[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

                              ----------                              


                        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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