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





                  U.S. DEPARTMENT OF VETERANS AFFAIRS
                  SHORT- AND LONG-TERM STRATEGIES FOR
                 IMPLEMENTING NEW GI BILL REQUIREMENTS

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

                                HEARING

                               before the

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

                                 of the

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

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                           NOVEMBER 18, 2008

                               __________

                           Serial No. 110-108

                               __________

       Printed for the use of the Committee on Veterans' Affairs






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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
SHELLEY BERKLEY, Nevada              MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado            BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana                GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California           VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio               STEVE SCALISE, Louisiana
TIMOTHY J. WALZ, Minnesota
DONALD J. CAZAYOUX, Jr., Louisiana

                   Malcom A. Shorter, Staff Director

                                 ______

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

          STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman

JOE DONNELLY, Indiana                JOHN BOOZMAN, Arkansas, Ranking
JERRY McNERNEY, California           JERRY MORAN, Kansas
JOHN J. HALL, New York               STEVE SCALISE, Louisiana

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 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.







                            C O N T E N T S

                               __________

                           November 11, 2008

                                                                   Page
U.S. Department of Veterans Affairs Short- and Long-Term 
  Strategies for Implementing New GI Bill Requirements...........     1

                           OPENING STATEMENTS

Chairwoman Stephanie Herseth Sandlin.............................     1
    Prepared statement of Chairwoman Herseth Sandlin.............    22
Hon. John Boozman, Ranking Republican Member.....................     2
    Prepared statement of Congressman Boozman....................    22

                               WITNESSES

U.S. Department of Veterans Affairs, Keith M. Wilson, Director, 
  Office of Education Service, Veterans Benefits Administration..     3
    Prepared statement of Mr. Wilson.............................    23

                   MATERIAL SUBMITTED FOR THE RECORD

Post-Hearing Questions and Responses for the Record:
    Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
      Economic Opportunity, Committee on Veterans' Affairs, to 
      Hon. James B. Peake, Secretary, U.S. Department of Veterans 
      Affairs, letter dated November 18, 2008, and VA responses..    34

 
                  U.S. DEPARTMENT OF VETERANS AFFAIRS
                  SHORT- AND LONG-TERM STRATEGIES FOR
                 IMPLEMENTING NEW GI BILL REQUIREMENTS

                              ----------                              


                      THURSDAY, NOVEMBER 11, 2008

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

    The Subcommittee met, pursuant to notice, at 10:37 a.m., in 
Room 334, Cannon House Office Building, Hon. Stephanie Herseth 
Sandlin [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Herseth Sandlin, Boozman, and 
Scalise.

        OPENING STATEMENT OF CHAIRWOMAN HERSETH SANDLIN

    Ms. Herseth Sandlin. Good morning, ladies and gentlemen. 
The Committee on Veterans' Affairs, Subcommittee on Economic 
Opportunity, oversight hearing on the U.S. Department of 
Veterans Affairs (VA) short- and long-term strategies for 
implementing the new GI Bill requirements will come to order.
    I ask unanimous consent that all Members have five 
legislative days to revise and extend their remarks and that 
written statements be made part of the record. Hearing no 
objection, so ordered.
    I would like to welcome everyone back to Washington. Many 
of you before us today are well aware of this Subcommittee's 
active participation in providing oversight on the 
implementation of Public Law 110-252, which provides new 
education benefits for our Nation's veterans who served after 
September 11, 2001. In previous hearings conducted by this 
Subcommittee, we received testimony from the VA informing us of 
its intent to contract out the new information technology (IT) 
requirements under Public Law 110-252. Later, on October 23, 
2008, Committee staff were informed of the VA's new short-term 
plan to no longer use a private contractor for the immediate 
implementation of a new IT system but, rather, use VA resources 
to create a temporary solution to meet the August 2009 
requirements. We are also aware that the VA is developing a 
long-term plan for revamping its current IT system.
    I look forward to receiving the VA's testimony that 
highlights its new short-term and long-term plans. Today's 
testimony regarding such plans will not only serve this 
Congressional Subcommittee and our ongoing oversight 
responsibilities, but it is also my hope that it will serve the 
individuals overseeing the transition within the Executive 
Branch.
    The passage of Public Law 110-252 is a significant 
milestone for our Nation's veterans, but a lot of work must be 
completed before the benefits can be received.
    While the 110th Congress comes to a close, I would like to 
assure our Nation's veterans that we will continue to monitor 
the progress of the VA's short- and long-term plans in the 
111th Congress to ensure that their earned benefits are 
delivered in a timely manner.
    I look forward to working with Chairman Bob Filner, Ranking 
Member Boozman and Members of this Subcommittee to continue to 
provide effective oversight on the implementation of the new 
Montgomery GI Bill's requirements.
    [The prepared statement Chairwoman Herseth Sandlin appears 
on p. 22.]
    Ms. Herseth Sandlin. I now recognize Mr. Boozman for any 
opening remarks he may have.

             OPENING STATEMENT OF HON. JOHN BOOZMAN

    Mr. Boozman. Thank you, Madam Chair, and good morning to 
everyone. When we met a few weeks ago to begin our oversight of 
how VA intends to implement the new GI Bill, there was 
considerable discussion about whether VA should develop the new 
information technology system in-house or hire a contractor for 
development, and possibly some clerical support. I stated then 
that I didn't believe that should be our focus and I still 
don't.
    Now that the VA has made their decision to use Space and 
Naval Warfare Systems (SPAWAR) Command for both the long- and 
short-term fix, we need to not second-guess this decision, but 
help VA as they implement the program.
    However, I have some concern about how VA is organized to 
manage both the short- and long-term solutions based on the 
briefings given to the staff and what we will see today. More 
specifically, the charters for the Executive Committee, the 
Steering Committee and the working groups possibly need some 
more definition. And I am still unclear about the 
responsibility of the senior managers.
    Second, while VA has put together a plan to implement the 
short-term solution, there seems to be very little definition 
at this point of the long-term effort by VA and SPAWAR.
    Third, what are the key functions of the Benefits Delivery 
Network (BDN) system and what are its limitations.
    Finally, the question remains regarding VA's plan for its 
education work force. They have stated before that no one will 
lose their VA job and that they intend to hire additional 
temporary staff as part of the short-term solution. And I hope 
we can hear a few more details about that today. And I really 
do appreciate your all's hard work and it seems like we are 
moving forward. So I congratulate you on that. Thank you, Madam 
Chair.
    [The prepared statement of Congressman Boozman appears on 
p. 22.]
    Ms. Herseth Sandlin. Thank you, Mr. Boozman.
    I would like to welcome our panelists testifying before the 
Subcommittee today. Joining us on our first and only panel 
today is Mr. Keith Wilson, Director of the Office of Education 
Service, Veterans Benefits Administration (VBA), Department of 
Veterans Affairs. He is accompanied by Mr. Stephen Warren, 
Principal Deputy Assistant Secretary for Information 
Technology, Office of Information and Technology (OI&T); Mr. 
Jan Frye, Deputy Assistant Secretary for Acquisitions and 
Materiel Management; and Captain Mark Krause, Commanding 
Officer of Space and Naval Warfare Systems Center, New Orleans.
    Thank you, gentlemen, for being here. We look forward to 
hearing from you and posing some questions to get additional 
information that will be helpful to us.

  STATEMENT OF KEITH M. WILSON, DIRECTOR, OFFICE OF EDUCATION 
 SERVICE, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF 
 VETERANS AFFAIRS; ACCOMPANIED BY STEPHEN W. WARREN, PRINCIPAL 
     DEPUTY ASSISTANT SECRETARY, OFFICE OF INFORMATION AND 
TECHNOLOGY, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND JAN FRYE, 
     DEPUTY ASSISTANT SECRETARY, ACQUISITIONS AND MATERIEL 
 MANAGEMENT, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND CAPTAIN 
MARK KRAUSE, USNR, CHIEF STAFF OFFICER, SPACE AND NAVAL WARFARE 
     SYSTEMS CENTER ATLANTIC, DEPARTMENT OF THE NAVY, U.S. 
                     DEPARTMENT OF DEFENSE

