[House Report 114-364]
[From the U.S. Government Publishing Office]


114th Congress    }                                      {      Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                      {     114-364

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



 
                    CONSTRUCTION REFORM ACT OF 2015

                                _______
                                

December 3, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

    Mr. Miller of Florida, from the Committee on Veterans' Affairs, 
                        submitted the following

                              R E P O R T

                        [To accompany H.R. 3106]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Veterans' Affairs, to whom was referred 
the bill (H.R. 3106) to authorize Department major medical 
facility construction projects for fiscal year 2015, to amend 
title 38, United States Code, to make certain improvements in 
the administration of Department medical facility construction 
projects, and for other purposes, having considered the same, 
report favorably thereon with an amendment and recommend that 
the bill as amended do pass.

                                CONTENTS

                                                                   Page
Amendment........................................................     2
Purpose and Summary..............................................     5
Background and Need for Legislation..............................     6
Hearings.........................................................     9
Subcommittee Consideration.......................................    10
Committee Consideration..........................................    10
Committee Votes..................................................    11
Committee Oversight Findings.....................................    11
Statement of General Performance Goals and Objectives............    11
New Budget Authority, Entitlement Authority, and Tax Expenditures    11
Earmarks and Tax and Tariff Benefits.............................    12
Committee Cost Estimate..........................................    12
Congressional Budget Office Estimate.............................    12
Federal Mandates Statement.......................................    13
Advisory Committee Statement.....................................    13
Constitutional Authority Statement...............................    13
Applicability to Legislative Branch..............................    13
Statement on Duplication of Federal Programs.....................    13
Disclosure of Directed Rulemaking................................    14
Section-by-Section Analysis of the Legislation...................    14
Changes in Existing Law Made by the Bill as Reported.............    18

                               Amendment

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Construction Reform Act of 2015''.

SEC. 2. DEPARTMENT OF VETERANS AFFAIRS CONSTRUCTION REFORMS.

  (a) Project Management.--Section 8103 of title 38, United States 
Code, is amended by adding at the end the following new subsection:
  ``(e) In the case of any super construction project (as such term is 
defined in section 8104(a)(4)(C)), the Secretary shall enter into an 
agreement with an appropriate non-Department Federal entity to provide 
full project management services for the super construction project, 
including management over the project design, acquisition, 
construction, and contract changes. Such agreement shall provide that 
the Secretary shall reimburse such Federal entity for all costs 
associated with the provision of project management services under the 
agreement.''.
  (b) Application of Industry Standards; Assistance.--Section 8103 of 
title 38, United States Code, as amended by subsection (a), is further 
amended by adding at the end the following new subsections:
  ``(f) To the maximum extent practicable, the Secretary shall use 
industry standards, standard designs, and best practices in carrying 
out the construction of medical facilities.
  ``(g)(1) The Secretary shall provide to a non-Department Federal 
entity with which the Secretary has entered into an agreement under 
subsection (e)--
          ``(A) design, planning, and construction assistance before 
        the entity issues a request for proposals for the design or 
        construction of the super construction project covered by the 
        agreement;
          ``(B) any documents or information needed for the entity to 
        carry out the responsibilities of the entity with respect to 
        the super construction project; and
          ``(C) upon the request of the entity, any other assistance 
        that the entity determines necessary to carry out such 
        responsibilities.
  ``(2) Any assistance provided under paragraph (1) shall be provided 
to the non-Department Federal entity on a non-reimbursable basis.
  ``(h)(1) With respect to a proposed change to a contract entered into 
by a non-Department Federal entity with which the Secretary has entered 
into an agreement under subsection (e) that is estimated at a value of 
less than $250,000, the non-Department Federal entity shall issue a 
final decision regarding such change not later than 30 days after the 
date on which the change is proposed.
  ``(2) With respect to a proposed change to such a contract that is 
estimated at a value of $250,000 or more--
          ``(A) the Secretary may provide to the entity the 
        recommendations of the Secretary regarding such change;
          ``(B) during the 30-day period beginning on the date on which 
        the entity furnishes to the Secretary information regarding 
        such change, the Secretary may issue the final decision 
        regarding such change; and
          ``(C) if the Secretary does not issue a final decision under 
        subparagraph (B), during the 30-day period following the period 
        described in such paragraph, the entity shall issue a final 
        decision regarding such a change no later than 90 days from 
        when the entity furnished information regarding such a change 
        to the Secretary.
  ``(i) The Secretary shall ensure that each employee of the Department 
with responsibilities relating to the construction or alteration of 
medical facilities, including such construction or alteration carried 
out pursuant to contracts or agreements, undergoes a program of ongoing 
professional training and development. Such program shall be designed 
to ensure that employees maintain adequate expertise relating to 
industry standards and best practices for the acquisition of design and 
construction services. The Secretary may provide the program under this 
subsection through a contract or agreement with a non-Federal entity or 
with a non-Department Federal entity.''.
  (c) Limitation on Planning and Design for Super Construction 
Projects.--
          (1) In general.--Section 8104(a) of title 38, United States 
        Code, is amended--
                  (A) by redesignating paragraph (3) as paragraph (4);
                  (B) by inserting after paragraph (2) the following 
                new paragraph (3):
  ``(3) The Secretary may not obligate or expend funds for advance 
planning or design for any super construction project, until the date 
that is 60 days after the date on which the Secretary submits to the 
Committee on Veterans' Affairs and the Committee on Appropriations of 
the Senate and the Committee on Veterans' Affairs and the Committee on 
Appropriations of the House of Representatives notice of such 
obligation or expenditure.''; and
                  (C) in paragraph (4), as redesignated by paragraph 
                (1) of this subsection, by adding at the end the 
                following new subparagraph:
          ``(C) The term `super construction project' means a project 
        for the construction, alteration, or acquisition of a medical 
        facility involving a total expenditure of more than 
        $100,000,000, but such term does not include an acquisition by 
        exchange.''.
          (2) Applicability.--The amendments made by paragraph (1) 
        shall take effect on the date of the enactment of this Act and 
        shall apply with respect to a construction project that is 
        initiated on or after that date.
  (d) Congressional Approval of Certain Projects.--
          (1) Projects that exceed specified amount.--Subsection (c) of 
        section 8104 of title 38, United States Code, is amended to 
        read as follows:
  ``(c)(1) The Secretary may not obligate funds for a major medical 
facility project or a super construction project approved by a law 
described in subsection (a)(2) in an amount that would cause the total 
amount obligated for that project to exceed the amount specified in the 
law for that project (or would add to total obligations exceeding such 
specified amount) by more than 10 percent unless the Committee on 
Veterans' Affairs and the Committee on Appropriations of the Senate and 
the Committee on Veterans' Affairs and the Committee on Appropriations 
of the House of Representatives each approve in writing the obligation 
of those funds.
  ``(2) The Secretary shall--
          ``(A) enter into a contract with an appropriate non-
        department Federal entity with the ability to conduct forensic 
        audits on medical facility projects for the conduct of an 
        external forensic audit of the expenditures relating to any 
        major medical facility or super construction project for which 
        the total expenditures exceed the amount specified in the law 
        for the project by more than 25 percent; and
          ``(B) enter into a contract with an appropriate non-
        department Federal entity with the ability to conduct forensic 
        audits on medical facility projects for the conduct of an 
        external audit of the medical center construction project in 
        Aurora, Colorado.''.
          (2) Use of extra amounts.--Subsection (d) of such section is 
        amended--
                  (A) in paragraph (2)(B), in the matter preceding 
                clause (i), by striking ``Whenever'' and inserting 
                ``Before''; and
                  (B) by adding at the end the following new paragraph:
  ``(3) The Secretary may not obligate any funds described in paragraph 
(1) or amounts described in paragraph (2) before the date that is 30 
days after the notification submitted under paragraph (1) or paragraph 
(2)(B), as the case may be, unless the Committee on Veterans' Affairs 
and the Committee on Appropriations of the Senate and the Committee on 
Veterans' Affairs and the Committee on Appropriations of the House of 
Representatives each approve in writing the obligation of those funds 
or amounts.''.
          (3) Notification requirements.--
                  (A) Committees required.--Subsection (d)(1) of such 
                section is amended by striking ``each committee'' and 
                inserting ``the Committee on Veterans' Affairs and the 
                Committee on Appropriations of the Senate and the 
                Committee on Veterans' Affairs and the Committee on 
                Appropriations of the House of Representatives''.
                  (B) Use of amounts from bid savings.--Subsection 
                (d)(2)(B) of such section is amended by adding at the 
                end the following new clause:
          ``(iv) With respect to the major construction project that is 
        the source of the bid savings--
                  ``(I) the amounts already obligated or available in 
                the project reserve for such project;
                  ``(II) the percentage of such project that has been 
                completed; and
                  ``(III) the amount of such bid savings that is 
                already obligated or otherwise being used for a purpose 
                other than such project.''.
  (e) Quarterly Report on Super Construction Projects.--
          (1) In general.--At the end of subchapter I of chapter 81 of 
        title 38, United States Code, insert the following new section:

``Sec. 8120. Quarterly report on super construction projects

  ``(a) Quarterly Reports Required.--Not later than 30 days after the 
last day of each fiscal quarter the Secretary shall submit to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives on the super construction projects carried out by the 
Secretary during such quarter. Each such report shall include, for each 
such project--
          ``(1) the budgetary and scheduling status of the project, as 
        of the last day of the quarter covered by the report; and
          ``(2) the actual cost and schedule variances of the project, 
        as of such day, compared to the planned cost and schedules for 
        the project.
  ``(b) Super Construction Project Defined.--In this section, the term 
`super construction project' has the meaning given such term in section 
8103(a)(4)(C) of this title.''.
          (2) Clerical amendment.--The table of sections at the 
        beginning of the chapter is amended by adding at the end of the 
        items relating to such subchapter the following new item:

``8120. Quarterly report on super construction projects.''.

