Mr. Chairman, I have an amendment at the desk. Mr. Chairman, I am a big fan of NOAA. The scientists and analysts at NOAA do extraordinary work for this country. Unfortunately, NOAA's process for choosing a location for the Marine…
Mr. Chairman, I have an amendment at the desk.
Mr. Chairman, I am a big fan of NOAA. The scientists and analysts at NOAA do extraordinary work for this country. Unfortunately, NOAA's process for choosing a location for the Marine Operations Center jeopardizes the operation of the Pacific Center and is wasting tens of millions of dollars of taxpayer money.
My amendment would save at least $5 million immediately, and beyond that, probably $10 to $20 million in long-term costs. It would defund the move of the Marine Operations Center from Seattle to Newport, Oregon, for the rest of the year so that there is time for the broken process to be looked into.
Now, this is not a case of sour grapes. If it was what was best for the country, I wouldn't fight tooth and nail against some jobs moving from one place to another. But the Commerce Department's inspector general and the Government Accountability Office have written scathing reports about this move and the decision process. They found it is among the worst run, least transparent, and least competitive bidding processes they have ever investigated. If you want to compare it to the Bridge to Nowhere, this is exactly what it is.
I came from Chicago, and when we looked at something like this, we would always say the fix was in. Spending tens of millions of taxpayer dollars to dislocate hundreds of families to a site that's frequently unavailable for navigation because of dangerous conditions, is not near shipyards or maritime suppliers, is more than 120 miles from the nearest airport, and will be hugely expensive to run every year makes no common sense. And the reports of the inspector general report that very clearly.
Now, Newport is an environmentally sensitive area, and NOAA's own, their
own private consultants say the site is the least qualified destination for the move. Despite all these issues, NOAA has charged ahead and been completely unaccountable. NOAA officials are not willing to admit their huge mistake and fix it. And this is just plain wrong. Taking a breather for the next 7 months while we get a truly transparent process is the right thing to do.
NOAA and Newport are saying that any delay, any examination, any looking at this will have catastrophic consequences. That simply is not true. We have studies from the CRS and others it won't put contracts at risk, it will not increase costs.
So I rise today to stop the process for the remainder of the year, to give NOAA and the Commerce Department time to get their ducks in a row, hit the restart button, and stop wasting taxpayer money.
U.S. Department of Commerce,
The Inspector General,
Washington, DC, May 26, 2010.
Memorandum for: Jane Lubchenco, Ph.D., Under Secretary of
Commerce for Oceans and Atmosphere
From: Todd J. Zinser
Subject: NOAA's Acquisition of Facilities to House the Marine
Operations Center--Pacific
By letter dated March 5, 2010, Chairwoman Maria Cantwell
and Ranking Member Olympia Snowe of the Senate Subcommittee
on Oceans, Atmosphere, Fisheries, and Coast Guard, Committee
on Commerce, Science, and Transportation, requested that the
Office of Inspector General review NOAA's decision to award a
lease to the Port of Newport, Oregon, to house NOAA's Marine
Operations Center-Pacific (MOC-P). Their letter raised
several specific questions regarding the decision-making
process that resulted in this lease.
NOAA began the lease acquisition process as early as
September 2007, when it initiated a market analysis. It
published a Solicitation for Offers for a new lease on
November 24, 2008. Four bidders submitted offers, and NOAA
awarded a lease to the Port of Newport on August 4, 2009. One
of the unsuccessful bidders, the Port of Bellingham,
Washington, filed a protest with the Government
Accountability Office (GAO) on August 27, 2009--10 days after
it received a post-award debriefing from NOAA. On December 2,
2009, GAO sustained Bellingham's protest against NOAA's lease
award and recommended that NOAA conduct an analysis of
practicable alternatives to the Newport offer. In its January
29, 2010, response to GAO, NOAA stated that it expected to
complete all corrective actions relating to the successful
bid protest by May 28, 2010.
Although the lease acquisition process began in 2007, the
decision-making process related to the acquisition can be
traced back approximately 10 years. Together, these processes
involved several separate offices within NOAA, the
Department, and other federal agencies. In addition, they
involved many statutory provisions, regulations, NOAA and
Department policies, other administrative directives, and
changes in personnel. Given the scope and complexity of these
processes, we continue to gather and evaluate information,
and in order to gain the best understanding of the facts and
circumstances surrounding NOAA's process, we will need to
continue our work beyond the time by which NOAA intends to
finalize its assessment of practicable alternatives.
Although our review is ongoing, we have identified one
issue that warrants higher-level review by NOAA before it
finalizes its examination of practicable alternatives.
Specifically, based on our review, we believe that NOAA
should examine whether it sufficiently complied with the
requirement to consider existing federal facilities before
pursuing a new lease acquisition. Such an examination will
help to ensure that the ultimate decision--whether it be to
affirm the original choice or select an alternative
approach--is grounded in a more thorough, well-substantiated,
and well-documented analysis.
