[House Hearing, 115 Congress]
[From the U.S. Government Publishing Office]



 
DRAFT LEGISLATION, THE ASSET AND INFRASTRUCTURE REVIEW ACT OF 2017, AND 
   H.R. 2773, TO AUTHORIZE THE SECRETARY OF VETERANS AFFAIRS TO SELL 
                             PERSHING HALL

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

                                HEARING

                               before the

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

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                       THURSDAY, OCTOBER 12, 2017

                               __________

                           Serial No. 115-34

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
       
       
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]       

       


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

                U.S. GOVERNMENT PUBLISHING OFFICE
                   
31-342                  WASHINGTON : 2019              
        
        
        
                     COMMITTEE ON VETERANS' AFFAIRS

                   DAVID P. ROE, Tennessee, Chairman

GUS M. BILIRAKIS, Florida, Vice-     TIM WALZ, Minnesota, Ranking 
    Chairman                             Member
MIKE COFFMAN, Colorado               MARK TAKANO, California
BRAD R. WENSTRUP, Ohio               JULIA BROWNLEY, California
AMATA COLEMAN RADEWAGEN, American    ANN M. KUSTER, New Hampshire
    Samoa                            BETO O'ROURKE, Texas
MIKE BOST, Illinois                  KATHLEEN RICE, New York
BRUCE POLIQUIN, Maine                J. LUIS CORREA, California
NEAL DUNN, Florida                   KILILI SABLAN, Northern Mariana 
JODEY ARRINGTON, Texas                   Islands
JOHN RUTHERFORD, Florida             ELIZABETH ESTY, Connecticut
CLAY HIGGINS, Louisiana              SCOTT PETERS, California
JACK BERGMAN, Michigan
JIM BANKS, Indiana
JENNIFFER GONZALEZ-COLON, Puerto 
    Rico
                       Jon Towers, Staff Director
                 Ray Kelley, Democratic Staff Director

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 
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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 
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                            C O N T E N T S

                              ----------                              

                       Thursday, October 12, 2017

                                                                   Page

Draft Legislation, The Asset And Infrastructure Review Act Of 
  2017, And H.R. 2773, To Authorize The Secretary Of Veterans 
  Affairs To Sell Pershing Hall..................................     1

                           OPENING STATEMENTS

Honorable David P. Roe, Chairman.................................     1
Honorable Tim Walz, Ranking Member...............................     3

                               WITNESSES

The Honorable Mike Coffman, U.S. House of Representatives, 6th 
  District; Colorado.............................................     5
    Prepared Statement...........................................    37
Joy J. Ilem, National Legislative Director, Disabled American 
  Veterans (DAV).................................................    12
    Prepared Statement...........................................    37
Louis J. Celli Jr., Director, Veterans Affairs and Rehabilitation 
  Division, The American Legion..................................    13
    Prepared Statement...........................................    42
Carl Blake, Associate Executive Director of Government Relations, 
  Paralyzed Veterans of America (PVA)............................    15
    Prepared Statement...........................................    46
Carlos Fuentes, Director, National Legislative Service, Veterans 
  of Foreign Wars of the United States (VFW).....................    17
    Prepared Statement...........................................    49
Dave Wise, Director, Physical Infrastructure Team, U.S. 
  Government Accountability Office (GAO).........................    18
    Prepared Statement...........................................    51
Regan L. Crump MSN, DrPH, Assistant Deputy Under Secretary for 
  Health for Policy and Planning, Veterans Health Administration, 
  U.S. Department of Veterans Affairs............................    20
    Prepared Statement...........................................    60
        Accompanied by:

    James M. Sullivan, Director, Office of Asset Enterprise 
        Management, U.S. Department of Veterans Affairs

                       STATEMENTS FOR THE RECORD

Concerned Veterans for America (CVA).............................    62


DRAFT LEGISLATION, THE ASSET AND INFRASTRUCTURE REVIEW ACT OF 2017, AND 
   H.R. 2773, TO AUTHORIZE THE SECRETARY OF VETERANS AFFAIRS TO SELL 
                             PERSHING HALL

                              ----------                              


                       Thursday, October 12, 2017

            Committee on Veterans' Affairs,
                    U. S. House of Representatives,
                                                   Washington, D.C.
    The Committee met, pursuant to notice, at 10:30 a.m., in 
Room 334, Cannon House Office Building, Hon. David P. Roe, 
[Chairman of the Committee] presiding.
    Present: Representatives Roe, Bilirakis, Coffman, Wenstrup, 
Bost, Poliquin, Dunn, Arrington, Rutherford, Higgins, Bergman, 
Banks, Walz, Takano, Brownley, Kuster, O'Rourke, Correa, and 
Esty.

          OPENING STATEMENT OF DAVID P. ROE, CHAIRMAN

    The Chairman. Good morning. The Committee will come to 
order.
    I want to thank you all for joining us today for this Full 
Committee legislative hearing.
    Before I continue, I want to tell my friends from 
California that hopefully we will have a vote later on today 
and send some resources out for the awful fires that are going 
on. I experienced those a year ago in Gatlinburg, in Sevier 
County, Tennessee, where we lost 2500 homes and 14 lives. It is 
astounding what is happening there.
    So I just wanted to pass that along to you all that are in 
California, if there is any way we can help, we are willing to 
help. I have been down that road.
    This morning we will be focusing on two pieces of 
legislation: the draft Asset and Infrastructure Review, or AIR 
Act of 2017; and H.R. 2773, a bill to authorize the sale of 
Pershing Hall in Paris, France.
    Since Representative Coffman will be speaking shortly on 
H.R. 2773, which he sponsors, I will contain my comments to the 
draft bill that Ranking Member Walz and I have been working on 
together.
    Exactly three months ago today, we held a Full Committee 
hearing to examine concerns regarding the Department of 
Veterans Affairs Capital Asset Program and alignment, or 
misalignment, as the case may be, of the VA medical facilities 
and the veteran patient population.
    I came to that hearing familiar with the numerous 
challenges VA was facing with regard to managing an 
increasingly unmanageable real estate portfolio. In fact, I was 
so aware of those challenges I had already decided that taking 
action to address was going to be one of my top priorities as 
Chairman, yet that hearing was alarming even to me as VA's own 
testimony noted that the majority of VA's facilities have 
outlived their useful life cycle.
    A couple weeks ago, I traveled to Northport, New York to 
meet with staff at the Northport VA Medical Center. The 
Northport VA Medical Center is a 90-year-old facility on a 
sprawling medical campus that struggles with significant 
maintenance issues and costs, despite dozens of mothball 
buildings. The condition of that facility has gotten so bad 
that some veterans claim they can no longer seek care safely 
there; instead, travel from Northport to New York City to visit 
the VA facilities there.
    After visiting Northport, I went to Canandaigua, New York 
to visit the Canandaigua VA Medical Center and the Veterans 
Crisis Line, which is housed there. The Canandaigua VA Medical 
Center is an 84-year-old facility that sits on a 150-acre 
campus in the middle of a residential neighborhood. However, 
the majority of veteran patients in Canandaigua's catchment 
area seek care to the VA community-based outpatient clinic 
about 30 miles away in Rochester, New York. That clinic is 
nearly busting at the seams from high utilization, while the 
Canandaigua VA Medical Center largely sits empty.
    At both Northport and Canandaigua, I saw firsthand the 
consequences of outdated and oversized medical campuses that 
struggle to maintain current standards of care without 
significant back-bending. And we wonder why the VA health care 
system has struggled to provide care that meets the highest 
access and quality standards, and that is why Ranking Member 
Walz and I are working together on this draft of the AIR Act.
    This legislation would require the Secretary to develop 
criteria to access and recommend changes to VA Medical Centers. 
That criteria would be published on the Federal Register, 
subject to a 30-day public comment period, and would be 
required to take into account a number of factors, including 
access to care, the capacity of the local health care market, 
input from local veteran and stakeholders, and potential costs 
and savings.
    The legislation would also establish an 11-member Asset and 
Infrastructure Review Commission that would use the criteria 
established by the Secretary and the recommendations for action 
made by the Secretary to develop a report containing findings 
and recommendations for the modernization and realignment of VA 
medical facilities.
    Should the commission find that any of the Secretary's 
recommendations deviate substantially from the Secretary's 
criteria and a change is needed, the commission would be 
required to publish a notice of proposed change in the Federal 
Register and conduct public hearings in the local community on 
the proposal of changes?
    Once finalized, the commission's report would be 
transmitted to the President and, contingent upon his approval, 
to the Congress. Should Congress disagree with the commission's 
recommendations, we would have 45 days to issue a joint 
resolution of disapproval. Absent that, VA would be required to 
begin implementing the recommendations.
    This draft bill has been circulated with VA and with the 
VSOs, and was subject to a Full Committee roundtable in early 
September. Since then, I have met individually with many 
Members from both sides of the dais to discuss this language 
and the intent behind it, and how it aligns with ongoing 
efforts to course-correct VA's many care in the community 
programs.
    That said, this bill is just a draft, and I understand that 
there are still a number of concerns and questions about it, 
particularly with regard to the timeline, the composition of 
commissioners, and the involvement of veterans and advocates. I 
appreciate the many thoughtful comments made in the written 
statements prepared for today's hearing by our VSO witnesses 
and I look forward to incorporate many of their suggested 
changes in the coming days.
    I intend to also incorporate provisions in this bill prior 
to its introduction to increase the threshold of minor 
construction projects and expand enhanced use lease authority.
    Both of those changes have been discussed by this Committee 
before and have been requested by the Administration, and have 
the support of the VSOs.
    Yet even with those changes, it is an understatement to say 
that the deck is stacked against the AIR Act. This bill is 
bold, transformative, and controversial. Moving forward with it 
will require a significant amount of political courage and, 
let's face it, Members are not known specifically for that. 
That said, veterans, VSOs, and VA employees and taxpayers alike 
deserve more from each of us and to recognize how serious the 
problem before us is and to fail to act now to institute a 
solution.
    As Ranking Member Walz wisely noted at our hearing in July, 
``We can no longer kick this can down the road, Coach, because 
time is not on our side in this battle.''
    And as Representative Rice said, if there is any Committee 
in Washington, D.C. that has the political courage to do what 
is necessary, it is this one. The AIR Act is necessary.
    I will now yield to Ranking Member Walz for any opening 
statements that he might have.

         OPENING STATEMENT OF TIM WALZ, RANKING MEMBER

    Mr. Walz. Well, thank you, Mr. Chairman.
    And to our witnesses, thank you all for being here. I do 
think, maybe someday looking back, this could be a very pivotal 
hearing. I would echo the Chairman's statements; this is bold. 
I have not changed my opinion that we need to address this.
    I would note that there has been, and I think rightfully 
so, some folks commenting on the effectiveness of this 
Committee and the Chairman's leadership is no small part of 
that. Those who said we have been tackling the easy stuff, 
remember how appeals started, remember how accountability 
started, remember how Choice and Choice reform started, and 
remember the GI Bill statement. Some of us are still friends 
after that fight, but it took a lot.
    What it shows is, it shows the courage, and this is why the 
Members are sitting here, you came here to do this. You came 
here to legislate, you came here to have healthy disagreements, 
you came here with the confidence that we could try and find 
some things together, and this is a starting point.
    I would like to note a few things in this. We are working 
side-by-side in this, but it is a journey and it is going to be 
a tough one. And the witnesses, you are going to come and you 
are going to present your testimony. You were there at the 
roundtables. We can do this, but it is going to have to be done 
in that confidence and that trust that we have done some of 
these other things.
    So providing the Secretary the authority to support his 
needs to assess and ultimately realign VA is one of this 
Committee's top priorities. However, I do not think any of us 
should forget the highest of priorities within the Committee is 
ensuring veterans have access to receive the highest quality 
services, health care, and benefits.
    No one disagrees with the need to modernize the VA's 
infrastructure and build community partners where it makes the 
most sense for veterans and taxpayers. I pulled out a statement 
I made sitting down on this corner in February of 2007 where I 
was calling for a quadrennial defense review to align assets 
and needs that it did not understand where we were going. I 
remember sitting there saying, we could be sitting here in 10 
years in 2017 and still not have an understanding of where we 
are going. So I think all of us get that part. I do not think 
we are there yet.
    As the legislation is written, I think it takes a picture, 
a snapshot of VA infrastructure, and to make a decision on 
going forward on that is going to have decades-long impact. We 
need more than a snapshot; we need to develop a process that VA 
can use to continually make decisions on an annual basis to 
ensure access gaps are identified and filled early.
    I also think, folks, whenever we talk about this, and it is 
something we should always be striving for, is the belief that 
it is going to be a cost saver. I think the belief is based on 
the fact that we hear about the 1,400 vacant buildings or 
under-utilized buildings. Most of these are not buildings that 
provide care for veterans. By my count, fewer than 20 of the 
1,400 buildings scheduled for disposal in fiscal year 2018 
provide direct care to veterans, while more than 70 buildings 
are old hospital staff residences.
    What is missing I think from the conversation so far is the 
fact that every single VISN there are significant utilization 
gaps in outpatient care space and there is an excess in 
inpatient care space. What does that mean? It means we have 
empty bed towers at too many facilities, but at the same 
veterans are waiting in line to receive modernized outpatient 
care. The issue deserves serious attention. I commend the 
Chairman and everyone here for their willingness to face this 
challenge.
    The legislation in its current form has more work to do. 
While we stated this is a draft bill and a starting place, we 
need to start making changes to the language. Other concerns we 
have is the timeline, the fact that the Secretary can deliver 
recommendations to the commission before the enactment of a 
permanent solution to consolidating community-based care is 
implemented.
    And most concerning to me, and I say this now, I would say 
it in 4 years, I would say it in 8 years, is the power of the 
President at the end of the process. If he or she disapproves 
of the recommendations, the commission ends without further 
action. If he or she approves the recommendations, regardless 
of Congress or stakeholders' agreement, by simply not signing 
the joint resolution of disapproval the recommendations will 
still be enacted.
    We agree, status quo is not the answer, but I have deep 
reservations about this if we do not have answers to earlier 
questions.
    Mr. Chairman, I will state it again: your leadership and 
guidance continues to move us ahead. Your boldness in stepping 
through political land mines to try and solve problems is one 
that I admire greatly.
    I ask now that we have set the plate, we have brought the 
people to the table, we are prepared to now start having that 
serious discussion about how do we put that template in place 
that allows a tool for VA to move forward, how do we get a 
quadrennial defense review or a quadrennial VA review that 
starts to move us there, and how is the process still with 
these Members in this room having more of the power to be able 
to move that forward.
    So, Mr. Chairman, I thank you. I look forward to the 
testimony of our witnesses and the engagement of all Members.
    The Chairman. I thank the gentleman for yielding.
    And joining us on our first panel, although testifying from 
the dais this morning, is our friend and colleague and fellow 
Committee Member, the Honorable Mike Coffman of Colorado.
    Mr. Coffman, you are now recognized for 5 minutes.

              STATEMENT OF HONORABLE MIKE COFFMAN

    Mr. Coffman. Thank you, Mr. Chairman.
    I would like to begin by thanking you for including my bill 
in today's legislative hearing and thank the witnesses for 
their testimony.
    Mr. Chairman, I think we can all agree that the VA's sole 
mission is to provide services to our Nation's veterans. The 
maintenance of a 5-star, 24-room boutique hotel, restaurant, 
and club in downtown Paris, France is clearly not included in 
that description.
    Therefore, in an effort to get the VA out of the overseas 
hotel business and focused on its core competencies, I 
introduced H.R. 2773, the Sell Excess Luxury Lodging, the SELL 
Act, to authorize the sale of this hotel, Pershing Hall.
    Pershing Hall is a building originally procured by The 
American Legion to serve as a memorial to our ``Doughboys,'' 
who served in France during World War I. The building was 
transferred to the VA in 1991, and in 1998 the VA leased 
Pershing Hall for a 99-year period to a French firm that 
redeveloped the property as a luxury hotel.
    In recognition of the historic aspects of Pershing Hall, 
H.R. 2773 requires the preservation of architectural details of 
the exterior and interior of the structure, and requires all 
property of General Pershing and the American Expeditionary 
Forces in France during World War I to be transferred to the 
American Battle Monuments Commission.
    H.R. 2773 also appropriately requires the transfer of sale 
proceeds to the American Battle Monuments Commission for the 
maintenance of cemeteries, monuments, and memorials dedicated 
to our men and women in uniform.
    Mr. Chairman, today you will hear the concern that the fair 
market value will not represent the true value of the property 
because it is encumbered by the VA's lease agreement. 
Unfortunately, the reality is that the VA negotiated a bad 
long-term deal that significantly decreased the market value of 
the property. Even more reason to get the VA out of the hotel 
business.
    To address this concern, I plan to amend my legislation to 
require a condition of the sale be the appraised value of the 
property versus the market value. So that what the market value 
is, we have this horribly negotiated, really below-market lease 
agreement that in a market value assessment will only reflect 
the income of the property, this lease agreement. So it would 
be a windfall to the lessee, who would be the only one who 
could purchase it, because they would say that they are not 
going to--that they want the lease agreement continued and so 
to reflect again that lower income that would reflect the 
market value of the property.
    What we want to do, what I want to do is to change it to 
appraised value. An appraised value would not reflect that 
lease agreement.
    And so there would be under two circumstances that it would 
be sold, certainly not guaranteed. One would be that the lessee 
realizes that the future appreciation of the value is 
significant enough that it is good to lock in the value now, 
lock in the appraised value now and go ahead and buy the 
property despite this below-market lease agreement, or it would 
be another buyer who would negotiate with the lessee to buy out 
the lease agreement contingent upon the purchase of the sale of 
the, the buyer of the property. Those are the both 
circumstances.
    And so I think it would be, although I want to get the VA 
out of the luxury hotel management business, I think that, you 
know, there has to be a fair price to the taxpayers of the 
United States.
    While Pershing Hall is probably a terrific hotel, it makes 
no sense that VA keeps a luxury hotel in Paris on its books. 
The VA needs to focus its time and resources on its core 
mission, taking care of our Nation's veterans.
    Mr. Chairman, thank you for allowing me to testify today on 
behalf of this legislation and I yield back the remainder of my 
time.

    [The prepared statement of Mike Coffman appears in the 
Appendix]

