[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]



                    VA PROCUREMENT: MADE IN AMERICA

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

                                HEARING

                               before the

                      SUBCOMMITTEE ON OVERSIGHT AND 
                             INVESTIGATIONS

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS

                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION
                               __________

                     WEDNESDAY, SEPTEMBER 20, 2023
                               __________

                           Serial No. 118-32

                               __________

       Printed for the use of the Committee on Veterans' Affairs 
       
       
       
       
       
       
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                    Available via http://govinfo.gov 
                                 ______

                   U.S. GOVERNMENT PUBLISHING OFFICE 
                   
54-153                     WASHINGTON : 2024 















                     COMMITTEE ON VETERANS' AFFAIRS

                     MIKE BOST, Illinois, Chairman

AUMUA AMATA COLEMAN RADEWAGEN,       MARK TAKANO, California, Ranking 
  American Samoa, Vice-Chairwoman      Member
JACK BERGMAN, Michigan               JULIA BROWNLEY, California
NANCY MACE, South Carolina           MIKE LEVIN, California
MATTHEW M. ROSENDALE, SR., Montana   CHRIS PAPPAS, New Hampshire
MARIANNETTE MILLER-MEEKS, Iowa       FRANK J. MRVAN, Indiana
GREGORY F. MURPHY, North Carolina    SHEILA CHERFILUS-MCCORMICK, 
C. SCOTT FRANKLIN, Florida               Florida
DERRICK VAN ORDEN, Wisconsin         CHRISTOPHER R. DELUZIO, 
MORGAN LUTTRELL, Texas                   Pennsylvania
JUAN CISCOMANI, Arizona              MORGAN MCGARVEY, Kentucky
ELIJAH CRANE, Arizona                DELIA C. RAMIREZ, Illinois
KEITH SELF, Texas                    GREG LANDSMAN, Ohio
JENNIFER A. KIGGANS, Virginia        NIKKI BUDZINSKI, Illinois

                       Jon Clark, Staff Director
                  Matt Reel, Democratic Staff Director

              SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

               JENNIFER A. KIGGANS, Virginia, Chairwoman

AUMUA AMATA COLEMAN RADEWAGEN,       FRANK J. MRVAN, Indiana, Ranking 
  American Samoa                       Member
JACK BERGMAN, Michigan               CHRIS PAPPAS, New Hampshire
MATTHEW M. ROSENDALE, SR., Montana   SHEILA CHERFILUS-MCCORMICK, 
                                         Florida

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 
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of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined. 












                         C  O  N  T  E  N  T  S

                              ----------                              

                     WEDNESDAY, SEPTEMBER 20, 2023

                                                                   Page

                           OPENING STATEMENTS

The Honorable Jennifer A. Kiggans, Chairwoman....................     1
The Honorable Frank J. Mrvan, Ranking Member.....................     2

                               WITNESSES

Mr. Michael D. Parrish, Principal Executive Director and Chief 
  Acquisition Officer, Office of Acquisition, Logistics, and 
  Construction, U.S. Department of Veterans Affairs..............     4

        Accompanied by:

    Dr. Angela Billups, Executive Director and Senior Procurement 
        Executive, Office of Acquisition, Logistics, and 
        Construction, U.S. Department of Veterans Affairs

    Mr. Andrew Centineo, Executive Director for Procurement and 
        Logistics, Veterans Health Administration, U.S. 
        Department of Veterans

    Dr. Thomas Emmendorfer, Executive Director for Pharmacy 
        Benefits Management Services, Veterans Health 
        Administration, U.S. Department of Veterans Affairs

                                APPENDIX
                     Prepared Statement Of Witness

Mr. Michael D. Parrish Prepared Statement........................    21

                        Statement For The Record

The Honorable Matthew M. Rosendale, Sr., U.S. House of 
  Representatives, (MT-02).......................................    25

 
                    VA PROCUREMENT: MADE IN AMERICA

                              ----------                              


                     WEDNESDAY, SEPTEMBER 20, 2023

             U.S. House of Representatives,
      Subcommittee on Oversight and Investigations,
                            Committee on Veterans' Affairs,
                                                   Washington, D.C.
    The subcommittee met, pursuant to notice, at 3:16 p.m., in 
room 360, Cannon House Office Building, Hon. Jen Kiggans 
[chairwoman of the subcommittee] presiding.
    Present: Representatives Kiggans, Radewagen, Mrvan, and 
Pappas.

      OPENING STATEMENT OF JENNIFER A. KIGGANS, CHAIRWOMAN

    Ms. Kiggans. Good afternoon. I apologize for the delay, but 
thank you all for being here today as the subcommittee conducts 
this important oversight hearing.
    In Fiscal Year 2021, VA ranked fourth among Federal 
agencies in procurement dollars obligated at $34.3 billion and 
second in number of contract actions at $1.8 million. To put it 
simply, the VA buys a lot of stuff, from personal protective 
equipment (PPE) to pharmaceutical drugs, hearing aids, and much 
more, VA's mission to care for our veterans comes with 
tremendous purchasing power.
    Congress and both this administration and the Trump 
administration made it a priority to ensure the Federal 
Government is buying American made products to the greatest 
extent possible. Buying from manufacturers in Virginia's Second 
congressional District, Indiana's First District, Mr. Mrvan's 
district, and every other district in America not only supports 
American workers, but makes VA's supply chain more secure.
    As we saw during the COVID pandemic, a large percentage of 
medical supplies are manufactured overseas, and VA is extremely 
vulnerable to shortages if global supply chains are 
interrupted. We cannot afford to ignore this glaring weakness. 
In response, Congress passed the Make PPE in America Act, which 
changed how the VA buys PPE by requiring the VA to buy from 
domestic manufacturers on a minimum 2 year contract. I am 
concerned that a year and a half after this law was enacted, 
there appears to be very little that has changed. I understand 
that new legislation takes time to implement, but issues at VA 
do not normally get better with time.
    A recent Inspector General report highlighted significant 
issues with VA's compliance with decades-old made in America 
laws. I recently heard from industry leaders that as of a few 
months ago, the VA did not even seem to have a plan to 
implement the law, which is concerning. I am eager to hear from 
our witnesses on what progress the VA has made in the past 18 
months, and what we can expect going forward, because American 
companies and veterans they hope to serve do not have decades 
to wait.
    Many American companies have overhauled their production 
lines to meet VA's demand for world class goods and supplies. 
The VA must similarly change their procurement process to step 
up their outreach and market research to identify opportunities 
to work with American companies. I am concerned many of these 
companies will be forced to close down their operations if the 
VA does not immediately follow the law and take a more 
proactive approach to buying American.
    With that being said, I know that there are occasions when 
the VA needs to buy critical supplies from outside our borders. 
The VA has many waivers and exceptions at their disposal. If 
the VA is unable to buy the materials they need from domestic 
manufacturers quickly and at a reasonable price, they can use 
these waivers. Waivers are stop gaps that allow VA to serve 
veterans even when American supplies are not available. I 
support having waivers as an option because even when supply 
chains fail veterans must come first. While I have no issue 
with the VA using waivers, I am concerned that reports show 
they are sometimes a crutch for VA bureaucrats to cut corners 
rather than buy American. The waiver process needs to be 
transparent so the public can be confident that VA is following 
the law and buying quality American supplies whenever possible. 
Waivers must also be limited so American companies can invest 
with the confidence that VA will buy domestically whenever it 
is practical, not just when it is convenient.
    I would also like to note my concern over our reliance on 
foreign manufactured pharmaceuticals, especially those made in 
China. As a nurse practitioner, I know firsthand that many 
Americans, especially our older population, rely on life saving 
drugs. VA alone cannot fix this issue, but I look forward to 
hearing how the VA intends to help incentivize onshoring 
pharmaceuticals in solving this dangerous situation.
    Ultimately, as the chair of the oversight arm of this 
committee, it is my job to ensure that the VA is spending its 
procurement dollars wisely and in compliance with Made America 
laws. I take this matter seriously, and I trust the witnesses 
do as well.
    With that, I now recognize Ranking Member Mrvan for his 
opening comments.

