Joint Oversight Hearing on Managing Costs and Mitigating Delays in the Building of Social Security’s New National Computer Center
JOINT OVERSIGHT HEARING ON
SUBCOMMITTEE ON SOCIAL SECURITY
COMMITTEE ON WAYS AND MEANS
SUBCOMMITTEE ON ECONOMIC DEVELOPMENT,
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED TWELFTH CONGRESS
February 11, 2011
Printed for the use of the Committee on Ways and Means
COMMITTEE ON WAYS AND MEANS
KEVIN BRADY, Texas
|XAVIER BECERRA, California
LLOYD DOGGETT, Texas
SHELLEY BERKLEY, Nevada
FORTNEY PETE STARK, California
C O N T E N T S
The Honorable Patrick P. O’Carroll Jr., Inspector General, Social Security Administration
Kelly Croft, Deputy Commissioner, Social Security Administration
MANAGING COSTS AND MITIGATING DELAYS IN THE BUILDING
OF SOCIAL SECURITY’S NEW NATIONAL COMPUTER CENTER
February 11, 2011
U.S. House of Representatives,
Committee on Ways and Means,
The subcommittees met, pursuant to call, at 10:05 a.m., in Room 1100, Longworth House Office Building, Hon. Sam Johnson [Chairman of the Subcommittee on Social Security, Committee on Ways and Means] presiding.
[The advisory of the hearing follows:]
*Chairman Johnson. Good morning. Welcome to the first hearing of the Ways and Means Subcommittee on Social Security in the 112th Congress. I especially want to welcome the new members of our subcommittee and our colleagues from the Committee on Transportation and Infrastructure, the Subcommittee on Economic Development, Public Buildings, and Emergency Management, especially the new chairman, Jeff Denham, who is sitting right here.
I also want to say how much I look forward to working with our new subcommittee ranking member and my good friend, Xavier Becerra. Thank you for being here.
As our nation ages, more Americans are depending on Social Security benefits and the services they paid for through their hard‑earned wages. To deliver those benefits and services, Social Security needs technology that it can count on.
Because I take technology needs of Social Security very seriously, last year I toured the National Computer Center in Baltimore, Social Security’s technological nerve center. This center allows the agency to process applications, pay benefits, and store secured data on most U.S. workers. Two weeks ago I also visited the second support center in North Carolina. Yet, as we know, Social Security’s 30‑year‑old National Computer Center is past its prime, and that is why the Congress authorized $500 million of taxpayer funds to build a new state‑of‑the‑art data center.
Just over a year ago, our subcommittees held a similar joint hearing to check in on Social Security’s and the General Services Administration’s progress. Back then we couldn’t get good answers ‑‑ I hope we can today ‑‑ as to why they decided to locate the new center away from Social Security’s headquarters in Baltimore, which I found out just this morning that they have over a couple hundred acres up there. So I don’t know still today why we couldn’t have found a place there.
Now the project is already delayed a year, and that is before a single shovel has hit the ground. All the while, the more time passes, the higher the risk of the National Computer Center failing.
If any of you have ever been up there, it was a firetrap. And I think people fail to realize that if that place burned down, we would lose all our onsite Social Security records. That is why we built the second center down in North Carolina, which still hasn’t got the capability to come up immediately.
While progress has been made, it would still take four days to restore critical operations, and that is not good enough, and Social Security knows it. Americans want, need, and deserve better, and today we will learn more about the plans to improve.
Taxpayers are investing in a $500 million infrastructure upgrade. The last thing they deserve is another failed stimulus project due to further delays or future cost overruns. Social Security owes it to the American taxpayer to make good on this investment.
Today we need to find out whether GSA and Social Security are doing everything they know how to do to make this project right and on time, if not ahead of time. This project should have started yesterday. And I want to thank all the witnesses in front of me for joining us today and presenting their expert testimony.
I would like to at this time ask Ranking Member Becerra, would you care to make a statement, sir? You are recognized.
*Mr. Becerra. Thank you, Mr. Chairman.
This is a timely topic for our first hearing. I appreciate, Mr. Chairman, that you are continuing the tradition of this subcommittee of conducting bipartisan oversight of the Social Security Administration (SSA) in the interests of the American people.
The new data center that SSA is constructing in conjunction with the GSA, the General Services Administration, is vitally important to the continued operation of the Social Security Administration. Today, 54 million people rely on SSA to keep America’s promises to all Americans and to deliver each month the money they have earned and expect from their Social Security system. They have contributed for years into the system from their own paychecks.
In addition, 160 million workers rely on SSA to keep accurate records of their earnings so, in the future, they will receive the full benefits they too have earned. We know they will receive the benefits they have earned because their contributions over the years have built up a trust fund with over $2.6 trillion in Treasury bonds, the safest investment there is, sought after by investors throughout the world. Today it is not an exaggeration to say that Social Security, and the Social Security number, touch virtually every American in this country.
I think we can all agree about the importance of this data center, the replacement project itself, and of course, everything it means to the American people. SSA’s existing primary data center is nearing the end of its useful life and is increasingly vulnerable to catastrophic failure. Congress acted wisely by responding swiftly to the needs for the replacement center by providing full funding for construction and a down payment on equipping the center in the Recovery Act.
This funding has allowed the project to get started immediately, which reduces the danger that SSA will be without full data center capability, and building the data center will create jobs that strengthen our economic recovery. I understand that there have been some delays in selecting a site for the new center, and I am pleased that things are once again moving ahead.
I hope our witnesses will give us more information on the project’s timeline and budget, as well as their plans for preventing future delays. Keeping to project timelines is critical to ensuring that SSA can continue to effectively serve workers and beneficiaries today and in the future.
I look forward to hearing a progress report on the project today. Mr. Chairman, I yield back.
*Chairman Johnson. Thank you, Mr. Becerra.
Chairman Denham, welcome aboard. Congratulations. Would you like to make a statement this morning? You are recognized.
*Mr. Denham. Thank you. First let me start by thanking you, Mr. Chairman, for holding this joint hearing on managing costs and mitigating delays in the building of the Social Security Administration’s National Computer Center.
This is the second joint hearing of our subcommittees. We have had to provide oversight of this important project. The National Computer Center is critical to supporting all of SSA’s functions, including storing data and processing billions of transactions annually.
The NCC must be reliable and operational 24/7, 365 days a year. However, the current data center is aging and outdated, lacking key redundancies and failing to meet current standards for data centers.
The Recovery Act, which included the $500 million for the replacement of the NCC in SSA has engaged GSA in locating, designing, and building a new data center. Millions of Americans and employers rely upon the proper function of NCC every day.
Unfortunately, only last week did GSA select a site, more than a year after the original date for site selection, and we know that delays often produce cost overruns. We must ensure this project is completed on time and within budget. We cannot afford any further slip in the timeline, and we cannot afford any added cost. The operations of this data center are too critical for the American people, and this project is too costly, to allow any more delays.
The GSA and SSA must work together to identify risks in the process and either avoid or mitigate against them. I look forward to hearing from the witnesses today on this important issue. As well, I look forward to hearing what is going to happen with the current facility and the 260 acres that it sits on.
We will also be focused on liquidating any unused, excessive, or surplus properties and those properties which are not deemed excess, surplus, or underutilized yet. We want to have a good track record moving forward.
*Chairman Johnson. Thank you. I appreciate your comments.
Ranking Member Holmes Norton, would you care to make a statement? You are recognized.
*Ms. Norton. Thank you very much, Mr. Chairman. And I am pleased to sit with you, Mr. Chairman, and with our friends on the Ways and Means Social Security Subcommittee again to examine the process for replacing the Social Security Administration’s current data center.
Today’s hearing is a followup to our December 15, 2009 hearing on whether to locate the NSC on the current campus in Woodlawn, Maryland or to ensure that a full and open competitive process is used for this significant project. The reason our subcommittee is here is that the Subcommittee on Economic Development, Public Buildings, and Emergency Management has jurisdiction over the General Services Administration now.
This project was able to begin at all because it received $500 million in a direct appropriation to the Social Security Administration, so urgent was the need. And indeed, this is the largest single building funded under the Recovery Act.
GSA assists agencies in construction when they get direct appropriations because these agencies are not in the business of building or developing. And we are pleased that GSA is indeed deeply involved in this project. It is very, very rare that there is a direct appropriation to an agency rather than to the GSA in order to do the work for the agency because of its expertise.