  (f) Accelerated Master Planning for Each Medical Facility of the 
Department of Veterans Affairs.--
          (1) Existing facilities.--Not later than December 31, 2016, 
        the Secretary of Veterans Affairs shall complete a master plan 
        described in paragraph (3) for each medical facility of the 
        Department of Veterans Affairs.
          (2) New facilities.--For each medical facility of the 
        Department for which construction is completed after the date 
        of the enactment of this Act, the Secretary shall complete a 
        master plan described in paragraph (3) for the facility by not 
        later than the earlier of the following dates:
                  (A) The date on which activation is completed.
                  (B) The date of the formal dedication of the 
                facility.
          (3) Master plan described.--A master plan described in this 
        paragraph is, with respect to a medical facility of the 
        Department, a plan to inform investment decisions and funding 
        requests over a 10-year period for construction projects at 
        such medical facility--
                  (A) to meet the health care needs of a changing 
                veteran population through a combination of health care 
                from the Department and other community resources; and
                  (B) to maximize the best use of the land and 
                structures comprising such medical facility.

SEC. 3. MODIFICATION OF AUTHORIZATION OF FISCAL YEAR 2008 MAJOR MEDICAL 
                    FACILITY PROJECT AT DEPARTMENT MEDICAL CENTER IN 
                    TAMPA, FLORIDA.

  (a) Modification of Authorization.--In chapter 3 of the Supplemental 
Appropriations Act, 2008 (Public Law 110-252; 122 Stat. 2326), in the 
matter under the heading ``Department of Veterans Affairs-Departmental 
Administration-Construction, Major Projects'', after ``Five Year 
Capital Plan'' insert the following: ``and for constructing a new bed 
tower at the Department of Veterans Affairs medical center in Tampa, 
Florida, in lieu of providing bed tower upgrades at such medical 
center''.
  (b) Emergency Designation.--
          (1) In general.--Subsection (a) is designated as an emergency 
        requirement pursuant to section 4(g) of the Statutory Pay-As-
        You-Go Act of 2010 (2 U.S.C. 933(g)).
          (2) Designation in senate.--In the Senate, subsection (a) is 
        designated as an emergency requirement pursuant to section 
        403(a) of S. Con. Res. 13 (111th Congress), the concurrent 
        resolution on the budget for fiscal year 2010.

SEC. 4. AUTHORIZATION OF FISCAL YEAR 2015 MAJOR MEDICAL FACILITY 
                    PROJECTS.

  (a) Authorization.--The Secretary of Veterans Affairs may carry out 
the following major medical facility projects, with each project to be 
carried out in an amount not to exceed the amount specified for that 
project:
          (1) Construction of a community living center, outpatient 
        clinic, renovated domiciliary, and renovation of existing 
        buildings in Canandaigua, New York, in an amount not to exceed 
        $158,980,000.
          (2) Seismic corrections to the mental health and community 
        living center in Long Beach, California, in an amount not to 
        exceed $126,100,000.
          (3) Seismic correction of 12 buildings in West Los Angeles, 
        California, in an amount not to exceed $70,500,000.
          (4) Construction of a spinal cord injury building and seismic 
        corrections in San Diego, California, in an amount not to 
        exceed $205,840,000.
  (b) Authorization of Appropriations.--There is authorized to be 
appropriated to the Secretary of Veterans Affairs for fiscal year 2015 
or the year in which funds are appropriated for the Construction, Major 
Projects, account, a total of $561,420,000 for the projects authorized 
in subsection (a).
  (c) Limitation.--The projects authorized under this section may only 
be carried out using--
          (1) funds appropriated for fiscal year 2015 pursuant to the 
        authorization of appropriations in subsection (b);
          (2) funds available for Construction, Major Projects for a 
        fiscal year before fiscal year 2015 that remain available for 
        obligation;
          (3) funds available for Construction, Major Projects, for a 
        fiscal year after fiscal year 2015 that remain available for 
        obligation;
          (4) funds appropriated for Construction, Major Projects, for 
        fiscal year 2015 for a category of activity not specific to a 
        project;
          (5) funds appropriated for Construction, Major Projects, for 
        a fiscal year before 2015 for a category of activity not 
        specific to a project; and
          (6) funds appropriated for Construction, Major Projects, for 
        a fiscal year after 2015 for a category of activity not 
        specific to a project.

SEC. 5. ASSISTANT INSPECTOR GENERAL FOR CONSTRUCTION.

  (a) In General.--Chapter 3 of title 38, United States Code, is 
amended by inserting after section 312 the following new section:

``Sec. 312A. Assistant Inspector General for Construction

  ``(a) In General.--There is in the Office of Inspector General an 
Assistant Inspector General for Construction. The Assistant Inspector 
General for Construction is responsible for conducting, supervising, 
and coordinating audits, evaluations, and investigations of the 
planning, design, contracting, execution, and construction of 
facilities and infrastructure of the Department, including major and 
minor construction projects and leases.
  ``(b) Qualifications.--Each individual appointed as Assistant 
Inspector General for Construction shall be an individual who has 
expertise in construction and facilities management.
  ``(c) Reports.--(1) Not later than 60 days after the appointment of 
an individual as the Assistant Inspector General for Construction, and 
every calendar quarter thereafter, the Assistant Inspector General for 
Construction shall submit to the Committees on Veterans' Affairs of the 
Senate and House of Representatives a report summarizing the activities 
of the Assistant Inspector General for Construction during the 120-day 
period ending on the date of such report.
  ``(2) In addition to the report required in paragraph (1), and the 
requirements contained in section 5 of the Inspector General Act of 
1978 (5 U.S.C. App.), the Assistant Inspector General for Construction 
shall promptly provide to the Committees on Veterans' Affairs of the 
Senate and House of Representatives the findings of any investigation 
undertaken by the Assistant Inspector General for Construction, and 
shall notify the Committees promptly if the Assistant Inspector General 
for Construction identifies any serious or flagrant problem or 
deficiency relating to the administration or operation of any 
construction program of the Department, if, during the course of any 
investigation, the Assistant Inspector General for Construction 
determines that Congress should take immediate action.
  ``(3) Nothing in this subsection shall be construed to authorize the 
public disclosure of information that is--
          ``(A) specifically prohibited from disclosure by any other 
        provision of law;
          ``(B) specifically required by Executive Order to be 
        protected from disclosure in the interest of national defense 
        or national security or in the conduct of foreign affairs; or
          ``(C) a part of an ongoing criminal investigation.''.
  (b) Clerical Amendment.--The table of sections at the beginning of 
such chapter is amended by inserting after the item relating to section 
312 the following new item:

``312A. Assistant Inspector General for Construction.''.

                          Purpose and Summary

    H.R. 3106, the Construction Reform Act of 2015, was 
introduced by Representative Jeff Miller of Florida on July 16, 
2015. H.R. 3106, as amended, would: (1) require the Department 
of Veterans Affairs (VA) to enter into an agreement with a non-
Department federal entity to provide project management 
services for super construction projects involving a total 
expenditure of more than $100 million; (2) require the use of 
industry standards, standard designs, and best practices for VA 
medical facility construction projects; (3) prohibit VA from: 
obligating/expending funds for advance planning or design for 
any super construction project until 60 days after 
congressional notification, obligating funds for a major 
medical facility project/super construction project by more 
than 10 percent of the amount approved by law without 
congressional approval, and using bid savings amounts/funds for 
other than their original purpose before 30 days after 
notifying such committees unless each committee approves the 
obligation; (4) require VA to report to the Committees on 
Veterans' Affairs and Appropriations of the House of 
Representatives and the Senate on the use of bid savings; (5) 
require quarterly reports on super construction projects; (6) 
require VA to complete a master plan for each VA medical 
facility; (7) authorize VA to construct a new bed tower at the 
James A. Haley Veterans' Hospital in Tampa, Florida; (8) 
authorize Major Construction projects in Canandaigua, New York, 
and Long Beach, San Francisco, West Los Angeles, and San Diego, 
California, and authorize the appropriation of $561.420 million 
to carry out these projects; and, (9) create, within VA's 
Office of the Inspector General, an Assistant Inspector General 
for Construction to conduct, supervise, and coordinate audits, 
evaluations, and investigations into the planning, design, 
contracting, execution, and construction of VA facilities and 
infrastructure.

