[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]



 
                THE VA'S VOCATIONAL REHABILITATION AND
              EMPLOYMENT SERVICE CONTRACT SERVICES AND ITS
               COORDINATION WITH THE DEPARTMENT OF LABOR'S
                VETERANS' EMPLOYMENT AND TRAINING SERVICE
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                            HEARING

                           BEFORE THE

                          COMMITTEE ON
                        VETERANS' AFFAIRS

                     HOUSE OF REPRESENTATIVES

                         SUBCOMMITTEE ON
                       ECONOMIC OPPORTUNITY

                     ONE HUNDRED NINTH CONGRESS

                           SECOND SESSION
                            ----------

                           MARCH 9, 2006 
                            -----------

     Printed for the use of the Committee on Veterans' Affairs

                         Serial No. 109-38





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                THE VA'S VOCATIONAL REHABILITATION AND
              EMPLOYMENT SERVICE CONTRACT SERVICES AND ITS
               COORDINATION WITH THE DEPARTMENT OF LABOR'S
               VETERANS' EMPLOYMENT AND TRAINING SERVICE




THURSDAY, MARCH 9, 2006

U.S. HOUSE OF REPRESENTATIVES,     
SUBCOMMITTEE ON ECONOMIC OPPORTUNITY,
COMMITTEE ON VETERANSï¿½ AFFAIRS,
Washington, D.C.

	The Subcommittee met, pursuant to call, at 10:00 a.m., in 
the Cannon House Office Building, Hon. John Boozman [Chairman of the 
Subcommittee] presiding. 
	Present:  Representatives Boozman, Herseth, and Campbell. 
 
	MR. BOOZMAN.  The meeting will be in order.  Today we will 
be receiving testimony regarding VA Vocational Rehabilitation and 
Employment contracting practices and integration with the Veterans' 
Employment and Training service. 
	Before we begin, I want to note that Hire a Hero, Coming Home 
to Work, and REALifelines all have similar goals of placing our 
wounded veterans in good jobs.  While there are differences among 
these programs, there is no reason that we could not adopt perhaps a 
common title, set of goals, and coordinated management among the 
departments. 
	For example, the title REALifelines has no intuitive 
connection with hiring disabled veterans.  The existence of three 
similar federal programs is also causing confusion among the wounded 
and their families. 
	Therefore, I am asking VETS to take the lead and to work 
with VR&E and DoD to begin the process of blending these programs 
into a single unified effort with a common title, perhaps Hire a 
Hero, that really sounds good to me. 
	Itï¿½s almost a cliche to say that VAï¿½s Voc Rehab and 
Employment Program should be the crown jewel in the VA benefits 
program.  Unfortunately, the reality over the past few years is 
that Voc Rehab and Employment has taken a back seat to other 
benefit programs and issues. 
	I want to be clear that all of us here share in that 
shortcoming.  The Department and Congress respond to what the 
veterans organizations and others see as the major programmatic 
shortfalls. 
	For the past several years, VSOs have been most vocal about 
the Compensation and Pension program.  As a result, C&P has gotten 
the lionï¿½s share of attention on the Hill and at the VA. 
	That focus has resulted in Voc Rehab and Employment program 
 underperforming to the point where former VA Secretary Anthony 
Principi felt compelled to establish a task force to review the 
program's goals and performance and recommend improvements. 
	The task force reported out over 100 recommendations 
including several on contracting.  Contract services are vital to 
the success of the VR&E program as a way to augment permanent VA 
staff and to increase geographic access to program services.  I 
have asked VA to come here today to discuss how they contract for 
services, the rates they pay, and how they conduct oversight of 
their contractors. 
	We are also interested in how VA and the Veterans Employment 
and Training Service are implementing their most recent Memorandum 
of Agreement to improve employment services for disabled veterans 
in the Voc Rehab and Employment program. 
	It is absolutely vital that these two agencies cooperate 
in the closest possible manner to achieve higher employment and 
retention rates among disabled veterans.  Their recent MOA 
established several working groups and I look forward to hearing 
how this process is evolving. 
	I now recognize our Ranking Member, Ms. Herseth for any 
opening remarks that she may have. 
	MS. HERSETH.  Thank you, Mr. Chairman.  Good morning to you 
and to all those joining us here at the Subcommittee today.  I 
thank you for holding todayï¿½s hearing to explore such important 
and timely subjects.  Indeed, contract management and interagency 
 communication are key for responsible stewardship of federal 
resources.  And I want to thank the witnesses for being here today 
and look forward to your insightful testimony. 
	Vocational Rehabilitation and employment counseling services 
are a critical component of any disabled veteransï¿½ seamless 
transition from military service to civilian life.  The Department 
of Veterans' Affairs Vocational Rehabilitation Employment Program 
and the Department of Labor's Veterans Employment and Training 
Service play the primary and crucial roles in administering such 
services. 
	Accordingly, Mr. Chairman, I am very pleased that we are 
going to be exploring the VR&E program's contract -- contracting 
and management services and processes as well as the costs for 
oversight and management of these contract services. 
	I am also interested in hearing from the witnesses, as you 
mentioned, about the progress related to the implementation of the 
recent Memorandum of Agreement between VR&E and VETS concerning 
improved -- more coordination and communication between the agencies. 
	The State of South Dakota has National Guard soldiers 
activated in support of operations in Iraq and Afghanistan.  Some 
of these brave servicemembers have returned injured and are now 
currently or will in the near future seek vocational rehabilitation 
and employment services.  They are like all disabled veterans from 
around the country who deserve our best efforts to provide that 
seamless and effective transition from military service to civilian 
life and to the workforce. 
	Thank you, Mr. Chairman.  I yield back. 
	MR. BOOZMAN.  Thank you, Ms. Herseth.  Our first panel is an 
important player in the Voc Rehab and Employment process.  DAV has a 
long history of interest in the program and Mr. Brian Lawrence the 
Assistant National Legislative Director is here today to present 
DAV's testimony.  Brian, you are now recognized. 