    The Chairman. I thank the gentleman for yielding.
    I just have one very quick question, is that when this was 
leased, this 99-year lease signed? And then, I guess, why in 
the world would you have signed a 99-year-old lease?
    Mr. Coffman. Sir, I think we have the VA here, but I 
believe that it was done, let's see, in 1998, as I understand 
it correctly, that the lease was signed.
    The Chairman. I don't think any of us are going to be 
around when the lease is up.
    I now yield to Mr. Walz.
    Mr. Walz. Well, this one too has always been one when it 
comes up, it is kind of hard to wrap your mind around this.
    I do note The American Legion's positions on the historic 
nature of this, their involvement in it. The importance of the 
Pershing artifacts in World War I, especially as we are in the 
centennial year of World War I. So I am kind of interested to 
hear those reports, but I appreciate the gentleman--look, I 
certainly have no idea why we run a hotel and a 99-year lease. 
I think it is probably the transition here is what we are 
getting after and making sure we get that right.
    So I yield back.
    The Chairman. I thank the gentleman for yielding.
    Mr. Bilirakis, you are recognized.
    Mr. Bilirakis. No questions.
    The Chairman. Mr. Takano, you are recognized.
    Mr. Takano. I am certainly interested as a former high 
school teacher, both English and social studies, about the 
historical significance of this building. I think World War I 
had enormous consequences that we are still feeling today, the 
high percentage of nationalism that we are experiencing around 
the world was certainly present during World War I, and I am 
wary of us erasing physical landmarks of such a consequential 
war. And we are 100 years away from it, but I am always mindful 
that we have to be constantly reminded about the history and 
history that gets forgotten by generations.
    So I am interested to hear what The American Legion has to 
say about their views on this matter.
    I yield back.
    The Chairman. I thank the gentleman for yielding.
    Mr. Coffman has already spoken. Do you have any--Dr. 
Wenstrup?
    Mr. Wenstrup. Nothing at this time. I yield back.
    The Chairman. Ms. Brownley?
    Ms. Brownley yields.
    Mr. Bost?
    Ms. Kuster?
    Ms. Kuster. Thank you, Mr. Chairman.
    I just want to speak on behalf of H.R. 2773, a bill to 
authorize the sale of Pershing Hall, and join my colleague Mr. 
Coffman.
    Last year, I accompanied Mr. Coffman to a field hearing in 
Aurora, in Colorado, when, as you all know, the construction of 
the VA hospital in Aurora led to significant cost overruns, 
overruns that were unacceptable to Mr. Coffman and myself and 
all Members of the Committee. So at that time I joined Mr. 
Coffman in a version of this bill last year.
    While the Aurora project no longer needs the funds from the 
sale of Pershing Hall, it has become clear to me that the VA 
should not be in the business of managing properties like a 
luxury hotel in Paris, France. But unfortunately, as Mr. 
Coffman has outlined, the current lease demonstrates exactly 
why the VA should not be managing properties like hotels, 
entering into a 99-year lease with a French hotel company in 
exchange for renovations. As a result, if the VA sold this 
property today, we would receive a small fraction of the $80 
million appraised value of the property.
    So consequently, I support Mr. Coffman's proposal to amend 
the legislation to include as the appraised value as a 
condition of the sale of Pershing Hall and I urge my colleagues 
to support his amendment in this legislation.
    And I yield back.
    The Chairman. I thank the gentlelady for yielding.
    Mr. Poliquin, you are recognized.
    Mr. Poliquin. We have so many problems now in this 
Government and the primary responsibility of the VA is to care 
for those that are coming back from the battlefield, we should 
not be in the luxury hotel business in Europe.
    The Chairman. The gentleman yields back.
    Mr. Correa, you are recognized--oh, Mr. O'Rourke, I'm 
sorry.
    Okay. Dr. Dunn, you are recognized.
    Mr. Dunn. Thank you, Mr. Chairman.
    I wanted to understand, so I was doing a little math here, 
do we have about 70 years left on this lease, is that correct? 
About right, that is about right. And is the penalty on that to 
pay back the entire 70-year lease if we sell the property?
    Mr. Coffman. Well, if you were going to breach the lease 
agreement, I am sure what--maybe VA could comment--clearly 
there is going to be a penalty as, you know, you would sort of 
discount, it would be a discounted rate, but that is why I 
think moving to the appraised value.
    And so, again, it is probably the lessee that could buy it 
if they assume that there is going to be a lot of appreciation 
to the hotel and it is best to lock it in now. Or it is going 
to be, again, somebody who is going to negotiate a buyout of 
that lease agreement and then buy the property to the appraised 
value.
    The Chairman. The gentleman yields back.
    Mr. Correa, you are recognized for 5 minutes.
    Mr. Correa. Thank you, Mr. Chairman.
    First of all, I want to thank you very much for your 
thoughts and prayers regarding our fires in California. 
Southern California Fire is probably within a mile or 2 of my 
district, some of the evacuation sites are actually in my 
district. My friends and neighbors, some of my staffers have 
been evacuated from some of those areas. And we do pray for 
those that have been affected and we pray that the firefighters 
are able to stop these fires as quickly as possible.
    In reference to Mr. Coffman's bill, I just want to say I 
join you in supporting your bill. We should not be in the 
business of managing hotels, but we should be in the business 
of managing taxpayer resources, and it sounds like we got 
snookered here. It is something that is not unusual and I would 
say the VA has to figure out how to manage these assets like 
any other professional real estate management company would do.
    Our job, on my opinion here, first and foremost, like has 
already been said, is to make sure we take care of our moral 
obligation to our veterans and that everything we do is for the 
benefit of our veterans. A lot of times in this Nation, the 
issue becomes resources. Where do you get the money to take 
care of our veterans in the proper way? The big expense, real 
estate, typically, when it comes to delivering the resources. 
As we look at assessing these real estate assets that we have, 
taxpayer-owned, let's not look at just today, but look at 
tomorrow.
    I know we had a study group here, right over there. I 
looked at a map and one of those maps showed some of the real 
estate being located in the Inland Empire, just east of where 
my district is. Under-utilized today, but I will tell you, that 
is the fastest growing region in California and probably the 
United States. And I guarantee you, in 20 to 30 years, if we 
sell those resources today, 20 to 30 years from now, we are 
going to be kicking ourselves and saying this is where we need 
to put VA resources, VA clinics that take care of our veterans.
    So let's have a little bit of vision here and let's be good 
stewards of real estate assets that are owned by taxpayers.
    If you look at life insurance companies, they invest for 
the long term, because when they have to sell is when those 
folks die, that means 20 to 30 years out they have got to have 
the resources to pay on those life insurance companies. We 
should do the same thing, which is we know veterans, we have to 
take care of those veterans 20, 30, 40 years out. So let's 
start thinking like life insurance companies, real estate 
investment management companies do. We are looking at a BRAC-
closure kind of a plan here.
    Let me tell you about El Toro Military Base in Orange 
County. It broke my heart when we closed it down. The 
Government invested $900 million upgrading that base. The next 
year, through the BRAC process, we decided to close it down. El 
Toro, 5,000 acres in the middle of Orange County, tremendous 
value, a great real estate play. Let me tell you, when we 
closed it down, we should have thought, again, what is number 
one? Taking care of our vets.
    Let me tell you what happened recently. The veterans came 
together in Orange County and said we want a veteran's cemetery 
in Orange County, so we won't have to go so far to visit our 
veterans that have made the ultimate sacrifice, deceased 
veterans. We fought hard to get 125 acres. The City of Irvine 
later on reconsidered and said, you only get 25 acres. Five 
thousand to 125 to 25 acres. We finally got them to give us 125 
acres for a veteran's cemetery.
    The lesson? Once you let go of control of our government 
resources, they are no longer under our control.
    So, again I would ask, go slow, Mr. Chairman; be 
methodical, be very careful, carefully weigh the benefits as to 
how these resources can best be used for the benefit of our 
veterans. And, finally, the process has to be very transparent. 
Let's make sure that our veterans are front and center, that 
they are part of the decision-making process.
    Mr. Chair, I yield.
    The Chairman. I thank the gentleman for yielding. I am a 
Methodist, so we do everything very methodical and slow.
    [Laughter.]
    The Chairman. So, Mr. Higgins, you are recognized for 5 
minutes.
    Mr. Higgins. Thank you, Mr. Chairman.
    I concur that we agree on a bipartisan manner, and with the 
cooperative and respectful communications of the VSOs that we 
listen very carefully to as we move forward to streamline the 
VA and reform the expenditures of the people's Treasury. And to 
look carefully at these properties that are under-used, under-
utilized, some of them need to go away.
    Regarding the Pershing facility being operated as a hotel, 
the term ``appraised value'' is being used. This is a business 
being operated as a profitable business and in the sale of any 
business the consideration of what is referred to as blue sky 
is generally considered to be part of the appraised value. In 
other words, not just the physical structure and the assets 
therein, but what is the value, how much money has the thing 
been making? And blue sky is generally considered for 5 years 
as added to the value of the property.
    So I would suggest that this also be a part of the formula 
as we consider the sale of this property. As reflective of the 
sale of any real estate and as some sort of a common, you know, 
transaction that takes place every day many, many times across 
the country, that the blue sky should be considered as part of 
the value of that property.
    So that would be my only concern. I concur that we need to 
get out of the hotel business and it is probably a good idea to 
sell the property, but I would just say that we should squeeze 
every dime we can out of that for the betterment of the 
veterans that we serve.
    And with that, I yield back.
    The Chairman. I thank the gentleman for yielding.
    Let's see, General Bergman, you are recognized for 5 
minutes.
    Mr. Bergman. Thank you, Mr. Chairman.
    Jim Collins, a great author, talks about the three most 
important things any business that is going to become great 
needs to do every year: you need to fairly evaluate what it is 
that you are doing that you need to keep doing, you need to 
evaluate what you are not doing that you need to start doing, 
and the biggest challenge to any, any entity is to stop doing 
things that no longer add value to your mission, your core 
business mission.
    So having said that, as we look at the VA and trying to 
help them focus their efforts on the veterans, and focus on the 
veterans on their future needs, without wasting very valuable 
and very limited resources on things that we don't need to be 
doing anymore, I wholly support the getting out of the Parisian 
hotel, boutique hotel business, because we have limited 
resources, limited time, limited everything to do the right 
thing for the veterans. So I fully support this.
    I yield back.
    The Chairman. I thank the gentleman for yielding.
    Mr. Banks, you are recognized for 5 minutes.
    The gentleman yields.
    Mr. Arrington, you are recognized for 5 minutes.
    Mr. Arrington. Mr. Chairman, I just make a general 
statement that I agree with my colleagues that we need to align 
assets and resources according to the core mission of the VA, 
and we need to make sure that we are also aligning them with 
the demand, where there is need, just like every other 
organization. And if we don't do that, then we are not being 
good stewards of the taxpayer dollar.
    And I commend you for the process; it needs to be 
objective, it needs to be fact-based, and we need to remove it 
from the politics, the parochial politics of protecting our 
single-Member-district-type interest, I think that is not 
healthy. This should be American taxpayer and American veteran 
first and we drive on this.
    So I commend you for your leadership and I wholeheartedly 
support Mr. Coffman and his efforts on this regarding the 
Pershing hotel. I don't know why we would be in that business. 
So, thanks for your hard work and I support you on that.
    The Chairman. I thank the gentleman for yielding.
    Mr. Coffman, do you have any final comments?
    Mr. Coffman. Yes, Mr. Chairman. On this bill to align 
demand with our current infrastructure and make those 
appropriate changes, I want to thank you for your leadership, 
as well as Mr. Walz on this particular issue.
    And I will say, when I grew up in Aurora, Colorado, which 
is the heart of my district, it was a military town with three 
military installations in it. Two were closed, an Army and an 
Air Force base in successive BRACs, and as a community member I 
have fought that BRAC process as hard as I could. But I can 
tell you, the economic development that has occurred since 
those closures is greater than what we had received when those 
bases were operational relative to the economic impact on our 
respective community.
    I yield back, Mr. Chairman.
    The Chairman. I thank the gentleman for yielding.
    And just one final comment before we introduce our next 
panel. I think Mr. Takano made some good points about not 
forgetting the history and the Legion made some good points 
when I read their testimony. So I think we need to be sensitive 
and aware of that, that history, I agree. I don't know how it 
will all work out yet, but I do think you make good points with 
what you said historically about what we are trying to maintain 
also and let's not forget what happened in World War I. So I 
think I will need to think through it some more.
    I want to thank you, Mr. Coffman, for your testimony. And 
with no other questions, we will introduce our second panel.
    Joining us are Joy Ilem, the National Director for the 
Disabled American Veterans. Welcome. Mr. Louis Celli, the 
Director of Veterans Affairs and Rehabilitation Division of The 
American Legion; Carl Blake, the Associate Executive Director 
for Government Relations for Paralyzed Veterans of America. 
Welcome. Carlos Fuentes--and I thought we were going to have to 
send out a search dog for you this morning when you weren't 
there--the Director of the National Legislative Service for the 
Veterans of Foreign Wars of the United States. Dave Wise, the 
Director of Physical Infrastructure Team for the U.S. 
Government Accountability Office. Dr. Regan Crump, the 
Assistant Deputy Under Secretary for Health for Policy and 
Planning, for Veterans Health Administration of U.S. Department 
of Veterans Affairs, who is accompanied by James Sullivan, the 
Director of VA's Office of Asset Enterprise Management.
    Ms. Ilem, we will begin with you. You are now recognized 
for 5 minutes.

                    STATEMENT OF JOY J. ILEM

    Ms. Ilem. Thank you, Chairman Roe. Ranking Member Walz, 
Members of the Committee, on behalf of DAV, thank you for the 
opportunity to testify today on the draft Asset and 
Infrastructure Review legislation under consideration by the 
Committee.
    For years, DAV, along with our independent budget partners, 
has consistently called for resolving VA's many infrastructure 
challenges, including aging and outdated medical and research 
facilities, consistent under-funding for major and minor 
construction and critical maintenance needs, as well as 
problematic leasing and sharing authorities.
    While we do not believe the BRAC-like model proposed in the 
draft bill is the most appropriate way to address VA's capital 
infrastructure needs, we do acknowledge the need for a 
strategic national plan and a comprehensive infrastructure 
review and assessment prior to modernization or realignment of 
the Department's medical facilities.
    Rapid advancements in medicine and significant changes in 
the way health care is delivered today, as well as changes in 
veterans' needs and preferences and demographics, require a 
more nimble and flexible process that allows VA to make changes 
when necessary to ensure the delivery of high-quality health 
care and specialized services throughout the system. However, 
we do not believe Congress should consider systemic changes to 
VA's health care infrastructure in isolation from other 
critical factors. Most importantly, without first finalizing 
decisions on the reform of the Choice program and development 
of regional integrated networks that would combine VA and 
community care options for veterans.
    The 2016 Commission on Care Report concluded and we concur, 
real transformation of the VA health care system will require a 
comprehensive and integrated systems approach.
    For successful reform of the system, the Department must 
also address several other critical, interrelated challenges, 
to include modernization of its health care IT system and 
electronic health record; improvements in HR policies to fill 
staff vacancies more rapidly, steadily increasing demand for 
services, and existing challenges to provide veterans 
convenient access to care in rural communities; all of which 
have significant budgetary implications.
    Rather than establishing a BRAC-like, one-time asset review 
process, we believe VA would be better served by establishing a 
standardized, long-term process that includes local 
involvement, periodic ongoing reviews, a realistic plan for 
upkeep and maintenance costs, and the authority for the 
Department to more easily make changes as demand for care and 
market conditions shift over time.
    Mr. Chairman, my written statement includes a number of 
recommended changes to the bill and I will highlight just a few 
that we feel are most critical.
    We recommend extension of the overall timeline to ensure a 
thorough and effective asset review process can be conducted; 
inclusion of provisions for early and more meaningful 
stakeholder input to ensure veterans understand any proposed 
changes and to build support; that information transmitted to 
the Commission, Congress or the President also be made 
available to the public; that facility recommendations be 
carried out in several phases, first focusing on buildings and 
properties that are currently unused or significantly under-
used, then considering market assessments and more 
comprehensive alignments only after decisions have been made 
regarding Choice reforms.
    The market assessments should include options for expanding 
VA's internal capacity where appropriate through extended hours 
of operation or by increasing staff or space.
    We also recommended that no VA facility should be closed 
until a replacement facility is opened or an arrangement with 
community partners has been secured and established, so that no 
enrolled veteran ever loses access to care.
    Finally, DAV strongly believes that any commission 
established affecting the future of VA health care must first 
and foremost represent the veteran users of that system. For 
these reasons, we recommend the commission include at least six 
members who are current users of the VA health care system and 
that three of those members represent congressionally-chartered 
membership and resolution-based service organizations.
    Mr. Chairman, in closing, DAV is committed to working with 
you and the Committee to achieving our shared goals of 
improving VA health care services for our Nation's ill and 
injured veterans.
    That concludes my statement and I am happy to answer any 
questions you or the Committee Members may have.

    [The prepared statement of Ms. Joy Ilem appears in the 
Appendix]

    The Chairman. Thank you.
    Mr. Celli, you are recognized now for 5 minutes.

                STATEMENT OF LOUIS J. CELLI, JR.

    Mr. Celli. Well, one thing is absolutely clear, veterans 
deserve a 21st century health care system; a sustainable, 
reliable, and compassionate system that is able to meet their 
needs and one that veterans can be proud of.
    Chairman Roe, Ranking Member Walz, and Members of this 
distinguished Committee, on behalf of Commander Denise H. Rohan 
and the millions of veterans making up the largest Veteran 
Service Organization in the Nation, thank you for taking on the 
challenge of modernizing VA's aging infrastructure.
    Admittedly, this is a complicated process and one that will 
require a complete assessment of VA's health care delivery 
services and current physical capabilities. And while The 
American Legion applauds this Committee for addressing VA's 
capital needs, we want to take this opportunity to underscore 
what our colleagues, Members of Congress, VA, and our members 
recognize, VA will need a complete comprehensive health care 
market assessment VISN by VISN before anyone can offer a 
responsible assessment or recommendation on the modernizing 
VA's assets and infrastructure.
    The draft legislation being discussed here today helps get 
this conversation started. And you already have our witness 
statement for the record, so I will just go over some of the 
points that we will need to refine before The American Legion 
will be able to fully support this effort.
    First, The American Legion is rarely a fan of 
congressionally-appointed Committees and this is no different. 
As highlighted in our written presentation, fundamentally we 
oppose establishing a Committee to oversee this process, but if 
establishing a Committee or a commission becomes a necessary 
concession to moving forward, I cannot stress strongly enough 
that The American Legion will absolutely not support a 
commission whereby congressionally-chartered VSOs, the most 
accurate representation of voices of millions and millions of 
veterans this Committee has access to, are not empowered to 
have collective veto power over what could turn into a runaway 
committee.
    Again, specifics on how that can be achieved are detailed 
in the testimony you have in front of you.
    Second, the Committee has wrestled with leasing health care 
facilities over the past several years and, as the Chairman 
points out, there is no better time than now to address this in 
this legislation. The legislation will certainly miss the mark 
if we fail to fix this leasing issue once and for all.
    Third, while addressing the demographics of the commission, 
The American Legion feels strongly, as DAV does, that the 
commission should be a representation of the current 
demographic of the average VA patient today and understand what 
the needs are of the VA patient tomorrow will be.
    Next, The American Legion sees no reason the commission 
should need to financially compensate the volunteer committee 
members. The structure of this committee calls for senior level 
executives and experts that oversee millions of dollars in 
health care infrastructure. If the reward for serving on this 
committee isn't serving veterans and the honor of participating 
in a congressionally-appointed committee that reports to 
Congress and the President of the United States, then perhaps 
we should reevaluate the selection process.
    In the draft legislation, there is a prohibition against 
former employees of VA who are instrumentally involved in the 
commission's work. I don't understand why that provision is in 
there at all and would like to learn more about how that might 
be a threat to the integrity of the process.
    I also want to mention that the seats assigned to 
congressionally-chartered Veterans Services Organizations need 
to forever remain assigned to the organization and not to the 
appointee. We have seen in the past how appointees have 
undermined this authority by accepting an appointment on a 
visionary committee, only to divorce themselves from their 
organization in favor of their personal opinions, leaving the 
VSO community without a voice in the process. It was shameful 
and it was unacceptable.
    Finally, with regard to this bill, page 19, line 20(c) 
needs to change to ``The Commission will recommend changes to 
the Committee on Veterans' Affairs of the House and Senate.'' 
The American Legion adamantly opposes granting the commission 
unilateral authority to change or amend the recommendations of 
the Secretary. That simply cannot happen under any 
circumstances.
    With the remainder of my time, I will address the issue of 
Pershing Hall in Paris, France. While many Veterans Service 
Organizations may not have a strong opinion one way or the 
other regarding Pershing Hall, please understand that this 
property has historical value and a deeply personal meaning for 
The American Legion.
    Nearly 100 years ago, the members of the American 
Expeditionary Forces of World War I came together to preserve 
the memories and incidents of our associations in the Great 
Wars. And as the 100th anniversary of our founding approaches, 
The American Legion is still dedicated to that mission.
    The American Legion fought for the dedication of the 
memorial in Paris, France, in the city where The American 
Legion was formed, to recognize the service and sacrifices of 
The American Legion Expeditionary Forces and General John 
``Jack'' Pershing. We take this very seriously.
    At a minimum, we should not be able to sort out what should 
immediately happen with this monument today and we look forward 
to working with Mr. Coffman to work this out. And I just want 
to echo your comments and thank you for recognizing that 
selling this at a fire sale is the wrong thing to do.
    Thank you.

    [The prepared statement of Louis J. Celli appears in the 
Appendix]

    The Chairman. I thank the gentleman for yielding.
    Mr. Blake, you are now recognized for 5 minutes.

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Chairman Roe, Ranking Member Walz, Members of 
the Committee, on behalf of Paralyzed Veterans of America, I 
would like to thank you for the opportunity to testify today.
    PVA has no stated position on the Pershing Hall issue, so I 
will limit my comments to the Asset and Infrastructure Review 
bill that is being considered by the Committee.
    First, Mr. Chairman, I would like to thank you and Ranking 
Member Walz for holding the roundtable in September where we 
began this discussion. Many of us at this table know that this 
discussion actually began before that point and we appreciate 
you all taking the time to address this with us.
    I would say we recognize this as a necessary evil. The 
bottom line is, I don't know anyone who was involved in BRAC, I 
served in the military during BRAC, who didn't think BRAC was 
in some form evil, and yet it is probably a necessary process. 
I will say that I am not sure this bill yet gets us there to 
the desired end. With that in mind, we don't oppose what you 
are trying to do and we would like to see some refinements to 
this legislation.
    The Commission on Care recommended a BRAC process for VA. 
We stated then, our partners in the Independent Budget, DAV and 
VFW also stated then, that we don't believe that that is the 
right way forward, but we recognize the need to right-size the 
VA's infrastructure.
    The Independent Budget has stated over and over again that 
that was necessary. I think the Secretary understands that; his 
list is pretty comprehensive just in terms of buildings. But I 
think there are a few key problems that were identified in the 
legislation during the roundtable that cannot be ignored to 
make this better.
    I think the bill ignores what was identified as the single 
biggest problem--or the roundtable identified the single 
biggest problem with this bill is it does not give the VA time. 
And I know that Congress has a complicated position where time 
is not exactly a luxury, but the experts from GAO and from the 
Congressional Research Service, and all of the stakeholders in 
the room when we had that conversation, clearly stated that DoD 
had at least 3 years to prepare its BRAC process, and this bill 
would accomplish that with VA in far less time.
    And I would argue that the VA system is far more dynamic 
and more complex than what DoD had to deal with. All DoD had to 
do was say, you live here, you are stationed here, you are 
moving, and that is it. That is not the way that is going to 
work with VA and the population it serves, and I think that 
that cannot be overstated.
    So if we are going to go down this road, that has to be 
foremost in our mind. Giving the VA the time to actually lay 
this out properly is key.
    The draft legislation we are discussing right now as it 
relates to Choice reform has a market assessment component. And 
when we had the roundtable about that draft there was 
discussion about the bill providing for, I think, a year for 
those market assessments, and most people that were part of 
that discussion did not believe a year was really sufficient to 
do that level of market assessment. And the market assessments 
in that Choice reform bill are probably less complex than what 
this BRAC process would require, and yet the draft bill gives 
less than a year to complete the market assessment and lay 
everything out in the groundwork to run out the BRAC process. 
That is clearly something that has to be changed in this draft 
bill.
    I think my colleague from the DAV said something along the 
line of developing the integrated health care network and that 
whole plan for community care access before we go down the BRAC 
road. I think we could have a reasonable debate over whether we 
are putting the cart before the horse or not. Some people would 
say, we do this first and then we know what we have to work 
with. I think we take the position that we should know what the 
VA plans to do in terms of delivering care before we then 
decide what its footprint is going to look like.
    So I think, because we have sort of divorced Choice reform 
and ultimately the plan for community care from this, I think 
we are setting up maybe a fatal flaw in the ultimate design of 
this.
    Lastly, my biggest concern or one of my major concerns is I 
was here when CARES, towards the tail end of CARES as I came to 
work here in Washington. And for those of us who were here 
during that period, CARES did a great disservice to the VA, 
primarily because there was a moratorium for all intents and 
purposes on all new major and minor construction during the 
CARES process. That was a couple-of-years process where nothing 
new got done in VA. And I could envision a scenario where that 
very same philosophy plays out with this bill and that is not 
acceptable.
    I think part of the reason we are in this situation, you 
mentioned Northport. Now, I can't change the fact that it is 90 
years old, that is a fact, but I could also argue that many of 
the reasons why some of these places are not modernized is 
because all the way back then no money was invested in their 
modernization while we decided what the footprint of VA was 
going to be under CARES, and now here we are again.
    So if we are going to go down the road with BRAC--and this 
is BRAC, it doesn't matter whether you say it is or not, this 
is BRAC for VA--if we are going to go down this road, we can't 
then say we are not going to do anything with VA's construction 
until we finish this process, because that is 2 years from now 
and that is not acceptable.
    Mr. Chairman, again, I would like to thank you for the 
opportunity to testify. We would be happy to take any questions 
that you have.

    [The prepared statement of Carl Blake appears in the 
Appendix]

    The Chairman. I thank the gentleman for yielding.
    Mr. Fuentes, you are recognized for 5 minutes.

                  STATEMENT OF CARLOS FUENTES

    Mr. Fuentes. Chairman Roe, Ranking Member Walz, and Members 
of the Committee, on behalf of the men and women of the VFW and 
our Auxiliary, thank you for the opportunity to present our 
views on legislation pending before the Committee.
    The VFW agrees with the intent of H.R. 2773, which would 
require VA to sell Pershing Hall in Paris, France. VA should 
not be in the hotel business, but selling Pershing Hall should 
be more than just simply an effort to no longer own the 
building.
    The VFW is glad the legislation would preserve the history 
of Pershing Hall and the memory of the brave American 
servicemembers who fought in World War I. We urge the Committee 
to explore the option of transferring the building to the 
Army's Armed Forces Recreation Centers who operates hotels 
throughout the world before selling the building to a private 
entity.
    The VFW also agrees with the intent of the Asset and 
Infrastructure Review Act of 2017, and has several 
recommendations to improve it.
    For more than 100 years, the Government's solution to care 
for veterans has been to operate a network of VA facilities 
throughout the country. Many of these buildings must be 
replaced, some of them need to be disposed of, others need to 
be expanded, and they all need to be managed.
    The VA's Strategic Capital Infrastructure Plan, or SCIP, 
identifies VA's current and projected gaps in access, 
utilization and safety. In VA's fiscal year 2018 budget 
request, the estimated cost of closing all these gaps was 55 to 
$67 billion over 10 years.
    The VFW agrees that VA has an insurmountable capital 
infrastructure problem and a systemic realignment of VA assets 
may help in addressing these gaps. However, the VFW has 
historically opposed a BRAC-style process for VA medical 
facilities, because the population VA serves is very different 
than the population served by or stationed in military 
installations.
    When I was in uniform, the Marine Corps could send me where 
they wanted, when they wanted, and I had little to no say about 
it. VA, however, does not have the ability to require veterans 
to move from one location to the other; it has to adjust to 
changes in the veteran population.
    The SCIP process includes plans to address unused or 
underutilized facilities, but the process for approving, 
funding, and implementing the plan is what has led to a $67 
billion backlog. That is why the VFW urges the Committee to 
identify barriers which delay or impede the SCIP process. If 
those issues are not addressed, we will find ourselves in the 
same or worse situation in the future.
    The lack of input from affected veterans has been the 
principal reason previous plans to close or realign VA 
facilities have failed. The VFW is pleased this legislation 
requires the proposed commission to conduct public hearings and 
seek input from veterans impacted by changes, yet it does not 
require VA to conduct such hearings when developing its plan, 
and the VFW believes VA's plan must include input from local 
veterans in order to ensure buy-in.
    Past plans to close VA medical facilities have also failed 
because it would create access gaps to care for veterans.
    In order to avoid repeating those mistakes, the VFW urges 
the Committee to require VA to implement proposed solutions 
before closing facilities or eliminating space. Simply 
purchasing more care from community providers is not an 
acceptable option. Veterans tell the VFW that they want VA to 
hire more doctors and build more capacity.
    Through the Choice Program, we have learned that community 
providers are a great force-multiplier for VA, but it is not a 
panacea of access or quality. This legislation requires and we 
support identifying opportunities to fill access gaps by 
purchasing care, but it does not require VA to evaluate how 
hiring doctors or building new facilities or leasing space 
would correct deficiencies or fill access gaps.
    The VFW also believes that revenue generated from leasing 
or selling existing facilities must be reinvested into 
expanding access to VA care for veterans.
    Mr. Chairman, this concludes my remarks. I am happy to 
answer any questions you or the Members of the Committee may 
have.