    Ms. Herseth Sandlin. Mr. Wilson, you are recognized.
    Mr. Wilson. Thank you, Madam Chair. Good morning. Good 
morning, Madam Chairman and Ranking Member Boozman and Members 
of the Subcommittee. I appreciate the opportunity to appear 
before you to discuss VA's strategy for implementation of the 
Post-9/11 GI Bill. My testimony will address the short- and 
long-term strategies in developing information technology 
components for implementation of the Post-9/11 GI Bill bill as 
requested by the Subcommittee.
    Our short-term strategy to implement the Post-9/11 GI Bill 
consists of a two-part IT solution: a fiscal payment system 
that uses VA's existing Benefits Delivery Network to issue 
payments, and a front-end tool for use by Education Service 
claims examiners to augment the manual process for claims 
adjudication.
    The Chapter 33 front-end tool will be used to augment the 
manual process by providing additional automated support that 
is accessible by processors at each of our regional processing 
offices as well as central office. The front-end tool will be 
used primarily by claims examiners in preparing and processing 
award actions.
    The implementation of the short-term solution will require 
approximately 400 additional processors at our regional 
processing offices. This number may be subject to change 
depending on the level of automation that is achieved prior to 
August 1, 2009. This automation is critical to VA's short-term 
success.
    The combined IT and staffing approach is a short-term 
solution we expect to retire no later than November of 2010, 
when the long-term automated system being developed by our 
partners at SPAWAR is deployed.
    Our long-term strategy to implement the post-9/11 GI Bill 
will rely on support from SPAWAR to develop an end-to-end 
solution that utilizes rules-based industry standard 
technologies. The Chapter 33 program contains eligibility rules 
for benefit determinations that work well with rules-based 
technology while requiring minimal human intervention.
    VA is working with SPAWAR on the long-term IT solution and 
expects the development of this program to take approximately 
18 to 24 months to complete. The priorities established for IT 
enhancements for the short-term front-end piece does have a 
relationship with the priority that SPAWAR will follow when 
developing the long-term solution, such that some of the long-
term IT functionality could be used to augment our short-term 
solution. If SPAWAR can develop long-term functionality that 
can be used in the short term and can be deployed prior to 
August of 2009, they will do so.
    In both the short term and the long term, SPAWAR also is 
providing IT program management support and technical 
assistance in managing the necessary data flows. VA received 
$120 million in supplemental funding to implement this new 
benefit, $100 million in general operating expenses (GOE) and 
$20 million in IT appropriations account. To date, VA has 
transferred $13.25 million from its supplemental IT funds to 
SPAWAR for the purpose of project management for both the long-
term and short-term solutions and for IT support for data 
integration to support the long-term solution. The remaining 
$6.75 million from the supplemental IT funding will be moved to 
data integration and testing associated with the data 
integration initiative.
    VA has requested a reprogramming of $35 million of the 
available $100 million in GOE to the IT appropriations account. 
That will be used to pay for development and implementation of 
this long-term solution. The remaining $65 million in GOE funds 
is sufficient to cover the additional full-time equivalent 
(FTE) that will be required.
    To meet the program's August 1, 2009, effective date, VA 
has assigned project oversight duties, established milestones 
and instituted frequent oversight review. VA Education Service 
established a Program Executive Office (PEO) that is 
responsible for monitoring and coordinating all Post-9/11 GI 
Bill implementation activities.
    In addition to the PEO, VA contracted with the MITRE Corp. 
to provide technical and program management advice to Education 
Service leadership in support of Chapter 33 implementation, 
integration and oversight. The first critical milestone was met 
on November 14, 2008, when the completion of business 
requirements for the short-term payment solution occurred. The 
next critical milestone for the short-term solution is in 
completion of the IT functional requirements on November 26th.
    With the completion of these functional specifications, 
detailed design of the solution will start, with an expected 
completion date of March 31st of 2009.
    Madam Chair, this concludes my statement. I would be 
pleased to answer any questions you or any Members of the 
Subcommittee may have.
    I would like to follow my oral statements with a PowerPoint 
presentation subject to any questions you have at this point. I 
prepared a series of slides that in some ways is redundant to 
the written testimony that was submitted to the Committee, but 
I think it is clear in terms of conceptualizing a lot of what 
we are doing, and visually I think it draws a very good picture 
of the progress that we have made. If I could go to the first 
slide.
    Slide number two is titled Program Governance and 
Organizational Context. This is a visual representation of the 
overall government strategy that we have put in place to ensure 
proper oversight, management of key milestones, risk 
management, et cetera.
    Turning, in terms of a little bit more specificity, turning 
to slide three, there is a sub-element of slide two, 
specifically laying out the relationship of three bodies that 
join Executive Board, the Chapter 33 Steering Committee and the 
Chapter 33 Working Group. The next few slides provide detailed 
information concerning the roles and responsibilities of each 
of these groups.
    Turning to slide four, the Joint Executive Board is jointly 
chaired by the Under Secretary for Benefits, Admiral Dunne, as 
well as Bob Howard, the Assistant Secretary for Information and 
Technology. There are several members, key senior executive 
members that are also members of this board and there are also 
a series of advisors that are brought in to provide expertise 
and advice on specific subjects that are brought before the 
Joint Executive Board.
    Turning to slide three. Slide three outlines the membership 
and the responsibilities of the Chapter 33 Steering Committee. 
The Chapter 33 Steering Committee has responsibility for 
oversight of planning and execution of the work and all the 
different project streams that we are required to implement for 
Chapter 33, and I will talk about the project streams in just a 
second. The Steering Committee is jointly chaired by myself and 
Paul Tibbits, who is Chief Information Officer for OI&T 
Enterprise Development.
    There are members throughout the organization on the 
Steering Committee as well. Most specifically, I would like to 
point out two committee members by name, the first being Ms. 
Alison Rosen, who is in charge of my Program Executive Office, 
the other being Ms. Susan Perez who is the Director of the OI&T 
Portfolio Management.
    Those two individuals--turning to the next slide, slide 6--
are the co-leads on the working group. Co-leads basic 
responsibility is--Ms. Perez is the IT expert, Ms. Rosen is the 
individual responsible for non-IT issues. They meet, obviously, 
on an almost daily basis. Their overall responsibility is 
execution of the responsibilities by each of the project leads 
for the work streams that we are moving forward on.
    Slide seven talks very briefly about authority and change 
management. We did receive specific questions on that and I 
wanted to at least cover that from a high-level perspective at 
this point. Our focus on decision authority is focused on 
elements that would require any change in our timeline. In 
essence, the project leads have the authority to move forward 
unless there is something that changes their project timeline. 
That doesn't mean they don't keep everybody informed. There is 
a very rigorous information-gathering process that is conducted 
through our Program Executive Office. But they move forward and 
have the responsibility to move forward, assuming that there 
are no changes in any of their project schedules.
    The Program Executive Office does have the authority to 
change project timelines up to 5 percent. Myself, and by 
extension, the Steering Committee, have the authority to change 
any project timeline of less than 25 percent. Obviously a 
change of that nature would not be made without involvement by 
the Joint Executive Board as well. But the final authority--the 
governance structure of the authority lies with myself. The 
Joint Executive Board's involvement is required for any changes 
in our schedule of 25 percent or more.
    That is the process that we have established to ensure that 
we do not have any slippage in our schedule. That is critically 
important because there are significant dependencies between 
each of the project schedules, as I will talk about shortly.
    Slide eight is a representation of the Program Executive 
Office that we have established within VBA, within Education 
Service. As I have indicated, Ms. Alison Rosen is the head of 
my Program Executive Office and the individuals responsible for 
tracking this are laid out on this chart. The Program Executive 
Office is in essence our nerve center. That is where we monitor 
what is going on within the different projects. They are 
responsible for tracking progress, identifying risks that exist 
in the projects, making sure that we have identified 
dependencies, one project to another or more than two projects, 
and they are responsible for all of the collection of 
information that is required to report to higher authority.
    Slide nine provides both the program organization and a 
work breakdown structure. This is a slightly higher level than 
simply the Program Executive Office. This slide represents not 
just the Program Executive Office, but is the first slide that 
I have provided that indicates the projects; how we have in 
essence chunked out the work that we are required to do to 
ensure that we successfully implement Chapter 33.
    The names of the project leads are provided. We have eight 
separate projects, seven current. One we have closed out, which 
was the old secure solution. So we have seven projects that we 
are moving forward on now to implement Chapter 33.
    The best way of representing what those projects have on 
their plate and the timeframe that they have to work their 
projects is laid out in slide number 10. That is our integrated 
project schedule. That shows the seven, in essence, swim lanes 
that we have chunked out this work into. It represents 
dependencies, one work stream to another.
    Obviously there are very few things that go on within 
Chapter 33 that stay within just that one project. Just about 
everything has dependencies with other project leads as well. 
So that is something that we are tracking very critically.
    The important thing to remember I believe concerning the 
project timeline--and this document comes directly from our 
project management plan which was provided to the Committee 
previously--is this is a living document. We know as we gain 
experience moving forward on this, that there will be changes 
