[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
                 INSPECT WHAT YOU EXPECT: CONSTRUCTION 
                      CONTRACTING PRACTICES AT THE 
                  U.S. DEPARTMENT OF VETERANS AFFAIRS 

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

                                HEARING

                               before the

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                                 of the

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

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 13, 2011

                               __________

                            Serial No. 112-8

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman

CLIFF STEARNS, Florida               BOB FILNER, California, Ranking
DOUG LAMBORN, Colorado               CORRINE BROWN, Florida
GUS M. BILIRAKIS, Florida            SILVESTRE REYES, Texas
DAVID P. ROE, Tennessee              MICHAEL H. MICHAUD, Maine
MARLIN A. STUTZMAN, Indiana          LINDA T. SANCHEZ, California
BILL FLORES, Texas                   BRUCE L. BRALEY, Iowa
BILL JOHNSON, Ohio                   JERRY McNERNEY, California
JEFF DENHAM, California              JOE DONNELLY, Indiana
JON RUNYAN, New Jersey               TIMOTHY J. WALZ, Minnesota
DAN BENISHEK, Michigan               JOHN BARROW, Georgia
ANN MARIE BUERKLE, New York          RUSS CARNAHAN, Missouri
TIM HUELSKAMP, Kansas
Vacancy
Vacancy

            Helen W. Tolar, Staff Director and Chief Counsel

                                 ______

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

                      BILL JOHNSON, Ohio, Chairman

CLIFF STEARNS, Florida               JOE DONNELLY, Indiana, Ranking
DOUG LAMBORN, Colorado               JERRY McNERNEY, California
DAVID P. ROE, Tennessee              JOHN BARROW, Georgia
DAN BENISHEK, Michigan               BOB FILNER, California
BILL FLORES, Texas

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

                               __________

                             April 13, 2011

                                                                   Page
Inspect What You Expect: Construction Contracting Practices at 
  the U.S. Department of Veterans Affairs........................     1

                           OPENING STATEMENTS

Chairman Bill Johnson............................................     1
    Prepared statement of Chairman Johnson.......................    33
Hon. Joe Donnelly, Ranking Democratic Member.....................     3
    Prepared statement of Congressman Donnelly...................    34
Hon. John Barrow, prepared statement of..........................    34

                               WITNESSES

U.S. Department of Veterans Affairs:
  Belinda J. Finn, Assistant Inspector General for Audits and 
    Evaluations, Office of Inspector General.....................     4
    Prepared statement of Ms. Finn...............................    35
  Glenn D. Haggstrom, Executive Director, Office of Acquisition, 
    Logistics, and Construction..................................    13
    Prepared statement of Mr. Haggstrom..........................    40

                   MATERIAL SUBMITTED FOR THE RECORD

Post-Hearing Follow-up Information:

    Glenn D. Haggstrom, Executive Director, Office of 
      Acquisition, Logistics, and Construction, U.S. Department 
      of Veterans Affairs to Director for Congressional Affairs, 
      Memorandum and Attachments, dated 
      April 28, 2011.............................................    42

Post-Hearing Questions and Responses for the Record:

    Hon. Bill Johnson, Chairman, Subcommittee on Oversight and 
      Investigations, Committee on Veterans' Affairs, to Hon. 
      Eric K. Shinseki, Secretary, U.S. Department of Veterans 
      Affairs, letter dated May 10, 2011, and VA responses.......    47
    Hon. Joe Donnelly, Ranking Member, Subcommittee on Oversight 
      and Investigations, Committee on Veterans' Affairs, to 
      Glenn D. Haggstrom, Executive Director, Office of 
      Acquisition, Logistics, and Construction, U.S. Department 
      of Veterans Affairs, letter dated May 2, 2011, and VA 
      responses..................................................    68


                 INSPECT WHAT YOU EXPECT: CONSTRUCTION
                      CONTRACTING PRACTICES AT THE
                  U.S. DEPARTMENT OF VETERANS AFFAIRS

                              ----------                              


                       WEDNESDAY, April 13, 2011

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
              Subcommittee on Oversight and Investigations,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:04 a.m., in 
Room 334, Cannon House Office Building, Bill Johnson [Chairman 
of the Subcommittee] presiding.
    Present: Representatives Johnson, Roe, Donnelly, McNerney, 
and Barrow.

             OPENING STATEMENT OF CHAIRMAN JOHNSON

    Mr. Johnson. Well, good morning, this hearing will come to 
order this morning.
    I want to welcome everyone to today's hearing on Inspect 
What You Expect: Construction Contracting Practices at the U.S. 
Department of Veterans Affairs (VA).
    I would also like to apologize in advance that I may have 
to leave early or intermittently for a markup at the Natural 
Resources Committee taking place this morning. I apologize in 
advance for that conflict. I know that some other Members may 
have to leave for that same purpose, they will be affected as 
well, but we will get through the hearing as best we can or we 
will recess if necessary to accommodate those.
    Before we start I would like us to real briefly recite the 
pledge of allegiance. So if everyone would rise we will start 
off that way.
    [Pledge was taken.]
    Mr. Johnson. And again, thank you very much.
    In a Department the size of the VA, the contracting process 
involves billions of dollars annually. These funds are 
necessary to ensure those who so bravely served the country are 
provided the care and benefits that they have earned; however, 
problems arise when the contracting process is mismanaged and 
poorly executed contracting on the scale of billions of 
dollars, such as what we see at VA, can mean billions of 
dollars wasted, taxpayer dollars that were supposed to help the 
veterans.
    A contracting process done correctly can actually help an 
organization save money in the long run.
    Good contracting on a construction project entails having 
an independent cost analysis of all available options, 
eliminating preferential treatment, and executing a timely 
process that results in a product delivered in a timely fashion 
and at the best cost.
    VA has acknowledged it would improve the quality of its 
contracting process through the use of the Electronic Contract 
Management System, or eCMS, as it has become known.
    In June of 2007, an information letter was issued by VA's 
Executive Director of the Office of Acquisition and Logistics 
mandating the use of eCMS. This database would record and track 
procurement actions of over $25,000, and the data could then be 
easily and comprehensively reviewed to determine the 
effectiveness of VA's contracting processes and make changes 
where necessary. Cost overruns could be identified and 
addressed early on, and perhaps even prevented in the first 
place.
    This sensible approach to overseeing the contracting 
process could reduce overall contract mismanagement, prevent 
potential fraud, and ultimately prevent wasted taxpayer 
funding.
    For some reason, despite its mandated usage, many 
supervisors and managers across the VA choose and have chosen 
to ignore eCMS, instead allowing the contracting system and 
associated runaway costs to continue.
    VA's Office of Inspector General (OIG) found clear cases of 
missing and incomplete information, and in one test discovered 
that 83 percent of the transactions that should have gone into 
eCMS were left out. Examples such as this dilute the value of 
eCMS as an accountability measure, and in the end veterans and 
taxpayers bear the loss.
    While VA acknowledged the OIG's findings and concurred with 
recommendations for improvement, it is my wish to see concrete 
evidence of that improvement.
    Reports of other clear cases of contract mismanagement are 
equally disturbing, including bundling contracts as well as 
splitting contracts, as was substantiated by the Deputy 
Assistant Secretary for Acquisition and Logistics nearly a year 
ago.
    As these contracts are mishandled, much needed construction 
is slowed considerably and the needed services that a new 
medical facility would provide are further delayed. Again, 
those who are hurt most by these actions are the veterans.
    If we are to get this right, there must be decisive 
leadership in contracting and accountability for actions at all 
levels. If eCMS was mandated by VA's leadership to be used, why 
then is it obviously not being used? If certain contracts on a 
construction project are intended for veteran-owned small 
businesses, why would a large business be competing for them? 
If plans are put in place for an expanded outpatient clinic, 
why then would the size and scope of that project change, not 
once, but twice?
    It is past time for these billions of construction 
contracting dollars to be used effectively, efficiently, and in 
a timely fashion so the veterans who need the services provided 
by these facilities can access them.
    I appreciate everyone's attendance at this hearing and I 
now yield to the Ranking Member for an opening statement.
    [The prepared statement of Chairman Johnson appears on p. 
33.]

             OPENING STATEMENT OF HON. JOE DONNELLY

    Mr. Donnelly. Thank you, Mr. Chairman, for holding this 
hearing today, I look forward to today's discussion.
    I would like to welcome everyone as we have the opportunity 
to conduct the Subcommittee on Oversight and Investigations 
first hearing of the 112th Congress.
    I am honored to serve as the Ranking Member and look 
forward to working with Chairman Johnson and other Members on 
both sides of the aisle.
    Prior to today's hearing, we had the opportunity to meet 
and discuss the Oversight and Investigations (O&I) agenda for 
the upcoming year, and from our discussions, I know we have a 
full plate, and one we are both committed to working in a 
bipartisan manner as we seek to provide the oversight our 
Nation's veterans rightly deserve.
    Today's hearing is an example of that bipartisan work. The 
VA procurement efforts and initiatives have been problematic 
and controversial at times. It is important we make certain the 
VA is doing their due diligence prior to awarding contracts. 
There are many steps the VA must take in between initiating 
procurement project proposals and post-awards.
    Today, we hope the VA will assure us that construction 
projects are fully reviewed to ensure successful delivery and 
management.
    It seems to me that there have been too many VA Office of 
Inspector General reports indicating that the VA's lack of 
contract details is there. Furthermore, unrealistic and 
unreasonable acquisition plans have led to escalated contract 
costs and unmet contractor milestones.
    One of my concerns is how many times do we need to meet 
with the VA only to find out that after millions of dollars 
have been spent on a contract the contractor walks away with 
these funds after the VA cancels their contracts due to unmet 
deliverables? This is an indication that we have to do better.
    Furthermore, since the 110th Congress, this Committee has 
been providing oversight on contract bundling. I am familiar 
with these issues having been a Member of the Committee on 
Veterans' Affairs since the 110th Congress and have 
participated in various hearings on this topic.
    Contract bundling by contracting officers should be 
reviewed carefully as well. Whether it may be awarding 
contracts or set-aside initiatives for veteran-owned small 
businesses, bundled contracts create opportunities for fraud 
and mismanagement.
    I will be particularly interested in the implementation of 
the VA's Electronic Contract Management System.
    Thank you, Mr. Chairman, and I yield back.
    [The prepared statement of Mr. Donnelly appears on p. 34.]
    Mr. Johnson. I thank my colleague for his comments and now 
I invite the first panel to the witness table.
    On this panel we will hear testimony from Belinda J. Finn, 
Assistant Inspector General for Audits and Evaluations at the 
VA Office of Inspector General; Assistant Inspector General 
Finn is accompanied by Cherie Palmer, and Audit Director at the 
Chicago Audit Operations Division of the VA Office of the 
Inspector General.
    Ms. Finn, your complete written statement will be made part 
of this hearing record, and you are recognized for 5 minutes.

 STATEMENT OF BELINDA J. FINN, ASSISTANT INSPECTOR GENERAL FOR 
   AUDITS AND EVALUATIONS, OFFICE OF INSPECTOR GENERAL, U.S. 
 DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY CHERIE PALMER, 
 DIRECTOR, CHICAGO OFFICE OF AUDITS AND EVALUATIONS, OFFICE OF 
     INSPECTOR GENERAL, U.S. DEPARTMENT OF VETERANS AFFAIRS

                  STATEMENT OF BELINDA J. FINN

    Ms. Finn. Mr. Chairman and Members of the Subcommittee, 
good morning and thank you for this opportunity to testify on 
the Department of Veterans Affairs procurement processes and 
construction.
    With me today is Cherie Palmer, Director of the Chicago 
Audit Division.
    Procurement continues to be one of VA's major management 
challenges. Our oversight of VA's procurement activities has 
reported on the need for increased management visibility of VA 
acquisitions on several occasions. Having accurate and reliable 
information is critical for VA's ability to manage its 
acquisitions nationwide and make good procurement decisions.
    In July 2009, we reported that the VA Electronic Contract 
Management System known as eCMS, contained incomplete 
information on VA acquisitions. We compared the contract 
actions in eCMS with data from two other sources.
    First, we looked for information on over 6,000 procurement 
actions from VA's Integrated Funds Control System. We found 
that nearly 83 percent of those actions were not recorded in 
eCMS.
    Second, we compared contract actions from the General 
Services Administration's (GSA's) Federal Procurement Data 
System and found nearly 21 percent of those actions were only 
partially completed in eCMS. The eCMS contained no information 
on another 31 percent, and in total eCMS had complete 
information on less than half of the over 1400 actions we 
checked from GSA's system.
    Therefore, we concluded that the reports generated by eCMS 
were unreliable, incomplete, and could not be used when making 
management decisions.
    We recommended eight separate actions of which three remain 
unimplemented today. The open recommendations including 
implementing a VA-wide eCMS policy handbook, improving the 
technical performance of eCMS, and integrating eCMS with VA 
financial systems.
    Additionally ongoing audit work at VA's largest contracting 
activity continues to identify problems in the use of eCMS to 
develop and maintain national contracts.
    As part of our oversight on VA's construction program, we 
performed a follow-up audit in 2009 and found that VA had 
established a Quality Assurance (QA) program and procedures to 
resolve previously reported problems; however, QA programs 
still needed written policies, procedures, performance 
measures, and a staffing plan. We noted that the QA program 
could not oversee contract schedule slippage because it was 
focused on performing field acquisition reviews.
    VA management agreed with our recommendations to address 
the reported problems and has completed action on all but one 
of the four recommendations.
    We will continue to access the effectiveness of VA's 
construction program in future work.
    In addition to our national audits of acquisition and 
construction, the OIG provides ongoing oversight through other 
avenues. For example, OIG criminal investigators liaison with 
VA contracting personnel, program managers, and contractor 
staff to deter, detect, and investigate potential construction 
fraud.
    Finally, our Office of Contract Review began reviewing pre-
award documents and claims related to construction contracts 
earlier this year.
    While VA has recognized deficiencies in its acquisition 
processes and infrastructure they have much more work to do. We 
believe VA should continue its efforts to leverage the full 
capability of eCMS and integrate it into existing and future 
financial systems.
    Mr. Chairman, this concludes my statement. We would be 
pleased to answer any questions that you or other Members of 
the Subcommittee may have.
    [The prepared statement of Ms. Finn appears on p. 35.]
    Mr. Johnson. Thank you, Ms. Finn, I appreciate that very 
much. We will now--Ms. Palmer you do not have an opening 
statement; is that correct? Okay. All right, just wanted to 
make sure.
    Well, let us immediately go into questions. And Ms. Finn, 
could you describe for us the basic functions of eCMS?
    Ms. Finn. I will describe them as far as I can. I am not a 
user of the system, so a more complete answer would probably 
come from the second panel, from the VA experts.
    The eCMS is a contract writing system. It was developed to 
be able to prepare contract documents and clauses easily.
    For us it provides the capability to compile information on 
the contracts in a particular location. Before eCMS, that 
capability was not in the Department, and as we were doing 
audits we would have to build a universe at every location we 
went to in order to have a group of contracts from which to do 
our work.
    Mr. Johnson. In your written testimony, you provided 
several examples of incomplete or missing contracts within 
eCMS. In your opinion, would the proper use of eCMS have aided 
the VA in more effective project management?
    Ms. Finn. It is a little difficult to extrapolate the 
contract information in eCMS to total project management, and I 
say that because project management involves much more than 
just managing the contract. Certainly though knowing your 
contracts and having that information handy is a critical piece 
of information.
    Mr. Johnson. During your testimony, you talked about one of 
your recommendations being the integration of eCMS into other 
VA systems, including their financial management systems. I 
believe that is what you said if I understood correctly. 
Certainly program management, financial management of projects 
as a core aspect of any program management philosophy or 
system.
    Is it safe to say that if eCMS were being used properly and 
integrated properly that we would have, the VA would have a 
more effective vision or ability to see comprehensively what is 
going on within these very expensive contract or construction 
projects?
    Ms. Finn. I think that is fair to say. One of the issues we 
noted when we were first looking at the usage of eCMS is that 
people working in the field had to input information twice in 
order to use eCMS. They had to put in it eCMS and they also had 
to put it into the Integrated Funds Distribution, Control Point 
Activity, Accounting and Procurement (IFCAP) system, which is 
the integrated fund control system.
    IFCAP controlled the obligations, and so those managers 
really needed to put it into the IFCAP because that was their 
funding mechanism in their financial system that fed into VA's 
financial systems. So faced with those choices, they tended to 
put it into their financial system and not put it into eCMS.
    If it is integrated, they will put it into eCMS and it 
should feed into the financial system and we will have better 
records.
    Mr. Johnson. Okay. Let us go back to the overall purpose of 
eCMS, and correct me if I am wrong, but eCMS is basically an 
oversight, an accountability tool, right? I mean it allows 
those, including senior officials within the VA, as well as 
Members of Congress, to be able to go look at the status of 
projects and contracts, correct?
    Ms. Finn. Yes, and from our viewpoint, it is a great 
advantage when contracts are on eCMS because we can look at 
them remotely from our office in Los Angeles where as before, 
we had to travel to every single facility in order to look at 
hard copies.
    Mr. Johnson. All right.
    Thank you very much, I think that is all the questions I 
have at this point. I will now yield to Ranking Member Donnelly 
for his questions.
    Mr. Donnelly. Thank you, Mr. Chairman. Good morning, Ms. 
Finn, thank you for being with us here today, and good morning, 
Ms. Palmer, thank you very much. I am from South Bend, Indiana, 
not too far away from Chicago, so it is good to see you out 
here.
    Ms. Finn, why do you think these problems have developed? 
Is there a consistent theme as to something VA is missing or is 
failing to do in hitting the proper contracting methods?
    Ms. Finn. Are you referring to why consistently we find 
eCMS still isn't being used?
    Mr. Donnelly. Yes.
    Ms. Finn. Okay. Ms. Palmer has some insights on that, I am 
going to ask her to share them.
    Ms. Palmer. Thank you, Belinda.
    During our audit work for the audit of eCMS, we surveyed 
1,382 users across all VA business lines. Our survey 
respondents stated that eCMS is not used consistently due to 
personnel shortages, time constraints, heavy workloads, 
inadequate training, and conflicting guidance. They also stated 
that the system was slow and cumbersome and told us that they 
received conflicting guidance on how to use the system.
    During our ongoing work at the National Acquisition Center, 
we found that although the Office of Acquisition, Logistics, 
and Construction (OALC) mandated eCMS usage, it did not 
adequately ensure the required use of eCMS.
    Contract data is entered and maintained in the National 
Acquisition Center Contract Management System, which is a 
separate system; however, eCMS is the mandated acquisition 
information system. It only serves VA customers and that is why 
they utilize two systems. Other government agencies, non-VA 
customers using the national contracts cannot access the 
information available in eCMS. The CM system provides an 
Internet electronic catalog function that allows non-VA 
customers to access that contract data.
    Mr. Donnelly. Do you feel the VA personnel who do 
contracting that the eCMS system is there but they more or less 
feel I have to get a contract done, I have to get this 
organized, I have to get this out and they really don't know 
how to properly use eCMS, is that what you are hearing?
    Ms. Palmer. I think the survey that we did in 2009 would 
agree with exactly what you said, but we haven't done any 
follow-up work.
    Mr. Donnelly. Ms. Finn, do you have any estimate, ballpark, 
we are not going to hold you to an exact number obviously, but 
the failure to use the system properly, the contracting that is 
done with some of the steps missing. Do you have any idea how 
much money this is costing us at the end of the day? How much 
money could be saved that is not?
    Ms. Finn. No, sir, I really don't. I can't say for sure 
those contracts aren't managed properly.
    Mr. Donnelly. Right.
    Ms. Finn. We just know they are not being recorded.
    Mr. Donnelly. Okay. And so what we have is we can't say the 
contracts aren't being run the best that contracts can be run, 
it has just not been put into the system the right way.
    Ms. Finn. It is not in the system and so, therefore, the 
visibility of that contract is possibly going to be limited 
once you get away from the local facility where the contract 
was awarded.
    Mr. Donnelly. What do you think is the most important thing 
that the VA can do to start running these contracts properly?
    Ms. Finn. I think having the oversight and the visibility 
is a very important first step. You can't manage what you don't 
know about, and that is true for the facility, the Veterans 
Integrated Services Network (VISN), the network offices, and 
also the Veterans Health Administration (VHA), as well as VA 
and even my office. It is hard to provide oversight when you 
don't know about something and you have to go search it out. I 
think that is a key.
    I think the problems with the usage of eCMS being 
cumbersome and hard are hurdles that the Department is still 
working on to improve the technical performance of the system 
and that is a critical step, because as you said, if you are 
pushed for time you may skip a step because it is hard to do. 
So they definitely need to work on improving the technical 
performance of the system and the integration to make it 
seamless that will help improve the visibility a great deal.
    Mr. Donnelly. Well, my time is up, but I want to thank both 
of you for your efforts to do a good job with the VA and to 
save taxpayer dollars.
    So with that, Mr. Chairman, I will yield back.
    Mr. Johnson. I thank the gentleman and I now yield to my 
colleague from Tennessee, Mr. Roe, for your questioning.
    Mr. Roe. Okay, thank you, Mr. Chairman, and thank you all 
for being here today.
    I guess one of the questions, you know, we talk a lot about 
mandates around here, you are being adjudicated in a court 
about another subject, but if the VA is mandated to implement 
and use this system are there any penalties if you just decide 
it is too--I think you mentioned we don't have enough people, 
it is too cumbersome, and slow, we are not trained and on and 
on. Those are all excuses, but if you are mandated to do it I 
thought you should be doing it, and if you don't do it is there 
any penalty at all for not just not doing it?
    Ms. Finn. I don't know of any penalty, but the VA panel who 
is coming after me may be able to answer that question.
    Mr. Roe. Okay. Well, I realize that new things or different 
things are hard to do. I mean we have all been in new systems 
that are difficult and we tend to go with what we are 
comfortable with and we know has worked before.
    And so, I guess the next question I have on the new eCMS 
system, it was put there for transparency; is that correct, so 
that you and I and other people would have access to this 
information so that we can make decisions about how these 
billions of dollars in VA are being spent; is that correct?
    Ms. Finn. That is my understanding.
    Mr. Roe. Yes. And when it is not being implemented is there 
a way, Ms. Finn, and I guess Ms. Palmer either one of you can 
answer this, that you can easily find out this information or 
is it just a rat maze?
    Ms. Finn. No, there is not a way. In the past, in order to 
do audits at facilities, we have had to resort to searching 
through financial systems using cost accounting codes or other 
mechanisms to try and identify contracts. It is very difficult.
    Mr. Roe. So it would be impossible for me or anyone or any 
citizen or anybody else to ever get that information?
    Ms. Finn. I would think it would be pretty close, yes.
    Mr. Roe. Okay. So then one of the reasons, how long has 
this system been in place? When was it implemented, what year?
    Ms. Finn. 2007.
    Mr. Roe. So this is the fourth year that it would have been 
implemented.
    Ms. Finn. Yes, sir, I believe so.
    Mr. Roe. And it is not being used, and in a sense there is 
no penalty, there really isn't any urgency to implement the 
system the best I can see; is that correct?
    Ms. Finn. The system is being used. It was not being used 
totally when we did our first audit. We haven't done a full 
followup to see the total usage now, but we do know from some 
statistics the Department has reported to us as they have 
increased their oversight since our report that the usage has 
increased dramatically.
    Mr. Roe. Well, I guess from O&I investigation or is it 
reasonable to think that when you implement a system that you 
should be able to do it in less than 4 years?
    Ms. Finn. I guess I would say the system is implemented. It 
has taken that long to get consistent usage, and I don't know 
if it should take 4 years. It does seem a little long.
    Mr. Roe. I think we know the answer to that question.
    And this is through the VA procurement and various 
contracting, of course they will be up here in a minute and we 
will be able to ask them questions.
    If you had a suggestion would you relook? Do you think that 
your particular investigation has uncovered anything? Because 
you mentioned something I thought was very important, because 
they are entered in it doesn't mean it is not being done right.
    Ms. Finn. Yes.
    Mr. Roe. It just means it is hard to find the information.
    Ms. Finn. Correct.
    Mr. Roe. Not that VA is hiding anything or anything like 
that, it is just that they are not--well, we will find out in a 
minute what they are doing.
    Any other comments about that? If not I have no further 
questions.
    Ms. Finn. No, sir, I don't.
    Mr. Johnson. I thank the gentleman for yielding back.
    At this time I would recognize the gentleman from Georgia, 
Mr. Barrow.
    Mr. Barrow. Thank you, Mr. Chairman.
    Ms. Finn, thus far we have been talking about the subject 
of knowing what you are getting with goods and services. We 
haven't talked so much about when you get what you bargain for, 
but making sure we get what we are paying for. But when we get 
it it has not been as much a part of your testimony as I have 
gathered. I note you say that the subject of contract schedule 
slippage hasn't been the main focus, you have been focused 
mainly on performing field acquisition review, and it sounds 
like your focus has been not so much on when we get what we are 
paying for, but what we are getting and whether we are getting 
what we are paying for, and I want to talk about the subject of 
when we are getting what we are paying for or waiting for, 
because all the problems that you describe and talk about are 
much more--are aggravated greatly by the decision about when to 
decide to build something.
    Take in my situation, for example, we have been on the 
ready line for a community-based outpatient clinic (CBOC) in 
Statesboro, Georgia, for 4 years now and we have gotten 
conflicting reports from the VISN, from the Secretary's office, 
as to when the thing is going to get built. And it disturbs me 
greatly when in response to our last inquiry about this, we get 
response from the VA that basically talks about what is going 
on in Hinesville, Georgia, a very different project in the 
adjoining district represented by my colleague, Jack Kingston, 
not at all responsive to the inquiry we were pursuing for years 
about trying to get something built in Statesboro.
    What can you say about the process about how we go about 
deciding where we are going to build things like community-
based outpatient clinics? How is that process working?
    Ms. Finn. Unfortunately, Mr. Barrow, I can say very little 
about it, and mainly because we just have not done any 
comprehensive work to look at that process.
    Mr. Barrow. Well, I am going to tell you, that is something 
of real concern to the folks that I represent, because it is a 
part of VA policy to try and provide the services on a local 
basis that are needed on a local basis, the health care, the 
mental care, the things that can be delivered locally greatly 
reduces the burden on the constituent population of having 
traveled long distances to get the so-called free care they 
have been promised that they bargained for, and to offer that 
promise on the one hand and then be dangling out the prospect 
of a CBOC in a hugely under-served area like I represent.
    You have folks in Augusta who are just ready to go to 
include these folks in their network. They want to get going on 
this. You got the constituent population in the five county 
areas surrounding Statesboro that is just dying to get local 
care so they don't have to drive an hour either to Dublin or to 
Savannah, or worse yet to farther places in order to get the 
low maintenance, high-impact care they can get through a CBOC, 
and we have not gotten a straight answer yet as to when that is 
going to happen.
    So in addition to all the things that you are occupied with 
there, are those of us who are still waiting to find out when 
we are going to get in line to experience all the problems that 
you are grappling with.
    So I thank you for your diligence in focusing on your part 
of the problem, but understand as well the part of the problem 
of deciding where we are going to build things and when we are 
going to build them. If you can take that issue up, please, we 
definitely would like to follow up with you.
    Mr. Chairman, with that I yield back.
    Mr. Johnson. I thank the gentleman for yielding back.
    I now recognize the gentleman from California for his 
questions.
    Mr. McNerney. Thank you, Chairman Johnson. Good morning and 
thanks for coming this morning.
    One of the things I hear you say and I read from your 
written testimony is that the eCMS system is overly cumbersome, 
or at least that is what some of the employees are reporting, 
but procurement is somewhat subjective, by its very nature you 
have to look at different bids, you have to make a decision 
whether they can provide and so on, so any computer driven 
system is going to be cumbersome.
    So what I would like to know is, is there a better system 
out there than eCMS, could you answer that question, that you 
are aware of?
    Ms. Finn. I am not aware of any other system that does this 
type work, so I really can't give you an opinion, I am sorry.
    Mr. McNerney. Well, the VA is a big organization, it has 
lots of contracts, it seems to me that it is big enough to be 
able to go to whoever produces eCMS and say we need these 
changes to make it more responsive to our needs. Is that 
happening that you are aware of?
    Ms. Finn. As I said earlier I believe they are working to 
implement one of our recommendations related to improving the 
technical performance, I don't have the details with me of 
exactly what steps they are taking, but I would imagine Mr. 
Haggstrom will be able to give you more information.
    Mr. McNerney. One other question about the eCMS. Is that 
private or public? Is it publicly available software or is it a 
private that you have to purchase?
    Ms. Finn. I believe that it is privately developed and 
proprietary.
    Mr. McNerney. Okay. Do you know if there is anyone here 
from eCMS this morning or if they are paying attention to this 
hearing?
    Ms. Finn. I do not know, sir.
    Mr. McNerney. Okay. Well, I hope they are. And I would 
recommend that the VA use its purchasing clout to work with 
them to make the system more easily responsive.
    And I certainly appreciated my colleague Mr. Roe's comments 
about enforcement. How do you think we can ensure greater 
oversight and transparency of the VA system in general?
    Ms. Finn. I think we can ensure greater oversight by 
continuing to provide oversight from your side and also from 
mine. You know, as we continue to look at things we do see 
improvements. Continued attention makes a difference.
    Mr. McNerney. Well, you know, I have been in private 
industry for many years, you know, the purchasing and 
contracting is a black art, and the more that you work within 
that the more that you can make it responsive. So you know, the 
statement that the VA employees don't think that the--they 
think the system is too cumbersome, it takes too much time, no, 
those excuses don't fly with me and they don't make sense.
    So we are going to have to keep an eye on that as we move 
forward. And thank you for your testimony.
    Mr. Johnson. I thank the gentleman.
    With the Committee's indulgence I have another couple of 
questions, and so I am going to go into a second round here and 
we will try to make this brief. If any of you have additional 
questions, gentlemen, we will get to those too.
    Ms. Palmer, would you read back again what you said earlier 
in your survey what people said were the distractions or the 
reasons why they were not using eCMS?
    Ms. Palmer. Yes. The survey respondent stated that eCMS is 
not used consistently due to personnel shortages, time 
constraints, heavy workloads, inadequate training, conflicting 
guidance, it is a slow and cumbersome system, and they received 
conflicting guidance on its usage.
    Mr. Johnson. Okay. As a former Chief Information Officer 
(CIO) myself and with other 30 years in information technology 
(IT), I can certainly relate to the technical aspects of a 
cumbersome system. Outside of the technical aspects though, and 
I will address this to Ms. Finn, and to both of you actually if 
you would like to respond, outside of the technical aspects of 
the system, and it is subjective whether that is cumbersome or 
not depending on the user, every one of the other reasons for 
inconsistent use are management decisions, right? I mean that 
is what management is supposed to do is to provide training. 
Training is an integral part of the acquisition of a system 
like eCMS. Everybody has workloads to deal with, and certainly 
time constraints.
    It seems to me, eCMS, that kind of system that does 
contract writing is designed to break down time constraints.
    And I would appreciate a response from both of you. Would 
you agree that the inconsistent use reasons given are primarily 
focused around management issues?
    Ms. Finn. Yes, sir, I would agree that those are management 
issues. We obviously had a recommendation related to training 
from this report and VA did provide a great deal more training 
and address some of the other management issues such as having 
conflicting guidance as to what people were expected to do.
    As VA worked to obligate money from the Recovery Act it 
mandated that every contract, no matter what size, funded with 
Recovery Act money be completed in eCMS, and as we looked at 
those contracts we didn't find any lapse with the contract 
being there, but we did still find problems with some of the 
documentation being there.
    But yes, they are management issues that will take 
continued attention in order to address.
    Mr. Johnson. Okay. Ms. Palmer, any comments on that?
    Ms. Palmer. No, sir, I don't have anything else to add.
    Mr. Johnson. Okay, all right. Thank you. That is my last 
question. I will see if our other Committee Members have, 
standing in for the Ranking Member, Mr. McNerney, do you have 
further questions?
    Mr. McNerney. Yes, I do. Actually one of your statements is 
that you have trained 14,000 VA employees annually and that is 
a pretty big number of people to train effectively in a year.
    Ms. Finn. Yes, sir, that is in fraud awareness. We provide 
regular briefings to people in VHA, as well as the Veterans 
Benefits Administration on issues that they should be aware of 
as managers and people on the front line who might see fraud 
situations.
    Mr. McNerney. How much effort is devoted to training people 
in the eCMS system?
    Ms. Finn. From the OIG Office we don't provide that 
training. The Department provides that training.
    Mr. McNerney. So you are not aware of how much training is 
involved?
    Ms. Finn. No, sir, I am not.
    Mr. McNerney. If we were to hold a hearing a month from now 
and ask you to provide names of managers at the VA that are 
falling down in terms of their employees complying with eCMS 
could you do that?
    Ms. Finn. A month might be a very short time in order to 
give you comprehensive information.
    Mr. McNerney. What would be an appropriate time frame?
    Ms. Finn. Several months at least I would think. I don't 
know, because I don't know the scope of what we might need to 
look at. If we were trying to make a determination across the 
entire Department that would take quite a long time.
    Mr. McNerney. And in your opinion would that be something 
that would be effective in terms of enforcing compliance with 
eCMS?
    Ms. Finn. It would certainly get their attention.
    Mr. McNerney. I think it would, yes. All right, thank you, 
that is my last question.
    Mr. Johnson. Thank you. The gentleman from Tennessee no 
further questions? Mr. Barrow from Georgia? I am sorry, Ranking 
Member Donnelly returned. Mr. Donnelly, do you have any further 
questions?
    Well, on behalf of the Committee, ladies, Ms. Finn and Ms. 
Palmer, thank you so much for your testimony today. We look 
forward to moving forward with you on ensuring a well managed 
contracting process for construction at VA. You are now 
excused. Thank you.
    Ms. Finn. Thank you.
    Mr. Johnson. And I invite the second panel to the witness 
table. I now welcome Mr. Glenn D. Haggstrom, the Executive 
Director of the Office of Acquisition, Logistics, and 
Construction at VA. Mr. Haggstrom is accompanied by Mr. Jan 
Frye, Deputy Assistant Secretary of the Office of Acquisition 
and Logistics at VA, and Mr. Robert Neary the Director of the 
Service Delivery Office in the Office of Construction and 
Facilities Management as well as the Acting Director of the 
Office of Construction and Facilities Management at VA.
    Mr. Haggstrom, your written testimony, your written 
statement, will be included in the hearing record and you are 
now recognized for 5 minutes. I sense you folks have been here 
before probably so you know just to hit the talk button.

