[Senate Hearing 117-207]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 117-207
 
                        A SYSTEM TO BETTER SERVE
          AMERICA'S VETERANS: INVESTING IN VA'S INFRASTRUCTURE

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

                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              JUNE 9, 2021

                               __________

       Printed for the use of the Committee on Veterans' Affairs
       
       
       
       
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             U.S. GOVERNMENT PUBLISHING OFFICE 
 47-029 PDF           WASHINGTON : 2022 
 
        
        
        
        
        
                     COMMITTEE ON VETERANS' AFFAIRS

                     Jon Tester, Montana, Chairman
Patty Murray, Washington             Jerry Moran, Kansas, Ranking 
Bernard Sanders, Vermont                 Member
Sherrod Brown, Ohio                  John Boozman, Arkansas
Richard Blumenthal, Connecticut      Bill Cassidy, Louisiana
Mazie K. Hirono, Hawaii              Mike Rounds, South Dakota
Joe Manchin III, West Virginia       Thom Tillis, North Carolina
Kyrsten Sinema, Arizona              Dan Sullivan, Alaska
Margaret Wood Hassan, New Hampshire  Marsha Blackburn, Tennessee
                                     Kevin Cramer, North Dakota
                                     Tommy Tuberville, Alabama
                      Tony McClain, Staff Director
                 Jon Towers, Republican Staff Director
                 
                            C O N T E N T S

                              ----------                              

                        WEDNESDAY, JUNE 9, 2021

                                SENATORS

                                                                   Page
Tester, Hon. Jon, Chairman, U.S. Senator from Montana............     1
Moran, Hon. Jerry, Ranking Member, U.S. Senator from Kansas......     2
Tillis, Hon. Thom, U.S. Senator from North Carolina..............    12
Hassan, Hon. Margaret Wood, U.S. Senator from New Hampshire......    14
Tuberville, Hon. Tommy, U.S. Senator from Alabama................    16
Murray, Hon. Patty, U.S. Senator from Washington.................    18
Brown, Hon. Sherrod, U.S. Senator from Ohio......................    20
Blumenthal, Hon. Richard, U.S. Senator from Connecticut..........    22
Blackburn, Hon. Marsha, U.S. Senator from Tennessee..............    24

                               WITNESSES

C. Brett Simms, Executive Director, Office of Asset Enterprise 
  Management, Office of Management, Department of Veterans 
  Affairs........................................................     4
Andrew J. Von Ah, Director, Physical Infrastructure, U.S. 
  Government 
  Accountability Office..........................................     5
Patrick D. Murray, Director, National Legislative Service, 
  Veterans of Foreign Wars, Testifying On Behalf of the 
  Independent Budget Veterans Service Organizations..............     7
Don Orndoff, Senior Vice President, National Facilities Services, 
  Kaiser Permanente..............................................     9

                                APPENDIX
                     Witnesses prepared statements

C. Brett Simms, Executive Director, Office of Asset Enterprise 
  Management, Office of Management, Department of Veterans 
  Affairs........................................................    28
Andrew J. Von Ah, Director, Physical Infrastructure, U.S. 
  Government 
  Accountability Office..........................................    37
Patrick D. Murray, Director, National Legislative Service, 
  Veterans of Foreign Wars, Joint Testimony of The Independent 
  Budget Veterans Service Organizations, Disabled American 
  Veterans, Paralyzed Veterans of America and Veterans of Foreign 
  Wars...........................................................    54
Don Orndoff, Senior Vice President, National Facilities Services, 
  Kaiser Permanente..............................................    62

                        Questions for the Record

Questions submitted by:
  Hon. Moran.....................................................    67
  Hon. Hirono....................................................    84
  Hon. Sinema....................................................   128


                   A SYSTEM TO BETTER SERVE AMERICA'S

               VETERANS: INVESTING IN VA'S INFRASTRUCTURE
                              ----------                              


                        WEDNESDAY, JUNE 9, 2021

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 3 p.m., in room 
301, Russell Senate Office Building, Hon. Jon Tester, Chairman 
of the Committee, presiding.
    Present: Tester, Murray, Brown, Blumenthal, Manchin, 
Sinema, Hassan, Moran, Boozman, Cassidy, Tillis, Blackburn, and 
Tuberville.

              OPENING STATEMENT OF CHAIRMAN TESTER

    Chairman Tester. I call this Committee to order. Good 
afternoon, and I thank everyone for joining us today.
    The VA's Fiscal Year budget request shows a steady increase 
to support VA's various health benefits and memorial affairs 
programs. We will review that budget in more detail at next 
week's hearing. Today we are going to discuss the state of VA's 
facilities and infrastructure.
    The infrastructure funding requested by the administration 
for years has been relatively flat, with sporadic one-off cash 
infusions from Congress. As a result, today VA estimates its 
unmet infrastructure needs total as much as $70.8 billion. The 
need for action is clear, but today we have not had a plan from 
VA on how to get there. Today I hope to explore how VA and 
Congress can work together to deliver on that shared goal.
    An agency as big, and with a mission as important needs 
more certainty so it can staff, plan, execute, deliver, and 
maintain facilities, whether they be in medical centers, 
clinics, vet centers, VBA offices, or national cemeteries. 
COVID-19 made VA's important role in responding to national 
emergencies even more clear.
    We are here today to examine VA's infrastructure needs, how 
it is managing and delivering new facilities, and what Congress 
can do to help. We also want to hear more about President 
Biden's proposal for an $18 billion infusion in infrastructure 
funds for the VA, as part of his American Jobs Plan. I think it 
represents an important step but I have some questions and some 
ideas as we move forward.
    And I appreciate the administration's willingness to have a 
dialogue on this topic. We all know that this is a bipartisan 
issue. We know increased infrastructure funding for the VA has 
been on the table for a long time. In February 2022, Secretary 
Wilkie told us he was looking for $60 to $70 billion for the VA 
in one of the infrastructure pushes from the last 
administration. Well, that never came to be, and funding would 
have likely been spread out over a 10-year window. But it 
reinforces the notion that VA's infrastructure is a bipartisan 
priority.
    And let's be clear. VA's track record for managing and 
delivering new facilities on time and on budget leaves much to 
be desired, whether it is Denver replacement hospital or the 
CBOC in Missoula, Montana, things take too long and often cost 
more than they should. I am glad we are able to have an outside 
perspective today from Kaiser, a very large health care system 
in its own right, about how it manages its capital portfolio 
and plans for growth.
    We will probably also have some discussion on the AIR 
commission, which is a complex and sensitive issue. From my 
perspective, the AIR commission provides VA with an 
opportunity. It is an opportunity to thoroughly review its 
inventory needs and to make adjustments, where appropriate, to 
support the VA's ability to deliver for veterans. But it cannot 
be made into an effort to blindly close facilities or scale 
back services for veterans. Under Secretary McDonough, I do not 
think that will happen.
    I am hoping VA makes this commission an opportunity to get 
rid of the truly excess VA infrastructure that is not being 
utilized, while building new, leasing new, building up or 
right-sizing facilities so they are able to meet the long-term 
needs of our veterans. Investments today in bolstering VA's 
internal capacity to deliver facilities, cutting red tape to 
help VA do its job, and providing smart, consistent funding 
before, during, and after the AIR commission is absolutely 
critical. With that I will turn it over to you, Senator Moran.