      OPENING STATEMENT OF FRANK J. MRVAN, RANKING MEMBER

    Mr. Mrvan. Thank you, Chair Kiggans.
    The importance and impact of Buy America for the Federal 
Government is something that is felt at a very local level in 
Indiana. It is because of these laws, which were reinforced by 
the Bipartisan Infrastructure Act, that we can advocate for the 
use of the American steel in Federal infrastructure projects. 
This impacts the lives and livelihoods of many Americans across 
the country.
    President Biden has made investing in our manufacturing 
base and strengthening our supply chains a priority during his 
administration. The creation of the Made in America office, 
which was codified by the Bipartisan Infrastructure law, 
provides a central clearinghouse to ensure that the billions of 
dollars spent for goods and services by the Federal Government 
each year take into account investments in American industry. 
The administration, as well as the committee, understand that 
we must learn the lessons of the pandemic and ensure that 
critical supplies like PPE have a domestic manufacturing base. 
Relying on foreign products in a time of crisis is a flawed 
strategy that unfortunately was felt directly by the VA 
employees and veterans. This requires a concerted effort across 
VA to comply with the laws and the Presidential directives in 
place to provide opportunities for American companies to 
provide personal protective equipment and other supplies. 
Without a consistent demand for these products, we cannot 
ensure that American companies will be around for the next 
crisis.
    As I have discovered, since joining this committee, VA has 
had significant issues and hurdles surrounding the purchase and 
tracking of supplies. The continued overuse and reliance on 
purchase cards at medical centers hinders VA's ability to track 
whether supplies purchased are American made and provide zero 
insight on a national level to the needs and requirements of 
medical centers so that VA can use its purchasing power to gain 
cost efficiencies. The continued use of purchase cards also 
means that medical centers are also not making use of the large 
Medical Surgical Prime Vendor (MSPV) contracts and blanket 
purchase agreements. These contracts are in place for the 
benefit of the medical centers and provide greater 
accountability and insight into the medical centers and 
veterans' needs.
    I realize VA is doing their best to change course on this, 
but I would like to know how Congress can support this effort. 
We need this data for VA to ensure we are purchasing American 
products and to assist our oversight.
    Because of the decades of lack of emphasis on domestic 
manufacturing, this endeavor that I strongly support is a 
Herculean task. It is not often that both parties can agree 
that we need significant Federal investment and coordination. 
That is, what will it take to make a dent in this issue? VA 
cannot do it alone. It will require continued support from the 
White House and Congress to ensure we are investing in American 
manufacturing.
    With that, I look forward to hearing from our witnesses, 
and I yield back my time.
    Ms. Kiggans. Thank you, Ranking Member Mrvan.
    We will now turn to witness testimony.
    Testifying before us today we have Mr. Michael Parrish, 
Principal Executive Director of the Office of Acquisition 
Logistics and Construction and Chief Acquisition Officer, and 
Dr. Angela Billups, the Executive Director of the Office of 
Acquisition Logistics and Construction and Senior Procurement 
Executive (SPE), and Mr. Andrew Centineo, Executive Director 
for Procurement and Logistics from the Veterans Health 
Administration (VHA), and Dr. Thomas Emmendorfer, the Executive 
Director for the Pharmacy Benefits Management Service.
    Will all the witnesses please stand and raise your right 
hand. We will swear you guys in.
    [Witnesses sworn]
    Let the record reflect that the witnesses answered in the 
affirmative.
    Mr. Parrish, you are now recognized for 5 minutes to 
provide your testimony.

                  STATEMENT OF MICHAEL PARRISH

    Mr. Parrish. Thank you, Chairwoman Kiggans.
    Good afternoon, Chairwoman Kiggans. Ranking Member Mrvan, 
and members of the subcommittee. I am pleased to appear before 
you today to discuss the VA procurement and Department's 
compliance with domestic preference rules such as Made in 
America that govern the purchase of goods and services from 
American sources.
    As stated, joining me today are my colleagues, Dr. Angela 
Billups, the Executive Director for the Office of Acquisition 
and Logistics and our Senior Procurement Executive, Mr. Andrew 
Centineo, our Executive Director for Procurement Logistics from 
the Veterans Health Administration, and Dr. Thomas Emmendorfer, 
the Executive Director of Pharmacy Benefits Management 
Services, also from VHA.
    VA complies with the Buy America Act by following the 
standardized guidance in the Federal and VA mandates. The 
Department works diligently to purchase goods made in America 
whenever possible and we are committed to the full 
implementation of our statutory requirements. We are working in 
collaboration with other Federal entities as well as industry, 
to identify U.S. made products and to support the rebuilding of 
U.S. manufacturing capacity. As a result, the vast majority of 
what we purchase comes from domestic sources.
    As stated, the COVID-19 pandemic heightened awareness of 
our dependence on markets outside the United States for raw 
materials in the manufacture of certain products. This 
dependence is not just a VA problem, it is a national problem 
that is been decades in the making. Essential healthcare items 
such as Personal Protective equipment, or PPE, and 
pharmaceuticals are two examples where U.S. dependency on 
foreign markets over the years has actually increased in 
addition to the known information technology challenges. 
Nonetheless, VA is committed to working with other federal 
agencies to communicate to industry the importance of 
domestically produced products, as well as to identify American 
made products and support the rebuilding of the United States 
manufacturing capacity.
    In those instances when VA is unable to buy American made 
products, we carefully follow the rules and regulations and 
have established procedures for requesting a waiver or applying 
an exemption. I personally review each of these requests. For 
example, in Fiscal Year 2023 VA has requested and received 52 
waivers, 23 of which are for pharmaceutical purchases by our 
mail order pharmacy program. This is just over $9 million in 
total spend for pharmaceuticals with approved waivers for this 
fiscal year. As VA is projected to spend $5.1 billion on 
pharmaceuticals, the approved waivers represent approximately 
0.2 percent of the total pharmaceutical finished product spend 
for our mail order pharmacy program.
    It is important to note that these foreign purchases are 
our last resort, as you stated. We only approve them because 
they are in the best interest of the veterans and we cannot 
find an American source. These products are always Food and 
Drug Administration (FDA) approved and commercially available. 
VA is continuously engaged in efforts to increase opportunities 
to purchase domestically manufactured products. Many drugs, for 
example, require ingredients that come from or are manufactured 
in markets outside the United States. With the veteran's 
healthcare needs as our priority, it is not always possible to 
obtain the required medication from a domestic source. The Food 
and Drug Administration Office of Pharmaceutical Quality's most 
recent annual report states that only 42 percent of 
pharmaceutical manufacturing sites are U.S. based, with the 
rest of the world accounting for 58 percent.
    However, compliance is not enough, and neither is the 
status quo. We are on offense when it comes to ``Made in 
America'' compliance. We are proactively increasing our 
outreach efforts and partnerships with American industry, 
resulting in invaluable industry insights on the domestic 
availability of products, market trends, best practices and 
innovations. Our pathfinder tool that you may be aware of, 
pathfinder.VA.gov, is one method of capturing this market data. 
Another example is VA is piloting a program to find 
domestically manufactured drug products.
    VA also remains committed to exploring and supporting with 
our industry partners all opportunities to make PPE in America. 
The journey requires support beyond the Federal healthcare 
space of VA to achieve that goal while maintaining supply chain 
resiliency and to reduce dependency on overseas markets for 
these PPE requirements. In April 2023, VA participated in a 
Make PPE in America Industry Day hosted by the Department of 
Health and Human Services (HHS). At that joint event, all 
Federal agencies expressed their commitment to work toward full 
implementation of the Make PPE in America Act, with the end 
State of buying 100 percent of Made in America PPE. 
Unfortunately, in many circumstances, we found that certain 
inputs of PPE are not yet manufactured in the United States, as 
much of the raw materials are manufactured overseas.
    Our efforts also extend beyond PPE and pharmacy as we work 
in support of increasing the purchase and manufacture of all 
products made in America. Regarding infrastructure and the Buy 
America, Build America Act, to date, we indeed have had only 
two waivers, and that is because we are complying with the law. 
We have incorporated construction clauses in all our contracts 
and are enforcing that America made materials are used in all 
of our construction projects.
    Additionally, we are working closely with our interagency 
partners to address foreign owned and controlled interests, to 
identify and mitigate cybersecurity vulnerabilities, as well as 
potential threats to our supply chain, and to protect our 
veterans' information, both personal and health data.
    As a Chief Acquisition Officer and Senior Accountable 
Official for the Department, I am a very strong proponent of 
purchasing products that are made in the United States, and I 
welcome all industry partners who can meet the FDA and Made in 
America compliance requirements. Additionally, we embrace the 
opportunity to continue to partner with you and your staff, as 
well as the White House to improve our national manufacturing 
base. Our veterans deserve no less.
    Chairwoman Kiggans, Ranking Member Mrvan and members of the 
subcommittee, I agree with your concerns, and I thank you for 
the opportunity to speak about VA procurement and the 
opportunities to increase manufacturing production in the 
United States and to reduce our dependency on overseas markets 
for certain raw materials and finished products.
    My colleagues and I are pleased to answer any questions you 
may have.

