[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
                  U.S. DEPARTMENT OF VETERANS AFFAIRS 
                       CONSTRUCTION AUTHORIZATION 

=======================================================================

                                HEARING

                               before the

                         SUBCOMMITTEE ON HEALTH

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           FEBRUARY 27, 2008

                               __________

                           Serial No. 110-72

                               __________

       Printed for the use of the Committee on Veterans' Affairs

                               ----------
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41-372 PDF                       WASHINGTON : 2008

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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
PHIL HARE, Illinois                  GINNY BROWN-WAITE, Florida
MICHAEL F. DOYLE, Pennsylvania       MICHAEL R. TURNER, Ohio
SHELLEY BERKLEY, Nevada              BRIAN P. BILBRAY, California
JOHN T. SALAZAR, Colorado            DOUG LAMBORN, Colorado
CIRO D. RODRIGUEZ, Texas             GUS M. BILIRAKIS, Florida
JOE DONNELLY, Indiana                VERN BUCHANAN, Florida
JERRY McNERNEY, California           VACANT
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                                 ______

                         SUBCOMMITTEE ON HEALTH

                  MICHAEL H. MICHAUD, Maine, Chairman

CORRINE BROWN, Florida               JEFF MILLER, Florida, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
PHIL HARE, Illinois                  JERRY MORAN, Kansas
MICHAEL F. DOYLE, Pennsylvania       HENRY E. BROWN, Jr., South 
SHELLEY BERKLEY, Nevada              Carolina
JOHN T. SALAZAR, Colorado            VACANT

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
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                            C O N T E N T S

                               __________

                           February 27, 2008

                                                                   Page
U.S. Department of Veterans Affairs Construction Authorization...     1

                           OPENING STATEMENTS

Chairman Michael Michaud.........................................     1
    Prepared statement of Chairman Michaud.......................    27
Hon. Jeff Miller, Ranking Republican Member......................     1
    Prepared statement of Congressman Miller.....................    27

                               WITNESSES

U.S. Department of Veterans Affairs, Donald H. Orndoff, Director, 
  Office of Construction and Facilities Management...............    16
    Prepared statement of Mr. Orndoff............................    33

                                 ______

American Legion, Joseph L. Wilson, Deputy Director, Veterans 
  Affairs and Rehabilitation Commission..........................     4
    Prepared statement of Mr. Wilson.............................    29
Independent Budget, Dennis M. Cullinan, Director, National 
  Legislative Service, Veterans of Foreign Wars of the United 
  States.........................................................     3
    Prepared statement of Mr. Cullinan...........................    28
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................     6
    Prepared statement of Mr. Weidman............................    31

                       SUBMISSION FOR THE RECORD

Salazar, Hon. John T., a Representative in Congress from the 
  State of Colorado, statement...................................    34


                  U.S. DEPARTMENT OF VETERANS AFFAIRS
                       CONSTRUCTION AUTHORIZATION

                              ----------                              


                      WEDNESDAY, FEBRUARY 27, 2008

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                                    Subcommittee on Health,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 10:02 a.m. in 
Room 334, Cannon House Office Building. Hon. Michael H. Michaud 
[Chairman of the Subcommittee] presiding.

    Present: Representatives Michaud, Brown of Florida, Miller, 
and Brown of South Carolina.

             OPENING STATEMENT OF CHAIRMAN MICHAUD

    Mr. Michaud. I would like to call the hearing to order. I 
would ask the first panel to come up.
    I would like to thank everyone for coming today. Today's 
hearing is an opportunity for the U.S. Department of Veterans 
Affairs (VA), Veteran Service Organizations (VSOs) and Members 
of this Subcommittee to discuss legislation dealing with fiscal 
year 2009 VA construction.
    Title 38 United States Code requires statutory authority 
for all VA medical facility construction projects over $10 
million and all medical facility leases more than $600,000 per 
year. This hearing is a first step in this process.
    I would like to note that this draft legislation is based 
upon the Department of Veterans Affairs fiscal year 2009 
budgetary request and authorization for fiscal year 2008. I 
consider this draft to be a starting point. I look forward to 
hearing from the VA, the VSOs and Members of the Subcommittee 
about other construction projects that are important to them.
    I will take under consideration the discussion we have here 
today and any input that may come up. I will then introduce 
legislation in the very near future.
    I would now like to recognize the Ranking Member Miller for 
any opening statement that he may have.
    [The prepared statement of Chairman Michaud appears on
p. 27.]

             OPENING STATEMENT OF HON. JEFF MILLER

    Mr. Miller. Thank you very much, Mr. Chairman.
    I appreciate you holding this hearing. I have a statement 
and I would like to go ahead and read it into the record if I 
might. I also apologize ahead of time. I have an Armed Services 
Committee hearing going on at the same time, and I have to be 
going in and out.
    Important to delivering high quality care to our Nation's 
veterans is the planning for construction, as we are doing, and 
renovation of VA's substantial healthcare infrastructure. As 
you know, VA maintains an inventory of approximately 1,230 
health facilities, including 153 medical centers, 135 nursing 
homes, 731 community-based outpatient clinics (CBOCs) and 209 
Vet Centers.
    VA initiated the Capital Asset Realignment for Enhanced 
Services (CARES) process to identify and address gaps in 
service and infrastructure about 8 years ago, and the CARES 
process is continuing to serve as the foundation for VA's 
capital planning priorities.
    VA's construction planning, however, is not without its 
challenges. The rising cost of construction has been 
significant at best. In fact, the draft legislation we are 
discussing today would provide over $670 million to account for 
cost increases for previously authorized construction projects.
    I am extremely concerned that VA has an inability to 
accurately project cost estimates, and it is adversely 
affecting the construction process. Escalating project costs 
continue to require this Committee to reexamine and increase 
authorizations for existing projects, hindering the ability to 
move forward with new projects important to improving access to 
care and supporting future healthcare demand.
    CARES identified Okaloosa County in my district in 
Northwest Florida as underserved for inpatient care. In fact, 
it is the only market area in Veterans Integrated Services 
Network (VISN) 16 without a medical center. However, VA has yet 
to act to address the inpatient care gap in this region.
    There is a tremendous opportunity to collaborate with the 
U.S. Department of Defense (DoD) for medical services on the 
campus of Eglin Air Force Base (AFB) that would benefit both 
veterans and active-duty servicemembers in this area.
    Last September, I introduced H.R. 3489, the ``Northwest 
Florida Veterans Health Care Improvement Act.'' This 
legislation would expand partnership between Eglin AFB and the 
VA Gulf Coast Veterans Health Care System to provide more 
accessible healthcare to eligible DoD and VA patients in 
Northwest Florida. In collaboration with DoD, this bill would 
provide inpatient services and expand outpatient specialty care 
through the construction of a joint VA/DoD medical facility on 
the Eglin AFB campus.
    At our November 2007 Subcommittee hearing, Major General 
David Eidsaune, Commander of the Air Armament Center at Eglin 
Air Force Base, testified about the successful partnership that 
the VA and DoD had developed in the region and stated that 
``This cooperative effort should serve as a model for future 
efforts to support the healthcare needs of our Nation's 
veterans.''
    Mr. Chairman, I am providing you with updated legislative 
language that reflects the intent of H.R. 3489, and I 
respectfully request that this language be included in the 
introduced version of the Department of Veterans Affairs 
Medical Facility Authorization and Lease Act of 2008 that will 
be considered by the full Committee.
    I appreciate the opportunity to enter my statement into the 
record, and am available for questions at any time for you, Mr. 
Chairman, and I yield back.
    [The prepared statement of Congressman Miller appears on
p. 27.]
    Mr. Michaud. Thank you very much, Mr. Miller, for your 
testimony. We definitely will consider that as we move forward 
dealing with important issues of construction and leases. I 
also would invite you to the good State of Maine. I know you 
are from the east coast, the southern part where it is nice and 
warm where we are getting a lot of snow up in Maine, and we 
have the dog sled races up in Northern Maine, so you are more 
than welcome to partake in dog sled races in Maine.
    Mr. Miller. As you well know, anytime you offer I am on my 
way up to your great State.
    Mr. Michaud. Thank you. I also notice in the audience the 
announcer from the Maine broadcasters who is down here. I know 
we are getting a big snowstorm in Maine so I don't know if she 
got delayed and can't get out to head back to Maine. So glad to 
see you here as well.
    On our first panel, we have Dennis Cullinan who is Director 
of the Veterans of Foreign Wars (VFW) of the United States who 
is here on behalf of The Independent Budget; Joe Wilson who is 
here from the American Legion; and Rick Weidman who is here for 
the Vietnam Veterans of America (VVA). We look forward to your 
testimony this morning, and without further ado, we will start 
off with Dennis.

     STATEMENTS OF DENNIS M. CULLINAN, DIRECTOR, NATIONAL 
  LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED 
STATES, ON BEHALF OF THE INDEPENDENT BUDGET; JOSEPH L. WILSON, 
     DEPUTY DIRECTOR, VETERANS AFFAIRS AND REHABILITATION 
COMMISSION, AMERICAN LEGION; AND RICHARD F. WEIDMAN, EXECUTIVE 
DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF 
                            AMERICA

                STATEMENT OF DENNIS M. CULLINAN

    Mr. Cullinan. Thank you, Chairman Michaud and Mr. Miller.
    On behalf of the men and women of the Veterans of Foreign 
Wars and the constituent members of The Independent Budget 
(IB), I thank you for inviting us to present our views at this 
most important legislative hearing. As you know, the VFW 
handles the construction portion of the IB and we will be 
representing the collective position of The Independent Budget 
VSOs (IBVSOs) regarding the draft bill under discussion today 
cited as the ``Department of Veterans Affairs Medical Facility 
Authorization and Lease Act of 2008.''
    With respect to construction, the IB's most fundamental 
objective is to produce a set of policy and budget 
recommendations that reflect what we believe will best meet the 
needs of America's veterans. In this regard, and as we have 
recently testified, the Administration's fiscal year 2009 
budget request for major and minor construction is woefully 
inadequate. Despite hundreds of pages of budgetary documents 
that show a need for millions of dollars of construction 
projects, the Administration has seen fit to have the major and 
minor construction accounts from the 2008 levels, failing to 
meet the future needs of our veterans.
    The legislative proposal under discussion today 
demonstrates that you and this Congress are fully prepared to 
advance VA's construction priorities so that future generations 
of veterans--such as those currently serving in the deserts of 
Iraq and the mounts of Afghanistan--will have a first-rate VA 
healthcare system ready to fully meet their needs. We thank 
you.
    It is our view that the VA construction infrastructure 
maintenance must be carried out in a methodically planned and 
orchestrated manner. One of the strengths of the VA's Capital 
Asset Realignment for Enhanced Services, CARES, process is that 
it was not just a one-time snapshot of needs. Within CARES, VA 
has developed a healthcare model to estimate current and future 
demand for healthcare services and to assess the ability of its 
infrastructure to meet this demand. VA uses this model 
throughout its capital planning process, basing all projected 
capital projects upon demand projections from the model.
    The model, which drives many of VA healthcare decisions 
that VA makes, produces a 20-year forecast of the demand for 
services. It is a complex model that adjusts for numerous 
factors including demographic shifts, changing needs for 
healthcare as the veterans' population ages, projections for 
healthcare innovation and many other factors.
    It is one concern of ours, however, that there have been 
times in the past and are currently going on, and will 
undoubtedly will occur in the future were things outside of the 
CARES process such as political exigencies and local problems 
that would interfere with carrying out the CARES' methodology.
    We realize this is a fact of life. It is something we would 
ask this Committee to keep an eye on.
    We applaud that the construction, renovation and 
maintenance projects covered in the draft bill are in keeping 
with this planning process. As you know, the IB recommendation 
for major construction is $1.275 billion, and minor 
construction is pegged at $621 million.
    Our last observation here is that we applaud section 5 of 
this bill for the authorization of additional appropriations 
for fiscal year 2009 medical facility projects covered by this 
act and impacting major and minor construction projects of 
$1.635 billion and $345.9 million, respectively.
    Mr. Chairman, thank you. That concludes my oral statement.
    [The prepared statement of Mr. Cullinan appears on p. 28.]
    Mr. Michaud. Thank you very much. Mr. Wilson?

