    [House Hearing, 113 Congress]
    [From the U.S. Government Publishing Office]

                  LEGISLATIVE HEARING ON H.R. 3593, H.R. 4261,
                    H.R. 4281 AND OTHER DRAFT LEGISLATION

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

                                    HEARING

                                   BEFORE THE

                  SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATION

                                     OF THE

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

                        ONE HUNDRED THIRTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                            TUESDAY, MARCH 25, 2014

                                   __________

                               Serial No. 113-58

                                   __________

           Printed for the use of the Committee on Veterans' Affairs

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             Available via the World Wide Web: http://www.fdsys.gov

                                   ___________

                         U.S. GOVERNMENT PUBLISHING OFFICE
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                         COMMITTEE ON VETERANS' AFFAIRS

                         JEFF MILLER, Florida, Chairman

    DOUG LAMBORN, Colorado               MICHAEL H. MICHAUD, Maine, Ranking
    GUS M. BILIRAKIS, Florida, Vice-         Minority Member
        Chairman                         CORRINE BROWN, Florida
    DAVID P. ROE, Tennessee              MARK TAKANO, California
    BILL FLORES, Texas                   JULIA BROWNLEY, California
    JEFF DENHAM, California              DINA TITUS, Nevada
    JON RUNYAN, New Jersey               ANN KIRKPATRICK, Arizona
    DAN BENISHEK, Michigan               RAUL RUIZ, California
    TIM HUELSKAMP, Kansas                GLORIA NEGRETE McLEOD, California
    MIKE COFFMAN, Colorado               ANN M. KUSTER, New Hampshire
    BRAD R. WENSTRUP, Ohio               BETO O'ROURKE, Texas
    PAUL COOK, California                TIMOTHY J. WALZ, Minnesota
    JACKIE WALORSKI, Indiana
    DAVID JOLLY, Florida
                           Jon Towers, Staff Director
                     Nancy Dolan, Democratic Staff Director

                  SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATION

                        MIKE COFFMAN, Colorado, Chairman

    DOUG LAMBORN, Colorado               ANN KIRKPATRICK, Arizona, Ranking
    DAVID P. ROE, Tennessee                  Member
    TIM HUELSKAMP, Kansas                MARK TAKANO, California
    DAN BENISHEK, Michigan               ANN M. KUSTER, New Hampshire
    JACKIE WALORSKI, Indiana             BETO O'ROURKE, Texas
                                         TIMOTHY J. WALZ, Minnesota

    Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public
    hearing records of the Committee on Veterans' Affairs are also
    published in electronic form. The printed hearing record remains the
    official version. Because electronic submissions are used to prepare
    both printed and electronic versions of the hearing record, the process
    of converting between various electronic formats may introduce
    unintentional errors or omissions. Such occurrences are inherent in the
    current publication process and should diminish as the process is
    further refined.
                                C O N T E N T S

                                  ----------

                            Tuesday, March 25, 2014

                                                                       Page
    Legislative Hearing on H.R. 3593, H.R. 4261, H.R. 4281 and Other
      Draft Legislation..............................................     1

                               OPENING STATEMENTS

    Hon. Mike Coffman, Chairman, Subcommittee on O&I.................     1
    Hon. Ann Kirkpatrick , Ranking Member............................     2

                                   WITNESSES

    Ms. Stella S. Fiotes, Executive Director, Office of Construction
      and Facilities Management, Office of Acquisition, Logistics and
      Construction, Department of Veterans Affairs...................     6
        Prepared Statement...........................................    34

        Accompanied by:

    Mr. Tom Leney, Executive Director, Office of Small `
      Disadvantaged Business Utilization, Department of Veterans'
      Affairs........................................................     8
    Mr. Gregory Wilshusen, Director, Information Security Issues,
      U.S. Government Accountability Office..........................    17
        Prepared Statement...........................................    37
    Mr. Raymond Kelly, Director, National Legislative Service,
      Veterans of Foreign Wars.......................................    18
        Prepared Statement...........................................    53
    Ms. Diane Zumatto, National Legislative Director, AMVETS.........    20
        Prepared Statement...........................................    55
    Mr. James H. Binns, Chairman, Research Advisory Committee of Gulf
      War Veterans' Illness..........................................    21
        Prepared Statement...........................................    62
    Mr. Davy Leghorn, Assistant Director, Veterans Employment and
      Education Division, The American Legion........................    23
        Prepared Statement...........................................    95
    Mr. Frank Wilton, Chief Executive Officer, American Association
      of Tissue Banks................................................    24
        Prepared Statement...........................................   100

    LEGISLATIVE HEARING ON H.R. 3593, H.R. 4261, H.R. 4281 AND OTHER DRAFT
                                  LEGISLATION

                                  ----------

                            Tuesday, March 25, 2014

                 U.S. House of Representatives,
                        Committee on Veterans' Affairs,
                   Subcommittee on Oversight and Investigation,
                                                       Washington, D.C.
        The Subcommittee met, pursuant to notice, at 10:00 a.m., in
    Room 334, Cannon House Office Building, Hon. Mike Coffman
    [chairman of the subcommittee] presiding.
        Present:  Representatives Coffman

               OPENING STATEMENT OF CHAIRMAN MIKE COFFMAN

        Mr. Coffman. Good morning. This hearing will come together.
        I want to welcome everyone to today's legislative hearing
    on H.R. 3593, H.R. 4261, H.R. 4281, and two pieces of draft
    legislation.
        The five bills we will be considering today are the product
    of extensive investigations conducted by this subcommittee in
    the course of its oversight duties that have revealed poor
    judgment, chronic mismanagement, and a general lack of
    accountability by the Department of Veterans' Affairs. These
    bills are intended to heighten the protection for our veterans
    and improve services provided by the VA.
        First we will hear about H.R. 3593, the VA Construction
    Assistance Act of 2013, which ranking member Kirkpatrick and
    myself introduced on November 13, 2013.
        This bill recognizes the tremendous problems associated
    with VA major construction projects in Aurora, Colorado, New
    Orleans, Louisiana, and Orlando, Florida, as identified by an
    O&I investigation and substantiated by GAO report.
        According to these findings VA is delayed an average of 35
    months with an average cost overrun of $366 million.
        This legislation requires the VA to use the Army Corps of
    Engineers as the special project manager to assist in
    completing these projects closer to their original budget and
    completion dates.
        Notably this bill is supported by the Veterans of Foreign
    Wars, the American Legion, and the former secretary of
    Veterans' Affairs, Jim Nicholson.
        Second we will address H.R. 4261, the Gulf War Health
    Research Reform Act of 2014, which I introduced last week,
    along with Ranking Member Kirkpatrick and full committee
    Ranking Member Michaud.
        This bill reinstills the independence originally expected
    of the research advisor committee for gulf war illnesses, which
    includes overseeing VA's research on gulf war illnesses in
    order to improve the lives of those suffering as a result of
    such illnesses.
        Third, we will hear about H.R. 4281, the Protecting
    Business Opportunities for Veterans Act of 2014 sponsored by
    the Honorable Tim Huelskamp of Kansas.
        H.R. 4281 will make tremendous strides and holding
    accountable the bad actors that attempt to defraud service-
    disabled veteran-owned small businesses and other veteran-owned
    small businesses of crucial set asides they receive in
    business.
        Fourth, we will discuss a piece of draft legislation
    entitled The Biological Implant Tracking and Veterans Safety
    Act of 2014.
        This legislation requires the VA to implement a standard
    identification protocol for biological implants that is
    consistent with the FDA's unique identification system. The
    system must allow for the tracking of implants from donor to
    recipients.
        This bill also requires the VA to procure biological
    implants only from vendors using the system and only through
    competitive procurement processes.
        Ultimately this legislation will improve VA's ability to
    prevent the implantation of contaminated tissue and also to
    notify veterans in cases of FDA recalls.
        Finally, we will hear about the draft directive titled The
    Veteran Information Security Improvement Act of 2014, which is
    sponsored by the Honorable Jackie Walorski from Indiana.
        This IT security directive is designed to assist VA in
    mitigating known information security weaknesses, and prevent,
    limit, and detect unauthorized access to its networks and
    systems.
        It also identifies detailed actions and tasks consistent
    with current federal requirements that should be taken by VA to
    address this longstanding information security challenges. Once
    again, I would like to thank all of those in attendance for
    joining us in our discussion today, and I now recognize Ranking
    Member Kirkpatrick from Arizona for five minutes to discuss her
    opening statement.

