciate the opportunity to appear before you
this morning, Mr. Chairman, and I welcome your questions.
Mr. Barletta. Thank you for your testimony, Mr. Holland.
Mr. Orner, you may proceed.
Mr. Orner. Thank you, Chairman Barletta, Ranking Member
Norton, and members of the subcommittee for the opportunity to
testify. I am DHS's chief readiness support officer and senior
real property officer, a career civil servant with 31 years of
experience in the Federal Government.
DHS's real property portfolio includes 38,000 properties
nationwide, half of our real property footprint is DHS-owned
and remainder is leased either through GSA or directly from the
private sector. Additionally half of our real property is
operational mission space or personnel housing, and the
remainder is predominantly office space and warehouses. The
United States Coast Guard and Customs and Border Protection are
responsible for 90 percent of DHS real property assets.
In support of our frontline mission, DHS has made great
strides in the management of our real property portfolio, and
we are committed to the foundational principles of real estate
property management. The right facility, at the right location,
at the right cost to support our operational mission. To
control costs and support our frontline operators and their
mission, one key approach we have taken is to improve our use
of space. We have improved our space utilization by partnering
with GSA's workplace solutions group, and together with our GSA
partners, we have conducted a detailed space use assessment
followed by introduction of flexible workplace strategies.
We introduce concepts of leading-edge workplace designs
that resulted in higher space utilization, including supporting
a mobile workforce strategy, hoteling and collaboration space.
We conducted a pilot redesign in my own office using these
concepts. The redesign cut the amount of office space by over
50 percent leading to a cost avoidance of approximately $1
million annually, and taking us to an average of 100 square
feet per person. Despite that very aggressive space reduction,
it is a very open space that is pleasant to work in.
DHS is now managing numerous flexible workplace design
projects in the National Capital region due to density and cost
of general office space in this metropolitan area. And this
approach will improve our Department's efforts in consolidating
our headquarters' footprint.
I would be remiss if I did not mention the DHS headquarters
projects at St. Elizabeths for which we thank this committee
for its support over the years. As evidenced by the President's
fiscal year 2014 budget submission, the administration, DHS,
and GSA remain committed to collocating the Department's
operation coordination functions, executive leadership and
policymaking functions into that secure campus. We continue to
work with GSA to plan and execute the St. Elizabeths vision in
order to achieve the overall goals and objectives at the lowest
possible cost to the taxpayers.
As such we are developing approaches to further reduce our
real property costs by using flexible workplace strategies at
the St. Elizabeths campus, and that should enable DHS to
further reduce our remaining National Capital property
portfolio.
Last week, the DHS CFO and I submitted the DHS real
property cost savings and innovation plan to OMB and GSA in
response to the ``Freeze the Footprint'' policy. This plan was
developed by a team comprised of representatives from DHS
headquarters and each of our operating components. I am excited
about our response, because it illustrates a real commitment to
rightsizing office and warehouse space, it highlights our
strategy for consolidation and reduction, and it defines our
initial focus over the next 3 years.
It also outlines longer term efficiency initiative expected
to produce an even greater reduction over the next 6 to 7
years, including reducing our average square foot of office
space per person from 200 to below 150.
To guide our components in implementing this policy, this
week we signed a detailed new DHS workplace standard which
provides our components with detailed how to on implementation
on our ``Freeze the Footprint'' goals.
In closing, DHS looks forward to achieving milestones of
improved business processes and implementation of innovative
concepts such as flexible workplace strategies. Our goal is it
to support this Department's mission needs at the lowest
achievable cost. I very much appreciate the opportunity to
testify before you today and I look forward to answering your
questions, thank you.
Mr. Barletta. Thank you for your testimony, Mr. Orner.
Mr. Borchardt, you may proceed.
Mr. Borchardt. Chairman Barletta, Ranking Member Norton,
members of the subcommittee good morning. And thank you for the
opportunity to discuss the Nuclear Regulatory Commission's
efforts to reduce office space consistent with the Federal
``Freeze the Footprint'' policy.
The Nuclear Regulatory Commission's mission is to license
and regulate the Nation's civilian use of byproduct, source and
special nuclear materials to ensure adequate protection of the
public health and safety, promote the common defense and
security, and protect the environment.
The NRC was created in 1975 and initially occupied 11
buildings throughout the Washington, DC, and Maryland area. The
1979, Three Mile Island nuclear accident revealed numerous
lessons for the industry and the NRC. One of the major findings
was the need to centralize NRC's headquarter's staff to
maintain our operational efficiency, regulatory effectiveness
and emergency response capability.
NRC's initial consolidation of its headquarters began in
1986 with the General Services Administration's acquisition of
One White Flint in Rockville, Maryland. At the time, GSA and
NRC contracted for the construction and lease of the Two White
Flint North buildings for purposes of housing the remainder of
the NRC headquarters employees on one campus. The buildings
were constructed with above and below ground connectors and
since 9/11, share the common access and egress for protection.
The passage of the Energy policy Act of 2005 stimulated a
nuclear power resurgence with a considerable increase in the
number of applications for U.S. nuclear power plants. This had
an immediate and dramatic impact on our workload, and in
response, our staff increased from approximately 3,000 to 4,000
employees. With the growth of the NRC, the agency leased
temporary space in four buildings in the Bethesda-Rockville
area, and at the same time, pursued the construction of a third
building at our headquarters location to maintain a
consolidated workforce.
In December of 2007, the President signed legislation
appropriating funds for the NRC to obtain this additional
office space in order to maintain NRC's efficiency and
emergency response capability. GSA signed the lease for the
Three White Flint North building in October of 2009.
Over the last 2 or 3 years, moderating demand for
electricity and the low price of natural gas has caused the
Nation's nuclear plant operators to delay or defer a number of
applications for new plants. In response, our need for
additional staff abated, and in fact, declined slightly so that
we now have approximately 3,800 employees.
During the same time the Federal Government instituted new
guidelines for Federal real estate. Both of these realities
have had an impact on our space requirements. Soon after
arriving at the NRC in the summer of 2012, Chairman Macfarlane
became aware of the office space issues, including concerns
from this subcommittee regarding the renewal lease prospectus
for the Two White Flint building. She chartered a task force of
senior staff to look closely at our office space and cost
estimates. The task force re-baselined NRC space requirements
and is now working to achieve a cost-effective footprint
reduction.
The NRC is committed to ensuring that the agency's
footprint is appropriate to fulfill our safety mission and
consistent with the administration's space utilization
policies. Chairman Macfarlane and the GSA Administrator have
met and created teams that have worked jointly over the last 5
months to present an updated recommendation to this committee.
NRC and GSA have been working intensively to develop a solution
designed to address the issues identified by the subcommittee.
The NRC/GSA housing analysis concludes that even with a
reduced utilization rate the NRC needs approximately 2\1/2\
buildings to perform its functions. The optimal approach for
meeting this need is to retain Two White Flint North in its
entirety, and for the NRC to relinquish several floors in the
new Three White Flint facility. NRC's preferred path forward is
consistent with the ``Freeze the Footprint'' policy and
achieves office space targets set forth in OMB guidelines. The
NRC/GSA plan is consistent with the NRC's goals to consolidate
our headquarters staff into one campus, to facilitate our
mission, and to provide effective working conditions for the
agency's professional engineering and scientific workforce.
In closing, I want to reiterate NRC's commitment to being
responsive to the ``Freeze the Footprint'' initiative as well
as our changing space needs and the subcommittee's interest in
rightsizing in a cost-effective and timely manner. We will
continue to work with GSA, OMB and the Congress to accomplish
these objectives and to address these issues fully and
transparently. We look forward to working with this committee
on this important matter. I would be happy to answer any
questions, thank you.
Mr. Barletta. Thank you for your testimony.
I think it would be helpful for the committee to hear a
little more about the current situation with the Nuclear
Regulatory Commission and how we got there. For a variety of
reasons in 2006, the NRC believed its personnel were going to
increase. The NRC went to GSA, and with OMB approval, the GSA
submitted a prospectus to this committee in 2007. The
prospectus requested authority to lease an additional 120,000
square feet of office space at a maximum cost of $38 million,
or $32 per foot for 10 years. The committee authorized the
prospectus shortly thereafter. However, rather than abide by
the committee authorization, the NRC leased a couple satellite
locations and a custom building three times as large, and 10
times as expensive as the committee authorized. The building
was constructed across the street from NRC's headquarters, and
was finished just last year.
Although the building is mostly vacant, the NRC has been
paying rent since December. On the left-hand side of the first
slide, you can see the committee authorized 120,000 square feet
of space for $38 million. On the right, you can see what the
NRC spent, 443,000 square feet for $400 million. On the second
slide, you can see how the NRC's office space grew from 785,000
square feet in 2007, to over 1.2 million square feet of space
in 2013. That is a 53-percent increase.
Over the same time period, the NRC's staff level actually
dropped from 3,340 to 3,250 people. As a result, the NRC's
utilization rate went from 195 usable square feet per person in
2007 to 322 square feet today. As a point of reference HHS's
policy is to house people at 170 square feet per person and the
National Labor Relations Board which consists almost entirely
of attorneys in private offices is at 200 feet per person.