        STATEMENT OF BRIAN E. LAWRENCE, ASSISTANT NATION-
	AL LEGISLATIVE DIRECTOR OF THE DISABLED AMERICAN
	VETERANS 

	MR. LAWRENCE.  Thank you, Chairman Boozman.  Good morning, 
Chairman and Ranking Member Herseth.  On behalf of the 1.3 million 
members of the DAV, I am pleased to present our views pertaining to 
the Department of Veterans' Affairs Vocational Rehabilitation and 
Education Contract Services in its coordination with the Department 
of Labor Veteransï¿½ Employment and Training Services, or VETS.  We 
thank you for holding today's hearing. 
	The DAV was founded on the principle that our nation's 
first obligation to veterans is rehabilitation of its wartime 
disabled.  Along with quality health care and adequate 
compensation, this principle envisions gainful employment as a 
primary step toward that goal. 
	The VR&E program is responsible for providing services 
and assistance that will enable disabled veterans to obtain and 
maintain stable and gainful employment.  The importance of its 
mission is heightened during the war on terror on thousands of 
servicemembers who are returning from Afghanistan and Iraq with 
serious injuries. 
	Primarily, DAV's recommendations regarding contract services 
and coordination of efforts between VR&E and VETS reflect those 
made in the 2004 VR&E task force report.  We are pleased that most 
of the steps to implement those recommendations have been taken.  
And we encourage VR&E and VETS to continue their progress in that 
regard. 
	The VETS an VR&E are two separate agencies.  Their concerted 
efforts are necessary to maximize disabled veterans' opportunities 
for gainful employment.  Coordinating such efforts likely poses some 
complex challenges.  I have been with the DAV for more than a decade 
and throughout my tenure I have witnessed the internal challenges VA 
faces in trying to coordinate efforts between its benefits 
administration and its health administration. 
	Since VETS and VR&E are completely separate departments it's 
easy to see why maintaining open lines of communication is an even 
greater challenge.  But they are challenges that can be overcome and 
among other recommendations to aid in that regard we recommend that 
each VR&E office should include at least one DVOP, which is a 
Disabled Veteran Outreach Professional, among its staff. 
	We also recommend that the coordination of efforts between 
VR&E and VETS must also continue to ensure the establishment of the 
five-track system of services available to disabled veterans.  The 
five-track system provides an array of services that recognize the 
variant needs of individual disabled veterans.  To be fully 
effective, the five-track system will require teamwork between the 
two agencies to ensure that disabled veterans receive appropriately 
suited services. 
	Thank you, Mr. Chairman.  That completes my statement and I 
will be happy to answer any questions you may have. 
	[The statement of Brian E. Lawrence appears on p. 26] 
 
	MR. BOOZMAN.  Thank you very much, Mr. Lawrence.  You just 
recommended that a DVOP be assigned to every VR&E office.  Has your 
field staff, noticed any resistance to that on the part of the state 
employment services? 
	MR. LAWRENCE.  No, sir.  I think that would probably be 
welcome by most of the offices. 
	MR. BOOZMAN.  Okay.  AMVETS states for the record that VA 
does not give priority within the Voc Rehab and Employment program 
to those veterans with severe disabilities.  Do you agree with that 
statement? 
	MR. LAWRENCE.  That has not been my experience.  There is 
probably different case scenarios for as many different offices as 
there are.  But, I have worked with the Salt Lake regional office as 
a service officers and also Bay Pines in Florida.  And I also 
have -- am a product of vocational rehabilitation myself.  And I 
worked with the Iowa department.  And all of the -- all of my 
experiences they have been very helpful and go out of their way to 
help veterans regardless of how severely disabled they are. 
	MR. BOOZMAN.  Should they triage? 
	MR. LAWRENCE.  Pardon me? 
	MR. BOOZMAN.  Should they triage? 
	MR. LAWRENCE.  Should they triage? 
	MR. BOOZMAN.  Yes, those applying for the Voc Rehab benefits.
	MR. LAWRENCE.  I think that every disabled veteran coming 
before them should receive the same amount of services and 
attention.  Yes, I imagine probably there should be some level of 
prioritization that would -- I mean they are going to have to do 
different things for various veterans, which is part of what the 
five-track system recognizes from the task force recommendation. 
	MR. BOOZMAN.  Thank you.  Ms. Herseth. 
	MS. HERSETH.  Well thank you very much for your testimony.  
And, you know, you had addressed some things in both your written 
statement and the testimony you just provided.  But, perhaps if you 
could elaborate in your opinion, from your perspective, and from 
the organization's perspective, since the completion of the VR&E 
task force report, do you see improvement by the VR&E program with 
respect to vocational rehabilitation services as well as the 
communication coordination with the Department of Labor?  I mean 
you identify that there would be some challenges.  Do you see that 
since last fall when the memorandum was signed that some of those 
challenges have already been overcome?  Or at least can you sense 
whether or not there is a strategic plan in place to address and 
overcome those challenges? 
	MR. LAWRENCE.  I spoke with my service staff members prior 
to coming over here today to get their opinions as well and see if 
they had any feedback from the field.  And it was thought that there 
might be a slight improvement in that regard as far as the 
coordination of efforts between the two agencies, but there were 
not really any noteworthy examples to indicate that great leaps and 
bounds had been made in that regard. 
	I do think that there has been an improvement since the task 
force report with viewing vocational rehabilitation as an employment 
program.  It used to be just kind of viewed, I think, as an 
education program and, you know, was thought of, you know, it was a 
different way for people to get through college.  And I do think a 
lot more emphasis has been placed on not only education, but 
employment as well.  So we are pleased to see that. 
	MS. HERSETH.  And you would say that that is the case with 
both agencies? 
	MR. LAWRENCE.  Yes. 
	MS. HERSETH.  Okay.  Are you hearing anything from your 
membership in particular for those that may live in more rural areas 
about any difficulties they may be having in accessing vocational 
rehabilitation services?  Is that something that you can assess very 
well in terms of membership and geographic distinctions? 
	MR. LAWRENCE.  Yes.  I think that rural veterans probably 
in comparison have maybe slightly better services then what some of 
the larger centers would have.  Maybe itï¿½s a little more 
individualized and we recommend in the IV that counselors be limited 
to a certain number of clients.  And I think that maybe some of 
the rural veterans that their counselors are not as busy with, you 
know, a vast number of clients.  Or maybe able to provide a little 
more individualized attention. 
	MS. HERSETH.  Okay.  And I guess I just would have one 
followup question along the lines of what the Chairman was asking.  
Would -- in your response about feeling that some prioritization 
would have to occur, do you say that because of your experience in 
how these programs are just generally administered without funding 
considerations?  Or do you say that because of any of the budget 
constraints that we have been facing within the last couple of 
years? 
	MR. LAWRENCE.  No.  I -- 
	MS. HERSETH.  Just given the increase in the number of 
veterans that are returning from Iraq and Afghanistan that have 
suffered some very serious injuries. 
	MR. LAWRENCE.  No.  I, in no way, was considering budget 
constraints in saying that there should be a prior -- I was merely 
thinking of the array of needs posed by individual veterans.  And 
that would be the only categorization that we would recommend. 
	And obviously somebody with catastrophic level disabilities 
is going to require a different focus than somebody with a 20 
percent or a 30 percent injury to their leg.  And that goes along 
with what I said about the five-track program.  That would be the 
only type of, well, categorization that I would recommend. 
	MS. HERSETH.  Thank you, Mr. Lawrence.  I would yield back 
to the Chairman. 
	MR. BOOZMAN.  Thank you very much for your testimony today, 
Mr. Lawrence.  We appreciate the input and appreciate all that the 
DAV is doing in advocacy, thanks for your testimony. 
	MR. LAWRENCE.  Thank you, sir. 
	MR. BOOZMAN.  Let's have the second panel now.  We are 
really pleased to have Ms. Judy Caden, Director of the Vocational 
Rehab and Employment Service with us.  She is accompanied by 
Mr. Jerry Braun, her Deputy Director and Mr. Jan Frye, Deputy 
Assistant Secretary for Acquisition and Material Management. 
	The Honorable Charles Ciccolella -- I have been working on 
that all morning so that I will get that right.  You are like me, 
Booze-man, Boozman, whatever.  I know I am not the first one that 
struggled a little bit.  But it is good to have you here.  The 
Department of Laborï¿½s Assistant Secretary for Veterans Employment 
and Training.  And we look forward to getting your view on how we 
progress.  Ms. Caden, go ahead and start if you would.  Thank you. 