After our last joint hearing and at our request, GSA conducted a feasibility study of the Woodlawn campus that examined the budget and schedule risks the project might face staying on or leaving the Woodlawn campus. As a result of the feasibility study, the GSA and SSA decided on an offsite location ‑‑ away from the campus, that is ‑‑ for the NSC because that option posed the least risk to both budget and schedule, they believe.
The existing NCC, originally constructed in the 1970s, is housed in an antiquated building that is very energy‑inefficient and otherwise in urgent need of replacement. A 2008 study commissioned by the SSA concluded that the NSC is an aging facility with significant electrical and mechanical challenges, including several single points of failure, that could force the NSC to point down should any of these points fail.
This near‑emergency situation requires GSA and SSA to stay on schedule. Both SSA and its inspector general believe that the present structure is inadequate to meet the service needs of a 21st century computer facility, and that it poses a significant risk to operations. In the present structure, the security of 460 million records of earnings and benefits data for almost 57 million beneficiaries and the continuity of operations are both at significant risk.
After the decision was made to locate the NSC offsite, GSA narrowed the available sites to two locations, a new site in Woodlawn, Maryland and a site in Urbana, Maryland. Last week SSA and GSA notified Congress of their decision to locate the NSC at the Urbana, Maryland site 33 miles from SSA headquarters.
The SSA IG believes that the site selected for NSC is acceptable because of its existing infrastructure and proximity to highways, although he apparently, in his latest report, has some compunctions.
Today we will look closely at the site selected and will examine whether the critical project can stay on schedule and how GSA and SSA will mitigate risk. Among the most obvious questions is why GSA and SSA selected this site out of 150 sites that were initially considered, and why the agencies felt that this is the best side for the NSC.
I look forward to learning more about this project from today’s witnesses, and I thank you, Mr. Chairman.
*Chairman Johnson. Thank you.
Before we move on to our testimony, I want to remind our witnesses to limit their oral testimony to five minutes. And without objection, all written testimony will be made part of the permanent record.
We have one panel today. Our witnesses are seated at the table: the Honorable Patrick O’Carroll, Inspector General of Social Security Administration ‑‑ he made me coffee down in Carolina; David Foley, Deputy Commissioner of the Public Buildings Service, U.S. General Services Administration; and Kelly Croft, Deputy Commissioner, Systems, Social Security Administration. Thank you for being here today, all three of you, and we appreciate your testimony.
Mr. O’Carroll, you may proceed for five minutes.
STATEMENT OF THE HONORABLE PATRICK P. O’CARROLL, JR., INSPECTOR GENERAL, SOCIAL SECURITY ADMINISTRATION
*Mr. O’Carroll. Good morning, Chairman Johnson, Chairman Denham, Congresswoman Holmes Norton, Congressman Becerra, and members of both subcommittees. Thank you for the invitation to testify today. I would like to welcome the new members of the 112th Congress and the new members of both subcommittees.
The replacement of SSA’s National Computer Center, or NCC, is the agency’s most critical IT investment over the next five years. Several factors make building a new data center imperative for SSA. Those factors are: increasing agency workloads, expanding communication and data services, and structural and electrical capacity issues at the current NCC.
The NCC is more than 30 years old and might soon be unable to support SSA’s operations, and as time passes, the risk of a lengthy outage at the aging data center increases. An extended outage at the NCC could have devastating consequences affecting the lives of Americans who depend on Social Security.
Given the infrastructure concerns of the NCC, SSA has three main challenges to plan for over the next five years. Those challenges are: delivering the agency’s new National Support Center, or NSC, on time; maintaining the current NCC with repairs and improvements; and further developing reliable backup options if an extended NCC outage occurs.
SSA and GSA recently announced it would locate the agency’s new NSC in Urbana, Maryland. GSA said it anticipates completing construction of the NSC by September 2014, and SSA expects to complete the IT migration of the facility by July 2016.
For the project to be completed on time, GSA and SSA need to plan for contingencies that can arise during the construction and IT migration. Solutions to such contingencies should be determined in advance before the project stalls. These possible project delays might include: excavation challenges, problems with utility installations, or weather‑related issues. SSA and GSA must also ensure that builders meet construction due dates.
SSA’s timeline for project completion means relying on the current NCC for at least another five years. Therefore, SSA must do all it can to mitigate the risk of an extended NCC outage.
Since 2009, SSA has taken many steps to address the structural and technical issues at the NCC. Those actions include: replacing electrical feeder cables and electrical panel breakers; replacing the NCC roof; monitoring the building’s foundation, plumbing, and HVAC system; and performing annual building inspections with technical experts. SSA performs proper maintenance of the NCC. For the facility to be maintained through 2016, the same level of management and oversight should continue until the new NSC is built and operational.
If the NCC sustains an outage before the new data center is completed, the agency would then rely on the Second Support Center, or SSC, until data and applications are recovered. The SSC is a co‑processing center, but SSA has purchased equipment and is performing tests so the SSC will be able to operate as a fully functional backup data center within the next two years.
Recent disaster recovery tests at the SSC show that SSA can recover critical operations in a little less than five days. Over the next year, the agency has said it plans to reduce that five‑day period to about one day.
SSA has also indicated it is exploring several options if an extended outage occurs at the NCC, including using generators or entering into a contract with alternate hot‑site vendor.
In conclusion, the sustainability and expansion of SSA’s IT systems are critical to the agency’s ability to meet its goals and fulfill its mission. That mission affects nearly all Americans every day. GSA and SSA need to present a clear strategic vision on how they will deliver the new data center on time and how to mitigate the risks of relying on the aging NCC.
With long‑term planning and proactive management, we should be able to avoid a repeat of the current situation at the NCC. My office will continue to work with you and SSA to make sure that this vitally important project is completed timely and efficiently.
Thank you again for asking me to testify today, and I will be happy to answer questions.
[The statement of Mr. O’Carroll follows:]
*Chairman Johnson. Thank you, sir. I appreciate it.
You indicated that ‑‑ I know I am not supposed to ask questions yet, but I am going to.
*Chairman Johnson. You indicated that their recovery time is five days. And when I was down there, Mr. Croft, you indicated to me you thought they could do it in two.
*Mr. Croft. Sir, we are at four days now, and we are working towards one.
*Chairman Johnson. Okay. Thank you.
*Mr. O’Carroll. And when we did our report on this, sir, we observed the testing, which is what we are reporting. That was when they were at four‑plus days, which is why we rounded it to five, but from talking to the agency, they have brought that five down to four. But at the time, it was still almost five days.
*Chairman Johnson. Okay. Four legislative days is five.
Mr. Foley, you are recognized for five minutes.
STATEMENT OF DAVID FOLEY, DEPUTY COMMISSIONER OF THE PUBLIC BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION
*Mr. Foley. Thank you. Good morning, Chairman Johnson, Chairman Denham, Ranking Members Becerra and Norton, and members of the subcommittees. I am pleased to have the opportunity today to discuss the considerable progress GSA has made in delivery of the new SSA National Support Center.
I am glad to report the project is on budget, and GSA and SSA have recently reached two significant project milestones in the site selection and procurement for the data center. After an extensive due diligence process, we recently announced the site selection of the new Support Center at Urbana in Frederick County, Maryland. Last month GSA also issued the first phase of our design/build construction solicitation.
GSA and SSA are working closely together to ensure we achieved our new project milestones while remaining on budget and minimizing risks to deliver an efficient, modern, and secure data center to support SSA in meeting their mission goals and providing the best value to the taxpayers.
GSA diligently sought locations that would meet SSA’s unique requirements for a data center. We conducted an extensive evaluation of potential sites within a 40‑mile radius of Woodlawn, Maryland. We reviewed government‑owned properties, contacted local communities, and requested expressions of interest through Federal Business Opportunities online.
These efforts resulted in over 150 potential sites that were evaluated against specific criteria, including: site characteristics, location and accessibility, energy and utilities, security and operations, environmental impacts, local planning and development, land and site development costs, and schedule risks.
In 2009, at these committees’ request, GSA conducted a study to examine the possibility of locating the new data center at the current campus. In April of the following year, we delivered this study which showed that building on the SSA campus would present significant concerns and high risk, including the possible disruption of mission‑critical operations.
Although GSA and SSA remain committed to the presence of SSA at the Woodlawn campus for current mission needs and future expansions, the study showed that the data center would be better served at a new site where risk and cost would be minimized, and the data center could be completed more quickly.
Upon the completion of this study and with the support of these committees, GSA continued to press forward with our review of potential sites. Our deliberative process led to a short list of two sites: Johnnycake Road in Baltimore County and Urbana in Frederick County.