STATEMENT OF GLENN D. HAGGSTROM, EXECUTIVE DIRECTOR, OFFICE OF 
 ACQUISITION, LOGISTICS, AND CONSTRUCTION, U.S. DEPARTMENT OF 
VETERANS AFFAIRS; ACCOMPANIED BY JAN R. FRYE, DEPUTY ASSISTANT 
SECRETARY, OFFICE OF ACQUISITION AND LOGISTICS, U.S. DEPARTMENT 
OF VETERANS AFFAIRS; AND ROBERT NEARY, ACTING DIRECTOR, OFFICE 
 OF CONSTRUCTION AND FACILITIES MANAGEMENT, U.S. DEPARTMENT OF 
                        VETERANS AFFAIRS

    Mr. Haggstrom. Thank you, Mr. Chairman Johnson, Ranking 
Member Donnelly, and distinguished Members of the Committee, 
thank you for the opportunity to appear before you today to 
discuss the Department of Veterans Affairs Acquisition, 
Logistics, and Facilities Management operations.
    It is a privilege for me to represent the many dedicated 
and hard working professionals and provide mission critical 
support every day to necessary contracts, logistic support, and 
facilities are available for some of our Nations most 
extraordinary citizens, veterans.
    The Office of Acquisition, Logistics, and Construction was 
formed in October 2008 to support the construction needs of the 
Department of Veterans Affairs. Those organizations were 
brought together to provide an enterprise approach to policy, 
process, and systems necessary to support these similar 
functions resident in each of the VA administrations.
    The core responsibilities and an integrated acquisition 
model were affirmed by the Secretary on April 2010. Together 
the structural and process changes will enable the Department 
to serve our internal customer's needs and ultimately our 
veterans in a more efficient manner.
    OALC has six fundamental roles in the operation of the 
Department. Achieve clear ownership and accountability of the 
VA contracting mission, gain control over acquisition and 
facilities management information, effectively manage the 
acquisition life cycle for contracting and construction, 
develop critical human capital resources, enhance information 
management to support corporate decision-making, and finally 
improve service delivery.
    With the focus of today's hearing on VA's Electronic 
Contract Management System and the major construction program I 
would like to inform the Committee on where we stand with 
regard to completing the recommendations identified by the OIG 
in each of the reports.
    Currently OALC has two VA OIG reports with four 
recommendations that remain open. As part of OALC's continuous 
improvement process the findings and recommendations of all OIG 
and GAO reports are captured, analyzed, tracked, and acted on.
    First, the audit of VA Electronic Contract Management, 
eCMS, published in July 2009 identified eight recommendations, 
five of which the OIG has closed. Significant progress has been 
made through management actions to complete system user 
training with training teams available to the administrations 
upon their request, putting in place oversight programs at the 
administration and headquarters level to review eCMS usage, and 
the ability to perform real property leasing functions within 
the system is in use.
    Three recommendations remain open. The recommendation to 
develop and implement a VA wide eCMS policy and handbook to 
ensure consistent use and compliance with the system 
requirements is nearing completion. We completed developing and 
providing an integrated role base matrix for using the 
individual eCMS user guides in the December 2010 release of the 
system. The remaining action to complete policy revision will 
be completed by the end of this month.
    The second open recommendation deals with the technical 
performance of the system. In response to this, we have 
completed phase one of our technical refresh in January 2010 
with phase two scheduled to be completed in June of this year.
    The refresh include server replacement, software changes to 
increase performance, and expanded data repository capacities.
    Finally, the remaining recommendation was to determine 
feasibility of integrating eCMS with the integrated funds 
control point activity accounting and procurement system to 
streamline the procurement process. The integration software 
that has been completed and tested and is scheduled for 
production roll out in the first quarter of fiscal year 2012.
    The other of VA's major construction contract award and 
administration process identified four recommendations with one 
still remaining open.
    Successfully closed were recommendations to establish 
effective mechanisms to monitor contract slippage and ensure 
the timely close out of major construction projects and develop 
a staffing plan to ensure quality assurance responsibilities 
are met.
    In the remaining open recommendation, OALC is developing 
written quality assurance policies and procedures and program 
performance measures addressing all quality assurance services 
areas of responsibilities. Phase one of this recommendation was 
completed in December of 2010, and phase two will be completed 
in June of this year at which time we will recommend to the OIG 
that the report be closed.
    Also in 2009, the U.S. Government Accountability Office 
(GAO) issued a report on VA major construction noting that VA 
generally met GAO best practices for a Federal major 
construction program in 10 of 12 areas. From that report came 
two recommendations that VA fully supported and is in the 
process of implementing.
    First, the use of an integrated master schedule, and 
second, conducting a risk analysis based on the projects cost, 
schedule, and complexity. Both of these recommendations will be 
completed this fiscal year at which time VA will have 
implemented all 12 of GAO's best practices.
    As proud as we are of the many improvements in VA's 
acquisition and facilities management operations we recognize 
the need to continuous improvement and will work diligently to 
maintain the confidence of the American public and the 
Congress.
    Mr. Chairman, we appreciate the opportunity to discuss VA's 
acquisition, logistics, and construction operations with you, 
my colleagues and I are available to answer your questions.
    [The prepared statement of Mr. Haggstrom appears on p. 40.]
    Mr. Johnson. Thank you, Mr. Haggstrom. What is the purpose 
of using eCMS?
    Mr. Haggstrom. The purpose of eCMS is an electronic 
contract writing system. As the requirements of our contracting 
officers have increased over the years for reporting certain 
measures, data up to the Federal procurement data system, the 
complexities of the contracting business at large, the majority 
of executive agencies have brought on these contract writing 
systems to have a central repository for our contracting 
officers to develop those contracts and do any modifications or 
keep track of what is happening with that specific contract.
    This information, if you will, then flows to what is called 
the procurement data system, which is system of record, if you 
will, for the Federal Government, the Federal procurement data 
system, and it also tracks much of the same information that is 
resident in eCMS.
    The eCMS, if you will, performs that back shop capability 
of the details that surround the contract.
    Mr. Johnson. Do you consider eCMS an effective tool?
    Mr. Haggstrom. There are always improvements that can be 
made to integrated systems. I believe it is.
    In my past workplace, I was part of bringing online a very 
tool similar to this, the integrated acquisition system.
    All of the Federal agencies that I am aware of, the large 
procuring offices have done this as part of the government's e-
procurement initiative, and while each of the agencies uses 
different types of the software and protocols, in general when 
you look at electronic contract management systems across 
government they are very similar in terms of the performance 
and capabilities that they have.
    Mr. Johnson. Do you consider eCMS as being properly used by 
the VA at this point?
    Mr. Haggstrom. Mr. Chairman, we agree with what Ms. Finn 
was saying. eCMS is not used to the full capacity and we 
recognize that, and I believe there are two components to that.
    First is the technology component, if you will, and then I 
believe it is our responsibility as the headquarters and the 
provider of this system to ensure that what we have in terms of 
the system meets the performance requirements of our people, 
and that includes the training and the functionality and the 
response time, and all of these things were noted in Ms. Finn's 
testimony that they looked at several years ago.
    The second piece of that is exactly what was discussed with 
the previous panel, and that is the management, and that is the 
accountability of our mid-level managers and our senior 
managers who are out in these contracting offices throughout 
the VA to ensure the enforcement of this policy and work with 
their people to ensure that they are using the system as it has 
been mandated to be used.
    Mr. Johnson. When did that management accountability 
process begin? I mean you heard the testimony of the previous 
panel, 20 of 29 contracts written by the Office of Acquisition, 
Logistics, and Construction totaling over $10 million were not 
correctly developed and entered into eCMS. You have heard 
figures of 87 percent.
    I have been a leader, I have been a commander, I have been 
a senior executive in business, how long does it take to 
address these management issues?
    Mr. Haggstrom. Unfortunately, in this particular case, it 
has taken much too long. If I could ask Mr. Frye, who is also 
the senior procurement executive for the Department to comment 
on the implements of the system that took place back in 2007.
    Mr. Frye. Yes, if I could take you back a little bit. I 
arrived here at VA in fiscal year 2006 and discovered VA had no 
contract writing system. I was astounded given the fact VA is 
the second largest Federal Government organization. We were 
literally writing contracts using Microsoft Word, I referred to 
it as writing contracts on the backside of an envelope.
    So we set about immediately to implement a contract writing 
system. VA spent just a little over $20 million, implemented it 
across the entire enterprise, and we completed implementation 
and were fully operational and capable by July of 2007.
    Following up on what Mr. Haggstrom said, this is a system 
we use to write contracts, but it gives us a reputable, 
measurable process in doing so, it gives us an all important 
database so we can punch the button literally and know how many 
contracts we have across VA, the dollar amounts and that type 
of thing.
    Mr. Johnson. Mr. Frye, I apologize, my time is up. We are 
probably going to have a second round, we will get back into 
this a little more. I will give you something to think about 
though.
    Four years later, $20 million of American taxpayer dollars 
and we have a system that is not being used for the most part 
when you consider previous testimony, 83 percent of the data 
not being in the system. That is a long time and a lot of money 
being spent with very low return on investment by the American 
taxpayers. Something is wrong here and I hope we can get into 
that.
    I am going to yield to Ranking Member Donnelly now for his 
questions.
    Mr. Donnelly. Thank you, Mr. Chairman. I will throw this 
out to all of you. What do you think is the most important next 
step you can pursue to make eCMS work better, to make a 
contract system work better? If you had your choice what next 
on your plate is the most important thing to do?
    Mr. Haggstrom. I think it is a continual process. You are 
never going to complete this process because people forget. We 
continually have new folks in the contracting business coming 
into the Department, so there is always this continuum of 
requirements.
    I think one of the most things is training. Providing the 
adequate training to our people for them to be able to use the 
system, understand the system, and exploit its capabilities, 
and this training is provided at the request of the 
administrations, but also when a new contracting officer joins 
the Department they are required to go through a 4-day course 
at the VA Acquisition Academy to understand and learn the 
system and how to use that system.
    Mr. Donnelly. Do you have a course book for the VA 
Acquisition Academy? Like when that person comes for 4-day boot 
camp, do you have a book that you give them that tells them 
here is how eCMS works, here is when you do contracts we expect 
it to be handled?
    Mr. Haggstrom. We do have a course training guide that is 
left with the folks. Also because the eCMS system is web-based, 
all those instructional training and how do guides are resident 
within the system so that if the user has a question they can 
go to what we call our acquisition resource center, which is 
imbedded as part of this integrated technology, where they can 
go and they can look up questions, find the answers, and then 
apply that to that particular problem they experience.
    We also have a very robust help desk for eCMS that at any 
time a user can call the help desk and seek help from a staff 
of professionals who understand this system and can lend them 
advice on how to move forward with their problem.
    Mr. Donnelly. So I guess the next question is, we have a 
lot of tools, how do we make sure these tools are used more? 
How do we get more people on it? Are there parts of the country 
that are doing better than other parts in the VA operations?
    Mr. Haggstrom. There are. When you start to peel this back 
if you look at it there are certain operations and areas with 
the administrations who are if you would call super users where 
all the contracting officers are using it and there are other 
areas where they are not.
    And I think that goes back to the point that Mr. Frye was 
making and Ms. Finn was making, is we are looking at this now, 
this has to be a leadership issue where those mid-level 
managers and those senior managers take accountability for 
their folks to enforce what the Department has issued as 
policy.
    Mr. Donnelly. It would seem that if some places are doing 
really well and some places are not doing well at all and they 
both have the same materials then maybe it is not the 
materials, maybe it is just as you said, a leadership issue of 
how do we get the same skill set that has enabled certain areas 
to shine, how do we transfer that same skill set to those areas 
that haven't, and I hope you guys are taking a look at that.
    Mr. Haggstrom. We are. In fact certainly one of the primary 
users of this system is the Veterans Health Administration as 
you can well imagine as being the largest administration within 
the Department.
    Mr. Fred Downs, who is the head of contracting activity for 
the administration, has implemented specific metrics that look 
across the operation in VHA at the VISN level to look at the 
usage of eCMS and the reconciliation of any errors that are in 
eCMS.
    So there is special attention being paid in the 
administrations on the usage of eCMS and how they can improve 
that usage.
    Mr. Donnelly. I think one of the things we would be real 
interested in seeing is if you set up metrics for how to 
transfer this knowledge, this talent, this ability of the 
places that are doing well to the ones that aren't. Is there a 
plan? What is that plan? What kind of timetable is there for 
that plan? That kind of thing so that, you know, the folks who 
are steering the ship the right way can teach the folks who are 
going around in circles how to start pointing the ship in the 
right direction.
    Mr. Haggstrom. Absolutely. About 2 years ago we established 
a program management office within Mr. Frye's organization 
specifically dedicated to eCMS, and Ms. Harvey, who is the 
Executive Director of that organization, has user forums of the 
folks out there who actually type it on the keyboard, if you 
will, to continually get feedback from them on what the issues 
with eCMS are, how we can improve the system from a technical 
stand point, and the priority of which these issues are 
tackled.
    Mr. Donnelly. Well, thank you very much, I am out of time. 
Thank you, Mr. Chairman, I will yield back.
    Mr. Johnson. I thank the gentleman for yielding. The 
gentleman from Tennessee?
    Mr. Roe. Thank you, Mr. Chairman.
    You know, we are here to provide the best services and care 
for veterans, that is the purpose of this VA, and also to watch 
after taxpayers dollars so that those dollars get down to 
actually providing services for veterans.
    And let me just tell you a little bit of my frustration 
about this morning. I got your testimony here at the 5 minutes 
till the time this Committee started. I sit down the night 
before and read all of these. And I had a book last night that 
my staff spends time preparing, but there was nothing in here 
from your group. And I am wondering if you were responsible for 
making sure that all of this gets done wouldn't it be good if 
we had had this yesterday so I could have read your testimony 
yesterday? And I don't know why you didn't get it here until 5 
minutes till 10:00, but all I heard was your testimony. I 
didn't have a chance to read it, to analyze it, to think of 
some questions. That is just a comment.
    To Mr. Barrow's point I want to get to some things that you 
were talking about just a minute ago and how on a cost analysis 
who conducts these cost analyses, and I think that is what eCMS 
is about. How do you make these decisions about whether a new 
construction site should occur, whether you should renovate 
one, and then how do you follow that construction? How do you 
follow that money to make sure we are getting it? And I am 
going to get that point second. So how is that down first of 
all?
    Mr. Haggstrom. Mr. Roe, eCMS is not designed to do that. 
eCMS is not a decision-making tool for the construction and 
facilities management process in terms of determining site 
locations, in terms of----
    Mr. Roe. Okay, that is fine, then you have answered that 
question, that is done another way.
    Mr. Haggstrom. It is.
    Mr. Roe. But if you have a contract and that is entered 
then you can find out if that contract is being implemented or 
written properly and followed properly am I right?
    Mr. Haggstrom. That is correct.
    Mr. Roe. Okay, then the reason I guess that leads to 
another question I have that is when you were evaluating these 
things there was a project I think out in Denver or some place 
out west--in Denver where a replacement medical facility had 
been appropriated money in 2004, 2006, 2008, 2009, and 2010 
with a total cost of a half a billion dollars for 40 beds.
    Well, I just helped at home build a hospital with 120 beds 
that was a fraction of that much money.
    How in the world does something like that happen if there 
is any oversight that I or another Congressman here can go look 
at? How could that ever happen?
    Mr. Haggstrom. Congressman, if I may, Denver was a 
situation where the scope was continually changing on that to 
decide whether or not we were going to have bed towers the 
example or not have bed towers, what size the facility was.
    I would ask Mr. Neary, who is the Acting Director of 
Construction of Facilities Management to comment on that if I 
may.
    Mr. Roe. Thank you.
    Mr. Neary. Thank you, Congressman Roe.
    Mr. Johnson. Mr. Neary, would you press your talk button, 
please.
    Mr. Neary. Thank you, I apologize.
    The Denver facility is not for 40 beds, but it is 184 beds, 
it also includes a very large outpatient component. But you are 
correct that the project was incrementally funded over a period 
of years.
    And one of the areas that VA has identified as needing 
improvements is in the early planning of major construction 
projects and looking forward to having a multi-year program 
plan so that prior to our introducing a major construction 
project in the budget we have a better handle on what is to be 
constructed.
    In the case of Denver, it was originally identified as a 
project that would build a replacement hospital, then a 
decision was made to lease hospital beds from the University of 
Colorado Hospital and only build an outpatient clinic.
    Over time and engaging with stakeholders, it was determined 
to switch back to a full service replacement medical center and 
that is under way now. We have just awarded the first 
construction contract associated with the building of that 
facility.
    Mr. Roe. Well let me just, Denver is a 40-bed increase in 
the number of beds they had, and I will just tell you, you 
would never in a million years spend your own money that way. 
There is no way on this earth that in a private business you 
could survive that. A hospital can't make that kind of a goofy 
decision now because of the income they have to pay for their 
debt load, they can't do it.
    And I think that what we are all getting to here is that we 
want our money, our tax dollars, your tax dollars spent as 
efficiently as we can so that the veterans get the care they 
need, and to spend a half a billion dollars, that is a lot of 
money on a project. I mean we could have spent a lot of that 
money for Mr. Barrow to have an outpatient clinic in his 
district, you could have had ten of them for that much money, 
or 50 of them.
    And so I guess my frustration is, is that when we are 
spending the taxpayer's dollars we don't seem to be looking 
after them like they were our dollars, which they are.
    Mr. Neary. Well, I believe we are, and we certainly should 
be, it is very important to do that. In the selection of 
projects going forward the cost analysis is performed in terms 
of renovation versus new construction, construction versus 
leasing in an effort to make sure that the appropriate project 
is selected to be funded.
    Mr. Roe. Okay. Thank you, I yield back. Will we have a 
second round?
    Mr. Johnson. Yes, we will.
    Mr. Roe. Thank you.
    Mr. Johnson. Thank you for yielding. Mr. Barrow.
    Mr. Barrow. Thank you, Mr. Chairman.
    Mr. Haggstrom, you heard my questions to Ms. Finn in her 
capacity as Assistant Inspector General for Audits and 
Evaluations, she doesn't really get into the area and certainly 
wasn't getting into this morning the area of deciding what to 
build and when to build it, and she was given sort of an 
appreciation of what she is able to do.
    You, though, as Executive Director of the Office of 
Acquisition, Logistics, and Construction certainly are in a 
better position to help me understand just how it is we decide 
what to build and when to build.
    You are quite right in response to Dr. Roe's questions, 
eCMS is just sort of like a super duper checklist for what to 
do when you were building something or going to do something.
    My question to you is, help shine a light on the process 
for deciding when and where are they going to build something 
like community based outpatient clinic? Tell me how that is 
done.
    Mr. Haggstrom. I will certainly attempt to do that, sir.
    When you look at the process, the process begins with the 
users at the administration level, and in this case for the 
CBOCs or HCS, the major medical centers. So based on the 
modeling that VHA uses they look at the demographics, they look 
at the future population and things like that in terms of 
determining what the needs are of VHA to serve our veterans.
    Mr. Barrow. At this point it is beginning to sound like you 
are describing the management counterpart of a super duper 
checklist like eCMS. My question is not how you do it, but who 
does it?
    Mr. Haggstrom. As I said the, requirements generation is 
built by the administrations, the user. As we spoke to the full 
Committee last week on the implement----
    Mr. Barrow. But different users don't establish priority 
between themselves, for example. I am here to tell you that the 
folks at the Charlie Norwood VA in Augusta are all hell bent to 
get this thing done. We were encouraged and told by the folks 
at the VISN, the folks at the Georgia Department of Veteran 
Services and by the VA to poll the constituent community, and 
we got input as to thousands of families that would benefit 
from having this. We more than met the criteria.
    The question is, when do you decide what order you go in? 
We got one that has come online that wasn't even started in 
Georgia until after we had already submitted our petition 
showing 5,000 people within a 30-mile area of Statesboro ready 
to participate in this with all the benefits they get from 
this, and we find the one in Hinesville, just down the road, is 
going forward. When we ask about Statesboro we are getting a 
letter that is actually talking about what is going on in 
Hinesville, telling us don't worry.
    It really bothers me that in urging action in what we have 
been promised for many years that might be interpreted by 
somebody in the VA as saying we are urging support for further 
progress in Hinesville. I mean, I don't even know if folks know 
what we are talking about when reaching out to the VA to find 
out what the status is.
    So when it comes to issues of competing priorities, 
scheduling things in, putting things in the pipeline to be 
developed who actually makes that decision? Is it done at the 
Secretary's level?
    Mr. Haggstrom. It is. It comes up through the governance 
process in the Department, the Office of Management is 
responsible from a planning and budgeting perspective to take 
all these requirements and do an integration and a 
prioritization and then make those recommendations to the 
Secretary in terms of what the program would look like in that 
respective fiscal year.
    Mr. Barrow. Well, we have that. We had actually made that 
much progress, we have gone well beyond that, and we have been 
told that the matter is actually been sitting on the 
Secretary's desk for quite some time now. What can we do to get 
something going?
    Mr. Haggstrom. Congressman, I wish I could give you a 
better answer. Once that decision is made I can assure you my 
office takes action immediately. If you will, my offices are 
responsible for the execution. And I don't mean that to sound 
as an excuse.
    Mr. Barrow. Again, I recognize I am coming to this from 
another--but you are closer to it than I am.
    Mr. Haggstrom. As soon as that decision is made, sir, we 
action it immediately, and in the case of the CBOCs where they 
are normally a build lease facility, we will implement our 
leasing process, which is a two-step process. Basically first 
finding the land, and then second, finding a developer.
    Mr. Barrow. We have actually gone so far in Statesboro as 
to offer sites that have actually been inspected and evaluated 
for suitability either for conversion, adapted for use as a 
CBOC, and otherwise.
    What role do your counterparts in State government, say the 
Department of Veterans Service in Georgia play in either 
advocating for or serving as a check off on the list of folks 
to consult? What role do they play in advocating for some of 
us? Anything at all? Do you all listen to the folks in Atlanta, 
for example, at the Georgia State Department of Veterans 
Service?
    Mr. Haggstrom. I am not aware of any formal role that the 
Veterans Health Administration may use in terms of reaching out 
to various other government agencies. When you look at the 
major medical centers and the operations within VHA, their 
relationship with communities and community's leaders is 
usually very good. And so that would usually reside at that 
particularly operational level to reach out to the community 
leaders, talk to them about the needs of the community, perhaps 
discuss with them where an optimum location may be, and even to 
say is there land that the community might be willing to donate 
for this particular effort.
    Mr. Barrow. Thank you. Thank you, Mr. Chairman.
    Mr. Johnson. Thank you very much. Hold on just a second, we 
are getting a message from Natural Resources. Just to keep 
everybody posted I will have to go vote at a markup at Natural 
Resources in about 15 minutes, so we will recess at that point 
and reconvene.
    Go to Mr. McNerney, now. Thank you.
    Mr. McNerney. Thank you, Mr. Chairman.
    I had the opportunity to express my frustration at a 
hearing on a different Subcommittee a couple weeks ago about 
how long it has taken to do a project in my district, and it 
took about 2 years to decide what county to put the project in, 
it took another year, and it hasn't been decided yet what 
location within the county to put the project in.
    Are we going to be continuing to experience that sort of 
longevity and process decision-making in the organization or is 
there a way to speed this thing up? I mean it is very 
frustrating, we have veterans waiting for service and we have 
extremely high unemployment. It is a very frustrating 
situation.
    Mr. Haggstrom. I understand your frustration, Congressman.
    When we look at the planning function, which again begins 
with the Veterans Health Administration for our CBOCs, they 
have a very deliberate process in terms of looking at the 
veterans demographics, where those veterans are located, the 
proximity to other major medical centers where we may have 
affiliate relationships, what the scope of the requirement may 
be in terms of the size of the facility. We look at various 
things like accessibility, the size of the land, transportation 
issues, the surrounding activities that would service that 
CBOC. All those things are taken into consideration.
    Mr. McNerney. Well, I mean these are all important 
considerations, granted, but every year of delay adds five to 
