[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




 
                       POST-9/11 GI BILL: IS THE
                  U.S. DEPARTMENT OF VETERANS AFFAIRS
                         READY FOR AUGUST 1ST?

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

                                HEARING

                               before the

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

                                 of the

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

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 25, 2009

                               __________

                           Serial No. 111-32

                               __________

       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
DEBORAH L. HALVORSON, Illinois       BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia      DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico             GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas             VERN BUCHANAN, Florida
JOE DONNELLY, Indiana                DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia

                   Malcom A. Shorter, Staff Director

                                 ______

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

          STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman

THOMAS S.P. PERRIELLO, Virginia      JOHN BOOZMAN, Arkansas, Ranking
JOHN H. ADLER, New Jersey            JERRY MORAN, Kansas
ANN KIRKPATRICK, Arizona             GUS M. BILIRAKIS, Florida
HARRY TEAGUE, New Mexico

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

                               __________

                             June 25, 2009

                                                                   Page
Post-9/11 GI Bill: Is the U.S. Department of Veterans Affairs 
  Ready for August 1st?..........................................     1

                           OPENING STATEMENTS

Hon. Harry Teague................................................     1
    Prepared statement of Congressman Teague.....................    15
Hon. John Boozman, Ranking Republican Member.....................     2
    Prepared statement of Congressman Boozman....................    15

                               WITNESSES

U.S. Department of Veterans' Affairs, Keith M. Wilson, Director, 
  Office of Education Service, Veterans Benefits Administration..     3
    Prepared statement of Mr. Wilson.............................    16

                   MATERIAL SUBMITTED FOR THE RECORD

Background:
    Executive Summary of the U.S. Department of Veterans Affairs, 
      Office of Inspector General's Report, entitled ``Review of 
      Interagency Agreement Between the Department of Veterans 
      Affairs and Department of Navy, Space Naval and Warfare 
      Systems Center (SPAWAR),'' Report No. 09-01213-142, dated 
      June 4, 2009 [The full report is being retained in the 
      Committee files.]..........................................    26
Post-Hearing Questions and Responses for the Record:
    Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
      Economic Opportunity, Committee on Veterans' Affairs, to 
      Keith Wilson, Director, Office of Education Service, 
      Veterans Benefits Administration, U.S. Department of 
      Veterans Affairs, letter dated June 29, 2009, and VA 
      responses..................................................    28


                       POST-9/11 GI BILL: IS THE
                  U.S. DEPARTMENT OF VETERANS AFFAIRS
                         READY FOR AUGUST 1ST?

                              ----------                              


                        THURSDAY, JUNE 25, 2009

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

    The Subcommittee met, pursuant to notice, at 1:37 p.m., in 
Room 334, Cannon House Office Building, Hon. Harry Teague 
presiding.

    Present: Representatives Teague and Boozman.

OPENING STATEMENT OF HON. HARRY TEAGUE, PRESENTING STATEMENT OF 
                   CHAIRWOMAN HERSETH SANDLIN

    Mr. Teague. Good afternoon, ladies and gentlemen. The 
Committee on Veterans' Affairs, Subcommittee on Economic 
Opportunity, Oversight Hearing on the U.S. Department of 
Veterans Affairs (VA's) strategy for implementing the Post-9/11 
GI Bill will come to order.
    I ask unanimous consent that all Members have 5 legislative 
days to revise and extend their remarks and that written 
statements be made part of the record. Hearing no objection, so 
ordered.
    Chairwoman Herseth Sandlin asked me to Chair in her absence 
today. We expect her to join us later this afternoon.
    Today we will continue with our series of oversight 
hearings on the VA's implementation plans for the Post-9/11 GI 
Bill. It is important that we continue to provide the VA the 
opportunities to update the Subcommittee on their 
implementation efforts for the short-term and long-term 
solutions.
    This hearing will also give the VA the opportunity to ask 
for Congressional assistance if it is required.
    Since the passage of the Post-9/11 GI Bill, many items of 
concern have been raised about this very complicated program. I 
am sure our Chair and Ranking Member will agree that this 
Subcommittee will continue to seek answers to the 
implementation, but also veteran outreach, university 
partnerships, and other items of concern.
    While there was tremendous Congressional support for the 
passage of the Post-9/11 GI Bill, responsibility does not end 
after a bill is signed into law. As our panelists know, this 
Subcommittee will continue to work with the administration to 
ensure that our veterans receive their educational benefit in a 
timely manner.
    I now recognize Ranking Member Boozman for any opening 
remarks that he may have.
    [The prepared statement of Congressman Teague appears on
p. 15.]

             OPENING STATEMENT OF HON. JOHN BOOZMAN

    Mr. Boozman. Thank you, Mr. Chairman.
    I believe this is our fifth oversight hearing on VA's 
progress toward implementing the new Chapter 33 GI Bill.
    In our previous hearings, the Department has presented a 
relatively optimistic appraisal of their progress toward 
meeting the August 1st start date. Knowing that things seldom 
go 100 percent as planned, I guess I would feel more 
comfortable if VA came to us with problems. So, again, I want 
to be sure and encourage you as things come up to let us help 
you.
    For example, in response to a request from Ranking Member 
Buyer, the VA Inspector General (IG) investigated the working 
relationship between VA and the Navy Space, Naval Warfare 
Systems Center (SPAWAR). As a result, the IG has released a 
report entitled, ``Review of the Interagency Agreement Between 
VA and the Navy Space, Naval Warfare Systems Center,'' that to 
put it mildly was highly critical of that relationship.
    In general, the report found serious problems with 
compliance with the interagency agreement by both agencies, 
poor administration of the agreement in terms of how taskings 
were tracked, a lack of cost controls to the point where VA was 
unaware of the number and type of personnel being funded 
through the interagency agreement, and a wide variety of other 
deficiencies that suggest a serious lack of oversight by VA.
    While the report contained only a smattering of information 
specific to the Chapter 33 task of the interagency agreement, 
the overall findings in the report does not inspire confidence 
in the partnership's ability to implement the long-term 
solution for the Chapter 33 program.
    Mr. Chairman, I ask unanimous consent that the VA IG's 
report number 09-01213-142 be entered into the record of 
today's proceedings.
    Mr. Teague. So ordered.
    [The VA's IG report will be retained in the Committee 
files. The Executive Summary of the report appears on p. 26.]
    Mr. Boozman. Thank you, Mr. Chairman.
    The question before us today is will VA start paying in 
August and I believe that they will.
    I also believe there will inevitably be issues that none of 
us have anticipated, but I am less sure about the long-term 
solution and I hope we will take a look at that as soon as our 
schedule permits.
    Given the tenure of the IG report as well as acquisition 
and program management issues that have been brought before the 
Subcommittee, I believe VA has serious challenges in meeting 
the long-term strategy.
    I would also note the June 19th press release that 
announced the Department of Veterans Affairs has announced a 
new information technology (IT) management approach department-
wide, new IT programs and projects at VA that must be 
implemented using the project management accountability system 
(PMAS).
    PMAS is an incremental development approach with a rigorous 
management approach that halts programs that fail to meet 
delivery milestones that will ensure early identification and 
correction of failing IT programs.
    An analysis of 282 ongoing development programs that VA has 
indicated, many of those programs exhibit at least one 
characteristic that could indicate a failing program, either 
significantly behind schedule, significantly over budget, or 
showing deteriorating products released quality. And that's in 
quotes.
    I applaud Secretary Shinseki's initiative and look forward 
to VA instituting a highly structured, disciplined approach to 
project management.
    Mr. Chairman, I know that Mr. Wilson and staff are working 
hard to get the program up and running. The new GI Bill is very 
complex and will be a challenge to administer for at least the 
next couple of years until we get the bugs worked out. And I 
invite the Department to help us move in that direction.
    Finally, I want to compliment Mr. Wilson and Mr. Wilson's 
staff for the hard work they have done to make the new GI Bill 
a reality.
    So I look forward to hearing from our witnesses today, and 
I yield back the balance of my time.
    [The prepared statement of Congressman Boozman appears on
p. 15.]
    Mr. Teague. Thank you, Mr. Boozman.
    I would like to welcome our panelists testifying before 
this Subcommittee today. Joining us in our first panel is Mr. 
Keith Wilson, Director of the Office of Education Service, 
Veterans Benefits Administration, U.S. Department of Veterans 
Affairs; accompanied by Mr. Stephen Warren, Acting Assistant 
Secretary for Information and Technology, U.S. Department of 
Veterans Affairs; and also Mr. Mark Krause, Space and Naval 
Warfare Systems Center, Department of Veterans Affairs Program 
Manager.
    I thank all of you for joining us today.
    Mr. Wilson, you are now recognized.

  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 MARK 
 KRAUSE, DEPARTMENT OF VETERANS AFFAIRS PROGRAM MANAGER, SPACE 
           AND NAVAL WARFARE SYSTEMS CENTER ATLANTIC