Given the importance of this project and the potential impacts of a site selection decision, GSA initiated an environmental assessment last August that we completed in January where the GSA solicited public comment and assessed all environmental impacts and advantages and disadvantages for each site.
After a full and fair analysis and in coordination with SSA, GSA selected Urbana as the site for the new data center. This site will most effectively meet SSA’s needs and best serve the interests of the taxpayers.
Urbana not only meets SSA’s requirements but offers a variety of benefits, including its physical site characteristics, available infrastructure, and favorable environmental conditions. Additionally, Urbana is most favorable in minimizing risks, cost, and schedule impacts.
Now that we have announced the site, we are initiating the acquisition of the property, which we anticipate to be completed this June. We are also moving forward with the next phase of this project with the procurement for the design and construction of the facility.
GSA and SSA worked collaboratively, consulting with leading data center experts to develop a program of requirements for a design/build solicitation. This POR was completed last August. The project will meet all of SSA’s requirements and all of the appropriate security and IT redundancy standards for a data center of this type, as well as achieve a minimum of LEED Gold certification and the goals of the executive orders for sustainability and energy.
The National Support Center project is based on an integrated design/build delivery method that includes a design firm and a constructor contractor. GSA is using a two‑phase procurement process that evaluates the contractor’s qualifications first to establish a short list of most highly qualified bidders, and then considers technical proposals and price in the second phase to achieve the overall best value for the government. This process began last month when GSA issued a request for qualifications, inviting contractors into the bidding process.
We look forward to the next major milestones on this project. Phase 2 of the design/build solicitation is scheduled for April, site acquisition is scheduled for June, and award of the design/build contract is on track for next January, with substantial completion in September of 2014.
GSA appreciates the opportunity to come here today to highlight the considerable progress we have achieved on this project. We look forward to continuing to work with you on the successful delivery of this data center.
Chairman Johnson, Chairman Denham, Ranking Members Becerra and Norton, and members of the subcommittees, this concludes my statement, and I will be pleased to answer any questions you may have.
[The statement of Mr. Foley follows:]
*Chairman Johnson. Thank you, sir. We appreciate your comments.
Mr. Croft, thank you for being here, and you are recognized. And I appreciate your help down south.
*Mr. Croft. Thank you.
*Chairman Johnson. Pleasure.
STATEMENT OF KELLY CROFT, DEPUTY COMMISSIONER FOR SYSTEMS, SOCIAL SECURITY ADMINISTRATION
*Mr. Croft. Chairman, Ranking Members, and Members of the Subcommittees, thank you for the opportunity to share information about our data center replacement project. My name is Kelly Croft, and I am the Deputy Commissioner for Systems at Social Security Administration (SSA). I have worked at the agency for 28 years and have been in my current job since January of 2010. I am responsible for safeguarding the information assets of Social Security, and also delivering information technology (IT) services across the agency.
At Social Security, our reliance on technology has dramatically evolved since I joined the agency as a front‑line public service worker in the 1980s. In those days, I took retirement and disability claims on paper forms and assembled cases in thick paper folders.
Today, the vast majority of our work is electronic, and we are extraordinarily more efficient because of it. Our claims process is virtually paperless. We have a number of highly regarded Internet applications for public use, and it is not unusual for us to process over 150 million computer transactions in a single day.
To be blunt, if our computer systems are down, then we are pretty much out of business. We can still talk to people in person and on the telephone, and we do have contingency arrangements to ensure established payments go out. But we cannot do things like compute and pay new claims, change direct deposit accounts, issue Social Security cards, or even answer specific questions about beneficiary records. Pretty much all we do relies on high availability computer systems.
Even an hour of computer outage for us is a very big deal, and at the massive scale we operate on, with over 50 million seniors and disabled people to serve, an extended outage of multiple days would have national implications.
The hubs for our entire IT infrastructure are our two data centers, one in Maryland and one in North Carolina. Data centers are special buildings that require significantly more security and mechanical features than normal office space. For example, data centers should have sophisticated electrical systems and generators. They should also have advanced fire suppression systems. In addition, the equipment in data centers produce large quantities of heat, so they need extremely robust air conditioning.
Our North Carolina center opened in 2009, and it is a modern, well‑designed facility. On the other hand, our Maryland center is 30 years old, and the building is fraying. I want to emphasize that the computers inside our Maryland center are modern; but if the building fails because of a plumbing, heating, ventilating, and air conditioning, or electrical breakdown, it won’t matter how capable the computers are. They simply won’t work.
Both of our centers function 24/7 and process a portion of our daily computing workload. Both also have the reserve capacity to run the critical systems of the agency in the event of a long‑term outage at the sister facility. If we lost our Maryland data center, it would currently take us four days to recover critical operations in North Carolina. We are working to lower our recovery time to just one day.
As bad as any days of national outage would be, we would also be left with just one remaining data center and no viable backup for that. In light of the wake‑up call that came with 9/11 and for something as important to the country as the delivery of Social Security services, it is crucial that we always have a viable backup position.
We were relieved when Congress appropriated $500 million in 2009 to replace our aging Maryland facility with a state‑of‑the‑art data center, a facility that we expect will faithfully serve the American public for decades, just like our old building has.
We are relying on the expertise of our General Services Administration (GSA) colleagues to manage the process for acquiring land and building our replacement data center. We provided our requirements to GSA, and I assure you we seek only a safe, energy‑efficient, and modern data center that will be sized to handle current and projected computing workloads for the agency.
As a final note, we all worry about the length of time a large government building project like this takes. The current schedule will not provide me keys to the new center until January of 2015, and then it will take my staff up to 18 months to safely move all of our extensive operation out of the old building and into the new.
In Social Security, we will do everything we can to ensure our old building continues to function while we wait. Although we cannot do large‑scale building improvements without unacceptable impact to our operations, we will continue to undertake smart, cost‑effective maintenance work.
We strongly appreciate the support we have received from the Congress. I look forward to your questions, and will do my best to answer them. Thank you.
[The statement of Mr. Croft follows:]
*Chairman Johnson. Thank you, sir. I appreciate your testimony. I want to thank you all for your testimony. We appreciate you being here today.
To make sure everyone has a chance to ask questions, I am going to limit my time for questions to five minutes, and ask Chairman Denham and the ranking members to limit their time to five minutes.
Mr. Foley, Social Security is supposed to get the keys to the new center in January 2015, and that is a year later than originally planned. And the way you talk, it sounds like to me you are about to delay it another year. Can you talk to that question?
*Mr. Foley. We are on schedule to turn the keys over to them. As I mentioned, construction would be complete in September of 2014. There is some commissioning of the major building systems, as Mr. Croft, my colleague, testified.
The data center is a complicated operation and complicated building system, so we have to do all the testing to make sure that it will work and support their operations. But we don’t anticipate any further delays as we move forward on the project.
*Chairman Johnson. Well, why can’t you move it faster? I mean, you know where the site is. Why are you waiting until June to purchase it?
*Mr. Foley. We are actually in the acquisition for the site phase. We are moving forward on the procurement for the construction. So we are moving forward on all of those. It will take us, we think, that long to actually complete the acquisition.
I should say, though, that GSA is committed to looking for every opportunity to accelerate the project wherever possible. We are looking at multiple avenues to do that, whether it is exploring incentive clauses, potentially, in the construction contract.
Once we have a contractor on board, we can clearly work with them to look at phasing and sequencing, delivery of long lead items to see where we can actually cut time out of the construction schedule, although I should note that as you look at reducing time frames, that also increases, potentially, project risk. So we have got to make sure we do our due diligence and look for those tradeoffs.
But we do recognize the urgency of this facility, and are committed to looking for every way we can to accelerate.
*Chairman Johnson. Okay. Well, I just wonder why you are waiting until July to confirm the site and, you know, get it bought. Why is it taking you that long?
*Mr. Foley. Well, we are actually in the acquisition phase right now, so we are working to acquire ‑‑
*Chairman Johnson. You just think it would take that long to get it done?
*Mr. Foley. Well, there are a couple of things that have to happen with the site. We actually have to do some of the subdivision of the site. They have to bring some of the infrastructure in before we can actually acquire the site and actually transfer the deed to the Federal Government. We will have a purchase agreement in place prior to that.
*Chairman Johnson. You got a fixed price?
*Mr. Foley. We are in negotiations now.
*Chairman Johnson. Okay. Mr. O’Carroll and Mr. Croft, do you see how we can make up for lost time any other way?
*Mr. O’Carroll. Well, Chairman, as you are well aware, we are very concerned with the parallel issues that are coming up with the aging NCC, and we are encouraging both SSA and GSA to look for any opportunity they can to trim down on the time it takes to do this.