                 STATEMENT OF JOSEPH L. WILSON

    Mr. Wilson. Mr. Chairman and Mr. Miller, thank you for this 
opportunity to present the American Legion's views on VA 
construction authorization within the Department of Veterans 
Affairs.
    The average age of VA healthcare facilities is 
approximately 49 years old. Proper funding must be provided to 
update and improve VA facilities. With the enactment of Public 
Law 110-161, the Consolidated Appropriations Act for Fiscal 
Year 2008, VA was provided the largest increase in veterans' 
funding in its 77-year existence. The American Legion applauds 
Congress for this much needed increase.
    However, there are questions, such as, whether or not 
construction funding adequately maintains VA's aging 
facilities, as well as its ongoing requirement for major and 
minor construction.
    The fiscal year 2009 budget request was $582 million for 
major construction, falling far behind the amount recommended 
by former Secretary Anthony Principi. From 2004 to 2007, only 
$2.83 billion for CARES projects had been appropriated, an 
overall shortage of funding.
    Mr. Chairman, veterans' healthcare is ongoing 24 hours 
daily, 7 days weekly, and 365 days annually. In addition, 
returning veterans of Operation Enduring Freedom/Operation 
Iraqi Freedom are returning home and seeking healthcare within 
the VA healthcare system.
    The fiscal year 2009 budget does not begin to accommodate 
the needs of the Veterans Health Administration, not to mention 
planned projects of previous fiscal years. To date, various 
planned VA Construction projects, to include San Juan, Puerto 
Rico; Los Angeles, California; Fayetteville, Arkansas; and St. 
Louis, Missouri, have yet to receive adequate funding. Delays 
in funding cause delays in healthcare.
    Mr. Chairman, when the Veterans Hospital Emergency Repair 
Act was passed in 2001, there was a construction backlog that 
continued to grow. During the CARES process, there was the de 
facto moratorium on construction, but the healthcare needs for 
this Nation's veterans didn't cease during this time, and yet 
still the construction backlog increased.
    VA's minor construction budget includes any project with an 
estimated cost equal to or less than $10 million. Maintaining 
the infrastructure of VA's facilities is no minor task. This is 
mainly due to the average age of the facilities. These 
structures constantly require renovations, upgrades and 
expansions.
    From 2006 to date, the American Legion's National Field 
Service Staff and System Worth Saving Task Force have visited a 
combined total of 113 VA medical centers (VAMCs), community-
based outpatient clinics, or CBOCs, and Vet Centers in all 21 
Veterans Integrated Service Networks or VISNs. During these 
visits, many facilities reported space and infrastructure as 
their main challenges.
    During the American Legion's 2006 site visits, our overall 
report ascertained that maintenance and replacement of VA's 
physical plant was an ongoing process and a major challenge to 
facility directors. It was reported that deferred maintenance 
and the need for entirely new facilities presented an enormous 
budgetary challenge.
    In 2007, the National Field Service Representatives focused 
on VA polytrauma centers and Vet Centers, but also maintained, 
in thought, their connection to the entire VA Medical Center 
System.
    During the American Legion's visit to the St. Louis VA 
Medical Center on May 16, 2007, it was reported that major work 
was required on outpatient wards. These wards were previously 
converted from inpatient wards but were never renovated. The 
outpatient clinics were in need of modernization. The overall 
report of this facility included an outdated facility and lack 
of space.
    Mr. Chairman, the issues mentioned are a microcosm of 
structural problems throughout the VA Medical Center System. 
Although not mentioned in this testimony, the American Legion 
maintains an account of its site visits in its annual 
publication of its ``System Worth Savings'' report.
    As time progresses, the demand for VA healthcare is 
increasing while failure to improve the infrastructure causes 
unsafe conditions for veterans, as well as VA staff. The 
American Legion continues to insist that sufficient funding 
must be provided to maintain, improve, and realign VA 
healthcare facilities.
    Mr. Chairman, Mr. Miller, the American Legion sincerely 
appreciates the opportunity submit testimony and looks forward 
to working with you and your colleagues to resolve this 
critical issue. Thank you.
    [The prepared statement of Mr. Wilson appears on p. 29.]
    Mr. Michaud. Thank you. Mr. Weidman?