    [The prepared statement of Carlos Fuentes appears in the 
Appendix]

    The Chairman. I thank the gentleman for yielding.
    Mr. Wise, you are recognized for 5 minutes.

                     STATEMENT OF DAVE WISE

    Mr. Wise. Chairman Roe, Ranking Member Walz, and Members of 
the Committee, we are pleased to be here today to discuss our 
work related to VA's efforts to align its medical facilities 
and services, as well as our work on DoD's BRAC process. My 
colleague Brian Lepore, who is GAO's expert on the BRAC 
process, is sitting just behind me and will be pleased to 
answer any questions on BRAC.
    VA is one of the largest health care systems in the United 
States, annually providing care to nearly 9 million veterans. 
It is also one of the largest property-holding agencies in the 
Federal Government.
    In 2014, VA reported that its inventory included more than 
6,000 owned and 1,500 leased buildings covering approximately 
170 million square feet of space. A large number of its 
facilities are under-utilized and outdated, creating a variety 
of challenges for alignment. Real property management overall, 
including VA, has been on GAO's high-risk list since 2003.
    Our testimony today is based on our April 2017 report 
examining VA's efforts to align its facilities with veterans' 
needs and on numerous GAO reports related to the BRAC process 
as summarized in June 2011 and March 2012 testimonies. I will 
address two key areas today: one, the factors that affect VA 
facility alignment with the veteran population, and, two, the 
key elements and challenges affecting DoD and the 2005 BRAC 
Commission that could be instructive as the Committee considers 
the proposed legislation before it today.
    As we discussed in our April 2017 report, there are a 
number of factors affecting VA's alignment efforts.
    First, VA projects a 14-percent decrease in the veteran 
population by 2024 and continuing migration to the south and 
west. Second, similar to trends in the health care industry 
overall, VA's model of care continues to shift away from in-
patient to outpatient settings. Third, VA is increasingly 
relying on care provided in the community. Fourth, an aging 
infrastructure means that many VA facilities are not well 
suited to providing care and it is often too costly to 
modernize, renovate, and retrofit older facilities. Fifth, the 
historic status of some 3,000 historic properties adds to the 
complexity of alignment.
    VA has recognized the need to improve planning and 
budgeting to modernize its aging infrastructure and better 
align facilities with veterans' needs. VA's efforts have 
included the Strategic Capital Investment strategies, SCIP 
process, and the VA integrated planning process. However, both 
have limitations.
    VA relies on the SCIP process to plan and prioritize 
capital projects, but limitations such as subjective narrative, 
long timeframes, and restrictive access to information limit 
VA's ability to achieve its goal. VAIP also has limitations. It 
is intended to produce market level service plans for each 
integrated service network and facility master plans for each 
medical facility at a total cost of more than $100 million. A 
limitation to this process is assuming that all future growth 
in services will be through VA facilities, which is unlikely 
given the increasing level of care in the community.
    Additionally, VA has faced stakeholder challenges in its 
facility alignment actions from various groups.
    Finally, VA has not consistently followed best practices to 
effectively engage stakeholders in these decisions or evaluated 
the effectiveness of its stakeholder communication strategies.
    In the April 2017 report, GAO made recommendations related 
to capital planning and stakeholder involvement. VA concurred 
with the recommendations to the extent they were within its 
control and has begun making improvements.
    Regarding BRAC, as Congress evaluates the proposed Asset 
and Infrastructure Review Act, it may wish to consider seven 
elements DoD used in developing recommendations for the BRAC 
commission. First, establish goals for the process.
    The Secretary of Defense developed three primary goals for 
BRAC 2005: Transform the military to be more efficient, promote 
enhanced jointness among the military services, and reduce 
excess infrastructure and produce savings.
    Second, develop criteria for evaluating closures and 
realignments.
    Third, estimate costs and savings to implement 
recommendations. Fourth, establish an organizational structure. 
Fifth, establish a common analytical framework. Sixth, develop 
oversight mechanisms for accountability. And, seventh, involve 
the art of community to better ensure data accuracy.
    Finally, we identified two key challenges that affected 
DoD's elimination of BRAC 2005 and the results achieved. First, 
some transformational type recommendations require sustained 
senior leadership attention and a high level of coordination 
among many stakeholders. This was especially true of 
recommendations where a multitude of organizations had roles to 
play.
    Second, interdependent recommendations complicated 
implementation. The BRAC Commission staff told us it was 
difficult to assess costs and savings since many 
recommendations remained multiple interdependent actions which 
needed to be reviewed. These challenges would need to be 
addressed if VA is to successfully apply a BRAC-like system.
    Chairman Roe, Ranking Member Walz, and Members of the 
Committee, that concludes my statement. Brian and I will be 
happy to answer any questions you may have.

    [The prepared statement of Dave Wise appears in the 
Appendix]

    The Chairman. Thank you, Mr. Wise. Dr. Crump, you are 
recognized now for 5 minutes.

                  STATEMENT OF REGAN L. CRUMP

    Mr. Crump. Chairman Roe, Ranking Member Walz, and 
distinguished Members of the Committee, thank you for the 
opportunity to appear before you today. Joining me today is my 
colleague, Jim Sullivan, the Executive Director of VA's Office 
of Asset and Enterprise Management.
    Today we are prepared to discuss the Committee's draft 
Asset and Infrastructure Review legislation, as well as VA 
efforts already underway to modernize our health care system 
and infrastructure. VA will follow up later with views on H.R. 
2773 regarding Pershing Hall.
    The draft legislative text calls for VA to assess our 
health care markets nationwide, and determine ways to optimize 
the care and services we provide for veterans, and then submit 
recommendations to an appointed commission. The Department very 
much appreciates the Committee for its attention and commitment 
to the effective use of capital assets and delivering high 
quality care to veterans.
    The draft bill includes many thoughtful features that could 
serve as useful benchmarks for the market analysis, which is 
what we will use to gather focused, localized, and objective 
data for decision-making. As to the commission's structure and 
process, many of those requirements concern actions of Congress 
and so we defer to Congress. Regarding details of the draft, we 
would be pleased to follow up with the Committee to provide 
more in-depth comments and technical assistance.
    Now, let me highlight what VA's doing with regard to 
building a high performing health care system.
    One of Secretary Shulkin's top five priorities is modernize 
our systems which includes focusing on system streamlining and 
also infrastructure improvements. The Secretary is committed to 
modernizing our systems and infrastructure by focusing on 
primary care and VA's other foundational services, and the 
facilities where such services are delivered.
    As the Secretary has emphasized, VA is moving forward with 
more efficient and agile management of VA's medical care 
facilities to match capabilities with where veterans live. The 
goal of our upcoming market assessments is to modernize VA's 
health care system using a data-driven approach for matching 
local capacity to local demand, and to create a modern, high-
performing, integrated health care network in each market to 
better serve veterans.
    These networks will be well-connected, comprehensive 
coalitions led by experienced VA managers who will coordinate 
VA health care services complemented, where appropriate, by 
other Federal and private sector providers. We must also 
continue leadership in our research health professions training 
and emergency preparedness missions.
    These assessments are aimed at assessing current and future 
veteran demand for care and all the capabilities of local VA 
providers, DoD treatment facilities, academic affiliates, 
federally qualified health centers, other Federal, state, and 
local partners, as well as our telehealth resources. Achieving 
high-performing networks may require significant capital 
investments, clinical service line adjustments, process 
improvements, some targeted divestments, robust care 
coordination, and smart use of strategic partnerships.
    The plans we pursue will undoubtedly require the continued 
support of Congress, VSOs, and other stakeholders to ensure 
success. In addition to VA's current authorities, we will 
continue to explore ways to leverage and establish additional 
capability and efficiencies with other Federal agencies such as 
DoD and GSA, as well as private sector partners.
    Improved authorities to pursue joint facilities through 
construction and leasing actions will provide greater 
opportunities for VA to deliver 21st century care and services 
to veterans in state-of-the-art facilities nationwide.
    VA recently submitted proposed legislation to the 
Committee, the draft VA CARE, C-A-R-E Act. That bill includes 
proposals to increase the Department's flexibility to meet 
veterans' needs such as increasing the major construction and 
lease thresholds; streamlining requirements for joint facility 
projects; creating VA-DoD pilots for sharing health care 
resources without billing one another; and, expanding VA's 
enhanced use lease authority.
    We must continually adapt to the changing needs of veterans 
we are privileged to serve.
    Mr. Chairman, Ranking Member, and Members of the Committee, 
thank you for the opportunity to testify before the Committee 
today. We are glad to answer any questions regarding the draft 
bill and our approach to building high performing local health 
care systems for veterans.

    [The prepared statement of Regan Crump appears in the 
Appendix]