But at the same time, we don’t want any corner‑cutting or any degradation in terms of the services or the quality of the work. So I can assure you we have a contractor who is going to be taking a look and making sure that they are staying on schedule, and any opportunity to cut that time will be encouraged.
*Chairman Johnson. So we have a contractor already?
*Mr. O’Carroll. We have a contractor. It is called Strategic e‑Business Solutions, that works for us. One of our concerns was at the beginning, when we began our oversight, we didn’t ‑‑ we have IT expertise on our audit staff, but we don’t have experience with state‑of‑the‑art IT, or data facility construction.
So we went to Strategic e‑Business, and they have a subcontractor called Fortress International that they are using, both of which have done a lot of work with computer centers and redundant computer centers. We are going to have them taking a look.
We don’t know whether we are going to put it out to them or to another contractor. But we will have a three‑stage process taking a look at the next several years out.
*Chairman Johnson. Do we know when construction will begin?
*Mr. Foley. We are looking at award of the design/build contract next January. Depending on the design period, one of the advantages of design/build is it actually allows us to streamline the process, and they can begin some of the site work and construction prior to the final design.
But until we actually have some of the preliminary design and know what it looks like, we don’t have an exact date on when we will begin moving dirt on the site.
*Chairman Johnson. Is there any reason why we can’t duplicate the site down in Carolina?
*Mr. Foley. I am not familiar with all of the specific characteristics, but I think Mr. Croft can talk to some of the differences.
*Mr. Croft. Yes. First, sir, to your overall question about speeding it up and making sure it goes well, I will say we are committed to keeping up with David and his team. I think it is a really good team. They have some very good people on it, as do we. And we are going to keep a lot of oversight on this.
But I would also say we want to be careful we don’t bottleneck it by continuing to second‑guess all the decisions that the experts have made as they have been working through this process.
Regarding whether we can duplicate North Carolina, I believe we will end up looking something like what you saw in North Carolina. And, by the way, we very much appreciated your time to come down and look at the facility. I think the computer space will be about the same size.
I think this building will have some more robust infrastructure to it. You may remember going down in those industrial rooms in the basement of the building in North Carolina. I think the new one will have more size and heft in the industrial part. But ultimately, I think it will look a lot like what you saw in North Carolina.
But we are really going to rely on the expert designers and architects. Also, we are looking for a lot more energy efficiency in this building, even more so than what you saw in North Carolina.
*Chairman Johnson. Well, do they have all the equipment to fit the building out when we get it done?
*Mr. Croft. Well, no. We will have to go through a very long process to actually move all that equipment that you saw in Baltimore into ‑‑
*Chairman Johnson. You are not going to use that old stuff, are you?
*Mr. Croft. I am going to use some of it. Right. I am not going to use stuff that is obsolete. But some of it is very current and very modern, and it would cost a lot of money just to set aside equipment that still runs well.
*Chairman Johnson. Well, it is going to cost to move it, too. Thank you for your comments.
You are recognized, Mr. Chairman Denham.
*Mr. Denham. Thank you.
Mr. O’Carroll, the uninterrupted power supply system that supports the power of the current facility is over 30 years old. Many of the parts are no longer manufactured, and the service contract expires in 2012, well before the new data center will be completed.
You described the importance of the UPS system in the SSA plans to do ‑‑ what are you going to do after 2012?
*Mr. O’Carroll. Chairman, on the technical part of it, I am going to defer to Mr. Croft.
But on the oversight part of it, which is what we have been doing, Lockheed Martin did a study on the NCC. They identified the uninterrupted power supply as an issue. There is a single source of power going to the NCC at the moment, which is another risk.
And what we are concerned with is the aging of the uninterrupted power supply that they have. I am told that SSA has engaged with a contractor that is going to be able to extend the life of the uninterrupted power supply that they have.
And then also, we are monitoring SSA’s progress in getting an alternate source of power, which we highly support.
And I will let Mr. Croft give you more of the technical details on the uninterrupted power supply.
*Mr. Croft. Yes, Mr. Chairman, just a general comment. We have done an awful lot of things to the building that have extended the capacity, if you will, of electrical distribution in particular, which was the main concern with that 2012 date that you referenced in your question. We have taken action to mitigate that. So that is not one of our major concerns at the moment.
But our major concerns are things like uninterruptible power supply, the plumbing in the building, the HVAC in the building, the fire suppression. These are original to the building, and we will do what we can to maintain them, but the longer we go, the higher risk there is that they will fail.
*Mr. Denham. And if the system does fail, how long would the North Carolina system be able to fully support the entire process?
*Mr. Croft. It will be able to support us indefinitely. The issue then, Mr. Chairman, would be that we would be left without a backup to that. So we would have to be scrambling to come up with a viable backup to North Carolina at that point.
But the center in North Carolina is big enough now– has enough capacity– to be able to run the critical systems of the agency. And with a little bit more time, we would even be able to bring back our non‑critical systems in the agency. So it is our ultimate risk mitigation.
*Mr. Denham. Thank you.
And Mr. Foley, I thought you said in your testimony that this project would be on budget and on time?
*Mr. Foley. We will meet our milestones from this point forward. Obviously, there have been some delays, and we are looking to make up the time. But as far as budget, yes. We are still on budget.
*Mr. Denham. And time, even after the one‑year delay? So you don’t plan on making up the one‑year delay, but you do plan on being on time this point forward?
*Mr. Foley. Yes. As far as physical construction of the factory, we are about 11 months behind our original schedule. But we believe we can make that, and we are looking for every opportunity to accelerate, if possible.
*Mr. Denham. So final completion of construction?
*Mr. Foley. September of 2014.
*Mr. Denham. And up and running completely, 100 percent transition?
*Mr. Croft. We would take keys to the building– to use my term– in January of 2015 because, as David said, there would need to be testing of the building systems to make sure that they were ready to accept the equipment.
And then we will transition in phases. We have said it will take us up to 18 months to transition the entire facility over. We will be running out of both facilities for some period of time. We will do everything we can to beat that 18‑month period, and as we get closer, we will do a lot more precise planning and see how well we can do to beat 18 months.
*Mr. Denham. And at what point was this project started, or the need identified?
*Mr. Croft. I believe it tracks back to a study that would have come out in early 2008.
*Mr. Denham. So nearly a decade, by the time it was identified and the new system will be up and running.
Just a couple quick followup questions to Mr. Foley. In your site selection, any other existing properties that you identified that are existing public properties today?
*Mr. Foley. We did screen for available public properties. The Woodlawn campus, obviously, was the most logical choice, and we did study that. But as I mentioned in my testimony, because of the additional risk due to schedule, cost, and disruption of critical services for SSA, we decided that a new site would be more appropriate and would allow us to deliver the facility more quickly.
*Mr. Denham. No other public properties anywhere in the area?
*Mr. Foley. We did screen through them. I don’t know the specific sites that we looked at.
*Mr. Denham. I would like to see a list of the specific sites and how you went about that process.
*Chairman Johnson. Thank you.
Mr. Becerra, you are recognized for five minutes.
*Mr. Becerra. Thank you, Mr. Chairman.
And thank you to the three of you for your testimony and constant vigilance on this issue. I want to say that we appreciate that you have been very forthcoming in the constant efforts that we have engaged in within this committee to try to work hand in hand with you to move forward with this project.
I think everyone understands how important it is to get it done right. We can’t have any kind of failure, the way we saw with the IRS with its computer system, because in your case, people on a monthly basis depend on you being able to operate. So we thank you for the work you have been doing.
I also want to mention that I know that we worked hand in hand with you in the whole process of site selection. We were somewhat concerned that you go forward with the best site, and so I know that especially in 2009, we were constantly asking, are you sure you are going to do it the right way? Are you sure you are going to have good sites to select from?
So I want to thank you for having gone through the additional analysis that you undertook. And I suspect we probably feel more confident today that the site that was selected was the best site that we could go with. Is that the case? Yes?
[A chorus of ayes.]
*Mr. Becerra. Good. Do you have the funding that you need to continue to move forward? Yes? So if we could just say that for the record. Mr. Foley? Mr. Croft?
*Mr. Foley. Yes. For the construction phase, we do.
*Mr. Croft. Yes, sir. We do.
*Mr. Becerra. Are you still on budget? I think I heard you, Mr. Foley, say that you are still on budget?
*Mr. Foley. We are.
*Mr. Becerra. So because we took a while on that site selection, that moved us back a ways, about a year, in terms of when you would complete the project. But in terms of the budget, you feel like we are still on budget?
