[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3645 Reported in House (RH)]

                                                 Union Calendar No. 362
107th CONGRESS
  2d Session
                                H. R. 3645

                          [Report No. 107-600]

    To amend title 38, United States Code, to provide for improved 
    procurement practices by the Department of Veterans Affairs in 
                      procuring health-care items.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 29, 2002

    Mr. Evans (for himself, Mr. Filner, Mr. Gutierrez, Ms. Brown of 
Florida, Mr. Reyes, Ms. Carson of Indiana, Mr. Lynch, Mr. Sanders, Ms. 
 Kaptur, Mrs. Jones of Ohio, and Mr. Dingell) introduced the following 
     bill; which was referred to the Committee on Veterans' Affairs

                             July 22, 2002

Additional sponsors: Mrs. Mink of Hawaii, Mr. Brown of Ohio, Mr. Foley, 
   Mr. Smith of New Jersey, Mr. McKeon, Mr. Udall of New Mexico, Mr. 
          Shows, Ms. Berkley, Mr. Pickering, and Mr. Rodriguez

                             July 22, 2002

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]
[For text of introduced bill, see copy of bill as introduced on January 
                               29, 2002]

_______________________________________________________________________

                                 A BILL


 
    To amend title 38, United States Code, to provide for improved 
    procurement practices by the Department of Veterans Affairs in 
                      procuring health-care items.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Veterans Health 
Care and Procurement Improvement Act of 2002''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. References to title 38, United States Code.
Sec. 3. Limitation on use of local contracts for Department of Veterans 
                            Affairs procurement of health-care items.
Sec. 4. Enhancements to enhanced-use lease authority.
Sec. 5. Eligibility for Department of Veterans Affairs health care of 
                            certain additional Filipino World War II 
                            veterans residing in the United States.
Sec. 6. Outpatient dental care for all former prisoners of war.
Sec. 7. Improved accountability of research corporations established at 
                            Department of Veterans Affairs medical 
                            centers.
Sec. 8. Department of Defense participation in Revolving Supply Fund 
                            purchases.
Sec. 9. Name of Department of Veterans Affairs outpatient clinic, New 
                            London, Connecticut.

SEC. 2. REFERENCES TO TITLE 38, UNITED STATES CODE.

    Except as otherwise expressly provided, whenever in this Act an 
amendment or repeal is expressed in terms of an amendment to, or repeal 
of, a section or other provision, the reference shall be considered to 
be made to a section or other provision of title 38, United States 
Code.

SEC. 3. LIMITATION ON USE OF LOCAL CONTRACTS FOR DEPARTMENT OF VETERANS 
              AFFAIRS PROCUREMENT OF HEALTH-CARE ITEMS.

