Statement of Sen. Orrin Hatch
Before the Subcommittee on Transportation and Infrastructure
Senate Committee on Environment and Public Works
Washington, D.C.
September 23, 1998
Patent and Trademark Office Relocation

Mr. Chairman, in my capacity as Chairman of the Senate Judiciary Committee, the Committee in Senate responsible for overseeing the management of the Patent and Trademark Office (PTO), I respectfully submit this written statement for the record. I appreciate having the opportunity to provide this brief statement to you, Mr. Chairman, and the other members of on Environment and Public Works' Subcommittee on Transportation and Infrastructure. The PTO consolidated space procurement is an important and necessary project, and I am taking this opportunity to express my support for the project.

Today, the PTO has over 5,000 employees, many of whom are housed in sub~ standard office space that does not support state-of-the art-automation or barrier-free access. PTO operations are presently distributed among 17 buildings, some as much as a mile apart. In order to meet the constantly increasing demand for intellectual property protection, the PTO will find it necessary to hire approximately 2000 patent examiners, trademark attorneys and support staff during the next several years. Recognizing that its present leases are expiring, that additional space is required to continue serving its customers, and that its present distributed campus adds costs due to inefficiency, the PTO sought approval for procurement of a new facility. In 1995, Congress authorized the PTO to begin competitive procurement of a long-term lease for consolidated space.

I am mindful that concerns have been raised about the scope, cost and management of this procurement. It is important to note that PTO has been extremely responsible in addressing concerns raised by reviews of the project. In addition, Congress has placed certain requirements on PTO to ensure that the project is well managed. Initially, a decision was made that outright purchase of a facility to house PTO was not feasible. Later, the Inhofe-Brownback amendment to the Commerce Justice State Appropriation Bill placed a ceiling on project build-out and move.

The PTO's operations are funded entirely by user fees. These users understand the challenges PTO faces now and in the fixture, filings increase. PTO will find itself increasingly reliant upon new technology and redesigned work processes to meet the increasing demand for its services. PTO has conscientiously examined its future requirements in developing its approach to the space consolidation. All of the PTO's major user groups fully support the new lease project because it will promote efficiency and productivity at a lower cost.

Since this project began, opponents have raised many issues that mischaracterize aspects of project. On result of the on-going debate has been confirmation of PTO's approach through a number of independent studies. Both the Commerce Inspector general and Jefferson Solutions, an independent consulting firm, reached similar conclusions - that the project is necessary, well managed, and likely to save money for PTO and its fee-paying customers.

PTO's current landlord has a strong interest in keeping PTO as an occupant. Presently, PTO is paying over $40 million dollars a year for its space. Our concern should be to insure that PTO's future space is selected through a competitive process that ensures good value for the money paid, wherever PTO is located. Even considering extension of PTO's present leases through a sole-source procurement raises the question - is it likely the government will get the best value in a noncompetitive environment? Our American system has taught us that competition gives us improved quality at a lower price.

I am, of course, concerned about the potential for cost over-runs and extravagance. Nothing I have seen so far in PTO's approach leads me to believe that they are seeking a lavish, unreasonable facility. Although critics have taken certain information out of context to challenge the overall project, I am confident that PTO's prospectus is similar in nature to other government and private industry facilities. I am certain, also, that PTO has no intention of paying a premium for lavish grounds or expensive furniture. Everything I have learned about the project leads me to the conclusion that PTO and GSA have been committed to procuring space that provides necessary employee and customer amenities in an efficient and cost-saving facility. I am also confident that Congress will continue to monitor the progress of the project to ensure that costs are reasonable and controlled.

I have every faith that the management at PTO and GSA will bring this project to successful completion. We must not lose sight of the fact this project will result in net savings of $72 million to PTO's fee-paying customers.

Thank you for the opportunity to express my support. I request that my recent remarks (S.8737) in the Congressional Record from July 22, 1998, on this project be included with this statement.