To testimony from government witnesses from the General Services administration of the federal bureau of investigation and the General Accountability Office about the cancellation of the fbi headquarters consolidation project and what comes next for housing the fbi. The Council Project will have replace the current fbi headquarters, the J Edgar Hoover building located at 935 pennsylvania avenue with the new hecklers in maryland or virginia. Involved in exchange for the J Edgar Hoover building with a private developer. They would then in turn have a campus like facility with proper safeguards for security, suitable for the focus of the Intelligence Agency more than simply a Law Enforcement. The new facility would also consolidate the myriad of fbi satellite offices which would make the bureau more efficient and save taxpayer dollars. No doubt that there is a need to replace the fbis existing headquarters. The men and women of the fbi would keep a safe deserving Office Building that meets their needs. Security and efficiency arguments for their case is clear. Bill is not clear is why the project was suddenly halted. When congress was not notified advance and what happens now. Senator should not to find out about a decision of this magnitude by reading about it in the washington post. Regardless as to how the decision was made and how poorly it was rolled out, it is possible that the mechanics of this deal led to this eventual outcome. The exchange of the dead edgar hoover building which was at the heart of this proposal, may have been doomed from the start. According to the gsa inspector general, only eight building exchanges of this type had ever been executed prior to the start of this project. None of those exchanges involve the building with more than 11 million. While there is one Significant Exchange in a pipeline, it is not yet complete. The exchange of the J Edgar Hoover building, a much larger building any of the other completed projects located in the heart of the nations capital, on one of americas most famous streets is in a completely different league. The questions now are where do we go from here . How do we find a solution . The fbi needs a new headquarters. How do we get there and what do we do in the interim to address the fbis needs . Does it make sense to pump millions of taxpayer dollars into the J Edgar Hoover building two upgraded only to tear the building down in a few years . Especially since there are over hundred Million Dollars in pending repair and maintenance needs in the building today. To the fbi pare back the many requirements for a new facility reducing its size and scope to make it more affordable for the american taxpayer . We look at alternative Financing Mechanisms such as a lease buyout arrangement where developers construct and please a facility fbi with the agency having the option to buy the facility years in the future . I look forward to the testimony today. Over the to recognize Ranking Member tom carper. I would like to thank you for all of the work youve done this issue. Not just for the fbi, not just for the district of columbia, virginia but for the country. We are blessed by the men and women that service in the fbi. Also the gsa and gao. I will set up from the officer. Weve been blessed by the wonderful leadership for years. To reconfirm the fbi director, Christopher Wray has been confirmed yesterday. We are grateful for the leadership and we continue service to the country. I think it is safe to say that we have more questions than answers surrounding this recent decision by the gsa to cancel the consolidated fbi headquarters. Hopefully we can learn some of the answers today. Prince georges county is home to two of three final locations for the fbi headquarters the other is in this will have a Significant Impact on the region. I have concerns. I know regarding the gsa procurement process. My concerns range from however, i would say that my largest concern is where do we go from here . So much energy has already been invested in this endeavor and we have this halted without an alternative plan. There is an obvious need to have the fbi out of the building to a new location to consolidate other fbi locations. Simply put, the hoover building is an aging building that no longer meets the needs of the fbi in the 21st century. It separate significantly from maintenance and employees and lack of investment. And the status quo of the fbis across a number of locations throughout the d. C. Metropolitan area. It is simply unacceptable for the agency to carry out its mission and improve our national security. He reminds me a little bit of a situation the department of Homeland Security had on the Governmental Affairs and they trying to consolidate the bigger part of their department and hopefully we can carry that out in the next couple of years. With increasing maintenance on the hoover building and expensive commercial leases for the fbi annexes and satellite offices, it would seem make sense to me to consolidate the fbi under one roof for something close to one roof, as stewards we should be ensuring that we do all that we can to save taxpayer dollars and create efficiency in government including respect to property management. Something that tom carper and i and others have worked on. For years with many of you. We also ensure that when congress provides Adequate Funding for Construction Projects it will help agencies meet their missions. For the last several years i think we said earlier strong advocates for consolidating Homeland Securitys headquarters in Saint Elizabeth, it just makes sense. It makes dollars and cents, enhances