        STATEMENTS OF JUDITH CADEN, DIRECTOR, VOCATIONAL
	REHABILITATION AND EMPLOYMENT PROGRAM VET-
	ERANS BENEFITS ADMINISTRATION ALONG WITH JERRY
	BRAUN, DEPUTY DIRECTOR VOCATIONAL REHABILITA-
	TION AND EMPLOYMENT, VOCATIONAL BENEFITS ADMIN-
	ISTRATION AND JAN FRYE, DEPUTY ASSISTANT SECRE-
	TARY FOR ACQUISITION AND MATERIAL MANAGEMENT, 
	DEPARTMENT OF VETERANS AFFAIRS

	MS. CADEN.  Mr. Chairman and members of the Subcommittee, 
thank you for inviting me to appear before you today to discuss 
specific elements of the Department of Veteransï¿½ Affairs 
Vocational Rehabilitation and Employment, VR&E, Program.
	In keeping with your request, I will begin by talking about 
VR&E's contracting process, costs, and management and then I will 
discuss our partnering activities with VETS. 
	The Vocational and Rehabilitation and Employment program 
utilizes contractors to supplement and complement the services 
provided by VR&E staff to veterans participating in each of the 
VR&E programs. 
	A national acquisition strategy, or NAS, was instituted in 
order to standardize and streamline the acquisition procedures used 
to certify contractors.  The NAS resulted in a list of providers 
for each regional office for initial vocational assessments and 
evaluations, case management and rehabilitative services, and 
employment services. 
	The Office of Inspector General recently conducted an 
evaluation of the contract and identified several vulnerabilities. 
And as a result we have decided not to go forward with the final 
option year of the NAS.  And instead we are in the process of 
issuing a new NAS for a five-year period beginning in fiscal year 
2007.  The vulnerabilities identified by the IG, in combination with 
our past experience will help to ensure that we improve upon the 
previous NAS contracts. 
	Expenditures under the current NAS average approximately 
$8.3 million per year.  The VR&E officers in the field are 
responsible for management and oversight of the contracting 
activities at each of their stations.  Proposed expenditures are 
obligated by the VR&E officers.  The work performed by the 
contractors is monitored by counselors.  And payments are approved 
by the VR&E officer. 
	Overall contract expenditures at a given regional office 
are tracked via our corporate management reports.  And VR&E officers 
closely monitor their funds and expenditures to ensure their balance 
is adequate to provide services throughout the fiscal year. 
	In order to manage contracting activities, each regional 
office is required to have two basic level warranted contracting 
officers and at least two contracting officer technical 
representatives, which are called COTRs.  Contracting officers are 
the VR&E officers and their assistants.  And these individuals are 
issued warrants upon successful completion of a mandatory 40 hour 
training requirement. 
	VR&E counselor serve as COTRs, and the COTRs are responsible 
for quality assurance, contract monitoring, conducting quality 
assurance reviews, and serving as the primary point of contact for 
the contractor.  And to date we have 256 COTRs in the field. 
	We have expanded the VR&E site visit protocol to require a 
review of contracting activities to ensure the station is adhering 
to the contracting guidelines for local and NAS contracts.  And 
additionally the site visit team reviews contract documentation to 
ensure required justifications for contractor selection are in 
place. 
	I will now discuss our interaction with VETS.  On 
October 3, 2005, we signed a revised Memorandum of Agreement with 
the goal of improving service delivery to veterans with service- 
connected disabilities.  The new agreement expands and solidifies 
our cooperation as partners in case management, employment 
services, reporting, oversight, and monitoring.  Joint work groups 
will develop recommendations to overcome the critical challenges 
facing the partnership in the area of performance measures, joint 
training, and joint data collection analysis and reporting. 
	Implementation of the agreement with VETS has been made 
easier with the co-location of 72 disabled veterans outreach 
program, or DVOP, specialists at 36 of our VA regional offices and 
36 outbased facilities.  VR&E's employment coordinators partner 
with the DVOP specialists and local veterans employment 
representatives to assess the feasibility of employment services, 
recommend an appropriate vocational rehabilitation plan, and 
deliver job readiness training and job placement services. 
	We have included our DOL partners in our national deployment 
of the five-track employment model, which is an employment driven 
service delivery system focusing on presenting employment options 
early in the rehabilitation planning process.  And VR&E staff have 
presented briefings at many of DOLï¿½s conferences and we have also 
jointly produced and presented satellite training broadcasts.  
Also, DOL representatives delivered presentations at our last two 
VR&E management training conferences. 
	I believe we are making progress forging an effective 
partnership with VETS.  Veterans with service-connected disabilities 
are benefitting from that progress through the availability and 
delivery of more comprehensive employment services.  Mr. Chairman, 
this concludes my testimony.  I greatly appreciate being here today 
and look forward to answering any questions you or other members of 
the Subcommittee may have. 
	[The statement of Judith Caden appears on p. 31] 