          OPENING STATEMENT OF RANKING MEMBER, ANN KIRKPATRICK

        Ms. Kirkpatrick. Thank you. Thank you, Mr. Chairman for
    holding this hearing.
        Holding hearings on proposed legislation within the
    jurisdiction of our subcommittee is one of the most important
    legislative duties we have. These hearings enable us to gather
    the viewpoints of the Department of Veterans Affairs, veterans
    groups, and those with specific expertise regarding the matters
    under consideration.
        It is important that we gather these views and thoroughly
    consider them as we deliberate which bills this subcommittee
    will forward to the full committee.
        We in Congress should never assume we have all the answers.
    That is important to remember as we consider the often blunt
    tool of legislation.
        If we truly seek the most effective ways to accomplish a
    policy goal then we must carefully consider the views of
    stakeholders, including those who would enact the policy and
    those whose lives would be affected by it.
        At the end of the day we are all striving to fix problems
    and improve the services and benefits that VA provides for
    veterans. This shared priority is a reflection of our nation's
    commitment to our veterans.
        I note that the VA is able to provide comments on only two
    of the bills before us today. I ask that the VA provide us with
    its comments regarding the other bills as soon as possible so
    that we may be able to consider the department's views going
    forward.
        I also ask that all of our witnesses provide us their views
    on any of the bills that they have not had time to include in
    their testimony.
        I also ask, Mr. Chairman, that in future legislative
    hearings we try as hard as we can to set the agenda early
    enough to provide all of our witnesses with the time they need
    to provide us with their thoughtful views on the bills before
    us.
        There are two bills before us today that I have co-
    sponsored with the chairman, H.R. 3593, the VA Construction
    Assistance Act of 2013 and H.R. 4261, the Gulf War Health
    Research Reform Act of 2014. I especially look forward to
    hearing from our witnesses regarding these bills.
        Again, thank you, Mr. Chairman, for holding this hearing, I
    look forward to hearing from our witnesses, and I yield back
    the balance of my time.
        Mr. Coffman. Thank you, ranking member.
        Mr. Huelskamp, you are recognized for five minutes.
        Dr. Huelskamp. Thank you, Mr. Chairman, I appreciate the
    opportunity to testify in support of H.R. 4281, the Protecting
    Business Opportunities for Veterans Act of 2014.
        Over the years this committee has heard testimony, received
    Inspection General reports, and heard reports of numerous
    businesses who we believe took advantage of set-asides
    rightfully reserved for service-disabled veteran-owned small
    businesses.
        As a member of this subcommittee as well as the house small
    business committee I believe the evidence of fraud and abuse of
    these programs requires stricter oversight and enforcement.
        This act would apply to small business concerns owned and
    controlled by a veteran with a service disability as well as
    small businesses controlled by veterans who receive federal
    contracts from the VA.
        The bill simply requires that upon receiving a contract
    with the VA the VA must obtain a certification that the
    business concerns will comply with the requirements already
    written into the law, in particular it will address how the
    recipient of the contract will meet the requirement that 51
    percent of the contracted service or work be performed by a
    veteran-owned business or a service-disabled veteran-owned
    business.
        Those receiving a contract will be required one, to certify
    to the VA that to meet the specific performance requirements
    already in law, and two, acknowledge that the certification is
    subject to the false statement penalty under the U.S. Criminal
    Code.
        Furthermore this legislation will require the Office of
    Small Business and Disadvantage Business Utilization and the
    VA's chief acquisition officer to implement a process to
    monitor compliance and insure violations are reported to the
    Office of Inspector General.
        The IG is then required to file an annual report to the
    house and senate VA committees showing the number of small
    business concerns suspended or debarred from federal
    contracting and those referred for prosecution for violating
    the certification requirement.
        The intent in this bill simply is to provide law
    enforcement with the necessary tools to crack down on the
    contractors who use pass through and other methods to take
    advantage of set-asides rightfully reserved for veterans.
        An affirmative certification at the time of the award
    constitutes strong evidence of the knowledge and intent to
    deceive if a contractor is later found to have not been
    eligible.
        Finally the bill is necessary to direct the OSDBU and the
    VA chief acquisition officer to do what they should be doing
    all long, that is to monitor and enforce compliance.
        The Protecting Business Opportunities for Veterans Act will
    insure those rightfully deserving of the contracts have access
    and put in place tougher enforcement mechanisms to insure those
    wishing to exploit the system are caught and held accountable.
        And with that I yield back the balance of my time, Mr.
    Chairman. Thank you.
        Mr. Coffman. Thank you, Mr. Huelskamp.
        Ms. Walorski, you are now recognized for five minutes.
        Ms. Walorski. Thank you, Mr. Chairman.
        This directive stems from feedback the committee received
    regarding the members only briefing held on December 3rd, 2013
    which the VA, VA's Office of Inspector General, and the
    Government Accountability Office all attended.
        At this briefing the committee provided an overview of VA's
    information security vulnerabilities using VA's own internal
    documents and previous testimony for VA Inspector's General.
        Recognizing the importance of protecting the personal
    information of their constituents many members of Congress have
    asked the committee to take all steps necessary to strengthen
    IT security within the VA.
        In addition to the December briefing the committee held
    numerous meetings and discussions, sent information security-
    related letters, and held a hearing in June 2013 to address IT
    security weaknesses. Unfortunately VA's lack of response,
    cooperation, and dialogue has been a longstanding issue that
    continues to this day.
        During the December briefing independent information
    security experts verified HVAC's findings about the VA's
    critical network vulnerabilities, including the following.
        VA's network had been compromised, at least nine times
    since March 2010.
        Within VA's 420,000 computers there were 5 vulnerabilities
    on at least 95 percent of these computers.
        VA employs tens of thousands of outdated operating systems.
        Because of VISTA's vulnerabilities VA stated that a data
    breach to financial, medical, and personal veteran and employee
    protected information will occur with no way of tracking the
    source of the breach.
        Over the past 20 years VA's independent auditor, Office of
    Inspector General, and the GAO have all reported persistent
    weaknesses in the VA's security, placing veterans' personal
    information in jeopardy.
        In fiscal year 2013 the VA's independent auditor reported
    material weaknesses in IT security for the twelfth year in a
    row. The VA's Inspector General identified VA's lack of
    effective information security controls as a major management
    challenge.
        The IG's upcoming FISMA audit provides 35 recommendations
    for improving VA's information security program. Thirty-two of
    these recommendations are identical to recommendations included
    in the previous years' audit.
        The GAO has found VA's IT security issues since the late
    1990's.
        Since 2007 the GAO has found major weaknesses in each of
    the five major categories of information security controls at
    the VA.
        The number of incidents affecting VA's computer systems and
    network has risen over the last several years.
        The VA system serves as a gateway to many other federal IT
    systems. Given the goal of integrating electronic health
    records with the DoD and the eventual future connection of the
    National Health Care Program securing the VA's IT system is
    critical.
        VA's persistent, decades long IT security weaknesses
    highlight the need for stronger, more focused action to insure
    that the VA fully implements a robust security program.
        Despite OIG's testimony and the committees' evidentiary
    documents that originated within the VA itself, VA officials
    did not concur with our findings from the briefing, including
    that critical security vulnerabilities do exist and that the
    domain controller remains compromised.
        It is important to understand the critical nature of the
    security failures we are discussing. Not only do these failures
    disrupt the daily transactions between the VA and the veterans,
    but they are incredibly costly.
        The VA IT security failure in 2006 that impacted 26 and a
    half million veterans cost the VA $50 million just to mail out
    data breach notices.
        Given VA and OIT's more than 3.7 billion budget and
    thousands of employees, these numerous security flaws are
    unreasonable and irresponsible.
        These failures are not due to a lack of resources, they are
    due to a lack of priorities and proper federal guidance.
        I am confident this directive will provide the VA with a
    clear road map, prevent ambiguity, and take away any guesswork
    in order to achieve a risk-based approach to address each of
    these challenges.
        The GAO has agreed and stated that if the directive is
    implemented it will allow VA to refocus its efforts on steps
    needed to improve the security of its systems and information.
        This bill itself establishes an explicit plan of action to
    resolve VA's IT security weaknesses as identified by the
    committee, GOA, VA OIG, and others. This plan is taken from a
    common federal and industry best practices.
        Specifically the bill directs the secretary to reclaim,
    secure, and safeguard VA's network, including their domain
    controller; defend workstations from critical security
    vulnerabilities; upgrade or phase out of unsupported and
    outdated operating systems; secure web applications from vital
    vulnerabilities; protect VISTA from anonymous user access; and
    comply with federal information securities laws, OMB guidance,
    and NIST standards.
        To improve transparency and accountability the bill directs
    the secretary to submit to the committee a biannual
    implementation report, including a description of the actions
    taken by the secretary, to implement and comply with the
    directive. The VA OIG will also be required to submit to the
    committee an annual report that includes a comprehensive
    assessment of VA's execution of the directive.
        Finally on a monthly basis the secretary shall submit to
    the committee reports on any discovered security
    vulnerabilities.
        Thank you, Mr. Chairman, I think our veterans deserve
    better. Thank you.
        Mr. Coffman. Thank you, Ms. Walorski.
        Our first panel is now at the witness table and I thank you
    for being here today.
        We will hear from Ms. Stella Fiotes, Executive Director of
    the Office of Construction Facilities Management from the
    Department of Veterans Affairs. She is accompanied by Mr. Tom
    Leney, Executive Director of the Office of Small &
    Disadvantaged Business Utilization of the Department of
    Veterans Affairs.
        Ms. Fiotes, your complete written statement will be made a
    part of the hearing record, and you are now recognized for five
    minutes.

     STATEMENTS OF STELLA S. FIOTES, EXECUTIVE DIRECTOR, OFFICE OF
    CONSTRUCTION AND FACILITIES MANAGEMENT, OFFICE OF ACQUISITION,
      LOGISTICS AND CONSTRUCTION, DEPARTMENT OF VETERANS AFFAIRS;
    ACCOMPANIED BY TOM LENEY, EXECUTIVE DIRECTOR, OFFICE OF SMALL &
      DISADVANTAGED BUSINESS UTILIZATION, DEPARTMENT OF VETERANS
                                AFFAIRS

                     STATEMENT OF STELLA S. FIOTES

        Ms. Fiotes. Thank you.
        Good morning, Mr. Chairman, Ranking Member Kirkpatrick, and
    other members of the subcommittee. Thank you for the
    opportunity to be here today to discuss VA's views on pending
    legislation, including H.R. 3593, the VA Construction
    Assistance Act of 2013 and a draft bill that concerns
    compliance with VA's small business programs.
        Mr. Chairman, I would like to ask that our written
    statement be entered for the record.
        Mr. Chairman, VA is not testifying on all the bills on the
    agenda today. Draft bills on gulf war illness research matters
    and VA IT securities programs were not received in sufficient
    time to prepare and clear administration views.
        I want to insure the subcommittee understands we are not
    dismissive of these remaining bills or your interest in them,
    this was purely a matter of having sufficient time to prepare
    well developed and helpful formal views on complicated
    subjects.
        As noted in our written testimony we will be following up
    for the record on the remaining bills and we are glad to brief
    you and your staff at your convenience on the subject matter
    covered by those bills.
        I will speak to H.R. 3593 first.
        VA appreciates the strong interest and support from the
    subcommittee to insure that our major construction projects are
    delivered successfully.
        I would like to make the point that VA has a strong history
    of delivering facilities to serve veterans. In the past five
    years VA has delivered 75 major construction projects valued at
    over $3 billion; however, we also fully acknowledge our
    challenges on the major construction projects that have been
    the subject of a great deal of dialogue with you and other
    stakeholders. We are committed to continuing that dialogue.
        VA however does not believe that the approach outlined in
    the bill will achieve the desired results and thus does not
    support it.
        While there have been challenges with our projects we have
    taken numerous actions to strengthen and improve the execution
    of all of VA's ongoing major construction projects and insuring
    the department's future capital program is delivered on time
    and within budget.
        These include implementing the recommendations from the GAO
    and the Department's Construction Review Counsel, including the
    specific actions that would be required in Section III of the
    bill. Therefore we don't believe Section III of the bill is
    necessary.
        Section IV of the bill would require that VA enter into an
    agreement with the Army Corps of Engineers to procure a special
    project manager to oversee VA major construction projects for
    facilities in Denver, Orlando, and New Orleans.
        VA believes the creation of a special project manager would
    be problematic in the management and supervision of these
    projects.
        The bill raises serious questions about the contractual
    relationship between the VA and its contractor, potential
    confusion on the lines of authority the special project manager
    will have, vis-a-vis, the VA and the Corps, and the affect upon
    the independent exercise of discretion by the VA contracting
    officer who is ultimately responsible for managing the contract
    on behalf of the government.
        VA however continues to be open to consultation and
    collaboration with the Corps or other specialists outside VA.
        We continuously evaluate our processes and delivery methods
    for each lease and for each construction project on its merits
    and we benchmark industry best practices with several agencies,
    including the National Institute of Building Sciences, GSA, and
    the Corps.
        When VA determines that the best delivery strategy is to
    employ another agency such as the Corps this strategy is used.
    In fact VA and the Corps have a long history of working
    together to advance VA facility construction and share best
    practices. Our current discussions with the Corps are a logical
    evolution of that relationship.
        Mr. Chairman, thank you for the opportunity to present
    views on this bill.
        I would like to now turn to my colleague, Tom Leney, who
    will address the bill regarding service disabled veteran owned
    small businesses.

        [The prepared statement of Stella S. Fiotes appears in the
    Appendix]