                  Background and Need for Legislation


Section 2--Department of Veterans Affairs construction reforms

    VA operates one of the Federal government's largest real 
property portfolios. Most of VA's real property assets belong 
to the Veterans Health Administration (VHA), which operates 
more than 7,000 owned and leased buildings encompassing over 
160,000 square feet of clinical and administrative space across 
more than 15,000 acres of land.\1\ Much of VHA's real property 
assets are outdated, with the average age of a VA medical 
facility approaching sixty years, making them ill-suited to the 
provision of 21st century health care. Updating these 
facilities necessitates a complex and costly major medical 
facility construction program.
---------------------------------------------------------------------------
    \1\See, the VA Construction Review Council Activity Report, 
November 2012.
---------------------------------------------------------------------------
    At the Committee's request, the Government Accountability 
Office (GAO) undertook an audit and issued a report in April 
2013 entitled, ``Additional Actions Needed to Decrease Delays 
and Lower Costs of Major Medical Facility Projects.''\2\ In 
this report, GAO found that VA's four largest medical center 
construction projects--in Denver, Colorado; Las Vegas, Nevada; 
New Orleans, Louisiana; and, Orlando, Florida--experienced 
significant cost increases and lengthy schedule delays. The 
cost delays for these projects ranged from 59 percent to 144 
percent, as of November 2012, with a total cost increase of 
nearly $1.5 billion and an average cost increase of 
approximately $366 million. The schedule delays for these 
projects ranged from 14 to 74 months, with an average delay of 
35 months. Unsurprisingly, GAO concluded that these findings 
indicated serious weaknesses in VA's construction management 
processes. Despite numerous hearings by the Committee where VA 
officials were warned that these projects were significantly 
delayed and over budget, VA consistently maintained that the 
projects were both on time and on budget.
---------------------------------------------------------------------------
    \2\See, Government Accountability Office report, ``Additional 
Actions Needed to Decrease Delays and Lower Costs of Major Medical 
Facility Projects.'' http://www.gao.gov/assets/660/653585.pdf.
---------------------------------------------------------------------------
    These weaknesses are perhaps nowhere more apparent than in 
the management of the replacement medical center construction 
project in Denver, Colorado. The replacement of the existing 
Denver VA Medical Center began as a discussion in 1999 between 
VA and the University of Colorado regarding the possibility of 
a shared facility on the former Fitzsimmons Army base in 
Aurora, Colorado. After undergoing numerous scope changes over 
a period of several years, VA requested appropriations in 2010 
for a standalone replacement medical center project with a 
total estimated cost of $800 million. Due to the issuance of 
contract modifications in December 2013, the original firm 
target price of $604 million (not to exceed $610 million) was 
revised to $615.9 million (not to exceed $621.8 million) and 
the entire project remained capped at $800 million. However, in 
December 2014, VA was found by the Civilian Board of Contract 
Appeals to be in breach of its contract with the project's 
general contractor, Kiewit Turner (KT), who began to demobilize 
from the construction site.\3\ VA entered into an interim 
agreement with KT to resume construction on the project and 
later informed the Committee that an additional $830 million in 
funding, for a total authorization of $1.73 billion--triple the 
original authorization--was needed to continue the project, 
which Congress ultimately provided. VA subsequently turned to 
the Army Corps of Engineers, who revised the estimated 
completion cost to $1.675 billion, to manage the project to 
completion. Construction is expected to conclude on February 1, 
2018.
---------------------------------------------------------------------------
    \3\Kiewit-Turner, A Joint Venture v. Department of Veterans Affairs 
CBCA3450 (December 9, 2014). This decision led to the first time VA 
ever publicly admitted that this project was either over budget or 
delayed.
---------------------------------------------------------------------------
    In light of the mismanagement of this and other VA major 
medical facility projects, the Committee strongly believes that 
VA's construction management processes must be reformed, 
strengthened, and aggressively overseen. As a result, Section 2 
of the bill would require VA to enter into an agreement with a 
non-VA entity to provide project management services for super 
construction projects involving a total expenditure of more 
than $100 million. Section 2 of the bill would also require VA 
to use industry standards, standard designs, and best practices 
for all medical facility construction projects and to complete 
a master plan for each VA medical facility. Section 2 of the 
bill would further prohibit VA from: obligating or expending 
funds for advance planning or design for any super construction 
project until 60 days after congressional notification, 
obligating funds for a major medical facility project/super 
construction project by more than 10 percent of the amount 
approved by law without congressional approval, and using bid 
savings amounts or funds for other than their original purpose 
before 30 days after notifying such committees unless each 
committee approves the obligation. To ensure that Congress is 
kept fully informed about the status of VA construction 
projects, Section 2 of the bill would require VA to report 
regularly on the use of bid savings and on all super 
construction projects. In addition to the above reforms, the 
Committee urges VA to use competitively awarded third-party 
independent contracts to provide building information models, 
construction services for validating, measuring, and monitoring 
construction costs and materials, and for validation of 
contractor change order requests as well as to institute a 
competitively awarded building enterprise management system for 
the purpose of managing all ongoing super construction projects 
using real-time data information sharing between project 
contractors, non-Federal entities, and VA.

Section 3--Modification of authorization of Fiscal Year 2008 major 
        medical facility project at Department medical center in Tampa, 
        Florida

    The Supplemental Appropriations Act, 2008 (P.L. 110-252; 
122 Stat. 2326) authorized VA to renovate and upgrade an 
existing bed tower at the James A. Haley Veterans' Hospital in 
Tampa, Florida. However, VA's Fiscal Year 2016 budget 
submission requested authority to construct a new, replacement 
bed tower, using funds previously made available, rather than 
renovation and upgrade of the existing bed tower. Section 3 of 
the bill would provide that authority. According to VA, 
constructing a new bed tower could be completed in 38 months, 
which is considerably faster than the 144 months that a 
renovation would require. VA also claims that proceeding with 
construction instead of renovation would eliminate the need for 
12 leases, leading to a potential cost avoidance of $3.84 
million, and minimize both disruptions to facility operations 
and patient safety risks associated with a multi-phased 
renovation. VA has estimated that the new bed tower will 
consist of an approximately 220,000 gross square foot structure 
between four and six towers tall and will encompass 100 medical 
surgical single patient rooms and service spaces.

Section 4--Authorization of Fiscal Year 2015 major medical facility 
        projects

    Section 8104(2) of title 38, U.S.C., requires congressional 
authorization for VA major medical facility projects and major 
medical facility leases. A major medical facility project is 
defined as a project involving construction, alteration, or 
acquisition of a medical facility involving a total expenditure 
of more than $10,000,000. A major medical facility lease is 
defined as a lease for space for use as a new medical facility 
at an average annual rental of more than $1,000,000. Along with 
each major medical facility project or lease funding request, 
section 8104(b) of title 38 U.S.C., requires VA to submit a 
prospectus of the proposed medical facility to include a 
detailed description of the medical facility and an estimate of 
the cost for the construction, alteration, lease, or other 
acquisition as well as an estimate of the cost of the equipment 
required for operation of such facility, demographic data, 
current and projected workload and utilization data, current 
and projected operating costs, the priority score assigned to 
the project under the VA's prioritization methodology, and a 
description of each alternative that was considered in the case 
of a new or replacement medical ideology.
    Section 4 of the bill would authorize Major Construction 
projects in Canandaigua, New York, and Long Beach, San 
Francisco, West Los Angeles, and San Diego, California, and 
authorize the appropriation of $561.420 million to carry out 
these projects. VA has requested authorization for each of 
these projects and its justification for them can be found in 
VA's Fiscal Year 2015 budget submission.