               OPENING STATEMENT OF SENATOR MORAN

    Senator Moran. Chairman Tester, thank you once again. It is 
good to be with you this afternoon. I also want to welcome the 
witnesses, and they will be providing testimony that I think is 
important as a fundamental question for the Department of 
Veterans Affairs. We also, as you indicated, there are systemic 
problems for the VA in its infrastructure.
    More than 7.2 million veterans received care from the VA 
health care system last year in aging hospitals, clinics, and 
health care facilities. The age and condition of VA facilities 
demand that we do better. This is not a new problem. It has 
been a reality for decades. It is troubling that the VA's 
discretionary appropriations, including collections, increased 
291 percent from Fiscal Year 2003 to Fiscal Year 2021, now 
totaling $109.5 billion. Mandatory outlays increased $32.4 
billion in that same timeframe, to $133.8 billion, represent a 
313 percent increase. Yet, infrastructure needs go unmet and 
veterans continue to receive health care in dilapidated VA 
buildings.
    More focus is needed on the VA's business process that 
produced this disappointing state of affairs. We cannot confuse 
what infrastructure means. Infrastructure is concrete and 
steel, operating rooms, exam rooms, laboratories, and parking 
garages, computers, and networks. We cannot waste finite 
resources on anything that does not address this over four-
decade-old physical infrastructure problem.
    On March 31, the White House released a fact sheet on the 
American Jobs Plan. It stated that it would address immediate 
needs at VA health care facilities, create jobs for veterans, 
and expand opportunities for small veteran-owned businesses. I 
have questions about how this plan's $18 billion proposal for 
the VA will be used and how it will align with the most recent 
Department's Fiscal Year 2022 budget request for construction 
of $2.2 billion. I under the VA is ``in the process'' of 
identifying projects and facilities, but I have unanswered 
questions regarding how much they cost and how the funding will 
be prioritized.
    The administration is requesting money now with the promise 
to provide a plan for where and how to spend it later. This is 
entirely backward. I seek clarity from our witnesses today as 
to how all this will be accomplished.
    I would also like an update on the asset and infrastructure 
review process. We now, with the publication in the Federal 
Register, have the final criteria to make recommendations 
regarding the closure, modernization, and realignment of 
Veterans Health Administration facilities, as outlined in 
provisions of the MISSION Act.
    We are in a chaotic position. A proposed $18 billion cash 
infusion, an almost $80 billion infrastructure backlog, in some 
cases over 100-year-old buildings, the AIR commission that has 
not even been established yet, and even if the funds are 
provided, a VA work force that can address all of these 
concerns does not exist.
    I am also not confident that the VA planning process could 
deliver what the agency or Congress needs. For over four 
decades, this Committee has seen the same budget requests and 
similar planning process over and over, while watching the 
infrastructure continue to deteriorate while the Department's 
budget increases and blooms.
    Therefore, I feel the responsibility for this Committee to 
make certain several key questions are answered today, and I 
hope they will be. I hope that you, as our witnesses, address 
these subjects and the crucial problems that exist, and I look 
forward to hearing your testimony. My position regarding the 
importance of VA health care is clear and on the record, and I 
am wholeheartedly committed to the maintenance, continued 
development, and improvement of our VA health care system.
    Mr. Chairman, thank you.
    Chairman Tester. Thank you, Senator Moran, and this is an 
unusual VA hearing because we only have one panel today, folks, 
and let me introduce that panel right now.
    First we have got, for the VA we have Brett Simms, 
Executive Director for the Office of Asset Enterprise 
Management. He is also the VA's Chief Sustainability Officer 
and Senior Real Property Officer.
    Joining us virtually from the Government Accountability 
Office we have Andrew Von Ah. He is the Director of GAO's 
physical infrastructure team and is responsible for overseeing 
a portfolio of work, including VA property issues.
    From the Veterans of Foreign Wars we have Pat Murray, 
Director of VFW's National Legislative Service. Pat is here 
representing the Independent Budget veterans service 
organizations.
    And finally we have Don Orndoff, Senior Vice President of 
National Facilities Services at Kaiser Permanente.
    I want to thank you all for being here, and we will start 
with you, Mr. Simms.

                  STATEMENT OF C. BRETT SIMMS

    Mr. Simms. Good afternoon, Chairman Tester, Ranking Member 
Moran, and members of the Committee. I am happy to be here 
today to discuss VA's infrastructure.
    VA operates the largest integrated health care system in 
the Nation, with more than 1,700 health care facilities, 158 
national cemeteries, as well as a variety of benefit and 
service locations. However, our portfolio is aging, with the 
average age of VA's own buildings approaching 60 years old. 
VA's infrastructure is a barrier to the excellence in care and 
service delivery veterans have earned. Health care innovation 
is occurring at an exponential place. The comparatively newer 
private sector facilities are able to incorporate these trends, 
while VA's opportunities are limited within our existing 
facilities.
    To reverse the trends in VA's aging infrastructure, a large 
capital investment is needed. The President has called for $18 
billion in the American Jobs Plan to modernize VA health care 
facilities. These proposed investments will pay long-term 
dividends by offsetting growing costs of older facilities while 
meeting the health care needs of today's veterans and those of 
the future.
    As a part of the $18 billion, $3 billion is sought to 
address immediate infrastructure needs. These immediate needs 
include upgrades to support the growing number of women 
veterans, improvements to utility and building systems for more 
reliable and energy efficient operations, and facility 
enhancements to better accommodate aging veterans.
    The remaining $15 billion would be used to fully modernize 
or replace outdated medical centers with state-of-the-art 
facilities. This investment is multi-faceted, reflecting the 
need to replace aging facilities, adopt modern trends in U.S. 
health care, and align with the future Asset and Infrastructure 
Review commission, or AIR commission, discussions.
    In addition, VA's Fiscal Year 2022 budget was recently 
published. It includes several infrastructure-related 
legislative proposals. We believe these legislative proposals 
are necessary and in line with this Congress' priorities to 
address our infrastructure needs. These proposals, including 
restructuring our major lease approval process, will address 
known challenges and provide VA additional tools in the 
delivery of health care facilities. We look forward to working 
with Congress to enact these much-needed authorities.
    The transformation of VA health care to achieve a safer, 
more sustainable, veteran-centered health care environment 
requires that VA leverage innovations in ever-changing medical 
technology and clinical procedures. With these changes there is 
less demand for large, sprawling campuses and more emphasis on 
ambulatory and virtual care. This evolving landscape requires 
that VA rebalance its infrastructure to provide for a blend of 
these delivery methods.
    The American Jobs Plan funding will allow VA to jump-start 
a recapitalization effort, serving as a down payment on our 
path to modernizing our facilities. This investment will allow 
VA to address the degrading age and condition of our assets 
that present challenges to delivering world-class care. The 
American Jobs Plan, combined with a focus on public and private 
partnerships, and a veteran-centered approach to health care 
delivery will be transformative for the public health 
infrastructure of the nation.
    VA recognizes that the amount of funding requested in the 
American Jobs Plan is significantly larger than our typical 
appropriations. Because of this, our approach to execution must 
adapt. We are pursuing a whole-of-government and industry 
approach will standardizing our facility designs and 
streamlining acquisition processes.
    VA will leverage our Federal partners to expand capacity. 
We will also continue to engage with industry to adopt the most 
effective and innovative delivery methods and contract vehicles 
to rapidly scale up and speed up. In addition, leveraging 
standardized facility designs and building more adaptable 
space, VA can better manage cost and scale for these projects.
    While recapitalizing our facilities to better support 
future health care delivery is critical, we must be cognizant 
of the ongoing Veterans Health Administration market 
assessments and AIR commission work. VA views both the American 
Jobs Plan and the AIR commission as driving toward the same 
goal--improving veteran access and outcomes, by ensuring 
facilities get the necessary investment to support care and 
service delivery into the future.
    The MISSION Act requires VA to continue construction, 
leasing, budgeting, and long-range capital planning activities 
while the market assessment and AIR commission activities are 
occurring. The American Jobs Plan supports this requirement 
with additional resources, while still allowing the necessary 
coordination with the AIR commission efforts. The outcome of 
these efforts will shape VA's health care delivery system of 
the future.
    To summarize, VA has taken important steps to improve our 
capital programs and processes, and will continue to do so. 
Tactical improvements, combined with VA's strategy 
recapitalization undertaking, as part of the President's 
proposed American Jobs Plan, are solid building blocks on which 
to develop and implement opportunities to best delivery health 
care and service to our veterans.
    Chairman Tester, Ranking Member Moran, and members of the 
committee, this concludes my statement. Thank you for the 
opportunity to testify today. I will be happy to respond to any 
questions you may have.
    Chairman Tester. Yes, thank you, Mr. Simms. Now virtually 
we have Mr. Von Ah.