to this. And it is specifically designed as a living document. 
But this will always be kept current. It will always represent 
where we are at and what we have learned on each of the 
different project efforts.
    Slide number 11 talks briefly about government activities. 
Some of this I covered already, but I think it deserves 
emphasis. Again, the Program Executive Office will receive each 
week program--each month, rather, program management plans from 
each of the work streams. That is in some ways a safety net. 
That is not to represent that our PEO only meets with the 
project leads on a monthly basis. They are meeting essentially 
on a daily basis, but once a month we do conduct a full, 
thorough review to ensure that we have accounted for any 
dependencies or other risks that we might not have identified 
previously.
    The Chapter 33 Working Group, Joint Executive Board, and 
the Steering Committee hold weekly meetings. So we have a very 
rigorous process.
    What we don't have and what we have done to speed up the 
process is not implement what would normally be seen as a 
milestone review process. Our milestone reviews are essentially 
every week. We have very detailed project plans. We review 
those plans weekly to ensure that we have met for that week 
exactly what each of the projects had on their plate for that 
week. If they aren't able to meet them, we either adjust the 
schedule or--quite honestly, we have people in on the weekend 
getting caught up to make sure that we stay on target.
    Slide number 12 touches on a couple of items other than IT 
that I have not provided information on previously but there 
have been questions on.
    The first is status of our regulation package. Obviously we 
did need to complete regulations. We have draft regulations at 
the Office of Management and Budget (OMB). They are being 
reviewed by OMB now. We expect those to be published for 
comment on or about December 1st.
    The Chapter 33 hiring plan, the regional processing offices 
have already been given authority to hire staff. They are 
completing the preliminary paperwork to do that now. We 
anticipate recruitment starting on or about December 1st. We 
anticipate having that staff on board by March 1st and training 
will begin no later than March 1st for those additional hires.
    Slide number 13 is a representation of the claims process 
itself. And we wanted to put that in specifically to give a 
visual representation of what is different, what is going to be 
different under Chapter 33 as opposed to the process that a 
veteran goes through right now. The blue squares represent the 
things that will be different. The green squares represent the 
process as it exists now that will be essentially unchanged 
come August 1st.
    So, in essence, from the veterans' perspective and from the 
perspective of the stakeholders that we rely on for 
information, the process is going to be essentially the same. 
The veteran will apply online for benefits, as they do now. 
They have the ability to apply with hard copy if they choose to 
do that. But we highly encourage them to apply online through 
our GI Bill Web site. We will determine eligibility with our 
existing staff and the additional staff that we hire to process 
these claims, just as we do now. The determinations for claims 
processing are manual determinations now, looking at the 
screens and ensuring the data represents that the person is 
eligible. The information that we require from the school 
concerning enrollment will continue to be reported to us the 
same manner in which it is reported now through our existing VA 
One system.
    The additional information that we need from schools to 
administer the program, specifically tuition and fee amounts as 
well as participation in the Yellow Ribbon Program, is going to 
be reported to us by that existing mechanism. We are modifying 
VA once to accept fields that will allow the schools to report 
that information to us. So, again, from the school perspective, 
from the certifying official perspective, they will continue to 
use the same tool that they use now to report information to 
us.
    The eligibility information that we need from DoD will 
continue to come to us through the existing data feeds that DoD 
has been using for some time. Those data feeds are being 
enhanced to satisfy the additional eligibility requirement 
under Chapter 33.
    For example, transfer of entitlement benefits, we are well 
underway to receiving that information. In fact, this week we 
are receiving the first test file of data from DoD. The things 
that will be different concerning the claims process is--the 
first thing is veterans will not go in monthly at the end of 
the month and verify their enrollment, which is the process 
now. That is a step that they will not need to take. The check, 
the recurring housing allowance checks, will go out in an 
automated process, just as it does for our other benefit 
programs.
    The temporary system that we have set up simply does not 
allow the ability to apply--or to monthly certify. We don't 
anticipate that being a problem because in some respects that 
is a duplication of the information that the school provides 
us. The school is required to provide information to us if a 
student drops or withdraws from enrollment. But the 
certification of monthly enrollment was a back-up system that 
we did like, but we will not have that in the short-term.
    And then the payment structure, obviously, will be 
different. Instead of the single monthly check going out as is 
done now, there will be the three different benefit payments 
that are called for under the bill. Our oversight mechanisms 
will remain in place. The auditing trail, the reports, the 
correspondence will remain in place. So those will remain 
unchanged.
    Slide 14 is information that I have covered largely in my 
written testimony. But again, what we are looking at doing is 
setting up an augmented, manual process on August 1st. It is 
going to involve both manual processing and some automated 
processing. The level of automated processing we do not know 
yet, because there is a tie between the long-term strategy we 
are implementing and what we will be able to bring online from 
that long-term strategy in the short term. In essence, we are 
going to be creating a throw-away system in the short term to 
administer the programs.
    In the long term, again, we are looking at a rules-based 
process. And from the prospect of administering the benefit, 
the thing that we are going to really like about the automated 
process in the long-term is twofold. Number one, it is going to 
be an automated process, so we will be able to better manage 
the seasonal nature of our work. We have an existing staff. We 
marshal those resources as much as possible in the fall and 
spring semesters, but obviously it takes us a while to work out 
of that backlog because we are a manual FTE employee-driven 
process. We will be more able to manage that in the long term.
    Additionally, we will have a system that is more flexible 
for us. So when we have changes in legislation, when there are 
changes to the programs, we will be able to program those 
changes in much faster than we do now. We will be much more 
agile, we will be able to respond to new legislation very 
quickly.
    Slide 16 talks briefly about the Yellow Ribbon Program. We 
have had questions concerning that. We are pursuing that as we 
are with the other initiatives, very aggressively. Ultimately 
what we are hoping for is to have signed agreements back from 
the schools that are desiring to participate in the Yellow 
Ribbon Program by February 15th. The reason that we are doing 
this as quickly as possible before the spring is we would like 
veterans to have that information available come the spring 
when they start making decisions on where they want to go to 
school. So we will have that information by February.
    We will have that information concerning Yellow Ribbon 
participation on our Web site so students will be able to go in 
there and look, so when they are considering where to go, they 
will have that information at their disposal. And, of course, 
we will begin processing Yellow Ribbon payments at the same 
time we process the other payments for benefits.
    In terms of providing outreach for the Yellow Ribbon, we 
are working that from two perspectives; first of all, from the 
education professionals. We have received a lot of questions 
concerning the Yellow Ribbon from the education community. We 
have been working aggressively with potential organizations 
that represent those groups; for instance, the American Council 
on Education, the National Association of Veterans Program 
Administrators, to get information to those schools so they 
understand the specifics of what the Yellow Ribbon Program is. 
Our regulation drafts that are due to be published on December 
1st will also talk about Yellow Ribbon processes and 
procedures.
    We are also working with students. Obviously we have 
information on our Web site concerning what the Yellow Ribbon 
is. All of the information in our publications that are sent 
out to veterans and servicemembers talk about the Yellow Ribbon 
Program. Specifically, we are in the process of receiving a 
data feed from DoD and we will be doing direct mailings to all 
active-duty servicemembers concerning the specifics of Chapter 
33 overall, not just the Yellow Ribbon.
    In terms of the application and certification process, 
there are no real surprises there, as I have talked about 
already. VA wants our existing mechanism for schools to report 
information to us. We will be the mechanism by which Yellow 
Ribbon information for the student--specific information will 
be related to us. That is where we will find out if a school 
actually offers a Yellow Ribbon Program to the student in an 
amount that will be offset by the school for that specific 
student.
    That completes the slide presentation. Again, Madam Chair, 
we would be more than happy to answer any questions from 
yourself or any Members of the Subcommittee.
    [The prepared statement of Mr. Wilson, and the Slide 
Presentation, appear on p. 23.]
    Ms. Herseth Sandlin. Thank you, Mr. Wilson. Let me start 
out with a couple of questions before turning over to Mr. 
Boozman. You have the Joint Executive Board, the Steering 
Committee and the Working Group. I think I sense from your 
testimony, is it really the Working Group who is going to be 
doing the day-to-day work?
    Mr. Wilson. Yes, ma'am.
    Ms. Herseth Sandlin. Daily decisions on what needs to be 
done will be made by the Working Group, unless there are 
changes to the project schedules?
    Mr. Wilson. That is correct.
    Ms. Herseth Sandlin. Who is monitoring the key milestones 
then?
    Mr. Wilson. The monitoring of all of the milestones and the 
timelines occurs within the Program Executive Office. That is 
in essence our nerve center.
    Ms. Herseth Sandlin. Is the Program Executive Office 
reporting to the Steering Committee and the Joint Executive 
Board?
    Mr. Wilson. Correct.
    Ms. Herseth Sandlin. Would you provide me more detail on 
how the front-end tool is going to be used?
    Mr. Wilson. Yes. The front-end tool let me try to make a 
comparison with what we currently have within our benefits 
delivery network that provides some level of--I hate to use the 
