Doan's Statement Before the House Appropriations Financial Services and General Government Subcommittee

STATEMENT OF
LURITA ALEXIS DOAN
ADMININISTRATOR
U.S. GENERAL SERVICES ADMINISTRATION
SUBCOMMITTEE ON FINANCIAL SERVICES AND GENERAL GOVERNMENT,
U.S. HOUSE OF REPRESENTATIVES
APRIL 3, 2008

Chairman Serrano, Ranking Member Regula, and Distinguished Members of the Subcommittee, I am Lurita Doan, Administrator of General Services.   I am pleased to have this opportunity to appear before you today to support the agency’s fiscal year (FY) 2009 budget request. 

A year ago, I came before this Subcommittee and told the Members that the General Services Administration (GSA) had made some difficult but necessary choices designed to improve service to GSA’s customers and provide a better return on taxpayer dollars entrusted to the agency.  This year, I am pleased to report that GSA has made significant progress.  The budget is balanced.  We have a clean audit.  We have restored and strengthened the trust and confidence of our largest customers: Department of Defense and the Courts.  And GSA is working as One GSA, with One Voice so that we can better serve our customer agencies, Congress, and the American people.

The agency is continuing down this path.  GSA is upholding its mission to leverage the buying power of the Federal Government to acquire best value for taxpayers and our Federal customers.  We continue to move forward – fulfilling our role as stewards of Federal space and property, providing quality workplaces, serving as the primary source for best-value products, services and solutions, and as innovators in anticipating the Federal Government’s current and future needs and as providers of Government information for citizens.  There is no need for other agencies to duplicate our mission, which would increase the cost of these services to the American taxpayer.

GSA’s FY 2009 budget request is the first budget submitted within the framework and under the direction of GSA’s 2007-2012 Strategic Plan.  The budget request before the Committee would allow us to put into action the principles and vision of our new Strategic Plan.  The budget would provide the resources necessary for GSA to lead the Federal Government in acquisition services, asset management, business solutions, and management policies. 

GSA’s Strategic Plan answered President Bush’s challenge to all Federal agencies to create a Government that is more citizen-centered and results oriented.  The plan established a refocused mission, along with new strategic goals and a reaffirmation of the agency’s core values.  The GSA core values of “INTEGRITY”, “ACCOUNTABILITY and TRANSPARENCY in OPERATIONS”, and “EFFECTIVE LEADERSHIP and RESPONSIBLE DECISION-MAKING” are integral to our business success and the foundation of the budget request before you.  My roots are in the small business community and it is deep within my nature to try and do more with less. 

On the topic of small business, last year I stood before this Subcommittee and GSA had a failing grade on our small business procurement practices from the Small Business Administration (SBA). 

This year, I am pleased to report that GSA has increased our small business procurement from 32 percent in 2006 to 34 percent in 2007.  Last month, the Small Business Administration released its Procurement Scorecard for the first half of FY 2008, and I am proud to report that GSA has a progress rating of GREEN.  GSA scored 100-percent on all of the nine evaluation measures.  Additionally, SBA’s report highlights GSA’s top-level agency commitment to small business contracting in its “Best Practices” section, pointing out that I have required small business goals as part of each of GSA’s 11 Regional Administrators’ annual performance evaluations. 

FY 2009 BUDGET REQUEST
GSA’s FY 2009 request is an “honest” budget.   Where possible, we have returned funds and implemented planned savings ahead of schedule.  We have proposed a number of realignments of funds to match resources with the organizations within GSA that are responsible for program delivery, increasing accountability and transparency.  This is a fiscally responsible budget request, representing the minimum resources required to continue GSA’s commitment to excellence in the business of government.

GSA’s  FY 2009 planned total obligations are $20.973 billion, with over $20 billion of these funds flowing to GSA from customer reimbursements to revolving funds for purchases of goods and services or as rent paid for space in Federally-owned and
–leased buildings under GSA jurisdiction, custody or control.  We are requesting appropriations of $706.4 million in FY 2009, just 2.2% of the total budget.  GSA’s request includes $525 million for the Federal Buildings Fund, $172.9 million for GSA operating appropriations, and an additional $8.5 million to support the transition to a new Presidential Administration following the November 2008 general election.  GSA supports Presidential Transition by providing office space, furniture, and information technology equipment and services to both the incoming and outgoing administrations.  