    [The Prepared Statement Of Michael Parrish Appears In The 
Appendix]

    Ms. Kiggans. Thank you, Mr. Parrish.
    We will now move to questions, and I yield myself 5 minutes 
first.
    A September 2022 Office of Inspector General (OIG) report 
detailed issues with Buy American Act compliance at Regional 
Procurement Office Central. The report found that ``contracting 
officers did not always meet the intent and requirements of the 
Buy American Act because of insufficient oversight and 
training.'' The OIG found over half of sample contracts and 
associated files contained evidence of non compliance with the 
Buy American Act and associated laws, regulations, and 
policies.
    Dr. Billups, what has the VA done to correct this?
    Dr. Billups. The VA actually started working on the Buy 
American Act (BAA) and trying to make some corrections because 
we actually received a similar finding in the 2018 timeframe 
from Government Accountability Office (GAO). One of the things 
that we did at that time, we established some new training. In 
addition to establishing the new training, we did a stand down 
day, to say 100 percent of the workforce needed to attend the 
training, and the BAA was part of that training at that time.
    Some of the things that we also did at the end of that--
going into 2020, we did a compliance review so that we could 
see how we were doing. We did find that we were not doing as 
well as we had hoped to do. So, you fast forward to 2021 when 
Infrastructure Investment and Jobs Act (IIJA) was passed, some 
of the things that we did then: we took all of the information 
that we had learned from the previous updating of the training, 
as well as helping people to understand what are the things 
they should do, we implemented some new guidance, we put some 
tools into the guidance so that they would know the things they 
needed to think about when they were making these purchases.
    In addition to that, at the beginning of Fiscal Year 2023, 
all the information that we had learned, we established an 
innovation lab where there was participation across all of the 
buying activities. Everyone had to have a representative in 
that innovation lab so that we could all understand the 
problems are, what are the things that we need to do. We 
implemented those things in the 2023 timeframe, and we are 
already scheduling a lessons-learned as it relates to the Buy 
American Act, IIJA, the changes for Fiscal Year 2024. The 
planning started for that in September, and of course, we will 
let the buyers get through the end of the Fiscal Year and we 
will start that new innovation lab. Hopefully we will learn 
something today that will also be useful for that purpose.
    Ms. Kiggans. Great.
    Could you share one of or some of what those lessons 
learned were? Do you have maybe a few top three or four?
    Dr. Billups. Some of them was that people just did not 
understand the--like in the Buy American Act itself, so much a 
percentage of the materials and those percentage of those 
materials have changed over the years now that there are 
emphasis on Buy American. They did not understand the 
difference between the manufacturer in America and the 
component piece and putting those two things together. They did 
not really understand what they were looking at.
    Some of the other areas was sometimes people would look at 
the Trade Agreements Act and the Buy American Act and there was 
some confusion between those two Acts. Then you turn around and 
throw IIJA on top of that, which is a little different from 
even Buy American in 100 percent components, 100 percent 
manufacturing. We continuously reach out. I have my compliance 
group to just look at all of the different awards that we are 
making so that we can make sure we are following. When we find 
there is a compliance issue, we immediately reach out to those 
heads of those contracting activities.
    Ms. Kiggans. Some continuous training, it sounds like, and 
oversight.
    Dr. Billups. Yes.
    Ms. Kiggans. I am glad to hear the VA is taking the issue 
seriously.
    However, the Make PPE in America Act went into effect 18 
months ago and brought about significant changes to how we buy 
PPE. I am concerned the VA's past issues complying with the Buy 
American Act do not bode well for the Make PPE in America Act 
implementation.
    Mr. Parrish, has your office published any guidance on the 
Make PPE in America Act yet?
    Mr. Parrish. Ma'am, let me go back to--if I can respond 
also to your previous question, just other data points so you 
are aware, is we have submitted for closure those open items to 
the OIG as far as the training, and we have also had ongoing 
trainings. We said we just had our nationwide enterprise-wide 
acquisition workforce summit, where Made in America training 
was reinforced, was retrained there.
    When it comes to the PPE Made in America Act compliance, 
let me pass that off to Mr. Centineo and he could talk more 
specifically about that.
    Mr. Centineo. Thank you for that question.
    For Made in America, as was discussed earlier, in April we 
met with all of our Federal partners, we engaged with industry. 
Over 600 participants were in the event with the Federal and 
the industry partners that were there. We have continuous 
outreaches, we have biweekly engagements with those folks that 
are actually vendors, suppliers, and manufacturers with the VA. 
We continue to have that outreach every 2 weeks with our 
programs that are within the Medical Surgical Prime Vendor 
Program, which was mentioned earlier.
    Then the larger purview is the PPE industry. In that PPE 
industry we have got about 1,500 products for our product list 
that we are expanding to look at. We have inputted, and we have 
asked for self-certification, which we have received 109 
products on our product list self-certified by vendors to say 
that they are 100 percent Made in America. We continue to have 
an outreach every single time. We let our folks know if there 
is a product that is out there, please let us know, because we 
want to move in the direction where industry is so that we are 
absolutely compliant with that.
    As was mentioned earlier in some of the opening remarks, 
this is a decades long challenge, so industry realizes it and 
they are leaning toward us the same way we are leaning to them 
to be partners in this.
    Ms. Kiggans. My time has expired. Thank you very much.
    I would now yield to Ranking Member Mrvan for his 
questions.
    Mr. Mrvan. Thank you, Chairwoman.
    Mr. Parrish, as part of the bipartisan infrastructure law, 
the Build America, Buy America Act re-emphasizes the 
requirement for Federal infrastructure to use domestically 
produced steel, which I am a huge proponent of. Can you explain 
to me or to the committee how you are overseeing the use of 
U.S. steel on all VA infrastructure projects?
    Mr. Parrish. Thank you for that question, sir.
    As I mentioned that we only have two waivers in place. We 
are mandating that the Made in America material requirements, 
in particular, are covered on all our construction projects.
    The way we do that is, we have our resident engineers for 
the major construction projects. They are onsite and they 
validate the bill of materials, and they ensure that all the 
products that are coming into the system to include steel--
because I agree with you that it needs to be America made 
steel--they are indeed America made. The other part that we 
have is we have an Indefinite Delivery Indefinite Quality 
(IDIQ) contract, and we have 13 service disabled veteran owned 
small businesses around the Nation that handle our construction 
management services. Part of that independent review is also to 
make sure that we have a double check on ensuring that with the 
Buy America Build America Act.
    Mr. Mrvan. Okay.
    There is a current backlog for infrastructure projects at 
the VA, and I hope that Congress can put more of an emphasis on 
funding these requirements. They directly benefit veterans as 
well as domestic manufacturers.
    Mr. Parrish, are you aware of what the current backlog of 
infrastructure projects at the VA would cost?
    Mr. Parrish. Yes, sir. We have had significant discussions 
about infrastructure where we are looking at the next coming 
years as being our year of infrastructure. As you are well 
aware, that our facilities debt, if you will--the average age 
of our facilities are over 60 years old when the average age of 
civilian hospitals are approximately 18. We have a lot of 
challenges on maintaining and ensuring that we properly size 
and focus on the--with the The Sergeant First Class Heath 
Robinson Honoring our Promise to Address Comprehensive Toxics 
(PACT) Act in particular--on where our veterans are moving to.
    I am aware, and I believe that we have other presentations 
for you at different dates for that.
    Mr. Mrvan. Okay.
    Then my follow-up question, do you know how much the VA has 
appropriated for infrastructure projects in Fiscal Year 2023?
    Mr. Parrish. I do not have that off top of my head, but I 
could find out for you, sir.
    Mr. Mrvan. Okay.
    With that, I yield back.
    Ms. Kiggans. Thank you very much.
    The chair now recognizes Ms. Radewagen for 5 minutes.
    Ms. Radewagen. Thank you, Chairwoman Kiggans, Ranking 
Member Mrvan, for holding this hearing today. This is an issue 
which is very important to my home district.
    The administration's overuse of exemptions harms local 
economies like American Samoa's fishing and canning industry. 
We are in direct competition with foreign processors who 
underpay their workers and have lower standards for illegal and 
unreported fishing. This not only harms our economy and the 