term ``automation,'' but it is automation calculation.
    When a student enrolls in school right now, our claims 
examiners determine eligibility essentially manually, and they 
put the information in concerning enrollment into the system, 
and BDN provides information based on its coding and tables 
concerning the amount of benefit that is payable. It tracks how 
much remaining entitlement an individual has of the 36 months. 
It tracks whether or not there are overpayments, and handles 
all of the accounting that would be required to manage those 
overpayments behind the scenes.
    Since we are not able to rely on BDN for those calculations 
and data collections, we need a separate tool to track that 
information. We don't want claims examiners, for instance, 
every time a new claim comes in, to have to manually 
recalculate the amount of remaining entitlement that an 
individual would have.
    Ms. Herseth Sandlin. Well, I am glad you addressed some of 
the issues related to the coordination with the U.S. Department 
of Defense (DoD) because that has been an ongoing concern of 
the Subcommittee and the full Committee in different areas. I 
was pleased when we had our hearings in September that the 
testimony we received from the Department of Defense indicated 
everybody is on board to make this happen, and that you are 
using the existing data feeds.
    Now, you said the first test case, test file, is going to 
be this week.
    Mr. Wilson. Yes.
    Ms. Herseth Sandlin. Then you said that you are going to be 
using existing data feed from DoD for the VA to send direct 
mailings to all active-duty servicemembers about the new 
benefit and the Yellow Ribbon Program?
    Mr. Wilson. I don't think I was clear. The data feed--I 
probably misspoke. We are receiving a separate data dump from 
DoD, separate from the eligibility information we receive that 
provides us the current information concerning the individuals 
on active duty. And that specific information, so that we can 
mail them the information on Chapter 33. That is basically 
names and addresses.
    Ms. Herseth Sandlin. Does that include Reserve and National 
Guard?
    Mr. Wilson. It does. Any individuals that are on active 
duty currently.
    Ms. Herseth Sandlin. But not those who may have separated?
    Mr. Wilson. That will be a separate data dump that we will 
receive.
    Ms. Herseth Sandlin. From DoD?
    Mr. Wilson. Yes, we are still going to rely on DoD. The 
data feed we are working with to address that issue will be any 
active-duty member who has had active duty since September 10, 
2001, understanding that some of that information is stale, but 
it is still something that we want to provide to that current--
that record of address, so that we have sent that to the 
individuals.
    Ms. Herseth Sandlin. It has been our ongoing concern about 
those who may have separated, even when we made some changes in 
the National Defense Authorization Act, before the new benefit 
was authorized. Trying to find these young men and women who 
may have separated, that are now eligible for Chapter 33 
benefits as they were written in 2008; and then, of course, the 
new implementation for 2009.
    We will want to continue to work with you on that. The 
Ranking Member and I have had discussions of working with the 
adjutant generals, the National Guard, who may be in a position 
of working with their State agencies to help update information 
that you may be getting from DoD that may still be there.
    Can you tell me where, I don't see that as a key milestone, 
in terms of the mails that would go out. Can you give me a 
rough timeline of when you hope the mailings would go out?
    Mr. Wilson. I can provide that. I don't have that with me, 
but I can provide that to the Committee.
    The document on slide 10 is a macro-level milestone. Within 
each of these work streams we have much more detailed 
information in separate documentation. And I would be happy to 
provide that information to the Subcommittee.
    Ms. Herseth Sandlin. Okay. Thank you.
    [The information was provided in the response to question 
#2 from the post-hearing questions and responses, which appear 
on p. 34.]
    Ms. Herseth Sandlin. One last question for now, before 
turning over to Mr. Boozman. Do we still anticipate 
approximately 526,000 claims?
    Mr. Wilson. That is our estimate at this point. And I 
wanted to make sure that I emphasize in some respects Chapter 
33 is going to an area that we have not gone before. We don't 
have expertise with transfer of entitlement to the degree that 
it is offered right now. We don't have experience with the 15-
year limiting date. So there is going to be some fleshing out 
of those numbers. But that is the estimate that we have right 
now, yes.
    Ms. Herseth Sandlin. I know you said the number may be 
subject to change, depending on the level of automation 
achieved. Do you feel confident that roughly 400 new full-time 
employees to deal with the short-term plan of making sure that 
the benefits are delivered on time is sufficient?
    Mr. Wilson. We are confident in that number, with an 
assumption that the level of automation is somewhat 
commensurate with what we currently have. If that is not the 
case, then we still have flexibility within the GOE dollars 
that were provided to us to hire additional staff.
    Ms. Herseth Sandlin. Okay.
    Mr. Wilson. Over that 400, if we need to.
    Ms. Herseth Sandlin. Okay. I may have some more questions, 
but I will turn it over to Mr. Boozman for questions.
    Mr. Boozman. Thank you, Madam Chair. Mr. Wilson, when 
Congress did the Medicare Part D, initially we had a drug card 
and then we went into the program later on. But both of those 1 
day it started and there was really--it just kind of started 
and, as a result, without our friends helping us in pharmacy 
and the American Association of Retired Persons (AARP) and 
people like that and volunteers in healthcare, it was very 
difficult anyway, but it would have been much more difficult.
    Is there a plan--are you going to phase it in a little bit? 
Are you going to do the things that you can do to individuals 
rather than it just starting 1 day? Do you understand what I am 
saying? In other words, a precertification, things like that. 
You are going to have this army of manual workers. Is there a 
plan, rather than just all the sudden there is nothing, and 
then you are going to have these 4- or 500,000 individuals? Or 
are we going to phase it over a period of time before it 
actually----
    Mr. Wilson. Our anticipation is that we can do some type of 
work over the summer. We have not nailed down specifically what 
those dates would be. In essence what we would potentially be 
able to do, though, is issue certificates of eligibility. So we 
could do potentially some work over the summer, or as we 
receive claims, for example, assuming that the up front tool we 
have would allow us to populate some preliminary information, 
we can populate information into that payment system. The issue 
that is somewhat problematic is, obviously, the program is only 
for training on or after August 1st. So we can't do much--well, 
we can't generate any payments at all until August 1st and we 
really can't populate much of our systems until the schools are 
comfortable that they will certify that Joe Veteran is going to 
be in school on August 1. And once they do provide that to us, 
then we will populate our records.
    Mr. Boozman. Right. I would really encourage you, again 
looking at those, and I think we can see other programs--but if 
we can kind of, do some up-front work rather than just being 
hit, I think that would be very helpful.
    Captain Krause, will the SPAWAR structure--will SPAWAR 
structure the long-term solution program in accordance with 
standard DoD program management guidelines?
    Captain Krause. Sir, my name is Captain Mark Krause. Ma'am, 
just to correct, I was a Commanding Officer of SPAWAR Systems 
Center, New Orleans, as of October 1st. Now I am the Chief 
Staff Officer for SPAWAR System Center, Atlantic. And my boss 
is Admiral--now Captain Urban, and his boss is Admiral 
Bachmann. So, yes sir, my boss, Captain Urban and Admiral 
Bachmann, absolutely want us to comply with the DoD Defense 
Acquisition Work force Improvement Act (DAWIA) process, and we 
plan to do that. And we will work with the VA to come up with 
some type of a meld, if you will, where we still meet the 
requirements of the DoD acquisition process; that everybody 
that I have hired to do this for my team at the SPAWAR is 
level-three-certified essentially to do this, but with one 
exception, who is a level two. But they are mostly just 14s and 
15s that will in fact do that. So the answer is yes.
    Mr. Boozman. When do we anticipate having the long-term 
program plan in place?
    Captain Krause. Right now we are waiting--the money is now 
being transferred. Once we get the money, then we of course 
have to wait for the requirements. So we are still in the 
planning phase. We won't know on our end until we can get our 
hands on the requirements, flesh them out, go right down the 
system engineering, if you will, do the requirements 
definition, the requirements analysis, and then do the system 
design. And once we have that, then I will be able to 
essentially come up with an integrated master plan, integrated 
master schedule, per the DoD acquisition process that I think 
will bear scrutiny or be something that we can present and be 
confident in.
    Mr. Boozman. When do you think you all will have all of 
that, Mr. Wilson?
    Mr. Wilson. The short-term solution business requirements 
are completed. The completion of the long-term business 
requirements is imminent. We have done 90 percent, 95 percent 
of the work on that. I believe last week we finished the 
cleanup of what we needed to do. We are in the process of 
putting that all into the appropriate format and we will have 
that to OI&T very, very soon.
    Mr. Boozman. Let me get you all to comment on something in 
the sense that I have seen this in multiple things with 
government. I am on the Aviation Subcommittee of Congress and 
they are in the process of trying to get their computer program 
for controllers and this and that. And this has been an ongoing 
thing for years and years and we see this so much. Whereas you 
go into these IT things, where is the bog-down? What are you 
all alert for? What do we need to be alert for? Where are you 
going to have your problems in the sense that these things, I 
think you said 18 to 24 months, or whatever. What generally 
makes that 18 to 24 months with an amount of money as cost 
becoming a 4- or 5-year program. And still not--can you all 
comment on that, again, so that we can be observant and just 
kind of where you think the problems might occur?
    Mr. Wilson. I would like to ask Mr. Warren to respond to 
that question.
    Mr. Warren. I think you are asking a good question in terms 
of why do IT projects go off track, and I think there are some 
key areas. At the beginning, there is uncertainty about who is 
running the program, what are you trying to accomplish? And who 
is the decisionmaker or ``the'' decisionmaker? So that is key 
at the beginning so you don't get in a tug of war, ``No, it is 
mine,'' ``No, it is mine,'' and you get arguments and then 
people start countermanding each other.
    So you deal with governance. Who is the decisionmaker and 