Section 5--Assistant Inspector General for Construction

    The VA Office of the Inspector General (VAOIG) was 
established in 1978 by the Inspector General Act of 1978 (P.L. 
95-452, 92 Stat. 1101). Today, VAOIG is responsible for 
conducting and supervising audits and investigations; 
recommending policies designed to promote economy and 
efficiency, and to prevent and detect criminal activity, waste, 
abuse, and mismanagement in VA programs and operations; and 
keeping the VA Secretary and Congress fully informed about 
problems and deficiencies in VA programs and operations and the 
need for corrective action.\4\ VAOIG is currently organized to 
include four Assistant Inspectors General operating under the 
Inspector General and the Deputy Inspector General. The four 
current VAOIG Assistant Inspectors General are: the Assistant 
Inspector General for Investigations, the Assistant Inspector 
General for Audits and Evaluations, the Assistant Inspector 
General for Management and Administration, and the Assistant 
Inspector General for Healthcare Inspections.
---------------------------------------------------------------------------
    \4\See, Office of Inspector General Department of Veterans Affairs 
Semiannual Report to Congress October 1, 2014-March 31, 2015. http://
www.va.gov/oig/pubs/sars/vaoig-sar-2015-1.pdf 
---------------------------------------------------------------------------
    Due to the many deficiencies that have been uncovered 
regarding the management of VA's construction program, the 
Committee believes that the addition of an Assistant Inspector 
Generalfor Construction within VAOIG's existing organizational 
structure would allow for greater oversight and scrutiny of VA 
construction projects. As such, Section 5 of the bill would create an 
Assistant Inspector General for Construction within VAOIG. The new 
Assistant Inspector General for Construction would be required to have 
expertise in construction and facilities management and would be 
responsible for conducting, supervising, and coordinating audits, 
evaluations, and investigations into the planning, design, contracting, 
execution, and construction of VA facilities and infrastructure.

                                Hearings

    There were no full Committee hearings held on H.R. 3106, as 
amended.
    On July 14, 2015, the Subcommittee on Health conducted a 
legislative hearing on various bills introduced and drafted in 
the 114th Congress, including draft legislation to authorize VA 
major medical facility construction projects for FY 2015 and to 
make certain improvements in the administration of VA medical 
facility construction projects. The draft bill was later 
introduced as H.R. 3106. The following witnesses testified:
    The Honorable Tim Walberg, U.S. House of Representatives, 
7th Congressional District; Michigan; The Honorable Sean Duffy, 
U.S. House of Representatives, 7th Congressional District, 
Wisconsin; The Honorable Steve Stivers, U.S. House of 
Representatives, 15th Congressional District, Ohio; The 
Honorable Kyrsten Sinema, U.S. House of Representatives, 9th 
Congressional District, Arizona; The Honorable Doug Collins, 
U.S. House of Representatives, 9th Congressional District, 
Georgia; The Honorable Mike Coffman, U.S. House of 
Representatives, 6th Congressional District, Colorado; The 
Honorable Jeff Denham, U.S. House of Representatives, 10th 
Congressional District, California; The Honorable Charles 
Boustany, U.S. House of Representatives, 3rd Congressional 
District, Louisiana; The Honorable Brad Wenstrup, U.S. House of 
Representatives, 2nd Congressional District, Ohio; Ian de 
Planque, Legislative Director American Legion; Adrian Atizado, 
Assistant National Legislative Director, Disabled American 
Veterans; Carlos Fuentes, Senior Legislative Associate, 
National Legislative Service Veterans of Foreign Wars of the 
United States; and, Madhulika Agarwal MD, MPH, Deputy Under 
Secretary for Health for Policy and Services, Veterans Health 
Administration U.S. Department of Veterans Affairs, who was 
accompanied by Janet P. Murphy MBA, Acting Deputy Under 
Secretary for Health for Operations and Management, Veterans 
Health Administration U.S. Department of Veterans Affairs and 
Jessica Tanner, General Attorney Office of General Counsel, 
U.S. Department of Veterans Affairs.
    Statements for the Record were submitted by:
    The American Academy of Audiology and the American Speech-
Language Association; the Children of Vietnam Veterans Health 
Alliance, the International Hearing Society; Iraq and 
Afghanistan Veterans of America; the National Medical 
Association; Paralyzed Veterans of America; VetsFirst, a 
program of the United Spinal Association: Vietnam Veterans of 
America; Warrior Canine Connection; the American Academy of 
Ophthalmology; and, the American Medical Association.

                       Subcommittee Consideration

    On July 22, 2015, the Subcommittee on Health met in open 
markup session, a quorum being present, and favorably forwarded 
H.R. 3106, as amended, favorably to the full Committee by voice 
vote. During consideration of the bill, the following amendment 
was considered:
    An amendment offered by Representative Mike Coffman from 
Colorado, which would require VA to share any information 
needed by the non-Department Federal entity construction agent 
to provide full project management services for a super 
construction project, provide mandatory guidelines for the 
handling of change-orders to the underlying construction or 
design contracts, and require VA to ensure that VA personnel 
with construction responsibility receive ongoing professional 
training and development on industry standards and best 
practices. The amendment was agreed to by voice vote.

                        Committee Consideration

    On September 17, 2015, the full Committee met in open 
markup session, a quorum being present, and ordered H.R. 3106, 
as amended, reported favorably to the House of Representatives, 
by voice vote.
    During consideration of the bill, the following amendments 
were considered:
    An amendment in the nature of a substitute by 
Representative Jeff Miller of Florida, which would create an 
Assistant Inspector General for Construction within VA's Office 
of the Inspector General to be responsible for conducting, 
supervising, and coordinating audits, evaluations, and 
investigations into the planning, design, contracting, 
execution, and construction of VA facilities and 
infrastructure. The amendment in the nature of a substitute was 
agreed to by voice vote.
    An amendment to the amendment in the nature of a substitute 
by Representative Julia Brownley of California, which would 
require the Assistant Inspector General for Construction to 
report to Congress 60 days after his/her appointment and 
quarterly thereafter and to notify Congress of the findings of 
any investigation undertaken as well as any serious or flagrant 
problems or deficiencies requiring immediate congressional 
action. The amendment to the amendment in the nature of a 
substitute was agreed to by voice vote.
    An amendment to the amendment in the nature of a substitute 
by Representative Kathleen Rice of New York, which would 
require VA to enter into a contract with an appropriate non-VA 
Federal entity to conduct forensic audits of any major medical 
facility or super construction project for which the total 
expenditures exceed the amount specified in law by more than 25 
percent and would require VA to enter into a contract with an 
appropriate non-VA Federal entity to conduct a forensic audit 
of the replacement medical center construction project in 
Aurora, Colorado. The amendment to the amendment in the nature 
of a substitute was agreed to by voice vote.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, there were no recorded votes in 
connection with ordering H.R. 3106, as amended, reported to the 
House. A motion by Ranking Member Corrine Brown of Florida to 
report H.R. 3106, as amended, favorably to the House of 
Representatives was adopted by voice vote.

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of rule X of the Rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives are that the Secretary will use these 
provisions to improve the management and strengthen the 
oversight of VA construction projects, modify the authorization 
of a Fiscal Year 2008 VA major medical facility project in 
Tampa, Florida, and authorize Fiscal Year 2015 major medical 
facility projects.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                  Earmarks and Tax and Tariff Benefits

    H.R. 3106, as amended, does not contain any Congressional 
earmarks, limited tax benefits, or limited tariff benefits as 
defined in clause 9 of rule XXI of the Rules of the House of 
Representatives.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate on H.R. 
3106, as amended, prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

               Congressional Budget Office Cost Estimate

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
for H.R. 3106, as amended, provided by the Congressional Budget 
Office pursuant to section 402 of the Congressional Budget Act 
of 1974:

                                     U.S. Congress,
                                Congressional Budget Office
                                  Washington, DC, October 22, 2015.
Hon. Jeff Miller,
Chairman, Committee on Veterans' Affairs,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3106, the 
Construction Reform Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Ann E. 
Futrell.
            Sincerely,
                                              Keith Hall, Director.
    Enclosure.

H.R. 3106--Construction Reform Act of 2015

    H.R. 3106 would require the Department of Veterans Affairs 
(VA) to hire an Assistant Inspector General for construction 
projects. That official would be responsible for assessing the 
planning, design, and execution of major construction projects 
and leases at VA. Based on the average salary of senior 
executive service employees at VA, we estimate the salary and 
benefits for this position would amount to about $215,000 in 
2016. After adjusting for inflation, CBO estimates that 
implementing this provision would cost $1 million over the 
2016-2020 period.
    The bill also would modify VA's procedures for managing 
major construction projects, require employee training on 
industry standards of construction projects, and require 
quarterly reports. CBO expects preparing necessary regulations, 
developing online training modules, and preparing reports would 
cost less than $500,000 over the 2016-2020 period.
    In addition, the bill would authorize new construction and 
renovation of five medical facilities for which funds have 
already been appropriated. Because spending on those projects 
would be limited to the amounts appropriated for those 
purposes, CBO estimates that implementing those provisions 
would not require additional appropriations.
    In total, CBO estimates that implementing H.R. 3106 would 
have discretionary costs of $1 million over the 2016-2020 
period; such spending would be subject to the availability of 
appropriated funds.
    Enacting H.R. 3106 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    CBO estimates that enacting H.R. 3106 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2026.
    H.R. 3106 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would not affect the budgets of state, local, or tribal 
governments.
    The CBO staff contact for this estimate is Ann E. Futrell. 
The estimate was approved by H. Samuel Papenfuss, Deputy 
Assistant Director for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates regarding H.R. 3106, as amended, prepared by the 
Director of the Congressional Budget Office pursuant to section 
423 of the Unfunded Mandates Reform Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act would be created by H.R. 
3106, as amended.