10 percent to the cost of the project, so there has to be a way 
to speed up this process. I don't know if you have an answer to 
that, but I am just telling you it is going to be something you 
are going to hear about from me until I feel like there is 
progress made.
    I do have a question regarding to the eCMS system. Now what 
I am hearing is that there is a certain lack of oversight and 
that causes a waste of money maybe through fraud, maybe through 
mismanagement, I don't know, but I would like to get from you 
some idea of how much money is actually not being spent 
effectively as a percentage of total expenditures and how that 
might compare to a similar situation in a private corporation 
like Ford that might be the same size.
    Mr. Haggstrom. Congressman, I do not have that number, nor 
do I have an idea on how we may do that.
    I do wish to say though that I do not believe one, that 
eCMS would preclude fraud. Fraud is perpetrated by our vendors 
or very intentional acts of trying to deceive the government. 
The eCMS will not prevent that.
    I do believe when you look at the contracting actions as 
Ms. Finn said, while all the documents may not be resident in 
eCMS that we would like to have in there from a standpoint of 
be able to do data mining, that does not mean that the 
Department is not getting best value for the contracts that 
they do let, and that process is a very deliberate one in terms 
of ensuring competition, ensuring that the requirements 
generation adequately describes what our requirements are, and 
then implementing that contract.
    Mr. McNerney. So are we barking up the wrong tree here by 
singling out eCMS in terms of waste of fraud and abuse?
    I mean some of the questions I am hearing reflect my 
frustration here with the testimony this morning, but I would 
like to have some way to measure what is going on and identify 
bad players if possible, including bad players within the VA. 
And are there statistical measures, are there quantifiable 
measures that we can set down and ask you to come back with us 
in a month and say well, these are the bad managers, is that 
something that is possible?
    Mr. Haggstrom. We do have a series of metrics in the 
acquisition community that we look at. One is the usage of eCMS 
and the accuracy of the Federal procurement data system. So we 
are looking at these performance measures in terms of how the 
systems are being used.
    Mr. McNerney. And that is something that you can bring to 
this community if we ask you too?
    Mr. Haggstrom. We can.
    Mr. McNerney. Okay, thank you.
    Mr. Roe [presiding]. I guess we will now go into a second 
round of questioning if that is all right with the panel.
    In the world I lived in when we had a contract as a mayor 
we had an idea we wanted to build a school and we would have an 
architect, we would define the need in one do you need the 
school, and we would get an architectural firm and we would bid 
that out, we had a bidding process through local or whoever 
wanted to bid on that. We would select the architect, the 
architect would then design the plan. We then let the contracts 
and you have an opening of a single bid, you would have all the 
specifications and you would do that, and then you would have a 
project manager that was independent of the construction crew 
that was doing. And you would hold money back and you would 
evaluate as you were going along. That is how I have done a 
gazillion projects. If it is a road project, a school, or even 
in my own practice a building like that, we did a similar 
process of selecting an architectural firm and so forth.
    Who is in charge of actually doing that? Let us say they 
are going to build a CBOC in his district, heaven forbid maybe 
it will some time happen in your lifetime, but if we are going 
to do that how is that process and how do you oversee that 
going along to be sure that that money is just right? Who is 
responsible for that?
    Mr. Haggstrom. Certainly. Mr. Roe, the process you 
described that you used in the private sector is very much like 
the process we use in the Federal sector with the exception of 
very rarely do we use sealed bids anymore.
    We are more in line in best value in terms of what the 
private sector brings to us in terms of a proposal and the 
design of the ultimate facility.
    I would ask Mr. Neary, whose Office of Construction and 
Facilities Management is responsible for the life cycle of the 
major construction program to explain to you a very deliberate 
process that we use from the inception to the commissioning of 
those facilities.
    Mr. Roe. And the second thing, you can answer these at the 
same time, the North American Industry Classification System 
(NAICS) is a standard that you have in picking firms that are 
qualified to do a job. Would you ever pick a firm that didn't 
meet those qualifications?
    Mr. Haggstrom. If I understand you the North American 
Industry Classification System does not qualify a firm to do 
the job. All that standard represents is the category of 
services that that particular business offers. It has 
absolutely no bearing on whether they are qualified to perform 
the job that we are asking them to do.
    Mr. Roe. How do you figure that? How do you decide whether 
they are qualified?
    Mr. Haggstrom. I would like to have Mr. Neary answer that 
as part of the process we go through in terms of determining 
best value for the ultimate awardee.
    Mr. Neary. Sure, thank you.
    And Congressman Roe, achieving quality is an extremely 
important part of our culture, and in each of the steps that 
you described we have a number of mechanisms to bring quality.
    When a decision is made to build a facility we will select 
an architect. Some time ago back in the 1970's the Congress 
fortunately allowed Federal agencies to use a quality-based 
selection process, it is called the Brooks Act, so we put out a 
notice and architectural firms who believe they have the 
credentials to do the design come forward, they are rated and 
ranked by a team of experts, and then a short list of those who 
are competing are interviewed. They are asked to describe the 
quality of their team, who will be on their team, what their 
past experiences have been, the strength of their firm, those 
sorts of things.
    Once selected they are put to work and their work is 
monitored by not only our own staff, but typically a peer 
review, another architectural firm that we have selected to 
participate in reviews. Their work is reviewed at each of the 
major milestones in the design process. A design is complete 
and approved then put out for a bid.
    As Mr. Haggstrom said, we utilize a best value selection 
process where we judge the competitors on a combination of 
quality factors and price, their experience, the strength of 
their team, the quality of the individuals, et cetera, the 
strength of their subcontractors that they plan to use.
    Mr. Roe. So you don't use a sealed bid.
    Mr. Neary. We don't use a sealed bid, no, sir.
    Mr. Roe. Why not?
    Mr. Neary. It has generally been not only our experience 
but experience across the industry that if you take into 
consideration the quality of the folks as well as the price you 
will get a better contractor.
    Mr. Roe. Well, the lowest price doesn't always get ours 
either, but I think it is a much--any way, that is the process 
you use. I think it is much fairer that way, you get some of 
the hanky-panky out of it potentially with a single bid.
    Mr. Neary. Okay. Well, as I say, of course we don't do that 
presently.
    A contractor is selected for a fixed price contract, they 
are required to utilize a critical path method tool to document 
all the steps that are taken in executing a project. We monitor 
the critical path----
    Mr. Roe. Okay, I get it. It is sort of like except for the 
sealed bid it is very similar. But if we are not getting the 
information in there how do you know, how would I know that a 
process that it is being done well?
    And the other two questions I have for you all is if this 
is mandated to put this data in there why isn't it being done?
    And second, is there any penalty if you don't do it? If we 
are 4 years into it and we are still not using it----
    Mr. Neary. The eCMS system is utilized across the entire 
VA, thousands of contacts. In my organization where we have 
high dollar value contracts, but right now we are working on 
about 60 of them, we are very good about using eCMS, we put our 
data into eCMS. And so in the case of the major construction 
program it is there.
    Mr. Roe. So it is there in the major construction. So where 
isn't it there? What the OIG just told us it wasn't there.
    Mr. Haggstrom. Mr. Roe, the problems we encounter are 
within the administrations principally in terms of the multiple 
contracting officers that sit out there at the MISN or VISN 
network levels that are across the VA to ensure the consistency 
of data accuracy and just having them enter data.
    And so that while within CFM it is rigorously used, 
unfortunately it does not have that rigor across all of VA.
    Mr. Roe. So why? And again, back to the no one has answered 
it, if it is mandated why isn't it being used? And number two, 
is there a penalty? If you don't do it, if you just blow it off 
and don't ever do it what penalty is there?
    Mr. Haggstrom. As we said why. I think when you looked at 
the initial operating capability of eCMS there were some 
technical issues. We have addressed those with a technical 
refresh in terms of accelerating the speed that the system 
responds to you. We have increased the functionality in terms 
of making it easier through drop downs and pick lists. So the 
issue goes back to the leadership.
    Mr. Roe. It is supposed to be up in 2012 I think you said, 
and I heard you say----
    Mr. Haggstrom. The refresh will be completed this summer 
and the technical interface for the accounting system will be 
implemented in the first quarter of fiscal year 2012.
    Mr. Roe. Okay. I have no further questions.
    Now, Mr. McNerney.
    Mr. McNerney. Thank you, Mr. Roe.
    So I asked this question of Ms. Finn and she wasn't in the 
right position to be answering that question.
    Is there a system that is better than eCMS that we should 
be using? I mean, Mr. Frye, you are the one that selected eCMS 
are you not? Is there a better system? Are you working with 
eCMS to make sure it is more user friendly and so on?
    Mr. Frye. I have worked with a number of contract writing 
systems. I spent 30 years in the Department of Defense, 20 of 
those working with various contract writing systems. There are 
pros and cons as already stated with each and every system.
    I think eCMS is a very good system. I think when we 
started, when we implemented eCMS, we didn't turn on all the 
bells and whistles. We are turning those on now and we are 
training our workforce to use the system and I think it is a 
good system.
    Going back to what Mr. Haggstrom and others have said, it 
requires leadership. It requires mid- and senior-level managers 
to ensure their personnel are using the system, it requires 
senior executives like myself to provide high level oversight 
and make changes where required in personnel if need be, in 
policies, and in training to ensure we use the system.
    Mr. Haggstrom. If I could, Mr. Congressman, and also, Mr. 
Roe, you asked about penalties that are incurred. There are no 
formal penalties, if you will, in terms of taking your 
contracting warrant away from you or not allowing to use the 
system. Obviously that would have unintended consequences that 
would just play out in terms of not providing those services.
    What we have done internally within OAL and what I am going 
to bring forward to senior procurement counsel who is a 
governance process for contracting is in fact to have as part 
of the contracting officer's annual performance plan the use 
and complete use of eCMS as mandated by policy, which then 
would be reviewed at the conclusion of that performance period 
and would be taken into that consideration in that employee's 
overall rating.
    Mr. McNerney. Well, that is something of a penalty, getting 
fired is another kind of penalty.
    From the OIG testimony, there were 1,500 procurement 
actions in eCMS and 5,800 not in eCMS. I mean that is a fairly 
low compliance rate. If that was happening in Ford Motor 
Company people would be losing their jobs.
    So all I can say is that you have to do better, and as long 
as this Committee is holding these hearings, you are going to 
be hearing these same questions, so I recommend that you do 
what is required.
    Mr. Roe. Thank you. One final question and then we will 
wrap this up. And I don't know what this was even, but is there 
a third-party system called PARAGON? What is that?
    Mr. Haggstrom. If I could, Mr. Roe. PARAGON is a system 
that is used by Mr. Neary's office and he can comment on the 
capabilities of that.
    Mr. Neary. PARAGON is a software system that we utilize 
presently to track activities with the contractor in terms of 
request for information, change order proposals, a variety of 
the kinds of things that could go on at a construction site. So 
a data management system that we use. That contract will be 
running out and we are in the midst of getting a new 
procurement either reselect or acquire a replacement.
    Mr. Roe. What is the difference between that and the other 
system that we are using? Are they parallel systems or why do 
you run two in.
    Mr. Neary. They are two completely different systems. The 
PARAGON system tracks entirely different data needed to manage 
the job at the construction site.
    Mr. Roe. So it is a completely different system.
    Mr. Neary. Yes.
    Mr. Roe. One other thing. I want to get back into 
contracting a little bit.
    Would you all go into a little bit on bundling and contract 
splitting and how you follow that?
    Mr. Haggstrom. Certainly. If I could ask for Mr. Frye to 
comment on that. We take bundling very seriously as we do 
contract splitting. We put in place the policy and processes to 
preclude that, and Mr. Frye can comment on that.
    Mr. Frye. Yes, bundling reviews are required at a threshold 
of $2 million. However, VA implemented a policy whereby our 
small business office do reviews at the $1 million threshold. 
So we are absolutely dedicated to ensuring contract bundling 
does not occur.
    Our small business office is also required to sign off on 
VA Form 2268, which has them concur or non-concur with our 
procurement strategies. So we present to them our procurement 
actions and they approve by their signature the direction we 
are going. And if they disagree with it then we talk and 
resolve the differences.
    So we get our small business office involved up front and 
early, we hold integrated product teams (IPT) to develop our 
requirements, and the voting member, a voting member on that 
IPT is the small business offices.
    So they have ample say I believe, and I think if they were 
here today they would say as well, in the process to discourage 
and to avoid contract bundling.
    Mr. Roe. Now, Mr. McNerney, he was here last year. When the 
two of us were here last year we heard some testimony about 
someone would get a contract and then wouldn't have the 
capacity to carry it out. They would sublet that contract out 
to someone else. Are you able to follow that with eCMS or any 
of the oversight that you have? And then we found out that some 
of that work is not done properly. So the VA has not only 
issued a contract to somebody that couldn't do it, they then 
subbed it to somebody who couldn't do it.
    Mr. Frye. Mr. Roe, this is an issue across the government. 
In VA, the way we are addressing this is we have hired a 
supplier to come in and do an independent verification and 
validation for us. This contract will be put in place this 
month. We intend to have this supplier out in the field doing a 
continuous survey of contracts and subcontracts to make sure we 
don't have this situation as you just described.
    In other words when a veteran who owns a small business is 
awarded a contract they are required to do 50 percent of the 
work of that contract with the veteran business. It would make 
little sense for them to hand it off to a large business for 
instance to do the work.
    So we want to make sure that we keep our small businesses 
where they are at, and we are also going to be looking at large 
businesses. So if we have large businesses who have come to us 
and said we are going to put an aggressive subcontracting plan 
in place and we are going to give let us say 15 percent of the 
work for small business we are going to be looking at the large 
businesses too to validate that they have in fact made a 
reasonable effort to employ 15 percent of small businesses in 
that work.
    Mr. Roe. Now, there is nothing wrong, I mean, the 
subcontract people do it all the time in a construction 
project, I mean there is nothing wrong with that. You get good 
quality work and you can evaluate that work.
    I guess this will go to Mr. Neary. Back to Denver again, 
because do we have anybody that oversees? Like we would have a 
project manager, a separate third party from the contractor do 
to that who we typically would do that in the city?
    Mr. Neary. Yes, absolutely. First we have a project manager 
who oversees the entire project who works for my Office of 
Construction Facilities Management, then at the job site when 
we are ready to go into construction we have a team of people 
that we call resident engineers who are at the job site, they 
are not employed by the contractor, they are employed by the 
government, and they oversee the work, do inspections identify 
issues if there are issues, respond to requests for information 
from the contractor and that sort of thing.
    Mr. Roe. Any further questions?
    I want to thank all of you for being here today. It has 
been very informative for me and I think for the Committee, and 
I appreciate your testimony, both the OIG and you all, and 
appreciate you being here.
    I would like to have some follow up, and I think probably 
Mr. McNerney would like to have some follow up at some 
reasonable point in time. I realize it can't happen over night, 
but to see if you are able to implement this to all of the 
contracts. It has been 4 years, I think that is a long time.
    Okay. Well, our Chairman would like to ask another question 
so I am going to hold it open and not close the hearing until 
he gets here. He would like to ask a couple more questions 
before we close it out.
    But I do want to thank you for being here and we will 
follow up. I think it is very important that we follow up and 
find out where you stand. Do you have any comments?
    Mr. Donnelly. No, no comments at this time.
    Mr. Roe. We will just recess until the Chairman returns.
    Mr. Haggstrom. Thank you, Congressman.
    [Recess.]
    Mr. Johnson. [Presiding.] This hearing will come to order, 
and I thank the panel for indulging me. I apologize for having 
to step out and I thank the Committee, although it looks like a 
Committee of one now, but I thank my colleagues for indulging 
as well.
    Mr. Haggstrom, I have a few more questions that I would 
like to get into.
    You mentioned earlier, one of you did, I think it was in 
your testimony that you have a robust helpdesk system 
associated with eCMS. I am very familiar with helpdesk systems 
and their capabilities. Could you provide to this Committee a 
report of the trouble tickets and the resolution thereof of 
those trouble calls since eCMS went live?
    Mr. Haggstrom. Certainty, Mr. Chairman, we will be happy to 
provide that information.
    [The VA subsequently provided the information, which 
appears on p. 42.]
    Mr. Johnson. I would like to see that, and we will 
anxiously await that.
    I want to talk a little bit more, I know you got into a 
little bit before I left, for my benefit tell me what PARAGON 
is.
    Mr. Haggstrom. Certainly, Mr. Chairman. If I could ask Mr. 
Neary to explain that, it is part of the program management 
system that they use in construction.
    Mr. Johnson. Okay.
    Mr. Neary. Certainly, Mr. Chairman. PARAGON is a software 
tool that we currently use to manage data of activities that 
take place primarily at the individual construction sites 
recording requests for information from contractors, change 
order documentation, that sort of thing.
    And so it enables us to track what is in the house, if you 
will, and actions that are being taken, establish deadlines, 
suspense dates for accomplishments, and then we can look across 
the system at that data to look for trends and any other 
information that would be useful in guiding us in moving the 
program forward.
    Mr. Johnson. Okay. If I look at a side-by-side comparison 
of the capabilities that have been advertised for eCMS, eCMS by 
your testimony is a contract management system. It includes 
tracking project administration, contracting or contract 
management, establishing and enforcing standard acquisition 
practices and department-wide policies.
    If I look at PARAGON it says it is for project--track 
project administration, contracting, and maintaining payment 
records. When did the VA start using PARAGON?
    Mr. Neary. I would have to check, but I would suspect it 
was 7 or 8 years ago.
    Mr. Johnson. So PARAGON was in place when eCMS was brought 
on board?
    Mr. Neary. Yes, sir, I believe it was.
    Mr. Johnson. If the VA already had a contract management 
system that would track the progress of construction projects 
then why was eCMS pursued and why did the taxpayers spend $20 
million on it?
    Mr. Haggstrom. Well, I think if you look at the two 
systems--they are very different, Congressman.
    One is very focused on construction, management of a 
critical path method, management of what takes place throughout 
the life cycle of a brick and mortar facility.
    The eCMS it was built to not only take care of that in a 
general contract sense, but there are also commodities and 
service contracts that we put in place, that there was 
absolutely no system other than the back of the pad, if you 
will, to keep track of that.
    What this system did, is then take into account all the 
rest of the contracting actions that the Department had to work 
with.
    Mr. Johnson. Now we know that PARAGON is being used and 
that the data that is being placed in PARAGON is being cross-
referenced to eCMS. I am just sort of confused. Well, first of 
all, how much did PARAGON cost?
    Mr. Neary. I would have to find that out and submit it for 
the record, sir.
    [The VA subsequently provided the information, which 
appears on p. 47.]
    Mr. Johnson. Okay. How much training goes into the use of 
PARAGON?
    Mr. Neary. We provide training for all--it is used 
primarily by our resident engineers at job sites, and so any 
new resident engineer who comes into our organization we would 
provide them initial training, and then we provide periodic 
training, refresher training over time to everybody that is 
involved in the program.
    Mr. Johnson. Does PARAGON fall under the same oversight 
mandate that eCMS does? Has PARAGON been mandated as a required 
data system?
    Mr. Neary. Yes, it has.
    Mr. Johnson. How much training goes into eCMS? Do you have 
a formal training program for that?
    Mr. Haggstrom. We do, Mr. Chairman. The VA Acquisition 
Academy has a formal training system where our new contracting 
officers attend a 4-day course on a scheduled curriculum. We 
also provide field training in traveling teams if the 
administrations ask for that. And the Committee has asked for 
those training materials to be submitted for the record and we 
will do so.
    [The VA subsequently provided the information, which 
appears on p. 55.]
    Mr. Johnson. Okay. When did the training program for eCMS 
start?
    Mr. Haggstrom. The training program for eCMS started at the 
inception of eCMS being brought on in terms of being able to 
provide those end users, if you will, the skills necessary. So 
it began back in the 2007 timeframe when we started to mandate 
eCMS as the system for the contracting officers.
    Mr. Johnson. Do you consider it an effective training 
program?
    Mr. Haggstrom. I believe it has improved much. When you 
look at our users in terms of the survey, you are going to see 
mixed reactions to it. Some say it was very effective, some say 
it was very confusing, some say that they weren't trained on 
certain modules.
    We take those surveys and we bring them back and we ensure 
that we close those gaps in our training and we provide new 
training. That survey, I believe, was now done in 2008 or so, 
so it is a little long in the tooth, if you will, I think in 
terms of gauging the reaction from the users in terms of the 
quality of the training we are providing.
    Mr. Johnson. Okay. How do you account for the fact that 
data is being entered into eCMS not at the beginning of a 
contract, but later? Sort of as a second thought.
    Mr. Haggstrom. I think that goes back to some of the issues 
that the contracting officers have brought forth in terms of 
the functionality of the system, the response time, but I would 
ask Mr. Frye, if I could, to continue to comment the work.
    Mr. Frye. Mr. Johnson, there is a very simple answer to 
this one. For the most part, data is being entered subsequent 
to contracts being let is from old legacy contracts. We have 
made an attempt to put contracts that are still under way that 
were awarded prior to the advent of our contract writing system 
into that system.
    So I think by in large that is the data that is being 
entered after the contracts are let.
    Mr. Johnson. Mr. Frye, something doesn't match here. 
According to the VA testimony prior to us and the information 
that we have, 83 percent of the data that is supposed to be in 
eCMS is not in there. Are you telling me that only 17 percent 
of the data is new contracts and that 83 percent is old data? 
Because something is not jiving with what you are saying now.
    Mr. Frye. No, what I am telling you is when the contracting 
officers--and again, I wasn't out to look at the contracts--but 
from what I gather the contracting officers have entered some 
of the data, but not all of the data.
    In other words, they took a paper file and transported the 
paper into electrons, into the contract writing system so this 
would become part of your data base. The contract was never 
developed using the contract writing system because the 
contract writing system wasn't in place in 2005 or 2006.
    Now most of our contracts are put in place with a 1-year 
base and four 1-year options. So if it was a contract that was 
put in place some years ago it wouldn't have been put into the 
contract writing system.
    Mr. Johnson. So it is your assertion then that 100 percent 
of current construction contracts are being entered into eCMS 
at the beginning of the project?
    Mr. Frye. I can't comment on construction progress, I would 
yield to Mr. Neary since he runs the construction program.
    Mr. Neary. With respect to the VA's major construction 
program, what I am responsible for 99.9 percent, yes, are 
entered in at the outset. We award all of our contracts 
utilizing the eCMS system.
    Mr. Johnson. Interesting.
    Changing gears just a bit. According to VA Acquisition 
Regulation 801.603-70, a resident engineer is not allowed to 
make a commitment that will affect the price, quantity, 
quality, or delivery of a contract. Is that correct?
    Mr. Neary. Well, an individual who has to be a warranted 
contracting officer to make those types of commitments----
    Mr. Johnson. But a resident engineer is not a contracting 
officer, doesn't hold a warrant, correct?
    Mr. Neary. At each of our sites, the senior resident 
engineer would hold a warrant, limited I believe it is to 
$100,000.
    Mr. Johnson. Okay. Likewise, a contracting officer acting 
within his or her warranted contracting authority must 
authorize any change to a contract. Is that correct?
    Mr. Neary. That is correct.
    Mr. Johnson. And you are telling me that resident 
engineers--you have resident engineers that are both 
contracting officers and resident engineers?
    Mr. Neary. That is correct. Limited authority primarily 
intended to address events that arise, situations that arise at 
the job site where the contractor needs to be given direction. 
You might have plumbing lines that conflict, something that 
wasn't picked up on the drawing, those sorts of things.
    Mr. Johnson. To your knowledge do you have resident 
engineers then that are not contracting officers that are 
making decisions regarding the price, quantity, quality, or 
delivery of a contract?
    Mr. Neary. I am not aware of any situation where a non-
warranted resident engineer is making those decisions. That 
should not be happening, no.
    Mr. Johnson. Okay. Well, seeing as no other Committee 
Members apparently have any questions I would again thank you 
gentlemen for being here today. Let me get back here. And I 
thank you for your time and your testimony and you are now 
excused.
    I ask unanimous consent of all present that all members 
have 5 legislative days to revise and extend their remarks and 
exclude extraneous materials, and without objection, it is so 
ordered.
    I want to thank all of the Members of the Committee and 
witnesses for their participation today in this hearing, and 
the hearing is now adjourned.
    Mr. Haggstrom. Thank you, Mr. Chairman.
    [Whereupon, at 12:05 p.m., the Subcommittee was adjourned.]


