                 STATEMENT OF ANDREW J. VON AH

    Mr. Von Ah. Members of the committee, thank you for the 
opportunity to discuss our recent and ongoing work on VA's 
management of its vast portfolio of real property assets.
    Ensuring the highest quality care for our Nation's veterans 
requires high-quality facilities with sufficient capacity, in 
accessible locations. These facilities should also be designed 
to meet veterans' needs and expectations. However, fulfilling 
all of VA's priority projects in its 10-year capital plan would 
cost up to $70 billion. Meanwhile, VA faces a growing backlog 
of maintenance to facilities that are often considerably older 
and thus more costly to renovate and modernize than private 
sector counterparts.
    My remarks today are based on our reports issued over the 
last 4 years on a variety of VA property issues and preliminary 
observations for our ongoing work for this committee. We are 
currently evaluating VA's asset management practices against 
leading practices that GAO considers to be essential for 
effective asset management.
    First I would like to acknowledge some progress VA has made 
over the last few years. For example, we have made over 20 
recommendations to the VA to improve such things as its 
property disposal and facility activation processes, its cost 
estimation guidance, and its ability to incorporate changing 
veterans' needs and expectations into facility planning. To 
date, the VA management has actively engaged with us to 
implement over half of these recommendations, and has made 
progress on all of them.
    Nonetheless, preliminary findings from our current work on 
asset management reveal a number of ongoing challenges in 
establishing an effective system. In particular, I would like 
to focus on shortcomings in staffing to address asset 
management issues, communication and coordination within VA, 
and performance measures for assessing asset management.
    With respect to staffing, VA has had challenges recruiting 
and retaining staff across the department for a number of 
years. In particular, officials from several regional offices 
and medical centers report difficulties in recruiting engineers 
and maintenance staff for their facilities, given the high cost 
of living in their areas and because of competition with other 
Federal agencies as well as the private sector.
    To address this challenge, VA now uses special salary rates 
granted by OPM to recruit for engineering staff, which has 
helped to compete for these positions. In fact, the 
Department's vacancy rate for engineers overall decreased from 
17.2 percent in 2019 to 11.6 percent currently.
    The VA is now developing a hybrid qualifications standard 
for engineers who perform work in a hospital or health care 
setting, and the goal here is to provide more flexibility in 
recruiting and increase the pool of potential candidates.
    However, it is unclear whether these initiatives will fully 
address VA's staffing challenges until they have been more 
fully implemented. Currently, VA officials we have interviewed 
in both headquarters and field offices and all four of the 
veteran service organizations that we have spoken with report 
that staffing problems still affect VA's management of its 
capital assets.
    Turning to communication and coordination within VA, 
effective capital asset management requires a collaborative 
culture and information sharing across traditional lines of 
operation. VA's organizational structure can pose challenges 
here, given its vast field presence and asset management 
dispersed across numerous offices within the VA, with differing 
lines of command and authority.
    VA recently issued a directive that clarifies roles and 
responsibilities for asset management across these offices, and 
has developed processes as guidance to indicate how and when 
offices should communicate. But progress in this area will 
require ongoing effort, findings from our current work 
identifying instances where a lack of communication and 
coordination may continue to hamper its efforts. For example, 
we found that IT staff in medical centers are not uniformly 
part of construction and activation discussions, thus, needs 
are not necessarily conveyed clearly.
    Moreover, if early communication during design is lacking 
between medical center and headquarters staff, there may be 
delays between initial project approval and execution, with 
resulting scope increases and contract modifications which 
potentially could have been avoided.
    With respect to measuring performance, and effective asset 
management framework should include the ability to evaluate the 
performance of your system and implement necessary 
improvements. Preliminary findings from our current work show 
that VA lacks goals and measures to fully evaluate the 
performance of its asset management system.
    For example, while VA reports information on the condition 
of its capital assets, VA does not have goals or targets 
associated with them. In its updated directive on capital asset 
management, VA indicates that it will establish a system that 
will allow it to evaluate capital asset performance in order to 
make sound decisions regarding acquisition, maintenance, and 
disposal of its assets. In the meantime, without such 
indicators, VA will have difficulty knowing whether the system 
is working and where it may need to make improvements.
    Chairman Tester, Ranking Member Moran, this concludes my 
statement. I am happy to answer any questions you or members of 
the committee may have. Thank you.
    Chairman Tester. Thank you, Mr. Von Ah. Mr. Murray.

                 STATEMENT OF PATRICK D. MURRAY

    Mr. Murray. Chairman Tester, Ranking Member Moran, and 
members of the committee, on behalf of the Independent Budget 
veteran service organizations, a 30-year partnership between 
DAV, PVA, and VFW, thank you for the opportunity to offer our 
comments regarding how to strengthen and sustain the 
infrastructure of VA.
    While VA has received increased funding levels, a 
persistent lack of resources for facilities management, 
modernization, and personnel continues to negatively impact 
access for an increasing number of veterans. VA's aging 
infrastructure not only causes veterans to wait too long and 
travel too far for care but it also potentially endangers the 
health and lives of veteran patients and personnel.
    Last November, at the Veterans Affairs Medical Center in 
West Haven, Connecticut, an aging campus built mostly in the 
1940's and 1950's, while performing what should have been a 
routine maintenance job ended in tragedy when an over-pressured 
event occurred, killing two men and injuring three other 
people. Earlier this month, the G.V. Sonny Montgomery VA 
Medical Center in Jackson, Mississippi, announced the closing 
of its dialysis treatment center due to aging infrastructure. 
These are just two recent examples of how a failure of properly 
maintaining infrastructure can impact veterans' access to care 
and present risks for employees.
    Improperly maintained facilities and equipment can lead to 
a loss of money, services, and unfortunately, in some cases, a 
loss of life. Infrastructure can be life safety issue and needs 
to be treated with the appropriate levels of attention.
    Our nation's infrastructure also needs improvement, and a 
proposed infusion of $18 billion for VA facilities is 
potentially part of a larger national infrastructure package. 
The IBVSOs are very appreciative of this proposal, and given 
the gap in funding identified by VA's Strategic Capital 
Investment Planning process, or SCIP, such an infusion is 
certainly justified.
    However, we believe it is also time to consider a wholesale 
transformation, beginning with the revamping of the SCIP 
process. While VA's SCIP list contains all VA major, minor, 
interim, and leasing projects, VA's budget request regularly 
fails to address the full SCIP funding estimates or priorities. 
The SCIP process does not provide a chronological list of 
anticipated repairs, renovations, and replacements of 
facilities. At best, SCIP provides non-binding suggestions to 
the VA budget process, which are regularly bypassed, resulting 
in ever-increasing backlog of overdue maintenance and 
construction projects.
    The SCIP process needs to be overhauled to reflect an 
actual plan and priorities of VA's physical footprint. In 
reference to the $18 billion proposed infusion in VA's own 
testimony on May 27th, they stated, ``To determine the most 
appropriate investment for the recapitalization effort, VA will 
leverage a data-driven process to identify potential sites.'' 
Why is that information not already identified? What is the 
purpose of having a SCIP process if it is not to determine 
priorities in infrastructure?
    The SCIP process needs to change to reflect a real-time 
list of priorities so they can be completed in order, based on 
priority.
    Insufficient VA personnel is also an obstacle to timely and 
cost-effective infrastructure, maintenance, and construction. 
The IBVSOs recommend that VA increase its internal capacity to 
plan and manage infrastructure and construction projects by 
hiring additional personnel with subject matter expertise in 
the office of Construction and Facilities Management, within 
each VISN, and at every VA medical center. Congress should also 
consider utilizing the Army Corps of Engineers to manage some 
or all of VA's major construction projects, as well as private 
sector construction management services to increase timeliness 
and cost effectiveness.
    VA must also align its policies closer to that of private 
sector builders, who regularly innovate in order to become more 
efficient and effective. Although personnel are not normally 
considered part of an organization's infrastructure, the lack 
of sufficient professionals to run and maintain an organization 
certainly limits its capabilities.
    Filling vacant positions is critical to ensuring that 
veterans can receive VA-provided care in a timely manner. 
Therefore, VA must request, and Congress must provide, 
sufficient authorities and funding to fully staff VA in order 
to eliminate gaps in health care employees.
    Finally, while we await the formation of the AIR 
commission, we must not wait for its completion to perform 
maintenance, upgrades, and necessary construction. AIR 
represents the future of the footprint of VA, but there is $60-
plus billion of work needed now.
    Chairman Tester, Ranking Member Moran, this concludes our 
joint testimony, and I would be pleased to respond to any 
questions you or the Committee members may have.
    Chairman Tester. Thank you. You are up, Mr. Orndoff.