                 Statement of Constitutional Authority

    Pursuant to Article I, section 8 of the United States 
Constitution, the reported bill is authorized by Congress' 
power to ``provide for the common Defense and general Welfare 
of the United States.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

              Statement on Duplication of Federal Programs

    Pursuant to section 3(g) of H. Res. 5, 114th Cong. (2015), 
the Committee finds that no provision of H.R. 3106, as amended, 
establishes or reauthorizes a program of the Federal Government 
known to be duplicative of another Federal program, a program 
that was included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139, or a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance.

                   Disclosure of Directed Rulemaking

    Pursuant to section 3(i) of H. Res. 5, 114th Cong. (2015), 
the Committee estimates that H.R. 3106, as amended, contains no 
directed rule making that would require the Secretary to 
prescribe regulations.

             Section-by-Section Analysis of the Legislation


Section 1--Short title

    Section 1 would provide the short title of H.R. 3106, as 
amended, as the ``Construction Reform Act of 2015.''

Section 2--Department of Veterans Affairs construction reforms

    Section 2(a) would amend Section 8103 of title 38 U.S.C., 
by adding at the end a new subsection (e). Subsection (e) of 
section 8103 of title 38 U.S.C., would require the Secretary to 
enter into an agreement with an appropriate non-Department 
Federal entity to provide full project management services--
including the management over the project design, acquisition, 
construction, and contract change--for any super construction 
project and require the Secretary to reimburse such Federal 
entity for all costs associated with the provision of project 
management services under such agreement.
    Section 2(b) would amend section 8103 of title 38 U.S.C., 
by adding at the end new subsections (f), (g), (h), and (i).
    Proposed subsection (f) of section 8103 of title 38 U.S.C., 
would require the Secretary to use, to the maximum extent 
practicable, industry standard, standard designs, and best 
practices in carrying out the construction of medical 
facilities.
    Proposed subsection (g) of section 8103 of title 38 U.S.C., 
would require the Secretary to provide, on a non-reimbursable 
basis, a non-Department Federal entity with which the Secretary 
has entered into an agreement under subsection (e): design, 
planning, and construction assistance before the entity issues 
a request for proposals for the design or construction of the 
super construction project covered by the agreement; any 
documents or information needed for the entity to carry out the 
responsibilities of the entity with respect to the super 
construction project; and, upon the request of the entity, any 
other assistance that the entity determines necessary to carry 
out such responsibilities.
    Proposed subsection (h) of section 8103 of title 38 U.S.C., 
would require a non-Department Federal entity with which the 
Secretary has entered into an agreement under subsection (e) to 
issue a final decision on a proposed change to a contract 
entered into by the non-Department Federal entity that is 
estimated at a value of less than $250,000 by not later than 30 
days after the date on which the change is proposed and, with 
respect to a proposed change to such contract that is estimated 
at a value of $250,000 or more, authorize the Secretary to 
provide the entity the Secretary's recommendations regarding 
the change and authorize the Secretary to issue the final 
decision regarding such change during the 30-day period 
beginning on the date on which the entity furnished to the 
Secretary information regarding such change and, if the 
Secretary does not issue a final decision during the 30-day 
period described above, authorize the non-Department Federal 
entity to issue a final decision regarding such change by no 
later than 90 days from the date the entity is furnished 
information regarding such change by the Secretary.
    Proposed subsection (i) of section 8103 of title 38 U.S.C., 
would require the Secretary to ensure that each employee of the 
Department with responsibilities relating to the construction 
or alteration of medical facilities--including such 
construction or alteration carried out pursuant to contracts or 
agreements--undergoes a program of ongoing professional 
training and development designed to ensure that employees 
maintain adequate expertise relating to industry standards and 
best practices for the acquisition of design and construction 
services and authorize the Secretary to provide such training 
program through a contract or agreement with a non-Department 
Federal entity or with a non-Department Federal entity.
    Section 2(c) would amend section 8104(a) of title 38 
U.S.C., by redesignating paragraph (3) as paragraph (4); by 
inserting after paragraph (2) a new paragraph (3). The new 
paragraph (3) would prohibit the Secretary from obligating or 
expending funds for advance planning or design for any super 
construction project until 60 days after the date on which the 
Secretary submits to the Committees on Veterans' Affairs and 
Appropriations of the House of Representatives and Senate 
notice of such obligation or expenditure. The new paragraph 
(4), as redesignated in this section, contains a new 
subparagraph (C) that would define the term ``super 
construction project'' as a project for the construction, 
alteration, and acquisition of a medical facility involving a 
total expenditure of more than $1 million but not an 
acquisition by exchange and stipulate that the amendments made 
in this section would be required to take effect on the date of 
the enactment of this Act and are required to apply with 
respect to a construction project that is initiated on or after 
that date.
    Section 2(d) would amend subsection (c) of section 8104 of 
title 38 U.S.C., to prohibit the Secretary from obligating 
funds for a major medical facility project or a super 
construction project approved by a law described in subsection 
(a)(2) in an amount that would cause the total amount obligated 
for that project to exceed the amount specified in the law for 
that project (or would add to total obligations exceeding such 
specified amount) by not more than 10 percentunless the 
Committee on Veterans' Affairs and the Committee on Appropriations of 
the Senate and the Committee on Veterans' Affairs and the Committee on 
Appropriations of the House of Representatives each approve in writing 
the obligation of those funds. This Section would also require the 
Secretary to enter into a contract with an appropriate non-Department 
Federal entity with the ability to conduct forensic audits on medical 
facility projects for the conduct of an external forensic audit of the 
expenditures relating to any major medical facility or super 
construction project for which the total expenditures exceed the amount 
specified in the law for the project by more than 25 percent and to 
enter into a contract with an appropriate non-Department Federal entity 
with the ability to conduct forensic audits on medical facility 
projects for the conduct of an external audit of the medical center 
construction project in Aurora, Colorado.'' Additionally, Section(2)(d) 
would amend subsection (d) of section 8104 of title 38 U.S.C. in 
paragraph (2)(B) in the matter preceding clause (i) by striking 
``Whenever'' and inserting ``Before'' and by adding at the end a new 
paragraph preventing the Secretary from obligating any funds described 
in paragraph (1) or amounts described in (2) before the date that is 30 
days after the notification submitted under paragraph (1) or paragraph 
(2)(B), as the case may be, unless the Committee on Veterans' Affairs 
and the Committee on Appropriations of the Senate and the Committee on 
Veterans' Affairs and the Committee on Appropriations of the House of 
Representatives each approve in writing the obligation of those funds 
or amounts. Section 2(d) would further amend subsection (d)(1) of 
section 8104 of title 38 U.S.C., by striking ``each committee'' and 
inserting ``the Committee on Veterans' Affairs and the Committee on 
Appropriations of the Senate and the Committee on Veterans' Affairs and 
the Committee on Appropriations of the House of Representatives'' and 
amend subsection (d)(2)(B) of section 8104 of title 38 U.S.C., by 
adding at the end a new clause that would stipulate that, with respect 
to the major construction project that is the source of the bid 
savings, the amounts already obligated or available in the project 
reserve for such project, the percentage of such project that has been 
completed, and the amount of such bid savings that is already obligated 
or otherwise being used for a purpose other than such project.
    Section 2(e) would amend subchapter I of chapter 81 of 
title 38 U.S.C., by inserting a new section entitled, 
``Sec. 8120. Quarterly report on super construction projects'' 
and making relevant clerical amendments.
    Sec. 8120(a) would require the Secretary to submit, by not 
later than 30 days after the last day of each fiscal quarter, a 
quarterly report on the super construction projects carried out 
by the Secretary during such quarter to the Committees on 
Veterans' Affairs of the Senate and the House of 
Representatives and would require the quarterly report to 
include, for each such project, the budgetary and scheduling 
status of the project as of the last day of the quarter covered 
by the report and the actual cost and schedule variances of the 
project as of such day compared to the planned cost and 
schedules for the project.
    Sec. 8120(b) would define the term ``super construction 
project'' as the meaning given such term in section 
8103(a)(4)(C) of title 38 U.S.C.
    Section 2(f) would require the Secretary to complete a 
master plan to inform investment decisions and funding requests 
over a 10-year period by not later than December 31, 2016, for 
each medical facility to meet the health care needs of a 
changing veteran population through a combination of health 
care from VA and community resources and to maximize the best 
use of the land and structures compromising such medical 
facility. Section 2(f) would also require the Secretary to 
complete a master plan for each medical facility of the 
Department for which construction is completed after the date 
of the enactment of this Act by not later than the earlier of 
either the date on which activation is completed or the date of 
the formal dedication of the facility.