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. Mr. Chairman, on behalf of VVA National 
President, John Rowan, thank you for the opportunity to appear 
here today. Mr. Miller, thank you as well, sir.
    VVA is generally in support of this legislation but 
believes that it is not nearly aggressive enough in fulfilling 
the promise of the CAREs model and the bottled-up need, if you 
will, for both renovation and new construction.
    The physical plant is indicative of whether or not we are 
meeting our obligation to our Nation's veterans. We all 
basically posit, because it just makes common sense, that it 
affects the quality of healthcare, but we don't know that for a 
fact, and would encourage you, Mr. Chairman and Mr. Miller, to 
do a bipartisan call for a study of physical plant with medical 
outcomes, physical plant with staffing ratios of doctor/patient 
ratio, RN/patient ratios, et cetera, at facilities, and more 
importantly, as I said, medical outcomes for people who use 
that facility by DRG. It is something that certainly the U.S. 
Government Accountability Office (GAO) could accomplish in a 
relatively short order in just a couple of months.
    Secondly, we favor all of and would suggest that you add 
somewhere between at least a half and probably $1 billion to 
more aggressively pursue the schedule that was laid out 
pursuant to the CARES process.
    I would be remiss if I did not note for the record that VVA 
never ``agreed'' to this CARES formula. When the people who 
developed this formula from Melbank turned to us and say, well, 
it is too complicated, you wouldn't understand, my response was 
``try me.'' I was one of only 13 George Komp Fellows at Colgate 
University, and they have never been forthcoming on that, but 
basically it is a civilian formula that does not take into 
account the wounds and maladies of war, does not take into 
account all the new veterans, does not take into account long-
term care, and last but by no means least, it was developed for 
middle-class folks who can afford Preferred Provider 
Organizations and Health Maintenance Organizations, and the 
presentations on that, they figure an average of one to three 
per person whereas at VA hospitals, we have five to seven 
presentations per individual who walks across the threshold.
    What that means is the burden rate, if you will, of usage 
is much higher. In other words, many more services have to be 
provided on average to each veteran who shows up versus each 
patient in the private sector, which obviously is going to 
affect your overall resources in terms of staffing, which is 
also going to affect your overall need for a physical plant 
that meets the needs of those staff wherein you can provide the 
highest quality medical care. So we would encourage you to get 
GAO to do that study.
    Secondly, I would like to talk about Puerto Rico for just a 
moment. Two billion dollars can be found for a new facility in 
Denver, Colorado, but they want to try and shore up a 1960s 
facility that is not hurricane proof even to the level of a 
Category 2 hurricane, and build a new bed tower, and the 
facilities in Puerto Rico are just simply inadequate.
    The veterans who returned home from their valiant service 
to Puerto Rico were no less brave and no less true to their 
country than those who returned to Colorado. I am just using 
that as an example. While the Colorado hospital is needed, it 
is time to stop doing short shrift on Puerto Rican veterans, 
and that is reflected in the parking facility, and there are a 
number of things that we recommended in a statement that we 
added to this bill this year, and would encourage you to work 
with the Hispanic Caucus toward that end.
    I am just about out of time so I want to thank you very 
much. I would be pleased to take any questions that you may 
have.
    [The prepared statement of Mr. Weidman appears on p. 31.]
    Mr. Michaud. Thank you very much. I know Mr. Miller has to 
leave for another Committee so I would recognize Mr. Miller.
    Mr. Miller. Thank you, Mr. Chairman, and unfortunately, I 
think we are all going to have to leave shortly for a vote.
    One of my questions is, and I think all of you in your 
testimony recognize and said that there is certainly, I think 
you, Mr. Weidman, used the term while the legislation before us 
is good, it is not aggressive enough. I certainly understand 
that comment.
    In the interim, if VA is not able to keep up at the rate 
that you propose, the $1.275 billion, I think, Mr. Cullinan, 
that you were talking about, what suggestions do you have in 
the interim to provide for the needs of the veterans in the 
local communities?
    We talk about co-sharing a lot and we talk about 
contracting out a lot. I will give to whoever wants to take it, 
and if any of the three of you want to comment, that is fine.
    Mr. Cullinan. Mr. Miller, I will speak to that briefly. I 
certainly don't have a perfect solution. The IBVSOs have been, 
and remain to be, supportive of leasing options. We are 
cautious, though, that leasing not supplant VA's own 
construction efforts. That is an area that could perhaps be 
pursued more vigorously.
    The issue of co-locations, that is something we are trying 
to get a handle on. Co-locations are good in that they make 
services readily available to veterans. On the other hand, it 
sometimes seems there is almost a pattern emerging between co-
locations and delays, and Fitzsimmons is an example. There is a 
co-location, and this is a construction project that has been 
playing out over too many years. We don't know that co-location 
itself is the problem, but there is a pattern here.
    Other than that, the construction has to be pursued, 
leasing, and it is absolutely necessary, they are going to have 
to provide services through the private sector, but that is 
expensive. Thank you.
    Mr. Wilson. Mr. Chairman, Mr. Miller, I think there should 
be an actual overall assessment. Each VA medical center is 
unique. The American Legion has visited many medical centers 
and provided site visit reports on these respective VA medical 
centers. We found that they are very unique in nature in 
respect to their respective VISN, as well as their communities. 
For example, out in California there is the Hispanic 
population, while in other parts of the Nation there are other 
distinctive cultures, which aren't exactly relegated to ethnic 
background but also a way of life. This alone makes each VA 
medical hospital unique. Just as there was provided a model for 
the construction of VA medical centers, there should be an 
overall assessment of every facility to ascertain whether or 
not more funding is required at such facilities.
    For example, the Sepulveda VA Medical Center is the only 
facility that has a Vet Center on its campus; currently there 
are no planned dollars for that particular structure. One could 
infer that the dollars were being borrowed from the VA medical 
center itself, or actually they lacked--they lacked funding, so 
that particular equipment went unrepaired.
    So I would say an overall actual assessment of each VA 
medical center would be more effective rather than providing a 
model for one site or VISN to cover the entire VA Medical 
Center System.
    Mr. Weidman. Essentially, Congress put a hiatus on new 
construction until there was a reasonable plan about where you 
were going to go because folks were angry that moneys had been 
invested and then suddenly wards were closing and facilities 
were closing, wasting precious taxpayer dollars, and 
understandably so, the Congress said we want a plan that makes 
sense.
    This plan is, while it doesn't go far enough because of the 
inadequacies of the formula itself, from my point of view, is 
in fact a reasonable plan that is laid before the Congress. We 
are not working the plan nearly fast enough, and that is the 
thrust of what I think we are saying to you is that with the 
plan VA has already laid out that was recommended by Secretary 
Principi, we can hike that up. There is nothing to preclude, in 
terms of organizational capacity to supervisor with the 
reorganization and separation of regular procurement of goods 
and services from construction procurement within the VA 
itself, they now have the organizational capacity to oversee 
many more both major as well as minor construction processes at 
the same time. So go to the CARES plan itself and hike it up a 
couple of years.
    In answer to your question about contracting out, you 
directed VA to make sense out of the contracting out 2 years 
ago, and so VA took that one foot, and took three country 
miles, three rural country miles with it, and came up with a 
proposal for the very misnomered ``Project Hero'' that was 
essentially a fire sale of VA services that would have further 
diminished VA organizational capacity to provide quality, full 
wellness service as well as sickness service to our veterans.
    With the VSOs united, and it is somewhat more reasonable 
now, but the problem, Mr. Miller, is that every time you give 
them a reasonable thing to go and do, and rationalize, like 
contracting out where it makes sense, people use that at VA as 
license as opposed to a mandate to do something reasonable.
    So if I may suggest, sir, be very cautious in terms of 
directing contracting out because what may be pushed by, 
whether Domestic Policy Council, or by VHA, is going to be very 
different, Mr. Miller, than what you and the Chairman have in 
mind, if I may suggest.
    Mr. Miller. I appreciate it, and please do not take my 
comments to mean that it is something that I expect this 
Committee to mandate to VA. My question was, and my time is out 
now, but my question was in the interim while these projects 
are being constructed what do we do?
    Mr. Weidman. VVA, where it makes sense, would have no 
objection to contracting out if in fact there is not the 
capacity to do it within the VA facility, Mr. Miller.
    Mr. Michaud. Yes, I had a couple questions on that line of 
thought. If I understand your testimony correctly, you all 
agree that the CARES process might not be perfect but at least 
it gives us a roadmap of where to go. It has been about 4 years 
now since CARES came out. A lot of things have changed since 
then with the Iraq and Afghanistan wars, and the economy.
    What would you say about this as far as the construction? I 
know you say we ought to do more as far as giving more money to 
move this process a lot quicker. Is there anything we can do in 
the construction process that would help shorten the timeframe 
of getting these projects moving forward and hopefully do it in 
a cost-effective manner?
    Mr. Cullinan. Chairman Michaud, again I don't have a 
perfect answer. I don't seem to have any of those today. There 
are certain things that should be looked at. For example, right 
now the $10 million limit differentiate between a major and a 
minor construction, perhaps that should be a little bit higher.
    I know, for example, DoD, not to pick on DoD, is very good 
at what is called layering, splitting a project, say a $100 
million project into 10 or 11 subparts. VA can pursue a similar 
course as well, but perhaps it would be better to elevate the 
$10 million limit. Then there is the issue of reprogramming 
authority.
    For example, a contract goes bust, it is clear that it 
can't be carried out, sometimes it is difficult to get the 
money moved from that, at least temporarily, to fund projects 
into something that is viable. That is something that should be 
looked at.
    There are a certain type of--I am trying to think of the 
term--single-source contracts where you hire the same company 
to basically do the design and research work, and do the 
contraction. The private sector uses that quite a bit. That is 
very effective. That is something VA could look at, and for now 
our recommendations on that.
    Mr. Michaud. Thank you. Does anyone else have anything to 
add?
    Mr. Wilson. It is important that VA mandate a definitive 
start and complete date of construction projects to ensure it 
is understood that outsourced contracts are temporary. It is 
evident some contracts have actually become permanent in 
nature. It must be assured patient care remains of VA culture; 
a culture that veterans are accustomed to. On the other hand, 
when services are contracted out in the communities for an 
extended period of time, it removes the veteran from the 
comfort of VA's environment; which may impede adequate care. So 
I would say VA should establish and communicate a mandate to 
ensure such contracted projects are set for a complete date. VA 
should also make it concrete that contracting outside of the VA 
medical center environment is temporary.
    Mr. Weidman. Mr. Chairman, as you know in my copious free 
time, of which there is none, I have the privilege of serving 
as chairman of the Veterans Entrepreneurship Task Force, and 
have looked at procurement right across the board, including 
very carefully at VA. VA and the U.S. Department of State are 
actually meeting the 3 percent, but there is much more that can 
be done, particularly in the area of construction.
    Bundling all too often happens, which freezes out all small 
business, and certainly service-disabled veteran-owned 
businesses (SDVOBs) that we know from all the studies that have 
been done by both Census and the Office of Advocacy at the U.S. 
Small Business Administration are less capitalized than their 
non-veteran counterparts.
    So the bundling freezes our folks out. There needs to be 
more set asides specifically for SDVOBs, service disabled 
veteran-owned businesses. VA now has authority under Public Law 
109-461, passed by this body unanimously, and the same in the 
Senate, to move forward and to do set asides, not just for 
service disabled, but for veteran-owned businesses.
    If they stop bundling, break many of those particularly 
minor construction projects into segments that are essentially 
bite size, they can be handled by small and medium-sized 
enterprise, then we can speed up the process, one, two. You 
grow the organizational capacity of those businesses to do yet 
more in the future, and particularly in our non-urban areas, 
this becomes really important, that there not be somebody--if 
you make it large enough, the contractor that is going to come 
in from the outside--Togus, Maine, as an example.
    But if you break it into bite-size chunks, then in fact you 
grow the small businesses and medium-size enterprises that are 
indigenous to that area of the country, and frankly, have a 
more profound impact on the economy.
    Let me just make a point about that. Everybody is talking 
about the economic stimulus package as if going out and selling 
consumer goods is the way to go with that. While we fought hard 
to get service disabled veterans included in that stimulus 
package, one could argue that a much more sensible approach 
would be rebuilding the infrastructure of the Nation, and there 
is no better place to start than hiking up the schedule of 
rebuilding the infrastructure of the system to care for those 
who have been injured in service to country, and I would 