                         STATEMENT OF TOM LENEY

        Mr. Leney. Good morning, Mr. Chairman, Ranking Member
    Kirkpatrick and other members of the subcommittee. Thank you
    for the opportunity to discuss the draft small business measure
    that the subcommittee asked us to review.
        Mr. Chairman, we understand that H.R. 4281, the Protecting
    Small Business Opportunities for Veterans Act was just
    introduced on Friday, March 21st. It differs substantially from
    the draft that we received earlier and the VA has not had the
    opportunity to comprehensively review this new text.
        You have our views on the original draft bill, I will
    provide some comments to the subcommittee regarding our
    preliminary analysis of the version introduced late last week
    as 4281.
        The VA understands the committee's interest in veterans
    complying with the rules on limitations of subcontracting as
    the VA procures more dollars and awards from SDVOSB's than the
    other civilian agencies of the government combined.
    Unfortunately this draft bill only applies to veteran-owned
    small businesses that are contracting with the VA.
        We think it unfairly singles out veterans and places an
    unfair burden on those businesses that would not be required of
    any other small businesses or at any other agency.
        Tools exist that we believe can meet the aims of this
    legislation. For example, monitoring the amount of work passed
    to subcontractors is required of contracting officers under the
    current federal acquisition regulation.
        In addition the VA has established a subcontracting
    compliance review program that audits prime contractors to
    insure compliance with this provision.
        We believe processes such as these enable us to achieve the
    objectives set out in the legislation.
        Thank you for the opportunity to testify before the
    committee today. Ms. Fiotes and I look forward to answering any
    questions the committee may have.
        Mr. Coffman. Our thanks to the panel.
        Okay. Ms. Fiotes, in Denver VA asked for bids based on the
    presumption that it would produce a $604 million project for
    the hospital, but it appears VA has produced potentially a
    billion dollar incomplete design which they provided eight
    months after the bid process was completed. How can VA prevent
    such loss of control in future designs?
        Ms. Fiotes. Mr. Chairman, we believe that the project
    designs we have delivered, albeit somewhat later than
    originally anticipated, are in fact able to be constructed
    within the appropriated amount for this project.
        Mr. Coffman. Ms. Fiotes, you reference the new Las Vegas
    facility in your testimony as an example of VA completing major
    construction; however, according to the GAO report Las Vegas
    was $260 million over budget and 74 months late. So is this
    representative of VA major construction efficiency, this
    project?
        Ms. Fiotes. Mr. Chairman, in our response to the GAO draft
    report the VA outlined that it did not agree with the
    methodology the GAO was using to assess time and cost against
    these projects, starting at some point in the very early
    planning stages when the project, and not even the site, were
    actually defined and then taking that number and that schedule
    as the basis for comparing to what ultimately happened many
    years later with a real design and a real site and a real
    construction project we believe was not an accurate depiction.
        So we would argue that the time and the cost should be
    judged against the appropriated amount by Congress and the time
    the construction was bid, and in that sense we would state that
    the project was in fact delivered on time and on budget.
        Mr. Coffman. So are you saying that this project was
    delivered on budget and on time, the Las Vegas project?
        Ms. Fiotes. Based on the way that we account for time and
    budget, yes.
        Mr. Coffman. Wow. Well the GAO obviously differs with you,
    and I think what was so compelling about the GAO report was
    that in the report it referenced the Army Corps of Engineers as
    building the same projects or what it called similar projects
    for the Department of Defense on budget and on schedule.
        Ms. Fiotes, do you believe that contractors submit
    excessive or unwarranted change orders to drive up cost or
    cause delays? How does VA manage the change order process?
        Ms. Fiotes. Mr. Chairman, the change order process is a
    very critical process in the duration of the construction of
    any large complex project, and we recognized, as did some of
    the GAO reports, that our process was too lengthy and too
    cumbersome resulting in delays in the execution of the change
    orders and the payment of those change orders.
        We have since addressed those challenges. We have put in
    place new policies, we have established metrics for the change
    orders, we have added staff, we have added legal counsel to
    help us with the review of the change orders, and we are in a
    much better position now and are processing our change orders
    at a much better rate than in the past.
        We hope within the next several months to be completely
    caught up with our backlog.
        Mr. Coffman. So when the GAO report says that these major
    medical construction projects are delayed an average of 35
    months each with an average overrun of $360 million each, you
    differ with GAO and you say that you can produce accounting
    standards that erase those delays and erase the amount that is
    over budget? You can come up with that?
        Ms. Fiotes. Mr. Chairman, I didn't reference accounting
    standards, I just referenced our response to the GAO, which the
    GAO included in their final report, although they did not agree
    with our approach.
        It is that we measure time from the time a construction
    project is awarded and not from the time it was conceived, and
    we measure cost from the time the full amount is appropriated,
    not from the time the project was conceived. That was the
    difference between our evaluation of time and schedule and the
    GAO's evaluation.
        Mr. Coffman. Well it is whatever you say it is on any given
    day.
        Ms. Kirkpatrick. Thank you, Mr. Chairman.
        Thank you for your testimony today, and we want to, you
    know, help to solve this problem and get these construction
    projects completed so they can serve our veterans.
        And my line of question is going to be addressing two
    things. One is, is basically the construction management and
    using USACE, and then I also want to talk a little bit about
    the bid process. So those will be my lines of questioning.
        First, has the VA used USACE in managing a major
    construction project recently?
        Ms. Fiotes. Ranking Member Kirkpatrick, we have not used
    them for major construction projects; however, we have used the
    Corps for a number of minor construction projects, and more
    recently in construction projects for our National Cemetery
    Administration as well.
        Ms. Kirkpatrick. Have you done any quantitative studies
    between the Corps' overhead and your internal overhead as
    opposed to--when you use them I mean is there a difference in
    the overhead costs?
        Ms. Fiotes. I don't have those facts before me. We could
    compare those. I am not sure what the numbers are. I just don't
    know if we have done that, because those projects, the minor
    projects are not in my jurisdiction, they are completed by the
    Veterans Health Administration. But we could certainly get some
    more information if you would like.
        Ms. Kirkpatrick. Does it make sense to you to use the Army
    Corps of Engineers in major construction management projects?
        Ms. Fiotes. Again, congresswoman, as I said, we evaluate
    each project on its merits, and if there were a case where we
    had a major project that we wanted to undertake with the Corps
    we would have to enter into early discussions with them way
    before the time that we would award a construction contract to
    see if that would be an appropriate vehicle to use. And we have
    done that, as I said, with numerous minor projects.
        Ms. Kirkpatrick. Okay, let me go quickly to the bid process
    and we may go back to the management.
        Although your testimony doesn't address the use of design
    build versus design bid build the legislation we are proposing
    requires design build to the extent practical.
        Can you enlighten the committee on the advantages and
    disadvantages of each of the types of bid process, design build
    versus design bid build?
        Ms. Fiotes. Congresswoman, the design build delivery method
    is a method where the architect and the contractor are awarded
    one single contract and the contractor has the responsibility
    to deliver the design as well as the construction of the
    project.
        The traditional design bid build process is where we have a
    separate contract with an architect engineer to develop a
    design, 100 percent design, and then go out to bid and hire and
    award a construction contract to a separate contractor to build
    the project.
        There are advantages and disadvantages to both.
        The traditional method allows for a complete design and for
    input of the user and the facility during the development of
    the design.
        The design build process takes a little bit more of the
    design out of the control, if you will, of the user and puts it
    in the hands of the contractor. It is said to save time in some
    instances. And again, it is a case by case basis.
        I will tell you that I have used design build in previous
    contracts, we have used design build at the VA for certain
    projects. Traditionally the very complex projects such as the
    medical centers we are talking about would probably not be the
    best suited for a design build because it would be very
    difficult to just describe the performance requirements and
    then leave the design completely up to somebody independent of
    the users.
        But we have in certain cases where it was just a single
    more standard type of construction project we have used design
    build, and we are considering using it in the future as well.
        So it is a case by case analysis of the project and what
    best suits it.
        Ms. Kirkpatrick. One quick last question.
        Are change orders treated differently depending on whether
    it is design build or design bid build?
        Ms. Fiotes. Yes, they are.
        Ms. Kirkpatrick. And how is that different?
        Ms. Fiotes. In the design bid build process the contractor
    has bid on 100 percent design documents and therefore any
    changes from those documents, that happen either because of a
    government proposed change or because of unforeseen conditions,
    must be submitted by the contractor to the government for an
    independent estimate and then an issuance of a change order for
    the amount that the government deems appropriate for that
    change.
        In a design build process there are fewer opportunities for
    the discussion between the government and the contractor on
    change orders because the contractor has taken on some of the
    risk of changes since he has developed the design as well.
        That is not to say that there are not changes and in the
    design build process when there are changes they are usually
    much more expensive.
        Ms. Kirkpatrick. Thank you. I have gone over my time.
        Thank you for allowing me, Mr. Chairman.
        Mr. Coffman. Thank you, ranking member.
        Dr. Roe, State of Tennessee.
        Dr. Roe. Thank you, Mr. Chairman.
        And I want to delve in further what Ms. Kirkpatrick was
    talking about, something I have a lot of experience with having
    been in the process of building three hospitals, three medical
    office buildings, schools, public buildings for the City of
    Johnson City, Tennessee, so I am very familiar with the bid
    process and change orders.
        And literally it should be embarrassing to the VA, this
    Orlando, I mean I think the cubs are going to win the world
    series before that hospital is finished in Orlando, Florida, I
    think that is a possibility. So anything to speed it up,
    because money spent with what happened down there is not money
    spent on some other needy project the VA has. So I am going to
    go with what we did.
        Very simply there are two ways. You very well stated out
    what a design bid build and what design build is, and they both
    have advantages and disadvantages.
        What I like about the design bid build is, is that when we
    would build a school, for instance, at home we would build in
    probably about ten percent change order. We knew there were
    going to some change orders. Once you get started there are
    things when you have designed it as well as you can with your
    architect and you had a sealed bid and a qualified contractor
    bid on it, you know you are going to run across some things in
    there that weren't anticipated, so we build about ten percent
    and sometimes you don't.
        And what you described is the way it should be done. If you
    hit something that needs to be changed it comes back, we would
    vote on it in a city council, approve that change order or not
    approve it, and go on.
        So I think that is a very good way to do it, and to have
    a--and what we hired--we learned this very early on, we hired
    our own person to not just have the contractor there, and that
    is why I think having a supervisor in the Corps of Engineers is
    a great idea, because you have got a third party who can look
    after your interests and watch over that project. And we hired
    someone, the City of Johnson City, a former contractor to do
    that very thing. They would look over every building structure
    that we put up, he was there every day several days a week at
    least looking over and supervising that along with it and
    working with the contractor, not some adversary, but looking
    after it, but looking at our interests, the taxpayers and the
    city people.
        So I would think that would be a good thing that you all
    would want that and to have an objective third party out there
    like the Corps who is not involved with VA to overlook your
    project. I think it will slow things down, I think it will make
    it better for you. I would encourage you to look favorably on
    that, not unfavorably on that.
        Any comments.
        Ms. Fiotes. Congressman, thank you for your remarks, and I
    agree with the way you have laid out the challenges,
    particularly with the change order process.
        We don't believe that the establishment of this special
    project manager will aid the project because of the complex
    contractual relationships between the VA and the contractor,
    the responsibilities of the contracting officer as the arm, if
    you will, of the government in implementing the contract, and
    then the uncertainty of the role and the authority of this
    professional contractor.
        Dr. Roe. Well why would it work where I was, because it
    worked great. I mean we felt like our interests were being
    looked after on the job site when we had someone there who knew
    what they were doing who was in the construction business, who
    could tell us, no, this is not being done. Why would it work
    there and it wouldn't work at a VA site?
        Ms. Fiotes. Well, and I can't comment on the specific
    contract and the specific project, but I can tell you that we
    do have numerous project team members and project executives
    looking out for----
        Dr. Roe. Well who was looking after Orlando?
        Ms. Fiotes. I am sorry?
        Dr. Roe. Who was looking after Orlando and Denver and Las
    Vegas, these other projects that have not gone exactly like I
    think anybody wanted them to?
        Ms. Fiotes. And I agree that we have run into challenges,
    and I can't speak anymore about the Orlando challenges because
    I think we have spoken about those in the past, but I think
    that the cooperation and the collaboration with the Army Corps
    of Engineers could be a benefit to the VA and to the project if
    it is the right type of collaboration.
        Dr. Roe. I agree 100 percent, and I think, I am looking
    at----
        Ms. Fiotes. We just don't think that the project manager
    may be the best vehicle.
        Dr. Roe. I think a project manager, someone who is there to
    look after our interests, the taxpayers, the veterans' interest
    to make sure this project is done right and to point it to work
    with the contractor, not as an adversary. We didn't have that
    relationship with our contractors. And I think you will find it
    works very well. I am surprised that the VA has a reluctance to
    do that.
        Mr. Chairman, I see my time has expired, I yield back.
        Mr. Coffman. Thank you, Mr. Roe.
        Mr. Walz.
        Ms. Walorski.
        Ms. Walorski. Thank you, Mr. Chairman.
        Ms. Fiotes, does the VA make sure that its prime
    contractors use surety bonds with their subcontractors to
    insure timely payment?
        Ms. Fiotes. Yes, we do, congresswoman.
        Ms. Walorski. On all projects?
        Ms. Fiotes. On all our projects, yes.
        Ms. Walorski. Thank you, Mr. Chairman, I yield back.
        Mr. Coffman. Mr. O'Rourke.
        Mr. O'Rourke. Thank you, Mr. Chairman.
        I want to see if I can better understand some of what we
    are talking about.
        And so I understand that you don't agree with the
    conclusions that the GAO has reached, and when the chairman was
    asking about the Las Vegas project in particular you talked
    about a difference in terms of when you begin to measure the
    costs outlayed and the start of the clock for the construction,
    not when the idea was conceived, but when the funds were
    appropriated.
        But would you accept I guess the thrust of the argument
    that projects are taking too long to complete and are too
    expensive or more expensive than they should be?
        Ms. Fiotes. I can't necessarily agree with that. If we look
    at the projects at the time that they are fully scoped out with
    their requirements clearly defined with an appropriation that
    matches the requirements that have been submitted I can't say
    that we exceed the cost after that point.
        But if the project spends too much time trying to get to
    that point that is a problem, and that challenge we have
    recognized. We have recognized that when the Construction
    Review Council, chaired by the Secretary, looked at some of
    those projects, and we recognize that the early stages of
    planning needed to be strengthened and we needed to be very
    clear in defining our requirements and our scope before we came
    to Congress asking for money, and we have put that in policy
    and we no longer submit projects going forward for construction
    of appropriation lists, we have 35 percent design completed.
        That gives us the confidence that we have established the
    requirements, we know the basics of what the design is going to
    look like, and we have a substantive budget that we can base
    our request on.
        I don't think that was happening in the past, and some of
    the projects that we are discussing happened before these
    policies were put in place.
        Mr. O'Rourke. I appreciate that, and my perspective in my
    job representing El Paso is the fact that our VA facility--
    proposed VA facility, which is to be co-located with the active
    duty military hospital in El Paso, is number 79 on that SCIP
    list, which lists, all capital projects the VA has yet to
    construct, and so if--I understand the improvement in the
    processes that you just described, but if you are unable to
    acknowledge that the hundreds of millions of dollars in
    individual projects over what they were initially conceived to
    be and that the amount of time that we are taking to complete
    these is a problem and needs a more urgent corrective action to
    resolve it, it is deeply troubling to me as number 79 on the
    list for a facility that is desperately needed in El Paso where
    we are sending folks on a ten-hour round trip to get care that
    they should be able to receive in the community.
        So I hope you understand where I am coming from on this,
    and I agree with our ranking member who said, you know, we
    should only with the greatest hesitation move forward on
    legislation because it is such a blunt instrument, and you are
    the subject matter expert in this, not me, so I want you to be
    able to come up with the best possible solution to the problem
    we have.
        But it is hard for me when it doesn't seem like there is an
    acceptance of the problem or at a minimum a very wide gulf
    between what you are hearing up here from the folks who
    represent these communities where we have these large cost and
    time overruns and then what you are saying, which is, you know,
    I guess changing--a difference of opinion about when the clock
    starts. You know, by the time you start the clock on our
    project we are, you know, a decade plus out from start.
        So that is where I am coming from, and it makes me more
    likely to support this legislation when I don't hear in terms
    of at least I can understand an admission of the problem and
    how it is we are going to fix it with the urgency required not
    only to fix the current problems but to get to those that are,
    you know, further down the line on that SCIP list.
        Ms. Fiotes. Congressman, I don't disagree that our process
    needed fixing, and that is what I was trying to describe before
    when I said that we recognize that we were not doing a good job
    of planning up front and establishing the requirements and
    nailing down the scope before we came to Congress to ask for an
    appropriation, and that is what has caused what appears to be a
    series of cost increases.
        The fact that the project started as a shared facility
    somewhere and ended up being a stand-alone replacement hospital
    on its own campus in the span--over the span of several years
    of course added hundreds of millions of dollars to the cost.
    That was our fault. We were not doing a good job of planning
    before we came to the Congress.
        We do acknowledge that, and that is the reason that was the
    number one recommendation from the Construction Review Council
    and the number one priority to implement it. We would not bring
    forth projects that were not thoroughly thought through,
    thoroughly designed, and with a good solid budget before we
    asked for money.
        So no, I did not say that we did not--I just--that we did
    not have issues, I just said that the way the GAO report
    presented the cost escalations we did not agree with.
        Mr. O'Rourke. I appreciate that.
        My time is expired, but I would love to follow up with your
    office after this to find out how this impacts not only the
    projects that we have identified today but those much further
    down the line, like number 79 on the SCIP list.
        Ms. Fiotes. No, we owe you that, congressman, we talked
    about it last time, we just didn't make it happen yet. We will.
        Mr. O'Rourke. Thank you.
        Thank you, Mr. Chairman.
        Mr. Coffman. Thank you. Dr. Huelskamp.
        Dr. Huelskamp. Thank you, Mr. Chairman.
        Mr. Leney, I appreciate your testimony, I appreciate that
    you haven't had a full opportunity to review H.R. 4281, but a
    couple questions just on the program, and I am looking back at
    the GAO report from last August or over a year ago I guess,
    longer than that, August 2012, indicating the program remains
    vulnerable to fraud and abuse. Can you quantify the extent of
    the abuse by pass through?
        Mr. Leney. Yes, sir. Since the last GAO report we put a lot
    of effort into making sure that the veterans first program is
    not vulnerable to fraud and abuse.
        We have instituted post verification audits of our eligible
    firms, we are doing about 100 of those a month. To date we have
    found less than three percent of the firms that we audit are
    ineligible; we go on site, look at the firms, look at their
    documentation, they are unannounced audits. Sometimes veterans
    do not appreciate the need to do that, but we appreciate the
    need to insure the integrity of the program, and we have found
    less than three percent to be ineligible at the time we audit
    them.
        So we think that the process that we use to verify firms is
    a very solid one, it sets the standard for the federal
    government, and it has been successful.
        This bill however speaks to a different issue, which is the
    issue of limitations on subcontracting, which is not directly
    in the purview of my office so I am going to step on a limb a
    little bit to talk about what contracting officers do.
        Contracting officers do monitor the performance of prime
    contractors and our office of acquisition and logistics and
    construction has put together a program where we go out and we
    do a subcontracting review. They also go on site, they look at
    documentation to determine whether or not prime contractors are
    both meeting the small business subcontracting goals and to
    insure that limitations on subcontracting are met.
        Dr. Huelskamp. I didn't understand, Mr. Leney, who does
    that? It is not your office. Who is the office actually falling
    through on that?
        Mr. Leney. This falls under the office of acquisition and
    logistics and construction.
        Dr. Huelskamp. Okay. Have they had a chance to review the
    bill or any testimony from then, Mr. Chairman?
        Mr. Leney. They have not has a chance--we have not had a
    chance to discuss the final bill that you presented, but like I
    say, we do have--we do have a program, because we agree that it
    is important to insure, particularly the prime contractors,
    when we provide awards to service-disabled veteran-owned small
    businesses or any business that--they--or any small business
    that they comply with the limitations of subcontracting, and
    that is the reason the VA established that program. So we would
    do additional reviews.
        They do it on a random basis and based on a risk assessment
    if they determine that there is a concern that a small business
    is not meeting its subcontracting.
        Dr. Huelskamp. How would they know if there was a concern
    if they are not----
        Mr. Leney. If a contracting officer has evidence that this
    might be going on they can refer a small business to this
    program and they go out and do an audit.
        Dr. Huelskamp. Who would make the reference? Who would
    refer that?
        Mr. Leney. A contracting officer. The contracting officers
    are the people who have the responsibility to insure that the
    contract is properly implemented, and so they monitor the work
    of the prime contractor and they monitor the amount of work
    that is subcontracted out.
        Dr. Huelskamp. Well, as I read the OIG report and various
    other reports that therein is the concern, that you know, you
    say they monitor it, they have not done that adequately.
        More of a concern we have this set aside for veterans and I
    think the VA should be concerned if there is evidence that the
    work is not being done as required under the law by veterans,
    and I think we are going to hear testimony later from veterans'
    organizations that would expect that to occur.
        But as you know the false statements by contractors are
    already a violation of the law, and this sort of a bill is
    pretty simple, it just says they have to submit and that they
    understand that that helps prosecution later on if, and, when
    it is found that there is some evidence of fraud and abuse in
    this system.
        Again, I know this committee is committed to making certain
    and certainly the small business committee as well to make
    certain that the work is done as required under the law, and we
    just want to provide tools to the prosecutors to make that
    happen.
        With that, Mr. Chairman, I yield back.
        Mr. Coffman. Thank you, Mr. Huelskamp.
        Our thanks to the panel. You are now excused.
        I now welcome our second and final panel to the witness
    table. On this panel, we will hear from Mr. Gregory Wilshusen,
    Director of Information and Security Issues for the Government
    Accountability Office; Mr. Raymond Kelley, Director of National
    Legislative Service, for the Veterans of Foreign Wars of the
    United States; Ms. Diane Zumatto, National Legislative Director
    of AMVETS; Mr. James H. Binns, Chairman of the Research
    Advisory Committee on Gulf War Veterans' Illnesses; Mr. Davy
    Leghorn, Assistant Director of the Veterans Employment and
    Education Division of the American Legion; and Mr. Frank
    Wilton, Chief Executive Officer of the American Association of
    Tissue Banks.
        Now, all of your complete written statements will be made
    part of the hearing record. Mr. Wilshusen, you are now
    recognized for five minutes.

