[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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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
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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
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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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