encourage you to--we certainly, if this Committee wants to take 
that lead, I think all the VSOs will unite behind you and carry 
that message on both sides of the aisle up to the leadership of 
the House as well as carry it on the other side of the Hill, 
sir.
    Mr. Michaud. And my last question touches upon contracting 
out while trying to move the CARES process forward. The CARES 
process recommended a lot of access points, particularly in the 
rural areas. I don't envision the VA being able to build 
clinics in all of the rural areas, or it is going to take quite 
a lengthy amount of time for them to do that. Just very 
briefly, what is your feeling if there is, for instance, I will 
use Maine as an example, one of the access points, Holton.
    There is a hospital in Holton. It is in a rural area. They 
have plenty of capacity for space for the VA to use to take 
care of our veterans, and here is an opportunity where VA is 
not only unique to Maine, I am sure other rural areas across 
this country, where it can utilize what is already built there, 
and provide services a lot quicker because of the facilities 
there. What is your thought on something like that?
    Mr. Cullinan. Chairman Michaud, on behalf of the IB, again 
the IB is supportive of contracting out only where absolutely 
necessary. Speaking on behalf of the VFW, the VFW believes that 
there are a number of instances, and Holton is one, where 
contracting out is the only viable option.
    The only thing I would add to that in many areas in parts 
of the country it is not just a question of lack of physical 
infrastructure, it is a lack of healthcare providers, sometimes 
then you are going to have to resort to some sort of sharing, 
contracting out. There just aren't any other options, 
especially in these remote rural areas.
    Thank you, sir.
    Mr. Weidman. Contracting out may make the only sense. I 
used to, when I first came home, teaching in Vermont at one of 
the Vermont State colleges and lived in Lamoille County, which 
is a big green part, which means there is no town of 2,500 or 
more in the middle of north-central Vermont, and so I am aware 
of the problems of rural healthcare. I never went to the VA. It 
was three hours away, and therefore, used the civilian medical 
system.
    For us, it would make sense for us to contract it out if, 
in fact, there is no viable option. One of the things, however, 
that VA has not done well, even in many of the CBOC contracts 
out, is train people in the wounds and maladies of war. They 
haven't trained their own staff in many cases either, but the 
Veterans Health Initiative, and that is why in my written 
statement we encourage that you have a hearing on all of this, 
about making this a veterans' healthcare system, and how does 
that affect not only the physical plant but also the planning 
process in terms of staffing needs in the future as well as 
training needs.
    The Veterans Health Initiative in taking of a military 
history and training, at least making available those 
curricula, which are on the Internet I might add, to any 
contractor is extremely important that they understand what are 
the particular problems of veterans. If it is just general 
healthcare that happens to be for veterans, we are going to be 
doing a disservice to those rural veterans who have served 
well.
    An example would be mental health. Many of the CBOCs, yes, 
they have ostensible medical health services out there, but you 
start to dig into it and they are not qualified counselors who 
know PTSD from ABCD, and therefore, are not going to be 
particularly useful to those veterans who need it the most.
    Mr. Michaud. Thank you. Mr. Brown?
    Mr. Brown of South Carolina. Thank you, Mr. Chairman.
    I noted when I Chaired the Health Subcommittee, we went to 
Maine and looked at some of the rural healthcare delivery, and 
I know in South Carolina we have a lot of these community 
health centers, and it certainly looks like to me in some 
instances these are State run so that there could be some 
overlap there to be getting service, and we also looked at 
telemedicine too, which I think would certainly help fill that 
gap.
    My question is, I represent Charleston in Congress, and we 
have been looking at trying to combine some services between 
the VA and the medical university, and I guess in the last 3 
weeks, we were able to go to the Oncology Center, which has a 
specialty type of equipment, actually an imaging piece of 
equipment that takes a picture of a tumor and actually treats 
just the cancer cells, and that piece of equipment costs like 
$3.5 million. The VA actually bought the piece of equipment in 
the Oncology Center at the medical university, and their 
doctors actually administer the treatment.
    We have been trying to work at some collaborative basis 
with the VA and the medical university to extend that, but we 
have done an extensive study, and I know Mr. Wilson mentioned 
the Charleston plan, and this is kind of what we were hoping to 
develop some kind of a model of cross-sharing services. After 
all, we are the same taxpayer that funds both VA and the 
medical university too, and the needs of the veterans are 
becoming more specialized than ever in the history of this 
Nation.
    So it is difficult to have that specialized service at 
every VA center, so it makes sense to make some combination of 
services.
    We are stuck in some kind of a warp, I guess, in Charleston 
because we have good medical facilities at the VA, though it is 
about 50 years old, and it is sitting in a low area of the 
peninsula, and I know that--you mentioned, Mr. Weidman, that we 
just aren't proactive enough, and you mentioned the situation 
down in Puerto Rico. It is the same situation here.
    The medical university is building a brand new facility. We 
could make some combination, be it the operating rooms, be it 
some of the recordkeeping or whatever, and put another bed in 
that proximity since 95 percent of the doctors are actually 
coming from the medical university to treat the patients at the 
VA center.
    It would make sense, but we are caught up in some kind of a 
CARES process that says, you know, we want to be sure we get 
the maximum use of the facilities that we have, and I am 
certainly for that.
    But I went to New Orleans and we are now doing catch-up 
instead of being proactive. All those veterans now have to go 
some place else for service because of the time lapse of being 
able to make another facility there.
    We were hoping to do the same thing in Charleston, but 
apparently we are caught up in some kind of a formal or some 
kind of a process that is going to put us in the same posture 
as New Orleans, and also Puerto Rico, too, I guess, if in fact 
we have another Class 4 hurricane to come in our region.
    I would be interested in some comments from you all, and I 
apologize for taking most of my time asking that question, but 
I just want to make that presentation.
    Mr. Cullinan. Mr. Brown, I will speak on behalf of the VFW 
on this one. We believe that there are instances with respect 
to high-tech, highly expense equipment, that the best thing to 
do is to engage in a sharing arrangement. There is no doubt 
about it. Magnetic Resonance Imaging (MRI) and other imaging 
devices, you are just not going to have one in every locality, 
and the same thing goes for certain types of service, cardiac 
care, for example. If you are going to do open heart surgery, 
you want to go somewhere where it is done all the time.
    So from the perspective of providing the best possible care 
in the most cost-effective manner, and in the safest manner for 
veterans, that is the way to proceed.
    The only thing I would add to that is that with respect to 
CARES and the planning process, we do know that there are times 
when it seems to be the overarching CARES process that is 
causing the problem with respect to sharing, and sometimes it 
is a local situation. It is just below the surface.
    Without mentioning the location, I know of one individual 
whose dad had had a heart attack, and there was a VAMC located 
directly across from a medical center, and there was an 
expectance at the VAMC supposedly that the care be provided 
there, whereas the medical facility, it came to light, was 
saying, well, we should be doing this, it makes perfect sense. 
We do it all the time. Why not us?
    Well, indeed, yes, there is an example of something where 
VA should simply defer to this private facility, but then we 
found out that actually what was going on, or a sub-story in 
all of this, was the fact that there was concern within VA that 
were they to go this route suddenly the private-sector 
hospital, medical facility, would be the only game in town, and 
the costs would go up exponentially.
    So it is a complicated business. Again, I mean just to 
reiterate, there are clearly instances where sharing, 
contracting out are the best way to go for the good of the 
veteran, but there are these other little things percolating 
beneath the surface.
    Thank you, sir.
    Mr. Weidman. VVA would very much favor that kind of cost 
sharing on expensive equipment and on specialty tests where 
there is propinquity between the two facilities.
    I also might add that the co-location, when we have the 
opportunity, just makes sense. It depends on proactive 
leadership and it needs to start at the VISN level where there 
are opportunities developed to bring it to the attention of the 
under secretary. Something that VA has never done well is being 
proactive, and frankly, it seems to VVA that this Committee not 
only has the right, but the responsibility to press VA to start 
being proactive, and if they won't be, to give you the 
information or to survey members, and that Charleston situation 
is an example of something that we would absolutely support 100 
percent, and fight for, Mr. Brown.
    But there are other opportunities I am sure around the 
country beyond Puerto Rico, beyond Charleston, that VA should 
be pursuing. If you borrow the spots analogy, it is a West 
Coast offense. If they give you the long ball, you go for the 
long ball. If they will only give you the three-yard pass, take 
it. But we have to be looking on the outlook for that, and VA 
has not done a very good job of doing that.
    Mr. Michaud. Ms. Brown?
    Ms. Brown of Florida. Yes. I am going to be very quick, but 
let me just say that I can report that the VA is doing a very 
good job in New Orleans. I just was there about a week ago, and 
they have really done a good job in providing services to the 
veterans in the area.
    I guess my question will go to--well, I want to say I am a 
strong opponent of design/build, because we have just funded 
the largest VA budget in the history of the United States, and 
we have a lot of projects, but if it is going to take us 10 
years to build a project, it doesn't make any sense, so we need 
to have models that work, and if the money is there.
    For example, you mentioned, Mr. Wilson, about the stimulus 
package. Well, what makes sense is that for every $1 billion 
that we spend, it creates 715 jobs, and certainly part of that 
work should go to veterans that have been certified, prepared 
to do the work, but they are having problems. I just met with a 
group last week in how do they do business with VA when they--
they go through the General Services Administration (GSA), they 
are certified, but yet they feel like they are in the system 
and they can't get any work.
    Mr. Weidman. The VA has not done a great job of doing 
service-disabled veterans set asides. You gave them that 
authority with Public Law (P.L.) 109-461. I meet and am in 
contact with the chief of staff of VA, and with the chief 
operating officer, Deputy Secretary Mansfield, literally every 
other week about where the heck are the regulations. They have 
now finally got them out of the building, part of the 
regulations, and they are over at the Office of Management and 
Budget.
    However, the Black Letter Law itself, that provision of 
P.L. 109-461, VA can go ahead and start doing those set asides 
right now.
    Frankly, while it is open to doing this to service-disabled 
veteran-owned businesses, it is not friendly to doing business 
with----
    Ms. Brown of Florida. Right.
    Mr. Weidman (continuing). Service-disabled veterans. It is 
almost like Washington, DC, running around Capitol Hill. Is it 
accessible? Yes. Is it disabled friendly? It sure in heck 
isn't. All my friends in wheelchairs have a hell of a time 
here, and it is only their determination that gets them around. 
We need to make the VA process of procurement and particularly 
in construction friendly to service-disabled vets. It may be 
something that you want to recommend to the Appropriations 
Committee is to put language in the report for the fiscal year 
2009 appropriation that VA must set aside 10 percent of all 
construction funds for veteran-owned businesses, of which a 
minimum of 3 percent of every major project go to service-
disabled veteran-owned businesses. That only reiterates what is 
already in the law.
    Ms. Brown of Florida. I am not disagreeing with you, but 
all I am saying the groups that have already certified, they 
are ready to work. They can't get--they are given the run 
around. I guess we are saying the same thing.
    Mr. Weidman. We are saying the same thing, and I would be--
if I may talk to you off-line, Ms. Brown.
    Ms. Brown of Florida. Yes.
    Mr. Weidman. We have done a lot of work in pressing hard on 
where there are problems in VA. Some have been fixed and some 
have not. We brought it to the attention of the Secretary and 
Deputy Secretary Mansfield, to Mr. Frye and to the Chief of 
Staff, Thomas Bowman, repeatedly. We have a long way to go even 
at the VA, never mind the DoD which is still trying to figure 
out how to spell the word service disabled veteran-owned 
business.
    Ms. Brown of Florida. Thank you.
    Mr. Michaud. Thank you very much, Ms. Brown, and I want to 
thank the panel for your testimony this morning, and there 
might be some further questions from the Subcommittee. So once 
again, thank you very much for coming.
    We will take a recess. There is, I understand, only one 
vote, so it should not take long, and then we will reconvene 
the Subcommittee hearing. Thank you.
    [Recess.]
    Mr. Michaud. Let us get started. I want to thank the second 
panel for coming today as well, and we have Donald Orndoff, who 
is the Director of Office of Construction and Facilities 
Management with the Department of Veterans Affairs. So I want 
to thank you for coming, and if you could introduce those who 
are accompanying you as well.
    Mr. Orndoff. Yes, sir. Thank you, Mr. Chairman.
    To my left is Mr. Jim Sullivan. He is from the Office of 
Asset Enterprise Management. To my right is Mr. Robert Neary. 
He is the Director of Service Delivery for the Office of 
Construction and Facilities Management. To my far right is Mr. 
Joseph Williams, the Assistant Deputy Under Secretary for 
Health.
    Mr. Michaud. Thank you very much. If you would begin your 
testimony.