                     STATEMENT OF GREGORY WILSHUSEN

        Mr. Wilshusen. Chairman Coffman Chairman Coffman, thank you
    very much for the opportunity to testify today on this hearing
    related to some proposal legislation, particularly the one
    related to information security at the VA.
        Before I begin though, I'd like to recognize several
    members of my team, who were instrumental in developing my
    written statement. With me today is Tyler Mountjoy and also
    back at the office, Jeff Knott, Jennifer Franks and Lee
    McCracken, and these individuals will be involved with our
    ongoing review of information security at VA.
        The use of information technology is critical to VA's
    ability to carry out its mission of assuring that veterans
    receive proper health care, benefits, support and memorials.
    However, without adequate protections, the VA systems and
    information are vulnerable to exploitation by a wide array of
    cyber based threats, potentially resulting in, among other
    things, the compromise of veterans' personal information.
        GAO has identified information security as a government
    wide high risk area since 1997. And the increasing number of
    security incidents at the VA further underscores the need for
    the department to implement appropriate security over its
    systems and information.
        Our work has shown that the Department of VA continues to
    face longstanding challenges in its information security
    program. From fiscal year 2007 through 2013, we noted that VA
    has had weaknesses in each of the five major security
    categories that we track over that period of time in each year,
    and these include those controls that protect and limit
    unauthorized access to its systems, controls such as
    configuration management which are intended to ensure that only
    authorized programs are in operation and are current and apply
    appropriate patches, segregation of duties, contingency
    planning which is also intended to assure that disruptions in
    service are minimized and prevented to the extent possible, and
    importantly, security management.
        And these are the controls that establish the governance
    and assure that controls are tested, and known weaknesses are
    remediated in a current timely manner.
        For the twelfth year in a row, the VA IG has identified
    information security as a material weakness, which is the most
    significant kind in its audit of the department's financial
    statements.
        In addition, the IG has noted that it is a major management
    challenge for the department to effectively implement its
    security program. Our work that dates back to the 1990s show
    that these weaknesses have been persisting for a very long.
        And to help address this, we know that the subcommittee is
    considering draft legislation which is intended to improve and
    help VA improve its information security program.
        I would like to point out that the draft legislation allows
    for and provides that the VA implements security objectives, as
    well some very specific security control activities. In certain
    instances, the changing technologies, cyber threats and
    business practices at agencies introduces risks that very
    specific control activities that may be appropriate today may
    not be appropriate tomorrow.
        And so we suggest that by emphasizing the need for VA to
    focus on the security objectives, and ensure that the security
    activities that are identified are implemented on the basis of
    risk will help to assure that those objectives are being met
    and could result in VA improving its information security.
        Mr. Chairman, that concludes my statement. I'd be happy to
    answer your questions at the appropriate time.

        [The prepared statement of Gregory Wilshusen appears in the
    Appendix]

        Mr. Coffman. Mr. Kelly, you are now recognized for five
    minutes.

                      STATEMENT OF RAYMOND KELLEY

        Mr. Kelley. Thank you, Mr. Coffman Chairman. On behalf of
    the men and women of the Veterans of Foreign Wars and our
    auxiliary, thank you for the opportunity to testify today.
        In regards to H.R. 3593, the VA Construction Assistance Act
    of 2013, it's well documented that the Department of Veterans
    Affairs struggles to complete major medical facility
    construction projects on time and on budget.
        Currently, VA has an average project delivery delay of 35
    months and average costs overrun of more than $300 million. VA
    is in the process of building three medical centers, each of
    which has been met with their own unique problems that has
    caused VA to lose time and money that could've been used on
    other projects.
        VA has a list of major construction projects that will cost
    more than $20 billion to complete. Every effort must be made to
    ensure every dollar is used efficiently so VA can close these
    major construction gaps. H.R. 3593 will help VA achieve these
    goals.
        Section 3 of this bill calls for five specific reforms to
    VA's major medical facility construction process. They are use
    medical equipment planners, develop the use of project
    management plan, peer review project management plans, develop
    a metrics to monitor change order processing, and use designed-
    build process when possible.
        Using medical equipment planners places the experienced
    medical expert or equipment expert at the disposal of the
    architect and the construction contractor. When used properly,
    the medical equipment planner can work with the architect
    during the design phase, and then the construction contractor
    during the build phase to ensure needed space, physical
    structure, and electrical support are adequate for the
    purchased medical equipment, reducing change orders and work
    stoppages.
        Poor communication within VA and between VA and the general
    contractor has also led to delays and cost overruns. By
    developing and using project management plans, all parties at
    the onset of the project will have a clear understanding of the
    roles and the authorities of each member of the project team.
    Included in the plan will be a clear guidance on communication,
    staffing, cost and budget, as well as change order management.
        Construction peer excellence reviews are an important
    aspect to maintaining a high level of construction quality and
    efficiency. These reviews provide important feedback, a
    separate set of eyes on the project management plan, to ensure
    a plan is in place, to make the project come in on time and on
    budget.
        The VFW believes that VA should migrate from a design bid
    build to a design build model of construction management. A
    design build project teams the architect and engineer company
    and the construction contractor under one contract. This method
    can save VA up to six months of time by putting the design
    phase and the construction performance metric together. Placing
    the architect at the lead from the start to finish, and having
    a prime contractor work side-by-side with the architect, allows
    the architect to be an advocate for VA.
        Also, the architect and the prime contractor can work
    together early in the design phase, and reduce the number of
    design errors, and also allow them to identify and modify
    building plans throughout the project. The VFW agrees with the
    recommendations allowed in Section 3 of this legislation.
        Section 4 calls on VA to enter into an agreement with the
    Army Corps of Engineers, so the Corps can provide a special
    project manager to conduct oversight of the construction
    operations regarding compliance of acquisition regulations, and
    monitor the relationship of VA and the prime contractor at the
    three ongoing projects in Denver, Orlando, and New Orleans.
        The VFW supports this provision, but it should be a stop
    gap measure to help VA to quickly complete these three
    outstanding major construction projects and systems must be put
    in place to ensure VA can function under a similar guidance
    without the assistance of the Corps in future projects.
        It is important for VA to become more efficient at facility
    construction. Veterans have expectations that medical
    facilities will be available when VA first states when the
    completion date will be.
        It is obvious by looking at the number of delays and the
    cost overruns, that the contracting and building procedures
    that VA currently use are inadequate and are costing VA
    millions of dollars more for each project, and causing five or
    six years' delay on much needed medical facilities.
        By passing this legislation, VA will gain better oversight
    and cost controls and more efficient procedures for future
    construction projects.
        Mr. Chairman, this concludes my testimony and I look
    forward to any questions you or the committee may have.