how the decisions are made, first governance. The second piece 
is in that governance, ensuring that the program has the 
leadership--it is very, very dangerous when the IT organization 
runs the project and we start building an IT solution for an IT 
need versus a program solution. And I think you have seen 
with--what Keith has laid out, that is how we structured it. It 
is a program plan; IT is one piece of it.
    The second piece deals with requirements in terms of what 
is it we are going to build. And what you will find in many 
projects that go off track, the requirements keep changing, 
they keep shifting and drifting. ``Oh, I forgot about this 
one.'' ``Well, I really didn't mean that, I really wanted 
that.'' So you have to be very careful to make sure you define 
what you need and you define it in blocks. You define it in 
such a way that, okay, we understand that component.
    So if I can take you back to the diagram that Keith had 
laid up, showing the sequence of what are the different steps 
that need to happen. By making sure you define the requirements 
for each of the components so folks can start working on those 
while you go to the next one. So define the requirements. And 
having a little bit of flexibility in your programming and your 
development that you have to wait until you have 110 percent of 
the requirements. So making sure that you have enough 
flexibility that you can actually start moving out when you 
have a good sense of what you need to do, so you can start 
thinking through where you want to go. So those are on the 
program side, if you will.
    On the IT side there are two critical areas. The first one 
is you get into almost this war about architecture. What 
technology will we use? What specific vendor will we use in 
terms of product? And very often, given that technology changes 
so quickly on an 18-month cycle, that every 18 months somebody 
comes in and says, ``I really love this one today, so let us do 
this one.'' And then 18 months later as the program goes 
forward, ``but this is the latest and greatest thing.'' So 
therefore, we are going to do that one.
    So the key is to make sure your project cycle, your 
delivery cycle, is shorter than the technology refresh cycle. 
Otherwise you will get into this, ``That is great, but this is 
the neat thing today, so now let us do that.''
    And on the fourth one, again, on the technology side is 
making sure you have a disciplined development program, that 
you have professionals who are building--I hate to use the 
term, but it is more appropriate--in a factory. We are not 
building art products here. We are building industrial items 
that need to run consistently and reliably going forward.
    So if you deal with those four major areas and you think 
about them as you design your project, you will meet your 
schedule and you will meet your cost parameters. If you lose 
any of those from the beginning, setting of the governance, to 
the end in terms of making sure you have a professional design 
team, if you don't have that, you will have problems.
    Again, one of the reasons we reached out to SPAWAR was we 
see that professional design team, based upon their past 
practices, that they can bring what we unfortunately are 
missing in the VA. So hopefully that answered your question, 
sir.
    Mr. Boozman. Yes, sir. Thank you very much.
    Ms. Herseth Sandlin. Thank you, Mr. Boozman. Mr. Scalise, 
you are recognized.
    Mr. Scalise. Thank you, Chairwoman Herseth Sandlin. In 
terms of the short-term and long-term goals, you do currently 
have a system, it is a COBOL system that runs your--is it just 
education benefits, is it all benefits for your current 
processes without Chapter 33?
    Mr. Warren. I believe you are referring to the BDN solution 
system. Yes, sir.
    Mr. Scalise. So what SPAWAR will be working on in the short 
term is going to be building some kind of additional segment to 
your current system for Chapter 33 benefits and that would be--
what would be available by August of 2009?
    Mr. Warren. Actually, if I could, what we are using SPAWAR 
for is program management to assist as we do that short-term 
solution. But because we are spinning off of that existing BDN 
solution, we are using in-house VA IT resources. So we have 
taken the staff who built that system, who run that system, and 
said, ``Your role is to basically give us a clone of what we 
have that has been modified to meet some of the financial needs 
for Chapter 33.''
    We are making sure that SPAWAR is focused on that long-term 
solution in terms of not dealing with the technologies that are 
25 to 30 years old. We are using them to apply their knowledge 
and skill set for what the marketplace is using today in terms 
of something called service-oriented architecture, in terms of 
XML gateways, in terms of using the things we need to be 
building for the future.
    So VA resources are being utilized to modify an existing 
system, a system that is actually very, very old, a legacy 
system that is hard to maintain today. So they are focused----
    Mr. Scalise. How old is that system?
    Mr. Warren. Probably older than I. Thirty--I mean if you 
look at it, it has been there for a while, it is one of the 
first ones. The VA was actually very creative back in the day 
in terms of bringing some automation to the day. Unfortunately 
we weren't able to move off of those systems. So we were great 
then. We sort of missed it going forward.
    Mr. Scalise. So the in-house people, SPAWAR won't be doing 
the actual modification of the short-term solution, they will 
be managing it. But they--as you gather the requirements, the 
process that you are almost finished with now, that will be 
turned over to SPAWAR. They will develop a plan to build a new 
system, a long-term solution, using newer technology to handle 
all benefits processing?
    Mr. Warren. One of the things we need to be very careful 
of, IT always overpromises. I mean, we have that unfortunate 
reputation. So what we have said is our focus is Chapter 33. We 
need to deliver Chapter 33 before we talk about anything else. 
And the focus we have on this project is to deliver those 
benefits for this program. And if I do a good job, if our folks 
do a good job, then Keith has said we will look at how to 
expand this system and utilize further. If it does not deliver, 
then we need to rethink our approach.
    Mr. Scalise. So for the long term there will be a new 
system that will be built for Chapter 33, but also----
    Mr. Warren. It will have the flexibilities into it such 
that--I am going to be optimistic--when we deliver the solution 
it has the flexibility into it to support Keith for the rest of 
the education program and then look at it as a model for how do 
we deal with the rest of the benefits delivered.
    Mr. Scalise. To pull those in later.
    Mr. Warren. Again, if we succeed, If we make sure we keep 
the flexibility in it.
    Mr. Scalise. Because I know there is a longer term goal to 
have all VBA business lines paperless and under one system. I 
don't know if that is part of this, if that is a separate goal.
    Mr. Warren. We are using and we will be using and we are 
using what we have learned and what we do as part of Chapter 33 
to inform how do we do that reengineering, if you will, of 
paperless benefits delivery at the VA. This would not 
necessarily be the system.
    Mr. Scalise. It would be flexible enough to incorporate 
that later, but that is not the primary goal of the long term.
    Mr. Warren. The goal is to make sure Chapter 33 happens. It 
is very easy to say we will do this and we will do this and do 
that. We are trying to make sure we keep focus on what is the 
goal. Chapter 33 is the goal, making sure those checks go out 
and making sure we get a system in place that supports Keith 
and the critical program that he has.
    Mr. Scalise. Okay. And then one of the previous concerns--I 
know VA, Veterans of Foreign Wars and maybe other groups had 
expressed about the initial plan to go to a private contractor 
was that all of the source code, the system itself, would be 
owned by the private company. In this new arrangement that you 
have with SPAWAR, will the VA own the source code and the 
system itself?
    Mr. Warren. Source code is almost an anachronism when you 
deal with the technologies we are talking about. The rules 
engine, the data structures that SPAWAR builds for us will come 
over to the VA and we will continue going forward with it. So 
source code is actually not something that is really relevant 
to what we are doing going forward. But the intellectual 
property that the VA owns in terms of what the business is, 
what the business rules are, how we do payment, how we manage 
it, that actually comes over to the VA. SPAWAR is building and 
installing the first system at their location in New Orleans. 
We will then do the second system at a VA location so we can 
train our staff on using that technology, and then we will do a 
flip over to VA being the primary location.
    Mr. Scalise. So you would ultimately be the owner?
    Mr. Warren. We will ultimately be the owner, sir.
    Mr. Scalise. All right. As then as far as educational 
benefits, I think you had answered this partially. Currently, 
is it somewhere around 500,000 benefits that you process with 
your current system?
    Mr. Wilson. Yes. In terms of total program participation 
for all of the programs that we administer, it is about 
520,000. What we are looking for specifically for just Chapter 
33 is about a similar number for just Chapter 33, 520,000.
    Mr. Scalise. New----
    Mr. Wilson. No. Most of those individuals will be 
individuals who previously drew benefits under one of two 
programs that we administer now, and that is the Chapter 30 
Montgomery GI Bill Program for the active duty, or Chapter 
1607, which is the Reserve Educational Systems program. The 
majority of those individuals will migrate to the new Chapter 
33 benefit. Then we will have additional participation from new 
individuals.
    Mr. Scalise. Okay. Thank you. That is all I have.
    Ms. Herseth Sandlin. Thank you, Mr. Scalise. Mr. Warren, I 
would like to follow up on a few things that you mentioned. You 
said one of the things, and it was a very helpful explanation 
in response to Mr. Boozman's question, that can get these 
things off track. You mentioned when the requirements change. 
Do you, or Mr. Wilson, have concerns on how we might be able to 
avoid the impact of certain changes to the requirements as it 
relates to proposals,? Particularly those being discussed in 
the Senate, to make some technical changes to the new benefit 
and how that will affect keeping things on track and on 
schedule.
    Mr. Wilson. I can speak to it from the perspective of 
administering the benefit, and it would depend on the level of 
what an individual is referring to as technical changes. If the 
technical changes would be something, for example, along the 
lines of providing more specificity concerning how foreign 
schools are handled, that type of change would not be 
problematic. However, if it was a more significant change 
concerning eligibility criteria for the benefit itself, or 
potentially making the period of coverage for the benefit 
different than from August 1 forward, those types of changes 
would be problematic for successful implementation of the 
program.
    Mr. Warren. And they would be problematic for the system we 