    Mr. Wilson. Thank you.
    Good afternoon, Chairman Teague, Ranking Member Boozman, 
and Members of the Subcommittee. I appreciate the opportunity 
to appear before you today to discuss VA's ongoing efforts and 
implementation strategy for the Post-9/11 GI Bill.
    Accompanying me today are Mr. Stephen Warren, Principal 
Deputy Assistant Secretary for VA's Office of Information and 
Technology (OI&T), and Mark Krause, SPAWAR's VA Program 
Manager.
    My testimony will address the short- and long-term 
strategies in developing information technology components for 
implementation of the Post-9/11 GI Bill and the progress VA has 
made 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 back-end tool fiscal 
payment system, which utilizes the existing benefits delivery 
network to issue payments and a front-end tool (FET) for use by 
education claims examiners to augment the manual process of 
education claims.
    OI&T is developing the functionality of the FET in three 
phases. Phase one, which includes the capability to accept 
applications and manually store eligibility entitlement 
information, was successfully deployed on March 9th of 2009.
    Phase two will add specific data elements for processing 
claims under the transfer of entitlement provisions in the law, 
provide the capability to perform payment calculations for 
school enrollment periods, and contains additional field 
validations. Phase two coincides with the planned production 
availability of the Benefits Delivery Network (BDN) fiscal 
payment system, i.e., the back-end tool.
    Teams of subject matter experts conducted user acceptance 
testing of the FET phase two as well as the back-end tool and 
the associated calculation tools from May 4th, 2009, through 
June 19th, 2009. The functionality for phrase two is on track 
and scheduled for delivery on July 7th of 2009.
    Phase three will add the capability to perform calculations 
for aggravating periods of active-duty service and determining 
entitlement amounts and benefit levels. Currently the claims 
examiners use a calculation tool separate from the FET to 
perform these calculations. Phase three of the FET is expected 
to become operationally ready in September of 2009.
    Our long-term strategy to support delivery of Post-9/11 GI 
Bill education benefits relies on a partnership with SPAWAR 
Systems Center Atlantic to design, develop, and deploy an end-
to-end solution that utilizes rules-based industry standard 
technologies.
    The Post-9/11 GI Bill contains eligibility rules and 
benefit determinations that will work well with rules-based 
technology to reduce the need for human intervention.
    VA is currently working with SPAWAR Atlantic on the long-
term IT solution and expects the deployment of this program to 
be completed no later than December of 2010.
    In accordance with VA's new IT management approach 
announced on June 19th, 2009, VA's Office of Information and 
Technology will continue its practice of incremental 
development and strict management of milestones to ensure that 
we successfully deliver the functionality needed to serve our 
veterans. New functionality will be delivered in increments of 
not more than 6 months.
    On May 1st, 2009, VA began accepting applications to 
determine eligibility to the Post-9/11 GI Bill. We have 
received more than 75,000 applications and the Regional 
Processing Offices (RPOs) have fully processed approximately 
35,000 of those claims.
    On July 6, 2009, we will start accepting enrollment 
certifications from school certifying officials and begin 
processing claims for payment. The first payments will be 
released by the U.S. Treasury on August 3rd, 2009.
    Approximately 530 claims examiners have been hired under 
term appointments to support the implementation of the short-
term strategy. All employees completed training of phase one by 
June 15th. Phase two training started on June 8th and is 
expected to be completed no later than July 3rd.
    VA has authorized the RPOs to hire 230 additional claims 
examiners. All of those employees are expected to be on board 
by August 31st of 2009.
    Mr. Chairman, this completes my statement. I would be 
pleased to answer questions you or other Members of the 
Subcommittee may have.
    [The prepared statement of Mr. Wilson, and a text version 
of the slide presentation, appears on pp. 16 and 18.]
    Mr. Teague. Thank you.
    Next Mr. Stephen Warren.
    Mr. Warren. With your acceptance, we would like to move 
through a slide presentation, Mr. Chairman, which actually lays 
out answers to specific questions on the short-term solution as 
well as major program elements that lay out the long-term 
solution.
    Mr. Teague. Please go ahead.
    Mr. Wilson. We have prepared a slide deck that covers both 
implementation, operational issues, as well as status on short-
term and long-term IT implementation.
    [Slide]
    Mr. Wilson. The first issue I would like to cover is status 
of the Yellow Ribbon Program. We have had a very robust 
response, I believe, to the Yellow Ribbon Program within the GI 
Bill, Post-9/11 GI Bill. We have Yellow Ribbon agreements in 
place in all 50 of the States. We have a total of over 3,000 
agreements in place from over 700 schools across the country.
    As soon as we finish compiling our final list of Yellow 
Ribbon Program agreements, we will have that information on our 
Web site. We expect that to be completed by next week and up 
and available for anybody that is interested in reviewing it.
    Contribution amounts under those Yellow Ribbon agreements 
range from $50.00 to over $34,000. If I could draw some broad 
conclusions, generally speaking, schools are entering into 
agreements that cover their entire share of the difference 
between their tuition and fees and the highest in-state public 
tuition and fees.
    So the $50.00 to $34,000 may not represent anything 
specific concerning how much money a veteran may have to pony 
up in addition to Yellow Ribbon agreements. Fifty dollars could 
be an estate, that that is the only difference between the 
public and the private tuition. So, again, most of the 
agreements are for the full amount.
    Approximately 88 percent of the agreements are from private 
institutions. Those come from both nonproprietary and 
proprietary schools. The largest share are nonproprietary 
schools, but proprietary are well represented as well. The 
smallest category of schools that are represented are the 
public schools.
    I would like now to talk about the status of claims 
processing. We have received as of this morning approximately 
84,000 claims. We have completed processing on approximately 
47,000 of those claims.
    Initially our first week of productivity was not very good. 
We were learning our way in many ways, had some minor technical 
issues that we worked through fairly quickly.
    Up until June 15th, we had a total of 120 claims examiners 
that had completed training and were dedicated full time to 
Chapter 33. So because of that limited number, our production 
overall was low.
    June 15th, we completed the training for most of our new 
hires for phase two and the majority of those folks went into 
production.
    Over the last week, what we have seen is a fairly 
substantial increase in our productive capacity and we are now 
on average each day far exceeding the number, our production is 
far exceeding the number of incoming claims that we are 
receiving.
    So we believe we have turned the corner on productive 
capacity and we look forward to continued improvement in that 
area.
    As I mentioned in my testimony, VA has completed the hiring 
of 530 additional individuals. Those individuals have completed 
their phase one training. Phase two training is underway for 
those individuals as well as our permanent staff right now. We 
are in the process of hiring 230 additional claims examiners 
and they will go through the same training as the rest of our 
claims examiner staff.
    There will be a third phase of training associated with 
implementation of phase three of the interim solution. Phase 
three will in essence give us the capability of processing 
amended awards, supplemental award actions, such as reductions 
in training time. So in addition to the phase one and phase two 
training that has been completed or underway, we will have some 
additional training for phase three.
    [Slide]
    Mr. Wilson. The next four slides go over key milestones in 
our short-term IT development. If I could go directly to slide 
nine, phase one is entirely complete. There are no other 
actions that need to be completed to implement phase one.
    Phase two is largely complete. There are a couple 
additional pieces of information that we still need to 
complete. One is publishing the full list of the Yellow Ribbon 
participating schools, which will be on our Web site as I 
mentioned next week.
    And then our next key milestone is July 6th when we begin 
accepting and processing the enrollment certificates from the 
schools. That will be the trigger that will allow us to begin 
calculating payment amounts. That will be coinciding with the 
deployment of our phase two functionality, which provides the 
payment structure that we need.
    And then, of course, on August 1st, we will begin 
implementing payments.
    Phase three, we have completed basic work concerning 
clarification of functional requirements that is needed for 
phase three. As I have mentioned, there will be training needed 
for all of our claims examiners in phase three. And we will 
deploy phase three in the middle of September.
    I would like now to turn it over to Mr. Warren who will 
talk about the long-term solution.
    Mr. Warren. So we have been very successful in terms of 
deploying the tools, the interim solution that the Education 
Services needs.
    One of the comments made was about the PMAS effort, this 
program the Department rolled out, brings all projects under 
this management discipline of iterative development.
    The Chapter 33 short-term solution has been one of the 
models that we have used to develop the long-term program.
    If we turn back to when we first had our first hearing or 
second hearing, since that time, we have delivered 16 modules 
or 16 pieces of functionality in a 10-month period. So the idea 
of bringing systems online, bringing functionalities online 
that the business side, the Education Service could use was the 
model we used.
    And for the interim solution, that short-term solution, we 
have been very successful. So we have learned a lot in doing 
this that we are now applying across the rest of the 
Department's development programs. That same discipline is 
being applied to that long-term solution with our partners at 
SPAWAR.
    We have structured this, and I will get into a schedule and 
a schematic diagram about how we are going to phase this over, 
we are looking at release on a 4- to 6-month interval. We will 
continue that process of bringing functionality online and 
cutting over from this interim solution into this long-term 
solution. So bringing it over and bringing increased 
functionality as well as reduced complexity to the Education 
Service employees as we go forward.
    Distribution application, again the idea, we are making 
sure we are bringing all the tools to bear. Service-oriented 
architecture is, a techie term for how do we move away from 
monolithic solutions. How do we build things in modules in such 
a way that support the business, moving that forward.
    Agile methodology, this idea of you iterate. You do not sit 
down and spend 3 years developing requirements and then build 
something for 3 years such that the person you are building it 
for is no longer remembering what you are doing it for.
    So, again, small pieces. What do you need to do. Let us 
bring it online, test it, make sure it works, and then move it 
forward.
    And, again, rules based, this idea of how can we take the 
drudge work, out of that process and, allow the human, to do 
good thinking, value-added work versus just moving pieces of 
paper.
    [Slide]
    Mr. Warren. This diagram represents what the interim 
solution looks like, the front-end tool or the FET and the 
back-end tool. The front-end tool helps the Education Service 
employee to do the processing. The back-end tool is the 
financial system that actually moves the tape to Treasury, 
which then cuts the checks.
    The pink boxes are all the other things necessary to make 
this happen. You can see the claimant or the veteran is on the 
left-hand side, the veteran's claim examiner, the individual, 
the employee who is doing this work is sitting there in the 
middle, and the educational institutions that need to make it 
happen.
    These are all the different systems that we needed to 
change to ensure the short-term solution happened. We also need 
to make sure we integrate them in with the long-term solution.
    So when we do our first phase roll-out for the long-term 
solution, as you can see, we have taken the front-end tool out 
and we have integrated it in with the pieces. We have also 
taken the job aids out, which are add-ons that we need to put 
in to make sure that the claims examiners could do what they 
needed to go forward.
    So as we go to release two and release three and release 
four, it is going to change these pieces out such that there is 
a rules-based process that will be utilized for the Chapter 33 
processing when we hit December of 2010.
    [Slide]
    Mr. Warren. So, again, to give you a schematic diagram of 
how we phase those in, this next diagram and lays out how do we 
move those things in. We have talked about four releases. We 
have broken them into functional pieces, adjudication of the 
claim, how do we do that data exchange, and reports, processing 
the payment.
    And as you can see, we are bringing pieces of functionality 
online as we move that through. So, again, it is bringing a 
piece on, making sure it works, adding to it, such that in 
December of 2010, we are done. We have a new system up. The 
interim solution has been phased out and we are running in that 
rules-based environment.
    [Slide]
    Mr. Warren. This is a cartoon that tries to show when we 
reach that December 10th date how we will have modernized this 
one component of the benefits delivery process at the 
Department. It is using all the tools that we have been talking 
about in these hearings and others; a rules-based engine, a 
work-flow engine, service-oriented architecture in terms of how 
do you break it down into discernible charts, how do we make 
sure that we have a veteran facing a portal that has an ease of 
entry as well as status reporting as individuals are filing 
their claim, where is it in the process. So, again, a cartoon 
of how the pieces fit together.
    And then from a timing standpoint, this is to lay out that 
iteration. The iterative development actually starts in August 
of this year, so the fourth quarter is August and, again, 
iterating. And by November of this year, we will have the 
complete environment in place. And then as we move forward, we 
are looking at second quarter, third quarter, fourth quarter, 
and then final in December 2010.
    So, again, to give you a sense of how we are moving it 
through, how we are integrating it into the existing system and 
phasing it out, the types of functionality we are bringing 
online.
    The new development program is functionality delivered in 6 
month or less increments. Our intent, as we did with the short-
term solution, is to do 6 months, less than 6 months, and then 
just keep moving it forward.
    Those are my prepared remarks, Mr. Chairman, Minority 
Member, and glad to answer any questions.
    I also have Mark Krause with us from SPAWAR, if there are 