The next slide shows the actual number of workstations in
the NRC headquarters buildings today. On the right is the
actual number of people, including contractors that work in
those buildings. The American taxpayer is paying rent to house
1,800 empty workstations. By almost any measure, the NRC has
far more office space than it needs and millions of dollars of
taxpayer money are being wasted.
In addition, about 1,600 of those workstations are located
in a building where the lease expires at the end of the year.
Yet despite the empty space and clear directives from the
President, the NRC wants the committee to authorize a sole
source renewal of this lease at a cost of $177 million. The
question before the committee today is how much office space,
if any, should the committee authorize for the NRC?
I will now begin our first round of questions and we are
going to limit each Member to 5 minutes.
Mr. Borchardt, how much space specifically--before I go
there, as you have heard, agencies across the Government are
improving their utilization rates and cutting office space as
per the President's request, and as the request of both
Democrats and Republicans on this committee. So with that being
said first, how much space specifically does NRC need?
Mr. Borchardt. Mr. Chairman, we agree what the current
satellite offices that we have leased.
Mr. Barletta. Can you put your microphone on?
Mr. Borchardt. It is on.
Mr. Barletta. Maybe if you could pull the mic up closer, it
is hard to hear.
Mr. Borchardt. As you mentioned, in 2005 we had the Energy
Policy Act that generated a renewed interest in nuclear power
in this country. We had applications projected for--over 30
applications for new nuclear power plants as well as numerous
facilities in the rest of the nuclear fuel cycle. That caused
our projected staffing to increase agencywide from
approximately 3,000 to almost 4,000 people. As a result of the
economy and as a result of the price of natural gas, those
applications have declined significantly. As we staffed up in
the 2005 to 2008 time period, we found it necessary to lease
space and satellite offices that are within 3 miles of the
current NRC complex.
Right now, we have already vacated one of those facilities,
we have just transferred the staff from a second facility into
the new office space. But we agree that the NRC does not need,
based upon our current best estimate of the workload and the
staffing requirements, all of the office space for all three of
the buildings in the White Flint campus. Our suggestion, and I
believe our best plan is for us to retain One White Flint and
Two White Flint in its entirety and then give up approximately
half----
Mr. Barletta. What is your target utilization rate?
Mr. Borchardt. The target for the plan that we had would be
128 square feet per employee after we give up about half of the
new building.
Mr. Barletta. Your utilization rate.
Mr. Borchardt. Yeah, I think that is--that is after we give
it up, after we give up and terminate the lease on all the
satellite offices, it would be 128.
Mr. Barletta. If you keep all three buildings, it will be
275.
Mr. Borchardt. I can't verify that one way or the other,
but it wouldn't be--we don't see a basis or need to keep all
three.
Mr. Barletta. We can, we can. It will be 275. In 2007, it
was 195, and 2012 it was 231, and now it is at 322. We think
the utilization rate should be closer to 200. So what is your
target utilization rate? You are at 322 now, if you keep three
buildings, it's 275.
Mr. Borchardt. If we--I think--I can't dispute the number
that you have, but we are not proposing that we keep all three
buildings in its entirety. We think Two White Flint, the
facility that is up for lease renewal in December of this
year----
Mr. Barletta. Yeah. The all in utilization rate, what is
the all in utilization rate?
Mr. Borchardt. 215.
Mr. Barletta. You state that NRC's preferred path forward
is consistent with the ``Freeze the Footprint'' policy and
achieves targets for space utilization set forth in OMB
guidelines. What exactly is the new plan and has it been
approved by OMB?
Mr. Borchardt. It is under review by OMB now. There are
several scenarios that are being developed. Our preferred
approach because of the special use facilities in the Two White
Flint campus or Two White Flint building because it has certain
rooms for the advisory committee, we have the safeguards which
is mandated by law, as well as the hearing board, as well as
some other facilities in that room, would need to retain all of
One White Flint, all of Two White Flint and to give up, as I
said, approximately half of the new building, the Three White
Flint preferably to another Federal agency.
Mr. Barletta. Who would pay more to move in there?
Mr. Borchardt. I don't know what the arrangements would be.
I would have to defer to GSA on how the financial arrangements
would----
Mr. Barletta. We have been asking NRC repeated for this
plan, why haven't we receive it? And when will we receive it?
Mr. Borchardt. I believe we are working through GSA and
OMB. And I think we have--we are in that process. I would ask
GSA if they had anything to add.
Mr. Barletta. And do you expect that this committee will
approve its prospective while it's seeking a new plan?
Mr. Borchardt. I can't answer that.
Mr. Barletta. Mr. Borchardt, the NRC has spent a
significant amount of funds customizing Three White Flint for
its needs, more than $90 million in tenant improvements. Now
the taxpayers are locked into paying for that space for at
least 15 years, costing $350 million total over the term of the
lease. Why would the NRC just walk away from that and can you
explain how your proposal will save the taxpayers money?
Mr. Borchardt. Well, Mr. Chairman, I think we need to
remember that at the time the decision was made to build Three
White Flint and then to make the decisions regarding its build-
out and how it was to be constructed, at that time in the 2007,
2008 timeframe, we were in a period where as I had mentioned in
my oral testimony there was a great deal of enthusiasm for new
construction of plants and other facilities in the nuclear fuel
cycle. We projected NRC growth to be--go in excess of 4,000
staff members total. That reality has, in fact, changed. So
what was a good decision, I believe, in 2008 is no longer the
decision we would make today. Given that reality, we think
Three White Flint is a high-quality building and would be a
desirable location for many other Federal agencies. I think the
cost associated with moving the special facilities out of Two
White Flint would--do not appear to me, anyway, to make good
financial sense, so that is why we prefer to keep Two White
Flint in its current situation and to give up part of Three
White Flint to another agency.
Mr. Barletta. Mr. Borchardt, I understand what you are
saying, there is a lot of things that we prefer. And you know,
Democrats and Republicans many times argue over cutting food
programs versus education and make all those tough decisions
all the time, and there are legitimate arguments on both sides.
I find it very hard to accept the fact that we could try to
convince the American people that we actually need more space
for less people because we prefer that option.
At the same time there are so many needy programs that we
are trying to save money to, and to have a Federal agency, it
is very hard. This is like a softball for us, really. It is
very hard to have an agency try to convince us that we prefer
this, this will be better for us. At the same time you have
less people today than you did in 2007, disregarded the
committee's, what the subcommittee authorized in 2007, went
ahead instead of $38 million, we are talking about $440
million. I am just going to say, I really think you have a real
tough argument here today, and----
Mr. Borchardt. If I can, Mr. Chairman, I would say that the
headquarters staff is approximately 250 people more today than
it was in 2007.
Mr. Barletta. But there are actually less employees today
than you had in 2007.
Mr. Borchardt. No, sir.
Mr. Barletta. I believe that you do.
Mr. Borchardt. I think in 2007, headquarters staff I
believe we had 2,652. Today we have somewhere around--well at
the end of 2012 we have 2,913.
Mr. Barletta. Yeah.
Mr. Borchardt. I think the other point I would like to make
is that, as I know you are familiar, we were in four temporary
locations in the headquarters offices. As I mentioned, we have
already terminated one of those leases. We are in the process,
in fact, we have moved an entire office of approximately 200
people from a second building into the Three White Flint
building, and we will be terminating that lease. It is our
desire to be able to terminate the other two satellite offices
buildings completely when we can have the decisions regarding
the lease on Two White Flint and the final configuration of
Three White Flint.
Mr. Barletta. Thank you. We will come back for another
round of questions. I now recognize the ranking member, Ms.
Norton.
Ms. Norton. Thank you very much, Mr. Chairman.
You know, Dr. Robyn, one of the problems I see here is this
agency seems to be doing its own housing plan. You know, if you
let an agency do what they have done, first of all, they
completely ignore what has been authorized by this committee,
so they simply go to their appropriators, to somebody else, and
they end up in one of the highest lease, highest rents, highest
cost parts of the region, where it is GSA's job to keep that
from happening with all this discussion. And all of it comes
from NRC. You know, we have absolutely no confidence in NRC on
this issue, in part because that is not their business. It is
your business. So I have to ask you, is there a long-term
housing plan that GSA is working on for NRC?
Ms. Robyn. First of all, let me say I would agree with the
first part of your statement that this is a situation that
occurred because NRC went to the appropriators.
Ms. Norton. Completely berserk, you know. They are playing
with the taxpayers' money.
Ms. Robyn. We ran the procurement because it was--they did
get----
Ms. Norton. Did they at least consult with you before they
go out and have another brand new space?
Ms. Robyn. Well, no, once the appropriation language was
law, I am told our folks consulted with our lawyers. They said
it is----
Ms. Norton. But they didn't consult with you ahead of time?
Ms. Robyn. I don't believe so, no. I think they were not
happy with, I think--I have talked to our staff about the
history of this. I wasn't there at the time. I think they----
Ms. Norton. So they are paying above the rental cap now?