        [The prepared statement of Raymond Kelley appears in the
    Appendix]

        Mr. Coffman. Thank you, Mr. Kelley. Ms. Diane Zumatto,
    National Legislative Director of AMVETS, you have five minutes.

                       STATEMENT OF DIANE ZUMATTO

        Ms. Zumatto. Chairman Coffman, Ranking Member Kirkpatrick
    and distinguished committee members, while I'm pleased to have
    the opportunity to sit before you today, I'm simultaneously
    disheartened that it's because we're dealing with
    administrative issues rather than making progress towards the
    understanding and treatment of the scourge that is Gulf War
    illness.
        If we expect to understand Gulf War illness, if we ever
    expect to develop medically appropriate treatments for it, and
    if we ever hope to truly improve the quality of life of our
    Gulf War veterans, then business as usual can no longer be
    accepted.
        Twenty-three years have passed since the end of the Gulf
    War, and sixteen since Congress first mandated the appointment
    of a public advisory panel of independent scientists and
    veterans to advise on federal studies and programs to address
    the health consequences of the Gulf War.
        AMVETS' sole interest in seeing this legislation enacted is
    the health and therefore the quality of life of our Gulf War
    veterans. For all these years now, these men and women have
    suffered and continue to suffer from the often debilitating
    effects of Gulf War illness. How much longer are they to be
    expected to wait to get relief from their decades' long pain
    and distress.
        AMVETS believes this legislation, H.R. 4261, the Gulf War
    Health Research Reform Act of 2014 can be an important part of
    the solution that Gulf War veterans have been waiting for all
    these years.
        AMVETS fully supports H.R. 4261 which would establish the
    RAC as an independent committee with authority over budget
    allocations, staffing levels and expenditures, personnel
    decisions, processes, procurements, and other administrative
    and management functions.
        This is perhaps the most important provision of the
    legislation. It would also require that the majority of the RAC
    members be appointed by the Chairman and ranking members of the
    House and Senate Veterans Affairs Committees rather than the
    VA.
        This provision means that the RAC will not become just
    another part of the VA. It will also strengthen the RAC's
    ability to review, research, and studies, as well as publish
    reports related to Gulf War illness. The ability of the
    committee to freely make and publish recommendations, reports,
    et cetera, increases transparency and positively adds to the
    body of work on Gulf War illness.
        The legislation also expressly a sense of Congress that VA
    should contract with the Institute of Medicine to conduct
    several Gulf War studies and reports previously ordered by
    Congress, which were not conducted or were not conducted in
    accordance with Congress' direction.
        Until the right questions are asked, and the correct
    studies are conducted and considered, solutions will not be
    found. It also requires the VA to ensure that research
    conducted on this disease be referred to as Gulf War illness.
    It's time for the VA to call this condition by its commonly
    accepted name.
        And with regard to future research, it would require that
    the Institute of Medicine reports on the health effects of
    veteran toxic exposures, consider animal, as well as human
    studies as Congress has previously ordered, to better
    understand the causes and how best to treat our afflicted
    veterans.
        Since its formal establishment in 2002, the RAC's charter
    has undergone a series of minor changes, including in April
    2014, May 2006, May 2008, and November 2010. Until May of 2013,
    there had not been any fundamental changes made to the
    committee's charter. All that changed with a stroke of pen on
    17 May 2013, when the independence oversight role and the
    provision providing the committee with authority over its own
    staff and budget were eliminated.
        With this action, it appears that the RAC has essentially
    been turned into nothing more than an internal VA advisory
    committee, operating strictly under VA's authority with little
    to no connection to the national community.
        I'd be happy to answer any further questions.

        [The prepared statement of Diane Zumatto appears in the
    Appendix]

        Mr. Coffman. Thank you, Ms. Zumatto. Mr. James Binns,
    Chairman of the Research Advisory Committee on Gulf War
    Veterans' Illnesses.

                      STATEMENT OF JAMES H. BINNS

        Mr. Binns. Thank you for the opportunity to testify in
    support of H.R. 4261.
        Since Congress created the Research Advisory Committee on
    Gulf War Veterans' Illnesses, our members have testified at ten
    congressional hearings. This is the last time a committee
    member will freely testify without VA censorship unless this
    bill becomes law.
        Gulf War illness is a serious disease associated with
    service in the war, affecting 250,000 veterans. It cannot be
    explained by any psychiatric illness, and likely results from
    environmental exposures.
        Effective treatments can likely be found with the right
    research. These are the conclusions of the Institute of
    Medicine. Next month our committee will release a five year
    report that shows research is making progress. But just as
    science is turning the corner, career VA and DoD staff have
    attempted to revolve old fictions, that the same thing happens
    after every war, due to psychiatric factors.
        Because there is no evidence to support this position, they
    have resorted to manipulating research to provide apparent
    support. In its recent survey of Gulf War veterans, the VA
    Office of Public Health included the questions to identify PTSD
    but not Gulf War illness.
        In a medical journal, the heads of the three VA war related
    illness and injury study centers wrote that the illness quote,
    has been documented after armed conflicts since the Civil War,
    and that a bio psycho-social approach will best benefit the
    patient. The list goes on.
        VA's talking points say that it does not support the notion
    that some have put forward that these health symptoms arise as
    a result of PTSD or other mental health issues. But the some
    who are putting these notions forward are VA staff.
        These actions threaten to mislead science down blind allees
    once again, just as has happened for most of the last 23 years.
        Our committee has been charged since its inception with
    assessing the effectiveness of government research. We
    complimented early progress under Secretary Shinseki. But when
    staff launched this campaign, we reported it, and asked the
    Secretary to investigate and remove those responsible from Gulf
    War research responsibilities.
        Instead, VA removed us. In May of last year, I was notified
    that the committee's charter had been changed to eliminate its
    charge to assess the effectiveness of government research, and
    that the membership of the committee would be replaced over the
    next year.
        Fresh blood is certainly desirable, but two of the three
    scientists subsequently proposed for membership by VA were
    stress advocates. One has edited a textbook on stress, and is a
    member of the American Psychosomatic Society. VA has sought to
    backtrack, pulling these names, and appointing others, but they
    have shown where they intend to go, once they are no longer
    under scrutiny.
        VA has attempted to explain the charter changes as
    necessary to comply with the Federal Advisory Committee Act, or
    that the Committee's work is an inappropriate oversight. But
    virtually identical language has been part of five charters
    signed by four secretaries, including Secretary Shinseki.
        All recognized, that an inherent part of advising on future
    research is to assess the effectiveness of the research already
    being done.
        The clear purpose of the charter change was to stop our
    committee from reporting on staff efforts to mislead research,
    and that is exactly the effect that it's having. Attached to my
    testimony is the draft section on VA's research program which
    had to be removed from the report our committee will release
    next month.
        In addition, VA has recently stated that committee members
    may not release reports without written VA approval.
        H.R. 4261 gives back to the Research Advisory Committee the
    responsibilities and independence VA has taken away. Ms.
    Zumatto has already summarized the terms, so I will proceed to
    state that this bill is vital to maintain the hope that
    progress toward effective treatments will continue. But
    restoring the committee only gets us back to where we were:
    Advancing science in one area, while the staff pulls it back
    somewhere else. That is what has happened for most of the last
    23 years. If the IOM is correct, and I believe it is, that
    effective treatments can likely be found with the right
    research, then Gulf War veterans would likely have effective
    treatments today but for this staff obstruction.
        Unless staff obstruction is removed once and for all,
    science candidly may never reach this goal. VA leadership has
    decided to shoot the messenger instead. I urge Congress to go
    beyond this bill and pursue a rigorous investigation necessary
    to end this shameful history and clear the way ahead.

        [The prepared statement of James H. Binns appears in the
    Appendix]

        Mr. Coffman. Well, thank you so much for your testimony. I
    have just got to say, as a Gulf War veteran I want to thank you
    both, Ms. Zumatto and Mr. Binns, for your attention on this
    issue. I just think it is so disgraceful how our Gulf War
    veterans have been treated on this issue.
        Mr. Davy Leghorn, Assistant Director of the Veterans
    Employment and Education Division of the American Legion.

                       STATEMENT OF DAVY LEGHORN

        Mr. Leghorn. Chairman Coffman, Ranking Member Kirkpatrick
    and distinguished members of the subcommittee. On behalf of our
    national commander, Dan Dellinger, and the 2.4 million members
    of the American Legion, thank you for the opportunity to submit
    the views of the American Legion regarding the bill to improve
    the oversight of contracts awarded by the Secretary of
    Department of Veteran Affairs to veteran owned small
    businesses.
        Many of our veteran small business owners are at a
    disadvantage when they have to compete with companies that
    don't actually complete more than 50 percent of the required
    work of contracts that are specifically set aside for service
    disabled veteran owned small businesses.
        The purpose of a veteran's set aside contract is to bolster
    the capacity of the veterans small business industrial base,
    and likewise, for contracts designed for service disabled
    veteran owned small businesses.
        When the majority of this money ends up going to non-
    qualifying businesses by way of a pass-through company, the
    good intentions of public law, 109-461 become meaningless. This
    is why the American Legion passed Resolution 73 which endorses
    legislative efforts to ensure that contracts awarded pursuant
    to the veterans first program are awarded to companies that
    truly are entitled to receive these set asides.
        The American Legion advocated for Public Law 106-50, which
    made all federal agencies stakeholders in supporting veterans
    entrepreneurship. The American Legion also supported public law
    109-461, which provided VA with the authority to set higher
    agency standards for SDVOSB and VOSB set asides.
        VA refers to this program as the Veteran's first
    contracting program or Vet First. The American Legion has
    vested interests in and is very protective of the programs we
    help institute within the federal government. This is why we
    support legislation that would increase problematic oversight
    and increased penalties for bad actors who maliciously seek to
    defraud the federal government.
        Regarding a certification of good faith to the Secretary,
    the American Legion believes that this is a solid step in
    ensuring our veterans fully understand the rules when bidding
    on and accepting prime responsibility for federal contracts,
    and also, understand what the penalties are for making false
    claims and statements.
        However, fraud and abuse is neither rampant nor exclusive
    to the veterans small business community alone. Other
    disadvantaged small business programs have come under scrutiny
    in the past, yet they are not held to an extra administrative
    hurdle.
        The American Legion is concerned with the message this
    administrative step sends to the small business community and
    the public as a whole, and with support, similar scrutiny and
    administrative safeguards across the federal procurement
    landscape.
        The American Legion understands the intent of this
    certification, and we caution this committee to ensure that we
    are not singling out the veterans small business community as
    the only program that might meet safeguards.
        This extra administrative step would be easier for the
    veterans small business community to accept wholeheartedly if
    it were instituted among all over disadvantaged small business
    set aside programs as well.
        Again, the American Legion supports this bill but ideally
    we would prefer to see the same standard being applied, not
    only with 38 CFR, but extended to 13 CFR as well.
        Lastly, regarding the bill's congressional reporting
    mechanism, the American Legion agrees that an independent
    entity such as VA's Office of Inspector General or the Small
    Business Administration should conduct a report on VA's OSDBU's
    oversight. OSDBU's main role is small business advocacy within
    the agency. The report in the acquisitions issue that falls
    outside of OSDBU's purview, so the American Legion would go as
    far as to recommend that aside from minor aggregate reporting,
    OSDBU be completely removed from the referral and reporting
    process and ensuring that the report submitted to Congress is
    unbiased.
        In conclusion, the American Legion believes that the
    responsibility is upon all the stakeholders to ensure that we
    become better stewards of the veterans first program. The
    American Legion will continue to work with the Small Business
    Administration and the Department of Veteran Affairs to
    increase contracting opportunities for our veteran small
    business owners, and to ensure that the money allotted for
    these set aside contracts stay within our community.
        The American Legion appreciates the opportunity to testify
    today. Again, thank you, Chairman Coffman

        [The prepared statement of Davy Leghorn appears in the
    Appendix]

        Mr. Coffman. Thank you, Mr. Leghorn. Mr. Frank Wilton,
    Chief Executive Officer of the American Association of Tissue
    Banks.