Section 3--Modification of authorization of fiscal year 2008 major 
        medical facility project at department medical center in Tampa, 
        Florida

    Section 3(a) would amend chapter 3 of the Supplemental 
Appropriations Act of 2008 (P.L. 110-252; 122 Stat. 2326) by 
inserting ``and for constructing a new bed tower in Tampa, 
Florida, in lieu of providing bed tower upgrades at such 
medical center'' after ``Five Year Capital Plan'' under the 
heading ``Department of Veterans Affairs--Departmental 
Administration--Construction, Major Projects''.
    Section 3(b) would designate subsection (a) as an emergency 
requirement pursuant to section 4(g) of the Statutory Pay-As-
You-Go Act of 2010 (2 U.S.C. 933(g)) and, in the Senate, 
designate subsection (a) as an emergency requirement pursuant 
to section 403(a) of S. Con. Res. 13 (111th Congress), the 
concurrent resolution on the budget for fiscal year 2010.

Section 4--Authorization of Fiscal Year 2015 major medical facility 
        projects

    Section 4(a) would authorize the Secretary of Veterans 
Affairs to carry out the following major medical facility 
projects, with each project to be carried out in an amount not 
to exceed the amount specified for that project: construction 
of a community living center, outpatient clinic, renovated 
domiciliary, and renovation of existing buildings in 
Canandaigua, New York, in an amount not to exceed $158,980,000; 
seismic corrections to the mental health and community living 
center in Long Beach, California, in an amount not to exceed 
$126,100,000; seismic corrections of 12 buildings in West Los 
Angeles, California, in an amount not to exceed $70,500,000; 
and the construction of a spinal cord injury building and 
seismic corrections in San Diego, California, in an amount not 
to exceed $205,840,000.
    Section 4(b) of the bill would authorize $561,420,000 to be 
appropriated to the Secretary of Veterans Affairs for Fiscal 
Year 2015 or the year in which funds are appropriated for the 
Construction, Major Projects account for the projects 
authorized in subsection (a).
    Section 4(c) would stipulate that the projects authorized 
under this Section may only be carried out using: funds 
appropriated for Fiscal Year 2015 pursuant to the authorization 
of appropriations in subsection (b); funds available for 
Construction, Major Projects for a fiscal year before Fiscal 
Year 2015 that remain available for obligation; funds available 
for Construction, Major Projects, for a fiscal year after 
Fiscal Year 2015 that remain available for obligation; funds 
appropriated for Construction, Major Projects, for Fiscal Year 
2015 for a category of activity not specific to a project; 
funds appropriated for Construction, Major Projects, for a 
Fiscal Year before 2015 for a category of activity not specific 
to a project; and funds appropriated for Construction, Major 
Projects, for a Fiscal Year after 2015 for a category of 
activity not specific to a project.

Section 5--Assistant Inspector General for Construction

    Section 5(a) would amend Chapter 3 of title 38 U.S.C. by 
inserting, after section 312, a new section entitled, 
``Sec. 312A. Assistant Inspector General for Construction.''
    Proposed sec. 312A(a) would create an Assistant Inspector 
General for Construction within the VA Office of the Inspector 
General. The Assistant Inspector General for Construction would 
be responsible for conducting, supervising, and coordinating 
audits, evaluations, and investigations of the planning, 
design, contracting, execution, and construction of facilities 
and infrastructure of VA, including major and minor 
construction projects and leases.
    Proposed sec. 312A(b) would require any individual 
appointment as the Assistant Inspector General for Construction 
to have expertise in construction and facilities management.
    Proposed sec. 312A(c) would require the Assistant Inspector 
General for Construction to submit a report summarizing his/her 
activities during the 120-day period ending on the day of the 
report to the Committees on Veterans' Affairs of the Senate and 
the House of Representatives by not later than 60 days after an 
Assistant Inspector General for Construction is appointed and 
quarterly after that. Sec. 312A(c) would also require the 
Assistant Inspector General for Construction to promptly 
provide the findings of any investigation undertaken to the 
Committees on Veterans' Affairs of the Senate and the House of 
Representatives and to promptly notify the Committees if a 
serious or flagrant problem or deficiency relating to the 
administration or operation of any VA construction program is 
identifying if, during the course of the investigation, the 
Assistant Inspector General for Construction determines that 
Congress should take immediate action. Sec. 312A(c) would 
further stipulate the prohibition against public disclosure of 
any information that is specifically prohibited from disclosure 
by any other provision of law or specifically required by 
Executive Order to be protected from disclosure in the interest 
of national defense or national security or in the conduct of 
foreign affairs or part of an ongoing criminal investigation.
    Section 5(b) would amend the table of contents at the 
beginning of Chapter 3 of title 38 U.S.C., by inserting ``312A. 
Assistant Inspector General for Construction'' after the item 
relating to section 312.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, existing law in which no change is 
proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italic, and existing law in which no 
change is proposed is shown in roman):

TITLE 38, UNITED STATES CODE

           *       *       *       *       *       *       *


PART I--GENERAL PROVISIONS

           *       *       *       *       *       *       *


               CHAPTER 3--DEPARTMENT OF VETERANS AFFAIRS

Sec.
301. Department.
     * * * * * * *
312A. Assistant Inspector General for Construction.

           *       *       *       *       *       *       *


Sec. 312A. Assistant Inspector General for Construction

  (a) In General.--There is in the Office of Inspector General 
an Assistant Inspector General for Construction. The Assistant 
Inspector General for Construction is responsible for 
conducting, supervising, and coordinating audits, evaluations, 
and investigations of the planning, design, contracting, 
execution, and construction of facilities and infrastructure of 
the Department, including major and minor construction projects 
and leases.
  (b) Qualifications.--Each individual appointed as Assistant 
Inspector General for Construction shall be an individual who 
has expertise in construction and facilities management.
  (c) Reports.--(1) Not later than 60 days after the 
appointment of an individual as the Assistant Inspector General 
for Construction, and every calendar quarter thereafter, the 
Assistant Inspector General for Construction shall submit to 
the Committees on Veterans' Affairs of the Senate and House of 
Representatives a report summarizing the activities of the 
Assistant Inspector General for Construction during the 120-day 
period ending on the date of such report.
  (2) In addition to the report required in paragraph (1), and 
the requirements contained in section 5 of the Inspector 
General Act of 1978 (5 U.S.C. App.), the Assistant Inspector 
General for Construction shall promptly provide to the 
Committees on Veterans' Affairs of the Senate and House of 
Representatives the findings of any investigation undertaken by 
the Assistant Inspector General for Construction, and shall 
notify the Committees promptly if the Assistant Inspector 
General for Construction identifies any serious or flagrant 
problem or deficiency relating to the administration or 
operation of any construction program of the Department, if, 
during the course of any investigation, the Assistant Inspector 
General for Construction determines that Congress should take 
immediate action.
  (3) Nothing in this subsection shall be construed to 
authorize the public disclosure of information that is--
          (A) specifically prohibited from disclosure by any 
        other provision of law;
          (B) specifically required by Executive Order to be 
        protected from disclosure in the interest of national 
        defense or national security or in the conduct of 
        foreign affairs; or
          (C) a part of an ongoing criminal investigation.