Ms. Robyn. Well, yes. I think we did a procurement. The
procurement that we did, we proposed, as the chairman
described, our prospectus, which this committee approved very
quickly, 120,000 square feet, and the delineated area was, I
believe, within 2 miles of the NRC's campus. Going out that far
means you get a fair amount of competition and you can drive
down the rates, and in fact we typically have a maximum, we
have a rate cap for the----
Ms. Norton. But they are above the rate cap?
Ms. Robyn. Yes, because the language allowed that to do
that. So when we did the procurement, it was a very, very
narrowly defined procurement, and it resulted in a building
that is right at White Flint.
Ms. Norton. How often does an agency rent above the rent
cap?
Ms. Robyn. In any GSA lease that does not happen.
Ms. Norton. That is right, and this was not a GSA. But it
is up to GSA to do something about it.
Ms. Robyn. But that said, so the history, I don't like the
history. This is----
Ms. Norton. All right, let's go forward.
Ms. Robyn. But going forward, we are----
Ms. Norton. Go forward. Because, you know, they give me all
that happened before as well. You know, we thought we were
going to be big, we turned out to be small, and we still want
to renew a lease to be almost as big. And they say, they who
are not real estate people, they say, oh, we have got a plan.
What do I care about their plan? They are nuclear people. You
come to me and talk about nuclear stuff, I will listen to you.
I am going to talk to Dr. Robyn. They have got a plan. And
their plan is they want to renew a lease that is expiring,
which would seem to give us an opportunity to correct this
mess. And these non-real estate agents tell us what they want
to do is to move another Federal agency into this expensive
property, and they don't tell us who will pay for the delta
that would exist on the rental cap, which you would never have
allowed if this had gone through GSA in the ordinary course or
if this committee had been given the opportunity that the law
requires it be given.
So you tell me about their plan. Is their plan feasible?
Ms. Robyn. And let me say, they will pay the delta if we--
--
Ms. Norton. Do you understand you would pay the delta?
Ms. Robyn. Yes. No, they will do it. No other agency.
Ms. Norton. Do you understand that your plan would still
leave you paying for the delta if a new agency moved in there
because that new agency could only move in there compliant with
the rental cap?
Mr. Borchardt. That is consistent with the discussions we
have had with GSA.
Ms. Norton. So you are prepared to take that on? That
extra, that extra amount in your own budget?
Mr. Borchardt. I am not sure of the details myself.
Ms. Norton. Well, you need to be sure of them before you
come in with a plan to let this lease expire. And you say you
have no authority to rent out part of the building, to rent out
the other part of the building. So you see why I have to just
scrap that and pay no attention to it and ask Dr. Robyn, we
need a housing plan.
Ms. Robyn. Yeah. And we are working closely with NRC and
OMB to evaluate different options.
Ms. Norton. So do you support renewing the lease at this
time on the second building, Two White Flint?
Ms. Robyn. Leaving aside how we got to this situation----
Ms. Norton. Please leave that aside. I have asked you a
direct question.
Ms. Robyn. In an ideal world----
Ms. Norton. They want to let a lease expire. Do you support
letting that lease expire or not?
Ms. Robyn. They want to hang on to Two White Flint Mall.
The NRC campus.
Ms. Norton. I mean, they want to--sorry--renew the lease.
Ms. Robyn. Yes, yes.
Ms. Norton. They want to renew the lease. Do you support
renewing the lease on Two White Flint?
Ms. Robyn. I have to explain a little bit. It is not a
simple answer.
Ms. Norton. OK.
Ms. Robyn. We own White Flint Mall, we own One White Flint
Mall. We lease Two White Flint Mall. We had a purchase option.
We should own that building. We should not get in a situation
where we are leasing a building that is joined at the hip with
another Federal office building like this one is.
Ms. Norton. Did you ask the administration for authority to
buy the building?
Ms. Robyn. I think this is our----
Ms. Norton. Hasn't the owner said he is not interested in
selling the building?
All right. So let's move on to what you are really going to
do.
Ms. Robyn. I think we had a purchase option and I think
when the time came to exercise it, we did not have the money,
and I don't know whether that was us or NRC, we traded that----
Ms. Norton. Just a moment. Dr. Robyn, I am told GSA sold
the purchase option.
Ms. Robyn. Yes.
Ms. Norton. So why are you talking about the purchase
option?
Ms. Robyn. Well, I was giving you the history of why I
think--we traded it for buffer land from the lessor, but I
point to that----
Ms. Norton. All right. So why are you talking about owning
the building?
Ms. Robyn. Because I still think that is the ideal outcome.
Ms. Norton. You know, this is----
Ms. Robyn. We are the Federal Government, we should have
leverage with lessors, and one source of leverage is entirely
vacating the building.
Ms. Norton. You know what? You are going around in circles.
Dr. Robyn, we have a letter, the building owner says he is not
interested in selling the building. Now, you are telling me,
and you see why we have no confidence in NRC because they are
in a business that is not their own, but we are supposed to
have some confidence in you. But you tell us that we should own
that building, knowing full well----
Ms. Robyn. Ideally.
Ms. Norton [continuing]. That the owner says he is not
going to sell that building. What am I supposed to do with that
statement?
Ms. Robyn. This can be seen as a negotiation, and this is
not an unusual situation. I think we are prepared to----
Ms. Norton. So you therefore support, you support the
renewal of the lease?
Ms. Robyn. That would be the ideal circumstance----
Ms. Norton. What is there about that building that is so
important that it has to be renewed for another 15 years?
Ms. Robyn. Well, and again, not at any price do I think we
should renew that lease. Not at any price. It comes down to
cost. It is joined at the hip with One White Flint Mall as a
result of various security measures, and Dr. Borchardt can talk
about that more, better than I can, but it is--there are
tunnels and security linkages and access interconnections that
make it----
Ms. Norton. Mr. Chairman, I am going to go on to one more
question. Once again GSA, which should be holding the cards, is
over a barrel. Obvious this owner knows he has got them over a
barrel, NRC has them over a barrel. They don't have a plan.
They have no plan. They can't come in here today and say that
they are for renewing the lease because they are in
negotiations with the Lerner Group, who know how to bargain.
And therefore this committee is faced with what should be put
on an indefinite hold, and that is the notion that somehow
pending your negotiations we should allow a renewal of a lease
for 15 years that should not have occurred in the first place.
I have a final question here to GSA. In this city GSA is
building and it is about to open the Coast Guard building. That
leaves you with an empty Coast Guard building, and you are
going to owe on that building empty. We calculated it is
something like a $60 million loss to the taxpayer with respect
to the remaining lease when the Coast Guard moves out and they
may move out as early as August. What have you done to mitigate
that liability? The chairman showed you that we are paying on
an empty building or much of an empty building in White Flint.
In August are we going to be paying for an empty building that
the Coast Guard, at Buzzard Point, that the Coast Guard shall
have moved out of?
Ms. Robyn. Are you talking about Transpoint or----
Ms. Norton. Buzzard Point Coast Guard building.
Ms. Robyn [continuing]. Jemal Riverside? We are planning to
exercise our termination rights under the lease agreement on
the Transpoint Building for a variety of reasons.
Ms. Norton. I am asking you about the $60 million. How are
you mitigating the $60 million cost to the taxpayers? In other
words, what you are telling this committee, we are going to
leave it empty?
Ms. Robyn. No. Well, I am not sure what building, whether
we are talking about----
Ms. Norton. The Transpoint Building.
Ms. Robyn. Can I ask Mr. Orner to clarify which building we
are----
Mr. Orner. The Coast Guard Headquarters currently occupies
both the Transpoint Building and the Jemal Building. Relative
to the Transpoint Building, I received a letter from GSA
several months ago that told DHS and the Coast Guard that they
would be exercising the termination clause on that lease
effective at the end of the--effective when the Coast Guard
moves out. The Coast Guard begins to move out in August, and it
takes place over a 4-month period, and they outlined in the
letter the reasons for terminating the lease, which had to do
with, first of all, that the building is on a floodplain, and
secondly that there are costs associated with that lease that
are unique to that lease.
Ms. Norton. What are you doing to mitigate the $60 million
cost to the taxpayers you will be left with if that lease is
terminated?
Ms. Robyn. Well, I think we wouldn't, if we are talking
about the Transpoint Building----
Ms. Norton. We are talking about the Transpoint Building.
Ms. Robyn. Yeah. I think terminating the lease is a way of
avoiding that $60 million. That is why we will be terminating
the lease, is my understanding. I mean, we wouldn't terminate
it. We would, alternatively, if----
Ms. Norton. Dr. Robyn, there will be 2 years where you are
responsible for paying on that building. You have got or DHS
has in holdover status now a number of agencies where you are
paying for that reason, because the DHS building has not gone
up as quickly as we had thought. Have you thought of ways to
keep from paying on an empty building for 2 years?
Ms. Robyn. The letter to Mr. Orner from the regional
Commissioner, GSA Regional Commissioner Bill Dowd, says GSA's
intent is to exercise the termination option this spring, this
is referring to Transpoint, which will produce upwards in $60
million in total rent savings. So I believe----
Ms. Norton. Oh, my goodness, Mr. Chairman, could I ask
this? Within 30 days----
Ms. Robyn. Yes.