PRESIDENTIAL TRANSITION
GSA has requested $8.520 million for the Presidential Transition Fund, to provide for the orderly transfer of Executive power following this November’s general election.  GSA has a long and proud history of providing logistical support to both the incoming and outgoing Presidential administrations.  In the FY 2009 transition, GSA will provide office space, furniture, telecommunications and Information Technology equipment and services, and a variety of other administrative services to both the incoming and outgoing administrations. 

GSA’s request includes $5.3 million for the Incoming administration, to provide the President-elect and Vice-President-elect with suitable office space, payment of compensation for office staffs and personnel detailed from Departments and agencies, procurement of experts or consultants, and payment of travel, subsistence and other necessary expenses. 

We have also requested $2.22 million for the Outgoing administration, to provide the outgoing President and Vice President with services, facilities, and personnel necessary to wind up affairs, and $1 million for the orientation for key prospective Presidential appointees.  Orientation funds would provide for briefings, workshops, or other activities to acquaint key prospective appointees of the President-elect with the types of problems and challenges that they will be confronted with prior to assuming the responsibility of their positions after the inauguration. 

PUBLIC BUILDINGS SERVICE (PBS)
In support of our mission, the Public Buildings Service of GSA has continued to strengthen the agency’s relationship with key clients.  GSA personnel, especially PBS Commissioner David Winstead, have worked closely with clients such as the Federal Judiciary and the Department of Homeland Security to support their needs for more efficient space requirements. 

In my tenure as Administrator, I personally have visited GSA’s land ports of entry on the Nation's northern and southern borders to work with the Department of Homeland Security in developing a plan to provide greater security and to relieve delays and inefficiencies at the land ports of entry.  Years of inattention and rapid growth in trade with Mexico and Canada have turned these gateways into choke points where delays need to be reduced. I have made rectifying this situation one of my top priorities for 2008. Over the past several months, GSA has: encouraged state and local leaders to send us practical solutions to relieve congestion; and urged greater participation from the private sector, as infrastructure enhancements are a perfect opportunity for public-private partnerships. I want to thank the Members of this Committee for their support for the land ports of entry program and ask for your continued backing for this year’s request. 
 
GSA also continues to work with DHS to provide critically needed facilities for a consolidated headquarters campus at St. Elizabeths West Campus in the District of Columbia.  We were extremely disappointed that last year’s appropriations act did not fund this project even though the House version and Senate Committee versions of the bill had funding designated for this project.  The consolidation at St. Elizabeths is the Administration’s highest priority for new construction.  I hope we can be more convincing this year of the importance of this project to the safety of our communities and neighborhoods around the country.

Currently, elements of DHS are located in more than 6 million square feet of Federally-owned and -leased space in about 40 locations throughout the Washington, DC area.  In many instances these locations reflect the housing plans of the many different agencies that pre-dated the establishment of DHS as a consolidated agency.  DHS’s mission, the protection of our homeland, is vital and requires an integrated approach.  St. Elizabeths is a National Historic Landmark.  GSA is a steward of more than 425 of this nation’s historic properties, including 11 individually listed National Historic Landmarks and 52 buildings that contribute to National Historic Landmark districts.  As I told the Advisory Council on Historic Preservation last November, when I look at a project like the West Campus of St. Elizabeths, I’m filled with promise and pride.  We can preserve this wonderful landmark while strengthening national security and bringing economic development to a historically, culturally, and strategically valuable area of our Nation's capital.  And St. Elizabeths, as the new home for DHS, will offer hundreds of millions of dollars in avoided rent payments over the life of the project.  I sincerely hope this is the year we are able to move beyond the status quo, because Mother Nature and her deteriorating effects on these historic structures are the only winners now.

Our FY 2009 budget requests $8.378 billion in New Obligational Authority (NOA) for the Public Buildings Service.  The Construction and Acquisition Program reflects $620 million in NOA which will provide funding for critical facility projects for DHS, the Food and Drug Administration (FDA), and the Judiciary.  The request includes:

• $426 million for two agency consolidation projects
• $347 million DHS Consolidation in Washington, DC
• $79 million FDA Consolidation in Montgomery County, MD
• $74 million for 2 land ports of entry facilities in San Ysidro, CA and Portal, ND
• $110 million for the U.S. Courthouse in San Diego, CA
• $10 million for environmental remediation at the Denver Federal Center in Lakewood, CO

Within the Capital Investment Program, Repairs and Alterations (R&As) remain an important GSA priority.  To address the backlog of R&A projects, we request NOA of $692 million.  The R&A program focuses on the highest priority projects based on GSA’s continuing effort to evaluate and restructure our real property portfolio. 

