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Oversight of the courthouse construction program : hearing before the Subcommittee on Oversight of Government Management and the District of Columbia of the Committee on Governmental Affairs, United States Senate, One Hundred Fourth Congress, first session, November 8, 1995 online

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Online LibraryUnited States. Congress. Senate. Committee on GoveOversight of the courthouse construction program : hearing before the Subcommittee on Oversight of Government Management and the District of Columbia of the Committee on Governmental Affairs, United States Senate, One Hundred Fourth Congress, first session, November 8, 1995 → online text (page 1 of 23)
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S. Hrg. 104-601

OVERSIGHT OF THE
COURTHOUSE CONSTRUCTION PROGRAM



Y 4,G 74/9: S. HRG. 104-601

Dversight oF the Courthouse Constru...

HJ^ARING

BEFORE THE

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COMMITTEE ON
GOA^RNMENTAL AFFAIRS
UNITED STATES SENATE

ONE HUNDRED FOURTH CONGRESS

FIRST SESSION



NOVEMBER 8, 1995



Printed for the use of the Committee on Governmental Affairs







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U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON : 1996



For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-053633-2




S. Hrg. 104-601

OVERSIGHT OF THE
COURTHOUSE CONSTRUCTION PROGRAM



Y 4.G 74/9: S. HRG. 104-601



Oversight of the Courthouse Constru...

HEARING

BEFORE THE

SUBCOMMITTEE OX

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AXD THE DISTRICT OP COLUMBIA

OF THE

COMMITTEE ON
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE

ONE HUNDRED FOURTH CONGRESS

FIRST SESSION



NOVEMBER 8, 1995



Printed for the use of the Committee on Governmental Affairs



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U.S. GOVERNMENT PRINTING OFFICE
20-876 cc WASHINGTON : 1996

For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-053633-2



COMMITTEE ON GOVERNMENTAL AFFAIRS

TED STEVENS, Alaska, Chairman
WILLIAM V. ROTH, Jit., Delaware JOHN GLENN, Ohio

WILLIAM S, COHEN, Maine SAM NUNN, Georgia

FRED THOMPSON, Tennessee CARL LEVIN, Michigan

THAD COCHRAN, Mississippi DAVID PRYOR, Arkansas

JOHN McCAIN, Arizona JOSEPH I. LIEBERMAN, Connecticut

BOB SMITH, New Hampshire DANIEL K. AKAKA, Hawaii

HANK BROWN, Colorado BYRON L. DORGAN, North Dakota

Albert L. McDermott, Staff Director
Leonard Weiss, Minority Staff Director
Michal Sue Prosser, Chief Clerk



SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT MANAGEMENT AND
THE DISTRICT OF COLUMBIA

WILLIAM S. COHEN, Maine, Chairman
FRED THOMPSON, Tennessee CARL LEVIN, Michigan

THAD COCHRAN, Mississippi DAVID PRYOR, Arkansas

JOHN McCAIN, Arizona JOSEPH I. LIEBERMAN, Connecticut

HANK BROWN, Colorado DANIEL K. AKAKA, Hawaii

Kim Corthell, Staff Director

Linda J. Gustitus, Minority Staff Director and Chief Counsel to the Minority

Paulina Collins, Professional Staff Member

Frankie de Vergie, Chief Clerk



CONTENTS



Opening statements: Page

Senator Cohen 1

Senator McCain 3

Prepared statement:

Senator Levin 59

WITNESSES

November 8, 1995

J. William Gadsby, Director, Government Business Operations Issues, Gen-
eral Government Division, U.S. General Accounting Office, accompanied

by Jerry Stankosky 6

Joel S. Gallay, Deputy Inspector General, General Services Administration .... 10

Hon. Tom Stagg, District Court Judge, Western District of Louisiana 25

Hon. Roger W. Johnson, Administrator, General Services Administration 35

Hon. Robert E. Cowen, Judge, Third Circuit Court of Appeals, and Chairman,
Security, Space and Facilities Committee, Judicial Conference of the United
States; accompanied by Jerry Thacker, Assistant Director, Office of Facili-
ties, Security and Administration Services 38

Alphabetical List of Witnesses

Cowen, Hon. Robert E.:

Testimony 38

Prepared statement 135

Gadsby, J. William:

Testimony 6

Prepared statement 61

Gallay, Joel S.:

Testimony 10

Prepared statement 100

Johnson, Hon. Roger W.:

Testimony 35

Prepared statement 121

Stagg, Hon. Tom:

Testimony 25

Prepared statement 110

Thacker, Jerry:

Testimony 40

APPENDIX

Prepared statements of witnesses in order of appearance 61

Responses for the Record from GSA 147

Letter dated Dec. 15, 1995 to Senator Cohen from Thomas P. Griesa, Chief

Judge, U.S. District Court, New York, NY 166

Memorandum dated Oct. 26, 1995 to Chief Judge Griesa from Judge

Mukasey 170

Statement of the U.S. District Court for the Southern District of New York

regarding New Foley Square Courthouse 172

Statement of Judicial Council of the First Circuit regarding Nov. 8, 1995

testimony before Subcommittee on Oversight of Government Management

and the District of Columbia, Senate Committee on Governmental Affairs ... 213

(III)



IV

Page

Letter dated Dec. 15, 1995 to Senator McCain from P. Gerald Thacker,

Assistant Director, Administrative Office of the United States Courts '. 225

Courthouse Cost Comparison Chart 227

Review of Bidding and Contracting Practices on GSA's Major Construction

Projects 228



OVERSIGHT OF THE COURTHOUSE
CONSTRUCTION PROGRAM



WEDNESDAY, NOVEMBER 8, 1995

U.S. Senate,
Subcommittee on Oversight of Government
Management, and the District of Columbia,
OF THE Committee on Governmental Affairs,

Washington, DC.
The Subcommittee met, pursuant to notice, at 9:02 a.m., in room
SD-342, Dirksen Senate Office Building, Hon. William S. Cohen,
Chairman of the Subcommittee, presiding.
Present: Senators Cohen, McCain, and Levin.
Staff Present: Kim Corthell, Staff Director; Paulina Collins, Ma-
jority Professional Staff Member; Frankie de Vergie, Chief Clerk;
Elise J. Bean, Minority Counsel; Andrea Gerber, Majority Staff As-
sistant; and Roberta Quirk, Minority Legislative Fellow.

OPENING STATEMENT OF SENATOR COHEN

Senator Cohen. The Committee is going to come to order.

A city of magnificent Government buildings and monuments,
Washington is a testament to the view expressed some 300 years
ago by the English architect. Sir Christopher Wren. Wren wrote,
"Architecture has its political use; publick Buildings being the Or-
nament of a Country; it establishes a Nation, draws People and
Commerce; makes the People love their native Country."

As important as the grand and imposing edifices of our Nation's
capital are as symbols of our democracy, they do not assuage the
American people's anger with government waste and excess. The
excesses of government jeopardize the public's respect for and con-
fidence in the judgment of public officials.

Just as the U.S. Supreme Court building is an important symbol
of the American justice system, so too are the hundreds of federal
courthouses throughout the United States. Yet building extrava-
gant, and in some cases unnecessary, federal courthouse space
threatens to engender the same public disdain for the federal judi-
ciary as other revelations of wasteful spending have generated pub-
lic cynicism about other branches of government.

Today's hearing is going to examine the excesses of the federal
courthouse construction program, a program which spends hun-
dreds of millions of taxpayers' dollars each year on the construc-
tion, renovation, and expansion of federal courthouses. The General
Services Administration, the GSA, manages the federal construc-
tion program, and in partnership with the federal judiciary, GSA

(1)



has embarked on the largest courthouse construction initiative in
50 years.

Last year, the General Accounting Office testified before the Gov-
ernmental Affairs Committee that the judiciary's process for evalu-
ating and projecting long-range space needs was flawed. As a re-
sult, the Federal judiciary had overestimated its space needs for
the next decade by over 3 million square feet at a projected cost
of $1.1 billion over the 10-year period.

Today, the GAG will present the results of an audit examining
courthouse construction costs which I requested along with eight
other Members of the Senate and House. Among the problems
identified by GAG are inadequate management, inefficient over-
sight, inconsistent execution across the country, the failure to set
priorities, and limited controls on costs. GAO's findings show a
breakdown in the system at all levels — the judiciary, the General
Services Administration, and Congress.

Because of the flaws in the judiciary's long-range planning proc-
ess, we are building courthouses that are too big with courtrooms
that won't be used for many years into the future. The courthouse
in Alexandria, Virginia, for example, has a courtroom that will not
be needed for 17 years.

In addition, the Federal judiciary has yet to establish priorities
among competing projects. As a result, courthouses that are criti-
cally needed have not been funded, while other projects of less ur-
gency have been funded and built.

Because of the wide latitude given judges and regional GSA offi-
cials to make choices about the locations, design, construction, and
finishing of courthouse projects, the costs of projects vary signifi-
cantly. According to GAO's calculations, the courthouse in Shreve-
port, Louisiana, for example, was built for $31 million, a cost of
$134 per square foot. The courthouse being built in Foley Square,
New York, will cost over $400 million, at $235 per square foot.