                            A P P E N D I X

                              ----------                              

           Prepared Statement of Hon. Bill Johnson, Chairman,
              Subcommittee on Oversight and Investigations
    Good morning. This hearing will come to order.
    I want to welcome everyone to today's hearing on ``Inspect What You 
Expect: Construction Contracting Practices at VA.''
    I would also like to apologize in advance that I may have to leave 
early for a mark-up at the Natural Resources Committee taking place 
this morning. I know that some other Members of this Subcommittee may 
also be affected by the mark-up, and we will get through the hearing as 
best we can or recess if necessary.
    In a department the size of VA, the contracting process involves 
billions of dollars annually. These funds are necessary to ensure those 
who so bravely served this country are provided the care and benefits 
they have earned.
    However, problems arise when the contracting process is mismanaged, 
and poorly executed contracting on the scale of billions of dollars--
such as what we see at VA--can mean billions of dollars wasted, 
taxpayer dollars that were supposed to help the veteran.
    A contracting process done correctly can actually help an 
organization save money in the long run. Good contracting on a 
construction project entails having an independent cost analysis of all 
available options, eliminating preferential treatment, and executing a 
timely process that results in a product delivered in a timely fashion 
at the correct cost.
    VA has acknowledged it could improve the quality of its contracting 
process through use of the Electronic Contract Management System, or 
``eCMS.'' In June of 2007, an Information Letter was issued by VA's 
Executive Director of the Office of Acquisition and Logistics mandating 
the use of eCMS. This database would record and track procurement 
actions of over $25,000, and the data could then be easily and 
comprehensively reviewed to determine the effectiveness of VA's 
contracting processes and make changes where necessary. Cost overruns 
could be identified and addressed early on, and perhaps even prevented 
in the first place.
    This sensible approach to overseeing the contracting process could 
prevent wasted funding, potential fraud, and reduce overall contract 
mismanagement. For some reason, despite its mandated usage, many 
supervisors and managers across VA chose to ignore eCMS, instead 
allowing the contracting system and runaway associated costs to 
continue as before.
    VA's Office of Inspector General found clear cases of missing and 
incomplete information, and in one test discovered that 83 percent of 
the transactions that should have gone into eCMS were left out. 
Examples such as this dilute the value of eCMS as an accountability 
measure, and in the end veterans and taxpayers bear the loss. While VA 
acknowledged the OIG's findings and concurred with recommendations for 
improvement, it is my wish to see concrete evidence of that 
improvement.
    Reports of other clear cases of contract mismanagement are equally 
disturbing, including bundling contracts as well as splitting 
contracts, as substantiated by the Deputy Assistant Secretary for 
Acquisition and Logistics nearly a year ago.
    As these contracts are mishandled, needed construction is slowed 
considerably and the needed services that a new medical facility would 
provide are further delayed. Again, those who are hurt most by this are 
the veterans.
    If we are to get this right, there must be decisive leadership in 
contracting and accountability for actions at all levels. If eCMS was 
mandated by VA's leadership to be used, why then is it obviously not 
being used? If contracts on a construction project are intended for 
veteran-owned small businesses, why would a large business be competing 
for them? If plans are put in place for an expanded outpatient clinic, 
why then would the size and scope of that project change, not once, but 
twice?
    It is past time for these billions of construction contracting 
dollars to be used effectively, efficiently, and in a timely fashion so 
the veterans who need the services provided by these facilities can 
access them.
    I appreciate everyone's attendance at this hearing and I now yield 
the Ranking Member for an opening statement.

                                 
      Prepared Statement of Hon. Joe Donnelly, Ranking Democratic
          Member, Subcommittee on Oversight and Investigations
    I would like to welcome everyone today, as we have the opportunity 
to conduct the Subcommittee on Oversight and Investigations (O&I) first 
hearing of the 112th Congress. I am honored to serve as the Ranking 
Member and look forward to working with Chairman Johnson and other 
Members on both sides of the aisle. Prior to today's hearing we had the 
opportunity to meet and discuss the O&I agenda for the upcoming year 
and from our discussions I know we have a full agenda, and one we are 
both committed to working in a bipartisan manner as we seek to provide 
the oversight our Nation's veterans rightly deserve.
    Today's hearing is an example of our bipartisan work. The VA 
procurement efforts and initiatives have been problematic and 
controversial at times. It is important that we make certain the VA is 
doing their due diligence prior to awarding a contract. There are many 
steps the VA must take in between initiating procurement project 
proposals and post-awards. Today, we hope the VA will assure us that 
construction projects are fully reviewed to ensure successful delivery 
and management.
    It seems to me that there have been too many VA Office of Inspector 
General reports indicating VA's lack of contract details. Furthermore, 
unrealistic and unreasonable acquisition plans have led to escalated 
contract costs and unmet contractor milestones. One of my concerns is, 
how many times does my staff need to meet with the VA only to find out 
that after millions of dollars have been spent on a contract the 
contractor walks away with these funds after the VA cancels their 
contracts due to unmet deliverables. This is an indication of poorly 
reviewed and administered contracts.
    Furthermore, since the 110th Congress the Committee has been 
providing oversight on contract bundling. I am familiar with these 
issues, having been a Member of the Committee on Veterans Affairs since 
the 110th Congress and participated in various hearings on this topic. 
Contract bundling by Contracting Officers should be reviewed carefully 
as well. Whether it may be awarding contracts or set-aside initiatives 
for veteran owned small businesses, bundled contracts create 
opportunities for fraud and mismanagement. I will be particularly 
interested in the implementation of the VA's Electronic Contract 
Management System (eCMS).

                                 
                 Prepared Statement of Hon. John Barrow
    Thank you Chairman Johnson and Ranking Member Donnelly for holding 
this hearing. In order to fulfill our promises to veterans we need a 
productive and efficient Community Based Outreach Clinic construction 
planning process at VA.
    In order to build the infrastructure our veterans need for the 
health care and services we promised them VA needs to fix their broken 
construction process. Fixing the contract practices at VA is a good 
place to begin fixing the construction process. If done correctly, this 
will increase transparency and get VA's construction process on the 
right track. Increasing transparency is particularly important to me 
and veterans in my district.
    For 2 years my office and my constituents have sought information 
regarding the status of construction for a CBOC to be built in 
Statesboro. The Statesboro area already has a large population of 
underserved veterans that VA predicts will increase by 5 percent in 
each of the next 3 years. Currently, this growing population of 
Veterans is forced to drive over an hour, either to Dublin or Savannah, 
to receive the primary care and mental health treatment they need.
    Over this 2 year period my office and veterans from Statesboro have 
contacted the VISN in Atlanta and the Department of Veterans Affairs in 
DC. But we have only received conflicting and incomplete information 
from VA about where this project is in the approval process.
    I thank the panelists for coming to testify before this Committee 
today. Hopefully, by examining the business practices of VA we can 
learn about specific deficiencies in VA's construction planning system. 
I want to identify pragmatic solutions to make the VA construction 
planning process more efficient and transparent, so that clear cut 
cases like the Statesboro CBOC can gain swift approval and serve our 
Veterans faster.
                                 
       Prepared Statement of Belinda J. Finn, Assistant Inspector
    General for Audits and Evaluations, Office of Inspector General,
                  U.S. Department of Veterans Affairs
                           EXECUTIVE SUMMARY
    Procurement continues to be one of VA's major management 
challenges. Since 2003, the Office of Inspector General (OIG) has 
reported that VA still has much work to do to leverage its purchasing 
power for acquiring goods and services. We have consistently reported 
on the need for increased management visibility and transparency to 
manage acquisitions nationwide, make good procurement decisions, and to 
address the reliability and completeness of the information VA relies 
upon to make acquisition decisions.
    VA has mandated the use of the Electronic Contract Management 
System (eCMS). The eCMS system can reduce costs, integrate and 
standardize procurement processes, reduce workload, and improve 
communications. Additionally, the system provides the functionality to 
create management reports and improve the capability of consolidating 
requirements to support strategic sourcing and acquisition decisions. 
Unfortunately, we continue to see low levels of compliance associated 
with VA Contracting staff using this system and when the system is 
used, the information in the system is incomplete. VA cannot rely on 
the information in eCMS to determine the total number of procurements 
accurately or the total estimated value of these procurements when 
information in the system is incomplete. Reports generated through eCMS 
are incomplete and cannot be relied upon when making management 
decisions. Until VA enforces compliance for the mandatory use of eCMS, 
VA cannot benefit from the full capabilities of the system.
    Ongoing audit work at the VA's National Acquisition Center (NAC), 
VA's largest contracting activity and a major organizational component 
reporting directly to the Office of Acquisition, Logistics, and 
Construction (OALC) continues to identify problems in the use of eCMS 
to develop and maintain national contracts. Without senior leadership's 
attention focused on ensuring eCMS usage and capturing VA procurement 
information in a reliable central database, VA will not achieve the 
improvement needed in acquisition service delivery from an enterprise-
wide perspective.
    A follow-up audit on VA's construction program found that VA had 
established a Quality Assurance (QA) program and procedures to resolve 
previously reported problems. We reported that the QA program needed 
written policies, procedures, performance measures, and a staffing plan 
to ensure it met its responsibilities. Additionally, the QA program 
could not oversee contract schedule slippage because it was focused on 
performing field acquisition reviews. The OALC Executive Director 
agreed with our findings and planned to implement corrective actions.
    Other OIG components have performed work related to VA construction 
contracts including our Office of Contract Review which recently began 
conducting pre-award reviews of claims related to construction 
contracts. Our Office of Investigations annually briefs 14,000 VA 
employees on fraud indicators, and has assigned a criminal investigator 
liaison to each VA facility with construction contracts valued at $10 
million or more.

                               __________

    Mr. Chairman and Members of the Subcommittee, thank you for this 
opportunity to testify on the findings of the Office of Inspector 
General (OIG) related to the Department of Veterans Affairs (VA) 
procurement processes. I am accompanied today by Cherie Palmer, 
Director, Chicago Office of Audits and Evaluations.

Background

    Procurement continues to be one of VA's major management 
challenges. Our oversight of VA's procurement activities including 
information systems and the Construction Program is performed through 
audits and reviews. Since 2003, we have reported that VA still has much 
work to do to leverage its purchasing power acquiring goods and 
services. We have consistently reported on the need for increased 
management visibility and transparency to manage acquisitions 
nationwide, make good procurement decisions, and to address the 
reliability and completeness of the information VA relies upon to make 
acquisition decisions.
    VA has one of the largest procurement programs in the Federal 
Government with annual expenditures of more than $10.3 billion for 
supplies and services, including construction. Drugs, medical supplies 
and equipment, automated data processing equipment and services, and 
other critical patient care items must be procured and distributed to 
VA's health care facilities that comprise the largest health care 
delivery system in the country. The Office of Acquisition and Logistics 
(OAL) is responsible to the VA Secretary for providing goods and 
services to support the mission of VA through the Executive Director, 
Office of Acquisition, Logistics, and Construction (OALC).
    The OALC Executive Director implemented VA's Electronic Contract 
Management System (eCMS) as the single mechanism for generating and 
managing procurement actions. OALC issued Information Letter 049-07-06, 
dated June 15, 2007, implementing and mandating the use of eCMS. The 
eCMS provides a centralized database for procurement actions and 
replaces a primarily manual and paper-based contract management 
operation used throughout VA. Using a web-based platform, it was 
designed to provide a fully integrated electronic acquisition platform 
that includes the seamless flow of information and data from all 
stakeholders and systems from initial requisitioning through closeout. 
The benefits of the system included the ability to reduce costs, 
integrate and standardize procurement processes, reduce workload, and 
improve communications. Additionally, the system provides the 
functionality to create management reports and improve the capability 
of consolidating requirements to support strategic sourcing and 
acquisition decisions. Unfortunately, we continue to see low levels of 
compliance associated with contracting staff using this mandated system 
and when the system is used, the information in the system is often 
incomplete.