Ms. Norton [continuing]. Would you write to the chairman
how you will avoid paying rent for an empty building, 2 years'
rent for an empty building?
Ms. Robyn. I will.
Ms. Norton. In other words, in the law we call it
mitigating the damages. You have mitigated it somewhat, but you
still would be paying for an empty building. We would like to
know what action you have taken or propose to take so that the
taxpayers will not be left with liability and whether or not,
for example, some of the DHS agencies and holdover leases
temporarily could occupy that space. I don't even mean to
suggest to you what must be a hundred options other than simply
eating the amount that you would be left with.
Ms. Robyn. Let me just say one more time, and I will
confirm this, but when we terminate a lease, that we have a
right in certain leases, we have a purchase option in some of
our leases, we have termination rights. When we exercise the
termination right, that gets us out----
Ms. Norton. We aren't questioning your right. We aren't
questioning. We are asking what you are going to do for 2 years
paying rent on an empty building, that is all. Is there nothing
that can be done during those 2 years to mitigate the remaining
liability?
Ms. Robyn. OK, I think we----
Ms. Norton. In 30 days.
Ms. Robyn. I think we have a difference of actual----
Ms. Norton. Well, then, in 30 days in writing----
Ms. Robyn. I will clarify.
Ms. Norton [continuing]. Would you let the committee know--
here is the chairman, so you know who I am talking about--in a
letter what you intend to do to mitigate whatever liability you
claim you will be left with, unless you are telling me there
will be no liability whatsoever.
Mr. Barletta. Thank you, Ranking Member Norton. We will
certainly get back to that. We are going to go to the gentleman
from Pennsylvania, Mr. Perry. Just to answer later, if we are
not backfilling that building, why should we believe that we
are going to somehow find Federal employees at a higher rate
for the NRC? We will get back to that. I will recognize the
gentleman from Pennsylvania, Mr. Perry.
Mr. Perry. Thank you, Mr. Chairman.
And thank you folks for coming in. It is good seeing you.
My first question, will be directed to Mr. Borchardt. Is it
doctor or mister?
Mr. Borchardt. Mister.
Mr. Perry. Mister. OK.
The information I have shows since 2007 a decrease in
staffing of about 3 percent. Meanwhile, during the 2007 to
2013, the same commensurate period of time, an increase in
square footage. Now, the numbers vary somewhat from other
information I have. If I go back to 2007, I have got 2,652
employees on, information that I think was provided by your
agency, and it increases in fiscal year 2010 to 3,035, and it
is down to 2,913 in 2012.
With that, again, according to your testimony, so if I am
wrong, please correct me, but the NRC says its preferred
solution is that all of Two White Flint be leased and the NRC
relinquish space in Three White Flint to another Federal
tenant. But what you propose is that the taxpayers are paying
for all three buildings as opposed to two or two-and-a-half
buildings. Is NRC's analysis based on the cost to the taxpayer
or the cost to the NRC? And do you have a Federal tenant who
has committed to backfilling the space?
Mr. Borchardt. Well, we are working with GSA regarding the
final configuration. The decision has not yet been finalized as
to what the headquarters campus of the NRC will be, how it will
be configured. Our preferred approach is the one I described,
where we give up half of the new Three White Flint building,
but that is still a decision to be made.
Mr. Perry. And the basis, again, is it for the cost
regarding NRC or cost to taxpayers? What is the basis for the
decision?
Mr. Borchardt. I would have to get back to you on that. I
am not sure.
Mr. Perry. All right. Dr. Robyn, do you have any input at
this point based on those comments?
Ms. Robyn. We are evaluating the cost and the benefits of a
couple of different options. As I said earlier, in an ideal
world we would own Two White Flint Mall and the NRC would fully
occupy One and Two and a portion of Three. But that may not be
the most cost-effective. It may be, in the end, more cost-
effective to, given that the lessor does have us over a barrel,
it may be more effective to simply get out of Two White Flint
Mall and occupy--I agree that NRC needs two-plus buildings. How
you configure that, whether it is One and Two plus part of
Three or One and Three and some satellite spaces, we are
running the numbers on that.
Mr. Perry. And, again, would you consider the cost to
taxpayers or cost to the NRC? What is the higher standard?
Ms. Robyn. Well, I haven't really drawn that distinction.
Costs to Federal agencies are costs to taxpayers. In this case,
if we backfill a portion of Three White Flint Mall, I said
earlier that the NRC would pick up the incremental cost of that
higher priced space to Federal agencies. So in that sense it
would be a cost to NRC ultimately.
In the case of NRC, I should say, they are funded largely
by industry user fees. So, yes. OK, I am sorry, that is what
you were getting at. Yes. One can distinguish agencies like
Securities and Exchange Commission, Nuclear Regulatory
Commission that are funded by user charges to industry. It is
worth drawing that distinction.
Mr. Perry. I would say it is. And, you know, as a person
that pays for base load out at Three Mile Island, because I am
part of the PJM, this is important to me.
Mr. Borchardt, much of the budget is, as is already stated,
from fees on the nuclear industry. Do you know what will be the
total cost of the NRC's preferred solution to the industry and
then to me as a ratepayer, including amounts you have already
sunk into Three White Flint.
Mr. Borchardt. Well, as you alluded to, 90 percent of the
NRC budget is paid for by the licensees that we regulate, so
our budget is approximately a billion dollars. Ninety percent
of that is fee reimbursed.
Mr. Perry. OK. In the time remaining, you state that if the
lease prospectus is not renewed and the NRC were to vacate Two
White Flint, the agency would have insufficient space to house
its current employees and conduct effectively its nuclear
safety mission. Have you, in that regard, run analysis on the
following solutions: Fully utilizing Three White Flint and the
satellite buildings and/or vacating half of Two White Flint.
Mr. Borchardt. Yes, we are in the process of doing that
analysis. As I recall, the estimate is about $4 million to $7
million a year in order to lease the space necessary to hold
the hearings, the special use buildings in the Two White Flint
facility. So this has to do with the hearings and the Advisory
Committee to the Commission.
Mr. Perry. Thank you, Mr. Chairman. I yield back.
Mr. Barletta. Thank you, Mr. Perry.
The Chair now recognizes the gentlewoman from Maryland, Ms.
Edwards.
Ms. Edwards. Thank you very much, Mr. Chairman. I apologize
that I haven't been here for the entire hearing. I appreciate
your continued oversight and the ranking member's oversight of
the GSA leasing process, let's just say.
I have long had questions about GSA's role and who you work
for. And in some of my work on this committee, it has come to
my attention that it is often unclear who is in the driver's
seat when it comes to making decisions on behalf of the
taxpayers and what might be most cost-effective for taxpayers
when it comes to GSA and its relationship to the client
agencies.
And so I just want to ask you, Dr. Robyn, who is in the
driver's seat when making these decisions? Who gets to say that
is the deal?
Ms. Robyn. We have a difficult role because we were created
and we still have dual functions. We are a cop, on the one
hand, we have a regulatory control function of telling agencies
to dispose of that property, shrink your footprint. At the same
time, we have a service-provision function, and we try to
balance those two. We were created that way. Some countries
have severed those two functions because it is hard to do both.
I think they belong together, but it is a balancing act. And
over time GSA has at some periods in its history been more in
what one would call an order-taker role and at other times been
in more of the cop role. I like to think we are not an order
taker, but we do need to work cooperatively with agencies.
Ms. Edwards. So let me just ask this, so I want to get
right down to it: When you look at the National Capital region,
how many counties, jurisdictions does that include?
Ms. Robyn. Oh. Well, I normally have a little map. It is--
--
Ms. Edwards. Give me a number.
Ms. Robyn. It is the District and Prince George's County
and Fairfax and Arlington. Six, seven, something.
Ms. Edwards. Montgomery. Right.
Ms. Robyn. Montgomery County, yes.
Ms. Edwards. And so if we are to take a look at the
consolidation that needs to happen with HHS which has, I
believe, about 97 offices throughout the National Capital
region, how many of those offices are located in one of those
handful of jurisdictions that you just pointed out? How many of
those are located in Prince George's County?
Ms. Robyn. I don't know the number.
Ms. Edwards. Does anybody from HHS know?
Mr. Holland. I don't have that number, Congresswoman, but
we certainly can get it and get back to you.
Ms. Edwards. Definitely want to get that.
So of the 97 offices throughout the National Capital
region, the number that I want to know, when you look at the
spread throughout the region and you look at consolidation, how
many of those are in one county, in Prince George's County? And
while you are at it, in responding, I hope in writing to that
question, I want you also to give us the average distance of
the offices that you are currently operating and what you
envision as consolidation from a Metro station, from a
transportation hub. And also I would like to know the average
lease rate per square foot paid in each one of those
jurisdictions for the offices that HHS operates.
[Please see pages 58-59 for responses from the Department
of Health and Human Services to Hon. Donna F. Edwards'
questions.]
Ms. Edwards. Let me just ask about DHS. DHS has about 50
locations throughout the National Capital region. How many of
those are planned, are you trying to draw down to sort of one
vision, one DHS with, I don't know, how many, 10 maybe other
offices?