	MR. BOOZMAN.  We are joined by Mr. Campbell of California.  
He is our newest member on the Committee.  And we really appreciate 
your willingness to serve on the Veteransï¿½ Affairs Committee in 
general.  And we are really excited about having you on this 
Subcommittee that is so important.  Do you have any comments? 
	MR. CAMPBELL.  No.  Thank you, Mr. Chairman. 
	MR. BOOZMAN.  Thank you.  The regional sites that have 
cooperation between DVOPS and LVERs and VR&E staff, in some, 
cooperation is good.  However, The American Legion states that 
Texas and Alabama, as sites, perhaps have less than satisfactory 
cooperation, coordination between DVOPS and LVERs and VR&E staff.  
I guess I would assume that perhaps those two states are rare, 
hopefully they are, but perhaps we have some problems, with other 
states as well?  I guess what we would like to know is your views 
as to what are some of the causes and then maybe some of the 
solutions to that situation. 
	MS. CADEN.  Well, we have started to look into that.  I read 
that in the testimony.  We talk on a regular basis to our VR&E 
officers.  We talk on a regular basis with DOL and VETS.  And in 
many areas itï¿½s working very well.  Sometimes itï¿½s just a matter of 
is someone available to be in our office.  Is the communication -- 
but I would like to explore it some more if we can and report back 
to you. 
	MR. BOOZMAN.  You can do that.  Again, I was going to follow 
up and say that perhaps, that would be very appropriate.  If you 
could give us some status, as to what is going on in that area. 
	In your testimony you mentioned that the IG identified 
several vulnerabilities in the current national acquisition 
strategy.  Can you talk to us a little bit more specifically about 
what the vulnerabilities were and did the IG find any instances of 
fraud, waste, or abuse? 
	MS. CADEN.  Sure.  No, there were no instances in that 
report of fraud, waste, or abuse.  It went to the process that was 
in place for the most part.  And they pointed out things like that 
some of the contract specifications, the statements of work, were 
not as clear and concise as what they should be. 
	Inadequate follow up on our part on the VR&E part of 
internal quality assurance and doing the oversight that is needed 
and necessary.  And in some cases inadequate justification for 
selection of higher price contractors to perform the work. 
	And what we have done since that report, we have a pretty 
detailed plan for reacting to each of those instances.  We beefed 
up to a considerable degree our oversight and the quality 
assurance.  I mentioned in my testimony, we now go out and visit 
the offices.  That is one of the things we are looking at.  We are 
also getting reports on a regular basis on contracting.  And we 
review, in the case of the contract specifications, we review that 
to make sure they are clear and what they should be, as well as 
reviewing those price justifications.  And itï¿½s also because of 
what the IG found and our own concerns that we are going to 
re-compete the contracts. 
	MR. BOOZMAN.  I am an optometrist, an eye doctor, so any of 
you all that are here, if you are having problems with your glasses 
or your contacts or advice on your cataracts, I can do that after 
the Committee meeting is over.  But one of the things that we were 
governed with were the Stark Rules it prevented self-dealing.  Is 
the VA, under those same sort of rules? Are you familiar with the 
Stark Rules? 
	MS. CADEN.  I am not.  No. 
	MR. BOOZMAN.  Okay.  Basically, as an eye doctor, you could 
not do things with medicare and medicaid, as far as, having your 
own labs, so that you order tests that the governmentï¿½s paying for 
that is basically your business also.  For instance, if you were a 
psychiatrist and on the counseling service, then you couldn't refer 
to your own counseling service.  Does that make sense? 
	MS. CADEN.  Well, what Dr. Braun was just saying and I will 
answer this is that there is a code of ethics involved with our own 
counselors and what they can and canï¿½t do.  But, did you want to 
expand on that? 
	MR. BRAUN.  Mainly to say, yes, that we are not necessarily 
familiar with the acronym or the phrasing that you are using, but 
the effort to make sure that individuals are not referring to their 
own practice and things of that sort is an effort of oversight that 
we do have in place or are working on. 
	MR. BOOZMAN.  So you mentioned ethics.  And sadly, we had 
ethics too.  But some people are not ethical and so in the 
early '90's, we had to adopt the Stark. The sad thing is that there 
is always people out there gaming the system.  And if we just do 
have an ethic situation, then I think itï¿½s important that we don't 
have situations where you self-deal.  And so I would like to know a 
little bit more about what we are doing about that.  And then if we 
do need to address that maybe some advice where we specifically say 
we are not going to self-deal and here is the penalty if you do do 
it. 
	MS. CADEN.  We can develop that for you.  I do want to say 
that every time we have a conference, and we do those yearly, we have 
a fairly detailed session on ethics.  And we bring in a guest 
speaker to talk about that.  And then there are certifications that 
have to come from that.  But I will provide more information for you. 
	MR. BOOZMAN.  Well, we are all having fairly detailed 
conversations about ethics.  And then also the statutes that are in 
place that if you go beyond that, that you get yourself in big 
trouble, which is appropriate.  Ms. Herseth. 
	MS. HERSETH.  Thank you, Mr. Chairman.  Ms. Caden, thank you 
for your testimony today and the insights.  And I do appreciate 
your willingness to provide us with status updates on how the 
relationship is working as you seek to overcome some of the 
challenges that were mentioned before between the two agencies. 
	I remember last year a lot of back and forth.  And I 
remember when GAO was here, I mean, we kind of kept the pressure on 
to get that memorandum signed and in.  And I think what is most 
important for our follow up, you had mentioned, you know, your 
department's follow up as it related to the contracting services 
and oversight.  The Subcommitteeï¿½s follow up has to be, you know, 
that we continue to get some information from you that others have 
input on how we are overcoming the challenges, what the strategic 
plans are.  If there is one agency or the other that is not being 
quite as responsive as the other one, those are things that we need 
to know, follow up with on a fairly regular basis. 
	So I appreciate your willingness to do that.  And, you know, 
perhaps, Mr. Ciccolella you certainly work with us in that regard as 
well.  And I appreciate the Chairman spoke to asking you to further 