      STATEMENT OF DONALD H. ORNDOFF, DIRECTOR, OFFICE OF 
  CONSTRUCTION AND FACILITIES MANAGEMENT, U.S. DEPARTMENT OF 
    VETERANS AFFAIRS; ACCOMPANIED BY ROBERT L. NEARY, JR., 
 DIRECTOR, SERVICE DELIVERY OFFICE, OFFICE OF CONSTRUCTION AND 
  FACILITIES MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
JAMES M. SULLIVAN, DEPUTY DIRECTOR, OFFICE OF ASSET ENTERPRISE 
 MANAGEMENT, OFFICE OF MANAGEMENT, U.S. DEPARTMENT OF VETERANS 
  AFFAIRS; AND JOSEPH WILLIAMS, JR., RN, BSN, MPM, ASSISTANT 
     DEPUTY UNDER SECRETARY FOR HEALTH FOR OPERATIONS AND 
MANAGEMENT, VETERANS HEALTH ADMINISTRATION, U.S. DEPARTMENT OF 
                        VETERANS AFFAIRS

    Mr. Orndoff. Yes, sir. Mr. Chairman and Members of the 
Subcommittee, I am pleased to appear today to discuss the 
Department of Veterans Affairs draft authorization bill related 
to major construction and major lease projects. I will provide 
a brief oral statement and request that my full statement be 
included in the record.
    Mr. Michaud. Without objection.
    Mr. Orndoff. Let me begin by briefly reviewing the status 
of VA's major construction program.
    The average age of the 5,000 VA-owned medical facilities is 
over 50 years. Many of these older facilities were not designed 
or constructed to meet the demands of clinical care for the 
twenty-first century.
    VA is currently implementing the largest capital investment 
program since the immediate post-World War II period. This 
program results from the VA's strategic plan and the Capital 
Asset Realignment Enhanced Services, or CARES program initiated 
systemwide in 2002 and began implementation in May 2004.
    Including our fiscal year 2009 request, VA will have 
received appropriations totaling $5.5 billion for CARES 
projects. Currently, VA has 40 active major construction 
projects. Thirty-three projects are fully funded, for a total 
cost of approximately $2.8 billion. Seven projects have 
received partial funding, totaling $560 million against a total 
estimated cost of $2.3 billion.
    For fiscal year 2009, VA is requesting $471 million in new 
construction appropriations for medical facility projects. This 
request will provide additional funding to five of the 
partially funded projects, and begin design on three new start 
projects.
    For fiscal year 2009, VA is seeking authorization for six 
major medical facility construction projects and 12 major 
medical facility leases.
    I would like to address VA's proposed authorization bill 
recently submitted to the Speaker.
    Section 1, authorization of fiscal year 2009 major medical 
facility projects: section 1 of the proposed bill would 
authorize the Secretary to carry out four major medical 
construction projects in Lee County, Florida, Palo Alto, 
California, San Antonio, Texas, and San Juan, Puerto Rico.
    Section 2, additional authorization for facility for fiscal 
year 2009 major medical facility construction projects 
previously authorized: section 2 of the proposed bill 
authorizes the Secretary to carry out two major medical 
facility projects located in Denver, Colorado, and New Orleans, 
Louisiana. Both projects were previously authorized for lesser 
sums under Public Law 109-461, but additional authorization is 
required to complete the construction projects at these 
locations.
    Section 3, authorization of fiscal year 2009 major medical 
facility leases: section 3 of the proposed bill authorizes the 
Secretary to carry out 12 major medical facility leases in 
fiscal year 2009. These leases will provide an additional eight 
outpatient clinics, expand two current outpatient clinics, and 
develop a primary care annex facility and provide needed 
research space.
    Section 4, authorization of appropriations: This section 
requests authorization for the appropriation of $477,700,000 
for major construction projects in fiscal year 2009, and 
$1,394,200,000 for projects previously authorized for lesser 
sums. This section also provides $60,114,000 for medical 
facilities accounts to authorize 12 major medical facility 
leases in fiscal year 2009.
    In closing, I would like to thank the Subcommittee for its 
continued support of the Department's infrastructure needs. We 
look forward to working with the Subcommittee on these 
important issues. I urge you to support our proposed 
authorization bill so the Department can move forward on 
important projects to enable the highest level of care for 
veterans.
    Again, thank you for the opportunity to appear before the 
Subcommittee today. My colleagues and I stand ready to answer 
your questions.
    [The prepared statement of Mr. Orndoff appears on p. 33.]
    Mr. Michaud. Thank you very much. I really appreciate it. A 
few questions.
    The Department is requesting authorization for 12 leases 
and the Committee is aware that in October of last year, the 
General Services Administration recentralized leasing within 
the Federal Government at GSA. How will this action on the part 
of GSA affect VA's ability to acquire these leases?
    Mr. Orndoff. Sir, I would like Mr. Neary to answer if I 
may.
    Mr. Michaud. Yes.
    Mr. Neary. Thank you, Mr. Chairman.
    It is correct that late last year the General Services 
Administration recentralized much of the leasing that is done 
within the Federal Government. However, VA retains the 
authority to lease medical and medically related space in 
support of the Health Care System. And so for these 12 leases 
we will be managing the execution with VA.
    Mr. Michaud. Are these leases in VA affected by GSA's 
action and what is the impact on VA?
    Mr. Neary. There are many leases in VA that will be 
affected by GSA's actions, particularly within Veterans 
Benefits Administration, staff offices and others. Any non-
medical lease greater than 20,000 square feet will now be 
required that the acquisition be by GSA for the VA. It is a 
very new direction, and we will be watching it closely, working 
closely with GSA to ensure that they are able to provide these 
leases in a timely manner to meet our needs.
    As I say, this has happened fairly quickly, and it would be 
my perspective that GSA has taken on a significantly increased 
workload, and we want to make sure that they have the capacity 
to deliver these spaces in time to meet our needs.
    Mr. Michaud. Thank you.
    In the first panel, we heard Mr. Weidman talk about the 
Puerto Rico facility, that it is outdated, and a non-hurricane 
proof VA medical facility, and there is a report out. Has your 
office seen that report that Mr. Weidman was referring to, and 
if you have seen it, what specific steps has VA taken to 
correct the problem, and how long will it take to correct the 
conditions in Puerto Rico?
    Mr. Neary. Mr. Chairman, I am not sure if Mr. Weidman is 
referring to the congressionally mandated report that was 
required, I think, in the last session of Congress and that we 
responded to, but I am very familiar with Puerto Rico and the 
needs there, and we have a very active construction program 
ongoing.
    We are currently under construction with a six-story bed 
tower that will place all the hospital beds in seismically safe 
space. In the emergency supplemental funding that was provided 
last year, a component of that went to San Juan to construct 
one of three pieces of our plan for San Juan. This budget that 
is now before the Congress includes the funding for the second 
piece of that, and when those two are done, which involves 
construction of clinical and administrative space, we will then 
be in a position to demolish the existing bed tower there, and 
retrofit the lower floors, we call it the pancake, three or 
four floors at the base of the existing hospital will be 
retrofitted to provide not only modern but seismically safe 
space.
    So we have a plan which we believe effectively will meet 
the needs of veterans in Puerto Rico.
    Mr. Weidman mentioned parking. There is no question about 
it. There is a significant parking shortage there and we are 
looking for ways in our plan with some of the funding that we 
are getting and we will get down the road to address the 
parking needs as well.
    Mr. Michaud. How long do you think it will take you to deal 
with that?
    Mr. Neary. The bed building is under construction and it 
will be completed next year. We expect to award a contract for 
an administrative building at the end of this fiscal year in 
early next year. Also in 2009, we will award a construction 
contract for additional floors of clinical space. That will 
take about 24 months to construct. As I say, when those are 
done, the main building will be freed up to address.
    So while it goes through 2013, by next year all the beds 
will be in new construction, and within 2 to 3 years the bulk 
of the administrative and clinical space will be either in new 
construction or in our current outpatient facility, which is 
only a few years old.
    Mr. Michaud. The CARES process was decided back in May of 
2005. When you look at the number of facilities, has your 
office done anything to actually try to speed up not only 
money, but try to shorten the length of time it takes to build 
a new facility?
    Mr. Orndoff. Yes, sir. Basically the process that we have 
is a fairly rigorous racking and stacking prioritization, if 
you will, of the priorities, and of course working within the 
Department's competing priorities for resources. We are moving 
as aggressively as we can on working down that list.
    We have made a lot of progress. Once a project has in fact 
been budgeted and authorized and appropriated, we are moving as 
aggressively as we can to bring it to completion and online. We 
are using every innovative approach that we can to try to 
address that. Speed of delivery is a metric that we see 
foremost in our business, and understand that once the 
commitment has been made we need to get that project online as 
quickly as possible.
    We have always tried to work this from the what can we get 
online quickly and where are the greatest needs. There is a 
combination of factors, of course, that go into which projects 
we are working first through an established process of 
prioritization, but I assure you that we are working as 
aggressively as we can on that.
    Mr. Michaud. As you know, as time goes on it costs more to 
build a facility. Is there anything that we can do in Congress 
to help speed up the process, whether it is what Ms. Brown had 
mentioned this morning, as far as to speed up the construction 
process? What can we do to help in that manner?
    Mr. Orndoff. Well, sir, as I said, I think we have the 
tools and we certainly are looking for every innovation and 
creative approach that we can. We are partnering very closely 
with industry to look at where industry is, to try to attract 
maximum competition on our jobs so we get the best overall 
pricing. We are looking at using different contracting 
techniques such as bringing the general contractor in very 
early in the process, the design process, so we can avoid some 
of the problems that might arise where we have design issues 
that turn into constructability problems and delays, so we 
avoid those kinds of situations.
    This is a project process known as construction manager is 
the constructor, where the general contractor comes in early 
and performs construction management duties, and then follows 
on as the actual general contractor completing the work.
    Probably the most significant thing that we are doing to 
address your specific issue is we are trying to improve 
planning and move the design process forward so we can actually 
get design done concurrent or prior to the appropriation of the 
dollars. So as soon as the dollars are appropriated, we can go 
immediately into the construction phase.
    That would actually be a timeline that is even more 
aggressive than the design/build approach. The design/build 
approach would take the appropriated dollars and then turn it 
over to a firm for design and then ultimately construction. If 
we have the design completed ahead of appropriation, then we 
can go immediately into construction, which is the shortest 
possible timeline.
    Mr. Michaud. So could you explain the process that you are 
going through right now? You have the CARES process. Is that 
the process that you are following as far as the top priorities 
under the CARES process? We are going to go one, two, three. Or 
do you deviate from that because things might have changed 
since 2004? How do you deal with that specific process as far 
as which ones are priorities and which ones are not?
    Mr. Sullivan. If I could, Mr. Chairman. Each year the VA 
individually assesses its needs for capital projects through a 
call process out to the field, and they rank those projects 
each year in terms of the priorities of VA. There is an 
established criteria that is used and the projects are put 
through that criteria, and ranked and stacked, and then we take 
the budget request and draw the line down basically as far as 
we can down that list and fund those new priorities.
    The only exception to that is projects that were already 
prioritized and Congress has already appropriated funds. These 
projects are put on the side, and are funded first based on our 
ability to continue to spend money and put construction in 
place.
    Mr. Michaud. So the initial process as far as how you rank 
under the CARES process, you ask the different VISNs to bring 
their priorities forward.
    Mr. Sullivan. That is right.
    Mr. Michaud. Now, under that process, it is my 
understanding because I know I have been trying to find out 
where CBOCs were in the budget. So if you have a VISN who might 
not have the money to move it forward even though it could be a 
priority, then you will never see that at Central Office, is 
that correct?
    Mr. Sullivan. Not quite. The projects we are talking about 
here are major construction projects, those projects over $10 
million. The CBOC is different from the major construction 
process. It has a similar process that are for approval that is 
submitted with a business plan, and they are submitted in the 
budget each year, and Congress is notified of those CBOCs. So 
that is a separate process. This is just for the big, major 
construction.
    Mr. Orndoff. I might add that the project identification is 
not resource constrained.
    Mr. Sullivan. That is correct.
    Mr. Orndoff. It is a requirement identified and it is not 
until we get to the prioritization process that we would bring 
in the resource constraint.
    Mr. Sullivan. That is correct.
    Mr. Michaud. Okay. Since you don't deal with the CBOCs, but 
you deal with major projects, is there a problem that VISNs 
might have if they don't feel that they can handle that within 
their budget, that it might not get to your level or is that 
not a problem?
    Mr. Sullivan. You might add, Mr. Williams, to the comment.
    Mr. Williams. The process for CBOC review, assessment, 
identification would be such that it would raise any issues 
with regard to access to care, and that would help drive our 
need and prioritization of where and what size that CBOC would 
be.
    Typically we incorporate the plans for the CBOCs at least 2 
years in advance, and if we look back at the CARES, when that 
started, we have a queue of CBOCs that had been identified, and 
as we create the business plans for these CBOCs, then we bring 
those forward for further assessment or approval to be 
activated.
    Mr. Michaud. That is all depending on what is available for 
financial resources?
    Mr. Williams. Mr. Chairman, we continue to assess our 
priorities and we assess those priorities against the needs. We 
look at the funding that has been provided for us to meet those 
needs, as we move forward to bring our projects and CBOCs 
online.
    Mr. Michaud. When you look at the issue of access, I mean 
under the CARES process, we talk about access points, and what 
we are talking about is whether we are doing construction. How 
closely have you worked, I know it just got up and running, 
with the Office of Rural Health within the VA system, because 
now I will use the Holton example. That is supposed to be an 
access point. However, you really don't need to move forward 
with a separate building there because you can utilize existing 
resources with the hospital.
    Under the CARES process and when you are looking at trying 
to move forward on construction, whether it is major or minor, 
are you also looking at areas of the country where you might 
not want to build, but you might want to collaborate with a 
local healthcare facility, whether it is a hospital or a 
federally-qualified healthcare clinic to utilize them as an 
access point versus building a facility?
    Mr. Williams. Mr. Chairman, yes, we are, and part of that 
business plan or that prospective that is developed, we have to 
look at all viable options that are available to us, such as 
proximity to other services in the area, and DoD. We also 
review our ability to maximize the use of technology to reach 
some of these access points.
    Now, as you are aware, on February 20, the Secretary, Dr. 
James Peake, made an announcement relative to the creation of 
Rural Health National Advisory Committee, and that Committee in 
itself will be an asset in that it will go out and it will 
assess areas of need as it relates to rural health, and come 
back and advise the Secretary and the Under Secretary for 
Health with viable options.
    We look forward to the results of that Committee. 
Meanwhile, we rely on the medical centers, networks, 
headquarters, and support veteran service organizations to help 
us identify the opportunities that are there for us to meet or 
exceed our veterans' expectations.
    Mr. Michaud. I just want to get to this line of 
questioning. When you do that process, are you saying, well, we 
get X amount of money so here are the next 20 CBOCs or access 
points that might be available? Are you looking at it that way 
or are you looking at it, well, here is the--I am not sure how 
many access points were in the CARES process now or how many 
are left to go, or are you looking at it, here, we have 500 
access points nationwide. Within that 500 we know that we can't 
build access points in all of those, so rural health, tell me 
which ones we might be able to move forward next year to really 
collaborate with local health providers, whether it is a 
hospital or a federally-qualified healthcare clinic. Are you 
looking at it broadly or are you looking at it narrowly, this 
is the next line, so how can we do that versus here is a whole 
list, it might be near the bottom of the list, it might not be 
a real high priority, but you can get it up and running very 
quickly because you don't have to build, there is already a 
facility that you can work with other providers?
    Mr. Williams. Mr. Chairman, as I understand it, the rural 
health initiative will be one component of the process that we 
use to assess veteran needs across the country. Where we 
develop a CBOC is not driven by dollars. It is driven by 
identified needs for our veteran population.
    To that end, the business plan for a CBOC comes forward 
driven by the access, driven by the needs of our veterans, and 
based upon the facilities and the networks' determination of 
where their greatest need is to meet our veterans' healthcare 
needs.
    With regards to the funding piece of it, as you know, we 
continue to prioritize the needs that we are presented with, 
and within that prioritization we make decisions about what 
starts when, but make no mistake, every effort is given to make 
sure that the highest priorities are met and addressed, and in 
as timely a fashion as we can address them.
    Mr. Michaud. Thank you. My last question actually will be a 
parochial one in that the fiscal year 2009 budget lists Togus 
as a specialty care addition for a potential major construction 
project that was under the CARES process.
    My office has been told that it would cost in the range of 
$50 million. As you know, Maine remains an underserved area. 
How can we move this project from a potentiality to a reality? 
How can we do it in a timely fashion to get the services to the 
veterans who need them today?
    Mr. Sullivan. Mr. Chairman, on our list of major 
construction projects, we don't have a Togus. Is it minor 
construction or is it----
    Mr. Michaud. It is a future----
    Mr. Sullivan. Oh, a future one?
    Mr. Michaud. Yes.
    Mr. Sullivan. At this point in the process, we are 
conducting a 2010 process, and there has been a data call that 
goes out to the field, get the list similar to the 2009 list 
together. That is currently under review and facilities are in 
the process of submitting their data. And as we go through the 
2010 budget process, that was to come out.
    Mr. Michaud. Okay.
    Mr. Sullivan. I am not familiar with it. I can get you some 
information for the record on it.
    [The following was subsequently received:]

    ``2009 Togus, ME, Specialty Care Addition''
    This project addresses CARES projected workload and space gaps for 
the specialty care clinics, and permits expansion of ancillary and 
diagnostic services as well as administrative services to address space 
gaps and substandard space for these functions. The project proposes to 
construct a new specialty care clinic of 72,000 GSF and relocate 
selected specialty care functions to that space and out of Building 
200/200E for the ultimate purpose of backfilling the vacated space with 
ancillary/diagnostic services (28,000 GSF) and administrative services 
(12,000 GSF) in order to resolve the existing space gaps. Additional 
work required to assure the viability of this project will be to 
increase parking and expand site utilities to support the new space and 
correct existing vulnerabilities.

    Mr. Michaud. Yes. It is my understanding that it is for the 
potential major construction project, so I wanted to get it off 
that potentiality to make it a reality so I will know what the 
process is to do that.
    Mr. Sullivan. The process is those projects will be rated 
and ranked this summer, and they will be put up against the 
available resources in the budget, and as I said earlier, they 
will draw a line and see how far it goes. I don't have any 
knowledge of where Togus is on that list, and they are still in 
the developmental stage, but we can try and get you some 
information on the scope of the project.
    Mr. Michaud. Now, when you deal with a project such as 
that, when you look at VISN 1, which is located in Boston, 
which is problematic if you want to expand or do anything in a 
highly metropolitan area like that, where it is a lot cheaper 
to deal with it in rural areas, are you also looking at that 
aspect as well when you deal with not only VISN 1 but other 
VISNs where there might be a need for an expansion to try to 
find the most cost-effective way to expand?
    Mr. Sullivan. Right. If it is proposed as a major project, 
they look at a potential, other alternatives, do other than 
major construction such as leasing to see if it is viable. But 
the priority list is need-based. Where it is in the country per 
se isn't a factor, nor is the cost of construction a factor. It 
is based upon what is the veteran need, and we have seven bits 
of criteria, if you will, that they are judged against: how 
well does it improve the delivery of service to veterans; how 
much does it improve the asset, safeguarding the asset through 
security or safety concerns; does it have special emphasis 
programs for returning veterans, SCI, TBI, those types of 
programs in it; how well does it improve our asset portfolio 
goals. Those are the primary factors that the project is gauged 
against, if you will, and then it is prioritized based upon how 
well it does against those seven bits of criteria.
    Mr. Michaud. In that criteria, you actually heard 
Congressman Brown talk about this morning. If there are other 
entities other than the VA that are actually looking at 
building a new medical facility, and they could do it 
collaboratively, is that taken into consideration as well?
    Mr. Sullivan. Yes, especially if it is with another 
governmental element or DoD, those projects do get beneficial 
value, if you will, if they have that component in it.
    Mr. Michaud. Another governmental entity. What if it is a 
private nonprofit?
    Mr. Sullivan. I would have to check but I don't believe 
that is given extra value if it is a private entity.
    [The following was subsequently received:]

    Projects that involve a private entity do not receive extra value 
in the prioritization process.