According to 41 C.F.R. 102-73.10, before acquiring real
estate by lease, purchase, or construction, federal agencies
should first use space in government-owned and government-
leased facilities. Similarly, Department of Commerce policy
generally disapproves of long-term lease solutions
(Department of Commerce, Real Property Management Manual,
5.4.1(d) (2003)). These issues are separate, but both relate
to how NOAA assessed its options for MOC-P. We address each
issue separately here, detailing factors that may potentially
impact NOAA's own assessment of how well it followed these
directives.
While there is a lack of detailed criteria against which to
measure NOAA's efforts to consider other federal facilities,
the Department's Real Property Management Manual does require
the Department to make ``every reasonable effort to utilize
Government-controlled space'' before leasing space. Our
review uncovered some evidence that NOAA considered other
federal facilities; however, NOAA was not able to provide
evidence that other federal facilities were systematically
inventoried, analyzed, and rejected before initiating efforts
to acquire a follow-on lease from other sources for MOC-P,
nor was the decision to reject other federal facilities well-
documented.
For example, we were told by NOAA officials that NOAA had
considered collocating with select Coast Guard and Navy
facilities, but its consideration was not documented. In
preparation for the lease acquisition, NOAA received
proposals in mid-2007 for an alternative site analysis to (1)
investigate the most functional, efficient, and cost-
effective options for reconsolidating MOC-P and (2) provide
an indication of how each site might perform during the
subsequent lease solicitation process. That study, conducted
under contract, was completed in September 2008. Of the 32
ports, cities, and economic development councils contacted,
11 responded, offering a total of 22 potential site options
for further analysis. The 22 were further narrowed to a total
of 15, only 3 of which were federally-owned: GSA's Federal
Center South, the Department of Labor's Tongue Point, and
NOAA's Western Regional Center. In November 2008, in an
apparent rejection of those federal sites, NOAA issued the
Solicitation for Offers.
NOAA also considered and declined GSA's May 2008 offer to
fulfill the MOC-P requirements at the GSA-owned Federal
Center South (FCS) facility. NOAA's Western Regional Center
(WRC) was also rejected as a long-term solution because of
what NOAA characterizes as litigation risks in that area.
Having ultimately rejected the use of other federal
facilities, it is also unclear whether NOAA adequately
considered other required alternatives. Office of Management
and Budget (OMB) Circular A-94, which requires cost-benefit
analyses of decisions on whether to lease or purchase, is an
example of other potentially applicable requirements that may
apply to NOAA's decision-making.
Our review has thus far uncovered three key issues
regarding NOAA's consideration of other federal facilities.
First, at some time between 2000 and 2007, as detailed
below, NOAA may have changed from considering a dispersed
model for fulfilling the MOC-P requirement, which could have
affected the analysis of available federal facilities.
Although NOAA's 2008 Solicitation for Offers was limited to
the lease of a consolidated facility (which would collocate
all ships and staff), it commissioned a June 2000 Homeport
Alternatives Analysis, conducted by SRI International, in
which it contemplated operating from dispersed facilities as
a cost-saving measure. This study was commissioned to explore
alternative homeports, given the possibility of the Lake
Union lease not being extended beyond 2003.
The 2000 study indicated that NOAA was seeking to reduce
costs by moving MOC-P staff to the WRC. Noting that NOAA. was
evaluating split homeporting, the study also explored
homeporting two of four MOC-P vessels in Alaska to reduce
ship travel time.
To date, NOAA has not provided an explanation of what
factors led to the apparent shift from the 2000 study to the
current preference for a consolidated, leased solution. This
apparent change in the vision for meeting the MOC-P
requirement may have had a significant impact on how NOAA
approached its available alternatives.
Notably, since the July 2006 fire that destroyed the MOC-P
piers at Lake Union, MOC-P has operated under a dispersed
model, using piers at NOAA's WRC and GSA's FCS. Also, NOAA's
Marine Operations Center-Atlantic operates in dispersed
facilities. This suggests that a dispersed model may be
feasible and should have been assessed as part of NOAA's
requirements-planning process.
Second, NOAA's analysis of how well it considered other
federal facilities should include an examination of how
thoroughly it analyzed and weighed its potential long-term
options at the WRC and FCS, where it currently operates.
NOAA should consider whether it would have been feasible to
maintain its current dispersed configuration while relocating
staff to the WRC or other leased offices.
Specifically, we found that the WRC was dredged in the
1970s in anticipation of developing four long piers to
accommodate many more vessels, and utilities may already be
in place for two additional planned buildings that were not
developed.
Although NOAA has cited neighborhood opposition to expanded
use of the WRC and litigation against NOAA in that area in
the 1970s, MOC-P has been homeported there since 2006. We
have reviewed recent letters from some surrounding
neighborhood groups that support locating MOC-P at the WRC.
The potential cost savings of using these existing facilities
may outweigh the litigation risks.
Third, GSA's pre-solicitation offer to serve the MOC-P
requirements at FCS may have presented a viable federal
facility for NOAA's consideration. This is particularly
relevant because of the changed circumstances at this site.
GSA's May 2008 offer arrived well before NOAA issued its
Solicitation for Offers in November 2008. NOAA declined this
offer one month later, citing the narrowness of the waterway
adjacent to the existing FCS pier, the fact that the waterway
was a Superfund site, and NOAA's established goal of being
operational in a new lease by July 1, 2011.