OIG Audit Results on eCMS

    In July 2009, we issued Audit of VA Electronic Contract Management 
System (Report Number 08-00921-181, published July 30, 2009). 
Specifically, we examined whether information in eCMS enables VA to use 
the system as a comprehensive management tool to improve its 
procurement processes and information. We found that eCMS was not used 
effectively and procurement information in eCMS was incomplete. 
Management did not ensure the required use of eCMS and there was no 
oversight program to monitor staff compliance with Information Letter 
(IL) 049-07-06. We reported that VA cannot achieve the expected benefit 
of eCMS, including the ability to integrate and standardize procurement 
processes, reduce workload, and improve communication without complete 
information. VA cannot rely on eCMS to determine the total number of 
procurements accurately or the total estimated value of these 
procurements when information in the system is incomplete.
    During our audit, we compared just over 6,700 procurement actions 
valued at about $1.7 billion in VA's Integrated Funds Distribution, 
Control Point Activity, Accounting and Procurement (IFCAP) system to 
information in eCMS. We found that just over 1,150 (17 percent) of the 
procurement actions (valued at about $319 million) were recorded in 
eCMS, while the remaining, nearly 5,600 (83 percent) of actions (valued 
at about $1.4 billion) were not.
    We also compared 1,450 awarded procurement actions from the General 
Services Administration Federal Procurement Data System-Next Generation 
(FPDS-NG) and found just over 700 (49 percent), valued at about $1.4 
billion, were recorded in eCMS and nearly 300 (21 percent) of 1,450 
procurement actions, valued at about $91 million, were only partially 
completed in eCMS. Information on nearly 450 (30 percent) of 1,450 
procurement actions (valued at about $234.7 million) were not recorded 
in eCMS. Therefore, we concluded that the reports generated by eCMS 
were unreliable and could not be used when making management decisions.
    To better understand why VA contracting staff were not effectively 
leveraging the use of eCMS, we conducted a survey of eCMS users. 
Responses to our survey indicated staff needed additional training to 
fully understand and comprehensively use the capability of eCMS. 
Twenty-two percent of the respondents considered the quality of 
training provided inadequate. Also, management and staff told us the 
system is cumbersome and takes too much time to process procurement 
actions.
    We also found the Information Letter provided unclear guidance 
pertaining to the types of procurements that are required to be 
recorded in eCMS and does not ensure consistency and compliance across 
all VA business lines that could potentially be misinterpreted. 
Finally, we reported that award data for contracts in eCMS does not 
electronically transfer to IFCAP resulting in a duplication of input 
effort for procurement staff. We recommended integrating eCMS with 
IFCAP to provide VA with improved acquisition efficiency and reporting. 
In total, we made eight recommendations of which three remain 
unimplemented (or ``open'') today; these open recommendations include 
implementing a VA-wide eCMS policy; establishing a plan to evaluate the 
technical performance of eCMS; and integrating eCMS with IFCAP.
    In subsequent audit work and as VA focused on deploying funds for 
the American Recovery and Reinvestment Act of 2009 (ARRA), we focused 
on how well VA monitored the process for awarding ARRA non-recurring 
maintenance contract awards. To accomplish this work, auditors 
attempted to review related procurement information in eCMS. On 
February 18, 2009, OMB issued Memorandum M-09-10, the initial 
Government-wide guidance for Recovery Act programs and activities. On 
March 17, 2009, OALC issued IL001AL-09-07, ``Implementing Guidance for 
Contracting Awards under American Recovery and Reinvestment Act of 
2009'', which states that ``without exception all Recovery Act 
contracts regardless of dollar value, must be generated in eCMS''.
    On March 15, 2010, we published the American Recovery and 
Reinvestment Act Oversight Advisory Report--Non-Recurring Maintenance 
Contract Award Monitoring Processes (Report Number 09-01814-97). We 
found eCMS data reliability and system problems were continuing to 
inhibit OALC's ability to effectively monitor Recovery Act procurements 
and to ensure non-recurring maintenance contract awards met Recovery 
Act requirements and accountability, efficiency, and transparency 
objectives. Our audit showed that OALC needed to work with Veteran 
Health Administration (VHA) contracting officers to promote uniformity 
in the usage of eCMS, improve the completeness and accuracy of eCMS 
data, and increase awareness of eCMS system problems that affect the 
reliability of eCMS information.
    During work on our national Audit of Oversight of Patient 
Transportation Contracts (Report Number 09-01958-155 published, May 17, 
2010), we found that VHA missed opportunities to solicit new 
competitive contracts and make contract awards. While performing audit 
work we experienced significant challenges in obtaining a complete 
universe of contracts due to the incomplete data in eCMS. Because VA 
lacked a system-wide inventory of contracts, we developed a technique 
to use the FPDS-NG system information to identify patient 
transportation contracts by using the product service code. We reported 
that Veterans Integrated Service Network contract managers did not 
provide the oversight to ensure that new solicitations were timely to 
avoid granting extensions in order to prevent a lapse of service. 
Further, contracts were extended that circumvented the Federal 
Acquisition Regulation (FAR) instead of ensuring full and open 
competition. These conditions clearly inhibit VA from obtaining the 
best price and or value for the goods and services being acquired. 
According to the Director of VA's eCMS Project, the milestone function 
capabilities in eCMS should be used to monitor and plan for contracts 
that are due to expire. Utilizing this function will help ensure timely 
follow-up on procurement actions. VA officials recognized that it is 
important to establish milestones within eCMS to provide increased 
management visibility and oversight, but information supporting some 
contracting actions was missing.
    In a review of the National Cemetery Administration (NCA) we 
assessed how well NCA implemented effective policies and procedures to 
ensure accountability and transparency for $50 million in ARRA funds. 
We published Review of the Management of Recovery Act Funds for 
Monument and Memorial Repairs (Report Number 09-01814-263), on 
September 30, 2010. We again found and reported that NCA did not ensure 
complete procurement information on ARRA-funded projects was recorded 
in eCMS.
    Our results showed non-compliance with the requirement that all 
contracts, regardless of dollar value, must be recorded in eCMS. As a 
result, we concluded VA lacks effective management and oversight 
controls needed to monitor national contract awards. For this project, 
we reviewed 36 of the 56 ARRA projects (obligated as of July 10, 2009) 
and identified 34 equipment and national shrine repair projects valued 
at $2.5 million that did not have the required procurement information, 
such as acquisition plans, contracts, purchases orders, price quotes, 
and price analysis recorded in eCMS.
    We are currently conducting an audit at VA's National Acquisition 
Center (NAC)--VA's largest contracting activity and a major 
organizational component reporting directly to OALC. Again, we have 
concerns that eCMS is not fully utilized to develop and maintain 
national contracts and related files at the NAC. Although OALC mandated 
eCMS usage, it did not adequately ensure the required use of eCMS by 
providing the oversight needed to monitor eCMS compliance at the NAC. 
We are reviewing 30 national contracts with a total estimated value of 
$2.4 billion. Our preliminary results show that contract information 
was not in eCMS for a number of contracts. These contracts included 
acquisitions for high cost technical medical equipment, such as 
magnetic resonance imaging, radiation therapy, diagnostic ultrasound, 
and nuclear imaging. Further, while our preliminary review of hard copy 
contract files shows that contract development and award actions were 
generally in accordance with Federal and VA Acquisition Regulations, 
but documentation was missing in eCMS. For example, eCMS information 
did not include the solicitations, price negotiation memorandums, and 
awarded signed contracts for all national contracts.
    We also learned that the NAC utilizes its own Contract Management 
(CM) system and requires NAC contracting officers to enter and maintain 
data into this system in addition to eCMS. This is because the other 
Government agencies that purchase from the NAC's national contracts 
cannot access the contract information available in eCMS. The CM system 
also provides an Internet electronic catalog function that allows non-
VA customers to access NAC contract data. According to the NAC 
Executive Director, neither the CM system nor eCMS offers a complete 
acquisition solution; therefore, both systems are needed.
    Reports generated from eCMS, such as the Procurement Action Lead 
Time, cannot be relied upon when making procurement decisions because 
the information in eCMS is either missing or incomplete. In addition, 
reliance upon two incompatible systems creates a duplication of effort 
resulting in an inefficient use of time and resources. OALC is 
developing an upgrade to eCMS that includes integrating the functions 
available in the CM system into eCMS and making the eCMS contract data 
available to its non-VA customers. The upgrade has been delayed from 
its initial September 2010 completion date until August 2011. OALC 
provided limited oversight to monitor eCMS compliance and ensure eCMS 
system capabilities adequately support NAC operations. Without senior 
leadership's attention focused on ensuring eCMS usage and capturing VA 
procurement information in a reliable central database, VA will not 
achieve the improvement needed in acquisition service from an 
enterprise-wide perspective.
    We have reported significant lapses in VA contracting staff 
leveraging the use of eCMS since 2009. VA's own internal auditors have 
also reported on how information is incomplete in the eCMS system. For 
example, the Acquisition Assessment of the NAC published July 20, 2010, 
performed by contractors supporting VA's Office of Business Oversight 
in accordance with the Office of Management and Budget's Circular A-
123, found that NAC staff were not consistently using eCMS to document 
contract actions as required. The NAC cannot achieve the expected 
benefits of eCMS without complete documents and files related to each 
procurement action being entered into the system.
    In spite of numerous OIG reports citing deficiencies in the use of 
eCMS, VA still needs to improve compliance and use of this mandatory 
system to better leverage VA's buying power. Since our reviews, VA has 
moved forward with the testing for integration of eCMS and IFCAP to 
ensure that technical performance of eCMS improves. VA has acknowledged 
that it cannot fully realize the benefits of eCMS without ensuring that 
the tool performs to technical specifications, that staff receive the 
necessary training, and that eCMS properly integrates with existing and 
planned financial systems. However, in spite of this acknowledgement, 
several of our recommendations remain unimplemented and we continue to 
find a lack of compliance, accountability, and transparency with eCMS 
in our audit work.

OIG Audits on VA's Construction Program

    In FY 2009, we performed a follow-up audit to determine whether VA 
implemented the corrective action plans in response to recommendations 
made in our Audit of Veterans Health Administration Major Construction 
Contract Award and Administration Process (Report Number 02-02181-79, 
February 8, 2005). Our 2005 report included 12 recommendations that 
addressed needed improvements in contract award, administration, and 
project management. At that time, the Under Secretary for Health 
concurred with the 2005 report recommendations and provided corrective 
action plans.
    We reported that VA had strengthened management control and 
oversight of the major construction contracting process with the 
implementation of 10 of the 12 recommendations from the OIG's 2005 
report. Specifically, we found that VA had addressed 10 of the 12 
recommendations through the establishment of a Quality Assurance (QA) 
program and procedures to resolve significant differences between bid 
prices and Architecture and Engineering (A/E) estimates.
    VA established the QA Service to oversee VA's major construction 
contracts and ensure the contracts complied with Federal and VA 
acquisition regulations and VA policies and procedures. However, we 
reported that VA had no assurance that the QA Service is effectively 
monitoring major construction contracts because it had no written 
policies, procedures, and performance measures. Further, the QA Service 
did not have a staffing plan to ensure it met all of its QA program 
responsibilities.\1\
---------------------------------------------------------------------------
    \1\ At the time OIG issued its 2005 report, VHA's Office of 
Facilities Management (FM) was responsible for managing all major 
construction projects. In February 2007, FM was reorganized and 
realigned to the Office of the Secretary as the new Office of 
Construction and Facilities Management (CFM) under the direction of the 
Deputy Secretary. In October 2008, VA established the Office of 
Acquisition, Logistics, and Construction (OALC), which now includes 
CFM. The new office is headed by the Executive Director reporting to 
the Deputy Secretary.
---------------------------------------------------------------------------
    VA did not however, fully implement the 2005 report recommendations 
to implement more effective project management oversight to manage and 
reduce contract schedule slippage from a national perspective. In 
response to the 2005 report recommendation, VHA advised that the new QA 
Service oversight function would review the existing process for 
assessing contract slippage and the method by which feedback is 
provided to the field. However, we found that QA had not performed 
these assessments or provided oversight of contract schedule slippage 
because its efforts were focused on performing field acquisition 
reviews of construction contracts. This lack of oversight could result 
in significant contract slippage and increased construction costs. In 
addition, VA did not fully implement the 2005 report recommendation to 
establish an effective program to ensure the timely close out of major 
construction contracts and identify unused funds that could be returned 
to the construction reserve account.
    In our follow-up report, we offered recommendations to the 
Executive Director for OALC to implement an effective mechanism to 
monitor contract schedule slippage and minimize construction contract 
delays and to establish an effective mechanism to ensure the timely 
close out of major construction contracts. We also recommended the 
Executive Director develop written QA policies and procedures, program 
performance measures addressing all QA Service areas of 
responsibilities, and a formal staffing plan to ensure all QA Service 
responsibilities are met. The Executive Director for OALC agreed with 
our findings and recommendations and provided plans to implement 
acceptable corrective actions. We will continue to assess the 
effectiveness of VA's construction program in future work.

Other OIG Work Related to VA Construction Contracts

    Office of Contract Review--In FY 2011, our Office of Contract 
Review began conducting pre-award reviews of claims related to 
construction contracts. We do not yet have sufficient data upon which 
to base an opinion on the significance of performance issues impacting 
VA construction activities from a national perspective. Once we have 
completed a sufficient number of reviews, we will offer the 
Subcommittee a briefing on our findings and conclusions.
    Crime Awareness Briefings--In order to help deter crime, OIG 
criminal investigators provide approximately 200 crime awareness 
briefings each fiscal year to about 14,000 employees at VA facilities 
nationwide. These briefings are intended to ensure the attendees are 
aware of the many types of fraud and criminal activity that can 
victimize VA, VA employees, and veterans. These briefings have resulted 
in additional referrals of alleged criminal activity and have enhanced 
our partnership with VA Police in helping provide a safe and secure 
environment for veteran patients and employees.
    Criminal Investigator Liaisons--Criminal investigators are assigned 
to VA facilities with contracts having a value of $10 million or more, 
to serve in a liaison capacity sharing information with contracting 
officers, contracting officer's technical representatives, program 
managers, and prime and sub-contractor staff to deter, detect, and 
investigate potential construction fraud.
    VA Acquisition Academy--In concert with the Department of Justice 
Antitrust Division, the Counselor to the Inspector General and OIG 
investigators provide instruction to VA contracting officers and 
interns at the VA Acquisition Academy in Frederick, MD. The training 
covers the OIG's role, criminal conduct relating to procurement, audit 
issues relating to procurement, and how to avoid or prevail in 
disputes.
    Procurement Fraud Task Forces--The OIG regularly participates in 
regional and national procurement fraud meetings and conferences to 
learn of effective programs and strategies to address procurement fraud 
Government-wide. In anticipation of fraud in connection with Recovery 
Act projects, we arranged for the Department of Justice's Antitrust 
Division to provide to VA's Deputy Assistant Secretary for Acquisition 
and Materiel Management and his staff.

Conclusion

    While VA has recognized deficiencies in its acquisition processes 
and infrastructure, they have yet to exercise sufficient organizational 
discipline to ensure that its primary management oversight tool 
provides the needed transparency to manage a multi-billion dollar 
acquisition program. We believe VA should continue its efforts to 
leverage the full capacity of eCMS and integrate it into existing and 
future financial systems.
    Mr. Chairman, this concludes my statement. We would be pleased to 
answer any questions that you or other Members of the Subcommittee may 
have on these issues.

                                 
     Prepared Statement of Glenn D. Haggstrom, Executive Director,
  Office of Acquisition, Logistics, and Construction, U.S. Department
                          of Veterans Affairs
    Chairman Johnson, Ranking Member Donnelly, and distinguished 
Members of the Committee, thank you for the opportunity to appear 
before you today to discuss the Department of Veterans Affairs (VA) 
acquisition, logistics, and facilities management, operations. It is a 
privilege for me to represent the many dedicated and hard-working 
professionals who provide mission-critical support everyday to ensure 
necessary contracts, logistics support, and facilities are available 
for some of our Nation's most extraordinary citizens, Veterans. I am 
accompanied here today by Mr. Jan Frye, VA's Deputy Assistant Secretary 
for Acquisition and Logistics (OAL) and the Department's Senior 
Procurement Executive, Mr. Robert Neary, Acting Director for 
Construction and Facilities Management (CFM) and Mr. Jim Sullivan, 
Director Office of Asset Enterprise Management.
    The Office of Acquisition, Logistics and Construction (OALC) was 
formed in October of 2008 to support the acquisition, logistics, and 
construction needs of the Department of Veterans Affairs (VA). These 
organizations were brought together to provide an enterprise approach 
to policy, process, and systems necessary to support these similar 
functions resident in each of the VA administrations. The core 
responsibilities and an integrated acquisition model were affirmed by 
the Secretary on April 2010. Together, these structural and process 
changes will enable the Department to serve our internal customers' 
needs and ultimately our Veterans in a more efficient manner.
    OALC has six fundamental roles in the operation of the Department: 
achieve clear ownership and accountability of the VA contracting 
mission; gain control over acquisition and facilities management 
information; effectively manage the acquisition life cycle for 
contracting and construction; develop critical human capital resources; 
enhance information management to support corporate decision-making; 
and finally, improve service delivery.
    With the focus of today's hearing on VA's electronic contract 
management system and the major construction program, I'd like to 
inform the Committee on where we stand with regard to completing the 
recommendations identified by the OIG in each of the reports. 
Currently, OALC has two VAOIG reports with 4 recommendations that 
remain open.
    As part of OALC's continuous improvement process, the findings and 
recommendations of all OIG and GAO reports are captured, analyzed, 
tracked, and acted upon.
    First, the ``Audit of VA Electronic Contract Management (eCMS),'' 
published in July of 2009 identified eight recommendations, five of 
which the OIG has closed. Significant progress has been made through 
management actions to complete system user training with training teams 
available to the administrations upon their request, putting in place 
oversight programs at the administration and headquarters level to 
review eCMS usage, and the ability to perform real property leasing 
actions within the system is in use. Three recommendations remain open.
    The recommendation to develop and implement a VA-wide eCMS policy 
and handbook to ensure consistent use and compliance with the system 
requirements is nearing completion. We completed developing and 
providing an integrated, role-based matrix for using the individual 
eCMS User Guides in the December 2010 release of the system. The 
remaining action to complete policy revision will be completed by the 
end of this month. The second open recommendation deals with the 
technical performance of the system. In response to this we completed 
phase one of our technical refresh in January 2010 with phase two 
scheduled to be completed in June of this year. The refresh includes 
server replacement, software changes to increase performance, and 
expanded data repository capacities. Finally, the remaining 
recommendation was to determine the feasibility of integrating eCMS 
with the Integrated Funds Control Point Activity, Accounting and 
Procurement System to streamline the procurement process. The 
integration software has been completed and tested and is scheduled for 
production roll out the first quarter of fiscal year 2012.
    The ``Audit of VA's Major Construction Contract Award and 
Administration Process,'' identified four recommendations with one 
still remaining open. Successfully closed were recommendations to 
establish effective mechanisms to monitor contract slippage and ensure 
the timely close out of major construction projects, and develop a 
staffing plan to ensure quality assurance responsibilities are met. In 
the remaining open recommendation OALC is developing written quality 
assurance policies and procedures, and program performance measures 
addressing all QA Service areas of responsibilities. Phase one of this 
recommendation was completed in December of 2010 and phase II will be 
completed in June of this year at which time we will recommend to the 
IG that the report be closed.
    Also, in 2009 the Government Accountability Office issued a report 
on VA major construction noting that VA generally met GAO best 
practices for a Federal major construction program in 10 of 12 areas. 
From that report came two recommendations that VA fully supported and 
is in the process of implementing, first the use of an integrated 
master schedule and second conducting a risk analysis based on the 
project's cost, schedule, and complexity. Both of these recommendations 
will be completed this fiscal year at which time VA will have 
implemented all 12 of GAO's best practices.
    As proud as we are of the many improvements in VA's acquisition and 
facilities management operations, we recognize the need for continuous 
improvement and will work diligently to maintain the confidence of the 
American public and the Congress.
    Mr. Chairman, we appreciate the opportunity to discuss VA's 
acquisition, logistics, and construction operations with you. My 
colleagues and I are available for your questions.
                   MATERIAL SUBMITTED FOR THE RECORD

U.S. Department of Veterans
                                                         Memorandum

Date: April 28, 2011

From: Executive Director, Office of Acquisition, Logistics, and 
    Construction (001ALC)

Subj: Due Outs from April 12 Testimony (VAIQ 7085980)

To: Director for Congressional Affairs (009)

    1. In response to a request for deliverables from the April 12, 
2011, testimony to the House Committee on Veterans Affairs Subcommittee 
on Oversight and Investigations hearing entitled, ``Inspect What You 
Expect: Construction Contracting Practices at the Department of 
Veterans Affairs,'' the Office of Acquisition, Logistics, and 
Construction provides the following information.

    a. Deliverable: Regarding the electronic Contract Management System 
(eCMS), please provide Help Desk records that show the numbers of help 
tickets called in and resolved as far back as possible. Categorize them 
as designated in the Enterprise Acquisition System (EAS), e.g., 
password resets, the various level of calls, and response times.

    Response: The EAS analyzes eCMS Service Desk tickets and generates 
itemized and summarized reports through the Veterans Affairs 
Acquisition Help Desk tool set. The reports include a high-level data 
summary entitle eCMS Service Desk Tickets Summary Report and a 
detailed, record-level report eCMS Service Desk Tickets Detailed Report 
(see attachment 1). For clarity, a Sub-Category Definitions is also 
provided at attachment 1. [The detailed report will be retained in the 
Committee files.]
    Each record in the detailed report includes the following 
attributes: ticket number; date submitted; title; category; sub-
category; priority; ; and status. The report can be filtered by 
attributes for a more detailed analysis.

    b. Deliverable: Please provide a list of training course materials 
VA uses for eCMS training.

    Response: The compact disc (CD) provided by the EAS Service 
includes eCMS classroom training materials, online tutorials, and user 
guides typically delivered during the EAS Service scheduled training 
sessions and through VA's Acquisition Resource Center online access. A 
copy of the CD and the list of the data contained on the CD are at 
attachment 2. [The CD is being retained in the Committee files.]

    c. Deliverable: Please provide the year of implementation of the 
Paragon System and the initial cost. Provide the documented annual cost 
of the system starting in fiscal year 2005.