    Mr. Michaud. Okay. Thank you. Actually, I was asking all 
these questions giving Mr. Brown time to get back here.
    I will ask one more while Mr. Brown settles in. Also the 
CARES process actually recommended that in VISN 1, that to try 
to maximize saving costs, that they actually recommended that 
they work with the State's veteran nursing home as well. When 
you look at construction or access points throughout the 
country, are you also looking at ways where you can 
collaborate, in this particular case, with the State veterans 
nursing home to help save on cost, but also when you look at 
veterans, you know, you have an opportunity to have a veterans 
complex versus building it someplace where there might not be a 
State veterans nursing home? Are you looking at those issues as 
well?
    Mr. Neary. Mr. Chairman, as you know, there are several 
instances where the VA has provided the property to a State for 
the construction of a State veterans nursing home. I believe 
there are some instances where VA and State veterans homes 
collaborate in terms of providing some services.
    So we obviously have close relationships with State homes, 
and would be glad to engage with any of them where there appear 
to be opportunities. There are obviously contracting rules that 
need to be considered, and you know, might get in the way or 
might not get in the way, but in each case you have to look at 
what kind of services you are talking about, and then move 
forward.
    But we would be glad to look at any particular instance 
where a State might have an interest.
    Mr. Michaud. Yes, this one actually--it has actually 
happened in Maine where I must say the new director at Togus is 
doing a fabulous job thinking outside the box and how he cannot 
only deliver services, but do it in a cost-effective manner, 
and actually the State veterans nursing homes, they do have a 
CBOC in Bangor, Maine. It is a renovated facility. It is old. 
It is outdated, and it is not really doing the job that it 
should. The State veterans nursing home is willing to actually 
build a brandnew building with their resources designed to what 
the VA needs, and it will really be cost-effective.
    So those are some things that I am interested in, how can 
you collaborate to save resources, but also make sure veterans 
have the services that they need? So I do want to say I really 
appreciate all the work that your folks out there in the field 
are doing to try to deliver services to our veterans but also 
to do it in a manner that is cost-effective.
    Mr. Brown.
    Mr. Brown of South Carolina. Well, thank you, Mr. Chairman, 
and I apologize for taking a little bit longer than you did to 
get back, but we get involved in some other things. But thank 
you all for being here today. You were all here, I guess, when 
we had the previous panel from the service organizations, and 
we are just looking for--as a partnership with all groups, but 
with certainly the VA too, to try to find as much proactive 
dialog as we possibly can in order to bring the highest level 
of service, medical service to our returning veterans as 
possible, and I know you were here and you have certainly been 
involved with the Charleston model, which I am very interested 
in.
    It seems like that we have had a little movement on it, but 
not much movement, and it seemed like to me we are missing a 
real opportunity by not incorporating our plans to improve our 
services there for the veterans along with the medical 
university.
    We already have a cooperative arrangement with the Heart 
Research Center, and so this is nothing new to Charleston, to 
work interactively with the VA and the medical university.
    So could you all give me kind of an update of where we are 
on that project and where you think the next step might be?
    Mr. Williams. Mr. Chairman, Mr. Brown, thank you for the 
opportunity.
    As you are aware, there was a joint collaboration group 
that was put together several months back that was to focus on 
identifying opportunities for sharing between the medical 
center and the medical university. The medical center and the 
university have moved forward, and I would agree, some small 
steps have been achieved. Recently collaborated approaches 
include new equipment, tomography equipment that has been 
installed. There was a ceremony in January, I believe, a ribbon 
cutting to support this collaboration.
    We have had ongoing discussions about MRIs and various 
levels of negotiation with regard to that piece of equipment, 
but we are committed to working with the school, to move 
forward to address those opportunities.
    We have within the past year, 18 months, have a new 
director in place who is engaged and works very well from what 
I understand with local medical school leadership, and we are 
fortunate to have a new network director, Mr. Larry Barrow, who 
understands and works hard to meet the commitment to our 
veterans.
    I know you know that area better than anyone, and 
understand that although it is an old facility, you know, we 
continue to work hard to keep that facility in a condition that 
is acceptable for our veteran population. One of our biggest 
constraints is administrative space, and the local leadership, 
network leadership have been in discussions and are preparing 
presentations to move forward to address some of the most 
immediate needs.
    I would say to you that we continue to observe and respect 
the concerns locally. We remain committed to our responsibility 
to work with the local leaders to help find solutions that are 
mutually beneficial, and are reasonable to support not only the 
needs of the medical center and our veterans but also to be 
cognizant of the needs of the community.
    Thank you.
    Mr. Brown of South Carolina. If I may follow up on that. I 
think this is the third Secretary that we have been involved 
with in trying to come up with this new idea, and we did an 
extensive study with both agencies to try to determine what 
would be the best areas to collaborate, and so some of those 
were the imaging equipment, and some of them were maybe the 
operating space and some other areas. Never were we ever 
proposing to have separate bed towers, I mean, a single bed 
tower. We are always having separate bed towers so the veterans 
would have their own identity and their own facilities there. 
Only we would look at collaborating with those units that there 
could be high cost equipment, testing equipment, operating 
rooms, imaging equipment, this sort of thing.
    But we recognize that in order to make it a feasible 
operation we would have to have a closer proximity between the 
patient and the facilities. And so we are pretty close now as 
far as with a new facility that the medical university built, 
but to better use the land and the proposed plan for the 
overall medical university facility, the VA hospital where it 
sits is not in the same planned best use of the land facilities 
that both the university and the VA own.
    I know that the hospital, they have done a great job in 
maintaining that hospital, and you walk in and it looks like, 
you know, state-of-the-art, but you recognize that the state-
of-the-art is not only on the inside, it is actually inside the 
walls, and some of that infrastructure is not there to support 
the high-tech which we need now to service our veterans in the 
best accommodating way.
    So we just feel like it is an opportunity lost if we don't 
incorporate the VA facilities with the medical university in 
their construction phase.
    I already see as we look at the CARES package, and Mr. 
Chairman, you might have noticed that some of the cost has 
doubled even before we start making the first foundation, and 
that is what is going to happen in this operation here. That is 
the reason I mentioned earlier with the other panel about 
becoming proactive, you know, not reactive, and I know we are 
all living with what happened down in New Orleans, and what is 
going to happen in Puerto Rico too apparently, but sometimes we 
are penny-wise, a dollar foolish, and so I would hope that we 
could work closer.
    I know Secretary Peake has certainly been apprised of this 
process, and so anyway, we certainly are grateful for your 
cooperation. I just think it is a window of opportunity. If we 
don't seize upon it, it is going to be something that will 
never happen. So I would hope, Mr. Chairman, that we could find 
some facilities in order to make that work.
    Mr. Williams. Thank you, sir.
    Mr. Michaud. Thank you very much, Mr. Brown. I am sure that 
they definitely will be a lot more proactive if we give them 
the resources so they can be proactive, so that is one of the 
things that I think is very important, and as I stated earlier, 
if you look at an economic stimulus package, construction is 
definitely the way to go. If you want projects to put people to 
work, the quickest, fastest way to do it is through 
construction, but it is also investing in an infrastructure 
which desperately needs it.
    So hopefully we will be able to give you an opportunity to 
be more proactive in the future with the resources that we will 
be giving you.
    So in closing, I do want to thank each of you, Mr. 
Williams, Mr. Neary, Mr. Sullivan, and Mr. Orndoff for your 
time this morning. We look forward to working with you, and if 
there is ever anything that we can do to make your life easier 
as far as moving these projects forward, if needs change, 
please don't hesitate to let us know. It is a collaborative 
effort. The only way that we are going to be able to help our 
veterans is if we work together with the VA and the VSOs to try 
to take care of some of the glitches that might be slowing down 
the process. We want to make it as smooth as possible for you 
so we can take care of our veterans. So once again, I want to 
thank each and every one of you for coming here this morning.
    So if there are no further questions, we will close the 
hearing. Thank you.
    [Whereupon, at 11:42 a.m., the Subcommittee was adjourned.]
















                            A P P E N D I X

                              ----------                              

             Prepared Statement of Hon. Michael H. Michaud
                    Chairman, Subcommittee on Health
    I would like to thank everyone for coming today.
    Today's hearing is an opportunity for the VA, Veteran Service 
Organizations and Members of this Subcommittee to discuss draft 
legislation dealing with Fiscal Year 2009 VA construction.
    Thirty-eight United States Code requires statutory authorization 
for all VA major medical facility construction projects over $10 
million and all major medical facility leases more than $600,000 per 
year. This hearing is a first step in this important process.
    I would like to note that this draft legislation is based on the 
Department of Veterans Affairs' Fiscal Year 2009 budget request and 
reauthorizations from Fiscal Year 2008. I consider this draft to be a 
starting point. I look forward to hearing from the VA, the VSOs and 
Members of the Subcommittee about other construction projects that are 
important to them.
    I will take under consideration the discussion we have today and 
any input that may come up. I will then introduce legislation in the 
very near future.

                                 
                 Prepared Statement of Hon. Jeff Miller
           Ranking Republican Member, Subcommittee on Health
    Thank you, Mr. Chairman.
    I appreciate your holding this hearing to discuss a draft bill that 
would authorize the Department of Veterans Affairs (VA) to carry out 
major medical facility projects and leases for fiscal year 2009.
    Important to delivering high quality care to our Nation's veterans 
is the planning for the construction and renovation of VA's substantial 
health care infrastructure. VA maintains an inventory of approximately 
1230 health facilities. This includes 153 Medical Centers, 135 Nursing 
Homes, 731 Community Based Outpatient Clinics, and 209 Vet Centers.
    VA initiated the Capital Asset Realignment for Enhanced Services 
(CARES) process to identify and address gaps in services or 
infrastructure eight years ago. The CARES process continues to serve as 
the foundation for VA's capital planning priorities.
    VA's construction planning, however, is not without challenges. The 
rising cost of construction has been significant. In fact, the draft 
legislation we are discussing today would provide over $670 million to 
account for cost increases for previously authorized construction 
projects.
    Mr. Chairman, I am extremely concerned that VA's inability to 
accurately project cost estimates is adversely affecting the 
construction process. Escalating project costs continue to require this 
Committee to reexamine and increase authorizations for existing 
projects, hindering the ability to move forward with new projects 
important to improving access to care and supporting future health care 
demand.
    CARES identified Okaloosa County in my district in Northwest 
Florida as underserved for inpatient care. In fact, it is the only 
market area in the VISN, VISN 16, without a medical center. However, VA 
has yet to act to address the inpatient care gap in this region.
    There is a tremendous opportunity to collaborate with the 
Department of Defense (DoD) for medical services on the campus of Eglin 
Air Force Base that would benefit both veterans and active duty service 
members in this area.
    Last September, I introduced H.R. 3489, the Northwest Florida 
Veterans Health Care Improvement Act. This legislation would expand the 
partnership between Eglin Air Force Base (AFB) and the VA Gulf Coast 
Veterans Health Care System (VA GCVHS) to provide more accessible 
health care to eligible DoD and VA patients in the Northwest Florida 
region. In collaboration with DoD, this bill would provide inpatient 
services and expand outpatient specialty care through the construction 
of a joint VA/DoD outpatient medical facility on the Eglin AFB campus.
    At our November 2007 Subcommittee hearing, Major General David 
Eidsaune, Commander, Air Armament Center, Eglin Air Force Base, 
testified about the successful partnership VA and DoD have developed in 
the region and stated that ``This cooperative effort should serve as a 
model for future efforts to support the health care needs of our 
nation's veterans.''
    Mr. Chairman, I am providing you with updated legislative language 
that reflects the intent of H.R. 3489. I respectfully request that this 
language be included in the introduced version of the ``Department of 
Veterans Affairs Medical Facility Authorization and Lease Act of 2008'' 
that will be considered by the Full Committee.
    I would be pleased to answer any questions. I yield back.
    Thank you, Mr. Chairman.