have had to put in place for the short-term delivery in terms 
of the 1 August date. One of the design principles that we have 
laid out with SPAWAR is to make sure we break, if you will, the 
tyranny of the IT organization, so that as we build this 
system, rules changes are something that Keith's program 
managers can do. Today it probably takes five IT folks, a 
database programmer, and a whole bunch of other folks to make 
changes in code, versus actually using some of the newer 
technologies that get the IT folks out of changing what those 
rules are in terms of when the start is, what the amount is, 
and making sure it is in the controls of the program folks.
    So the short-term package, again because of the age of the 
system that we are using, it will be difficult. But the thing 
that we are building for the long-term solution will have those 
flexibilities inherent in the design so that we are more 
flexible, more nimble, if you will, in accommodating changes in 
what the benefit is and the decisions that need to be made.
    Ms. Herseth Sandlin. Am I correct in that the VA's original 
plan, before the new Chapter 33 benefit was established, was to 
move to this long-term strategy with SPAWAR and contractors to 
implement the upgraded IT system? Is this what we were talking 
about in September with Mr. Pedigo, that this was the plan 
based on a timeline of 2013, having it completed?
    Mr. Wilson. The timeline for 2013 was for our preexisting 
TEES strategy, TEES being simply The Education Expert System. 
That is the rules-based mechanism that we had wanted to go to 
long before Chapter 33 came along. We had that out the gate in 
the 2009 and 2008 budget. We were funded for that and we were 
moving forward, not with SPAWAR though. There was no 
relationship with SPAWAR on that initiative.
    Ms. Herseth Sandlin. Okay. So the contract, the 
relationship with SPAWAR is to try to get this done on an 18-
to-24-month timeframe because of their existing expertise in 
program design and management?
    Mr. Warren. If I could separate the two in terms of the 
timing and SPAWAR. Before Chapter 33 came on the table, if you 
will, we had already reached out to SPAWAR to start 
strengthening the development team at the VA. We have some 
structural problems in terms of leadership skill set, in terms 
of knowledge, in terms of how we do development at the VA, so 
we had already reached out to SPAWAR to bring their world-class 
expertise into the VA and start mentoring our work force. So we 
already had a relationship with SPAWAR on that.
    The 18-to-24-month time period, in terms of where did that 
time come from, we needed to meet the 1 August date in terms of 
checks. But we also needed to make sure that--given that the 
only way we could do that was using a legacy system, a system 
that actually is very difficult to work with and difficult to 
maintain. Too often IT builds a temporary solution, which then 
becomes the long-term solution, which costs a tremendous amount 
of money and pain to maintain.
    So we put a, if you will, a perish date on the system. We 
said 18 to 24 months, it is gone. It is the expiration date of 
it. We need to make sure when we hit that date we have 
something in place that allows us to go forward and doesn't tie 
us down. So 18 to 24 is, if you will, a management date. It is 
a reasonable date. But it is also to make sure we are not tied 
to something that is going to handicap us going forward.
    Ms. Herseth Sandlin. And perhaps also staying ahead of the 
refreshing of the technology problem that you described earlier 
as well.
    Mr. Warren. Yes, ma'am.
    Ms. Herseth Sandlin. We clearly have two very important 
dates that you have set up, both in the short-term and long-
term plans: our August 1 date to meet the needs and 
expectations of our veterans who are eligible for this benefit; 
and then obviously, for the reasons Mr. Warren just described, 
making sure we stick to the 18-to-24-month timeframe and move 
to the long-term solution.
    Mr. Wilson, how confident are you that you have enough 
resources in your department currently, to work both the short 
and the long-term plans effectively, especially given what we 
just heard about the importance of the long-term plan?
    Mr. Wilson. We have the resources. We have been working 
aggressively on the functional business requirements for both 
the short-term and long-term solution. Our folks have been 
putting in a lot of hours, but they have been doing a fantastic 
job. We have got the business requirements for the short-term 
nailed down. We are very, very close to having long-term 
business requirements down. We have a host of people that we 
can pull from.
    When it gets to the point of testing and validating that 
the functionality is what we need, we have a whole pool of 
people, both in my staff in Washington and our field staff at 
our processing offices, that can validate that it is working 
the way it should. So I am confident within VBA we have the 
resources we need, both to do the testing and to manage all of 
the different efforts that are underway.
    Ms. Herseth Sandlin. But the shelf life of the short-term 
solution could extend beyond 2010 if there are problems. It is 
just quite desirable to avoid that situation for the reasons 
you have already described.
    Mr. Wilson. Yes, ma'am.
    Ms. Herseth Sandlin. Mr. Frye, could you explain the role 
of the Acquisition and Materiel Management with regard to both 
the short and long-term solutions?
    Mr. Frye. Right now, as already explained by Mr. Wilson, we 
are on the Steering Committee, we are part of those weekly 
meetings that are held.
    As Mr. Wilson also explained, MITRE Corporation has been 
engaged. MITRE Corp. is a federally funded research and 
development corporation, nonprofit. We engage them with task 
orders against a base contract, and we monitor their 
performance very closely, obviously, because these are cost-
type contracts. But MITRE Corp. is a--we found them to be a 
very valuable member of the acquisition team. They bring a lot 
of expertise to the program.
    We have a governance process in place so that the use of 
MITRE Corp. or other federally Funded Research and Development 
Centers don't get out of place. Because they are cost-type 
contracts, their use is approved all the way at the Chief 
Acquisition Officer level. So we are involved. Obviously, there 
aren't major contracts in place, as explained, because we have 
got SPAWAR doing the primary work for the long-term solution. 
But insofar as contracts are used, we are involved.
    Ms. Herseth Sandlin. One final question, Mr. Wilson, 
because we have heard the concerns with the legacy system. 
While I know you are confident in terms of what your Department 
currently has, in regards to additional resources to make 
additional hires at the regional processing offices and some 
additional funds that have been allocated already, if that 
number needs to increase, what is the percentage of claims 
filed that experience some delay in processing the claim and 
the student having problems with starting classes in the fall?
    Currently, separate from the new claims we are anticipating 
under Chapter 33, do you know what percentage of all claims 
filed have those types of problems with some delay?
    Mr. Wilson. I will need to go back and see what data we may 
have on that. What I can say is our averaging processing time 
on this for 2009 was 19 days for original claims, 10 days for 
supplemental claims. Those numbers are also our goals for this 
fiscal year, and we see no need at this point to change those 
goals.
    Ms. Herseth Sandlin. Do you break those down by cause of 
the delay? Is it a DoD data feed? Is it a delay in the 
complexity of the claim with the manual processing? Is it the 
school certification? Do you break them down that way?
    Mr. Wilson. I will have to look into that and get back to 
you. I don't have good information in my head on that.
    Ms. Herseth Sandlin. If you have broken them down, it might 
illuminate if there is a particular cause that results in the 
greatest percentage of delay among those who do have delayed 
claims. I think that is where the Subcommittee will want to 
focus in our work with you to make sure that even though you 
are in the short-term using this existing process if there is a 
new field for the reporting system that the school is using for 
certification, if it is a DoD data feed issue, if it is the 
issue of how many FTEs do you have in each regional processing 
center, et cetera, I think that would be helpful to us if you 
could get us that information.
    Mr. Wilson. I would be glad to.
    [The information was provided in the response to question 
#1 from the post hearing questions and responses, which appear 
on p. 34.]
    Ms. Herseth Sandlin. Mr. Boozman.
    Mr. Boozman. I just had one thing that I was curious about. 
On one of the slides I think it showed that you would start 
your hiring process in January.
    Mr. Wilson. December 1st.
    Mr. Boozman. Okay. But your training program really didn't 
kick up until May?
    Mr. Wilson. We were looking at March 1st to begin the 
training. What we are looking at, though, is that would be the 
last date potentially at which the training would start for 
folks. For instance, if a regional processing office brings a 
group of people on between December 1st and January 1st, we 
want to go ahead and bring those folks on board, get them into 
training, because part of the issue with training this number 
of people is going to be space, training rooms, not necessarily 
overall space. But we do want to chunk it out; as soon as we 
get people that will fill up a classroom we will bring them on 
board, put them in a classroom and start the training.
    Mr. Boozman. Okay. Thank you very much. Thank you, Madam 
Chairman.
    Ms. Herseth Sandlin. Mr. Scalise, do you have any further 
questions?
    Thank you, gentlemen. We appreciate the testimony, the 
information you have provided. It is certainly helpful to 
continue to get a better understanding of the challenges you 
face with the short-term solution, with the legacy system in 
which you are trying to adapt to meet the needs of August 1st 
deadline. It is also helpful for us to be partners with all of 
you as you meet the long-term solutions to ensure timely 
delivery of the benefits as well. We appreciate the hard work 
of all of you and the folks that you are working with in your 
respective departments.
    Mr. Boozman.
    Mr. Boozman. Well, I would just like to echo that, Madam 
Chairman. And also I think the hearing today was very, very 
helpful and also very reassuring. It sounds like you guys have 
a very, very good plan and that we are on track. So I 
appreciate your hard work.
    Ms. Herseth Sandlin. We will obviously look forward to 
seeing you early in the 111th Congress. We commend our staff on 
the Subcommittee for the work that they have undertaken with 
all of you, the work that I know we will all be undertaking in 
the weeks ahead with the transition team to make sure that that 
is not an additional factor that could come in and get us off 
track, but, rather, keep us focused on both the short and long-
term solutions. We look forward to receiving those updates on 
the progress that you continue to make.
    With that, the hearing now stands adjourned.
    [Whereupon, at 11:47 a.m., the Subcommittee was adjourned.]