environment, but a lack of support for American industry and 
self sufficiency opens us up to national security concerns. 
Unscrupulous actors, such as China, who do not have the same 
commitment to quality and safety as the U.S., will capitalize 
on every bit of business we cede to other countries, be that 
directly or indirectly.
    Our agenda today focuses on VA procurement, but the 
importance of upholding the Buy American Act across the board 
cannot be understated.
    These questions are for any of the VA witnesses.
    Roughly how many nonavailability waivers has VA granted 
since Executive Order (E.O.) 14005 was issued in January 2021?
    Mr. Parrish. I did mention in my hearing, ma'am, that for 
the year, we have had 52 waivers. The full--since 2021. I do 
not know if we have--we will have to take that for action and 
get you information.
    Ms. Radewagen. What types of products has VA historically 
requested non availability waivers for? Excuse me.
    Mr. Parrish. Sure. Since they come to me personally, like I 
said, I review every single one of the packets and that, you 
know, gets through a rigorous process through Dr. Billups' 
organization and mine. It is always started--you know, as I 
say, acquisition is a team sport. Those requirements start at 
the clinical level and are clinically driven for how we serve 
our veterans. Half of them or majority of them are 
pharmaceutical, as I mentioned in my initial address. Also we 
have quite a few of medical devices that we have come through.
    Ms. Radewagen. Okay. Anybody else want to jump in?
    What steps has VA taken to identify domestic producers of 
these types of products and what groups have you worked with?
    This is for any of the witnesses.
    Mr. Parrish. Sure. I mentioned mine, so I will pass it off 
to--let me start with Mr. Centineo, and he could talk about 
the--what we are doing with medical and maybe pass it off to 
Mr. Emmendorfer for pharma.
    Mr. Centineo. Sure. We have continuous outreaches. We have 
one of the great partners that we have is a coalition for 
government procurement, a major nonpartisan group that meets 
with us, and it is small and large businesses, and we engage 
with them continually. We get feedback from them because of the 
fact that they have a large market share of the medical supply 
business, both supplies and equipment. We are able to have 
those engagements with that particular group. Then we also do 
it with, as I mentioned earlier, for our medical supply 
program, and that is a continual process as we move toward our 
next generation of our Medical Surgical Prime Vendor.
    I will pass it to Tom.
    Mr. Emmendorfer. Thank you for the question.
    We do have a pilot that was initiated as a joint Federal 
initiative with the White House and the Made in America Office. 
We selected two drugs from the Food and Drug Administration's 
drug and biologic essential medicines, medical countermeasures, 
and critical inputs for the list described in section three of 
the Executive Order 13944. The two drugs that we selected were 
atropine injection and hydralazine injection. The reason that 
we selected those drugs is because they are injectable drugs, 
have been known to be prone to drug shortages, and so we have 
developed those clinical requirements and giving a preference 
toward domestic manufacture.
    The reason that we just started with two for the pilot is 
when you look at the Food and Drug Administration Center for 
Drug Evaluation and Research report on the state of 
pharmaceutical quality, they estimate that 52 percent of the 
essential medicines are completely reliant on foreign 
manufacturing sites. That means that we are really--VA, we are 
trying, but we also are moving at the speed of industry.
    When you look at the report, about 8 percent of the 
essential medicines, the critical input, the active 
pharmaceutical ingredient that makes up the final drug dosage 
form, those are made solely domestically. Then when you look at 
the manufacturing of the final dosage form, that goes up to 
about 18 percent being available completely domestically. If 
the pilot is successful, we will definitely look at expanding 
it.
    Mr. Parrish. I will also add Congresswoman, that we work 
very collaboratively with the Made in American office and the 
White House, along with our other partners, both industry and 
other Federal agencies.
    The other thing, because I am actively pursuing American 
products, and as I mentioned in my original testimony, that 
some of the concerns is there are some American manufacturers 
but they are not fully through the FDA approval process. I 
think that is something that we can help them with or all of us 
as government can help with.
    The other part is, as I mentioned, Pathfinder. We created 
this tool mainly to be able to capture new manufacturers and 
new vendors for us. We have to date had about 1,000 submissions 
that have helped us identify people that could actually produce 
the products for us as needed.
    Ms. Radewagen. Thank you, chairwoman.
    I yield back.
    Ms. Kiggans. Thank you, Ms. Radewagen.
    The chair now recognizes Mr. Pappas for 5 minutes.
    Mr. Pappas. Thank you very much.
    This subcommittee has had several hearings over the last 
few years on supply chain modernization. There were concerns 
before the pandemic when VA acquisition was added to the high 
risk list, there were certainly serious concerns during the 
pandemic when we saw widespread disruptions to the availability 
of the supplies that VA needed, and obviously since as efforts 
to modernization unfortunately have not moved forward as 
quickly as many on this committee would like. We thank you for 
your work and your commitment to getting this right.
    I am hearing issues from veteran owned small businesses 
around this matter where medical centers are continuing to use 
purchase cards rather than some of the already competed tools, 
MSPV and blanket purchase agreement vehicles. I think this 
presents a real challenge for us to be able to track purchases 
and know exactly what we are buying and how we are buying 
American made products wherever possible.
    I was wondering if the panel could answer that question 
around the purchase cards and what it will take to change 
things at VA to get away from this or to have better 
transparency into what we are actually purchasing with these 
cards?
    Mr. Parrish. Yes, thank you for that question, Congressman 
Pappas.
    As you know, our supply chain modernization solicitation is 
ongoing and one of our known gaps, as you are well aware, when 
we started the supply chain modernization effort, is our lack 
of enterprise visibility into inventory management and 
inclusive of the Made in America aspect. You will note that the 
four key deliverables as a reminder of the supply chain 
modernization effort is enterprise visibility of inventory, so 
across all systems, it is also enterprise visibility of asset 
management, which is our capital equipment as well as our 
facilities, enterprise visibility of order management, and that 
gets to how are we buying things, and then the final one is 
this enterprise visibility, supply chain risk management.
    I glanced over the idea of the foreign own controlled 
interest concerns. For everyone is, awareness is the way the 
foreign actors are operating they would come in and they would 
create a shell company, an American made company, that kind of 
perceives that they are American made when they are truly owned 
by potentially bad actors. One of the big concerns that we have 
in the enterprise acquisition teaming effort that we are doing 
in the spirit of jointness and transparency in VA, is to make 
sure that all entities are well aware of what we are doing is 
integrated. We have the Office of Information and Technology 
(OIT) team, our security team, our hospital staff, all ensuring 
that if we are forced to have to buy some of these foreign 
products, that there is no way, shape or form that they are 
able to touch our data or our systems. That is coming. That 
piece we are working actively on a human basis. With the supply 
chain modernization effort, the goal is to be able to see that 
proactively and not react to that.
    I am excited for the future, but it is going to take some 
time, probably another year or so before we get to that point.
    Mr. Pappas. Do you have a sense of how big a problem this 
is?
    Mr. Parrish. For PPE using credit cards, it is about 42 
million. It is not insignificant. It is a decent amount of 
money and I personally want to find a way to--and we are 
working across the processes to ensure that we are using best 
in class contracts, the category management, and other efforts. 
It is a training effort, but it is also a way to ensure that 
our field is using the contracts.
    I think MSPV, the new Medical Surgical Prime Vendor 
contract, is in place. We have some enforcement mechanisms, as 
you know, with other kind of major programs to ensure that the 
distributor is able to deliver the products on time and on 
budget, because one of the backups or the excuses I have heard 
is, hey, we have had problems with a distributor, so therefore 
we got to use the credit card on an emergency buy. We want to 
make sure that--and I believe the new contract that is getting 
put in place should be able to stop that or significantly 
reduce that. We are focused on that effort.
    Mr. Pappas. Well, thank you. I appreciate your attention to 
that. I think it is kind of a weak link here and appreciate any 
additional information you can provide on it.
    I am just curious, when it comes to workforce and having 
the acquisition workforce that we need to be able to deliver on 
Buy America and the host of other challenges that you face in 