    (a) In General.--Section 8125 is amended to read as follows:
``Sec. 8125. Procurement of health-care items
    ``(a) Except as provided in subsection (b), any procurement of a 
health-care item by the Department shall be made through the use of a 
Federal Supply Schedule contract, or a national contract, that meets 
the requirements of subsection (d).
    ``(b)(1) Subsection (a) does not apply to a procurement of a 
health-care item in any of the following cases:
            ``(A) A procurement that is necessary to meet a current or 
        near-term medical emergency at a medical center.
            ``(B) A procurement that is for a health-care item that is 
        not listed in the Federal Supply Schedule or as part of a 
        national contract and for which there is a valid clinical need.
            ``(C) A procurement that is for a specialized health-care 
        item not listed in the Federal Supply Schedule or as part of a 
        national contract and that is to meet the special needs of an 
        individual patient who has one of the special needs identified 
        in section 1706(b) of this title and who has a valid clinical 
        need for the item.
            ``(D) A procurement that is part of an approved sharing 
        agreement between the Department of Defense and the Department 
        of Veterans Affairs with demonstrable cost-per-item savings for 
        a health-care item listed on the Federal Supply Schedule or a 
        national contract.
            ``(E) A procurement that supports a prime contract or a 
        subcontract with a small business concern qualifying for a 
        procurement preference program under section 8 or 15 of the 
        Small Business Act (15 U.S.C. 637, 644), if the cost of the 
        item to be procured is no more than the cost (taking price and 
        value into consideration) of the comparable item on the Federal 
        Supply Schedule or national contract and if the item meets the 
        requirements of subsections (d)(1)(A) and (d)(2).
    ``(2) A procurement may be made as authorized under subparagraph 
(B) of paragraph (1) only if the procurement is specifically authorized 
in advance in writing by the Secretary. The authority of the Secretary 
under the preceding sentence may only be delegated to the Deputy 
Secretary or to an official of the Veterans Health Administration not 
below the level of a Deputy Under Secretary (or equivalent) acting 
jointly with a procurement executive of the Department not below the 
level of an Associate Deputy Assistant Secretary.
    ``(c) In the case of an emergency procurement of a health-care item 
as authorized by subsection (b)(1)(A), the quantity of the item 
procured may not exceed the quantity of that item that is the 
reasonably foreseeable need for the item at the medical center 
concerned until resupply can be achieved through procurement actions 
other than emergency procurement.
    ``(d) A contract meets the requirements of this subsection if--
            ``(1) the contract includes--
                    ``(A) provisions referred to as `preaward and 
                postaward audit clauses'; and
                    ``(B) a provision referred to as a `price reduction 
                clause'; and
            ``(2) in the case of a contract to be made with a vendor 
        that is a distributor, the contract will be for distribution 
        services only unless the manufacturer of the product can 
        clearly demonstrate that at least 60 percent of its sales of 
        the item through that vendor is to commercial customers with 
        negotiated product prices and that the vendor actually stocks 
        and distributes the product.
    ``(e)(1) The Secretary shall establish procedures to assure 
compliance by each Department medical facility with the provisions of 
this section and with applicable Federal and Department procurement 
regulations.
    ``(2) The procedures established by the Secretary under paragraph 
(1) shall be designed to maximize health-care item variety and the use 
of the Federal Supply Schedule.
    ``(3) The Secretary shall establish and enforce procedures limiting 
the standardization of items at the local, regional, or national level 
to provide special patient populations (as identified in section 
1706(b) of this title) with the range and types of health-care items 
required to meet their clinical and quality-of-life needs.
    ``(4) The Advisory Committee on Prosthetics and Special-
Disabilities Programs established under section 543 of this title shall 
review the procedures established under paragraph (3), including the 
implementation of those procedures, and shall advise the Secretary when 
those procedures are not effectively enforced by the Department.
    ``(f)(1) The Secretary shall establish annual goals for Department 
medical centers for the purchase of health-care items from Federal 
Supply Schedule and national contracts meeting the requirements of 
subsection (d). Such goals shall be designed to maximize the percentage 
of such purchases that are made through such contracts.
    ``(2) The Secretary shall establish goals for the Department for 
procurements from small business concerns qualifying for a procurement 
preference program under section 8 or 15 of the Small Business Act (15 
U.S.C. 637, 644). Such goals shall be no less than the national goal 
for each such procurement preference program under either of those 
sections.
    ``(3) Achievement of the goals established under this subsection 
shall be an element in the performance standards for employees of the 
Department who have the authority and responsibility for achieving 
those goals.
    ``(g) A provision of law that is inconsistent with any provision of 
this section shall not apply, to the extent of the inconsistency, to 
the procurement of a health-care item for the Department.
    ``(h)(1) Not later than December 31 each year, the Secretary shall 
submit to the Committees on Veterans' Affairs of the Senate and House 
of Representatives a report on the procurement of health-care items 
during the preceding fiscal year. Each such report shall include, for 
the year covered by the report, the following:
            ``(A) The total dollar amount of all items listed in 
        Federal Supply Classification (FSC) Group 65 or 66 and the 
        total dollar value of the exceptions to subsection (a) under 
        each of subparagraphs (A), (B), (C), (D), and (E) of subsection 
        (b)(1), shown by medical facility.
            ``(B) A detailed explanation for exceptions to subsection 
        (a), including--
                    ``(i) the rationale for use of emergency 
                procurement at Department medical facilities;
                    ``(ii) the rationale for approval of requests under 
                subsection (b)(1)(B) for procurement of items not 
                listed on the Federal Supply Schedule or on national 
                contracts; and
                    ``(iii) exceptions granted for special health-care 
                needs of veterans with disabilities described in 
                section 1706(b) of this title.
            ``(C) Analysis of sharing agreements between the Department 
        and the Department of Defense to indicate the basic written 
        sharing initiative and the division of financial responsibility 
        between the two Departments.
            ``(D) The stated goal under each procurement preference 
        program, together with an assessment of the performance of the 
        Department toward achievement of that goal, especially with 
        respect to the goal for contracting with businesses that are 
        owned by veterans with service-connected disabilities.
    ``(2) The Advisory Committee on Prosthetics and Special-
Disabilities Programs of the Department shall submit comments on each 
report under paragraph (1) before the report is submitted under that 
paragraph, and the Secretary shall include those comments in the report 
as submitted.
    ``(i) For the purposes of this subsection:
            ``(1) The term `health-care item' includes any item listed 
        in, or (as determined by the Secretary) of the same nature as 
        an item listed in, Federal Supply Classification (FSC) Group 65 
        or 66.
            ``(2) The term `national contract' means a contract for 
        procurement of an item that is entered into by the National 
        Acquisition Center of the Department or another Department 
        procurement activity, as authorized by the Secretary, that is 
        available for use by all Department medical facilities.
            ``(3) The term `valid clinical need' means in the 
        professional judgment of an appropriate clinician. Such term 
        applies to health care items, prosthetic appliances, sensory or 
        mobility aids and supplies that are prescribed by a physician 
        for special patient populations such as veterans with spinal 
        cord dysfunction, blindness, amputations, and other veterans 
        included in section 1706(b) of this title.
            ``(4) The term `Federal Supply Schedule contract' means a 
        contract that is awarded and administered by the National 
        Acquisition Center of the Department under a delegation of 
        authority from the  Administrator of the General Services 
Administration.
            ``(5) The term `emergency procurement' means a procurement 
        necessary to meet an emergency need affecting the health or 
        safety of a person being furnished health-care services by the 
        Department.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on September 30, 2003, and shall apply to procurements by 
the Secretary of Veterans Affairs after that date.