This disparity in project costs is due, at least in part, to the addi-
tion of costly features and embellishments. As the GSA Inspector
General will testify, the Foley Square project, for example, has car-
peting created exclusively for the court at a cost of $114 per square
yard, adding $1.4 million to the project. In comparison, $20 per
square yard is the standard or average for better grades of carpet-
ing in other federal buildings.

GSA's failure to impose adequate cost controls is not limited to
the design of new courthouses, but continues after a construction
contract has been awarded. Changes to the Foley Square project
after the contract was awarded represented a 46-percent cost
growth above the original construction ceiling of $259 million.
These additional costs alone were nearly 4 times the total cost of
the Shreveport courthouse.

Understandably, courthouse design and costs are going to vary
from project to project and from region to region, but such disparity
among projects is unwarranted and extravagant add-ons are uncon-
scionable. GSA must learn to more appropriately balance the objec-
tive of meeting the needs of the federal judiciary, with the duty of
fiscal responsibility in order to protect taxpayer dollars. In other
words, in response to judicial requests, GSA must learn to say no.



In addition to the testimony of the GAO and the General Serv-
ices Administration IG on the problems they have identified in the
courthouse construction program, we are going to hear from Judge
Tom Stagg, a senior judge from the Western District of Louisiana.
Judge Stagg, who was involved in the design and construction of
the Shreveport courthouse, made a number of fiscally responsible
decisions to reduce the project's cost. That courthouse was com-
pleted on time and under budget.

Judge Robert Cowen on behalf of the Administrative Office of the
U.S. Courts (AOC) and GSA Administrator Roger Johnson will tes-
tify about the ongoing efforts to reform the program. I have worked
closely with Mr. Johnson on a number of issues, and I want to com-
mend him for his efforts. But as he has acknowledged, much more
needs to be done.

I look forward to hearing from both GSA and the AOC on their
ongoing efforts to reform the program. Until the needed reforms
are in place, however, I believe a moratorium is in order. I am
pleased that Mr. Johnson recently indicated his support for such a
"time-out," which in my view should be broadly applied to include
even those courthouses currently under construction. These
projects should be looked at carefully to determine whether any
cost savings can be achieved, and to the extent practicable, such
changes should be implemented.

In addition, GSA should not proceed with any new courthouse
project — including site acquisition, design, or construction — and
Congress should not authorize nor appropriate funds for any court-
house until, number one, the judiciary and GSA have set priorities
among the projects; number two, the GSA and the judiciary reform
the design standards to eliminate the wide latitude on finishes and
features which have a major impact on project costs; and, three,
GSA and the judiciary have examined ways to reduce the number
of courtrooms needed and other space-saving options such as shar-
ing libraries, both of which would result in substantial savings.

As I indicated before. Congress needs to stop funding projects
that have not been authorized, that have not been prioritized, and
for which it has not received detailed cost estimates and evalua-
tions.

Only by imposing such a moratorium on the program can we en-
sure that we are constructing projects that are truly needed, that
they are being built in the most cost-effective manner, and that
taxpayer funds are being well spent.

Senator McCain, do you have an opening statement?

OPENING STATEMENT OF SENATOR McCAIN

Senator McCain. Mr. Chairman, I want to thank you for holding
this hearing this morning. Examining the issue of courthouse con-
struction is long overdue. I have expressed concerns that we were
spending millions of dollars for elaborate courthouses that had not
been subjected to proper review and scrutiny, as you just described.
It is wrong. It is long overdue that we radically reform the Govern-
ment's courthouse construction program.

I want to especially congratulate two of the witnesses this morn-
ing: Roger Johnson, who I think has made an excellent and good-
faith effort, perhaps for the first time, to get these costs under con-



trol. And I am pleased that you have Judge Stagg here this morn-
ing, Mr. Chairman, who is an example of how we can rein in these
outrageous costs.

Mr. Chairman, I want to note two examples of courthouse con-
struction gone awry: the Boston courthouse and the Phoenix court-
house. The Boston courthouse is a facility that has cost the tax-
payers hundreds of millions of dollars for which the American peo-
ple built a boat dock and numerous other extravagant items. The
Boston courthouse was originally estimated to cost $163 million.
However, due to cost overruns and other costs, the taxpayers will
now be paying $218 million for this Taj Mahal.

Additionally, architectural fees for the design of this shrine,
originally budgeted at $8,633,000, have now exceeded $11 million.
And, unfortunately, we have no idea when the cost overruns will
end.