                       STATEMENT OF FRANK WILTON

        Mr. Wilton, Chairman Coffman.
        This critical legislation directs the Secretary of Veteran
    Affairs to adopt a standard identification protocol for use in
    the procurement of biological implants, by building upon the
    unique device identifier or UDI, this legislation will ensure
    that biological implants can be appropriately tracked from the
    donor of the human tissue all the way to the recipient.
        This critical capability for track and trace efforts will
    enhance patient safety, expedite product recalls, and assist
    with inventory management.
        This legislation takes a bold step to expand the
    application of the concept of the UDI to all tissue products,
    including those tissue devices which are already covered by the
    UDI, as well as another product category--certain biological
    implants, or as termed by the Food & Drug Administration, 361
    HCTPs.
        While many of the biological implants do have bar codes, by
    requiring a standardized format as outlined in this
    legislation, it is easier for the Department of Veteran
    Affairs' medical facilities to utilize universal bar coding
    conventions.
        As the Secretary of Veteran Affairs opts to adopt the
    standard identification protocols for tissues, both devices and
    non-devices, I urge you to ensure the Secretary to provide a
    menu of options.
        Under the UDI final rule, FDA has done just that, by
    providing for multiple entities called issuing agencies. At
    this time, FDA has provided for three different issuing
    agencies: GS1, Health Industry Business Communications Counsel
    or HIPBCC, and ICCBBA. I hope that this flexibility is
    maintained within the Department of Veteran Affairs.
        However, given that the bill language already suggests that
    the unique identification system is comparable to the UDI
    provides, we believe the intent to provide that flexibility is
    inherent in the legislation.
        For those of you unfamiliar with my organization, the
    American Association of Tissue Banks is a professional, non-
    profit scientific and educational organization. The association
    was founded in 1976 by a group of doctors and scientists who
    had started in 1949, our nation's first tissue bank, the United
    States Navy Tissue Bank.
        It is the only national tissue banking organization in the
    United States, and its membership totals more than 125
    accredited tissue banks and 850 individual members.
        These banks recover tissue for more than 30,000 donors and
    distribute in excess of 2 million allographs for more than 1
    million tissue transplant performed annually in the United
    States.
        The vast majority of tissue banks that process tissue
    maintain AATB accreditation. First published in 1994 and
    presently in its thirteenth edition, the AATB standards for
    tissue banking are recognized as the definitive guide for
    tissue banking. The AATB standards have served as the model for
    federal and state regulations, as well as several international
    directives and standards.
        Currently, the statutes are regulations in 19 states,
    reference AATB standards, institutional accreditation or
    individual certification.
        Given the wide acceptance of AATB's standards, I would be
    remiss if I didn't mention one aspect of the legislation which
    is disappointing. The current legislation lacks a requirement
    that biological implants purchased by the VHA be procured from
    accredited tissue banks and accredited tissue distribution
    intermediaries.
        While I understand that there may be some concern about
    imposing such a requirement because AATB is a private entity, I
    would just note that there are other instances in which the VHA
    has decided that private accreditation is not only appropriate,
    but required.
        Specifically, the VHA requires medical facilities to
    receive and retain accreditation by the Joint Commission, a
    private accrediting agency. Leading medical centers of
    excellence require AATB accreditation of vendors from whom they
    procure tissue graphs.
        In addition, the American Academy of Orthopaedic Surgeons
    recommends the use of tissue from banks that are accredited by
    AATB. By not requiring that vendors adhere to the highest
    safety standards required by the AATB's accreditation process,
    I remain concerned about the overall safety and quality of the
    products provided to our veterans.
        I welcome your questions and yield the remainder of my
    time.

        [The prepared statement of Frank Wilton appears in the
    Appendix]