*Mr. Foley. Yes.
*Mr. Becerra. Good. And the consequences: If you didn’t have your money, what would happen if you didn’t have the money to move forward?
*Mr. Foley. I mean, obviously, if we didn’t have the money to move forward and award construction, the project would grind to a halt. I think as far as the consequences on operations, I would leave that to Mr. Croft to discuss.
*Mr. Becerra. Mr. Croft?
*Mr. Croft. Well, sir, if the project came to a halt, the risk would just continue to grow of a significant failure with the current building. It is that simple. It is a risk‑based decision. It gets worse and worse the longer we go.
*Mr. Becerra. And I know the initial estimates of the first data center were that by 2013, you would max out on capacity. And I know you have done some things to gain some additional capacity there, and we now have the second site, which helps us.
But even then, you need to have that redundancy so you can move forward. So if you have collapse at one site, while you could continue after, as you say, four days to get back up and running, you are still not running the way, operationally, we would want to have a center that controls so much data would have to.
*Mr. Croft. Yes. In the four‑day time frame, we use the term “critical systems.” And these are the core systems that, in your districts, your field office staffs use to process the claims and do all the things that the public is really looking for.
We have other activities and systems that are important to us but would not be in that four‑day critical period of recovery. For example, we would bring up some of our management information systems and things like that.
But yes, we do have the capacity in the second site now to be able to recover all of that.
*Mr. Becerra. Not only would you go down, I suspect pretty much every one of our district offices would go down as well because I doubt that there are many offices that don’t handle, as a significant part of their work, these Social Security claims, disability and otherwise.
*Mr. Croft. Right. They could still interact with the public. If the outage was going to be for a full four days, they could take claims, conceivably, on paper the way we used to in the olden days. But then they would have to transcribe it back ‑‑
*Mr. Becerra. Don’t take us back to those olden days, please.
*Mr. Croft. Right. I mean, they could. We wouldn’t be shut down. They would still talk to the public. They just wouldn’t be able to actually transact anything.
*Mr. Becerra. Let me ask one last question, and I think, Mr. Foley, you probably can answer this best. Given the extensive work that was done in selecting the site, do you anticipate any protests at this stage on the selection itself?
*Mr. Foley. I believe we learned last night that there has been a GAO protest filed. I think the important part for us to focus on is that the site selection is not on the critical path at this point for the procurement. We are moving forward with a two‑phase source selection, and so the first phase is all about finding qualified contractors who can design and build this facility. So we can narrow that down to the most qualified candidates.
So we do anticipate ‑‑ and I believe there has been a protest filed. Based on the process that we used, we are confident we will prevail on that protest and that it won’t impact the schedule at this point.
*Mr. Becerra. Do you mind, please, keeping this committee informed about the progress on that protest and any protests that may come along the pike?
*Mr. Foley. Absolutely.
*Mr. Becerra. Thank you very much.
I yield back, Mr. Chairman.
*Chairman Johnson. Thank you, sir.
Ms. Holmes Norton, would you care to comment?
*Ms. Norton. Thank you, Mr. Chairman.
Last thing we want is more delay on this project. But remembering that what concerned both subcommittees before was site selection, I am concerned with the report that we got just yesterday from the inspector general and with reconciling what is in that report with the testimony of Social Security; specifically, the change in the criteria used in site selection, which you, Mr. O’Carroll, indicate is somewhat problematic.
For example, the three finalists, three final sites, have one, two, and even three secondary criteria, while several of the unsolicited sites had only one documented secondary criteria conflict. Now, you changed, apparently ‑‑ the team changed some mandatory to secondary.
Now, to keep us from talking jargon, Mr. O’Carroll, Mr. Croft, explain what secondary and mandatory are, and why the team in the process of selection would change from one category to another, or recategorize in the way you did.
*Mr. O’Carroll. Congresswoman, I will take the first crack at it before I turn it over to Mr. Croft.
There are a couple issues, and you said that probably the biggest one is documentation. And our concern, as we have been monitoring this project throughout, is with a couple things.
One, we don’t sit at the same table with GSA and SSA as these decisions are being made. And that is probably good for the sake of independence. We are not part of the process. We are just evaluating it.
One of the biggest concerns with regard to evaluating it is the timely receipt of the information. And then also, the documentation that we get. And that is where a couple of our issues have come up — the documentation on the decision‑making. Many times the documentation has been lacking.
And another issue is that we try to be ahead of the curve. One of the biggest complaints about inspectors general is what they call the “gotcha” mentality, that we wait until things go wrong and then we point it out. What we are trying to do here is point out issues before they go wrong.
We have had a couple instances where by the time we got the information, a decision has already been made. And that is what happened with this report– the decisions had been made. The site had been selected. And subsequent to the decision, we issued our report where we flagged the issue. A year ago there were 14 different sites that were being evaluated, and they were being discarded based on different secondary criteria and primary criteria that were being considered. They kept narrowing it down. And then it got down to the three sites.
And what our concern was, was there any one of the ones that were discarded beforehand that would have been better than the three that were selected? And that is what the substance of our report was.
*Ms. Norton. Well, it raises a question, and maybe Mr. Croft and Mr. Foley can make us understand it. It raises some question when you change the criteria. You know, you change the criteria in the middle of the game and you can get any site you want.
So changing criteria is very bothersome. And I would like to know why the criteria for site selection would change in the midst of site selection. I mean, that is pure and simple what I am interested in.
*Mr. Foley. I will answer first because I think a lot of the site selection process falls under GSA.
*Ms. Norton. Yes.
*Mr. Foley. As far as changing the primary and secondary criteria for the site selection, it was done very early on the process ‑‑
*Ms. Norton. So give us examples of primary and of secondary.
*Mr. Foley. Primary are sort of the critical go/no‑go. So does the site have the appropriate infrastructure? Can it provide the utilities to the site? All of those sorts of things. Secondary criteria are things like access to the site and other criteria that are nice to have but not critical to the operation of the factory.
And so as we were beginning the process and before we began evaluating any of the offers, we recognized that some of the criteria that we had as primary criteria were narrowing the number of available sites. We wanted to maximize competition, and we looked for other ways to mitigate some of the risks that were raised by some of these primary criteria.
So before we did any evaluation of any of the sites, we did change one of the criteria to a secondary. But that was really done so we that could maximize the number of available sites and the competition and find the most appropriate site with the least amount of risk so we could deliver it as quickly as possible for SSA.
*Ms. Norton. Generally, when GSA builds ‑‑ am I out of time?
*Chairman Johnson. You can go ahead and ask one more.
*Ms. Norton. I will just ask this remaining question, then, and I thank you for your indulgence, Mr. Chairman.
Generally, of course, when GSA puts out an RFP, one of the criteria is proximity to mass transportation. Is there any proximity to mass transportation? Do these workers have proximity to mass transportation where they are now located? How will they get to the site?
*Mr. Foley. I would defer to Mr. Croft on the current mass transportation. We did evaluate all of the sites. The data center is a little bit of a unique facility in that the density and utilization and number of employees is less than, say, a typical office building that GSA ‑‑
*Ms. Norton. How many employees?
*Mr. Croft. In the new facility, my staff would be about 79, and then there would be additional facility staff, guards, things like that. And remember, these are three shift, 24/7 operations.
*Chairman Johnson. Tell you what, the gentlelady’s time is expired. Can you submit that answer in writing?
*Mr. Foley. Certainly.
*Ms. Norton. Thank you, Mr. Chairman.
The projected number of employees for rotating shifts at the national Support Center (NSC) to provide coverage 24 hours a day, 7 days a week, and 365 days a year is 208. Of these, 97 will be Federal employees and 111 will be contractors.
*Chairman Johnson. Mr. Brady, you are recognized.
*Mr. Brady. Thank you, Chairman Johnson, Chairman Denham. Thank you for hosting this hearing. Nice to see you again, Mr. O’Carroll. Appreciate it. Look forward to working with you again this session. Mr. Foley, Mr. Croft, thanks for being here.
You know, our seniors just depend upon getting their checks on time and accurately, plus Social Security and the data you have play a critical role with other federal, state, and local agencies. So this is a critical issue.
When natural disasters in California collapsed roads and bridges, when the Minneapolis bridge, an I‑35 construction flaw, collapsed, the Federal Government worked with remarkable speed, knowing that truly they didn’t have an option and they needed to move quickly.
I am not saying we have a natural disaster on our hands. But obviously, we are on borrowed time with the aging NCC system as it is today. Mr. Foley and Mr. Croft, why can’t we apply those principles to getting this project back at least to its original timetable in moving forward just to ensure that we have bought ourselves again more time to prevent anything from happening that really would have pretty critical impacts? Mr. Foley?