describe the vulnerabilities that the IG report identified.  So I 
appreciate that elaboration on your part. 
	And you had mentioned in terms of the new NAS that you are 
going to be starting to improve, not only from the IG report, but 
your own sense of what needed to happen.  You described some of the 
steps that you are going to take to improve those contract 
management oversight plans, including the additional site visits, 
further review.  Which leads me to the question of whether or not 
to your knowledge VA has ever conducted a study on the cost 
associated with providing oversight and management of VR&E contract 
services, including staff resources and the training for both areas 
of the site visits for the review and elsewhere? 
	MS. CADEN.  I have not seen a study like that.  We could 
probably go back and start to breakout those costs for you in those 
different areas, but I have not seen it laid out that way.  But we 
can do that. 
	MS. HERSETH.  Thank you.  And Mr. Chairman, I would yield 
back. 
	MR. BOOZMAN.  Thank you.  Mr. Frye, how would you describe 
VA's overall contracting processes and how many warranted contracting 
officers does the VA have?  How many of those are directly in your 
chain of command? 
	MR. FRYE.  The VA has over 701 contracting officers.  With 
regard to this contract, or these contracts, 241 contracts, there 
was one warranted contracting officer that put 241 contracts in 
place in a central office.  And these were IDIQ contracts, 
Indefinite Delivery Indefinite Quantity contracts.  And then orders 
are placed against those contracts out in the field. 
	Those orders are placed by warranted contracting officers.  
They hold warrants that equate to $100,000 or less.  And they place 
orders against these contracts, these 241 contracts, for the 
services that are needed out in the field. 
	MR. BOOZMAN.  Does the 40 hour training courses for 
contracting officers technical representatives, does that include 
testing?  Who supervises the course and the testing? 
	MR. FRYE.  Is the question to me, Mr. Chairman? 
	MR. BOOZMAN.  Just to whoever.  Whoever knows the answer. 
	MR. FRYE.  I do not know if these contracting officers take 
a test.  They do receive 40 hours of training.  And they are 
warranted by the head of the contracting activity out in the field.  
They are not warranted by me because their warrants are $100,000 or 
less. 
	MR. BOOZMAN.  You mentioned a number of contracting warranted 
VR&E and assistant VR&E officers.  You have a number currently.  Are 
you comfortable with the number of folks that you have got? 
	MS. CADEN.  Well, I can answer for VR&E.  I think we are 
comfortable with the number, but we are looking to maybe shift some 
of those responsibilities.  As FTE becomes available we would like 
to have maybe some contract specialists in each of the offices or a 
combination of offices and let the counselors get back, because 
these are counselors who are acting in this capacity, and let them 
get back to working with the veteran on an actual counseling basis 
and shift some of the responsibility for the management of contracts 
to a different individual.  But right now, I think, because we have 
at least two in each office and a number of others that work as the 
COTRs, we are okay. 
	MR. BOOZMAN.  Who oversees the contracting actions? 
	MS. CADEN.  Well basically it would be the VR&E officer.  
But there is a contracting specialist in my office that I have 
asked to kind of oversee everything going on out there.  And then 
they also work very much with Mr. Fryeï¿½s organization. 
	MR. BOOZMAN.  So is that person the national contracting 
officer? 
	MS. CADEN.  The national contracting officer is part of 
that organization.  I have a contracting specialist on my staff who 
works very closely with them. 
	MR. BOOZMAN.  Okay.  Very good.  Have you got any other 
things, Ms. Herseth? 
	MS. HERSETH.  No, I don't. 
	MR. BOOZMAN.  Have you got any other things?  Mr. Campbell, 
have you got any questions? 
	MR. CAMPBELL.  Yes, please.  Go ahead. 
	MR. BOOZMAN.  Okay.  Just a couple of more things and  then 
we will get you out of here.  What are the range of costs associated 
with each of the three categories of contract services and did VA 
conduct market surveys to determine what the should cost process for 
each category and region? 
	MS. CADEN.  We did do market surveys.  And we have been 
updating those as much as possible.  Especially getting ready for 
the next generation, the next NAS.  I do not know the pricings.  
Jerry, do you? 
	MR. BRAUN.  We do not have specific numbers on that right 
now.  But I think we could get it. 
	MR. BOOZMAN.  Okay.  In follow up can you provide us a copy 
of the draft of the statement of work now under the departmental 
review? 
	MS. CADEN.  Itï¿½s with Mr. Fryeï¿½s office right now.  But I am 
sure we can do that.  It's been drafted and it's going through the 
concurrence process. 
	MR. BOOZMAN.  Good.  Thank you.  Well, thank you all very 
much for your testimony.  And I do appreciate your hard work.  And I 
really want to commend VR&E for responding to the Inspector 
General's findings as a means to maintain the integrity of their 
program. 
	You know, the function that we are tasked with is oversight, 
of these things.  And then you are tasked with that also.  We very 
much want to give you the tools.  I have got all the confidence in 
the world, our duty is to ask the questions and find out what is 
going on.  Your duty is to do the same thing and make sure that it 
is going right.  And then like I say, we do want to give you the 
tools that you need to do that function.  That is what the American 
public expects out of us. 
	So, we are a little bit concerned about, I think, the larger 
issue within VR&E regarding contract management and things.  So, 
probably we will come back and do some more things in the not too 
distant future specifically concerning that and the contracting 
programs at VA. 
	We are also a little concerned, or just really want some 
more information about the VR&E that is staffed at the local 
levels.  And I think what we would like to do, and you all can 
perhaps help us maybe in brainstorming, facilitating.  You know, 
if we can get the states together and try and foster a little bit 
more cooperation and really would like to hear from VA and VETS as 
to how that might be done.  Things like the differences in the 
educational levels.  You know, what we are seeing, and how that 
affects things.  So, again, that is something that we would also 
like to follow up on.  So, unless Ms. Herseth has anything else. 
	MS. HERSETH.  Did Mr. Ciccolella testify yet? 
	MR. BOOZMAN.  No.  He is just here. 
	MR. CAMPBELL.  He needs to speak. 
	MR. BOOZMAN.  Okay.  I am sorry.  We almost left you out.  
It is your turn to speak. 