                    STATEMENT OF DON ORNDOFF

    Mr. Orndoff. Good afternoon, Chairman Tester, Ranking 
Member Moran, and members of the Committee. Thank you for the 
opportunity and honor to be before you today on behalf of 
Kaiser Permanente. I am Don Orndoff, Senior Vice President and 
leader of Kaiser Permanente's National Facilities Services.
    Kaiser Permanente Medical Care Program is the largest 
private integrated health care delivery system in the United 
States, providing comprehensive health care services to 12.5 
million members in 8 states. Our mission is to provide high-
quality, affordable health care to our members and the 
communities we serve. Like the U.S. Department of Veterans 
Affairs, we serve a large, diverse population across our 
operational footprint.
    At Kaiser Permanente, I am responsible for the full 
lifecycle of facilities management, including planning, 
acquisition, and operation of our 90 million-square-foot real 
estate portfolio, comprised of 1,300 facilities, with a $40 
billion replacement value. The portfolio includes hospitals, 
medical office buildings, ambulatory surgery centers, call 
centers, and supporting facilities. We typically invest about 
$3 billion a year in facilities-related capital, roughly 3 
percent of our overall operating revenue.
    Prior to joining Kaiser Permanente in 2010, I served as the 
Executive Director of the VA Office of Construction and 
Facilities Management. Before that I served for 30 years as a 
commissioned officer in the Civil Engineer Corps and the 
SEABEEs of the United States Navy. I am here today to offer my 
perspective of four decades of experience in large, complex 
organizations, both in the public and the private sectors.
    I suggest there are 10 basic tenets to successful 
facilities management for large health care delivery systems at 
the scale and complexity of Kaiser Permanente and the U.S. 
Department of Veterans Affairs. They are:
    1. Lead through a comprehensive, enterprise strategy, to 
make sure that all business decisions support and are aligned 
with a carefully developed, universally understood business 
strategy.
    2. Transform the care delivery model, to ensure that design 
of new health care facilities is forward looking, adaptable for 
inevitable change, and flexible to meet future space 
requirements.
    3. Optimize care delivery platforms as a system, based on 
member-centric design that spans across multiple sites of care, 
ensuring the right care is provided at the right time, at the 
right place.
    4. Standardize facilities design, so the entire 
organization can apply the discipline to follow the evidence-
based standard every time for every project. This principle 
embodies a structured process to continually improve, embracing 
innovation that supporting the transforming care model.
    5. Modularize facilities components, creating a kit of 
parts that can be uniquely configured within a standard 
structural grid. Super-designed modules address all relevant 
design decisions and allow us to engage aggressively in supply 
chain management concepts to reduce the effort, time, and costs 
to design and deliver individual projects.
    6. Accelerate project delivery, to dramatically reduce 
cycle time and cost of project delivery while consistently 
delivering high-quality health care buildings.
    7. Leverage progressive acquisition strategies, using 
integrated project delivery contracting and concepts to allow 
the team to virtually plan, design, and fabricate the future 
health care building before any onsite work begins.
    8. Commit to proactive sustainment, to optimize facilities' 
lifecycle performance by requiring proactive sustainment of 
existing infrastructure to extend to the service life of 
valuable assets, avoid the long-term cost of breakdown repairs, 
and minimize core business disruption due to unanticipated 
building system failure.
    9. Commit to environmental stewardship. By linking 
environmental stewardship to effective facilities management, 
we are committed to reducing building energy demand while 
increasing energy supply from renewable sources, achieving 
carbon neutrality.
    10. Commit to investing for community health impact, to 
create a positive economic force multiplier effect to address 
inequities and social determinants that define community 
health.
    My written testimony submitted for the record further 
expands on each of these tenets and overviews the progress that 
Kaiser Permanente is making.
    In summary, Kaiser Permanente is committed to serving our 
members by delivering and operating health care facilities 
faster (speed to delivery), better (consistent quality and 
capability), and cheaper (lowest lifecycle cost.) We stand 
ready to work with this Committee, the U.S. Department of 
Veterans Affairs, and all health care industry thought leaders 
to improve health and reduce costs.
    Thank you for this opportunity to share information about 
our work and experiences. I am happy to respond to your 
feedback and questions.
    Chairman Tester. Thank you, Mr. Orndoff, and I want to 
thank all of you for your testimony, and know that your entire 
written testimony will be a part of the record, so thank you 
all.
    I am going to start with you, Mr. Simms. VA has been 
waiting since 2017 for Congress to act on a list of leases to 
allow the VA to build or refurbish a number of new clinics all 
across this country. That list has gone to 21, impacts 13 
different states, impacting hundreds of thousands of veterans 
across the country. I believe you know that I have been working 
on legislation to try to fix this issue for once and for all.
    My question to you, is it correct that VA is supportive of 
making changes to the major lease process similar to what is in 
my BUILD for Veterans Act legislation? Is that true?
    Mr. Simms. Yes, sir.
    Chairman Tester. And would those changes, if we were to 
pass the BUILD for Veterans Act legislation, have a significant 
impact on actually delivering these claims for the communities 
that need them?
    Mr. Simms. Yes, sir. That is correct. I think the 21 leases 
that you mentioned add over 2 million square feet of capacity 
to the portfolio, and the changes proposed in the BUILD Act, as 
well as our FY22 budget submission, our legislative proposal to 
change that process, would dramatically improve our ability to 
deliver those.
    Chairman Tester. I appreciate that. Mr. Murray, from a VSO 
standpoint, particularly yours at the VFW, especially since the 
fact that I believe you are intimately aware of this 
legislation, do you support the legislation?
    Mr. Murray. To change the leasing authority, sir?
    Chairman Tester. Yes.
    Mr. Murray. Absolutely. It offers much-needed flexibility 
for VA.
    Chairman Tester. And in the flexibility is what is 
critically important.
    Mr. Murray. Yes, sir.
    Chairman Tester. All right. I am going to go over to you, 
Mr. Orndoff, if I can find the question here. Look, you manage 
large facilities for Kaiser Permanente. I understand that you 
recently had an opportunity to meet with VA officials, 
including Dr. Stone. Is that correct?
    Mr. Orndoff. Yes.
    Chairman Tester. Yes, and to talk about some of your 
insights, and I thank you for that. Can you share with us some 
of the conversation, the lessons learned, the observations that 
you were able to translate to the VA folks?
    Mr. Orndoff. Yes, Senator. I think the big conversation 
revolved around speed to delivery. Dr. Stone expressed a few 
examples of projects, and I think it is common knowledge that 
some projects have been case studies and were not speed to 
delivery.
    So, what are the opportunities? What are the tools and 
methodologies that we use in Kaiser Permanente that might be 
applicable for VA application? So there was a lot of good 
conversation around that. Obviously, understanding the agility 
and how you are planning for the future for an ever-changing 
care model was part of the conversation as well. Kaiser 
Permanente is very committed to working with the VA on a 
continuing basis to address these kinds of challenges.
    Chairman Tester. I also appreciate that. Mr. Orndoff, 
Kaiser is smaller than VA in physical infrastructure size, but 
I think it is fair to say you have a comparable yearly budget 
for infrastructure as the VA does. Is that correct?
    Mr. Orndoff. Yes.
    Chairman Tester. Okay. So, I mean, I think that says a lot 
right there, about where your priorities are. But how do you 
determine your budget for maintaining what you have and what 
you intend to build new each year?
    Mr. Orndoff. Thank you for that question. We go through a 
rigorous process of trying to understand where our 
opportunities are to expand our membership and create 
additional access for our members. We have a delivery system 
planning process that is constantly looking at that issue. And 
where we have gaps or missing capability we will begin to 
program in solutions that would address those gaps.
    We start off with the premise that maintenance of our 
existing infrastructure is the first priority of capital. That 
is repeatedly reaffirmed by our chief financial officer, that 
we will maintain our target performance for our existing 
infrastructure. We currently set our targets at 5 percent 
maximum backlog for hospital facilities and maximum of 10 
percent for any other facilities, in terms of a backlog. That 
gives us the ability to execute that work and program it and 
keep those facilities in the best shape possible and extend the 
life of the facilities.
    We typically look at about a 2 1/2 to 3 percent capital 
investments against operating income. Our whole economic 
structure and financial structure is geared to create the 
headroom to have a capital program to maintain the 
infrastructure, which is critical to our care delivery model.
    Chairman Tester. Do you think that proportion is applicable 
to any health care system, including the VA?
    Mr. Orndoff. Well, certainly there is a point where it is 
an optimum. I think that obviously there are a lot of 
considerations and priorities that go into resource allocation. 
But, you know, we have come to that as a general business 
philosophy and program to those levels, and stress our entire 
system to deliver on those as part of measuring our 
performance.
    Chairman Tester. Thank you. Senator Tillis?