    Response: The Office of Construction and Facilities Management 
first began using the Paragon System in 1998 at the cost of $290,000. 
The annual costs, commencing in fiscal year (FY) 2005, are as follows:

    FY 2005-$385,000
    FY 2006-$308,000
    FY 2007-$478,000 (50 additional licenses)
    FY 2008-$308,000
    FY 2009-$500,500
    FY 2010-$855.000 (250 more licenses and enterprise version, Web 
hosting)
    FY 2011-$600,000
                             Attachments(2)
                           Glenn D. Haggstrom
                              Attachment 1
                eCMS Servicer Desk Ticket Summary Report
                     (Cumulative through 4/19/2011



------------------------------------------------------------------------
                                                                Total
               Category                    Sub-Category        Tickets
------------------------------------------------------------------------
ARC                                    Announcement                   3
                                        Request
                                      ----------------------------------
                                       Community Request             44
                                      ----------------------------------
                                       Content Request               50
                                      ----------------------------------
                                       Online Registration           29
                                      ----------------------------------
                                       Performance                   19
                                      ----------------------------------
                                       Technical Support             54
------------------------------------------------------------------------
Contract                               Action Maintenance          1653
Module...............................
                                      ----------------------------------
                                       Delete Action                490
                                      ----------------------------------
                                       Document Management          372
                                      ----------------------------------
                                       Enhancement Request           76
                                      ----------------------------------
                                       IAE                          464
                                      ----------------------------------
                                       Performance                  152
                                      ----------------------------------
                                       System Errors                314
                                      ----------------------------------
                                       User Maintenance            1111
------------------------------------------------------------------------
Contracting Module                     Award Action                 140
                                      ----------------------------------
                                       Funding Actions                4
                                      ----------------------------------
                                       Other Desktops                 8
                                      ----------------------------------
                                       Planning Actions              15
                                      ----------------------------------
                                       Post Award--                   1
                                        Contract Mods
                                      ----------------------------------
                                       Post Award--                   4
                                        Delivery/Task
                                        Orders
                                      ----------------------------------
                                       Post Award--Order              1
                                        Mods
                                      ----------------------------------
                                       Procurement Actions          117
                                      ----------------------------------
                                       System Errors                 18
                                      ----------------------------------
                                       User Maintenance             102
                                      ----------------------------------
                                       Views                          4
------------------------------------------------------------------------
eCMS Homepage                          Other                         36
                                      ----------------------------------
                                       User Maintenance               4
                                      ----------------------------------
                                       Views                          3
------------------------------------------------------------------------
Epic                                   Document Server                4
                                      ----------------------------------
                                       IFCAP Retrieval              245
                                      ----------------------------------
                                       Performance                    3
                                      ----------------------------------
                                       Planning Module               45
                                      ----------------------------------
                                       Solicitation                  11
                                        Evaluation
                                      ----------------------------------
                                       User Maintenance              45
------------------------------------------------------------------------
FAC                                    CLP Tracker                  141
                                      ----------------------------------
                                       FAC C                        911
                                      ----------------------------------
                                       FAC COTR                       5
                                      ----------------------------------
                                       FAC PPM                      102
                                      ----------------------------------
                                       PAWS                           1
                                      ----------------------------------
                                       Performance                    3
------------------------------------------------------------------------
IAE                                    CCR                            8
                                      ----------------------------------
                                       eBuy                          57
                                      ----------------------------------
                                       FBO                          247
                                      ----------------------------------
                                       FPDS                         679
                                      ----------------------------------
                                       IFCAP                          5
                                      ----------------------------------
                                       Orca                           1
------------------------------------------------------------------------
IFCAP                                  Configure IFCAP                9
Retrieval............................   Instances(s)
                                      ----------------------------------
                                       IFCAP Retrieval               39
                                        Status
                                      ----------------------------------
                                       Retrieve IFCAP                15
                                        Requisition Data
------------------------------------------------------------------------
MicroStrategy Reporting Tool           Dashboard                      8
                                      ----------------------------------
                                       Performance                   18
                                      ----------------------------------
                                       Report Request                61
                                      ----------------------------------
                                       System Errors                  7
                                      ----------------------------------
                                       User Account                  63
------------------------------------------------------------------------
Planning                               Report Request                 3
Module...............................
------------------------------------------------------------------------
Policy                                 Other                         14
------------------------------------------------------------------------
Solicitation Evaluation                Evaluation                     3
------------------------------------------------------------------------
Training                               Accounts                      30
Environment..........................
                                      ----------------------------------
                                       Certificates                   2
                                      ----------------------------------
                                       Other                         47
------------------------------------------------------------------------
Vendor Portal                          Performance                    7
                                      ----------------------------------
                                       Solicitations                 42
                                      ----------------------------------
                                       User Management              368
------------------------------------------------------------------------
(no data)                              (no data)                      1
------------------------------------------------------------------------
                                       Cumulative Ticket           8538
                                        Total
------------------------------------------------------------------------


             [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
                                                            


                  eCMS Service Desk Tickets by Category
                     (Cumulative through 04/10/2011)
------------------------------------------------------------------------
                   Category                           Total Tickets
------------------------------------------------------------------------
ARC                                             199
------------------------------------------------------------------------
Contract Module                                 4632
------------------------------------------------------------------------
Contracting Module--OBE                         414
------------------------------------------------------------------------
eCMS Homepage                                   43
------------------------------------------------------------------------
Epic                                            353
------------------------------------------------------------------------
FAC                                             1163
------------------------------------------------------------------------
IAE                                             997
------------------------------------------------------------------------
IFCAP Rtrvl                                     63
------------------------------------------------------------------------
Micro Strat                                     157
------------------------------------------------------------------------
Planning Module                                 3
------------------------------------------------------------------------
Policy                                          14
------------------------------------------------------------------------
Solicitation Eval.                              3
------------------------------------------------------------------------
Training Environment                            79
------------------------------------------------------------------------
Vendor Portal                                   417
------------------------------------------------------------------------
No Data                                         1
------------------------------------------------------------------------
Cumulative Ticket Total                         8538
------------------------------------------------------------------------

                              Attachment 2
VA eCMS Classroom Training Material:

2-Day Training

    1.  ARC-eCMS Refresher Training Agenda
    2.  ARC-eCMS Refresher Training Presentation

4-Day Training

    1.  ARC-eCMS Certification Training for Contracting Agenda
    2.  ARC-eCMS Certification Training for Contracting Exercises
    3.  ARC-eCMS Certification Training for Contracting Presentation
    4.  VA eCMS Classroom Training Exercises (CAATS)

Reviewer Role-Based Training

    1.  ARC-eCMS Reviewer Training Agenda
    2.  ARC-eCMS Reviewer Training Exercises
    3.  ARC-eCMS Reviewer Training Presentation

Supervisor Role-Based Training

    1.  ARC-eCMS Supervisor Training Agenda
    2.  ARC-eCMS Supervisor Training Presentation
    3.  ARC-eCMS Supervisor Training Exercises

Training for Procurement and Purchasing
    1.  ARC-eCMS Certification Training for Purchasing Agenda
    2.  ARC-eCMS Certification Training for Purchasing Exercises
    3.  ARC-eCMS Certification Training for Purchasing Presentation

VA eCMS Online Tutorials:

     1.  Action Lookup Online Tutorial
     2.  Construction Contracts Online Tutorial
     3.  Create Action from an Existing Action Online Tutorial
     4.  Document Generation Online Tutorial
     5.  e-Buy Online Tutorial Part 1
     6.  e-Buy Online Tutorial Part 2
     7.  Enterprise System Administration Online Tutorial
     8.  FBO Announcing Online Tutorial
     9.  FPDS Reporting Online Tutorial
    10.  Order Creation Online Tutorial
    11.  Overview of the Briefcase Tab Online Tutorial
    12.  Overview of the Summary Tab Online Tutorial
    13.  Overview of the Data Values Tab Online Tutorial
    14.  Overview of the Documents Tab Online Tutorial
    15.  Overview of the Milestones Tab Online Tutorial
    16.  Vendor Portal Posting Online Tutorial
    17.  Views Online Tutorial
    18.  ReadMe File Instructions

VA eCMS User Guides:

     1.  eCMS Acquisition Planning Guide Contracting Offices
     2.  eCMS Acquisition Planning Guide Program Offices
     3.  eCMS Acquisition Review Guide
     4.  VA eCMS Action and Desktop Management Guide
     5.  eCMS CMTS User Guide
     6.  VA eCMS Construction Contracts Guide
     7.  VA eCMS Contract Creation Guide
     8.  VA eCMS Document Creation & Formatting Guide
     9.  VA eCMS Enterprise System Administration Guide
    10.  VA eCMS Evaluators Guide
    11.  VA eCMS External Vendor Guide
    12.  VA eCMS FBO Announcing Guide
    13.  VA eCMS FCO Reporting Guide
    14.  VA eCMS FPDS Reporting Guide
    15.  eCMS FSS and eBuy User Guide
    16.  VA eCMS IFCAP Retrieval Guide
    17.  VA eCMS Manager's Guide
    18.  VA eCMS Milestone Plans Guide
    19.  VA eCMS Multiple PRs and Awards Guide
    20.  VA eCMS Order Creation Guide
    21.  VA eCMS Quick Reference Guide
    22.  VA eCMS Recovery Act Guide
    23.  VA eCMS Reviewer's Guide
    24.  VA eCMS Solicitation Evaluation Guide
    25.  VA eCMS Solicitation Guide for the NAC
    26.  VA eCMS Solicitation Management Guide
    27.  VA eCMS Utilizing Views Guide
    28.  VA eCMS Vendor Portal Guide
    29.  eCMS Vendor's Guide

                                 

                                     Committee on Veterans' Affairs
                       Subcommittee on Oversight and Investigations
                                                    Washington, DC.
                                                       May 10, 2011
The Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Mr. Secretary:

    In reference to the Oversight and Investigations Subcommittee 
hearing entitled ``Inspect What You Expect: Construction Contracting 
Practices at VA'' that took place on April 13, 2011, I would appreciate 
it if you could answer the enclosed hearing questions by the close of 
business on June 14, 2011.
    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 materials for all full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively and 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 
Diane Kirkland at [email protected]. If you have any 
questions, please call 202-225-3527.
            Sincerely,

                                                       Bill Johnson
                                                           Chairman
    EG/dk

                               __________

                       The Honorable Bill Johnson
               Oversight and Investigations Subcommittee
                  House Committee on Veterans Affairs
 ``Inspect What You Expect: Construction Contracting Practices at VA''
                         April 13, 2011 Hearing
    Question 1: What is the total cost for the implementation of eCMS?

    Response: The total development cost for Electronic Contract 
Management System (eCMS) was approximately $13.4 million. The cost 
includes requirements definition, software licenses, training, and 
system development. The $20 million figure provided at the April 13th 
hearing included an additional approximately $6.5 million attributable 
to maintenance and operational support costs incurred during the 
initial post-implementation years, from 2003 through 2006.

    Question 2: Given the very similar capabilities between eCMS and 
Paragon, are any efforts being made to consolidate the two, remove 
duplicative functions, and provide a cost saving?

    Response: Although, both systems contain contract documentation, 
eCMS is a contract writing system established to standardize and 
replace paper contract files; and Paragon is a project management 
system used during post-award to manage major construction projects and 
track some aspects of the administration of the construction contract 
during the construction period.
    VA's eCMS is a Web-based contract management system which provides 
pre-award, award, and post-award functionality for all new procurement 
actions valued over $3,000. It has a limited ability to transfer data 
and/or documents (i.e., specifications and drawings) to FedBizOpps; 
however, documents can be uploaded directly through FedBizOpps.
    Paragon is a commercial off-the-shelf (COTS) package that the 
Office of Acquisition, Logistics, and Construction (OALC), Office of 
Construction and Facilities Management (CFM) has used for approximately 
13 years to manage and administer their major construction program 
within the VA, primarily, in the field. It integrates all facets of 
program management (post-award) into a single unified system. It is the 
software tool utilized by Resident Engineers in the field, to 
administer the construction phase of the project on a daily basis. 
Specifically, Paragon manages and tracks submittals, trends, meeting 
minutes, daily logs, requests for information, proposal requests, 
correspondence and invoicing. In addition, the Resident Engineers 
generate contract modifications within their limited authority through 
Paragon to correct technical deficiencies and to keep the project on 
schedule and within budget as it relates to the invoices and schedules.
    A dialogue began approximately 2 years ago with eCMS and Paragon 
representatives outlining the desire for an electronic transfer of 
contract data without duplication. As of this quarter, the data 
exchange has been completed and the automated uploading is successfully 
being accomplished.

    Question 3: VetBizOpps is a self-certification site for businesses 
and VA now verifies the accuracy of the information in that system. How 
does VA ensure contracts are not awarded to businesses unqualified to 
perform work?

    Response: VA's Veteran-owned small business (VOSB) Verification 
Program verifies a contractor's ownership (e.g., whether or not they 
are a service-disabled Veteran-owned small business (SDVOSB) or a VOSB. 
The verification process does not review prospective contractors for 
their capability to perform any specific contract or type of contracts. 
Capability is a contract-specific matter, assessed as part of the 
evaluation process according to criteria specified in the solicitation. 
In responding to the solicitation, offerors know what information they 
must provide to document capability to the satisfaction of the source 
selection team and the contracting officer. Where a contract will be 
awarded through negotiation, the contracting officer may request 
additional clarifying information where appropriate. Where a contract 
will be awarded based on lowest price through sealed bidding, 
insufficient information on capability may result in the offer being 
deemed unresponsive and not considered.
    The VetBiz.gov Vendor Information Pages (VIP) is a database located 
on the Internet at www.vip.vetbiz.gov, where prospective VA contractors 
register their information as part of their application for 
verification as SDVOSB or VOSB. Veteran ownership and control is no 
longer self-certified at VA, but is verified according to standards 
established in title 38, Code of Federal Regulations, part 74. This 
verification includes detailed reviews of documents submitted; follow-
up interviews; and where appropriate, a site visit. Additionally, 
effective October 1, 2010, all contractors must be verified prior to 
receiving a VA contract award through the Veterans First Contracting 
Program. The authorities under Public Law (P.L.) 109-461, the Veterans 
Benefits, Health Care, and Information Technology Act of 2006, were 
implemented by VA as the Veterans First Contracting Program, effective 
June 20, 2007.

    Question 4: North American Industry Classification System (NAICS) 
is the standard used by Federal statistical agencies in classifying 
business establishments for the purpose of collecting, analyzing, and 
publishing statistical data related to the U.S. business economy. Do 
companies without the proper NAICS certifications ever receive a 
contract for work that they are unqualified to perform? If so, why?

    Response: As the question notes, NAICS codes are industry 
classifications primarily for statistical purposes and to determine the 
business size (large or small) for the industry in question. They are 
not certifications of capability to perform any particular contract or 
class of contract. Capability is assessed according to criteria 
disclosed in the solicitation, as discussed under question 3, above. 
NAICS codes describe industry categories in very broad terms and cannot 
substitute for the detailed evaluation of a specific offeror's 
capabilities in response to a solicitation. For example, NAICS code 
621111 (Offices of Physicians Except Mental Health Specialists) 
includes general family practitioners as well as cardiologists, 
dermatologists, ophthalmologists, and pediatricians, among others. The 
code itself is too general to provide meaningful insight into the 
capabilities available at a specific physician's office. This is 
consistent, however, with its function primarily as a statistical tool.

    Question 5: How could a business without the proper NAICS 
certification be awarded a contract by VA, after which the company then 
subcontracts out to a larger business, in violation of the Federal 
Acquisition Regulation (FAR)? What is done to correct this problem when 
identified?

    Response: As noted under Question 4, NAICS codes do not provide 
certification as to an offeror's capabilities. Capability is assessed 
according to criteria disclosed in the solicitation. As part of 
responding to the solicitation, an offeror typically must provide 
insight into the staffing of its firm, including education and 
experience, past performance as well as the extent to which it will 
rely on subcontractors to perform the contract and how it will oversee 
and manage those subcontracts to ensure the government's requirements 
are met. In general, an offeror has considerable flexibility to 
assemble the best team of subcontractors to supplement its own 
capabilities as necessary to meet the criteria in the solicitation; the 
main limiting factor is that over reliance on subcontractors may result 
in a higher price that causes the offeror to be non-competitive and not 
win the award in the first place.
    However, subcontracting limitations also apply where a small 
business wins a contract in a competition restricted to a particular 
class of firm, such as a SDVOSB, VOSB, qualified HUBZone small business 
concern, or participant in the business development program under 
Section 8(a) of the Small Business Act. These programs seek to aid a 
targeted class of firms, and the FAR limitations seek to ensure the 
assistance actually goes to firms in the targeted class. These 
subcontracting limitations are terms of the contract itself and are 
enforced just like any other term of the contract.

    Question 6: On March 9, 2010, in a Department Memorandum, Jan Frye, 
Deputy Assistant Secretary Office of Acquisition and Logistics (OAL), 
acknowledged that contract splitting occurred in violation of P.L. 109-
461 by separating one contract into two in order to avoid competition 
and giving preferential treatment to a particular contractor. How does 
VA ensure such violations are kept to a minimum, especially when eCMS 
is not used?

    Response: VA is preparing new direction for its contracting 
community on this issue. In order to promote competition and to impede 
splitting of contracting requirements, the new guidance will require 
sole source procurements awarded under P.L. 109-461 to be reviewed and 
approved by a management official in the contracting activity. VA plans 
to issue this policy in the fourth quarter of 2011. Currently, VA's 
approach to minimize violations is through training the program offices 
on the issues that contract splitting or fragmenting requirements may 
raise, and why they are to be avoided.

    Question 7: When a VA employee identifies contracting problems, how 
does VA acknowledge his or her effort?

    Response: When a VA employee identifies contracting problems, the 
supervisor and/or management review the validity of the problem(s). If 
the potential contracting problem has merit, necessary actions are 
taken to correct the problem. The employee is informed of the results 
of the review as to whether or not action was taken. In some instances, 
employees are recognized through an ``employee award'' for their effort 
in identifying the issue.

    Question 8: Does VA review every indication of contracting problems 
brought to the attention of management? If not, please describe in 
detail the decision process on whether to review a reported problem.

    Response: OALC officials review all contracting problems brought to 
management. VA expects its managers to address and resolve contracting 
problems brought to their attention at the lowest organizational level 
possible, in accordance with good management practice. Contracting 
problems which cannot be resolved by first line managers are referred 
up the chain of command, and additional resources are brought to bear 
as needed. Those resources include but are not limited to the Office of 
General Counsel, the Office Inspector General, as well as other subject 
matter experts.

    Question 9: The Subcommittee on Oversight and Investigations found 
evidence that, on more than one occasion, a number of blanket purchase 
agreements were the result of bundling contracts for services that were 
well within the capability of small firms, including Service Disabled 
Veteran Owned Small Businesses and Veteran Owned Small Businesses. Not 
only did these practices deprive veteran owned businesses of potential 
contracts, but it froze them out for a period of 3-5 years. How would 
you recommend VA resolve such problems given the relevant statutory 
language in Public Law 109-461 and pertinent regulations?

    Response: VA's OSDBU reviews all proposed acquisition strategies 
involving contract bundling where the anticipated dollar value is at 
least $1 million. This is a more stringent standard of review than 
specified in the FAR, which directs most agencies to review contract 
bundling of anticipated value of $2.5 million or more (FAR Sec. 7.104). 
In practice, OSDBU's role is more dynamic than mere concurrence or non-
concurrence with a proposed acquisition strategy. As a participant in 
the Integrated Product Teams (IPT) developing acquisition plans for 
contracts over $5 million, OSDBU provides market research and 
recommendations to the IPTs on how to comply with statutory and 
regulatory limitations on bundling, often preventing a potential 
inappropriate bundling situation from developing in the first place.
    Any contract awarded necessarily excludes unsuccessful offerors for 
the term of the contract. During the course of the contract, VA is 
committed to obtaining the goods or services specified in the contract 
from the awardee(s), by the terms of the contract. The volume of work 
to be performed generally drives the level of vendor interest in the 
contract and the pricing terms (i.e., volume discounts). Unsuccessful 
offerors may perceive this as being excluded from the process but for 
the successful offeror it is the consideration received as part of the 
contract.
    Fragmentation of a requirement among too many vendors drives up 
government oversight costs and may reduce vendors' interest in the work 
as the lower contract value may mean these vendors have better 
``opportunity cost'' on other, larger volume contracts. VA seeks 
balance in making these decisions. When VA can use the contract to 
provide targeted socioeconomic preference firms at a viable volume of 
work, VA establishes contracts and blanket purchase agreements (BPA) to 
allow better participation and promote a strong competitive 
environment. When VA anticipates a need for additional suppliers or 
additional competition during the course of a contracting arrangement, 
VA may make multiple awards and compete subsequent purchases among the 
awardees.

    Question 10: Evidence has been submitted to the Committee of VA 
using letter contracts that allow construction work to begin prior to a 
price for that work being written in the contract? Why does this 
happen, under what circumstances is it permitted, and how can it still 
happen even when not permitted?

    Response: A letter contract is permissible in accordance with FAR 
16.603 and is only utilized when the contracting officer, along with 
the approval of the Head of Contracting Activity (HCA), identifies the 
urgency of need to fulfill such requirement or service for a specific 
project. In the VA major construction program it is extremely rare that 
letter contracts are used.

    Question 11: How does VA prevent double payments or other 
unnecessary payments on a contract? Would more thorough usage of eCMS 
prevent these from happening?

    Response: VA relies on a manual three-way match of the contract, 
invoice, and receipt to prevent double or unnecessary payments. The 
contracting officer provides the contracting officer's technical 
representative (COTR) with the final contract documents. The COTR uses 
the VA Online Certification System (OLCS) to review and certify 
invoices for payments. The OLCS also checks for submission of duplicate 
invoices prior to notifying the COTR of an invoice submission. The COTR 
is notified through an automated email notification when he or she 
needs to review and certify an invoice. The COTR compares the invoice 
against the contract documents and certifies or refuses (approves or 
disapproves) the invoice accordingly. The vendor has to include the 
correct VA Purchase Order number on the invoice to facilitate the 
process. If a mistake (double payment) has been made VA immediately has 
the Austin Finance Center execute a bill of collection to that 
contractor.
    The VA three-way match process ensures the existence of a contract 
and its use by the COTR to review and approve invoices, providing 
verification to the Financial Officer who ensures correct payments are 
made. Greater use of eCMS supports the three-way match requirement by 
making contract documents readily available. The data in eCMS could 
provide an additional electronic means for validating payments if 
contracting and financial systems were to be integrated at VA.

    Question 12: In the hearing before the Oversight and Investigations 
Subcommittee on April 13, 2011, Mr. Bob Neary noted the importance of 
cost analysis ``in the selection of projects going forward.'' Please 
provide a detailed description of the cost analysis process used in 
construction contracting.

    Response: In selecting projects to go forward, VA uses a cost-
effectiveness analysis (CEA) during the budget formulation/project 
selection phase. The CEA is a preliminary step in the construction 
contracting process to help ensure an accurate analysis of the status 
quo and viable options (construct new, renovate, lease, etc.). The CEA 
compares the life cycle cost of the various options and provides the 
constant, inflated and discounted values (net present value) of each 
option. CEAs are completed by the business case preparers and reviewed 
by the Department as part of the Strategic Capital Investment Planning 
(SCIP) process, resulting in a prioritized list of capital projects to 
be used in formulating the annual budget request. The SCIP process is 
completed approximately 12 months prior to funds being appropriated for 
a major construction project and possibly several years before a 
construction contract is awarded. As a project progresses, initial 
planning costs are provided in the SCIP 10-year action plan and SCIP 
budget year business case, and at other stages including the Office of 
Management and Budget (OMB) submission. A project prospectus is also 
provided as part of the congressional budget submission, and costs may 
be revised again after final design is completed.
    VA's standard practice for cost analysis is a review of historical 
data along with the support of the architect-engineer of record's 
independent government estimate (IGE). All VA projects have an IGE 
which is used to compare cost proposals for determining cost/price to 
be fair and reasonable. The majority of VA projects are awarded on a 
firm-fixed price basis as a result of full and open competition. In 
those relatively few cases where a more detailed cost analysis is 
required, however, VA uses the Defense Contract Audit Agency (DCAA) to 
conduct an audit of the firm's proposal. DCAA has an agreement with VA 
to do this work on a reimbursable basis. The DCAA audit lends support 
to the contracting officer in determining that a price is fair and 
reasonable.

    Question 13: Who conducts the cost analysis and associated 
assessments when considering whether a VA structure should be leased, 
renovated, or built new?

    Response: The first step in deciding which capital solution should 
be chosen is to establish the type and level of the health care 
services needed and their appropriate location(s). VA's Health Care 
Planning Model provides data on the projected Veteran population, 
demographics, utilization, and access to assist in this determination.
    The second step is to determine the best solution to meet the need 
(including SCIP-identified infrastructure gaps) to provide that care--a 
new facility, leased facility, renovated facility, or contract care 
where appropriate. All capital business case applications for major, 
minor, non-recurring maintenance and leases (to include the cost 
analysis) are reviewed and prioritized by a Department-wide SCIP Board 
and approved through the VA governance process.
    VA staff (in most cases located at the facility) conduct the first 
cost analysis and associated assessments when considering whether a VA 
structure should be leased, renovated, or built new. VA's analysis is 
conducted within the framework of governmentwide initiatives like the 
President's June 2010 Memorandum on Real Property and E.O. 13514 (on 
sustainable buildings). The preparer of the business case application 
proposes the method (build new, renovate, lease, etc.) to meet the 
identified gaps. The preparer must provide additional justification if 
the most cost effective means is the not chosen option. Various 
factors--such as the need for additional space, the ability to build on 
medical center campuses or renovate existing buildings, the requirement 
for quick implementation or flexibility to terminate a contract 
(leasing versus construction), and the duration of the need (short term 
versus long term)--all go into determining the best solution for 
providing the best quality health care. For example, a medical center 
campus that is landlocked with no excess space would most likely need 
to pursue leasing or contracting out because building on campus or 
renovating existing space to provide additional care is not feasible. A 
campus with excess building space or acreage may more easily (and 
efficiently) renovate space or build new space on the campus.