STATEMENT OF CHARLES S. CICCOLELLA, ASSISTANT SECRETARY FOR THE 
VETERANS' EMPLOYMENT AND TRAINING, U.S. DEPARTMENT OF LABOR 

	MR. CICCOLELLA.  Mr. Chairman, Ranking Member Herseth. 
	Congressman Campbell.  Thank you very much for the 
opportunity to appear before the Committee and talk about the 
relationship and the new cooperation between the Department of 
Veterans' Affairs and their Vocational Rehabilation employment 
program and the Department of Laborï¿½s Veterans Employment and 
Training Service. 
	VR&E and VETS have a history of cooperation.  We had an MOA 
in the 1990's.  We have done a partnership guide.  There has been 
joint training.  But with the signing of the Memorandum of Agreement 
that Judy and I signed in October, I think itï¿½s a dramatic step 
forward.  And I think itï¿½s a dramatic step forward because I think 
we have the commitment of both agencies to bring the resources of 
both of the agencies together to improve employment outcomes.  
And not only outcomes, but also improve the quality of employment 
for the VR&E participants. 
	In other words, employment in the jobs that are going to 
last.  The jobs of the Twenty-first Century.  And to make that work 
better, we have to also get the active participation of the state 
workforce agencies because the American workforce system, which 
centers on that one stop career center, is an integrated delivery 
system for which business and the employers are the customer.  
That is something that VETS and the Department of Labor brings to 
the table. 
	Now with regard to the performance of the VR&E program and 
the VETS cooperation, I think we are doing better.  The numbers are 
up for fiscal year 2005.  As part of the MOA, as Judy mentioned, we 
are also working on three work groups; the data sharing work group,  
I think that will be very important; performance measures for the 
partnership, I am very interested in seeing how that will go; and 
the national Veteransï¿½ National Training Institute Development of a 
training curriculum is a work group. And that will be, if not the 
most important work group, probably one of the most important. 
	I would also like to say that the cooperation between 
the Department of Labor and the VA extends beyond just VR&E and 
VETS.  We sit on the VA advisory Committee on rehabilitation; 
advisory Committee on women veterans; and their advisory Committee 
on homeless veterans.  I personally sit on that Committee.  We 
participate in the VR&E development of the five-track program. 
	And I think similarly the VA participates on our transition 
assistance program steering Committee.  And that is an extremely 
important Committee.  Itï¿½s becoming more and more important as more 
service members come back through the military and transition into 
civilian life. 
	I think our collaborative efforts will continue to improve 
and expand.  I personally see our mutual goals, not only in terms 
of more successful employment outcomes, and increased outcomes for 
the VR&E clients, but also in working together to significantly 
improve the smooth transition of our servicemembers from the 
military, and particularly those who have been injured, wounded, or 
disabled and moving them into the workforce. 
	I believe the commitment of both agencies to this goal is 
absolute.  I think that every one today realizes that no one agency 
can do this alone.  And itï¿½s only by working across agency lines 
that we will get anything done and we will improve the outcomes. 
	Mr. Chairman, that concludes my oral statement.  I would 
be happy to take your questions. 
	[The statement of Charles S. Ciccolella appears on p. 37] 
 