Mr. Orner. DHS headquarters and our component headquarters,
as you say, occupy over 50 locations in the NCR. If you count
our local field operations, it is another 50 locations. Our
goal is to get down to roughly 15 anchor locations in the
National Capital region. St. Elizabeths would be one of those.
Ms. Edwards. And of the 50 locations currently in the
National Capital region, do you know how many jurisdictions are
in the National Capital region?
Mr. Orner. I don't know off the top of my head.
Ms. Edwards. OK. So, again, of those 50 locations in the
National Capital region, and as you envision the 15 locations
that you want to drill down to, with the anchor being the St.
Elizabeths Hospital, how many of those are located in Prince
George's County?
Mr. Orner. I will get back to you with a written answer on
that.
Ms. Edwards. And the same thing, how many, where they are
located, the proximity to a Metro.
[Please see pages 64-66 for responses from the Department
of Homeland Security to Hon. Donna F. Edwards' questions.]
Ms. Edwards. What I am trying to get at is whether the
National Capital region is treated fairly in all of its
complexity in every single area of the county because when it
comes to consolidation, when you start to look at what is the
benefit of the bargain for the taxpayer, what is the cost? What
is it going to cost us ultimately? Not what the cost is to an
individual agency juggling a budget. What is the overall cost
to the taxpayer and how are we saving the taxpayer money? And
if there is a jurisdiction that we are jumping over top of to
get someplace else at an agency directive, then I would say to
you that GSA is not in the driver's seat when it comes to
giving the benefit of the bargain to the entire capital region
and making sure that the taxpayer comes in first.
And with that I would yield.
Ms. Robyn. Can I respond to that? I think that we rely on
competition to get taxpayers the best deal. We spend an
enormous amount of effort identifying the appropriate
delineated area, and sometimes we have differences with
individual members on this committee. But ultimately we use a
competitive process. And we are not fundamentally different
from a corporation when siting a large new facility, we are not
fundamentally different from a corporation that is thinking----
Ms. Edwards. With all due respect, there have been too many
studies for you, Dr. Robyn, to sit in front of this committee
and tell us that it is just kind of a transparent corporate
decision looking at a delineated area where things are
considered fairly. There has been way too much documentation. I
don't want to go into it again. But the reality is that there
is only one jurisdiction in the National Capital region that is
treated differently, and that is Prince George's County in
Maryland.
And if the members of this committee want to get a better
bargain for taxpayers, our job has to be to make certain that
the GSA is treating the entire region with the fairness that
taxpayers deserve, not because an agency just kind of wants it
that way or because it is more convenient for the agency, but
what is in the interest of the taxpayer. And I have to just
tell you that from your agency and the data that you provided
to the data that has been provided by outside third parties, it
is really clear that there is only one jurisdiction in the
National Capital region that is not treated with the same kind
of transparency. You can't come to this committee and try to
make another argument about fairness because the data just
doesn't bear fruit.
Mr. Barletta. Thank you, Ms. Edwards.
The Chair now recognizes the former chair of the full
committee, the gentleman from Florida, Mr. Mica.
Mr. Mica. Thank you, Mr. Chairman. And the last Member was
usually very favorable towards the Government side of the
equation, and I thought she framed my position very well. Look
forward to working with her. In fact, I want to associate
myself with her remarks.
I guess there is some good news and some bad news, Ms.
Robyn. The bad news first. Would you convey a message, tell Mr.
Tangherlini, if GSA does not send a witness to my next hearing,
they will be subpoenaed or I will come and sit in their office
until I get the answers. This is on information technologies.
Along with OMB. I can't conduct an oversight of $84 billion
worth of information technology business that the Federal
Government conducts without one of the prime participants; that
is GSA. I know that is out of your purview, but if you ever see
Tangherlini, just tell him I sent that message.
Let's see, what should we take, the bad news or the good
news? The good news is, Ms. Robyn, what to my wondering eyes
should appear? I came into the office yesterday, maybe GSA was
trying to give me some reason not to continue breathing because
I gasped when I saw this: General Services Blanket Purchase
Agreement for Real Property Sales and Support Services. Gasped
in a pleasant way because I thought maybe we are heading down
the path to doing something positive. This is just out, and
what is the schedule for moving forward? Are you aware of this?
Ms. Robyn. No.
Mr. Mica. You aren't aware of it? General Services
Administration, Public Building Service, Office of Real
Property Utilization, a blanket purchase agreement. Did you
talk about this before I got here?
Ms. Robyn. No.
Mr. Mica. Am I missing something? And you are aware of it?
Hello, everything working here?
Ms. Robyn. I am sorry. I work closely with our disposal
office. That is something they put out. I don't know if that is
something brand new.
Mr. Mica. Hey, you should get acquainted with it, Robyn. I
mean, things actually may happen in your agency. So I had a
whole list of questions that I can't ask you about, but one you
could get back with us. This would only deal with GSA
properties, right? It wouldn't deal like Agricultural Research
Service and some outside your purview. Would it or wouldn't it?
Ms. Robyn. Well, without seeing it, we are the disposal
agent for all agencies.
Mr. Mica. OK. Well, tell me if that is the case if they
will have that purview. Is this requirement, and I want to find
out if it is on a national basis or is it going to be
subdivided to regional where they can go in and take pieces of
it?
Then another question. And, staff, I hope you are taking
these down because I want them in writing because sometimes
they forget to respond. The third question would be, are there
any impediments? The staff already cited to me the possible
impediments to moving forward with some of this disposition of
real property because of McKinney and other Federal statutes. I
want an analysis of any impediments from you that might
interfere with this, which is good news. Please be aware of the
good news before you come next time.
Ms. Robyn. Can I respond to that?
Mr. Mica. Yeah, what the heck, go ahead.
Ms. Robyn. Because I did in my opening statement, my
written statement, I said what you, Congressman Mica, have
heard me say before, the impediments, there are three major
impediments to us disposing of a lot of Federal property.
Mr. Mica. Well, again, in the context of this new venture,
which you are not a whole lot aware of but should be, and I
want to know if all of that, if the above applies or anything
else because this is a little bit different approach. Quite
frankly, I like it. I think it would be better if it was
regionalized so we could go at it more effectively. It is hard
to eat an elephant except a bite at a time.
Ms. Robyn. We have three disposal regions.
Mr. Mica. OK. Well, that is I guess some good news.
DHS, no. We need to be dismantling DHS. One of the biggest
mistakes we ever made was putting it together. We probably need
a DHS of about 3,000 people that is connecting the dots instead
of this huge bureaucracy. I am going to do everything I can to
close down anything at St. Elizabeths, have done that to date,
will continue. We have got Coast Guard there, God bless them,
they deserve it, a billion dollars, we have got 3 million
square feet, billions of dollars invested in the
infrastructure, which is fine. Maybe in the future, maybe we
can open up a disposition of Federal bureaucracy office there,
and I would support that, but we won't get into that. I would
just give you a little message.
The other thing, Ms. Robyn, if you can get back with the
committee, you know my slight interest ongoing in the Federal
Trade Commission Building.
Ms. Robyn. Yes.
Mr. Mica. Which the consolidation of that single building
over 20 years would save a half a billion dollars in taxpayer
money. I don't know of any property where you could have it
totally renovated, still keep it in the trusteeship of the
Federal Government, like the 1932 FTC headquarters building and
have it renovated for another purpose at nontaxpayer expense,
which I would estimate to be $150 million to $200 million, and
yet you persist in dividing up space which you are obligated to
in the Constitution building. How much space was left there,
450,000 square feet?
Ms. Robyn. In which building?
Mr. Mica. The Constitution Center, the one that you leased
for Securities and Exchange Commission, signed a 10-year----
Ms. Robyn. Oh, yes, yes. I think that is filled now.
Mr. Mica. It is filled in your mind? Yeah.
Ms. Robyn. Including with----
Mr. Mica. And part with FTC?
Ms. Robyn. Yes, I believe so.
Mr. Mica. Then you crammed some other agencies in there to
fill it so you couldn't properly move the FTC. Is that what we
are looking at? Are the others moved in yet? Do I have to go
down and chain myself to the door to stop that nonsense?
Ms. Robyn. That is leased space. That is a lease.
Mr. Mica. Has anyone moved in there? Has anyone moved in
there yet?
Ms. Robyn. Yes. Yes. I have not been there. I am told there
are various financial regulatory agencies there.
Mr. Mica. So the only way I can stop it is through some
dramatic move?
Are you moving the 217,000 square feet that was north of
Union Station there first?
Ms. Robyn. I am sorry?
Mr. Mica. FTC had its secondary location was in, what do
they call it, north of MOMA?
Ms. Robyn. NOMA, NOMA.
Mr. Mica. What is it?
Ms. Robyn. North of Mass Avenue, NOMA.
Mr. Mica. New Jersey Avenue property, have they moved out?
Ms. Robyn. I am sorry, I don't know.
Mr. Mica. Let the committee know.
Ms. Robyn. Yes.
Mr. Mica. I want a complete one-pager, break it down so
even an idiot can understand it as to where you are in that
process so I can dismantle whatever you are doing. Would you
help me with that?