    The Chairman. Thank you, Dr. Crump. I will yield myself now 
5 minutes. And I feel like I am back on the planning commission 
where I started my political career, except it is on steroids.
    This is a huge undertaking that we are talking about today. 
And my recent trip to Northport, and to Canandaigua, and to 
Rochester a couple weeks ago really helped shape a little bit 
about I think you could make this trip in a lot of different 
areas and find out the same thing.
    One is that we are now developing--and to look at 
Northport, it would take $450 million to invest into that plant 
and facility. And I think we have to look at not only how 
health care is provided today, but how it is going to be, as 
best we can figure it, Dr. Crump, 5, 10, 20, long after we are 
gone, that is what we are planning for now. Not for right now, 
but we are planning for 10 years, 20 years, 30 years what the 
VA is going to look like.
    And I can tell you what it is looking like in the various 
facilities that I go to is that the inpatient hospital beds are 
shrinking, they have dropped dramatically. Sometimes 80, 90 
percent in the VA, but the VA's done exactly the right thing. 
And I don't know what the VA would do today if it hadn't put 
CBOCs out there. I think that is one of the best things they 
ever did.
    And this trip to Canandaigua and Rochester--and I also went 
to Rochester where they were shoveling dirt because of one of 
the leases that we approved on doubling the size of the CBOC 
where very modern health care, and the one they were in was 
just packed that day with patients. And they were at elbow to 
elbow, the providers were, and the veterans were. And I talked 
to many veterans there, and they love the care that they were 
getting at the CBOC.
    So getting that in focus is going to be difficult. And I 
agree with much of what you all said. The timeline, absolutely, 
what the commission looked like, that is all debatable. We can 
get that figured out. What we got to figure out, and this will 
not be an easy undertaking, if we undertake this to do, but I 
think it is necessary to provide the best care for our 
veterans. And, right now, it is not--I can't imagine at my own 
VA at home, if all those patients who were at those CBOCs that 
were driving back on that campus, I can't imagine what it would 
look like.
    So, Dr. Crump, I am going to start with you and go as 
quickly as I can, and then I have got a lot of questions that I 
will submit for the record.
    Does VA support, in general, the draft bill, and will the 
Department be prepared to follow up with the Committee to 
provide more in-depth comments and technical assistance on it?
    Mr. Crump. First and foremost, we would absolutely be 
available to provide additional technical assistance. And with 
regard to the bill, we are not yet clear whether or not there 
is a need for a commission, but there is definitely a need for 
the legislative flexibility to support us in doing a thorough 
analysis. And then we will, obviously, need ongoing support 
from Members of Congress and also from VSOs to implement those 
recommendations from that thorough assessment which is going to 
be based on the health care services we need.
    The Chairman. Well, I can tell you one of my concerns very 
quickly is we had in 2004 when Secretary Principi tried to 
realign, Canandaigua was one of them. The only thing that 
happened, and Carl pointed out, clearly it was--actually it 
harmed the VA, it slowed down the--we absolutely don't want to 
do that. Without question, we don't want to do that again where 
you stop doing everything you should have been doing as far as 
capital projects are concerned. And if that indeed happened, 
that was a huge mistake on all of our parts. We don't want to 
make that mistake again, we learned that.
    Two, once a contract is awarded to begin the local market 
capacity assessment, how long do you estimate it will take to 
complete assessments in all 96 markets? When will VA be able to 
tell us that?
    Mr. Crump. There was a recent issue related to the 
contract. We did award a contract, there is a court order which 
is requiring a 60-day stay. So the earliest that we will know 
whether or not we will be able to proceed with the assistance 
of the contractor is December.
    However, we will be able to start. And what we are 
estimating now is that we would do six VISNs at a time, I think 
we discussed that during the roundtable. There are about 32 
markets in those six VISNs, and to do all of those 
simultaneously, mounting a VA team supplemented by contractors, 
we are now thinking it will probably be about 6 months for that 
group, 6 months for the second group of six VISNs, and then 
another 6 months, so probably 18 months.
    The Chairman. Eighteen months. That was my next question, 
you just answered it, and I appreciate that.
    Ms. Ilem, very quickly, and my time is about to expire, 
your testimony stated that it would be inappropriate and 
counter-productive in trying to reform the delivery of veterans 
health care, for the process to be closed, non-transparent, and 
inflexible.
    But the Act clearly says that the Secretary to propose 
criteria, publish it on the Federal register, have a 30 day 
open public comment period, would require all information be 
used by VA to prepare for facility realignment recommendations 
be available to Congress, the commission, and the Government 
Accountability Office. Would require veterans and VSOs to be a 
part of the AIR commission, and would require that each meeting 
of the commission be open to the public, and that all 
proceedings, information and deliberation, be open to Congress.
    Given that, what aspects of the AIR Act do you think are 
closed and not transparent?
    Ms. Ilem. I think looking back at the CARES process, one of 
the issues that we saw in looking at this legislation that we 
feared is that there is not as much stakeholder involvement 
right from the beginning that we like to see. The biggest 
thing, I think, that, you know, started off on the wrong foot 
was not making veterans feel that they were involved in the 
process from the beginning.
    They felt this was already done, and, yes, we are going to 
listen to you, or listen to what you say, we are going to maybe 
hold a hearing or have one, but not really being involved in 
that process, that decision-making process. Veterans feel this 
is their system, they are committed, they want to help provide 
what they think is best. And I think if as long as you may--
there is a much better effort to do that right up front, and 
that they know what is being talked about and considered, and 
that they have that input from the beginning.
    From New Orleans, the hospital when we were down there, and 
we got to tour it during our national convention, one of the 
things during the tour that really struck me, everywhere we 
went they said, veterans planned and laid out exactly how they 
wanted things in the facility, what was important to them from 
the infrastructure, the layout, everything. And you could 
really see that, you know, they had pride in--that that was 
considered, you know, that had been taken into consideration. 
So I would like to see that.
    The Chairman. Mr. Walz, you are recognized.
    Mr. Walz. Well thank you, Mr. Chairman. I would concur with 
Ms. Ilem. I got the opportunity to see that New Orleans 
facility too, and just randomly stopped a veteran going through 
there and asked him what he thought of the place. He said, ``I 
feel like I built it.'' And which was a really, really 
interesting comment. It is a fabulous facility, certainly 
needed, and I think that process goes a long way.
    It is the front-end piece of this I was going to ask all of 
you and I think you started to answer it in great testimony. To 
think about what should this Committee be doing next? What, to 
build that trust? What, to have the partners truly engaged? 
Because I do think there is alignment.
    We all know this is an opportunity, we have all been 
talking about it, but I do think creating those tools that can 
be used going forward rather than--I keep coming back to the 
snapshot-in-time picture and, you know, if I see that damn gas 
station at Fort Snelling again I will personally just go tear 
it down and we can move on with this conversation, because that 
really doesn't have anything to do with the delivery of this.
    There is not an asset there to sell, it is probably not 
going to save money. But I got to be honest with you, I don't 
really know that for certain, I don't know what the tools are 
going to be delivered.
    So, Dr. Crump, I am going to come to you. I don't know if 
you are at liberty to be able to tell me this. In those three, 
kind of, target markets out there in North Carolina, Georgia, 
and Washington State, you are developing and doing those 
assessments to develop the methodology, are you learning 
anything? I mean, is there something there that starts to get 
us to where we are trying to go?
    Mr. Crump. Yes, sir, we have learned a lot. I mean, the 
whole purpose of the pilot was, as you said, to develop a 
methodology, which I do believe we now have. We have been able 
to outline the steps of that methodology. Some of the things we 
did learn was the type of data and the volume of data that 
needed to be collected.
    We also learned, as has been suggested before, that we need 
to involve stakeholders very early on in the process. We have 
also learned that we need to pull in a variety of assessments 
that had been done in the past, and any ongoing assessments. So 
we have learned a lot about that process.
    We also learned that where we initially started out with 
this being more of a contractor-led, or a consultant-led, 
initiative. We also learned early on, or maybe later in the 
process, that it really must be owned and led by the network 
director and the market leaders for that health care market so 
that they own the recommendations and can advance those.
    We have also learned that, in many instances, the need to 
partner with DoD, with our academic affiliates, there are some 
constraints to doing that and so that is why we talk about some 
legislative flexibilities. So those are some examples of 
lessons learned.
    Mr. Walz. Well, and I would like--I think this next part, I 
think this is our opportunity to think really big. I think 
right now as we are looking at it, we are still pretty narrow 
because the quote from DoD's process on BRAC was ``reduce the 
amount of unneeded property that it owns or leases.''
    Well, when you look into this, that meant building up other 
places, being built up, shifting of assets. There is a whole 
bunch of moving pieces in this, and I think we have to be 
really, really careful, all of us in here, of not seeing this 
process on an ideological spectrum of shrinking government 
versus big government with small government, this is just-right 
size is what we are looking for.
    I still am trying to get my mind wrapped around what is 
that just-right size. So, Mr. Wise, if I could just ask you. 
Your understanding, as our draft stands, is there anything in 
here that allows the VA to consider options such as building 
new infrastructure or leasing space for facilities that are 
more than 100 percent utilized?
    Mr. Wise. Mr. Walz, GAO doesn't have a position on this 
draft legislation. It is not something we have had an 
opportunity to really study or comment on, but, of course, we 
are available to do so.
    But to the point of your question, I think overall the 
question is it is a significant challenge for the Veterans 
Administration to be able to get at the points you were talking 
about in terms of right-sizing, and they realize that.
    And the issue is that if you do implement a BRAC-like 
process, there are a number of things that need to be 
considered. And some of the testimony we have heard today 
alludes to those things. And one of the most important ones, as 
Dr. Crump noted, was bringing in stakeholders and being able to 
engage in effective communication because this was one of the 
key elements that was--has been a real problem with the SCIP 
process and, to a lesser extent, with the other efforts to 
realign VA facilities.
    Mr. Walz. Well, I have got some follow-up, my time is 
coming to end here, but I would encourage all. This is the 
healthy place we need to be. Carl brought up great points about 
we can't move our veterans population around by telling them to 
move to Joint Base Lewis-McChord because we are closing 
something else, it does not work that way.
    But I do think there is an opportunity for us to think 
really, really big on this, and the tools necessary, and the 
assets, and getting this to--so that we are in a continuous 
process of reevaluation with the VA and not chasing our tail 
all the time when things get outdated.
    I yield back.
    The Chairman. I thank the gentleman for yielding. Mr. 
Coffman, you are recognize for 5 minutes.
    Mr. Coffman. Mr. Chairman, I yield back.
    The Chairman. The gentleman yields back. Mr. Takano, you 
are recognized.
    Mr. Takano. Thank you, Mr. Chairman.
    Mr. Wise, in your written testimony you highlighted 
significant cost savings DoD experienced following the five 
BRAC rounds. The majority's leadership is under the impression 
that by mandating VA undertake a similar process, it too could 
save hundreds of millions, if not billions of dollars.
    Now, based on your understanding of the draft legislation 
and the challenges faced by DoD to carry out BRAC rounds, do 
you anticipate VA seeing substantial cost savings?
    Mr. Wise. Congressman, as I mentioned earlier to Mr. Walz, 
we really haven't been able to analyze or study the draft 
legislation. But I think what I will do is I will bring Mr. 
Lepore in because he could tell you some of the issues that 
BRAC faced and how they got to their cost savings.
    And I think it remains to be seen as to how VA goes about 
this process as to whether or not they will be able to realize 
significant cost savings going forward. But let me yield to Mr. 
Lepore who can give you some analysis of the BRAC savings and 
how they came about.
    Mr. Takano. Well, but speaking as--based on the legislation 
before us, you really aren't able to say whether or not there 
would be cost savings. And you are not saying that there 
wouldn't be, but you are not saying that there will be either, 
as of this moment.
    Mr. Wise. Yeah. At this point we are--I am unable to take 
any position regarding this legislation as we just haven't had 
an opportunity to analyze it and study it. But I think the 
points we made in our testimony, in our written statement, 
remain valid that, you know, VA faces significant challenges in 
trying to realign its resources. And those are the kind of 
things we pointed out that will be need to be done in order for 
VA to have any opportunity to realize cost savings going 
forward.
    Mr. Takano. Well, before you yield, I would like to use my 
time, I want to give some of the VSOs a chance to answer a 
question I want to ask. I want to ask you a second question, 
though, and perhaps the colleague could answer on some other 
Member's time. But based on your knowledge of past BRACs, do 
you have any sense of how much it might cost the VA to 
implement any closure or realignment recommendations?
    All right, go ahead.
    Mr. Lepore. Congressman, my name is Brian Lepore, I am a 
Director of Defense Capabilities and Management in the 
Government Accountability Office, I lead the work that we do in 
the Base Realignment and Closure, or BRAC process.
    It is difficult to directly answer that question, but let 
me say this. What we do know from DoD's experience with the 
defense base closure and realignment process, with respect to 
BRAC 2005, DoD is achieving cost savings.
    We have done some analysis, we have reported twice now. DoD 
is achieving net annual recurring savings of about $3.8 
billion.
    Mr. Takano. Okay.
    Mr. Lepore. Because BRAC 2005 cost as much as it did, it 
turned out to cost $35.1 billion to implement, DoD has not 
reached the payback period yet. Next year they will finally 
take BRAC 2005 into the black. So right now we are still in the 
red in a process that started in 2005.
    But if I might, to directly answer your question, we would 
need to know the nature of the recommendations that the VA put 
forward, and we would need to see the cost and savings analysis 
that was the part of that. So that is why it is a little hard 
to directly answer that.
    Mr. Takano. I understand. So just all the more reason for 
us, I think, to proceed very, very, very carefully. Because we 
are not really sure, based on the methodology laid out here, 
that we could achieve cost savings. And it has taken many, many 
years, and you haven't yet, at DoD, hit that payback moment, 
right? I mean, you have had to spend money to close, but the 
savings has been realized very gradually over time, and we 
haven't reached that payback point yet.
    Mr. Lepore. Yes, that is correct. The other point I would 
make that is related to that is the decisions that DoD made 
after the commission had approved the recommendations were 
directly related to the cost.
    In other words, a couple things happened. In several of the 
recommendations DoD omitted costs that were known to be 
incurred such as transferring people from one base to another. 
Indeed, DoD transferred over 120,000 people in BRAC 2005, none 
of those costs were estimated.
    Similarly, decisions that were made later on how to outfit 
the buildings, places like the National GO Spatial Intelligence 
Agency's new campus in Springfield, Virginia, turned out to be 
about $726 million more than originally estimated just for some 
of the military construction type things. So it has to do with 
the decisions that get made in terms of implementing the 
recommendations the commission approved.
    Mr. Takano. Well, thank you very much. My time is up, and I 
do have to move it along. Thank you, sir.
    The Chairman. I thank the gentleman for yielding. Dr. 
Wenstrup, you are recognized.
    Mr. Wenstrup. Thank you, Mr. Chairman. I thank you all for 
being here. I appreciate the input that we have received, I 
appreciate the concerns that people have, and concerns on the 
process. We have concerns on the process as well; we want to 
get this right.
    And I would recommend, as we move forward, if any of your 
groups have members that are practicing physicians or health 
care providers, please bring them into your conversations that 
you are having. I think that is important to bring them 
forward, people that understand the health care business, which 
is really what we are faced with today. And, especially ones 
that are practicing today, whether it is nurses or doctors. You 
know, bring them into the fold as you bring forward your ideas. 
I think that would be helpful to us.
    You know, I consider this an asset review, you know. And we 
want to increase our productivity. And I have seen since I have 
been here, you know, VA will come in and say, well, we are 
producing more as far as patient care. I said, did you increase 
your hours? Yeah. Did you add more doctors? Yes. But did you 
actually take a look at how productive you can and can't be in 
a clinic, for example. To me, this is part of it.
    If we have clinics that have one patient room, that is not 
going to be productive. If we have clinics that need a couple 
medical assistants to make it flow better, and we are not 
looking at that, then we are not increasing our productivity. 
That is all a part of what we are trying to do here.
    Are we operating at maximum efficiency? And that is really 
what it comes down to. It includes your physical structure, 
your ancillary support, all those things come into play. And do 
you have the physical ability within that facility to create 
it? The CBOCs, for example, have been excellent. That is part 
of the modernization, that is part of this review, if you will, 
to actually look and see how effective they may have been in 
providing quality patient care for our veterans.
    So it is a review of logistics and review of providing 
care, and a review of customer service. And I agree, the 
timeline we have may not be right. This is big and this is 
challenging, so it may not be right. But it is a matter of 
looking at what we have and what we don't have, what we need 
and what we don't need. That is really what this is all about.
    And it is based, really, on current markets and future 
markets. We need to look at that. You are right, Mr. Blake, we 
can't move people, that is not the idea here, it is being able 
to fill the needs of the people. So that is part of the market 
review of what we are after.
    And so, you know, when it comes to that, I don't consider 
this to be like a BRAC. We are not going to relocate people, 
right? So it doesn't fit into that same category, I feel, of 
what this Committee and what we should be trying to accomplish.
    You mentioned Northport not having modernization. Well, 
maybe it wasn't modernized because no one did what we are 
talking about doing. Because no one looked at it and said, you 
don't have what you need. This is what we are trying to 
accomplish here.
    So let's work together on really trying to make this about 
logistics, customer service, 21st century care, and do it in 
providing care in a quality fashion and a timely fashion. 
Because we are not out here to snooker anybody, we are out here 
to make a positive difference for the future of our VA health 
care system.
    So I don't really have a question, but I just would like to 
keep all those things in mind and understand what is in the 
heart and soul of this Committee, as I think it is, as we move 
forward. And with that, I yield back.
    The Chairman. I thank the gentleman for yielding. Ms. 
Brownley, you are recognized for 5 minutes.
    Ms. Brownley. Thank you, Mr. Chairman. I wanted to first 
just make a very quick comment on Pershing Hall. And, from my 
perspective, I think that we really do have to dig deeper 
around this issue and we need to really research and dig for 
every possible option that is out there that can hold the 
Pershing Hall's historical value because I think what Mr. 
Takano said and what you said is very, very true.
    And I think we need to get the value, I don't think that we 
should be in the hotel business, I agree with all of that, but 
holding onto a historical facility in some way is really, 
really important. And so exploring historical societies, other 
avenues where we might get the return that we are looking for 
but at the same time holding on, I think, to an important 
historic building that is very important to the history of our 
country. So I just wanted to make that one statement.
    With regard to the other bill that we are discussing. I 
think that the reason why we keep referring to it as a BRAC, it 
is because the language in the bill that we are currently 
looking at right now, understanding that it is a draft 
language, mimics a BRAC process. So, therefore, I think we call 
it a BRAC process.
    I agree with Dr. Westrup that, you know, it should be more 
of an asset review and driving for efficiencies. But I think 
just because of the nature of the language the way it is 
currently written is kind of sending the wrong message, I 
think, out there. That people really do feel like this will be 
a time-a-year process, and it is an up and down vote.
    I do agree with the Ranking Member's opening comments that 
we really--I think the better approach is a much more of a 
continuous approach to this process, that we do have to adapt 
to changing needs, both in veteran migration and changes in 
health care delivery altogether. So that we need to be 
malleable every year in terms of responding to that.
    I think veterans need to be at the table at every part of 
the process. We need their voice, that is critically important. 
And I just feel like if we start in a continuous process, it 
might be less complex in some ways. I sort of envision that 
there are probably, in this whole process, some easier 
decisions that are pretty kind of black and white about maybe 
we don't really need this facility, and it is pretty clear to 
everyone who is looking at this information. And incrementally 
it is going to get more and more difficult.
    So if we are in a continuous mode, I think that we can 
right away sort of address some inefficiencies in identifying 
those that are more or less the easier ones. So I just wanted 
to make that statement. I think that we also are looking in 
this bill how to shut down, get rid of, however you want to 
quantify it, facilities.
    We also have to look at improving the processes for 
expanding facilities and leasing facilities. And leasing 
facilities has been one of my bugaboos, that it is, it has 
taken 2 years to get a new group of leases done, and that we 
need to revert back to the old process where, you know, this 
Committee really does weigh in by resolution on these new 
leases.
    So those two things have to kind of--we have to work on 
both of those issues, I think, simultaneously.
    Right now I think the only question that I have is to the 
Chairman of the Committee, and if you could just help allay 
some of my concerns, I guess, by just trying to let us know how 
you perceive our process in terms of how we will proceed in 
terms of really discussing all of these issues and moving 
forward with changes, or amendments, or whatever. So, Mr. 
Chairman, if you wouldn't mind.
    The Chairman. What I will do, since your time has expired, 
is I will go ahead and let the other Members, so if they have 
somewhere they have to go, and at the end I will address that.
    Ms. Brownley. Terrific. Thank you.
    The Chairman. Mr. Bost, you are recognized.
    Mr. Bost. Thank you, Mr. Chairman.
    You know, earlier this week, and I want to thank the 
Chairman for doing this, both the Chairman and I held a tele-
town hall meeting where we discussed issues specifically to the 
veterans in my districts. During that time we received a call 
from one of the veterans who spoke specifically about the 
assets that is held by the VHA, and many of my constituents in 
the northern part of the district used the VA hospital in Saint 
Louis.
    However, for some in the Metro area, it is still difficult 
to get to Saint Louis. So I guess the question I have is for 
you, Dr. Crump or Mr. Sullivan, whichever, is do you believe--
and I think that we have answered it before but I would like to 
expand on it--that the proposed legislation could lead to 
increased assets of VHA like CBOCs in areas like high veterans 
populations such as at Metro East?
    Mr. Crump. Well, I can't speak to whether or not the 
legislation itself will lead to that, but I can speak to the 
shifting demographics of veterans in the modernization of 
health care. I mean, it is very clear to us, as has been 
shared, that our inpatient care demand is going down like 4 to 
10 percent a year, whereas our outpatient demand for care is 
going up like 10 to 20 percent per year. So that is why we have 
had to add more community-based outpatient clinics, and we will 
continue to provide more ambulatory care.
    The other thing is, telehealth has given us the ability to 
utilize excess capacity in one part of the country to provide 
care in another part of the country. And so it is our definite 
intent to work through VA improving efficiency, partnering with 
DoD, and realigning assets to where the veterans are to deliver 
more care using more outpatient services, fewer inpatient 
services, but also addressing the increased demand for some 
mental health services, and use of ambulatory care and 
telehealth services.
    Mr. Bost. Yeah. That is what we really want. My other 
question here is, basically, to the VSOs. At any time have you 
been discussing with the VA, if we go forward with this, what 
the communications will be with the veterans in the area where 
maybe there is a relocation, maybe there are all of these 
things that occur that they would then have an open 
communication with the veteran to communicate on how their 
services and the way they receive their services might be 
changed? Have you had those conversations?
    Ms. Ilem. I would just say, we have, I think, brought it up 
in terms of this stakeholder engagement and how they would 
communicate and having really effective engagement early on in 
the local communities, that that is important. But also with 
the service organizations so we can help educate, that we can 
help explain, and that we can also get them, you know, where 
they need to be to have their input considered, and look at the 
big picture. So I think we have mentioned it in our discussions 
as these draft bills have been considered.
    Mr. Celli. So I can tell you from The American Legion's 
perspective, we also included that in our written testimony. 
You know, there was a portion of the bill that talks about 
conducting public hearings at every location where there could 
possibly be a reduction in buildings. And, you know, we 
questioned the logic of having a public hearing if it is only a 
storage facility, or if it is a gas station, or if it is 
something that is no longer used. But we absolutely demand and 
require, you know, public hearings where health care is going 
to be affected. And I think that is going to be a critical 
component to this.
    Mr. Blake. Mr. Bost, I think it is no secret that veterans 
in many local communities don't have any idea what the heck is 
going on at their local VA facility, even when they are regular 
users. I mean, I think one of our chief complaints that we hear 
about is there is no effective communication about major 
changes that are going on.
    And so now we are going to go down this road with a process 
where we are going to hope that VA is going to conduct public 
discussion and public interaction with those people in those 
local communities. It doesn't really happen effectively now, so 
it is serious concern we have if we are going to go down this 
road.
    Mr. Fuentes. We will make sure that happens, and we will 
certainly participate in the process to make sure that, you 
know, for the VFW, our members are there or represented. But 
the key is that the plan is what veterans want, right? Because 
often you can listen to them, you can have a hearing, but then 
VA goes a completely different route and that is where you get 
the issue. Right?
    We are a membership-based organization, and if my members, 
VFW members in any particular area aren't happy they are going 
to come to us and they are going to say, do what you can to 
stop it, and that is exactly what I am charged to do.
    Mr. Bost. Okay. My time has expired. I yield back.
    The Chairman. General Bergman, you are recognized for 5 
minutes.
    Mr. Bergman. Thank you, Mr. Chairman. Am I last? I am not 
going to say you saved the best for last, you saved the oldest 
for last. That is how it works.
    You know folks, I have got one simple question, and I am 
going to ask each of you to answer it in a couple sentences. 
And we are going to start right here with Mr. Sullivan. You 
haven't had a chance to talk much today, so this, but simply, 
in a couple sentences, I want you to tell us why we are here 
today.
    Mr. Sullivan. We are here today to look at how we can 
realign our services to provide more efficient and more 
effective health care services to our veterans. And look at 
what are the tools and what are the authorities that we need to 
deliver those to where the veterans are, where they want to 
have it delivered, and what is the best way to deliver it to 
them.
    Mr. Bergman. Okay. Mr. Crump.
    Mr. Crump. I believe and hope that the reason we are here 
today is to figure out how VA, VSOs, and Members of Congress, 
and other stakeholders can work together effectively to make 
sure that we utilize our assets and resources most effectively 
to increase access, improve quality, and also make sure that we 
improve satisfaction of the care that veterans receive. They 
have earned it, and we need to make sure that together we will 
work to make sure that we deliver it.
    Ms. Ilem. I would concur that we hope that we are here to 
collaborate. To listen to each other, to have a voice, have a 
say, be part of the discussion about the future of VA health 
care. I think everybody has the same goal in mind: wanting to 
improve services, ensure veterans are cared for with timely, 
quality health care throughout the country. And this is the 
start of the conversation to help foster that.
    Mr. Celli. I would agree, and I would agree with Mr. 
Sullivan's comments. This is the beginning of the conversation; 
it is not the first one, but it is the beginning of the 
conversation of how to modernize VA with 21st century health 
care for our veterans, and without talking about capital assets 
and infrastructure we can't have that conversation. But we also 
have to make sure that we know where the services are needed. 
So I think that this is a step in the right direction.
    Mr. Blake. We are here to ensure veterans get timely 
quality health care in the best setting and that includes 
making sure VA is properly positioned to deliver that care, or 
is able to work with the community to do so.
    Mr. Wise. Everybody has been so eloquent, it is hard to 
come up with something original. But I think one thing, and a 
couple of the Members have, I think, alluded to this, is that 
it is important that while there can be a lot of really 
positive lessons drawn, or lessons as a whole drawn from BRAC, 
I think it is important not to overstate the BRAC- VA 
connection because their missions are so different, and the 
population is very different. Their needs, and their physical 
locations, and everything that goes about them is so different 
that it is important that it can be used as a learning tool, 
but understand the differences as well as the similarities.
    Mr. Lepore. It seems to me we are here to assist you in 
developing legislation that gets the best possible care to our 
veterans in the most efficient way possible and at the best 
possible cost.
    Mr. Fuentes. I completely agree. I mean, we are here to get 
this right, to make sure that there are no gaps in access to 
care, and that veterans and the care that they receive are 
improved by the outcomes of whatever this Committee passes and 
becomes law.
    Mr. Bergman. Okay. Well, thank you, each of you, for 
putting in your own words because you heard all the Committee 
Members who spoke. We all have our own view and our own words. 
And communication is not what is said, it is what is heard. 
And, you know, in the military we are big on mission statements 
because if you can't write a mission statement concisely, then 
your commanders in the field are not going to be able to 
execute that mission to the success that they need to for the 
positive outcome.
    So, number one, I know you are all in the game, and those 
of us who played in the congressional football game last night 
had a chance to play many different positions, and figure out 
that we were sometimes running in different directions, but we 
are all headed towards the same end zone.
    And I would suggest to you that in the case of, you know, 
the why that we are here today, I just wrote up a quick mission 
statement, this is my version, and that we are all in this 
together because you are here because you are part of this 
large team that has a dog in the fight here. We are all in this 
together to serve our veterans in a forward-thinking way, which 
means we have to shed some of maybe the concepts that we have 
used that maybe are not going to work in the future.
    So in a forward-thinking way that maximizes veteran 
outcomes, and minimizes waste, utilizing limited resources. So 
maximize outcomes, minimize waste, limited resources. So as we 
work together, this is our opportunity to make the change 
necessary for the future.
    I see I am over my time, and I yield back, sir.
    The Chairman. I thank the gentleman for yielding. And the 
mission statement last night of the congressional football team 
was to get into the end zone, which they did not accomplish.
    Mr. Bergman. No.
    The Chairman. So I would point that out.
    I thank the panel for being here. Once again, I think it is 
we are in the beginning of a process, and I appreciate your 
comments, and really appreciate all of you being here and the 
time you have put into it so far. But we are going to continue 
to explore this because it is that important.
    I understand that we have a special guest here today that I 
didn't know at the time, and I will yield to my good friend, 
Tim Walz, to introduce this guest.
    Mr. Walz. Well, thank you, Mr. Chairman. As before my 
closing here, as a point of personal privilege, my wife Quinn, 
a military spouse and so much more, has my 10-year-old son, 
Gus, here. He wanted to believe I really had a job, so he is 
here to see it. So, thank you.
    The Chairman. And have Gus--there he is.
    Mr. Walz. That is Gus. Well, thank you, Chairman. And we 
all know organizations have written mission statements and 
unwritten mission statements. And as the co-captain of that 
football team, the true mission statement was to be walking 
today after that football game. So, General Bergman, 
congratulations on accomplishing that.
    Thank you all for being here. You are partners, friends, 
you represent us who are in your organizations. More 
importantly, you represent those voices of millions of veterans 
and their families who are out there today and can't be here. 
And I would say, once again, it is not just lip service, that 
this Committee is proving that there is no place on Capitol 
Hill or no place, certainly in Federal Government right now, 
where the true spirit of working together, building 
collaboration, and trying to move things forward for our 
veterans is actually happening.
    It is one thing to say that, everybody wants to say that, 
every Committee says we are super bipartisan. Well, move 
things, get things done together, and being bipartisan doesn't 
mean agreeing on everything. But it does, as the General, and 
the Chairman, and so many others have said, it does having the 
common goal. So we know what needs to--we know how this process 
works. First and foremost, all the stakeholders must be 
included and they must be included early, and they must be 
legitimately included with their ideas.
    We must then figure out, using evidence-based decision-
making, put together plans. Legislation is over at legislative 
counsel right now with folks trying to squirrel this. And then 
we need to be pragmatic. Not every four-letter word has four 
letters, and the United States Senate is one of those places. 
And we all know that we have to deal with those places.
    We have to make sure that the Senate is on the same sheet 
of music. We need to make sure, before we do anything, we are 
moving everyone together in the VA. And as we were just 
mentioning up here, that is happening. That is starting to 
happen that people are talking and moving that.
    So nothing is going to be done that violates those basic 
principles. General Bergman laid them out, I think we are all 
pretty much in agreement with that. Highest quality care, good 
stewards of the taxpayer dollars, and thinking about what is 
possible.
    But this is the opportunity. I have been saying it, and, 
General Bergman, you said you were last, I have been there, so 
I know. That was 10 years ago that I was sitting down, it was 
on this side, down in the end, saying we needed to have this 
idea, we needed to think about this.
    I remember all of us saying, those wars have been going on 
for 5 years and could go on a couple years longer. That is what 
we were saying back in 2007, and that is going to create all 
kinds of things moving that we are going to have to think 
about.
    So I am grateful you all are here. Mr. Chairman, I once 
again thank you. There is probably not any more difficult thing 
in the realm of dealing with veterans and veterans issues than 
this topic, and you have done it.
    And to the folks sitting here, your good faith effort to 
approach this is so sincerely appreciated because we have to 
get this right.
    I stick with the statement that I made: time is not on our 
side. This is one of those things that must be dealt with, it 
cannot be kicked down the road. But amongst that, it must be 
done right because we are not going to get another bite at this 
thing. This is one of those where I truly believe the time is 
probably right to try and do something, and it may take a 
little longer than we anticipated, that is fine, but having the 
discussion happens now.
    So thanks to all the Members, thanks for the work.
    And, Mr. Chairman, again, I thank you for your willingness 
to not dodge difficult things, for your willingness to put us 
in things that maybe challenge us and makes us uncomfortable, 
but gets at the heart of what we should do. And I yield back.
    The Chairman. I thank the gentleman for yielding and his 
kind words. I will answer your question, sort of, Ms. Brownley, 
in my closing comments.
    Medicine is changing almost at light speed, and I don't 
think we have even begun to see the changes that are going to 
happen. Dr. Crump mentioned telehealth, precision medicine. We 
are going to see things. And, remember, I was on two VA 
facilities that penicillin had barely been invented and 
discovered when those facilities were opened.
    The facility I had at my hometown was there before there 
were any antibiotics, penicillin, and a hypertensive anything, 
1903. And that facility is still functioning today as an 
outstanding VA medical center, four-star, I think, soon to be a 
five-star medical center.
    As I visited Northport and Canandaigua, I looked at those 
facilities and we were mentioning, I think Mr. Takano mentioned 
about savings, that is not what this is about. It is about 
getting the VA right-sized so it can carry out its mission, 
which is to take care of veterans who have served and were 
injured, or had conditions that occurred because of their 
service to this great country.
    And I looked at, when I went in there, there are two 
buildings that are historic that the roofs had collapsed, and 
it is going to cost $10 million just to destroy those buildings 
because they are on the historic registry, even if you can do 
it. That is just at one center.
    And I asked those folks, I said, look, what do you guys do 
really well here? And they have a great PTSD treatment. I said, 
that is something that you do and you do well at this campus, 
and should--you can inpatient put people--we know that mental 
health is a huge need in this country, and 35, 40 years ago we 
had 500,000 mental health beds in this country, now we have 
less than 50,000. And we see the problem we have now in this 
country of mental health, the needs are not being met. We see 
those in our veteran population.
    So the thing that those injuries that occurred because of 
your service, the VA should focus like a laser beam on. And I 
looked at the five CBOCs they had along Long Island, which is a 
beautiful area, beautiful part of this country if you haven't 
visited. I said, those things should be updated and really 
enhanced, and we should really be putting those resources so 
our veteran doesn't have to drive long distances.
    I go to Rochester, and I see Canandaigua, and I think where 
are the veterans going? Well, they are going where the VA is 
accessible to the most VAs. And that is where you brought up 
and you have leasing, which is going to be a huge part of this. 
And the average lease, and I have done it many times in my 
private practice, is about a 3-year thing too. You 
conceptualize what you want to build and you get your contract, 
you build it, and you move in. VA, it is 9 years, and people 
may have moved by then.
    So they have to be more nimble. We have got to give them 
the tools to do that, that is part of it. We know that we are 
going to vote on our Choice legislation in about 3 weeks. And 
we know that not only is Choice important to get that done, but 
we are going to implement an EHR change which is going to 
change how VA carries out its care at the same time. And that 
is going to be a 6 or 7, or 8-year process. This is a multi-
year process.
    It could be that gathering--and we are going to need to 
know what those networks look like before you can implement the 
Choice Program in October of 2018. And those panels will look 
different as our health care--just like in my own health 
insurance plan, my panel may look different this year than it 
did last year. So that will be a continuum of changes that 
occur.
    And we mentioned, I think, HR was mentioned about staffing 
and hiring. The VA has hired more nurses and doctors and other 
providers, but it certainly has shortages, and that is where 
Choice will help provide those care, where those shortages are 
where VA doesn't have those assets in place.
    If it were me and I were a VISN director, I would clearly 
have a vision about where I want--what I want to do with my 
VISN. And there are many of those, as you all know, across the 
country. And what are my strengths, what are my weaknesses, and 
how can I help amplify my strengths and fill in my weaknesses.
    And in thinking about what is care going to look like and 
one of the reasons that we brought the asset review in is to do 
just that. But we have problems that, politically, and we will 
all admit that we are weak when it comes to our districts. I 
mean, we have a facility in Hot Springs, South Dakota, it is 
really very black and white what should be done and, yet, it 
isn't being done. So that is one of the reasons that we did 
that.
    I think what we need to do--and, first of all, I can't 
thank you enough, I have got a lot of information here and a 
lot of ideas, I just need time to, as we all do, but I think 
that is what we need to do.
    And to Mr. Correa when he mentioned, look, I am a guy that 
believes when I was a mayor of a city and a planning 
commissioner, I don't think you turn over those assets, that 
being property, casually.
    You bring the local community in, can this be used, and I 
will give a perfect example. On our campus at home, at our VA, 
we have a pharmacy school. It is basically a public/private 
partnership, that we built a pharmacy school with private 
donations, it is a state school and it is housed in a rehabbed 
building on the VA campus in Johnson City, Tennessee.
    So those are the visions that we, as leaders, and as 
leaders at the VISN level and at the local community level, 
have to have, I think, to make this actually work. So I look 
forward to sitting down and continuing to work with all of you 
all about how we can get this process done, because I agree 
with Mr. Walz, it is absolutely mandatory that we do it to 
provide the care we need for our veterans.
    And, again, I want to thank you all. And I ask unanimous 
consent that all Members have five legislative days to revise 
and extend their remarks and include extraneous material.
    Without objection, so ordered.
    Hearing is adjourned. Thank you.