                                 
               Prepared Statement of Dennis M. Cullinan,
                Director, National Legislative Service,
             Veterans of Foreign Wars of the United States
                  on Behalf of The Independent Budget
    MR. CHAIRMAN AND MEMBERS OF THIS SUBCOMMITTEE:
    On behalf of the men and women of the Veterans of Foreign Wars of 
the U.S. and the constituent members of the Independent Budget, I thank 
you for inviting us to present our views at this most important 
legislative hearing. The VFW handles the construction portion of the IB 
and we will be representing the collective position of the IBVSOs 
regarding the draft bill under discussion today cited as the 
``Department of Veterans Affairs Medical Facility Authorization and 
Lease Act of 2008.''
    With respect to construction, the IB's most fundamental objective 
is to produce a set of policy and budget recommendations that reflect 
what we believe will best meet the needs of America's veterans. In this 
regard, and as we have recently testified, the Administration's Fiscal 
Year 2009 budget request for Major and Minor construction is woefully 
inadequate. Despite hundreds of pages of budgetary documents that show 
a need for millions of dollars in construction projects, the 
Administration saw fit to halve the major and minor construction 
accounts from the FY 2008 levels, failing to meet the future needs of 
our veterans.
    The legislative proposal under discussion today demonstrates that 
this Congress is ready, able and willing to correct this situation, and 
to advance VA's construction priorities so that future generations of 
veterans--such as those currently serving in the deserts of Iraq and 
the mountains of Afghanistan--will have a first-rate VA health care 
system ready to fully meet their needs.
    It is also our view that VA construction and infrastructure 
maintenance must be carried out in a methodically planed and 
orchestrated manner. One of the strengths of VA's Capital Asset 
Realignment for Enhanced Services (CARES) process is that it was not 
just a one-time snapshot of needs. Within CARES, VA has developed a 
health care model to estimate current and future demand for health care 
services and to assess the ability of its infrastructure to meet this 
demand. VA uses this model throughout its capital planning process, 
basing all projected capital projects upon demand projections from the 
model.
    This model, which drives many of the health-care decisions VA 
makes, produces 20-year forecasts of the demand for services. It is a 
complex model that adjusts for numerous factors including demographic 
shifts, changing needs for health care as the veterans' population 
ages, projections for health care innovation and many other factors.
    We applaud that the construction, renovation and maintenance 
projects covered in this draft-bill are in keeping with this planning 
process, and will now briefly address its specific sections.
    Section 2 of this bill provides for up to $54 million for seismic 
corrections at the Denver VAMC; up to $66 million for construction of a 
Polytrauma Center at the VAMC in San Antonio, and up to $225.9 million 
for seismic corrections at the VAMC in San Juan. The IB supports these 
provisions.
    Section 3 provides for the modification of funding amounts for 
major construction projects previously authorized. Construction for the 
VAMC in New Orleans is authorized at $625 million from $300 million and 
the construction project at Denver moves from $98 million to $769.2 
million. The cost of the correction of patient privacy deficiencies at 
the Gainesville VAMC is updated to $136.7 million from $85.2 million. 
The construction of the new VAMC in Las Vegas is authorized at $600.4 
million from $400.6 million. We note that this reflects the rapid 
escalation of construction costs over time and illustrates the IB view 
that construction and renovation projects be authorized, funded and 
then carried out in a timelier manner. The construction of a new VA 
outpatient clinic in Lee County, Florida is authorized at $131.8 
million in place of $65.1 million. Construction of a new VAMC is set at 
$656.8 million from $377.7 million. Last under this section, 
consolidation of campuses in Pittsburgh rises from $189.205 million to 
$295.6 million.
    Section 4 authorizes major medical facility leases in FY 2009, 
Provided for: $4.326 million for an outpatient clinic in Brandon, 
Florida; $3.995 million for a clinic in Colorado Springs; $5.826 
million, Eugene, Oregon; $5.891 million for the expansion of a clinic 
in Green Bay; $3.731 million for a clinic in Greensville, SC; $2.212 
million for a clinic in Mansfield, Ohio; $6.276 million, Mayaguez, 
Puerto Rico; $5.106 million, Mesa, Arizona; $8.636 million for interim 
research space in Palo Alto; $3.168 million for a clinic expansion in 
Savannah; $2.295 million for an outpatient clinic in Sun City, Arizona; 
and, last under this section, $8.652 million for a primary care annex, 
Tampa, Florida.
    Section 5 provides for the authorization of appropriations for FY 
2009 Medical Facility Projects covered under this act. Provided for: 
$345.9 million for projects authorized in section 2 and $1.635 billion 
for the increased amounts for projects modified by section 3. Under 
this section, $60.114 million is authorized for the leases provided for 
in section 4.
    Section 6 imposes a 60-day congressional reporting requirement on 
the Secretary regarding compliance with section 312A of Title 38 USC 
and is supported by the IB VSOs. Section 7 delineates a technical 
correction in which we concur.
    Mr. Chairman, this concludes my testimony and I will be pleased to 
respond to any questions you or the members of this Subcommittee may 
have. Thank you.

                                 
 Prepared Statement of Statement of Joseph L. Wilson, Deputy Director,
    Veterans Affairs and Rehabilitation Commission, American Legion
    Mr. Chairman and Members of the Subcommittee:
    Thank you for this opportunity to present The American Legion's 
views on ``VA Construction Authorization'' within the Department of 
Veterans Affairs (VA).
    Proper assessment and improvements to the infrastructure of the VA 
healthcare system is vital in ensuring America's veterans are well 
served. The average age of VA health care facilities is approximately 
49 years old. Proper funding must be provided to update and improve VA 
facilities.
    With the enactment of Public Law 110-161, the Consolidated 
Appropriations Act for FY 2008, VA was provided the largest increase in 
veterans' funding in its 77-year existence. The American Legion 
applauds Congress for this much needed increase.
    However, there are questions, such as, whether or not current 
construction funding adequately maintains VA's aging facilities, as 
well as its ongoing requirement for major and minor construction.
Major Construction
    When former VA Secretary Anthony Principi testified before the 
House Veterans' Affairs Subcommittee on Health in 2004, he stated that 
the Capital Asset Realignment for Enhanced Services (CARES) reflected a 
need for additional investments of approximately a billion dollars per 
year over five years to modernize VA's medical infrastructure, as well 
as enhance veterans' access to care. CARES became the premier plan for 
the correction and upgrade of VA's infrastructure.
    The FY 2009 budget request was $582 million for Major Construction, 
falling far below the amount recommended by former Secretary Principi. 
From 2004 to 2007, only $2.83 billion for CARES projects had been 
appropriated, an overall shortage of funding.
    Mr. Chairman, veterans' health care is ongoing, 24 hours daily, 7 
days weekly, and 365 days annually. In addition, returning veterans of 
Operation Enduring Freedom/Operation Iraqi Freedom (OEF/OIF) are 
returning home and seeking health care within the VA health care 
system.
    The FY 2009 budget does not begin to accommodate the needs of the 
VHA, not to mention planned projects of previous fiscal years. To date, 
four of the 10 previously planned projects, to include San Juan, Puerto 
Rico; Los Angeles, California; Fayetteville, Arkansas; and St. Louis, 
Missouri, have received no funding. Delays in funding cause delays in 
health care.
    According to VA, the top three FY 2008 projects, Tampa, Florida; 
Bay Pines, Florida; and Seattle, Washington, would cost approximately 
$334 million, but none received a funding request. In addition, the 10 
partially funded projects have a balance of $1.59 billion. The 
aforementioned alone adds up to almost $2 billion.
    Mr. Chairman, when the Veterans Hospital Emergency Repair Act was 
passed in 2001, there was a construction backlog that continued to 
grow. During the CARES process, there was the de facto moratorium on 
construction, but the health care needs for this nation's veterans 
didn't cease during this time, and yet still, the construction backlog 
increased.
Minor Construction
    VA's Minor Construction budget includes any project with an 
estimated cost equal to or less than $10 million. Maintaining the 
infrastructure of VA's facilities is no minor task. This is mainly due 
to the average age of the facilities. These structures constantly 
require renovations, upgrades, and expansions. The health care delivery 
facilities of VA are increasingly aging and in need of substantial 
renovation and improvements related to fire, seismic safety and privacy 
standards that can be achieved with an adequate Minor Construction 
budget.
A System Worth Saving Site Visits
    From 2006 to date, The American Legion's National Field Service 
Staff and System Worth Saving Task Force have visited a combined total 
of 113 VA Medical Centers, Community Based Outpatient Clinics, and Vet 
Centers in all 21 Veterans Integrated Service Networks (VISNs). During 
these site visits, many facilities reported space and infrastructure as 
their main challenges.
    The American Legion receives daily calls from veterans who are 
concerned for their safety due to the closure of 24-hour emergency 
rooms in the rural areas such as Alabama and Louisiana. Within these 
rural areas, it was reported that the nearest VA facility was 
approximately one hour away.
    During The American Legion's 2006 site visits, our overall report 
ascertained that maintenance and replacement of VA's physical plant was 
an ongoing process and a major challenge to facility Directors. It was 
also reported that deferred maintenance and the need for entirely new 
facilities presented an enormous budgetary challenge. The repairs in 
most of the facilities visited were largely successful, however, some 
parts of the infrastructures still posed significant risk of further 
deterioration. For example, it was reported that the underground main 
at the Albany VAMC could fail at any time and, theoretically, deprive 
large parts of the facility of heating.
    During The American Legion's April 27, 2006 site visit to the 
Wilmington VA Medical Center in Delaware, building issues included a 
shortage of usable space to allow for expansion of needed programs to 
accommodate the influx of new veterans. The facility lacked 
construction funding for this project. With regard to funding adequacy 
for ongoing construction projects at Wilmington, there were no 
approvals for the Wilmington facility for major or minor construction 
for FY 2006.
    The American Legion visited the Togus VA Medical Center in Augusta, 
Maine on January 9, 2006 to conduct a full site visit. It was reported 
the considerable maintenance required for the older buildings had been 
neglected, with management citing $61 million in deferred maintenance. 
Other areas urgently requiring work included remediation of structural 
deficiencies, masonry restoration, roof repairs, and reconstruction/
repairs to roads and parking lots.
    In 2007, the National Field Service Representatives focused on VA 
Polytrauma Centers and Vet Centers, but also maintained, in thought, 
their connection to the entire VA Medical Center system. During The 
American Legion's visit to the St. Louis VAMC on May 16, 2007, it was 
reported that major work was required on outpatient wards. These wards 
were previously converted from inpatient wards but were never 
renovated. The outpatient clinics were in need of modernization. The 
overall report of this facility included an outdated facility and lack 
of space.
    During The American Legion's site visit to the VA Puget Sound 
Health Care System in Seattle, Washington on May 7, 2007, it was 
reported that there was a problem with various funding, which involved 
the operation of each building and their function. Puget Sound reported 
when it comes to funding construction projects, it is like ``robbing 
Peter to pay Paul.''
    The Sepulveda Vet Center visit was one of the most unique site 
visits, being that it is the sole Vet Center to remain on VAMC grounds. 
The building that houses the Sepulveda Vet Center programs lacks 
heating due to an inoperable furnace. The Vet Center reported that 
there was no budget for that expense. Although our visit didn't extend 
to the respective VA Medical Center, it gave rise to questions of their 
needs.
    Mr. Chairman, the issues mentioned are a microcosm of structural 
problems throughout the VA Medical Center system. Although not 
mentioned in this testimony, The American Legion maintains an account 
of its site visits in the annual publication of its `System Worth 
Saving' report.
Conclusion
    As time progresses, the demand for VA health care is increasing 
while failure to improve the infrastructure causes unsafe conditions 
for veterans, as well as VA staff. The American Legion continues to 
insist that sufficient funding must be provided to maintain, improve 
and realign VA health care facilities.
    Mr. Chairman and members of the Subcommittee, The American Legion 
sincerely appreciates the opportunity to submit testimony and looks 
forward to working with you and your colleagues to resolve this 
critical issue. Thank you.

                                 
         Prepared Statement of Statement of Richard F. Weidman
         Executive Director for Policy and Government Affairs,
                      Vietnam Veterans of America
    Good morning Chairman Michaud, Ranking Member Miller, and 
distinguished members of this Subcommittee. Thank you for giving 
Vietnam Veterans of America (VVA) the opportunity to offer our comments 
the VA FY'09 Construction Authorizations.
    In the last few years, the VA has spent millions of dollars on a 
plan to restructure the VA health care system's capital assets. After 
extensive study--although some of us believed it was flawed due to the 
absence of mental health and long-term care in its models--the report 
called for about $6 billion to be invested in the system. VVA believes 
this indicates the magnitude of the problem of a crumbling 
infrastructure that was, for the most part, built in the forties and 
fifties.
    The promises of VA's Construction Acquisition and Restoration for 
Enhanced Services, or CARES, program has seemed far from fulfillment in 
the past three or four years as the coffers of medical facilities 
continued to be robbed to pay for medical services operations. It must 
be disheartening for hardworking and dedicated employees of the VA to 
compare the state of many of their facilities to those in the 
community.
    Some VA hospitals are barely maintaining accreditation because they 
cannot meet privacy and access standards because of overcrowding. The 
VA has delayed vital capital equipment purchases and non-recurring 
maintenance projects in order to fund gaps in veterans' health care. 
Yet the Administration has proposed a decrease in construction funds. 
This is not only not a prudent or conservative response to the clear 
infrastructure needs of the VA health care system, it would appear to 
be wildly irresponsible and far from anything that could be considered 
prudent business practice, much less good medicine. This practice must 
cease.
    Dilapidated and over-crowded facilities are symbolic of the lack of 
consistent and concerted commitment toward meeting the obligation the 
federal government has to those who have served or would serve their 
nation, even after five years of a seemingly endless war. We can do 
better; we must do better.
    I would be remiss if I did not note for the record that VVA never 
``agreed'' to the civilian formula being used in the CARES process 
because it does not take into account the diseases, wounds, and 
maladies that are due to military service, depending on the branch of 
service, when and where one serves, and what one actually did and was 
exposed to (including vaccines).
    VVA respectfully requests that this distinguished panel hold a 
future hearing on the dual subject of ``caring for war wounded and 
ill'' that would include the CARES formula, the need for VA clinicians 
to take a complete military history to assist in the diagnosis and 
treatment of veterans, and the general lack of attention to the VA's 
Veterans Health Initiative (VHI) 24 curricula in the wounds and 
maladies of war. VVA reiterates that VA must truly become a ``veterans 
health care system'' instead of a general health care system that 
happens to be for veterans (which is generally what we have now, with a 
few add-on programs). Because this shift will affect plans for physical 
plants to adequately meet the needs of veterans in the future, it would 
be a much needed and quite useful hearing that would be directly 
related to the matter at hand of this hearing.
    Congress should restore and enhance the medical facilities budget 
by at least $.5 billion for medical facilities in fiscal year 2009. It 
should increase VHA's portions of major and minor construction by at 
least $1 billion.
    The VA FY'09 request for construction funding for health care 
programs is $750.0 million--$476.6 million for major construction and 
$273.4 million for minor construction.
    The VA budget request for major construction would provide 
additional funding and VVA fully supports authorization for the 
following five medical facility projects:

      Denver, Colorado ($20.0 million)--replacement medical 
center near the University of Colorado Fitzsimons campus;
      Lee County, Florida ($111.4 million)--new building for an 
ambulatory surgery/outpatient diagnostic support center;
      Orlando, Florida ($120.0 million)--new medical center 
consisting of a hospital, medical clinic, nursing home, domiciliary, 
and full support services;
      San Juan, Puerto Rico ($64.4 million)--seismic 
corrections to the main hospital building; and
      St. Louis, Missouri ($5.0 million)--medical facility 
improvements and cemetery expansion.