These reports also have listed the following proposed expendi-
tures: a six-story atrium, 63 private bathrooms, 37 different law li-
braries, 33 private kitchens, custom-designed private staircases,
$450,000 for a boat dock, $789,000 for original artwork, and $1.5
million for a floating marina with custom-made park benches, gar-
bage cans, and street lights, and a 2.6-acre park.

Mr. Chairman, I think those facts speak for themselves.

Let me just give you a quick chronology of what happened in the
Phoenix courthouse, Mr. Chairman, because I think it is an exam-
ple of how this system has gone so badly awry.

As we know, the correct procedure is for the Administrative Of-
fice of Courts to notify GSA of space needs. Space needs are deter-
mined by the Space and Facilities Committee and the Administra-
tive Office of the Courts; then the GSA sends a prospectus to the
Senate Environment and Public Works Committee, etc. And then
the Environment and Public Works Committee, in order to match
House procedure, authorizes each project prospectus by prospectus.
Then the Appropriations Subcommittee on Treasury, Postal Serv-
ice, and General Government Appropriations funds the project.
That is, as we know, the general procedure.

In the case of the Phoenix courthouse, Mr. Chairman, the Admin-
istrative Office of U.S. Courts approached the GSA on a need for
a courthouse. The Senate Appropriations Subcommittee appro-
priated $3.2 million for fiscal year 1992 in reprogramming for site
acquisition for the courthouse. The then-Chairman urged the GSA
to procure the site in 1993 in the hearings on the fiscal year 1993
GSA appropriations. The Administrative Office of the Courts and
GSA in a document, unsigned, not official, and not noting any
scoping, design, or timing information, but noting the cost of the
building would be $198 million, and they requested authority to
spend $8.5 million.

On July 22, 1993, no prospectus having been sent to the Senate
Environment and Public Works Committee by GSA, the Senate Ap-
propriations Subcommittee on Treasury, Postal Appropriations ap-
propriated $199 million based on GSA- and court-supplied non-offi-
cial estimates. Please keep that $199 million in mind, Mr. Chair-
man.



In July 1993, I proposed an amendment mandating that the
building appropriations be authorized before being appropriated.
That amendment failed by a vote of 65-34.

On August 3, 1993, there was an amendment on the floor to
transfer $19 million from the Phoenix courthouse project to the
Sacramento courthouse project. No rationale given, no reason, they
just took $19 million, shifted it from the Phoenix courthouse to the
Sacramento courthouse project.

In 1994, the GSA determines that the Phoenix courthouse will
cost $120 million, not $199 milHon. On January 11, 1994, the GSA
Administrator Roger Johnson wrote to me requesting help due to
the fact that GSA has not been presented the scope or timing of
this Phoenix courthouse.

On February 7, 1994, the Administrative Office of the United
States Courts notifies our office that it has transmitted appropriate
information to the General Services Administration.

On May 4, 1994, at a Government Affairs Committee hearing,
Ms. Julia Stasch, Deputy Administrator of General Services Ad-
ministration, testified that the GSA has now determined the Phoe-
nix courthouse will be $111 million. And on May 26, the Senate
Environment and Public Works Committee passes a resolution au-
thorizing expenditures of $100,800,000 for the Phoenix courthouse.
That money in addition to the $8 million authorized by the Com-
mittee means the Phoenix courthouse is now authorized to be built
at a cost of $108 million.

Mr. Chairman, we had blithely appropriated $198 million. We
now find that the courthouse costs $90 million less. Now, all I can
say is, Mr. Chairman, I applaud yours and, I want to say again,
Roger Johnson's effort to get this under control. I agree with you
that we need to put a moratorium on until we get this procedure
squared away. We can no longer squander taxpayers' dollars in
projects such as the one I just described, and especially the Boston
courthouse, which is an absolute obscene waste of taxpayers' dol-
lars.

I thank you, Mr. Chairman.

Senator Cohen. Thank you. Senator McCain.

To summarize what we both said, there has been a lack of appro-
priate planning for courthouse construction, a lack of prioritizing
by the federal judiciary, a lack of appropriate procurement, a lack
of control or oversight by GSA, and a lack of congressional respon-
sibility. So there is blame to go all across the board which has ac-
counted for the waste, as Senator McCain has indicated, of tens of
millions or hundreds of millions of dollars. This hearing is timely,
it is important, and we are going to welcome our first panel: J. Wil-
liam Gadsby, who is going to testify on behalf of the General Ac-
counting Office, and Joel Gallay, Deputy Inspector General of the
GSA.

Mr. Gadsby, would you begin, please?