VA, can you tell us where we are there and what Congress can do 
to support you? Is it just appropriations? Are there other 
things that you need to ensure that we can hire up and have the 
workforce that is well trained and knowledgeable in these 
areas.
    Mr. Parrish. I think I will take that for action, come back 
and see you with a more full throated answer. My personal view 
is, I think that we again, not just VA, but as we do have gaps 
and we do have resource constraints and have dependencies, 
unfortunately, on contract staff, I believe that the hiring 
process in Federal Government could be improved to help speed 
the ability to get people through the system. We will take that 
and come back to discuss that further with you, sir.
    Mr. Pappas. Okay, thank you.
    I yield back.
    Ms. Kiggans. Thank you very much.
    We will go to round two. I have a couple other questions, 
if any other members do as well.
    Let us see. Recently I joined a domestic pharmaceutical 
manufacturing caucus that is bipartisan that we have here in 
Congress. I also was on even a panel this morning, healthcare 
panel. We were talking about some of the statistics of drugs 
that we import that are made in China. From that panel, some of 
the statistics were pretty shocking. That said, we import 
almost all of our over the counter pain medications from China, 
70 percent of acetaminophen, 95 percent of ibuprofen. On top of 
that, 90 percent of prescription medications are made in China, 
including antidepressants, chemotherapy treatment for children 
and adults, medication for Alzheimer's, HIV, diabetes, 
Parkinson's, and epilepsy. A recent U.S. Department of Commerce 
study found that 97 percent of all of our antibiotics come from 
China. These are pretty shocking statistics. Would you say that 
the VA is aligned with these statistics, or what percentages--
what we are trying really hard to at least have the VA focus on 
made in America pharmaceuticals. What percentages? Is it this 
high or is it different for the VA that relies on China for 
pharmaceutical drugs or components of those drugs?
    Mr. Parrish. I agree with your concerns, and it is a 
frustration for me personally. However, I will pass the details 
off to Dr. Emmendorfer.
    Mr. Emmendorfer. Yes. I mean definitely share your 
concerns, and thank you for the question.
    With the contracting, we have to be compliant with the 
Trade Agreements Act. We do have cases where there is also 
another law, Public Law 102-585. For your innovator drugs where 
there is not any generics available, there are cases where our 
contracting officer does need to make an award where it is 
coming from a country that is not compliant with the Trade 
Agreements Act. That is really because we need to put the 
veterans first in their health care and their needs. I do want 
to assure everyone that when VA is procuring drugs, we are 
procuring drugs that are approved for sale in the United States 
by the Food and Drug Administration. The Food and Drug 
Administration has the overarching responsibility for ensuring 
that the manufacturing plants meet the quality standards to 
sell the drugs in this country, as well as meeting the safety 
and efficacy.
    We do have some instances of drugs being on contract that 
are not compliant with the trade agreements.
    Ms. Kiggans. Do we test them in this country randomly at 
any point to ensure that we are getting a quality product?
    Mr. Emmendorfer. Thank you. That is another great question.
    That responsibility--we are a healthcare system, so it is 
not our responsibility to be testing the end product. When that 
is being done, it is being done by our regulators, the Food and 
Drug Administration. They are responsible for ensuring that the 
manufacturing plants meet current good manufacturing practices. 
According to the one report that I referenced earlier, it does 
reference some of the sample and testing that the Food and Drug 
Administration does. We as an agency do not.
    Ms. Kiggans. Okay. We will make sure we get the FDA here 
next time.
    Then you mentioned in the pilot program for the 
pharmaceutical drugs that you had two, injectables that you 
were starting with. What preference--are you prioritizing 
injectables or what is the rollout plan after those two?
    Mr. Emmendorfer. We preferenced--we selected two 
injectables because injectables can be more prone to some 
shortages, as I am sure you are aware with your background. The 
reason that we selected those two is because they are on the 
FDA's essential medication list. We have to start somewhere, so 
we are starting with those two. We submitted the clinical 
requirements at the end of June, and now our acquisition staff 
is--they are working on the acquisition package. We did give 
preference to domestic manufacturers, for example, if the 
active pharmaceutical ingredient was sourced from this country. 
We built in some of those, so. We started with two drugs. There 
is a list, I want to say of about 186, so we had to start 
somewhere.
    Ms. Kiggans. What is the next down on the list? Are you 
just going to stay in the injectable department, or is there--
--
    Mr. Emmendorfer. I do not know. I think we just have to 
wait to see what happens with this contract and make an 
assessment and analyze the results. If we are able to make the 
award, try to determine through collaborative market research 
with our contracting officers where the next steps may take us.
    Ms. Kiggans. Great.
    Then also we know that many of the components of 
pharmaceuticals and medical devices are produced overseas, and 
the VA only represents a small portion of the market. What 
would it take to truly reshore some of these pharmaceutical 
supply chains and medical device supply chains? What type of 
thing should Congress be focused on?
    Mr. Emmendorfer. I do not know that I can speak to that 
globally, but I did not provide the statistics on what part of 
the market share we represent and that I can speak to.
    Our mail order pharmacy this year is going to spend about 
$5.1 billion. Our whole healthcare system as a whole spends 
right around $8 billion on pharmaceuticals. When you look at 
that into the context of what we spend in the United States for 
pharmaceuticals, that represents somewhere between 1 to 2 
percent. I think with that type of market share, that is why we 
are kind of reliant on the speed of the industry as well. I do 
not know that we have the market share to make any significant 
shifts in where corporations and manufacturers may decide to 
manufacture their drugs.
    Dr. Billups. I would like to just add a little bit to that 
question--I mean to that response.
    That is some of the things that we can do, a lot of times 
when you are looking at new areas that you kind of need to 
infuse industry, you really have to use other vehicles other 
than the Federal Acquisition Regulation. When I was the SPE at 
HHS, it was something happening with antibiotics and HHS has 
the authority to do OTAs, other transaction authority. Then 
that helped us at that time at HHS to have a cost sharing. 
Industry had their role, we had our role in the Federal 
Government and we brought those things together and we were 
able to get a result a lot faster than going through the 
processes that you have to go through with the Federal 
Acquisition Regulation.
    That is one of the things that Congress can do to help us. 
Really just to understand the market that is out there now, 
because some of the guidance that we have and the way that we 
have to go about procuring things, it really does not help when 
you have the issues that we have in front of us that is 
impacting the entire country.
    Ms. Kiggans. I hear you. Trying to marry it with the 
civilian sector a little bit better.
    Dr. Billups. Yes.
    Ms. Kiggans. Thank you very much.
    My time has expired. I yield to Mr. Mrvan for 5 minutes.
    Mr. Mrvan. As I stated in my opening statement, our country 
has relied for decades now on foreign production of supplies 
and goods and I am very pleased to see that President Biden has 
made it a core issue to ensure that we invest in American 
manufacturing. VA is a part of this, but cannot do it on its 
own.
    Mr. Centineo, do you have any information on what the 
market share for VA and Department of Defense (DoD) for the 
purchase of medical supplies?
    Mr. Centineo. Thank you for that question.
    Yes, and in fact, I mentioned earlier, our partners, the 
Coalition of Government Procurement, just sent us some 
information indicating that the market share that the DoD and 
VA possess is somewhere between 2 to 3 percent of the total 
supply chain. As was mentioned earlier, some of the 
conversation was we move at the speed of industry and we are 
all leaning forward to get there. The challenge is going to be 
to make sure that we have the right energy to get industry to 
be postured to do that so we can all be successful.
    Mr. Mrvan. I guess one of the follow-up questions that I 
have, and the chairwoman alluded to it, but how is the private 
industry, along with you are moving at that same pace, is there 
a movement to onshore the production of pharmaceuticals here in 
the United States?
    Mr. Emmendorfer. Again, that is really outside of what we 
can control in VA on what industry is making decisions on 
manufacturing. We are trying to make efforts within our agency 
by developing the clinical requirements and trying to give 
domestic preference to some of the contracts.
    The procurement decisions that are made out in the private 
sector, I can say that they are going to be procuring all drugs 
that are approved by the Food and Drug Administration. If you 
go to a private sector pharmacy, they are also going to be 