    Question 14: Who reviews the cost analysis and associated 
assessments in making decisions towards contracts?

    Response: As a project progresses through the development stage and 
into the budget formulation/project selection stage, a CEA is required 
as part of the business case application. The application, comprised of 
questions relating to Departmental decision criteria, is used to 
demonstrate the need for, and priority ranking of, the project. 
Business cases are evaluated by the local facility director, the 
Veterans Integrated Service Network (VISN) Director, and the applicable 
administration (Veterans Health Administration, National Cemetery 
Administration, or Veterans Benefits Administration), which then 
forwards the business cases to the SCIP Board for review and scoring. 
The SCIP Board is a Department-wide group consisting of nine members 
from the Administrations and select staff offices. The business cases 
are also reviewed through the VA governance process, which results in a 
prioritized listing of capital projects for the budget year. 
Significant projects (such as major construction and leasing) include 
detailed cost estimates in their project prospectus, which are reviewed 
by the (OMB) and included in the Department's budget submission to 
Congress.

    Question 15: In considering ``best options'' and a proper cost 
analysis, the Oversight and Investigations Subcommittee majority staff 
analysis revealed (and was confirmed by an independent third party) 
that construction at the Denver replacement medical center facility has 
appropriated money in FY 2004, 2006, 2007, 2008, 2009 and 2010 with a 
total cost so far approaching half a billion dollars for the addition 
of about 40 beds. For comparative purposes, a medical facility in 
Washington DC added 220 beds for about $25 Million. How much has the 
Denver project cost so far (total)?

    Response: As of May 31, 2011, VA has obligated $107.5 million for 
the new medical facility in Denver, Colorado. The new 184-bed medical 
center will accommodate the Eastern Colorado Health Care System 
inpatient tertiary care and ambulatory care functions. The project 
includes a 30-bed Spinal Cord Injury/Disorder Center; a 30-bed Nursing 
Home Community Living Center; a research building; a central utility 
plant; and parking structures. It also includes the remodeling of the 
former University Physicians, Inc. building to be the Clinic Building 
South, which will house clinical and administrative functions and a 
Department of Defense clinic at the top floor. The project will be LEED 
silver certified.
    The project addresses multiple problems, ranging from correcting 
the numerous deficiencies associated with an aging facility to closing 
the distance gap between VA's medical school affiliate, the University 
of Colorado Hospital. The Denver medical center is over 60 years old, 
is inefficient, is space constrained, and will not support the capacity 
or quality of Veteran care needed for state-of-the-art treatment. The 
current facility lacks the capability to expand to meet the projected 
increasing workload demands.

    Question 16: Please provide a copy of the Senior Resident Engineer 
training lessons.

    Response: See attached SRE Training and Development Program 
Curriculum.

    Question 17: How does VA prevent abuse of OLCS when CFM can request 
any Contracting Officer to make payment, especially when invoices do 
not have the appropriate accompanying supporting documentation?

    Response: OLCS is a dual certification system. A contracting 
officer is designated for each specific project in OLCS. Only a single 
alternate CO, rather than any CO, is also designated which allows 
invoices to be processed in the absence of the designated contracting 
officer. Not only does this prevent payment of interest on the 
government's part, but ensures timely payment to the contractor. The 
requirement for processing invoices is the same for each contracting 
officer. They are required to verify the accuracy of such invoice to 
ensure compliance with regulations. All documentation for an invoice on 
a major construction project is kept at the field office of the Senior 
Resident Engineer (SRE). The SRE, who has limited contracting 
authority, approves in OLCS that services have been rendered. The 
contracting officer then certifies that invoice in OLCS.

    Question 18: Please provide a copy of the contract file related to 
the company Ellerbe Becket.

    Response: The information was submitted to the Subcommittee on 
Oversight and Investigations staff and will be retained in the 
Committee files.

    Question 19: Please provide details on the $99 million procurement 
for Advisory and Assistance Services to include the services provided 
and whether or not the Chief of Staff has approval authority 
(signature) at the same level as the Deputy Secretary.

    Response: VA queried the Federal Procurement Data System for 
details of the contract referenced in the question and was unable to 
identify a VA contract with those characteristics.
    In addition, VA's Information Letter (IL) 049-07-10, on Advisory 
and Assistance Services, was rescinded August 10, 2010. This IL 
required approval by the Secretary or Deputy Secretary for Advisory and 
Assistance Services contracts above $1 million. The Veterans Affairs 
Acquisition Regulation part 801 sets thresholds for review and approval 
of contracts, including legal and technical review, and those 
provisions continue to apply. In addition, criteria in FAR subpart 37.2 
also apply.

    Question 20: What is the present total cost of the San Antonio 
Polytrauma project?

    Response: The present total cost of the San Antonio Polytrauma 
project is $66 million.

    Question 21: What penalties currently exist for VA employees who 
willfully violate the eCMS usage mandate? What actions are planned to 
hold employees accountable for not using eCMS?

    Response: Employee accountability for the use of eCMS rests within 
the supervisory chain, and ultimately resides with the cognizant Head 
of Contracting Activity (HCA). Given the sensitive nature of 
performance-based personnel actions and the potential for Privacy Act 
issues, VA cannot disclose this information. However, VA is providing 
the results of the OIG audit, as well as the results of its own 
internal reviews, to the HCAs to discuss corrective action with their 
respective staffs. VA concurs in the importance of correcting 
noncompliance with eCMS requirements and is directing senior-level 
management (HCAs) attention to monitoring and addressing this issue.
    Where appropriate, VA will address eCMS noncompliance with 
additional training and guidance, but where deficiencies persist, VA 
will treat noncompliance as a performance issue and take appropriate 
action. Similar to other employee performance management issues, 
corrective action(s) taken against employees are determined by the 
supervisor and follow VA human resources policy and procedures.
    To achieve consistency within the Department, the Office of 
Acquisition, Logistics and Construction (OALC) will work with the 
Department's Office of Human Resources and Administration and the HCAs 
to develop a standard performance measure for inclusion in each VA 
contracting officer's individual annual performance work plan on the 
use of eCMS to accomplish their contracting assignments. Their use of 
the system and the completeness of the contract files within the system 
will then be considered when developing their annual performance 
rating. We will target this to be effective for the Fiscal Year 2012 
rating cycle which begins in October 2011.

    Question 22: Do you feel that VA's contract auditing process is 
effective and thorough? How could it be improved?

    Response: Yes, VA's process is effective and thorough, but 
timeliness may be a place to improve. The majority of VA's pre-award 
and post-award reviews are done on our Federal Supply Schedule (FSS) 
offers and contracts. Pre-award and post-award reviews are normally 
triggered by a dollar threshold (estimated value of award or actual 
government sales achieved). We also request audits when it is believed 
that data may not be accurate or complete. The audit review process, 
including both pre-award and post-award reviews, is critical to ensure 
the integrity of the program, the pricing, and the best interests of 
the government. The pre-award reviews afford contracting staff the 
assurance the offeror provided accurate current and complete data and 
information.
    It also identifies and/or confirms the negotiation starting point. 
Post-award reviews ensure the basis of award and price protection 
provisions were complied with. The majority, but not all of the post-
award reviews are generated by a self-audit completed by the 
contractor. Once notified and receipt is taken of the contractor's 
findings, a post-award review is required, which typically finds 
additional recovery.
    The overall time it takes from the request to auditors to 
completion of review is very lengthy, often exceeding 180 days. Most is 
driven by the wait for additional information by the offeror/vendor to 
be provided, or access to their records.

    Question 23: Has VA ever compared its contract auditing process 
with other Federal agencies that employ external auditors?

    Response: All VA audits are to ensure compliance with applicable 
Federal regulation and guidance (e.g. FARs, Generally Accepted 
Government Accounting Standards). VA currently uses DCAA for any 
changes in excess of $700,000 to major construction contracts and new 
awards of architect/engineering contracts $10 million or more for 
contracts other than firm-fixed price.
    With regard to the FSS program, VA has evaluated the use of outside 
auditors. However, this is a unique program only assigned to the 
General Services Administration (GSA), who in turn delegated the health 
care categories to VA. VA Office of Inspector General reviews the 
program and VA has a process to train staff on the unique aspects of 
the FSS program. VA will continue to periodically evaluate the best 
course of support for the FSS program.

    Question 24: In the hearing before the Oversight and Investigations 
Subcommittee on April 13, 2011, Mr. Bob Neary noted that VA 
Construction does not use a sealed bidding as identified in VA 
Acquisition Regulation, Subchapter C, Subpart 81401, Section 814.104. 
Please explain in detail why this method is not being used.

    Response: The use of sealed bidding and competitive proposals are 
both acceptable methods for procuring construction contracts as defined 
in the FAR Part 6.401. ``One of the requirements of using the sealed 
bid process is that ``the award will be made on the basis of price and 
other price-related factors,'' and requirements must be 100 percent 
known. VA procurement requirements go well beyond price; price is just 
one factor. Contracts to build state-of-the-art VA medical centers and 
national cemeteries are awarded to a contractor based on the review of 
their past performance, contractor management approach and their small 
business participation. Using this ``Best Value'' method for procuring 
the new VA medical centers and national cemeteries has provided the 
greatest overall benefit for our customers and has shown to have an 
overall savings. Therefore, using only the sealed bid process, which is 
based on price and price-related factors, would limit the ability to 
obtain the ``Best Value'' for our Veterans and taxpayers.

    Question 25: Please provide the background on the limited warranted 
contracting authority given to Senior Resident Engineers as well as any 
changes being considered to this authority.

    Response: VA Senior Resident Engineers (SRE) and Resident Engineers 
(RE) may receive a Basic C Level Warrant with limited contracting 
authority for the specified construction contract which cannot be 
utilized without a Contracting Officer Authorization (COA). The basic 
level warrant authority for a SRE is $100,000 and $50,000 for a RE. The 
SRE and/or RE are required to meet all requirements of the Federal 
Acquisition Certification in Contracting (FAC-C) program prior to being 
issued a basic level warrant for contracting authority. The language 
that is identified on all SRE/RE warrants states ``Expenditures at or 
below $100,000 for modifications issued against existing CFM contracts 
upon the issuance of a COA letter of delegation.'' The authority for a 
SRE and a RE differ, as outlined below:
    SRE--The following limitations apply to progress payments, change 
orders and supplemental agreements issued under this authorization 
order:

    a.  $100,000 increase or decrease (or estimated increase or 
decrease) for any one change except the issuance of a settlement by 
determination;
    b.  Twenty (20) calendar day period between changes issued by same 
SRE;
    c.  $300,000 net increase per calendar month for changes issued by 
all SREs for specified project;
    d.  Authority to stop work for a two work day period in accordance 
with FAR 52.242-14, Suspension of Work;
    e.  All Progress Payments except Final Payment. Any retainage must 
be authorized by the Contracting Officer; and
    f.  This authority expires on the date of final settlement of the 
specified construction contract.

    RE--The following limitations apply to progress payments, change 
orders and supplemental agreements issued under this authorization 
order:

    a.  $50,000 increase or decrease (or estimated increase or 
decrease) for any one change except the issuance of a settlement by 
determination;
    b.  Ten (10) calendar day period between changes by the same RE;
    c.  $150,000 net increase per calendar month for changes issued by 
all Res for the specified project;
    d.  Authority to stop work for a one work day period in accordance 
with FAR 52.242-14, Suspension of Work;
    e.  All Progress Payments except Final Payment. Any retainage must 
be authorized by the Contracting Officer; and
    f.  This authority expires on the date of final settlement of the 
specified construction contract.

    At this time, VA is not considering a change to the authority for 
the SRE and/or RE basic level warrants.

    Question 26: As discussed in the hearing before the Oversight and 
Investigations Subcommittee on April 13, 2011, by Mr. Haggstrom, please 
provide the class schedule for formal training in eCMS at the VA 
Acquisition Academy for calendar year 2010, a copy of the course 
training guide, and the number of VA employees that underwent this 
training during that time period.

    Response: All new contracting staff who will use eCMS are required 
to undergo eCMS training prior to using the system. In fiscal year 
2010, a total of 1,352 users were trained by an eCMS Application 
Coordinator or a vendor. Vendors trained 1,119 users through one of the 
77 training sessions listed below. Eighty-eight of the 1,119 users who 
received Vendor instruction were trained as Application Coordinators 
under a ``Train-the-Trainer'' initiative; they will fill the trainer 
role within their organization. Application Coordinators trained 233 of 
the 1,352 users who received training. The training curriculum is the 
same whether provided through the vendor or the Application 
Coordinators. VA Acquisition Academy does not provide eCMS training.

------------------------------------------------------------------------
                                                           Number of
  #       Training Dates            Location               Attendees
------------------------------------------------------------------------
   1   Nov. 2-6, 2009       Orlando, FL               24
------------------------------------------------------------------------
   2   Nov. 17-20, 2009     Orlando, FL               22
------------------------------------------------------------------------
   3   Oct. 5-6, 2009       Dayton, OH                23
------------------------------------------------------------------------
   4   Oct. 5-9, 2009       Brecksville, OH           18
------------------------------------------------------------------------
   5   Oct. 26-30, 2009     Stafford, VA              11
------------------------------------------------------------------------
   6   Nov. 9-13, 2009      Washington, DC            12
------------------------------------------------------------------------
   7   Nov. 16-20, 2009     Washington, DC            11
------------------------------------------------------------------------
   8   Nov. 17-20, 2009     Long Beach, CA            18
------------------------------------------------------------------------
   9   Dec. 1-2, 2009       San Antonio, TX           18
------------------------------------------------------------------------
  10   Dec. 3-4, 2009       San Antonio, TX           18
------------------------------------------------------------------------
  11   Dec. 1-4, 2009       Hampton, VA               19
------------------------------------------------------------------------
  12   Dec. 8-11, 2009      Murfreesboro, TN          10
------------------------------------------------------------------------
  13   Dec. 8-11, 2009      Brockton, MA              11
------------------------------------------------------------------------
  14   Dec. 15-16, 2009     Murfreesboro, TN          14
------------------------------------------------------------------------
  15   Dec. 14-18, 2009     Frederick, MD             14
------------------------------------------------------------------------
  16   Jan. 4-8, 2010       Frederick, MD             16
------------------------------------------------------------------------
  17   Jan. 12-13, 2010     Chicago, IL               18
------------------------------------------------------------------------
  18   Jan. 14-15, 2010     Chicago, IL               20
------------------------------------------------------------------------
  19   Jan. 12-13, 2010     Wilmington, DE            14
------------------------------------------------------------------------
  20   Jan. 14-15, 2010     Wilmington, DE            6
------------------------------------------------------------------------
  21   Jan. 19-22, 2010     Chicago, IL               15
------------------------------------------------------------------------
  22   Jan. 21-22, 2010     Murfreesboro, TN          10
------------------------------------------------------------------------
  23   Jan. 25-28, 2010     Frederick, MD             15
------------------------------------------------------------------------
  24   Jan. 26-27, 2010     Coatesville, PA           14
------------------------------------------------------------------------
  25   Jan. 28-29, 2010     Coatesville, PA           16
------------------------------------------------------------------------
  26   Feb. 4-5, 2010       New York (Bronx), NY      16
------------------------------------------------------------------------
  27   Feb. 2-5, 2010       Eatontown, NJ             18
------------------------------------------------------------------------
  28   Feb. 16-17, 2010     Ann Arbor, MI             10
------------------------------------------------------------------------
  29   Feb. 18-19, 2010     Ann Arbor, MI             13
------------------------------------------------------------------------
  30   Feb. 18-19, 2010     Murfreesboro, TN          11
------------------------------------------------------------------------
  31   Feb. 23-24, 2010     Indianapolis, IN          9
------------------------------------------------------------------------
  32   Feb. 25-26, 2010     Indianapolis, IN          12
------------------------------------------------------------------------
  33   Feb. 23-24, 2010     Dayton, OH                16
------------------------------------------------------------------------
  34   Feb. 25-26, 2010     Cleveland, OH             17
------------------------------------------------------------------------
  35   Mar. 8-11, 2010      Frederick, MD             17
------------------------------------------------------------------------
  36   Mar. 9-10, 2010      Perry Point, MD           17
------------------------------------------------------------------------
  37   Mar. 16-17, 2010     Murfreesboro, TN          15
------------------------------------------------------------------------
  38   Mar. 15-19, 2010     Bedford, MA               13
------------------------------------------------------------------------
  39   Mar. 23-26, 2010     Coatesville, PA           12
------------------------------------------------------------------------
  40   Mar. 25-26, 2010     Buffalo, NY               14
------------------------------------------------------------------------
  41   Mar. 30-31, 2010     Pittsburgh, PA            14
------------------------------------------------------------------------
  42   Apr. 1-2, 2010       Pittsburgh, PA            15
------------------------------------------------------------------------
  43   Apr. 6-7, 2010       Arlington, TX             21
------------------------------------------------------------------------
  44   Apr. 8-9, 2010       Lyons, NJ                 15
------------------------------------------------------------------------
  45   Apr. 13-14, 2010     Martinsburg, WV           10
------------------------------------------------------------------------
  46   Apr. 15-16, 2010     Martinsburg, WV           12
------------------------------------------------------------------------
  47   Apr. 12-13, 2010     Brockton, MA              10
------------------------------------------------------------------------
  48   Apr. 15-16, 2010     Manchester, NH            12
------------------------------------------------------------------------
  49   Apr. 22-23, 2010     Tampa, FL                 19
------------------------------------------------------------------------
  50   Apr. 22-23, 2010     Menlo Park, CA            19
------------------------------------------------------------------------
  51   Apr. 27-28, 2010     Palo Alto, CA             25
------------------------------------------------------------------------
  52   May 4-5, 2010        Lake City, FL             13
------------------------------------------------------------------------
  53   May 6-7, 2010        San Juan, P.R.            12
------------------------------------------------------------------------
  54   May 11-12, 2010      West Haven, CT            10
------------------------------------------------------------------------
  55   May 11-12, 2010      Lyons, NJ                 11
------------------------------------------------------------------------
  56   May 13-14, 2010      Brockton, MA              16
------------------------------------------------------------------------
  57   May 18-19, 2010      Lake City, FL             12
------------------------------------------------------------------------
  58   May 18-19, 2010      Milwaukee, WI             12
------------------------------------------------------------------------
  59   May 20-21, 2010      Milwaukee, WI             12
------------------------------------------------------------------------
  60   May 25-26, 2010      Lake City, FL             10
------------------------------------------------------------------------
  61   May 25-26, 2010      New York (Bronx), NY      13
------------------------------------------------------------------------
  62   May 27-28, 2010      New York (Bronx), NY      13
------------------------------------------------------------------------
  63   Jun. 1-2, 2010       Albany, NY                11
------------------------------------------------------------------------
  64   Jun. 10-11, 2010     Houston, TX               13
------------------------------------------------------------------------
  65   Jun. 10-11, 2010     Orlando, FL               9
------------------------------------------------------------------------
  66   Jun. 15-16, 2010     Minneapolis, MN           19
------------------------------------------------------------------------
  67   Jun. 17-18, 2010     Minneapolis, MN           18
------------------------------------------------------------------------
  68   Jun. 22-23, 2010     Orlando, FL               8
------------------------------------------------------------------------
  69   Jun. 24-25, 2010     Orlando, FL               21
------------------------------------------------------------------------
  70   Jun. 24-25, 2010     Long Beach, CA            22
------------------------------------------------------------------------
  71   Jun. 29-30, 2010     Syracuse, NY              13
------------------------------------------------------------------------
  72   Jul. 22-23, 2010     Orlando, FL               14
------------------------------------------------------------------------
  73   Jul. 27-28, 2010     Miami, FL                 16
------------------------------------------------------------------------
  74   Aug. 10-11, 2010     Omaha, NE                 8
------------------------------------------------------------------------
  75   Aug. 12-13, 2010     Omaha, NE                 9
------------------------------------------------------------------------
  76   Aug. 17-20, 2010     Omaha, NE                 19
------------------------------------------------------------------------
  77   Aug. 24-25, 2010     Dublin, GA                16
------------------------------------------------------------------------
                            TOTAL ATTENDEES           1,119
------------------------------------------------------------------------


    The Enterprise Acquisition Systems (EAS) Service and the Office of 
Acquisition Policy developed an eCMS User Guide Index that provides an 
integrated, role-based matrix for using the 27 individual eCMS user 
guides. The eCMS guides provide users with system information and 
include system processes, procedures, and compliance requirements.
    Users can access eCMS guides using the following link: http://
arc.aac.va.gov/
Acquisition/ECMS/eCMSTrainingMaterials/Pages/VAARCeCMSUserGuides.aspx

    Question 27: Please provide the class schedule for formal training 
in Paragon for calendar year 2010 and the number of VA employees that 
underwent this training during that time period.

    Response: In calendar year (CY) 2010 CFM held a total of eight (8) 
classes with a total of ninety-five (95) employees trained. The classes 
are held for CFM REs, project managers, clerical assistants, and 
contracting officers because Paragon is used primarily for major 
construction projects. The group is made up of new CFM employees and 
those requiring refresher training. The class schedule for CY 2010 was: 
February-9; April-13; June-11; August-11; September-11; October-13; 
November-14; and December-13.

                               __________

                  Question #16 Response: Attached SRE
                  Training and Development Curriculum
                                  CFM
     Senior Resident Engineer (SRE) Training & Development Program
                               Curriculum
Standardized Curriculum for Face-to-Face Training

    SRE Development Program will be 2 years in duration, with face-to-
face training scheduled every quarter if possible. Group training will 
incorporate core technical and management skills for Resident Engineers 
seeking to develop the expertise of an SRE. Priority numbers indicate 
preferred sequence of training over 2 years.