*Mr. Foley. Certainly. As I said, we are committed to looking for every avenue to accelerate, and we are exploring all those. I think we have an aggressive schedule for the delivery of the data center on the construction side. And, you know, as with any project, there are clearly components of risk as we move forward through the procurement phase and through the construction phase.
But we are taking every step we can to mitigate those. So on the procurement side, we have detailed criteria, and we have a well‑established process for the procurement, and we are confident that we can move through that quickly without any delays.
On the construction side, the two components, typically, where you see opportunities for delay are when you have an issue with the contractor. And so by going for the two‑phase source selection where we get only the most qualified contractors, we think we are mitigating that risk as we move forward. The second phase or the second place where you often see delay is in changes in requirements, and we have worked extremely closely with Social Security to ensure that we have a well‑developed program of requirements.
And so I think we are ‑‑ we don’t anticipate any further delays. And as I said, we are looking at all avenues we can to accelerate on the construction side, and I think on the migration side as well.
*Mr. Brady. On the construction side, of the elements that go into, both acquiring the site, designing and building, construction, as you said ‑‑ and obviously, Mr. Croft, you have got the installation as well ‑‑ what are the greatest risk factors for further delay in your experience with other projects? Where do we see the most risk in something slowing us down further?
*Mr. Foley. I mean, I think I mentioned them previously. The two places where we see risk are during the procurement, where you have a risk, potentially, for a protest among the unsuccessful bidders ‑‑
*Mr. Brady. And how much could that delay it?
*Mr. Foley. I think we are hopeful that we can move through that process fairly quickly. You know, it could be a matter of months to just a matter of weeks. We know we have got a good process in place, so we hope to keep that to a minimum and we hope we wouldn’t have any protest on the award.
On the construction side, the biggest risk is typically where you have changes of requirements. So as you get through the design and into construction ‑‑
*Mr. Brady. And does that hinge, really, on the coordination between Social Security and GSA?
*Mr. Foley. Absolutely. And that is where our close working relationship has proved beneficial. We have a well‑detailed program of requirements, and we are working in close coordination to make sure that we don’t have any delays as we move through the construction side.
*Mr. Croft. Mr. Brady, I echo what David said. We have invested massive amounts of time working with the GSA team to make sure that that program is complete and will not be an impediment to this project.
So we are very, very much in the middle of this, and we will commit to keeping up with our colleagues from GSA.
*Mr. Brady. Thank you. What is the degree of certainty that we will get this building to Social Security in January 2015? And what is the degree of certainty we will finish the IT and systems 18 months later?
Mr. Foley, is it 100 percent? Ninety percent? Eighty percent? Seventy percent? Your experience with other projects, what should we expect?
*Mr. Foley. Based on my experience, we do have an aggressive schedule, in part because we recognize the criticality of this. I think because of all the coordination and in part because of some of the environmental work and things that we need to know a little extra time up front, we are fairly confident that we can certainly deliver within the schedule we currently have and because of the risk mitigation that I mentioned up front.
*Mr. Brady. How comfortable?
*Mr. Foley. We are very comfortable we could deliver that.
*Mr. Brady. Eighty percent comfortable? A hundred percent comfortable?
*Mr. Foley. I would say at least 80 percent and more.
*Mr. Brady. I knew you didn’t want to give that number.
*Mr. Brady. But for our own sake, I wanted to know just what this comfort level was.
*Mr. Foley. I had to try.
*Mr. Brady. I am over time, Mr. Chairman. Do you want to answer quickly, Mr. Croft?
*Chairman Johnson. Thank you. Go ahead.
*Mr. Croft. Well, for IT migration, I am extremely comfortable that we can make it within the 18‑month time frame. And I am not a betting person, but I would bet we will substantially beat it.
*Chairman Johnson. Well, I am concerned that you are moving some of the equipment from the old facility to the new one, and I don’t know how you are going to make that transition on time. I hope you can.
Mr. Stark, do you care to question?
*Mr. Stark. Not at this point, Mr. Chairman.
*Chairman Johnson. Thank you.
Mr. Paulsen, do you care to ‑‑
*Mr. Paulsen. Thank you, Mr. Chairman.
*Chairman Johnson. Thank you.
*Mr. Paulsen. I just have maybe a couple of questions. Part of it has been the reassurance, obviously, of the members of this committee, and I am just learning about the timelines that are around the data centers that are out there. But let me just understand, maybe, some more of the impact because I am learning exactly all about the Social Security and the data that is kept there.
But Mr. Croft, knowing that what you are doing right now, you are doing everything possible, right, that you can to prevent the aging NCC from failing, if it were to fail this year ‑‑ let’s just say it failed. And I know there is a four‑day backup plan that comes up. And I visit my local Social Security office the next day.
I mean, what would I find if I went in there the next day after a failure? Would I be able to file a claim? Would I be able to change the bank to where my checks get sent? Would I be able to do that? Would I be able to file an appeal that day if a claim was denied, for instance, or would it take a long period of time? Just help me sort out what might happen.
*Mr. Croft. Yes, sir. I appreciate the question.
First, if we had a situation like that, one of the first things we would be doing, of course, is communicating, not only to our own management team and workforce but also to the communities. We would be sending out information about the likely outage and the impact on operations. And for people that can wait to come file a claim or do things with us, we would be encouraging them to wait until we are back up and operational.
If you came into the office, though, and our systems were down, you could file a claim. We couldn’t process it, though. You could file a claim on paper. We might take information from you to protect your filing date to make sure you don’t lose any benefits and so forth.
We could take information from you related to changing a direct deposit, but we couldn’t actually process that, either. We would wait until the system was up, and then we would have to work to key that information in and process it at that time.
So we would be there. We would be able to talk to people. We could take information from people. We could actually take paper claims and things like that. But we could not process them until the system was back up.
*Mr. Paulsen. So it sounds like essentially you are going to have a backlog occur until everything starts up again?
*Mr. Croft. A tremendous backlog would build up very quickly.
*Chairman Johnson. Mr. Croft, can I interrupt you a minute? I thought you told me that a certain percentage of the system was running in Carolina now.
*Mr. Croft. It is. That is correct.
*Chairman Johnson. And those would not be affected, would they?
*Mr. Croft. Yes. The things that are in Carolina would not be affected. That is correct, sir.
*Chairman Johnson. So take the state of Texas, for example, which you are doing down there. If the main center went down, Texas would not be affected. Is that true?
*Mr. Croft. What we showed you there was the printing of Social Security cards for Texas. We could still print Social Security cards if we had the new information coming in. The main thing that is in North Carolina is all the medical evidence associated with our disability process, which is a huge growth area for us. That would still be up and operational.
But a lot of the online types of system and the claims systems that the question referred to, they are dependent on the National Computer Center at this time. So they would be down under the scenario that the question ‑‑
*Chairman Johnson. For four days, according to you, five according to him?
*Mr. Croft. Four days to me, and working towards one.
*Chairman Johnson. Thank you.
*Mr. Paulsen. Mr. Croft, let me just follow up, too. So if I am a business owner and I am using the E‑Verify system, participating in that ‑‑ that is the voluntary program that allows me to verify work authorization of my new hires ‑‑ will I be able to verify new hires during that time frame?
*Mr. Croft. Yes, you will. That is one of the redundant systems between the two data centers. If it happened tomorrow, it would require some additional work from our colleagues at the Department of Homeland Security (DHS) to point their system to North Carolina. But we are all set up and ready to do that.
*Mr. Paulsen. And if I was going to call on like the 800 number, for instance, would I get an answer on the phone? Would I be able to conduct business or be a part of that?
*Mr. Croft. Yes. Yes, sir. Our phones would work, but our staff would have limited ability other than to talk to you and take information from you. For example, they would not be able to pull up your master beneficiary record to answer questions with specificity about your claims or your benefits.
*Mr. Paulsen. And maybe just I will close here. But let me ask you this, too. With the timelines, and you say you are reasonably sure that you can meet the current timelines even though we have already been delayed, but if everything is completed with the new center and there was an outage, is it going to be the same four‑day backup? Or is it going to be we are going to have a backup now and we are not going to have that time frame to meet an emergency if there was an outage?
*Mr. Croft. Yes. We are at a four‑day recovery time now, and we have an active project, irrespective of the replacement data center project, to drive that down to one day. And we will make that, as we have said, by the end of fiscal year (FY) 2012. And I believe we will actually beat that one as well, Mr. Johnson.