    [Whereupon, at 12:24 p.m., the Committee was adjourned.]



                            A P P E N D I X

                              ----------                              

            Prepared Statement of The Honorable Mike Coffman
    Mr. Chairman, I would like to begin by thanking you for including 
my bill in today's legislative hearing and thank the witnesses for 
their testimony.
    Mr. Chairman, I think we can all agree that the VA's sole mission 
is to provide services to our nation's veterans.
    The maintenance of a 5-star, 24-room boutique hotel, restaurant, 
and club in downtown Paris, France is clearly not included in that 
mission.
    Therefore, in an effort to get the VA out of the overseas hotel 
business and focused on its core competencies, I introduced H.R. 2773, 
the Sell Excess Luxury Lodgings (SELL) Act, to authorize the sale of 
this hotel - ``Pershing Hall.''
    Pershing Hall is a building originally procured by the American 
Legion to serve as a memorial to our ``Doughboys,'' who served in 
France during World War I. The building was transferred to the VA in 
1991, and in 1998, the VA leased Pershing Hall for a 99-year period to 
a French firm that redeveloped the property as a luxury hotel.
    In recognition of the historic aspects of Pershing Hall, H.R. 2773 
requires the preservation of architectural details of the exterior and 
interior of the structure, and requires all property of General 
Pershing and the American Expeditionary Forces in France during World 
War I to be transferred to the American Battle Monuments Commission.
    H.R. 2773 also appropriately requires the transfer of sale proceeds 
to the American Battle Monuments Commission for the maintenance of 
cemeteries, monuments, and memorials dedicated to our men and women in 
uniform.
    Mr. Chairman, today you will hear the concern that the fair market 
value will not represent the true value of the property because it is 
encumbered by the VA's lease. Unfortunately, the reality is that the VA 
negotiated a bad, long-term deal that significantly decreased the 
market value of the property. Even more of a reason to get the VA out 
of the hotel business.
    To address this concern, I plan to amend my legislation to require 
a condition of sale be the appraised value of the property.
    While Pershing Hall is probably a terrific hotel, it makes no sense 
that the VA keeps a luxury hotel in Paris on its books. The VA needs to 
focus its time and resources on its core mission: taking care of our 
nation's veterans.
    Mr. Chairman, thank you for allowing me to testify today on behalf 
of this legislation and I yield back the remainder of my time.

                                 
                   Prepared Statement of Joy J. Ilem
    Chairman Roe, Ranking Member Walz and Members of the Committee:
    On behalf of DAV (Disabled American Veterans) I am pleased to 
present our views on draft legislation, the Asset and Infrastructure 
Review Act of 2017, as well as H.R. 2773, regarding the sale of 
Pershing Hall. As you know, DAV is a non-profit veterans' service 
organization comprised of 1.3 million wartime service-disabled veterans 
dedicated to a single purpose: empowering veterans to lead high-quality 
lives with respect and dignity. To help fulfill the promises to the men 
and women who served, DAV advocates for sufficient resources for the 
Department of Veterans Affairs (VA) health care system to include 
funding for and adequate staffing levels and well-maintained, modern 
infrastructure to deliver timely, comprehensive, high-quality care to 
enrolled veterans.
    As the Committee and Congress are aware, the last several years 
have been tumultuous for the VA health care system-but they have also 
resulted in historic opportunities for needed reforms. Following 
revelations of the waiting list scandals and access crisis in the 
spring of 2014, Congress responded by enacting legislation, the 
Veterans Access, Choice and Accountability Act (VACAA), creating the 
temporary veterans Choice program, which the Committee is currently 
working to revise and reauthorize this year. DAV and other veterans 
service organizations (VSOs) supported the temporary Choice program to 
rapidly address access issues, while also working towards long-term 
reforms and solutions to expand access and improve health care 
outcomes.
    Together with our partners in The Independent Budget (IB)-Paralyzed 
Veterans of America (PVA) and Veterans of Foreign Wars (VFW)-we 
developed a Framework for Veterans Health Care Reform in November 2015. 
We recommended the development of integrated networks that combine the 
best of VA and community providers to ensure continuous and timely 
access to care for all enrolled veterans. The IB Framework also 
included the following recommendations regarding VA's infrastructure:

    ``To better align medical care and services with where veterans 
need that care, the IB's framework would require VA to reassess all 
currently proposed and future major construction projects and find ways 
to leverage community resources to identify private capital for public-
private partnerships (P3) as an alternative and more efficient manner 
to build and maintain VA health care facilities. This would enable VA 
to invest in services the community lacks, while ensuring it continues 
to provide specialty care, such as mental health and spinal cord 
injury/disease care, in state-of-the-art facilities. Future capital 
infrastructure expansion would be based on need and demand capacity 
assessments, which would incorporate the availability of local 
resources.''

    DAV and our IB partners have advocated for years to resolve VA's 
many infrastructure challenges, particularly inadequate funding, 
inefficient construction programs, ineffective sharing authorities and 
inflexible leasing authorities. We have consistently argued that VA 
must have the ability to build, buy, lease or share health care 
facilities when and where veterans require them, as well as the 
flexibility to construct, modernize, realign, consolidate or close 
facilities as veterans' needs and preferences change. Most critically, 
VA must be provided sufficient funding to maintain, realign and 
modernize its health care facilities-yet for more than a decade the 
actual appropriations for VA's Major and Minor Construction accounts 
has been woefully inadequate.
    The first finding of the Independent Assessment mandated by VACAA 
was that the root cause of VA's access problems was a ``.misalignment 
of demand with available resources both overall and locally.'' leading 
to the conclusion that ``.increases in both resources and the 
productivity of resources will be necessary to meet increases in demand 
for health care.'' in the future. Specifically, the Independent 
Assessment found that the, ``. capital requirement for VHA to maintain 
facilities and meet projected growth needs over the next decade is two 
to three times higher [emphasis added] than anticipated funding levels, 
and the gap between capital need and resources could continue to 
widen.'' Without change, the estimated gap will be between $26 and $36 
billion over the next decade. For fiscal year (FY) 2018, DAV and our IB 
partners recommended over $2.5 billion for all VA infrastructure 
programs; however, the Administration requested only $990 million. 
Unless this trend is reversed, no VA health care or infrastructure 
reforms can be successful.
    However, it is neither feasible nor advisable to address 
infrastructure issues in isolation from the many other factors involved 
in reforming the delivery of veterans' health care. As both the 
Independent Assessment and the Commission on Care report from June 2016 
concluded, real transformation of the VA health care system will 
require an ``integrated systems approach.'' They recommended that 
reforms necessary in each aspect or domain of VA health care be 
integrated into an overall plan that considers how changes to one part 
of the system affect the whole system. As such, Congress should not 
consider systemic changes to VA's health care infrastructure separately 
without first determining how, when and where VA will deliver health 
care services to enrolled veterans.
    In fact, last week the Committee conducted a roundtable discussion 
on draft legislation to authorize a replacement veterans' Choice 
program that would create a new model of health care delivery 
integrating community providers into VA networks to fill gaps in 
access, similar to the IB Framework proposals. The Senate and VA are 
also working on similar plans and legislation to reform how VA delivers 
care. Those efforts should be merged with efforts to reform VA's 
infrastructure in a plan that is cohesive and that overlaps. For 
example, the draft infrastructure bill under consideration today calls 
for a one-time capacity and market assessment whereas the draft choice 
bill calls for annual assessments. Further, decisions about how to 
structure integrated networks to achieve the optimal balance between VA 
and community providers are both based on and will help determine 
necessary changes to VA's existing health care infrastructure. Given 
the overarching goals of VA health care reform, it is impossible to 
separate how health care is delivered from where it is delivered. 
Therefore, DAV recommends that the two draft bills - one to reform VA 
infrastructure and the other to revise the choice program - be merged 
into a single bill focused on comprehensive reform of the VA health 
care system.
    Furthermore, to ensure the long-term success of VA health care and 
infrastructure reforms, Congress must also address other interrelated 
challenges facing the Department. In addition to adequate and timely 
resources, VA needs to improve its HR policies to recruit, hire and 
retain high-quality personnel, particularly clinicians, as well as 
modernize its IT systems, including the new electronic health care 
record system. Without adequate resources to sustain these critical 
changes and meet all its statutory missions, no legislative reforms 
will be fully successful.
    Mr. Chairman, while we share your intention of providing VA with 
greater control over its infrastructure, there are important changes 
and improvements that need to be made to the legislation to achieve 
that goal.
    As currently drafted, the Asset and Infrastructure Review Act of 
2017, has the same framework as the Defense Base Closure and 
Realignment Act of 1990, legislation enacted to facilitate the closure 
of military installations. Although both involve changes to physical 
infrastructure, there are significant differences between the two 
departments. For example, the Department of Defense (DOD) has 
tremendous flexibility in planning facility locations since military 
personnel can be ordered to relocate. By contrast, VA health care 
decisions are driven by the needs of local veteran populations and 
veterans cannot be compelled to relocate. In a military BRAC (base 
realignment and closure), the most affected stakeholders are local 
communities who benefit from the level of economic activity generated 
by the presence of a military installation. Decisions to close military 
bases in some communities often result in a significant negative 
economic impact to businesses and workers. When VA closes a medical 
facility, the most affected stakeholders are veterans who rely on the 
system for some or all their medical care. Decisions about how and 
where to deliver medical care should never result in veterans losing 
access to care. Additionally, a military BRAC involves national 
security issues and classified data, justifying a need for secrecy, but 
a VA facility review has no similar justification for limiting the 
ability of veterans and the public to have full access to all data and 
deliberations.
    For these and other reasons, the military BRAC process was designed 
to be closed, non-transparent and inflexible to limit the engagement 
and influence of public stakeholders. While this approach may be 
necessary in the context of closing military bases, both for national 
security and political reasons, it would be inappropriate and 
counterproductive in trying to reform the delivery of veterans' health 
care.
    The draft legislation under consideration establishes a very 
specific asset and infrastructure review process modeled closely on the 
BRAC process. The legislation establishes a multi-tiered approval 
procedure that includes the VA Secretary, an independent Commission, 
the President and Congress. First, the Secretary would propose both the 
criteria to be used for making recommendations to modernize, realign, 
consolidate or close VA facilities, and subsequently would propose a 
comprehensive list of facility changes. Next, an independent Commission 
comprised of 11 individuals appointed by the President, after 
consultation with Congress, would review the recommendations using the 
criteria previously established. Based on its independent judgement, 
and with limited public input, the Commission would either approve and 
forward to the President the full list of recommendations, or would 
modify, approve and forward a revised list of recommendations. Next, 
the President would either approve the full list and forward it to 
Congress, or he would disapprove in whole or in part the 
recommendations and return them to the Commission. If returned, the 
Commission would then reconsider and make revised recommendations to 
the President, who would either approve and forward to Congress, or by 
direct action or inaction, disapprove the recommendations, which would 
end the entire process at that point.
    Finally, if recommendations are approved by the President, Congress 
would have 45 days to pass a motion of disapproval of the entire list 
of facility recommendations, otherwise it would be implemented. 
Throughout this multistep review process, there are limited 
opportunities for stakeholder and public review and input, and the 
entire process would take less than two years.
    Mr. Chairman, we have significant concerns about the flexibility 
and timing of the asset review process as currently written in the 
draft legislation. The legislation requires that there be a single, 
comprehensive list of recommendations for all VA facility closings, 
realignments, consolidations or modernizations-essentially an all-or-
nothing proposition. While such inflexibility may have been necessary 
for extremely difficult and politically sensitive base closure 
decisions, it creates more problems than it might resolve for VA health 
care infrastructure decision-making. For example, what happens in the 
years following the completion of this asset review process if 
unexpected veteran migration results in changes in the level of demand 
for care in certain communities, or if community partners disengage 
from VA partnerships due financial or business reasons? Would VA need 
to re-establish another comprehensive asset review process to make 
additional facility decisions?
    Given the rapidly changing nature of medicine and the unpredictable 
market dynamics in the American health care landscape, we believe it is 
essential that VA have the flexibility to quickly adjust and respond to 
market changes to avoid negatively impacting enrolled veterans. Rather 
than a comprehensive, all-or-nothing, one-time infrastructure review 
process, VA needs to have the authority and flexibility to make 
decisions through an iterative process as demand for care and market 
conditions continue to evolve over time. Specifically, we recommend 
that facility recommendations by the Secretary be done in phases, with 
the first phase consisting of buildings and properties that are 
currently unused or significantly underused. The second phase, and all 
additional phases, should be conducted following the completion of 
capacity and market assessments, which should be conducted every couple 
of years, when and where warranted. A phased approach will allow VA to 
quickly eliminate unnecessary facilities and their associated costs, 
while ensuring a more deliberative, flexible and iterative process that 
allows VA's infrastructure to expand or contract as required in each 
individual market across the country.
    DAV also has significant concerns about the timing and duration of 
the various reviews and approvals delineated in the current draft 
legislation. As discussed above, decisions regarding infrastructure 
should be made after decisions are confirmed regarding how, where and 
who will deliver health care in the future, including the development 
of new regional integrated networks and decisions about the role of 
community care. Therefore, the first stage in the asset review process-
establishing criteria for infrastructure changes-should not begin until 
after decisions have been finalized regarding the arrangement of 
regional integrated networks and community care. Second, we recommend 
that the time allotted to the Secretary for proposing criteria be 
extended to no less than six months to allow sufficient time for public 
and stakeholder input, including due consideration of that input, with 
at least an additional 90 days allotted for public comment and review 
before publishing final criteria. Third, we recommend that if the asset 
review process results in an adopted set of recommendations for 
facility changes, the Secretary be required to certify to Congress that 
he has secured the necessary funding, authorities and agreements with 
appropriate community partners, before initiating any actions to close, 
consolidate or realign existing facilities currently delivering care to 
veterans. The Secretary should also be required to certify that no 
enrolled veterans will lose access to health care due to the enactment 
of these recommendations. In addition, the definition of ``modernize'' 
should be amended to specifically include the ``construction, purchase, 
lease or sharing of facilities.''
    Mr. Chairman, DAV is equally concerned about the lack of openness 
and transparency in the proposed asset review process. By using the 
BRAC statute as the starting point for this draft legislation, the bill 
inherited a very closed process regarding information sharing and 
deliberations. For example, although the bill requires that meetings of 
the Commission be open to the public, the legislation specifies that 
``proceedings, information and deliberations'' of the Commission only 
be made available, upon request, to a very limited number of members of 
relevant committees of the House and Senate. While there may have been 
national security reasons for including such limits during a military 
BRAC process, there should be no such concerns for VA facility 
decisions. Therefore, we recommend that the bill be amended so that 
whenever decisions, reports or other information is transmitted or made 
available to the Commission, Congress or the President, it should also 
be made available to the public at the same time.
    Finally, and perhaps most importantly, DAV is concerned about the 
lack of stakeholder engagement throughout the entire asset review 
process, another adverse consequence of modeling the bill on the BRAC 
statute. It is critical that stakeholders who will be most affected by 
the outcomes of this asset review process be fully engaged from the 
beginning. Not only will this result in a better set of decisions, it 
will also help build the support and confidence necessary to enact and 
enforce the recommendations and outcomes of the asset review process. 
Some may recall that another facility review process from 15 years 
earlier-VA CARES (Capital Asset Realignment for Enhanced Services)-was 
met with opposition and was largely ineffective in part due to the lack 
of early and frequent engagement with local veterans from impacted 
communities and national VSOs.
    As demonstrated by recent successful reforms related to appeals 
modernization, the forever GI Bill and accountability legislation, 
engaging stakeholders early and often is essential to successfully 
enacting meaningful reforms. Therefore, DAV recommends that the draft 
legislation be amended to:

      Require the Secretary to consult with VSO stakeholders 
before proposing criteria for the asset review process;
      Require that veteran preferences for receiving health 
care be included among the criteria proposed;
      Require the Secretary to consult with VSO stakeholders, 
including local veterans in each regional market, during the capacity 
and market assessments;
      Require that market assessments consider the unique 
ability of Federal Health Care to retain a presence in rural areas 
where commercial providers may not exist or are at risk of leaving;
      Require that market assessments consider how deficiencies 
may be filled by expanding VA capacity through extended hours of 
operation, increasing personnel or expanding treatment space through 
construction, leasing or sharing of health care facilities;
      Require the Secretary to consult with VSO stakeholders 
before making facility recommendations;
      Require the Secretary, as part of the justification for 
the facility recommendations, to also include information that:

      Details how and where enrolled veterans will receive care 
following facility changes;
      Identifies the resources and authorities necessary to 
achieve the recommended facility changes; and
      Identifies any non-VA partners who will provide care to 
veterans once facility changes are made, including contingency plans 
should VA fail to reach agreement with appropriate partners;

      Require the Commission to hold hearings in all regions 
where closings, consolidations or realignments are proposed by the 
Secretary or the Commission;
      Revise the language requiring each public hearing of the 
Commission to include ``a veteran'' to instead require ``open public 
hearings that allow as many witnesses as possible to testify before the 
Commission, with preference provided to current users of VA health care 
in that region;'' and
      Remove the language requiring witnesses to testify under 
oath, a requirement that does not exist for witnesses at most 
Congressional hearings.

    Finally, DAV believes that any Commission created to review the 
future of VA health care facilities must first and foremost represent 
the interests of the users of that system. Currently, the draft 
legislation would only require that three members of the Commission be 
veterans. We recommend that the draft legislation be amended so that 
the President is required to ``consult with congressionally-chartered, 
membership and resolution-based veterans service organizations 
concerning the appointment of three members'' and that the Commission 
be required to include ``at least six members who are currently 
enrolled in and have used the VA health care system during the 
preceding year.''
    Mr. Chairman, although we have significant concerns with and 
substantial recommended changes to the draft legislation, we share the 
overall goal of modernizing, realigning and right-sizing VA's health 
care infrastructure so that it can deliver timely, high-quality care to 
our nation's ill and injured veterans. We understand that this will 
require difficult decisions about facilities in some locations; 
however, we are convinced that the only way to succeed in this endeavor 
is with a process that is flexible, open, transparent and fully engages 
veteran patients and stakeholders. We are committed to working with you 
and the Committee to achieve our shared goals of reforming, modernizing 
and sustaining the VA health care system so that it can continue to 
meet the needs of enrolled veterans far into the future.

H.R. 2773, Authorization of Sale of Pershing Hall

    This legislation would amend Section 403 of the Veterans' Benefits 
Programs Improvement Act of 1991 by adding at the end a new subsection 
to authorize the sale of Pershing Hall in Paris, France. Pershing Hall 
was dedicated in 1927 to recognize the service and sacrifice of the 
American Expeditionary Forces and the General of the Armies General 
John J. Pershing. In 1935 the building was purchased by the United 
States government, and in 1991 it was transferred to the Department of 
Veterans Affairs (VA). However, since 1998 this building has been 
leased out to a French firm that continues to use this property as a 
luxury hotel.
    This legislation directs that an independent assessment be 
conducted to ascertain the property's fair market value and requires 
that the purchaser preserve the architectural details of the exterior 
and interior of the building. In addition, it directs the Secretary, on 
or before the date of sale, to transfer to the American Battle 
Monuments Commission any pertinent historical property in the 
possession of the Department. The funds received by the Secretary 
pursuant to the sale of Pershing Hall would also be transferred to the 
American Battle Monuments Commission.
    DAV does not have a resolution specific to this issue and has no 
formal position on the bill.
    Mr. Chairman, that concludes my testimony and I would be happy to 
answer any questions that you or Members of the Committee may have.

                                 
                Prepared Statement of Louis J. Celli Jr.
    Chairman Roe, Ranking Member Walz, and distinguished members of the 
Committee on Veterans' Affairs; on behalf of National Commander Denise 
H. Rohan and The American Legion, the country's largest patriotic 
wartime service organization for veterans, comprised of more than 2 
million members, and serving every man and woman who has worn the 
uniform for this country, we thank you for inviting The American Legion 
to testify today and share our position regarding The Department of 
Veterans Affairs' (VA) Asset Infrastructure Review.
 Draft legislation, the Asset and Infrastructure Review - or AIR - Act 
                                of 2017
    VA currently maintains a complex physical infrastructure of 
thousands of buildings that deliver coordinated care to more than nine 
million enrolled veterans. Over the years, many of the buildings VA 
uses to deliver this care have been left to deteriorate in favor of 
fiscal savings, leaving veterans with a collection of aged 
infrastructures. The VA, Veteran Service Organizations (VSOs), 
Congress, and even the Commission on Care have long known that VA needs 
to clean up their physical inventory of properties by: discarding some, 
rehabilitating others, and rebuilding where demand requires it; and 
this rehabilitative process is what needs to happen today.
    Since we are addressing infrastructure, capacity, and fiscal 
responsibility through this legislative discussion draft, The American 
Legion requests that this Committee use this legislation as a vehicle 
to expand VA's leasing authority to avoid future funding and 
jurisdictional hurdles that VA and Congress have struggled with over 
the past four years.
    The American Legion appreciates the Committee recognizing their 
need to support the Secretary as he works toward streamlining and 
organizing the physical property VA is responsible for maintaining. We 
also applaud the Committee for ensuring that VSOs are integral in this 
process through round table discussions, staff meetings, and this 
hearing.
    Comparisons have been made between the proposed Asset and 
Infrastructure Review process contemplated by this draft legislation 
and the Base Closure and Realignment Commission (BRAC) process the 
Department of Defense (DoD) has used to realign and close excess bases. 
It is important to note that BRAC was established because DoD had 
reduced its active duty force from nearly 3.8 million active duty 
personnel following Vietnam, to just over 1.3 million in 2000. This is 
clearly not the case with VA, and the need to restructure is based on 
the need to refurbish and modernize infrastructure so that VA can 
provide 21st century medicine to a growing population of veteran 
patients at a controlled cost with superior results.
    The American Legion fundamentally disagrees with the establishment 
of a commission to oversee or assist the Secretary with structural 
realignment and generally opposes such a recommendation believing that 
the Secretary already has sufficient statutory authority to reorganize 
infrastructure, and would only need some minor legislative assistance 
from Congress, legislative changes that VA has already shared with this 
Committee in the past, and has shared here again today. But if 
establishing a Commission is the only way Congress will agree to 
financially invest in this effort, then The American Legion would 
require the following language be amended as follows;

    1. Page 2, line 8 (A) APPOINTMENT - Change from 11 members to 9 
members with three of those members appointed from Congressionally 
chartered Veteran Service Organizations (VSO). Further, language needs 
to be added that directs ``a quorum must consist of all nine members, 
and all official votes must be ratified by no less than two-thirds of 
the voting members.'' The next acceptable number of Commission members 
would be 12, with no less than 4 members appointed from Congressionally 
chartered VSOs. Additionally, a VSO seat on this commission must belong 
to the VSO, not the individual representing the VSO, and the VSO has 
sole authority to replace its representative at any time; any vacation 
of the seat shall be refilled by the VSO within 10 business days.