                      SENATOR THOM TILLIS

    Senator Tillis. Thank you, Mr. Chairman. Gentlemen, thank 
you for being here today.
    Mr. Simms, you, in your opening comments mentioned 
rebalancing infrastructure. I think Secretary McDonough used a 
slightly different term. Some people have tried to characterize 
that as a brag for the VA. How are we able to break through the 
threat--you have got a ratchet effect problem going on here, 
right? You want to either consolidate or modernize facilities. 
It may affect a physical footprint. And so you have the 
challenge of being able to come up with some sort of service-
level metric or something that can ensure the veteran that the 
fact that the address may change, that the service levels are 
as good or better.
    As you are going through this process, to what extent are 
you preparing that kind of information so that they can feel 
confident that that would be the end result?
    Mr. Simms. Thank you for that question. That is absolutely 
critical in any of the decisionmaking that we are looking at 
for infrastructure. What I will say is the Secretary is pretty 
consistent in the message that we are looking to improve the 
access and the outcomes for veterans. And some of that is 
delivery care by VA, in VA facilities, some of it is VA as a 
provider, but in other facilities, and some of it may be care 
in the community that VA is the care coordinator for.
    All of those are pieces of the market assessment and AIR 
commission work that is ongoing at this point. It will clearly 
influence what the physical footprint looks like, but we also 
know that there are sites that today, the age and condition of 
the facilities simply will not support whatever that future 
footprint will be.
    So we are trying to get ahead and identify those sites and 
what work could be done early so that we are ready to hit the 
ground running.
    Senator Tillis. I am going to come back to you in a minute.
    Mr. Orndoff, of the real estate portfolio that are 
responsible for managing, how much of that does Kaiser 
Permanente own versus some sort of a lease arrangement with the 
building owner?
    Mr. Orndoff. In broad numbers it is about two-thirds owned, 
one-third leased.
    Senator Tillis. One-third. And what is the trend, moving 
forward? Would it be roughly the same proportion, or what is 
the trend?
    Mr. Orndoff. For our larger facilities we tend to want to 
own those. It is major capital investment, long-term 
investment. We typically use leasing for more tactical purposes 
and administrative space. And right now, of course, post-COVID 
we are looking at consolidating our administrative footprint 
for some of the opportunity there.
    I suspect that we will be seeing the owned ratio go up, 
probably to about three-quarters to one-quarter.
    Senator Tillis. That may make more sense in the space that 
you operate. When we build a building it is sort of like, I am 
having this discussion with DoD, I am having this discussion 
with DOJ on courthouses. When we enter into these sorts of 
relationships we have a stickiness that could be 20-, 30-, 50-
year relationships. I think that is more attractive for 
private-public partnerships.
    Mr. Simms, first off, when is the AIR commission going to 
present the report to the President, to either sign off and 
send to Congress or send the commission back to doing its 
homework?
    Mr. Simms. If I have the dates right from the statute, VA 
will deliver its material at the beginning of 2022 calendar 
year. The AIR commission will debate for approximately a year, 
and then in February 2023 will deliver its recommendations back 
to the President.
    Senator Tillis. Is the AIR commission--I know the law 
restricted the stoppage of any projects while the commission 
was going through. So now you have got a physical plan that at 
the end of the day may or may not be completely consistent with 
what you want to do. So is the AIR commission also focusing on 
the end process projects?
    Mr. Simms. No. In the end process projects are just 
continuing to move forward. The AIR commission is not 
necessarily looking at those.
    Senator Tillis. At the viability of them, whether or not it 
was a rational decision to do whatever they are doing. They are 
either renovations or new buildings. Those are outside of the 
purview of the AIR commission?
    Mr. Simms. Correct.
    Senator Tillis. The last thing I will leave you with, I 
know, at least in North Carolina, I almost think about P4---
public, public-private partnership. As you are looking at some 
of these models, are you looking at state and local governments 
who may be willing to play a role to reduce the cost of the 
build-out? We are working on a project now in DoD where the 
state is going to issue bonds and be a partner with a private 
sector provider for facilities not far from Seymour Johnson. 
Have you all looked at that dimension as you move forward with 
the leasing and some of these PPPs?
    Mr. Simms. Yes, that is a great question. So we do not have 
the inherent authority to look at even typical public-private 
partnerships. We do have some space-sharing authorities that we 
are looking to try to leverage in different situations to 
acquire space quicker, but it is not a pure public-private 
partnership engagement like you are describing.
    Senator Tillis. Well, Mr. Chair, I think I inferred from 
you that you are Okay with these leaseback projects. I think it 
would be absurd for that not to be a key part of our portfolio, 
and I think that the ratios, looking ahead, if we want to build 
out more facilities, should probably be more weighted to more 
leasebacks. These are long-term projects. They are not going to 
move for decades. You can create an investor base that is 
willing to put that in there because they know they have got a 
good tenant.
    Thank you, Mr. Chair.
    Chairman Tester. Thank you, Senator Tillis. Senator Hassan?

                  SENATOR MARGARET WOOD HASSAN

    Senator Hassan. Well, thank you, Mr. Chair, and I want to 
thank the Ranking Member as well for this hearing, and I want 
to thank the witnesses for being here today. And, Mr. Simms, I 
want to start with a question to you.
    New Hampshire is one of three states, along with Alaska and 
Hawaii, that lacks a full-service VA hospital, something I have 
been pushing to change for years. Because we do not have a 
single, full-service facility, many granite state veterans 
receive care in a patchwork manner--at clinics, through 
contractors, and across state lines.
    Mr. Simms, in your testimony you said that the VA takes a 
data-driven approach to prioritizing projects. How does the 
lack of a full-service VA hospital in a state factor into that 
data-driven approach?
    Mr. Simms. Thank you, Senator, for that question. I will 
get specifics on New Hampshire, but in general, what it comes 
down to is the enrollee population and the projected service 
demand are laid against the available resources. And those 
resources include VA, Community Care, and other providers out 
there, to determine where those points of care today exist or 
where there may need to be some in the future. But it is very 
local and very specific to different regions, as you pointed 
out.
    Senator Hassan. Well, I understand that. I think one of the 
things we are looking for is assurance that without a full-
service VA resource within the state that there are different 
kinds of pressures on the other health care providers and 
different kinds of needs for the veterans. So this is a way of 
saying that I think the VA needs to better prioritize veterans 
in New Hampshire, Alaska, and Hawaii, who lack a full-service 
VA hospital. And at a minimum, VA should take the lack of a 
full-service VA hospital into account when allocating 
resources. I am happy to work with the committee and with the 
VA to help ensure that happens, going forward.
    Relatedly, Mr. Simms, the current VA Medical Center 
building in Manchester is 70 years old, and it shows. Just a 
few years ago, the building had a major fly infestation that 
led to canceled procedures, and the VA has spent tens of 
thousands of dollars on exterminators to help address the 
problem. Our veterans should not have to wait for insect 
infestations to clear up in order to get the care that they 
need.
    In 2018, a VA task force put forth a robust set of 
recommendations for VA care in New Hampshire, including an 
ambulatory surgical center at Manchester and numerous other 
changes to improve VA infrastructure. But 3 years later, 
Granite state veterans are still waiting for action on many of 
those recommendations.
    So, Mr. Simms, can you please speak to how the VA will make 
real, lasting change to its facilities to proactively address 
our veterans' needs, rather than take a Band-Aid approach, like 
hiring insect exterminators to fix issues that have a negative 
impact on care?
    Mr. Simms. Thank you, Senator. That is a great question, 
and frankly, that is at the root of why we are driving toward 
recapitalization. There is only so much of that Band-Aid 
approach that you can take before you simply cannot make some 
of the changes or fixes that are necessary to continue support 
in those facilities, without having shortages or stoppages of 
care delivery, and we certainly do not want that.
    There are some facilities that we need to look at fully 
recapitalizing, and New Hampshire is an example. Manchester 
would be one that is of the right age, the right condition, 
that it would fit with many other facilities across the system 
that are in that discussion for where does recapitalization 
make sense to actually just wipe the slate clean and start new.
    Senator Hassan. Right. It is rare that you call somebody at 
Manchester--and the staff there is great, veterans love the 
staff, they are grateful for the care they get--but you call 
and there is almost always some facility issue that is 
interfering with care. It is not just an inconvenience. So I 
would look forward to working with you on that.
    Mr. Murray, I want to thank you for being here today as 
well. We certainly know how essential our veteran service 
organizations are in our communities. We are really grateful 
for them in New Hampshire.
    The VA must use a comprehensive approach in infrastructure 
planning that uses both data but also the input from veterans. 
Mr. Murray, can you please speak to why feedback from local 
VSOs is critical to infrastructure planning and how VA 
officials can use this information to inform their decisions?
    Mr. Murray. Absolutely, ma'am. As part of the market 
assessments, the local veteran's voice is important to find out 
what services are needed, what services are desired. VA cannot 
properly set up what they are going to put in their VA facility 
if they are not aware of exactly what it is they want.
    One of the things that we are also here to say, as you 
mentioned, some of the issues regarding facilities. That is 
stuff that our members hear about. That is stuff that veteran 
patients see about. As Mr. Orndoff mentioned, 3 percent of 
operating costs, if that was applied to VA's budget that would 
probably align with what we think VA should be spending every 
year, but they do not have the capacity in order to do that. 
They do not have the personnel to manage that much work, that 
volume of work.
    So we think that looking at what organizations like Kaiser 
are doing, and kind of applying that to VA would really help, 
moving forward.
    Senator Hassan. Thank you, and thank you, Mr. Chair.
    Chairman Tester. Senator Tuberville.