    VVA fully supports the FY'09 VA budget for major construction 
funding in that would allow construction of the three new medical 
facility projects listed:

      Bay Pines, Florida ($17.4 million)--inpatient and 
outpatient facility improvements;
      Tampa, Florida ($21.1 million)--polytrauma expansion and 
bed tower upgrades; and
      Palo Alto, California ($38.3 million)--centers for 
ambulatory care and polytrauma rehabilitation center.

    In regard to Puerto Rico, however, we ask that this distinguished 
panel begin to champion the cause of correcting the shoddy 
infrastructure of VA facilities in Puerto Rico. VVA National President 
John Rowan led a fact-finding delegation to Puerto Rico in December 
2006. What that delegation found was a shoddy, outdated, and non-
hurricane proof VA medical center building, totally inadequate parking 
facilities for both staff and patients, and a cemetery that was 
literally ``racking and stacking'' remains of veterans (this last 
hardly qualifies as highest respect for these heroes, or the stated 
goal of making the national cemeteries ``national shrines'').
    The degraded physical plants were indicative of the degraded 
services provided to these veterans, who disproportionately served in 
the combat arms. The delay in adjudicating claims was much longer than 
the already too long national average. Perhaps indicative was the 
locked door to the ``veteran's service center'' that had a ``Closed 
until further notice'' sign. There were scant services for PTSD (and 
seemingly only desultory interest in improving care for PTSD). Both 
veterans and staff were driving to the VAMC at 3 and 4 in the morning 
and sleeping in their cars in order to get one of the very limited 
parking spaces. And there was clear evidence that an additional Vet 
Center was vitally needed (especially in light of the scant services at 
the VAMC).
    A report on the above was provided to the Secretary of Veterans 
Affairs, and VVA followed up with repeated conversations with top VA 
officials. VVA also discovered that our findings mirrored the findings 
of the Center for Minority Veterans and other VA entities. A copy of 
this report was also provided to the delegate from Puerto Rico and to 
the Hispanic caucus, with a copy to this Committee.
    It is worth noting that VVA sent a one-year later follow-up 
delegation in December 2007 led by VVA National Secretary Barry Hagge 
and including VVA Regional Board of Directors Member Carol Strumkopf. 
They found that there were some plans in the works, but that the basic 
situation was little changed.
    In fairness to the VA, there are plans to add a new Vet Center in 
Puerto Rico, to add a new bed tower, and to make some structural 
changes to strengthen the old VAMC building to make it a bit sturdier 
in the face of a major hurricane.
    VVA recommends that there be an entirely new hospital designed from 
the outset to withstand a category 3 or 4 hurricane. Why is it that $2 
billion can be found to build an entirely new hospital in Denver but 
not in Puerto Rico? Were those who fought and returned home to Puerto 
Rico any less valiant or true to the United States than those who 
returned home to Colorado? VVA thinks not. Funds should be provided in 
FY'09 to put this vital move on the fast track.
    Further, VVA has urged the Administration to acquire land for a 
large new national cemetery now, with a view especially to the 
divestment by the Department of Defense of numerous parcels of land in 
Puerto Rico.
    VVA also strongly urges that the Congress provide funds that shall 
be used specifically to acquire land and build a new and large parking 
garage with a 6 AM to 6 PM every 15 minute shuttle service to the VAMC.
    VVA believes that degraded physical plants lead to degraded medical 
services to the veterans who use the VA medical system. Therefore, we 
recommend that this committee secure a General Accountability Office 
(GAO) study of medical services, doctor/patient ratios, RN/patient 
ratios by facility to discover if there is a correlation between poor 
physical facilities and the recruitment/retention of staff and the 
actual shape of medical services provided. Medical outcomes by DRG 
should also be studied to find out if new facilities improve the 
medical outcomes for veterans affected.
    VVA fully supports the Department of Veterans Affairs Construction 
Authorization as written.
    I thank you for affording VVA the opportunity to present our views, 
and thank you for what you are doing to assist veterans and their 
families. I will be pleased to answer any questions you may have.

                                 
                Prepared Statement of Donald H. Orndoff,
      Director, Office of Construction and Facilities Management,
                  U.S. Department of Veterans Affairs
    Mr. Chairman and members of the Committee, I am pleased to appear 
today to discuss the Department of Veterans Affairs (VA) draft bill to 
request authorization for six major medical construction projects and 
twelve major medical facility leases, as well as addressing other 
issues related to VA's construction program. Joining me today are Joe 
Williams, Assistant Deputy Under Secretary for Health, Robert Neary, 
Executive-in-Charge, Office of Construction and Facilities Management, 
and Jim Sullivan, Deputy Director, Office of Asset Enterprise 
Management. Let me briefly begin by reviewing the status of VA's major 
construction program.
    The Department is currently implementing the largest capital 
investment program since the immediate post-World War II period. This 
program represents implementation of the results from VA's strategic 
plan and the Capital Asset Realignment for Enhanced Services program 
(CARES), initiated systemwide in 2002 and yielding results in May 2004. 
Including this year's request, VA will have received a total of $5.5B 
for CARES projects. Currently, VA has 40 active Major Construction 
projects. Thirty-three of the 40 projects have been funded for a total 
cost of approximately $2.8 billion. The remaining seven projects have 
received partial funding totaling $560 million, and have a total 
estimated cost of $2.3 billion. VA is requesting $471 million in Major 
Construction appropriations for FY09 for infrastructure improvements 
and enhancements to its medical facilities. This request will provide 
additional funding to five of the partially funded projects, and begin 
the construction process on three new starts. We are seeking 
authorization for six major medical facility construction projects and 
twelve major medical facility leases for FY09.
    VA has a real property inventory of over 5,000 owned buildings, 
1,100 leases, 32,000 acres of land and approximately 158 million gross 
square feet (owned and leased). VA has reduced in excess of 1.6 million 
square feet in the last two years. During the CARES process, the 
average age of VA facilities was calculated at well over 50 years old. 
Many of these older facilities are not designed or constructed to meet 
the demands of clinical care in the 21st century. VA's management of 
these assets is critical to providing healthcare and services to our 
veterans.
    VA effectively manages its vast holding of capital assets through 
performance monitoring and analysis, decreasing underutilized and 
vacant space, improving facility conditions, decreasing operating 
costs, and reducing non-mission dependent assets. VA also develops 
energy savings performance contracts designed to reduce energy 
consumption in federally owned facilities, reducing the demand and 
dependence on natural resources.
    VA utilizes a multi-characteristic decision methodology to foster a 
decisionmaking approach in prioritizing its capital investment needs 
and requirements. Through this methodology, VA establishes its Five 
Year Capital Plan. The plan describes the selection of VA's capital 
acquisitions and funding requests by incorporating a formal executive 
review process. The process begins with Veterans Health Administration 
(VHA) strategic planning initiatives that identify capital needs based 
upon demographic data, workload, actuarial projections, cost 
effectiveness, risk, and alternatives. Once a potential project is 
identified, it is reviewed and scored based on criteria VA considers 
essential to providing high quality services in an efficient manner. 
The new funding requirements are considered, along with existing 
program requirements and workload projection decisions, when 
determining the projects and funding levels requested as part of the VA 
budget submission.
    Selected projects based on VHA's strategic process are then 
examined through the Department's Capital Investment Panel (CIP) to 
ensure all projects are based upon sound principles, promote the ``One-
VA'' vision, align with VA strategic goals, address the VA Secretary's 
priorities, and support the President's Management Agenda. The CIP then 
scores and analyzes the projects on these principles and submits the 
results to the Strategic Management Council (SMC) for consideration. 
The SMC is VA's governing body responsible for overseeing VA's capital 
programs and initiatives. The SMC reviews the projects and submits its 
recommendations to the Secretary, who makes the final decision on which 
projects to include in the budget.
    Major capital investment needs are requested from facilities in the 
fall, prioritized through each Administration and the Departmental 
review process, and evaluated for the Secretary's approval by the 
following summer. Under the current process, once a decision has been 
made to include a project in the Department's budget, the design 
process begins with the selection of the design architect. The design 
process consists of three phases--schematic design, design development 
and construction document preparation. While the timing can vary with 
the size and difficulty of the project, design on average takes 18 
months. Once design is complete, the construction contractor is 
obtained and construction begins shortly thereafter. Almost one-third 
of VA projects are executed using the design build method in which a 
contract is awarded to an architect/engineer (A/E) and construction 
contractor team who take a preliminary design provided by VA and 
completes the design and then constructs the project accordingly. 
Although VA does not have a preference for D/B generally, we do find it 
preferable for some small projects, such as parking lots, clinics, and 
office spaces.
    Mr. Chairman and members of the Committee, my further comments 
regard VA's proposed bill submitted to the Speaker and will relate to 
the four sections separately, rather than the bill as a whole.
    Section 1. Authorization of Fiscal Year 2009 Major Medical Facility 
Projects
    Section 1 of the proposed bill would authorize the Secretary to 
carry out four major medical construction projects in Lee County, 
Florida; Palo Alto, California; San Antonio, Texas; and San Juan, 
Puerto Rico.
    Section 2. Additional Authorization for Fiscal Year 2009 Major 
Medical Facility Construction Projects Previously Authorized
    Section 2 of the proposed bill authorizes the Secretary to carry 
out two major medical facility projects located in Denver, Colorado and 
New Orleans, Louisiana, respectively. Both projects were previously 
authorized for lesser sums under Public Law 109-461, but additional 
authorization is required to complete the construction projects at 
these locations.
    Section 3. Authorization of Fiscal Year 2009 Major Medical Facility 
Leases
    Section 3 of the proposed bill authorizes the Secretary to carry 
out twelve major medical facility leases in fiscal year 2009. These 
leases will provide an additional eight outpatient clinics, expand two 
current outpatient clinics, develop a primary care annex facility, and 
provide needed research space.
    Section 4. Authorization of Appropriations
    This section requests authorization for the appropriation of 
$477,700,000 for major construction projects in fiscal year 2009 and 
$1,394,200,000 for the projects previously authorized for lesser sums. 
This section also provides $60,114,000 from the Medical Facilities 
account to authorize twelve major medical facility leases in fiscal 
year 2009.
    In closing, I would like to thank the Committee for its continued 
support for improving the Department's physical infrastructure to meet 
the changing needs of America's veterans, and we look forward to 
continuing to work with the Committee on these important issues. I urge 
you to support our proposed authorization bill so the Department can 
provide the highest level of care for veterans in these high priority 
areas.
    Again, thank you for the opportunity to appear before the Committee 
today. My colleagues and I would be glad to answer your questions.

                                 
                   Statement of Hon. John T. Salazar,
        a Representative in Congress from the State of Colorado
    Good morning Chairman Michaud, Ranking Member Miller and 
distinguished members of this subcommittee.
    Thank you for giving the Committee an opportunity to discuss 
construction authorization for 2009.
    The replacement and modernization of the VA Medical Center in 
Denver, located on the former Fitzsimons Army Base, is critically 
important to the Veterans of Colorado.
    The VA completed a study and secured land for the facility in 2006.
    As you know, the VA, wherever possible, builds new medical 
facilities next to existing medical schools.
    This is done to save on costs and facilitate the exchange of 
resources between the institutions.
    This center is located adjacent to the University of Colorado 
Health Science Center (UCHSC).
    At its completion, the Fitzsimons campus will be a healthcare hub 
for all of Colorado.
    Construction is completed on the Children's Hospital, the 
University Hospital and St. Joseph's Hospital.
    For every month that passes, the cost of completing these projects 
skyrockets.
    Mr. Chairman, I thank you and the members of this committee for 
giving us the opportunity to discuss construction authorizations.

                                 
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