Since then, GSA has obtained American Recovery and
Reinvestment Act funds to redevelop three FCS buildings and
plans to relocate a large tenant, leaving an existing
building potentially available for NOAA, with some
modification.
We have been advised that NOAA currently has access to a
pier that is sufficiently
equipped and sizable to accommodate three of its vessels.
Although NOAA has cited concerns regarding underwater
property lines, it has not provided an indication that this
situation has been a problem during its use of the pier since
2006.
Regarding FCS being a Superfund site, according to a senior
official at GSA with whom we spoke, this would be an issue
for GSA, not NOAA. While the potential issue exists and an
environmental impact statement would be required, Superfund
liability would lie with GSA or another FCS tenant.
NOAA cited its June 30, 2011, deadline for vacating the
Lake Union site in its June 2008 letter declining GSA's
offer. However, this deadline was driven by the expiration of
the Lake Union lease, and suitable workarounds--such as
short-term office leases through GSA--may potentially have
been available.
Pursuing such workarounds may have enabled NOAA to garner
the necessary time and funding to develop the WRC and FCS
individually or together for the MOC-P requirement.
In our view, NOAA's examination of these issues related to
its consideration of other federal facilities will ensure
that the final decision regarding practicable alternatives to
Newport is thorough and well-documented.
We noted above that Department policy generally disapproves
of long-term lease solutions, and it states that leased
facilities should not be considered a permanent solution. Yet
although the Newport lease award will commit NOAA to a leased
solution for another 20 years, our review of how NOAA
approached government-owned solutions found little documented
analysis. NOAA has told us that leasing was preferred because
acquiring funding for such an acquisition would have required
considerable lead time and because funding of facilities has
historically received lower priority than other funding
requirements.
NOAA officials also cited the fact that MOC-P has
historically used leased sites.
The relevant documents show that on at least two occasions,
NOAA briefly considered acquiring the Lake Union site, which
housed all MOC-P operations prior to the fire, but
documentation of those efforts was limited to what can be
characterized as passing comments. We have not been provided
with evidence of systematic efforts to assess the feasibility
of purchasing or constructing facilities elsewhere.
We understand that NOAA's consideration of the practicable
alternatives to the Newport site is in progress and scheduled
to be completed by May 28, 2010. Although NOAA had the
authority to define the scope of the practicable alternatives
as it saw fit, it limited its assessment to the four offers
that it received under the solicitation. However, considering
the range of options that were available to NOAA in
government-owned and government-leased space, a broader
examination may be warranted as part of this analysis.
According to NOAA, it is standard GSA practice for lease-
to-build leases not to include a termination clause in the
lease, and such a clause was not included in the Port of
Newport award. We understand that NOAA obtained a preliminary
estimate of potential lease termination costs from the
Department of Commerce Office of General Counsel. However, as
part of its decision-making process, NOAA should conduct a
rigorous analysis of the potential termination costs and
document the specific components of this estimate. As it
continues to evaluate its practicable alternatives, it would
be prudent for NOAA to minimize these potential costs to the
extent possible.
Whatever conclusion NOAA reaches, it should carefully
examine and document all pertinent factors, including those
that we have highlighted. In order for both of our offices to
be responsive to the Subcommittee, it is important to examine
these issues regarding NOAA's consideration of other federal
facilities. As we finalize our response to the Chairwoman and
Ranking Member, we will follow up with your office to
determine what additional information NOAA may have
identified.
If you have any questions, please do not hesitate to
contact me.
Mr. Chair, I have good friends, and I know they have to defend their hometown as adequately as they want.
But let me read from the IG's report: ``In our view, the more fundamental problems pertaining to NOAA's process prior to the competitive lease process, a primary cause of these problems is grounded in the fact that NOAA did not subject the MOC-P project to a rigorous capital investment planning and oversight process. While the Department has clear property policy, NOAA did not follow it. NOAA thus proceeded with requirements for its desired option of consolidated facility based on justification and consideration of alternatives that, on the face and without additional documentation, are significantly lacking. NOAA's financial analysis of the four offers submitted in response to the solicitation did not assess the total cost to the government, and NOAA provided no evidence that it had thoroughly considered the operational and logistical implications of the relocation.''
Now that's not two rivals from one State and another. This is the Inspector General of the Commerce Department going down and looking at the process. And the fact is that the CRS report, dated 30 September 2010, which I will submit for the Record, says that the Federal Government is able to terminate its contracts for convenience. The governmental interest is always higher than the commercial interest. So the Federal Government can get out of this. They save $50 million. It's not going to be $50 million because they still have the pier. They can do whatever they want with it, but they do not have a contract with the Federal Government for the next 20 years in a place that is very far away.
NOAA has been in Seattle for 40 years. That's true. Whence it was created, it was put there for a very good reason. I don't care if it goes to Bellingham or it goes to Oregon or where it goes, but there ought to be a transparent process.
Mr. Chairman, I demand a recorded vote.