The request includes:

• $215 million for three major modernization projects
• $51 million for the Eisenhower Executive Office Building in Washington, DC
• $153 million for the Dirksen Courthouse in Chicago, IL
• $11 million for the New Bern, NC U.S. Post Office and Courthouse
• $91 million for two limited scope projects
• $350 million for non-prospectus level projects
• $36.6 million for Energy and Water Retrofit and Conservation Measures

To support our operating programs, GSA requests $150 million for the Installment Acquisition Payments Program; $4.7 billion for the Rental of Space Program, which will provide for 188 million rentable square feet; and $2.2 billion for the Building Operations Program. 

Since passage of the Energy Policy Act of 2005, numerous legislative actions, executive orders, and policies have increased the energy, water, and fuel conservation goals for the Federal Government, culminating in the challenging Energy Independence and Security Act of 2007.  To address the new requirements for conservation in Federal buildings, PBS has refocused its energy program.  PBS is requesting $36.6 million for upgrading HVAC and lighting systems, advanced metering, water conservation, renewable energy projects, and many other items that will conserve energy in Federal buildings between major renovations.  This request is in addition to energy conservation funds incorporated into line item Repairs and Alterations project requests.

In addition to the Energy and Water Retrofit and Conservation program, PBS incorporates many sustainable design principles and conservation measures in the design, construction, repair, and management of Federal buildings.  For example, 100 percent of new construction projects in fiscal year 2007 were registered for LEED certification, which measures sustainable design and construction.  Energy audits and environmental risk assessments are performed on a regular basis to determine where resources should be focused.  Environmental training is provided to GSA employees and is shared with customer agencies.  A commissioning program is underway to ensure that building systems are working efficiently upon completion of a construction project.  These initiatives as well as other environmental measures will promote efficient energy use and environmental stewardship in the Federal inventory.  These programs not only benefit the environment but, because GSA ranks projects according to life-cycle cost effectiveness and gives preference to projects with the highest return on investment, every tax dollar spent now on energy conservation and efficiency generates savings over the life of these enhancements. 

As an example of some of the creative ways GSA is finding solutions to reduce the Federal Government’s reliance on fossil fuels, I would point to the Denver Federal Center (DFC).  This year’s budget request includes funding for environmental remediation at the DFC, but GSA has a vision to make the DFC one of the most sustainable campuses in the country by 2020.  A major component in attaining this vision is the DFC Solar Park.  The solar park is a one megawatt system comprised of 6,192 panels located on a six-acre strip of land adjacent to Sixth Avenue – a location visible to the thousands of commuters that travel this busy corridor every day.  On December 31, 2007, construction was completed and the solar arrays started producing power and earning renewable energy credits.  GSA is planning a dedication event for the solar park and I hope that members of this Subcommittee will be able to join us for the ceremony.

OPERATING APPROPRIATION REQUEST
While only $172.9 million of GSA’s proposed budget is funded through direct appropriations to GSA’s operating accounts, the activities they enable GSA to perform are critical. These funds support GSA’s Office of Governmentwide Policy, the Operating Expenses activities, the Electronic Government Fund, the Former Presidents, and the Federal Citizen Information Center (FCIC) Fund.
 
On a related matter, we are asking permission to fund all of the components of GSA's Office of Citizen Services from the FCIC Fund.  This realignment would involve a transfer of funding from GSA's Operating Expense appropriation and a renaming of the fund to the "Federal Citizen Services Fund."  This change will improve the budgeting and management of the Office of Citizen Services.  It also more properly reflects its citizen-oriented mandate and its broad range of services available via numerous channels, including on the web at USA.gov and GobiernoUSA.gov, and through email, publications, and telephone.

The $11.314 million net increase requested for GSA operating appropriations includes increases for the Federal pay raise and inflation, along with proposed program increases to:

• satisfy GSA’s assigned role in Executive Branch emergency response and recovery activities,
• provide additional staffing and training support for the Federal Acquisition Institute, supporting all Federal civilian agency’s acquisition professionals, and
• reflect for the addition of President George W. Bush to the Allowances and Office Staff for Former Presidents.

Federal Acquisition Service (FAS)
Since creating the Federal Acquisition Service from the Federal Technology Service and the Federal Supply Service in May of 2007, we have seen an increase in savings and organizational efficiencies.  FAS, under the leadership of Commissioner Jim Williams, is supporting our Federal customers as the premier acquisition source in the areas of fleet management, services, supplies, and technology.  We offer approximately 12 million supplies and services to our customer agencies throughout the U.S. and at worldwide locations that are strategically aligned with our military customers. 