specific questions to that, available, sir.
    Mr. Teague. Thank all of you.
    Mr. Krause, did you have any additional comments or just in 
association?
    Mr. Krause. No, sir, not at this time.
    Mr. Teague. You know, the Committee has heard concerns from 
universities that there is not enough information provided to 
answer specific findings and concerns. Some universities feel 
that they are not receiving any information at all.
    Have all the university officials across the country been 
informed about how the new GI Bill process will work? Are VA 
regional offices involved in briefing university officials? And 
what information has been provided to colleges and universities 
to prepare them for the new GI Bill?
    Mr. Wilson. There are several things underway in that area. 
We base our relationship with the school certifying officials 
at the regional office level. Every summer, each of our 
Regional Processing Offices have conferences for school 
certifying officials. We have concluded two of those 
conferences so far this year.
    Of note, one of those conferences was held in conjunction 
with a conference with the National Association of Veteran 
Program Administrators because they are key to everything that 
we do.
    We expect when those conferences are complete to have had 
in excess of 2,500 school officials at each of those 
conferences.
    We have also had a redundant approach in terms of the 
discussions that we have had with them and the information that 
we have provided to them.
    We have had a series of conferences in conjunction with the 
American Council on Education that were also very well 
attended.
    We are in the process now of providing training to VA's 
education liaison representatives (ELRs) who are VA officials 
in each of the States. And when that training is concluded, the 
ELRs will be visiting directly with every school official to 
ensure that they do have the information they need.
    Additionally, a very key part of the information flow is 
our relationship with State approving agencies who are also out 
in the field with the schools and with our ELRs. And each of 
the State approving agencies have been conducting very robust 
outreach efforts to school officials.
    Mr. Teague. Okay. Now, you have stated that the VA attended 
over 30 conferences to better inform institutions of higher 
learning about this GI Bill.
    Do you believe that all of the institutions of higher 
learning have been properly informed?
    Mr. Wilson. I believe they have been informed. In addition 
to the national conferences that we have had for the larger 
States, we have attended local conferences such as Florida had 
a school conference for schools in that State. There were over 
300 individuals represented there.
    In addition, what we have done is provided direct mailings, 
a series of direct mailings directly to the schools and 
provided them information on the benefit program as well.
    I believe they have received information, but we want to 
continue to work with those school officials to ensure that 
they are comfortable that they have that information.
    One way that we are reaching out again to the schools to 
make sure that they have received the information they needed 
is contracting with an organization that is going to go out and 
survey the school officials to give us very clear information 
concerning whether or not they are comfortable with the 
information they have received and if they are not comfortable, 
what VA can do to provide the information that will make them 
comfortable.
    Mr. Teague. Okay. Also in your written testimony, you 
highlighted that the VA received approximately 75,000 
applicants. Most of us had anticipated a larger pool of 
applications. So I am pleased to read in your testimony that 
you are working on developing new outreach efforts.
    You might recall that with the leadership of Ranking Member 
Boozman, Congress authorized the VA to conduct mass media 
outreach services. As of today, I have not been made aware of 
the VA using mass media as an outreach option.
    Will you be using mass media such as television or radio to 
advertise the new GI Bill benefit?
    Mr. Wilson. We will. We have underway right now an 
acquisition process to bring a professional media firm on board 
specifically for that purpose.
    Mr. Teague. If the long-term solution is not finished as 
scheduled, how long can you keep the short-term solution 
working?
    Mr. Wilson. We have the authority to keep the term 
employees on for a number of years. What we do not have is the 
funding. We would be asking for additional funding if we need 
those individuals to stay beyond an appropriate time once the 
long-term solution is fully implemented.
    Mr. Teague. What hardware and software purchases are you 
looking at for the long-term solution?
    Mr. Warren. For the long-term solution, there is a package 
of items; can we go back to the slide set. Is it possible to 
bring that up?
    [Slide]
    Mr. Warren. Great. Looking at this cartoon to try and 
represent, there are some pieces we already have, and I will 
not go into vendor brands. But a rules engine has already been 
purchased for use. The work-flow engine we are looking at and 
the underlying servers, we will need to buy those.
    But all of those costs, whether we are going to be buying 
them or leasing them, are in the resources that are 
appropriated for this project. So those are already in the 
funding stream. They are also part of the stimulus funding to 
actually bring that system up and have it available.
    I am not sure I am catching the sense of your question, Mr. 
Chairman.
    Mr. Teague. How many purchases have been made with 30 
percent off and 50 percent off and other discount amount; do 
you know?
    Mr. Krause. Sir, I am sorry. I did not understand the 
question, 30 percent off, 50 percent off.
    Mr. Teague. Yeah. At what discounts have certain purchases 
been made? Do you have any information on that?
    Mr. Krause. No. So far, we have put aside about $4.2 
million to buy hardware for the long-term solution. We have 
purchased approximately, I think last count was about $1.2 
million of that so far.
    We are thinking of using leased facilities, leased cloud 
computing facilities that will allow us to deploy quicker, 
faster, and maybe not buy so much hardware, but lease it until 
we get everything online and get the configuration straight. 
And then we can build, you know, we can eventually migrate to a 
VA facility a few years from now.
    So we are looking pretty strongly at the leasing option so 
that we do not have to buy a lot of equipment or significant 
equipment.
    Mr. Teague. Okay. Thank you very much.
    At this time I am going to defer to Ranking Member Boozman 
for his questions, please.
    Mr. Boozman. Thank you, Mr. Chairman.
    I guess for me, the number one question is, is that with 
the August 1st implementation date coming up, what are the 
major challenges do you see lurking out there that we have to 
overcome?
    Mr. Wilson. Let me first provide, if I could, a summary of 
the things that we feel very comfortable with.
    As I have mentioned, we have completed user acceptance 
testing for phase two. That includes having information 
transmitted to Treasury. And Treasury has completed the work 
that they need to validate that they can, in fact, cut checks, 
payments based on the information that they receive from us. So 
we feel very comfortable that we are in good shape in terms of 
having the capability of generating payments.
    We continue to have a challenge with the volume of new 
employees obviously. Training will be an ongoing effort with 
these individuals. We are looking at that very carefully. In 
fact, we have completed our first initial quality review of 
Chapter 33 claims that were completed. The quality level was at 
92 percent overall, which I feel fairly good about, taking into 
account how early on we are on this.
    The errors that we did find were fairly benign. There was 
some, for instance, 1 day off on calculating delimiting dates, 
things like that. We had no situations where an individual was 
determined eligible when, in fact, they were not or vice versa. 
So we were 100 percent on eligibility determinations. But that 
is something that we need to continue to keep our eye on and we 
will.
    The other thing that we need to continue to keep our eye on 
is the volume of claims coming in. We projected based on what 
we saw as the highest watermark. If everything were to line up 
perfectly, what is the highest volume of claims that we would 
expect to see in year one. That number ended up being 458,000 
over a year. And based on historical enrollment patterns, that 
would calculate out to about 328,000 in the fall semester.
    What we are seeing now over the summer period will be 
receipt of about 200,000 applications for certificates of 
eligibility. We could see a spike later in the year.
    But we could also be experiencing what could be situations 
where veterans have made a conscious decision that they are 
better off under the program that they are participating in 
right now. For instance, Chapter 30. And they will be waiting 
until later to apply for Chapter 33 benefits. But the workload 
will continue to be an issue that we will look at and match our 
resources accordingly to.
    Mr. Warren. If I could add one thing to that.
    Mr. Boozman. Yes, sir. Sure.
    Mr. Warren. Your question was, what would worry us about 1 
August? As a system provider in terms of the individual who is 
building those systems and making sure the Education Service 
folks have their systems, a legislative change that would 
require implementation for the 1 August date would put 1 August 
out of reach.
    So, again, you are asking what would cause an issue with 1 
August. A change in the requirements, a change in the systems 
this late in the program would put that date at risk. I do not 
know if you wanted to expand.
    Mr. Wilson. Yeah. We have testified to that effect before. 
And Mr. Warren is right in bringing that up again. That is 
something we want to continue to be very careful about.
    Mr. Boozman. Well, again, I know I am speaking for myself, 
but also I think for the Chairman and Ms. Herseth Sandlin and 
the rest of the Committee in the sense that we are totally 
committed to helping any way we can.
    We mentioned the figure of the 75,000, and that being 
under. And my concern is that we are going to have a big--if 
they are like I am, then you tend to put things off to the last 
minute and then a big surge at the end.
    Are we prepared for that? Have we made kind of a 
contingency plan?
    Mr. Wilson. I believe we are prepared for it. There are a 
couple things at play, though, that we just do not have good 
information on.
    One is the volume of current Chapter 30 participants that 
have made the conscious decision that they are better off under 
the program that they are participating in now.
    We do know that there are significant numbers that are 
better off under Chapter 30 based on our understanding. For 
instance, generally speaking, if an individual already has 
other means where their tuition charges are being covered 
separate from their Chapter 30 benefits, they could very well 
be better off where they are at right now.
    Another issue at play is the structure of the Post-9/11 GI 
Bill. Under that structure, individuals who use all of their 
remaining entitlement under Chapter 30, then following that 
entitlement being used can come back in potentially for 12 
additional months of benefits under Post-9/11 GI Bill.
    Based on the discussions, informal though they are, with 
veterans, there is a sizeable number of veterans that are going 
to pursue that approach.
    Having said that, we do have the ability to prioritize our 
work. For individuals, for instance, that come in for 
certificates of eligibility but have not enrolled in school, we 
can put to the front of the line those that have enrolled in 
school.
    Additionally, as I have mentioned, we are already out-
producing the incoming work. We expect that to only continue 
more in the future.
    And in order to continue to apply an abundance of caution 
in our approach, we are authorizing the Regional Processing 
Offices to hire an additional 230 people. We would like to hope 
that they may not be needed, but those additional bodies would 
help with the surge as well as helping with the very labor-
intensive approach that is going to be required and that we are 
learning more and more about as we process the claims.
    Mr. Boozman. One last thing, and we have got to go vote in 
a little bit. But in your answer previously, you mentioned, if 
things were changed, what that meant.
    Will moving children, the National Defense Authorization 
Act (NDAA), as those killed on active duty, into Chapter 33, 
would something like that cause delay in payment or----
    Mr. Wilson. Any change, any legislative change increases 
the risk to August 1st. There is no question about it. We would 
not know the full impact until we could sit down and evaluate 
exactly what the volume of individuals would be. Are there 
going to be different nuances to the manner in which those 
individuals are entitled or paid?
    In terms of order of severity, right now my understanding 
of what is in the NDAA is we are looking at increasing a 
population. We are not changing a calculation. If that were to 
be the case, then that would have less of a potential impact 
than changing a calculation.
    Mr. Boozman. Well, thank you very much. And, again, we do 
appreciate your hard work in implementing this. I know it has 
been a great challenge.
    Thank you, Mr. Chair.
    Mr. Teague. I would like to ask another question quickly, 
if I could.
    Can you explain what has been the concern from California 
schools regarding tuition?
    Mr. Wilson. The concern that comes from California and 
other private schools within States has to do with the 
relationship between public school charges and private school 
charges.
    The structure of the Post-9/11 GI Bill authorizes VA two 
manners in which to pay tuition and fee amounts. On its base, 
it requires VA to pay up to the highest in-State undergraduate 
public tuition in any State, which in practicality means any 
individual that is an undergraduate at a State institution is 
fully covered period regardless of how many courses they take, 
regardless of the charges, et cetera.
    Overlaid on that is the Yellow Ribbon Program, which 
creates a relationship between how much VA can pay schools that 
charge more than the highest in-State public tuition and that 
amount that is charged within the State.
    The amount that is charged within the State varies wildly 
across the country. So there are States where private 
institutions are in essence fully covered because the public 
tuition caps within those States are higher compared to other 
States. And then there is the opposite in which we have States 
such as California that charges a low tuition and fee amount, 
but you have very high or potentially high charging private 
schools within that State.
    So there is a large delta to cover in some States under the 
Yellow Ribbon Program or in other States, there simply is no 
delta at all to cover. So it can be perceived as a disparity.
    Mr. Teague. Okay. Thank you for that answer.
    We are going to have to recess at this time so that myself 
and Ranking Member Boozman can vote. We will be in recess until 
after the vote.
    For the benefit of time that we do not seem to have plenty 
of, we are going to submit the rest of the questions in 
writing. This meeting is adjourned.
    [Whereupon, at 2:20 p.m., the Subcommittee was adjourned.]