Ms. Robyn. Yes.
Mr. Mica. Thanks so much, Mr. Chairman. It is always a
delight to be with this subcommittee.
Mr. Barletta. Thank you, Mr. Mica.
If, Dr. Robyn----
Mr. Mica. Could we make--at least reference to this part of
the record and would the staff make a copy for the----
Mr. Barletta. So moved.
[Please see pages 48-50 for responses from the General
Services Administration to Hon. John L. Mica's questions.]
Mr. Barletta. Dr. Robyn, if we could go back for just a
moment on the Coast Guard property.
Ms. Robyn. Yes.
Mr. Barletta. So when you terminate actually, you will be
paying rent for 2 years on the empty building that will cost
$60 million?
Ms. Robyn. Well, normally, I think the Congresswoman and I
were talking past one another, and maybe--it sounds like we
have a factual disagreement. This letter stated to Jeff Orner
that we were getting ready to use our one-time termination
rights. That means we walk away from a lease.
Mr. Barletta. I believe it states that the earliest
termination rate is in 2 years.
Ms. Robyn. Well----
Mr. Barletta. That is the earliest termination rate, which
would mean that we would be paying rent on that building for 2
years at a cost of $60 million.
Ms. Robyn. Well, but this letter clearly says--our
understanding--I mean, this letter says that doing this will
save $60 million or avoid that $60 million. So that is why I
think we have a factual misunderstanding about what the--I do
not believe we are left with--if we were left with a $60
million bill, we would be backfilling that. That doesn't make
sense to me.
Mr. Barletta. I believe that is exactly what is happening,
and----
Ms. Robyn. I will clarify that. I don't think that is
right.
[Please see pages 46-47 for responses from the General
Services Administration to Hon. Lou Barletta's questions.]
Mr. Barletta. All right. If I can go back to the reference
of the possibility of buying Two White Flint.
Ms. Robyn. Yes.
Mr. Barletta. Representatives of the owners, as had been
mentioned a little earlier, provided us with a copy of a letter
that was sent to GSA. I will just read a small portion of it.
``I spoke with the owner to the building, and the ownership has
no interest in an option to purchase the property. As you are
aware, the owner of this property holds property for the long
term since a purchase option is not a possibility.''
So if that is not an option, and we are considering
purchasing the building, then I have to ask the question, if
the owners aren't willing to sell, are you considering
condemning the building, condemnation?
Ms. Robyn. Let me start by saying, it is not unusual for,
it is not unheard of for a lessor to say we don't want to sell
the building. That can be part of their negotiation strategy.
If, indeed, that is their position, I think our position should
be that, again, depending on the cost, we are prepared to walk
away from this building. I don't like----
Mr. Barletta. So condemnation would not be an option?
Ms. Robyn. Well, there are different flavors of
condemnation. I think condemnation, as you are using the term,
I think we would not do that. One, there are leasehold
condemnations that we occasionally exercise in order to be able
to gain additional time to vacate a building. We might exercise
that sort of a, I believe it is called a leasehold
condemnation. I don't like being in a position of negotiating
with a lessor when we don't have choices. I think we need to be
prepared to walk away from Two White Flint Mall if a lessor is
not going to be reasonable.
Mr. Barletta. The new $1.2 million Coast Guard headquarters
required 1.6 million cubic yards of excavation, 250,000 cubic
yards of concrete.
Ms. Robyn. Yep.
Mr. Barletta. Thirty miles of conduit and wiring, 40 miles
of plumbing and piping. That was built in 4 years. The new 16-
story San Diego courthouse was constructed in 3 years. Now,
according to the NRC/GSA estimates that it will take 4.5 years
to seal a few garage and walkway connections between the two
existing buildings. How is this possible?
Ms. Robyn. I think it is a matter of expense, not the time
involved. I will let my colleague speak to that, but I think it
comes down to cost issues.
Mr. Barletta. Mr. Borchardt, the lease at Three White Flint
is $7 more per square foot than the rental cap for the suburban
Maryland, and there are additional fees, including parking.
Would the NRC commit to paying for the cost difference if
another Federal agency moved into 3?
Mr. Borchardt. I would have to ask to submit the answer to
that in writing. I would need to go back and give the question
to the Commission so that they could provide that answer.
Mr. Barletta. Well, I am hearing a little misunderstanding
with what GSA believes.
Ms. Robyn. My understanding is they would pick up that
incremental difference. We can backfill, there are plenty of
opportunities to backfill the space in Three White Flint Mall
that the NRC does not need. We cannot impose that incremental
charge on another Federal agency. So my understanding is that
the plan would be to have the NRC pick up that difference.
Mr. Barletta. So do you believe the NRC would be willing to
pay extra for a space it is not using, swallow the $90 million
of extra costs in tailoring that building specifically for the
NRC just to stay in Two White Flint?
Mr. Borchardt. Mr. Chairman, I think there are important
operational reasons for staying in Two White Flint. As to what
additional financial burden we would accept is a matter that
the Commission would have to decide themselves. I am not
authorized to answer that.
Mr. Barletta. But the Operations Center and the data center
is in Three White Flint. I know there is a daycare center in
Two White Flint. That certainly wouldn't be the reason to stay
only, but the Operations Center, which I was very impressed
with, is in Three White Flint. Wouldn't it make more sense?
Mr. Borchardt. Yes. It is being moved to the third
building. The special use facilities that would stay in Two
White Flint are the hearing rooms for the Advisory Boards that
provide expert advice to the Commission. Both of those have
numerous public meetings and extensive public participation in
the meetings. That, combined with the need to do security-
related classified discussions, are things that make the
attributes of Two White Flint that are already cleared for
those activities desirable.
Mr. Barletta. Mr. Orner, you pointed out pilot programs DHS
has implemented to test different workspace strategies, and you
highlighted one example where DHS was able to put the same
amount of people in 50 percent less space, saving $1 million.
Can you explain how you were able to achieve that, and has
there been any impact on the operations in that office?
Mr. Orner. Well, I can, and that is my own office, so it is
easy to talk about that. First of all, it took a fair amount of
planning and preparation. We had to move to an information
technology backbone where everybody has a cell phone and
everybody has a laptop. Supervisors had to put in place new
performance standards that were measuring outcomes so that we
could get to the point where we are managing outcomes as
opposed to simply keeping track of who shows up every day.
Most members of the workforce don't have an assigned
workstation. You go online once a week, and you sign up for: Am
I doing something private this week that I can maybe do at home
or am I collaborating with office mates? We have some open
space, we have some more private cubicles.
It is working out very well. The workforce is very pleased
with it. It is a model that I would recommend on a much broader
basis.
Mr. Barletta. Mr. Holland, as you point out, HHS is already
looking for opportunities to begin achieving your goal of 170.
Recently the committee authorized two short-term leases for HHS
as part of HHS's plan to move those offices into Parklawn in
Maryland. By doing this the utilization rate will be reduced
from 273 to 182. Are you still achieving that reduction?
Mr. Holland. Yes, sir, we will. It does take the indulgence
of the committee to extend those two leases a bit so we can
finish the reconstruction of Parklawn, but we will get to 182.
Mr. Barletta. Thank you.
I will recognize the gentlewoman from Maryland, Ms.
Edwards.
Ms. Edwards. Thank you, Mr. Chairman.
I just want to be really clear--and again I appreciate the
hearing--that I really value the service of the men and women
at HHS, at NRC, at DHS, and GSA. I truly do. I just think that
when you come before this committee and our responsibility is
to figure out how it is that we can support the work of all of
the good people who work at your agencies and throughout the
Federal Government, that we also recognize that we have
tremendous financial constraints, and that those constraints
can be alleviated when we have an open, fair, and transparent
process, and that there will be members on this committee who
will be, you know, very greatly supportive of your efforts to
consolidate, to move, and to anchor employees where it makes
the most sense. But we have to save money in doing that.
And so my comments earlier were more frustration about
representing a jurisdiction that I just feel like there can be
no argument anymore and that this process can't continue where
we just hop and skip over a jurisdiction that, frankly, could
save the taxpayer a lot of money. And I would urge each of you
in your agencies, but most especially GSA, to be in the
driver's seat, to be in the driver's seat when it comes to
making those determinations. Because sometimes the agencies
have their own interests, and I understand that, but GSA has to
be the arbiter.
And I would agree with Mr. Mica that it is more than past
time for GSA and its leadership to formally appear before this
committee and for us also to see the leadership of the Office
of Management and Budget, because so many of these decisions
hinge on things that GSA says, oh, we don't have any control
over. But, you know, OMB. We need to see OMB and GSA at this
witness table right here to respond to this concern even of
Members who greatly value the service of our Federal workforce
and aren't interested in tearing that down, but also will not
stand for the taxpayer not getting the benefit of the bargain.
And with that, Mr. Chairman, I yield.
Mr. Barletta. Thank you, Ms. Edwards.
Mr. Borchardt, you said that your goal was a utilization
rate of 215 feet per person. All of your actual Federal
employees and over 90 percent of everyone, including
contractors, would fit in White Flint One and Three. With
125,000 feet of satellite space, you can house everyone. Why
not keep 1 and 3 and have one satellite office?