But we will be driving that down. So we will be at a one day recovery time if either of our centers fail.
*Mr. Paulsen. Thank you, Mr. Chairman.
*Chairman Johnson. Thank you.
Ms. Berkley, do you care to question?
*Ms. Berkley. I do indeed, and thank you very much for holding this hearing. And thank you, gentlemen, for being here.
We are in the process of building a VA medical center in my congressional district. There are three buildings 147 acres, and it is the first new construction in the VA in 20 years. It is a massive undertaking. So I very much appreciate what you are doing and how you are doing it.
One of the questions that many people in my community would ask when we got the timeline on how long it would take to build these facilities was if we could build a 5,000‑room hotel in Las Vegas in 18 months, how is it that this is going to take so long?
But now that it is nearing completion and I see what went into creating these buildings, I understood why it took as long as it did. So I fully appreciate your need to do your due diligence and produce a building that is going to not only be functional and safe, but will be with us for many decades to come.
I also realize how challenging site selection is because I grew up in my congressional district. I know every inch of it. And I had many suggestions for the appropriate site for this VA medical center. And as each one of my suggestions was shot down, I also came to appreciate that even though it was not even on my radar screen, the site that we chose was perfect for the function of these buildings. And we are going to be creating a whole new city within a city once this is up. So I want to thank you for doing your work.
We were able to build this VA center with a $600‑million earmark. And I am a great proponent of earmarks, although they seem to have fallen out of fashion lately. But what I was astounded is when we were talking about it being on time and being on budget, and I thought that was just great.
A few years after the start, I came to realize that there was another $100 million that was needed for equipment and furniture and training and hiring, because we are going to be hiring a thousand people.
Do you need additional resources from the Federal Government? Do we have to appropriate it? Is it now up to your Social Security Administrator to come and make the request? Where are we in that process?
*Mr. Croft. Yes. Thank you. Out of the $500 million that have been appropriated for this project, $100 million is to be used as the down payment, if you will, for the actual outfitting of the building with IT, the transition of the IT, and so forth.
And at the time that this was done, we estimated that it could cost upwards of $350 million altogether to do a full transition from the old building to the new. So what we will be doing is making requests as part of our budget process.
I believe you will start seeing requests from us, based on current timeline, in FY 2013/2014/2015, possibly 2016 as well, to cover the additional costs associated with transitioning all of the IT from the old building into the new and establishing that as a fully functioning new data center.
*Ms. Berkley. And I am glad you brought that up because there have been a couple of questions asked about the effectiveness and the cost‑effectiveness of transferring existing equipment from the old building to the new.
I am sure you have done a cost study on this, and is it less expensive to do this than purchase new?
*Mr. Croft. It will be for equipment that still has a lot of ‑‑
*Ms. Berkley. Life?
*Mr. Croft. Correct. That is right. And we will be doing much, much more precise planning, actually starting later this year and getting into next year, as we actually are getting closer and closer to being able to take over this facility.
We will develop a master plan. We will start working through our budget cycles. We buy a lot of things, a lot of hardware, a lot of IT equipment anyway. What we’re trying to do is time our regular refreshments of equipment.
If we can extend some of our equipment a little bit longer in the old building so that we can just ride our normal budget cycles for equipment that we were going to replace anyway and have it go directly into the new facility, that will be a way for us to cut down on that cost and make it go smoother.
*Ms. Berkley. Thank you.
Mr. O’Carroll, in my final moments, seconds, you know the situation in my district, with the unprecedented growth and the amount of backlog we have and the lines that we have. If we roll back our budgets to 2008 numbers, what will that do to the people in my congressional district that depend on Social Security?
*Mr. O’Carroll. Congresswoman, I think that is an issue that Social Security is looking very hard at- what is going to happen to customer service. When you take a look at the last two years, the growth that SSA has had, the expectations now of the public are higher because backlogs have dropped, service has improved. If there are going to be budget cuts obviously it is going to have an effect on customer service.
One other thing we are always very concerned with is stewardship. One of my concerns is that stewardship not decrease. SSA should do its due diligence to make sure that the right people are getting the right benefits, and that that doesn’t suffer, because oftentimes stewardship suffers whenever customer service gets higher priority.
*Ms. Berkley. So penny wise and pound foolish?
*Mr. O’Carroll. Yes.
*Chairman Johnson. The gentlelady’s time has expired. Thank you.
Mr. Smith, you are recognized.
*Mr. Smith. Thank you, Mr. Chairman, and thank you to the panel for sharing your expertise and insights here. It has been interesting to listen to this now that the 2008 spending levels have been injected into this hearing and the stimulus funds and so forth.
But I can’t help but think that the whole process ‑‑ and I am fairly new to this project ‑‑ but looking at the delays, and then the extra funds being directed to that and maybe not even speeding things up ‑‑ and I don’t want to go there necessarily. I am curious as to how the process could be streamlined in the future. I have talked to private contractors who say that government projects tend to take a long time, therefore cost more money, or vice versa.
And so if you could speak to something that could be done, perhaps ‑‑ and maybe not even being able to respond to that today, but for the record in the future ‑‑ how can we get to the bottom of some of these things, the delays? And I am not faulting any one particular person or agency.
It is just that there seems to be so much placed into the decision that it becomes so burdensome. Then it is delayed. It is more expensive. Service perhaps could suffer, and efficiency overall is lost.
Can any of you speak to that in a brief moment?
*Mr. Foley. I will take the first shot at it. I think there are unique requirements to building a federal facility. In particular, the data center is a complicated facility unlike a traditional or typical office building, even the ones that GSA builds for many of our other customer agencies.
So the timeline on this project is longer just simply because of the type of facility. When you are building a 400‑ or $500 million project, including equipment and all the technology that has got to go into there, the building mechanical systems are much more complicated. The phasing and sequencing is much more complicated. And so it does take a longer period of time.
There are also requirements that the Federal Government has for additional security ‑‑ redundancy on the systems, which I defer to my colleague at Social Security to discuss a little more ‑‑ but that are more complicated, require more due diligence than perhaps a typical private sector facility might go through. So I don’t know if you ‑‑
*Mr. Croft. I appreciate your question. I am not an expert on this process. I do find it daunting, and I really respect my colleagues for the way they maneuver through it. It is an extensive process, and I don’t have words of wisdom about it, to be honest, Congressman.
*Mr. O’Carroll. Mr. Smith, I am also in that same position ‑‑ what we are doing is monitoring. What we are trying to do with our monitoring process is not to impede, not to delay the project, and do everything that we can to keep it on schedule.
But we have the same role of oversight. So I guess the best thing I can say, Mr. Smith, is I can assure you that the oversight role isn’t going to be a lag indicator on the future of this project.
*Mr. Smith. Okay. Thank you. Thank you, Mr. Chairman.
*Chairman Johnson. Just know that I understand duplication in effort in these kind of buildings. And there is a lot of technology going in there, and backup power, backup generators, backup this, backup that. And it is great that you are considering all those things.
Mr. Rangel, do you care to question?
*Mr. Rangel. Mr. Chairman, thank you, and Congressman Norton for having this hearing. I only want ‑‑
*Chairman Johnson. Microphone.
*Mr. Rangel. I only want to take advantage of this moment to thank the panel of the great job that they are doing for hundreds of millions of Americans that we don’t say thank you enough. But their lives and their families have been affected.
And I think the Social Security Act is one of the highest moments of our nation and the Congress. And continue your good work, and count on our support.
Thank you, Mr. Chairman.
*Chairman Johnson. Thank you, sir. You lost your words, huh? You can talk longer if you want to.
*Mr. Rangel. No, no. I really think, when you are hearing things positive, progress is being made, you don’t go backwards. You just thank them and move on.
*Chairman Johnson. They do do good work in my view.
Mr. Berg, you are recognized.
*Mr. Berg. Thank you, Mr. Chairman. Again, I want to thank you for all the work you put into this. In my real life I am involved in commercial real estate, and so I am somewhat familiar with the private sector.
And I just had a couple of just big picture questions. How big is the facility, and what is our cost per square foot in the new facility?
*Mr. Croft. I believe the building will be approximately 400,000 gross square feet.
*Mr. Foley. I think it is, 400,000 square feet. And I think the overall total construction cost, including management and inspection and the design services, is about $381 million. So I don’t have my calculator here to do the quick math, but we can certainly provide the estimated construction cost per square feet for you.
*Mr. Berg. Well, obviously, one of the things that is of concern to everyone here is what might be in jeopardy if we have a crash in the current facility, and really what is going on.