                            A P P E N D I X

                              ----------                              

                Prepared Statement of Hon. Harry Teague,
                  Subcommittee on Economic Opportunity

    Today, we will continue with our series of oversight hearings on 
the VA's implementation plans for the Post-9/11 GI Bill. It is 
important that we continue to provide the VA the opportunity to update 
the Subcommittee on their implementation efforts for the short-term and 
long-term solution. This hearing will also give the VA the opportunity 
to ask for Congressional assistance if it is required.
    Since the passage of the Post-9/11 GI Bill, many items of concern 
have been raised about this very complicated program. I can assure our 
panelists that we will continue to seek answers to the implementation, 
but also veteran outreach, university partnerships and other items of 
concern.
    While there was tremendous Congressional support for the passage of 
the Post-9/11 GI Bill, responsibility does not end after a bill is 
signed into law. As our panelists know, this Subcommittee will continue 
to work with the Administration to ensure that our veterans receive 
their education benefit in a timely manner.

                                 
  Prepared Statement of Hon. John Boozman, Ranking Republican Member, 
                  Subcommittee on Economic Opportunity

    Good afternoon everyone.
    Madam Chair, I believe this is our fourth oversight hearing on VA's 
progress toward implementing the new chapter 33 GI Bill. In our 
previous hearings, the department has presented a relatively optimistic 
appraisal of their progress toward meeting the August 1 start date. 
Knowing that things seldom go 100 percent as planned, I guess I would 
feel more comfortable if VA came to us with problems.
    For example, in response to a request from Ranking Member Buyer, 
the VA Inspector General investigated the working relationship between 
VA and the Navy's Space Naval Warfare Systems Center. As a result, the 
IG has released a report titled, Review of the Interagency Agreement 
Between VA and the Navy Space Naval Warfare Systems Center (SPAWAR) 
that to put it mildly, was highly critical of that relationship. In 
general, the report found serious problems with compliance with the 
interagency agreement by both agencies, poor administration of the 
agreement in terms of how taskings were tracked, a lack of cost 
controls to the point where VA was unaware of the number and type of 
personnel being funded through the interagency agreement, and a wide 
variety of other deficiencies that suggest a serious lack of oversight 
by VA. While the report contained only a smattering of information 
specific to the chapter 33 tasks in the Interagency Agreement, the 
overall findings in the report does not inspire confidence in the 
partnership's ability to implement the long-term solution for the 
chapter 33 program. Madam Chair, I ask unanimous consent that the VA 
IG's report 09-01213-142 be entered into the record of today's 
proceedings.
    The question before us today is will VA start paying in August and 
I believe they will and I also believe there will inevitably be issues 
that none of us have anticipated. But I am less sure about the long-
term solution and I hope we will take a look at that as soon as our 
schedule permits. Given the tenor of the IG report as well as 
acquisition and program management issues that have been brought before 
the Subcommittee, I believe VA has serious challenges in meeting the 
long-term strategy.

    I would also note the June 19 press release that announced,

        ``The Department of Veterans Affairs (VA) has announced. . . . 
        a new IT management approach department-wide . . . new IT 
        programs and projects at VA must be implemented using the 
        Project Management Accountability System (PMAS). PMAS is an 
        incremental development approach . . . with a rigorous 
        management approach that halts programs that fail to meet 
        delivery milestones . . . [that] will ensure early 
        identification and correction of failing IT programs. An 
        analysis of 282 ongoing development programs at VA has 
        indicated that many of those programs exhibit at least one 
        characteristic that could indicate a failing program; either 
        significantly behind schedule, significantly over budget, or 
        showing deteriorating product release quality.'' I applaud 
        Secretary Shinseki's initiative and look forward to VA 
        instituting a highly structured and disciplined approach to 
        project management.

    Madam Chair, I know that Mr. Wilson and his staff are working hard 
to get the program up and running. The new GI Bill is very complex and 
will be a challenge to administer for at least the next couple years 
until we get the bugs worked out and I invite the department to help us 
move in that direction. Finally, I want to compliment Mr. Wilson's 
staff for the hard work they have done to make the new GI Bill a 
reality. So, I look forward to hearing from our witnesses today and 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) on-
going efforts and strategy for implementation of the Post-9/11 GI Bill 
(Chapter 33 of Title 38, United States Code). Accompanying me today is 
Mr. Stephen Warren, Principal Deputy Assistant Secretary for the VA 
Office of Information and Technology (OI&T), and Mark Krause, SPAWAR's 
VA Program Manager.
    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, and the progress that has been made to date, as 
requested by the Subcommittee.

Short Term Strategy
    Our short-term strategy to implement the Post-9/11 GI Bill consists 
of a two-part IT solution; a ``Back End Tool'' fiscal payment system 
which uses the existing Benefits Delivery Network (BDN) to issue 
payments, and a ``Front-End Tool'' for use by Education claims 
examiners to augment the manual processing of education claims.
    We are using internal IT staff to build the needed payment 
processing and delivery mechanisms within the fiscal payment system of 
BDN. This functionality will allow for the entry of all payment types 
to include recurring payments (housing allowance), audit trail 
capability, and the ability to generate reports that will meet our 
finance and budgetary requirements.
    The Post-9/11 GI Bill Front-End Tool (FET) will augment the manual 
process by providing additional automated support that is accessible by 
claims examiners in each Regional Processing Office (RPO), and VA 
Central Office. This automated tool will provide functionality that is 
not included in the BDN fiscal payment solution. The FET and associated 
calculation tools are intended to support the calculation of payments, 
track the use of entitlement, store the claimant's education award 
history, and provide basic statistical reports. The FET will be the 
primary tool used by claims examiners in preparing and processing 
education awards. The Post-9/11 GI Bill Back End Tool (BET) will modify 
VA's Benefits Delivery Network (BDN) to allow for recurring payments to 
individuals.
    OI&T is delivering the functionality of the FET in three phases, 
based on VA priorities and the capabilities and resources available 
from OI&T. Phase 1, which includes the capability to accept 
applications and manually store eligibility and entitlement 
information, was successfully deployed on March 9, 2009. Phase 2 will 
add specific data elements for processing claims under the Transfer of 
Entitlement provision of the law, provide the capability to perform the 
payment calculations for school enrollment periods, and contain 
additional field validations. Phase 2 coincides with the planned 
production availability of the BDN fiscal payment system, i.e., the 
BET.
    The BET of the short-term solution allows for input of multiple 
fiscal transactions to pay tuition and fees and Yellow Ribbon Program 
payments to schools, as well as recurring housing allowance payments, 
books and supplies stipends, and various other Post-9/11 GI Bill 
payments to students.
    Teams of subject matter experts conducted User Acceptance Testing 
of the FET, BET, and the associated calculation tools from May 4, 2009, 
through June 19, 2009. The functionality for Phase 2 is scheduled to be 
delivered on July 7, 2009.
    Phase 3 will add the capability to perform calculations for 
aggregating periods of active duty service and determining entitlement 
amounts and benefit level. Currently, the claims examiners use a 
calculation tool to perform these calculations. Phase 3 of the FET is 
expected to be operationally ready in September 2009.
    It is important to remember that this IT approach is an interim 
solution that we expect to retire by December 2010, when the new long-
term replacement system is fully deployed in cooperation with our 
partners at SPAWAR.