	MR. BOOZMAN.  Thank you very much.  Ms. Herseth. 
	MS. HERSETH.  Thank you, Mr. Chairman.  And thank you, 
Mr. Ciccolella.  And thank you for further elaborating in your 
testimony the working relationship between the agencies how it 
goes beyond VR&E and VETS, as you just described.  We appreciate 
that and the commitment of the resources to go beyond, as you 
mentioned, improving the outcomes to the quality of those 
employment opportunities. 
	And as we were discussing earlier with Ms. Caden, I mean, 
in terms of our oversight responsibility and as you begin to maybe 
break some of these costs for oversight down, we need to make sure 
that you have the resources that you need to do precisely what you 
at this increase coordination that the MOA requires. 
	In your opinion, since the implementation of the VR&E 
five-track system at the pilot project sites, has VETS seen a 
corresponding improvement in placing such rehabilitated disabled 
veterans into employment since the five-track has been implemented? 
	MR. CICCOLELLA.  Well, when the five-track, as I understand 
it, itï¿½s still in a demonstration phase.  It has not been 
implemented fully.  Is that right? 
	MS. CADEN.  Well the pilot period is finished.  We are 
rolling it out -- 
	MR. CICCOLELLA. Rolling it out now. 
	MS. CADEN.   -- now in all the offices. 
	MR. CICCOLELLA.  Well, let me put it this way.  All of our 
state directors, we have state directors of veteransï¿½ employment and 
training in each one of the states and territories.  All of them are 
very much aware of the importance and the priority we put on the 
relationship between the voc rehab people in the states and the 
VETS sponsored DVOPS and LVERS.  We are requiring every one of, 
our state directors, to update their Memorandum of Agreement.  
And Judy Caden is requiring the same thing.  We have seen an 
increase for program year 2005 in the number of placements through 
the employment system.  In other words, the active involvement of 
the disabled veteran outreach program specialists has been 
beneficial. 
	But I donï¿½t know whether itï¿½s too early to tell if this is 
really having an impact.  Itï¿½s going to work where people drop the 
barriers and work across agency lines and agree that the most 
important thing is to serve our disabled veterans.  And there are 
certain pockets, and you mentioned Texas, Alabama, there are a 
couple of other states that are not doing as well as other states. 
	But, we are seeing some really, really good ideas and 
innovative practices.  In your own state, in South Dakota, for 
example, and in other states, where the program is working very well. 
And it's working very well because we have got good leadership out 
there on both sides. 
	MS. HERSETH.  Well, I appreciate that.  And I think you 
answered my second question and perhaps started to allude to 
addressing my third.  The second question was just going to be in 
your opinion how important it is to involve the state workforce 
agencies in the plan, in the coordination, in the discussions 
regarding that inter-agency interaction.  And so I would assume that 
based on what you said you feel itï¿½s very important in part to 
overcome any of those barriers that may still exist by being very 
inclusive.  To talk about what is most important and serving the 
constituency here to improve those employment results. 