                    SENATOR TOMMY TUBERVILLE

    Senator Tuberville. Thank you, Mr. Chairman. Thank you, 
gentlemen, for being here today.
    You know, the COVID-19 pandemic forced a lot of health care 
services online, and telehealth became a crucial ability for 
veterans and providers across the country. With this increased 
use of telehealth services, fewer veterans have to travel to 
see their doctor.
    Mr. Simms, how does this trend influence the decision you 
are making around constructing or accessing the need for more 
VA hospitals and clinics?
    Mr. Simms. Thank you, Senator. That is a great question 
that at this point we do not really know the answer to, simply 
because when COVID and the pandemic hit, it forced a lot of 
delivery of care to go into those virtual modalities. We are at 
the point now, as we come out of the pandemic, we are not sure 
that all of the veterans will want to stay in that virtual or 
whether they will want to come back to the facilities for 
visits for different types of things. So as we learn more about 
that it will absolutely impact the footprint.
    Senator Tuberville. Yes. I think education is going to a 
part of that too. You know, with 7.8 million young men and 
women, or my age, even, that just fought in these two wars we 
had, you know, we are going to have a lot of people that we are 
going to have to treat, and we are going to be overrun at 
times. I think telehealth could be a big factor.
    Mr. Von Ah, when coordination breakdowns occur most 
frequently within the VA in relation to infrastructure 
vulnerabilities, how would you recommend the VA leverage the 
$18 billion from the American Jobs Plan to address these 
vulnerabilities?
    Mr. Von Ah. Thank you for that question, Senator. So our 
work has shown that there are a few places where communication 
can be lacking, where offices may not frequently interact, for 
example, the property disposal process does not occur as often 
as other types of projects, so facility staff may not be 
familiar with the options or the processes they need to follow.
    We also see a number of breakdowns between headquarters and 
the field in terms of headquarters sort of explaining what 
their priorities will be and should be for local planners, and 
local medical centers communicating their needs up to 
headquarters.
    Then we also see issues where multiple lines of business 
come together, and this happens, for example, during 
activation, where you can have challenges with bringing 
different lines of business together with their own budgets and 
lines of authority.
    In terms of the $18 billion, I think for us it really 
starts with setting goals and measures in terms of what VA 
hopes to accomplish. Our work has shown that while the SCIP 
process identifies priorities, there are not really clear goals 
in terms of, you know, do we want to close these SCIP gaps? Do 
we want to get this many facilities at this level of condition? 
Or do we need to make a dent in the deferred maintenance 
numbers that we have?
    And so for us it really starts with setting those goals and 
measures to sort of guide what they should be doing with an 
infusion of dollars.
    Senator Tuberville. Thank you. Mr. Murray, private industry 
has certain standards and practices to improve construction. 
What can the VA do to align more closely with private sector?
    Mr. Murray. Thank you, Senator. Some of the things is to 
speed up the lifecycle of the entire project by bringing the 
designers, the contractors, and the end users together in 
contractor-led design-build processes. It shortens it by 
bringing all the parties together. It might shorten it by a 
year or two, but when you are talking about medical equipment 
that has a certain lifecycle, it only has a finite number of 
years for it to be in its prime usage period, that really lets 
that facility operate at maximum capacity for a better amount 
of time for patients by bringing them together with contractor-
led design.
    Also by utilizing the Army Corps of Engineers, who has 
moved and developed some of those same practices. Also reaching 
out to private industry and asking organizations, like Kaiser, 
who have learned some of these lessons. The private sector 
works on efficiency. They do it because it works. That is 
something that VA should really lean on.
    Senator Tuberville. Thank you. That leads to my question to 
Orndoff here. What have you found to be the typical total cost 
of a building, a brand-new, state-of-the-art hospital, and if 
you were given $18 billion to improve the Kaiser system 
infrastructure, how would you allocate that money to ensure it 
is used effectively?
    Mr. Orndoff. Thank you, Senator. Of course the cost of a 
hospital is depending on the size and the scale and so forth.
    Senator Tuberville. Average size.
    Mr. Orndoff. Right now we are delivering about $800 million 
per copy, on a typical 250-to 300-bed hospital. We have one 
under construction right now, and that is the price point for 
that.
    So, you know, round numbers, when you look all in, it is $1 
billion a copy. It is a daunting challenge with the age of the 
infrastructure of VA to say where do you start and where do you 
apply this?
    One piece of advice that we shared with Dr. Stone a couple 
of weeks back was, try to take a programmatic view of this, and 
in execution, not just in the thinking and the planning but in 
the execution as well, where you can leverage the scale of the 
spend in a way to get better pricing and streamline some of the 
decisionmaking process. So that might be one thing that we 
could talk about, some areas where we have had some success 
with, and share that with VA.
    It is an expensive business, and as you know, the cost of 
materials and supplies right now are really escalating in the 
construction business. It is very difficult to predict the 
future of cost in construction right now. We are doing our best 
to forecast, but it is more of an art than a science, to be 
honest, and we hope to see that settle out soon. But there are 
also pinch points for things like labor availability. That is 
one of the major drivers of construction cost as well.
    The dynamics post COVID, as we recover and set the new 
normal, will all be impacted by this and we will all be trying 
to read the tea leaves as best we can to understand costs and 
future costs.
    Senator Tuberville. Thank you, Mr. Chairman.
    Chairman Tester. Senator Brown. Senator Murray.
    Senator Murray. Senator Brown has been sitting here, if you 
want to go.
    Chairman Tester. He has been here for at least 5 minutes 
before you. I just wanted you to know.
    [Laughter.]
    Senator Brown. Senator Murray wants to chair this 
Committee.

                      SENATOR PATTY MURRAY

    Senator Murray. Thank you. Thank you, gentlemen. It is 
great to see you here today.
    You know, I am really glad that President Biden included 
historic investments in home and community-based services in 
the American Jobs Plan. As our aging population of veterans 
grows, veterans' long-term care needs really deserve a lot of 
attention to make sure that these veterans receive the quality 
care that they have earned.
    This week I actually introduced a bill to pave the way for 
much-needed investments in long-term care. My bill, called the 
Planning for Aging Veterans Act, would improve VA's 
relationship with state-run veterans' homes and expand the care 
veterans in state homes receive. Importantly, this legislation 
requires the VA to develop a strategy addressing the future 
needs of our veterans so we can provide the resources to ensure 
veterans have access to long-term care options, which includes 
addressing the needs of veterans with unique needs, like women 
veterans and veterans who live with traumatic brain injuries, 
or in need of medical care.
    So, Mr. Murray, I will start with you. Good name, by the 
way. What steps would you take to prepare for the growing 
number of older veterans seeking long-term care services, both 
at home and in institutional settings, and how can VA actually 
tailor their care infrastructure plan to properly serve our 
aging veterans?
    Mr. Murray. Ma'am, for the aging veterans, we need to 
invest heavily in the long-term care facilities, something that 
frankly is kind of has been overlooked in recent years, where 
we think now is the opportunity to really do that. It is a 
better model of care. There are far too many veterans that are 
in non-VA-controlled homes.
    The other one you mentioned, for women veterans, that is 
another population that is growing, and the Independent Budget 
is recommending $20 million, specifically for physical 
infrastructure changes for women veterans, but we are also 
recommending that it be put in a dedicated budget item, so it 
is not put into a general facilities fund that could be taken 
as needed, if there is a more pressing issue that comes up in a 
facility. Otherwise, these things will never get done.
    So we think that for critical things like that, for growing 
populations, they need to be assigned and left alone as certain 
budget items.
    Senator Murray. I appreciate that, and our women veterans, 
in particular, we have a large number of women come into the 
military, they are aging, they are going to need these 
facilities. We never built them and are not ready for them, so 
that is important. Thank you.
    Mr. Simms, let me turn to you. The average age of our VA 
health facilities is more than 50 years old, and by comparison, 
by the way, the median age of U.S. private sector hospitals is 
about 11 years old. So many veterans are now relying on these 
facilities to get the care that they desperately need, 
including a facility in my home state, Walla Walla, Washington, 
which I fought to keep open.
    I wanted to ask you, how is the VA making sure that the 
existing facilities have the capacity to continue serving 
veterans, and particularly our veterans in our rural areas, 
with high-quality care, instead of shuttering facilities where 
access to health care is already a challenge?
    Mr. Simms. Thank you, Senator, for that question. A couple 
of things. One is, as we talked a little bit ago about 
leveraging leasing, leasing facilities allows us to put points 
of care closer to where veterans are, including in rural areas 
where it may not make sense because you do not have the 
demographics to have a large VA facility, but standing up a 
clinic, via the leasing portfolio, is one of the ways that we 
can ensure there is access to VA, high-quality care in those 
areas.
    For places where we have existing facilities, we are 
looking at those to ensure that both the capacity and the 
condition. Tactically, we have to address things as they come 
up, but we are also looking strategically at where those 
campuses are that need the larger reinvestments and 
recapitalization efforts.
    To piggyback off of what Mr. Murray said, if we look at the 
focus areas for things like women veterans or aging veterans, 
part of the American Jobs Plan would be able to focus on those 
areas at multiple facilities across the country, to be able to 
address investments targeted at increasing access in those 
areas.
    Senator Murray. Okay. And I am really worried about 
staffing shortages. The VA operates one of the largest health 
care systems in the country. It serves over nine million 
veterans. And in order to give our veterans the care they 
deserve, VA has to be operating at full capacity. And according 
to VA's latest publicly available staffing data, VA is severely 
understaffed, even after the influx of hires due to the COVID-
19 pandemic.
    So I am not sure who can answer, but how can Congress help 
VA solve these staffing shortages and make sure that our 
veterans get the care they need?
    Mr. Simms. Thank you. That is a critical question. In many 
respects, we are facing the same thing as the public health 
care system. There is simply a shortage of providers, in 
particular those specialty providers, that we just cannot get 
to, nor can anyone else. So it is a resource that is just 
scarce to get to.
    With that said, I think the VA numbers on the staffing have 
improved, and our turnover rate is actually significantly lower 
than the private sector. Comparable private sectors have 
turnover rates close to 30 percent, and VA's is closer to 8 
percent. So our turnover rate is very good. Some of those 
vacancies are simply that normal turnover, as well as increased 
funding that we are working to fill those vacancies. But they 
are essentially new positions so they are not existing 
providers that we do not have.
    Senator Murray. Okay. Well, particularly if you can get 
back to the Committee how we can make sure we are doing what we 
need to do to make sure you have the staffing that you need, I 
would appreciate it.
    Thank you, Mr. Chairman.
    Chairman Tester. Thank you. Senator Brown.