    2. Page 3, line 16 (A) veterans, reflecting current veteran 
demographics: This needs to be further defined. Reflecting current 
demographics of VA healthcare patient population is what The American 
Legion would recommend, as this would be the population most affected 
by future changes based on this initiative.

    3. Page 4, line 12 (E): ``at least three members'' needs to be 
increased to ``at least four members'' unless item 1 above is changed 
to nine members.

    4. Page 4, line 15 (d) Meetings - The Commission shall meet only 
during calendar years 2018 and 2019. This should be amended to reflect 
2018, 2019, and 2020 as needed. It is widely believed that VA will need 
at least 18 months to complete the required healthcare market surveys 
before they will be ready to publish the selection criteria as outlined 
in section 403.

    5. Page 6, line 16 (f) PAY AND TRAVEL EXPENSES - The American 
Legion understands that the members to be selected for this Commission 
would represent multimillion dollar organizations as well as other 
senior executives who should be well capable of serving at the pleasure 
of Congress for the sole purpose of volunteering, pride, patriotism, 
and the prestige of serving on this important Commission. It is for 
this reason The American Legion opposes Committee members being paid or 
being enriched in any way as a result of serving on this Commission, 
and that includes the Chair as outlined on page 7, line 3 (B). This is 
not, however, our position on the fulltime support staff as described 
on page 8 line 7 (2) RATE OF PAY.

    6. Page 9, line 13 (C): Strike this section unless there is some 
prohibition as outlined in the Federal Advisory Committee Act. \1\ If 
this Commission were fortunate enough to have an appointee that had 
been instrumentally involved in this process as an employee at VA 
within 12 months of appointment, The American Legion is at a loss to 
understand the logic of how this could possibly present a conflict. On 
the other hand, contractors who would be in a positon to benefit 
financially from the outcome of the Commission's work should be 
excluded.
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    \1\ https://www.gsa.gov/policy-regulations/policy/federal-advisory-
committee-management/legislation-and-regulations/the-federal-advisory-
committee-act

    7. Page 14, line 1 (H): Remove this clause. The Secretary has no 
experience or access to information that would qualify him to make any 
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such determination on any other than his own agency.

    8. Page 14, line 8 (J): insert ``a reasonable sampling of'' before 
``Local''. It would not be feasible for the Commission or the VA to 
conduct public field hearings at every proposed location targeted for 
infrastructure review, especially if the proposed realignment only 
involved a storage or maintenance building. The language should include 
mandatory field hearings for any facility that provides direct medical 
services for the Department.

    9. It needs to be understood that the market analysis as directed 
by the clause in page 14, line 22 (i),(ii),(iii),(iv),(v) will take 
more time than this bill allows for, which is why The American Legion 
recommends extending the dates set forth in this proposed draft to 
dates agreed upon by the Department.

    10. Page 19, line 20 (C) needs to be changed to: The Commission 
``will recommend changes to the Committees of Veterans Affairs of the 
House and Senate''. The American Legion adamantly opposes granting the 
Commission unilateral authority to change or amend the recommendations 
of the Secretary.

    11. A clause needs to be added that prohibits land sold or granted 
to the VA from being included in any recommendations by this Committee 
that would result in violation of a trust, agreement, or deed such as 
would be the case with the property located in West Los Angeles, 
California.

    Without these small but extremely significant changes, The American 
Legion WILL NOT support this bill and will aggressively oppose any 
efforts to allow this bill to move forward.
    Provided these issues can be sufficiently addressed, The American 
Legion would be able to support this effort and further supports the 
overall theme of what this Committee is trying to do - reorganize, 
build capacity, and eliminate waste within The Veterans Health 
Administration at the Department of Veterans Affairs.
    We particularly appreciate that this effort would be led by the 
Secretary of Veterans Affairs, beginning with the establishment of 
selection criteria, through the selection of locations, and including 
the maintenance of funds responsible for carrying out this much-needed 
reform.
    We also fully support the provision starting on page 12, line 21 
(A) & (D) that calls on the Department to establish a market analysis 
for providing healthcare for eligible veterans, and again remind this 
Committee that this market analysis will take time to complete, 
analyze, and implement, and the only realignment that can possibly be 
committed to before this analysis is complete would only involve the 
1,100 structures the Secretary has already identified for disposal. All 
further restructuring will need to be recommended after the healthcare 
market analysis has been completed.
    With an appreciation and understanding of these requirements, The 
American Legion asks this committee to consider structuring this 
project into more than one round of recommendations, allowing VA and 
the Commission to fully develop the research necessary to implement 
this program properly, while allowing sufficient time for proper 
analysis and execution.

The American Legion could support the AIR Act of 2017 with the changes 
    recommended above.

                               H.R. 2773
  To authorize the Secretary of Veterans Affairs to sell Pershing Hall
    Nearly 100 years ago, members of the American Expeditionary Force 
in World War I came together to ``preserve the memories and incidents 
of our associations [in] the Great War[s]'' \2\ and as the 100th 
anniversary of our founding approaches, The American Legion is still 
dedicated to that mission. As such, a primary charge of The American 
Legion is to ensure the sacrifices of America's military is not 
forgotten.
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    \2\ https://www.legion.org/preamble
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    The American Legion fought for the dedication of a memorial 
building in Paris, France, the city where The American Legion was 
formed, to recognize the service and sacrifices of the members of the 
American Expeditionary Forces and General of the Armies John J. 
Pershing. The memorial building was a townhouse in the heart of Paris 
that would become known as Pershing Hall. This memorial was sanctioned 
by resolution at our 1927 National Convention. Eight years later, in 
1935, Congress authorized funds to perpetuate the memorial and transfer 
the building to the United States Government under the auspice of The 
American Legion. In 1991, the building was transferred to the 
Department of Veterans Affairs (VA) with the intent that it would be 
used to ``administer, operate, develop, and improve Pershing Hall and 
its site in such manner as to the Secretary determines is in the best 
interests of the United States, which may include use of Pershing Hall 
to meet the need of veterans. To meet such needs, the Secretary may 
establish and operate a regional or other office to disseminate 
information, respond to inquiries, and otherwise assist veteran and 
their families in obtaining veterans' benefits''. \3\ Unfortunately, 
the building was not used in this manner, but instead, the VA leased 
the building to a boutique hotel on a 99-year long lease.
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    \3\ https://www.congress.gov/bill/102nd-congress/house-bill/1047/
text
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    Through all these actions, it was the hope and wish of The American 
Legion that Pershing Hall retain its original purpose, as a memorial 
and focal point to honor the memories and sacrifices of the men who had 
fought in World War I, and as a location for veterans in the region to 
gain assistance from the VA. Although The American Legion does not 
fully agree with this legislation, we do agree with the bill's sponsor, 
Representative Coffman, that the VA is not capable of appropriately 
maintaining this location while meeting the congressional intent of the 
1991 legislation.
    Currently, the Pershing Hall building, in the prime Paris 
neighborhood of the Champs Elysees, contains a luxury hotel and spa, 
where guests can stay for upwards of $450 to $900 a night. The focus 
and purpose as a place of remembrance seems gone by the wayside. The 
building is available to veterans' organizations three days a year, but 
access seems to be difficult to obtain. When The American Legion asked 
the government to assume control of the building, it was never imagined 
that Pershing Hall would be used for any purpose other than as a 
memorial and VA service office in Paris for those who had served in the 
First World War and subsequent wars.
    This legislation would authorize VA to divest itself of the 
property and transfer the monies resulting from the sale to the 
American Battle Monuments Commission (ABMC). The legislation would also 
provide for the transfer of the artifacts and items associated with the 
building to ABMC.
    The preservation of these artifacts and the history they represent 
is a major concern of The American Legion. The materials deserve to be 
kept together for the original purpose, to honor and remember General 
Pershing and those who fought in World War I. The American Legion wants 
to work with VA or ABMC to ``establish permanent American Legion 
custodianship of the Pershing Hall art, artifacts, furnishings, 
memorabilia and other items so that they can be interpreted for public 
display, and protected from damage or disappearance.'' \4\
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    \4\ https://archive.legion.org/handle/123456789/5798
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    The American Legion has serious concerns with selling Pershing 
Hall. Currently, the building is in a 99-year long lease with a company 
that renovated it to become a hotel. The assessed value, according to a 
report developed by a French appraisal company, values the building 
without the lease at 70 million Euros or 82 million U.S. dollars. 
However, with the current lease in place, the value of the building is 
appraised at 7 to 8 million Euros. The new owner of the building would 
be required to honor the 99-year long lease, which lowers the value 
drastically.
    American Legion representatives in Paris have learned that the 
intent of the hotel owner is to buy the building using ``first rights 
of refusal'' at the assessed value of 7 to 8 Euros when the building 
becomes available for purchase. The owner then wishes to terminate the 
lease once they have ownership of the building. By doing so, they would 
automatically own a building worth 82 million dollars. The American 
Legion has also heard that the intent is to then sell the building, 
with the new value of 82 million dollars, and open a chain of Pershing 
Hall hotels around France.
    Again, when The American Legion transferred ownership of Pershing 
Hall to the Federal government, we never expected this building to be 
used in such fashion. We are disheartened that Pershing Hall is not a 
military memorial or space for veterans to receive information about VA 
benefits but instead a boutique hotel with an owner intent on making 
millions of dollars off the Federal government. We are even more 
concerned with the blatant disregard to the second or third order 
effects of selling this building to a private organization.
    The American Legion believes that Pershing Hall should remain in 
the ownership of the Federal government. We are displeased as to how VA 
decided to use the building but also understand that America, its 
people, and the need for memorials and VA assistance will be around in 
99 years once the lease is terminated.
    If Congress is willing to wait until the lease has ended so that 
veterans will have a location to gain assistance, The American Legion 
is willing to wait as well. To ensure this historical American building 
is protected, we recommend either transferring this building to ABMC or 
amending the statute deriving from Public Law No: 102-86 from:

    ``administer, operate, develop, and improve Pershing Hall and its 
site in such manner as to the Secretary determines is in the best 
interests of the United States, which may include use of Pershing Hall 
to meet the need of veterans. To meet such needs, the Secretary may 
establish and operate a regional or other office to disseminate 
information, respond to inquiries, and otherwise assist veteran and 
their families in obtaining veterans' benefits'', \5\
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    \5\ https://www.congress.gov/bill/102nd-congress/house-bill/1047/
text

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    to:

    ``administer, operate, develop, and improve Pershing Hall and its 
site in such manner as to the Secretary determines is in the best 
interests of the United States, which shall include use of Pershing 
Hall to meet the need of veterans. To meet such needs, the Secretary 
shall establish and operate a regional or other office to disseminate 
information, respond to inquiries, and otherwise assist veteran and 
their families in obtaining veterans' benefits''.

    We would also recommend adding a clause that protects the building 
from sale to a private organization in the future.
    The American Legion is grateful to Representative Coffman for his 
ongoing work with The American Legion and his continued work on behalf 
of veterans, and respects the fact that he is doing what he feels is 
right, as a follow up to ensuring the VA medical Center in Aurora 
Colorado was sufficiently funded, but we cannot support legislation 
that would sell an American monument to a private company, thereby 
losing an American historical monument.
    We feel that this legislation is a short sighted attempt and a 
quick fix to a larger issue within VA, and ultimately by selling the 
building, veterans lose. It is disconcerting and troubling that this 
site could have drifted so far from its initial intended purpose as a 
place of remembrance and history. We look forward to working with 
Congress to find the best outcome for this historic building.
    Using resolution No. 9, Transfer Custodianshipo of Pershing Hall 
Building and Artifacts to the American Battle Monuments Commission, 
which supports legislation to transfer custodianship of the Pershing 
Hall Building and artifacts from the Department of Veterans Affairs to 
the American Battle Monuments Commission (ABMC), and ABMC be directed 
to restore, preserve and display all artifacts from Pershing Hall, 
including those currently in storage, in a dignified and respectful 
manner either in Pershing Hall itself, or in ABMC or other federal 
government properties. Because H.R. 2773 goes against this resolution, 
we cannot support. \6\
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    \6\ The American Legion Resolution No. 9 (2016): Transfer 
Custodianshipo of Pershing Hall Building and Artifacts to the American 
Battle Monuments Commission

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The American Legion opposes H.R. 2773.

                               Conclusion
    The American Legion looks forward to continuing to work closely 
with VA and this Committee on these important issues and we applaud the 
Committee for working with VSOs and VA as partners to ensure that The 
Department of Veterans Affairs is properly structured to meet the needs 
of the 21st century veteran.
    As always, The American Legion thanks this Committee for the 
opportunity to explain the position of the over 2 million veteran 
members of this organization. For additional information regarding this 
testimony, please contact Mr. Derek Fronabarger at The American 
Legion's Legislative Division at (202) 861-2700 or 
[email protected].

                                 
                    Prepared Statement of Carl Blake
    Chairman Roe, Ranking Member Walz, and members of the Committee, on 
behalf of Paralyzed Veterans of America (PVA) I would like to thank you 
for the opportunity to testify on this critical subject. There is no 
doubt that the Department of Veterans Affairs (VA) capital 
infrastructure footprint needs assessment and realignment to properly 
meet the demand for health care across the system. As emphasized in The 
Independent Budget Policy Agenda for the 115th Congress released in 
January of this year, we believe that VA must make a concerted effort 
to right-size its infrastructure, in light of the amount of unused and 
underutilized capacity in the system. To that end, we appreciate the 
Committee conducting the recent round table to bring all stakeholders 
into the discussion about how to proceed with necessary infrastructure 
realignment.
    It is important to note that the Commission on Care addressed the 
need for an asset review process in its final report released in 2016. 
In fact the Commission report explicitly stated:

    Congress should enact legislation, based on DOD's BRAC model, to 
establish a VHA capital asset realignment process to more effectively 
align VHA facilities and improve veteran's access to care. Creating a 
robust capital asset realignment process is vital because previous 
capital divestiture efforts have failed. This process should offer a 
level of rigor far beyond what currently exists for repurposing and 
selling capital assets. It should require VHA to.conduct locally-based 
analyses of capital assets. Information generated would be used to 
assist an independent commission, established under the legislation, in 
making recommendations regarding realignment and capital asset needs. 
The independent commission would conduct a thorough, one-time process, 
to include making site visits and holding hearings to inform 
recommendations that would constitute a proposed national realignment 
plan.The commission would be empowered to implement the recommendations 
unless, within a specified timeframe, Congress disapproves the plan on 
an up or down vote.

    The draft bill presented today suggests that the Committee is 
interested in pursuing this recommendation as outlined in the 
Commission report. However, we cannot emphasize enough that we are not 
convinced that a Base Realignment and Closure (BRAC) modeled concept, 
as previously used by the Department of Defense (DOD) is the most 
effective way for VA to realign its capital footprint. This is the 
position we took on the Commission's recommendation last summer and our 
position has not significantly changed since then. That being said, PVA 
generally supports the intent of this proposal, assuming the intent is 
to right-size the VA and not simply use this opportunity to reduce the 
footprint of VA for the purpose of fulfilling a promise for greater 
community care access and cutting spending.
    If the Committee feels the need to pursue a BRAC process, we 
believe it is imperative that you consider the recommendations offered 
by the participants in that round table last month as you proceed with 
consideration. Unfortunately, this draft bill does not include any 
changes to the original discussion draft that reflects the concerns 
raised by the Government Accountability Office (GAO), the Congressional 
Research Service (CRS), members of the Committee, and veterans' service 
organization (VSO) stakeholders who participated in that round table.
    The fundamental flaw in this proposal is it ignores the most 
important recommendation/point made by the experts from GAO and CRS. 
Representatives from GAO specifically outlined the deliberative process 
that must occur in order to execute an effective BRAC process. The 
steps in that process include:

    1. Establishing clear goals that consider funding and alignment and 
that reflects the priorities of the Secretary.

    2. Developing selection criteria for facilities.

    3. Developing a method to effectively estimate costs and savings.

    4. Establishing the organizational structure (the Department of 
Defense created BRAC teams).

    5. Utilizing a common analytical framework.

    6. Involving audit teams, to include the IG and GAO, to verify data 
accuracy and reliability.

    The key recommendation supporting the entire process outlined above 
is that VA needs sufficient time to plan the process before executing 
it. GAO explained that DOD had fully three years before a BRAC 
Commission was empaneled to consider the infrastructure alignment of 
DOD. Meanwhile, this bill establishes a process whereby the VA will 
complete all of its preparatory work within one year from now and the 
Commission will then submit its final recommendations to Congress 
within six months following that date (by May 2019), effectively giving 
VA and the Commission only 18 months to outline the complete 
realignment of the infrastructure footprint of the Veterans Health 
Administration (VHA). The draft legislation essentially ignores what 
GAO identified as the most critical point to ensure success of this 
process-time. In fact, the most important step of this process as 
identified by GAO and CRS-establishing goals, setting selection 
criteria, and developing the cost methodology-has to be completed by 
March 1, 2018, per the provisions of this draft legislation. Based on 
the recommendations of GAO, a more reasonable assumption for completion 
of that phase would be no sooner than 2019, or as far out as 2020 if 
the DOD model is followed. This bill establishes a timeline that almost 
certainly will doom VA to failure in this process.
    Moreover, this legislation appears to be putting the cart before 
the horse. We strongly believe that VA should have the opportunity 
develop and put into operation its integrated health care network 
before any decisions are made about what the footprint of VA should 
look like. It makes no sense for VA to make decisions about what its 
infrastructure alignment will be without first understanding what its 
capacity to deliver services currently is and how an integrated network 
must be designed to enhance that capability. Central to that effort is 
the completion of a thorough market assessment before the network can 
be fully established and implemented. And yet, this bill presumes that 
VA will conduct a complete market assessment of the entire VA health 
care system by this time next year. The VA itself emphasized the near 
impossibility of that task during the recent round table. GAO and CRS 
similarly expressed concerns with that expectation. In fact, the VA 
only recently finished three pilot market assessments that took several 
months to complete. This bill requires modification to its overall 
timeline in order to accommodate more time for market assessment if the 
Committee wants to ensure there is a thorough and effective asset 
review process. If DOD was given three years to prepare, and the scope 
of the VA health care system is much larger than the footprint of DOD 
bases when its BRAC was conducted, the Committee must extend 
significantly the timeframe established in Section 403 of this proposed 
bill.
    Additionally, the provisions of this legislation that require the 
market assessment are principally focused on how community care can be 
better leveraged to expand capacity rather than how the VA itself can 
build its own internal capacity. Those provisions only seem to affirm 
the notion that community care is the only viable option where lack of 
capacity exists. We respectfully disagree with this assertion.
    We also have serious concerns that fitting a BRAC model to VA 
presumes that the nature of the VA health care system is not 
fundamentally different from the DOD base alignment that was considered 
during its own BRAC process. This proposal ignores the fact that the 
DOD BRAC addressed a static military population and simply consolidated 
and moved units to fit its planned infrastructure alignment. It was 
relatively easy, though not politically, to simply move military 
families to new locations to support the force realignment. This fact 
does not apply to the VA health care system and the population it 
serves. Decisions to close or downsize a VA medical facility will have 
a direct impact on the veteran population being actively served in that 
selected community. That was not a real issue with base, and by 
extension force, realignment in DOD. This is why the market assessments 
will be critical to this process.
    We wonder what the impact of initiating a BRAC process will be on 
current major and minor construction activities at VA. When VA 
initiated its Capital Asset Realignment for Enhanced Services (CARES) 
process nearly 15 years ago, the most devastating result of this 
process was the moratorium placed on virtually all construction for a 
two-year period while the process was conducted. Arguably, the VA's 
infrastructure is in the condition it is in now because no new 
resources were invested in the system during that time. Additionally, 
Congress has compounded that problem every year since that time by 
woefully underfunding the major and minor construction requirements of 
VA. Many facilities are now in serious decline simply because they were 
not upgraded or modernized, and because Congress continues to provide 
inadequate funding for VA's infrastructure needs, and now many of those 
facilities face the possibility of closure because of that neglect.
    With the establishment of an Asset and Infrastructure Review 
Account we believe that Congress will simply ignore its responsibility 
to provide critically-needed funding for ongoing construction projects 
in an effort to wait for the outcome of the Commission. This is an 
unacceptable proposition for PVA. Major and minor construction should 
not be simply put on hold while this BRAC process plays out.
    Reviewing the proposed legislation also begs one other important 
question: why is only VHA being considered in this process and not all 
of VA, to include facilities of the Veterans Benefits Administration 
(VBA) and the National Cemetery Administration (NCA)? The individual 
administrations within VA do not operate separately in their own 
vacuums. They are interconnected and mutually supporting, particularly 
with regards to VHA and VBA. Significant changes to the footprint of 
VHA could obviously have an impact on the other organizations. 
Moreover, if Congress is serious about doing a thorough asset review, 
then perhaps all parts of the VA should be included in that discussion.
    We appreciate the fact that the Committee recognized the objections 
raised about the original version of this legislation presented earlier 
this summer that excluded veterans' service organization involvement in 
the Commission and has since added the requirement that at least three 
of the members of the Commission must come from congressionally-
chartered VSOs. The perspective that VSOs can bring to this process is 
frontline experience with VA facilities. With that in mind, it is 
important that we emphasize that PVA is the only congressionally-
chartered VSO with a National Architecture program that is regularly 
involved in facility design and development at VA. We are the only 
organization that conducts thorough capacity assessments of the VA, in 
particular the spinal cord injury/disease (SCI/D) system of care, on an 
annual basis. We hope that our experience in dealing directly with VA 
in this capacity will be reflected when staffing for the Commission is 
considered.
    With regards to perceived savings from a BRAC process, it is 
important to point out that GAO and CRS both confirmed that DOD did not 
achieve near the projected savings from closure and realignment of its 
facilities. Moreover, the savings that were generated were not realized 
until much later following the process. However, we cannot emphasize 
enough that any savings generated by the asset and infrastructure 
should be reinvested directly into VA, not sent back to the Treasury 
simply for deficit reduction. Savings from this process have the 
potential to generate sorely needed resources to strengthen the VA SCI/
D system of care, and other specialized programs. Many existing SCI/D 
acute care facilities are generally fatigued and in some cases have 
been deemed unsafe by the VA's own facility condition assessment. In 
fact, the existing San Diego SCI/D center, one of the highest volume 
centers in the entire VA health care system, has been deemed unsafe. 
Design and construction projects have been identified to correct these 
essential infrastructure issues yet they remain unfunded.
    In addition, the number of beds dedicated to SCI/D long term care 
on a national level is woefully inadequate. While this BRAC process 
will almost assuredly focus on areas that can be targeted for closure-a 
fact of the DOD BRAC process-serious consideration must be given as a 
part of the process to long term care capacity. While there are some in 
VA leadership who would like to get VA out of the business of long term 
care, this is not an acceptable proposition for PVA and our members. 
The aging SCI/D Veteran population will live longer than past 
generations and is overwhelming the VA system forcing veterans to live 
in institutional nursing facilities that are not designed to safely 
accommodate the special needs of SCI/D veterans. As an example, the VA 
has invested in the design of the new Dallas SCI/D long term care 
center which now needs construction funding to begin addressing this 
pressing need. We wonder what will become of projects such as this 
while this BRAC process is executed across the VA. Moreover, we do not 
want to see this process be used as a means to reduce VA's long term 
care responsibilities.
    In the end, quality, accessible health care continues to be the 
focus for PVA and our partners in The Independent Budget. In order to 
achieve and sustain that goal, large capital investments must be made 
where appropriate. We hope that this will be one of the key outcomes of 
this asset review process.
    Mr. Chairman, I would like to thank you again for the opportunity 
to testify. We look forward to working with this Committee, the VA and 
our partner stakeholders to ensure that the most thorough and effective 
process is carried out in order to best position the VA health care 
system for the future needs of veterans.