Mr. Borchardt. My answer, Mr. Chairman, has to do with our
mission of nuclear safety and protecting the public. As I
mentioned, Three Mile Island taught us an important lesson
about having a consolidated workforce. I believe the events at
Fukushima, that the Japanese regulators suffered from having a
dispersed regulatory staff and not a timely ability to address
some issues that needed to be addressed.
I think there can be nothing that is more important than
accomplishing our mission of protecting public health and
safety, and experience tells us that the best way to do that is
to have a collocated workforce.
Mr. Barletta. Two problems there. I mean, DHS right now
obviously have security issues, and they have multitenant
properties, they are able to do it. And besides, this makes the
most sense because 90 percent of all your employees will be in
two buildings plus a satellite. So I am confused, because
basically you are saying is if you kept 1 and 2, you know, they
could backfill 3, but if you kept 1 and 3, 90 percent of your
employees would be together and one satellite. That would
actually make your argument void.
Mr. Borchardt. Well, I am respectfully not sure I agree
with you that the argument is void. I think the face-to-face
interaction that is required in order to both conduct our
normal job of doing detailed technical reviews of nuclear
reactor designs, for example, and then more importantly the
ability for the staff to be able to get together in a facility
like the Operations Center, as recently as a result of
Fukushima when we staffed the Operations Center for months at a
time, and after 9/11, that ability to be collocated and to do
joint collaborative work is highly valuable.
Mr. Barletta. Well, it will be because what you are asking
to do, you want to have 1, 2, and 3, so you will be taking
people out of two buildings to get them over to three, versus
being in 1 and 3, having Three White Flint totally occupied
where the Operations Center is, and then your only other
employees would be over in 1. How does having people in 1, 2,
and part of 3 achieve what you are saying?
Mr. Borchardt. Well, because in my view that is one
consolidated campus. Unless I misunderstood you, you were
talking about having at least one more satellite office to
house the remaining staff, because I believe we have provided
information that demonstrates that the entire staff cannot fit
into One White Flint and Three White Flint, the total of that.
Plus there is the added complication, as I mentioned earlier,
about the Advisory Committee and the hearing board, that we
would need to find special facilities in order for them to do
their jobs.
Mr. Barletta. In meetings with your staff, the NRC stated
that despite never using it in 60 years to acquire office
space, the NRC has its own acquisition and leasing authority
pursuant to the Atomic Energy Act of 1954. Is that the NRC's
position, that like agencies such as SEC, the NRC can acquire
and lease property on its own?
Mr. Borchardt. I believe section 161 provides that
authority. And I know that there have been discussions between
the NRC legal staff and your legal staff. And so if more
information is required, I would ask that we be able to provide
that in writing.
Mr. Barletta. Six years ago the NRC went around the
committee authorization process and committed the taxpayers to
$350 million for a building that you can't fill. Will the NRC
and GSA be doing that again? Will you commit to abide by the
longstanding committee process for authorizing leases?
Mr. Borchardt. Well, Mr. Chairman, we clearly want to work
with this committee and with the GSA for all future activities.
We would continue to do that. I think when we go back into
time, as I mentioned earlier, that as a result of the Energy
Policy Act in 2005 and the renewed interest in nuclear energy,
that there was great enthusiasm on the part of the Congress to
make sure that the safety regulator was prepared to do all the
work that was forecast to come to us. The decisions made were
based upon our best information at that time. They were even,
in my view, conservative at that time. We did not foresee the
economic downturn nor the price of natural gas, which has
resulted in the adjustments that we have had to make.
Mr. Barletta. So is that a yes or a no?
Mr. Borchardt. That we would continue to work with GSA and
this committee, certainly.
Mr. Barletta. Would you abide by the process? It would be a
yes-or-no answer, would you abide by the process?
Mr. Borchardt. On that question, I would have to go back
and ask the Commissioners for their response.
Mr. Barletta. So am I hearing--what you are saying is you
don't know whether or not you will abide by the process.
Mr. Borchardt. What I am saying is I don't have the
authority to answer that question directly.
Mr. Barletta. I actually don't know how to answer that.
Dr. Robyn, we asked over a month ago whether GSA's
inventory is actually shrinking and the data, for at least the
last 5 years of the amount of space that is owned and leased,
we have yet to get that information. Can you tell us today is
GSA's inventory shrinking or is it growing, and when will we
have that data?
Ms. Robyn. I apologize, I did not realize you had asked for
it. We will get it for you. I have a feeling you have that
number and I don't have it handy. OK, you don't. I don't
think--I think it has been fairly stable. I have been focused
more on the leased-versus-owned proportion in trying to
stabilize the amount of lease space, because much of this
hearing has been devoted to the problems that occur when we
are--we have agencies in leased space that have more
specialized needs, but I will get you that.
Mr. Barletta. I think----
Ms. Robyn. Information.
Mr. Barletta. I don't have the answer, I don't have the
answer. But I think it is incredibly important that we know
what our inventory is and how many employees are in those
buildings because we really do need to get a grasp on it.
Ms. Robyn. I know within, you know, I know within a very,
within a couple of million square feet. Asking how many people
are in our buildings, that is--that is a tougher question. And
to go back to what I said earlier to Congresswoman Edwards
about the dual role we play and the cop role that we have
played, agencies historically have not been eager to share that
information with us because we have played the cop role when it
comes to disposal and other things. So we don't have the data
on the number of people.
Mr. Barletta. I believe we have the right to know that. I
think when people at home are hearing this, it just again
magnifies how dysfunctional Government is that we don't even
know how many employees we have, Federal employees the
taxpayers are paying for in a building. And we have agencies
who believe they have the right to say, we don't think we want
to reveal that information. I am telling you, that drives
people crazy to believe that their Government would be so
nonresponsive to very simple questions. And this would not
happen in the private sector where you would have a department
refusing to give you something so basic as how many employees
do we have here.
You know, if Federal employees are going to be so adamant
about holding onto space. I have only been the chairman here
for a very short time, and I have had an opportunity to do a
couple of tours of buildings. And I am going to tell you, I
didn't know if it was a Federal holiday in one of the
courthouses I walked in, I couldn't find an employee. I didn't
know if they had the day off. I don't believe--and I am not
picking on just you, I am really talking to everyone, I don't
think the President's recommendation that we shrink the
footprint that Federal agencies begin to do the very necessary
things as moving into smaller spaces, I don't think that is a
suggestion. I think he means it and I think we mean it.
It is very hard for us. I mean, when you are talking about
cutting LIHEAP, heating assistance for elderly. And to sit
through this and have Federal agencies tell you that need, we
would prefer bigger space and we would prefer spending more
money to have a nicer facility and space. Well, I could tell
you that there are senior citizens who would prefer having
heat.
Mr. Borchardt, this is not acceptable, it is very hard for
you to defend that. One hundred ninety-five square feet in 2007
and 322 square feet today? I am going to disagree with you, in
2007, you had 3,340 people, today it's 3,250 people and look at
all the space you have. And to try to make an argument that we
can't do anything when we have a committee that authorized
120,000 square feet, but went out and they secured 443,000
square feet, instead of $38 million we are costing the
taxpayers $400 million. You had a real tough argument today and
I don't think you made it.
Mr. Borchardt. Mr. Chairman, I just want to reiterate that
the NRC's committed to complying with the ``Freeze the
Footprint'' initiative, we are proposing a solution that
significantly reduces the number of square feet for the agency,
giving up over--giving up approximately half of the Three White
Flint facility and terminating the leases on all of the
satellites.
Mr. Barletta. But half of a building, you are willing to
give up half of a building that you charged the taxpayers with
$90 million to tailor-make it for you. What about that money?
Can you imagine? Would you do that with your home?
Mr. Borchardt. Well, as I mentioned, the way that situation
developed was based upon the workload projections from the
industry as a result of the Energy Policy Act of 2005. That
hasn't materialized in the way it was projected. The Congress
supported the NRC's plans for expanding the size of the staff.
Mr. Barletta. I understand that, I understand what you are
saying. OK, in 2007, for some reason, they anticipated hiring
all these more employees and that didn't happen. We negotiated
our right in Two White Flint, we negotiated that away for
another piece of property. We have a building that it the owner
said they don't want to sell. But here is what I am hearing
today, we still don't believe that. We still want to be 1, 2
and half of 3.
I don't think you are getting it. I think it has been very
difficult when you are sitting next to agencies who believe
what the President said, that we should find ways to move into
smaller spaces. DHS moved into 50 percent smaller space. There
are ways to do it if we want to, I know what you would prefer.
And I have to say that I am absolutely astounded that you can't
say that the NRC will follow the law and abide by the
authorization process, particularly when the NRC made such a
mess of--of these leases. This wasn't caused by the taxpayers,
this wasn't caused by the recession, this wasn't caused by the
economy, this was caused by a Government agency, and we are
asking you to fix it. And to sit and tell me that you can't
tell me today that you will abide by the law is exactly why
people believe the Government is just out of control.