           *       *       *       *       *       *       *


PART VI--ACQUISITION AND DISPOSITION OF PROPERTY

           *       *       *       *       *       *       *


   CHAPTER 81--ACQUISITION AND OPERATION OF HOSPITAL AND DOMICILIARY 
    FACILITIES; PROCUREMENT AND SUPPLY; ENHANCED-USE LEASES OF REAL 
                                PROPERTY

      SUBCHAPTER I--ACQUISITION AND OPERATION OF MEDICAL FACILITIES

Sec.
8101. Definitions.
     * * * * * * *
8120. Quarterly report on super construction projects.
     * * * * * * *

SUBCHAPTER I--ACQUISITION AND OPERATION OF MEDICAL FACILITIES

           *       *       *       *       *       *       *


Sec. 8103. Authority to construct and alter, and to acquire sites for, 
                    medical facilities

  (a) Subject to section 8104 of this title, the Secretary--
          (1) may construct or alter any medical facility and 
        may acquire, by purchase, lease, condemnation, 
        donation, exchange, or otherwise, such land or 
        interests in land as the Secretary considers necessary 
        for use as the site for such construction or 
        alteration;
          (2) may acquire, by purchase, lease, condemnation, 
        donation, exchange, or otherwise, any facility 
        (including the site of such facility) that the 
        Secretary considers necessary for use as a medical 
        facility; and
          (3) in order to assure compliance with section 
        8110(a)(2) of this title, in the case of any outpatient 
        medical facility for which it is proposed to lease 
        space and for which a qualified lessor and an 
        appropriate leasing arrangement are available, shall 
        execute a lease for such facility within 12 months 
        after funds are made available for such purpose.
  (b) Whenever the Secretary considers it to be in the interest 
of the United States to construct a new medical facility to 
replace an existing medical facility, the Secretary (1) may 
demolish the existing facility and use the site on which it is 
located for the site of the new medical facility, or (2) if in 
the judgment of the Secretary it is more advantageous to 
construct such medical facility on a different site in the same 
locality, may exchange such existing facility and the site of 
such existing facility for the different site.
  (c) Whenever the Secretary determines that any site acquired 
for the construction of a medical facility is not suitable for 
that purpose, the Secretary may exchange such site for another 
site to be used for that purpose or may sell such site.
  (d)(1) The Secretary may provide for the acquisition of not 
more than three facilities for the provision of outpatient 
services or nursing home care through lease-purchase 
arrangements on real property under the jurisdiction of the 
Department of Veterans Affairs.
  (2)(A) In carrying out this subsection and notwithstanding 
any other provision of law, the Secretary may lease, with or 
without compensation and for a period of not to exceed 35 
years, to another party any of the real property described in 
paragraph (1) of this subsection.
  (B) Such real property shall be used as the site of a 
facility referred to in paragraph (1) of this subsection--
          (i) constructed and owned by the lessee of such real 
        property; and
          (ii) leased under paragraph (3)(A) of this subsection 
        to the Department for such use and for such other 
        activities as the Secretary determines are appropriate.
  (3)(A) The Secretary may enter into a lease for the use of 
any facility described in paragraph (2)(B) of this subsection 
for not more than 35 years under such terms and conditions as 
may be in the best interests of the Department.
  (B) Each agreement to lease a facility under subparagraph (A) 
of this paragraph shall include a provision that--
          (i) the obligation of the United States to make 
        payments under the agreement is subject to the 
        availability of appropriations for that purpose; and
          (ii) the ownership of such facility shall vest in the 
        United States at the end of such lease.
  (4)(A) The Secretary may sublease any space in such a 
facility to another party at a rate not less than--
          (i) the rental rate paid by the Secretary for such 
        space under paragraph (3) of this subsection; plus
          (ii) the amount the Secretary pays for the costs of 
        administering such facility (including operation, 
        maintenance, utility, and rehabilitation costs) which 
        are attributable to such space.
  (B) In any such sublease, the Secretary shall include such 
terms relating to default and nonperformance as the Secretary 
considers appropriate to protect the interests of the United 
States.
  (5) The Secretary shall use the receipts of any payment for 
the lease of real property under paragraph (2) for the payment 
of the lease of a facility under paragraph (3).
  (6) The authority to enter into an agreement under this 
subsection--
          (A) shall not take effect until the Secretary has 
        entered into agreements under section 316 of this title 
        to carry out at least three collocations; and
          (B) shall expire on October 1, 1993.
  (e) In the case of any super construction project (as such 
term is defined in section 8104(a)(4)(C)), the Secretary shall 
enter into an agreement with an appropriate non-Department 
Federal entity to provide full project management services for 
the super construction project, including management over the 
project design, acquisition, construction, and contract 
changes. Such agreement shall provide that the Secretary shall 
reimburse such Federal entity for all costs associated with the 
provision of project management services under the agreement.
  (f) To the maximum extent practicable, the Secretary shall 
use industry standards, standard designs, and best practices in 
carrying out the construction of medical facilities.
  (g)(1) The Secretary shall provide to a non-Department 
Federal entity with which the Secretary has entered into an 
agreement under subsection (e)--
          (A) design, planning, and construction assistance 
        before the entity issues a request for proposals for 
        the design or construction of the super construction 
        project covered by the agreement;
          (B) any documents or information needed for the 
        entity to carry out the responsibilities of the entity 
        with respect to the super construction project; and
          (C) upon the request of the entity, any other 
        assistance that the entity determines necessary to 
        carry out such responsibilities.
  (2) Any assistance provided under paragraph (1) shall be 
provided to the non-Department Federal entity on a non-
reimbursable basis.
  (h)(1) With respect to a proposed change to a contract 
entered into by a non-Department Federal entity with which the 
Secretary has entered into an agreement under subsection (e) 
that is estimated at a value of less than $250,000, the non-
Department Federal entity shall issue a final decision 
regarding such change not later than 30 days after the date on 
which the change is proposed.
  (2) With respect to a proposed change to such a contract that 
is estimated at a value of $250,000 or more--
          (A) the Secretary may provide to the entity the 
        recommendations of the Secretary regarding such change;
          (B) during the 30-day period beginning on the date on 
        which the entity furnishes to the Secretary information 
        regarding such change, the Secretary may issue the 
        final decision regarding such change; and
          (C) if the Secretary does not issue a final decision 
        under subparagraph (B), during the 30-day period 
        following the period described in such paragraph, the 
        entity shall issue a final decision regarding such a 
        change no later than 90 days from when the entity 
        furnished information regarding such a change to the 
        Secretary.
  (i) The Secretary shall ensure that each employee of the 
Department with responsibilities relating to the construction 
or alteration of medical facilities, including such 
construction or alteration carried out pursuant to contracts or 
agreements, undergoes a program of ongoing professional 
training and development. Such program shall be designed to 
ensure that employees maintain adequate expertise relating to 
industry standards and best practices for the acquisition of 
design and construction services. The Secretary may provide the 
program under this subsection through a contract or agreement 
with a non-Federal entity or with a non-Department Federal 
entity.

Sec. 8104. Congressional approval of certain medical facility 
                    acquisitions