                     SENATOR SHERROD BROWN

    Senator Brown. Thank you, Mr. Chairman, and thanks for 
holding this hearing on VA infrastructure and how important it 
is. We know that our Nation's infrastructure is more than the 
Brent Spence Bridge over the Ohio River in Cincinnati, as 
important as that is. It is more than public transit. It is 
more than water and sewer systems. It is VA infrastructure too. 
And we know that when servicemembers answered the call, the 
American Jobs Plan, the $18 billion--I heard the Senator from 
Alabama talk about the $18 billion, what you should do with it. 
Well, you will obviously put it to particularly good use.
    Experts on this panel and from organizations like RAND 
stated that VA's aging infrastructure has a major impact on 
veterans' access to health care logically. Mr. Murray's 
testimony highlights the need for additional resources for 
specialized care such as spinal cord injuries and disorders, 
and we know the number of female veterans seeking care at VA is 
growing rapidly. The VA in Cleveland has one of the best spinal 
units in the country.
    So, Mr. Simms, in your testimony--my question is for you--
you stressed the importance in the American Jobs Plan, of the 
$3 billion to address immediate infrastructure needs within VA 
facilities. How would the VA use the American Jobs funding to 
improve care for female veterans and other specialties like 
spinal cord injuries and mental health?
    Mr. Simms. Thank you, Senator, for that question. There 
would be focused investments, looking at women's health, for 
example, where we would be looking to both increase access as 
well as improve existing facilities for things like privacy, 
separate entrances, and things like that, to address some of 
the concerns of women veterans being able to access services 
that exist today. It would also include capacity expansion, to 
ensure that we have got the right clinics and the size of those 
clinics to be able to support the women veterans.
    So that is one piece of it. More broadly, I think a lot of 
the challenges we face--and Ms. Hassan had given an example of 
that, of facilities where there are utility issues that force 
closures or denial of service. A large portion of that 
immediate investment would be looking at those core 
infrastructure utility system needs to ensure that we are 
operating efficiently and effectively in the existing medical 
centers, so that those types of care can be delivered, whether 
it be specialty, primary care, inpatient, or outpatient.
    Senator Brown. Thank you, Mr. Simms. My other question is 
for Ms. Murray and Mr. Von Ah. You both detailed steps that the 
VA can take to make improvements to address changes in 
demographics and adapt to new specialties. Walk us through, 
each of you, if you would, Mr. Von Ah and Mr. Murray, walk us 
through some of the staffing and resource improvements that you 
recommend. Tell us how these changes would improve veterans' 
access to health care.
    Mr. Murray. Senator, the first thing that we really 
recommend is building internal capacity for VA to actually 
perform the work. Right now the current backlog, there is no 
plan to address the backlog for infrastructure. When we face 
backlogs with appeals, when we face C&P exam backlogs, right 
now there is a national records backlog, there is always a 
plan. It involves increased staffing, overtime, additional 
resources so that they can defeat that backlog.
    Right now there is no plan for that for VA infrastructure. 
We think building the capacity in the work force to perform the 
work is critical. Right now there is a $60-plus billion 
backlog, and $22-$23 billion of that is maintenance alone.
    Coming forward, in the next couple of years, we have AIR 
commission that is going to produce a report with 
recommendations. If those recommendations cannot be acted upon 
for years, then the report will be worthless. It will be a 
waste of time if the AIR commission results cannot get acted 
upon for 10 more years.
    So building the internal capacity, increasing the slots to 
hire to do the work at VA I think is No. 1 to address those 
needs.
    Senator Brown. This money will enable you to carry you to 
answer that report, in a sense.
    Mr. Murray. I am sorry. What was that, sir?
    Senator Brown. So these dollars will help you answer that--
carry that out, carry that report out.
    Mr. Murray. Yes.
    Senator Brown. Okay. Mr. Von Ah, if you would respond too.
    Mr. Von Ah. Sir, I thank you for that question. So just 
looking to the needs and expectations of veterans, you know, we 
have done some work looking at the ability for VA to 
incorporate those needs and expectations into facilities 
planning. VA has taken some steps to at least make it clear to 
local facility planners how these gaps in their facility needs 
are derived and understood in terms of the health care models 
that VA has and how that translates into space needs.
    But we also have some outstanding recommendations related 
to them being able to identify and incorporate veterans' 
expectations and changing needs into some of that facility 
planning. So we think those recommendations could help them to 
sort of bridge that gap in terms of the types of things that 
you are talking about, in terms of women's care and specialty 
care that is needed in the community.
    With respect to staffing challenges, I think, you know, 
again, it is just incredibly important that, you know, from my 
perspective we only look at it from the facilities side of 
things, so we are looking at the vacancies in facility managers 
and vacancies in engineering and maintenance staff. At 
facilities that I visited where you have robust staff, you see 
the ability to respond to some of those needs very quickly and 
very efficiently, and where you do not have staff you see 
difficult choices about what do we fund, what do we fix, what 
do we put off, and what do we defer.
    So, you know, the idea that VA has some flexibility in 
terms of creating a new health care engineering position has 
used some flexibilities in terms of its ability to offer higher 
pay. I think those are all good things but it will remain to be 
seen whether that really addresses some of the problems out 
there in specific communities.
    Senator Brown. Thank you. Thank you, Mr. Chairman.
    Chairman Tester. Senator Blumenthal.

                   SENATOR RICHARD BLUMENTHAL

    Senator Blumenthal. Thanks, Mr. Chairman, and thank you for 
having this hearing. Very, very important. And let me just come 
right to the point. In West Haven--I hope you are familiar with 
what happened there--an explosion killed two people, including 
a member of the Veterans Affairs staff, a veteran of military 
service, not long ago, and the OSHA report, which has recently 
been released, found a number of errors in maintenance and 
repair procedures. But essentially that explosion was a result 
of an aging, decrepit system of steam pipes. It is only one 
example of why that whole structure, the West Haven VA 
facility, needs to be rebuilt.
    I have advocated this reconstruction for years. It is a 
1950's building with a more modern shell. It has been afflicted 
with insect infestations because of structural defects in its 
walls. It is insufficiently strong to accommodate the most 
modern surgical equipment. There are a variety of different 
structural problems that make it inadequate. And I should add 
the VA staff, the doctors, the nurses, the administrative staff 
are world-class. They are doing their best with this 
inadequate, aged, decaying facility, and they are heroes.
    But the facility needs to be rebuilt, and two people are 
dead now because of a failure to take necessary steps to invest 
in this infrastructure. It is horrifying and outrageous.
    So I would like to know, Mr. Simms, what will be done in 
this budget to provide the investment necessary to rebuild this 
facility? Connecticut has 200,000 veterans. VA systems employs 
2,500 dedicated staff. And I think that this facility should be 
at the very top of any list, and there should be a list of VA 
facilities that need reconstruction.
    Mr. Simms. Thank you for that question, Senator. The 
tragedy at West Haven obviously has many immediate impacts that 
we are working to address, both at West Haven as well as across 
the portfolio, to do our best to ensure incidents like that do 
not happen.
    With that said, your point is well taken in that the 
facility, in and of itself, is an aged facility, and the 
infrastructure there is a contributing factor to incidents like 
this.
    So let me talk specifically about West Haven, and that is 
we have identified a specific project that is included in our 
5-year development plan for major rehabilitation work at the 
West Haven facility.
    Senator Blumenthal. What about the timetable for it?
    Mr. Simms. I believe Fiscal Year 2023 or 2024 is the 
construction investment that was included in the budget.
    Senator Blumenthal. Well, I would like a specific 
commitment that it be done by date certain. I would like a 
timetable for what the planning and design and execution would 
be. I am saying this with all due respect, but I have said it 
years previously. And I do not want to see more deaths occur 
there as a result of delay. So if you could get me something in 
writing I would appreciate it.
    Mr. Simms. I will happily do that, Senator.

VA Response: Planning - The planning contract for West Haven major 
construction project was awarded in March 2020 and completed in 
September 2021. The required National Environmental Policy Act study is 
ongoing and is scheduled to be completed in Q4 fiscal year (FY) 2022. 
VA approved the project to proceed from the planning to the design 
phase March 2022.
Design - The contract for the Architect/Engineer (A/E) is on track to 
be awarded by the US Army Corps of Engineers (USACE) in Q3 FY 2022. The 
cost estimate for this project is over $100M, hence the design and 
construction will be transferred to the USACE for execution.
Construction - The construction contract will be ready for award Q3 FY 
2024. Detailed cost and schedule forecasts will be developed by the A/
E.