 
                            A P P E N D I X

                              ----------                              

   Prepared Statement of Hon. Stephanie Herseth Sandlin, Chairwoman, 
                  Subcommittee on Economic Opportunity
    I would like to welcome everyone back from the district work 
period. Many of you before us today are well aware of this 
Subcommittee's active participation in providing oversight on the 
implementation of Public Law 110-252, which provides new education 
benefits for our Nation's veterans who served after September 11, 2001.
    In previous hearings, conducted by this Subcommittee, we received 
testimony from the VA informing us of its intent to contract out the 
new IT requirements under Public Law 110-252. Later, on October 23rd, 
Committee staff were informed of the VA's new short-term plan to no 
longer use a private contractor for the immediate implementation of new 
IT systems, but rather use VA resources to create a temporary solution 
to meet the August 2009 requirements. We are also aware that the VA is 
developing a long-term plan for revamping its current IT system. I look 
forward to receiving the VA's testimony that highlights its new short 
and long-term plans.
    The passage of Public Law 110-252 is a significant milestone for 
our Nation's veterans, but a lot of work must be completed before the 
benefits can be received. While the 110th Congress comes to a close, I 
would like to assure our Nation's veterans that we will continue to 
monitor the progress of the VA's short- and long-term plans in the 
111th Congress to ensure that their earned benefits are delivered in a 
timely manner.
    I look forward to working with Chairman Bob Filner, Ranking Member 
Boozman and Members of this Subcommittee to provide oversight on the 
implementation of the new Montgomery GI Bill's requirements. I also 
remain committed to continue to work to improve education, housing and 
employment benefits for our veterans and their dependents. I now 
recognize Mr. Boozman for any opening remarks he may have.
                                 
  Prepared Statement of Hon. John Boozman, Ranking Republican Member, 
                  Subcommittee on Economic Opportunity
    Good morning everyone. When we met a few weeks ago to begin our 
oversight of how VA intends to implement the new GI Bill, there was 
considerable discussion about whether VA should develop the new 
information technology system in-house or hire a contractor for 
development and possibly some clerical support. I stated then that I 
didn't believe that should be our focus and I still don't. Now that VA 
has made their decision to use SPAWAR for the both the long- and short-
term fix that we need to not second guess this decision but help VA and 
SPAWAR implement the program.
    However, I have some concerns about how VA is organized to manage 
both the short- and long-term solutions, based on the briefings given 
to the staff and what we will see today. More specifically, the 
charters for the Executive Committee, the Steering Committee, and the 
working groups need more definition and I am still unclear about the 
responsibilities of the senior managers.
    Second, while VA has put together a plan to implement the short 
term solution there is very little definition at this point of the 
long-term effort by VA and SPAWAR.
    Third, what are the key functions that the BDN system and what are 
its limitations?
    Finally, the question remains regarding VA's plans for its 
education work force. They have stated before that no one will lose 
their VA job and that they intend to hire additional temporary staff as 
part of the short term solution. I hope to hear more details about that 
today.
    I yield back.
                                 
                 Prepared Statement of Keith M. Wilson
        Director, Office of Education Service, Veterans Benefits
          Administration, U.S. Department of Veterans Affairs
    Good afternoon, Chairwoman Herseth-Sandlin, Ranking Member Boozman, 
and Members of the Subcommittee. I appreciate the opportunity to appear 
before you today to discuss the Department of Veterans Affairs (VA) 
strategy for implementation of the Post-9/11 GI Bill (new Chapter 33 of 
title 38, United States Code). Accompanying me today is Mr. Stephen 
Warren, Principal Deputy Assistant Secretary for Information 
Technology, and Mr. Jan Frye, Deputy Assistant Secretary for 
Acquisitions & Materials Management. My testimony will address the 
short- and long-term strategies in developing information technology 
(IT) components for implementation of the Post-9/11 GI Bill, as 
requested by the Subcommittee.
    The Post-9/11 GI Bill will provide veterans, servicemembers, and 
members of the National Guard and Selected Reserve with educational 
assistance, generally in the form of tuition and fees, a monthly 
housing allowance, and a books and supplies stipend, to assist them in 
reaching their educational or vocational goals. This program will also 
assist in their readjustment to civilian life, support the Armed 
Services' recruitment and retention efforts, and enhance the Nation's 
competitiveness through the development of a more highly educated and 
productive work force.
Short-Term Strategy
    Our short-term strategy to implement the Post-9/11 GI Bill consists 
of a two-part IT solution, a fiscal payment system that uses VA's 
existing Benefits Delivery Network (BDN) to issue payments, and a 
``Front-End Tool'' (FET) for use by Education Service claims examiners 
to augment the manual processing of the claims for benefits.
    We will use internal IT staff to build the needed payment-
processing and delivery mechanisms within the fiscal-payment system of 
BDN for the purpose of making payments. This functionality will allow 
for entry of all payment types, to include recurring payments (housing 
allowance), complete accounting ability, audit-trail capability, and 
some availability of reports that will meet our finance and budgetary 
requirements.
    The Chapter 33 FET will be used to augment the manual process by 
providing additional automated support that is accessible by processors 
in each Regional Processing Office (RPO), and VA Central Office. This 
automated tool will provide functionality that cannot be included in 
the BDN fiscal-payment solution. Requirements for the FET are being 
analyzed to determine what current capabilities can be modified or 
enhanced. The range of functionality that can be provided will be 
defined by November 26. The FET will be the primary tool to be used by 
education claims examiners in preparing and processing education 
awards.
    While the BDN solution will generate the information sent to the 
Department of the Treasury for issuance of the payments, the FET is 
intended to support calculation of the payment, track the usage of 
entitlement, and store the claimant's education award history, as well 
as providing basic statistical reports.
    The implementation of the short-term solution will require 
approximately 400 additional processors at the RPOs. It is important to 
remember that this combined IT and staffing approach is a short-term 
solution that we expect to retire no later than November 2010, when the 
automated system that will be used for the long term is developed and 
implemented by our partners at the Space and Naval Warfare Systems 
Command (SPAWAR).
Long-Term Strategy
    Our long-term strategy to implement the Post-9/11 GI Bill will rely 
on support from SPAWAR to develop an end-to-end solution that utilizes 
rules-based, industry-standard technologies for the delivery of 
education benefits. The Chapter 33 program contains eligibility rules 
for benefit determinations that will work well with rules-based 
technology, while requiring minimal human intervention. VA is working 
with SPAWAR on the long-term IT solution, and expects the development 
of this program to take approximately 18 to 24 months to complete.
    The priorities established for IT enhancements for the short-term 
front-end piece have a relationship to the priorities SPAWAR will 
follow when developing the long-term solution, such that some of the 
long-term IT functionality could be used to implement our short-term 
solution. If SPAWAR can develop long-term functionality that can also 
be used in the short term and can be deployed within our timeframe 
prior to August 2009, they will do so. That would save the effort of 
having to dedicate additional resources to short-term IT investment 
that will be thrown away