buying drugs that are approved by the Food and Drug 
Administration for sale in the country.
    Mr. Mrvan. Okay. Part of the compliance with Buy America 
requires that there is standardization across the VA when 
procurement officials are purchasing supplies. The long-term 
solution to this supply chain modernization, but as we all 
know, that has had fits and starts for years.
    What are you currently doing to push these requirements out 
to the Veterans Integrated Services Networks (VISNs) and 
medical centers to ensure compliance with the Buy American 
laws?
    Dr. Billups. Thank you for the question.
    Some of the things that we are doing in 2024, some of what 
we are going to do is really identify those--because we know 
who the clinicians are. The clinicians come up with the 
requirements from the standpoint of what they need to support a 
patient. Then you get to that next step of the acquisition 
lifecycle, which is someone has to put that together. It gets 
over to the contracting office and the contracting office 
finally does contract execution. All of these things kind of 
have to be happening lockstep and what we are doing in VA in 
2024 is bringing the right people to the table so everybody 
kind of understands.
    It is just like, this morning we were talking about 
something and a comment came up around market research. Market 
research a lot of times is thought about once the package gets 
over to the contracting officer. It is too late to think about 
market research when the package gets to the contracting 
officer because the market research should be done before you 
finalize your requirements development. It is all of these 
various types of things that we just need to bring the right 
people, bring them together in a way so that we can push 
forward some of these things that are very, very important in 
VA. As it relates to healthcare of veterans it is always very 
important and it does not matter whether it is one veteran or 
ten.
    Mr. Mrvan. Okay.
    With that, I yield back.
    Ms. Kiggans. Thank you. Mr. Mrvan.
    The chair now recognizes Ms. Radewagen for 5 minutes.
    Ms. Radewagen. Thank you, Madam Chair.
    Mr. Centineo, in remarks you recently gave during Make PPE 
in America Industry Day you discussed challenges VA faces 
acquiring domestically sourced PPE and noted industry issues 
domestically producing PPE. You also indicated VA was working 
to identify domestically produced PPE.
    Can you explain VA's process for identifying domestic PPE 
sources?
    Mr. Centineo. Yes. Thank you for that question.
    As was mentioned in April, we met with our industry 
partners and with our Federal partners in the initiative for 
100 percent Make PPE in America. Since that time, we have held 
not only our Medical Surgical Prime Vendor industry 
opportunities--again, I mentioned earlier, we have our bi-
weekly engagements with industry. We actually met, it was 
mentioned earlier AWIS, the Acquisition Workforce Innovation 
Symposium, where industry was there. We engaged at all these 
opportunities and we continue to reach out and have outreaches. 
We have had outreach prior to that April timeframe for our 
Medical Surgical efforts, but this has actually hyper focused 
us on where we need to be with industry and working for 
industry.
    Again, the industry feedback to us is, we will provide you 
the products. We have to make sure that the demand signal is 
there. It goes right back to the conversation of the earlier 
remarks of this is a decades long challenge that we have where 
everyone is in the same space for the same products. The 
challenge is that much of it has been overseas. We have to work 
with industry a little bit more closely, and we continue to do 
that on our outreaches continually through multimedia.
    Ms. Radewagen. Has VA entered into any PPE procurement 
contracts since the law was enacted? If so, what percentage of 
these contracts are compliant with the Make PPE in America Act?
    Mr. Centineo. For our Medical Surgical Prime Vendor program 
we do not have contracts, we have blanket purchase agreements. 
Those are pricing agreements. Those pricing agreements are 
established through a solicitation that is actually done 
through tiered evaluation to be able to get to the vendor that 
can provide us those items at the best price and cost for the 
VA. Oftentimes those are service disabled, veteran owned 
businesses. Then we place our orders through what is called a 
Prime Vendor distributor or distribution contract. Our orders 
are placed to the distributor. Those distributors actually go 
to those suppliers to actually source the material. They are 
not contracts, they are pricing agreements. Our contracts are 
through our Prime Vendors sourcing distribution contracts.
    Mr. Parrish. I am sorry.
    Ma'am, just to also add to that is part of the compliance 
for Made in America, those distributors, like on the 
construction side, they have to self-certify that they are 
compliant with the Made in America products. That is something 
we do.
    I will also add that, as you are aware, there is an 
Independent Verification and Validation (IVV) law or bill that 
is being processed through the staff and through your areas, 
and we are not waiting on that, we are actually creating an IVV 
process ourselves. That is going to be used to focus on some of 
these self-certifications to do the independent validation and 
verification of items.
    It is a long term process, but we anticipate having that in 
place as part of----
    Ms. Radewagen. How does VA ensure that the PPE it purchases 
from its vendors is Make PPE in America compliant?
    Mr. Parrish. That is the certification I mentioned. The 
distributors--you know, part of that MSPV contract was the Made 
in America compliance, that they self-certified, which if they 
are fraudulent about, that is a felony, violating Federal 
certification standards. Then the other part is we need to 
strengthen that. That is the independent validation component 
that I had just mentioned that we are putting in place.
    Ms. Radewagen. My staff has met with a number of 
organizations that manufacture PPE who feel that they are being 
under utilized by VA. Do you disagree with their conclusions?
    Mr. Parrish. I will personally state and just reinforce for 
all of our industry partners who are watching this and 
listening to us now, that we are looking actively and for you 
to come to sell to us. As I mentioned in my oral testimony, a 
lot of people are not fully certified, and that is part of the 
challenge. We will embrace and we fully want to buy from 
American manufacturers that are fully compliant. If they are 
there and we are not aware of it, I encourage them, again, use 
pathfinder.VA.gov to make us aware of it if we do not know who 
they are.
    Ms. Radewagen. Does the cost of purchasing domestic PPE 
ever dissuade VA from looking to work with domestic producers?
    Mr. Parrish. I do not think cost is our driver because we 
are focusing--one of the changes we are also doing in VA is 
focusing on best value for major programs. For commodity type 
purchases, as Mr. Centineo mentioned, that we are doing 
purchase agreements that are price structured, and then we buy 
from there through our distributors.
    I do not know if you want anything.
    Ms. Radewagen. Add anybody else want to add to it?
    Dr. Billups. The only thing that I would add to that, the 
preference as it relates to the different pieces of 
legislation, one of the things that we also did, we have 
something that we--well, at the federal level they have 
something called a mythbuster around some of the issues with 
buying things. We adopted that concept at the VA. We recently 
did a mythbuster because one of the issues that came up was, 
well, the only thing that we have to do at VA is look to see if 
we have two veteran owned companies. The answer is not that we 
have two veteran owned companies, because if you are buying 
PPE, you also have to comply with IIJA. What we did with the 
mythbusters, we just helped people understand what is that 
decision tree that you have to look at to get to, because in 
some cases the veteran owned company may not have a product 
that is 100 percent ``Made in America'' as well as 100 percent 
manufactured (in America), but there could be another small 
business or some other company. So the preference in that case, 
they would have to go to what company can comply with IIJA.
    Ms. Radewagen. I see.
    Thank you, Madam Chairwoman. I yield back.
    Ms. Kiggans. Thank you, Ms. Radewagen.
    Ranking Member Mrvan, do you have any closing remarks?
    Mr. Mrvan. I do. Thank you, Chair Kiggans.
    I appreciate the testimony and the answers from our 
witnesses today. I would like to re-emphasize my support for 
all that the administration and VA are doing to ensure that we 
make Buy America a priority.
    I think Mr. Parrish and the rest of our witnesses have a 
huge task ahead, but I appreciate their commitment to continue 
to make this a priority, and I look forward to continuing this 
oversight.
    I yield back.
    Ms. Kiggans. Thank you, Mr. Mrvan.
    I just want to thank our witnesses for taking time to 
educate us today and for prioritizing domestic manufacturing of 
our pharmaceuticals, medical devices, and PPE. It is really an 
issue of national security, so thank you for continuing to just 
prioritize that and work on that issue.
    I ask for unanimous consent that all members shall have 5 
legislative days in which to revise and extend their remarks 
and include any extraneous material.
    Hearing, no objection, so ordered.
    The committee stands adjourned.
    Thank you.
    [Whereupon, at 4:07 p.m., the subcommittee was adjourned.]
      