        Mr. Coffman. Thank you for your testimony. Mr. Kelley, what
    do you believe explains the lengthy delays and overruns in
    major--in VA major construction projects?
        Mr. Kelley. Unfortunately, I think sometimes politics gets
    in the way within VA, within the community, within Congress.
    There is--everybody's got their vision of what it should be,
    and the ball starts rolling, those visions change along the way
    to meet the needs of the politics, not necessarily the
    veterans. And then as that works out, the needs of the veterans
    are taken into account.
        Mr. Coffman. Mr. Binns, please briefly describe how VA has
    interfered, undermined or impeded the work of the RAC.
        Mr. Binns. Well, VA has removed our charters charge to
    review the effectiveness of government research. That means
    that you, the Secretary of Veterans Affairs and the public will
    not know what an independent body of scientists and veterans
    considers is happening within VA research.
        And as you will see from reviewing the draft which had to
    be removed from our report, which I have attached to our
    written testimony, that is a serious indictment indeed.
        The latest action that has been taken is that each
    committee member, in the letter inviting them to attend the
    next meeting, which we were asked to sign, acknowledges that we
    will not share any information, reports, recommendations
    produced at the meeting without the written approval of VA.
    Even the pretense that the committee is independent has been
    removed.
        So you will not ever hear from a RAC chairman in the
    future, I can assure you, who has not had each and every word
    of his testimony vetted and written for him or her.
        Mr. Coffman. Ms. Zumatto, what does autonomy for the RAC
    accomplish for Gulf War vets?
        Ms. Zumatto. Well, I think that certainly the more people
    we have involved in this process and the more--I do not know if
    I want to say competition, but it should not--this is not
    something that should be handled by one organization or one
    agency.
        And so having the RAC and having them being able to provide
    an individual opinion on what the--what is happening in the VA
    I think is only a positive thing. I think our veterans are
    going to benefit by having that, having another set of eyes on
    what is happening.
        Mr. Coffman. Very well. Mr. Kelley, your testimony mentions
    cost overruns and adversarial relationships between VA and
    contractors. There is evidence that such problems occurred in
    Denver, or in Aurora, and possibly other sites where VA asked
    for bids based on the presumption that it would produce in a
    situation of Aurora, a $600 million project, but it appears VA
    has produced a project potentially much more expensive than
    that in terms of its design, which they provided eight months
    after the bid process was completed.
        What should VA do to maintain control of construction
    designs in the future?
        Mr. Kelley. I think going to the design build model will
    help. It puts the contractor in the process early on so you do
    not get an architect who has got a grand design of a beautiful
    building that might not be practical, and then when the build
    starts, the contractor has to come in and say, this space is
    not going to be right, and there is a conflict between the
    contractor and the architect, which also conflicts with what VA
    had asked for to begin with, and what the outcome is going to
    be.
        So I think putting those two together at the very beginning
    of the process, so the architect and the contractor are on the
    same page, that the outcome will be cheaper. Because you are
    not running into cost overruns when you bid on a design, and
    then you realize, well, what we need in here is not going to
    fit in the design that we have and we have to go back and fix
    this. Now we have got change orders, we have got design redos
    that increase time and increase costs.
        Mr. Coffman. Thank you, Mr. Kelley. Ranking Member
    Kirkpatrick?
        Ms. Kirkpatrick. Thank you, Mr. Chairman. I join the
    Chairman in thanking you, Ms. Zumatto and Mr. Binns for your
    attention and your work on behalf of the Gulf War veterans and
    keeping the attention focused on the illness.
        You have been a great resource to my office, Mr. Binns, and
    I do not really have any questions, but I just wanted to thank
    you for being here today and for the work that you are doing.
        I want to ask a question about the tissue bar coding, Mr.
    Wilton. One of the things that we are working on is to keep the
    same formulary in the Department of Defense as we have in the
    VA, and we are finding that that is a little more difficult
    than we thought it might be.
        So can you tell me if the Department of Defense uses the
    bar code that you are proposing for the VA?
        Mr. Wilton. I think one of the benefits of this will be
    that, as it becomes universal, it will be used in all of the
    health care settings, so not only DoD but VA, but also in other
    health care settings. So I do not believe they currently do,
    but we would certainly support the use of it in other settings.
        Ms. Kirkpatrick. Okay. And that is something that we are
    able to be successful with this legislation that I would like
    to work with you on because we are having joint meetings
    between the top positions at the VA with the top positions at
    the Department of Defense, ultimately with the goal that we
    will be able to have one good medical record transitioning out
    of the military into the VA system. So thank you for that.
        Mr. Wilton. We would welcome the opportunity to work with
    your office on that.
        Ms. Kirkpatrick. Thank you. Mr. Leghorn, I recently visited
    some military bases and, my role was really to talk to military
    members who are soon transitioning into the VA, and what we
    could put in place for them while they are still in service to
    make that transition easier.
        And the number one issue was jobs. They said, you know,
    they were really concerned about where they would find work,
    how they would find work. So I appreciate your emphasis on
    hiring vets, but in recent meetings with some of our veterans
    groups, there is certainly a feeling, and I have not looked
    into this in terms of, you know, really investigating, but
    there is a feeling that all of these programs are great, but
    there is no enforcement, that people are--businesses are really
    overlooking the programs. There's no teeth in this legislation
    to make sure that veterans are indeed being given preference.
        Has the American Legion done any studies, any research into
    that?
        Mr. Leghorn. Not that I know of, no.
        Ms. Kirkpatrick. Okay. Is it something that you are hearing
    that you would agree maybe needs to be done?
        Mr. Leghorn. Absolutely.
        Ms. Kirkpatrick. All right. And let me ask you too, then
    you are proposing safeguards. Do you think internal safeguards
    are better than some kind of external oversight in terms of
    enforcement?
        Mr. Leghorn. In terms of the safeguards that were mentioned
    in the bill, we feel to a certain extent, it is necessary. We
    are just concerned about the messaging that it sends to the
    community, because it is--we are enforcing this safeguard only
    on the veterans small business community and we are not
    applying it to everyone else.
        Ms. Kirkpatrick. And the singling, I understand that, that
    the small business veterans community is being singled out.
        Mr. Leghorn. Yes.
        Ms. Kirkpatrick. And I am concerned about that. I just was
    trying to bring it into a larger context, but thank you for
    your testimony.
        My last question is for you, Mr. Wilshusen. In your written
    testimony, you state that emphasizing that specific security
    related actions should be taken based on risk could help ensure
    that VA is better able to meet the objectives outlined in the
    draft bill.
        Would including a risk assessment make the specific actions
    addressed in the bill discretionary rather than mandatory on
    the VA?
        Mr. Wilshusen. It would make it based upon the risk because
    one of the factors that should go into risk management and
    security controls is the fact that every single control may not
    be appropriate in every single circumstance. And that according
    to FISMA, which is the overarching law for information
    security, agencies are supposed to perform risk assessments,
    and then design and implement security controls based on the
    effect or on the results of those assessments to assure that
    they are able to cause effectively reduce risks to an
    acceptable level.
        Now, there is judgment involved with those risk assessment
    and which controls should be in place. But federal guidelines
    specify that there are a number of security controls that
    should be considered depending upon the significance or the
    categorization of the system which relates to the impact that
    could occur, should the information be compromised.
        But it does allow for some leeway because--in terms of
    determining when a control should be implemented and maybe not.
    You know, I think what the--many of the specific controls that
    are identified in the draft bill are based on sound security
    practices and are consistent with federal guidelines.
        But as I mentioned, building it in and to allowing and
    assuring that those controls are implemented on risk, and are
    intended to meet the security objectives with and allow some
    flexibility for those controls and security practice to evolve
    naturally over time as conditions change.
        Because a specific control that may be appropriate in one
    circumstance, that same control may not be appropriate in
    another circumstances due to the change in conditions.
        Ms. Kirkpatrick. You know, it makes commonsense to me that
    the recent flexibility that, you know, Mr. Chairman, I have
    some concern about there not being some benchmarks to make sure
    it happens in a timely manner. Thank you very much, I've gone
    over a little bit, thank you for your indulgence.
        Mr. Coffman. Dr. Roe.
        Dr. Roe. Thank you, Mr. Chairman, just a couple of comments
    and a couple of quick questions.
        Mr. Wilton, if you would on the tissue banking, I agreed
    with--much what you said. Is there any reason for the VA not to
    do what is outlined in the draft?
        Mr. Wilton. I cannot come up with one, Congressman. I think
    it makes good sense, and I think that who better to make sure
    that we are protecting than the men and women who served this
    country so nobly. So I can come up with none.
        Dr. Roe. I agree with you, and I think one of the things
    that will happen ultimately, it will be unintended on anybody's
    part, but we have seen where something happens and then there
    is a delay on notification of the veterans about this
    particular issue, and I have used these products before and
    there are tracking systems out there in the private world.
        Secondly, just briefly, are there any other accreditation
    other than what you mentioned, and I think one of the reasons
    it was left out in the draft legislation and maybe it should be
    put in, is are there other agencies that accredit not just that
    one? You said it is a private agency as I understand it, that
    does that accreditation.
        Mr. Wilton. Within the tissue banking profession, we are
    the only one. And quite frankly, considered the gold standard
    within health care. Most leading centers of medical excellence,
    as I mentioned in my testimony, will only source tissue from
    AATB-accredited banks. So we think again, why would the VA not
    want to get the best.
        Dr. Roe. Okay. Thank you and Mr. Binns, and also, Ms.
    Zumatto, just a couple of comments.
        One of my pet peeves in the practice of medicine over the
    years was, if we did not know what it was wrong with you, it
    was either in your head or was a virus, and we did not know. So
    I think that basically what we need to do is exactly what you
    have said, and I think VA somewhat has done that, but to take
    the RAC, to get the Institute of Medicine to study this like
    you would any other issue and then come to a conclusion,
    whatever it is, and whatever the conclusion is.
        I could not agree more with that and to put this to bed,
    and as I want to thank our Chairman for his service at Desert
    Shield and Desert Storm, and there are many veterans out there
    that just would like to have an answer to this, an objective
    answer in an unbiased setting, so just a comment there.
        And, Mr. Kelley, just a couple of things. One, I agree and
    I think the VA did a great job of describing the design build
    and design bid build. Sometimes what you do if you have a
    design build process is you eliminate a lot of smaller builders
    who do not have an architect in house. Most of the design
    builders are big firms that have an in-house architect, and I
    can think of many instances in my area where very, very good
    builders could not bid on a design bid because they just did
    not--they are not big enough.
        And there are situations where it is--I mean, I have seen
    it in literally hundreds of millions of dollars worth of
    construction and the design bid build that works fine. And I
    just want to make that point that that is not the only point to
    do that, and the VA I think described that extremely well.
        And I guess my last question is to Mr. Wilshusen, what
    should the VA be doing now that they are not doing? I listened
    very carefully to your testimony and read it, but what--if they
    were doing something now, what would you say they need to
    implement right now for security?
        Mr. Wilshusen. I think it would be to redouble their
    efforts in resolving and mitigating and taking corrective
    actions on known vulnerabilities. They have a large number of
    outstanding security vulnerabilities that have been existing
    for quite some time.
        So taking actions right now to assess the risk of those,
    identify the most critical ones, and act on that and take
    corrective action immediately would be something that they
    should do.
        Dr. Roe. Yeah, I think we have noticed--I mean, we know
    that literally there are people trying to hack into these
    systems, foreign governments, I mean, we had that testimony
    right here in this committee, this subcommittee about that, and
    it is a moving target. I understand how--well, maybe I do not
    even understand how hard it is it is so complicated.
        But I guess the question I would have if they could
    implement anything now that would be effective, what should
    they do, because it is at every phase of government has it,
    private businesses have it, medical records, everything that we
    do on line is now being--I mean, really is vulnerable.
        Mr. Wilshusen. Well, it certainly is because what the--with
    the extensive use of information technologies across the
    federal governments, VA and other agencies too, if there is
    inherent risk with the use of those technologies, particularly
    as it becomes more interconnected with other systems, other
    organizations, external and internal to each department.
        But the one thing that--you know, there is a number of
    things that agencies and VA needs to do, and one of the first
    things in terms if shoring up and making sure, for example,
    that they take corrective actions to assure that the systems
    that they operate have the appropriate patches installed, that
    they implement the appropriate security controls that harden to
    prevent and limit access to their systems.
        But again, it gets back on----
        Dr. Roe. Well, do they need legislation to do that or could
    they just do that now?
        Mr. Wilshusen. They should be doing it now, but apparently
    in the VA's case, they may need this legislation, the proposed
    bill, may help prompt them to refocus their efforts to take the
    necessary actions to protect their systems.
        Dr. Roe. Thank you. I yield back.
        Mr. Coffman. Thank you, Dr. Roe. Ms. Walorski.
        Ms. Walorski. Thank you, Mr. Chairman.
        Mr. Wilshusen, will the--with all the weaknesses that you
    have cited in the conversation that you and Dr. Roe just had,
    has the VA made any improvements to its information security
    program?
        Mr. Wilshusen. Well, according to the OIG at VA, the
    Department has taken steps to implement a continuous monitoring
    program, as well as to standardize many or several of their
    security configurations.
        And if those are designed and implemented effectively, that
    could result in some security benefits. But as you may know, we
    have been asked by this subcommittee to review the weaknesses
    and vulnerabilities of the Department of VA for--on their
    information security.
        We plan on looking at the extent to which those
    vulnerabilities continue to exist, the extent to which VA has
    taken actions to mitigate them, and the extent to which those
    vulnerabilities help expose veterans' information and to
    compromise.
        And so I will have more on that issue for you later as we
    complete that particular review. It is--we are just starting it
    at this point.
        Ms. Walorski. So this is your first review of their
    internal security documents?
        Mr. Wilshusen. Not the first--at the present time, yes.
        Ms. Walorski. Uh-huh.
        Mr. Wilshusen. Yes, we--for years, we have reviewed
    information security at the time.
        Ms. Walorski. Right.
        Mr. Wilshusen. But for this particular effort and these
    vulnerabilities, yes, we are just starting that this year.
        Ms. Walorski. And given the current federal information and
    security requirements and VA's known material weaknesses, do
    you believe that this IT directive can assist VA in addressing
    those weaknesses if implemented?
        Mr. Wilshusen. Yes. You know, I think these actions
    identified in the directive are intended to address known
    vulnerabilities that exist in VA now. And so to the extent that
    they take those actions again on a risk based basis, that it
    should help VA improve its security.
        Ms. Walorski. And well just to echo Dr. Roe's comment and
    your comment as well, is legislation needed. I honestly having
    sat on this committee think that it is a directive that has to
    be implemented at this point because there is no voluntary
    compliance.
        So the mere suggestion from Congress asking and asking and
    asking, and then having your department follow up and the
    reports continually come back with vulnerabilities,
    vulnerabilities, vulnerabilities, you know, I mean, it is just
    my opinion our veterans deserve more.
        There are so many people that come in here and testify on
    so many different issues, and I appreciate all of your
    testimony today, but when it comes to protecting identities and
    health care records, and you know, there isn't a day that goes
    by in the local news and national news where we are not talking
    about protecting the most important data that we all have,
    which is our identity, and now in this case, health records,
    and now we are talking domain controllers and we are asking
    questions about foreign entities having access.
        I just--to me, I just think there is an urgency involved,
    so I appreciate the work that you do and all of you in your
    testimony today. Thank you, Mr. Chairman, I yield back.
        Mr. Coffman. Thank you, Ms. Walorski, Mr. Huelskamp.
        Dr. Huelskamp. Thank you, Mr. Chairman. Mr. Leghorn, I
    appreciate your testimony. I appreciate the executive committee
    on their resolution that endorsed efforts such as these to make
    certain that the contracts are awarded to companies that are
    truly entitled to receive these set asides. I think that is
    very critical. I appreciate your efforts on that, and my office
    is more than willing to--if you hear of examples and cases that
    perhaps the VA has not acted on quickly enough, let us know,
    and we would be happy to look into those as well.
        Because I think if we are going to have a program such as
    this, we can do everything we can to make certain that it goes
    to veterans. I appreciate that.
        I do have one small question for the gentleman from the GAO
    in reference to apparently twelve years of reports and studies
    and I congratulate my colleague for introducing the bill, but I
    will say the testimony we heard in this subcommittee about how
    vulnerable the system was and is has probably been the most
    shocking I have heard on this committee in over three years.
    And I appreciate the efforts and I know my colleague asked the
    question, do you think they are making progress, and it is not
    nearly enough.
        But do you have any evidence or ability to share that will
    give us an example of if we compared this to a private sector
    entity, what standard we're meeting out in the world outside of
    government, in terms of meeting those security requirements?
        Because I vow to my colleagues that I always want to talk
    about these private companies, and rightly so that are not
    secure enough with data, and then we have the shocking reports
    of 20 million veterans and their families and their medical
    records, financial records were hacked. The VA refused to--
    actually said it did not occur, and a whistle blower said
    otherwise.
        But is there a standard we can look at, and say here we are
    compared to the private sector?
        Mr. Wilshusen. Well, in terms of the information security
    requirements that federal agencies are to implement, they tend
    to be as stringent as those perhaps available to the private
    sector.
        You know, one can look at the news media and we have not
    examined the security controls at very many private sector
    companies. When we have, we have identified vulnerabilities
    that also puts those entities' information at risk. But you can
    look at the papers and just with Target and a number of other
    companies, there are security breaches across the board.
        Many are reported, many are not. It is just emblematic I
    think of the fact that--and it is required, that agencies,
    private companies need to protect the information. It is a
    challenging proposition. There are many things that can be done
    to help raise the bar in protecting that information. Many of
    the actions identified in the draft bill are among those types
    of controls if implemented on a risk based basis.
        And--but it is something that is a fact of life in our
    environment, and it is in large part because agencies--I will
    not say agencies have not taken it seriously, but you are
    right, there is much more that needs to be done in order to
    adequately protect the information that those individuals who
    provide their sensitive personal information to agencies
    entrust and deserve.
        Dr. Huelskamp. All right. I yield back. Thank you, Mr.
    Chairman.
        Mr. Coffman. Thank you, Mr. Huelskamp. Thank you. The panel
    is now excused. I again want to thank everyone for their
    participation today. The input and feedback provided is an
    important contribution at this subcommittee--as this
    subcommittee crafts legislation to improve the quality of
    service VA provides to our nation's veterans.
        With that, I ask unanimous consent, that all members have
    five legislative days to revise and extend their remarks, and
    include extraneous materials. With no objection so ordered,
    this hearing is now adjourned.
        [Whereupon, at 11:45 p.m., the subcommittee was adjourned.]
                                    APPENDIX

                   Prepared Statement of Ms. Stella S. Fiotes

        Good morning, Mr. Chairman, Ranking Member Kirkpatrick, and other
    Members of the Subcommittee. Thank you for the opportunity to be here
    today to provide the Department of Veterans Affairs (VA) views on
    pending legislation affecting VA's programs, including H.R. 3593, the
    VA Construction Assistance Act of 2013 and a draft bill regarding the
    oversight of contracts awarded by VA to small business concerns owned
    and controlled by Veterans with service-connected disabilities.
        Other bills on today's agenda were not received in time for VA to
    provide testimony here today, but we will be following up with the
    Subcommittee for the record at a later time. Those bills include H.R.
    4261, regarding VA research on Gulf War illness and a draft bill
    regarding VA's information security programs
        Mr. Chairman, accompanying me here today is Mr. Tom Leney,
    Executive Director for Small and Veteran Business Programs for VA.