The other thing that I see is obviously our economy is in a slump now. And we look at this project and we say, when will the bulk of the jobs actually be out there receiving paychecks, and how can we speed that up?
And I am not going to go through all the timetable and everything you are doing because again, as you look at that, we can argue about that and talk about that. But in my experience ‑‑ and I am just going to kind of lay out an analogy. I don’t know if this is true or not.
But I think when it comes to government projects, there is kind of a private sector construction world out there, and there is kind of a way they do things, whether it is a data center or office building or warehouse, that they have timetables and what they go through.
And to some degree, it seems like through the government, when we are doing construction projects, we are saying, okay. We don’t really care about how the industry normally does this. We are the government, and here is how we do this, and we are so concerned about having everything accounted for and everything competed for that we end up, in my opinion, sometimes taking twice as long for a construction project that ultimately costs us more because of the delays.
My other concern is in our effort to make everything fair for every contractor, we end up not having that many contractors compete because they are like, I don’t want to do all that paperwork and spend hundreds of thousands of dollars to get in the game when there is only a 10 percent chance that I will get it. Instead of doing that, I am just going to do my normal work.
So maybe just ‑‑ again, I am kind of stepping back. And not to pick on this project, but if we were going to kind of rethink how we do major construction projects like this in a way that would be, again, two years rather than five years, I am asking for ideas or what you might think could be done differently from out standpoint to deliver, again, the same results, but faster.
*Mr. Foley. Sure. I think that first I should note we have brought in expertise from the private sector, from folks who build data centers all the time, because this is a unique, highly complicated project.
So we are using our expertise, SSA’s expertise of their requirements, and we have brought in consultants who are experts in terms of data centers to help with that, to make sure that we aren’t adding things to the process and help make sure that we do that.
As far as your concern about how do we make sure that we get competition because of the process and all of that, that is one of the benefits of our two‑step source selection, where we don’t require as much detail up front before we narrow the list down.
So you get to a short list of folks, so they know I am not one of 50 competing. I think, based on our experience with other Recovery Act projects, we are confident that we are going to get good competition on this project.
And so I think there are differences between private sector and government, but we are always looking for opportunities and ways that we can streamline, and do it in the most efficient manner. But we do have certain rules, regulations, and a certain duty as the Federal Government to make sure that there is a fair opportunity for all entities to compete in this.
*Mr. Berg. Mr. Chairman, let me reask that question. First of all, I am not asking you to defend anything.
*Mr. Foley. Okay.
*Mr. Berg. I trust that you are making a good decision. I trust that you have great contractors. I understand the process, and someone can have a dispute or a protest and it screws things up.
My question to you is, again, on the big picture, if we said this had to be done in two years rather than five years, is there anything that you can think of that says, you know, we could streamline this by removing some of these obligations or requirements? That is my question to you.
*Mr. Foley. I mean, I think the longest parts in the process are through the environmental phase, which you are well aware of, you know, through any private development as well. Through the procurement, there are additional rules and regulations that do take a little bit longer for the government because we do have to have full and open competition as opposed to being able to go out to two or three contractors and say to do that. And so that does add time to the process.
As far as construction goes, we are hiring a private sector contractor to build the building, and so I hope that our actual construction time frame and the process we are using, design/build, is ‑‑ it is common practice in private sector real estate. And so I think that portion of the process is fairly similar. So I think it really is on the front end where it is a little bit different.
*Mr. Berg. Thank you. Just one followup? Or am I out of time?
*Chairman Johnson. Go ahead. What have you got?
*Mr. Berg. My question is, what is the plan for the property that you are going to be moving out of?
*Mr. Foley. Sure.
*Mr. Berg. And that may have been already addressed. If so, I apologize; you don’t need to respond to that. But we don’t want to wait.
*Mr. Croft. No. It hasn’t been asked, sir. We are going through a master planning process on the campus. The building will stay in use. It probably will need to have some renovations once the IT is out of it. Again, the plumbing and all that stuff is original to the building.
My speculation would be it will be an office building for Social Security workers in Baltimore.
*Chairman Johnson. Yes. That is another issue we need to look at. Thank you for bringing it up. Your time is expired.
I am going to allow Mr. Denham, the chairman, to ask one more question.
*Mr. Denham. Thank you, Mr. Chairman. Actually, my question is the same as Mr. Berg’s question, which I don’t think was fully answered. I understand that there is going to be tenant improvements on the facility, on the building itself. But this is a 260‑acre piece of property, is it not?
*Mr. Foley. I believe that is correct. Yes.
*Mr. Denham. What are we going to do with the rest of that property?
*Mr. Foley. The Woodlawn campus has multiple SSA facilities on it, you know, as far as the operations there. But we have an operations center that we have just recently completed a major renovation on. There is the Altmeyer Building as well.
And so there are multiple other uses for the SSA headquarters. We are utilizing the site in a multiple of capacities. We are, as Mr. Croft said, in the master planning ‑‑
*Mr. Denham. Is it 100 percent utilized?
*Mr. Foley. I believe so, yes.
*Mr. Denham. 260 acres, no vacant land out there?
*Mr. Foley. Oh, there is additional land.
*Mr. Denham. So it is not 100 percent utilized?
*Mr. Foley. The buildings themselves are, yes. But there is additional land.
*Mr. Denham. And what are we doing with the land?
*Mr. Foley. Right now, I mean, it is just buffer area around the campus.
*Mr. Denham. Could it be utilized for something other than buffer?
*Mr. Foley. As a part of the study, one of the things we did look at was the ability to build on some of these portions. The topography and other things create some challenges. But as a part of the master plan, we will be looking at how we can better utilize the facility and the possibility for future growth and expansion of SSA at the Woodlawn campus.
*Mr. Denham. Are there houses on that property?
*Mr. Foley. I believe there are.
*Mr. Denham. Individual dwellings?
*Mr. Foley. I believe there are contiguous ‑‑
*Mr. Denham. I believe there are, too. Any reason why we couldn’t utilize the rest of the 260 acres to develop that area, put houses on there, and sell it off to some private developer that may be able to provide housing for that community?
*Mr. Croft. Well, part of the issue, Congressman – and we would love to have you come out to the campus if you want to look at it.
*Mr. Denham. I would love to visit.
*Mr. Croft. A lot of it is parking, parking lots and so on.
*Mr. Denham. 260 acres of parking lots?
*Mr. Croft. But there is also quite a lot of woodland area. But a lot of that has been buffer around the computer center, the National Computer Center.
*Mr. Denham. But we are now moving the computer center. Correct? So we would not need the large buffer zone, and we would be able to develop that property, sell the property off. I am curious of what the timeline is to sell the property and to better utilize the existing facilities.
It is also my understanding that a number of the facilities on there we lease from private individuals for SSA. Correct?
*Mr. Croft. Not on the campus, no.
*Mr. Denham. Obviously, which is even a bigger problem. We are leasing property outside of the campus even though we have got 260 vacant acres there. We are leasing property. Are we going to now move those individuals into the location that we are moving out of once the tenant improvements are done?
*Mr. Foley. That is part of the master planning process. So we are looking at the best way to accommodate the overall needs on the site.
*Mr. Denham. I would like to take a look at the entire plan and have that available to our committee. My assumption is that we are not going to fully utilize the 260 acres, so I would like to see what the opportunities would be to sell off that property and what it could be used for.
And then finally, I am assuming ‑‑
*Chairman Johnson. I would like for you to respond to both committees in that regard, please.
*Mr. Denham. Thank you.
Contingency on the overall project, I assume, is 10 percent contingency?
*Mr. Foley. I believe so, yes.
*Mr. Denham. So $50 million, there could be an opportunity to reprogram $50 million, assuming you come in on budget.
*Mr. Foley. At the end of the process, yes.
*Mr. Denham. Just as a statement, it is my understanding that in the past, when money is reprogrammed, it does not always go back through this committee, even though you have the obligation to bring it before this committee. This committee will make sure that we follow up on every project to make sure that every contingency comes through this committee as well as Appropriations.
Thank you for my time.
*Chairman Johnson. Thank you, sir. I appreciate the question.
And thank you all for your presence here today and your comments. Thank you all, and the subcommittees will continue to monitor your progress, both of us, to make sure the project is done right, within budget, and completed on time, if not ahead of time.
I appreciate all of my members who joined us. At this time, the committee stands adjourned.
[Whereupon, at 11:34 a.m., the subcommittees were adjourned.]
SUBMISSIONS FOR THE RECORD
QUESTIONS FOR THE RECORD
Patrick P. O’Carroll