      
      
      
      
      
      
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                     Prepared Statement of Witness

                              ----------                              


                 Prepared Statement of Michael Parrish

    Good afternoon, Chairwoman Kiggans, Ranking Member Mrvan, and 
Members of the Subcommittee. I am pleased to appear before you today to 
discuss VA Procurement and the Department's compliance with domestic 
preference (for example, Made in America) statutes, other laws, 
Executive Orders, regulations and policies that govern the purchase of 
goods and services by Federal entities. Joining me today are my 
colleagues, Dr. Angela Billups, Executive Director, Office of 
Acquisition and Logistics, OALC, and Senior Procurement Executive; Mr. 
Andrew Centineo, Executive Director for Procurement and Logistics from 
the Veterans Health Administration (VHA); and Dr. Thomas Emmendorfer, 
Executive Director, Pharmacy Benefits Management Services, VHA.
    The Coronavirus Disease 2019 (COVID-19) pandemic heightened 
awareness of our dependence on markets outside the U.S. for the raw 
materials and the manufacture of certain products. This dependence is 
not just a VA problem, but a national problem that has been decades in 
the making. During those decades, U.S. industry has outsourced 
manufacturing and supply chain capabilities to overseas entities. 
Essential health-care items, such as, personal protective equipment 
(PPE) and pharmaceuticals, are two examples where U.S. dependency on 
foreign markets over the years has increased. With this vulnerability 
in mind, Congress, the Administration and industry have placed renewed 
emphasis on the manufacture and purchase of products made in the U.S. 
However, achieving the goals espoused in these statutes, policies and 
executive orders takes time. VA is committed to full implementation of 
our statutory requirements and we are working in collaboration with 
other Federal entities and industry to identify U.S.-made products and 
support the rebuilding of U.S. manufacturing capacity.
    As CAO for the Department, I am a strong proponent of purchasing 
products that are made in the U.S. The VA's primary mission is 
providing high quality health care, benefits, goods and services to 
Veterans. We saw first hand the fragility of some of the supply chains 
upon which we depended during the pandemic and are committed to 
ensuring we are not in this position in the future. The Buy American 
Act (BAA) and the Build America, Buy America Act (enacted as part of 
the Infrastructure, Investments and Jobs Act (IIJA)), each include 
specific language espousing a preference for the procurement of 
domestic products. VA operates the largest integrated health care 
system in the U.S. The population of Veterans receiving care in VA 
health care facilities is expected to grow, the present VA population 
served is just over 9 million enrolled Veterans, out of the U.S. 
population of 337 million people.
    Availability of 100 percent domestically produced PPE requires a 
clear and organized federal demand signal to support the existing and 
future industry investments, innovation as well as a long-term 
commitment. VA is committed to working with other Federal agencies to 
communicate to industry the importance of domestically produced PPE.

VA Compliance with the Buy American Act

    VA complies with the BAA by following the standardized guidance in 
the FAR, VA Acquisition Regulation (VAAR) and the VA Acquisition Manual 
(VAAM), where appropriate. VA has also published IIJA requirements and 
standardized guidance in the VAAM, building on the BAA guidance in the 
FAR, identifying the difference between the BAA and IIJA requirements, 
along with establishing and publishing other standardized guidance 
specific to IIJA in the VAAM, which was effective in February 2023. 
Contracting officers and heads of contracting activities responsible 
for making these assessments have ready access to information and tools 
needed to effect BAA compliance and other requirements. When needed, 
there are established procedures for requesting a waiver or applying an 
exemption that I review personally.