Financially, FAS is continuing to refine its resource requirements to meet the needs of its customers.  As the Members of the Committee are aware, the Assisted Acquisition Service (AAS) portfolio has been operating at a loss over the last three years.  These losses have been a drain on the other FAS business lines, which are all designed to operate around the break-even point.  I am pleased we are bringing this area's budget into balance without losing any employees.  FY 2009 budget changes primarily consist of inflation adjustments, including the Federal pay raise, and projects required in order to maintain effective operations. 

The most significant change is the movement of FTEs from the AAS portfolio to other FAS portfolios and other parts of GSA to allow AAS to reduce its costs to break even. These changes, representing about 250 personnel, are occurring without buyouts or reductions in force.  I expect this realignment to be completed within FY 2008 and be fully implemented in the coming months, and I am pleased that all of this could be achieved without negatively impacting our workforce.    

Another key priority for the agency is the GSA VETS GWAC, a small business set-aside contract for service-disabled, veteran-owned small technology firms.  President Bush’s Executive Order 13360 directs all Federal agencies to develop and implement strategies to meet a goal of at least 3 percent for participation by service-disabled veteran businesses in Federal contracting.  GSA recently formed a “TWENTY-ONE GUN SALUTE TEAM” that will help GSA and other agencies achieve the President’s goal.  In GSA’s case, this represents $143 million going to firms owned by service-disabled veterans, and I am pleased to report that we are on target to exceed this goal in the current fiscal year. 

GSA is also working with small businesses as part of the Federal Strategic Sourcing Initiative (FSSI), where 11 of the 13 businesses holding blanket purchase agreements for office supplies are small businesses, including 8(a) certified, women- and veteran-owned businesses.  GSA has been on the forefront of the FSSI, working to develop multi-agency solutions for office supplies, as well as express and ground domestic delivery services and wireless telecommunications expense management (TEM) services.  The FSSI solution for delivery services involves more than 50 agencies and the Government saved approximately $16.7 million in Fiscal Year 2007 over the original GSA schedule prices.  And based on preliminary estimates, OMB believes agencies can save 25 to 40 percent off their wireless bills by using the FSSI TEM solution.

As well, GSA actively encourages our Federal agency customers to buy “green” when shopping for goods, services and workspace.  Through the use of a specially designed page within GSA Advantage, customers are able to shop by “Environmental Specialty Category.”

This application enables customers to search for items ranging from products and services that are environmentally friendly, which contain recycled content, or which are bio-based, to name a few options.  Customers are able to save time and make informed procurement decisions, as GSA has brought a wide range of products to a common procurement tool.  In addition to offering environmentally friendly products, GSA also has a Multiple Award Schedule (Environmental Services, GSA Schedule 899) that is dedicated to environmental services.  This schedule provides access to services from environmental clean up and remediation, to waste management and recycling services, to consulting services.    

The GSA Vehicle Leasing program (GSA Fleet), which enables agencies to fulfill their missions and meet their environmental responsibilities, is another integral component of GSA’s “green” solutions initiative. Currently, the GSA Fleet contains over 70,000 alternative fuel vehicles (AFVs) that are leased to customers to meet their transportation needs.  The use of AFVs across the Federal government helps to reduce petroleum consumption, introduces more efficient vehicles into the Federal fleet and reduces greenhouse gas emissions.  This GSA program also helps agencies better meet the requirements of President Bush’s Executive Order 13423, “Strengthening Federal Environmental, Energy, and Transportation Management.” 

SUMMARY STATEMENT
I began my tenure as the Administrator of General Services determined to fight against wasteful spending and duplication of costs within the Federal Government.  I am still committed to ensuring that the funds entrusted to GSA, representing the hard-earned tax dollars of our citizens, are used in a prudent manner.  My commitment is reflected in this budget request and in the GS Enhancement Act of 2008, a comprehensive legislative package sent to Congress earlier this year that would improve the operations of the Federal Government in areas ranging from increased child care center flexibility to emergency leasing during disasters.  My task, and the task of everyone at GSA, is to keep building on our recent successes and fulfill GSA’s mission to leverage the buying power of the Federal Government to acquire the best value for taxpayers and our Federal customers while exercising responsible asset management.  Approval of our budget request for FY 2009 is a vital component in helping us achieve our mutual goal of providing the best use of taxpayer funds.   

CLOSING STATEMENT
Mr. Chairman, this concludes my formal statement.   I look forward to continuing this discussion of our FY 2009 budget request with you and with the Members of the Subcommittee.