SEC. 4. ENHANCEMENTS TO ENHANCED-USE LEASE AUTHORITY.

    (a) Increased Flexibility Under Enhanced-Use Leases.--Section 
8162(a)(2)(B) is amended--
            (1) by striking ``proposed by the Under Secretary for 
        Health'' and inserting ``proposed by one of the Under 
        Secretaries''; and
            (2) by striking ``to the provision of medical care and 
        services'' and inserting ``to the programs and activities of 
        the Department''.
    (b) Notification of Property To Be Leased.--Section 8163 is 
amended--
            (1) in the first sentence of subsection (a)--
                    (A) by striking ``designate a property to be leased 
                under an enhanced-use lease'' and inserting ``enter 
                into an enhanced-use lease with respect to certain 
                property''; and
                     (B) by striking ``before making the designation'' 
                and inserting ``before entering into the lease'';
            (2) in subsection (b), by striking ``of the proposed 
        designation'' and inserting ``to the congressional veterans' 
        affairs committees and to the public of the proposed lease''; 
        and
            (3) in subsection (c)--
                    (A) in paragraph (1)--
                            (i) by striking ``designate the property 
                        involved'' and inserting ``enter into an 
                        enhanced-use lease of the property involved''; 
                        and
                            (ii) by striking ``to so designate the 
                        property'' and inserting ``to enter into such 
                        lease'';
                    (B) in paragraph (2), by striking ``90-day period'' 
                and inserting ``45-day period'';
                    (C) in paragraph (3)--
                            (i) by striking ``general description'' in 
                        subparagraph (D) and inserting ``description of 
                        the provisions''; and
                            (ii) by adding at the end the following new 
                        subparagraph:
            ``(G) A summary of a cost-benefit analysis of the proposed 
        lease.''; and
                    (D) by striking paragraph (4).
    (c) Disposition of Leased Property.--Section 8164 is amended--
            (1) in subsection (a)--
                    (A) by striking ``by requesting the Administrator 
                of General Services to dispose of the property pursuant 
                to subsection (b)'' in the first sentence; and
                    (B) by striking the third sentence;
            (2) in subsection (b)--
                    (A) by striking ``Secretary and the Administrator 
                of General Services jointly determine'' and inserting 
                ``Secretary determines''; and
                    (B) by striking ``Secretary and the Administrator 
                consider'' and inserting ``Secretary considers''; and
            (3) in subsection (c), by striking ``90 days'' and 
        inserting ``45 days''.
    (d) Use of Proceeds.--Section 8165 is amended--
            (1) in subsection (a)--
                    (A) by striking ``(1)'' after ``(a)'';
                    (B) by inserting after ``of this title'' the 
                following: ``, except that any funds received by the 
                Department under an enhanced-use lease in support of 
                the Veterans Benefits Administration or the National 
                Cemetery Administration and remaining after any 
                deduction from such funds under subsection (b) shall be 
                credited to applicable appropriations of that 
                Administration''; and
                    (C) by striking paragraph (2);
            (2) in subsection (b), by adding at the end the following 
        new sentence: ``The Secretary may use the proceeds from any 
        enhanced-use lease to reimburse applicable appropriations of 
        the Department for any expenses incurred in the development of 
        additional enhanced-use leases.''; and
            (3) by striking subsection (c).
    (e) Clerical Amendments.--(1) The heading of section 8163 is 
amended to read as follows:
``Sec. 8163. Hearing and notice requirements regarding proposed 
              leases''.
    (2) The item relating to section 8163 in the table of sections at 
the beginning of chapter 81 is amended to read as follows:

``8163. Hearing and notice requirements regarding proposed leases.''.

SEC. 5. ELIGIBILITY FOR DEPARTMENT OF VETERANS AFFAIRS HEALTH CARE OF 
              CERTAIN ADDITIONAL FILIPINO WORLD WAR II VETERANS 
              RESIDING IN THE UNITED STATES.

    (a) Eligibility for Health Care.--The text of section 1734 is 
amended to read as follows:
    ``(a) The Secretary shall furnish hospital and nursing home care 
and medical services to any individual described in subsection (b) in 
the same manner, and subject to the same terms and conditions, as apply 
to the furnishing of such care and services to individuals who are 
veterans as defined in section 101(2) of this title. Any disability of 
an individual described in subsection (b) that is a service-connected 
disability for purposes of this subchapter (as provided for under 
section 1735(2) of this title) shall be considered to be a service-
connected disability for purposes of furnishing care and services under 
the preceding sentence.
    ``(b) Subsection (a) applies to any individual who is a 
Commonwealth Army veteran or new Philippine Scout and who--
            ``(1) is residing in the United States; and
            ``(2) is a citizen of the United States or an alien 
        lawfully admitted to the United States for permanent 
        residence.''.
    (b) Limitation.--The amendment made by subsection (a) shall take 
effect on the date on which the Secretary of Veterans Affairs submits 
to the Committees on Veterans' Affairs of the Senate and House of 
Representatives and publishes in the Federal Register a certification 
that sufficient resources are available for the fiscal year during 
which the certification is submitted to carry out section 1734 of title 
38, United States Code, as amended by such amendment, during that 
fiscal year at those facilities of the Department of Veterans Affairs 
where the majority of veterans described in subsection (b) of such 
section will receive hospital and nursing home care and medical 
services authorized by subsection (a) of such section.

SEC. 6. OUTPATIENT DENTAL CARE FOR ALL FORMER PRISONERS OF WAR.

    Section 1712(a)(1)(F) is amended by striking ``and who was detained 
or interned for a period of not less than 90 days''.

SEC. 7. IMPROVED ACCOUNTABILITY OF RESEARCH CORPORATIONS ESTABLISHED AT 
              DEPARTMENT OF VETERANS AFFAIRS MEDICAL CENTERS.