when the long-term solution deploys. In both the short term and long 
term, SPAWAR also is providing IT program management support and 
technical assistance in managing the necessary data flow.
Expenditures
    VA received $120 million in supplemental funding to implement this 
new benefit, $100 million in the General Operating Expenses (GOE) 
account and $20 million in the IT appropriation account. To date, VA 
has transferred $13.25 million from its supplemental IT funds to SPAWAR 
for the purpose of project management for both the long- and short-term 
solutions and IT support for the data integration to support the long-
term solution.
    The remaining $6.75 million from the supplemental funding will be 
used for modifications to existing VA systems, data integration, and 
testing associated with the data-integration initiative. VA has 
requested a reprogramming of $35 million of the available $100 million 
of GOE funds into the IT appropriation account to pay for the 
development and implementation of this long-term solution. The 
remaining $65 million in GOE funds is sufficient to cover the 
additional 400 FTE.
Project Review, Milestones, and Scope of Delegated Responsibilities
    To meet the program's August 1, 2009, effective date, VA has 
assigned project oversight duties, established milestones, and 
instituted frequent oversight review.
    VA Education Service established a Program Executive Office (PEO) 
that is responsible for monitoring and coordinating all Post-9/11 GI 
Bill implementation activities. In addition to the PEO, VA contracted 
with the MITRE Corporation, a not-for-profit research and consultation 
firm, as well as SPAWAR, to develop the long-term IT solution.
    The first critical milestone was met on November 14, 2008, with the 
completion of the development of the business requirements for the 
short-term payment solution. The next critical milestone for the short-
term solution is completion of the IT functional requirements on 
November 26th. With the completion of these functional specifications, 
detailed design of the solution will start, with an expected completion 
date for the design of all components of the financial delivery portion 
by March 31, 2009.
    With the completion of the business requirements, staff will then 
establish these requirements so that they are applicable to the design 
and development of the long-term solution.
VA/DoD Identity Repository
    The VA/DoD Identity Repository (VADIR) supports an effort that has 
been underway for the past 5 years to collapse the multiple data flows 
between VA and the Department of Defense (DoD) into the minimum number 
possible. This repository will be expanded to incorporate the 
additional data necessary to support the Chapter 33 program.
    In cooperation with the Defense Manpower Data Center (DMDC), 
modifications to the VA/DoD Identity Repository (VADIR) for the 
incorporation of the unique Chapter 33 data elements are underway. The 
exchange of test files between VA and DoD is scheduled to begin this 
week.
Regulations Development
    At the end of September, VA completed a draft of a proposed 
regulations package required for implementation of the Post-9/11 GI 
Bill. This package is now under review by the Office of Management and 
Budget.
    Madam Chairwoman, this concludes my statement. I, Mr. Warren, and 
Mr. Frye would be pleased to answer any questions you or any of the 
other Members of the Subcommittee may have.


[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]



                   MATERIAL SUBMITTED FOR THE RECORD
                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                  November 18, 2008

The Honorable James B. Peake, M.D.
Secretary
U.S. Veterans Affairs
810 Vermont Ave., NW
Washington, DC 20420

Dear Secretary Peake:

    I am sending you deliverables and questions for the record in 
reference to a hearing from our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity VA's Short- and Long-Term 
Strategies for Implementing New G.I. Bill Requirements on November 18, 
2008. Please answer the enclosed hearing questions by no later than 
Friday, January 2, 2009.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres at by fax at (202) 225-2034. If you have any questions, 
please call (202) 226-4150.

            Sincerely,

                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                                 ______
                                 
                        Questions for the Record
                  Subcommittee on Economic Opportunity
                VA's Short- and Long-Term Strategies for
                Implementing New G.I. Bill Requirements
                           November 18, 2008
    Question 1: What is the percentage of claims filed that experience 
some delay in processing the claim and the student having problems with 
starting classes in the fall? Breakdown by cause of the delay and 
explain if it is because of 000 data feed; is the delay because of the 
complexity of the claim with the manual processing; is it the school 
certification?

    Response: Education Service does not currently have a mechanism to 
collect information about individual case delay reasons. We track 
information regarding average timeliness of all completed claims and 
average number of days for pending claims. For original claims 
completed in October 2008, the average number of days to complete was 
22; of those claims 75 percent were completed in 30 days or less. For 
supplemental claims completed in October 2008, the average number of 
days to complete was 17, and 85 percent of those claims were completed 
in 30 days or less. As of November 2008, approximately 7,100 original 
education claims were pending for an average of 20 days. Approximately 
11,700 supplemental education claims were pending for an average 19 
days.

    Question 2: Provide the Subcommittee an estimate of the timeline of 
when the mailings for Active Duty, National Guard, Reserve, and 
separated servicemembers will go out.

    Response: The Department of Veterans Affairs (VA) plans to mail 
letters to all potentially entitled veterans who served an aggregate of 
90 days on active duty after September 10, 2001. We estimate the 
mailing will be completed by January 30, 2009.
    VA is also finalizing a plan to acquire information necessary for a 
large-scale mailing of Post-9/11 GI Bill information to all current 
members of the Armed Forces.
    VA also has regularly scheduled mailings for servicemembers who are 
potentially eligible under the Montgomery GI Bill (MGIB). As those 
servicemembers are potentially entitled to the Post-9/11 GI Bill, we 
also include information about that benefit. Servicemembers receive a 
mailing after completing 12 months on active duty, another after 
completing 24 months, and another within 6 months of discharge. A 
recent mailing was completed on September 24, 2008, followed by another 
one in mid-December.

    Question 3: Please explain the contract arrangement that VA has 
with MITRE and SPAWAR.

    Response: VA has engaged the services of MITRE Corp., a federally 
funded research and development center. The MITRE contract enables VA 
to access private sector enterprise systems and engineering and program 
management expertise from an organization that provides objective, 
independent, conflict-free advice, and functions as a trusted partner 
of VA. MITRE provides direct support to the Veterans Benefit 
Administration's (VBA) Office of Business Process Integration (OBPI), 
the coordinating body and focal point for the development of the 
comprehensive strategic vision for business and data systems across all 
VBA. OBPI is responsible for ensuring VBA's strategic business needs 
and requirements are properly documented, integrated, and communicated 
both internally and externally. OBPI serves as VBA's principal 
interface to the VA Office of Information & Technology.
    MITRE provides expert enterprise engineering and integration 
support to VA through five general task areas:

    1.  Strategic Management
    2.  Program and Project Management
    3.  Technical Management
    4.  Independent Evaluation and Audit
    5.  Procurement Support and Evaluation

    SPAWAR Systems Center Atlantic (SSC Atlantic) is a Navy Working 
Capital Fund financed, systems engineering command, that delivers 
capability in command, control, communications, computers, and 
enterprise information systems for the Department of Defense, and other 
Federal agencies. SSC Atlantic and VA entered into a relationship 
through an interagency agreement in November 2007, to provide technical 
consulting, analysis, planning, systems engineering, program execution, 
and support for information management/information technology 
initiatives to VA.

                                  
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