Long-Term Strategy
    Our long-term strategy to support delivery of Post-9/11 GI Bill 
education benefits relies on a partnership with SPAWAR Systems Center--
Atlantic to design, develop, and deploy an end-to-end solution that 
utilizes rules-based, industry-standard technologies. The Post-9/11 GI 
Bill contains eligibility rules and benefit determinations that will 
work well with rules-based technology to reduce the need for human 
intervention. VA is currently working with SPAWAR--Atlantic on the 
long-term IT solution, and expects the deployment of this program to be 
completed no later than December 2010. In accordance with VA's new IT 
management approach announced June 19, 2009, VA's Office of Information 
and Technology will continue its practice of incremental development 
and strict management of milestones to ensure that we successfully 
deliver the functionality needed to serve our Veterans. New 
functionality will be delivered in increments of no more than 6 months.

Applications for Post-9/11 GI Bill Education Benefits
    On May 1, 2009, VA started accepting applications to determine 
eligibility for the Post-9/11 GI Bill. We have received more than 
75,000 applications, and the RPOs have fully processed approximately 
35,000 of these claims. On July 6, 2009, we will start accepting 
enrollment certifications from school certifying officials for Post-9/
11 GI Bill claims and begin processing claims for payment. The first 
payments will be released by the U.S. Treasury Department on August 3, 
2009.

Hiring at the Regional Processing Offices
    Approximately 530 claims examiners have been hired under term 
appointments to support the implementation of the short-term strategy. 
All employees completed training on Phase 1 of the short-term solution 
on June 15, 2009. Phase 2 training started on June 8, 2009, and is 
expected to be complete no later than July 3, 2009.
    VA authorized the RPOs to hire 230 additional claims examiners. All 
of the employees are expected to be on board by August 31, 2009.

Project Review and Milestones
    To meet the effective date of August 1, 2009, VA has assigned 
project oversight duties, established milestones, and instituted 
frequent oversight reviews.
    VA Education Service established a Program Executive Office (PEO) 
to manage the development of the overall process for administering the 
Post-9/11 GI Bill. This office 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., a Federally 
funded research and development center, as well as SPAWAR, to develop 
the long-term IT solution and associated business processes.
    VA met two critical milestones in November 2008, completing 
development of the business requirements and IT functional requirements 
for the short-term payment solution. The next critical milestone for 
the short-term solution was completion of the Phase 3 requirements. 
These requirements were finalized on June 18, 2009.

Outreach
    VA mailed approximately 2 million letters to Veterans to inform 
them of the benefits under the Post-9/11 GI Bill. We are also working 
with the Department of Defense to inform service Members about Post-9/
11 GI Bill education benefits. For example, we sent a letter to all 
service Members prior to the May 1, 2009, application acceptance date. 
This letter informed service Members how to apply for the benefit and 
where to go for more information.
    One of the main resources available is the VA GI Bill Web site. VA 
is currently redesigning this valuable resource to improve its 
functionality, navigation, and content delivery. We anticipate the 
revised Web site will be available in July 2009. Additionally, we 
developed a Post-9/11 GI Bill Facebook page that contains useful links 
and information to better reach the demographic population that the 
Post-9/11 GI Bill is likely to serve. We also plan to contract with a 
marketing firm to conduct an integrated national marketing campaign.
    To better inform institutions of higher learning (IHLs), VA 
attended over 30 conferences on the Post-9/11 GI Bill, and plans to 
attend several more before August 1, 2009.

Yellow Ribbon GI Bill Education Enhancement Program
    The Yellow Ribbon Program established by the Post-9/11 Veterans 
Educational Assistance Act of 2008 created a matching contribution 
program between VA and IHLs to assist eligible Veterans in covering 
tuition expenses that exceed the highest public in-state undergraduate 
tuition rate. Schools may enter into an agreement with VA to cover up 
to 50 percent of the additional tuition that the Post-9/11 GI Bill 
would not otherwise cover, with a match of up to 50 percent from VA. 
Regulations and guidelines have been established for schools to follow, 
and their participation has been solicited via surveys, e-mail, press 
releases, and web-site postings.
    VA sent a letter to approximately 6,000 IHLs on June 3, 2009, 
thanking those institutions who decided to enroll in the Yellow Ribbon 
Program, and asking those who have not enrolled to consider 
participating. The letter also provided contact information for 
questions regarding the Yellow Ribbon Program and an overview of the 
benefits provided under the Post-9/11 GI Bill and the Yellow Ribbon 
Program. VA approved approximately 2,229 Yellow Ribbon Program 
agreements. All agreements were due on June 15, 2009, and a list of 
participating institutions can be found on our Web site at 
www.gibill.va.gov. We are also utilizing the State Approving Agencies 
to determine the highest in-state tuition and fees for the 2009-2010 
academic year. We anticipate posting the updated tuition and fee rates 
on our Web site by August 1, 2009.
    Madam Chairwoman, this concludes my statement. I would be pleased 
to answer any questions you or any of the other Members of the 
Subcommittee may have.

                               __________
                     [Text Version of Presentation]
                    Post-9/11 GI Bill Implementation
                               June 2009
         U.S. Department of Veterans Affairs, Education Service
                             Washington, DC
                               __________
                                 Agenda
      Yellow Ribbon Program

      Chapter 33 Productivity

      Chapter 33 Hiring and Training

      Chapter 33 Implementation

      Key Milestones

      Long Term Solution
               Yellow Ribbon Program: Agreements by State
[GRAPHIC] [TIFF OMITTED] T1871A.001


                     Yellow Ribbon Program: Summary
      Over 3,000 agreements expected *--final list will be 
compiled by 6/30/09

      50 States represented

      Contribution amounts range from $50 to $34,260 per 
student

      Approximately 88% of agreements are from private schools

    * NOTE: The number of agreements does not equal the number of 
participating schools--schools may submit multiple agreements for 
multiple academic programs.

                  Post-9/11 GI Bill Claims Processing

[GRAPHIC] [TIFF OMITTED] T1871A.002


                   Additional Staffing and Facilities
      All 530 Term FTE trained on Phase 1

      Hiring of additional 230 Veterans Claims Examiners 
authorized in support of chapter 33

        u  Additional 230 FTE authorized, will be on board by 8/31/09


                                Training
------------------------------------------------------------------------

------------------------------------------------------------------------
New employees                    Initial Training
                                                      Began 2/1/2009
------------------------------------------------------------------------
Existing and new employees       Introductory         Began 7/31/08
                                  Chapter 33
                                 Eligibility and
                                  Entitlement
                                  Training
------------------------------------------------------------------------
                                 Phase 1 procedures   Completed 6/15/09
                                  and
                                 associated systems
------------------------------------------------------------------------
                                 Phase 2 procedures   Began 6/8/09
                                  and
                                 associated systems
------------------------------------------------------------------------
                                 Phase 3 procedures   TBD
                                  and
                                 associated systems
------------------------------------------------------------------------

                    Interim Solution Key Milestones
[GRAPHIC] [TIFF OMITTED] T1871A.003



                           Phase 1 Milestones
------------------------------------------------------------------------
                  Milestone                              Date
------------------------------------------------------------------------
 Established Ch. 33 PEO and            October 30, 2008
 governance structures
------------------------------------------------------------------------
 Finalized Ch. 33 business             December 16, 2008
 requirements
------------------------------------------------------------------------
 Drafted and published proposed        December 23, 2008
 regulations
------------------------------------------------------------------------
 Developed Risk Management Plan and    January 2009
 established Risk Review Board
------------------------------------------------------------------------
 User Acceptance testing completed     February 11, 2009
------------------------------------------------------------------------
 Complete hiring of 530 term           March 1, 2009
 employees
------------------------------------------------------------------------
 Ch. 33 Contingency Plan finalized     March 1, 2009
------------------------------------------------------------------------
 Deploy Interim Solution Phase 1       March 6, 2009
------------------------------------------------------------------------
 Begin Ch. 33 Phase 1 employee         March 6, 2009
 training
------------------------------------------------------------------------



                           Phase 2 Milestones
------------------------------------------------------------------------
                  Milestone                              Date
------------------------------------------------------------------------
 Ch. 33 Phase 2 Requirements locked    January 23, 2009
 down
------------------------------------------------------------------------
 Final regulations published           March 30, 2009
------------------------------------------------------------------------
 Begin accepting applications for      May 1, 2009
 Certificates of Eligibility
------------------------------------------------------------------------
 Solicit schools for Yellow Ribbon     May 15, 2009
 agreements
------------------------------------------------------------------------
 Begin Ch. 33 Phase 2 training         June 1, 2009
------------------------------------------------------------------------
 Full occupancy of new space (4 RPOs)  June 1, 2009
------------------------------------------------------------------------
 Complete Interim Solution Phase 2     June 29, 2009
 testing
------------------------------------------------------------------------
Publish full list of participating Yellow     June 30, 2009
 Ribbon schools on GI Bill Web site
------------------------------------------------------------------------
Begin Accepting Enrollment Certifications     July 6, 2009
 from Schools
------------------------------------------------------------------------
Deploy Interim Solution Phase 2               July 7, 2009
------------------------------------------------------------------------
Begin administering Ch. 33 benefits           August 1, 2009
------------------------------------------------------------------------


                           Phase 3 Milestones
------------------------------------------------------------------------
                  Milestone                              Date
------------------------------------------------------------------------
 Completed clarification of chapter    April 10, 2009
 33 Phase 3 Requirements
------------------------------------------------------------------------
Begin Chapter 33 Phase 3 training             TBD
------------------------------------------------------------------------
Complete Interim Solution Phase 3 testing     September 14, 2009
------------------------------------------------------------------------
Deploy Interim Solution Phase 3               September 17, 2009
------------------------------------------------------------------------

                           Long-Term Solution
    The Chapter 33 long-term solution will deliver an end-to-end 
solution to support the delivery of Post 9/11 GI Bill benefits. The 
long-term solution will be:

      Released in 4-6 month intervals, delivering incremental 
capability

      Developed in a distributed application architecture 
framework

      Supportive of a service oriented architecture

      Developed using an agile methodology

      Rules-based to ensure reusability and flexibility
                 Chapter 33 Interim Solution Complexity