                                 
                  Prepared Statement of Carlos Fuentes
    Chairman Roe, Ranking Member Walz and members of the House 
Committee on Veterans' Affairs, on behalf of the women and men of the 
Veterans of Foreign Wars of the United States (VFW) and its Auxiliary, 
I thank you for the opportunity to testify on legislation pending 
before this Committee.

H.R. 2773, to authorize the Secretary of Veterans Affairs to sell 
    Pershing Hall

    Pershing Hall has been owned by the Department of Veterans Affairs 
(VA) since 1991 and is leased as a hotel in Paris, France, until 2097. 
The VFW agrees that VA should not be in the hotel business, but 
disposal of the hotel should be more than simply an effort to no longer 
own the building. The VFW is glad to see that this legislation contains 
requirements to preserve the history of Pershing Hall and the memory of 
the brave American service members who fought in World War I.
    The VFW would, however, recommend this Committee consider amending 
this draft legislation to include language that would call for a 
prospectus that will outline the costs, if any, of breaching the lease 
agreement and the loss of annual revenue that the current lease 
provides. With this financial data, VA and this Committee can more 
clearly see the financial positives and negatives of selling the 
property.
    The VFW also believes that other options must be explored before 
selling Pershing Hall to a private entity. Since it has been turned 
into a hotel, the VFW urges this Committee to explore the possibility 
of transferring the building to the United States Army's Morale, 
Welfare and Recreation Programs Armed Forces Recreation Centers. The 
Army's Armed Forces Recreation Centers operate lodging facilities 
throughout the world, including Korea and Germany.

Draft Legislation, Asset and Infrastructure Review Act of 2017

    This legislation would establish a commission to review and amend 
as needed a VA-generated plan to close, modernize, or realign Veterans 
Health Administration (VHA) facilities throughout the country. This 
legislation is based on the Department of Defense's (DOD) Base 
Realignment and Closure (BRAC) and the Commission on Care's 
recommendation to ``develop and implement a robust strategy for meeting 
and managing VHA's facility and capital-asset needs.'' The VFW agrees 
with the intent of this legislation and has recommendations to improve 
it.
    For more than 100 years, the government's solution to provide 
health care for our military veterans has been to build, manage and 
maintain a network of hospitals across the nation. This model allows VA 
to deliver care at 1,753 facilities, but has left it with more than 
5,600 buildings and 34,000 acres, many of which are past their building 
lifecycle. Many of these facilities need to be replaced, some need to 
be disposed of, others need to be expanded, and all of them need to be 
maintained.
    The process to manage this network of facilities is the Strategic 
Capital Infrastructure Plan (SCIP). SCIP identifies VA's current and 
projected gaps in access, utilization, condition and safety. It then 
lists them in order based on the gap's priority. In VA's FY 2018 Budget 
Submission, the 10-year full implementation plan to close these gaps is 
estimated to cost $55-$67 billion. The VFW does not foresee a future 
where VA receives such sums to address all of its capital 
infrastructure access and safety gaps through its current SCIP process. 
We agree that VA has an insurmountable capital infrastructure problem, 
and a dramatic realignment of its assets may help in addressing safety 
and access gaps to ensure veterans have timely access to the high 
quality, veteran-centric, and comprehensive health care they have 
earned and deserve.
    The VFW has historically opposed a BRAC-style process for VA 
medical facilities because the population VA serves is very different 
from those stationed at and served by military installations. When I 
was in uniform, the Marine Corps could send me where they wanted, when 
they wanted, and I had little to no say about it. That is because the 
nature of our military's obligations and needs change and DOD must 
realign its assets, including personnel, to defend our nation in an 
ever-changing security landscape. VA, however, must adapt to the 
changes in the veterans population and cannot simply require veterans 
to move from one location to another. Rather, it must continuously 
adjust capital assets to the changing veteran population. This requires 
VA to modify, close, or build facilities to adjust to shifts in demand 
on its health care system.
    The SCIP process already addresses the issue of unused or 
underutilized property, but the process for approving, funding and 
implementing the plan is what has led to a $67 billion construction 
backlog. That is why the VFW urges this Committee to require VA to 
identify barriers in the SCIP process which have led to the backlog and 
steps needed to ensure a backlog of access and safety infrastructure 
gaps does not occur after a BRAC-style process is completed. If such 
barriers and issues are not addressed, the proposed recommendations may 
not be implemented. For example, a slow and cumbersome construction 
process impacts VA's ability to complete major construction projects on 
time and on budget. Another example the VFW has urged this Committee to 
correct is the congressional authorization process for major medical 
facility leases. It takes too long for Congress to approve VA leases 
and veterans are directly impacted by VA's delay in executing such 
leases. If these issues are not corrected, we will find ourselves in 
the same or worse situation in the future.
    The Commission on Care recommended a workaround to the lease issues 
that the VFW urges this Committee to consider. It recommended that 
Congress waive budgetary rules requiring offsets for a period of time 
and expanding the enhanced-use lease authority to allow VA to enter 
into needed leases, without accounting for the cost of the entire lease 
in the first year. However, suspending this offset requirement for a 
few years will leave VA in the same position it finds itself today if 
Congress does not find a long-term solution to VA's leasing authority. 
VA also needs broader authority to enter into enhanced-use leases 
agreements. Public Law 112-154 reduced VA's authority to allow for only 
adaptive housing. Returning it to its prior authority will allow VA to 
lease more of its unused or underutilized property, while still 
contributing to VA's mission. The VFW is pleased this legislation 
authorizes VA to use its enhanced-use leases to implement 
recommendations, but it does not amend VA's overall authority.
    The lack of input and buy-in from affected veterans has been the 
principal reason previous plans to close or realign VA facilities have 
failed. The VFW is pleased to see this legislation would require the 
proposed commission to conduct public hearings and seek input from 
veterans who would be impacted by any commission-made changes to VA's 
plan. However, this legislation does not require VA to conduct open 
hearings at medical facilities it plans to realign or close. VA's plan 
must include local veteran input as well. Including impacted veterans 
in the process from the beginning ensures more buy-in, if VA takes 
their concerns and recommendations into account.
    This includes the input from veterans who are eligible or enrolled 
in VA, but do not use VA health care. In the VFW's latest health care 
survey, we asked veterans who do not use VA to tell us why. Veterans 
reported having employer-sponsored insurance, not wanting to take 
appointment slots from veterans who need them more, or problems with 
access which force them to choose other forms of health care coverage. 
VA has testified a number of times that it experiences an increase in 
demand when access to care is improved. If the asset review is 
successful, VA will improve access to care for veterans in every 
community. That is why VA must account for the increase in reliance 
from veterans who have other forms of health coverage, but would begin 
to use VA because of the increase in access or life changes such as 
retirement or employment changes that leave veterans without other 
forms of health care coverage.
    Furthermore, past realignment strategies or plans to close VA 
medical facilities have not failed because of lack of authority. 
Veterans in such communities object to closures because the proposed 
plans create gaps in access to care or do not meet their needs. In 
order to avoid repeating such mistakes, the VFW urges this Committee to 
require VA to implement the proposed solutions before eliminating 
facilities or space. Doing so would ensure veterans do not experience a 
gap in access or continuation of care. Simply purchasing more care from 
community care providers is not an acceptable option. For example, VA 
and Congress cannot expect veterans to wait 10 years for a new facility 
to be built and think VA is able to close the old facility immediately.
    Veterans tell the VFW that they want VA to hire more doctors and 
build more capacity instead of simply turning to community care to fill 
the gaps. Through the Veterans Choice Program, we now know that the 
community is a great force multiplier for VA, but it is not a panacea 
of access or quality. The VFW is concerned that this legislation 
requires VA to identify opportunities to fill access gaps by purchasing 
care through community care providers, but does not require VA to 
include recommendations to hire more providers, build new facilities, 
or lease space to correct deficiencies or fill access gaps. Revenue 
generated from leasing or selling facilities must be reinvested back 
into expanding access to VA care for veterans.
    While the VFW believes that realignment of VA medical facilities 
must be a naturally occurring process based on the needs of each local 
community, we understand that past grassroots efforts have failed and 
that a one-time BRAC-style approach may lead to a better outcome if 
done correctly. That is why VFW thanks this Committee for including 
congressionally chartered and membership-based veterans service 
organizations in the proposed Asset and Infrastructure Review 
Commission. It is vital that a commission be representative of the 
veterans' community and those who use the VA health care system the 
commission is charged with improving. The VFW's health care surveys 
indicate veterans who use VA health care want VA to hire more doctors 
and improve access, while those who do not use it are more likely to 
want to dismantle the system or turn to the private sector rather than 
fixing issues. It is important that any commission charged with 
recommending vast changes to a system millions of veterans rely on for 
their health care has the best interest of veterans in mind--not 
political or financial motivations.
    The VFW is also pleased to see this legislation requires at least 
one commissioner to have experience with capital asset management for 
the federal government. Yet, it does not specify whether the 
commissioner must have experience with VA's capital infrastructure. It 
is vital that at least one commissioner, and preferably more than one, 
have experience with the challenges VA faces in addressing its capital 
infrastructure needs. The VFW has seen previous congressionally 
established commissions lack the subject matter expertise to properly 
identify issues that have a direct impact on commission 
recommendations. If issues with VA's SCIP process are not identified 
and addressed, recommendations regarding the closure, modernization and 
realignment of VHA facilities will not be carried out appropriately.
    Another lesson learned from previous commissions is that making 
far-reaching changes envisioned by this legislation takes time. The VFW 
agrees with comments by the Government Accountability Office, 
Congressional Research Service and VA at the recent roundtable on this 
legislation that the current deadlines set in this legislation do not 
provide sufficient time for VA to develop a well-thought-out plan, the 
commission to evaluate such plan, nor for VA to implement the final 
recommendations. The VFW urges this Committee to expand the timelines 
in the legislation to ensure the process is deliberate and implemented 
correctly.

                                 
  Prepared Statement of David J. Wise, Physical Infrastructure Issues
     Brian J. Lepore, Director, Defense Capabilities and Management
                            VA REAL ROPERTY
    Realignment May Benefit from Adopting Elements of Defense Base 
   Realignment and Closure Process, Provided Process Challenges Are 
                               Addressed
    Chairman Roe, Ranking Member Walz, and Members of the Committee:
    We are pleased to be here today to discuss our work related to the 
Department of Veterans Affairs' (VA) efforts to align its medical 
facilities and services, as well as our work on the Department of 
Defense's (DOD) military Base Realignment and Closure (BRAC) process. 
These efforts are both relevant to challenges the federal government 
faces in real property management.
    VA operates one of the largest health care systems in the United 
States, providing care to more than 8.9 million veterans each year. VA 
is also one of the largest federal property-holding agencies. In 
September 2014, VA's reported inventory included 6,091 federally owned 
buildings and 1,586 leased buildings. However, in recent decades, the 
veteran population and preferences have shifted. VA has recognized this 
shift and the need to modernize its aging infrastructure and align its 
real property assets to provide accessible, high-quality, and cost-
effective services to veterans. Aligning VA facilities to improve 
veteran access to services integrates two of GAO's high risk areas: 
veterans' health care and federal real property. In 2015, GAO placed 
veterans' health care on its High Risk List due to persistent 
weaknesses and systemic problems with timeliness, cost-effectiveness, 
quality, and safety of the care provided to veterans. \1\ In 2003, GAO 
placed federal real property management-including management of VA real 
property-on its High Risk List due to long-standing challenges, such as 
effectively disposing of excess and underutilized federal property. \2\
---------------------------------------------------------------------------
    \1\ GAO, High-Risk Series: An Update, GAO 15 290 (Washington, D.C.: 
February 2015). GAO maintains a high-risk program to focus attention on 
government operations that it identifies as high risk due to their 
greater vulnerabilities to fraud, waste, abuse, and mismanagement or 
the need for transformation to address economy, efficiency, or 
effectiveness challenges. See, for example, GAO, VA Health Care: 
Actions Needed to Improve Newly Enrolled Veterans' Access to Primary 
Care, GAO 16 328 (Washington, D.C.: Mar. 18, 2016) and GAO, VA Mental 
Health: Clearer Guidance on Access Policies and Wait-Time Data Needed, 
GAO 16 24 (Washington, D.C.: Oct. 28, 2015). See also, for example, 
Department of Veterans Affairs, Office of Inspector General, Veterans 
Health Administration, Review of Alleged Patient Deaths, Patient Wait 
Times, and Scheduling Practices at the Phoenix VA Health Care System, 
Report No. 14-02603-267 (Washington, D.C.: Aug. 26, 2014) and VA, 
Department of Veterans Affairs Access Audit, System-Wide Review of 
Access, Results of Access Audit Conducted May 12, 2014, through June 3, 
2014.
    \2\ See GAO, High-Risk Series: Federal Real Property, GAO 03 122 
(Washington, D.C.: January 2003).
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    DOD has repeatedly applied the BRAC process to reduce the amount of 
unneeded property that it owns and leases. DOD has undergone five BRAC 
rounds since 1988 as a means of reducing excess infrastructure and 
realigning bases to meet changing force structure needs. The most 
recent BRAC round in 2005 also provided opportunities for furthering 
transformation and fostering jointness. As a result of these rounds, 
DOD reported that it had reduced its domestic infrastructure and 
transferred hundreds of thousands of acres of unneeded property to 
other federal and nonfederal entities. DOD data show that the 
department generated an estimated $28.9 billion in net savings or cost 
avoidances from the prior four BRAC rounds through fiscal year 2003 and 
expects to save about $7 billion each year thereafter. Regarding the 
2005 BRAC round, we estimated that DOD saved about $15.2 billion from 
fiscal years 2006 through 2011 with an annual recurring savings of $3.8 
billion beginning in fiscal year 2012. These savings reflect money that 
could be applied to other higher priority defense needs as well as 
savings from what DOD estimated it would likely have spent to operate 
military installations had they remained open.
    Our testimony today is based on our April 2017 report examining 
VA's efforts to align its facilities with veterans' needs, and on 
numerous GAO reports related to the BRAC process as summarized in June 
2011 and March 2012 testimonies. \3\ Today's testimony addresses (1) 
the factors that affect VA's facility alignment and the extent to which 
VA's capital-planning process facilitates the alignment of facilities 
with the veterans' population, and (2) the key elements and challenges 
affecting DOD and the Commission in BRAC 2005. For our April 2017 
report, we reviewed VA's facility-planning documents and data and 
interviewed VA officials in headquarters and at seven medical 
facilities selected for their geographic location, veteran population, 
and past alignment efforts. Additional information on our scope and 
methodology is available in our April report. Detailed information on 
our scope and methodologies for our BRAC work can be found in the 
published products, which are cited throughout this testimony. The work 
on which this testimony is based was conducted in accordance with 
generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings and 
conclusions based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our audit objectives.
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    \3\ See GAO, VA Real Property: VA Should Improve Its Efforts to 
Align Facilities with Veterans' Needs, GAO 17 349 (Washington, D.C.: 
Apr. 5, 2017), Federal Real Property: Proposed Civilian Board Could 
Address Disposal of Unneeded Facilities, GAO 11 704T (Washington, D.C.: 
June. 9, 2011), and Military Base Realignments and Closures: Key 
Factors Contributing to BRAC 2005 Results, GAO 12 513T (Washington, 
D.C.: Mar. 8, 2012).

VA's Efforts to Align its Facilities Are Affected by Several Factors 
---------------------------------------------------------------------------
    and Are Impeded by Limitations in Its Capital-planning Processes

Facility Alignment Is Challenged by Shifting Veterans' Populations, 
    Evolving Care Standards, Aging Infrastructure, and Limited 
    Stakeholder Involvement

    Geographic shifts in the veterans' population, changes in health 
care delivery, an aging infrastructure, and limited stakeholder 
involvement affect VA's efforts to align its services and real property 
portfolio to meet the needs of veterans. For example, there has been a 
shift over time from inpatient to outpatient care. This shift will 
likely result in underutilized space once used for inpatient care. In 
such instances, it is often difficult and costly for VA to modernize, 
renovate, and retrofit these older facilities. In June 2017, VA 
reported that its facility inventory includes 430 vacant or mostly 
vacant buildings that are, on average, more than 60 years old, and an 
additional 784 buildings that are underutilized.
    The historic status of some VA facilities adds to the complexity of 
converting or disposing of them. In 2014, VA reported holding 2,957 
historic buildings, structures, or land parcels-the third most in the 
federal government after DOD and the Department of the Interior. In 
some instances, it may be more expensive to renovate than to demolish 
and rebuild outdated facilities. In other cases, however, there may not 
be an option to demolish if these buildings are designated as historic. 
For example, planning officials at four medical facilities in our 
review told us that state historic preservation efforts prevented the 
VA from demolishing vacant buildings, even though these buildings 
require upkeep costs and pose potential safety hazards. (See fig. 1.)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Note: Kerrville VA Medical Center, Kerrville, Texas: These pictures 
show a dwelling formerly used for medical staff housing that has been 
designated as a historic building. The outside of the building shows 
broken windows, missing bricks, and gutters that have nearly detached 
from the building. On the inside, portions of the ceiling have 
collapsed, spraying debris onto the floors and walls.

    VA has also encountered challenges to its facility alignment 
efforts, in part, because it has not consistently followed best 
practices for effectively engaging stakeholders. VA may align its 
facilities to meet veterans' needs by expanding or consolidating 
facilities or services. Stakeholders-including veterans; local, state, 
and federal officials; Veterans Service Organizations; historic 
preservation groups; VA staff; and Congress-often view changes as 
working against their interests or those of their constituents, 
especially when services are eliminated or shifted from one location to 
another. We found that VA has not consistently engaged with 
stakeholders, and, in some cases, this inconsistency resulted in 
adversarial relationships that reduced VA's ability to better align 
facilities with the needs of the veteran population.
    In our April 2017 report, we recommended that VA improve 
stakeholder communication guidance and evaluate its efforts. VA agreed 
with our recommendations and outlined a plan to implement them.

Limitations in VA's Capital-planning Processes Impede Its Alignment of 
    Facilities

    Two of the planning processes VA uses to align its facilities-VA's 
Strategic Capital Investment Planning (SCIP) and the VA Integrated 
Planning (VAIP)-have limitations. \4\
---------------------------------------------------------------------------
    \4\ Established in 2010, the goal of SCIP is to identify the full 
capital needed to address VA's service and infrastructure gaps and to 
demonstrate that all project requests are centrally reviewed in an 
equitable and consistent way throughout VA, including across market 
areas within VA's health care system. Annually, planners at the medical 
facilities develop 10-year action plans for their respective 
facilities, which include projects to address gaps in service 
identified by the SCIP process. Medical facility officials then develop 
more detailed business plans for the capital improvement projects that 
are expected to take place in the first year of the 10-year action 
plan. These projects are validated, scored, and ranked centrally based 
on the extent to which they address the annual VA-approved SCIP 
criteria using the assigned weights.
    Separately, implemented in fiscal year 2011 as a pilot project, the 
VAIP process's goal was to identify the best distribution of health 
care services for veterans; where the services should be located based 
on the veterans' locations and referral patterns; and where VA should 
adapt services, facilities, and health care delivery options to better 
meet these needs as determined by locations and referral patterns.

---------------------------------------------------------------------------
SCIP Process

    VA relies on the SCIP process to plan and prioritize capital 
projects system-wide, but SCIP's limitations-including subjective 
narratives, long timeframes, and restricted access to information-
undermine VA's ability to achieve its goals. For example, the time 
between when planning officials at VA medical facilities begin 
developing the SCIP narratives and when they are notified that a 
project is funded has taken between 17 and 23 months over the past 6 
fiscal-year's SCIP submissions. \5\ (See fig. 2.) As such, VA routinely 
asks its facility planners to submit their next year's planned project 
narratives before knowing if their project submissions from the 
previous year have been funded.
---------------------------------------------------------------------------
    \5\ The scoring of submitted projects includes both narrative 
responses that are evaluated (about one-third of the overall score) and 
data-driven scoring based on gap closure (the remaining two-thirds of 
the overall score).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    (a) Although planning officials at VA medical facilities obtain 
initial information from SCIP about what gaps they need to address, 
they do not officially start developing the narratives until they 
receive a request from VA to submit a project for SCIP scoring and 
approval. Officials from the office that oversees SCIP told us that 
facilities usually have access to the tools for submission about a week 
---------------------------------------------------------------------------
prior to the request date.

    (b) Medical facilities officially find out which major (over $10 
million) and minor construction (under $10 million) SCIP projects are 
approved and will be funded when Congress passes the department's 
budget for that fiscal year. Non-recurring maintenance SCIP projects-
repairs and renovations within the existing square footage of a 
facility that total more than $25,000-are available for funding on the 
first day of the fiscal year for that project's submission because such 
projects have advance appropriations.

    An official from the office that oversees SCIP told us that the 
timing of the budgeting process, which is outside VA's control, 
contributes to these delays. While these aspects are outside of VA's 
control, VA has chosen to wait about 6 to 10 months to report the 
results of the SCIP scoring process to the medical facilities. This 
situation makes it difficult for local officials to understand the 
likelihood that their projects will receive funding. A VA official said 
that for future SCIP cycles, VA plans to release the scoring results 
for minor construction and non-recurring maintenance projects to local 
officials earlier in the process. At the time of our review, however, 
the official did not have a time frame for when VA would do this. 
Although VA acknowledges many of these limitations, it has taken little 
action in response. Federal standards for internal control state that 
agencies should evaluate and determine appropriate corrective action 
for identified limitations on a timely basis. \6\ If VA does not 
address known limitations with the SCIP process, it will not have 
reasonable assurance that SCIP can be used to accurately identify the 
capital necessary to address VA's service and infrastructure gaps.
---------------------------------------------------------------------------
    \6\ See GAO, Standards for Internal Control in the Federal 
Government, GAO 14 704G (Washington, D.C.: September 2014).
---------------------------------------------------------------------------
    In our April 2017 report, we recommended that VA address identified 
limitations to the SCIP process, including limitations to scoring and 
approval, and access to information. \7\ VA concurred with the 
recommendation to the extent the limitations were within its control. 
While VA has taken some actions, the recommendation remains open.
---------------------------------------------------------------------------
    \7\ See GAO 17 349.