----------------------------------------------------------------------------------------------------------------
                                                                                                           Dates
           Training            Priority      Trainers          Time           Notes           Category      Done
----------------------------------------------------------------------------------------------------------------
Priority for session planning                                   23 hrs
 purposes
----------------------------------------------------------------------------------------------------------------
Program Orientation                  1   Internal--SREs &        4 hrs   #1 & #2 on       1--SRE
                                          Senior Mgt                      original         Development
                                                                          curriculum       Orient./CFM
                                                                          combined to      Org.
                                                                          total approx.
                                                                          3.5 days.
----------------------------------------------------------------------------------------------------------------
IDP for SRE Development              1   Internal--SRE            1 hr                    1--SRE
                                          and Coach                                        Development
                                                                                           Orient./CFM
                                                                                           Org.
----------------------------------------------------------------------------------------------------------------
Color of Money, Contingency          1   Arlyce                  2 hrs                    2--Office Admin
 Management, FITT, PMDRI                                                                   & Operations
                                                                                           (File 13)
----------------------------------------------------------------------------------------------------------------
Filing Systems, Office               1   Dana Quel               3 hrs   How to           4--Contract
 Organization and Procedures                                              administer an    Admin/
                                                                          office, manage   Documentation
                                                                          correspondence
                                                                          and other
                                                                          paperwork.
----------------------------------------------------------------------------------------------------------------
Preconstruction Meeting With         1   Derek Underwood         2 hrs   Procedure for    4--Contract
 Contractors and VA Clients                                               conducting pre-  Admin/
                                                                          construction     Documentation
                                                                          and partnering
                                                                          meetings,
                                                                          purpose of
                                                                          meetings, key
                                                                          areas to
                                                                          cover,
                                                                          coordination
                                                                          between
                                                                          parties in
                                                                          setting up
                                                                          meeting, etc.
----------------------------------------------------------------------------------------------------------------
Understanding Up-Front Specs:        1   Ed Nicholson/           8 hrs   How to read      5--Construction
 General Conditions, General              Reginald Berry                  them, why it     Contracts
 Requirements, etc.                                                       is important
                                                                          to read them.
                                                                          Avoiding
                                                                          unnecessary
                                                                          expense. Use
                                                                          ``Real''
                                                                          documents as
                                                                          exercise. Need
                                                                          someone to
                                                                          discuss each
                                                                          Act and SRE
                                                                          roles/
                                                                          responsibiliti
                                                                          es
----------------------------------------------------------------------------------------------------------------
Setting Up the Office (How To/       1   SRE & PM                 2 hr   Trailers,        2--Office Admin
 Logistics)                                                               supplies/        & Operations
                                                                          lists,
                                                                          clerical,
                                                                          mail,
                                                                          contracts
----------------------------------------------------------------------------------------------------------------
Interfacing With Medical             1   Coaches; perhaps         1 hr   What to expect   4--Contract
 Center, Relationship to VAMC             Chief of                        Relationship     Admin/
 Director, Engineering, and               Engineering.                    Things to        Documentation
 Shops                                                                    consider
                                                                         Use FAB
                                                                          ``Interface''
                                                                          Issue.
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------
                                                                                                           Dates
           Training            Priority      Trainers          Time           Notes           Category      Done
----------------------------------------------------------------------------------------------------------------
2                                                             36.5 hrs
----------------------------------------------------------------------------------------------------------------
Travel                               2   Shavonne Rush            1 hr                    3--Personnel
                                                                                           (Self & Staff)
                                                                                           Admin.
----------------------------------------------------------------------------------------------------------------
Safety: SRE Responsibilities,        2   Internal--SRE,          8 hrs                    4--Contract
 Contractor Responsibilities,             CEOSH                                            Admin/
 and Reporting Requirements                                                                Documentation
----------------------------------------------------------------------------------------------------------------
Davis Bacon Act/Labor                2   Robert Nowak            2 hrs   What are the     5--Construction
 Provisions                                                               wages unique     Contracts
                                                                          to the job
                                                                          location
                                                                          (under DOL).
                                                                          Wage report
                                                                          used in
                                                                          contract.
                                                                          Ensure
                                                                          contractor is
                                                                          paying proper
                                                                          wages, how
                                                                          payroll is
                                                                          presented,
                                                                          etc.
----------------------------------------------------------------------------------------------------------------
Testing Lab Contracts                2   Internal                 1 hr   What is the      5--Construction
                                                                          SRE's            Contracts
                                                                          responsibility
                                                                          with these
                                                                          contracts.
----------------------------------------------------------------------------------------------------------------
Review NAS Specifications            2   Bill Goodman            4 hrs                    5--Construction
                                                                                           Contracts
----------------------------------------------------------------------------------------------------------------
Submittal Process                    2   Coaches                  1 hr   Review spec      4--Contract
                                                                          section 01340    Admin/
                                                                                           Documentation
----------------------------------------------------------------------------------------------------------------
A/E & CM Contracts during            2   Katie Kuehn              1 hr   Contractors      5--Construction
 Construction Period Service                                              Support          Contracts
----------------------------------------------------------------------------------------------------------------
Ethics                               2   Ethics attorney          1 hr                    6--Leadership/
                                                                                           Sup./Self
                                                                                           Improve.
                                                                                           Skills
----------------------------------------------------------------------------------------------------------------
Progress Payments (General           2   Jane Houston/           2 hrs   Progress         4--Contract
 Conditions and Online                    Adelino                         payments         Admin/
 Payments)                                ``Dino''                        procedures,      Documentation
                                          Gorospe                         things to
                                                                          check before
                                                                          submitting
                                                                          payments,
                                                                          retainage,
                                                                          Online
                                                                          certification
                                                                          process,
                                                                          prompt payment
                                                                          requirements/
                                                                          interest, etc.
----------------------------------------------------------------------------------------------------------------
Change Clauses: FAR & VARR           2   General Counsel         4 hrs                    5--Construction
                                          and REs                                          Contracts
----------------------------------------------------------------------------------------------------------------
Correspondence/Writing Skills        2   TBD                     1 day   VBA has writing  6--Leadership/
 for Federal Managers                                                     course for       Sup./Self
                                                                          their            Improve.
                                                                          managers;        Skills
                                                                          Arlyce will
                                                                          get a copy.
----------------------------------------------------------------------------------------------------------------
Acting Within Your Authority         2   Diane Campbell/        1.5 hr   Limits to
                                          Sheila                          Authority,
                                          Watterson                       Warrant
                                                                          Limits, COA
                                                                          Delegation
                                                                          Letter, Review
                                                                          Thresholds/
                                                                          Actions
                                                                          Requiring
                                                                          Higher
                                                                          Approval, etc.
----------------------------------------------------------------------------------------------------------------
Unauthorized Commitments/            2   Thaddeus                2 hrs   Avoiding
 Ratifications                            Willoughby                      Unauthorized
                                                                          Commitments,
                                                                          Legal
                                                                          Penalties,
                                                                          Process for
                                                                          Ratification,
                                                                          Disciplinary
                                                                          Actions, etc.
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------

           Training            Priority      Trainers          Time           Notes           Category     Dates
                                                                                                            Done
----------------------------------------------------------------------------------------------------------------
3                                                           18.5 -24.5
                                                                   hrs
----------------------------------------------------------------------------------------------------------------
T & L Requirement,                   3   Sheila Walker           2 hrs                    3--Personnel
 Regulations, Reporting, OT                                                                (Self & Staff)
 and Comp Time                                                                             Admin.
----------------------------------------------------------------------------------------------------------------
Conducting Meetings                  3   Robert Nowak             1 hr                    6--Leadership/
                                                                                           Sup./Self
                                                                                           Improve.
                                                                                           Skills
----------------------------------------------------------------------------------------------------------------
Project Planning Process             3   Dennis Sheils            1 hr                    1--SRE
                                                                                           Development
                                                                                           Orient./CFM
                                                                                           Org.
----------------------------------------------------------------------------------------------------------------
Compliance Reviews                   3   Dennis Milsten,         2 hrs                    4--Contract
                                          Alan Trow                                        Admin/
                                                                                           Documentation
----------------------------------------------------------------------------------------------------------------
Project Documentation and            3   Kyrgos, Contract        3 hrs   Processing       4--Contract
 File Management, Inc.                    Specialists                     invoices,        Admin/
 Administering Contracts in                                               maintaining      Documentation
 the Field                                                                Contract
                                                                          Administration
                                                                          files in PM
                                                                          field offices
----------------------------------------------------------------------------------------------------------------
Understanding and                    3   Coaches/PMs/GCs          1 hr                    5--Construction
 Communicating Project                                                                     Contracts
 Specifications
----------------------------------------------------------------------------------------------------------------
Unsolicited Proposals                3   Steffanie Wood         1/2 hr                    5--Construction
                                                                                           Contracts
----------------------------------------------------------------------------------------------------------------
Warranted RE Responsibilities        3   Adelino Gorospe          1 hr                    5--Construction
 Unauthorized Commitment                                                                   Contracts
----------------------------------------------------------------------------------------------------------------
Change Orders (CO)                   3   Kathy Volpe/            4 hrs   Changes          5--Construction
 Supplemental Agreement (SA)              Robert Kellner                  Clauses,         Contracts
 ``How to''--Directive Memo                                               Change Order
 for Record, Distribution,                                                and
 Forward Pricing, Pre-                                                    Supplemental
 Negotiation Objectives Types                                             Agreements
 of Modifications Change                                                  procedures,
 Clauses: FAR & VARR Material                                             Pricing/
 Storage On & Off Site                                                    Negotiation,
                                                                          Special Types
                                                                          of Changes
                                                                          (i.e.
                                                                          Materials
                                                                          Storage), etc.
----------------------------------------------------------------------------------------------------------------
Communication, Team Building,        3                            1 hr                    6--Leadership/
 Partnering                                                                                Sup./Self
                                                                                           Improve.
                                                                                           Skills
----------------------------------------------------------------------------------------------------------------
FAC-C, Warrant, Continuing           3   Myra Williams/           1 hr   FAC-C
 Ed. Points                               Greg Sabater                    requirements,
                                                                          warrant levels
                                                                          and
                                                                          thresholds,
                                                                          Continuing
                                                                          Education
                                                                          Points
                                                                          requirements/
                                                                          ways to earn
                                                                          Continuing Ed.
----------------------------------------------------------------------------------------------------------------
Contracting Responsibility           3   Susan Lam/Chris        1 hr (CO)Working with
 for CPM Schedule (i.e. Time              Kyrgos                  hr (CPM)CPM, Checking
 Extensions, Progress                                                     schedule prior
 Payments, etc.)                                                          to actions
                                                                          (Changes &
                                                                          progress
                                                                          payments),
                                                                          Critical Path
                                                                          impact,
                                                                          frequency of
                                                                          CPM reports,
                                                                          actions you
                                                                          can take if
                                                                          contractor is
                                                                          off schedule,
                                                                          etc.
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------

           Training            Priority      Trainers          Time           Notes           Category     Dates
                                                                                                            Done
----------------------------------------------------------------------------------------------------------------
4                                                               21 hrs
----------------------------------------------------------------------------------------------------------------
Critical Path Method (CPM)           4   Bill Goodman           2 days   Mid first-year   5--Construction
 Time Extension Analysis                                                  issue. Can       Contracts
                                                                          this be taught
                                                                          in field
                                                                          offices?Ask
                                                                          Neary.
----------------------------------------------------------------------------------------------------------------
Consulting Support Services          4   Sat Gupta                1 hr   Learn what they  1--SRE
                                                                          do, how they     Development
                                                                          can help.        Orient./CFM
                                                                                           Org.
----------------------------------------------------------------------------------------------------------------
Role of the Project Manager,         4   Bob Clifton             2 hrs   Contact PMs by   1--SRE
 Understanding Relationship                                               phone; arrange   Development
 of the SRE/PM Through the                                                office visit     Orient./CFM
 Project Process, Roles and                                               if possible.     Org.
 Responsibilities Authority
----------------------------------------------------------------------------------------------------------------
eCMS Training/FPDS                   4   Frank Clemons           2 hrs   Overview of
                                                                          eCMS & FPDS,
                                                                          need for
                                                                          actions to be
                                                                          submitted via
                                                                          eCMS, FPDS
                                                                          report/annual
                                                                          certification
                                                                          of data, etc.
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------

           Training            Priority      Trainers          Time           Notes           Category     Dates
                                                                                                            Done
----------------------------------------------------------------------------------------------------------------
5                                                               16 hrs
----------------------------------------------------------------------------------------------------------------
Paragon Reports for the SRE          5   Jim MacMorran,          4 hrs                    4--Contract
                                          Gail Smith                                       Admin/
                                                                                           Documentation
----------------------------------------------------------------------------------------------------------------
Performance Appraisals               5   Sheila Walker           2 hrs   HR to tailor to  3--Personnel
                                                                          REs/SREs.        (Self & Staff)
                                                                                           Admin.
----------------------------------------------------------------------------------------------------------------
Performance-Based                    5   Sabrina Clark           2 hrs                    3--Personnel
 Interviewing                                                                              (Self & Staff)
                                                                                           Admin.
----------------------------------------------------------------------------------------------------------------
Understanding the Leasing            5   George                  2 hrs   Was ``Leasing    4--Contract
 Process SRE Managing a Lease             Szwarcman, Real                 for REs''        Admin/
                                          Estate                          Could include    Documentation
                                          Specialists                     attendees not
                                                                          in the SRE
                                                                          program.
----------------------------------------------------------------------------------------------------------------
NCA Projects & Programs              5   Rick Petersen           2 hrs   Expectations     4--Contract
                                                                          and program      Admin/
                                                                          overview.        Documentation
----------------------------------------------------------------------------------------------------------------
Develop skills to evaluate           5   TBD                      1 hr                    6--Leadership/
 staff capabilities & provide                                                              Sup./Self
 guidance for their future                                                                 Improve.
 development.                                                                              Skills
----------------------------------------------------------------------------------------------------------------
Complaint/conflict resolution        5   TBD                      1 hr                    6--Leadership/
 skills to effectively                                                                     Sup./Self
 receive, evaluate, and                                                                    Improve.
 resolve complaints.                                                                       Skills
----------------------------------------------------------------------------------------------------------------
FOIA Request and Release of          5   Noella Bond/             1 hr   Taking proper
 Contract Information                     David Reich/                    action when
                                          John Ezell                      receiving a
                                                                          FOIA request,
                                                                          protecting
                                                                          procurement
                                                                          sensitive
                                                                          information
                                                                          (cannot be
                                                                          released to
                                                                          anyone outside
                                                                          of contracting
                                                                          at any time),
                                                                          types of
                                                                          procurement
                                                                          sensitive
                                                                          information,
                                                                          interaction
                                                                          with vendors
                                                                          without
                                                                          releasing
                                                                          protected
                                                                          information,
                                                                          etc.
----------------------------------------------------------------------------------------------------------------
Cost Savings                         5   Jose Bumbray/            1 hr   OMB Initiative
                                          Frank Clemons
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------
                                                                                                           Dates
           Training            Priority      Trainers          Time           Notes           Category      Done
----------------------------------------------------------------------------------------------------------------
6                                                           21--25 hrs
----------------------------------------------------------------------------------------------------------------
Timely Project Close-Out,            6   Euclides Barrera         1 hr   Procedures for   4--Contract
 Construction and A/E,                                                    close-out,       Admin/
 Warranties/Manuals/As-Builts                                             documents        Documentation
 and File Transfer                                                        checks, punch-
                                                                          list,
                                                                          warranties,
                                                                          etc.
----------------------------------------------------------------------------------------------------------------
Final Inspection:                    6   Dana Quel               3 hrs                    4--Contract
 Requirements, Field                                                                       Admin/
 Inspection, Custody and                                                                   Documentation
 Transfer
----------------------------------------------------------------------------------------------------------------
Change Clauses: Rule 4 File          6   General Counsel          1 hr   Compilation of   5--Construction
 Procedures                                                               every document   Contracts
                                                                          related to a
                                                                          dispute; used
                                                                          to defend govt
                                                                          position in a
                                                                          dispute.
----------------------------------------------------------------------------------------------------------------
Evaluation of A/E &                  6   Noella Bond             2 hrs   Evaluations
 Contractors (ACASS Training/                                             Reports, CPARS
 CPARS)                                                                   and ACAS
                                                                          systems,
                                                                          ongoing
                                                                          evaluations/
                                                                          corrective
                                                                          actions.
----------------------------------------------------------------------------------------------------------------
Understanding Contracting            6   Ed Nicholson            2 hrs                    5--Construction
 Officer Decision Procedures                                                               Contracts
----------------------------------------------------------------------------------------------------------------
Suspension of Construction           6   General Counsel       4-8 hrs                    5--Construction
 Work Via Change Order or                 & REs                                            Contracts
 Other Actions
----------------------------------------------------------------------------------------------------------------
Negotiation Skills                   6   External                1 day                    6--Leadership/
                                                                                           Sup./Self
                                                                                           Improve.
                                                                                           Skills
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------

           Training            Priority      Trainers          Time           Notes           Category     Dates
                                                                                                            Done
----------------------------------------------------------------------------------------------------------------
7                                                               24 hrs
----------------------------------------------------------------------------------------------------------------
BIM Process                          7   Renee Tietjen            1 hr                    1--SRE            11/
                                                                                           Development     2010
                                                                                           Orient./CFM
                                                                                           Org.
----------------------------------------------------------------------------------------------------------------
Construction Cost Estimating         7   Bob Smoot/              2 hrs                    6--Leadership/   11/09
                                          Michael Koch                                     Sup./Self
                                                                                           Improve.
                                                                                           Skills
----------------------------------------------------------------------------------------------------------------
Energy Management                    7   Kurt Knight              1 hr                    1--SRE
                                                                                           Development
                                                                                           Orient./CFM
                                                                                           Org.
----------------------------------------------------------------------------------------------------------------
Physical Security                    7   Kurt Knight              1 hr                    1--SRE
 Requirements                                                                              Development
                                                                                           Orient./CFM
                                                                                           Org.
----------------------------------------------------------------------------------------------------------------
FAC-C Certification Other            7   Greg Sabater             1 hr                    1--SRE
 Contracting Training Utilize                                                              Development
 the Academy Keep Up With                                                                  Orient./CFM
 Training                                                                                  Org.
----------------------------------------------------------------------------------------------------------------
Public Speaking/Communicating/       7   Internal                2 hrs                    3--Personnel
 5-Minute Presentations                                                                    (Self & Staff)
                                                                                           Admin.
----------------------------------------------------------------------------------------------------------------
Responsibilities When an RE          7   Noella Bond              1 hr                    4--Contract
 is on TEB Pre-Award and Post-                                                             Admin/
 Award Debriefings                                                                         Documentation
----------------------------------------------------------------------------------------------------------------
A/E Selection Criteria/              7   Bob Smoot               2 hrs                    5--Construction
 Process, Inc. Brooks Bill                                                                 Contracts
----------------------------------------------------------------------------------------------------------------
Historical Preservation,             7   Kathleen                 1 hr                    5--Construction
 Understanding Program and                                                                 Contracts
 SRE Rules & Regulations
----------------------------------------------------------------------------------------------------------------
Supervisory Skills and               7                           1 day   Is this part of  6--Leadership/
 Performance Management                                                   LDMP?            Sup./Self
                                                                                           Improve.
                                                                                           Skills
----------------------------------------------------------------------------------------------------------------
Source Selection Process             7   Brian Johnson/           4 hr   Role of
                                          Robert Capers                   Technical
                                                                          Evaluation
                                                                          Team in FAR 15
                                                                          source
                                                                          selections,
                                                                          comments
                                                                          supporting
                                                                          ratings,
                                                                          correlating
                                                                          ratings to
                                                                          evaluation
                                                                          factors,
                                                                          protest risks,
                                                                          etc.
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------
                                                                                                           Dates
           Training            Priority      Trainers          Time           Notes           Category      Done
----------------------------------------------------------------------------------------------------------------
8                                                               20 hrs
----------------------------------------------------------------------------------------------------------------
Claims Avoidance and                 8   Scott Lowe           2.5 days                    7--Construction
 Mitigation                                                                                Claims/
                                                                                           Disputes
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------

           Training            Priority      Trainers          Time           Notes           Category     Dates
                                                                                                            Done
----------------------------------------------------------------------------------------------------------------
Additional Recommended
 Training
----------------------------------------------------------------------------------------------------------------
Complete the ``Supervisory           9   Self                   40 hrs                    6--Leadership/
 Models''                                                                                  Sup./Self
                                                                                           Improve.
                                                                                           Skills
----------------------------------------------------------------------------------------------------------------
VALU/CFM Leadership                  9   Internal and         4 formal                    1--SRE
 Development Mentoring                    External           sessions/                     Development
 Program (LDMP) or VALU/CFM                                       year                     Orient./CFM
 Aspiring Leaders Program                                                                  Org.
 (ALP)
----------------------------------------------------------------------------------------------------------------


---------------------------------------------------------------------------
                                 

                                     Committee on Veterans' Affairs
                       Subcommittee on Oversight and Investigations
                                                    Washington, DC.
                                                        May 2, 2011
Mr. Glenn D. Haggstrom
Executive Director, Office of Acquisitions, Logistics, and Construction
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Mr. Haggstrom:

    I would like to request your response to the enclosed deliverable I 
am submitting in reference to our House Committee on Veterans' Affairs 
Subcommittee on Oversight and Investigations hearing on Inspect What 
You Expect: Construction Contracting Practices at VA on April 13, 2011. 
Please answer the enclosed hearing questions and deliverables by no 
later than Monday, May 30, 2011.
    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) 225-9756.
            Sincerely,

                                                       Joe Donnelly
                                                     Ranking Member
    MH/ot


                               __________

               The Honorable Joe Donnelly, Ranking Member
              Subcommittee on Oversight and Investigations
                  House Committee on Veterans Affairs
 ``Inspect What You Expect: Construction Contracting Practices at VA''
                             April 13, 2011
    Question 1: I ask that you review your performance measures and 
provide us the names of the mid-management level staff that are not 
using eCMS or mandating the use of their subordinates. How is the VA 
planning to penalize and hold them accountable?

    Response: Employee accountability for the use of eCMS rests within 
the supervisory chain, and ultimately resides with the cognizant Head 
of Contracting Activity (HCA). Given the sensitive nature of 
performance-based personnel actions and the potential for Privacy Act 
issues, VA cannot disclose this information. However, VA is providing 
the results of the Office of Inspector General (OIG) audit, as well as 
the results of its own internal reviews, to the HCAs to discuss 
corrective action with their respective staffs. VA concurs in the 
importance of correcting noncompliance with eCMS requirements and is 
directing senior-level management (HCAs) attention to monitoring and 
addressing this issue.
    Where appropriate, VA will address eCMS noncompliance with 
additional training and guidance, but where deficiencies persist, VA 
will treat noncompliance as a performance issue and take appropriate 
action. Similar to other employee performance management issues, 
corrective action(s) taken against employees are determined by the 
supervisor and follow VA human resources policy and procedures.
    To achieve consistency within the Department, the Office of 
Acquisition, Logistics and Construction (OALC) will work with the 
Department's Office of Human Resources and Administration and the HCAs 
to develop a standard performance measure for inclusion in each VA 
contracting officer's individual annual performance work plan on the 
use of eCMS to accomplish their contracting assignments. Their use of 
the system and the completeness of the contract files within the system 
will then be considered when developing their annual performance 
rating. We will target this to be effective for the Fiscal Year 2012 
rating cycle which begins in October 2011.

    Question 2: Provide the Subcommittee a quarterly update on the eCMS 
utilization statistics within the Department. The 17 percent 
utilization rate and almost $1.4 billion not being tracked is 
troubling.

    Response: OALC's internal review does not support the 17 percent 
utilization rate, and as a result, we cannot discuss its legitimacy.
    OALC tracks monthly metrics including eCMS Award Dollar Value, 
which corresponds most closely for the data matching analysis the OIG 
performed to assess eCMS usage. This monitors cumulative obligation 
figures, mapping the throughput of dollar awards in eCMS. For Fiscal 
Year 2011 (through April), this measure shows $5.98 billion in total 
cumulative dollar awards. OALC targeted $12 billion in total eCMS usage 
for FY 2011.
    For comparison, the following chart shows similar measures for 
prior fiscal years:


------------------------------------------------------------------------
        Fiscal Year              eCMS Award Dollar Value at Year-End
------------------------------------------------------------------------
            2008                                  $5.4 billion
------------------------------------------------------------------------
            2009                                  $8.6 billion
------------------------------------------------------------------------
            2010                                 $11.6 billion
------------------------------------------------------------------------


    VA concurs in the need for valid and reliable metrics to track eCMS 
use. Accordingly, VA relies on transactional statistical data such as 
eCMS award dollar value to provide statistics suitable for year-over-
year comparison, to track progress. However, VA also concurs in the 
need for qualitative reviews to provide information useful for the HCAs 
and supervisors so they may take appropriate corrective action, even 
though the results of such qualitative reviews may not be produced in 
statistical form.
    VA will develop a report that can be used proactively by acting 
Chief Acquisition Officer HCAs in ensuring eCMS usage. This report 
could be used to update the Subcommittee upon request. The first report 
can be provided within 30 days after the end of the 4th qtr FY 2011.

                                 