[GRAPHIC] [TIFF OMITTED] T1871A.004


                    Chapter 33 LTS Complexity--REL1

[GRAPHIC] [TIFF OMITTED] T1871A.005


                     Solution Release Functionally

[GRAPHIC] [TIFF OMITTED] T1871A.006


                      Vision Diagram--System View

[GRAPHIC] [TIFF OMITTED] T1871A.007


                Chapter 33 Long Term Solution Milestones

      Iterative development begins--4QFY2009

      Complete solution development environment--1QFY2010

      Solution Release Schedule

          Chapter 33 Long Term Solution Release 1--2QFY2010

          Chapter 33 Long Term Solution Release 2--3QFY2010

          Chapter 33 Long Term Solution Release 3--4QFY2010

          Chapter 33 Long Term Solution Release 4--December 
        2010
                   MATERIAL SUBMITTED FOR THE RECORD

    U.S. Department of Veterans Affairs, Office of Inspector General
 ``Review of Interagency Agreement between the Department of Veterans 
Affairs and Department of Navy, Space Naval and Warfare Systems Center 
                               (SPAWAR)''
                 June 4, 2009, Report No. 09-01213-142
                           Executive Summary
Introduction
    At the request of the Secretary of Veterans Affairs and Ranking 
Minority Member of the House Committee on Veterans' Affairs, we 
conducted a review of the Interagency Agreement (IAA) between the 
Department of Veterans Affairs (VA), Office of Information and 
Technology (OI&T), Office of Enterprise Development (OED), and the 
Space and Naval Warfare Systems Center (SPAWARSYSCEN), hereinafter 
referred to as SPAWAR.
    The IAA was entered into in November 2007, under the authority of 
the Economy Act, 31 U.S.C. Sec. 1535, to provide ``government employee 
and contractor technical support for analysis, planning, program review 
and engineering services for Information Management/Information 
Technology (IM/IT) initiatives.''
    Although the IAA does not include specific requirements or 
deliverables, VA obligated and transferred $2.5 million to SPAWAR when 
the agreement was executed. According to the IAA, this was the total 
estimated funding needed for Fiscal Year 2008. Since the agreement was 
executed in November 2007 funding has increased from $2.5 million to 
$66 million. Twenty-two (22) amendments supporting 30 projects have 
been issued against the IAA. Sixteen (16) of the 22 amendments, 
totaling $25,695,066, were issued in September 2008. Currently, there 
are 26 projects in the pipeline to be issued which will add an 
additional $73 million to the IAA. VA obligates the funds to the IAA at 
the time each amendment is executed. The amount obligated represents 
the amount identified in the Independent Government Cost Estimate 
(IGCE) contained in the accompanying Statements of Work (SOW).

Results
    We found that the IAA was entered into without an adequate analysis 
to determine that the ``use of an interagency acquisition is in the 
best interest of the government'' as required by FAR 17.503. We also 
found that neither VA nor SPAWAR has complied with the terms and 
conditions of the IAA. We found that the SOW and the IGCEs that VA was 
supposed to develop were actually developed by SPAWAR and SPAWAR 
contractors. We also found that the SOW were often broad and general in 
nature and lacked specific deliverables. We also identified amendments 
that were outside the scope of the IAA as well as unauthorized work 
being performed on projects that were not within the scope of the 
amendments.
    Problems with the implementation of the IAA are due to poor 
administration by both OED and SPAWAR. OED was not performing adequate 
oversight to ensure that funds were spent appropriately. For example, 
VA was unaware that SPAWAR contracted out approximately 87 percent of 
the work requested through the IAA. OED could not tell us who was 
performing the work under the IAA, how many people were providing 
services, or where they were located. Although the amendments to the 
IAA indicate that SPAWAR anticipated employing the services of 295 FTE, 
the resource roster prepared by SPAWAR shows that only 217 FTE are 
providing services. Of the 217 FTE, 22 are SPAWAR employees and the 
remaining 195 FTE are working for contractors and subcontractors. The 
IAA does not address the issue of management fees paid to SPAWAR for 
providing services under the IAA and OED was unaware of the fees being 
charged by SPAWAR. Also, SPAWAR was unable to provide justification or 
authority to charge a 10 percent management fee.
    We also attribute problems with the administration of the IAA to 
insufficient technical and legal reviews conducted by the Office of 
Acquisition, Logistics & Construction (OAL&C) and the Office of General 
Counsel (OGC), respectively. These reviews should have identified that 
amendments were outside the scope of the IAA and that the SOW did not 
include specific tasks or deliverables or were inconsistent with the 
corresponding amendment. We concluded that OED has relinquished its 
oversight role of financial performance and work performed under the 
IAA to SPAWAR.
    In addition to problems with VA's failure to properly administer 
the IAA, we also identified deficiencies on the part of SPAWAR. We 
determined that SPAWAR did not ensure that VA paid fair and reasonable 
prices for the services provided. SOW for task orders that SPAWAR 
issued to contractors did not identify specific tasks or deliverables. 
We also found that SPAWAR contractors were subcontracting the work to 
other SPAWAR contractors at the direction of SPAWAR. This practice 
unnecessarily increases the cost because VA must pay an additional 
layer of management fees and overhead. In reviewing contracts that 
SPAWAR issued to vendors performing services under the IAA, we found 
that SPAWAR executed an option year more than 6 months prior to the 
expiration of the contract's base year. Because the option year prices 
were higher, VA unnecessarily incurred higher costs for the work 
performed by this contractor.
    Neither the IAA nor any of the task orders issued by SPAWAR to its 
contractors that we reviewed contain the VA required system security 
and privacy requirement clauses for: Information Security, Cyber 
Security, and Privacy Policy. Absence of these requirements places VA 
systems and information at risk by SPAWAR and its contractors.
    In addition, an amendment that required SPAWAR to purchase IT 
equipment and software contained a provision requiring SPAWAR to comply 
with OI&T established policy requiring the use of NASA SEWP IV 
contracts for all IT acquisitions and that waivers must be requested 
and approved through the IT Tracker approval process. Amendment 20 to 
the IAA struck the requirement that SPAWAR use the SEWP contract. 
However, no one in VA was able to provide any documentation that a 
waiver was processed.

Suggestions
    We suggest that VA take steps to re-evaluate the IAA and determine 
whether it is in the best interests of VA to continue obtaining 
services through this type of agreement. If it is determined to be in 
VA's interest to continue with an IAA to obtain services to support 
OED, we suggest issuing a new IAA that complies with the requirements 
of Information Letter (IL) 001AL-09-04, dated March 23, 2009. The IL 
establishes VA policy for Managing Interagency Acquisitions, and 
incorporates requirements contained in guidance issued by the Office of 
Federal Procurement Policy in a Memorandum dated June 6, 2008, titled 
``Improving the Management and Use of Interagency Acquisitions.''

    We also suggest that:

      The restructured IAA should emphasize training of VA 
personnel to better manage OED programs and operations and to learn to 
develop SOW and monitor contractor performance. It should also require 
VA personnel to actively participate in the development, award, and 
administration of contracts to third parties to provide services under 
the IAA.

      OAL&C contracting officers and OGC need to implement 
processes to improve their technical and legal reviews of the IAA, 
amendments or modifications thereto, and the SOW.

      VA should be required to prepare the SOW with specific 
tasks, deliverables, defined delivery dates, and performance measures.

      OED should be required to develop IGCEs as a method of 
determining the reasonableness of proposed cost estimates. The IGCEs 
should identify labor hours and labor categories by task. OED in 
conjunction with OAL&C should determine, on a task basis, whether it is 
in VA's best interest to enter into firm fixed-price contracts with 
third parties versus cost-reimbursement or time and materials 
contracts.

      OED should require SPAWAR, or any other government entity 
that is party to an IAA, to provide financial reports that identify the 
hours worked by labor category and task, and indicate whether the 
employee is a government or contract employee.

      All amendments and SOW should identify VA program 
managers who are actually performing those duties and responsibilities, 
and are accountable for the outcomes.

      VA should establish policies and procedures for program 
managers to certify that they have reviewed monthly SPAWAR financial 
documents and progress reports and have concurred with them.

      VA should establish a single point of contact within OED 
to warehouse all documents and deliverables required under the IAA and 
amendments. In addition, all VA program managers and project officers 
should be required to maintain all documents provided by SPAWAR under 
the IAA and amendments.

      Costs associated with Program Management Support provided 
by SPAWAR should be proposed and reported under a separate amendment.

      VA should cease issuing amendments with multiple 
unrelated projects and multiple amendments for the same project/work. 
Previously issued amendments can be modified to add additional tasks, 
and such tasks can be tracked and reported by SPAWAR.

(original signed by:)

                                                 MICHAEL GRIVNOVICS
                                               Director, Division B
                                          Office of Contract Review

[Copies of the full report can be obtained from http://www.va.gov/oig/
52/reports/2009/VAOIG-09-01213-142.pdf.]

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                      June 29, 2009

Mr. Keith Wilson
Director
Office of Education Service
Veterans Benefits Administration
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Mr. Wilson:

    I would like to request your response to the enclosed deliverables 
I am submitting in reference to our House Committee on Veterans' 
Affairs Subcommittee on Economic Opportunity Hearing on Subcommittee on 
Economic Opportunity ``Post-9/11 GI Bill: Is the VA Ready for August 
1st?'' on June 25, 2009. Please answer the enclosed hearing questions 
by no later than Monday, July 10, 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 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
          The Honorable Stephanie Herseth Sandlin, Chairwoman
                  Subcommittee on Economic Opportunity
                  House Committee on Veterans' Affairs
                             June 25, 2009
           Post-9/11 GI Bill: Is the VA Ready for August 1st?
Outreach
    Question 1: What have been the main concerns from university 
officials as we near the August 1st deadline?

    Response: The feedback the Department of Veterans Affairs (VA) 
received from school officials focuses on the impact the Post-9/11 GI 
Bill might have on scholarships, State tuition assistance, and Federal 
grants. This includes the potential impact on scholarship disbursements 
to individuals who also receive a tuition and fee payment under the 
Post-9/11 GI Bill. Recent legislation exempts all VA education benefits 
from consideration when determining title IV aid. Officials are 
concerned about financial awards above the cost of attendance in light 
of the generous Post-9/11 GI Bill benefits.