    H.R. 3593, the VA Construction Assistance Act of 2013

        Section three of the bill would institute certain requirements for
    VA major medical facility projects, including mandates for the use of a
    medical equipment planner, use of a project management plan, and use of
    a construction peer excellence review. It would also require
    development of a metrics program to enable the monitoring of change-
    order processing time and goals for the change order process consistent
    with the `best practices' of other federal agencies.
        Section four of the bill would mandate that within 180 days VA
    enter into an agreement with the U.S. Army Corps of Engineers (USACE)
    to procure a ``special project manager'' on a reimbursable basis to
    oversee three named current VA major construction projects for
    facilities in Denver, Colorado, Orlando, Florida, and New Orleans,
    Louisiana. The bill enumerates the duties of the special project
    manager and requires that plans and progress reports be provided to the
    House and Senate Committees on Veterans' Affairs. It also establishes
    that VA provide the special project manager with the requisite
    information and administrative assistance necessary to carry out their
    tasks.
        VA has a strong history of delivering facilities to serve Veterans.
    In the past 5 years, VA has delivered 75 major construction projects
    valued at over $3 billion that include the new medical center complex
    in Las Vegas, cemeteries, polytrauma rehabilitation centers, spinal
    cord injury centers, a blind rehabilitation center, and community
    living centers.
        VA appreciates the strong interest and support from the
    Subcommittee to ensure that our major construction projects, and more
    specifically the Denver, Colorado, New Orleans, Louisiana, and Orlando,
    Florida facilities, are delivered successfully. While there have been
    challenges with these projects, we have taken numerous actions to
    strengthen and improve our execution of all VA's ongoing major
    construction projects, including the three projects that H.R. 3593
    addresses. For the reasons expressed below, VA does not believe that
    the approach outlined in the bill will achieve the desired results, and
    thus does not support it.
        VA believes the creation of a special project manager would be
    problematic in the management and supervision of these projects.
    Specifically, the special project manager adds more levels of
    management and may complicate, if not confuse, the project delivery
    process. The bill raises serious questions about the contractual
    relationship between the VA and its contractor, the lines of authority
    the special project manager will have vis-`-vis VA and the U.S. Army
    Corps of Engineers (USACE), and the effect upon the independent
    exercise of discretion by the VA contracting officer, who is ultimately
    responsible for managing the contract on behalf of the Government. The
    legislation we believe will also lead to increased management and
    overhead costs associated with funding the special project manager and
    support team.
        VA continuously evaluates its processes and delivery methods for
    each lease and construction project on its merits, and we benchmark
    industry best practices with several agencies including the National
    Institute of Building Sciences, General Services Administration and the
    USACE. When VA determines that the best delivery strategy is to employ
    another agency such as the USACE, this strategy is used. VA and the
    USACE have a long history of working together to advance VA facility
    construction and share best practices, and our current discussions are
    a logical evolution of that relationship.
        Since 2008, VA has engaged USACE to support maintenance and minor
    construction projects at more than 70 of our medical facilities. VA
    engaged USACE to review the contracts for the New Orleans and Denver
    projects, and they continue to assist in schedule evaluation in
    Orlando. More recently, USACE is supporting VA in establishing a
    Project Review Board process, similar to the process used by USACE
    districts, and supporting the VA National Cemetery Administration in
    its maintenance and minor construction program.
        As outlined in the cited Government Accountability Office (GAO)
    testimony and April 2013 report, the delays and cost increases on the
    Denver, New Orleans and Orlando projects occurred in the planning and
    design phases; each of these projects is now in the construction phase.
    Last year, VA took aggressive action on the recommendations in the
    April 2013 GAO report and all recommendations were closed as of
    September 2013. Their recommendations included the addition of medical
    planners, the streamlining of the change order process, and clearer
    definition of roles and responsibilities in the project management.
        In addition to closing the GAO recommendations, VA has worked
    diligently to address and close all of the recommendations identified
    through the VA's Construction Review Council (CRC), which was
    established in 2012 and is chaired by the Secretary of Veterans Affairs
    to serve as the single point of oversight and performance
    accountability for the VA real property capital asset program. With the
    personal commitment of the Secretary, and the diligent efforts of
    senior staff and management, all CRC recommendations have been
    implemented since October 2013. These recommendations include
    improvements in the development of requirements, measures aimed at
    improving design quality, better coordination of funding across the
    Department to support VA's major construction program, and advances in
    program management and automation. Through the CRC and the VA
    Acquisition Program Management Framework that provides for continual
    project review throughout the project's acquisition life-cycle, VA will
    continue to drive improvements in the management of VA's real property
    capital programs.
        Our focus across the spectrum of construction project management
    has led to advancements in our overall construction program. Areas of
    increased effort include improving requirements definition and
    acquisition strategies, assessing project risk, assuring timely project
    and contract administration, partnering with our construction and
    design contractors, early involvement of the medical equipment planning
    and procurement teams, and engaging in executive level on-site project
    reviews. Additionally, the monthly updates provided to the Committees
    on key projects have increased the transparency in our program.
        The way the Department is doing business today has changed
    significantly since the Orlando, Denver and New Orleans projects were
    undertaken. The lessons learned and the improvements made have resulted
    in positive changes and are being applied to help ensure the
    Department's capital program is delivered on time and within budget.
        The costs associated with enactment of this legislation cannot be
    predicted with specificity, as they will depend on the scope and
    details of the arrangement mandated to be concluded with the USACE
    under the bill.

    Draft Bill to Amend Title 38, United States Code, to Improve the
    Oversight of Contracts Awarded by the Secretary of the Department of
    Veterans Affairs to Small Business Concerns Owned and Controlled by
    Veterans With Service-Connected Disabilities

        Section one of the draft bill proposes to amend subsection (e) of
    Sec.  8127 to create a second requirement to eligibility for status as
    a Service-disabled Veteran-owned Small Business (SDVOSB). The newly
    inserted subsection (2) would provide that SDVOSBs may only be awarded
    set-aside contracts when, in addition to the requirements of
    verification, the SDVOSB submits a statement to VA explaining how the
    concern would meet applicable self-performance requirements to conduct
    51 percent of work themselves, identifying employees who will be
    working on the contract and the work the employees will carry out under
    the contract, and the percentage of such work as compared to the total
    amount of work performed under the contract.
        The bill would also amend subsection (g) of section 8127 regarding
    penalties by granting the Secretary authority to make a determination
    that a SDVOSB did not act in good faith with respect to the performance
    requirements of the contract regarding the requirement to have their
    own employees perform at least 51 percent of the work requirements. If
    that determination is made, the Secretary would retain amounts awarded
    under the contact in the same manner and amount as if the small
    business concern failed to comply with approved subcontracting plans,
    which appears to be a reference to provisions concerning liquidated
    damages for failure to make a good faith effort to comply with a
    subcontracting plan, found at 15 U.S.C. Sec.  637(d)(4)(F) and 48 CFR
    Sec.  19.705-7. Lastly, the new statement required by the bill would be
    subject to the criminal false statements statute, 18 U.S.C. Sec.  1001.
        VA shares the Committee's concerns that Veterans perform the
    required percentages of work on set aside contracts. To that end VA
    contracting officers monitor the amount of work passed to
    subcontractors in accordance with the Federal Acquisition Regulations.
    In addition, VA has established a Subcontracting Compliance Review
    Program (SCRP) which assesses contractor compliance with limitations on
    subcontracting requirements, subcontracting commitments, and
    subcontracting goals included in prime contracts with VA.
        We appreciate the Committee's interest in the integrity of these
    important programs, but for the reasons set forth below, VA does not
    support the draft bill.
        The requirements of this bill would be impractical, as many
    awardees will not have all the required information (such as names and
    amount of work to be performed) at the time of bid or offer, or even at
    the time of award.
        We are also unclear whether the bill as drafted would only apply to
    SDVOSBs, as 38 U.S.C. Sec.  8127 authorizes Veteran-owned Small
    Business set-asides within VA as well as SDVOSB set-asides.
        Finally, VA believes that the provisions of this bill will place an
    onerous and unfair burden on SDVOSBs that is not placed on any other
    socioeconomic category of small business.
        VA will provide its cost estimate for this bill for the record.

    Conclusion

        Mr. Chairman, this concludes my statement. Thank you for the
    opportunity to appear before you today. We would be pleased to respond
    to questions you or the other Members of the Subcommittee may have.
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                    Prepared Statement of Raymond C. Kelley

        Mr. Chairman and Members of the Subcommittee:
        On behalf of the men and women of the Veterans of Foreign Wars of
    the United States (VFW) and our Auxiliaries, I would like to thank you
    for the opportunity to testify on today's pending legislation.

    H.R. 3593, VA Construction Assistance Act of 2013

        It is well documented that the Department of Veterans Affairs (VA)
    struggles to complete major medical facility construction projects on
    time and on budget. Currently, VA has an average project delivery delay
    of 35 months and average cost overruns of more than $300 million.
        VA is in the process of building three medical centers, each of
    which has been met with their own unique problems that have frustrated
    veterans who live in the communities and rely on the medical service of
    the VA, and have caused VA to lose time and money that could have been
    used on other projects. VA has a list of major construction projects
    that will cost more than $20 billion. Every effort must be made to
    ensure every dollar is used efficiently, so VA can close these major
    construction gaps. H.R. 3593 puts recommendations in place that will
    help VA achieve these goals.

        Section 3 of this bill calls for five specific reforms in VA's
    Major Medical Facility Construction process. These reforms call on the
    Secretary to:
             Use medical equipment planners from the onset of a
            major medical facility construction project.
             Develop and use a project management plan to improve
            communication among all parties involved.
             Put construction projects under peer excellence
            review.
             Develop a metric to monitor change-order processing
            times and ensure the process meets other federal department and
            agency best-practices.
             Use a design-build process when possible.

        VA wants to equip its facilities with the most up-to-date
    equipment. However, procuring medical equipment after the design of the
    facility inevitably causes building delays while the designs are
    redrawn, and in some cases demolition and reconstruction have taken
    place to accommodate the newly purchased medical equipment.
        The VFW believes VA would benefit from the use of medical equipment
    planners. Using these planners, which is an industry practice used by
    the Army Corps of Engineers and other federal agencies, places an
    experienced medical equipment expert at the disposal of the architect
    and construction contractor. When used properly, a medical equipment
    planner can work with the architect during the design phase and then
    the construction contractor during the build phase to ensure needed
    space, physical structure and electrical support are adequate for the
    purchased medical equipment, reducing change orders, work stoppages,
    and the demolition of newly built sections of a facility.
        Using a medical equipment planner can reduce schedule delays and
    cost overruns. Using the Orlando facility as an example, issues with
    the purchase of medical equipment caused cost overruns of more than $10
    million and construction had to be suspended until the issues were
    resolved.
        Poor communication within VA and between VA and the general
    contractor has also led to delays and cost over-runs. There have been
    cases identified where separate VA officials have provided
    contradictory orders to the general contractor, where one VA employee
    authorized the continuation or start of a new phase of building, while
    another VA employee gave the order not to continue or start a
    particular phase. This lack of VA project management coordination led
    to a portion of the Orlando, Florida facility to be built then removed.
        By developing and using a project management plan, all parities at
    the onset of the project will have a clear understanding of the roles
    and authorities of each member of the project team. Included in the
    plan will be clear guidance on communication, staffing, cost and
    budget, as well as change-order management.
        Construction peer excellence reviews are an important aspect of
    maintaining a high level of construction quality and efficiency. When
    used, these review teams are made up of experts in construction
    management who travel to project sites to evaluate the performance of
    the project team. These meetings provide important feedback--a separate
    set of eyes--on the project management plan to ensure a plan is in
    place to make the project come in on time and on budget.
        VA has historically relied on the design-bid-build project delivery
    system when entering into contracts to build major medical facility
    projects. Sixty percent of current VA major medical facility projects
    use design-bid-build. With this model, an architect is selected to
    design a facility, the design documents are used to secure a bid, and
    then the successful contract bid holder builds the facility.
        Design-bid-build projects often encounter disputes between the
    costumer--VA in this case--and the construction contractor. Because
    these contracts are generally firm-fixed-price, based on the completed
    design, the construction contractor is usually responsible for cost
    overruns, unless VA and the contractor agree on any needed or proposed
    changes that occur with a change of scope, unforeseen site condition
    changes or design errors. VA and the contractor negotiate these changes
    through change orders. This process can become adversarial, because
    neither party wants to absorb the cost associated with the change, and
    each change order can add months to the project completion date.
        A design-build project teams the architectural/engineering company
    and the construction contractor under one contract. This method can
    save VA up to six months of time by putting the design phase and the
    construction performance metric together. Placing the architect as the
    lead from start to finish, and having the prime contractor work side-
    by-side with the architect, allows the architect to be an advocate for
    VA. Also, the architect and the prime contractor can work together
    early on in the design phase to reduce the number of design errors, and
    it also allows them to identify and modify the building plans
    throughout the project. The VFW agrees with the recommendations
    outlined in Section 3 of this legislation.
        Section 4 provides for a special project manager for the on-going
    construction projects in Denver, Colorado, Orlando, Florida, and New
    Orleans, Louisiana. This section calls on VA to enter into an agreement
    with the Army Corps of Engineers, so the Corps can provide a special
    project manager to conduct oversight of the construction operations
    regarding compliance with acquisition regulations, and monitor the
    relationship of VA and the prime contractor. It will also authorize the
    Corps to assist in construction related activities, such as change-
    order requests, and provide guidance on developing best practices in
    overall project operations.
        The VFW supports this provision, but it should be seen as a stop-
    gap measure to help VA to quickly complete these three outstanding
    major construction projects, and systems must be put in place to ensure
    VA can function under similar guidance without the assistance of the
    Corps on future projects.
        It is important for VA to become more efficient at facility
    construction. Veterans have expectations that medical facilities will
    be available when VA first states what the completion date will be. It
    is obvious by looking at the number of delays and cost overruns that
    the contracting and building procedures that VA currently uses are
    antiquated and are costing VA millions of dollars more for each
    project; and causing five to six year delays in much needed medical
    facilities. By passing this legislation, VA will gain better oversight,
    cost controls and more efficient procedures for future construction
    projects.
        Mr. Chairman, this concludes my remarks and I look forward to any
    question you or the Committee may have.

    Information Required by Rule XI2(g)(4) of the House of Representatives

        Pursuant to Rule XI2(g)(4) of the House of Representatives, VFW has
    not received any federal grants in Fiscal Year 2013, nor has it
    received any federal grants in the two previous Fiscal Years.
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