    Senator Blumenthal. Thank you. Let me just ask, quickly, 
about another aspect of infrastructure there. Several years 
ago, the West Haven VA had a flood that impacted its sterile 
processing facilities, which resulted in staff being forced to 
conduct sterile processing in trailers and also farm it out to 
nearby hospitals, like Yale New Haven.
    In 2018, investigations by the Joint Commission and the 
VA's National Program Office for Sterile Processing found that 
the facility did not meet its standards to properly sterilize 
surgical equipment and that the facility could not accommodate 
patient needs. As a result, a proportion of surgeries were 
outsourced. The OIG also found that VA leadership decisions to 
remedy this situation impeded progress and created a divide 
between clinical staff and administration. No staff with either 
the SPS or operating room experience were included in the SPS 
program. And I understand now the current location of the 
surgical sterilizing procedure is in the basement, that it is 
unsuitable because of intense humidity and high temperature 
that are creating mold and overall hazardous environment for 
that processing.
    Again, disappointingly, construction has been delayed for a 
new addition to the Sterile Processing program, and it has been 
assigned and is currently in the project book stage. The 
initial cost estimates were completed in 2015, and the latest 
estimates would place a completion date toward the end of 2028.
    I have, again, asked repeatedly, and been assured it would 
happen well before that date, and I would like, if you know 
now, when this work will be completed. The retrofitting of the 
trailers for the temporary solution has also been delayed. Can 
you tell me what will happen by what date?
    Mr. Simms. Senator, I do not have that information but I 
will get back to you with that, in writing.

    VA Response: Initially the major construction project scope 
included the sterile processing services. This is now being completed 
through a minor construction project with design obligated in March 
2020. Construction is estimated to be awarded in FY 2024 and completed 
by FY 2026. Sterile processing services are temporarily established in 
an onsite trailer until construction of the permanent facility is 
completed.

    Senator Blumenthal. I appreciate that. Thank you.
    Chairman Tester. Senator Blackburn.

                    SENATOR MARSHA BLACKBURN

    Senator Blackburn. Yes, Mr. Chairman. Thank you so much. I 
appreciate this.
    Let's see, Mr. Orndoff, I wanted to come to you. As you 
know, in Tennessee and there in Nashville we are pretty much 
the hub for our Nation's hospital management companies. And I 
know when we talk with them they talk a good bit about 
providing world-class service and the importance of budgeting 
and planning and execution, and how that has been so 
instrumental in their long-term success. And I feel like, as I 
look at the VA, this is truly something that is missing for 
them.
    And, Mr. Simms, I am going to come to you next on this OIG 
report on the deficiencies in reliable physical infrastructure 
cost estimates for the electronic health records, and looking 
at VA infrastructure.
    And I think, Mr. Orndoff, what I would like from you, for 
the record, is how do you identify both these electronic or 
cyber infrastructure, how do you identify the local physical 
infrastructure, how do you maintain this system of upkeep and 
maintenance, which sometimes, in the Federal process, we build 
it, it is new, but then it does not have the proper ongoing 
maintenance. And I think it would be helpful for you to just 
talk for a moment about what your process is, if you can give 
us a minute on that.
    Mr. Orndoff. Thank you, Senator. We try to have a lifecycle 
perspective. I think that is common knowledge that everybody 
would want to be there. It is a bit challenging because----
    [Audio interruption].
    Mr. Orndoff. Okay. I should continue?
    So what we try to do is to think about what is the 
sustainment cost as part of the overall decision to execute on 
a particular project, so we are not just focused on up-front 
capital costs but lifecycle and sustainment cost as part of the 
overall solutions.
    It is challenging to do. There are different types of money 
and so forth, and I understand that there are competing 
priorities, obviously, for resources. But it does take the 
vision to do that. It does take the commitment of leadership to 
follow through to do that and the constancy of purpose to 
deliver, and that is a constant vigilance that the organization 
needs to have.
    In the private sector it is a little more straightforward 
on how we can plan, acquire, and operate. I understand 
certainly having been at VA in my past the challenges of having 
that longer-term view, and the magnitude of stakeholder input 
that you have to factor in.
    But we have come to understand within Kaiser Permanente 
that the right answer is to make the lifecycle investments, and 
as we plan facilities we understand that there is a run cost 
and a tail to that, and we want those huge investments to have 
the absolute longest service life possible. And so by 
proactively maintaining that infrastructure you will get the 
maximum life, you will get the minimum disruption from 
breakdowns and unexpected events, and it actually, over the 
long term, reduces cost.
    So it is hard to have the discipline and rigor to do it, 
but we know we need to and we have a steady stream in that 
direction.
    Senator Blackburn. Not to interrupt but, Mr. Simms, I want 
to get to you. And looking at this report on the deficiencies, 
you know, we all know that really having fine-tuned and precise 
cost predictions are something that you are not going to be 
able to do specifically. The report points that out. But it is 
something that you need to be able to ballpark. And it said in 
the report, additionally, that VHA leaders did not know the 
true state of their physical infrastructure at these 
facilities.
    So we are trying to move forward with 21st century health 
care provisions, and these electronic records, but you also 
have the physical facility issue. So why was the state of these 
facilities not known, and what steps are you taking to improve 
the SCIP process that should have been essential to this?
    Mr. Simms. Thank you, Senator. So let me address that in 
two parts. First is we actually do know the condition of our 
facilities. We have a recurring assessment process that we 
evaluate all of the systems and subsystems of our building on a 
regular, 3-year cycle, that identifies what facility systems 
are in good condition, poor condition, and what it would cost 
to fix or get those to a like-new state.
    The challenge, and the second point, with the EHRM 
infrastructure is it was not about the condition of the 
facilities. It was whether or not the facilities met the new 
standard that was necessary for deployment. So a simple example 
would be we have a wiring closet that has a HVAC capacity in 
it, but if it was not the right standard for EHRM, we needed to 
do work. We needed to do investment to ensure the deployment 
could happen.
    So the state of the facilities that I believe the IG report 
references to is whether or not they met the standards or the 
requirements to deploy, not necessarily the physical condition 
of the facilities, which I do think is included in the SCIP 
process.
    Senator Blackburn. Okay. Thank you. I know I am over time. 
Thank you, Mr. Chairman.
    Chairman Tester. Thank you. Is Senator Manchin on? He is 
not. Okay.
    So I think we will close this out. I do want to thank the 
witnesses from the GAO, VFW, and from Kaiser, and the VA for 
being here. This hearing demonstrated VA has a long way to go 
to meet the veterans' needs for modern facilities, and I think 
we have identified steps the VA needs to take and actions that 
we need to get done here in Congress. I look forward to working 
with the VSOs, my colleagues, and the VA in providing the VA 
the funding and the authorities they need to be successful 
while continuing rigorous oversight to ensure the funds are 
used wisely on construction projects, to get those projects 
across the line.
    On that note I will keep the record open for a week.
    One final thing before I adjourn, about a month ago this 
Committee held a hearing on four nominations: Mr. Remy, who is 
to be the Deputy Secretary in charge of the JAC--and, by the 
way, if the VA would communicate with the DoD and the DoD would 
communicate with the VA, it would solve a lot of the problems 
we deal with here every day. That is his job. He is also going 
to head up the IT. We all know, on this Committee, the IT 
challenges that the VA is having right now with electronic 
medical records and other things, scheduling and others.
    The next person was Ms. Ross, who is Congressional Affairs. 
That is the person who can help us get legislation done so 
everybody can achieve success, and we can do legislation that 
actually meets the needs of our veterans that the VA can 
implement. Important position also.
    And Ms. Donaghy, who is going to be the head of the 
Accountability and Whistleblower Protection. I do not need to 
tell folks how important that position is. It is critically 
important.
    And last but not least, General Quinn, who is due to be the 
Under Secretary for Memorial Affairs. It is obvious what this 
person does. In some of the toughest times in these people's 
lives, when a loved one passes, the Director of Cemetery 
Affairs is critically important in that.
    Well, long story short, somebody on this Committee has put 
a hold on those four nominees. I do not know who that is. I 
cannot find out. But I want to point out a couple of things. 
No. 1, they passed unanimously from this Committee. No. 2, you 
are not hurting those guys. You are hurting the veterans they 
serve. You are hurting the VA. And if we are going to hold the 
VA accountable, it is patently unfair not to give them a full 
slate of employees that are confirmed so that we can hold them 
accountable.
    And finally, if they are being held because the VA is not 
stepping up and doing something, let this Committee know. If it 
is a reasonable request, more than likely we will help you get 
the VA to achieve that goal. If it an unreasonable request, 
then, of course, if it is without merit then that is very 
unfortunate, because these are four good people that passed 
this Committee unanimously, and I would request whoever has a 
hold on them to either come tell me or release your hold. If 
there are problems with the VA we will deal with that in a 
separate arena.
    With that this hearing is adjourned. Thank you.
    [Whereupon, at 4:44 p.m., the Committee was adjourned.]

                                APPENDIX

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               Material Submitted for the Hearing Record
               
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