morale. And frankly the spaces that we are paying a lot of money for. Let me just close by saying that without Adequate Funding from congress in the years to come the fbi project, the Saint Elizabeth project may face unacceptable cost. This is on us in congress. Mr. Chairman, i look forward to hearing from this allstar lineup. I asked you all to do this all off the top of their heads, using no notes and accept no input from the staff. We will be on the way and get a lot done. Thank you very much. Thank you senator carper. Before we turn to witnesses i would like to welcome senator ben cardin. Thank you for Holding Hearing. After gsa announced that you and i spoke immediately about Holding Hearing i want to thank you for that. I want to thank Ranking Member tom carper for his cooperation in scheduling the hearing. I am going to start by expressing a great deal of frustration as to how this process has gone forward. The delay, mixed messages that we received on financing. And the ignoring of the action of this committee and of congress. As a result, there has been a waste of taxpayer money. Significant waste of money. We compromise the fbis ability to carry out its critical mission. That is plainly unacceptable. I think this committee deserves an explanation. I hope today that there will be a way forward that we can move towards a consolidated ability for the fbi in a very quick way. So that we can move on for the taxpayers of the country and the Important Mission that the fbi carries out. Let me elaborate on what i just said. The fbi has been in the hoover building since 1974. It lacks usable space. They are in 15 different lease locations around the district of columbia. Causing an efficiency in operations additional cost to taxpayers and inability to collaborate which is important for the fbi to carry out its function and it lacks the security that is necessary for the fbi. All of that is known, it has been known for many years peer there were reports done seven years ago, eight years ago. In 2011, the gsa, fbi came to this committee and said we need help. Do something about it. In 2011, six years ago, mr. Chairman this committee took action. We passed the prospectus in 2011. That prospectus said very clearly youre directed to proceed with lease transaction on federally owned land with consolidated headquarters facility can we recognize that. We gave you the authority. When we give you the authority we expect that it will be carried out. And that youre going to work with this committee. So what happens next . Gsa and omb said no, we do not want to use a leased facility we want to pay for it upfront. That is a heavy lift. With all of that money in the budget for congress to be able to put in an excess of 1 billion from the time now close to 2 billion to a facility. But that is what gsa and omb wanted. So we proceeded with that. Congress cooperated. And fiscal year 16, 390 million was put into the appropriation bill. And in fiscal year 17 523 million was put. Then they made it clear that they would provide the additional monies in fiscal year 18 necessary to complete the project. As the chairman pointed out this was based upon the exchange of the hoover building which added Additional Resources to this project. In 2013, gsa went forward with the request for information. Three sites were selected, several proposals were filed. Gsa came back to the committee in 2016 and said we should update the prospectus in order that it complies without gsa preceding. We passed the new prospectus for you in 2016. Given to all of the authority that you needed. So what happens next is hard for us to understand. President trumps fiscal year 18 budget contains zero for the fbi. That is, we do not exactly understand that if we are proceeding with a cash transaction. Congress was prepared to move forward as i have already indicated by the report language we put in, the monies that we put in. And then, what i dont understand at all, and i hope this is explained to me, on july 12, 2017 without notice the committee, gsa cancels the procurement. Cancels, why . Not enough money appropriated by congress . Congress appropriated a large sum of money. The president said they did not need any money because he put no money in the fiscal year 18 budget. Was it canceled because you want to go to a lease arrangement . We gave you that authority in 2011. To use the lease of 30. Why would you cancel and not come back to us and say we are changing directions . Are you saying we do not need a consolidated facility for the fbi . I hope that is not the case because the fbi needs a consolidated facility. I hope we get some answers. As to why it was handled in this way and how can we move forward in an appropriate way but in a way that recognizes the studies that have artie been done on these three locations. We already have a lot of the work done. I think gsa has created a legal problem not because of the word cancellation of the prospectus. I do not understand why you did that. But maybe you can explain how we will move forward and how you will respect the will of this committee and congress. We told you originally to use the lease purchase you came back and said you wanted to use appropriations. Who provided the money and thing you do not move forward. Hope we get answers. Thank you very much senator ben cardin. Now we will hear from witnesses. We have drawn is that mr. Michael gelber, richard haley, and mr. David weiss. I would like to remind the witnesses that your full written testimony will be part of the official hearing today. I would ask that you please keep your statements to five minutes. So we