	MR. CICCOLELLA.  Well, that is absolutely correct.  You know, 
we have a workforce system in this county.  Itï¿½s a $14/$15 billion 
investment every year.  There is some great training opportunities 
in that.  Not all the states use all their workforce investment act 
money.
	The kind of neat thing about the situation today is that 
Congress, in its wisdom and I think great foresight, when they passed 
Public Law 107-288, they established priority of service for 
veterans.  And within that priority of service for all workforce 
training programs, there are priorities for special disabled, 
disabled, and then veterans. 
	So I think we are making significant progress there also in 
terms of making certain that the workforce system understands that 
when veterans come in for services, they get priority services.  And 
I travel a lot and I talked to an awful lot of people in Career One 
Stops, the delivery service people, and I am seeing a lot of 
improvement in that regard. 
	MS. HERSETH.  Very good.  I would yield back, Mr. Chairman. 
	MR. BOOZMAN.  Are you getting any resistance from the state 
employment services regarding DVOP station or the VR&E officers. 
	MR. CICCOLELLA.  Not at all.  We have not had that and 
frankly, Mr. Chairman, we have got it written into the solicitation 
for grant applications.  And we do have a hammer, a lever on that, 
because we have got the grant money and we have got the state 
director who is monitoring that. 
	MR. BOOZMAN.  This is really for both groups.  Can you 
describe the cross-training you are doing and your plans to expand 
the initiative?  I am sorry, I am mumbling.  The cross-training.  
Yes, ma'am. 
	MS. CADEN.  Well, as an example, we have got training going 
on right now to roll out our five-track system.  And the DVOP and 
LVERs and other people from DOL have been part of that training, 
they are participating in it as we do it in regional areas.  And they 
have also been presenting that training.  One of the work groups 
that we have got formed is to develop joint training opportunities 
working through the NVTI and a curriculum where we can both partake 
of it.  We did a couple of broadcasts as kind of a kickoff of that 
joint training effort to make sure that the VR&E counselors in the 
field, as well as the VETS people in the field, got the same message 
on things like USERA and priority hiring authorities that are out 
there.  So we are trying to get the message out to both. 
	MR. CICCOLELLA.  I would agree with what Judy has said.  
It's important for both sides to understand the resources that the 
other side brings to the table.  And it also, knocks down some 
barriers when you get these folks out and they realize that they are 
really focused on the same mission. 
	MR. BOOZMAN.  One of the things I know that myself and my 
staff, Ms. Herseth and her staff, are really worried about are these 
areas of hiring and employment.  You know, we are blessed.  The 
un-employment rate overall is down.  But we have got these pockets.  
I am a member of the NATO Congress.  And NATO -- those are our great 
allies.  That thing has served with time and doing very, very well.  
And yet right now they are in the process of becoming a rapid 
deployment force to respond to the needs as opposed to the old cold 
war, when we had all the troops amassed to prevent a tank invasion.  
So they are reinventing themselves. 
	I guess what I am wondering is, do we have the ability when 
we hear of General Motors laying off 5,000 people or 3,000 people, 
events like that, do we have to wait until we get that somehow 
reported through the system and then months later it comes out, that 
we have a problem there.  Where literally, we know there is a 
problem from the day that the announcement is made.  Is there 
ability or is there any thinking of how we could maybe respond to 
those areas quicker than we are doing?  Does that make sense? 
	MR. CICCOLELLA.  Yes.  It does.  I think you have to respond 
to it I believe in the context of, you know, what the workforce 
system can do. And specifically with the veterans.  With the GM 
layoffs and the Ford layoffs we need to, track that pretty 
carefully.  It's not like 14 or 30,000 people are going to be laid 
off right away like in Youngstown, Ohio, I think 18,000 people lost 
their jobs up there in the steel mills.  But it happens over time. 
	So that certainly gives the workforce system a sufficient 
amount of time to respond.  For example, in Virginia and North 
Carolina when the PillowTex folks went under and they were bought 
out.  We put a team from the Department of Labor down there in 
advance of the closings to do training and re-skill the workers in 
both North Carolina and Virginia.  And we had a veterans component 
for that effort. And it's not easy to do when people are my age, 
like in their 50's, to change jobs.  But it's just the way things 
are today.  Where our jobs go away and we have jobs in this country, 
five million, that we canï¿½t fill because we donï¿½t have the workers 
with skills, then that workforce system needs to be responsive to 
that. 
	And so that is what we did at PillowTex.  We have done it 
in a couple of other places.  So if the question is does the system 
have a capability to respond, you bet, it does have that capability to respond.  And should respond. 
	MR. BOOZMAN.  I guess what I would like to see, and again as 
a very informal this is what we do in those situations.  Almost like 
FEMA goes in in an emergency.  Because the situation that we are in 
now is a little different with our manufacturing and things than it 
has been in the past decades.  The problem is, if you lose 5,000 
jobs at the local auto plant, then the reality is that transfers to 
probably 15,000 jobs throughout the system because there is so many 
small vendors that are dependent in servicing that and the whole 
deal. 
	So, again, it's just something that I would like to see us 
do, and we would be glad to help in any way that we can, but I do 
think that -- and I think FEMA is a good example of just in an 
emergency that you go in.  And we would like to see that happen with 
a strong veterans component as part of that.  Would you all agree 
with that? 
	MR. CICCOLELLA.  We would be happy to respond to that, 
Mr. Chairman. 
	MR. BOOZMAN.  Again, something that perhaps we can look at 
later on.  So, do you have any -- Mr. Campbell, have you got 
anything you would like to add? 
	MR. CAMPBELL.  One thing. 
	MR. BOOZMAN.  Sure. 
	MR. CAMPBELL.  Thank you, Mr. Chairman.  One of the things 
being the new guy, this may be a silly question.  But being the new 
guy, I probably will do that frequently for at least a little while. 
But one of the things you said, Mr. Ciccolella, I believe, if I have 
not butchered your name too badly, was that one agency cannot do 
this alone.  What are the things -- why is that?  What are the 
things that -- you are collaborating I am hearing on a lot of 
things -- what are the things that you cannot collaborate on? 
	MR. CICCOLELLA.  Sure.  Well, Congressman, if you use the 
example of our partnership, the VA brings certain things to the 
table with regard to the services that they can provide for the 
servicemember, the injured servicemember or disabled servicemember. 
  They bring case management.  They bring counseling.  They bring 
the medical efforts so that the individual is stabilized.  They 
bring the program that provides the tuition and the stipend so 
that the individual can go through the training. 
	Now, VA is not necessarily an employment agency, although 
they have employment coordinators.  And some of their participants, 
a number of them, are placed into employment.  And their jobs are 
lined up by the employment coordinators, but not all of them. 
	And so we have a system in the country, we have had it 
since 1944, we had the veterans' employment representative in the 
job centers or the unemployment centers at that time.  And in the 
1980's because we had so many veterans from the Vietnam era who 
were unemployed, that is what created the disabled veteran 
outreach program specialists.  So we have two categories of veteran 
employment representatives in the workforce system. 
	And that DVOP or disabled veteran outreach program 
specialist, his or her job is to focus on veterans with barriers.  
But when you have significant disabilities, such as the Chapter 31 
clients do, then the DVOP is trained to do a high level of case 
management as well.  And more importantly, that person has access 
to the services of the workforce system.  And that is not only the 
job counseling and job searches and the resume writing and the 
training for interviewing skills and things like that, but also 
the all of the resources of Americaï¿½s workforce system that he or 
she can bring to bear for that veteran. 
	So the functions, the missions are truly complimentary.  
And if you are not working across agency lines collaboratively, then 
frankly some people in this program, the VR&E program, will fall 
through the crack because they will have to get their own jobs, or 
they will go back home and do whatever, or they will go, back to 
school. 
	And it will be a while before they get into employment.  And 
that is real important, especially with young veterans because young 
veterans have a tough time making the transition.  And if they are 
disabled, or severely wounded or injured, then itï¿½s even more 
difficult.  They have got significant barriers to employment. 
	VA can address some of those barriers and the Labor 
Department can address some of those.  But if we work together we 
are going to be a lot more successful. 
	MR. CAMPBELL.  Okay.  Thank you. 
	MR. BOOZMAN.  Do you have anything else Ms. Herseth?  Very 
good.  I appreciate the testimony from you, Mr. Ciccolella and 
Ms. Caden and Mr. Braun and Mr. Frye.  I really do appreciate your 
working together in the spirit that you are trying to get these 
things done.  And certainly, again, that is our mission is to help 
you in any way that we can.  And to move these things forward.  So, 
thank you very much for appearing.  We appreciate your testimony 
and the meeting stands adjourned. 
	MR. CICCOLELLA.  Thank you, Mr. Chairman. 
	[Whereupon, at 11:00 a.m., the Subcommittee was adjourned.] 
    
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