  (a)(1) The purpose of this subsection is to enable Congress 
to ensure the equitable distribution of medical facilities 
throughout the United States, taking into consideration the 
comparative urgency of the need for the services to be provided 
in the case of each particular facility.
  (2) No funds may be appropriated for any fiscal year, and the 
Secretary may not obligate or expend funds (other than for 
advance planning and design), for any major medical facility 
project or any major medical facility lease unless funds for 
that project or lease have been specifically authorized by law.
  (3) The Secretary may not obligate or expend funds for 
advance planning or design for any super construction project, 
until the date that is 60 days after the date on which the 
Secretary submits to the Committee on Veterans' Affairs and the 
Committee on Appropriations of the Senate and the Committee on 
Veterans' Affairs and the Committee on Appropriations of the 
House of Representatives notice of such obligation or 
expenditure.
  [(3)] (4) For the purpose of this subsection:
          (A) The term ``major medical facility project'' means 
        a project for the construction, alteration, or 
        acquisition of a medical facility involving a total 
        expenditure of more than $10,000,000, but such term 
        does not include an acquisition by exchange.
          (B) The term ``major medical facility lease'' means a 
        lease for space for use as a new medical facility at an 
        average annual rental of more than $1,000,000.
          (C) The term ``super construction project'' means a 
        project for the construction, alteration, or 
        acquisition of a medical facility involving a total 
        expenditure of more than $100,000,000, but such term 
        does not include an acquisition by exchange.
  (b) Whenever the President or the Secretary submit to the 
Congress a request for the funding of a major medical facility 
project (as defined in subsection (a)(3)(A)) or a major medical 
facility lease (as defined in subsection (a)(3)(B)), the 
Secretary shall submit to each committee, on the same day, a 
prospectus of the proposed medical facility. Any such 
prospectus shall include the following:
          (1) A detailed estimate of the total costs of the 
        medical facility to be constructed, altered, leased, or 
        otherwise acquired under this subchapter, including a 
        description of the location of such facility and, in 
        the case of a prospectus proposing the construction of 
        a new or replacement medical facility, a detailed 
        report of the consideration that was given to acquiring 
        an existing facility by lease or purchase and to the 
        sharing of health-care resources with the Department of 
        Defense under section 8111 of this title. Such detailed 
        estimate shall include an identification of each of the 
        following:
                  (A) Total construction costs.
                  (B) Activation costs.
                  (C) Special purpose alterations (lump-sum 
                payment) costs.
                  (D) Number of personnel.
                  (E) Total costs of ancillary services, 
                equipment, and all other items.
          (2) Demographic data applicable to such facility, 
        including information on projected changes in the 
        population of veterans to be served by the facility 
        over a five-year period, a ten-year period, and a 
        twenty-year period.
          (3) Current and projected workload and utilization 
        data regarding the facility, including information on 
        projected changes in workload and utilization over a 
        five-year period, a ten-year period, and a twenty-year 
        period.
          (4) Projected operating costs of the facility, 
        including both recurring and non-recurring costs 
        (including and identifying both recurring and non-
        recurring costs (including activation costs and total 
        costs of ancillary services, equipment and all other 
        items)) over a five-year period, a ten-year period, and 
        a twenty-year period.
          (5) The priority score assigned to the project or 
        lease under the Department's prioritization methodology 
        and, if the project or lease is being proposed for 
        funding before a project or lease with a higher score, 
        a specific explanation of the factors other than the 
        priority score that were considered and the basis on 
        which the project or lease is proposed for funding 
        ahead of projects or leases with higher priority 
        scores.
          (6) In the case of a prospectus proposing the 
        construction of a new or replacement medical facility, 
        each of the following:
                  (A) A detailed estimate of the total costs 
                (including total construction costs, activation 
                costs, special purpose alterations (lump-sum 
                payment) costs, number of personnel and total 
                costs of ancillary services, equipment and all 
                other items) for each alternative to 
                construction of the facility that was 
                considered.
                  (B) A comparison of total costs to total 
                benefits for each such alternative.
                  (C) An explanation of why the preferred 
                alternative is the most effective means to 
                achieve the stated project goals and the most 
                cost-effective alternative.
          (7) In the case of a prospectus proposing funding for 
        a major medical facility lease, a detailed analysis of 
        how the lease is expected to comply with Office of 
        Management and Budget Circular A-11 and section 1341 of 
        title 31 (commonly referred to as the ``Anti-Deficiency 
        Act''). Any such analysis shall include--
                  (A) an analysis of the classification of the 
                lease as a ``lease-purchase'', ``capital 
                lease'', or ``operating lease'' as those terms 
                are defined in Office of Management and Budget 
                Circular A-11;
                  (B) an analysis of the obligation of 
                budgetary resources associated with the lease; 
                and
                  (C) an analysis of the methodology used in 
                determining the asset cost, fair market value, 
                and cancellation costs of the lease.
  [(c) Not less than 30 days before obligating funds for a 
major medical facility project approved by a law described in 
subsection (a)(2) of this section in an amount that would cause 
the total amount obligated for that project to exceed the 
amount specified in the law for that project (or would add to 
total obligations exceeding such specified amount) by more than 
10 percent, the Secretary shall provide the committees with 
notice of the Secretary's intention to do so and the reasons 
for the specified amount being exceeded.]
  (c)(1) The Secretary may not obligate funds for a major 
medical facility project or a super construction project 
approved by a law described in subsection (a)(2) in an amount 
that would cause the total amount obligated for that project to 
exceed the amount specified in the law for that project (or 
would add to total obligations exceeding such specified amount) 
by more than 10 percent unless the Committee on Veterans' 
Affairs and the Committee on Appropriations of the Senate and 
the Committee on Veterans' Affairs and the Committee on 
Appropriations of the House of Representatives each approve in 
writing the obligation of those funds.
  (2) The Secretary shall--
          (A) enter into a contract with an appropriate non-
        department Federal entity with the ability to conduct 
        forensic audits on medical facility projects for the 
        conduct of an external forensic audit of the 
        expenditures relating to any major medical facility or 
        super construction project for which the total 
        expenditures exceed the amount specified in the law for 
        the project by more than 25 percent; and
          (B) enter into a contract with an appropriate non-
        department Federal entity with the ability to conduct 
        forensic audits on medical facility projects for the 
        conduct of an external audit of the medical center 
        construction project in Aurora, Colorado.
  (d)(1) Except as provided in paragraph (2), in any case in 
which the Secretary proposes that funds be used for a purpose 
other than the purpose for which such funds were appropriated, 
the Secretary shall promptly notify [each committee] the 
Committee on Veterans' Affairs and the Committee on 
Appropriations of the Senate and the Committee on Veterans' 
Affairs and the Committee on Appropriations of the House of 
Representatives, in writing, of the particulars involved and 
the reasons why such funds were not used for the purpose for 
which appropriated.
  (2)(A) In any fiscal year, unobligated amounts in the 
Construction, Major Projects account that are a direct result 
of bid savings from a major construction project may only be 
obligated for major construction projects authorized for that 
fiscal year or a previous fiscal year.
  (B) [Whenever] Before the Secretary obligates amounts for a 
major construction project under subparagraph (A), the 
Secretary shall submit to the Committee on Veterans' Affairs 
and the Committee on Appropriations of the Senate and the 
Committee on Veterans' Affairs and the Committee on 
Appropriations of the House of Representatives notice of the 
following:
          (i) The major construction project that is the source 
        of the bid savings.
          (ii) The other major construction project for which 
        the amounts are being obligated.
          (iii) The amounts being obligated for such other 
        major construction project.
          (iv) With respect to the major construction project 
        that is the source of the bid savings--
                  (I) the amounts already obligated or 
                available in the project reserve for such 
                project;
                  (II) the percentage of such project that has 
                been completed; and
                  (III) the amount of such bid savings that is 
                already obligated or otherwise being used for a 
                purpose other than such project.
  (C) The Secretary may not obligate an amount under 
subparagraph (A) to expand the purpose of a major construction 
project except pursuant to a provision of law enacted after the 
date on which the Secretary submits to the committees described 
in subparagraph (B) notice of the following:
          (i) The major construction project that is the source 
        of the bid savings.
          (ii) The major construction project for which the 
        Secretary intends to expand the purpose.
          (iii) A description of such expansion of purpose.
          (iv) The amounts the Secretary intends to obligate to 
        expand the purpose.
  (3) The Secretary may not obligate any funds described in 
paragraph (1) or amounts described in paragraph (2) before the 
date that is 30 days after the notification submitted under 
paragraph (1) or paragraph (2)(B), as the case may be, unless 
the Committee on Veterans' Affairs and the Committee on 
Appropriations of the Senate and the Committee on Veterans' 
Affairs and the Committee on Appropriations of the House of 
Representatives each approve in writing the obligation of those 
funds or amounts.
  (e) The Secretary may accept gifts or donations for any of 
the purposes of this subchapter.
  (f) The Secretary may not obligate funds in an amount in 
excess of $500,000 from the Advance Planning Fund of the 
Department toward design or development of a major medical 
facility project (as defined in subsection (a)(3)(A)) until--
          (1) the Secretary submits to the committees a report 
        on the proposed obligation; and
          (2) a period of 30 days has passed after the date on 
        which the report is received by the committees.
  (g) The limitation in subsection (f) does not apply to a 
project for which funds have been authorized by law in 
accordance with subsection (a)(2).
  (h)(1) Not less than 30 days before entering into a major 
medical facility lease, the Secretary shall submit to the 
Committees on Veterans' Affairs of the Senate and the House of 
Representatives--
          (A) notice of the Secretary's intention to enter into 
        the lease;
          (B) a detailed summary of the proposed lease;
          (C) a description and analysis of any differences 
        between the prospectus submitted pursuant to subsection 
        (b) and the proposed lease; and
          (D) a scoring analysis demonstrating that the 
        proposed lease fully complies with Office of Management 
        and Budget Circular A-11.
  (2) Each committee described in paragraph (1) shall ensure 
that any information submitted to the committee under such 
paragraph is treated by the committee with the same level of 
confidentiality as is required by law of the Secretary and 
subject to the same statutory penalties for unauthorized 
disclosure or use as the Secretary.
  (3) Not more than 30 days after entering into a major medical 
facility lease, the Secretary shall submit to each committee 
described in paragraph (1) a report on any material differences 
between the lease that was entered into and the proposed lease 
described under such paragraph, including how the lease that 
was entered into changes the previously submitted scoring 
analysis described in subparagraph (D) of such paragraph.

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Sec. 8120. Quarterly report on super construction projects

  (a) Quarterly Reports Required.--Not later than 30 days after 
the last day of each fiscal quarter the Secretary shall submit 
to the Committees on Veterans' Affairs of the Senate and House 
of Representatives on the super construction projects carried 
out by the Secretary during such quarter. Each such report 
shall include, for each such project--
          (1) the budgetary and scheduling status of the 
        project, as of the last day of the quarter covered by 
        the report; and
          (2) the actual cost and schedule variances of the 
        project, as of such day, compared to the planned cost 
        and schedules for the project.
  (b) Super Construction Project Defined.--In this section, the 
term ``super construction project'' has the meaning given such 
term in section 8103(a)(4)(C) of this title.

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