    Question 2: When is the best time for universities to send a 
veteran's bill to the VA? How concerned should universities be about 
veterans adding/dropping classes for proper billing purposes?

    Response: VA began accepting enrollment certifications for the 
Post-9/11 GI Bill from institutions of higher learning (IHL) on July 6, 
2009. IHLs should submit enrollment certifications when its State has 
determined its maximum tuition and fee charges for the 2009/2010 
academic year.
    Since VA's current enrollment adjustment process will not change 
under the Post-9/11 GI Bill, IHLs should see little impact on its 
billing procedures. VA will handle a change in enrollment under the 
Post-9/11 GI Bill in the same manner as the other VA education 
programs.

    Question 3: What role do you expect the State Approving Agencies to 
play with the new GI Bill?

    Response: State approving agencies (SAA) will continue to support 
VA by performing necessary duties for the inspection, approval, and 
supervision of courses, programs, and tests pursued by Veterans and 
eligible persons under all education benefit programs, including the 
Post-9/11 GI Bill. SAAs will also assist VA in training school 
certifying officials and will expand their outreach activities to 
include information on the Post-9/11 GI Bill. VA recently asked the 
SAAs to verify its States' highest in-State public school tuition and 
fee rates for the 2009/2010 academic year to support the Post9/11 GI 
Bill.

    Question 4: How often do you brief Senators and their staff about 
your progress and problems with the new GI Bill?

    Response: The Education Service Director meets monthly with staff 
Members of the House and Senate Committees on Veterans' Affairs. These 
meetings typically involve briefing the Committee on implementation of 
the Post-9/11 GI Bill. In addition in April 2009, VA hosted an open 
forum for Members of Congress about the Post-9/11 GI Bill.

    Question 5: You state that you have received 75,000 applications 
for the new GI Bill. Is this higher or lower than expected?

    Response: VA projected receiving as many as 328,000 Post-9/11 GI 
Bill applications for the fall semester. As of September 1, 2009, we 
have received over 227,000 applications and over 21,000 enrollment 
certifications for the Post-9/11 GI Bill.
IT Strategy

    Question 6: How much money has been spent so far on the short-term 
solution?

    Response: As of September 1, 2009, the Office of Information and 
Technology (OIT) has outlaid $8.1M on the short-term solution.

    Question 7: How many people have been migrated from the short-term 
solution to work on the long-term solution?

    Response: OIT Program Management Office (PMO) is an integrated team 
involved in both the short-term solution as well as being heavily 
engaged in the long-term solution (LTS) strategy and requirements. The 
main focus to date has been on the short-term solution. The focus will 
gradually transfer to the LTS as components of the short-term solution 
are deployed. Therefore, no staff Members have migrated from the short-
term solution to LTS.

    Question 8: Do you expect to stay within budget for the long-term 
solution?

    Response: Yes, VA expects to stay within budget for the long-terms 
solution. System development costs for the short-term solution and the 
Space and Naval Warfare Systems Command (SPAWAR) part of the LTS are 
covered under the Chapter 33 Supplemental fund and the American 
Recovery and Reinvestment Act of 2009 fund. The cost for interfaces so 
that the LTS will correspond with existing VA systems is under 
development as part of the fiscal year (FY) 2010 execution plan and 
will be tracked accordingly. VA anticipates some emergent requirements 
will surface and is identifying topics and estimated costs for these 
requirements. VA processes will be followed to identify funding within 
existing VA appropriations.

    Question 9: What percentage of SPAWAR personnel are contractors?

    Response: As of September 1, 2009, staffing for the Post-9/11 GI 
Bill LTS consists of 27 Federal government employees and 113 
contractors. Contractors represent approximately 80 percent of the 
team.

    Question 10: What percentage of work is being done by SPAWAR and 
what percentage is being done by contractors on the long-term solution?

    Response: One hundred percent of the Post-9/11 GI Bill LTS work is 
being accomplished by an integrated team of SPAWARSYSCEN employees and 
contractors. Contract personnel comprise approximately 80 percent of 
the team. SPAWARSYSCEN is the lead system integrator responsible to VA 
for providing the inherently governmental elements of a program to 
include: program management; systems engineering; and fiscal 
accountability for the Post-9/11 GI Bill LTS. SPAWARSYSCEN supplements 
VA personnel with industry leading experts in the various disciplines 
required to execute the program. Via performance-based contracting, the 
Post-9/11 GI Bill LTS team is composed of approximately 80 percent 
contract personnel.

    Question 11: Do you expect to have all your systems ready on August 
1st for the short-term solution?

    Response: All systems scheduled for completion were implemented by 
the August 1, 2009, deadline. Phase 3 of the front-end tool (FET) is 
scheduled to be released on November 9, 2009.

    Question 12: In your testimony you state that new functionality 
will be delivered in increments of no more than 6 months. What does 
that mean?

    Response: The incremental delivery of the Post-9/11 GI Bill LTS 
will support reusable functionality and flexibility of the system 
inline with the program management accountability system (PMAS), which 
has a 6-month incremental delivery requirement. The Post-9/11 GI Bill 
has been planned from its inception using iterative development with 
incremental releases. The program has been run in full collaboration 
with the business unit.

    Question 13: You expect Phase 3 of the front-end tool to be ready 
in September 2009. Will this affect your ability to deliver benefits?

    Response: Phase 3 of the interim solution was to be released 
September 17, 2009. Due to unforeseen requirements and complexity, the 
September completion date was delayed and will be released on November 
9, 2009. Phase 3 of the FET will not affect VA's ability to deliver 
benefits. Phase 3 of the FET will enhance the functionality of the 
current solution, supporting the process of amended awards.

    Question 14: According to your written testimony the VA announced a 
new IT management approach on June 19, 2009. Can you elaborate on this 
new approach?

    Response: OIT's new management approach, PMAS, has been implemented 
to address recent project issues. PMAS will better empower OIT's 
project managers and teams to meet their mission. Projects can count on 
more leadership oversight and support, which will provide better 
insight into resource issues and potential implementation obstacles. 
Upon mandating PMAS, VA will pause projects meeting specific failure 
indicators. The program plans will then be re-planned for incremental 
release. Within 1 year, all VA IT programs and projects will be PMAS 
compliant. Using this new management approach, all projects will be 
managed rigorously to schedule. Projects will be halted on its third 
missed customer delivery milestone. Once halted, substantial changes 
must be made before the project can restart, including the assessment 
of priority, approach, commitment, resources, and design. The revised 
program plan must be approved by the Assistant Secretary for IT before 
the project can move forward.
    PMAS offers a multitude of benefits to VA, including: the 
elimination of significant program/project failures, near term 
visibility into troubled programs to avoid long term failures, access 
to early assistance, and increased insight into scarce resources. 
Frequent deliveries of functionality will ensure the project is on 
track and fulfilling business objectives. Ultimately, the goal of PMAS 
is to enable the success of all OIT initiatives.
    The Post-9/11 GI Bill was planned using iterative development with 
incremental releases and is therefore fully PMAS-compliant.

    Question 15: How certain are you that the long-term system will be 
fully deployed by SPAWAR on December 2010?

    Response: The LTS will deliver an end-to-end solution to support 
the delivery of Post 9/11 GI Bill benefits. The LTS will be released in 
4-6 month intervals in order to deliver incremental capability and 
developed in a distributed application architecture framework using an 
agile methodology.
    Based on the current requirements provided by Veterans Benefits 
Administration (VBA), OIT is very confident that the LTS will be fully 
deployed by December 2010. It is important to note that changes to 
legislation or discovery of unstated requirements would result in 
amending the schedule beyond December 2010.

    Question 16(a): During the Hearing on June 25, 2009, Mark Krause 
indicated that the VA and SPAWAR is leasing and buying equipment for 
the use of the IT long-term plan. Why is there a need to lease 
equipment?

    Response: On June 25, Mark Krause testified the LTS team was 
``thinking of'' using leased facilities and leasing options. The LTS 
project manager (PM) has decided to purchase hosting services from a 
commercial data center/hosting facility to support a development and 
test environment for the LTS.

    Question 16(b): How much equipment has been bought and how much 
equipment is being leased?

    Response: As a result of the decision to purchase commercial 
hosting services, no equipment has been or will be leased for the Post-
/11 GI Bill LTS.

    Question 16(c): From what companies are you leasing the equipment? 
Please provide a list.

    Response: Post-9/11 GI Bill LTS will not be leasing equipment.

    Question 16(d): Where is the purchased equipment and leased 
equipment located?

    Response: To date, approximately, $1.424M of IT infrastructure 
equipment and laptops have been purchased for Post-9/11 GI Bill LTS. 
The purchased equipment resides at New Orleans, Charleston, Norfolk, 
and Washington, DC, where Post-9/11 GI Bill LTS work is being 
conducted.

    Question 16(e): Will they remain there permanently?

    Response: The planning for where and how Post-9/11 GI Bill LTS will 
host and support is still underway. The long term plan is to migrate 
the Post-9/11 GI Bill LTS back to a VA data center a few years after 
full operational capability is achieved.
California ``Tuition'' and ``Fees''

    Question 17: Who does the California tuition problem affect?

    Response: Unlike other States, California residents were not 
charged ``tuition'' when attending public institutions until recently. 
They were charged various fees instead. In other States, resident 
students are charged for both tuition and various fees. The problem 
potentially affected only students attending private schools, students 
in graduate programs, and students charged out-of-State tuition.
    A recent change in the way California charges tuition and fees 
resolved the problem. California established one of its fees as an 
``educational/tuition fee.'' The ``educational/tuition fee'' equates to 
$287 per credit hour. As this fee is for tuition, VA will determine 
Post-9/11 GI Bill payments for students in private schools, graduate 
programs, or students charged out-of-State tuition based on the maximum 
credit hour charge of $287.

    Question 18: If California universities were to align their cost of 
attendance to the rest of the State from ``tuition'' to ``fees,'' would 
it present a problem to VA?

    Response: California recently changed its billing procedures. A 
maximum of $287 per credit hour is now charged for an ``educational/
tuition fee'' with a maximum for other fees of $2,165.25. VA accepts 
California's ``education/tuition fee'' as tuition for purposes of 
determining payment under the Post-9/11 GI Bill. Thus, the initial 
problem has been resolved.