may have time for questions. Mr. Michael gelber. Thank you. Good morning chairman John Barrasso and members of the 20. Im the commissioner of the General Services administration. Thank you for the opportunity to testify today. I wish to discuss how gsa and the fbi jointly determined that the J Edgar Hoover building no longer meets the needs of the fbi. I will also discuss why gsa initially use the Exchange Process to help attain a replacement facility but ultimately reach the decision to cancel the procurement. Finally, i will discuss how gsa and the fbi are working together to me the fbis Housing Needs and Mission RequirementsGoing Forward. In 2011, in accordance with a resolution adopted by this committee, gsa issued a report of building project survey. The report evaluated the following four strategies. To deliver a modern headquarters for the fbi. Federal construction, lease construction, lease at 30 and net present value analysis of offer options determined that federal construction was the most costeffective approach to provide replacement consolidated headquarters facility to house the fbi. Under present scoring rules agreed to by the Congressional Budget Office, the budget committees and the Office Management of budget leased construction or ground leaseback transaction would require full funding upfront. A new fbi headquarters is longterm and will need. Federal ownership has been shown to be the lowest cost alternative. They seek to develop Capital Projects allow gsa to meet agency in the Mission Needs while pursuing the best value for the american taxpayers. To address Federal Capital needs federally gsa has a mechanism that is not being fully utilized for the Federal Buildings fun. Gsa has a significant background of unfunded projects. In fiscal years 2011 through 2017. Full access to gsa rent collections for investment and Capital Projects is necessary to maintain the portfolio and deliver priority missioncritical federal facilities. Gsa recognizes upfront funding can be used as an impediment to making key investments. Under current scoring rules is also the width of the federal government to record federal spending. This administration is considering a number of new federal tools to support better decisionmaking while maintaining transparency and fiscal restraint. Given these facts gsa determined in exchange of the hoover building for a new facility of up to 2. 1 million square feet was the most viable funding mechanism to consolidate personnel from the hoover building and multiple lease locations at the lowest possible cost. The Exchange Process can facilitate the disposal of Agency Properties that do not meet the federal need allowing gsa to leverage its own inventory to acquire new and more efficient facilities. Gsa work closely with the fbi, congress, state and local government and the private sector to meet project milestones. To this end, gsa selected three preferred sites and a number of preferred developers. As part of this process gsa also analyzed all three preferred sites. Pursuant to the National Environmental policy act. Earlier this year gsa communicated that should full funding be provided, we are ready to select a developer and make an award. In may of the Year Congress passed the fiscal year 2018 omnibus appropriations act. Under that the gsa received 200 million. The fbi received 323 million. Of a combined 1. 4 billion request. This resulted in a funding gap of 882 million from the requested level. Following the enactment of the fiscal year 2017 omnibus, gsa considered various potential paths forward to address the project 882 million funding gap. After internal agency deliberations gsa determined that moving forward without full funding would put the government at risk for project cost. Additionally, with gsa and the fbi expressed concerns about potential reduction in the value of the hoover property since developers were scheduled to receive the property once the fbi consolidated headquarters was concluded. They decided to cancel the procurement. It is fair to say that the cancellation of the procurement was not the desired outcome. Members of this and other congressional committees along with federal, state, local and private sector partners put a tremendous amount of time, energy, effort and resources into delivering a modern fbi headquarters. At this time gsa and fbi working together to meet the fbi short and longterm Housing Needs and Mission Requirements. This review includes deciding what investments to make in the hoover building now that we know the fbi will be housed there for longer than expected. Additionally fbi portfolio lease space is being evaluated as well as options to procure new headquarters for the fbi. In closing, gsa is committed to carrying out our mission of delivering the best value in real estate, the need for the fbi to have a modern headquarters remains. Gsa will continue to work with members of this committee, the fbi and others in the administration and congress to meet this need. I thanked the committee for the opportunity to testify today and i look forward to answering your questions. Thank you very much. Richard haley. Thank you chairman John Barrasso, and members of the committee for allowing me to appear before you on this project. Sitting before you today i am representing a number of individuals at the fbi that have spent years of making this project a reality. A reality that we have not lost sight of despite this current setback. Mr. Chairman, as you and senator ben cardin and senator tom carper have mentioned i will reiterate that the J Edgar Hoover building in when occupied in the mid1970s, ne