    (a) Audits and Improved Annual Report.--Subsection (b) of section 
7366 is amended to read as follows:
    ``(b)(1) Not later than March 1 each year, each such corporation 
shall submit to the Secretary a report concerning the preceding 
calendar year. Each such annual report shall include the following: 
            ``(A) A detailed statement of the corporation's operations, 
        activities, and accomplishments during the preceding calendar 
        year.
            ``(B) A description of each research project or activity 
        for which funds were provided by the corporation during that 
        year or for which funds were provided by the corporation during 
        a preceding year and that is ongoing during the year covered by 
        the report, including, for each such project or activity, the 
        title of the project or activity and a description of the 
        purpose of the project or activity.
            ``(C) A statement of the amount of funds controlled by the 
        corporation as of the first day, and as of the last day, of the 
        year covered by the report and a statement of the amount of 
        funds received, shown by source, during the year.
            ``(D) An itemized accounting of all disbursements made 
        during the year.
            ``(E) The most recent audit of the corporation under 
        paragraph (2).
            ``(F) Such other information as may be necessary to enable 
        the Secretary to prepare the annual report to congressional 
        committees required under section 7367 of this title.
    ``(2) A corporation with a balance of funds under its control in 
excess of $300,000 at any time during a calendar year shall obtain an 
audit of the corporation for that year. Any other corporation shall 
obtain an independent audit of the corporation at least once every 
three years. The report on any such audit shall specifically state 
whether the corporation audited made any payment, or provided any 
travel, during the period covered by the audit to a member of the board 
of directors of the corporation and, if so, the amount and recipient of 
any such payment or travel.
    ``(3) Any audit under paragraph (2) shall be performed by an 
independent auditor and shall be performed in accordance with generally 
accepted Government auditing standards and in accordance with Office of 
Management and Budget Circular A-133.
    ``(4) The Inspector General of the Department shall each year 
review the most recent audit under paragraph (2) of not less than 10 
percent of the corporations described in the first sentence of 
paragraph (2) and not less than 10 percent of the corporations 
described in the second sentence of that paragraph. As part of such 
review, the Inspector General shall determine whether the audit was 
carried out in accordance with generally accepted Government auditing 
standards, as required by paragraph (3).''.
    (b) Annual Report of Secretary.--(1) Subchapter IV of chapter 73 is 
amended--
            (A) by inserting after subsection (c) of section 7366 the 
        following:
``Sec. 7367. Annual report to congressional committees'';
            and
            (B) in the text immediately following the section heading 
        inserted by subparagraph (A)--
                    (i) by striking ``(d)'' and inserting ``(a)'';
                    (ii) by inserting after the first sentence the 
                following new sentence: ``Each such report shall be 
                based on the annual reports submitted by the 
                corporations to the Secretary under section 7366(b) of 
                this title and shall be submitted not later than May 1 
                of the year following the year covered by such 
                reports.''; and
                    (iii) by striking ``The report shall'' and 
                inserting the following:
    ``(b) Each such report shall''.
    (2) The table of sections at the beginning of such chapter is 
amended by inserting after the item relating to section 7366 the 
following new item:

``7367. Annual report to congressional committees.''.
    (c) Extension of Authority To Establish Research Corporations.--
Section 7368 is amended by striking ``December 31, 2003'' and inserting 
``December 31, 2006''.

SEC. 8. DEPARTMENT OF DEFENSE PARTICIPATION IN REVOLVING SUPPLY FUND 
              PURCHASES.

    (a) Enhancement of Department of Defense Participation.--Section 
8121 is amended--
            (1) by redesignating subsection (b) and (c) as subsections 
        (d) and (e), respectively;
            (2) by designating the last sentence of subsection (a) as 
        subsection (c); and
            (3) by inserting after paragraph (3) of subsection (a) the 
        following new subsection:
    ``(b) The Secretary may authorize the Secretary of Defense to make 
purchases through the fund in the same manner as activities of the 
Department. When services, equipment, or supplies are furnished to the 
Secretary of Defense through the fund, the reimbursement required by 
paragraph (2) of subsection (a) shall be made from appropriations made 
to the Department of Defense, and when services or supplies are to be 
furnished to the Department of Defense, the fund may be credited, as 
provided in paragraph (3) of subsection (a), with advances from 
appropriations available to the Department of Defense.''.
    (b) Effective Date.--The amendments made by subsection (a) shall 
apply only with respect to funds appropriated for a fiscal year after 
fiscal year 2002.

SEC. 9. NAME OF DEPARTMENT OF VETERANS AFFAIRS OUTPATIENT CLINIC, NEW 
              LONDON, CONNECTICUT.

    The Department of Veterans Affairs outpatient clinic located in New 
London, Connecticut, shall after the date of the enactment of this Act 
be known and designated as the ``John J. McGuirk Department of Veterans 
Affairs Outpatient Clinic''. Any reference to such outpatient clinic in 
any law, regulation, map, document, record, or other paper of the 
United States shall be considered to be a reference to the John J. 
McGuirk Department of Veterans Affairs Outpatient Clinic.




                                                 Union Calendar No. 362

107th CONGRESS

  2d Session

                               H. R. 3645

                          [Report No. 107-600]

_______________________________________________________________________

                                 A BILL

    To amend title 38, United States Code, to provide for improved 
    procurement practices by the Department of Veterans Affairs in 
                      procuring health-care items.

_______________________________________________________________________

                             July 22, 2002

  Reported with an amendment, committed to the Committee of the Whole 
       House on the State of the Union, and ordered to be printed