---------------------------------------------------------------------------
VAIP Process

    The VAIP process produces a market-level health services delivery 
plan for each Veterans Integrated Service Network (VISN) and a facility 
master plan for each medical facility. VA has estimated the entire 
process to create plans for VISNs and facilities to cost $108 million 
when fully complete. \8\ However, the VAIP process's facility master 
plans assume all future growth in services will be provided directly 
through VA facilities. This assumption is not accurate given that (1) 
VA obligated about $10.1 billion to purchase care from non-VA providers 
in fiscal year 2015 and (2) VA can provide care directly through its 
medical facilities or purchase health care services from non-VA 
providers through both the Non-VA Medical Care Program (referred to as 
``care in the community'' by VA) and clinical contracts. \9\ The Office 
of Management and Budget's acquisition guidance notes that investments 
in major capital assets should be made only if no alternative private 
sector source can support the function at a lower cost. \10\
---------------------------------------------------------------------------
    \8\ VA organizes its system of care into regional networks (VISNs), 
which are responsible for coordination and oversight of all 
administrative and clinical activities within the VISN's specified 
geographic region. As of January 2017, VA officials told us they had 
mostly completed the VAIP process in 6 of the 18 VISNs and had plans to 
start or complete the remaining VISNs by October 2018.
    \9\ VA uses the services of non-VA providers in non-VA facilities 
under the following statutory authorities: 38 U.S.C. Sec. Sec.  1703, 
1725, 1728, 8111, and 8153. The Non-VA Medical Care Program includes 
the Choice Program and Patient-Centered Community Care, among other 
programs. The Choice Program was authorized under the Veterans Access, 
Choice, and Accountability Act of 2014 (Choice Act), which appropriated 
$10 billion for the furnishing of non-VA care when veterans' access to 
VA health care does not meet applicable timeliness or travel 
requirements. Pub. L. No.113-146, 128 Stat. 1754 (2014). VA may 
authorize Choice Program care until such funds are exhausted. Pub. L. 
No. 115-26, Sec.  1, 131 Stat. 129 (2017). Patient-Centered Community 
Care is a nationwide program where VA may authorize non-VA care when a 
VA facility is unable to provide certain specialty care services, such 
as cardiology or orthopedics, or under other conditions. To implement 
the program, VA utilizes two contractors, Health Net and TriWest, to 
establish networks of providers in a number of specialties-including 
primary care, inpatient specialty care, and mental health care.
    \10\ See Office of Management and Budget, Circular No. A-11: 
Preparation, Submission, and Execution of the Budget, July 2016.
---------------------------------------------------------------------------
    In our April 2017 report, we recommended that VA assess the value 
of the VAIP's facility master plans as a facility-planning tool, and 
based on conclusions from the review, to either (1) discontinue the 
development of VAIP's facility master plans or (2) address the 
limitations of VAIP's facility master plans. \11\ VA concurred with the 
recommendation, and in August 2017, VA noted that it has discontinued 
its VAIP facility master plans while VA pursues a national realignment 
strategy, after which it plans to adjust its future facility master 
plans to incorporate pertinent information, including care in the 
community realignment opportunities.
---------------------------------------------------------------------------
    \11\ See GAO 17 349.

Key Elements and Challenges Affecting DOD and the Commission in BRAC 
---------------------------------------------------------------------------
    2005

Key Elements That DOD Used to Develop Its 2005 BRAC Recommendations 
    That Could Benefit VA Asset and Infrastructure Review

    As Congress evaluates proposed legislation for disposing of or 
realigning VA property, it may wish to consider seven elements DOD 
relied on as it developed its recommendations for the BRAC Commission. 
\12\
---------------------------------------------------------------------------
    \12\ After DOD selected its recommendations, it submitted them to 
the BRAC Commission, which performed an independent review and analysis 
of DOD's recommendations. The Commission could approve, modify, reject, 
or add closure and realignment recommendations.

      Establish goals for the process. The Secretary of Defense 
emphasized the importance of transforming the military to make it more 
efficient as part of the 2005 BRAC round. Other goals for the 2005 BRAC 
process included fostering jointness among the four military services, 
reducing excess infrastructure, and producing savings. Prior rounds 
focused more on reducing excess infrastructure and producing savings.
      Develop criteria for evaluating closures and 
realignments. DOD proposed selection criteria, which were made 
available for public comment via the Federal Register. Ultimately, 
Congress enacted the final BRAC selection criteria in law with minor 
modification and specified that four selection criteria, known as the 
``military value criteria,'' were to be given priority in developing 
closure and realignment recommendations. \13\ Further, Congress 
required that the Secretary of Defense develop and submit to Congress a 
force structure plan that described the estimated size of major 
military units needed to address probable threats to national security 
for the 20-year period beginning in 2005, along with a comprehensive 
inventory of global military installations. \14\ In authorizing the 
2005 BRAC round, Congress specified that the Secretary of Defense 
publish a list of recommendations for the closure and realignment of 
military installations inside the United States based on the 
statutorily-required 20-year force structure plan and infrastructure 
inventory, and on the final selection criteria.
---------------------------------------------------------------------------
    \13\ Section 2832 of the Ronald W. Reagan National Defense 
Authorization Act for Fiscal Year 2005, Pub. L. No. 108-375 (2004).
    \14\ Section 3001 of the National Defense Authorization Act for 
Fiscal Year 2002, Pub. L. No.107-107 (2001), amended the Defense Base 
Closure and Realignment Act of 1990, Pub. L. No. 101-510 (1990), to, 
among other things, require DOD to develop a 20-year force structure 
plan as the basis for its 2005 BRAC analysis to include the probable 
end strength levels and major military force units needed to meet the 
probable threats identified by the Secretary of Defense.
---------------------------------------------------------------------------
      Estimate costs and savings to implement closure and 
realignment recommendations. To address the cost and savings criteria, 
DOD developed and used the Cost of Base Realignment Actions (COBRA) 
model, a quantitative tool that DOD has used since the 1988 BRAC round 
to provide consistency in potential cost, savings, and return-on-
investment estimates for closure and realignment options. We found the 
COBRA model to be a generally reasonable estimator for comparing 
potential costs and savings among alternatives. (See fig. 3.)

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    As with any model, the quality of the output from COBRA was a 
direct function of the data DOD included in the model. Also, DOD's 
COBRA model relied to a large extent on standard factors and averages 
and did not represent budget quality estimates that were developed once 
BRAC decisions were made and detailed implementation plans were 
developed. Nonetheless, the financial information provided important 
input into the selection process as decision makers weighed the 
financial implications-along with military value criteria and other 
considerations-in arriving at final decisions about the suitability of 
various closure and realignment options.

      Establish an organizational structure. The Office of the 
Secretary of Defense emphasized the need for joint cross-service groups 
to analyze common business-oriented functions. For the 2005 BRAC round, 
as for the 1993 and 1995 rounds, these joint cross-service groups 
performed analyses and developed closure and realignment options in 
addition to those developed by the military departments. Our evaluation 
of DOD's 1995 BRAC round found that few cross-service recommendations 
were made, in part because of the lack of high-level leadership to 
encourage consolidations across the departments' functions. In the 1995 
BRAC round, the joint cross-service groups submitted options through 
the military services for approval, but few were approved. \15\ The 
number of approved recommendations that the joint cross-service groups 
developed significantly increased in the 2005 BRAC round. This increase 
was, in part, because high-level leadership ensured that the options 
were approved not by the military departments but rather by a DOD 
senior-level group, known as the Infrastructure Steering Group. As 
shown in figure 4, the Infrastructure Steering Group was placed 
organizationally on par with the military departments.
---------------------------------------------------------------------------
    \15\ GAO, Military Bases: Lessons Learned From Prior Base Closure 
Rounds, GAO/NSIAD 97 151 (Washington, D.C.: July 25, 1997).

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

      Establish a common analytical framework. To ensure that 
the selection criteria were consistently applied, the Office of the 
Secretary of Defense, the military departments, and the seven joint 
cross-service groups first performed a capacity analysis of facilities 
and functions. Before developing the candidate recommendations, DOD's 
capacity analysis relied on data calls to hundreds of locations to 
obtain certified data to assess such factors as maximum potential 
capacity, current capacity, current usage, and excess capacity. Then, 
the military departments and joint cross-service groups performed a 
military value analysis for the facilities and functions based on 
primary military value criteria, which included a facility's or 
function's current and future mission capabilities, physical condition, 
ability to accommodate future needs, and cost of operations.
      Develop BRAC oversight mechanisms to improve 
accountability for implementation. In the 2005 BRAC round, the Office 
of the Secretary of Defense for the first time required the military 
departments to develop business plans to better inform the Office of 
the Secretary of Defense of the status of implementation and financial 
details for each of the BRAC 2005 recommendations. These business plans 
included: (1) information such as a listing of all actions needed to 
implement each recommendation; (2) schedules for personnel relocations 
between installations; and (3) updated cost and savings estimates by 
DOD based on current information. This approach permitted senior-level 
intervention if warranted to ensure completion of the BRAC 
recommendations by the statutory completion date.
      Involve the audit community to better ensure data 
accuracy. The DOD Inspector General and military department audit 
agencies played key roles in identifying data limitations, pointing out 
needed corrections, and improving the accuracy of the data used in the 
process. In their oversight roles, the audit organizations, which had 
access to relevant information and officials as the process evolved, 
helped to improve the accuracy of the data used in the BRAC process and 
thus strengthened the quality and integrity of the data used to develop 
closure and realignment recommendations. For example, the auditors 
worked to ensure certified information was used for BRAC analysis and 
reviewed other facets of the process, including the various internal 
control plans, the COBRA model, and other modeling and analytical tools 
that were used in the development of recommendations.

Key Challenges Affecting DOD and the Commission in BRAC 2005

    We identified two key challenges that affected DOD's implementation 
of BRAC 2005 and would need to be addressed for VA to adopt a BRAC-like 
process for its asset and infrastructure review.

      Some transformational-type BRAC recommendations required 
sustained senior leadership attention and a high level of coordination 
among many stakeholders to complete by the required date. 
Implementation of some transformational BRAC recommendations-especially 
those where a multitude of organizations had roles to play to ensure 
the achievement of the goals of the recommendation-illustrated the need 
to involve key stakeholders and effective planning. For example, the 
Defense Logistics Agency committed sustained high-level leadership and 
included relevant stakeholders to address implementation challenges 
faced with the potential for disruptions to depot operations during 
implementation of the BRAC consolidation recommendation. \16\ To 
implement the BRAC recommendations, the agency had to develop strategic 
agreements with the services that ensured that all stakeholders agreed 
on its plans for implementation, and had to address certain human 
capital and information technology challenges.
---------------------------------------------------------------------------
    \16\ GAO, Military Base Realignments and Closures: DOD Needs to 
Update Savings Estimates and Continue to Address Challenges in 
Consolidating Supply-Related Functions at Depot Maintenance Locations, 
GAO 09 703 (Washington, D.C.: July 9, 2009).
---------------------------------------------------------------------------
      Large number of actions and interdependent 
recommendations complicated the implementation process. The large 
number and variety of BRAC actions presented challenges during 
implementation. The BRAC 2005 round had more individual actions (813) 
than the four prior rounds combined (387). The executive staff of the 
Commission told us that it was more difficult to assess the costs and 
the amount of time for the savings to offset the implementation costs 
since many of the recommendations contained multiple interdependent 
actions, all of which needed to be reviewed. Specifically, many of the 
BRAC 2005 recommendations were interdependent and had to be completed 
in a sequential fashion within the statutory implementation period. In 
cases where interdependent recommendations required multiple 
relocations of large numbers of personnel, delays in completing one 
BRAC recommendation had a cascading effect on the implementation of 
other recommendations. Specifically, DOD had to synchronize the 
relocations of over 123,000 people with about $24.7 billion in new 
construction or renovation. Commission officials told us that in prior 
BRAC rounds each base was handled by a single integrated 
recommendation. However, in BRAC 2005, many installations were 
simultaneously affected by multiple interconnected BRAC 
recommendations. Given the complexity of interdependent 
recommendations, the Office of the Secretary of Defense required the 
military departments and defense agencies to provide periodic updates 
on implementation challenges and progress.
    Chairman Roe, Ranking Member Walz, and Members of the Committee, 
this concludes our prepared statement. We are happy to answer any 
questions related to our work on VA's efforts to align its medical 
facilities and services or on DOD's BRAC process.

GAO Contact and Staff Acknowledgments

    If you or your staff members have any questions concerning this 
testimony, please contact David Wise at (202) 512-2834 or [email protected] 
regarding federal real property, or Brian Lepore at (202) 512-4523 or 
[email protected] regarding the BRAC process. Contact points for our 
Offices of Congressional Relations and Public Affairs may be found on 
the last page of this statement. Other individuals who made key 
contributions to this testimony include Keith Cunningham, Assistant 
Director; Gina Hoffman, Assistant Director; Tracy Barnes; Jeff Mayhew; 
Kevin Newak; Richard Powelson; Malika Rice; Jodie Sandel; Eric Schwab; 
Amelia M. Weathers; and Crystal Wesco.

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7814, Washington, DC 20548

                                 
            Prepared Statement of Regan L. Crump, MSN, DrPH
    Thank you, Chairman Roe, Ranking Member Walz, and Members of the 
Committee, for the opportunity to appear today to discuss the 
Department of Veterans Affairs' (VA) plans for modernizing our health 
care system and infrastructure, and optimizing the care we provide for 
Veterans through high-performing integrated networks. The Committee 
recently added to today's agenda H.R. 2773, to authorize the Secretary 
of Veterans Affairs to sell the property known as Pershing Hall. VA has 
not had sufficient time to include views on this bill in this 
statement, but will be glad to follow up with the Committee.
    The draft legislative text in the Asset, Infrastructure and Review 
Act of 2017 calls for VA to assess its health care markets nationwide 
and determine ways to optimize its care and services for Veterans, and 
then submit its recommendations regarding closure, modernization, or 
realignment of its facilities to an appointed Commission. The draft 
legislation provides that the Commission may change recommendations 
provided by the Secretary prior to submitting its written report of 
findings and conclusions to the President. If the President approves 
the Commission's final recommendations, they are presented to Congress 
to be considered through a resolution and voting process.
    The Department appreciates the Committee for its recognition and 
commitment to delivering quality care to our Veterans. The draft bill 
includes many thoughtful features that could serve as useful benchmarks 
for the critical market analysis needed to guide focused, localized and 
objective data for decision-making. VA would like to follow up with the 
Committee to provide more in-depth comments and technical assistance. 
As for the Commission, VA defers to Congress for a process it would 
establish for its own consideration of recommendations.
    As the Secretary has emphasized, VA is moving forward with more 
efficient and agile management of VA's medical care facilities to match 
where Veterans live. This is a critical element of VA's modernization. 
In concert with the draft legislation, I would like to discuss how VA 
is moving forward to improve our services and infrastructure, and 
highlight some opportunities that will enhance VA's ability to serve 
our Nation's Veterans.

VA Health Care System

    VA's mission is distinct from other Federal agencies in that we 
operate the Nation's largest integrated health care system, with more 
than 1,500 health service delivery sites, including hospitals, clinics, 
community-living centers, and residential treatment facilities. 
Additionally, VA administers a variety of benefits and other services, 
and operates 135 national cemeteries nationwide.
    One aspect of VA that distinguishes us from large private-sector 
health systems is that the average age of VA-owned buildings is 
approaching 60 years.
    Managing infrastructure of that age poses complex challenges and 
requires a significant amount of resources. It requires a great deal of 
internal and external coordination and collaboration to modernize a 
system of that nature, while adjusting to constantly changing Veteran 
demographics across the country.

VA Capital Infrastructure

    One of Secretary Shulkin's top five priorities is ``Modernizing 
(VA) Systems'' which includes focusing on infrastructure improvements 
and streamlining. In support of this priority, VA identified 430 
individual vacant buildings totaling 5.9 million gross square feet that 
are geographically dispersed through VA campuses nationwide. On June 
20, 2017, the Secretary announced VA's plans to initiate disposal 
through demolition, sale or transfer; or reuse actions for these vacant 
buildings over the next 24 months. These buildings are not being used 
to serve Veterans; and the $7 million in annual capital and operating 
expenses currently used to maintain these vacant buildings can be 
better utilized to support VA's mission. Since June 2017, we have 
repurposed or disposed of 110 buildings, and VA is on track to meet the 
goal of initiating disposal or reuse actions for all 430 buildings by 
June 2019, which was our original goal. VA will review the 
approximately 780 underutilized buildings in VA's inventory to 
determine if additional efficiencies can be identified to be reinvested 
in Veterans' services.

Modernization and Foundational Services

    The Secretary has made a commitment to modernize our systems and 
infrastructure by focusing on primary care and VA's other foundational 
services and the facilities where such services are delivered. By 
foundational, I refer to those services that have been tailored to meet 
the needs of the men and women who have served our country, many of 
whom have experienced the physical and mental wounds of war. Such 
services often cannot be provided in the community with the level of 
quality, understanding, and intensity that Veterans receive when these 
services are provided by VA. Along with these foundational services, VA 
plans to ensure that Veterans continue to have the ability to receive 
those services contained in the benefits package available under 
applicable law.

Commission on Care

    VA agreed with the Commission on Care observation that VA should 
determine the optimal mix of health care services to meet Veteran needs 
at the market level, before realigning its infrastructure to leverage 
non-VA health care resources that are available in local communities to 
complement VA care. VA also agreed with the Commission's assessment 
that VA would need broader authorities and tools to optimize VA's 
capital assets.

Way Forward - Market Area Optimization for High Performing Networks

    In response to the Commission on Care, and the Fiscal Year (FY) 
2015 Appropriations Bill requiring a National Realignment Strategy, VA 
has developed a methodology to objectively assess its health care 
demand and service-delivery capacity in each of our health care 
system's 96 markets. The methodology is a rigorous, analytic approach 
developed and validated through the recent pilots. We believe this 
data-driven eight-step methodology is sound and reflects a population-
based approach to improving the health and wellbeing of our enrolled 
Veterans.
    The goal of future assessments will be to modernize VA's health 
care system, using this data-driven approach for matching local 
capacity to local demand and to create a modern, high-performing 
integrated health care network in each market, to better serve Veterans 
now and in the future. The methodology assesses current and future 
Veteran demand for medical care, and all the capabilities of local VA 
providers, Department of Defense (DoD) treatment facilities, academic 
affiliates, Federally Qualified Health Centers, other Federal, State, 
and local partners, and telehealth resources. We recently awarded a 
contract to secure private-sector experts to support our market-
assessment teams led by Veterans Integrated Service Networks. However, 
the contract award is now the subject of ongoing legal action which 
delays implementation of market assessments until at least December 1, 
2017.
    The intended outcome of these assessments, once started, is a plan 
for a high- performing health care network in each market. These 
networks will be well-connected, comprehensive, coalitions led by 
experienced VA managers who will coordinate VA health care services, 
complimented where appropriate by DoD treatment facilities, academic 
affiliates, Federally Qualified Health Centers, and other suitable 
community providers. We will also continue to fulfill our research, 
health professional training, and emergency preparedness missions.
    Achieving high performing networks may require significant capital 
investments, clinical service-line adjustments, process improvements, 
some targeted divestments, robust care coordination, and smart use of 
strategic partnerships. The plans we pursue will undoubtedly require 
the continued support of Congress, Veteran Service Organizations 
(VSOs), and other stakeholders to ensure success.

Expanded Strategic Partnerships

    In addition to VA's current authorities to manage and reconfigure 
its vast real property portfolio, VA will continue to explore ways to 
leverage and establish additional capability and efficiencies with 
other Federal agencies, such as DoD and the General Services 
Administration, as well as capabilities and efficiencies with private-
sector partners. Improved authorities to pursue joint facilities with 
DoD, as well as with private-sector, non-profit partners through 
construction and leasing actions, will provide greater opportunities 
for VA to deliver 21st Century care and services to Veterans in state-
of-the-art facilities, nationwide.
    DoD is an extremely important partner for VA because, they already 
care for over 2 million Veterans, including Veterans who are military 
retirees under the TRICARE program, in addition to all the brave men 
and women who will be tomorrow's Veterans. We welcome legislative 
flexibilities to work with DoD and other partners in a manner 
consistent with the President's interagency management and agency 
reform agenda, and encourage enhanced continuity of care, joint 
purchasing, and shared capital investments.

Support from Congress

    In order to modernize the health care system, continued support 
from Congress is needed. As the Secretary stated at his recent FY 2018 
budget hearings, VA's budget submission includes proposed legislative 
requests that, if enacted, will increase the Department's flexibility 
to meet Veteran's needs. VA included proposals to: (1) increase the 
threshold for minor construction projects from $10 million to $20 
million; (2) modify Title 38 to eliminate impediments to joint facility 
projects with DoD and other Federal agencies; and (3) expand VA's 
Enhanced Use Lease authority to afford VA improved capabilities to 
manage and leverage its real property portfolio. Enactment of these 
authorities will be critical to modernizing VA's health care system in 
accordance with the demands of younger Veterans and changes needed in 
all health care systems across the country. We must remain perpetually 
agile, so we can continually adapt to the changing needs of the 
Veterans we are privileged to serve.

Conclusion

    We welcome and need the support of Congress, VSOs, State and local 
departments of Veterans Affairs, other Federal agencies, and the media. 
Working together, and with the necessary flexibilities to modernize, we 
will be able to achieve the optimal mix of services and infrastructure 
needed to provide high-quality care, readily accessible services, and 
outstanding benefits for our Nation's Veterans. The Department will 
keep the Committee informed as progress is made and as barriers are 
encountered.
    Mr. Chairman, Ranking Member, and Members of the Committee, this 
concludes my statement. Thank you for the opportunity to testify before 
the Committee today.
    Mr. Sullivan and I are here to learn all that we can, and we are 
happy to respond to any questions you may have.

                                 
                        STATEMENT FOR THE RECORD
                  CONCERNED VETERANS FOR AMERICA (CVA)
Draft Legislation - The Asset and Infrastructure Review Act of 2017

A bill to establish an independent commission to review and re-align 
    the Department of Veterans Affairs's current infrastructure.

    The Department of Veterans Affairs (VA) devotes large amounts of 
resources to maintain aging and excess infrastructure across the 
country. This had led to funds that could have been spent directly in 
support of our veterans being wasted on the upkeep of buildings and 
land that should have been sold, downsized, or re-purposed for other 
uses long ago. Additionally, the VA's current infrastructure footprint 
was designed to serve a veteran population that is much different from 
the current one and which will not serve the much smaller and more 
dispersed veteran population of the future. It is for these reasons 
that VA Secretaries under Presidents Bush, Obama, and Trump have all 
stated the need for a comprehensive asset review and re-alignment. 
Concerned Veterans for America has long advocated for this type of 
legislation and we feel it is essential to ensuring that the VA is best 
equipped to serve our veterans now and in the future.

Concerned Veterans for America supports this legislation.

HR 2773 - To authorize the Secretary of Veterans Affairs to sell 
    Pershing Hall

A bill to authorize the Secretary of Veterans Affairs to sell Pershing 
    Hall for fair market value

    The VA should have the ability to sell Pershing Hall in Paris, 
France in order to direct resources to other more critical programs.

Concerned Veterans for America supports this legislation.