VA Pilot to Preference Domestically Manufactured Drug Products

    One area where VA has had to request waivers of Made in America 
requirements concerns the purchase of pharmaceuticals. Many drugs 
require ingredients that come from, or are manufactured in, markets 
outside the U.S. With Veterans' health care needs as our priority, it 
is not always possible to obtain the required medication from a 
domestic source. However, VA is continuously engaged in efforts to 
increase opportunities to purchase domestically manufactured products.
    As an example, VA Pharmacy Benefits Management (PBM) Services and 
OALC will pilot a program to preference domestically manufactured drug 
products. VA PBM Services will start by selecting two drug products and 
OALC will develop the acquisition strategy which will include a 
preference for domestically sourced and manufactured products. If the 
pilot is successful, VA will evaluate potential expansion to additional 
products. To enable this work, VA PBM Services will choose two drugs 
from the Drug and Biologic Essential Medicines, Medical Countermeasures 
and Critical Inputs for the List Described in section 3(c) of Executive 
Order 13944; Executive Order on Ensuring Essential Medicines, Medical 
Countermeasures, and Critical Inputs Are Made in the United States; to 
develop a concept of need and requirements. PBM Services will then 
submit the concept of need and requirements to OALC to develop the 
acquisition strategy. VA anticipates initiating the pilot by the end of 
the first quarter of fiscal year 2024 with a final decision leading to 
an award for the effort within 12 months after.

Working with Industry

    VA's ability to achieve BAA goals involves regular and open 
communication with industry. As part of VA's outreach to and 
partnership with industry, VA staff have conducted numerous industry 
days in support of VA's Medical Surgical Prime Vendor (MSPV) program. 
Additionally, VHA procurement and logistics staff regularly engage 
manufacturers and suppliers to better understand how entities interpret 
VA requirements and new developments and innovations in the 
marketplace. These bidirectional conversations are invaluable and 
provide industry insights on the availability of products, market 
trends, best practices and innovations.
    In April 2023, VA participated in Make Personal Protective 
Equipment (PPE) in America Industry Day hosted at the U.S. Department 
of Health and Human Services (HHS). Federal agencies expressed their 
commitment to work toward full implementation of the Make PPE in 
America Act, with the end-state of buying 100 percent ``made in 
America'' PPE. In many circumstances, we've found certain inputs of PPE 
are not yet manufactured in the US. raw materials manufactured 
overseas.
    Additionally, VA is committed to collaborating with other agencies 
and the Office of Management and Budget to fully implement the Make PPE 
in America Act. For example, VA efforts to implement the Make PPE in 
America Act include, but are not limited to:

        (1) developing an executable acquisition strategy for each PPE 
        item identified in the PPE Act that has been prioritized for 
        action,

        (2) developing common requirements and an acquisition strategy 
        for all items on the consensus PPE list by the end of calendar 
        year 2023, and

        (3) reporting noteworthy accomplishments toward the development 
        of a long-term PPE strategy under the President's Management 
        Agenda. This reporting amplifies the Administration's 
        commitment to organize federal demand and strengthening the 
        domestic supply chain for PPE through increased program, 
        project, and buying office participation.

    Following Industry Day, VA issued a request for information to the 
Blanket Purchase Agreement (BPA) holders participating in VA's MSPV 
program to gauge how many are fully compliant with Made in America Act 
requirements. To date, through vendor self-certification, VA has 
identified 129 items on its MSPV product list that are 100 percent Made 
in America compliant. Through this process we also identified items 
that are not; for example, none of the BPA holders participating in 
VA's MSPV program offer nitrile gloves, a critical PPE item that 
currently meet the requirements of the Make PPE in America Act.
    VA remains committed to explore and support with industry partners 
all opportunities to realize Make PPE in America. The journey requires 
support beyond the Federal health care space of VA (and DoD) to achieve 
the goal, maintain supply chain resiliency and reduce dependency on 
overseas markets for PPE requirements ranging from raw materials to 
finished products. Our efforts, however, extend beyond PPE as we work 
in support of increasing the purchase and manufacture of products Made 
in America.

Conclusion

    Chairwoman Kiggans, Ranking Member Mrvan, and Members of the 
Subcommittee, thank you for the opportunity to speak about VA 
procurement and the opportunities to increase manufacturing and 
production within the United States and to reduce our dependency on 
overseas markets for certain raw materials and finished products. My 
colleagues and I are pleased to answer any questions that you may have.

                        Statement for the Record

                              ----------                              


                Prepared Statement of Matthew Rosendale

    Thank you, Chairwoman Kiggans, for holding this important hearing.

    The Biden Administration's policies have decimated the American 
middle class. Americans are now paying higher prices at the grocery 
store and gas pump due to inflation caused by Democrats' reckless 
spending policies. Last week, the United Auto Workers announced a 
strike over disagreements with management over pay and benefits for 
workers.\1\ The 1,000-pound donkey in the room is that the Biden 
Administration's push for electric vehicles has harmed the industry and 
led to the disastrous situation we now find ourselves in.
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    \1\ https://www.reuters.com/business/autos-transportation/uaw-
detroit-three-automakers-try-reach-deal-before-strike-widens-2023-09-
18/#:81:text=The%20union%20and%20companies%20are,UAW%20is%20demanding%20
through %202027.
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    Since the 1930's, preferences for domestically produced goods and 
services have existed in federal procurement. Specifically, the Buy 
American Act is the primary federal procurement law providing a 
preference for domestically produced goods and services.\2\ It makes 
sense to support American small businesses as opposed to large foreign 
multinational companies when federal agencies are making procurement 
decisions. For too long, leaders in both parties have sold out American 
workers for cheap, Chinese labor.
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    \2\ https://crsreports.Congress.gov/product/pdf/R/R46748
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    Under President Trump's visionary leadership, American 
manufacturing was prioritized again. He issued an executive order 
``Maximizing Use of American-Made Goods, Products, and Materials.'' 
Realizing how popular President Trump's actions were with the American 
people, President Biden has paid lip service to building on his legacy. 
Unfortunately, this lip service has resulted in very little concrete 
action by the Biden Administration.
    In Montana, we have seen firsthand the disappointing effects of 
Biden and federal agencies not enforcing the law, which has harmed 
domestic industries. I have had the pleasure of visiting the Center of 
the Nation of Wool in Billings. From the Revolutionary War to the 
present day, wool has been an important component of U.S. military 
uniforms.\3\ The Berry Amendment requires that all U.S. military 
uniforms be made from 100 percent domestic products, protecting 
domestic wool from offshore competition.
---------------------------------------------------------------------------
    \3\ https://www.sheepusa.org/blog/newsmedia-sheepindustrynews-
pastissues-2017-january2017-woolinthemilitary
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    According to the CRS, the items covered by the Berry Amendment have 
varied over the years; currently, the law applies to DOD purchases of 
textiles, clothing, footwear, food, hand or measuring tools, stainless 
steel flatware, and dinnerware. DOD purchases of these items must be 
entirely grown, reprocessed, reused, or produced in the United States. 
However, over the last few years, DOD has bought wool from overseas in 
violation of the Berry Amendment. This has harmed Montana wool growers 
and is unacceptable. I remain focused on helping Montana wool growers 
and will continue to press the Department of Defense to ensure that our 
servicemembers have their uniforms made from American wool.
    Congress must provide proper oversight of the executive branch, 
particularly the Biden Administration, which has been selling American 
workers down the road. Thank you, Chairwoman Kiggans for your 
leadership. I yield back.

                                 [all]