    Question 19: There is much concern that California students will 
get no tuition money. Can you assure this Subcommittee that all 
veterans attending public institutions will be covered?

    Response: All students eligible for the Post-9/11 GI Bill who 
enrolled in an undergraduate program in California at a public 
institution were fully covered. Although California resident students 
will now be charged an ``educational/tuition fee,'' these students will 
remain fully covered by the Post-9/11 GI Bill.
Miscellaneous

    Question 20: In total you will be hiring 760 claim examiners. Will 
that be enough to process claims or will you need more claim examiners?

    Response: The hiring of term Veterans claim examiners to process 
Post-9/11 Gl Bill claims is part of VA's short-term solution. These are 
temporary measures being taken until OIT's LTS is available. The LTS 
will introduce applications that are rules based and require less 
manual processing. There are 1,113 claims examiners assigned to the 4 
regional processing offices. Of those, 736 are term employees--534 were 
hired with funds from the Supplemental Appropriations Act of 2008 and 
202 were hired with funds from the American Recovery and Reinvestment 
Act of 2009. Based on the current IT systems and the expected delivery 
dates of additional functionality, VA believes the additional 760 
claims examiners, 736 of whom have already been hired, are enough to 
handle the workload.

    Question 21: According to your testimony, the VA instituted 
frequent oversight reviews. What type of oversight review have you 
conducted?

    Response: VA has conducted two quality reviews of eligibility and 
entitlement determinations for cases processed since May 2009. 
Preliminary findings show an accuracy rate above 90 percent among all 
regional processing offices. Post-9/11 GI Bill payments begin August 1, 
2009; therefore, regularly scheduled quality reviews on payment 
accuracy will begin in the fall of 2009.
    VA conducts routine compliance surveys to ensure that schools and 
training establishments are in compliance with all applicable 
provisions of the laws administered by VA. In addition, SAAs approve 
programs of education and training on behalf of VA, supervise approved 
schools and job training establishments, and furnish other services as 
requested by VA to ensure compliance with the requirements of the law.
    The Post-9/11 GI Bill IT solution underwent an extensive review 
associated with OIT's transformation-21 initiative, which included 
analysis of eight key program attributes. In addition, the Post-9/11 GI 
Bill IT solution integrated project team (IPT) meets weekly to conduct 
a review and status of the initiative. These IPT reviews include 
participants from development, infrastructure, engineering, and VBA.
    VA maintains frequent oversight of the SPAWAR contribution to the 
Post-9/11 GI Bill initiative through daily conference calls and 
multiple weekly meetings concerning requirements, architecture, and 
software development.

    Question 22: Between now and August 1st what item(s) could 
potentially stall implementation of the GI Bill?

    Response: VA implemented the Post-9/11 GI Bill on August 1, 2009, 
on schedule.

    Question 23: The Committee has been made aware that a test of the 
payment system revealed some issues that may threaten the timely 
payment of the living stipend and tuition and fees. What is the status 
of the short term IT work needed to process payments?

    Response: Payment processing for tuition and fees has been 
successfully installed. Testing of the recurring monthly housing 
payment for the short-term solution has been successfully completed. 
VBA reviewed and validated test versions of the electronic funds 
transfer (EFT) and check payment files for the recurring housing 
payments. Those files were sent to the Department of Treasury and are 
completely certified. On August 21, VBA executed the recurring housing 
payments in a production environment and produce monthly payments.

    Question 24: Please detail what services and staffing SPAWAR will 
provide for all Chapter 33-related amendments to the VA-SPAWAR 
interagency agreement.

    Response: SPAWARSYSCEN is a Level III complaint CMMI system 
engineering center. CMMI Level III certification requires 
implementation of standard processes, procedures and data compilation 
to properly manage and document projects/programs. SPAWARSYSCEN will 
provide for all Post-9/11 GI Bill LTS related amendments to include: 
project management, VA's PMO support, governance establishment, 
engineering support, infrastructure development and management, 
information assurance, configuration management, requirement and 
release management, data integration, application development, testing, 
training and operations.

    Question 25: Please provide an organization chart for the 
development project for the long term software solution for Chapter 33. 
In addition, I ask that you include the qualification of the program 
manager(s) at VA and SPAWAR to include a list and dollar value of all 
the programs they have managed.

    Response: An organization chart depicting key program personnel is 
enclosed. The VA and SPAWAR program managers and their qualifications 
are listed below.

[GRAPHIC] [TIFF OMITTED] T1871A.008


    Mr. Don Oswalt, SPAWARSYSCEN Health Service Director, has 17 years 
direct IT experience (design, installations, strategic planning, 
enterprise architecture, sustainment, network operations centers, 
network security centers, information assurance, wireless, servers, 
hosting/data centers, software, program/project management, earned 
value management, metrics, planning, programming, and budgeting). 
Previous programs with estimated dollar values:

    1.  Health systems program director/mission area team chair ($300M)
    2.  Military health systems program manager ($100M)
    3.  Tri-service infrastructure program office (TIMPO) program 
manager ($60M)
    4.  TIMPO information assurance project manager ($10M)
    5.  NAVAIR network protection manager ($8M)
    6.  IRS network assessment scans ($1M)
    7.  DMS firewall manager ($800K)
    8.  Project engineer network protection site installations ($1.5M)

    Mr. Mark Krause, SPAWAR VA Program Manager, provides program 
management oversight to VA Project Manager (PM) and LTS team, he has a 
Masters of Science IT management degree from the Naval postgraduate 
school, a Bachelor of Science (BS) in operation system analysis/applied 
math from the U.S. Naval Academy, and a Master of Arts in educational 
administration from the University of North Florida. He is a certified 
information systems security professional, Department of Defense 
certified chief information officer (CIO)--National Defense University 
and holds defense acquisition workforce improvement act (DAWIA) PM 
level III. Previous programs with estimated dollar value:

    1.  Commanding officer, SPAWAR systems center (SSC) New Orleans 
($90M annually)
    2.  Chief information officer Navy Reserve, directed IT support for 
88,000 member organization ($3.2B annually)
    3.  Chief technology officer Navy Reserve Forces Command, managed 
Navy Reserve IT programs ($100M)
    4.  Directed the implementation of Navy Marine Corps intranet for 
Navy Reserve ($85M)
    5.  IT director for Navy Air Logistics Office, managed joint air 
logistics program ($10M)

    Ms. Lucy Colangione, the SPAWARSYSCEN Post-9/11 GI Bill LTS Program 
Manager, is DAWIA Level III certified in system planning and DAWIA 
Level I certified in project management. She also has extensive 
experience in research development and system engineering as well as 
production and manufacturing management. She has a BS in electrical 
engineering from Mississippi State University and is working on a 
Master's in PM, and is PM certified by the Keller Graduate School. 
Previous programs with estimated dollar values include:

     1.  VA benefits delivery network mapping ($1.2M)
     2.  Securing 2800 unsecure Navy (N1) pay and personnel legacy 
application data interfaces ($1.3M)
     3.  Chief engineer reconstruction of SPAWAR SSC New Orleans after 
Hurricane Katrina ($30M)
     4.  Director of security/chief security officer SPAWARSYSCEN New 
Orleans ($113M FY 2006)
     5.  Senior systems architecture/security engineer for Navy 
standard integrated personnel system (NSIPS) ($248M)
     6.  Senior systems engineer for Lockheed Martin on the NSIPS 
program ($248M)
     7.  Senior quality assurance engineer for APOGEN Inc. on Defense 
integrated military human resource system ($1B)
     8.  Procurement quality engineering manager for TYCO Health Care 
Systems ($95M)
     9.  Procurement quality assurance engineer for ST Microelectronics 
($150M)
    10.  Process control electrical engineer for Motorola Wafer Power 
Fabrication Plant ($70M)
    11.  Electronics engineer for U.S. Geological Survey, Water 
Resources Division ($12.5M)

    Question 26: Please itemize the actions the VA is taking to address 
the problems cited in the Office of Inspector General investigation 
report of the Interagency Agreement with SPAWAR?

    Response: VA has taken and is taking a number of steps to improve 
and provide more rigorous oversight of all processes and organizational 
entities in accordance with the newly issued Office of Federal 
Procurement Policy guidance. By implementing these policies, VA 
continues to work to address the issues cited by OIG with the SPAWAR 
IA. VA has:

      Established a consolidated, secure repository for storing 
all administrative documentation;
      Strengthened the statement of work format for increased 
specificity;
      Strengthened independent government cost estimate to 
increase specificity for labor, travel, materials;
      Ensured efforts to strengthen the knowledge, skills, and 
abilities of the VA staff;
      Initiated the use of performance work statements to 
improve specificity and better manage outcomes of relationship with 
SPAWAR;
      Revised monthly financial reports to break down financial 
analysis by amendment to facilitate PM review and approval;
      Implemented certificate of compliance and acceptance of 
deliverables to record receipt, inspection and acceptance of 
deliverables and certification of compliance with contractual 
specifications; and
      Reviewed the scope of all amendments for separation of 
unrelated requirements.

    Question 27: Does the VA intend to submit draft legislation to 
amend Chapter 33 and if so, when can we expect to receive the draft 
legislation?

    Response: VA currently is working on legislative proposals for 
changes and technical amendments to the Post-9/11 GI Bill for potential 
submission in future budget cycles.

    Question 28: Will the long term solution be directly integrated 
with VETSNET or since VETSNET is comprised of nearly 20 year old 
technologies, will the long term solution provide the basis for a 
replacement for VETSNET?

    Response: The LTS is not intended to be a replacement for VETSNET. 
At this time it is not known whether the LTS will interface with 
VETSNET. One of the reasons we are using service oriented architecture 
with the LTS is to eliminate dependencies on a specific system.

    Question 29: If the VA determines it will be necessary to extend 
the contracts of the term employees, what event will trigger that 
decision and what will be the cost estimate?

    Response: VA hired term employees under a 13-month authority that 
can be extended up to 4 years. After 13 months, VBA can retain the term 
employees on a month-to-month basis if necessary up to a total of 2 
years. Term employees are part of the VBA's short-term solution until 
OIT's LTS is available. VBA will base the decision to retain term 
employees on system functionality within the LTS. The cost to extend 
term employees will depend on the number of employees retained and the 
additional time they remain with VBA. However, VA does not anticipate 
the need to extend these contracts, since we expect to have the LTS up 
and running on schedule.

                                 
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