Mr. Borchardt. Well, Mr. Chairman, if I can just say that
the NRC still firmly believes that we complied with the law,
that the Atomic Energy Act provides us the authority.
Mr. Barletta. The Chair recognizes Ms. Edwards.
Ms. Edwards. Thank you just very briefly, and I know the
ranking member has returned. I just want to be clear Dr. Robyn,
do you believe that you have the statutory and or regulatory
tools to demand from agencies the leases that they have, the
terms of those leases and the numbers of employees who were
filling each one of those leaseholds?
Ms. Robyn. I don't know the answer to that question. The
last administration created the Federal Property Council the
Federal Real Property Profile. We are collecting data, a lot of
data, it is problematic. We are reliant on agencies, GAO has
pointed out problems with it. I am not sure whether the number
of employees is part of what we collect. I know we do not have
data on a number of employees. It is not always a simple
question as you have got contractors, you have got people who
are virtual--so it isn't a simple matter. I know that it would
help us a lot to have better data. I don't know how----
Ms. Edwards. But are you saying that right now the way that
you get that data is because agencies voluntarily provide it
when you request it?
Ms. Robyn. Well, it is a little more than voluntary, the
Federal Real Property Profile, OMB is the enforcer and so they
give us data that is part of the FRPP. It is--we are dependent,
it is another part of GSA. And I apologize, that is why I don't
know some of the details, it is the Office of Government-wide
Policy in GSA. There are issues with some of the data as GAO
has pointed out. And we are taking steps to try to clarify the
definitions and come up with some better metrics.
Ms. Edwards. So if this committee asks you for information
and there is not a formal mechanism by which every agency has
to provide that to you.
Ms. Robyn. Certainly on any new lease or prospectus, we
know how many people. We do detailed calculations of
utilization.
Ms. Edwards. The problem is, and I think the chairman has
pointed this out, that it makes it really difficult for us to
grab our hands around what it means to consolidate and reduce
the footprint if when we ask you what is out in the ether, and
you can't grab your hands around it. And I just want to know
from each of the agencies whether you feel that you have a
statutory or regulatory obligation to timely, and often,
regularly provide that information to GSA?
Ms. Robyn. Can I just clarify between two different issues,
one is footprint. The OMB policy deals with square--it is a
square-footage number, and we have worked with every single
agency that falls under that policy, the CFO agencies, there
are 24 of them. And we have given them their baseline figure,
that is based on data from the Federal Real Property Profile
from GSA leases and from their own leases that they have
independent leasing authority. We know, we know that you will
see that number on performance.gov.
The harder thing is calculating on buildings that are not
subject to lease renewals, what utilization is because we don't
always have the best data on the number of employees in it,
that is a utilization number.
Ms. Edwards. Well, couldn't get that just by asking the
agency? I mean, the agency surely must know.
Ms. Robyn. I think it probably is part of the FRPP, it is
just not, it is not--it is something that is not reliable.
Ms. Edwards. Any of the agencies comment on that and then I
will yield.
Mr. Holland. Congresswoman, I don't know what the statute
says, but if Dr. Robyn had asked me for those numbers, I would
find them.
Mr. Orner. We absolutely feel we have an obligation to
share those data with OMB, with GSA and with this committee.
Mr. Borchardt. I also personally don't know what the legal
obligations are but we would be more than happy and we have in
the past shared that information freely.
Mr. Holland. The one thing I would add, Congresswoman
Edwards, it is, like Dr. Robyn said, not an easy question. I
mean, the numbers of people in our buildings, we have 50
million square feet of real estate, it changes almost hourly,
and it is a source of frustration for me and the Secretary to
try to figure out at any particular given day, but we have
general round numbers that we provide.
Mr. Orner. And to clarify, there is difference between the
number of Federal employees assigned to a particular building,
and the number of people who actually show up there on a
particular day which may also include contractors, people from
other agencies that may be detailed there, and so forth.
Mr. Barletta. Thank you, Ms. Edwards. The Chair now
recognizes Ranking Member Norton.
Ms. Norton. Thank you, Mr. Chairman. Two hearings going on
at the same time. And I don't have any questions, but I do want
to make clear. Mr. Chairman, the NRC got into this problem for
the same reason that the SEC got into the same problem last
Congress. The SEC problem created a terrible scandal because
SEC went out and just rented, I mean, it did something
comparable to what happened here, they rented office space,
much more than any agency could possibly use, and then, of
course, they fell back on SEC to help us get rid of it when
Congress discovered it. Now we have the same thing happening
with the NRC. And what they have in common is that both had
independent authority, rare, very rare, never should have been
done. I am going to introduce a bill, actually, if the chairman
wants it to be his bill, I will go in it with him, that
rescinds the independent leasing authority of the Nuclear
Regulatory Agency.
Isn't it interesting that they never used it until now and
they have had it since 1954; and they use it and they get a
situation like they got at White Flint.
Mr. Chairman, on the SEC, the SEC voluntarily, at least
administratively, gave up its independent leasing authority. I
put in a bill for that as well. I think both of them should be
part of the same bill, and part of the policy of this
committee, that no agency should have independent leasing
authority because then you have no connection to the taxpayers,
and people essentially are on a journey of their own to find
out that the space on their wish list. It can not be exercised
responsibly, so I believe certainly with the NRC, to be sure
the SEC has given it up administratively, but I don't see why
they both shouldn't be in the same bill.
I want to remind Dr. Robyn that in 30 days, we want to know
what she is doing to keep--I am telling you, reporters are
going to be up there taking pictures of an empty building. We
had this happen once before when I first came to Congress, I
think it was the FCC building and the GSA allowed the agency to
essentially refuse to move into the building, and so it became
a story day after day in Washington about how we were paying,
the taxpayers were paying rent on this building. That is going
to happen on that building. And if all you can say is well, we,
you know, we are not paying as much as we might have, that
won't get you very far when this begins to be spotlighted.
So in 30 days we want to know how you keep an empty
building, what you are doing to mitigate that. If there is
anything you can possibly do, and if not, why not?
And finally on the present predicament of NRC, I would say
that it is important for Dr. Robyn to submit to the committee a
plan, an NRC housing plan. And I don't think that you can
expect this committee to take any action absent a plan. And
even if there is one, I am not sure what we will be able to do
for the NRC, but I will leave that to discussions I will have
with the chairman. I thank you, Mr. Chairman.
Mr. Barletta. Thank you. Mr. Borchardt, before we conclude,
do all your employees and contractors respond to disasters?
Mr. Borchardt. There are certainly a core number of
technical experts that respond. I think the answer to you is
no, although the entire agency would go into some kind of
support function. So I mean, by that I mean the information
technology staff person might not respond to the op center
immediately.
Mr. Barletta. So it would be possible to house those
employees in one of the satellite buildings if necessary, those
that weren't responding directly to a disaster.
For Ranking Member Norton's benefit while, she was gone,
one of the questions we were discussing was 6 years ago, that
the NRC went around the committee authorization process and
committed the taxpayers to $350 million for a building that
they can't fill. And the question was, will they commit today
to abide by the longstanding committee process for authorizing
leases, and the answer was they could not commit to that, that
they would have to go back.
Ms. Norton. To see whether they will follow the law?
Mr. Barletta. Correct. So I want to just close with this
why, why did the NRC go around the committee authorization in
2007?
Mr. Borchardt. Well, first of all, I would like to say that
without a doubt, the NRC will follow the law. There is no doubt
about that. As I mentioned, the Atomic Energy Act provides us
certain independent authorities. And the purchase of Three
White Flint we did that in coordination with the GSA, so we
didn't act, operate completely on our own. And I am sorry, I
forgot----
Mr. Barletta. What did the NRC----
Mr. Borchardt. Well, I think the situation, as I mentioned,
was again, as a result of the Energy Policy Act in 2005, there
was a great enthusiasm. The Congress expressed great interest,
in fact, even concern about the NRC's ability to respond in a
technically credible and timely manner to the applications that
were projected to come before us. As a result of that, we were
authorized both an increase in staffing levels as well as
authorization to construct the Three White Flint building.
Mr. Barletta. And at the time the committee authorized
120,000 square feet, which is exactly what you need?
Mr. Borchardt. Well, in the time period around 2007, 2008
time period, the projected applications for new reactors was
increasing, so that the original forecast for space needs grew,
and that is how we ended up with the facility that we now have.
Mr. Barletta. But ignoring the committee's authorization of
120,000 and build out 443,000, that is not double.
Mr. Borchardt. Yeah, based upon the appropriations that we
received.
Mr. Barletta. At a cost of $400 million versus $30 million.
Thank you all for your testimony. Your comments have been
helpful to today's discussion. If there are no further
questions I would ask unanimous consent that the record of
today's hearing remain open, until such time as our witnesses
have provided answers to any questions that may be submitted to
them in writing. And unanimous consent that the record remain
open for 15 days for any additional comments and information
submitted by Members or witnesses to be included in the record
of today's hearing. Without objection, so ordered. I would like
to thank our witnesses again for their testimony today. If no
other Members have anything to add, this subcommittee stands
adjourned.
[Whereupon, at 12:26 p.m., the subcommittee was adjourned.]