TESTIMONY OF J. WILLIAM GADSBY,» DIRECTOR, GOVERN-
MENT BUSINESS OPERATIONS ISSUES, GENERAL GOVERN-
MENT DIVISION, U.S. GENERAL ACCOUNTING OFFICE

Mr. Gadsby. Thank you, Mr. Chairman. I would like to introduce
the people that are with me. To my immediate right is Jerry
Stankosky. Jerry heads up the group that does all of our public
buildings issues work. Seated to his right is Dan Schultz, and Dan
was the project leader for our study of courthouse construction that
we did at your and other Senators' and House Members' request.

I have a very long statement, Mr. Chairman. I would like to ask
that it be included in the record in its entirety, and I will give the
highlights.

Senator COHEN. It will be included.

Mr. Gadsby. Mr. Chairman and members of the Subcommittee,
we welcome this opportunity to appear before you today to discuss
the results of our recently completed work on Federal courthouse
construction. As you know, the General Services Administration, in
response to the judiciary's growing space needs, has begun a major
courthouse construction initiative that could cost $10 billion over
the next 10 to 15 years.

My testimony will focus on three areas: the approach for meeting
Federal courthouse needs, the controls over courthouse construc-
tion, and the current efforts to improve this initiative. Our observa-
tions are based on an analysis of data for the 47 new courthouse
construction projects that were funded between fiscal years 1992
and 1995 and detailed case studies of 10 courthouse projects.

Mr. Chairman, although this major courthouse construction ini-
tiative began in the late 1980's, there has not been and still is not
a comprehensive strategic plan to guide congressional decisionmak-
ing. Both GSA and the judiciary have planning processes, but those
processes have yet to develop a capital investment plan that puts
individual projects in some long-term strategic context, sets prior-
ities among competing projects, and identifies short-term and long-
term project funding needs.

As we noted in our past work, absent this information. Congress
has little practical choice but to consider projects individually, and,
since there is no articulated rationale in a long-term strategic con-
text for GSA's proposed projects, other projects can seem just as de-
fensible. These circumstances can facilitate the substitution or the
addition of projects for which there has been little or, in some
cases, no planning.

Our analysis of the 47 new courthouse construction projects
funded between 1992 and 1995 showed that Congress provided ini-
tial funding for many of them before the judiciary's planning and
oversight process was completed, without GSA funding requests or
prospectuses, and before projects were approved by the House and
Senate Public Works Committees, as has been alluded to in the
opening statements.

Let me summarize our analysis. First, related to the judiciary's
planning and oversight process, 22 of the 47 projects received ini-
tial funding before the chief district judges approved the long-range
facility plans identifying court space needs in districts where those



*The prepared statement of Mr. Gadsby appears on page 61.



projects were located. Thirty-five projects received initial fiinding
before the circuit judicial councils formally approved the need for
them. Although these councils eventually approved the need for 11
of the projects, 24 had still not been approved as of the end of our
review.

Moving now to GSA, we found that numerous projects were not
fully subjected to its planning processes as well. Congress provided
initial funding for 25 of the 47 projects without the benefit of GSA
prospectuses that support GSA funding requests and justify project
scopes and costs. Eleven of these 25 projects received initial fund-
ing on the basis of GSA 11(b) reports recommending construction
in future years. The 11(b) reports contained only preliminary cost
estimates and were not part of GSA's request for funding. The re-
maining 14 projects received initial funding without GSA
prospectuses or 11(b) reports on the basis of what appeared to be
informal communication among officials from the judiciary, the
GSA, and the Congress.

In total, Congress provided about $2 billion for these 47 projects;
over $800 million of this funding was appropriated without GSA
funding requests.

Finally, our analysis showed that 33 of the 47 projects received
initial funding before they were approved by both the Senate and
House Public Works Committees. Twenty of these projects were
subsequently approved by both of these committees after appro-
priations were provided.

I would like to stress at this point that if all the projects had
been approved by the Public Works Committees and fully subjected
to the judiciary's and GSA's planning processes, better oversight
would have occurred and Congress would have had better informa-
tion to assure itself that the projects were justified. However, as we
have reported in the past, and as I mentioned at the outset, GSA's
annual funding requests and related prospectuses have not pre-
sented projects within a long-term strategic context and have not
provided adequate rationale for their relative priority.

Senior GSA and AOC officials both acknowledged that there were
other projects that were more urgently needed than the court-
houses that were funded, and that current funding processes do not


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Online LibraryUnited States. Congress. Senate. Committee on GoveOversight of the courthouse construction program : hearing before the Subcommittee on Oversight of Government Management and the District of Columbia of the Committee on Governmental Affairs, United States Senate, One Hundred Fourth Congress, first session, November 8, 1995 → online text (page 1 of 23)